FOR IMMEDIATE RELEASE

APRIL 29, 2014

ACCESS MIDSTREAM PARTNERS, L.P. REPORTS FINANCIAL

RESULTS FOR THE 2014 FIRST QUARTER

Partnership Reports 2014 First Quarter Adjusted EBITDA of $250 Million, Distributable Cash Flow of $179 Million and Net Income of $61 Million

Partnership Increases Quarterly Distribution to $0.575 per Unit

OKLAHOMA CITY, OKLAHOMA, APRIL 29, 2014 – Access Midstream Partners, L.P. (NYSE:ACMP) today announced financial results for the 2014 first quarter.  The Partnership’s adjusted EBITDA for the 2014 first quarter totaled $250.2 million, an increase of $65.8 million, or 35.7%, from 2013 first quarter adjusted EBITDA of $184.4 million. Net income attributable to the Partnership for the 2014 first quarter totaled $61.1 million, an increase of $1.6 million, or 2.7%, from 2013 first quarter net income of $59.5 million.   Distributable cash flow (DCF) for the 2014 first quarter totaled $179.3 million, an increase of $48.7 million, or 37.3%, from 2013 first quarter DCF of $130.6 million and resulted in a distribution coverage ratio of 1.38.  Financial terms are defined on pages two through four of this release.

Throughput for the 2014 first quarter totaled 344.5 billion cubic feet (bcf) of natural gas, or 3.83 bcf per day, an increase of 7.9% from 2013 first quarter throughput of 3.55 bcf per day. Throughput increased in the Partnership’s Marcellus, Utica, Eagle Ford and Niobrara Shale regions.  Partnership revenue for the 2014 first quarter totaled $277.1 million, an increase of $40.1 million, or 16.9%, compared to 2013 first quarter revenue of $237.0 million.  Revenues in both periods exclude revenues attributable to the Partnership’s equity investments as those revenues are accounted for as part of the Partnership’s investments in unconsolidated affiliates.  If the Partnership’s proportional share of revenue from equity investments was included, revenue for the 2014 first quarter would have totaled $356.0 million, an increase of $71.9 million, or 25.3%, compared to the 2013 first quarter.

Capital expenditures during the 2014 first quarter totaled $332.1 million, including maintenance capital expenditures of $32.5 million.  These capital expenditures included $109.4 million for the Partnership’s share of capital expenditures in entities accounted for as equity investments.  The Partnership remains on pace to invest $1.1 billion to $1.2 billion of growth capital in 2014.

Partnership Acquires Compression Assets

On March 31, 2014, the Partnership acquired certain midstream compression assets from MidCon Compression, L.L.C. (“MidCon”), a wholly owned subsidiary of Chesapeake Energy Corporation, for approximately $160 million.  The acquisition added natural gas compression assets, historically leased by the Partnership from MidCon, in the rapidly growing Utica Shale and Marcellus Shale regions.  This transaction provides the opportunity to insource a key cost element of the Partnership’s business model and adds the potential for additional future organic growth to the portfolio.  The acquired assets include more than 100 compression units with a combined capacity of approximately 200,000 horsepower.

 

 

 

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Senior Notes Offering

On March 7, 2014, the Partnership closed the offering of $750 million of the Partnership’s 4.875% senior notes due 2024.  The Partnership received net proceeds of $742.3 million from the senior notes offering which were used to repay borrowings outstanding under the Partnership’s revolving credit facility, including amounts incurred to fund the purchase price of and certain expenses related to the Partnership’s acquisition of compression assets from MidCon, and for general partnership purposes, including funding working capital and the Partnership’s capital expenditure program.

Partnership Increases Cash Distribution

On April 24, 2014, the Board of Directors of the Partnership’s general partner declared a quarterly cash distribution of $0.575 per unit for the 2014 first quarter, a $0.1075, or 23.0%, per unit increase over the 2013 first quarter distribution and a $0.02, or 3.6%, per unit increase over the 2013 fourth quarter distribution.  The distribution will be paid on May 15, 2014 to unitholders of record at the close of business on May 8, 2014.  DCF of $179.3 million for the 2014 first quarter provided distribution coverage of 1.38 times the amount required for the Partnership to fund the distribution to the general partner and the limited partners.

Management Comments

J. Mike Stice, Access Midstream Partners’ Chief Executive Officer, commented, “Our financial results in the first quarter once again exceeded expectations and reflect the continued strong execution of our organic growth plan.  Our business model and commitment to execution continue to generate predictable financial results creating outstanding returns for our investors.  The bolt on acquisition of compression assets completed during the first quarter provides additional opportunities for future growth and is just one example of the type of potential new growth opportunities within our current areas of operation.  We continue to pursue a number of similar opportunities that would leverage our best-in-class business model and our expansive operating footprint to further enhance our already leading growth profile.”

Conference Call Information

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Use of Non-GAAP Financial Measures

This press release and accompanying schedules include the non-GAAP financial measures of adjusted EBITDA and DCF.  The accompanying schedules provide reconciliations of these non-GAAP financial measures to their most directly comparable financial measures calculated and presented in accordance with GAAP.  Non-GAAP financial measures should not be considered as an alternative to GAAP measures such as net income, net cash provided by operating activities or any other measure of liquidity or financial performance calculated and presented in accordance with GAAP.  Investors should not consider adjusted EBITDA, DCF or adjusted DCF in isolation or as a substitute for analysis of the Partnership’s results as reported under GAAP.  Because these non-GAAP financial measures may be defined differently by other companies in our industry, the Partnership’s definition of adjusted EBITDA, DCF and adjusted DCF may not be comparable to similarly titled measures of other companies, thereby diminishing their utility.

Adjusted EBITDA.  The Partnership agreement defines adjusted EBITDA as net income (loss) before income tax expense, interest expense, depreciation and amortization expense and certain other items management believes affect the comparability of operating results.  Adjusted EBITDA is a non-GAAP financial measure that management and external users of our consolidated financial statements, such as industry analysts, investors, lenders and rating agencies, may use to assess:

·	The Partnership’s operating performance as compared to other publicly traded partnerships in the midstream energy industry, without regard to capital structure, historical cost basis or financing methods;

·	The Partnership’s ability to incur and service debt and fund capital expenditures;

·	The ability of the Partnership’s assets to generate sufficient cash flow to make distributions to unitholders; and

·	The viability of acquisitions and other capital expenditure projects and the returns on investment of various investment opportunities.

Management believes it is appropriate to exclude certain items from EBITDA because management believes these items affect the comparability of operating results.  The Partnership believes that the presentation of adjusted EBITDA in this press release provides information useful to investors in assessing its financial condition and results of operations.  The GAAP measure most directly comparable to adjusted EBITDA is net income.

Distributable Cash Flow.  The Partnership agreement defines DCF as adjusted EBITDA attributable to the Partnership adjusted for:

·	Addition of interest income;

·	Subtraction of net cash paid for interest expense;

·	Subtraction of maintenance capital expenditures; and

·	Subtraction of income taxes.

Management compares the DCF the Partnership generates to the cash distributions it expects to pay its partners.  Using this metric, management computes a distribution coverage ratio.  DCF is an important non-GAAP financial measure for our limited partners since it serves as an indicator of our success in providing a cash return on investment.  Specifically, this financial measure indicates to investors whether or not the Partnership is generating cash flows at a level that can sustain or support an increase in its quarterly cash distributions.  DCF is also a quantitative standard used by the investment community with respect to publicly traded partnerships because the value of a partnership unit is in part measured by its yield, which is based on the amount of cash distributions a partnership can pay to a unitholder.  The GAAP measure most directly comparable to DCF is net cash provided by operating activities.

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Access Midstream Partners, L.P. (NYSE:ACMP) is the industry’s largest gathering and processing master limited partnership as measured by throughput volume.  The Partnership owns, operates, develops and acquires natural gas gathering and processing systems and other midstream energy assets.  Headquartered in Oklahoma City, the Partnership's operations are focused on the Barnett, Eagle Ford, Haynesville, Marcellus, Niobrara and Utica Shales and Mid-Continent region of the U.S.  The Partnership’s common units are listed on the New York Stock Exchange under the symbol ACMP.  Further information is available at www.accessmidstream.com where the Partnership routinely posts announcements, updates, events, investor information and presentations and all recent press releases.

This press release includes forward-looking statements. Forward-looking statements give our current expectations or forecasts of future events. They include but are not limited to our business strategy and plans and objectives for future operations. We caution you not to place undue reliance on our forward-looking statements, which speak only as of the date of this release, and we undertake no obligations to update this information. Although we believe the expectations and forecasts reflected in these and other forward-looking statements are reasonable, we can give no assurance they will prove to be correct. They can be affected by inaccurate assumptions or by known or unknown risks and uncertainties. Factors that could cause actual results to differ materially from expected results are described under “Risk Factors” in our 2013 Annual Report on Form 10-K and our other SEC filings.

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Access Midstream Partners, L.P.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

($ in thousands, except per unit data)

(unaudited)

(1)	Excludes revenue from equity investments of $78.9 million and $47.1 million for the three months ended March 31, 2014 and 2013, respectively that is included in Income from unconsolidated affiliates.

If either Chesapeake Energy Corporation (“Chesapeake”) or Total E&P USA, Inc. (“Total”) does not meet its minimum volume commitment to the Partnership in the Barnett Shale region or Chesapeake does not meet its minimum volume commitment in the Haynesville Shale region under the relevant gas gathering agreement for specified annual periods, Chesapeake or Total is obligated to pay the Partnership a fee equal to the applicable fee for each mcf by which the applicable party’s minimum volume commitment for the year exceeds the actual volumes gathered on the Partnership’s systems.  Should payments be due under the minimum volume commitment with respect to any year, the Partnership recognizes the associated revenue in the fourth quarter of that year.

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Access Midstream Partners, L.P.

CONDENSED CONSOLIDATED BALANCE SHEETS

($ in thousands)

(unaudited)

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Access Midstream Partners, L.P.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

($ in thousands)

(unaudited)

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Access Midstream Partners, L.P.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

($ in thousands)

(unaudited)

(1)	EBITDA from unconsolidated affiliates is calculated as follows:

(2)	The Partnership maintains equity investments in 10 gathering systems in the Marcellus Shale, Utica East Ohio Midstream, LLC and Ranch Westex JV, LLC.

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Access Midstream Partners, L.P.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

($ in thousands)

(unaudited)

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Access Midstream Partners, L.P.

SEGMENT INFORMATION AND OPERATING STATISTICS

(unaudited)

(1)	Includes capital expenditures accounted for as part of the Partnership’s equity investments and excludes capital expenditures attributable to noncontrolling interests.  See page 9 of this release for required reconciliation to GAAP capital expenditures.

(2)	Throughput represents the net throughput allocated to the Partnership’s interest.