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FORWARD-LOOKING STATEMENTS
Certain statements and information in this presentation may constitute forward-looking statements. The words believe, expect, anticipate, plan, intend, foresee, should, would, could, or similar expressions are intended to identify forward-looking statements, which are generally not historical in nature. These forward-looking statements are based on current expectations and beliefs concerning future developments and their potential effect on us. While management believes that these forward-looking statements are reasonable as and when made, there can be no assurance that future developments affecting us will be those that we anticipate. All comments concerning our expectations for future revenues and operating results are based on our forecasts for our existing operations and do not include the potential impact of any future acquisitions. Our forward-looking statements involve significant risks and uncertainties (some of which are beyond our control) and assumptions that could cause actual results to differ materially from our historical experience and our present expectations or projections. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, those summarized below: dependence on Chesapeake Energy Corporation, Total E&P USA, Inc., Mitsui & Co., Anadarko Petroleum Corporation and Statoil for a majority of our revenues; the impact on our growth strategy and ability to increase cash distributions if producers do not increase the volume of natural gas they provide to our gathering systems; oil and natural gas realized prices; the termination of our gas gathering agreements; our potential inability to maintain existing distribution amounts or pay the minimum quarterly distribution to our unitholders; the limitations that Chesapeakes and our own level of indebtedness may have on our financial flexibility; our ability to obtain new sources of natural gas, which is dependent on factors largely beyond our control; the availability of capital resources to fund capital expenditures and other contractual obligations, and our ability to access those resources through the debt or equity capital markets; competitive conditions; the unavailability of third-party pipelines interconnected to our gathering systems or the potential that the volumes we gather do not meet the quality requirement of such pipelines; new asset construction may not result in revenue increases and will be subject to regulatory, environmental, political, legal and economic risks; our exposure to direct commodity price risk may increase in the future; our ability to maintain and/or obtain rights to operate our assets on land owned by third parties; hazards and operational risks that may not be fully covered by insurance; our dependence on Chesapeake for substantially all of our compression capacity; our lack of industry diversification; and
legislative or regulatory changes, including changes in environmental regulations, environmental risks, regulations by FERC and liability under federal and state environmental laws and regulations.
Other factors that could cause our actual results to differ from our projected results are described in our 2011 Form 10-K and our other SEC filings. Individuals are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise.
PARTNERSHIP OVERVIEW
Provides midstream gathering and processing services in leading unconventional plays including the Barnett, Eagle Ford, Haynesville, Marcellus, Niobrara and Utica Shales and Mid-Continent region As of December 2012, Global Infrastructure Partners and Williams each own 50% of the GP Customers include Chesapeake, Total, Statoil, Anadarko Petroleum, Mitsui, Shell and other producers The Partnership went public in July 2010 with a ~$513 million IPO; current public float is ~36% of outstanding units
Protected Distributions Strategically Located Assets Substantial Growth Potential Operational Excellence World-Class Sponsorship Experienced Management Team
~$3.5B of CAPEX in 2013 - 2015 generating contractual mid-teens return Enhanced strategic emphasis on third party opportunities
Maintain strong liquidity and a conservative balance sheet Target investment grade financial metrics to optimize cost of capital
Same team that has delivered industry leading performance since IPO Dedicated and experienced with a proven midstream track record
GIP provides strong M&A and financial capabilities Williams brings expertise across the midstream value chain
ACMP
Minimal exposure (fixed fee) Long-term acreage dedication Contractual protections Contractual protections Contractual protections Contractual protections Best in Class
Annual Fee Redetermination / Cost of Service and Fixed Fee with MVC Fee Tiers and Fee Tiers 10-20 Year Acreage Dedication 20 Year Acreage Dedication
Cost of Service (gathering) / Fixed Fee (processing) 15-20 Year Acreage Dedication
Cost of Service
Re-Contracting
Volume Protection
10 Year MVC Two Year EBITDA and Fee Commitment Redetermination in and Cost of Service 2012 and 2014 2.0% Fee Escalation Cost of Service
Annual Fee Redetermination / Two Year Fee Tiers 5 Year MVC and and Cost of Service Fee Tiers 2.5% Fee Escalation Cost of Service
Cost of Service (gathering only) Cost of Service (gathering) / 1.5% Fee Escalation (processing) Cost of Service (gathering only)
Cost of Service
Inflation Protection
Cost of Service
Capital Protection
Cost of Service
Cost of Service
Cost of Service
Commitment to maintain contract structure / business model as business grows Concentrated in low cost basins
Gathering and processing services located in the core of leading U.S. basins Counterparty Producer required to transfer ACMP contracts in the event of an upstream property sale All gathering fees are based on market, mid-teen return economics
Contractual growth
Organic Growth CAPEX
$ in millions $1,600-$1,700
Escalating MVC and EBITDA Commitment Fee redeterminations, cost of service and fee tiers Annual fee escalations
Organic growth CAPEX $345 million in 2011 $660 million in 2012 $1.6-$1.7 billion in 2013 $1.0-$1.1 billion in 2014 $800-900 million in 2015 New producer opportunities Bolt-on M&A focus
2011A
2012A
2013E
2014E
2015E
2011A
2012
2013E
2014E
2015E
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ACMP acquires a substantial majority of Chesapeake Energys remaining midstream assets (CMD) for $2.16 billion Unique opportunity to accelerate ACMPs drop down story
Partnership establishes a significant footprint in leading unconventional basins Enhances strategic scale and diversity
The Williams Companies, Inc. (WMB) partners with GIP, enhancing sponsorship of ACMP
WMB acquires 50% of ACMP GP and ~23% of LP Units; an endorsement of ACMPs strategic platform and potential Leading midstream operational and development capabilities complement ACMPs already strong position
Sponsors invest $700 million in new long-term equity in support of the transaction
Equity structured with PIK and subordinated features to support near-term build out of gathering and processing platform Demonstrates investment to ACMPs long term success
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TRANSACTION HIGHLIGHTS
EXPANDS SCALE AND DIVERSITY WITH STRATEGIC SPONSOR SUPPORT
Expanding Footprint and Scale Increased Diversification Creates the largest gathering and processing MLP measured by volume Addition of CMD midstream assets positions ACMP among largest midstream MLPs Adds significant acreage dedications in key unconventional basins Enhanced exposure to oil/liquids focused drilling and entry into gas processing segment of the value chain Low-risk gathering and processing contracts with appropriate downside protection that provide stable cash flow profile No direct commodity exposure in all basins with contractual features supporting cash flow generation Contractual features deliver predictable, growing cash flows Near-term contractual downside protection provides near-term revenue risk mitigation Leading long-term organic growth project pipeline Substantial growth capex expected to be deployed in the next five years, earning a contractual mid-teens return Significant incremental equity investment from strong sponsors in GIP and WMB Williams adds vast expertise across the midstream value chain for natural gas and NGLs with its significant strategic investment and endorsement of ACMP
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WORLD-CLASS SPONSORSHIP
Global Infrastructure Partners (GIP) is a leading global infrastructure investor Proven reputation as an infrastructure industry leader Deep energy sector expertise combined with industrial best practice operational management Energy investments include Access Midstream Partners, Ruby Pipeline, Transitgas Pipeline, Terra-Gen Power and Channelview Cogeneration GIP manages in excess of $15 billion within its two funds
Williams provides an established history of managing, developing and completing large scale organic projects within the midstream sector Williams management team adds further operational and development experience Potential to expand services to new customer base Ability to take advantage of shared services Benefit from best practices from industry leader
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Yrs Experience
President and COO Chesapeake Midstream Development, LLC Various senior management roles ConocoPhillips COO Crosstex Energy Services, LP Various senior management roles The Williams Companies CFO GE Security Americas Various finance and operations roles Conoco, Inc.
30 35 25
Board of Directors
35 25 35 15 35 15 35 25 30 35 25 30 35
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ASSET OVERVIEW
BARNETT OVERVIEW
MATURE ASSET WITH 10-YEAR MVC PROTECTION
Asset Summary
Resource Services Gas Gathering Systems Miles of Pipeline Gas Gathered Gas Compression (horsepower) Dedicated Area Contract Structure Dry Gas Gathering, Compression, Treating 34 854 1,066 mmcf/d 153,115 930,987 acres MVC and Fee Redetermination
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HAYNESVILLE OVERVIEW
MATURE ASSET WITH CONTRACTUAL PROTECTIONS
Asset Summary
Resource Services Gas Gathering Systems Miles of Pipeline Gas Gathered Gas Compression (horsepower) Dedicated Area Contract Structure Dry Gas Gathering, Compression, Treating 17 581 770 mmcf/d 20,195 546,739 acres Fixed fee with MVC, fee redetermination and fee tiers
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MARCELLUS OVERVIEW
STRATEGICALLY POSITIONED IN LEADING SHALE BASIN
Asset Summary
Resource Services Gas Gathering Systems Miles of Pipeline Gas Gathered (net) Gas Compression (horsepower) Dedicated Area Contract Structure Ownership Accounting Treatment Dry and Wet Gas Gathering, Compression 50 1,204 863 mmcf/d 94,975 1,739,640 acres Cost of Service and EBITDA Commitment ~ 48% ACMP owned and operated Equity Investment
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MID-CONTINENT OVERVIEW
LIQUIDS RICH GATHERING DEDICATION WITH RATE REDETERMINATION CONTRACT STRUCTURE
Asset Summary
Resource Services Gas Gathering Systems Miles of Pipeline Gas Gathered Gas Compression (horsepower) Dedicated Area Contract Structure Associated Gas (Oil), Dry and Wet Gas Gathering, Compression, Treating 178 2,603 559 mmcf/d 107,356 1,964,245 acres Annual Fee Redetermination
Mid-Continent Assets
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NIOBRARA OVERVIEW
LIQUIDS-RICH GATHERING & PROCESSING DEDICATION WITH COST OF SERVICE CONTRACT STRUCTURE
Asset Summary
Resource Services Gas Gathering Systems Miles of Pipeline Gas Gathered Gas Compression (horsepower) Dedicated Area Contract Structure Ownership Accounting Treatment Associated Gas (Oil), Wet Gas Gathering, Compression, Processing 3 100 19 mmcf/d 9,455 311,000 acres Cost of Service 50% ACMP owned and operated Consolidated
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Accounting Treatment
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Processing Spine Pipeline NGL Pipeline Residue Gas Delivery Points NGL Delivery Points Contract Structure Ownership
Accounting Treatment
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FINANCIAL OVERVIEW
FINANCIAL POLICIES
CONSISTENT, CONSERVATIVE FINANCIAL STRATEGY
ACMP Commentary
Capitalize on the value of key contractual commitments Continue to seek long-term, fee-based revenues Preserve revenue model with no direct commodity exposure Strong sponsorship in both GIP and WMB Maintain conservative and flexible capital structure with ample liquidity and target
investment grade metrics
Use strong balance sheet to pursue broad range of growth opportunities Right business model for consistent, predictable cash flow generation Strong portfolio of assets with growing EBITDA profile Attractive distribution coverage; excess cash flow reduces equity need
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FINANCIAL PERFORMANCE
FINANCIAL PERFORMANCE HIGHLIGHTS STRENGTH OF ACMP MODEL
Adjusted EBITDA(1)
$ in millions $ in billions
Enterprise Value
$184 $9.0 $10.6
$73 $76
$84
$92
$97
4Q'10 1Q'11 2Q'11 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13
2010
2011
2012
1Q 2013
Distribution / Unit
$ / unit basis $0.4675 $0.435 $0.450 $0.405 $0.420 $0.390 $0.375 $0.350 $0.3625 $0.3375
4Q'10 1Q'11 2Q'11 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13
(1) Includes quarterly allocation of MVC payments in 2010, 2011 and 2013.
2010
2011
2012
1Q 2013
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PARTNERSHIP STRUCTURE
STRATEGIC GENERAL PARTNERS; STRONG GOVERNANCE
Global Infrastructure Partners II
39.4% Limited Partner Interest
50%
50%
Barnett
Eagle Ford
Haynesville
Marcellus
MidContinent
Niobrara
Utica
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CORPORATE INFORMATION
ACMP Headquarters
525 Central Park Dr. Oklahoma City, OK 73105 (877) 413-1023 Web site: www.accessmidstream.com
Contact:
Dave Shiels Chief Financial Officer dave.shiels@accessmidstream.com (405) 727-1740
FINANCIAL STATEMENTS
Three Months Ended March 31, 2013 2012 Revenues(1) ........................................................................................ Operating Expenses Operating expenses ............................................................................ Depreciation and amortization expense .............................................. General and administrative expense ................................................... Other operating (income) expense ...................................................... Total operating expenses............................................................ Operating income ................................................................................ Other income (expense) Income from unconsolidated affiliates ................................................ Interest expense .................................................................................. Other income ....................................................................................... Income before income tax expense..................................................... Income tax expense ............................................................................ Net income.................................................................................. Net income attributable to noncontrolling interests ..................... Net income attributable to Access Midstream Partners, L.P. ...... Limited partner interest in net income Net income attributable to Access Midstream Partners, L.P................ Less general partner interest in net income......................................... Limited partner interest in net income ................................................. Net income per limited partner unit basic and diluted Common units ............................................................................... Subordinated units ........................................................................ Weighted average limited partner units outstanding used for net income per unit calculation basic and diluted (in thousands) Common units ............................................................................... Subordinated units ........................................................................ 59,538 (4,792) 54,746 52,366 (1,429) 50,937 $ $ 236,959 82,763 66,650 23,734 91 173,238 63,721 $ 154,674 48,682 38,438 11,478 (45) 98,553 56,121
0.14 0.29
0.34 0.34
98,421 69,076
79,276 69,076
(1) Excludes revenue from equity investments of $47.1 million and $29.3 million for the three months ended March 31, 2013 and 2012, respectively that is included in Income from Unconsolidated Affiliates.
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FINANCIAL STATEMENTS
As of March 31, 2013 Assets Total current assets ............................................................................. Property, plant and equipment Gathering systems............................................................................ Other fixed assets............................................................................. Less: Accumulated depreciation ....................................................... Total property, plant and equipment, net ................................. Investment in unconsolidated affiliates ............................................. Intangible customer relationships, net .............................................. Deferred loan costs, net ................................................................... Total assets.............................................................................. Liabilities and Partners Capital Total current liabilities.......................................................................... Long-term liabilities Long-term debt ................................................................................. Other liabilities .................................................................................. Total long-term liabilities .......................................................... Total partners capital .......................................................................... Total liabilities and partners capital ......................................... $ $ 274,541 2,777,000 5,501 2,782,501 3,794,372 6,851,414 $ $ 259,261 2,500,000 5,333 2,505,333 3,796,506 6,561,100 $ $ 179,945 5,365,728 109,824 (650,849) 4,824,703 1,443,033 349,339 54,394 6,851,414 $ $ 219,766 5,125,746 96,916 (590,614) 4,632,048 1,297,811 355,217 56,258 6,561,100 As of December 31, 2012
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FINANCIAL STATEMENTS
Three Months Ended March 31, 2013 2012 Cash flows from operating activities Net income ........................................................................................ $ Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization ..................................................... Income from unconsolidated affiliates.......................................... Other non-cash items .................................................................. Changes in assets and liabilities Increase in accounts receivable ............................................. Increase in other assets ......................................................... Decrease in accounts payable ............................................... Increase in accrued liabilities ................................................. Net cash provided by operating activities ............................ Cash flows from investing activities Additions to property, plant and equipment ....................................... Investments in unconsolidated affiliates ............................................ Proceeds from sale of assets ............................................................ Net cash used in investing activities.................................... Cash flows from financing activities Proceeds from long-term borrowings................................................. Payments on long-term borrowings ................................................... Issuance of senior notes.................................................................... Distribution to unitholders .................................................................. Proceeds from noncontrolling interests ............................................. Debt issuance costs .......................................................................... Other adjustments ............................................................................. Net cash provided by (used in) financing activities.............. Net increase (decrease) in cash and cash equivalents ...................................................................... Cash and cash equivalents Beginning of period ........................................................................... End of period ..................................................................................... $ 60,696 $ 52,366
66,650 (25,008) 4,135 (29,774) (4,054) (11,743) 19,228 80,130 (270,954) (86,981) 1,307 (356,628) 715,900 (438,900) (84,073) 18,980 (91) 211,816 (64,682) 64,994 312 $
38,438 (12,987) 1,932 (33,058) (1,694) (7,832) 30,050 67,215 (80,593) (45,276) 421 (125,448) 245,600 (870,500) 750,000 (58,932) (13,653) 5,721 58,236 3 22 25
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