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Williams Partners (NYSE: WPZ) today reaffirmed its previously published outlook through 2014 for strong growth in the cash distributions it pays to unitholders, despite lowering its earnings outlook for the same period to reflect less-favorable commodity prices.
The partnership continues to expect to pay unitholders a full-year 2012 distribution of $3.14 per unit, an 8 percent increase over 2011. As well, the partnership confirmed it expects the midpoint of guidance for the full-year distribution it pays unitholders in each 2013 and 2014 to increase by 9 percent – to $3.43 and $3.75, respectively.
Williams Partners expects its second-quarter distributable cash flow will be significantly lower than the first-quarter’s results primarily because of an unexpectedly sharp decline in natural-gas-liquids margins in May and June. Additional factors in the change include normal seasonal increases in maintenance capital expenditures; higher expenses at Midstream because of maintenance accelerated during a third-party fractionator outage; somewhat lower-than-expected volumes because of construction timing; costs associated with recent acquisitions; and normal seasonal demand changes and maintenance at Gas Pipeline. Higher fee-based revenues partially offset these factors.
The partnership estimates its second-quarter distributable cash flow will be approximately $289 million, down from $475 million in the first quarter this year. The partnership’s estimates of its second-quarter results are preliminary and subject to change based on completion of its normal quarter-end review process. As previously announced, the partnership plans to report its finalized second-quarter financial results on Aug. 1.
Williams Partners’ revised guidance midpoints for full-year distributable cash flow are $1.6 billion for 2012; $1.9 billion for 2013; and $2.3 billion for 2014. The partnership’s 2012 DCF guidance reflects the effect of significantly lower than expected NGL prices and higher than normal maintenance capital expenditures. The partnership’s projected 2014 distributable cash flow is 37 percent higher than its 2011 DCF of $1.7 billion.