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TheStreet Open House

El Paso Pipeline Partners Increases Quarterly Distribution To $0.61 Per Unit

Stocks in this article: EPBKMIKMPKMR

For full year 2012, EPB generated distributable cash flow before certain items of $590 million, up 22 percent from $483 million for 2011. Distributable cash flow per unit before certain items was $2.82 compared to $2.45 for 2011. Net income before certain items was $608 million versus $537 million for 2011. Including certain items, net income declined slightly for the year to $589 million compared to $605 million for 2011, primarily due to the non-cash severance costs allocated to EPB from El Paso as a result of the KMI and El Paso merger.

Business Overview

EPB’s assets produced total earnings before DD&A and certain items of $318 million for the fourth quarter and $1.2 billion for the full year, up 14 percent compared to the fourth quarter last year and up 8 percent versus 2011. “EPB continues to benefit from completed expansion projects on SNG and increased demand from natural gas fired electric generation facilities. Gas-fired power generation demand on SNG was up 30 percent compared to the fourth quarter last year and up 42 percent for the full year compared to 2011,” added Kinder. Additionally, EPB’s results benefited from contributions from the May 24, 2012, dropdown from its general partner of the remaining 14 percent of Colorado Interstate Gas and all of Cheyenne Plains Pipeline.

2013 Outlook

As previously announced, EPB expects to declare cash distribution of $2.55 per unit for 2013, a 13 percent increase over the $2.25 per unit it will distribute for 2012. EPB’s budget includes the expected purchase (drop down) of 50 percent of Gulf LNG from KMI during 2013.

In 2013, EPB expects to generate earnings before DD&A of $1.22 billion (adding back EPB’s share of joint venture DD&A), an increase of over $40 million compared to 2012. Additionally, EPB expects to produce excess cash flow of approximately $25 million above the 2013 distribution target of $2.55.

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