Key takeaways from MarkWest Energy’s 4Q14 earnings (Part 1 of 6)

MarkWest Energy Partners (MWE) is a master limited partnership (or MLP) that provides natural gas gathering, processing, and transportation services to natural gas producers such as Antero Resources (AR), EQT Corporation (EQT), Anadarko Petroleum (APC), and other natural gas producers. AR, EQT, and APC together make up about 3.4% of the Vanguard Energy ETF (VDE).

Distributable cash flow (or DCF) is the amount of cash left over for an MLP to distribute to its unitholders or shareholders.

MarkWest Energy Partners reported its fourth-quarter earnings on February 25, 2015. The company announced that its 4Q14 DCF grew by about 58% to $201 million from the corresponding period last year. DCF for 2014 increased 46% to $706.4 million from $483.3 million in 2013.

For the fourth quarter of 2014, MarkWest Energy paid distributions of $168.1 million or $0.90 per common unit on February 13, 2015. This represented an increase of $0.01 per common unit or 1.1% over the previous quarter’s distribution and an increase of $0.04 per common unit or 4.7% compared to the 4Q13 distribution.

DCF for the quarter represents the distribution coverage ratio of 1.2x. For the year, the coverage ratio was 1.12x The distribution coverage ratio is nothing but the DCF divided by actual distributions.

In the next part of this series, we will take a look at MWE’s segment-wise updates.

Continue to Part 2

Browse this series on Market Realist:

• Part 2 - MarkWest Energy’s key operational updates
• Part 3 - MarkWest Energy’s operating income grows in Marcellus and Utica
• Part 4 - MarkWest Energy’s key 2015 forecasts