HOUSTON, TX — (Marketwired) — 02/27/14 — Western Gas Partners, LP (NYSE: WES) (“WES” or the “Partnership”) today announced that it has agreed to acquire from Anadarko a 20% interest in each ofTexas Express Pipeline LLC and Texas Express Gathering LLC and a 33.33% interest in Front Range Pipeline LLC for $375 million.
“This immediately accretive acquisition marks our entry into the long-haul NGL transportation business, which is a natural complement to our existing portfolio,” said Chief Executive Officer, Don Sinclair. “These 100% fee-based assets gather and transport liquids from the Anadarko, Permian, and DJ Basins, all of which are recognized as world class resource plays.”
The Partnership intends to finance the acquisition with the borrowing of $350 million on its revolving credit facility, $6 million of cash on hand, and the issuance of 308,490 common units to Anadarko at an implied price of $60.78 per unit. The acquisition price is equal to the assets’ book value as of the acquisition date, and the acquisition is expected to close on March 3, 2014. The Partnership projects a blended base case, unlevered internal rate of return of 14% to 18% for the three projects. “Given that the growth profile of the assets is supported by firm transportation commitments from investment-grade shippers that increase over time, we believe it is appropriate to value the assets on a project basis as opposed to our historical method of using the next twelve months’ cash flows,” added Sinclair.
The terms of the acquisition were unanimously approved by the board of directors of the Partnership’s general partner and by the board’s special committee, which is comprised entirely of independent directors. The special committee engaged Evercore Partners to act as its financial advisor andBracewell and Giuliani LLP to act as its legal advisor.
FOURTH-QUARTER AND FULL-YEAR 2013 RESULTS
The Partnership and Western Gas Equity Partners, LP (NYSE: WGP) (“WGP”) today also announced fourth-quarter and full-year 2013 financial and operating results.
“In 2012 we made a significant step change in our capital program, and in the second half of 2013 we started to realize the full benefits of that program,” said Sinclair. “Our strong fourth-quarter performance, which was achieved despite unfavorable weather conditions across most of our systems, is evidence of the resilience of our well-diversified portfolio.”
WESTERN GAS PARTNERS, LP
Net income available to limited partners(1) for 2013 totaled $200.9 million, or $1.83 per common unit (diluted), with full-year 2013 Adjusted EBITDA(2) of $457.8 million and full-year 2013 Distributable cash flow(2) of $380.5 million.
Net income available to limited partners(1) for the fourth quarter of 2013 totaled $64.0 million, or $0.56per common unit (diluted), with fourth-quarter 2013 Adjusted EBITDA(2) of $129.0 million and fourth-quarter 2013 Distributable cash flow(2) of $105.7 million.
WES paid a quarterly distribution of $0.60 per unit for the fourth quarter of 2013. This distribution represented a 3% increase over the prior quarter’s distribution and a 15% increase over the fourth-quarter 2012 distribution of $0.52 per unit. The full-year 2013 distribution of $2.28 per unit represented a 16% increase over the full-year 2012 distribution. The fourth-quarter 2013 Coverage ratio(2) of 1.14 times is based on the quarterly distribution of $0.60 per unit.
Total throughput attributable to WES(1) for the fourth quarter of 2013 averaged 3.5 Bcf/d, which was 6% above the prior quarter and 20% above the fourth quarter of 2012. For the full-year 2013, total throughput attributable to WES(1) averaged 3.2 Bcf/d, 14% above the prior-year average.
(1) Includes net income or net throughput (as applicable) attributable to (i) the 33.75% interest in certain third-party operated Marcellus gathering assets acquired from Anadarko (the “Non-Operated Marcellus Interest”) for all periods of comparison, (ii) the additional Chipeta interest beginning in August 2012, (iii) the 33.75% interest in certain Anadarko-operated Marcellus gathering assets acquired from a third party (the “Anadarko-Operated Marcellus Interest”) beginning in March 2013, and (iv) Overland Trail Transmission, LLC (“OTTCO”) beginning in September 2013.
(2) Please see the tables at the end of this release for a reconciliation of non-GAAP to GAAP measures and calculation of the Coverage ratio.
Excluding acquisitions, capital expenditures attributable to WES on a cash basis totaled $173.9 millionduring the fourth quarter of 2013. Of this amount, maintenance capital expenditures were $10.3 million, or 8% of Adjusted EBITDA(1). For the full-year 2013, capital expenditures attributable to WES totaled $632.7 million on a cash basis, excluding acquisitions. Capital expenditures attributable to WES on an accrual basis and excluding acquisitions totaled $167.5 million during the fourth quarter of 2013 and $616.2 million for the full-year 2013.
WESTERN GAS EQUITY PARTNERS, LP
As of December 31, 2013, WGP indirectly owned the 2% general partner interest in WES, 100% of the incentive distribution rights in WES and 49,296,205 WES common units. Net income available to limited partners for 2013 totaled $155.5 million, or $0.71 per common unit (diluted). Net income available to limited partners for the fourth quarter of 2013 totaled $48.8 million, or $0.22 per common unit (diluted).
WGP paid a quarterly distribution of $0.23125 per unit for the fourth quarter of 2013. This distribution represented an 8% increase over the prior quarter’s distribution and a 40% increase over the non-prorated distribution for the fourth quarter of 2012. WGP received distributions from WES of $51.6 million attributable to the fourth quarter and subsequently paid out $50.6 million in distributions for the same period.
2014 WES OUTLOOK
Based on the current forecast, which includes the aforementioned acquisition effective March 1, 2014, WES’s Adjusted EBITDA(1) for 2014 is expected to be between $600 million and $650 million. Total capital expenditures including equity investments, but excluding acquisitions, are expected to be between $650 million and $700 million with maintenance capital expenditures expected to be between 8% and 11% of Adjusted EBITDA(1). The 2014 forecast includes the continued construction of a second train at WES’s Lancaster facility and continued well connections in the DJ Basin and Marcellus shale. WES expects no less than 15% distribution growth in 2014. Details surrounding the 2014 forecast will be provided during the joint earnings conference call.
(1) Please see the tables at the end of this release for a reconciliation of non-GAAP to GAAP measures and calculation of the Coverage ratio.
WESTERN GAS EQUITY PARTNERS, LP
Based on the expectation of no less than 15% distribution growth at WES, WGP expects that its 2014 distribution growth will be no less than 34%.
INCREASED SIZE OF REVOLVING CREDIT FACILITY
The Partnership also announced today that it has entered into a new $1.2 billion five-year revolving credit facility with a group of twenty lenders. The new facility, which replaces the Partnership’s existing facility, matures in February 2019, and is expandable to $1.5 billion under its accordion feature. The new facility lowers the Partnership’s borrowing cost and contains terms and borrowing conditions that are substantially the same as those under the preceding facility.
MANAGEMENT APPOINTMENT
The general partners of WES and WGP also announced today that their boards of directors have appointed Jacqueline A. Dimpel as Senior Vice President. Ms. Dimpel also serves as Anadarko’s Vice President of Midstream, having succeeded Danny Rea upon his retirement at the end of 2013.
CONFERENCE CALL TOMORROW AT 9 A.M. CST
WES and WGP will host a joint conference call on Friday, February 28, 2014, at 9:00 a.m. Central Standard Time (10:00 a.m. Eastern Standard Time) to discuss fourth-quarter and full-year 2013 results and the outlook for 2014. To participate via telephone, please dial 877.621.4819 and enter participant code 28641715. Please call in 10 minutes prior to the scheduled start time. To access the live audio webcast of the conference call and slide presentation, please visit www.westerngas.com. A replay of the call will also be available on the website for approximately two weeks following the conference call.
Western Gas Partners, LP (“WES”) is a growth-oriented Delaware master limited partnership formed byAnadarko Petroleum Corporation to own, operate, acquire and develop midstream energy assets. With midstream assets in East, West and South Texas, the Rocky Mountains, north-central Pennsylvania and the Mid-Continent, WES is engaged in the business of gathering, processing, compressing, treating and transporting natural gas, condensate, natural gas liquids and crude oil for Anadarko and other producers and customers.
Western Gas Equity Partners, LP (“WGP”) is a Delaware master limited partnership formed by Anadarko to own the following types of interests in WES: (i) the 2.0% general partner interest and all of the incentive distribution rights in WES, both owned through WGP’s 100% ownership of WES’s general partner, and (ii) a significant limited partner interest in WES.
For more information about Western Gas Partners, LP and Western Gas Equity Partners, LP, please visit www.westerngas.com.
This news release contains forward-looking statements. Western Gas Partners and Western Gas Equity Partners believe that their expectations are based on reasonable assumptions. No assurance, however, can be given that such expectations will prove to have been correct. A number of factors could cause actual results to differ materially from the projections, anticipated results or other expectations expressed in this news release. These factors include the ability to meet financial guidance or distribution growth expectations; the ability to safely and efficiently operate WES’s assets; the ability to obtain new sources of natural gas supplies; the effect of fluctuations in commodity prices and the demand for natural gas and related products; the ability to meet projected in-service dates for capital growth projects; construction costs or capital expenditures exceeding estimated or budgeted costs or expenditures; and the other factors described in the “Risk Factors” sections of WES’s and WGP’s most recent Forms 10-K filed with the Securities and Exchange Commission and in their other public filings and press releases. Western Gas Partners and Western Gas Equity Partners undertake no obligation to publicly update or revise any forward-looking statements.
Western Gas Partners, LP Reconciliation of GAAP to Non-GAAP Measures
Below are reconciliations of WES’s Distributable cash flow (non-GAAP) to net income attributable toWestern Gas Partners, LP (GAAP) and Adjusted EBITDA (non-GAAP) to net income attributable toWestern Gas Partners, LP (GAAP) and net cash provided by operating activities (GAAP), as required under Regulation G of the Securities Exchange Act of 1934. Management believes that WES’s Distributable cash flow, Adjusted EBITDA and Coverage ratio are widely accepted financial indicators of WES’s financial performance compared to other publicly traded partnerships and are useful in assessing its ability to incur and service debt, fund capital expenditures and make distributions. Distributable cash flow, Adjusted EBITDA and Coverage ratio, as defined by WES, may not be comparable to similarly titled measures used by other companies. Therefore, WES’s Distributable cash flow, Adjusted EBITDA and Coverage ratio should be considered in conjunction with net income and other applicable performance measures, such as operating income or cash flows from operating activities.
Distributable Cash Flow
WES defines Distributable cash flow as Adjusted EBITDA, plus interest income, less net cash paid for interest expense (including amortization of deferred debt issuance costs originally paid in cash, offset by non-cash capitalized interest), maintenance capital expenditures, and income taxes.
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||
| thousands except Coverage ratio | 2013 | 2012 | 2013 | 2012 | ||||||||||||
| Reconciliation of Net income (loss) attributable to Western Gas Partners, LP to Distributable cash flow and calculation of the Coverage ratio | ||||||||||||||||
| Net income (loss) attributable to Western Gas Partners, LP | $ | 85,879 | $ | (9,118 | ) | $ | 275,136 | $ | 134,421 | |||||||
| Add: | ||||||||||||||||
| Distributions from equity investees | 6,573 | 5,057 | 22,136 | 20,660 | ||||||||||||
| Non-cash equity-based compensation expense(1) | 912 | 57,101 | 3,575 | 73,508 | ||||||||||||
| Interest expense, net (non-cash settled) | – | 82 | – | 326 | ||||||||||||
| Income tax (benefit) expense | (1,801 | ) | 6,127 | 2,630 | 20,715 | |||||||||||
| Depreciation, amortization and impairments (2) | 38,724 | 36,772 | 143,375 | 118,279 | ||||||||||||
| Other expense (2) | 175 | – | 175 | 1,665 | ||||||||||||
| Less: | ||||||||||||||||
| Equity income, net | 11,527 | 5,359 | 23,732 | 16,111 | ||||||||||||
| Cash paid for maintenance capital expenditures (2) (3) | 10,255 | 7,596 | 29,850 | 36,459 | ||||||||||||
| Capitalized interest | 2,393 | 2,369 | 11,945 | 6,196 | ||||||||||||
| Cash paid for income taxes | 552 | – | 552 | 495 | ||||||||||||
| Other income (2) (4) | – | 181 | 419 | 368 | ||||||||||||
| Distributable cash flow | $ | 105,735 | $ | 80,516 | $ | 380,529 | $ | 309,945 | ||||||||
| Distributions declared (5) | ||||||||||||||||
| Limited partners | $ | 70,574 | $ | 255,308 | ||||||||||||
| General partner | 22,035 | 70,745 | ||||||||||||||
| Total | $ | 92,609 | $ | 326,053 | ||||||||||||
| Coverage ratio | 1.14 | x | 1.17 | x | ||||||||||||
| (1) | Includes $56.2 million and $69.8 million of equity-based compensation associated with the Western Gas Holdings, LLC Equity Incentive Plan, as amended and restated, paid and contributed by Anadarko during the three months and year ended December 31, 2012, respectively. |
| (2) | Includes WES’s 51% share prior to August 1, 2012, and its 75% share after August 1, 2012, of depreciation, amortization and impairments; other expense; cash paid for maintenance capital expenditures; and other income attributable to Chipeta. |
| (3) | Net of a prior period adjustment reclassifying $0.7 million from capital expenditures to operating expenses for the year ended December 31, 2012. |
| (4) | Excludes income of $0.4 million for each of the three months ended December 31, 2013 and 2012, and $1.6 million for each of the years ended December 31, 2013 and 2012, related to a component of a gas processing agreement accounted for as a capital lease. |
| (5) | Reflects distributions of $0.60 and $2.28 per unit declared for the three months and year ended December 31, 2013, respectively. |
Western Gas Partners, LP Reconciliation of GAAP to Non-GAAP Measures, continued
Adjusted EBITDA
WES defines Adjusted EBITDA as net income (loss) attributable to Western Gas Partners, LP, plus distributions from equity investees, non-cash equity-based compensation expense, interest expense, income tax expense, depreciation, amortization and impairments, and other expense, less income from equity investments, interest income, income tax benefit, and other income.
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||||
| thousands | 2013 | 2012 | 2013 | 2012 | ||||||||||||||
| Reconciliation of Net income (loss) attributable to Western Gas Partners, LP to Adjusted EBITDA | ||||||||||||||||||
| Net income (loss) attributable to Western Gas Partners, LP | $ | 85,879 | $ | (9,118 | ) | $ | 275,136 | $ | 134,421 | |||||||||
| Add: | ||||||||||||||||||
| Distributions from equity investees | 6,573 | 5,057 | 22,136 | 20,660 | ||||||||||||||
| Non-cash equity-based compensation expense (1) | 912 | 57,101 | 3,575 | 73,508 | ||||||||||||||
| Interest expense | 14,314 | 11,942 | 51,797 | 42,060 | ||||||||||||||
| Income tax expense | – | 6,127 | 4,431 | 20,715 | ||||||||||||||
| Depreciation, amortization and impairments (2) | 38,724 | 36,772 | 143,375 | 118,279 | ||||||||||||||
| Other expense (2) | 175 | – | 175 | 1,665 | ||||||||||||||
| Less: | ||||||||||||||||||
| Equity income, net | 11,527 | 5,359 | 23,732 | 16,111 | ||||||||||||||
| Interest income, net – affiliates | 4,225 | 4,225 | 16,900 | 16,900 | ||||||||||||||
| Other income (2) (3) | – | 181 | 419 | 368 | ||||||||||||||
| Income tax benefit | 1,801 | – | 1,801 | – | ||||||||||||||
| Adjusted EBITDA | $ | 129,024 | $ | 98,116 | $ | 457,773 | $ | 377,929 | ||||||||||
| Reconciliation of Adjusted EBITDA to Net cash provided by operating activities | ||||||||||||||||||
| Adjusted EBITDA attributable to Western Gas Partners, LP | $ | 129,024 | $ | 98,116 | $ | 457,773 | $ | 377,929 | ||||||||||
| Adjusted EBITDA attributable to noncontrolling interests | 3,986 | 3,505 | 13,348 | 17,214 | ||||||||||||||
| Interest income (expense), net | (10,089 | ) | (7,717 | ) | (34,897 | ) | (25,160 | ) | ||||||||||
| Non-cash equity based compensation (income) expense(1) | 45 | (56,153 | ) | (54 | ) | (69,791 | ) | |||||||||||
| Debt-related amortization and other items, net | 693 | 591 | 2,449 | 2,319 | ||||||||||||||
| Current income tax (benefit) expense | 280 | 2,421 | (2,944 | ) | 9,398 | |||||||||||||
| Other income (expense), net (3) | (171 | ) | 183 | 253 | (1,292 | ) | ||||||||||||
| Distributions from equity investees less than (in excess of) equity income, net | 4,954 | 302 | 1,596 | (4,549 | ) | |||||||||||||
| Changes in operating working capital: | ||||||||||||||||||
| Accounts receivable and natural gas imbalance receivable | (7,509 | ) | (23,883 | ) | (35,934 | ) | 23,520 | |||||||||||
| Accounts payable, accrued liabilities and natural gas imbalance payable | 15,134 | (24,216 | ) | 21,952 | 5,045 | |||||||||||||
| Other | (9,695 | ) | 1,290 | (7,821 | ) | 3,393 | ||||||||||||
| Net cash provided by (used in) operating activities | $ | 126,652 | $ | (5,561 | ) | $ | 415,721 | $ | 338,026 | |||||||||
| Cash flow information of Western Gas Partners, LP | ||||||||||||||||||
| Net cash provided by operating activities | $ | 415,721 | $ | 338,026 | ||||||||||||||
| Net cash used in investing activities | $ | (1,416,066 | ) | $ | (1,249,942 | ) | ||||||||||||
| Net cash provided by financing activities | $ | 681,092 | $ | 1,105,338 | ||||||||||||||
| (1) | Includes $56.2 million and $69.8 million of equity-based compensation associated with the Western Gas Holdings, LLC Equity Incentive Plan, as amended and restated, paid and contributed by Anadarko during the three months and year ended December 31, 2012, respectively. |
| (2) | Includes WES’s 51% share prior to August 1, 2012, and its 75% share after August 1, 2012, of depreciation, amortization and impairments; other expense; and other income attributable to Chipeta. |
| (3) | Excludes income of $0.4 million for each of the three months ended December 31, 2013 and 2012, and $1.6 million for each of the years ended December 31, 2013 and 2012, related to a component of a gas processing agreement accounted for as a capital lease. |
| Western Gas Partners, LP | ||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||
| thousands except per-unit amounts | 2013 | 2012 | 2013 | 2012 | ||||||||||||
| Revenues | ||||||||||||||||
| Gathering, processing and transportation of natural gas and natural gas liquids | $ | 139,071 | $ | 103,364 | $ | 482,542 | $ | 382,330 | ||||||||
| Natural gas, natural gas liquids and condensate sales | 138,628 | 121,521 | 541,244 | 508,339 | ||||||||||||
| Equity income and other, net | 12,922 | 5,982 | 29,709 | 19,918 | ||||||||||||
| Total revenues | 290,621 | 230,867 | 1,053,495 | 910,587 | ||||||||||||
| Operating expenses | ||||||||||||||||
| Cost of product | 94,226 | 81,360 | 364,285 | 336,079 | ||||||||||||
| Operation and maintenance | 47,492 | 36,802 | 168,657 | 140,106 | ||||||||||||
| General and administrative | 7,523 | 63,589 | 29,751 | 99,212 | ||||||||||||
| Property and other taxes | 4,724 | 4,690 | 23,244 | 19,688 | ||||||||||||
| Depreciation, amortization and impairments | 39,365 | 37,345 | 145,916 | 120,608 | ||||||||||||
| Total operating expenses | 193,330 | 223,786 | 731,853 | 715,693 | ||||||||||||
| Operating income | 97,291 | 7,081 | 321,642 | 194,894 | ||||||||||||
| Interest income, net – affiliates | 4,225 | 4,225 | 16,900 | 16,900 | ||||||||||||
| Interest expense | (14,314 | ) | (11,942 | ) | (51,797 | ) | (42,060 | ) | ||||||||
| Other income | 225 | 579 | 1,837 | 292 | ||||||||||||
| Income (loss) before income taxes | 87,427 | (57 | ) | 288,582 | 170,026 | |||||||||||
| Income tax (benefit) expense | (1,801 | ) | 6,127 | 2,630 | 20,715 | |||||||||||
| Net income (loss) | 89,228 | (6,184 | ) | 285,952 | 149,311 | |||||||||||
| Net income attributable to noncontrolling interests | 3,349 | 2,934 | 10,816 | 14,890 | ||||||||||||
| Net income (loss) attributable to Western Gas Partners, LP | $ | 85,879 | $ | (9,118 | ) | $ | 275,136 | $ | 134,421 | |||||||
| Limited partners’ interest in net income (loss): | ||||||||||||||||
| Net income (loss) attributable to Western Gas Partners, LP | $ | 85,879 | $ | (9,118 | ) | $ | 275,136 | $ | 134,421 | |||||||
| Pre-acquisition net (income) loss allocated to Anadarko | – | (7,853 | ) | (4,637 | ) | (27,435 | ) | |||||||||
| General partner interest in net (income) loss | (21,900 | ) | (9,581 | ) | (69,633 | ) | (28,089 | ) | ||||||||
| Limited partners’ interest in net income (loss) | $ | 63,979 | $ | (26,552 | ) | $ | 200,866 | $ | 78,897 | |||||||
| Net income (loss) per common unit – basic and diluted | $ | 0.56 | $ | (0.27 | ) | $ | 1.83 | $ | 0.84 | |||||||
| Weighted average common units outstanding – basic and diluted | 113,825 | 97,832 | 109,872 | 93,936 | ||||||||||||
| Western Gas Partners, LP | ||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||
| (Unaudited) | ||||||
| thousands except number of units | December 31, 2013 | December 31, 2012 | ||||
| Current assets | $ | 194,810 | $ | 477,212 | ||
| Note receivable – Anadarko | 260,000 | 260,000 | ||||
| Net property, plant and equipment | 3,383,255 | 2,717,956 | ||||
| Other assets | 429,962 | 294,754 | ||||
| Total assets | $ | 4,268,027 | $ | 3,749,922 | ||
| Current liabilities | $ | 190,460 | $ | 185,306 | ||
| Long-term debt | 1,418,169 | 1,168,278 | ||||
| Asset retirement obligations and other | 79,454 | 115,902 | ||||
| Total liabilities | $ | 1,688,083 | $ | 1,469,486 | ||
| Equity and partners’ capital | ||||||
| Common units (117,322,812 and 104,660,553 units issued and outstanding at December 31, 2013 and 2012, respectively) | $ | 2,431,193 | $ | 1,957,066 | ||
| General partner units (2,394,345 and 2,135,930 units issued and outstanding at December 31, 2013 and 2012, respectively) | 78,157 | 52,752 | ||||
| Net investment by Anadarko | – | 199,960 | ||||
| Noncontrolling interests | 70,594 | 70,658 | ||||
| Total liabilities, equity and partners’ capital | $ | 4,268,027 | $ | 3,749,922 | ||
| Western Gas Partners, LP | |||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||
| (Unaudited) | |||||||||
| Year Ended December 31, | |||||||||
| thousands | 2013 | 2012 | |||||||
| Cash flows from operating activities | |||||||||
| Net income | $ | 285,952 | $ | 149,311 | |||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||
| Depreciation, amortization and impairments | 145,916 | 120,608 | |||||||
| Change in other items, net | (16,147 | ) | 68,107 | ||||||
| Net cash provided by operating activities | $ | 415,721 | $ | 338,026 | |||||
| Cash flows from investing activities | |||||||||
| Capital expenditures | $ | (646,471 | ) | $ | (638,121 | ) | |||
| Contributions in aid of construction costs from affiliates | 617 | – | |||||||
| Acquisitions from affiliates | (476,711 | ) | (611,719 | ) | |||||
| Acquisitions from third parties | (240,274 | ) | – | ||||||
| Investments in equity affiliates | (51,974 | ) | (862 | ) | |||||
| Proceeds from the sale of assets to affiliates | 85 | 760 | |||||||
| Other | (1,338 | ) | – | ||||||
| Net cash used in investing activities | $ | (1,416,066 | ) | $ | (1,249,942 | ) | |||
| Cash flows from financing activities | |||||||||
| Borrowings, net of debt issuance costs | $ | 957,503 | $ | 1,041,648 | |||||
| Repayments of debt | (710,000 | ) | (549,000 | ) | |||||
| Increase (decrease) in outstanding checks | (1,763 | ) | 1,800 | ||||||
| Proceeds from the issuance of common and general partner units, net of offering expenses | 740,825 | 625,877 | |||||||
| Distributions to unitholders | (299,101 | ) | (197,850 | ) | |||||
| Contributions from noncontrolling interest owners | 2,247 | 29,108 | |||||||
| Distributions to noncontrolling interest owners | (13,127 | ) | (17,303 | ) | |||||
| Net contributions from (distributions to) Anadarko | 4,508 | 171,058 | |||||||
| Net cash provided by financing activities | $ | 681,092 | $ | 1,105,338 | |||||
| Net increase (decrease) in cash and cash equivalents | $ | (319,253 | ) | $ | 193,422 | ||||
| Cash and cash equivalents at beginning of period | 419,981 | 226,559 | |||||||
| Cash and cash equivalents at end of period | $ | 100,728 | $ | 419,981 | |||||
| Western Gas Partners, LP | ||||||||||||||
| OPERATING STATISTICS | ||||||||||||||
| (Unaudited) | ||||||||||||||
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||
| MMcf/d except per-unit amounts | 2013 | 2012 | 2013 | 2012 | ||||||||||
| Throughput | ||||||||||||||
| Gathering, treating and transportation(1) | 1,974 | 1,610 | 1,803 | 1,601 | ||||||||||
| Processing (2) | 1,471 | 1,202 | 1,359 | 1,187 | ||||||||||
| Equity investment (3) | 193 | 232 | 206 | 235 | ||||||||||
| Total throughput (4) | 3,638 | 3,044 | 3,368 | 3,023 | ||||||||||
| Throughput attributable to noncontrolling interests | 172 | 151 | 168 | 228 | ||||||||||
| Total throughput attributable to Western Gas Partners, LP | 3,466 | 2,893 | 3,200 | 2,795 | ||||||||||
| Gross margin per Mcf attributable to Western Gas Partners, LP (5) | $ | 0.60 | $ | 0.55 | $ | 0.58 | $ | 0.54 | ||||||
| (1) | Excludes average NGL pipeline volumes of 25 MBbls/d and 24 MBbls/d for the three months ended December 31, 2013 and 2012, respectively, and 22 MBbls/d and 25 MBbls/d for the years ended December 31, 2013 and 2012, respectively. Includes 100% of Wattenberg system volumes for all periods presented, throughput beginning March 2013 attributable to the Anadarko-Operated Marcellus Interest and throughput beginning September 2013 attributable to OTTCO. |
| (2) | Consists of 100% of Chipeta, Hilight and Platte Valley system volumes, 100% of the Granger and Red Desert complex volumes, and 50% of Newcastle volumes. |
| (3) | Represents our 14.81% share of Fort Union and 22% share of Rendezvous gross volumes. Excludes our 10% share of average White Cliffs pipeline volumes consisting of 8 MBbls/d and 7 MBbls/d for the three months ended December 31, 2013 and 2012, respectively, and 7 MBbls/d and 6 MBbls/d for the years ended December 31, 2013 and 2012, respectively. Also excludes our 25% share of average Mont Belvieu JV fractionated volumes consisting of 30 MBbls/d and 8 MBbls/d for the three months and year ended December 31, 2013, respectively. |
| (4) | Includes affiliate, third-party and equity-investment volumes (as equity-investment volumes are defined in the above footnote). |
| (5) | Average for period. Calculated as gross margin, excluding the noncontrolling interest owners’ proportionate share of revenues and cost of product and throughput, divided by total throughput attributable to WES (excluding throughput measured in barrels). Calculation includes gross margin attributable to our NGL pipelines, income attributable to our investments in Fort Union, White Cliffs, Rendezvous, and the Mont Belvieu JV, and volumes attributable to our investments in Fort Union and Rendezvous. |
| Western Gas Equity Partners, LP | ||||||
| CALCULATION OF CASH AVAILABLE FOR DISTRIBUTION | ||||||
| (Unaudited) | ||||||
| thousands except per-unit amount and Coverage ratio | Three Months Ended December 31, 2013 | |||||
| Distributions declared by Western Gas Partners, LP: | ||||||
| General partner interest | $ | 1,852 | ||||
| Incentive distribution rights | 20,183 | |||||
| Common units held by WGP | 29,578 | |||||
| Less: | ||||||
| Public company general and administrative expense | 758 | |||||
| Cash available for distribution | $ | 50,855 | ||||
| Declared distribution per common unit | $ | 0.23125 | ||||
| Distributions declared by Western Gas Equity Partners, LP | $ | 50,620 | ||||
| Coverage ratio | 1.00 | x | ||||
| Western Gas Equity Partners, LP | ||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||
| thousands except per-unit amounts | 2013 | 2012 | 2013 | 2012 | ||||||||||||
| Revenues | ||||||||||||||||
| Gathering, processing and transportation of natural gas and natural gas liquids | $ | 139,071 | $ | 103,364 | $ | 482,542 | $ | 382,330 | ||||||||
| Natural gas, natural gas liquids and condensate sales | 138,628 | 121,521 | 541,244 | 508,339 | ||||||||||||
| Equity income and other, net | 12,922 | 5,982 | 29,709 | 19,918 | ||||||||||||
| Total revenues | 290,621 | 230,867 | 1,053,495 | 910,587 | ||||||||||||
| Operating expenses | ||||||||||||||||
| Cost of product | 94,226 | 81,360 | 364,285 | 336,079 | ||||||||||||
| Operation and maintenance | 47,492 | 36,802 | 168,657 | 140,106 | ||||||||||||
| General and administrative | 8,364 | 64,105 | 33,464 | 99,728 | ||||||||||||
| Property and other taxes | 4,724 | 4,690 | 23,244 | 19,688 | ||||||||||||
| Depreciation, amortization and impairments | 39,365 | 37,345 | 145,916 | 120,608 | ||||||||||||
| Total operating expenses | 194,171 | 224,302 | 735,566 | 716,209 | ||||||||||||
| Operating income | 96,450 | 6,565 | 317,929 | 194,378 | ||||||||||||
| Interest income, net – affiliates | 4,225 | 4,225 | 16,900 | 16,900 | ||||||||||||
| Interest expense | (14,314 | ) | (11,942 | ) | (51,797 | ) | (42,060 | ) | ||||||||
| Other income | 249 | 579 | 1,935 | 292 | ||||||||||||
| Income (loss) before income taxes | 86,610 | (573 | ) | 284,967 | 169,510 | |||||||||||
| Income tax (benefit) expense | (1,851 | ) | 5,119 | 2,580 | 48,909 | |||||||||||
| Net income (loss) | 88,461 | (5,692 | ) | 282,387 | 120,601 | |||||||||||
| Net income (loss) attributable to noncontrolling interests | 39,611 | (12,077 | ) | 122,173 | 59,181 | |||||||||||
| Net income attributable to Western Gas Equity Partners, LP | $ | 48,850 | $ | 6,385 | $ | 160,214 | $ | 61,420 | ||||||||
| Limited partners’ interest in net income: | ||||||||||||||||
| Net income attributable to Western Gas Equity Partners, LP | $ | 48,850 | $ | 6,385 | $ | 160,214 | $ | 61,420 | ||||||||
| Results attributable to the pre-IPO period (1) | (49 | ) | (1,869 | ) | (49 | ) | (56,904 | ) | ||||||||
| Pre-acquisition net (income) loss allocated to Anadarko | – | (1,707 | ) | (4,637 | ) | (1,707 | ) | |||||||||
| Limited partners’ interest in net income | $ | 48,801 | $ | 2,809 | $ | 155,528 | $ | 2,809 | ||||||||
| Net income per common unit – basic and diluted (1) | $ | 0.22 | $ | 0.01 | $ | 0.71 | $ | 0.01 | ||||||||
| Weighted average number of common units outstanding – basic and diluted (1) | 218,896 | 218,896 | 218,896 | 218,896 | ||||||||||||
| (1) | Includes financial results prior to WGP’s IPO on December 12, 2012. |
| Western Gas Equity Partners, LP | ||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||
| (Unaudited) | ||||||
| thousands except number of units | December 31, 2013 | December 31, 2012 | ||||
| Current assets | $ | 207,827 | $ | 478,104 | ||
| Note receivable – Anadarko | 260,000 | 260,000 | ||||
| Net property, plant and equipment | 3,383,255 | 2,717,956 | ||||
| Other assets | 429,962 | 294,754 | ||||
| Total assets | $ | 4,281,044 | $ | 3,750,814 | ||
| Current liabilities | $ | 191,483 | $ | 186,255 | ||
| Long-term debt | 1,418,169 | 1,168,278 | ||||
| Asset retirement obligations and other | 79,454 | 115,902 | ||||
| Total liabilities | $ | 1,689,106 | $ | 1,470,435 | ||
| Equity and partners’ capital | ||||||
| Common units (218,895,515 issued and outstanding at December 31, 2013 and 2012) | $ | 905,082 | $ | 912,376 | ||
| Net investment by Anadarko | – | 199,960 | ||||
| Noncontrolling interests | 1,686,856 | 1,168,043 | ||||
| Total liabilities, equity and partners’ capital | $ | 4,281,044 | $ | 3,750,814 | ||
| Western Gas Equity Partners, LP | |||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||
| (Unaudited) | |||||||||
| Year Ended December 31, | |||||||||
| thousands | 2013 | 2012 | |||||||
| Cash flows from operating activities | |||||||||
| Net income | $ | 282,387 | $ | 120,601 | |||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||
| Depreciation, amortization and impairments | 145,916 | 120,608 | |||||||
| Change in other items, net | (16,003 | ) | 36,251 | ||||||
| Net cash provided by operating activities | $ | 412,300 | $ | 277,460 | |||||
| Cash flows from investing activities | |||||||||
| Capital expenditures | $ | (646,471 | ) | $ | (638,121 | ) | |||
| Contributions in aid of construction costs from affiliates | 617 | – | |||||||
| Acquisitions from affiliates | (476,711 | ) | (611,719 | ) | |||||
| Acquisitions from third parties | (240,274 | ) | – | ||||||
| Investments in equity affiliates | (51,974 | ) | (862 | ) | |||||
| Proceeds from the sale of assets to affiliates | 85 | 760 | |||||||
| Other | (1,338 | ) | – | ||||||
| Net cash used in investing activities | $ | (1,416,066 | ) | $ | (1,249,942 | ) | |||
| Cash flows from financing activities | |||||||||
| Borrowings, net of debt issuance costs | $ | 957,503 | $ | 1,041,648 | |||||
| Repayments of debt | (710,000 | ) | (549,000 | ) | |||||
| Increase (decrease) in outstanding checks | (1,763 | ) | 1,800 | ||||||
| Proceeds from the issuance of WES common units, net of offering expenses | 725,050 | 211,932 | |||||||
| Proceeds from the issuance of WGP common units, net of offering expenses | (2,367 | ) | 412,020 | ||||||
| Contributions received from Chipeta noncontrolling interest owners (including Anadarko) | 2,247 | 29,108 | |||||||
| Distributions to Chipeta noncontrolling interest owners (including Anadarko) | (13,127 | ) | (17,303 | ) | |||||
| Distributions to WES common unitholders | (130,706 | ) | (99,570 | ) | |||||
| Distributions to WGP unitholders | (137,000 | ) | – | ||||||
| Net contributions from (distributions to) Anadarko | 4,458 | 137,844 | |||||||
| Net cash provided by financing activities | $ | 694,295 | $ | 1,168,479 | |||||
| Net increase (decrease) in cash and cash equivalents | $ | (309,471 | ) | $ | 195,997 | ||||
| Cash and cash equivalents at beginning of period | 422,556 | 226,559 | |||||||
| Cash and cash equivalents at end of period | $ | 113,085 | $ | 422,556 | |||||
WESTERN GAS CONTACT
Benjamin Fink, CFA
SVP, Chief Financial Officer and Treasurer
832.636.6010
Email Contact
