WES
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Western Gas Announces Third-Quarter 2016 Results

HOUSTON, Nov. 1, 2016 /PRNewswire/ — Western Gas Partners, LP (NYSE: WES) (“WES” or the “Partnership”) and Western Gas Equity Partners, LP (NYSE: WGP) (“WGP”) today announced third-quarter 2016 financial and operating results.

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WESTERN GAS PARTNERS, LP

Net income (loss) available to limited partners for the third quarter of 2016 totaled $81.7 million, or $0.54 per common unit (diluted), with third-quarter 2016 Adjusted EBITDA(1) of $278.2 million and third-quarter 2016 Distributable cash flow(1) of $237.3 million.

WES previously declared a quarterly distribution of $0.845 per unit for the third quarter of 2016. This distribution represented a 2% increase over the prior quarter’s distribution and a 9% increase over the third-quarter 2015 distribution of $0.775 per unit. The third-quarter 2016 Coverage ratio(1) of 1.42 times was based on the quarterly distribution of $0.845 per unit and was calculated by dividing the quarter’s Distributable cash flow(1) by quarterly distributions declared payable to the general partner and common unitholders.

“The Partnership delivered yet another outstanding financial quarter highlighted by the resiliency of our asset portfolio. We continue to experience strong growth in the Delaware Basin with Ramsey IV successfully ramping to capacity during the quarter, and Ramsey V being placed into service last week,” said Chief Executive Officer, Don Sinclair. “Additionally, Ramsey II remains on schedule to return to service by the end of the year, and we have accelerated the scheduled start-up of Ramsey VI to the fourth quarter of 2017.”

(1)

Please see the tables at the end of this release for a reconciliation of GAAP to non-GAAP measures and calculation of the Coverage ratio. Distributable cash flow for the quarter includes $13.7 million of business interruption insurance proceeds received during the quarter, and does not include any amounts related to WES’s anticipated range of $0 to $5 million in reimbursable amounts attributable to the quarter.

 

Total throughput attributable to WES for natural gas assets for the third quarter of 2016 averaged 4.1 Bcf/d, which was 5% above the prior quarter and remained constant compared to the third quarter of 2015(2). Total throughput for crude/NGL assets for the third quarter of 2016 averaged 185 MBbls/d, which was 1% below the prior quarter and 3% below the third quarter of 2015(2).

Capital expenditures attributable to WES, including equity investments but excluding acquisitions, totaled $114.4 million on a cash basis and $93.0 million on an accrual basis during the third quarter of 2016, with maintenance capital expenditures on a cash basis of $15.3 million, or 6% of Adjusted EBITDA(1). WES is adjusting its outlook ranges for full-year Adjusted EBITDA(1) and maintenance capital expenditures as a percentage of full-year Adjusted EBITDA(1) to $980 million to $1.0 billion(3) and 6% to 8%, respectively.

WESTERN GAS EQUITY PARTNERS, LP

WGP indirectly owns the entire general partner interest in WES, 100% of the incentive distribution rights in WES and 50,132,046 WES common units. Net income (loss) available to limited partners for the third quarter of 2016 totaled $91.4 million, or $0.42 per common unit (diluted).

WGP previously declared a quarterly distribution of $0.44750 per unit for the third quarter of 2016. This distribution represented a 3% increase over the prior quarter’s distribution and a 17% increase over the third-quarter 2015 distribution of $0.38125 per unit. WGP received distributions from WES of $98.7 million attributable to the third quarter and will pay $98.0 million in distributions for the same period. WGP expects full-year 2016 distribution growth to be 19%.

(1)

Please see the tables at the end of this release for a reconciliation of GAAP to non-GAAP measures and calculation of the Coverage ratio.

(2)

Financial and operational information for the third quarter of 2015 has been recast for the acquisition of Springfield.

(3)

This press release contains forward-looking estimates of the range of Adjusted EBITDA projected to be generated by WES in its 2016 fiscal year. A reconciliation of the Adjusted EBITDA range to net cash provided by operating activities and net income is not provided because the items necessary to estimate such amounts are not reasonably accessible or estimable at this time.

 

CONFERENCE CALL TOMORROW AT 8 A.M. CDT

WES and WGP will host a joint conference call on Wednesday, November 2, 2016, at 8:00 a.m. Central Daylight Time (9:00 a.m. Eastern Daylight Time) to discuss third-quarter 2016 results. Individuals who would like to participate should dial 844-836-8745 (Domestic) or 412-317-5439 (International) approximately 15 minutes before the scheduled conference call time. Pre-registration is available through the investor relations page at www.westerngas.com. Pre-registrants will be issued a personal identification number to use when dialing in to the live conference call, which will enable the participant to bypass the operator and gain immediate access to the call. To access the live audio webcast of the conference call, please visit the investor relations section of the Partnership’s website at www.westerngas.com. A replay of the conference call will also be available on the website for two weeks following the call.

Western Gas Partners, LP (“WES”) is a growth-oriented Delaware master limited partnership formed by Anadarko Petroleum Corporation to acquire, own, develop and operate midstream energy assets. With midstream assets located in the Rocky Mountains, the Mid-Continent, North-central Pennsylvania and Texas, WES is engaged in the business of gathering, processing, compressing, treating and transporting natural gas, condensate, natural gas liquids and crude oil for Anadarko, as well as for 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 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 and Forms 10-Q 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 CONTACT
Jonathon E. VandenBrand
Director, Investor Relations
[email protected]
832.636.1007

Western Gas Partners, LP Reconciliation of GAAP to Non-GAAP Measures

Below are reconciliations of (i) net income (loss) attributable to Western Gas Partners, LP (GAAP) to WES’s Distributable cash flow (non-GAAP), (ii) net income (loss) attributable to Western Gas Partners, LP (GAAP) and net cash provided by operating activities (GAAP) to Adjusted EBITDA attributable to Western Gas Partners, LP (“Adjusted EBITDA”) (non-GAAP), and (iii) operating income (loss) (GAAP) to Adjusted gross margin attributable to Western Gas Partners, LP (“Adjusted gross margin”) (non-GAAP), as required under Regulation G of the Securities Exchange Act of 1934. Management believes that WES’s Distributable cash flow, Adjusted EBITDA, Adjusted gross margin, 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, Adjusted gross margin 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, Adjusted gross margin and Coverage ratio should be considered in conjunction with net income (loss) and other applicable performance measures, such as operating income (loss) or cash flows from operating activities.

Western Gas Partners, LP Reconciliation of GAAP to Non-GAAP Measures, continued

Distributable Cash Flow

WES defines Distributable cash flow as Adjusted EBITDA, plus interest income and the net settlement amounts from the sale and/or purchase of natural gas, condensate and NGLs under WES’s commodity price swap agreements to the extent such amounts are not recognized as Adjusted EBITDA, less net cash paid (or to be paid) for interest expense (including amortization of deferred debt issuance costs originally paid in cash, offset by non-cash capitalized interest), maintenance capital expenditures, Series A Preferred unit distributions and income taxes.



Three Months Ended
 September 30,


Nine Months Ended
 September 30,

thousands except Coverage ratio


2016


2015 (1)


2016


2015 (1)

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


$

167,746



$

184,137



$

448,327



$

159,987


Add:









Distributions from equity investees


27,133



25,482



76,263



73,054


Non-cash equity-based compensation expense


1,469



1,148



4,018



3,423


Interest expense, net (non-cash settled) (2)


(1,173)



4,310



(12,097)



9,920


Income tax (benefit) expense


472



12,644



7,431



37,160


Depreciation and amortization (3)


66,589



66,714



197,678



202,945


Impairments


2,392



2,335



11,313



276,579


Above-market component of swap extensions with Anadarko


18,417



7,916



34,782



7,916


Other expense (3)


40





96




Less:









Gain (loss) on divestiture and other, net


(6,230)



77,254



(8,769)



77,248


Equity income, net – affiliates


20,294



21,976



56,801



59,137


Cash paid for maintenance capital expenditures (3)


15,306



14,704



55,288



40,809


Capitalized interest


1,343



1,039



4,674



6,826


Cash paid for (reimbursement of) income taxes






67



(138)


Series A Preferred unit distributions


14,907





30,876




Other income (3)


150



82



272



219


Distributable cash flow


$

237,315



$

189,631



$

628,602



$

586,883


Distributions declared (4)









Limited partners – common units


$

110,418





$

325,369




General partner


56,324





163,105




Total


$

166,742





$

488,474




Coverage ratio


1.42


x



1.29

x




(1)

In March 2016, WES acquired Springfield Pipeline LLC (“Springfield”) from Anadarko. Springfield owns a 50.1% interest in an oil gathering system and a gas gathering system, such interest being referred to as the “Springfield interest.” Financial information has been recast to include the financial position and results attributable to the Springfield interest.

(2) 

Includes accretion revisions related to the Deferred purchase price obligation – Anadarko.

(3) 

Includes WES’s 75% share of depreciation and amortization; other expense; cash paid for maintenance capital expenditures; and other income attributable to Chipeta.

(4) 

Reflects cash distributions of $0.845 and $2.490 per unit declared for the three and nine months ended September 30, 2016, respectively.

 

Western Gas Partners, LP Reconciliation of GAAP to Non-GAAP Measures, continued

Adjusted EBITDA Attributable to Western Gas Partners, LP

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 and amortization, impairments, and other expense (including lower of cost or market inventory adjustments recorded in cost of product), less gain (loss) on divestiture and other, net, income from equity investments, interest income, income tax benefit and other income.



Three Months Ended
 September 30,


Nine Months Ended
 September 30,

thousands


2016


2015 (1)


2016


2015 (1)

Reconciliation of Net income (loss) attributable to Western Gas Partners, LP to Adjusted EBITDA attributable to Western Gas Partners, LP









Net income (loss) attributable to Western Gas Partners, LP


$

167,746



$

184,137



$

448,327



$

159,987


Add:









Distributions from equity investees


27,133



25,482



76,263



73,054


Non-cash equity-based compensation expense


1,469



1,148



4,018



3,423


Interest expense


30,768



31,773



75,687



82,337


Income tax expense


472



12,644



7,431



37,160


Depreciation and amortization (2)


66,589



66,714



197,678



202,945


Impairments


2,392



2,335



11,313



276,579


Other expense (2)


40





96




Less:









Gain (loss) on divestiture and other, net


(6,230)



77,254



(8,769)



77,248


Equity income, net – affiliates


20,294



21,976



56,801



59,137


Interest income – affiliates


4,225



4,225



12,675



12,675


Other income (2)


150



82



272



219


Adjusted EBITDA attributable to Western Gas Partners, LP


$

278,170



$

220,696



$

759,834



$

686,206



Reconciliation of Net cash provided by operating activities to Adjusted EBITDA attributable to Western Gas Partners, LP









Net cash provided by (used in) operating activities


$

263,872



$

224,572



$

657,738



$

596,893


Interest (income) expense, net


26,543



27,548



63,012



69,662


Uncontributed cash-based compensation awards


290



21



448



166


Accretion and amortization of long-term obligations, net


121



(5,226)



9,176



(12,296)


Current income tax (benefit) expense


131



9,030



5,110



27,164


Other (income) expense, net


(153)



(85)



(224)



(227)


Distributions from equity investments in excess of cumulative earnings – affiliates


5,981



3,871



16,592



12,409


Changes in operating working capital:









Accounts receivable, net


7,866



(22,741)



41,108



18,617


Accounts and imbalance payables and accrued liabilities, net


(26,330)



(13,288)



(24,103)



(17,695)


Other


3,184



(168)



1,445



1,686


Adjusted EBITDA attributable to noncontrolling interest


(3,335)



(2,838)



(10,468)



(10,173)


Adjusted EBITDA attributable to Western Gas Partners, LP


$

278,170



$

220,696



$

759,834



$

686,206


Cash flow information of Western Gas Partners, LP









Net cash provided by (used in) operating activities






$

657,738



$

596,893


Net cash provided by (used in) investing activities






(1,040,692)



(368,651)


Net cash provided by (used in) financing activities






429,368



(222,096)




(1) 

Financial information has been recast to include the financial position and results attributable to the Springfield interest.

(2) 

Includes WES’s 75% share of depreciation and amortization; other expense; and other income attributable to Chipeta.

 

Western Gas Partners, LP Reconciliation of GAAP to Non-GAAP Measures, continued

Adjusted Gross Margin Attributable to Western Gas Partners, LP

WES defines Adjusted gross margin as total revenues and other, less cost of product and reimbursements for electricity-related expenses recorded as revenue, plus distributions from equity investees and excluding the noncontrolling interest owner’s proportionate share of revenue and cost of product.



Three Months Ended
 September 30,


Nine Months Ended
 September 30,

thousands


2016


2015 (1)


2016


2015 (1)

Reconciliation of Operating income (loss) to Adjusted gross margin attributable to Western Gas Partners, LP









Operating income (loss)


$

197,288



$

226,432



$

527,053



$

274,812


Add:









Distributions from equity investees


27,133



25,482



76,263



73,054


Operation and maintenance


74,755



88,722



226,141



242,744


General and administrative


11,382



10,143



33,542



30,632


Property and other taxes


10,670



9,042



33,098



27,908


Depreciation and amortization


67,246



67,367



199,646



204,896


Impairments


2,392



2,335



11,313



276,579


Less:









Gain (loss) on divestiture and other, net


(6,230)



77,254



(8,769)



77,248


Proceeds from business interruption insurance claims


13,667





16,270




Equity income, net – affiliates


20,294



21,976



56,801



59,137


Reimbursed electricity-related charges recorded as revenues


15,170



15,392



45,707



40,423


Adjusted gross margin attributable to noncontrolling interest


3,984



3,753



12,588



13,222


Adjusted gross margin attributable to Western Gas Partners, LP


$

343,981



$

311,148



$

984,459



$

940,595


Adjusted gross margin attributable to Western Gas Partners, LP for natural gas assets


$

306,393



$

277,407



$

877,583



$

842,213


Adjusted gross margin for crude/NGL assets


37,588



33,741



106,876



98,382




(1) 

Financial information has been recast to include the financial position and results attributable to the Springfield interest.

 

 

Western Gas Partners, LP

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)




Three Months Ended
 September 30,


Nine Months Ended
 September 30,

thousands except per-unit amounts


2016


2015 (1)


2016


2015 (1)

Revenues and other









Gathering, processing and transportation


$

315,192



$

283,029



$

910,332



$

844,197


Natural gas and natural gas liquids sales


164,036



147,000



379,585



486,874


Other


2,417



2,486



3,533



4,443


Total revenues and other


481,645



432,515



1,293,450



1,335,514


Equity income, net – affiliates


20,294



21,976



56,801



59,137


Operating expenses









Cost of product


145,643



127,704



326,959



414,328


Operation and maintenance


74,755



88,722



226,141



242,744


General and administrative


11,382



10,143



33,542



30,632


Property and other taxes


10,670



9,042



33,098



27,908


Depreciation and amortization


67,246



67,367



199,646



204,896


Impairments


2,392



2,335



11,313



276,579


Total operating expenses


312,088



305,313



830,699



1,197,087


Gain (loss) on divestiture and other, net


(6,230)



77,254



(8,769)



77,248


Proceeds from business interruption insurance claims


13,667





16,270




Operating income (loss)


197,288



226,432



527,053



274,812


Interest income – affiliates


4,225



4,225



12,675



12,675


Interest expense


(30,768)



(31,773)



(75,687)



(82,337)


Other income (expense), net


153



85



224



227


Income (loss) before income taxes


170,898



198,969



464,265



205,377


Income tax (benefit) expense


472



12,644



7,431



37,160


Net income (loss)


170,426



186,325



456,834



168,217


Net income attributable to noncontrolling interest


2,680



2,188



8,507



8,230


Net income (loss) attributable to Western Gas Partners, LP


$

167,746



$

184,137



$

448,327



$

159,987


Limited partners’ interest in net income (loss):









Net income (loss) attributable to Western Gas Partners, LP


$

167,746



$

184,137



$

448,327



$

159,987


Pre-acquisition net (income) loss allocated to Anadarko




(19,848)



(11,326)



(63,606)


Series A Preferred units interest in net (income) loss


(25,539)





(50,989)




General partner interest in net (income) loss


(60,551)



(50,267)



(174,332)



(133,415)


Common and Class C limited partners’ interest in net income (loss)


$

81,656



$

114,022



$

211,680



$

(37,034)


Net income (loss) per common unit – basic and diluted


$

0.54



$

0.79



$

1.39



$

(0.35)


Weighted-average common units outstanding – basic


130,672



128,575



130,112



128,267


Weighted-average common units outstanding – diluted


164,658



139,736



157,107



139,309




(1) 

Financial information has been recast to include the financial position and results attributable to the Springfield interest.

 

Western Gas Partners, LP

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)


thousands except number of units


September 30,
 2016


December 31,

2015 (1)

Current assets


$

367,814



$

299,217


Note receivable – Anadarko


260,000



260,000


Net property, plant and equipment


5,030,894



4,858,779


Other assets


1,842,390



1,883,201


Total assets


$

7,501,098



$

7,301,197


Current liabilities


$

254,385



$

235,488


Long-term debt


2,907,395



2,690,651


Asset retirement obligations and other


145,964



268,356


Deferred purchase price obligation – Anadarko


16,425



188,674


Total liabilities


$

3,324,169



$

3,383,169


Equity and partners’ capital





Series A Preferred units (21,922,831 and zero units issued and outstanding at September 30, 2016, and December 31, 2015, respectively)


$

628,548



$


Common units (130,671,970 and 128,576,965 units issued and outstanding at September 30, 2016, and December 31, 2015, respectively)


2,604,524



2,588,991


Class C units (12,160,424 and 11,411,862 units issued and outstanding at September 30, 2016, and December 31, 2015, respectively)


741,183



710,891


General partner units (2,583,068 units issued and outstanding at September 30, 2016, and December 31, 2015)


138,040



120,164


Net investment by Anadarko




430,598


Noncontrolling interest


64,634



67,384


Total liabilities, equity and partners’ capital


$

7,501,098



$

7,301,197




(1) 

Financial information has been recast to include the financial position and results attributable to the Springfield interest.

 

Western Gas Partners, LP

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)



Nine Months Ended
 September 30,

thousands


2016


2015 (1)

Cash flows from operating activities





Net income (loss)


$

456,834



$

168,217


Adjustments to reconcile net income (loss) to net cash provided by operating activities and changes in working capital:





Depreciation and amortization


199,646



204,896


Impairments


11,313



276,579


(Gain) loss on divestiture and other, net


8,769



(77,248)


Change in other items, net


(18,824)



24,449


Net cash provided by (used in) operating activities


$

657,738



$

596,893


Cash flows from investing activities





Capital expenditures


$

(372,725)



$

(505,848)


Contributions in aid of construction costs from affiliates


4,927




Acquisitions from affiliates


(716,465)



(10,369)


Acquisitions from third parties




(3,514)


Investments in equity affiliates


139



(9,052)


Distributions from equity investments in excess of cumulative earnings – affiliates


16,592



12,409


Proceeds from the sale of assets to affiliates


623



700


Proceeds from the sale of assets to third parties


7,819



147,023


Proceeds from property insurance claims


18,398




Net cash provided by (used in) investing activities


$

(1,040,692)



$

(368,651)


Cash flows from financing activities





Borrowings, net of debt issuance costs


$

1,094,600



$

769,606


Repayments of debt


(880,000)



(610,000)


Increase (decrease) in outstanding checks


(1,070)



(2,435)


Proceeds from the issuance of common units, net of offering expenses


25,000



57,353


Proceeds from the issuance of Series A Preferred units, net of offering expenses


686,937




Distributions to unitholders


(490,289)



(398,983)


Distributions to noncontrolling interest owner


(11,257)



(10,150)


Net contributions from (distributions to) Anadarko


(29,335)



(35,403)


Above-market component of swap extensions with Anadarko


34,782



7,916


Net cash provided by (used in) financing activities


$

429,368



$

(222,096)


Net increase (decrease) in cash and cash equivalents


$

46,414



$

6,146


Cash and cash equivalents at beginning of period


98,033



67,054


Cash and cash equivalents at end of period


$

144,447



$

73,200




(1) 

Financial information has been recast to include the financial position and results attributable to the Springfield interest.

 

 

Western Gas Partners, LP

OPERATING STATISTICS

(Unaudited)




Three Months Ended
 September 30,


Nine Months Ended
 September 30,



2016


2015 (1)


2016


2015 (1)

Throughput for natural gas assets (MMcf/d)









Gathering, treating and transportation


1,562



1,704



1,556



1,862


Processing


2,448



2,327



2,301



2,351


Equity investment (2)


179



177



178



171


  Total throughput for natural gas assets


4,189



4,208



4,035



4,384


  Throughput attributable to noncontrolling interest for natural gas assets


119



126



127



149


Total throughput attributable to Western Gas Partners, LP for natural gas assets


4,070



4,082



3,908



4,235


Throughput for crude/NGL assets (MBbls/d)









Gathering, treating and transportation


58



66



59



72


Equity investment (3)


127



125



126



114


  Total throughput for crude/NGL assets


185



191



185



186


Adjusted gross margin per Mcf attributable to Western Gas Partners, LP for natural gas assets (4)


$

0.82



$

0.74



$

0.82



$

0.73


Adjusted gross margin per Bbl for crude/NGL assets (5)


2.20



1.92



2.10



1.94





















(1) 

Throughput and adjusted gross margin have been recast to include results attributable to the Springfield interest.

(2) 

Represents WES’s 14.81% share of average Fort Union throughput and 22% share of average Rendezvous throughput.

(3) 

Represents WES’s 10% share of average White Cliffs throughput, WES’s 25% share of average Mont Belvieu JV throughput, WES’s 20% share of average TEG and TEP throughput, and WES’s 33.33% share of average FRP throughput.

(4) 

Average for period. Calculated as Adjusted gross margin attributable to Western Gas Partners, LP for natural gas assets (total revenues and other for natural gas assets, less reimbursements for electricity-related expenses recorded as revenue and cost of product for natural gas assets, plus distributions from WES’s equity investments in Fort Union and Rendezvous, and excluding the noncontrolling interest owner’s proportionate share of revenue and cost of product), divided by total throughput (MMcf/d) attributable to Western Gas Partners, LP for natural gas assets.

(5) 

Average for period. Calculated as Adjusted gross margin for crude/NGL assets (total revenues and other for crude/NGL assets, less reimbursements for electricity-related expenses recorded as revenue and cost of product for crude/NGL assets, plus distributions from WES’s equity investments in White Cliffs, the Mont Belvieu JV, TEG, TEP and FRP), divided by total throughput (MBbls/d) for crude/NGL assets.

 

 

Western Gas Equity Partners, LP

CALCULATION OF CASH AVAILABLE FOR DISTRIBUTION

(Unaudited)


thousands except per-unit amount and Coverage ratio


Three Months Ended
 September 30, 2016

Distributions declared by Western Gas Partners, LP:



General partner interest


$

3,232


Incentive distribution rights


53,092


Common units held by WGP


42,362


Less:



Public company general and administrative expense


730


Interest expense


534


Cash available for distribution


$

97,422


Declared distribution per common unit


$

0.44750


Distributions declared by Western Gas Equity Partners, LP


$

97,968


Coverage ratio


0.99

x

 

 

Western Gas Equity Partners, LP

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)




Three Months Ended
 September 30,


Nine Months Ended
 September 30,

thousands except per-unit amounts


2016


2015 (1)


2016


2015 (1)

Revenues and other









Gathering, processing and transportation


$

315,192



$

283,029



$

910,332



$

844,197


Natural gas and natural gas liquids sales


164,036



147,000



379,585



486,874


Other


2,417



2,486



3,533



4,443


Total revenues and other


481,645



432,515



1,293,450



1,335,514


Equity income, net – affiliates


20,294



21,976



56,801



59,137


Operating expenses









Cost of product


145,643



127,704



326,959



414,328


Operation and maintenance


74,755



88,722



226,141



242,744


General and administrative


12,112



10,884



36,514



32,983


Property and other taxes


10,670



9,054



33,113



27,946


Depreciation and amortization


67,246



67,367



199,646



204,896


Impairments


2,392



2,335



11,313



276,579


Total operating expenses


312,818



306,066



833,686



1,199,476


Gain (loss) on divestiture and other, net


(6,230)



77,254



(8,769)



77,248


Proceeds from business interruption insurance claims


13,667





16,270




Operating income (loss)


196,558



225,679



524,066



272,423


Interest income – affiliates


4,225



4,225



12,675



12,675


Interest expense


(31,301)



(31,773)



(76,869)



(82,339)


Other income (expense), net


165



96



270



256


Income (loss) before income taxes


169,647



198,227



460,142



203,015


Income tax (benefit) expense


472



12,644



7,431



37,160


Net income (loss)


169,175



185,583



452,711



165,855


Net income (loss) attributable to noncontrolling interests


77,778



76,364



190,635



(14,643)


Net income (loss) attributable to Western Gas Equity Partners, LP


$

91,397



$

109,219



$

262,076



$

180,498


Limited partners’ interest in net income (loss):









Net income (loss) attributable to Western Gas Equity Partners, LP


$

91,397



$

109,219



$

262,076



$

180,498


Pre-acquisition net (income) loss allocated to Anadarko




(19,848)



(11,326)



(63,606)


Limited partners’ interest in net income (loss)


$

91,397



$

89,371



$

250,750



$

116,892


Net income (loss) per common unit – basic and diluted


$

0.42



$

0.41



$

1.15



$

0.53


Weighted-average common units outstanding – basic and diluted


218,922



218,914



218,921



218,912




(1) 

Financial information has been recast to include the financial position and results attributable to the Springfield interest.

 

Western Gas Equity Partners, LP

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)


thousands except number of units


September 30,
2016


December 31,
2015 (1)

Current assets


$

369,750



$

301,364


Note receivable – Anadarko


260,000



260,000


Net property, plant and equipment


5,030,894



4,858,779


Other assets


1,844,055



1,883,201


Total assets


$

7,504,699



$

7,303,344


Current liabilities


$

254,585



$

235,565


Long-term debt


2,935,395



2,690,651


Asset retirement obligations and other


145,964



268,356


Deferred purchase price obligation – Anadarko


16,425



188,674


Total liabilities


$

3,352,369



$

3,383,246


Equity and partners’ capital





Common units (218,922,303 and 218,919,380 units issued and outstanding at September 30, 2016, and December 31, 2015, respectively)


$

1,071,185



$

1,060,842


Net investment by Anadarko




430,598


Noncontrolling interests


3,081,145



2,428,658


Total liabilities, equity and partners’ capital


$

7,504,699



$

7,303,344




(1) 

Financial information has been recast to include the financial position and results attributable to the Springfield interest.

 

Western Gas Equity Partners, LP

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)




Nine Months Ended
 September 30,

thousands


2016


2015 (1)

Cash flows from operating activities





Net income (loss)


$

452,711



$

165,855


Adjustments to reconcile net income (loss) to net cash provided by operating activities and changes in working capital:





Depreciation and amortization


199,646



204,896


Impairments


11,313



276,579


(Gain) loss on divestiture and other, net


8,769



(77,248)


Change in other items, net


(17,739)



25,214


Net cash provided by (used in) operating activities


$

654,700



$

595,296


Cash flows from investing activities





Capital expenditures


$

(372,725)



$

(505,848)


Contributions in aid of construction costs from affiliates


4,927




Acquisitions from affiliates


(716,465)



(10,369)


Acquisitions from third parties




(3,514)


Investments in equity affiliates


139



(9,052)


Distributions from equity investments in excess of cumulative earnings – affiliates


16,592



12,409


Proceeds from the sale of assets to affiliates


623



700


Proceeds from the sale of assets to third parties


7,819



147,023


Proceeds from property insurance claims


18,398




Net cash provided by (used in) investing activities


$

(1,040,692)



$

(368,651)


Cash flows from financing activities





Borrowings, net of debt issuance costs


$

1,120,580



$

769,606


Repayments of debt


(880,000)



(611,150)


Increase (decrease) in outstanding checks


(1,070)



(2,435)


Proceeds from the issuance of WES common units, net of offering expenses




57,353


Proceeds from the issuance of WES Series A Preferred units, net of offering expenses


686,937




Distributions to WGP unitholders


(276,114)



(223,016)


Distributions to Chipeta noncontrolling interest owner


(11,257)



(10,150)


Distributions to noncontrolling interest owners of WES


(211,877)



(171,737)


Net contributions from (distributions to) Anadarko


(29,335)



(35,403)


Above-market component of swap extensions with Anadarko


34,782



7,916


Net cash provided by (used in) financing activities


$

432,646



$

(219,016)


Net increase (decrease) in cash and cash equivalents


$

46,654



$

7,629


Cash and cash equivalents at beginning of period


99,694



67,213


Cash and cash equivalents at end of period


$

146,348



$

74,842




(1) 

Financial information has been recast to include the financial position and results attributable to the Springfield interest.

 

SOURCE Western Gas Partners, LP; Western Gas Equity Partners, LP

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