HOUSTON, May 12, 2009 (BUSINESS WIRE) — Western Gas Partners, LP (NYSE:WES) today announced first-quarter 2009 financial and operating results.
Net income available to limited partners for the first quarter of 2009 totaled $16.6 million, or $0.30 per limited partner unit (diluted). The Partnership’s first-quarter Adjusted EBITDA(1) was $23.1 million and distributable cash flow(1) was $21.3 million, resulting in a coverage ratio of 1.25 times for the period.
“Our predominantly fee-based business model, combined with the geographic diversification of our assets, again enabled us to deliver results consistent with expectations,” said Western Gas Partners’ President and Chief Executive Officer Robert Gwin. “We continue to focus on controlling operating expenses and capital expenditures to maximize distributable cash flow, and are pleased with the performance of our assets in the face of reduced drilling activity across the industry resulting from the current natural gas price environment.”
Total throughput volumes for the first quarter of 2009 were 1,063 MMcf/d, representing an approximate 1 percent decline over the prior quarter, and an approximate 2 percent decline over the first quarter of 2008.
Capital expenditures totaled approximately $6.5 million during the first quarter of 2009. Of this amount, maintenance capital expenditures were approximately $4.2 million, or 18 percent of Adjusted EBITDA.
The Partnership previously declared a quarterly distribution of $0.30 per unit for the first quarter of 2009, payable on May 15, 2009 to unitholders of record at the close of business on May 1, 2009.
CONFERENCE CALL TOMORROW AT 9 A.M. CDT
The Partnership will host a conference call on Wednesday, May 13, at 9 a.m. Central Daylight Time (10 a.m. Eastern Daylight Time) to discuss first-quarter results. The dial-in number for the call is 888.679.8035 and the participant code is 20398614. For complete instructions on how to participate in the conference call, or to access the live audio webcast and slide presentation, please visitwww.westerngas.com. A replay of the call will also be available on the Web site for approximately two weeks following the conference call.
1 Please see the tables at the end of this release for a reconciliation of GAAP to non-GAAP measures.
Western Gas Partners, LP is a growth-oriented Delaware limited partnership formed by Anadarko Petroleum Corporation (NYSE:APC) to own, operate, acquire and develop midstream energy assets. With midstream assets in East and West Texas, the Rocky Mountains and the Mid-Continent, the Partnership is engaged in the business of gathering, compressing, processing, treating and transporting natural gas for Anadarko and other producers and customers. For more information about Western Gas Partners, please visit www.westerngas.com.
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Western Gas Partners believes that its 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 obtain new sources of natural gas supplies; the effect of fluctuations in commodity prices and the demand for natural gas and related products; and construction costs or capital expenditures exceeding estimated or budgeted costs or expenditures, as well as other factors described in the “Risk Factors” section of the Partnership’s 2008 Annual Report on Form 10-K filed with the Securities and Exchange Commission and other public filings and press releases by Western Gas Partners. Western Gas Partners undertakes no obligation to publicly update or revise any forward-looking statements.
Reconciliation of GAAP to Non-GAAP Measures
Below are reconciliations of Distributable Cash Flow and Adjusted EBITDA (non-GAAP) to Net Income (GAAP) as required under Regulation G of the Securities Exchange Act of 1934. Management believes that the presentation of Distributable Cash Flow and Adjusted EBITDA provides information useful in assessing the Partnership’s financial condition and results of operations and that Distributable Cash Flow and Adjusted EBITDA are widely accepted financial indicators of a company’s ability to incur and service debt, fund capital expenditures and make distributions. Distributable Cash Flow and Adjusted EBITDA, as defined by the Partnership, may not be comparable to similarly titled measures used by other companies. Therefore, the Partnership’s consolidated Distributable Cash Flow and Adjusted EBITDA should be considered in conjunction with net income and other performance measures, such as operating income or cash flow from operating activities.
Distributable Cash Flow
The Partnership defines Distributable Cash Flow as Adjusted EBITDA, plus interest income, less net cash paid for interest expense, maintenance capital expenditures and income taxes.
| Quarter Ended March 31, | ||||||
| 2009 | 2008 | |||||
| (in thousands) | ||||||
| Reconciliation of Net Income to Distributable Cash Flow | ||||||
| Net income | $ | 16,958 | $ | 15,121 | ||
| Add: | ||||||
| Distributions from equity investee | 1,111 | 1,407 | ||||
| Non-cash share-based compensation expense | 846 | – | ||||
| Interest expense, net – affiliate (non-cash settled) | – | 1,789 | ||||
| Income tax expense | – | 8,467 | ||||
| Depreciation | 8,621 | 7,782 | ||||
| Less: | ||||||
| Equity income, net | 1,550 | 342 | ||||
| Cash paid for maintenance capital expenditures | 4,226 | 2,600 | ||||
| Other income | 5 | 4 | ||||
| Income tax benefit | 490 | – | ||||
| Distributable Cash Flow | $ | 21,265 | $ | 31,620 | ||
Reconciliation of GAAP to Non-GAAP Measures, continued
Adjusted EBITDA
The Partnership defines Adjusted EBITDA as net income (loss), plus distributions from equity investee, non-cash share-based compensation expense, interest expense, income tax expense and depreciation and impairment, less income from equity investment, interest income, income tax benefit and other income.
| Quarter Ended March 31, | ||||||
| 2009 | 2008 | |||||
|
| (in thousands) | |||||
| Reconciliation of Net Income to Adjusted EBITDA | ||||||
| Net Income | $ | 16,958 | $ | 15,121 | ||
| Add: | ||||||
| Distributions from equity investee | 1,111 | 1,407 | ||||
| Non-cash share-based compensation expense | 846 | – | ||||
| Interest expense, net – affiliates | 1,785 | 1,789 | ||||
| Income tax expense | – | 8,467 | ||||
| Depreciation | 8,621 | 7,782 | ||||
| Less: | ||||||
| Equity income, net | 1,550 | 342 | ||||
| Interest income – affiliate | 4,225 | – | ||||
| Other income | 5 | 4 | ||||
| Income tax benefit | 490 | – | ||||
| Adjusted EBITDA | $ | 23,051 | $ | 34,220 | ||
| Western Gas Partners, LP CONDENSED CONSOLIDATED STATEMENTS OF INCOME | |||||||||||
| Quarter Ended | |||||||||||
| March 31, | |||||||||||
| 2009 | 2008 | ||||||||||
|
| (in thousands except per-unit amounts) | ||||||||||
| Revenues | |||||||||||
| Gathering, processing and transportation of natural gas | $ | 30,717 | $ | 31,305 | |||||||
| Natural gas, natural gas liquids and condensate sales | 17,979 | 47,934 | |||||||||
| Equity income and other | 2,192 | 2,183 | |||||||||
| Total Revenues | $ | 50,888 | $ | 81,422 | |||||||
| Operating Expenses | |||||||||||
| Cost of product | $ | 12,528 | $ | 33,728 | |||||||
| Operation and maintenance | 9,236 | 10,946 | |||||||||
| General and administrative | 4,723 | 1,960 | |||||||||
| Property and other taxes | 1,757 | 1,633 | |||||||||
| Depreciation | 8,621 | 7,782 | |||||||||
| Total Operating Expenses | $ | 36,865 | $ | 56,049 | |||||||
| Operating Income | $ | 14,023 | $ | 25,373 | |||||||
| Interest income (expense), net – affiliates | 2,440 | (1,789 | ) | ||||||||
| Other income (expense) | 5 | 4 | |||||||||
| Income Before Income Taxes | $ | 16,468 | $ | 23,588 | |||||||
| Income Tax (Benefit) Expense | (490 | ) | 8,467 | ||||||||
| Net Income | $ | 16,958 | $ | 15,121 | |||||||
| Calculation of Limited Partner Interest in Net Income: | |||||||||||
| Net income | $ | 16,958 | n/a | ||||||||
| Less general partner interest in net income | 339 | n/a | |||||||||
| Limited partner interest in net income | $ | 16,619 | n/a | ||||||||
| Net income per limited partner unit – basic and diluted | $ | 0.30 | n/a | ||||||||
| Limited partner units outstanding – basic and diluted | 55,629 | n/a | |||||||||
| Western Gas Partners, LP CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||
| March 31, 2009 | December 31, | |||||
| (in thousands) | ||||||
| Cash and cash equivalents | $ | 27,296 | $ | 33,306 | ||
| Other current assets | 16,733 | 12,073 | ||||
| Note receivable – Anadarko | 260,000 | 260,000 | ||||
| Net property, plant and equipment | 514,581 | 517,815 | ||||
| Goodwill | 14,436 | 14,436 | ||||
| Equity investment | 18,622 | 18,183 | ||||
| Other assets | 596 | 628 | ||||
| Total Assets | $ | 852,264 | $ | 856,441 | ||
| Accounts payable | $ | 4,252 | $ | 5,544 | ||
| Other current liabilities | 9,803 | 10,797 | ||||
| Note payable – Anadarko | 175,000 | 175,000 | ||||
| Other long-term liabilities | 9,738 | 10,146 | ||||
| Total Liabilities | $ | 198,793 | $ | 201,487 | ||
| Common unit partner capital (29,093 units issued and outstanding at March 31, 2009 and December 31, 2008) | $ | 366,638 |
| $ | 368,049 | |
| Subordinated unit partner capital (26,536 units issued and outstanding at March 31, 2009 and December 31, 2008) | 275,847 | 275,917 | ||||
| General partner capital (1,135 units issued and outstanding at March 31, 2009 and December 31, 2008) | 10,986 | 10,988 | ||||
| Total Partners’ Capital | $ | 653,471 | $ | 654,954 | ||
| Total Liabilities and Partners’ Capital | $ | 852,264 | $ | 856,441 | ||
| Western Gas Partners, LP CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
| Quarter Ended March 31, | ||||||||
| 2009 | 2008 | |||||||
| (in thousands) | ||||||||
| Cash Flows from Operating Activities | ||||||||
| Net income | $ | 16,958 | $ | 15,121 | ||||
| Adjustments to reconcile net income to net cash provided | ||||||||
| by operating activities: | ||||||||
| Depreciation and amortization | 8,621 | 7,782 | ||||||
| Deferred income taxes | (555 | ) | 2,103 | |||||
| Changes in assets and liabilities: | ||||||||
| (Increase) decrease in accounts receivable | (5,940 | ) | 1,698 | |||||
| (Increase) in natural gas imbalance receivable | (590 | ) | (327 | ) | ||||
| Increase (decrease) in accounts payable and accrued expenses | (817 | ) | 604 | |||||
| Increase (decrease) in other items, net | (112 | ) | 343 | |||||
| Net cash provided by operating activities | $ | 17,565 | $ | 27,324 | ||||
| Cash Flows from Investing Activities | ||||||||
| Capital expenditures | $ | (6,546 | ) | $ | (6,707 | ) | ||
| Net cash used in investing activities | $ | (6,546 | ) | $ | (6,707 | ) | ||
| Cash Flows from Financing Activities | ||||||||
| Distributions to unitholders | $ | (17,029 | ) | $ | – | |||
| Net distributions to Anadarko | – | (20,617 | ) | |||||
| Net cash used in financing activities | $ | (17,029 | ) | $ | (20,617 | ) | ||
| Net Increase (Decrease) in Cash and Cash Equivalents | (6,010 | ) | – | |||||
| Cash and Cash Equivalents at Beginning of Period | 33,306 | – | ||||||
| Cash and Cash Equivalents at End of Period | $ | 27,296 | $ | – | ||||
| Western Gas Partners, LP OPERATING STATISTICS | |||||||||
| Quarter Ended March 31, | |||||||||
| 2009 | 2008 | ||||||||
|
| (in thousands, except per-unit amounts) | ||||||||
| Throughput volumes (MMcf/d) | |||||||||
| Gathering and transportation | 912 | 956 | |||||||
| Processing | 28 | 28 | |||||||
| Equity investment volumes (MMcf/d) (1) | 123 | 102 | |||||||
| Total throughput | 1,063 | 1,086 | |||||||
| Average gross margin per Mcf (2) | $ | 0.40 | $ | 0.48 | |||||
| (1) | Represents the Partnership’s proportionate share of volumes attributable to its 14.81% interest in Fort Union. | |
| (2) | Calculated as gross margin (total revenues less cost of product) divided by total throughput. |
SOURCE: Western Gas Partners, LP
Western Gas Partners, LP
Chris Campbell, CFA, 832-636-6012
[email protected]
