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WES Investors

Western Gas Announces Third-Quarter 2017 Results
UPDATES 2017 CAPITAL EXPENDITURE OUTLOOK

HOUSTON, Oct. 31, 2017 /PRNewswire/ -- Western Gas Partners, LP (NYSE: WES) ("WES" or the "Partnership") and Western Gas Equity Partners, LP (NYSE: WGP) ("WGP") today announced third-quarter 2017 financial and operating results.

WESTERN GAS PARTNERS, LP

Net income (loss) available to limited partners for the third quarter of 2017 totaled $65.1 million, or $0.38 per common unit (diluted), with third-quarter 2017 Adjusted EBITDA(1) of $257.8 million and third-quarter 2017 Distributable cash flow(1) of $231.9 million.

WES previously declared a quarterly distribution of $0.905 per unit for the third quarter of 2017. This distribution represented a 2% increase over the prior quarter's distribution and a 7% increase over the third-quarter 2016 distribution of $0.845 per unit. The third-quarter 2017 Coverage ratio(1) of 1.09 times was based on the quarterly distribution of $0.905 per unit.

"Our portfolio continues to display strong quarterly performance, driven by accelerated producer activity in the DJ and Delaware Basins, despite the over $3.0 million impact to Adjusted EBITDA associated with extreme weather events," said Chief Executive Officer, Benjamin Fink. "Our Ramsey processing facility is nearing capacity as we prepare to commission Ramsey VI later this quarter, and we remain confident that the growing production in the Delaware and DJ Basins will support the significant processing capacity we are adding at our new Mentone and Latham facilities, both of which are on schedule."

(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.

Total throughput attributable to WES for natural gas assets for the third quarter of 2017 averaged 3.4 Bcf/d, which was 1% below the prior quarter (virtually flat when adjusted for the Helper and Clawson divestitures in June 2017) and 16% below the third quarter of 2016. Total throughput for crude, NGL and produced water assets for the third quarter of 2017 averaged 209 MBbls/d, which was 15% above the prior quarter and 13% above the third quarter of 2016.

Capital expenditures attributable to WES, including equity investments but excluding acquisitions, totaled $156.5 million on a cash basis and $222.3 million on an accrual basis during the third quarter of 2017, with maintenance capital expenditures on a cash basis of $10.6 million. WES is updating its 2017 outlook for capital expenditures to a range of $800 million to $850 million and maintenance capital expenditures to a range of $50 million to $55 million.

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 2017 totaled $96.2 million, or $0.44 per common unit (diluted).

WGP previously declared a quarterly distribution of $0.53750 per unit for the third quarter of 2017. This distribution represented a 2% increase over the prior quarter's distribution and a 20% increase over the third-quarter 2016 distribution of $0.44750 per unit. WGP will receive distributions from WES of $119.3 million attributable to the third quarter and will pay $117.7 million in distributions for the same period.

CONFERENCE CALL TOMORROW AT 11 A.M. CDT

WES and WGP will host a joint conference call on Wednesday, November 1, 2017, at 11:00 a.m. Central Daylight Time (12:00 p.m. Eastern Daylight Time) to discuss third-quarter 2017 results. Individuals who would like to participate should dial 877-883-0383 (Domestic) or 412-902-6506 (International) approximately 15 minutes before the scheduled conference call time, and enter participant access code 4666075. 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, North-central Pennsylvania and Texas, WES is engaged in the business of gathering, compressing, treating, processing and transporting natural gas; gathering, stabilizing and transporting condensate, natural gas liquids and crude oil; and gathering and disposing of produced water 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. WES and WGP's management believes 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 supply of, demand for, and price of oil, natural gas, NGLs and related products or services; 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
jon.vandenbrand@anadarko.com
832.636.6000

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) attributable to Western Gas Partners, LP 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

 

2017

 

2016

 

2017

 

2016

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

 

$

143,506

   

$

167,746

   

$

418,846

   

$

448,327

 

Add:

               

Distributions from equity investments

 

29,145

   

27,133

   

80,568

   

76,263

 

Non-cash equity-based compensation expense

 

1,258

   

1,469

   

3,479

   

4,018

 

Non-cash settled - interest expense, net (1)

 

   

(1,173)

   

71

   

(12,097)

 

Income tax (benefit) expense

 

510

   

472

   

4,905

   

7,431

 

Depreciation and amortization (2)

 

71,812

   

66,589

   

214,213

   

197,678

 

Impairments

 

2,159

   

2,392

   

170,079

   

11,313

 

Above-market component of swap agreements with Anadarko

 

18,049

   

18,417

   

46,719

   

34,782

 

Other expense (2)

 

   

40

   

140

   

96

 

Less:

               

Gain (loss) on divestiture and other, net

 

72

   

(6,230)

   

135,017

   

(8,769)

 

Equity income, net – affiliates

 

21,519

   

20,294

   

62,708

   

56,801

 

Cash paid for maintenance capital expenditures (2)

 

10,591

   

15,306

   

33,115

   

55,288

 

Capitalized interest

 

2,115

   

1,343

   

3,991

   

4,674

 

Cash paid for (reimbursement of) income taxes

 

   

   

189

   

67

 

Series A Preferred unit distributions

 

   

14,907

   

7,453

   

30,876

 

Other income (2)

 

283

   

150

   

960

   

272

 

Distributable cash flow

 

$

231,859

   

$

237,315

   

$

695,587

   

$

628,602

 

Distributions declared (3)

               

Limited partners – common units

 

$

138,105

       

$

397,850

     

General partner

 

73,933

       

210,432

     

Total

 

$

212,038

       

$

608,282

     

Coverage ratio

 

1.09

 

x

   

1.14

x

 
   

(1)      

Includes amounts related to the Deferred purchase price obligation - Anadarko.

(2)      

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

(3)      

Reflects cash distributions of $0.905 and $2.670 per unit declared for the three and nine months ended September 30, 2017, 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 investments, 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

 

2017

 

2016

 

2017

 

2016

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

 

$

143,506

   

$

167,746

   

$

418,846

   

$

448,327

 

Add:

               

Distributions from equity investments

 

29,145

   

27,133

   

80,568

   

76,263

 

Non-cash equity-based compensation expense

 

1,258

   

1,469

   

3,479

   

4,018

 

Interest expense

 

35,544

   

30,768

   

106,794

   

75,687

 

Income tax expense

 

510

   

472

   

4,905

   

7,431

 

Depreciation and amortization (1)

 

71,812

   

66,589

   

214,213

   

197,678

 

Impairments

 

2,159

   

2,392

   

170,079

   

11,313

 

Other expense (1)

 

   

40

   

140

   

96

 

Less:

               

Gain (loss) on divestiture and other, net

 

72

   

(6,230)

   

135,017

   

(8,769)

 

Equity income, net – affiliates

 

21,519

   

20,294

   

62,708

   

56,801

 

Interest income – affiliates

 

4,225

   

4,225

   

12,675

   

12,675

 

Other income (1)

 

283

   

150

   

960

   

272

 

Adjusted EBITDA attributable to Western Gas Partners, LP

 

$

257,835

   

$

278,170

   

$

787,664

   

$

759,834

 

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

               

Net cash provided by operating activities

 

$

211,947

   

$

263,872

   

$

645,099

   

$

657,738

 

Interest (income) expense, net

 

31,319

   

26,543

   

94,119

   

63,012

 

Uncontributed cash-based compensation awards

 

78

   

290

   

(94)

   

448

 

Accretion and amortization of long-term obligations, net

 

(1,055)

   

121

   

(3,194)

   

9,176

 

Current income tax (benefit) expense

 

395

   

131

   

1,023

   

5,110

 

Other (income) expense, net

 

(286)

   

(153)

   

(969)

   

(224)

 

Distributions from equity investments in excess of cumulative earnings – affiliates

 

7,034

   

5,981

   

16,255

   

16,592

 

Changes in operating working capital:

               

Accounts receivable, net

 

56,335

   

7,866

   

46,972

   

41,108

 

Accounts and imbalance payables and accrued liabilities, net

 

(45,982)

   

(26,330)

   

(4,007)

   

(24,103)

 

Other

 

3,181

   

3,184

   

3,065

   

1,445

 

Adjusted EBITDA attributable to noncontrolling interest

 

(5,131)

   

(3,335)

   

(10,605)

   

(10,468)

 

Adjusted EBITDA attributable to Western Gas Partners, LP

 

$

257,835

   

$

278,170

   

$

787,664

   

$

759,834

 

Cash flow information of Western Gas Partners, LP

               

Net cash provided by operating activities

         

$

645,099

   

$

657,738

 

Net cash used in investing activities

         

(514,797)

   

(1,040,692)

 

Net cash provided by (used in) financing activities

         

(335,792)

   

429,368

 
   

(1)

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 investments 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

 

2017

 

2016

 

2017

 

2016

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

               

Operating income (loss)

 

$

179,456

   

$

197,288

   

$

525,456

   

$

527,053

 

Add:

               

Distributions from equity investments

 

29,145

   

27,133

   

80,568

   

76,263

 

Operation and maintenance

 

79,536

   

74,755

   

229,444

   

226,141

 

General and administrative

 

12,158

   

11,382

   

35,402

   

33,542

 

Property and other taxes

 

11,215

   

10,670

   

35,433

   

33,098

 

Depreciation and amortization

 

72,539

   

67,246

   

216,272

   

199,646

 

Impairments

 

2,159

   

2,392

   

170,079

   

11,313

 

Less:

               

Gain (loss) on divestiture and other, net

 

72

   

(6,230)

   

135,017

   

(8,769)

 

Proceeds from business interruption insurance claims

 

   

13,667

   

29,882

   

16,270

 

Equity income, net – affiliates

 

21,519

   

20,294

   

62,708

   

56,801

 

Reimbursed electricity-related charges recorded as revenues

 

14,323

   

15,170

   

42,338

   

45,707

 

Adjusted gross margin attributable to noncontrolling interest

 

5,878

   

3,984

   

13,189

   

12,588

 

Adjusted gross margin attributable to Western Gas Partners, LP

 

$

344,416

   

$

343,981

   

$

1,009,520

   

$

984,459

 

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

 

$

305,337

   

$

306,393

   

$

904,620

   

$

877,583

 

Adjusted gross margin for crude, NGL and produced water assets

 

39,079

   

37,588

   

104,900

   

106,876

 

 

 

 

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

 

2017

 

2016

 

2017

 

2016

Revenues and other

               

Gathering, processing and transportation

 

$

306,187

   

$

315,192

   

$

913,436

   

$

910,332

 

Natural gas and natural gas liquids sales

 

259,141

   

164,036

   

690,490

   

379,585

 

Other

 

9,367

   

2,417

   

12,412

   

3,533

 

Total revenues and other

 

574,695

   

481,645

   

1,616,338

   

1,293,450

 

Equity income, net – affiliates

 

21,519

   

20,294

   

62,708

   

56,801

 

Operating expenses

               

Cost of product

 

239,223

   

145,643

   

631,859

   

326,959

 

Operation and maintenance

 

79,536

   

74,755

   

229,444

   

226,141

 

General and administrative

 

12,158

   

11,382

   

35,402

   

33,542

 

Property and other taxes

 

11,215

   

10,670

   

35,433

   

33,098

 

Depreciation and amortization

 

72,539

   

67,246

   

216,272

   

199,646

 

Impairments

 

2,159

   

2,392

   

170,079

   

11,313

 

Total operating expenses

 

416,830

   

312,088

   

1,318,489

   

830,699

 

Gain (loss) on divestiture and other, net

 

72

   

(6,230)

   

135,017

   

(8,769)

 

Proceeds from business interruption insurance claims

 

   

13,667

   

29,882

   

16,270

 

Operating income (loss)

 

179,456

   

197,288

   

525,456

   

527,053

 

Interest income – affiliates

 

4,225

   

4,225

   

12,675

   

12,675

 

Interest expense

 

(35,544)

   

(30,768)

   

(106,794)

   

(75,687)

 

Other income (expense), net

 

286

   

153

   

969

   

224

 

Income (loss) before income taxes

 

148,423

   

170,898

   

432,306

   

464,265

 

Income tax (benefit) expense

 

510

   

472

   

4,905

   

7,431

 

Net income (loss)

 

147,913

   

170,426

   

427,401

   

456,834

 

Net income attributable to noncontrolling interest

 

4,407

   

2,680

   

8,555

   

8,507

 

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

 

$

143,506

   

$

167,746

   

$

418,846

   

$

448,327

 

Limited partners' interest in net income (loss):

               

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

 

$

143,506

   

$

167,746

   

$

418,846

   

$

448,327

 

Pre-acquisition net (income) loss allocated to Anadarko

 

   

   

   

(11,326)

 

Series A Preferred units interest in net (income) loss

 

   

(25,539)

   

(42,373)

   

(50,989)

 

General partner interest in net (income) loss

 

(78,376)

   

(60,551)

   

(222,903)

   

(174,332)

 

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

 

$

65,130

   

$

81,656

   

$

153,570

   

$

211,680

 

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

 

$

0.38

   

$

0.54

   

$

0.91

   

$

1.39

 

Weighted-average common units outstanding – basic

 

152,602

   

130,672

   

145,371

   

130,112

 

Weighted-average common units outstanding – diluted

 

165,475

   

164,658

   

165,258

   

157,107

 

 

Western Gas Partners, LP

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

thousands except number of units

 

September 30,
 2017

 

December 31,
 2016

Current assets

 

$

358,346

   

$

594,014

 

Note receivable – Anadarko

 

260,000

   

260,000

 

Net property, plant and equipment

 

5,507,714

   

5,049,932

 

Other assets

 

1,788,251

   

1,829,082

 

Total assets

 

$

7,914,311

   

$

7,733,028

 

Current liabilities

 

$

393,364

   

$

315,305

 

Long-term debt

 

3,343,886

   

3,091,461

 

Asset retirement obligations and other

 

156,532

   

149,043

 

Deferred purchase price obligation – Anadarko

 

   

41,440

 

Total liabilities

 

$

3,893,782

   

$

3,597,249

 

Equity and partners' capital

       

Series A Preferred units (zero and 21,922,831 units issued and outstanding at September 30, 2017, and December 31, 2016, respectively)

 

$

   

$

639,545

 

Common units (152,602,105 and 130,671,970 units issued and outstanding at September 30, 2017, and December 31, 2016, respectively)

 

3,012,424

   

2,536,872

 

Class C units (12,977,633 and 12,358,123 units issued and outstanding at September 30, 2017, and December 31, 2016, respectively)

 

771,856

   

750,831

 

General partner units (2,583,068 units issued and outstanding at September 30, 2017, and December 31, 2016)

 

172,180

   

143,968

 

Noncontrolling interest

 

64,069

   

64,563

 

Total liabilities, equity and partners' capital

 

$

7,914,311

   

$

7,733,028

 

 

Western Gas Partners, LP

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

     
   

Nine Months Ended
 September 30,

thousands

 

2017

 

2016

Cash flows from operating activities

       

Net income (loss)

 

$

427,401

   

$

456,834

 

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

       

Depreciation and amortization

 

216,272

   

199,646

 

Impairments

 

170,079

   

11,313

 

(Gain) loss on divestiture and other, net

 

(135,017)

   

8,769

 

Change in other items, net

 

(33,636)

   

(18,824)

 

Net cash provided by operating activities

 

$

645,099

   

$

657,738

 

Cash flows from investing activities

       

Capital expenditures

 

$

(419,193)

   

$

(372,725)

 

Contributions in aid of construction costs from affiliates

 

1,386

   

4,927

 

Acquisitions from affiliates

 

(3,910)

   

(716,465)

 

Acquisitions from third parties

 

(155,298)

   

 

Investments in equity affiliates

 

(384)

   

139

 

Distributions from equity investments in excess of cumulative earnings – affiliates

 

16,255

   

16,592

 

Proceeds from the sale of assets to affiliates

 

   

623

 

Proceeds from the sale of assets to third parties

 

23,370

   

7,819

 

Proceeds from property insurance claims

 

22,977

   

18,398

 

Net cash used in investing activities

 

$

(514,797)

   

$

(1,040,692)

 

Cash flows from financing activities

       

Borrowings, net of debt issuance costs

 

$

249,989

   

$

1,094,600

 

Repayments of debt

 

   

(880,000)

 

Settlement of the Deferred purchase price obligation – Anadarko

 

(37,346)

   

 

Increase (decrease) in outstanding checks

 

3,310

   

(1,070)

 

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

 

(183)

   

25,000

 

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

 

   

686,937

 

Distributions to unitholders

 

(589,262)

   

(490,289)

 

Distributions to noncontrolling interest owner

 

(9,049)

   

(11,257)

 

Net contributions from (distributions to) Anadarko

 

30

   

(29,335)

 

Above-market component of swap agreements with Anadarko

 

46,719

   

34,782

 

Net cash provided by (used in) financing activities

 

$

(335,792)

   

$

429,368

 

Net increase (decrease) in cash and cash equivalents

 

$

(205,490)

   

$

46,414

 

Cash and cash equivalents at beginning of period

 

357,925

   

98,033

 

Cash and cash equivalents at end of period

 

$

152,435

   

$

144,447

 

 

Western Gas Partners, LP

OPERATING STATISTICS

(Unaudited)

         
   

Three Months Ended
 September 30,

 

Nine Months Ended
 September 30,

   

2017

 

2016

 

2017

 

2016

Throughput for natural gas assets (MMcf/d)

               

Gathering, treating and transportation

 

784

   

1,562

   

1,029

   

1,556

 

Processing

 

2,588

   

2,448

   

2,528

   

2,301

 

Equity investment (1)

 

159

   

179

   

160

   

178

 

   Total throughput for natural gas assets

 

3,531

   

4,189

   

3,717

   

4,035

 

   Throughput attributable to noncontrolling interest for natural gas assets

 

104

   

119

   

107

   

127

 

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

 

3,427

   

4,070

   

3,610

   

3,908

 

Throughput for crude, NGL and produced water assets (MBbls/d)

               

Gathering, treating and transportation

 

77

   

58

   

57

   

59

 

Equity investment (2)

 

132

   

127

   

130

   

126

 

   Total throughput for crude, NGL and produced water assets

 

209

   

185

   

187

   

185

 

Adjusted gross margin per Mcf attributable to Western Gas Partners, LP for natural gas assets (3)

 

$

0.97

   

$

0.82

   

$

0.92

   

$

0.82

 

Adjusted gross margin per Bbl for crude, NGL and produced water assets (4)

 

2.03

   

2.20

   

2.05

   

2.10

 
                                 
   

(1)

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

(2)

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.

(3)

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.

(4)

Average for period. Calculated as Adjusted gross margin for crude, NGL and produced water assets (total revenues and other for crude, NGL and produced water assets, less reimbursements for electricity-related expenses recorded as revenue and cost of product for crude, NGL and produced water 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 and produced water 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, 2017

Distributions declared by Western Gas Partners, LP:

   

General partner interest

 

$

3,529

 

Incentive distribution rights

 

70,404

 

Common units held by WGP

 

45,370

 

Less:

   

Public company general and administrative expense

 

764

 

Interest expense

 

573

 

Cash available for distribution

 

$

117,966

 

Declared distribution per common unit

 

$

0.53750

 

Distributions declared by Western Gas Equity Partners, LP

 

$

117,677

 

Coverage ratio

 

1.00

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

 

2017

 

2016

 

2017

 

2016

Revenues and other

               

Gathering, processing and transportation

 

$

306,187

   

$

315,192

   

$

913,436

   

$

910,332

 

Natural gas and natural gas liquids sales

 

259,141

   

164,036

   

690,490

   

379,585

 

Other

 

9,367

   

2,417

   

12,412

   

3,533

 

Total revenues and other

 

574,695

   

481,645

   

1,616,338

   

1,293,450

 

Equity income, net – affiliates

 

21,519

   

20,294

   

62,708

   

56,801

 

Operating expenses

               

Cost of product

 

239,223

   

145,643

   

631,859

   

326,959

 

Operation and maintenance

 

79,536

   

74,755

   

229,444

   

226,141

 

General and administrative

 

12,922

   

12,112

   

37,595

   

36,514

 

Property and other taxes

 

11,215

   

10,670

   

35,433

   

33,113

 

Depreciation and amortization

 

72,539

   

67,246

   

216,272

   

199,646

 

Impairments

 

2,159

   

2,392

   

170,079

   

11,313

 

Total operating expenses

 

417,594

   

312,818

   

1,320,682

   

833,686

 

Gain (loss) on divestiture and other, net

 

72

   

(6,230)

   

135,017

   

(8,769)

 

Proceeds from business interruption insurance claims

 

   

13,667

   

29,882

   

16,270

 

Operating income (loss)

 

178,692

   

196,558

   

523,263

   

524,066

 

Interest income – affiliates

 

4,225

   

4,225

   

12,675

   

12,675

 

Interest expense

 

(36,117)

   

(31,301)

   

(108,447)

   

(76,869)

 

Other income (expense), net

 

311

   

165

   

1,029

   

270

 

Income (loss) before income taxes

 

147,111

   

169,647

   

428,520

   

460,142

 

Income tax (benefit) expense

 

510

   

472

   

4,905

   

7,431

 

Net income (loss)

 

146,601

   

169,175

   

423,615

   

452,711

 

Net income (loss) attributable to noncontrolling interests

 

50,399

   

77,778

   

146,529

   

190,635

 

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

 

$

96,202

   

$

91,397

   

$

277,086

   

$

262,076

 

Limited partners' interest in net income (loss):

               

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

 

$

96,202

   

$

91,397

   

$

277,086

   

$

262,076

 

Pre-acquisition net (income) loss allocated to Anadarko

 

   

   

   

(11,326)

 

Limited partners' interest in net income (loss)

 

$

96,202

   

$

91,397

   

$

277,086

   

$

250,750

 

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

 

$

0.44

   

$

0.42

   

$

1.27

   

$

1.15

 

Weighted-average common units outstanding – basic and diluted

 

218,933

   

218,922

   

218,931

   

218,921

 

 

Western Gas Equity Partners, LP

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

thousands except number of units

 

September 30,
 2017

 

December 31,
 2016

Current assets

 

$

358,970

   

$

595,591

 

Note receivable – Anadarko

 

260,000

   

260,000

 

Net property, plant and equipment

 

5,507,714

   

5,049,932

 

Other assets

 

1,789,235

   

1,830,574

 

Total assets

 

$

7,915,919

   

$

7,736,097

 

Current liabilities

 

$

393,567

   

$

315,387

 

Long-term debt

 

3,371,886

   

3,119,461

 

Asset retirement obligations and other

 

156,532

   

149,043

 

Deferred purchase price obligation – Anadarko

 

   

41,440

 

Total liabilities

 

$

3,921,985

   

$

3,625,331

 

Equity and partners' capital

       

Common units (218,933,141 and 218,928,570 units issued and outstanding at September 30, 2017, and December 31, 2016, respectively)

 

$

1,067,269

   

$

1,048,143

 

Noncontrolling interests

 

2,926,665

   

3,062,623

 

Total liabilities, equity and partners' capital

 

$

7,915,919

   

$

7,736,097

 

 

Western Gas Equity Partners, LP

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 
   

Nine Months Ended
 September 30,

thousands

 

2017

 

2016

Cash flows from operating activities

       

Net income (loss)

 

$

423,615

   

$

452,711

 

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

       

Depreciation and amortization

 

216,272

   

199,646

 

Impairments

 

170,079

   

11,313

 

(Gain) loss on divestiture and other, net

 

(135,017)

   

8,769

 

Change in other items, net

 

(32,480)

   

(17,739)

 

Net cash provided by operating activities

 

$

642,469

   

$

654,700

 

Cash flows from investing activities

       

Capital expenditures

 

$

(419,193)

   

$

(372,725)

 

Contributions in aid of construction costs from affiliates

 

1,386

   

4,927

 

Acquisitions from affiliates

 

(3,910)

   

(716,465)

 

Acquisitions from third parties

 

(155,298)

   

 

Investments in equity affiliates

 

(384)

   

139

 

Distributions from equity investments in excess of cumulative earnings – affiliates

 

16,255

   

16,592

 

Proceeds from the sale of assets to affiliates

 

   

623

 

Proceeds from the sale of assets to third parties

 

23,370

   

7,819

 

Proceeds from property insurance claims

 

22,977

   

18,398

 

Net cash used in investing activities

 

$

(514,797)

   

$

(1,040,692)

 

Cash flows from financing activities

       

Borrowings, net of debt issuance costs

 

$

249,989

   

$

1,120,580

 

Repayments of debt

 

   

(880,000)

 

Settlement of the Deferred purchase price obligation – Anadarko

 

(37,346)

   

 

Increase (decrease) in outstanding checks

 

3,310

   

(1,070)

 

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

 

(183)

   

 

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

 

   

686,937

 

Distributions to WGP unitholders

 

(324,290)

   

(276,114)

 

Distributions to Chipeta noncontrolling interest owner

 

(9,049)

   

(11,257)

 

Distributions to noncontrolling interest owners of WES

 

(262,888)

   

(211,877)

 

Net contributions from (distributions to) Anadarko

 

30

   

(29,335)

 

Above-market component of swap agreements with Anadarko

 

46,719

   

34,782

 

Net cash provided by (used in) financing activities

 

$

(333,708)

   

$

432,646

 

Net increase (decrease) in cash and cash equivalents

 

$

(206,036)

   

$

46,654

 

Cash and cash equivalents at beginning of period

 

359,072

   

99,694

 

Cash and cash equivalents at end of period

 

$

153,036

   

$

146,348

 

 

Western Gas Partners (PRNewsFoto/Western Gas Partners, LP) (PRNewsFoto/Western Gas Partners, LP)

 

Western Gas Equity Partners (PRNewsFoto/Western Gas Partners, LP) (PRNewsFoto/Western Gas Partners, LP)

 

 

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


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