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WES Investors

Western Gas Announces Fourth-Quarter And Full-Year 2017 Results

HOUSTON, Feb. 15, 2018 /PRNewswire/ -- Western Gas Partners, LP (NYSE: WES) ("WES" or the "Partnership") and Western Gas Equity Partners, LP (NYSE: WGP) ("WGP") today announced fourth-quarter and full-year 2017 financial and operating results.

WESTERN GAS PARTNERS, LP

Net income (loss) available to limited partners for 2017 totaled $221.3 million, or $1.30 per common unit (diluted), with full-year 2017 Adjusted EBITDA(1) of $1.1 billion and full-year 2017 Distributable cash flow(1) of $929.0 million. Net income (loss) available to limited partners for the fourth quarter of 2017 totaled $67.7 million, or $0.39 per common unit (diluted), with fourth-quarter 2017 Adjusted EBITDA(1) of $273.3 million and fourth-quarter 2017 Distributable cash flow(1) of $233.4 million.

WES paid a quarterly distribution of $0.920 per unit for the fourth quarter of 2017. This distribution represented a 2% increase over the prior quarter's distribution and a 7% increase over the fourth-quarter 2016 distribution of $0.860 per unit. The full-year 2017 distribution of $3.590 per unit represented a 7% increase over the full-year 2016 distribution of $3.350 per unit. The fourth-quarter 2017 Coverage ratio(1) of 1.08 times was based on the quarterly distribution of $0.920 per unit. The Partnership's Coverage ratio(1) for full-year 2017 was 1.13 times.

(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.

"Our impressive quarterly results were driven by strong volumetric growth in both the Delaware and DJ Basins where producer activity remains robust. In the Delaware Basin, we are pleased to report that Ramsey VI came online at the end of the quarter, just as the rest of the Ramsey facility was nearing capacity," said Chief Executive Officer, Benjamin Fink. "We still plan to execute our over $1 billion 2018 capital program without the need for additional equity, as we expect strong volumetric growth in the second half of the year once critical infrastructure is placed into service."

Total throughput attributable to WES for natural gas assets for the fourth quarter of 2017 averaged 3.5 Bcf/d, which was 1% above the prior quarter. Total throughput attributable to WES for natural gas assets for the fourth quarter of 2017 was approximately 3% above the prior quarter when adjusted for the non-cash impact of a one-time prior period volumetric adjustment. Additionally, total throughput attributable to WES for natural gas assets for the fourth quarter of 2017 was 14% below the fourth quarter of 2016 primarily due to the impact of the DBJV-for-Marcellus asset exchange that closed in March 2017. Total throughput for crude, NGL and produced water assets for the fourth quarter of 2017 averaged 240 MBbls/d, which was 15% above the prior quarter and 33% above the fourth quarter of 2016.

For full-year 2017, total throughput attributable to WES for natural gas assets averaged 3.6 Bcf/d, which was 9% below the prior-year average. For full-year 2017, total throughput for crude, NGL and produced water assets averaged 201 MBbls/d, which was 9% above the prior-year average.

Capital expenditures attributable to WES, including equity investments but excluding acquisitions, totaled $253.0 million on a cash basis and $291.6 million on an accrual basis during the fourth quarter of 2017, with maintenance capital expenditures on a cash basis of $16.6 million. For full-year 2017, capital expenditures attributable to WES, including equity investments but excluding acquisitions, totaled $666.9 million on a cash basis and $792.0 million on an accrual basis, with maintenance capital expenditures on a cash basis of $49.7 million.

On February 15, 2018, WES amended its senior unsecured revolving credit facility to extend the maturity date from February 2020 to February 2023 and expand the borrowing capacity from $1.2 billion to $1.5 billion.

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 2017 totaled $376.6 million, or $1.72 per common unit (diluted). Net income (loss) available to limited partners for the fourth quarter of 2017 totaled $99.5 million, or $0.45 per common unit (diluted).

WGP previously declared a quarterly distribution of $0.54875 per unit for the fourth quarter of 2017. This distribution represented a 2% increase over the prior quarter's distribution and a 19% increase over the fourth-quarter 2016 distribution of $0.46250 per unit. The full-year 2017 distribution of $2.10500 per unit represented a 19% increase over the full-year 2016 distribution of $1.76750 per unit. WGP received distributions from WES of $122.3 million attributable to the fourth quarter and will pay $120.1 million in distributions for the same period.

On February 15, 2018, WGP amended its senior secured revolving credit facility by reducing total commitments from $250.0 million to $35.0 million.

CONFERENCE CALL TOMORROW AT 8 A.M. CST

WES and WGP will host a joint conference call on Friday, February 16, 2018, at 8:00 a.m. Central Standard Time (9:00 a.m. Eastern Standard Time) to discuss fourth-quarter and full-year 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 5796412. 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 assets. With midstream assets located in the Rocky Mountains, North-central Pennsylvania, Texas and New Mexico, 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 third-party producers and customers. In addition, in its capacity as a processor of natural gas, WES also buys and sells natural gas, NGLs or condensate under certain of its contracts.

Western Gas Equity Partners, LP ("WGP") is a Delaware master limited partnership formed by Anadarko Petroleum Corporation 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
 December 31,

 

Year Ended
 December 31,

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

 

$

148,637

   

$

143,004

   

$

567,483

   

$

591,331

 

Add:

               

Distributions from equity investments

 

29,897

   

27,160

   

110,465

   

103,423

 

Non-cash equity-based compensation expense

 

1,468

   

1,573

   

4,947

   

5,591

 

Non-cash settled interest expense, net (1)

 

   

4,350

   

71

   

(7,747)

 

Income tax (benefit) expense

 

(39)

   

941

   

4,866

   

8,372

 

Depreciation and amortization (2)

 

73,874

   

72,633

   

288,087

   

270,311

 

Impairments

 

8,295

   

4,222

   

178,374

   

15,535

 

Above-market component of swap agreements with Anadarko

 

11,832

   

11,038

   

58,551

   

45,820

 

Other expense (2)

 

5

   

128

   

145

   

224

 

Less:

               

Gain (loss) on divestiture and other, net

 

(2,629)

   

(5,872)

   

132,388

   

(14,641)

 

Equity income, net – affiliates

 

22,486

   

21,916

   

85,194

   

78,717

 

Cash paid for maintenance capital expenditures (2)

 

16,569

   

8,342

   

49,684

   

63,630

 

Capitalized interest

 

2,835

   

888

   

6,826

   

5,562

 

Cash paid for (reimbursement of) income taxes

 

1,005

   

771

   

1,194

   

838

 

Series A Preferred unit distributions

 

   

14,908

   

7,453

   

45,784

 

Other income (2)

 

323

   

252

   

1,283

   

524

 

Distributable cash flow

 

$

233,380

   

$

223,844

   

$

928,967

   

$

852,446

 

Distributions declared (3)

               

Limited partners – common units

 

$

140,394

       

$

538,244

     

General partner

 

76,192

       

286,624

     

Total

 

$

216,586

       

$

824,868

     

Coverage ratio

 

1.08

 

x

   

1.13

 

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 $0.920 and $3.590 per unit declared for the three months and year ended December 31, 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
 December 31,

 

Year Ended
 December 31,

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

 

$

148,637

   

$

143,004

   

$

567,483

   

$

591,331

 

Add:

               

Distributions from equity investments

 

29,897

   

27,160

   

110,465

   

103,423

 

Non-cash equity-based compensation expense

 

1,468

   

1,573

   

4,947

   

5,591

 

Interest expense

 

35,592

   

39,234

   

142,386

   

114,921

 

Income tax expense

 

   

941

   

4,905

   

8,372

 

Depreciation and amortization (1)

 

73,874

   

72,633

   

288,087

   

270,311

 

Impairments

 

8,295

   

4,222

   

178,374

   

15,535

 

Other expense (1)

 

5

   

128

   

145

   

224

 

Less:

               

Gain (loss) on divestiture and other, net

 

(2,629)

   

(5,872)

   

132,388

   

(14,641)

 

Equity income, net – affiliates

 

22,486

   

21,916

   

85,194

   

78,717

 

Interest income – affiliates

 

4,225

   

4,225

   

16,900

   

16,900

 

Other income (1)

 

323

   

252

   

1,283

   

524

 

Income tax benefit

 

39

   

   

39

   

 

Adjusted EBITDA attributable to Western Gas Partners, LP

 

$

273,324

   

$

268,374

   

$

1,060,988

   

$

1,028,208

 

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

               

Net cash provided by operating activities

 

$

256,396

   

$

259,847

   

$

901,495

   

$

917,585

 

Interest (income) expense, net

 

31,367

   

35,009

   

125,486

   

98,021

 

Uncontributed cash-based compensation awards

 

119

   

408

   

25

   

856

 

Accretion and amortization of long-term obligations, net

 

(1,060)

   

(5,387)

   

(4,254)

   

3,789

 

Current income tax (benefit) expense

 

1,385

   

707

   

2,408

   

5,817

 

Other (income) expense, net

 

(330)

   

(255)

   

(1,299)

   

(479)

 

Distributions from equity investments in excess of cumulative earnings – affiliates

 

6,830

   

4,646

   

23,085

   

21,238

 

Changes in operating working capital:

               

Accounts receivable, net

 

(30,845)

   

7,839

   

16,127

   

48,947

 

Accounts and imbalance payables and accrued liabilities, net

 

10,937

   

(34,256)

   

6,930

   

(58,359)

 

Other

 

1,426

   

2,922

   

4,491

   

4,367

 

Adjusted EBITDA attributable to noncontrolling interest

 

(2,901)

   

(3,106)

   

(13,506)

   

(13,574)

 

Adjusted EBITDA attributable to Western Gas Partners, LP

 

$

273,324

   

$

268,374

   

$

1,060,988

   

$

1,028,208

 

Cash flow information of Western Gas Partners, LP

               

Net cash provided by operating activities

         

$

901,495

   

$

917,585

 

Net cash used in investing activities

         

(763,604)

   

(1,105,534)

 

Net cash provided by (used in) financing activities

         

(417,002)

   

447,841

 
   

(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
 December 31,

 

Year Ended
 December 31,

thousands

 

2017

 

2016

 

2017

 

2016

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

               

Operating income (loss)

 

$

181,815

   

$

181,155

   

$

707,271

   

$

708,208

 

Add:

               

Distributions from equity investments

 

29,897

   

27,160

   

110,465

   

103,423

 

Operation and maintenance

 

86,550

   

81,869

   

315,994

   

308,010

 

General and administrative

 

12,394

   

12,049

   

47,796

   

45,591

 

Property and other taxes

 

11,385

   

7,047

   

46,818

   

40,145

 

Depreciation and amortization

 

74,602

   

73,287

   

290,874

   

272,933

 

Impairments

 

8,295

   

4,222

   

178,374

   

15,535

 

Less:

               

Gain (loss) on divestiture and other, net

 

(2,629)

   

(5,872)

   

132,388

   

(14,641)

 

Proceeds from business interruption insurance claims

 

   

   

29,882

   

16,270

 

Equity income, net – affiliates

 

22,486

   

21,916

   

85,194

   

78,717

 

Reimbursed electricity-related charges recorded as revenues

 

14,485

   

14,026

   

56,823

   

59,733

 

Adjusted gross margin attributable to noncontrolling interest

 

3,638

   

3,735

   

16,827

   

16,323

 

Adjusted gross margin attributable to Western Gas Partners, LP

 

$

366,958

   

$

352,984

   

$

1,376,478

   

$

1,337,443

 

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

 

$

318,012

   

$

317,294

   

$

1,222,632

   

$

1,194,877

 

Adjusted gross margin for crude, NGL and produced water assets

 

48,946

   

35,690

   

153,846

   

142,566

 

 

Western Gas Partners, LP

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 
   

Three Months Ended
 December 31,

 

Year Ended
 December 31,

thousands except per-unit amounts

 

2017

 

2016

 

2017

 

2016

Revenues and other

               

Gathering, processing, transportation and disposal

 

$

324,513

   

$

317,517

   

$

1,237,949

   

$

1,227,849

 

Natural gas and natural gas liquids sales

 

299,443

   

192,728

   

989,933

   

572,313

 

Other

 

8,062

   

575

   

20,474

   

4,108

 

Total revenues and other

 

632,018

   

510,820

   

2,248,356

   

1,804,270

 

Equity income, net – affiliates

 

22,486

   

21,916

   

85,194

   

78,717

 

Operating expenses

               

Cost of product

 

276,834

   

167,235

   

908,693

   

494,194

 

Operation and maintenance

 

86,550

   

81,869

   

315,994

   

308,010

 

General and administrative

 

12,394

   

12,049

   

47,796

   

45,591

 

Property and other taxes

 

11,385

   

7,047

   

46,818

   

40,145

 

Depreciation and amortization

 

74,602

   

73,287

   

290,874

   

272,933

 

Impairments

 

8,295

   

4,222

   

178,374

   

15,535

 

Total operating expenses

 

470,060

   

345,709

   

1,788,549

   

1,176,408

 

Gain (loss) on divestiture and other, net

 

(2,629)

   

(5,872)

   

132,388

   

(14,641)

 

Proceeds from business interruption insurance claims

 

   

   

29,882

   

16,270

 

Operating income (loss)

 

181,815

   

181,155

   

707,271

   

708,208

 

Interest income – affiliates

 

4,225

   

4,225

   

16,900

   

16,900

 

Interest expense

 

(35,592)

   

(39,234)

   

(142,386)

   

(114,921)

 

Other income (expense), net

 

330

   

255

   

1,299

   

479

 

Income (loss) before income taxes

 

150,778

   

146,401

   

583,084

   

610,666

 

Income tax (benefit) expense

 

(39)

   

941

   

4,866

   

8,372

 

Net income (loss)

 

150,817

   

145,460

   

578,218

   

602,294

 

Net income attributable to noncontrolling interest

 

2,180

   

2,456

   

10,735

   

10,963

 

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

 

$

148,637

   

$

143,004

   

$

567,483

   

$

591,331

 

Limited partners' interest in net income (loss):

               

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

 

$

148,637

   

$

143,004

   

$

567,483

   

$

591,331

 

Pre-acquisition net (income) loss allocated to Anadarko

 

   

   

   

(11,326)

 

Series A Preferred units interest in net (income) loss

 

   

(25,904)

   

(42,373)

   

(76,893)

 

General partner interest in net (income) loss

 

(80,932)

   

(62,229)

   

(303,835)

   

(236,561)

 

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

 

$

67,705

   

$

54,871

   

$

221,275

   

$

266,551

 

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

 

$

0.39

   

$

0.35

   

$

1.30

   

$

1.74

 

Weighted-average common units outstanding – basic and diluted

 

152,602

   

130,672

   

147,194

   

130,253

 

 

Western Gas Partners, LP

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

 
   

December 31,

thousands except number of units

 

2017

 

2016

Current assets

 

$

254,062

   

$

594,014

 

Note receivable – Anadarko

 

260,000

   

260,000

 

Net property, plant and equipment

 

5,730,891

   

5,049,932

 

Other assets

 

1,769,397

   

1,829,082

 

Total assets

 

$

8,014,350

   

$

7,733,028

 

Current liabilities

 

$

424,333

   

$

315,305

 

Long-term debt

 

3,464,712

   

3,091,461

 

Asset retirement obligations and other

 

154,294

   

149,043

 

Deferred purchase price obligation – Anadarko

 

   

41,440

 

Total liabilities

 

$

4,043,339

   

$

3,597,249

 

Equity and partners' capital

       

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

 

$

   

$

639,545

 

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

 

2,950,010

   

2,536,872

 

Class C units (13,243,883 and 12,358,123 units issued and outstanding at December 31, 2017 and 2016, respectively)

 

780,040

   

750,831

 

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

 

179,232

   

143,968

 

Noncontrolling interest

 

61,729

   

64,563

 

Total liabilities, equity and partners' capital

 

$

8,014,350

   

$

7,733,028

 

 

Western Gas Partners, LP

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 
   

Year Ended
 December 31,

thousands

 

2017

 

2016

Cash flows from operating activities

       

Net income (loss)

 

$

578,218

   

$

602,294

 

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

       

Depreciation and amortization

 

290,874

   

272,933

 

Impairments

 

178,374

   

15,535

 

(Gain) loss on divestiture and other, net

 

(132,388)

   

14,641

 

Change in other items, net

 

(13,583)

   

12,182

 

Net cash provided by operating activities

 

$

901,495

   

$

917,585

 

Cash flows from investing activities

       

Capital expenditures

 

$

(675,025)

   

$

(479,993)

 

Contributions in aid of construction costs from affiliates

 

1,387

   

6,135

 

Acquisitions from affiliates

 

(3,910)

   

(716,465)

 

Acquisitions from third parties

 

(155,298)

   

 

Investments in equity affiliates

 

(384)

   

(27)

 

Distributions from equity investments in excess of cumulative earnings – affiliates

 

23,085

   

21,238

 

Proceeds from the sale of assets to affiliates

 

   

623

 

Proceeds from the sale of assets to third parties

 

23,564

   

45,490

 

Proceeds from property insurance claims

 

22,977

   

17,465

 

Net cash used in investing activities

 

$

(763,604)

   

$

(1,105,534)

 

Cash flows from financing activities

       

Borrowings, net of debt issuance costs

 

$

369,989

   

$

1,297,218

 

Repayments of debt

 

   

(900,000)

 

Settlement of the Deferred purchase price obligation – Anadarko

 

(37,346)

   

 

Increase (decrease) in outstanding checks

 

5,593

   

2,079

 

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

 

(801,300)

   

(671,938)

 

Distributions to noncontrolling interest owner

 

(13,569)

   

(13,784)

 

Net contributions from (distributions to) Anadarko

 

1,263

   

(23,491)

 

Above-market component of swap agreements with Anadarko

 

58,551

   

45,820

 

Net cash provided by (used in) financing activities

 

$

(417,002)

   

$

447,841

 

Net increase (decrease) in cash and cash equivalents

 

$

(279,111)

   

$

259,892

 

Cash and cash equivalents at beginning of period

 

357,925

   

98,033

 

Cash and cash equivalents at end of period

 

$

78,814

   

$

357,925

 

 

Western Gas Partners, LP

OPERATING STATISTICS

(Unaudited)

 
   

Three Months Ended
 December 31,

 

Year Ended
 December 31,

   

2017

 

2016

 

2017

 

2016

Throughput for natural gas assets (MMcf/d)

               

Gathering, treating and transportation

 

747

   

1,480

   

958

   

1,537

 

Processing

 

2,663

   

2,500

   

2,563

   

2,350

 

Equity investment (1)

 

158

   

173

   

159

   

177

 

  Total throughput for natural gas assets

 

3,568

   

4,153

   

3,680

   

4,064

 

  Throughput attributable to noncontrolling interest for natural gas assets

 

98

   

113

   

105

   

124

 

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

 

3,470

   

4,040

   

3,575

   

3,940

 

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

               

Gathering, treating, transportation and disposal

 

111

   

49

   

71

   

57

 

Equity investment (2)

 

129

   

132

   

130

   

127

 

  Total throughput for crude, NGL and produced water assets

 

240

   

181

   

201

   

184

 

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

 

$

1.00

   

$

0.85

   

$

0.94

   

$

0.83

 

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

 

2.21

   

2.15

   

2.10

   

2.11

 
                                 

(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
 December 31, 2017

Distributions declared by Western Gas Partners, LP:

   

General partner interest

 

$

3,605

 

Incentive distribution rights

 

72,587

 

Common units held by WGP

 

46,121

 

Less:

   

Public company general and administrative expense

 

679

 

Interest expense

 

576

 

Cash available for distribution

 

$

121,058

 

Declared distribution per common unit

 

$

0.54875

 

Distributions declared by Western Gas Equity Partners, LP

 

$

120,140

 

Coverage ratio

 

1.01

x

 

Western Gas Equity Partners, LP

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 
   

Three Months Ended
 December 31,

 

Year Ended
 December 31,

thousands except per-unit amounts

 

2017

 

2016

 

2017

 

2016

Revenues and other

               

Gathering, processing, transportation and disposal

 

$

324,513

   

$

317,517

   

$

1,237,949

   

$

1,227,849

 

Natural gas and natural gas liquids sales

 

299,443

   

192,728

   

989,933

   

572,313

 

Other

 

8,062

   

575

   

20,474

   

4,108

 

Total revenues and other

 

632,018

   

510,820

   

2,248,356

   

1,804,270

 

Equity income, net – affiliates

 

22,486

   

21,916

   

85,194

   

78,717

 

Operating expenses

               

Cost of product

 

276,834

   

167,235

   

908,693

   

494,194

 

Operation and maintenance

 

86,550

   

81,869

   

315,994

   

308,010

 

General and administrative

 

13,073

   

12,734

   

50,668

   

49,248

 

Property and other taxes

 

11,385

   

7,048

   

46,818

   

40,161

 

Depreciation and amortization

 

74,602

   

73,287

   

290,874

   

272,933

 

Impairments

 

8,295

   

4,222

   

178,374

   

15,535

 

Total operating expenses

 

470,739

   

346,395

   

1,791,421

   

1,180,081

 

Gain (loss) on divestiture and other, net

 

(2,629)

   

(5,872)

   

132,388

   

(14,641)

 

Proceeds from business interruption insurance claims

 

   

   

29,882

   

16,270

 

Operating income (loss)

 

181,136

   

180,469

   

704,399

   

704,535

 

Interest income – affiliates

 

4,225

   

4,225

   

16,900

   

16,900

 

Interest expense

 

(36,168)

   

(39,759)

   

(144,615)

   

(116,628)

 

Other income (expense), net

 

355

   

275

   

1,384

   

545

 

Income (loss) before income taxes

 

149,548

   

145,210

   

578,068

   

605,352

 

Income tax (benefit) expense

 

(39)

   

941

   

4,866

   

8,372

 

Net income (loss)

 

149,587

   

144,269

   

573,202

   

596,980

 

Net income (loss) attributable to noncontrolling interests

 

50,066

   

60,573

   

196,595

   

251,208

 

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

 

$

99,521

   

$

83,696

   

$

376,607

   

$

345,772

 

Limited partners' interest in net income (loss):

               

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

 

$

99,521

   

$

83,696

   

$

376,607

   

$

345,772

 

Pre-acquisition net (income) loss allocated to Anadarko

 

   

   

   

(11,326)

 

Limited partners' interest in net income (loss)

 

$

99,521

   

$

83,696

   

$

376,607

   

$

334,446

 

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

 

$

0.45

   

$

0.38

   

$

1.72

   

$

1.53

 

Weighted-average common units outstanding – basic and diluted

 

218,933

   

218,925

   

218,931

   

218,922

 

 

Western Gas Equity Partners, LP

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

 
   

December 31,

thousands except number of units

 

2017

 

2016

Current assets

 

$

255,210

   

$

595,591

 

Note receivable – Anadarko

 

260,000

   

260,000

 

Net property, plant and equipment

 

5,730,891

   

5,049,932

 

Other assets

 

1,770,210

   

1,830,574

 

Total assets

 

$

8,016,311

   

$

7,736,097

 

Current liabilities

 

$

424,426

   

$

315,387

 

Long-term debt

 

3,492,712

   

3,119,461

 

Asset retirement obligations and other

 

154,294

   

149,043

 

Deferred purchase price obligation – Anadarko

 

   

41,440

 

Total liabilities

 

$

4,071,432

   

$

3,625,331

 

Equity and partners' capital

       

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

 

$

1,061,125

   

$

1,048,143

 

Noncontrolling interests

 

2,883,754

   

3,062,623

 

Total liabilities, equity and partners' capital

 

$

8,016,311

   

$

7,736,097

 

 

Western Gas Equity Partners, LP

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 
   

Year Ended
 December 31,

thousands

 

2017

 

2016

Cash flows from operating activities

       

Net income (loss)

 

$

573,202

   

$

596,980

 

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

       

Depreciation and amortization

 

290,874

   

272,933

 

Impairments

 

178,374

   

15,535

 

(Gain) loss on divestiture and other, net

 

(132,388)

   

14,641

 

Change in other items, net

 

(12,650)

   

12,987

 

Net cash provided by operating activities

 

$

897,412

   

$

913,076

 

Cash flows from investing activities

       

Capital expenditures

 

$

(675,025)

   

$

(479,993)

 

Contributions in aid of construction costs from affiliates

 

1,387

   

6,135

 

Acquisitions from affiliates

 

(3,910)

   

(716,465)

 

Acquisitions from third parties

 

(155,298)

   

 

Investments in equity affiliates

 

(384)

   

(27)

 

Distributions from equity investments in excess of cumulative earnings – affiliates

 

23,085

   

21,238

 

Proceeds from the sale of assets to affiliates

 

   

623

 

Proceeds from the sale of assets to third parties

 

23,564

   

45,490

 

Proceeds from property insurance claims

 

22,977

   

17,465

 

Net cash used in investing activities

 

$

(763,604)

   

$

(1,105,534)

 

Cash flows from financing activities

       

Borrowings, net of debt issuance costs

 

$

369,989

   

$

1,323,198

 

Repayments of debt

 

   

(900,000)

 

Settlement of the Deferred purchase price obligation – Anadarko

 

(37,346)

   

 

Increase (decrease) in outstanding checks

 

5,593

   

2,079

 

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

 

(441,967)

   

(374,082)

 

Distributions to Chipeta noncontrolling interest owner

 

(13,569)

   

(13,784)

 

Distributions to noncontrolling interest owners of WES

 

(355,623)

   

(294,841)

 

Net contributions from (distributions to) Anadarko

 

1,263

   

(23,491)

 

Above-market component of swap agreements with Anadarko

 

58,551

   

45,820

 

Net cash provided by (used in) financing activities

 

$

(413,292)

   

$

451,836

 

Net increase (decrease) in cash and cash equivalents

 

$

(279,484)

   

$

259,378

 

Cash and cash equivalents at beginning of period

 

359,072

   

99,694

 

Cash and cash equivalents at end of period

 

$

79,588

   

$

359,072

 

 

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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