Western Gas InvestorRoom

Western Gas Announces Second-Quarter 2018 Results

HOUSTON, July 31, 2018 /PRNewswire/ -- Western Gas Partners, LP (NYSE: WES) ("WES" or the "Partnership") and Western Gas Equity Partners, LP (NYSE: WGP) ("WGP") today announced second-quarter 2018 financial and operating results.

WESTERN GAS PARTNERS, LP

Net income (loss) available to limited partners for the second quarter of 2018 totaled $(51.5) million, or $(0.32) per common unit (diluted), with second-quarter 2018 Adjusted EBITDA(1) of $271.7 million and second-quarter 2018 Distributable cash flow(1) of $221.8 million. These results were impacted by the following amounts associated with the shutdown of two legacy gathering systems with less than 8 MMcf/d of throughput that had reached the end of their useful life: (i) an accrual of $10.9 million related to estimated future costs recorded as a reduction in affiliate product sales and (ii) $127.2 million recorded as impairment expense associated with reducing the net book value of the systems and additional asset retirement obligation. Adjusted EBITDA(1) includes the impact of the $10.9 million accrual.

WES previously declared a quarterly distribution of $0.950 per unit for the second quarter of 2018. This distribution represented a 2% increase over the prior quarter's distribution and a 7% increase over the second-quarter 2017 distribution. The second-quarter 2018 Coverage ratio(1) of 0.98 times was impacted by 0.05 times due to the aforementioned $10.9 million accrual.

(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.

"Since we initially provided our 2018 guidance last fall, we have been discussing our expectation of a volumetric and cash flow ramp in the second half of this year. I'm pleased to say that it has begun," said Chief Executive Officer, Benjamin Fink. "Anadarko has successfully brought two Regional Oil Treating facilities online, one late in the second quarter and one earlier this month, and the Delaware Basin generated strong volumetric growth in the second quarter, which should accelerate throughout the remainder of the year. Furthermore, we remain on track to bring both the Mentone I and II trains online late in the third and fourth quarters."

Total throughput attributable to WES for natural gas assets for the second quarter of 2018 averaged 3.8 Bcf/d, which was 5% above the prior quarter and 9% above the second quarter of 2017. Total throughput for crude oil, NGL and produced water assets for the second quarter of 2018 averaged 343 MBbls/d, which was 33% above the prior quarter and 88% above the second quarter of 2017. These increases were primarily driven by the continued growth behind our DBM water systems and our acquisition of a 20% interest in Whitethorn (which owns the Midland-to-Sealy pipeline and related storage facilities) in June.

Capital expenditures attributable to WES, including equity investments but excluding acquisitions, totaled $369.2 million on a cash basis and $322.0 million on an accrual basis during the second quarter of 2018, with maintenance capital expenditures on a cash basis of $20.9 million. The Partnership also announced the increase of its outlook for 2018 maintenance capital expenditures to a range of $90 million to $100 million from the previously stated range of $80 million to $90 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 second quarter of 2018 totaled $67.6 million, or $0.31 per common unit (diluted).

WGP previously declared a quarterly distribution of $0.58250 per unit for the second quarter of 2018. This distribution represented a 2% increase over the prior quarter's distribution and a 10% increase over the second-quarter 2017 distribution. WGP will receive distributions from WES of $128.3 million attributable to the second quarter of 2018 and will pay $127.5 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, August 1, 2018, at 11:00 a.m. Central Daylight Time (12:00 p.m. Eastern Daylight Time) to discuss second-quarter 2018 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 7387060. 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 and condensate on behalf of itself and as agent for its customers 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, LP and Western Gas Equity Partners, LP 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 Service revenues – fee based recognized in Adjusted EBITDA (less than) in excess of customer billings, 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
 June 30,

 

Six Months Ended
 June 30,

thousands except Coverage ratio

 

2018

 

2017

 

2018

 

2017

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

 

$

32,708

   

$

173,451

   

$

182,071

   

$

275,340

 

Add:

               

Distributions from equity investments

 

31,947

   

28,856

   

60,901

   

51,423

 

Non-cash equity-based compensation expense

 

1,852

   

975

   

4,004

   

2,221

 

Non-cash settled interest expense, net (1)

 

   

   

   

71

 

Income tax (benefit) expense

 

282

   

843

   

1,784

   

4,395

 

Depreciation and amortization (2)

 

78,066

   

73,352

   

154,182

   

142,401

 

Impairments

 

127,243

   

3,178

   

127,391

   

167,920

 

Above-market component of swap agreements with Anadarko

 

13,839

   

16,373

   

28,121

   

28,670

 

Other expense (2)

 

8

   

95

   

151

   

140

 

Less:

               

Recognized Service revenues – fee based (less than) in excess of customer billings

 

(3,367)

   

   

(3,861)

   

 

Gain (loss) on divestiture and other, net

 

170

   

15,458

   

286

   

134,945

 

Equity income, net – affiliates

 

39,218

   

21,728

   

59,642

   

41,189

 

Cash paid for maintenance capital expenditures (2)

 

20,891

   

11,402

   

37,325

   

22,524

 

Capitalized interest

 

6,011

   

1,060

   

10,065

   

1,876

 

Cash paid for (reimbursement of) income taxes

 

   

   

(87)

   

189

 

Series A Preferred unit distributions

 

   

   

   

7,453

 

Other income (2)

 

1,223

   

250

   

2,000

   

677

 

Distributable cash flow

 

$

221,799

   

$

247,225

   

$

453,235

   

$

463,728

 

Distributions declared (3)

               

Limited partners – common units

 

$

144,979

       

$

287,662

     

General partner

 

80,712

       

159,162

     

Total

 

$

225,691

       

$

446,824

     

Coverage ratio

 

0.98

 

x

   

1.01

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 $0.950 and $1.885 per unit declared for the three and six months ended June 30, 2018, 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
 June 30,

 

Six Months Ended
 June 30,

thousands

 

2018

 

2017

 

2018

 

2017

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

 

$

32,708

   

$

173,451

   

$

182,071

   

$

275,340

 

Add:

               

Distributions from equity investments

 

31,947

   

28,856

   

60,901

   

51,423

 

Non-cash equity-based compensation expense

 

1,852

   

975

   

4,004

   

2,221

 

Interest expense

 

44,389

   

35,746

   

83,672

   

71,250

 

Income tax expense

 

282

   

843

   

1,784

   

4,395

 

Depreciation and amortization (1)

 

78,066

   

73,352

   

154,182

   

142,401

 

Impairments

 

127,243

   

3,178

   

127,391

   

167,920

 

Other expense (1)

 

8

   

95

   

151

   

140

 

Less:

               

Gain (loss) on divestiture and other, net

 

170

   

15,458

   

286

   

134,945

 

Equity income, net – affiliates

 

39,218

   

21,728

   

59,642

   

41,189

 

Interest income – affiliates

 

4,225

   

4,225

   

8,450

   

8,450

 

Other income (1)

 

1,223

   

250

   

2,000

   

677

 

Adjusted EBITDA attributable to Western Gas Partners, LP

 

$

271,659

   

$

274,835

   

$

543,778

   

$

529,829

 

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

               

Net cash provided by operating activities

 

$

273,315

   

$

240,536

   

$

514,911

   

$

433,152

 

Interest (income) expense, net

 

40,164

   

31,521

   

75,222

   

62,800

 

Uncontributed cash-based compensation awards

 

398

   

(209)

   

987

   

(172)

 

Accretion and amortization of long-term obligations, net

 

(1,248)

   

(1,038)

   

(2,626)

   

(2,139)

 

Current income tax (benefit) expense

 

90

   

204

   

261

   

628

 

Other (income) expense, net

 

(1,229)

   

(253)

   

(2,011)

   

(683)

 

Distributions from equity investments in excess of cumulative earnings – affiliates

 

4,492

   

5,768

   

12,505

   

9,221

 

Changes in assets and liabilities:

               

Accounts receivable, net

 

(21,639)

   

(10,876)

   

7,009

   

(9,363)

 

Accounts and imbalance payables and accrued liabilities, net

 

(13,498)

   

12,035

   

(40,573)

   

41,975

 

Other items, net

 

(5,655)

   

(131)

   

(14,670)

   

(116)

 

Adjusted EBITDA attributable to noncontrolling interest

 

(3,531)

   

(2,722)

   

(7,237)

   

(5,474)

 

Adjusted EBITDA attributable to Western Gas Partners, LP

 

$

271,659

   

$

274,835

   

$

543,778

   

$

529,829

 

Cash flow information of Western Gas Partners, LP

               

Net cash provided by operating activities

         

$

514,911

   

$

433,152

 

Net cash used in investing activities

         

(826,653)

   

(363,131)

 

Net cash provided by (used in) financing activities

         

286,163

   

(239,749)

 
   

(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 reimbursements for electricity-related expenses recorded as revenue), less cost of product, plus distributions from equity investments, and excluding the noncontrolling interest owner's proportionate share of revenue and cost of product.

   

Three Months Ended
 June 30,

 

Six Months Ended
 June 30,

thousands

 

2018

 

2017

 

2018

 

2017

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

               

Operating income (loss)

 

$

74,736

   

$

207,608

   

$

262,862

   

$

346,000

 

Add:

               

Distributions from equity investments

 

31,947

   

28,856

   

60,901

   

51,423

 

Operation and maintenance

 

100,628

   

76,148

   

188,907

   

149,908

 

General and administrative

 

14,035

   

10,585

   

28,167

   

23,244

 

Property and other taxes

 

11,754

   

11,924

   

24,136

   

24,218

 

Depreciation and amortization

 

78,792

   

74,031

   

155,634

   

143,733

 

Impairments

 

127,243

   

3,178

   

127,391

   

167,920

 

Less:

               

Gain (loss) on divestiture and other, net

 

170

   

15,458

   

286

   

134,945

 

Proceeds from business interruption insurance claims

 

   

24,115

   

   

29,882

 

Equity income, net – affiliates

 

39,218

   

21,728

   

59,642

   

41,189

 

Reimbursed electricity-related charges recorded as revenues

 

17,231

   

14,046

   

32,684

   

28,015

 

Adjusted gross margin attributable to noncontrolling interest

 

4,223

   

3,435

   

8,547

   

7,311

 

Adjusted gross margin attributable to Western Gas Partners, LP

 

$

378,293

   

$

333,548

   

$

746,839

   

$

665,104

 

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

 

$

329,653

   

$

297,778

   

$

655,525

   

$

599,283

 

Adjusted gross margin for crude oil, NGL and produced water assets

 

48,640

   

35,770

   

91,314

   

65,821

 

 

Western Gas Partners, LP

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 
   

Three Months Ended
 June 30,

 

Six Months Ended
 June 30,

thousands except per-unit amounts

 

2018

 

2017

 

2018

 

2017

Revenues and other

               

Service revenues – fee based

 

$

359,544

   

$

299,435

   

$

697,963

   

$

607,249

 

Service revenues – product based

 

22,105

   

   

44,698

   

 

Product sales

 

54,077

   

224,824

   

130,014

   

431,349

 

Other

 

223

   

1,191

   

442

   

3,045

 

Total revenues and other

 

435,949

   

525,450

   

873,117

   

1,041,643

 

Equity income, net – affiliates

 

39,218

   

21,728

   

59,642

   

41,189

 

Operating expenses

               

Cost of product

 

68,149

   

203,277

   

145,948

   

392,636

 

Operation and maintenance

 

100,628

   

76,148

   

188,907

   

149,908

 

General and administrative

 

14,035

   

10,585

   

28,167

   

23,244

 

Property and other taxes

 

11,754

   

11,924

   

24,136

   

24,218

 

Depreciation and amortization

 

78,792

   

74,031

   

155,634

   

143,733

 

Impairments

 

127,243

   

3,178

   

127,391

   

167,920

 

Total operating expenses

 

400,601

   

379,143

   

670,183

   

901,659

 

Gain (loss) on divestiture and other, net

 

170

   

15,458

   

286

   

134,945

 

Proceeds from business interruption insurance claims

 

   

24,115

   

   

29,882

 

Operating income (loss)

 

74,736

   

207,608

   

262,862

   

346,000

 

Interest income – affiliates

 

4,225

   

4,225

   

8,450

   

8,450

 

Interest expense

 

(44,389)

   

(35,746)

   

(83,672)

   

(71,250)

 

Other income (expense), net

 

1,229

   

253

   

2,011

   

683

 

Income (loss) before income taxes

 

35,801

   

176,340

   

189,651

   

283,883

 

Income tax (benefit) expense

 

282

   

843

   

1,784

   

4,395

 

Net income (loss)

 

35,519

   

175,497

   

187,867

   

279,488

 

Net income attributable to noncontrolling interest

 

2,811

   

2,046

   

5,796

   

4,148

 

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

 

$

32,708

   

$

173,451

   

$

182,071

   

$

275,340

 

Limited partners' interest in net income (loss):

               

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

 

$

32,708

   

$

173,451

   

$

182,071

   

$

275,340

 

Series A Preferred units interest in net (income) loss

 

   

(14,199)

   

   

(42,373)

 

General partner interest in net (income) loss

 

(84,176)

   

(76,365)

   

(167,615)

   

(144,527)

 

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

 

$

(51,468)

   

$

82,887

   

$

14,456

   

$

88,440

 

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

 

$

(0.32)

   

$

0.49

   

$

0.06

   

$

0.53

 

Weighted-average common units outstanding – basic and diluted

 

152,604

   

148,864

   

152,603

   

141,696

 

 

Western Gas Partners, LP

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

thousands except number of units

 

June 30,
 2018

 

December 31,
 2017

Current assets

 

$

247,138

   

$

254,062

 

Note receivable – Anadarko

 

260,000

   

260,000

 

Net property, plant and equipment

 

6,213,574

   

5,730,891

 

Other assets

 

1,945,898

   

1,769,397

 

Total assets

 

$

8,666,610

   

$

8,014,350

 

Current liabilities

 

$

489,117

   

$

424,333

 

Long-term debt

 

4,177,353

   

3,464,712

 

Asset retirement obligations

 

151,412

   

143,394

 

Other liabilities

 

147,246

   

10,900

 

Total liabilities

 

4,965,128

   

4,043,339

 

Equity and partners' capital

       

Common units (152,609,285 and 152,602,105 units issued and outstanding at June 30, 2018, and December 31, 2017, respectively)

 

2,666,799

   

2,950,010

 

Class C units (13,778,265 and 13,243,883 units issued and outstanding at June 30, 2018, and December 31, 2017, respectively)

 

781,057

   

780,040

 

General partner units (2,583,068 units issued and outstanding at June 30, 2018, and December 31, 2017)

 

191,564

   

179,232

 

Noncontrolling interest

 

62,062

   

61,729

 

Total liabilities, equity and partners' capital

 

$

8,666,610

   

$

8,014,350

 

 

Western Gas Partners, LP

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

   

Six Months Ended
 June 30,

thousands

 

2018

 

2017

Cash flows from operating activities

       

Net income (loss)

 

$

187,867

   

$

279,488

 

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

       

Depreciation and amortization

 

155,634

   

143,733

 

Impairments

 

127,391

   

167,920

 

(Gain) loss on divestiture and other, net

 

(286)

   

(134,945)

 

Change in other items, net

 

44,305

   

(23,044)

 

Net cash provided by operating activities

 

$

514,911

   

$

433,152

 

Cash flows from investing activities

       

Capital expenditures

 

$

(650,096)

   

$

(260,480)

 

Contributions in aid of construction costs from affiliates

 

   

1,343

 

Acquisitions from affiliates

 

   

(3,910)

 

Acquisitions from third parties

 

(161,858)

   

(155,287)

 

Investments in equity affiliates

 

(27,490)

   

(287)

 

Distributions from equity investments in excess of cumulative earnings – affiliates

 

12,505

   

9,221

 

Proceeds from the sale of assets to third parties

 

286

   

23,292

 

Proceeds from property insurance claims

 

   

22,977

 

Net cash used in investing activities

 

$

(826,653)

   

$

(363,131)

 

Cash flows from financing activities

       

Borrowings, net of debt issuance costs

 

$

1,337,539

   

$

159,989

 

Repayments of debt

 

(630,000)

   

 

Settlement of the Deferred purchase price obligation – Anadarko

 

   

(37,346)

 

Increase (decrease) in outstanding checks

 

(5,357)

   

(2,763)

 

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

 

   

(183)

 

Distributions to unitholders

 

(437,719)

   

(381,771)

 

Distributions to noncontrolling interest owner

 

(6,421)

   

(6,375)

 

Net contributions from (distributions to) Anadarko

 

   

30

 

Above-market component of swap agreements with Anadarko

 

28,121

   

28,670

 

Net cash provided by (used in) financing activities

 

$

286,163

   

$

(239,749)

 

Net increase (decrease) in cash and cash equivalents

 

$

(25,579)

   

$

(169,728)

 

Cash and cash equivalents at beginning of period

 

78,814

   

357,925

 

Cash and cash equivalents at end of period

 

$

53,235

   

$

188,197

 

 

Western Gas Partners, LP

OPERATING STATISTICS

(Unaudited)

 
   

Three Months Ended
 June 30,

 

Six Months Ended
 June 30,

   

2018

 

2017

 

2018

 

2017

Throughput for natural gas assets (MMcf/d)

               

Gathering, treating and transportation

 

887

   

866

   

852

   

1,155

 

Processing

 

2,860

   

2,555

   

2,808

   

2,498

 

Equity investment (1)

 

141

   

158

   

146

   

160

 

 Total throughput for natural gas assets

 

3,888

   

3,579

   

3,806

   

3,813

 

 Throughput attributable to noncontrolling interest for natural gas assets

 

94

   

107

   

95

   

108

 

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

 

3,794

   

3,472

   

3,711

   

3,705

 

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

               

 Gathering, treating, transportation and disposal

 

145

   

50

   

134

   

47

 

 Equity investment (2)

 

198

   

132

   

167

   

129

 

Total throughput for crude oil, NGL and produced water assets

 

343

 

182

 

301

 

176

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

 

$

0.95

   

$

0.94

   

$

0.98

   

$

0.89

 

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

 

1.56

   

2.15

   

1.68

   

2.07

 
                                 

(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, WES's 33.33% share of average FRP throughput and WES's 20% share of average Whitethorn 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, less 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 oil, NGL and produced water assets (total revenues and other for crude oil, NGL and produced water assets less reimbursements for electricity-related expenses recorded as revenue, less cost of product for crude oil, NGL and produced water assets, and plus distributions from WES's equity investments in White Cliffs, the Mont Belvieu JV, TEG, TEP, FRP and Whitethorn), divided by total throughput (MBbls/d) for crude oil, 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
 June 30, 2018

Distributions declared by Western Gas Partners, LP:

   

General partner interest

 

$

3,756

 

Incentive distribution rights

 

76,956

 

Common units held by WGP

 

47,625

 

Less:

   

Public company general and administrative expense

 

696

 

Interest expense

 

309

 

Cash available for distribution

 

$

127,332

 

Declared distribution per common unit

 

$

0.58250

 

Distributions declared by Western Gas Equity Partners, LP

 

$

127,531

 

Coverage ratio

 

1.00

x

 

Western Gas Equity Partners, LP

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 
   

Three Months Ended
 June 30,

 

Six Months Ended
 June 30,

thousands except per-unit amounts

 

2018

 

2017

 

2018

 

2017

Revenues and other

               

Service revenues – fee based

 

$

359,544

   

$

299,435

   

$

697,963

   

$

607,249

 

Service revenues – product based

 

22,105

   

   

44,698

   

 

Product sales

 

54,077

   

224,824

   

130,014

   

431,349

 

Other

 

223

   

1,191

   

442

   

3,045

 

Total revenues and other

 

435,949

   

525,450

   

873,117

   

1,041,643

 

Equity income, net – affiliates

 

39,218

   

21,728

   

59,642

   

41,189

 

Operating expenses

               

Cost of product

 

68,149

   

203,277

   

145,948

   

392,636

 

Operation and maintenance

 

100,628

   

76,148

   

188,907

   

149,908

 

General and administrative

 

14,731

   

11,197

   

29,695

   

24,673

 

Property and other taxes

 

11,754

   

11,924

   

24,136

   

24,218

 

Depreciation and amortization

 

78,792

   

74,031

   

155,634

   

143,733

 

Impairments

 

127,243

   

3,178

   

127,391

   

167,920

 

Total operating expenses

 

401,297

   

379,755

   

671,711

   

903,088

 

Gain (loss) on divestiture and other, net

 

170

   

15,458

   

286

   

134,945

 

Proceeds from business interruption insurance claims

 

   

24,115

   

   

29,882

 

Operating income (loss)

 

74,040

   

206,996

   

261,334

   

344,571

 

Interest income – affiliates

 

4,225

   

4,225

   

8,450

   

8,450

 

Interest expense

 

(44,697)

   

(36,297)

   

(85,043)

   

(72,330)

 

Other income (expense), net

 

1,277

   

272

   

2,094

   

718

 

Income (loss) before income taxes

 

34,845

   

175,196

   

186,835

   

281,409

 

Income tax (benefit) expense

 

282

   

843

   

1,784

   

4,395

 

Net income (loss)

 

34,563

   

174,353

   

185,051

   

277,014

 

Net income (loss) attributable to noncontrolling interests

 

(33,017)

   

69,409

   

16,466

   

96,130

 

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

 

$

67,580

   

$

104,944

   

$

168,585

   

$

180,884

 

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

 

$

0.31

   

$

0.48

   

$

0.77

   

$

0.83

 

Weighted-average common units outstanding – basic and diluted

 

218,934

   

218,931

   

218,934

   

218,930

 

 

Western Gas Equity Partners, LP

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

thousands except number of units

 

June 30,
 2018

 

December 31,
 2017

Current assets

 

$

249,357

   

$

255,210

 

Note receivable – Anadarko

 

260,000

   

260,000

 

Net property, plant and equipment

 

6,213,574

   

5,730,891

 

Other assets

 

1,945,898

   

1,770,210

 

Total assets

 

$

8,668,829

   

$

8,016,311

 

Current liabilities

 

$

517,163

   

$

424,426

 

Long-term debt

 

4,177,353

   

3,492,712

 

Asset retirement obligations

 

151,412

   

143,394

 

Other liabilities

 

147,246

   

10,900

 

Total liabilities

 

4,993,174

   

4,071,432

 

Equity and partners' capital

       

Common units (218,937,797 and 218,933,141 units issued and outstanding at June 30, 2018, and December 31, 2017, respectively)

 

994,418

   

1,061,125

 

Noncontrolling interests

 

2,681,237

   

2,883,754

 

Total liabilities, equity and partners' capital

 

$

8,668,829

   

$

8,016,311

 

 

Western Gas Equity Partners, LP

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 
   

Six Months Ended
 June 30,

thousands

 

2018

 

2017

Cash flows from operating activities

       

Net income (loss)

 

$

185,051

   

$

277,014

 

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

       

Depreciation and amortization

 

155,634

   

143,733

 

Impairments

 

127,391

   

167,920

 

(Gain) loss on divestiture and other, net

 

(286)

   

(134,945)

 

Change in other items, net

 

45,457

   

(22,364)

 

Net cash provided by operating activities

 

$

513,247

   

$

431,358

 

Cash flows from investing activities

       

Capital expenditures

 

$

(650,096)

   

$

(260,480)

 

Contributions in aid of construction costs from affiliates

 

   

1,343

 

Acquisitions from affiliates

 

   

(3,910)

 

Acquisitions from third parties

 

(161,858)

   

(155,287)

 

Investments in equity affiliates

 

(27,490)

   

(287)

 

Distributions from equity investments in excess of cumulative earnings – affiliates

 

12,505

   

9,221

 

Proceeds from the sale of assets to third parties

 

286

   

23,292

 

Proceeds from property insurance claims

 

   

22,977

 

Net cash used in investing activities

 

$

(826,653)

   

$

(363,131)

 

Cash flows from financing activities

       

Borrowings, net of debt issuance costs

 

$

1,337,531

   

$

159,989

 

Repayments of debt

 

(630,000)

   

 

Settlement of the Deferred purchase price obligation – Anadarko

 

   

(37,346)

 

Increase (decrease) in outstanding checks

 

(5,357)

   

(2,763)

 

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

 

   

(183)

 

Distributions to WGP unitholders

 

(244,658)

   

(208,803)

 

Distributions to Chipeta noncontrolling interest owner

 

(6,421)

   

(6,375)

 

Distributions to noncontrolling interest owners of WES

 

(190,081)

   

(171,689)

 

Net contributions from (distributions to) Anadarko

 

   

30

 

Above-market component of swap agreements with Anadarko

 

28,121

   

28,670

 

Net cash provided by (used in) financing activities

 

$

289,135

   

$

(238,470)

 

Net increase (decrease) in cash and cash equivalents

 

$

(24,271)

   

$

(170,243)

 

Cash and cash equivalents at beginning of period

 

79,588

   

359,072

 

Cash and cash equivalents at end of period

 

$

55,317

   

$

188,829

 

 

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


http://investors.westerngaspartners.com/2018-07-31-Western-Gas-Announces-Second-Quarter-2018-Results