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 Six Months Ended
June 30, 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 Six Months Ended
June 30, 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 Six Months Ended
June 30, 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 Six Months Ended
June 30, 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, December 31,
2018 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 2018,
(152,609,285 and
and December
152,602,105 31,
units 2017,
issued respectively)
and
outstanding
at June
30, 2,666,799 2,950,010
Class C
units 2018,
(13,778,265 and
and December
13,243,883 31,
units 2017,
issued respectively)
and
outstanding
at June
30, 781,057 780,040
General
partner and
units December
(2,583,068 31,
units 2017)
issued
and
outstanding
at June
30,
2018, 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 Six Months Ended
June 30, 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 Six Months Ended
June 30, 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, December 31,
2018 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 2018,
(218,937,797 and
and December
218,933,141 31,
units 2017,
issued respectively)
and
outstanding
at June
30, 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
---------------------------- ------- --------
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SOURCE Western Gas Partners, LP; Western Gas Equity Partners, LP
