HOUSTON, Feb. 14, 2019 /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 2018 financial and operating
results.
WESTERN GAS PARTNERS, LP
Net income (loss) available to limited partners for 2018 totaled
$99.2 million, or $0.55 per common unit (diluted), with full-year
2018 Adjusted EBITDA(1) of $1.2
billion and full-year 2018 Distributable cash
flow(1) of $958.7 million.
Net income (loss) available to limited partners for the fourth
quarter of 2018 totaled $18.7
million, or $0.10 per common
unit (diluted), with fourth-quarter 2018 Adjusted
EBITDA(1) of $347.5
million and fourth-quarter 2018 Distributable cash
flow(1) of $257.3 million.
These results were primarily impacted by lower than anticipated
throughput and margins at our West
Texas complex caused by the combined effect of: (i)
unplanned weather-related and operational downtime in the field,
(ii) operational constraints downstream of the West Texas complex, and (iii) less than
optimal recoveries partially associated with the startup of Mentone
Train I. Additionally, Adjusted EBITDA(1) includes a
non-cash net increase to revenue of $27
million associated with the revenue recognition accounting
standard adopted effective January 1,
2018 for certain cost of service contracts, which will be
recognized as cash over the life of the applicable contracts.
"The Partnership remains acutely focused on closing the
announced simplification transaction and strategic asset
acquisition and delivering on our 2019 growth expectations," said
Chief Executive Officer, Robin
Fielder. "In 2018 we successfully completed the majority of
our Delaware basin gathering
backbone and placed into service the first train at the
Mentone processing facility. With
the premier footprint, scalable capacity, and operational leverage
of our assets in the Delaware and
DJ basins, we remain excited about the future growth and reiterate
our full-year 2019 guidance announced in November."
WES paid a quarterly distribution of $0.980 per unit for the fourth quarter of
2018. This distribution represented a 2% increase over the prior
quarter's distribution and a 7% increase over the fourth-quarter
2017 distribution. The full-year 2018 distribution of $3.830 per unit represented a 7% increase over
the full-year 2017 distribution of $3.590 per unit. The fourth-quarter 2018 Coverage
ratio(1) of 1.10 times was based on the quarterly
distribution of $0.980 per unit. The Partnership's
Coverage ratio(1) for the full-year 2018 was 1.05
times.
Total throughput attributable to WES for natural gas assets for
the fourth quarter of 2018 averaged 3.9 Bcf/d, which was 2% higher
than the prior quarter and 13% higher than the fourth quarter of
2017. Total throughput for crude oil, NGLs and produced water
assets for the fourth quarter of 2018 averaged 434 MBbls/d, which
was 3% higher than the prior quarter and 81% higher than the fourth
quarter of 2017. For full-year 2018, total throughput attributable
to WES for natural gas assets averaged 3.8 Bcf/d, which was 6%
higher than the prior-year average. For full-year 2018, total
throughput for crude oil, NGLs and produced water assets averaged
365 MBbls/d, which was 82% higher than the prior-year average.
Capital expenditures attributable to WES, including equity
investments but excluding acquisitions and capitalized interest,
totaled $303.7 million on a cash
basis during the fourth quarter of 2018, with maintenance capital
expenditures on a cash basis of $29.9
million. For full-year 2018, capital expenditures
attributable to WES, including equity investments but excluding
acquisitions and capitalized interest, totaled $1,304 million on a cash basis, with maintenance
capital expenditures on a cash basis of $91.1 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 2018 totaled $369.4 million, or
$1.69 per common unit (diluted). Net
income (loss) available to limited partners for the fourth quarter
of 2018 totaled $93.4 million, or
$0.43 per common unit (diluted).
WGP previously declared a quarterly distribution of $0.6025 per unit for the fourth quarter of
2018. This distribution represented a 1% increase over the prior
quarter's distribution and a 10% increase over the fourth-quarter
2017 distribution. The full-year 2018 distribution of $2.34875 per unit represented a 12% increase over
the full-year 2017 distribution of $2.1050 per unit. WGP received distributions from
WES of $134.4 million attributable to
the fourth quarter of 2018 and will pay $131.9 million in distributions for the same
period.
|
|
|
(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.
|
SIMPLIFICATION TRANSACTION AND STRATEGIC ACQUISITION
The special meeting of WES unitholders to vote on the WGP and
WES merger transaction will be held on February 27, 2019. WGP and WES expect the merger
and strategic asset acquisition transactions to close during the
first quarter of 2019, subject to certain closing conditions under
the terms of the merger agreement, including receipt of the
required approval by WES's unitholders. Upon closing of the
transactions, and as part of the merger, WGP will change its name
to Western Midstream Partners, LP and its common units will trade
on the New York Stock Exchange under the "WES" ticker symbol.
CONFERENCE CALL TOMORROW AT 11 A.M.
CST
WES and WGP will host a joint conference call on Friday,
February 15, 2019, at 11:00 a.m.
Central Standard Time (12:00 p.m.
Eastern Standard Time) to discuss fourth-quarter and
full-year 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 8494579. 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.
ABOUT WESTERN GAS
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 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.
Important Information for Investors and Unitholders
This news release does not constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of
any vote or approval.
In connection with the proposed merger agreement and the
transactions contemplated thereby (the "Simplification
Transaction"), WGP filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-4,
which includes a prospectus of WGP and a proxy statement of WES.
WES and WGP also plan to file other documents with the Commission
regarding the proposed Simplification Transaction. WES mailed a
definitive proxy statement/prospectus to the unitholders of WES on
January 28, 2019. INVESTORS AND
UNITHOLDERS OF WES ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS
(INCLUDING ALL AMENDMENTS AND SUPPLEMENTS THERETO) AND OTHER
DOCUMENTS RELATING TO THE PROPOSED SIMPLIFICATION TRANSACTION THAT
HAVE BEEN OR WILL BE FILED WITH THE COMMISSION CAREFULLY AND IN
THEIR ENTIRETY AS THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT THE PROPOSED SIMPLIFICATION
TRANSACTION. Investors and unitholders will be able to obtain free
copies of the proxy statement/prospectus and other documents
containing important information about WES and WGP from the
Commission, through the website maintained by the Commission
at http://www.sec.gov. Copies of the documents filed with the
Commission by WES and WGP will be available free of charge on their
internet website at www.westerngas.com or by contacting
their Investor Relations Department at 832-636-6000.
Participants in the Solicitation
WES, WGP, their respective general partners and their respective
general partners' respective directors and certain of their
executive officers may be deemed to be participants in the
solicitation of proxies from the unitholders of WES in connection
with the proposed Simplification Transaction. Information about the
directors and executive officers of WES is set forth in WES's
Annual Report on Form 10-K which was filed with the Commission on
February 16, 2018. Information about
the directors and executive officers of WGP is set forth in WGP's
Annual Report on Form 10-K which was filed with the Commission on
February 16, 2018. Other information
regarding the participants in the proxy solicitation and a
description of their direct and indirect interests, by security
holdings or otherwise, are contained in the proxy
statement/prospectus and other relevant materials to be filed with
the Commission when they become available. Free copies of these
documents can be obtained using the contact information above.
Cautionary Statement Regarding Forward-Looking
Statements
This news release contains forward-looking statements. For
example, statements regarding future financial performance, future
competitive positioning and business synergies, future acquisition
cost savings, future market demand, future benefits to unitholders,
future economic and industry conditions, the proposed
Simplification Transaction (including its benefits, results,
effects and timing) and whether and when the Simplification
Transaction will be consummated, are forward-looking statements
within the meaning of federal securities laws. WES, WGP and their
respective general partners believe 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. Such factors include,
but are not limited to: the failure of the unitholders of WES
to approve the proposed Simplification Transaction; the risk that
the conditions to the closing of the proposed Simplification
Transaction are not satisfied; the risk that regulatory approvals
required for the proposed Simplification Transaction are not
obtained or are obtained subject to conditions that are not
anticipated; potential adverse reactions or changes to business
relationships resulting from the announcement or completion of the
proposed Simplification Transaction; uncertainties as to the timing
of the proposed Simplification Transaction; competitive responses
to the proposed Simplification Transaction; the inability to obtain
or delay in obtaining cost savings and synergies from the proposed
Simplification Transaction; unexpected costs, charges or expenses
resulting from the proposed Simplification Transaction; the outcome
of pending or potential litigation; the inability to retain key
personnel; uncertainty of the expected financial performance of WGP
following completion of the proposed Simplification Transaction;
and any changes in general economic and/or industry specific
conditions.
WES and WGP caution that the foregoing list of factors is not
exclusive. Additional information concerning these and other risk
factors is contained in WES's and WGP's most recently filed Annual
Reports on Form 10-K, subsequent Quarterly Reports on Form 10-Q,
recent Current Reports on Form 8-K, and other Commission filings,
which are available at the Commission's website,
http://www.sec.gov. All subsequent written and oral forward-looking
statements concerning WES, WGP, the proposed Simplification
Transaction or other matters attributable to WES and WGP or any
person acting on their behalf are expressly qualified in their
entirety by the cautionary statements above. Each forward-looking
statement speaks only as of the date of the particular statement.
Except as required by law, WES, WGP and their respective general
partners undertake no obligation to publicly update or revise any
forward-looking statements.
WESTERN GAS CONTACT
Jack
Spinks
Manager, Investor Relations
jack.spinks@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
December 31,
|
|
Year Ended
December 31,
|
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
|
$
|
109,058
|
|
|
$
|
148,637
|
|
|
$
|
445,775
|
|
|
$
|
567,483
|
|
Add:
|
|
|
|
|
|
|
|
Distributions from
equity investments
|
57,982
|
|
|
29,897
|
|
|
169,906
|
|
|
110,465
|
|
Non-cash equity-based
compensation expense
|
1,480
|
|
|
1,468
|
|
|
7,032
|
|
|
4,947
|
|
Non-cash settled
interest expense, net (1)
|
—
|
|
|
—
|
|
|
—
|
|
|
71
|
|
Income tax (benefit)
expense
|
(355)
|
|
|
(39)
|
|
|
2,946
|
|
|
4,866
|
|
Depreciation and
amortization (2)
|
98,637
|
|
|
73,874
|
|
|
334,645
|
|
|
288,087
|
|
Impairments
(2)
|
75,629
|
|
|
8,295
|
|
|
226,950
|
|
|
178,374
|
|
Above-market
component of swap agreements with Anadarko
|
10,896
|
|
|
11,832
|
|
|
51,618
|
|
|
58,551
|
|
Other expense
(2)
|
8,143
|
|
|
5
|
|
|
8,327
|
|
|
145
|
|
Less:
|
|
|
|
|
|
|
|
Recognized Service
revenues – fee based (less than) in excess of customer
billings
|
14,045
|
|
|
—
|
|
|
14,581
|
|
|
—
|
|
Gain (loss) on
divestiture and other, net
|
961
|
|
|
(2,629)
|
|
|
1,312
|
|
|
132,388
|
|
Equity income, net –
affiliates
|
50,272
|
|
|
22,486
|
|
|
153,024
|
|
|
85,194
|
|
Cash paid for
maintenance capital expenditures (2)
|
29,892
|
|
|
16,569
|
|
|
91,054
|
|
|
49,684
|
|
Capitalized
interest
|
6,489
|
|
|
2,835
|
|
|
23,521
|
|
|
6,826
|
|
Cash paid for
(reimbursement of) income taxes
|
2,495
|
|
|
1,005
|
|
|
2,408
|
|
|
1,194
|
|
Series A Preferred
unit distributions
|
—
|
|
|
—
|
|
|
—
|
|
|
7,453
|
|
Other income
(2)
|
—
|
|
|
323
|
|
|
2,592
|
|
|
1,283
|
|
Distributable cash
flow
|
$
|
257,316
|
|
|
$
|
233,380
|
|
|
$
|
958,707
|
|
|
$
|
928,967
|
|
Distributions
declared (3)
|
|
|
|
|
|
|
|
Limited partners –
common units
|
$
|
149,557
|
|
|
|
|
$
|
584,487
|
|
|
|
General
partner
|
85,230
|
|
|
|
|
327,363
|
|
|
|
Total
|
$
|
234,787
|
|
|
|
|
$
|
911,850
|
|
|
|
Coverage
ratio
|
1.10
|
|
x
|
|
|
1.05
|
|
x
|
|
|
|
(1)
|
Includes amounts
related to the Deferred purchase price obligation -
Anadarko.
|
(2)
|
Includes WES's 75%
share of depreciation and amortization; impairments; other expense;
cash paid for maintenance capital expenditures; and other income
attributable to Chipeta.
|
(3)
|
Reflects cash
distributions of $0.980 and $3.830 per unit declared for the three
months and year ended December 31, 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
December 31,
|
|
Year Ended
December 31,
|
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
|
$
|
109,058
|
|
|
$
|
148,637
|
|
|
$
|
445,775
|
|
|
$
|
567,483
|
|
Add:
|
|
|
|
|
|
|
|
Distributions from
equity investments
|
57,982
|
|
|
29,897
|
|
|
169,906
|
|
|
110,465
|
|
Non-cash equity-based
compensation expense
|
1,480
|
|
|
1,468
|
|
|
7,032
|
|
|
4,947
|
|
Interest
expense
|
52,345
|
|
|
35,592
|
|
|
184,008
|
|
|
142,386
|
|
Income tax
expense
|
—
|
|
|
—
|
|
|
3,301
|
|
|
4,905
|
|
Depreciation and
amortization (1)
|
98,637
|
|
|
73,874
|
|
|
334,645
|
|
|
288,087
|
|
Impairments
(1)
|
75,629
|
|
|
8,295
|
|
|
226,950
|
|
|
178,374
|
|
Other expense
(1)
|
8,143
|
|
|
5
|
|
|
8,327
|
|
|
145
|
|
Less:
|
|
|
|
|
|
|
|
Gain (loss) on
divestiture and other, net
|
961
|
|
|
(2,629)
|
|
|
1,312
|
|
|
132,388
|
|
Equity income, net –
affiliates
|
50,272
|
|
|
22,486
|
|
|
153,024
|
|
|
85,194
|
|
Interest income –
affiliates
|
4,225
|
|
|
4,225
|
|
|
16,900
|
|
|
16,900
|
|
Other income
(1)
|
—
|
|
|
323
|
|
|
2,592
|
|
|
1,283
|
|
Income tax
benefit
|
355
|
|
|
39
|
|
|
355
|
|
|
39
|
|
Adjusted EBITDA
attributable to Western Gas Partners, LP
|
$
|
347,461
|
|
|
$
|
273,324
|
|
|
$
|
1,205,761
|
|
|
$
|
1,060,988
|
|
Reconciliation of
Net cash provided by operating activities to Adjusted EBITDA
attributable to Western Gas Partners, LP
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
$
|
268,912
|
|
|
$
|
256,396
|
|
|
$
|
1,020,634
|
|
|
$
|
901,495
|
|
Interest (income)
expense, net
|
48,120
|
|
|
31,367
|
|
|
167,108
|
|
|
125,486
|
|
Uncontributed
cash-based compensation awards
|
(53)
|
|
|
119
|
|
|
879
|
|
|
25
|
|
Accretion and
amortization of long-term obligations, net
|
(1,259)
|
|
|
(1,060)
|
|
|
(5,142)
|
|
|
(4,254)
|
|
Current income tax
(benefit) expense
|
233
|
|
|
1,385
|
|
|
480
|
|
|
2,408
|
|
Other (income)
expense, net (2)
|
(408)
|
|
|
(330)
|
|
|
(3,017)
|
|
|
(1,299)
|
|
Distributions from
equity investments in excess of cumulative earnings –
affiliates
|
7,510
|
|
|
6,830
|
|
|
25,607
|
|
|
23,085
|
|
Changes in assets and
liabilities:
|
|
|
|
|
|
|
|
Accounts receivable,
net
|
(7,877)
|
|
|
(30,845)
|
|
|
56,667
|
|
|
16,127
|
|
Accounts and
imbalance payables and accrued liabilities, net
|
24,632
|
|
|
10,937
|
|
|
(30,722)
|
|
|
6,930
|
|
Other items,
net
|
10,176
|
|
|
1,426
|
|
|
(13,873)
|
|
|
4,491
|
|
Adjusted EBITDA
attributable to noncontrolling interest
|
(2,525)
|
|
|
(2,901)
|
|
|
(12,860)
|
|
|
(13,506)
|
|
Adjusted EBITDA
attributable to Western Gas Partners, LP
|
$
|
347,461
|
|
|
$
|
273,324
|
|
|
$
|
1,205,761
|
|
|
$
|
1,060,988
|
|
Cash flow
information of Western Gas Partners, LP
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
|
|
|
|
$
|
1,020,634
|
|
|
$
|
901,495
|
|
Net cash used in
investing activities
|
|
|
|
|
(1,459,798)
|
|
|
(763,604)
|
|
Net cash provided by
(used in) financing activities
|
|
|
|
|
450,798
|
|
|
(417,002)
|
|
|
|
(1)
|
Includes WES's 75%
share of depreciation and amortization; impairments; other expense;
and other income attributable to Chipeta.
|
(2)
|
Excludes the non-cash
loss on interest-rate swaps of $8.0 million for the three months
and year ended December 31, 2018.
|
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
December 31,
|
|
Year Ended
December 31,
|
thousands
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Reconciliation of
Operating income (loss) to Adjusted gross margin attributable to
Western Gas Partners, LP
|
|
|
|
|
|
|
|
Operating income
(loss)
|
$
|
166,210
|
|
|
$
|
181,815
|
|
|
$
|
629,393
|
|
|
$
|
707,271
|
|
Add:
|
|
|
|
|
|
|
|
Distributions from
equity investments
|
57,982
|
|
|
29,897
|
|
|
169,906
|
|
|
110,465
|
|
Operation and
maintenance
|
114,518
|
|
|
86,550
|
|
|
414,784
|
|
|
315,994
|
|
General and
administrative
|
17,072
|
|
|
12,394
|
|
|
59,706
|
|
|
47,796
|
|
Property and other
taxes
|
7,844
|
|
|
11,385
|
|
|
42,934
|
|
|
46,818
|
|
Depreciation and
amortization
|
99,349
|
|
|
74,602
|
|
|
337,536
|
|
|
290,874
|
|
Impairments
|
75,630
|
|
|
8,295
|
|
|
228,338
|
|
|
178,374
|
|
Less:
|
|
|
|
|
|
|
|
Gain (loss) on
divestiture and other, net
|
961
|
|
|
(2,629)
|
|
|
1,312
|
|
|
132,388
|
|
Proceeds from
business interruption insurance claims
|
—
|
|
|
—
|
|
|
—
|
|
|
29,882
|
|
Equity income, net –
affiliates
|
50,272
|
|
|
22,486
|
|
|
153,024
|
|
|
85,194
|
|
Reimbursed
electricity-related charges recorded as revenues
|
16,441
|
|
|
14,485
|
|
|
66,580
|
|
|
56,823
|
|
Adjusted gross margin
attributable to noncontrolling interest
|
3,525
|
|
|
3,638
|
|
|
15,875
|
|
|
16,827
|
|
Adjusted gross margin
attributable to Western Gas Partners, LP
|
$
|
467,406
|
|
|
$
|
366,958
|
|
|
$
|
1,645,806
|
|
|
$
|
1,376,478
|
|
Adjusted gross margin
attributable to Western Gas Partners, LP for natural gas
assets
|
$
|
379,892
|
|
|
$
|
318,012
|
|
|
$
|
1,398,953
|
|
|
$
|
1,222,632
|
|
Adjusted gross margin
for crude oil, NGLs and produced water assets
|
87,514
|
|
|
48,946
|
|
|
246,853
|
|
|
153,846
|
|
Western Gas
Partners, LP
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(Unaudited)
|
|
|
Three Months
Ended December 31,
|
|
Year
Ended December 31,
|
thousands except
per-unit amounts
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Revenues and
other
|
|
|
|
|
|
|
|
Service revenues –
fee based
|
$
|
463,146
|
|
|
$
|
324,513
|
|
|
$
|
1,609,245
|
|
|
$
|
1,237,949
|
|
Service revenues –
product based
|
18,120
|
|
|
—
|
|
|
85,553
|
|
|
—
|
|
Product
sales
|
76,254
|
|
|
299,443
|
|
|
293,992
|
|
|
989,933
|
|
Other
|
273
|
|
|
8,062
|
|
|
1,486
|
|
|
20,474
|
|
Total revenues and
other
|
557,793
|
|
|
632,018
|
|
|
1,990,276
|
|
|
2,248,356
|
|
Equity income, net
– affiliates
|
50,272
|
|
|
22,486
|
|
|
153,024
|
|
|
85,194
|
|
Operating
expenses
|
|
|
|
|
|
|
|
Cost of
product
|
128,403
|
|
|
276,834
|
|
|
431,921
|
|
|
908,693
|
|
Operation and
maintenance
|
114,518
|
|
|
86,550
|
|
|
414,784
|
|
|
315,994
|
|
General and
administrative
|
17,072
|
|
|
12,394
|
|
|
59,706
|
|
|
47,796
|
|
Property and other
taxes
|
7,844
|
|
|
11,385
|
|
|
42,934
|
|
|
46,818
|
|
Depreciation and
amortization
|
99,349
|
|
|
74,602
|
|
|
337,536
|
|
|
290,874
|
|
Impairments
|
75,630
|
|
|
8,295
|
|
|
228,338
|
|
|
178,374
|
|
Total operating
expenses
|
442,816
|
|
|
470,060
|
|
|
1,515,219
|
|
|
1,788,549
|
|
Gain (loss) on
divestiture and other, net
|
961
|
|
|
(2,629)
|
|
|
1,312
|
|
|
132,388
|
|
Proceeds from
business interruption insurance claims
|
—
|
|
|
—
|
|
|
—
|
|
|
29,882
|
|
Operating income
(loss)
|
166,210
|
|
|
181,815
|
|
|
629,393
|
|
|
707,271
|
|
Interest income –
affiliates
|
4,225
|
|
|
4,225
|
|
|
16,900
|
|
|
16,900
|
|
Interest
expense
|
(52,345)
|
|
|
(35,592)
|
|
|
(184,008)
|
|
|
(142,386)
|
|
Other income
(expense), net
|
(7,564)
|
|
|
330
|
|
|
(4,955)
|
|
|
1,299
|
|
Income (loss)
before income taxes
|
110,526
|
|
|
150,778
|
|
|
457,330
|
|
|
583,084
|
|
Income tax expense
(benefit)
|
(355)
|
|
|
(39)
|
|
|
2,946
|
|
|
4,866
|
|
Net income
(loss)
|
110,881
|
|
|
150,817
|
|
|
454,384
|
|
|
578,218
|
|
Net income
attributable to noncontrolling interest
|
1,823
|
|
|
2,180
|
|
|
8,609
|
|
|
10,735
|
|
Net income (loss)
attributable to Western Gas Partners, LP
|
$
|
109,058
|
|
|
$
|
148,637
|
|
|
$
|
445,775
|
|
|
$
|
567,483
|
|
Limited partners'
interest in net income (loss):
|
|
|
|
|
|
|
|
Net income (loss)
attributable to Western Gas Partners, LP
|
$
|
109,058
|
|
|
$
|
148,637
|
|
|
$
|
445,775
|
|
|
$
|
567,483
|
|
Series A Preferred
units interest in net (income) loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(42,373)
|
|
General partner
interest in net (income) loss
|
(90,372)
|
|
|
(80,932)
|
|
|
(346,538)
|
|
|
(303,835)
|
|
Common and Class C
limited partners' interest in net income (loss)
|
$
|
18,686
|
|
|
$
|
67,705
|
|
|
$
|
99,237
|
|
|
$
|
221,275
|
|
Net income (loss)
per common unit – basic and diluted
|
$
|
0.10
|
|
|
$
|
0.39
|
|
|
$
|
0.55
|
|
|
$
|
1.30
|
|
Weighted-average
common units outstanding – basic and diluted
|
152,609
|
|
|
152,602
|
|
|
152,606
|
|
|
147,194
|
|
Western Gas
Partners, LP
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(Unaudited)
|
|
thousands except
number of units
|
December 31,
2018
|
|
December 31,
2017
|
Current
assets
|
$
|
333,463
|
|
|
$
|
254,062
|
|
Note receivable –
Anadarko
|
260,000
|
|
|
260,000
|
|
Net property, plant
and equipment
|
6,612,073
|
|
|
5,730,891
|
|
Other
assets
|
2,030,746
|
|
|
1,769,397
|
|
Total
assets
|
$
|
9,236,282
|
|
|
$
|
8,014,350
|
|
Current
liabilities
|
$
|
507,582
|
|
|
$
|
424,333
|
|
Long-term
debt
|
4,787,381
|
|
|
3,464,712
|
|
Asset retirement
obligations
|
259,976
|
|
|
143,394
|
|
Other
liabilities
|
149,764
|
|
|
10,900
|
|
Total
liabilities
|
5,704,703
|
|
|
4,043,339
|
|
Equity and
partners' capital
|
|
|
|
Common units
(152,609,285 and 152,602,105 units issued and outstanding at
December 31, 2018 and 2017, respectively)
|
2,475,540
|
|
|
2,950,010
|
|
Class C units
(14,372,665 and 13,243,883 units issued and outstanding at December
31, 2018 and 2017, respectively)
|
791,410
|
|
|
780,040
|
|
General partner units
(2,583,068 units issued and outstanding at December 31, 2018 and
2017)
|
206,862
|
|
|
179,232
|
|
Noncontrolling
interest
|
57,767
|
|
|
61,729
|
|
Total liabilities,
equity and partners' capital
|
$
|
9,236,282
|
|
|
$
|
8,014,350
|
|
Western Gas
Partners, LP
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(Unaudited)
|
|
|
Year Ended
December 31,
|
thousands
|
2018
|
|
2017
|
Cash flows from
operating activities
|
|
|
|
Net income
(loss)
|
$
|
454,384
|
|
|
$
|
578,218
|
|
Adjustments to
reconcile net income (loss) to net cash provided by operating
activities and changes in assets and liabilities:
|
|
|
|
Depreciation and
amortization
|
337,536
|
|
|
290,874
|
|
Impairments
|
228,338
|
|
|
178,374
|
|
(Gain) loss on
divestiture and other, net
|
(1,312)
|
|
|
(132,388)
|
|
Change in other
items, net
|
1,688
|
|
|
(13,583)
|
|
Net cash provided by
operating activities
|
$
|
1,020,634
|
|
|
$
|
901,495
|
|
Cash flows from
investing activities
|
|
|
|
Capital
expenditures
|
$
|
(1,193,896)
|
|
|
$
|
(675,025)
|
|
Contributions in aid
of construction costs from affiliates
|
—
|
|
|
1,387
|
|
Acquisitions from
affiliates
|
(254)
|
|
|
(3,910)
|
|
Acquisitions from
third parties
|
(161,858)
|
|
|
(155,298)
|
|
Investments in equity
affiliates
|
(133,335)
|
|
|
(384)
|
|
Distributions from
equity investments in excess of cumulative earnings –
affiliates
|
25,607
|
|
|
23,085
|
|
Proceeds from the
sale of assets to third parties
|
3,938
|
|
|
23,564
|
|
Proceeds from
property insurance claims
|
—
|
|
|
22,977
|
|
Net cash used in
investing activities
|
$
|
(1,459,798)
|
|
|
$
|
(763,604)
|
|
Cash flows from
financing activities
|
|
|
|
Borrowings, net of
debt issuance costs
|
$
|
2,349,564
|
|
|
$
|
369,989
|
|
Repayments of
debt
|
(1,040,000)
|
|
|
—
|
|
Settlement of the
Deferred purchase price obligation – Anadarko
|
—
|
|
|
(37,346)
|
|
Increase (decrease)
in outstanding checks
|
(3,206)
|
|
|
5,593
|
|
Proceeds from the
issuance of common units, net of offering expenses
|
—
|
|
|
(183)
|
|
Distributions to
unitholders
|
(893,649)
|
|
|
(801,300)
|
|
Distributions to
noncontrolling interest owner
|
(13,529)
|
|
|
(13,569)
|
|
Net contributions
from (distributions to) Anadarko
|
—
|
|
|
1,263
|
|
Above-market
component of swap agreements with Anadarko
|
51,618
|
|
|
58,551
|
|
Net cash provided by
(used in) financing activities
|
$
|
450,798
|
|
|
$
|
(417,002)
|
|
Net increase
(decrease) in cash and cash equivalents
|
$
|
11,634
|
|
|
$
|
(279,111)
|
|
Cash and cash
equivalents at beginning of period
|
78,814
|
|
|
357,925
|
|
Cash and cash
equivalents at end of period
|
$
|
90,448
|
|
|
$
|
78,814
|
|
Western Gas
Partners, LP
|
OPERATING
STATISTICS
|
(Unaudited)
|
|
|
Three Months
Ended
December 31,
|
|
Year Ended
December 31,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Throughput for
natural gas assets (MMcf/d)
|
|
|
|
|
|
|
|
Gathering, treating
and transportation (1)
|
589
|
|
|
747
|
|
|
546
|
|
|
958
|
|
Processing
(1)
|
3,295
|
|
|
2,663
|
|
|
3,205
|
|
|
2,563
|
|
Equity investment
(2)
|
132
|
|
|
158
|
|
|
141
|
|
|
159
|
|
Total throughput for
natural gas assets
|
4,016
|
|
|
3,568
|
|
|
3,892
|
|
|
3,680
|
|
Throughput
attributable to noncontrolling interest for natural gas
assets
|
84
|
|
|
98
|
|
|
90
|
|
|
105
|
|
Total throughput
attributable to Western Gas Partners, LP for natural gas
assets
|
3,932
|
|
|
3,470
|
|
|
3,802
|
|
|
3,575
|
|
Throughput for crude
oil, NGLs and produced water assets (MBbls/d)
|
|
|
|
|
|
|
|
Gathering, treating,
transportation and disposal
|
162
|
|
|
111
|
|
|
146
|
|
|
71
|
|
Equity investment
(3)
|
272
|
|
|
129
|
|
|
219
|
|
|
130
|
|
Total throughput for
crude oil, NGLs and produced water assets
|
434
|
|
|
240
|
|
|
365
|
|
|
201
|
|
Adjusted gross margin
per Mcf attributable to Western Gas Partners, LP for natural gas
assets (4)
|
$
|
1.05
|
|
|
$
|
1.00
|
|
|
$
|
1.01
|
|
|
$
|
0.94
|
|
Adjusted gross margin
per Bbl for crude oil, NGLs and produced water assets
(5)
|
2.19
|
|
|
2.21
|
|
|
1.85
|
|
|
2.10
|
|
|
|
(1)
|
The combination of
the DBM complex and DBJV and Haley systems, effective January 1,
2018, into a single complex now referred to as the "West Texas
complex" resulted in DBJV and Haley systems throughput previously
reported as "Gathering, treating and transportation" now being
reported as "Processing."
|
(2)
|
Represents WES's
14.81% share of average Fort Union throughput and 22% share of
average Rendezvous throughput.
|
(3)
|
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.
|
(4)
|
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.
|
(5)
|
Average for period.
Calculated as Adjusted gross margin for crude oil, NGLs and
produced water assets (total revenues and other for crude oil, NGLs
and produced water assets less reimbursements for
electricity-related expenses recorded as revenue, less cost of
product for crude oil, NGLs 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, NGLs 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, 2018
|
Distributions
declared by Western Gas Partners, LP:
|
|
|
General partner
interest
|
|
$
|
3,908
|
|
Incentive
distribution rights
|
|
81,322
|
|
Common units held by
WGP
|
|
49,129
|
|
Less:
|
|
|
Public company
general and administrative expense
|
|
1,810
|
|
Interest
expense
|
|
339
|
|
Cash available for
distribution
|
|
$
|
132,210
|
|
Declared distribution
per common unit
|
|
$
|
0.60250
|
|
Distributions
declared by Western Gas Equity Partners, LP
|
|
$
|
131,910
|
|
Coverage
ratio
|
|
1.00
|
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
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Revenues and
other
|
|
|
|
|
|
|
|
Service revenues –
fee based
|
$
|
463,146
|
|
|
$
|
324,513
|
|
|
$
|
1,609,245
|
|
|
$
|
1,237,949
|
|
Service revenues –
product based
|
18,120
|
|
|
—
|
|
|
85,553
|
|
|
—
|
|
Product
sales
|
76,254
|
|
|
299,443
|
|
|
293,992
|
|
|
989,933
|
|
Other
|
273
|
|
|
8,062
|
|
|
1,486
|
|
|
20,474
|
|
Total revenues and
other
|
557,793
|
|
|
632,018
|
|
|
1,990,276
|
|
|
2,248,356
|
|
Equity income, net
– affiliates
|
50,272
|
|
|
22,486
|
|
|
153,024
|
|
|
85,194
|
|
Operating
expenses
|
|
|
|
|
|
|
|
Cost of
product
|
128,403
|
|
|
276,834
|
|
|
431,921
|
|
|
908,693
|
|
Operation and
maintenance
|
114,518
|
|
|
86,550
|
|
|
414,784
|
|
|
315,994
|
|
General and
administrative
|
18,882
|
|
|
13,073
|
|
|
63,735
|
|
|
50,668
|
|
Property and other
taxes
|
7,844
|
|
|
11,385
|
|
|
42,934
|
|
|
46,818
|
|
Depreciation and
amortization
|
99,349
|
|
|
74,602
|
|
|
337,536
|
|
|
290,874
|
|
Impairments
|
75,630
|
|
|
8,295
|
|
|
228,338
|
|
|
178,374
|
|
Total operating
expenses
|
444,626
|
|
|
470,739
|
|
|
1,519,248
|
|
|
1,791,421
|
|
Gain (loss) on
divestiture and other, net
|
961
|
|
|
(2,629)
|
|
|
1,312
|
|
|
132,388
|
|
Proceeds from
business interruption insurance claims
|
—
|
|
|
—
|
|
|
—
|
|
|
29,882
|
|
Operating income
(loss)
|
164,400
|
|
|
181,136
|
|
|
625,364
|
|
|
704,399
|
|
Interest income –
affiliates
|
4,225
|
|
|
4,225
|
|
|
16,900
|
|
|
16,900
|
|
Interest
expense
|
(52,684)
|
|
|
(36,168)
|
|
|
(186,043)
|
|
|
(144,615)
|
|
Other income
(expense), net
|
(7,512)
|
|
|
355
|
|
|
(4,763)
|
|
|
1,384
|
|
Income (loss)
before income taxes
|
108,429
|
|
|
149,548
|
|
|
451,458
|
|
|
578,068
|
|
Income tax expense
(benefit)
|
(355)
|
|
|
(39)
|
|
|
2,946
|
|
|
4,866
|
|
Net income
(loss)
|
108,784
|
|
|
149,587
|
|
|
448,512
|
|
|
573,202
|
|
Net income (loss)
attributable to noncontrolling interests
|
15,414
|
|
|
50,066
|
|
|
79,083
|
|
|
196,595
|
|
Net income (loss)
attributable to Western Gas Equity Partners, LP
|
$
|
93,370
|
|
|
$
|
99,521
|
|
|
$
|
369,429
|
|
|
$
|
376,607
|
|
Net income (loss)
per common unit – basic and diluted
|
$
|
0.43
|
|
|
$
|
0.45
|
|
|
$
|
1.69
|
|
|
$
|
1.72
|
|
Weighted-average
common units outstanding – basic and diluted
|
218,938
|
|
|
218,933
|
|
|
218,936
|
|
|
218,931
|
|
Western Gas Equity
Partners, LP
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(Unaudited)
|
|
thousands except
number of units
|
December 31,
2018
|
|
December 31,
2017
|
Current
assets
|
$
|
335,824
|
|
|
$
|
255,210
|
|
Note receivable –
Anadarko
|
260,000
|
|
|
260,000
|
|
Net property, plant
and equipment
|
6,612,073
|
|
|
5,730,891
|
|
Other
assets
|
2,030,746
|
|
|
1,770,210
|
|
Total
assets
|
$
|
9,238,643
|
|
|
$
|
8,016,311
|
|
Current
liabilities
|
$
|
536,857
|
|
|
$
|
424,426
|
|
Long-term
debt
|
4,787,381
|
|
|
3,492,712
|
|
Asset retirement
obligations
|
259,976
|
|
|
143,394
|
|
Other
liabilities
|
149,764
|
|
|
10,900
|
|
Total
liabilities
|
5,733,978
|
|
|
4,071,432
|
|
Equity and
partners' capital
|
|
|
|
Common units
(218,937,797 and 218,933,141 units issued and outstanding at
December 31, 2018 and 2017, respectively)
|
951,888
|
|
|
1,061,125
|
|
Noncontrolling
interests
|
2,552,777
|
|
|
2,883,754
|
|
Total liabilities,
equity and partners' capital
|
$
|
9,238,643
|
|
|
$
|
8,016,311
|
|
Western Gas Equity
Partners, LP
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(Unaudited)
|
|
|
Year Ended
December 31,
|
thousands
|
2018
|
|
2017
|
Cash flows from
operating activities
|
|
|
|
Net income
(loss)
|
$
|
448,512
|
|
|
$
|
573,202
|
|
Adjustments to
reconcile net income (loss) to net cash provided by operating
activities and changes in assets and liabilities:
|
|
|
|
Depreciation and
amortization
|
337,536
|
|
|
290,874
|
|
Impairments
|
228,338
|
|
|
178,374
|
|
(Gain) loss on
divestiture and other, net
|
(1,312)
|
|
|
(132,388)
|
|
Change in other
items, net
|
3,621
|
|
|
(12,650)
|
|
Net cash provided by
operating activities
|
$
|
1,016,695
|
|
|
$
|
897,412
|
|
Cash flows from
investing activities
|
|
|
|
Capital
expenditures
|
$
|
(1,193,896)
|
|
|
$
|
(675,025)
|
|
Contributions in aid
of construction costs from affiliates
|
—
|
|
|
1,387
|
|
Acquisitions from
affiliates
|
(254)
|
|
|
(3,910)
|
|
Acquisitions from
third parties
|
(161,858)
|
|
|
(155,298)
|
|
Investments in equity
affiliates
|
(133,335)
|
|
|
(384)
|
|
Distributions from
equity investments in excess of cumulative earnings –
affiliates
|
25,607
|
|
|
23,085
|
|
Proceeds from the
sale of assets to third parties
|
3,938
|
|
|
23,564
|
|
Proceeds from
property insurance claims
|
—
|
|
|
22,977
|
|
Net cash used in
investing activities
|
$
|
(1,459,798)
|
|
|
$
|
(763,604)
|
|
Cash flows from
financing activities
|
|
|
|
Borrowings, net of
debt issuance costs
|
$
|
2,349,557
|
|
|
$
|
369,989
|
|
Repayments of
debt
|
(1,040,000)
|
|
|
—
|
|
Settlement of the
Deferred purchase price obligation – Anadarko
|
—
|
|
|
(37,346)
|
|
Increase (decrease)
in outstanding checks
|
(3,206)
|
|
|
5,593
|
|
Proceeds from the
issuance of WES common units, net of offering expenses
|
—
|
|
|
(183)
|
|
Distributions to WGP
unitholders
|
(502,457)
|
|
|
(441,967)
|
|
Distributions to
Chipeta noncontrolling interest owner
|
(13,529)
|
|
|
(13,569)
|
|
Distributions to
noncontrolling interest owners of WES
|
(386,326)
|
|
|
(355,623)
|
|
Net contributions
from (distributions to) Anadarko
|
—
|
|
|
1,263
|
|
Above-market
component of swap agreements with Anadarko
|
51,618
|
|
|
58,551
|
|
Net cash provided by
(used in) financing activities
|
$
|
455,657
|
|
|
$
|
(413,292)
|
|
Net increase
(decrease) in cash and cash equivalents
|
$
|
12,554
|
|
|
$
|
(279,484)
|
|
Cash and cash
equivalents at beginning of period
|
79,588
|
|
|
359,072
|
|
Cash and cash
equivalents at end of period
|
$
|
92,142
|
|
|
$
|
79,588
|
|
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SOURCE Western Gas Partners, LP; Western Gas Equity Partners,
LP