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Western Gas Partners Announces Third-Quarter 2009 Results
11/11/2009
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HOUSTON--(BUSINESS WIRE)--Nov. 11, 2009-- Western Gas Partners, LP (NYSE: WES) today announced third-quarter 2009 financial and operating results. Net income available to limited partners for the third quarter of 2009 totaled $16.7 million, or $0.30 per limited partner unit (diluted). The Partnership's third-quarter Adjusted EBITDA (1) was $26.4 million and distributable cash flow (1) was$24.2 million, resulting in a coverage ratio of 1.33 times for the period.

Total throughput attributable to Western Gas Partners, LP for the third quarter of 2009 averaged 1,209 MMcf/d, 3 percent below the prior quarter and approximately 8 percent below the third quarter of 2008. These results include the net throughput attributable to Chipeta for all periods of comparison.

Capital expenditures attributable to Western Gas Partners, LP totaled approximately $5.2 millionduring the third quarter of 2009. Of this amount, maintenance capital expenditures were approximately $3.3 million, or 12 percent of Adjusted EBITDA.

"While the positive effects of our recent Chipeta acquisition are apparent in the third quarter results, we are also very pleased by the continued performance of our other assets given the current overall market conditions," said Western Gas Partners' Chairman and Chief Executive Officer Robert Gwin. "The stability of our distributable cash flow, combined with a focus on cost reduction and capital spending discipline, enabled us to raise our distribution again while maintaining a strong coverage ratio. Together with the closing of our recently announced bank facility, this performance indicates our continuing ability to execute our growth strategy and deliver value to our unitholders."

The Partnership previously declared a quarterly distribution of $0.32 per unit for the third quarter of 2009, payable on Nov. 13, 2009 to unitholders of record at the close of business on Oct. 30, 2009, representing a 3.2-percent increase over the prior quarter and an aggregate increase of 6.7 percent over the prior year. The third quarter coverage ratio of 1.33 times is based on the current quarterly distribution of $0.32 per unit.

CONFERENCE CALL TOMORROW AT 9 A.M. CST

The Partnership will host a conference call on Nov. 12, at 9 a.m. Central Standard Time (10 a.m. Eastern Standard Time) to discuss third-quarter results. The dial-in number for the call is 888-713-4214 and the participant code is 95827064. For complete instructions on how to participate in the conference call, or to access the live audio webcast and slide presentation, please visitwww.westerngas.com. A replay of the call will also be available on the Web site for approximately two weeks following the conference call.

1 Please see the tables at the end of this release for a reconciliation of GAAP to non-GAAP measures.

Western Gas Partners, LP is a growth-oriented Delaware limited partnership formed by Anadarko Petroleum Corporation to own, operate, acquire and develop midstream energy assets. With midstream assets in East and West Texas, the Rocky Mountains and the Mid-Continent, the Partnership is engaged in the business of gathering, compressing, processing, treating and transporting natural gas for Anadarko and other producers and customers. For more information about Western Gas Partners, please visit www.westerngas.com.

This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Western Gas Partners believes that its 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 obtain new sources of natural gas supplies; the effect of fluctuations in commodity prices and the demand for natural gas and related products; and construction costs or capital expenditures exceeding estimated or budgeted costs or expenditures, as well as other factors described in the "Risk Factors" section of the Partnership's 2008 Annual Report on Form 10-K filed with the Securities and Exchange Commission and other public filings and press releases by Western Gas Partners. Western Gas Partners undertakes no obligation to publicly update or revise any forward-looking statements.

Reconciliation of GAAP to Non-GAAP Measures

Below are reconciliations of Distributable Cash Flow and Adjusted EBITDA (non-GAAP) to Net Income (GAAP) as required under Regulation G of the Securities Exchange Act of 1934. Management believes that the presentation of Distributable Cash Flow and Adjusted EBITDA provides information useful in assessing the Partnership's financial condition and results of operations and that Distributable Cash Flow and Adjusted EBITDA are widely accepted financial indicators of a company's ability to incur and service debt, fund capital expenditures and make distributions. Distributable Cash Flow and Adjusted EBITDA, as defined by the Partnership, may not be comparable to similarly titled measures used by other companies. Therefore, the Partnership's consolidated Distributable Cash Flow and Adjusted EBITDA should be considered in conjunction with net income and other performance measures, such as operating income or cash flow from operating activities.

Distributable Cash Flow

The Partnership defines Distributable Cash Flow as Adjusted EBITDA, plus interest income, less net cash paid for interest expense, maintenance capital expenditures and income taxes.

 

 

Three Months Ended Sept 30,

 

Nine Months Ended Sept 30,

 

 

2009

 

2008(1)

 

2009(1)

 

2008(1)

 

 

(in thousands)

 

 

 

 

 

 

 

 

 

Reconciliation of net income attributable to Western Gas Partners, LP to Distributable cash flow

 

 

 

 

 

 

 

 

 

Net income attributable to Western Gas Partners, LP

 

$

17,048

 

$

17,949

 

 

$

58,065

 

 

$

51,671

 

Add:

 

 

 

 

 

 

 

 

Distributions from equity investee

 

 

1,555

 

 

1,422

 

 

 

4,125

 

 

 

3,673

 

Non-cash share-based compensation expense

 

 

948

 

 

524

 

 

 

2,736

 

 

 

785

 

Interest expense, net - affiliates (non-cash settled)

 

 

-

 

 

-

 

 

 

-

 

 

 

1,470

 

Income tax expense

 

 

171

 

 

-

 

 

 

-

 

 

 

11,289

 

Depreciation and amortization(2)

 

 

9,586

 

 

9,012

 

 

 

28,101

 

 

 

25,775

 

Impairments

 

 

-

 

 

9,354

 

 

 

-

 

 

 

9,354

 

Less:

 

 

 

 

 

 

 

 

Equity income, net

 

 

1,794

 

 

1,539

 

 

 

5,329

 

 

 

3,840

 

Cash paid for maintenance capital expenditures

 

 

3,288

 

 

4,989

 

 

 

11,911

 

 

 

10,422

 

Interest income, net - affiliates (non-cash settled)

 

 

-

 

 

472

 

 

 

-

 

 

 

-

 

Other income, net(2)

 

 

12

 

 

110

 

 

 

27

 

 

 

142

 

Income tax benefit

 

 

-

 

 

1,463

 

 

 

152

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Distributable cash flow

 

$

24,214

 

$

29,688

 

 

$

75,608

 

 

$

89,613

 

 

(1) Financial information for 2008 and the first six months of 2009 has been revised to include results attributable to the Chipeta assets.

(2) Includes the Partnership's 51% share of depreciation and amortization and other income, net attributable to Chipeta Processing LLC.

Reconciliation of GAAP to Non-GAAP Measures, continued

Adjusted EBITDA

The Partnership defines Adjusted EBITDA as net income (loss) attributable to Western Gas Partners, LP, plus distributions from equity investee, non-cash share-based compensation expense, interest expense, income tax expense and depreciation, amortization and impairment, less income from equity investment, interest income, income tax benefit and other income.

 

 

Three Months Ended
September 30,

 

Nine Months Ended 
September 30,

 

 

2009

 

2008(1)

 

2009(1)

 

2008(1)

 

 

(in thousands)

 

 

 

 

 

 

 

 

 

Reconciliation of net income attributable to Western Gas Partners, LP to Adjusted EBITDA

 

 

 

 

 

 

 

 

 

Net income attributable to Western Gas Partners, LP

 

$

17,048

 

$

17,949

 

 

$

58,065

 

 

$

51,671

 

Add:

 

 

 

 

 

 

 

 

Distributions from equity investee

 

 

1,555

 

 

1,422

 

 

 

4,125

 

 

 

3,673

 

Non-cash share-based compensation expense

 

 

948

 

 

524

 

 

 

2,736

 

 

 

785

 

Interest expense, net - affiliates

 

 

3,127

 

 

36

 

 

 

6,698

 

 

 

1,546

 

Income tax expense

 

 

171

 

 

-

 

 

 

-

 

 

 

11,289

 

Depreciation and amortization(2)

 

 

9,586

 

 

9,012

 

 

 

28,101

 

 

 

25,775

 

Impairment

 

 

-

 

 

9,354

 

 

 

-

 

 

 

9,354

 

 

 

 

 

 

 

 

 

 

Less:

 

 

 

 

 

 

 

 

Equity income, net

 

 

1,794

 

 

1,539

 

 

 

5,329

 

 

 

3,840

 

Interest income - affiliate

 

 

4,225

 

 

4,697

 

 

 

12,675

 

 

 

6,478

 

Other income, net(2)

 

 

12

 

 

110

 

 

 

27

 

 

 

142

 

Income tax benefit

 

 

-

 

 

1,463

 

 

 

152

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

$

26,404

 

$

30,488

 

 

$

81,542

 

 

$

93,633

 

 

(1) Financial information for 2008 and the first six months of 2009 has been revised to include results attributable to the Chipeta assets.

(2) Includes the Partnership's 51% share of depreciation and amortization and other income, net attributable to Chipeta Processing LLC.

Western Gas Partners, LP

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

September 30,

 

September 30,

 

 

2009

 

2008(1)

 

2009(1)

 

2008(1)

 

 

(in thousands except per-unit amounts)

 

 

 

 

 

 

 

 

 

Revenues

 

 

 

 

 

 

 

 

Gathering, processing and transportation of natural gas

 

$

37,952

 

$

35,132

 

 

$

114,299

 

 

$

101,028

 

Natural gas, natural gas liquids and condensate sales

 

 

20,591

 

 

53,428

 

 

 

60,932

 

 

 

164,834

 

Equity income and other

 

 

2,453

 

 

6,022

 

 

 

7,430

 

 

 

13,218

 

Total revenues

 

$

60,996

 

$

94,582

 

 

$

182,661

 

 

$

279,080

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

Cost of product

 

$

12,888

 

$

40,912

 

 

$

37,479

 

 

$

124,204

 

Operation and maintenance

 

 

11,741

 

 

14,001

 

 

 

34,841

 

 

 

39,512

 

General and administrative

 

 

5,980

 

 

4,332

 

 

 

15,067

 

 

 

9,564

 

Property and other taxes

 

 

1,876

 

 

1,630

 

 

 

5,984

 

 

 

5,510

 

Depreciation and amortization

 

 

10,216

 

 

9,380

 

 

 

29,642

 

 

 

26,890

 

Impairment

 

 

-

 

 

9,354

 

 

 

-

 

 

 

9,354

 

Total operating expenses

 

$

42,701

 

$

79,609

 

 

$

123,013

 

 

$

215,034

 

 

 

 

 

 

 

 

 

 

Operating income

 

$

18,295

 

$

14,973

 

 

$

59,648

 

 

$

64,046

 

 

 

 

 

 

 

 

 

 

Interest income, net - affiliates

 

 

1,098

 

 

4,661

 

 

 

5,977

 

 

 

4,932

 

Other income, net

 

 

13

 

 

126

 

 

 

29

 

 

 

159

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

$

19,406

 

$

19,760

 

 

$

65,654

 

 

$

69,137

 

 

 

 

 

 

 

 

 

 

Income tax expense (benefit)

 

 

171

 

 

(1,463

)

 

 

(152

)

 

 

11,289

 

 

 

 

 

 

 

 

 

 

Net income

 

$

19,235

 

$

21,223

 

 

$

65,806

 

 

$

57,848

 

 

 

 

 

 

 

 

 

 

Net income attributable to noncontrolling interests

 

 

2,187

 

 

3,274

 

 

 

7,741

 

 

 

6,177

 

 

 

 

 

 

 

 

 

 

Net income attributable to Western Gas Partners, LP

 

$

17,048

 

$

17,949

 

 

$

58,065

 

 

$

51,671

 

 

 

 

 

 

 

 

 

 

Limited partner interest in net income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

17,048

 

$

17,949

 

 

$

58,065

 

 

$

51,671

 

Less predecessor interest in net income

 

 

-

 

 

553

 

 

 

5,935

 

 

 

26,026

 

Less general partner interest in net income

 

 

341

 

 

348

 

 

 

1,043

 

 

 

513

 

Limited partner interest in net income

 

$

16,707

 

$

17,048

 

 

$

51,087

 

 

$

25,132

 

 

 

 

 

 

 

 

 

 

Net income per common unit - basic and diluted

 

$

0.30

 

$

0.32

 

 

$

0.92

 

 

$

0.48

 

Net income per subordinated unit - basic and diluted

 

$

0.30

 

$

0.32

 

 

$

0.91

 

 

$

0.47

 

 

____________________________

(1) Financial information for 2008 and the first six months of 2009 has been revised to include results attributable to the Chipeta assets.

Western Gas Partners, LP

CONDENSED CONSOLIDATED BALANCE SHEETS

 

 

 

 

 

 

 

September 30,
2009

 

 

December 31, 
2008(1)

(in thousands)

 

 

 

 

 

 

 

 

 

Current assets

 

$

62,335

 

$

47,155

Note receivable - Anadarko

 

 

260,000

 

 

260,000

Net property, plant and equipment

 

 

696,657

 

 

686,353

Other assets

 

 

40,897

 

 

39,647

Total assets

 

$

1,059,889

 

$

1,033,155

 

 

 

 

 

Current liabilities

 

$

21,538

 

$

42,435

Notes payable - Anadarko

 

 

276,451

 

 

175,000

Other long-term liabilities

 

 

11,173

 

 

11,095

Total liabilities

 

$

309,162

 

$

228,530

 

 

 

 

 

Common unit partner capital (29,474 and 29,093 units issued and outstanding at September 30, 2009 and December 31, 2008, respectively)

 

$

377,032

 

$

368,049

Subordinated unit partner capital (26,536 units issued and outstanding at September 30, 2009 and December 31, 2008)

 

 

276,019

 

 

275,917

General partner capital (1,143 and 1,135 units issued and outstanding at September 30, 2009 and December 31, 2008, respectively)

 

 

11,221

 

 

10,988

Parent net investment

 

 

-

 

 

83,655

Noncontrolling interest

 

 

86,455

 

 

66,016

Total liabilities, equity and Partners' capital

 

$

1,059,889

 

$

1,033,155

 

(1) Financial information for 2008 has been revised to include results attributable to the Chipeta assets.

Western Gas Partners, LP

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 

 

 

 

 

Nine Months Ended September 30,

 

2009(1)

 

2008(1)

 

(in thousands)

 

 

 

 

Cash flows from operating activities

 

 

 

Net income

$

65,806

 

 

$

57,848

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

Depreciation, amortization and impairments

 

29,642

 

 

 

36,244

 

Deferred income tax expense (benefit)

 

(336

)

 

 

2,433

 

Change in other items, net

 

(15,461

)

 

 

8,190

 

Net cash provided by operating activities

$

79,651

 

 

$

104,715

 

 

 

 

 

Cash flows from investing activities

 

 

 

Chipeta acquisition

$

(101,451

)

 

$

-

 

Capital expenditures

 

(41,500

)

 

 

(68,930

)

Loan to Anadarko

 

-

 

 

 

(260,000

)

Investment in equity affiliate

 

(264

)

 

 

(8,095

)

Net cash used in investing activities

$

(143,215

)

 

$

(337,025

)

 

 

 

 

Cash flows from financing activities

 

 

 

Proceeds from issuance of common units

$

-

 

 

$

315,161

 

Reimbursement to Parent from offering proceeds

 

-

 

 

 

(45,161

)

Issuance of note payable to Anadarko

 

101,451

 

 

 

-

 

Contributions from noncontrolling interest owners and Parent

 

40,745

 

 

 

148,356

 

Distributions to unitholders

 

(51,777

)

 

 

(8,567

)

Distributions to noncontrolling interest owners and Parent

 

(5,737

)

 

 

(19,734

)

Net pre-acquisition distributions to Anadarko

 

(1,169

)

 

 

(106,355

)

Net cash provided by financing activities

$

83,513

 

 

$

283,700

 

 

 

 

 

Net increase in cash and cash equivalents

$

19,949

 

 

$

51,390

 

Cash and cash equivalents at beginning of period

 

36,074

 

 

 

-

 

Cash and cash equivalents at end of period

$

56,023

 

 

$

51,390

 

 

(1) Financial information for 2008 and the first six months of 2009 has been revised to include results attributable to the Chipeta assets.

Western Gas Partners, LP

OPERATING STATISTICS

 

 

 

 

 

 

 

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

 

 

 

2009

 

 

2008 (1)

 

 

2009(1)

 

 

2008(1)

 

 

 

 

 

 

 

 

 

Throughput (MMcf/d)

 

 

 

 

 

 

 

 

Gathering and transportation

 

 

876

 

 

1,010

 

 

899

 

 

982

Processing

 

 

392

 

 

346

 

 

389

 

 

250

Equity investment(2)

 

 

119

 

 

111

 

 

120

 

 

110

Total throughput

 

 

1,387

 

 

1,467

 

 

1,408

 

 

1,342

 

 

 

 

 

 

 

 

 

Throughput attributable to noncontrolling interests

 

 

178

 

 

155

 

 

176

 

 

109

Total throughput attributable to Western Gas Partners, LP

 

 

1,209

 

 

1,312

 

 

1,232

 

 

1,233

 

 

 

 

 

 

 

 

 

Gross margin per Mcf attributable to Western Gas Partners, LP(3)

 

$

0.40

 

$

0.41

 

$

0.39

 

$

0.43

 

____________________________

(1) Financial information for 2008 and the first six months of 2009 has been revised to include results attributable to the Chipeta assets.

(2) Represents the Partnership's proportionate share of volumes attributable to its 14.81% interest inFort Union.

(3) Average for period. Calculated as gross margin (total revenues less cost of product), excluding the noncontrolling interest owners' proportionate share of Chipeta's revenues and cost of product, divided by total throughput attributable to Western Gas Partners, LP.

Source: Western Gas Partners, LP

Western Gas Partners, LP
Chris Campbell, CFA, 832-636-6012
chris.campbell@westerngas.com

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