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Western Gas Announces Fourth-Quarter And Full-Year 2016 Results
02/22/2017

HOUSTON, Feb. 22, 2017 /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 2016 financial and operating results.

WESTERN GAS PARTNERS, LP

Net income (loss) available to limited partners for 2016 totaled $266.6 million, or $1.74 per common unit (diluted), with full-year 2016 Adjusted EBITDA(1) of $1.03 billion and full-year 2016 Distributable cash flow(1) of $852.4 million.

Net income (loss) available to limited partners for the fourth quarter of 2016 totaled $54.9 million, or $0.35 per common unit (diluted), with fourth-quarter 2016 Adjusted EBITDA(1) of $268.4 million and fourth-quarter 2016 Distributable cash flow(1) of $223.8 million.

WES paid a quarterly distribution of $0.860 per unit for the fourth quarter of 2016. This distribution represented a 2% increase over the prior quarter's distribution and an 8% increase over the fourth-quarter 2015 distribution of $0.800 per unit. The full-year 2016 distribution of $3.350 per unit represented a 10% increase over the full-year 2015 distribution of $3.050 per unit. The fourth-quarter 2016 Coverage ratio(1) of 1.31 times was based on the quarterly distribution of $0.860 per unit. The Partnership's Coverage ratio(1) for full-year 2016 was 1.29 times.

(1) Please see the tables at the end of this release for a reconciliation of GAAP to non-GAAP measures and calculation of the Coverage ratio.

"The Partnership delivered yet another outstanding financial quarter highlighted by the resiliency of our portfolio and the strength of our organic growth opportunities. Volumes and producer activity continue to accelerate at our Ramsey plant in the Delaware Basin, where Train V is now online and Train II has returned to service," said Chief Executive Officer, Benjamin Fink. "Additionally, Ramsey Train VI remains on schedule to begin service in the fourth quarter of 2017."

Total throughput attributable to WES for natural gas assets for the fourth quarter of 2016 averaged 4.0 Bcf/d, which was 1% below the prior quarter and 3% above the fourth quarter of 2015. For full-year 2016, total throughput attributable to WES for natural gas assets averaged 3.9 Bcf/d, which was 5% below the prior-year average. Total throughput for crude/NGL assets for the fourth quarter of 2016 averaged 181 MBbls/d, which was 2% below the prior quarter and 3% below the fourth quarter of 2015. For full-year 2016, total throughput for crude/NGL assets averaged 184 MBbls/d, which was 1% below the prior-year average.

Capital expenditures attributable to WES, including equity investments but excluding acquisitions, totaled $105.3 million on a cash basis and $135.0 million on an accrual basis during the fourth quarter of 2016, with maintenance capital expenditures on a cash basis of $8.3 million, or 3% of Adjusted EBITDA(1). For full-year 2016, capital expenditures attributable to WES, including equity investments but excluding acquisitions, totaled $468.3 million on a cash basis and $485.8 million on an accrual basis, with maintenance capital expenditures on a cash basis of $63.6 million, or 6% of Adjusted EBITDA(1).

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 2016 totaled $334.4 million, or $1.53 per common unit (diluted). Net income (loss) available to limited partners for the fourth quarter of 2016 totaled $83.7 million, or $0.38 per common unit (diluted).

(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.

WGP paid a quarterly distribution of $0.46250 per unit for the fourth quarter of 2016. This distribution represented a 3% increase over the prior quarter's distribution and a 15% increase over the fourth-quarter 2015 distribution of $0.40375 per unit. The full-year 2016 distribution of $1.76750 per unit represented a 19% increase over the full-year 2015 distribution of $1.49125 per unit. WGP received distributions from WES of $101.4 million attributable to the fourth quarter and will pay $101.3 million in distributions for the same period.

2017 OUTLOOK

WES and WGP also announced their 2017 outlook:

  • Adjusted EBTIDA(1) between $1.0 billion and $1.1 billion (Please refer to slide 8 of the earnings call presentation available at www.westerngas.com for a reconciliation of items impacting the comparability of our 2017 Adjusted EBITDA(1) outlook to 2016 Adjusted EBITDA(1))
  • Total capital expenditures between $900 million and $1.0 billion
  • Maintenance capital expenditures between $60 million and $80 million
  • 2017 and 2018 distribution growth targets of 7% to 9% for WES and 12% to 18% for WGP

"2017 will feature the largest capital program in our history. We continue to focus on the Delaware and DJ Basins, where Anadarko and other third-party producer activity is accelerating," said Fink. "These investments support our objective of providing sustainable distribution growth over time, allowing us to extend our distribution growth guidance to cover both 2017 and 2018. Additionally, we have successfully negotiated an early conversion of the Series A Preferred units in 2017, and therefore expect to be able to fund this capital program without the need for additional equity issuances."

The 2017 outlook includes the following assumptions:

  • DBJV / Marcellus asset swap closing in the first quarter of 2017
  • Ramsey Train VI start-up in the fourth quarter of 2017
  • Mentone Trains I and II in the Delaware Basin beginning construction in 2017, with anticipated start-up dates in the third and fourth quarters of 2018, respectively
  • Conversion of 50% of the Series A Preferred units into common units in February 2017 and 50% in May 2017
  • Extension of the Class C units conversion date to March 1, 2020

 

(1) This press release contains forward-looking estimates of the range of Adjusted EBITDA projected to be generated by WES in its 2017 fiscal year. A reconciliation of the Adjusted EBITDA range to net cash provided by operating activities and net income is not provided because the items necessary to estimate such amounts are not reasonably accessible or estimable at this time.

CONFERENCE CALL TOMORROW AT 8 A.M. CST

WES and WGP will host a joint conference call on Thursday, February 23, 2017, at 8:00 a.m. Central Standard Time (9:00 a.m. Eastern Standard Time) to discuss fourth-quarter and full-year 2016 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 confirmation number 5700160. Pre-registration is available through the investor relations page at www.westerngas.com. Pre-registrants will be issued a personal identification number to use when dialing in to the live conference call, which will enable the participant to bypass the operator and gain immediate access to the call. 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. Simultaneously with the issuance of this press release, the slide presentation to accompany the earnings call has been posted to the investor relations page of the Western Gas website.

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 energy assets. With midstream assets located in the Rocky Mountains, North-central Pennsylvania and Texas, WES is engaged in the business of gathering, compressing, treating, processing and transporting natural gas, and gathering, stabilizing and transporting condensate, natural gas liquids and crude oil for Anadarko, as well as for other producers and customers.

Western Gas Equity Partners, LP ("WGP") is a Delaware master limited partnership formed by Anadarko 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. Western Gas Partners and Western Gas Equity 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. These factors include the ability to meet financial guidance or distribution growth expectations; the ability to safely and efficiently operate WES's assets; the supply of, demand for, and price of oil, natural gas, NGLs and related products or services; the ability to meet projected in-service dates for capital growth projects; construction costs or capital expenditures exceeding estimated or budgeted costs or expenditures; and the other factors described in the "Risk Factors" sections of WES's and WGP's most recent Forms 10-K and Forms 10-Q filed with the Securities and Exchange Commission and in their other public filings and press releases. Western Gas Partners and Western Gas Equity Partners undertake no obligation to publicly update or revise any forward-looking statements.

WESTERN GAS CONTACT
Jonathon E. VandenBrand
Director, Investor Relations
jon.vandenbrand@anadarko.com
832.636.6000

Western Gas Partners, LP Reconciliation of GAAP to Non-GAAP Measures

Below are reconciliations of (i) net income (loss) attributable to Western Gas Partners, LP (GAAP) to WES's Distributable cash flow (non-GAAP), (ii) net income (loss) attributable to Western Gas Partners, LP (GAAP) and net cash provided by operating activities (GAAP) to Adjusted EBITDA attributable to Western Gas Partners, LP ("Adjusted EBITDA") (non-GAAP), and (iii) operating income (loss) (GAAP) to Adjusted gross margin attributable to Western Gas Partners, LP ("Adjusted gross margin") (non-GAAP), as required under Regulation G of the Securities Exchange Act of 1934. Management believes that WES's Distributable cash flow, Adjusted EBITDA, Adjusted gross margin, and Coverage ratio are widely accepted financial indicators of WES's financial performance compared to other publicly traded partnerships and are useful in assessing its ability to incur and service debt, fund capital expenditures and make distributions. Distributable cash flow, Adjusted EBITDA, Adjusted gross margin and Coverage ratio, as defined by WES, may not be comparable to similarly titled measures used by other companies. Therefore, WES's Distributable cash flow, Adjusted EBITDA, Adjusted gross margin and Coverage ratio should be considered in conjunction with net income (loss) attributable to Western Gas Partners, LP and other applicable performance measures, such as operating income (loss) or cash flows from operating activities.

Western Gas Partners, LP Reconciliation of GAAP to Non-GAAP Measures, continued

Distributable Cash Flow

WES defines Distributable cash flow as Adjusted EBITDA, plus interest income and the net settlement amounts from the sale and/or purchase of natural gas, condensate and NGLs under WES's commodity price swap agreements to the extent such amounts are not recognized as Adjusted EBITDA, less net cash paid (or to be paid) for interest expense (including amortization of deferred debt issuance costs originally paid in cash, offset by non-cash capitalized interest), maintenance capital expenditures, Series A Preferred unit distributions and income taxes.

   

Three Months Ended
 December 31,

 

Year Ended
 December 31,

thousands except Coverage ratio

 

2016

 

2015

 

2016

 

2015

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

 

$

143,004

   

$

(155,881)

   

$

591,331

   

$

4,106

 

Add:

               

Distributions from equity investments

 

27,160

   

25,244

   

103,423

   

98,298

 

Non-cash equity-based compensation expense

 

1,573

   

979

   

5,591

   

4,402

 

Non-cash settled - interest expense, net (1)

 

4,350

   

4,480

   

(7,747)

   

14,400

 

Income tax (benefit) expense

 

941

   

8,372

   

8,372

   

45,532

 

Depreciation and amortization (2)

 

72,633

   

67,059

   

270,311

   

270,004

 

Impairments

 

4,222

   

238,879

   

15,535

   

515,458

 

Above-market component of swap extensions with Anadarko

 

11,038

   

10,533

   

45,820

   

18,449

 

Other expense (2)

 

128

   

1,290

   

224

   

1,290

 

Less:

               

Gain (loss) on divestiture and other, net

 

(5,872)

   

(20,224)

   

(14,641)

   

57,024

 

Equity income, net – affiliates

 

21,916

   

12,114

   

78,717

   

71,251

 

Cash paid for maintenance capital expenditures (2)

 

8,342

   

13,073

   

63,630

   

53,882

 

Capitalized interest

 

888

   

1,492

   

5,562

   

8,318

 

Cash paid for (reimbursement of) income taxes

 

771

   

   

838

   

(138)

 

Series A Preferred unit distributions

 

14,908

   

   

45,784

   

 

Other income (2)

 

252

   

   

524

   

219

 

Distributable cash flow

 

$

223,844

   

$

194,500

   

$

852,446

   

$

781,383

 

Distributions declared (3)

               

Limited partners – common units

 

$

112,378

       

$

437,747

     

General partner

 

58,279

       

221,384

     

Total

 

$

170,657

       

$

659,131

     

Coverage ratio

 

1.31

 

x

   

1.29

 

x

 
   

(1)   

Includes accretion revisions 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 $0.860 and $3.350 per unit declared for the three months and year ended December 31, 2016, 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

 

2016

 

2015

 

2016

 

2015

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

 

$

143,004

   

$

(155,881)

   

$

591,331

   

$

4,106

 

Add:

               

Distributions from equity investments

 

27,160

   

25,244

   

103,423

   

98,298

 

Non-cash equity-based compensation expense

 

1,573

   

979

   

5,591

   

4,402

 

Interest expense

 

39,234

   

31,535

   

114,921

   

113,872

 

Income tax expense

 

941

   

8,372

   

8,372

   

45,532

 

Depreciation and amortization (1)

 

72,633

   

67,059

   

270,311

   

270,004

 

Impairments

 

4,222

   

238,879

   

15,535

   

515,458

 

Other expense (1)

 

128

   

1,290

   

224

   

1,290

 

Less:

               

Gain (loss) on divestiture and other, net

 

(5,872)

   

(20,224)

   

(14,641)

   

57,024

 

Equity income, net – affiliates

 

21,916

   

12,114

   

78,717

   

71,251

 

Interest income – affiliates

 

4,225

   

4,225

   

16,900

   

16,900

 

Other income (1)

 

252

   

   

524

   

219

 

Adjusted EBITDA attributable to Western Gas Partners, LP

 

$

268,374

   

$

221,362

   

$

1,028,208

   

$

907,568

 
 

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

               

Net cash provided by (used in) operating activities

 

$

259,847

   

$

188,752

   

$

917,585

   

$

785,645

 

Interest (income) expense, net

 

35,009

   

27,310

   

98,021

   

96,972

 

Uncontributed cash-based compensation awards

 

408

   

48

   

856

   

214

 

Accretion and amortization of long-term obligations, net

 

(5,387)

   

(5,402)

   

3,789

   

(17,698)

 

Current income tax (benefit) expense

 

707

   

7,022

   

5,817

   

34,186

 

Other (income) expense, net

 

(255)

   

846

   

(479)

   

619

 

Distributions from equity investments in excess of cumulative earnings – affiliates

 

4,646

   

3,835

   

21,238

   

16,244

 

Changes in operating working capital:

               

Accounts receivable, net

 

7,839

   

(14,246)

   

48,947

   

4,371

 

Accounts and imbalance payables and accrued liabilities, net

 

(34,256)

   

16,689

   

(58,359)

   

(1,006)

 

Other

 

2,922

   

(966)

   

4,367

   

720

 

Adjusted EBITDA attributable to noncontrolling interest

 

(3,106)

   

(2,526)

   

(13,574)

   

(12,699)

 

Adjusted EBITDA attributable to Western Gas Partners, LP

 

$

268,374

   

$

221,362

   

$

1,028,208

   

$

907,568

 

Cash flow information of Western Gas Partners, LP

               

Net cash provided by (used in) operating activities

         

$

917,585

   

$

785,645

 

Net cash provided by (used in) investing activities

         

(1,105,534)

   

(500,277)

 

Net cash provided by (used in) financing activities

         

447,841

   

(254,389)

 
   

(1)     

 Includes WES's 75% share of depreciation and amortization; other expense; and other income attributable to Chipeta.

                                   

 

Western Gas Partners, LP Reconciliation of GAAP to Non-GAAP Measures, continued
Adjusted Gross Margin Attributable to Western Gas Partners, LP

WES defines Adjusted gross margin as total revenues and other, less cost of product and reimbursements for electricity-related expenses recorded as revenue, plus distributions from equity investments and excluding the noncontrolling interest owner's proportionate share of revenue and cost of product.

   

Three Months Ended
 December 31,

 

Year Ended
 December 31,

thousands

 

2016

 

2015

 

2016

 

2015

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

               

Operating income (loss)

 

$

181,155

   

$

(117,482)

   

$

708,208

   

$

157,330

 

Add:

               

Distributions from equity investments

 

27,160

   

25,244

   

103,423

   

98,298

 

Operation and maintenance

 

81,869

   

89,228

   

308,010

   

331,972

 

General and administrative

 

12,049

   

10,687

   

45,591

   

41,319

 

Property and other taxes

 

7,047

   

5,380

   

40,145

   

33,288

 

Depreciation and amortization

 

73,287

   

67,715

   

272,933

   

272,611

 

Impairments

 

4,222

   

238,879

   

15,535

   

515,458

 

Less:

               

Gain (loss) on divestiture and other, net

 

(5,872)

   

(20,224)

   

(14,641)

   

57,024

 

Proceeds from business interruption insurance claims

 

   

   

16,270

   

 

Equity income, net – affiliates

 

21,916

   

12,114

   

78,717

   

71,251

 

Reimbursed electricity-related charges recorded as revenues

 

14,026

   

13,752

   

59,733

   

54,175

 

Adjusted gross margin attributable to noncontrolling interest

 

3,735

   

3,557

   

16,323

   

16,779

 

Adjusted gross margin attributable to Western Gas Partners, LP

 

$

352,984

   

$

310,452

   

$

1,337,443

   

$

1,251,047

 

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

 

$

317,294

   

$

277,342

   

$

1,194,877

   

$

1,119,555

 

Adjusted gross margin for crude/NGL assets

 

35,690

   

33,110

   

142,566

   

131,492

 

 

Western Gas Partners, LP

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 
   

Three Months Ended
 December 31,

 

Year Ended
 December 31,

thousands except per-unit amounts

 

2016

 

2015

 

2016

 

2015

Revenues and other

               

Gathering, processing and transportation

 

$

317,517

   

$

284,641

   

$

1,227,849

   

$

1,128,838

 

Natural gas and natural gas liquids sales

 

192,728

   

131,075

   

572,313

   

617,949

 

Other

 

575

   

842

   

4,108

   

5,285

 

Total revenues and other

 

510,820

   

416,558

   

1,804,270

   

1,752,072

 

Equity income, net – affiliates

 

21,916

   

12,114

   

78,717

   

71,251

 

Operating expenses

               

Cost of product

 

167,235

   

114,041

   

494,194

   

528,369

 

Operation and maintenance

 

81,869

   

89,228

   

308,010

   

331,972

 

General and administrative

 

12,049

   

10,687

   

45,591

   

41,319

 

Property and other taxes

 

7,047

   

5,380

   

40,145

   

33,288

 

Depreciation and amortization

 

73,287

   

67,715

   

272,933

   

272,611

 

Impairments

 

4,222

   

238,879

   

15,535

   

515,458

 

Total operating expenses

 

345,709

   

525,930

   

1,176,408

   

1,723,017

 

Gain (loss) on divestiture and other, net

 

(5,872)

   

(20,224)

   

(14,641)

   

57,024

 

Proceeds from business interruption insurance claims

 

   

   

16,270

   

 

Operating income (loss)

 

181,155

   

(117,482)

   

708,208

   

157,330

 

Interest income – affiliates

 

4,225

   

4,225

   

16,900

   

16,900

 

Interest expense

 

(39,234)

   

(31,535)

   

(114,921)

   

(113,872)

 

Other income (expense), net

 

255

   

(846)

   

479

   

(619)

 

Income (loss) before income taxes

 

146,401

   

(145,638)

   

610,666

   

59,739

 

Income tax (benefit) expense

 

941

   

8,372

   

8,372

   

45,532

 

Net income (loss)

 

145,460

   

(154,010)

   

602,294

   

14,207

 

Net income attributable to noncontrolling interest

 

2,456

   

1,871

   

10,963

   

10,101

 

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

 

$

143,004

   

$

(155,881)

   

$

591,331

   

$

4,106

 

Limited partners' interest in net income (loss):

               

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

 

$

143,004

   

$

(155,881)

   

$

591,331

   

$

4,106

 

Pre-acquisition net (income) loss allocated to Anadarko

 

   

(15,780)

   

(11,326)

   

(79,386)

 

Series A Preferred units interest in net (income) loss

 

(25,904)

   

   

(76,893)

   

 

General partner interest in net (income) loss

 

(62,229)

   

(47,581)

   

(236,561)

   

(180,996)

 

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

 

$

54,871

   

$

(219,242)

   

$

266,551

   

$

(256,276)

 

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

 

$

0.35

   

$

(1.60)

   

$

1.74

   

$

(1.95)

 

Weighted-average common units outstanding – basic

 

130,672

   

128,576

   

130,253

   

128,345

 

Weighted-average common units outstanding – diluted

 

164,867

   

139,905

   

159,058

   

139,459

 

 

Western Gas Partners, LP

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

 
   

December 31,

thousands except number of units

 

2016

 

2015

Current assets

 

$

594,014

   

$

299,217

 

Note receivable – Anadarko

 

260,000

   

260,000

 

Net property, plant and equipment

 

5,049,932

   

4,858,779

 

Other assets

 

1,829,082

   

1,883,201

 

Total assets

 

$

7,733,028

   

$

7,301,197

 

Current liabilities

 

$

315,305

   

$

235,488

 

Long-term debt

 

3,091,461

   

2,690,651

 

Asset retirement obligations and other

 

149,043

   

268,356

 

Deferred purchase price obligation – Anadarko

 

41,440

   

188,674

 

Total liabilities

 

$

3,597,249

   

$

3,383,169

 

Equity and partners' capital

       

Series A Preferred units (21,922,831 and zero units issued and outstanding at
December 31, 2016 and 2015, respectively)

 

$

639,545

   

$

 

Common units (130,671,970 and 128,576,965 units issued and outstanding at
December 31, 2016 and 2015, respectively)

 

2,536,872

   

2,588,991

 

Class C units (12,358,123 and 11,411,862 units issued and outstanding at
December 31, 2016 and 2015, respectively)

 

750,831

   

710,891

 

General partner units (2,583,068 units issued and outstanding at December 31, 2016
and 2015)

 

143,968

   

120,164

 

Net investment by Anadarko

 

   

430,598

 

Noncontrolling interest

 

64,563

   

67,384

 

Total liabilities, equity and partners' capital

 

$

7,733,028

   

$

7,301,197

 

 

Western Gas Partners, LP

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 
   

Year Ended
 December 31,

thousands

 

2016

 

2015

Cash flows from operating activities

       

Net income (loss)

 

$

602,294

   

$

14,207

 

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

       

Depreciation and amortization

 

272,933

   

272,611

 

Impairments

 

15,535

   

515,458

 

(Gain) loss on divestiture and other, net

 

14,641

   

(57,024)

 

Change in other items, net

 

12,182

   

40,393

 

Net cash provided by (used in) operating activities

 

$

917,585

   

$

785,645

 

Cash flows from investing activities

       

Capital expenditures

 

$

(479,993)

   

$

(637,964)

 

Contributions in aid of construction costs from affiliates

 

6,135

   

461

 

Acquisitions from affiliates

 

(716,465)

   

(10,903)

 

Acquisitions from third parties

 

   

(3,514)

 

Investments in equity affiliates

 

(27)

   

(11,442)

 

Distributions from equity investments in excess of cumulative earnings – affiliates

 

21,238

   

16,244

 

Proceeds from the sale of assets to affiliates

 

623

   

925

 

Proceeds from the sale of assets to third parties

 

45,490

   

145,916

 

Proceeds from property insurance claims

 

17,465

   

 

Net cash provided by (used in) investing activities

 

$

(1,105,534)

   

$

(500,277)

 

Cash flows from financing activities

       

Borrowings, net of debt issuance costs

 

$

1,297,218

   

$

889,606

 

Repayments of debt

 

(900,000)

   

(610,000)

 

Increase (decrease) in outstanding checks

 

2,079

   

(2,666)

 

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

 

25,000

   

57,353

 

Proceeds from the issuance of Series A Preferred units, net of offering expenses

 

686,937

   

 

Distributions to unitholders

 

(671,938)

   

(545,143)

 

Distributions to noncontrolling interest owner

 

(13,784)

   

(12,187)

 

Net contributions from (distributions to) Anadarko

 

(23,491)

   

(49,801)

 

Above-market component of swap extensions with Anadarko

 

45,820

   

18,449

 

Net cash provided by (used in) financing activities

 

$

447,841

   

$

(254,389)

 

Net increase (decrease) in cash and cash equivalents

 

$

259,892

   

$

30,979

 

Cash and cash equivalents at beginning of period

 

98,033

   

67,054

 

Cash and cash equivalents at end of period

 

$

357,925

   

$

98,033

 

 

Western Gas Partners, LP

OPERATING STATISTICS

(Unaudited)

 
   

Three Months Ended
 December 31,

 

Year Ended
 December 31,

   

2016

 

2015

 

2016

 

2015

Throughput for natural gas assets (MMcf/d)

               

Gathering, treating and transportation

 

1,480

   

1,581

   

1,537

   

1,791

 

Processing

 

2,500

   

2,272

   

2,350

   

2,331

 

Equity investment (1)

 

173

   

196

   

177

   

178

 

  Total throughput for natural gas assets

 

4,153

   

4,049

   

4,064

   

4,300

 

  Throughput attributable to noncontrolling interest for natural gas assets

 

113

   

122

   

124

   

142

 

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

 

4,040

   

3,927

   

3,940

   

4,158

 

Throughput for crude/NGL assets (MBbls/d)

               

Gathering, treating and transportation

 

49

   

60

   

57

   

69

 

Equity investment (2)

 

132

   

127

   

127

   

117

 

  Total throughput for crude/NGL assets

 

181

   

187

   

184

   

186

 

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

 

$

0.85

   

$

0.77

   

$

0.83

   

$

0.74

 

Adjusted gross margin per Bbl for crude/NGL assets (4)

 

2.15

   

1.92

   

2.11

   

1.93

 
                                 
 

(1)  

Represents WES's 14.81% share of average Fort Union throughput and 22% share of average Rendezvous throughput.

(2)   

Represents WES's 10% share of average White Cliffs throughput, WES's 25% share of average Mont Belvieu JV throughput, WES's 20% share of average TEG and TEP throughput, and WES's 33.33% share of average FRP throughput.

(3)    

Average for period. Calculated as Adjusted gross margin attributable to Western Gas Partners, LP for natural gas assets (total revenues and other for natural gas assets, less reimbursements for electricity-related expenses recorded as revenue and cost of product for natural gas assets, plus distributions from WES's equity investments in Fort Union and Rendezvous, and excluding the noncontrolling interest owner's proportionate share of revenue and cost of product), divided by total throughput (MMcf/d) attributable to Western Gas Partners, LP for natural gas assets.

(4)   

Average for period. Calculated as Adjusted gross margin for crude/NGL assets (total revenues and other for crude/NGL assets, less reimbursements for electricity-related expenses recorded as revenue and cost of product for crude/NGL assets, plus distributions from WES's equity investments in White Cliffs, the Mont Belvieu JV, TEG, TEP and FRP), divided by total throughput (MBbls/d) for crude/NGL 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, 2016

Distributions declared by Western Gas Partners, LP:

   

General partner interest

 

$

3,308

 

Incentive distribution rights

 

54,971

 

Common units held by WGP

 

43,114

 

Less:

   

Public company general and administrative expense

 

685

 

Interest expense

 

525

 

Cash available for distribution

 

$

100,183

 

Declared distribution per common unit

 

$

0.46250

 

Distributions declared by Western Gas Equity Partners, LP

 

$

101,254

 

Coverage ratio

 

0.99

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

 

2016

 

2015

 

2016

 

2015

Revenues and other

               

Gathering, processing and transportation

 

$

317,517

   

$

284,641

   

$

1,227,849

   

$

1,128,838

 

Natural gas and natural gas liquids sales

 

192,728

   

131,075

   

572,313

   

617,949

 

Other

 

575

   

842

   

4,108

   

5,285

 

Total revenues and other

 

510,820

   

416,558

   

1,804,270

   

1,752,072

 

Equity income, net – affiliates

 

21,916

   

12,114

   

78,717

   

71,251

 

Operating expenses

               

Cost of product

 

167,235

   

114,041

   

494,194

   

528,369

 

Operation and maintenance

 

81,869

   

89,228

   

308,010

   

331,972

 

General and administrative

 

12,734

   

11,445

   

49,248

   

44,428

 

Property and other taxes

 

7,048

   

5,381

   

40,161

   

33,327

 

Depreciation and amortization

 

73,287

   

67,715

   

272,933

   

272,611

 

Impairments

 

4,222

   

238,879

   

15,535

   

515,458

 

Total operating expenses

 

346,395

   

526,689

   

1,180,081

   

1,726,165

 

Gain (loss) on divestiture and other, net

 

(5,872)

   

(20,224)

   

(14,641)

   

57,024

 

Proceeds from business interruption insurance claims

 

   

   

16,270

   

 

Operating income (loss)

 

180,469

   

(118,241)

   

704,535

   

154,182

 

Interest income – affiliates

 

4,225

   

4,225

   

16,900

   

16,900

 

Interest expense

 

(39,759)

   

(31,535)

   

(116,628)

   

(113,874)

 

Other income (expense), net

 

275

   

(834)

   

545

   

(578)

 

Income (loss) before income taxes

 

145,210

   

(146,385)

   

605,352

   

56,630

 

Income tax (benefit) expense

 

941

   

8,372

   

8,372

   

45,532

 

Net income (loss)

 

144,269

   

(154,757)

   

596,980

   

11,098

 

Net income (loss) attributable to noncontrolling interests

 

60,573

   

(139,766)

   

251,208

   

(154,409)

 

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

 

$

83,696

   

$

(14,991)

   

$

345,772

   

$

165,507

 

Limited partners' interest in net income (loss):

               

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

 

$

83,696

   

$

(14,991)

   

$

345,772

   

$

165,507

 

Pre-acquisition net (income) loss allocated to Anadarko

 

   

(15,780)

   

(11,326)

   

(79,386)

 

Limited partners' interest in net income (loss)

 

$

83,696

   

$

(30,771)

   

$

334,446

   

$

86,121

 

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

 

$

0.38

   

$

(0.14)

   

$

1.53

   

$

0.39

 

Weighted-average common units outstanding – basic and diluted

 

218,925

   

218,916

   

218,922

   

218,913

 

 

Western Gas Equity Partners, LP

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

 
   

December 31,

thousands except number of units

 

2016

 

2015

Current assets

 

$

595,591

   

$

301,364

 

Note receivable – Anadarko

 

260,000

   

260,000

 

Net property, plant and equipment

 

5,049,932

   

4,858,779

 

Other assets

 

1,830,574

   

1,883,201

 

Total assets

 

$

7,736,097

   

$

7,303,344

 

Current liabilities

 

$

315,387

   

$

235,565

 

Long-term debt

 

3,119,461

   

2,690,651

 

Asset retirement obligations and other

 

149,043

   

268,356

 

Deferred purchase price obligation – Anadarko

 

41,440

   

188,674

 

Total liabilities

 

$

3,625,331

   

$

3,383,246

 

Equity and partners' capital

       

Common units (218,928,570 and 218,919,380 units issued and outstanding at December 31, 2016 and 2015, respectively)

 

$

1,048,143

   

$

1,060,842

 

Net investment by Anadarko

 

   

430,598

 

Noncontrolling interests

 

3,062,623

   

2,428,658

 

Total liabilities, equity and partners' capital

 

$

7,736,097

   

$

7,303,344

 

 

Western Gas Equity Partners, LP

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 
   

Year Ended
 December 31,

thousands

 

2016

 

2015

Cash flows from operating activities

       

Net income (loss)

 

$

596,980

   

$

11,098

 

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

       

Depreciation and amortization

 

272,933

   

272,611

 

Impairments

 

15,535

   

515,458

 

(Gain) loss on divestiture and other, net

 

14,641

   

(57,024)

 

Change in other items, net

 

12,987

   

40,666

 

Net cash provided by (used in) operating activities

 

$

913,076

   

$

782,809

 

Cash flows from investing activities

       

Capital expenditures

 

$

(479,993)

   

$

(637,964)

 

Contributions in aid of construction costs from affiliates

 

6,135

   

461

 

Acquisitions from affiliates

 

(716,465)

   

(10,903)

 

Acquisitions from third parties

 

   

(3,514)

 

Investments in equity affiliates

 

(27)

   

(11,442)

 

Distributions from equity investments in excess of cumulative earnings – affiliates

 

21,238

   

16,244

 

Proceeds from the sale of assets to affiliates

 

623

   

925

 

Proceeds from the sale of assets to third parties

 

45,490

   

145,916

 

Proceeds from property insurance claims

 

17,465

   

 

Net cash provided by (used in) investing activities

 

$

(1,105,534)

   

$

(500,277)

 

Cash flows from financing activities

       

Borrowings, net of debt issuance costs

 

$

1,323,198

   

$

889,606

 

Repayments of debt

 

(900,000)

   

(611,150)

 

Increase (decrease) in outstanding checks

 

2,079

   

(2,666)

 

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

 

   

57,353

 

Proceeds from the issuance of WES Series A Preferred units, net of offering expenses

 

686,937

   

 

Distributions to WGP unitholders

 

(374,082)

   

(306,477)

 

Distributions to Chipeta noncontrolling interest owner

 

(13,784)

   

(12,187)

 

Distributions to noncontrolling interest owners of WES

 

(294,841)

   

(233,178)

 

Net contributions from (distributions to) Anadarko

 

(23,491)

   

(49,801)

 

Above-market component of swap extensions with Anadarko

 

45,820

   

18,449

 

Net cash provided by (used in) financing activities

 

$

451,836

   

$

(250,051)

 

Net increase (decrease) in cash and cash equivalents

 

$

259,378

   

$

32,481

 

Cash and cash equivalents at beginning of period

 

99,694

   

67,213

 

Cash and cash equivalents at end of period

 

$

359,072

   

$

99,694

 

 

 

SOURCE Western Gas Partners, LP; Western Gas Equity Partners, LP

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