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Western Gas Announces Fourth-Quarter And Full-Year 2016 Results

HOUSTON, Feb. 22, 2017 /PRNewswire/ -- Western Gas Partners, LP (WES) ("WES" or the "Partnership") and Western Gas Equity Partners, LP (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


 

 

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