WES
$47.74
Western Gas Partners LP
$.71
1.51%
Earnings Details
3rd Quarter September 2018
Tuesday, October 30, 2018 4:05:00 PM
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Summary

Western Gas Partners LP (WES) Recent Earnings

Western Gas Partners LP (WES) reported 3rd Quarter September 2018 earnings of $0.39 per share on revenue of $507.8 million. The consensus earnings estimate was $0.67 per share on revenue of $477.4 million. Revenue fell 11.6% compared to the same quarter a year ago.

Western Gas Partners, LP is engaged in gathering, processing, compressing, treating and transporting natural gas, condensate, NGLs and crude oil for its subsidiaries as well as third-party producers and customers.

Results
Reported Earnings
$0.39
Earnings Whisper
-
Consensus Estimate
$0.67
Reported Revenue
$507.8 Mil
Revenue Estimate
$477.4 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Western Gas Announces Third-Quarter 2018 Results

HOUSTON, Oct. 30, 2018 /PRNewswire/ -- Western Gas Partners, LP (NYSE: WES) ("WES" or the "Partnership") and Western Gas Equity Partners, LP (NYSE: WGP) ("WGP") today announced third-quarter 2018 financial and operating results.

WESTERN GAS PARTNERS, LP

Net income (loss) available to limited partners for the third quarter of 2018 totaled $66.1 million, or $0.39 per common unit (diluted), with third-quarter 2018 Adjusted EBITDA(1) of $314.5 million and third-quarter 2018 Distributable cash flow(1) of $248.2 million.

WES previously declared a quarterly distribution of $0.965 per unit for the third quarter of 2018. This distribution represented a 2% increase over the prior quarter's distribution and a 7% increase over the third-quarter 2017 distribution. The third-quarter 2018 Coverage ratio(1) of 1.08 times was based on the quarterly distribution of $0.965 per unit.

"We are delivering on our promise for the second half of the year: significant Delaware Basin volumetric growth as critical infrastructure comes online, meaningful growth in Adjusted EBITDA, and expanding coverage. Additionally, the firm takeaway secured by several of our large customers gives us significant visibility into our ability to grow throughout 2019 and beyond," said Chief Executive Officer, Benjamin Fink. "With this organic growth now materializing, we expect annual Adjusted EBITDA to grow by at least 20% in 2019."

Total throughput attributable to WES for natural gas assets for the third quarter of 2018 averaged 3.9 Bcf/d, which was 1% above the prior quarter and 12% above the third quarter of 2017. Total throughput for crude oil, NGL and produced water assets for the third quarter of 2018 averaged 421 MBbls/d, which was 23% above the prior quarter and 101% above the third quarter of 2017.




(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.

Capital expenditures attributable to WES, including equity investments but excluding acquisitions, totaled $332.4 million on a cash basis and $328.9 million on an accrual basis during the third quarter of 2018, with maintenance capital expenditures on a cash basis of $23.8 million. WES adjusted its outlook for full-year 2018 Adjusted EBITDA(1) to a range of $1.175 billion to $1.225 billion(2) and its outlook for full-year 2018 maintenance capital expenditures to a range of $85 million to $95 million. In addition, WES noted that commissioning activities for the first train at the Mentone facility are underway, with startup expected in the coming weeks. The second train is expected to be in service in the first quarter of 2019.

WESTERN GAS EQUITY PARTNERS, LP

WGP indirectly owns the entire general partner interest in WES, 100% of the incentive distribution rights in WES and 50,132,046 WES common units. Net income (loss) available to limited partners for the third quarter of 2018 totaled $107.5 million, or $0.49 per common unit (diluted).

WGP previously declared a quarterly distribution of $0.5950 per unit for the third quarter of 2018. This distribution represented a 2% increase over the prior quarter's distribution and an 11% increase over the third-quarter 2017 distribution. WGP will receive distributions from WES of $131.3 million attributable to the third quarter of 2018 and will pay $130.3 million in distributions for the same period.

CONFERENCE CALL TOMORROW AT 11 A.M. CDT

WES and WGP will host a joint conference call on Wednesday, October 31, 2018, at 11:00 a.m. Central Daylight Time (12:00 p.m. Eastern Daylight Time) to discuss third-quarter 2018 results. Individuals who would like to participate should dial 877-883-0383 (Domestic) or 412-902-6506 (International) approximately 15 minutes before the scheduled conference call time, and enter participant access code 3261919. To access the live audio webcast of the conference call, please visit the investor relations section of the Partnership's website at www.westerngas.com. A replay of the conference call will also be available on the website for two weeks following the call.

Western Gas Partners, LP ("WES") is a growth-oriented Delaware master limited partnership formed by Anadarko Petroleum Corporation to acquire, own, develop and operate midstream assets. With midstream assets located in the Rocky Mountains, North-central Pennsylvania, Texas and New Mexico, WES is engaged in the business of gathering, compressing, treating, processing and transporting natural gas; gathering, stabilizing and transporting condensate, natural gas liquids and crude oil; and gathering and disposing of produced water for Anadarko, as well as for third-party producers and customers. In addition, in its capacity as a processor of natural gas, WES also buys and sells natural gas, NGLs and condensate on behalf of itself and as agent for its customers under certain of its contracts.

Western Gas Equity Partners, LP ("WGP") is a Delaware master limited partnership formed by Anadarko Petroleum Corporation to own the following types of interests in WES: (i) the general partner interest and all of the incentive distribution rights in WES, both owned through WGP's 100% ownership of WES's general partner, and (ii) a significant limited partner interest in WES.

For more information about Western Gas Partners, LP and Western Gas Equity Partners, LP, please visit www.westerngas.com.

This news release contains forward-looking statements. WES and WGP's management believes that their expectations are based on reasonable assumptions. No assurance, however, can be given that such expectations will prove to have been correct. A number of factors could cause actual results to differ materially from the projections, anticipated results or other expectations expressed in this news release. These factors include the ability to meet financial guidance or distribution growth expectations; the ability to safely and efficiently operate WES's assets; the supply of, demand for, and price of oil, natural gas, NGLs and related products or services; the ability to meet projected in-service dates for capital growth projects; construction costs or capital expenditures exceeding estimated or budgeted costs or expenditures; and the other factors described in the "Risk Factors" sections of WES's and WGP's most recent Forms 10-K and Forms 10-Q filed with the Securities and Exchange Commission and in their other public filings and press releases. Western Gas Partners, LP and Western Gas Equity Partners, LP undertake no obligation to publicly update or revise any forward-looking statements.




(1) 

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



(2)

This press release contains forward-looking estimates of the range of Adjusted EBITDA projected to be generated by WES in its 2018 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.

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

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

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

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

Distributable Cash Flow

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



Three Months Ended
 September 30,


Nine Months Ended
 September 30,

thousands except Coverage ratio


2018


2017


2018


2017

Reconciliation of Net income (loss) attributable to Western Gas Partners, LP to Distributable cash flow and calculation of the Coverage ratio









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


$

154,646



$

143,506



$

336,717



$

418,846


Add:









Distributions from equity investments


51,023



29,145



111,924



80,568


Non-cash equity-based compensation expense


1,548



1,258



5,552



3,479


Non-cash settled interest expense, net (1)








71


Income tax (benefit) expense


1,517



510



3,301



4,905


Depreciation and amortization (2)


81,826



71,812



236,008



214,213


Impairments (2)


23,930



2,159



151,321



170,079


Above-market component of swap agreements with Anadarko


12,601



18,049



40,722



46,719


Other expense (2)


33





184



140


Less:









Recognized Service revenues – fee based (less than) in excess of customer billings


4,397





536




Gain (loss) on divestiture and other, net


65



72



351



135,017


Equity income, net – affiliates


43,110



21,519



102,752



62,708


Cash paid for maintenance capital expenditures (2)


23,837



10,591



61,162



33,115


Capitalized interest


6,967



2,115



17,032



3,991


Cash paid for (reimbursement of) income taxes






(87)



189


Series A Preferred unit distributions








7,453


Other income (2)


592



283



2,592



960


Distributable cash flow


$

248,156



$

231,859



$

701,391



$

695,587


Distributions declared (3)









Limited partners – common units


$

147,268





$

434,930




General partner


82,971





242,133




Total


$

230,239





$

677,063




Coverage ratio


1.08


x



1.04

x




(1) 

Includes amounts related to the Deferred purchase price obligation - Anadarko.

(2)

Includes WES's 75% share of depreciation and amortization; impairments; other expense; cash paid for maintenance capital expenditures; and other income attributable to Chipeta.

(3)

Reflects cash distributions of $0.965 and $2.850 per unit declared for the three and nine months ended September 30, 2018, respectively.

 

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

Adjusted EBITDA Attributable to Western Gas Partners, LP

WES defines Adjusted EBITDA as net income (loss) attributable to Western Gas Partners, LP, plus distributions from equity investments, non-cash equity-based compensation expense, interest expense, income tax expense, depreciation and amortization, impairments, and other expense (including lower of cost or market inventory adjustments recorded in cost of product), less gain (loss) on divestiture and other, net, income from equity investments, interest income, income tax benefit, and other income.



Three Months Ended
 September 30,


Nine Months Ended
 September 30,

thousands


2018


2017


2018


2017

Reconciliation of Net income (loss) attributable to Western Gas Partners, LP to Adjusted EBITDA attributable to Western Gas Partners, LP









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


$

154,646



$

143,506



$

336,717



$

418,846


Add:









Distributions from equity investments


51,023



29,145



111,924



80,568


Non-cash equity-based compensation expense


1,548



1,258



5,552



3,479


Interest expense


47,991



35,544



131,663



106,794


Income tax expense


1,517



510



3,301



4,905


Depreciation and amortization (1)


81,826



71,812



236,008



214,213


Impairments (1)


23,930



2,159



151,321



170,079


Other expense (1)


33





184



140


Less:









Gain (loss) on divestiture and other, net


65



72



351



135,017


Equity income, net – affiliates


43,110



21,519



102,752



62,708


Interest income – affiliates


4,225



4,225



12,675



12,675


Other income (1)


592



283



2,592



960


Adjusted EBITDA attributable to Western Gas Partners, LP


$

314,522



$

257,835



$

858,300



$

787,664


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









Net cash provided by operating activities


$

236,811



$

211,947



$

751,722



$

645,099


Interest (income) expense, net


43,766



31,319



118,988



94,119


Uncontributed cash-based compensation awards


(55)



78



932



(94)


Accretion and amortization of long-term obligations, net


(1,257)



(1,055)



(3,883)



(3,194)


Current income tax (benefit) expense


(14)



395



247



1,023


Other (income) expense, net


(598)



(286)



(2,609)



(969)


Distributions from equity investments in excess of cumulative earnings – affiliates


5,592



7,034



18,097



16,255


Changes in assets and liabilities:









Accounts receivable, net


57,535



56,335



64,544



46,972


Accounts and imbalance payables and accrued liabilities, net


(14,781)



(45,982)



(55,354)



(4,007)


Other items, net


(9,379)



3,181



(24,049)



3,065


Adjusted EBITDA attributable to noncontrolling interest


(3,098)



(5,131)



(10,335)



(10,605)


Adjusted EBITDA attributable to Western Gas Partners, LP


$

314,522



$

257,835



$

858,300



$

787,664


Cash flow information of Western Gas Partners, LP









Net cash provided by operating activities






$

751,722



$

645,099


Net cash used in investing activities






(1,160,684)



(514,797)


Net cash provided by (used in) financing activities






460,816



(335,792)




(1) 

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

 

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

Adjusted Gross Margin Attributable to Western Gas Partners, LP

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



Three Months Ended
 September 30,


Nine Months Ended
 September 30,

thousands


2018


2017


2018


2017

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









Operating income (loss)


$

200,321



$

179,456



$

463,183



$

525,456


Add:









Distributions from equity investments


51,023



29,145



111,924



80,568


Operation and maintenance


111,359



79,536



300,266



229,444


General and administrative


14,467



12,158



42,634



35,402


Property and other taxes


10,954



11,215



35,090



35,433


Depreciation and amortization


82,553



72,539



238,187



216,272


Impairments


25,317



2,159



152,708



170,079


Less:









Gain (loss) on divestiture and other, net


65



72



351



135,017


Proceeds from business interruption insurance claims








29,882


Equity income, net – affiliates


43,110



21,519



102,752



62,708


Reimbursed electricity-related charges recorded as revenues


17,455



14,323



50,139



42,338


Adjusted gross margin attributable to noncontrolling interest


3,803



5,878



12,350



13,189


Adjusted gross margin attributable to Western Gas Partners, LP


$

431,561



$

344,416



$

1,178,400



$

1,009,520


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


$

363,536



$

305,337



$

1,019,061



$

904,620


Adjusted gross margin for crude oil, NGL and produced water assets


68,025



39,079



159,339



104,900



 

Western Gas Partners, LP

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)




Three Months Ended
 September 30,


Nine Months Ended
 September 30,

thousands except per-unit amounts


2018


2017


2018


2017

Revenues and other









Service revenues – fee based


$

409,106



$

306,187



$

1,146,099



$

913,436


Service revenues – product based


22,735





67,433




Product sales


75,150



259,141



217,738



690,490


Other


771



9,367



1,213



12,412


Total revenues and other


507,762



574,695



1,432,483



1,616,338


Equity income, net – affiliates


43,110



21,519



102,752



62,708


Operating expenses









Cost of product


105,966



239,223



303,518



631,859


Operation and maintenance


111,359



79,536



300,266



229,444


General and administrative


14,467



12,158



42,634



35,402


Property and other taxes


10,954



11,215



35,090



35,433


Depreciation and amortization


82,553



72,539



238,187



216,272


Impairments


25,317



2,159



152,708



170,079


Total operating expenses


350,616



416,830



1,072,403



1,318,489


Gain (loss) on divestiture and other, net


65



72



351



135,017


Proceeds from business interruption insurance claims








29,882


Operating income (loss)


200,321



179,456



463,183



525,456


Interest income – affiliates


4,225



4,225



12,675



12,675


Interest expense


(47,991)



(35,544)



(131,663)



(106,794)


Other income (expense), net


598



286



2,609



969


Income (loss) before income taxes


157,153



148,423



346,804



432,306


Income tax (benefit) expense


1,517



510



3,301



4,905


Net income (loss)


155,636



147,913



343,503



427,401


Net income attributable to noncontrolling interest


990



4,407



6,786



8,555


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


$

154,646



$

143,506



$

336,717



$

418,846


Limited partners' interest in net income (loss):









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


$

154,646



$

143,506



$

336,717



$

418,846


Series A Preferred units interest in net (income) loss








(42,373)


General partner interest in net (income) loss


(88,551)



(78,376)



(256,166)



(222,903)


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


$

66,095



$

65,130



$

80,551



$

153,570


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


$

0.39



$

0.38



$

0.46



$

0.91


Weighted-average common units outstanding – basic and diluted


152,609



152,602



152,605



145,371


 

Western Gas Partners, LP

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)


thousands except number of units


September 30,
 2018


December 31,
 2017

Current assets


$

381,624



$

254,062


Note receivable – Anadarko


260,000



260,000


Net property, plant and equipment


6,418,634



5,730,891


Other assets


1,971,040



1,769,397


Total assets


$

9,031,298



$

8,014,350


Current liabilities


$

512,060



$

424,333


Long-term debt


4,566,464



3,464,712


Asset retirement obligations


157,933



143,394


Other liabilities


152,242



10,900


Total liabilities


5,388,699



4,043,339


Equity and partners' capital





Common units (152,609,285 and 152,602,105 units issued and outstanding at September 30, 2018, and December 31, 2017, respectively)


2,595,719



2,950,010


Class C units (14,045,429 and 13,243,883 units issued and outstanding at September 30, 2018, and December 31, 2017, respectively)


787,420



780,040


General partner units (2,583,068 units issued and outstanding at September 30, 2018, and December 31, 2017)


199,433



179,232


Noncontrolling interest


60,027



61,729


Total liabilities, equity and partners' capital


$

9,031,298



$

8,014,350


 

Western Gas Partners, LP

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)




Nine Months Ended
 September 30,

thousands


2018


2017

Cash flows from operating activities





Net income (loss)


$

343,503



$

427,401


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





Depreciation and amortization


238,187



216,272


Impairments


152,708



170,079


(Gain) loss on divestiture and other, net


(351)



(135,017)


Change in other items, net


17,675



(33,636)


Net cash provided by operating activities


$

751,722



$

645,099


Cash flows from investing activities





Capital expenditures


$

(949,022)



$

(419,193)


Contributions in aid of construction costs from affiliates




1,386


Acquisitions from affiliates


(254)



(3,910)


Acquisitions from third parties


(161,858)



(155,298)


Investments in equity affiliates


(67,979)



(384)


Distributions from equity investments in excess of cumulative earnings – affiliates


18,097



16,255


Proceeds from the sale of assets to third parties


332



23,370


Proceeds from property insurance claims




22,977


Net cash used in investing activities


$

(1,160,684)



$

(514,797)


Cash flows from financing activities





Borrowings, net of debt issuance costs


$

2,135,637



$

249,989


Repayments of debt


(1,040,000)




Settlement of the Deferred purchase price obligation – Anadarko




(37,346)


Increase (decrease) in outstanding checks


(2,687)



3,310


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




(183)


Distributions to unitholders


(663,410)



(589,262)


Distributions to noncontrolling interest owner


(9,446)



(9,049)


Net contributions from (distributions to) Anadarko




30


Above-market component of swap agreements with Anadarko


40,722



46,719


Net cash provided by (used in) financing activities


$

460,816



$

(335,792)


Net increase (decrease) in cash and cash equivalents


$

51,854



$

(205,490)


Cash and cash equivalents at beginning of period


78,814



357,925


Cash and cash equivalents at end of period


$

130,668



$

152,435


 

Western Gas Partners, LP

OPERATING STATISTICS

(Unaudited)




Three Months Ended
 September 30,


Nine Months Ended
 September 30,



2018


2017


2018


2017

Throughput for natural gas assets (MMcf/d)









Gathering, treating and transportation


954



784



886



1,029


Processing


2,844



2,588



2,820



2,528


Equity investment (1)


139



159



144



160


Total throughput for natural gas assets


3,937



3,531



3,850



3,717


Throughput attributable to noncontrolling interest for natural gas assets


87



104



92



107


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


3,850



3,427



3,758



3,610


Throughput for crude oil, NGL and produced water assets (MBbls/d)









Gathering, treating, transportation and disposal


154



77



141



57


Equity investment (2)


267



132



200



130


Total throughput for crude oil, NGL and produced water assets


421



209



341



187


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


$

1.03



$

0.97



$

0.99



$

0.92


Adjusted gross margin per Bbl for crude oil, NGL and produced water assets (4)


1.76



2.03



1.71



2.05




(1) 

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

(2)

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

(3)

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

(4)

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

 


Western Gas Equity Partners, LP

CALCULATION OF CASH AVAILABLE FOR DISTRIBUTION

(Unaudited)


thousands except per-unit amount and Coverage ratio


Three Months Ended
 September 30, 2018

Distributions declared by Western Gas Partners, LP:



General partner interest


$

3,832


Incentive distribution rights


79,139


Common units held by WGP


48,377


Less:



Public company general and administrative expense


691


Interest expense


325


Cash available for distribution


$

130,332


Declared distribution per common unit


$

0.59500


Distributions declared by Western Gas Equity Partners, LP


$

130,268


Coverage ratio


1.00

x


 

Western Gas Equity Partners, LP

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)




Three Months Ended
 September 30,


Nine Months Ended
 September 30,

thousands except per-unit amounts


2018


2017


2018


2017

Revenues and other









Service revenues – fee based


$

409,106



$

306,187



$

1,146,099



$

913,436


Service revenues – product based


22,735





67,433




Product sales


75,150



259,141



217,738



690,490


Other


771



9,367



1,213



12,412


Total revenues and other


507,762



574,695



1,432,483



1,616,338


Equity income, net – affiliates


43,110



21,519



102,752



62,708


Operating expenses









Cost of product


105,966



239,223



303,518



631,859


Operation and maintenance


111,359



79,536



300,266



229,444


General and administrative


15,158



12,922



44,853



37,595


Property and other taxes


10,954



11,215



35,090



35,433


Depreciation and amortization


82,553



72,539



238,187



216,272


Impairments


25,317



2,159



152,708



170,079


Total operating expenses


351,307



417,594



1,074,622



1,320,682


Gain (loss) on divestiture and other, net


65



72



351



135,017


Proceeds from business interruption insurance claims








29,882


Operating income (loss)


199,630



178,692



460,964



523,263


Interest income – affiliates


4,225



4,225



12,675



12,675


Interest expense


(48,316)



(36,117)



(133,359)



(108,447)


Other income (expense), net


655



311



2,749



1,029


Income (loss) before income taxes


156,194



147,111



343,029



428,520


Income tax (benefit) expense


1,517



510



3,301



4,905


Net income (loss)


154,677



146,601



339,728



423,615


Net income (loss) attributable to noncontrolling interests


47,203



50,399



63,669



146,529


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


$

107,474



$

96,202



$

276,059



$

277,086


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


$

0.49



$

0.44



$

1.26



$

1.27


Weighted-average common units outstanding – basic and diluted


218,938



218,933



218,935



218,931


 

Western Gas Equity Partners, LP

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)


thousands except number of units


September 30,
 2018


December 31, 2017

Current assets


$

383,883



$

255,210


Note receivable – Anadarko


260,000



260,000


Net property, plant and equipment


6,418,634



5,730,891


Other assets


1,971,040



1,770,210


Total assets


$

9,033,557



$

8,016,311


Current liabilities


$

540,278



$

424,426


Long-term debt


4,566,464



3,492,712


Asset retirement obligations


157,933



143,394


Other liabilities


152,242



10,900


Total liabilities


5,416,917



4,071,432


Equity and partners' capital





Common units (218,937,797 and 218,933,141 units issued and outstanding at September 30, 2018, and December 31, 2017, respectively)


981,408



1,061,125


Noncontrolling interests


2,635,232



2,883,754


Total liabilities, equity and partners' capital


$

9,033,557



$

8,016,311


 

Western Gas Equity Partners, LP

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)




Nine Months Ended
 September 30,

thousands


2018


2017

Cash flows from operating activities





Net income (loss)


$

339,728



$

423,615


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





Depreciation and amortization


238,187



216,272


Impairments


152,708



170,079


(Gain) loss on divestiture and other, net


(351)



(135,017)


Change in other items, net


19,107



(32,480)


Net cash provided by operating activities


$

749,379



$

642,469


Cash flows from investing activities





Capital expenditures


$

(949,022)



$

(419,193)


Contributions in aid of construction costs from affiliates




1,386


Acquisitions from affiliates


(254)



(3,910)


Acquisitions from third parties


(161,858)



(155,298)


Investments in equity affiliates


(67,979)



(384)


Distributions from equity investments in excess of cumulative earnings – affiliates


18,097



16,255


Proceeds from the sale of assets to third parties


332



23,370


Proceeds from property insurance claims




22,977


Net cash used in investing activities


$

(1,160,684)



$

(514,797)


Cash flows from financing activities





Borrowings, net of debt issuance costs


$

2,135,629



$

249,989


Repayments of debt


(1,040,000)




Settlement of the Deferred purchase price obligation – Anadarko




(37,346)


Increase (decrease) in outstanding checks


(2,687)



3,310


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




(183)


Distributions to WGP unitholders


(372,189)



(324,290)


Distributions to Chipeta noncontrolling interest owner


(9,446)



(9,049)


Distributions to noncontrolling interest owners of WES


(287,435)



(262,888)


Net contributions from (distributions to) Anadarko




30


Above-market component of swap agreements with Anadarko


40,722



46,719


Net cash provided by (used in) financing activities


$

464,594



$

(333,708)


Net increase (decrease) in cash and cash equivalents


$

53,289



$

(206,036)


Cash and cash equivalents at beginning of period


79,588



359,072


Cash and cash equivalents at end of period


$

132,877



$

153,036


 

Western Gas Partners (PRNewsFoto/Western Gas Partners, LP) (PRNewsFoto/Western Gas Partners, LP)

 

Western Gas Equity Partners (PRNewsFoto/Western Gas Partners, LP) (PRNewsFoto/Western Gas Partners, LP)

 

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