SOURCE: Western Gas

Western Gas

Western Gas

February 18, 2015 16:00 ET

Western Gas Announces Fourth-Quarter and Full-Year 2014 Results

2015 Outlook to Be Released March 3, 2015

HOUSTON, TX--(Marketwired - Feb 18, 2015) - 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 2014 financial and operating results. WES also announced it would release its 2015 outlook after the market closes on March 3, 2015.

WESTERN GAS PARTNERS, LP

Net income available to limited partners(1) for 2014 totaled $256.5 million, or $2.12 per common unit (diluted), with full-year 2014 Adjusted EBITDA(2) of $646.0 million and full-year 2014 Distributable cash flow(2)of $531.1 million.

Net income available to limited partners(1) for the fourth quarter of 2014 totaled $54.3 million, or $0.42 per common unit (diluted), with fourth-quarter 2014 Adjusted EBITDA(2) of $170.4 million and fourth-quarter 2014 Distributable cash flow(2) of $138.1 million.

WES paid a quarterly distribution of $0.70 per unit for the fourth quarter of 2014. This distribution represented a 4% increase over the prior quarter's distribution and a 17% increase over the fourth-quarter 2013 distribution of $0.60 per unit. The full-year 2014 distribution of $2.65 per unit represented a 16% increase over the full-year 2013 distribution of $2.28 per unit. The fourth-quarter 2014 Coverage ratio(2) of 1.10 times was based on the quarterly distribution of $0.70 per unit and included the 8.6 million common units issued by the Partnership in November 2014, and 37 days of DBM(1) operating results. The Partnership's Coverage ratio(2) for full-year 2014 was 1.20 times.

(1) On November 25, 2014, the Partnership acquired Nuevo Midstream, LLC ("Nuevo"). Following the acquisition, the Partnership changed the name of Nuevo to Delaware Basin Midstream, LLC ("DBM"). Includes operating results attributable to DBM beginning on November 25, 2014.

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

The Class C units issued in connection with the acquisition of DBM received a distribution based on the $0.70 common unit distribution, prorated for the 37-day period the Class C units were outstanding during the fourth quarter of 2014. The Class C unit distribution was paid in the form of additional Class C units(1) and was excluded when determining the cash distribution to WES's common unitholders.

Total throughput attributable to WES for natural gas assets(2) for the fourth quarter of 2014 averaged 3.5 Bcf/d, which was 2% above both the prior quarter and the fourth quarter of 2013. For the full-year 2014, total throughput attributable to WES for natural gas assets(2) averaged 3.5 Bcf/d, which was 9% above the prior-year average. Total throughput for crude/NGL assets for the fourth quarter of 2014 averaged 131 MBbls/d, which was 5% below the prior quarter and 77% above the fourth quarter of 2013. For full-year 2014, total throughput for crude/NGL assets averaged 116 MBbls/d, which was 190% above the prior-year average.

"2014 was another year of top tier operating performance for WES," said Chief Executive Officer Don Sinclair. "With the support of Anadarko, our sponsor, we expect to maintain our track record of delivering steady, predictable growth and can reaffirm our previously stated guidance of no less than 15% distribution growth in 2015 despite a very challenging commodity price environment."

Capital expenditures attributable to WES on a cash basis(2), including equity investments but excluding acquisitions, totaled $179.0 million during the fourth quarter of 2014. Of this amount, maintenance capital expenditures were $12.7 million, or 7% of Adjusted EBITDA(3). For the full-year 2014, capital expenditures attributable to WES on a cash basis(2) totaled $726.0 million, including equity investments but excluding acquisitions. This amount includes maintenance capital expenditures of $45.2 million, or 7% of Adjusted EBITDA(3). Capital expenditures attributable to WES on an accrual basis(2), including equity investments but excluding acquisitions, totaled $204.5 million during the fourth quarter of 2014 and $747.7 million for full-year 2014.

(1) The number of additional Class C units issued in connection with a distribution payable on the Class C units is determined by dividing the corresponding distribution attributable to the Class C units by the volume-weighted-average price of WES's common units for the ten trading days immediately preceding the payment date for the WES common unit distribution, less a 6% discount.

(2) Includes operating results attributable to DBM beginning on November 25, 2014.

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

WESTERN GAS EQUITY PARTNERS, LP

WGP indirectly owns the entire general partner interest in WES, 100% of the incentive distribution rights in WES and 49,296,205 WES common units. Net income available to limited partners(1) for 2014 totaled $222.9 million, or $1.02 per common unit (diluted). Net income available to limited partners(1) for the fourth quarter of 2014 totaled $57.2 million, or $0.26 per common unit (diluted).

WGP paid a quarterly distribution of $0.31250 per unit for the fourth quarter of 2014. This distribution represented a 7% increase over the prior quarter's distribution and a 35% increase over the fourth-quarter 2013 distribution of $0.23125. The full-year 2014 distribution of $1.12500 per unit represented a 37% increase over the full-year 2013 distribution. WGP received distributions from WES of $71.2 million attributable to the fourth quarter and will pay $68.4 million in distributions for the same period.

CONFERENCE CALL TOMORROW AT 11 A.M. CST

WES and WGP will host a joint conference call on Thursday, February 19, 2015, at 11:00 a.m. Central Standard Time (12:00 p.m. Eastern Standard Time) to discuss fourth-quarter and full-year 2014 results. To participate via telephone, please dial 877.621.4819 and enter participant code 54439186. Please call in 10 minutes prior to the scheduled start time. To access the live audio webcast of the conference call and slide presentation, please visit www.westerngas.com. A replay of the call will also be available on the website for approximately two weeks following the conference call.

CONFERENCE CALL ON MARCH 4, 2015 TO DISCUSS 2015 OUTLOOK

WES and WGP will release its full 2015 Outlook after the market closes on Tuesday, March 3, 2015, and will host a joint conference call on Wednesday, March 4, 2015, at 7:00 a.m. Central Standard Time (8:00 a.m. Eastern Standard Time) for discussion. To participate via telephone, please dial 866.825.1709 and enter participant code 24435275. Please call in 10 minutes prior to the scheduled start time. To access the live audio webcast of the conference call and slide presentation, please visit www.westerngas.com. A replay of the call will also be available on the website for approximately two weeks following the conference call.

(1) Includes operating results attributable to DBM beginning on November 25, 2014.

Western Gas Partners, LP ("WES") is a growth-oriented Delaware master limited partnership formed by Anadarko Petroleum Corporation to own, operate, acquire and develop midstream energy assets. With midstream assets located in the Rocky Mountains, the Mid-Continent, North-central Pennsylvania and Texas, WES is engaged in the business of gathering, processing, compressing, treating and transporting natural gas, 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 ability to obtain new sources of natural gas supplies; the effect of fluctuations in commodity prices and the demand for natural gas and related products; the ability to meet projected in-service dates for capital growth projects; construction costs or capital expenditures exceeding estimated or budgeted costs or expenditures; the ability to realize the expected benefits from the Nuevo acquisition; and the other factors described in the "Risk Factors" sections of WES's and WGP's most recent Forms 10-K 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 Partners, LP Reconciliation of GAAP to Non-GAAP Measures

Below are reconciliations of (i) WES's Distributable cash flow (non-GAAP) to net income attributable to Western Gas Partners, LP (GAAP), (ii) Adjusted EBITDA attributable to Western Gas Partners, LP ("Adjusted EBITDA") (non-GAAP) to net income attributable to Western Gas Partners, LP (GAAP) and to net cash provided by operating activities (GAAP), and (iii) Adjusted gross margin attributable to Western Gas Partners, LP ("Adjusted gross margin") (non-GAAP) to operating income (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 and other applicable performance measures, such as operating income or cash flows from operating activities.

Distributable Cash Flow

WES defines Distributable cash flow as Adjusted EBITDA, plus interest income, less net cash paid for interest expense (including amortization of deferred debt issuance costs originally paid in cash, offset by non-cash capitalized interest), maintenance capital expenditures, and income taxes.

           
           
    Three Months Ended
 December 31,
    Year Ended
 December 31,
thousands except Coverage ratio   2014   2013     2014   2013
Reconciliation of Net income attributable to Western Gas Partners, LP to Distributable cash flow and calculation of the Coverage ratio                                
Net income attributable to Western Gas Partners, LP   $ 91,389     $ 85,391     $ 376,533       $ 274,627
Add:                                
  Distributions from equity investees     23,574       6,573       81,022         22,136
  Non-cash equity-based compensation expense     907       912       4,095         3,575
  Income tax (benefit) expense     1,751       (1,837 )     2,027         2,355
  Depreciation, amortization and impairments (1)     52,504       38,724       180,587         143,375
  Other expense (1)     --       175       --         175
Less:                                
  Equity income, net     16,514       11,004       57,836         22,948
  Cash paid for maintenance capital expenditures (1)     12,662       10,255       45,225         29,850
  Capitalized interest (2)     2,485       2,393       9,832         11,945
  Cash paid for (reimbursement of) income taxes     250       552       (90 )       552
  Other income (1) (3)     74       --       325         419
Distributable cash flow   $ 138,140     $ 105,734     $ 531,136       $ 380,529
Distributions declared(4)                                
  Limited partners   $ 89,386             $ 320,862          
  General partner     36,657               121,194          
  Total   $ 126,043             $ 442,056          
Coverage ratio     1.10 x             1.20   x      
                                 
(1) Includes WES's 75% share of depreciation, amortization and impairments; other expense; cash paid for maintenance capital expenditures; and other income attributable to Chipeta.
(2) Includes capitalized interest of $(0.2) million and $1.4 million for the three months and year ended December 31, 2013, respectively, for the construction of the Mont Belvieu JV fractionation trains, reflected as a component of the equity investment balance.
(3) Excludes income of zero and $0.4 million for the three months ended December 31, 2014 and 2013, respectively, and $0.5 million and $1.6 million for the years ended December 31, 2014 and 2013, respectively, related to a component of a gas processing agreement accounted for as a capital lease.
(4) Reflects cash distributions of $0.70 and $2.65 per unit declared for the three months and year ended December 31, 2014, 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 investees, non-cash equity-based compensation expense, interest expense, income tax expense, depreciation, amortization and impairments, and other expense, less income from equity investments, interest income, income tax benefit, and other income.

             
             
    Three Months Ended
 December 31,
    Year Ended
 December 31,
 
thousands   2014     2013     2014     2013  
Reconciliation of Net income attributable to Western Gas Partners, LP to Adjusted EBITDA attributable to Western Gas Partners, LP                        
Net income attributable to Western Gas Partners, LP   $ 91,389     $ 85,391     $ 376,533     $ 274,627  
Add:                                
  Distributions from equity investees     23,574       6,573       81,022       22,136  
  Non-cash equity-based compensation expense     907       912       4,095       3,575  
  Interest expense     21,063       14,314       76,766       51,797  
  Income tax expense     1,751       --       2,255       4,219  
  Depreciation, amortization and impairments (1)     52,504       38,724       180,587       143,375  
  Other expense (1)     --       175       --       175  
Less:                                
  Equity income, net     16,514       11,004       57,836       22,948  
  Interest income - affiliates     4,225       4,225       16,900       16,900  
  Other income (1) (2)     74       --       325       419  
  Income tax benefit     --       1,837       228       1,864  
Adjusted EBITDA attributable to Western Gas Partners, LP   $ 170,375     $ 129,023     $ 645,969     $ 457,773  
                                 
Reconciliation of Adjusted EBITDA attributable to Western Gas Partners, LP to Net cash provided by operating activities                                
Adjusted EBITDA attributable to Western Gas Partners, LP   $ 170,375     $ 129,023     $ 645,969     $ 457,773  
Adjusted EBITDA attributable to noncontrolling interest     3,661       3,986       16,583       13,348  
  Interest income (expense), net     (16,838 )     (10,089 )     (59,866 )     (34,897 )
  Non-cash equity-based compensation expense     (197 )     45       (175 )     (54 )
  Debt-related amortization and other items, net     691       693       2,736       2,449  
  Current income tax benefit (expense)     190       4,512       556       29,536  
  Other income (expense), net (2)     76       (171 )     336       253  
  Distributions from equity investments in excess of cumulative earnings     (3,668 )     (4,438 )     (18,055 )     (4,438 )
  Changes in operating working capital:                                
    Accounts receivable, net     37,191       (6,632 )     (4,217 )     (34,019 )
    Accounts and natural gas imbalance payables and accrued liabilities, net     (62,266 )     15,134       (52,530 )     21,952  
    Other     1,825       (1,179 )     3,470       (3,702 )
Net cash provided by operating activities   $ 131,040     $ 130,884     $ 534,807     $ 448,201  
Cash flow information of Western Gas Partners, LP                                
Net cash provided by operating activities                   $ 534,807     $ 448,201  
Net cash used in investing activities                   $ (2,621,559 )   $ (1,652,995 )
Net cash provided by financing activities                   $ 2,053,078     $ 885,541  
                                 
(1) Includes WES's 75% share of depreciation, amortization and impairments; other expense; and other income attributable to Chipeta.
(2) Excludes income of zero and $0.4 million for the three months ended December 31, 2014 and 2013, respectively, and $0.5 million and $1.6 million for the years ended December 31, 2014 and 2013, respectively, related to a component of a gas processing agreement accounted for as a capital lease.

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 less cost of product, plus distributions from equity investees 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   2014   2013   2014   2013  
Reconciliation of Adjusted gross margin attributable to Western Gas Partners, LP to Operating income                          
    Adjusted gross margin attributable to Western Gas Partners, LP for natural gas assets   $ 215,349   $ 182,097   $ 822,932   $ 654,924  
    Adjusted gross margin for crude/NGL assets     22,022     4,278     73,714     15,274  
Adjusted gross margin attributable to Western Gas Partners, LP   $ 237,371   $ 186,375   $ 896,646   $ 670,198  
Adjusted gross margin attributable to noncontrolling interest   $ 4,572   $ 5,065   $ 20,183   $ 17,416  
Equity income, net     16,514     11,004     57,836     22,948  
Less:                          
    Distributions from equity investees     23,574     6,573     81,022     22,136  
    Operation and maintenance     54,241     47,492     199,305     168,657  
    General and administrative     9,938     7,523     34,242     29,751  
    Property and other taxes     4,635     4,724     25,353     23,244  
    Depreciation, amortization and impairments     53,147     39,365     183,156     145,916  
Operating income   $ 112,922   $ 96,767   $ 451,587   $ 320,858  
                           
 
Western Gas Partners, LP
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
 
    Three Months Ended
 December 31,
    Year Ended
 December 31,
 
thousands except per-unit amounts   2014     2013     2014     2013  
Revenues                                
Gathering, processing and transportation of natural gas and natural gas liquids   $ 176,396     $ 139,071     $ 647,451     $ 482,542  
Natural gas, natural gas liquids and condensate sales     159,668       138,628       612,854       541,244  
Other     1,833       1,394       13,458       5,977  
Total revenues     337,897       279,093       1,273,763       1,029,763  
Equity income, net     16,514       11,004       57,836       22,948  
Operating expenses                                
Cost of product     119,528       94,226       437,956       364,285  
Operation and maintenance     54,241       47,492       199,305       168,657  
General and administrative     9,938       7,523       34,242       29,751  
Property and other taxes     4,635       4,724       25,353       23,244  
Depreciation, amortization and impairments     53,147       39,365       183,156       145,916  
Total operating expenses     241,489       193,330       880,012       731,853  
Operating income     112,922       96,767       451,587       320,858  
Interest income - affiliates     4,225       4,225       16,900       16,900  
Interest expense     (21,063 )     (14,314 )     (76,766 )     (51,797 )
Other income (expense), net     76       225       864       1,837  
Income before income taxes     96,160       86,903       392,585       287,798  
Income tax (benefit) expense     1,751       (1,837 )     2,027       2,355  
Net income     94,409       88,740       390,558       285,443  
Net income attributable to noncontrolling interest     3,020       3,349       14,025       10,816  
Net income attributable to Western Gas Partners, LP   $ 91,389     $ 85,391     $ 376,533     $ 274,627  
Limited partners' interest in net income:                                
Net income attributable to Western Gas Partners, LP   $ 91,389     $ 85,391     $ 376,533     $ 274,627  
Pre-acquisition net (income) loss allocated to Anadarko     --       488       956       (4,128 )
General partner interest in net (income) loss     (37,041 )     (21,900 )     (120,980 )     (69,633 )
Limited partners' interest in net income   $ 54,348     $ 63,979     $ 256,509     $ 200,866  
Net income per common unit - basic   $ 0.42     $ 0.56     $ 2.13     $ 1.83  
Net income per common unit - diluted     0.42       0.56       2.12       1.83  
Weighted-average common units outstanding - basic     124,263       113,825       119,822       109,872  
Weighted-average common units outstanding - diluted     128,652       113,825       120,928       109,872  
                                 
 
Western Gas Partners, LP
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
 
    December 31,
thousands except number of units   2014   2013
Current assets   $ 175,235   $ 194,810
Note receivable - Anadarko     260,000     260,000
Net property, plant and equipment     4,384,371     3,383,255
Other assets     1,932,025     779,743
Total assets   $ 6,751,631   $ 4,617,808
Current liabilities   $ 202,571   $ 190,460
Long-term debt     2,422,954     1,418,169
Asset retirement obligations and other     114,240     117,143
Total liabilities   $ 2,739,765   $ 1,725,772
Equity and partners' capital            
Common units (127,695,130 and 117,322,812 units issued and outstanding at December 31, 2014 and 2013, respectively)   $ 3,119,714   $ 2,431,193
Class C units (10,913,853 and zero units issued and outstanding at December 31, 2014 and 2013, respectively)     716,957     --
General partner units (2,583,068 and 2,394,345 units issued and outstanding at December 31, 2014 and 2013, respectively)     105,725     78,157
Net investment by Anadarko     --     312,092
Noncontrolling interest     69,470     70,594
Total liabilities, equity and partners' capital   $ 6,751,631   $ 4,617,808
             
 
Western Gas Partners, LP
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 
    Year Ended
 December 31,
thousands   2014     2013  
Cash flows from operating activities                
Net income   $ 390,558     $ 285,443  
Adjustments to reconcile net income to net cash provided by operating activities and changes in working capital:                
  Depreciation, amortization and impairments     183,156       145,916  
  Change in other items, net     (38,907 )     16,842  
Net cash provided by operating activities   $ 534,807     $ 448,201  
Cash flows from investing activities                
Capital expenditures   $ (673,004 )   $ (646,471 )
Contributions in aid of construction costs from affiliates     183       617  
Acquisitions from affiliates     (379,193 )     (476,711 )
Acquisitions from third parties     (1,523,327 )     (240,274 )
Investments in equity affiliates     (64,278 )     (294,693 )
Distributions from equity investments in excess of cumulative earnings     18,055       4,438  
Proceeds from the sale of assets to affiliates     --       85  
Proceeds from the sale of assets to third parties     5       14  
Net cash used in investing activities   $ (2,621,559 )   $ (1,652,995 )
Cash flows from financing activities                
Borrowings, net of debt issuance costs   $ 1,646,878     $ 957,503  
Repayments of debt     (650,000 )     (710,000 )
Increase (decrease) in outstanding checks     1,693       (1,763 )
Proceeds from the issuance of common and general partner units, net of offering expenses     704,489       740,825  
Proceeds from the issuance of Class C units     750,000       --  
Distributions to unitholders     (408,621 )     (299,101 )
Contributions from noncontrolling interest owner     --       2,247  
Distributions to noncontrolling interest owner     (15,149 )     (13,127 )
Net contributions from Anadarko     23,788       208,957  
Net cash provided by financing activities   $ 2,053,078     $ 885,541  
Net increase (decrease) in cash and cash equivalents   $ (33,674 )   $ (319,253 )
Cash and cash equivalents at beginning of period     100,728       419,981  
Cash and cash equivalents at end of period   $ 67,054     $ 100,728  
                 
 
Western Gas Partners, LP
OPERATING STATISTICS
(Unaudited)
 
    Three Months Ended
 December 31,
  Year Ended
 December 31,
MMcf/d except throughput measured in barrels and per-unit amounts   2014   2013   2014   2013
                         
Throughput for natural gas assets                        
  Gathering, treating and transportation (1)     1,537     1,553     1,562     1,404
  Processing (1)     1,991     1,892     1,925     1,758
  Equity investment (2)     170     193     171     206
    Total throughput for natural gas assets     3,698     3,638     3,658     3,368
  Throughput attributable to noncontrolling interest for natural gas assets     153     172     165     168
  Total throughput attributable to Western Gas Partners, LP for natural gas assets (3)     3,545     3,466     3,493     3,200
  Total throughput (MBbls/d) for crude/NGL assets (4)     131     74     116     40
Adjusted gross margin per Mcf attributable to Western Gas Partners, LP for natural gas assets (5)   $ 0.66   $ 0.57   $ 0.65   $ 0.56
Adjusted gross margin per Bbl for crude/NGL assets (6)   $ 1.83   $ 0.62   $ 1.75   $ 1.05
                         
(1) The combination of WES's Wattenberg and Platte Valley systems in 2014 into the entity now referred to as the "DJ Basin complex" (which also includes the Lancaster plant) resulted in the following: (i) the Wattenberg system volumes previously reported as "Gathering, treating and transportation" are now reported as "Processing" for all periods presented, and (ii) beginning in 2014, volumes both gathered and processed by the two systems are no longer separately reported.
(2) Represents WES's 14.81% share of average Fort Union and 22% share of average Rendezvous throughput. Excludes equity investment throughput measured in barrels (captured in "Total throughput (MBbls/d) for crude/NGL assets" as noted below).
(3) Includes affiliate, third-party and equity investment throughput (as equity investment throughput is defined in the above footnote), excluding the noncontrolling interest owner's proportionate share of throughput.
(4) Represents total throughput measured in barrels, consisting of throughput from WES's Chipeta NGL pipeline, 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.
(5) Average for period. Calculated as Adjusted gross margin attributable to Western Gas Partners, LP for natural gas assets (total revenues for natural gas assets 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 owners' proportionate share of revenue and cost of product) divided by total throughput (MMcf/d) attributable to Western Gas Partners, LP for natural gas assets.
(6) Average for period. Calculated as Adjusted gross margin for crude/NGL assets (total revenues for crude/NGL assets less 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)
 
    Three Months Ended
thousands except per-unit amount and Coverage ratio   December 31, 2014
Distributions declared by Western Gas Partners, LP:        
  General partner interest   $ 2,499  
  Incentive distribution rights     34,158  
  Common units held by WGP     34,507  
Less:        
  Public company general and administrative expense     2,482  
Cash available for distribution   $ 68,682  
Declared distribution per common unit   $ 0.31250  
Distributions declared by Western Gas Equity Partners, LP   $ 68,409  
Coverage ratio     1.00 x
         
 
Western Gas Equity Partners, LP
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
 
    Three Months Ended
 December 31,
    Year Ended
 December 31,
 
thousands except per-unit amounts   2014     2013     2014     2013  
Revenues                                
Gathering, processing and transportation of natural gas and natural gas liquids   $ 176,396     $ 139,071     $ 647,451     $ 482,542  
Natural gas, natural gas liquids and condensate sales     159,668       138,628       612,854       541,244  
Other     1,833       1,394       13,458       5,977  
Total revenues     337,897       279,093       1,273,763       1,029,763  
Equity income, net     16,514       11,004       57,836       22,948  
Operating expenses                                
Cost of product     119,528       94,226       437,956       364,285  
Operation and maintenance     54,241       47,492       199,305       168,657  
General and administrative     10,649       8,364       37,458       33,464  
Property and other taxes     4,669       4,724       25,387       23,244  
Depreciation, amortization and impairments     53,147       39,365       183,156       145,916  
Total operating expenses     242,234       194,171       883,262       735,566  
Operating income     112,177       95,926       448,337       317,145  
Interest income - affiliates     4,225       4,225       16,900       16,900  
Interest expense     (21,066 )     (14,314 )     (76,769 )     (51,797 )
Other income (expense), net     89       249       938       1,935  
Income before income taxes     95,425       86,086       389,406       284,183  
Income tax (benefit) expense     1,751       (1,887 )     2,027       2,305  
Net income     93,674       87,973       387,379       281,878  
Net income attributable to noncontrolling interests     36,510       39,611       165,468       122,173  
Net income attributable to Western Gas Equity Partners, LP   $ 57,164     $ 48,362     $ 221,911     $ 159,705  
Limited partners' interest in net income:                                
Net income attributable to Western Gas Equity Partners, LP   $ 57,164     $ 48,362     $ 221,911     $ 159,705  
Results attributable to pre-IPO period     --       (49 )     --       (49 )
Pre-acquisition net (income) loss allocated to Anadarko     --       488       956       (4,128 )
Limited partners' interest in net income   $ 57,164     $ 48,801     $ 222,867     $ 155,528  
Net income per common unit - basic and diluted   $ 0.26     $ 0.22     $ 1.02     $ 0.71  
Weighted-average number of common units outstanding - basic and diluted     218,910       218,896       218,910       218,896  
                                 
 
Western Gas Equity Partners, LP
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
 
    December 31,
thousands except number of units   2014   2013
Current assets   $ 175,944   $ 207,827
Note receivable - Anadarko     260,000     260,000
Net property, plant and equipment     4,384,371     3,383,255
Other assets     1,932,025     779,743
Total assets   $ 6,752,340   $ 4,630,825
Current liabilities   $ 203,796   $ 191,483
Long-term debt     2,422,954     1,418,169
Asset retirement obligations and other     114,240     117,143
Total liabilities   $ 2,740,990   $ 1,726,795
Equity and partners' capital            
Common units (218,909,977 and 218,895,515 units issued and outstanding at December 31, 2014 and 2013, respectively)   $ 1,260,195   $ 905,082
Net investment by Anadarko     --     312,092
Noncontrolling interests     2,751,155     1,686,856
Total liabilities, equity and partners' capital   $ 6,752,340   $ 4,630,825
             
 
Western Gas Equity Partners, LP
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 
    Year Ended
 December 31,
 
thousands   2014     2013  
Cash flows from operating activities                
Net income   $ 387,379     $ 281,878  
Adjustments to reconcile net income to net cash provided by operating activities and changes in working capital:                
  Depreciation, amortization and impairments     183,156       145,916  
  Change in other items, net     (39,561 )     16,986  
Net cash provided by operating activities   $ 530,974     $ 444,780  
Cash flows from investing activities                
Capital expenditures   $ (673,004 )   $ (646,471 )
Contributions in aid of construction costs from affiliates     183       617  
Acquisitions from affiliates     (379,193 )     (476,711 )
Acquisitions from third parties     (1,523,327 )     (240,274 )
Investments in equity affiliates     (64,278 )     (294,693 )
Distributions from equity investments in excess of cumulative earnings     18,055       4,438  
Proceeds from the sale of assets to affiliates     --       85  
Proceeds from the sale of assets to third parties     5       14  
Net cash used in investing activities   $ (2,621,559 )   $ (1,652,995 )
Cash flows from financing activities                
Borrowings, net of debt issuance costs   $ 1,648,028     $ 957,503  
Repayments of debt     (650,000 )     (710,000 )
Increase (decrease) in outstanding checks     1,693       (1,763 )
Offering expenses from the issuance of WGP common units     --       (2,367 )
Proceeds from the issuance of WES common units, net of offering expenses     691,178       725,050  
Proceeds from the issuance of WES Class C units     750,000       --  
Distributions to WGP unitholders     (228,481 )     (137,000 )
Contributions from Chipeta noncontrolling interest owner     --       2,247  
Distributions to Chipeta noncontrolling interest owner     (15,149 )     (13,127 )
Distributions to noncontrolling interest owners of WES     (176,344 )     (130,706 )
Net contributions from Anadarko     23,788       208,907  
Net cash provided by financing activities   $ 2,044,713     $ 898,744  
Net increase (decrease) in cash and cash equivalents   $ (45,872 )   $ (309,471 )
Cash and cash equivalents at beginning of period     113,085       422,556  
Cash and cash equivalents at end of period   $ 67,213     $ 113,085  
                 
                 

Contact Information

  • WESTERN GAS CONTACT
    Benjamin Fink, CFA
    SVP, Chief Financial Officer and Treasurer
    832.636.6010
    Email Contact