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(Graphic: Business Wire)

Stocks in this article: WES WGP

      Three Months Ended   Year Ended
December 31, December 31,
thousands 2012   2011 2012   2011

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

Net income (loss) attributable to Western Gas Partners, LP $ (16,971) $ 40,014 $ 106,986 $ 174,243
Add:
Distributions from equity investees 5,057 4,011 20,660 15,999
Non-cash equity-based compensation expense (1) 57,101 7,519 73,508 13,754
Interest expense 11,942 8,607 42,060 30,345
Income tax expense 559 3,454 1,258 19,018
Depreciation, amortization and impairments (2) 35,418 32,869 114,932 109,151
Other expense (2) 1,665 3,683
Less:
Equity income, net 5,359 3,579 16,111 11,261
Interest income, net – affiliates 4,225 9,568 16,900 28,560
  Other income (2) (3)   181   288   368   2,049
Adjusted EBITDA $ 83,341 $ 83,039 $ 327,690 $ 324,323
 
Reconciliation of Adjusted EBITDA to
Net cash provided by operating activities
Adjusted EBITDA attributable to Western Gas Partners, LP $ 83,341 $ 83,039 $ 327,690 $ 324,323
Adjusted EBITDA attributable to noncontrolling interests 3,505 5,057 17,214 16,850
Interest income (expense), net (7,717) 961 (25,160) (1,785)
Non-cash equity based compensation expense (1) (56,153) (6,723) (69,791) (10,264)
Debt-related amortization and other items, net 591 510 2,319 3,110
Current income tax expense (368) (5,532) (553) (16,414)
Other income (expense), net (3) 183 291 (1,292) (1,628)
Distributions from equity investees less than
(in excess of) equity income, net 302 (432) (4,549) (4,738)
Changes in operating working capital:
Accounts receivable and natural gas imbalance receivable (16,524) 6,003 (14,219) (13,260)
Accounts payable, accrued liabilities and
natural gas imbalance payable (60,110) 1,387 11,622 29,625
    Other   1,290   (791)   3,392   1,352
Net cash provided by (used in) operating activities $ (51,660) $ 83,770 $ 246,673 $ 327,171
 
Cash flow information of Western Gas Partners, LP
Net cash provided by operating activities $ 246,673 $ 327,171
Net cash used in investing activities $ (1,071,127) $ (472,951)
Net cash provided by financing activities         $ 1,017,876 $ 345,265

(1) Includes $56.2 million and $69.8 million of equity-based compensation associated with the Western Gas Holdings, LLC Equity Incentive Plan, as amended and restated, paid and contributed by Anadarko during the three months and year ended December 31, 2012, respectively.

(2) Includes the Partnership’s 51% share prior to August 1, 2012, and 75% share after August 1, 2012, of depreciation, amortization and impairments; other expense; and other income attributable to Chipeta.

(3) Excludes income of $0.4 million and $0.6 million for the three months ended December 31, 2012 and 2011, respectively, and $1.6 million for each of the years ended December 31, 2012 and 2011, related to a component of a gas processing agreement accounted for as a capital lease.

Western Gas Partners, LP
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
         
Three Months Ended Year Ended
December 31, December 31,
thousands except per-unit amounts   2012   2011   2012   2011
 
Revenues
Gathering, processing and transportation of
natural gas and natural gas liquids $ 85,334 $ 78,897 $ 321,183 $ 301,329
Natural gas, natural gas liquids and
condensate sales 121,521 130,583 508,339 502,383
Equity income and other, net     5,982     5,717     19,918     19,553
Total revenues     212,837     215,197     849,440     823,265
Operating expenses
Cost of product 81,360 86,606 336,079 327,371
Operation and maintenance 34,303 31,245 131,344 119,104
General and administrative 62,833 14,484 97,066 39,114
Property and other taxes 4,690 3,277 19,688 16,579
Depreciation, amortization and impairments     35,991     33,491     117,261     111,904
Total operating expenses     219,177     169,103     701,438     614,072
Operating income (loss) (6,340) 46,094 148,002 209,193
Interest income, net – affiliates 4,225 9,568 16,900 28,560
Interest expense (11,942) (8,607) (42,060) (30,345)
Other income (expense), net     579     851     292     (44)
Income (loss) before income taxes (13,478) 47,906 123,134 207,364
Income tax expense     559     3,454     1,258     19,018
Net income (loss) (14,037) 44,452 121,876 188,346
Net income attributable to noncontrolling interests     2,934     4,438     14,890     14,103
Net income (loss) attributable to
Western Gas Partners, LP $ (16,971) $ 40,014 $ 106,986 $ 174,243
Limited partners' interest in net income (loss):
Net income (loss) attributable to
Western Gas Partners, LP $ (16,971) $ 40,014 $ 106,986 $ 174,243
Pre-acquisition net (income) loss allocated to Anadarko (5,587) (34,084)
General partner interest in net (income) loss     (9,581)     (2,915)     (28,089)     (8,599)
Limited partners' interest in net income (loss) $ (26,552) $ 31,512 $ 78,897 $ 131,560
 
Net income (loss) per unit – basic and diluted
Common units $ (0.27) $ 0.35 $ 0.84 $ 1.64
Subordinated units (1) $ $ $ $ 1.28
Weighted average units outstanding – basic and diluted
Common units 97,832 90,141 93,936 67,333
  Subordinated units (1)                 16,431

(1) All subordinated units were converted to common units on a one-for-one basis on August 15, 2011. For purposes of calculating net income per common and subordinated unit, the conversion of the subordinated units is deemed to have occurred on July 1, 2011.

Western Gas Partners, LP
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
       
December 31, December 31,
thousands except number of units   2012   2011
 
Current assets $ 465,333 $ 256,448
Note receivable – Anadarko 260,000 260,000
Net property, plant and equipment 2,473,375 2,052,224
Other assets     277,354     268,954
Total assets   $ 3,476,062   $ 2,837,626
 
Current liabilities $ 157,258 $ 76,596
Long-term debt 1,168,278 669,178
Asset retirement obligations and other     70,050     174,546
Total liabilities   $ 1,395,586   $ 920,320
 
Equity and partners’ capital

Common units (104,660,553 and 90,140,999 units issued and outstanding atDecember 31, 2012 and 2011, respectively)

$ 1,957,066 $ 1,495,253

General partner units (2,135,930 and 1,839,613 units issued and outstanding atDecember 31, 2012 and 2011, respectively)

52,752 31,729
Net investment by Anadarko 269,600
Noncontrolling interests     70,658     120,724
Total liabilities, equity and partners' capital   $ 3,476,062   $ 2,837,626

Western Gas Partners, LP
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
     
Year Ended
December 31,
thousands   2012     2011
 
Cash flows from operating activities
Net income $ 121,876 $ 188,346
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and impairments 117,261 111,904
  Change in other items, net   7,536     26,921
Net cash provided by operating activities $ 246,673   $ 327,171
 
Cash flows from investing activities
Capital expenditures $ (459,306) $ (142,946)
Acquisitions from affiliates (611,719) (28,837)
Acquisitions from third parties (301,957)
Investments in equity affiliates (862) (93)
Proceeds from sale of assets to affiliates 760 382
Proceeds from sale of assets to third parties       500
Net cash used in investing activities $ (1,071,127)   $ (472,951)
 
Cash flows from financing activities
Borrowings, net of debt issuance costs $ 1,041,648 $ 1,055,939
Repayments of debt (549,000) (869,000)

Proceeds from issuance of common and general partner units,net of offering expenses

625,877 335,317
Distributions to unitholders (197,850) (140,118)
Contributions from noncontrolling interest owners 29,108 33,637
Distributions to noncontrolling interest owners (17,303) (17,478)
Net contributions from (distributions to) Anadarko   85,396     (53,032)
Net cash provided by financing activities $ 1,017,876   $ 345,265
 
Net increase (decrease) in cash and cash equivalents $ 193,422 $ 199,485
Cash and cash equivalents at beginning of period   226,559     27,074
Cash and cash equivalents at end of period $ 419,981   $ 226,559

Western Gas Partners, LP
OPERATING STATISTICS
(Unaudited)
           
Three Months Ended Year Ended
December 31, December 31,
MMcf/d except per-unit amounts 2012   2011   2012   2011
 
Throughput
Gathering, treating and transportation (1) 1,187 1,304 1,238 1,321
Processing (2) 1,201 1,025 1,187 962
  Equity investment (3)   232     218     235     198
    Total throughput (4)   2,620     2,547     2,660     2,481
Throughput attributable to noncontrolling interests   151     255     228     242
   

Total throughput attributable to Western Gas Partners, LP

  2,469     2,292     2,432     2,239

Gross margin per Mcf attributable to Western Gas Partners, LP (5)

$ 0.56   $ 0.58   $ 0.55   $ 0.58

(1) Excludes average NGL pipeline volumes of 24 MBbls/d and 26 MBbls/d for the three months ended December 31, 2012 and 2011, respectively, and 25 MBbls/d and 24 MBbls/d for the years ended December 31, 2012 and 2011, respectively. Includes 100% of Wattenberg system volumes for all periods presented.

(2) Consists of 100% of Chipeta and Hilight system volumes, 100% of the Granger and Red Desert complex volumes, 50% of Newcastle system volumes, and throughput beginning March 2011 attributable to the Platte Valley system.

(3) Represents our 14.81% share of Fort Union and 22% share of Rendezvous gross volumes, and excludes our 10% share of average White Cliffs pipeline volumes consisting of 7 MBbls/d and 4 MBbls/d for the three months ended December 31, 2012 and 2011, respectively, and 6 MBbls/d and 4 MBbls/d for the years ended December 31, 2012 and 2011, respectively.

(4) Includes affiliate, third-party and equity-investment volumes.

(5) Average for period. Calculated as gross margin, excluding the noncontrolling interest owners’ proportionate share of revenues and cost of product, divided by total throughput attributable to the Partnership (excluding throughput measured in barrels). Calculation includes gross margin attributable to our NGL pipelines and income attributable to our investments in Fort Union, White Cliffs and Rendezvous and volumes attributable to our investments in Fort Union and Rendezvous.

Western Gas Equity Partners, LP
CALCULATION OF CASH AVAILABLE FOR DISTRIBUTION
(Unaudited)
 
Three Months Ended
thousands except per-unit amount December 31, 2012
Distributions declared by Western Gas Partners, LP:
General partner interest $ 1,313
Incentive distribution rights 9,921
Common units held by WGP 25,634
Less:
Public company general and administrative expense 516
Distributions received attributable to the pre-IPO period and other   28,500
Cash available for distribution $ 7,852
       
Declared distribution per common unit (1) $ 0.03587
       
Distributions declared by Western Gas Equity Partners, LP $ 7,852

(1) Represents a prorated quarterly distribution of $0.165.

Western Gas Equity Partners, LP
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
         
Three Months Ended Year Ended
December 31, December 31,
thousands except per-unit amounts   2012   2011   2012   2011
 
Revenues

Gathering, processing and transportation of natural gas andnatural gas liquids

$ 85,334 $ 78,897 $ 321,183 $ 301,329

Natural gas, natural gas liquidsand condensate sales

 

121,521 130,583 508,339 502,383
Equity income and other, net     5,982     5,717     19,918     19,553
Total revenues    

212,837

    215,197     849,440     823,265
Operating expenses
Cost of product 81,360 86,606 336,079 327,371
Operation and maintenance 34,303 31,245 131,344 119,104
General and administrative 63,349 14,484 97,582 39,114
Property and other taxes 4,690 3,277 19,688 16,579
Depreciation, amortization and impairments     35,991     33,491     117,261     111,904
Total operating expenses     219,693     169,103     701,954     614,072
Operating income (loss) (6,856) 46,094 147,486 209,193
Interest income, net – affiliates 4,225 9,568 16,900 28,560
Interest expense (11,942) (8,607) (42,060) (30,345)
Other income (expense), net     579     851     292     (44)
Income (loss) before income taxes (13,994) 47,906 122,618 207,364
Income tax (benefit) expense     (450)     9,664     29,452     45,664
Net income (loss) (13,544) 38,242 93,166 161,700
Net income (loss) attributable to noncontrolling interests     (12,077)     22,041     59,181     86,057

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

$ (1,467) $ 16,201 $ 33,985 $ 75,643
Limited partners' interest in net income (loss): (1)

Net income (loss) attributable toWestern Gas Equity Partners, LP

$ (1,467) $ 33,985
Results attributable to the pre-IPO period (2)     (8,347)           (43,799)      
Limited partners' interest in net income (loss) $ (9,814) $ (9,814)
 
Net income (loss) per common unit – basic and diluted (1) $ (0.04) $ (0.04)
 
 
Weighted average number of
  common units outstanding – basic and diluted (1)     218,896           218,896      

(1) Amounts not applicable prior to WGP’s IPO on December 12, 2012.

(2) Includes financial results prior to WGP’s IPO on December 12, 2012.

Western Gas Equity Partners, LP
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
       
December 31, December 31,
thousands except number of units   2012   2011
 
Current assets $ 466,225 $ 256,448
Note receivable – Anadarko 260,000 260,000
Net property, plant and equipment 2,473,375 2,052,224
Other assets     277,354     268,954
Total assets   $ 3,476,954   $ 2,837,626
 
Current liabilities $ 158,207 $ 112,222
Long-term debt 1,168,278 669,178
Asset retirement obligations and other     70,050     589,272
Total liabilities   $ 1,396,535   $ 1,370,672
 
Equity and partners’ capital
Common units (218,895,515 issued and outstanding at December 31, 2012) $ 912,376 $
Net investment by Anadarko 528,873
Noncontrolling interests     1,168,043     938,081
Total liabilities, equity and partners' capital   $ 3,476,954   $ 2,837,626

Western Gas Equity Partners, LP
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
     
Year Ended
December 31,
thousands   2012     2011
 
Cash flows from operating activities
Net income $ 93,166 $ 161,700
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and impairments 117,261 111,904
  Change in other items, net   (24,320)     (382)
Net cash provided by operating activities $ 186,107   $ 273,222
 
Cash flows from investing activities
Capital expenditures $ (459,306) $ (142,946)
Acquisitions from affiliates (611,719) (28,837)
Acquisitions from third parties (301,957)
Investments in equity affiliates (862) (93)
Other   760     882
Net cash used in investing activities $ (1,071,127)   $ (472,951)
 
Cash flows from financing activities
Borrowings, net of debt issuance costs $ 1,041,648 $ 1,055,939
Repayments of debt (549,000) (869,000)
Proceeds from issuance of WES common units, net of offering expenses 211,932 328,345
Proceeds from issuance of WGP common units, net of offering expenses 410,579
Contributions received from Chipeta noncontrolling interest owners (including Anadarko) 29,108 33,637
Distributions to Chipeta noncontrolling interest owners (including Anadarko) (17,303) (17,478)
Distributions to WES noncontrolling interest owners (99,570) (72,079)
Net contributions from (distributions to) Anadarko   53,623     (60,150)
Net cash provided by financing activities $ 1,081,017   $ 399,214
 
Net increase (decrease) in cash and cash equivalents $ 195,997 $ 199,485
Cash and cash equivalents at beginning of period   226,559     27,074
Cash and cash equivalents at end of period $ 422,556   $ 226,559

(1) 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.

Photos/Multimedia Gallery Available: http://www.businesswire.com/multimedia/home/20130227006600/en/

Copyright Business Wire 2010
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