þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 26-1075808 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
1201 Lake Robbins Drive The Woodlands, Texas | 77380 | |
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer þ | Accelerated filer o | Non-accelerated filer o | Smaller reporting company o | |||
(Do not check if smaller reporting company) |
PART I | PAGE | ||
Item 1. | |||
Item 2. | |||
Item 3. | |||
Item 4. | |||
PART II | |||
Item 1. | |||
Item 1A. | |||
Item 6. |
Three Months Ended March 31, | ||||||||
thousands except per-unit amounts | 2014 | 2013 (1) | ||||||
Revenues – affiliates | ||||||||
Gathering, processing and transportation of natural gas and natural gas liquids | $ | 85,161 | $ | 65,899 | ||||
Natural gas, natural gas liquids and condensate sales | 120,400 | 111,670 | ||||||
Other, net | 729 | — | ||||||
Total revenues – affiliates | 206,290 | 177,569 | ||||||
Revenues – third parties | ||||||||
Gathering, processing and transportation of natural gas and natural gas liquids | 56,288 | 36,991 | ||||||
Natural gas, natural gas liquids and condensate sales | 16,038 | 10,059 | ||||||
Other, net | 841 | 1,147 | ||||||
Total revenues – third parties | 73,167 | 48,197 | ||||||
Total revenues | 279,457 | 225,766 | ||||||
Equity income, net (2) | 9,251 | 3,968 | ||||||
Operating expenses | ||||||||
Cost of product (3) | 91,950 | 83,083 | ||||||
Operation and maintenance (3) | 40,532 | 36,739 | ||||||
General and administrative (3) | 8,415 | 7,664 | ||||||
Property and other taxes | 7,041 | 5,785 | ||||||
Depreciation, amortization and impairments | 40,612 | 32,440 | ||||||
Total operating expenses | 188,550 | 165,711 | ||||||
Operating income | 100,158 | 64,023 | ||||||
Interest income, net – affiliates | 4,225 | 4,225 | ||||||
Interest expense | (13,961 | ) | (11,811 | ) | ||||
Other income, net | 477 | 674 | ||||||
Income before income taxes | 90,899 | 57,111 | ||||||
Income tax (benefit) expense | (228 | ) | 4,166 | |||||
Net income | 91,127 | 52,945 | ||||||
Net income attributable to noncontrolling interest | 3,692 | 2,231 | ||||||
Net income attributable to Western Gas Partners, LP | $ | 87,435 | $ | 50,714 | ||||
Limited partners’ interest in net income: | ||||||||
Net income attributable to Western Gas Partners, LP | $ | 87,435 | $ | 50,714 | ||||
Pre-acquisition net (income) loss allocated to Anadarko | 956 | (5,458 | ) | |||||
General partner interest in net (income) loss (4) | (24,834 | ) | (12,886 | ) | ||||
Limited partners’ interest in net income (4) | $ | 63,557 | $ | 32,370 | ||||
Net income per common unit – basic and diluted | $ | 0.54 | $ | 0.31 | ||||
Weighted average common units outstanding – basic and diluted | 117,716 | 104,815 |
(1) | Financial information has been recast to include the financial position and results attributable to the TEFR Interests. See Note 1 and Note 2. |
(2) | Income earned from equity investments is classified as affiliate. See Note 1. |
(3) | Cost of product includes product purchases from Anadarko (as defined in Note 1) of $16.6 million and $31.9 million for the three months ended March 31, 2014 and 2013, respectively. Operation and maintenance includes charges from Anadarko of $11.1 million and $13.4 million for the three months ended March 31, 2014 and 2013, respectively. General and administrative includes charges from Anadarko of $6.8 million and $5.9 million for the three months ended March 31, 2014 and 2013, respectively. See Note 5. |
(4) | Represents net income earned on and subsequent to the date of acquisition of the Partnership assets (as defined in Note 1). See Note 4. |
thousands except number of units | March 31, 2014 | December 31, 2013 (1) | ||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 83,091 | $ | 100,728 | ||||
Accounts receivable, net (2) | 100,621 | 84,060 | ||||||
Other current assets (3) | 7,432 | 10,022 | ||||||
Total current assets | 191,144 | 194,810 | ||||||
Note receivable – Anadarko | 260,000 | 260,000 | ||||||
Property, plant and equipment | ||||||||
Cost | 4,414,168 | 4,239,100 | ||||||
Less accumulated depreciation | 894,690 | 855,845 | ||||||
Net property, plant and equipment | 3,519,478 | 3,383,255 | ||||||
Goodwill | 105,336 | 105,336 | ||||||
Other intangible assets | 53,258 | 53,606 | ||||||
Equity investments | 613,207 | 593,400 | ||||||
Other assets | 34,684 | 27,401 | ||||||
Total assets | $ | 4,777,107 | $ | 4,617,808 | ||||
LIABILITIES, EQUITY AND PARTNERS’ CAPITAL | ||||||||
Current liabilities | ||||||||
Accounts and natural gas imbalance payables (4) | $ | 30,219 | $ | 39,589 | ||||
Accrued ad valorem taxes | 16,987 | 13,860 | ||||||
Income taxes payable | 357 | — | ||||||
Accrued liabilities (5) | 124,893 | 137,011 | ||||||
Total current liabilities | 172,456 | 190,460 | ||||||
Long-term debt | 1,912,839 | 1,418,169 | ||||||
Deferred income taxes | 428 | 37,998 | ||||||
Asset retirement obligations and other | 79,850 | 79,145 | ||||||
Total long-term liabilities | 1,993,117 | 1,535,312 | ||||||
Total liabilities | 2,165,573 | 1,725,772 | ||||||
Equity and partners’ capital | ||||||||
Common units (117,932,582 and 117,322,812 units issued and outstanding at March 31, 2014, and December 31, 2013, respectively) | 2,459,637 | 2,431,193 | ||||||
General partner units (2,406,763 and 2,394,345 units issued and outstanding at March 31, 2014, and December 31, 2013, respectively) | 81,735 | 78,157 | ||||||
Net investment by Anadarko | — | 312,092 | ||||||
Total partners’ capital | 2,541,372 | 2,821,442 | ||||||
Noncontrolling interest | 70,162 | 70,594 | ||||||
Total equity and partners’ capital | 2,611,534 | 2,892,036 | ||||||
Total liabilities, equity and partners’ capital | $ | 4,777,107 | $ | 4,617,808 |
(1) | Financial information has been recast to include the financial position and results attributable to the TEFR Interests. See Note 1 and Note 2. |
(2) | Accounts receivable, net includes amounts receivable from affiliates (as defined in Note 1) of $57.6 million and $47.9 million as of March 31, 2014, and December 31, 2013, respectively. |
(3) | Other current assets includes natural gas imbalance receivables from affiliates of $1.2 million and $0.1 million as of March 31, 2014, and December 31, 2013, respectively. |
(4) | Accounts and natural gas imbalance payables includes amounts payable to affiliates of $0.1 million and $2.3 million as of March 31, 2014, and December 31, 2013, respectively. |
(5) | Accrued liabilities includes amounts payable to affiliates of zero and $0.1 million as of March 31, 2014, and December 31, 2013, respectively. |
Partners’ Capital | ||||||||||||||||||||
thousands | Net Investment by Anadarko | Common Units | General Partner Units | Noncontrolling Interest | Total | |||||||||||||||
Balance at December 31, 2013 (1) | $ | 312,092 | $ | 2,431,193 | $ | 78,157 | $ | 70,594 | $ | 2,892,036 | ||||||||||
Net income (loss) | (956 | ) | 63,557 | 24,834 | 3,692 | 91,127 | ||||||||||||||
Issuance of common and general partner units, net of offering expenses | — | 17,769 | 759 | — | 18,528 | |||||||||||||||
Distributions to noncontrolling interest owner | — | — | — | (4,124 | ) | (4,124 | ) | |||||||||||||
Distributions to unitholders | — | (70,574 | ) | (22,035 | ) | — | (92,609 | ) | ||||||||||||
Acquisitions from affiliates | (372,784 | ) | 16,534 | — | — | (356,250 | ) | |||||||||||||
Contributions of equity-based compensation from Anadarko | — | 911 | 19 | — | 930 | |||||||||||||||
Net pre-acquisition contributions from (distributions to) Anadarko | 23,788 | — | — | — | 23,788 | |||||||||||||||
Net contributions from Anadarko of other assets | — | 42 | 1 | — | 43 | |||||||||||||||
Elimination of net deferred tax liabilities | 38,160 | — | — | — | 38,160 | |||||||||||||||
Other | (300 | ) | 205 | — | — | (95 | ) | |||||||||||||
Balance at March 31, 2014 | $ | — | $ | 2,459,637 | $ | 81,735 | $ | 70,162 | $ | 2,611,534 |
(1) | Financial information has been recast to include the financial position and results attributable to the TEFR Interests. See Note 1 and Note 2. |
Three Months Ended March 31, | ||||||||
thousands | 2014 | 2013 (1) | ||||||
Cash flows from operating activities | ||||||||
Net income | $ | 91,127 | $ | 52,945 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation, amortization and impairments | 40,612 | 32,440 | ||||||
Non-cash equity-based compensation expense | 1,150 | 804 | ||||||
Deferred income taxes | 290 | 9,270 | ||||||
Debt-related amortization and other items, net | 680 | 560 | ||||||
Equity income, net (2) | (9,251 | ) | (3,968 | ) | ||||
Distributions from equity investment earnings (2) | 10,269 | 5,006 | ||||||
Changes in assets and liabilities: | ||||||||
(Increase) decrease in accounts receivable, net | (10,982 | ) | 21,661 | |||||
Increase (decrease) in accounts and natural gas imbalance payables and accrued liabilities, net | (1,727 | ) | 21,287 | |||||
Change in other items, net | 1,878 | (1,835 | ) | |||||
Net cash provided by operating activities | 124,046 | 138,170 | ||||||
Cash flows from investing activities | ||||||||
Capital expenditures | (189,327 | ) | (166,463 | ) | ||||
Acquisitions from affiliates | (360,952 | ) | (465,721 | ) | ||||
Acquisitions from third parties | — | (134,869 | ) | |||||
Investments in equity affiliates | (27,605 | ) | (64,580 | ) | ||||
Distributions from equity investments in excess of cumulative earnings (2) | 2,044 | — | ||||||
Other | (857 | ) | — | |||||
Net cash used in investing activities | (576,697 | ) | (831,633 | ) | ||||
Cash flows from financing activities | ||||||||
Borrowings, net of debt issuance costs | 917,742 | 384,946 | ||||||
Repayments of debt | (430,000 | ) | — | |||||
Increase (decrease) in outstanding checks | 1,928 | (2,808 | ) | |||||
Proceeds from the issuance of common and general partner units, net of offering expenses | 18,289 | 500 | ||||||
Distributions to unitholders | (92,609 | ) | (65,657 | ) | ||||
Contributions from noncontrolling interest owner | — | 1,097 | ||||||
Distributions to noncontrolling interest owner | (4,124 | ) | (2,650 | ) | ||||
Net contributions from (distributions to) Anadarko | 23,788 | 21,570 | ||||||
Net cash provided by financing activities | 435,014 | 336,998 | ||||||
Net increase (decrease) in cash and cash equivalents | (17,637 | ) | (356,465 | ) | ||||
Cash and cash equivalents at beginning of period | 100,728 | 419,981 | ||||||
Cash and cash equivalents at end of period | $ | 83,091 | $ | 63,516 | ||||
Supplemental disclosures | ||||||||
Net distributions to (contributions from) Anadarko of other assets | $ | (43 | ) | $ | (6 | ) | ||
Interest paid, net of capitalized interest | $ | 14,106 | $ | 11,244 | ||||
Taxes paid (reimbursements received) | $ | (340 | ) | $ | — |
(1) | Financial information has been recast to include the financial position and results attributable to the TEFR Interests. See Note 1 and Note 2. |
(2) | Income earned on, distributions from and contributions to equity investments are classified as affiliate. See Note 1. |
Owned and Operated | Operated Interests | Non-Operated Interests | Equity Interests | |||||||||
Natural gas gathering systems | 13 | 1 | 5 | 2 | ||||||||
NGL gathering systems | — | — | — | 2 | ||||||||
Natural gas treating facilities | 8 | — | — | 1 | ||||||||
Natural gas processing facilities | 8 | 3 | — | 2 | ||||||||
NGL pipelines | 3 | — | — | 2 | ||||||||
Natural gas pipelines | 3 | — | — | — | ||||||||
Oil pipeline | — | — | — | 1 |
Equity Investments | |||||||||||||||||||||||||||
thousands | Fort Union | White Cliffs | Rendezvous | Mont Belvieu JV | TEG | TEP | FRP | ||||||||||||||||||||
Balance at December 31, 2013 | $ | 25,172 | $ | 35,039 | $ | 60,928 | $ | 122,480 | $ | 16,649 | $ | 197,731 | $ | 135,401 | |||||||||||||
Investment earnings (loss), net of amortization | 1,501 | 2,227 | 244 | 7,124 | 192 | (874 | ) | (1,163 | ) | ||||||||||||||||||
Contributions | — | 2,500 | — | (1,919 | ) | 352 | 187 | 20,992 | |||||||||||||||||||
Capitalized interest | — | — | — | — | — | — | 857 | ||||||||||||||||||||
Distributions | (1,016 | ) | (2,082 | ) | (729 | ) | (6,200 | ) | (242 | ) | — | — | |||||||||||||||
Distributions in excess of cumulative earnings (1) | — | (581 | ) | (859 | ) | — | (163 | ) | (541 | ) | — | ||||||||||||||||
Balance at March 31, 2014 | $ | 25,657 | $ | 37,103 | $ | 59,584 | $ | 121,485 | $ | 16,788 | $ | 196,503 | $ | 156,087 |
(1) | Distributions in excess of cumulative earnings, classified as investing cash flows in the consolidated statements of cash flows, is calculated on an individual investment basis. |
thousands except unit and percent amounts | Acquisition Date | Percentage Acquired | Borrowings | Cash On Hand | Common Units Issued | |||||||||||
Non-Operated Marcellus Interest (1) | 03/01/2013 | 33.75 | % | $ | 250,000 | $ | 215,500 | 449,129 | ||||||||
Anadarko-Operated Marcellus Interest (2) | 03/08/2013 | 33.75 | % | 133,500 | 1,145 | — | ||||||||||
Mont Belvieu JV (3) | 06/05/2013 | 25 | % | — | 78,129 | — | ||||||||||
OTTCO (4) | 09/03/2013 | 100 | % | 27,500 | — | — | ||||||||||
TEFR Interests (5) | 03/03/2014 | Various (5) | 350,000 | 6,250 | 308,490 |
(1) | The Partnership acquired Anadarko’s 33.75% interest (non-operated) in the Liberty and Rome gas gathering systems, serving production from the Marcellus shale in north-central Pennsylvania. The interest acquired is referred to as the “Non-Operated Marcellus Interest.” In connection with the issuance of the common units, the Partnership’s general partner purchased 9,166 general partner units for consideration of $0.5 million to maintain its 2.0% general partner interest in the Partnership. |
(2) | The Partnership acquired a 33.75% interest in each of the Larry’s Creek, Seely and Warrensville gas gathering systems, which are operated by Anadarko and serve production from the Marcellus shale in north-central Pennsylvania, from a third party. The interest acquired is referred to as the “Anadarko-Operated Marcellus Interest.” |
(3) | The Partnership acquired a 25% interest in the Mont Belvieu JV, an entity formed to design, construct, and own two fractionation trains located in Mont Belvieu, Texas, from a third party. The interest acquired is accounted for under the equity method of accounting. |
(4) | The Partnership acquired Overland Trail Transmission, LLC (“OTTCO”), a Delaware limited liability company, from a third party. OTTCO owns and operates an intrastate pipeline that connects the Partnership’s Red Desert and Granger complexes in southwestern Wyoming. |
(5) | The Partnership acquired a 20% interest in each of TEG and TEP, and a 33.33% interest in FRP, from Anadarko. These assets gather and transport NGLs primarily from the Anadarko and DJ Basin. The interests in these entities are accounted for under the equity method of accounting. In connection with the issuance of the common units, the Partnership’s general partner purchased 6,296 general partner units for consideration of $0.4 million to maintain its 2.0% general partner interest in the Partnership. |
Three Months Ended March 31, 2013 | ||||||||||||
thousands | Partnership Historical | TEFR Interests | Combined | |||||||||
Revenues | $ | 225,766 | $ | — | $ | 225,766 | ||||||
Equity income (loss), net | 3,981 | (13 | ) | 3,968 | ||||||||
Net income | $ | 52,888 | $ | 57 | $ | 52,945 |
thousands except per-unit amounts Quarters Ended | Total Quarterly Distribution per Unit | Total Quarterly Cash Distribution | Date of Distribution | ||||||||
March 31, 2013 | $ | 0.540 | $ | 70,143 | May 2013 | ||||||
March 31, 2014 (1) | $ | 0.625 | $ | 98,749 | May 2014 |
(1) | On April 17, 2014, the board of directors of the Partnership’s general partner declared a cash distribution to the Partnership’s unitholders of $0.625 per unit, or $98.7 million in aggregate, including incentive distributions. The cash distribution is payable on May 14, 2014, to unitholders of record at the close of business on April 30, 2014. |
thousands except unit and per-unit amounts | Common Units Issued | GP Units Issued (1) | Price Per Unit | Underwriting Discount and Other Offering Expenses | Net Proceeds | ||||||||||||
May 2013 equity offering (2) | 7,015,000 | 143,163 | $ | 61.18 | $ | 13,203 | $ | 424,733 | |||||||||
December 2013 equity offering (3) | 4,800,000 | 97,959 | 61.51 | 9,395 | 291,879 | ||||||||||||
Continuous Offering Program - 2013 (4) | 685,735 | 13,996 | 60.84 | 965 | 41,603 | ||||||||||||
Continuous Offering Program - 2014 (5) | — | — | — | — | — |
(1) | Represents general partner units issued to the general partner in exchange for the general partner’s proportionate capital contribution to maintain its 2.0% general partner interest. |
(2) | Includes the issuance of 915,000 common units pursuant to the full exercise of the underwriters’ over-allotment option granted in connection with the May 2013 equity offering. |
(3) | Includes the issuance of 300,000 common units on January 3, 2014, pursuant to the partial exercise of the underwriters’ over-allotment option granted in connection with the December 2013 equity offering. Net proceeds from this partial exercise (including the general partner’s proportionate capital contribution) were $18.2 million. |
(4) | Represents common and general partner units issued during the year ended December 31, 2013, pursuant to the Partnership’s registration statement filed with the SEC in August 2012 authorizing the issuance of up to an aggregate of $125.0 million of common units (the “Continuous Offering Program”). Gross proceeds generated (including the general partner’s proportionate capital contributions) were $42.6 million. The price per unit in the table above represents an average price for all issuances under the Continuous Offering Program during 2013. |
(5) | During the three months ended March 31, 2014, the Partnership did not issue any common units under the Continuous Offering Program. |
Common Units | General Partner Units | Total | |||||||
Balance at December 31, 2013 | 117,322,812 | 2,394,345 | 119,717,157 | ||||||
December 2013 equity offering | 300,000 | 6,122 | 306,122 | ||||||
Long-Term Incentive Plan awards | 1,280 | — | 1,280 | ||||||
TEFR Interests acquisition | 308,490 | 6,296 | 314,786 | ||||||
Balance at March 31, 2014 | 117,932,582 | 2,406,763 | 120,339,345 |
per barrel except natural gas | 2014 | 2015 | 2016 | |||||||||||||||||
Ethane | $ | 18.36 | − | $ | 30.53 | $ | 18.41 | − | $ | 23.41 | $ | 23.11 | ||||||||
Propane | $ | 40.38 | − | $ | 53.78 | $ | 47.08 | − | $ | 52.99 | $ | 52.90 | ||||||||
Isobutane | $ | 61.24 | − | $ | 75.13 | $ | 62.09 | − | $ | 74.02 | $ | 73.89 | ||||||||
Normal butane | $ | 53.89 | − | $ | 66.83 | $ | 54.62 | − | $ | 65.04 | $ | 64.93 | ||||||||
Natural gasoline | $ | 71.85 | − | $ | 90.89 | $ | 72.88 | − | $ | 81.82 | $ | 81.68 | ||||||||
Condensate | $ | 75.22 | − | $ | 87.30 | $ | 76.47 | − | $ | 81.82 | $ | 81.68 | ||||||||
Natural gas (per MMBtu) | $ | 3.45 | − | $ | 6.20 | $ | 4.66 | − | $ | 5.96 | $ | 4.87 |
Three Months Ended March 31, | ||||||||
thousands | 2014 | 2013 | ||||||
Gains (losses) on commodity price swap agreements related to sales: (1) | ||||||||
Natural gas sales | $ | (3,667 | ) | $ | 5,380 | |||
Natural gas liquids sales | 9,455 | 21,305 | ||||||
Total | 5,788 | 26,685 | ||||||
Losses on commodity price swap agreements related to purchases (2) | (19 | ) | (19,854 | ) | ||||
Net gains (losses) on commodity price swap agreements | $ | 5,769 | $ | 6,831 |
(1) | Reported in affiliate natural gas, natural gas liquids and condensate sales in the consolidated statements of income in the period in which the related sale is recorded. |
(2) | Reported in cost of product in the consolidated statements of income in the period in which the related purchase is recorded. |
Three Months Ended March 31, | ||||||||
2014 | 2013 | |||||||
thousands | Purchases | |||||||
Cash consideration | $ | 4,702 | $ | 221 | ||||
Net carrying value | 4,745 | 227 | ||||||
Partners’ capital adjustment | $ | (43 | ) | $ | (6 | ) |
Three Months Ended March 31, | ||||||||
thousands | 2014 | 2013 | ||||||
Revenues (1) | $ | 206,290 | $ | 177,569 | ||||
Equity income, net | 9,251 | 3,968 | ||||||
Cost of product (1) | 16,634 | 31,929 | ||||||
Operation and maintenance (2) | 11,099 | 13,366 | ||||||
General and administrative (3) | 6,814 | 5,869 | ||||||
Operating expenses | 34,547 | 51,164 | ||||||
Interest income, net (4) | 4,225 | 4,225 | ||||||
Distributions to unitholders (5) | 51,882 | 36,868 |
(1) | Represents amounts recognized under gathering, treating or processing agreements, and purchase and sale agreements. |
(2) | Represents expenses incurred on and subsequent to the date of the acquisition of the Partnership assets, as well as expenses incurred by Anadarko on a historical basis related to the Partnership assets prior to the acquisition of such assets by the Partnership. |
(3) | Represents general and administrative expense incurred on and subsequent to the date of the Partnership’s acquisition of the Partnership assets, as well as a management services fee for reimbursement of expenses incurred by Anadarko for periods prior to the acquisition of the Partnership assets by the Partnership. These amounts include equity-based compensation expense allocated to the Partnership by Anadarko (see WES LTIP and WGP LTIP and Anadarko Incentive Plans within this Note 5). |
(4) | Represents interest income recognized on the note receivable from Anadarko. |
(5) | Represents distributions paid under the partnership agreement (see Note 3 and Note 4). |
thousands | Estimated Useful Life | March 31, 2014 | December 31, 2013 | |||||||
Land | n/a | $ | 2,584 | $ | 2,584 | |||||
Gathering systems | 3 to 47 years | 3,773,582 | 3,673,008 | |||||||
Pipelines and equipment | 15 to 45 years | 145,475 | 146,008 | |||||||
Assets under construction | n/a | 478,515 | 405,633 | |||||||
Other | 3 to 40 years | 14,012 | 11,867 | |||||||
Total property, plant and equipment | 4,414,168 | 4,239,100 | ||||||||
Accumulated depreciation | 894,690 | 855,845 | ||||||||
Net property, plant and equipment | $ | 3,519,478 | $ | 3,383,255 |
thousands | March 31, 2014 | December 31, 2013 | ||||||
Natural gas liquids inventory | $ | 2,793 | $ | 2,584 | ||||
Natural gas imbalance receivables | 2,101 | 3,605 | ||||||
Prepaid insurance | 1,248 | 2,123 | ||||||
Other | 1,290 | 1,710 | ||||||
Total other current assets | $ | 7,432 | $ | 10,022 |
thousands | March 31, 2014 | December 31, 2013 | ||||||
Accrued capital expenditures | $ | 76,332 | $ | 94,750 | ||||
Accrued plant purchases | 27,606 | 21,396 | ||||||
Accrued interest expense | 17,547 | 18,119 | ||||||
Short-term asset retirement obligations | 1,310 | 1,966 | ||||||
Short-term remediation and reclamation obligations | 562 | 562 | ||||||
Other | 1,536 | 218 | ||||||
Total accrued liabilities | $ | 124,893 | $ | 137,011 |
March 31, 2014 | December 31, 2013 | |||||||||||||||||||||||
thousands | Principal | Carrying Value | Fair Value (1) | Principal | Carrying Value | Fair Value (1) | ||||||||||||||||||
5.375% Senior Notes due 2021 | $ | 500,000 | $ | 495,305 | $ | 548,287 | $ | 500,000 | $ | 495,173 | $ | 533,615 | ||||||||||||
4.000% Senior Notes due 2022 | 670,000 | 673,192 | 666,755 | 670,000 | 673,278 | 641,237 | ||||||||||||||||||
2.600% Senior Notes due 2018 | 350,000 | 350,567 | 352,159 | 250,000 | 249,718 | 247,988 | ||||||||||||||||||
5.450% Senior Notes due 2044 | 400,000 | 393,775 | 406,664 | — | — | — | ||||||||||||||||||
Total debt outstanding | $ | 1,920,000 | $ | 1,912,839 | $ | 1,973,865 | $ | 1,420,000 | $ | 1,418,169 | $ | 1,422,840 |
(1) | Fair value is measured using Level 2 inputs. |
thousands | Carrying Value | |||
Balance at December 31, 2013 | $ | 1,418,169 | ||
Revolving credit facility borrowings | 430,000 | |||
Issuance of 5.450% Senior Notes due 2044 | 400,000 | |||
Issuance of 2.600% Senior Notes due 2018 | 100,000 | |||
Repayments of revolving credit facility | (430,000 | ) | ||
Other | (5,330 | ) | ||
Balance at March 31, 2014 | $ | 1,912,839 |
Three Months Ended March 31, | ||||||||
thousands | 2014 | 2013 | ||||||
Interest expense on long-term debt | $ | 16,135 | $ | 13,939 | ||||
Amortization of debt issuance costs and commitment fees | 1,266 | 1,053 | ||||||
Capitalized interest | (3,440 | ) | (3,181 | ) | ||||
Interest expense | $ | 13,961 | $ | 11,811 |
• | our ability to pay distributions to our unitholders; |
• | our and Anadarko’s assumptions about the energy market; |
• | future throughput, including Anadarko’s production, which is gathered or processed by or transported through our assets; |
• | operating results; |
• | competitive conditions; |
• | technology; |
• | availability of capital resources to fund acquisitions, capital expenditures and other contractual obligations, and our ability to access those resources from Anadarko or through the debt or equity capital markets; |
• | supply of, demand for, and the price of, oil, natural gas, NGLs and related products or services; |
• | weather; |
• | inflation; |
• | availability of goods and services; |
• | general economic conditions, either internationally or domestically or in the jurisdictions in which we are doing business; |
• | changes in regulations at the federal, state and local level or the inability to timely obtain or maintain permits that could affect our and our customers’ activities; environmental risks; regulations by the Federal Energy Regulatory Commission (“FERC”); and liability under federal and state laws and regulations; |
• | legislative or regulatory changes affecting our status as a partnership for federal income tax purposes; |
• | changes in the financial or operational condition of Anadarko; |
• | changes in Anadarko’s capital program, strategy or desired areas of focus; |
• | our commitments to capital projects; |
• | ability to use our revolving credit facility (“RCF”); |
• | creditworthiness of Anadarko or our other counterparties, including financial institutions, operating partners, and other parties; |
• | our ability to repay debt; |
• | our ability to mitigate commodity price risks inherent in our percent-of-proceeds and keep-whole contracts; |
• | conflicts of interest among us, our general partner, WGP and its general partner, and affiliates, including Anadarko; |
• | our ability to maintain and/or obtain rights to operate our assets on land owned by third parties; |
• | our ability to acquire assets on acceptable terms; |
• | non-payment or non-performance of Anadarko or other significant customers, including under our gathering, processing and transportation agreements and our $260.0 million note receivable from Anadarko; |
• | timing, amount and terms of future issuances of equity and debt securities; and |
• | other factors discussed below, in “Risk Factors” included in our 2013 Form 10-K, in “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates,” in our quarterly reports on Form 10-Q and elsewhere in our other public filings and press releases. |
Owned and Operated | Operated Interests | Non-Operated Interests | Equity Interests | |||||||||
Natural gas gathering systems | 13 | 1 | 5 | 2 | ||||||||
NGL gathering systems | — | — | — | 2 | ||||||||
Natural gas treating facilities | 8 | — | — | 1 | ||||||||
Natural gas processing facilities | 8 | 3 | — | 2 | ||||||||
NGL pipelines | 3 | — | — | 2 | ||||||||
Natural gas pipelines | 3 | — | — | — | ||||||||
Oil pipeline | — | — | — | 1 |
• | We issued $400.0 million aggregate principal amount of 5.450% Senior Notes due 2044 and an additional $100.0 million aggregate principal amount of 2.600% Senior Notes due 2018. Net proceeds were used to repay amounts then outstanding under our RCF. See Liquidity and Capital Resources within this Item 2 for additional information. |
• | We completed the acquisition of Anadarko’s 20% interests in TEG and TEP, and its 33.33% interest in FRP. See Acquisitions below. |
• | We entered into an amended and restated $1.2 billion (expandable to $1.5 billion) senior unsecured RCF replacing our $800.0 million credit facility. See Liquidity and Capital Resources within this Item 2 for additional information. |
• | We raised our distribution to $0.625 per unit for the first quarter of 2014, representing a 4% increase over the distribution for the fourth quarter of 2013, a 16% increase over the distribution for the first quarter of 2013, and our twentieth consecutive quarterly increase. |
• | Throughput attributable to Western Gas Partners, LP totaled 3,404 MMcf/d for the three months ended March 31, 2014, representing a 17% increase compared to the three months ended March 31, 2013. |
• | Adjusted gross margin attributable to Western Gas Partners, LP for natural gas assets (as defined under the caption Key Performance Metrics within this Item 2) averaged $0.60 per Mcf for the three months ended March 31, 2014, representing an 11% increase compared to the three months ended March 31, 2013. |
thousands except unit and percent amounts | Acquisition Date | Percentage Acquired | Borrowings | Cash On Hand | Common Units Issued | |||||||||||
Non-Operated Marcellus Interest (1) | 03/01/2013 | 33.75 | % | $ | 250,000 | $ | 215,500 | 449,129 | ||||||||
Anadarko-Operated Marcellus Interest (2) | 03/08/2013 | 33.75 | % | 133,500 | 1,145 | — | ||||||||||
Mont Belvieu JV (3) | 06/05/2013 | 25 | % | — | 78,129 | — | ||||||||||
OTTCO (4) | 09/03/2013 | 100 | % | 27,500 | — | — | ||||||||||
TEFR Interests (5) | 03/03/2014 | Various (5) | 350,000 | 6,250 | 308,490 |
(1) | We acquired Anadarko’s 33.75% interest (non-operated) in the Liberty and Rome gas gathering systems, serving production from the Marcellus shale in north-central Pennsylvania. The interest acquired is referred to as the “Non-Operated Marcellus Interest.” In connection with the issuance of the common units, our general partner purchased 9,166 general partner units for consideration of $0.5 million to maintain its 2.0% general partner interest in us. |
(2) | We acquired a 33.75% interest in each of the Larry’s Creek, Seely and Warrensville gas gathering systems, which are operated by Anadarko and serve production from the Marcellus shale in north-central Pennsylvania, from a third party. The interest acquired is referred to as the “Anadarko-Operated Marcellus Interest.” |
(3) | We acquired a 25% interest in the Mont Belvieu JV, an entity formed to design, construct, and own two fractionation trains located in Mont Belvieu, Texas, from a third party. The interest acquired is accounted for under the equity method of accounting. |
(4) | We acquired Overland Trail Transmission, LLC (“OTTCO”), a Delaware limited liability company, from a third party. OTTCO owns and operates an intrastate pipeline that connects our Red Desert and Granger complexes in southwestern Wyoming. |
(5) | We acquired a 20% interest in each of TEG and TEP, and a 33.33% interest in FRP, from Anadarko. These assets gather and transport NGLs primarily from the Anadarko and DJ Basin. TEG consists of two NGL gathering systems that link natural gas processing plants to TEP. TEP is an NGL pipeline that originates in Skellytown, Texas and extends approximately 580 miles to Mont Belvieu, Texas. FRP is a 435 mile NGL pipeline that extends from Weld County, Colorado to Skellytown, Texas. The interests in these entities are accounted for under the equity method of accounting. In connection with the issuance of the common units, our general partner purchased 6,296 general partner units for consideration of $0.4 million to maintain its 2.0% general partner interest in us. See Note 2—Acquisitions in the Notes to Consolidated Financial Statements under Item 1 of this Form 10-Q. |
thousands except unit and per-unit amounts | Common Units Issued | GP Units Issued (1) | Price Per Unit | Underwriting Discount and Other Offering Expenses | Net Proceeds | ||||||||||||
May 2013 equity offering (2) | 7,015,000 | 143,163 | $ | 61.18 | $ | 13,203 | $ | 424,733 | |||||||||
December 2013 equity offering (3) | 4,800,000 | 97,959 | 61.51 | 9,395 | 291,879 | ||||||||||||
Continuous Offering Program - 2013 (4) | 685,735 | 13,996 | 60.84 | 965 | 41,603 | ||||||||||||
Continuous Offering Program - 2014 (5) | — | — | — | — | — |
(1) | Represents general partner units issued to the general partner in exchange for the general partner’s proportionate capital contribution to maintain its 2.0% general partner interest. |
(2) | Includes the issuance of 915,000 common units pursuant to the full exercise of the underwriters’ over-allotment option granted in connection with the May 2013 equity offering. |
(3) | Includes the issuance of 300,000 common units on January 3, 2014, pursuant to the partial exercise of the underwriters’ over-allotment option granted in connection with the December 2013 equity offering. Net proceeds from this partial exercise (including the general partner’s proportionate capital contribution) were $18.2 million. |
(4) | Represents common and general partner units issued during the year ended December 31, 2013, pursuant to our registration statement filed with the SEC in August 2012 authorizing the issuance of up to an aggregate of $125.0 million of common units (the “Continuous Offering Program”). Gross proceeds generated (including our general partner’s proportionate capital contributions) were $42.6 million. The price per unit in the table above represents an average price for all issuances under our Continuous Offering Program during 2013. |
(5) | During the three months ended March 31, 2014, we did not issue any common units under our Continuous Offering Program. |
Three Months Ended March 31, | ||||||||
thousands | 2014 | 2013 | ||||||
Gathering, processing and transportation of natural gas and natural gas liquids | $ | 141,449 | $ | 102,890 | ||||
Natural gas, natural gas liquids and condensate sales | 136,438 | 121,729 | ||||||
Other, net | 1,570 | 1,147 | ||||||
Total revenues (1) | 279,457 | 225,766 | ||||||
Equity income, net | 9,251 | 3,968 | ||||||
Total operating expenses (1) | 188,550 | 165,711 | ||||||
Operating income | 100,158 | 64,023 | ||||||
Interest income, net – affiliates | 4,225 | 4,225 | ||||||
Interest expense | (13,961 | ) | (11,811 | ) | ||||
Other income (expense), net | 477 | 674 | ||||||
Income before income taxes | 90,899 | 57,111 | ||||||
Income tax expense | (228 | ) | 4,166 | |||||
Net income | 91,127 | 52,945 | ||||||
Net income attributable to noncontrolling interest | 3,692 | 2,231 | ||||||
Net income attributable to Western Gas Partners, LP | $ | 87,435 | $ | 50,714 | ||||
Key performance metrics (2) | ||||||||
Adjusted gross margin attributable to Western Gas Partners, LP | $ | 194,726 | $ | 143,986 | ||||
Adjusted EBITDA attributable to Western Gas Partners, LP | $ | 140,999 | $ | 95,928 | ||||
Distributable cash flow | $ | 119,321 | $ | 79,129 |
(1) | Revenues include amounts earned from services provided to our affiliates, as well as from the sale of residue, condensate and NGLs to our affiliates. Operating expenses include amounts charged by our affiliates for services as well as reimbursement of amounts paid by affiliates to third parties on our behalf. See Note 5—Transactions with Affiliates in the Notes to Consolidated Financial Statements under Item 1 of this Form 10-Q. |
(2) | Adjusted gross margin attributable to Western Gas Partners, LP, Adjusted EBITDA attributable to Western Gas Partners, LP and Distributable cash flow are defined under the caption Key Performance Metrics within this Item 2. Such caption also includes reconciliations of Adjusted gross margin attributable to Western Gas Partners, LP, Adjusted EBITDA attributable to Western Gas Partners, LP and Distributable cash flow to their most directly comparable financial measures calculated and presented in accordance with Generally Accepted Accounting Principles (“GAAP”). |
Three Months Ended March 31, | |||||||||
MMcf/d (except throughput measured in barrels) | 2014 | 2013 | Inc/ (Dec) | ||||||
Throughput for natural gas assets | |||||||||
Gathering, treating and transportation (1) | 1,592 | 1,251 | 27 | % | |||||
Processing (1) | 1,799 | 1,609 | 12 | % | |||||
Equity investment (2) | 186 | 201 | (7 | )% | |||||
Total throughput for natural gas assets | 3,577 | 3,061 | 17 | % | |||||
Throughput attributable to noncontrolling interest for natural gas assets | 173 | 155 | 12 | % | |||||
Total throughput attributable to Western Gas Partners, LP for natural gas assets (3) | 3,404 | 2,906 | 17 | % | |||||
Total throughput (MBbls/d) for crude/NGL assets (4) | 79 | 27 | 193 | % |
(1) | The combination of our Wattenberg and Platte Valley systems in the first quarter of 2014 into the entity now referred to as the “DJ Basin complex” 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) volumes both gathered and processed by the two systems are no longer separately reported. |
(2) | Represents our 14.81% share of average Fort Union and our 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 our Chipeta NGL pipeline, our 10% share of average White Cliffs throughput, our 25% share of average Mont Belvieu JV throughput, our 20% share of average TEG and TEP throughput and our 33.33% share of average FRP throughput. |
Three Months Ended March 31, | |||||||||||
thousands except percentages | 2014 | 2013 | Inc/ (Dec) | ||||||||
Gathering, processing and transportation of natural gas and natural gas liquids | $ | 141,449 | $ | 102,890 | 37 | % |
Three Months Ended March 31, | |||||||||||
thousands except percentages and per-unit amounts | 2014 | 2013 | Inc/ (Dec) | ||||||||
Natural gas sales | $ | 30,875 | $ | 25,517 | 21 | % | |||||
Natural gas liquids sales | 95,813 | 87,217 | 10 | % | |||||||
Drip condensate sales | 9,750 | 8,995 | 8 | % | |||||||
Total | $ | 136,438 | $ | 121,729 | 12 | % | |||||
Average price per unit: | |||||||||||
Natural gas (per Mcf) | $ | 4.25 | $ | 4.21 | 1 | % | |||||
Natural gas liquids (per Bbl) | $ | 44.77 | $ | 47.04 | (5 | )% | |||||
Drip condensate (per Bbl) | $ | 79.34 | $ | 74.56 | 6 | % |
Three Months Ended March 31, | |||||||||||
thousands except percentages | 2014 | 2013 | Inc/ (Dec) | ||||||||
Equity income, net | $ | 9,251 | $ | 3,968 | 133 | % |
Three Months Ended March 31, | |||||||||||
thousands except percentages | 2014 | 2013 | Inc/ (Dec) | ||||||||
NGL purchases | $ | 47,881 | $ | 42,009 | 14 | % | |||||
Residue purchases | 37,107 | 37,504 | (1 | )% | |||||||
Other | 6,962 | 3,570 | 95 | % | |||||||
Cost of product | $ | 91,950 | $ | 83,083 | 11 | % | |||||
Operation and maintenance | 40,532 | 36,739 | 10 | % | |||||||
Total cost of product and operation and maintenance expenses | $ | 132,482 | $ | 119,822 | 11 | % |
• | a $5.9 million net increase in NGL purchases, primarily at Chipeta, the Hilight system, the Red Desert complex and the DJ Basin complex; |
• | a $0.4 million net decrease in residue purchases, primarily due to decreases at the DJ Basin complex and the Granger complex, partially offset by increases at the Hilight system and Chipeta; and |
• | a $2.7 million increase in other, due to changes in imbalance positions primarily at the DJ Basin complex. |
Three Months Ended March 31, | |||||||||||
thousands except percentages | 2014 | 2013 | Inc/ (Dec) | ||||||||
General and administrative | $ | 8,415 | $ | 7,664 | 10 | % | |||||
Property and other taxes | 7,041 | 5,785 | 22 | % | |||||||
Depreciation, amortization and impairments | 40,612 | 32,440 | 25 | % | |||||||
Total general and administrative, depreciation and other expenses | $ | 56,068 | $ | 45,889 | 22 | % |
Three Months Ended March 31, | |||||||||||
thousands except percentages | 2014 | 2013 | Inc/ (Dec) | ||||||||
Interest income on note receivable | $ | 4,225 | $ | 4,225 | — | % | |||||
Interest income, net – affiliates | $ | 4,225 | $ | 4,225 | — | % | |||||
Interest expense on long-term debt | $ | (16,135 | ) | $ | (13,939 | ) | 16 | % | |||
Amortization of debt issuance costs and commitment fees | (1,266 | ) | (1,053 | ) | 20 | % | |||||
Capitalized interest | 3,440 | 3,181 | 8 | % | |||||||
Interest expense | $ | (13,961 | ) | $ | (11,811 | ) | 18 | % |
Three Months Ended March 31, | |||||||||||
thousands except percentages | 2014 | 2013 | Inc/ (Dec) | ||||||||
Income before income taxes | $ | 90,899 | $ | 57,111 | 59 | % | |||||
Income tax (benefit) expense | (228 | ) | 4,166 | (105 | )% | ||||||
Effective tax rate | — | % | 7 | % |
Three Months Ended March 31, | |||||||||||
thousands except percentages | 2014 | 2013 | Inc/ (Dec) | ||||||||
Net income attributable to noncontrolling interest | $ | 3,692 | $ | 2,231 | 65 | % |
Three Months Ended March 31, | |||||||||||
thousands except percentages and per-unit amounts | 2014 | 2013 | Inc/ (Dec) | ||||||||
Adjusted gross margin attributable to Western Gas Partners, LP for natural gas assets (1) | $ | 183,937 | $ | 140,395 | 31 | % | |||||
Adjusted gross margin for crude/NGL assets (2) | 10,789 | 3,591 | 200 | % | |||||||
Adjusted gross margin attributable to Western Gas Partners, LP | $ | 194,726 | $ | 143,986 | 35 | % | |||||
Adjusted gross margin per Mcf attributable to Western Gas Partners, LP for natural gas assets (3) | 0.60 | 0.54 | 11 | % | |||||||
Adjusted gross margin per Bbl for crude/NGL assets (4) | 1.52 | 1.48 | 3 | % | |||||||
Adjusted EBITDA attributable to Western Gas Partners, LP (5) | 140,999 | 95,928 | 47 | % | |||||||
Distributable cash flow (5) | $ | 119,321 | $ | 79,129 | 51 | % |
(1) | Adjusted gross margin attributable to Western Gas Partners, LP for natural gas assets is calculated as total revenues for natural gas assets less cost of product for natural gas assets plus distributions from our equity investments in Fort Union and Rendezvous, which are measured in Mcf, and excluding the noncontrolling interest owner’s proportionate share of revenue and cost of product. See the reconciliation of Adjusted gross margin attributable to Western Gas Partners, LP for natural gas assets to its most comparable GAAP measure below. |
(2) | Adjusted gross margin for crude/NGL assets is calculated as total revenues for crude/NGL assets less cost of product for crude/NGL assets plus distributions from our equity investments in White Cliffs, the Mont Belvieu JV, TEG, TEP and FRP, which are measured in barrels. See the reconciliation of Adjusted gross margin for crude/NGL assets to its most comparable GAAP measure below. |
(3) | Average for period. Calculated as Adjusted gross margin attributable to Western Gas Partners, LP for natural gas assets divided by total throughput attributable to Western Gas Partners, LP for natural gas assets. |
(4) | Average for period. Calculated as Adjusted gross margin for crude/NGL assets, divided by total throughput (MBbls/d) for crude/NGL assets. |
(5) | For reconciliations of Adjusted EBITDA attributable to Western Gas Partners, LP and Distributable cash flow to their most directly comparable financial measures calculated and presented in accordance with GAAP, see the descriptions below. |
• | our operating performance as compared to other publicly traded partnerships in the midstream energy industry, without regard to financing methods, capital structure or historical cost basis; |
• | the ability of our assets to generate cash flow to make distributions; and |
• | the viability of acquisitions and capital expenditure projects and the returns on investment of various investment opportunities. |
Three Months Ended March 31, | ||||||||
thousands | 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 | $ | 183,937 | $ | 140,395 | ||||
Adjusted gross margin for crude/NGL assets | 10,789 | 3,591 | ||||||
Adjusted gross margin attributable to Western Gas Partners, LP | $ | 194,726 | $ | 143,986 | ||||
Adjusted gross margin attributable to noncontrolling interest | 5,094 | 3,703 | ||||||
Equity income, net | 9,251 | 3,968 | ||||||
Less: | ||||||||
Distributions from equity investees | 12,313 | 5,006 | ||||||
Operation and maintenance | 40,532 | 36,739 | ||||||
General and administrative | 8,415 | 7,664 | ||||||
Property and other taxes | 7,041 | 5,785 | ||||||
Depreciation, amortization and impairments | 40,612 | 32,440 | ||||||
Operating income | $ | 100,158 | $ | 64,023 |
Three Months Ended March 31, | ||||||||
thousands | 2014 | 2013 | ||||||
Reconciliation of Adjusted EBITDA attributable to Western Gas Partners, LP to Net income attributable to Western Gas Partners, LP | ||||||||
Adjusted EBITDA attributable to Western Gas Partners, LP | $ | 140,999 | $ | 95,928 | ||||
Less: | ||||||||
Distributions from equity investees | 12,313 | 5,006 | ||||||
Non-cash equity-based compensation expense | 1,097 | 877 | ||||||
Interest expense | 13,961 | 11,811 | ||||||
Income tax expense | — | 4,166 | ||||||
Depreciation, amortization and impairments (1) | 39,975 | 31,824 | ||||||
Add: | ||||||||
Equity income, net | 9,251 | 3,968 | ||||||
Interest income, net – affiliates | 4,225 | 4,225 | ||||||
Other income (1) (2) | 78 | 277 | ||||||
Income tax benefit | 228 | — | ||||||
Net income attributable to Western Gas Partners, LP | $ | 87,435 | $ | 50,714 | ||||
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 | $ | 140,999 | $ | 95,928 | ||||
Adjusted EBITDA attributable to noncontrolling interest | 4,326 | 2,846 | ||||||
Interest income (expense), net | (9,736 | ) | (7,586 | ) | ||||
Non-cash equity-based compensation expense | 53 | (73 | ) | |||||
Debt-related amortization and other items, net | 680 | 560 | ||||||
Current income tax benefit | 518 | 5,104 | ||||||
Other income (expense), net (2) | 81 | 278 | ||||||
Distributions from equity investments in excess of cumulative earnings | (2,044 | ) | — | |||||
Changes in operating working capital: | ||||||||
Accounts receivable, net | (10,982 | ) | 21,661 | |||||
Accounts and natural gas imbalance payables and accrued liabilities, net | (1,727 | ) | 21,287 | |||||
Other | 1,878 | (1,835 | ) | |||||
Net cash provided by operating activities | $ | 124,046 | $ | 138,170 | ||||
Cash flow information of Western Gas Partners, LP | ||||||||
Net cash provided by operating activities | $ | 124,046 | $ | 138,170 | ||||
Net cash used in investing activities | (576,697 | ) | (831,633 | ) | ||||
Net cash provided by financing activities | 435,014 | 336,998 |
(1) | Includes our 75% share of depreciation, amortization and impairments; and other income attributable to Chipeta. |
(2) | Excludes income of $0.4 million for each of the three months ended March 31, 2014 and 2013, related to a component of a gas processing agreement accounted for as a capital lease. |
Three Months Ended March 31, | ||||||||
thousands except Coverage ratio | 2014 | 2013 | ||||||
Reconciliation of Distributable cash flow to Net income attributable to Western Gas Partners, LP and calculation of the Coverage ratio | ||||||||
Distributable cash flow | $ | 119,321 | $ | 79,129 | ||||
Less: | ||||||||
Distributions from equity investees | 12,313 | 5,006 | ||||||
Non-cash equity-based compensation expense | 1,097 | 877 | ||||||
Income tax (benefit) expense | (228 | ) | 4,166 | |||||
Depreciation, amortization and impairments (1) | 39,975 | 31,824 | ||||||
Add: | ||||||||
Equity income, net | 9,251 | 3,968 | ||||||
Cash paid for maintenance capital expenditures (1) | 8,842 | 6,032 | ||||||
Capitalized interest | 3,440 | 3,181 | ||||||
Cash paid for (reimbursement of) income taxes | (340 | ) | — | |||||
Other income (1) (2) | 78 | 277 | ||||||
Net income attributable to Western Gas Partners, LP | $ | 87,435 | $ | 50,714 | ||||
Distributions declared (3) | ||||||||
Limited partners | $ | 73,708 | ||||||
General partner | 25,041 | |||||||
Total | $ | 98,749 | ||||||
Coverage ratio | 1.21 | x |
(1) | Includes our 75% share of depreciation, amortization and impairments; cash paid for maintenance capital expenditures; and other income attributable to Chipeta. |
(2) | Excludes income of $0.4 million for each of the three months ended March 31, 2014 and 2013, related to a component of a gas processing agreement accounted for as a capital lease. |
(3) | Reflects distributions of $0.625 per unit declared for the three months ended March 31, 2014. |
• | maintenance capital expenditures, which include those expenditures required to maintain the existing operating capacity and service capability of our assets, such as to replace system components and equipment that have been subject to significant use over time, become obsolete or reached the end of their useful lives, to remain in compliance with regulatory or legal requirements or to complete additional well connections to maintain existing system throughput and related cash flows (for fiscal year 2014, the general partner’s board of directors has approved Estimated Maintenance Capital Expenditures (as defined in our partnership agreement) of $15.3 million per quarter); or |
• | expansion capital expenditures, which include expenditures to construct new midstream infrastructure and those expenditures incurred to extend the useful lives of our assets, reduce costs, increase revenues or increase system throughput or capacity from current levels, including well connections that increase existing system throughput. |
Three Months Ended March 31, | ||||||||
thousands | 2014 | 2013 | ||||||
Acquisitions | $ | 360,952 | $ | 600,590 | ||||
Expansion capital expenditures | $ | 180,363 | $ | 160,431 | ||||
Maintenance capital expenditures | 8,964 | 6,032 | ||||||
Total capital expenditures (1) | $ | 189,327 | $ | 166,463 | ||||
Capital incurred (2) | $ | 170,909 | $ | 163,663 |
(1) | Capital expenditures for the three months ended March 31, 2014 and 2013, included $3.4 million and $3.2 million, respectively, of capitalized interest. Capital expenditures included the noncontrolling interest owner’s share of Chipeta’s capital expenditures, funded by contributions from the noncontrolling interest owner for all periods presented. |
(2) | Includes the noncontrolling interest owner’s share of Chipeta’s capital incurred, funded by contributions from the noncontrolling interest owner for all periods presented. Capital incurred for the three months ended March 31, 2014 and 2013, included $3.4 million and $3.2 million, respectively, of capitalized interest. Capital incurred for the three months ended March 31, 2013, included $8.8 million of pre-acquisition capital incurred for the Non-Operated Marcellus Interest. |
Three Months Ended March 31, | ||||||||
thousands | 2014 | 2013 | ||||||
Net cash provided by (used in): | ||||||||
Operating activities | $ | 124,046 | $ | 138,170 | ||||
Investing activities | (576,697 | ) | (831,633 | ) | ||||
Financing activities | 435,014 | 336,998 | ||||||
Net increase (decrease) in cash and cash equivalents | $ | (17,637 | ) | $ | (356,465 | ) |
• | $356.3 million of cash paid for the acquisition of the TEFR Interests; |
• | $189.3 million of capital expenditures, primarily related to the construction of the Lancaster plant and compression expansion projects at the Wattenberg system (both located in the DJ Basin complex); |
• | $22.0 million of cash paid related to the construction of the Front Range pipeline, which was completed during the first quarter of 2014; |
• | $4.7 million of cash paid for equipment purchases from Anadarko; |
• | $2.5 million of cash paid to a White Cliffs expansion project; and |
• | $2.0 million of distributions from equity investments in excess of cumulative earnings. |
• | $465.5 million of cash paid for the Non-Operated Marcellus Interest acquisition; |
• | $166.5 million of capital expenditures; |
• | $134.9 million of cash paid for the Anadarko-Operated Marcellus Interest acquisition; and |
• | $4.8 million of cash paid related to a White Cliffs expansion project. |
• | $350.0 million of borrowings to fund the acquisition of the TEFR Interests; |
• | $390.1 million of net proceeds from the 2044 Notes offering in March 2014, after underwriting and original issue discounts and offering costs, all of which was used to repay a portion of our outstanding borrowings under our RCF, including $350.0 million of borrowings to fund the acquisition of the TEFR Interests; |
• | $100.2 million of net proceeds from the additional 2018 Notes offering in March 2014, after underwriting discounts, original issue premium and offering costs, part of which was used to repay a portion of our outstanding borrowings under our RCF; |
• | $18.2 million of net proceeds related to the partial exercise of the underwriters’ over-allotment option granted in connection with our December 2013 equity offering; |
• | $80.0 million of borrowings to fund capital expenditures and general partnership purposes; and |
• | $0.4 million of net proceeds from the issuance of general partner units to our general partner to maintain its 2.0% general partner interest after common units were issued in conjunction with the acquisition of the TEFR Interests. |
• | $250.0 million of borrowings to fund the Non-Operated Marcellus Interest acquisition; |
• | $133.5 million of borrowings to fund the Anadarko-Operated Marcellus Interest acquisition; and |
• | $0.5 million of net proceeds from the issuance of general partner units to our general partner to maintain its 2.0% general partner interest after common units were issued in conjunction with the Non-Operated Marcellus Interest acquisition. |
Exhibit Number | Description | |
2.1# | Contribution, Conveyance and Assumption Agreement by and among Western Gas Partners, LP, Western Gas Holdings, LLC, Anadarko Petroleum Corporation, WGR Holdings, LLC, Western Gas Resources, Inc., WGR Asset Holding Company LLC, Western Gas Operating, LLC and WGR Operating, LP, dated as of May 14, 2008 (incorporated by reference to Exhibit 10.2 to Western Gas Partners, LP’s Current Report on Form 8-K filed on May 14, 2008, File No. 001-34046). | |
2.2# | Contribution Agreement, dated as of November 11, 2008, by and among Western Gas Resources, Inc., WGR Asset Holding Company LLC, WGR Holdings, LLC, Western Gas Holdings, LLC, Western Gas Partners, LP, Western Gas Operating, LLC and WGR Operating, LP. (incorporated by reference to Exhibit 10.1 to Western Gas Partners, LP’s Current Report on Form 8-K filed on November 13, 2008, File No. 001-34046). | |
2.3# | Contribution Agreement, dated as of July 10, 2009, by and among Western Gas Resources, Inc., WGR Asset Holding Company LLC, Anadarko Uintah Midstream, LLC, WGR Holdings, LLC, Western Gas Holdings, LLC, WES GP, Inc., Western Gas Partners, LP, Western Gas Operating, LLC and WGR Operating, LP. (incorporated by reference to Exhibit 2.1 to Western Gas Partners, LP’s Current Report on Form 8-K filed on July 23, 2009, File No. 001-34046). | |
2.4# | Contribution Agreement, dated as of January 29, 2010 by and among Western Gas Resources, Inc., WGR Asset Holding Company LLC, Mountain Gas Resources LLC, WGR Holdings, LLC, Western Gas Holdings, LLC, WES GP, Inc., Western Gas Partners, LP, Western Gas Operating, LLC and WGR Operating, LP. (incorporated by reference to Exhibit 2.1 to Western Gas Partners, LP’s Current Report on Form 8-K filed on February 3, 2010 File No. 001-34046). | |
2.5# | Contribution Agreement, dated as of July 30, 2010, by and among Western Gas Resources, Inc., WGR Asset Holding Company LLC, WGR Holdings, LLC, Western Gas Holdings, LLC, WES GP, Inc., Western Gas Partners, LP, Western Gas Operating, LLC and WGR Operating, LP. (incorporated by reference to Exhibit 2.1 to Western Gas Partners, LP’s Current Report on Form 8-K filed on August 5, 2010, File No. 001-34046). | |
2.6# | Purchase and Sale Agreement, dated as of January 14, 2011, by and among Western Gas Partners, LP, Kerr-McGee Gathering LLC and Encana Oil & Gas (USA) Inc. (incorporated by reference to Exhibit 2.1 to Western Gas Partners, LP’s Current Report on Form 8-K filed on January 18, 2011 File No. 001-34046). | |
2.7# | Contribution Agreement, dated as of December 15, 2011, by and among Western Gas Resources, Inc., WGR Asset Holding Company LLC, WGR Holdings, LLC, Western Gas Holdings, LLC, WES GP, Inc., Western Gas Partners, LP, Western Gas Operating, LLC and WGR Operating, LP. (incorporated by reference to Exhibit 2.1 to Western Gas Partners, LP’s Current Report on Form 8-K filed on December 15, 2011, File No. 001-34046). | |
2.8# | Contribution Agreement, dated as of February 27, 2013, by and among Anadarko Marcellus Midstream, L.L.C., Western Gas Partners, LP, Western Gas Operating, LLC, WGR Operating, LP, Anadarko Petroleum Corporation and Anadarko E&P Onshore LLC (incorporated by reference to Exhibit 2.1 to Western Gas Partners, LP’s Current Report on Form 8-K filed on March 5, 2013, File No. 001-34046). | |
2.9# | Contribution Agreement, dated as of February 27, 2014, by and among WGR Asset Holding Company, LLC, APC Midstream Holdings, LLC, Western Gas Partners, LP, Western Gas Operating, LLC, WGR Operating, LP and Anadarko Petroleum Corporation (incorporated by reference to Exhibit 2.9 to the Annual Report on Form 10-K filed by Western Gas Partners, LP on February 28, 2014, File No. 001-34046). |
Exhibit Number | Description | |
3.1 | Certificate of Limited Partnership of Western Gas Partners, LP (incorporated by reference to Exhibit 3.1 to Western Gas Partners, LP’s Registration Statement on Form S-1 filed on October 15, 2007, File No. 333-146700). | |
3.2 | First Amended and Restated Agreement of Limited Partnership of Western Gas Partners, LP, dated May 14, 2008 (incorporated by reference to Exhibit 3.1 to Western Gas Partners, LP’s Current Report on Form 8-K filed on May 14, 2008, File No. 001-34046). | |
3.3 | Amendment No. 1 to First Amended and Restated Agreement of Limited Partnership of Western Gas Partners, LP dated December 19, 2008 (incorporated by reference to Exhibit 3.1 to Western Gas Partners, LP’s Current Report on Form 8-K filed on December 24, 2008, File No. 001-34046). | |
3.4 | Amendment No. 2 to First Amended and Restated Agreement of Limited Partnership of Western Gas Partners, LP, dated as of April 15, 2009 (incorporated by reference to Exhibit 3.1 to Western Gas Partners, LP’s Current Report on Form 8-K filed on April 20, 2009, File No. 001-34046). | |
3.5 | Amendment No. 3 to First Amended and Restated Agreement of Limited Partnership of Western Gas Partners, LP dated July 22, 2009 (incorporated by reference to Exhibit 3.1 to Western Gas Partners, LP’s Current Report on Form 8-K filed on July 23, 2009, File No. 001-34046). | |
3.6 | Amendment No. 4 to First Amended and Restated Agreement of Limited Partnership of Western Gas Partners, LP dated January 29, 2010 (incorporated by reference to Exhibit 3.1 to Western Gas Partners, LP’s Current Report on Form 8-K filed on February 3, 2010, File No. 001-34046). | |
3.7 | Amendment No. 5 to First Amended and Restated Agreement of Limited Partnership of Western Gas Partners, LP, dated August 2, 2010 (incorporated by reference to Exhibit 3.1 to Western Gas Partners, LP’s Current Report on Form 8-K filed on August 5, 2010, File No. 001-34046). | |
3.8 | Amendment No. 6 to First Amended and Restated Agreement of Limited Partnership of Western Gas Partners, LP, dated July 8, 2011 (incorporated by reference to Exhibit 3.1 to Western Gas Partners, LP’s Current Report on Form 8-K filed on July 8, 2011, File No. 001-34046). | |
3.9 | Amendment No. 7 to First Amended and Restated Agreement of Limited Partnership of Western Gas Partners, LP, dated January 13, 2012 (incorporated by reference to Exhibit 3.1 to Western Gas Partners, LP’s Current Report on Form 8-K filed on January 17, 2012, File No. 001-34046). | |
3.10 | Amendment No. 8 to First Amended and Restated Agreement of Limited Partnership of Western Gas Partners, LP, dated August 1, 2012 (incorporated by reference to Exhibit 3.10 to Western Gas Partners, LP’s Quarterly Report on Form 10-Q filed on August 2, 2012, File No. 001-34046). | |
3.11 | Amendment No. 9 to First Amended and Restated Agreement of Limited Partnership of Western Gas Partners, LP, dated December 12, 2012 (incorporated by reference to Exhibit 3.1 to Western Gas Partners, LP’s Current Report on Form 8-K filed on December 12, 2012, File No. 001-34046). | |
3.12 | Amendment No. 10 to First Amended and Restated Agreement of Limited Partnership of Western Gas Partners, LP, dated March 1, 2013 (incorporated by reference to Exhibit 3.1 to Western Gas Partners, LP’s Current Report on Form 8-K filed on March 5, 2013, File No. 001-34046). | |
3.13 | Amendment No. 11 to First Amended and Restated Agreement of Limited Partnership of Western Gas Partners, LP, dated March 3, 2014 (incorporated by reference to Exhibit 3.1 to Western Gas Partners, LP’s Current Report on Form 8-K filed on March 5, 2014, File No. 001-34046). | |
3.14 | Certificate of Formation of Western Gas Holdings, LLC (incorporated by reference to Exhibit 3.3 to Western Gas Partners, LP’s Registration Statement on Form S-1 filed on October 15, 2007, File No. 333-146700). | |
3.15 | Second Amended and Restated Limited Liability Company Agreement of Western Gas Holdings, LLC, dated December 12, 2012 (incorporated by reference to Exhibit 3.2 to Western Gas Partners, LP’s Current Report on Form 8-K filed on December 12, 2012, File No. 001-34046). | |
4.1 | Specimen Unit Certificate for the Common Units (incorporated by reference to Exhibit 4.1 to Western Gas Partners, LP’s Quarterly Report on Form 10-Q filed on June 13, 2008, File No. 001-34046). | |
4.2 | Indenture, dated as of May 18, 2011, among Western Gas Partners, LP, as Issuer, the Subsidiary Guarantors named therein, as Guarantors, and Wells Fargo Bank, National Association, as Trustee (incorporated by reference to Exhibit 4.1 to Western Gas Partners, LP’s Current Report on Form 8-K filed on May 18, 2011, File No. 001-34046). |
Exhibit Number | Description | |
4.3 | First Supplemental Indenture, dated as of May 18, 2011, among Western Gas Partners, LP, as Issuer, the Subsidiary Guarantors named therein, as Guarantors, and Wells Fargo Bank, National Association, as Trustee (incorporated by reference to Exhibit 4.2 to Western Gas Partners, LP’s Current Report on Form 8-K filed on May 18, 2011, File No. 001-34046). | |
4.4 | Form of 5.375% Senior Notes due 2021 (incorporated by reference to Exhibit 4.2 to Western Gas Partners, LP’s Current Report on Form 8-K filed on May 18, 2011, File No. 001-34046). | |
4.5 | Fifth Supplemental Indenture, dated as of August 14, 2013, among Western Gas Partners, LP, as Issuer, and Wells Fargo Bank, National Association, as Trustee (incorporated by reference to Exhibit 4.1 to Western Gas Partners, LP’s Current Report on Form 8-K filed on August 14, 2013, File No. 001-34046). | |
4.6 | Form of 4.000% Senior Notes due 2022 (incorporated by reference to Exhibit 4.1 to Western Gas Partners, LP’s Current Report on Form 8-K filed on June 28, 2012, File No. 001-34046). | |
4.7 | Form of 2.600% Senior Notes due 2018 (incorporated by reference to Exhibit 4.1 to Western Gas Partners, LP’s Current Report on Form 8-K filed on August 14, 2013, File No. 001-34046). | |
4.8 | Sixth Supplemental Indenture, dated as of March 20, 2014, among Western Gas Partners, LP, as Issuer, and Wells Fargo Bank, National Association, as Trustee (incorporated by reference to Exhibit 4.2 to Western Gas Partners, LP’s Current Report on Form 8-K filed on March 20, 2014, File No. 001-34046). | |
4.9 | Form of 5.450% Senior Notes due 2044 (incorporated by reference to Exhibit 4.2 to Western Gas Partners, LP’s Current Report on Form 8-K filed on March 20, 2014, File No. 001-34046). | |
10.1 | Second Amended and Restated Revolving Credit Agreement, dated as of February 26, 2014, among Western Gas Partners, LP, Wells Fargo Bank National Association, as the administrative agent and the lenders party thereto (incorporated by reference to Exhibit 10.15 to the Annual Report on From 10-K filed by Western Gas Partners, LP on February 28, 2014, File No. 001-34046). | |
10.2 | Indemnification Agreement, dated March 3, 2014, between Western Gas Holdings, LLC and APC Midstream Holdings, LLC (incorporated by reference to Exhibit 10.1 to Western Gas Partners, LP’s Current Report on Form 8-K filed on March 5, 2014, File No. 001-34046). | |
10.3 | First Amendment to the Third Amended and Restated Indemnification Agreement, dated March 3, 2014, between Western Gas Holdings, LLC and Western Gas Resources, Inc. (incorporated by reference to Exhibit 10.3 to Western Gas Partners, LP’s Current Report on Form 8-K filed on March 5, 2014, File No. 001-34046). | |
10.4 | USH2 Indemnification Agreement, dated March 3, 2014, between Western Gas Holdings, LLC and USH2 LLC (incorporated by reference to Exhibit 10.4 to Western Gas Partners, LP’s Current Report on Form 8-K filed on March 5, 2014, File No. 001-34046). | |
31.1* | Certification of Chief Executive Officer, pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
31.2* | Certification of Chief Financial Officer, pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
32.1** | Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
101.INS* | XBRL Instance Document | |
101.SCH* | XBRL Schema Document | |
101.CAL* | XBRL Calculation Linkbase Document | |
101.DEF* | XBRL Definition Linkbase Document | |
101.LAB* | XBRL Label Linkbase Document | |
101.PRE* | XBRL Presentation Linkbase Document |
# | Pursuant to Item 601(b)(2) of Regulation S-K, the registrant agrees to furnish supplementally a copy of any omitted schedule to the Securities and Exchange Commission upon request. |
WESTERN GAS PARTNERS, LP | |
May 7, 2014 | |
/s/ Donald R. Sinclair | |
Donald R. Sinclair President and Chief Executive Officer Western Gas Holdings, LLC (as general partner of Western Gas Partners, LP) | |
May 7, 2014 | |
/s/ Benjamin M. Fink | |
Benjamin M. Fink Senior Vice President, Chief Financial Officer and Treasurer Western Gas Holdings, LLC (as general partner of Western Gas Partners, LP) |
1. | I have reviewed this quarterly report on Form 10-Q of Western Gas Partners, LP (the “registrant”); |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Donald R. Sinclair | |
Donald R. Sinclair President and Chief Executive Officer Western Gas Holdings, LLC (as general partner of Western Gas Partners, LP) |
1. | I have reviewed this quarterly report on Form 10-Q of Western Gas Partners, LP (the “registrant”); |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Benjamin M. Fink | |
Benjamin M. Fink Senior Vice President, Chief Financial Officer and Treasurer Western Gas Holdings, LLC (as general partner of Western Gas Partners, LP) |
(1) | the Quarterly Report on Form 10-Q of the Partnership for the period ending March 31, 2014, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership. |
May 7, 2014 | ||
/s/ Donald R. Sinclair | ||
Donald R. Sinclair | ||
President and Chief Executive Officer | ||
Western Gas Holdings, LLC | ||
(as general partner of Western Gas Partners, LP) | ||
May 7, 2014 | ||
/s/ Benjamin M. Fink | ||
Benjamin M. Fink | ||
Senior Vice President, Chief Financial Officer and Treasurer | ||
Western Gas Holdings, LLC | ||
(as general partner of Western Gas Partners, LP) |
Transactions With Affiliates - Summary Table (details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | |||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2014
|
Mar. 31, 2013
|
|||||||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||||||||
Revenues | $ 279,457 | $ 225,766 | [1] | |||||||||||||||||||||||
Equity income, net | 9,251 | [2],[3] | 3,968 | [1],[2],[3],[4] | ||||||||||||||||||||||
Cost of product | 91,950 | [5] | 83,083 | [1],[5] | ||||||||||||||||||||||
Operation and maintenance | 40,532 | [5] | 36,739 | [1],[5] | ||||||||||||||||||||||
General and administrative | 8,415 | [5] | 7,664 | [1],[5] | ||||||||||||||||||||||
Operating expenses | 188,550 | 165,711 | [1] | |||||||||||||||||||||||
Interest income, net | 4,225 | [6] | 4,225 | [6] | ||||||||||||||||||||||
Distributions to unitholders | 98,749 | [7] | 70,143 | |||||||||||||||||||||||
Affiliated Entity [Member]
|
||||||||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||||||||
Revenues | 206,290 | [8] | 177,569 | [1],[8] | ||||||||||||||||||||||
Cost of product | 16,634 | [8] | 31,929 | [8] | ||||||||||||||||||||||
Operation and maintenance | 11,099 | [9] | 13,366 | [9] | ||||||||||||||||||||||
General and administrative | 6,814 | [10] | 5,869 | [10] | ||||||||||||||||||||||
Operating expenses | 34,547 | 51,164 | ||||||||||||||||||||||||
Distributions to unitholders | $ 51,882 | [11] | $ 36,868 | [11] | ||||||||||||||||||||||
|
Debt and Interest Expense - Additional Information (details) (USD $)
|
3 Months Ended | 3 Months Ended | 12 Months Ended | 1 Months Ended | 3 Months Ended | 3 Months Ended | 1 Months Ended | 3 Months Ended | 1 Months Ended | 3 Months Ended | 1 Months Ended | ||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2014
|
Mar. 31, 2013
|
Dec. 31, 2013
|
Mar. 31, 2014
Revolving Credit Facility [Member]
|
Dec. 31, 2013
Revolving Credit Facility [Member]
|
Feb. 28, 2014
Revolving Credit Facility [Member]
|
Mar. 31, 2011
Revolving Credit Facility [Member]
|
Feb. 28, 2014
Revolving Credit Facility [Member]
Alternate Base Rate [Member]
|
Feb. 28, 2014
Minimum [Member]
Revolving Credit Facility [Member]
|
Feb. 28, 2014
Minimum [Member]
Revolving Credit Facility [Member]
Alternate Base Rate [Member]
|
Feb. 28, 2014
Maximum [Member]
Revolving Credit Facility [Member]
|
Feb. 28, 2014
Maximum [Member]
Revolving Credit Facility [Member]
Alternate Base Rate [Member]
|
Feb. 28, 2014
Percentage Above Federal Funds Effective Rate [Member]
Revolving Credit Facility [Member]
Alternate Base Rate [Member]
|
Mar. 31, 2014
Senior Notes 5 Point 375 Percent Due 2021 [Member]
|
Dec. 31, 2013
Senior Notes 5 Point 375 Percent Due 2021 [Member]
|
Mar. 31, 2014
Senior Notes 4 Percent Due 2022 [Member]
|
Dec. 31, 2013
Senior Notes 4 Percent Due 2022 [Member]
|
Mar. 31, 2014
Senior Notes 5 Point 45 Percent Due 2044 [Member]
|
Mar. 31, 2014
Senior Notes 5 Point 45 Percent Due 2044 [Member]
|
Dec. 31, 2013
Senior Notes 5 Point 45 Percent Due 2044 [Member]
|
Mar. 31, 2014
Senior Notes 2 Point 6 Percent Due 2018 [Member]
|
Mar. 31, 2014
Senior Notes 2 Point 6 Percent Due 2018 [Member]
|
Dec. 31, 2013
Senior Notes 2 Point 6 Percent Due 2018 [Member]
|
Mar. 31, 2014
Texas Express And Front Range [Member]
|
Mar. 31, 2014
Texas Express And Front Range [Member]
Revolving Credit Facility [Member]
|
|||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||
Principal | $ 1,920,000,000 | $ 1,420,000,000 | $ 500,000,000 | $ 500,000,000 | $ 670,000,000 | $ 670,000,000 | $ 400,000,000 | $ 400,000,000 | $ 0 | $ 350,000,000 | $ 350,000,000 | $ 250,000,000 | |||||||||||||||||||
Fixed interest rate | 5.375% | 4.00% | 5.45% | 5.45% | 2.60% | 2.60% | |||||||||||||||||||||||||
Offering percent | 98.443% | 98.443% | 100.857% | 100.857% | |||||||||||||||||||||||||||
Effective interest rate | 5.632% | 5.632% | 2.742% | 2.742% | |||||||||||||||||||||||||||
Underwriting discount | 3,500,000 | 600,000 | |||||||||||||||||||||||||||||
Debt instrument, maturity date | Jun. 01, 2021 | Jul. 01, 2022 | Apr. 01, 2044 | Aug. 15, 2018 | |||||||||||||||||||||||||||
Line of credit, expiration date | Feb. 26, 2019 | ||||||||||||||||||||||||||||||
Borrowings | 917,742,000 | 384,946,000 | [1] | 350,000,000 | [2] | 350,000,000 | |||||||||||||||||||||||||
Revolving Credit Facility, maximum borrowing capacity | 1,200,000,000 | 800,000,000 | |||||||||||||||||||||||||||||
Revolving Credit Facility, expandable maximum borrowing capacity | 1,500,000,000 | ||||||||||||||||||||||||||||||
Interest rate percent above LIBOR | 1.00% | 0.975% | 0.00% | 1.45% | 0.45% | 0.50% | |||||||||||||||||||||||||
Revolving Credit Facility, interest rate at period end | 1.45% | 1.67% | |||||||||||||||||||||||||||||
Facility fee | 0.20% | 0.25% | 0.15% | 0.30% | |||||||||||||||||||||||||||
Outstanding borrowings | 0 | ||||||||||||||||||||||||||||||
Outstanding letters of credit | 12,800,000 | ||||||||||||||||||||||||||||||
Available borrowing capacity | $ 1,190,000,000 | ||||||||||||||||||||||||||||||
|
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