Delaware | 001-34046 | 26-1075808 |
(State or other jurisdiction of incorporation or organization) | (Commission File Number) | (IRS Employer Identification No.) |
(a) | Financial Statements of Businesses Acquired | |
Financial Statements of Springfield Pipeline LLC as of December 31, 2015 and 2014, and for the years ended December 31, 2015, 2014 and 2013, a copy of which is included as Exhibit 99.1 to this Current Report on Form 8-K/A, incorporated herein by reference. | ||
(b) | Pro Forma Financial Information | |
Unaudited Pro Forma Condensed Consolidated Financial Statements of the Partnership as of December 31, 2015, and for the years ended December 31, 2015, 2014 and 2013, a copy of which is included as Exhibit 99.2 to this Current Report on Form 8-K/A, incorporated herein by reference. | ||
(d) | Exhibits | |
23.1 | Consent of KPMG LLP. | |
99.1 | Financial Statements of Springfield Pipeline LLC as of December 31, 2015 and 2014, and for the years ended December 31, 2015, 2014 and 2013. | |
99.2 | Unaudited Pro Forma Condensed Consolidated Financial Statements of the Partnership as of December 31, 2015, and for the years ended December 31, 2015, 2014 and 2013. |
WESTERN GAS PARTNERS, LP | ||||
By: | Western Gas Holdings, LLC, its general partner | |||
Dated: | May 26, 2016 | By: | /s/ Benjamin M. Fink | |
Benjamin M. Fink Senior Vice President, Chief Financial Officer and Treasurer |
Exhibit Number | Exhibit Title |
23.1 | Consent of KPMG LLP. |
99.1 | Financial Statements of Springfield Pipeline LLC as of December 31, 2015 and 2014, and for the years ended December 31, 2015, 2014 and 2013. |
99.2 | Unaudited Pro Forma Condensed Consolidated Financial Statements of the Partnership as of December 31, 2015, and for the years ended December 31, 2015, 2014 and 2013. |
SPRINGFIELD PIPELINE LLC INDEX TO FINANCIAL STATEMENTS | |
Year Ended December 31, | |||||||||||||
thousands | 2015 (1) | 2014 (1) | 2013 (1) | ||||||||||
Revenues and other | |||||||||||||
Gathering, processing and transportation (2) | $ | 190,717 | $ | 148,889 | $ | 110,092 | |||||||
Natural gas and natural gas liquids sales (2) | — | 1,672 | — | ||||||||||
Other (2) | 49 | 15 | 4,555 | ||||||||||
Total revenues and other | 190,766 | 150,576 | 114,647 | ||||||||||
Operating expenses | |||||||||||||
Cost of product (3) | — | 4,001 | 4,524 | ||||||||||
Operation and maintenance (3) | 35,198 | 37,866 | 34,212 | ||||||||||
General and administrative – affiliate | 3,211 | 2,338 | 3,413 | ||||||||||
Property and other taxes | 2,755 | 2,823 | 2,437 | ||||||||||
Depreciation and amortization | 28,448 | 25,295 | 23,048 | ||||||||||
Impairments | 1,362 | 2,041 | 48,653 | ||||||||||
Total operating expenses | 70,974 | 74,364 | 116,287 | ||||||||||
Gain (loss) on divestiture and other, net | 4 | (9 | ) | — | |||||||||
Operating income (loss) | 119,796 | 76,203 | (1,640 | ) | |||||||||
Income tax (benefit) expense | 42,152 | 27,402 | (345 | ) | |||||||||
Net income (loss) | $ | 77,644 | $ | 48,801 | $ | (1,295 | ) |
(1) | These financial statements reflect Springfield Pipeline LLC’s 50.1% interest in the Springfield system (as defined in Note 1). |
(2) | Gathering, processing and transportation includes revenues from affiliates (as defined in Note 1) of $190.7 million, $148.4 million and $109.2 million for the years ended December 31, 2015, 2014 and 2013, respectively. Natural gas and natural gas liquids sales includes revenues from affiliates (as defined in Note 1) of zero for each of the years ended December 31, 2015 and 2013, and $1.7 million for the year ended December 31, 2014. Other includes revenues from affiliates (as defined in Note 1) of $0.1 million for each of the years ended December 31, 2015 and 2014 and $4.6 million for the year ended December 31, 2013. |
(3) | Cost of product includes product purchases from affiliates (as defined in Note 1) of zero, $0.1 million and $0.2 million for the years ended December 31, 2015, 2014 and 2013, respectively. Operation and maintenance includes charges from affiliates (as defined in Note 1) of $9.9 million, $9.1 million and $7.6 million for the years ended December 31, 2015, 2014 and 2013, respectively. |
December 31, | ||||||||||
thousands | 2015 (1) | 2014 (1) | ||||||||
ASSETS | ||||||||||
Current assets | ||||||||||
Accounts receivable | $ | 12,336 | $ | 13,524 | ||||||
Total current assets | 12,336 | 13,524 | ||||||||
Property, plant and equipment | ||||||||||
Cost | 652,141 | 621,927 | ||||||||
Less accumulated depreciation | 83,336 | 55,515 | ||||||||
Net property, plant and equipment | 568,805 | 566,412 | ||||||||
Goodwill | 29,500 | 29,500 | ||||||||
Total assets | $ | 610,641 | $ | 609,436 | ||||||
LIABILITIES AND NET INVESTMENT BY ANADARKO | ||||||||||
Current liabilities | ||||||||||
Accounts payable | $ | 34,055 | $ | 35,684 | ||||||
Accrued liabilities | 2,201 | 6,562 | ||||||||
Total current liabilities | 36,256 | 42,246 | ||||||||
Deferred income taxes | 133,741 | 124,273 | ||||||||
Asset retirement obligations and other | 10,046 | 8,830 | ||||||||
Total liabilities | 180,043 | 175,349 | ||||||||
Net investment by Anadarko | 430,598 | 434,087 | ||||||||
Total liabilities and net investment by Anadarko | $ | 610,641 | $ | 609,436 |
(1) | These financial statements reflect Springfield Pipeline LLC’s 50.1% interest in the Springfield system (as defined in Note 1). |
thousands | ||||
Balance at December 31, 2012 (1) | $ | 365,332 | ||
Net income (loss) | (1,295 | ) | ||
Net contributions from Anadarko | 65,439 | |||
Balance at December 31, 2013 (1) | $ | 429,476 | ||
Net income (loss) | 48,801 | |||
Net distributions to Anadarko | (44,217 | ) | ||
Net contributions from Anadarko of other assets | 27 | |||
Balance at December 31, 2014 (1) | $ | 434,087 | ||
Net income (loss) | 77,644 | |||
Net distributions to Anadarko | (81,268 | ) | ||
Net contributions from Anadarko of other assets | 135 | |||
Balance at December 31, 2015 (1) | $ | 430,598 |
(1) | These financial statements reflect Springfield Pipeline LLC’s 50.1% interest in the Springfield system (as defined in Note 1). |
Year Ended December 31, | ||||||||||||
thousands | 2015 (1) | 2014 (1) | 2013 (1) | |||||||||
Cash flows from operating activities | ||||||||||||
Net income (loss) | $ | 77,644 | $ | 48,801 | $ | (1,295 | ) | |||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||||||
Depreciation and amortization | 28,448 | 25,295 | 23,048 | |||||||||
Impairments | 1,362 | 2,041 | 48,653 | |||||||||
(Gain) loss on divestiture and other, net | (4 | ) | 9 | — | ||||||||
Deferred income taxes | 9,414 | 25,357 | 26,211 | |||||||||
Changes in assets and liabilities: | ||||||||||||
(Increase) decrease in accounts receivable | 1,243 | 8,090 | 5,007 | |||||||||
Increase (decrease) in accounts payable and accrued liabilities | (2,148 | ) | 4,182 | 5,452 | ||||||||
Change in other items, net | 77 | 511 | 1,654 | |||||||||
Net cash provided by operating activities | 116,036 | 114,286 | 108,730 | |||||||||
Cash flows from investing activities | ||||||||||||
Capital expenditures | (35,675 | ) | (82,562 | ) | (170,389 | ) | ||||||
Proceeds from the sale of assets to affiliates | 1,761 | 402 | — | |||||||||
Proceeds from the sale of assets to third parties | 61 | 12,983 | — | |||||||||
Net cash used in investing activities | (33,853 | ) | (69,177 | ) | (170,389 | ) | ||||||
Cash flows from financing activities | ||||||||||||
Increase (decrease) in outstanding checks | (915 | ) | (928 | ) | (3,780 | ) | ||||||
Net contributions from (distributions to) Anadarko | (81,268 | ) | (44,217 | ) | 65,439 | |||||||
Net cash provided by (used in) financing activities | (82,183 | ) | (45,145 | ) | 61,659 | |||||||
Net increase (decrease) in cash and cash equivalents | — | (36 | ) | — | ||||||||
Cash and cash equivalents at beginning of period | — | 36 | 36 | |||||||||
Cash and cash equivalents at end of period | $ | — | $ | — | $ | 36 | ||||||
Supplemental disclosures | ||||||||||||
Net distributions to (contributions from) Anadarko of other assets | $ | (135 | ) | $ | (27 | ) | $ | — |
(1) | These financial statements reflect Springfield Pipeline LLC’s 50.1% interest in the Springfield system (as defined in Note 1). |
Year Ended December 31, | ||||||||||||
thousands | 2015 | 2014 | 2013 | |||||||||
Current income tax expense (benefit) | ||||||||||||
Federal income tax expense (benefit) | $ | 31,832 | $ | 1,615 | $ | (26,232 | ) | |||||
State income tax expense (benefit) | 906 | 430 | (324 | ) | ||||||||
Total current income taxes | 32,738 | 2,045 | (26,556 | ) | ||||||||
Deferred income tax expense (benefit) | ||||||||||||
Federal income tax expense (benefit) | 9,903 | 24,749 | 25,544 | |||||||||
State income tax expense (benefit) | (489 | ) | 608 | 667 | ||||||||
Total deferred income tax expenses (benefit) | 9,414 | 25,357 | 26,211 | |||||||||
Total income tax expense (benefit) | $ | 42,152 | $ | 27,402 | $ | (345 | ) |
Year Ended December 31, | ||||||||||||
thousands except percentages | 2015 | 2014 | 2013 | |||||||||
Income (loss) before income taxes | $ | 119,796 | $ | 76,203 | $ | (1,640 | ) | |||||
Statutory tax rate | — | % | — | % | — | % | ||||||
Tax computed at statutory rate | $ | — | $ | — | $ | — | ||||||
Adjustments resulting from: | ||||||||||||
Federal taxes on income attributable to Springfield | 41,881 | 26,728 | (568 | ) | ||||||||
State taxes on income attributable to Springfield (net of federal benefit) | 271 | 674 | 223 | |||||||||
Income tax expense (benefit) | $ | 42,152 | $ | 27,402 | $ | (345 | ) | |||||
Effective tax rate | 35 | % | 36 | % | 21 | % |
December 31, | ||||||||
thousands | 2015 | 2014 | ||||||
Depreciable property | $ | (133,741 | ) | $ | (124,273 | ) | ||
Total deferred income tax liabilities | $ | (133,741 | ) | $ | (124,273 | ) |
December 31, | ||||||||||
thousands | Estimated Useful Life | 2015 | 2014 | |||||||
Land | n/a | $ | 553 | $ | 553 | |||||
Gathering systems | 3 to 47 years | 640,242 | 586,477 | |||||||
Assets under construction | n/a | 5,167 | 28,922 | |||||||
Other | 3 to 40 years | 6,179 | 5,975 | |||||||
Total property, plant and equipment | 652,141 | 621,927 | ||||||||
Accumulated depreciation | 83,336 | 55,515 | ||||||||
Net property, plant and equipment | $ | 568,805 | $ | 566,412 |
Year Ended December 31, | ||||||||
thousands | 2015 | 2014 | ||||||
Carrying amount of asset retirement obligations at beginning of year | $ | 9,120 | $ | 4,028 | ||||
Liabilities incurred | 369 | 487 | ||||||
Liabilities settled | (528 | ) | (746 | ) | ||||
Accretion expense | 438 | 243 | ||||||
Revisions in estimated liabilities | 705 | 5,108 | ||||||
Carrying amount of asset retirement obligations at end of year | $ | 10,104 | $ | 9,120 |
• | the contribution agreement by which the Partnership acquired Springfield, pursuant to which Anadarko agreed to indemnify the Partnership against certain losses resulting from any breach of Anadarko’s representations, warranties, covenants or agreements and for certain other matters; |
• | an omnibus agreement that provides for certain indemnities, reimbursement for expenses paid by Anadarko on behalf of the Partnership and compensation to Anadarko for providing the Partnership with certain general and administrative services and insurance coverage; |
• | a tax sharing agreement pursuant to which the Partnership will reimburse Anadarko for the Partnership’s share of Texas margin tax borne by Anadarko as a result of the financial results of Springfield being included in a combined or consolidated tax return filed by Anadarko with respect to activity subsequent to March 1, 2016; and |
• | other routine agreements with Anadarko, its subsidiaries or affiliates that arise in the ordinary course of business for gathering services and other operational matters. |
• | the Partnership’s $247.5 million of borrowings under its revolving credit facility (“RCF”) to fund a portion of the cash consideration paid for the acquisition of Springfield; |
• | the Partnership’s issuance of 14,030,611 Series A Preferred units to private investors and receipt of related proceeds to fund a portion of the cash consideration paid for the acquisition of Springfield; |
• | the Partnership’s issuance of 835,841 common units to WGP and receipt of related proceeds to fund a portion of the cash consideration paid for the acquisition of Springfield; |
• | the Partnership’s issuance of 1,253,761 common units to Anadarko in connection with the acquisition of Springfield; and |
• | Anadarko’s contribution of Springfield to the Partnership. |
• | the contribution agreement by which the Partnership acquired Springfield, pursuant to which Anadarko agreed to indemnify the Partnership against certain losses resulting from any breach of Anadarko’s representations, warranties, covenants or agreements, and for certain other matters; |
• | the Convertible Preferred Unit Purchase Agreement, pursuant to which the Partnership issued and sold in a private placement an aggregate of 14,030,611 Series A Preferred units representing limited partner interests in the Partnership, with an option to sell up to an additional 7,892,220 Series A Preferred units; |
• | the Registration Rights Agreement with the Series A Preferred unit purchasers relating to the registered resale of the common units representing limited partner interests in the Partnership issuable upon conversion of the Series A Preferred units; |
• | the Common Unit Purchase Agreement, pursuant to which the Partnership issued and sold WES common units to WGP; |
• | the Board Observation Agreement with the Series A Preferred unit purchasers relating to the purchasers’ right to appoint a person to act as an observer with respect to the Board of Directors of the general partner under certain, limited circumstances; |
• | the Second Amended and Restated Agreement of Limited Partnership of Western Gas Partners, LP, establishing the terms of the Series A Preferred units; |
• | a tax sharing agreement pursuant to which the Partnership will reimburse Anadarko for the Partnership’s estimated share of Texas margin tax borne by Anadarko as a result of the financial results of Springfield being included in a combined or consolidated tax return filed by Anadarko with respect to activity subsequent to March 1, 2016; and |
• | other routine agreements with Anadarko or its subsidiaries that arise in the ordinary course of business for gathering services and other operational matters. |
thousands except per-unit amounts | Partnership Historical | Springfield Historical | Pro Forma Adjustments | Partnership Pro Forma | ||||||||||||
Revenues and other – affiliates | ||||||||||||||||
Gathering, processing and transportation | $ | 581,644 | $ | 190,717 | $ | — | $ | 772,361 | ||||||||
Natural gas, natural gas liquids and drip condensate sales | 447,106 | — | — | 447,106 | ||||||||||||
Other | 1,172 | 66 | (66 | ) | (a) | 1,172 | ||||||||||
Total revenues and other – affiliates | 1,029,922 | 190,783 | (66 | ) | 1,220,639 | |||||||||||
Revenues and other – third parties | ||||||||||||||||
Gathering, processing and transportation | 356,477 | — | — | 356,477 | ||||||||||||
Natural gas, natural gas liquids and drip condensate sales | 170,843 | — | — | 170,843 | ||||||||||||
Other | 4,130 | (17 | ) | — | 4,113 | |||||||||||
Total revenues and other – third parties | 531,450 | (17 | ) | — | 531,433 | |||||||||||
Total revenues and other | 1,561,372 | 190,766 | (66 | ) | 1,752,072 | |||||||||||
Equity income, net (1) | 71,251 | — | — | 71,251 | ||||||||||||
Operating expenses | ||||||||||||||||
Cost of product (2) | 528,435 | — | (66 | ) | (a) | 528,369 | ||||||||||
Operation and maintenance (2) | 296,774 | 35,198 | — | 331,972 | ||||||||||||
General and administrative (2) | 38,108 | 3,211 | — | 41,319 | ||||||||||||
Property and other taxes | 30,533 | 2,755 | — | 33,288 | ||||||||||||
Depreciation and amortization | 244,163 | 28,448 | — | 272,611 | ||||||||||||
Impairments | 514,096 | 1,362 | — | 515,458 | ||||||||||||
Total operating expenses | 1,652,109 | 70,974 | (66 | ) | 1,723,017 | |||||||||||
Gain (loss) on divestiture and other, net | 57,020 | 4 | — | 57,024 | ||||||||||||
Operating income (loss) | 37,534 | 119,796 | — | 157,330 | ||||||||||||
Interest income – affiliates | 16,900 | — | — | 16,900 | ||||||||||||
Interest expense (3) | (113,872 | ) | — | (3,812 | ) | (c) | (117,684 | ) | ||||||||
Other income (expense), net | (619 | ) | — | — | (619 | ) | ||||||||||
Income (loss) before income taxes | (60,057 | ) | 119,796 | (3,812 | ) | 55,927 | ||||||||||
Income tax (benefit) expense | 3,380 | 42,152 | (42,673 | ) | (b) | 2,859 | ||||||||||
Net income (loss) | (63,437 | ) | 77,644 | 38,861 | 53,068 | |||||||||||
Net income attributable to noncontrolling interest | 10,101 | — | — | 10,101 | ||||||||||||
Net income (loss) attributable to Western Gas Partners, LP | $ | (73,538 | ) | $ | 77,644 | $ | 38,861 | $ | 42,967 | |||||||
Limited partners’ interest in net income (loss): | ||||||||||||||||
Net income (loss) attributable to Western Gas Partners, LP | $ | (73,538 | ) | $ | 42,967 | |||||||||||
Pre-acquisition net (income) loss allocated to Anadarko | (1,742 | ) | (1,742 | ) | ||||||||||||
Series A Preferred units interest in net (income) loss (4) | — | (38,164 | ) | |||||||||||||
General partner interest in net (income) loss (4) | (180,996 | ) | (185,057 | ) | ||||||||||||
Common and Class C limited partners’ interest in net income (loss) (4) | (256,276 | ) | (181,996 | ) | ||||||||||||
Net income (loss) per common unit – basic and diluted (5) | $ | (1.95 | ) | $ | (1.40 | ) |
(1) | Income earned from equity investments is classified as affiliate. |
(2) | As it relates to the “Partnership Historical” column, cost of product includes product purchases from Anadarko of $167.4 million, operation and maintenance includes charges from Anadarko of $67.1 million, and general and administrative includes charges from Anadarko of $30.7 million for the year ended December 31, 2015. As it relates to the “Springfield Historical” column, operation and maintenance includes charges from Anadarko of $9.9 million and general and administrative expense includes charges from Anadarko of $3.2 million for the year ended December 31, 2015. |
(3) | As it relates to the “Partnership Historical” column, includes affiliate interest expense of $14.4 million for the year ended December 31, 2015. |
(4) | Represents net income (loss) earned on and subsequent to the date of acquisition of the Partnership assets. |
(5) | See Note 3 for the calculation of net income (loss) per common unit. |
thousands except per-unit amounts | Partnership Historical | Springfield Historical | Pro Forma Adjustments | Partnership Pro Forma | ||||||||||||
Revenues and other – affiliates | ||||||||||||||||
Gathering, processing and transportation | $ | 467,540 | $ | 148,367 | $ | — | $ | 615,907 | ||||||||
Natural gas, natural gas liquids and drip condensate sales | 581,317 | 1,672 | — | 582,989 | ||||||||||||
Other | 5,078 | 67 | (67 | ) | (a) | 5,078 | ||||||||||
Total revenues and other – affiliates | 1,053,935 | 150,106 | (67 | ) | 1,203,974 | |||||||||||
Revenues and other – third parties | ||||||||||||||||
Gathering, processing and transportation | 277,605 | 522 | — | 278,127 | ||||||||||||
Natural gas, natural gas liquids and drip condensate sales | 42,916 | — | — | 42,916 | ||||||||||||
Other | 8,412 | (52 | ) | — | 8,360 | |||||||||||
Total revenues and other – third parties | 328,933 | 470 | — | 329,403 | ||||||||||||
Total revenues and other | 1,382,868 | 150,576 | (67 | ) | 1,533,377 | |||||||||||
Equity income, net (1) | 57,836 | — | — | 57,836 | ||||||||||||
Operating expenses | ||||||||||||||||
Cost of product (2) | 454,445 | 4,001 | (67 | ) | (a) | 458,379 | ||||||||||
Operation and maintenance (2) | 255,844 | 37,866 | — | 293,710 | ||||||||||||
General and administrative (2) | 36,223 | 2,338 | — | 38,561 | ||||||||||||
Property and other taxes | 26,066 | 2,823 | — | 28,889 | ||||||||||||
Depreciation and amortization | 186,514 | 25,295 | — | 211,809 | ||||||||||||
Impairments | 3,084 | 2,041 | — | 5,125 | ||||||||||||
Total operating expenses | 962,176 | 74,364 | (67 | ) | 1,036,473 | |||||||||||
Gain (loss) on divestiture and other, net | — | (9 | ) | — | (9 | ) | ||||||||||
Operating income (loss) | 478,528 | 76,203 | — | 554,731 | ||||||||||||
Interest income – affiliates | 16,900 | — | — | 16,900 | ||||||||||||
Interest expense | (76,766 | ) | — | (3,614 | ) | (c) | (80,380 | ) | ||||||||
Other income (expense), net | 864 | — | — | 864 | ||||||||||||
Income (loss) before income taxes | 419,526 | 76,203 | (3,614 | ) | 492,115 | |||||||||||
Income tax (benefit) expense | 11,659 | 27,402 | (35,247 | ) | (b) | 3,814 | ||||||||||
Net income (loss) | 407,867 | 48,801 | 31,633 | 488,301 | ||||||||||||
Net income attributable to noncontrolling interest | 14,025 | — | — | 14,025 | ||||||||||||
Net income (loss) attributable to Western Gas Partners, LP | $ | 393,842 | $ | 48,801 | $ | 31,633 | $ | 474,276 | ||||||||
Limited partners’ interest in net income (loss): | ||||||||||||||||
Net income (loss) attributable to Western Gas Partners, LP | $ | 393,842 | $ | 474,276 | ||||||||||||
Pre-acquisition net (income) loss allocated to Anadarko | (16,353 | ) | (16,353 | ) | ||||||||||||
Series A Preferred units interest in net (income) loss (3) | — | (49,173 | ) | |||||||||||||
General partner interest in net (income) loss (3) | (120,980 | ) | (123,559 | ) | ||||||||||||
Common and Class C limited partners’ interest in net income (loss) (3) | 256,509 | 285,191 | ||||||||||||||
Net income (loss) per common unit – basic (4) | $ | 2.13 | $ | 2.32 | ||||||||||||
Net income (loss) per common unit – diluted (4) | 2.12 | 2.32 |
(1) | Income earned from equity investments is classified as affiliate. |
(2) | As it relates to the “Partnership Historical” column, cost of product includes product purchases from Anadarko of $127.9 million, operation and maintenance includes charges from Anadarko of $62.3 million, and general and administrative includes charges from Anadarko of $29.0 million for the year ended December 31, 2014. As it relates to the “Springfield Historical” column, cost of product includes product purchases from Anadarko of $0.1 million, operation and maintenance includes charges from Anadarko of $9.1 million and general and administrative expense includes charges from Anadarko of $2.3 million for the year ended December 31, 2014. |
(3) | Represents net income (loss) earned on and subsequent to the date of acquisition of the Partnership assets. |
(4) | See Note 3 for the calculation of net income (loss) per common unit. |
thousands except per-unit amounts | Partnership Historical | Springfield Historical | Pro Forma Adjustments | Partnership Pro Forma | ||||||||||||
Revenues and other – affiliates | ||||||||||||||||
Gathering, processing and transportation | $ | 340,116 | $ | 109,156 | $ | — | $ | 449,272 | ||||||||
Natural gas, natural gas liquids and drip condensate sales | 502,219 | — | — | 502,219 | ||||||||||||
Other | 1,868 | 4,622 | (69 | ) | (a) | 6,421 | ||||||||||
Total revenues and other – affiliates | 844,203 | 113,778 | (69 | ) | 957,912 | |||||||||||
Revenues and other – third parties | ||||||||||||||||
Gathering, processing and transportation | 190,877 | 936 | — | 191,813 | ||||||||||||
Natural gas, natural gas liquids and drip condensate sales | 46,289 | — | — | 46,289 | ||||||||||||
Other | 4,113 | (67 | ) | — | 4,046 | |||||||||||
Total revenues and other – third parties | 241,279 | 869 | — | 242,148 | ||||||||||||
Total revenues and other | 1,085,482 | 114,647 | (69 | ) | 1,200,060 | |||||||||||
Equity income, net (1) | 22,948 | — | — | 22,948 | ||||||||||||
Operating expenses | ||||||||||||||||
Cost of product (2) | 373,171 | 4,524 | (69 | ) | (a) | 377,626 | ||||||||||
Operation and maintenance (2) | 201,759 | 34,212 | — | 235,971 | ||||||||||||
General and administrative (2) | 31,353 | 3,413 | — | 34,766 | ||||||||||||
Property and other taxes | 23,806 | 2,437 | — | 26,243 | ||||||||||||
Depreciation and amortization | 149,815 | 23,048 | — | 172,863 | ||||||||||||
Impairments | 1,267 | 48,653 | — | 49,920 | ||||||||||||
Total operating expenses | 781,171 | 116,287 | (69 | ) | 897,389 | |||||||||||
Operating income (loss) | 327,259 | (1,640 | ) | — | 325,619 | |||||||||||
Interest income – affiliates | 16,900 | — | — | 16,900 | ||||||||||||
Interest expense | (51,797 | ) | — | (4,118 | ) | (c) | (55,915 | ) | ||||||||
Other income (expense), net | 1,837 | — | — | 1,837 | ||||||||||||
Income (loss) before income taxes | 294,199 | (1,640 | ) | (4,118 | ) | 288,441 | ||||||||||
Income tax (benefit) expense | 4,660 | (345 | ) | (4,285 | ) | (b) | 30 | |||||||||
Net income (loss) | 289,539 | (1,295 | ) | 167 | 288,411 | |||||||||||
Net income attributable to noncontrolling interest | 10,816 | — | — | 10,816 | ||||||||||||
Net income (loss) attributable to Western Gas Partners, LP | $ | 278,723 | $ | (1,295 | ) | $ | 167 | $ | 277,595 | |||||||
Limited partners’ interest in net income (loss): | ||||||||||||||||
Net income (loss) attributable to Western Gas Partners, LP | $ | 278,723 | $ | 277,595 | ||||||||||||
Pre-acquisition net (income) loss allocated to Anadarko | (8,224 | ) | (8,224 | ) | ||||||||||||
Series A Preferred units interest in net (income) loss (3) | — | (48,899 | ) | |||||||||||||
General partner interest in net (income) loss (3) | (69,633 | ) | (69,916 | ) | ||||||||||||
Common and Class C limited partners’ interest in net income (loss) (3) | 200,866 | 150,556 | ||||||||||||||
Net income (loss) per common unit – basic and diluted (4) | $ | 1.83 | $ | 1.34 |
(1) | Income earned from equity investments is classified as affiliate. |
(2) | As it relates to the “Partnership Historical” column, cost of product includes product purchases from Anadarko of $136.6 million, operation and maintenance includes charges from Anadarko of $59.7 million, and general and administrative includes charges from Anadarko of $25.0 million for the year ended December 31, 2013. As it relates to the “Springfield Historical” column, cost of product includes product purchases from Anadarko of $0.2 million, operation and maintenance includes charges from Anadarko of $7.6 million and general and administrative expense includes charges from Anadarko of $3.4 million for the year ended December 31, 2013. |
(3) | Represents net income (loss) earned on and subsequent to the date of acquisition of the Partnership assets. |
(4) | See Note 3 for the calculation of net income (loss) per common unit. |
thousands except number of units | Partnership Historical | Springfield Historical | Pro Forma Adjustments | Partnership Pro Forma | ||||||||||||
ASSETS | ||||||||||||||||
Current assets | ||||||||||||||||
Cash and cash equivalents | $ | 98,033 | $ | — | $ | 247,500 | (d) | $ | 98,033 | |||||||
465,000 | (e) | |||||||||||||||
(712,500 | ) | (e) | ||||||||||||||
Accounts receivable, net (1) | 180,993 | 12,336 | — | 193,329 | ||||||||||||
Other current assets | 7,855 | — | — | 7,855 | ||||||||||||
Total current assets | 286,881 | 12,336 | — | 299,217 | ||||||||||||
Note receivable – Anadarko | 260,000 | — | — | 260,000 | ||||||||||||
Property, plant and equipment | ||||||||||||||||
Cost | 5,904,637 | 652,141 | — | 6,556,778 | ||||||||||||
Less accumulated depreciation | 1,614,663 | 83,336 | — | 1,697,999 | ||||||||||||
Net property, plant and equipment | 4,289,974 | 568,805 | — | 4,858,779 | ||||||||||||
Goodwill | 389,686 | 29,500 | — | 419,186 | ||||||||||||
Other intangible assets | 832,127 | — | — | 832,127 | ||||||||||||
Equity investments | 618,887 | — | — | 618,887 | ||||||||||||
Other assets | 29,707 | — | — | 29,707 | ||||||||||||
Total assets | $ | 6,707,262 | $ | 610,641 | $ | — | $ | 7,317,903 | ||||||||
LIABILITIES, EQUITY AND PARTNERS’ CAPITAL | ||||||||||||||||
Current liabilities | ||||||||||||||||
Accounts and imbalance payables | $ | 64,606 | $ | 34,055 | $ | — | $ | 98,661 | ||||||||
Accrued ad valorem taxes | 17,808 | — | — | 17,808 | ||||||||||||
Accrued liabilities | 116,818 | 2,201 | — | 119,019 | ||||||||||||
Total current liabilities | 199,232 | 36,256 | — | 235,488 | ||||||||||||
Long-term debt | 2,707,357 | — | 247,500 | (d) | 2,954,857 | |||||||||||
Deferred income taxes | 5,963 | 133,741 | (130,965 | ) | (b) | 8,739 | ||||||||||
Asset retirement obligations and other | 118,606 | 10,046 | — | 128,652 | ||||||||||||
Deferred purchase price obligation – Anadarko | 188,674 | — | — | 188,674 | ||||||||||||
Total long-term liabilities | 3,020,600 | 143,787 | 116,535 | 3,280,922 | ||||||||||||
Total liabilities | 3,219,832 | 180,043 | 116,535 | 3,516,410 | ||||||||||||
Equity and partners’ capital | ||||||||||||||||
Series A Preferred units | — | — | 440,000 | (e) | 440,000 | |||||||||||
Common units | 2,588,991 | — | 25,000 | (e) | 2,451,184 | |||||||||||
(162,807 | ) | (e) | ||||||||||||||
Class C units | 710,891 | — | — | 710,891 | ||||||||||||
General partner units | 120,164 | — | — | 120,164 | ||||||||||||
Net investment by Anadarko | — | 430,598 | 130,965 | (b) | 11,870 | |||||||||||
(549,693 | ) | (e) | ||||||||||||||
Total partners’ capital | 3,420,046 | 430,598 | (116,535 | ) | 3,734,109 | |||||||||||
Noncontrolling interest | 67,384 | — | — | 67,384 | ||||||||||||
Total equity and partners’ capital | 3,487,430 | 430,598 | (116,535 | ) | 3,801,493 | |||||||||||
Total liabilities, equity and partners’ capital | $ | 6,707,262 | $ | 610,641 | $ | — | $ | 7,317,903 |
(1) | As it relates to the “Partnership Historical” column, accounts receivable, net includes amounts receivable from affiliates of $42.7 million as of December 31, 2015. |
(a) | The elimination of historical revenue and cost of product between Springfield and other WES companies for consolidation purposes; |
(b) | The elimination of historical current and deferred income taxes, as the Partnership is generally not subject to federal and state income taxes, other than Texas margin tax. Texas margin taxes that continue to be borne by the Partnership on the portion of the Partnership’s pro forma income that is allocable to Texas have not been eliminated; |
(c) | The inclusion of interest expense on the Partnership’s $247.5 million of borrowings under the RCF used to fund a portion of the acquisition of Springfield. The interest rate on the RCF used for purposes of calculating interest expense in the unaudited pro forma condensed consolidated statements of operations was 1.54%, 1.46% and 1.66% at December 31, 2015, 2014 and 2013, respectively. A 1/8% variance in this rate would result in an adjustment to income (loss) before income taxes of $0.3 million for each of the years ended December 31, 2015, 2014 and 2013; |
(d) | The receipt of $247.5 million of borrowings under the RCF; and |
(e) | The acquisition of Springfield by the Partnership, consisting of the cash payment of $712.5 million (representing (i) $440.0 million in net proceeds from the issuance of 14,030,611 Series A Preferred units to private investors, (ii) $25.0 million in proceeds from the issuance of 835,841 common units to WGP and (iii) $247.5 million borrowed under the RCF) and the issuance of 1,253,761 common units to Anadarko. The excess of cash consideration paid over the historical net book value of assets acquired and liabilities assumed is recorded as a decrease to partners’ capital for the common unitholders and the general partner. |
Year Ended December 31, | ||||||||||||
thousands | 2015 | 2014 | 2013 | |||||||||
Numerator – basic and diluted: | ||||||||||||
Historical common and Class C limited partners’ interest in net income (loss) | $ | (256,276 | ) | $ | 256,509 | $ | 200,866 | |||||
Pro forma distributions on common units issued in connection with the acquisition of Springfield | 6,373 | 5,537 | 4,764 | |||||||||
Pro forma Series A Preferred units interest in net income (loss) | 38,164 | 49,173 | 48,899 | |||||||||
Pro forma reallocation of limited partners’ interest in net income (loss) | 29,743 | (26,028 | ) | (103,973 | ) | |||||||
Pro forma common and Class C limited partners’ interest in net income (loss) | $ | (181,996 | ) | $ | 285,191 | $ | 150,556 | |||||
Denominator: | ||||||||||||
Historical weighted average units outstanding – basic and diluted | 128,345 | 119,822 | 109,872 | |||||||||
Common units issued in connection with the acquisition of Springfield | 2,090 | 2,090 | 2,090 | |||||||||
Pro forma weighted average units outstanding – basic and diluted | 130,435 | 121,912 | 111,962 | |||||||||
Excluded due to anti-dilutive effect: | ||||||||||||
Class C units | 11,114 | 1,106 | — | |||||||||
Series A Preferred units assuming conversion to common units | 14,031 | 14,031 | 14,031 |