Acquisitions (tables)

9 Months Ended

Sep. 30, 2013

The following table presents the acquisitions completed by WES during 2012 and 2013, and identifies the funding sources for such acquisitions:



thousands except unit and percent amounts	Acquisition Date	Percentage Acquired		Borrowings		Cash On Hand		WES Common Units Issued	WES GP Units Issued
MGR ⁽¹⁾	01/13/2012	100	%	$	299,000	$	159,587	632,783	12,914
Chipeta ⁽²⁾	08/01/2012	24	%	—		128,250		151,235	3,086
Non-Operated Marcellus Interest ⁽³⁾	03/01/2013	33.75	%	250,000		215,500		449,129	—
Anadarko-Operated Marcellus Interest ⁽⁴⁾	03/08/2013	33.75	%	133,500		—		—	—
Mont Belvieu JV ⁽⁵⁾	06/05/2013	25	%	—		78,129		—	—
OTTCO ⁽⁶⁾	09/03/2013	100	%	27,500		—		—	—

⁽¹⁾

The assets acquired from Anadarko consist of (i) the Red Desert complex, which is located in the greater Green River Basin in southwestern Wyoming, and includes the Patrick Draw processing plant, the Red Desert processing plant, gathering lines, and related facilities, (ii) a 22% interest in Rendezvous, which owns a gathering system serving the Jonah and Pinedale Anticline fields in southwestern Wyoming, and (iii) certain additional midstream assets and equipment. These assets are collectively referred to as the “MGR assets” and the acquisition as the “MGR acquisition.”

⁽²⁾

WES acquired Anadarko’s then remaining 24% membership interest in Chipeta (as described in Note 1). WES received distributions related to the additional interest beginning July 1, 2012. This transaction brought WES’s total membership interest in Chipeta to 75%. The remaining 25% membership interest in Chipeta held by a third-party member is reflected as noncontrolling interests in the consolidated financial statements for all periods presented.

⁽³⁾

WES 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” and the acquisition as the “Non-Operated Marcellus Interest acquisition.” In connection with the issuance of WES common units, WES GP purchased 9,166 general partner units for consideration of $0.5 million in order to maintain its 2.0% general partner interest in WES. See Non-Operated Marcellus Interest acquisition below for further information.

⁽⁴⁾

The interest acquired from a third party consisted of 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. The interest acquired is referred to as the “Anadarko-Operated Marcellus Interest” and the acquisition as the “Anadarko-Operated Marcellus Interest acquisition.” See Anadarko-Operated Marcellus Interest acquisition below for further information, including the final allocation of the purchase price as of September 30, 2013.

⁽⁵⁾

The acquisition from a third party consisted of a 25% interest in Enterprise EF78 LLC, an entity formed to design, construct, and own two fractionators located in Mont Belvieu, Texas. The interest acquired is accounted for under the equity method of accounting and is referred to as the “Mont Belvieu JV” and the acquisition as the “Mont Belvieu JV acquisition.” See Mont Belvieu JV acquisition below for further information.


⁽⁶⁾	WES acquired Overland Trail Transmission, LLC (“OTTCO”), a Delaware limited liability company, from a third party. OTTCO owns and operates an intrastate pipeline which connects WES’s Red Desert and Granger complexes in southwestern Wyoming. The assets acquired are referred to as the “OTTCO pipeline” and the acquisition as the “OTTCO acquisition.”

Impact to Historical Consolidated Statement of Income Table

The following table presents the revenue and net income impact of the Non-Operated Marcellus Interest on revenue and net income as presented in the historical consolidated statements of income:



	Three Months Ended September 30, 2012
thousands	WGP Historical		Non-Operated Marcellus Interest		Combined
Revenues	$	219,020	$	15,714	$	234,734
Net income	33,854		7,062		40,916



	Nine Months Ended September 30, 2012
thousands	WGP Historical		Non-Operated Marcellus Interest		Combined
Revenues	$	636,603	$	43,117	$	679,720
Net income	106,711		19,582		126,293

Purchase Price Allocation Table

The following is the final allocation of the purchase price as of September 30, 2013, including $1.1 million of post-closing purchase price adjustments, to the assets acquired and liabilities assumed in the Anadarko-Operated Marcellus Interest acquisition as of the acquisition date:



thousands
Property, plant and equipment	$	134,819
Asset retirement obligations	(174		)
Total purchase price	$	134,645

Pro Forma Condensed Financial Information Table

The following table presents the pro forma condensed financial information as if the Anadarko-Operated Marcellus Interest acquisition had occurred on January 1, 2012:



	Nine Months Ended September 30,
thousands except per-unit amounts	2013		2012
Revenues	$	764,128	$	682,820
Net income	194,074		124,221
Net income attributable to Western Gas Equity Partners, LP	111,512		52,963
Net income per common unit - basic and diluted	$	0.49	n/a