Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2016 | May. 02, 2016 | |
Document And Entity Information [Abstract] | ||
Trading Symbol | WES | |
Entity Registrant Name | Western Gas Partners LP | |
Entity Central Index Key | 1,414,475 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2016 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Units Outstanding | 130,666,567 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2016 | Mar. 31, 2015 | |||
Revenues and Other | ||||
Total revenues and other | $ 383,141 | $ 437,006 | [1] | |
Equity income, net | [2],[3],[4] | 16,814 | 18,220 | [1] |
Operating expenses | ||||
Cost of product | [5] | 76,467 | 139,408 | [1] |
Operation and maintenance | [5] | 76,213 | 76,185 | [1] |
General and administrative | [5] | 11,277 | 11,081 | [1] |
Property and other taxes | 10,350 | 9,280 | [1] | |
Depreciation and amortization | 65,095 | 68,975 | [1] | |
Impairments | 6,518 | 272,624 | [1] | |
Total operating expenses | 245,920 | 577,553 | [1] | |
Gain (loss) on divestiture and other, net | (632) | (6) | [1] | |
Operating income (loss) | 153,403 | (122,333) | [1] | |
Interest income - affiliates | [6] | 4,225 | 4,225 | [1] |
Interest expense | [7] | (32,036) | (22,960) | [1] |
Other income (expense), net | 124 | 71 | [1] | |
Income (loss) before income taxes | 125,716 | (140,997) | [1] | |
Income tax (benefit) expense | 6,633 | 12,270 | [1] | |
Net income (loss) | 119,083 | (153,267) | [1] | |
Net income attributable to noncontrolling interest | 3,023 | 3,226 | [1] | |
Net income (loss) attributable to Western Gas Partners, LP | 116,060 | (156,493) | [1] | |
Limited partners' interest in net income (loss): | ||||
Pre-acquisition net (income) loss allocated to Anadarko | (11,326) | (25,039) | [1] | |
General partner interest in net (income) loss | [8] | $ (55,400) | $ (37,177) | [1] |
Net income (loss) per common unit – basic and diluted | [9],[10] | $ 0.31 | $ (1.61) | [1] |
Series A Preferred Units [Member] | ||||
Limited partners' interest in net income (loss): | ||||
Limited partners’ interest in net income (loss) | [8],[11] | $ 2,329 | $ 0 | [1] |
Common and Class C Units [Member] | ||||
Limited partners' interest in net income (loss): | ||||
Limited partners’ interest in net income (loss) | [8] | 47,005 | (218,709) | [1] |
Affiliates [Member] | ||||
Revenues and Other | ||||
Gathering, processing and transportation | 187,718 | 188,018 | [1] | |
Natural gas and natural gas liquids sales | 84,866 | 118,740 | [1] | |
Other | 0 | 170 | [1] | |
Total revenues and other | [4] | 272,584 | 306,928 | [1] |
Operating expenses | ||||
Cost of product | [4] | 24,580 | 43,895 | |
Operation and maintenance | [12] | 17,975 | 16,817 | |
General and administrative | [13] | 8,952 | 8,135 | |
Total operating expenses | 51,507 | 68,847 | ||
Interest expense | [14] | (4,537) | (1,420) | |
Third Parties [Member] | ||||
Revenues and Other | ||||
Gathering, processing and transportation | 106,286 | 82,250 | [1] | |
Natural gas and natural gas liquids sales | 3,690 | 46,932 | [1] | |
Other | 581 | 896 | [1] | |
Total revenues and other | 110,557 | 130,078 | [1] | |
Operating expenses | ||||
Interest expense | $ (27,499) | $ (21,540) | ||
[1] | Financial information has been recast to include the financial position and results attributable to the Springfield system. See Note 1 and Note 2. | |||
[2] | Income earned from equity investments is classified as affiliate. See Note 1. | |||
[3] | Income earned on, distributions from and contributions to equity investments are classified as affiliate. See Note 1. | |||
[4] | Represents amounts earned or incurred on and subsequent to the date of acquisition of the Partnership assets, as well as amounts earned or incurred by Anadarko on a historical basis related to the Partnership assets prior to the acquisition of such assets, recognized under gathering, treating or processing agreements, and purchase and sale agreements. | |||
[5] | Cost of product includes product purchases from Anadarko (as defined in Note 1) of $24.6 million and $43.9 million for the three months ended March 31, 2016 and 2015, respectively. Operation and maintenance includes charges from Anadarko of $18.0 million and $16.8 million for the three months ended March 31, 2016 and 2015, respectively. General and administrative includes charges from Anadarko of $9.0 million and $8.1 million for the three months ended March 31, 2016 and 2015, respectively. See Note 5. | |||
[6] | Represents interest income recognized on the note receivable from Anadarko. | |||
[7] | Includes affiliate (as defined in Note 1) interest expense of $4.5 million and $1.4 million for the three months ended March 31, 2016 and 2015, respectively. See Note 2 and Note 9. | |||
[8] | Represents net income (loss) earned on and subsequent to the date of acquisition of the Partnership assets (as defined in Note 1). See Note 4. | |||
[9] | See Note 4 for the calculation of net income (loss) per common unit. | |||
[10] | The impact of Class C units and the conversion of Series A Preferred units would be anti-dilutive. | |||
[11] | Adjusted to reflect amortization of the beneficial conversion feature. | |||
[12] | Represents expenses incurred on and subsequent to the date of the acquisition of the Partnership assets, as well as expenses incurred by Anadarko on a historical basis related to the Partnership assets prior to the acquisition of such assets. | |||
[13] | Represents general and administrative expense incurred on and subsequent to the date of the Partnership’s acquisition of the Partnership assets, as well as a management services fee for reimbursement of expenses incurred by Anadarko for periods prior to the acquisition of the Partnership assets by the Partnership. These amounts include equity-based compensation expense allocated to the Partnership by Anadarko (see WES LTIP and WGP LTIP and Anadarko Incentive Plans within this Note 5). | |||
[14] | For the three months ended March 31, 2016 and 2015, includes accretion expense recognized on the Deferred purchase price obligation - Anadarko for the acquisition of DBJV (see Note 2 and Note 9). |
Consolidated Statements of Inc3
Consolidated Statements of Income (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2016 | Mar. 31, 2015 | |||
Cost of product | [1] | $ 76,467 | $ 139,408 | [2] |
Operation and maintenance | [1] | 76,213 | 76,185 | [2] |
General and administrative | [1] | 11,277 | 11,081 | [2] |
Interest expense | [3] | 32,036 | 22,960 | [2] |
Affiliates [Member] | ||||
Cost of product | [4] | 24,580 | 43,895 | |
Operation and maintenance | [5] | 17,975 | 16,817 | |
General and administrative | [6] | 8,952 | 8,135 | |
Interest expense | [7] | $ 4,537 | $ 1,420 | |
[1] | Cost of product includes product purchases from Anadarko (as defined in Note 1) of $24.6 million and $43.9 million for the three months ended March 31, 2016 and 2015, respectively. Operation and maintenance includes charges from Anadarko of $18.0 million and $16.8 million for the three months ended March 31, 2016 and 2015, respectively. General and administrative includes charges from Anadarko of $9.0 million and $8.1 million for the three months ended March 31, 2016 and 2015, respectively. See Note 5. | |||
[2] | Financial information has been recast to include the financial position and results attributable to the Springfield system. See Note 1 and Note 2. | |||
[3] | Includes affiliate (as defined in Note 1) interest expense of $4.5 million and $1.4 million for the three months ended March 31, 2016 and 2015, respectively. See Note 2 and Note 9. | |||
[4] | Represents amounts earned or incurred on and subsequent to the date of acquisition of the Partnership assets, as well as amounts earned or incurred by Anadarko on a historical basis related to the Partnership assets prior to the acquisition of such assets, recognized under gathering, treating or processing agreements, and purchase and sale agreements. | |||
[5] | Represents expenses incurred on and subsequent to the date of the acquisition of the Partnership assets, as well as expenses incurred by Anadarko on a historical basis related to the Partnership assets prior to the acquisition of such assets. | |||
[6] | Represents general and administrative expense incurred on and subsequent to the date of the Partnership’s acquisition of the Partnership assets, as well as a management services fee for reimbursement of expenses incurred by Anadarko for periods prior to the acquisition of the Partnership assets by the Partnership. These amounts include equity-based compensation expense allocated to the Partnership by Anadarko (see WES LTIP and WGP LTIP and Anadarko Incentive Plans within this Note 5). | |||
[7] | For the three months ended March 31, 2016 and 2015, includes accretion expense recognized on the Deferred purchase price obligation - Anadarko for the acquisition of DBJV (see Note 2 and Note 9). |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 | [1] | |
Current assets | ||||
Cash and cash equivalents | $ 108,479 | $ 98,033 | ||
Accounts receivable, net | [2] | 179,773 | 193,329 | |
Other current assets | 3,555 | 7,855 | ||
Total current assets | 291,807 | 299,217 | ||
Note receivable - Anadarko | 260,000 | 260,000 | ||
Property, plant and equipment | ||||
Cost | 6,700,809 | 6,556,778 | ||
Less accumulated depreciation | 1,760,590 | 1,697,999 | ||
Net property, plant and equipment | 4,940,219 | 4,858,779 | ||
Goodwill | 419,186 | 419,186 | ||
Other intangible assets | 825,020 | 832,127 | ||
Equity investments | 610,588 | 618,887 | ||
Other assets | 13,740 | 13,001 | ||
Total assets | 7,360,560 | 7,301,197 | ||
Current liabilities | ||||
Accounts and imbalance payables | 103,754 | 98,661 | ||
Accrued ad valorem taxes | 27,876 | 17,808 | ||
Accrued liabilities | 127,837 | 119,019 | ||
Total current liabilities | 259,467 | 235,488 | ||
Long-term debt | 3,021,325 | 2,690,651 | ||
Deferred income taxes | 5,906 | 139,704 | ||
Asset retirement obligations and other | 132,126 | 128,652 | ||
Deferred purchase price obligation - Anadarko | [3] | 193,211 | 188,674 | |
Total long-term liabilities | 3,352,568 | 3,147,681 | ||
Total liabilities | 3,612,035 | 3,383,169 | ||
Equity and partners' capital | ||||
General partner units (2,583,068 units issued and outstanding at March 31, 2016, and December 31, 2015) | 125,846 | 120,164 | ||
Net investment by Anadarko | 0 | 430,598 | ||
Total partners' capital | 3,681,956 | 3,850,644 | ||
Noncontrolling interest | 66,569 | 67,384 | ||
Total equity and partners' capital | 3,748,525 | 3,918,028 | ||
Total liabilities, equity and partners' capital | 7,360,560 | 7,301,197 | ||
Series A Preferred Units [Member] | ||||
Equity and partners' capital | ||||
Series A Preferred units, Common units and Class C Units | [4] | 420,582 | 0 | |
Common Units [Member] | ||||
Equity and partners' capital | ||||
Series A Preferred units, Common units and Class C Units | 2,417,194 | 2,588,991 | ||
Class C Units [Member] | ||||
Equity and partners' capital | ||||
Series A Preferred units, Common units and Class C Units | [5] | $ 718,334 | $ 710,891 | |
[1] | Financial information has been recast to include the financial position and results attributable to the Springfield system. See Note 1 and Note 2. | |||
[2] | Accounts receivable, net includes amounts receivable from affiliates (as defined in Note 1) of $53.8 million and $42.7 million as of March 31, 2016, and December 31, 2015, respectively. Accounts receivable, net as of March 31, 2016, and December 31, 2015, also includes an insurance claim receivable related to an incident at the DBM complex. See Note 1. | |||
[3] | See Note 2. | |||
[4] | The Series A Preferred units are convertible into common units at the holder’s election on a one-for-one basis at any time after the second anniversary of the issuance date. See Note 4. | |||
[5] | The Class C units will convert into common units on a one-for-one basis on December 31, 2017, unless the Partnership elects to convert such units earlier or Anadarko extends the conversion date. See Note 4. |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 | ||
General partner units issued | 2,583,068 | 2,583,068 | ||
General partner units outstanding | 2,583,068 | 2,583,068 | ||
Accounts receivable, net | [1] | $ 179,773 | $ 193,329 | [2] |
Series A Preferred Units [Member] | ||||
Units issued | 14,030,611 | 0 | ||
Units outstanding | 14,030,611 | 0 | ||
Common Units [Member] | ||||
Units issued | 130,666,567 | 128,576,965 | ||
Units outstanding | 130,666,567 | 128,576,965 | ||
Class C Units [Member] | ||||
Units issued | 11,735,446 | 11,411,862 | ||
Units outstanding | 11,735,446 | 11,411,862 | ||
Affiliates [Member] | ||||
Accounts receivable, net | $ 53,800 | $ 42,700 | ||
[1] | Accounts receivable, net includes amounts receivable from affiliates (as defined in Note 1) of $53.8 million and $42.7 million as of March 31, 2016, and December 31, 2015, respectively. Accounts receivable, net as of March 31, 2016, and December 31, 2015, also includes an insurance claim receivable related to an incident at the DBM complex. See Note 1. | |||
[2] | Financial information has been recast to include the financial position and results attributable to the Springfield system. See Note 1 and Note 2. |
Consolidated Statement of Equit
Consolidated Statement of Equity and Partners' Capital - 3 months ended Mar. 31, 2016 - USD ($) $ in Thousands | Total | Net Investment by Anadarko [Member] | Common Units [Member] | Class C Units [Member] | Series A Preferred Units [Member] | General Partner Units [Member] | Noncontrolling Interest [Member] | |
Balance at Dec. 31, 2015 | [1] | $ 3,918,028 | $ 430,598 | $ 2,588,991 | $ 710,891 | $ 0 | $ 120,164 | $ 67,384 |
Net income (loss) | 119,083 | 11,326 | 42,812 | 4,635 | 1,887 | 55,400 | 3,023 | |
Above-market component of swap extensions with Anadarko | [2] | 6,813 | 6,813 | |||||
Issuance of common units, net of offering expenses | 25,000 | 25,000 | ||||||
Issuance of Series A Preferred units, net of offering expenses | 440,000 | 440,000 | ||||||
Beneficial conversion feature of Series A Preferred units | 0 | 21,747 | (21,747) | |||||
Amortization of beneficial conversion feature of Class C units and Series A Preferred units | 0 | (3,250) | 2,808 | 442 | ||||
Distributions to noncontrolling interest owner | (3,838) | (3,838) | ||||||
Distributions to unitholders | (152,588) | (102,862) | (49,726) | |||||
Acquisitions from affiliates | (712,500) | (549,692) | (162,808) | |||||
Contributions of equity-based compensation from Anadarko | 1,065 | 1,044 | 21 | |||||
Net pre-acquisition contributions from (distributions to) Anadarko | (27,632) | (27,632) | ||||||
Net distributions to Anadarko of other assets | (714) | (701) | (13) | |||||
Elimination of net deferred tax liabilities | 135,400 | 135,400 | ||||||
Other | 408 | 408 | ||||||
Balance at Mar. 31, 2016 | $ 3,748,525 | $ 0 | $ 2,417,194 | $ 718,334 | $ 420,582 | $ 125,846 | $ 66,569 | |
[1] | Financial information has been recast to include the financial position and results attributable to the Springfield system. See Note 1 and Note 2. | |||||||
[2] | See Note 5. |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | ||||
Mar. 31, 2016 | Mar. 31, 2015 | ||||
Cash flows from operating activities | |||||
Net income (loss) | $ 119,083 | $ (153,267) | [1] | ||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||
Depreciation and amortization | 65,095 | 68,975 | [1] | ||
Impairments | 6,518 | 272,624 | [1] | ||
Non-cash equity-based compensation expense | 1,231 | 1,035 | [1] | ||
Deferred income taxes | 1,852 | 5,809 | [1] | ||
Accretion and amortization of long-term obligations, net | 5,467 | 2,112 | [1] | ||
Equity income, net | [2],[3],[4] | (16,814) | (18,220) | [1] | |
Distributions from equity investment earnings | [3] | 19,855 | 18,706 | [1] | |
Gain (loss) on divestiture and other, net | 632 | 6 | [1] | ||
Changes in assets and liabilities: | |||||
(Increase) decrease in accounts receivable, net | 12,558 | (14,633) | [1] | ||
Increase (decrease) in accounts and imbalance payables and accrued liabilities, net | 17,978 | 12,796 | [1] | ||
Change in other items, net | 3,048 | (1,110) | [1] | ||
Net cash provided by operating activities | 236,503 | 194,833 | [1] | ||
Cash flows from investing activities | |||||
Capital expenditures | (136,987) | (211,567) | [1] | ||
Investments in equity affiliates | 474 | (4,878) | [1] | ||
Distributions from equity investments in excess of cumulative earnings | [3] | 4,784 | [5] | 2,964 | [1] |
Net cash used in investing activities | (842,818) | (214,224) | [1] | ||
Cash flows from financing activities | |||||
Borrowings, net of debt issuance costs | 330,000 | 140,000 | [1] | ||
Repayments of debt | 0 | (30,000) | [1] | ||
Increase (decrease) in outstanding checks | (994) | (2,198) | [1] | ||
Proceeds from the issuance of common units, net of offering expenses | 25,000 | 31,075 | [1] | ||
Distributions to unitholders | [6] | (152,588) | (126,044) | [1] | |
Distributions to noncontrolling interest owner | (3,838) | (3,150) | [1] | ||
Net contributions from (distributions to) Anadarko | (27,632) | 1,293 | [1] | ||
Above-market component of swap extensions with Anadarko | [6] | 6,813 | 0 | [1] | |
Net cash provided by (used in) financing activities | 616,761 | 10,976 | [1] | ||
Net increase (decrease) in cash and cash equivalents | 10,446 | (8,415) | [1] | ||
Cash and cash equivalents at beginning of period | 98,033 | [7] | 67,054 | [1] | |
Cash and cash equivalents at end of period | 108,479 | 58,639 | [1] | ||
Supplemental disclosures | |||||
Net distributions to (contributions from) Anadarko of other assets | 714 | 205 | [1] | ||
Interest paid, net of capitalized interest | 18,223 | 17,594 | [1] | ||
Taxes paid (reimbursements received) | 67 | (138) | [1] | ||
Delaware Basin JV Gathering LLC [Member] | |||||
Supplemental disclosures | |||||
Acquisition of DBJV from Anadarko | 0 | 174,276 | [1] | ||
Series A Preferred Units [Member] | |||||
Cash flows from financing activities | |||||
Proceeds from the issuance of Series A Preferred units, net of offering expenses | 440,000 | 0 | [1] | ||
Affiliates [Member] | |||||
Cash flows from investing activities | |||||
Contributions in aid of construction costs from affiliates | 2,369 | 0 | [1] | ||
Acquisitions from affiliates | (713,596) | (765) | [1] | ||
Cash flows from financing activities | |||||
Proceeds from the issuance of common units, net of offering expenses | [8] | 25,000 | 0 | ||
Distributions to unitholders | [9] | (89,769) | (71,695) | ||
Third Parties [Member] | |||||
Cash flows from investing activities | |||||
Proceeds from the sale of assets to third parties | $ 138 | $ 22 | [1] | ||
[1] | Financial information has been recast to include the financial position and results attributable to the Springfield system. See Note 1 and Note 2. | ||||
[2] | Income earned from equity investments is classified as affiliate. See Note 1. | ||||
[3] | Income earned on, distributions from and contributions to equity investments are classified as affiliate. See Note 1. | ||||
[4] | Represents amounts earned or incurred on and subsequent to the date of acquisition of the Partnership assets, as well as amounts earned or incurred by Anadarko on a historical basis related to the Partnership assets prior to the acquisition of such assets, recognized under gathering, treating or processing agreements, and purchase and sale agreements. | ||||
[5] | 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. | ||||
[6] | See Note 5. | ||||
[7] | Financial information has been recast to include the financial position and results attributable to the Springfield system. See Note 1 and Note 2. | ||||
[8] | Represents proceeds from the issuance of 835,841 common units to WGP as partial funding for the acquisition of Springfield (see Note 2). | ||||
[9] | Represents distributions paid under the partnership agreement (see Note 3 and Note 4). |
Description of Business and Bas
Description of Business and Basis of Presentation | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Description of Business and Basis of Presentation | 1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION General. Western Gas Partners, LP is a growth-oriented Delaware master limited partnership formed by Anadarko Petroleum Corporation in 2007 to acquire, own, develop and operate midstream energy assets. For purposes of these consolidated financial statements, the “Partnership” refers to Western Gas Partners, LP and its subsidiaries. The Partnership’s general partner, Western Gas Holdings, LLC (the “general partner”), is owned by Western Gas Equity Partners, LP (“WGP”), a Delaware master limited partnership formed by Anadarko Petroleum Corporation in September 2012 to own the Partnership’s general partner, as well as a significant limited partner interest in the Partnership (see Western Gas Equity Partners, LP below). WGP has no independent operations or material assets other than owning the partnership interests in WES (see Holdings of Partnership equity in Note 4 ). Western Gas Equity Holdings, LLC is WGP’s general partner and is a wholly owned subsidiary of Anadarko Petroleum Corporation. “Anadarko” refers to Anadarko Petroleum Corporation and its subsidiaries, excluding the Partnership and the general partner, and “affiliates” refers to subsidiaries of Anadarko, excluding the Partnership, but including equity interests in Fort Union Gas Gathering, LLC (“Fort Union”), White Cliffs Pipeline, LLC (“White Cliffs”), Rendezvous Gas Services, LLC (“Rendezvous”), Enterprise EF78 LLC (the “Mont Belvieu JV”), Texas Express Pipeline LLC (“TEP”), Texas Express Gathering LLC (“TEG”) and Front Range Pipeline LLC (“FRP”). The interests in TEP, TEG and FRP are referred to collectively as the “TEFR Interests.” The “MGR assets” include the Red Desert complex, the Granger straddle plant and the interest in Rendezvous. The Partnership is engaged in the business of gathering, processing, compressing, treating and transporting natural gas, condensate, NGLs and crude oil for Anadarko, as well as for third-party producers and customers. As of March 31, 2016 , the Partnership’s assets and investments accounted for under the equity method consisted of the following: Owned and Operated Operated Interests Non-Operated Interests Equity Interests Gathering systems 12 4 5 2 Treating facilities 13 8 — 3 Natural gas processing plants/trains 18 5 — 2 NGL pipelines 2 — — 3 Natural gas pipelines 4 — — — Oil pipelines — 1 — 1 These assets and investments are located in the Rocky Mountains (Colorado, Utah and Wyoming), the Mid-Continent (Kansas and Oklahoma), North-central Pennsylvania and Texas. The Partnership is constructing additional processing plants at the DBM complex, with operations expected to commence during the second quarter (Train IV) and second half (Train V) of 2016. The Partnership has also made progress payments toward the construction of another cryogenic unit at the DBM complex (Train VI), with an expected in-service date of mid-2017. 1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (CONTINUED) Basis of presentation. The following table outlines the Partnership’s ownership interests and the accounting method of consolidation used in the Partnership’s consolidated financial statements: Percentage Interest Equity investments (1) Fort Union 14.81 % White Cliffs 10 % Rendezvous 22 % Mont Belvieu JV 25 % TEP 20 % TEG 20 % FRP 33.33 % Proportionate consolidation (2) Non-Operated Marcellus Interest systems 33.75 % Anadarko-Operated Marcellus Interest systems 33.75 % Newcastle system 50 % DBJV 50 % Springfield 50.1 % Full consolidation Chipeta (3) 75 % (1) Investments in non-controlled entities over which the Partnership exercises significant influence are accounted for under the equity method. “Equity investment throughput” refers to the Partnership’s share of average throughput for these investments. (2) The Partnership proportionately consolidates its associated share of the assets, liabilities, revenues and expenses attributable to these assets. (3) The 25% interest in Chipeta Processing LLC (“Chipeta”) held by a third-party member is reflected within noncontrolling interest in the consolidated financial statements. The consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”). The consolidated financial statements include the accounts of the Partnership and entities in which it holds a controlling financial interest. All significant intercompany transactions have been eliminated. In preparing financial statements in accordance with GAAP, management makes informed judgments and estimates that affect the reported amounts of assets, liabilities, revenues and expenses. Management evaluates its estimates and related assumptions regularly, using historical experience and other methods considered reasonable. Changes in facts and circumstances or additional information may result in revised estimates and actual results may differ from these estimates. Effects on the business, financial condition and results of operations resulting from revisions to estimates are recognized when the facts that give rise to the revisions become known. The information furnished herein reflects all normal recurring adjustments which are, in the opinion of management, necessary for a fair presentation of the consolidated financial statements, and certain prior-period amounts have been reclassified to conform to the current-year presentation. Certain information and note disclosures commonly included in annual financial statements have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, the accompanying consolidated financial statements and notes should be read in conjunction with the Partnership’s 2015 Form 10-K, as filed with the SEC on February 25, 2016. Management believes that the disclosures made are adequate to make the information not misleading. 1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (CONTINUED) Presentation of Partnership assets. The term “Partnership assets” refers to the assets owned and interests accounted for under the equity method (see Note 7 ) by the Partnership as of March 31, 2016 . Because Anadarko controls the Partnership through its ownership and control of WGP, which owns the Partnership’s entire general partner interest, each acquisition of Partnership assets from Anadarko has been considered a transfer of net assets between entities under common control. As such, the Partnership assets acquired from Anadarko were initially recorded at Anadarko’s historic carrying value, which did not correlate to the total acquisition price paid by the Partnership. Further, after an acquisition of Partnership assets from Anadarko, the Partnership may be required to recast its financial statements to include the activities of such Partnership assets from the date of common control. See Note 2 . For those periods requiring recast, the consolidated financial statements for periods prior to the Partnership’s acquisition of the Partnership assets from Anadarko have been prepared from Anadarko’s historical cost-basis accounts and may not necessarily be indicative of the actual results of operations that would have occurred if the Partnership had owned the Partnership assets during the periods reported. Net income (loss) attributable to the Partnership assets acquired from Anadarko for periods prior to the Partnership’s acquisition of the Partnership assets is not allocated to the limited partners. Insurance recoveries. Involuntary conversions result from the loss of an asset because of some unforeseen event (e.g., destruction due to fire). Some of these events are insurable and result in property damage insurance recovery. Amounts the Partnership receives from insurance carriers are net of any deductibles related to the covered event. The Partnership records a receivable from insurance to the extent it recognizes a loss from an involuntary conversion event and the likelihood of recovering such loss is deemed probable. To the extent that any of the Partnership’s insurance claim receivables are later judged not probable of recovery (e.g., due to new information), such amounts are expensed. The Partnership recognizes gains on involuntary conversions when the amount received from insurance exceeds the net book value of the retired asset(s). In addition, the Partnership does not recognize a gain related to insurance recoveries until all contingencies related to such proceeds have been resolved, that is, a non-refundable cash payment is received from the insurance carrier or the Partnership has a binding settlement agreement with the carrier that clearly states that a non-refundable payment will be made. To the extent that an asset is rebuilt, the associated expenditures are capitalized, as appropriate, in the consolidated balance sheets and presented as capital expenditures in the Partnership’s consolidated statements of cash flows. With respect to business interruption insurance claims, the Partnership recognizes income only when non-refundable cash proceeds are received from insurers, which are presented in the Partnership’s consolidated statements of income as a component of Operating income (loss). On December 3, 2015, there was an initial fire and secondary explosion at the processing facility within the DBM complex. The majority of the damage from the incident was to the liquid handling facilities and the amine treating units at the inlet of the complex. Train II (with capacity of 100 MMcf/d) sustained the most damage of the processing trains but is expected to be returned to service by the end of 2016. Train III (with capacity of 200 MMcf/d) experienced minimal damage and began accepting limited deliveries of gas in April 2016. Management expects Train III to return to full service by the end of the second quarter of 2016, along with new liquid handling and amine treating facilities. As of March 31, 2016 , and December 31, 2015, the consolidated balance sheets include a $49.0 million receivable for a property insurance claim related to the incident at the DBM complex. Recently issued accounting standards . The Financial Accounting Standards Board recently issued the following Accounting Standards Updates (“ASUs”): ASU 2016-02, Leases (Topic - 842). This ASU requires the lessees to recognize a lease liability and a right-of-use asset for all leases, including operating leases, with a term greater than 12 months on the balance sheet and disclose key information about their leasing transactions. This ASU is effective for annual and interim periods beginning in 2019. The Partnership is evaluating the impact of the adoption of this ASU on its consolidated financial statements. 1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (CONTINUED) ASU 2016-01, Financial Instruments—Overall: Recognition and Measurement of Financial Assets and Financial Liabilities (Subtopic 825-10). This ASU amends existing requirements on the classification and measurement of financial instruments. Changes to the current requirements primarily affect the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. This ASU is effective for annual periods beginning in 2018 with early adoption of certain provisions permitted. The Partnership is evaluating the impact of the adoption of this ASU on its consolidated financial statements. ASU 2015-06, Earnings Per Share (Topic - 260)—Effects on Historical Earnings per Unit of Master Limited Partnership Dropdown Transactions . This ASU provides guidance for the presentation of historical earnings per unit for master limited partnerships that apply the two-class method of calculating earnings per unit. When a general partner transfers or “drops down” net assets to a master limited partnership, the transaction is accounted for as a transaction between entities under common control, and the statements of operations are adjusted retrospectively to reflect the transaction. This ASU specifies that the historical earnings (losses) of a transferred business before the date of a dropdown transaction should be allocated entirely to the general partner, and the previously reported earnings per unit of the limited partners should not change as a result of the dropdown transaction. The ASU also requires additional disclosures about how the rights to the earnings (losses) differ before and after the dropdown transaction occurs for purposes of computing earnings per unit under the two-class method. The Partnership applies the two-class method of calculating earnings per unit as described above (including the allocation of pre-acquisition net income (loss) to the general partner), and discloses the rights to earnings (losses) noted above. As such, there was no impact to the Partnership’s consolidated financial statements upon adoption of this ASU on January 1, 2016. ASU 2015-03, Interest—Imputation of Interest (Subtopic 835-30)—Simplifying the Presentation of Debt Issuance Costs and ASU 2015-15, Interest—Imputation of Interest (Subtopic 835-30)—Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements . These ASUs require capitalized debt issuance costs, except for those related to revolving credit facilities, to be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability, rather than as an asset. The Partnership adopted these ASUs on January 1, 2016, using a retrospective approach. The adoption resulted in a reclassification that reduced Other assets and Long-term debt by $16.7 million on the Partnership’s consolidated balance sheet at December 31, 2015. See Note 9 . ASU 2015-02, Consolidation—Amendments to the Consolidation Analysis . This ASU amends existing requirements applicable to reporting entities that are required to evaluate consolidation of a legal entity under the variable interest entity (“VIE”) or voting interest entity models. The provisions will affect how limited partnerships and similar entities are assessed for consolidation, including an additional requirement that a limited partnership will be a VIE unless the limited partners have either substantive kick-out or participating rights over the general partner. The Partnership evaluated the impact of the adoption of this ASU on its consolidated financial statements and determined it does not have any entities for which it is the primary beneficiary for accounting and disclosure purposes. As such, the adoption of this ASU on January 1, 2016, did not impact the Partnership’s consolidated financial statements. ASU 2014-09, Revenue from Contracts with Customers (Topic 606), ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) , and ASU 2016-10, Revenues from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing , which supersede the revenue recognition requirements in Topic 605, Revenue Recognition , require an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration the entity expects to be entitled to in exchange for those goods or services. The Partnership is required to adopt the new standards in the first quarter of 2018 using one of two retrospective application methods. The Partnership is continuing to evaluate the provisions of these ASUs, and has not determined the impact these standards may have on its consolidated financial statements and related disclosures or decided upon the method of adoption. |
Acquisitions and Divestitures
Acquisitions and Divestitures | 3 Months Ended |
Mar. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Acquisitions and Divestitures | 2. ACQUISITIONS AND DIVESTITURES The following table presents the acquisitions completed by the Partnership during 2016 and 2015 , and identifies the funding sources for such acquisitions: thousands except unit and percent amounts Acquisition Date Percentage Deferred Purchase Price Obligation - Anadarko Borrowings Common Units Issued Series A Preferred Units DBJV (1) 03/02/2015 100 % $ 174,276 $ — — — Springfield (2) 03/14/2016 100 % — 247,500 2,089,602 14,030,611 (1) The Partnership acquired Delaware Basin JV Gathering LLC (“DBJV”) from Anadarko. DBJV owns a 50% interest in a gathering system and related facilities, such interest being referred to in this report as the “DBJV system”. The DBJV gathering system and related facilities are located in the Delaware Basin in Loving, Ward, Winkler and Reeves Counties, Texas. The Partnership will make a cash payment on March 31, 2020, to Anadarko as consideration for the acquisition of DBJV. The Partnership currently estimates the future payment will be $282.8 million , the net present value of which was $174.3 million as of the acquisition date. See DBJV acquisition—deferred purchase price obligation - Anadarko below. (2) The Partnership acquired Springfield Pipeline LLC (“Springfield”) from Anadarko for $750.0 million , consisting of $712.5 million in cash and the issuance of 1,253,761 of the Partnership’s common units. Springfield owns a 50.1% interest in an oil gathering system and a gas gathering system, such interest being referred to in this report as the “Springfield system.” The Springfield oil and gas gathering systems are located in Dimmit, La Salle, Maverick and Webb Counties in South Texas. The Partnership financed the cash portion of the acquisition through: (i) borrowings of $247.5 million on the Partnership’s senior unsecured revolving credit facility (“RCF”), (ii) the issuance of 835,841 of the Partnership’s common units to WGP and (iii) the issuance of the Series A Preferred units noted above to private investors (the “initial issuance”). See Note 4 for further information regarding the Series A Preferred units, including the full exercise of an option granted in connection with the initial issuance. Springfield acquisition . Because the acquisition of Springfield was a transfer of net assets between entities under common control, the Partnership’s historical financial statements previously filed with the SEC have been recast in this Form 10-Q to include the results attributable to the Springfield system as if the Partnership owned Springfield for all periods presented. The consolidated financial statements for periods prior to the Partnership’s acquisition of Springfield have been prepared from Anadarko’s historical cost-basis accounts and may not necessarily be indicative of the actual results of operations that would have occurred if the Partnership had owned Springfield during the periods reported. The following table presents the impact of the Springfield system on Revenues and other, Equity income, net and Net income (loss) as presented in the Partnership’s historical consolidated statements of income: Three Months Ended March 31, 2015 thousands Partnership Historical Springfield System Eliminations Combined Revenues and other $ 388,409 $ 48,614 $ (17 ) $ 437,006 Equity income, net 18,220 — — 18,220 Net income (loss) (176,564 ) 23,297 — (153,267 ) 2. ACQUISITIONS AND DIVESTITURES (CONTINUED) DBJV acquisition - deferred purchase price obligation - Anadarko. The consideration to be paid by the Partnership for the acquisition of DBJV consists of a cash payment to Anadarko due on March 31, 2020. The cash payment will be equal to (a) eight multiplied by the average of the Partnership’s share in the Net Earnings (see definition below) of DBJV for the calendar years 2018 and 2019, less (b) the Partnership’s share of all capital expenditures incurred for DBJV between March 1, 2015, and February 29, 2020. Net Earnings is defined as all revenues less cost of product, operating expenses and property taxes, in each case attributable to DBJV on an accrual basis. As of the acquisition date, the estimated future payment obligation (based on management’s estimate of the Partnership’s share of forecasted Net Earnings and capital expenditures for DBJV) was $282.8 million , which had a net present value of $174.3 million , using a discount rate of 10% . As of March 31, 2016 and December 31, 2015, the net present value of this obligation was $193.2 million and $188.7 million , respectively, which was recorded on the consolidated balance sheet under Deferred purchase price obligation - Anadarko. Accretion expense for the three months ended March 31, 2016 and 2015, was $4.5 million and $1.4 million , respectively, which was recorded as a charge to Interest expense. Any subsequent changes to the estimated future payment obligation, if applicable, will be calculated using a discounted cash flow model with a 10% discount rate. Such changes will be recorded as adjustments within Common units on the consolidated balance sheets and consolidated statements of equity and partners’ capital, with accretion adjustments (financing-related) as a result of these changes recorded within Interest expense on the consolidated statements of income in the period of the change. |
Partnership Distributions
Partnership Distributions | 3 Months Ended |
Mar. 31, 2016 | |
Distributions Made to Members or Limited Partners [Abstract] | |
Partnership Distributions | 3. PARTNERSHIP DISTRIBUTIONS The partnership agreement requires the Partnership to distribute all of its available cash (as defined in the partnership agreement) to unitholders of record on the applicable record date within 45 days of the end of each quarter. The Board of Directors of the general partner declared the following cash distributions to the Partnership’s common and general partner unitholders for the periods presented: thousands except per-unit amounts Quarters Ended Total Quarterly Distribution per Unit Total Quarterly Cash Distribution Date of Distribution 2015 March 31 $ 0.725 $ 133,203 May 2015 June 30 0.750 139,736 August 2015 September 30 0.775 146,160 November 2015 December 31 0.800 152,588 February 2016 2016 March 31 (1) $ 0.815 $ 158,905 May 2016 (1) On April 22, 2016 , the Board of Directors of the Partnership’s general partner declared a cash distribution to the Partnership’s unitholders of $0.815 per unit, or $158.9 million in aggregate, including incentive distributions, but excluding distributions on Class C units (see Class C unit distributions below) and Series A Preferred units (see Series A Preferred unit distributions below). The cash distribution is payable on May 13, 2016 , to unitholders of record at the close of business on May 2, 2016 . 3. PARTNERSHIP DISTRIBUTIONS (CONTINUED) Class C unit distributions. The Class C units receive quarterly distributions at a rate equivalent to the Partnership’s common units. The distributions are paid in the form of additional Class C units (“PIK Class C units”) until the scheduled conversion date on December 31, 2017 (unless earlier converted), and the Class C units are disregarded with respect to distributions of the Partnership’s available cash until they are converted to common units. The number of additional PIK Class C units to be issued in connection with a distribution payable on the Class C units is determined by dividing the corresponding distribution attributable to the Class C units by the volume-weighted-average price of the Partnership’s common units for the ten days immediately preceding the payment date for the common unit distribution, less a 6% discount. The Partnership records the PIK Class C unit distributions at fair value at the time of issuance. This Level 2 fair value measurement uses the Partnership’s unit price as a significant input in the determination of the fair value. On February 11, 2016, the Partnership distributed 323,584 PIK Class C units to APC Midstream Holdings, LLC (“AMH”), the holder of the Class C units, for the quarterly distribution period ended December 31, 2015. Series A Preferred unit distributions. As further described in Note 4 , the Partnership issued Series A Preferred units representing limited partner interests in the Partnership to private investors in March 2016. The Series A Preferred unitholders receive quarterly distributions in cash equal to $0.68 per Series A Preferred unit, subject to certain adjustments. The holders of the Series A Preferred units are entitled to certain rights that are senior to the rights of holders of common and Class C units, such as rights to distributions and rights upon liquidation of the Partnership. No payment or distribution on any junior equity security of the Partnership, including common and Class C units, for any quarter is permitted prior to the payment in full of the Series A Preferred unit distribution (including any outstanding arrearages). For the quarter ended March 31, 2016 , the Series A Preferred unitholders will receive an aggregate cash distribution of $1.9 million , based on the quarterly per unit distribution prorated for the 18 -day period the 14,030,611 Series A Preferred units were outstanding during the first quarter of 2016. See Note 4 for further discussion of the Series A Preferred units. |
Equity and Partners' Capital
Equity and Partners' Capital | 3 Months Ended |
Mar. 31, 2016 | |
Partners' Capital Notes [Abstract] | |
Equity and Partners' Capital | 4. EQUITY AND PARTNERS’ CAPITAL Equity offerings. Pursuant to the Partnership’s registration statement filed with the SEC in August 2014 authorizing the issuance of up to an aggregate of $500.0 million of common units (“$500.0 million COP”), during the year ended December 31, 2015, the Partnership issued 873,525 common units, at an average price of $66.61 , generating proceeds of $57.4 million (net of $0.8 million for the underwriting discount and other offering expenses). Net proceeds were used for general partnership purposes, including funding capital expenditures. Gross proceeds generated during the year ended December 31, 2015, were $58.2 million . Commissions paid during the year ended December 31, 2015, were $0.6 million . The Partnership issued no common units under the $500.0 million COP during the three months ended March 31, 2016 . 4. EQUITY AND PARTNERS’ CAPITAL (CONTINUED) Class C units. In connection with the closing of the DBM acquisition in November 2014, the Partnership issued 10,913,853 Class C units to AMH at a price of $68.72 per unit, generating proceeds of $750.0 million , pursuant to the Unit Purchase Agreement (“UPA”) with Anadarko and AMH. All outstanding Class C units will convert into common units on a one-for-one basis on December 31, 2017, unless the Partnership elects to convert such units earlier or Anadarko extends the conversion date. The Class C units were issued to partially fund the acquisition of DBM, and the UPA contains an optional redemption feature that provides the Partnership the ability to redeem up to $150.0 million of the Class C units within 10 days of the receipt of cash proceeds from an entity that is not an affiliate of the Partnership or AMH, if these cash proceeds were in relation to (i) the assets of DBM, (ii) the equity interests in DBM or (iii) the equity interests in a subsidiary of the Partnership that owns a majority of the outstanding equity interests in DBM. As of March 31, 2016 , no such proceeds had been received, and no Class C units had been redeemed. The Class C units were issued at a discount to the then-current market price of the common units into which they are convertible. This discount, totaling $34.8 million , represents a beneficial conversion feature, and at issuance, it was reflected as an increase in common unitholders’ capital and a decrease in Class C unitholder capital to reflect the fair value of the Class C units at issuance. The beneficial conversion feature is considered a non-cash distribution that will be recognized from the date of issuance through the date of conversion, resulting in an increase in Class C unitholder capital and a decrease in common unitholders’ capital as amortized. The beneficial conversion feature is amortized assuming a conversion date of December 31, 2017, using the effective yield method. The impact of the beneficial conversion feature amortization is also included in the calculation of earnings per unit. Series A Preferred units. In connection with the closing of the Springfield acquisition on March 14, 2016, the Partnership completed the issuance and sale of 14,030,611 Series A Preferred units to private investors for a cash purchase price of $32.00 per unit, generating proceeds of $440.0 million (net of fees and expenses, including a 2.0% transaction fee paid to the private investors). In April 2016, the Partnership issued an additional 7,892,220 Series A Preferred units pursuant to the full exercise of an option granted in connection with the initial issuance. The Series A Preferred unitholders may convert the Series A Preferred units into common units on a one -for-one basis at any time after the second anniversary of the issuance date, in whole or in part, subject to certain conversion thresholds. Similarly, the Partnership may convert the Series A Preferred units at any time after the third anniversary of the issuance date, in whole or in part, if the closing price of the Partnership’s common units is greater than $48.00 per common unit for 20 of the 30 preceding trading days, and subject to other certain conversion thresholds. In addition, upon certain events involving a change of control, the Series A Preferred unitholders may elect on an individual basis, subject to certain conditions, to (i) convert their Series A Preferred units to common units at the then applicable conversion rate, (ii) if the Partnership is not the surviving entity (or if the Partnership is the surviving entity, but its common units will cease to be listed), require the Partnership to use commercially reasonable efforts to cause the surviving entity in any such transaction to issue a substantially equivalent security (or convert into common units based on a specified formula, if the Partnership is unable to cause such substantially equivalent securities to be issued), (iii) if the Partnership is the surviving entity, continue to hold their Series A Preferred units, or (iv) require the Partnership to redeem the Series A Preferred units at a price per Series A Preferred unit of $32.32 , plus accrued and unpaid distributions to be paid in cash or common units at the discretion of the Partnership. The Series A Preferred unitholders will vote on an as-converted basis with the Partnership’s common unitholders and will have certain other class voting rights with respect to any amendment to the partnership agreement that would adversely affect any rights, preferences or privileges of the Series A Preferred unitholders. Also in connection with the issuance of the Series A Preferred units, the Partnership entered into a Registration Rights Agreement (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. Pursuant to the Registration Rights Agreement, the Partnership is required to use its commercially reasonable efforts to file and maintain a registration statement for the resale of the converted Series A Preferred units, with such registration statement to become effective no later than March 2018. 4. EQUITY AND PARTNERS’ CAPITAL (CONTINUED) The Series A Preferred units from the initial issuance were issued at a discount to the then-current market price of the common units into which they are convertible. This discount, totaling $21.7 million , represents a beneficial conversion feature, and on the date the Preferred Unit Purchase Agreement was signed (the “commitment date”), it was reflected as an increase in common unitholders’ capital and a decrease in Series A Preferred unitholders’ capital to reflect the fair value of the Series A Preferred units on the commitment date. The beneficial conversion feature is considered a non-cash distribution that will be recognized from the issuance date through the date of earliest conversion, resulting in an increase in Series A Preferred unitholders’ capital and a decrease in common unitholders’ capital as amortized. The beneficial conversion feature is amortized assuming a conversion date of March 14, 2018, using the effective yield method. The impact of the beneficial conversion feature will also be included in the calculation of earnings per unit. Partnership interests. The Partnership’s common units are listed on the New York Stock Exchange under the symbol “WES.” The following table summarizes the common, Class C, Series A Preferred and general partner units issued during the three months ended March 31, 2016 : Common Units Class C Units Series A Preferred Units General Partner Units Total Balance at December 31, 2015 128,576,965 11,411,862 — 2,583,068 142,571,895 PIK Class C units — 323,584 — — 323,584 Springfield acquisition 2,089,602 — 14,030,611 — 16,120,213 Balance at March 31, 2016 130,666,567 11,735,446 14,030,611 2,583,068 159,015,692 Holdings of Partnership equity. As of March 31, 2016 , WGP held 50,132,046 common units, representing a 31.5% limited partner interest in the Partnership, and, through its ownership of the general partner, WGP indirectly held 2,583,068 general partner units, representing a 1.6% general partner interest in the Partnership, and 100% of the IDRs. As of March 31, 2016 , other subsidiaries of Anadarko held 2,011,380 common units and 11,735,446 Class C units, representing an aggregate 8.7% limited partner interest in the Partnership. As of March 31, 2016 , the public held 78,523,141 common units, representing a 49.4% limited partner interest in the Partnership and private investors held 14,030,611 Series A Preferred units, representing an 8.8% limited partner interest in the Partnership. Net income (loss) per unit for common units. Net income (loss) attributable to Western Gas Partners, LP earned on and subsequent to the date of the acquisition of the Partnership assets, net of distributions on the Series A Preferred units and amortization of the Series A Preferred unit beneficial conversion feature (see Series A Preferred units above), is allocated to the general partner, the common unitholders and the Class C unitholder, in accordance with their respective weighted-average ownership percentages (exclusive of the Series A Preferred unit limited partnership interest) and, when applicable, giving effect to incentive distributions allocable to the general partner. The allocable limited partners’ interest in net income (loss) is also net of amortization of the beneficial conversion feature related to the Class C units (see Class C units above) and is allocated between the common and Class C unitholders by applying the provisions of the partnership agreement that govern actual cash distributions and capital account allocations, as if all earnings for the period had been distributed. Net income (loss) attributable to the Partnership assets acquired from Anadarko for periods prior to the Partnership’s acquisition of the Partnership assets is not allocated to the limited partners for purposes of calculating net income (loss) per common unit. 4. EQUITY AND PARTNERS’ CAPITAL (CONTINUED) Basic net income (loss) per common unit is calculated by dividing the limited partners’ interest in net income (loss) attributable to common unitholders by the weighted-average number of common units outstanding during the period. The common units issued in connection with acquisitions and equity offerings are included on a weighted-average basis for periods they were outstanding. The Series A Preferred units are not considered a participating security as they only have distribution rights up to the specified per-unit quarterly distribution and have no rights to the Partnership’s undistributed earnings. Because the Class C units participate in distributions with common units according to a predetermined formula (see Note 3 ), they are considered a participating security and are included in the computation of earnings per unit pursuant to the two-class method. The Class C unit participation right results in a non-contingent transfer of value each time the Partnership declares a distribution. Diluted net income (loss) per common unit is calculated by dividing the sum of (i) the limited partners’ interest in net income (loss) attributable to common units adjusted for distributions on the Series A Preferred units and a reallocation of the limited partners’ interest in net income (loss) assuming conversion of the Series A Preferred units into common units, and (ii) the limited partners’ interest in net income (loss) allocable to the Class C units as a participating security, by the sum of the weighted-average number of common units outstanding plus the dilutive effect of (i) the weighted-average number of outstanding Class C units and (ii) the weighted-average number of common units outstanding assuming conversion of the Series A Preferred units. The following table illustrates the Partnership’s calculation of net income (loss) per unit for common units: Three Months Ended thousands except per-unit amounts 2016 2015 Net income (loss) attributable to Western Gas Partners, LP $ 116,060 $ (156,493 ) Pre-acquisition net (income) loss allocated to Anadarko (11,326 ) (25,039 ) Series A Preferred units interest in net (income) loss (1) (2,329 ) — General partner interest in net (income) loss (55,400 ) (37,177 ) Common and Class C limited partners’ interest in net income (loss) $ 47,005 $ (218,709 ) Net income (loss) allocable to common units (1) $ 39,562 $ (205,258 ) Net income (loss) allocable to Class C units (1) 7,443 (13,451 ) Common and Class C limited partners’ interest in net income (loss) $ 47,005 $ (218,709 ) Net income (loss) per unit Common units – basic and diluted (2) $ 0.31 $ (1.61 ) Weighted-average units outstanding Common units – basic and diluted 128,990 127,736 Excluded due to anti-dilutive effect: Class C units 11,590 10,938 Series A Preferred units assuming conversion to common units 2,775 — (1) Adjusted to reflect amortization of the beneficial conversion feature. (2) The impact of Class C units and the conversion of Series A Preferred units would be anti-dilutive. |
Transactions with Affiliates
Transactions with Affiliates | 3 Months Ended |
Mar. 31, 2016 | |
Related Party Fees and Other Arrangements, Limited Liability Company (LLC) or Limited Partnership (LP) [Abstract] | |
Transactions with Affiliates | 5. TRANSACTIONS WITH AFFILIATES Affiliate transactions. Revenues from affiliates include amounts earned by the Partnership from services provided to Anadarko as well as from the sale of residue and NGLs to Anadarko. In addition, the Partnership purchases natural gas from an affiliate of Anadarko pursuant to gas purchase agreements. Operation and maintenance expense includes amounts accrued for or paid to affiliates for the operation of the Partnership assets, whether in providing services to affiliates or to third parties, including field labor, measurement and analysis, and other disbursements. A portion of the Partnership’s general and administrative expenses is paid by Anadarko, which results in affiliate transactions pursuant to the reimbursement provisions of the Partnership’s omnibus agreement. Affiliate expenses do not bear a direct relationship to affiliate revenues, and third-party expenses do not bear a direct relationship to third-party revenues. See Note 2 for further information related to contributions of assets to the Partnership by Anadarko. Cash management. Anadarko operates a cash management system whereby excess cash from most of its subsidiaries’ separate bank accounts is generally swept to centralized accounts. Prior to the Partnership’s acquisition of the Partnership assets, third-party sales and purchases related to such assets were received or paid in cash by Anadarko within its centralized cash management system. The outstanding affiliate balances were entirely settled through an adjustment to net investment by Anadarko in connection with the acquisition of the Partnership assets. Subsequent to the acquisition of Partnership assets from Anadarko, transactions related to such assets are cash-settled directly with third parties and with Anadarko affiliates. Chipeta cash settles its transactions directly with third parties and Anadarko, as well as with the other subsidiaries of the Partnership. Note receivable - Anadarko and Deferred purchase price obligation - Anadarko. Concurrently with the closing of the Partnership’s May 2008 initial public offering, the Partnership loaned $260.0 million to Anadarko in exchange for a 30-year note bearing interest at a fixed annual rate of 6.50% , payable quarterly. The fair value of the note receivable from Anadarko was $260.4 million and $252.3 million at March 31, 2016 , and December 31, 2015, respectively. The fair value of the note reflects consideration of credit risk and any premium or discount for the differential between the stated interest rate and quarter-end market interest rate, based on quoted market prices of similar debt instruments. Accordingly, the fair value of the note receivable from Anadarko is measured using Level 2 inputs. The consideration to be paid by the Partnership to Anadarko for the March 2015 acquisition of DBJV consists of a cash payment due on March 31, 2020. See Note 2 and Note 9 . Commodity price swap agreements. The Partnership has commodity price swap agreements with Anadarko to mitigate exposure to a majority of the commodity price volatility that would otherwise be present as a result of the purchase and sale of natural gas, condensate or NGLs. Notional volumes for each of the commodity price swap agreements are not specifically defined. Instead, the commodity price swap agreements apply to the actual volume of natural gas, condensate and NGLs purchased and sold. The outstanding commodity price swap agreements for the Hugoton system, MGR assets and DJ Basin complex expire in December 2016. The commodity price swap agreements do not satisfy the definition of a derivative financial instrument and, therefore, are not required to be measured at fair value. Below is a summary of the fixed price ranges on all of the Partnership’s outstanding commodity price swap agreements as of March 31, 2016 : per barrel except natural gas 2016 Ethane $ 18.41 − 23.11 Propane 47.08 − 52.90 Isobutane 62.09 − 73.89 Normal butane 54.62 − 64.93 Natural gasoline 72.88 − 81.68 Condensate 76.47 − 81.68 Natural gas (per MMBtu) 4.87 − 5.96 5. TRANSACTIONS WITH AFFILIATES (CONTINUED) The following table summarizes gains and losses upon settlement of commodity price swap agreements recognized in the consolidated statements of income: Three Months Ended thousands 2016 2015 Gains (losses) on commodity price swap agreements related to sales: (1) Natural gas sales $ 7,041 $ 10,982 Natural gas liquids sales 20,070 44,432 Total 27,111 55,414 Losses on commodity price swap agreements related to purchases (2) (18,871 ) (34,179 ) Net gains (losses) on commodity price swap agreements $ 8,240 $ 21,235 (1) Reported in affiliate Natural gas and natural gas liquids 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. DJ Basin complex and Hugoton system swap extensions. On June 25, 2015, the Partnership extended its commodity price swap agreements with Anadarko for the DJ Basin complex from July 1, 2015, through December 31, 2015, and for the Hugoton system from October 1, 2015, through December 31, 2015. The table below summarizes the swap prices for the extension period compared to the forward market prices as of the agreement date, June 25, 2015. DJ Basin Complex Hugoton System per barrel except natural gas 2015 Swap Prices Market Prices (1) 2015 Swap Prices Market Prices (1) Ethane $ 18.41 $ 1.96 — — Propane 47.08 13.10 — — Isobutane 62.09 19.75 — — Normal butane 54.62 18.99 — — Natural gasoline 72.88 52.59 — — Condensate 76.47 52.59 $ 78.61 $ 32.56 Natural gas (per MMBtu) 5.96 2.75 5.50 2.74 (1) Represents the New York Mercantile Exchange (“NYMEX”) forward strip price as of June 25, 2015, adjusted for product specification, location, basis and, in the case of NGLs, transportation and fractionation costs. On December 8, 2015, the commodity price swap agreements with Anadarko for the DJ Basin complex and Hugoton system were further extended from January 1, 2016, through December 31, 2016. The table below summarizes the swap prices for the extension period compared to the forward market prices as of the agreement date, December 8, 2015. DJ Basin Complex Hugoton System per barrel except natural gas 2016 Swap Prices Market Prices (1) 2016 Swap Prices Market Prices (1) Ethane $ 18.41 $ 0.60 — — Propane 47.08 10.98 — — Isobutane 62.09 17.23 — — Normal butane 54.62 16.86 — — Natural gasoline 72.88 26.15 — — Condensate 76.47 34.65 $ 78.61 $ 18.81 Natural gas (per MMBtu) 5.96 2.11 5.50 2.12 (1) Represents the NYMEX forward strip price as of December 8, 2015, adjusted for product specification, location, basis and, in the case of NGLs, transportation and fractionation costs. 5. TRANSACTIONS WITH AFFILIATES (CONTINUED) Revenues or costs attributable to volumes settled during the respective extension period, at the applicable market price in the above tables, will be recognized in the consolidated statements of income. The Partnership will also record a capital contribution from Anadarko in the Partnership’s consolidated statement of equity and partners’ capital for the amount by which the swap price exceeds the applicable market price in the above tables. For the three months ended March 31, 2016 , the capital contribution from Anadarko was $6.8 million . Gathering and processing agreements. The Partnership has significant gathering and processing arrangements with affiliates of Anadarko on a majority of its systems. The Partnership’s gathering, treating and transportation throughput (excluding equity investment throughput) attributable to natural gas production owned or controlled by Anadarko was 37% and 56% for the three months ended March 31, 2016 and 2015 , respectively. The Partnership’s processing throughput (excluding equity investment throughput) attributable to natural gas production owned or controlled by Anadarko was 61% and 52% for the three months ended March 31, 2016 and 2015 , respectively. The Partnership’s gathering, treating and transportation throughput (excluding equity investment throughput) attributable to crude/NGL production owned or controlled by Anadarko was 64% and 100% for the three months ended March 31, 2016 and 2015 , respectively. Prior to January 1, 2016, Springfield’s contracts were with a subsidiary of Anadarko who contracted with third parties. Effective January 1, 2016, Springfield’s contracts are with both a subsidiary of Anadarko and third parties directly. Commodity purchase and sale agreements. The Partnership sells a significant amount of its natural gas, condensate and NGLs to Anadarko Energy Services Company (“AESC”), Anadarko’s marketing affiliate. In addition, the Partnership purchases natural gas, condensate and NGLs from AESC pursuant to purchase agreements. The Partnership’s purchase and sale agreements with AESC are generally one-year contracts, subject to annual renewal. Acquisitions from Anadarko. On March 14, 2016, the Partnership acquired Springfield from Anadarko, and on March 2, 2015, the Partnership acquired DBJV from Anadarko. See Note 2 for further information on these acquisitions. WES LTIP. The general partner awards phantom units under the Western Gas Partners, LP 2008 Long-Term Incentive Plan (“WES LTIP”) primarily to its independent directors, but also from time to time to its executive officers and Anadarko employees performing services for the Partnership. The phantom units awarded to the independent directors vest one year from the grant date, while all other awards are subject to graded vesting over a three -year service period. Compensation expense is recognized over the vesting period and was $0.1 million for each of the three months ended March 31, 2016 and 2015 . WGP LTIP and Anadarko Incentive Plans. For the three months ended March 31, 2016 and 2015 , general and administrative expenses included $1.2 million and $1.0 million , respectively, of equity-based compensation expense, allocated to the Partnership by Anadarko, for awards granted to the executive officers of the general partner and other employees under the Western Gas Equity Partners, LP 2012 Long-Term Incentive Plan (“WGP LTIP”) and the Anadarko Petroleum Corporation 2008 and 2012 Omnibus Incentive Compensation Plans (referred to collectively as the “Anadarko Incentive Plans”). Of this amount, $1.1 million is reflected as a contribution to partners’ capital in the Partnership’s consolidated statement of equity and partners’ capital for the three months ended March 31, 2016 . 5. TRANSACTIONS WITH AFFILIATES (CONTINUED) Equipment purchases. The following table summarizes the Partnership’s purchases from Anadarko of pipe and equipment: Three Months Ended March 31, 2016 2015 thousands Purchases Cash consideration $ 1,096 $ 765 Payable to affiliate 990 — Net carrying value 1,372 560 Partners’ capital adjustment $ 714 $ 205 Summary of affiliate transactions. The following table summarizes material affiliate transactions. See Note 2 for discussion of affiliate acquisitions and related funding. Three Months Ended thousands 2016 2015 Revenues and other (1) $ 272,584 $ 306,928 Equity income, net (1) 16,814 18,220 Cost of product (1) 24,580 43,895 Operation and maintenance (2) 17,975 16,817 General and administrative (3) 8,952 8,135 Operating expenses 51,507 68,847 Interest income (4) 4,225 4,225 Interest expense (5) 4,537 1,420 Proceeds from the issuance of common units, net of offering expenses (6) 25,000 — Distributions to unitholders (7) 89,769 71,695 Above-market component of swap extensions with Anadarko 6,813 — (1) Represents amounts earned or incurred on and subsequent to the date of acquisition of the Partnership assets, as well as amounts earned or incurred by Anadarko on a historical basis related to the Partnership assets prior to the acquisition of such assets, 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. (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) For the three months ended March 31, 2016 and 2015 , includes accretion expense recognized on the Deferred purchase price obligation - Anadarko for the acquisition of DBJV (see Note 2 and Note 9 ). (6) Represents proceeds from the issuance of 835,841 common units to WGP as partial funding for the acquisition of Springfield (see Note 2 ). (7) Represents distributions paid under the partnership agreement (see Note 3 and Note 4 ). Concentration of credit risk. Anadarko was the only customer from whom revenues exceeded 10% of the Partnership’s consolidated revenues for all periods presented in the consolidated statements of income. |
Property, Plant and Equipment
Property, Plant and Equipment | 3 Months Ended |
Mar. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | 6. PROPERTY, PLANT AND EQUIPMENT A summary of the historical cost of the Partnership’s property, plant and equipment is as follows: thousands Estimated Useful Life March 31, 2016 December 31, 2015 Land n/a $ 3,946 $ 3,744 Gathering systems 3 to 47 years 6,160,896 6,061,004 Pipelines and equipment 15 to 45 years 136,263 136,290 Assets under construction n/a 371,358 329,887 Other 3 to 40 years 28,346 25,853 Total property, plant and equipment 6,700,809 6,556,778 Accumulated depreciation 1,760,590 1,697,999 Net property, plant and equipment $ 4,940,219 $ 4,858,779 The cost of property classified as “Assets under construction” is excluded from capitalized costs being depreciated. These amounts represent property that is not yet suitable to be placed into productive service as of the respective balance sheet date. As of March 31, 2016 , net property, plant and equipment includes impairments of $6.5 million , primarily due to an impairment of $6.2 million at the Newcastle system. This asset was impaired to its estimated fair value of $3.1 million , using the income approach and Level 3 fair value inputs, due to a reduction in estimated future cash flows caused by the low commodity price environment. |
Equity Investments
Equity Investments | 3 Months Ended |
Mar. 31, 2016 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Investments | 7. EQUITY INVESTMENTS The following table presents the activity in the Partnership’s equity investments for the three months ended March 31, 2016 : Equity Investments thousands Fort White Rendezvous Mont TEG TEP FRP Total Balance at December 31, 2015 $ 17,122 $ 50,439 $ 50,913 $ 117,089 $ 16,283 $ 194,803 $ 172,238 $ 618,887 Investment earnings (loss), net of amortization (2,192 ) 3,993 550 5,419 257 4,097 4,690 16,814 Contributions — 106 — — — (580 ) — (474 ) Distributions — (3,848 ) (1,036 ) (5,428 ) (262 ) (4,160 ) (5,121 ) (19,855 ) Distributions in excess of cumulative earnings (1) (783 ) (877 ) (1,541 ) (172 ) (21 ) (1,390 ) — (4,784 ) Balance at March 31, 2016 $ 14,147 $ 49,813 $ 48,886 $ 116,908 $ 16,257 $ 192,770 $ 171,807 $ 610,588 (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. During the three months ended March 31, 2016 , an impairment loss was recognized by the managing partner of Fort Union. The Partnership’s 14.81% share of the impairment loss was $3.0 million , which was recorded in Equity income, net in the consolidated statements of income. |
Components of Working Capital
Components of Working Capital | 3 Months Ended |
Mar. 31, 2016 | |
Components Of Working Capital [Abstract] | |
Components of Working Capital | 8. COMPONENTS OF WORKING CAPITAL A summary of accounts receivable, net is as follows: thousands March 31, 2016 December 31, 2015 Trade receivables, net $ 130,731 $ 143,557 Other receivables, net 49,042 49,772 Total accounts receivable, net $ 179,773 $ 193,329 A summary of other current assets is as follows: thousands March 31, 2016 December 31, 2015 Natural gas liquids inventory $ 832 $ 2,403 Imbalance receivables 1,425 2,122 Prepaid insurance 1,298 2,296 Other — 1,034 Total other current assets $ 3,555 $ 7,855 A summary of accrued liabilities is as follows: thousands March 31, 2016 December 31, 2015 Accrued capital expenditures $ 68,152 $ 61,454 Accrued plant purchases 15,885 16,425 Accrued interest expense 34,540 26,194 Short-term asset retirement obligations 2,909 3,677 Short-term remediation and reclamation obligations 1,136 1,136 Income taxes payable 931 770 Other 4,284 9,363 Total accrued liabilities $ 127,837 $ 119,019 |
Debt and Interest Expense
Debt and Interest Expense | 3 Months Ended |
Mar. 31, 2016 | |
Debt Instruments [Abstract] | |
Debt and Interest Expense | 9. DEBT AND INTEREST EXPENSE At March 31, 2016 , the Partnership’s debt consisted of 5.375% Senior Notes due 2021 (the “2021 Notes”), 4.000% Senior Notes due 2022 (the “2022 Notes”), 2.600% Senior Notes due 2018 (the “2018 Notes”), 5.450% Senior Notes due 2044 (the “2044 Notes”), 3.950% Senior Notes due 2025 (the “2025 Notes”), and borrowings on the RCF. The following table presents the Partnership’s outstanding debt as of March 31, 2016 , and December 31, 2015 : March 31, 2016 December 31, 2015 thousands Principal Carrying Value Fair Value (1) Principal Carrying Value Fair Value (1) 2021 Notes $ 500,000 $ 493,962 $ 480,315 $ 500,000 $ 493,711 $ 513,645 2022 Notes 670,000 668,482 597,975 670,000 668,432 595,744 2018 Notes 350,000 348,826 331,187 350,000 348,706 339,293 2044 Notes 400,000 389,744 313,752 400,000 389,707 321,499 2025 Notes 500,000 490,311 427,500 500,000 490,095 422,285 RCF 630,000 630,000 630,000 300,000 300,000 300,000 Total long-term debt $ 3,050,000 $ 3,021,325 $ 2,780,729 $ 2,720,000 $ 2,690,651 $ 2,492,466 (1) Fair value is measured using the market approach and Level 2 inputs. Debt activity. The following table presents the debt activity of the Partnership for the three months ended March 31, 2016 : thousands Carrying Value Balance at December 31, 2015 $ 2,690,651 RCF borrowings 330,000 Other 674 Balance at March 31, 2016 $ 3,021,325 Senior Notes. At March 31, 2016 , the Partnership was in compliance with all covenants under the indentures governing its outstanding notes. Revolving credit facility. The interest rate on the RCF, which matures in February 2019, was 1.74% and 1.48% at March 31, 2016 and 2015 , respectively. The facility fee rate was 0.20% at March 31, 2016 and 2015 . As of March 31, 2016 , the Partnership had $630.0 million of outstanding borrowings, $4.9 million in outstanding letters of credit and $565.1 million available for borrowing under the RCF. At March 31, 2016 , the Partnership was in compliance with all covenants under the RCF. In April 2016, the Partnership repaid $250.0 million of outstanding borrowings under the RCF, $247.5 million of which was funded with the proceeds from the issuance of the additional Series A Preferred units (see Note 4 ). 9. DEBT AND INTEREST EXPENSE (CONTINUED) Interest expense. The following table summarizes the amounts included in interest expense: Three Months Ended thousands 2016 2015 Third parties Long-term debt $ 27,818 $ 23,342 Amortization of debt issuance costs and commitment fees 1,530 1,292 Capitalized interest (1,849 ) (3,094 ) Total interest expense – third parties 27,499 21,540 Affiliates Deferred purchase price obligation – Anadarko (1) 4,537 1,420 Total interest expense – affiliates 4,537 1,420 Interest expense $ 32,036 $ 22,960 (1) See Note 2 for a discussion of the accretion and net present value of the Deferred purchase price obligation - Anadarko. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 10. COMMITMENTS AND CONTINGENCIES Litigation and legal proceedings. From time to time, the Partnership is involved in legal, tax, regulatory and other proceedings in various forums regarding performance, contracts and other matters that arise in the ordinary course of business. Management is not aware of any such proceeding the final disposition of which could have a material adverse effect on the Partnership’s financial condition, results of operations or cash flows. Other commitments. The Partnership has short-term payment obligations, or commitments, related to its capital spending programs, as well as those of its unconsolidated affiliates. As of March 31, 2016 , the Partnership had unconditional payment obligations for services to be rendered or products to be delivered in connection with its capital projects of $90.0 million , the majority of which is expected to be paid in the next twelve months. These commitments relate primarily to the construction of Trains IV, V and VI at the DBM complex and expansion projects at the DBJV system and the DJ Basin complex. Lease commitments. Anadarko, on behalf of the Partnership, has entered into lease agreements for corporate offices, shared field offices and a warehouse supporting the Partnership’s operations, for which Anadarko charges the Partnership rent. The leases for the corporate offices and shared field offices extend through 2017 and 2018, respectively, and the lease for the warehouse extends through February 2017. Rent expense associated with the office, warehouse and equipment leases was $8.9 million and $8.0 million for the three months ended March 31, 2016 and 2015 , respectively. |
Description of Business and B18
Description of Business and Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Business combinations policy | Basis of presentation. The following table outlines the Partnership’s ownership interests and the accounting method of consolidation used in the Partnership’s consolidated financial statements: Percentage Interest Equity investments (1) Fort Union 14.81 % White Cliffs 10 % Rendezvous 22 % Mont Belvieu JV 25 % TEP 20 % TEG 20 % FRP 33.33 % Proportionate consolidation (2) Non-Operated Marcellus Interest systems 33.75 % Anadarko-Operated Marcellus Interest systems 33.75 % Newcastle system 50 % DBJV 50 % Springfield 50.1 % Full consolidation Chipeta (3) 75 % (1) Investments in non-controlled entities over which the Partnership exercises significant influence are accounted for under the equity method. “Equity investment throughput” refers to the Partnership’s share of average throughput for these investments. (2) The Partnership proportionately consolidates its associated share of the assets, liabilities, revenues and expenses attributable to these assets. (3) The 25% interest in Chipeta Processing LLC (“Chipeta”) held by a third-party member is reflected within noncontrolling interest in the consolidated financial statements. The consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”). The consolidated financial statements include the accounts of the Partnership and entities in which it holds a controlling financial interest. All significant intercompany transactions have been eliminated. Presentation of Partnership assets. The term “Partnership assets” refers to the assets owned and interests accounted for under the equity method (see Note 7 ) by the Partnership as of March 31, 2016 . Because Anadarko controls the Partnership through its ownership and control of WGP, which owns the Partnership’s entire general partner interest, each acquisition of Partnership assets from Anadarko has been considered a transfer of net assets between entities under common control. As such, the Partnership assets acquired from Anadarko were initially recorded at Anadarko’s historic carrying value, which did not correlate to the total acquisition price paid by the Partnership. Further, after an acquisition of Partnership assets from Anadarko, the Partnership may be required to recast its financial statements to include the activities of such Partnership assets from the date of common control. See Note 2 . For those periods requiring recast, the consolidated financial statements for periods prior to the Partnership’s acquisition of the Partnership assets from Anadarko have been prepared from Anadarko’s historical cost-basis accounts and may not necessarily be indicative of the actual results of operations that would have occurred if the Partnership had owned the Partnership assets during the periods reported. Net income (loss) attributable to the Partnership assets acquired from Anadarko for periods prior to the Partnership’s acquisition of the Partnership assets is not allocated to the limited partners. Springfield acquisition . Because the acquisition of Springfield was a transfer of net assets between entities under common control, the Partnership’s historical financial statements previously filed with the SEC have been recast in this Form 10-Q to include the results attributable to the Springfield system as if the Partnership owned Springfield for all periods presented. The consolidated financial statements for periods prior to the Partnership’s acquisition of Springfield have been prepared from Anadarko’s historical cost-basis accounts and may not necessarily be indicative of the actual results of operations that would have occurred if the Partnership had owned Springfield during the periods reported. |
Use of estimates policy | In preparing financial statements in accordance with GAAP, management makes informed judgments and estimates that affect the reported amounts of assets, liabilities, revenues and expenses. Management evaluates its estimates and related assumptions regularly, using historical experience and other methods considered reasonable. Changes in facts and circumstances or additional information may result in revised estimates and actual results may differ from these estimates. Effects on the business, financial condition and results of operations resulting from revisions to estimates are recognized when the facts that give rise to the revisions become known. The information furnished herein reflects all normal recurring adjustments which are, in the opinion of management, necessary for a fair presentation of the consolidated financial statements, and certain prior-period amounts have been reclassified to conform to the current-year presentation. |
Fair value policy | DBJV acquisition - deferred purchase price obligation - Anadarko. The consideration to be paid by the Partnership for the acquisition of DBJV consists of a cash payment to Anadarko due on March 31, 2020. The cash payment will be equal to (a) eight multiplied by the average of the Partnership’s share in the Net Earnings (see definition below) of DBJV for the calendar years 2018 and 2019, less (b) the Partnership’s share of all capital expenditures incurred for DBJV between March 1, 2015, and February 29, 2020. Net Earnings is defined as all revenues less cost of product, operating expenses and property taxes, in each case attributable to DBJV on an accrual basis. As of the acquisition date, the estimated future payment obligation (based on management’s estimate of the Partnership’s share of forecasted Net Earnings and capital expenditures for DBJV) was $282.8 million , which had a net present value of $174.3 million , using a discount rate of 10% . As of March 31, 2016 and December 31, 2015, the net present value of this obligation was $193.2 million and $188.7 million , respectively, which was recorded on the consolidated balance sheet under Deferred purchase price obligation - Anadarko. Accretion expense for the three months ended March 31, 2016 and 2015, was $4.5 million and $1.4 million , respectively, which was recorded as a charge to Interest expense. Any subsequent changes to the estimated future payment obligation, if applicable, will be calculated using a discounted cash flow model with a 10% discount rate. Such changes will be recorded as adjustments within Common units on the consolidated balance sheets and consolidated statements of equity and partners’ capital, with accretion adjustments (financing-related) as a result of these changes recorded within Interest expense on the consolidated statements of income in the period of the change. Class C unit distributions. The Class C units receive quarterly distributions at a rate equivalent to the Partnership’s common units. The distributions are paid in the form of additional Class C units (“PIK Class C units”) until the scheduled conversion date on December 31, 2017 (unless earlier converted), and the Class C units are disregarded with respect to distributions of the Partnership’s available cash until they are converted to common units. The number of additional PIK Class C units to be issued in connection with a distribution payable on the Class C units is determined by dividing the corresponding distribution attributable to the Class C units by the volume-weighted-average price of the Partnership’s common units for the ten days immediately preceding the payment date for the common unit distribution, less a 6% discount. The Partnership records the PIK Class C unit distributions at fair value at the time of issuance. This Level 2 fair value measurement uses the Partnership’s unit price as a significant input in the determination of the fair value. On February 11, 2016, the Partnership distributed 323,584 PIK Class C units to APC Midstream Holdings, LLC (“AMH”), the holder of the Class C units, for the quarterly distribution period ended December 31, 2015. Note receivable - Anadarko and Deferred purchase price obligation - Anadarko. Concurrently with the closing of the Partnership’s May 2008 initial public offering, the Partnership loaned $260.0 million to Anadarko in exchange for a 30-year note bearing interest at a fixed annual rate of 6.50% , payable quarterly. The fair value of the note receivable from Anadarko was $260.4 million and $252.3 million at March 31, 2016 , and December 31, 2015, respectively. The fair value of the note reflects consideration of credit risk and any premium or discount for the differential between the stated interest rate and quarter-end market interest rate, based on quoted market prices of similar debt instruments. Accordingly, the fair value of the note receivable from Anadarko is measured using Level 2 inputs. |
Net income (loss) per common unit policy | Net income (loss) per unit for common units. Net income (loss) attributable to Western Gas Partners, LP earned on and subsequent to the date of the acquisition of the Partnership assets, net of distributions on the Series A Preferred units and amortization of the Series A Preferred unit beneficial conversion feature (see Series A Preferred units above), is allocated to the general partner, the common unitholders and the Class C unitholder, in accordance with their respective weighted-average ownership percentages (exclusive of the Series A Preferred unit limited partnership interest) and, when applicable, giving effect to incentive distributions allocable to the general partner. The allocable limited partners’ interest in net income (loss) is also net of amortization of the beneficial conversion feature related to the Class C units (see Class C units above) and is allocated between the common and Class C unitholders by applying the provisions of the partnership agreement that govern actual cash distributions and capital account allocations, as if all earnings for the period had been distributed. Net income (loss) attributable to the Partnership assets acquired from Anadarko for periods prior to the Partnership’s acquisition of the Partnership assets is not allocated to the limited partners for purposes of calculating net income (loss) per common unit. 4. EQUITY AND PARTNERS’ CAPITAL (CONTINUED) Basic net income (loss) per common unit is calculated by dividing the limited partners’ interest in net income (loss) attributable to common unitholders by the weighted-average number of common units outstanding during the period. The common units issued in connection with acquisitions and equity offerings are included on a weighted-average basis for periods they were outstanding. The Series A Preferred units are not considered a participating security as they only have distribution rights up to the specified per-unit quarterly distribution and have no rights to the Partnership’s undistributed earnings. Because the Class C units participate in distributions with common units according to a predetermined formula (see Note 3 ), they are considered a participating security and are included in the computation of earnings per unit pursuant to the two-class method. The Class C unit participation right results in a non-contingent transfer of value each time the Partnership declares a distribution. Diluted net income (loss) per common unit is calculated by dividing the sum of (i) the limited partners’ interest in net income (loss) attributable to common units adjusted for distributions on the Series A Preferred units and a reallocation of the limited partners’ interest in net income (loss) assuming conversion of the Series A Preferred units into common units, and (ii) the limited partners’ interest in net income (loss) allocable to the Class C units as a participating security, by the sum of the weighted-average number of common units outstanding plus the dilutive effect of (i) the weighted-average number of outstanding Class C units and (ii) the weighted-average number of common units outstanding assuming conversion of the Series A Preferred units. |
Recently issued accounting standards policy | Recently issued accounting standards . The Financial Accounting Standards Board recently issued the following Accounting Standards Updates (“ASUs”): ASU 2016-02, Leases (Topic - 842). This ASU requires the lessees to recognize a lease liability and a right-of-use asset for all leases, including operating leases, with a term greater than 12 months on the balance sheet and disclose key information about their leasing transactions. This ASU is effective for annual and interim periods beginning in 2019. The Partnership is evaluating the impact of the adoption of this ASU on its consolidated financial statements. 1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (CONTINUED) ASU 2016-01, Financial Instruments—Overall: Recognition and Measurement of Financial Assets and Financial Liabilities (Subtopic 825-10). This ASU amends existing requirements on the classification and measurement of financial instruments. Changes to the current requirements primarily affect the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. This ASU is effective for annual periods beginning in 2018 with early adoption of certain provisions permitted. The Partnership is evaluating the impact of the adoption of this ASU on its consolidated financial statements. ASU 2015-06, Earnings Per Share (Topic - 260)—Effects on Historical Earnings per Unit of Master Limited Partnership Dropdown Transactions . This ASU provides guidance for the presentation of historical earnings per unit for master limited partnerships that apply the two-class method of calculating earnings per unit. When a general partner transfers or “drops down” net assets to a master limited partnership, the transaction is accounted for as a transaction between entities under common control, and the statements of operations are adjusted retrospectively to reflect the transaction. This ASU specifies that the historical earnings (losses) of a transferred business before the date of a dropdown transaction should be allocated entirely to the general partner, and the previously reported earnings per unit of the limited partners should not change as a result of the dropdown transaction. The ASU also requires additional disclosures about how the rights to the earnings (losses) differ before and after the dropdown transaction occurs for purposes of computing earnings per unit under the two-class method. The Partnership applies the two-class method of calculating earnings per unit as described above (including the allocation of pre-acquisition net income (loss) to the general partner), and discloses the rights to earnings (losses) noted above. As such, there was no impact to the Partnership’s consolidated financial statements upon adoption of this ASU on January 1, 2016. ASU 2015-03, Interest—Imputation of Interest (Subtopic 835-30)—Simplifying the Presentation of Debt Issuance Costs and ASU 2015-15, Interest—Imputation of Interest (Subtopic 835-30)—Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements . These ASUs require capitalized debt issuance costs, except for those related to revolving credit facilities, to be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability, rather than as an asset. The Partnership adopted these ASUs on January 1, 2016, using a retrospective approach. The adoption resulted in a reclassification that reduced Other assets and Long-term debt by $16.7 million on the Partnership’s consolidated balance sheet at December 31, 2015. See Note 9 . ASU 2015-02, Consolidation—Amendments to the Consolidation Analysis . This ASU amends existing requirements applicable to reporting entities that are required to evaluate consolidation of a legal entity under the variable interest entity (“VIE”) or voting interest entity models. The provisions will affect how limited partnerships and similar entities are assessed for consolidation, including an additional requirement that a limited partnership will be a VIE unless the limited partners have either substantive kick-out or participating rights over the general partner. The Partnership evaluated the impact of the adoption of this ASU on its consolidated financial statements and determined it does not have any entities for which it is the primary beneficiary for accounting and disclosure purposes. As such, the adoption of this ASU on January 1, 2016, did not impact the Partnership’s consolidated financial statements. ASU 2014-09, Revenue from Contracts with Customers (Topic 606), ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) , and ASU 2016-10, Revenues from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing , which supersede the revenue recognition requirements in Topic 605, Revenue Recognition , require an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration the entity expects to be entitled to in exchange for those goods or services. The Partnership is required to adopt the new standards in the first quarter of 2018 using one of two retrospective application methods. The Partnership is continuing to evaluate the provisions of these ASUs, and has not determined the impact these standards may have on its consolidated financial statements and related disclosures or decided upon the method of adoption. |
Description of Business and B19
Description of Business and Basis of Presentation (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Assets and Investments Table | As of March 31, 2016 , the Partnership’s assets and investments accounted for under the equity method consisted of the following: Owned and Operated Operated Interests Non-Operated Interests Equity Interests Gathering systems 12 4 5 2 Treating facilities 13 8 — 3 Natural gas processing plants/trains 18 5 — 2 NGL pipelines 2 — — 3 Natural gas pipelines 4 — — — Oil pipelines — 1 — 1 |
Ownership Interest and Method of Consolidation Table | The following table outlines the Partnership’s ownership interests and the accounting method of consolidation used in the Partnership’s consolidated financial statements: Percentage Interest Equity investments (1) Fort Union 14.81 % White Cliffs 10 % Rendezvous 22 % Mont Belvieu JV 25 % TEP 20 % TEG 20 % FRP 33.33 % Proportionate consolidation (2) Non-Operated Marcellus Interest systems 33.75 % Anadarko-Operated Marcellus Interest systems 33.75 % Newcastle system 50 % DBJV 50 % Springfield 50.1 % Full consolidation Chipeta (3) 75 % (1) Investments in non-controlled entities over which the Partnership exercises significant influence are accounted for under the equity method. “Equity investment throughput” refers to the Partnership’s share of average throughput for these investments. (2) The Partnership proportionately consolidates its associated share of the assets, liabilities, revenues and expenses attributable to these assets. (3) The 25% interest in Chipeta Processing LLC (“Chipeta”) held by a third-party member is reflected within noncontrolling interest in the consolidated financial statements. |
Acquisitions and Divestitures (
Acquisitions and Divestitures (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Acquisitions Table | The following table presents the acquisitions completed by the Partnership during 2016 and 2015 , and identifies the funding sources for such acquisitions: thousands except unit and percent amounts Acquisition Date Percentage Deferred Purchase Price Obligation - Anadarko Borrowings Common Units Issued Series A Preferred Units DBJV (1) 03/02/2015 100 % $ 174,276 $ — — — Springfield (2) 03/14/2016 100 % — 247,500 2,089,602 14,030,611 (1) The Partnership acquired Delaware Basin JV Gathering LLC (“DBJV”) from Anadarko. DBJV owns a 50% interest in a gathering system and related facilities, such interest being referred to in this report as the “DBJV system”. The DBJV gathering system and related facilities are located in the Delaware Basin in Loving, Ward, Winkler and Reeves Counties, Texas. The Partnership will make a cash payment on March 31, 2020, to Anadarko as consideration for the acquisition of DBJV. The Partnership currently estimates the future payment will be $282.8 million , the net present value of which was $174.3 million as of the acquisition date. See DBJV acquisition—deferred purchase price obligation - Anadarko below. (2) The Partnership acquired Springfield Pipeline LLC (“Springfield”) from Anadarko for $750.0 million , consisting of $712.5 million in cash and the issuance of 1,253,761 of the Partnership’s common units. Springfield owns a 50.1% interest in an oil gathering system and a gas gathering system, such interest being referred to in this report as the “Springfield system.” The Springfield oil and gas gathering systems are located in Dimmit, La Salle, Maverick and Webb Counties in South Texas. The Partnership financed the cash portion of the acquisition through: (i) borrowings of $247.5 million on the Partnership’s senior unsecured revolving credit facility (“RCF”), (ii) the issuance of 835,841 of the Partnership’s common units to WGP and (iii) the issuance of the Series A Preferred units noted above to private investors (the “initial issuance”). See Note 4 for further information regarding the Series A Preferred units, including the full exercise of an option granted in connection with the initial issuance. |
Impact to Historical Consolidated Statements of Income Table | The following table presents the impact of the Springfield system on Revenues and other, Equity income, net and Net income (loss) as presented in the Partnership’s historical consolidated statements of income: Three Months Ended March 31, 2015 thousands Partnership Historical Springfield System Eliminations Combined Revenues and other $ 388,409 $ 48,614 $ (17 ) $ 437,006 Equity income, net 18,220 — — 18,220 Net income (loss) (176,564 ) 23,297 — (153,267 ) |
Partnership Distributions (Tabl
Partnership Distributions (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Distributions Made to Members or Limited Partners [Abstract] | |
Cash Distributions Table | The Board of Directors of the general partner declared the following cash distributions to the Partnership’s common and general partner unitholders for the periods presented: thousands except per-unit amounts Quarters Ended Total Quarterly Distribution per Unit Total Quarterly Cash Distribution Date of Distribution 2015 March 31 $ 0.725 $ 133,203 May 2015 June 30 0.750 139,736 August 2015 September 30 0.775 146,160 November 2015 December 31 0.800 152,588 February 2016 2016 March 31 (1) $ 0.815 $ 158,905 May 2016 (1) On April 22, 2016 , the Board of Directors of the Partnership’s general partner declared a cash distribution to the Partnership’s unitholders of $0.815 per unit, or $158.9 million in aggregate, including incentive distributions, but excluding distributions on Class C units (see Class C unit distributions below) and Series A Preferred units (see Series A Preferred unit distributions below). The cash distribution is payable on May 13, 2016 , to unitholders of record at the close of business on May 2, 2016 . |
Equity and Partners' Capital (T
Equity and Partners' Capital (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Partners' Capital Notes [Abstract] | |
Partnership Interests Table | The following table summarizes the common, Class C, Series A Preferred and general partner units issued during the three months ended March 31, 2016 : Common Units Class C Units Series A Preferred Units General Partner Units Total Balance at December 31, 2015 128,576,965 11,411,862 — 2,583,068 142,571,895 PIK Class C units — 323,584 — — 323,584 Springfield acquisition 2,089,602 — 14,030,611 — 16,120,213 Balance at March 31, 2016 130,666,567 11,735,446 14,030,611 2,583,068 159,015,692 |
Calculation of Net Income (Loss) Per Unit Table | The following table illustrates the Partnership’s calculation of net income (loss) per unit for common units: Three Months Ended thousands except per-unit amounts 2016 2015 Net income (loss) attributable to Western Gas Partners, LP $ 116,060 $ (156,493 ) Pre-acquisition net (income) loss allocated to Anadarko (11,326 ) (25,039 ) Series A Preferred units interest in net (income) loss (1) (2,329 ) — General partner interest in net (income) loss (55,400 ) (37,177 ) Common and Class C limited partners’ interest in net income (loss) $ 47,005 $ (218,709 ) Net income (loss) allocable to common units (1) $ 39,562 $ (205,258 ) Net income (loss) allocable to Class C units (1) 7,443 (13,451 ) Common and Class C limited partners’ interest in net income (loss) $ 47,005 $ (218,709 ) Net income (loss) per unit Common units – basic and diluted (2) $ 0.31 $ (1.61 ) Weighted-average units outstanding Common units – basic and diluted 128,990 127,736 Excluded due to anti-dilutive effect: Class C units 11,590 10,938 Series A Preferred units assuming conversion to common units 2,775 — (1) Adjusted to reflect amortization of the beneficial conversion feature. (2) The impact of Class C units and the conversion of Series A Preferred units would be anti-dilutive. |
Transactions with Affiliates (T
Transactions with Affiliates (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Related Party Fees and Other Arrangements, Limited Liability Company (LLC) or Limited Partnership (LP) [Abstract] | |
Commodity Price Swap Agreements Table | Below is a summary of the fixed price ranges on all of the Partnership’s outstanding commodity price swap agreements as of March 31, 2016 : per barrel except natural gas 2016 Ethane $ 18.41 − 23.11 Propane 47.08 − 52.90 Isobutane 62.09 − 73.89 Normal butane 54.62 − 64.93 Natural gasoline 72.88 − 81.68 Condensate 76.47 − 81.68 Natural gas (per MMBtu) 4.87 − 5.96 |
Gains (Losses) on Commodity Price Swap Agreements Table | The following table summarizes gains and losses upon settlement of commodity price swap agreements recognized in the consolidated statements of income: Three Months Ended thousands 2016 2015 Gains (losses) on commodity price swap agreements related to sales: (1) Natural gas sales $ 7,041 $ 10,982 Natural gas liquids sales 20,070 44,432 Total 27,111 55,414 Losses on commodity price swap agreements related to purchases (2) (18,871 ) (34,179 ) Net gains (losses) on commodity price swap agreements $ 8,240 $ 21,235 (1) Reported in affiliate Natural gas and natural gas liquids 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. |
Commodity Price Swap Agreements Extensions Tables | The table below summarizes the swap prices for the extension period compared to the forward market prices as of the agreement date, June 25, 2015. DJ Basin Complex Hugoton System per barrel except natural gas 2015 Swap Prices Market Prices (1) 2015 Swap Prices Market Prices (1) Ethane $ 18.41 $ 1.96 — — Propane 47.08 13.10 — — Isobutane 62.09 19.75 — — Normal butane 54.62 18.99 — — Natural gasoline 72.88 52.59 — — Condensate 76.47 52.59 $ 78.61 $ 32.56 Natural gas (per MMBtu) 5.96 2.75 5.50 2.74 (1) Represents the New York Mercantile Exchange (“NYMEX”) forward strip price as of June 25, 2015, adjusted for product specification, location, basis and, in the case of NGLs, transportation and fractionation costs. On December 8, 2015, the commodity price swap agreements with Anadarko for the DJ Basin complex and Hugoton system were further extended from January 1, 2016, through December 31, 2016. The table below summarizes the swap prices for the extension period compared to the forward market prices as of the agreement date, December 8, 2015. DJ Basin Complex Hugoton System per barrel except natural gas 2016 Swap Prices Market Prices (1) 2016 Swap Prices Market Prices (1) Ethane $ 18.41 $ 0.60 — — Propane 47.08 10.98 — — Isobutane 62.09 17.23 — — Normal butane 54.62 16.86 — — Natural gasoline 72.88 26.15 — — Condensate 76.47 34.65 $ 78.61 $ 18.81 Natural gas (per MMBtu) 5.96 2.11 5.50 2.12 (1) Represents the NYMEX forward strip price as of December 8, 2015, adjusted for product specification, location, basis and, in the case of NGLs, transportation and fractionation costs. |
Related Party Transactions Tables | The following table summarizes the Partnership’s purchases from Anadarko of pipe and equipment: Three Months Ended March 31, 2016 2015 thousands Purchases Cash consideration $ 1,096 $ 765 Payable to affiliate 990 — Net carrying value 1,372 560 Partners’ capital adjustment $ 714 $ 205 Summary of affiliate transactions. The following table summarizes material affiliate transactions. See Note 2 for discussion of affiliate acquisitions and related funding. Three Months Ended thousands 2016 2015 Revenues and other (1) $ 272,584 $ 306,928 Equity income, net (1) 16,814 18,220 Cost of product (1) 24,580 43,895 Operation and maintenance (2) 17,975 16,817 General and administrative (3) 8,952 8,135 Operating expenses 51,507 68,847 Interest income (4) 4,225 4,225 Interest expense (5) 4,537 1,420 Proceeds from the issuance of common units, net of offering expenses (6) 25,000 — Distributions to unitholders (7) 89,769 71,695 Above-market component of swap extensions with Anadarko 6,813 — (1) Represents amounts earned or incurred on and subsequent to the date of acquisition of the Partnership assets, as well as amounts earned or incurred by Anadarko on a historical basis related to the Partnership assets prior to the acquisition of such assets, 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. (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) For the three months ended March 31, 2016 and 2015 , includes accretion expense recognized on the Deferred purchase price obligation - Anadarko for the acquisition of DBJV (see Note 2 and Note 9 ). (6) Represents proceeds from the issuance of 835,841 common units to WGP as partial funding for the acquisition of Springfield (see Note 2 ). (7) Represents distributions paid under the partnership agreement (see Note 3 and Note 4 ). |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment Table | A summary of the historical cost of the Partnership’s property, plant and equipment is as follows: thousands Estimated Useful Life March 31, 2016 December 31, 2015 Land n/a $ 3,946 $ 3,744 Gathering systems 3 to 47 years 6,160,896 6,061,004 Pipelines and equipment 15 to 45 years 136,263 136,290 Assets under construction n/a 371,358 329,887 Other 3 to 40 years 28,346 25,853 Total property, plant and equipment 6,700,809 6,556,778 Accumulated depreciation 1,760,590 1,697,999 Net property, plant and equipment $ 4,940,219 $ 4,858,779 |
Equity Investments (Tables)
Equity Investments (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Investments Table | The following table presents the activity in the Partnership’s equity investments for the three months ended March 31, 2016 : Equity Investments thousands Fort White Rendezvous Mont TEG TEP FRP Total Balance at December 31, 2015 $ 17,122 $ 50,439 $ 50,913 $ 117,089 $ 16,283 $ 194,803 $ 172,238 $ 618,887 Investment earnings (loss), net of amortization (2,192 ) 3,993 550 5,419 257 4,097 4,690 16,814 Contributions — 106 — — — (580 ) — (474 ) Distributions — (3,848 ) (1,036 ) (5,428 ) (262 ) (4,160 ) (5,121 ) (19,855 ) Distributions in excess of cumulative earnings (1) (783 ) (877 ) (1,541 ) (172 ) (21 ) (1,390 ) — (4,784 ) Balance at March 31, 2016 $ 14,147 $ 49,813 $ 48,886 $ 116,908 $ 16,257 $ 192,770 $ 171,807 $ 610,588 (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. |
Components of Working Capital (
Components of Working Capital (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Components Of Working Capital [Abstract] | |
Accounts Receivable, Net Table | A summary of accounts receivable, net is as follows: thousands March 31, 2016 December 31, 2015 Trade receivables, net $ 130,731 $ 143,557 Other receivables, net 49,042 49,772 Total accounts receivable, net $ 179,773 $ 193,329 |
Other Current Assets Table | A summary of other current assets is as follows: thousands March 31, 2016 December 31, 2015 Natural gas liquids inventory $ 832 $ 2,403 Imbalance receivables 1,425 2,122 Prepaid insurance 1,298 2,296 Other — 1,034 Total other current assets $ 3,555 $ 7,855 |
Accrued Liabilities Table | A summary of accrued liabilities is as follows: thousands March 31, 2016 December 31, 2015 Accrued capital expenditures $ 68,152 $ 61,454 Accrued plant purchases 15,885 16,425 Accrued interest expense 34,540 26,194 Short-term asset retirement obligations 2,909 3,677 Short-term remediation and reclamation obligations 1,136 1,136 Income taxes payable 931 770 Other 4,284 9,363 Total accrued liabilities $ 127,837 $ 119,019 |
Debt and Interest Expense (Tabl
Debt and Interest Expense (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Debt Instruments [Abstract] | |
Debt Outstanding and Debt Activity Tables | The following table presents the Partnership’s outstanding debt as of March 31, 2016 , and December 31, 2015 : March 31, 2016 December 31, 2015 thousands Principal Carrying Value Fair Value (1) Principal Carrying Value Fair Value (1) 2021 Notes $ 500,000 $ 493,962 $ 480,315 $ 500,000 $ 493,711 $ 513,645 2022 Notes 670,000 668,482 597,975 670,000 668,432 595,744 2018 Notes 350,000 348,826 331,187 350,000 348,706 339,293 2044 Notes 400,000 389,744 313,752 400,000 389,707 321,499 2025 Notes 500,000 490,311 427,500 500,000 490,095 422,285 RCF 630,000 630,000 630,000 300,000 300,000 300,000 Total long-term debt $ 3,050,000 $ 3,021,325 $ 2,780,729 $ 2,720,000 $ 2,690,651 $ 2,492,466 (1) Fair value is measured using the market approach and Level 2 inputs. Debt activity. The following table presents the debt activity of the Partnership for the three months ended March 31, 2016 : thousands Carrying Value Balance at December 31, 2015 $ 2,690,651 RCF borrowings 330,000 Other 674 Balance at March 31, 2016 $ 3,021,325 |
Interest Expense Table | The following table summarizes the amounts included in interest expense: Three Months Ended thousands 2016 2015 Third parties Long-term debt $ 27,818 $ 23,342 Amortization of debt issuance costs and commitment fees 1,530 1,292 Capitalized interest (1,849 ) (3,094 ) Total interest expense – third parties 27,499 21,540 Affiliates Deferred purchase price obligation – Anadarko (1) 4,537 1,420 Total interest expense – affiliates 4,537 1,420 Interest expense $ 32,036 $ 22,960 (1) See Note 2 for a discussion of the accretion and net present value of the Deferred purchase price obligation - Anadarko. |
Description of Business and B28
Description of Business and Basis of Presentation - Asset Table (Details) | Mar. 31, 2016unit |
Operated [Member] | Gathering Systems [Member] | |
Assets [Line Items] | |
Assets, number of units | 12 |
Operated [Member] | Treating Facilities [Member] | |
Assets [Line Items] | |
Assets, number of units | 13 |
Operated [Member] | Natural Gas Processing Plants/Trains [Member] | |
Assets [Line Items] | |
Assets, number of units | 18 |
Operated [Member] | Natural Gas Liquids Pipelines [Member] | |
Assets [Line Items] | |
Assets, number of units | 2 |
Operated [Member] | Natural Gas Pipelines [Member] | |
Assets [Line Items] | |
Assets, number of units | 4 |
Operated Interests [Member] | Gathering Systems [Member] | |
Assets [Line Items] | |
Assets, number of units | 4 |
Operated Interests [Member] | Treating Facilities [Member] | |
Assets [Line Items] | |
Assets, number of units | 8 |
Operated Interests [Member] | Natural Gas Processing Plants/Trains [Member] | |
Assets [Line Items] | |
Assets, number of units | 5 |
Operated Interests [Member] | Oil Pipelines [Member] | |
Assets [Line Items] | |
Assets, number of units | 1 |
Non-Operated Interests [Member] | Gathering Systems [Member] | |
Assets [Line Items] | |
Assets, number of units | 5 |
Equity Interests [Member] | Gathering Systems [Member] | |
Assets [Line Items] | |
Assets, number of units | 2 |
Equity Interests [Member] | Treating Facilities [Member] | |
Assets [Line Items] | |
Assets, number of units | 3 |
Equity Interests [Member] | Natural Gas Processing Plants/Trains [Member] | |
Assets [Line Items] | |
Assets, number of units | 2 |
Equity Interests [Member] | Natural Gas Liquids Pipelines [Member] | |
Assets [Line Items] | |
Assets, number of units | 3 |
Equity Interests [Member] | Oil Pipelines [Member] | |
Assets [Line Items] | |
Assets, number of units | 1 |
Description of Business and B29
Description of Business and Basis of Presentation - Ownership Interest and Method of Consolidation Table (Details) | 3 Months Ended | |
Mar. 31, 2016 | ||
Chipeta Processing Limited Liability Company [Member] | ||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||
Ownership interest by noncontrolling interest owner | 25.00% | |
Equity Investments [Member] | Fort Union [Member] | ||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||
Percentage ownership interest | 14.81% | [1] |
Equity Investments [Member] | White Cliffs [Member] | ||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||
Percentage ownership interest | 10.00% | [1] |
Equity Investments [Member] | Rendezvous [Member] | ||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||
Percentage ownership interest | 22.00% | [1] |
Equity Investments [Member] | Mont Belvieu JV [Member] | ||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||
Percentage ownership interest | 25.00% | [1] |
Equity Investments [Member] | Texas Express Pipeline LLC [Member] | ||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||
Percentage ownership interest | 20.00% | [1] |
Equity Investments [Member] | Texas Express Gathering LLC [Member] | ||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||
Percentage ownership interest | 20.00% | [1] |
Equity Investments [Member] | Front Range Pipeline LLC [Member] | ||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||
Percentage ownership interest | 33.33% | [1] |
Proportionate Consolidation [Member] | Non-Operated Marcellus Interest [Member] | ||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||
Percentage ownership interest | 33.75% | [2] |
Proportionate Consolidation [Member] | Anadarko-Operated Marcellus Interest [Member] | ||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||
Percentage ownership interest | 33.75% | [2] |
Proportionate Consolidation [Member] | Newcastle [Member] | ||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||
Percentage ownership interest | 50.00% | [2] |
Proportionate Consolidation [Member] | Delaware Basin JV Gathering LLC [Member] | ||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||
Percentage ownership interest | 50.00% | [2] |
Proportionate Consolidation [Member] | Springfield Pipeline LLC [Member] | ||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||
Percentage ownership interest | 50.10% | [2] |
Full Consolidation [Member] | Chipeta Processing Limited Liability Company [Member] | ||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||
Percentage ownership interest | 75.00% | [3] |
[1] | Investments in non-controlled entities over which the Partnership exercises significant influence are accounted for under the equity method. “Equity investment throughput” refers to the Partnership’s share of average throughput for these investments. | |
[2] | The Partnership proportionately consolidates its associated share of the assets, liabilities, revenues and expenses attributable to these assets. | |
[3] | The 25% interest in Chipeta Processing LLC (“Chipeta”) held by a third-party member is reflected within noncontrolling interest in the consolidated financial statements. |
Description of Business and B30
Description of Business and Basis of Presentation - Additional Information (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2016USD ($)Mcf / d | Dec. 31, 2015USD ($) | ||
Other assets | $ 13,740 | $ 13,001 | [1] |
Long-term debt | 3,021,325 | 2,690,651 | [1] |
Restatement Adjustment [Member] | Accounting Standards Update 2015-03 And 2015-15 [Member] | |||
Other assets | 16,700 | ||
Long-term debt | 16,700 | ||
Delaware Basin Midstream Complex [Member] | |||
Insurance receivable | $ 49,000 | $ 49,000 | |
Delaware Basin Midstream Complex [Member] | Train II [Member] | |||
Plant capacity | Mcf / d | 100,000 | ||
Delaware Basin Midstream Complex [Member] | Train III [Member] | |||
Plant capacity | Mcf / d | 200,000 | ||
[1] | Financial information has been recast to include the financial position and results attributable to the Springfield system. See Note 1 and Note 2. |
Acquisitions and Divestitures -
Acquisitions and Divestitures - Acquisitions Table (Details) - USD ($) $ in Thousands | Mar. 14, 2016 | Mar. 02, 2015 | Mar. 31, 2016 | |
Business Acquisition [Line Items] | ||||
Units issued | 323,584 | |||
Revolving Credit Facility [Member] | ||||
Business Acquisition [Line Items] | ||||
Borrowings | $ 330,000 | |||
Delaware Basin JV Gathering LLC [Member] | ||||
Business Acquisition [Line Items] | ||||
Percentage acquired | [1] | 100.00% | ||
Delaware Basin JV Gathering LLC [Member] | Delaware Basin JV Gathering System [Member] | ||||
Business Acquisition [Line Items] | ||||
Percentage acquired | 50.00% | |||
Delaware Basin JV Gathering LLC [Member] | Deferred Purchase Price Obligation - Anadarko [Member] | Level 3 Inputs [Member] | ||||
Business Acquisition [Line Items] | ||||
Deferred purchase price obligation to Anadarko - acquisition date value | [1] | $ 174,276 | ||
Delaware Basin JV Gathering LLC [Member] | Deferred Purchase Price Obligation - Anadarko [Member] | Level 3 Inputs [Member] | Affiliates [Member] | ||||
Business Acquisition [Line Items] | ||||
Deferred purchase price obligation to Anadarko - acquisition date value | 174,276 | |||
Deferred purchase price obligation to Anadarko - future value | $ 282,800 | |||
Springfield Pipeline LLC [Member] | ||||
Business Acquisition [Line Items] | ||||
Percentage acquired | [2] | 100.00% | ||
Acquisition price | $ 750,000 | |||
Springfield Pipeline LLC [Member] | Anadarko [Member] | ||||
Business Acquisition [Line Items] | ||||
Cash payment for acquisition | $ 712,500 | |||
Springfield Pipeline LLC [Member] | Common Units [Member] | ||||
Business Acquisition [Line Items] | ||||
Units issued | [2] | 2,089,602 | ||
Springfield Pipeline LLC [Member] | Common Units [Member] | Anadarko [Member] | ||||
Business Acquisition [Line Items] | ||||
Units issued | 1,253,761 | |||
Springfield Pipeline LLC [Member] | Common Units [Member] | Western Gas Equity Partners, LP [Member] | ||||
Business Acquisition [Line Items] | ||||
Units issued | 835,841 | |||
Springfield Pipeline LLC [Member] | Series A Preferred Units [Member] | ||||
Business Acquisition [Line Items] | ||||
Units issued | [2] | 14,030,611 | ||
Springfield Pipeline LLC [Member] | Springfield System [Member] | ||||
Business Acquisition [Line Items] | ||||
Percentage acquired | 50.10% | |||
Springfield Pipeline LLC [Member] | Revolving Credit Facility [Member] | ||||
Business Acquisition [Line Items] | ||||
Borrowings | [2] | $ 247,500 | ||
[1] | The Partnership acquired Delaware Basin JV Gathering LLC (“DBJV”) from Anadarko. DBJV owns a 50% interest in a gathering system and related facilities, such interest being referred to in this report as the “DBJV system”. The DBJV gathering system and related facilities are located in the Delaware Basin in Loving, Ward, Winkler and Reeves Counties, Texas. The Partnership will make a cash payment on March 31, 2020, to Anadarko as consideration for the acquisition of DBJV. The Partnership currently estimates the future payment will be $282.8 million, the net present value of which was $174.3 million as of the acquisition date. See DBJV acquisition—deferred purchase price obligation - Anadarko below. | |||
[2] | The Partnership acquired Springfield Pipeline LLC (“Springfield”) from Anadarko for $750.0 million, consisting of $712.5 million in cash and the issuance of 1,253,761 of the Partnership’s common units. Springfield owns a 50.1% interest in an oil gathering system and a gas gathering system, such interest being referred to in this report as the “Springfield system.” The Springfield oil and gas gathering systems are located in Dimmit, La Salle, Maverick and Webb Counties in South Texas. The Partnership financed the cash portion of the acquisition through: (i) borrowings of $247.5 million on the Partnership’s senior unsecured revolving credit facility (“RCF”), (ii) the issuance of 835,841 of the Partnership’s common units to WGP and (iii) the issuance of the Series A Preferred units noted above to private investors (the “initial issuance”). See Note 4 for further information regarding the Series A Preferred units, including the full exercise of an option granted in connection with the initial issuance. |
Acquisitions and Divestitures32
Acquisitions and Divestitures - Impact to Historical Consolidated Statements of Income Table (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2016 | Mar. 31, 2015 | |||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Revenues and other | $ 383,141 | $ 437,006 | [1] | |
Equity income, net | [2],[3],[4] | 16,814 | 18,220 | [1] |
Net income (loss) | $ 119,083 | (153,267) | [1] | |
Springfield Pipeline LLC [Member] | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Revenues and other | 48,614 | |||
Equity income, net | 0 | |||
Net income (loss) | 23,297 | |||
Springfield Pipeline LLC [Member] | Eliminations [Member] | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Revenues and other | (17) | |||
Equity income, net | 0 | |||
Net income (loss) | 0 | |||
Partnership Historical [Member] | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Revenues and other | 388,409 | |||
Equity income, net | 18,220 | |||
Net income (loss) | $ (176,564) | |||
[1] | Financial information has been recast to include the financial position and results attributable to the Springfield system. See Note 1 and Note 2. | |||
[2] | Income earned from equity investments is classified as affiliate. See Note 1. | |||
[3] | Income earned on, distributions from and contributions to equity investments are classified as affiliate. See Note 1. | |||
[4] | Represents amounts earned or incurred on and subsequent to the date of acquisition of the Partnership assets, as well as amounts earned or incurred by Anadarko on a historical basis related to the Partnership assets prior to the acquisition of such assets, recognized under gathering, treating or processing agreements, and purchase and sale agreements. |
Acquisitions and Divestitures33
Acquisitions and Divestitures - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |||||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | Mar. 02, 2015 | |||
Property, Plant and Equipment [Line Items] | ||||||
Deferred purchase price obligation - Anadarko | [1] | $ 193,211 | $ 188,674 | [2] | ||
Deferred Purchase Price Obligation - Anadarko [Member] | Affiliates [Member] | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Interest expense, related party | [3] | $ 4,537 | $ 1,420 | |||
Delaware Basin JV Gathering LLC [Member] | Deferred Purchase Price Obligation - Anadarko [Member] | Level 3 Inputs [Member] | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Deferred purchase price obligation to Anadarko - acquisition date value | [4] | $ 174,276 | ||||
Delaware Basin JV Gathering LLC [Member] | Deferred Purchase Price Obligation - Anadarko [Member] | Affiliates [Member] | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Discount rate percentage | 10.00% | |||||
Deferred purchase price obligation - Anadarko | $ 193,200 | $ 188,700 | ||||
Interest expense, related party | $ 4,500 | $ 1,400 | ||||
Delaware Basin JV Gathering LLC [Member] | Deferred Purchase Price Obligation - Anadarko [Member] | Affiliates [Member] | Level 3 Inputs [Member] | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Deferred purchase price obligation to Anadarko - future value | 282,800 | |||||
Deferred purchase price obligation to Anadarko - acquisition date value | $ 174,276 | |||||
[1] | See Note 2. | |||||
[2] | Financial information has been recast to include the financial position and results attributable to the Springfield system. See Note 1 and Note 2. | |||||
[3] | See Note 2 for a discussion of the accretion and net present value of the Deferred purchase price obligation - Anadarko. | |||||
[4] | The Partnership acquired Delaware Basin JV Gathering LLC (“DBJV”) from Anadarko. DBJV owns a 50% interest in a gathering system and related facilities, such interest being referred to in this report as the “DBJV system”. The DBJV gathering system and related facilities are located in the Delaware Basin in Loving, Ward, Winkler and Reeves Counties, Texas. The Partnership will make a cash payment on March 31, 2020, to Anadarko as consideration for the acquisition of DBJV. The Partnership currently estimates the future payment will be $282.8 million, the net present value of which was $174.3 million as of the acquisition date. See DBJV acquisition—deferred purchase price obligation - Anadarko below. |
Partnership Distributions - Cas
Partnership Distributions - Cash Distributions Table (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |||||
Mar. 31, 2016 | [1] | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | |
Distributions Made to Members or Limited Partners [Abstract] | ||||||
Total quarterly distribution per unit | $ 0.815 | $ 0.800 | $ 0.775 | $ 0.750 | $ 0.725 | |
Total quarterly cash distribution | $ 158,905 | $ 152,588 | $ 146,160 | $ 139,736 | $ 133,203 | |
[1] | On April 22, 2016, the Board of Directors of the Partnership’s general partner declared a cash distribution to the Partnership’s unitholders of $0.815 per unit, or $158.9 million in aggregate, including incentive distributions, but excluding distributions on Class C units (see Class C unit distributions below) and Series A Preferred units (see Series A Preferred unit distributions below). The cash distribution is payable on May 13, 2016, to unitholders of record at the close of business on May 2, 2016. |
Partnership Distributions - Add
Partnership Distributions - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Dec. 31, 2015 | |
Distribution Made to Limited Partner [Line Items] | ||
Partnership agreement day requirement of distribution of available cash | 45 days | |
Class C Units [Member] | ||
Distribution Made to Limited Partner [Line Items] | ||
Discount rate percentage | 6.00% | |
PIK Class C units | 323,584 | |
Units outstanding | 11,735,446 | 11,411,862 |
Series A Preferred Units [Member] | ||
Distribution Made to Limited Partner [Line Items] | ||
Series A Preferred units quarterly distribution per unit | $ 0.68 | |
Series A Preferred units quarterly cash distribution | $ 1.9 | |
Number of days in prorated period | 18 days | |
Units outstanding | 14,030,611 | 0 |
Equity and Partners' Capital -
Equity and Partners' Capital - Partnership Interests Table (Details) - shares | Mar. 14, 2016 | Mar. 31, 2016 | |
Capital Unit [Line Items] | |||
Balance | 142,571,895 | ||
Units issued | 323,584 | ||
Balance | 159,015,692 | ||
Springfield Pipeline LLC [Member] | |||
Capital Unit [Line Items] | |||
Acquisition | 16,120,213 | ||
Common Units [Member] | |||
Capital Unit [Line Items] | |||
Balance | 128,576,965 | ||
Balance | 130,666,567 | ||
Common Units [Member] | Springfield Pipeline LLC [Member] | |||
Capital Unit [Line Items] | |||
Units issued | [1] | 2,089,602 | |
Acquisition | 2,089,602 | ||
Class C Units [Member] | |||
Capital Unit [Line Items] | |||
Balance | 11,411,862 | ||
Units issued | 323,584 | ||
Balance | 11,735,446 | ||
Series A Preferred Units [Member] | |||
Capital Unit [Line Items] | |||
Balance | 0 | ||
Balance | 14,030,611 | ||
Series A Preferred Units [Member] | Springfield Pipeline LLC [Member] | |||
Capital Unit [Line Items] | |||
Units issued | [1] | 14,030,611 | |
Acquisition | 14,030,611 | ||
General Partner [Member] | |||
Capital Unit [Line Items] | |||
Balance | 2,583,068 | ||
Balance | 2,583,068 | ||
[1] | The Partnership acquired Springfield Pipeline LLC (“Springfield”) from Anadarko for $750.0 million, consisting of $712.5 million in cash and the issuance of 1,253,761 of the Partnership’s common units. Springfield owns a 50.1% interest in an oil gathering system and a gas gathering system, such interest being referred to in this report as the “Springfield system.” The Springfield oil and gas gathering systems are located in Dimmit, La Salle, Maverick and Webb Counties in South Texas. The Partnership financed the cash portion of the acquisition through: (i) borrowings of $247.5 million on the Partnership’s senior unsecured revolving credit facility (“RCF”), (ii) the issuance of 835,841 of the Partnership’s common units to WGP and (iii) the issuance of the Series A Preferred units noted above to private investors (the “initial issuance”). See Note 4 for further information regarding the Series A Preferred units, including the full exercise of an option granted in connection with the initial issuance. |
Equity and Partners' Capital 37
Equity and Partners' Capital - Calculation of Net Income (Loss) Per Unit Table (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |||
Mar. 31, 2016 | Mar. 31, 2015 | |||
Earnings Per Unit [Line Items] | ||||
Net income (loss) attributable to Western Gas Partners, LP | $ 116,060 | $ (156,493) | [1] | |
Pre-acquisition net (income) loss allocated to Anadarko | (11,326) | (25,039) | [1] | |
General partner interest in net (income) loss | [2] | $ (55,400) | $ (37,177) | [1] |
Net income (loss) per common unit – basic and diluted | [3],[4] | $ 0.31 | $ (1.61) | [1] |
Series A Preferred Units [Member] | ||||
Earnings Per Unit [Line Items] | ||||
Limited partners’ interest in net income (loss) | [2],[5] | $ 2,329 | $ 0 | [1] |
Anti-dilutive units excluded from computation of earnings per unit | 2,775 | 0 | ||
Common and Class C Units [Member] | ||||
Earnings Per Unit [Line Items] | ||||
Limited partners’ interest in net income (loss) | [2] | $ 47,005 | $ (218,709) | [1] |
Common Units [Member] | ||||
Earnings Per Unit [Line Items] | ||||
Limited partners’ interest in net income (loss) | [5] | $ 39,562 | $ (205,258) | |
Weighted-average common units outstanding - basic and diluted | 128,990 | 127,736 | ||
Class C Units [Member] | ||||
Earnings Per Unit [Line Items] | ||||
Limited partners’ interest in net income (loss) | [5] | $ 7,443 | $ (13,451) | |
Anti-dilutive units excluded from computation of earnings per unit | 11,590 | 10,938 | ||
[1] | Financial information has been recast to include the financial position and results attributable to the Springfield system. See Note 1 and Note 2. | |||
[2] | Represents net income (loss) earned on and subsequent to the date of acquisition of the Partnership assets (as defined in Note 1). See Note 4. | |||
[3] | See Note 4 for the calculation of net income (loss) per common unit. | |||
[4] | The impact of Class C units and the conversion of Series A Preferred units would be anti-dilutive. | |||
[5] | Adjusted to reflect amortization of the beneficial conversion feature. |
Equity and Partners' Capital 38
Equity and Partners' Capital - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | Mar. 14, 2016 | Apr. 30, 2016 | Nov. 30, 2014 | Mar. 31, 2016 | Mar. 31, 2015 | [1] | Dec. 31, 2015 | Dec. 31, 2014 | Aug. 31, 2014 |
Schedule Of Investments [Line Items] | |||||||||
Units issued | 323,584 | ||||||||
Beneficial conversion feature | $ 0 | ||||||||
General partner units owned | 2,583,068 | 2,583,068 | |||||||
Western Gas Equity Partners, LP [Member] | |||||||||
Schedule Of Investments [Line Items] | |||||||||
General partner units owned | 2,583,068 | ||||||||
General partner's interest | 1.60% | ||||||||
Class C Units [Member] | |||||||||
Schedule Of Investments [Line Items] | |||||||||
Units issued | 323,584 | ||||||||
Price per unit | $ 68.72 | ||||||||
Proceeds from the issuance of units | $ 750,000 | ||||||||
Beneficial conversion feature | $ 34,800 | ||||||||
Limited partner units owned | 11,735,446 | 11,411,862 | |||||||
Class C Units [Member] | Other Subsidiaries Of Anadarko [Member] | |||||||||
Schedule Of Investments [Line Items] | |||||||||
Units issued | 10,913,853 | ||||||||
Limited partner units owned | 11,735,446 | ||||||||
Class C Units [Member] | Maximum [Member] | |||||||||
Schedule Of Investments [Line Items] | |||||||||
Redeemable option on units | $ 150,000 | ||||||||
Series A Preferred Units [Member] | |||||||||
Schedule Of Investments [Line Items] | |||||||||
Price per unit | $ 32 | ||||||||
Proceeds from the issuance of units | $ 440,000 | $ 440,000 | $ 0 | ||||||
Beneficial conversion feature | $ 21,747 | ||||||||
Transaction fee | 2.00% | ||||||||
Series A Preferred units, units issued upon conversion | 1 | ||||||||
Minimum common unit closing price for conversion | $ 48 | ||||||||
Redemption price per unit | $ 32.32 | ||||||||
Limited partner units owned | 14,030,611 | 0 | |||||||
Series A Preferred Units [Member] | Subsequent Event [Member] | |||||||||
Schedule Of Investments [Line Items] | |||||||||
Proceeds from the issuance of units | $ 247,500 | ||||||||
Series A Preferred Units [Member] | Private Investor [Member] | |||||||||
Schedule Of Investments [Line Items] | |||||||||
Units issued | 14,030,611 | ||||||||
Limited partner units owned | 14,030,611 | ||||||||
Limited partner ownership interest | 8.80% | ||||||||
Series A Preferred Units [Member] | Private Investor [Member] | Option on Securities [Member] | Subsequent Event [Member] | |||||||||
Schedule Of Investments [Line Items] | |||||||||
Units issued | 7,892,220 | ||||||||
Common Units [Member] | |||||||||
Schedule Of Investments [Line Items] | |||||||||
Limited partner units owned | 130,666,567 | 128,576,965 | |||||||
Common Units [Member] | Western Gas Equity Partners, LP [Member] | |||||||||
Schedule Of Investments [Line Items] | |||||||||
Limited partner units owned | 50,132,046 | ||||||||
Limited partner ownership interest | 31.50% | ||||||||
Common Units [Member] | Other Subsidiaries Of Anadarko [Member] | |||||||||
Schedule Of Investments [Line Items] | |||||||||
Limited partner units owned | 2,011,380 | ||||||||
Common Units [Member] | Public [Member] | |||||||||
Schedule Of Investments [Line Items] | |||||||||
Limited partner units owned | 78,523,141 | ||||||||
Limited partner ownership interest | 49.40% | ||||||||
Incentive Distribution Rights [Member] | Western Gas Equity Partners, LP [Member] | |||||||||
Schedule Of Investments [Line Items] | |||||||||
General partner's interest | 100.00% | ||||||||
Common and Class C Units [Member] | Other Subsidiaries Of Anadarko [Member] | |||||||||
Schedule Of Investments [Line Items] | |||||||||
Limited partner ownership interest | 8.70% | ||||||||
500 Million COP [Member] | |||||||||
Schedule Of Investments [Line Items] | |||||||||
Maximum aggregate principal of common units | $ 500,000 | ||||||||
Average price per unit | $ 66.61 | ||||||||
Net proceeds | $ 57,400 | ||||||||
Underwriting discount and other offering expenses | 800 | ||||||||
Gross proceeds | 58,200 | ||||||||
Commissions paid | $ 600 | ||||||||
500 Million COP [Member] | Common Units [Member] | |||||||||
Schedule Of Investments [Line Items] | |||||||||
Common units issued | 0 | 873,525 | |||||||
[1] | Financial information has been recast to include the financial position and results attributable to the Springfield system. See Note 1 and Note 2. |
Transactions with Affiliates -
Transactions with Affiliates - Commodity Price Swap Agreements Table (Details) - Year 2016 [Member] | Mar. 31, 2016$ / MMBTU$ / bbl |
Ethane [Member] | Minimum [Member] | |
Commodity Price Risk Swap [Line Items] | |
Commodity swap fixed price | 18.41 |
Ethane [Member] | Maximum [Member] | |
Commodity Price Risk Swap [Line Items] | |
Commodity swap fixed price | 23.11 |
Propane [Member] | Minimum [Member] | |
Commodity Price Risk Swap [Line Items] | |
Commodity swap fixed price | 47.08 |
Propane [Member] | Maximum [Member] | |
Commodity Price Risk Swap [Line Items] | |
Commodity swap fixed price | 52.90 |
Isobutane [Member] | Minimum [Member] | |
Commodity Price Risk Swap [Line Items] | |
Commodity swap fixed price | 62.09 |
Isobutane [Member] | Maximum [Member] | |
Commodity Price Risk Swap [Line Items] | |
Commodity swap fixed price | 73.89 |
Normal butane [Member] | Minimum [Member] | |
Commodity Price Risk Swap [Line Items] | |
Commodity swap fixed price | 54.62 |
Normal butane [Member] | Maximum [Member] | |
Commodity Price Risk Swap [Line Items] | |
Commodity swap fixed price | 64.93 |
Natural gasoline [Member] | Minimum [Member] | |
Commodity Price Risk Swap [Line Items] | |
Commodity swap fixed price | 72.88 |
Natural gasoline [Member] | Maximum [Member] | |
Commodity Price Risk Swap [Line Items] | |
Commodity swap fixed price | 81.68 |
Condensate [Member] | Minimum [Member] | |
Commodity Price Risk Swap [Line Items] | |
Commodity swap fixed price | 76.47 |
Condensate [Member] | Maximum [Member] | |
Commodity Price Risk Swap [Line Items] | |
Commodity swap fixed price | 81.68 |
Natural gas (per MMBtu) [Member] | Minimum [Member] | |
Commodity Price Risk Swap [Line Items] | |
Commodity swap fixed price | $ / MMBTU | 4.87 |
Natural gas (per MMBtu) [Member] | Maximum [Member] | |
Commodity Price Risk Swap [Line Items] | |
Commodity swap fixed price | $ / MMBTU | 5.96 |
Transactions with Affiliates 40
Transactions with Affiliates - Gains (Losses) on Commodity Price Swap Agreements Table (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | ||
Gains (losses) on commodity price swap agreements related to sales and purchases | |||
Gains (losses) on commodity price swap agreements | $ 8,240 | $ 21,235 | |
Sales [Member] | |||
Gains (losses) on commodity price swap agreements related to sales and purchases | |||
Gains (losses) on commodity price swap agreements | [1] | 27,111 | 55,414 |
Sales [Member] | Natural Gas [Member] | |||
Gains (losses) on commodity price swap agreements related to sales and purchases | |||
Gains (losses) on commodity price swap agreements | [1] | 7,041 | 10,982 |
Sales [Member] | Natural Gas Liquids [Member] | |||
Gains (losses) on commodity price swap agreements related to sales and purchases | |||
Gains (losses) on commodity price swap agreements | [1] | 20,070 | 44,432 |
Purchases [Member] | |||
Gains (losses) on commodity price swap agreements related to sales and purchases | |||
Gains (losses) on commodity price swap agreements | [2] | $ (18,871) | $ (34,179) |
[1] | Reported in affiliate Natural gas and natural gas liquids 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. |
Transactions with Affiliates 41
Transactions with Affiliates - Commodity Price Swap Agreements Extensions Tables (Details) | Dec. 08, 2015$ / MMBTU$ / bbl | Jun. 25, 2015$ / MMBTU$ / bbl | |
Year 2015 [Member] | DJ Basin Complex [Member] | Ethane [Member] | |||
Commodity Price Risk Swap [Line Items] | |||
Commodity swap fixed price | 18.41 | ||
Commodity market price | [1] | 1.96 | |
Year 2015 [Member] | DJ Basin Complex [Member] | Propane [Member] | |||
Commodity Price Risk Swap [Line Items] | |||
Commodity swap fixed price | 47.08 | ||
Commodity market price | [1] | 13.10 | |
Year 2015 [Member] | DJ Basin Complex [Member] | Isobutane [Member] | |||
Commodity Price Risk Swap [Line Items] | |||
Commodity swap fixed price | 62.09 | ||
Commodity market price | [1] | 19.75 | |
Year 2015 [Member] | DJ Basin Complex [Member] | Normal butane [Member] | |||
Commodity Price Risk Swap [Line Items] | |||
Commodity swap fixed price | 54.62 | ||
Commodity market price | [1] | 18.99 | |
Year 2015 [Member] | DJ Basin Complex [Member] | Natural gasoline [Member] | |||
Commodity Price Risk Swap [Line Items] | |||
Commodity swap fixed price | 72.88 | ||
Commodity market price | [1] | 52.59 | |
Year 2015 [Member] | DJ Basin Complex [Member] | Condensate [Member] | |||
Commodity Price Risk Swap [Line Items] | |||
Commodity swap fixed price | 76.47 | ||
Commodity market price | [1] | 52.59 | |
Year 2015 [Member] | DJ Basin Complex [Member] | Natural gas (per MMBtu) [Member] | |||
Commodity Price Risk Swap [Line Items] | |||
Commodity swap fixed price | $ / MMBTU | 5.96 | ||
Commodity market price | $ / MMBTU | [1] | 2.75 | |
Year 2015 [Member] | Hugoton System [Member] | Condensate [Member] | |||
Commodity Price Risk Swap [Line Items] | |||
Commodity swap fixed price | 78.61 | ||
Commodity market price | [1] | 32.56 | |
Year 2015 [Member] | Hugoton System [Member] | Natural gas (per MMBtu) [Member] | |||
Commodity Price Risk Swap [Line Items] | |||
Commodity swap fixed price | $ / MMBTU | 5.50 | ||
Commodity market price | $ / MMBTU | [1] | 2.74 | |
Year 2016 [Member] | DJ Basin Complex [Member] | Ethane [Member] | |||
Commodity Price Risk Swap [Line Items] | |||
Commodity swap fixed price | 18.41 | ||
Commodity market price | [2] | 0.60 | |
Year 2016 [Member] | DJ Basin Complex [Member] | Propane [Member] | |||
Commodity Price Risk Swap [Line Items] | |||
Commodity swap fixed price | 47.08 | ||
Commodity market price | [2] | 10.98 | |
Year 2016 [Member] | DJ Basin Complex [Member] | Isobutane [Member] | |||
Commodity Price Risk Swap [Line Items] | |||
Commodity swap fixed price | 62.09 | ||
Commodity market price | [2] | 17.23 | |
Year 2016 [Member] | DJ Basin Complex [Member] | Normal butane [Member] | |||
Commodity Price Risk Swap [Line Items] | |||
Commodity swap fixed price | 54.62 | ||
Commodity market price | [2] | 16.86 | |
Year 2016 [Member] | DJ Basin Complex [Member] | Natural gasoline [Member] | |||
Commodity Price Risk Swap [Line Items] | |||
Commodity swap fixed price | 72.88 | ||
Commodity market price | [2] | 26.15 | |
Year 2016 [Member] | DJ Basin Complex [Member] | Condensate [Member] | |||
Commodity Price Risk Swap [Line Items] | |||
Commodity swap fixed price | 76.47 | ||
Commodity market price | [2] | 34.65 | |
Year 2016 [Member] | DJ Basin Complex [Member] | Natural gas (per MMBtu) [Member] | |||
Commodity Price Risk Swap [Line Items] | |||
Commodity swap fixed price | $ / MMBTU | 5.96 | ||
Commodity market price | $ / MMBTU | [2] | 2.11 | |
Year 2016 [Member] | Hugoton System [Member] | Condensate [Member] | |||
Commodity Price Risk Swap [Line Items] | |||
Commodity swap fixed price | 78.61 | ||
Commodity market price | [2] | 18.81 | |
Year 2016 [Member] | Hugoton System [Member] | Natural gas (per MMBtu) [Member] | |||
Commodity Price Risk Swap [Line Items] | |||
Commodity swap fixed price | $ / MMBTU | 5.50 | ||
Commodity market price | $ / MMBTU | [2] | 2.12 | |
[1] | Represents the New York Mercantile Exchange (“NYMEX”) forward strip price as of June 25, 2015, adjusted for product specification, location, basis and, in the case of NGLs, transportation and fractionation costs. | ||
[2] | Represents the NYMEX forward strip price as of December 8, 2015, adjusted for product specification, location, basis and, in the case of NGLs, transportation and fractionation costs. |
Transactions with Affiliates 42
Transactions with Affiliates - Equipment Purchases and Sales Table (Details) - USD ($) $ in Thousands | 3 Months Ended | ||||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | [1] | ||
Related Party Transaction [Line Items] | |||||
Payable to affiliate | $ 103,754 | $ 98,661 | |||
Partners’ capital adjustment | 714 | $ 205 | [2] | ||
Affiliates [Member] | Purchases [Member] | |||||
Related Party Transaction [Line Items] | |||||
Cash consideration - purchases | 1,096 | 765 | |||
Payable to affiliate | 990 | 0 | |||
Net carrying value | 1,372 | 560 | |||
Partners’ capital adjustment | $ 714 | $ 205 | |||
[1] | Financial information has been recast to include the financial position and results attributable to the Springfield system. See Note 1 and Note 2. | ||||
[2] | Financial information has been recast to include the financial position and results attributable to the Springfield system. See Note 1 and Note 2. |
Transactions with Affiliates 43
Transactions with Affiliates - Summary of Affiliate Transactions Table (Details) - USD ($) $ in Thousands | Mar. 14, 2016 | Mar. 31, 2016 | Mar. 31, 2015 | ||
Related Party Transaction [Line Items] | |||||
Revenues and other | $ 383,141 | $ 437,006 | [1] | ||
Equity income, net | [2],[3],[4] | 16,814 | 18,220 | [1] | |
Cost of product | [5] | 76,467 | 139,408 | [1] | |
Operation and maintenance | [5] | 76,213 | 76,185 | [1] | |
General and administrative | [5] | 11,277 | 11,081 | [1] | |
Operating expenses | 245,920 | 577,553 | [1] | ||
Interest income | [6] | 4,225 | 4,225 | [1] | |
Interest expense | [7] | 32,036 | 22,960 | [1] | |
Proceeds from the issuance of common units, net of offering expenses | 25,000 | 31,075 | [1] | ||
Distributions to unitholders | [8] | 152,588 | 126,044 | [1] | |
Above-market component of swap extensions with Anadarko | [8] | $ 6,813 | 0 | [1] | |
Units issued | 323,584 | ||||
Springfield Pipeline LLC [Member] | |||||
Related Party Transaction [Line Items] | |||||
Revenues and other | 48,614 | ||||
Equity income, net | 0 | ||||
Springfield Pipeline LLC [Member] | Common Units [Member] | |||||
Related Party Transaction [Line Items] | |||||
Units issued | [9] | 2,089,602 | |||
Affiliates [Member] | |||||
Related Party Transaction [Line Items] | |||||
Revenues and other | [4] | $ 272,584 | 306,928 | [1] | |
Cost of product | [4] | 24,580 | 43,895 | ||
Operation and maintenance | [10] | 17,975 | 16,817 | ||
General and administrative | [11] | 8,952 | 8,135 | ||
Operating expenses | 51,507 | 68,847 | |||
Interest expense | [12] | 4,537 | 1,420 | ||
Proceeds from the issuance of common units, net of offering expenses | [13] | 25,000 | 0 | ||
Distributions to unitholders | [14] | $ 89,769 | $ 71,695 | ||
Western Gas Equity Partners, LP [Member] | Springfield Pipeline LLC [Member] | Common Units [Member] | |||||
Related Party Transaction [Line Items] | |||||
Units issued | 835,841 | ||||
[1] | Financial information has been recast to include the financial position and results attributable to the Springfield system. See Note 1 and Note 2. | ||||
[2] | Income earned from equity investments is classified as affiliate. See Note 1. | ||||
[3] | Income earned on, distributions from and contributions to equity investments are classified as affiliate. See Note 1. | ||||
[4] | Represents amounts earned or incurred on and subsequent to the date of acquisition of the Partnership assets, as well as amounts earned or incurred by Anadarko on a historical basis related to the Partnership assets prior to the acquisition of such assets, recognized under gathering, treating or processing agreements, and purchase and sale agreements. | ||||
[5] | Cost of product includes product purchases from Anadarko (as defined in Note 1) of $24.6 million and $43.9 million for the three months ended March 31, 2016 and 2015, respectively. Operation and maintenance includes charges from Anadarko of $18.0 million and $16.8 million for the three months ended March 31, 2016 and 2015, respectively. General and administrative includes charges from Anadarko of $9.0 million and $8.1 million for the three months ended March 31, 2016 and 2015, respectively. See Note 5. | ||||
[6] | Represents interest income recognized on the note receivable from Anadarko. | ||||
[7] | Includes affiliate (as defined in Note 1) interest expense of $4.5 million and $1.4 million for the three months ended March 31, 2016 and 2015, respectively. See Note 2 and Note 9. | ||||
[8] | See Note 5. | ||||
[9] | The Partnership acquired Springfield Pipeline LLC (“Springfield”) from Anadarko for $750.0 million, consisting of $712.5 million in cash and the issuance of 1,253,761 of the Partnership’s common units. Springfield owns a 50.1% interest in an oil gathering system and a gas gathering system, such interest being referred to in this report as the “Springfield system.” The Springfield oil and gas gathering systems are located in Dimmit, La Salle, Maverick and Webb Counties in South Texas. The Partnership financed the cash portion of the acquisition through: (i) borrowings of $247.5 million on the Partnership’s senior unsecured revolving credit facility (“RCF”), (ii) the issuance of 835,841 of the Partnership’s common units to WGP and (iii) the issuance of the Series A Preferred units noted above to private investors (the “initial issuance”). See Note 4 for further information regarding the Series A Preferred units, including the full exercise of an option granted in connection with the initial issuance. | ||||
[10] | Represents expenses incurred on and subsequent to the date of the acquisition of the Partnership assets, as well as expenses incurred by Anadarko on a historical basis related to the Partnership assets prior to the acquisition of such assets. | ||||
[11] | Represents general and administrative expense incurred on and subsequent to the date of the Partnership’s acquisition of the Partnership assets, as well as a management services fee for reimbursement of expenses incurred by Anadarko for periods prior to the acquisition of the Partnership assets by the Partnership. These amounts include equity-based compensation expense allocated to the Partnership by Anadarko (see WES LTIP and WGP LTIP and Anadarko Incentive Plans within this Note 5). | ||||
[12] | For the three months ended March 31, 2016 and 2015, includes accretion expense recognized on the Deferred purchase price obligation - Anadarko for the acquisition of DBJV (see Note 2 and Note 9). | ||||
[13] | Represents proceeds from the issuance of 835,841 common units to WGP as partial funding for the acquisition of Springfield (see Note 2). | ||||
[14] | Represents distributions paid under the partnership agreement (see Note 3 and Note 4). |
Transactions with Affiliates 44
Transactions with Affiliates - Additional Information (Details) - USD ($) | 1 Months Ended | 3 Months Ended | ||||
May. 31, 2008 | Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |||
Related Party Transaction [Line Items] | ||||||
Note receivable - Anadarko | $ 260,000,000 | $ 260,000,000 | [1] | |||
Above-market component of swap extensions with Anadarko | [2] | 6,813,000 | ||||
Contributions of equity-based compensation from Anadarko | $ 1,065,000 | |||||
Western Gas Partners Long Term Incentive Plan [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Units vesting period | 3 years | |||||
Equity-based compensation expense | $ 100,000 | $ 100,000 | ||||
Western Gas Equity Partners Long Term Incentive Plan [Member] | Anadarko Incentive Plans [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Equity-based compensation expense | 1,200,000 | $ 1,000,000 | ||||
Contributions of equity-based compensation from Anadarko | $ 1,100,000 | |||||
Natural Gas [Member] | Gathering, Treating and Transportation [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Affiliate throughput percent | 37.00% | 56.00% | ||||
Natural Gas [Member] | Processing [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Affiliate throughput percent | 61.00% | 52.00% | ||||
Crude Oil and NGL [Member] | Gathering, Treating and Transportation [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Affiliate throughput percent | 64.00% | 100.00% | ||||
Affiliates [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Note receivable - Anadarko | $ 260,000,000 | |||||
Note receivable, due date | May 14, 2038 | |||||
Fixed annual rate for note receivable bearing interest | 6.50% | |||||
Affiliates [Member] | Level 2 Inputs [Member] | Market Approach Valuation Technique [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Fair value of the note receivable | $ 260,400,000 | $ 252,300,000 | ||||
Independent Director [Member] | Western Gas Partners Long Term Incentive Plan [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Units vesting period | 1 year | |||||
[1] | Financial information has been recast to include the financial position and results attributable to the Springfield system. See Note 1 and Note 2. | |||||
[2] | See Note 5. |
Property, Plant and Equipment -
Property, Plant and Equipment - Historical Cost Table (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2016 | Dec. 31, 2015 | ||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment | $ 6,700,809 | $ 6,556,778 | [1] |
Accumulated depreciation | 1,760,590 | 1,697,999 | [1] |
Net property, plant and equipment | 4,940,219 | 4,858,779 | [1] |
Land [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment | 3,946 | 3,744 | |
Gathering Systems [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment | $ 6,160,896 | 6,061,004 | |
Gathering Systems [Member] | Minimum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful life | 3 years | ||
Gathering Systems [Member] | Maximum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful life | 47 years | ||
Pipelines and Equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment | $ 136,263 | 136,290 | |
Pipelines and Equipment [Member] | Minimum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful life | 15 years | ||
Pipelines and Equipment [Member] | Maximum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful life | 45 years | ||
Assets Under Construction [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment | $ 371,358 | 329,887 | |
Other [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment | $ 28,346 | $ 25,853 | |
Other [Member] | Minimum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful life | 3 years | ||
Other [Member] | Maximum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful life | 40 years | ||
[1] | Financial information has been recast to include the financial position and results attributable to the Springfield system. See Note 1 and Note 2. |
Property, Plant and Equipment46
Property, Plant and Equipment - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | [1] | |
Property, Plant and Equipment [Line Items] | |||
Impairments | $ 6,518 | $ 272,624 | |
Newcastle System [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Impairments | 6,200 | ||
Newcastle System [Member] | Fair Value Measurements Nonrecurring [Member] | Level 3 Inputs [Member] | Income Approach Valuation Technique [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Estimated fair value | $ 3,100 | ||
[1] | Financial information has been recast to include the financial position and results attributable to the Springfield system. See Note 1 and Note 2. |
Equity Investments - Equity Inv
Equity Investments - Equity Investments Table (Details) - USD ($) $ in Thousands | 3 Months Ended | ||||
Mar. 31, 2016 | Mar. 31, 2015 | [5] | |||
Schedule of Equity Method Investments [Line Items] | |||||
Balance | [1] | $ 618,887 | |||
Investment earnings (loss), net of amortization | [2],[3],[4] | 16,814 | $ 18,220 | ||
Contributions | (474) | 4,878 | |||
Distributions | [3] | (19,855) | (18,706) | ||
Distributions in excess of cumulative earnings | [3] | (4,784) | [6] | $ (2,964) | |
Balance | 610,588 | ||||
Fort Union [Member] | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Balance | 17,122 | ||||
Investment earnings (loss), net of amortization | (2,192) | ||||
Contributions | 0 | ||||
Distributions | 0 | ||||
Distributions in excess of cumulative earnings | [6] | (783) | |||
Balance | 14,147 | ||||
White Cliffs [Member] | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Balance | 50,439 | ||||
Investment earnings (loss), net of amortization | 3,993 | ||||
Contributions | 106 | ||||
Distributions | (3,848) | ||||
Distributions in excess of cumulative earnings | [6] | (877) | |||
Balance | 49,813 | ||||
Rendezvous [Member] | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Balance | 50,913 | ||||
Investment earnings (loss), net of amortization | 550 | ||||
Contributions | 0 | ||||
Distributions | (1,036) | ||||
Distributions in excess of cumulative earnings | [6] | (1,541) | |||
Balance | 48,886 | ||||
Mont Belvieu JV [Member] | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Balance | 117,089 | ||||
Investment earnings (loss), net of amortization | 5,419 | ||||
Contributions | 0 | ||||
Distributions | (5,428) | ||||
Distributions in excess of cumulative earnings | [6] | (172) | |||
Balance | 116,908 | ||||
Texas Express Gathering LLC [Member] | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Balance | 16,283 | ||||
Investment earnings (loss), net of amortization | 257 | ||||
Contributions | 0 | ||||
Distributions | (262) | ||||
Distributions in excess of cumulative earnings | [6] | (21) | |||
Balance | 16,257 | ||||
Texas Express Pipeline LLC [Member] | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Balance | 194,803 | ||||
Investment earnings (loss), net of amortization | 4,097 | ||||
Contributions | (580) | ||||
Distributions | (4,160) | ||||
Distributions in excess of cumulative earnings | [6] | (1,390) | |||
Balance | 192,770 | ||||
Front Range Pipeline LLC [Member] | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Balance | 172,238 | ||||
Investment earnings (loss), net of amortization | 4,690 | ||||
Contributions | 0 | ||||
Distributions | (5,121) | ||||
Distributions in excess of cumulative earnings | [6] | 0 | |||
Balance | $ 171,807 | ||||
[1] | Financial information has been recast to include the financial position and results attributable to the Springfield system. See Note 1 and Note 2. | ||||
[2] | Income earned from equity investments is classified as affiliate. See Note 1. | ||||
[3] | Income earned on, distributions from and contributions to equity investments are classified as affiliate. See Note 1. | ||||
[4] | Represents amounts earned or incurred on and subsequent to the date of acquisition of the Partnership assets, as well as amounts earned or incurred by Anadarko on a historical basis related to the Partnership assets prior to the acquisition of such assets, recognized under gathering, treating or processing agreements, and purchase and sale agreements. | ||||
[5] | Financial information has been recast to include the financial position and results attributable to the Springfield system. See Note 1 and Note 2. | ||||
[6] | 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. |
Equity Investments - Additional
Equity Investments - Additional Information (Details) - Fort Union [Member] $ in Millions | 3 Months Ended | |
Mar. 31, 2016USD ($) | ||
Schedule of Equity Method Investments [Line Items] | ||
Equity investment impairment loss | $ 3 | |
Equity Investments [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Percentage ownership interest | 14.81% | [1] |
[1] | Investments in non-controlled entities over which the Partnership exercises significant influence are accounted for under the equity method. “Equity investment throughput” refers to the Partnership’s share of average throughput for these investments. |
Components of Working Capital
Components of Working Capital - Accounts Receivable, Net Table (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 | ||
Receivables [Abstract] | ||||
Trade receivables, net | $ 130,731 | $ 143,557 | ||
Other receivables, net | 49,042 | 49,772 | ||
Total accounts receivable, net | [1] | $ 179,773 | $ 193,329 | [2] |
[1] | Accounts receivable, net includes amounts receivable from affiliates (as defined in Note 1) of $53.8 million and $42.7 million as of March 31, 2016, and December 31, 2015, respectively. Accounts receivable, net as of March 31, 2016, and December 31, 2015, also includes an insurance claim receivable related to an incident at the DBM complex. See Note 1. | |||
[2] | Financial information has been recast to include the financial position and results attributable to the Springfield system. See Note 1 and Note 2. |
Components of Working Capital -
Components of Working Capital - Other Current Assets Table (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 | |
Other Current Assets [Line Items] | |||
Natural gas liquids inventory | $ 832 | $ 2,403 | |
Imbalance receivables | 1,425 | 2,122 | |
Prepaid insurance | 1,298 | 2,296 | |
Other | 0 | 1,034 | |
Total other current assets | $ 3,555 | $ 7,855 | [1] |
[1] | Financial information has been recast to include the financial position and results attributable to the Springfield system. See Note 1 and Note 2. |
Components of Working Capital51
Components of Working Capital - Accrued Liabilities Table (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 | |
Accrued Liabilities [Line Items] | |||
Accrued interest expense | $ 34,540 | $ 26,194 | |
Short-term asset retirement obligations | 2,909 | 3,677 | |
Short-term remediation and reclamation obligations | 1,136 | 1,136 | |
Income taxes payable | 931 | 770 | |
Total accrued liabilities | 127,837 | 119,019 | [1] |
Accrued Capital Expenditures [Member] | |||
Accrued Liabilities [Line Items] | |||
Other accrued liabilities | 68,152 | 61,454 | |
Accrued Plant Purchases [Member] | |||
Accrued Liabilities [Line Items] | |||
Other accrued liabilities | 15,885 | 16,425 | |
Other Accrued Liabilities [Member] | |||
Accrued Liabilities [Line Items] | |||
Other accrued liabilities | $ 4,284 | $ 9,363 | |
[1] | Financial information has been recast to include the financial position and results attributable to the Springfield system. See Note 1 and Note 2. |
Debt and Interest Expense - Deb
Debt and Interest Expense - Debt Outstanding Table (Details) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 | ||
Debt Instrument [Line Items] | ||||
Total long-term debt principal | $ 3,050,000,000 | $ 2,720,000,000 | ||
Carrying value | 3,021,325,000 | 2,690,651,000 | [1] | |
Market Approach Valuation Technique [Member] | Level 2 Inputs [Member] | ||||
Debt Instrument [Line Items] | ||||
Fair value | [2] | 2,780,729,000 | 2,492,466,000 | |
Revolving Credit Facility [Member] | ||||
Debt Instrument [Line Items] | ||||
Principal | 630,000,000 | 300,000,000 | ||
Carrying value | 630,000,000 | 300,000,000 | ||
Revolving Credit Facility [Member] | Market Approach Valuation Technique [Member] | Level 2 Inputs [Member] | ||||
Debt Instrument [Line Items] | ||||
Fair value | [2] | 630,000,000 | 300,000,000 | |
Senior Notes [Member] | 5.375% Senior Notes due 2021 [Member] | ||||
Debt Instrument [Line Items] | ||||
Principal | 500,000,000 | 500,000,000 | ||
Carrying value | 493,962,000 | 493,711,000 | ||
Senior Notes [Member] | 5.375% Senior Notes due 2021 [Member] | Market Approach Valuation Technique [Member] | Level 2 Inputs [Member] | ||||
Debt Instrument [Line Items] | ||||
Fair value | [2] | 480,315,000 | 513,645,000 | |
Senior Notes [Member] | 4.000% Senior Notes due 2022 [Member] | ||||
Debt Instrument [Line Items] | ||||
Principal | 670,000,000 | 670,000,000 | ||
Carrying value | 668,482,000 | 668,432,000 | ||
Senior Notes [Member] | 4.000% Senior Notes due 2022 [Member] | Market Approach Valuation Technique [Member] | Level 2 Inputs [Member] | ||||
Debt Instrument [Line Items] | ||||
Fair value | [2] | 597,975,000 | 595,744,000 | |
Senior Notes [Member] | 2.600% Senior Notes due 2018 [Member] | ||||
Debt Instrument [Line Items] | ||||
Principal | 350,000,000 | 350,000,000 | ||
Carrying value | 348,826,000 | 348,706,000 | ||
Senior Notes [Member] | 2.600% Senior Notes due 2018 [Member] | Market Approach Valuation Technique [Member] | Level 2 Inputs [Member] | ||||
Debt Instrument [Line Items] | ||||
Fair value | [2] | 331,187,000 | 339,293,000 | |
Senior Notes [Member] | 5.450% Senior Notes due 2044 [Member] | ||||
Debt Instrument [Line Items] | ||||
Principal | 400,000,000 | 400,000,000 | ||
Carrying value | 389,744,000 | 389,707,000 | ||
Senior Notes [Member] | 5.450% Senior Notes due 2044 [Member] | Market Approach Valuation Technique [Member] | Level 2 Inputs [Member] | ||||
Debt Instrument [Line Items] | ||||
Fair value | [2] | 313,752,000 | 321,499,000 | |
Senior Notes [Member] | 3.950% Senior Notes due 2025 [Member] | ||||
Debt Instrument [Line Items] | ||||
Principal | 500,000,000 | 500,000,000 | ||
Carrying value | 490,311,000 | 490,095,000 | ||
Senior Notes [Member] | 3.950% Senior Notes due 2025 [Member] | Market Approach Valuation Technique [Member] | Level 2 Inputs [Member] | ||||
Debt Instrument [Line Items] | ||||
Fair value | [2] | $ 427,500,000 | $ 422,285,000 | |
[1] | Financial information has been recast to include the financial position and results attributable to the Springfield system. See Note 1 and Note 2. | |||
[2] | Fair value is measured using the market approach and Level 2 inputs. |
Debt and Interest Expense - D53
Debt and Interest Expense - Debt Activity Table (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016USD ($) | ||
Debt Instrument [Line Items] | ||
Beginning balance | $ 2,690,651 | [1] |
Other | 674 | |
Ending balance | 3,021,325 | |
Revolving Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Beginning balance | 300,000 | |
Borrowings | 330,000 | |
Ending balance | $ 630,000 | |
[1] | Financial information has been recast to include the financial position and results attributable to the Springfield system. See Note 1 and Note 2. |
Debt and Interest Expense - Int
Debt and Interest Expense - Interest Expense Table (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2016 | Mar. 31, 2015 | |||
Debt Instrument [Line Items] | ||||
Interest expense | [1] | $ 32,036 | $ 22,960 | [2] |
Third Parties [Member] | ||||
Debt Instrument [Line Items] | ||||
Long-term debt | 27,818 | 23,342 | ||
Amortization of debt issuance costs and commitment fees | 1,530 | 1,292 | ||
Capitalized interest | (1,849) | (3,094) | ||
Interest expense | 27,499 | 21,540 | ||
Affiliates [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest expense | [3] | 4,537 | 1,420 | |
Affiliates [Member] | Deferred Purchase Price Obligation - Anadarko [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest expense, related party | [4] | $ 4,537 | $ 1,420 | |
[1] | Includes affiliate (as defined in Note 1) interest expense of $4.5 million and $1.4 million for the three months ended March 31, 2016 and 2015, respectively. See Note 2 and Note 9. | |||
[2] | Financial information has been recast to include the financial position and results attributable to the Springfield system. See Note 1 and Note 2. | |||
[3] | For the three months ended March 31, 2016 and 2015, includes accretion expense recognized on the Deferred purchase price obligation - Anadarko for the acquisition of DBJV (see Note 2 and Note 9). | |||
[4] | See Note 2 for a discussion of the accretion and net present value of the Deferred purchase price obligation - Anadarko. |
Debt and Interest Expense - Add
Debt and Interest Expense - Additional Information (Details) - USD ($) | Mar. 14, 2016 | Apr. 30, 2016 | Mar. 31, 2016 | Mar. 31, 2015 | |
Series A Preferred Units [Member] | |||||
Debt Instrument [Line Items] | |||||
Proceeds from the issuance of units | $ 440,000,000 | $ 440,000,000 | $ 0 | [1] | |
Series A Preferred Units [Member] | Subsequent Event [Member] | |||||
Debt Instrument [Line Items] | |||||
Proceeds from the issuance of units | $ 247,500,000 | ||||
Revolving Credit Facility [Member] | |||||
Debt Instrument [Line Items] | |||||
Facility, interest rate at period end | 1.74% | 1.48% | |||
Facility, fee rate | 0.20% | 0.20% | |||
Facility, outstanding borrowings | $ 630,000,000 | ||||
Outstanding letters of credit | 4,900,000 | ||||
Facility, available borrowing capacity | $ 565,100,000 | ||||
Facility, expiration date | Feb. 26, 2019 | ||||
Revolving Credit Facility [Member] | Subsequent Event [Member] | |||||
Debt Instrument [Line Items] | |||||
Repayment | $ 250,000,000 | ||||
Senior Notes [Member] | 5.375% Senior Notes due 2021 [Member] | |||||
Debt Instrument [Line Items] | |||||
Fixed interest rate | 5.375% | ||||
Debt instrument, maturity date | Jun. 1, 2021 | ||||
Senior Notes [Member] | 4.000% Senior Notes due 2022 [Member] | |||||
Debt Instrument [Line Items] | |||||
Fixed interest rate | 4.00% | ||||
Debt instrument, maturity date | Jul. 1, 2022 | ||||
Senior Notes [Member] | 2.600% Senior Notes due 2018 [Member] | |||||
Debt Instrument [Line Items] | |||||
Fixed interest rate | 2.60% | ||||
Debt instrument, maturity date | Aug. 15, 2018 | ||||
Senior Notes [Member] | 5.450% Senior Notes due 2044 [Member] | |||||
Debt Instrument [Line Items] | |||||
Fixed interest rate | 5.45% | ||||
Debt instrument, maturity date | Apr. 1, 2044 | ||||
Senior Notes [Member] | 3.950% Senior Notes due 2025 [Member] | |||||
Debt Instrument [Line Items] | |||||
Fixed interest rate | 3.95% | ||||
Debt instrument, maturity date | Jun. 1, 2025 | ||||
[1] | Financial information has been recast to include the financial position and results attributable to the Springfield system. See Note 1 and Note 2. |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Committed capital | $ 90 | |
Rent expense associated with office, warehouse and equipment leases | $ 8.9 | $ 8 |