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Western Gas Partners LP$46.19($1.15)(2.43%)

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 Western Gas Announces Fourth-Quarter And Full-Year 2017 Results
   Thursday, February 15, 2018 4:15:00 PM ET

Western Gas Partners, LP (WES ) ("WES" or the "Partnership") and Western Gas Equity Partners, LP (WGP ) ("WGP") today announced fourth-quarter and full-year 2017 financial and operating results.

WESTERN GAS PARTNERS, LP

Net income (loss) available to limited partners for 2017 totaled $221.3 million, or $1.30 per common unit (diluted), with full-year 2017 Adjusted EBITDA(1) of $1.1 billion and full-year 2017 Distributable cash flow(1) of $929.0 million. Net income (loss) available to limited partners for the fourth quarter of 2017 totaled $67.7 million, or $0.39 per common unit (diluted), with fourth-quarter 2017 Adjusted EBITDA(1) of $273.3 million and fourth-quarter 2017 Distributable cash flow(1) of $233.4 million.

WES paid a quarterly distribution of $0.920 per unit for the fourth quarter of 2017. This distribution represented a 2% increase over the prior quarter’s distribution and a 7% increase over the fourth-quarter 2016 distribution of $0.860 per unit. The full-year 2017 distribution of $3.590 per unit represented a 7% increase over the full-year 2016 distribution of $3.350 per unit. The fourth-quarter 2017 Coverage ratio(1) of 1.08 times was based on the quarterly distribution of $0.920 per unit. The Partnership’s Coverage ratio(1) for full-year 2017 was 1.13 times.

(1) Please see the tables at the end of this release for a reconciliation of GAAP to non-GAAP measures and calculation of the Coverage ratio.

"Our impressive quarterly results were driven by strong volumetric growth in both the Delaware and DJ Basins where producer activity remains robust. In the Delaware Basin, we are pleased to report that Ramsey VI came online at the end of the quarter, just as the rest of the Ramsey facility was nearing capacity," said Chief Executive Officer, Benjamin Fink. "We still plan to execute our over $1 billion 2018 capital program without the need for additional equity, as we expect strong volumetric growth in the second half of the year once critical infrastructure is placed into service."

Total throughput attributable to WES for natural gas assets for the fourth quarter of 2017 averaged 3.5 Bcf/d, which was 1% above the prior quarter. Total throughput attributable to WES for natural gas assets for the fourth quarter of 2017 was approximately 3% above the prior quarter when adjusted for the non-cash impact of a one-time prior period volumetric adjustment. Additionally, total throughput attributable to WES for natural gas assets for the fourth quarter of 2017 was 14% below the fourth quarter of 2016 primarily due to the impact of the DBJV-for-Marcellus asset exchange that closed in March 2017. Total throughput for crude, NGL and produced water assets for the fourth quarter of 2017 averaged 240 MBbls/d, which was 15% above the prior quarter and 33% above the fourth quarter of 2016.

For full-year 2017, total throughput attributable to WES for natural gas assets averaged 3.6 Bcf/d, which was 9% below the prior-year average. For full-year 2017, total throughput for crude, NGL and produced water assets averaged 201 MBbls/d, which was 9% above the prior-year average.

Capital expenditures attributable to WES, including equity investments but excluding acquisitions, totaled $253.0 million on a cash basis and $291.6 million on an accrual basis during the fourth quarter of 2017, with maintenance capital expenditures on a cash basis of $16.6 million. For full-year 2017, capital expenditures attributable to WES, including equity investments but excluding acquisitions, totaled $666.9 million on a cash basis and $792.0 million on an accrual basis, with maintenance capital expenditures on a cash basis of $49.7 million.

On February 15, 2018, WES amended its senior unsecured revolving credit facility to extend the maturity date from February 2020 to February 2023 and expand the borrowing capacity from $1.2 billion to $1.5 billion.

WESTERN GAS EQUITY PARTNERS, LP

WGP indirectly owns the entire general partner interest in WES, 100% of the incentive distribution rights in WES and 50,132,046 WES common units. Net income (loss) available to limited partners for 2017 totaled $376.6 million, or $1.72 per common unit (diluted). Net income (loss) available to limited partners for the fourth quarter of 2017 totaled $99.5 million, or $0.45 per common unit (diluted).

WGP previously declared a quarterly distribution of $0.54875 per unit for the fourth quarter of 2017. This distribution represented a 2% increase over the prior quarter’s distribution and a 19% increase over the fourth-quarter 2016 distribution of $0.46250 per unit. The full-year 2017 distribution of $2.10500 per unit represented a 19% increase over the full-year 2016 distribution of $1.76750 per unit. WGP received distributions from WES of $122.3 million attributable to the fourth quarter and will pay $120.1 million in distributions for the same period.

On February 15, 2018, WGP amended its senior secured revolving credit facility by reducing total commitments from $250.0 million to $35.0 million.

CONFERENCE CALL TOMORROW AT 8 A.M. CST

WES and WGP will host a joint conference call on Friday, February 16, 2018, at 8:00 a.m. Central Standard Time (9:00 a.m. Eastern Standard Time) to discuss fourth-quarter and full-year 2017 results. Individuals who would like to participate should dial 877-883-0383 (Domestic) or 412-902-6506 (International) approximately 15 minutes before the scheduled conference call time, and enter participant access code 5796412. To access the live audio webcast of the conference call, please visit the investor relations section of the Partnership’s website at www.westerngas.com. A replay of the conference call will also be available on the website for two weeks following the call.

Western Gas Partners, LP ("WES") is a growth-oriented Delaware master limited partnership formed by Anadarko Petroleum Corporation to acquire, own, develop and operate midstream assets. With midstream assets located in the Rocky Mountains, North-central Pennsylvania, Texas and New Mexico, WES is engaged in the business of gathering, compressing, treating, processing and transporting natural gas; gathering, stabilizing and transporting condensate, natural gas liquids and crude oil; and gathering and disposing of produced water for Anadarko, as well as for third-party producers and customers. In addition, in its capacity as a processor of natural gas, WES also buys and sells natural gas, NGLs or condensate under certain of its contracts.

Western Gas Equity Partners, LP ("WGP") is a Delaware master limited partnership formed by Anadarko Petroleum Corporation to own the following types of interests in WES: (i) the general partner interest and all of the incentive distribution rights in WES, both owned through WGP’s 100% ownership of WES’s general partner, and (ii) a significant limited partner interest in WES.

For more information about Western Gas Partners, LP and Western Gas Equity Partners, LP, please visit www.westerngas.com.

This news release contains forward-looking statements. WES and WGP’s management believes that their expectations are based on reasonable assumptions. No assurance, however, can be given that such expectations will prove to have been correct. A number of factors could cause actual results to differ materially from the projections, anticipated results or other expectations expressed in this news release. These factors include the ability to meet financial guidance or distribution growth expectations; the ability to safely and efficiently operate WES’s assets; the supply of, demand for, and price of oil, natural gas, NGLs and related products or services; the ability to meet projected in-service dates for capital growth projects; construction costs or capital expenditures exceeding estimated or budgeted costs or expenditures; and the other factors described in the "Risk Factors" sections of WES’s and WGP’s most recent Forms 10-K and Forms 10-Q filed with the Securities and Exchange Commission and in their other public filings and press releases. Western Gas Partners and Western Gas Equity Partners undertake no obligation to publicly update or revise any forward-looking statements.

WESTERN GAS CONTACT Jonathon E. VandenBrand Director, Investor Relations jon.vandenbrand@anadarko.com 832.636.6000

Western Gas Partners, LP Reconciliation of GAAP to Non-GAAP Measures

Below are reconciliations of (i) net income (loss) attributable to Western Gas Partners, LP (GAAP) to WES’s Distributable cash flow (non-GAAP), (ii) net income (loss) attributable to Western Gas Partners, LP (GAAP) and net cash provided by operating activities (GAAP) to Adjusted EBITDA attributable to Western Gas Partners, LP ("Adjusted EBITDA") (non-GAAP), and (iii) operating income (loss) (GAAP) to Adjusted gross margin attributable to Western Gas Partners, LP ("Adjusted gross margin") (non-GAAP), as required under Regulation G of the Securities Exchange Act of 1934. Management believes that WES’s Distributable cash flow, Adjusted EBITDA, Adjusted gross margin, and Coverage ratio are widely accepted financial indicators of WES’s financial performance compared to other publicly traded partnerships and are useful in assessing its ability to incur and service debt, fund capital expenditures and make distributions. Distributable cash flow, Adjusted EBITDA, Adjusted gross margin and Coverage ratio, as defined by WES, may not be comparable to similarly titled measures used by other companies. Therefore, WES’s Distributable cash flow, Adjusted EBITDA, Adjusted gross margin and Coverage ratio should be considered in conjunction with net income (loss) attributable to Western Gas Partners, LP and other applicable performance measures, such as operating income (loss) or cash flows from operating activities.

Western Gas Partners, LP Reconciliation of GAAP to Non-GAAP Measures, continued

Distributable Cash Flow

WES defines Distributable cash flow as Adjusted EBITDA, plus interest income and the net settlement amounts from the sale and/or purchase of natural gas, condensate and NGLs under WES’s commodity price swap agreements to the extent such amounts are not recognized as Adjusted EBITDA, less net cash paid (or to be paid) for interest expense (including amortization of deferred debt issuance costs originally paid in cash, offset by non-cash capitalized interest), maintenance capital expenditures, Series A Preferred unit distributions and income taxes.

                                                                                                                                               Three Months Ended            Year Ended
                                                                                                                                               December 31,                  December 31,
thousands except Coverage ratio                                                                                                                2017            2016          2017           2016
Reconciliation of Net income (loss) attributable to Western Gas Partners, LP to Distributable cash flow and calculation of the Coverage ratio
Net income (loss) attributable to Western Gas Partners, LP                                                                                     $   148,637     $   143,004   $   567,483    $    591,331
Add:
Distributions from equity investments                                                                                                          29,897          27,160        110,465        103,423
Non-cash equity-based compensation expense                                                                                                     1,468           1,573         4,947          5,591
Non-cash settled interest expense, net (1)                                                                                                     --              4,350         71             (7,747)
Income tax (benefit) expense                                                                                                                   (39)            941           4,866          8,372
Depreciation and amortization (2)                                                                                                              73,874          72,633        288,087        270,311
Impairments                                                                                                                                    8,295           4,222         178,374        15,535
Above-market component of swap agreements with Anadarko                                                                                        11,832          11,038        58,551         45,820
Other expense (2)                                                                                                                              5               128           145            224
Less:
Gain (loss) on divestiture and other, net                                                                                                      (2,629)         (5,872)       132,388        (14,641)
Equity income, net - affiliates                                                                                                                22,486          21,916        85,194         78,717
Cash paid for maintenance capital expenditures (2)                                                                                             16,569          8,342         49,684         63,630
Capitalized interest                                                                                                                           2,835           888           6,826          5,562
Cash paid for (reimbursement of) income taxes                                                                                                  1,005           771           1,194          838
Series A Preferred unit distributions                                                                                                          --              14,908        7,453          45,784
Other income (2)                                                                                                                               323             252           1,283          524
Distributable cash flow                                                                                                                        $   233,380     $   223,844   $   928,967    $    852,446
Distributions declared (3)
Limited partners - common units                                                                                                                $   140,394                   $   538,244
General partner                                                                                                                                76,192                        286,624
Total                                                                                                                                          $   216,586                   $   824,868
Coverage ratio                                                                                                                                 1.08         x                1.13         x
(1) Includes amounts related to the Deferred purchase price obligation - Anadarko.
(2) Includes WES’s 75% share of depreciation and amortization; other expense; cash paid for maintenance capital expenditures; and other income attributable to Chipeta.
(3) Reflects cash distributions of $0.920 and $3.590 per unit declared for the three months and year ended December 31, 2017, respectively.

Western Gas Partners, LP Reconciliation of GAAP to Non-GAAP Measures, continued

Adjusted EBITDA Attributable to Western Gas Partners, LP

WES defines Adjusted EBITDA as net income (loss) attributable to Western Gas Partners, LP, plus distributions from equity investments, non-cash equity-based compensation expense, interest expense, income tax expense, depreciation and amortization, impairments, and other expense (including lower of cost or market inventory adjustments recorded in cost of product), less gain (loss) on divestiture and other, net, income from equity investments, interest income, income tax benefit, and other income.

                                                                                                                                          Three Months Ended            Year Ended
                                                                                                                                          December 31,                  December 31,
thousands                                                                                                                                 2017           2016           2017             2016
Reconciliation of Net income (loss) attributable to Western Gas Partners, LP to Adjusted EBITDA attributable to Western Gas Partners, LP
Net income (loss) attributable to Western Gas Partners, LP                                                                                $    148,637   $    143,004   $    567,483     $     591,331
Add:
Distributions from equity investments                                                                                                     29,897         27,160         110,465          103,423
Non-cash equity-based compensation expense                                                                                                1,468          1,573          4,947            5,591
Interest expense                                                                                                                          35,592         39,234         142,386          114,921
Income tax expense                                                                                                                        --             941            4,905            8,372
Depreciation and amortization (1)                                                                                                         73,874         72,633         288,087          270,311
Impairments                                                                                                                               8,295          4,222          178,374          15,535
Other expense (1)                                                                                                                         5              128            145              224
Less:
Gain (loss) on divestiture and other, net                                                                                                 (2,629)        (5,872)        132,388          (14,641)
Equity income, net - affiliates                                                                                                           22,486         21,916         85,194           78,717
Interest income - affiliates                                                                                                              4,225          4,225          16,900           16,900
Other income (1)                                                                                                                          323            252            1,283            524
Income tax benefit                                                                                                                        39             --             39               --
Adjusted EBITDA attributable to Western Gas Partners, LP                                                                                  $    273,324   $    268,374   $    1,060,988   $     1,028,208
Reconciliation of Net cash provided by operating activities to Adjusted EBITDA attributable to Western Gas Partners, LP
Net cash provided by operating activities                                                                                                 $    256,396   $    259,847   $    901,495     $     917,585
Interest (income) expense, net                                                                                                            31,367         35,009         125,486          98,021
Uncontributed cash-based compensation awards                                                                                              119            408            25               856
Accretion and amortization of long-term obligations, net                                                                                  (1,060)        (5,387)        (4,254)          3,789
Current income tax (benefit) expense                                                                                                      1,385          707            2,408            5,817
Other (income) expense, net                                                                                                               (330)          (255)          (1,299)          (479)
Distributions from equity investments in excess of cumulative earnings - affiliates                                                       6,830          4,646          23,085           21,238
Changes in operating working capital:
Accounts receivable, net                                                                                                                  (30,845)       7,839          16,127           48,947
Accounts and imbalance payables and accrued liabilities, net                                                                              10,937         (34,256)       6,930            (58,359)
Other                                                                                                                                     1,426          2,922          4,491            4,367
Adjusted EBITDA attributable to noncontrolling interest                                                                                   (2,901)        (3,106)        (13,506)         (13,574)
Adjusted EBITDA attributable to Western Gas Partners, LP                                                                                  $    273,324   $    268,374   $    1,060,988   $     1,028,208
Cash flow information of Western Gas Partners, LP
Net cash provided by operating activities                                                                                                                               $    901,495     $     917,585
Net cash used in investing activities                                                                                                                                   (763,604)        (1,105,534)
Net cash provided by (used in) financing activities                                                                                                                     (417,002)        447,841
(1) Includes WES’s 75% share of depreciation and amortization; other expense; and other income attributable to Chipeta.

Western Gas Partners, LP Reconciliation of GAAP to Non-GAAP Measures, continued

Adjusted Gross Margin Attributable to Western Gas Partners, LP

WES defines Adjusted gross margin as total revenues and other, less cost of product and reimbursements for electricity-related expenses recorded as revenue, plus distributions from equity investments and excluding the noncontrolling interest owner’s proportionate share of revenue and cost of product.

                                                                                                             Three Months Ended          Year Ended
                                                                                                             December 31,                December 31,
thousands                                                                                                    2017          2016          2017            2016
Reconciliation of Operating income (loss) to Adjusted gross margin attributable to Western Gas Partners, LP
Operating income (loss)                                                                                      $   181,815   $   181,155   $   707,271     $    708,208
Add:
Distributions from equity investments                                                                        29,897        27,160        110,465         103,423
Operation and maintenance                                                                                    86,550        81,869        315,994         308,010
General and administrative                                                                                   12,394        12,049        47,796          45,591
Property and other taxes                                                                                     11,385        7,047         46,818          40,145
Depreciation and amortization                                                                                74,602        73,287        290,874         272,933
Impairments                                                                                                  8,295         4,222         178,374         15,535
Less:
Gain (loss) on divestiture and other, net                                                                    (2,629)       (5,872)       132,388         (14,641)
Proceeds from business interruption insurance claims                                                         --            --            29,882          16,270
Equity income, net - affiliates                                                                              22,486        21,916        85,194          78,717
Reimbursed electricity-related charges recorded as revenues                                                  14,485        14,026        56,823          59,733
Adjusted gross margin attributable to noncontrolling interest                                                3,638         3,735         16,827          16,323
Adjusted gross margin attributable to Western Gas Partners, LP                                               $   366,958   $   352,984   $   1,376,478   $    1,337,443
Adjusted gross margin attributable to Western Gas Partners, LP for natural gas assets                        $   318,012   $   317,294   $   1,222,632   $    1,194,877
Adjusted gross margin for crude, NGL and produced water assets                                               48,946        35,690        153,846         142,566
Western Gas Partners, LP
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
                                                                    Three Months Ended            Year Ended
                                                                    December 31,                  December 31,
thousands except per-unit amounts                                   2017           2016           2017             2016
Revenues and other
Gathering, processing, transportation and disposal                  $    324,513   $    317,517   $    1,237,949   $    1,227,849
Natural gas and natural gas liquids sales                           299,443        192,728        989,933          572,313
Other                                                               8,062          575            20,474           4,108
Total revenues and other                                            632,018        510,820        2,248,356        1,804,270
Equity income, net - affiliates                                     22,486         21,916         85,194           78,717
Operating expenses
Cost of product                                                     276,834        167,235        908,693          494,194
Operation and maintenance                                           86,550         81,869         315,994          308,010
General and administrative                                          12,394         12,049         47,796           45,591
Property and other taxes                                            11,385         7,047          46,818           40,145
Depreciation and amortization                                       74,602         73,287         290,874          272,933
Impairments                                                         8,295          4,222          178,374          15,535
Total operating expenses                                            470,060        345,709        1,788,549        1,176,408
Gain (loss) on divestiture and other, net                           (2,629)        (5,872)        132,388          (14,641)
Proceeds from business interruption insurance claims                --             --             29,882           16,270
Operating income (loss)                                             181,815        181,155        707,271          708,208
Interest income - affiliates                                        4,225          4,225          16,900           16,900
Interest expense                                                    (35,592)       (39,234)       (142,386)        (114,921)
Other income (expense), net                                         330            255            1,299            479
Income (loss) before income taxes                                   150,778        146,401        583,084          610,666
Income tax (benefit) expense                                        (39)           941            4,866            8,372
Net income (loss)                                                   150,817        145,460        578,218          602,294
Net income attributable to noncontrolling interest                  2,180          2,456          10,735           10,963
Net income (loss) attributable to Western Gas Partners, LP          $    148,637   $    143,004   $    567,483     $    591,331
Limited partners’ interest in net income (loss):
Net income (loss) attributable to Western Gas Partners, LP          $    148,637   $    143,004   $    567,483     $    591,331
Pre-acquisition net (income) loss allocated to Anadarko             --             --             --               (11,326)
Series A Preferred units interest in net (income) loss              --             (25,904)       (42,373)         (76,893)
General partner interest in net (income) loss                       (80,932)       (62,229)       (303,835)        (236,561)
Common and Class C limited partners’ interest in net income (loss)  $    67,705    $    54,871    $    221,275     $    266,551
Net income (loss) per common unit - basic and diluted               $    0.39      $    0.35      $    1.30        $    1.74
Weighted-average common units outstanding - basic and diluted       152,602        130,672        147,194          130,253
Western Gas Partners, LP
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
                                                                                                                         December 31,
thousands except number of units                                                                                         2017             2016
Current assets                                                                                                           $    254,062     $    594,014
Note receivable - Anadarko                                                                                               260,000          260,000
Net property, plant and equipment                                                                                        5,730,891        5,049,932
Other assets                                                                                                             1,769,397        1,829,082
Total assets                                                                                                             $    8,014,350   $    7,733,028
Current liabilities                                                                                                      $    424,333     $    315,305
Long-term debt                                                                                                           3,464,712        3,091,461
Asset retirement obligations and other                                                                                   154,294          149,043
Deferred purchase price obligation - Anadarko                                                                            --               41,440
Total liabilities                                                                                                        $    4,043,339   $    3,597,249
Equity and partners’ capital
Series A Preferred units (zero and 21,922,831 units issued and outstanding at December 31, 2017 and 2016, respectively)  $    --          $    639,545
Common units (152,602,105 and 130,671,970 units issued and outstanding at December 31, 2017 and 2016, respectively)      2,950,010        2,536,872
Class C units (13,243,883 and 12,358,123 units issued and outstanding at December 31, 2017 and 2016, respectively)       780,040          750,831
General partner units (2,583,068 units issued and outstanding at December 31, 2017 and 2016)                             179,232          143,968
Noncontrolling interest                                                                                                  61,729           64,563
Total liabilities, equity and partners’ capital                                                                          $    8,014,350   $    7,733,028
Western Gas Partners, LP
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
                                                                                                                         Year Ended
                                                                                                                         December 31,
thousands                                                                                                                2017              2016
Cash flows from operating activities
Net income (loss)                                                                                                        $     578,218     $     602,294
Adjustments to reconcile net income (loss) to net cash provided by operating activities and changes in working capital:
Depreciation and amortization                                                                                            290,874           272,933
Impairments                                                                                                              178,374           15,535
(Gain) loss on divestiture and other, net                                                                                (132,388)         14,641
Change in other items, net                                                                                               (13,583)          12,182
Net cash provided by operating activities                                                                                $     901,495     $     917,585
Cash flows from investing activities
Capital expenditures                                                                                                     $     (675,025)   $     (479,993)
Contributions in aid of construction costs from affiliates                                                               1,387             6,135
Acquisitions from affiliates                                                                                             (3,910)           (716,465)
Acquisitions from third parties                                                                                          (155,298)         --
Investments in equity affiliates                                                                                         (384)             (27)
Distributions from equity investments in excess of cumulative earnings - affiliates                                      23,085            21,238
Proceeds from the sale of assets to affiliates                                                                           --                623
Proceeds from the sale of assets to third parties                                                                        23,564            45,490
Proceeds from property insurance claims                                                                                  22,977            17,465
Net cash used in investing activities                                                                                    $     (763,604)   $     (1,105,534)
Cash flows from financing activities
Borrowings, net of debt issuance costs                                                                                   $     369,989     $     1,297,218
Repayments of debt                                                                                                       --                (900,000)
Settlement of the Deferred purchase price obligation - Anadarko                                                          (37,346)          --
Increase (decrease) in outstanding checks                                                                                5,593             2,079
Proceeds from the issuance of common units, net of offering expenses                                                     (183)             25,000
Proceeds from the issuance of Series A Preferred units, net of offering expenses                                         --                686,937
Distributions to unitholders                                                                                             (801,300)         (671,938)
Distributions to noncontrolling interest owner                                                                           (13,569)          (13,784)
Net contributions from (distributions to) Anadarko                                                                       1,263             (23,491)
Above-market component of swap agreements with Anadarko                                                                  58,551            45,820
Net cash provided by (used in) financing activities                                                                      $     (417,002)   $     447,841
Net increase (decrease) in cash and cash equivalents                                                                     $     (279,111)   $     259,892
Cash and cash equivalents at beginning of period                                                                         357,925           98,033
Cash and cash equivalents at end of period                                                                               $     78,814      $     357,925
Western Gas Partners, LP
OPERATING STATISTICS
(Unaudited)
                                                                                                   Three Months Ended  Year Ended
                                                                                                   December 31,        December 31,
                                                                                                   2017      2016      2017      2016
Throughput for natural gas assets (MMcf/d)
Gathering, treating and transportation                                                             747       1,480     958       1,537
Processing                                                                                         2,663     2,500     2,563     2,350
Equity investment (1)                                                                              158       173       159       177
Total throughput for natural gas assets                                                            3,568     4,153     3,680     4,064
Throughput attributable to noncontrolling interest for natural gas assets                          98        113       105       124
Total throughput attributable to Western Gas Partners, LP for natural gas assets                   3,470     4,040     3,575     3,940
Throughput for crude, NGL and produced water assets (MBbls/d)
Gathering, treating, transportation and disposal                                                   111       49        71        57
Equity investment (2)                                                                              129       132       130       127
Total throughput for crude, NGL and produced water assets                                          240       181       201       184
Adjusted gross margin per Mcf attributable to Western Gas Partners, LP for natural gas assets (3)  $  1.00   $  0.85   $  0.94   $  0.83
Adjusted gross margin per Bbl for crude, NGL and produced water assets (4)                         2.21      2.15      2.10      2.11
(1) Represents WES’s 14.81% share of average Fort Union throughput and 22% share of average Rendezvous throughput.
(2) Represents WES’s 10% share of average White Cliffs throughput, WES’s 25% share of average Mont Belvieu JV throughput, WES’s 20% share of average TEG and TEP throughput, and WES’s 33.33% share of average FRP throughput.
(3) Average for period. Calculated as Adjusted gross margin attributable to Western Gas Partners, LP for natural gas assets (total revenues and other for natural gas assets, less reimbursements for electricity-related expenses recorded as revenue and cost of product for natural gas assets, plus distributions from WES’s equity investments in Fort Union and Rendezvous, and excluding the noncontrolling interest owner’s proportionate share of revenue and cost of product), divided by total throughput (MMcf/d) attributable to Western Gas Partners, LP for natural gas assets.
(4) Average for period. Calculated as Adjusted gross margin for crude, NGL and produced water assets (total revenues and other for crude, NGL and produced water assets, less reimbursements for electricity-related expenses recorded as revenue and cost of product for crude, NGL and produced water assets, plus distributions from WES’s equity investments in White Cliffs, the Mont Belvieu JV, TEG, TEP and FRP), divided by total throughput (MBbls/d) for crude, NGL and produced water assets.
Western Gas Equity Partners, LP
CALCULATION OF CASH AVAILABLE FOR DISTRIBUTION
(Unaudited)
thousands except per-unit amount and Coverage ratio        Three Months Ended
                                                           December 31, 2017
Distributions declared by Western Gas Partners, LP:
General partner interest                                   $         3,605
Incentive distribution rights                              72,587
Common units held by WGP                                   46,121
Less:
Public company general and administrative expense          679
Interest expense                                           576
Cash available for distribution                            $         121,058
Declared distribution per common unit                      $         0.54875
Distributions declared by Western Gas Equity Partners, LP  $         120,140
Coverage ratio                                             1.01                x
Western Gas Equity Partners, LP
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
                                                                   Three Months Ended            Year Ended
                                                                   December 31,                  December 31,
thousands except per-unit amounts                                  2017           2016           2017             2016
Revenues and other
Gathering, processing, transportation and disposal                 $    324,513   $    317,517   $    1,237,949   $    1,227,849
Natural gas and natural gas liquids sales                          299,443        192,728        989,933          572,313
Other                                                              8,062          575            20,474           4,108
Total revenues and other                                           632,018        510,820        2,248,356        1,804,270
Equity income, net - affiliates                                    22,486         21,916         85,194           78,717
Operating expenses
Cost of product                                                    276,834        167,235        908,693          494,194
Operation and maintenance                                          86,550         81,869         315,994          308,010
General and administrative                                         13,073         12,734         50,668           49,248
Property and other taxes                                           11,385         7,048          46,818           40,161
Depreciation and amortization                                      74,602         73,287         290,874          272,933
Impairments                                                        8,295          4,222          178,374          15,535
Total operating expenses                                           470,739        346,395        1,791,421        1,180,081
Gain (loss) on divestiture and other, net                          (2,629)        (5,872)        132,388          (14,641)
Proceeds from business interruption insurance claims               --             --             29,882           16,270
Operating income (loss)                                            181,136        180,469        704,399          704,535
Interest income - affiliates                                       4,225          4,225          16,900           16,900
Interest expense                                                   (36,168)       (39,759)       (144,615)        (116,628)
Other income (expense), net                                        355            275            1,384            545
Income (loss) before income taxes                                  149,548        145,210        578,068          605,352
Income tax (benefit) expense                                       (39)           941            4,866            8,372
Net income (loss)                                                  149,587        144,269        573,202          596,980
Net income (loss) attributable to noncontrolling interests         50,066         60,573         196,595          251,208
Net income (loss) attributable to Western Gas Equity Partners, LP  $    99,521    $    83,696    $    376,607     $    345,772
Limited partners’ interest in net income (loss):
Net income (loss) attributable to Western Gas Equity Partners, LP  $    99,521    $    83,696    $    376,607     $    345,772
Pre-acquisition net (income) loss allocated to Anadarko            --             --             --               (11,326)
Limited partners’ interest in net income (loss)                    $    99,521    $    83,696    $    376,607     $    334,446
Net income (loss) per common unit - basic and diluted              $    0.45      $    0.38      $    1.72        $    1.53
Weighted-average common units outstanding - basic and diluted      218,933        218,925        218,931          218,922
Western Gas Equity Partners, LP
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
                                                                                                                     December 31,
thousands except number of units                                                                                     2017             2016
Current assets                                                                                                       $    255,210     $    595,591
Note receivable - Anadarko                                                                                           260,000          260,000
Net property, plant and equipment                                                                                    5,730,891        5,049,932
Other assets                                                                                                         1,770,210        1,830,574
Total assets                                                                                                         $    8,016,311   $    7,736,097
Current liabilities                                                                                                  $    424,426     $    315,387
Long-term debt                                                                                                       3,492,712        3,119,461
Asset retirement obligations and other                                                                               154,294          149,043
Deferred purchase price obligation - Anadarko                                                                        --               41,440
Total liabilities                                                                                                    $    4,071,432   $    3,625,331
Equity and partners’ capital
Common units (218,933,141 and 218,928,570 units issued and outstanding at December 31, 2017 and 2016, respectively)  $    1,061,125   $    1,048,143
Noncontrolling interests                                                                                             2,883,754        3,062,623
Total liabilities, equity and partners’ capital                                                                      $    8,016,311   $    7,736,097
Western Gas Equity Partners, LP
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
                                                                                                                         Year Ended
                                                                                                                         December 31,
thousands                                                                                                                2017              2016
Cash flows from operating activities
Net income (loss)                                                                                                        $     573,202     $     596,980
Adjustments to reconcile net income (loss) to net cash provided by operating activities and changes in working capital:
Depreciation and amortization                                                                                            290,874           272,933
Impairments                                                                                                              178,374           15,535
(Gain) loss on divestiture and other, net                                                                                (132,388)         14,641
Change in other items, net                                                                                               (12,650)          12,987
Net cash provided by operating activities                                                                                $     897,412     $     913,076
Cash flows from investing activities
Capital expenditures                                                                                                     $     (675,025)   $     (479,993)
Contributions in aid of construction costs from affiliates                                                               1,387             6,135
Acquisitions from affiliates                                                                                             (3,910)           (716,465)
Acquisitions from third parties                                                                                          (155,298)         --
Investments in equity affiliates                                                                                         (384)             (27)
Distributions from equity investments in excess of cumulative earnings - affiliates                                      23,085            21,238
Proceeds from the sale of assets to affiliates                                                                           --                623
Proceeds from the sale of assets to third parties                                                                        23,564            45,490
Proceeds from property insurance claims                                                                                  22,977            17,465
Net cash used in investing activities                                                                                    $     (763,604)   $     (1,105,534)
Cash flows from financing activities
Borrowings, net of debt issuance costs                                                                                   $     369,989     $     1,323,198
Repayments of debt                                                                                                       --                (900,000)
Settlement of the Deferred purchase price obligation - Anadarko                                                          (37,346)          --
Increase (decrease) in outstanding checks                                                                                5,593             2,079
Proceeds from the issuance of WES common units, net of offering expenses                                                 (183)             --
Proceeds from the issuance of WES Series A Preferred units, net of offering expenses                                     --                686,937
Distributions to WGP unitholders                                                                                         (441,967)         (374,082)
Distributions to Chipeta noncontrolling interest owner                                                                   (13,569)          (13,784)
Distributions to noncontrolling interest owners of WES                                                                   (355,623)         (294,841)
Net contributions from (distributions to) Anadarko                                                                       1,263             (23,491)
Above-market component of swap agreements with Anadarko                                                                  58,551            45,820
Net cash provided by (used in) financing activities                                                                      $     (413,292)   $     451,836
Net increase (decrease) in cash and cash equivalents                                                                     $     (279,484)   $     259,378
Cash and cash equivalents at beginning of period                                                                         359,072           99,694
Cash and cash equivalents at end of period                                                                               $     79,588      $     359,072

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SOURCE Western Gas Partners, LP; Western Gas Equity Partners, LP

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