Transactions With Affiliates (tables)

9 Months Ended

Sep. 30, 2013

Below is a summary of the fixed price ranges on WES’s outstanding commodity price swap agreements as of September 30, 2013:



per barrel except natural gas	2013				2014				2015				2016
Ethane	$	18.32	−	30.10	$	18.36	−	30.53	$	18.41	−	23.41	$	23.11
Propane	$	45.90	−	55.84	$	46.47	−	53.78	$	47.08	−	52.99	$	52.90
Isobutane	$	60.44	−	77.66	$	61.24	−	75.13	$	62.09	−	74.02	$	73.89
Normal butane	$	53.20	−	68.24	$	53.89	−	66.01	$	54.62	−	65.04	$	64.93
Natural gasoline	$	70.89	−	92.23	$	71.85	−	83.04	$	72.88	−	81.82	$	81.68
Condensate	$	74.04	−	85.84	$	75.22	−	83.04	$	76.47	−	81.82	$	81.68
Natural gas (per MMbtu)	$	3.75	−	6.09	$	4.45	−	6.20	$	4.66	−	5.96	$	4.87

Gains (Losses) on Commodity Price Swap Agreements Table

The following table summarizes realized gains and losses on commodity price swap agreements:



	Three Months Ended September 30,						Nine Months Ended September 30,
thousands	2013			2012			2013			2012
Gains (losses) on commodity price swap agreements related to sales:⁽¹⁾
Natural gas sales	$	6,923		$	9,132		$	14,707		$	30,728
Natural gas liquids sales	27,541			25,986			83,049			46,020
Total	34,464			35,118			97,756			76,748
Losses on commodity price swap agreements related to purchases ⁽²⁾	(23,902		)	(25,803		)	(66,613		)	(70,342		)
Net gains (losses) on commodity price swap agreements	$	10,562		$	9,315		$	31,143		$	6,406


⁽¹⁾	Reported in affiliate natural gas, NGLs and condensate sales in the consolidated statements of income in the period in which the related sale is recorded.


⁽²⁾	Reported in cost of product in the consolidated statements of income in the period in which the related purchase is recorded.

Equipment Purchase and Sale

The following table summarizes WES’s purchases from and sales to Anadarko of pipe and equipment:



	Nine Months Ended September 30,
	2013		2012		2013		2012
thousands	Purchases				Sales
Consideration ⁽¹⁾	$	6,167	$	18,946	$	82	$	760
Net carrying value	2,039		6,765		34		392
Partners’ capital adjustment	$	4,128	$	12,181	$	48	$	368


⁽¹⁾	Includes a payable of $1.8 million for pipe and equipment purchased in September 2013.

Summary of Affiliate Transactions Table

The following table summarizes affiliate transactions, which include revenue from affiliates, reimbursement of operating expenses and purchases of natural gas:



	Three Months Ended September 30,				Nine Months Ended September 30,
thousands	2013		2012		2013		2012
Revenues ⁽¹⁾	$	217,624	$	180,605	$	603,214	$	519,460
Cost of product ⁽¹⁾	33,753		42,839		97,801		115,603
Operation and maintenance ⁽²⁾	13,469		12,638		41,021		38,040
General and administrative ⁽³⁾	6,090		14,227		17,981		30,811
Operating expenses	53,312		69,704		156,803		184,454
Interest income, net ⁽⁴⁾	4,225		4,225		12,675		12,675
Interest expense ⁽⁵⁾	—		81		—		2,684
Distributions to WGP unitholders ⁽⁶⁾	39,329		—		82,068		—
Distributions to WES unitholders ⁽⁷⁾	252		—		494		—
Contributions from Anadarko as a Chipeta noncontrolling interest owner ⁽⁸⁾	—		2,148		—		12,588
Distributions to Anadarko as a Chipeta noncontrolling interest owner ⁽⁸⁾	—		1,464		—		6,528


⁽¹⁾	Represents amounts recognized under gathering, treating or processing agreements, and purchase and sale agreements.


⁽²⁾	Represents expenses incurred on and subsequent to the date of the acquisition of WES assets, as well as expenses incurred by Anadarko on a historical basis related to WES assets prior to the acquisition of such assets by WES.

⁽³⁾

Represents general and administrative expense incurred on and subsequent to the date of WES’s acquisition of WES assets, as well as a management services fee for reimbursement of expenses incurred by Anadarko for periods prior to the acquisition of WES assets by WES. These amounts include equity-based compensation expense allocated to WES by Anadarko (see Equity incentive plan and Anadarko incentive plans within this Note 5) and amounts charged by Anadarko under the WGP omnibus agreement.


⁽⁴⁾	Represents interest income recognized on the note receivable from Anadarko.

⁽⁵⁾

For the three and nine months ended September 30, 2012, includes interest expense recognized on the WES note payable to Anadarko (see Note 8) and interest imputed on the reimbursement payable to Anadarko for certain expenditures Anadarko incurred in 2011 related to the construction of the Brasada and Lancaster plants. WES repaid the WES note payable to Anadarko in June 2012, and repaid the reimbursement payable to Anadarko related to the construction of the Brasada and Lancaster plants in the fourth quarter of 2012. See Note receivable from and amounts payable to Anadarko within this Note 5.


⁽⁶⁾	Represents distributions paid under WGP’s partnership agreement.


⁽⁷⁾	Represents distributions paid under WES’s partnership agreement (see Holdings of WES equity in Note 4).


⁽⁸⁾	As described in Note 2, WES acquired Anadarko’s then remaining 24% membership interest in Chipeta on August 1, 2012, and accounted for the acquisition on a prospective basis. As such, contributions from noncontrolling interest owners and distributions to noncontrolling interest owners subsequent to the acquisition date no longer reflect contributions from or distributions to Anadarko.