Description of Business and Basis of Presentation (Tables)

9 Months Ended

Sep. 30, 2018

As of September 30, 2018, WES’s assets and investments consisted of the following:



	Owned and Operated	Operated Interests	Non-Operated Interests	Equity Interests
Gathering systems ⁽¹⁾	12	3	3	2
Treating facilities	19	3	—	3
Natural gas processing plants/trains	20	4	—	2
NGL pipelines	2	—	—	3
Natural gas pipelines	5	—	—	—
Oil pipelines	—	1	—	2


⁽¹⁾	Includes the DBM water systems.

Ownership Interests and Method of Consolidation Table

The following table outlines WES’s ownership interests and the accounting method of consolidation used in WES’s consolidated financial statements for entities not wholly owned:



	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	%
Whitethorn	20	%
Cactus II	15	%
Proportionate consolidation ⁽²⁾
Marcellus Interest systems	33.75	%
Newcastle system	50	%
Springfield system	50.1	%
Full consolidation
Chipeta ⁽³⁾	75	%


⁽¹⁾	Investments in non-controlled entities over which WES exercises significant influence are accounted for under the equity method. “Equity investment throughput” refers to WES’s share of average throughput for these investments.


⁽²⁾	WGP proportionately consolidates WES’s 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 interests in the consolidated financial statements, in addition to the noncontrolling interests noted below.

Impact of New Accounting Pronouncement Tables

The following tables summarize the impact of adopting Topic 606 on the impacted line items within the consolidated statements of operations and the consolidated balance sheet. The differences between revenue as reported following Topic 606 and revenue as it would have been reported under Topic 605 are due to the changes described above.



	Three Months Ended September 30, 2018
thousands	As Reported		Without Adoption of Topic 606		Effect of Change Increase / (Decrease)
Revenues
Service revenues – fee based	$	409,106	$	396,161	$	12,945
Service revenues – product based	22,735		—		22,735
Product sales	75,150		366,603		(291,453		)
Expenses
Cost of product	105,966		353,641		(247,675		)
Operation and maintenance	111,359		111,327		32
Depreciation and amortization	82,553		81,824		729
Income tax (benefit) expense	1,517		1,580		(63		)
Net income (loss) attributable to noncontrolling interests	47,203		40,471		6,732
Net income (loss) attributable to Western Gas Equity Partners, LP	107,474		123,002		(15,528		)

1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (CONTINUED)



	Nine Months Ended September 30, 2018
thousands	As Reported		Without Adoption of Topic 606		Effect of Change Increase / (Decrease)
Revenues
Service revenues – fee based	$	1,146,099	$	1,096,708	$	49,391
Service revenues – product based	67,433		—		67,433
Product sales	217,738		978,127		(760,389		)
Expenses
Cost of product	303,518		940,936		(637,418		)
Operation and maintenance	300,266		300,098		168
Depreciation and amortization	238,187		236,102		2,085
Impairments	152,708		152,663		45
Income tax (benefit) expense	3,301		3,361		(60		)
Net income (loss) attributable to noncontrolling interests	63,669		89,339		(25,670		)
Net income (loss) attributable to Western Gas Equity Partners, LP	276,059		258,774		17,285



	September 30, 2018
thousands	As Reported		Without Adoption of Topic 606		Effect of Change Increase / (Decrease)
Assets
Other current assets	$	26,119	$	23,371	$	2,748
Net property, plant and equipment	6,418,634		6,320,225		98,409
Other assets	14,057		13,894		163
Liabilities
Accrued liabilities	114,504		106,810		7,694
Deferred income taxes	10,285		10,519		(234		)
Other liabilities	141,957		2,781		139,176
Equity and partners’ capital
Total equity and partners’ capital	3,616,640		3,661,956		(45,316		)