Business Context and Reporting Period
This Form 8-K Current Report was filed by Western Midstream Partners, LP on September 11, 2020. The filing primarily addresses significant corporate governance changes, including the appointment and departure of directors and the Chief Financial Officer, as well as a material transaction involving the redemption of common units held by Anadarko Petroleum Corporation.
Key Financial Metrics and Transaction Details
The filing does not provide standard periodic financial metrics such as revenue, profit, cash flow, or margins. However, it details a specific financial transaction:
- Unit Redemption: The Partnership redeemed and retired approximately 27.9 million common units held by Anadarko Petroleum Corporation.
- Consideration: In exchange for the units, the Partnership transferred its 98% interest in a $260 million 6.5% Fixed Rate Note due 2038 issued by Anadarko to a subsidiary of the Partnership.
- Note Cancellation: On the effective date, Anadarko canceled and retired the portion of the Note and the principal and accrued interest owed thereunder.
Material Changes Versus Prior Period
The filing reports the following material changes in corporate structure and leadership effective September 11, 2020:
- Board Composition: The Board size was reduced to eight directors. Three new independent directors (Kenneth F. Owen, David J. Schulte, and Lisa A. Stewart) were appointed, succeeding six departing directors (Steven D. Arnold, James R. Crane, Thomas R. Hix, Craig W. Stewart, David J. Tudor, and Marcia E. Backus).
- Executive Leadership: Michael C. Pearl departed as Senior Vice President and Chief Financial Officer. Michael P. Ure, the President and CEO, assumed the duties of CFO on an interim basis without additional compensation.
- Capital Structure: The redemption of 27.9 million units represents a significant reduction in outstanding limited partner interests.
Guidance, Outlook, and Risks
The filing does not contain forward-looking guidance, revenue outlook, or management commentary regarding future operational performance. Regarding risks and contingencies:
- Departure Context: The filing explicitly states that the departures of the six directors and the CFO were not the result of any disagreement with the Partnership regarding operations, policies, or practices.
- Compensation: Departing CFO Michael C. Pearl will receive retention payments and benefits consistent with the Partnership's 2019 10-K. New directors will receive prorated compensation consistent with existing non-employee director arrangements.
- Transaction Approval: The Unit Redemption Agreement was approved by the Special Committee and the full Board prior to the leadership changes.
Key Facts for Investor Verification
- Verify the impact of the 27.9 million unit redemption on the Partnership's total outstanding units and ownership structure.
- Confirm the terms of the $260 million Note transfer and the specific accounting treatment of the cancellation of principal and accrued interest.
- Monitor the search for a permanent Chief Financial Officer to succeed Michael P. Ure in his interim role.
- Review the 2019 10-K for details on the compensation packages for the departing CFO and the new board members.