WESTERN MIDSTREAM ANNOUNCES FOURTH-QUARTER AND FULL-YEAR 2024 RESULTS
Western Midstream Partners (NYSE: WES) reported strong financial results for Q4 and full-year 2024. The company achieved Q4 net income of $325.9 million ($0.85 per unit) and full-year net income of $1.537 billion ($4.02 per unit). Adjusted EBITDA reached $590.7 million in Q4 and $2.344 billion for the full year, exceeding guidance.
Key operational highlights include record annual natural-gas throughput of 5.1 Bcf/d (16% year-over-year increase), crude-oil and NGLs throughput of 530 MBbls/d (12% increase), and produced-water throughput of 1,124 MBbls/d (11% increase). The company divested non-core assets for $794.8 million and commenced operations of the 300 MMcf/d Mentone III processing train.
WES maintained its quarterly Base Distribution at $0.875 per unit ($3.50 annualized) and returned $1.246 billion to unitholders in 2024. The company also announced the construction of the Pathfinder pipeline, supported by a new long-term agreement with Occidental for produced-water handling.
Western Midstream Partners (NYSE: WES) ha riportato risultati finanziari solidi per il quarto trimestre e l'intero anno 2024. L'azienda ha registrato un reddito netto di $325,9 milioni ($0,85 per unità) nel quarto trimestre e un reddito netto annuale di $1,537 miliardi ($4,02 per unità). EBITDA rettificato ha raggiunto $590,7 milioni nel quarto trimestre e $2,344 miliardi per l'intero anno, superando le previsioni.
I principali punti operativi includono un record di throughput annuale di gas naturale di 5,1 Bcf/giorno (aumento del 16% rispetto all'anno precedente), throughput di petrolio greggio e NGL di 530 MBbl/giorno (aumento del 12%) e throughput di acqua prodotta di 1.124 MBbl/giorno (aumento dell'11%). L'azienda ha ceduto attività non core per $794,8 milioni e ha avviato le operazioni del treno di trattamento Mentone III da 300 MMcf/giorno.
WES ha mantenuto la sua Distribuzione Base trimestrale a $0,875 per unità ($3,50 annualizzati) e ha restituito $1,246 miliardi agli unitholder nel 2024. L'azienda ha anche annunciato la costruzione del gasdotto Pathfinder, supportato da un nuovo accordo a lungo termine con Occidental per la gestione dell'acqua prodotta.
Western Midstream Partners (NYSE: WES) informó resultados financieros sólidos para el cuarto trimestre y el año completo de 2024. La compañía logró un ingreso neto de $325.9 millones ($0.85 por unidad) en el cuarto trimestre y un ingreso neto anual de $1.537 mil millones ($4.02 por unidad). EBITDA ajustado alcanzó $590.7 millones en el cuarto trimestre y $2.344 mil millones para el año completo, superando las expectativas.
Los aspectos operativos clave incluyen un récord de flujo de gas natural anual de 5.1 Bcf/d (un aumento del 16% interanual), un flujo de petróleo crudo y NGLs de 530 MBbls/d (un aumento del 12%) y un flujo de agua producida de 1,124 MBbls/d (un aumento del 11%). La compañía desinvirtió activos no estratégicos por $794.8 millones y comenzó las operaciones del tren de procesamiento Mentone III de 300 MMcf/d.
WES mantuvo su Distribución Base trimestral en $0.875 por unidad ($3.50 anualizados) y devolvió $1.246 mil millones a los unitholders en 2024. La compañía también anunció la construcción del gasoducto Pathfinder, respaldado por un nuevo acuerdo a largo plazo con Occidental para el manejo del agua producida.
Western Midstream Partners (NYSE: WES)는 2024년 4분기 및 전체 연도에 대한 강력한 재무 결과를 보고했습니다. 이 회사는 4분기에 $325.9 백만($0.85 단위당)의 순이익을 기록했으며, 전체 연도 순이익은 $1.537 억($4.02 단위당)이었습니다. 조정 EBITDA는 4분기에 $590.7 백만, 연간 $2.344 억에 도달하여 예상치를 초과했습니다.
주요 운영 하이라이트에는 연간 천연가스 처리량 5.1 Bcf/d(전년 대비 16% 증가), 원유 및 NGL 처리량 530 MBbls/d(12% 증가), 생산된 물 처리량 1,124 MBbls/d(11% 증가)가 포함됩니다. 이 회사는 비핵심 자산을 $794.8 백만에 매각하고 300 MMcf/d Mentone III 처리 기차의 운영을 시작했습니다.
WES는 분기별 기본 배당금을 $0.875 단위당($3.50 연간화)으로 유지하고 2024년에 단위 보유자에게 $1.246 억을 반환했습니다. 이 회사는 또한 생산된 물 처리를 위한 Occidental과의 새로운 장기 계약에 의해 지원되는 Pathfinder 파이프라인 건설을 발표했습니다.
Western Midstream Partners (NYSE: WES) a annoncé des résultats financiers solides pour le quatrième trimestre et l'année entière 2024. La société a réalisé un bénéfice net de 325,9 millions USD (0,85 USD par unité) au quatrième trimestre et un bénéfice net annuel de 1,537 milliard USD (4,02 USD par unité). EBITDA ajusté a atteint 590,7 millions USD au quatrième trimestre et 2,344 milliards USD pour l'année entière, dépassant les prévisions.
Les principaux points opérationnels incluent un débit annuel record de gaz naturel de 5,1 Bcf/jour (augmentation de 16% par rapport à l'année précédente), un débit de pétrole brut et de NGL de 530 MBbls/jour (augmentation de 12%) et un débit d'eau produite de 1 124 MBbls/jour (augmentation de 11%). La société a cédé des actifs non stratégiques pour 794,8 millions USD et a commencé les opérations du train de traitement Mentone III de 300 MMcf/jour.
WES a maintenu sa distribution de base trimestrielle à 0,875 USD par unité (3,50 USD annualisés) et a restitué 1,246 milliard USD aux détenteurs d'unités en 2024. La société a également annoncé la construction du pipeline Pathfinder, soutenue par un nouvel accord à long terme avec Occidental pour la gestion de l'eau produite.
Western Midstream Partners (NYSE: WES) berichtete über starke finanzielle Ergebnisse für das vierte Quartal und das gesamte Jahr 2024. Das Unternehmen erzielte im vierten Quartal einen Nettogewinn von 325,9 Millionen USD (0,85 USD pro Einheit) und einen Nettogewinn von 1,537 Milliarden USD für das gesamte Jahr (4,02 USD pro Einheit). Bereinigtes EBITDA erreichte im vierten Quartal 590,7 Millionen USD und 2,344 Milliarden USD für das gesamte Jahr und übertraf damit die Prognosen.
Wichtige betriebliche Höhepunkte umfassen einen Rekord von 5,1 Bcf/d an jährlichem Erdgasdurchsatz (16% Steigerung im Jahresvergleich), 530 MBbls/d an Rohöl- und NGL-Durchsatz (12% Steigerung) und 1.124 MBbls/d an durchgeführtem Wasser (11% Steigerung). Das Unternehmen hat Nicht-Kernvermögen für 794,8 Millionen USD verkauft und den Betrieb der 300 MMcf/d Mentone III-Verarbeitungsanlage aufgenommen.
WES hielt seine vierteljährliche Basisverteilung bei 0,875 USD pro Einheit (3,50 USD annualisiert) und gab 2024 insgesamt 1,246 Milliarden USD an die Unitholder zurück. Das Unternehmen kündigte auch den Bau der Pathfinder-Pipeline an, unterstützt durch eine neue langfristige Vereinbarung mit Occidental zur Handhabung von produziertem Wasser.
- Record annual natural-gas throughput with 16% YoY growth
- Exceeded full-year Adjusted EBITDA guidance of $2.2-2.4B
- Generated $1.324B in Free Cash Flow, above guidance
- Achieved 3.0x leverage ratio target ahead of schedule
- Secured new long-term agreement with Occidental for Pathfinder pipeline
- Successfully divested non-core assets for $794.8M
- Q4 Free Cash Flow after distributions was negative $31.6M
- Capital expenditures increased to $790.2M for full-year 2024
Insights
Western Midstream's Q4 and full-year 2024 results demonstrate exceptional financial and operational execution, with the company exceeding both its Adjusted EBITDA guidance ($2.344 billion vs. $2.2-2.4 billion range) and significantly surpassing Free Cash Flow targets ($1.324 billion vs. $1.05-1.25 billion range). This outperformance reflects robust throughput growth across all product streams, with adjusted year-over-year increases of
The Delaware Basin continues to be WES's growth engine, delivering
WES's financial discipline is evident in achieving its 3.0x leverage target ahead of schedule (Q3 vs. Q4 2024) while returning
Management's guidance for "mid-to-low single-digits annual distribution growth" in 2025 suggests a balanced capital allocation approach, prioritizing sustainable distribution growth supported by underlying business expansion rather than aggressive increases that might limit reinvestment flexibility. This conservative stance positions WES well for long-term value creation while maintaining financial resilience.
Western Midstream's 2024 operational results demonstrate exceptional throughput growth across their diversified midstream portfolio, with the company strategically strengthening its infrastructure footprint in three key production basins. The Delaware Basin continues to be WES's primary growth engine, delivering
The newly announced Pathfinder pipeline represents a transformative expansion in WES's produced water business, designed to transport over 800 MBbls/d in the Delaware Basin. This infrastructure solution addresses a critical challenge for producers in the region, where water-to-oil ratios continue to increase as development matures. Occidental's long-term commitment for up to 280 MBbls/d of gathering capacity and 220 MBbls/d of disposal capacity provides a strong commercial foundation while leaving significant capacity for third-party volumes. This positions WES as an emerging leader in the Delaware Basin water management space, a business segment that typically generates higher margins and requires less maintenance capital than traditional midstream assets.
The DJ Basin's performance marks a significant inflection point, with the first annual increase in crude/NGLs throughput since 2019 and record natural gas volumes. The extended Phillips 66 agreement adds valuable firm processing capacity commitments, improving asset utilization visibility. Meanwhile, the successful integration of Meritage Midstream has transformed WES into the dominant midstream provider in the Powder River Basin, creating a strategic foothold in a basin with significant development potential.
WES's infrastructure investments demonstrate exceptional capital efficiency, with the company focusing on brownfield expansions and system optimizations that leverage existing footprints. This approach maximizes returns while minimizing environmental impacts. As the energy transition progresses, WES's extensive gathering infrastructure and processing capabilities could provide valuable optionality for potential future integration with carbon capture systems, particularly in the DJ Basin where geological storage opportunities exist.
- Reported fourth-quarter 2024 Net income attributable to limited partners of
$325.9 million $590.7 million - Reported full-year 2024 Net income attributable to limited partners of
$1.53 7 billion$2.34 4 billion$2.20 0 billion$2.40 0 billion - Reported fourth-quarter 2024 Cash flows provided by operating activities of
$554.4 million $309.3 million - Reported full-year 2024 Cash flows provided by operating activities of
$2.13 7 billion$1.32 4 billion$1.05 0 billion$1.25 0 billion - Announced a fourth-quarter Base Distribution of
$0.87 5$3.50
Net income (loss) attributable to limited partners for full-year 2024 totaled
FULL-YEAR 2024 HIGHLIGHTS
- Achieved record annual natural-gas throughput(2) of 5.1 Bcf/d. Adjusted for the sale of the Marcellus assets in the second quarter of 2024, natural-gas throughput increased 16-percent(3) year-over-year, in-line with our 2024 expectations of mid-to-upper teens average annual throughput growth.
- Achieved annual crude-oil and NGLs throughput(2) of 530 MBbls/d. Adjusted for the crude-oil and NGLs assets that were divested during 2024, crude-oil and NGLs throughput increased 12-percent(4) year-over-year, in-line with our revised 2024 expectations of low-double-digits average annual throughput growth.
- Gathered record annual produced-water throughput(2) of 1,124 MBbls/d, representing an 11-percent year-over-year increase and in-line with our revised 2024 expectations of low-double-digits average annual throughput growth.
- Achieved year-over-year throughput growth across all products in the
Delaware Basin of 14-percent, for both natural gas and crude oil and NGLs, and 11-percent for produced water. - Divested multiple non-operated, non-core assets for
$794.8 million - Commenced operations of the 300 MMcf/d Mentone III processing train in the
Delaware Basin and materially progressed construction of the 250 MMcf/dNorth Loving processing train that is expected to commence operations by the end of the first quarter 2025. - Executed on our capital return framework by returning
$1.24 6 billion
On February 14, 2025, WES paid its fourth-quarter 2024 per-unit Base Distribution of
Fourth-quarter 2024 natural-gas throughput(2) averaged 5.2 Bcf/d, representing a 4-percent sequential-quarter increase. Fourth-quarter 2024 throughput for crude-oil and NGLs assets(2) averaged 534 MBbls/d, representing a 6-percent sequential-quarter increase. Fourth-quarter 2024 throughput for produced-water assets(2) averaged 1,191 MBbls/d, representing an 8-percent sequential-quarter increase.
Full-year 2024 natural-gas throughput(2) averaged 5.1 Bcf/d. Adjusted for the sale of the Marcellus assets in the second quarter of 2024, natural gas throughput increased 16-percent(3) from full-year 2023. Full-year 2024 throughput for crude-oil and NGLs assets(2) averaged 530 MBbls/d. Adjusted for the crude-oil and NGLs assets that were divested during 2024, crude-oil and NGLs throughput increased 12-percent(4) from full-year 2023. Full-year 2024 throughput for produced-water assets(2) averaged 1,124 MBbls/d, representing an 11-percent increase from full-year 2023.
"2024 was a successful year for WES as we achieved double-digit throughput growth across all three product lines and grew both Adjusted EBITDA and Free Cash Flow meaningfully year-over-year," said Oscar Brown, President and Chief Executive Officer.
"With the start-up of Mentone Train III, WES has retained its position as one of the top natural-gas processors in the core of the
"In parallel with our commercial success, WES continued to execute on its capital allocation framework. We achieved our year-end leverage target of 3.0-times during the third quarter, while also returning more than
"This afternoon, we also announced that WES has sanctioned the construction of the Pathfinder pipeline to transport over 800 MBbls/d of produced water for disposal at WES's existing and new disposal facilities in eastern
CONFERENCE CALL TOMORROW AT 1:00 P.M. CT
WES will host a conference call on Thursday, February 27, 2025, at 1:00 p.m. Central Time (2:00 p.m. Eastern Time) to discuss its fourth-quarter and full-year 2024 results. To access the live audio webcast of the conference call, please visit the investor relations section of the Partnership's website at www.westernmidstream.com. A small number of phone lines are available for analysts; individuals should dial 800-836-8184 (Domestic) or 646-357-8785 (International) ten to fifteen minutes before the scheduled conference call time. A replay of the live audio webcast can be accessed on the Partnership's website at www.westernmidstream.com for one year after the call.
For additional details on WES's financial and operational performance, please refer to the earnings slides and updated investor presentation available at www.westernmidstream.com.
FILING OF ANNUAL REPORT ON FORM 10-K
Today WES announced the filing of its Annual Report on Form 10-K for the fiscal year ended December 31, 2024, with the Securities and Exchange Commission. A copy of the report is available for viewing and downloading on the Western Midstream website at www.westernmidstream.com. Unitholders may request hard copies of the report, which contains WES's audited financial statements, free of charge, by emailing investors@westernmidstream.com, or by submitting a written request to Western Midstream Partners, LP at the following address: 9950 Woodloch Forest Drive, Suite 2800,
ABOUT WESTERN MIDSTREAM
Western Midstream Partners, LP ("WES") is a master limited partnership formed to develop, acquire, own, and operate midstream assets. With midstream assets located in
For more information about WES, please visit www.westernmidstream.com.
This news release contains forward-looking statements. WES's management believes that its expectations are based on reasonable assumptions. No assurance, however, can be given that such expectations will prove 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 our ability to meet financial guidance or distribution expectations; our 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; our ability to meet projected in-service dates for capital-growth projects including Project Pathfinder; construction costs or capital expenditures exceeding estimated or budgeted costs or expenditures; and the other factors described in the "Risk Factors" section of WES's most-recent Form 10-K filed with the Securities and Exchange Commission and other public filings and press releases. WES undertakes no obligation to publicly update or revise any forward-looking statements.
______________________________________________________________
(1) | Please see the definitions of the Partnership's non-GAAP measures at the end of this release and reconciliation of GAAP to non-GAAP measures. |
(2) | Represents total throughput attributable to WES, which excludes (i) the |
(3) | For the years ended December 31, 2024 and 2023, excludes an average of 38 MMcf/d and 120 MMcf/d, respectively, of throughput associated with the sale of the Marcellus Interest gathering system in April 2024. |
(4) | For the years ended December 31, 2024 and 2023, excludes an average of 23 MBbls/d and 203 MBbls/d, respectively, of throughput associated with the sale of (i) Saddlehorn Pipeline LLC, Whitethorn Pipeline Company LLC, Panola Pipeline Company LLC, and Enterprise EF78 LLC in the first quarter of 2024 and (ii) Wamsutter Pipeline LLC in the third quarter of 2024. |
(5) | Accrual-based, includes equity investments, excludes capitalized interest, and excludes capital expenditures associated with the |
WESTERN MIDSTREAM CONTACTS
Daniel Jenkins
Director, Investor Relations
Investors@westernmidstream.com
866.512.3523
Rhianna Disch
Manager, Investor Relations
Investors@westernmidstream.com
866.512.3523
Western Midstream Partners, LP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) | ||||||||
Three Months Ended December 31, | Year Ended December 31, | |||||||
thousands except per-unit amounts | 2024 | 2023 | 2024 | 2023 | ||||
Revenues and other | ||||||||
Service revenues – fee based | $ 858,896 | $ 763,837 | $ 3,248,262 | $ 2,768,757 | ||||
Service revenues – product based | 38,455 | 49,515 | 215,776 | 191,727 | ||||
Product sales | 31,024 | 44,688 | 140,100 | 145,024 | ||||
Other | 128 | 168 | 1,085 | 968 | ||||
Total revenues and other | 928,503 | 858,208 | 3,605,223 | 3,106,476 | ||||
Equity income, net – related parties | 28,158 | 36,120 | 112,385 | 152,959 | ||||
Operating expenses | ||||||||
Cost of product | 39,315 | 40,803 | 172,251 | 164,598 | ||||
Operation and maintenance | 231,244 | 200,426 | 880,568 | 762,530 | ||||
General and administrative | 76,028 | 73,060 | 271,526 | 232,632 | ||||
Property and other taxes | 18,684 | 16,497 | 62,668 | 56,458 | ||||
Depreciation and amortization | 162,990 | 165,187 | 650,428 | 600,668 | ||||
Long-lived asset and other impairments | 2 | 4 | 6,206 | 52,884 | ||||
Total operating expenses | 528,263 | 495,977 | 2,043,647 | 1,869,770 | ||||
Gain (loss) on divestiture and other, net | (2,655) | (6,434) | 296,771 | (10,102) | ||||
Operating income (loss) | 425,743 | 391,917 | 1,970,732 | 1,379,563 | ||||
Interest expense | (99,336) | (97,622) | (378,513) | (348,228) | ||||
Gain (loss) on early extinguishment of debt | — | — | 5,403 | 15,378 | ||||
Other income (expense), net | 15,617 | 2,862 | 31,741 | 5,679 | ||||
Income (loss) before income taxes | 342,024 | 297,157 | 1,629,363 | 1,052,392 | ||||
Income tax expense (benefit) | 444 | 1,405 | 18,111 | 4,385 | ||||
Net income (loss) | 341,580 | 295,752 | 1,611,252 | 1,048,007 | ||||
Net income (loss) attributable to noncontrolling interests | 7,967 | 7,398 | 37,681 | 25,791 | ||||
Net income (loss) attributable to Western Midstream Partners, LP | $ 333,613 | $ 288,354 | $ 1,573,571 | $ 1,022,216 | ||||
Limited partners' interest in net income (loss): | ||||||||
Net income (loss) attributable to Western Midstream Partners, LP | $ 333,613 | $ 288,354 | $ 1,573,571 | $ 1,022,216 | ||||
General partner interest in net (income) loss | (7,759) | (6,724) | (36,604) | (23,684) | ||||
Limited partners' interest in net income (loss) | $ 325,854 | $ 281,630 | $ 1,536,967 | $ 998,532 | ||||
Net income (loss) per common unit – basic | $ 0.86 | $ 0.74 | $ 4.04 | $ 2.61 | ||||
Net income (loss) per common unit – diluted | $ 0.85 | $ 0.74 | $ 4.02 | $ 2.60 | ||||
Weighted-average common units outstanding – basic | 380,556 | 379,517 | 380,397 | 383,028 | ||||
Weighted-average common units outstanding – diluted | 382,918 | 381,140 | 382,455 | 384,408 | ||||
Western Midstream Partners, LP CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) | ||||
December 31, | ||||
thousands except number of units | 2024 | 2023 | ||
Total current assets | $ 1,847,190 | $ 992,410 | ||
Net property, plant, and equipment | 9,714,609 | 9,655,016 | ||
Other assets | 1,582,986 | 1,824,181 | ||
Total assets | $ 13,144,785 | $ 12,471,607 | ||
Total current liabilities | $ 1,691,694 | $ 1,304,056 | ||
Long-term debt | 6,926,647 | 7,283,556 | ||
Asset retirement obligations | 370,195 | 359,185 | ||
Other liabilities | 781,079 | 495,680 | ||
Total liabilities | 9,769,615 | 9,442,477 | ||
Equity and partners' capital | ||||
Common units (380,556,643 and 379,519,983 units issued and outstanding at December 31, | 3,224,802 | 2,894,231 | ||
General partner units (9,060,641 units issued and outstanding at December 31, 2024 | 10,803 | 3,193 | ||
Noncontrolling interests | 139,565 | 131,706 | ||
Total liabilities, equity, and partners' capital | $ 13,144,785 | $ 12,471,607 | ||
Western Midstream Partners, LP CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) | ||||
Year Ended December 31, | ||||
thousands | 2024 | 2023 | ||
Cash flows from operating activities | ||||
Net income (loss) | $ 1,611,252 | $ 1,048,007 | ||
Adjustments to reconcile net income (loss) to net cash provided by operating activities and | ||||
Depreciation and amortization | 650,428 | 600,668 | ||
Long-lived asset and other impairments | 6,206 | 52,884 | ||
(Gain) loss on divestiture and other, net | (296,771) | 10,102 | ||
(Gain) loss on early extinguishment of debt | (5,403) | (15,378) | ||
Change in other items, net | 171,148 | (34,949) | ||
Net cash provided by operating activities | $ 2,136,860 | $ 1,661,334 | ||
Cash flows from investing activities | ||||
Capital expenditures | $ (833,856) | $ (735,080) | ||
Acquisitions from third parties | (443) | (877,746) | ||
Contributions to equity investments - related parties | (9,690) | (1,153) | ||
Distributions from equity investments in excess of cumulative earnings – related parties | 30,850 | 39,104 | ||
Proceeds from the sale of assets to third parties | 792,255 | (87) | ||
(Increase) decrease in materials and supplies inventory and other | (18,284) | (32,329) | ||
Net cash provided by (used in) investing activities | $ (39,168) | $ (1,607,291) | ||
Cash flows from financing activities | ||||
Borrowings, net of debt issuance costs | $ 789,044 | $ 2,448,733 | ||
Repayments of debt | (143,852) | (1,967,928) | ||
Commercial paper borrowings (repayments), net | (610,313) | 609,916 | ||
Increase (decrease) in outstanding checks | (5,622) | 3,516 | ||
Distributions to Partnership unitholders | (1,246,069) | (978,430) | ||
Distributions to Chipeta noncontrolling interest owner | (4,372) | (7,641) | ||
Distributions to noncontrolling interest owner of WES Operating | (25,450) | (22,850) | ||
Unit repurchases | — | (134,602) | ||
Other | (33,381) | (18,626) | ||
Net cash provided by (used in) financing activities | $ (1,280,015) | $ (67,912) | ||
Net increase (decrease) in cash and cash equivalents | $ 817,677 | $ (13,869) | ||
Cash and cash equivalents at beginning of period | 272,787 | 286,656 | ||
Cash and cash equivalents at end of period | $ 1,090,464 | $ 272,787 | ||
Western Midstream Partners, LP
RECONCILIATION OF GAAP TO NON-GAAP MEASURES
WES defines Adjusted Gross Margin attributable to Western Midstream Partners, LP ("Adjusted Gross Margin") as total revenues and other (less reimbursements for electricity-related expenses recorded as revenue), less cost of product, plus distributions from equity investments, and excluding the noncontrolling interest owners' proportionate share of revenues and cost of product.
WES defines Adjusted EBITDA attributable to Western Midstream Partners, LP ("Adjusted EBITDA") as net income (loss), plus (i) distributions from equity investments, (ii) non-cash equity-based compensation expense, (iii) interest expense, (iv) income tax expense, (v) depreciation and amortization, (vi) impairments, and (vii) other expense (including lower of cost or market inventory adjustments recorded in cost of product), less (i) gain (loss) on divestiture and other, net, (ii) gain (loss) on early extinguishment of debt, (iii) income from equity investments, (iv) interest income, (v) income tax benefit, (vi) other income, and (vii) the noncontrolling interest owners' proportionate share of revenues and expenses.
WES defines Free Cash Flow as net cash provided by operating activities less total capital expenditures and contributions to equity investments, plus distributions from equity investments in excess of cumulative earnings.
Below are reconciliations of (i) gross margin (GAAP) to Adjusted Gross Margin (non-GAAP), (ii) net income (loss) (GAAP) and net cash provided by operating activities (GAAP) to Adjusted EBITDA (non-GAAP), and (iii) net cash provided by operating activities (GAAP) to Free Cash Flow (non-GAAP), as required under Regulation G of the Securities Exchange Act of 1934. Management believes that Adjusted Gross Margin, Adjusted EBITDA, and Free Cash Flow are widely accepted financial indicators of WES's financial performance compared to other publicly traded partnerships and are useful in assessing WES's ability to incur and service debt, fund capital expenditures, and make distributions. Adjusted Gross Margin, Adjusted EBITDA, and Free Cash Flow as defined by WES, may not be comparable to similarly titled measures used by other companies. Therefore, WES's Adjusted Gross Margin, Adjusted EBITDA, and Free Cash Flow should be considered in conjunction with net income (loss) attributable to Western Midstream Partners, LP and other applicable performance measures, such as gross margin or cash flows provided by operating activities.
Western Midstream Partners, LP RECONCILIATION OF GAAP TO NON-GAAP MEASURES (CONTINUED) (Unaudited) | ||||||||
Adjusted Gross Margin | ||||||||
Three Months Ended | Year Ended | |||||||
thousands | December 31, | September 30, | December 31, | December 31, | ||||
Reconciliation of Gross margin to Adjusted Gross Margin | ||||||||
Total revenues and other | $ 928,503 | $ 883,362 | $ 3,605,223 | $ 3,106,476 | ||||
Less: | ||||||||
Cost of product | 39,315 | 32,847 | 172,251 | 164,598 | ||||
Depreciation and amortization | 162,990 | 166,015 | 650,428 | 600,668 | ||||
Gross margin | 726,198 | 684,500 | 2,782,544 | 2,341,210 | ||||
Add: | ||||||||
Distributions from equity investments | 31,585 | 29,344 | 142,236 | 194,273 | ||||
Depreciation and amortization | 162,990 | 166,015 | 650,428 | 600,668 | ||||
Less: | ||||||||
Reimbursed electricity-related charges recorded as revenues | 31,834 | 32,379 | 117,906 | 102,109 | ||||
Adjusted Gross Margin attributable to noncontrolling interests (1) | 20,542 | 19,986 | 80,509 | 70,195 | ||||
Adjusted Gross Margin | $ 868,397 | $ 827,494 | $ 3,376,793 | $ 2,963,847 | ||||
Gross margin | ||||||||
Gross margin for natural-gas assets (2) | $ 534,452 | $ 511,244 | $ 2,073,533 | $ 1,738,125 | ||||
Gross margin for crude-oil and NGLs assets (2) | 108,259 | 97,263 | 395,886 | 368,444 | ||||
Gross margin for produced-water assets (2) | 91,219 | 83,178 | 341,784 | 259,541 | ||||
Adjusted Gross Margin | ||||||||
Adjusted Gross Margin for natural-gas assets | $ 616,373 | $ 596,459 | $ 2,411,438 | $ 2,067,528 | ||||
Adjusted Gross Margin for crude-oil and NGLs assets | 147,060 | 134,253 | 570,476 | 589,091 | ||||
Adjusted Gross Margin for produced-water assets | 104,964 | 96,782 | 394,879 | 307,228 | ||||
(1) | Includes (i) the |
(2) | Excludes corporate-level depreciation and amortization. |
Western Midstream Partners, LP RECONCILIATION OF GAAP TO NON-GAAP MEASURES (CONTINUED) (Unaudited) | ||||||||
Adjusted EBITDA | ||||||||
Three Months Ended | Year Ended | |||||||
thousands | December 31, | September 30, | December 31, | December 31, | ||||
Reconciliation of Net income (loss) to Adjusted EBITDA | ||||||||
Net income (loss) | $ 341,580 | $ 295,892 | $ 1,611,252 | $ 1,048,007 | ||||
Add: | ||||||||
Distributions from equity investments | 31,585 | 29,344 | 142,236 | 194,273 | ||||
Non-cash equity-based compensation expense | 9,421 | 8,759 | 37,994 | 32,005 | ||||
Interest expense | 99,336 | 94,149 | 378,513 | 348,228 | ||||
Income tax expense | 444 | 15,390 | 18,111 | 4,385 | ||||
Depreciation and amortization | 162,990 | 166,015 | 650,428 | 600,668 | ||||
Impairments | 2 | 4,651 | 6,206 | 52,884 | ||||
Other expense | 9 | 90 | 248 | 1,739 | ||||
Less: | ||||||||
Gain (loss) on divestiture and other, net | (2,655) | 467 | 296,771 | (10,102) | ||||
Gain (loss) on early extinguishment of debt | — | — | 5,403 | 15,378 | ||||
Equity income, net – related parties | 28,158 | 23,977 | 112,385 | 152,959 | ||||
Other income | 15,617 | 9,565 | 31,741 | 6,976 | ||||
Adjusted EBITDA attributable to noncontrolling interests (1) | 13,548 | 13,411 | 54,650 | 48,345 | ||||
Adjusted EBITDA | $ 590,699 | $ 566,870 | $ 2,344,038 | $ 2,068,633 | ||||
Reconciliation of Net cash provided by operating activities to Adjusted EBITDA | ||||||||
Net cash provided by operating activities | $ 554,446 | $ 551,288 | $ 2,136,860 | $ 1,661,334 | ||||
Interest (income) expense, net | 99,336 | 94,149 | 378,513 | 348,228 | ||||
Accretion and amortization of long-term obligations, net | (2,354) | (2,221) | (9,238) | (8,151) | ||||
Current income tax expense (benefit) | 411 | 1,471 | 3,900 | 3,341 | ||||
Other (income) expense, net | (15,617) | (9,565) | (31,741) | (5,679) | ||||
Distributions from equity investments in excess of cumulative earnings – related parties | 3,290 | 3,257 | 30,850 | 39,104 | ||||
Changes in assets and liabilities: | ||||||||
Accounts receivable, net | 30,203 | (12,683) | 42,798 | 78,346 | ||||
Accounts and imbalance payables and accrued liabilities, net | (56,949) | (8,161) | 21,935 | 68,019 | ||||
Other items, net | (8,519) | (37,254) | (175,189) | (67,564) | ||||
Adjusted EBITDA attributable to noncontrolling interests (1) | (13,548) | (13,411) | (54,650) | (48,345) | ||||
Adjusted EBITDA | $ 590,699 | $ 566,870 | $ 2,344,038 | $ 2,068,633 | ||||
Cash flow information | ||||||||
Net cash provided by operating activities | $ 554,446 | $ 551,288 | $ 2,136,860 | $ 1,661,334 | ||||
Net cash provided by (used in) investing activities | (230,321) | (190,701) | (39,168) | (1,607,291) | ||||
Net cash provided by (used in) financing activities | (358,398) | 420,031 | (1,280,015) | (67,912) | ||||
(1) | Includes (i) the |
Western Midstream Partners, LP RECONCILIATION OF GAAP TO NON-GAAP MEASURES (CONTINUED) (Unaudited) | ||||||||
Free Cash Flow | ||||||||
Three Months Ended | Year Ended | |||||||
thousands | December 31, | September 30, | December 31, | December 31, | ||||
Reconciliation of Net cash provided by operating activities to Free Cash Flow | ||||||||
Net cash provided by operating activities | $ 554,446 | $ 551,288 | $ 2,136,860 | $ 1,661,334 | ||||
Less: | ||||||||
Capital expenditures | 238,769 | 189,434 | 833,856 | 735,080 | ||||
Contributions to equity investments – related parties | 9,690 | — | 9,690 | 1,153 | ||||
Add: | ||||||||
Distributions from equity investments in excess of cumulative earnings – related parties | 3,290 | 3,257 | 30,850 | 39,104 | ||||
Free Cash Flow | $ 309,277 | $ 365,111 | $ 1,324,164 | $ 964,205 | ||||
Cash flow information | ||||||||
Net cash provided by operating activities | $ 554,446 | $ 551,288 | $ 2,136,860 | $ 1,661,334 | ||||
Net cash provided by (used in) investing activities | (230,321) | (190,701) | (39,168) | (1,607,291) | ||||
Net cash provided by (used in) financing activities | (358,398) | 420,031 | (1,280,015) | (67,912) | ||||
Western Midstream Partners, LP OPERATING STATISTICS (Unaudited) | ||||||||||||
Three Months Ended | Year Ended | |||||||||||
December 31, | September 30, | Inc/ (Dec) | December 31, | December 31, | Inc/ (Dec) | |||||||
Throughput for natural-gas assets (MMcf/d) | ||||||||||||
Gathering, treating, and transportation | 380 | 388 | (2) % | 453 | 435 | 4 % | ||||||
Processing | 4,464 | 4,298 | 4 % | 4,256 | 3,692 | 15 % | ||||||
Equity investments (1) | 550 | 503 | 9 % | 517 | 466 | 11 % | ||||||
Total throughput | 5,394 | 5,189 | 4 % | 5,226 | 4,593 | 14 % | ||||||
Throughput attributable to noncontrolling interests (2) | 181 | 173 | 5 % | 174 | 161 | 8 % | ||||||
Total throughput attributable to WES for natural-gas assets | 5,213 | 5,016 | 4 % | 5,052 | 4,432 | 14 % | ||||||
Throughput for crude-oil and NGLs assets (MBbls/d) | ||||||||||||
Gathering, treating, and transportation | 423 | 393 | 8 % | 397 | 332 | 20 % | ||||||
Equity investments (1) | 121 | 124 | (2) % | 144 | 333 | (57) % | ||||||
Total throughput | 544 | 517 | 5 % | 541 | 665 | (19) % | ||||||
Throughput attributable to noncontrolling interests (2) | 10 | 11 | (9) % | 11 | 13 | (15) % | ||||||
Total throughput attributable to WES for crude-oil and NGLs assets | 534 | 506 | 6 % | 530 | 652 | (19) % | ||||||
Throughput for produced-water assets (MBbls/d) | ||||||||||||
Gathering and disposal | 1,216 | 1,121 | 8 % | 1,147 | 1,029 | 11 % | ||||||
Throughput attributable to noncontrolling interests (2) | 25 | 22 | 14 % | 23 | 20 | 15 % | ||||||
Total throughput attributable to WES for produced-water assets | 1,191 | 1,099 | 8 % | 1,124 | 1,009 | 11 % | ||||||
Per-Mcf Gross margin for natural-gas assets (3) | $ 1.08 | $ 1.07 | 1 % | $ 1.08 | $ 1.04 | 4 % | ||||||
Per-Bbl Gross margin for crude-oil and NGLs assets (3) | 2.16 | 2.05 | 5 % | 2.00 | 1.52 | 32 % | ||||||
Per-Bbl Gross margin for produced-water assets (3) | 0.82 | 0.81 | 1 % | 0.81 | 0.69 | 17 % | ||||||
Per-Mcf Adjusted Gross Margin for natural-gas assets (4) | $ 1.29 | $ 1.29 | — % | $ 1.30 | $ 1.28 | 2 % | ||||||
Per-Bbl Adjusted Gross Margin for crude-oil and NGLs assets (4) | 3.00 | 2.88 | 4 % | 2.94 | 2.48 | 19 % | ||||||
Per-Bbl Adjusted Gross Margin for produced-water assets (4) | 0.96 | 0.96 | — % | 0.96 | 0.83 | 16 % | ||||||
(1) | Represents our share of average throughput for investments accounted for under the equity method of accounting. |
(2) | Includes (i) the |
(3) | Average for period. Calculated as Gross margin for natural-gas assets, crude-oil and NGLs assets, or produced-water assets, divided by the respective total throughput (MMcf or MBbls) for natural-gas assets, crude-oil and NGLs assets, or produced-water assets. |
(4) | Average for period. Calculated as Adjusted Gross Margin for natural-gas assets, crude-oil and NGLs assets, or produced-water assets, divided by the respective total throughput (MMcf or MBbls) attributable to WES for natural-gas assets, crude-oil and NGLs assets, or produced-water assets. |
Western Midstream Partners, LP OPERATING STATISTICS (CONTINUED) (Unaudited) | ||||||||||||
Three Months Ended | Year Ended | |||||||||||
December 31, | September 30, | Inc/ (Dec) | December 31, | December 31, | Inc/ (Dec) | |||||||
Throughput for natural-gas assets (MMcf/d) | ||||||||||||
Operated | ||||||||||||
1,973 | 1,889 | 4 % | 1,871 | 1,635 | 14 % | |||||||
DJ Basin | 1,502 | 1,418 | 6 % | 1,436 | 1,322 | 9 % | ||||||
488 | 505 | (3) % | 456 | 120 | NM | |||||||
Other | 881 | 874 | 1 % | 908 | 930 | (2) % | ||||||
Total operated throughput for natural-gas assets | 4,844 | 4,686 | 3 % | 4,671 | 4,007 | 17 % | ||||||
Non-operated | ||||||||||||
Equity investments | 550 | 503 | 9 % | 517 | 466 | 11 % | ||||||
Other | — | — | — % | 38 | 120 | (68) % | ||||||
Total non-operated throughput for natural-gas assets | 550 | 503 | 9 % | 555 | 586 | (5) % | ||||||
Total throughput for natural-gas assets | 5,394 | 5,189 | 4 % | 5,226 | 4,593 | 14 % | ||||||
Throughput for crude-oil and NGLs assets (MBbls/d) | ||||||||||||
Operated | ||||||||||||
260 | 246 | 6 % | 243 | 214 | 14 % | |||||||
DJ Basin | 102 | 87 | 17 % | 92 | 71 | 30 % | ||||||
27 | 26 | 4 % | 25 | 5 | NM | |||||||
Other | 34 | 34 | — % | 37 | 42 | (12) % | ||||||
Total operated throughput for crude-oil and NGLs assets | 423 | 393 | 8 % | 397 | 332 | 20 % | ||||||
Non-operated | ||||||||||||
Equity investments | 121 | 124 | (2) % | 144 | 333 | (57) % | ||||||
Total non-operated throughput for crude-oil and NGLs assets | 121 | 124 | (2) % | 144 | 333 | (57) % | ||||||
Total throughput for crude-oil and NGLs assets | 544 | 517 | 5 % | 541 | 665 | (19) % | ||||||
Throughput for produced-water assets (MBbls/d) | ||||||||||||
Operated | ||||||||||||
1,216 | 1,121 | 8 % | 1,147 | 1,029 | 11 % | |||||||
Total operated throughput for produced-water assets | 1,216 | 1,121 | 8 % | 1,147 | 1,029 | 11 % | ||||||
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SOURCE Western Midstream Partners, LP
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