01—Abstract
Summary
Summary of the 10-Q filed August 7, 2024. Cited figures are marked; the original filing is the authoritative source.
Western Midstream Partners, LP (WES) reported second-quarter 2024 results in this Form 10-Q.
Total revenues and other were $905.6 milliona for the three months ended June 30, 2024, compared with $738.3 million a year earlier, and $1.79 billion for the six months ended June 30, 2024, versus $1.47 billion in the prior-year period. Net income attributable to Western Midstream Partners, LP was $378.6 million for the quarter ($0.97 per common unit, diluted) and $951.5 million for the six months ($2.43 per common unit, diluted). Results for the first half were lifted by net gains on divestiture of $298.96 million, primarily from the first-quarter sale of several equity investments (Mont Belvieu JV, Whitethorn LLC, Panola and Saddlehorn) and the second-quarter sale of the 33.75% Marcellus Interest systems.
Adjusted EBITDA was $578.1 millionb for the quarter and $1.19 billion for the six months, while free cash flow was $424.8 million for the quarter and $649.8 million for the six months. Net cash provided by operating activities was $1.03 billion for the six months. Capital expenditures were $405.7 million for the six months, led by the West Texas complex, including engineering and equipment milestone payments for the North Loving Plant.
Debt carrying value was $7.1 billionc at June 30, 2024, with $2.0 billion of effective borrowing capacity under the revolving credit facility and no commercial paper outstanding. The Board declared a second-quarter 2024 distribution of $0.875 per unit, unchanged from the first quarter, totaling $340.9 million. Throughput attributable to WES for natural-gas assets was 4,988 MMcf/d for the quarter and 4,989 MMcf/d for the six months, while crude-oil and NGL throughput declined to 515 MBbls/d for the quarter, reflecting divestitures.
Produced-water throughput was 1,080 MBbls/d for the quarter. Management reported that disclosure controls were effective as of June 30, 2024.
02—Key points
Key Highlights
- Net income attributable to Western Midstream Partners, LP was $378.6 million for Q2 2024 ($0.97 per diluted common unit), versus $252.9 million in Q2 2023; six-month net income was $951.5 million ($2.43 per diluted unit).
- Total revenues and other rose to $905.6 million in Q2 2024 from $738.3 million in Q2 2023, and to $1.79 billion for the six months from $1.47 billion.
- Adjusted EBITDA was $578.1 million in Q2 2024 and $1.19 billion for the six months, compared with $987.0 million for the six months of 2023.
- Free cash flow was $424.8 million in Q2 2024 and $649.8 million for the six months, versus $481.7 million in the first half of 2023.
- Divestitures generated a gain on divestiture and other, net of $298.96 million for the six months, including a $239.7 million net gain from the Q1 2024 sale of several equity investments and a $63.9 million net gain on the Marcellus Interest sale in Q2 2024.
- Q2 2024 distribution of $0.875 per unit ($340.9 million) was unchanged from Q1 2024; a $150.0 million senior note repurchase was completed during the first half of 2024.
- Total long-term and short-term debt carrying value was $7.1 billion at June 30, 2024, with $2.0 billion of effective RCF borrowing capacity and no commercial paper outstanding.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2024filed August 7, 2024Financial Statements
Q2 FY2024 against Q2 FY2023
| Line item | Q2 FY2024Q2 FY2023 | Change |
|---|---|---|
| Revenue | $905.36M$738.12M | +22.7% |
| Operating Expenses | $522.65M$443.86M | +17.8% |
| Operating Income | $469.75M$336.67M | +39.5% |
| Interest Expense | $90.52M$86.18M | +5.0% |
| Net Income | $378.65M$252.92M | +49.7% |
| EPS (Basic) | $0.97$0.64 | +51.6% |
| EPS (Diluted) | $0.97$0.64 | +51.6% |
05—Questions
Frequently Asked Questions
What drove the increase in Western Midstream's second-quarter revenue and profitability?
Total revenues and other increased to $905.6 million in Q2 2024 from $738.3 million in Q2 2023. Service revenues – fee based were $793.8 million versus $661.5 million, with the filing citing increased throughput at the West Texas and DJ Basin complexes. Net income attributable to Western Midstream Partners, LP rose to $378.6 million from $252.9 million, aided by a $59.3 million gain on divestiture and other, net in the quarter.
Did the company sell assets in 2024, and how did that affect results?
Yes. In Q1 2024 the company sold its interests in Mont Belvieu JV (25%), Whitethorn LLC (20%), Panola (15%) and Saddlehorn (20%) for combined proceeds of $588.6 million, recording a net gain of $239.7 million. In Q2 2024 it sold its 33.75% interest in the Marcellus Interest systems for $206.2 million, recording a net gain of $63.9 million. The filing notes that these sales reduced equity income and crude-oil and NGL throughput.
How is the company's cash flow and distribution position?
Net cash provided by operating activities was $1.03 billion for the six months ended June 30, 2024, versus $793.2 million a year earlier. Distributions to Partnership unitholders totaled $564.3 million for the six months in the cash flow statement. The Board declared a $0.875 per unit distribution for Q2 2024, payable August 14, 2024, totaling $340.9 million, unchanged from Q1 2024. Free cash flow was $649.8 million for the six months.
What is the debt and liquidity picture at June 30, 2024?
Total debt carrying value was $7.1 billion, and WES Operating had $2.0 billion of effective borrowing capacity under its $2.0 billion revolving credit facility, with no outstanding borrowings or letters of credit. Commercial paper borrowings were fully repaid during the first half, with net repayments of $610.3 million. During the first half, WES Operating repurchased and retired $150.0 million of senior notes and recognized a $5.4 million gain. The RCF maturity was extended from April 2028 to April 2029 for extending lenders.
What are the main operating trends investors should watch?
Natural-gas throughput attributable to WES was 4,988 MMcf/d in Q2 2024, flat with Q1 2024 and up 19% versus the six months ended June 30, 2023. Crude-oil and NGL throughput attributable to WES fell 9% sequentially to 515 MBbls/d, mainly from divestitures. Produced-water throughput was 1,080 MBbls/d, down 4% sequentially. Adjusted EBITDA declined 5% sequentially to $578.1 million, primarily due to higher operation and maintenance expenses and lower distributions from equity investments.
06—Continue