01—Abstract
Summary
Summary of the 10-Q filed November 6, 2024. Cited figures are marked; the original filing is the authoritative source.
Western Midstream Partners, LP (WES) reported third-quarter 2024 results in this Form 10-Q.
For the three months ended September 30, 2024, total revenues and other were $883.4 milliona, operating income was $395.9 million, and net income was $295.9 million, compared with net income of $284.4 million in the same period of 2023. For the nine months ended September 30, 2024, net income was $1.27 billion, which includes a $299.4 million gain on divestiture and other, net, largely from the first-quarter sale of several equity investments and the second-quarter sale of the Marcellus Interest systems. Adjusted EBITDA was $566.9 million for the quarter and $1.75 billion for the nine months, and free cash flow was $1.01 billion for the nine months versus $682.2 million a year earlier.
The balance sheet shows cash and cash equivalents of $1.12 billionb at September 30, 2024, up from $272.8 million at year-end 2023, with total debt carrying value of $7.9 billion. WES Operating issued $800.0 million of 5.450% Senior Notes due 2034 in the third quarter and plans to use the proceeds to repay part of the 2025 maturities. Commercial paper of $610.3 million was repaid during the period, and $2.0 billion of revolving credit capacity was undrawn at quarter-end.
Distributions of $0.875c per unit were declared for the third quarter, totaling $340.9 million, payable November 14, 2024. The filing notes that Occidental Petroleum is the general partner's parent and the largest source of related-party revenue, and that the company is discussing contract interpretations with Occidental regarding cost-of-service rates for the DJ Basin oil-gathering system.
A negative resolution could reduce rates and result in a non-cash charge. Throughput attributable to WES for natural-gas assets was 5,016 MMcf/d for the quarter, and $627.8 milliond remained under the $1.25 billion unit repurchase program.
02—Key points
Key Highlights
- Q3 2024 net income of $295.9 million versus $284.4 million in Q3 2023; total revenues and other of $883.4 million versus $776.0 million
- Nine-month net income of $1.27 billion, including a $299.4 million gain on divestiture and other, net, from first-quarter equity investment sales and the second-quarter Marcellus Interest sale
- Adjusted EBITDA of $566.9 million for Q3 2024 and $1.75 billion for the nine months ended September 30, 2024, versus $1.50 billion a year earlier
- Free cash flow of $1.01 billion for the nine months ended September 30, 2024, versus $682.2 million for the same period in 2023
- Cash and cash equivalents rose to $1.12 billion at September 30, 2024, from $272.8 million at December 31, 2023, with no outstanding RCF borrowings and $2.0 billion of effective RCF capacity
- WES Operating issued $800.0 million of 5.450% Senior Notes due 2034 and repurchased $150.0 million of senior notes; $610.3 million of commercial paper was repaid
- Third-quarter distribution of $0.875 per unit ($340.9 million aggregate), unchanged from the prior quarter and payable November 14, 2024
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2024filed November 6, 2024Financial Statements
Q3 FY2024 against Q3 FY2023
| Line item | Q3 FY2024Q3 FY2023 | Change |
|---|---|---|
| Revenue | $883.11M$775.64M | +13.9% |
| Operating Expenses | $511.94M$449.26M | +14.0% |
| Operating Income | $395.87M$360.76M | +9.7% |
| Interest Expense | $94.15M$82.75M | +13.8% |
| Net Income | $288.48M$277.30M | +4.0% |
| EPS (Basic) | $0.74$0.71 | +4.2% |
| EPS (Diluted) | $0.74$0.70 | +5.7% |
05—Questions
Frequently Asked Questions
Is the quarterly distribution changing?
No. The Board declared a third-quarter 2024 distribution of $0.875 per unit, unchanged from the second quarter, totaling $340.9 million, payable November 14, 2024 to unitholders of record on November 1, 2024.
Why did net income increase so much for the nine months ended September 30, 2024?
Net income for the nine months rose to $1.27 billion from $752.3 million, primarily due to a $428.5 million increase in total revenues and other and a $303.1 million increase in gain on divestiture and other, net. These were partly offset by higher operating expenses, lower equity income and higher interest expense.
How much debt does WES have and what changed in the quarter?
Total debt carrying value was $7.9 billion at September 30, 2024. WES Operating issued $800.0 million of 5.450% Senior Notes due 2034, with proceeds to be used to repay part of the 3.100% and 3.950% Senior Notes due 2025, which are now classified as short-term debt. Commercial paper of $610.3 million was repaid during the nine months, and no commercial paper was outstanding at quarter-end.
What is the main related-party risk disclosed?
Occidental is the only customer with more than 10% of consolidated revenues and is the parent of the general partner. The company is discussing differing interpretations of cost-of-service rate calculations under an oil-gathering contract for the DJ Basin system with Occidental. An adverse resolution could reduce rates and cause a non-cash charge to earnings.
How much capital is the company spending and what are its buyback options?
Capital expenditures were $595.1 million for the nine months ended September 30, 2024, primarily for West Texas, DBM oil, Powder River Basin, DBM water, DJ Basin and Chipeta projects. Under the $1.25 billion unit repurchase program, which runs through December 31, 2024, no units were repurchased in the nine months and $627.8 million remained authorized.
06—Continue