01—Abstract
Summary
Summary of the 10-Q filed May 7, 2025. Cited figures are marked; the original filing is the authoritative source.
Western Midstream Partners, LP (WES) reported first-quarter 2025 net income attributable to Western Midstream Partners, LP of $309.0 milliona, or $0.79 per common unit (diluted), compared with $572.8 million, or $1.47 per unit, in the first quarter of 2024.
The prior-year period included a $239.6 millionb gain on divestiture and other, net, tied to the sale of equity investments in the first quarter of 2024, which accounts for much of the year-over-year decline. Total revenues and other rose to $917.1 million from $887.7 million, with fee-based service revenues of $823.2 million versus $781.3 million. Adjusted EBITDA was $593.6 million compared with $608.4 million a year earlier, and Adjusted Gross Margin was $860.8 million versus $845.1 million.
Operation and maintenance expense increased to $226.5 millionc from $194.9 million. Cash flow and liquidity improved: net cash provided by operating activities was $530.8 million versus $399.7 million, and Free Cash Flow was $399.4 million compared with $225.0 million in the prior-year quarter, mainly reflecting lower capital expenditures of $142.4 million versus $193.8 million. Cash and cash equivalents fell to $448.4 million from $1.09 billion at year-end 2024, as WES retired the $663.8 million principal of its 3.100% Senior Notes due 2025 at maturity.
Total debt carrying value was $7.3 billiond, with $336.8 million of senior notes due within the next year, and the $2.0 billion revolving credit facility was undrawn with no commercial paper outstanding. The Board declared a first-quarter 2025 distribution of $0.910 per unit, up from $0.875, totaling $355.3 million, and authorized a $250.0 million unit buyback through December 31, 2026, under which no units had been repurchased as of March 31, 2025. The filing also flags concentration and contractual risk: Occidental is the only customer exceeding 10% of consolidated revenues, and the Partnership is discussing with Occidental differing interpretations of the cost-of-service rate calculation under an oil-gathering contract for the DJ Basin system.
The filing states that an adverse resolution could reduce rates and result in a non-cash charge to earnings. Throughput attributable to WES for natural-gas assets was 5,110 MMcf/d, up 2% from the prior-year quarter, with the North Loving plant start-up adding 250 MMcf/d of processing capacity at the West Texas complex in late February 2025.
02—Key points
Key Highlights
- Net income attributable to Western Midstream Partners, LP was $309.0 million ($0.79 per common unit, diluted), down from $572.8 million ($1.47 per unit) in Q1 2024, which included a $239.6 million gain on divestiture and other, net.
- Total revenues and other increased to $917.1 million from $887.7 million, led by fee-based service revenues of $823.2 million versus $781.3 million.
- Adjusted EBITDA was $593.6 million versus $608.4 million a year earlier, and Adjusted Gross Margin was $860.8 million versus $845.1 million.
- Net cash provided by operating activities rose to $530.8 million from $399.7 million, and Free Cash Flow was $399.4 million versus $225.0 million, aided by capital expenditures of $142.4 million versus $193.8 million.
- WES retired the $663.8 million 3.100% Senior Notes due 2025 at maturity; the $2.0 billion revolving credit facility was undrawn with no commercial paper outstanding at March 31, 2025.
- The Board declared a Q1 2025 distribution of $0.910 per unit, up from $0.875 per unit, totaling $355.3 million, and authorized a $250.0 million unit buyback through December 31, 2026, with no repurchases made in the quarter.
- Occidental is the only customer above 10% of consolidated revenues; a DJ Basin oil-gathering rate dispute with Occidental could, if resolved adversely, reduce rates and cause a non-cash charge to earnings.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2025filed May 7, 2025Financial Statements
Q1 FY2025 against Q1 FY2024
| Line item | Q1 FY2025Q1 FY2024 | Change |
|---|---|---|
| Revenue | $916.92M$887.29M | +3.3% |
| Operating Expenses | $523.08M$480.79M | +8.8% |
| Operating Income | $409.80M$679.37M | −39.7% |
| Interest Expense | $97.29M$94.51M | +2.9% |
| Net Income | $309.01M$572.83M | −46.1% |
| EPS (Basic) | $0.79$1.47 | −46.3% |
| EPS (Diluted) | $0.79$1.47 | −46.3% |
05—Questions
Frequently Asked Questions
Why did net income decline so sharply year over year?
Net income attributable to Western Midstream Partners, LP fell to $309.0 million from $572.8 million. The filing attributes much of the decline to the first quarter of 2024, which included a $239.6 million gain on divestiture and other, net, from selling interests in Mont Belvieu JV, Whitethorn LLC, Panola, and Saddlehorn. Gain (loss) on divestiture and other, net was a loss of $4.7 million in Q1 2025.
How did cash generation and free cash flow change?
Net cash provided by operating activities was $530.8 million, up from $399.7 million. Free Cash Flow, a non-GAAP measure defined in the filing, was $399.4 million compared with $225.0 million, reflecting lower capital expenditures of $142.4 million versus $193.8 million.
What is the status of debt and liquidity?
Total debt carrying value was $7.3 billion at March 31, 2025. WES Operating repaid the $663.8 million 3.100% Senior Notes due 2025 and had $336.8 million of senior notes due within the next year, which it intends to repay with cash on hand, including proceeds from its $800.0 million 5.450% Senior Notes due 2034. Cash and cash equivalents were $448.4 million, and the $2.0 billion revolving credit facility had no outstanding borrowings.
What are the distribution and buyback plans?
The Board declared a first-quarter 2025 distribution of $0.910 per unit, totaling $355.3 million, payable May 15, 2025, to unitholders of record on May 2, 2025. The Board also authorized a buyback of up to $250.0 million of common units through December 31, 2026, and no units were repurchased during the first quarter.
What key risks does the filing highlight?
Occidental is the only customer exceeding 10% of consolidated revenues, and the filing notes ongoing discussions with Occidental over the calculation of cost-of-service rates under a DJ Basin oil-gathering contract. If resolved adversely, the filing says this could reduce rates and result in a non-cash charge to earnings. The filing also notes that commodity price volatility and tariffs could affect costs, though a 10% change in commodity prices would not have a material impact on operating income over the next 12 months.
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