PR Newswire | May 10, 2021 04:06PM EDT

05/10 15:05 CDT

Western Midstream Announces First-Quarter 2021 Results HOUSTON, May 10, 2021

HOUSTON, May 10, 2021 /PRNewswire/ -- Today Western Midstream Partners, LP (NYSE: WES) ("WES" or the "Partnership") announced first-quarter 2021 financial and operating results. Net income (loss) available to limited partners for the first quarter of 2021 totaled $181.8 million, or $0.44 per common unit (diluted), with first-quarter 2021 Adjusted EBITDA(1) totaling $443.1 million, first-quarter 2021 Cash flows provided by operating activities totaling $261.6 million, and first-quarter 2021 Free cash flow(1) totaling $213.8 million.

RECENT HIGHLIGHTS

* Awarded first place in the division-one category by the GPA Midstream Association for outstanding safety performance in 2020 * Repaid the 5.375% Senior Notes due 2021 at par value, for total consideration of $431 million * Repurchased 1,115,808 common units for aggregate consideration of approximately $16.2 million during the first quarter as part of the recently announced buyback program of up to $250 million of the Partnership's common units through December 31, 2021

___________________________

^ Please see the definitions of the Partnership's non-GAAP measures at the(1) end of this release and reconciliation of GAAP to non-GAAP measures.

On May 14, 2021, WES will pay its first-quarter 2021 per-unit distribution of $0.315, which represents a 1.3-percent increase over the prior quarter's distribution and is consistent with an annualized distribution growth of 5-percent. First-quarter 2021 Free cash flow after distributions totaled $82.5 million.

"Thanks to the dedication of our employees, we ended the first quarter by winning GPA Midstream Association's first-place safety award in the large category for the second consecutive year," said Michael Ure, President, Chief Executive Officer and Chief Financial Officer. "I'm proud of our team's work to strengthen our safety culture and environmental performance while providing continuous, reliable service for our customers."

Mr. Ure continued, "Although our first-quarter results were impacted from Winter Storm Uri, we remain optimistic about current activity levels in the Delaware and DJ basins and expect total throughput and EBITDA to increase through the remainder of 2021 and into 2022. We remain comfortable with our previously-stated full-year guidance targets."

"Since becoming a standalone organization, we have been immensely focused on our financial policy. This shift to free-cash-flow generation has led to a trifecta of results, including the authorization of a unit buyback program, retirement of upcoming debt maturities, and an increase in our distribution. Through the unit buyback program and Anadarko note exchange, we have repurchased 31.34 million units to date, which represents over 7-percent of our outstanding units as of the filing of our second-quarter 2020 10-Q. We believe our ability to generate significant free cash flow will continue to deliver value to our stakeholders for the foreseeable future."

As a result of depressed upstream investment in 2020 and Winter Storm Uri, our first-quarter 2021 volumes declined relative to fourth-quarter 2020. First-quarter 2021 total natural-gas throughput(1) averaged 4.0 Bcf/d, representing a 2-percent sequential-quarter increase. Declining natural-gas volumes were offset by an additional third-party connection to Latham II at the DJ Basin complex beginning January 1, 2021. First-quarter 2021 total throughput for crude-oil and NGLs assets(1) averaged 604 MBbls/d, representing a 2-percent sequential-quarter decrease. First-quarter 2021 total throughput for produced-water assets(1) averaged 595 MBbls/d, representing a 9-percent sequential-quarter decrease.

First-quarter 2021 capital expenditures(2) totaled $58.3 million.

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^ Represents total throughput attributable to WES, which excludes (i) the(1) 2.0% Occidental subsidiary-owned limited partner interest in WES Operating and (ii) for natural-gas throughput, the 25% third-party interest in Chipeta, which collectively represent WES's noncontrolling interests.

^ Accrual-based, includes equity investments, excludes capitalized interest,(2) and excludes capital expenditures associated with the 25% third-party interest in Chipeta.

CONFERENCE CALL TOMORROW AT 2:00 P.M. CDTWES will host a conference call on Tuesday, May 11, 2021, at 2:00 p.m. Central Daylight Time (3:00 p.m. Eastern Daylight Time) to discuss first-quarter 2021 results. To participate, individuals should dial 877-883-0383 (Domestic) or 412-902-6506 (International) 15 minutes before the scheduled conference call time and enter participant access code 7924735. 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 replay of the conference call also will be available on the website following the call.

ABOUT WESTERN MIDSTREAMWestern Midstream Partners, LP ("WES") is a Delaware master limited partnership formed to acquire, own, develop, and operate midstream assets. With midstream assets located in Texas, New Mexico, Colorado, Utah, Wyoming, and Pennsylvania, WES is engaged in the business of gathering, compressing, treating, processing, and transporting natural gas; gathering, stabilizing, and transporting condensate, natural-gas liquids, and crude oil; and gathering and disposing of produced water for its customers. In its capacity as a natural-gas processor, WES also buys and sells natural gas, natural-gas liquids, and condensate on behalf of itself and as an agent for its customers under certain contracts.

For more information about Western Midstream Partners, LP, 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; the ultimate impact of efforts to fight COVID-19 on the global economy and the timeline for a recovery in commodity demand and prices; 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; 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 and Form 10-Q 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.

WESTERN MIDSTREAM CONTACTSKristen ShultsVice President, Investor Relations and CommunicationsKristen.Shults@westernmidstream.com832.636.6000

Abby DempseyInvestor Relations SupervisorAbby.Dempsey@westernmidstream.com832.636.6000

Western Midstream Partners, LPRECONCILIATION 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 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. Management considers Free cash flow an appropriate metric for assessing capital discipline, cost efficiency, and balance-sheet strength. Although Free cash flow is the metric used to assess WES's ability to make distributions to unitholders, this measure should not be viewed as indicative of the actual amount of cash that is available for distributions or planned for distributions for a given period. Instead, Free cash flow should be considered indicative of the amount of cash that is available for distributions, debt repayments, and other general partnership purposes.

Below are reconciliations of (i) operating income (loss) (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 operating income (loss) or cash flows provided by operating activities.

Western Midstream Partners, LP

RECONCILIATION OF GAAP TO NON-GAAP MEASURES (CONTINUED)



Adjusted Gross Margin

Three Months Ended

thousands March 31, December 31, 2021 2020

Reconciliation of Operating income (loss) to Adjusted gross margin

Operating income (loss) $292,336$372,954

Add:

Distributions from equity investments 61,189 69,231

Operation and maintenance 140,332 144,204

General and administrative 45,116 37,303

Property and other taxes 14,384 11,077

Depreciation and amortization 130,553 106,398

Impairments 14,866 3,314

Less:

Gain (loss) on divestiture and other, net (583) 12,285

Equity income, net - related parties 52,165 49,962

Reimbursed electricity-related charges recorded as revenues 17,312 18,161

Adjusted gross margin attributable to noncontrolling interests ^(1)15,258 15,669

Adjusted gross margin $614,624$648,404

Adjusted gross margin for natural-gas assets $432,389$436,294

Adjusted gross margin for crude-oil and NGLs assets 133,145 152,909

Adjusted gross margin for produced-water assets 49,090 59,201

For all periods presented, includes (i) the 25% third-party interest in^ Chipeta and (ii) the 2.0% Occidental subsidiary-owned limited partner(1) interest in WES Operating, which collectively represent WES's noncontrolling interests.

Western Midstream Partners, LP

RECONCILIATION OF GAAP TO NON-GAAP MEASURES (CONTINUED)



Adjusted EBITDA

Three Months Ended

thousands March 31, December 31, 2021 2020

Reconciliation of Net income (loss) to Adjusted EBITDA

Net income (loss) $191,235$270,776

Add:

Distributions from equity investments 61,189 69,231

Non-cash equity-based compensation expense 6,734 5,935

Interest expense 98,493 101,247

Income tax expense 1,112 2,206

Depreciation and amortization 130,553 106,398

Impairments 14,866 3,314

Other expense 1,218 -

Less:

Gain (loss) on divestiture and other, net (583) 12,285

Gain (loss) on early extinguishment of debt (289) 862

Equity income, net - related parties 52,165 49,962

Other income - 412

Adjusted EBITDA attributable to noncontrolling interests^ (1) 10,997 11,606

Adjusted EBITDA $443,110$483,980

Reconciliation of Net cash provided by operating activities to Adjusted EBITDA

Net cash provided by operating activities $261,550$505,525

Interest (income) expense, net 98,493 101,247

Accretion and amortization of long-term obligations, net (2,088) (2,172)

Current income tax expense (benefit) 555 1,303

Other (income) expense, net 1,207 (413)

Cash paid to settle interest-rate swaps - 6,440

Distributions from equity investments in excess of cumulative earnings - 12,141 10,410 related parties

Changes in assets and liabilities:

Accounts receivable, net 30,182 1,350

Accounts and imbalance payables and accrued liabilities, net 16,467 (106,623)

Other items, net 35,600 (21,481)

Adjusted EBITDA attributable to noncontrolling interests^ (1) (10,997) (11,606)

Adjusted EBITDA $443,110$483,980

Cash flow information

Net cash provided by operating activities $261,550

Net cash used in investing activities (46,472)

Net cash provided by (used in) financing activities (603,624)

For all periods presented, includes (i) the 25% third-party interest in^ Chipeta and (ii) the 2.0% Occidental subsidiary-owned limited partner(1) interest in WES Operating, which collectively represent WES's noncontrolling interests.

Western Midstream Partners, LP

RECONCILIATION OF GAAP TO NON-GAAP MEASURES (CONTINUED)



Free Cash Flow

Three Months Ended

thousands March 31, December 31, 2021 2020

Reconciliation of Net cash provided by operating activities to Free cash flow

Net cash provided by operating activities $261,550$505,525

Less:

Capital expenditures 59,783 50,829

Contributions to equity investments - related parties 86 371

Add:

Distributions from equity investments in excess of cumulative earnings - 12,141 10,410 related parties

Free cash flow $213,822$464,735

Cash flow information

Net cash provided by operating activities $261,550

Net cash used in investing activities (46,472)

Net cash provided by (used in) financing activities (603,624)

Western Midstream Partners, LP

OPERATING STATISTICS

(Unaudited)



Three Months Ended

March 31,December 31, 2021 2020

Throughput for natural-gas assets (MMcf/d)

Gathering, treating, and transportation 519 521

Processing 3,237 3,170

Equity investments ^(1) 439 429

Total throughput 4,195 4,120

Throughput attributable to noncontrolling interests ^(2) 150 149

Total throughput attributable to WES for natural-gas assets 4,045 3,971

Throughput for crude-oil and NGLs assets (MBbls/d)

Gathering, treating, and transportation 279 292

Equity investments ^(3) 337 339

Total throughput 616 631

Throughput attributable to noncontrolling interests ^(2) 12 12

Total throughput attributable to WES for crude-oil and NGLs assets604 619

Throughput for produced-water assets (MBbls/d)

Gathering and disposal 607 670

Throughput attributable to noncontrolling interests ^(2) 12 13

Total throughput attributable to WES for produced-water assets 595 657

Per-Mcf Adjusted gross margin for natural-gas assets^ (4) $1.19 $ 1.19

Per-Bbl Adjusted gross margin for crude-oil and NGLs assets^ (5) 2.45 2.69

Per-Bbl Adjusted gross margin for produced-water assets^ (6) 0.92 0.98



^ Represents the 14.81% share of average Fort Union throughput (until(1) divested in October 2020), 22% share of average Rendezvous throughput, 50% share of average Mi Vida and Ranch Westex throughput, and 30% share of average Red Bluff Express throughput.

^ For all periods presented, includes (i) the 2.0% Occidental(2) subsidiary-owned limited partner interest in WES Operating and (ii) for natural-gas assets, the 25% third-party interest in Chipeta, which collectively represent WES's noncontrolling interests.

^ Represents the 10% share of average White Cliffs throughput; 25% share of(3) average Mont Belvieu JV throughput; 20% share of average TEG, TEP, Whitethorn, and Saddlehorn throughput; 33.33% share of average FRP throughput; and 15% share of average Panola and Cactus II throughput.

^ Average for period. Calculated as Adjusted gross margin for natural-gas(4) assets, divided by total throughput (MMcf/d) attributable to WES for natural-gas assets.

^ Average for period. Calculated as Adjusted gross margin for crude-oil and(5) NGLs assets, divided by total throughput (MBbls/d) attributable to WES for crude-oil and NGLs assets.

^ Average for period. Calculated as Adjusted gross margin for produced-water(6) assets, divided by total throughput (MBbls/d) attributable to WES for produced-water assets.

Western Midstream Partners, LP

OPERATING STATISTICS (CONTINUED)

(Unaudited)



Three Months Ended

March 31,December 31, 2021 2020

Throughput for natural-gas assets (MMcf/d)

Delaware Basin 1,133 1,196

DJ Basin 1,344 1,197

Equity investments 439 429

Other 1,279 1,298

Total throughput for natural-gas assets 4,195 4,120

Throughput for crude-oil and NGLs assets (MBbls/d)

Delaware Basin 162 178

DJ Basin 82 78

Equity investments 337 339

Other 35 36

Total throughput for crude-oil and NGLs assets 616 631

Throughput for produced-water assets (MBbls/d)

Delaware Basin 607 670

Total throughput for produced-water assets 607 670

Western Midstream Partners, LP

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)



Three Months Ended March 31,

thousands except per-unit amounts 2021 2020

Revenues and other

Service revenues - fee based $572,275$701,396

Service revenues - product based 31,652 15,921

Product sales 70,805 56,649

Other 242 347

Total revenues and other 674,974 774,313

Equity income, net - related parties 52,165 61,347

Operating expenses

Cost of product 88,969 103,270

Operation and maintenance 140,332 159,191

General and administrative 45,116 40,465

Property and other taxes 14,384 18,476

Depreciation and amortization 130,553 132,319

Long-lived asset and other impairments 14,866 155,785

Goodwill impairment - 441,017

Total operating expenses 434,220 1,050,523

Gain (loss) on divestiture and other, net (583) (40)

Operating income (loss) 292,336 (214,903)

Interest income - Anadarko note receivable - 4,225

Interest expense (98,493) (88,586)

Gain (loss) on early extinguishment of debt (289) 7,345

Other income (expense), net^ (1) (1,207) (1,761)

Income (loss) before income taxes 192,347 (293,680)

Income tax expense (benefit) 1,112 (4,280)

Net income (loss) 191,235 (289,400)

Net income (loss) attributable to noncontrolling interests 5,444 (32,873)

Net income (loss) attributable to Western Midstream Partners, LP$185,791$(256,527)

Limited partners' interest in net income (loss):

Net income (loss) attributable to Western Midstream Partners, LP$185,791$(256,527)

General partner interest in net (income) loss (3,993) 5,131

Limited partners' interest in net income (loss) $181,798$(251,396)

Net income (loss) per common unit - basic and diluted $0.44 $(0.57)

Weighted-average common units outstanding - basic and diluted 413,104 443,971

Western Midstream Partners, LP

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)



thousands except number of units March 31, December 31, 2021 2020

Total current assets $611,160 $943,064

Net property, plant, and equipment 8,639,538 8,709,945

Other assets 2,184,345 2,177,018

Total assets $11,435,043$11,830,027

Total current liabilities $490,262 $960,935

Long-term debt 7,416,001 7,415,832

Asset retirement obligations 267,962 260,283

Other liabilities 318,698 297,765

Total liabilities 8,492,923 8,934,815

Equity and partners' capital

Common units (413,062,133 and 413,839,863 units issued and outstanding at March 31, 2021, 2,821,455 2,778,339 and December 31, 2020, respectively)

General partner units (9,060,641 units issued and outstanding at March 31, 2021, and (16,033) (17,208) December 31, 2020)

Noncontrolling interests 136,698 134,081

Total liabilities, equity, and partners' capital $11,435,043$11,830,027

Western Midstream Partners, LP

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)



Three Months Ended March 31,

thousands 2021 2020

Cash flows from operating activities

Net income (loss) $191,235 $(289,400)

Adjustments to reconcile net income (loss) to net cash provided by operating activities and changes in assets and liabilities:

Depreciation and amortization 130,553 132,319

Long-lived asset and other impairments 14,866 155,785

Goodwill impairment - 441,017

(Gain) loss on divestiture and other, net 583 40

(Gain) loss on early extinguishment of debt 289 (7,345)

Change in other items, net (75,976) (39,105)

Net cash provided by operating activities $261,550 $393,311

Cash flows from investing activities

Capital expenditures $(59,783) $(172,816)

Acquisitions from related parties (2,000) -

Contributions to equity investments - related parties (86) (10,960)

Distributions from equity investments in excess of cumulative earnings - 12,141 5,052 related parties

Decreases to materials and supplies inventory and other 3,256 -

Net cash used in investing activities $(46,472) $(178,724)

Cash flows from financing activities

Borrowings, net of debt issuance costs $100,000 $3,586,173

Repayments of debt (531,085) (3,470,139)

Increase (decrease) in outstanding checks (22,017) (7,308)

Distributions to Partnership unitholders (131,265) (281,786)

Distributions to Chipeta noncontrolling interest owner (276) (1,738)

Distributions to noncontrolling interest owners of WES Operating (2,551) (5,807)

Net contributions from (distributions to) related parties 1,627 20,489

Finance lease payments (1,816) (2,151)

Unit repurchases (16,241) -

Net cash provided by (used in) financing activities $(603,624)$(162,267)

Net increase (decrease) in cash and cash equivalents $(388,546)$52,320

Cash and cash equivalents at beginning of period 444,922 99,962

Cash and cash equivalents at end of period $56,376 $152,282

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SOURCE Western Midstream Partners, LP