Executive Summary

Q4 delivered higher volumes and profitability: revenue rose to $928.5M, diluted EPS to $0.85, and Adjusted EBITDA to $590.7M, aided by broad throughput growth and a $9.2M favorable revenue recognition adjustment on cost-of-service contracts .
Sequential momentum: natural-gas, crude/NGLs, and produced water throughputs increased 4%, 6%, and 8% respectively vs. Q3, lifting Adjusted Gross Margin and Adjusted EBITDA quarter-over-quarter .
2025 outlook and capital return reset: WES issued FY25 guidance (Adj. EBITDA $2.35–$2.55B; FCF $1.275–$1.475B) and plans to raise the quarterly Base Distribution to $0.910 while retiring the Enhanced Distribution to focus on sustainable base growth (mid-to-low single digits) .
Strategic catalyst: sanctioned the 42-mile, 30-inch Pathfinder produced-water pipeline (>800 MBbl/d) and expanded water system, anchored by new long-term Oxy agreements with MVCs; ~ $400–$450M to be invested over 24 months, in service by Jan 1, 2027 .
Consensus estimates: S&P Global consensus data were unavailable at the time of analysis; therefore, beat/miss vs. estimates cannot be quantified (see Estimates Context).

What Went Well and What Went Wrong

What Went Well
- Volume growth and margin expansion: sequential gains across all three product lines lifted Adjusted Gross Margin and Adjusted EBITDA; positive $9.2M cumulative revenue recognition on cost-of-service contracts also helped .
- Strategic water platform and commercial de-risking: Pathfinder sanctioned and Oxy amendments (long-term produced-water capacity with MVCs; DJ gas MVC extensions) enhance flow assurance and underpin long-term growth; “first-of-its-kind” midstream-style water solution .
- Capital allocation clarity and balance sheet: leverage ~3x achieved in 2024; plan to grow Base Distribution and retire Enhanced Distribution, aligning capital to organic growth and bolt-ons .
What Went Wrong
- Free cash flow after distributions was negative in Q4 (-$31.6M), reflecting payout timing despite strong operating cash flow .
- Equity income declined YoY ($28.2M in Q4’24 vs. $36.1M in Q4’23), tempering reported results against the prior-year quarter .
- Near-term water margin headwind: management expects a slight decrease in produced-water per-barrel adjusted gross margin in Q1’25 due to the new Oxy amendment and cost-of-service redetermination (effective Jan 1) .

Financial Results

High-level P&L and margin (YoY and QoQ)

Metric	Q4 2023	Q3 2024	Q4 2024
Total Revenues and Other ($USD Millions)	$858.208	$883.362	$928.503
Net Income Attrib. to WES ($USD Millions)	$288.354	$288.480	$333.613
Diluted EPS ($)	$0.74	$0.74	$0.85
Net Income Margin %	33.6% (288.354/858.208)	32.7% (288.480/883.362)	35.9% (333.613/928.503)

Non-GAAP and Cash Flow (QoQ)

Metric	Q3 2024	Q4 2024
Adjusted EBITDA ($USD Millions)	$566.870	$590.699
Cash Flows from Operations ($USD Millions)	$551.288	$554.446
Free Cash Flow ($USD Millions)	$365.111	$309.277
Capital Expenditures ($USD Millions)	$189.434	$238.769
FCF After Distributions ($USD Millions)	$24.3	-$31.6

Segment and throughput detail (QoQ)

Metric	Q3 2024	Q4 2024
Adjusted Gross Margin – Natural Gas ($USD Millions)	$596.459	$616.373
Adjusted Gross Margin – Crude & NGLs ($USD Millions)	$134.253	$147.060
Adjusted Gross Margin – Produced Water ($USD Millions)	$96.782	$104.964
Throughput Attrib. to WES – Natural Gas (Bcf/d)	5.016	5.213
Throughput Attrib. to WES – Crude & NGLs (MBbl/d)	506	534
Throughput Attrib. to WES – Produced Water (MBbl/d)	1,099	1,191

KPI per-unit margins (QoQ)

KPI	Q3 2024	Q4 2024
Per-Mcf Adjusted GM – Natural Gas ($/Mcf)	$1.29	$1.29
Per-Bbl Adjusted GM – Crude & NGLs ($/Bbl)	$2.88	$3.00
Per-Bbl Adjusted GM – Produced Water ($/Bbl)	$0.96	$0.96

Context: Q4 crude/NGL per-barrel adjusted gross margin rose ~$0.12 QoQ due to favorable revenue recognition and equity distribution timing; management expects water per-barrel adjusted gross margin to decrease slightly in Q1’25 due to contract amendments .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Adjusted EBITDA (non-GAAP)	FY 2025	N/A	$2.350B–$2.550B	New
Free Cash Flow (non-GAAP)	FY 2025	N/A	$1.275B–$1.475B	New
Total Capital Expenditures	FY 2025	N/A	$625M–$775M	New
Base Distribution (per unit)	FY 2025	$0.875 in Q4’24; $3.50 FY’24 paid	Recommend to $0.910 from Q1’25; ≥$3.605 FY’25	Raised
Enhanced Distribution	2025	Historically used opportunistically	No Enhanced Distribution in 2025; retiring the concept	Eliminated
Pathfinder Project Capex	~24 months	N/A	~$400–$450M; in service by 1/1/2027	New project

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 2024)	Previous Mentions (Q3 2024)	Current Period (Q4 2024)	Trend
Produced-water strategy & Pathfinder	Executed new produced-water gathering deals in Delaware (PR)	Water volumes grew; recycling affects near-term volumes	Sanctioned Pathfinder (>800 MBbl/d) + Oxy long-term MVCs; expand SWDs; slight near-term margin headwind in Q1’25	Up (strategic scale-up)
DJ Basin contracts & stability	P66 DJ processing extended; +200 MMcf/d firm from 2026	2025 growth to moderate; some fee/demand revenue roll-off	Oxy DJ MVC extension up to 10 years; record DJ throughput in 2024	Improving contract cover
Powder River Basin (PRB) growth	Sequential growth across products (PR)	Record PRB throughput; Meritage integration	~30% of 2025 capex to PRB; mid-teens gas growth expected in 2026	Accelerating
Capital allocation & distributions	Base + Enhanced framework reiterated	Base growth evaluated; Enhanced available	Raise Base to $0.910; retire Enhanced; target mid/low single-digit growth	Shift to sustainable base growth
OpEx/efficiency	Seasonal OpEx elevated (summer)	OpEx expected lower in Q4 post-turnarounds	OpEx flat QoQ; slight decrease expected in Q1 seasonally	Improving
Commodity/NGL exposure	—	Lower NGL recoveries + prices pressured margins	Favorable Q4 revenue recognition; crude/NGL per-barrel uplift; overall stable outlook	Stabilizing

Management Commentary

“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.” — Oscar Brown, CEO .
“The financial outlook for WES remains strong as we transition into 2025… we expect Adjusted EBITDA to increase by approximately 5-percent at the midpoint relative to 2024.” — Kristen Shults, CFO .
“We intend to recommend a Base Distribution increase of $0.035 per unit to $0.91 per unit… and retire the Enhanced Distribution concept to further simplify our capital allocation framework.” — Kristen Shults, CFO .
“We are excited to provide an innovative midstream solution via the Pathfinder pipeline… anchored by a new long-term produced-water agreement with Occidental… supported by corresponding minimum-volume commitments.” — Oscar Brown, CEO .

Q&A Highlights

Distribution growth framework: Management set a mid-to-low single-digit annual Base Distribution growth target aligned to EBITDA and FCF outlook; Enhanced Distribution retired to prioritize organic projects and bolt-ons .
Pathfinder returns and fill: Initial Oxy commitment supports attractive midstream-centric returns; upsized pipe lowers unit cost and positions WES to onboard additional producers to accrete returns over time .
Buybacks vs. growth: New $250M authorization is “good housekeeping”; growth projects and distribution growth take priority near term unless market dislocation creates a compelling opportunity .
PRB investment cadence: ~30% of 2025 capex to PRB; natural gas throughput expected to grow mid-teens in 2026 as new facilities and customer plans mature .
Water margins near term: Produced-water per-barrel adjusted gross margin expected to decrease slightly in Q1’25 due to Oxy amendment and cost-of-service redetermination effective Jan 1 .

Estimates Context

S&P Global consensus estimates were unavailable due to data access limits at the time of analysis; as a result, we cannot quantify WES’s Q4 2024 beat/miss vs. Street for Revenue, EBITDA, or EPS. Investors should note Q4 fundamentals strengthened sequentially (revenue, Adjusted EBITDA, per-barrel crude/NGL margin), with 2025 guidance implying mid-single-digit EBITDA growth at the midpoint .
Where possible, we anchored comparisons to company-reported GAAP and non-GAAP metrics and call commentary.

Key Takeaways for Investors

Sequential acceleration: Q4 revenue (+5% QoQ), Adjusted EBITDA (+4% QoQ), and across-the-board throughput growth point to healthy exit velocity into 2025 .
Structural water growth: Pathfinder plus Oxy MVCs create a durable, capital-efficient platform with line-of-sight to incremental producer volumes; this underpins medium-term growth and de-risks flow assurance in the Delaware .
Distribution visibility: Plan to raise the quarterly Base Distribution to $0.910 and target mid-to-low single-digit annual base growth; Enhanced Distribution retired, simplifying the story and focusing on compounding base payouts .
2025 guide sets a base: Adj. EBITDA $2.35–$2.55B and FCF $1.275–$1.475B with disciplined capex ($625–$775M); about half of capex to Delaware, ~30% to PRB (growth vector into 2026) .
Near-term watch items: Q1’25 produced-water per-barrel margin expected to dip slightly on contract resets; monitor O&M seasonality and equity income trends .
Balance sheet capacity intact: ~3x leverage achieved in 2024; flexibility to fund organic projects/bolt-ons while growing base distributions .
Trading setup: Lacking consensus tape, the narrative skew is positive on water platform monetization and clearer capital return policy; path to estimate revisions likely hinges on 2025 volume ramps (Delaware, PRB, Utah) and timing of onboarding incremental water volumes (Pathfinder) .

Supporting Detail and Prior-Quarter Context

Q3 2024 snapshot: Revenue $883.4M; Adjusted EBITDA $566.9M; FCF $365.1M; noted headwinds from lower NGL recoveries/prices and lower equity income; guided to stronger Q4 on throughput and lower O&M .
Q2 2024 snapshot: Revenue $905.6M; Adjusted EBITDA $578.1M; FCF $424.8M; executed DJ (P66) and Uinta (Kinder/Williams) contracts supporting 2025+ utilization .
Q4 2024 distribution: $0.875 per unit (paid Feb 14, 2025) prior to planned Q1’25 increase .

Notes: All GAAP and non-GAAP metrics, operating statistics, and guidance figures are sourced from company filings and earnings materials. Non-GAAP definitions and reconciliations are provided in the company’s releases .

Western Midstream Partners, LP (WES)·Q4 2024 Earnings Summary