Announces 2026 Financial Guidance
-- Reported fourth-quarter 2025 Net income attributable to limited partners
of $187.2 million, generating record fourth-quarter Adjusted EBITDA(1) of
$635.6 million, which included $29.5 million of unfavorable non-cash
revenue adjustments.
-- Reported full-year 2025 Net income attributable to limited partners of
$1.154 billion, generating record full-year Adjusted EBITDA(1) of $2.481
billion, exceeding the midpoint of the full-year 2025 Adjusted EBITDA
guidance range of $2.350 billion to $2.550 billion, and representing a
6-percent year-over-year increase.
-- Reported fourth-quarter 2025 Cash flows provided by operating activities
of $557.6 million, generating fourth-quarter Free Cash Flow(1) of $340.8
million.
-- Reported full-year 2025 Cash flows provided by operating activities of
$2.223 billion, generating full-year Free Cash Flow(1) of $1.526 billion,
exceeding the high end of the full-year 2025 Free Cash Flow guidance
range of $1.275 billion to $1.475 billion, and representing a 15-percent
year-over-year increase.
-- Announced a fourth-quarter distribution of $0.910 per unit, which is
consistent with the prior quarter's distribution, or $3.64 per unit on an
annualized basis.
-- Providing 2026 Adjusted EBITDA(2) guidance range of $2.500 billion to
$2.700 billion, representing an approximate 5-percent increase at the
mid-point relative to 2025.
-- Providing 2026 total capital expenditure(3) guidance range of $850.0
million to $1.000 billion, implying a mid-point of $925 million, which is
significantly below previous expectations of at least $1.1 billion of
total capital expenditures.
-- Providing 2026 Distributable Cash Flow(2) ("DCF") guidance range of
$1.850 billion to $2.050 billion, or $4.59 to $5.08 per unit(4),
respectively.
-- Planning to recommend to the Board a distribution increase of $0.02 per
unit to $0.93 per unit, or $3.72 per unit on an annualized basis,
starting in the first quarter of 2026, which represents a 2.2-percent
increase over the prior quarter's distribution.
HOUSTON, Feb. 18, 2026 /PRNewswire/ -- Today Western Midstream Partners, LP $(WES)$ ("WES" or the "Partnership") announced fourth-quarter and full-year 2025 financial and operating results. Net income (loss) attributable to limited partners for the fourth quarter of 2025 totaled $187.2 million, or $0.47 per common unit (diluted), with fourth-quarter 2025 Adjusted EBITDA(1) totaling $635.6 million. Net income (loss) attributable to limited partners and Adjusted EBITDA(1) for the fourth quarter of 2025 include a non-cash decrease to revenue of approximately $29.5 million associated with revenue recognition cumulative adjustments related to cost-of-service agreements at the DJ Basin oil and Springfield systems. Fourth-quarter 2025 Cash flows provided by operating activities totaled $557.6 million, and fourth-quarter 2025 Free Cash Flow(1) totaled $340.8 million. Fourth-quarter 2025 capital expenditures(3) totaled $231.0 million.
Net income (loss) attributable to limited partners for the full-year 2025 totaled $1.154 billion, or $2.98 per common unit (diluted), with full-year 2025 Adjusted EBITDA(1) totaling $2.481 billion. Full-year 2025 Cash flows provided by operating activities totaled $2.223 billion, full-year 2025 Free Cash Flow(1) totaled $1.526 billion, and full-year 2025 capital expenditures(3) totaled $721.8 million.
FULL-YEAR 2025 AND RECENT HIGHLIGHTS
-- Generated record Adjusted EBITDA(1) in 2025 primarily driven by increased
Delaware Basin throughput and cost reduction initiatives that commenced
during the second quarter of 2025, resulting in a 2-percent
year-over-year reduction in reported operation and maintenance expense,
excluding the acquisition of Aris Water Solutions, Inc. ("Aris").
-- Excluding the Aris acquisition, reduced operation and maintenance expense
by 8-percent in the third quarter and 12-percent in the fourth quarter,
compared to the corresponding periods in 2024, reflecting continued cost
discipline despite increased throughput.
-- Achieved record annual natural-gas throughput(5) of 5.2 Bcf/d,
representing a 4-percent(6) year-over-year increase, in-line with our
2025 expectations of mid-single-digits growth.
-- Achieved annual crude-oil and NGLs throughput(5) of 514 MBbls/d,
representing a 1-percent(7) year-over-year increase, in-line with our
2025 expectations of low-single-digits growth.
-- Gathered record annual produced-water throughput(5) of 1,578 MBbls/d,
representing a 40-percent year-over-year increase, primarily due to the
acquisition of Aris in fourth-quarter 2025. Excluding throughput
associated with the legacy Aris system, gathered record annual
produced-water throughput of 1,224 MBbls/d, representing a 7-percent
year-over-year increase in-line with our original 2025 expectations of
mid-single digits growth.
-- Achieved strong throughput growth across all products in the Delaware
Basin, including 9-percent and 6-percent, for natural-gas and crude-oil
and NGLs, respectively, and 40-percent for produced water driven by the
incremental Aris volumes.
-- Expanded Delaware Basin natural-gas processing capacity by 18-percent and
continued supporting WES's position as one of the largest natural-gas
processors in the basin through the completion of North Loving I in the
second-quarter of 2025 and the addition of dedicated capacity at the Mi
Vida plant.
-- Sanctioned North Loving II that will increase Delaware Basin natural-gas
processing capacity by an incremental 13-percent when completed early in
the second quarter of 2027.
-- Sanctioned the long-haul Pathfinder pipeline ("Pathfinder") to transport
over 800 MBbls/d of produced water for disposal and reuse opportunities
in eastern Loving County, supported by long-term fixed-fee contracts.
-- Completed the acquisition of Aris, creating one of the largest,
fully-integrated Delaware Basin produced-water solutions providers,
significantly expanding WES's New Mexico footprint and further
diversifying our customer base with mostly investment-grade
counterparties.
-- Continued to execute on our capital return framework by returning $1.431
billion to unitholders in 2025 while maintaining a net leverage ratio
near 3.0 times throughout the year.
-- Subsequent to year-end, and as previously announced, renegotiated
natural-gas gathering and processing contracts in the Delaware Basin with
Occidental and ConocoPhillips, replacing the legacy cost-of-service
structure with a simplified, fixed-fee structure in exchange for $610
million in WES units owned by Occidental.
On February 13, 2026, WES paid its fourth-quarter 2025 per-unit distribution of $0.910, or $3.64 on an annualized basis, which is consistent with the prior quarter's distribution. Fourth-quarter and full-year 2025 Free Cash Flow(1) after distributions totaled negative $38.7 million and positive $95.0 million, respectively.
Fourth-quarter 2025 natural-gas throughput(5) averaged 5.2 Bcf/d, representing a 4-percent sequential-quarter decrease. Fourth-quarter 2025 crude-oil and NGLs throughput(5) averaged 508 MBbls/d, representing a slight sequential-quarter decrease. Fourth-quarter 2025 produced-water throughput(5) averaged 2,693 MBbls/d, representing a 121-percent sequential-quarter increase which includes two-and-a-half months' contribution from Aris.
Full-year 2025 natural-gas throughput(5) averaged 5.2 Bcf/d, representing a 4-percent(6) increase year-over-year, adjusting for the sale of Marcellus assets in the second quarter of 2024. Full-year 2025 crude-oil and NGLs throughput(5) averaged 514 MBbls/d, representing a 1-percent(7) increase year-over-year, adjusting for the asset sales during 2024. Full-year 2025 produced-water throughput(5) averaged 1,578 MBbls/d, an increase of 40-percent year-over-year, including two-and-a-half months' contribution from Aris in the fourth quarter 2025.
"2025 was a successful and impactful year for WES," commented Oscar K. Brown, President and Chief Executive Officer. "We delivered record Adjusted EBITDA and Free Cash Flow due to another year of steady throughput growth across all three products, including quarterly records in the Delaware and DJ Basins. We met or exceeded our 2025 financial guidance ranges, advanced our growth strategy with the acquisition of Aris Water Solutions, which meaningfully expands our produced-water capabilities and adds a new operating footprint in New Mexico, all while navigating industry challenges that included volatile Waha Hub pricing and associated third-party production curtailments. The consistency of our assets and the discipline of our teams were evident throughout the year."
"We also moved key strategic projects forward. We sanctioned and began constructing Pathfinder, backed by long-term agreements, brought the North Loving I natural-gas processing train online ahead of schedule and under budget, and sanctioned North Loving II to meet growing natural-gas processing demand. Even as we continued to grow the business and throughput, we successfully executed on our cost reduction plan initiated during the second quarter, enabling us to reduce operation and maintenance expense by 8-percent in the third quarter and 12-percent in the fourth quarter compared to the corresponding periods in 2024, excluding the Aris acquisition. Additionally, the Aris integration is on track to deliver meaningful synergies, with approximately 85-percent of our $40 million target to be captured by the end of the first quarter."
"Financially, we outperformed across several key metrics, achieving Adjusted EBITDA above the mid-point of our guidance range, and Free Cash Flow above the high end of the range. Additionally, we increased the distribution by 4-percent year-over-year, in line with our target of mid-to-low single-digits growth, and returned more than $1.4 billion to unitholders. Taken together, our 2025 accomplishments, including successful organic growth projects, accretive M&A, efficiency and cost reduction success, and contract renegotiations, all strengthen our operating leverage and position WES for sustainable growth, while maintaining a strong balance sheet and low leverage profile. With an investment-grade balance sheet and roughly $2.0 billion of liquidity, we have the financial flexibility to fund organic and inorganic growth opportunities, while continuing to return a substantial amount of our Distributable Cash Flow to unitholders."
2026 GUIDANCE
Based on the current production forecast information from our producer customers, and the inclusion of Aris, WES is providing 2026 guidance as follows:
-- Adjusted EBITDA(2) between $2.500 billion and $2.700 billion.
-- Total capital expenditures(3) between $850.0 million and $1.000 billion.
-- Distributable Cash Flow(2) ("DCF") between $1.850 billion and $2.050
billion, or $4.59 to $5.08 per unit(4).
-- Full-year distribution of at least $3.70 per unit(8), which includes an
increase to $0.93 per unit on a quarterly basis, starting with our first
quarter distribution in May, which represents an annualized rate of $3.72
per unit.
"As we enter 2026, our outlook reflects both the contribution of the Aris acquisition and the effects of a more challenging commodity price environment. We expect continued throughput growth in the Delaware Basin, though at a more moderate pace relative to prior expectations given recently updated producer forecasts reflecting lower activity levels. Specifically, in the Delaware Basin, crude-oil and NGLs and natural-gas throughput are now expected to increase at low-to-mid single digits average percentage growth year-over-year, while produced-water throughput is expected to increase over 80-percent, primarily driven by the Aris acquisition. However, when combined with anticipated declines in several of our other operating basins, we expect portfolio-wide operated throughput for crude oil and NGLs to decline by low-to-mid single digits and natural gas to remain relatively flat year-over-year," commented Kristen Shults, Senior Vice President and Chief Financial Officer.
"Despite these headwinds, we expect to realize additional cost efficiencies in 2026. Excluding Aris and utility costs, the majority of which are reimbursed through producer contracts, operation and maintenance expense decreased by more than $100 million from the first quarter to the fourth quarter of 2025, based on the change between the first and fourth-quarter annualized run-rates."
"Building on this progress, we anticipate further reductions in operation and maintenance expense from our legacy WES assets in 2026, and only a 10 to 15-percent average increase year-over-year partnership-wide, which is significantly below the combined entities' pro forma operation and maintenance expense. Furthermore, excluding Aris acquisition costs, we expect our average annual general and administrative expense to remain flat year-over-year, even after accounting for the increased scale of the business and strategically retaining and further investing in select personnel and growth-oriented functions from Aris, including beneficial reuse and commercial operations. This continued discipline strengthens our ability to protect margins, support capital allocation priorities, promote enhanced competitiveness, and deliver value to unitholders even in a more challenging commodity-price environment."
"Taking these factors into account, the mid-point of our 2026 Adjusted EBITDA range is $2.6 billion, representing approximately a 5-percent year-over-year increase and aligning with our mid-to-low single-digit annual growth rate target we outlined last year. The mid-point of our 2026 capital expenditures range is $925 million, significantly below our initial $1.1 billion estimate, as we adjust spending to reflect the softer macroeconomic backdrop. Approximately half of our expected 2026 capital program is directed towards the construction of Pathfinder and North Loving II, demonstrating our ability to materially reduce the remainder of our growth-capital program when needed, thereby limiting the impact on Free Cash Flow."
"In light of our organic growth spending opportunities this year, we are now providing DCF and DCF per unit guidance as an additional measure of our capacity to fund the distribution and a substantial portion of our growth-capital program. We continue to believe that Free Cash Flow is a meaningful indicator of the Partnership's financial strength and will continue to provide both metrics going forward."
"Finally, our disciplined capital allocation framework remains unchanged. The 2.2-percent distribution increase enables our unitholders to continue benefiting from one of the most attractive total capital return yields in the sector. We will also continue prioritizing high-returning organic growth projects and accretive M&A opportunities that expand our asset footprint, strengthen our competitive position, and support distribution growth over time. Even amid a more challenged environment, our expanded asset base and more efficient cost structure positions WES to secure new commercial agreements, grow steadily over time, and continue delivering compelling returns for our stakeholders."
CONFERENCE CALL TOMORROW AT 9:00 A.M. CT
WES will host a conference call on Thursday, February 19, 2026, at 9:00 a.m. Central Time (10:00 a.m. Eastern Time) to discuss its fourth-quarter and full-year 2025 results. 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 small number of phone lines are available for analysts; individuals should dial 888-880-3330 (Domestic) or 646-357-8766 (International) ten to fifteen minutes before the scheduled conference call time. A replay of the live audio webcast can be accessed on the Partnership's website at www.westernmidstream.com for one year after the call.
For additional details on WES's financial and operational performance, please refer to the earnings slides and updated investor presentation available at www.westernmidstream.com.
ABOUT WESTERN MIDSTREAM
Western Midstream Partners, LP ("WES") is a master limited partnership formed to develop, acquire, own, and operate midstream assets. With midstream assets located in Texas, New Mexico, Colorado, Utah, and Wyoming, 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, transporting, recycling, treating, and disposing of produced water for its customers. In its capacity as a natural-gas processor, WES also buys and sells residue, natural-gas liquids, and condensate on behalf of itself and its customers under certain gas processing contracts. A substantial majority of WES's cash flows are protected from direct exposure to commodity-price volatility through fee-based contracts.
For more information about WES, please visit www.westernmidstream.com.
(1) Please see the definitions of the Partnership's non-GAAP measures at the
end of this release and reconciliation of GAAP to non-GAAP measures.
(2) This release contains certain forward-looking non-GAAP measures such as
the Adjusted EBITDA range and Distributable Cash Flow range for year
ending December 31, 2026. A reconciliation of the Adjusted EBITDA range
to net cash provided by operating activities and net income (loss), and a
reconciliation of the Distributable Cash Flow range to net income (loss),
is not provided because the items necessary to estimate such amounts are
not reasonably estimable at this time. These items, net of tax, may
include, but are not limited to, impairments of assets and other charges,
divestiture costs, acquisition costs, or changes in accounting
principles. All of these items could significantly impact such financial
measures. At this time, WES is not able to estimate the aggregate impact,
if any, of these items on future period reported earnings. Accordingly,
WES is not able to provide a corresponding forward-looking GAAP
equivalent for the Adjusted EBITDA or Distributable Cash Flow ranges.
(3) Accrual-based, includes equity investments, excludes capitalized
interest, and excludes capital expenditures associated with the 25%
third-party interest in Chipeta.
(4) Based on expected weighted average common and general partner units
outstanding during full-year 2026.
(5) Represents total throughput attributable to WES, which excludes (i) the
1.9% limited partner interest in WES Operating owned by an Occidental
subsidiary as of December 31, 2025, and (ii) for natural-gas throughput,
the 25% third-party interest in Chipeta, which collectively represent
WES's noncontrolling interests.
(6) For the year ended December 31, 2024, excludes an average of 38 MMcf/d of
throughput associated with the sale of the Marcellus Interest gathering
system in April 2024.
(7) For the year ended December 31, 2024, excludes an average of 23 MBbls/d
of throughput associated with the sale of (i) Saddlehorn Pipeline LLC,
Whitethorn Pipeline Company LLC, Panola Pipeline Company LLC, and
Enterprise EF78 LLC in the first quarter of 2024 and (ii) Wamsutter
Pipeline LLC in the third quarter of 2024.
(8) Full-year 2026 distribution (paid in 2026) of at least $3.67 per unit,
which includes the February 2026 distribution of $0.910 per unit. Board
action on any distribution increase will be requested on a quarterly
basis and is subject to the Board's assessment of the needs of the
business at that time.
FORWARD-LOOKING STATEMENTS
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; 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 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 CONTACTS
Daniel Jenkins
Director, Investor Relations
Investors@westernmidstream.com
866.512.3523
Rhianna Disch
Manager, Investor Relations
Investors@westernmidstream.com
866.512.3523
Western Midstream Partners, LP
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Year Ended
December 31, December 31,
------------------------------------ ------------------------------------
thousands except
per-unit amounts 2025 2024 2025 2024
----------------- ----------------- ----------------- ----------------- -----------------
Revenues and
other
Service revenues
-- fee based $ 910,183 $ 858,896 $ 3,453,052 $ 3,248,262
Service revenues
-- product based 50,253 38,455 193,866 215,776
Product sales 69,803 31,024 194,681 140,100
Other 1,242 128 1,804 1,085
------------------ ----------------- ----------------- ----------------- -----------------
Total revenues and
other 1,031,481 928,503 3,843,403 3,605,223
Equity income, net
-- related
parties 21,378 28,158 85,788 112,385
Operating
expenses
Cost of product 71,618 39,315 206,978 172,251
Operation and
maintenance 252,368 231,244 915,896 880,568
General and
administrative 201,871 76,028 398,922 271,526
Property and other
taxes 17,986 18,684 69,342 62,668
Depreciation and
amortization 197,882 162,990 710,778 650,428
Long-lived asset
and other
impairments 2,509 2 14,760 6,206
Total operating
expenses 744,234 528,263 2,316,676 2,043,647
Gain (loss) on
divestiture and
other, net (3,065) (2,655) (11,113) 296,771
------------------ ----------------- ----------------- ----------------- -----------------
Operating income
(loss) 305,560 425,743 1,601,402 1,970,732
Interest expense (105,674) (99,336) (390,490) (378,513)
Gain (loss) on
early
extinguishment of
debt -- -- -- 5,403
Other income
(expense), net 3,706 15,617 16,629 31,741
------------------ ----------------- ----------------- ----------------- -----------------
Income (loss)
before income
taxes 203,592 342,024 1,227,541 1,629,363
Income tax expense
(benefit) 7,323 444 15,086 18,111
------------------ ----------------- ----------------- ----------------- -----------------
Net income (loss) 196,269 341,580 1,212,455 1,611,252
Net income (loss)
attributable to
noncontrolling
interests 5,588 7,967 31,472 37,681
------------------ ----------------- ----------------- ----------------- -----------------
Net income (loss)
attributable to
Western Midstream
Partners, LP $ 190,681 $ 333,613 $ 1,180,983 $ 1,573,571
------------------ ----------------- ----------------- ----------------- -----------------
Limited partners'
interest in net
income (loss):
Net income (loss)
attributable to
Western Midstream
Partners, LP $ 190,681 $ 333,613 $ 1,180,983 $ 1,573,571
General partner
interest in net
(income) loss (3,500) (7,759) (26,485) (36,604)
------------------ ----------------- ----------------- ----------------- -----------------
Limited partners'
interest in net
income (loss) $ 187,181 $ 325,854 $ 1,154,498 $ 1,536,967
Net income (loss)
per common unit
-- basic $ 0.47 $ 0.86 $ 2.99 $ 4.04
Net income (loss)
per common unit
-- diluted $ 0.47 $ 0.85 $ 2.98 $ 4.02
Weighted-average
common units
outstanding --
basic 400,492 380,556 386,074 380,397
Weighted-average
common units
outstanding --
diluted 402,464 382,918 387,880 382,455
------------------ ----------------- ----------------- ----------------- -----------------
Western Midstream Partners, LP
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
December 31,
----------------------------------
thousands except number of units 2025 2024
Total current assets $ 1,656,941 $ 1,847,190
Net property, plant, and equipment 11,220,908 9,714,609
Other assets 2,120,571 1,582,986
-------------------------------------- ---------------- ----------------
Total assets $ 14,998,420 $ 13,144,785
-------------------------------------- ---------------- ----------------
Total current liabilities $ 1,236,484 $ 1,691,694
Long-term debt 8,195,170 6,926,647
Asset retirement obligations 427,858 370,195
Other liabilities 975,786 781,079
-------------------------------------- ---------------- ----------------
Total liabilities 10,835,298 9,769,615
-------------------------------------- ---------------- ----------------
Equity and partners' capital
Common units (408,141,366 and
380,556,643 units issued and
outstanding at December 31, 2025 and
2024, respectively) 4,016,606 3,224,802
General partner units (9,060,641 units
issued and outstanding at
December 31, 2025 and 2024) 4,624 10,803
Noncontrolling interests 141,892 139,565
-------------------------------------- ---------------- ----------------
Total liabilities, equity, and
partners' capital $ 14,998,420 $ 13,144,785
-------------------------------------- ---------------- ----------------
Western Midstream Partners, LP
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Year Ended
December 31,
-----------------------------
thousands 2025 2024
------------------------------------------ ------------- --------------
Cash flows from operating activities
Net income (loss) $ 1,212,455 $ 1,611,252
Adjustments to reconcile net income (loss)
to net cash provided by operating
activities and changes in assets and
liabilities:
Depreciation and amortization 710,778 650,428
Long-lived asset and other impairments 14,760 6,206
(Gain) loss on divestiture and other, net 11,113 (296,771)
(Gain) loss on early extinguishment of
debt -- (5,403)
Change in other items, net 273,519 171,148
------------------------------------------- ------------- --------------
Net cash provided by operating activities $ 2,222,625 $ 2,136,860 ------------------------------------------- ------------- -------------- Cash flows from investing activities Capital expenditures $ (727,991) $ (833,856) Acquisitions from third parties (368,638) (443) Contributions to equity investments - related parties -- (9,690) Distributions from equity investments in excess of cumulative earnings -- related parties 31,391 30,850 Proceeds from the sale of assets to third parties 162 792,255 (Increase) decrease in materials and supplies inventory and other (20,130) (18,284) ------------------------------------------- ------------- -------------- Net cash used in investing activities $ (1,085,206) $ (39,168) ------------------------------------------- ------------- -------------- Cash flows from financing activities Borrowings, net of debt issuance costs $ 1,184,288 $ 789,044 Repayments of debt (1,080,589) (143,852) Commercial paper borrowings (repayments), net -- (610,313) Increase (decrease) in outstanding checks (7,973) (5,622) Distributions to Partnership unitholders (1,431,024) (1,246,069) Distributions to Chipeta noncontrolling interest owner (2,095) (4,372) Distributions to noncontrolling interest owner of WES Operating (29,534) (25,450) Other (41,465) (33,381) ------------------------------------------- ------------- -------------- Net cash used in financing activities $ (1,408,392) $ (1,280,015) ------------------------------------------- ------------- -------------- Net increase (decrease) in cash and cash equivalents $ (270,973) $ 817,677 Cash and cash equivalents at beginning of period 1,090,464 272,787 ------------------------------------------- ------------- -------------- Cash and cash equivalents at end of period $ 819,491 $ 1,090,464 ------------------------------------------- ------------- --------------
Western Midstream Partners, LP
RECONCILIATION 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 attributable to Western Midstream Partners, LP ("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) income tax benefit, (v) other income, (vi) other items impacting comparability with WES's core operating performance, 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.
WES defines Distributable Cash Flow as Adjusted EBITDA, less total revenues and other recognized in Adjusted EBITDA in excess of (less than) customer billings and net cash paid for (i) interest expense (net of interest income recorded in other income (expense) and non-cash capitalized interest), (ii) maintenance capital expenditures, (iii) income taxes, and Distributable Cash Flow attributable to noncontrolling interests to the extent such amounts are not excluded from Adjusted EBITDA.
Below are reconciliations of (i) gross margin (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), (iii) net cash provided by operating activities (GAAP) to Free Cash Flow (non-GAAP), and (iv) net income (loss) (GAAP) to Distributable Cash Flow (non-GAAP), as required under Regulation G of the Securities Exchange Act of 1934. Management believes that Adjusted Gross Margin, Adjusted EBITDA, Free Cash Flow, and Distributable 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, Free Cash Flow, and Distributable 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, Free Cash Flow, and Distributable Cash Flow should be considered in conjunction with net income (loss) attributable to Western Midstream Partners, LP and other applicable performance measures, such as gross margin or cash flows provided by operating activities.
Western Midstream Partners, LP
RECONCILIATION OF GAAP TO NON-GAAP MEASURES (CONTINUED)
(Unaudited)
Adjusted Gross Margin
Three Months Ended Year Ended
-------------------------------------- ----------------------------------
December 31, September 30, December 31, December 31,
thousands 2025 2025 2025 2024
--------------------- ------------------ ------------------ ---------------- ----------------
Reconciliation of Gross margin to Adjusted Gross Margin
Total revenues and
other $ 1,031,481 $ 952,484 $ 3,843,403 $ 3,605,223
Less:
Cost of product 71,618 51,187 206,978 172,251
Depreciation and
amortization 197,882 170,323 710,778 650,428
---------------------- ------------------ ------------------ ---------------- ----------------
Gross margin 761,981 730,974 2,925,647 2,782,544
Add:
Distributions from
equity investments 27,147 29,751 122,364 142,236
Depreciation and
amortization 197,882 170,323 710,778 650,428
Less:
Reimbursed
electricity-related
charges recorded as
revenues 31,488 34,803 125,551 117,906
Adjusted Gross Margin
attributable to
noncontrolling
interests (1) 20,719 21,342 83,681 80,509
---------------------- ------------------ ------------------ ---------------- ----------------
Adjusted Gross Margin $ 934,803 $ 874,903 $ 3,549,557 $ 3,376,793
---------------------- ------------------ ------------------ ---------------- ----------------
Gross margin
Gross margin for
natural-gas assets
(2) $ 506,811 $ 540,393 $ 2,113,810 $ 2,073,533
Gross margin for
crude-oil and NGLs
assets (2) 91,220 107,877 407,211 395,886
Gross margin for
produced-water
assets (2) 170,747 90,837 435,501 341,784
Adjusted Gross Margin
Adjusted Gross Margin
for natural-gas
assets $ 599,775 $ 623,691 $ 2,471,011 $ 2,411,438
Adjusted Gross Margin
for crude-oil and
NGLs assets 129,395 145,463 564,461 570,476
Adjusted Gross Margin
for produced-water
assets 205,633 105,749 514,085 394,879
---------------------- ------------------ ------------------ ---------------- ----------------
(1) Includes (i) the 25% third-party interest in Chipeta and (ii) the
1.9% limited partner interest in WES Operating owned by an Occidental
subsidiary as of December 31, 2025, and 2.0% for all other periods
presented, which collectively represent WES's noncontrolling interests.
(2) Excludes corporate-level depreciation and amortization.
Western Midstream Partners, LP
RECONCILIATION OF GAAP TO NON-GAAP MEASURES (CONTINUED)
(Unaudited)
Adjusted EBITDA
Three Months Ended Year Ended
December 31, September 30, December 31, December 31,
thousands 2025 2025 2025 2024
--------------------- ------------------ ------------------ ---------------- ----------------
Reconciliation of Net income (loss) to Adjusted EBITDA
Net income (loss) $ 196,269 $ 348,872 $ 1,212,455 $ 1,611,252
Add:
Distributions from
equity investments 27,147 29,751 122,364 142,236
Non-cash equity-based
compensation
expense 21,386 10,456 50,803 37,994
Interest expense 105,674 92,353 390,490 378,513
Income tax expense 7,323 2,089 15,086 18,111
Depreciation and
amortization 197,882 170,323 710,778 650,428
Long-lived asset and
other impairments 2,509 11,562 14,760 6,206
Other expense 17 53 303 248
Less:
Gain (loss) on
divestiture and
other, net (3,065) (2,470) (11,113) 296,771
Gain (loss) on early
extinguishment of
debt -- -- -- 5,403
Equity income, net --
related parties 21,378 16,847 85,788 112,385
Other income 3,706 1,754 16,629 31,741
Items impacting
comparability
Acquisition-related
expenses (113,188) -- (113,188) --
Adjusted EBITDA
attributable to
noncontrolling
interests (1) 13,794 15,576 58,141 54,650
---------------------- ------------------ ------------------ ---------------- ----------------
Adjusted EBITDA $ 635,582 $ 633,752 $ 2,480,782 $ 2,344,038
---------------------- ------------------ ------------------ ---------------- ----------------
Reconciliation of Net cash provided by operating activities to Adjusted EBITDA
Net cash provided by
operating activities $ 557,645 $ 570,210 $ 2,222,625 $ 2,136,860
Interest (income)
expense, net 105,674 92,353 390,490 378,513
Accretion and
amortization of
long-term
obligations, net (815) (1,896) (6,945) (9,238)
Current income tax
expense (benefit) 5,615 1,865 11,142 3,900
Other (income)
expense, net (3,706) (1,754) (16,629) (31,741)
Distributions from
equity investments in
excess of cumulative
earnings -- related
parties 5,391 11,953 31,391 30,850
Changes in assets and
liabilities:
Accounts receivable,
net (16,853) (21,956) (36,018) 42,798
Accounts and
imbalance payables
and accrued
liabilities, net (52,513) 40,837 3,969 21,935
Other items, net (64,250) (42,284) (174,290) (175,189)
Acquisition-related
expenses 113,188 -- 113,188 --
Adjusted EBITDA
attributable to
noncontrolling
interests (1) (13,794) (15,576) (58,141) (54,650)
---------------------- ------------------ ------------------ ---------------- ----------------
Adjusted EBITDA $ 635,582 $ 633,752 $ 2,480,782 $ 2,344,038
---------------------- ------------------ ------------------ ---------------- ----------------
Cash flow information
Net cash provided by
operating activities $ 557,645 $ 570,210 $ 2,222,625 $ 2,136,860
Net cash used in
investing activities (608,914) (161,528) (1,085,206) (39,168)
Net cash provided by
(used in) financing
activities 693,472 (361,126) (1,408,392) (1,280,015)
---------------------- ------------------ ------------------ ---------------- ----------------
(1) Includes (i) the 25% third-party interest in Chipeta and (ii) the
1.9% limited partner interest in WES Operating owned by an Occidental
subsidiary as of December 31, 2025, and 2.0% for all other periods
presented, which collectively represent WES's noncontrolling interests.
Western Midstream Partners, LP
RECONCILIATION OF GAAP TO NON-GAAP MEASURES (CONTINUED)
(Unaudited)
Free Cash Flow
Three Months Ended Year Ended
December 31, September 30, December 31, December 31,
thousands 2025 2025 2025 2024
--------------- ------------------ ------------------ ---------------- ----------------
Reconciliation of Net cash provided by operating activities to Free Cash Flow
Net cash
provided by
operating
activities $ 557,645 $ 570,210 $ 2,222,625 $ 2,136,860
Less:
Capital
expenditures 222,208 184,758 727,991 833,856
Contributions
to equity
investments --
related
parties -- -- -- 9,690
Add:
Distributions
from equity
investments in
excess of
cumulative
earnings --
related
parties 5,391 11,953 31,391 30,850
---------------- ------------------ ------------------ ---------------- ----------------
Free Cash Flow $ 340,828 $ 397,405 $ 1,526,025 $ 1,324,164
---------------- ------------------ ------------------ ---------------- ----------------
Cash flow
information
Net cash
provided by
operating
activities $ 557,645 $ 570,210 $ 2,222,625 $ 2,136,860
Net cash used in
investing
activities (608,914) (161,528) (1,085,206) (39,168)
Net cash
provided by
(used in)
financing
activities 693,472 (361,126) (1,408,392) (1,280,015)
---------------- ------------------ ------------------ ---------------- ----------------
Western Midstream Partners, LP
RECONCILIATION OF GAAP TO NON-GAAP MEASURES (CONTINUED)
(Unaudited)
Distributable Cash Flow
Three Months Ended Year Ended
----------------------------------------
December 31, September 30, December 31, December 31,
thousands 2025 2025 2025 2024
------------------ -------------------- -------------------- ------------------- -------------------
Reconciliation of Net income (loss) to
Distributable Cash Flow
Net income (loss) $ 196,269 $ 348,872 $ 1,212,455 $ 1,611,252
Add:
Distributions from
equity
investments 27,147 29,751 122,364 142,236
Non-cash
equity-based
compensation
expense 21,386 10,456 50,803 37,994
Income tax expense 7,323 2,089 15,086 18,111
Depreciation and
amortization 197,882 170,323 710,778 650,428
Long-lived asset
and other
impairments 2,509 11,562 14,760 6,206
Other expense 17 53 303 248
Less:
Recognized service
revenues - fee
based (less than)
in excess of
customer
billings (31,627) (29,919) (123,906) (168,966)
Gain (loss) on
divestiture and
other, net (3,065) (2,470) (11,113) 296,771
Gain (loss) on
early
extinguishment of
debt -- -- -- 5,403
Equity income, net
-- related
parties 21,378 16,847 85,788 112,385
Items impacting
comparability (113,188) -- (113,188) --
Cash paid for
maintenance
capital
expenditures 35,777 25,026 98,603 97,439
Capitalized
interest 3,518 2,337 10,186 15,215
Cash paid for
(reimbursement
of) income taxes 806 -- 3,107 2,225
Other income (net
of interest
income) 87 223 639 299
Distributable cash
flow attributable
to noncontrolling
interests (1) 11,726 13,807 51,033 48,764
------------------- -------------------- -------------------- ------------------- -------------------
Distributable cash
flow $ 527,121 $ 547,255 $ 2,125,400 $ 2,056,940
------------------- -------------------- -------------------- ------------------- -------------------
Reconciliation of Adjusted EBITDA to
Distributable Cash Flow
Adjusted EBITDA $ 635,582 $ 633,752 $ 2,480,782 $ 2,344,038
Less:
Recognized service
revenues - fee
based (less than)
in excess of
customer
billings (31,627) (29,919) (123,906) (168,966)
Capitalized
interest 3,518 2,337 10,186 15,215
Cash paid for
maintenance
capital
expenditures 35,777 25,026 98,603 97,439
Cash paid for
(reimbursement
of) income taxes 806 -- 3,107 2,225
Interest expense
(net of interest
income) 102,055 90,822 374,500 347,071
Distributable cash
flow attributable
to noncontrolling
interests (1) (2,068) (1,769) (7,108) (5,886)
------------------- -------------------- -------------------- ------------------- -------------------
Distributable cash
flow $ 527,121 $ 547,255 $ 2,125,400 $ 2,056,940
------------------- -------------------- -------------------- ------------------- -------------------
Weighted-average
common units
outstanding -
diluted 402,464 382,788 387,880 382,455
Weighted-average
general partner
units 9,060 9,060 9,060 9,060
------------------- -------------------- -------------------- ------------------- -------------------
(1) Includes (i) the 25% third-party interest in Chipeta and (ii) the 1.9%
limited partner interest in WES Operating owned by an Occidental
subsidiary as of December 31, 2025, and 2.0% for all other periods
presented, which collectively represent WES's noncontrolling interests.
Western Midstream Partners, LP
OPERATING STATISTICS
(Unaudited)
Three Months Ended Year Ended
----------------------------------------------------
December 31, September 30, Inc/ December 31, December 31, Inc/
2025 2025 (Dec) 2025 2024 (Dec)
---------------- --------------------- --------------------- ------ --------------------- --------------------- ------
Throughput for natural-gas assets (MMcf/d)
Gathering,
treating, and
transportation 381 394 (3) % 375 453 (17) %
Processing 4,437 4,602 (4) % 4,479 4,256 5 %
Equity
investments
(1) 525 553 (5) % 550 517 6 %
----------------- --------------------- --------------------- ------ --------------------- --------------------- ------
Total throughput 5,343 5,549 (4) % 5,404 5,226 3 %
Throughput
attributable to
noncontrolling
interests (2) 181 191 (5) % 178 174 2 %
----------------- --------------------- --------------------- ------ --------------------- --------------------- ------
Total throughput
attributable to
WES for
natural-gas
assets 5,162 5,358 (4) % 5,226 5,052 3 %
----------------- --------------------- --------------------- ------ --------------------- --------------------- ------
Throughput for crude-oil and NGLs assets (MBbls/d)
Gathering,
treating, and
transportation 419 418 -- % 420 397 6 %
Equity
investments
(1) 99 102 (3) % 104 144 (28) %
----------------- --------------------- --------------------- ------ --------------------- --------------------- ------
Total throughput 518 520 -- % 524 541 (3) %
Throughput
attributable to
noncontrolling
interests (2) 10 10 -- % 10 11 (9) %
----------------- --------------------- --------------------- ------ --------------------- --------------------- ------
Total throughput
attributable to
WES for
crude-oil and
NGLs assets 508 510 -- % 514 530 (3) %
----------------- --------------------- --------------------- ------ --------------------- --------------------- ------
Throughput for produced-water assets (MBbls/d)
Gathering and
disposal 2,744 1,242 121 % 1,608 1,147 40 %
Throughput
attributable to
noncontrolling
interests (2) 51 25 104 % 30 23 30 %
----------------- --------------------- --------------------- ------ --------------------- --------------------- ------
Total throughput
attributable to
WES for
produced-water
assets 2,693 1,217 121 % 1,578 1,124 40 %
----------------- --------------------- --------------------- ------ --------------------- --------------------- ------
Per-Mcf Gross
margin for
natural-gas
assets (3) $ 1.03 $ 1.06 (3) % $ 1.07 $ 1.08 (1) %
Per-Bbl Gross
margin for
crude-oil and
NGLs assets (3) 1.91 2.25 (15) % 2.13 2.00 6 %
Per-Bbl Gross
margin for
produced-water
assets (3) 0.68 0.80 (15) % 0.74 0.81 (9) %
Per-Mcf Adjusted
Gross Margin for
natural-gas
assets (4) $ 1.26 $ 1.27 (1) % $ 1.30 $ 1.30 -- %
Per-Bbl Adjusted
Gross Margin for
crude-oil and
NGLs assets (4) 2.77 3.10 (11) % 3.01 2.94 2 %
Per-Bbl Adjusted
Gross Margin for
produced-water
assets (4) 0.83 0.94 (12) % 0.89 0.96 (7) %
----------------- --------------------- --------------------- ------ --------------------- --------------------- ------
(1) Represents our share of average throughput for investments accounted for
under the equity method of accounting.
(2) Includes (i) the 1.9% limited partner interest in WES Operating owned by
an Occidental subsidiary as of December 31, 2025, and 2.0% for all other
periods presented, and (ii) for natural-gas assets, the 25% third-party
interest in Chipeta, which collectively represent WES's noncontrolling
interests.
(3) Average for period. Calculated as Gross margin for natural-gas assets,
crude-oil and NGLs assets, or produced-water assets, divided by the
respective total throughput (MMcf or MBbls) for natural-gas assets,
crude-oil and NGLs assets, or produced-water assets.
(4) Average for period. Calculated as Adjusted Gross Margin for natural-gas
assets, crude-oil and NGLs assets, or produced-water assets, divided by
the respective total throughput (MMcf or MBbls) attributable to WES for
natural-gas assets, crude-oil and NGLs assets, or produced-water assets.
Western Midstream Partners, LP
OPERATING STATISTICS (CONTINUED)
(Unaudited)
Three Months Ended Year Ended
---------------------------
December December December
31, September Inc/ 31, 31, Inc/
2025 30, 2025 (Dec) 2025 2024 (Dec)
--------------- -------- --------- ------ -------- -------- -------
Throughput for natural-gas assets (MMcf/d)
Operated
Delaware Basin 1,974 2,113 (7) % 2,042 1,871 9 %
DJ Basin 1,530 1,497 2 % 1,470 1,436 2 %
Powder River
Basin 383 424 (10) % 437 456 (4) %
Other 931 962 (3) % 905 908 -- %
---------------- -------- --------- ------ -------- -------- -------
Total operated
throughput for
natural-gas
assets 4,818 4,996 (4) % 4,854 4,671 4 %
---------------- -------- --------- ------ -------- -------- -------
Non-operated
Equity
investments 525 553 (5) % 550 517 6 %
Other -- -- -- % -- 38 (100) %
---------------- -------- --------- ------ -------- -------- -------
Total
non-operated
throughput for
natural-gas
assets 525 553 (5) % 550 555 (1) % ---------------- -------- --------- ------ -------- -------- ------- Total throughput for natural-gas assets 5,343 5,549 (4) % 5,404 5,226 3 % ---------------- -------- --------- ------ -------- -------- ------- Throughput for crude-oil and NGLs assets (MBbls/d) Operated Delaware Basin 261 245 7 % 258 243 6 % DJ Basin 95 105 (10) % 97 92 5 % Powder River Basin 26 27 (4) % 27 25 8 % Other 37 41 (10) % 38 37 3 % ---------------- -------- --------- ------ -------- -------- ------- Total operated throughput for crude-oil and NGLs assets 419 418 -- % 420 397 6 % ---------------- -------- --------- ------ -------- -------- ------- Non-operated Equity investments 99 102 (3) % 104 144 (28) % ---------------- -------- --------- ------ -------- -------- ------- Total non-operated throughput for crude-oil and NGLs assets 99 102 (3) % 104 144 (28) % ---------------- -------- --------- ------ -------- -------- ------- Total throughput for crude-oil and NGLs assets 518 520 -- % 524 541 (3) % ---------------- -------- --------- ------ -------- -------- ------- Throughput for produced-water assets (MBbls/d) Operated Delaware Basin 2,744 1,242 121 % 1,608 1,147 40 % Total operated throughput for produced-water assets 2,744 1,242 121 % 1,608 1,147 40 % ---------------- -------- --------- ------ -------- -------- -------
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SOURCE Western Midstream Partners, LP
(END) Dow Jones Newswires
February 18, 2026 16:05 ET (21:05 GMT)