Key Developments:
- Completed accretive $100 million repurchase of Class B units
of Hess Midstream Operations LP in January 2025.
- Increased quarterly cash distribution to $0.7012 per Class A
share for the fourth quarter of 2024, an increase of $0.0166 per
Class A share for the fourth quarter of 2024 compared with the
third quarter of 2024. This increase is supported by excess
Adjusted Free Cash Flow after distributions from the reduction in
total units following the accretive $100 million unit
repurchase.
Fourth Quarter 2024 Highlights:
- Net income was $172.1 million. Net cash provided by
operating activities was $258.5 million.
- Net income attributable to Hess Midstream LP was $70.4
million, or $0.68 basic earnings per Class A share, after deduction
for noncontrolling interests.
- Adjusted EBITDA1 was $298.2 million and Adjusted Free Cash
Flow1 was $164.3 million.
- Throughput volumes increased approximately 15% for gas
gathering and gas processing compared with the prior-year quarter,
primarily due to higher production and higher gas capture.
Hess Midstream LP (NYSE: HESM) (“Hess Midstream” or the
"company") today reported fourth quarter 2024 net income of $172.1
million compared with net income of $152.8 million for the fourth
quarter of 2023. After deduction for noncontrolling interests, net
income attributable to Hess Midstream was $70.4 million, or $0.68
basic earnings per Class A share, compared with $0.55 basic
earnings per Class A share in the fourth quarter of 2023. Hess
Midstream generated Adjusted EBITDA of $298.2 million. Net cash
provided by operating activities was $258.5 million and Adjusted
Free Cash Flow was $164.3 million.
“In 2024, we achieved another year of significant volume growth
and made excellent progress on our planned multi-year
infrastructure projects,” said John Gatling, President and Chief
Operating Officer of Hess Midstream. “We remain focused on reliable
operating performance and consistent execution that will drive
increased volumes through our systems and value to our
shareholders.”
Hess Midstream’s results contained in this release are
consolidated to include the noncontrolling interests in Hess
Midstream Operations LP owned by affiliates of Hess Corporation
(“Hess”) and Global Infrastructure Partners, a part of BlackRock
(“GIP” and together with Hess, the “Sponsors”). We refer to certain
results as “attributable to Hess Midstream LP,” which exclude the
noncontrolling interests in Hess Midstream Operations LP owned by
the Sponsors.
(1) Adjusted EBITDA and Adjusted
Free Cash Flow are non‑GAAP measures. Definitions and
reconciliations of these non‑GAAP measures to GAAP reporting
measures appear in the following pages of this release.
Financial Results
Revenues and other income in the fourth quarter of 2024 were
$395.9 million compared with $356.5 million in the prior‑year
quarter, primarily due to higher physical volumes. Fourth quarter
2024 affiliate revenues included $26.7 million of pass-through
electricity, produced water trucking and disposal costs and certain
other fees compared with $21.7 million in the prior-year quarter.
Total operating costs and expenses in the fourth quarter of 2024
were $152.9 million, up from $146.4 million in the prior-year
quarter, primarily due to pass-through electricity and produced
water trucking and disposal costs, costs charged to Hess Midstream
under omnibus and employee secondment agreements, partially offset
by lower maintenance expenses. Interest expense net of interest
income in the fourth quarter of 2024 was $52.2 million, up from
$47.8 million in the prior-year quarter primarily due to the new
$600.0 million 6.500% fixed-rate senior unsecured notes issued in
May 2024, which was partially offset by lower interest on lower
borrowings under the company's revolving credit facility.
Net income for the fourth quarter of 2024 was $172.1 million, or
$0.68 basic earnings per Class A share, after deduction for
noncontrolling interests, compared with $0.55 basic earnings per
Class A share in the prior-year quarter. Substantially all of
income tax expense was attributed to earnings of Class A shares
reflective of Hess Midstream's organizational structure. Net cash
provided by operating activities for the fourth quarter of 2024 was
$258.5 million.
Adjusted EBITDA for the fourth quarter of 2024 was $298.2
million. Adjusted Free Cash Flow for the fourth quarter of 2024 was
$164.3 million.
Full year 2024 net income was $659.0 million, and full year
Adjusted EBITDA was $1,136.1 million. At December 31, 2024, cash
and cash equivalents were $4.3 million and debt was approximately
$3.5 billion, representing leverage of approximately 3.1x Adjusted
EBITDA.
Hess Midstream plans to issue 2025 guidance in a separate
release on January 29, 2025.
Operational Highlights
Throughput volumes increased 16% for gas processing and 15% for
gas gathering in the fourth quarter of 2024 compared with the
fourth quarter of 2023, primarily due to higher production and
higher gas capture. Throughput volumes increased 11% for crude oil
gathering and 6% for terminaling in the fourth quarter of 2024
compared with the fourth quarter of 2023, primarily due to higher
production. Water gathering volumes increased 15%, reflecting
higher crude oil production and increased utilization of Hess
Midstream's water gathering infrastructure.
Capital Expenditures
Capital expenditures for the fourth quarter of 2024 totaled
$84.3 million compared with $71.8 million in the prior-year
quarter, primarily due to continued expansion of Hess Midstream's
gas compression and related pipeline infrastructure.
Quarterly Cash Distributions
On January 27, 2025, the Board of Directors of Hess Midstream's
General Partner declared a quarterly cash distribution of $0.7012
per Class A share for the fourth quarter of 2024, an increase of
$0.0166 per Class A share as compared with the third quarter of
2024. This increase is supported by excess Adjusted Free Cash Flow
after distributions from the reduction in total units following
Hess Midstream's accretive $100 million unit repurchase in January
2025. The distribution is expected to be paid on February 14, 2025,
to shareholders of record as of the close of business on February
6, 2025.
Investor Webcast
Hess Midstream will review fourth quarter financial and
operating results and other matters on a webcast today at 12:00
p.m. Eastern Time. For details about the event, refer to
www.hessmidstream.com.
About Hess Midstream
Hess Midstream LP is a fee‑based, growth-oriented midstream
company that owns, operates, develops and acquires a diverse set of
midstream assets to provide services to Hess and third‑party
customers. Hess Midstream owns oil, gas and produced water handling
assets that are primarily located in the Bakken and Three Forks
Shale plays in the Williston Basin area of North Dakota. More
information is available at www.hessmidstream.com.
Reconciliation of U.S. GAAP to Non‑GAAP Measures
In addition to our financial information presented in accordance
with U.S. generally accepted accounting principles (“GAAP”),
management utilizes certain additional non‑GAAP measures to
facilitate comparisons of past performance and future periods. We
previously reported the non-GAAP measure of “Adjusted EBITDA”,
which we defined as reported net income (loss) before net interest
expense, income tax expense, depreciation and amortization and our
proportional share of depreciation of our equity affiliates, as
further adjusted to eliminate the impact of certain items that we
do not consider indicative of our ongoing operating performance,
such as transaction costs, other income and other non-cash and
non-recurring items, if applicable. As this definition varied from
other definitions of Adjusted EBITDA, we determined it was
appropriate to discontinue reporting Adjusted EBITDA as previously
defined. Beginning with the second quarter of 2024, and as
presented in this release, “Adjusted EBITDA” is defined as reported
net income (loss) before net interest expense, income tax expense,
and depreciation and amortization, as further adjusted to eliminate
the impact of certain items that we do not consider indicative of
our ongoing operating performance, such as transaction costs, other
income and other non‑cash and non‑recurring items, if applicable.
Prior period calculations of Adjusted EBITDA have been recast to
conform to the new presentation, as applicable. We define “Adjusted
Free Cash Flow” as Adjusted EBITDA less net interest, excluding
amortization of deferred financing costs, cash paid for federal and
state income taxes, capital expenditures and ongoing contributions
to equity investments. We define "Gross Adjusted EBITDA Margin" as
the ratio of Adjusted EBITDA to total revenues, less pass-through
revenues. We believe that investors’ understanding of our
performance is enhanced by disclosing these measures as they may
assist in assessing our operating performance as compared to other
publicly traded companies in the midstream energy industry, without
regard to historical cost basis or, in the case of Adjusted EBITDA,
financing methods, and assessing the ability of our assets to
generate sufficient cash flow to make distributions to our
shareholders. These measures are not, and should not be viewed as,
a substitute for GAAP net income or cash flow from operating
activities and should not be considered in isolation.
Reconciliations of Adjusted EBITDA, Adjusted Free Cash Flow and
Gross Adjusted EBITDA Margin to reported net income (GAAP), net
cash provided by operating activities (GAAP) and gross margin
(GAAP), are provided below. Hess Midstream is unable to project net
cash provided by operating activities with a reasonable degree of
accuracy because this metric includes the impact of changes in
operating assets and liabilities related to the timing of cash
receipts and disbursements that may not relate to the period in
which the operating activities occur. Therefore, Hess Midstream is
unable to provide projected net cash provided by operating
activities, or the related reconciliation of projected Adjusted
Free Cash Flow to projected net cash provided by operating
activities without unreasonable effort.
Fourth Quarter
(unaudited)
2024
2023
(in millions)
Reconciliation of Adjusted EBITDA to
net income:
Net income
$
172.1
$
152.8
Plus:
Depreciation expense
51.3
50.4
Interest expense, net
52.2
47.8
Income tax expense
22.6
11.9
Adjusted EBITDA
$
298.2
$
262.9
Reconciliation of Adjusted EBITDA and
Adjusted Free Cash Flow to net cash provided by operating
activities:
Net cash provided by operating
activities
$
258.5
$
247.6
Changes in assets and liabilities
(7.7
)
(28.7
)
Amortization of deferred financing
costs
(2.6
)
(2.1
)
Interest expense, net
52.2
47.8
Income from equity investments
3.9
2.4
Distribution from equity investments
(5.4
)
(3.6
)
Other
(0.7
)
(0.5
)
Adjusted EBITDA
$
298.2
$
262.9
Less:
Interest, net(1)
49.6
45.7
Capital expenditures
84.3
71.8
Adjusted free cash flow
$
164.3
$
145.4
(1) Excludes amortization of deferred
financing costs.
Fourth Quarter
(Unaudited)
2024
2023
(in millions, except ratios)
Reconciliation of gross Adjusted EBITDA
margin to gross margin:
Income from operations
$
243.0
$
210.1
Total revenues
$
395.9
$
356.5
Gross margin
61
%
59
%
Income from operations
$
243.0
$
210.1
Plus:
Depreciation expense
51.3
50.4
Income from equity investments
3.9
2.4
Adjusted EBITDA
$
298.2
$
262.9
Total revenues
$
395.9
$
356.5
Less: affiliate pass-through revenues
26.7
21.7
Revenues excluding pass-through
$
369.2
$
334.8
Gross Adjusted EBITDA margin
81
%
79
%
Year Ended December
31,
2024
2023
(in millions)
(Unaudited)
Reconciliation of Adjusted EBITDA to
net income:
Net income
$
659.0
$
607.7
Plus:
Depreciation expense
203.1
192.5
Interest expense, net
202.2
179.0
Income tax expense
71.8
37.9
Adjusted EBITDA
$
1,136.1
$
1,017.1
Reconciliation of Adjusted EBITDA and
Adjusted Free Cash Flow to net cash provided by operating
activities:
Net cash provided by operating
activities
$
940.3
$
866.4
Changes in assets and liabilities
8.0
(14.5
)
Amortization of deferred financing
costs
(9.6
)
(8.4
)
Interest expense, net
202.2
179.0
Income from equity investments
14.0
7.7
Distribution from equity investments
(17.2
)
(11.4
)
Other
(1.6
)
(1.7
)
Adjusted EBITDA
$
1,136.1
$
1,017.1
Less:
Interest, net(1)
192.6
170.7
Capital expenditures
288.5
245.7
Adjusted free cash flow
$
655.0
$
600.7
(1) Excludes amortization of deferred
financing costs.
Year Ended December
31,
2024
2023
(Unaudited)
(in millions, except ratios)
Reconciliation of gross Adjusted EBITDA
margin to gross margin:
Income from operations
$
919.0
$
816.9
Total revenues
$
1,495.5
$
1,348.6
Gross margin
61
%
61
%
Income from operations
$
919.0
$
816.9
Plus:
Depreciation expense
203.1
192.5
Income from equity investments
14.0
7.7
Adjusted EBITDA
$
1,136.1
$
1,017.1
Total revenues
$
1,495.5
$
1,348.6
Less: affiliate pass-through revenues
97.8
82.9
Revenues excluding pass-through
$
1,397.7
$
1,265.7
Gross Adjusted EBITDA margin
81
%
80
%
Cautionary Note Regarding Forward-looking
Information
This press release contains “forward-looking statements” within
the meaning of U.S. federal securities laws. Words such as
“anticipate,” “estimate,” “expect,” “forecast,” “guidance,”
“could,” “may,” “should,” “would,” “believe,” “intend,” “project,”
“plan,” “predict,” “will,” “target” and similar expressions
identify forward-looking statements, which are not historical in
nature. Our forward-looking statements may include, without
limitation: our future financial and operational results; our
business strategy; our industry; our expected revenues; our future
profitability; our maintenance or expansion projects; our projected
budget and capital expenditures and the impact of such expenditures
on our performance; future economic and market conditions in the
oil and gas industry; expected timing and completion of Hess’
proposed merger with Chevron Corporation (“Chevron”); and our
ability to execute future accretive opportunities, including
incremental return of capital to shareholders.
Forward-looking statements are based on our current
understanding, assessments, estimates and projections of relevant
factors and reasonable assumptions about the future.
Forward-looking statements are subject to certain known and unknown
risks and uncertainties that could cause actual results to differ
materially from our historical experience and our current
projections or expectations of future results expressed or implied
by these forward-looking statements. The following important
factors could cause actual results to differ materially from those
in our forward-looking statements: the ability of Hess and other
parties to satisfy their obligations to us, including Hess’ ability
to meet its drilling and development plans on a timely basis or at
all, its ability to deliver its nominated volumes to us, and the
operation of joint ventures that we may not control; our ability to
generate sufficient cash flow to pay current and expected levels of
distributions; reductions in the volumes of crude oil, natural gas,
natural gas liquids (“NGLs”) and produced water we gather, process,
terminal or store; the actual volumes we gather, process, terminal
or store for Hess in excess of our MVCs and relative to Hess’
nominations; fluctuations in the prices and demand for crude oil,
natural gas and NGLs; changes in global economic conditions and the
effects of a global economic downturn or inflation on our business
and the business of our suppliers, customers, business partners and
lenders; our ability to comply with government regulations or make
capital expenditures required to maintain compliance, including our
ability to obtain or maintain permits necessary for capital
projects in a timely manner, if at all, or the revocation or
modification of existing permits; our ability to successfully
identify, evaluate and timely execute our capital projects,
investment opportunities and growth strategies, whether through
organic growth or acquisitions; costs or liabilities associated
with federal, state and local laws, regulations and governmental
actions applicable to our business, including legislation and
regulatory initiatives relating to environmental protection and
health and safety, such as spills, releases, pipeline integrity and
measures to limit greenhouse gas emissions and climate change; our
ability to comply with the terms of our credit facility,
indebtedness and other financing arrangements, which, if
accelerated, we may not be able to repay; reduced demand for our
midstream services, including the impact of weather or the
availability of the competing third-party midstream gathering,
processing and transportation operations; potential disruption or
interruption of our business due to catastrophic events, such as
accidents, severe weather events, labor disputes, information
technology failures, constraints or disruptions and cyber-attacks;
any limitations on our ability to access debt or capital markets on
terms that we deem acceptable, including as a result of weakness in
the oil and gas industry or negative outcomes within commodity and
financial markets; liability resulting from litigation; risks and
uncertainties associated with Hess’ proposed merger with Chevron;
and other factors described in Item 1A—Risk Factors in our Annual
Report on Form 10-K and any additional risks described in our other
filings with the Securities and Exchange Commission.
As and when made, we believe that our forward-looking statements
are reasonable. However, given these risks and uncertainties,
caution should be taken not to place undue reliance on any such
forward-looking statements since such statements speak only as of
the date when made and there can be no assurance that such
forward-looking statements will occur and actual results may differ
materially from those contained in any forward-looking statement we
make. Except as required by law, we undertake no obligation to
publicly update or revise any forward-looking statements, whether
because of new information, future events or otherwise.
HESS MIDSTREAM LP
SUPPLEMENTAL FINANCIAL DATA
(UNAUDITED)
(IN MILLIONS)
Fourth
Fourth
Third
Quarter
Quarter
Quarter
2024
2023
2024
Statement of
operations
Revenues
Affiliate services
$
388.5
$
351.5
$
371.4
Third-party services
6.5
4.3
6.2
Other income
0.9
0.7
0.9
Total revenues
395.9
356.5
378.5
Costs and expenses
Operating and maintenance expenses
(exclusive of depreciation shown separately below)
92.7
88.0
89.0
Depreciation expense
51.3
50.4
51.5
General and administrative expenses
8.9
8.0
6.3
Total operating costs and expenses
152.9
146.4
146.8
Income from operations
243.0
210.1
231.7
Income from equity investments
3.9
2.4
3.7
Interest expense, net
52.2
47.8
51.8
Income before income tax expense
194.7
164.7
183.6
Income tax expense
22.6
11.9
18.9
Net income
$
172.1
$
152.8
$
164.7
Less: Net income attributable to
noncontrolling interest
101.7
115.3
106.1
Net income attributable to Hess Midstream
LP
$
70.4
$
37.5
$
58.6
Net income attributable to Hess Midstream
LP per Class A share:
Basic
$
0.68
$
0.55
$
0.63
Diluted
$
0.68
$
0.55
$
0.63
Weighted average Class A shares
outstanding
Basic
104.1
68.4
93.0
Diluted
104.1
68.4
93.0
HESS MIDSTREAM LP
SUPPLEMENTAL FINANCIAL DATA
(UNAUDITED)
(IN MILLIONS)
Year Ended December
31,
2024
2023
Statement of
operations
Revenues
Affiliate services
$
1,467.8
$
1,338.1
Third-party services
24.1
8.0
Other income
3.6
2.5
Total revenues
1,495.5
1,348.6
Costs and expenses
Operating and maintenance expenses
(exclusive of depreciation shown separately below)
347.3
313.0
Depreciation expense
203.1
192.5
General and administrative expenses
26.1
26.2
Total operating costs and expenses
576.5
531.7
Income from operations
919.0
816.9
Income from equity investments
14.0
7.7
Interest expense, net
202.2
179.0
Income before income tax expense
730.8
645.6
Income tax expense
71.8
37.9
Net income
$
659.0
$
607.7
Less: Net income attributable to
noncontrolling interest
435.9
489.1
Net income attributable to Hess Midstream
LP
$
223.1
$
118.6
Net income attributable to Hess Midstream
LP per Class A share:
Basic:
$
2.51
$
2.11
Diluted:
$
2.49
$
2.08
Weighted average Class A shares
outstanding
Basic
89.0
56.2
Diluted
89.0
56.3
HESS MIDSTREAM LP
SUPPLEMENTAL FINANCIAL DATA
(UNAUDITED)
(IN MILLIONS)
Fourth Quarter 2024
Gathering
Processing and Storage
Terminaling and Export
Interest and Other
Total
Statement of
operations
Revenues
Affiliate services
$
209.9
$
149.7
$
28.9
$
-
$
388.5
Third-party services
2.1
4.3
0.1
-
6.5
Other income
-
-
0.9
-
0.9
Total revenues
212.0
154.0
29.9
-
395.9
Costs and expenses
Operating and maintenance expenses
(exclusive of depreciation shown separately below)
55.1
30.1
7.5
-
92.7
Depreciation expense
32.2
14.8
4.3
-
51.3
General and administrative expenses
3.5
1.9
0.3
3.2
8.9
Total operating costs and expenses
90.8
46.8
12.1
3.2
152.9
Income (loss) from operations
121.2
107.2
17.8
(3.2
)
243.0
Income from equity investments
-
3.9
-
-
3.9
Interest expense, net
-
-
-
52.2
52.2
Income before income tax expense
121.2
111.1
17.8
(55.4
)
194.7
Income tax expense
-
-
-
22.6
22.6
Net income (loss)
121.2
111.1
17.8
(78.0
)
172.1
Less: Net income (loss) attributable to
noncontrolling interest
63.4
58.1
9.2
(29.0
)
101.7
Net income (loss) attributable to Hess
Midstream LP
$
57.8
$
53.0
$
8.6
$
(49.0
)
$
70.4
Fourth Quarter 2023
Gathering
Processing and Storage
Terminaling and Export
Interest and Other
Total
Statement of
operations
Revenues
Affiliate services
$
191.9
$
128.4
$
31.2
$
-
$
351.5
Third-party services
1.4
2.9
-
-
4.3
Other income
-
-
0.7
-
0.7
Total revenues
193.3
131.3
31.9
-
356.5
Costs and expenses
Operating and maintenance expenses
(exclusive of depreciation shown separately below)
50.6
28.3
9.1
-
88.0
Depreciation expense
29.7
16.4
4.3
-
50.4
General and administrative expenses
3.5
1.8
0.5
2.2
8.0
Total operating costs and expenses
83.8
46.5
13.9
2.2
146.4
Income (loss) from operations
109.5
84.8
18.0
(2.2
)
210.1
Income from equity investments
-
2.4
-
-
2.4
Interest expense, net
-
-
-
47.8
47.8
Income before income tax expense
109.5
87.2
18.0
(50.0
)
164.7
Income tax expense
-
-
-
11.9
11.9
Net income (loss)
109.5
87.2
18.0
(61.9
)
152.8
Less: Net income (loss) attributable to
noncontrolling interest
76.6
61.0
12.7
(35.0
)
115.3
Net income (loss) attributable to Hess
Midstream LP
$
32.9
$
26.2
$
5.3
$
(26.9
)
$
37.5
HESS MIDSTREAM LP
SUPPLEMENTAL FINANCIAL DATA
(UNAUDITED)
(IN MILLIONS)
Third Quarter 2024
Gathering
Processing and Storage
Terminaling and Export
Interest and Other
Total
Statement of
operations
Revenues
Affiliate services
$
201.7
$
140.8
$
28.9
$
-
$
371.4
Third-party services
1.8
4.3
0.1
-
6.2
Other income
-
-
0.9
-
0.9
Total revenues
203.5
145.1
29.9
-
378.5
Costs and expenses
Operating and maintenance expenses
(exclusive of depreciation shown separately below)
51.3
30.3
7.4
-
89.0
Depreciation expense
32.2
15.0
4.3
-
51.5
General and administrative expenses
2.4
1.2
0.3
2.4
6.3
Total operating costs and expenses
85.9
46.5
12.0
2.4
146.8
Income (loss) from operations
117.6
98.6
17.9
(2.4
)
231.7
Income from equity investments
-
3.7
-
-
3.7
Interest expense, net
-
-
-
51.8
51.8
Income before income tax expense
117.6
102.3
17.9
(54.2
)
183.6
Income tax expense
-
-
-
18.9
18.9
Net income (loss)
117.6
102.3
17.9
(73.1
)
164.7
Less: Net income (loss) attributable to
noncontrolling interest
68.0
59.0
10.5
(31.4
)
106.1
Net income (loss) attributable to Hess
Midstream LP
$
49.6
$
43.3
$
7.4
$
(41.7
)
$
58.6
HESS MIDSTREAM LP
SUPPLEMENTAL OPERATING DATA
(UNAUDITED)
(IN THOUSANDS)
Fourth
Fourth
Third
Quarter
Quarter
Quarter
2024
2023
2024
Throughput
volumes
Gas gathering - Mcf of natural gas per
day
463
403
442
Crude oil gathering - bopd
120
108
116
Gas processing - Mcf of natural gas per
day
447
387
419
Crude terminals - bopd
127
120
122
NGL loading - blpd
13
16
15
Water gathering - blpd
130
113
128
Year Ended December
31,
2024
2023
Throughput
volumes
Gas gathering - Mcf of natural gas per
day
437
381
Crude oil gathering - bopd
114
100
Gas processing - Mcf of natural gas per
day
420
367
Crude terminals - bopd
123
115
NGL loading - blpd
14
13
Water gathering - blpd
125
95
View source
version on businesswire.com: https://www.businesswire.com/news/home/20250129504103/en/
For Hess Midstream LP
Investor Contact: Jennifer Gordon (212) 536-8244
Media Contact: Lorrie Hecker (212) 536-8250
Grafico Azioni Hess Midstream (NYSE:HESM)
Storico
Da Gen 2025 a Feb 2025
Grafico Azioni Hess Midstream (NYSE:HESM)
Storico
Da Feb 2024 a Feb 2025
