Hess Midstream LP Reports Estimated Results for the Second Quarter of 2020

Hess Midstream LP (NYSE: HESM) (“Hess Midstream”) today reported second quarter 2020 net income of $107.8 million compared with net income of $74.4 million for the second quarter of 2019, as recast for the 2019 acquisition of Hess Infrastructure Partners LP (“HIP”) by Hess Midstream Operations LP (formerly known as Hess Midstream Partners LP) (the “Partnership”), Hess Midstream’s controlled subsidiary. After deduction for noncontrolling interests, net income attributable to Hess Midstream was $5.3 million, or $0.29 per Class A share. Hess Midstream generated Adjusted EBITDA of $172.8 million. DCF for the second quarter of 2020 was $150.0 million and free cash flow was $94.0 million.

1 Adjusted EBITDA, DCF and 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.

Commenting on the second quarter 2020 results, John Gatling, President and Chief Operating Officer of Hess Midstream said, “Second quarter results reflect strong Bakken performance by Hess Corporation, which drove our throughputs above expectations, and contributed to Hess Midstream exceeding second quarter guidance. We continue to deliver solid financial results supported by our contract with Hess, which drives our increased 2020 guidance, and positions us well to deliver on the 25% Adjusted EBITDA growth and free cash flow we are projecting for 2021.”

Hess Midstream’s results contained in this release include the historical results of HIP for all periods prior to the closing of the Partnership’s acquisition of HIP, incentive distribution rights simplification and conversion from a master limited partnership into an “Up-C” structure on December 16, 2019 (collectively, the “Transaction”), which was accounted for as a business combination of entities under common control. We refer to certain results as “attributable to Hess Midstream LP,” which exclude (i) the noncontrolling interests in the Partnership retained by affiliates of Hess Corporation (“Hess”) and Global Infrastructure Partners, (ii) the noncontrolling interests in the historical operating subsidiaries of the Partnership, and (iii) historical activity of HIP prior to its acquisition by the Partnership, which is included in “net parent investment.”

Ongoing Response to COVID-19

The safety of our workforce and the communities where we operate is our top priority. A cross-functional response team remains in place to coordinate our COVID-19 response from a health and safety perspective and to ensure that the detailed prevention protocols in place at all Hess Midstream assets are based on the most current recommendations by government and public health agencies. While the pandemic has not impacted our throughput volumes, earlier this month the decision was made to defer the planned maintenance turnaround at the Tioga Gas Plant (“TGP”) until 2021 to ensure its safe and timely execution in light of COVID-19.

Financial Results

Revenues and other income in the second quarter of 2020 were $269.8 million compared to $190.3 million in the prior-year quarter. Second quarter 2020 revenues included $46.0 million of pass-through rail transportation, electricity, produced water trucking and disposal costs and $3.1 million of shortfall fee payments related to minimum volume commitments compared to $26.4 million and $0.7 million, respectively, in the prior-year quarter. Revenues were up primarily attributable to higher throughput volumes and tariff rates. Total costs and expenses in the second quarter of 2020 were $138.0 million up from $99.1 million in the prior-year quarter, primarily attributable to higher pass-through rail transportation costs, maintenance expenditures on expanded infrastructure and initial costs related to the TGP turnaround originally scheduled for the third quarter of 2020 and now deferred until 2021.

Net income for the second quarter of 2020 was $107.8 million and net cash provided by operating activities for the quarter was $177.4 million.

Adjusted EBITDA for the second quarter of 2020 was $172.8 million. Relative to distributions, DCF for the second quarter of 2020 of $150.0 million resulted in an approximately 1.2x distribution coverage ratio. Free cash flow for the second quarter of 2020 was $94.0 million.

Operational Highlights

Throughput volumes were up in all segments in the second quarter of 2020 compared with the second quarter of 2019 driven by higher Hess production and placing the Little Missouri 4 gas processing plant in service in the third quarter of 2019. In the gathering segment, throughput volumes increased 29% for crude oil gathering, 19% for gas gathering, and 78% for water gathering. In the gas processing segment, throughput volumes increased 21%, and in the crude oil terminaling segment, throughput volumes increased 17%. Third parties comprised approximately 11% of gas and 8% of crude oil volumes for the second quarter of 2020.

Capital Expenditures

Capital expenditures for the second quarter of 2020 totaled $78.8 million, including $77.8 million of expansion capital expenditures and $1.0 million of maintenance capital expenditures. Capital expenditures in the prior-year quarter were $85.2 million, including $68.3 million of expansion capital expenditures, $16.0 million of equity investments associated with the LM4 gas processing plant, and $0.9 million of maintenance capital expenditures. The increase in expansion capital expenditures was primarily attributable to civil and field construction and fabrication activities for the planned expansion of TGP.

Quarterly Cash Distributions

On July 27, 2020, our general partner’s board of directors declared a cash distribution of $0.4363 per Class A share for the second quarter of 2020, an increase of 1.2% over the distribution for the prior quarter, which equals a 5% increase on an annualized basis. The distribution is expected to be paid on August 14, 2020 to shareholders of record as of the close of business on August 6, 2020.

Forecasts for 2021 and 2022

Hess Midstream is reaffirming its guidance of an expected 25% increase in Adjusted EBITDA in 2021 compared to full year 2020, driven by the annual tariff rate redetermination process at the end of 2020 and higher minimum volume commitments (“MVC”) in 2021. As part of the annual tariff rate redetermination process that is expected at the end of 2020, tariff rates for 2021 and all forward years of the contract will be reset to maintain contractual return on capital deployed. Based on the expected Adjusted EBITDA increase, expected expansion capital expenditures of approximately $100 million and considering the deferral of the TGP turnaround to 2021, Hess Midstream is reaffirming its forecast of $750 million of free cash flow in both 2021 and 2022 with revenues that are approximately 95% MVC protected as volumes are generally expected to be below MVC levels. Hess Midstream is reaffirming its 5% annual distribution per share growth rate target through 2022. In both 2021 and 2022, Hess Midstream is reaffirming its expectation of increased distribution coverage of approximately 1.4x and is expecting to fully fund interest and distributions with free cash flow without any incremental debt or equity.

Updated 2020 Guidance

Hess Midstream is raising its full year 2020 guidance based on deferral of the TGP turnaround to 2021 and strong second quarter 2020 results as follows:

 

 

Year Ending

 

 

December 31, 2020

 

 

(Unaudited)

Financials (in millions)

 

 

 

 

Net income

 

$

425 - 445

Adjusted EBITDA

 

$

690 - 710

Distributable cash flow

 

$

590 - 610

Expansion capital

 

$

 

250

Maintenance capital

 

$

 

10

Free cash flow

 

$

430 - 450

 

 

 

Year Ending

 

 

December 31, 2020

 

 

(Unaudited)

Throughput volumes (in thousands)

 

 

Gas gathering - Mcf of natural gas per day

 

290 - 300

Crude oil gathering - barrels of oil per day

 

125 - 135

Gas processing - Mcf of natural gas per day

 

275 - 285

Crude terminals - barrels of oil per day

 

140 - 150

Water gathering - barrels of liquids per day

 

55 - 60

 

Investor Webcast

Hess Midstream will review second quarter financial and operating results and other matters on a webcast today at 12:00 p.m. Eastern Time. The live audio webcast is accessible on the Investor page of our website www.hessmidstream.com. Conference call numbers for participation are 866-395-9624, or 213-660-0871 for international callers. The passcode number is 6989866. A replay of the conference call will be available at the same location following the event.

About Hess Midstream

Hess Midstream LP is a fee‑based, growth-oriented midstream company that 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. “Adjusted EBITDA” presented in this release is 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, non‑recurring items, if applicable. “Distributable Cash Flow” or “DCF” is defined as Adjusted EBITDA less net interest, excluding amortization of deferred financing costs, cash paid for federal and state income taxes and maintenance capital expenditures. DCF does not reflect changes in working capital balances. “Free cash flow” is defined as Adjusted EBITDA less capital expenditures, excluding acquisition capital expenditures. 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, DCF and free cash flow to reported net income (GAAP) and net cash provided by operating activities (GAAP), are provided below.

 

 

 

Second Quarter

 

 

 

(unaudited)

 

 

 

2020

 

 

2019(1)

 

 

 

 

 

 

 

 

 

 

(in millions, except ratio and per-share/limited partner unit data)

 

 

 

 

 

 

 

 

Reconciliation of Adjusted EBITDA and

Distributable Cash Flow to net income:

 

 

 

 

 

 

 

 

Net income

 

$

107.8

 

 

$

74.4

 

Plus:

 

 

 

 

 

 

 

 

Depreciation expense

 

 

38.9

 

 

 

35.4

 

Proportional share of equity affiliates' depreciation

 

 

1.2

 

 

 

-

 

Interest expense, net

 

 

23.3

 

 

 

16.8

 

Income tax expense (benefit)

 

 

1.7

 

 

 

-

 

Loss (gain) on sale of property, plant and equipment

 

 

(0.1

)

 

 

-

 

Adjusted EBITDA

 

 

172.8

 

 

 

126.6

 

Less:

 

 

 

 

 

 

 

 

Interest, net

 

 

21.8

 

 

 

 

 

Maintenance capital expenditures

 

 

1.0

 

 

 

 

 

Distributable cash flow

 

$

150.0

 

 

 

 

 

Less:

 

 

 

 

 

 

 

 

Adjusted EBITDA attributable to noncontrolling interest

and net parent investment

 

 

 

 

 

 

102.4

 

Cash interest paid, net

 

 

 

 

 

 

0.3

 

Maintenance capital expenditures, net

 

 

 

 

 

 

0.6

 

Distributable cash flow, as previously reported(2)

 

 

 

 

 

$

23.3

 

 

 

 

 

 

 

 

 

 

Reconciliation of Adjusted EBITDA,

Distributable Cash Flow and free cash flow

to net cash provided by operating activities:

 

 

 

 

 

 

 

 

Net cash provided by operating activities

 

$

177.4

 

 

$

149.2

 

Changes in assets and liabilities

 

 

(24.4

)

 

 

(38.0

)

Amortization of deferred financing costs

 

 

(1.7

)

 

 

(1.3

)

Proportional share of equity affiliates' depreciation

 

 

1.2

 

 

 

-

 

Interest expense, net

 

 

23.3

 

 

 

16.8

 

Earnings from equity investments

 

 

0.9

 

 

 

-

 

Distribution from equity investments

 

 

(3.8

)

 

 

-

 

Other

 

 

(0.1

)

 

 

(0.1

)

Adjusted EBITDA

 

$

172.8

 

 

$

126.6

 

Less:

 

 

 

 

 

 

 

 

Interest, net

 

 

21.8

 

 

 

 

 

Maintenance capital expenditures

 

 

1.0

 

 

 

 

 

Distributable cash flow

 

$

150.0

 

 

 

 

 

Less:

 

 

 

 

 

 

 

 

Adjusted EBITDA attributable to noncontrolling interest

and net parent investment

 

 

 

 

 

 

102.4

 

Cash interest paid, net

 

 

 

 

 

 

0.3

 

Maintenance capital expenditures, net

 

 

 

 

 

 

0.6

 

Distributable cash flow, as previously reported(2)

 

 

 

 

 

$

23.3

 

Adjusted EBITDA

 

$

172.8

 

 

$

126.6

 

Less:

 

 

 

 

 

 

 

 

Capital expenditures

 

 

78.8

 

 

 

85.2

 

Free cash flow

 

$

94.0

 

 

$

41.4

 

Distributed cash flow(2)

 

 

124.1

 

 

 

22.8

 

Distribution coverage ratio

 

 

1.2

x

 

 

1.0

x

Distribution per Class A share/limited partner unit

 

$

0.4363

 

 

$

0.3970

 

(1) Prior period information has been retrospectively adjusted for the acquisition of Hess Infrastructure Partners LP.

(2) Distributable cash flow prior to the Transaction is calculated net of any amounts attributable to noncontrolling interest. Subsequent to the Transaction, Hess Midstream will generally make cash distributions to holders of Class A Shares and to holders of noncontrolling interest pro rata. Therefore, distributable and distributed cash flow subsequent to the Transaction includes amounts attributable to noncontrolling interest.

 

Guidance

 

 

Year Ending

 

 

December 31, 2020

 

 

(Unaudited)

 

(in millions)

 

 

 

 

Reconciliation of Adjusted EBITDA, Distributable Cash Flow

and free cash flow to net income:

 

 

 

 

Net income

$

425 - 445

 

Plus:

 

 

 

 

Depreciation expense*

 

 

155

 

Interest expense, net

 

 

100

 

Income tax expense

 

 

10

 

Adjusted EBITDA

 

690 - 710

 

Less:

 

 

 

 

Interest, net, and maintenance capital expenditures

 

 

100

 

Distributable cash flow

 

590 - 610

 

 

 

 

 

 

Adjusted EBITDA

 

690 - 710

 

Less:

 

 

 

 

Capital expenditures

 

 

260

 

Free cash flow

 

430 - 450

 

*Includes proportional share of equity affiliates' depreciation

 

 

 

 

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; and future economic and market conditions in the oil and gas industry.

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 direct and indirect effects of the COVID-19 global pandemic and other public health developments on our business and those of our business partners, suppliers and customers, including Hess; 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 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, NGLs and produced water we gather, process, terminal or store; fluctuations in the prices and demand for crude oil, natural gas and NGLs, including as a result of the COVID-19 global pandemic; changes in global economic conditions and the effects of a global economic downturn 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 safety, such as spills, releases, pipeline integrity and measures to limit greenhouse gas emissions; 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; 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)

 

 

 

Second

 

 

Second

 

 

First

 

 

Quarter

 

 

Quarter

 

 

Quarter

 

 

2020

 

 

2019(1)

 

 

2020

Statement of operations

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

Affiliate services

 

$

269.8

 

 

$

190.2

 

 

$

290.6

Other income

 

 

-

 

 

 

0.1

 

 

 

0.2

Total revenues

 

 

269.8

 

 

 

190.3

 

 

 

290.8

Costs and expenses

 

 

 

 

 

 

 

 

 

 

 

Operating and maintenance expenses

(exclusive of depreciation shown separately below)

 

 

95.0

 

 

 

57.9

 

 

 

91.9

Depreciation expense

 

 

38.9

 

 

 

35.4

 

 

 

38.5

General and administrative expenses

 

 

4.1

 

 

 

5.8

 

 

 

7.6

Total costs and expenses

 

 

138.0

 

 

 

99.1

 

 

 

138.0

Income from operations

 

 

131.8

 

 

 

91.2

 

 

 

152.8

Income from equity investments

 

 

0.9

 

 

 

-

 

 

 

2.7

Interest expense, net

 

 

23.3

 

 

 

16.8

 

 

 

24.8

Gain from sale of property, plant and equipment

 

 

0.1

 

 

 

-

 

 

 

-

Income before income tax expense (benefit)

 

 

109.5

 

 

 

74.4

 

 

 

130.7

Income tax expense (benefit)

 

 

1.7

 

 

 

-

 

 

 

1.7

Net income

 

$

107.8

 

 

$

74.4

 

 

$

129.0

Less: Net income (loss) attributable to net parent investment

 

 

-

 

 

 

(16.5

)

 

 

-

Less: Net income attributable to noncontrolling

interest

 

 

102.5

 

 

 

74.1

 

 

 

122.5

Net income attributable to Hess Midstream LP

 

 

5.3

 

 

 

16.8

 

 

 

6.5

Less: General partner's interest in net income

 

 

-

 

 

 

1.0

 

 

 

-

Limited partners' interest in net income

 

$

5.3

 

 

$

15.8

 

 

$

6.5

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to Hess Midstream LP

per Class A share/limited partner unit:

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.29

 

 

 

 

 

 

$

0.37

Diluted

 

$

0.29

 

 

 

 

 

 

$

0.35

Net income attributable to Hess Midstream LP

per limited partner unit (basic and diluted):

 

 

 

 

 

 

 

 

 

 

 

Common

 

 

 

 

 

$

0.29

 

 

 

 

Subordinated

 

 

 

 

 

$

0.29

 

 

 

 

Weighted average Class A shares outstanding

subsequent to December 16, 2019:

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

18.0

 

 

 

 

 

 

 

18.0

Diluted

 

 

18.1

 

 

 

 

 

 

 

18.0

Weighted average limited partner units outstanding

prior to December 16, 2019

 

 

 

 

 

 

 

 

 

 

 

Basic:

 

 

 

 

 

 

 

 

 

 

 

Common

 

 

 

 

 

 

27.3

 

 

 

 

Subordinated

 

 

 

 

 

 

27.3

 

 

 

 

Diluted:

 

 

 

 

 

 

 

 

 

 

 

Common

 

 

 

 

 

 

27.5

 

 

 

 

Subordinated

 

 

 

 

 

 

27.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Prior period information has been retrospectively adjusted for the acquisition of Hess Infrastructure Partners LP.

 

HESS MIDSTREAM LP
SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)
(IN MILLIONS)

 

 

 

Six Months Ended June 30,

 

 

 

2020

 

 

2019 (1)

 

Statement of operations

 

 

 

 

 

 

 

 

Revenues

 

 

 

 

 

 

 

 

Affiliate services

 

$

560.4

 

 

$

379.6

 

Other income

 

 

0.2

 

 

 

0.3

 

Total revenues

 

 

560.6

 

 

 

379.9

 

Costs and expenses

 

 

 

 

 

 

 

 

Operating and maintenance expenses

(exclusive of depreciation shown separately below)

 

 

186.9

 

 

 

112.2

 

Depreciation expense

 

 

77.4

 

 

 

69.0

 

General and administrative expenses

 

 

11.7

 

 

 

11.7

 

Total costs and expenses

 

 

276.0

 

 

 

192.9

 

Income from operations

 

 

284.6

 

 

 

187.0

 

Income from equity investments

 

 

3.6

 

 

 

-

 

Interest expense, net

 

 

48.1

 

 

 

31.8

 

Gain on sale of property, plant and equipment

 

 

0.1

 

 

 

-

 

Income before income tax expense (benefit)

 

 

240.2

 

 

 

155.2

 

Income tax expense (benefit)

 

 

3.4

 

 

 

-

 

Net income

 

$

236.8

 

 

$

155.2

 

Less: Net income (loss) attributable to net parent investment

 

 

-

 

 

 

(31.0

)

Less: Net income attributable to noncontrolling interest

 

 

225.0

 

 

 

151.3

 

Net income attributable to Hess Midstream LP

 

 

11.8

 

 

 

34.9

 

Less: General partner's interest in net income

 

 

-

 

 

 

1.8

 

Limited partners' interest in net income

 

$

11.8

 

 

$

33.1

 

 

 

 

 

 

 

 

 

 

Net income attributable to Hess Midstream LP

per Class A share:

 

 

 

 

 

 

 

 

Basic:

 

$

0.66

 

 

 

 

 

Diluted:

 

$

0.64

 

 

 

 

 

Net income attributable to Hess Midstream LP

per limited partner unit (basic and diluted):

 

 

 

 

 

 

 

 

Common

 

 

 

 

 

$

0.61

 

Subordinated

 

 

 

 

 

$

0.61

 

Weighted average Class A shares outstanding

subsequent to December 16, 2019

 

 

 

 

 

 

 

 

Basic

 

 

18.0

 

 

 

 

 

Diluted

 

 

18.1

 

 

 

 

 

Weighted average limited partner units outstanding

prior to December 16, 2019

 

 

 

 

 

 

 

 

Basic:

 

 

 

 

 

 

 

 

Common

 

 

 

 

 

 

27.3

 

Subordinated

 

 

 

 

 

 

27.3

 

Diluted:

 

 

 

 

 

 

 

 

Common

 

 

 

 

 

 

27.5

 

Subordinated

 

 

 

 

 

 

27.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Prior period information has been retrospectively adjusted for the acquisition of Hess Infrastructure Partners LP.

 

 

HESS MIDSTREAM LP
SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)
(IN MILLIONS)

 

 

 

Second Quarter 2020

 

 

Gathering

 

 

Processing
and
Storage

 

 

Terminaling
and Export

 

 

Interest
and Other

 

 

Total

Statement of operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Affiliate services

 

$

136.4

 

 

$

86.8

 

 

$

46.6

 

 

$

-

 

 

$

269.8

Total revenues

 

 

136.4

 

 

 

86.8

 

 

 

46.6

 

 

 

-

 

 

 

269.8

Costs and expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating and maintenance expenses (exclusive of

depreciation shown separately below)

 

 

39.5

 

 

 

29.0

 

 

 

26.5

 

 

 

-

 

 

 

95.0

Depreciation expense

 

 

23.7

 

 

 

11.2

 

 

 

4.0

 

 

 

-

 

 

 

38.9

General and administrative expenses

 

 

1.6

 

 

 

1.7

 

 

 

0.2

 

 

 

0.6

 

 

 

4.1

Total costs and expenses

 

 

64.8

 

 

 

41.9

 

 

 

30.7

 

 

 

0.6

 

 

 

138.0

Income (loss) from operations

 

 

71.6

 

 

 

44.9

 

 

 

15.9

 

 

 

(0.6

)

 

 

131.8

Income from equity investments

 

 

-

 

 

 

0.9

 

 

 

-

 

 

 

-

 

 

 

0.9

Interest expense, net

 

 

-

 

 

 

-

 

 

 

-

 

 

 

23.3

 

 

 

23.3

Gain on sale of property, plant and equipment

 

 

0.1

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

0.1

Income before income tax expense (benefit)

 

 

71.7

 

 

 

45.8

 

 

 

15.9

 

 

 

(23.9

)

 

 

109.5

Income tax expense (benefit)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

1.7

 

 

 

1.7

Net income (loss)

 

 

71.7

 

 

 

45.8

 

 

 

15.9

 

 

 

(25.6

)

 

 

107.8

Less: Net income (loss) attributable to

noncontrolling interest

 

 

67.1

 

 

 

43.0

 

 

 

14.9

 

 

 

(22.5

)

 

 

102.5

Net income (loss) attributable to

Hess Midstream LP

 

$

4.6

 

 

$

2.8

 

 

$

1.0

 

 

$

(3.1

)

 

$

5.3

 

 

Second Quarter 2019(1)

 

 

 

Gathering

 

 

Processing
and
Storage

 

 

Terminaling
and Export

 

 

Interest
and Other

 

 

Total

 

Statement of operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Affiliate

 

$

97.7

 

 

$

67.5

 

 

$

25.0

 

 

$

-

 

 

$

190.2

 

Other income

 

 

-

 

 

 

-

 

 

 

0.1

 

 

 

-

 

 

 

0.1

 

Total revenues

 

 

97.7

 

 

 

67.5

 

 

 

25.1

 

 

 

-

 

 

 

190.3

 

Costs and expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating and maintenance expenses (exclusive of

depreciation shown separately below)

 

 

33.6

 

 

 

15.1

 

 

 

9.2

 

 

 

-

 

 

 

57.9

 

Depreciation expense

 

 

20.3

 

 

 

11.1

 

 

 

4.0

 

 

 

-

 

 

 

35.4

 

General and administrative expenses

 

 

2.0

 

 

 

1.0

 

 

 

0.2

 

 

 

2.6

 

 

 

5.8

 

Total costs and expenses

 

 

55.9

 

 

 

27.2

 

 

 

13.4

 

 

 

2.6

 

 

 

99.1

 

Income (loss) from operations

 

 

41.8

 

 

 

40.3

 

 

 

11.7

 

 

 

(2.6

)

 

 

91.2

 

Interest expense, net

 

 

-

 

 

 

-

 

 

 

-

 

 

 

16.8

 

 

 

16.8

 

Net income (loss)

 

 

41.8

 

 

 

40.3

 

 

 

11.7

 

 

 

(19.4

)

 

 

74.4

 

Less: Net income (loss) attributable to

net parent investment

 

 

1.1

 

 

 

-

 

 

 

-

 

 

 

(17.6

)

 

 

(16.5

)

Less: Net income (loss) attributable to

noncontrolling interest

 

 

32.6

 

 

 

32.3

 

 

 

9.2

 

 

 

-

 

 

 

74.1

 

Net income (loss) attributable to

Hess Midstream LP

 

$

8.1

 

 

$

8.0

 

 

$

2.5

 

 

$

(1.8

)

 

$

16.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Prior period information has been retrospectively adjusted for the acquisition of Hess Infrastructure Partners LP.

 

HESS MIDSTREAM LP
SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)
(IN MILLIONS)

 

 

 

First Quarter 2020

 

 

Gathering

 

 

Processing
and
Storage

 

 

Terminaling
and Export

 

 

Interest
and Other

 

 

Total

Statement of operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Affiliate services

 

$

141.6

 

 

$

96.8

 

 

$

52.2

 

 

$

-

 

 

$

290.6

Other income

 

 

-

 

 

 

0.2

 

 

 

-

 

 

 

-

 

 

 

0.2

Total revenues

 

 

141.6

 

 

 

97.0

 

 

 

52.2

 

 

 

-

 

 

 

290.8

Costs and expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating and maintenance expenses (exclusive of

depreciation shown separately below)

 

 

40.4

 

 

 

24.2

 

 

 

27.3

 

 

 

-

 

 

 

91.9

Depreciation expense

 

 

23.3

 

 

 

11.2

 

 

 

4.0

 

 

 

-

 

 

 

38.5

General and administrative expenses

 

 

2.0

 

 

 

1.6

 

 

 

0.2

 

 

 

3.8

 

 

 

7.6

Total costs and expenses

 

 

65.7

 

 

 

37.0

 

 

 

31.5

 

 

 

3.8

 

 

 

138.0

Income (loss) from operations

 

 

75.9

 

 

 

60.0

 

 

 

20.7

 

 

 

(3.8

)

 

 

152.8

Income from equity investments

 

 

-

 

 

 

2.7

 

 

 

-

 

 

 

-

 

 

 

2.7

Interest expense, net

 

 

-

 

 

 

-

 

 

 

-

 

 

 

24.8

 

 

 

24.8

Income before income tax expense (benefit)

 

 

75.9

 

 

 

62.7

 

 

 

20.7

 

 

 

(28.6

)

 

 

130.7

Income tax expense (benefit)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

1.7

 

 

 

1.7

Net income (loss)

 

 

75.9

 

 

 

62.7

 

 

 

20.7

 

 

 

(30.3

)

 

 

129.0

Less: Net income (loss) attributable to

noncontrolling interest

 

 

71.1

 

 

 

58.7

 

 

 

19.4

 

 

 

(26.7

)

 

 

122.5

Net income (loss) attributable to

Hess Midstream LP

 

$

4.8

 

 

$

4.0

 

 

$

1.3

 

 

$

(3.6

)

 

$

6.5

 

HESS MIDSTREAM LP
SUPPLEMENTAL OPERATING DATA (UNAUDITED)
(IN THOUSANDS)

 

 

 

Second

 

 

Second

 

 

First

 

 

Quarter

 

 

Quarter

 

 

Quarter

 

 

2020

 

 

2019

 

 

2020

 

 

 

 

 

 

 

 

 

 

 

 

Throughput volumes

 

 

 

 

 

 

 

 

 

 

 

Gas gathering - Mcf of natural gas per day

 

 

307

 

 

 

258

 

 

 

336

Crude oil gathering - bopd

 

 

141

 

 

 

109

 

 

 

150

Gas processing - Mcf of natural gas per day

 

 

289

 

 

 

238

 

 

 

322

Crude terminals - bopd

 

 

144

 

 

 

123

 

 

 

163

NGL loading - blpd

 

 

14

 

 

 

15

 

 

 

15

Water gathering - blpd

 

 

66

 

 

 

37

 

 

 

54

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended June 30,

 

 

 

 

 

 

2020

 

 

2019

Throughput volumes

 

 

 

 

 

 

 

 

 

 

 

Gas gathering - Mcf of natural gas per day

 

 

 

 

 

 

321

 

 

 

253

Crude oil gathering - bopd

 

 

 

 

 

 

145

 

 

 

110

Gas processing - Mcf of natural gas per day

 

 

 

 

 

 

305

 

 

 

237

Crude terminals - bopd

 

 

 

 

 

 

153

 

 

 

123

NGL loading - blpd

 

 

 

 

 

 

15

 

 

 

14

Water gathering - blpd

 

 

 

 

 

 

60

 

 

 

35