UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarter ended June 30, 2025 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-39163 Hess Midstream LP (Exact name of Registrant as specified in its charter) (State or other jurisdiction of incorporation or organization) (I.R.S. ...

Financial Data and Key Metrics Changes - For Q2 2025, net income was $180 million compared to $161 million in Q1 2025, and adjusted EBITDA increased to $316 million from $292 million in Q1 2025 [16][18] - Adjusted EBITDA margin for Q2 was maintained at approximately 80%, above the target of 75%, indicating strong operating leverage [17] - The company expects adjusted free cash flow of approximately $725 million to $775 million for the full year 2025, with capital expenditures projected at $300 million [10][19] Business Line Data and Key Metrics Changes - In Q2 2025, throughput volumes averaged 449 million cubic feet per day for gas processing, 137,000 barrels per day for crude terminaling, and 138,000 barrels per day for water gathering, with gas processing and oil terminaling volumes increasing by approximately 6% and 10% respectively from Q1 2025 [12][13] - Gathering revenues increased by approximately $16 million, processing revenues by $9 million, and terminaling revenues by $4 million compared to Q1 2025 [17] Market Data and Key Metrics Changes - The company is reaffirming its full-year 2025 oil and gas throughput guidance, expecting volume growth in Q3 2025, partially offset by higher seasonal maintenance activity [13] - The North Dakota Pipeline Authority anticipates that Bakken gas will grow over the long term, with oil remaining relatively flat [32] Company Strategy and Development Direction - The company aims to continue delivering operational excellence and financial performance, with a focus on a disciplined, low-risk investment strategy to meet basin demand while maintaining reliable operations [14] - The financial strategy prioritizes return of capital to shareholders, with a targeted annual distribution growth of at least 5% through 2027 [18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the operational performance and growth trajectory, with expectations of approximately 10% volume growth across all oil and gas systems in 2025 compared to 2024 [9] - The company highlighted the importance of the partnership with Chevron to optimize the Bakken development, maintaining a focus on high utilization of infrastructure [60][61] Other Important Information - Hess Midstream's senior unsecured debt was upgraded to an investment grade rating of BBB- following the Chevron merger [10] - The company has returned over $2 billion to shareholders through repurchases since 2021 and increased distributions per Class A share by more than 60% [10] Q&A Session Summary Question: Insights on Chevron's view on Bakken and rig count changes - Management indicated that they are currently running four rigs and have seen strong upstream performance, with updates to the development plan expected towards the end of the year [22][24] Question: Capital allocation and appetite for buybacks - Management confirmed that they expect to continue repurchases at a rate of approximately $100 million per quarter, maintaining their financial flexibility of $1.25 billion through 2027 [25][26] Question: Trends in Gas-to-Oil Ratios (GORs) and Bakken outlook - Management noted that GORs are expected to increase over the long term, with Bakken gas anticipated to grow, while oil production remains stable [31][32] Question: Guidance and performance expectations - Management expressed confidence in maintaining guidance, with expectations of higher EBITDA in the second half of the year despite some seasonal maintenance costs [41][42] Question: Governance structure post-GIP exit - Management emphasized the importance of balanced governance and the implementation of mechanisms requiring independent director approval for key decisions [52][53] Question: Chevron's involvement in buybacks - Management clarified that there would be no change in the buyback strategy, with participation expected to align with public ownership levels [45][46]

Financial Data and Key Metrics Changes - For Q2 2025, net income was $180 million compared to $161 million in Q1 2025, and adjusted EBITDA increased to $316 million from $292 million in Q1 2025 [14][15] - Adjusted EBITDA margin for Q2 was maintained at approximately 80%, above the target of 75% [15] - Total expected capital expenditures for 2025 are approximately $300 million, with adjusted free cash flow expected to be between $725 million and $775 million [8][17] Business Line Data and Key Metrics Changes - In Q2 2025, throughput volumes averaged 449 million cubic feet per day for gas processing, 137,000 barrels per day for crude terminaling, and 138,000 barrels per day for water gathering [11] - Gas processing and oil terminaling volumes increased by approximately 6% and 10% respectively from Q1 2025, driven by strong upstream production performance [11][12] Market Data and Key Metrics Changes - The company expects oil and gas throughput guidance for the full year 2025 to remain unchanged, with volume growth anticipated in Q3 2025, partially offset by higher seasonal maintenance activity [12][16] - The North Dakota Pipeline Authority forecasts that Bakken gas is expected to grow over the long term, while oil production is expected to remain flat [30][31] Company Strategy and Development Direction - The company aims to continue delivering operational excellence and financial performance, with a focus on disciplined, low-risk investments to meet basin demand [13][10] - The financial strategy prioritizes return of capital to shareholders, maintaining one of the highest total shareholder return yields among peers while keeping low leverage ratios [8][9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the operational performance and growth trajectory, with an estimated 11% increase in adjusted EBITDA growth for 2025 [7][8] - The company anticipates generating over $1.25 billion of financial flexibility through 2027 for incremental shareholder returns, including potential unit and share repurchases [9][17] Other Important Information - Hess Midstream's senior unsecured debt was upgraded to an investment grade rating of BBB- following the Chevron merger [9] - The company has returned over $2 billion to shareholders through repurchases since 2021 and increased distributions per Class A share by more than 60% [9] Q&A Session Summary Question: Insights on Chevron's view on Bakken and rig count changes - Management indicated that they are currently running four rigs and have seen strong upstream performance, with updates to the development plan expected towards the end of the year [20][21] Question: Capital allocation and appetite for buybacks - The company confirmed that it has $1.25 billion of financial flexibility through 2027 and plans to continue repurchases at a rate of approximately $100 million per quarter [23][24][26] Question: Trends in Gas-to-Oil Ratios (GORs) and Bakken outlook - Management noted that GORs are expected to increase over the long term, with Bakken gas anticipated to grow while oil production remains flat [30][31] Question: Guidance and performance expectations - Management confirmed strong Q2 performance and maintained guidance, expecting higher EBITDA in the second half of the year despite some seasonal maintenance [38][41] Question: Governance structure post-GIP exit - The company emphasized the importance of balanced governance and has implemented mechanisms requiring independent director approval for key decisions [49][51] Question: Chevron's participation in buybacks - Management stated that there would be no change in the buyback strategy, with Chevron expected to participate similarly to previous arrangements [44][46]

[Q2 2025 Financial and Operational Highlights](index=1&type=section&id=HESS%20MIDSTREAM%20LP%20REPORTS%20ESTIMATED%20RESULTS%20FOR%20THE%20SECOND%20QUARTER%20OF%202025) Hess Midstream achieved strong Q2 2025 financial and operational growth, completing repurchases, increasing distributions, and reaffirming full-year guidance [Overview of Second Quarter 2025 Performance](index=1&type=section&id=Second%20Quarter%202025%20Highlights) Hess Midstream reported strong operational and financial results for Q2 2025, with significant year-over-year growth in key metrics and throughput volumes Q2 2025 Key Financial Metrics (in millions) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net Income | $179.7 | $160.3 | | Net Income attributable to Hess Midstream | $90.3 | - | | Basic Earnings per Class A Share | $0.74 | $0.59 | | Adjusted EBITDA | $316.0 | $276.5 | | Net Cash from Operating Activities | $276.9 | $271.6 | | Adjusted Free Cash Flow | $193.8 | $156.4 | Q2 2025 vs Q2 2024 Throughput Volume Growth | System | YoY Growth | | :--- | :--- | | Gas Processing | 7% | | Oil Terminaling | 9% | | Water Gathering | 11% | - Completed a **$190.0 million** repurchase of Class B units and a **$10.0 million** repurchase of Class A shares, supporting an increased quarterly cash distribution to **$0.7370 per Class A share**[5](index=5&type=chunk)[13](index=13&type=chunk) - The merger between Hess Corporation and Chevron Corporation was completed on July 18, 2025, resulting in Chevron indirectly owning an approximate **37.8%** interest in Hess Midstream[6](index=6&type=chunk) [Financial Performance Analysis](index=2&type=section&id=Financial%20Results) Q2 2025 saw revenue growth driven by volumes and tariffs, increased operating costs, higher interest expense, and improved segment performance [Consolidated Financial Results (Q2 2025)](index=2&type=section&id=Consolidated%20Financial%20Results) Q2 2025 revenues grew due to higher volumes and tariffs, while operating costs and net interest expense increased, leading to higher net income Q2 2025 vs Q2 2024 Financial Comparison (in millions) | Item | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Revenues and other income | $414.2 | $365.5 | | Total operating costs and expenses | $154.0 | $143.2 | | Interest expense, net | $55.4 | $49.7 | | Net income | $179.7 | $160.3 | - Revenue growth was primarily attributed to higher physical volumes and increased tariff rates[8](index=8&type=chunk) - The increase in interest expense was mainly due to the **$600.0 million** 6.500% fixed-rate senior unsecured notes issued in May 2024[8](index=8&type=chunk) - On July 24, 2025, S&P upgraded Hess Midstream's senior unsecured debt to an investment grade rating of **BBB-**[10](index=10&type=chunk) [Segment Performance (Q2 2025)](index=11&type=section&id=Segment%20Performance) All operating segments demonstrated year-over-year growth in Q2 2025, reflecting strong underlying volume growth across the business Segment Income from Operations (in millions) | Segment | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Gathering | $131.8 | $110.9 | | Processing and Storage | $110.6 | $96.6 | | Terminaling and Export | $20.6 | $16.5 | [Operational Performance](index=3&type=section&id=Operational%20Highlights) Q2 2025 operational performance was strong, with increased throughput volumes across all systems driven by higher upstream production [Throughput Volumes](index=3&type=section&id=Throughput%20Volumes) Q2 2025 operational performance was strong, with throughput volumes increasing across all systems compared to the prior-year quarter Q2 2025 vs Q2 2024 Average Daily Throughput Volumes | System | Unit | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Gas gathering | Mcf/day | 464 | 440 | | Crude oil gathering | bopd | 127 | 116 | | Gas processing | Mcf/day | 449 | 419 | | Crude terminals | bopd | 137 | 126 | | Water gathering | blpd | 138 | 124 | - The increase in throughput volumes across systems was primarily attributed to higher production[11](index=11&type=chunk) [Capital Management and Shareholder Returns](index=3&type=section&id=Capital%20Expenditures%20and%20Shareholder%20Returns) Q2 2025 capital expenditures focused on infrastructure expansion, supported by accretive repurchases and increased quarterly cash distributions [Capital Expenditures](index=3&type=section&id=Capital%20Expenditures) Q2 2025 capital expenditures totaled **$70.0 million**, primarily directed towards the expansion of gas compression and associated pipeline infrastructure - Q2 2025 capital expenditures totaled **$70.0 million**, mainly for the expansion of gas compression and pipeline infrastructure[12](index=12&type=chunk) [Quarterly Cash Distributions and Repurchases](index=1&type=section&id=Quarterly%20Cash%20Distributions) Hess Midstream increased its quarterly cash distribution, supported by excess cash flow generated from accretive unit and share repurchases - The Board declared a quarterly cash distribution of **$0.7370 per Class A share** for Q2 2025, an increase of **$0.0272 per share** compared to Q1 2025[5](index=5&type=chunk)[13](index=13&type=chunk) - The distribution increase is supported by excess Adjusted Free Cash Flow following accretive repurchases of Class A shares and Class B units in Q2 2025[13](index=13&type=chunk) [Full Year 2025 Guidance and Future Outlook](index=3&type=section&id=Updated%20Guidance) Hess Midstream updated its full-year 2025 financial guidance while reaffirming throughput, and provided a positive long-term outlook through 2027 [Full Year 2025 Guidance](index=3&type=section&id=Full%20Year%202025%20Guidance) Hess Midstream reaffirmed its full-year 2025 throughput and Adjusted EBITDA guidance, while updating net income and Adjusted Free Cash Flow forecasts Full Year 2025 Financial Guidance (in millions) | Metric | Guidance Range | | :--- | :--- | | Net income | $685 - $735 | | Adjusted EBITDA | $1,235 - $1,285 | | Capital expenditures | $300 | | Adjusted free cash flow | $725 - $775 | Full Year 2025 Throughput Guidance | System | Unit | Guidance Range | | :--- | :--- | :--- | | Gas gathering | MMcf/day | 475 - 485 | | Crude oil gathering | MBbl/day | 120 - 130 | | Gas processing | MMcf/day | 455 - 465 | | Crude terminals | MBbl/day | 130 - 140 | | Water gathering | MBbl/day | 125 - 135 | - The update to net income and Adjusted Free Cash Flow guidance is due to higher expected interest expense and income tax expense from ownership changes and repurchase transactions[14](index=14&type=chunk) [Long-Term Outlook (2026-2027)](index=4&type=section&id=Long-Term%20Outlook%20(2026-2027)) The company projects continued organic throughput volume growth for 2026-2027, driving at least 5-10% growth in key financial metrics and distributions - Expects approximately **10% growth** in gas throughput and **5% growth** in oil throughput in 2026, followed by approximately **5% growth** for both in 2027[15](index=15&type=chunk) - Projects at least **10% growth** in Net Income, Adjusted EBITDA, and Adjusted Free Cash Flow in 2026, followed by at least **5% growth** in 2027[16](index=16&type=chunk) - Continues to target at least **5% annual distribution growth** per Class A share through 2027 and a long-term leverage target of **3x Adjusted EBITDA**[17](index=17&type=chunk) [Non-GAAP Financial Measures & Reconciliations](index=4&type=section&id=Non-GAAP%20Measures) This section defines and reconciles non-GAAP financial measures, including Adjusted EBITDA and Adjusted Free Cash Flow, for Q2 2025 [Definitions and Reconciliations](index=4&type=section&id=Definitions%20and%20Reconciliations) This section defines and reconciles non-GAAP measures like Adjusted EBITDA and Adjusted Free Cash Flow, providing a clearer view of operating performance - The company defines "Adjusted EBITDA" as net income before interest, taxes, depreciation, and amortization, adjusted for certain non-recurring or non-indicative items; "Adjusted Free Cash Flow" is defined as Adjusted EBITDA less net interest, cash taxes, and capital expenditures[20](index=20&type=chunk) Q2 2025 Reconciliation of Net Income to Adjusted EBITDA (in millions) | Line Item | Amount | | :--- | :--- | | Net income | $179.7 | | (+) Depreciation expense | $51.8 | | (+) Interest expense, net | $55.4 | | (+) Income tax expense | $29.1 | | **Adjusted EBITDA** | **$316.0** | Q2 2025 Reconciliation of Adjusted EBITDA to Adjusted Free Cash Flow (in millions) | Line Item | Amount | | :--- | :--- | | Adjusted EBITDA | $316.0 | | (-) Interest, net | $52.2 | | (-) Capital expenditures | $70.0 | | **Adjusted free cash flow** | **$193.8** | [Supplemental Financial Data](index=9&type=section&id=SUPPLEMENTAL%20FINANCIAL%20DATA%20(UNAUDITED)) This section provides unaudited supplemental financial data, including consolidated and segmented statements of operations and operating data [Consolidated Statements of Operations](index=9&type=section&id=Consolidated%20Statements%20of%20Operations) The supplemental data provides detailed consolidated statements of operations, showing total revenues and net income for Q2 and six months ended June 30 Statement of Operations - Quarterly Comparison (in millions) | | Q2 2025 | Q2 2024 | Q1 2025 | | :--- | :--- | :--- | :--- | | Total revenues | $414.2 | $365.5 | $382.0 | | Income from operations | $260.2 | $222.3 | $237.4 | | Net income | $179.7 | $160.3 | $161.4 | | Net income attributable to Hess Midstream LP | $90.3 | $49.5 | $71.6 | Statement of Operations - Six Months Ended June 30 (in millions) | | 2025 | 2024 | | :--- | :--- | :--- | | Total revenues | $796.2 | $721.1 | | Income from operations | $497.6 | $444.3 | | Net income | $341.1 | $322.2 | | Net income attributable to Hess Midstream LP | $161.9 | $94.1 | [Segmented Statements of Operations](index=11&type=section&id=Segmented%20Statements%20of%20Operations) This section details revenues and costs by segment, highlighting the Gathering segment as the largest contributor to income from operations in Q2 2025 Q2 2025 Segmented Statement of Operations (in millions) | Segment | Total Revenues | Income from Operations | | :--- | :--- | :--- | | Gathering | $222.4 | $131.8 | | Processing and Storage | $157.9 | $110.6 | | Terminaling and Export | $33.9 | $20.6 | [Supplemental Operating Data](index=13&type=section&id=SUPPLEMENTAL%20OPERATING%20DATA%20(UNAUDITED)) The supplemental operating data presents physical throughput volumes for the company's systems, showing consistent growth over the prior year Throughput Volumes - Six Months Ended June 30 | System | Unit | 2025 | 2024 | | :--- | :--- | :--- | :--- | | Gas gathering | Mcf/day | 448 | 422 | | Crude oil gathering | bopd | 122 | 110 | | Gas processing | Mcf/day | 437 | 406 | | Crude terminals | bopd | 131 | 121 | | Water gathering | blpd | 132 | 120 |

Core Viewpoint - There is significant speculation regarding the potential acquisition of Hess Midstream by Chevron if Chevron's acquisition of Hess is successful, indicating a strategic interest in Hess Midstream's value [1] Group 1: Investment Perspective - The market is perceived to be overly focused on short-term challenges, leading to mispricing of fundamentally strong companies, which presents long-term investment opportunities [1] - The emphasis is on uncovering short-term mispricings to unlock long-term value in companies like Hess Midstream [1]

Hess Midstream Investor Relations Presentation January 2025 Disclaimer Forward-Looking Statements This presentation 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," "imply" and similar expressions identify forward-looking statements, which are not historical in nature. Our forward-looking sta ...

Core Insights - Blackstone's total market value of holdings reached $24.1 billion for Q1 2025, up from $22.0 billion in the previous quarter, representing a 9% increase [1][2] - The investment portfolio included 47 new stocks, 36 stocks were increased, 25 stocks were reduced, and 39 stocks were completely sold out [1][2] - The top ten holdings accounted for 68.8% of the total market value [1][2] Holdings Overview - The largest holding is Cheniere Energy Partners (CQP.US) with approximately 102 million shares valued at about $6.759 billion, making up 28.07% of the portfolio, unchanged from the previous quarter [2][3] - Corebridge Financial Inc. (CRBG.US) is the second-largest holding with around 61.96 million shares valued at approximately $1.956 billion, also unchanged [2][3] - Williams (WMB.US) ranks third with about 20.08 million shares valued at approximately $1.200 billion, reflecting a 5.94% increase in holdings [3][4] Sector Focus - The portfolio shows a strong inclination towards energy stocks, with significant positions in companies like Targa Resources (TRGP.US), Energy Transfer Equity LP (ET.US), and MPLX LP (MPLX.US) [3][4] - The top five purchases included SPDR S&P 500 ETF put options, CoreWeave (CRWV.US), Kinder Morgan (KMI.US), Hess Midstream (HESM.US), and Enbridge (ENB.US) [4][5] - The top five sales included Expand Energy, First Industrial Realty (FR.US), Western Midstream (WES.US), Energy Transfer (ET.US), and NextEra Energy (NEE.US) [5][6]

PART I—FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The company's unaudited Q1 2025 financial statements show increased assets and operating cash flow, with a significant rise in net income attributable to its shareholders [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) Total assets grew to $4.3 billion, driven by a deferred tax asset, while total liabilities and partners' capital also increased due to debt and equity transactions Consolidated Balance Sheet Highlights (in millions) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total current assets** | $150.1 | $149.4 | | **Property, plant and equipment, net** | $3,324.4 | $3,325.4 | | **Total assets** | **$4,263.6** | **$4,151.0** | | **Total current liabilities** | $186.1 | $219.3 | | **Long-term debt** | $3,546.8 | $3,449.4 | | **Total liabilities** | **$3,750.7** | **$3,685.7** | | **Total partners' capital** | **$512.9** | **$465.3** | [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) Q1 2025 revenues rose to $382.0 million, and net income attributable to Hess Midstream LP grew significantly to $71.6 million, reflecting ownership changes Q1 2025 vs Q1 2024 Statement of Operations (in millions, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Total revenues** | $382.0 | $355.6 | | **Income from operations** | $237.4 | $222.0 | | **Interest expense, net** | $56.4 | $48.5 | | **Net income** | $161.4 | $161.9 | | **Net income attributable to Hess Midstream LP** | $71.6 | $44.6 | | **Diluted EPS** | $0.65 | $0.59 | [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow increased to $202.4 million in Q1 2025, while financing activities included debt refinancing, unit repurchases, and higher shareholder distributions Q1 2025 vs Q1 2024 Cash Flows (in millions) | Cash Flow Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $202.4 | $185.3 | | **Net cash used in investing activities** | $(45.5) | $(54.8) | | **Net cash used in financing activities** | $(155.1) | $(131.7) | | **Increase (decrease) in cash** | $1.8 | $(1.2) | [Notes to Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail significant equity transactions, debt refinancing, a high dependency on Hess for revenues, and a subsequent increase in shareholder distributions - In February 2025, GIP sold **12,650,000 Class A Shares** in an underwritten public offering; the company did not receive any proceeds from this transaction[31](index=31&type=chunk) - In January 2025, the Partnership repurchased **2,572,677 Class B Units** from its Sponsors for approximately **$100.0 million**, funded by its revolving credit facility[35](index=35&type=chunk) - Revenues from commercial agreements with Hess accounted for **98% of total revenues** for the first quarters of both 2025 and 2024[47](index=47&type=chunk) - In February 2025, the Partnership issued **$800.0 million of 5.875% senior notes** due 2028 and used the proceeds to redeem its $800.0 million 5.625% senior notes due 2026, recognizing a **$2.0 million extinguishment loss**[58](index=58&type=chunk) - Subsequent to quarter-end, the company declared a Q1 2025 cash distribution of **$0.7098 per Class A Share** and entered into agreements for a **$190.0 million Class B Unit repurchase** and a **$10.0 million accelerated share repurchase (ASR)**[82](index=82&type=chunk)[83](index=83&type=chunk)[84](index=84&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=19&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes a 7.4% revenue growth to higher volumes across all segments, resulting in increased Adjusted EBITDA and strong liquidity [Overview and First Quarter Results](index=19&type=section&id=Overview%20and%20First%20Quarter%20Results) Recent equity transactions increased public ownership to 53.8%, while strong Q1 2025 results were driven by higher throughput volumes and led to an increased distribution - As a result of equity offering and unit repurchase transactions, public ownership increased from approximately **47.3%** at December 31, 2024, to approximately **53.8%** at March 31, 2025[93](index=93&type=chunk) - Throughput volumes increased YoY in Q1 2025: gas processing up **8%**, oil terminaling up **7%**, and water gathering up **9%**, primarily due to higher Hess and third-party production[100](index=100&type=chunk) Q1 2025 Financial Highlights | Metric | Value | | :--- | :--- | | Consolidated net income | $161.4 million | | Net income attributable to Hess Midstream LP | $71.6 million | | Basic EPS | $0.65 per Class A Share | | Net cash provided by operating activities | $202.4 million | | Adjusted EBITDA | $292.3 million | | Declared Cash Distribution | $0.7098 per Class A Share | [Results of Operations](index=24&type=section&id=Results%20of%20Operations) Total revenues grew by $26.4 million year-over-year, driven by higher volumes across all segments, though offset by increased interest and income tax expenses - Gathering segment revenue increased by **$15.5 million**, driven by higher gas, water, and crude oil physical volumes[122](index=122&type=chunk) - Processing and Storage segment revenue increased by **$8.7 million**, primarily due to higher gas processing physical volumes[125](index=125&type=chunk) - Interest expense increased by **$7.9 million**, mainly due to new senior notes issued in May 2024 and February 2025, and a **$2.0 million loss** on early debt redemption[128](index=128&type=chunk) Q1 2025 vs Q1 2024 Throughput Volumes | Service | Unit | Q1 2025 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | :--- | | Gas gathering | MMcf/d | 431 | 404 | +6.7% | | Crude oil gathering | MBbl/d | 117 | 106 | +10.4% | | Gas processing | MMcf/d | 424 | 393 | +7.9% | | Crude oil terminaling | MBbl/d | 125 | 117 | +6.8% | | Water gathering | MBbl/d | 126 | 116 | +8.6% | [Capital Resources and Liquidity](index=29&type=section&id=Capital%20Resources%20and%20Liquidity) The company maintains strong liquidity through operating cash flow and credit facilities, recently refinancing $800 million in debt while funding capital expansion - Ongoing sources of liquidity include cash on hand, cash from operations, borrowings under the revolving credit facility, and issuances of additional debt and equity securities[142](index=142&type=chunk)[146](index=146&type=chunk) - In February 2025, the Partnership issued **$800.0 million of 5.875% senior notes** due 2028 and used the proceeds to redeem its outstanding **$800.0 million 5.625% notes** due 2026[144](index=144&type=chunk) - 2025 capital expenditures are focused on constructing two new compressor stations and associated pipeline infrastructure, expected to be in service in 2025[157](index=157&type=chunk) Capital Expenditures (in millions) | Period | Total Capital Expenditures | | :--- | :--- | | Q1 2025 | $50.1 | | Q1 2024 | $35.2 | [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=34&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's primary market risk is interest rate exposure from variable-rate debt, with minimal direct commodity price risk due to its fee-based model - The company has minimal direct exposure to commodity prices as it generates substantially all revenues from fee-based agreements with minimum volume commitments[164](index=164&type=chunk) - The primary market risk exposure is to changes in interest rates on its variable-rate debt; as of March 31, 2025, the company had no derivative instruments to hedge this exposure[165](index=165&type=chunk) - At March 31, 2025, total debt had a carrying value of **$3,571.8 million** and a fair value of **$3,565.5 million**; a 15% change in interest rates would alter the fair value of fixed-rate debt by approximately **$91-95 million**[166](index=166&type=chunk) [Item 4. Controls and Procedures](index=35&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal controls during the quarter - The CEO and CFO concluded that the Company's disclosure controls and procedures were effective as of March 31, 2025[169](index=169&type=chunk) - No changes in internal control over financial reporting occurred during the quarter ended March 31, 2025, that have materially affected, or are reasonably likely to materially affect, internal control over financial reporting[170](index=170&type=chunk) PART II—OTHER INFORMATION [Item 1. Legal Proceedings](index=36&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in ordinary course legal proceedings but does not expect any material adverse financial impact from known matters - The company is subject to various judicial and administrative proceedings in the ordinary course of business but did not have material accrued liabilities for legal contingencies as of March 31, 2025[74](index=74&type=chunk)[75](index=75&type=chunk) - The company is remediating a produced water release from a pipeline in North Dakota; as of March 31, 2025, total reserves for all estimated remediation liabilities were **$3.2 million**[72](index=72&type=chunk)[73](index=73&type=chunk) [Item 1A. Risk Factors](index=36&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's 2024 Annual Report on Form 10-K - The risk factors that could materially affect the business, as disclosed in the 2024 Annual Report on Form 10-K, have not materially changed[174](index=174&type=chunk) [Item 5. Other Information](index=36&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the first quarter of 2025 - No directors or officers adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement" during the three months ended March 31, 2025[175](index=175&type=chunk) [Item 6. Exhibits](index=37&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including debt indentures, repurchase agreements, and required certifications

Core Viewpoint - Hess Midstream LP is conducting its Q1 2025 earnings conference call, indicating a focus on financial performance and operational updates for the quarter [1]. Group 1: Company Overview - The conference call is hosted by Jennifer Gordon, Vice President of Investment Relations, who acknowledges the participation of attendees and mentions the availability of the earnings release on the company's website [3]. - John Gatling, President and COO, is also present to provide insights into the company's operations during the call [5]. Group 2: Financial Reporting - The earnings release for Q1 2025 was issued earlier in the day, highlighting the company's financial performance for the quarter [3]. - The call includes discussions on projections and forward-looking statements, which are subject to various risks and uncertainties [4].

Financial Data and Key Metrics Changes - For Q1 2025, net income was $161 million, down from $172 million in Q4 2024. Adjusted EBITDA decreased to $292 million from $298 million in the previous quarter, primarily due to lower volumes and revenues, partially offset by lower costs and annual rate increases due to inflation [12][13] - Total revenues, excluding pass-through revenues, decreased by approximately $13 million, driven by lower throughput volumes from severe winter weather [12] Business Line Data and Key Metrics Changes - Throughput volumes averaged 424 million cubic feet per day for gas processing, 125,000 barrels per day for crude terminaling, and 126,000 barrels per day for water gathering, reflecting a decrease compared to Q4 2024 due to lower production from Hess [6][12] - Processing revenues decreased by approximately $7 million, while gathering revenues decreased by approximately $6 million [12] Market Data and Key Metrics Changes - Hess reported first quarter net production for the Bakken averaged 195,000 barrels of oil equivalent per day, with expectations for Q2 production to be in the range of 210,000 to 215,000 barrels, representing a 9% increase at the midpoint compared to Q1 [6][12] Company Strategy and Development Direction - The company remains focused on disciplined, low-risk investments to meet basin demand while maintaining reliable operations and strong financial performance. The capital program includes completion of two new compressor stations and starting civil construction on the Capa gas plant, with total capital expenditures expected to be approximately $300 million for 2025 [9][12] - The company aims to generate sustainable cash flow and create opportunities to return additional capital to shareholders, with a targeted annual distribution growth of at least 5% through 2027 [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery in throughput volumes following severe winter weather, indicating a strong performance in March and a positive trajectory into Q2 [43] - The company highlighted its ability to maintain stability and visibility even during volatile periods, supported by contracts with no direct commodity price exposure and a low leverage ratio of approximately 3.1 times adjusted EBITDA [22][11] Other Important Information - The company has returned $1.95 billion to shareholders through accretive repurchases since the beginning of 2021, with a total shareholder return yield among the highest in the midstream sector [10] - Adjusted free cash flow for Q1 2025 was approximately $191 million, with expectations for excess adjusted free cash flow of approximately $135 million after fully funding targeted growing distributions for the year [13] Q&A Session Summary Question: Bakken outlook amidst macroeconomic volatility - Management noted that activity levels remain consistent, with Hess reaffirming plans to run four rigs for the rest of the year, supported by established MVCs through 2027 [20][21] Question: Volumes in excess of MVCs - Management indicated that MVCs are set at approximately 80% of nomination, with expectations for long-term growth in both Hess and third-party volumes [26] Question: Rig count and potential reductions - Management expressed confidence in maintaining the four rig count, emphasizing a focus on long-term supply-demand dynamics despite short-term volatility [31][32] Question: Buybacks and secondaries - Management clarified that there are no specific plans for secondaries, and they expect to continue multiple repurchases per year, maintaining financial flexibility [36][38] Question: Gas processing volumes recovery - Management reported a strong recovery in processing volumes following weather challenges, with optimism for meeting annual guidance [43] Question: Capital allocation and leverage - Management explained that the $1.25 billion of financial flexibility is driven by both leverage capacity and excess cash flow, with plans to maintain a leverage ratio below 2.5 times by the end of 2026 [58]