Western Midstream Partners, LP 10-Q

Item 1. Financial Statements WESTERN MIDSTREAM PARTNERS, LP CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) Three Months Ended March 31, thousands except per-unit amounts 2024 2023 Revenues and other Service revenues – fee based $ 781,262 $ 647,867 Service revenues – product based 66,740 46,810 Product sales 39,292 39,025 Other 435 280 Total revenues and other (1) 887,729 733,982 Equity income, net – related parties 32,819 39,021 Operating expenses Cost of product 46,079 51,459 Operation and maintenance 194,939 174,239 General and administrative 67,839 51,117 Property and other taxes 13,920 6,831 Depreciation and amortization 157,991 144,626 Long - lived asset and other impairments (2) 23 52,401 Total operating expenses (3) 480,791 480,673 Gain (loss) on divestiture and other, net 239,617 ( 2,118 ) Operating income (loss) 679,374 290,212 Interest expense ( 94,506 ) ( 81,670 ) Gain (loss) on early extinguishment of debt 524 — Other income (expense), net 2,346 1,215 Income (loss) before income taxes 587,738 209,757 Income tax expense (benefit) 1,522 1,416 Net income (loss) 586,216 208,341 Net income (loss) attributable to noncontrolling interests 13,386 4,696 Net income (loss) attributable to Western Midstream Partners, LP $ 572,830 $ 203,645 Limited partners’ interest in net income (loss): Net income (loss) attributable to Western Midstream Partners, LP $ 572,830 $ 203,645 General partner interest in net (income) loss ( 13,330 ) ( 4,686 ) Limited partners’ interest in net income (loss) (4) 559,500 198,959 Net income (loss) per common unit – basic (4) $ 1.47 $ 0.52 Net income (loss) per common unit – diluted (4) $ 1.47 $ 0.52 Weighted - average common units outstanding – basic (4) 380,024 384,468 Weighted - average common units outstanding – diluted (4) 381,628 385,750 _________________________________________________________________________________________ (1) Total revenues and other includes related-party amounts of $ 499.8 million and $ 448.8 million for the three months ended March 31, 2024 and 2023, respectively. See Note 6 . (2) See Note 8 . (3) Total operating expenses includes related-party amounts of $( 26.0 ) million and $( 3.1 ) million for the three months ended March 31, 2024 and 2023, respectively, all primarily related to changes in imbalance positions. See Note 6 . (4) See Note 5. 6 Table of Contents WESTERN MIDSTREAM PARTNERS, LP CONSOLIDATED BALANCE SHEETS (UNAUDITED) thousands except number of units March 31, 2024 December 31, 2023 ASSETS Current assets Cash and cash equivalents $ 295,246 $ 272,787 Accounts receivable, net 720,351 666,637 Other current assets 50,750 52,986 Total current assets 1,066,347 992,410 Property, plant, and equipment Cost 15,157,635 14,945,431 Less accumulated depreciation 5,432,343 5,290,415 Net property, plant, and equipment 9,725,292 9,655,016 Goodwill 4,783 4,783 Other intangible assets 673,491 681,408 Equity investments 546,078 904,535 Other assets (1) 249,479 233,455 Total assets (2) $ 12,265,470 $ 12,471,607 LIABILITIES, EQUITY, AND PARTNERS’ CAPITAL Current liabilities Accounts and imbalance payables $ 377,499 $ 362,451 Short - term debt 108,394 617,748 Accrued ad valorem taxes 48,525 61,285 Accrued liabilities 173,721 262,572 Total current liabilities 708,139 1,304,056 Long-term liabilities Long - term debt 7,272,079 7,283,556 Deferred income taxes 15,698 15,468 Asset retirement obligations 366,755 359,185 Other liabilities 526,508 480,212 Total long - term liabilities 8,181,040 8,138,421 Total liabilities (3) 8,889,179 9,442,477 Equity and partners’ capital Common units ( 380,490,138 and 379,519,983 units issued and outstanding at March 31, 2024, and December 31, 2023, respectively) 3,225,562 2,894,231 General partner units ( 9,060,641 units issued and outstanding at March 31, 2024, and December 31, 2023) 11,313 3,193 Total partners’ capital 3,236,875 2,897,424 Noncontrolling interests 139,416 131,706 Total equity and partners’ capital 3,376,291 3,029,130 Total liabilities, equity, and partners’ capital $ 12,265,470 $ 12,471,607 ________________________________________________________________________________________ (1) Other assets includes $ 5.5 million and $ 5.7 million of NGLs line - fill inventory as of March 31, 2024, and December 31, 2023, respectively. Other assets also includes $ 107.1 million and $ 96.3 million of materials and supplies inventory as of March 31, 2024, and December 31, 2023, respectively. (2) Total assets includes related - party amounts of $ 982.6 million and $ 1.3 billion as of March 31, 2024, and December 31, 2023, respectively, which includes related - party Accounts receivable, net of $ 389.7 million and $ 358.1 million as of March 31, 2024, and December 31, 2023, respectively. See Note 6 . (3) Total liabilities includes related - party amounts of $ 406.4 million and $ 378.8 million as of March 31, 2024, and December 31, 2023, respectively. See Note 6 . See accompanying Notes to Consolidated Financial Statements. 7 Table of Contents WESTERN MIDSTREAM PARTNERS, LP CONSOLIDATED STATEMENTS OF EQUITY AND PARTNERS’ CAPITAL (UNAUDITED) Partners’ Capital thousands Common Units General Partner Units Noncontrolling Interests Total Balance at December 31, 2023 $ 2,894,231 $ 3,193 $ 131,706 $ 3,029,130 Net income (loss) 559,500 13,330 13,386 586,216 Distributions to Chipeta noncontrolling interest owner — — ( 1,085 ) ( 1,085 ) Distributions to noncontrolling interest owner of WES Operating — — ( 4,591 ) ( 4,591 ) Distributions to Partnership unitholders ( 218,228 ) ( 5,210 ) — ( 223,438 ) Equity - based compensation expense 9,423 — — 9,423 Other ( 19,364 ) — — ( 19,364 ) Balance at March 31, 2024 $ 3,225,562 $ 11,313 $ 139,416 $ 3,376,291 Partners’ Capital thousands Common Units General Partner Units Noncontrolling Interests Total Balance at December 31, 2022 $ 2,969,604 $ 2,105 $ 136,406 $ 3,108,115 Net income (loss) 198,959 4,686 4,696 208,341 Distributions to Chipeta noncontrolling interest owner — — ( 2,240 ) ( 2,240 ) Distributions to noncontrolling interest owner of WES Operating — — ( 4,271 ) ( 4,271 ) Distributions to Partnership unitholders ( 192,039 ) ( 4,530 ) — ( 196,569 ) Unit repurchases (1) ( 7,061 ) — — ( 7,061 ) Equity - based compensation expense 7,199 — — 7,199 Other ( 11,950 ) — — ( 11,950 ) Balance at March 31, 2023 $ 2,964,712 $ 2,261 $ 134,591 $ 3,101,564 _________________________________________________________________________________________ (1) See Note 5 . See accompanying Notes to Consolidated Financial Statements. 8 Table of Contents WESTERN MIDSTREAM PARTNERS, LP CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Three Months Ended March 31, thousands 2024 2023 Cash flows from operating activities Net income (loss) $ 586,216 $ 208,341 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 157,991 144,626 Long - lived asset and other impairments 23 52,401 Non - cash equity - based compensation expense 9,423 7,199 Deferred income taxes 230 924 Accretion and amortization of long - term obligations, net 2,190 1,692 Equity income, net – related parties ( 32,819 ) ( 39,021 ) Distributions from equity - investment earnings – related parties 29,304 39,609 (Gain) loss on divestiture and other, net ( 239,617 ) 2,118 (Gain) loss on early extinguishment of debt ( 524 ) — Other 112 200 Changes in assets and liabilities: (Increase) decrease in accounts receivable, net ( 53,714 ) ( 4,037 ) Increase (decrease) in accounts and imbalance payables and accrued liabilities, net ( 100,383 ) ( 136,460 ) Change in other items, net 41,276 24,832 Net cash provided by operating activities 399,708 302,424 Cash flows from investing activities Capital expenditures ( 193,789 ) ( 173,088 ) Acquisitions from third parties ( 443 ) — Contributions to equity investments – related parties — ( 110 ) Distributions from equity investments in excess of cumulative earnings – related parties 19,033 12,366 Proceeds from the sale of assets to third parties 582,739 — (Increase) decrease in materials and supplies inventory and other ( 10,691 ) ( 18,346 ) Net cash provided by (used in) investing activities 396,849 ( 179,178 ) Cash flows from financing activities Borrowings, net of debt issuance costs — 220,000 Repayments of debt ( 14,503 ) ( 313,138 ) Commercial paper borrowings (repayments), net ( 510,379 ) — Increase (decrease) in outstanding checks 766 18,768 Distributions to Partnership unitholders (1) ( 223,438 ) ( 196,569 ) Distributions to Chipeta noncontrolling interest owner ( 1,085 ) ( 2,240 ) Distributions to noncontrolling interest owner of WES Operating ( 4,591 ) ( 4,271 ) Unit repurchases — ( 7,061 ) Other ( 20,868 ) ( 12,746 ) Net cash provided by (used in) financing activities ( 774,098 ) ( 297,257 ) Net increase (decrease) in cash and cash equivalents 22,459 ( 174,011 ) Cash and cash equivalents at beginning of period 272,787 286,656 Cash and cash equivalents at end of period $ 295,246 $ 112,645 Supplemental disclosures Interest paid, net of capitalized interest $ 130,885 $ 133,245 Income taxes paid (reimbursements received) — 1,270 Accrued capital expenditures 116,751 91,067 _________________________________________________________________________________________ (1) Includes related-party amounts. See Note 6 . See accompanying Notes to Consolidated Financial Statements. 9 Table of Contents WESTERN MIDSTREAM OPERATING, LP CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) Three Months Ended March 31, thousands 2024 2023 Revenues and other Service revenues – fee based $ 781,262 $ 647,867 Service revenues – product based 66,740 46,810 Product sales 39,292 39,025 Other 435 280 Total revenues and other (1) 887,729 733,982 Equity income, net – related parties 32,819 39,021 Operating expenses Cost of product 46,079 51,459 Operation and maintenance 194,939 174,239 General and administrative 67,479 50,885 Property and other taxes 13,920 6,831 Depreciation and amortization 157,991 144,626 Long - lived asset and other impairments (2) 23 52,401 Total operating expenses (3) 480,431 480,441 Gain (loss) on divestiture and other, net 239,617 ( 2,118 ) Operating income (loss) 679,734 290,444 Interest expense ( 94,506 ) ( 81,670 ) Gain (loss) on early extinguishment of debt 524 — Other income (expense), net 2,287 1,190 Income (loss) before income taxes 588,039 209,964 Income tax expense (benefit) 1,522 1,416 Net income (loss) 586,517 208,548 Net income (loss) attributable to noncontrolling interest 1,686 535 Net income (loss) attributable to Western Midstream Operating, LP $ 584,831 $ 208,013 ________________________________________________________________________________________ (1) Total revenues and other includes related-party amounts of $ 499.8 million and $ 448.8 million for the three months ended March 31, 2024 and 2023, respectively. See Note 6 . (2) See Note 8 . (3) Total operating expenses includes related-party amounts of $( 24.7 ) million and $( 1.9 ) million for the three months ended March 31, 2024 and 2023, respectively, all primarily related to changes in imbalance positions. See Note 6 . See accompanying Notes to Consolidated Financial Statements. 10 Table of Contents WESTERN MIDSTREAM OPERATING, LP CONSOLIDATED BALANCE SHEETS (UNAUDITED) thousands except number of units March 31, 2024 December 31, 2023 ASSETS Current assets Cash and cash equivalents $ 289,464 $ 268,184 Accounts receivable, net 738,487 666,615 Other current assets 48,888 50,468 Total current assets 1,076,839 985,267 Property, plant, and equipment Cost 15,157,635 14,945,431 Less accumulated depreciation 5,432,343 5,290,415 Net property, plant, and equipment 9,725,292 9,655,016 Goodwill 4,783 4,783 Other intangible assets 673,491 681,408 Equity investments 546,078 904,535 Other assets (1) 246,053 231,644 Total assets (2) $ 12,272,536 $ 12,462,653 LIABILITIES, EQUITY, AND PARTNERS’ CAPITAL Current liabilities Accounts and imbalance payables $ 377,358 $ 392,752 Short - term debt 108,394 617,748 Accrued ad valorem taxes 48,525 61,285 Accrued liabilities 143,026 203,461 Total current liabilities 677,303 1,275,246 Long-term liabilities Long - term debt 7,272,079 7,283,556 Deferred income taxes 15,698 15,468 Asset retirement obligations 366,755 359,185 Other liabilities 523,083 476,844 Total long - term liabilities 8,177,615 8,135,053 Total liabilities (3) 8,854,918 9,410,299 Equity and partners’ capital Common units ( 318,675,578 units issued and outstanding at March 31, 2024, and December 31, 2023) 3,391,694 3,027,031 Total partners’ capital 3,391,694 3,027,031 Noncontrolling interest 25,924 25,323 Total equity and partners’ capital 3,417,618 3,052,354 Total liabilities, equity, and partners’ capital $ 12,272,536 $ 12,462,653 _________________________________________________________________________________________ (1) Other assets includes $ 5.5 million and $ 5.7 million of NGLs line - fill inventory as of March 31, 2024, and December 31, 2023, respectively. Other assets also includes $ 107.1 million and $ 96.3 million of materials and supplies inventory as of March 31, 2024, and December 31, 2023, respectively. (2) Total assets includes related - party amounts of $ 997.3 million and $ 1.3 billion as of March 31, 2024, and December 31, 2023, respectively, which includes related - party Accounts receivable, net of $ 407.9 million and $ 358.1 million as of March 31, 2024, and December 31, 2023, respectively. See Note 6 . (3) Total liabilities includes related - party amounts of $ 406.0 million and $ 409.5 million as of March 31, 2024, and December 31, 2023, respectively. See Note 6 . See accompanying Notes to Consolidated Financial Statements. 11 Table of Contents WESTERN MIDSTREAM OPERATING, LP CONSOLIDATED STATEMENTS OF EQUITY AND PARTNERS’ CAPITAL (UNAUDITED) thousands Common Units Noncontrolling Interest Total Balance at December 31, 2023 $ 3,027,031 $ 25,323 $ 3,052,354 Net income (loss) 584,831 1,686 586,517 Distributions to Chipeta noncontrolling interest owner — ( 1,085 ) ( 1,085 ) Distributions to WES Operating unitholders ( 229,446 ) — ( 229,446 ) Contributions of equity - based compensation from WES 9,278 — 9,278 Balance at March 31, 2024 $ 3,391,694 $ 25,924 $ 3,417,618 thousands Common Units Noncontrolling Interest Total Balance at December 31, 2022 $ 3,092,012 $ 28,095 $ 3,120,107 Net income (loss) 208,013 535 208,548 Distributions to Chipeta noncontrolling interest owner — ( 2,240 ) ( 2,240 ) Distributions to WES Operating unitholders ( 213,513 ) — ( 213,513 ) Contributions of equity - based compensation from WES 7,058 — 7,058 Balance at March 31, 2023 $ 3,093,570 $ 26,390 $ 3,119,960 See accompanying Notes to Consolidated Financial Statements. 12 Table of Contents WESTERN MIDSTREAM OPERATING, LP CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Three Months Ended March 31, thousands 2024 2023 Cash flows from operating activities Net income (loss) $ 586,517 $ 208,548 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 157,991 144,626 Long - lived asset and other impairments 23 52,401 Non - cash equity - based compensation expense 9,278 7,058 Deferred income taxes 230 924 Accretion and amortization of long - term obligations, net 2,190 1,692 Equity income, net – related parties ( 32,819 ) ( 39,021 ) Distributions from equity - investment earnings – related parties 29,304 39,609 (Gain) loss on divestiture and other, net ( 239,617 ) 2,118 (Gain) loss on early extinguishment of debt ( 524 ) — Other 112 200 Changes in assets and liabilities: (Increase) decrease in accounts receivable, net ( 71,872 ) ( 5,048 ) Increase (decrease) in accounts and imbalance payables and accrued liabilities, net ( 102,341 ) ( 148,148 ) Change in other items, net 42,177 26,009 Net cash provided by operating activities 380,649 290,968 Cash flows from investing activities Capital expenditures ( 193,789 ) ( 173,088 ) Acquisitions from third parties ( 443 ) — Contributions to equity investments – related parties — ( 110 ) Distributions from equity investments in excess of cumulative earnings – related parties 19,033 12,366 Proceeds from the sale of assets to third parties 582,739 — (Increase) decrease in materials and supplies inventory and other ( 10,691 ) ( 18,346 ) Net cash provided by (used in) investing activities 396,849 ( 179,178 ) Cash flows from financing activities Borrowings, net of debt issuance costs — 220,000 Repayments of debt ( 14,503 ) ( 313,138 ) Commercial paper borrowings (repayments), net ( 510,379 ) — Increase (decrease) in outstanding checks 699 18,726 Distributions to WES Operating unitholders (1) ( 229,446 ) ( 213,513 ) Distributions to Chipeta noncontrolling interest owner ( 1,085 ) ( 2,240 ) Other ( 1,504 ) ( 796 ) Net cash provided by (used in) financing activities ( 756,218 ) ( 290,961 ) Net increase (decrease) in cash and cash equivalents 21,280 ( 179,171 ) Cash and cash equivalents at beginning of period 268,184 286,101 Cash and cash equivalents at end of period $ 289,464 $ 106,930 Supplemental disclosures Interest paid, net of capitalized interest $ 130,885 $ 133,245 Income taxes paid (reimbursements received) — 1,270 Accrued capital expenditures 116,751 91,067 ________________________________________________________________________________________ (1) Includes related-party amounts. See Note 6. See accompanying Notes to Consolidated Financial Statements. 13 Table of Contents WESTERN MIDSTREAM PARTNERS, LP AND WESTERN MIDSTREAM OPERATING, LP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION General. Western Midstream Partners, LP is a Delaware master limited partnership formed in September 2012. Western Midstream Operating, LP (together with its subsidiaries, “WES Operating”) is a Delaware limited partnership formed in 2007 to acquire, own, develop, and operate midstream assets. Western Midstream Partners, LP owns, directly and indirectly, a 98.0 % limited partner interest in WES Operating, and directly owns all of the outstanding equity interests of Western Midstream Operating GP, LLC, which holds the entire non - economic general partner interest in WES Operating. For purposes of these consolidated financial statements, the “Partnership” refers to Western Midstream Partners, LP in its individual capacity or to Western Midstream Partners, LP and its subsidiaries, including Western Midstream Operating GP, LLC and WES Operating, as the context requires. “WES Operating GP” refers to Western Midstream Operating GP, LLC, individually as the general partner of WES Operating. The Partnership’s general partner, Western Midstream Holdings, LLC (the “general partner”), is a wholly owned subsidiary of Occidental Petroleum Corporation. “Occidental” refers to Occidental Petroleum Corporation, as the context requires, and its subsidiaries, excluding the general partner. “Anadarko” refers to Anadarko Petroleum Corporation and its subsidiaries, excluding Western Midstream Holdings, LLC. Anadarko became a wholly owned subsidiary of Occidental as a result of Occidental’s acquisition by merger of Anadarko on August 8, 2019. “Related parties” refers to Occidental (see Note 6 ), the Partnership’s investments accounted for under the equity method of accounting (see Note 7 ), and the Partnership and WES Operating for transactions that eliminate upon consolidation (see Note 6 ). The Partnership is engaged in the business of gathering, compressing, treating, processing, and transporting natural gas; gathering, stabilizing, and transporting condensate, natural - gas liquids (“NGLs”), and crude oil; and gathering and disposing of produced water. In its capacity as a natural - gas processor, the Partnership also buys and sells natural gas, NGLs, and condensate on behalf of itself and its customers under certain contracts. As of March 31, 2024, the Partnership’s assets and investments consisted of the following: Wholly Owned and Operated Operated Interests Non-Operated Interests Equity Interests Gathering systems (1) 18 2 3 1 Treating facilities 38 3 — — Natural - gas processing plants/trains 24 3 — 1 NGLs pipelines 3 — — 4 Natural - gas pipelines 6 — — 1 Crude - oil pipelines 3 1 — 1 _________________________________________________________________________________________ (1) Includes the DBM water systems. These assets and investments are located in Texas, New Mexico, the Rocky Mountains (Colorado, Utah, and Wyoming), and North - central Pennsylvania. 14 Table of Contents WESTERN MIDSTREAM PARTNERS, LP AND WESTERN MIDSTREAM OPERATING, LP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION Basis of presentation. The consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and include the accounts of the Partnership and entities in which it holds a controlling financial interest, including WES Operating, WES Operating GP, proportionately consolidated interests, and equity investments (see table below). All significant intercompany transactions have been eliminated. The following table outlines the ownership interests and the accounting method of consolidation used in the consolidated financial statements for entities not wholly owned (see Note 7) : Percentage Interest Full consolidation Chipeta (1) 75.00 % Proportionate consolidation (2) Springfield system 50.10 % Marcellus Interest systems 33.75 % Equity investments (3) Mi Vida JV LLC (“Mi Vida”) 50.00 % Front Range Pipeline LLC (“FRP”) 33.33 % Red Bluff Express Pipeline, LLC (“Red Bluff Express”) 30.00 % Rendezvous Gas Services, LLC (“Rendezvous”) 22.00 % Texas Express Pipeline LLC (“TEP”) 20.00 % Texas Express Gathering LLC (“TEG”) 20.00 % White Cliffs Pipeline, LLC (“White Cliffs”) 10.00 % _________________________________________________________________________________________ (1) The 25 % third - party interest in Chipeta Processing LLC (“Chipeta”) is reflected within noncontrolling interests in the consolidated financial statements. See Noncontrolling interests below. (2) The Partnership proportionately consolidates its associated share of the assets, liabilities, revenues, and expenses attributable to these assets. (3) Investments in non - controlled entities over which the Partnership exercises significant influence are accounted for under the equity method of accounting. “Equity - investment throughput” refers to the Partnership’s share of average throughput for these investments. Certain information and note disclosures commonly included in annual financial statements have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, the accompanying consolidated financial statements and notes should be read in conjunction with the Partnership’s 2023 Form 10-K, as filed with the SEC on February 21, 2024. Management believes that the disclosures made are adequate to make the information not misleading. The consolidated financial results of WES Operating are included in the Partnership’s consolidated financial statements. Throughout these notes to consolidated financial statements, and to the extent material, any differences between the consolidated financial results of the Partnership and WES Operating are discussed separately. The Partnership’s consolidated financial statements differ from those of WES Operating primarily as a result of (i) the presentation of noncontrolling interest ownership (see Noncontrolling interests below), (ii) the elimination of WES Operating GP’s investment in WES Operating with WES Operating GP’s underlying capital account, (iii) the general and administrative expenses incurred by the Partnership, which are separate from, and in addition to, those incurred by WES Operating, (iv) the inclusion of the impact of Partnership equity balances and Partnership distributions, and (v) transactions between the Partnership and WES Operating that eliminate upon consolidation. 15 Table of Contents WESTERN MIDSTREAM PARTNERS, LP AND WESTERN MIDSTREAM OPERATING, LP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION Presentation of the Partnership’s assets. The Partnership’s assets include assets owned and ownership interests accounted for by the Partnership under the equity method of accounting, through its 98.0 % partnership interest in WES Operating, as of March 31, 2024 (see Note 7 ). The Partnership also owns and controls the entire non - economic general partner interest in WES Operating GP, and the Partnership’s general partner is owned by Occidental. Use of estimates. In preparing financial statements in accordance with GAAP, management makes informed judgments and estimates that affect the reported amounts of assets, liabilities, revenues, and expenses. Management evaluates its estimates and related assumptions regularly, using historical experience and other reasonable methods. Changes in facts and circumstances or additional information may result in revised estimates, and actual results may differ from these estimates. Effects on the business, financial condition, and results of operations resulting from revisions to estimates are recognized when the facts that give rise to the revisions become known. The information included herein reflects all normal recurring adjustments which are, in the opinion of management, necessary for a fair presentation of the consolidated financial statements. Noncontrolling interests. The Partnership’s noncontrolling interests in the consolidated financial statements consist of (i) the 25 % third - party interest in Chipeta and (ii) the 2.0 % limited partner interest in WES Operating owned by an Occidental subsidiary. WES Operating’s noncontrolling interest in the consolidated financial statements consists of the 25 % third - party interest in Chipeta. See Note 5. Segments. The Partnership’s operations continue to be organized into a single operating segment, the assets of which gather, compress, treat, process, and transport natural gas; gather, stabilize, and transport condensate, NGLs, and crude oil; and gather and dispose of produced water in the United States. In November 2023, the Financial Accounting Standards Board issued Accounting Standards Update 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures.” The standard improves reportable segment disclosure requirements for public business entities primarily through enhanced disclosures about significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit (referred to as the “significant expense principle”). The standard will become effective for the Partnership for the fiscal year 2024 annual financial statements and interim financial statements thereafter and will be applied retrospectively for all prior periods presented in the financial statements, with early adoption permitted. The Partnership plans to adopt the standard when it becomes effective beginning with the fiscal year 2024 annual financial statements. The Partnership is currently evaluating the impact this guidance will have on disclosures in the Notes to Consolidated Financial Statements. This standard will have no impact to the Partnership’s financial statements, but will result in additional disclosure. Equity-based compensation. During the three months ended March 31, 2024, the Partnership issued 970,155 common units under its long-term incentive plans. Compensation expense was $ 9.4 million and $ 7.2 million for the three months ended March 31, 2024 and 2023, respectively. 16 Table of Contents WESTERN MIDSTREAM PARTNERS, LP AND WESTERN MIDSTREAM OPERATING, LP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 2. REVENUE FROM CONTRACTS WITH CUSTOMERS The following table summarizes revenue from contracts with customers: Three Months Ended March 31, thousands 2024 2023 Revenue from customers Service revenues – fee based $ 781,262 $ 647,867 Service revenues – product based 66,740 46,810 Product sales 39,292 39,025 Total revenue from customers 887,294 733,702 Revenue from other than customers Other 435 280 Total revenues and other $ 887,729 $ 733,982 Contract balances. Receivables from customers, which are included in Accounts receivable, net on the consolidated balance sheets were $ 711.0 million and $ 661.6 million as of March 31, 2024, and December 31, 2023, respectively. Contract assets primarily relate to (i) revenue accrued but not yet billed under cost - of - service contracts with fixed and variable fees and (ii) accrued deficiency fees the Partnership expects to charge customers once the related performance periods are completed. The following table summarizes activity related to contract assets from contracts with customers: thousands Contract assets balance at December 31, 2023 $ 39,292 Amounts transferred to Accounts receivable, net that were included in the contract assets balance at the beginning of the period ( 1,928 ) Additional estimated revenues recognized 1,974 Contract assets balance at March 31, 2024 $ 39,338 Contract assets at March 31, 2024 Other current assets $ 8,708 Other assets 30,630 Total contract assets from contracts with customers $ 39,338 17 Table of Contents WESTERN MIDSTREAM PARTNERS, LP AND WESTERN MIDSTREAM OPERATING, LP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 2. REVENUE FROM CONTRACTS WITH CUSTOMERS Contract liabilities primarily relate to (i) fixed and variable fees under cost - of - service contracts that are received from customers for which revenue recognition is deferred, (ii) aid - in - construction payments received from customers that must be recognized over the expected period of customer benefit, and (iii) fees that are charged to customers for only a portion of the contract term and must be recognized as revenues over the expected period of customer benefit. The following table summarizes activity related to contract liabilities from contracts with customers: thousands Contract liabilities balance at December 31, 2023 $ 445,499 Cash received or receivable, excluding revenues recognized during the period 36,960 Revenues recognized that were included in the contract liability balance at the beginning of the period ( 11,715 ) Contract liabilities balance at March 31, 2024 $ 470,744 Contract liabilities at March 31, 2024 Accrued liabilities $ 11,875 Other liabilities 458,869 Total contract liabilities from contracts with customers $ 470,744 Transaction price allocated to remaining performance obligations. Revenues expected to be recognized from certain performance obligations that are unsatisfied (or partially unsatisfied) as of March 31, 2024, are presented in the table below. The Partnership applies the optional exemptions in Revenue from Contracts with Customers (Topic 606) and does not disclose consideration for remaining performance obligations with an original expected duration of one year or less or for variable consideration related to unsatisfied (or partially unsatisfied) performance obligations. Therefore, the following table represents only a portion of expected future revenues from existing contracts as most future revenues from customers are dependent on future variable customer volumes and, in some cases, variable commodity prices for those volumes. thousands Remainder of 2024 $ 881,845 2025 1,113,716 2026 1,029,954 2027 919,010 2028 712,825 Thereafter 2,001,043 Total $ 6,658,393 18 Table of Contents WESTERN MIDSTREAM PARTNERS, LP AND WESTERN MIDSTREAM OPERATING, LP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 3. ACQUISITIONS AND DIVESTITURES Mont Belvieu JV, Whitethorn LLC, Panola, and Saddlehorn. During the first quarter of 2024, the Partnership closed on the sale of the following equity investments to third parties: (i) the 25.00 % interest in Enterprise EF78 LLC (the “Mont Belvieu JV”), (ii) the 20.00 % interest in Whitethorn Pipeline Company LLC (“Whitethorn LLC”), (iii) the 15.00 % interest in Panola Pipeline Company, LLC (“Panola”), and (iv) the 20.00 % interest in Saddlehorn Pipeline Company, LLC (“Saddlehorn”). The combined proceeds received in the first quarter of 2024 of $ 588.6 million includes $ 5.9 million in pro-rata distributions through closing, resulting in a net gain on sale of $ 239.7 million that was recorded as Gain (loss) on divestiture and other, net in the consolidated statement of operations. The sale of the interests in the Mont Belvieu JV and Whitethorn LLC also resolved outstanding legal proceedings associated with those assets. Marcellus Interest systems. In April 2024, the Partnership closed on the sale of its 33.75 % interest in the Marcellus Interest systems for proceeds of $ 206.2 million, resulting in an estimated net gain on sale of approximately $ 65.0 million that will be recorded as Gain (loss) on divestiture and other, net in the consolidated statement of operations during the second quarter of 2024. As of March 31, 2024, the Marcellus Interest systems satisfied criteria to be considered held for sale. At March 31, 2024, the consolidated balance sheet included current assets of $ 6.6 million, long-term assets of $ 142.7 million, current liabilities of $ 5.9 million, and long-term liabilities of $ 2.1 million associated with assets held for sale. Meritage. On October 13, 2023, the Partnership closed on the acquisition of Meritage Midstream Services II, LLC (“Meritage”) for $ 885.0 million (subject to certain customary post-closing adjustments) funded with cash, including proceeds from the Partnership’s $ 600.0 million senior note issuance in September 2023 (see Note 10) and borrowings on the senior unsecured revolving credit facility (“RCF”). The cash purchase price, adjusted for working capital and certain customary post-closing adjustments and reduced by the $ 38.4 million of cash acquired (as presented in the table below), was $ 878.2 million. The assets acquired, located in Converse, Campbell, and Johnson counties, Wyoming, include approximately 1,500 miles of high- and low-pressure natural-gas gathering pipelines, approximately 380 MMcf/d of natural-gas processing capacity, and the Thunder Creek NGL pipeline, which is a 120 mile, 38 MBbls/d FERC-regulated NGL pipeline that connects to the processing facility. The acquisition expands the Partnership’s existing Powder River Basin asset base, increasing total natural-gas processing capacity in that region to 440 MMcf/d. The Meritage acquisition has been accounted for under the acquisition method of accounting. The assets acquired and liabilities assumed in the Meritage acquisition were recorded in the consolidated balance sheet at their estimated fair values as of the acquisition date. Results of operations attributable to the Meritage acquisition were included in the Partnership’s consolidated statements of operations beginning on the acquisition date in the fourth quarter of 2023. 19 Table of Contents WESTERN MIDSTREAM PARTNERS, LP AND WESTERN MIDSTREAM OPERATING, LP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 3. ACQUISITIONS AND DIVESTITURES The following is the final acquisition-date fair value for the assets acquired and liabilities assumed in the Meritage acquisition on October 13, 2023. thousands Assets acquired: Cash and cash equivalents $ 38,412 Accounts receivable, net 34,060 Other current assets 1,980 Property, plant, and equipment 926,347 Other assets 6,498 Total assets acquired 1,007,297 Liabilities assumed: Accounts payable and accrued liabilities 34,733 Other current liabilities 5,451 Asset retirement obligation 22,156 Other liabilities 28,356 Total liabilities assumed 90,696 Net assets acquired $ 916,601 The acquisition-date fair values are based on an assessment of the fair value of the assets acquired and liabilities assumed in the Meritage acquisition using inputs that are not observable in the market and thus represent Level 3 inputs. The fair values of the processing plants, gathering system, and related facilities and equipment are based on market and cost approaches. 4. PARTNERSHIP DISTRIBUTIONS Partnership distributions. Under its partnership agreement, the Partnership distributes all of its available cash to unitholders of record on the applicable record date within 55 days following each quarter’s end. The amount of available cash (beyond proper reserves as defined in the partnership agreement) generally is all cash on hand at the end of the quarter, plus, at the discretion of the general partner, working capital borrowings made subsequent to the end of such quarter, less the amount of cash reserves established by the general partner to provide for the proper conduct of the Partnership’s business, including (i) to fund future capital expenditures; (ii) to comply with applicable laws, debt instruments, or other agreements; or (iii) to provide funds for unitholder distributions for any one or more of the next four quarters. Working capital borrowings generally include borrowings made under a credit facility or similar financing arrangement and are intended to be repaid or refinanced within 12 months. In all cases, working capital borrowings are used solely for working capital purposes or to fund unitholder distributions. 20 Table of Contents WESTERN MIDSTREAM PARTNERS, LP AND WESTERN MIDSTREAM OPERATING, LP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 4. PARTNERSHIP DISTRIBUTIONS The Board of Directors of the general partner (the “Board”) declared the following cash distributions to the Partnership’s unitholders for the periods presented: thousands except per-unit amounts Quarters Ended Total Quarterly Per-unit Distribution Total Quarterly Cash Distribution Distribution Date Record Date 2023 March 31 (1) $ 0.856 $ 336,987 May 15, 2023 May 1, 2023 June 30 0.5625 221,442 August 14, 2023 July 31, 2023 September 30 0.575 223,432 November 13, 2023 November 1, 2023 December 31 0.575 223,438 February 13, 2024 February 1, 2024 2024 March 31 $ 0.875 $ 340,858 May 15, 2024 May 1, 2024 _________________________________________________________________________________________ (1) Includes the regular quarterly distribution of $ 0.500 per unit, or $ 196.8 million, as well as the Enhanced Distribution of $ 0.356 per unit discussed below. To facilitate the distribution of available cash, during 2022 the Partnership adopted a financial policy that provided for an additional distribution (“Enhanced Distribution”) to be paid in conjunction with the regular first-quarter distribution of the following year (beginning in 2023), in a target amount equal to Free cash flow generated in the prior year after subtracting Free cash flow used for the prior year’s debt repayments, regular-quarter distributions, and unit repurchases. In April 2023, the Board approved an Enhanced Distribution of $ 0.356 per unit, or $ 140.1 million, related to the Partnership’s 2022 performance, which was paid in conjunction with the regular first-quarter 2023 distribution on May 15, 2023. WES Operating partnership distributions. WES Operating makes quarterly cash distributions to the Partnership and WGR Asset Holding Company LLC (“WGRAH”), a subsidiary of Occidental, in proportion to their share of limited partner interests in WES Operating. See Note 5 . WES Operating made and/or declared the following cash distributions to its limited partners for the periods presented: thousands Quarters Ended Total Quarterly Cash Distribution Distribution Date 2023 March 31 (1) $ 342,895 May 2023 June 30 226,260 August 2023 September 30 229,446 November 2023 December 31 229,446 February 2024 2024 March 31 $ 347,675 May 2024 _________________________________________________________________________________________ (1) Includes amounts related to the Enhanced Distribution discussed above. 21 Table of Contents WESTERN MIDSTREAM PARTNERS, LP AND WESTERN MIDSTREAM OPERATING, LP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 5. EQUITY AND PARTNERS’ CAPITAL Holdings of Partnership equity. The Partnership’s common units are listed on the New York Stock Exchange under the ticker symbol “WES.” As of March 31, 2024, Occidental held 185,181,578 common units, representing a 47.6 % limited partner interest in the Partnership, and through its ownership of the general partner, Occidental indirectly held 9,060,641 general partner units, representing a 2.3 % general partner interest in the Partnership. The public held 195,308,560 common units, representing a 50.1 % limited partner interest in the Partnership. Partnership equity repurchases. In 2022, the Board authorized the Partnership to buy back up to $ 1.25 billion of the Partnership’s common units through December 31, 2024 (the “$1.25 billion Purchase Program”). The common units may be purchased from time to time in the open market at prevailing market prices or in privately negotiated transactions. During the three months ended March 31, 2024, there were no common units repurchased. During the three months ended March 31, 2023, the Partnership repurchased 285,688 common units for an aggregate purchase price of $ 7.1 million. The units were canceled immediately upon receipt. As of March 31, 2024, the Partnership had an authorized amount of $ 627.8 million remaining under the program. Holdings of WES Operating equity. As of March 31, 2024, (i) the Partnership, directly and indirectly through its ownership of WES Operating GP, owned a 98.0 % limited partner interest and the entire non - economic general partner interest in WES Operating and (ii) Occidental, through its ownership of WGRAH, owned a 2.0 % limited partner interest in WES Operating, which is reflected as a noncontrolling interest within the consolidated financial statements of the Partnership (see Note 1 ). Partnership’s net income (loss) per common unit. The common and general partner unitholders’ allocation of net income (loss) attributable to the Partnership was equal to their cash distributions plus their respective allocations of undistributed earnings or losses in accordance with their weighted - average ownership percentage during each period using the two - class method. The Partnership’s basic net income (loss) per common unit is calculated by dividing the limited partners’ interest in net income (loss) by the weighted - average number of common units outstanding during the period. Diluted net income (loss) per common unit includes the effect of outstanding units issued under the Partnership’s long-term incentive plans. The following table provides a reconciliation between basic and diluted net income (loss) per common unit: Three Months Ended March 31, thousands except per-unit amounts 2024 2023 Net income (loss) Limited partners’ interest in net income (loss) $ 559,500 $ 198,959 Weighted-average common units outstanding Basic 380,024 384,468 Dilutive effect of non-vested phantom units 1,604 1,282 Diluted 381,628 385,750 Excluded due to anti-dilutive effect 279 663 Net income (loss) per common unit Basic $ 1.47 $ 0.52 Diluted $ 1.47 $ 0.52 WES Operating’s net income (loss) per common unit. Net income (loss) per common unit for WES Operating is not calculated because it has no publicly traded units. 22 Table of Contents WESTERN MIDSTREAM PARTNERS, LP AND WESTERN MIDSTREAM OPERATING, LP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 6. RELATED-PARTY TRANSACTIONS Summary of related-party transactions. The following tables summarize material related - party transactions included in the Partnership’s consolidated financial statements: Consolidated statements of operations Three Months Ended March 31, thousands 2024 2023 Revenues and other Service revenues – fee based $ 489,729 $ 423,501 Service revenues – product based 14,057 8,116 Product sales ( 3,977 ) 17,168 Total revenues and other 499,809 448,785 Equity income, net – related parties (1) 32,819 39,021 Operating expenses Cost of product (2) ( 27,412 ) ( 3,947 ) Operation and maintenance 1,439 747 General and administrative — 67 Total operating expenses ( 25,973 ) ( 3,133 ) _________________________________________________________________________________________ (1) See Note 7 . (2) Includes related-party natural - gas and NGLs imbalances. Consolidated balance sheets thousands March 31, 2024 December 31, 2023 Assets Accounts receivable, net $ 389,721 $ 358,141 Other current assets 3,277 1,260 Equity investments (1) 546,078 904,535 Other assets 43,534 43,216 Total assets 982,610 1,307,152 Liabilities Accounts and imbalance payables 38,739 38,541 Accrued liabilities 5,009 4,979 Other liabilities (2) 362,604 335,320 Total liabilities 406,352 378,840 _________________________________________________________________________________________ (1) See Note 7 . (2) Includes contract liabilities from contracts with customers. See Note 2 . 23 Table of Contents WESTERN MIDSTREAM PARTNERS, LP AND WESTERN MIDSTREAM OPERATING, LP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 6. RELATED-PARTY TRANSACTIONS Consolidated statements of cash flows Three Months Ended March 31, thousands 2024 2023 Distributions from equity - investment earnings – related parties $ 29,304 $ 39,609 Contributions to equity investments – related parties — ( 110 ) Distributions from equity investments in excess of cumulative earnings – related parties 19,033 12,366 Distributions to Partnership unitholders (1) ( 111,689 ) ( 99,671 ) Distributions to WES Operating unitholders (2) ( 4,591 ) ( 4,271 ) _________________________________________________________________________________________ (1) Represents common and general partner unit distributions paid to Occidental pursuant to the partnership agreement of the Partnership (see Note 4 and Note 5 ). (2) Represents distributions paid to Occidental, through its ownership of WGRAH, pursuant to WES Operating’s partnership agreement (see Note 4 and Note 5 ). The following tables summarize material related - party transactions for WES Operating (which are included in the Partnership’s consolidated financial statements) to the extent the amounts differ materially from the Partnership’s consolidated financial statements: Consolidated statements of operations Three Months Ended March 31, thousands 2024 2023 General and administrative (1) $ 1,306 $ 1,281 _________________________________________________________________________________________ (1) Includes an intercompany service fee between the Partnership and WES Operating. Consolidated balance sheets thousands March 31, 2024 December 31, 2023 Accounts receivable, net (1) $ 407,881 $ 358,141 Other current assets 3,218 1,235 Other assets 40,108 41,405 Accounts and imbalance payables 38,739 69,472 Accrued liabilities 4,692 4,662 _________________________________________________________________________________________ (1) Includes balances related to transactions between the Partnership and WES Operating. Consolidated statements of cash flows Three Months Ended March 31, thousands 2024 2023 Distributions to WES Operating unitholders (1) $ ( 229,446 ) $ ( 213,513 ) _________________________________________________________________________________________ (1) Represents distributions paid to the Partnership and Occidental, through its ownership of WGRAH, pursuant to WES Operating’s partnership agreement. See Note 4 and Note 5. 24 Table of Contents WESTERN MIDSTREAM PARTNERS, LP AND WESTERN MIDSTREAM OPERATING, LP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 6. RELATED-PARTY TRANSACTIONS Related-party revenues. Related - party revenues include amounts earned by the Partnership from services provided to Occidental and from the sale of natural gas, condensate, and NGLs to Occidental. Gathering and processing agreements. The Partnership has significant gathering, processing, and produced-water disposal arrangements with affiliates of Occidental on most of its systems. While Occidental is the contracting counterparty of the Partnership, these arrangements with Occidental include not just Occidental - produced volumes, but also, in some instances, the volumes of other working - interest owners of Occidental who rely on the Partnership’s facilities and infrastructure to bring their volumes to market. Natural-gas throughput (excluding equity-investment throughput) attributable to production owned or controlled by Occidental was 31 % and 35 % for the three months ended March 31, 2024 and 2023, respectively. Crude-oil and NGLs throughput (excluding equity-investment throughput) attributable to production owned or controlled by Occidental was 89 % and 88 % for the three months ended March 31, 2024 and 2023, respectively. Produced-water throughput attributable to production owned or controlled by Occidental was 77 % and 80 % for the three months ended March 31, 2024 and 2023, respectively. The Partnership is currently discussing varying interpretations of certain contractual provisions with Occidental regarding the calculation of the cost - of - service rates under an oil - gathering contract related to the Partnership’s DJ Basin oil - gathering system. If such discussions are resolved in a manner adverse to the Partnership, such resolution could have a negative impact on the Partnership’s financial condition and results of operations, including a reduction in rates and a non - cash charge to earnings. In connection with the sale of its Eagle Ford assets in 2017, Anadarko remained the primary counterparty to the Partnership’s Brasada gas processing agreement and entered into an agency relationship with Sanchez Energy Corporation (“Sanchez”), subsequently Mesquite Energy, Inc. (“Mesquite”), that allowed Mesquite to process gas under such agreement. In December 2021, the Brasada gas processing agreement was assigned from Anadarko to Mesquite effective July 1, 2023. For this reason, Anadarko is not liable for any obligations under the Brasada gas processing agreement after June 30, 2023. For all periods presented, either Mesquite or its successor, a subsidiary of Javelin Energy Partners, performed Anadarko’s obligations under the Brasada gas processing agreement pursuant to its agency arrangement with Anadarko. Marketing Transition Services Agreement. During the year ended December 31, 2020, Occidental provided marketing-related services to certain of the Partnership’s subsidiaries (the “Marketing Transition Services Agreement”). While the Partnership still has some marketing agreements with affiliates of Occidental, on January 1, 2021, the Partnership began marketing and selling substantially all of its crude oil, residue gas, and NGLs directly to third parties. Related-party expenses. Operation and maintenance expense includes amounts accrued for or paid to related parties for field - related costs, shared field offices, and easements (see Related-party commercial agreement below) supporting the Partnership’s operations at certain assets. A portion of general and administrative expense is paid by Occidental, which results in related - party transactions pursuant to the reimbursement provisions of the Partnership’s and WES Operating’s agreements with Occidental. Cost of product expense includes amounts related to certain continuing marketing arrangements with affiliates of Occidental, related - party imbalances, and transactions with affiliates accounted for under the equity method of accounting. See Marketing Transition Services Agreement in the section above. Related - party expenses bear no direct relationship to related - party revenues, and third - party expenses bear no direct relationship to third - party revenues. Services Agreement. Occidental performed certain centralized corporate functions for the Partnership and WES Operating pursuant to the agreement dated as of December 31, 2019, by and among Occidental, Anadarko, and WES Operating GP (“Services Agreement”). Most of the administrative and operational services previously provided by Occidental fully transitioned to the Partnership by December 31, 2021, with certain limited transition services remaining in place pursuant to the terms of the Services Agreement. 25 Table of Contents WESTERN MIDSTREAM PARTNERS, LP AND WESTERN MIDSTREAM OPERATING, LP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 6. RELATED-PARTY TRANSACTIONS Construction reimbursement agreements and purchases and sales with related parties . From time to time, the Partnership enters into construction reimbursement agreements with Occidental providing that the Partnership will manage the construction of certain midstream infrastructure for Occidental in the Partnership’s areas of operation. Such arrangements generally provide for a reimbursement of costs incurred by the Partnership on a cost or cost-plus basis. Additionally, from time to time, in support of the Partnership’s business, the Partnership purchases and sells equipment, inventory, and other miscellaneous assets from or to Occidental or its affiliates. Related-party commercial agreement. During the first quarter of 2021, an affiliate of Occidental and certain wholly owned subsidiaries of the Partnership entered into a Commercial Understanding Agreement (“CUA”). Under the CUA, certain West Texas surface - use and salt - water disposal agreements were amended to reduce usage fees owed by the Partnership in exchange for the forgiveness of certain deficiency fees owed by Occidental and other unrelated contractual amendments. The present value of the reduced usage fees under the CUA was $ 30.0 million at the time the agreement was executed. Also, as a result of the amendments under the CUA, these agreements are classified as operating leases and a $ 30.0 million right-of-use (“ROU”) asset, included in Other assets on the consolidated balance sheets, was recognized during the first quarter of 2021. The ROU asset is being amortized to Operation and maintenance expense through 2038, the remaining term of the agreements. Customer concentration. Occidental was the only customer from which revenues exceeded 10% of consolidated revenues for all periods presented in the consolidated statements of operations. 7. EQUITY INVESTMENTS The following tables present the financial statement impact of the Partnership’s equity investments for the three months ended March 31, 2024: thousands Balance at December 31, 2023 Equity income, net Distributions Distributions in excess of cumulative earnings (1) Acquisitions and Divestitures (2) Balance at March 31, 2024 White Cliffs $ 13,248 $ 1,285 $ ( 1,285 ) $ ( 843 ) $ — $ 12,405 Rendezvous 10,815 ( 578 ) ( 237 ) ( 464 ) — 9,536 Mont Belvieu JV 88,556 51 ( 442 ) ( 6,047 ) ( 82,118 ) — TEG 15,185 169 ( 175 ) ( 200 ) — 14,979 TEP 172,559 7,218 ( 7,281 ) ( 635 ) — 171,861 FRP 186,551 11,727 ( 11,770 ) ( 1,803 ) — 184,705 Whitethorn LLC 144,799 1,185 3,326 ( 4,924 ) ( 144,386 ) — Saddlehorn 101,760 4,200 ( 4,124 ) ( 3,096 ) ( 98,740 ) — Panola 18,716 74 ( 74 ) ( 1,021 ) ( 17,695 ) — Mi Vida 45,424 2,068 ( 2,050 ) — — 45,442 Red Bluff Express 106,922 5,420 ( 5,192 ) — — 107,150 Total $ 904,535 $ 32,819 $ ( 29,304 ) $ ( 19,033 ) $ ( 342,939 ) $ 546,078 _________________________________________________________________________________________ (1) Distributions in excess of cumulative earnings, classified as investing cash flows in the consolidated statements of cash flows, are calculated on an individual - investment basis. (2) See Note 3 . During the first quarter of 2024, the Partnership closed on the sale of the following equity investments to third parties: (i) the 25.00 % interest in Mont Belvieu JV, (ii) the 20.00 % interest in Whitethorn LLC, (iii) the 15.00 % interest in Panola, and (iv) the 20.00 % interest in Saddlehorn. See Note 3 . 26 Table of Contents WESTERN MIDSTREAM PARTNERS, LP AND WESTERN MIDSTREAM OPERATING, LP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 8. PROPERTY, PLANT, AND EQUIPMENT A summary of the historical cost of property, plant, and equipment is as follows: thousands Estimated Useful Life March 31, 2024 December 31, 2023 Land N/A $ 12,442 $ 12,504 Gathering systems – pipelines 30 years 5,935,848 5,890,607 Gathering systems – compressors 15 years 2,602,110 2,553,602 Processing complexes and treating facilities 25 years 3,775,379 3,745,332 Transportation pipeline and equipment 3 to 48 years 259,227 259,314 Produced - water disposal systems 20 years 1,103,001 1,098,616 Assets under construction N/A 560,417 479,368 Other 3 to 40 years 909,211 906,088 Total property, plant, and equipment 15,157,635 14,945,431 Less accumulated depreciation 5,432,343 5,290,415 Net property, plant, and equipment $ 9,725,292 $ 9,655,016 “Assets under construction” represents property that is not yet placed into productive service as of the respective balance sheet date and is excluded from capitalized costs being depreciated. Long-lived asset impairments. During the three months ended March 31, 2023, the Partnership recognized a long-lived asset impairment of $ 52.1 million for assets located in the Rockies due to a reduction in estimated future cash flows resulting from a contract termination notice received in the first quarter of 2023. This asset was impaired to its estimated fair value of $ 22.8 million. The fair value was measured using the income approach and Level-3 fair value inputs. The income approach was based on the Partnership’s projected future EBITDA and free cash flows, which requires significant assumptions including, among others, future throughput volumes based on current expectations of producer activity and operating costs. 27 Table of Contents WESTERN MIDSTREAM PARTNERS, LP AND WESTERN MIDSTREAM OPERATING, LP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 9. SELECTED COMPONENTS OF WORKING CAPITAL A summary of accounts receivable, net is as follows: The Partnership WES Operating thousands March 31, 2024 December 31, 2023 March 31, 2024 December 31, 2023 Trade receivables, net $ 720,169 $ 665,892 $ 738,328 $ 665,892 Other receivables, net 182 745 159 723 Total accounts receivable, net $ 720,351 $ 666,637 $ 738,487 $ 666,615 A summary of other current assets is as follows: The Partnership WES Operating thousands March 31, 2024 December 31, 2023 March 31, 2024 December 31, 2023 NGLs inventory $ 2,650 $ 2,557 $ 2,650 $ 2,557 Imbalance receivables 8,125 5,056 8,125 5,056 Prepaid insurance 15,707 21,065 13,904 18,571 Contract assets 8,708 9,595 8,708 9,595 Other 15,560 14,713 15,501 14,689 Total other current assets $ 50,750 $ 52,986 $ 48,888 $ 50,468 A summary of accrued liabilities is as follows: The Partnership WES Operating thousands March 31, 2024 December 31, 2023 March 31, 2024 December 31, 2023 Accrued interest expense $ 86,369 $ 124,937 $ 86,369 $ 124,937 Short - term asset retirement obligations 3,790 7,606 3,790 7,606 Short - term remediation and reclamation obligations 1,790 5,490 1,790 5,490 Income taxes payable 4,201 2,908 4,201 2,908 Contract liabilities 11,875 16,866 11,875 16,866 Accrued payroll and benefits 30,598 55,237 — 2,243 Other 35,098 49,528 35,001 43,411 Total accrued liabilities $ 173,721 $ 262,572 $ 143,026 $ 203,461 28 Table of Contents WESTERN MIDSTREAM PARTNERS, LP AND WESTERN MIDSTREAM OPERATING, LP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 10. DEBT AND INTEREST EXPENSE WES Operating is the borrower for all outstanding debt and is expected to be the borrower for all future debt issuances. The following table presents the outstanding debt: March 31, 2024 December 31, 2023 thousands Principal Carrying Value Fair Value (1) Principal Carrying Value Fair Value (1) Short - term debt Commercial paper $ 100,000 $ 99,933 $ 99,933 $ 613,885 $ 610,312 $ 610,312 Finance lease liabilities 8,461 8,461 8,461 7,436 7,436 7,436 Total short - term debt $ 108,461 $ 108,394 $ 108,394 $ 621,321 $ 617,748 $ 617,748 Long - term debt 3.100 % Senior Notes due 2025 $ 663,831 $ 662,804 $ 649,658 $ 666,481 $ 665,145 $ 650,765 3.950 % Senior Notes due 2025 348,645 347,631 341,763 349,163 347,938 341,415 4.650 % Senior Notes due 2026 467,204 465,848 458,425 467,204 465,705 459,617 4.500 % Senior Notes due 2028 350,175 347,923 338,199 357,094 354,665 346,121 4.750 % Senior Notes due 2028 381,848 379,816 370,935 382,888 380,747 374,767 6.350 % Senior Notes due 2029 600,000 593,364 622,248 600,000 593,069 626,994 4.050 % Senior Notes due 2030 1,100,612 1,093,906 1,025,726 1,104,593 1,097,609 1,036,097 6.150 % Senior Notes due 2033 750,000 741,302 769,373 750,000 741,125 780,203 5.450 % Senior Notes due 2044 600,000 594,070 551,802 600,000 594,031 545,154 5.300 % Senior Notes due 2048 700,000 687,798 611,492 700,000 687,735 614,082 5.500 % Senior Notes due 2048 350,000 342,947 310,674 350,000 342,913 312,365 5.250 % Senior Notes due 2050 1,000,000 984,276 895,150 1,000,000 984,206 895,440 Finance lease liabilities 30,394 30,394 30,394 28,668 28,668 28,668 Total long - term debt $ 7,342,709 $ 7,272,079 $ 6,975,839 $ 7,356,091 $ 7,283,556 $ 7,011,688 _________________________________________________________________________________________ (1) Fair value is measured using the market approach and Level - 2 fair value inputs. 29 Table of Contents WESTERN MIDSTREAM PARTNERS, LP AND WESTERN MIDSTREAM OPERATING, LP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 10. DEBT AND INTEREST EXPENSE Debt activity. The following table presents the debt activity for the three months ended March 31, 2024: thousands Carrying Value Balance at December 31, 2023 $ 7,901,304 Commercial paper borrowings (repayments), net (1) ( 510,379 ) Repayment of 3.100 % Senior Notes due 2025 ( 2,650 ) Repayment of 3.950 % Senior Notes due 2025 ( 518 ) Repayment of 4.500 % Senior Notes due 2028 ( 6,919 ) Repayment of 4.750 % Senior Notes due 2028 ( 1,040 ) Repayment of 4.050 % Senior Notes due 2030 ( 3,981 ) Finance lease liabilities 2,751 Other 1,905 Balance at March 31, 2024 $ 7,380,473 ________________________________________________________________________________________ (1) Net of borrowings and repayments related to commercial paper notes with original maturities of 90 days or less. WES Operating Senior Notes. WES Operating issued the Fixed - Rate 3.100 % Senior Notes due 2025, 4.050 % Senior Notes due 2030, 5.250 % Senior Notes due 2050, and the Floating - Rate Senior Notes due 2023 in January 2020. Including the effects of the issuance prices, underwriting discounts, and interest - rate adjustments, the effective interest rates of the Senior Notes due 2025, 2030, and 2050, were 3.290 %, 4.169 %, and 5.363 %, respectively, at March 31, 2024, and were 3.790 %, 4.671 %, and 5.869 %, respectively, at March 31, 2023. The effective interest rate of these notes is subject to adjustment from time to time due to a change in credit rating. During the three months ended March 31, 2024, WES Operating purchased and retired $ 15.1 million of certain of its senior notes via open-market repurchases with cash from operations (see Debt activity above) and a gain of $ 0.5 million was recognized for the early retirement of portions of these notes. As of March 31, 2024, the 3.100 % Senior Notes due 2025 were classified as long-term debt on the consolidated balance sheet as WES Operating has the ability and intent to refinance these obligations using long-term debt. Subsequent to March 31, 2024, WES Operating purchased and retired $ 134.9 million of certain of its senior notes via open-market repurchases. During the third quarter of 2023, WES Operating completed the public offering of $ 600.0 million in aggregate principal amount of 6.350 % Senior Notes due 2029. Net proceeds from the offering were used to fund a portion of the aggregate purchase price for the Meritage acquisition (see Note 3 ), to pay related costs and expenses, and for general partnership purposes. During the second quarter of 2023, WES Operating completed the public offering of $ 750.0 million in aggregate principal amount of 6.150 % Senior Notes due 2033. Net proceeds from the offering were used to repay borrowings under the RCF and for general partnership purposes. In addition, during 2023, WES Operating purchased and retired $ 276.7 million of certain of its senior notes via open-market repurchases and redeemed the total principal amount outstanding on the Floating-Rate Senior Notes due 2023 at par value with cash on hand. As of March 31, 2024, WES Operating was in compliance with all covenants under the relevant governing indentures. 30 Table of Contents WESTERN MIDSTREAM PARTNERS, LP AND WESTERN MIDSTREAM OPERATING, LP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 10. DEBT AND INTEREST EXPENSE Revolving credit facility. In April 2023, WES Operating (i) repaid all then-outstanding borrowings under its RCF with proceeds from the 6.150 % Senior Notes due 2033 offering, and (ii) entered into an amendment to its RCF to, among other things, extend the maturity date to April 2028 and provide for a maximum borrowing capacity up to $ 2.0 billion, expandable to a maximum of $ 2.5 billion, through the maturity date. As of March 31, 2024, there were no outstanding borrowings and $ 0.5 million of outstanding letters of credit, resulting in $ 1.9 billion in effective borrowing capacity under the RCF, after taking into account the $ 100.0 million of outstanding commercial paper borrowings (see below), for which we maintain availability under the RCF as support for WES Operating’s commercial paper program. As of March 31, 2024 and 2023, the interest rate on any outstanding RCF borrowings was 6.63 % and 6.21 %, respectively. The facility - fee rate was 0.20 % at March 31, 2024 and 2023. As of March 31, 2024, WES Operating was in compliance with all covenants under the RCF. Commercial paper program. In November 2023, WES operating entered into an unsecured commercial paper program under which it may issue (and have outstanding at any one time) an aggregate principal amount up to $ 2.0 billion. WES Operating intends to maintain a minimum aggregate available borrowing capacity under the RCF equal to the aggregate amount of outstanding commercial paper borrowings. The maturities of the notes may vary, but may not exceed 397 days. As of March 31, 2024, there were $ 100.0 million aggregate principal amount of short-term notes outstanding under the commercial paper program at a weighted-average interest rate of 6.00 % and weighted-average maturity of four days . Interest expense. The following table summarizes the amounts included in interest expense: Three Months Ended March 31, thousands 2024 2023 Long - term and short - term debt $ ( 95,956 ) $ ( 81,151 ) Finance lease liabilities ( 677 ) ( 163 ) Commitment fees and amortization of debt-related costs ( 3,200 ) ( 2,881 ) Capitalized interest 5,327 2,525 Interest expense $ ( 94,506 ) $ ( 81,670 ) 11. COMMITMENTS AND CONTINGENCIES Environmental obligations. The Partnership is subject to various environmental-remediation obligations arising from federal, state, and local regulations regarding air and water quality, hazardous and solid waste disposal, and other environmental matters. As of March 31, 2024 and December 31, 2023, the consolidated balance sheets included $ 3.5 million and $ 7.3 million, respectively, of liabilities for remediation and reclamation obligations. The current portion of these amounts is included in Accrued liabilities , and the long-term portion of these amounts is included in Other liabilities. Litigation and legal proceedings. From time to time, the Partnership is involved in legal, tax, regulatory, and other proceedings in various forums regarding performance, contracts, and other matters that arise in the ordinary course of business. Management is not aware of any such proceeding for which the final disposition could have a material adverse effect on the Partnership’s financial condition, results of operations, or cash flows. Other commitments. The Partnership has payment obligations, or commitments, that include, among other things, a revolving credit facility, other third - party long - term debt, obligations related to the Partnership’s capital spending programs, pipeline and offload commitments, and various operating and finance leases. The payment obligations related to the Partnership’s capital spending programs, the majority of which is expected to be paid in the next 12 months, primarily relate to expansion, construction, and asset - integrity projects at the West Texas complex, DBM water systems, DJ Basin complex, Powder River Basin complex, and DBM oil system. 31 Table of Contents