WES filing — read by section

Item 2. Management’s Discussion and Analysis

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 
 
 The following discussion analyzes our financial condition and results of operations and should be read in conjunction with the Consolidated Financial Statements and Notes to Consolidated Financial Statements, wherein WES Operating is fully consolidated, and which are included under Part I, Item 1 of this quarterly report, and the historical consolidated financial statements, and the notes thereto, which are included under Part II, Item 8 of the 2023 Form 10-K as filed with the SEC on February 21, 2024. 
 The Partnership’s assets include assets owned and ownership interests accounted for by us under the equity method of accounting, through our 98.0% partnership interest in WES Operating, as of September 30, 2024 (see Note 7—Equity Investments in the Notes to Consolidated Financial Statements under Part I, Item 1 of this Form 10-Q). We also own and control the entire non-economic general partner interest in WES Operating GP, and our general partner is owned by Occidental. 
 
 CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS 
 
 We have made in this Form 10-Q, and may make in other public filings, press releases, and statements by management, forward - looking statements concerning our operations, economic performance, and financial condition. These forward - looking statements include statements preceded by, followed by, or that otherwise include the words “believes,” “expects,” “anticipates,” “intends,” “estimates,” “projects,” “target,” “goal,” “plans,” “objective,” “should,” or similar expressions or variations on such expressions. These statements discuss future expectations, contain projections of results of operations or financial condition, or include other “forward - looking” information. 
 Although we and our general partner believe that the expectations reflected in our forward - looking statements are reasonable, neither we nor our general partner can provide any assurance that such expectations will prove correct. These forward - looking statements involve risks and uncertainties. Important factors that could cause actual results to differ materially from expectations include, but are not limited to, the following: 
 
 • our ability to pay distributions to our unitholders and the amount of such distributions; 
 
 • our assumptions about the energy market; 
 
 • future throughput (including Occidental production) that is gathered or processed by, or transported through, our assets; 
 
 • our operating results; 
 
 • competitive conditions; 
 
 • technology; 
 
 • the availability of capital resources to fund acquisitions, capital expenditures, and other contractual obligations, and our ability to access financing through the debt or equity capital markets; 
 
 • the supply of, demand for, and price of oil, natural gas, NGLs, and related products or services; 
 
 • commodity - price risks inherent in percent - of - proceeds, percent - of - product, keep - whole, and fixed-recovery processing contracts; 
 
 • weather and natural disasters; 
 
 • inflation; 
 
 • the availability of goods and services; 
 
 • general economic conditions, internationally, domestically, or in the jurisdictions in which we are doing business; 
 34 

 Table of Contents 

 • federal, state, and local laws and state - approved voter ballot initiatives, including those laws or ballot initiatives that limit producers’ hydraulic - fracturing activities or other oil and natural - gas development or operations; 
 
 • environmental liabilities; 
 
 • legislative or regulatory changes, including changes affecting our status as a partnership for federal income tax purposes; 
 
 • changes in the financial or operational condition of Occidental; 
 
 • the creditworthiness of Occidental or our other counterparties, including financial institutions, operating partners, and other parties; 
 
 • changes in Occidental’s capital program, corporate strategy, or other desired areas of focus; 
 
 • our commitments to capital projects; 
 
 • our ability to access liquidity under the RCF and commercial paper program; 
 
 • our ability to repay debt; 
 
 • the resolution of litigation or other disputes; 
 
 • conflicts of interest among us and our general partner and its related parties, including Occidental, with respect to, among other things, the allocation of capital and operational and administrative costs, and our future business opportunities; 
 
 • our ability to maintain and/or obtain rights to operate our assets on land owned by third parties; 
 
 • our ability to acquire assets on acceptable terms from third parties; 
 
 • non - payment or non - performance of significant customers, including under gathering, processing, transportation, and disposal agreements; 
 
 • the timing, amount, and terms of future issuances of equity and debt securities; 
 
 • the outcome of pending and future regulatory, legislative, or other proceedings or investigations, and continued or additional disruptions in operations that may occur as we and our customers comply with any regulatory orders or other state or local changes in laws or regulations; 
 
 • cyber-attacks or security breaches; and 
 
 • other factors discussed below, in “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Estimates” included in the 2023 Form 10 - K, in our quarterly reports on Form 10 - Q, and in our other public filings and press releases. 
 
 Risk factors and other factors noted throughout or incorporated by reference in this Form 10-Q could cause actual results to differ materially from those contained in any forward - looking statement. Except as required by law, we undertake no obligation to publicly update or revise any forward - looking statements, whether as a result of new information, future events, or otherwise. 
 35 

 Table of Contents 

 EXECUTIVE SUMMARY 
 
 We are a midstream energy company organized as a publicly traded partnership, engaged in the business of gathering, compressing, treating, processing, and transporting natural gas; gathering, stabilizing, and transporting condensate, NGLs, and crude oil; and gathering and disposing of produced water. In our capacity as a natural - gas processor, we also buy and sell natural gas, NGLs, and condensate on behalf of ourselves and our customers under certain contracts. To provide superior midstream service, we focus on ensuring the reliability and performance of our systems, creating sustainable cost efficiencies, enhancing our safety culture, and protecting the environment. We own or have investments in assets located in Texas, New Mexico, and the Rocky Mountains (Colorado, Utah, and Wyoming). As of September 30, 2024, our assets and investments consisted of the following: 
 
 Wholly
Owned and
Operated Operated
Interests Equity
Interests 
 Gathering systems (1) 
 18 2 1 
 Treating facilities 39 3 — 
 Natural - gas processing plants/trains 
 26 3 1 
 NGLs pipelines 3 — 4 
 Natural - gas pipelines 
 6 — 1 
 Crude - oil pipelines 
 2 1 1 

 _________________________________________________________________________________________ 
 (1) Includes the DBM water systems. 
 
 Significant financial and operational events during the nine months ended September 30, 2024, included the following: 
 
 • We closed on the sale of (i) several equity investments to third parties for combined proceeds of $588.6 million, which included $5.9 million in pro-rata distributions through closing, and (ii) our 33.75% interest in the Marcellus Interest systems for proceeds of $206.2 million. See Acquisitions and Divestitures within this Item 2 for additional information. 
 
 • WES Operating completed the public offering of $800.0 million in aggregate principal amount of 5.450% Senior Notes due 2034. Net proceeds from the offering will be used to repay a portion of certain senior notes due in 2025 and for general partnership purposes, including the funding of capital expenditures. See Liquidity and Capital Resources within this Item 2 for additional information. 
 
 • WES Operating purchased and retired $150.0 million of certain of its senior notes via open-market repurchases. 
 
 • Our regular third - quarter 2024 per - unit distribution is unchanged from the second-quarter 2024 per-unit distribution of $0.875. 
 
 • Natural - gas throughput attributable to WES totaled 5,016 MMcf/d and 4,998 MMcf/d for the three and nine months ended September 30, 2024, respectively, representing a 1% increase and a 17% increase compared to the three months ended June 30, 2024, and nine months ended September 30, 2023, respectively. 
 
 • Crude - oil and NGLs throughput attributable to WES totaled 506 MBbls/d and 529 MBbls/d for the three and nine months ended September 30, 2024, respectively, representing a 2% decrease and a 17% decrease compared to the three months ended June 30, 2024, and nine months ended September 30, 2023, respectively. 
 
 • Produced - water throughput attributable to WES totaled 1,099 MBbls/d and 1,102 MBbls/d for the three and nine months ended September 30, 2024, respectively, representing a 2% increase and an 11% increase compared to the three months ended June 30, 2024, and nine months ended September 30, 2023, respectively. 
 
 • Gross margin was $684.5 million and $2.1 billion for the three and nine months ended September 30, 2024, respectively, representing a 1% decrease and a 22% increase compared to the three months ended June 30, 2024, 
 36 

 Table of Contents 

 and nine months ended September 30, 2023, respectively. See Reconciliation of Non-GAAP Financial Measures within this Item 2. 
 
 • Adjusted gross margin for natural - gas assets (as defined under the caption Reconciliation of Non-GAAP Financial Measures within this Item 2) averaged $1.29 per Mcf and $1.31 per Mcf for the three and nine months ended September 30, 2024, respectively, representing a 3% decrease and a 3% increase compared to the three months ended June 30, 2024, and nine months ended September 30, 2023, respectively. 
 
 • Adjusted gross margin for crude - oil and NGLs assets (as defined under the caption Reconciliation of Non-GAAP Financial Measures within this Item 2) averaged $2.88 per Bbl and $2.92 per Bbl for the three and nine months ended September 30, 2024, respectively, representing a 3% decrease and a 17% increase compared to the three months ended June 30, 2024, and nine months ended September 30, 2023, respectively. 
 
 • Adjusted gross margin for produced - water assets (as defined under the caption Reconciliation of Non-GAAP Financial Measures within this Item 2) averaged $0.96 per Bbl for both the three and nine months ended September 30, 2024, representing a 1% decrease and a 16% increase compared to the three months ended June 30, 2024, and nine months ended September 30, 2023, respectively. 
 
 The following table provides additional information on throughput for the periods presented below: 
 
 Three Months Ended Nine Months Ended 
 
 September 30, 2024 June 30, 2024 Inc/
(Dec) September 30, 2024 September 30, 2023 Inc/
(Dec) 
 Throughput for natural-gas assets (MMcf/d) 
 Delaware Basin 1,889 1,858 2 % 1,836 1,612 14 % 
 DJ Basin 1,418 1,452 (2) % 1,414 1,316 7 % 
 Powder River Basin 505 426 19 % 446 36 NM 
 Equity investments 503 508 (1) % 507 458 11 % 
 Other 874 911 (4) % 967 1,017 (5) % 
 Total throughput for natural - gas assets 
 5,189 5,155 1 % 5,170 4,439 16 % 
 Throughput for crude-oil and NGLs assets (MBbls/d) 
 Delaware Basin 246 241 2 % 237 211 12 % 
 DJ Basin 87 91 (4) % 88 68 29 % 
 Powder River Basin 26 25 4 % 24 — NM 
 Equity investments 124 130 (5) % 152 328 (54) % 
 Other 34 39 (13) % 39 41 (5) % 
 Total throughput for crude - oil and NGLs assets 
 517 526 (2) % 540 648 (17) % 
 Throughput for produced-water assets (MBbls/d) 
 Delaware Basin 1,121 1,102 2 % 1,124 1,014 11 % 
 
 Total throughput for produced - water assets 
 1,121 1,102 2 % 1,124 1,014 11 % 
 
 _________________________________________________________________________________________ 
 NM — Not meaningful 
 37 

 Table of Contents 

 OUTLOOK 
 
 We expect our business to be affected by the below - described key trends and uncertainties. Our expectations are based on assumptions made by us and information currently available to us. To the extent our underlying assumptions about, or interpretations of, available information prove incorrect, our actual results may vary materially from expected results. 
 
 Impact of producer activity. Our business is primarily driven by the level of production of crude oil and natural gas by producers in our areas of operation. This activity, however, can be impacted negatively by, among other things, commodity-price fluctuations and operational challenges. Fluctuating crude - oil, natural - gas, and NGLs prices can reduce the level of our customers’ activities and change the allocation of capital within their own asset portfolios. Such fluctuations can also impact us directly to the extent we take ownership of and sell certain volumes at the tailgate of our plants for our own account. The New York Mercantile Exchange (“NYMEX”) West Texas Intermediate crude - oil daily settlement prices during 2023 ranged from a low of $66.74 per barrel in March 2023 to a high of $93.68 per barrel in September 2023, and prices during the nine months ended September 30, 2024, ranged from a low of $65.75 per barrel in September 2024 to a high of $86.91 per barrel in April 2024. The Waha Hub natural gas price during 2023 ranged from a low of ($3.8400) per MMBtu in January 2023 to a high of $3.2750 per MMBtu in January 2023, and prices during the nine months ended September 30, 2024, ranged from a low of ($6.2250) per MMBtu in August 2024 to a high of $8.2650 per MMBtu in January 2024. The extent and duration of commodity - price volatility, and the associated direct and indirect impact on our business, cannot be predicted. To address the risks posed by fluctuating commodity prices, we intend to continue evaluating the relevant price environments and adjust our capital spending plans to reflect our customers’ anticipated activity levels, while maintaining appropriate liquidity and financial flexibility. 
 Additionally, even when the commodity-price environments are favorable, our customers must manage numerous operational challenges, including severe weather disruptions, downstream and produced-water takeaway constraints, seismicity concerns, new regulatory requirements, and the ability to optimize the efficiency and results of large, complex drilling programs. Our producers’ ability to mitigate or manage such challenges can have a significant impact on the volumes available for us to service in the short term. For this reason, we strive to work proactively with our customers whenever possible to provide high levels of reliability on our systems and help them meet these operational challenges as they arise. 
 
 Impact of inflation and supply-chain disruptions. Although somewhat abated during 2024, the U.S. economy has recently experienced significant inflation relative to historical precedent. Inflation has raised our costs for steel products, automation components, power supply, labor, materials, fuel, and services, which has increased our operating costs and capital expenditures. Any increases in inflationary pressure could materially and negatively impact our financial results. To the extent permitted by regulations and escalation provisions in certain of our existing agreements, we have the ability to recover a portion of increased costs in the form of higher fees. 
 
 Impact of interest rates. Short- and long-term interest rates can be volatile, resulting in immediate changes to interest expense on RCF borrowings and commercial paper borrowings. Any future increases in interest rates likely will result in additional increases in financing costs. As with other yield-oriented securities, our unit price could be impacted by our implied distribution yield relative to market interest rates. Therefore, changes in interest rates, either positive or negative, may affect the yield requirements of investors who invest in our units, and a rising interest-rate environment could have an adverse impact on our unit price and our ability to issue additional equity, or increase the cost of issuing equity, to make acquisitions, to reduce debt, or for other purposes. However, we expect our cost of capital to remain competitive, as our peers face similar interest-rate dynamics. 
 38 

 Table of Contents 

 ACQUISITIONS AND DIVESTITURES 
 
 Marcellus Interest systems. During the second quarter of 2024, we closed on the sale of our 33.75% interest in the Marcellus Interest systems for proceeds of $206.2 million, resulting in a net gain on sale of $63.9 million that was recorded as Gain (loss) on divestiture and other, net in the consolidated statement of operations. 
 
 Mont Belvieu JV, Whitethorn LLC, Panola, and Saddlehorn. During the first quarter of 2024, we 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. 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 Mont Belvieu JV and Whitethorn LLC also resolved outstanding legal proceedings associated with those assets. 
 
 Meritage. In October 2023, we closed on the acquisition of Meritage for $885.0 million (subject to certain customary post-closing adjustments) funded with cash, including proceeds from our $600.0 million senior note issuance in September 2023 and borrowings on the RCF. 
 
 See Note 3—Acquisitions and Divestitures and Note 10—Debt and Interest Expense under Part I, Item 1 of this Form 10-Q. 
 
 39 

 Table of Contents 

 RESULTS OF OPERATIONS 
 
 OPERATING RESULTS 
 
 The following tables and discussion present a summary of our results of operations: 
 
 Three Months Ended Nine Months Ended 
 
 thousands September 30, 2024 June 30, 2024 September 30, 2024 September 30, 2023 
 Total revenues and other (1) 
 $ 883,362 $ 905,629 $ 2,676,720 $ 2,248,268 
 Equity income, net – related parties 23,977 27,431 84,227 116,839 
 Total operating expenses (1) 
 511,940 522,653 1,515,384 1,373,793 
 Gain (loss) on divestiture and other, net 467 59,342 299,426 (3,668) 
 Operating income (loss) 395,866 469,749 1,544,989 987,646 
 Interest expense (94,149) (90,522) (279,177) (250,606) 
 Gain (loss) on early extinguishment of debt — 4,879 5,403 15,378 
 Other income (expense), net 9,565 4,213 16,124 2,817 
 Income (loss) before income taxes 311,282 388,319 1,287,339 755,235 
 Income tax expense (benefit) 15,390 755 17,667 2,980 
 Net income (loss) 295,892 387,564 1,269,672 752,255 
 Net income (loss) attributable to noncontrolling interests 7,412 8,916 29,714 18,393 
 Net income (loss) attributable to Western Midstream Partners, LP (2) 
 $ 288,480 $ 378,648 $ 1,239,958 $ 733,862 

 _________________________________________________________________________________________ 
 (1) Total revenues and other includes amounts earned from services provided to related parties and from the sale of natural gas, condensate, and NGLs to related parties. Total operating expenses includes amounts charged by related parties for services received. See Note 6—Related-Party Transactions in the Notes to Consolidated Financial Statements under Part I, Item 1 of this Form 10-Q. 
 (2) For reconciliations to comparable consolidated results of WES Operating, see Items Affecting the Comparability of Financial Results with WES Operating within this Item 2. 
 
 For purposes of the following discussion, any increases or decreases “for the three months ended September 30, 2024” refer to the comparison of the three months ended September 30, 2024, to the three months ended June 30, 2024; and any increases or decreases “for the nine months ended September 30, 2024” refer to the comparison of the nine months ended September 30, 2024, to the nine months ended September 30, 2023. 
 40 

 Table of Contents 

 Throughput 
 
 Three Months Ended Nine Months Ended 
 
 September 30, 2024 June 30, 2024 Inc/
(Dec) September 30, 2024 September 30, 2023 Inc/
(Dec) 
 Throughput for natural-gas assets (MMcf/d) 
 Gathering, treating, and transportation 388 438 (11) % 477 407 17 % 
 Processing 4,298 4,209 2 % 4,186 3,574 17 % 
 Equity investments (1) 
 503 508 (1) % 507 458 11 % 
 Total throughput 5,189 5,155 1 % 5,170 4,439 16 % 
 Throughput attributable to noncontrolling interests (2) 
 173 167 4 % 172 156 10 % 
 Total throughput attributable to WES for natural - gas assets 
 5,016 4,988 1 % 4,998 4,283 17 % 
 Throughput for crude-oil and NGLs assets (MBbls/d) 
 Gathering, treating, and transportation 393 396 (1) % 388 320 21 % 
 Equity investments (1) 
 124 130 (5) % 152 328 (54) % 
 Total throughput 517 526 (2) % 540 648 (17) % 
 Throughput attributable to noncontrolling interests (2) 
 11 11 — % 11 13 (15) % 
 Total throughput attributable to WES for crude - oil and NGLs assets 
 506 515 (2) % 529 635 (17) % 
 Throughput for produced-water assets (MBbls/d) 
 Gathering and disposal 1,121 1,102 2 % 1,124 1,014 11 % 
 Throughput attributable to noncontrolling interests (2) 
 22 22 — % 22 20 10 % 
 Total throughput attributable to WES for produced - water assets 
 1,099 1,080 2 % 1,102 994 11 % 

 _________________________________________________________________________________________ 
 (1) Represents our share of average throughput for investments accounted for under the equity method of accounting. 
 (2) Includes (i) the 2.0% limited partner interest in WES Operating owned by an Occidental subsidiary and (ii) for natural - gas assets, the 25% third - party interest in Chipeta, which collectively represent WES’s noncontrolling interests. 
 
 Natural-gas assets 
 Total throughput attributable to WES for natural - gas assets increased by 28 MMcf/d for the three months ended September 30, 2024, primarily due to higher volumes at the Powder River Basin, West Texas, and Chipeta complexes due to increased production in the areas. These increases were offset partially by (i) lower volumes at the DJ Basin complex due to decreased production in the area and scheduled plant maintenance during the third quarter of 2024, (ii) lower volumes at the MIGC system due to certain temporary customer constraints, (iii) lower volumes at the Marcellus Interest systems due to the sale of the asset during the second quarter of 2024, and (iv) lower volumes at the Springfield gas-gathering system and Mi Vida plant. 
 Total throughput attributable to WES for natural - gas assets increased by 715 MMcf/d for the nine months ended September 30, 2024, primarily due to (i) higher volumes at the Powder River Basin complex due to the Meritage acquisition, (ii) higher volumes at the West Texas and DJ Basin complexes due to increased production in the areas, (iii) higher volumes at the Red Bluff Express pipeline due to the addition of a new receipt point into the pipeline, (iv) higher volumes at the Springfield gas-gathering system due to new third-party production, and (v) higher volumes at the Brasada plant. These increases were offset partially by (i) lower volumes at the Granger complex due to a contract expiration in the fourth quarter of 2023 and (ii) lower volumes at the Marcellus Interest systems due to the sale of the asset during the second quarter of 2024. 
 
 41 

 Table of Contents 

 Crude-oil and NGLs assets 
 Total throughput attributable to WES for crude - oil and NGLs assets decreased by 9 MBbls/d for the three months ended September 30, 2024, primarily due to (i) lower volumes at the DJ Basin oil system due to production declines in the surrounding areas, (ii) the divestiture of Wamsutter in the third quarter of 2024, and (iii) decreased volumes on the White Cliffs pipeline. These decreases were offset partially by higher volumes at the DBM oil system due to increased production in the area. 
 Total throughput attributable to WES for crude - oil and NGLs assets decreased by 106 MBbls/d for the nine months ended September 30, 2024, primarily due to the divestiture of Whitethorn LLC, Mont Belvieu JV, and Saddlehorn in the first quarter of 2024. These decreases were offset partially by (i) higher volumes at the DBM and DJ Basin oil systems due to increased production in the area and (ii) higher volumes at the Thunder Creek NGL pipeline, which was acquired as part of the Meritage acquisition. 
 
 Produced-water assets 
 Total throughput attributable to WES for produced - water assets increased by 19 MBbls/d and 108 MBbls/d for the three and nine months ended September 30, 2024, respectively, due to higher production. 
 
 Service Revenues 
 
 Three Months Ended Nine Months Ended 
 
 thousands except percentages September 30, 2024 June 30, 2024 Inc/
(Dec) September 30, 2024 September 30, 2023 Inc/
(Dec) 
 Service revenues – fee based $ 814,319 $ 793,785 3 % $ 2,389,366 $ 2,004,920 19 % 
 Service revenues – product based 49,115 61,466 (20) % 177,321 142,212 25 % 
 Total service revenues $ 863,434 $ 855,251 1 % $ 2,566,687 $ 2,147,132 20 % 

 Service revenues – fee based 
 Service revenues – fee based increased by $20.5 million for the three months ended September 30, 2024, primarily due to (i) $8.4 million at the West Texas complex as a result of increased throughput, partially offset by decreased electricity-related rates billed to customers and deficiency fees, (ii) $5.8 million at the DJ Basin complex as a result of increased electricity-related rates billed to customers, (iii) $3.7 million and $2.3 million at the Powder River Basin complex and DBM oil system, respectively, primarily due to increased throughput, and (iv) $3.1 million at the Chipeta complex primarily due to new and amended contracts effective July 2024. These increases were offset partially by a decrease of $2.0 million at the Springfield system primarily due to decreased throughput. 
 Service revenues – fee based increased by $384.4 million for the nine months ended September 30, 2024, primarily due to increases of (i) $135.3 million at the West Texas complex, the majority of which is due to increased throughput, and also due to a higher average fee resulting from a cost-of-service rate redetermination effective January 1, 2024, and increased deficiency fees on certain contracts with increasing throughput minimums, (ii) $132.9 million at the Powder River Basin complex attributable to the acquisition of Meritage, (iii) $64.7 million at the DJ Basin complex primarily due to increased throughput, (iv) $64.3 million and $25.2 million at the DBM water and DBM oil systems, respectively, as a result of increased throughput and a higher average fee resulting from a cost-of-service rate redetermination effective January 1, 2024, and (v) $4.8 million at the Chipeta complex primarily due to new and amended contracts effective July 2024. These increases were offset partially by decreases of (i) $13.0 million at the Marcellus Interest systems due to the sale of the asset during the second quarter of 2024, (ii) $11.6 million at the Brasada complex due to a change in contract terms effective July 1, 2023, partially offset by increased throughput, (iii) $8.8 million at the Granger complex due to a contract expiration in the fourth quarter of 2023, and (iv) $6.0 million and $3.0 million at the Springfield and DJ Basin oil systems, respectively, primarily due to decreased revenues associated with demand volumes, partially offset by increased throughput and higher average fees resulting from cost-of-service rate redeterminations effective January 1, 2024. 
 
 42 

 Table of Contents 

 Service revenues – product based 
 Service revenues – product based decreased by $12.4 million for the three months ended September 30, 2024, primarily due to decreases of (i) $9.1 million at the West Texas complex due to decreased product recoveries and average prices and (ii) $1.5 million at the DJ Basin complex due to decreased volumes sold. 
 Service revenues – product based increased by $35.1 million for the nine months ended September 30, 2024, primarily due to increases of (i) $24.5 million and $5.2 million at the West Texas and DJ Basin complexes, respectively, due to increased volumes sold, (ii) $3.6 million at the Powder River Basin complex attributable to the acquisition of Meritage, and (iii) $3.1 million at the DBM water systems due to increased skim-oil volumes sold. 
 
 Product Sales 
 
 Three Months Ended Nine Months Ended 
 
 thousands except percentages and per-unit amounts September 30, 2024 June 30, 2024 Inc/
(Dec) September 30, 2024 September 30, 2023 Inc/
(Dec) 
 Natural - gas sales 
 $ (4,502) $ 8,931 (150) % $ 7,623 $ 26,466 (71) % 
 NGLs sales 24,175 41,180 (41) % 101,453 73,870 37 % 
 Total Product sales $ 19,673 $ 50,111 (61) % $ 109,076 $ 100,336 9 % 
 Per - unit gross average sales price: 
 
 Natural gas (per Mcf) $ (0.63) $ (0.26) (142) % $ 0.36 $ 1.67 (78) % 
 NGLs (per Bbl) 26.76 28.06 (5) % 28.55 26.65 7 % 

 Natural-gas sales 
 Natural - gas sales decreased by $13.4 million for the three months ended September 30, 2024, primarily due to a decrease of $12.3 million at the West Texas complex as a result of decreased average prices and volumes sold. 
 Natural - gas sales decreased by $18.8 million for the nine months ended September 30, 2024, primarily due to a decrease of $25.3 million at the West Texas complex as a result of decreased average prices, partially offset by increased volumes sold. This decrease was offset partially by increases of (i) $5.2 million at the Powder River Basin complex attributable to the acquisition of Meritage and (ii) $4.4 million at the DJ Basin complex as a result of changes in contract mix during the second quarter of 2023. 
 
 NGLs sales 
 NGLs sales decreased by $17.0 million for the three months ended September 30, 2024, primarily due to decreases of (i) $7.6 million at the West Texas complex due to decreased average prices, (ii) $3.2 million at the Powder River Basin complex primarily due to decreased volumes sold and average prices, (iii) $1.8 million at the Chipeta complex due to a contract change effective during the third quarter of 2024, and (iv) $1.7 million at the DJ Basin complex due to lower volumes sold, partially offset by higher average prices. 
 NGLs sales increased by $27.6 million for the nine months ended September 30, 2024, primarily due to increases of (i) $18.8 million at the Powder River Basin complex attributable to the acquisition of Meritage, (ii) $9.2 million at the DJ Basin complex due to increased volumes sold, partially offset by decreased average prices, and (iii) $2.1 million at the DBM water systems due to increased skim-oil volumes sold. These increases were offset partially by a decrease of $2.5 million at the Chipeta complex due to a contract change effective during the third quarter of 2024. 
 
 43 

 Table of Contents 

 Equity Income, Net – Related Parties 
 
 Three Months Ended Nine Months Ended 
 
 thousands except percentages September 30, 2024 June 30, 2024 Inc/
(Dec) September 30, 2024 September 30, 2023 Inc/
(Dec) 
 Equity income, net – related parties $ 23,977 $ 27,431 (13) % $ 84,227 $ 116,839 (28) % 

 Equity income, net – related parties decreased by $3.5 million for the three months ended September 30, 2024, primarily due to a decrease of $3.0 million at TEP. 
 Equity income, net – related parties decreased by $32.6 million for the nine months ended September 30, 2024, primarily due to decreases of (i) $27.2 million resulting from the sale of several equity investments to third parties in the first quarter of 2024 and (ii) $8.7 million at TEP. These decreases were offset partially by an increase of $3.1 million at Red Bluff. See Note 3—Acquisitions and Divestitures . 
 
 Cost of Product and Operation and Maintenance Expenses 
 
 Three Months Ended Nine Months Ended 
 
 thousands except percentages September 30, 2024 June 30, 2024 Inc/
(Dec) September 30, 2024 September 30, 2023 Inc/
(Dec) 
 Residue purchases $ (3,719) $ 85 NM $ 5,594 $ 24,584 (77) % 
 NGLs purchases 56,604 67,574 (16) % 194,603 151,165 29 % 
 Other (20,038) (13,649) (47) % (67,261) (51,954) (29) % 
 Cost of product 32,847 54,010 (39) % 132,936 123,795 7 % 
 Operation and maintenance 231,066 223,319 3 % 649,324 562,104 16 % 
 Total Cost of product and Operation and maintenance expenses $ 263,913 $ 277,329 (5) % $ 782,260 $ 685,899 14 % 

 Residue purchases 
 Residue purchases decreased by $3.8 million for the three months ended September 30, 2024, primarily due to lower average prices at the West Texas complex. 
 Residue purchases decreased by $19.0 million for the nine months ended September 30, 2024, primarily due to decreases of (i) $13.2 million at the West Texas complex due to lower average prices and (ii) $5.3 million at the Granger complex attributable to decreased volumes purchased. 
 
 NGLs purchases 
 NGLs purchases decreased by $11.0 million for the three months ended September 30, 2024, primarily due to decreases of (i) $4.6 million at the DJ Basin complex attributable to decreased volumes purchased, (ii) $2.3 million and $1.5 million at the Chipeta and Powder River Basin complexes, respectively, due to contract changes effective in 2024, and (iii) $1.9 million at the West Texas complex due to decreased product recoveries. 
 NGLs purchases increased by $43.4 million for the nine months ended September 30, 2024, primarily due to increases of (i) $38.5 million at the West Texas complex primarily attributable to increased volumes purchased and (ii) $2.5 million at the DBM water systems due to increased skim-oil volumes. These increases were offset partially by a decrease of $2.7 million at the Chipeta complex due to a contract change effective during the third quarter of 2024. 
 
 Other items 
 Other items decreased by $6.4 million for the three months ended September 30, 2024, primarily due to changes in imbalance positions at the West Texas complex. 
 Other items decreased by $15.3 million for the nine months ended September 30, 2024, primarily due to decreases of $31.3 million and $2.2 million at the West Texas and Chipeta complexes, respectively, due to changes in imbalance positions. These decreases were offset partially by increases of (i) $11.4 million at the Powder River Basin complex attributable to the acquisition of Meritage and (ii) $10.7 million at the DJ Basin complex attributable to changes in imbalance positions. 
 
 44 

 Table of Contents 

 Operation and maintenance expense 
 Operation and maintenance expense increased by $7.7 million for the three months ended September 30, 2024, primarily due to increases of (i) $4.0 million in mechanical-integrity costs and (ii) $3.2 million in salaries and wages costs. 
 Operation and maintenance expense increased by $87.2 million for the nine months ended September 30, 2024, primarily due to increases of (i) $27.4 million in salaries and wages costs, (ii) $17.4 million in equipment, materials, maintenance, and repair costs, (iii) $14.3 million in chemical and treating services, (iv) $8.8 million in equipment rental costs, (v) $8.8 million in land-related costs, and (vi) $6.2 million in water-disposal costs. 
 
 Other Operating Expenses 
 
 Three Months Ended Nine Months Ended 
 
 thousands except percentages September 30, 2024 June 30, 2024 Inc/
(Dec) September 30, 2024 September 30, 2023 Inc/
(Dec) 
 General and administrative $ 64,726 $ 62,933 3 % $ 195,498 $ 159,572 23 % 
 Property and other taxes 12,635 17,429 (28) % 43,984 39,961 10 % 
 Depreciation and amortization 166,015 163,432 2 % 487,438 435,481 12 % 
 Long - lived asset and other impairments 
 4,651 1,530 NM 6,204 52,880 (88) % 
 
 Total other operating expenses $ 248,027 $ 245,324 1 % $ 733,124 $ 687,894 7 % 

 General and administrative expenses 
 General and administrative expenses increased by $35.9 million for the nine months ended September 30, 2024, primarily due to increases of (i) $19.5 million in personnel costs, (ii) $9.5 million in information technology costs, and (iii) $6.4 million in other corporate-related expenses. 
 
 Property and other taxes 
 Property and other taxes decreased by $4.8 million for the three months ended September 30, 2024, primarily due to a lower ad valorem property tax accrual recorded during the third quarter of 2024 related to lower property tax values at the DJ Basin complex. 
 Property and other taxes increased by $4.0 million for the nine months ended September 30, 2024, primarily due to increases of (i) $2.2 million at the Powder River Basin complex due to the acquisition of Meritage and (ii) $1.3 million due to higher property tax values from expansion in West Texas. 
 
 Depreciation and amortization expense 
 Depreciation and amortization expense increased by $52.0 million for the nine months ended September 30, 2024, primarily due to increases of (i) $48.5 million at the Powder River Basin complex attributable to the acquisition of Meritage and (ii) $15.4 million and $5.5 million at the West Texas complex and DBM water systems, respectively, primarily related to capital projects being placed into service. These increases were offset partially by decreases of (i) $11.4 million at the DJ Basin complex primarily due to acceleration of depreciation expense during 2023 and updated salvage values and (ii) $4.5 million due to the sale of the Marcellus Interest systems in the second quarter of 2024. 
 
 Long-lived asset and other impairment expense 
 Long-lived asset and other impairment expense for the nine months ended September 30, 2024, was primarily due to a $4.2 million impairment of certain corporate office leases that are no longer being utilized. 
 Long - lived asset and other impairment expense for the nine months ended September 30, 2023, was primarily due to a $52.1 million impairment for assets located in the Rockies. 
 For further information on Long - lived asset and other impairment expense, see Note 8—Property, Plant, and Equipment in the Notes to Consolidated Financial Statements under Part I, Item 1 of this Form 10-Q. 
 
 45 

 Table of Contents 

 Interest Expense 
 
 Three Months Ended Nine Months Ended 
 
 thousands except percentages September 30, 2024 June 30, 2024 Inc/
(Dec) September 30, 2024 September 30, 2023 Inc/
(Dec) 
 Long - term and short - term debt 
 $ (93,555) $ (88,850) 5 % $ (278,361) $ (249,416) 12 % 
 Finance lease liabilities (632) (655) (4) % (1,964) (616) NM 
 Commitment fees and amortization of debt-related costs (3,244) (3,485) (7) % (9,929) (9,199) 8 % 
 Capitalized interest 3,282 2,468 33 % 11,077 8,625 28 % 
 
 Interest expense $ (94,149) $ (90,522) 4 % $ (279,177) $ (250,606) 11 % 

 Interest expense increased by $3.6 million for the three months ended September 30, 2024, primarily due to interest incurred on the 5.450% Senior Notes due 2034 that were issued during the third quarter of 2024. 
 Interest expense increased by $28.6 million for the nine months ended September 30, 2024, primarily due increases of (i) $29.3 million of interest incurred on the 6.350% Senior Notes due 2029 that were issued during the third quarter of 2023, (ii) $12.1 million of interest incurred on the 6.150% Senior Notes due 2033 that were issued during the second quarter of 2023, (iii) $5.7 million due to borrowings in 2024 on the commercial paper program that was established during the fourth quarter of 2023, and (iv) $5.0 million of interest incurred on the 5.450% Senior Notes due 2034 that were issued during the third quarter of 2024. These increases were offset partially by decreases of (i) $12.9 million due to credit-rating related interest-rate changes and lower outstanding balances on certain senior notes due to debt repurchases, (ii) $9.0 million due to no outstanding borrowings under the RCF during 2024, and (iii) $2.5 million due to higher capitalized interest. See Liquidity and Capital Resources—Debt and credit facilities within this Item 2. 
 
 Other Income (Expense), Net 
 
 Three Months Ended Nine Months Ended 
 
 thousands except percentages September 30, 2024 June 30, 2024 Inc/
(Dec) September 30, 2024 September 30, 2023 Inc/
(Dec) 
 Other income (expense), net $ 9,565 $ 4,213 127% $ 16,124 $ 2,817 NM 

 Other income (expense), net increased by $5.4 million and $13.3 million for the three and nine months ended September 30, 2024, respectively, primarily due to interest income earned resulting from higher cash and cash equivalent balances throughout 2024. 
 
 Income Tax Expense (Benefit) 
 
 Three Months Ended Nine Months Ended 
 
 thousands except percentages September 30, 2024 June 30, 2024 Inc/
(Dec) September 30, 2024 September 30, 2023 Inc/
(Dec) 
 Income (loss) before income taxes $ 311,282 $ 388,319 (20) % $ 1,287,339 $ 755,235 70 % 
 Income tax expense (benefit) 15,390 755 NM 17,667 2,980 NM 
 Effective tax rate 5 % — % 1 % — % 
 
 We are not a taxable entity for U.S. federal income tax purposes; therefore, our federal statutory rate is zero percent. However, income apportionable to Texas is subject to Texas margin tax. For the three and nine months ended September 30, 2024, the variance from the federal statutory rate was primarily impacted by a state margin tax rate increase associated with no longer being included in Occidental’s affiliated group tax return beginning in September 2024 due to Occidental’s sale of 19.5 million WES common units in August 2024 and the resulting decrease in WES ownership, inclusive of its ownership in WES Operating. 
 
 46 

 Table of Contents 

 RECONCILIATION OF NON-GAAP FINANCIAL MEASURES 
 
 Adjusted gross margin. We define Adjusted gross margin attributable to Western Midstream Partners, LP (“Adjusted gross margin”) as total revenues and other (less reimbursements for electricity - related expenses recorded as revenue), less cost of product, plus distributions from equity investments, and excluding the noncontrolling interest owners’ proportionate share of revenues and cost of product. We believe Adjusted gross margin is an important performance measure of our operations’ profitability and performance as compared to other companies in the midstream industry. Cost of product expenses include (i) costs associated with the purchase of natural gas and NGLs pursuant to our percent - of - proceeds, percent - of - product, and keep - whole contracts, (ii) costs associated with the valuation of gas and NGLs imbalances, (iii) costs associated with our obligations under certain contracts to redeliver a volume of natural gas to shippers, which is thermally equivalent to condensate retained by us and sold to third parties, and (iv) costs associated with our offload commitments with third parties providing firm-processing capacity. The electricity-related expenses included in our Adjusted gross margin definition relate to pass-through expenses that are recorded as Operation and maintenance expense with an offset recorded as revenue for the reimbursement by certain customers. 
 
 Adjusted EBITDA. We define Adjusted EBITDA attributable to Western Midstream Partners, LP (“Adjusted EBITDA”) as net income (loss), plus (i) distributions from equity investments, (ii) non - cash equity - based compensation expense, (iii) interest expense, (iv) income tax expense, (v) depreciation and amortization, (vi) impairments, and (vii) other expense (including lower of cost or market inventory adjustments recorded in cost of product), less (i) gain (loss) on divestiture and other, net, (ii) gain (loss) on early extinguishment of debt, (iii) income from equity investments, (iv) interest income, (v) income tax benefit, (vi) other income, and (vii) the noncontrolling interest owners’ proportionate share of revenues and expenses. We believe the presentation of Adjusted EBITDA provides information useful to investors in assessing our financial condition and results of operations and that Adjusted EBITDA is a widely accepted financial indicator of a company’s ability to incur and service debt, fund capital expenditures, and make distributions. Adjusted EBITDA is a supplemental financial measure that management and external users of our consolidated financial statements, such as industry analysts, investors, commercial banks, and rating agencies, use, among other measures, to assess the following: 
 • our operating performance as compared to other publicly traded partnerships in the midstream industry, without regard to financing methods, capital structure, or historical cost basis; 
 • the ability of our assets to generate cash flow to make distributions; and 
 • the viability of acquisitions and capital expenditures and the returns on investment of various investment opportunities. 
 
 Free cash flow. We define “Free cash flow” as net cash provided by operating activities less total capital expenditures and contributions to equity investments, plus distributions from equity investments in excess of cumulative earnings. Management considers Free cash flow an appropriate metric for assessing capital discipline, cost efficiency, and balance - sheet strength. Although Free cash flow is the metric used to assess our ability to make distributions to unitholders, this measure should not be viewed as indicative of the actual amount of cash that is available for distributions or planned for distributions for a given period. Instead, Free cash flow represents the amount of cash that is available in aggregate for distributions, debt repayments, and other general partnership purposes. 
 
 47 

 Table of Contents 

 Adjusted gross margin, Adjusted EBITDA, and Free cash flow are not defined in GAAP. The GAAP measure that is most directly comparable to Adjusted gross margin is gross margin. Net income (loss) and net cash provided by operating activities are the GAAP measures that are most directly comparable to Adjusted EBITDA. The GAAP measure that is most directly comparable to Free cash flow is net cash provided by operating activities. Our non - GAAP financial measures of Adjusted gross margin, Adjusted EBITDA, and Free cash flow should not be considered as alternatives to the GAAP measures of gross margin, net income (loss), net cash provided by operating activities, or any other measure of financial performance presented in accordance with GAAP. Adjusted gross margin, Adjusted EBITDA, and Free cash flow have important limitations as analytical tools because they exclude some, but not all, items that affect gross margin, net income (loss), and net cash provided by operating activities. Adjusted gross margin, Adjusted EBITDA, and Free cash flow should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. Our definitions of Adjusted gross margin, Adjusted EBITDA, and Free cash flow may not be comparable to similarly titled measures of other companies in our industry, thereby diminishing their utility as comparative measures. 
 Management compensates for the limitations of Adjusted gross margin, Adjusted EBITDA, and Free cash flow as analytical tools by reviewing the comparable GAAP measures, understanding the differences between Adjusted gross margin, Adjusted EBITDA, and Free cash flow compared to (as applicable) gross margin, net income (loss), and net cash provided by operating activities, and incorporating this knowledge into its decision - making processes. We believe that investors benefit from having access to the same financial measures that our management considers in evaluating our operating results. 
 The following tables present (i) a reconciliation of the GAAP financial measure of gross margin to the non - GAAP financial measure of Adjusted gross margin, (ii) a reconciliation of the GAAP financial measures of net income (loss) and net cash provided by operating activities to the non - GAAP financial measure of Adjusted EBITDA, and (iii) a reconciliation of the GAAP financial measure of net cash provided by operating activities to the non - GAAP financial measure of Free cash flow: 
 
 Three Months Ended Nine Months Ended 
 
 thousands September 30, 2024 June 30, 2024 September 30, 2024 September 30, 2023 
 Reconciliation of Gross margin to Adjusted gross margin 
 Total revenues and other $ 883,362 $ 905,629 $ 2,676,720 $ 2,248,268 
 Less: 
 Cost of product 32,847 54,010 132,936 123,795 
 Depreciation and amortization 166,015 163,432 487,438 435,481 
 Gross margin 684,500 688,187 2,056,346 1,688,992 
 Add: 
 Distributions from equity investments 29,344 32,970 110,651 147,612 
 Depreciation and amortization 166,015 163,432 487,438 435,481 
 Less: 
 Reimbursed electricity-related charges recorded as revenues 32,379 28,998 86,072 76,836 
 Adjusted gross margin attributable to noncontrolling interests (1) 
 19,986 19,741 59,967 50,783 
 Adjusted gross margin $ 827,494 $ 835,850 $ 2,508,396 $ 2,144,466 

 _________________________________________________________________________________________ 
 (1) Includes (i) the 25% third - party interest in Chipeta and (ii) the 2.0% limited partner interest in WES Operating owned by an Occidental subsidiary, which collectively represent WES’s noncontrolling interests. 
 
 48 

 Table of Contents 

 To facilitate investor and industry analysis, we also disclose per-Mcf Adjusted gross margin for natural-gas assets, per-Bbl Adjusted gross margin for crude-oil and NGLs assets, and per-Bbl Adjusted gross margin for produced-water assets . 
 
 Three Months Ended Nine Months Ended 
 
 thousands except per-unit amounts September 30, 2024 June 30, 2024 September 30, 2024 September 30, 2023 
 Gross margin 
 Gross margin for natural - gas assets (1) 
 $ 511,244 $ 516,253 $ 1,539,081 $ 1,253,437 
 Gross margin for crude - oil and NGLs assets (1) 
 97,263 96,786 287,627 265,216 
 Gross margin for produced - water assets (1) 
 83,178 82,346 250,565 189,032 
 Per - Mcf Gross margin for natural - gas assets (2) 
 1.07 1.10 1.09 1.03 
 Per - Bbl Gross margin for crude - oil and NGLs assets (2) 
 2.05 2.02 1.95 1.50 
 Per - Bbl Gross margin for produced - water assets (2) 
 0.81 0.82 0.81 0.68 
 Adjusted gross margin 
 Adjusted gross margin for natural - gas assets 
 $ 596,459 $ 601,443 $ 1,795,065 $ 1,488,250 
 Adjusted gross margin for crude - oil and NGLs assets 
 134,253 138,894 423,416 432,043 
 Adjusted gross margin for produced - water assets 
 96,782 95,513 289,915 224,173 
 Per - Mcf Adjusted gross margin for natural - gas assets (3) 
 1.29 1.33 1.31 1.27 
 Per - Bbl Adjusted gross margin for crude - oil and NGLs assets (3) 
 2.88 2.96 2.92 2.49 
 Per - Bbl Adjusted gross margin for produced - water assets (3) 
 0.96 0.97 0.96 0.83 

 _________________________________________________________________________________________ 
 (1) Excludes corporate-level depreciation and amortization. 
 (2) Average for period. Calculated as Gross margin for natural - gas assets, crude - oil and NGLs assets, or produced - water assets, divided by the respective total throughput (MMcf or MBbls) for natural - gas assets, crude - oil and NGLs assets, or produced - water assets. 
 (3) Average for period. Calculated as Adjusted gross margin for natural - gas assets, crude - oil and NGLs assets, or produced - water assets, divided by the respective total throughput (MMcf or MBbls) attributable to WES for natural - gas assets, crude - oil and NGLs assets, or produced - water assets. 
 
 49 

 Table of Contents 

 Three Months Ended Nine Months Ended 
 
 thousands September 30, 2024 June 30, 2024 September 30, 2024 September 30, 2023 
 Reconciliation of Net income (loss) to Adjusted EBITDA 
 Net income (loss) $ 295,892 $ 387,564 $ 1,269,672 $ 752,255 
 Add: 
 Distributions from equity investments 29,344 32,970 110,651 147,612 
 Non - cash equity - based compensation expense 
 8,759 10,391 28,573 22,035 
 Interest expense 94,149 90,522 279,177 250,606 
 Income tax expense 15,390 755 17,667 2,980 
 Depreciation and amortization 166,015 163,432 487,438 435,481 
 Impairments 4,651 1,530 6,204 52,880 
 Other expense 90 37 239 1,668 
 Less: 
 Gain (loss) on divestiture and other, net 467 59,342 299,426 (3,668) 
 Gain (loss) on early extinguishment of debt — 4,879 5,403 15,378 
 Equity income, net – related parties 23,977 27,431 84,227 116,839 
 
 Other income 9,565 4,213 16,124 4,114 
 
 Adjusted EBITDA attributable to noncontrolling interests (1) 
 13,411 13,276 41,102 34,886 
 Adjusted EBITDA $ 566,870 $ 578,060 $ 1,753,339 $ 1,497,968 
 Reconciliation of Net cash provided by operating activities to Adjusted EBITDA 
 Net cash provided by operating activities $ 551,288 $ 631,418 $ 1,582,414 $ 1,188,034 
 Interest (income) expense, net 94,149 90,522 279,177 250,606 
 Accretion and amortization of long - term obligations, net 
 (2,221) (2,473) (6,884) (5,977) 
 Current income tax expense (benefit) 1,471 726 3,489 2,026 
 Other (income) expense, net (9,565) (4,213) (16,124) (2,817) 
 
 Distributions from equity investments in excess of cumulative earnings – related parties 3,257 5,270 27,560 31,715 
 Changes in assets and liabilities: 
 Accounts receivable, net (12,683) (28,436) 12,595 60,573 
 Accounts and imbalance payables and accrued liabilities, net (8,161) (13,338) 78,884 87,040 
 Other items, net (37,254) (88,140) (166,670) (78,346) 
 Adjusted EBITDA attributable to noncontrolling interests (1) 
 (13,411) (13,276) (41,102) (34,886) 
 Adjusted EBITDA $ 566,870 $ 578,060 $ 1,753,339 $ 1,497,968 
 Cash flow information 
 Net cash provided by operating activities $ 551,288 $ 631,418 $ 1,582,414 $ 1,188,034 
 Net cash provided by (used in) investing activities (190,701) (14,995) 191,153 (538,584) 
 Net cash provided by (used in) financing activities 420,031 (567,550) (921,617) (446,612) 

 _________________________________________________________________________________________ 
 (1) Includes (i) the 25% third - party interest in Chipeta and (ii) the 2.0% limited partner interest in WES Operating owned by an Occidental subsidiary, which collectively represent WES’s noncontrolling interests. 
 
 50 

 Table of Contents 

 Three Months Ended Nine Months Ended 
 
 thousands September 30, 2024 June 30, 2024 September 30, 2024 September 30, 2023 
 Reconciliation of Net cash provided by operating activities to Free cash flow 
 Net cash provided by operating activities $ 551,288 $ 631,418 $ 1,582,414 $ 1,188,034 
 Less: 
 Capital expenditures 189,434 211,864 595,087 536,427 
 Contributions to equity investments – related parties — — — 1,153 
 Add: 
 Distributions from equity investments in excess of cumulative earnings – related parties 3,257 5,270 27,560 31,715 
 Free cash flow $ 365,111 $ 424,824 $ 1,014,887 $ 682,169 
 Cash flow information 
 Net cash provided by operating activities $ 551,288 $ 631,418 $ 1,582,414 $ 1,188,034 
 Net cash provided by (used in) investing activities (190,701) (14,995) 191,153 (538,584) 
 Net cash provided by (used in) financing activities 420,031 (567,550) (921,617) (446,612) 
 
 Gross margin. Refer to Operating Results within this Item 2 for a discussion of the components of Gross margin as compared to the prior periods, including Service Revenue s, Product Sales , Cost of Product (Residue purchases, NGLs purchases, and Other items), and Other Operating Expenses (Depreciation and amortization expense). 
 Gross margin decreased by $3.7 million for the three months ended September 30, 2024, primarily due to (i) a $22.3 million decrease in total revenues and other and (ii) a $2.6 million increase in depreciation and amortization. These amounts were offset partially by a $21.2 million decrease in cost of product. 
 Gross margin increased by $367.4 million for the nine months ended September 30, 2024, primarily due to a $428.5 million increase in total revenues and other. This increase was offset partially by (i) a $52.0 million increase in depreciation and amortization and (ii) a $9.1 million increase in cost of product. 
 
 Net income (loss). Refer to Operating Results within this Item 2 for a discussion of the primary components of Net income (loss) as compared to the prior periods. 
 Net income (loss) decreased by $91.7 million for the three months ended September 30, 2024, primarily due to (i) a $58.9 million decrease in gain (loss) on divestiture and other, net, (ii) a $22.3 million decrease in total revenues and other, and (iii) a $14.6 million increase in income tax expense. These amounts were offset partially by a $10.7 million decrease in total operating expenses. 
 Net income (loss) increased by $517.4 million for the nine months ended September 30, 2024, primarily due to (i) a $428.5 million increase in total revenues and other and (ii) a $303.1 million increase in gain (loss) on divestiture and other, net. These amounts were offset partially by (i) a $141.6 million increase in total operating expenses, (ii) a $32.6 million decrease in equity income, net – related parties, and (iii) a $28.6 million increase in interest expense. 
 
 Net cash provided by operating activities. Refer to Historical cash flow within this Item 2 for a discussion of the primary components of Net cash provided by operating activities as compared to the prior periods. 
 
 51 

 Table of Contents 

 KEY PERFORMANCE METRICS 
 
 Three Months Ended Nine Months Ended 
 
 thousands except percentages and per-unit amounts September 30, 2024 June 30, 2024 Inc/
(Dec) September 30, 2024 September 30, 2023 Inc/
(Dec) 
 
 Adjusted gross margin $ 827,494 $ 835,850 (1) % $ 2,508,396 $ 2,144,466 17 % 
 Per - Mcf Adjusted gross margin for natural - gas assets (1) 
 1.29 1.33 (3) % 1.31 1.27 3 % 
 Per - Bbl Adjusted gross margin for crude - oil and NGLs assets (1) 
 2.88 2.96 (3) % 2.92 2.49 17 % 
 Per - Bbl Adjusted gross margin for produced - water assets (1) 
 0.96 0.97 (1) % 0.96 0.83 16 % 
 Adjusted EBITDA 566,870 578,060 (2) % 1,753,339 1,497,968 17 % 
 Free cash flow 365,111 424,824 (14) % 1,014,887 682,169 49 % 

 _________________________________________________________________________________________ 
 (1) Average for period. Calculated as Adjusted gross margin for natural - gas assets, crude - oil and NGLs assets, or produced - water assets, divided by the respective total throughput (MMcf or MBbls) attributable to WES for natural - gas assets, crude - oil and NGLs assets, or produced - water assets. 
 
 Adjusted gross margin. Adjusted gross margin decreased by $8.4 million for the three months ended September 30, 2024, primarily due to (i) lower average prices and decreased product recoveries, partially offset by increased throughput at the West Texas complex, and (ii) a decrease in distributions from FRP. These decreases were offset partially by increased throughput at the DBM oil system. 
 Adjusted gross margin increased by $363.9 million for the nine months ended September 30, 2024, primarily due to (i) increased throughput at the Powder River Basin complex attributable to the acquisition of Meritage, (ii) increased throughput and a higher average fee resulting from a cost-of-service rate redetermination effective January 1, 2024, at the West Texas complex, DBM water systems, and DBM oil system, and (iii) increased throughput at the DJ Basin complex. These increases were offset partially by (i) decreased distributions from TEP, (ii) the sale of our interests in the Mont Belvieu JV, Marcellus Interest systems, and Saddlehorn during 2024, and (iii) decreased processing fees at the Brasada complex resulting from a change in contract terms effective July 1, 2023, partially offset by increased throughput. 
 Per - Mcf Adjusted gross margin for natural - gas assets decreased by $0.04 for the three months ended September 30, 2024, primarily due to (i) decreased product recoveries and average prices, partially offset by increased throughput at the West Texas complex, which has a higher-than-average per-Mcf margin as compared to our other natural-gas assets, and (ii) increased throughput at the Powder River Basin complex, which has a lower-than-average per-Mcf margin as compared to our other natural-gas assets. 
 Per - Mcf Adjusted gross margin for natural - gas assets increased by $0.04 for the nine months ended September 30, 2024, primarily due to (i) increased throughput at the West Texas complex, which has a higher-than-average per-Mcf margin as compared to our other natural-gas assets, in addition to a higher average fee resulting from a cost-of-service rate redetermination effective January 1, 2024, and increased deficiency fees on certain contracts with increasing throughput minimums, and (ii) increased throughput at the DJ Basin complex, which has a higher-than-average per-Mcf margin as compared to our other natural-gas assets. 
 Per - Bbl Adjusted gross margin for crude - oil and NGLs assets decreased by $0.08 for the three months ended September 30, 2024, primarily due to decreased distributions at FRP and TEP, partially offset by increased throughput at the DBM oil system, which has a higher-than-average per-Mcf margin as compared to our other crude-oil and NGLs assets. 
 Per - Bbl Adjusted gross margin for crude - oil and NGLs assets increased by $0.43 for the nine months ended September 30, 2024, primarily due to (i) the sale of our interests in the Mont Belvieu JV, Saddlehorn, and Whitethorn LLC in the first quarter of 2024, all of which had lower-than-average per-Bbl margins as compared to our other crude-oil and NGLs assets, and (ii) increased throughput at the DBM oil system, which has a higher-than-average per-Mcf margin as compared to our other crude-oil and NGLs assets, in addition to a higher average fee resulting from a cost-of-service rate redetermination effective January 1, 2024. These increases were offset partially by (i) decreased distributions at TEP and (ii) decreased revenues associated with demand volumes at the DJ Basin oil system. 
 Per - Bbl Adjusted gross margin for produced - water assets increased by $0.13 for the nine months ended September 30, 2024, primarily due to higher throughput and a higher average fee resulting from a cost-of-service rate redetermination effective January 1, 2024. 
 52 

 Table of Contents 

 Adjusted EBITDA. Adjusted EBITDA decreased by $11.2 million for the three months ended September 30, 2024, primarily due to (i) a $22.3 million decrease in total revenues and other, (ii) a $7.7 million increase in operation and maintenance expenses, (iii) a $3.6 million decrease in distributions from equity investments, and (iv) a $3.4 million increase in general and administrative expenses excluding non - cash equity - based compensation expense. These amounts were offset partially by (i) a $21.2 million decrease in cost of product (net of lower of cost or market inventory adjustments) and (ii) a $4.8 million decrease in property and other taxes. 
 Adjusted EBITDA increased by $255.4 million for the nine months ended September 30, 2024, primarily due to a $428.5 million increase in total revenues and other. This was offset partially by (i) an $87.2 million increase in operation and maintenance expenses, (ii) a $37.0 million decrease in distributions from equity investments, (iii) a $29.4 million increase in general and administrative expenses excluding non - cash equity - based compensation expense, (iv) a $9.3 million increase in cost of product (net of lower of cost or market inventory adjustments), and (v) a $4.0 million increase in property and other taxes. 
 
 Free cash flow. Free cash flow decreased by $59.7 million for the three months ended September 30, 2024, primarily due to (i) an $80.1 million decrease in net cash provided by operating activities and (ii) a $2.0 million decrease in distributions from equity investments in excess of cumulative earnings. These decreases were offset partially by a $22.4 million decrease in capital expenditures. 
 Free cash flow increased by $332.7 million for the nine months ended September 30, 2024, primarily due to a $394.4 million increase in net cash provided by operating activities, partially offset by (i) a $58.7 million increase in capital expenditures and (ii) a $4.2 million decrease in distributions from equity investments in excess of cumulative earnings. 
 See Capital Expenditures and Historical Cash Flow within this Item 2 for further information. 
 
 53 

 Table of Contents 

 LIQUIDITY AND CAPITAL RESOURCES 
 
 Our primary cash uses include equity and debt service, operating expenses, and capital expenditures. Our sources of liquidity, as of September 30, 2024, included cash and cash equivalents, cash flows generated from operations, effective borrowing capacity under the RCF, our commercial paper program, and potential issuances of additional equity or debt securities. We believe that cash flows generated from these sources will be sufficient to satisfy our short - term working-capital requirements and long - term capital - expenditure and debt-service requirements. 
 The amount of future distributions to unitholders will be determined by the Board on a quarterly basis. Under our partnership agreement, we distribute all of our available cash (beyond proper reserves as defined in our partnership agreement) within 55 days following each quarter’s end. Our cash flow and resulting ability to make cash distributions are dependent on our ability to generate cash flow from operations. Generally, our available cash is our cash on hand at the end of a quarter after the payment of our expenses and the establishment of cash reserves, and cash on hand resulting from working capital borrowings made after the end of the quarter. The general partner establishes cash reserves to provide for the proper conduct of our 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. The Board declared a cash distribution to unitholders for the third quarter of 2024 of $0.875 per unit, or $340.9 million in the aggregate. The cash distribution is payable on November 14, 2024, to our unitholders of record at the close of business on November 1, 2024. 
 To facilitate the distribution of available cash, during 2022 we 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. This Enhanced Distribution is subject to Board discretion, the establishment of cash reserves for the proper conduct of our business, and is also contingent on the attainment of prior year-end net leverage thresholds (the ratio of our total principal debt outstanding less total cash on hand as of the end of such period, as compared to our trailing-twelve-months Adjusted EBITDA) after taking the Enhanced Distribution for such prior year into effect. Free cash flow and Adjusted EBITDA are defined under the caption Reconciliation of Non-GAAP Financial Measures within this Item 2. 
 In 2022, we announced a common-unit buyback program of up to $1.25 billion through December 31, 2024. The common units may be purchased from time to time in the open market at prevailing market prices or in privately negotiated transactions. The timing and amount of purchases under the program will be determined based on ongoing assessments of capital needs, our financial performance, the market price of our common units, and other factors, including organic growth and acquisition opportunities and general market conditions. The program does not obligate us to purchase any specific dollar amount or number of units and may be suspended or discontinued at any time. During the nine months ended September 30, 2024, there were no common units repurchased. As of September 30, 2024, we had an authorized amount of $627.8 million remaining under the program. 
 Management continuously monitors our leverage position and other financial projections to manage the capital structure according to long-term objectives. We may, from time to time, seek to retire, rearrange, or amend some or all of our outstanding debt or financing agreements through cash purchases, exchanges, open - market repurchases, privately negotiated transactions, tender offers, or otherwise. Such transactions, if any, will depend on prevailing market conditions, our liquidity position and requirements, contractual restrictions, and other factors, and the amounts involved may be material. Our ability to generate cash flows is subject to a number of factors, some of which are beyond our control. Read Risk Factors under Part II, Item 1A of this Form 10-Q. 
 
 54 

 Table of Contents 

 Working capital . Working capital is an indication of liquidity and potential needs for short - term funding. Working capital requirements are driven by changes in accounts receivable and accounts payable and other factors such as credit extended to, and the timing of collections from, our customers, and the level and timing of our spending for acquisitions, maintenance, and other capital activities. As of September 30, 2024, we had a $186.5 million working capital surplus, which we define as the amount by which current assets exceed current liabilities. As of September 30, 2024, there was $2.0 billion in effective borrowing capacity under the RCF. Any outstanding commercial paper borrowings reduce the effective borrowing capacity under the RCF as WES Operating maintains availability under the RCF as support for its commercial paper program. See Note 9—Selected Components of Working Capital and Note 10—Debt and Interest Expense in the Notes to Consolidated Financial Statements under Part I, Item 1 of this Form 10-Q. 
 
 Capital expenditures . Our business is capital intensive, requiring significant investment to maintain and improve existing facilities or to develop new midstream infrastructure. Capital expenditures include maintenance capital expenditures, which include those expenditures required to maintain existing operating capacity and service capability of our assets, and expansion capital expenditures, which include expenditures to construct new midstream infrastructure and expenditures incurred to reduce costs, increase revenues, or increase system throughput or capacity from current levels. 
 Capital expenditures in the consolidated statements of cash flows reflect capital expenditures on a cash basis, when payments are made. Capital incurred is presented on an accrual basis. Acquisitions and capital expenditures as presented in the consolidated statements of cash flows and capital incurred were as follows: 
 
 Nine Months Ended 
September 30, 
 
 thousands 2024 2023 
 Acquisitions $ 443 $ — 
 Capital expenditures (1) 
 595,087 536,427 
 Capital incurred (1) 
 623,985 566,224 

 _________________________________________________________________________________________ 
 (1) For the nine months ended September 30, 2024 and 2023, included $11.1 million and $8.6 million, respectively, of capitalized interest. 
 
 Capital expenditures increased by $58.7 million for the nine months ended September 30, 2024, primarily due to increases of (i) $71.0 million at the West Texas complex, primarily attributable to engineering, equipment, and construction milestone payments for the North Loving Plant, (ii) $25.3 million at the Powder River Basin complex primarily attributable to the acquisition of Meritage, (iii) $8.9 million in corporate-level capital expenditures primarily related to information technology initiatives, (iv) $8.2 million at the DJ Basin complex due to the purchase of a field office in the first quarter of 2024 and an increase in well connection and pipeline projects, and (v) $7.5 million at the Chipeta complex primarily related to expansion projects. These increases were offset partially by decreases of (i) $41.8 million at the DBM oil system related to a decrease in pipeline, oil treating, and oil pumping projects and (ii) $18.5 million at the DBM water systems due to reduced construction of certain water - disposal wells, facilities, and well-connect projects. 
 55 

 Table of Contents 

 Historical cash flow . The following table and discussion present a summary of our net cash flows provided by (used in) operating, investing, and financing activities: 
 
 Nine Months Ended 
September 30, 
 
 thousands 2024 2023 
 Net cash provided by (used in): 
 Operating activities $ 1,582,414 $ 1,188,034 
 Investing activities 191,153 (538,584) 
 Financing activities (921,617) (446,612) 
 Net increase (decrease) in cash and cash equivalents $ 851,950 $ 202,838 

 Operating activities . Net cash provided by operating activities increased for the nine months ended September 30, 2024, primarily due to higher cash operating income, partially offset by lower distributions from equity investments and higher interest expense. Refer to Operating Results within this Item 2 for a discussion of our results of operations as compared to the prior periods. 
 
 Investing activities . Net cash provided by investing activities for the nine months ended September 30, 2024, primarily included the following: 
 • $582.7 million of proceeds related to the sale of several equity investments to third parties; 
 
 • $206.2 million of proceeds related to the sale of our 33.75% interest in the Marcellus Interest systems to a third party; 
 
 • $27.6 million of distributions received from equity investments in excess of cumulative earnings; 
 
 • $595.1 million of capital expenditures, primarily related to expansion, construction, and asset - integrity projects at the West Texas complex, DBM oil system, Powder River Basin complex, DBM water systems, DJ Basin complex, and Chipeta complex; and 
 
 • $33.1 million of increases to materials and supplies inventory. 
 
 Net cash used in investing activities for the nine months ended September 30, 2023, primarily included the following: 
 • $536.4 million of capital expenditures, primarily related to construction, expansion, and asset - integrity projects at the West Texas complex, DBM water systems, DBM oil system, and DJ Basin complex; 
 
 • $32.7 million of increases to materials and supplies inventory; and 
 
 • $31.7 million of distributions received from equity investments in excess of cumulative earnings. 
 
 Financing activities . Net cash used in financing activities for the nine months ended September 30, 2024, primarily included the following: 
 • $925.9 million of distributions paid to WES unitholders and noncontrolling interest owners; 
 
 • $610.3 million of net repayments under the commercial paper program; 
 
 • $143.9 million to purchase and retire portions of certain of WES Operating’s senior notes via open-market repurchases; and 
 
 • $790.4 million of net proceeds from the 5.450% Senior Notes due 2034 issued in August 2024, which will be used to repay a portion of the maturing 3.100% Senior Notes due 2025 and 3.950% Senior Notes due 2025 and for general partnership purposes, including the funding of capital expenditures. 
 
 56 

 Table of Contents 

 Net cash used in financing activities for the nine months ended September 30, 2023, primarily included the following: 
 • $845.0 million of repayments of outstanding borrowings under the RCF; 
 
 • $778.3 million of distributions paid to WES unitholders and noncontrolling interest owners; 
 
 • $259.8 million to purchase and retire portions of certain of WES Operating’s senior notes via open-market repurchases; 
 
 • $213.1 million to redeem the total principal amount outstanding on the Floating-Rate Senior Notes due 2023 at par value; 
 
 • $134.6 million of unit repurchases; 
 
 • $740.6 million of net proceeds from the 6.150% Senior Notes due 2033 issued in April 2023, which were used to repay borrowings under the RCF and for general partnership purposes; 
 
 • $595.1 million of net proceeds from the 6.350% Senior Notes due 2029 issued in September 2023, which were used to fund a portion of the aggregate purchase price for the Meritage acquisition, to pay related costs and expenses, and for general partnership purposes; and 
 
 • $470.0 million of borrowings under the RCF, which were used for general partnership purposes. 
 
 Debt and credit facilities. As of September 30, 2024, the carrying value of outstanding debt was $7.9 billion, and we have $2.0 billion in effective borrowing capacity under WES Operating’s $2.0 billion RCF. Any outstanding commercial paper borrowings reduce the effective borrowing capacity under the RCF as WES Operating maintains availability under the RCF as support for its commercial paper program. 
 During the nine months ended September 30, 2024, WES Operating (i) completed the public offering of $800.0 million in aggregate principal amount of 5.450% Senior Notes due 2034, (ii) purchased and retired $150.0 million of certain of its senior notes via open-market repurchases with cash from operations, and (iii) entered into an amendment to the RCF to exercise an option to extend the maturity date of the RCF from April 2028 to April 2029, for each extending lender. As of September 30, 2024, the 3.100% Senior Notes due 2025 and 3.950% Senior Notes due 2025 were classified as short-term debt on the consolidated balance sheet. 
 For additional information on our senior notes, RCF, and commercial paper program, see Note 10—Debt and Interest Expense in the Notes to Consolidated Financial Statements under Part I, Item 1 of this Form 10-Q. 
 
 Credit risk . We bear credit risk through exposure to non - payment or non - performance by our counterparties, including Occidental, financial institutions, customers, and other parties. Generally, non - payment or non - performance results from a customer’s inability to satisfy payables to us for services rendered, minimum - volume - commitment deficiency payments owed, or volumes owed pursuant to gas- or NGLs-imbalance agreements. We examine and monitor the creditworthiness of customers and may establish credit limits for customers. We are subject to the risk of non - payment or late payment by producers for gathering, processing, transportation, and disposal fees. Additionally, we continue to evaluate counterparty credit risk and, in certain circumstances, are exercising our contractual rights to request adequate assurance of performance. 
 We expect our exposure to the concentrated risk of non - payment or non - performance to continue for as long as our commercial relationships with Occidental generate a significant portion of our revenues. While Occidental is our contracting counterparty, gathering and processing arrangements with affiliates of Occidental on most of our systems include not just Occidental - produced volumes, but also, in some instances, the volumes of other working - interest owners of Occidental who rely on our facilities and infrastructure to bring their volumes to market. See Note 6—Related-Party Transactions in the Notes to Consolidated Financial Statements under Part I, Item 1 of this Form 10-Q. 
 Our ability to make cash distributions to our unitholders may be adversely impacted if Occidental becomes unable to perform under the terms of gathering, processing, transportation, and disposal agreements. 
 57 

 Table of Contents 

 ITEMS AFFECTING THE COMPARABILITY OF FINANCIAL RESULTS WITH WES OPERATING 
 
 Our consolidated financial statements include the consolidated financial results of WES Operating. Our results of operations do not differ materially from the results of operations and cash flows of WES Operating, which are reconciled below. 
 
 Reconciliation of net income (loss). The differences between net income (loss) attributable to WES and WES Operating are reconciled as follows: 
 
 Three Months Ended Nine Months Ended 
 
 thousands September 30, 2024 June 30, 2024 September 30, 2024 September 30, 2023 
 Net income (loss) attributable to WES $ 288,480 $ 378,648 $ 1,239,958 $ 733,862 
 Limited partner interest in WES Operating not held by WES (1) 
 5,903 7,747 25,350 15,016 
 General and administrative expenses (2) 
 709 932 2,001 1,927 
 Other income (expense), net (67) (68) (194) (214) 
 
 Net income (loss) attributable to WES Operating $ 295,025 $ 387,259 $ 1,267,115 $ 750,591 

 _________________________________________________________________________________________ 
 (1) Represents the portion of net income (loss) allocated to the limited partner interest in WES Operating not held by WES. A subsidiary of Occidental held a 2.0% limited partner interest in WES Operating for all periods presented. 
 (2) Represents general and administrative expenses incurred by WES separate from, and in addition to, those incurred by WES Operating. 
 
 Reconciliation of net cash provided by (used in) operating and financing activities. The differences between net cash provided by (used in) operating and financing activities for WES and WES Operating are reconciled as follows: 
 
 Nine Months Ended 
September 30, 
 thousands 2024 2023 
 WES net cash provided by operating activities $ 1,582,414 $ 1,188,034 
 General and administrative expenses (1) 
 2,001 1,927 
 Non - cash equity - based compensation expense 
 (435) (434) 
 Changes in working capital (26,530) (15,223) 
 Other income (expense), net (194) (214) 
 
 WES Operating net cash provided by operating activities $ 1,557,256 $ 1,174,090 
 
 WES net cash provided by (used in) financing activities $ (921,617) $ (446,612) 
 Distributions to WES unitholders (2) 
 905,155 754,998 
 Distributions to WES from WES Operating (3) 
 (906,294) (894,510) 
 Increase (decrease) in outstanding checks 37 (3) 
 Unit repurchases — 134,602 
 Other 23,974 14,371 
 WES Operating net cash provided by (used in) financing activities $ (898,745) $ (437,154) 

 _________________________________________________________________________________________ 
 (1) Represents general and administrative expenses incurred by WES separate from, and in addition to, those incurred by WES Operating. 
 (2) Represents distributions to WES common unitholders paid under WES’s partnership agreement. See Note 4—Partnership Distributions and Note 5—Equity and Partners’ Capital in the Notes to Consolidated Financial Statements under Part I, Item 1 of this Form 10-Q. 
 (3) Difference attributable to elimination in consolidation of WES Operating’s distributions on partnership interests owned by WES. See Note 4—Partnership Distributions and Note 5—Equity and Partners’ Capital in the Notes to Consolidated Financial Statements under Part I, Item 1 of this Form 10-Q. 
 
 58 

 Table of Contents 

 Noncontrolling interest. WES Operating’s noncontrolling interest consists of the 25% third - party interest in Chipeta. See Note 1—Description of Business and Basis of Presentation in the Notes to Consolidated Financial Statements under Part I, Item 1 of this Form 10-Q. 
 
 WES Operating distributions. WES Operating distributes all of its available cash on a quarterly basis to WES Operating unitholders in proportion to their share of limited partner interests in WES Operating. See Note 4—Partnership Distributions in the Notes to Consolidated Financial Statements under Part I, Item 1 of this Form 10-Q. 
 
 CRITICAL ACCOUNTING ESTIMATES 
 
 The preparation of consolidated financial statements in accordance with GAAP requires management to make informed judgments and estimates that affect the amounts of assets and liabilities as of the date of the financial statements and the amounts of revenues and expenses recognized during the periods reported. There have been no significant changes to our critical accounting estimates from those disclosed in our annual report on Form 10-K for the fiscal year ended December 31, 2023. 
 
 RECENT ACCOUNTING DEVELOPMENTS 
 
 See Note 1—Description of Business and Basis of Presentation in the Notes to Consolidated Financial Statements under Part I, Item 1 of this Form 10-Q.
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.
Western Midstream Partners, LP 10-Q

Item 2. Management’s Discussion and Analysis
