What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-08-06 compared with 2025-05-07 · 116 added, 126 removed, 466 unchanged (34% of the section changed)

1 unchanged sentence

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 2024 Form 10-K as filed with the SEC on February 26, 2025.

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 March 31, 2025 (see Note 7—Equity Investments in the Notes to Consolidated Financial Statements under Part I, Item 1 of this Form 10-Q).

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 June 30, 2025 (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.

45 unchanged sentences

We own or have investments in assets located in Texas, New Mexico, and the Rocky Mountains (Colorado, Utah, and Wyoming).

As of March 31, 2025, our assets and investments consisted of the following:

As of June 30, 2025, our assets and investments consisted of the following:

Operated Operated

8 unchanged sentences

(1) Includes the DBM water systems.

Significant financial and operational events during the three months ended March 31, 2025, included the following:

• During the first quarter of 2025, WES Operating retired the total principal amount outstanding of the 3.100% Senior Notes due 2025 at par value.

• Our first-quarter 2025 per-unit distribution of $0.910 increased $0.035 from the fourth-quarter 2024 per-unit distribution of $0.875.

Significant financial and operational events during the six months ended June 30, 2025, included the following:

• WES Operating retired the total principal amount outstanding of the 3.100% Senior Notes due 2025 at par value during the first quarter of 2025 and the 3.950% Senior Notes due 2025 at par value during the second quarter of 2025.

• Our second-quarter 2025 per-unit distribution is unchanged from the first-quarter 2025 per-unit distribution of $0.910.

• Completed the start-up of the North Loving plant in late-February 2025, increasing gas processing capacity at the West Texas complex by 250 MMcf/d to a total of 2,190 MMcf/d.

The following table provides additional information on throughput for the periods presented below:

Three Months Ended

March 31, 2025 December 31, 2024 Inc/

(Dec) March 31, 2024 Inc/

Three Months Ended Six Months Ended

June 30, 2025 March 31, 2025 Inc/

(Dec) June 30, 2025 June 30, 2024 Inc/

Throughput for natural-gas assets (MMcf/d)

26 unchanged sentences

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 2024, ranged from a low of $65.75 per barrel in September 2024 to a high of $86.91 per barrel in April 2024, and prices during the three months ended March 31, 2025, ranged from a low of $66.03 per barrel in March 2025 to a high of $80.04 per barrel in January 2025.

The Waha Hub natural-gas prices during 2024, ranged from a low of ($6.23) per MMBtu in August 2024 to a high of $8.27 per MMBtu in January 2024, and prices during the three months ended March 31, 2025, ranged from a low of ($1.12) per MMBtu in March 2025 to a high of $7.50 per MMBtu in January 2025.

The New York Mercantile Exchange West Texas Intermediate crude - oil daily settlement prices during 2024, ranged from a low of $65.75 per barrel in September 2024 to a high of $86.91 per barrel in April 2024, and prices during the six months ended June 30, 2025, ranged from a low of $57.13 per barrel in May 2025 to a high of $80.04 per barrel in January 2025.

The Waha Hub natural-gas prices during 2024, ranged from a low of ($6.23) per MMBtu in August 2024 to a high of $8.27 per MMBtu in January 2024, and prices during the six months ended June 30, 2025, ranged from a low of ($1.86) per MMBtu in May 2025 to a high of $7.50 per MMBtu in January 2025.

The extent and duration of commodity - price volatility, and the associated direct and indirect impact on our business, cannot be predicted.

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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.

Impact of inflation and tariffs.

High inflation in the U.S.

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The following tables and discussion present a summary of our results of operations:

Three Months Ended

thousands March 31, 2025 December 31, 2024 March 31, 2024

Three Months Ended Six Months Ended

thousands June 30, 2025 March 31, 2025 June 30, 2025 June 30, 2024

Total revenues and other (1)

19 unchanged sentences

(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 refer to the comparison of the three months ended March 31, 2025, to the three months ended December 31, 2024, or to the three months ended March 31, 2024, as applicable.

Three Months Ended

March 31, 2025 December 31, 2024 Inc/

(Dec) March 31, 2024 Inc/

For purposes of the following discussion, any increases or decreases “for the three months ended June 30, 2025” refer to the comparison of the three months ended June 30, 2025, to the three months ended March 31, 2025;

and any increases or decreases “for the six months ended June 30, 2025” refer to the comparison of the six months ended June 30, 2025, to the six months ended June 30, 2024.

Three Months Ended Six Months Ended

June 30, 2025 March 31, 2025 Inc/

(Dec) June 30, 2025 June 30, 2024 Inc/

Throughput for natural-gas assets (MMcf/d)

27 unchanged sentences

Natural-gas assets

Total throughput attributable to WES for natural - gas assets decreased by 103 MMcf/d compared to the three months ended December 31, 2024, primarily due to lower volumes at the DJ Basin and Powder River Basin complexes due to decreased production in the areas.

These decreases were offset partially by higher volumes at the Brasada complex due to increased plant capacity beginning in January 2025.

Total throughput attributable to WES for natural - gas assets increased by 120 MMcf/d compared to the three months ended March 31, 2024, primarily due to (i) higher volumes at the West Texas, DJ Basin, and Powder River Basin complexes due to increased production in the areas, and (ii) higher volumes on the Red Bluff Express pipeline due to the addition of a new receipt point into the pipeline beginning in November 2024.

These increases were offset partially due to (i) lower volumes at the Marcellus Interest systems due to the sale of the asset during the second quarter of 2024, (ii) lower volumes at the Springfield gas-gathering system and Granger complex due to decreased production in the areas, and (iii) lower volumes at the MIGC system due to certain temporary customer constraints.

Total throughput attributable to WES for natural - gas assets increased by 141 MMcf/d for the three months ended June 30, 2025, primarily due to (i) higher volumes at the West Texas, DJ Basin, and Powder River Basin complexes due to increased production in the areas, and (ii) higher volumes at the Mi Vida plant.

These increases were offset partially by lower volumes at the Brasada complex and Springfield gas-gathering system due to decreased production in the area and downtime during the second quarter of 2025.

Total throughput attributable to WES for natural - gas assets increased by 192 MMcf/d for the six months ended June 30, 2025, primarily due to (i) higher volumes at the West Texas, Powder River Basin, and Chipeta complexes due to increased production in the areas, and (ii) higher volumes on the Red Bluff Express pipeline due to the addition of a new receipt point into the pipeline beginning in November 2024.

These increases were offset partially by (i) lower volumes at the Marcellus Interest systems due to the sale of the asset during the second quarter of 2024, (ii) lower volumes at the Brasada complex and Springfield gas-gathering system due to decreased production in the area and downtime during the second quarter of 2025, (iii) lower volumes at the MIGC system due to certain temporary customer constraints, and (iv) lower volumes at the Granger complex due to decreased production in the area.

Crude-oil and NGLs assets

Total throughput attributable to WES for crude - oil and NGLs assets decreased by 31 MBbls/d compared to the three months ended December 31, 2024, primarily due to (i) lower volumes on the TEP and FRP pipelines, and (ii) lower volumes at the DJ Basin oil system due to decreased production in the area.

Total throughput attributable to WES for crude - oil and NGLs assets decreased by 62 MBbls/d compared to the three months ended March 31, 2024, primarily due to (i) the divestiture of Whitethorn LLC and Saddlehorn in the first quarter of 2024, and (ii) lower volumes on the TEP pipeline.

Total throughput attributable to WES for crude - oil and NGLs assets increased by 29 MBbls/d for the three months ended June 30, 2025, primarily due to 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 22 MBbls/d for the six months ended June 30, 2025, primarily due to the divestiture of Whitethorn LLC and Saddlehorn in the first quarter of 2024.

These decreases were offset partially by higher volumes at the DBM oil system due to increased production in the area.

Produced-water assets

Total throughput attributable to WES for produced - water assets decreased by 25 MBbls/d compared to the three months ended December 31, 2024, due to lower production and increased recycling activities in the upstream operations of our producers.

Total throughput attributable to WES for produced - water assets increased by 40 MBbls/d compared to the three months ended March 31, 2024, due to higher production, partially offset by increased recycling activities in the upstream operations of our producers.

Three Months Ended

Total throughput attributable to WES for produced - water assets increased by 51 MBbls/d and 89 MBbls/d for the three and six months ended June 30, 2025, respectively, due to higher production.

Three Months Ended Six Months Ended

thousands except percentages and per-unit amounts

March 31, 2025 December 31, 2024 Inc/

(Dec) March 31, 2024 Inc/

June 30, 2025 March 31, 2025 Inc/

(Dec) June 30, 2025 June 30, 2024 Inc/

Service revenues – fee based $ 851,419 $ 823,197 3 % $ 1,674,616 $ 1,575,047 6 %

5 unchanged sentences

Per - unit gross average sales price:

Natural gas (per Mcf) $ 2.06 $ 0.80 158 % $ 1.25 65 %

Natural gas (per Mcf) $ 1.06 $ 2.06 (49) % $ 1.56 $ 0.51 NM

NGLs (per Bbl) 24.85 30.63 (19) % 27.74 29.39 (6) %

_________________________________________________________________________________________

NM — Not meaningful

Service revenues – fee based

Service revenues – fee based decreased by $35.7 million compared to the three months ended December 31, 2024, primarily due to decreases of (i) $13.0 million at the DJ Basin complex due to decreased throughput, partially offset by increased deficiency fees, (ii) $7.4 million at the DBM water systems due to an amendment to contract terms effective January 1, 2025, and decreased throughput, (iii) $6.9 million and $5.2 million at the DJ Basin oil and Springfield systems, respectively, primarily due to annual cumulative catch-up adjustments for cost-of-service changes that increased revenue during the fourth quarter of 2024, as well as decreased throughput, and (iv) $2.5 million at the Powder River Basin complex attributable to decreased throughput.

Service revenues – fee based increased by $41.9 million compared to the three months ended March 31, 2024, primarily due to increases of (i) $31.1 million at the West Texas complex due to increased throughput, (ii) $8.6 million at the DBM oil system as a result of increased throughput and higher average fees resulting from a cost-of-service rate redetermination effective January 1, 2025, and (iii) $6.2 million and $4.4 million at the DJ Basin and Powder River Basin complexes, respectively, primarily due to increased throughput, partially offset by a decrease in deficiency fees.

These increases were offset partially by a decrease of $10.0 million at the Marcellus Interest systems due to the sale of the asset during the second quarter of 2024.

Service revenues – fee based increased by $28.2 million for the three months ended June 30, 2025, primarily due to increases of $15.1 million, $4.8 million, and $4.5 million at the West Texas complex, DBM oil system, and DBM water systems, respectively, due to increased throughput.

Service revenues – fee based increased by $99.6 million for the six months ended June 30, 2025, primarily due to increases of (i) $65.6 million at the West Texas complex due to increased throughput, partially offset by decreased deficiency fees on certain contracts with throughput minimums, and (ii) $17.9 million at the DBM oil system, $11.3 million at the Powder River Basin complex, $9.1 million at the DBM water systems, $7.7 million at the DJ Basin complex, and $5.7 million at the Chipeta complex, all primarily due to increased throughput.

These increases were offset partially by decreases of (i) $11.0 million at the Marcellus Interest systems due to the sale of the asset during the second quarter of 2024 and (ii) $7.5 million at the Springfield systems primarily due to decreased throughput.

Other revenues from customers

Other revenues from customers increased by $24.2 million compared to the three months ended December 31, 2024, primarily due to increases of (i) $18.7 million at the West Texas complex due to increased product recoveries and increased average prices, and (ii) $4.0 million at the DJ Basin complex due to changes in contract mix.

Other revenues from customers decreased by $12.3 million compared to the three months ended March 31, 2024, primarily due to decreases of (i) $8.0 million at the Chipeta complex attributable to contract changes effective during the third quarter of 2024 and decreased product recoveries, and (ii) $3.3 million at the Granger complex due to a contract change effective during the first quarter of 2024.

Other revenues from customers decreased by $3.0 million for the three months ended June 30, 2025, primarily due to decreased average prices at the DJ Basin complex.

Other revenues from customers decreased by $33.2 million for the six months ended June 30, 2025, primarily due to decreases of (i) $17.0 million at the DJ Basin complex due to decreased volumes sold and (ii) $9.3 million at the Chipeta complex due to contract changes effective during the third quarter of 2024 and decreased product recoveries.

Equity Income, Net – Related Parties

Three Months Ended

thousands except percentages March 31, 2025 December 31, 2024 Inc/

(Dec) March 31, 2024 Inc/

Three Months Ended Six Months Ended

thousands except percentages June 30, 2025 March 31, 2025 Inc/

(Dec) June 30, 2025 June 30, 2024 Inc/

Equity income, net – related parties $ 27,128 $ 20,435 33 % $ 47,563 $ 60,250 (21) %

Equity income, net – related parties decreased by $7.7 million compared to the three months ended December 31, 2024, primarily due to decreases of $4.1 million, $2.3 million, and $1.7 million at TEP, FRP, and Red Bluff Express, respectively.

Equity income, net – related parties decreased by $12.4 million compared to the three months ended March 31, 2024, primarily due to decreases of (i) $5.5 million resulting from the sale of several equity investments to third parties in the first quarter of 2024 and (ii) $3.6 million, $2.1 million, and $1.1 million at TEP, Red Bluff Express, and FRP, respectively.

Equity income, net – related parties decreased by $12.7 million for the six months ended June 30, 2025, primarily due to (i) $5.5 million resulting from the sale of several equity investments to third parties in the first quarter of 2024 and (ii) $5.2 million at TEP.

See Note 3—Acquisitions and Divestitures in the Notes to Consolidated Financial Statements under Part I, Item 1 of this Form 10-Q.

Cost of Product and Operation and Maintenance Expenses

Three Months Ended

thousands except percentages March 31, 2025 December 31, 2024 Inc/

(Dec) March 31, 2024 Inc/

Three Months Ended Six Months Ended

thousands except percentages June 30, 2025 March 31, 2025 Inc/

(Dec) June 30, 2025 June 30, 2024 Inc/

Natural-gas purchases

6 unchanged sentences

Natural-gas purchases

Natural-gas purchases increased by $9.0 million and $4.8 million compared to the three months ended December 31, 2024, and March 31, 2024, respectively, primarily due to higher average prices at the West Texas complex.

Natural-gas purchases decreased by $8.8 million for the three months ended June 30, 2025, primarily due to lower average prices at the West Texas complex.

Natural-gas purchases increased by $9.9 million for the six months ended June 30, 2025, primarily due to higher average prices at the West Texas complex.

NGLs purchases

NGLs purchases decreased by $10.0 million compared to the three months ended March 31, 2024, primarily due to decreases of (i) $5.6 million at the West Texas complex due to lower purchased volumes and average prices, and (ii) $4.5 million at the Chipeta complex due to a contract change effective during the third quarter of 2024.

Other items decreased by $9.3 million compared to the three months ended December 31, 2024, primarily due to changes in imbalance positions at the West Texas and DJ Basin complexes.

NGLs purchases increased by $2.9 million for the three months ended June 30, 2025, primarily due to an increase of $8.8 million at the West Texas complex due to higher purchased volumes and changes in line-fill inventory, partially offset by a decrease of $8.0 million at DJ Basin complex due to lower purchased volumes.

NGLs purchases decreased by $14.3 million for the six months ended June 30, 2025, primarily due to decreases of (i) $8.1 million at the DJ Basin complex due to lower purchased volumes and average prices, and (ii) $6.0 million at the Chipeta complex due to contract changes effective during the third quarter of 2024 and decreased product recoveries.

Other items increased by $7.1 million for the three months ended June 30, 2025, primarily due to changes in imbalance positions at the West Texas complex.

Other items decreased by $11.5 million for the six months ended June 30, 2025, primarily due to changes in imbalance positions at the Powder River Basin complex and lower offload costs at the West Texas complex.

Operation and maintenance expense

Operation and maintenance expense increased by $31.6 million compared to the three months ended March 31, 2024, primarily due to increases of (i) $10.4 million in equipment and material costs, (ii) $7.2 million in utility expense, (iii) $4.2 million in salaries and wages costs, (iv) $4.2 million in maintenance and repair costs, and (v) $2.4 million in information technology costs.

Operation and maintenance expense increased by $32.9 million for the six months ended June 30, 2025, primarily due to increases of (i) $9.7 million in utility expense, (ii) $9.6 million in equipment and material costs, (iii) $6.0 million in salaries and wages costs, (iv) $3.5 million in land-related costs, and (v) $3.5 million in maintenance and repair costs.

These increases were offset partially by a decrease of $5.2 million in contract labor and consulting costs.

Other Operating Expenses

Three Months Ended

thousands except percentages March 31, 2025 December 31, 2024 Inc/

(Dec) March 31, 2024 Inc/

Three Months Ended Six Months Ended

thousands except percentages June 30, 2025 March 31, 2025 Inc/

(Dec) June 30, 2025 June 30, 2024 Inc/

General and administrative $ 66,146 $ 66,786 (1) % $ 132,932 $ 130,772 2 %

2 unchanged sentences

Long - lived asset and other impairments

3 2 50 % 23 (87) %

686 3 NM 689 1,553 (56) %

Total other operating expenses $ 256,750 $ 255,075 1 % $ 511,825 $ 485,097 6 %

General and administrative expenses

General and administrative expenses decreased by $9.2 million compared to the three months ended December 31, 2024, primarily due to decreases in personnel costs and contract labor and consulting costs.

Property and other taxes

Property and other taxes increased by $3.9 million compared to the three months ended March 31, 2024, primarily due to a lower ad valorem property tax accrual recorded during 2024 related to the finalization of 2023 assessments at the DJ Basin complex and DJ Basin oil system.

Depreciation and amortization expense

Depreciation and amortization expense increased by $7.5 million compared to the three months ended December 31, 2024, primarily due to increases of (i) $3.2 million at the Powder River Basin complex primarily due to acceleration of depreciation expense during the first quarter of 2025 and updated salvage values, and (ii) $2.6 million at the West Texas complex primarily related to capital projects being placed into service.

Depreciation and amortization expense increased by $12.5 million compared to the three months ended March 31, 2024, primarily due to capital projects being placed into service at the West Texas complex and DBM water systems.

Depreciation and amortization expense increased by $21.2 million for the six months ended June 30, 2025, primarily due to capital projects being placed into service at the West Texas complex.

Interest Expense

Three Months Ended

thousands except percentages March 31, 2025 December 31, 2024 Inc/

(Dec) March 31, 2024 Inc/

Three Months Ended Six Months Ended

thousands except percentages June 30, 2025 March 31, 2025 Inc/

(Dec) June 30, 2025 June 30, 2024 Inc/

Long - term and short - term debt

4 unchanged sentences

Interest expense $ (95,170) $ (97,293) (2) % $ (192,463) $ (185,028) 4 %

Interest expense increased by $2.8 million compared to the three months ended March 31, 2024, primarily due to increases of (i) $11.1 million of interest incurred on the 5.450% Senior Notes due 2034 that were issued during the third quarter of 2024 and (ii) $2.8 million due to lower capitalized interest.

These increases were offset partially by decreases of (i) $5.7 million due to no outstanding borrowings on the commercial paper program during 2025, (ii) $3.7 million due to the repayment of the 3.100% Senior Notes due 2025 during the first quarter of 2025, and (iii) $1.6 million due to lower outstanding balances on certain senior notes due to debt repurchases.

Interest expense increased by $7.4 million for the six months ended June 30, 2025, primarily due to an increase of $22.2 million of interest incurred on the 5.450% Senior Notes due 2034 that were issued during the third quarter of 2024.

This increase was offset partially by decreases of (i) $9.1 million due to the repayment of the 3.100% Senior Notes due 2025 during the first quarter of 2025 and (ii) $5.6 million due to lower outstanding borrowings on the commercial paper program during 2025.

See Liquidity and Capital Resources—Debt and credit facilities within this Item 2.

Other Income (Expense), Net

Three Months Ended

thousands except percentages March 31, 2025 December 31, 2024 Inc/

(Dec) March 31, 2024 Inc/

Other income (expense), net $ 7,477 $ 15,617 (52)% $ 2,346 NM

Other income (expense), net decreased by $8.1 million compared to the three months ended December 31, 2024, primarily due to interest income earned resulting from higher cash and cash equivalent balances during the fourth quarter of 2024.

Other income (expense), net increased by $5.1 million compared to the three months ended March 31, 2024, primarily due to interest income earned resulting from higher cash and cash equivalent balances during the first quarter of 2025.

Income Tax Expense (Benefit)

29 unchanged sentences

The following tables present reconciliations of the GAAP measure to our non-GAAP measures:

Three Months Ended

thousands March 31, 2025 December 31, 2024 March 31, 2024

Three Months Ended Six Months Ended

thousands June 30, 2025 March 31, 2025 June 30, 2025 June 30, 2024

Reconciliation of Gross margin to Adjusted Gross Margin

13 unchanged sentences

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

thousands except per-unit amounts March 31, 2025 December 31, 2024 March 31, 2024

Three Months Ended Six Months Ended

thousands except per-unit amounts June 30, 2025 March 31, 2025 June 30, 2025 June 30, 2024

Gross margin for natural - gas assets (1)

29 unchanged sentences

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.

Three Months Ended

thousands March 31, 2025 December 31, 2024 March 31, 2024

Three Months Ended Six Months Ended

thousands June 30, 2025 March 31, 2025 June 30, 2025 June 30, 2024

Reconciliation of Net income (loss) to Adjusted EBITDA

7 unchanged sentences

Long - lived asset and other impairments

686 3 689 1,553

Other expense 43 190 233 149

28 unchanged sentences

(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.

Three Months Ended

thousands March 31, 2025 December 31, 2024 March 31, 2024

Three Months Ended Six Months Ended

thousands June 30, 2025 March 31, 2025 June 30, 2025 June 30, 2024

Reconciliation of Net cash provided by operating activities to Free Cash Flow

1 unchanged sentence

Capital expenditures 178,623 142,402 321,025 405,653

Contributions to equity investments – related parties — 9,690 —

Distributions from equity investments in excess of cumulative earnings – related parties 3,040 11,007 14,047 24,303

8 unchanged sentences

Refer to Operating Results within this Item 2 for a discussion of the components of Gross margin as compared to the prior periods, including Revenue s, Cost of Product (Natural-gas purchases, NGLs purchases, and Other items), and Other Operating Expenses (Depreciation and amortization expense).

Gross margin decreased by $21.0 million compared to the three months ended December 31, 2024, due to (i) an $11.4 million decrease in total revenues and other, (ii) a $7.5 million increase in depreciation and amortization, and (iii) a $2.2 million increase in cost of product.

Gross margin increased by $21.5 million compared to the three months ended March 31, 2024, primarily due to (i) a $29.4 million increase in total revenues and other and (ii) a $4.6 million decrease in cost of product.

Gross margin increased by $22.4 million for the three months ended June 30, 2025, primarily due to a $25.2 million increase in total revenues.

Gross margin increased by $60.8 million for the six months ended June 30, 2025, primarily due to (i) a $66.1 million increase in total revenues and other and (ii) a $15.9 million decrease in cost of product.

These amounts were offset partially by a $21.2 million increase in depreciation and amortization.

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 $25.0 million compared to the three months ended December 31, 2024, primarily due to (i) an $11.4 million decrease in total revenues and other, (ii) an $8.1 million decrease in other income (expense), net, and (iii) a $7.7 million decrease in equity income, net – related parties.

Net income (loss) decreased by $269.7 million compared to the three months ended March 31, 2024, primarily due to (i) a $244.3 million decrease in gain (loss) on divestiture and other, net, (ii) a $42.3 million increase in total operating expenses, and (iii) a $12.4 million decrease in equity income, net – related parties.

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) increased by $34.2 million for the three months ended June 30, 2025, primarily due to (i) a $25.2 million increase in total revenues and other and (ii) a $6.7 million increase in equity income, net – related parties.

Net income (loss) decreased by $306.5 million for the six months ended June 30, 2025, primarily due to (i) a $304.5 million decrease in gain (loss) on divestiture and other, net, (ii) a $43.7 million increase in total operating expenses, and (iii) a $12.7 million decrease in equity income, net – related parties.

These amounts were offset partially by a $66.1 million increase in total revenues and other.

2 unchanged sentences

KEY PERFORMANCE METRICS

Three Months Ended

thousands except percentages and per-unit amounts March 31, 2025 December 31, 2024 Inc/

(Dec) March 31, 2024 Inc/

Three Months Ended Six Months Ended

thousands except percentages and per-unit amounts June 30, 2025 March 31, 2025 Inc/

(Dec) June 30, 2025 June 30, 2024 Inc/

Adjusted Gross Margin

9 unchanged sentences

388,394 399,398 (3) % 787,792 649,776 21 %

_________________________________________________________________________________________

(1) Average for period.

1 unchanged sentence

Adjusted Gross Margin.

Adjusted Gross Margin decreased by $7.6 million compared to the three months ended December 31, 2024, primarily due to (i) decreased throughput, partially offset by increased deficiency fees at the DJ Basin complex, (ii) decreased throughput and annual cumulative catch-up adjustments for cost-of-service changes that increased revenue during the fourth quarter of 2024 at the DJ Basin oil and Springfield systems, and (iii) decreased throughput and an amendment to contract terms effective January 1, 2025, at the DBM water systems.

These decreases were offset partially by increased product recoveries and increased average prices at the West Texas complex.

Adjusted Gross Margin increased by $15.7 million compared to the three months ended March 31, 2024, primarily due to (i) increased throughput at the West Texas and Powder River Basin complexes and (ii) increased throughput and higher average fees resulting from cost-of-service rate redeterminations effective January 1, 2025, at the DBM oil system.

These increases were offset partially by (i) the sale of our interests in the Marcellus Interest systems, Saddlehorn, and Mont Belvieu JV during 2024, and (ii) a contract change effective during the first quarter of 2024 at the Granger complex.

Per - Mcf Adjusted Gross Margin for natural - gas assets increased by $0.05 compared to the three months ended December 31, 2024, primarily due to increased product recoveries and increased average prices at the West Texas complex.

Per - Mcf Adjusted gross margin for natural - gas assets increased by $0.02 compared to the three months ended March 31, 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, and (ii) the sale of our interest in the Marcellus Interest systems in the second quarter of 2024, which had a lower-than-average per-Mcf margin compared to our other natural-gas assets.

Per - Bbl Adjusted Gross Margin for crude - oil and NGLs assets increased by $0.17 compared to the three months ended December 31, 2024, primarily due to (i) increased distributions at FRP and (ii) decreased throughput at TEP, which had a lower-than-average per-Bbl margin as compared to our other crude-oil and NGLs assets.

These increases were offset partially by a decrease resulting from an annual cumulative catch-up adjustment for cost-of-service changes that increased revenue during the fourth quarter of 2024 at the DJ Basin oil system.

Per - Bbl Adjusted gross margin for crude - oil and NGLs assets increased by $0.25 compared to the three months ended March 31, 2024, primarily due to (i) the sale of our interests in Saddlehorn and Mont Belvieu JV in the first quarter of 2024 and decreased throughput at TEP, all of which had lower-than-average per-Bbl margins as compared to our other crude oil and NGLs assets, and (ii) increased distributions at FRP.

Adjusted Gross Margin increased by $18.3 million for the three months ended June 30, 2025, primarily due to increased throughput at the West Texas complex, DBM water systems, and DBM oil system.

Adjusted Gross Margin increased by $58.9 million for the six months ended June 30, 2025, primarily due to (i) increased throughput at the West Texas complex, partially offset by decreased deficiency fees on certain contracts with throughput minimums, and (ii) increased throughput at the DBM oil system, Powder River Basin complex, and DBM water systems.

These increases were offset partially by (i) the sale of our interests in the Marcellus Interest systems, Saddlehorn, and Mont Belvieu JV during 2024, and (ii) decreased throughput at the Springfield gas-gathering system.

Per - Mcf Adjusted Gross Margin for natural - gas assets decreased by $0.02 for the three months ended June 30, 2025, primarily due to (i) lower volumes sold, lower average prices, and contract mix at the West Texas complex, and (ii) lower volumes sold and decreased deficiency fees at the DJ Basin complex.

Per - Bbl Adjusted Gross Margin for crude - oil and NGLs assets decreased by $0.15 for the three months ended June 30, 2025, primarily due to lower distributions and increased throughput at TEP and FRP, which have a lower-than-average per-Bbl margin as compared to our other crude-oil and NGLs assets.

These decreases were offset partially by increased throughput at the DBM oil system, which has a higher-than-average per-Bbl margin as compared to our other crude-oil and NGLs assets.

Per - Bbl Adjusted gross margin for crude - oil and NGLs assets increased by $0.15 for the six months ended June 30, 2025, primarily due to (i) lower throughput at TEP and FRP, which have a lower-than-average per-Bbl margin as compared to our other crude oil and NGLs assets and (ii) the sale of our interest in Whitethorn LLC which had a lower-than-average per-Bbl margins as compared to our other crude oil and NGLs assets.

These increases were offset partially by 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, 2025, at the DJ Basin oil system.

Per - Bbl Adjusted Gross Margin for produced - water assets decreased by $0.02 compared to the three months ended December 31, 2024, primarily due to a change in contract terms effective January 1, 2025, and decreased throughput.

Per - Bbl Adjusted Gross Margin for produced - water assets decreased by $0.02 for the six months ended June 30, 2025, primarily due to a change in contract terms effective January 1, 2025.

Adjusted EBITDA.

Adjusted EBITDA increased by $2.9 million compared to the three months ended December 31, 2024, primarily due to (i) an $8.1 million decrease in general and administrative expenses excluding non - cash equity - based compensation expense, (ii) a $4.7 million decrease in operation and maintenance expenses, and (iii) a $2.8 million increase in distributions from equity investments.

These amounts were offset partially by (i) an $11.4 million decrease in total revenues and other and (ii) a $2.0 million increase in cost of product (net of lower of cost or market inventory adjustments).

Adjusted EBITDA decreased by $14.8 million compared to the three months ended March 31, 2024, primarily due to (i) a $31.6 million increase in operation and maintenance expenses, (ii) a $14.0 million decrease in distributions from equity investments, and (iii) a $3.9 million increase in property taxes.

These amounts were offset partially by (i) a $29.4 million increase in total revenues and other and (ii) a $4.7 million decrease in cost of product (net of lower of cost or market inventory adjustments).

Adjusted EBITDA increased by $24.3 million for the three months ended June 30, 2025, primarily due to a $25.2 million increase in total revenues and other.

Adjusted EBITDA increased by $25.0 million for the six months ended June 30, 2025, primarily due to (i) a $66.1 million increase in total revenues and other and (ii) a $16.0 million decrease in cost of product (net of lower of cost or market inventory adjustments).

These amounts were offset partially by (i) a $32.9 million increase in operation and maintenance expenses and (ii) a $15.8 million decrease in distributions from equity investments.

Free Cash Flow.

Free Cash Flow increased by $90.1 million compared to the three months ended December 31, 2024, primarily due to (i) a $96.4 million decrease in capital expenditures, (ii) a $9.7 million decrease in contributions to equity investments, and (iii) a $7.7 million increase in distributions from equity investments in excess of cumulative earnings.

These amounts were offset partially by a $23.7 million decrease in net cash provided by operating activities.

Free Cash Flow increased by $174.4 million compared to the three months ended March 31, 2024, primarily due to (i) a $131.1 million increase in net cash provided by operating activities and (ii) a $51.4 million decrease in capital expenditures.

These amounts were offset partially by an $8.0 million decrease in distributions from equity investments in excess of cumulative earnings.

Free Cash Flow decreased by $11.0 million for the three months ended June 30, 2025, primarily due to (i) a $36.2 million increase in capital expenditures and (ii) an $8.0 million decrease in distributions from equity investments in excess of cumulative earnings.

These amounts were offset partially by a $33.2 million increase in net cash provided by operating activities.

Free Cash Flow increased by $138.0 million for the six months ended June 30, 2025, primarily due to (i) an $84.6 million decrease in capital expenditures and (ii) a $63.6 million increase in net cash provided by operating activities.

These amounts were offset partially by a $10.3 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.

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Our primary cash uses include equity and debt service, operating expenses, acquisitions, and capital expenditures.

Our sources of liquidity, as of March 31, 2025, 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.

Our sources of liquidity, as of June 30, 2025, 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.

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We distribute all our available cash, as defined in our partnership agreement, within 55 days following each quarter’s end.

The Board declared a cash distribution to unitholders for the first quarter of 2025 of $0.910 per unit, or $355.3 million in the aggregate.

The cash distribution is payable on May 15, 2025, to our unitholders of record at the close of business on May 2, 2025.

The Board declared a cash distribution to unitholders for the second quarter of 2025 of $0.910 per unit, or $355.3 million in the aggregate.

The cash distribution is payable on August 14, 2025, to our unitholders of record at the close of business on August 1, 2025.

In February 2025, the Board authorized a buyback program of up to $250.0 million of our common units through December 31, 2026 (the “2025 Purchase Program”).

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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 March 31, 2025, we had a $179.0 million working capital surplus, which we define as the amount by which current assets exceed current liabilities.

As of March 31, 2025, there was $2.0 billion in effective borrowing capacity under the RCF.

As of June 30, 2025, we had a $210.2 million working capital surplus, which we define as the amount by which current assets exceed current liabilities.

As of June 30, 2025, 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.

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Acquisitions and capital expenditures as presented in the consolidated statements of cash flows and capital incurred were as follows:

Three Months Ended

Six Months Ended

thousands 2025 2024

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_________________________________________________________________________________________

(1) For three months ended March 31, 2025 and 2024, included $2.6 million and $5.3 million, respectively, of capitalized interest.

Capital expenditures decreased by $51.4 million for the three months ended March 31, 2025, primarily due to decreases of (i) $56.2 million at the West Texas complex, primarily attributable to construction costs incurred in 2024 associated with the North Loving plant that was completed in the first quarter of 2025, (ii) $15.1 million at the DBM water systems due to decreased construction of certain water - disposal wells, equipment, facilities, and well-connect projects, and (iii) $6.4 million in corporate-level capital expenditures.

(1) For six months ended June 30, 2025 and 2024, included $4.3 million and $7.8 million, respectively, of capitalized interest.

Capital expenditures decreased by $84.6 million for the six months ended June 30, 2025, primarily due to decreases of (i) $137.7 million at the West Texas complex, primarily attributable to construction costs incurred in 2024 associated with the North Loving plant that was completed in the first quarter of 2025, (ii) $16.6 million at the DBM water systems due to decreased construction of certain water - disposal wells, equipment, facilities, and well-connect projects, and (iii) $9.9 million in corporate-level capital expenditures.

These decreases were offset partially by increases of (i) $37.9 million at the Powder River Basin complex primarily attributable to an increase in construction of facilities and well-connect projects and (ii) $23.7 million at the DBM oil system related to an increase in pipeline and oil pumping projects.

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The following table and discussion present a summary of our net cash flows provided by (used in) operating, investing, and financing activities:

Three Months Ended

Six Months Ended

thousands 2025 2024

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Operating activities .

Net cash provided by operating activities increased for the three months ended March 31, 2025, primarily due to the impact of changes in assets and liabilities, partially offset by lower distributions from equity-investment earnings, higher interest expense and lower cash operating income.

Net cash provided by operating activities increased for the six months ended June 30, 2025, primarily due to higher cash operating income and the impact of changes in assets and liabilities, partially offset by higher interest expense and lower distributions from equity-investment earnings.

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 used in investing activities for the three months ended March 31, 2025, primarily included (i) capital expenditures, primarily related to expansion, construction, and asset - integrity projects at the West Texas complex, Powder River Basin complex, DBM water systems, DJ Basin complex, and DBM oil system, (ii) increases to materials and supplies inventory and other, and (iii) distributions received from equity investments in excess of cumulative earnings.

Net cash provided by investing activities for the three months ended March 31, 2024, primarily included (i) proceeds related to the sale of several equity investments to third parties, (ii) distributions received from equity investments in excess of cumulative earnings, (iii) capital expenditures, primarily related 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, and (iv) increases to materials and supplies inventory and other.

Net cash used in investing activities for the six months ended June 30, 2025, primarily included (i) capital expenditures, primarily related to expansion, construction, and asset - integrity projects at the West Texas complex, Powder River Basin complex, DBM water systems, DBM oil system, DJ Basin complex, and Chipeta complex, (ii) increases to materials and supplies inventory and other, and (iii) distributions received from equity investments in excess of cumulative earnings.

Net cash provided by investing activities for the six months ended June 30, 2024, primarily included (i) proceeds related to the sale of several equity investments to third parties, (ii) proceeds related to the sale of our 33.75% interest in the Marcellus Interest systems to a third party, (iii) distributions received from equity investments in excess of cumulative earnings, (iv) capital expenditures, primarily related 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, and (v) increases to materials and supplies inventory and other.

Financing activities .

Net cash used in financing activities for the three months ended March 31, 2025, primarily included (i) retiring the total principal amount outstanding of the 3.100% Senior Notes due 2025 at par value and (ii) distributions paid to WES unitholders and noncontrolling interest owners.

Net cash used in financing activities for the three months ended March 31, 2024, primarily included (i) net repayments under the commercial paper program, (ii) distributions paid to WES unitholders and noncontrolling interest owners, and (iii) purchasing and retiring portions of certain of WES Operating’s senior notes via open-market repurchases.

Net cash used in financing activities for the six months ended June 30, 2025, primarily included (i) repayment of the total principal amount outstanding of the 3.950% Senior Notes due 2025 and 3.100% Senior Notes due 2025 at par value, (ii) distributions paid to WES unitholders and noncontrolling interest owners, and (iii) a decrease in outstanding checks.

Net cash used in financing activities for the six months ended June 30, 2024, primarily included (i) net repayments under the commercial paper program, (ii) distributions paid to WES unitholders and noncontrolling interest owners, and (iii) retiring portions of certain of WES Operating’s senior notes via open-market repurchases.

Debt and credit facilities.

As of March 31, 2025, the carrying value of outstanding debt was $7.3 billion.

In addition, we have $336.8 million in senior note borrowings due within the next year and, as of March 31, 2025, we have $2.0 billion in effective borrowing capacity under WES Operating’s $2.0 billion RCF.

As of June 30, 2025, the carrying value of outstanding debt was $6.9 billion.

In addition, we have no borrowings due within the next year and, as of June 30, 2025, 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 three months ended March 31, 2025, WES Operating (i) retired the 3.100% Senior Notes due 2025 on the maturity date of February 3, 2025, for $663.8 million.

As of March 31, 2025, the 3.950% Senior Notes due 2025 were classified as short-term debt on the consolidated balance sheet.

WES Operating intends to repay the 3.950% Senior Notes due 2025 at or prior to maturity with cash on hand, including proceeds received from the 2024 public offering of $800.0 million in aggregate principal amount of 5.450% Senior Notes due 2034.

During the six months ended June 30, 2025, WES Operating (i) retired the 3.950% Senior Notes due 2025 on the maturity date of June 1, 2025, for 336.8 million and (ii) retired the 3.100% Senior Notes due 2025 on the maturity date of February 3, 2025, for $663.8 million.

WES Operating repaid the 3.950% Senior Notes due 2025 and 3.100% Senior Notes due 2025 with cash on hand, including proceeds received from the 2024 public offering of $800.0 million in aggregate principal amount of 5.450% Senior Notes due 2034.

For additional information on our senior notes, RCF, and commercial paper program, see Note 9—Debt in the Notes to Consolidated Financial Statements under Part I, Item 1 of this Form 10-Q.

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The differences between net income (loss) attributable to WES and WES Operating are reconciled as follows:

Three Months Ended

thousands March 31, 2025 December 31, 2024 March 31, 2024

Three Months Ended Six Months Ended

thousands June 30, 2025 March 31, 2025 June 30, 2025 June 30, 2024

Net income (loss) attributable to WES $ 341,680 $ 309,007 $ 650,687 $ 951,478

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Other income (expense), net (49) (46) (95) (127)

Income taxes — 8 —

Net income (loss) attributable to WES Operating $ 348,912 $ 315,076 $ 663,988 $ 972,090

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The differences between net cash provided by (used in) operating and financing activities for WES and WES Operating are reconciled as follows:

Three Months Ended

Six Months Ended

thousands 2025 2024

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis