Western Midstream Partners, LP 10-Q

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 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 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. 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; • 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; 30 Table of Contents • 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 2024 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. 31 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 residue, 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 June 30, 2025, our assets and investments consisted of the following: Wholly Owned and Operated Operated Interests Equity Interests Gathering systems (1) 18 2 1 Treating facilities 43 3 — Processing plants/trains 27 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 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. 32 Table of Contents The following table provides additional information on throughput for the periods presented below: Three Months Ended Six Months Ended June 30, 2025 March 31, 2025 Inc/ (Dec) June 30, 2025 June 30, 2024 Inc/ (Dec) Throughput for natural-gas assets (MMcf/d) Delaware Basin 2,104 1,975 7 % 2,040 1,810 13 % DJ Basin 1,447 1,404 3 % 1,426 1,412 1 % Powder River Basin 479 463 3 % 471 416 13 % Equity investments 575 550 5 % 562 509 10 % Other 828 899 (8) % 863 1,013 (15) % Total throughput for natural - gas assets 5,433 5,291 3 % 5,362 5,160 4 % Throughput for crude-oil and NGLs assets (MBbls/d) Delaware Basin 269 256 5 % 263 233 13 % DJ Basin 96 94 2 % 95 89 7 % Powder River Basin 28 25 12 % 27 24 13 % Equity investments 112 103 9 % 107 166 (36) % Other 38 36 6 % 36 39 (8) % Total throughput for crude - oil and NGLs assets 543 514 6 % 528 551 (4) % Throughput for produced-water assets (MBbls/d) Delaware Basin 1,242 1,190 4 % 1,216 1,126 8 % Total throughput for produced - water assets 1,242 1,190 4 % 1,216 1,126 8 % 33 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 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. 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 in favorable commodity-price environments, our customers face operational challenges such as severe weather disruptions, oil and gas takeaway constraints, produced water recycling and disposal limitations, seismicity concerns, new regulatory requirements, and optimizing large, complex drilling programs. Our producers’ ability to mitigate or manage such challenges can significantly impact 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 tariffs. High inflation in the U.S. has raised our costs for steel products, automation components, power supply, labor, materials, fuel, and services, raising operating costs and capital expenditures. Additionally, the Trump administration has imposed significant import tariffs, including on imports of steel and aluminum, and may impose further tariffs on other U.S. trading partners. These tariffs could substantially increase our operating and capital costs. While future inflation and tariff impacts are uncertain, higher operating and capital costs could materially and negatively affect 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. Interest rates can be volatile, affecting our interest expense on RCF and commercial paper borrowings. Future increased interest rates would likely 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 may affect investor yield requirements. A rising interest-rate environment could have an adverse impact on our unit price and ability to issue 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. 34 Table of Contents ACQUISITIONS AND DIVESTITURES During the second quarter of 2024, we closed on the sale of our 33.75% interest in the Marcellus Interest systems. 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. See Note 3—Acquisitions and Divestitures under Part I, Item 1 of this Form 10-Q. RESULTS OF OPERATIONS OPERATING RESULTS The following tables and discussion present a summary of our results of operations: Three Months Ended Six Months Ended thousands June 30, 2025 March 31, 2025 June 30, 2025 June 30, 2024 Total revenues and other (1) $ 942,322 $ 917,116 $ 1,859,438 $ 1,793,358 Equity income, net – related parties 27,128 20,435 47,563 60,250 Total operating expenses (1) 524,060 523,081 1,047,141 1,003,444 Gain (loss) on divestiture and other, net (911) (4,667) (5,578) 298,959 Operating income (loss) 444,479 409,803 854,282 1,149,123 Interest expense (95,170) (97,293) (192,463) (185,028) Gain (loss) on early extinguishment of debt — — — 5,403 Other income (expense), net 3,692 7,477 11,169 6,559 Income (loss) before income taxes 353,001 319,987 672,988 976,057 Income tax expense (benefit) 2,239 3,435 5,674 2,277 Net income (loss) 350,762 316,552 667,314 973,780 Net income (loss) attributable to noncontrolling interests 9,082 7,545 16,627 22,302 Net income (loss) attributable to Western Midstream Partners, LP (2) $ 341,680 $ 309,007 $ 650,687 $ 951,478 _________________________________________________________________________________________ (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 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. 35 Table of Contents Throughput Three Months Ended Six Months Ended June 30, 2025 March 31, 2025 Inc/ (Dec) June 30, 2025 June 30, 2024 Inc/ (Dec) Throughput for natural-gas assets (MMcf/d) Gathering, treating, and transportation 354 371 (5) % 362 522 (31) % Processing 4,504 4,370 3 % 4,438 4,129 7 % Equity investments (1) 575 550 5 % 562 509 10 % Total throughput 5,433 5,291 3 % 5,362 5,160 4 % Throughput attributable to noncontrolling interests (2) 182 181 1 % 181 171 6 % Total throughput attributable to WES for natural - gas assets 5,251 5,110 3 % 5,181 4,989 4 % Throughput for crude-oil and NGLs assets (MBbls/d) Gathering, treating, and transportation 431 411 5 % 421 385 9 % Equity investments (1) 112 103 9 % 107 166 (36) % Total throughput 543 514 6 % 528 551 (4) % Throughput attributable to noncontrolling interests (2) 11 11 — % 10 11 (9) % Total throughput attributable to WES for crude - oil and NGLs assets 532 503 6 % 518 540 (4) % Throughput for produced-water assets (MBbls/d) Gathering and disposal 1,242 1,190 4 % 1,216 1,126 8 % Throughput attributable to noncontrolling interests (2) 25 24 4 % 24 23 4 % Total throughput attributable to WES for produced - water assets 1,217 1,166 4 % 1,192 1,103 8 % _________________________________________________________________________________________ (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 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. 36 Table of Contents Crude-oil and NGLs assets 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 increased by 51 MBbls/d and 89 MBbls/d for the three and six months ended June 30, 2025, respectively, due to higher production. Revenues 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/ (Dec) Service revenues – fee based $ 851,419 $ 823,197 3 % $ 1,674,616 $ 1,575,047 6 % Other revenues from customers Service revenues – product based $ 50,442 $ 59,252 (15) % $ 109,694 $ 128,206 (14) % Product sales 40,280 34,469 17 % 74,749 89,403 (16) % Total other revenues from customers $ 90,722 $ 93,721 (3) % $ 184,443 $ 217,609 (15) % Per - unit gross average sales price: 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 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 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. 37 Table of Contents Equity Income, Net – Related Parties Three Months Ended Six Months Ended thousands except percentages June 30, 2025 March 31, 2025 Inc/ (Dec) June 30, 2025 June 30, 2024 Inc/ (Dec) Equity income, net – related parties $ 27,128 $ 20,435 33 % $ 47,563 $ 60,250 (21) % 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 Six Months Ended thousands except percentages June 30, 2025 March 31, 2025 Inc/ (Dec) June 30, 2025 June 30, 2024 Inc/ (Dec) Natural-gas purchases $ 5,180 $ 14,017 (63) % $ 19,197 $ 9,313 106 % NGLs purchases 63,301 60,418 5 % 123,719 137,999 (10) % Other (25,800) (32,943) 22 % (58,743) (47,223) (24) % Cost of product 42,681 41,492 3 % 84,173 100,089 (16) % Operation and maintenance 224,629 226,514 (1) % 451,143 418,258 8 % Total Cost of product and Operation and maintenance expenses $ 267,310 $ 268,006 — % $ 535,316 $ 518,347 3 % Natural-gas purchases 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 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 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 $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. 38 Table of Contents Other Operating Expenses Three Months Ended Six Months Ended thousands except percentages June 30, 2025 March 31, 2025 Inc/ (Dec) June 30, 2025 June 30, 2024 Inc/ (Dec) General and administrative $ 66,146 $ 66,786 (1) % $ 132,932 $ 130,772 2 % Property and other taxes 17,805 17,826 — % 35,631 31,349 14 % Depreciation and amortization 172,113 170,460 1 % 342,573 321,423 7 % Long - lived asset and other impairments 686 3 NM 689 1,553 (56) % Total other operating expenses $ 256,750 $ 255,075 1 % $ 511,825 $ 485,097 6 % Depreciation and amortization expense 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 Six Months Ended thousands except percentages June 30, 2025 March 31, 2025 Inc/ (Dec) June 30, 2025 June 30, 2024 Inc/ (Dec) Long - term and short - term debt $ (93,348) $ (96,060) (3) % $ (189,408) $ (184,806) 2 % Finance lease liabilities (557) (583) (4) % (1,140) (1,332) (14) % Commitment fees and amortization of debt-related costs (3,045) (3,201) (5) % (6,246) (6,685) (7) % Capitalized interest 1,780 2,551 (30) % 4,331 7,795 (44) % Interest expense $ (95,170) $ (97,293) (2) % $ (192,463) $ (185,028) 4 % 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. Income Tax Expense (Benefit) 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. 39 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) income tax benefit, (v) other income, and (vi) 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. 40 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 (i) should not be considered as alternatives to the comparable GAAP measures or any other measure of financial performance presented in accordance with GAAP, (ii) have important limitations as analytical tools because they exclude some, but not all, items that affect the comparable GAAP measures, (iii) should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP, and (iv) 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 our non-GAAP measures as analytical tools by reviewing the comparable GAAP measures, understanding the differences, 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 reconciliations of the GAAP measure to our non-GAAP measures: 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 Total revenues and other $ 942,322 $ 917,116 $ 1,859,438 $ 1,793,358 Less: Cost of product 42,681 41,492 84,173 100,089 Depreciation and amortization 172,113 170,460 342,573 321,423 Gross margin 727,528 705,164 1,432,692 1,371,846 Add: Distributions from equity investments 31,122 34,344 65,466 81,307 Depreciation and amortization 172,113 170,460 342,573 321,423 Less: Reimbursed electricity-related charges recorded as revenues 30,256 29,004 59,260 53,693 Adjusted Gross Margin attributable to noncontrolling interests (1) 21,439 20,181 41,620 39,981 Adjusted Gross Margin $ 879,068 $ 860,783 $ 1,739,851 $ 1,680,902 _________________________________________________________________________________________ (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. 41 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 Six Months Ended thousands except per-unit amounts June 30, 2025 March 31, 2025 June 30, 2025 June 30, 2024 Gross margin Gross margin for natural - gas assets (1) $ 539,462 $ 527,144 $ 1,066,606 $ 1,027,837 Gross margin for crude - oil and NGLs assets (1) 106,839 101,275 208,114 190,364 Gross margin for produced - water assets (1) 89,341 84,576 173,917 167,387 Per - Mcf Gross margin for natural - gas assets (2) 1.09 1.11 1.10 1.09 Per - Bbl Gross margin for crude - oil and NGLs assets (2) 2.16 2.19 2.18 1.90 Per - Bbl Gross margin for produced - water assets (2) 0.79 0.79 0.79 0.82 Adjusted Gross Margin Adjusted Gross Margin for natural - gas assets $ 629,093 $ 618,452 $ 1,247,545 $ 1,198,606 Adjusted Gross Margin for crude - oil and NGLs assets 146,128 143,475 289,603 289,163 Adjusted Gross Margin for produced - water assets 103,847 98,856 202,703 193,133 Per - Mcf Adjusted Gross Margin for natural - gas assets (3) 1.32 1.34 1.33 1.32 Per - Bbl Adjusted Gross Margin for crude - oil and NGLs assets (3) 3.02 3.17 3.09 2.94 Per - Bbl Adjusted Gross Margin for produced - water assets (3) 0.94 0.94 0.94 0.96 _________________________________________________________________________________________ (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. 42 Table of Contents 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 Net income (loss) $ 350,762 $ 316,552 $ 667,314 $ 973,780 Add: Distributions from equity investments 31,122 34,344 65,466 81,307 Non - cash equity - based compensation expense 10,713 8,248 18,961 19,814 Interest expense 95,170 97,293 192,463 185,028 Income tax expense 2,239 3,435 5,674 2,277 Depreciation and amortization 172,113 170,460 342,573 321,423 Long - lived asset and other impairments 686 3 689 1,553 Other expense 43 190 233 149 Less: Gain (loss) on divestiture and other, net (911) (4,667) (5,578) 298,959 Gain (loss) on early extinguishment of debt — — — 5,403 Equity income, net – related parties 27,128 20,435 47,563 60,250 Other income 3,692 7,477 11,169 6,559 Adjusted EBITDA attributable to noncontrolling interests (1) 15,063 13,708 28,771 27,691 Adjusted EBITDA $ 617,876 $ 593,572 $ 1,211,448 $ 1,186,469 Reconciliation of Net cash provided by operating activities to Adjusted EBITDA Net cash provided by operating activities $ 563,977 $ 530,793 $ 1,094,770 $ 1,031,126 Interest (income) expense, net 95,170 97,293 192,463 185,028 Accretion and amortization of long - term obligations, net (2,032) (2,202) (4,234) (4,663) Current income tax expense (benefit) 1,940 1,722 3,662 2,018 Other (income) expense, net (3,692) (7,477) (11,169) (6,559) Distributions from equity investments in excess of cumulative earnings – related parties 3,040 11,007 14,047 24,303 Changes in assets and liabilities: Accounts receivable, net 31,425 (28,634) 2,791 25,278 Accounts and imbalance payables and accrued liabilities, net (31,039) 46,684 15,645 87,045 Other items, net (25,850) (41,906) (67,756) (129,416) Adjusted EBITDA attributable to noncontrolling interests (1) (15,063) (13,708) (28,771) (27,691) Adjusted EBITDA $ 617,876 $ 593,572 $ 1,211,448 $ 1,186,469 Cash flow information Net cash provided by operating activities $ 563,977 $ 530,793 $ 1,094,770 $ 1,031,126 Net cash provided by (used in) investing activities (173,974) (140,790) (314,764) 381,854 Net cash provided by (used in) financing activities (708,718) (1,032,020) (1,740,738) (1,341,648) _________________________________________________________________________________________ (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. 43 Table of Contents 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 Net cash provided by operating activities $ 563,977 $ 530,793 $ 1,094,770 $ 1,031,126 Less: Capital expenditures 178,623 142,402 321,025 405,653 Add: Distributions from equity investments in excess of cumulative earnings – related parties 3,040 11,007 14,047 24,303 Free Cash Flow $ 388,394 $ 399,398 $ 787,792 $ 649,776 Cash flow information Net cash provided by operating activities $ 563,977 $ 530,793 $ 1,094,770 $ 1,031,126 Net cash provided by (used in) investing activities (173,974) (140,790) (314,764) 381,854 Net cash provided by (used in) financing activities (708,718) (1,032,020) (1,740,738) (1,341,648) 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 Revenue s, Cost of Product (Natural-gas purchases, NGLs purchases, and Other items), and Other Operating Expenses (Depreciation and amortization expense). 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) 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. 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. 44 Table of Contents KEY PERFORMANCE METRICS 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/ (Dec) Adjusted Gross Margin $ 879,068 $ 860,783 2 % $ 1,739,851 $ 1,680,902 4 % Per - Mcf Adjusted Gross Margin for natural - gas assets (1) 1.32 1.34 (1) % 1.33 1.32 1 % Per - Bbl Adjusted Gross Margin for crude - oil and NGLs assets (1) 3.02 3.17 (5) % 3.09 2.94 5 % Per - Bbl Adjusted Gross Margin for produced - water assets (1) 0.94 0.94 — % 0.94 0.96 (2) % Adjusted EBITDA 617,876 593,572 4 % 1,211,448 1,186,469 2 % Free Cash Flow 388,394 399,398 (3) % 787,792 649,776 21 % _________________________________________________________________________________________ (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 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 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 $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. 45 Table of Contents Free Cash Flow. 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. LIQUIDITY AND CAPITAL RESOURCES Our primary cash uses include equity and debt service, operating expenses, acquisitions, and capital expenditures. 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. The amount of future distributions to unitholders will be determined by the Board on a quarterly basis. 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 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”). 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 acquire any common units and the program may be suspended or discontinued at our discretion without prior notice. 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. 46 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 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. See Note 8—Selected Components of Working Capital and Note 9—Debt in the Notes to Consolidated Financial Statements under Part I, Item 1 of this Form 10-Q. Capital expenditures . 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: Six Months Ended June 30, thousands 2025 2024 Acquisitions $ — $ 443 Capital expenditures (1) 321,025 405,653 Capital incurred (1) 342,094 422,185 _________________________________________________________________________________________ (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. 47 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: Six Months Ended June 30, thousands 2025 2024 Net cash provided by (used in): Operating activities $ 1,094,770 $ 1,031,126 Investing activities (314,764) 381,854 Financing activities (1,740,738) (1,341,648) Net increase (decrease) in cash and cash equivalents $ (960,732) $ 71,332 Operating activities . 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 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 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 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 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. 48 Table of Contents Credit risk . We bear credit risk through exposure to non - payment or non - performance by our counterparties (e.g., Occidental and other customers, financial institutions, and other parties), including risks 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. 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 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 Limited partner interest in WES Operating not held by WES (1) 6,980 6,303 13,283 19,447 General and administrative expenses (2) 301 (188) 113 1,292 Other income (expense), net (49) (46) (95) (127) Net income (loss) attributable to WES Operating $ 348,912 $ 315,076 $ 663,988 $ 972,090 _________________________________________________________________________________________ (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. 49 Table of Contents 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: Six Months Ended June 30, thousands 2025 2024 WES net cash provided by operating activities $ 1,094,770 $ 1,031,126 General and administrative expenses (1) 113 1,292 Non - cash equity - based compensation expense (254) (289) Changes in working capital (19,693) (22,497) Other income (expense), net (95) (127) WES Operating net cash provided by operating activities $ 1,074,841 $ 1,009,505 WES net cash provided by (used in) financing activities $ (1,740,738) $ (1,341,648) Distributions to WES unitholders (2) 696,249 564,296 Distributions to WES from WES Operating (3) (696,429) (565,575) Increase (decrease) in outstanding checks — 36 Other 20,042 21,195 WES Operating net cash provided by (used in) financing activities $ (1,720,876) $ (1,321,696) _________________________________________________________________________________________ (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. Noncontrolling interest. WES Operating’s noncontrolling interest consists of the 25% third - party interest in Chipeta. 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, 2024. 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. 50 Table of Contents