Western Midstream Operating, LP

(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 $55.9 million compared to the three months ended December 31, 2025, primarily due to (i) increased volumes at the DBM water systems, including the acquisition of Aris, and increased average prices, (ii) annual cumulative catch-up adjustments for cost-of-service changes that decreased revenue during the fourth quarter of 2025 at the DJ Basin oil and Springfield systems, and (iii) increased net volumes sold and net average prices at the West Texas complex.

Adjusted Gross Margin increased by $129.9 million compared to the three months ended March 31, 2025, primarily due to increased throughput at the DBM water systems, including the acquisition of Aris.

Per-Mcf Adjusted Gross Margin for natural-gas assets increased by $0.06 compared to the three months ended December 31, 2025, primarily due to (i) increased net volumes sold and net average prices at the West Texas complex and (ii) decreased revenues in the fourth quarter of 2025 associated with the annual cumulative catch-up adjustment for cost-of-service changes at the Springfield gas-gathering system.

Per-Bbl Adjusted Gross Margin for crude-oil and NGLs assets increased by $0.30 compared to the three months ended December 31, 2025, primarily due to decreased revenues in the fourth quarter of 2025 associated with annual cumulative catch-up adjustments for cost-of-service changes at the DJ Basin oil and Springfield oil-gathering systems.

Per-Bbl Adjusted Gross Margin for crude-oil and NGLs assets decreased by $0.10 compared to the three months ended March 31, 2025, primarily due to lower distributions from FRP and TEP, partially offset 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, and increased deficiency fees on certain contracts with increasing throughput minimums.

Per-Bbl Adjusted Gross Margin for produced-water assets increased by $0.07 compared to the three months ended December 31, 2025, primarily due to an increase in skim-oil volumes, including an increase due to the acquisition of Aris, and increased average prices.

Per-Bbl Adjusted Gross Margin for produced-water assets decreased by $0.04 compared to the three months ended March 31, 2025, primarily due to the acquisition of Aris, which has lower-than-average per-Bbl margin as compared to our other produced-water assets.

Adjusted EBITDA. Adjusted EBITDA increased by $47.6 million compared to the three months ended December 31, 2025, primarily due to a $92.1 million increase in total revenues and other, offset partially by a $31.3 million increase in cost of product (net of lower of cost or market inventory adjustments) and an $11.9 million increase in operation and maintenance expenses.

Adjusted EBITDA increased by $89.6 million compared to the three months ended March 31, 2025, primarily due to a $206.5 million increase in total revenues and other. This amount was offset partially by (i) a $61.6 million increase in cost of product (net of lower of cost or market inventory adjustments), (ii) a $37.7 million increase in operation and maintenance expenses, (iii) an $8.7 million decrease in distributions from equity investments, and (iv) a $5.8 million increase in general and administrative expenses excluding non-cash equity-based compensation expense.

Distributable Cash Flow. Distributable Cash Flow decreased by $17.7 million compared to the three months ended December 31, 2025, primarily due to an increase of $67.1 million in recognized service revenues - fee based in excess of (less than) customer billings. This amount was partially offset by a $47.6 million increase in Adjusted EBITDA and an $8.6 million decrease in cash paid for maintenance capital expenditures.

Distributable Cash Flow decreased by $4.8 million compared to the three months ended March 31, 2025, primarily due to (i) a $65.6 million increase in recognized service revenues - fee based in excess of (less than) customer billings, (ii) a $16.8 million increase in interest expense (net of interest income), and (iii) an $8.5 million increase in cash paid for maintenance capital expenditures. These amounts were partially offset by an $89.6 million increase in Adjusted EBITDA.

Free Cash Flow. Free Cash Flow decreased by $98.5 million compared to the three months ended December 31, 2025, primarily due to (i) an $87.7 million decrease in net cash provided by operating activities and (ii) a $13.5 million increase in capital expenditures.

Free Cash Flow decreased by $157.1 million compared to the three months ended March 31, 2025, primarily due to (i) a $93.3 million increase in capital expenditures and (ii) a $60.9 million decrease in net cash provided by operating activities.

See Capital Expenditures and Historical Cash Flow within this Item 2 for further information.