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 decreased by $34.9 million for the three months ended September 30, 2026, primarily due to (i) decreased throughput at the DJ Basin complex, (ii) decreased skim-oil volumes sold and average prices at the DBM water systems, and (iii) contract mix and product pricing dynamics at the West Texas complex. These decreases were offset partially by an increase of $44.8 million due to the acquisition of the Comanche complex.

Adjusted Gross Margin increased by $490.1 million for the nine months ended September 30, 2026, primarily due to (i) increased throughput at the DBM water systems, including the acquisition of Aris, increased skim-oil volumes sold, average prices, and disposal-fee revenue, (ii) the acquisition of the Comanche complex, (iii) increased throughput, volumes sold, and average prices at the DJ Basin complex, and (iv) increased deficiency fees on certain contracts with increasing throughput minimums at the DBM oil system.

Per-Mcf Adjusted Gross Margin for natural-gas assets decreased by $0.10 for the three months ended September 30, 2026, primarily due to (i) contract mix and product pricing dynamics at the West Texas complex and (ii) decreased throughput and volumes sold at the DJ Basin complex, which has a higher-than-average per-Mcf margin as compared to our other natural-gas assets. These decreases were offset partially by the acquisition of the Comanche complex, which has a higher-than-average per-Mcf margin as compared to our other natural-gas assets.

Per-Mcf Adjusted Gross Margin for natural-gas assets was flat for the nine months ended September 30, 2026, primarily due to the acquisition of the Comanche complex, which has a higher-than-average per-Mcf margin as compared to our other natural-gas assets, partially offset by lower average fees at the West Texas complex.

Per-Bbl Adjusted Gross Margin for crude-oil and NGLs assets decreased by $0.28 for the three months ended September 30, 2026, primarily due to imbalance activity resulting in higher cost of product at the GNB NGL pipeline.

Per-Bbl Adjusted Gross Margin for crude-oil and NGLs assets decreased by $0.02 for the nine months ended September 30, 2026, primarily due to lower distributions at FRP, partially offset by increased deficiency fees on certain contracts with increasing throughput minimums at the DBM oil system.

Per-Bbl Adjusted Gross Margin for produced-water assets decreased by $0.07 for the three months ended September 30, 2026, primarily due to decreased skim-oil volumes sold and average prices.

Adjusted EBITDA. Adjusted EBITDA decreased by $28.2 million for the three months ended September 30, 2026, primarily due to a $30.5 million decrease in total revenues and other and a $6.1 million increase in operation and maintenance expenses.

Adjusted EBITDA increased by $282.8 million for the nine months ended September 30, 2026, primarily due to a $730.6 million increase in total revenues and other. This amount was offset partially by (i) a $206.7 million increase in cost of product (net of lower of cost or market inventory adjustments), (ii) a $177.5 million increase in operation and maintenance expenses, (iii) a $44.1 million increase in general and administrative expenses excluding non-cash equity-based compensation expense, (iv) a $20.4 million decrease in distributions from equity investments, and (v) an $8.2 million increase in property taxes.

Distributable Cash Flow. Distributable Cash Flow decreased by $24.9 million for the three months ended September 30, 2026, primarily due to (i) a $28.2 million decrease in Adjusted EBITDA, (ii) an $11.3 million increase in cash paid for maintenance capital expenditures, and (iii) a $9.1 million increase in interest expense (net of interest income). These amounts were offset partially by (i) a $14.7 million decrease in recognized service revenues - fee based in excess of (less than) customer billings and (ii) a $10.3 million decrease in cash paid for income taxes.

Distributable Cash Flow decreased by $56.3 million for the nine months ended September 30, 2026, primarily due to (i) a $235.0 million increase in recognized service revenues - fee based in excess of (less than) customer billings, (ii) a $56.6 million increase in interest expense (net of interest income), (iii) a $30.0 million increase in cash paid for maintenance capital expenditures, (iv) a $12.2 million increase in capitalized interest, and (v) an $11.2 million increase in cash paid for income taxes. These amounts were offset partially by a $282.8 million increase in Adjusted EBITDA.

Free Cash Flow. Free Cash Flow decreased by $19.4 million for the three months ended September 30, 2026, primarily due to (i) a $24.3 million increase in contributions to equity investments and (ii) a $32.0 million increase in capital expenditures. These amounts were offset partially by (i) a $32.8 million increase in net cash provided by operating activities and (ii) a $4.1 million increase in distributions from equity investments in excess of cumulative earnings.

Free Cash Flow decreased by $435.1 million for the nine months ended September 30, 2026, primarily due to (i) a $302.6 million increase in capital expenditures, (ii) a $92.8 million decrease in net cash provided by operating activities, (iii) a $27.7 million increase in contributions to equity investments, and (iv) a $12.0 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.