WESMEDIUM SIGNALOPERATIONAL10-K

WES completed the acquisition of Aris Water Solutions on October 15, 2025, significantly expanding its water infrastructure capabilities while experiencing declining profitability despite asset growth.

The Aris acquisition represents a strategic expansion of WES's water business, broadening their DBM water systems from basic produced-water gathering and disposal to include recycling, treating, and supply operations across West Texas and New Mexico. However, the company's profitability declined substantially even as they grew their asset base, suggesting integration challenges or market headwinds that investors should monitor closely.

Comparing 2026-02-18 vs 2025-02-26View on EDGAR →
FINANCIAL ANALYSIS

WES underwent significant financial restructuring during the period, with total assets growing 14.1% to $15.0B primarily driven by the Aris acquisition, funded through an 18.3% increase in total debt to $8.2B. Despite this expansion, profitability deteriorated sharply with net income falling 24.9% to $1.2B and operating income declining 18.7% to $1.6B, while the company paradoxically increased dividend payments by 14.8% to $1.4B. The combination of higher leverage, lower earnings, and increased distributions creates a concerning financial profile that suggests potential strain on cash generation relative to capital allocation priorities.

FINANCIAL STATEMENT CHANGES
Current Liabilities
Balance Sheet
-26.9%
$1.7B→$1.2B

Current liabilities reduced — improved short-term financial position and working capital health.

Net Income
P&L
-24.9%
$1.6B→$1.2B

Net income declined 24.9% — review whether driven by operations, interest costs, or non-recurring items.

Cash & Equivalents
Balance Sheet
-24.8%
$1.1B→$819.5M

Cash decreased 24.8% — monitor burn rate and upcoming capital needs.

Operating Income
P&L
-18.7%
$2.0B→$1.6B

Operating profitability softening — costs rising faster than revenue, watch for margin recovery plan.

Total Debt
Balance Sheet
+18.3%
$6.9B→$8.2B

Debt rose 18.3% — additional borrowing for investment or operations; monitor coverage ratios.

Dividends Paid
Cash Flow
+14.8%
$1.2B→$1.4B

Dividend payments increased 14.8% — management confidence in sustained cash generation.

Total Assets
Balance Sheet
+14.1%
$13.1B→$15.0B

Asset base grew 14.1% — expansion through organic growth, acquisitions, or capital deployment.

Total Liabilities
Balance Sheet
+10.9%
$9.8B→$10.8B

Liabilities increased 10.9% — monitor debt-to-equity ratio and interest coverage.

Current Assets
Balance Sheet
-10.3%
$1.8B→$1.7B

Current assets declined 10.3% — monitor working capital adequacy and short-term liquidity.

LANGUAGE CHANGES
NEW — 2026-02-18
PRIOR — 2025-02-26
ADDED
Management s Discussion and Analysis of Financial Condition and Results of Operations 52 Executive Summary 52 Our Operations 54 How We Evaluate Our Operations 54 Items Affecting the Comparability of Our Financial Results 55 Results of Operations 55 Operating Results 56 Reconciliation of Non-GAAP Financial Measures 62 Key Performance Metrics 66 General Trends and Outlook 66 Liquidity and Capital Resources 68 Items Affecting the Comparability of Financial Results with WES Operating 72 Critical Accounting Estimates 74 Recent Accounting Developments 75 7A.
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 133 9A.
The following list of abbreviations and terms are used in this document: Defined Term Definition Aris Aris Water Solutions, Inc., which was acquired by the Partnership on October 15, 2025.
DBM water systems Produced-water gathering, transporting, recycling, treating, supply, and disposal systems in West Texas and New Mexico, including the assets acquired from Aris (see Note 3 Acquisitions and Divestitures in the Notes to Consolidated Financial Statements under Part II, Item 8 of this Form 10-K).
Occidental Occidental Petroleum Corporation and, as the context requires, its subsidiaries, excluding our general partner.
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REMOVED
Management s Discussion and Analysis of Financial Condition and Results of Operations 54 Executive Summary 54 Our Operations 56 How We Evaluate Our Operations 56 Items Affecting the Comparability of Our Financial Results 57 Results of Operations 58 Operating Results 58 Reconciliation of Non-GAAP Financial Measures 65 Key Performance Metrics 70 General Trends and Outlook 71 Liquidity and Capital Resources 73 Items Affecting the Comparability of Financial Results with WES Operating 78 Critical Accounting Estimates 79 Recent Accounting Developments 80 7A.
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 135 9A.
Form 10-K Summary 185 5 COMMONLY USED ABBREVIATIONS AND TERMS References to we, us, our, WES, the Partnership, or Western Midstream Partners, LP refer to Western Midstream Partners, LP (formerly Western Gas Equity Partners, LP) and its subsidiaries.
The following list of abbreviations and terms are used in this document: Defined Term Definition Anadarko Anadarko Petroleum Corporation and its subsidiaries, excluding our general partner, which became a wholly owned subsidiary of Occidental upon closing of the Occidental Merger on August 8, 2019.
Cactus II Cactus II Pipeline LLC, in which we held a 15% interest that we sold in November 2022 (see Note 3 Acquisitions and Divestitures in the Notes to Consolidated Financial Statements under Part II, Item 8 of this Form 10-K).
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