3. PARTNERSHIP DISTRIBUTIONS

WGP partnership distributions. WGP’s partnership agreement requires WGP to distribute all of its available cash (as defined in its partnership agreement) to WGP unitholders of record on the applicable record date within 55 days of the end of each quarter.

The Board of Directors of WGP GP declared the following cash distributions to WGP unitholders for the periods presented:



thousands except per-unit amounts Quarters Ended	Total Quarterly Distribution per Unit		Total Quarterly Cash Distribution		Date of Distribution
2012
December 31 (prorated from IPO date)	$	0.03587	$	7,852	February 2013
2013
March 31	$	0.17875	$	39,128	May 2013
June 30	0.19750		43,232		August 2013
September 30	0.21375		46,789		November 2013
December 31	0.23125		50,620		February 2014
2014
March 31	$	0.25000	$	54,726	May 2014
June 30	0.27125		59,378		August 2014
September 30	0.29125		63,756		November 2014
December 31 ⁽¹⁾	0.31250		68,409		February 2015


⁽¹⁾	On January 22, 2015, the Board of Directors of WGP GP declared a cash distribution to WGP unitholders of $0.31250 per unit, or $68.4 million in aggregate. The cash distribution was paid on February 20, 2015, to WGP unitholders of record at the close of business on February 2, 2015.

3. PARTNERSHIP DISTRIBUTIONS (CONTINUED)

WES partnership distributions. WES’s partnership agreement requires WES to distribute all of its available cash (as defined in WES’s partnership agreement) to WES unitholders of record on the applicable record date within 45 days of the end of each quarter. The Board of Directors of WES GP declared the following cash distributions to WES’s common and general partner unitholders for the periods presented:



thousands except per-unit amounts Quarters Ended	Total Quarterly Distribution per Unit		Total Quarterly Cash Distribution		Date of Distribution
2012
March 31	$	0.460	$	46,053	May 2012
June 30	0.480		52,425		August 2012
September 30	0.500		56,346		November 2012
December 31	0.520		65,657		February 2013
2013
March 31	$	0.540	$	70,143	May 2013
June 30	0.560		79,315		August 2013
September 30	0.580		83,986		November 2013
December 31	0.600		92,609		February 2014
2014
March 31	$	0.625	$	98,749	May 2014
June 30	0.650		105,655		August 2014
September 30	0.675		111,608		November 2014
December 31 ⁽¹⁾	0.700		126,044		February 2015

⁽¹⁾

On January 22, 2015, the Board of Directors of WES GP declared a cash distribution to WES unitholders of $0.700 per unit, or $126.0 million in aggregate, including incentive distributions, but excluding distributions on WES Class C units (see WES Class C unit distributions below). The cash distribution was paid on February 12, 2015, to WES unitholders of record at the close of business on February 2, 2015.

WES’s available cash. The amount of available cash (as defined in WES’s partnership agreement) generally is all cash on hand at the end of the quarter, plus, at the discretion of WES GP, working capital borrowings made subsequent to the end of such quarter, less the amount of cash reserves established by WES GP to provide for the proper conduct of WES’s business, including reserves to fund future capital expenditures; to comply with applicable laws, debt instruments or other agreements; or to provide funds for distributions to WES unitholders, and to WES GP for any one or more of the next four quarters. Working capital borrowings generally include borrowings made under a credit facility or similar financing arrangement. It is intended that working capital borrowings be repaid within 12 months. In all cases, working capital borrowings are used solely for working capital purposes or to fund distributions to partners.

3. PARTNERSHIP DISTRIBUTIONS (CONTINUED)

General partner interest and incentive distribution rights of WES. As of December 31, 2014, WES GP was entitled to 1.9% of all quarterly distributions by WES (see Note 4). WES GP, as the holder of the IDRs, was entitled to incentive distributions at the maximum distribution sharing percentage of 48.0% for all periods presented.



	Total Quarterly Distribution Target Amount	Marginal Percentage Interest in Distributions
	Total Quarterly Distribution Target Amount	Unitholders	General Partner
Minimum quarterly distribution	$0.300	98.1%	1.9%
First target distribution	up to $0.345	98.1%	1.9%
Second target distribution	above $0.345 up to $0.375	85.1%	14.9%
Third target distribution	above $0.375 up to $0.450	75.1%	24.9%
Thereafter	above $0.450	50.1%	49.9%

The maximum distribution sharing percentage of 49.9% includes distributions paid to WES GP on its 1.9% general partner interest and the 48.0% IDR maximum distribution sharing percentage, and does not include any distributions that it may receive on WES common units that it owns or may acquire.

WES Class C unit distributions. WES’s Class C units receive quarterly distributions at a rate equivalent to WES’s common units. The distributions are paid in the form of additional Class C units (“PIK C units”) until the end of 2017 (unless earlier converted, see Note 4), and the Class C units are disregarded with respect to WES’s distribution of WES’s available cash until they are converted to common units. The number of additional PIK C units to be issued in connection with a distribution payable on the Class C units is determined by dividing the corresponding distribution attributable to the Class C units by the volume-weighted-average price of WES’s common units for the ten days immediately preceding the payment date for the WES common unit distribution, less a 6% discount. WES records the PIK C distributions at fair value at the time of issuance. This fair value measurement uses WES’s unit price as a significant input in the determination of the fair value and thus represents a Level 2 measurement. On February 12, 2015, WES GP distributed 45,711 PIK C units to the Class C unitholder, based on the $0.700 common unit distribution referenced above, with an implied fair value of $3.1 million. The Class C unit distribution was prorated for the 37-day period the Class C units were outstanding during the fourth quarter of 2014.