Partnership Distributions

12 Months Ended

Dec. 31, 2020

Distributions Made to Members or Limited Partners [Abstract]

Partnership Distributions

4. PARTNERSHIP DISTRIBUTIONS

Partnership distributions. Under its partnership agreement, the Partnership distributes all of its available cash (beyond proper reserves as defined in its partnership agreement) to unitholders of record on the applicable record date within 55 days following each quarter’s end. The Board of Directors of the general partner (the “Board of Directors”) declared the following cash distributions to the Partnership’s unitholders for the periods presented:

thousands except per-unit amounts Quarters Ended	Total Quarterly Per-unit Distribution		Total Quarterly Cash Distribution		Distribution Date
2018 (1)
March 31	$	0.56875	$	124,518	May 2018
June 30	0.58250		127,531		August 2018
September 30	0.59500		130,268		November 2018
December 31	0.60250		131,910		February 2019
2019
March 31	$	0.61000	$	276,324	May 2019
June 30	0.61800		279,959		August 2019
September 30	0.62000		280,880		November 2019
December 31	0.62200		281,786		February 2020
2020
March 31	$	0.31100	$	140,893	May 2020
June 30	0.31100		140,900		August 2020
September 30	0.31100		132,255		November 2020
December 31 (2)	0.31100		131,265		February 2021

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(1)The 2018 distributions were declared and paid prior to the closing of the Merger.

(2)The Board of Directors declared a cash distribution to the Partnership’s unitholders for the fourth quarter of 2020 of $0.31100 per unit, or $131.3 million in aggregate. The cash distribution was paid on February 12, 2021 to unitholders of record at the close of business on February 1, 2021, including the general partner units that were issued on December 31, 2019 (see Note 1).

Following the transactions contemplated by the Exchange Agreement, the general partner units are entitled to all quarterly distributions beginning with the cash distribution declared for the fourth quarter of 2019.

Available cash. The amount of available cash (beyond proper reserves as defined in our partnership agreement) generally is all cash on hand at the end of the quarter, plus, at the discretion of the general partner, working capital borrowings made subsequent to the end of such quarter, less the amount of cash reserves established by the general partner to provide for the proper conduct of the Partnership’s business, including reserves to fund future capital expenditures; to comply with applicable laws, debt instruments, or other agreements; or to provide funds for unitholder distributions 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 and are intended to be repaid or refinanced within 12 months. In all cases, working capital borrowings are used solely for working capital purposes or to fund unitholder distributions.

WES Operating partnership distributions. Immediately prior to the closing of the Merger, the WES Operating incentive distribution rights (“IDRs”) and general partner units were converted into WES Operating common units and a non-economic general partner interest in WES Operating, and at Merger completion, all WES Operating common units held by the public and subsidiaries of Anadarko (other than common units held by the Partnership, WES Operating GP, and 6.4 million common units held by a subsidiary of Anadarko) were converted into common units of the Partnership. Beginning with the first quarter of 2019, WES Operating makes quarterly cash distributions to the Partnership and WGRAH, a subsidiary of Occidental, in proportion to their share of limited partner interests in WES Operating. See Note 5.

4. PARTNERSHIP DISTRIBUTIONS

WES Operating paid the following cash distributions to its limited partners for the periods presented:

thousands Quarters Ended	Total Quarterly Cash Distribution
2019
March 31	$	283,271
June 30	288,083
September 30	289,676
December 31	290,314
2020
March 31	$	143,404
June 30	143,404
September 30	143,404
December 31	127,470

Prior to the closing of the Merger, WES Operating paid the following cash distributions to WES Operating’s common and general partner unitholders for the periods presented:

thousands except per-unit amounts Quarters Ended	Total Quarterly Per-unit Distribution		Total Quarterly Cash Distribution		Distribution Date
2018
March 31	$	0.935	$	221,133	May 2018
June 30	0.950		225,691		August 2018
September 30	0.965		230,239		November 2018
December 31	0.980		234,787		February 2019

WES Operating Class C unit distributions. Prior to the closing of the Merger, WES Operating’s Class C units received quarterly distributions at an equivalent rate to WES Operating’s publicly traded common units. The Class C unit distributions were paid-in-kind with additional Class C Units (“PIK Class C units”) and were disregarded with respect to WES Operating’s distributions of available cash. The number of PIK Class C units issued in connection with a distribution payable on the Class C units was determined by dividing the corresponding distribution attributable to the Class C units by the volume-weighted average price of WES Operating’s common units for the ten days immediately preceding the payment date of the common unit distribution, less a 6% discount. WES Operating recorded the PIK Class C unit distributions at fair value at the time of issuance. This Level-2 fair value measurement used WES Operating’s unit price as a significant input in the determination of the fair value. See Note 5 for further discussion of the Class C units.

    In February 2019, immediately prior to the closing of the Merger, all outstanding Class C units converted into WES Operating common units on a one-for-one basis.

WES Operating’s general partner interest and incentive distribution rights. Prior to the closing of the Merger, WES Operating GP was entitled to 1.5% of all quarterly distributions that WES Operating made prior to its liquidation, and as the former holder of the IDRs, was entitled to incentive distributions at the maximum distribution-sharing percentage of 48.0%. Immediately prior to the closing of the Merger, the IDRs and the general partner units converted into WES Operating common units and a non-economic general partner interest in WES Operating.