Debt and Interest Expense

6 Months Ended

Jun. 30, 2023

Debt Instruments [Abstract]

Debt and Interest Expense

9. DEBT AND INTEREST EXPENSE

WES Operating is the borrower for all outstanding debt and is expected to be the borrower for all future debt issuances. The following table presents the outstanding debt:

	June 30, 2023						December 31, 2022
thousands	Principal		Carrying Value		Fair Value (1)		Principal		Carrying Value		Fair Value (1)
Short-term debt
Floating-Rate Senior Notes due 2023	$	—	$	—	$	—	$	213,138	$	213,121	$	214,823
Finance lease liabilities	2,532		2,532		2,532		2,659		2,659		2,659
Total short-term debt	$	2,532	$	2,532	$	2,532	$	215,797	$	215,780	$	217,482
Long-term debt
3.100% Senior Notes due 2025	$	677,859	$	675,888	$	648,908	$	730,706	$	727,953	$	692,491
3.950% Senior Notes due 2025	399,163		397,288		383,780		399,163		396,825		379,107
4.650% Senior Notes due 2026	468,970		467,186		451,768		474,242		472,161		452,201
4.500% Senior Notes due 2028	397,182		394,188		375,297		400,000		396,698		368,346
4.750% Senior Notes due 2028	382,888		380,541		364,054		400,000		397,340		368,141
4.050% Senior Notes due 2030	1,160,471		1,152,608		1,045,828		1,200,000		1,191,345		1,053,038
6.150% Senior Notes due 2033	750,000		741,039		755,873		—		—		—
5.450% Senior Notes due 2044	600,000		593,954		511,260		600,000		593,878		503,742
5.300% Senior Notes due 2048	700,000		687,613		587,440		700,000		687,494		580,570
5.500% Senior Notes due 2048	350,000		342,847		294,126		350,000		342,783		291,194
5.250% Senior Notes due 2050	1,000,000		984,069		833,880		1,000,000		983,945		829,804
RCF	—		—		—		375,000		375,000		375,000
Finance lease liabilities	6,993		6,993		6,993		4,160		4,160		4,160
Total long-term debt	$	6,893,526	$	6,824,214	$	6,259,207	$	6,633,271	$	6,569,582	$	5,897,794

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(1)Fair value is measured using the market approach and Level-2 fair value inputs.

Debt activity. The following table presents the debt activity for the six months ended June 30, 2023:

thousands	Carrying Value
Balance at December 31, 2022	$	6,785,362
RCF borrowings	220,000
Repayments of RCF borrowings	(595,000)
Issuance of 6.150% Senior Notes due 2033	750,000
Repayment of Floating-Rate Senior Notes due 2023	(213,138)
Repayment of 3.100% Senior Notes due 2025	(52,847)
Repayment of 4.650% Senior Notes due 2026	(5,272)
Repayment of 4.500% Senior Notes due 2028	(2,818)
Repayment of 4.750% Senior Notes due 2028	(17,112)
Repayment of 4.050% Senior Notes due 2030	(39,529)
Finance lease liabilities	2,706
Other	(5,606)
Balance at June 30, 2023	$	6,826,746

9. DEBT AND INTEREST EXPENSE

WES Operating Senior Notes. WES Operating issued the Fixed-Rate 3.100% Senior Notes due 2025, 4.050% Senior Notes due 2030, 5.250% Senior Notes due 2050, and the Floating-Rate Senior Notes due 2023 in January 2020. Including the effects of the issuance prices, underwriting discounts, and interest-rate adjustments, the effective interest rates of the Senior Notes due 2025, 2030, and 2050, were 3.791%, 4.671%, and 5.869%, respectively, at June 30, 2023, and were 3.790%, 4.671%, and 5.869%, respectively, at June 30, 2022. The effective interest rate of these notes is subject to adjustment from time to time due to a change in credit rating.

During the second quarter of 2023, WES Operating completed the public offering of $750.0 million in aggregate principal amount of 6.150% Senior Notes due 2033. Interest is payable semi-annually on April 1st and October 1st of each year, with the initial interest payment being due on October 1, 2023. Net proceeds from the offering were used to repay borrowings under the RCF and for general partnership purposes.

Also during the second quarter of 2023, WES Operating purchased and retired $117.6 million of certain of its senior notes via open-market repurchases (see Debt activity above). For the three months ended June 30, 2023, a gain of $6.8 million was recognized for the early retirement of portions of these notes. Subsequent to June 30, 2023, WES Operating purchased and retired $159.1 million of certain of its senior notes via open-market repurchases. During the first quarter of 2023, WES Operating redeemed the total principal amount outstanding on the Floating-Rate Senior Notes due 2023 at par value with cash on hand.

During the second quarter of 2022, WES Operating (i) redeemed the total principal amount outstanding of the 4.000% Senior Notes due 2022 at par value and (ii) purchased and retired $1.4 million of the 3.100% Senior Notes due 2025 via open-market repurchases.

As of June 30, 2023, WES Operating was in compliance with all covenants under the relevant governing indentures.

Revolving credit facility. In April 2023, WES Operating (i) repaid all then-outstanding borrowings under its senior unsecured revolving credit facility (“RCF”) with proceeds from the 6.150% Senior Notes due 2033 offering, and (ii) entered into an amendment to its RCF to, among other things, extend the maturity date to April 2028 and provide for a maximum borrowing capacity up to $2.0 billion, expandable to maximum of $2.5 billion, through the maturity date.

As of June 30, 2023, there were no outstanding borrowings and $5.1 million of outstanding letters of credit, resulting in $2.0 billion of available borrowing capacity under the RCF. As of June 30, 2023 and 2022, the interest rate on any outstanding RCF borrowings was 6.44% and 3.12%, respectively. The facility-fee rate was 0.20% and 0.25% at June 30, 2023 and 2022, respectively. As of June 30, 2023, WES Operating was in compliance with all covenants under the RCF.

Interest expense. The following table summarizes the amounts included in interest expense:

	Three Months Ended  June 30,				Six Months Ended  June 30,
thousands	2023		2022		2023		2022
Long-term and short-term debt	$	(85,088)	$	(78,577)	$	(166,239)	$	(162,005)
Finance lease liabilities	(230)		(31)		(393)		(73)
Commitment fees and amortization of debt-related costs	(3,414)		(3,068)		(6,295)		(6,100)
Capitalized interest	2,550		904		5,075		1,951
Interest expense	$	(86,182)	$	(80,772)	$	(167,852)	$	(166,227)