What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2021-08-04 compared with 2021-05-05 · 86 added, 64 removed, 230 unchanged (39% of the section changed)

67 unchanged sentences

We have not experienced significant disruptions to our business operations and do not expect to experience significant disruptions to our business operations resulting from COVID-19, primarily due to the fact that 95% of our production is sold to Westlake on a take-or-pay contract.

Our first priority in our response to this crisis has been the health and safety of our operators, who are seconded to us by Westlake, and those of our customers and vendors.

Westlake has implemented preventative measures and developed corporate and regional response plans to minimize unnecessary risk of exposure.

We and Westlake have modified certain business practices (including those related to employee travel, employee work locations and employee work practices) to conform to government restrictions and best practices encouraged by the Center for Disease Control and Prevention, the World Health Organization and other governmental and regulatory authorities.

We and Westlake have implemented strategies to reduce costs, increase operational efficiencies and lower capital spending.

We also deferred the planned turnaround at OpCo's Petro 2 ethylene unit and associated maintenance cost from 2020 to the second half of 2021.

The turnaround is expected to last approximately 60 days.

February Winter Storm

In February 2021, large parts of the southern United States, including Louisiana and Kentucky, experienced a severe winter storm.

Due to the severe winter storm, OpCo's ethylene production facilities in the region experienced disruption to their operations, resulting in lost production and additional maintenance costs.

OpCo declared force majeure under the Ethylene Supply Agreement during February and March 2021.

As a result of the force majeure events, we recognized a buyer deficiency fee of $5.5 million and a Shortfall of $4.2 million in the first quarter of 2021 that are scheduled to be received by the Partnership after the end of 2021.

The buyer deficiency fee is associated with ethylene that OpCo would have produced and is not expected to be produced in 2021 based on anticipated production.

OpCo's production facilities have since resumed production.

Force Majeure Events

During June 2021, OpCo's Petro 1 facility experienced an outage, which resulted in a force majeure event under the Ethylene Sales Agreement.

In addition, OpCo declared a force majeure in February 2021 due to the severe winter storm.

As a result of these force majeure events, the Partnership updated its estimate of OpCo's 2021 anticipated production as of June 30, 2021.

The buyer deficiency fee is measured based upon the lower of the actual production deficiency at period end or the estimated annual production deficiency based upon OpCo's annual anticipated production.

Based upon this change in estimate of OpCo's 2021 anticipated production, the Partnership has recognized buyer deficiency fees and Shortfall of $8.7 million and $18.4 million during the three and six months ended June 30, 2021, respectively.

The buyer deficiency fees and Shortfall are classified as a component of net sales.

Results of Operations

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

(dollars in thousands)

22 unchanged sentences

(2) See "Reconciliation of EBITDA to Net Income, Income from Operations and Net Cash Provided by Operating Activities" below.

Three Months Ended March 31, 2021

Three Months Ended June 30, 2021 Six Months Ended June 30, 2021

Sales Price Volume Average

Sales Price Volume

1 unchanged sentence

+30.5 % +1.0 % +25.4 % -8.4 %

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

Average industry prices (1)

3 unchanged sentences

43.0 11.0 44.0 13.4

_____________

(1) Industry pricing data was obtained through IHS Markit ("IHS").

3 unchanged sentences

The following table presents reconciliations of MLP distributable cash flow to net income and net cash provided by operating activities, the most directly comparable GAAP financial measures, for each of the periods indicated.

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

(dollars in thousands)

5 unchanged sentences

28,734 26,164 57,632 52,291

Mark-to-market adjustment gain on derivative contracts — (2,491)

Mark-to-market adjustment loss (gain) on derivative contracts — 704 — (1,787)

Contribution to turnaround reserves (12,463) (9,884) (24,795) (19,807)

5 unchanged sentences

The following table presents reconciliations of EBITDA to net income, income from operations and net cash provided by operating activities, the most directly comparable GAAP financial measures, for each of the periods indicated.

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

(dollars in thousands)

10 unchanged sentences

EBITDA $ 151,483 $ 109,827 $ 258,058 $ 233,795

For the quarter ended March 31, 2021, net income was $76.6 million on net sales of $268.2 million.

This represents a decrease in net income of $17.2 million as compared to net income of $93.8 million on net sales of $250.5 million for the quarter ended March 31, 2020.

Net income attributable to the Partnership for the first quarter of 2021 was $15.1 million as compared to $17.7 million for the first quarter of 2020, a decrease of $2.6 million.

Net income and net income attributable to the Partnership for the first quarter of 2021 as compared to the first quarter of 2020 were lower primarily due to lower sales volumes to Westlake and third parties and higher feedstock and conversion costs.

The decreases were partially offset by higher sales prices for ethylene sold to Westlake per the terms of the Ethylene Sales Agreement and to third parties, as well as the buyer deficiency fee of $5.5 million and the Shortfall of $4.2 million recognized in the first quarter of 2021 due to the force majeure events in February and March 2021 resulting from the severe winter storm.

Net sales for the first quarter of 2021 increased by $17.7 million as compared to net sales for the first quarter of 2020, mainly due to higher sales prices to Westlake per the terms of the Ethylene Sales Agreement and to third parties, as well as the buyer deficiency fee and the Shortfall recognized during the first quarter of 2021, partially offset by lower sales volumes to Westlake and third parties during the first quarter of 2021.

Income from operations was $79.0 million for the first quarter of 2021 as compared to $97.4 million for the first quarter of 2020.

Income from operations for the first quarter of 2021 decreased mainly as a result of decreased sales volumes to Westlake and third parties, increased selling, general and administrative costs and higher feedstock and conversion costs, as compared to the first quarter of 2020, partially offset by higher sales prices for ethylene sold to Westlake and third parties, as well as the buyer deficiency fee and the Shortfall recognized during the period.

For the quarter ended June 30, 2021, net income was $120.3 million on net sales of $322.2 million.

This represents an increase in net income of $39.9 million as compared to net income of $80.4 million on net sales of $238.5 million for the quarter ended June 30, 2020.

Net income attributable to the Partnership for the second quarter of 2021 was $25.1 million as compared to $14.9 million for the second quarter of 2020, an increase of $10.2 million.

Net income and net income attributable to the Partnership for the second quarter of 2021 as compared to the second quarter of 2020 were higher primarily due to increased sales prices and volumes to third parties and the buyer deficiency fee and Shortfall totaling $8.7 million per the terms of the Ethylene Sales Agreement with Westlake in the second quarter of 2021 due to the force majeure event in June 2021, partially offset by increased ethane feedstock and natural gas costs.

Net sales for the second quarter of 2021 increased by $83.7 million as compared to net sales for the second quarter of 2020, mainly due to higher sales prices and volumes to third parties and higher sales price to Westlake per the terms of the Ethylene Sales Agreement, as well as the buyer deficiency fee and Shortfall during the second quarter of 2021.

Income from operations was $122.8 million for the second quarter of 2021 as compared to $83.9 million for the second quarter of 2020.

Income from operations for the second quarter of 2021 increased mainly as a result of increased sales prices and volumes to third parties and the buyer deficiency fee and Shortfall recognized during the period, partially offset by increased ethane feedstock costs, natural gas costs and selling general and administrative expenses, as compared to the second quarter of 2020.

For the six months ended June 30, 2021, net income was $196.9 million on net sales of $590.4 million.

This represents an increase in net income of $22.8 million as compared to net income of $174.1 million on net sales of $489.0 million for the six months ended June 30, 2020.

Net income attributable to the Partnership for the six months ended June 30, 2021 was $40.2 million as compared to $32.6 million for the six months ended June 30, 2020, an increase of $7.6 million.

Net income and net income attributable to the Partnership for the six months ended June 30, 2021 as compared to the six months ended June 30, 2020 were higher primarily due to higher sales prices to Westlake per the terms of the Ethylene Sales Agreement, higher prices and volumes to third parties and the buyer deficiency fee and Shortfall totaling $18.4 million recognized during the period, partially offset by increased ethane feedstock and natural gas costs as well lower sales volumes to Westlake.

Net sales for the six months ended June 30, 2021 increased by $101.4 million as compared to net sales for the six months ended June 30, 2020, mainly due to higher sales prices and volumes to third parties and higher sales price to Westlake per the terms of the Ethylene Sales Agreement, as well as the buyer deficiency fee and Shortfall recognized during the six months ended June 30, 2021, partially offset by lower sales volumes to Westlake during the six months ended June 30, 2021.

Income from operations was $201.8 million for the six months ended June 30, 2021 as compared to $181.2 million for the six months ended June 30, 2020.

Income from operations for the six months ended June 30, 2021 increased mainly as a result of increased sales prices and volumes for ethylene to third parties and the buyer deficiency fee and Shortfall recognized during the period, partially offset by increased ethane feedstock costs, natural gas costs and selling general and administrative expenses as well lower sales volumes to Westlake as compared to the six months ended June 30, 2020.

RESULTS OF OPERATIONS

First Quarter 2021 Compared with First Quarter 2020

Total net sales increased by $17.7 million, or 7.1%, to $268.2 million in the first quarter of 2021 from $250.5 million in the first quarter of 2020.

The increase in net sales in the first quarter of 2021 was primarily due to higher sales prices to Westlake per the terms of the Ethylene Sales Agreement and to third parties, the buyer deficiency fee of $5.5 million and the Shortfall of $4.2 million recognized during the period, partially offset by lower sales volumes to Westlake and third parties during the first quarter of 2021.

The average sales price in the first quarter of 2021 contributed to a 22.2% increase in net sales, primarily due to higher ethylene sales prices to Westlake per the terms of the Ethylene Sales Agreement and to third parties.

The lower sales volume contributed to a 19.0% decrease in net sales in the first quarter of 2021 compared to the first quarter of 2020.

The decrease in sales volumes for the first quarter of 2021 was primarily due to the force majeure events as a result of the severe winter storm that impacted OpCo's production facilities.

Second Quarter 2021 Compared with Second Quarter 2020

Total net sales increased by $83.7 million, or 35.1%, to $322.2 million in the second quarter of 2021 from $238.5 million in the second quarter of 2020.

The increase in net sales in the second quarter of 2021 was primarily due to higher sales prices and volumes to third parties and higher sales price to Westlake per the terms of the Ethylene Sales Agreement and the buyer deficiency fee and Shortfall recognized during the period.

The average sales price in the second quarter of 2021 contributed to a 30.5% increase in net sales, primarily due to higher ethylene sales prices to third parties and Westlake per the terms of the Ethylene Sales Agreement.

Gross Profit.

Gross profit decreased to $87.7 million for the first quarter of 2021 from $103.5 million for the first quarter of 2020.

The gross profit margin in the first quarter of 2021 was 32.7%, as compared to 41.3% for the first quarter of 2020.

The first quarter 2021 gross profit margin was lower mainly due to increased feedstock and conversion costs and lower sales volumes to third parties, partially offset by higher prices for ethylene sold to Westlake and third parties compared to the first quarter of 2020.

Gross profit increased to $131.0 million for the second quarter of 2021 from $90.0 million for the second quarter of 2020.

The gross profit margin in the second quarter of 2021 was 40.7%, as compared to 37.7% for the second quarter of 2020.

The second quarter 2021 gross profit margin was higher mainly due to higher prices and volumes for ethylene sold to third parties and the buyer deficiency fee and Shortfall recognized during the period, partially offset by higher ethane feedstock and natural gas costs in the second quarter of 2021.

Selling, General and Administrative Expenses.

Selling, general and administrative expenses increased by $2.5 million, or 40.3%, to $8.7 million in the first quarter of 2021 as compared to $6.2 million in the first quarter of 2020.

The increase in the first quarter of 2021 was mainly attributable to higher service costs as compared to the first quarter of 2020.

Selling, general and administrative expenses increased by $2.2 million, or 36.1%, to $8.3 million in the second quarter of 2021 as compared to $6.1 million in the second quarter of 2020.

The increase in the second quarter of 2021 was mainly attributable to increased service costs and allowance for doubtful accounts as compared to the second quarter of 2020.

Interest Expense.

Interest expense decreased by $1.8 million to $2.2 million in the first quarter of 2021 from $4.0 million in the first quarter of 2020, largely due to a lower average interest rate on debt.

Other Income, net.

Other income, net in the first quarter of 2021 decreased by $0.6 million, primarily due to a decrease in interest income earned under the Investment Management Agreement as a result of lower average interest rates.

Interest expense decreased by $1.2 million to $2.2 million in the second quarter of 2021 from $3.4 million in the second quarter of 2020, largely due to a lower average interest rate on debt.

MLP Distributable Cash Flow.

MLP distributable cash flow decreased by $2.1 million to $16.2 million in the first quarter of 2021 from $18.3 million in the first quarter of 2020.

The decrease in the first quarter of 2021, as compared to the prior-year period, was primarily attributable to the lower earnings at OpCo resulting from the severe winter storm as well as contributions for turnaround reserves.

EBITDA decreased by $17.4 million to $106.6 million in the first quarter of 2021 from $124.0 million in the first quarter of 2020.

The decrease, as compared to the prior-year period, was primarily due to lower sales volumes to Westlake and third parties as a result of lower production due to the severe winter storm in February 2021 and higher feedstock and conversion costs, partially offset by higher sales prices for ethylene sold to Westlake per the terms of the Ethylene Sales Agreement and to third parties, as well as the buyer deficiency fee and the Shortfall recognized in the first quarter of 2021.

CASH FLOW DISCUSSION FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020

MLP distributable cash flow increased by $8.6 million to $25.5 million in the second quarter of 2021 from $16.9 million in the second quarter of 2020.

The increase in the second quarter of 2021, as compared to the prior-year period, was primarily attributable to the higher earnings at OpCo, partially offset by increased turnaround reserves and higher maintenance expense.

EBITDA increased by $41.7 million to $151.5 million in the second quarter of 2021 from $109.8 million in the second quarter of 2020.

The increase, as compared to the prior-year period, was primarily due to higher sales prices and volumes to third parties, and the buyer deficiency fee and Shortfall recognized during the period, partially offset by higher ethane feedstock and natural gas costs.

Six Months Ended June 30, 2021 Compared with Six Months Ended June 30, 2020

Total net sales increased by $101.4 million, or 20.7%, to $590.4 million in the six months ended June 30, 2021 from $489.0 million in the six months ended June 30, 2020.

The increase in net sales in the six months ended June 30, 2021 was primarily due to higher sales prices and volumes to third parties and higher sales price to Westlake per the terms of the Ethylene Sales Agreement, and the buyer deficiency fee and Shortfall recognized during the period, partially offset by lower sales volumes to Westlake during the six months ended June 30, 2021.

The average sales price in the six months ended June 30, 2021 contributed to a 25.4% increase in net sales, primarily due to higher ethylene sales prices to third parties and to Westlake per the terms of the Ethylene Sales Agreement.

The lower sales volume contributed to a 8.4% decrease in net sales in the six months ended June 30, 2021 compared to the six months ended June 30, 2020.

The decrease in sales volumes for the six months ended June 30, 2021 was primarily due to the force majeure events during the period that impacted OpCo's production facilities.

Gross Profit.

Gross profit increased to $218.7 million for the six months ended June 30, 2021 from $193.6 million for the six months ended June 30, 2020.

The gross profit margin in the six months ended June 30, 2021 was 37.0%, as compared to 39.6% for the six months ended June 30, 2020.

The six months ended June 30, 2021, gross profit margin was lower mainly due to increased ethane feedstock and natural gas costs, partially offset by higher prices for ethylene sold to third parties and the buyer deficiency fee and Shortfall recognized during the period compared to the six months ended June 30, 2020.

Selling, General and Administrative Expenses.

Selling, general and administrative expenses increased by $4.6 million, or 37.4%, to $16.9 million in the six months ended June 30, 2021 as compared to $12.3 million in the six months ended June 30, 2020.

The increase in the six months ended June 30, 2021 was mainly attributable to higher service costs as compared to the six months ended June 30, 2020.

Interest Expense.

Interest expense decreased by $2.9 million to $4.5 million in the six months ended June 30, 2021 from $7.4 million in the six months ended June 30, 2020, largely due to a lower average interest rate on debt.

MLP Distributable Cash Flow.

MLP distributable cash flow increased by $6.6 million to $41.8 million in the six months ended June 30, 2021 from $35.2 million in the six months ended June 30, 2020.

The increase in the six months ended June 30, 2021, as compared to the prior-year period, was primarily attributable to the higher earnings at OpCo, partially offset by increased turnaround reserves and higher maintenance expense.

EBITDA increased by $24.3 million to $258.1 million in the six months ended June 30, 2021 from $233.8 million in the six months ended June 30, 2020.

The increase, as compared to the prior-year period, was primarily due to higher sales prices and volumes for ethylene sold to third parties and the buyer deficiency fee and Shortfall recognized during the period, partially offset by lower sales volumes to Westlake as a result of force majeure events and higher ethane feedstock and natural gas costs in the six months ended June 30, 2021.

CASH FLOW DISCUSSION FOR THE SIX MONTHS ENDED JUNE 30, 2021 AND 2020

Operating Activities

Operating activities provided cash of $155.4 million in the first three months of 2021 compared to cash provided by operating activities of $111.0 million in the first three months of 2020.

The $44.4 million increase in cash flows from operating activities was mainly due to an increase in cash provided for working capital, partially offset by a decrease in income from operations during the three months ended March 31, 2021 as compared to the prior-year period.

Changes in components of working capital, which we define for the purposes of this cash flow discussion as accounts receivable, net—Westlake, accounts receivable, net—third parties, inventories, prepaid expenses and other current assets less accounts payable—Westlake, accounts payable—third parties and accrued liabilities, provided cash of $51.5 million in the first three months of 2021 as compared to $8.7 million of cash used in the first three months of 2020, resulting in an overall favorable change of $60.2 million.

The favorable change in working capital was mainly attributable to a favorable change in Westlake, net accounts receivable due to the receipt of the buyer deficiency fee related to the force majeure events in 2020 by the Partnership in January 2021, partially offset by unfavorable changes in accounts receivable, net—third parties, accounts payable and accrued and other liabilities.

Operating activities provided cash of $287.1 million in the first six months of 2021 compared to cash provided by operating activities of $223.7 million in the first six months of 2020.

The $63.4 million increase in cash flows from operating activities was mainly due to an increase in cash provided for working capital and income from operations during the six months ended June 30, 2021 as compared to the prior-year period.

Changes in components of working capital, which we define for the purposes of this cash flow discussion as accounts receivable, net—Westlake, accounts receivable, net—third parties, inventories, prepaid expenses and other current assets less accounts payable—Westlake, accounts payable—third parties and accrued liabilities, provided cash of $35.0 million in the first six months of 2021 as compared to $2.1 million of cash used in the first six months of 2020, resulting in an overall favorable change of $37.1 million.

The favorable change in working capital was mainly attributable to a favorable change in Westlake, net accounts receivable due to the receipt of the buyer deficiency fee recognized in 2020 related to the force majeure events partially offset by unfavorable changes in accounts receivable, net—third parties due to higher sales prices in the six months ended June 30, 2021.

Investing Activities

Net cash used for investing activities during the first three months of 2021 was $76.6 million as compared to net cash used for investing activities of $11.0 million in the first three months of 2020, mainly due to increased net cash used under the Investment Management Agreement in the first three months of 2021, as compared to the prior-year period.

Capital expenditures during the first three months of 2021 and 2020 were primarily related to projects to improve production capacity or reduce costs, maintenance and safety and environmental projects at our facilities.

Net cash used for investing activities during the first six months of 2021 was $126.2 million as compared to net cash used for investing activities of $29.6 million in the first six months of 2020, mainly due to increased net cash used under the Investment Management Agreement in the first six months of 2021, as compared to the prior-year period.

Capital expenditures during the first six months of 2021 and 2020 were primarily related to projects to improve production capacity or reduce costs, maintenance and safety and environmental projects at our facilities.

Financing Activities

Net cash used for financing activities during the first three months of 2021 was $78.7 million as compared to net cash used by financing activities of $95.8 million in the first three months of 2020.

The outflows during the first three months of 2021 were related to the distribution of $62.1 million to Westlake and of $16.6 million to other unitholders by the Partnership.

The cash outflows during the first three months of 2020 were related to the distribution of $79.2 million to Westlake and of $16.6 million to other unitholders by the Partnership.

Net cash used for financing activities during the first six months of 2021 was $160.4 million as compared to net cash used by financing activities of $190.4 million in the first six months of 2020.

The outflows during the first six months of 2021 were related to the distribution of $127.3 million to Westlake and of $33.2 million to other unitholders by the Partnership.

The cash outflows during the first six months of 2020 were related to the distribution of $157.2 million to Westlake and of $33.2 million to other unitholders by the Partnership.

LIQUIDITY AND CAPITAL RESOURCES

2 unchanged sentences

The Partnership intends to use the net proceeds of sales of the common units, if any, for general partnership purposes, including the funding of potential drop-downs and other acquisitions.

No common units had been issued under the ATM Program as of March 31, 2021.

No common units had been issued under the ATM Program as of June 30, 2021.

Based on the terms of our cash distribution policy, we expect that we will distribute to our partners most of the excess cash generated by our operations.

9 unchanged sentences

Westlake's credit facility and various indentures do not prevent OpCo from making distributions to us.

On May 3, 2021, the board of directors of Westlake Chemical Partners GP LLC, our general partner, approved a quarterly distribution of $0.4714 per unit payable on May 27, 2021 to unitholders of record as of May 13, 2021, which equates to a total amount of approximately $16.6 million per quarter, or approximately $66.4 million per year in aggregate, based on the number of common units outstanding on March 31, 2021.

On August 2, 2021, the board of directors of Westlake Chemical Partners GP LLC, our general partner, approved a quarterly distribution of $0.4714 per unit payable on August 26, 2021 to unitholders of record as of August 12, 2021, which equates to a total amount of approximately $16.6 million per quarter, or approximately $66.4 million per year in aggregate, based on the number of common units outstanding on June 30, 2021.

We do not have a legal or contractual obligation to pay distributions on a quarterly basis or any other basis at our minimum quarterly distribution rate or any other rate.

1 unchanged sentence

Westlake has historically funded expansion capital expenditures related to Lake Charles Olefins and Calvert City Olefins.

Total capital expenditures for the three months ended March 31, 2021 and 2020 were $12.7 million and $12.0 million, respectively.

No funding was required by OpCo to fund capital expenditures during the three months ended March 31, 2021 and 2020.

Total capital expenditures for the six months ended June 30, 2021 and 2020 were $27.3 million and $20.6 million, respectively.

No funding was required by OpCo to fund capital expenditures during the six months ended June 30, 2021 and 2020.

We expect that Westlake will loan additional cash to OpCo to fund its expansion capital expenditures in the future, but Westlake is under no obligation to do so.

Cash and Cash Equivalents

As of March 31, 2021, our cash and cash equivalents totaled $17.3 million.

As of June 30, 2021, our cash and cash equivalents totaled $17.7 million.

In addition, we have cash invested under the Investment Management Agreement (as described below) and a revolving credit facility with Westlake available to supplement cash if needed, as described under "Indebtedness" below.

1 unchanged sentence

Per the terms of the Investment Management Agreement, the Partnership earns a market return plus five basis points and Westlake provides daily availability of the invested cash to meet any liquidity needs of the Partnership or OpCo.

The Partnership had $187.2 million of cash invested under the Investment Management Agreement at March 31, 2021.

The Partnership had $222.2 million of cash invested under the Investment Management Agreement at June 30, 2021.

OpCo Revolver

1 unchanged sentence

The OpCo Revolver is scheduled to mature on September 25, 2023.

As of March 31, 2021, outstanding borrowings under the OpCo Revolver totaled $22.6 million and bore interest at the LIBOR rate plus 2.0%, which is accrued in arrears quarterly.

As of June 30, 2021, outstanding borrowings under the OpCo Revolver totaled $22.6 million and bore interest at the LIBOR rate plus 2.0%, which is accrued in arrears quarterly.

In 2015, we entered into a senior, unsecured revolving credit agreement with an affiliate of Westlake (the "MLP Revolver").

7 unchanged sentences

The repayment of borrowings under the MLP Revolver is subject to acceleration upon the occurrence of an event of default.

As of March 31, 2021, outstanding borrowings under the MLP Revolver totaled $377.1 million and bore interest at the LIBOR rate plus 2.0%, which is accrued in arrears quarterly.

As of June 30, 2021, outstanding borrowings under the MLP Revolver totaled $377.1 million and bore interest at the LIBOR rate plus 2.0%, which is accrued in arrears quarterly.

We intend to use the MLP Revolver to purchase additional limited partnership interests in OpCo in the future, in the event OpCo desires to sell such additional interests to us, for other acquisitions and for general corporate purposes.

22 unchanged sentences

• turnaround activities and the variability of OpCo's cash flow;

• receipt of any buyer deficiency fee under the Ethylene Sales Agreement;

• receipt of any buyer deficiency fee and Shortfall under the Ethylene Sales Agreement;

• compliance with present and future environmental regulations and costs associated with environmentally related penalties, capital expenditures, remedial actions and proceedings, including any new laws, regulations or treaties that may come into force to limit or control carbon dioxide and other greenhouse gas emissions or to address other issues of climate change;

30 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis