What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2023-11-02 compared with 2023-08-03 · 80 added, 87 removed, 228 unchanged (42% of the section changed)

63 unchanged sentences

Reconciliations for each of MLP distributable cash flow and EBITDA are included in the "Results of Operations" section below.

Recent Development

Calvert City Olefins Turnaround

During May 2023, we performed our planned major maintenance activities, or turnaround, of OpCo's Calvert City Olefins production facility located at Westlake's Calvert City, Kentucky site.

Results of Operations

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

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

14 unchanged sentences

Net income attributable to noncontrolling interest in OpCo 67,647 63,548 207,585 196,180

63,378 68,001 139,938 132,632

Net income attributable to Westlake Chemical Partners LP $ 13,206 $ 14,757 $ 39,984 $ 47,389

$ 11,886 $ 16,438 $ 26,778 $ 32,632

MLP distributable cash flow (1)

3 unchanged sentences

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

Three Months Ended June 30, 2023 Six Months Ended June 30, 2023

Three Months Ended September 30, 2023 Nine Months Ended September 30, 2023

Sales Price Volume Average

1 unchanged sentence

Net sales percentage change from prior-year period due to average sales price and volume -27.7 % +7.8 % -27.0 % +0.7 %

Three Months Ended June 30, 2023 Six Months Ended June 30, 2023

Three Months Ended September 30, 2023 Nine Months Ended September 30, 2023

Domestic US prices percentage change from prior-year period for fuel cost and feedstock

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 June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

5 unchanged sentences

Depreciation, amortization and disposition of property, plant and equipment 32,242 30,349 86,340 96,070

27,095 31,469 54,098 65,722

Contribution to turnaround reserves (7,565) (7,323) (21,838) (21,811)

4 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 June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

11 unchanged sentences

EBITDA $ 115,738 $ 111,825 $ 349,947 $ 344,776

For the quarter ended June 30, 2023, net income was $75.3 million on net sales of $264.2 million.

This represents a decrease in net income of $9.1 million as compared to net income of $84.4 million on net sales of $448.8 million for the quarter ended June 30, 2022.

Net income attributable to the Partnership for the second quarter of 2023 was $11.9 million as compared to $16.4 million for the second quarter of 2022, a decrease of $4.5 million.

Income from operations was $80.5 million for the second quarter of 2023 as compared to $87.4 million for the second quarter of 2022.

Income from operations, net income and net income attributable to the Partnership for the second quarter of 2023 as compared to the second quarter of 2022 were lower primarily due to lower ethylene and co-products sales prices and lower volumes due to the planned Calvert City Olefins turnaround in the second quarter of 2023 compared to the second quarter of 2022, partially offset by lower ethane feedstock costs and natural gas prices.

Net income attributable to the Partnership was also impacted by higher interest expense attributable to the Partnership for the second quarter of 2023 as compared to the second quarter of 2022, primarily due to a higher average interest rate on debt owed to Westlake.

Net sales for the second quarter of 2023 decreased by $184.6 million as compared to net sales for the second quarter of 2022, mainly due to lower ethylene and co-products sales prices and lower volumes due to the turnaround during the second quarter of 2023 as compared to the second quarter of 2022.

For the six months ended June 30, 2023, net income was $166.7 million on net sales of $571.9 million.

This represents an increase in net income of $1.4 million as compared to net income of $165.3 million on net sales of $811.2 million for the six months ended June 30, 2022.

Net income attributable to the Partnership for the six months ended June 30, 2023 was $26.8 million as compared to $32.6 million for the six months ended June 30, 2022, a decrease of $5.8 million.

Income from operations was $178.7 million for the six months ended June 30, 2023 as compared to $170.6 million for the six months ended June 30, 2022.

Income from operations and net income for the six months ended June 30, 2023 as compared to the six months ended June 30, 2022 were higher primarily due to lower ethane feedstock costs and natural gas prices in the six months ended June 30, 2023 compared to the six months ended June 30, 2022, partially offset by lower ethylene and co-products sales prices and lower volumes due to the turnaround.

Net income attributable to the Partnership for the six months ended June 30, 2023 decreased as compared to the six months ended June 30, 2022 primarily due to higher interest expense attributable to the Partnership, partially offset by the higher income from operations as discussed above.

N et sales for the six months ended June 30, 2023 decreased by $239.3 million as compared t o net sales for the six months ended June 30, 2022, mainly due to lower ethylene and co-products sales prices and lower volumes due to the turnaround during the six months ended June 30, 2023 as compared to the six months ended June 30, 2022.

For the quarter ended September 30, 2023, net income was $80.9 million on net sales of $321.7 million.

This represents an increase in net income of $2.6 million as compared to net income of $78.3 million on net sales of $415.1 million for the quarter ended September 30, 2022.

Net income attributable to the Partnership for the third quarter of 2023 was $13.2 million as compared to $14.8 million for the third quarter of 2022, a decrease of $1.6 million.

Income from operations was $86.2 million for the third quarter of 2023 as compared to $81.8 million for the third quarter of 2022.

Income from operations and net income for the third quarter of 2023 as compared to the third quarter of 2022 were higher primarily due to lower ethane feedstock and natural gas costs in the third quarter of 2023 compared to the third quarter of 2022, partially offset by lower ethylene and co-products sales prices.

Net income attributable to the Partnership for the third quarter of 2023 decreased as compared to the third quarter of 2022, primarily due to higher interest expense attributable to the Partnership, partially offset by the higher income from operations as discussed above.

Net sales for the third quarter of 2023 decreased by $93.4 million as compared to net sales for the third quarter of 2022, mainly due to lower ethylene and co-products sales prices during the third quarter of 2023 as compared to the third quarter of 2022, partially offset by higher ethylene and co-products sales volumes.

For the nine months ended September 30, 2023, net income was $247.6 million on net sales of $893.5 million.

This represents an increase in net income of $4.0 million as compared to net income of $243.6 million on net sales of $1,226.3 million for the nine months ended September 30, 2022.

Net income attributable to the Partnership for the nine months ended September 30, 2023 was $40.0 million as compared to $47.4 million for the nine months ended September 30, 2022, a decrease of $7.4 million.

Income from operations was $264.9 million for the nine months ended September 30, 2023 as compared to $252.4 million for the nine months ended September 30, 2022.

Income from operations and net income for the nine months ended September 30, 2023 as compared to the nine months ended September 30, 2022 were higher primarily due to lower ethane feedstock and natural gas costs in the nine months ended September 30, 2023 compared to th e nine months ended September 30, 2022 , partially offset by lower ethylene and co-products sales prices.

Net income attributable to the Partnership for the nine months ended September 30, 2023 decreased as compared to the nine months ended September 30, 2022, primarily due to higher interest expense attributable to the Partnership, partially offset by the higher income from operations as discussed above.

N et sales for the nine months ended September 30, 2023 decreased by $332.8 million as compared t o net sales for the nine months ended September 30, 2022, mainly due to lower ethylene and co-products sales prices during the nine months ended September 30, 2023 as compared to the nine months ended September 30, 2022.

RESULTS OF OPERATIONS

Second Quarter 2023 Compared with Second Quarter 2022

Total net sales decreased by $184.6 million, or 41.1%, to $264.2 million in the second quarter of 2023 from $448.8 million in the second quarter of 2022.

The decrease in net sales in the second quarter of 2023 was primarily due to lower ethylene and co-products sales prices and volumes during the second quarter of 2023 as compared to the second quarter of 2022.

The lower average sales prices in the second quarter of 2023 contributed to a 33.0% decrease in net sales compared to the second quarter of 2022.

The lower sales volumes in the second quarter of 2023 contributed to an 8.1% decrease in net sales compared to the second quarter of 2022.

The lower sales volumes were primarily due to the turnaround in the second quarter of 2023.

Third Quarter 2023 Compared with Third Quarter 2022

Total net sales decreased by $93.4 million, or 22.5%, to $321.7 million in the third quarter of 2023 from $415.1 million in the third quarter of 2022.

The decrease in net sales in the third quarter of 2023 was primarily due to lower ethylene and co-products sales prices in the third quarter of 2023 as compared to the third quarter of 2022, partially offset by higher ethylene and co-products sales volumes.

Additionally, net sales in the third quarter of 2022 included a buyer deficiency fee recognized in the period.

Lower average sales prices in the third quarter of 2023 contributed to a 27.7% decrease in net sales compared to the third quarter of 2022.

Higher sales volumes in the third quarter of 2023 contributed to a 7.8% increase in net sales compared to the third quarter of 2022.

Gross Profit.

Gross profit decreased to $87.7 million in the second quarter of 2023 from $97.3 million in the second quarter of 2022.

The gross profit margin in the second quarter of 2023 was 33.2%, as compared to 21.7% for the second quarter of 2022.

The increase in gross profit margin was primarily due to lower ethane feedstock costs and natural gas prices in the second quarter of 2023 as compared to the second quarter of 2022.

Gross profit increased to $93.0 million in the third quarter of 2023 from $90.5 million in the third quarter of 2022.

Gross profit margin in the third quarter of 2023 was 28.9%, as compared to 21.8% for the third quarter of 2022.

The increase in gross profit margin was primarily due to lower ethane feedstock and natural gas costs in the third quarter of 2023 as compared to the third quarter of 2022.

Selling, General and Administrative Expenses.

Selling, general and administrative expenses decreased by $2.7 million, or 27.3%, to $7.2 million in the second quarter of 2023 as compared to $9.9 million in the second quarter of 2022.

The decrease in the second quarter of 2023 was mainly attributable to the provision for credit losses recognized in the second quarter of 2022.

Selling, general and administrative expenses decreased by $2.0 million, or 23.0%, to $6.7 million in the third quarter of 2023 as compared to $8.7 million in the third quarter of 2022.

The decrease in the third quarter of 2023 was mainly attributable to a reduction in the provision for credit losses recognized in the third quarter of 2022.

Interest Expense—Westlake.

Interest expense of $6.1 million in the second quarter of 2023 increased from $2.9 million in the second quarter of 2022 due to a higher average interest rate on debt owed to Westlake.

Interest expense of $6.4 million in the third quarter of 2023 increased from $3.6 million in the third quarter of 2022 due to a higher average interest rate on debt owed to Westlake.

Other Income, net .

Other income, net of $1.1 million in the second quarter of 2023 primarily represents interest earned on the balance with Westlake under the Investment Management Agreement.

Other income, net of $1.3 million in the third quarter of 2023 primarily represents interest earned on the balance with Westlake under the Investment Management Agreement.

MLP Distributable Cash Flow.

MLP distributable cash flow decreased by $4.6 million to $15.0 million in the second quarter of 2023 from $19.6 million in the second quarter of 2022.

The decrease in the second quarter of 2023, as compared to the prior-year period, was primarily attributable to higher interest expense and decreased earnings at OpCo, partially offset by decreased maintenance capital expenditures.

EBITDA decreased by $9.9 million to $108.6 million in the second quarter of 2023 from $118.5 million in the second quarter of 2022.

The decrease was primarily due to lower ethylene and co-products sales prices and volumes during the second quarter of 2023 as compared to the second quarter of 2022, partially offset by lower ethane feedstock costs and natural gas prices.

Six Months Ended June 30, 2023 Compared with Six Months Ended June 30, 2022

Total net sales decreased by $239.3 million, or 29.5%, to $571.9 million in the six months ended June 30, 2023 from $811.2 million in the six months ended June 30, 2022.

The decrease in net sales in the six months ended June 30, 2023 was primarily due to lower ethylene and co-products sales prices and volumes during the six months ended June 30, 2023 as co mpared to the six months ended June 30, 2022.

The lower average sales prices in the six months ended June 30, 2023 contributed to a 26.8% decrease in net sales compared to the six months ended June 30, 2022.

The lower sales volumes in the six months ended June 30, 2023 contributed to a 2.7% decrease in net sales as compared to the six months ended June 30, 2022.

The lower sales volumes were primarily due to the turnaround in the six months ended June 30, 2023 .

MLP distributable cash flow decreased by $3.1 million to $13.6 million in the third quarter of 2023 from $16.7 million in the third quarter of 2022.

The decrease in the third quarter of 2023, as compared to the prior-year period, was primarily attributable to increased maintenance capital expenditures and higher interest expense, partially offset by increased earnings at OpCo.

EBITDA increased by $3.9 million to $115.7 million in the third quarter of 2023 from $111.8 million in the third quarter of 2022.

The increase was primarily due to lower ethane feedstock and natural gas costs in the third quarter of 2023 as compared to the third quarter of 2022, partially offset by lower ethylene and co-products sales prices.

Nine Months Ended September 30, 2023 Compared with Nine Months Ended September 30, 2022

Total net sales decreased by $332.8 million, or 27.1%, to $893.5 million in the nine months ended September 30, 2023 from $1,226.3 million in the nine months ended September 30, 2022.

The decrease in net sales in the nine months ended September 30, 2023 was primarily due to lower ethylene and co-products sales prices during the nine months ended September 30, 2023 as co mpared to the nine months ended September 30, 2022.

Lower average sales prices in the nine months ended September 30, 2023 contributed to a 27.0% decrease in net sales compared to the nine months ended September 30, 2022.

Higher sales volumes in the nine months ended September 30, 2023 contributed to a 0.7% increase in net sales as c ompared to the nine months ended September 30, 2022.

Gross Profit.

Gross profit increased to $193.8 million in the six months ended June 30, 2023 from $188.7 million in the six months ended June 30, 2022.

The gross profit margin in the six months ended June 30, 2023 was 33.9%, as compared to 23.3% for the six months ended June 30, 2022.

The increase in gross profit margin was primarily due to lower ethane feedstock costs and natural gas prices in the six months ended June 30, 2023 compared to the six months ended June 30, 2022.

Gross profit increased to $286.8 million in the nine months ended September 30, 2023 from $279.2 million in the nine months ended September 30, 2022.

The gross profit margin in the nine months ended September 30, 2023 was 32.1%, as compared to 22.8% for the nine months ended September 30, 2022.

The increase in gross profit margin was primarily due to lower ethane feedstock and natural gas costs in the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022.

Selling, General and Administrative Expenses.

Selling, general and administrative expenses decreased by $3.0 million, or 16.6% , to $15.1 million in the six months ended June 30, 2023 as compared to $18.1 million in the six months ended June 30, 2022.

The decrease in the six months ended June 30, 2023 was mainly attributable to the provision for credit losses recognized in the six months ended June 30, 2022.

Selling, general and administrative expenses decreased by $4.9 million, or 18.3% , to $21.9 million in the nine months ended September 30, 2023 as compared to $26.8 million in the nine months ended September 30, 2022.

The decrease in the nine months ended September 30, 2023 was mainly attributable to a reduction in the provision for credit losses recognized in the nine months ended September 30, 2022.

Interest Expense —Westlake .

Interest expense of $13.4 million in the six months ended June 30, 2023 increased from $5.1 million in the six months ended June 30, 2022 due to a higher average interest rate on debt owed to Westlake.

Interest expense of $19.9 million in the nine months ended September 30, 2023 increased from $8.7 million in the nine months ended September 30, 2022 due to a higher average interest rate on debt owed to Westlake.

Other Income, net .

Other income, net of $1.9 million in the six months ended June 30, 2023 primarily represents interest earned on the balance with Westlake under the Investment Management Agreement.

Other income, net of $3.2 million in the nine months ended September 30, 2023 primarily represents interest earned on the balance with Westlake under the Investment Management Agreement.

MLP Distributable Cash Flow.

MLP distributable cash flow decreased by $6.4 million to $32.5 million in the six months ended June 30, 2023 from $38.9 million in the six months ended June 30, 2022.

The decrease in the six months ended June 30, 2023, as compared to the prior-year period, was primarily attributable to higher interest expense, partially offset by increased earnings at OpCo and decreased maintenance capital expenditures.

EBITDA increased by $1.2 million to $234.2 million in the six months ended June 30, 2023 from $233.0 million in the six months ended June 30, 2022.

The increase was primarily due to lower ethane feedstock costs and natural gas prices during the six months ended June 30, 2023 as compared to the six months ended June 30, 2022, partially offset by lower ethylene and co-products sales prices and volumes.

CASH FLOW DISCUSSION FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022

MLP distributable cash flow decreased by $9.4 million to $46.2 million in the nine months ended September 30, 2023 from $55.6 million in the nine months ended September 30, 2022.

The decrease in the nine months ended September 30, 2023, as compared to the prior-year period, was primarily attributable to higher interest expense, partially offset by increased earnings at OpCo.

EBITDA increased by $5.1 million to $349.9 million in the nine months ended September 30, 2023 from $344.8 million in the nine months ended September 30, 2022.

The increase was primarily due to lower ethane feedstock and natural gas costs in the nine months ended September 30, 2023 as compared to the nine months ended September 30, 2022, partially offset by lower ethylene and co-products sales prices.

CASH FLOW DISCUSSION FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022

Operating Activities

Operating activities provided cash of $243.4 million in the first six months of 2023 compared to cash provided by operating activities of $225.7 million in the first six months of 2022.

The $17.7 million increase in cash flows from operating activities was mainly due to an increase in cash provided by working capital during the six months ended June 30, 2023 as compared to the prior-year period, which was partially offset by the cash used for the Calvert City Olefins turnaround activity.

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 and other liabilities, provided cash of $49.7 million in the first six months of 2023 as compared to $6.1 million of cash used in the first six months of 2022, resulting in an overall favorable change of $55.8 million.

The favorable change in working capital was mainly attributable to a favorable change in accounts receivable—third parties, accounts payable—third parties and accrued and other liabilities primarily due to the timing of payment of accruals and the impact on accounts receivable of the Petro 2 turnaround activities in 2021, which impacted the changes in working capital in the first six months of 2022.

These favorable changes were partially offset by an unfavorable change in net accounts receivable—Westlake primarily due to an unfavorable change in accounts payable—Westlake due to fluctuating ethane feedstock costs and a smaller buyer deficiency fee and Shortfall collected in the first six months of 2023 as compared to the first six months of 2022.

Operating activities provided cash of $344.3 million in the first nine months of 2023 compared to cash provided by operating activities of $341.2 million in the first nine months of 2022.

The $3.1 million increase in cash flows from operating activities was mainly due to an increase of $37.2 million in cash provided by working capital during the nine months ended September 30, 2023 as compared to the prior-year period, which was partially offset by cash used for the Calvert City Olefins turnaround activity.

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 and other liabilities, provided cash of $39.5 million in the first nine months of 2023 as compared to $2.3 million of cash provided in the first nine months of 2022, resulting in an overall favorable change of $37.2 million.

The favorable change in working capital was mainly attributable to a favorable change in accounts receivable—third parties, accounts payable—third parties and accrued and other liabilities, primarily due to the timing of payment of accruals and the impact on accounts receivable of the Petro 2 turnaround activities in 2021, which impacted the changes in working capital in the first nine months of 2022.

These favorable changes were partially offset by an unfavorable change in accounts payable—Westlake due to fluctuating ethane feedstock costs.

Additionally, there was an unfavorable change in accounts receivable, net—Westlake due to a smaller buyer deficiency fee and Shortfall collected in the first nine months of 2023 as compared to the first nine months of 2022, which was partially offset by the impact on accounts receivable, net—Westlake of the Petro 2 turnaround activities in 2021.

Investing Activities

Net cash used for investing activities in the first six months of 2023 was $46.3 million as compared to net cash used for investing activities of $55.3 million in the first six months of 2022.

The $9.0 million decrease in net cash used for investing activities was mainly due to the decrease in capital expenditures in the first six months of 2023 as compared to the prior-year period, partially offset by an increase in net cash invested under the Investment Management Agreement.

Capital expenditures in the first six months of 2023 and 2022 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 in the first nine months of 2023 was $53.1 million as compared to net cash used for investing activities of $74.5 million in the first nine months of 2022.

The $21.4 million decrease in net cash used for investing activities was mainly due to a decrease in capital expenditures and a decrease in net cash invested under the Investment Management Agreement in the first nine months of 2023 as compared to the prior-year period.

Capital expenditures in the first nine months of 2023 and 2022 were primarily related to projects to increase production capacity or reduce costs, maintenance and safety and environmental projects at our facilities.

Financing Activities

Net cash used for financing activities in the first six months of 2023 was $202.5 million as compared to net cash used for financing activities of $169.0 million in the first six months of 2022.

The outflows in the first six months of 2023 were related to distributions of $169.3 million to the noncontrolling interest retained in OpCo by Westlake and of $33.2 million to unitholders by the Partnership.

The cash outflows in the first six months of 2022 were related to distributions of $135.8 million to the noncontrolling interest retained in OpCo by Westlake and of $33.2 million to unitholders by the Partnership.

Net cash used for financing activities in the first nine months of 2023 was $290.1 million as compared to net cash used for financing activities of $264.3 million in the first nine months of 2022.

The outflows in the first nine months of 2023 were related to distributions of $240.3 million to the noncontrolling interest retained in OpCo by Westlake and of $49.8 million to unitholders by the Partnership.

The cash outflows in the first nine months of 2022 were related to distributions of $214.5 million to the noncontrolling interest retained in OpCo by Westlake and of $49.8 million to 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, which may include the funding of potential drop-downs and other acquisitions.

No common units had been issued under the ATM Program as of June 30, 2023.

No common units had been issued under the ATM Program as of September 30, 2023.

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.

To the extent we do not generate sufficient cash flow to fund capital expenditures, we expect to fund them primarily from external sources, including borrowing directly from Westlake, as well as future issuances of equity interests or debt.

The Partnership maintains separate bank accounts, but Westlake continues to provide treasury services on our behalf under the Services and Secondment Agreement.

The Partnership maintains separate bank accounts, but Westlake continues to provide treasury services on our behalf under the Omnibus Agreement.

Our sources of liquidity include cash generated from operations, the OpCo Revolver, the MLP Revolver and, if necessary and possible under then current market conditions, the issuance of additional equity interests or debt.

6 unchanged sentences

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

On August 1, 2023, 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 25, 2023 to unitholders of record as of August 11, 2023, 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, 2023.

On October 31, 2023, the board of directors of Westlake Chemical Partners GP LLC, our general partner, approved a quarterly distribution of $0.4714 per unit payable on November 27, 2023 to unitholders of record as of November 10, 2023, 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 September 30, 2023.

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.

No such funding was required by OpCo during the six months ended June 30, 2023 and 2022.

Total capital expenditures for the six months ended June 30, 2023 and 2022 were $17.2 million and $32.3 million, respectively.

No such funding was required by OpCo during the nine months ended September 30, 2023 and 2022.

Total capital expenditures for the nine months ended September 30, 2023 and 2022 were $34.0 million and $45.5 million, respectively.

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 June 30, 2023, our cash and cash equivalents totaled $59.4 million.

As of September 30, 2023, our cash and cash equivalents totaled $65.9 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 $94.2 million of cash invested under the Investment Management Agreement at June 30, 2023.

The Partnership had $84.4 million of cash invested under the Investment Management Agreement at September 30, 2023.

OpCo Revolver

5 unchanged sentences

The Applicable Margin under the OpCo Revolver is 1.75%.

As of June 30, 2023, outstanding borrowings under the OpCo Revolver totaled $22.6 million and bore interest at SOFR plus the Applicable Margin and credit spread adjustment, which is accrued in arrears quarterly.

As of September 30, 2023, outstanding borrowings under the OpCo Revolver totaled $22.6 million and bore interest at SOFR plus the Applicable Margin and credit spread adjustment, which is accrued in arrears quarterly.

In 2015, we entered into a senior, unsecured revolving credit agreement with an affiliate of Westlake, as amended in August and November 2017, March 2020 and July 2022 (the "MLP Revolver").

1 unchanged sentence

On July 12, 2022, the Partnership entered into the Fourth Amendment (the "MLP Revolver Amendment") to the MLP Revolver.

The MLP Revolver Amendment, among other things, extended the maturity date to July 12, 2027 and provided for the replacement of LIBOR with the SOFR as the reference rate.

The MLP Revolver Amendment, among other things, extended the maturity date to July 12, 2027 and provided for the replacement of LIBOR with SOFR as the reference rate.

Borrowings under the MLP Revolver bear interest at a variable rate of either (a) SOFR plus the Applicable Margin plus a 0.10% credit spread adjustment or, if SOFR is no longer available, (b) the Alternate Base Rate plus the Applicable Margin minus 1.0%.

4 unchanged sentences

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

As of June 30, 2023, outstanding borrowings under the MLP Revolver totaled $377.1 million and bore interest at SOFR plus the Applicable Margin and credit spread adjustment, 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.

As of September 30, 2023, outstanding borrowings under the MLP Revolver totaled $377.1 million and bore interest at SOFR plus the Applicable Margin and credit spread adjustment, which is accrued in arrears quarterly.

Off-Balance Sheet Arrangements

9 unchanged sentences

• industry market outlook, including prices and margins in third-party ethylene and co-products sales;

• widespread outbreak of an illness or any other communicable disease, or any other public health crisis, including the coronavirus ("COVID-19") pandemic and efforts to contain its transmission;

• our plans and Westlake's plans to respond to the challenges presented by the COVID-19 pandemic;

• the impact of ongoing supply chain constraints and workforce availability caused by the COVID-19 pandemic and the conflict between Russia and Ukraine;

• widespread outbreak of an illness or any other communicable disease, or any other public health crisis;

• the impact of ongoing supply chain constraints caused by the conflicts in the Middle East and between Russia and Ukraine;

• the parties to whom we will sell ethylene and on what basis;

20 unchanged sentences

• lower crude oil prices reducing the cost advantage of ethane-based ethylene producers;

• uncertainties associated with the United States and worldwide economies, including those due to political tensions and unrest in the Middle East and elsewhere, including the conflict between Russia and Ukraine;

• uncertainties associated with pandemic infectious diseases, particularly COVID-19;

• uncertainties associated with the United States and worldwide economies, including those due to political tensions and conflict in the Middle East and elsewhere, including the conflict between Russia and Ukraine;

• uncertainties associated with pandemic infectious diseases;

• uncertainties associated with climate change;

21 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