What changed in this filing

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Item 1. Financial Statements

2024-11-06 compared with 2024-08-09 · 84 added, 54 removed, 370 unchanged (27% of the section changed)

2 unchanged sentences

CONSOLIDATED BALANCE SHEETS

September 30,

2024 December 31,

23 unchanged sentences

Common unitholders—publicly and privately held ( 21,116,326 and 21,105,904 units

issued and outstanding at June 30, 2024 and December 31, 2023, respectively)

issued and outstanding at September 30, 2024 and December 31, 2023, respectively)

472,296 473,513

Common unitholder—Westlake ( 14,122,230 and 14,122,230 units issued and outstanding

at June 30, 2024 and December 31, 2023, respectively)

at September 30, 2024 and December 31, 2023, respectively)

48,020 48,993

7 unchanged sentences

CONSOLIDATED STATEMENTS OF OPERATIONS

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

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

2024 2023 2024 2023

39 unchanged sentences

Balances at June 30, 2024 $ 471,199 $ 47,408 $ ( 242,572 ) $ 558,812 $ 834,847

Net income 10,867 7,269 — 85,964 104,100

Units issued for vested phantom units 183 — — — 183

Distribution to unitholders ( 9,953 ) ( 6,657 ) — — ( 16,610 )

Distribution to noncontrolling interest retained in OpCo by Westlake — — — ( 84,706 ) ( 84,706 )

Balances at September 30, 2024 $ 472,296 $ 48,020 $ ( 242,572 ) $ 560,070 $ 837,814

The accompanying notes are an integral part of the consolidated financial statements.

17 unchanged sentences

$ 476,791 $ 51,282 $ ( 242,572 ) $ 582,457 $ 867,958

Net income 7,911 5,295 — 67,647 80,853

Units issued for vested phantom units 141 — — — 141

Distribution to unitholders ( 9,948 ) ( 6,658 ) — — ( 16,606 )

Distribution to noncontrolling interest retained in OpCo by Westlake — — — ( 71,074 ) ( 71,074 )

Balances at September 30, 2023

$ 474,895 $ 49,919 $ ( 242,572 ) $ 579,030 $ 861,272

The accompanying notes are an integral part of the consolidated financial statements.

1 unchanged sentence

CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended June 30,

Nine Months Ended September 30,

(in thousands of dollars)

4 unchanged sentences

Loss from disposition of property, plant and equipment 2,241 4,438

Other losses, net

Other gains, net

( 14 ) ( 86 )

Changes in operating assets and liabilities

19 unchanged sentences

Net cash used for financing activities ( 300,446 ) ( 290,146 )

Net increase (decrease) in cash and cash equivalents

7,380 ( 5,348 )

Net increase in cash and cash equivalents

Cash and cash equivalents at beginning of period 58,619 64,782

27 unchanged sentences

Westlake's retained interest of 77.2 % is recorded as noncontrolling interest in the Partnership's consolidated financial statements.

In the opinion of the Partnership's management, the accompanying unaudited consolidated interim financial statements reflect all adjustments (consisting only of normal recurring adjustments) that are necessary for a fair statement of the Partnership's financial position as of June 30, 2024, its results of operations for the three and six months ended June 30, 2024 and 2023 and the changes in its cash position for the six months ended June 30, 2024 and 2023.

In the opinion of the Partnership's management, the accompanying unaudited consolidated interim financial statements reflect all adjustments (consisting only of normal recurring adjustments) that are necessary for a fair statement of the Partnership's financial position as of September 30, 2024, its results of operations for the three and nine months ended September 30, 2024 and 2023 and the changes in its cash position for the nine months ended September 30, 2024 and 2023.

Results of operations and changes in cash position for the interim periods presented are not necessarily indicative of the results that will be realized for the fiscal year ending December 31, 2024 or any other interim period.

20 unchanged sentences

Accounts receivable—third parties consist of the following:

September 30,

2024 December 31,

4 unchanged sentences

Inventories consist of the following:

September 30,

2024 December 31,

3 unchanged sentences

Property, Plant and Equipment

Depreciation expense on property, plant and equipment of $ 21,830 and $ 20,928 is included in cost of sales in the consolidated statements of operations for the three months ended June 30, 2024 and 2023, respectively.

Depreciation expense on property, plant and equipment of $ 43,367 and $ 41,885 is included in cost of sales in the consolidated statements of operations for the six months ended June 30, 2024 and 2023 , respectively.

Depreciation expense on property, plant and equipment of $ 21,626 and $ 21,282 is included in cost of sales in the consolidated statements of operations for the three months ended September 30, 2024 and 2023, respectively.

Depreciation expense on property, plant and equipment of $ 64,993 and $ 63,167 is included in cost of sales in the consolidated statements of operations for the nine months ended September 30, 2024 and 2023 , respectively.

WESTLAKE CHEMICAL PARTNERS LP

2 unchanged sentences

Deferred Charges and Other Assets

Amortization expense on deferred charges and other assets of $ 6,485 and $ 6,112 is included in cost of sales in the consolidated statements of operations for the three months ended June 30, 2024 and 2023, respectively .

Amortization expense on deferred charges and other assets of $ 12,942 and $ 11,791 is included in cost of sales in the consolidated statements of operations for the six months ended June 30, 2024 and 2023 , respectively.

Amortization expense on deferred charges and other assets of $ 6,486 and $ 6,944 is included in cost of sales in the consolidated statements of operations for the three months ended September 30, 2024 and 2023, respectively .

Amortization expense on deferred charges and other assets of $ 19,428 and $ 18,735 is included in cost of sales in the consolidated statements of operations for the nine months ended September 30, 2024 and 2023 , respectively.

Distributions and Net Income Per Limited Partner Unit

On July 30, 2024, the board of directors of Westlake Chemical Partners GP LLC ("Westlake GP"), the Partnership's general partner, declared a quarterly cash distribution for the three months ended June 30, 2024 of $ 0.4714 per unit.

This distribution is payable on August 27, 2024 to unitholders of record as of August 12, 2024.

On October 30, 2024, the board of directors of Westlake Chemical Partners GP LLC ("Westlake GP"), the Partnership's general partner, declared a quarterly cash distribution for the three months ended September 30, 2024 of $ 0.4714 per unit.

This distribution is payable on November 27, 2024 to unitholders of record as of November 12, 2024.

Distributions are declared subsequent to quarter end;

therefore, the table below represents total cash distributions declared from earnings of the related periods pertaining to such distributions.

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

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

2024 2023 2024 2023

1 unchanged sentence

Limited partners' distribution declared on common units 16,611 16,607 49,826 49,814

Distribution in excess of net income $ ( 2,181 ) $ ( 4,718 ) $ ( 3,955 ) $ ( 6,429 )

Net income in excess of distribution (Distribution in excess of net income)

$ 1,525 $ ( 3,401 ) $ ( 2,430 ) $ ( 9,830 )

Net income per unit applicable to common limited partner units is computed by dividing the respective limited partners' interest in net income by the weighted-average number of common units outstanding for the period.

4 unchanged sentences

Basic and diluted net income per unit is the same because the Partnership does not have any potentially dilutive units outstanding for the periods presented.

Three Months Ended June 30, 2024

Three Months Ended September 30, 2024

Limited Partners' Common Units Incentive Distribution Rights Total

1 unchanged sentence

Distribution $ 16,611 $ — $ 16,611

Distribution in excess of net income ( 2,181 ) — ( 2,181 )

Net income in excess of distribution

1,525 — 1,525

Net income $ 18,136 $ — $ 18,136

6 unchanged sentences

(in thousands of dollars, except unit amounts and per unit data)

Three Months Ended June 30, 2023

Three Months Ended September 30, 2023

Limited Partners' Common Units Incentive Distribution Rights Total

7 unchanged sentences

Basic and diluted $ 0.37

Six Months Ended June 30, 2024

Nine Months Ended September 30, 2024

Limited Partners' Common Units Incentive Distribution Rights Total

7 unchanged sentences

Basic and diluted $ 1.35

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

Limited Partners' Common Units Incentive Distribution Rights Total

20 unchanged sentences

(in thousands of dollars, except unit amounts and per unit data)

The Partnership's distribution for the three months ended June 30, 2024 did not exceed the $ 1.2938 per unit threshold, and, as a result, no distribution was made with respect to the Partnership's incentive distribution rights to Westlake, as the holder of the Partnership's incentive distribution rights.

The Partnership's distribution for the three months ended September 30, 2024 did not exceed the $ 1.2938 per unit threshold, and, as a result, no distribution was made with respect to the Partnership's incentive distribution rights to Westlake, as the holder of the Partnership's incentive distribution rights.

Distributions Per Common Unit

Distributions per common unit for the three and six months ended June 30, 2024 and 2023 were as follows:

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

Distributions per common unit for the three and nine months ended September 30, 2024 and 2023 were as follows:

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

2024 2023 2024 2023

3 unchanged sentences

The Equity Distribution Agreement was amended on February 28, 2020 to reference a new shelf registration and subsequent renewals thereof for utilization under this agreement.

No common units were issued under this program as of June 30, 2024.

No common units were issued under this program as of September 30, 2024.

On March 29, 2019, the Partnership completed the issuance and sale of 2,940,818 common units at a price of $ 21.40 per unit through a private placement.

10 unchanged sentences

Sales to related parties were as follows:

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

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

2024 2023 2024 2023

Net sales—Westlake $ 215,799 $ 289,303 $ 690,535 $ 771,349

As a result of the Partnership's decision to postpone the previously announced maintenance turnaround at the Petro 1 facility from the third quarter of 2024 to the first quarter of 2025, OpCo's production is anticipated to result in "excess quantities" of ethylene for the current contract year.

Therefore, Net sales—Westlake was reduced by $ 5,885 during the three and nine months ended September 30, 2024 in connection with charges to Westlake, under the Ethylene Sales Agreement, for certain non-variable costs of production subject to reimbursement related to the "excess quantities".

WESTLAKE CHEMICAL PARTNERS LP

5 unchanged sentences

Charges from related parties for significant inputs included in cost of sales were as follows:

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

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

2024 2023 2024 2023

4 unchanged sentences

Charges from related parties included within selling, general and administrative expenses were as follows:

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

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

2024 2023 2024 2023

3 unchanged sentences

Charges from related parties for goods and services capitalized as assets were as follows:

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

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

2024 2023 2024 2023

3 unchanged sentences

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.

Accrued interest of $ 1,306 and $ 1,272 was included in the receivable under the Investment Management Agreement balance at June 30, 2024 and December 31, 2023, respectively.

Total interest earned related to the Investment Management Agreement was $ 1,306 and $ 1,058 for the three months ended June 30, 2024 and 2023, respectively, and $ 2,611 and $ 1,965 for the six months ended June 30, 2024 and 2023, respectively.

Accrued interest of $ 1,368 and $ 1,272 was included in the receivable under the Investment Management Agreement balance at September 30, 2024 and December 31, 2023, respectively.

Total interest earned related to the Investment Management Agreement was $ 1,368 and $ 1,186 for the three months ended September 30, 2024 and 2023, respectively, and $ 3,979 and $ 3,151 for the nine months ended September 30, 2024 and 2023, respectively.

The Partnership's receivable under the Investment Management Agreement was as follows:

September 30,

2024 December 31,

5 unchanged sentences

The Partnership's accounts receivable from Westlake result primarily from ethylene sales to Westlake and the buyer deficiency fee and shortfall fee recognized under the Ethylene Sales Agreement.

As a result of force majeure events in 2021, the Partnership recognized a shortfall fee of $ 58,906 during 2021, of which $ 189 remained to be collected by the Partnership as of December 31, 2023 and was received in the six months ended June 30, 2024.

The Partnership's accounts receivable from Westlake were as follows:

September 30,

2024 December 31,

2 unchanged sentences

The Partnership's accounts payable to Westlake result primarily from feedstock purchases under the Feedstock Supply Agreement and services provided under the Services and Secondment Agreement and the Omnibus Agreement.

As of September 30, 2024, accounts payable to Westlake also included $ 5,885 related to amounts charged to Westlake under the Ethylene Sales Agreement for certain non-variable costs of production subject to reimbursement as a result of OpCo's production of "excess quantities" of ethylene in the current contract year due to the Partnership's decision to postpone the previously announced maintenance turnaround at the Petro 1 facility from the third quarter of 2024 to the first quarter of 2025.

The Partnership's accounts payable to Westlake were as follows:

September 30,

2024 December 31,

2 unchanged sentences

OpCo is obligated to Westlake under various long-term and short-term noncancelable operating leases, primarily related to rail cars and land.

Operating lease rentals paid to Westlake for such leases were $ 430 and $ 310 for the three months ended June 30, 2024 and 2023, respectively, an d $ 855 and $ 1,047 for the six months ended June 30, 2024 and 2023 , respectively, an d are reflected in other charges from Westlake that are included in cost of sales.

Operating lease rentals paid to Westlake for such leases were $ 471 and $ 433 for the three months ended September 30, 2024 and 2023, respectively, an d $ 1,326 and $ 1,480 for the nine months ended September 30, 2024 and 2023 , respectively, an d are reflected in other charges from Westlake that are included in cost of sales.

OpCo has two site lease agreements with Westlake, each of which has a term of 50 years.

Pursuant to the site lease agreements, OpCo pays Westlake one dollar per site per year.

WESTLAKE CHEMICAL PARTNERS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — Continued

(in thousands of dollars, except unit amounts and per unit data)

Debt Payable to Related Parties

See Note 9 for a description of related party debt payable balances.

Interest on related party debt payable balances, net of capitalized interest, for the three months ended June 30, 2024 and 2023 was $ 6,651 and $ 6,117 , respecti vely.

Interest on related party debt payable balances, net of capitalized interest, for the six months ended June 30, 2024 and 2023 was $ 13,232 and $ 13,432 , respectively.

Interest on related party debt payable balances, net of capitalized interest, for the three months ended September 30, 2024 and 2023 was $ 6,698 and $ 6,437 , respecti vely.

Interest on related party debt payable balances, net of capitalized interest, for the nine months ended September 30, 2024 and 2023 was $ 19,930 and $ 19,869 , respectively.

Interest on related party debt payable is presented as interest expense—Westlake in the consolidated statements of operations.

At June 30, 2024 and December 31, 2023, accrued interest on related party debt was $ 6,679 and $ 6,675 , respectively, and is reflected as a component of accrued and other liabilities in the consolidated balance sheets.

At September 30, 2024 and December 31, 2023, accrued interest on related party debt was $ 6,753 and $ 6,675 , respectively, and is reflected as a component of accrued and other liabilities in the consolidated balance sheets.

Debt payable to related parties was as follows:

September 30,

2024 December 31,

1 unchanged sentence

Major Customer and Concentration of Credit Risk

During the three months ended June 30, 2024 and 2023, Westlake accounted for approximately 84.3 % and 85.0 %, respectively, of the Partnership's net sale s.

During the six months ended June 30, 2024 and 2023 , Westlake accounted for approximately 83.5 % and 84.3 %, respectively, of the Partnership's net sales.

WESTLAKE CHEMICAL PARTNERS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — Continued

(in thousands of dollars, except unit amounts and per unit data)

During the three months ended September 30, 2024 and 2023, Westlake accounted for approximately 77.9 % and 89.9 %, respectively, of the Partnership's net sale s.

During the nine months ended September 30, 2024 and 2023 , Westlake accounted for approximately 81.6 % and 86.3 %, respectively, of the Partnership's net sales.

Long-Term Debt Payable to Westlake

Long-term debt payable to Westlake consists of the following:

September 30,

2024 December 31,

2 unchanged sentences

Long-term debt payable to Westlake $ 399,674 $ 399,674

As of June 30, 2024, outstanding borrowings under the OpCo Revolver and the MLP Revolver bore interest at the Secured Overnight Financing Rate, as administered by the Federal Reserve Bank of New York ("SOFR") plus the Applicable Margin plus a 0.10 % credit spread adjustment.

As of September 30, 2024, outstanding borrowings under the OpCo Revolver and the MLP Revolver bore interest at the Secured Overnight Financing Rate, as administered by the Federal Reserve Bank of New York ("SOFR") plus the Applicable Margin plus a 0.10 % credit spread adjustment.

The Applicable Margin under the OpCo Revolver is 1.75 %.

1 unchanged sentence

The OpCo Revolver and the MLP Revolver are scheduled to mature on July 12, 2027.

The weighted average interest rate on all long-term debt was 7.2 % and 7.2 % at June 30, 2024 and December 31, 2023, respectively.

As of June 30, 2024, the Partnership was in compliance with all of the covenants under the OpCo Revolver and the MLP Revolver.

The weighted average interest rate on all long-term debt was 7.2 % and 7.2 % at September 30, 2024 and December 31, 2023, respectively.

As of September 30, 2024, the Partnership was in compliance with all of the covenants under the OpCo Revolver and the MLP Revolver.

Fair Value Measurements

4 unchanged sentences

Unobservable inputs that are not corroborated by market data.

WESTLAKE CHEMICAL PARTNERS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — Continued

(in thousands of dollars, except unit amounts and per unit data)

The Partnership has financial assets and liabilities subject to fair value measures.

1 unchanged sentence

The amounts reported in the consolidated balance sheets for accounts receivable, net and accounts payable approximate their fair value due to the short maturities of these instruments.

The carrying and fair values of the Partnership's long-term debt at June 30, 2024 and December 31, 2023 are summarized in the table below.

The carrying and fair values of the Partnership's long-term debt at September 30, 2024 and December 31, 2023 are summarized in the table below.

The fair value of long-term debt is determined based on the present value of expected future cash flows using a discounted cash flow methodology.

1 unchanged sentence

Inputs used to estimate the fair values of the Partnership's long-term debt include the selection of an appropriate discount rate.

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Value Carrying

Long-term debt payable to Westlake $ 399,674 $ 411,456 $ 399,674 $ 408,110

WESTLAKE CHEMICAL PARTNERS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — Continued

(in thousands of dollars, except unit amounts and per unit data)

Supplemental Information

Accrued and Other Liabilities

Accrued and other liabilities were $ 21,840 and $ 24,980 at June 30, 2024 and December 31, 2023, respectively.

Accrued maintenance expense, accrued interest on related party debt and accrued taxes, which are components of accrued and other liabilities, were $ 4,096 , $ 6,679 and $ 4,807 , respectively, at June 30, 2024 and $ 5,170 , $ 6,675 and $ 3,033 , respectively, at December 31, 2023.

Accrued and other liabilities were $ 21,364 and $ 24,980 at September 30, 2024 and December 31, 2023, respectively.

Accrued interest on related party debt and accrued taxes, which are components of accrued and other liabilities, were $ 6,753 and $ 5,490 , respectively, at September 30, 2024 and $ 6,675 and $ 3,033 , respectively, at December 31, 2023.

No other component of accrued and other liabilities was more than five percent of total current liabilities.

Insurance Recoveries

During the three and nine months ended September 30, 2024, the Partnership recorded business interruption related insurance recoveries of $ 6,222 as a reduction in cost of sales and reflected in accounts receivable, net—third parties as of September 30, 2024.

These recoveries were related to the settlement of insurance claims for Hurricane Laura, which impacted OpCo's Petro 1 and Petro 2 units in the second half of 2020 and impacted production in the subsequent periods.

Cash Flow Information

Non-cash Investing Activity

Capital expenditure related liabilities, included in accounts payable—third parties and accrued and other liabilities, were $ 4,640 and $ 4,368 at June 30, 2024 and 2023, respectively.

Capital expenditure related liabilities, included in accounts payable—third parties and accrued and other liabilities, were $ 7,376 and $ 8,262 at September 30, 2024 and 2023, respectively.

Interest Paid

Interest paid by the Partnership, net of interest capitalized, was $ 13,228 and $ 11,987 for the six months ended June 30, 2024 and 2023, respectively.

Interest paid by the Partnership, net of interest capitalized, was $ 19,852 and $ 18,095 for the nine months ended September 30, 2024 and 2023, respectively.

Operating Leases

Right-of-use assets obtained in exchange for operating lease obligations were $ 616 and $ 0 for the six months ended June 30, 2024 and 2023, respectively.

Right-of-use assets obtained in exchange for operating lease obligations were $ 758 and $ 5,079 for the nine months ended September 30, 2024 and 2023, respectively.

WESTLAKE CHEMICAL PARTNERS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — Continued

(in thousands of dollars, except unit amounts and per unit data)

Commitments and Contingencies

11 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 1. Financial Statements