What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-03-05 compared with 2024-02-28 · 115 added, 71 removed, 672 unchanged (22% of the section changed)

51 unchanged sentences

The Ethylene Sales Agreement requires Westlake to purchase a minimum volume of ethylene each year equal to 95% of Westlake Chemical OpCo LP's ("OpCo") planned ethylene production per year, subject to certain exceptions and a maximum commitment of 3.8 billion pounds per year.

The fee for each pound of ethylene purchased by Westlake from OpCo will equal (i) the actual price OpCo pays Westlake to purchase ethane, (ii) plus the actual price OpCo pays Westlake to purchase natural gas, (iii) plus OpCo's estimated operating costs divided by OpCo's planned ethylene production for the year, (iv) plus a five-year average of OpCo's expected future maintenance capital expenditures and other turnaround expenditures divided by OpCo's planned ethylene production capacity for the year, (v) less the proceeds received by OpCo from the sale of co-products associated with producing the ethylene purchased by Westlake, (vi) plus a $0.10 per pound margin.

So long as Westlake is not in default under the Ethylene Sales Agreement, if OpCo's actual production exceeds planned production, Westlake has the option to purchase up to 95% of the excess production (the "Excess Production Option").

The fee for each pound of ethylene purchased by Westlake from OpCo up to the minimum commitment will equal (i) the actual price OpCo pays Westlake to purchase ethane, (ii) plus the actual price OpCo pays Westlake to purchase natural gas, (iii) plus OpCo's estimated operating costs divided by OpCo's planned ethylene production for the year, (iv) plus a five-year average of OpCo's expected future maintenance capital expenditures and other turnaround expenditures divided by OpCo's planned ethylene production capacity for the year, (v) less the proceeds received by OpCo from the sale of co-products associated with producing the ethylene purchased by Westlake, (vi) plus a $0.10 per pound margin.

The fee for the Excess Production Option, if exercised, equals OpCo's estimated variable operating costs of producing the incremental ethylene, net of revenues from co-products sales plus a $0.10 per pound margin.

The result of the fee structure is that OpCo should generally recover the portion of its total operating costs and maintenance capital expenditures and other turnaround expenditures corresponding to the portion of OpCo's aggregate production that is purchased by Westlake.

2 unchanged sentences

In the event Westlake purchases less than its annual commitment, the Partnership recognizes buyer deficiency fees representing fixed margin and all expenses and expenditures incurred per pound of volume committed but not taken by Westlake.

There was no Shortfall or buyer deficiency fee recognized by the Partnership in 2023.

The principal considerations for our determination that performing procedures relating to revenue from the Ethylene Sales Agreement is a critical audit matter are the significant audit effort in performing procedures and evaluating the calculation of the fee for each pound of ethylene and the buyer deficiency fee.

Westlake exercised the Excess Production Option in 2024.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to the accuracy of the fees used to determine revenue from the Ethylene Sales Agreement.

These procedures also included, among others, testing the completeness and accuracy of underlying inputs used in the fee for each pound of ethylene purchased by Westlake, buyer deficiency fee and Shortfall calculation, and testing the accuracy of the volume of ethylene purchased by Westlake as part of the Ethylene Sales Agreement.

These procedures also included, among others (i) testing the completeness and accuracy of underlying inputs used in the fee for each pound of ethylene purchased by Westlake, buyer deficiency fee and Shortfall calculations;

and (ii) testing the accuracy of the volume of ethylene purchased by Westlake as part of the Ethylene Sales Agreement.

/s/ PricewaterhouseCoopers LLP

Houston, Texas

February 28, 2024

March 5, 2025

We have served as the Partnership's auditor since 2014.

118 unchanged sentences

— 145,000 362,000

Other — — ( 130 )

Net cash used for investing activities

37 unchanged sentences

As such, the Partnership was determined to be OpCo's primary beneficiary and therefore consolidates OpCo's results of operations and financial position.

The Partnership's operations consist exclusively of the variable interest entity's operations and, as such, no additional variable interest entity disclosures are considered necessary.

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

49 unchanged sentences

The costs related to the significant overhaul and refurbishment activities include maintenance materials, parts and direct labor costs.

The costs of the turnaround are deferred when incurred at the time of the turnaround and amortized (within depreciation and amortization) on a straight-line basis until the next planned turnaround, which typically ranges from five to six years .

Deferred turnaround costs are presented as a component of deferred charges and other assets, net.

21 unchanged sentences

The Partnership's direct commodity price risk is limited to the sales to third parties.

See the Partnership's consolidated statement of operations for the disaggregation of net sales to Westlake and net sales to third parties.

See the Partnership's consolidated statements of operations for the disaggregation of net sales to Westlake and net sales to third parties.

Transportation and Freight

12 unchanged sentences

Valuation allowances are recorded against deferred tax assets when it is considered more likely than not that the deferred tax assets will not be realized on a separate tax return basis.

Segment Reporting

The Partnership only operates one segment (ethylene production) and all of its operations are located in the United States.

Use of Estimates

3 unchanged sentences

The Partnership has not reported consolidated statements of comprehensive income for the years ended December 31, 2024, 2023 and 2022 due to immateriality of the components of other comprehensive income.

Recent Accounting Pronouncements

Segment Reporting (ASU No.

In November 2023, the Financial Accounting Standards Board ("FASB") issued an accounting standards update.

The update requires public entities to disclose on an annual and interim basis, significant segment expenses that are regularly provided to the chief operating decision maker ("CODM"), the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources.

The update also requires that a public entity that has a single reportable segment provide all disclosures required by the update as well as all existing segment disclosures in Topic 280.

The amendments in this update will be effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024 and are to be applied retrospectively to all prior periods presented in the financial statements.

Early adoption is permitted.

The Partnership is currently evaluating the impact of the update on the disclosures in the Partnership's financial statements.

WESTLAKE CHEMICAL PARTNERS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

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

Recently Issued Accounting Pronouncements

Income Taxes (ASU No.

In December 2023, the FASB issued an accounting standards update to require additional tax disclosures under Topic 740 primarily related to the rate reconciliation and income taxes paid disclosures.

In December 2023, the Financial Accounting Standards Board ("FASB") issued an accounting standards update to require additional tax disclosures under Topic 740 primarily related to the rate reconciliation and income taxes paid disclosures.

The amendments in this update will be effective for fiscal years beginning after December 15, 2024 and are to be applied on a prospective basis.

1 unchanged sentence

The update is not expected to have a material impact on the Partnership's disclosures.

WESTLAKE CHEMICAL PARTNERS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

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

Disaggregation of Income Statement Expenses (ASU No.

In November 2024, the FASB issued an accounting standards update requiring public entities to disclose on an annual and interim basis detailed information about the types of expenses in relevant expense captions presented on the face of the income statement, including amounts for inventory purchases, employee compensation, depreciation and amortization of intangible assets and a qualitative description for remaining amounts not separately disaggregated.

Additionally, the update requires disclosure of total selling expenses, and in annual periods, an entity's definition of selling expenses.

The amendments in this update are effective for annual reporting periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027 and are to be applied either prospectively or retrospectively.

Early adoption is permitted.

The Partnership is currently evaluating the impact of the update on the disclosures in the Partnership's financial statements.

Recently Adopted Accounting Standard

Segment Reporting (ASU No.

In November 2023, the FASB issued an accounting standards update requiring public entities to disclose on an annual and interim basis, significant segment expenses that are regularly provided to the chief operating decision maker ("CODM"), the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources.

The update also requires that a public entity that has a single reportable segment provide all disclosures required by the update as well as all existing segment disclosures in Topic 280.

The amendments in this update are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024 and are to be applied retrospectively to all prior periods presented in the financial statements.

Early adoption is permitted.

The Partnership adopted this accounting standard effective for the annual 2024 financial statements, and the adoption resulted in additional segment disclosures (see Note 17) and will result in additional segment disclosures in the Partnership's interim period financial statements thereafter.

Agreements with Westlake and Related Parties

Ethylene Sales Agreement

OpCo has entered into a 12 -year ethylene sales agreement with Westlake (the "Ethylene Sales Agreement").

OpCo has entered into an ethylene sales agreement with Westlake (the "Ethylene Sales Agreement") with an initial term of 12 years.

The Ethylene Sales Agreement requires Westlake to purchase a minimum volume of ethylene each year equal to 95 % of OpCo's planned ethylene production per year (the "Minimum Commitment"), subject to certain exceptions and a maximum commitment of 3.8 billion pounds per year.

8 unchanged sentences

WESTLAKE CHEMICAL PARTNERS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

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

The estimated operating costs and the expected future maintenance capital expenditures and other turnaround expenditures will be adjusted at the end of each year, to be applicable for the fee for the next calendar year, to reflect certain changes in forecasted costs.

2 unchanged sentences

Costs specific to the processing of Westlake's purge gas are recovered under the Services and Secondment Agreement (as described below), and not the Ethylene Sales Agreement.

WESTLAKE CHEMICAL PARTNERS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

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

Pursuant to the Ethylene Sales Agreement, Westlake's obligation to pay for the annual minimum commitment ( 95 % of OpCo's budgeted ethylene production), which is measured on an annual basis, is not reduced for a force majeure event lasting fewer than 45 consecutive days.

19 unchanged sentences

Such seconded employees are under the control of OpCo while they work on OpCo's facilities.

The Services and Secondment Agreement has an initial 12 -year term.

The Services and Secondment Agreement may be renewed thereafter upon agreement of the parties and shall automatically terminate if the Ethylene Sales Agreement terminates under certain circumstances.

Westlake and OpCo each can terminate the Services and Secondment Agreement under certain circumstances, including if the other party materially defaults on the performance of its obligations and such default continues for a 30 -day period.

WESTLAKE CHEMICAL PARTNERS LP

1 unchanged sentence

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

The Services and Secondment Agreement has an initial 12 -year term.

The Services and Secondment Agreement may be renewed thereafter upon agreement of the parties and shall automatically terminate if the Ethylene Sales Agreement terminates under certain circumstances.

Site Lease Agreements

44 unchanged sentences

The Partnership's goodwill balance was $ 5,814 at December 31, 2024 and 2023.

The impairment assessment for the recorded goodwill was performed during the fourth quarter of 2023 and did not indicate impairment of the goodwill.

The fair value of the reporting unit was calculated using both a discounted cash flow methodology and a market value methodology.

The discounted cash flow projections were based on a long-term forecast to reflect the cyclicality of the Partnership's business.

The forecast was based on projected market prices and spreads and estimates by management, including its strategic and operational plans.

Other significant assumptions used in the discounted cash flow projection included sales volumes based on production capacities.

The future cash flows were discounted to present value using a discount rate of 10.5 %.

The significant assumptions used in determining the fair value of the reporting unit using the market value methodology include the determination of appropriate market comparables and the estimated multiples of net income before interest expense, income taxes, depreciation and amortization (EBITDA) a willing buyer is likely to pay.

The Partnership performed its annual goodwill impairment analysis during the fourth quarter of 2024.

The Partnership elected to perform a qualitative assessment for its analysis.

Based upon this assessment, the Partnership concluded that it is more likely than not that the fair value of the reporting unit exceeds the carrying amount.

Factors considered in the qualitative assessment included industry and market considerations, cost factors, including consideration of the Partnership's fixed margin under the Ethylene Sales Agreement, and current and projected financial performance.

Deferred Charges and Other Assets

4 unchanged sentences

Amortization expense on deferred charges and other assets of $ 25,646 , $ 25,692 and $ 26,330 is included in cost of sales in the consolidated statements of operations for the years ended December 31, 2024, 2023 and 2022, respectively.

Certain other assets are amortized over periods ranging from five to twenty years using the straight-line method.

Certain other assets are amortized over periods ranging from three to twenty years using the straight-line method.

WESTLAKE CHEMICAL PARTNERS LP

13 unchanged sentences

As of December 31, 2024, outstanding borrowings under the OpCo Revolver bore interest at SOFR plus the Applicable Margin and credit spread adjustment.

On April 29, 2015, the Partnership entered into a $ 300,000 revolving credit facility agreement with an affiliate of Westlake (as subsequently amended, the "MLP Revolver") to fund the Partnership's purchase of an additional 2.7 % newly-issued, limited partner interest in OpCo for $ 135,341 .

On April 29, 2015, the Partnership entered into a $ 300,000 revolving credit facility agreement with an affiliate of Westlake (as subsequently amended, the "MLP Revolver").

In 2017, the Partnership entered into an amendment to the MLP Revolver credit agreement, increasing borrowing capacity from $ 300,000 to $ 600,000 .

On March 29, 2019, the Partnership borrowed $ 123,511 under the MLP Revolver to partially fund the purchase of the additional 4.5 % interest in OpCo.

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

12 unchanged sentences

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

Distributions and Net Income Per Limited Partner Unit

On January 22, 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 period from October 1, 2023 to December 31, 2023 of $ 0.4714 per common unit.

This distribution was paid on February 20, 2024 to unitholders of record as of February 2, 2024.

WESTLAKE CHEMICAL PARTNERS LP

1 unchanged sentence

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

Distributions and Net Income Per Limited Partner Unit

On January 27, 2025, the board of directors of Westlake Chemical Partners GP LLC ("Westlake GP"), the Partnership's general partner, declared a quarterly cash distribution for the period from October 1, 2024 to December 31, 2024 of $ 0.4714 per common unit.

This distribution was paid on February 25, 2025 to unitholders of record as of February 7, 2025.

Distributions are declared subsequent to quarter end;

4 unchanged sentences

Limited partners' distribution declared on common units 66,437 66,421 66,403

Net income in excess of distribution (Distribution in excess of net income) $ ( 12,138 ) $ ( 2,230 ) $ 16,159

Distribution in excess of net income

$ ( 4,045 ) $ ( 12,138 ) $ ( 2,230 )

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.

32 unchanged sentences

Distribution $ 66,403 $ — $ 66,403

Net income in excess of distribution

Distribution in excess of net income

( 2,230 ) — ( 2,230 )

4 unchanged sentences

Basic and diluted $ 1.82

The amended Partnership Agreement provides that the Partnership will distribute cash that is deemed to be operating surplus each quarter to all the unitholders, pro rata, until each unit has received a distribution of $ 1.2938 .

The amended Partnership Agreement provides that the Partnership will distribute cash that is deemed to be an appropriate portion of the Partnership's total operating surplus.

If cash distributions to the Partnership's unitholders exceed $ 1.2938 per common unit in any quarter, the Partnership's unitholders and Westlake, as the holder of the Partnership's incentive distribution rights, will receive distributions according to the following percentage allocations:

23 unchanged sentences

Related Party Transactions

The Partnership and OpCo regularly enter into related party transactions with Westlake.

See below for a description of transactions with related parties.

Related party transactions between the Partnership, OpCo and Westlake are primarily based on agreements such as the Ethylene Sales Agreement, the Feedstock Supply Agreement, the Services and Secondment Agreement, Site Lease Agreements, the Omnibus Agreement, the Investment Management Agreement, the Exchange Agreement, the OpCo Partnership Agreement, the OpCo Revolver and the MLP Revolver.

These agreements, discussed in detail in Notes 2 and 8, reflect the pervasive effect of the relationship with Westlake on the Partnership's operations and its consolidated financial statements.

Pursuant to these agreements, the Partnership and OpCo regularly enter into transactions with Westlake.

See below for descriptions and details of significant related party transactions.

Sales to Related Parties

1 unchanged sentence

Additionally, the Partnership and OpCo from time to time provide other services or products for which it charges Westlake a fee.

OpCo sells a significant portion of its ethylene production to Westlake.

Sales to related parties were as follows:

2 unchanged sentences

Net sales—Westlake $ 950,801 $ 1,026,655 $ 1,342,910

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 resulted in "excess quantities" of ethylene for the contract year ended December 31, 2024.

Pursuant to the terms of the Ethylene Sales Agreement, the excess quantities produced by the Partnership during the year ended December 31, 2024 were sold to Westlake at prices that excluded certain non-variable costs of production.

Based on OpCo's 2022 production, the Partnership recognized buyer deficiency fees of $ 23,835 during the year ended December 31, 2022.

3 unchanged sentences

The buyer deficiency fee was received by the Partnership in January 2023.

OpCo declared force majeure events in 2021 related to the flash fire at OpCo's Petro 2 facility, OpCo's Petro 1 facility outage, and due to the severe winter storm.

As a result of these force majeure events in 2021, the Partnership recognized revenue for a buyer deficiency fee and Shortfall in 2021 of $ 51,395 and of $ 58,906 , respectively.

The buyer deficiency fee is measured periodically 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.

These periodic estimates are updated at the end of the year based on actual annual production.

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

The buyer deficiency fee recognized in 2021 was received by the Partnership in January 2022 and out of the total Shortfall of $ 58,906 recognized in 2021, $ 51,713 was received by the Partnership in 2022 and $ 7,004 was received in 2023 pursuant to the terms of the Ethylene Sales Agreement.

Cost of Sales from Related Parties

Charges for goods and services purchased by the Partnership and OpCo from Westlake and included in cost of sales relate primarily to feedstock purchased under the Feedstock Supply Agreement and services provided under the Services and Secondment Agreement.

Charges from related parties in cost of sales were as follows:

A significant portion of the Partnership's inputs included in cost of sales are supplied by Westlake.

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

Year Ended December 31,

2 unchanged sentences

Other charges from Westlake and included in cost of sales 125,702 123,039 172,761

Total $ 521,739 $ 936,884 $ 534,900

WESTLAKE CHEMICAL PARTNERS LP

23 unchanged sentences

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

As discussed above under "Sales to Related Parties", the buyer deficiency fee for the year ended December 31, 2022 was received by the Partnership in January 2023.

Further, out of the total Shortfall recognized in 2021, $ 7,193 remained to be collected by the Partnership as of December 31, 2022.

Of this amount, $ 7,004 was received during the year ended December 31, 2023 pursuant to the terms of the Ethylene Sales Agreement.

As of December 31, 2024, accounts receivable includes sales associated with the Excess Production Option which are at a lower sales price as described in Note 2 and under —Sales to Related Parties above.

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

22 unchanged sentences

During the years ended December 31, 2024, 2023 and 2022, the Partnership reimbursed $ 351 , $ 347 and $ 243 , respectively, to Westlake for certain state tax payments.

See Note 10 above for an additional related party transaction.

See Note 10 above for an additional transaction through which a related party acquired common units in a private placement.

WESTLAKE CHEMICAL PARTNERS LP

11 unchanged sentences

There were no forfeitures under the Plan during 2024, 2023 and 2022.

The total fair value of phantom units that vested during the year ended December 31, 2023 was $ 278 .

Non-vested phantom unit awards as of December 31, 2023 and 2022 and changes during the respective periods were as follows:

The total fair value of phantom units that vested during the years ended December 31, 2024, 2023 and 2022 was $ 423 , $ 278 and $ 284 , respectively.

Non-vested phantom unit awards as of December 31, 2024 and 2023 and changes during the period were as follows:

Units Weighted

4 unchanged sentences

Non-vested balance at December 31, 2024 14,646 $ 23.14

Granted 18,564 22.65

Vested ( 12,531 ) 22.18

Non-vested balance at December 31, 2023 18,564 21.65

Each phantom unit represents the right to receive, upon vesting, either a cash payment equal to the fair market value of one Partnership common unit or a Partnership common unit.

Each DER has distribution rights only so long as the phantom units to which it relates to has not vested or been settled.

The awards, which are classified as liability awards for financial accounting purposes, are re-measured at each reporting date until they vest.

The awards, which are classified as liability awards for financial accounting purposes, are measured at fair value on the grant date of the award and are re-measured at each reporting date until they vest based on the market price of the Partnership's units.

The total units available for grant at December 31, 2024 were 1,192,349 .

12 unchanged sentences

These financial assets and liabilities include cash and cash equivalents, accounts receivable, net, accounts payable and long-term debt payable to Westlake, all of which are recorded at carrying value.

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 amounts reported in the consolidated balance sheets for cash and cash equivalents, 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 December 31, 2024 and December 31, 2023 are summarized in the table below.

36 unchanged sentences

Accrued and other liabilities were $ 16,920 and $ 24,980 at December 31, 2024 and 2023, respectively.

Accrued maintenance expense, accrued capital expenditures, accrued interest on related party debt and accrued taxes, which are components of accrued and other liabilities, were $ 5,170 , $ 4,627 , $ 6,675 and $ 3,033 at December 31, 2023, respectively, and were $ 3,752 , $ 2,442 , $ 4,733 and $ 2,652 at December 31, 2022, respectively.

Accrued interest on related party debt, which is a component of accrued and other liabilities, was $ 5,848 and $ 6,675 at December 31, 2024 and 2023, respectively.

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

Insurance Recoveries

During the year ended December 31, 2024, the Partnership recorded business interruption related insurance recoveries of $ 6,222 as a reduction to cost of sales.

All insurance recovery proceeds were collected as of December 31, 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

12 unchanged sentences

Pursuant to the Omnibus Agreement, certain subsidiaries of Westlake will indemnify the Partnership for liabilities that occurred or existed prior to August 4, 2014.

In September 2021, shortly after the turnaround on OpCo's Petro 2 facility commenced, there was a flash fire at the quench tower of the Petro 2 facility.

Contractors and employees working on and near the quench tower were injured and multiple lawsuits were filed against Westlake and OpCo.

Final settlements were reached with all of the plaintiffs to fully resolve the lawsuits by Westlake, but payment by the insurance carriers has not yet been completed.

Westlake is responsible for indemnifying the Partnership in connection to any loss OpCo may have incurred as a result of the fire.

The Partnership is also involved in other legal proceedings incidental to the conduct of its business.

2 unchanged sentences

The Partnership has various purchase commitments for its capital projects and for materials, supplies and services incident to the ordinary conduct of business.

WESTLAKE CHEMICAL PARTNERS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

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

Segment Information

The Partnership has one operating segment, which is the Partnership's reportable segment, OpCo.

The operating results of the segment are reviewed by the Partnership's Chief Executive Officer, the chief operating decision maker ("CODM").

The CODM evaluates segment performance based on net income.

The CODM reviews the OpCo segment's actual net income trends to allocate resources and assess performance.

The OpCo segment's operations consist of two ethylene production facilities in Lake Charles, Louisiana, one ethylene production facility in Calvert City, Kentucky and a 200-mile common carrier ethylene pipeline that runs from Mont Belvieu, Texas to Longview, Texas.

OpCo derives substantially all of its revenue from these production facilities primarily by selling ethylene to Westlake and others, as well as through the sale of co-products of ethylene production, including propylene, crude butadiene, pyrolysis gasoline and hydrogen.

All of the OpCo segment's operations are located and conducted in the United States.

All of the OpCo segment's sales are attributed to the United States.

Sales to Westlake accounted for more than 10% of sales in the OpCo segment, totaling $ 950,801 , $ 1,026,655 and $ 1,342,910 for the years ended December 31, 2024, 2023 and 2022, respectively.

Consolidated net sales and provision for income taxes as disclosed in the consolidated statements of operations and depreciation and amortization and additions to property, plant and equipment as disclosed in the consolidated statements of cash flows are fully attributed to the OpCo segment, and as such, separate OpCo segment amounts are not repeated in the tables below.

The accounting policies of the OpCo segment are the same as those described in Note 1.

Year Ended December 31,

2024 2023 2022

Significant segment expenses and other segment items

Raw material, energy, manufacturing and logistics costs

$ 605,058 $ 693,129 $ 1,094,708

Depreciation and amortization 111,899 110,203 121,074

Total cost of sales 716,957 803,332 1,215,782

Selling, general and administrative expenses 24,699 26,217 26,387

Other segment items (1)

( 3,005 ) ( 1,786 ) 494

Interest expense—Westlake

OpCo $ 1,410 $ 1,496 $ 693

Corporate 24,291 25,005 12,714

$ 25,701 $ 26,501 $ 13,407

OpCo $ 397,245 $ 363,028 $ 350,484

WESTLAKE CHEMICAL PARTNERS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

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

A reconciliation of total segment net income to consolidated net income is as follows:

Year Ended December 31,

2024 2023 2022

Net income from OpCo

$ 397,245 $ 363,028 $ 350,484

Corporate net loss

( 28,086 ) ( 28,402 ) ( 15,655 )

$ 369,159 $ 334,626 $ 334,829

$ 1,238,420 $ 1,269,355

49,536 47,487

$ 1,287,956 $ 1,316,842

_____________________________

(1) Other segment items includes interest expense—Westlake, other income, net and provision for income taxes.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

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-K

Item 8. Financial Statements and Supplementary Data