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Item 2. Management’s Discussion and Analysis

2025-05-02 compared with 2024-11-06 · 56 added, 89 removed, 226 unchanged (39% of the section changed)

Management's Discussion and Analysis of Financial Condition and Results of Operations

This Management's Discussion and Analysis of Financial Condition and Results of Operations section should be read in conjunction with the accompanying consolidated financial statements and the notes thereto and the consolidated financial statements and notes thereto included in Westlake Chemical Partners LP's annual report on Form 10-K for the fiscal year ended December 31, 2023 (the "2023 Form 10-K"), as filed with the SEC on February 28, 2024.

This Management's Discussion and Analysis of Financial Condition and Results of Operations section should be read in conjunction with the accompanying consolidated financial statements and the notes thereto and the consolidated financial statements and notes thereto included in Westlake Chemical Partners LP's annual report on Form 10-K for the fiscal year ended December 31, 2024 (the "2024 Form 10-K"), as filed with the SEC on March 5, 2025.

Unless otherwise indicated, references in this report to "we," "our," "us" or like terms, refer to Westlake Chemical Partners LP (the "Partnership"), Westlake Chemical OpCo LP ("OpCo") and Westlake Chemical OpCo GP LLC ("OpCo GP").

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Under the Ethylene Sales Agreement, the price for the sale of such excess ethylene to Westlake is based on a formula similar to that used for the minimum purchase commitment, with the exception of certain fixed costs.

Under the Ethylene Sales Agreement, if we produce more than our planned production in a contract year, we reimburse Westlake for certain non-variable costs that were charged on excess quantities of ethylene produced and sold to Westlake.

Such reimbursement is scheduled to be paid by the Partnership after the conclusion of the year.

In addition, under the Ethylene Sales Agreement, if production costs billed to Westlake on an annual basis are less than 95% of the actual production costs incurred by OpCo during the contract year, OpCo is entitled to recover the shortfall in such production costs (proportionate to the volume sold to Westlake) in the subsequent year ("Shortfall").

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We capitalize the costs of major maintenance activities, or turnarounds, and amortize the costs over the period until the next planned turnaround of the affected facility.

We plan to commence the next planned maintenance turnaround at Petro 1 in the first quarter of 2025.

Operating expenses, maintenance capital expenditures and turnaround costs are built into the price per pound of ethylene charged to Westlake under the Ethylene Sales Agreement.

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

Recent Development

Petro 1 Turnaround

In January 2025, we commenced our planned maintenance turnaround of the Petro 1 production facility.

The turnaround concluded in April 2025.

Results of Operations

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

2024 2023 2024 2023

Three Months Ended March 31,

(in thousands of dollars)

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

Three Months Ended September 30, 2024 Nine Months Ended September 30, 2024

Sales Price Volume Average

Three Months Ended March 31, 2025

Sales Price Volume

Net sales percentage change from prior-year period due to average sales price and volume +11.2 % -27.7 %

Three Months Ended September 30, 2024 Nine Months Ended September 30, 2024

Three Months Ended March 31, 2025

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

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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 September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Three Months Ended March 31,

(in thousands of dollars)

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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 September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Three Months Ended March 31,

(in thousands of dollars)

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EBITDA $ 75,021 $ 124,431

For the quarter ended September 30, 2024, net income was $104.1 million on net sales of $277.0 million.

This represents an increase in net income of $23.2 million as compared to net income of $80.9 million on net sales of $321.7 million for the quarter ended September 30, 2023.

Net income attributable to the Partnership for the third quarter of 2024 was $18.1 million as compared to $13.2 million for the third quarter of 2023, an increase of $4.9 million .

Income from operations was $109.7 million for the third quarter of 2024 as compared to $86.2 million for the third quarter of 2023, an increase of $23.5 million.

Income from operations, net income and net income attributable to the Partnership for the third quarter of 2024 as compared to the third quarter of 2023 were higher primarily due to higher ethylene and co-products sales volumes and prices to third parties and lower ethane feedstock costs and natural gas prices in the third quarter of 2024 compared to the third quarter of 2023, partially offset by lower ethylene sales volumes and prices to Westlake.

Net sales for the third quarter of 2024 decreased by $44.7 million as compared to net sales for the third quarter of 2023, mainly due to lower ethylene sales volumes and prices to Westlake in the third quarter of 2024 compared to the third quarter of 2023, partially offset by higher ethylene and co-products sales volumes and prices to third parties.

For the nine months ended September 30, 2024 , net income was $281.8 million on net sales of $845.8 million.

This represents an increase in net income of $34.2 million as compared to net income of $247.6 million on net sales of $893.5 million for the nine months ended September 30, 2023 .

Net income attributable to the Partnership for the nine months ended September 30, 2024 was $47.4 million as compared to $40.0 million for the nine months ended September 30, 2023 , an increase of $7.4 million.

Income from operations was $298.4 million for the nine months ended September 30, 2024 as compared to $264.9 million for the nine months ended September 30, 2023, an increase of $33.5 million .

Income from operations, net income and net income attributable to the Partnership for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023 were higher primarily due to higher ethylene and co-products sales volumes and prices to third parties, higher ethylene sales volumes to Westlake and lower ethane feedstock costs and natural gas prices in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, partially offset by lower ethylene sales prices to Westlake.

Net sale s for the nine months ended September 30, 2024 decreased by $47.7 million as compared t o net sales for the nine months ended September 30, 2023, mainly due to lower ethylene sales prices to Westlake, partially offset by higher ethylene and co-products sales volumes and prices to third parties and higher ethylene sales volumes to Westlake during the nine months ended September 30, 2024 as compared t o the nine months ended September 30, 2023 .

For the quarter ended March 31, 2025, net income was $42.3 million on net sales of $237.6 million.

This represents a decrease in net income of $47.3 million as compared to net income of $89.6 million on net sales of $284.7 million for the quarter ended March 31, 2024.

Net income attributable to the Partnership for the first quarter of 2025 was $4.9 million as compared to $14.8 million for the first quarter of 2024, a decrease of $9.9 million .

Income from operations was $46.6 million for the first quarter of 2025 as compared to $95.1 million for the first quarter of 2024, a decrease of $48.5 million.

Net sales for the first quarter of 2025 decreased by $47.1 million as compared to the first quarter of 2024 primarily due to lower ethylene sales volumes to Westlake and lower co-products sales volumes to third parties as a result of lower production volumes during the Petro 1 turnaround, partially offset by higher ethylene sales prices to Westlake and third parties.

Income from operations, net income and net income attributable to the Partnership for the first quarter of 2025 as compared to the first quarter of 2024 were lower due to the lower net sales because of the Petro 1 turnaround and higher ethane feedstock and natural gas costs in the first quarter of 2025 compared to the first quarter of 2024.

RESULTS OF OPERATIONS

Third Quarter 2024 Compared with Third Quarter 2023

Total net sales decreased by $44.7 million, or 13.9%, to $277.0 million in the third quarter of 2024 from $321.7 million in the third quarter of 2023.

The decrease in net sales in the third quarter of 2024 was primarily due to lower ethylene sales volumes and prices to Westlake in the third quarter of 2024 compared to the third quarter of 2023, partially offset by higher ethylene and co-products sales volumes and prices to third parties.

Lower average sales prices in the third quarter of 2024 contributed to a 15.1% decrease in net sales compared to the third quarter of 2023.

Higher sales volumes in the third quarter of 2024 contributed to a 1.2% increase in net sales compared to the third quarter of 2023.

Gross Profit.

Gross profit increased to $116.9 million in the third quarter of 2024 from $93.0 million in the third quarter of 2023.

Gross profit margin percentage in the third quarter of 2024 was 42.2%, as compared to 28.9% for the third quarter of 2023.

The higher gross profit margin was primarily due to lower ethane feedstock costs and natural gas prices in the third quarter of 2024 compared to the third quarter of 2023.

The gross profit margin for the third quarter of 2024 was also positively affected by insurance recoveries of approximately $6.2 million related to the settlement of a business interruption claim associated with Hurricane Laura, which impacted OpCo's Petro 1 and Petro 2 facilities in the second half of 2020 and impacted production in the subsequent periods.

Selling, General and Administrative Expenses.

Selling, general and administrative expenses increased by $0.6 million, or 9.0%, to $7.3 million in the third quarter of 2024 as compared to $6.7 million in the third quarter of 2023.

The increase was mainly attributable to a higher provision for credit losses in the third quarter of 2024 as compared to the third quarter of 2023.

Interest Expense—Westlake.

Interest expense of $6.7 million in the third quarter of 2024 increased from $6.4 million in the third quarter of 2023 mainly due to higher interest rates on the debt balance outstanding in the third quarter of 2024 as compared to the third quarter of 2023.

Other Income, net .

Other income, net remained consistent at $1.3 million in the third quarter of 2024 as compared to $1.3 million in the third quarter of 2023.

MLP Distributable Cash Flow.

MLP distributable cash flow increased by $4.3 million to $17.9 million in the third quarter of 2024 from $13.6 million in the third quarter of 2023.

The increase in the third quarter of 2024, as compared to the prior-year period, was primarily attributable to increased earnings at OpCo and lower maintenance capital expenditures, partially offset by higher reserves for future turnarounds.

EBITDA increased by $23.4 million to $139.1 million in the third quarter of 2024 from $115.7 million in the third quarter of 2023.

The increase was primarily due to higher ethylene and co-products sales volumes and prices to third parties and lower ethane feedstock costs and natural gas prices in the third quarter of 2024 compared to the third quarter of 2023, partially offset by lower ethylene sales volumes and prices to Westlake.

EBITDA for the third quarter of 2024 was also positively impacted by insurance recoveries of approximately $6.2 million related to the settlement of a business interruption claim associated with Hurricane Laura, which impacted OpCo's Petro 1 and Petro 2 facilities in the second half of 2020 and impacted production in the subsequent periods.

Nine Months Ended September 30, 2024 Compared with Nine Months Ended September 30, 2023

Total net sales decreased by $47.7 million, or 5.3% , to $845.8 million in the nine months ended September 30, 2024 from $893.5 million in the nine months ended September 30, 2023 .

The decrease in net sales in the nine months ended September 30, 2024 was primarily due to lower ethylene sales prices to Westlake, partially offset by higher ethylene sales volumes to Westlake and higher ethylene and co-products sales volumes and prices to third parties during the nine months ended September 30, 2024 as co mpared to the nine months ended September 30, 2023.

The lower average sales prices in the nine months ended September 30, 2024 contributed to a 7.9% decrease in net sales compared to the nine months ended September 30, 2023.

The higher sales volumes in the nine months ended September 30, 2024 contributed to a 2.6% increase in net sales as compared to the nine months ended September 30, 2023 .

First Quarter 2025 Compared with First Quarter 2024

Net sales decreased by $47.1 million, or 16.5%, to $237.6 million in the first quarter of 2025 from $284.7 million in the first quarter of 2024.

The decrease in net sales in the first quarter of 2025 was primarily due to lower ethylene sales volumes to Westlake and lower co-products sales volumes to third parties as a result of lower production volumes during the Petro 1 turnaround in the first quarter of 2025 compared to the first quarter of 2024, partially offset by higher ethylene sales prices to Westlake and third parties.

Higher average sales prices in the first quarter of 2025 contributed to an 11.2% increase in net sales compared to the first quarter of 2024.

Lower sales volumes in the first quarter of 2025 contributed to a 27.7% decrease in net sales compared to the first quarter of 2024.

Gross Profit.

Gross profit increased to $320.4 million in the nine months ended September 30, 2024 from $286.8 million in the nine months ended September 30, 2023 .

Gross profit margin in the nine months ended September 30, 2024 was 37.9% , as compared to 32.1% for the nine months ended September 30, 2023.

The increase in gross profit margin was primarily due to higher sales prices and volumes to third parties and lower ethane feedstock costs and natural gas prices in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023.

Gross profit decreased to $54.1 million in the first quarter of 2025 from $102.2 million in the first quarter of 2024.

Gross profit margin percentage in the first quarter of 2025 was 22.8%, as compared to 35.9% for the first quarter of 2024.

The lower gross profit margin was primarily due to higher ethane feedstock and natural gas costs in the first quarter of 2025 compared to the first quarter of 2024.

Selling, General and Administrative Expenses.

Selling, general and administrative expenses of $21.9 million in the nine months ended September 30, 2024 was comparable to selling, general and administrative expenses of $21.9 million in the nine months ended September 30, 2023 .

Selling, general and administrative expenses increased by $0.4 million, or 5.6%, to $7.5 million in the first quarter of 2025 as compared to $7.1 million in the first quarter of 2024.

The increase was mainly attributable to higher service charges from Westlake in the first quarter of 2025 as compared to the first quarter of 2024.

Interest Expense—Westlake.

Interest expense of $19.9 million in the nine months ended September 30, 2024 was comparable to interest expense of $19.9 million in the nine months ended September 30, 2023.

Interest expense of $5.5 million in the first quarter of 2025 decreased from $6.6 million in the first quarter of 2024 mainly due to lower interest rates on the outstanding debt in the first quarter of 2025 as compared to the first quarter of 2024.

Other Income, net .

Other income, net increased by $0.7 million to $3.9 million in the nine months ended September 30, 2024 from $3.2 million in the nine months ended September 30, 2023, primarily due to higher interest earned on the balance with Westlake under the Investment Management Agreement due to higher market interest rates as well as a higher average amount of cash invested in the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023.

Other income, net remained consistent at $1.3 million in the first quarter of 2025 as compared to $1.3 million in the first quarter of 2024.

MLP Distributable Cash Flow.

MLP distributable cash flow increased by $5.7 million to $51.9 million in the nine months ended September 30, 2024 from $46.2 million in the nine months ended September 30, 2023 .

The increase in the nine months ended September 30, 2024 , as compared to the prior-year p eriod, was primarily attributable to increased earnings at OpCo, partially offset by higher reserves for future turnarounds.

EBITDA increased by $36.9 million to $386.8 million in the nine months ended September 30, 2024 from $349.9 million in the nine months ended September 30, 2023.

The increase was primarily due to higher ethylene and co-products sales volumes and prices to third parties, higher ethylene sales volumes to Westlake and lower ethane feedstock costs and natural gas prices during the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023, partially offset by lower ethylene sales prices to Westlake.

CASH FLOW DISCUSSION FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023

MLP distributable cash flow decreased by $12.2 million to $4.7 million in the first quarter of 2025 from $16.9 million in the first quarter of 2024.

The decrease in the first quarter of 2025, as compared to the prior-year period, was primarily attributable to decreased earnings at OpCo and higher maintenance capital expenditures due to the Petro 1 turnaround in the first quarter of 2025.

EBITDA decreased by $49.4 million to $75.0 million in the first quarter of 2025 from $124.4 million in the first quarter of 2024.

The decrease was primarily due to lower ethylene sales volumes to Westlake and lower co-products sales volumes to third parties as a result of lower production volumes during the Petro 1 turnaround and higher ethane feedstock and natural gas costs in the first quarter of 2025 compared to the first quarter of 2024, partially offset by higher ethylene sales prices to Westlake and third parties.

CASH FLOW DISCUSSION FOR THE THREE MONTHS ENDED MARCH 31, 2025 AND 2024

Operating Activities

Operating activities provided cash of $352.5 million in the first nine months of 2024 compared to cash provided by operating activities of $344.3 million in the first nine months of 2023.

The $8.2 million increase in cash flows from operating activities was mainly due to lower cash used for turnaround activity compared to the first nine months of 2023.

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 $1.2 million in the first nine months of 2024 as compared to $39.5 million of cash provided in the first nine months of 2023, resulting in an overall unfavorable change of $38.3 million.

The unfavorable change in working capital was mainly attributable to unfavorable changes in net accounts receivable—Westlake, accounts payable—third parties and accrued and other liabilities.

The unfavorable change in accounts receivable, net—Westlake was primarily due to a smaller buyer deficiency fee and Shortfall collected in the first nine months of 2024 as compared to the first nine months of 2023, partially offset by changes in the payable with Westlake due to fluctuating ethane feedstock costs.

Unfavorable changes in accounts payable—third parties and accrued and other liabilities were due to the timing of payment of accruals and the impact of the Calvert City Olefins turnaround activities on these balances in the first nine months of 2023.

Operating activities provided cash of $45.8 million in the first three months of 2025 compared to cash provided by operating activities of $104.6 million in the first three months of 2024.

The $58.8 million decrease in cash flows from operating activities was mainly due to cash used in connection with the Petro 1 turnaround and lower income from operations in the first three months of 2025 compared to the first three months of 2024, partially offset by an increase in cash provided by working capital.

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 $81.7 million in the first three months of 2025 as compared to $9.7 million of cash used in the first three months of 2024, resulting in an overall favorable change of $91.4 million.

The favorable change in working capital was mainly attributable to favorable changes in accounts payable—third parties and accrued and other liabilities due to the impact of the Petro 1 turnaround activities and the timing of payments in the first three months of 2025.

Investing Activities

Net cash used for investing activities in the first nine months of 2024 was $50.5 million as compared to net cash used for investing activities of $53.1 million in the first nine months of 2023, resulting in an overall favorable change of $2.6 million in investing cash flows.

During the first nine months of 2024, there were net investments with Westlake of $15.0 million under the Investment Management Agreement, whereas during the first nine months of 2023, there were net investments with Westlake of $19.1 million under the Investment Management Agreement.

Capital expenditures during the first nine months of 2024 were slightly higher than the first nine months of 2023.

For both the comparative periods, these capital expenditures were primarily related to projects to increase production capacity or reduce costs, maintenance costs and safety and environmental projects at our facilities.

Net cash provided by investing activities in the first three months of 2025 was $14.0 million as compared to net cash used for investing activities of $9.8 million in the first three months of 2024, resulting in an overall favorable change of $23.8 million in investing cash flows.

During the first three months of 2025, there were maturities of investments with Westlake of $30.0 million under the Investment Management Agreement, whereas during the first three months of 2024, there were no investing activities under the Investment Management Agreement.

Capital expenditures increased to $16.0 million in the first three months of 2025 as compared to $9.8 million in the first three months of 2024 due to the Petro 1 turnaround.

Capital expenditures in the first three months of 2025 and 2024 were primarily related to projects to increase production capacity or reduce costs, maintenance costs and safety and environmental projects at our facilities.

Financing Activities

Net cash used for financing activities in the first nine months of 2024 was $300.4 million as compared to net cash used for financing activities of $290.1 million in the first nine months of 2023.

The cash outflows in the first nine months of 2024 were related to distributions of $250.6 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 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.

Net cash used for financing activities in the first three months of 2025 was $68.5 million as compared to net cash used for financing activities of $97.7 million in the first three months of 2024.

The cash outflows in the first three months of 2025 were related to distributions of $51.9 million to the noncontrolling interest retained in OpCo by Westlake and of $16.6 million to unitholders by the Partnership.

The cash outflows in the first three months of 2024 were related to distributions of $81.0 million to the noncontrolling interest retained in OpCo by Westlake and of $16.6 million to unitholders by the Partnership.

LIQUIDITY AND CAPITAL RESOURCES

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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 September 30, 2024.

No common units had been issued under the ATM Program as of March 31, 2025.

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.

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By reserving additional cash annually, we intend to reduce the variability in OpCo's cash flow.

Although we had previously planned to commence the next maintenance turnaround at the Petro 1 ethylene unit in the third quarter of 2024, we made the decision to defer the planned turnaround in order to maintain production and capitalize on higher average third-party ethylene sales prices during the second half of 2024.

We expect to commence the next planned maintenance turnaround at Petro 1 in the first quarter of 2025.

Westlake's purchase price for ethylene purchased under the Ethylene Sales Agreement includes a component (adjusted annually) designed to cover, over the long term, substantially all of OpCo's turnaround expenditures.

Westlake's purchase price for its minimum commitment of ethylene under the Ethylene Sales Agreement includes a component (adjusted annually) designed to cover, over the long term, substantially all of OpCo's turnaround expenditures.

Our cash is generated from cash distributions from OpCo.

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Per the terms of the Investment Management Agreement, cash invested with Westlake 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.

On October 30, 2024, 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, 2024 to unitholders of record as of November 12, 2024, 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, 2024.

On April 30, 2025, the board of directors of Westlake Chemical Partners GP LLC, our general partner, approved a quarterly distribution of $0.4714 per common unit payable on May 29, 2025 to unitholders of record as of May 13, 2025, which equates to a total amount of approximately $16.6 million per quarter, or approximately $66.4 million per year in aggregate, based on the number of common units outstanding on March 31, 2025.

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.

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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 nine months ended September 30, 2024 and 2023.

Total capital expenditures for the nine months ended September 30, 2024 and 2023 were $35.5 million and $34.0 million, respectively.

No such funding was required by OpCo during the three months ended March 31, 2025 and 2024.

Total capital expenditures for the three months ended March 31, 2025 and 2024 were $16.0 million and $9.8 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 September 30, 2024, our cash and cash equivalents totaled $60.2 million.

As of March 31, 2025, our cash and cash equivalents totaled $49.6 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.

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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 $109.5 million of cash invested under the Investment Management Agreement at September 30, 2024.

The Partnership had $104.5 million of cash invested under the Investment Management Agreement at March 31, 2025.

OpCo Revolver

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The Applicable Margin under the OpCo Revolver is 1.75%.

As of September 30, 2024, 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 March 31, 2025, 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").

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

As of September 30, 2024, 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.

As of March 31, 2025, 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 partnership purposes.

Off-Balance Sheet Arrangements

Recent Accounting Pronouncements

See Note 1 to the consolidated financial statements included in Item 1 of this Form 10-Q for a full description of recent accounting pronouncements, including expected date of adoption and estimated effect on results of operations and financial condition.

FORWARD-LOOKING STATEMENTS

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• expected mitigation of exposure to commodity price fluctuations;

• turnaround activities (such as our plan to commence Petro 1 turnaround in the first quarter of 2025) and the variability of OpCo's cash flow;

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

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

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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