Toggle SGML Header (+)


Section 1: 10-Q (10-Q)

Document
false--12-31Q2202000016046650.020.020.020.0214122230210723151412223021072315141222302107231514122230210723151.40631.68751.29381.68751.40631 0001604665 2020-01-01 2020-06-30 0001604665 2020-07-30 0001604665 2020-06-30 0001604665 2019-12-31 0001604665 wlkp:ParentCompanyAndSubsidiariesExcludingReportingEntityAndSubsidiariesMember wlkp:CommonUnitsMember us-gaap:LimitedPartnerMember 2019-12-31 0001604665 wlkp:UnidentifiedThirdPartiesMember wlkp:CommonUnitsMember us-gaap:LimitedPartnerMember 2019-12-31 0001604665 wlkp:ParentCompanyAndSubsidiariesExcludingReportingEntityAndSubsidiariesMember us-gaap:GeneralPartnerMember 2019-12-31 0001604665 wlkp:ParentCompanyAndSubsidiariesExcludingReportingEntityAndSubsidiariesMember wlkp:CommonUnitsMember us-gaap:LimitedPartnerMember 2020-06-30 0001604665 wlkp:ParentCompanyAndSubsidiariesExcludingReportingEntityAndSubsidiariesMember us-gaap:GeneralPartnerMember 2020-06-30 0001604665 wlkp:UnidentifiedThirdPartiesMember wlkp:CommonUnitsMember us-gaap:LimitedPartnerMember 2020-06-30 0001604665 wlkp:ParentCompanyAndSubsidiariesExcludingReportingEntityAndSubsidiariesMember wlkp:CommonUnitsMember 2019-12-31 0001604665 wlkp:UnidentifiedThirdPartiesMember wlkp:CommonUnitsMember 2020-06-30 0001604665 wlkp:ParentCompanyAndSubsidiariesExcludingReportingEntityAndSubsidiariesMember wlkp:CommonUnitsMember 2020-06-30 0001604665 wlkp:UnidentifiedThirdPartiesMember wlkp:CommonUnitsMember 2019-12-31 0001604665 2019-04-01 2019-06-30 0001604665 2020-04-01 2020-06-30 0001604665 wlkp:ParentCompanyAndSubsidiariesExcludingReportingEntityAndSubsidiariesMember wlkp:CommonUnitsMember 2019-04-01 2019-06-30 0001604665 2019-01-01 2019-06-30 0001604665 wlkp:UnidentifiedThirdPartiesMember wlkp:CommonUnitsMember 2019-04-01 2019-06-30 0001604665 us-gaap:ProductAndServiceOtherMember 2019-01-01 2019-06-30 0001604665 wlkp:CommonUnitsMember 2020-04-01 2020-06-30 0001604665 wlkp:ParentCompanyAndSubsidiariesExcludingReportingEntityAndSubsidiariesMember wlkp:CommonUnitsMember 2019-01-01 2019-06-30 0001604665 wlkp:CommonUnitsMember 2020-01-01 2020-06-30 0001604665 wlkp:ParentCompanyAndSubsidiariesExcludingReportingEntityAndSubsidiariesMember wlkp:CommonUnitsMember 2020-01-01 2020-06-30 0001604665 wlkp:CommonUnitsMember 2019-04-01 2019-06-30 0001604665 wlkp:UnidentifiedThirdPartiesMember wlkp:CommonUnitsMember 2020-04-01 2020-06-30 0001604665 wlkp:UnidentifiedThirdPartiesMember wlkp:CommonUnitsMember 2019-01-01 2019-06-30 0001604665 wlkp:ParentCompanyAndSubsidiariesExcludingReportingEntityAndSubsidiariesMember wlkp:CommonUnitsMember 2020-04-01 2020-06-30 0001604665 us-gaap:ProductAndServiceOtherMember 2020-04-01 2020-06-30 0001604665 us-gaap:ProductAndServiceOtherMember 2020-01-01 2020-06-30 0001604665 wlkp:UnidentifiedThirdPartiesMember wlkp:CommonUnitsMember 2020-01-01 2020-06-30 0001604665 wlkp:CommonUnitsMember 2019-01-01 2019-06-30 0001604665 us-gaap:ProductAndServiceOtherMember 2019-04-01 2019-06-30 0001604665 us-gaap:NoncontrollingInterestMember 2020-01-01 2020-03-31 0001604665 2020-01-01 2020-03-31 0001604665 us-gaap:NoncontrollingInterestMember 2020-03-31 0001604665 us-gaap:NoncontrollingInterestMember 2020-04-01 2020-06-30 0001604665 wlkp:UnidentifiedThirdPartiesMember wlkp:CommonUnitsMember us-gaap:LimitedPartnerMember 2020-04-01 2020-06-30 0001604665 wlkp:ParentCompanyAndSubsidiariesExcludingReportingEntityAndSubsidiariesMember us-gaap:GeneralPartnerMember 2020-03-31 0001604665 wlkp:UnidentifiedThirdPartiesMember wlkp:CommonUnitsMember us-gaap:LimitedPartnerMember 2020-01-01 2020-03-31 0001604665 wlkp:ParentCompanyAndSubsidiariesExcludingReportingEntityAndSubsidiariesMember wlkp:CommonUnitsMember us-gaap:LimitedPartnerMember 2020-03-31 0001604665 wlkp:ParentCompanyAndSubsidiariesExcludingReportingEntityAndSubsidiariesMember wlkp:CommonUnitsMember us-gaap:LimitedPartnerMember 2020-01-01 2020-03-31 0001604665 us-gaap:NoncontrollingInterestMember 2019-12-31 0001604665 wlkp:UnidentifiedThirdPartiesMember wlkp:CommonUnitsMember us-gaap:LimitedPartnerMember 2020-03-31 0001604665 us-gaap:NoncontrollingInterestMember 2020-06-30 0001604665 wlkp:ParentCompanyAndSubsidiariesExcludingReportingEntityAndSubsidiariesMember wlkp:CommonUnitsMember us-gaap:LimitedPartnerMember 2020-04-01 2020-06-30 0001604665 2020-03-31 0001604665 us-gaap:NoncontrollingInterestMember 2018-12-31 0001604665 wlkp:ParentCompanyAndSubsidiariesExcludingReportingEntityAndSubsidiariesMember wlkp:CommonUnitsMember us-gaap:LimitedPartnerMember 2019-01-01 2019-03-31 0001604665 2018-12-31 0001604665 2019-01-01 2019-03-31 0001604665 wlkp:UnidentifiedThirdPartiesMember wlkp:CommonUnitsMember us-gaap:LimitedPartnerMember 2019-06-30 0001604665 wlkp:UnidentifiedThirdPartiesMember wlkp:CommonUnitsMember us-gaap:LimitedPartnerMember 2019-01-01 2019-03-31 0001604665 2019-03-31 0001604665 wlkp:ParentCompanyAndSubsidiariesExcludingReportingEntityAndSubsidiariesMember us-gaap:GeneralPartnerMember 2019-01-01 2019-03-31 0001604665 us-gaap:NoncontrollingInterestMember 2019-04-01 2019-06-30 0001604665 wlkp:UnidentifiedThirdPartiesMember wlkp:CommonUnitsMember us-gaap:LimitedPartnerMember 2019-04-01 2019-06-30 0001604665 wlkp:ParentCompanyAndSubsidiariesExcludingReportingEntityAndSubsidiariesMember us-gaap:GeneralPartnerMember 2019-03-31 0001604665 wlkp:ParentCompanyAndSubsidiariesExcludingReportingEntityAndSubsidiariesMember wlkp:CommonUnitsMember us-gaap:LimitedPartnerMember 2019-03-31 0001604665 wlkp:ParentCompanyAndSubsidiariesExcludingReportingEntityAndSubsidiariesMember us-gaap:GeneralPartnerMember 2018-12-31 0001604665 wlkp:ParentCompanyAndSubsidiariesExcludingReportingEntityAndSubsidiariesMember wlkp:CommonUnitsMember us-gaap:LimitedPartnerMember 2019-06-30 0001604665 us-gaap:NoncontrollingInterestMember 2019-01-01 2019-03-31 0001604665 us-gaap:NoncontrollingInterestMember 2019-06-30 0001604665 wlkp:ParentCompanyAndSubsidiariesExcludingReportingEntityAndSubsidiariesMember wlkp:CommonUnitsMember us-gaap:LimitedPartnerMember 2018-12-31 0001604665 wlkp:UnidentifiedThirdPartiesMember wlkp:CommonUnitsMember us-gaap:LimitedPartnerMember 2018-12-31 0001604665 wlkp:ParentCompanyAndSubsidiariesExcludingReportingEntityAndSubsidiariesMember us-gaap:GeneralPartnerMember 2019-06-30 0001604665 2019-06-30 0001604665 us-gaap:NoncontrollingInterestMember 2019-03-31 0001604665 wlkp:ParentCompanyAndSubsidiariesExcludingReportingEntityAndSubsidiariesMember wlkp:CommonUnitsMember us-gaap:LimitedPartnerMember 2019-04-01 2019-06-30 0001604665 wlkp:UnidentifiedThirdPartiesMember wlkp:CommonUnitsMember us-gaap:LimitedPartnerMember 2019-03-31 0001604665 wlkp:ParentCompanyAndSubsidiariesExcludingReportingEntityAndSubsidiariesMember wlkp:WestlakeChemicalOpCoLPMember us-gaap:MajorityOwnedSubsidiaryUnconsolidatedMember 2019-03-29 2019-03-29 0001604665 us-gaap:LimitedPartnerMember 2014-08-04 2014-08-04 0001604665 wlkp:WestlakeChemicalOpCoLPMember srt:AffiliatedEntityMember 2019-03-29 2019-03-29 0001604665 wlkp:WestlakeChemicalOpCoLPMember srt:AffiliatedEntityMember 2014-08-04 2014-08-04 0001604665 wlkp:WestlakeChemicalOpCoGPLLCMember us-gaap:LimitedLiabilityCompanyMember 2014-08-04 2014-08-04 0001604665 us-gaap:OtherAssetsMember 2020-04-01 2020-06-30 0001604665 us-gaap:OtherAssetsMember 2019-04-01 2019-06-30 0001604665 us-gaap:OtherAssetsMember 2019-01-01 2019-06-30 0001604665 us-gaap:OtherAssetsMember 2020-01-01 2020-06-30 0001604665 wlkp:IDRHoldersMember 2020-04-01 2020-06-30 0001604665 us-gaap:CashDistributionMember wlkp:CommonAndSubordinatedUnitsMember 2020-01-01 2020-06-30 0001604665 us-gaap:CashDistributionMember wlkp:CommonAndSubordinatedUnitsMember us-gaap:SubsequentEventMember 2020-07-31 2020-07-31 0001604665 us-gaap:CashDistributionMember wlkp:CommonUnitsMember 2019-04-01 2019-06-30 0001604665 us-gaap:CashDistributionMember wlkp:CommonUnitsMember 2020-04-01 2020-06-30 0001604665 us-gaap:CashDistributionMember wlkp:CommonUnitsMember 2020-01-01 2020-06-30 0001604665 us-gaap:CashDistributionMember wlkp:CommonUnitsMember 2019-01-01 2019-06-30 0001604665 wlkp:IDRHoldersMember 2019-01-01 2019-06-30 0001604665 wlkp:IDRHoldersMember 2019-04-01 2019-06-30 0001604665 wlkp:CashDistributionTrancheOneMember wlkp:IDRHoldersMember 2020-01-01 2020-06-30 0001604665 wlkp:CashDistributionTrancheThreeMember wlkp:UnitHoldersMember 2020-01-01 2020-06-30 0001604665 wlkp:CashDistributionTrancheTwoMember wlkp:UnitHoldersMember 2020-01-01 2020-06-30 0001604665 wlkp:CashDistributionTrancheTwoMember wlkp:IDRHoldersMember 2020-01-01 2020-06-30 0001604665 wlkp:CashDistributionTrancheOneMember wlkp:UnitHoldersMember 2020-01-01 2020-06-30 0001604665 wlkp:CashDistributionTrancheThreeMember wlkp:IDRHoldersMember 2020-01-01 2020-06-30 0001604665 wlkp:IDRHoldersMember 2020-01-01 2020-06-30 0001604665 srt:MinimumMember wlkp:CashDistributionTrancheOneMember 2020-01-01 2020-06-30 0001604665 srt:MaximumMember wlkp:CashDistributionTrancheTwoMember 2020-01-01 2020-06-30 0001604665 srt:MinimumMember wlkp:CashDistributionTrancheThreeMember 2020-01-01 2020-06-30 0001604665 srt:MinimumMember wlkp:CashDistributionTrancheTwoMember 2020-01-01 2020-06-30 0001604665 srt:MaximumMember wlkp:CashDistributionTrancheOneMember 2020-01-01 2020-06-30 0001604665 2019-03-29 2019-03-29 0001604665 us-gaap:LimitedPartnerMember 2019-03-29 2019-03-29 0001604665 2018-10-04 2018-10-04 0001604665 srt:AffiliatedEntityMember 2019-03-29 2019-03-29 0001604665 wlkp:ParentCompanyAndSubsidiariesExcludingReportingEntityAndSubsidiariesMember wlkp:OtherServiceChargesMember srt:AffiliatedEntityMember 2019-01-01 2019-06-30 0001604665 wlkp:ParentCompanyAndSubsidiariesExcludingReportingEntityAndSubsidiariesMember wlkp:OtherServiceChargesMember srt:AffiliatedEntityMember 2020-01-01 2020-06-30 0001604665 wlkp:ParentCompanyAndSubsidiariesExcludingReportingEntityAndSubsidiariesMember wlkp:FeedstockPurchasedMember srt:AffiliatedEntityMember 2019-04-01 2019-06-30 0001604665 wlkp:ParentCompanyAndSubsidiariesExcludingReportingEntityAndSubsidiariesMember wlkp:FeedstockPurchasedMember srt:AffiliatedEntityMember 2020-04-01 2020-06-30 0001604665 wlkp:ParentCompanyAndSubsidiariesExcludingReportingEntityAndSubsidiariesMember wlkp:OtherServiceChargesMember srt:AffiliatedEntityMember 2019-04-01 2019-06-30 0001604665 wlkp:ParentCompanyAndSubsidiariesExcludingReportingEntityAndSubsidiariesMember srt:AffiliatedEntityMember 2019-01-01 2019-06-30 0001604665 wlkp:ParentCompanyAndSubsidiariesExcludingReportingEntityAndSubsidiariesMember wlkp:OtherServiceChargesMember srt:AffiliatedEntityMember 2020-04-01 2020-06-30 0001604665 wlkp:ParentCompanyAndSubsidiariesExcludingReportingEntityAndSubsidiariesMember wlkp:FeedstockPurchasedMember srt:AffiliatedEntityMember 2020-01-01 2020-06-30 0001604665 wlkp:ParentCompanyAndSubsidiariesExcludingReportingEntityAndSubsidiariesMember wlkp:FeedstockPurchasedMember srt:AffiliatedEntityMember 2019-01-01 2019-06-30 0001604665 wlkp:ParentCompanyAndSubsidiariesExcludingReportingEntityAndSubsidiariesMember srt:AffiliatedEntityMember 2020-01-01 2020-06-30 0001604665 wlkp:ParentCompanyAndSubsidiariesExcludingReportingEntityAndSubsidiariesMember srt:AffiliatedEntityMember 2019-04-01 2019-06-30 0001604665 wlkp:ParentCompanyAndSubsidiariesExcludingReportingEntityAndSubsidiariesMember srt:AffiliatedEntityMember 2020-04-01 2020-06-30 0001604665 wlkp:ParentCompanyAndSubsidiariesExcludingReportingEntityAndSubsidiariesMember us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember srt:AffiliatedEntityMember 2020-01-01 2020-06-30 0001604665 wlkp:ParentCompanyAndSubsidiariesExcludingReportingEntityAndSubsidiariesMember us-gaap:AccruedLiabilitiesMember srt:AffiliatedEntityMember 2019-12-31 0001604665 wlkp:ParentCompanyAndSubsidiariesExcludingReportingEntityAndSubsidiariesMember us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember srt:AffiliatedEntityMember 2020-04-01 2020-06-30 0001604665 wlkp:ParentCompanyAndSubsidiariesExcludingReportingEntityAndSubsidiariesMember us-gaap:OtherNonoperatingIncomeExpenseMember srt:AffiliatedEntityMember 2019-04-01 2019-06-30 0001604665 wlkp:ParentCompanyAndSubsidiariesExcludingReportingEntityAndSubsidiariesMember us-gaap:AccruedLiabilitiesMember srt:AffiliatedEntityMember 2020-06-30 0001604665 wlkp:ParentCompanyAndSubsidiariesExcludingReportingEntityAndSubsidiariesMember us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember srt:AffiliatedEntityMember 2019-01-01 2019-06-30 0001604665 wlkp:ParentCompanyAndSubsidiariesExcludingReportingEntityAndSubsidiariesMember us-gaap:OtherNonoperatingIncomeExpenseMember srt:AffiliatedEntityMember 2020-04-01 2020-06-30 0001604665 wlkp:ParentCompanyAndSubsidiariesExcludingReportingEntityAndSubsidiariesMember us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember srt:AffiliatedEntityMember 2019-04-01 2019-06-30 0001604665 wlkp:ParentCompanyAndSubsidiariesExcludingReportingEntityAndSubsidiariesMember srt:AffiliatedEntityMember 2019-12-31 0001604665 wlkp:ParentCompanyAndSubsidiariesExcludingReportingEntityAndSubsidiariesMember srt:AffiliatedEntityMember 2020-06-30 0001604665 wlkp:WestlakeChemicalOpCoLPMember srt:AffiliatedEntityMember wlkp:AlternateBaseRateDomain 2019-03-29 2019-03-29 0001604665 wlkp:WestlakeChemicalOpCoLPMember srt:AffiliatedEntityMember 2019-03-29 2019-03-29 0001604665 2019-04-30 2019-04-30 0001604665 wlkp:WestlakeChemicalOpCoLPMember srt:AffiliatedEntityMember us-gaap:LondonInterbankOfferedRateLIBORMember 2019-03-29 2019-03-29 0001604665 wlkp:MLPRevolverMember wlkp:SeniorUnsecuredRevolvingCreditFacilityMember us-gaap:LimitedPartnerMember 2019-12-31 0001604665 wlkp:OpCoRevolverMember wlkp:SeniorUnsecuredRevolvingCreditFacilityMember us-gaap:LimitedPartnerMember 2020-06-30 0001604665 wlkp:OpCoRevolverMember wlkp:SeniorUnsecuredRevolvingCreditFacilityMember us-gaap:LimitedPartnerMember 2019-12-31 0001604665 wlkp:MLPRevolverMember wlkp:SeniorUnsecuredRevolvingCreditFacilityMember us-gaap:LimitedPartnerMember 2020-06-30 0001604665 wlkp:OpCoRevolverMember wlkp:SeniorUnsecuredRevolvingCreditFacilityMember us-gaap:LimitedPartnerMember us-gaap:LondonInterbankOfferedRateLIBORMember 2020-01-01 2020-06-30 0001604665 wlkp:MLPRevolverMember wlkp:SeniorUnsecuredRevolvingCreditFacilityMember us-gaap:LimitedPartnerMember us-gaap:LondonInterbankOfferedRateLIBORMember 2019-01-01 2019-12-31 0001604665 wlkp:MLPRevolverMember wlkp:SeniorUnsecuredRevolvingCreditFacilityMember us-gaap:LimitedPartnerMember us-gaap:LondonInterbankOfferedRateLIBORMember 2020-01-01 2020-06-30 0001604665 wlkp:OpCoRevolverMember wlkp:SeniorUnsecuredRevolvingCreditFacilityMember us-gaap:LimitedPartnerMember us-gaap:LondonInterbankOfferedRateLIBORMember 2019-01-01 2019-12-31 0001604665 2020-03-31 2020-03-31 0001604665 us-gaap:CostOfSalesMember 2020-01-01 2020-06-30 0001604665 us-gaap:SalesMember 2020-04-01 2020-06-30 0001604665 us-gaap:CostOfSalesMember 2020-04-01 2020-06-30 0001604665 us-gaap:CostOfSalesMember 2019-01-01 2019-06-30 0001604665 2019-12-31 2019-12-31 0001604665 us-gaap:SalesMember 2020-01-01 2020-06-30 0001604665 us-gaap:SalesMember 2019-01-01 2019-06-30 0001604665 us-gaap:SalesMember 2019-04-01 2019-06-30 0001604665 us-gaap:CostOfSalesMember 2019-04-01 2019-06-30 0001604665 wlkp:MLPRevolverMember wlkp:SeniorUnsecuredRevolvingCreditFacilityMember 2019-12-31 0001604665 wlkp:MLPRevolverMember wlkp:SeniorUnsecuredRevolvingCreditFacilityMember 2020-06-30 0001604665 wlkp:OpCoRevolverMember wlkp:SeniorUnsecuredRevolvingCreditFacilityMember 2020-06-30 0001604665 wlkp:OpCoRevolverMember wlkp:SeniorUnsecuredRevolvingCreditFacilityMember 2019-12-31 xbrli:pure utreg:Rate iso4217:USD xbrli:shares xbrli:shares utreg:lb utreg:gal iso4217:USD
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
 
 
 
Form 10-Q
 
 
 
 
 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended
June 30, 2020
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the Transition Period from                    to                    
Commission File No. 001-36567
 
 
 
 
 
Westlake Chemical Partners LP
(Exact name of registrant as specified in its charter)
 
 
 
 
 

Delaware
 
32-0436529
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. Employer
Identification No.)
2801 Post Oak Boulevard, Suite 600
Houston, Texas 77056
(Address of principal executive offices, including zip code)
(713) 585-2900
(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common units representing limited partnership interests
WLKP
The New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes   x     No   ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).     Yes   x     No   ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of "large accelerated filer," "accelerated filer", "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act:
Large accelerated filer
 
¨
 
Accelerated filer
 
x
Non-accelerated filer
 
¨ 
 
Smaller reporting company
 
 
 
 
 
Emerging growth company
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ¨  
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)     Yes        No   x

The registrant had 35,194,545 common units outstanding as of July 30, 2020.



INDEX

 
 
Item
Page
 
 
 
 


Table of Contents


PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
WESTLAKE CHEMICAL PARTNERS LP
CONSOLIDATED BALANCE SHEETS
(Unaudited)
 
 
June 30,
2020
 
December 31,
2019
 
 
 
 
 
 
 
(in thousands of dollars, except unit amounts)
ASSETS
 
 
 
 
Current assets
 
 
 
 
Cash and cash equivalents
 
$
23,618

 
$
19,923

Receivable under the Investment Management Agreement—Westlake Chemical Corporation ("Westlake")
 
171,391

 
162,773

Accounts receivable, net—Westlake
 
42,354

 
42,847

Accounts receivable, net—third parties
 
7,007

 
9,914

Inventories
 
1,529

 
2,484

Prepaid expenses and other current assets
 
65

 
470

Total current assets
 
245,964

 
238,411

Property, plant and equipment, net
 
1,077,499

 
1,102,995

Goodwill
 
5,814

 
5,814

Deferred charges and other assets, net
 
39,750

 
46,236

Total assets
 
$
1,369,027

 
$
1,393,456

LIABILITIES
 
 
 
 
Current liabilities
 
 
 
 
Accounts payable—Westlake
 
$
5,440

 
$
15,201

Accounts payable—third parties
 
8,846

 
6,141

Accrued and other liabilities
 
16,807

 
17,507

Total current liabilities
 
31,093

 
38,849

Long-term debt payable to Westlake
 
399,674

 
399,674

Deferred income taxes
 
1,667

 
1,649

Other liabilities
 
740

 
1,149

Total liabilities
 
433,174

 
441,321

Commitments and contingencies (Note 13)
 


 


EQUITY
 
 
 
 
Common unitholders—publicly and privately held (21,072,315 and 21,072,315 units issued
and outstanding at June 30, 2020 and December 31, 2019, respectively)
 
471,392

 
471,736

Common unitholder—Westlake (14,122,230 and 14,122,230 units issued and outstanding at
June 30, 2020 and December 31, 2019, respectively)
 
48,120

 
48,350

General partner—Westlake
 
(242,572
)
 
(242,572
)
Total Westlake Chemical Partners LP partners' capital
 
276,940

 
277,514

Noncontrolling interest in Westlake Chemical OpCo LP ("OpCo")
 
658,913

 
674,621

Total equity
 
935,853

 
952,135

Total liabilities and equity
 
$
1,369,027

 
$
1,393,456

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

1

Table of Contents


WESTLAKE CHEMICAL PARTNERS LP
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
 
2020

2019
 
2020
 
2019
 
 
 
 
 
 
 
 
 
 
 
(in thousands of dollars, except unit amounts and per unit data)
Revenue
 
 
 
 
 
 
 
 
Net sales—Westlake
 
$
227,431

 
$
230,047

 
$
442,259

 
$
487,087

Net co-product, ethylene and other sales—third parties
 
11,069

 
40,015

 
46,790

 
82,061

Total net sales
 
238,500

 
270,062

 
489,049

 
569,148

Cost of sales
 
148,470

 
178,104

 
295,471

 
386,536

Gross profit
 
90,030

 
91,958

 
193,578

 
182,612

Selling, general and administrative expenses
 
6,139

 
7,639

 
12,335

 
14,612

Income from operations
 
83,891

 
84,319

 
181,243

 
168,000

Other income (expense)
 
 
 
 
 
 
 
 
Interest expense—Westlake
 
(3,431
)
 
(5,125
)
 
(7,381
)
 
(11,025
)
Other income, net
 
123

 
1,153

 
708

 
1,968

Income before income taxes
 
80,583

 
80,347

 
174,570

 
158,943

Income tax provision
 
206

 
237

 
423

 
437

Net income
 
80,377

 
80,110

 
174,147

 
158,506

Less: Net income attributable to noncontrolling interest in OpCo
 
65,517

 
66,377

 
141,540

 
129,818

Net income attributable to Westlake Chemical Partners LP and limited partners' interest in net income
 
$
14,860

 
$
13,733

 
$
32,607

 
$
28,688

Net income per limited partner unit attributable to Westlake Chemical Partners LP per limited partner unit (basic and diluted)
 
 
 
 
 
 
 
 
Common units
 
$
0.43

 
$
0.39

 
$
0.93

 
$
0.85

Weighted average limited partner units outstanding (basic and diluted)
 
 
 
 
 
 
 
 
Common units—publicly and privately held
 
21,072,315

 
21,065,959

 
21,072,315

 
19,652,417

Common units—Westlake
 
14,122,230

 
14,122,230

 
14,122,230

 
14,122,230

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

2

Table of Contents


WESTLAKE CHEMICAL PARTNERS LP
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Unaudited)
 
 
Partnership
 
 
 
 
 
Common Unitholders
Public and Privately Held
 
Common Unitholder
Westlake
 
General
Partner
Westlake
 
Noncontrolling
Interests
in OpCo
 
Total
 
 
 
 
 
 
 
 
 
 
 
 
(in thousands of dollars)
Balance at December 31, 2019
 
$
471,736

 
$
48,350

 
$
(242,572
)
 
$
674,621

 
$
952,135

 
 
 
 
 
 
 
 
 
 
 
Net income
 
10,626

 
7,121

 

 
76,023

 
93,770

Quarterly distribution to unitholders
 
(9,934
)
 
(6,657
)
 

 

 
(16,591
)
Quarterly distribution to noncontrolling interest retained in OpCo by Westlake
 

 

 

 
(79,223
)
 
(79,223
)
Balance at March 31, 2020
 
$
472,428

 
$
48,814

 
$
(242,572
)
 
$
671,421

 
$
950,091

 
 
 
 
 
 
 
 
 
 
 
Net income
 
8,897

 
5,963

 

 
65,517

 
80,377

Quarterly distribution to unitholders
 
(9,933
)
 
(6,657
)
 

 

 
(16,590
)
Quarterly distribution to noncontrolling interest retained in OpCo by Westlake
 

 

 

 
(78,025
)
 
(78,025
)
Balance at June 30, 2020
 
$
471,392

 
$
48,120

 
$
(242,572
)
 
$
658,913

 
$
935,853


3

Table of Contents



 
 
Partnership
 
 
 
 
 
Common Unitholders—
Public and Privately Held
 
Common Unitholder—
Westlake
 
General
Partner—
Westlake
 
Noncontrolling
Interests
in OpCo
 
Total
 
 
 
 
 
 
 
 
 
 
 
 
(in thousands of dollars)
Balance at December 31, 2018
 
$
409,608

 
$
48,774

 
$
(242,572
)
 
$
718,271

 
$
934,081

 
 
 
 
 
 
 
 
 
 
 
Net income
 
8,422

 
6,533

 

 
63,441

 
78,396

Net proceeds from private placement of common units
 
62,934

 

 

 

 
62,934

Quarterly distribution to unitholders
 
(7,845
)
 
(6,112
)
 

 

 
(13,957
)
Quarterly distribution to noncontrolling interest retained in OpCo by Westlake
 

 

 

 
(81,507
)
 
(81,507
)
Balance at March 31, 2019
 
$
473,119

 
$
49,195

 
$
(242,572
)
 
$
700,205

 
$
979,947

 
 
 
 
 
 
 
 
 
 
 
Net income
 
8,222

 
5,511

 

 
66,377

 
80,110

Offering costs related to private placement of common units
 
(18
)
 

 

 

 
(18
)
Quarterly distributions to unitholders
 
(9,379
)
 
(6,287
)
 

 

 
(15,666
)
Quarterly distribution to noncontrolling interest retained in OpCo by Westlake
 

 

 

 
(72,259
)
 
(72,259
)
Balance at June 30, 2019
 
$
471,944

 
$
48,419

 
$
(242,572
)
 
$
694,323

 
$
972,114


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

4

Table of Contents


WESTLAKE CHEMICAL PARTNERS LP
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 
 
Six Months Ended June 30,
 
 
2020
 
2019
 
 
 
 
 
 
 
(in thousands of dollars)
Cash flows from operating activities
 
 
 
 
Net income
 
$
174,147

 
$
158,506

Adjustments to reconcile net income to net cash provided by operating activities
 
 
 
 
Depreciation and amortization
 
51,844

 
53,701

Loss from disposition of property, plant and equipment
 
446

 
458

Other gains, net
 
(310
)
 
(181
)
Changes in operating assets and liabilities
 
 
 
 
Accounts receivable—third parties
 
3,235

 
(3,821
)
Net accounts receivable—Westlake
 
(8,890
)
 
419

Inventories
 
955

 
(402
)
Prepaid expenses and other current assets
 
405

 
275

Accounts payable
 
1,207

 
2,791

Accrued and other liabilities
 
998

 
2,096

Other, net
 
(318
)
 
(170
)
Net cash provided by operating activities
 
223,719

 
213,672

Cash flows from investing activities
 
 
 
 
Additions to property, plant and equipment
 
(20,595
)
 
(25,582
)
Maturities of investments with Westlake under the Investment Management Agreement
 
181,000

 
344,445

Investments with Westlake under the Investment Management Agreement
 
(190,000
)
 
(336,445
)
Other
 

 
46

Net cash used for investing activities
 
(29,595
)
 
(17,536
)
Cash flows from financing activities
 
 
 
 
Net proceeds from private placement of common units
 

 
62,916

Proceeds from debt payable to Westlake
 

 
123,511

Repayment of debt payable to Westlake
 

 
(201,445
)
Quarterly distributions to noncontrolling interest retained in OpCo by Westlake
 
(157,248
)
 
(153,766
)
Quarterly distributions to unitholders
 
(33,181
)
 
(29,623
)
Net cash used for financing activities
 
(190,429
)
 
(198,407
)
Net increase (decrease) in cash and cash equivalents
 
3,695

 
(2,271
)
Cash and cash equivalents at beginning of period
 
19,923

 
19,744

Cash and cash equivalents at end of period
 
$
23,618

 
$
17,473

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

5

Table of Contents
WESTLAKE CHEMICAL PARTNERS LP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSContinued
(Unaudited)
(in thousands of dollars, except unit amounts and per unit data)


1. Description of Business and Basis of Presentation
Description of Business
Westlake Chemical Partners LP (the "Partnership") is a Delaware limited partnership formed in March 2014 to operate, acquire and develop ethylene production facilities and related assets. On August 4, 2014, the Partnership completed its initial public offering (the "IPO") of 12,937,500 common units representing limited partner interests.
In connection with the IPO, the Partnership acquired a 10.6% limited partner interest in Westlake Chemical OpCo LP ("OpCo") and a 100% interest in Westlake Chemical OpCo GP LLC ("OpCo GP"), which is the general partner of OpCo. OpCo owns three ethylene production facilities and one common carrier ethylene pipeline. Since the IPO, the Partnership has periodically purchased additional limited partner interest in OpCo. Most recently, on March 29, 2019, the Partnership purchased an additional 4.5% newly-issued limited partner interest in OpCo for approximately $201,445, resulting in an aggregate 22.8% limited partner interest in OpCo, effective January 1, 2019. The remaining 77.2% limited partner interest in OpCo is owned by Westlake Chemical Corporation.
Basis of Presentation
The accompanying unaudited consolidated interim financial statements were prepared in accordance with the rules and regulations of the Securities and Exchange Commission (the "SEC") for interim periods. Accordingly, certain information and footnotes required for complete financial statements under generally accepted accounting principles in the United States ("U.S. GAAP") have not been included. These interim consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto of the Partnership included in the annual report on Form 10-K for the fiscal year ended December 31, 2019 (the "2019 Form 10-K"), filed with the SEC on February 28, 2020. These financial statements have been prepared in conformity with the accounting principles and practices as disclosed in the notes to the consolidated financial statements of the Partnership for the fiscal year ended December 31, 2019 with the exceptions of those accounting standards adopted in 2020 as discussed in Note 1.
References to "Westlake" refer collectively to Westlake Chemical Corporation and its subsidiaries, other than the Partnership, OpCo and OpCo GP.
The Partnership holds a 22.8% limited partner interest and the entire non-economic general partner interest in OpCo. The remaining 77.2% limited partner interest in OpCo is owned directly by Westlake, which has no rights to direct the activities that most significantly impact the economic performance of OpCo. As a result of the fact that substantially all of OpCo's activities are conducted on behalf of Westlake, and the fact that OpCo exhibits disproportionality of voting rights to economic interest, OpCo was deemed to be a variable interest entity. The Partnership, through its ownership of OpCo's general partner, has the power to direct the activities that most significantly impact the economic performance of OpCo, and it also has the obligation or right to absorb losses or receive benefits from OpCo that could potentially be significant to OpCo. As such, the Partnership was determined to be OpCo's primary beneficiary and therefore consolidates OpCo's results of operations and financial position. 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, 2020, its results of operations for the three and six months ended June 30, 2020 and 2019 and the changes in its cash position for the six months ended June 30, 2020 and 2019.
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, 2020 or any other interim period. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities. Actual results could differ materially from those estimates.

6

Table of Contents
WESTLAKE CHEMICAL PARTNERS LP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSContinued
(Unaudited)
(in thousands of dollars, except unit amounts and per unit data)

On March 11, 2020, the World Health Organization declared the ongoing coronavirus (COVID-19) outbreak a pandemic and recommended containment and mitigation measures worldwide. The pandemic has resulted in widespread adverse impacts on the global economy and on our employees, customers and suppliers. Though the Partnership did not experience significant disruptions to its business operations in the six months ended June 30, 2020 and does not expect significant disruptions to its business operations resulting from COVID-19, the impact that COVID-19 will have on the Partnership's financial condition, results of operations and cash flows will depend on future developments, including, among others, the ultimate duration, geographic spread and severity of the virus, the actions to contain the virus, the consequences of governmental and other measures designed to prevent the spread of the virus, the development of effective treatments, the impact on the operation of OpCo facilities, Westlake, customers, suppliers and other third parties and the timing and extent to which normal economic and operating conditions resume.
Recent Accounting Pronouncements
Reference Rate Reform (ASU No. 2020-04)
In March 2020, the FASB issued an accounting standards update to provide optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. The amendments in this update are effective for all entities as of March 12, 2020 through December 31, 2022. The Partnership is in the process of evaluating the impact that the new accounting guidance will have on the Partnership's consolidated financial position, results of operations and cash flows.
Recently Adopted Accounting Standards
Credit Losses (ASU No. 2016-13)
In June 2016, the FASB issued an accounting standards update providing new guidance for the accounting for credit losses on loans and other financial instruments. The new guidance introduces an approach based on expected losses to estimate credit losses on trade receivables and certain types of financial instruments. The standard also modifies the impairment model for available-for-sale debt securities and provides for a simplified accounting model for purchased financial assets with credit deterioration since their origination. The accounting standard became effective for reporting periods beginning after December 15, 2019 and did not have a material impact on the Partnership's consolidated financial position, results of operations and cash flows.
Fair Value Measurement (ASU No. 2018-13)
In August 2018, the FASB issued an accounting standards update to modify the disclosure requirements on fair value measurements. The amendments became effective for reporting periods beginning after December 15, 2019. An entity is permitted to early adopt any removed or modified disclosures and delay adoption of the additional disclosures until the effective date. Most amendments should be applied retrospectively but certain amendments should be applied prospectively. The Partnership adopted this accounting standard effective January 1, 2020 and the adoption did not have a material impact on the Partnership's consolidated financial position, results of operations and cash flows.
2. Accounts Receivable—Third Parties
Accounts receivable—third parties consist of the following:
 
 
June 30,
2020
 
December 31,
2019
Trade customers
 
$
6,289

 
$
9,730

Allowance for credit losses
 
(148
)
 
(476
)
 
 
6,141

 
9,254

Other receivables
 
866

 
660

Accounts receivable, net—third parties
 
$
7,007

 
$
9,914



7

Table of Contents
WESTLAKE CHEMICAL PARTNERS LP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSContinued
(Unaudited)
(in thousands of dollars, except unit amounts and per unit data)

3. Inventories
Inventories consist of the following:


June 30,
2020

December 31,
2019
Finished products

$
1,199


$
2,154

Feedstock, additives and chemicals

330


330

Inventories

$
1,529


$
2,484


4. Property, Plant and Equipment
Depreciation expense on property, plant and equipment of $22,714 and $22,227 is included in cost of sales in the consolidated statements of operations for the three months ended June 30, 2020 and 2019, respectively. Depreciation expense on property, plant and equipment of $45,467 and $44,441 is included in cost of sales in the consolidated statements of operations for the six months ended June 30, 2020 and 2019, respectively.
5. Deferred Charges and Other Assets
Amortization expense on other assets of $3,099 and $4,630 is included in costs of sales in the consolidated statements of operations for the three months ended June 30, 2020 and 2019, respectively. Amortization expense on other assets of $6,377 and $9,260 is included in costs of sales in the consolidated statements of operations for the six months ended June 30, 2020 and 2019, respectively.
6. Distributions and Net Income Per Limited Partner Unit
On July 31, 2020, 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, 2020 of $0.4714 per unit. This distribution is payable on August 24, 2020 to the unitholders of record as of August 10, 2020.
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,
 
 
2020
 
2019
 
2020
 
2019
Net income attributable to the Partnership

$
14,860

 
$
13,733

 
$
32,607

 
$
28,688

Less:
 
 
 
 
 
 
 
 
Limited partners' distribution declared on common units

16,590

 
16,113

 
33,181

 
31,779

Distribution in excess of net income

$
(1,730
)
 
$
(2,380
)
 
$
(574
)
 
$
(3,091
)
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. Because the Partnership has more than one class of participating securities, it uses the two-class method when calculating the net income per unit applicable to limited partners. The classes of participating securities include common units and incentive distribution rights. Net income attributable to the Partnership is allocated to the unitholders in accordance with their respective ownership percentages in preparation of the consolidated statements of changes in equity. However, when distributions related to the incentive distribution rights are made, net income equal to the amount of those distributions is first allocated to the general partner before the remaining net income is allocated to the unitholders based on their respective ownership percentages. 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.

8

Table of Contents
WESTLAKE CHEMICAL PARTNERS LP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSContinued
(Unaudited)
(in thousands of dollars, except unit amounts and per unit data)

 
 
Three Months Ended June 30, 2020
 
 
Limited Partners' Common Units
 
Incentive Distribution Rights
 
Total
Net income attributable to the Partnership:
 
 
 
 
 
 
Distribution
 
$
16,590

 
$

 
$
16,590

Distribution in excess of net income
 
(1,730
)
 

 
(1,730
)
Net income
 
$
14,860

 
$

 
$
14,860

Weighted average units outstanding:
 
 
 
 
 
 
Basic and diluted
 
35,194,545

 
 
 
35,194,545

Net income per limited partner unit:
 
 
 
 
 
 
Basic and diluted
 
$
0.43

 
 
 
 
 
 
Three Months Ended June 30, 2019
 
 
Limited Partners' Common Units
 
Incentive Distribution Rights
 
Total
Net income attributable to the Partnership:
 
 
 
 
 
 
Distribution
 
$
16,113

 
$

 
$
16,113

Distribution in excess of net income
 
(2,380
)
 

 
(2,380
)
Net income
 
$
13,733

 
$

 
$
13,733

Weighted average units outstanding:
 
 
 
 
 
 
Basic and diluted
 
35,188,189

 
 
 
35,188,189

Net income per limited partner unit:
 
 
 
 
 
 
Basic and diluted
 
$
0.39

 
 
 
 
 
 
Six Months Ended June 30, 2020
 
 
Limited Partners' Common Units
 
Incentive Distribution Rights
 
Total
Net income attributable to the Partnership:
 
 
 
 
 
 
Distribution
 
$
33,181

 
$

 
$
33,181

Distribution in excess of net income
 
(574
)
 

 
(574
)
Net income
 
$
32,607

 
$

 
$
32,607

Weighted average units outstanding:
 
 
 
 
 
 
Basic and diluted
 
35,194,545

 
 
 
35,194,545

Net income per limited partner unit:
 
 
 
 
 
 
Basic and diluted
 
$
0.93

 
 
 
 


9

Table of Contents
WESTLAKE CHEMICAL PARTNERS LP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSContinued
(Unaudited)
(in thousands of dollars, except unit amounts and per unit data)

 
 
Six Months Ended June 30, 2019
 
 
Limited Partners' Common Units
 
Incentive Distribution Rights
 
Total
Net income attributable to the Partnership:
 
 
 
 
 
 
Distribution
 
$
31,779

 
$

 
$
31,779

Distribution in excess of net income
 
(3,091
)
 

 
(3,091
)
Net income
 
$
28,688

 
$

 
$
28,688

Weighted average units outstanding:
 
 
 
 
 
 
Basic and diluted
 
33,774,647

 
 
 
33,774,647

Net income per limited partner unit:
 
 
 
 
 
 
Basic and diluted
 
$
0.85

 
 
 
 


The amended Partnership Agreement provides that the Partnership will distribute cash each quarter to all the unitholders, pro rata, until each unit has received a distribution of $1.2938. 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:
 
 
Marginal Percentage Interest in Distributions
Total Quarterly Distribution Per Unit
 
Unitholders
 
IDR Holders
Above $1.2938 up to $1.4063
 
85.0
%
 
15.0
%
Above $1.4063 up to $1.6875
 
75.0
%
 
25.0
%
Above $1.6875
 
50.0
%
 
50.0
%
The Partnership's distribution for the three months ended June 30, 2020 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.
Distribution Per Common Unit
Distributions per common unit for the three and six months ended June 30, 2020 and 2019 were as follows:
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
 
2020
 
2019
 
2020
 
2019
Distributions per common unit
 
$
0.4714

 
$
0.4452

 
$
0.9428

 
$
0.8780


7. Partners' Equity
On October 4, 2018, the Partnership and Westlake GP, the general partner of the Partnership, entered into an Equity Distribution Agreement with UBS Securities LLC, Barclays Capital Inc., Citigroup Global Markets Inc., Deutsche Bank Securities Inc., RBC Capital Markets, LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Wells Fargo Securities, LLC to offer and sell the Partnership's common units, from time to time, up to an aggregate offering amount of $50,000. The Equity Distribution Agreement was amended on February 28, 2020 to reference a new shelf registration for utilization under this agreement. No common units were issued under this program as of June 30, 2020.
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. Net proceeds to the Partnership from the sale of the units were approximately $62,934. TTWF LP, Westlake's principal stockholder and a related party, acquired 1,401,869 common units out of 2,940,818 common units issued in the private placement.

10

Table of Contents
WESTLAKE CHEMICAL PARTNERS LP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSContinued
(Unaudited)
(in thousands of dollars, except unit amounts and per unit data)

8. 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.
Sales to Related Parties
OpCo sells ethylene to Westlake under the Ethylene Sales Agreement. Additionally, the Partnership and OpCo from time to time provide other services or products for which it charges Westlake a fee.
Sales to related parties were as follows:
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
 
2020
 
2019
 
2020
 
2019
Net sales—Westlake
 
$
227,431

 
$
230,047

 
$
442,259

 
$
487,087


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:
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
 
2020
 
2019
 
2020
 
2019
Feedstock purchased from Westlake and included in cost of sales
 
$
69,324

 
$
89,599

 
$
128,962

 
$
211,754

Other charges from Westlake and included in cost of sales
 
23,898

 
27,464

 
47,998

 
55,036

Total
 
$
93,222

 
$
117,063

 
$
176,960

 
$
266,790


Services from Related Parties Included in Selling, General and Administrative Expenses
Charges for services purchased by the Partnership from Westlake and included in selling, general and administrative expenses primarily relate to services Westlake performs on behalf of the Partnership under the Omnibus Agreement, including the Partnership's finance, legal, information technology, human resources, communication, ethics and compliance and other administrative functions.
Charges from related parties included within selling, general and administrative expenses were as follows:
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
 
2020
 
2019
 
2020
 
2019
Services received from Westlake and included in selling, general and administrative expenses
 
$
5,698

 
$
6,464

 
$
10,813

 
$
13,067


Goods and Services from Related Parties Capitalized as Assets
Charges for goods and services purchased by the Partnership and OpCo from Westlake which were capitalized as assets relate primarily to the services of Westlake employees under the Services and Secondment Agreement.
Charges from related parties for goods and services capitalized as assets were as follows:
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
 
2020
 
2019
 
2020
 
2019
Goods and services purchased from Westlake and capitalized as assets
 
$
384

 
$
641

 
$
864

 
$
1,284



11

Table of Contents
WESTLAKE CHEMICAL PARTNERS LP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSContinued
(Unaudited)
(in thousands of dollars, except unit amounts and per unit data)

Receivable under the Investment Management Agreement
On August 1, 2017, the Partnership, OpCo and Westlake executed an investment management agreement (the "Investment Management Agreement") that authorized Westlake to invest the Partnership and OpCo's excess cash with Westlake for a term of up to a maximum of nine months. 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 $219 and $601 was included in the receivable under the Investment Management Agreement balance at June 30, 2020 and December 31, 2019, respectively. Total interest earned related to the Investment Management Agreement was $219 and $1,155 for the three months ended June 30, 2020 and 2019, respectively, and $807 and $1,973 for the six months ended June 30, 2020 and 2019, respectively.
The Partnership's receivable under the Investment Management Agreement was as follows:
 
 
June 30,
2020
 
December 31,
2019
Receivable under the Investment Management Agreement
 
$
171,391

 
$
162,773


Accounts Receivables
The Partnership's accounts receivable from Westlake result primarily from ethylene sales to Westlake under the Ethylene Sales Agreement.
The Partnership's accounts receivable from Westlake were as follows:
 
 
June 30,
2020
 
December 31,
2019
Accounts receivable—Westlake
 
$
42,354

 
$
42,847


Accounts Payable to Related Parties
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.
The related party accounts payable balances were as follows:


June 30,
2020

December 31,
2019
Accounts payable—Westlake

$
5,440

 
$
15,201


Related Party Leases
OpCo is obligated to Westlake under various long-term and short-term noncancelable operating leases, primarily related to rail car leases and land. Operating lease rentals paid to Westlake for such leases were $726 and $562 for the three months ended June 30, 2020 and 2019, respectively, and $1,396 and $1,076 for the six months ended June 30, 2020 and 2019, respectively, and 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.

12

Table of Contents
WESTLAKE CHEMICAL PARTNERS LP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSContinued
(Unaudited)
(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 for the three months ended June 30, 2020 and 2019 was $3,431 and $5,125, respectively. Interest on related party debt payable is presented as interest expense—Westlake in the consolidated statements of operations. Interest capitalized as a component of property, plant and equipment on related party debt was $0 for the three months ended June 30, 2020 and 2019. At June 30, 2020 and December 31, 2019, accrued interest on related party debt was $3,431 and $4,187, respectively, and is reflected as a component of accrued liabilities in the consolidated balance sheets.
Debt payable to related parties was as follows:
 
 
June 30,
2020
 
December 31,
2019
Long-term debt payable to Westlake
 
$
399,674

 
$
399,674


Major Customer and Concentration of Credit Risk
During the three months ended June 30, 2020 and 2019, Westlake accounted for approximately 95.4% and 85.2%, respectively, of the Partnership's net sales. During the six months ended June 30, 2020 and 2019, Westlake accounted for approximately 90.4% and 85.6%, respectively, of the Partnership's net sales.
Other
See Note 7 above for an additional related party transaction.
9. Long-term Debt Payable to Westlake
Long-term debt payable to Westlake consists of the following:
 
 
June 30,
2020
 
December 31,
2019
OpCo Revolver (variable interest rate of London Interbank Offered Rate ("LIBOR") plus 2.0%, scheduled maturity of September 25, 2023)

$
22,619

 
$
22,619

MLP Revolver (variable interest rate of LIBOR plus 2.0%, scheduled maturity of March 19, 2023)
 
377,055

 
377,055

 
 
$
399,674

 
$
399,674


On April 30, 2019, the Partnership repaid $201,445 of borrowings under the OpCo Revolver.
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 March 19, 2020, the Partnership entered into an amendment to the MLP Revolver, to extend the maturity date to March 19, 2023 and add a phase-out provision for LIBOR, which is to be replaced by an alternate benchmark rate. The amended Credit Agreement bears interest at a variable rate of either (a) LIBOR plus 2.0% or, if LIBOR is no longer available, (b) Alternate Base Rate plus 1.0%.
The weighted average interest rate on all long-term debt was 3.4% and 4.1%, respectively, at June 30, 2020 and December 31, 2019.
As of June 30, 2020, the Partnership was in compliance with all of the covenants under the OpCo Revolver and the MLP Revolver.

13

Table of Contents
WESTLAKE CHEMICAL PARTNERS LP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSContinued
(Unaudited)
(in thousands of dollars, except unit amounts and per unit data)

10. Derivative Commodity Instruments
From time to time, the Partnership uses derivative instruments to reduce price volatility risk on commodities, primarily ethane and ethylene. The Partnership does not use derivative instruments to engage in speculative activities.
The Partnership had no derivatives that were designated as fair value hedges during the six months ended June 30, 2020 and 2019.
Gains and losses from changes in the fair value of derivative instruments that are not designated as hedging instruments were included in net sales and cost of sales in the consolidated statements of operations for the six months ended June 30, 2020 and 2019.
The exposure on commodity derivatives used for price risk management includes the risk that the counterparty will not pay if the market price declines below the established fixed price. In such case, the Partnership would lose the benefit of the derivative differential on the volume of the commodities covered. In any event, the Partnership would continue to receive the market price on the actual volume hedge. The Partnership also bears the risk that it could lose the benefit of market improvements over the fixed derivative price for the term and volume of the derivative instruments (as such improvements would accrue to the benefit of the counterparty). The Partnership had non-hedge designated derivatives covering approximately 15.1 million gallons and 36.0 million pounds of commodities as of June 30, 2020 and 39.1 million gallons and 93.0 million pounds of commodities as of December 31, 2019.
At June 30, 2020, the fair values of these derivative instruments recorded as accrued liabilities and accounts receivable, net were $385 and $810, respectively. At December 31, 2019, the fair values of these derivative instruments recorded as accrued liabilities and accounts receivable, net were $1,959 and $597, respectively. The losses recognized in net sales and gains recognized in cost of sales related to derivatives were $1,199 and $1,291, respectively, for the three months ended June 30, 2020 and gains recognized in net sales and losses recognized in cost of sales were $215 and $504, respectively, for the three months ended June 30, 2019. The gains recognized in net sales and losses recognized in cost of sales related to derivatives were $2,155 and $157, respectively, for the six months ended June 30, 2020 and $2,426 and $1,384, respectively, for the six months ended June 30, 2019.
The Partnership's commodity contracts are measured using forward curves supplied by industry recognized sources and unrelated third-party services and classified as Level 2 under the fair value measurement guidance.
11. Fair Value Measurements
The Partnership reports certain assets and liabilities at fair value, which is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). Under the accounting guidance for fair value measurements, inputs used to measure fair value are classified in one of three levels:
Level 1: Quoted market prices in active markets for identical assets or liabilities.
Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data.
Level 3: Unobservable inputs that are not corroborated by market data.

14

Table of Contents
WESTLAKE CHEMICAL PARTNERS LP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSContinued
(Unaudited)
(in thousands of dollars, except unit amounts and per unit data)

The Partnership has financial assets and liabilities subject to fair value measures. 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 carrying and fair values of the Partnership's long-term debt at June 30, 2020 and December 31, 2019 are summarized in the table below. The Partnership's long-term debt includes the OpCo Revolver and the MLP Revolver at June 30, 2020. The fair value of debt is determined based on the present value of expected future cash flows using a discounted cash flow methodology. Because the Partnership's valuation methodology used for long-term debt requires the use of significant unobservable inputs, the inputs used to measure the fair value of the Partnership's long-term debt are classified as Level 3 within the fair value hierarchy. Inputs used to estimate the fair values of the Partnership's long-term debt include the selection of an appropriate discount rate.
 
 
June 30, 2020
 
December 31, 2019
 
 
Carrying
Value
 
Fair
Value
 
Carrying
Value
 
Fair
Value
OpCo Revolver
 
$
22,619

 
$
22,544

 
$
22,619

 
$
23,364

MLP Revolver
 
377,055

 
372,901

 
377,055

 
379,452


12. Supplemental Information
Accrued Liabilities
Accrued liabilities were $16,807 and $17,507 at June 30, 2020 and December 31, 2019, respectively. Accrued interest, accrued taxes, and accrued maintenance expense, which are components of accrued liabilities, were $3,431, $4,770, and $3,411, respectively, at June 30, 2020 and $4,187, $2,611, and $3,225, respectively, at December 31, 2019. No other component of accrued liabilities was more than five percent of total current liabilities.
Non-cash Investing Activity
The non-cash investing activities related to accruals for capital expenditures were $182 and $567 for the six months ended June 30, 2020 and 2019, respectively.

13. Commitments and Contingencies
The Partnership is subject to environmental laws and regulations that can impose civil and criminal sanctions and that may require the Partnership to mitigate the effects of contamination caused by the release or disposal of hazardous substances into the environment. These laws include the federal Clean Air Act, the federal Water Pollution Control Act, the Resource Conservation and Recovery Act, the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"), the Toxic Substances Control Act and various other federal, state and local laws and regulations. Under CERCLA, an owner or operator of property may be held strictly liable for remediating contamination without regard to whether that person caused the contamination, and without regard to whether the practices that resulted in the contamination were legal at the time they occurred. Because the Partnership's production sites have a history of industrial use, it is impossible to predict precisely what effect these legal requirements will have on the Partnership. Westlake will indemnify the Partnership for liabilities that occurred or existed prior to August 4, 2014.
The Partnership is involved in various legal proceedings incidental to the conduct of its business. The Partnership does not believe that any of these legal proceedings will have a material adverse effect on its financial condition, results of operations or cash flows.

15

Table of Contents


Item 2. 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, 2019 (the "2019 Form 10-K"), as filed with the SEC on February 28, 2020. 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"). References to "Westlake" refer to Westlake Chemical Corporation and its consolidated subsidiaries other than the Partnership, OpCo GP and OpCo. The following discussion contains forward-looking statements. Please read "Forward-Looking Statements" for a discussion of limitations inherent in such statements.
Partnership Overview
We are a Delaware limited partnership formed by Westlake to operate, acquire and develop ethylene production facilities and related assets. On August 4, 2014, we closed our initial public offering (the "IPO") of 12,937,500 common units. In connection with the IPO, we acquired a 10.6% interest in OpCo and a 100% interest in OpCo GP, which is the general partner of OpCo. On April 29, 2015, we purchased an additional 2.7% newly-issued limited partner interest in OpCo, resulting in an aggregate 13.3% limited partner interest in OpCo, effective April 1, 2015. The 12,686,115 subordinated units of the Partnership, all of which were previously owned by Westlake, were converted into common units of the Partnership on August 30, 2017. On September 29, 2017, we completed a secondary public offering of 5,175,000 common units and purchased an additional 5.0% newly-issued limited partner interest in OpCo, resulting in an aggregate 18.3% limited partner interest in OpCo, effective July 1, 2017. On March 29, 2019, we completed a private placement of 2,940,818 common units and used the net proceeds to purchase an additional 4.5% interest in OpCo, effective January 1, 2019, resulting in us owning an aggregate 22.8% limited partner interest in OpCo.
Currently, our sole revenue generating asset is our 22.8% limited partner interest in OpCo, a limited partnership formed by Westlake and us in anticipation of the IPO to own and operate an ethylene production business. We control OpCo through our ownership of its general partner. Westlake retains the remaining 77.2% limited partner interest in OpCo as well as a significant interest in us through its ownership of our general partner, 40.1% of our limited partner units (consisting of 14,122,230 common units) and our incentive distribution rights. OpCo's assets include (1) two ethylene production facilities ("Petro 1" and "Petro 2" and, collectively, "Lake Charles Olefins") at Westlake's Lake Charles, Louisiana site; (2) one ethylene production facility ("Calvert City Olefins") at Westlake's Calvert City, Kentucky site; and (3) a 200-mile common carrier ethylene pipeline (the "Longview Pipeline") that runs from Mont Belvieu, Texas to Westlake's Longview, Texas facility.
How We Generate Revenue
We generate revenue primarily by selling ethylene and the resulting co-products we produce. OpCo and Westlake have entered into an ethylene sales agreement (the "Ethylene Sales Agreement") pursuant to which we generate a substantial majority of our revenue. The Ethylene Sales Agreement is a long-term, fee-based agreement with a minimum purchase commitment and includes variable pricing based on OpCo's actual feedstock and natural gas costs and estimated other costs of producing ethylene (including OpCo's estimated operating costs and a five-year average of OpCo's expected future maintenance capital expenditures and other turnaround expenditures based on OpCo's planned ethylene production capacity for the year), plus a fixed margin per pound of $0.10 less revenue from co-products sales. 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 at the end of the year, is generally not reduced for the first 45 days of a force majeure event, but is reduced for the portion of a force majeure event extending beyond the 45th day.
Westlake has an option to take 95% of volumes in excess of the minimum commitment on an annual basis under the Ethylene Sales Agreement if we produce more than our planned production. 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. 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"). The Shortfall is recognized during the period in which the related operating, maintenance or turnaround activities occur.

16

Table of Contents


Operating Expenses, Maintenance Capital Expenditures and Turnaround Costs
Our management seeks to maximize the profitability of our operations by effectively managing operating expenses, maintenance capital expenditures and turnaround costs. Our operating expenses are comprised primarily of feedstock costs and natural gas, labor expenses (including contractor services), utility costs (other than natural gas) and turnaround and maintenance expenses. With the exception of feedstock, including natural gas, and utilities-related expenses, operating expenses generally remain relatively stable across broad ranges of production volumes but can fluctuate from period to period depending on the circumstances, particularly maintenance and turnaround activities. Our maintenance capital expenditures and turnaround costs are comprised primarily of maintenance of our ethylene production facilities and the amortization of capitalized turnaround costs. These capital expenditures relate to the maintenance and integrity of our facilities. 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.
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. Because the expenses other than feedstock costs and natural gas are based on forecasted amounts and remain a fixed component of the price per pound of ethylene sold under the Ethylene Sales Agreement for any given 12-month period, our ability to manage operating expenses, maintenance expenditures and turnaround cost may directly affect our profitability and cash flows. The impact on profitability is partially mitigated by the fact that we recognize any Shortfall as revenue in the period such costs and expenses are incurred. We seek to manage our operating and maintenance expenses on our ethylene production facilities by scheduling maintenance and turnarounds over time to avoid significant variability in our operating margins and minimize the impact on our cash flows, without compromising our commitment to safety and environmental stewardship. In addition, we reserve cash on an annual basis from what we would otherwise distribute to minimize the impact of turnaround costs in the year of incurrence. The purchase price under the Ethylene Sales Agreement is not designed to cover capital expenditures for expansions.
MLP Distributable Cash Flow and EBITDA
The body of accounting principles generally accepted in the United States is commonly referred to as "GAAP." For this purpose, a non-GAAP financial measure is generally defined by the Securities and Exchange Commission ("SEC") as a numerical measure of a registrant's historical or future financial performance, financial position or cash flows that (1) excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with GAAP in the statement of income, balance sheet or statement of cash flows (or equivalent statements) of the registrant; or (2) includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented. We use the non-GAAP measures of MLP distributable cash flow and EBITDA to analyze our performance. We define distributable cash flow as net income plus depreciation, amortization and disposition of property, plant and equipment, less contributions for turnaround reserves, maintenance capital expenditures and mark-to-market adjustment on derivative contracts. We define MLP distributable cash flow as distributable cash flow less distributable cash flow attributable to Westlake's noncontrolling interest in OpCo and distributions attributable to the incentive distribution rights holder. MLP distributable cash flow does not reflect changes in working capital balances. We define EBITDA as net income before interest expense, income taxes, depreciation and amortization. We use each of MLP distributable cash flow and EBITDA to analyze our performance. MLP distributable cash flow and EBITDA are non-GAAP supplemental financial measures that management and external users of our consolidated financial statements, such as industry analysts, investors, lenders and rating agencies, may use to assess our operating performance as compared to other publicly traded partnerships; our ability to incur and service debt and fund capital expenditures; and the viability of acquisitions and other capital expenditure projects and the returns on investment of various investment opportunities.
MLP distributable cash flow is not a substitute for the GAAP measures of net income and net cash provided by operating activities. MLP distributable cash flow has important limitations as an analytical tool because it excludes some but not all items that affect net income and net cash provided by operating activities. EBITDA is not a substitute for the GAAP measures of net income, income from operations and net cash provided by operating activities. In addition, it should be noted that companies calculate EBITDA differently and, therefore, EBITDA as presented for us may not be comparable to EBITDA reported by other companies. EBITDA has material limitations as a performance measure because it excludes interest expense, depreciation and amortization, and income taxes. Reconciliations for each of MLP distributable cash flow and EBITDA are included in the "Results of Operations" section below.

17

Table of Contents


Recent Developments Affecting Industry Conditions and Our Business
On March 11, 2020, the World Health Organization declared the ongoing coronavirus (COVID-19) outbreak a pandemic and recommended containment and mitigation measures worldwide. The pandemic has resulted in widespread adverse impacts on the global economy and on our employees, customers and suppliers. We did not experience significant disruptions to our business operations in the six months ended June 30, 2020 and do not expect to experience significant disruptions to our business operations resulting from COVID-19, primarily due to the fact that 95% of our production is sold to Westlake on a take-or-pay contract.
Though the price of crude oil has partially recovered from its sudden collapse in early March 2020, due to the continuing impact of low crude-oil prices and the addition of ethylene production capacity in recent months, prices for ethylene and co-products have remained weak and have also negatively impacted our plants' operating rates. We may idle production and reduce operating rates if it is not economical for us to produce ethylene to sell to third parties.
Our first priority in our response to this crisis has been the health and safety of our operators, who are loaned to us by Westlake, and those of our customers and vendors. Westlake has implemented preventative measures and developed corporate and regional response plans to minimize unnecessary risk of exposure. We and Westlake have modified certain business practices (including those related to employee travel, employee work locations and employee work practices) to conform to government restrictions and best practices encouraged by the Center for Disease Control and Prevention, the World Health Organization and other governmental and regulatory authorities. We and Westlake have implemented strategies to reduce costs, increase operational efficiencies and lower capital spending. We have also deferred the planned turnaround at OpCo's Petro 2 ethylene unit and associated maintenance cost into the first half of 2021. The turnaround is expected to last 60 days.

18

Table of Contents


Results of Operations
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
 
2020
 
2019
 
2020
 
2019
 
 
 
 
 
 
 
 
 
 
 
(dollars in thousands)
Revenue
 
 
 
 
 
 
 
 
Net sales—Westlake
 
$
227,431

 
$
230,047

 
$
442,259

 
$
487,087

Net co-product, ethylene and other sales—third parties
 
11,069

 
40,015

 
46,790

 
82,061

Total net sales
 
238,500

 
270,062

 
489,049

 
569,148

Cost of sales
 
148,470

 
178,104

 
295,471

 
386,536

Gross profit
 
90,030

 
91,958

 
193,578

 
182,612

Selling, general and administrative expenses
 
6,139

 
7,639

 
12,335

 
14,612

Income from operations
 
83,891

 
84,319

 
181,243

 
168,000

Other income (expense)
 
 
 
 
 
 
 
 
Interest expense—Westlake
 
(3,431
)
 
(5,125
)
 
(7,381
)
 
(11,025
)
Other income, net
 
123

 
1,153

 
708

 
1,968

Income before income taxes
 
80,583

 
80,347

 
174,570

 
158,943

Income tax provision (benefit)
 
206

 
237

 
423

 
437

Net income
 
80,377

 
80,110

 
174,147

 
158,506

Less: Net income attributable to noncontrolling interest in OpCo
 
65,517

 
66,377

 
141,540

 
129,818

Net income attributable to Westlake Chemical Partners LP
 
$
14,860

 
$
13,733

 
$
32,607

 
$
28,688

MLP distributable cash flow (1)
 
$
16,855

 
$
16,422

 
$
35,192

 
$
33,977

EBITDA (2)
 
$
109,827

 
$
112,329

 
$
233,795

 
$
223,669

____________
 
 
 
 
 
 
 
 
 
(1) See "Reconciliation of MLP Distributable Cash Flow to Net Income and Net Cash Provided by Operating Activities" below.
(2) See "Reconciliation of EBITDA to Net Income, Income from Operations and Net Cash Provided by Operating Activities" below.
 
 
Three Months Ended June 30, 2020
 
Six Months Ended June 30, 2020
 
 
Average
Sales Price
 
Volume
 
Average
Sales Price
 
Volume
Product sales prices and volume percentage change from prior-year period
 
+1.9
%
 
-13.6
 %
 
-8.9
 %
 
-5.2
 %
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
 
2020
 
2019
 
2020
 
2019
Average industry prices (1)
 
 
 
 
 
 
 
 
Ethane (cents/lb)
 
6.4

 
7.1

 
5.6

 
8.5

Propane (cents/lb)
 
9.6

 
12.8

 
9.2

 
14.3

Ethylene (cents/lb) (2)
 
11.0

 
13.7

 
13.4

 
15.4

_____________
(1)
Industry pricing data was obtained through IHS Markit ("IHS"). We have not independently verified the data.
(2)
Represents average North American spot prices of ethylene over the period as reported by IHS.

19

Table of Contents


Reconciliation of MLP Distributable Cash Flow to Net Income and Net Cash Provided by Operating Activities
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,
 
 
2020
 
2019
 
2020
 
2019
 
 
(dollars in thousands)
Net cash provided by operating activities
 
$
112,758

 
$
100,173

 
$
223,719

 
$
213,672

Loss from disposition of fixed assets
 
(349
)
 

 
(446
)
 
(458
)
Changes in operating assets and liabilities and other
 
(32,032
)
 
(20,063
)
 
(49,126
)
 
(54,708
)
Net Income
 
80,377

 
80,110