Westlake Chemical Partners LP 10-Q for FY2024 Q3

Westlake Chemical Partners LP (WLKP)

10-Q 2024-11-06 For: 2024-09-30

Added on April 04, 2026

About this 10-Q

Westlake Chemical Partners LP filed this 10-Q on November 6, 2024, covering the quarter ended September 30, 2024 (FY2024 Q3).

Headline figures

Quarter ended September 30, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $277M; down 13.9% from $321.66M a year earlier
Net income: $18.14M; up 37.3% from net income of $13.21M a year earlier

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☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended	September 30, 2024


Delaware						32-0436529
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)


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


		Page
	PART I. FINANCIAL INFORMATION
Item
1)	Financial Statements	1
2)	Management's Discussion and Analysis of Financial Condition and Results of Operations	16
3)	Quantitative and Qualitative Disclosures about Market Risk	28
4)	Controls and Procedures	28

	PART II. OTHER INFORMATION

1)	Legal Proceedings	29
1A)	Risk Factors	29
5)	Other Information	29
6)	Exhibits	30


	September 30, 2024		December 31, 2023

	(in thousands of dollars, except unit amounts)
ASSETS
Current assets
Cash and cash equivalents	$	60,208	$	58,619
Receivable under the Investment Management Agreement—Westlake Corporation ("Westlake")	109,540		94,444
Accounts receivable, net—Westlake	44,885		49,565
Accounts receivable, net—third parties	22,511		18,701
Inventories	3,751		4,432
Prepaid expenses and other current assets	667		442
Total current assets	241,562		226,203
Property, plant and equipment, net	908,992		943,843
Goodwill	5,814		5,814
Deferred charges and other assets, net	138,327		140,982
Total assets	$	1,294,695	$	1,316,842
LIABILITIES
Current liabilities
Accounts payable—Westlake	$	14,833	$	15,166
Accounts payable—third parties	17,094		16,189
Accrued and other liabilities	21,364		24,980

Total current liabilities	53,291		56,335
Long-term debt payable to Westlake	399,674		399,674
Deferred income taxes	1,569		1,632
Other liabilities	2,347		2,951
Total liabilities	456,881		460,592
Commitments and contingencies (Note 12)
EQUITY
Common unitholders—publicly and privately held (21,116,326 and 21,105,904 units issued and outstanding at September 30, 2024 and December 31, 2023, respectively)	472,296		473,513
Common unitholder—Westlake (14,122,230 and 14,122,230 units issued and outstanding at September 30, 2024 and December 31, 2023, respectively)	48,020		48,993
General partner—Westlake	(242,572)		(242,572)

Total Westlake Chemical Partners LP partners' capital	277,744		279,934
Noncontrolling interest in Westlake Chemical OpCo LP ("OpCo")	560,070		576,316
Total equity	837,814		856,250
Total liabilities and equity	$	1,294,695	$	1,316,842


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			For the Transition Period from to


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023

	(in thousands of dollars, except unit amounts and per unit data)
Revenue
Net sales—Westlake	$	215,799	$	289,303	$	690,535	$	771,349
Net co-products, ethylene and other sales—third parties	61,196		32,361		155,301		122,169
Total net sales	276,995		321,664		845,836		893,518
Cost of sales	160,052		228,683		525,481		606,742
Gross profit	116,943		92,981		320,355		286,776
Selling, general and administrative expenses	7,254		6,741		21,936		21,884
Income from operations	109,689		86,240		298,419		264,892
Other income (expense)
Interest expense—Westlake	(6,698)		(6,437)		(19,930)		(19,869)
Other income, net	1,325		1,272		3,916		3,153
Income before income taxes	104,316		81,075		282,405		248,176
Provision for income taxes	216		222		633		607
Net income	104,100		80,853		281,772		247,569
Less: Net income attributable to noncontrolling interest in OpCo	85,964		67,647		234,376		207,585
Net income attributable to Westlake Chemical Partners LP and limited partners' interest in net income	$	18,136	$	13,206	$	47,396	$	39,984
Net income per limited partner unit attributable to Westlake Chemical Partners LP (basic and diluted)
Common units	$	0.51	$	0.37	$	1.35	$	1.14
Weighted average limited partner units outstanding (basic and diluted)
Common units—publicly and privately held	21,112,943		21,103,180		21,108,731		21,100,832
Common units—Westlake	14,122,230		14,122,230		14,122,230		14,122,230


		Partnership
		Common Unitholders— Publicly and Privately Held		Common Unitholder— Westlake		General Partner— Westlake		Noncontrolling Interest in OpCo		Total

	(in thousands of dollars)
Balances at December 31, 2023		$	473,513	$	48,993	$	(242,572)	$	576,316	$	856,250

Net income		8,887		5,946		—		74,813		89,646

Distribution to unitholders		(9,950)		(6,657)		—		—		(16,607)
Distribution to noncontrolling interest retained in OpCo by Westlake		—		—		—		(81,044)		(81,044)
Balances at March 31, 2024		$	472,450	$	48,282	$	(242,572)	$	570,085	$	848,245

Net income		8,644		5,783		—		73,599		88,026
Units issued for vested phantom units		55		—		—		—		55

Distribution to unitholders		(9,950)		(6,657)		—		—		(16,607)
Distribution to noncontrolling interest retained in OpCo by Westlake		—		—		—		(84,872)		(84,872)
Balances at June 30, 2024		$	471,199	$	47,408	$	(242,572)	$	558,812	$	834,847

Net income		10,867		7,269		—		85,964		104,100
Units issued for vested phantom units		183		—		—		—		183
Distribution to unitholders		(9,953)		(6,657)		—		—		(16,610)
Distribution to noncontrolling interest retained in OpCo by Westlake		—		—		—		(84,706)		(84,706)
Balances at September 30, 2024		$	472,296	$	48,020	$	(242,572)	$	560,070	$	837,814


	September 30, 2024		December 31, 2023
Trade customers	$	16,358	$	15,622
Allowance for credit losses	(327)		(278)

Other receivables	6,480		3,357
Accounts receivable, net—third parties	$	22,511	$	18,701


	September 30, 2024		December 31, 2023
Finished products	$	3,209	$	4,147
Feedstock, additives and chemicals	542		285
Inventories	$	3,751	$	4,432


	Three Months Ended September 30, 2024
	Limited Partners' Common Units		Incentive Distribution Rights		Total
Net income attributable to the Partnership:
Distribution	$	16,611	$	—	$	16,611
Net income in excess of distribution	1,525		—		1,525
Net income	$	18,136	$	—	$	18,136
Weighted average units outstanding:
Basic and diluted	35,235,173				35,235,173
Net income per limited partner unit:
Basic and diluted	$	0.51


	Three Months Ended September 30, 2023
	Limited Partners' Common Units		Incentive Distribution Rights		Total
Net income attributable to the Partnership:
Distribution	$	16,607	$	—	$	16,607
Distribution in excess of net income	(3,401)		—		(3,401)
Net income	$	13,206	$	—	$	13,206
Weighted average units outstanding:
Basic and diluted	35,225,410				35,225,410
Net income per limited partner unit:
Basic and diluted	$	0.37


	Nine Months Ended September 30, 2024
	Limited Partners' Common Units		Incentive Distribution Rights		Total
Net income attributable to the Partnership:
Distribution	$	49,826	$	—	$	49,826
Distribution in excess of net income	(2,430)		—		(2,430)
Net income	$	47,396	$	—	$	47,396
Weighted average units outstanding:
Basic and diluted	35,230,961				35,230,961
Net income per limited partner unit:
Basic and diluted	$	1.35


	Nine Months Ended September 30, 2023
	Limited Partners' Common Units		Incentive Distribution Rights		Total
Net income attributable to the Partnership:
Distribution	$	49,814	$	—	$	49,814
Distribution in excess of net income	(9,830)		—		(9,830)
Net income	$	39,984	$	—	$	39,984
Weighted average units outstanding:
Basic and diluted	35,223,062				35,223,062
Net income per limited partner unit:
Basic and diluted	$	1.14


	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	%


	Three Months Ended September 30, 2024		Nine Months Ended September 30, 2024
Domestic US prices percentage change from prior-year period for fuel cost and feedstock
Fuel cost (Natural Gas)	-18.5	%	-22.5	%
Feedstock (Ethane)	-46.8	%	-28.4	%


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023

	(in thousands of dollars)
Net cash provided by operating activities	$	126,071	$	100,925	$	352,532	$	344,328
Loss from disposition of property, plant and equipment	(416)		(4,016)		(2,241)		(4,438)
Changes in operating assets and liabilities and other	(21,555)		(16,056)		(68,519)		(92,321)
Net income	104,100		80,853		281,772		247,569
Add:
Depreciation, amortization and disposition of property, plant and equipment	28,528		32,242		86,662		86,340
Less:
Contribution to turnaround reserves	(11,903)		(7,565)		(32,051)		(21,838)
Maintenance capital expenditures	(17,753)		(22,862)		(34,808)		(37,407)
Distributable cash flow attributable to noncontrolling interest in OpCo	(85,093)		(69,048)		(249,669)		(228,508)
MLP distributable cash flow	$	17,879	$	13,620	$	51,906	$	46,156


	September 30, 2024		December 31, 2023
Accounts receivable—Westlake	$	44,885	$	49,565


	September 30, 2024		December 31, 2023
OpCo Revolver	$	22,619	$	22,619
MLP Revolver	377,055		377,055
Long-term debt payable to Westlake	$	399,674	$	399,674


	September 30, 2024				December 31, 2023
	Carrying Value		Fair Value		Carrying Value		Fair Value
Long-term debt payable to Westlake	$	399,674	$	411,456	$	399,674	$	408,110


	Three Months Ended September 30, 2024				Nine Months Ended September 30, 2024
	Average Sales Price		Volume		Average Sales Price		Volume
Net sales percentage change from prior-year period due to average sales price and volume	-15.1	%	+1.2	%	-7.9	%	+2.6	%


Exhibit No.						Exhibit





3.1						Certificate of Limited Partnership of Westlake Chemical Partners LP (incorporated by reference to Exhibit 3.1 to Westlake Chemical Partners LP's Registration Statement on Form S-1 (File No. 333-195551), filed on April 29, 2014).

3.2						First Amended and Restated Agreement of Limited Partnership of Westlake Chemical Partners LP (incorporated by reference to Exhibit 3.1 to Westlake Chemical Partners LP's Current Report on Form 8-K (File No. 001-36567) filed on August 8, 2014).

3.3						Amendment No. 1 to the First Amended and Restated Agreement of Limited Partnership of Westlake Chemical Partners LP dated as of November 16, 2017 (incorporated by Reference to Exhibit 3.1 to Westlake Chemical Partners LP's Current Report on Form 8-K, filed on November 16, 2017, File No. 01-36567).

3.4						Amendment No. 2 to the First Amended and Restated Agreement of Limited Partnership of Westlake Chemical Partners LP (incorporated by reference to Exhibit 3.1 to Westlake Chemical Partners LP's Current Report on Form 8-K filed on July 30, 2018 (File No. 01-36567)).

3.5						Amended and Restated Agreement of Limited Partnership of Westlake Chemical OpCo LP (incorporated by reference to Exhibit 10.7 to Westlake Chemical Partners LP's Current Report on Form 8-K (File No. 001-36567) filed on August 8, 2014).

3.6						Amendment No. 1 to the Amended and Restated Agreement of Limited Partnership of Westlake Chemical OpCo LP dated as of December 1, 2017 (File No. 01-36567) (incorporated by reference to Exhibit 3.4 to Westlake Chemical Partners LP's Annual Report on Form 10-K for the year ended December 31, 2017 (File No. 01-36567) filed on March 1, 2018).

31.1†						Rule 13a – 14(a) / 15d – 14(a) Certification (Principal Executive Officer)

31.2†						Rule 13a – 14(a) / 15d – 14(a) Certification (Principal Financial Officer)

32.1#						Section 1350 Certification (Principal Executive Officer and Principal Financial Officer)

101.INS†						Inline XBRL Instance Document–The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document.

101.SCH†						Inline XBRL Taxonomy Extension Schema Document

101.CAL†						Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF†						Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB†						Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE†						Inline XBRL Taxonomy Extension Presentation Linkbase Document

104						Cover Page Interactive Data File - The cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.


1.			I have reviewed this Quarterly Report on Form 10-Q of Westlake Chemical Partners LP (the "registrant");


2.			Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.			Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;


4.			The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:


			a)			designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


			b)			designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


			c)			evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


			d)			disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and


			a)			all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and


			b)			any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.