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	September 30, ~~2020~~2021



☐			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,, Texas77056

(Address of principal executive offices, including zip code)

(~~713~~) (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

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~~35,214,416 common units outstanding as of October ~~28, 2020.~~27, 2021.

Table of Contents

TABLE OF CONTENTS

~~INDEX~~



Item
~~Item~~	Page
PART I. FINANCIAL INFORMATION
1) Financial Statements		1
2) Management's Discussion and Analysis of Financial Condition and Results of Operations		1615
3) Quantitative and Qualitative Disclosures about Market Risk		2926
4) Controls and Procedures		2926

PART II. OTHER INFORMATION
1) Legal Proceedings		2926
1A) Risk Factors		3027
6) Exhibits		3127

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

WESTLAKE CHEMICAL PARTNERS LP

CONSOLIDATED BALANCE SHEETS

(Unaudited)


	September 30, 2020			December 31, 2019				September 30, 2021		December 31, 2020

	(in thousands of dollars, except unit amounts)							(in thousands of dollars, except unit amounts)
ASSETS							ASSETS
Current assets							Current assets
Cash and cash equivalents	$	23,331		$	19,923		Cash and cash equivalents	$	18,647	$	17,154
Receivable under the Investment Management Agreement—Westlake Chemical Corporation ("Westlake")	191,241			162,773			Receivable under the Investment Management Agreement—Westlake Chemical Corporation ("Westlake")	196,252		123,228
Accounts receivable, net—Westlake	56,237			42,847			Accounts receivable, net—Westlake	57,020		108,028
Accounts receivable, net—third parties	5,144			9,914			Accounts receivable, net—third parties	12,168		11,029
Inventories	1,652			2,484			Inventories	6,590		3,474
Prepaid expenses and other current assets	557			470			Prepaid expenses and other current assets	566		392
Total current assets	278,162			238,411			Total current assets	291,243		263,305
Property, plant and equipment, net	1,060,840			1,102,995			Property, plant and equipment, net	1,022,181		1,050,677
Goodwill	5,814			5,814			Goodwill	5,814		5,814
Deferred charges and other assets, net	37,466			46,236			Deferred charges and other assets, net	41,324		36,692
Total assets	$	1,382,282		$	1,393,456		Total assets	$	1,360,562	$	1,356,488
LIABILITIES							LIABILITIES
Current liabilities							Current liabilities
Accounts payable—Westlake	$	17,923		$	15,201		Accounts payable—Westlake	$	13,259	$	7,855
Accounts payable—third parties	6,816			6,141			Accounts payable—third parties	16,773		13,131
Accrued and other liabilities	16,955			17,507			Accrued and other liabilities	24,527		18,768
Total current liabilities	41,694			38,849			Total current liabilities	54,559		39,754
Long-term debt payable to Westlake	399,674			399,674			Long-term debt payable to Westlake	399,674		399,674
Deferred income taxes	1,527			1,649			Deferred income taxes	1,510		1,542
Other liabilities	555			1,149			Other liabilities	—		381
Total liabilities	443,450			441,321			Total liabilities	455,743		441,351
Commitments and contingencies (Note 13)
Commitments and contingencies (Note 12)							Commitments and contingencies (Note 12)	0		0
EQUITY							EQUITY
Common unitholders—publicly and privately held (21,072,315 and 21,072,315 units issued and outstanding at September 30, 2020 and December 31, 2019, respectively)	472,556			471,736
Common unitholder—Westlake (14,122,230 and 14,122,230 units issued and outstanding at September 30, 2020 and December 31, 2019, respectively)	48,900			48,350
Common unitholders—publicly and privately held (21,092,186 and 21,076,673 units issued and outstanding at September 30, 2021 and December 31, 2020, respectively)							Common unitholders—publicly and privately held (21,092,186 and 21,076,673 units issued and outstanding at September 30, 2021 and December 31, 2020, respectively)	474,062		471,701
Common unitholder—Westlake (14,122,230 and 14,122,230 units issued and outstanding at September 30, 2021 and December 31, 2020, respectively)							Common unitholder—Westlake (14,122,230 and 14,122,230 units issued and outstanding at September 30, 2021 and December 31, 2020, respectively)	49,576		48,270
General partner—Westlake	(242,572		)	(242,572		)	General partner—Westlake	(242,572)		(242,572)

Total Westlake Chemical Partners LP partners' capital	278,884			277,514			Total Westlake Chemical Partners LP partners' capital	281,066		277,399
Noncontrolling interest in Westlake Chemical OpCo LP ("OpCo")	659,948			674,621			Noncontrolling interest in Westlake Chemical OpCo LP ("OpCo")	623,753		637,738
Total equity	938,832			952,135			Total equity	904,819		915,137
Total liabilities and equity	$	1,382,282		$	1,393,456		Total liabilities and equity	$	1,360,562	$	1,356,488

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

Table of Contents

WESTLAKE CHEMICAL PARTNERS LP

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)


	Three Months Ended September 30,						Nine Months Ended September 30,							Three Months Ended September 30,				Nine Months Ended September 30,
	2020			2019			2020			2019				2021		2020		2021		2020

	(in thousands of dollars, except unit amounts and per unit data)													(in thousands of dollars, except unit amounts and per unit data)
Revenue													Revenue
Net sales—Westlake	$	217,763		$	216,678		$	660,022		$	703,765		Net sales—Westlake	$	247,887	$	217,763	$	708,646	$	660,022
Net co-product, ethylene and other sales—third parties	14,206			33,247			60,996			115,308			Net co-product, ethylene and other sales—third parties	46,079		14,206		175,756		60,996
Total net sales	231,969			249,925			721,018			819,073			Total net sales	293,966		231,969		884,402		721,018
Cost of sales	131,578			156,706			427,049			543,242			Cost of sales	218,038		131,578		589,746		427,049
Gross profit	100,391			93,219			293,969			275,831			Gross profit	75,928		100,391		294,656		293,969
Selling, general and administrative expenses	6,255			6,822			18,590			21,434			Selling, general and administrative expenses	7,792		6,255		24,734		18,590
Income from operations	94,136			86,397			275,379			254,397			Income from operations	68,136		94,136		269,922		275,379
Other income (expense)													Other income (expense)
Interest expense—Westlake	(2,320		)	(4,411		)	(9,701		)	(15,436		)	Interest expense—Westlake	(2,190)		(2,320)		(6,650)		(9,701)
Other income, net	17			565			725			2,533			Other income, net	24		17		52		725
Income before income taxes	91,833			82,551			266,403			241,494			Income before income taxes	65,970		91,833		263,324		266,403
Income tax provision (benefit)	(15		)	72			408			509			Income tax provision (benefit)	(105)		(15)		333		408
Net income	91,848			82,479			265,995			240,985			Net income	66,075		91,848		262,991		265,995
Less: Net income attributable to noncontrolling interest in OpCo	73,313			67,557			214,853			197,375			Less: Net income attributable to noncontrolling interest in OpCo	53,285		73,313		209,956		214,853
Net income attributable to Westlake Chemical Partners LP and limited partners' interest in net income	$	18,535		$	14,922		$	51,142		$	43,610		Net income attributable to Westlake Chemical Partners LP and limited partners' interest in net income	$	12,790	$	18,535	$	53,035	$	51,142
Net income per limited partner unit attributable to Westlake Chemical Partners LP per limited partner unit (basic and diluted)													Net income per limited partner unit attributable to Westlake Chemical Partners LP per limited partner unit (basic and diluted)
Common units	$	0.53		$	0.42		$	1.45		$	1.27		Common units	$	0.36	$	0.53	$	1.51	$	1.45
Weighted average limited partner units outstanding (basic and diluted)													Weighted average limited partner units outstanding (basic and diluted)
Common units—publicly and privately held	21,072,315			21,065,959			21,072,315			20,128,775			Common units—publicly and privately held	21,087,746		21,072,315		21,081,379		21,072,315
Common units—Westlake	14,122,230			14,122,230			14,122,230			14,122,230			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.

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, 2020		$	471,701	$	48,270	$	(242,572)	$	637,738	$	915,137

Net income		9,069		6,077		—		61,476		76,622

Quarterly distribution to unitholders		(9,936)		(6,657)		—		—		(16,593)
Quarterly distribution to noncontrolling interest retained in OpCo by Westlake		—		—		—		(62,058)		(62,058)
Balance at March 31, 2021		$	470,834	$	47,690	$	(242,572)	$	637,156	$	913,108

Net income		15,029		10,070		—		95,195		120,294
Units issued for vested phantom units		149		—		—		—		149

Quarterly distribution to unitholders		(9,936)		(6,657)		—		—		(16,593)
Quarterly distribution to noncontrolling interest retained in OpCo by Westlake		—		—		—		(65,200)		(65,200)
Balance at June 30, 2021		$	476,076	$	51,103	$	(242,572)	$	667,151	$	951,758

Net income		7,660		5,130		—		53,285		66,075
Units issued for vested phantom units		262		—		—		—		262
Quarterly distribution to unitholders		(9,936)		(6,657)		—		—		(16,593)
Quarterly distribution to noncontrolling interest retained in OpCo by Westlake		—		—		—		(96,683)		(96,683)
Balance at September 30, 2021		$	474,062	$	49,576	$	(242,572)	$	623,753	$	904,819

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

Net income 11,098
7,437
—
73,313
91,848
Quarterly distribution to unitholders (9,934 ) (6,657 ) —
—
(16,591 )
Quarterly distribution to noncontrolling interest retained in OpCo by Westlake —
—
—
(72,278 ) (72,278 )
Balance at September 30, 2020 $ 472,556
$ 48,900
$ (242,572 )
$ 659,948
$ 938,832

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

Table of Contents

WESTLAKE CHEMICAL PARTNERS LP

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Unaudited)


																			Partnership
		Partnership																	Common Unitholders— Public and Privately Held		Common Unitholder— Westlake		General Partner— Westlake		Noncontrolling Interests in OpCo		Total
		Common Unitholders— Public and Privately Held			Common Unitholder— Westlake			General Partner— Westlake			Noncontrolling Interests in OpCo			Total
																		(in thousands of dollars)
	(in thousands of dollars)
Balance at December 31, 2018		$	409,608		$	48,774		$	(242,572	)	$	718,271		$	934,081
Balance at December 31, 2019																	Balance at December 31, 2019		$	471,736	$	48,350	$	(242,572)	$	674,621	$	952,135

Net income		8,422			6,533			0			63,441			78,396			Net income		10,626		7,121		—		76,023		93,770
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 unitholders		(9,934)		(6,657)		—		—		(16,591)
Quarterly distribution to noncontrolling interest retained in OpCo by Westlake		—			—			—			(81,507		)	(81,507		)	Quarterly distribution to noncontrolling interest retained in OpCo by Westlake		—		—		—		(79,223)		(79,223)
Balance at March 31, 2019		$	473,119		$	49,195		$	(242,572	)	$	700,205		$	979,947
Balance at March 31, 2020																	Balance at March 31, 2020		$	472,428	$	48,814	$	(242,572)	$	671,421	$	950,091

Net income		8,222			5,511			—			66,377			80,110			Net income		8,897		5,963		—		65,517		80,377
Offering costs related to private placement of common units		(18		)	—			—			—			(18		)

Quarterly distributions to unitholders		(9,379		)	(6,287		)	—			—			(15,666		)	Quarterly distributions to unitholders		(9,933)		(6,657)		—		—		(16,590)
Quarterly distribution to noncontrolling interest retained in OpCo by Westlake		—			—			—			(72,259		)	(72,259		)	Quarterly distribution to noncontrolling interest retained in OpCo by Westlake		—		—		—		(78,025)		(78,025)
Balance at June 30, 2019		$	471,944		$	48,419		$	(242,572	)	$	694,323		$	972,114
Balance at June 30, 2020																	Balance at June 30, 2020		$	471,392	$	48,120	$	(242,572)	$	658,913	$	935,853

Net income		8,934			5,988			—			67,557			82,479			Net income		11,098		7,437		—		73,313		91,848
Offering costs related to private placement of common units		(255		)	—			—			—			(255		)

Quarterly distributions to unitholders		(9,646		)	(6,467		)	—			—			(16,113		)	Quarterly distributions to unitholders		(9,934)		(6,657)		—		—		(16,591)
Quarterly distribution to noncontrolling interest retained in OpCo by Westlake		—			—			—			(75,494		)	(75,494		)	Quarterly distribution to noncontrolling interest retained in OpCo by Westlake		—		—		—		(72,278)		(72,278)
Balance at September 30, 2019		$	470,977		$	47,940		$	(242,572	)	$	686,386		$	962,731
Balance at September 30, 2020																	Balance at September 30, 2020		$	472,556	$	48,900	$	(242,572)	$	659,948	$	938,832

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

Table of Contents

WESTLAKE CHEMICAL PARTNERS LP

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	Nine Months Ended September 30,							Nine Months Ended September 30,
	2020			2019				2021		2020

	(in thousands of dollars)							(in thousands of dollars)
Cash flows from operating activities							Cash flows from operating activities
Net income	$	265,995		$	240,985		Net income	$	262,991	$	265,995
Adjustments to reconcile net income to net cash provided by operating activities							Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization	77,767			80,382			Depreciation and amortization	82,830		77,767
Loss from disposition of property, plant and equipment	1,000			458			Loss from disposition of property, plant and equipment	1,763		1,000
Other gains, net	(522		)	(819		)	Other gains, net	866		(522)
Changes in operating assets and liabilities							Changes in operating assets and liabilities
Accounts receivable—third parties	5,170			2,647			Accounts receivable—third parties	(2,037)		5,170
Net accounts receivable—Westlake	(10,136		)	8,217			Net accounts receivable—Westlake	56,228		(10,136)
Inventories	832			(88		)	Inventories	(3,116)		832
Prepaid expenses and other current assets	(87		)	(189		)	Prepaid expenses and other current assets	(174)		(87)
Accounts payable	711			(662		)	Accounts payable	2,689		711
Accrued and other liabilities	1,398			4,869			Accrued and other liabilities	3,690		1,398
Other, net	(1,252		)	(646		)	Other, net	(19,153)		(1,252)
Net cash provided by operating activities	340,876			335,154			Net cash provided by operating activities	386,577		340,876
Cash flows from investing activities							Cash flows from investing activities
Additions to property, plant and equipment	(29,170		)	(30,028		)	Additions to property, plant and equipment	(38,490)		(29,170)
Maturities of investments with Westlake under the Investment Management Agreement	276,000			405,445			Maturities of investments with Westlake under the Investment Management Agreement	203,000		276,000
Investments with Westlake under the Investment Management Agreement	(305,000		)	(421,445		)	Investments with Westlake under the Investment Management Agreement	(276,000)		(305,000)
Other	0			46			Other	126		—
Net cash used for investing activities	(58,170		)	(45,982		)	Net cash used for investing activities	(111,364)		(58,170)
Cash flows from financing activities							Cash flows from financing activities
Net proceeds from private placement of common units	0			62,661
Proceeds from debt payable to Westlake	0			123,511
Repayment of debt payable to Westlake	0			(201,445		)

Quarterly distributions to noncontrolling interest retained in OpCo by Westlake	(229,526		)	(229,260		)	Quarterly distributions to noncontrolling interest retained in OpCo by Westlake	(223,941)		(229,526)
Quarterly distributions to unitholders	(49,772		)	(45,736		)	Quarterly distributions to unitholders	(49,779)		(49,772)
Net cash used for financing activities	(279,298		)	(290,269		)	Net cash used for financing activities	(273,720)		(279,298)
Net increase (decrease) in cash and cash equivalents	3,408			(1,097		)
Net increase in cash and cash equivalents							Net increase in cash and cash equivalents	1,493		3,408
Cash and cash equivalents at beginning of period	19,923			19,744			Cash and cash equivalents at beginning of period	17,154		19,923
Cash and cash equivalents at end of period	$	23,331		$	18,647		Cash and cash equivalents at end of period	$	18,647	$	23,331

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

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WESTLAKE CHEMICAL PARTNERS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(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.~~pipeline (collectively, the "Contributed Assets"). 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~~2020 (the ~~"2019~~"2020 Form 10-K"), filed with the SEC on ~~February 28, 2020.~~March 2, 2021. 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.~~2020.

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 September 30, ~~2020,~~2021, its results of operations for the three and nine months ended September 30, ~~2020~~2021 and ~~2019~~2020 and the changes in its cash position for the nine months ended September 30, ~~2020~~2021 and ~~2019.~~2020.

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~~2021 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.

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WESTLAKE CHEMICAL PARTNERS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(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 COVID pandemic ~~has~~ resulted in widespread adverse impacts on the global economy ~~and on our employees, customers and suppliers.~~in 2020. The Partnership ~~did~~has not ~~experience~~experienced significant disruptions to its business operations in 2020 or during the nine months ended September 30, ~~2020~~2021 and does not expect significant disruptions to its business operations resulting from COVID-19. However, the impact that COVID-19 will have on the Partnership's financial condition, results of operations and cash flows cannot be estimated with certainty at this time as it will depend on future developments, including, among others, the timing and logistics with respect to the distribution of vaccines globally and the efficacy of the available vaccines (including with respect to the more recent variants of COVID-19) and other treatments, the ultimate duration of the pandemic, 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~~OpCo's 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~~2022 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 onare not 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. Certain exceptions provided under this guidance may be applicable to future reference rate reform related transitions.

~~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:

September 30,
2020 December 31,
2019
Trade customers $ 5,220
$ 9,730
Allowance for credit losses (76 ) (476 )
5,144
9,254
Other receivables 0
660
Accounts receivable, net—third parties $ 5,144
$ 9,914


	September 30, 2021		December 31, 2020
Trade customers	$	13,381	$	11,344
Allowance for credit losses	(1,213)		(315)


Accounts receivable, net—third parties	$	12,168	$	11,029

3. Inventories

Inventories consist of the following:


	September 30, 2021		December 31, 2020
Finished products	$	6,217	$	3,157
Feedstock, additives and chemicals	373		317
Inventories	$	6,590	$	3,474

4. Property, Plant and Equipment

Depreciation expense on property, plant and equipment of $23,010 and $22,913 is included in cost of sales in the consolidated statements of operations for the three months ended September 30, 2021 and 2020, respectively. Depreciation expense on property, plant and equipment of $68,795 and $68,380 is included in cost of sales in the consolidated statements of operations for the nine months ended September 30, 2021 and 2020, respectively.

5. Deferred Charges and Other Assets

Amortization expense on other assets of $3,576 and $3,010 is included in costs of sales in the consolidated statements of operations for the three months ended September 30, 2021 and 2020, respectively. Amortization expense on other assets of $14,035 and $9,387 is included in costs of sales in the consolidated statements of operations for the nine months ended September 30, 2021 and 2020, respectively.

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WESTLAKE CHEMICAL PARTNERS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)

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

3.~~Inventories~~

~~Inventories consist of the following:~~

September 30,
2020
December 31,
2019
Finished products
$ 1,174

$ 2,154
Feedstock, additives and chemicals
478

330
Inventories
$ 1,652

$ 2,484

4.~~Property, Plant and Equipment~~

Depreciation expense on property, plant and equipment of $22,913 and $22,313 is included in cost of sales in the consolidated statements of operations for the three months ended September 30, 2020 and 2019, respectively. Depreciation expense on property, plant and equipment of $68,380 and $66,754 is included in cost of sales in the consolidated statements of operations for the nine months ended September 30, 2020 and 2019, respectively.

5.~~Deferred Charges and Other Assets~~

Amortization expense on other assets of $3,010 and $4,368 is included in costs of sales in the consolidated statements of operations for the three months ended September 30, 2020 and 2019, respectively. Amortization expense on other assets of $9,387 and $13,628 is included in costs of sales in the consolidated statements of operations for the nine months ended September 30, 2020 and 2019, respectively.

6.Distributions and Net Income Per Limited Partner Unit

On ~~October 30, 2020,~~November 1, 2021, the board of directors of Westlake Chemical Partners GP LLC ("Westlake GP"), the Partnership's general partner, declared a quarterly cash distribution for the three months ended September 30, ~~2020~~2021 of $0.4714 per unit. This distribution is payable on November ~~24, 2020~~29, 2021 to ~~the~~ unitholders of record as of November ~~9, 2020.~~12, 2021.

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 September 30,					Nine Months Ended September 30,						Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019			2020		2019				2021		2020		2021		2020
Net income attributable to the Partnership	$	18,535	$	14,922		$	51,142	$	43,610		Net income attributable to the Partnership	$	12,790	$	18,535	$	53,035	$	51,142
Less:											Less:
Limited partners' distribution declared on common units	16,591		16,348			49,772		48,127			Limited partners' distribution declared on common units	16,600		16,591		49,788		49,772

Net income in excess of distribution (distribution in excess of net income)	$	1,944	$	(1,426	)	$	1,370	$	(4,517	)	Net income in excess of distribution (distribution in excess of net income)	$	(3,810)	$	1,944	$	3,247	$	1,370

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.


	Three Months Ended September 30, 2021
	Limited Partners' Common Units		Incentive Distribution Rights		Total
Net income attributable to the Partnership:
Distribution	$	16,600	$	—	$	16,600
Distribution in excess of net income	(3,810)		—		(3,810)
Net income	$	12,790	$	—	$	12,790
Weighted average units outstanding:
Basic and diluted	35,209,976				35,209,976
Net income per limited partner unit:
Basic and diluted	$	0.36

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WESTLAKE CHEMICAL PARTNERS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)

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


	Three Months Ended September 30, 2020
	Limited Partners' Common Units		Incentive Distribution Rights		Total
Net income attributable to the Partnership:
Distribution	$	16,591	$	—	$	16,591
Net income in excess of distribution	1,944		—		1,944
Net income	$	18,535	$	—	$	18,535
Weighted average units outstanding:
Basic and diluted	35,194,545				35,194,545
Net income per limited partner unit:
Basic and diluted	$	0.53


	Nine Months Ended September 30, 2021
	Limited Partners' Common Units		Incentive Distribution Rights		Total
Net income attributable to the Partnership:
Distribution	$	49,788	$	—	$	49,788
Net income in excess of distribution	3,247		—		3,247
Net income	$	53,035	$	—	$	53,035
Weighted average units outstanding:
Basic and diluted	35,203,609				35,203,609
Net income per limited partner unit:
Basic and diluted	$	1.51

Three Months Ended September 30, 2020
Limited Partners' Common Units Incentive Distribution Rights Total
Net income attributable to the Partnership:
Distribution $ 16,591
$ 0
$ 16,591
Net income in excess of distribution 1,944
0
1,944
Net income $ 18,535
$ 0
$ 18,535
Weighted average units outstanding:
Basic and diluted 35,194,545
35,194,545
Net income per limited partner unit:
Basic and diluted $ 0.53

Three Months Ended September 30, 2019
Limited Partners' Common Units Incentive Distribution Rights Total
Net income attributable to the Partnership:
Distribution $ 16,348
$ 0
$ 16,348
Distribution in excess of net income (1,426 ) 0
(1,426 )
Net income $ 14,922
$ 0
$ 14,922
Weighted average units outstanding:
Basic and diluted 35,188,189
35,188,189
Net income per limited partner unit:
Basic and diluted $ 0.42

Nine Months Ended September 30, 2020
Limited Partners' Common Units Incentive Distribution Rights Total
Net income attributable to the Partnership:
Distribution $ 49,772
$ 0
$ 49,772
Net income in excess of distribution 1,370
0
1,370
Net income $ 51,142
$ 0
$ 51,142
Weighted average units outstanding:
Basic and diluted 35,194,545
35,194,545
Net income per limited partner unit:
Basic and diluted $ 1.45

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~~WESTLAKE CHEMICAL PARTNERS LP~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~—~~Continued~~

~~(Unaudited)~~

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

Nine Months Ended September 30, 2019
Limited Partners' Common Units Incentive Distribution Rights Total
Net income attributable to the Partnership:
Distribution $ 48,127
$ 0
$ 48,127
Distribution in excess of net income (4,517 ) 0
(4,517 )
Net income $ 43,610
$ 0
$ 43,610
Weighted average units outstanding:
Basic and diluted 34,251,005
34,251,005
Net income per limited partner unit:
Basic and diluted $ 1.27


	Nine Months Ended September 30, 2020
	Limited Partners' Common Units		Incentive Distribution Rights		Total
Net income attributable to the Partnership:
Distribution	$	49,772	$	—	$	49,772
Net income in excess of distribution	1,370		—		1,370
Net income	$	51,142	$	—	$	51,142
Weighted average units outstanding:
Basic and diluted	35,194,545				35,194,545
Net income per limited partner unit:
Basic and diluted	$	1.45

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	%

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 %

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WESTLAKE CHEMICAL PARTNERS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)

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

The Partnership's distribution for the three months ended September 30, ~~2020~~2021 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 nine months ended September 30, ~~2020~~2021 and ~~2019~~2020 were as follows:

Three Months Ended September 30, Nine Months Ended September 30,
2020 2019 2020 2019
Distributions per common unit $ 0.4714
$ 0.4579
$ 1.4142
$ 1.3359


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Distributions per common unit	$	0.4714	$	0.4714	$	1.4142	$	1.4142

7. Partners' Equity

On October 4, 2018, the Partnership and Westlake Chemical Partners GP LLC, 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 September 30, ~~2020.~~2021.

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.

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~~WESTLAKE CHEMICAL PARTNERS LP~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~—~~Continued~~

~~(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 September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Net sales—Westlake	$	247,887	$	217,763	$	708,646	$	660,022

Three Months Ended September 30, Nine Months Ended September 30,
2020 2019 2020 2019
Net sales—Westlake $ 217,763
$ 216,678
$ 660,022
$ 703,765

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~~During~~WESTLAKE CHEMICAL PARTNERS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)

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

OpCo declared force majeure events in September 2021 during the ~~third quarter~~Petro 2 facility turnaround, in June 2021 related to OpCo's Petro 1 facility outage, and in February 2021 due to the severe winter storm. As a result of these events, the Partnership updated its estimate of OpCo's 2021 anticipated production as of September 30, 2021. The buyer deficiency fee is measured based upon the lower of the actual production deficiency at period end or the estimated annual production deficiency based upon OpCo's annual anticipated production. Based upon this change in estimate of OpCo's 2021 anticipated production, the Partnership has recognized buyer deficiency fees and shortfall fees of $3,045 and $21,465 during the three and nine months ended September 30, 2021, respectively. The buyer deficiency fees and shortfall fees are classified as a component of net sales.

During 2020, the Lake Charles Petro 1 and Petro 2 facilities were impacted by ~~Hurricane~~Hurricanes Laura and Delta, which resulted in a force majeure ~~event~~events under the Ethylene Sales Agreement. As a result of the force majeure ~~event,~~events, the Partnership recognized a buyer deficiency fee of ~~$41,329~~$69,555 as a component of net sales in the quarter ended September 30, 2020, representing fixed margin and unavoided operating and maintenance capital expenditures and maintenance expenses per pound of volume committed by Westlake during the force majeure event.2020. Payment for the buyer deficiency fee ~~is scheduled to be~~was received by the Partnership ~~after the conclusion of the year.~~in January 2021.

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 September 30, Nine Months Ended September 30,
2020 2019 2020 2019
Feedstock purchased from Westlake and included in cost of sales $ 60,646
$ 73,813
$ 189,608
$ 285,567
Other charges from Westlake and included in cost of sales 23,166
25,990
71,164
81,026
Total $ 83,812
$ 99,803
$ 260,772
$ 366,593

~~Table of Contents~~

~~WESTLAKE CHEMICAL PARTNERS LP~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~—~~Continued~~

~~(Unaudited)~~

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


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Feedstock purchased from Westlake and included in cost of sales	$	119,000	$	60,646	$	302,095	$	189,608
Other charges from Westlake and included in cost of sales	35,615		23,166		94,923		71,164
Total	$	154,615	$	83,812	$	397,018	$	260,772

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 September 30, Nine Months Ended September 30,
2020 2019 2020 2019
Services received from Westlake and included in selling, general and administrative expenses $ 5,679
$ 6,808
$ 16,492
$ 19,875


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Services received from Westlake and included in selling, general and administrative expenses	$	6,925	$	5,679	$	21,837	$	16,492

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 September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Goods and services purchased from Westlake and capitalized as assets	$	3,606	$	404	$	4,542	$	1,268

Three Months Ended September 30, Nine Months Ended September 30,
2020 2019 2020 2019
Goods and services purchased from Westlake and capitalized as assets $ 404
$ 634
$ 1,268
$ 1,918

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WESTLAKE CHEMICAL PARTNERS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(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~~Partnership's 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 ~~$69~~$81 and ~~$601~~$56 was included in the receivable under the Investment Management Agreement balance at September 30, ~~2020~~2021 and December 31, ~~2019,~~2020, respectively. Total interest earned related to the Investment Management Agreement was ~~$69~~$81 and ~~$716~~$69 for the three months ended September 30, ~~2020~~2021 and ~~2019,~~2020, respectively, and ~~$876~~$225 and ~~$2,688~~$876 for the nine months ended September 30, ~~2020~~2021 and ~~2019,~~2020, respectively.

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

September 30,
2020 December 31,
2019
Receivable under the Investment Management Agreement $ 191,241
$ 162,773

~~Table of Contents~~

~~WESTLAKE CHEMICAL PARTNERS LP~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~—~~Continued~~

~~(Unaudited)~~

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


	September 30, 2021		December 31, 2020
Receivable under the Investment Management Agreement	$	196,252	$	123,228

Accounts Receivable from Related Parties

The Partnership's accounts receivable from Westlake result primarily from ethylene sales to Westlake and the buyer deficiency fee and shortfall fee recognized under the Ethylene Sales Agreement, as discussed above under "Sales to Related Parties." The buyer deficiency fee and shortfall fee recognized in the nine months ended September 30, 2021 are scheduled to be received by the Partnership after the end of 2021.

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

September 30,
2020 December 31,
2019
Accounts receivable—Westlake $ 56,237
$ 42,847


	September 30, 2021		December 31, 2020
Accounts receivable—Westlake	$	57,020	$	108,028

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:

September 30,
2020
December 31,
2019
Accounts payable—Westlake
$ 17,923
$ 15,201


	September 30, 2021		December 31, 2020

Accounts payable—Westlake	$	13,259	$	7,855

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 ~~$407~~$997 and ~~$597~~$407 for the three months ended September 30, ~~2020~~2021 and ~~2019,~~2020, respectively, and ~~$1,803~~$2,292 and ~~$1,673~~$1,803 for the nine months ended September 30, ~~2020~~2021 and ~~2019,~~2020, respectively, and reflected in other charges from Westlake that are included in cost of sales.

OpCo has 2 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.

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WESTLAKE CHEMICAL PARTNERS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(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 September 30, 2021 and 2020 was $2,190 and ~~2019 was~~ $2,320, ~~and $4,411,~~ respectively. Interest on related party debt payable balances for the nine months ended September 30, 2021 and 2020 was $6,650 and ~~2019 was~~ $9,701, ~~and $15,436,~~ respectively. Interest on related party debt payable is presented as interest expense—Westlake in the consolidated statements of operations. At September 30, ~~2020~~2021 and December 31, ~~2019,~~2020, accrued interest on related party debt was ~~$2,320~~$2,193 and ~~$4,187,~~$2,336, respectively, and is reflected as a component of accrued liabilities in the consolidated balance sheets.

Debt payable to related parties was as follows:

September 30,
2020 December 31,
2019
Long-term debt payable to Westlake $ 399,674
$ 399,674


	September 30, 2021		December 31, 2020
Long-term debt payable to Westlake	$	399,674	$	399,674

Major Customer and Concentration of Credit Risk

During the three months ended September 30, ~~2020~~2021 and ~~2019,~~2020, Westlake accounted for approximately ~~93.9%~~84.3% and ~~86.7%~~93.9%, respectively, of the Partnership's net sales. During the nine months ended September 30, ~~2020~~2021 and ~~2019,~~2020, Westlake accounted for approximately ~~91.5%~~80.1% and ~~85.9%~~91.5%, respectively, of the Partnership's net sales.

~~Other~~

~~See Note 7 above for an additional related party transaction.~~

~~Table of Contents~~

~~WESTLAKE CHEMICAL PARTNERS LP~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~—~~Continued~~

~~(Unaudited)~~

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

9.Long-term Debt Payable to Westlake

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

September 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%.


	September 30, 2021		December 31, 2020
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

The weighted average interest rate on all long-term debt was ~~2.3%~~2.1% and ~~4.1%, respectively,~~2.2% at September 30, ~~2020~~2021 and December 31, ~~2019.~~2020, respectively.

As of September 30, ~~2020,~~2021, the Partnership was in compliance with all of the covenants under the OpCo Revolver and the MLP Revolver.

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 nine months ended September 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 nine months ended September 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 7.6 million gallons and 18.0 million pounds of commodities as of September 30, 2020 and 39.1 million gallons and 93.0 million pounds of commodities as of December 31, 2019.

At September 30, 2020, the fair value of these derivative instruments recorded as accrued liabilities was $1,147. 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 $2,539 and $306, respectively, for the three months ended September 30, 2020 and losses recognized in net sales and cost of sales were $6,801 and $1,294, respectively, for the three months ended September 30, 2019. The losses recognized in net sales and gains recognized in cost of sales related to derivatives were $384 and $150, respectively, for the nine months ended September 30, 2020 and losses recognized in net sales and cost of sales related to derivatives were $4,375 and $2,678, respectively, for the nine months ended September 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.

~~Table of Contents~~

~~WESTLAKE CHEMICAL PARTNERS LP~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~—~~Continued~~

~~(Unaudited)~~

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

~~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.

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WESTLAKE CHEMICAL PARTNERS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(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 September 30, ~~2020~~2021 and December 31, ~~2019~~2020 are summarized in the table below. The Partnership's long-term debt includes the OpCo Revolver and the MLP Revolver at September 30, ~~2020.~~2021. 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.

September 30, 2020 December 31, 2019

Carrying
Value

Fair
Value

Carrying
Value

Fair
Value
OpCo Revolver $ 22,619
$ 22,980
$ 22,619
$ 23,364
MLP Revolver 377,055
378,797
377,055
379,452


	September 30, 2021				December 31, 2020
	Carrying Value		Fair Value		Carrying Value		Fair Value
OpCo Revolver	$	22,619	$	23,410	$	22,619	$	23,301
MLP Revolver	377,055		385,426		377,055		383,284

~~12.~~11. Supplemental Information

Accrued and Other Liabilities

Accrued and other liabilities were ~~$16,955~~$24,527 and ~~$17,507~~$18,768 at September 30, ~~2020~~2021 and December 31, ~~2019,~~2020, respectively. Accrued taxes, accrued maintenance expense, accrued turnaround costs and accrued ~~interest,~~capital expenditures, which are components of accrued liabilities, were ~~$5,550, $4,054~~$4,784, $5,438, $3,330 and ~~$2,320,~~$4,832, respectively, at September 30, ~~2020~~2021 and ~~$2,611, $3,225~~$6,207, $3,905, $0 and ~~$4,187,~~$2,286, respectively, at December 31, ~~2019.~~2020. No other component of accrued and other 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 ~~$1,945~~$3,663 and ~~$1,213~~$1,945 for the nine months ended September 30, ~~2020~~2021 and ~~2019,~~2020, respectively.

~~Table of Contents~~

~~WESTLAKE CHEMICAL PARTNERS LP~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~—~~Continued~~

~~(Unaudited)~~

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

~~13.~~12. 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 ("RCRA"), 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.

On September 27, 2021, shortly after the turnaround on Petro 2 commenced, there was a flash fire at the quench tower of the Petro 2 facility. Several contractors working on the quench tower were injured. There are five lawsuits pending in connection with the flash fire.

The Partnership is also involved in ~~various~~other 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.

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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~~2020 (the ~~"2019~~"2020 Form 10-K"), as filed with the SEC on ~~February 28, 2020.~~March 2, 2021. 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~~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.

~~Table of Contents~~

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 on an annual basis, 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. In the event of a force majeure event, we recognize buyer deficiency fees representing fixed margin and unavoided operating and maintenance capital expenditures and maintenance expenses ~~per pound of volume committed by Westlake during the force majeure event.~~associated with ethylene that OpCo would have produced and is not expected to be produced based on anticipated production. Payment for the buyer deficiency fee is scheduled to be received by the Partnership after the conclusion of the year.

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 generally recognized during the period in which the related operating, maintenance or turnaround activities occur.

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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 generally 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.

~~Table of Contents~~

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. Fees for a buyer deficiency and Shortfall are included in net income in the periods in which they are recognized. 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~~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.

~~Recent~~

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Significant Developments Affecting Industry Conditions and Our Business

COVID-19, ~~and Other 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~~have not ~~experience~~experienced significant disruptions to our business operations ~~in the nine months ended September 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.

~~Our first priority in~~OpCo's Petro 2 Turnaround

In September 2021, we commenced our ~~response to this crisis has been the health and safety~~planned major maintenance activities, or turnaround, 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 health 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 second half of 2021.~~in Lake Charles, Louisiana. The turnaround iswas originally expected to ~~last approximately 60 days.~~

~~Though~~conclude in November. On September 27, 2021, shortly after the ~~price~~turnaround commenced, there was a flash fire at the quench tower of ~~crude oil has partially recovered~~the Petro 2 facility. Several contractors working on the quench tower were injured. Although there was no sustained fire or offsite impact resulting from ~~its sudden collapse in early March 2020,~~the incident and the quench tower did not sustain significant damage, due to the ~~continuing impact~~subsequent investigation by the Occupational Safety and Health Administration, the duration of ~~low crude-oil prices~~the turnaround has been extended and is now expected to conclude in December. There are five lawsuits pending in connection with the ~~addition of ethylene production capacity~~flash fire.

Force Majeure Events

OpCo declared force majeure events 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 usSeptember 2021 during the Petro 2 facility turnaround, in June 2021 related to ~~produce ethylene to sell to third parties.~~

~~Table of Contents~~

~~Impact of Hurricanes Laura and Delta~~

On August 27, 2020, Hurricane Laura made landfall in Louisiana as a Category 4 storm, which resulted in wide-spread damage to property and infrastructure in the greater Lake Charles area, including the electricity transmission system. On October 9, 2020, Hurricane Delta made landfall as a Category 2 storm in the same general vicinity of Louisiana. As a precautionary measure, OpCo idled its units in the Lake Charles area,OpCo's Petro 1 facility outage, and ~~Petro 2,~~ in ~~advance of each~~February 2021 due to the severe winter storm. As a result of the storms and certain pre-existing issues discovered during start-up following Hurricanes Laura and Delta, Petro 1 and Petro 2 remained shut down in the month of September. Petro 1 and Petro 2 have resumed production. In connection with these ~~outages and pursuant to the Ethylene Sales Agreement, OpCo provided notices of~~ force majeure events ~~to Westlake. Under~~and the ~~Ethylene Sales Agreement, Westlake's obligation to pay for the annual minimum commitment (95%~~commencement of OpCo's ~~budgeted~~Petro 2 ethylene ~~production) will generally not be reduced for~~unit turnaround in September 2021, the ~~first 45 days~~Partnership updated its estimate of ~~a force majeure event. As a result~~OpCo's 2021 anticipated production as of ~~the force majeure event due to Hurricane Laura, we recognized a~~September 30, 2021. The buyer deficiency fee is measured based upon the lower of ~~$41.3~~the actual production deficiency at period end or the estimated annual production deficiency based upon OpCo's annual anticipated production. Based upon this change in estimate of OpCo's 2021 anticipated production, the Partnership has recognized buyer deficiency fees and Shortfall of $3.0 million and $21.5 million during the three and nine months ended September 30, 2021, respectively. The buyer deficiency fees and Shortfall are classified as a component of net sales in the quarter ended September 30, 2020, representing fixed margin and unavoided operating and maintenance capital expenditures and maintenance expenses per pound of volume committed by Westlake during the force majeure event. Payment for the buyer deficiency fee is scheduled to be received by the Partnership after the conclusion of the year.

sales.

Table of Contents

Results of Operations


	Three Months Ended September 30,						Nine Months Ended September 30,
	2021			2020			2021			2020

	(dollars in thousands)
Revenue
Net sales—Westlake	$	247,887		$	217,763		$	708,646		$	660,022
Net co-product, ethylene and other sales—third parties	46,079			14,206			175,756			60,996
Total net sales	293,966			231,969			884,402			721,018
Cost of sales	218,038			131,578			589,746			427,049
Gross profit	75,928			100,391			294,656			293,969
Selling, general and administrative expenses	7,792			6,255			24,734			18,590
Income from operations	68,136			94,136			269,922			275,379
Other income (expense)
Interest expense—Westlake	(2,190)			(2,320)			(6,650)			(9,701)
Other income, net	24			17			52			725
Income before income taxes	65,970			91,833			263,324			266,403
Income tax provision (benefit)	(105)			(15)			333			408
Net income	66,075			91,848			262,991			265,995
Less: Net income attributable to noncontrolling interest in OpCo	53,285			73,313			209,956			214,853
Net income attributable to Westlake Chemical Partners LP	$	12,790		$	18,535		$	53,035		$	51,142
MLP distributable cash flow (1)	$	12,977		$	21,188		$	54,760		$	56,380
EBITDA (2)	$	94,746		$	120,076		$	352,804		$	353,871
____________

(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 September 30, 2021						Nine Months Ended September 30, 2021
	Average Sales Price			Volume			Average Sales Price			Volume
Product sales prices and volume percentage change from prior-year period	+30.3		%	+22.3		%	+27.6		%	-0.6		%

	Three Months Ended September 30,						Nine Months Ended September 30,
	2021			2020			2021			2020
Average industry prices (1)
Ethane (cents/lb)	11.7			7.4			9.5			6.2
Propane (cents/lb)	27.6			11.9			23.2			10.1
Ethylene (cents/lb) (2)	48.0			19.3			45.3			15.4

Three Months Ended September 30, Nine Months Ended September 30,
2020 2019 2020 2019

(dollars in thousands)
Revenue
Net sales—Westlake $ 217,763
$ 216,678
$ 660,022
$ 703,765
Net co-product, ethylene and other sales—third parties 14,206
33,247
60,996
115,308
Total net sales 231,969
249,925
721,018
819,073
Cost of sales 131,578
156,706
427,049
543,242
Gross profit 100,391
93,219
293,969
275,831
Selling, general and administrative expenses 6,255
6,822
18,590
21,434
Income from operations 94,136
86,397
275,379
254,397
Other income (expense)
Interest expense—Westlake (2,320 ) (4,411 ) (9,701 ) (15,436 )
Other income, net 17
565
725
2,533
Income before income taxes 91,833
82,551
266,403
241,494
Income tax provision (benefit) (15 ) 72
408
509
Net income 91,848
82,479
265,995
240,985
Less: Net income attributable to noncontrolling interest in OpCo 73,313
67,557
214,853
197,375
Net income attributable to Westlake Chemical Partners LP $ 18,535
$ 14,922
$ 51,142
$ 43,610
MLP distributable cash flow ⁽¹⁾
$ 21,188
$ 20,452
$ 56,380
$ 54,429
EBITDA ⁽²⁾
$ 120,076
$ 113,643
$ 353,871
$ 337,312
____________

(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.
_____________

(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.

Three Months Ended September 30, 2020 Nine Months Ended September 30, 2020
Average
Sales Price Volume
Average
Sales Price
Volume
Product sales prices and volume percentage change from prior-year period +10.8 % -34.5 % -1.8 % -15.2 %

Three Months Ended September 30, Nine Months Ended September 30,
2020 2019 2020 2019
Average industry prices ⁽¹⁾

Ethane (cents/lb) 7.4
5.8
6.2
7.6
Propane (cents/lb) 11.9
10.3
10.1
13.0
Ethylene (cents/lb) ⁽²⁾
19.3
20.7
15.4
17.1

~~_____________~~


~~(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.~~

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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 September 30,						Nine Months Ended September 30,							Three Months Ended September 30,				Nine Months Ended September 30,
	2020			2019			2020			2019				2021		2020		2021		2020

	(dollars in thousands)													(dollars in thousands)
Net cash provided by operating activities	$	117,157		$	121,482		$	340,876		$	335,154		Net cash provided by operating activities	$	99,459	$	117,157	$	386,577	$	340,876
Loss from disposition of fixed assets	(554		)	—			(1,000		)	(458		)	Loss from disposition of fixed assets	(372)		(554)		(1,763)		(1,000)
Changes in operating assets and liabilities and other	(24,755		)	(39,003		)	(73,881		)	(93,711		)	Changes in operating assets and liabilities and other	(33,012)		(24,755)		(121,823)		(73,881)
Net Income	91,848			82,479			265,995			240,985			Net Income	66,075		91,848		262,991		265,995
Add:													Add:
Depreciation, amortization and disposition of property, plant and equipment	26,476			26,582			78,767			80,787			Depreciation, amortization and disposition of property, plant and equipment	26,958		26,476		84,590		78,767
Mark-to-market adjustment loss (gain) on derivative contracts	1,572			7,195			(215		)	6,996			Mark-to-market adjustment loss (gain) on derivative contracts	—		1,572		—		(215)
Less:													Less:
Contribution to turnaround reserves	(9,890		)	(3,932		)	(29,697		)	(11,669		)	Contribution to turnaround reserves	(10,795)		(9,890)		(35,590)		(29,697)
Maintenance capital expenditures	(6,509		)	(5,568		)	(25,858		)	(28,613		)	Maintenance capital expenditures	(15,346)		(6,509)		(41,433)		(25,858)

Distributable cash flow attributable to noncontrolling interest in OpCo	(82,309		)	(86,304		)	(232,612		)	(234,057		)	Distributable cash flow attributable to noncontrolling interest in OpCo	(53,915)		(82,309)		(215,798)		(232,612)
MLP distributable cash flow	$	21,188		$	20,452		$	56,380		$	54,429		MLP distributable cash flow	$	12,977	$	21,188	$	54,760	$	56,380

Reconciliation of EBITDA to Net Income, Income from Operations and Net Cash Provided by Operating Activities

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,
2020 2019 2020 2019

(dollars in thousands)
Net cash provided by operating activities $ 117,157
$ 121,482
$ 340,876
$ 335,154
Loss from disposition of fixed assets (554 ) —
(1,000 ) (458 )
Changes in operating assets and liabilities and other (24,755 ) (39,003 ) (73,881 ) (93,711 )
Net Income 91,848
82,479
265,995
240,985
Less:
Other income, net 17
565
725
2,533
Interest expense (2,320 ) (4,411 ) (9,701 ) (15,436 )
Benefit (Provision) for income taxes 15
(72 ) (408 ) (509 )
Income from operations 94,136
86,397
275,379
254,397
Add:
Depreciation and amortization 25,923
26,681
77,767
80,382
Other income, net 17
565
725
2,533
EBITDA $ 120,076
$ 113,643
$ 353,871
$ 337,312


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020

	(dollars in thousands)
Net cash provided by operating activities	$	99,459	$	117,157	$	386,577	$	340,876
Loss from disposition of fixed assets	(372)		(554)		(1,763)		(1,000)
Changes in operating assets and liabilities and other	(33,012)		(24,755)		(121,823)		(73,881)
Net Income	66,075		91,848		262,991		265,995
Less:
Other income, net	24		17		52		725
Interest expense	(2,190)		(2,320)		(6,650)		(9,701)
Benefit (Provision) for income taxes	105		15		(333)		(408)
Income from operations	68,136		94,136		269,922		275,379
Add:
Depreciation and amortization	26,586		25,923		82,830		77,767
Other income, net	24		17		52		725
EBITDA	$	94,746	$	120,076	$	352,804	$	353,871

Table of Contents

Summary

For the quarter ended September 30, ~~2020,~~2021, net income was $66.1 million on net sales of $294.0 million. This represents a decrease in net income of $25.7 million as compared to net income of $91.8 million on net sales of $232.0 ~~million. This represents an increase in net income of $9.3 million as compared to net income of $82.5 million on net sales of $249.9~~ million for the quarter ended September 30, ~~2019.~~2020. Net income attributable to ~~Westlake Chemical Partners LP~~the Partnership for the third quarter of 2021 was $12.8 million as compared to $18.5 million for the third quarter of 2020, a decrease of $5.7 million. Income from operations was ~~$18.5 million as compared to $14.9~~$68.1 million for the third quarter of ~~2019, an increase of $3.6 million. Net income and net income attributable~~2021 as compared to ~~Westlake Chemical Partners LP~~$94.1 million for the third quarter of ~~2020~~2020. Net income, net income attributable to the Partnership and the operating income for the third quarter of 2021 as compared to the third quarter of ~~2019~~2020 were ~~higher~~lower primarily due to decreased sales volumes to third parties and higher ethane feedstock and natural gas costs, partially offset by increased sales prices and volumes to Westlake. Net income, net income attributable to the partnership and income from operations for the third quarter of 2020 were also higher ~~sales price for ethylene sold~~as compared to ~~Westlake per~~ the ~~terms~~current quarter because of ~~the Ethylene Sales Agreement, the~~a buyer deficiency fee of $41.3 million recognized in the third quarter of 2020 ~~as a result of the~~due to force majeure event at the Petro 1 and Petro 2 units, as discussed above under "Recent Developments—Impact of Hurricanes Laura and Delta," and lower interest expense, partially offset by lower sales to third parties and increased maintenance expense.events in that period. Net sales for the third quarter of ~~2020 decreased~~2021 increased by ~~$17.9~~$62.0 million as compared to net sales for the third quarter of ~~2019,~~2020, mainly due to ~~lower~~higher production during the current quarter resulting in higher sales volumes to Westlake and higher sales prices to Westlake and third parties, partially offset by higher sales prices to Westlake per the terms of the Ethylene Sales Agreement and the buyer deficiency fee recognized during the period. Income from operations was $94.1 million for the third quarter of 2020 as compared to $86.4 million for the third quarter of 2019. Income from operations for the third quarter of 2020 increased mainly as a result of the higher sales price for ethylene sold to Westlake, the buyer deficiency fee recognized during the period, partially offset by increased maintenance expense and lower sales volumes to third parties ~~as compared to~~and the buyer deficiency fee of $41.3 million recognized during the third quarter of ~~2019.~~2020.

For the nine months ended September 30, ~~2020,~~2021, net income was $263.0 million on net sales of $884.4 million. This represents a decrease in net income of $3.0 million as compared to net income of $266.0 million on net sales of $721.0 ~~million. This represents an increase in net~~million for the nine months ended September 30, 2020. Income from operations was $269.9 million for the nine months ended September 30, 2021 as compared to $275.4 million for the nine months ended September 30, 2020. Net income ~~of $25.0 million~~and the income from operations for the nine months ended September 30, 2021 as compared to the nine months ended September 30, ~~2019 net income~~2020 were lower due to decreased sales volumes to Westlake and higher ethane feedstock and natural gas costs, partially offset by increased sales prices and volumes to third parties, and increased sales prices to Westlake. A buyer deficiency fee and Shortfall totaling $21.5 million per the terms of ~~$241.0~~the Ethylene Sales Agreement with Westlake was recognized in the nine months ended September 30, 2021 as compared to the buyer deficiency fee of $41.3 million ~~on net sales of $819.1 million.~~recognized in the nine months ended September 30, 2020. Net income attributable to ~~Westlake Chemical Partners LP~~the Partnership for the nine months ended September 30, 2021 was $53.0 million as compared to $51.1 million for the nine months ended September 30, 2020, ~~was $51.1 million as compared~~an increase of $1.9 million. The higher net income attributable to ~~$43.6 million~~the Partnership for the nine months ended September 30, ~~2019, an increase of $7.5 million. The increase in net income and net income attributable~~2021 as compared to ~~Westlake Chemical Partners LP in~~ the nine months ended September 30, 2020 was primarily due to ~~the buyer deficiency fee of $41.3 million recognized during the current-year period as a result of the force majeure event at the Petro 1 and Petro 2 units and~~ lower ~~selling, general and administrative expenses and~~ interest expense ~~partially offset by lower sales to third parties, as compared to~~in the nine months ended September 30, ~~2019.~~2021. Net sales for the nine months ended September 30, ~~2020 decreased~~2021 increased by ~~$98.1~~$163.4 million as compared to net sales for the nine months ended September 30, ~~2019,~~2020, mainly due to ~~lower production~~higher sales prices and ~~lower sales~~volumes to third parties ~~partially offset by~~and higher sales ~~prices~~price to Westlake, ~~per the terms of the Ethylene Sales Agreement and~~as well as the buyer deficiency fee and Shortfall recognized ~~for the period. Income from operations was $275.4 million for~~during the nine months ended September 30, ~~2020 as compared to $254.4 million for the nine months ended September 30, 2019. Income from operations for the nine months ended September 30, 2020 increased mainly as a result of~~2021, partially offset by the buyer deficiency fee recognized during the ~~period~~first nine months of 2020 and lower ~~selling, general and administrative expenses, partially offset by lower~~ sales volumes to ~~third parties, as compared to~~Westlake during the nine months ended September 30, ~~2019.~~2021.

RESULTS OF OPERATIONS

Third Quarter ~~2020~~2021 Compared with Third Quarter ~~2019~~2020

Net Sales. Total net sales ~~decreased~~increased by ~~$17.9~~$62.0 million, or ~~7.2%~~26.7%, to $294.0 million in the third quarter of 2021 from $232.0 million in the third quarter of ~~2020 from $249.9 million in the third quarter of 2019.~~2020. The ~~decrease~~increase in net sales in the third quarter of ~~2020~~2021 was primarily due to ~~lower production during the quarter,~~higher sales prices and volumes to Westlake, higher sales prices to third parties, partially offset by lower sales volumes to third parties and the buyer deficiency fee ~~of $41.3 million~~ recognized ~~for the period and higher sales prices to Westlake per the terms of the Ethylene Sales Agreement in~~during the third quarter of 2020. The lower sales volume in the third quarter of 2020 contributed to a decrease in net sales of 34.5% in the third quarter of 2020 compared to the third quarter of 2019. The decrease in sales volume for the third quarter of 2020 was primarily due to the force majeure event at our Lake Charles Petro 1 and Petro 2 units. The average sales price in the third quarter of ~~2020~~2021 contributed to a ~~10.8%~~30.3% increase in net sales, primarily due to higher ethylene sales prices to third parties and Westlake per the terms of the Ethylene Sales Agreement. The average sales volume in the third quarter of 2021 contributed to a 22.3% increase in net sales, primarily due to higher production resulting in increased sales volumes to Westlake as compared to the third quarter of 2020.

Gross Profit. Gross profit ~~increased~~decreased to $75.9 million for the third quarter of 2021 from $100.4 million for the third quarter of ~~2020 from $93.2 million for the third quarter of 2019.~~2020. The gross profit margin in the third quarter of ~~2020~~2021 was ~~43.3%~~25.8%, as compared to ~~37.3%~~43.3% for the third quarter of ~~2019.~~2020. The third quarter ~~of 2020~~2021 gross profit margin was ~~higher~~lower mainly due to ~~higher earnings on ethylene sold~~lower sales prices to Westlake, ~~as a result of~~higher ethane feedstock and natural gas costs and the buyer deficiency fee ~~of $41.3 million~~ recognized during the third quarter of 2020, partially offset by ~~lower sales~~higher prices for ethylene sold to third parties and ~~increased maintenance expense at the Lake Charles Petro I and Petro 2 units compared~~higher volumes for ethylene sold to Westlake in the third quarter of ~~2019.~~2021.

Selling, General and Administrative Expenses. Selling, general and administrative expenses ~~decreased~~increased by ~~$0.5~~$1.5 million, or ~~7.4%~~23.8%, to $7.8 million in the third quarter of 2021 as compared to $6.3 million in the third quarter of ~~2020 as compared to $6.8 million~~2020. The increase in the third quarter of ~~2019. The decrease in the third quarter of 2020~~2021 was mainly attributable to ~~lower general~~increased service costs and ~~administrative expense allocations~~allowance for doubtful accounts as compared to the third quarter of ~~2019.~~2020.

~~Table of Contents~~

Interest Expense. Interest expense ~~decreased by $2.1~~of $2.2 million in the third quarter of 2021 was comparable to $2.3 million in the third quarter of ~~2020 from $4.4 million in the third quarter~~2020.

Table of ~~2019, largely due to a lower interest rate on debt as a result of a decrease in the London Interbank Offered Rate ("LIBOR").~~Contents

~~Other Income, net.~~
Other income, net in the third quarter of 2020 decreased by $0.6 million, primarily due to a decrease in interest income earned under the Investment Management Agreement as a result of lower average interest rates.

MLP Distributable Cash Flow. MLP distributable cash flow ~~increased~~decreased by ~~$0.7~~$8.2 million to $13.0 million in the third quarter of 2021 from $21.2 million in the third quarter of ~~2020 from $20.5 million~~2020. The decrease in the third quarter of ~~2019. The increased MLP distributable cash flow in the third quarter of 2020,~~2021, as compared to the prior-year period, was primarily attributable to the decreased earnings at OpCo, increased turnaround reserves and higher maintenance expense due to ~~the buyer deficiency fee of $41.3~~OpCo's Petro 2 ethylene unit turnaround that commenced in September 2021.

EBITDA. EBITDA decreased by $25.4 million ~~recognized~~to $94.7 million in the third quarter of ~~2020 and lower interest expense, partially offset by increased turnaround reserves.~~

~~EBITDA.~~ ~~EBITDA increased by $6.5 million to~~2021 from $120.1 million in the third quarter of ~~2020 from $113.6 million in the third quarter of 2019.~~2020. The ~~increased EBITDA, as compared to the prior-year period,~~decrease was primarily due to the buyer deficiency ~~fee of $41.3 million~~ recognized induring the third quarter of 2020, higher ethane feedstock and natural gas costs, partially offset by ~~lower~~higher sales volumes ~~as a result~~and prices to Westlake and the buyer deficiency fee and Shortfall recognized during the third quarter of ~~lower production.~~2021.

Nine Months Ended September 30, ~~2020~~2021 Compared with Nine Months Ended September 30, ~~2019~~2020

Net Sales. Total net sales ~~decreased~~increased by ~~$98.1~~$163.4 million, or ~~12.0%~~22.7%, to $884.4 million in the nine months ended September 30, 2021 from $721.0 million in the nine months ended September 30, ~~2020 from $819.1 million in the nine months ended September 30, 2019.~~2020. The ~~decrease~~increase in net sales in the nine months ended September 30, ~~2020~~2021 was primarily due to ~~lower production during the nine months ended September 30, 2020 and lower~~higher sales prices and volumes to third parties ~~partially offset by the buyer deficiency fee of $41.3 million recognized in the current-year period~~ and higher sales price to Westlake per the terms of the Ethylene Sales Agreement, inas well as the ~~current-year period. The~~buyer deficiency fee and Shortfall recognized during the nine months ended September 30, 2021, partially offset by the buyer deficiency fee recognized during the first nine months of 2020 and lower sales ~~volume contributed~~volumes to ~~a decrease in net~~Westlake during the nine months ended September 30, 2021. The average sales ~~of 15.2%~~price in the nine months ended September 30, 2020 compared to the nine months ended September 30, 2019. The decrease in sales volumes for the nine months ended September 30, 2020 was primarily due to the force majeure event at our Lake Charles Petro 1 and Petro 2 units resulting from Hurricane Laura. The average sales price for the nine months ended September 30, 20202021 contributed to a ~~1.8% decrease~~27.6% increase in net sales, primarily due to ~~lower~~higher ethylene sales prices to third ~~parties.~~parties and to Westlake.

Gross Profit. Gross profit increased to $294.7 million for the nine months ended September 30, 2021 from $294.0 million for the nine months ended September 30, ~~2020 from $275.8 million for the nine months ended September 30, 2019.~~2020. The gross profit margin in the nine months ended September 30, ~~2020~~2021 was ~~40.8%~~33.3%, as compared to ~~33.7%~~40.8% for the nine months ended September 30, ~~2019.~~2020. The ~~nine months ended September 30, 2020 gross profit margin~~decrease was ~~higher~~lower mainly due to the decreased sales volume to Westlake, increased ethane feedstock and natural gas costs, partially offset by higher ~~earnings on~~prices for ethylene sold to Westlake and third parties and the buyer deficiency fee ~~of $41.3 million~~and Shortfall recognized ~~for~~during the nine months ended September 30, ~~2020, partially offset by lower sales volumes resulting from the lower production at the Lake Charles Petro I and Petro 2 units~~2021 compared to the nine months ended September 30, ~~2019.~~2020.

Selling, General and Administrative Expenses. Selling, general and administrative expenses ~~decreased~~increased by ~~$2.8~~$6.1 million, or ~~13.1%~~32.8%, to $24.7 million in the nine months ended September 30, 2021 as compared to $18.6 million in the nine months ended September 30, ~~2020, as compared to $21.4 million~~2020. The increase in the nine months ended September 30, ~~2019. The decrease~~2021 was mainly attributable to ~~lower general~~higher service costs and ~~administrative expense allocations in~~allowance for doubtful accounts, as compared to the nine months ended September 30, ~~2020, as compared to the prior-year period.~~2020.

Interest Expense. Interest expense decreased by ~~$5.7~~$3.0 million to $6.7 million in the nine months ended September 30, 2021 from $9.7 million in the nine months ended September 30, 2020, ~~from $15.4 million in the nine months ended September 30, 2019~~largely due to a lower average interest rate on debt.

~~Other Income, net.~~ Other income, net decreased by $1.8 million to $0.7 million in the nine months ended September 30, 2020 as compared to $2.5 million in the nine months ended September 30, 2019, primarily due to a decrease in interest income earned under the Investment Management Agreement as a result of lower average interest rates.

~~Provision for Income Taxes.~~ Provision for income taxes was $0.4 million for the nine months ended September 30, 2020, as compared to a provision of $0.5 million for the nine months ended September 30, 2019. The decrease was mainly attributable to a tax benefit due to a revaluation of the state deferred income tax liability arising from a decrease in state tax apportionment.

MLP Distributable Cash Flow. MLP distributable cash flow ~~increased~~decreased by ~~$2.0~~$1.6 million to $54.8 million in the nine months ended September 30, 2021 from $56.4 million in the nine months ended September 30, ~~2020 from $54.4~~2020. The decrease in the nine months ended September 30, 2021 was primarily attributable to the decreased earnings at OpCo, increased turnaround reserves and higher maintenance expense related to OpCo's Petro 2 ethylene unit turnaround that commenced in September 2021.

EBITDA. EBITDA decreased by $1.1 million to $352.8 million in the nine months ended September 30, 2019. The increased MLP distributable cash flow in the nine months ended September 30, 2020, as compared to the prior-year period, was primarily due to the buyer deficiency fee of $41.3 million recognized during the nine months ended September 30, 2020 and lower interest expense, partially offset by increased turnaround reserves.

~~Table of Contents~~

~~EBITDA.~~ ~~EBITDA increased by $16.6 million to~~2021 from $353.9 million in the nine months ended September 30, ~~2020 from $337.3 million in the nine months ended September 30, 2019.~~2020. The ~~increased EBITDA, as compared to the prior-year period,~~decrease was primarily due to lower sales volumes to Westlake as a result of force majeure events, higher ethane feedstock and natural gas costs and the buyer deficiency fee ~~of $41.3 million~~recognized during the nine months ended September 30, 2020, partially offset by ~~lower~~higher sales prices and volumes for ethylene sold to third parties, higher sales prices to Westlake and ~~third parties as a result~~the buyer deficiency fee and Shortfall recognized in the nine months ended September 30, 2021.

Table of ~~the lower production.~~Contents

CASH FLOW DISCUSSION FOR THE NINE MONTHS ENDED SEPTEMBER 30, ~~2020~~2021 AND ~~2019~~2020

Operating Activities

Operating activities provided cash of $386.6 million in the first nine months of 2021 compared to cash provided by operating activities of $340.9 million in the first nine months of ~~2020 compared to cash provided by operating activities of $335.2 million in the first nine months of 2019.~~2020. The ~~$5.7~~$45.7 million increase in cash flows from operating activities was mainly due to an increase in ~~income~~cash provided from ~~operations, partially offset by an increase in cash used for~~ working capital during the nine months ended September 30, ~~2020~~2021 as compared to the prior-year period. Changes in components of working capital, which we define for the purposes of this cash flow discussion as accounts ~~receivable—~~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 liabilities, ~~used~~provided cash of ~~$2.1~~$57.3 million in the first nine months of ~~2020~~2021 as compared to ~~$14.7~~$2.1 million of cash ~~provided~~used in the first nine months of ~~2019,~~2020, resulting in an overall ~~unfavorable~~favorable change of ~~$16.8~~$59.4 million. The ~~unfavorable~~favorable change in working capital was mainly attributable to ~~an unfavorable~~a favorable change in Westlake, net accounts receivable due to the receipt of the buyer deficiency fee recognized in 2020 related to the force majeure events partially offset by unfavorable changes in accounts receivable, net—third ~~quarter of 2020.~~parties due to higher sales prices in the nine months ended September 30, 2021.

Investing Activities

Net cash used for investing activities during the first nine months of ~~2020~~2021 was ~~$58.2~~$111.4 million as compared to net cash used for investing activities of ~~$46.0~~$58.2 million in the first nine months of ~~2019,~~2020, mainly due to increased net cash used under the Investment Management Agreement in the first nine months of ~~2020,~~2021, as compared to the prior-year period. Capital expenditures during the first nine months of ~~2020~~2021 and ~~2019~~2020 were primarily related to projects to improve production capacity or reduce costs, maintenance and safety and environmental projects at our facilities.

Financing Activities

Net cash used for financing activities during the first nine months of ~~2020~~2021 was ~~$279.3~~$273.7 million as compared to net cash used byfor financing activities of ~~$290.3~~$279.3 million in the first nine months of ~~2019.~~2020. The outflows during the first nine months of 2021 were related to the distribution of $223.9 million to Westlake and of $49.8 million to other unitholders by the Partnership. The cash outflows during the first nine months of 2020 were related to the distribution of $229.5 million to Westlake and of $49.8 million to other unitholders by the Partnership. The cash inflows during the first nine months of 2019 were a result of borrowings under the MLP Revolver of $123.5 million and net proceeds from the private placement of common units of approximately $62.7 million. The cash outflows during the first nine months of 2019 were related to the distribution of $229.3 million to Westlake and of $45.7 million to other unitholders by the Partnership as well as a partial repayment of borrowings under the OpCo revolver of $201.4 million.

LIQUIDITY AND CAPITAL RESOURCES

Liquidity and Financing Arrangements

Pursuant to the terms of ~~an equity distribution agreement,~~the ATM Agreement, entered in October 2018 and amended in February 2020, among the Partnership and various investment banks, the Partnership may offer and sell the Partnership's common units from time to time to or through the ~~investment banks,~~Managers, as the Partnership's sales agents or as principals, having an aggregate offering amount of up to $50.0 million ~~("the ATM~~(the "ATM Program"). The Partnership intends to use the net proceeds of sales of the common units, if any, for general partnership purposes, including the funding of potential drop-downs and other acquisitions. No common units had been issued under the ATM Program as of September 30, ~~2020.~~2021.

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. To the extent we do not generate sufficient cash flow to fund capital expenditures, we expect to fund them primarily from external sources, including borrowing directly from Westlake, as well as future issuances of equity and debt interests.

The Partnership maintains separate bank accounts, but Westlake continues to provide treasury services on our behalf under the Services and Secondment Agreement. Our sources of liquidity include cash generated from operations, the OpCo Revolver, the MLP Revolver and, if necessary and possible under then current market conditions, the issuance of additional ~~common units representing limited partner~~equity interests ~~of the Partnership, other classes of units representing limited partner interests of the Partnership~~ or ~~debt securities.~~debt. We believe that cash generated from these sources will be sufficient to meet our short-term working capital requirements and long-term capital expenditure requirements and to make quarterly cash distributions. Westlake may also provide other direct and indirect financing to us from time to time, although it is not required to do so.

~~Table of Contents~~

In order to fund non-annual turnaround expenditures, we cause OpCo to reserve ~~approximately $30.0 million~~an amount for turnaround costs during each twelve-month period ~~for~~designed to cover future turnaround activities. Each of OpCo's ethylene production facilities requires turnaround maintenance approximately every five years. By reserving additional cash annually, we intend to reduce the variability in OpCo's cash flow. 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 credit facility and various indentures do not prevent OpCo from making distributions to us.

Table of Contents

On ~~October 30, 2020,~~November 1, 2021, 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 ~~24, 2020~~29, 2021 to unitholders of record as of November ~~9, 2020,~~12, 2021, 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, ~~2020.~~2021. 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.

Capital Expenditures

Westlake has historically funded expansion capital expenditures related to Lake Charles Olefins and Calvert City Olefins. Total capital expenditures for the nine months ended September 30, 2021 and 2020 ~~and 2019~~ were ~~$29.2~~$38.5 million and ~~$30.0~~$29.2 million, respectively. No funding was required by OpCo to fund capital expenditures during the nine months ended September 30, ~~2020~~2021 and ~~2019.~~2020. 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, ~~2020,~~2021, our cash and cash equivalents totaled ~~$23.3~~$18.6 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.

In August 2017, the Partnership, OpCo and Westlake executed the Investment Management Agreement that authorized Westlake to invest the Partnership's 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. The Partnership had ~~$191.2~~$196.3 million of cash invested under the Investment Management Agreement at September 30, ~~2020.~~2021.

Indebtedness

OpCo Revolver

In connection with the IPO, OpCo entered into a $600.0 million revolving credit facility with Westlake, as amended in August and December 2017 and March 2020 (the "OpCo Revolver") that may be used to fund growth projects and working capital needs. ~~On April 30, 2019, the Partnership repaid $201.4 million of borrowings under the~~The OpCo ~~Revolver.~~Revolver is scheduled to mature on September 25, 2023. As of September 30, ~~2020,~~2021, outstanding borrowings under the OpCo Revolver totaled $22.6 million and bore interest at the LIBOR rate plus 2.0%, which is accrued in arrears quarterly. ~~In September 2018, the OpCo Revolver was amended to extend the scheduled maturity date from August 4, 2019 to September 25, 2023 and revise the applicable margin from 3.0% to 2.0%.~~

~~Table of Contents~~

MLP Revolver

In 2015, we entered into a senior, unsecured revolving credit agreement with an affiliate of Westlake (the "MLP Revolver"). The MLP Revolver has a borrowing capacity of ~~$600~~$600.0 million and is scheduled to mature in 2023. On March 29, 2019, the Partnership borrowed $123.5 million under the MLP Revolver to partially fund the purchase of an 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. Borrowings under the MLP Revolver bear 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 MLP Revolver provides that we may pay all or a portion of the interest on any borrowings in kind, in which case any such amounts would be added to the principal amount of the loan. The MLP Revolver requires that we maintain a consolidated leverage ratio of either (1) during any one-year period following certain types of acquisitions (including acquisitions of additional interests in OpCo), 5.50:1.0 or less, or (2) during any other period, 4.50:~~1.0~~1.00 or less. The MLP Revolver also contains certain other customary covenants. The repayment of borrowings under the MLP Revolver is subject to acceleration upon the occurrence of an event of default. As of September 30, ~~2020,~~2021, outstanding borrowings under the MLP Revolver totaled $377.1 ~~million.~~million and bore interest at the LIBOR rate plus 2.0%, 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 corporate purposes.

Off-Balance Sheet Arrangements

None.

2623

Table of Contents

FORWARD-LOOKING STATEMENTS

Certain of the statements contained in this report are forward-looking statements. All statements, other than statements of historical facts, included in this report that address activities, events or developments that we expect, project, believe or anticipate will or may occur in the future are forward-looking statements. Forward-looking statements can be identified by the use of words such as "believes," "intends," "may," "should," "could," "anticipates," "expects," "will" or comparable terminology, or by discussions of strategies or trends. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we cannot give any assurances that these expectations will prove to be correct. Forward-looking statements relate to matters such as:

•the amount of ethane that we are able to process, which could be adversely affected by, among other things, operating difficulties;

•the volume of ethylene that we are able to sell;

•the price at which we are able to sell ethylene;

•industry market outlook, including prices and margins in third-party ethylene and co-products sales;

•widespread outbreak of an illness or any other communicable disease, or any other public health crisis, including the COVID-19 ~~pandemic;~~pandemic and efforts to contain its transmission;

•our plans and Westlake's plans to respond to the challenges presented by the COVID-19 epidemic, ~~including planned reductions of costs, increases of operational efficiencies and lowering of capital spending,~~ as well as the ~~timing and deferral~~duration of the planned ongoing turnaround at OpCo's Petro 2 ethylene unit;

•the parties to whom we will sell ethylene and on what basis;

•volumes of ethylene that Westlake may purchase, in addition to the minimum commitment under the Ethylene Sales Agreement;

•timing, funding and results of capital ~~projects;~~expenditures;

•our intended ~~minimum~~ quarterly distributions and the manner of making such distributions;

•our ability to meet our liquidity needs;

•timing of and amount of capital expenditures;

•the Partnership's At-the-Market program and the use of any net proceeds from any sales under that program;

•potential loans from Westlake to OpCo to fund OpCo's expansion capital expenditures in the future;

•expected mitigation of exposure to commodity price fluctuations;

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

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

•compliance with present and future environmental regulations and costs associated with environmentally related penalties, capital expenditures, remedial actions and proceedings, including any new laws, regulations or treaties that may come into force to limit or control carbon dioxide and other greenhouse gas emissions or to address other issues of climate change;

•our ability to receive indemnification from Westlake for environmental and other losses; and

•effects of pending legal proceedings.

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We have based these statements on assumptions and analysis in light of our experience and perception of historical trends, current conditions, expected future developments and other factors we believe were appropriate in the circumstances when the statements were made. Forward-looking statements by their nature involve substantial risks and uncertainties that could significantly impact expected results, and actual future results could differ materially from those described in such statements. These statements are subject to a number of assumptions, risks and uncertainties, including those described under "Risk Factors" in the ~~2019~~2020 Form 10-K and the following:

•general economic and business conditions;

•the cyclical nature of the chemical industry;

•the availability, cost and volatility of raw materials and energy;

•low crude oil prices reducing the cost advantage of ethane-based ethylene producers;

•uncertainties associated with the United States and worldwide economies, including those due to political tensions and unrest in the Middle East and elsewhere;

•uncertainties associated with pandemic infectious diseases, particularly COVID-19;

•current and potential governmental regulatory actions in the United States and regulatory actions and political unrest in other countries, including environmental regulations;

•industry production capacity and operating rates;

•the supply/demand balance for our ~~product;~~products;

•competitive products and pricing pressures;

•instability in the credit and financial markets;

•access to capital markets;

•terrorist acts;

•operating interruptions (including leaks, explosions, fires, weather-related incidents, mechanical failure, unscheduled downtime, labor difficulties, transportation interruptions, spills and releases and other environmental risks);

•changes in laws or regulations;

•technological developments;

•our ability to integrate acquired businesses;

•foreign currency exchange risks;

•our ability to implement our business strategies; and

•creditworthiness of our customers.

Many of these factors are beyond our ability to control or predict. Any of the factors, or a combination of these factors, could materially affect our future results of operations and the ultimate accuracy of the forward-looking statements. These forward-looking statements are not guarantees of our future performance, and our actual results and future developments may differ materially from those projected in the forward-looking statements. Management cautions against putting undue reliance on forward-looking statements or projecting any future results based on such statements or present or prior earnings levels. Every forward-looking statement speaks only as of the date of the particular statement, and we undertake no obligation to publicly update or revise any forward-looking statements.

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Item 3. Quantitative and Qualitative Disclosures about Market Risk

Commodity Price Risk

A substantial portion of the Partnership's products and raw materials are commodities whose prices fluctuate as market supply and demand fundamentals change. However, our direct exposure to commodity price risk is limited to approximately 5.0% of our total ethylene production, which is the portion sold to third parties. We believe we have substantially mitigated our indirect exposure to commodity price ~~fluctuations~~fluctuation during the term of the Ethylene Sales Agreement through the minimum commitment and the cost-plus based pricing. Additionally, we may use derivative instruments to reduce price volatility risk on feedstocks and ethylene associated with the production and sales to third parties. ~~Based on our~~We did not have any open derivative ~~positions as of~~position at September 30, 2020, a hypothetical $0.10 increase in the price of a gallon of ethane would have increased our income before taxes by $0.8 million and a hypothetical $0.10 decrease in the price of a pound of ethylene would have increased our income before taxes by $1.8 million.2021.

Interest Rate Risk

We are exposed to interest rate risk with respect to our outstanding debt, all of which is variable rate debt. At September 30, ~~2020,~~2021, we had total variable rate debt of $399.7 million outstanding, all of which was owed to wholly-owned subsidiaries of Westlake, and currently accrues interest at a variable rate of LIBOR plus 200 basis points. 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 variable interest rate of our debt as of September 30, ~~2020~~2021 was ~~2.3%~~2.1%. We will continue to be subject to interest rate risk with respect to our variable rate debt as well as the risk of higher interest cost if and when this debt is refinanced. A hypothetical increase in our average interest rate on variable rate debt by 100 basis points would increase our annual interest expense by approximately $4.0 million based on the September 30, ~~2020~~2021 debt balance.

LIBOR is used as a reference rate for all of our outstanding variable rate debt as of September 30, ~~2020.~~2021. The phase-out of LIBOR is set to ~~be phased out~~commence at the end of 2021 and ~~to be replaced~~conclude by ~~an alternate benchmark rate.~~June 30, 2023. We are currently reviewing how LIBOR phase-out will affect us, but we do not expect the impact ~~of the LIBOR phase out~~ to be material.

Item 4. Controls and Procedures

We carried out an evaluation, under the supervision and with the participation of our management, including our President and Chief Executive Officer and our Executive Vice President and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures pursuant to Rules 13a-15 or 15d-15 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as of the end of the period covered by this report. Based upon that evaluation, our President and Chief Executive Officer and our Executive Vice President and Chief Financial Officer concluded that our disclosure controls and procedures are effective with respect to (i) the accumulation and communication to our management, including our Chief Executive Officer and our Chief Financial Officer, of information required to be disclosed by us in the reports that we submit under the Exchange Act, and (ii) the recording, processing, summarizing and reporting of such information within the time periods specified in the SEC's rules and forms.

There were no changes in our internal control over financial reporting that occurred during the three months ended September 30, ~~2020~~2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

The ~~2019~~2020 Form 10-K, filed on ~~February 28, 2020,~~March 2, 2021, contained a description of various legal proceedings in which we are involved, including environmental proceedings. See below and Note 1312 to the unaudited consolidated financial statements within this Quarterly Report on Form 10-Q for a discussion on legal proceedings, which information is incorporated by reference herein.

Under the Omnibus Agreement, Westlake Chemical Corporation ("Westlake") has agreed to indemnify the Partnership for certain environmental and other liabilities relating to OpCo's processing facilities and related assets.

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Potential Flare Modifications. For several years, the Environmental Protection Agency ("EPA") has been conducting an enforcement initiative against petroleum refineries and petrochemical plants with respect to emissions from flares. On April 21, 2014, Westlake received a Clean Air Act Section 114 Information Request from the EPA, which sought information regarding flares at the Calvert City and Lake Charles facilities. The EPA has informed Westlake that the information provided leads the EPA to believe that some of the flares are out of compliance with applicable standards. The EPA has indicated that it is seeking a consent decree that would obligate Westlake to take corrective actions relating to the alleged noncompliance. The Partnership believes the resolution of these matters may require the payment of a monetary sanction in excess of ~~$100,000.~~$300,000. As discussed above, Westlake is expected to fully indemnify us for such costs.

There are five lawsuits pending in connection with the flash fire at the quench tower during the Petro 2 turnaround described in Note 12 to the consolidated financial statements included in Item 1 of this Form 10-Q.

In addition to the matters described above, the Partnership is also involved in ~~various~~other 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.

Item 1A. Risk Factors

For a discussion of risk factors, please read Item 1A, "Risk Factors" in the ~~2019~~2020 Form 10-K. ~~The information below includes additional risks relating to the COVID-19 pandemic. The risks described below and in other documents that we file~~There have been no material changes from ~~time to time with the Securities and Exchange Commission could materially and adversely affect our business, results of operations, cash flow, liquidity or financial condition.~~those risk factors.

OpCo is subject to the credit risk of Westlake on a substantial majority of its revenues, and Westlake's leverage and creditworthiness could adversely affect our ability to make distributions to our unitholders. The ongoing coronavirus (COVID-19) pandemic could materially adversely affect Westlake's business, financial condition and results of operations.

Our ability to make distributions to unitholders is substantially dependent on Westlake's ability to meet its minimum contractual obligations under the Ethylene Sales Agreement. If Westlake defaults on its obligations, our ability to make distributions to our unitholders could be reduced or eliminated. Westlake has not pledged any assets to us as security for the performance of its obligations.

Westlake has not agreed with us to limit its ability to incur indebtedness, pledge or sell assets or make investments, and we have no control over the amount of indebtedness Westlake incurs, the assets it pledges or sells or the investments it makes.

The ongoing coronavirus (COVID-19) outbreak, which the World Health Organization declared as a pandemic on March 11, 2020, has continued to persist. It has resulted in authorities implementing numerous measures to try to contain the disease, such as travel bans and restrictions, quarantines, shelter-in-place orders and shutdowns, among others. Westlake could experience significant disruptions to its business operations, if the pandemic and its impacts on the global economy continue.

Westlake, which loans us our operators, has 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 governmental and health authorities. However, the quarantine of personnel or the inability to access our or Westlake's facilities could adversely affect our and Westlake's operations. We or Westlake may take further actions as required by government authorities from time to time or that we or Westlake determine are in the best interests of our employees, customers, Westlake's partners and suppliers. There is no certainty that such measures will be sufficient to mitigate the risks posed by the disease, and our ability to perform certain functions could be harmed.

In addition, while the potential impact and duration of the COVID-19 pandemic on the global economy and our business in particular may be difficult to assess or predict, the pandemic has resulted in, and may continue to result in, significant disruption of global financial markets, which may reduce our or Westlake's ability to access capital or our customers' ability to pay us for past or future purchases, which could negatively affect our liquidity. The COVID-19 pandemic could also reduce the demand for our products or Westlake's products.

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Item 6. Exhibits


Exhibit No.						Exhibit


~~Exhibit No.~~						~~Exhibit~~

~~31.1†~~
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†						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†						XBRL Taxonomy Extension Schema Document

101.CAL†						XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF†						XBRL Taxonomy Extension Definition Linkbase Document

101.LAB†						XBRL Taxonomy Extension Label Linkbase Document

101.PRE†						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.

_____________


†	~~Filed herewith.~~


#	† Filed herewith. # Furnished herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

WESTLAKE CHEMICAL PARTNERS LP

Date:

November ~~4, 2020~~3, 2021

By:

/S/ ALBERT CHAO

Albert Chao

President, Chief Executive Officer and Director of

Westlake Chemical Partners GP LLC

(Principal Executive Officer)

Date:

November ~~4, 2020~~3, 2021

By:

/S/ M. STEVEN BENDER

M. Steven Bender

~~Senior~~Executive Vice President, Chief Financial Officer and

Director of Westlake Chemical Partners GP LLC

(Principal Financial Officer)



	Three Months Ended September 30, 2019
	Limited Partners' Common Units			Incentive Distribution Rights		Total
Net income attributable to the Partnership:
Distribution	$	16,348		$	0	$	16,348
Distribution in excess of net income	(1,426		)	0		(1,426		)
Net income	$	14,922		$	0	$	14,922
Weighted average units outstanding:
Basic and diluted	35,188,189					35,188,189
Net income per limited partner unit:
Basic and diluted	$	0.42



	Nine Months Ended September 30, 2019
	Limited Partners' Common Units			Incentive Distribution Rights		Total
Net income attributable to the Partnership:
Distribution	$	48,127		$	0	$	48,127
Distribution in excess of net income	(4,517		)	0		(4,517		)
Net income	$	43,610		$	0	$	43,610
Weighted average units outstanding:
Basic and diluted	34,251,005					34,251,005
Net income per limited partner unit:
Basic and diluted	$	1.27



	September 30, 2020				December 31, 2019
	Carrying Value		Fair Value		Carrying Value		Fair Value
OpCo Revolver	$	22,619	$	22,980	$	22,619	$	23,364
MLP Revolver	377,055		378,797		377,055		379,452