Westlake Chemical Partners LP
For the period ended Jun 30, 2025. Filed Aug 6, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 6, 2025
WLKP$21.19-0.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-02.
0001604665-25-000021
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-06.
0001604665-25-000034
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 110 previous paragraphs and 120 current paragraphs.
91 unchanged; 17 reworded; 11 added; 2 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 5 previous and 5 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (11)
Current report
Neither we nor OpCo has any employees. OpCo and Westlake are parties to the Services and Secondment Agreement, pursuant to which Westlake provides OpCo with various utility services, comprehensive operating services for OpCo's units, services for the maintenance and operation of the common facilities and seconded employees to perform all services required under the agreement. Pursuant to the terms of the Services and Secondment Agreement, OpCo and Westlake have agreed to negotiate in good faith to reach agreement upon terms for the renewal of the agreement prior to the expiration of the initial term in August 2026.
Current report
For thesix months ended June 30, 2025, net income was$128.1 million on net sales of$534.7 million. This represents adecrease in net income of$49.6 million as compared to net income of$177.7 million on net sales of$568.8 million for thesix months ended June 30, 2024. Net income attributable to the Partnership for thesix months ended June 30, 2025 was$19.5 million as compared to$29.3 million for thesix months ended June 30, 2024, adecrease of$9.8 million. Income from operations was $137.8 million for the six months ended June 30, 2025 as compared to $188.7 million for the six months ended June 30, 2024, a decrease of $50.9 million. Net sales for the six months ended June 30, 2025 decreased by $34.1 million as compared to net sales for the six months ended June 30, 2024, mainly due to lower ethylene and co-products sales volumes to Westlake and third parties as a result of lower production volumes attributable to the Petro 1 turnaround, partially offset by higher ethylene sales prices to Westlake and third parties as well as a buyer deficiency fee of $13.6 million recognized during the six months ended June 30, 2025 as a result of a forecasted annual production deficiency due to the Petro 1 turnaround extending into April 2025, which was later than the planned completion in March 2025. Income from operations, net income and net income attributable to the Partnership for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024 were lower primarily due to the lower net sales and higher ethane feedstock and natural gas costs during the six months ended June 30, 2025 as compared to the six months ended June 30, 2024.
Current report
Other Income, net. Other income, net decreased to $0.7 million in the second quarter of 2025 from $1.3 million in the second quarter of 2024, primarily due to a decrease in interest earned on investments with Westlake under the Investment Management Agreement due to a lower average amount of cash invested and lower interest rates in the second quarter of 2025 as compared to the second quarter of 2024.
Current report
Six Months Ended June 30, 2025 Compared with Six Months Ended June 30, 2024
Current report
Net Sales. Net sales decreased by$34.1 million, or 6.0%, to$534.7 million in thesix months ended June 30, 2025 from$568.8 million in thesix months ended June 30, 2024. Thedecrease in net sales in thesix months ended June 30, 2025 was primarily due to lower sales volumes to Westlake and third parties as a result of lower production volumes attributable to the Petro 1 turnaround, partially offset by higher ethylene sales prices to Westlake and the buyer deficiency fee of $13.6 million recognized during the six months ended June 30, 2025 as compared to the six months ended June 30, 2024. The higher average sales prices in the six months ended June 30, 2025 contributed to a 10.0% increase in net sales compared to the six months ended June 30, 2024. The lower sales volumes in the six months ended June 30, 2025 contributed to an 18.4% decrease in net sales as compared to the six months ended June 30, 2024.
Current report
Gross Profit. Gross profit decreased to$151.6 million in thesix months ended June 30, 2025 from$203.4 million in thesix months ended June 30, 2024. Gross profit margin in thesix months ended June 30, 2025 was 28.4%, as compared to 35.8% for thesix months ended June 30, 2024. The decrease in gross profit margin was primarily due to higher ethane feedstock and natural gas costs in the six months ended June 30, 2025 as compared to the six months ended June 30, 2024.
Current report
Selling, General and Administrative Expenses. Selling, general and administrative expenses decreased by$0.9 million, or 6.1%, to$13.8 million in thesix months ended June 30, 2025 as compared to $14.7 million in the six months ended June 30, 2024. The decrease was mainly attributable to lower service costs in the six months ended June 30, 2025 as compared to the six months ended June 30, 2024.
Current report
Interest Expense—Westlake. Interest expense of $11.4 million in the six months ended June 30, 2025 decreased by $1.8 million as compared to interest expense of $13.2 million in the six months ended June 30, 2024. The decrease was primarily attributable to lower interest rates on the outstanding debtin thesix months ended June 30, 2025 as compared to the six months ended June 30, 2024.
Current report
Other Income, net. Other income, net decreased by $0.6 million to $2.0 million in the six months ended June 30, 2025 from $2.6 million in the six months ended June 30, 2024, primarily due to a decrease in interest earned on investments with Westlake under the Investment Management Agreement due to a lower average amount of cash invested and lower interest rates in the six months ended June 30, 2025 as compared to the six months ended June 30, 2024.
Current report
EBITDA. EBITDA decreased by $48.2 million to $199.4 million in the six months ended June 30, 2025 from $247.6 million in the six months ended June 30, 2024. The decrease was primarily due to higher ethane feedstock and natural gas costs and lower sales volumes to Westlake and third parties as a result of lower production volumes attributable to the Petro 1 turnaround in the six months ended June 30, 2025 as compared to the six months ended June 30, 2024, partially offset by higher ethylene sales prices to Westlake and the buyer deficiency fee recognized during the six months ended June 30, 2025.
Current report
•actions taken by Westlake, including the renewal or renegotiation of, or determinations made pursuant to, our contractual arrangements with Westlake;
Removed paragraphs (2)
Previous report
Other Income, net. Other income, net remained consistent at $1.3 million in the first quarter of 2025 as compared to $1.3 million in the first quarter of 2024.
Previous report
•actions taken by Westlake;
Reworded paragraphs (17)
Previous wording
For the quarter ended March 31, 2025, net income was $42.3 million on net sales of $237.6 million. This represents a decrease in net income of $47.3 million as compared to net income of $89.6 million on net sales of $284.7 million for the quarter ended March 31, 2024. Net income attributable to the Partnership for the first quarter of 2025 was $4.9 million as compared to $14.8 million for the first quarter of 2024, a decrease of$9.9 million. Income from operations was $46.6 million for the first quarter of 2025 as compared to $95.1 million for the first quarter of 2024, a decrease of $48.5 million. Net sales for the first quarter of 2025 decreased by$47.1 million as compared to the first quarter of 2024 primarily due to lower ethylene sales volumes to Westlake and lower co-products sales volumes to third parties as a result of lower production volumes during the Petro 1 turnaround, partially offset by higher ethylene sales prices to Westlake and third parties. Income from operations, net income and net income attributable to the Partnership for the first quarter of 2025 as compared to the first quarter of 2024 were lower due to the lower net sales because of the Petro 1 turnaround and higher ethane feedstock and natural gas costs in the first quarter of 2025 compared to the first quarter of 2024.
Current wording
For the quarter ended June 30, 2025, net income was $85.8 million on net sales of $297.1 million. This represents a decrease in net income of $2.2 million as compared to net income of $88.0 million on net sales of $284.2 million for the quarter ended June 30, 2024. Net income attributable to the Partnership for the second quarter of 2025 was $14.6 million as compared to $14.4 million for the second quarter of 2024, an increase of$0.2 million. Income from operations was $91.2 million for the second quarter of 2025 as compared to $93.6 million for the second quarter of 2024, a decrease of $2.4 million. Net sales for the second quarter of 2025 increased by$12.9 million as compared to the second quarter of 2024 primarily due to higher ethylene sales prices to Westlake, partially offset by lower ethylene and co-products sales volumes to Westlake and third parties primarily as a result of lower production volumes attributable to the Petro 1 turnaround, which concluded in April 2025. Net sales for the second quarter of 2025 also included a buyer deficiency fee of $13.6 million recognized as a result of a forecasted annual production deficiency due to the Petro 1 turnaround extending into April 2025, which was later than the planned completion in March 2025. Income from operations and net income for the second quarter of 2025 as compared to the second quarter of 2024 were lower due to higher ethane feedstock and natural gas costs in the second quarter of 2025 compared to the second quarter of 2024. Despite lower net income, net income attributable to the Partnership for the second quarter of 2025 as compared to the second quarter of 2024 increased due to lower interest expense.
Previous wording
First Quarter 2025 Compared with First Quarter 2024
Current wording
Second Quarter 2025 Compared with Second Quarter 2024
Previous wording
Net Sales. Net sales decreased by $47.1 million, or 16.5%, to $237.6 million in the first quarter of 2025 from $284.7 million in the first quarter of 2024. The decrease in net sales in the first quarter of 2025 was primarily due to lower ethylene sales volumes to Westlake and lower co-products sales volumes to third parties as a result of lower production volumes during the Petro 1 turnaround in the first quarter of 2025 compared to the first quarter of 2024, partially offset by higher ethylene sales prices to Westlake and third parties. Higher average sales prices in the first quarter of 2025 contributed to an 11.2% increase in net sales compared to the first quarter of 2024. Lower sales volumes in the first quarter of 2025 contributed to a 27.7% decrease in net sales compared to the first quarter of 2024.
Current wording
Net Sales. Net sales increased by $12.9 million, or 4.5%, to $297.1 million in the second quarter of 2025 from $284.2 million in the second quarter of 2024. The increase in net sales in the second quarter of 2025 was primarily due to higher ethylene sales prices to Westlake and the buyer deficiency fee of $13.6 million recognized during the second quarter of 2025, partially offset by lower sales volumes to Westlake and third parties as a result of lower production volumes attributable to the Petro 1 turnaround. Higher average sales prices in the second quarter of 2025 contributed to a 9.1% increase in net sales compared to the second quarter of 2024. Lower sales volumes in the second quarter of 2025 contributed to a 9.3% decrease in net sales compared to the second quarter of 2024.
Previous wording
Gross Profit. Gross profit decreased to $54.1 million in the first quarter of 2025 from $102.2 million in the first quarter of 2024. Gross profit margin percentage in the first quarter of 2025 was 22.8%, as compared to 35.9% for the first quarter of 2024. The lower gross profit margin was primarily due to higher ethane feedstock and natural gas costs in the first quarter of 2025 compared to the first quarter of 2024.
Current wording
Gross Profit. Gross profit decreased to $97.5 million in the second quarter of 2025 from $101.2 million in the second quarter of 2024. Gross profit margin in the second quarter of 2025 was 32.8%, as compared to 35.6% in the second quarter of 2024. The lower gross profit margin was primarily due to higher ethane feedstock and natural gas costs in the second quarter of 2025 compared to the second quarter of 2024.
Previous wording
Selling, General and Administrative Expenses. Selling, general and administrative expenses increased by $0.4 million, or 5.6%, to $7.5 million in the first quarter of 2025 as compared to $7.1 million in the first quarter of 2024. The increase was mainly attributable to higher service charges from Westlake in the first quarter of 2025 as compared to the first quarter of 2024.
Current wording
Selling, General and Administrative Expenses. Selling, general and administrative expenses decreased by $1.3 million, or 17.1%, to $6.3 million in the second quarter of 2025 as compared to $7.6 million in the second quarter of 2024. The decrease was mainly attributable to lower service costs in the second quarter of 2025 as compared to the second quarter of 2024.
Previous wording
Interest Expense—Westlake. Interest expense of $5.5 million in the first quarter of 2025 decreased from $6.6 million in the first quarter of 2024 mainly due to lower interest rates on the outstanding debt in the first quarter of 2025 as compared to the first quarter of 2024.
Current wording
Interest Expense—Westlake. Interest expense of $5.9 million in the second quarter of 2025 decreased from $6.7 million in the second quarter of 2024 mainly due to lower interest rates on the outstanding debt in the second quarter of 2025 as compared to the second quarter of 2024.
Previous wording
MLP Distributable Cash Flow. MLP distributable cash flow decreased by $12.2 million to $4.7 million in the first quarter of 2025 from $16.9 million in the first quarter of 2024. The decrease in the first quarter of 2025, as compared to the prior-year period, was primarily attributable to decreased earnings at OpCo and higher maintenance capital expenditures due to the Petro 1 turnaround in the first quarter of 2025.
Current wording
MLP Distributable Cash Flow. MLP distributable cash flow decreased by $2.1 million to $15.0 million in the second quarter of 2025 from $17.1 million in the second quarter of 2024. The decrease in the second quarter of 2025, as compared to the prior-year period, was primarily attributable to higher maintenance capital expenditures due to the Petro 1 turnaround.
Previous wording
EBITDA. EBITDA decreased by $49.4 million to $75.0 million in the first quarter of 2025 from $124.4 million in the first quarter of 2024. The decrease was primarily due to lower ethylene sales volumes to Westlake and lower co-products sales volumes to third parties as a result of lower production volumes during the Petro 1 turnaround and higher ethane feedstock and natural gas costs in the first quarter of 2025 compared to the first quarter of 2024, partially offset by higher ethylene sales prices to Westlake and third parties.
Current wording
EBITDA. EBITDA increased by $1.2 million to $124.4 million in the second quarter of 2025 from $123.2 million in the second quarter of 2024. The increase was primarily due to higher ethylene sales prices to Westlake and the buyer deficiency fee recognized in the second quarter of 2025 compared to the second quarter of 2024, partially offset by lower ethylene and co-products sales volumes to Westlake and third parties as a result of lower production volumes attributable to the Petro 1 turnaround and higher ethane feedstock and natural gas costs.
Previous wording
CASH FLOW DISCUSSION FOR THE THREE MONTHS ENDED MARCH 31, 2025 AND 2024
Current wording
CASH FLOW DISCUSSION FOR THE SIX MONTHS ENDED JUNE 30, 2025 AND 2024
Previous wording
Operating activities provided cash of $45.8 million in the first three months of 2025 compared to cash provided by operating activities of $104.6 million in the first three months of 2024. The $58.8 million decrease in cash flows from operating activities was mainly due to cash used in connection with the Petro 1 turnaround and lower income from operations in the first three months of 2025 compared to the first three months of 2024, partially offset by an increase in cash provided by working capital. Changes in components of working capital, which we define for the purposes of this cash flow discussion as accounts receivable, net—Westlake, accounts receivable, net—third parties, inventories, prepaid expenses and other current assets less accounts payable—Westlake, accounts payable—third parties and accrued and other liabilities, provided cash of $81.7 million in the first three months of 2025 as compared to $9.7 million of cash used in the first three months of 2024, resulting in an overall favorable change of $91.4 million. The favorable change in working capital was mainly attributable to favorable changes in accounts payable—third parties and accrued and other liabilities due to the impact of the Petro 1 turnaround activities and the timing of payments in the first three months of 2025.
Current wording
Operating activities provided cash of $54.9 million in the first six months of 2025 compared to cash provided by operating activities of $226.5 million in the first six months of 2024. The $171.6 million decrease in cash flows from operating activities was mainly due to cash used in connection with the Petro 1 turnaround and lower income from operations in the first six months of 2025 as compared to the first six months of 2024 as well as a decrease in cash provided by working capital. Changes in components of working capital, which we define for the purposes of this cash flow discussion as accounts receivable, net—Westlake, accounts receivable, net—third parties, inventories, prepaid expenses and other current assets less accounts payable—Westlake, accounts payable—third parties and accrued and other liabilities, used cash of $10.6 million in the first six months of 2025 as compared to $0.3 million of cash provided in the first six months of 2024, resulting in an overall unfavorable change of $10.9 million. The unfavorable change in working capital was mainly attributable to an unfavorable change in net accounts receivable—Westlake due to the buyer deficiency recognized in the first six months of 2025 and lower receivables with Westlake outstanding as of the fourth quarter of 2024 due to sales of excess quantities of ethylene at a lower sales price. This unfavorable change was partially offset by favorable changes in accounts payable—third parties and accrued and other liabilities due to the impact of the Petro 1 turnaround activities and the timing of payments in the first six months of 2025.
Previous wording
Net cash provided by investing activities in the first three months of 2025 was $14.0 million as compared to net cash used for investing activities of $9.8 million in the first three months of 2024, resulting in an overall favorable change of $23.8 million in investing cash flows. During the first three months of 2025, there were maturities of investments with Westlake of $30.0 million under the Investment Management Agreement, whereas during the first three months of 2024, there were no investing activities under the Investment Management Agreement. Capital expenditures increased to $16.0 million in the first three months of 2025 as compared to $9.8 million in the first three months of 2024 due to the Petro 1 turnaround. Capital expenditures in the first three months of 2025 and 2024 were primarily related to projects to increase production capacity or reduce costs, maintenance costs and safety and environmental projects at our facilities.
Current wording
Net cash provided by investing activities in the first six months of 2025 was $49.7 million as compared to net cash used for investing activities of $20.0 million in the first six months of 2024, resulting in an overall favorable change of $69.7 million in investing cash flows. During the first six months of 2025, there were maturities of investments with Westlake of $90.0 million under the Investment Management Agreement, whereas during the first six months of 2024, there were no investing activities under the Investment Management Agreement. Capital expenditures increased to $40.3 million in the first six months of 2025 as compared to $20.0 million in the first six months of 2024 due to the Petro 1 turnaround. Capital expenditures in the first six months of 2025 and 2024 were primarily related to projects to increase production capacity or reduce costs, maintenance costs and safety and environmental projects at our facilities.
Previous wording
Net cash used for financing activities in the first three months of 2025 was $68.5 million as compared to net cash used for financing activities of $97.7 million in the first three months of 2024. The cash outflows in the first three months of 2025 were related to distributions of $51.9 million to the noncontrolling interest retained in OpCo by Westlake and of $16.6 million to unitholders by the Partnership. The cash outflows in the first three months of 2024 were related to distributions of $81.0 million to the noncontrolling interest retained in OpCo by Westlake and of $16.6 million to unitholders by the Partnership.
Current wording
Net cash used for financing activities in the first six months of 2025 was $126.3 million as compared to net cash used for financing activities of $199.1 million in the first six months of 2024. The cash outflows in the first six months of 2025 were related to distributions of $93.0 million to the noncontrolling interest retained in OpCo by Westlake and of $33.2 million to unitholders by the Partnership. The cash outflows in the first six months of 2024 were related to distributions of $165.9 million to the noncontrolling interest retained in OpCo by Westlake and of $33.2 million to unitholders by the Partnership.
Previous wording
Westlake has historically funded expansion capital expenditures related to Lake Charles Olefins and Calvert City Olefins. No such funding was required by OpCo during the three months ended March 31, 2025 and 2024. Total capital expenditures for the three months ended March 31, 2025 and 2024 were $16.0 million and $9.8 million, respectively. We expect that Westlake will loan additional cash to OpCo to fund its expansion capital expenditures in the future, but Westlake is under no obligation to do so.
Current wording
Westlake has historically funded expansion capital expenditures related to Lake Charles Olefins and Calvert City Olefins. No such funding was required by OpCo during the six months ended June 30, 2025 and 2024. Total capital expenditures for the six months ended June 30, 2025 and 2024 were $40.3 million and $20.0 million, respectively. We expect that Westlake will loan additional cash to OpCo to fund its expansion capital expenditures in the future, but Westlake is under no obligation to do so.
Previous wording
As of March 31, 2025, our cash and cash equivalents totaled $49.6 million. In addition, we have cash invested under the Investment Management Agreement (as described below) and a revolving credit facility with Westlake available to supplement cash if needed, as described under "Indebtedness" below.
Current wording
As of June 30, 2025, our cash and cash equivalents totaled $36.6 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.
Previous wording
In August 2017, the Partnership, OpCo and Westlake executed the Investment Management Agreement that authorizes Westlake to invest the Partnership's and OpCo's excess cash with Westlake for durations 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 $104.5 million of cash invested under the Investment Management Agreement at March 31, 2025.
Current wording
In August 2017, the Partnership, OpCo and Westlake executed the Investment Management Agreement that authorizes Westlake to invest the Partnership's and OpCo's excess cash with Westlake for durations 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 $43.9 million of cash invested under the Investment Management Agreement at June 30, 2025.
Previous wording
•turnaround activities and the variability of OpCo's cash flow;
Current wording
•turnaround activities (such as the Petro 1 turnaround) and the variability of OpCo's cash flow;
Previous wording
•operating interruptions (including leaks, explosions, fires, weather-related incidents, mechanical failure, unscheduled downtime, labor difficulties, transportation interruptions, spills and releases and other environmental risks);
Current wording
•operating interruptions (including leaks, explosions, fires, weather-related incidents, mechanical failure, unscheduled downtime, delays in turnaround activities, labor difficulties, transportation interruptions, spills and releases and other environmental risks);
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
MLP Distributable Cash Flow. MLP distributable cash flow decreased by $14.3 million to $19.7 million in the six months ended June 30, 2025 from $34.0 million in the six months ended June 30, 2024. The decrease in the six months ended June 30, 2025, as compared to the prior-year period, was primarily attributable to decreased earnings at OpCo and higher maintenance capital expenditures due to the Petro 1 turnaround.