Financial Performance - Net income attributable to Westlake Chemical Partners in Q3 2025 was $14.7 million, or $0.42 per limited partner unit, down from $18.1 million in Q3 2024[2] - Cash flows from operating activities in Q3 2025 were $105.2 million, a decrease of $20.9 million compared to $126.1 million in Q3 2024[2] - MLP distributable cash flow for Q3 2025 was $14.9 million, down $3.0 million from $17.9 million in Q3 2024[2] - Gross profit for Q3 2025 was $99.4 million, down from $116.9 million in Q3 2024, a decrease of 15.0%[14] - EBITDA for Q3 2025 was $126.1 million, compared to $139.1 million in Q3 2024, reflecting a decrease of 9.4%[14] - Net income for the nine months ended September 30, 2025, was $214,318, a decrease of 24% compared to $281,772 for the same period in 2024[18] - Net cash provided by operating activities for the nine months ended September 30, 2025, was $160,090, down 54% from $352,532 in 2024[18] - EBITDA for the nine months ended September 30, 2025, was $325,487, a decrease of 16% compared to $386,756 for the same period in 2024[22] - MLP distributable cash flow for the nine months ended September 30, 2025, was $34,607, a decrease of 33% from $51,906 in 2024[19] Sales and Revenue - Total net sales for Q3 2025 were $308.9 million, compared to $277.0 million in Q3 2024, representing an increase of 11.5%[14] Cash Flow and Distributions - The declared quarterly distribution for Q3 2025 was $0.4714 per common unit, marking the 45th consecutive quarterly distribution[4] - The trailing twelve-month coverage ratio for MLP distributable cash flow was 0.75x for Q3 2025, down from 0.79x at the end of Q2 2025[4] - Cash and cash equivalents at the end of the period were $37,936, a decrease of 37% from $60,208 at the end of the same period in 2024[18] - Net cash used for financing activities for the nine months ended September 30, 2025, was $230,482, a decrease of 23% compared to $300,446 in 2024[18] Investments and Expenditures - Additions to property, plant, and equipment for the nine months ended September 30, 2025, were $69,988, an increase of 97% compared to $35,497 in 2024[18] - Maintenance capital expenditures for the nine months ended September 30, 2025, were $65,233, an increase of 88% compared to $34,808 in 2024[19] Assets and Liabilities - Total assets as of September 30, 2025, were $1.27 billion, slightly down from $1.29 billion at the end of 2024[16] - Distributions to noncontrolling interest retained in OpCo by Westlake for the nine months ended September 30, 2025, were $180,645, a decrease of 28% from $250,622 in 2024[18] - Maturities of investments with Westlake under the Investment Management Agreement for the nine months ended September 30, 2025, were $120,000, with no comparable figure in 2024[18] Agreements and Contracts - The Ethylene Sales Agreement with Westlake was renewed through 2027, ensuring stable cash flows for 95% of OpCo's production[4]

Core Points - Westlake Chemical Partners GP LLC has declared a distribution of $0.4714 per unit for its partnership, marking the 45th quarterly distribution since its IPO [1] - The distribution is scheduled to be payable on November 26, 2025, to unit holders of record on November 10, 2025 [1] - This announcement serves as a qualified notice under Treasury Regulations [1]

[PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section provides the unaudited consolidated financial statements for Westlake Chemical Partners LP, detailing financial position, operational results, and cash flows for the period ended June 30, 2025 [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements, including balance sheets, statements of operations, and cash flows, for the period ended June 30, 2025 [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) Consolidated Balance Sheet Highlights (Unaudited) | Account | June 30, 2025 ($ thousands) | December 31, 2024 ($ thousands) | | :--- | :--- | :--- | | **Total current assets** | 156,524 | 240,926 | | **Total assets** | **1,307,187** | **1,287,956** | | **Total current liabilities** | 72,906 | 55,372 | | **Long-term debt payable to Westlake** | 399,674 | 399,674 | | **Total liabilities** | 476,022 | 458,642 | | **Total equity** | 831,165 | 829,314 | [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) Consolidated Statements of Operations Highlights (Unaudited) | Metric | Three Months Ended June 30, 2025 ($ thousands) | Three Months Ended June 30, 2024 ($ thousands) | Six Months Ended June 30, 2025 ($ thousands) | Six Months Ended June 30, 2024 ($ thousands) | | :--- | :--- | :--- | :--- | :--- | | **Total net sales** | 297,119 | 284,168 | 534,748 | 568,841 | | **Gross profit** | 97,532 | 101,232 | 151,613 | 203,412 | | **Income from operations** | 91,232 | 93,627 | 137,839 | 188,730 | | **Net income** | 85,795 | 88,026 | 128,104 | 177,672 | | **Net income attributable to Westlake Chemical Partners LP** | 14,558 | 14,427 | 19,506 | 29,260 | | **Net income per limited partner unit (basic and diluted)** | $0.41 | $0.41 | $0.55 | $0.83 | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Consolidated Statements of Cash Flows Highlights (Unaudited) | Cash Flow Activity | Six Months Ended June 30, 2025 ($ thousands) | Six Months Ended June 30, 2024 ($ thousands) | | :--- | :--- | :--- | | **Net cash provided by operating activities** | 54,852 | 226,461 | | **Net cash provided by (used for) investing activities** | 49,664 | (19,951) | | **Net cash used for financing activities** | (126,253) | (199,130) | | **Net increase (decrease) in cash and cash equivalents** | (21,737) | 7,380 | | **Cash and cash equivalents at end of period** | 36,579 | 65,999 | [Notes to Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) - The Partnership was formed to operate ethylene production facilities, holding a **22.8% limited partner interest** in Westlake Chemical OpCo LP ("OpCo") and consolidating OpCo's financial results as the primary beneficiary, with Westlake Corporation owning the remaining **77.2% interest**[23](index=23&type=chunk)[24](index=24&type=chunk)[27](index=27&type=chunk) - A quarterly cash distribution of **$0.4714 per common unit** for Q2 2025 was declared on July 30, 2025, payable on August 27, 2025[39](index=39&type=chunk) - The Partnership has significant related-party transactions with Westlake, its major customer, with sales to Westlake accounting for approximately **86.0% of the Partnership's net sales** for the six months ended June 30, 2025[50](index=50&type=chunk)[70](index=70&type=chunk) - As of June 30, 2025, the Partnership had **$399.7 million in long-term debt** payable to Westlake, comprising borrowings under the OpCo Revolver and the MLP Revolver[71](index=71&type=chunk) - The Partnership operates as a **single reportable segment, OpCo**, encompassing its ethylene production operations[85](index=85&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the financial performance and condition of the Partnership, highlighting decreased net income and operating cash flow due to a planned maintenance turnaround [Partnership Overview and Revenue Generation](index=20&type=section&id=Partnership%20Overview%20and%20Revenue%20Generation) - The Partnership's primary asset is its **22.8% limited partner interest in OpCo**, which owns and operates three ethylene production facilities and a pipeline[90](index=90&type=chunk)[91](index=91&type=chunk) - Revenue is primarily generated through a long-term, fee-based Ethylene Sales Agreement with Westlake, including a minimum purchase commitment of **95% of budgeted production** and a fixed margin of **$0.10 per pound**, ensuring stable cash flows[93](index=93&type=chunk) [Results of Operations](index=23&type=section&id=Results%20of%20Operations) - **Q2 2025 vs Q2 2024:** Net income decreased by **$2.2 million to $85.8 million**, driven by higher feedstock and natural gas costs, partially offset by higher ethylene sales prices and a **$13.6 million buyer deficiency fee** from the Petro 1 turnaround[109](index=109&type=chunk)[111](index=111&type=chunk)[112](index=112&type=chunk) - **H1 2025 vs H1 2024:** Net income decreased by **$49.6 million to $128.1 million**, primarily due to lower sales volumes from the Petro 1 turnaround and higher feedstock and natural gas costs[110](index=110&type=chunk)[118](index=118&type=chunk)[119](index=119&type=chunk) Non-GAAP Financial Measures Reconciliation | Metric ($ thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | **Net Income** | 85,795 | 88,026 | 128,104 | 177,672 | | **MLP distributable cash flow** | 15,007 | 17,135 | 19,721 | 34,027 | | **EBITDA** | 124,391 | 123,199 | 199,412 | 247,630 | [Cash Flow and Liquidity](index=27&type=section&id=Cash%20Flow%20and%20Liquidity) - Cash from operating activities decreased by **$171.6 million in H1 2025** compared to H1 2024, falling to **$54.9 million**, mainly due to Petro 1 turnaround costs and lower income from operations[125](index=125&type=chunk) - Sources of liquidity include cash from operations, a **$600 million OpCo Revolver**, a **$600 million MLP Revolver**, and an Investment Management Agreement with Westlake; cash and cash equivalents were **$36.6 million**, with an additional **$43.9 million invested with Westlake** as of June 30, 2025[130](index=130&type=chunk)[136](index=136&type=chunk)[137](index=137&type=chunk) - Total debt outstanding as of June 30, 2025, was **$399.7 million**, entirely owed to Westlake through the OpCo and MLP revolvers[138](index=138&type=chunk)[139](index=139&type=chunk)[148](index=148&type=chunk) - Capital expenditures for H1 2025 were **$40.3 million**, an increase from **$20.0 million in H1 2024**, primarily due to the Petro 1 turnaround[126](index=126&type=chunk)[135](index=135&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=29&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The Partnership's primary market risk is interest rate exposure on variable-rate debt, while commodity price risk is mitigated by a fee-based sales agreement - Direct exposure to commodity price risk is limited as the Ethylene Sales Agreement with Westlake provides for cost-plus based pricing and a minimum purchase commitment[147](index=147&type=chunk) - The main market risk is interest rate risk on **$399.7 million of variable-rate debt**, where a **1% (100 basis points) increase** in the average interest rate would increase annual interest expense by approximately **$4.0 million**[148](index=148&type=chunk) [Item 4. Controls and Procedures](index=29&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting - Management concluded that the company's disclosure controls and procedures are effective as of the end of the period covered by the report[149](index=149&type=chunk) - There were no changes in internal control over financial reporting during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[150](index=150&type=chunk) [PART II. OTHER INFORMATION](index=30&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, other information, and a list of exhibits filed with the report [Item 1. Legal Proceedings](index=30&type=section&id=Item%201.%20Legal%20Proceedings) The Partnership is involved in various legal proceedings but does not anticipate any material adverse effects, with Westlake Corporation providing indemnification for certain liabilities - The Partnership does not believe that any ongoing legal proceedings will have a material adverse effect on its financial condition, results of operations, or cash flows[154](index=154&type=chunk) - Westlake has agreed to indemnify the Partnership for certain environmental liabilities existing before August 4, 2014, and for liabilities related to services performed under the Services and Secondment Agreement[153](index=153&type=chunk) [Item 1A. Risk Factors](index=30&type=section&id=Item%201A.%20Risk%20Factors) No material changes have occurred from the risk factors previously disclosed in the Partnership's Annual Report on Form 10-K for the fiscal year ended December 31, 2024 - There have been no material changes from the risk factors disclosed in the 2024 Form 10-K[155](index=155&type=chunk) [Item 5. Other Information](index=30&type=section&id=Item%205.%20Other%20Information) No director or officer of the Partnership's general partner adopted or terminated a Rule 10b5-1 trading arrangement during the second quarter of 2025 - No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during the second quarter of 2025[156](index=156&type=chunk) [Item 6. Exhibits](index=31&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including corporate governance documents and officer certifications - The report lists various exhibits filed, including the CEO and CFO certifications under Rule 13a-14(a) and Section 1350[158](index=158&type=chunk)

Core Insights - Westlake Chemical Partners reported a strong sequential rebound in key operating and cash metrics for Q2 2025, following a challenging prior quarter due to the Petro 1 turnaround [1][5] - Despite the recovery, the company fell short of market expectations for earnings per limited partner unit and revenue [1][6] - The partnership's reliance on a fixed-margin, take-or-pay contract with Westlake Corporation provides stability but also exposes it to volume risks [4][9] Financial Performance - Q2 2025 earnings per limited partner unit (GAAP) were $0.41, below the $0.47 analyst estimate, while revenue (GAAP) was $297.1 million, missing the $301.0 million consensus [1][2] - MLP distributable cash flow was $15.0 million, down 12.3% year-over-year from $17.1 million in Q2 2024, attributed to higher maintenance capital expenses [2][5] - Cash flows from operating activities plummeted 92.5% year-over-year, from $121.9 million in Q2 2024 to $9.1 million in Q2 2025, primarily due to the Petro 1 turnaround [2][7] Operational Context - The partnership's ethylene production facilities have a nameplate capacity of approximately 3.7 billion pounds per year, with 95% of output sold to Westlake under a long-term agreement [3][9] - The second quarter saw a recovery in net income attributable to the partnership, increasing from $4.9 million in Q1 2025 to $14.6 million in Q2 2025 [5] - Third-party ethylene sales decreased significantly to $28.0 million from $44.6 million in the prior-year period, reflecting the partnership's dependence on Westlake [6][10] Future Outlook - Management anticipates a solid improvement in distributable cash flow and distribution coverage ratio in the second half of 2025 as operations normalize [11] - No further maintenance shutdowns are scheduled for the next eighteen months, with no additional planned turnarounds in 2025 or 2026 [11][12] - The quarterly distribution remains unchanged at $0.4714 per unit, marking the forty-fourth consecutive quarter since the 2014 IPO [8][12]

Financial Data and Key Metrics Changes - Westlake Partners reported a net income of $15 million or $0.41 per unit for Q2 2025, which is consistent with Q2 2024 net income [6][8] - Consolidated net income, including OpCo's earnings, was $86 million, benefiting from a $14 million protection from the ethylene sales agreement [7][8] - Distributable cash flow decreased to $15 million or $0.43 per unit, down by $2 million compared to 2024 due to higher maintenance capital expenditures [8][9] - The partnership maintained a strong cash balance of $81 million and a long-term debt of $400 million, with a consolidated leverage ratio of approximately one time [9][10] Business Line Data and Key Metrics Changes - The stability of cash flow is attributed to the fixed margin ethylene sales agreement, which minimizes market volatility and production risks [6][12] - The successful completion of the PetroR1 turnaround positions the partnership for solid earnings and cash flows in the future [11][12] Market Data and Key Metrics Changes - Global industrial and manufacturing activity has been soft in 2025, impacting the global chemical industry [11] - The ethylene sales agreement provides a predictable fee-based cash flow structure, insulating the partnership from market fluctuations [12] Company Strategy and Development Direction - The company plans to evaluate growth opportunities through four levers: increasing ownership interest in OpCo, acquiring other qualified income streams, organic growth through facility expansions, and negotiating higher fixed margins in the ethylene sales agreement [12] - The focus remains on providing long-term value and distributions to unitholders while maintaining safe operations and environmental stewardship [12] Management's Comments on Operating Environment and Future Outlook - Management noted that despite the challenging macroeconomic backdrop, financial performance and distributions will continue to be supported by the ethylene sales agreement [11][12] - There is no immediate need for Westlake Corporation to raise equity capital, indicating a stable financial position [18] Other Important Information - The partnership has made 44 consecutive quarterly distributions since its IPO in July 2014, with a 71% increase in distributions since the original minimum quarterly distribution [9][10] Q&A Session Summary Question: Will the outage impact from Q2 affect OpCo assets in Q3? - Management confirmed that the ethylene unit was not affected by the outage and is running reliably post-turnaround [17] Question: Are certain growth opportunities more appealing in the current environment? - Management indicated that there is no immediate need for capital, and the markets have contracted, making it unlikely to raise equity capital in the current year [18]

Westlake Chemical Partners LP Second Quarter 2025 Earnings Release [Financial and Operational Highlights](index=1&type=section&id=Financial%20and%20Operational%20Highlights) The Partnership reported stable net income but lower cash flow in Q2 2025 due to a major facility turnaround, with results improving sequentially [Second Quarter 2025 Performance vs. Prior Periods](index=1&type=section&id=Second%20Quarter%202025%20Performance%20vs.%20Prior%20Periods) Q2 2025 net income was flat year-over-year, but cash flow declined significantly due to higher maintenance capital expenditures Q2 2025 vs. Q2 2024 Performance | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Net Income Attributable to Partnership | $14.6 million | $14.4 million | +$0.2 million | | Cash Flows from Operating Activities | $9.1 million | $121.9 million | -$112.8 million | | MLP Distributable Cash Flow | $15.0 million | $17.1 million | -$2.1 million | Q2 2025 vs. Q1 2025 Performance | Metric | Q2 2025 | Q1 2025 | Change | | :--- | :--- | :--- | :--- | | Net Income Attributable to Partnership | $14.6 million | $4.9 million* | +$9.7 million | | Cash Flows from Operating Activities | $9.1 million | $45.8 million | -$36.7 million | | MLP Distributable Cash Flow | $15.0 million | $4.7 million | +$10.3 million | *Note: Q1 2025 Net Income calculated from Q2 increase ($14.6M - $9.7M)* - The year-over-year decrease in MLP distributable cash flow was primarily due to **higher maintenance capital expenditures** resulting from the Petro 1 turnaround[2](index=2&type=chunk) - The sequential increase in net income and MLP distributable cash flow from Q1 2025 was driven by **higher production and sales volume** as the Petro 1 turnaround had fewer impactful days in Q2[3](index=3&type=chunk) [Management Commentary and Outlook](index=1&type=section&id=Management%20Commentary%20and%20Outlook) Management noted significant sequential improvement post-turnaround and expects a strong recovery in cash flow for the second half of 2025 - Financial results improved significantly from Q1 2025 due to **higher production and sales volume** at the Petro 1 facility after its turnaround[5](index=5&type=chunk) - Management expects distributable cash flow and the associated coverage ratio to **"solidly improve in the second half of 2025 back towards our strong historical levels"**[5](index=5&type=chunk) [Distributions and Coverage Ratio](index=1&type=section&id=Distributions%20and%20Coverage%20Ratio) The Partnership declared its 44th consecutive quarterly distribution, though the trailing twelve-month coverage ratio declined to 0.79x Key Distribution Metrics | Metric | Value | | :--- | :--- | | Quarterly Distribution per Unit | $0.4714 | | Consecutive Quarterly Distributions | 44 | | Trailing 12-Month Coverage Ratio | 0.79x | | Cumulative IPO Coverage Ratio | ~1.05x | - The decline in the trailing twelve-month coverage ratio to **0.79x** from 0.82x in Q1 2025 was attributed to the planned Petro 1 turnaround[5](index=5&type=chunk) [Financial Statements](index=4&type=section&id=Financial%20Statements) Unaudited consolidated statements show stable Q2 net income year-over-year, but a significant decrease in cash from operations [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) Q2 2025 net sales increased, but higher cost of sales resulted in stable net income attributable to the Partnership Statement of Operations Summary | (In thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Total net sales | $297,119 | $284,168 | | Gross profit | $97,532 | $101,232 | | Income from operations | $91,232 | $93,627 | | Net income attributable to Westlake Partners | $14,558 | $14,427 | | Net income per limited partner unit | $0.41 | $0.41 | [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets and equity remained stable as of June 30, 2025, while cash and cash equivalents decreased since year-end 2024 Balance Sheet Summary | (In thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $36,579 | $58,316 | | Total current assets | $156,524 | $240,926 | | Total assets | $1,307,187 | $1,287,956 | | **Liabilities and Equity** | | | | Total liabilities | $476,022 | $458,642 | | Total equity | $831,165 | $829,314 | | Total liabilities and equity | $1,307,187 | $1,287,956 | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities for the first half of 2025 was significantly lower than the prior-year period Cash Flow Summary | (In thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $54,852 | $226,461 | | Net cash provided by (used for) investing activities | $49,664 | $(19,951) | | Net cash used for financing activities | $(126,253) | $(199,130) | | Net (decrease) increase in cash | $(21,737) | $7,380 | | Cash and cash equivalents at end of period | $36,579 | $65,999 | [Reconciliation of Non-GAAP Financial Measures](index=7&type=section&id=Reconciliation%20of%20Non-GAAP%20Financial%20Measures) This section provides reconciliations from GAAP figures to the Partnership's key non-GAAP performance metrics, MLP Distributable Cash Flow and EBITDA [Reconciliation of MLP Distributable Cash Flow](index=7&type=section&id=Reconciliation%20of%20MLP%20Distributable%20Cash%20Flow) Q2 2025 MLP distributable cash flow of $15.0 million is reconciled from net income by adjusting for non-cash items and other factors MLP Distributable Cash Flow Reconciliation | (In thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net income | $85,795 | $88,026 | | Add: Depreciation, etc. | $32,872 | $29,869 | | Less: Maintenance capital expenditures | $(20,506) | $(9,306) | | Less: Distributable cash flow attributable to noncontrolling interest | $(72,758) | $(82,782) | | **MLP distributable cash flow** | **$15,007** | **$17,135** | [Reconciliation of EBITDA](index=8&type=section&id=Reconciliation%20of%20EBITDA) EBITDA for Q2 2025 was $124.4 million, showing a slight year-over-year increase and a substantial sequential improvement EBITDA Reconciliation | (In thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net income | $85,795 | $88,026 | | Interest expense—Westlake | $5,907 | $6,651 | | Provision for income taxes | $205 | $207 | | Depreciation and amortization | $32,484 | $28,315 | | **EBITDA** | **$124,391** | **$123,199** | [Disclosures and Other Information](index=2&type=section&id=Disclosures%20and%20Other%20Information) This section contains standard corporate disclosures, including forward-looking statements, non-GAAP measure definitions, and company information [Forward-Looking Statements](index=2&type=section&id=Forward-Looking%20Statements) The company cautions that forward-looking remarks regarding future performance are subject to significant risks and uncertainties - Statements regarding future expectations, such as **improved distributable cash flow and coverage ratios**, are considered forward-looking and are not guarantees of future performance[7](index=7&type=chunk) [Use of Non-GAAP Financial Measures](index=2&type=section&id=Use%20of%20Non-GAAP%20Financial%20Measures) The release defines and justifies the use of non-GAAP measures to provide supplemental information for assessing operating performance - The company uses non-GAAP measures like **MLP distributable cash flow, coverage ratio, and EBITDA** to provide supplemental information on business trends and performance[9](index=9&type=chunk) - These measures are used by management and external parties to assess **operating performance, ability to service debt, and fund capital expenditures**[9](index=9&type=chunk) [Company Overview](index=2&type=section&id=Company%20Overview) Westlake Chemical Partners LP is a limited partnership focused on operating and developing ethylene production facilities - The Partnership was formed by Westlake Corporation to **operate, acquire, and develop ethylene production facilities**[10](index=10&type=chunk) - It owns a **22.8% interest in Westlake Chemical OpCo LP**, whose assets include three ethylene production facilities and a pipeline[10](index=10&type=chunk) [Conference Call Information](index=3&type=section&id=Conference%20Call%20Information) A conference call to discuss Q2 2025 financial results is scheduled for Tuesday, August 5, 2025, at 1:00 PM Eastern Time - A conference call to discuss Q2 2025 results is scheduled for **August 5, 2025, at 1:00 PM Eastern Time**[11](index=11&type=chunk)

Core Viewpoint - Westlake Chemical Partners LP (NYSE: WLKP) is currently trading at $22.05 per share, with the market exhibiting a pessimistic outlook due to a temporary operational downturn, which may have led to an undervaluation of the company [1]. Group 1 - The market's focus on the temporary operational downturn has overshadowed the company's long-term potential and fundamentals [1]. - The current share price reflects an overly negative sentiment that may not align with the company's intrinsic value [1].

Financial Performance - Total net sales for the three months ended March 31, 2025, were $237.629 million, a decrease of 16.5% compared to $284.673 million for the same period in 2024[10] - Gross profit for the first quarter of 2025 was $54.081 million, down 47% from $102.180 million in the first quarter of 2024[10] - Net income attributable to Westlake Chemical Partners LP for Q1 2025 was $4.948 million, a decline of 66.7% from $14.833 million in Q1 2024[10] - The Partnership's net income attributable for the three months ended March 31, 2025, was $4,948,000, a decrease of 66.7% compared to $14,833,000 for the same period in 2024[40] - For the three months ended March 31, 2025, net income was $42,309, a decrease of 52.8% compared to $89,646 for the same period in 2024[83] Cash and Liquidity - Cash and cash equivalents decreased to $49.624 million as of March 31, 2025, from $58.316 million at the end of 2024, representing a decline of 14.5%[18] - The company reported a net cash provided by operating activities of $45.781 million for Q1 2025, down from $104.565 million in Q1 2024, a decrease of 56.3%[18] - Distributions to unitholders for the first quarter of 2025 totaled $16.611 million, compared to $16.607 million in the same period of 2024, showing a marginal increase[18] - The Partnership's distribution in excess of net income for the three months ended March 31, 2025, was $11,663,000, compared to $1,774,000 for the same period in 2024, indicating a significant increase in distribution pressure[40] Assets and Liabilities - Total assets increased to $1.371 billion as of March 31, 2025, compared to $1.288 billion at the end of 2024, reflecting a growth of 6.4%[8] - Total liabilities rose to $568.246 million as of March 31, 2025, up from $458.642 million at the end of 2024, indicating a 24% increase[8] - The Partnership's total equity decreased to $803.1 million as of March 31, 2025, from $829.3 million at the end of 2024, a decline of 3.2%[8] - Accrued and other liabilities increased significantly to $63,336 as of March 31, 2025, from $16,920 as of December 31, 2024[75] Accounts Receivable and Inventory - Accounts receivable from trade customers increased to $13,310,000 as of March 31, 2025, from $11,757,000 as of December 31, 2024, representing a growth of 13.2%[33] - Total inventories decreased to $2,733,000 as of March 31, 2025, down from $4,058,000 as of December 31, 2024, indicating a decline of 32.7%[34] - Accounts receivable from Westlake rose to $55,051 as of March 31, 2025, compared to $31,975 as of December 31, 2024, indicating a significant increase of 72.5%[59] Related Party Transactions - Sales to related parties (Westlake) for the three months ended March 31, 2025, were $190,781,000, down 19.0% from $235,209,000 in 2024[49] - Charges for feedstock purchased from Westlake included in cost of sales were $85,499,000 for the three months ended March 31, 2025, compared to $78,537,000 in 2024, reflecting an increase of 8.3%[50] - Interest expense related to debt payable to Westlake decreased to $5,537 for the three months ended March 31, 2025, from $6,581 in 2024, a reduction of 15.9%[65] - Operating lease rentals paid to Westlake were $338 for the three months ended March 31, 2025, down from $425 in 2024, a decrease of 20.5%[62] Operational Focus - The company plans to continue focusing on the development of ethylene production facilities and related assets to enhance operational efficiency and market presence[22]

Financial Data and Key Metrics Changes - Westlake Partners reported a net income of $5 million or $0.14 per unit for Q1 2025, which is $10 million lower than Q1 2024 due to lower production and sales volume from the planned turnaround at Petro one [6][7] - Consolidated net income, including OpCo's earnings, was $42 million on consolidated net sales of $238 million [7] - Distributable cash flow for the quarter was $5 million or $0.13 per unit, a decrease of $12 million compared to Q1 2024 [7][8] Business Line Data and Key Metrics Changes - The planned turnaround at the Petro one ethylene unit in Lake Charles, Louisiana, resulted in lower production and sales volume, impacting overall earnings [6][7] - The partnership maintained a strong leverage ratio of approximately one times, with long-term debt at $400 million [8] Market Data and Key Metrics Changes - The company noted that global trade tensions have intensified, creating uncertainty for businesses and investors, which may lead to market volatility [10][11] Company Strategy and Development Direction - The company plans to evaluate growth opportunities through increasing ownership interest in OpCo, acquiring other qualified income streams, and organic growth opportunities such as facility expansions [11] - The ethylene sales agreement provides a predictable fee-based cash flow structure, supporting financial performance and distributions [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the stability of cash flows due to the fixed margin ethylene sales agreement, which mitigates market volatility [6][10] - The company anticipates solid production levels following the successful completion of the Petro one turnaround [10] Other Important Information - The partnership has maintained a cumulative distribution coverage ratio of approximately 1.1 times since its IPO in 2014, with 43 consecutive quarterly distributions [8][9] - The first quarter distribution of $0.04 per unit will be paid on May 29, 2025 [9] Q&A Session Summary Question: The financial impact of the Q1 turnaround at TETRA one seems significant. Can you explain? - Management indicated that the impact was as planned, with the unit down for February and March, and elevated interest rates may also be a factor affecting financial performance [15][16] Question: Is there still enough valuation difference to justify keeping Westlake healthy around? - Management noted that while the parent company has seen some valuation compression, the value proposition remains strong over the business cycle [17][18]

Financial Data and Key Metrics Changes - Westlake Partners reported a net income of $5 million or $0.14 per unit for Q1 2025, which is $10 million lower than Q1 2024 due to lower production and sales volume from the planned turnaround at Petro one [6][7] - Consolidated net income, including OpCo's earnings, was $42 million on consolidated net sales of $238 million [7] - Distributable cash flow for the quarter was $5 million or $0.13 per unit, a decrease of $12 million compared to Q1 2024 [7][8] Business Line Data and Key Metrics Changes - The planned turnaround at the Petro one ethylene unit in Lake Charles, Louisiana, resulted in lower production and sales volume, impacting overall earnings [6][7] - The partnership maintained a strong leverage ratio of approximately one times, with long-term debt at $400 million [8] Market Data and Key Metrics Changes - The partnership's predictable fee-based cash flow structure continues to provide stability amid global trade tensions and market volatility [10][11] - The ethylene sales agreement with Westlake ensures predictable cash flows, covering 95% of OpCo's production [10][11] Company Strategy and Development Direction - The company plans to evaluate growth opportunities through increasing ownership interest in OpCo, acquiring other qualified income streams, and organic growth through facility expansions [11] - The focus remains on providing long-term value and distributions to unitholders while maintaining safe operations and environmental stewardship [11] Management's Comments on Operating Environment and Future Outlook - Management acknowledged intensified global trade tensions creating uncertainty but emphasized the stability provided by the ethylene sales agreement [10] - The successful completion of the Petro one turnaround positions the company for solid production levels in the future [10][11] Other Important Information - The partnership has maintained 43 consecutive quarterly distributions since its IPO in July 2014, with a cumulative distribution coverage ratio of approximately 1.1 times [8][9] - The first quarter distribution of $0.04 per unit will be paid on May 29, 2025, to unitholders of record on May 13, 2025 [9] Q&A Session Summary Question: Financial impact of the Q1 turnaround at TETRA one - Management indicated that the impact was as planned, with the unit down for February and March, and elevated interest rates may have affected loan obligations [15][16] Question: Evaluation difference between Westlake and Westlake LP - Management noted that while the parent company has seen valuation compression, the value proposition remains strong over the business cycle, and the valuation differential remains elevated [17][18]