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. Prior to the IPO, the Predecessor sold the majority of its ethylene to Westlake for use in Westlake's downstream operations.

Sales to related parties were as follows:



	Year Ended December 31,
	2014		2013		2012
			Predecessor		Predecessor
Net sales—Westlake	$	1,292,089	$	1,603,043	$	1,507,501

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. Prior to the IPO, services provided by Westlake and included in cost of sales related primarily to services provided by employees of Westlake Management Services, Inc., a subsidiary of Westlake. The cost of services provided by employees of Westlake Management Services, Inc. was allocated to the Predecessor's operations primarily on the basis of direct usage.

Charges from related parties in cost of sales were as follows:



	Year Ended December 31,
	2014		2013		2012
			Predecessor		Predecessor
Feedstock purchased from Westlake and included in cost of sales	$	155,232	$	—	$	—
Other charges from Westlake and included in cost of sales	60,264		61,770		57,454
Total	$	215,496	$	61,770	$	57,454

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. Prior to the IPO, the Predecessor was allocated costs incurred by Westlake on its behalf for similar functions. These allocations were based primarily on the basis of direct usage when identifiable, with the remainder allocated on the basis of fixed assets, headcount or other measure.

Charges from related parties included within selling, general and administrative expenses were as follows:



	Year Ended December 31,
	2014		2013		2012
			Predecessor		Predecessor
Services received from Westlake and included in selling, general and administrative expenses	$	21,302	$	24,054	$	22,485

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. Prior to the IPO, salaries and benefits of Westlake Management Services, Inc. were allocated to the Predecessor primarily on the basis of direct usage.

Charges from related parties for goods and services capitalized as assets were as follows:



	Year Ended December 31,
	2014		2013		2012
			Predecessor		Predecessor
Goods and services purchased from Westlake and capitalized as assets	$	5,823	$	20,222	$	8,902

Accounts Receivable from and Accounts Payable to Related Parties

The Partnership's accounts receivable from Westlake result primarily from ethylene sales to Westlake under the Ethylene Sales Agreement. 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. Prior to the IPO, ethylene sales and other transactions between the Predecessor and Westlake were settled immediately through net investment and, therefore, the Predecessor did not have related party accounts receivable or related party accounts payable balances.

The related party accounts receivable and accounts payable balances were as follows:



	December 31,
	2014		2013
			Predecessor
Accounts receivable, net—Westlake	$	18,529	$	—
Accounts payable—Westlake	7,470		—

Debt Payable to Related Parties

OpCo assumed the August 2013 Promissory Notes and entered into a senior unsecured revolving credit facility with Westlake in connection with the IPO. Prior to the IPO, the Predecessor funded certain capital expenditures through the August 2013 Promissory Notes payable to Westlake which were assumed by the Partnership in connection with the IPO. See Note 9 for a description of related party debt payable balances. Interest capitalized as a component of property, plant and equipment on related party debt was $2,638 for the period from August 4, 2014 to December 31, 2014. At December 31, 2014 and 2013, accrued interest on related party debt was $2,403 and $504, respectively, and is reflected as a component accrued liabilities. Additionally, at December 31, 2013, accrued interest of $7,506 was included as a component of the outstanding debt payable to Westlake.

Debt payable to related parties was as follows:



	December 31,
	2014		2013
			Predecessor
Long-term debt payable to Westlake	$	227,638	$	252,973

General

OpCo, together with other subsidiaries of Westlake not included in these combined and consolidated financial statements, are guarantors under Westlake's revolving credit facility and the indentures governing its senior notes. As of December 31, 2014, Westlake had outstanding letters of credit totaling $31,392 under its revolving credit facility and $754,000 principal amount outstanding under its senior notes (less the unamortized discount of $892).

The indentures governing Westlake's senior notes prevent OpCo from making distributions to the Partnership if any default or event of default (as defined in the indentures) exists. However, Westlake's credit facility does not prevent OpCo from making distributions to the Partnership.

Westlake uses a centralized cash management system to finance its operations. Interest paid, net of capitalized interest, and income taxes have been paid directly by Westlake and charged to the Predecessor through related party accounts receivable, net. Related party accounts receivable, net were settled immediately through net investment, and therefore, the Predecessor did not pay cash for interest expense or income tax expense during the years ended December 31, 2013 or 2012.

OpCo has entered into two site lease agreements with Westlake in connection with the IPO, and each has a term of 50 years. Pursuant to the site lease agreements, OpCo pays Westlake one dollar per site per year.