x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended June 30, 2017 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the Transition Period from to |
Delaware | 32-0436529 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) |
Large accelerated filer | ¨ | Accelerated filer | x | |||
Non-accelerated filer | ¨ (Do not check if a smaller reporting company) | Smaller reporting company | ¨ | |||
Emerging growth company | ¨ |
Item | Page |
June 30, 2017 | December 31, 2016 | |||||||
(in thousands of dollars, except unit amounts) | ||||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 104,939 | $ | 88,900 | ||||
Accounts receivable—Westlake Chemical Corporation ("Westlake") | 79,367 | 126,977 | ||||||
Accounts receivable, net—third parties | 14,720 | 12,085 | ||||||
Inventories | 4,558 | 3,934 | ||||||
Prepaid expenses and other current assets | 45 | 269 | ||||||
Total current assets | 203,629 | 232,165 | ||||||
Property, plant and equipment, net | 1,220,393 | 1,222,238 | ||||||
Other assets, net | ||||||||
Goodwill | 5,814 | 5,814 | ||||||
Deferred charges and other assets, net | 92,741 | 95,011 | ||||||
Total other assets, net | 98,555 | 100,825 | ||||||
Total assets | $ | 1,522,577 | $ | 1,555,228 | ||||
LIABILITIES | ||||||||
Current liabilities | ||||||||
Accounts payable—Westlake | $ | 14,058 | $ | 12,130 | ||||
Accounts payable—third parties | 7,102 | 9,930 | ||||||
Accrued liabilities | 15,230 | 15,717 | ||||||
Total current liabilities | 36,390 | 37,777 | ||||||
Long-term debt payable to Westlake | 588,280 | 594,629 | ||||||
Deferred income taxes | 1,936 | 1,736 | ||||||
Other liabilities | 168 | 123 | ||||||
Total liabilities | 626,774 | 634,265 | ||||||
Commitments and contingencies (Note 15) | ||||||||
EQUITY | ||||||||
Common unitholders—public (12,937,500 units issued and outstanding) | 297,486 | 297,367 | ||||||
Common unitholder—Westlake (1,436,115 units issued and outstanding) | 4,825 | 4,813 | ||||||
Subordinated unitholder—Westlake (12,686,115 units issued and outstanding) | 42,649 | 42,534 | ||||||
General partner—Westlake | (242,250 | ) | (242,430 | ) | ||||
Accumulated other comprehensive income | 243 | 200 | ||||||
Total Westlake Chemical Partners LP partners' capital | 102,953 | 102,484 | ||||||
Noncontrolling interest in Westlake Chemical OpCo LP ("OpCo") | 792,850 | 818,479 | ||||||
Total equity | 895,803 | 920,963 | ||||||
Total liabilities and equity | $ | 1,522,577 | $ | 1,555,228 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
(in thousands of dollars, except unit amounts and per unit data) | ||||||||||||||||
Revenue | ||||||||||||||||
Net sales—Westlake | $ | 240,989 | $ | 181,635 | $ | 453,919 | $ | 412,895 | ||||||||
Net co-product, ethylene and other sales—third parties | 49,124 | 29,206 | 113,642 | 50,550 | ||||||||||||
Total net sales | 290,113 | 210,841 | 567,561 | 463,445 | ||||||||||||
Cost of sales | 190,542 | 122,460 | 370,029 | 264,650 | ||||||||||||
Gross profit | 99,571 | 88,381 | 197,532 | 198,795 | ||||||||||||
Selling, general and administrative expenses | 6,886 | 5,848 | 14,714 | 11,945 | ||||||||||||
Income from operations | 92,685 | 82,533 | 182,818 | 186,850 | ||||||||||||
Other income (expense) | ||||||||||||||||
Interest expense—Westlake | (5,942 | ) | (1,203 | ) | (11,402 | ) | (2,434 | ) | ||||||||
Other income, net | 24 | 159 | 1,682 | 243 | ||||||||||||
Income before income taxes | 86,767 | 81,489 | 173,098 | 184,659 | ||||||||||||
Provision for income taxes | 297 | 297 | 600 | 696 | ||||||||||||
Net income | 86,470 | 81,192 | 172,498 | 183,963 | ||||||||||||
Less: Net income attributable to noncontrolling interest in OpCo | 76,495 | 71,848 | 152,759 | 162,535 | ||||||||||||
Net income attributable to Westlake Chemical Partners LP | $ | 9,975 | $ | 9,344 | $ | 19,739 | $ | 21,428 | ||||||||
Net income per limited partner unit attributable to Westlake Chemical Partners LP (basic and diluted) | ||||||||||||||||
Common units | $ | 0.36 | $ | 0.34 | $ | 0.71 | $ | 0.79 | ||||||||
Subordinated units | $ | 0.36 | $ | 0.34 | $ | 0.71 | $ | 0.79 | ||||||||
Weighted average limited partner units outstanding (basic and diluted) | ||||||||||||||||
Common units—public | 12,937,500 | 12,937,500 | 12,937,500 | 12,937,500 | ||||||||||||
Common units—Westlake | 1,436,115 | 1,436,115 | 1,436,115 | 1,436,115 | ||||||||||||
Subordinated units—Westlake | 12,686,115 | 12,686,115 | 12,686,115 | 12,686,115 | ||||||||||||
Distributions per common unit | $ | 0.3549 | $ | 0.3168 | $ | 0.6999 | $ | 0.6248 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
(in thousands of dollars) | ||||||||||||||||
Net income | $ | 86,470 | $ | 81,192 | $ | 172,498 | $ | 183,963 | ||||||||
Other comprehensive income (loss) | ||||||||||||||||
Cash flow hedge | ||||||||||||||||
Interest rate contract | ||||||||||||||||
Change in fair value of cash flow hedge | (51 | ) | (267 | ) | 7 | (1,094 | ) | |||||||||
Reclassification of loss to net income | 5 | 94 | 36 | 190 | ||||||||||||
Total other comprehensive income (loss) | (46 | ) | (173 | ) | 43 | (904 | ) | |||||||||
Comprehensive income | 86,424 | 81,019 | 172,541 | 183,059 | ||||||||||||
Comprehensive income attributable to noncontrolling interest in OpCo | 76,495 | 71,848 | 152,759 | 162,535 | ||||||||||||
Comprehensive income attributable to Westlake Chemical Partners LP | $ | 9,929 | $ | 9,171 | $ | 19,782 | $ | 20,524 |
Common Unitholders— Public | Common Unitholder— Westlake | Subordinated Unitholder— Westlake | General Partner— Westlake | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interests in OpCo | Total | ||||||||||||||||||||||
(in thousands of dollars) | ||||||||||||||||||||||||||||
Balances at December 31, 2015 | $ | 294,565 | $ | 4,502 | $ | 39,786 | $ | (242,572 | ) | $ | 280 | $ | 750,606 | $ | 847,167 | |||||||||||||
Net income | 10,222 | 1,135 | 10,023 | 48 | — | 162,535 | 183,963 | |||||||||||||||||||||
Net effect of cash flow hedge | — | — | — | — | (904 | ) | — | (904 | ) | |||||||||||||||||||
Quarterly distributions to unitholders | (8,083 | ) | (898 | ) | (7,927 | ) | (2 | ) | — | — | (16,910 | ) | ||||||||||||||||
Quarterly distribution to noncontrolling interest retained in OpCo by Westlake | — | — | — | — | — | (149,566 | ) | (149,566 | ) | |||||||||||||||||||
Balances at June 30, 2016 | $ | 296,704 | $ | 4,739 | $ | 41,882 | $ | (242,526 | ) | $ | (624 | ) | $ | 763,575 | $ | 863,750 | ||||||||||||
Balances at December 31, 2016 | $ | 297,367 | $ | 4,813 | $ | 42,534 | $ | (242,430 | ) | $ | 200 | $ | 818,479 | $ | 920,963 | |||||||||||||
Net income | 9,174 | 1,017 | 8,994 | 554 | — | 152,759 | 172,498 | |||||||||||||||||||||
Net effect of cash flow hedge | — | — | — | — | 43 | — | 43 | |||||||||||||||||||||
Quarterly distributions to unitholders | (9,055 | ) | (1,005 | ) | (8,879 | ) | (374 | ) | — | — | (19,313 | ) | ||||||||||||||||
Quarterly distribution to noncontrolling interest retained in OpCo by Westlake | — | — | — | — | — | (178,388 | ) | (178,388 | ) | |||||||||||||||||||
Balances at June 30, 2017 | $ | 297,486 | $ | 4,825 | $ | 42,649 | $ | (242,250 | ) | $ | 243 | $ | 792,850 | $ | 895,803 |
Six Months Ended June 30, | ||||||||
2017 | 2016 | |||||||
(in thousands of dollars) | ||||||||
Cash flows from operating activities | ||||||||
Net income | $ | 172,498 | $ | 183,963 | ||||
Adjustments to reconcile net income to net cash provided by operating activities | ||||||||
Depreciation and amortization | 57,449 | 41,182 | ||||||
Provision for doubtful accounts | 475 | 37 | ||||||
(Gain) loss from disposition of property, plant and equipment | (107 | ) | 2,467 | |||||
Gain on involuntary conversion of assets | (1,672 | ) | — | |||||
Deferred income taxes | 200 | 320 | ||||||
Changes in operating assets and liabilities | ||||||||
Accounts receivable—third parties | (3,110 | ) | 2,270 | |||||
Net accounts receivable—Westlake | 49,538 | (36,703 | ) | |||||
Inventories | (624 | ) | 1,386 | |||||
Prepaid expenses and other current assets | 224 | 194 | ||||||
Accounts payable | (2,355 | ) | 24,833 | |||||
Accrued and other liabilities | (667 | ) | 26,905 | |||||
Other, net | (9,563 | ) | (61,577 | ) | ||||
Net cash provided by operating activities | 262,286 | 185,277 | ||||||
Cash flows from investing activities | ||||||||
Additions to property, plant and equipment | (43,996 | ) | (168,533 | ) | ||||
Proceeds from disposition of assets | 127 | 98 | ||||||
Proceeds from involuntary conversion of assets | 1,672 | — | ||||||
Net cash used for investing activities | (42,197 | ) | (168,435 | ) | ||||
Cash flows from financing activities | ||||||||
Proceeds from debt payable to Westlake | 20,384 | 131,832 | ||||||
Repayment of debt payable to Westlake | (26,733 | ) | (500 | ) | ||||
Quarterly distributions to noncontrolling interest retained in OpCo by Westlake | (178,388 | ) | (149,566 | ) | ||||
Quarterly distributions to unitholders | (19,313 | ) | (16,910 | ) | ||||
Net cash used for financing activities | (204,050 | ) | (35,144 | ) | ||||
Net increase (decrease) in cash and cash equivalents | 16,039 | (18,302 | ) | |||||
Cash and cash equivalents at beginning of period | 88,900 | 169,559 | ||||||
Cash and cash equivalents at end of period | $ | 104,939 | $ | 151,257 |
June 30, 2017 | December 31, 2016 | |||||||
Trade customers | $ | 15,759 | $ | 11,913 | ||||
Allowance for doubtful accounts | (1,039 | ) | (564 | ) | ||||
14,720 | 11,349 | |||||||
Other | — | 736 | ||||||
Accounts receivable, net—third parties | $ | 14,720 | $ | 12,085 |
June 30, 2017 | December 31, 2016 | |||||||
Finished products | $ | 4,223 | $ | 3,610 | ||||
Feedstock, additives and chemicals | 335 | 324 | ||||||
Inventories | $ | 4,558 | $ | 3,934 |
Marginal Percentage Interest in Distributions | ||||||
Total Quarterly Distribution Per Unit | Unitholders | IDR Holders | ||||
Above $0.3163 up to $0.3438 | 85.0 | % | 15.0 | % | ||
Above $0.3438 up to $0.4125 | 75.0 | % | 25.0 | % | ||
Above $0.4125 | 50.0 | % | 50.0 | % |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Net income attributable to the Partnership | $ | 9,975 | $ | 9,344 | $ | 19,739 | $ | 21,428 | ||||||||
Less: | ||||||||||||||||
Limited partners' distribution declared on common units | 5,246 | 4,684 | 10,347 | 9,238 | ||||||||||||
Limited partners' distribution declared on subordinated units | 4,631 | 4,134 | 9,133 | 8,153 | ||||||||||||
Distribution declared with respect to the incentive distribution rights | 323 | 46 | 554 | 48 | ||||||||||||
(Distribution in excess of net income) net income in excess of distribution | $ | (225 | ) | $ | 480 | $ | (295 | ) | $ | 3,989 |
Three Months Ended June 30, 2017 | ||||||||||||||||
Limited Partners' Common Units | Limited Partners' Subordinated Units | Incentive Distribution Rights | Total | |||||||||||||
Net income attributable to the Partnership: | ||||||||||||||||
Distribution declared | $ | 5,246 | $ | 4,631 | $ | 323 | $ | 10,200 | ||||||||
Distribution in excess of net income | (119 | ) | (106 | ) | — | (225 | ) | |||||||||
Net income | $ | 5,127 | $ | 4,525 | $ | 323 | $ | 9,975 | ||||||||
Weighted average units outstanding: | ||||||||||||||||
Basic and diluted | 14,373,615 | 12,686,115 | 27,059,730 | |||||||||||||
Net income per limited partner unit: | ||||||||||||||||
Basic and diluted | $ | 0.36 | $ | 0.36 |
Three Months Ended June 30, 2016 | ||||||||||||||||
Limited Partners' Common Units | Limited Partners' Subordinated Units | Incentive Distribution Rights | Total | |||||||||||||
Net income attributable to the Partnership: | ||||||||||||||||
Distribution declared | $ | 4,684 | $ | 4,134 | $ | 46 | $ | 8,864 | ||||||||
Net income in excess of distribution | 255 | 225 | — | 480 | ||||||||||||
Net income | $ | 4,939 | $ | 4,359 | $ | 46 | $ | 9,344 | ||||||||
Weighted average units outstanding: | ||||||||||||||||
Basic and diluted | 14,373,615 | 12,686,115 | 27,059,730 | |||||||||||||
Net income per limited partner unit: | ||||||||||||||||
Basic and diluted | $ | 0.34 | $ | 0.34 |
Six Months Ended June 30, 2017 | ||||||||||||||||
Limited Partners' Common Units | Limited Partners' Subordinated Units | Incentive Distribution Rights | Total | |||||||||||||
Net income attributable to the Partnership: | ||||||||||||||||
Distribution declared | $ | 10,347 | $ | 9,133 | $ | 554 | $ | 20,034 | ||||||||
Distribution in excess of net income | (156 | ) | (139 | ) | — | (295 | ) | |||||||||
Net income | $ | 10,191 | $ | 8,994 | $ | 554 | $ | 19,739 | ||||||||
Weighted average units outstanding: | ||||||||||||||||
Basic and diluted | 14,373,615 | 12,686,115 | 27,059,730 | |||||||||||||
Net income per limited partner unit: | ||||||||||||||||
Basic and diluted | $ | 0.71 | $ | 0.71 |
Six Months Ended June 30, 2016 | ||||||||||||||||
Limited Partners' Common Units | Limited Partners' Subordinated Units | Incentive Distribution Rights | Total | |||||||||||||
Net income attributable to the Partnership: | ||||||||||||||||
Distribution declared | $ | 9,238 | $ | 8,153 | $ | 48 | $ | 17,439 | ||||||||
Net income in excess of distribution | 2,119 | 1,870 | — | 3,989 | ||||||||||||
Net income | $ | 11,357 | $ | 10,023 | $ | 48 | $ | 21,428 | ||||||||
Weighted average units outstanding: | ||||||||||||||||
Basic and diluted | 14,373,615 | 12,686,115 | 27,059,730 | |||||||||||||
Net income per limited partner unit: | ||||||||||||||||
Basic and diluted | $ | 0.79 | $ | 0.79 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Net sales—Westlake | $ | 240,989 | $ | 181,635 | $ | 453,919 | $ | 412,895 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Feedstock purchased from Westlake and included in cost of sales | $ | 105,877 | $ | 51,373 | $ | 202,990 | $ | 117,481 | ||||||||
Other charges from Westlake and included in cost of sales | 25,525 | 19,665 | 50,942 | 40,118 | ||||||||||||
Total | $ | 131,402 | $ | 71,038 | $ | 253,932 | $ | 157,599 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Services received from Westlake and included in selling, general and administrative expenses | $ | 6,946 | $ | 5,003 | $ | 13,678 | $ | 10,471 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Goods and services purchased from Westlake and capitalized as assets | $ | 3,239 | $ | 11,074 | $ | 7,324 | $ | 13,081 |
June 30, 2017 | December 31, 2016 | |||||||
Accounts receivable—Westlake | $ | 79,367 | $ | 126,977 | ||||
Accounts payable—Westlake | (14,058 | ) | (12,130 | ) |
June 30, 2017 | December 31, 2016 | |||||||
Long-term debt payable to Westlake | $ | 588,280 | $ | 594,629 |
June 30, 2017 | December 31, 2016 | |||||||
August 2013 Promissory Notes (variable interest rate of prime plus 1.5%, original scheduled maturity of August 1, 2023) | $ | 31,775 | $ | 31,775 | ||||
OpCo Revolver (variable interest rate of LIBOR plus 3.0%, original scheduled maturity of August 4, 2019) | 421,164 | 427,513 | ||||||
MLP Revolver (variable interest rate of LIBOR plus 2.0%, original scheduled maturity of April 29, 2018) | 135,341 | 135,341 | ||||||
$ | 588,280 | $ | 594,629 |
Six Months Ended June 30, | ||||||||
2017 | 2016 | |||||||
Balances at December 31, | $ | 200 | $ | 280 | ||||
Interest rate contract—Other comprehensive income (loss) before reclassification | 7 | (1,094 | ) | |||||
Interest rate contract—Amounts reclassified from accumulated other comprehensive loss into net income | 36 | 190 | ||||||
Balances at June 30, | $ | 243 | $ | (624 | ) |
Derivative Assets | ||||||||||
Derivative in Cash Flow Hedging Relationship | Balance Sheet Location | Fair Value as of | ||||||||
June 30, 2017 | December 31, 2016 | |||||||||
Interest rate contract | Deferred charges and other assets, net | $ | 299 | $ | 290 |
Derivative in Cash Flow Hedging Relationship | Location of Loss Recognized in Statement of Operations | Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||||
Interest rate contract—Loss reclassified from accumulated other comprehensive loss | Interest expense | $ | (5 | ) | $ | (94 | ) | $ | (36 | ) | $ | (190 | ) |
Derivative in Cash Flow Hedging Relationship | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Interest rate contract—Adjustments to fair value recognized in other comprehensive income | $ | 51 | $ | 267 | $ | (7 | ) | $ | 1,094 |
June 30, 2017 | ||||||||
Level 2 | Total | |||||||
Derivative instruments | ||||||||
Asset—Interest rate contract | $ | 299 | $ | 299 |
December 31, 2016 | ||||||||
Level 2 | Total | |||||||
Derivative instruments | ||||||||
Asset—Interest rate contract | $ | 290 | $ | 290 |
June 30, 2017 | December 31, 2016 | |||||||||||||||
Carrying Value | Fair Value | Carrying Value | Fair Value | |||||||||||||
August 2013 Promissory Notes | $ | 31,775 | $ | 31,775 | $ | 31,775 | $ | 31,775 | ||||||||
OpCo Revolver | 421,164 | 437,088 | 427,513 | 442,716 | ||||||||||||
MLP Revolver | 135,341 | 135,526 | 135,341 | 134,835 |
• | our operating performance as compared to other publicly traded partnerships; |
• | our ability to incur and service debt and fund capital expenditures; |
• | the viability of acquisitions and other capital expenditure projects and the returns on investment of various investment opportunities. |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
(dollars in thousands) | ||||||||||||||||
Revenue | ||||||||||||||||
Net sales—Westlake | $ | 240,989 | $ | 181,635 | $ | 453,919 | $ | 412,895 | ||||||||
Net co-product, ethylene and other sales—third parties | 49,124 | 29,206 | 113,642 | 50,550 | ||||||||||||
Total net sales | 290,113 | 210,841 | 567,561 | 463,445 | ||||||||||||
Cost of sales | 190,542 | 122,460 | 370,029 | 264,650 | ||||||||||||
Gross profit | 99,571 | 88,381 | 197,532 | 198,795 | ||||||||||||
Selling, general and administrative expenses | 6,886 | 5,848 | 14,714 | 11,945 | ||||||||||||
Income from operations | 92,685 | 82,533 | 182,818 | 186,850 | ||||||||||||
Other income (expense) | ||||||||||||||||
Interest expense—Westlake | (5,942 | ) | (1,203 | ) | (11,402 | ) | (2,434 | ) | ||||||||
Other income, net | 24 | 159 | 1,682 | 243 | ||||||||||||
Income before income taxes | 86,767 | 81,489 | 173,098 | 184,659 | ||||||||||||
Provision for income taxes | 297 | 297 | 600 | 696 | ||||||||||||
Net income | 86,470 | 81,192 | 172,498 | 183,963 | ||||||||||||
Less: Net income attributable to noncontrolling interest in OpCo | 76,495 | 71,848 | 152,759 | 162,535 | ||||||||||||
Net income attributable to Westlake Chemical Partners LP | $ | 9,975 | $ | 9,344 | $ | 19,739 | $ | 21,428 | ||||||||
MLP distributable cash flow (1) | $ | 10,967 | $ | 4,295 | $ | 22,414 | $ | 13,810 | ||||||||
EBITDA (2) | $ | 120,008 | $ | 103,478 | $ | 241,949 | $ | 228,275 | ||||||||
____________ | ||||||||||||||||
(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 and Net Cash Provided by Operating Activities" below. |
Three Months Ended June 30, 2017 | Six Months Ended June 30, 2017 | |||||||||||
Average Sales Price | Volume | Average Sales Price | Volume | |||||||||
Product sales prices and volume percentage change from prior-year period | -26.4 | % | +64.0 | % | -1.0 | % | +23.5 | % | ||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||
Average industry prices (1) | ||||||||||||
Ethane (cents/lb) | 8.3 | 6.8 | 8.1 | 6.1 | ||||||||
Propane (cents/lb) | 14.9 | 11.7 | 15.9 | 10.4 | ||||||||
Ethylene (cents/lb) (2) | 27.6 | 25.9 | 29.4 | 23.5 |
(1) | Industry pricing data was obtained through IHS Chemical. We have not independently verified the data. |
(2) | Represents average North American spot prices of ethylene over the period as reported by IHS Chemical. |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
(dollars in thousands) | ||||||||||||||||
Net cash provided by operating activities | $ | 113,208 | $ | 72,702 | $ | 262,286 | $ | 185,277 | ||||||||
Changes in operating assets and liabilities and other | (26,630 | ) | 8,631 | (89,588 | ) | (994 | ) | |||||||||
Deferred income taxes | (108 | ) | (141 | ) | (200 | ) | (320 | ) | ||||||||
Net Income | 86,470 | 81,192 | 172,498 | 183,963 | ||||||||||||
Add: | ||||||||||||||||
Depreciation and amortization (1) | 27,299 | 20,786 | 57,449 | 41,182 | ||||||||||||
Less: | ||||||||||||||||
Contribution to turnaround reserves | (7,624 | ) | (10,214 | ) | (14,863 | ) | (16,338 | ) | ||||||||
Maintenance capital expenditures (2) | (9,764 | ) | (48,252 | ) | (18,254 | ) | (81,862 | ) | ||||||||
Incentive distribution rights | (323 | ) | (46 | ) | (554 | ) | (48 | ) | ||||||||
Distributable cash flow attributable to noncontrolling interest in OpCo | (85,091 | ) | (39,171 | ) | (173,862 | ) | (113,087 | ) | ||||||||
MLP distributable cash flow | $ | 10,967 | $ | 4,295 | $ | 22,414 | $ | 13,810 |
(1) | Higher depreciation and amortization in the second quarter and first six months of 2017 as compared to the second quarter and first six months of 2016 are primarily related to the increase in the property, plant and equipment and the turnaround deferred costs associated with the Lake Charles Petro 1 facility expansion and turnaround project that was completed in July 2016. |
(2) | Lower maintenance capital expenditures in the second quarter and first six months of 2017 as compared to the second quarter and first six months of 2016 are primarily related to the Lake Charles Petro 1 facility maintenance capital expenditures incurred in the first six months of 2016. |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
(dollars in thousands) | ||||||||||||||||
Net cash provided by operating activities | $ | 113,208 | $ | 72,702 | $ | 262,286 | $ | 185,277 | ||||||||
Changes in operating assets and liabilities and other | (26,630 | ) | 8,631 | (89,588 | ) | (994 | ) | |||||||||
Deferred income taxes | (108 | ) | (141 | ) | (200 | ) | (320 | ) | ||||||||
Net Income | 86,470 | 81,192 | 172,498 | 183,963 | ||||||||||||
Add: | ||||||||||||||||
Depreciation and amortization | 27,299 | 20,786 | 57,449 | 41,182 | ||||||||||||
Interest expense | 5,942 | 1,203 | 11,402 | 2,434 | ||||||||||||
Provision for income taxes | 297 | 297 | 600 | 696 | ||||||||||||
EBITDA | $ | 120,008 | $ | 103,478 | $ | 241,949 | $ | 228,275 |
• | 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; |
• | 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, such as OpCo's plan to increase the ethylene capacity of the ethylene production facility at Calvert City Olefins; |
• | 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; |
• | 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; |
• | 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; and |
• | effects of pending legal proceedings. |
• | general economic and business conditions; |
• | the cyclical nature of the chemical industry; |
• | the availability, cost and volatility of raw materials and energy; |
• | uncertainties associated with the United States and worldwide economies, including those due to political tensions and unrest in the Middle East, the Commonwealth of Independent States (including Ukraine) and elsewhere; |
• | current and potential governmental regulatory actions in the United States and regulatory actions and political unrest in other countries; |
• | industry production capacity and operating rates; |
• | the supply/demand balance for our product; |
• | 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. |
Exhibit No. | Description | |
10.1† | First Amendment to Senior Unsecured Revolving Credit Agreement by and between Westlake Chemical Partners LP, as borrower, and Westlake Chemical Finance Corporation, as lender, dated as of August 1, 2017 | |
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 | |
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 |
† | Filed herewith. |
WESTLAKE CHEMICAL PARTNERS LP | ||||||
Date: | August 3, 2017 | By: | /S/ ALBERT CHAO | |||
Albert Chao | ||||||
President, Chief Executive Officer and Director of Westlake Chemical Partners GP LLC (Principal Executive Officer) | ||||||
Date: | August 3, 2017 | By: | /S/ M. STEVEN BENDER | |||
M. Steven Bender | ||||||
Executive Vice President, Chief Financial Officer and Director of Westlake Chemical Partners GP LLC (Principal Financial Officer) |
Exhibit No. | Exhibit | |
10.1† | First Amendment to Senior Unsecured Revolving Credit Agreement by and between Westlake Chemical Partners LP, as borrower, and Westlake Chemical Finance Corporation, as lender, dated as of August 1, 2017 | |
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 | |
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 |
† | Filed herewith. |
SECTION 1. | DEFINITIONS |
SECTION 2. | AMENDMENT |
SECTION 3. | EFFECTIVENESS |
SECTION 4. | MISCELLANEOUS |
WESTLAKE CHEMICAL PARTNERS LP By: Westlake Chemical Partners GP LLC, its general partner as Borrower | ||
By: | /s/ M. Steven Bender | |
Name: M. Steven Bender | ||
Title: Executive Vice President and Chief Financial Officer | ||
WESTLAKE CHEMICAL FINANCE CORPORATION as Lender | ||
By: | _ /s/ Bruce P. Robertson | |
Name: Bruce P. Robertson | ||
Title: Assistant Treasurer |
1. | I have reviewed this Quarterly Report on Form 10-Q of Westlake Chemical Partners LP; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: | August 3, 2017 | /S/ ALBERT CHAO | |||||
Albert Chao | |||||||
President, Chief Executive Officer and Director of Westlake Chemical Partners GP LLC (Principal Executive Officer) |
1. | I have reviewed this Quarterly Report on Form 10-Q of Westlake Chemical Partners LP; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: | August 3, 2017 | /S/ M. STEVEN BENDER | |||||
M. Steven Bender | |||||||
Executive Vice President, Chief Financial Officer and Director of Westlake Chemical Partners GP LLC (Principal Financial Officer) |
(1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
(2) | The information contained in the Report fairly presents, in all material aspects, the financial condition and results of operations of the Partnership. |
Date: | August 3, 2017 | /S/ ALBERT CHAO | |||||
Albert Chao | |||||||
President, Chief Executive Officer and Director of Westlake Chemical Partners GP LLC (Principal Executive Officer) | |||||||
Date: | August 3, 2017 | /S/ M. STEVEN BENDER | |||||
M. Steven Bender | |||||||
Executive Vice President, Chief Financial Officer and Director of Westlake Chemical Partners GP LLC (Principal Financial Officer) |
Document and Entity Information - shares |
6 Months Ended | |
---|---|---|
Jun. 30, 2017 |
Jul. 27, 2017 |
|
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2017 | |
Document Fiscal Year Focus | 2017 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | WLKP | |
Entity Registrant Name | WESTLAKE CHEMICAL PARTNERS LP | |
Entity Central Index Key | 0001604665 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Common units [Member] | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 14,373,615 | |
Subordinated units [Member] | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 12,686,115 |
Consolidated Balance Sheets (Parenthetical) - shares |
Jun. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Common units [Member] | Public [Member] | ||
Units issued | 12,937,500 | 12,937,500 |
Units outstanding | 12,937,500 | 12,937,500 |
Common units [Member] | Westlake [Member] | ||
Units issued | 1,436,115 | 1,436,115 |
Units outstanding | 1,436,115 | 1,436,115 |
Subordinated units [Member] | Westlake [Member] | ||
Units issued | 12,686,115 | 12,686,115 |
Units outstanding | 12,686,115 | 12,686,115 |
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
Jun. 30, 2017 |
Jun. 30, 2016 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 86,470 | $ 81,192 | $ 172,498 | $ 183,963 |
Change in fair value of cash flow hedge | (51) | (267) | 7 | (1,094) |
Reclassification of loss to net income | 5 | 94 | 36 | 190 |
Total other comprehensive income (loss) | (46) | (173) | 43 | (904) |
Comprehensive income | 86,424 | 81,019 | 172,541 | 183,059 |
Comprehensive income attributable to noncontrolling interest in OpCo | 76,495 | 71,848 | 152,759 | 162,535 |
Comprehensive income attributable to Westlake Chemical Partners LP | $ 9,929 | $ 9,171 | $ 19,782 | $ 20,524 |
Consolidated Statements of Changes in Equity - USD ($) $ in Thousands |
Total |
Accumulated Other Comprehensive Income (Loss) [Member] |
Noncontrolling Interest in OpCo [Member] |
Westlake [Member]
General Partner [Member]
|
Common units [Member]
Public [Member]
Limited Partner [Member]
|
Common units [Member]
Westlake [Member]
Limited Partner [Member]
|
Subordinated units [Member]
Westlake [Member]
Limited Partner [Member]
|
---|---|---|---|---|---|---|---|
Equity, beginning balance at Dec. 31, 2015 | $ 847,167 | $ 280 | $ 750,606 | $ (242,572) | $ 294,565 | $ 4,502 | $ 39,786 |
Net income | 183,963 | 0 | 162,535 | 48 | 10,222 | 1,135 | 10,023 |
Net effect of cash flow hedge | (904) | (904) | 0 | 0 | 0 | 0 | 0 |
Quarterly distributions to unitholders | (16,910) | 0 | 0 | (2) | (8,083) | (898) | (7,927) |
Quarterly distribution to noncontrolling interest retained in OpCo by Westlake | (149,566) | 0 | (149,566) | 0 | 0 | 0 | 0 |
Equity, ending balance at Jun. 30, 2016 | 863,750 | (624) | 763,575 | (242,526) | 296,704 | 4,739 | 41,882 |
Equity, beginning balance at Dec. 31, 2016 | 920,963 | 200 | 818,479 | (242,430) | 297,367 | 4,813 | 42,534 |
Net income | 172,498 | 0 | 152,759 | 554 | 9,174 | 1,017 | 8,994 |
Net effect of cash flow hedge | 43 | 43 | 0 | 0 | 0 | 0 | 0 |
Quarterly distributions to unitholders | (19,313) | 0 | 0 | (374) | (9,055) | (1,005) | (8,879) |
Quarterly distribution to noncontrolling interest retained in OpCo by Westlake | (178,388) | 0 | (178,388) | 0 | 0 | 0 | 0 |
Equity, ending balance at Jun. 30, 2017 | $ 895,803 | $ 243 | $ 792,850 | $ (242,250) | $ 297,486 | $ 4,825 | $ 42,649 |
Description of Business and Basis of Presentation |
6 Months Ended |
---|---|
Jun. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business and Basis of Presentation | 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% 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. On April 29, 2015, the Partnership purchased an additional 2.7% newly-issued limited partner interest in OpCo for approximately $135,341, resulting in an aggregate 13.3% limited partner interest in OpCo effective April 1, 2015. OpCo owns three ethylene production facilities and a common carrier ethylene pipeline. 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 December 31, 2016 combined and 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, 2016 (the "2016 Form 10-K"), filed with the SEC on March 7, 2017. These financial statements have been prepared in conformity with the accounting principles and practices as disclosed in the notes to the combined and consolidated financial statements of the Partnership for the fiscal year ended December 31, 2016. References to "Westlake" refer collectively to Westlake Chemical Corporation and its subsidiaries, other than the Partnership, OpCo and OpCo GP. The Partnership holds a 13.3% limited partner interest and the entire non-economic general partner interest in OpCo. The remaining 86.7% limited partner interest in OpCo is owned 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 86.7% 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 June 30, 2017, its results of operations for the three and six months ended June 30, 2017 and 2016 and the changes in its cash position for the six months ended June 30, 2017 and 2016. 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, 2017 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. Recent Accounting Pronouncements Revenue from Contracts with Customers (ASU No. 2014-09) In May 2014, the Financial Accounting Standards Board ("FASB") issued an accounting standards update on a comprehensive new revenue recognition standard that will supersede the existing revenue recognition guidance. The new accounting guidance creates a framework by which an entity will allocate the transaction price to separate performance obligations and recognize revenue when each performance obligation is satisfied. Under the new standard, entities will be required to use judgment and make estimates, including identifying performance obligations in a contract, estimating the amount of variable consideration to include in the transaction price, allocating the transaction price to each separate performance obligation and determining when an entity satisfies its performance obligations. The standard allows for either "full retrospective" adoption, meaning that the standard is applied to all of the periods presented with a cumulative catch-up as of the earliest period presented, or "modified retrospective" adoption, meaning the standard is applied only to the most current period presented in the financial statements with a cumulative catch-up as of the current period. In 2016, the FASB issued various additional authoritative guidance for the new revenue recognition standard. The accounting standard will be effective for reporting periods beginning after December 15, 2017. The Partnership is in the process of performing a detailed analysis of its contracts with customer to evaluate the potential impact that the new accounting standard will have on its consolidated financial position, results of operations and cash flows. The Partnership intends to elect the modified retrospective method of adoption. Leases (ASU No. 2016-02) In February 2016, the FASB issued an accounting standards update on a new lease standard that will supersede the existing lease guidance. The standard requires a lessee to recognize assets and liabilities related to long-term leases that are classified as operating leases under current guidance on its balance sheet. An asset would be recognized related to the right to use the underlying asset and a liability would be recognized related to the obligation to make lease payments over the term of the lease. The standard also requires expanded disclosures related to leases. The accounting standard will be effective for reporting periods beginning after December 15, 2018. The Partnership is in the process of evaluating the impact that the new accounting guidance will have on its consolidated financial position, results of operations and cash flows. 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 on expected losses to estimate credit losses on 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 will be effective for reporting periods beginning after December 15, 2019 and is not expected to have a material impact on the Partnership's consolidated financial position, results of operations and cash flows. Cash Flows (ASU No. 2016-15) In August 2016, the FASB issued an accounting standards update providing new guidance on the classification of certain cash receipts and payments including debt extinguishment costs, debt prepayment costs, settlement of zero-coupon debt instruments, contingent consideration payments, proceeds from the settlement of insurance claims and life insurance policies and distributions received from equity method investees in the statement of cash flows. This update is required to be applied using the retrospective transition method to each period presented unless it is impracticable to be applied retrospectively. In such situation, this guidance is to be applied prospectively. The accounting standard will be effective for reporting periods beginning after December 15, 2017 and is not expected to have an impact on the Partnership's consolidated financial position, results of operations and cash flows. Business Combinations (ASU No. 2017-01) In January 2017, the FASB issued an accounting standards update to assist entities with evaluating when a set of transferred assets and activities is a business. The guidance requires an entity to evaluate if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets; if so, the set of transferred assets and activities is not a business. The guidance also requires a business to include at least one substantive process and narrows the definition of outputs by more closely aligning it with how outputs are described in the FASB ASC Topic 606, Revenue from contracts with customers.The accounting standard will be effective for reporting periods beginning after December 15, 2017 and is not expected to have an impact on the Partnership's consolidated financial position, results of operations and cash flows. Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (ASU No. 2017-05) In February 2017, the FASB issued an accounting standards update to clarify the scope of guidance related to other income—gains and losses from the derecognition of nonfinancial assets, and to add guidance for partial sales of nonfinancial assets. The new guidance clarifies that an in substance nonfinancial asset is an asset or group of assets for which substantially all of the fair value consists of nonfinancial assets and the group or subsidiary is not a business. The guidance also outlines that when an entity transfers its controlling interest in a nonfinancial asset, but retains a noncontrolling interest, it will measure the retained interest at fair value resulting in full gain or loss recognition upon sale of the controlling interest. The accounting standard will be effective for reporting periods beginning after December 15, 2017 and is not expected to have an impact on the Partnership's consolidated financial position, results of operations and cash flows. Recently Adopted Accounting Standard Amendments to the Consolidation Analysis (ASU No. 2016-17) In October 2016, the FASB issued an accounting standards update making certain changes to the current consolidation guidance. The amendments affect reporting entities that are required to evaluate whether they should consolidate a variable interest entity in certain situations involving entities under common control. Specifically, the amendments change the evaluation of whether a reporting entity is the primary beneficiary of a variable interest entity by changing how a reporting entity that is a single decision maker of a variable interest entity treats indirect interests in the entity held through related parties that are under common control with the reporting entity. The amendments became effective for annual periods beginning after December 15, 2016. The Partnership adopted this accounting standard effective January 1, 2017, and the adoption did not have any impact on the Partnership's consolidated financial position, results of operations and cash flow. |
Financial Instruments Financial Instruments |
6 Months Ended |
---|---|
Jun. 30, 2017 | |
Financial Instruments [Abstract] | |
Financial Instruments | Financial Instruments Cash Equivalents The Partnership had $9,996 of held-to-maturity securities with original maturities of three months or less, primarily consisting of corporate debt securities, classified as cash equivalents at June 30, 2017. The Partnership's investments in held-to-maturity securities are held at amortized cost, which approximates fair value. There were no held-to-maturity securities, classified as cash equivalents, at December 31, 2016. |
Accounts Receivable - Third Parties |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Receivable, Net [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Receivable - Third Parties | Accounts Receivable—Third Parties Accounts receivable—third parties consist of the following:
|
Inventories |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | Inventories Inventories consist of the following:
|
Property, Plant and Equipment |
6 Months Ended |
---|---|
Jun. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Property, Plant and Equipment As of June 30, 2017, the Partnership had property, plant and equipment, net totaling $1,220,393. The Partnership assesses these assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable, including when negative conditions such as significant current or projected operating losses exist. Other factors considered by the Partnership when determining if an impairment assessment is necessary include, but are not limited to, significant changes or projected changes in supply and demand fundamentals (which would have a negative impact on operating rates or margins), new technological developments, new competitors with significant raw material or other cost advantages, adverse changes associated with the U.S. and world economies and uncertainties associated with governmental actions. Long-lived assets assessed for impairment are grouped at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. Depreciation expense on property, plant and equipment of $22,251 and $17,094 is included in cost of sales in the consolidated statements of operations for the three months ended June 30, 2017 and 2016, respectively. Depreciation expense on property, plant and equipment of $45,664 and $33,647 is included in cost of sales in the consolidated statements of operations for the six months ended June 30, 2017 and 2016, respectively. |
Other Assets |
6 Months Ended | ||||||
---|---|---|---|---|---|---|---|
Jun. 30, 2017 | |||||||
Other Assets, Noncurrent [Abstract] | |||||||
Other Assets | Other Assets Amortization expense on other assets of $5,047 and $3,692 is included in costs of sales in the consolidated statements of operations for the three months ended June 30, 2017 and 2016, respectively. Amortization expense on other assets of $11,785 and $7,535 is included in costs of sales in the consolidated statements of operations for the six months ended June 30, 2017 and 2016, respectively. |
Distributions and Net Income Per Limited Partner Unit |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Distributions and Net Income Per Limited Partner Unit | Distributions and Net Income Per Limited Partner Unit On August 1, 2017, the board of directors of Westlake Chemical Partners GP LLC ("Westlake GP"), the Partnership's general partner, declared a quarterly cash distribution for the period from April 1, 2017 through June 30, 2017 of $0.3650 per unit and of $323 to the holders of the Partnership's incentive distribution rights ("IDR Holders"). This distribution is payable on August 29, 2017 to unitholders and IDR Holders of record as of August 15, 2017. The Partnership Agreement provides that the Partnership will distribute cash each quarter during the subordination period in the following manner: first, to the holders of common units, until each common unit has received the minimum quarterly distribution of $0.2750, plus any arrearages from prior quarters; second, to the holders of subordinated units, until each subordinated unit has received the minimum quarterly distribution of $0.2750; and third, to the holders of common and subordinated units, pro-rata, until each unit has received a distribution of $0.3163. If cash distributions to the Partnership's unitholders exceed $0.3163 per common unit and subordinated 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:
For the three months ended June 30, 2017, the Partnership's distribution exceeded the $0.3163 per common and subordinated unit target, which resulted in distributions to the IDR Holders. The distributions are declared subsequent to quarter end; therefore, the table below represents total distributions declared from earnings of the related periods pertaining to such distributions.
Net income per unit applicable to common limited partner units and to subordinated limited partner units is computed by dividing the respective limited partners' interest in net income by the weighted-average number of common units and subordinated 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, subordinated 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 statement of 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.
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Related Party Transactions |
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Related Party Transactions [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions | 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 Amended Ethylene Sales Agreement. Additionally, the Partnership and OpCo from time to time provide other services or products for which each charges Westlake a fee. Sales to related parties were as follows:
Under the Services and Secondment Agreement, OpCo uses a portion of its production capacity to process purge gas for Westlake. On August 4, 2016, OpCo and Westlake entered into an amendment to the Ethylene Sales Agreement in order to provide that certain of the pricing components that make up the price for ethylene sold thereunder would be modified to reflect the portion of OpCo's production capacity that is used to process Westlake's purge gas instead of producing ethylene and to clarify that costs specific to the processing of Westlake's purge gas would be recovered under the Services and Secondment Agreement, and not the Ethylene Sales Agreement. 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:
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:
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:
Accounts Receivable from and Accounts Payable to Related Parties The Partnership's accounts receivable from Westlake result primarily from ethylene sales to Westlake and the shortfall recoverable from Westlake under the Ethylene Sales Agreement. 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 year, OpCo is entitled to recover the shortfall in the subsequent year. The shortfall is recognized in the period when such production activities occur. The shortfall recognized in 2016 is recoverable during 2017, per the Ethylene Sales Agreement. During 2016, Calvert City Olefins experienced a shutdown caused by a mechanical failure, which resulted in a force majeure event under the Ethylene Sales Agreement. Based on the annual year-end measurement, a buyer deficiency fee of $13,106 was recognized as a receivable from Westlake and as a component of net sales in the consolidated financial statements as of and for the year ended December 31, 2016. The buyer deficiency fee was collected from Westlake in January 2017. 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 receivable and accounts payable balances were as follows:
Debt Payable to Related Parties In connection with the IPO, OpCo assumed promissory notes payable to Westlake ("the August 2013 Promissory Notes") and entered into a senior unsecured revolving credit facility with Westlake. In April 2015, the Partnership entered into an unsecured revolving credit facility with Westlake. See Note 9 for a description of related party debt payable balances. Interest on related party debt payable balances for the three months ended June 30, 2017 and 2016 was $5,942 and $1,203, respectively, and for the six months ended June 30, 2017 and 2016 was $11,402 and $2,434, respectively. Interest on related party debt payable is presented as interest expense—Westlake in the consolidated statements of operations. Interest capitalized as a component of plant and equipment on related party debt was $20 and $3,050 for the three months ended June 30, 2017 and 2016, respectively, and $418 and $5,436 for the six months ended June 30, 2017 and 2016, respectively. At June 30, 2017 and December 31, 2016, accrued interest on related party debt was $2,967 and $5,517, respectively, and is reflected as a component of accrued liabilities in the consolidated balance sheets. Debt payable to related parties was as follows:
General OpCo, together with other subsidiaries of Westlake not included in these consolidated financial statements, were guarantors under Westlake's revolving credit facility and the indentures governing its senior notes. During August 2016, OpCo and certain subsidiaries of Westlake were released from their guarantees. In 2015, the Partnership entered into an interest rate contract with Westlake to fix the London Interbank Offered Rate ("LIBOR") component of the interest rate for a portion of the MLP Revolver balance. See Note 11 for additional information on the interest rate contract. OpCo has two site lease agreements with Westlake, and each has a term of 50 years. Pursuant to the site lease agreements, OpCo pays Westlake one dollar per site per year. |
Long-term Debt Payable to Westlake |
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Related Party Transactions [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-term Debt Payable to Westlake | Long-term Debt Payable to Westlake Long-term debt payable to Westlake consists of the following:
The weighted average interest rate on all long-term debt was 4.00% and 3.72% at June 30, 2017 and December 31, 2016, respectively. As of June 30, 2017, the Partnership was in compliance with all of the covenants under the August 2013 Promissory Notes, the OpCo Revolver and the MLP Revolver. |
Accumulated Other Comprehensive (Loss) Income |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive (Loss) Income | Accumulated Other Comprehensive Income (Loss) Accumulated other comprehensive income or loss primarily reflects the effective portion of the gain or loss on derivative instrument designated and qualified as a cash flow hedge. Gain or loss amounts related to a cash flow hedge recorded in accumulated other comprehensive income or loss are reclassified to income in the same period in which the underlying hedged forecasted transaction affects income. If it becomes probable that a forecasted transaction will not occur, the related net gain or loss in accumulated other comprehensive income or loss is immediately reclassified into income. Changes in accumulated other comprehensive income (loss) were as follows:
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Derivative Instruments |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments | Derivative Instruments The accounting guidance for derivative instruments and hedging activities requires that the Partnership recognize all derivative instruments on the balance sheet at fair value, and changes in the derivative's fair value must be currently recognized in earnings or comprehensive income, depending on the designation of the derivative. If the derivative is designated as a fair value hedge, the changes in the fair value of the derivative and of the hedged item attributable to the hedged risk are recognized in earnings. If the derivative is designated as a cash flow hedge, the effective portion of the change in the fair value of the derivative is recorded in comprehensive income and is recognized in the statement of operations when the hedged item affects earnings. Ineffective portions of changes in the fair value of cash flow hedges are recognized in earnings currently. Interest Rate Risk Management During August 2015, the Partnership entered into an interest rate contract with Westlake designed to reduce the risks of variability of the interest rate under the MLP Revolver. The interest rate contract fixed the LIBOR component of the interest rate for a portion of the MLP Revolver balance. This contract was designated as a cash flow hedge. With the exception of this interest rate contract, the Partnership did not have any other derivative financial instruments during the three and six months ended June 30, 2017 and 2016. The fair values of the derivative instrument on the Partnership's consolidated balance sheets were as follows:
The following tables present the effect of the derivative instrument designated as cash flow hedge on the consolidated statements of operations and the consolidated statements of comprehensive income for the three and six months ended June 30, 2017 and 2016:
There was no ineffective portion of the derivative instrument during the three and six months ended June 30, 2017 and 2016. See Note 12 for the fair value of derivative instruments. |
Fair Value Measurements |
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | 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. The following tables summarize, by level within the fair value hierarchy, the Partnership's liability and asset under the interest rate contract that was accounted for at fair value on a recurring basis:
The fair value of the Level 2 interest rate contract is determined using standard valuation methodologies which incorporate relevant contract terms along with readily available market data (i.e. the 3-month LIBOR forward curve). There were no transfers in or out of Levels 1 and 2 of the fair value hierarchy during the six months ended June 30, 2017. The Partnership has other financial assets and liabilities subject to fair value measures. These financial assets and liabilities include 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 June 30, 2017 and December 31, 2016 are summarized in the table below. The Partnership's long-term debt includes the August 2013 Promissory Notes, the OpCo Revolver and the MLP Revolver. 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.
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Supplemental Information |
6 Months Ended |
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Jun. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Supplemental Information | Supplemental Information Accrued Liabilities Accrued liabilities were $15,230 and $15,717 at June 30, 2017 and December 31, 2016, respectively. The capital expenditures accrual, accrued interest, accrued taxes, and accrued maintenance, which are components of accrued liabilities, were $2,776, $2,967, $3,461, and $2,906, respectively, at June 30, 2017, and $2,647, $5,517, $1,497, and $2,586, respectively, at December 31, 2016. No other component of accrued liabilities was more than five percent of total current liabilities. Non-cash Investing Activity The change in capital expenditure accrual increasing additions to property, plant and equipment was $293 for the six months ended June 30, 2017. The change in capital expenditure accrual reducing additions to property, plant and equipment was $50,354 for the six months ended June 30, 2016. Insurance Recovery During the six months ended June 30, 2017, the Partnership received an insurance recovery of approximately $1,672 representing involuntary conversion of assets related to the Calvert City Olefins unplanned shut-down during 2016. The insurance recovery is included in other income in the consolidated statement of operations for the six months ended June 30, 2017. |
Major Customer and Concentration Risk |
6 Months Ended |
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Jun. 30, 2017 | |
Risks and Uncertainties [Abstract] | |
Major Customer and Concentration of Credit Risk | Major Customer and Concentration of Credit Risk During the three months ended June 30, 2017 and 2016, Westlake accounted for approximately 83.1% and 86.1%, respectively, of the Partnership's net sales. During the six months ended June 30, 2017 and 2016, Westlake accounted for approximately 80.0% and 89.1%, respectively, of the Partnership's net sales. |
Commitments and Contingencies |
6 Months Ended |
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Jun. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 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. Potential Flare Modifications. For several years, the 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. Westlake believes the resolution of these matters may require the payment of a monetary sanction in excess of $100. Louisiana Notice of Violations. The Louisiana Department of Environmental Quality ("LDEQ") has issued notices of violations ("NOVs") regarding the Partnership's assets, and those of Westlake, for various air and water compliance issues. The Partnership and Westlake negotiated two settlement agreements with the LDEQ fully resolving the NOVs as well as additional violations alleged by the LDEQ though not made the subject of any specific NOV for a combined $192 in civil penalties. The penalties have been paid and upon submission of a letter withdrawing Westlake's request for administrative hearing, this matter is expected to be resolved. In addition to the matters described above, the Partnership is involved in various 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. |
Subsequent Events |
6 Months Ended |
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Jun. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Distribution On August 1, 2017, the board of directors of Westlake GP declared a quarterly distribution for the period from April 1, 2017 through June 30, 2017 of $0.3650 per unit and $323 to IDR Holders. This distribution is payable on August 29, 2017 to unitholders and IDR Holders of record as of August 15, 2017. MLP Revolver Amendment On August 1, 2017, the Partnership entered into an amendment to the MLP Revolver agreement, resulting in the extension of the maturity date from April 29, 2018 to April 29, 2021. General Subsequent events were evaluated through the date on which the financial statements were issued. |
Description of Business and Basis of Presentation (Policies) |
6 Months Ended |
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Jun. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | 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 December 31, 2016 combined and 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, 2016 (the "2016 Form 10-K"), filed with the SEC on March 7, 2017. These financial statements have been prepared in conformity with the accounting principles and practices as disclosed in the notes to the combined and consolidated financial statements of the Partnership for the fiscal year ended December 31, 2016. References to "Westlake" refer collectively to Westlake Chemical Corporation and its subsidiaries, other than the Partnership, OpCo and OpCo GP. The Partnership holds a 13.3% limited partner interest and the entire non-economic general partner interest in OpCo. The remaining 86.7% limited partner interest in OpCo is owned 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 86.7% 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 June 30, 2017, its results of operations for the three and six months ended June 30, 2017 and 2016 and the changes in its cash position for the six months ended June 30, 2017 and 2016. 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, 2017 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. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Revenue from Contracts with Customers (ASU No. 2014-09) In May 2014, the Financial Accounting Standards Board ("FASB") issued an accounting standards update on a comprehensive new revenue recognition standard that will supersede the existing revenue recognition guidance. The new accounting guidance creates a framework by which an entity will allocate the transaction price to separate performance obligations and recognize revenue when each performance obligation is satisfied. Under the new standard, entities will be required to use judgment and make estimates, including identifying performance obligations in a contract, estimating the amount of variable consideration to include in the transaction price, allocating the transaction price to each separate performance obligation and determining when an entity satisfies its performance obligations. The standard allows for either "full retrospective" adoption, meaning that the standard is applied to all of the periods presented with a cumulative catch-up as of the earliest period presented, or "modified retrospective" adoption, meaning the standard is applied only to the most current period presented in the financial statements with a cumulative catch-up as of the current period. In 2016, the FASB issued various additional authoritative guidance for the new revenue recognition standard. The accounting standard will be effective for reporting periods beginning after December 15, 2017. The Partnership is in the process of performing a detailed analysis of its contracts with customer to evaluate the potential impact that the new accounting standard will have on its consolidated financial position, results of operations and cash flows. The Partnership intends to elect the modified retrospective method of adoption. Leases (ASU No. 2016-02) In February 2016, the FASB issued an accounting standards update on a new lease standard that will supersede the existing lease guidance. The standard requires a lessee to recognize assets and liabilities related to long-term leases that are classified as operating leases under current guidance on its balance sheet. An asset would be recognized related to the right to use the underlying asset and a liability would be recognized related to the obligation to make lease payments over the term of the lease. The standard also requires expanded disclosures related to leases. The accounting standard will be effective for reporting periods beginning after December 15, 2018. The Partnership is in the process of evaluating the impact that the new accounting guidance will have on its consolidated financial position, results of operations and cash flows. 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 on expected losses to estimate credit losses on 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 will be effective for reporting periods beginning after December 15, 2019 and is not expected to have a material impact on the Partnership's consolidated financial position, results of operations and cash flows. Cash Flows (ASU No. 2016-15) In August 2016, the FASB issued an accounting standards update providing new guidance on the classification of certain cash receipts and payments including debt extinguishment costs, debt prepayment costs, settlement of zero-coupon debt instruments, contingent consideration payments, proceeds from the settlement of insurance claims and life insurance policies and distributions received from equity method investees in the statement of cash flows. This update is required to be applied using the retrospective transition method to each period presented unless it is impracticable to be applied retrospectively. In such situation, this guidance is to be applied prospectively. The accounting standard will be effective for reporting periods beginning after December 15, 2017 and is not expected to have an impact on the Partnership's consolidated financial position, results of operations and cash flows. Business Combinations (ASU No. 2017-01) In January 2017, the FASB issued an accounting standards update to assist entities with evaluating when a set of transferred assets and activities is a business. The guidance requires an entity to evaluate if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets; if so, the set of transferred assets and activities is not a business. The guidance also requires a business to include at least one substantive process and narrows the definition of outputs by more closely aligning it with how outputs are described in the FASB ASC Topic 606, Revenue from contracts with customers.The accounting standard will be effective for reporting periods beginning after December 15, 2017 and is not expected to have an impact on the Partnership's consolidated financial position, results of operations and cash flows. Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (ASU No. 2017-05) In February 2017, the FASB issued an accounting standards update to clarify the scope of guidance related to other income—gains and losses from the derecognition of nonfinancial assets, and to add guidance for partial sales of nonfinancial assets. The new guidance clarifies that an in substance nonfinancial asset is an asset or group of assets for which substantially all of the fair value consists of nonfinancial assets and the group or subsidiary is not a business. The guidance also outlines that when an entity transfers its controlling interest in a nonfinancial asset, but retains a noncontrolling interest, it will measure the retained interest at fair value resulting in full gain or loss recognition upon sale of the controlling interest. The accounting standard will be effective for reporting periods beginning after December 15, 2017 and is not expected to have an impact on the Partnership's consolidated financial position, results of operations and cash flows. Recently Adopted Accounting Standard Amendments to the Consolidation Analysis (ASU No. 2016-17) In October 2016, the FASB issued an accounting standards update making certain changes to the current consolidation guidance. The amendments affect reporting entities that are required to evaluate whether they should consolidate a variable interest entity in certain situations involving entities under common control. Specifically, the amendments change the evaluation of whether a reporting entity is the primary beneficiary of a variable interest entity by changing how a reporting entity that is a single decision maker of a variable interest entity treats indirect interests in the entity held through related parties that are under common control with the reporting entity. The amendments became effective for annual periods beginning after December 15, 2016. The Partnership adopted this accounting standard effective January 1, 2017, and the adoption did not have any impact on the Partnership's consolidated financial position, results of operations and cash flow. |
Derivative Instruments | Derivative Instruments The accounting guidance for derivative instruments and hedging activities requires that the Partnership recognize all derivative instruments on the balance sheet at fair value, and changes in the derivative's fair value must be currently recognized in earnings or comprehensive income, depending on the designation of the derivative. If the derivative is designated as a fair value hedge, the changes in the fair value of the derivative and of the hedged item attributable to the hedged risk are recognized in earnings. If the derivative is designated as a cash flow hedge, the effective portion of the change in the fair value of the derivative is recorded in comprehensive income and is recognized in the statement of operations when the hedged item affects earnings. Ineffective portions of changes in the fair value of cash flow hedges are recognized in earnings currently. |
Accounts Receivable - Third Parties (Tables) |
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Accounts Receivable, Net [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Accounts Receivable - Third Parties | Accounts receivable—third parties consist of the following:
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Inventories (Tables) |
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Jun. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Inventory | Inventories consist of the following:
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Distributions and Net Income Per Limited Partner Unit (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Incentive Distributions Made to Managing Members or General Partners by Distribution | If cash distributions to the Partnership's unitholders exceed $0.3163 per common unit and subordinated 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:
For the three months ended June 30, 2017, the Partnership's distribution exceeded the $0.3163 per common and subordinated unit target, which resulted in distributions to the IDR Holders. The distributions are declared subsequent to quarter end; therefore, the table below represents total distributions declared from earnings of the related periods pertaining to such distributions.
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Schedule of Earnings Per Share, Basic and Diluted | Net income attributable to the Partnership is allocated to the unitholders in accordance with their respective ownership percentages in preparation of the consolidated statement of 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.
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Related Party Transactions (Tables) |
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Jun. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Related Party Transactions | Charges from related parties for goods and services capitalized as assets were as follows:
Debt payable to related parties was as follows:
Sales to related parties were as follows:
Charges from related parties in cost of sales were as follows:
Charges from related parties included within selling, general and administrative expenses were as follows:
The related party accounts receivable and accounts payable balances were as follows:
Long-term debt payable to Westlake consists of the following:
|
Long-term Debt Payable to Westlake (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Related Party Transactions | Charges from related parties for goods and services capitalized as assets were as follows:
Debt payable to related parties was as follows:
Sales to related parties were as follows:
Charges from related parties in cost of sales were as follows:
Charges from related parties included within selling, general and administrative expenses were as follows:
The related party accounts receivable and accounts payable balances were as follows:
Long-term debt payable to Westlake consists of the following:
|
Accumulated Other Comprehensive (Loss) Income (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accumulated Other Comprehensive (Loss) Income | Changes in accumulated other comprehensive income (loss) were as follows:
|
Derivative Instruments (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Values of Derivatives Instruments in Consolidated Balance Sheet | The fair values of the derivative instrument on the Partnership's consolidated balance sheets were as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments, Gain (Loss) | The following tables present the effect of the derivative instrument designated as cash flow hedge on the consolidated statements of operations and the consolidated statements of comprehensive income for the three and six months ended June 30, 2017 and 2016:
|
Fair Value Measurements (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value, Liabilities Measured on Recurring Basis | The following tables summarize, by level within the fair value hierarchy, the Partnership's liability and asset under the interest rate contract that was accounted for at fair value on a recurring basis:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary Of Carrying And Fair Values Of Long-Term Debt | The carrying and fair values of the Partnership's long-term debt at June 30, 2017 and December 31, 2016 are summarized in the table below. The Partnership's long-term debt includes the August 2013 Promissory Notes, the OpCo Revolver and the MLP Revolver. 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.
|
Financial Instruments (Details) - USD ($) $ in Thousands |
Jun. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Held-to-maturity Securities [Member] | ||
Cash and Cash Equivalents [Line Items] | ||
Cash Equivalents, at Carrying Value | $ 9,996 | $ 0 |
Accounts Receivable - Third Parties Accounts Receivable—Third Parties (Schedule Of Accounts Receivable) (Details) - USD ($) $ in Thousands |
Jun. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Accounts Receivable, Net [Abstract] | ||
Trade customers | $ 15,759 | $ 11,913 |
Allowance for doubtful accounts | (1,039) | (564) |
Trade Customer Receivable Net Current | 14,720 | 11,349 |
Other | 0 | 736 |
Accounts receivable, net—third parties | $ 14,720 | $ 12,085 |
Inventories (Details) - USD ($) $ in Thousands |
Jun. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Finished products | $ 4,223 | $ 3,610 |
Feedstock, additives and chemicals | 335 | 324 |
Inventories | $ 4,558 | $ 3,934 |
Property, Plant and Equipment (Detail) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
Jun. 30, 2017 |
Jun. 30, 2016 |
Dec. 31, 2016 |
|
Property, Plant and Equipment [Abstract] | |||||
Property, plant and equipment, net | $ 1,220,393 | $ 1,220,393 | $ 1,222,238 | ||
Depreciation expense on property, plant and equipment | $ 22,251 | $ 17,094 | $ 45,664 | $ 33,647 |
Other Assets (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
Jun. 30, 2017 |
Jun. 30, 2016 |
|
Other Assets [Member] | ||||
Other Assets [Line Items] | ||||
Amortization expense | $ 5,047 | $ 3,692 | $ 11,785 | $ 7,535 |
Related Party Transactions (Sales to Related Parties) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
Jun. 30, 2017 |
Jun. 30, 2016 |
|
Related Party Transaction [Line Items] | ||||
Net sales—Westlake | $ 240,989 | $ 181,635 | $ 453,919 | $ 412,895 |
Affiliated Entity [Member] | Westlake [Member] | ||||
Related Party Transaction [Line Items] | ||||
Net sales—Westlake | $ 240,989 | $ 181,635 | $ 453,919 | $ 412,895 |
Related Party Transactions (Cost of Sales from Related Parties) (Details) - Affiliated Entity [Member] - Westlake [Member] - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
Jun. 30, 2017 |
Jun. 30, 2016 |
|
Related Party Transaction [Line Items] | ||||
Charges from related parties in cost of sales | $ 131,402 | $ 71,038 | $ 253,932 | $ 157,599 |
Feedstock purchased [Member] | ||||
Related Party Transaction [Line Items] | ||||
Charges from related parties in cost of sales | 105,877 | 51,373 | 202,990 | 117,481 |
Other service charges [Member] | ||||
Related Party Transaction [Line Items] | ||||
Charges from related parties in cost of sales | $ 25,525 | $ 19,665 | $ 50,942 | $ 40,118 |
Related Party Transactions (Services from Related Parties Included in SG&A Expenses) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
Jun. 30, 2017 |
Jun. 30, 2016 |
|
Affiliated Entity [Member] | Westlake [Member] | ||||
Related Party Transaction [Line Items] | ||||
Services received from Westlake and included in selling, general and administrative expenses | $ 6,946 | $ 5,003 | $ 13,678 | $ 10,471 |
Related Party Transactions (Goods and Services from Related Parties that have been Capitalized) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
Jun. 30, 2017 |
Jun. 30, 2016 |
|
Affiliated Entity [Member] | Westlake [Member] | ||||
Related Party Transaction [Line Items] | ||||
Goods and services purchased from Westlake and capitalized as assets | $ 3,239 | $ 11,074 | $ 7,324 | $ 13,081 |
Related Party Transactions (Accounts Receivable from and Accounts Payable to Related Parties) (Details) - USD ($) $ in Thousands |
Jun. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Related Party Transaction [Line Items] | ||
Accounts payable—Westlake | $ (14,058) | $ (12,130) |
Affiliated Entity [Member] | Westlake [Member] | ||
Related Party Transaction [Line Items] | ||
Accounts receivable—Westlake, current and non-current | 79,367 | 126,977 |
Accounts payable—Westlake | $ (14,058) | $ (12,130) |
Related Party Transactions (Debt Payable to Related Parties) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
Jun. 30, 2017 |
Jun. 30, 2016 |
Dec. 31, 2016 |
|
Related Party Transaction [Line Items] | |||||
Interest on related party debt payable | $ 5,942 | $ 1,203 | $ 11,402 | $ 2,434 | |
Accrued interest on related party debt | 2,967 | 2,967 | $ 5,517 | ||
Long-term debt payable to Westlake | 588,280 | 588,280 | 594,629 | ||
Affiliated Entity [Member] | Westlake [Member] | |||||
Related Party Transaction [Line Items] | |||||
Interest capitalized | 20 | 3,050 | 418 | 5,436 | |
Other income (expense) | Affiliated Entity [Member] | Westlake [Member] | |||||
Related Party Transaction [Line Items] | |||||
Interest on related party debt payable | 5,942 | $ 1,203 | 11,402 | $ 2,434 | |
Accrued Liabilities [Member] | Affiliated Entity [Member] | Westlake [Member] | |||||
Related Party Transaction [Line Items] | |||||
Accrued interest on related party debt | $ 2,967 | $ 2,967 | $ 5,517 |
Related Party Transactions (General) (Details) $ in Thousands |
Dec. 31, 2016
USD ($)
|
---|---|
Related Party Transaction [Line Items] | |
Shortfall percentage threshold | 95.00% |
Buyer deficiency fee | $ 13,106 |
Related Party Transactions (Site Lease Agreements) (Details) - Westlake Chemical OpCo LP [Member] - Affiliated Entity [Member] - Site Lease Agreement [Member] |
6 Months Ended |
---|---|
Jun. 30, 2017
USD ($)
lease
| |
Related Party Transaction [Line Items] | |
Number of site lease agreements | lease | 2 |
Lease term | 50 years |
Operating lease rent expense | $ | $ 1 |
Accumulated Other Comprehensive (Loss) Income (Details) - Accumulated Net Gain (Loss) from Cash Flow Hedges Attributable to Parent [Member] - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
|
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Balance at beginning of period | $ 200 | $ 280 |
Interest rate contract - Other comprehensive loss before reclassification | 7 | (1,094) |
Interest rate contract - Amounts reclassified to net income | 36 | 190 |
Balance at end of period | $ 243 | $ (624) |
Derivative Instruments (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
Jun. 30, 2017 |
Jun. 30, 2016 |
Dec. 31, 2016 |
|
Derivative [Line Items] | |||||
Ineffective portion of a derivative instrument | $ 0 | $ 0 | $ 0 | ||
Interest Rate Contract [Member] | Cash Flow Hedging [Member] | |||||
Derivative [Line Items] | |||||
Change in value recognized in other comprehensive loss | 51 | 267 | (7) | $ 1,094 | |
Interest Rate Contract [Member] | Cash Flow Hedging [Member] | Deferred charges and other assets, net [Member] | |||||
Derivative [Line Items] | |||||
Asset - Interest rate contract | 299 | 299 | $ 290 | ||
Interest Rate Contract [Member] | Interest Expense [Member] | Cash Flow Hedging [Member] | |||||
Derivative [Line Items] | |||||
Loss recognized in statement of operations | $ (5) | $ (94) | $ (36) | $ (190) |
Derivative Instruments (Ineffective Portion) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |
---|---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
Jun. 30, 2017 |
|
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||
Ineffective portion of a derivative instrument | $ 0 | $ 0 | $ 0 |
Fair Value Measurements (Summary of Assets and Liabilities Accounted at Fair Value on Recurring and Nonrecurring Basis) (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2017 |
Dec. 31, 2016 |
|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate contract transfers between Level 1 and Level 2 fair value, amount | $ 0 | |
Fair Value, Measurements, Recurring [Member] | Interest Rate Contract [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Asset - Interest rate contract | 299 | $ 290 |
Fair Value, Measurements, Recurring [Member] | Interest Rate Contract [Member] | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Asset - Interest rate contract | $ 299 | $ 290 |
Supplemental Information (Details) - USD ($) $ in Thousands |
6 Months Ended | ||
---|---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
Dec. 31, 2016 |
|
Accrued Liabilities [Abstract] | |||
Accrued liabilities | $ 15,230 | $ 15,717 | |
Accrued capital expenditures | 2,776 | 2,647 | |
Accrued interest | 2,967 | 5,517 | |
Accrued taxes | 3,461 | 1,497 | |
Accrued maintenance | 2,906 | $ 2,586 | |
Increase (reduction) in capital expenditure accrual | 293 | $ (50,354) | |
Proceeds from involuntary conversion of assets | $ 1,672 | $ 0 |
Major Customer and Concentration Risk (Details) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
Jun. 30, 2017 |
Jun. 30, 2016 |
|
Net sales [Member] | Customer Concentration Risk [Member] | Westlake [Member] | Affiliated Entity [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration risk percentage of net sales | 83.10% | 86.10% | 80.00% | 89.10% |
Commitments and Contingencies (Details) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2017
USD ($)
settlement
|
Apr. 21, 2014
USD ($)
|
|
Loss Contingencies [Line Items] | ||
Number of claims settled | settlement | 2 | |
Pending Litigation [Member] | Unfavorable Regulatory Action [Member] | ||
Loss Contingencies [Line Items] | ||
Possible amount of claims in settlement for compliance violations | $ 100 | |
Settled Litigation [Member] | ||
Loss Contingencies [Line Items] | ||
Amount of settlement for compliance violations | $ 192 |
Subsequent Events (Details) - Cash Distribution [Member] - Subsequent Event [Member] $ / shares in Units, $ in Thousands |
Aug. 01, 2017
USD ($)
$ / shares
|
---|---|
IDR Holders [Member] | |
Subsequent Event [Line Items] | |
Distribution declared and paid to IDR holders | $ | $ 323 |
Common And Subordinated Units [Member] | |
Subsequent Event [Line Items] | |
Distribution declared per unit (in usd per unit) | $ / shares | $ 0.3650 |
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