Related Party Transactions

The Partnership and OpCo regularly enter into related party transactions with Westlake. See below for a description of transactions with related parties.

Sales to Related Parties

OpCo sells ethylene to Westlake under the Ethylene Sales Agreement. Additionally, the Partnership and OpCo from time to time provide other services or products for which each charges Westlake a fee.

Sales to related parties were as follows:



	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Net sales—Westlake	$	313,381	$	258,049	$	802,085	$	711,968

Cost of Sales from Related Parties

Charges for goods and services purchased by the Partnership and OpCo from Westlake and included in cost of sales relate primarily to feedstock purchased under the Feedstock Supply Agreement and services provided under the Services and Secondment Agreement.

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



	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Feedstock purchased from Westlake and included in cost of sales	$	178,493	$	110,241	$	403,833	$	313,231
Other charges from Westlake and included in cost of sales	28,693		23,954		83,636		74,896
Total	$	207,186	$	134,195	$	487,469	$	388,127

Services from Related Parties Included in Selling, General and Administrative Expenses

Charges for services purchased by the Partnership from Westlake and included in selling, general and administrative expenses primarily relate to services Westlake performs on behalf of the Partnership under the Omnibus Agreement, including the Partnership's finance, legal, information technology, human resources, communication, ethics and compliance and other administrative functions.

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



	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Services received from Westlake and included in selling, general and administrative expenses	$	4,655	$	6,633	$	17,947	$	20,311

Goods and Services from Related Parties Capitalized as Assets

Charges for goods and services purchased by the Partnership and OpCo from Westlake which were capitalized as assets relate primarily to the services of Westlake employees under the Services and Secondment Agreement.

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



	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Goods and services purchased from Westlake and capitalized as assets	$	846	$	619	$	1,988	$	3,131

Receivable under the Investment Management Agreement

On August 1, 2017, the Partnership, OpCo and Westlake executed an investment management agreement (the "Investment Management Agreement") that authorized Westlake to invest the Partnership's and OpCo’s excess cash with Westlake for a term of up to a maximum of nine months. Per the terms of the Investment Management Agreement, the Partnership earns a market return plus five basis points and Westlake provides daily availability of the invested cash to meet any liquidity needs of the Partnership or OpCo. Accrued interest of $703 and $340 was included in the receivable under the Investment Management Agreement balance at September 30, 2018 and December 31, 2017, respectively. Total interest earned related to the Investment Management Agreement was $703 and $9 for the three months ended September 30, 2018 and 2017, respectively. The interest earned related to the Investment Management Agreement was $1,861 and $9 for the nine months ended September 30, 2018 and 2017, respectively.

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



	September 30, 2018		December 31, 2017
Receivable under the Investment Management Agreement	$	151,875	$	136,510

Accounts Receivables

The Partnership's accounts receivable from Westlake result primarily from ethylene sales to Westlake under the Ethylene Sales Agreement.

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



	September 30, 2018		December 31, 2017
Accounts receivable—Westlake	$	65,628	$	43,884

Accounts Payable to Related Parties

The Partnership's accounts payable to Westlake result primarily from feedstock purchases under the Feedstock Supply Agreement and services provided under the Services and Secondment Agreement and the Omnibus Agreement.

The related party accounts payable balances were as follows:



	September 30, 2018		December 31, 2017
Accounts payable—Westlake	$	41,274	$	14,027

Debt Payable to Related Parties

See Note 9 for a description of related party debt payable balances. Interest on related party debt payable balances for the three months ended September 30, 2018 and 2017 was $5,639 and $6,190, respectively, and for the nine months ended September 30, 2018 and 2017 was $16,052 and $17,592, 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 property, plant and equipment on related party debt was $63 and $7 for the three months ended September 30, 2018 and 2017, respectively, and for the nine months ended September 30, 2018 and 2017 was $108 and $426, respectively. At September 30, 2018 and December 31, 2017, accrued interest on related party debt was $5,712 and $4,590, respectively, and is reflected as a component of accrued liabilities in the consolidated balance sheets.

Debt payable to related parties was as follows:



	September 30, 2018		December 31, 2017
Long-term debt payable to Westlake	$	477,608	$	473,960

Major Customer and Concentration of Credit Risk

During the three months ended September 30, 2018 and 2017, Westlake accounted for approximately 86.2% and 87.0%, respectively, of the Partnership's net sales. During the nine months ended September 30, 2018 and 2017, Westlake accounted for approximately 84.4% and 82.4%, respectively, of the Partnership's net sales.

Income Taxes

During the three and nine months ended September 30, 2018, the Partnership reimbursed $418 of income tax payments to Westlake.

General

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. The interest rate contract expired in August 2018.

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.