| 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 Ethylene Sales Agreement. Additionally, each of the Partnership and OpCo from time to time provide other services or products for which it charges Westlake a fee. Prior to the IPO, the Predecessor sold the majority of its ethylene to Westlake for use in Westlake's downstream operations. Sales to related parties were as follows: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Net sales—Westlake $ 207,856 $ 289,601 $ 621,438 $ 1,088,561 Cost of Sales from Related Parties Charges for goods and services purchased by the Partnership and OpCo from Westlake and included in cost of sales relate primarily to feedstock purchased under the Feedstock Supply Agreement and services provided under the Services and Secondment Agreement. Prior to the IPO, services provided by Westlake and included in cost of sales related primarily to services provided by employees of Westlake Management Services, Inc., a subsidiary of Westlake. The cost of services provided by employees of Westlake Management Services, Inc. was allocated to the Predecessor's operations primarily on the basis of direct usage. Charges from related parties in cost of sales were as follows: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Feedstock purchased from Westlake and included in cost of sales $ 75,752 $ 63,108 $ 232,584 $ 63,108 Other charges from Westlake and included in cost of sales 20,457 13,879 53,948 47,000 Total $ 96,209 $ 76,987 $ 286,532 $ 110,108 Services from Related Parties Included in Selling, General and Administrative Expenses Charges for services purchased by the Partnership from Westlake and included in selling, general and administrative expenses primarily relate to services Westlake performs on behalf of the Partnership under the Omnibus Agreement, including the Partnership's finance, legal, information technology, human resources, communication, ethics and compliance, and other administrative functions. Prior to the IPO, the Predecessor was allocated costs incurred by Westlake on its behalf for similar functions. These allocations were based primarily on the basis of direct usage when identifiable, with the remainder allocated on the basis of fixed assets, headcount or other measure. Management believes the allocations of expenses incurred by Westlake on the Predecessor's behalf are reasonable and reflect all costs related to the operations of the Predecessor. Nevertheless, the financial information of the Predecessor may not have included all of the expenses that would have been incurred had the Predecessor been a stand-alone company during the periods prior to the IPO. Charges from related parties included within selling, general and administrative expenses were as follows: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Services received from Westlake and included in selling, general and administrative expenses $ 4,772 $ 4,283 $ 14,891 $ 15,901 Goods and Services from Related Parties Capitalized as Assets Charges for goods and services purchased by the Partnership and OpCo from Westlake which were capitalized as assets relate primarily to the services of Westlake employees under the Services and Secondment Agreement. Prior to the IPO, salaries and benefits of Westlake Management Services, Inc. were allocated to the Predecessor primarily on the basis of direct usage. Charges from related parties for goods and services capitalized as assets were as follows: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Goods and services purchased from Westlake and capitalized as assets $ 1,304 $ 830 $ 3,241 $ 2,074 Accounts Receivable from and Accounts Payable to Related Parties The Partnership's accounts receivable from Westlake result primarily from ethylene sales to Westlake under the Ethylene Sales Agreement. The Partnership's accounts payable to Westlake result primarily from feedstock purchases under the Feedstock Supply Agreement and services provided under the Services and Secondment Agreement and the Omnibus Agreement. The related party accounts receivable and accounts payable balances were as follows: September 30, December 31, Accounts receivable, net—Westlake $ 44,035 $ 18,529 Accounts payable—Westlake (9,288 ) (7,470 ) Debt Payable to Related Parties OpCo assumed promissory notes payable to Westlake and entered into a senior unsecured revolving credit facility with Westlake in connection with the IPO. Prior to the IPO, the Predecessor funded certain capital expenditures through promissory notes payable to Westlake, a portion of which were assumed by the Partnership in connection with the IPO. See Note 9 for description of related party debt payable balances. Interest on related party debt payable balances for the three months ended September 30, 2015 and 2014 were $1,054 and $2,137 , respectively, and for the nine months ended September 30, 2015 and 2014 were $3,794 and $9,833 , respectively, and are reflected as a component of other income (expense) in the combined and consolidated statements of operations. Interest capitalized as a component of property, plant and equipment on related party debt was $1,284 for the three months ended September 30, 2015 and $3,394 for the nine months ended September 30, 2015 . At September 30, 2015 and December 31, 2014 , accrued interest on related party debt was $2,284 and $2,403 , 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, December 31, Long-term debt payable to Westlake $ 330,495 $ 227,638 General OpCo, together with other subsidiaries of Westlake not included in these combined and consolidated financial statements, is a guarantor under Westlake's revolving credit facility and the indentures governing its senior notes. As of September 30, 2015 and December 31, 2014 , Westlake had outstanding letters of credit totaling $29,953 and $31,392 under its revolving credit facility and $754,000 and $754,000 outstanding under its senior notes (less the unamortized discount of $803 and $892 ), respectively. The indentures governing Westlake's senior notes prevent OpCo from making distributions to the Partnership if any default or event of default (as defined in the indentures) exists. However, Westlake's credit facility does not prevent OpCo from making distributions to the Partnership. During August 2015, the Partnership entered into an interest rate contract with Westlake to fix the 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 entered into two site lease agreements with Westlake in connection with the IPO, and each has a term of 50 years. Pursuant to the site lease agreements, OpCo pays Westlake one dollar per site per year. |
