Distributions and Net Income Per Limited Partner Unit

12 Months Ended

Dec. 31, 2019

Distributions and Net Income Per Limited Partner Unit

On January 24, 2020, 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 October 1, 2019 to December 31, 2019 of $0.4714 per common unit. This distribution was paid on February 18, 2020 to unitholders of record on February 3, 2020.

Distributions are declared subsequent to quarter end; therefore, the table below represents total cash distributions declared from earnings of the related periods pertaining to such distributions.



	Year Ended December 31
	2019			2018			2017
Net income attributable to the Partnership	$	60,981		$	49,347		$	48,670
Less:
Limited partners' distribution declared on common units	64,718			53,516			34,909
Limited partners' distribution declared on subordinated units	—			—			9,133
Distributions declared with respect to the incentive distribution rights	—			733			1,666
(Distribution in excess of net income) net income in excess of distribution	$	(3,737	)	$	(4,902	)	$	2,962

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 statements of changes in 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.

As discussed further in Note 10, the 12,686,115 subordinated units, all of which were owned by Westlake, were converted into common units effective August 30, 2017. For purposes of calculating net income per unit, the subordinated units were treated as if they had been converted to common units on July 1, 2017. Therefore, the subordinated units did not share in the distribution of cash generated from July 1, 2017 to December 31, 2017, and the Partnership did not allocate any earnings to the subordinated unitholders from July 1, 2017 to December 31, 2017 for the determination of net income per unit.



	December 31, 2019
	Limited Partners' Common Units			Incentive Distribution Rights		Total
Net income attributable to the Partnership:
Distribution	$	64,718		$	—	$	64,718
Distribution in excess of net income	(3,737		)	—		(3,737		)
Net income	$	60,981		$	—	$	60,981
Weighted average units outstanding:
Basic and diluted	34,488,058					34,488,058
Net income per limited partner unit:
Basic and diluted	$	1.77



	December 31, 2018
	Limited Partners' Common Units			Incentive Distribution Rights		Total
Net income attributable to the Partnership:
Distribution	$	53,516		$	733	$	54,249
Distribution in excess of net income	(4,902		)	—		(4,902		)
Net income	$	48,614		$	733	$	49,347
Weighted average units outstanding:
Basic and diluted	32,240,858					32,240,858
Net income per limited partner unit:
Basic and diluted	$	1.51



	December 31, 2017
	Limited Partners' Common Units		Limited Partners' Subordinated Units			Incentive Distribution Rights		Total
Net income attributable to the Partnership:
Distribution	$	34,909	$	9,133		$	1,666	$	45,708
(Distribution in excess of net income) net income in excess of distribution	3,101		(139		)	—		2,962
Net income	$	38,010	$	8,994		$	1,666	$	48,670
Weighted average units outstanding:
Basic and diluted	22,101,547		6,290,923					28,392,470
Net income per limited partner unit:
Basic and diluted	$	1.72	$	1.43

The amended Partnership Agreement provides that the Partnership will distribute cash each quarter to all the unitholders, pro rata, until each unit has received a distribution of $1.2938. If cash distributions to the Partnership's unitholders exceed $1.2938 per common 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:



	Marginal Percentage Interest in Distributions
Total Quarterly Distribution Per Unit	Unitholders		IDR Holders
Above $1.2938 up to $1.4063	85.0	%	15.0	%
Above $1.4063 up to $1.6875	75.0	%	25.0	%
Above $1.6875	50.0	%	50.0	%

The Partnership's distribution for the three months ended December 31, 2019 did not exceed the $1.2938 per unit threshold, and, as a result, no distribution was made with respect to the Partnership's incentive distribution rights to Westlake, as the holder of the Partnership' incentive distribution rights.

Distribution Per Common Unit

Distributions per common unit for the years ended December 31, 2018, 2018 and 2017 were as follows:



	Year Ended December 31,
	2019		2018		2017
Distributions per common unit	$	1.8005	$	1.6134	$	1.4405