Westlake Chemical Partners LP Announces Second Quarter Earnings

Westlake Chemical Partners LP Announces Second Quarter Earnings

- Quarterly MLP distributable cash flow of $9.2 million
- Increased quarterly cash distribution by $0.0081 (2.86%) to $0.2910 per unit, announced on July 29, 2015
- Distribution coverage of 1.17x the declared distributions

HOUSTON, Aug. 4, 2015 /PRNewswire/ -- Westlake Chemical Partners LP (NYSE: WLKP) (the "Partnership") today reported second quarter 2015 net income attributable to the Partnership of $10.4 million, or $0.39 per limited partner unit, and MLP distributable cash flow of $9.2 million. Net sales at Westlake Chemical OpCo LP ("OpCo") for the period were $251.7 million. This represents an increase in net income of $1.9 million, or $0.08 per unit when compared to the first quarter of 2015. This increase was primarily driven by the acquisition in April 2015 of an additional 2.7% limited partner interest in OpCo.

OpCo's sales agreement with Westlake Chemical Corporation is designed to provide for stable and predictable cash flows. The sales agreement provides that 95% of OpCo's ethylene production is sold to Westlake Chemical Corporation for a cash margin of $0.10 per pound, net of operating costs, maintenance capital expenditures and reserves for future turnaround expenditures.

"We are pleased to report another successful quarter of operations for Westlake Partners. While we continue to operate in a lower ethylene price environment, the Partnership's sales contract with Westlake provides for stable margins and cash flows. Our planned 250 million pound expansion of our Petro 1 facility is targeted for completion in the first half of 2016. In May 2015 the Internal Revenue Service (IRS) issued proposed regulations that would have the effect of rescinding our Private Letter Ruling issued by the IRS two years ago. We believe they were correct when they issued our ruling and look forward to continuing our dialogue with the IRS and Treasury to help craft regulations that are fair and in the best interest of all stakeholders involved," said President and Chief Executive Officer Albert Chao.

On July 29, 2015, the Board of Directors of Westlake Chemical Partners GP LLC, the general partner of the Partnership, declared a quarterly distribution of $0.2910 per unit to be payable on August 27, 2015 to the unitholders of record on August 13, 2015. The MLP distributable cash flow provided coverage of 1.17x the declared distributions.

 

The statements in this release and the related teleconference relating to matters that are not historical facts, but forward-looking statements 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; changes in the price and availability of electricity; changes in prevailing economic conditions; actions of third parties; unanticipated ground, grade or water conditions; inclement or hazardous weather conditions, including flooding, and the physical impacts of climate change; environmental hazards; industrial accidents; changes in laws and regulations (or the interpretation thereof); inability to acquire or maintain necessary permits; inability to obtain necessary production equipment or replacement parts; technical difficulties or failures; labor disputes; late delivery of raw materials; difficulty collecting receivables; inability of our customers to take delivery; changes in the price and availability of transportation; fires, explosions or other accidents; our ability to borrow funds and access capital markets; and other risk factors. For more detailed information about the factors that could cause actual results to differ materially, please refer to the Partnership's Annual Report on Form 10-K for the year ended December 31, 2014, which was filed with the SEC on March 9, 2015.

This release is intended to be a qualified notice under Treasury Regulation Section 1.1446-4(b). Brokers and nominees should treat one hundred percent (100.0%) of the Partnership's distributions to non-U.S. investors as being attributable to income that is effectively connected with a United States trade or business. Accordingly, the Partnership's distributions to non-U.S. investors are subject to federal income tax withholding at the highest applicable effective tax rate.

 

Use of Non-GAAP Financial Measures

This news release includes the term MLP distributable cash flow, which is a non-GAAP financial measure, as defined in Regulation G of the U.S. Securities Exchange Act of 1934, as amended. We report our financial results in accordance with U.S. generally accepted accounting principles ("GAAP"), but believe that certain non-GAAP financial measures, such as MLP distributable cash flow, provide useful supplemental information to investors regarding the underlying business trends and performance of our ongoing operations and are useful for period-over-period comparisons of such operations. These non-GAAP financial measures should be considered as a supplement to, and not as a substitute for, or superior to, the financial measures prepared in accordance with GAAP. A reconciliation of MLP distributable cash flow to net income and net cash provided by operating activities can be found in the financial schedules at the end of this release. We define distributable cash flow as net income plus depreciation and amortization, less contributions from turnaround reserves and maintenance capital expenditures. We define MLP distributable cash flow as distributable cash flow attributable to periods subsequent to the date of our initial public offering less distributable cash flow attributable to Westlake Chemical Corporation's noncontrolling interest in Westlake Chemical OpCo LP. Because MLP distributable cash flow may be defined differently by other companies in our industry, our definition of MLP distributable cash flow may not be comparable to similarly titled measures of other companies.

 

Westlake Chemical Partners LP

Westlake Chemical Partners is a limited partnership formed by Westlake Chemical Corporation to operate, acquire and develop facilities for the processing of natural gas liquids as well as other qualifying activities. Headquartered in Houston, Texas, the Partnership owns a 13.3% interest in Westlake Chemical OpCo LP. Westlake Chemical OpCo LP's assets include three facilities in Calvert City, Kentucky, and Lake Charles, Louisiana which process ethane and propane into ethylene, and an ethylene pipeline. For more information about Westlake Chemical Partners LP, please visit http://www.wlkpartners.com/.

 

Westlake Chemical Partners LP Conference Call Information:

A conference call to discuss Westlake Chemical Partners' second quarter 2015 results will be held Tuesday, August 4, 2015 at 12:00 p.m. Eastern Time (11:00 a.m. Central Time). To access the conference call, dial (855) 638-4814 or (234) 386-2848 for international callers, approximately 10 minutes prior to the scheduled start time and reference passcode 82625222.

A replay of the conference call will be available beginning two hours after its conclusion until 11:59 p.m. Eastern Time on Friday, August 14, 2015. To hear a replay, dial (855) 859-2056, or (404) 537-3406 for international callers. The replay passcode is 82625222.

The conference call will also be available via webcast at: http://edge.media-server.com/m/p/n495uo9a/lan/en and the earnings release can be obtained via the Partnership's web page at: http://westlakepartners.investorroom.com/news-events.

 

WESTLAKE CHEMICAL PARTNERS LP ("WESTLAKE PARTNERS")

CONSOLIDATED STATEMENTS OF OPERATIONS (1)

(Unaudited)








Three Months
Ended
June 30, 2015


Six Months
Ended
June 30, 2015








(In thousands of dollars,

except per unit data)

Revenue





Net sales—Westlake Chemical Corporation ("Westlake")


$

204,669



$

413,582


Net co-product, ethylene and other sales—third parties


47,036



96,514


Total net sales


251,705



510,096


Cost of sales


157,177



319,341


Gross profit


94,528



190,755


Selling, general and administrative expenses


5,995



11,995


Income from operations


88,533



178,760


Other income (expense)





Interest expense


(1,364)



(2,740)


Other income, net


33



38


Income before income taxes


87,202



176,058


(Benefit from) provision for income taxes


(41)



426


Net income


87,243



175,632


Less: Net income attributable to noncontrolling interests in Westlake Chemical OpCo LP ("OpCo")


76,800



156,689


Net income attributable to Westlake Partners


$

10,443



$

18,943







Quarterly distribution declared per unit


$

0.2910



$

0.5739







MLP distributable cash flow


$

9,235



$

18,196







Distribution declared





Limited partner units—public


$

3,765



$

7,425


Limited partner units—Westlake


4,109



8,104


Incentive distribution rights





Total distribution declared


$

7,874



$

15,529


_____________

(1)     No comparative periods are presented as the Westlake Partners' initial public offering was on August 4, 2014.

 

WESTLAKE CHEMICAL PARTNERS LP ("WESTLAKE PARTNERS")

CONSOLIDATED BALANCE SHEETS

(Unaudited)



June 30,
 2015


December 31,
 2014








(In thousands of dollars)

ASSETS





Current assets





Cash and cash equivalents


$

137,291



$

133,750


Accounts receivable, net—Westlake


35,882



18,529


Accounts receivable, net—third parties


22,075



37,520


Inventories


3,856



6,634


Prepaid expenses and other current assets


30



212


Total current assets


199,134



196,645


Property, plant and equipment, net


914,270



842,057


Other assets, net


50,018



57,733


Total assets


$

1,163,422



$

1,096,435







LIABILITIES AND EQUITY





Current liabilities (accounts payable and accrued liabilities)


$

54,397



$

31,984


Long-term debt payable to Westlake


280,992



227,638


Other liabilities


1,649



1,863


Total liabilities


337,038



261,485


Common unitholders—public


292,216



290,377


Common unitholder—Westlake


4,242



4,038


Subordinated unitholder—Westlake


37,484



35,681


General partner—Westlake


(242,572)



(242,572)


Total Westlake Chemical Partners LP partners' capital


91,370



87,524


Noncontrolling interest in OpCo


735,014



747,426


Total equity


826,384



834,950


Total liabilities and equity


$

1,163,422



$

1,096,435


 

WESTLAKE CHEMICAL PARTNERS LP ("WESTLAKE PARTNERS")

CONSOLIDATED STATEMENT OF CASH FLOWS (1)

(Unaudited)



Six Months
Ended
June 30, 2015






(In thousands

of dollars)

Cash flows from operating activities



Net income


$

175,632


Adjustments to reconcile net income to net cash provided by operating activities:



Depreciation and amortization


40,195


Other balance sheet changes


14,072


Net cash provided by operating activities


229,899


Cash flows from investing activities



Additions to property, plant and equipment


(95,514)


Net cash used for investing activities


(95,514)


Cash flows from financing activities



Proceeds from debt payable to Westlake


188,695


Repayment of debt payable to Westlake


(135,341)


Quarterly distributions to noncontrolling interest retained in OpCo by Westlake


(169,101)


Quarterly distributions to unitholders


(15,097)


Net cash used for financing activities


(130,844)


Net increase in cash and cash equivalents


3,541


Cash and cash equivalents at beginning of period


133,750


Cash and cash equivalents at end of period


$

137,291


_____________

(1)     No comparative period is presented as the Westlake Partners' initial public offering was on August 4, 2014.

 

WESTLAKE CHEMICAL PARTNERS LP ("WESTLAKE PARTNERS")

RECONCILIATIONS OF MLP DISTRIBUTABLE CASH FLOW TO NET INCOME

AND NET CASH PROVIDED BY OPERATING ACTIVITIES

(Unaudited)




Three Months
Ended
March 31, 2015


Three Months
Ended
June 30, 2015


Six Months
Ended
June 30, 2015










(In thousands of dollars)

MLP distributable cash flow


$

8,961



$

9,235



$

18,196


Add:







Distributable cash flow attributable to noncontrolling interests in OpCo


83,824



68,908



152,732


Maintenance capital expenditures


8,286



22,515



30,801


Contribution to turnaround reserves


7,121



6,977



14,098


Less:







Depreciation and amortization


(19,803)



(20,392)



(40,195)


Net income for the period


88,389



87,243



175,632


Depreciation and amortization


19,803



20,392



40,195


Other balance sheet changes


5,043



9,029



14,072


Net cash provided by operating activities


$

113,235



$

116,664



$

229,899


 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/westlake-chemical-partners-lp-announces-second-quarter-earnings-300122079.html

SOURCE Westlake Chemical Partners LP

- (713) 585-2900, Investors - Steve Bender, Media - David R. Hansen

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