Fourth quarter 2018 net income attributable to the Partnership was
Net income attributable to the Partnership of
On
On
OpCo's Ethylene Sales Agreement with Westlake is designed to provide for
stable and predictable cash flows. The agreement provides that 95% of
OpCo's ethylene production is sold to Westlake for a cash margin of
"We are pleased with the Partnership's performance in 2018. As we enter
2019, we are continuing to reap benefits of the investments made over
the past few years to grow our earnings, cash flows and production,
including the expansion of OpCo’s ethylene facilities in both
The statements in this release and the related teleconference
relating to matters that are not historical facts, such as those with
respect to increasing distributions, the potential for future drop-down
transaction and the timing of the next IDR payment are forward-looking
statements. These forward-looking statements are subject to significant
risks and uncertainties. Actual results could differ materially, based
on factors including, but not limited to, 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
feedstocks; changes in prevailing economic conditions; actions of
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 release makes reference to certain "non-GAAP" financial measures, such as MLP distributable cash flow and EBITDA, 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 and EBITDA, 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 and EBITDA 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, amortization and disposition of property, plant and equipment, less contributions from turnaround reserves and maintenance capital expenditures. We define MLP distributable cash flow as distributable cash flow less distributable cash flow attributable to Westlake's noncontrolling interest in OpCo and distributions attributable to the incentive distribution rights holder. MLP distributable cash flow does not reflect changes in working capital balances. We define EBITDA as net income before interest expense, income taxes, depreciation and amortization. Because MLP distributable cash flow and EBITDA may be defined differently by other companies in our industry, our definitions of MLP distributable cash flow and EBITDA may not be comparable to similarly titled measures of other companies.
Westlake Chemical Partners LP Conference Call Information:
A conference call to discuss
A replay of the conference call will be available beginning two hours
after its conclusion until
The conference call will also be available via webcast at: https://edge.media-server.com/m6/p/x5mphzie and the earnings release can be obtained via the Partnership web page at: http://investors.wlkpartners.com/CorporateProfile.
WESTLAKE CHEMICAL PARTNERS LP ("WESTLAKE PARTNERS") | |||||||||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||
Three Months Ended December 31, |
Twelve Months Ended December 31, |
||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||||||
(In thousands of dollars, except per unit data) | |||||||||||||||||||||
Revenue | |||||||||||||||||||||
Net sales—Westlake Chemical Corporation ("Westlake") | $ | 272,872 | $ | 261,113 | $ | 1,074,957 | $ | 973,081 | |||||||||||||
Net co-product, ethylene and other sales—third parties | 62,853 | 47,532 | 210,665 | 199,900 | |||||||||||||||||
Total net sales | 335,725 | 308,645 | 1,285,622 | 1,172,981 | |||||||||||||||||
Cost of sales | 242,096 | 197,913 | 908,463 | 769,314 | |||||||||||||||||
Gross profit | 93,629 | 110,732 | 377,159 | 403,667 | |||||||||||||||||
Selling, general and administrative expenses | 7,173 | 7,741 | 27,590 | 29,260 | |||||||||||||||||
Income from operations | 86,456 | 102,991 | 349,569 | 374,407 | |||||||||||||||||
Other income (expense) | |||||||||||||||||||||
Interest expense—Westlake | (5,381 | ) | (4,269 | ) | (21,433 | ) | (21,861 | ) | |||||||||||||
Other income (expense), net | 715 | (52 | ) | 2,457 | 1,792 | ||||||||||||||||
Income before income taxes | 81,790 | 98,670 | 330,593 | 354,338 | |||||||||||||||||
Provision for income taxes | 208 | 355 | 22 | 1,280 | |||||||||||||||||
Net income | 81,582 | 98,315 | 330,571 | 353,058 | |||||||||||||||||
Less: Net income attributable to noncontrolling interests in |
|||||||||||||||||||||
Westlake Chemical OpCo LP ("OpCo") |
69,699 | 82,769 | 281,224 | 304,388 | |||||||||||||||||
Net income attributable to Westlake Partners | $ | 11,883 | $ | 15,546 | $ | 49,347 | $ | 48,670 | |||||||||||||
Net income per limited partner unit attributable to |
|||||||||||||||||||||
Westlake Partners (basic and diluted) | |||||||||||||||||||||
Common units | $ | 0.37 | $ | 0.46 | $ | 1.51 | $ | 1.72 | |||||||||||||
Subordinated units | $ | — | $ | — | $ | — | $ | 1.43 | |||||||||||||
Distributions declared per unit | $ | 0.4328 | $ | 0.3864 | $ | 1.6598 | $ | 1.4819 | |||||||||||||
MLP distributable cash flow | $ | 14,524 | $ | 16,808 | $ | 60,024 | $ | 54,700 | |||||||||||||
Distribution declared | |||||||||||||||||||||
Limited partner units—public | $ | 7,845 | $ | 6,999 | $ | 30,077 | $ | 23,114 | |||||||||||||
Limited partner units—Westlake | 6,112 | 5,457 | 23,439 | 20,928 | |||||||||||||||||
Incentive distribution rights | — | 614 | 733 | 1,666 | |||||||||||||||||
Total distribution declared | $ | 13,957 | $ | 13,070 | $ | 54,249 | $ | 45,708 | |||||||||||||
EBITDA | $ | 113,837 | $ | 130,422 | $ | 460,868 | $ | 490,184 | |||||||||||||
WESTLAKE CHEMICAL PARTNERS LP ("WESTLAKE PARTNERS") | |||||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||||
(Unaudited) | |||||||||||
December 31, 2018 |
December 31, 2017 |
||||||||||
(In thousands of dollars) | |||||||||||
ASSETS | |||||||||||
Current assets | |||||||||||
Cash and cash equivalents | $ | 19,744 | $ | 27,008 | |||||||
Receivable under the Investment Management Agreement— | |||||||||||
Westlake Chemical Corporation ("Westlake") | 148,956 | 136,510 | |||||||||
Accounts receivable, net—Westlake | 57,280 | 43,884 | |||||||||
Accounts receivable, net—third parties | 16,404 | 18,083 | |||||||||
Inventories | 4,388 | 5,590 | |||||||||
Prepaid expenses and other current assets | 370 | 314 | |||||||||
Total current assets | 247,142 | 231,389 | |||||||||
Property, plant and equipment, net | 1,148,265 | 1,196,245 | |||||||||
Other assets, net | 66,718 | 87,642 | |||||||||
Total assets | $ | 1,462,125 | $ | 1,515,276 | |||||||
LIABILITIES AND EQUITY | |||||||||||
Current liabilities (accounts payable and accrued liabilities) | $ | 48,772 | $ | 40,240 | |||||||
Long-term debt payable to Westlake | 477,608 | 473,960 | |||||||||
Other liabilities | 1,664 | 2,327 | |||||||||
Total liabilities | 528,044 | 516,527 | |||||||||
Common unitholders—public | 409,608 | 411,228 | |||||||||
Common unitholder—Westlake | 48,774 | 50,265 | |||||||||
Subordinated unitholder—Westlake | — | — | |||||||||
General partner—Westlake | (242,572 | ) | (241,958 | ) | |||||||
Accumulated other comprehensive income | — | 279 | |||||||||
Total Westlake Partners partners' capital | 215,810 | 219,814 | |||||||||
Noncontrolling interest in OpCo | 718,271 | 778,935 | |||||||||
Total equity | 934,081 | 998,749 | |||||||||
Total liabilities and equity | $ | 1,462,125 | $ | 1,515,276 | |||||||
WESTLAKE CHEMICAL PARTNERS LP ("WESTLAKE PARTNERS") | |||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||
(Unaudited) | |||||||||||
Twelve Months Ended December 31, |
|||||||||||
2018 | 2017 | ||||||||||
(In thousands of dollars) | |||||||||||
Cash flows from operating activities | |||||||||||
Net income | $ | 330,571 | $ | 353,058 | |||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 108,842 | 113,985 | |||||||||
Other balance sheet changes | (3,262 | ) | 70,314 | ||||||||
Net cash provided by operating activities | 436,151 | 537,357 | |||||||||
Cash flows from investing activities | |||||||||||
Additions to property, plant and equipment | (39,862 | ) | (68,858 | ) | |||||||
Maturities of investments with Westlake under the Investment Management Agreement | 372,050 | 62,828 | |||||||||
Investments with Westlake under the Investment Management Agreement | (384,000 | ) | (199,000 | ) | |||||||
Other | — | 1,801 | |||||||||
Net cash used for investing activities | (51,812 | ) | (203,229 | ) | |||||||
Cash flows from financing activities | |||||||||||
Net proceeds from common unit offering | — | 110,698 | |||||||||
Proceeds from debt payable to Westlake | 3,648 | 165,257 | |||||||||
Repayment of debt payable to Westlake | — | (285,926 | ) | ||||||||
Quarterly distributions to noncontrolling interest retained in OpCo by Westlake | (341,888 | ) | (343,932 | ) | |||||||
Quarterly distributions to unitholders | (53,363 | ) | (42,117 | ) | |||||||
Net cash used for financing activities | (391,603 | ) | (396,020 | ) | |||||||
Net decrease in cash and cash equivalents | (7,264 | ) | (61,892 | ) | |||||||
Cash and cash equivalents at beginning of the year | 27,008 | 88,900 | |||||||||
Cash and cash equivalents at end of the year | $ | 19,744 | $ | 27,008 | |||||||
WESTLAKE CHEMICAL PARTNERS LP ("WESTLAKE PARTNERS") | ||||||||||||||||||||||||||
RECONCILIATION OF MLP DISTRIBUTABLE CASH FLOW TO NET INCOME | ||||||||||||||||||||||||||
AND NET CASH PROVIDED BY OPERATING ACTIVITIES | ||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||
Three Months |
Three Months Ended December 31, |
Twelve Months Ended December 31, |
||||||||||||||||||||||||
2018 | 2018 | 2017 | 2018 | 2017 | ||||||||||||||||||||||
(In thousands of dollars) | ||||||||||||||||||||||||||
Net cash provided by |
||||||||||||||||||||||||||
operating activities | $ | 109,433 | $ | 106,147 | $ | 135,441 | $ | 436,151 | $ | 537,357 | ||||||||||||||||
Changes in operating assets and |
||||||||||||||||||||||||||
liabilities and other | (25,634 | ) | (24,565 | ) | (37,126 | ) | (105,580 | ) | (184,299 | ) | ||||||||||||||||
Net Income | $ | 83,799 | $ | 81,582 | $ | 98,315 | $ | 330,571 | $ | 353,058 | ||||||||||||||||
Add: | ||||||||||||||||||||||||||
Depreciation, amortization and |
||||||||||||||||||||||||||
disposition of property, plant and |
||||||||||||||||||||||||||
equipment | 26,918 | 27,922 | 27,889 | 110,691 | 117,128 | |||||||||||||||||||||
Mark-to-market adjustment loss on |
||||||||||||||||||||||||||
derivative contracts | — | 62 | — | 62 | — | |||||||||||||||||||||
Less: | ||||||||||||||||||||||||||
Contribution to turnaround | ||||||||||||||||||||||||||
reserves |
(4,250 | ) | (4,238 | ) | (7,939 | ) | (16,840 | ) | (30,580 | ) | ||||||||||||||||
Maintenance capital expenditures | (8,380 | ) | (9,297 | ) | (9,694 | ) | (31,481 | ) | (37,775 | ) | ||||||||||||||||
Incentive distribution rights | — | — | (614 | ) | (733 | ) | (1,666 | ) | ||||||||||||||||||
Distributable cash flow attributable |
||||||||||||||||||||||||||
to noncontrolling interest in | ||||||||||||||||||||||||||
OpCo | (83,063 | ) | (81,507 | ) | (91,149 | ) | (332,246 | ) | (345,465 | ) | ||||||||||||||||
MLP distributable cash flow | $ | 15,024 | $ | 14,524 | $ | 16,808 | $ | 60,024 | $ | 54,700 | ||||||||||||||||
WESTLAKE CHEMICAL PARTNERS LP ("WESTLAKE PARTNERS") | ||||||||||||||||||||||||||
RECONCILIATION OF EBITDA TO NET INCOME AND NET CASH | ||||||||||||||||||||||||||
PROVIDED BY OPERATING ACTIVITIES | ||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||
Three Months |
Three Months Ended December 31, |
Twelve Months Ended December 31, |
||||||||||||||||||||||||
2018 | 2018 | 2017 | 2018 | 2017 | ||||||||||||||||||||||
(In thousands of dollars) | ||||||||||||||||||||||||||
Net cash provided by |
||||||||||||||||||||||||||
operating activities | $ | 109,433 | $ | 106,147 | $ | 135,441 | $ | 436,151 | $ | 537,357 | ||||||||||||||||
Changes in operating assets and |
||||||||||||||||||||||||||
liabilities and other | (25,634 | ) | (24,565 | ) | (37,126 | ) | (105,580 | ) | (184,299 | ) | ||||||||||||||||
Net Income | $ | 83,799 | $ | 81,582 | $ | 98,315 | $ | 330,571 | $ | 353,058 | ||||||||||||||||
Add: | ||||||||||||||||||||||||||
Depreciation and amortization | 26,892 | 26,666 | 27,483 | 108,842 | 113,985 | |||||||||||||||||||||
Interest expense | 5,639 | 5,381 | 4,269 | 21,433 | 21,861 | |||||||||||||||||||||
Income tax provision (benefit) | (772 | ) | 208 | 355 | 22 | 1,280 | ||||||||||||||||||||
EBITDA | $ | 115,558 | $ | 113,837 | $ | 130,422 | $ | 460,868 | $ | 490,184 |
View source version on businesswire.com: https://www.businesswire.com/news/home/20190219005289/en/
Source:
Investors—Steve Bender—(713) 585-2900
Media—L. Benjamin
Ederington—(713) 585-2900