HOUSTON, Feb. 23, 2016 /PRNewswire/ -- Westlake
Chemical Partners LP (NYSE: WLKP) (the "Partnership") today
reported net income attributable to the Partnership of $10.8 million, or $0.40 per limited partner unit, for the three
months ended December 31, 2015, an
increase of $2.2 million when
compared with fourth quarter 2014 net income attributable to the
Partnership of $8.6 million. For the
three months ended December 31, 2015,
MLP distributable cash flow was $10.1
million, an increase of $1.6
million compared to fourth quarter 2014 MLP distributable
cash flow of $8.5 million. The
increase in net income attributable to the Partnership and MLP
distributable cash flow compared to the fourth quarter 2014 is
primarily due to the purchase of an additional 2.7% interest in
Westlake Chemical OpCo LP ("OpCo") by the Partnership on
April 1, 2015.
The Partnership's fourth quarter 2015 net income of $10.8 million, or $0.40 per limited partner unit, increased by
$0.7 million from the third quarter
2015 net income of $10.1 million, or
$0.37 per limited partner unit.
Fourth quarter 2015 MLP distributable cash flow of $10.1 million increased by $0.6 million when compared to third quarter 2015
MLP distributable cash flow of $9.5
million, largely due to increased production at the
Partnership's ethylene facilities.
For the full year 2015, net income attributable to the
Partnership was $39.8 million, or
$1.47 per limited partner unit. MLP
distributable cash flow for the full year 2015 was $37.7 million.
On February 1, 2016, the Board of
Directors of Westlake Chemical Partners GP LLC, the general partner
of the Partnership, announced a quarterly distribution of
$0.3080 per unit to be payable on
February 26, 2016 to unitholders of record on
February 11, 2016. The MLP distributable cash flow
provided coverage of 1.21x the declared distributions for the
fourth quarter 2015. For the full year 2015, MLP distributable cash
flow of $37.7 million provided
coverage of 1.18x the declared distributions during the year. The
increase in cash distributions is in line with the Partnership's
targeted low double-digit distribution growth.
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 very pleased with the fourth quarter and full year
results for 2015, our first full year in operation since our IPO in
August 2014. While we have seen a
significant decrease in the price of ethylene, OpCo's long-term
fixed margin ethylene sales agreement with our sponsor, Westlake
Chemical Corporation, is not subject to the volatility in the oil
and ethylene markets. The expansion of our Petro 1 facility in
Lake Charles, Louisiana, which is
planned for completion in the first half of 2016, is expected to
add 250 million pounds of ethylene capacity. In addition, our
recently announced expansion at our Calvert City, Kentucky facility scheduled for
completion in the first half of 2017 and other incremental capacity
increases will add 100 million pounds of annual ethylene capacity.
We believe these projects will allow us to continue on our targeted
low double-digit growth rate without the need to purchase any
additional interest in OpCo," said Albert
Chao, President and Chief Executive Officer.
The statements in this release and the related teleconference
relating to matters that are not historical facts, such as
statements regarding targeted growth and timing and results of
expansion projects, 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
electricity; changes in prevailing economic conditions; actions of
Westlake Chemical Corporation; 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
in March 2015, and the risk factors in our other filings with
the SEC.
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 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' fourth
quarter and full year 2015 results will be held Tuesday, February 23, 2016 at 12:00 p.m.
Eastern Time (11:00 a.m. Central
Time). To access the conference call, dial (855) 765-5686 or
(234) 386-2848 for international callers, approximately 10 minutes
prior to the scheduled start time and reference passcode
41990126.
A replay of the conference call will be available beginning two
hours after its conclusion until 11:59 p.m. Eastern Time on
Tuesday, March 1, 2016. To hear a
replay, dial (855) 859-2056 or (404) 537-3406 for international
callers. The replay passcode is 41990126.
The conference call will also be available via webcast at:
http://edge.media-server.com/m/p/t4vne8tg and the earnings
release can be obtained via the Partnership web page at:
http://westlakepartners.investorroom.com/news-events
WESTLAKE CHEMICAL
PARTNERS LP ("WESTLAKE PARTNERS")
|
|
CONSOLIDATED AND
COMBINED STATEMENTS OF OPERATIONS
|
(Unaudited)
|
|
|
|
Three Months Ended
December 31,
|
|
Twelve Months
Ended December 31,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
(1)(2)
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands of
dollars, except per unit data)
|
Revenue
|
|
|
|
|
|
|
|
|
Net sales—Westlake
Chemical Corporation
("Westlake")
|
|
$
|
213,480
|
|
|
$
|
203,528
|
|
|
$
|
834,918
|
|
|
$
|
1,292,089
|
|
Net co-product,
ethylene and other sales—third
parties
|
|
35,026
|
|
|
70,015
|
|
|
172,303
|
|
|
457,611
|
|
Total net
sales
|
|
248,506
|
|
|
273,543
|
|
|
1,007,221
|
|
|
1,749,700
|
|
Cost of
sales
|
|
150,524
|
|
|
171,584
|
|
|
624,339
|
|
|
1,003,888
|
|
Gross
profit
|
|
97,982
|
|
|
101,959
|
|
|
382,882
|
|
|
745,812
|
|
Selling, general and
administrative expenses
|
|
5,724
|
|
|
6,453
|
|
|
23,550
|
|
|
29,256
|
|
Income from
operations
|
|
92,258
|
|
|
95,506
|
|
|
359,332
|
|
|
716,556
|
|
Other income
(expense)
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
(1,173)
|
|
|
(666)
|
|
|
(4,967)
|
|
|
(10,499)
|
|
Other income,
net
|
|
195
|
|
|
16
|
|
|
160
|
|
|
3,151
|
|
Income before income
taxes
|
|
91,280
|
|
|
94,856
|
|
|
354,525
|
|
|
709,208
|
|
Provision for income
taxes
|
|
105
|
|
|
927
|
|
|
672
|
|
|
199,388
|
|
Net income
|
|
91,175
|
|
|
93,929
|
|
|
353,853
|
|
|
509,820
|
|
Less: Predecessor net
income prior to initial public
offering
on August 4, 2014
|
|
—
|
|
|
—
|
|
|
—
|
|
|
361,334
|
|
Less: Net income
attributable to noncontrolling
interests in Westlake Chemical OpCo LP
("OpCo")
|
|
80,390
|
|
|
85,367
|
|
|
314,022
|
|
|
134,909
|
|
Net income
attributable to Westlake Partners
|
|
$
|
10,785
|
|
|
$
|
8,562
|
|
|
$
|
39,831
|
|
|
$
|
13,577
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to Westlake Partners per
common
unit (basic and diluted) (3)
|
|
$
|
0.40
|
|
|
$
|
0.32
|
|
|
$
|
1.47
|
|
|
$
|
0.50
|
|
|
|
|
|
|
|
|
|
|
Distributions
declared per unit
|
|
$
|
0.3080
|
|
|
$
|
0.2750
|
|
|
$
|
1.1813
|
|
|
$
|
0.4454
|
|
|
|
|
|
|
|
|
|
|
MLP distributable
cash flow
|
|
$
|
10,059
|
|
|
$
|
8,547
|
|
|
$
|
37,730
|
|
|
$
|
13,812
|
|
|
|
|
|
|
|
|
|
|
Distribution
declared
|
|
|
|
|
|
|
|
|
Limited partner
units—public
|
|
$
|
3,985
|
|
|
$
|
3,557
|
|
|
$
|
15,283
|
|
|
$
|
5,762
|
|
Limited partner
units—Westlake
|
|
4,350
|
|
|
3,884
|
|
|
16,683
|
|
|
6,290
|
|
Total distribution
declared
|
|
$
|
8,335
|
|
|
$
|
7,441
|
|
|
$
|
31,966
|
|
|
$
|
12,052
|
|
|
|
(1)
|
Westlake Partners'
initial public offering ("IPO") was on August 4,
2014.
|
(2)
|
Includes amounts for
the pre-IPO period from January 1, 2014 through August 3,
2014 and post-IPO period from August 4, 2014 through December
31, 2014.
|
(3)
|
Net income per common
unit for the twelve months ended December 31, 2014 is based on the
net income subsequent to the IPO, being the period from
August 4, 2014 through December 31, 2014.
|
WESTLAKE CHEMICAL
PARTNERS LP ("WESTLAKE PARTNERS")
|
|
CONSOLIDATED
BALANCE SHEETS
|
(Unaudited)
|
|
|
|
December 31,
2015
|
|
December 31,
2014
|
|
|
|
|
|
|
|
(In thousands of
dollars)
|
ASSETS
|
|
|
|
|
Current
assets
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
169,559
|
|
|
$
|
133,750
|
|
Accounts receivable,
net—Westlake
|
|
39,655
|
|
|
18,529
|
|
Accounts receivable,
net—third parties
|
|
11,927
|
|
|
37,520
|
|
Inventories
|
|
3,879
|
|
|
6,634
|
|
Prepaid expenses and
other current assets
|
|
267
|
|
|
212
|
|
Total current
assets
|
|
225,287
|
|
|
196,645
|
|
Property, plant and
equipment, net
|
|
1,020,469
|
|
|
842,057
|
|
Other assets,
net
|
|
44,593
|
|
|
57,733
|
|
Total
assets
|
|
$
|
1,290,349
|
|
|
$
|
1,096,435
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
Current liabilities
(accounts payable and accrued liabilities)
|
|
$
|
57,694
|
|
|
$
|
31,984
|
|
Long-term debt
payable to Westlake
|
|
384,006
|
|
|
227,638
|
|
Other
liabilities
|
|
1,482
|
|
|
1,863
|
|
Total
liabilities
|
|
443,182
|
|
|
261,485
|
|
Common
unitholders—public
|
|
294,565
|
|
|
290,377
|
|
Common
unitholder—Westlake
|
|
4,502
|
|
|
4,038
|
|
Subordinated
unitholder—Westlake
|
|
39,786
|
|
|
35,681
|
|
General
partner—Westlake
|
|
(242,572)
|
|
|
(242,572)
|
|
Accumulated other
comprehensive income
|
|
280
|
|
|
—
|
|
Total Westlake
Partners partners' capital
|
|
96,561
|
|
|
87,524
|
|
Noncontrolling
interest in OpCo
|
|
750,606
|
|
|
747,426
|
|
Total
equity
|
|
847,167
|
|
|
834,950
|
|
Total liabilities
and equity
|
|
$
|
1,290,349
|
|
|
$
|
1,096,435
|
|
WESTLAKE CHEMICAL
PARTNERS LP ("WESTLAKE PARTNERS")
|
|
CONSOLIDATED AND
COMBINED STATEMENTS OF CASH FLOWS
|
(Unaudited)
|
|
|
|
Twelve Months
Ended December 31,
|
|
|
2015
|
|
2014
(1)(2)
|
|
|
|
|
|
|
|
(In thousands of
dollars)
|
Cash flows from
operating activities
|
|
|
|
|
Net income
|
|
$
|
353,853
|
|
|
$
|
509,820
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
|
81,210
|
|
|
77,611
|
|
Other balance sheet
changes
|
|
17,479
|
|
|
16,581
|
|
Net cash provided by
operating activities
|
|
452,542
|
|
|
604,012
|
|
Cash flows from
investing activities
|
|
|
|
|
Additions to
property, plant and equipment
|
|
(231,185)
|
|
|
(202,823)
|
|
Settlements of
derivative instruments
|
|
—
|
|
|
(133)
|
|
Net cash used for
investing activities
|
|
(231,185)
|
|
|
(202,956)
|
|
Cash flows from
financing activities
|
|
|
|
|
Proceeds from debt
payable to Westlake
|
|
291,709
|
|
|
181,642
|
|
Repayment of debt
payable to Westlake
|
|
(135,341)
|
|
|
—
|
|
Quarterly
distributions to noncontrolling interest retained in OpCo by
Westlake
|
|
(310,842)
|
|
|
(51,655)
|
|
Quarterly
distributions to unitholders
|
|
(31,074)
|
|
|
(4,611)
|
|
Repayment of debt
payable to Westlake with proceeds from the initial public
offering
|
|
—
|
|
|
(78,940)
|
|
Net proceeds from
issuance of common units
|
|
—
|
|
|
286,088
|
|
Proceeds from initial
public offering distributed to Westlake
|
|
—
|
|
|
(151,729)
|
|
Net distributions to
Westlake prior to initial public offering
|
|
—
|
|
|
(448,101)
|
|
Net cash used for
financing activities
|
|
(185,548)
|
|
|
(267,306)
|
|
Net increase in cash
and cash equivalents
|
|
35,809
|
|
|
133,750
|
|
Cash and cash
equivalents at beginning of the year
|
|
133,750
|
|
|
—
|
|
Cash and cash
equivalents at end of the year
|
|
$
|
169,559
|
|
|
$
|
133,750
|
|
|
|
(1)
|
Westlake Partners'
initial public offering ("IPO") was on August 4,
2014.
|
(2)
|
Includes the amounts
for the pre-IPO period from January 1, 2014 through
August 3, 2014 and post-IPO period from August 4, 2014
through December 31, 2014.
|
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
Ended
September 30,
|
|
Three Months
Ended
December 31,
|
|
Twelve Months
Ended
December 31,
|
|
|
2015
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands of
dollars)
|
MLP distributable
cash flow (1)
|
|
$
|
9,475
|
|
|
$
|
10,059
|
|
|
$
|
8,547
|
|
|
$
|
37,730
|
|
|
$
|
13,812
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
Distributable cash
flow attributable
to
noncontrolling interests in OpCo (1)
|
|
72,833
|
|
|
75,650
|
|
|
85,277
|
|
|
301,215
|
|
|
136,929
|
|
Net income
attributable to the
Predecessor for the period prior to
August
4, 2014
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
361,334
|
|
Maintenance capital
expenditures (1)
|
|
18,145
|
|
|
18,989
|
|
|
11,790
|
|
|
67,935
|
|
|
17,629
|
|
Contribution to
turnaround reserves (1)
|
|
7,035
|
|
|
7,050
|
|
|
7,463
|
|
|
28,183
|
|
|
11,947
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization (1)
|
|
(20,442)
|
|
|
(20,573)
|
|
|
(19,148)
|
|
|
(81,210)
|
|
|
(31,831)
|
|
Net
income
|
|
87,046
|
|
|
91,175
|
|
|
93,929
|
|
|
353,853
|
|
|
509,820
|
|
Depreciation and
amortization
|
|
20,442
|
|
|
20,573
|
|
|
19,110
|
|
|
81,210
|
|
|
77,611
|
|
Other balance sheet
changes
|
|
(6,184)
|
|
|
9,591
|
|
|
4,983
|
|
|
17,479
|
|
|
16,581
|
|
Net cash provided
by operating activities
|
|
$
|
101,304
|
|
|
$
|
121,339
|
|
|
$
|
118,022
|
|
|
$
|
452,542
|
|
|
$
|
604,012
|
|
|
|
(1)
|
Westlake Partners'
initial public offering was on August 4, 2014. The balances
for the twelve months ended December 31, 2014 include amounts
for the period from August 4, 2014 through December 31,
2014 only.
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SOURCE Westlake Chemical Partners LP