HOUSTON, May 3, 2016 /PRNewswire/ -- Westlake Chemical
Partners LP (NYSE: WLKP) (the "Partnership") today reported net
income attributable to the Partnership of $12.1 million, or $0.45 per limited partner unit, for the three
months ended March 31, 2016, an increase of $3.6 million compared to first quarter 2015 net
income attributable to the Partnership of $8.5 million, or $0.31 per limited partner unit. For the three
months ended March 31, 2016, MLP distributable cash flow
was $9.5 million, an increase of
$0.5 million compared to first
quarter 2015 MLP distributable cash flow of $9.0 million. The increases in net income
attributable to the Partnership and MLP distributable cash flow
compared to the first quarter 2015 are primarily due to higher
operating rates and the purchase of an additional 2.7% interest in
Westlake Chemical OpCo LP ("OpCo") by the Partnership on
April 1, 2015.
The Partnership's first quarter 2016 net income of $12.1 million, or $0.45 per limited partner unit, increased by
$1.3 million from the fourth quarter
2015 net income of $10.8 million, or
$0.40 per limited partner unit. First
quarter 2016 MLP distributable cash flow of $9.5 million decreased by $0.6 million compared to fourth quarter 2015 MLP
distributable cash flow of $10.1
million, largely due to increased maintenance capital
expenditures at OpCo's Petro 1 facility in Lake Charles, Louisiana.
On April 27, 2016, the Board of Directors of Westlake
Chemical Partners GP LLC, the general partner of the Partnership,
announced a quarterly distribution for the first quarter of 2016 of
$0.3168 per unit, and two thousand dollars to holders of incentive
distribution rights ("IDR"), to be payable on
May 24, 2016 to unit and IDR holders of record on
May 10, 2016. The MLP distributable cash flow provided
coverage of 1.11x the declared distributions with respect to the
first quarter of 2016. The first quarter 2016 distribution
increased 12.0% compared to the first quarter 2015 distribution and
2.86% compared to the fourth quarter 2015 distribution.
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 with OpCo's performance for the first quarter of
2016 and look forward to the completion of the expansion projects
at our ethylene facilities. Our 250 million pound expansion at the
Petro 1 facility in Lake Charles,
Louisiana is underway and scheduled for completion early in
the third quarter this year. The Calvert
City, Kentucky expansion planned for the first half of next
year, along with other initiatives, is expected to increase our
ethylene capacity by 100 million pounds. We believe these projects
will allow us to continue on our path of increasing our
distributions at a low double-digit growth rate for the next few
years," 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 growth of distributions 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, 2015, which was filed with
the SEC in March 2016, 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 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 LP 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' first
quarter 2016 results will be held Tuesday, May 3, 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
90231034.
A replay of the conference call will be available beginning two
hours after its conclusion until 11:59 p.m. Eastern Time on
Tuesday, May 10, 2016. To hear a replay, dial (855)
859-2056 or (404) 537-3406 for international callers. The replay
passcode is 90231034.
The conference call will also be available via webcast at:
http://edge.media-server.com/m/p/nng8dayp 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
STATEMENTS OF OPERATIONS
(Unaudited)
|
|
|
|
Three Months Ended
March 31,
|
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
(In thousands of
dollars,
except per unit
data)
|
Revenue
|
|
|
|
|
Net sales—Westlake
Chemical Corporation ("Westlake")
|
|
$
|
231,260
|
|
|
$
|
208,913
|
|
Net co-product,
ethylene and other sales—third parties
|
|
21,344
|
|
|
49,478
|
|
Total net
sales
|
|
252,604
|
|
|
258,391
|
|
Cost of
sales
|
|
142,190
|
|
|
162,164
|
|
Gross
profit
|
|
110,414
|
|
|
96,227
|
|
Selling, general and
administrative expenses
|
|
6,097
|
|
|
6,000
|
|
Income from
operations
|
|
104,317
|
|
|
90,227
|
|
Other income
(expense)
|
|
|
|
|
Interest
expense
|
|
(1,231)
|
|
|
(1,376)
|
|
Other income,
net
|
|
84
|
|
|
5
|
|
Income before income
taxes
|
|
103,170
|
|
|
88,856
|
|
Provision for income
taxes
|
|
399
|
|
|
467
|
|
Net income
|
|
102,771
|
|
|
88,389
|
|
Less: Net income
attributable to noncontrolling interest in Westlake Chemical OpCo LP ("OpCo")
|
|
90,687
|
|
|
79,889
|
|
Net income
attributable to Westlake Partners
|
|
$
|
12,084
|
|
|
$
|
8,500
|
|
|
|
|
|
|
Net income
attributable to Westlake Partners per limited partners unit (basic
and diluted)
|
|
|
|
|
Common
units
|
|
$
|
0.45
|
|
|
$
|
0.31
|
|
Subordinated
units
|
|
$
|
0.45
|
|
|
$
|
0.31
|
|
|
|
|
|
|
Distributions
declared per unit
|
|
$
|
0.3168
|
|
|
$
|
0.2829
|
|
|
|
|
|
|
MLP distributable
cash flow
|
|
$
|
9,517
|
|
|
$
|
8,961
|
|
|
|
|
|
|
Distribution
declared
|
|
|
|
|
Limited partner
units—public
|
|
$
|
4,099
|
|
|
$
|
3,660
|
|
Limited partner
units—Westlake
|
|
4,474
|
|
|
3,995
|
|
Incentive
distribution rights
|
|
2
|
|
|
—
|
|
Total distribution
declared
|
|
$
|
8,575
|
|
|
$
|
7,655
|
|
WESTLAKE CHEMICAL
PARTNERS LP ("WESTLAKE PARTNERS")
|
|
CONSOLIDATED
BALANCE SHEETS
(Unaudited)
|
|
|
|
March
31, 2016
|
|
December
31, 2015
|
|
|
|
|
|
|
|
(In thousands of
dollars)
|
ASSETS
|
|
|
|
|
Current
assets
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
178,676
|
|
|
$
|
169,559
|
|
Accounts
receivable—Westlake
|
|
56,043
|
|
|
39,655
|
|
Accounts receivable,
net—third parties
|
|
6,066
|
|
|
11,927
|
|
Inventories
|
|
2,590
|
|
|
3,879
|
|
Prepaid expenses and
other current assets
|
|
157
|
|
|
267
|
|
Total current
assets
|
|
243,532
|
|
|
225,287
|
|
Property, plant and
equipment, net
|
|
1,096,354
|
|
|
1,020,469
|
|
Other assets,
net
|
|
44,191
|
|
|
44,593
|
|
Total
assets
|
|
$
|
1,384,077
|
|
|
$
|
1,290,349
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
Current liabilities
(accounts payable and accrued liabilities)
|
|
$
|
73,338
|
|
|
$
|
57,694
|
|
Long-term debt
payable to Westlake
|
|
443,525
|
|
|
384,006
|
|
Other
liabilities
|
|
1,991
|
|
|
1,482
|
|
Total
liabilities
|
|
518,854
|
|
|
443,182
|
|
Common
unitholders—public
|
|
296,357
|
|
|
294,565
|
|
Common
unitholder—Westlake
|
|
4,701
|
|
|
4,502
|
|
Subordinated
unitholder—Westlake
|
|
41,543
|
|
|
39,786
|
|
General
partner—Westlake
|
|
(242,570)
|
|
|
(242,572)
|
|
Accumulated other
comprehensive (loss) income
|
|
(451)
|
|
|
280
|
|
Total Westlake
Partners partners' capital
|
|
99,580
|
|
|
96,561
|
|
Noncontrolling
interest in OpCo
|
|
765,643
|
|
|
750,606
|
|
Total
equity
|
|
865,223
|
|
|
847,167
|
|
Total liabilities
and equity
|
|
$
|
1,384,077
|
|
|
$
|
1,290,349
|
|
WESTLAKE CHEMICAL
PARTNERS LP ("WESTLAKE PARTNERS")
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited)
|
|
|
|
Three Months Ended
March 31,
|
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
(In thousands of
dollars)
|
Cash flows from
operating activities
|
|
|
|
|
Net income
|
|
$
|
102,771
|
|
|
$
|
88,389
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
|
20,396
|
|
|
19,803
|
|
Other balance sheet
changes
|
|
(10,592)
|
|
|
5,043
|
|
Net cash provided by
operating activities
|
|
112,575
|
|
|
113,235
|
|
Cash flows from
investing activities
|
|
|
|
|
Additions to
property, plant and equipment
|
|
(79,091)
|
|
|
(39,540)
|
|
Proceeds from
disposition of assets
|
|
98
|
|
|
—
|
|
Net cash used for
investing activities
|
|
(78,993)
|
|
|
(39,540)
|
|
Cash flows from
financing activities
|
|
|
|
|
Proceeds from debt
payable to Westlake
|
|
59,519
|
|
|
30,191
|
|
Quarterly
distributions to noncontrolling interest retained in OpCo by
Westlake
|
|
(75,650)
|
|
|
(85,277)
|
|
Quarterly
distributions to unitholders
|
|
(8,334)
|
|
|
(7,441)
|
|
Net cash used for
financing activities
|
|
(24,465)
|
|
|
(62,527)
|
|
Net increase in cash
and cash equivalents
|
|
9,117
|
|
|
11,168
|
|
Cash and cash
equivalents at beginning of the period
|
|
169,559
|
|
|
133,750
|
|
Cash and cash
equivalents at end of the period
|
|
$
|
178,676
|
|
|
$
|
144,918
|
|
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 December 31,
|
|
Three Months
Ended March
31,
|
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
(In thousands of
dollars)
|
|
|
|
MLP distributable
cash flow
|
|
$
|
10,059
|
|
|
$
|
9,517
|
|
|
$
|
8,961
|
|
Add:
|
|
|
|
|
|
|
Distributable cash
flow attributable to noncontrolling interest in OpCo
|
|
75,650
|
|
|
73,916
|
|
|
83,824
|
|
Maintenance capital
expenditures
|
|
18,989
|
|
|
33,610
|
|
|
8,286
|
|
Contribution to
turnaround reserves
|
|
7,050
|
|
|
6,124
|
|
|
7,121
|
|
Less:
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
(20,573)
|
|
|
(20,396)
|
|
|
(19,803)
|
|
Net
income
|
|
91,175
|
|
|
102,771
|
|
|
88,389
|
|
Changes in operating
assets and liabilities and other
|
|
30,261
|
|
|
9,625
|
|
|
24,792
|
|
Deferred income
taxes
|
|
(97)
|
|
|
179
|
|
|
54
|
|
Net cash provided
by operating activities
|
|
$
|
121,339
|
|
|
$
|
112,575
|
|
|
$
|
113,235
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/westlake-chemical-partners-lp-announces-first-quarter-2016-earnings-300261102.html
SOURCE Westlake Chemical Partners LP