HOUSTON, July 28, 2016 /PRNewswire/ -- Westlake Chemical
Partners LP (NYSE: WLKP) (the "Partnership") today reported net
income attributable to the Partnership of $9.3 million, or $0.34 per limited partner unit, for the three
months ended June 30, 2016, a decrease of $1.1 million compared to second quarter 2015 net
income attributable to the Partnership of $10.4 million, or $0.39 per limited partner unit. The decrease in
net income attributable to the Partnership as compared to the prior
year period was primarily due to lower operating rates at Westlake
Chemical OpCo LP's ("OpCo") Petro 1 facility in Lake Charles, Louisiana due to the planned
turnaround and expansion project and lower operating rates and
increased maintenance expense at OpCo's Calvert City, Kentucky facility mainly
attributable to a force majeure event that began in June 2016. For the three months ended
June 30, 2016, cash flow from operations was $72.7 million, a decrease of $44.0 million compared to second quarter 2015
cash flow from operations of $116.7
million. The decrease in cash flow from operations is
primarily related to lower operating rates at Petro 1 and
Calvert City and costs related to
the Petro 1 planned turnaround. For the three months ended
June 30, 2016, MLP distributable cash flow was
$4.3 million, a decrease of
$4.9 million compared to second
quarter 2015 MLP distributable cash flow of $9.2 million. The decrease in MLP distributable
cash flow compared to the second quarter 2015 was primarily due to
higher maintenance capital expenditures and lower operating rates
at Petro 1, and higher maintenance activity and lower operating
rates at Calvert City. Our Calvert
City Olefins unit experienced an unexpected shutdown that occurred
on June 1, 2016. We restarted the
unit in mid July 2016 (after 46
days). The unplanned outage was caused by a mechanical failure,
which resulted in a force majeure event under OpCo's Ethylene Sales
Agreement with Westlake. Pursuant
to the Ethylene Sales Agreement, Westlake's obligation to pay for the annual
minimum commitment (95% of OpCo's budgeted ethylene production),
which will be measured at the end of the year, will generally not
be reduced for the first 45 days of a force majeure event, but will
be reduced for the portion of a force majeure event extending
beyond the 45th day.
The second quarter 2016 net income attributable to the
Partnership of $9.3 million, or
$0.34 per limited partner unit,
decreased by $2.7 million from the
first quarter 2016 net income attributable to the Partnership of
$12.1 million, or $0.45 per limited partner unit. Cash flow from
operations of $72.7 million in the
second quarter of 2016 decreased by $39.9
million from the first quarter of 2016 cash flow from
operations of $112.6. Second quarter
2016 MLP distributable cash flow of $4.3
million decreased by $5.2
million compared to first quarter 2016 MLP distributable
cash flow of $9.5 million. The
decrease in both net income and MLP distributable cash flow since
the first quarter was due to increased maintenance activity and
lower operating rates at Petro 1 and Calvert City.
On July 27, 2016, the Board of Directors of Westlake
Chemical Partners GP LLC, the general partner of the Partnership,
announced a quarterly distribution for the second quarter of 2016
of $0.3259 per limited partner unit
to be payable on August 23, 2016 to unit and IDR holders
of record as of August 9, 2016. The second quarter 2016
distribution increased 12.0% compared to the second quarter 2015
distribution and 2.87% compared to the first quarter 2016
distribution.
OpCo's sales agreement with Westlake 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 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 announce the recent completion of the
turnaround and expansion of OpCo's Petro 1 facility, which we
are currently in the process of restarting. Our teams worked
diligently through challenging weather to safely complete this
project and we commend them for their efforts. This expansion adds
250 million pounds of ethylene capacity and helps in continuing our
path of increasing our distributions at a low double-digit growth
rate for our unitholders," 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 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 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 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'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 definition of MLP distributable cash flow and EBITDA
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 2016 results will be held July 28, 2016 at
6:00 PM Eastern Time (5:00 PM 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 49762193.
A replay of the conference call will be available beginning two
hours after its conclusion until 11:59 p.m. Eastern Time on
August 4, 2016. To hear a replay, dial (855) 859-2056 or
(404) 537-3406 for international callers. The replay passcode is
49762193.
The conference call will also be available via webcast at:
http://edge.media-server.com/m/p/ahfxxpd7 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
June 30,
|
|
Six Months Ended
June 30,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands of
dollars, except per unit data)
|
Revenue
|
|
|
|
|
|
|
|
|
Net sales—Westlake
Chemical Corporation ("Westlake")
|
|
$
|
181,635
|
|
|
$
|
204,669
|
|
|
$
|
412,895
|
|
|
$
|
413,582
|
|
Net co-product,
ethylene and other sales—third
parties
|
|
29,206
|
|
|
47,036
|
|
|
50,550
|
|
|
96,514
|
|
Total net
sales
|
|
210,841
|
|
|
251,705
|
|
|
463,445
|
|
|
510,096
|
|
Cost of
sales
|
|
122,460
|
|
|
157,177
|
|
|
264,650
|
|
|
319,341
|
|
Gross
profit
|
|
88,381
|
|
|
94,528
|
|
|
198,795
|
|
|
190,755
|
|
Selling, general and
administrative expenses
|
|
5,848
|
|
|
5,995
|
|
|
11,945
|
|
|
11,995
|
|
Income from
operations
|
|
82,533
|
|
|
88,533
|
|
|
186,850
|
|
|
178,760
|
|
Other income
(expense)
|
|
|
|
|
|
|
|
|
Interest
expense—Westlake
|
|
(1,203)
|
|
|
(1,364)
|
|
|
(2,434)
|
|
|
(2,740)
|
|
Other income,
net
|
|
159
|
|
|
33
|
|
|
243
|
|
|
38
|
|
Income before income
taxes
|
|
81,489
|
|
|
87,202
|
|
|
184,659
|
|
|
176,058
|
|
Provision for
(benefit from) income taxes
|
|
297
|
|
|
(41)
|
|
|
696
|
|
|
426
|
|
Net income
|
|
81,192
|
|
|
87,243
|
|
|
183,963
|
|
|
175,632
|
|
Less: Net income
attributable to noncontrolling interest in Westlake Chemical OpCo LP
("OpCo")
|
|
71,848
|
|
|
76,800
|
|
|
162,535
|
|
|
156,689
|
|
Net income
attributable to Westlake Partners
|
|
$
|
9,344
|
|
|
$
|
10,443
|
|
|
$
|
21,428
|
|
|
$
|
18,943
|
|
|
|
|
|
|
|
|
|
|
Net income per
limited partners unit attributable to Westlake Partners (basic and diluted)
|
|
|
|
|
|
|
|
|
Common
units
|
|
$
|
0.34
|
|
|
$
|
0.39
|
|
|
$
|
0.79
|
|
|
$
|
0.70
|
|
Subordinated
units
|
|
$
|
0.34
|
|
|
$
|
0.39
|
|
|
$
|
0.79
|
|
|
$
|
0.70
|
|
|
|
|
|
|
|
|
|
|
Distributions
declared per unit
|
|
$
|
0.3259
|
|
|
$
|
0.2910
|
|
|
$
|
0.6427
|
|
|
$
|
0.5739
|
|
|
|
|
|
|
|
|
|
|
MLP distributable
cash flow
|
|
$
|
4,295
|
|
|
$
|
9,235
|
|
|
$
|
13,810
|
|
|
$
|
18,196
|
|
|
|
|
|
|
|
|
|
|
Distribution
declared
|
|
|
|
|
|
|
|
|
Limited partner
units—public
|
|
$
|
4,216
|
|
|
$
|
3,765
|
|
|
$
|
8,315
|
|
|
$
|
7,425
|
|
Limited partner
units—Westlake
|
|
4,602
|
|
|
4,109
|
|
|
9,076
|
|
|
8,104
|
|
Incentive
distribution rights
|
|
46
|
|
|
—
|
|
|
48
|
|
|
—
|
|
Total distribution
declared
|
|
$
|
8,864
|
|
|
$
|
7,874
|
|
|
$
|
17,439
|
|
|
$
|
15,529
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
$
|
103,478
|
|
|
$
|
108,958
|
|
|
$
|
228,275
|
|
|
$
|
218,993
|
|
WESTLAKE CHEMICAL
PARTNERS LP ("WESTLAKE PARTNERS")
|
|
|
|
|
|
CONSOLIDATED
BALANCE SHEETS
(Unaudited)
|
|
|
|
|
|
|
|
June 30,
2016
|
|
December 31,
2015
|
|
|
|
|
|
(In thousands of
dollars)
|
ASSETS
|
|
|
|
|
Current
assets
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
151,257
|
|
|
$
|
169,559
|
|
Accounts
receivable—Westlake
|
|
59,118
|
|
|
39,655
|
|
Accounts receivable,
net—third parties
|
|
9,620
|
|
|
11,927
|
|
Inventories
|
|
2,493
|
|
|
3,879
|
|
Prepaid expenses and
other current assets
|
|
73
|
|
|
267
|
|
Total current
assets
|
|
222,561
|
|
|
225,287
|
|
Property, plant and
equipment, net
|
|
1,203,249
|
|
|
1,020,469
|
|
Receivable from
Westlake
|
|
28,248
|
|
|
—
|
|
Other assets,
net
|
|
98,176
|
|
|
44,593
|
|
Total
assets
|
|
$
|
1,552,234
|
|
|
$
|
1,290,349
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
Current liabilities
(accounts payable and accrued liabilities)
|
|
$
|
170,794
|
|
|
$
|
57,694
|
|
Long-term debt
payable to Westlake
|
|
515,338
|
|
|
384,006
|
|
Other
liabilities
|
|
2,352
|
|
|
1,482
|
|
Total
liabilities
|
|
688,484
|
|
|
443,182
|
|
Common
unitholders—public
|
|
296,704
|
|
|
294,565
|
|
Common
unitholder—Westlake
|
|
4,739
|
|
|
4,502
|
|
Subordinated
unitholder—Westlake
|
|
41,882
|
|
|
39,786
|
|
General
partner—Westlake
|
|
(242,526)
|
|
|
(242,572)
|
|
Accumulated other
comprehensive (loss) income
|
|
(624)
|
|
|
280
|
|
Total Westlake
Partners partners' capital
|
|
100,175
|
|
|
96,561
|
|
Noncontrolling
interest in OpCo
|
|
763,575
|
|
|
750,606
|
|
Total
equity
|
|
863,750
|
|
|
847,167
|
|
Total liabilities
and equity
|
|
$
|
1,552,234
|
|
|
$
|
1,290,349
|
|
WESTLAKE CHEMICAL
PARTNERS LP ("WESTLAKE PARTNERS")
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS (Unaudited)
|
|
|
|
|
Six Months Ended
June 30,
|
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
(In thousands of
dollars)
|
Cash flows from
operating activities
|
|
|
|
|
Net income
|
|
$
|
183,963
|
|
|
$
|
175,632
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
|
41,182
|
|
|
40,195
|
|
Other balance sheet
changes
|
|
(39,868)
|
|
|
14,072
|
|
Net cash provided by
operating activities
|
|
185,277
|
|
|
229,899
|
|
Cash flows from
investing activities
|
|
|
|
|
Additions to
property, plant and equipment
|
|
(168,533)
|
|
|
(95,514)
|
|
Proceeds from
disposition of assets
|
|
98
|
|
|
—
|
|
Net cash used for
investing activities
|
|
(168,435)
|
|
|
(95,514)
|
|
Cash flows from
financing activities
|
|
|
|
|
Proceeds from debt
payable to Westlake
|
|
131,832
|
|
|
188,695
|
|
Repayment of debt
payable to Westlake
|
|
(500)
|
|
|
(135,341)
|
|
Quarterly
distributions to noncontrolling interest retained in OpCo by
Westlake
|
|
(149,566)
|
|
|
(169,101)
|
|
Quarterly
distributions to unitholders
|
|
(16,910)
|
|
|
(15,097)
|
|
Net cash used for
financing activities
|
|
(35,144)
|
|
|
(130,844)
|
|
Net (decrease)
increase in cash and cash equivalents
|
|
(18,302)
|
|
|
3,541
|
|
Cash and cash
equivalents at beginning of the period
|
|
169,559
|
|
|
133,750
|
|
Cash and cash
equivalents at end of the period
|
|
$
|
151,257
|
|
|
$
|
137,291
|
|
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
March 31,
|
|
Three Months
Ended
June 30,
|
|
Six Months
Ended
June 30,
|
|
|
2016
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
(In thousands of
dollars)
|
|
|
|
MLP distributable
cash flow
|
|
$
|
9,515
|
|
|
$
|
4,295
|
|
|
$
|
9,235
|
|
|
$
|
13,810
|
|
|
$
|
18,196
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
Distributable cash
flow attributable to noncontrolling interest in OpCo
|
|
73,916
|
|
|
39,171
|
|
|
68,908
|
|
|
113,087
|
|
|
152,732
|
|
Incentive
distribution rights
|
|
2
|
|
|
46
|
|
|
—
|
|
|
48
|
|
|
—
|
|
Maintenance capital
expenditures
|
|
33,610
|
|
|
48,252
|
|
|
22,515
|
|
|
81,862
|
|
|
30,801
|
|
Contribution to
turnaround reserves
|
|
6,124
|
|
|
10,214
|
|
|
6,977
|
|
|
16,338
|
|
|
14,098
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
(20,396)
|
|
|
(20,786)
|
|
|
(20,392)
|
|
|
(41,182)
|
|
|
(40,195)
|
|
Net
income
|
|
102,771
|
|
|
81,192
|
|
|
87,243
|
|
|
183,963
|
|
|
175,632
|
|
Changes in operating
assets and liabilities and
other
|
|
9,625
|
|
|
(8,631)
|
|
|
29,709
|
|
|
994
|
|
|
54,501
|
|
Deferred income
taxes
|
|
179
|
|
|
141
|
|
|
(288)
|
|
|
320
|
|
|
(234)
|
|
Net cash provided
by operating activities
|
|
$
|
112,575
|
|
|
$
|
72,702
|
|
|
$
|
116,664
|
|
|
$
|
185,277
|
|
|
$
|
229,899
|
|
WESTLAKE CHEMICAL
PARTNERS LP ("WESTLAKE PARTNERS")
|
|
|
|
|
|
|
|
RECONCILIATION OF
EBITDA TO NET INCOME AND NET CASH PROVIDED BY OPERATING
ACTIVITIES
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
March 31,
|
|
Three Months
Ended
June 30,
|
|
Six Months
Ended
June 30,
|
|
|
2016
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands of
dollars)
|
|
|
|
EBITDA
|
|
$
|
124,797
|
|
|
$
|
103,478
|
|
|
$
|
108,958
|
|
|
$
|
228,275
|
|
|
$
|
218,993
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
(Provision for)
benefit from income taxes
|
|
(399)
|
|
|
(297)
|
|
|
41
|
|
|
(696)
|
|
|
(426)
|
|
Interest
expense
|
|
(1,231)
|
|
|
(1,203)
|
|
|
(1,364)
|
|
|
(2,434)
|
|
|
(2,740)
|
|
Depreciation and
amortization
|
|
(20,396)
|
|
|
(20,786)
|
|
|
(20,392)
|
|
|
(41,182)
|
|
|
(40,195)
|
|
Net
income
|
|
102,771
|
|
|
81,192
|
|
|
87,243
|
|
|
183,963
|
|
|
175,632
|
|
Changes in operating
assets and liabilities and
other
|
|
9,625
|
|
|
(8,631)
|
|
|
29,709
|
|
|
994
|
|
|
54,501
|
|
Deferred income
taxes
|
|
179
|
|
|
141
|
|
|
(288)
|
|
|
320
|
|
|
(234)
|
|
Net cash provided
by operating activities
|
|
$
|
112,575
|
|
|
$
|
72,702
|
|
|
$
|
116,664
|
|
|
$
|
185,277
|
|
|
$
|
229,899
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/westlake-chemical-partners-lp-announces-second-quarter-2016-earnings-and-the-completion-of-opcos-250-million-pound-ethylene-expansion-in-lake-charles-louisiana-300305858.html
SOURCE Westlake Chemical Partners LP