Second quarter 2019 net income attributable to the Partnership of
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
"Anchored by strong production volumes and with the acquisition of incremental interest in OpCo at the beginning of the year, we expect solid performance in the second half of the year," said
The statements in this release and the related teleconference relating to matters that are not historical facts, such as those with respect to performance in the second half of 2019 and the potential for future growth of cash flows and distributions, 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
Use of Non-GAAP Financial Measures
The body of accounting principles generally accepted in
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/mmc/p/puc8ymnz 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 June 30, |
|
Six Months Ended June 30, |
||||||||||||
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
||||||||
|
|
(In thousands of dollars, except per unit data) |
||||||||||||||
Revenue |
|
|
|
|
|
|
|
|
||||||||
Net sales—Westlake Chemical Corporation ("Westlake") |
|
$ |
230,047 |
|
|
$ |
253,673 |
|
|
$ |
487,087 |
|
|
$ |
488,704 |
|
Net co-product, ethylene and other sales—third parties |
|
40,015 |
|
|
48,302 |
|
|
82,061 |
|
|
97,543 |
|
||||
Total net sales |
|
270,062 |
|
|
301,975 |
|
|
569,148 |
|
|
586,247 |
|
||||
Cost of sales |
|
178,104 |
|
|
204,857 |
|
|
386,536 |
|
|
396,624 |
|
||||
Gross profit |
|
91,958 |
|
|
97,118 |
|
|
182,612 |
|
|
189,623 |
|
||||
Selling, general and administrative expenses |
|
7,639 |
|
|
7,375 |
|
|
14,612 |
|
|
14,508 |
|
||||
Income from operations |
|
84,319 |
|
|
89,743 |
|
|
168,000 |
|
|
175,115 |
|
||||
Other income (expense) |
|
|
|
|
|
|
|
|
||||||||
Interest expense—Westlake |
|
(5,125 |
) |
|
(5,547 |
) |
|
(11,025 |
) |
|
(10,413 |
) |
||||
Other income, net |
|
1,153 |
|
|
583 |
|
|
1,968 |
|
|
1,074 |
|
||||
Income before income taxes |
|
80,347 |
|
|
84,779 |
|
|
158,943 |
|
|
165,776 |
|
||||
Income tax provision |
|
237 |
|
|
303 |
|
|
437 |
|
|
586 |
|
||||
Net income |
|
80,110 |
|
|
84,476 |
|
|
158,506 |
|
|
165,190 |
|
||||
Less: Net income attributable to noncontrolling interests in Westlake Chemical OpCo LP ("OpCo") |
|
66,377 |
|
|
71,719 |
|
|
129,818 |
|
|
140,138 |
|
||||
Net income attributable to Westlake Partners |
|
$ |
13,733 |
|
|
$ |
12,757 |
|
|
$ |
28,688 |
|
|
$ |
25,052 |
|
|
|
|
|
|
|
|
|
|
||||||||
Net income per limited partners unit attributable to Westlake Partners (basic and diluted) |
|
|
|
|
|
|
|
|
||||||||
Common units |
|
$ |
0.39 |
|
|
$ |
0.40 |
|
|
$ |
0.85 |
|
|
$ |
0.75 |
|
|
|
|
|
|
|
|
|
|
||||||||
Distributions declared per unit |
|
$ |
0.4579 |
|
|
$ |
0.4088 |
|
|
$ |
0.9031 |
|
|
$ |
0.8063 |
|
|
|
|
|
|
|
|
|
|
||||||||
MLP distributable cash flow |
|
$ |
16,422 |
|
|
$ |
15,966 |
|
|
$ |
33,977 |
|
|
$ |
30,476 |
|
|
|
|
|
|
|
|
|
|
||||||||
Distributions declared |
|
|
|
|
|
|
|
|
||||||||
Limited partner units—publicly and privately held |
|
$ |
9,646 |
|
|
$ |
7,406 |
|
|
$ |
19,025 |
|
|
$ |
14,607 |
|
Limited partner units—Westlake |
|
6,467 |
|
|
5,773 |
|
|
12,754 |
|
|
11,386 |
|
||||
Incentive distribution rights |
|
— |
|
|
— |
|
|
— |
|
|
733 |
|
||||
Total distributions declared |
|
$ |
16,113 |
|
|
$ |
13,179 |
|
|
$ |
31,779 |
|
|
$ |
26,726 |
|
EBITDA |
|
$ |
112,329 |
|
|
$ |
117,912 |
|
|
$ |
223,669 |
|
|
$ |
231,473 |
|
WESTLAKE CHEMICAL PARTNERS LP |
||||||||
|
||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS |
||||||||
(Unaudited) |
||||||||
|
|
June 30,
|
|
December 31,
|
||||
|
|
(In thousands of dollars) |
||||||
ASSETS |
|
|
|
|
||||
Current assets |
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
17,473 |
|
|
$ |
19,744 |
|
Receivable under the Investment Management Agreement—Westlake Chemical Corporation ("Westlake") |
|
141,327 |
|
|
148,956 |
|
||
Accounts receivable, net—Westlake |
|
38,995 |
|
|
57,280 |
|
||
Accounts receivable, net—third parties |
|
20,435 |
|
|
16,404 |
|
||
Inventories |
|
4,029 |
|
|
4,388 |
|
||
Prepaid expenses and other current assets |
|
95 |
|
|
370 |
|
||
Total current assets |
|
222,354 |
|
|
247,142 |
|
||
Property, plant and equipment, net |
|
1,129,083 |
|
|
1,148,265 |
|
||
Other assets, net |
|
59,467 |
|
|
66,718 |
|
||
Total assets |
|
$ |
1,410,904 |
|
|
$ |
1,462,125 |
|
|
|
|
|
|
||||
LIABILITIES AND EQUITY |
|
|
|
|
||||
Current liabilities (accounts payable and accrued liabilities) |
|
$ |
36,313 |
|
|
$ |
48,772 |
|
Long-term debt payable to Westlake |
|
399,674 |
|
|
477,608 |
|
||
Other liabilities |
|
2,803 |
|
|
1,664 |
|
||
Total liabilities |
|
438,790 |
|
|
528,044 |
|
||
Common unitholders—publicly and privately held |
|
471,944 |
|
|
409,608 |
|
||
Common unitholder—Westlake |
|
48,419 |
|
|
48,774 |
|
||
General partner—Westlake |
|
(242,572 |
) |
|
(242,572 |
) |
||
Total Westlake Partners partners' capital |
|
277,791 |
|
|
215,810 |
|
||
Noncontrolling interest in OpCo |
|
694,323 |
|
|
718,271 |
|
||
Total equity |
|
972,114 |
|
|
934,081 |
|
||
Total liabilities and equity |
|
$ |
1,410,904 |
|
|
$ |
1,462,125 |
|
WESTLAKE CHEMICAL PARTNERS LP |
||||||||
|
||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||||||
(Unaudited) |
||||||||
|
|
Six Months Ended June 30, |
||||||
|
|
2019 |
|
2018 |
||||
|
|
(In thousands of dollars) |
||||||
Cash flows from operating activities |
|
|
|
|
||||
Net income |
|
$ |
158,506 |
|
|
$ |
165,190 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
||||
Depreciation and amortization |
|
53,701 |
|
|
55,284 |
|
||
Other balance sheet changes |
|
1,465 |
|
|
97 |
|
||
Net cash provided by operating activities |
|
213,672 |
|
|
220,571 |
|
||
Cash flows from investing activities |
|
|
|
|
||||
Additions to property, plant and equipment |
|
(25,582 |
) |
|
(16,620 |
) |
||
Maturities of investments with Westlake under the Investment Management Agreement |
|
344,445 |
|
|
178,000 |
|
||
Investments with Westlake under the Investment Management Agreement |
|
(336,445 |
) |
|
(185,000 |
) |
||
Other |
|
46 |
|
|
251 |
|
||
Net cash used for investing activities |
|
(17,536 |
) |
|
(23,369 |
) |
||
Cash flows from financing activities |
|
|
|
|
||||
Net proceeds from private placement of common units |
|
62,916 |
|
|
— |
|
||
Proceeds from debt payable to Westlake |
|
123,511 |
|
|
3,648 |
|
||
Repayment of debt payable to Westlake |
|
(201,445 |
) |
|
— |
|
||
Quarterly distributions to noncontrolling interest retained in OpCo by Westlake |
|
(153,766 |
) |
|
(172,758 |
) |
||
Quarterly distributions to unitholders |
|
(29,623 |
) |
|
(26,617 |
) |
||
Net cash used for financing activities |
|
(198,407 |
) |
|
(195,727 |
) |
||
Net increase (decrease) in cash and cash equivalents |
|
(2,271 |
) |
|
1,475 |
|
||
Cash and cash equivalents at beginning of period |
|
19,744 |
|
|
27,008 |
|
||
Cash and cash equivalents at end of period |
|
$ |
17,473 |
|
|
$ |
28,483 |
|
WESTLAKE CHEMICAL PARTNERS LP |
||||||||||||||||||||
|
||||||||||||||||||||
RECONCILIATION OF MLP DISTRIBUTABLE CASH FLOW TO NET INCOME |
||||||||||||||||||||
AND NET CASH PROVIDED BY OPERATING ACTIVITIES |
||||||||||||||||||||
(Unaudited) |
||||||||||||||||||||
|
|
Three Months
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||||||||
|
|
2019 |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
||||||||||
|
|
(In thousands of dollars) |
||||||||||||||||||
Net cash provided by operating activities |
|
$ |
113,499 |
|
|
$ |
100,173 |
|
|
$ |
114,349 |
|
|
$ |
213,672 |
|
|
$ |
220,571 |
|
Changes in operating assets and liabilities and other |
|
(35,103 |
) |
|
(20,063 |
) |
|
(29,873 |
) |
|
(55,166 |
) |
|
(55,381 |
) |
|||||
Net Income |
|
78,396 |
|
|
80,110 |
|
|
84,476 |
|
|
158,506 |
|
|
165,190 |
|
|||||
Add: |
|
|
|
|
|
|
|
|
|
|
||||||||||
Depreciation, amortization and disposition of property, plant and equipment |
|
27,302 |
|
|
26,903 |
|
|
27,586 |
|
|
54,205 |
|
|
55,851 |
|
|||||
Mark-to-market adjustment loss (gain) on derivative contracts |
|
(715 |
) |
|
516 |
|
|
— |
|
|
(199 |
) |
|
— |
|
|||||
Less: |
|
|
|
|
|
|
|
|
|
|
||||||||||
Contribution to turnaround reserves |
|
(3,848 |
) |
|
(3,889 |
) |
|
(4,204 |
) |
|
(7,737 |
) |
|
(8,352 |
) |
|||||
Maintenance capital expenditures |
|
(11,320 |
) |
|
(11,725 |
) |
|
(5,825 |
) |
|
(23,045 |
) |
|
(13,804 |
) |
|||||
Incentive distribution rights |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(733 |
) |
|||||
Distributable cash flow attributable to noncontrolling interest in OpCo |
|
(72,260 |
) |
|
(75,493 |
) |
|
(86,067 |
) |
|
(147,753 |
) |
|
(167,676 |
) |
|||||
MLP distributable cash flow |
|
$ |
17,555 |
|
|
$ |
16,422 |
|
|
$ |
15,966 |
|
|
$ |
33,977 |
|
|
$ |
30,476 |
|
WESTLAKE CHEMICAL PARTNERS LP |
||||||||||||||||||||
|
||||||||||||||||||||
RECONCILIATION OF EBITDA TO NET INCOME, INCOME FROM OPERATIONS AND NET CASH |
||||||||||||||||||||
PROVIDED BY OPERATING ACTIVITIES |
||||||||||||||||||||
(Unaudited) |
||||||||||||||||||||
|
|
Three Months
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||||||||
|
|
2019 |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
||||||||||
|
|
(In thousands of dollars) |
||||||||||||||||||
Net cash provided by operating activities |
|
$ |
113,499 |
|
|
$ |
100,173 |
|
|
$ |
114,349 |
|
|
$ |
213,672 |
|
|
$ |
220,571 |
|
Changes in operating assets and liabilities and other |
|
(35,103 |
) |
|
(20,063 |
) |
|
(29,873 |
) |
|
(55,166 |
) |
|
(55,381 |
) |
|||||
Net Income |
|
78,396 |
|
|
80,110 |
|
|
84,476 |
|
|
158,506 |
|
|
165,190 |
|
|||||
Less: |
|
|
|
|
|
|
|
|
|
|
||||||||||
Other income, net |
|
815 |
|
|
1,153 |
|
|
583 |
|
|
1,968 |
|
|
1,074 |
|
|||||
Interest expense |
|
(5,900 |
) |
|
(5,125 |
) |
|
(5,547 |
) |
|
(11,025 |
) |
|
(10,413 |
) |
|||||
Income tax provision |
|
(200 |
) |
|
(237 |
) |
|
(303 |
) |
|
(437 |
) |
|
(586 |
) |
|||||
Income from operations |
|
83,681 |
|
|
84,319 |
|
|
89,743 |
|
|
168,000 |
|
|
175,115 |
|
|||||
Add: |
|
|
|
|
|
|
|
|
|
|
||||||||||
Depreciation and amortization |
|
26,844 |
|
|
26,857 |
|
|
27,586 |
|
|
53,701 |
|
|
55,284 |
|
|||||
Other income, net |
|
815 |
|
|
1,153 |
|
|
583 |
|
|
1,968 |
|
|
1,074 |
|
|||||
EBITDA |
|
$ |
111,340 |
|
|
$ |
112,329 |
|
|
$ |
117,912 |
|
|
$ |
223,669 |
|
|
$ |
231,473 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20190806005132/en/
Source:
(713) 585-2900
Investors—Steve Bender
Media—L. Benjamin Ederington