The third quarter 2016 net income attributable to the Partnership of
On October 31, 2016, the Board of Directors of
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 output is sold to Westlake for a cash margin of
“We are pleased with OpCo’s recent performance following our turnaround
and expansion project, which was completed in July, and added 250
million pounds of capacity to our Petro 1 facility. We believe our
upcoming 100 million pound ethylene expansion at our
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
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 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 Conference Call Information:
A conference call to discuss
A replay of the conference call will be available beginning two hours after its conclusion until 11:59 p.m. Eastern Time on November 15, 2016. To hear a replay, dial (855) 859-2056 or (404) 537-3406 for international callers. The replay passcode is 96257816.
The conference call will also be available via webcast at: http://edge.media-server.com/m/p/pgrx3b72 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 September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||||||||||||
(In thousands of dollars, except per unit data) | ||||||||||||||||||||||||||
Revenue | ||||||||||||||||||||||||||
Net sales—Westlake Chemical Corporation ("Westlake") |
$ | 193,964 | $ | 207,856 | $ | 606,859 | $ | 621,438 | ||||||||||||||||||
Net co-product, ethylene and other sales—third parties |
35,390 | 40,763 | 85,940 | 137,277 | ||||||||||||||||||||||
Total net sales | 229,354 | 248,619 | 692,799 | 758,715 | ||||||||||||||||||||||
Cost of sales | 142,553 | 154,474 | 407,203 | 473,815 | ||||||||||||||||||||||
Gross profit | 86,801 | 94,145 | 285,596 | 284,900 | ||||||||||||||||||||||
Selling, general and administrative expenses | 5,788 | 5,831 | 17,733 | 17,826 | ||||||||||||||||||||||
Income from operations | 81,013 | 88,314 | 267,863 | 267,074 | ||||||||||||||||||||||
Other income (expense) | ||||||||||||||||||||||||||
Interest expense—Westlake | (4,947 | ) | (1,054 | ) | (7,381 | ) | (3,794 | ) | ||||||||||||||||||
Other (expense) income, net | (13 | ) | (73 | ) | 230 | (35 | ) | |||||||||||||||||||
Income before income taxes | 76,053 | 87,187 | 260,712 | 263,245 | ||||||||||||||||||||||
Provision for income taxes | 194 | 141 | 890 | 567 | ||||||||||||||||||||||
Net income | 75,859 | 87,046 | 259,822 | 262,678 | ||||||||||||||||||||||
Less: Net income attributable to noncontrolling interest in Westlake Chemical OpCo LP ("OpCo") |
67,198 | 76,943 | 229,733 | 233,632 | ||||||||||||||||||||||
Net income attributable to Westlake Partners | $ | 8,661 | $ | 10,103 | $ | 30,089 | $ | 29,046 | ||||||||||||||||||
Net income per limited partners unit attributable to Westlake Partners (basic and diluted) |
||||||||||||||||||||||||||
Common units | $ | 0.32 | $ | 0.37 | $ | 1.11 | $ | 1.07 | ||||||||||||||||||
Subordinated units | $ | 0.32 | $ | 0.37 | $ | 1.11 | $ | 1.07 | ||||||||||||||||||
Distributions declared per unit | $ | 0.3353 | $ | 0.2994 | $ | 0.9780 | $ | 0.8733 | ||||||||||||||||||
MLP distributable cash flow | $ | 6,833 | $ | 9,475 | $ | 20,643 | $ | 27,671 | ||||||||||||||||||
Distribution declared | ||||||||||||||||||||||||||
Limited partner units—public | $ | 4,338 | $ | 3,873 | $ | 12,653 | $ | 11,298 | ||||||||||||||||||
Limited partner units—Westlake | 4,735 | 4,229 | 13,812 | 12,333 | ||||||||||||||||||||||
Incentive distribution rights | 91 | — | 139 | — | ||||||||||||||||||||||
Total distribution declared | $ | 9,164 | $ | 8,102 | $ | 26,604 | $ | 23,631 | ||||||||||||||||||
EBITDA | $ | 107,290 | $ | 108,683 | $ | 335,565 | $ | 327,676 | ||||||||||||||||||
WESTLAKE CHEMICAL PARTNERS LP ("WESTLAKE PARTNERS") | ||||||||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||||||||
(Unaudited) | ||||||||||||||
September 30, 2016 |
December 31, 2015 |
|||||||||||||
(In thousands of dollars) | ||||||||||||||
ASSETS | ||||||||||||||
Current assets | ||||||||||||||
Cash and cash equivalents | $ | 75,006 | $ | 169,559 | ||||||||||
Accounts receivable—Westlake | 98,145 | 39,655 | ||||||||||||
Accounts receivable, net—third parties | 15,699 | 11,927 | ||||||||||||
Inventories | 3,428 | 3,879 | ||||||||||||
Prepaid expenses and other current assets | — | 267 | ||||||||||||
Total current assets | 192,278 | 225,287 | ||||||||||||
Property, plant and equipment, net | 1,217,451 | 1,020,469 | ||||||||||||
Receivable from Westlake | 20,428 | — | ||||||||||||
Other assets, net | 106,502 | 44,593 | ||||||||||||
Total assets | $ | 1,536,659 | $ | 1,290,349 | ||||||||||
LIABILITIES AND EQUITY | ||||||||||||||
Current liabilities (accounts payable and accrued liabilities) | $ | 47,577 | $ | 57,694 | ||||||||||
Long-term debt payable to Westlake | 595,083 | 384,006 | ||||||||||||
Other liabilities | 2,024 | 1,482 | ||||||||||||
Total liabilities | 644,684 | 443,182 | ||||||||||||
Common unitholders—public | 296,585 | 294,565 | ||||||||||||
Common unitholder—Westlake | 4,726 | 4,502 | ||||||||||||
Subordinated unitholder—Westlake | 41,766 | 39,786 | ||||||||||||
General partner—Westlake | (242,481 | ) | (242,572 | ) | ||||||||||
Accumulated other comprehensive (loss) income | (224 | ) | 280 | |||||||||||
Total Westlake Partners partners' capital | 100,372 | 96,561 | ||||||||||||
Noncontrolling interest in OpCo | 791,603 | 750,606 | ||||||||||||
Total equity | 891,975 | 847,167 | ||||||||||||
Total liabilities and equity | $ | 1,536,659 | $ | 1,290,349 | ||||||||||
WESTLAKE CHEMICAL PARTNERS LP ("WESTLAKE PARTNERS") | ||||||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||||
(Unaudited) | ||||||||||||||
Nine Months Ended September 30, | ||||||||||||||
2016 | 2015 | |||||||||||||
(In thousands of dollars) | ||||||||||||||
Cash flows from operating activities | ||||||||||||||
Net income | $ | 259,822 | $ | 262,678 | ||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||
Depreciation and amortization | 67,472 | 60,637 | ||||||||||||
Other balance sheet changes | (149,924 | ) | 7,888 | |||||||||||
Net cash provided by operating activities | 177,370 | 331,203 | ||||||||||||
Cash flows from investing activities | ||||||||||||||
Additions to property, plant and equipment | (268,647 | ) | (152,572 | ) | ||||||||||
Proceeds from disposition of assets | 157 | — | ||||||||||||
Net cash used for investing activities | (268,490 | ) | (152,572 | ) | ||||||||||
Cash flows from financing activities | ||||||||||||||
Proceeds from debt payable to Westlake | 212,175 | 238,198 | ||||||||||||
Repayment of debt payable to Westlake | (1,098 | ) | (135,341 | ) | ||||||||||
Quarterly distributions to noncontrolling interest retained in OpCo by Westlake | (188,736 | ) | (238,009 | ) | ||||||||||
Quarterly distributions to unitholders | (25,774 | ) | (22,972 | ) | ||||||||||
Net cash used for financing activities | (3,433 | ) | (158,124 | ) | ||||||||||
Net (decrease) increase in cash and cash equivalents | (94,553 | ) | 20,507 | |||||||||||
Cash and cash equivalents at beginning of the period | 169,559 | 133,750 | ||||||||||||
Cash and cash equivalents at end of the period | $ | 75,006 | $ | 154,257 | ||||||||||
WESTLAKE CHEMICAL PARTNERS LP ("WESTLAKE PARTNERS") | ||||||||||||||||||||||||||||
RECONCILIATION OF MLP DISTRIBUTABLE CASH FLOW TO NET INCOME | ||||||||||||||||||||||||||||
AND NET CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES | ||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||
Three Months Ended |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||
June 30, | September 30, | September 30, | ||||||||||||||||||||||||||
2016 | 2016 | 2015 | 2016 | 2015 | ||||||||||||||||||||||||
(In thousands of dollars) | ||||||||||||||||||||||||||||
MLP distributable cash flow | $ | 4,295 | $ | 6,833 | $ | 9,475 | $ | 20,643 | $ | 27,671 | ||||||||||||||||||
Add: | ||||||||||||||||||||||||||||
Distributable cash flow attributable to noncontrolling interest in OpCo |
39,171 | 55,853 | 72,833 | 168,940 | 225,565 | |||||||||||||||||||||||
Incentive distribution rights | 46 | 91 | — | 139 | — | |||||||||||||||||||||||
Maintenance capital expenditures | 48,252 | 21,747 | 18,145 | 103,609 | 48,946 | |||||||||||||||||||||||
Contribution to turnaround reserves | 10,214 | 17,625 | 7,035 | 33,963 | 21,133 | |||||||||||||||||||||||
Less: | ||||||||||||||||||||||||||||
Depreciation and amortization | (20,786 | ) | (26,290 | ) | (20,442 | ) | (67,472 | ) | (60,637 | ) | ||||||||||||||||||
Net income | 81,192 | 75,859 | 87,046 | 259,822 | 262,678 | |||||||||||||||||||||||
Changes in operating assets and liabilities and other |
(8,631 | ) | (83,835 | ) | 14,383 | (82,841 | ) | 68,884 | ||||||||||||||||||||
Deferred income taxes | 141 | 69 | (125 | ) | 389 | (359 | ) | |||||||||||||||||||||
Net cash provided by (used for) operating activities |
$ | 72,702 | $ | (7,907 | ) | $ | 101,304 | $ | 177,370 | $ | 331,203 | |||||||||||||||||
WESTLAKE CHEMICAL PARTNERS LP ("WESTLAKE PARTNERS") | |||||||||||||||||||||||||||||||||
RECONCILIATION OF EBITDA TO NET INCOME AND NET CASH | |||||||||||||||||||||||||||||||||
PROVIDED BY (USED FOR) OPERATING ACTIVITIES |
|||||||||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||||||||
Three Months | Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||
Ended June 30, | September 30, | September 30, | |||||||||||||||||||||||||||||||
2016 | 2016 | 2015 | 2016 | 2015 | |||||||||||||||||||||||||||||
(In thousands of dollars) | |||||||||||||||||||||||||||||||||
EBITDA | $ | 103,478 | $ | 107,290 | $ | 108,683 | $ | 335,565 | $ | 327,676 | |||||||||||||||||||||||
Less: | |||||||||||||||||||||||||||||||||
Provision for income taxes |
(297 | ) | (194 | ) | (141 | ) | (890 | ) | (567 | ) | |||||||||||||||||||||||
Interest expense | (1,203 | ) | (4,947 | ) | (1,054 | ) | (7,381 | ) | (3,794 | ) | |||||||||||||||||||||||
Depreciation and amortization | (20,786 | ) | (26,290 | ) | (20,442 | ) | (67,472 | ) | (60,637 | ) | |||||||||||||||||||||||
Net income | 81,192 | 75,859 | 87,046 | 259,822 | 262,678 | ||||||||||||||||||||||||||||
Changes in operating assets and liabilities and other |
(8,631 | ) | (83,835 | ) | 14,383 | (82,841 | ) | 68,884 | |||||||||||||||||||||||||
Deferred income taxes | 141 | 69 | (125 | ) | 389 | (359 | ) | ||||||||||||||||||||||||||
Net cash provided by (used for) operating activities |
$ | 72,702 | $ | (7,907 | ) | $ | 101,304 | $ | 177,370 | $ | 331,203 | ||||||||||||||||||||||
View source version on businesswire.com: http://www.businesswire.com/news/home/20161108005199/en/
Source:
Westlake Chemical Partners LP
Investors
Steve Bender,
713-585-2900
or
Media
Ben Ederington, 713-585-2900