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     121  0 Kommentare Westlake Chemical Partners LP Announces First Quarter 2020 Results

    Westlake Chemical Partners LP (NYSE: WLKP) (the "Partnership") today reported net income attributable to the Partnership of $17.7 million, or $0.50 per limited partner unit, for the three months ended March 31, 2020, an increase of $2.7 million compared to first quarter 2019 net income attributable to the Partnership of $15.0 million. The increase in net income attributable to the Partnership was primarily due to the increased production at Westlake Chemical OpCo LP ("OpCo") and higher third party sales margins. Cash flows from operating activities in the first quarter of 2020 were $111.0 million, a decrease of $2.5 million compared to first quarter 2019 cash flows from operating activities of $113.5 million. This decrease in cash flows from operating activities was primarily attributable to an increase in working capital. For the three months ended March 31, 2020, MLP distributable cash flow of $18.3 million increased by $0.7 million from first quarter 2019 MLP distributable cash flow of $17.6 million.

    First quarter 2020 net income attributable to the Partnership of $17.7 million increased by $0.3 million from fourth quarter 2019 net income attributable to the Partnership of $17.4 million. First quarter 2020 cash flows from operating activities of $111.0 million decreased by $4.7 million compared to fourth quarter 2019 cash flows from operating activities of $115.7 million, primarily due to an increase in working capital. First quarter 2020 MLP distributable cash flow of $18.3 million decreased by $0.5 million compared to fourth quarter 2019 MLP distributable cash flow of $18.8 million.

    "We are pleased with the Partnership's solid performance in the first quarter of 2020. The long-term ethylene sales agreement we have with Westlake Chemical provided reliable earnings and cash flows to the Partnership," said Albert Chao, President and Chief Executive Officer. "With the outbreak of COVID-19, our first priority is to ensure the health and safety of our employees around the world who continue to work diligently to serve our customers. The COVID-19 pandemic and the response thereto has impacted both equity and commodities markets as a whole. In these evolving market conditions, we maintained our current distribution and by doing so maintain our financial strength and flexibility. This measure allows us to preserve the inherent value of the Partnership and the significant opportunities available through our four levers of growth."

    On April 30, 2020, the Partnership announced that the Board of Directors of Westlake Chemical Partners GP LLC had approved a quarterly distribution for the first quarter of 2020 of $0.4714 per unit to be payable on May 26, 2020 to unitholders of record as of May 11, 2020. MLP distributable cash flow provided trailing twelve-month coverage of 1.13x the declared distributions for the first quarter of 2020.

    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 $0.10 per pound, net of operating costs, maintenance capital expenditures and reserves for future turnaround expenditures.

    The statements in this release and the related teleconference relating to matters that are not historical facts, such as those with respect to resumption of distribution growth, inherent value of the Partnership and levers of growth 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, the COVID-19 pandemic and the response thereto; 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 Westlake Chemical Corporation; actions of third parties; inclement or hazardous weather conditions, including flooding, and the physical impacts of climate change; environmental hazards; 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; difficulty collecting receivables; inability of our customers to take delivery; fires, explosions or other industrial 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, 2019, which was filed with the SEC in February 2020.

    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 makes reference to certain "non-GAAP" financial measures, such as MLP distributable cash flow and EBITDA. For this purpose, a non-GAAP financial measure is generally defined by the Securities and Exchange Commission ("SEC") as a numerical measure of a registrant's historical or future financial performance, financial position or cash flows that (1) excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with GAAP in the statement of income, balance sheet or statement of cash flows (or equivalent statements) of the registrant; or (2) includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented. We report our financial results in accordance with U.S. generally accepted accounting principles ("U.S. 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 U.S. GAAP. 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. MLP distributable cash flow and EBITDA are non-GAAP supplemental financial measures that management and external users of our consolidated financial statements, such as industry analysts, investors, lenders and rating agencies, may use to assess our operating performance as compared to other publicly traded partnerships, our ability to incur and service debt and fund capital expenditures and the viability of acquisitions and other capital expenditure projects and the returns on investment of various investment opportunities. Reconciliations of MLP distributable cash flow to net income and to net cash provided by operating activities and of EBITDA to net income, income from operations and net cash provided by operating activities can be found in the financial schedules at the end of this press release.

    Westlake Chemical Partners LP

    Westlake Chemical Partners is a limited partnership formed by Westlake Chemical Corporation to operate, acquire and develop ethylene production facilities and other qualified assets. Headquartered in Houston, the Partnership owns a 22.8% interest in Westlake Chemical OpCo LP. Westlake Chemical OpCo LP's assets consist of three ethylene production facilities in Calvert City, Kentucky, and Lake Charles, Louisiana 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 2020 results will be held Monday, May 4, 2020 at 1:00 PM Eastern Time (12:00 AM 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 647 07 89.

    A replay of the conference call will be available beginning two hours after its conclusion until 11:59 p.m. Eastern Time on Monday, May 11, 2020. To hear a replay, dial (855) 859-2056 or (404) 537-3406 for international callers. The replay passcode is 647 07 89.

    The conference call will also be available via webcast at: https://edge.media-server.com/mmc/p/pz3nynuo 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 March 31,

     

     

    2020

     

    2019

     

     

    (In thousands of dollars, except per unit data)

    Revenue

     

     

     

     

    Net sales—Westlake Chemical Corporation ("Westlake")

     

    $

    214,828

     

     

    $

    257,040

     

    Net co-product, ethylene and other sales—third parties

     

    35,721

     

     

    42,046

     

    Total net sales

     

    250,549

     

     

    299,086

     

    Cost of sales

     

    147,001

     

     

    208,432

     

    Gross profit

     

    103,548

     

     

    90,654

     

    Selling, general and administrative expenses

     

    6,196

     

     

    6,973

     

    Income from operations

     

    97,352

     

     

    83,681

     

    Other income (expense)

     

     

     

     

    Interest expense—Westlake

     

    (3,950

    )

     

    (5,900

    )

    Other income, net

     

    585

     

     

    815

     

    Income before income taxes

     

    93,987

     

     

    78,596

     

    Income tax provision

     

    217

     

     

    200

     

    Net income

     

    93,770

     

     

    78,396

     

    Less: Net income attributable to noncontrolling interests in Westlake Chemical OpCo LP ("OpCo")

     

    76,023

     

     

    63,441

     

    Net income attributable to Westlake Partners

     

    $

    17,747

     

     

    $

    14,955

     

     

     

     

     

     

    Net income per limited partners unit attributable to Westlake Partners (basic and diluted)

     

     

     

     

    Common units

     

    $

    0.50

     

     

    $

    0.46

     

     

     

     

     

     

    Distributions declared per unit

     

    $

    0.4714

     

     

    $

    0.4452

     

     

     

     

     

     

    MLP distributable cash flow

     

    $

    18,337

     

     

    $

    17,555

     

     

     

     

     

     

    Distributions declared

     

     

     

     

    Limited partner units—publicly and privately held

     

    $

    9,934

     

     

    $

    9,379

     

    Limited partner units—Westlake

     

    6,657

     

     

    6,287

     

    Total distributions declared

     

    $

    16,591

     

     

    $

    15,666

     

    EBITDA

     

    $

    123,968

     

     

    $

    111,340

     

    WESTLAKE CHEMICAL PARTNERS LP

     

    CONDENSED CONSOLIDATED BALANCE SHEETS

    (Unaudited)

     

     

     

    March 31,
    2020

     

    December 31,
    2019

     

     

    (In thousands of dollars)

    ASSETS

     

     

     

     

    Current assets

     

     

     

     

    Cash and cash equivalents

     

    $

    24,081

     

     

    $

    19,923

     

    Receivable under the Investment Management Agreement—Westlake

     

    161,759

     

     

    162,773

     

    Accounts receivable, net—Westlake

     

    40,560

     

     

    42,847

     

    Accounts receivable, net—third parties

     

    13,535

     

     

    9,914

     

    Inventories

     

    2,000

     

     

    2,484

     

    Prepaid expenses and other current assets

     

    204

     

     

    470

     

    Total current assets

     

    242,139

     

     

    238,411

     

    Property, plant and equipment, net

     

    1,092,120

     

     

    1,102,995

     

    Other assets, net

     

    48,768

     

     

    52,050

     

    Total assets

     

    $

    1,383,027

     

     

    $

    1,393,456

     

     

     

     

     

     

    LIABILITIES AND EQUITY

     

     

     

     

    Current liabilities (accounts payable and accrued liabilities)

     

    $

    30,666

     

     

    $

    38,849

     

    Long-term debt payable to Westlake

     

    399,674

     

     

    399,674

     

    Other liabilities

     

    2,596

     

     

    2,798

     

    Total liabilities

     

    432,936

     

     

    441,321

     

    Common unitholders—publicly and privately held

     

    472,428

     

     

    471,736

     

    Common unitholder—Westlake

     

    48,814

     

     

    48,350

     

    General partner—Westlake

     

    (242,572

    )

     

    (242,572

    )

    Total Westlake Partners partners' capital

     

    278,670

     

     

    277,514

     

    Noncontrolling interest in OpCo

     

    671,421

     

     

    674,621

     

    Total equity

     

    950,091

     

     

    952,135

     

    Total liabilities and equity

     

    $

    1,383,027

     

     

    $

    1,393,456

     

    WESTLAKE CHEMICAL PARTNERS LP

     

    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

    (Unaudited)

     

     

     

    Three Months Ended March 31,

     

     

    2020

     

    2019

     

     

    (In thousands of dollars)

    Cash flows from operating activities

     

     

     

     

    Net income

     

    $

    93,770

     

     

    $

    78,396

     

    Adjustments to reconcile net income to net cash provided by operating activities:

     

     

     

     

    Depreciation and amortization

     

    26,031

     

     

    26,844

     

    Other balance sheet changes

     

    (8,840

    )

     

    8,259

     

    Net cash provided by operating activities

     

    110,961

     

     

    113,499

     

    Cash flows from investing activities

     

     

     

     

    Additions to property, plant and equipment

     

    (11,989

    )

     

    (12,144

    )

    Maturities of investments with Westlake under the Investment Management Agreement

     

    79,000

     

     

    80,000

     

    Investments with Westlake under the Investment Management Agreement

     

    (78,000

    )

     

    (207,512

    )

    Other

     

     

     

    46

     

    Net cash used for investing activities

     

    (10,989

    )

     

    (139,610

    )

    Cash flows from financing activities

     

     

     

     

    Net proceeds from private placement of common units

     

     

     

    62,934

     

    Proceeds from debt payable to Westlake

     

     

     

    123,512

     

    Quarterly distributions to noncontrolling interest retained in OpCo by Westlake

     

    (79,223

    )

     

    (81,507

    )

    Quarterly distributions to unitholders

     

    (16,591

    )

     

    (13,957

    )

    Net cash provided by (used for) financing activities

     

    (95,814

    )

     

    90,982

     

    Net increase in cash and cash equivalents

     

    4,158

     

     

    64,871

     

    Cash and cash equivalents at beginning of period

     

    19,923

     

     

    19,744

     

    Cash and cash equivalents at end of period

     

    $

    24,081

     

     

    $

    84,615

     

    WESTLAKE CHEMICAL PARTNERS LP

     

    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,

     

     

    2019

     

    2020

     

    2019

     

     

    (In thousands of dollars)

    Net cash provided by operating activities

     

    $

    115,653

     

     

    $

    110,961

     

     

    $

    113,499

     

    Changes in operating assets and liabilities and other

     

    (23,743

    )

     

    (17,191

    )

     

    (35,103

    )

    Net Income

     

    91,910

     

     

    93,770

     

     

    78,396

     

    Add:

     

     

     

     

     

     

    Depreciation, amortization and disposition of property, plant and equipment

     

    27,048

     

     

    26,127

     

     

    27,302

     

    Mark-to-market adjustment gain on derivative contracts

     

    (5,695

    )

     

    (2,491

    )

     

    (715

    )

    Less:

     

     

     

     

     

     

    Contribution to turnaround reserves

     

    (3,961

    )

     

    (9,923

    )

     

    (3,848

    )

    Maintenance capital expenditures

     

    (11,327

    )

     

    (11,121

    )

     

    (11,320

    )

    Distributable cash flow attributable to noncontrolling interest in OpCo

     

    (79,223

    )

     

    (78,025

    )

     

    (72,260

    )

    MLP distributable cash flow

     

    $

    18,752

     

     

    $

    18,337

     

     

    $

    17,555

     

    WESTLAKE CHEMICAL PARTNERS LP

     

    RECONCILIATION OF EBITDA TO NET INCOME, INCOME FROM OPERATIONS AND NET CASH

    PROVIDED BY OPERATING ACTIVITIES

    (Unaudited)

     

     

     

    Three Months
    Ended December 31,

     

    Three Months Ended March 31,

     

     

    2019

     

    2020

     

    2019

     

     

    (In thousands of dollars)

    Net cash provided by operating activities

     

    $

    115,653

     

     

    $

    110,961

     

     

    $

    113,499

     

    Changes in operating assets and liabilities and other

     

    (23,743

    )

     

    (17,191

    )

     

    (35,103

    )

    Net Income

     

    91,910

     

     

    93,770

     

     

    78,396

     

    Less:

     

     

     

     

     

     

    Other income, net

     

    563

     

     

    585

     

     

    815

     

    Interest expense

     

    (4,187

    )

     

    (3,950

    )

     

    (5,900

    )

    Income tax provision

     

    (219

    )

     

    (217

    )

     

    (200

    )

    Income from operations

     

    95,753

     

     

    97,352

     

     

    83,681

     

    Add:

     

     

     

     

     

     

    Depreciation and amortization

     

    26,938

     

     

    26,031

     

     

    26,844

     

    Other income, net

     

    563

     

     

    585

     

     

    815

     

    EBITDA

     

    $

    123,254

     

     

    $

    123,968

     

     

    $

    111,340

     

     



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    Westlake Chemical Partners LP Announces First Quarter 2020 Results Westlake Chemical Partners LP (NYSE: WLKP) (the "Partnership") today reported net income attributable to the Partnership of $17.7 million, or $0.50 per limited partner unit, for the three months ended March 31, 2020, an increase of $2.7 million …