Westlake Chemical Partners LP Announces Second Quarter 2016 Earnings and the completion of OpCo's 250 million pound ethylene expansion in Lake Charles, Louisiana

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

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