Westlake Chemical Partners LP Announces First Quarter 2016 Earnings

HOUSTON, May 3, 2016 /PRNewswire/ -- Westlake Chemical Partners LP (NYSE: WLKP) (the "Partnership") today reported net income attributable to the Partnership of $12.1 million, or $0.45 per limited partner unit, for the three months ended March 31, 2016, an increase of $3.6 million compared to first quarter 2015 net income attributable to the Partnership of $8.5 million, or $0.31 per limited partner unit. For the three months ended March 31, 2016, MLP distributable cash flow was $9.5 million, an increase of $0.5 million compared to first quarter 2015 MLP distributable cash flow of $9.0 million. The increases in net income attributable to the Partnership and MLP distributable cash flow compared to the first quarter 2015 are primarily due to higher operating rates and the purchase of an additional 2.7% interest in Westlake Chemical OpCo LP ("OpCo") by the Partnership on April 1, 2015.

The Partnership's first quarter 2016 net income of $12.1 million, or $0.45 per limited partner unit, increased by $1.3 million from the fourth quarter 2015 net income of $10.8 million, or $0.40 per limited partner unit. First quarter 2016 MLP distributable cash flow of $9.5 million decreased by $0.6 million compared to fourth quarter 2015 MLP distributable cash flow of $10.1 million, largely due to increased maintenance capital expenditures at OpCo's Petro 1 facility in Lake Charles, Louisiana.

On April 27, 2016, the Board of Directors of Westlake Chemical Partners GP LLC, the general partner of the Partnership, announced a quarterly distribution for the first quarter of 2016 of $0.3168 per unit, and two thousand dollars to holders of incentive distribution rights ("IDR"), to be payable on May 24, 2016 to unit and IDR holders of record on May 10, 2016. The MLP distributable cash flow provided coverage of 1.11x the declared distributions with respect to the first quarter of 2016. The first quarter 2016 distribution increased 12.0% compared to the first quarter 2015 distribution and 2.86% compared to the fourth quarter 2015 distribution.

OpCo's sales agreement with Westlake Chemical Corporation 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 Chemical Corporation 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 with OpCo's performance for the first quarter of 2016 and look forward to the completion of the expansion projects at our ethylene facilities. Our 250 million pound expansion at the Petro 1 facility in Lake Charles, Louisiana is underway and scheduled for completion early in the third quarter this year. The Calvert City, Kentucky expansion planned for the first half of next year, along with other initiatives, is expected to increase our ethylene capacity by 100 million pounds. We believe these projects will allow us to continue on our path of increasing our distributions at a low double-digit growth rate for the next few years," 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 timing 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, 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 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 Chemical Corporation's noncontrolling interest in Westlake Chemical OpCo LP. Because MLP distributable cash flow may be defined differently by other companies in our industry, our definition of MLP distributable cash flow may not be comparable to similarly titled measures of other companies.

Westlake Chemical Partners LP

Westlake Chemical Partners LP 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' first quarter 2016 results will be held Tuesday, May 3, 2016 at 12:00 p.m. Eastern Time (11:00 a.m. 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 90231034.

A replay of the conference call will be available beginning two hours after its conclusion until 11:59 p.m. Eastern Time on Tuesday, May 10, 2016. To hear a replay, dial (855) 859-2056 or (404) 537-3406 for international callers. The replay passcode is 90231034.

The conference call will also be available via webcast at: http://edge.media-server.com/m/p/nng8dayp and the earnings release can be obtained via the Partnership web page at: http://westlakepartners.investorroom.com/news-events

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SOURCE Westlake Chemical Partners LP