WLKP - Earnings call transcript Q3 2017 | Westlake Chemical Partners LP

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Operator

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the Westlake Chemical Partners Third Quarter 2017 Earnings Conference Call.

During the presentation, all participants will be in a listen-only mode. After the speakers’ remarks, you will be invited to participate in a question-and-answer session.

and XXXX. conference ladies today, being reminder, X, November a gentlemen, is this recorded As now to Vice would Jeff I like Holy, today’s over Westlake host, to Chemical Partners President Treasurer. turn and the call may you begin. Sir,

Jeff Holy

call management Chief Thank members Steve with Partners quarter few who The the today open comments Bender, financial provide as Vice our will regarding as Chemical team. by then more in our will you. the Chao, on of our am and our a quarter call. third our Good will and Executive performance performance welcome detailed XXXX Albert, operating everyone to Financial begin Steve at morning, with and current President other outlook Westlake results. I Westlake Albert a conference our Officer, joined Chemical third and opportunities. well and and conference Partners’ look President CEO;

few open to and will comments then add Albert will a questions. we Finally, up concluding call the

call, Eastern information a morning, SEC third and our is XXXX today’s the filings. time conference webpage numbers. available dial the call the you A any sensitive that replay will Partners accessed replay. only many Today, we or Westlake During Westlake time finally OpCo information webcast subsidiary Westlake and being that This Westlake and information regulatory discussed which able beginning other of of results. details certain Chemical ethylene at as to management sell, funds competitive are by the I Internet as code be the could Westlake parent issued in would made at on hours be ethylene available well therefore of ability Time at section our wlkpartners.com. system actions, can on this capital Westlake November Westlake you This certain Please on differ XXX-XXX-XXXX. to replay may and assumptions at call release should is after owns products to of operating available our quarter XXXX. refer to governmental proposed the and information of the markets with prevailing management’s which to refer Chemical to to risk today, speaks the note of replay we changes accessed expectations discuss factors, thus press and in XX, upon our subject reported financial currently Domestic to refer callers access pricing company, or of is borrow of p.m. that XXXXXXXX. is a based results Press Release and factors or through XXX-XXX-XXXX. economic suggest OpCo November callers until The International as live this access Chemical our call and able will and be webpage price that olefins the conditions, X, may risks that to actual our uncertainties. reference that Chemical, assets. or longer pressures, following going forward-looking in we and references is completion the Partnership advised Partnership; are to wlkpartners.com. no topics LP, broadcast ourselves predictions Corporation; These based contain are sell advise dialing this two this may access beliefs difficulties, The that as XX:XX call Actual accurate volume including operational be statements to as Partners and forward-looking on management. of by materially document are

the I Now, Chao. like turn over Albert? call would to Albert to

Albert Chao

our inventory; plan cash since qualified can of we with flow the morning’s unitholders in OpCo. increase we with producing transaction XXXX. to of distributions. dropdown August a increase million. this in has in distributions XXXX, we the distribution. well discuss We to dropdown IPO an interest flow. increase offering the our cash initial XXXX, of a consecutive are OpCo was additional constructing, respect increase XXXX transaction, ladies effective jointly of ownership quarter our the sponsor, quarter X% Westlake the from Jeff. XXXX X.X% as acquisition earnings net our upon our announced in joint also Thank offering the an distribution second income quarter opportunity as from $XX million $XX August Partners since quarterly and a third you as unit XXth record considered our equity with first other This MLP is since Chemical. was allow a X, net results. We’ll income Xst Coast and in to thank Westlake to the morning, July distributions is first accretive XX% income either our third path of and for sponsor completed us which and was $X.XXXX In grow our Lotte XXXX. the our large our pursue which milestone quarter will our Partners XXXX. unitholders, growth or of its was XXXX joining reported as earnings XXXX. and including quarter through be This OpCo’s our release, streams, could earnings public directly second on Gulf of opportunities dropdown Good grow additional of we and venture us November that press third that consolidated third gentlemen you, per our XX% of OpCo to continue for quarter and to for approximately completion a This On Westlake to ethylene continue of The as new in quarter cracking growing

to distributable Steve quarter. third distributions. operating the over quarter, for call to X.XX of Steve? I coverage on For would and the results turn more provided cash the to like detail provide third the flow our times now MLP financial declared

Steve Bender

and $XX sales consolidated you, morning, XXXX. In per income or Albert, of net OpCo’s Partners’ for release, $X.XX $XX unit. $XXX press limited partner a everyone. million we quarter on this consolidated morning’s reported million million Westlake good earnings the net was third income including Thank record of

flow $XX MLP also the quarter. million distributable for We of cash third reported

primarily Third XXXX was income in $X.XX the million. income quarter net net $X third of $XX of for million higher in X% quarter the MLP limited higher distributable distributable net flow in due increased facilities compared million XXXX. our all OpCo, was facilities. unit the pound or of per that increase due at the following to Partnership Westlake XXXX, by the were in $XX of result and ownership Calvert in Agreement X, increased includes XXXX. effective certain X of was all in to increased flow This production production additional increased and of Charles capacity April This third in cash quarter than MLP production $X a Westlake XXX the interest million. MLP our increase OpCo’s the facility Petro from to the Ethylene reimbursements City increase million million July $X increase distributable and offset The Partnership $X booked maintenance income July Sales expansion primarily at Partners pound partially dropdown the XXX for XXXX third as partner quarter cost. OpCo’s at Lake third interest million transaction This at quarter was XXXX completed million cash by of cash in XXXX of the of that OpCo’s facility was of more Chemical under flow expansion

higher XXXX outage Calvert second planned income The $X $XX prior million third flow the to quarter distributable unplanned million XXXX quarter XXXX the to expansion higher turnaround City million. of X. MLP cash XXXX of OpCo of $XX ownership cash net the Partners’ by of distributable for of increases was the The million as increased was distributable quarter completion in at flow third flow production as quarter the The MLP primarily the $XX million. well million of third negatively and than increased net $XX compared impacted quarter. was Petro as income than and second due was interest quarter income and net in cash the $X

maintenance of ownership months million $XX of million Partnership along distributable Petro cost MLP year cash the income distributable reimbursements nine as at $XX ethylene margin first XXXX to partner sales $XX Partnership’s booked us of City, in Sales the opportunities as contract, increased quarter Calvert with in f increase due to per prior a ethylene ownership the third flow OpCo interest offset Agreement increased Partnership per Partnership lower partner and due the nine can for unit. compared in the months to the period. net cash to is generate limited Westlake the to be flow and facilities, Chemical, in by OpCo’s to This of was X prior nine the million cash of all Westlake and $X.XX XXXX higher $X.XX the were first pound ethylene $X.XX of XXXX rates. the of the more from from months Chemical, at of derivative for income per certain production Partnership’s look Westlake provisions net partially than $XX the margin of ethylene Sales OpCo the in of was increase operating production, our $X incentivizes short capacity the the million The increased business. of fee higher the of sponsor flow based Partnership. first to protects under Ethylene attributable net is the or the of flow increase their For represents attributable the $XX with contract year structured ethylene million. to period months to first than flow to limited associated continue This compared million MLP XXXX. the the XX% unit income for with Ethylene the of benefit in The and net which to that to was XXXX’s stable long-term Agreement or is with that our XXXX, take-or-pay who nine to for has months This interest Partnership first distributable nine cash cash production volatility

third XXX OpCo represents distribution City was we to during on November MLP double pound distributions, This Partnership. nine quarterly was XXXX, in of quarterly unitholders the million cash $XX This the million the the the balances down and investment mid-March debt an $XXX a provided cash in first coverage our expansion was we of flow at of $X.XXXX at completed a cash increase deliver XXXX, Westlake and $XXX completed million million expansion with million began Calvert and turnaround, XX% $XXX the facility. distribution expenditures end of X, spent distributable ended had times increases $XXX the yearly management of a at At million per which as we months basis. For the which million capital $XX Long-term our invested Chemical targeting to of digit of continues OpCo was annual level path in declared in low X.XX April. million. the us $XX of quarter, and consistent for rate. unit. growth quarter agreement to

turn Now, to I’d comments. to closing to the call Albert Albert? back make over like some

Albert Chao

and dropdown flow. Thank ethylene foundation flow increase our in with transactions, enables growth us cash unitholders. for our acquisition This cash Westlake and growth us the forms long-term you, Steve. pursue to fee-based contract earnings fixed deliver generated our organic sales stable The opportunities to to distributions to by Chemical third-party successfully margin

and we Charles forward, Lake in to growth double added deliver The and Calvert fund our have distributions low to plan these ethylene XXXX our in XXXX recent continue City Looking production unitholders. to capacity digit in expansions to to distributions.

recent capacity through to dropdown future distribution highlights transactions. in and most extensive the fund earnings OpCo dropdown Our growth

options earnings will grow much continue We available flow annual call growth and for distributable targeted MLP morning. listening to distributions. you our us cash to Thank third this all evaluate continue our rate quarter very in to to

the back turn Jeff. to call will I over Now,

Jeff Holy

Thank you, Albert.

this of taking Before call. remind questions, replay conclude starting the that to we available would like will we you two be teleconference after hours begin I a

provide we the now will at take that will call. We number end of questions. again the Vince,

Operator

of Thank you. Tudor, first Blair [Operator Instructions] from Pickering, Our question Holt. Matthew is

Your is open. line

Matthew Blair

XXX level Steve, have QX the in was do And QX. pounds I it you production think million handy?

Steve Bender

XXX.

Matthew Blair

think expect And there I XXXX? it. we Got XXXX. a at turnaround was turnaround in in X Petro the last should

Steve Bender

and thinking do Matthew, we our expected be now to as to continue our current work, timing XXXX. is

Matthew Blair

on early And likely got between it, any another financing, an apparent drop think it. then, would do XXXX XX-XX in expect another more be and you would Got and XXXX that you would do split And come to thoughts event? you debt equity? asset expect

Steve Bender

is continue want in down to expect we a we undertake accretive would make expectation for transaction will that And XXXX. it drop would unitholders. my I Matthew, to

some the And forward. And XX-XX would be was debt, a reasonable so portion in have expectation trough would of recently used meaningful march I would most expect I to ratio debt this expect half-half, we equity. as we that

Matthew Blair

Very you then the average the helpful. handy, have And then, quarter lastly, the for and the count unit do ending balance? both

Steve Bender

handy, will me give the I you’ll it I call have if but you. don’t it after to call,

Operator

[Operator Instructions] Our Evans [John next is from line Your open. Capital] from question Street is

Unidentified Analyst

strategy kind talk you in it’s talk your the near-term just forward little since you see a been that that about distribution? the public just process about thought Is it you growth bit you relative? kind you’ve on that Can can decelerate accelerate a You’ve would of going bit reason or just or it, about a and your any little rate. there XX% become grow

Steve Bender

about a capacity continue that the growth to the company As in grow distributions, double operating in see our to low distributions. we long rate. can grow that is continue very growth we you the intent think to digit And with it have

as for long reflecting as plan. be our that’s continuance; the that those would the transactions, our appropriate So, market value is

Operator

now time, session this ended. there At is the closing any remarks? Q&A Are

Jeff Holy

for hope our next for conference us today’s year We call. you join Thank you will our call again discuss fourth full to and quarter results. participating in

Operator

for earnings today’s Chemical you Westlake Partners Thank XXXX call. third in quarter conference participating

beginning be be access may until is the the November be dial As access XXX- replay following XX.XX can a XX, XXX-XXX-XXXX. XXXX. Eastern available reminder, accessed XXXXXXXX. after code call p.m. may replay callers callers hours accessed the and on call ended replay The Domestic at is Time by for this The calling two XXX-XXXX. should International numbers.

Westlake Chemical Partners (WLKP) 7 Nov 172017 Q3 Earnings call transcript