First quarter 2018 net income attributable to the Company of
"We are very pleased with the record results for the first quarter of
2018 and the continued performance of our businesses. Demand remains
strong for our products in both the Olefins and Vinyls segments due to
continued growth in the
Net cash provided by operating activities was
Record EBITDA (earnings before interest expense, income taxes,
depreciation and amortization) of
OLEFINS SEGMENT
The Olefins segment income from operations of
Olefins income from operations of
VINYLS SEGMENT
The Vinyls segment reported record income from operations for the first
quarter of 2018 of
Vinyls income from operations for the first quarter of 2018 of
The statements in this release and the related teleconference
relating to matters that are not historical facts, including statements
regarding targeted synergies and cost reductions, 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: general economic and business
conditions; the cyclical nature of the chemical industry; availability,
cost and volatility of raw materials and utilities, including natural
gas and natural gas liquids from shale production; the price of crude
oil; uncertainties associated with
Use of Non-GAAP Financial Measures
This release makes reference to certain "non-GAAP" financial measures, such as EBITDA and net income excluding certain tax benefits, 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 ("U.S. GAAP"), but believe that certain non-GAAP financial measures, such as EBITDA, provide useful supplemental information to investors regarding the underlying business trends and performance of the company's ongoing operations and are useful for period-over-period comparisons of such operations. We also believe providing the non-GAAP measure net income excluding certain tax benefits will help investors compare results between periods given the one-time nature of the tax benefit associated with the Tax Act. 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. A reconciliation of EBITDA to reported net income and to net cash provided by operating activities can be found in the financial schedules at the end of this press release.
Westlake Chemical Corporation 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 May 10, 2018. To hear a replay, dial (855) 859-2056 or (404) 537-3406 for international callers. The replay passcode is 7684638.
The conference call will also be available via webcast at: https://edge.media-server.com/m6/p/5ctk3hq6 and the earnings release can be obtained via the company's web page at: http://www.westlake.com/investor-relations.
WESTLAKE CHEMICAL CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) |
||||||||||
Three Months Ended March 31, | ||||||||||
2018 | 2017 | |||||||||
(In millions of dollars, except per |
||||||||||
Net sales | $ | 2,150 | $ | 1,943 | ||||||
Cost of sales | 1,608 | 1,577 | ||||||||
Gross profit | 542 | 366 | ||||||||
Selling, general and administrative expenses | 108 | 99 | ||||||||
Amortization of intangibles | 26 | 25 | ||||||||
Transaction and integration-related costs | 7 | 8 | ||||||||
Income from operations | 401 | 234 | ||||||||
Interest expense | (37 | ) | (40 | ) | ||||||
Other income, net | 22 | 7 | ||||||||
Income before income taxes | 386 | 201 | ||||||||
Provision for income taxes | 89 | 56 | ||||||||
Net income | 297 | 145 | ||||||||
Net income attributable to noncontrolling interests | 10 | 7 | ||||||||
Net income attributable to Westlake Chemical Corporation | $ | 287 | $ | 138 | ||||||
Earnings per common share attributable to Westlake Chemical Corporation: | ||||||||||
Basic | $ | 2.21 | $ | 1.07 | ||||||
Diluted | $ | 2.20 | $ | 1.06 |
WESTLAKE CHEMICAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) |
||||||||
March 31, 2018 |
December 31, 2017 |
|||||||
(In millions of dollars) | ||||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 851 | $ | 1,531 | ||||
Accounts receivable, net | 1,135 | 1,001 | ||||||
Inventories | 944 | 900 | ||||||
Prepaid expenses and other current assets | 29 | 31 | ||||||
Total current assets | 2,959 | 3,463 | ||||||
Property, plant and equipment, net | 6,447 | 6,412 | ||||||
Other assets, net | 2,198 | 2,201 | ||||||
Total assets | $ | 11,604 | $ | 12,076 | ||||
LIABILITIES AND EQUITY | ||||||||
Current liabilities (accounts payable and accrued liabilities) | $ | 1,192 | $ | 1,257 | ||||
Current portion of long-term debt | 461 | 710 | ||||||
Long-term debt, net | 2,666 | 3,127 | ||||||
Other liabilities | 1,644 | 1,613 | ||||||
Total liabilities | 5,963 | 6,707 | ||||||
Total Westlake Chemical Corporation stockholders' equity | 5,141 | 4,874 | ||||||
Noncontrolling interests | 500 | 495 | ||||||
Total equity | 5,641 | 5,369 | ||||||
Total liabilities and equity | $ | 11,604 | $ | 12,076 |
WESTLAKE CHEMICAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) |
||||||||||
Three Months Ended March 31, | ||||||||||
2018 | 2017 | |||||||||
(In millions of dollars) | ||||||||||
Cash flows from operating activities | ||||||||||
Net income | $ | 297 | $ | 145 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||
Depreciation and amortization | 156 | 150 | ||||||||
Deferred income taxes | 16 | (6 | ) | |||||||
Other balance sheet changes | (244 | ) | (132 | ) | ||||||
Net cash provided by operating activities | 225 | 157 | ||||||||
Cash flows from investing activities | ||||||||||
Additions to property, plant and equipment | (154 | ) | (134 | ) | ||||||
Additions to investments in unconsolidated subsidiaries | (26 | ) | (15 | ) | ||||||
Other | 2 | 1 | ||||||||
Net cash used for investing activities | (178 | ) | (148 | ) | ||||||
Cash flows from financing activities | ||||||||||
Dividends paid | (27 | ) | (24 | ) | ||||||
Distributions to noncontrolling interests | (7 | ) | (4 | ) | ||||||
Proceeds from debt issuance and drawdown of revolver | 4 | 52 | ||||||||
Repayment of term loan | — | (150 | ) | |||||||
Repayment of revolver | — | (125 | ) | |||||||
Repayment of notes payable | (706 | ) | (2 | ) | ||||||
Other | 5 | — | ||||||||
Net cash used for financing activities | (731 | ) | (253 | ) | ||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 4 | 3 | ||||||||
Net decrease in cash, cash equivalents and restricted cash | (680 | ) | (241 | ) | ||||||
Cash, cash equivalents and restricted cash at beginning of period | 1,554 | 646 | ||||||||
Cash, cash equivalents and restricted cash at end of period | $ | 874 | $ | 405 |
WESTLAKE CHEMICAL CORPORATION
SEGMENT INFORMATION (Unaudited) |
||||||||||
Three Months Ended March 31, | ||||||||||
2018 | 2017 | |||||||||
(In millions of dollars) | ||||||||||
Net external sales | ||||||||||
Olefins | $ | 503 | $ | 543 | ||||||
Vinyls | 1,647 | 1,400 | ||||||||
$ | 2,150 | $ | 1,943 | |||||||
Income (loss) from operations | ||||||||||
Olefins | $ | 163 | $ | 180 | ||||||
Vinyls | 266 | 70 | ||||||||
Corporate and other | (28 | ) | (16 | ) | ||||||
$ | 401 | $ | 234 | |||||||
Depreciation and amortization | ||||||||||
Olefins | $ | 34 | $ | 41 | ||||||
Vinyls | 118 | 107 | ||||||||
Corporate and other | 4 | 2 | ||||||||
$ | 156 | $ | 150 | |||||||
Other income, net | ||||||||||
Olefins | $ | 2 | $ | 1 | ||||||
Vinyls | 12 | 6 | ||||||||
Corporate and other | 8 | — | ||||||||
$ | 22 | $ | 7 |
WESTLAKE CHEMICAL CORPORATION |
|||||||||||||||
RECONCILIATION OF EBITDA TO NET INCOME AND TO NET CASH PROVIDED BY OPERATING ACTIVITIES (Unaudited) |
|||||||||||||||
Three Months |
Three Months Ended March 31, | ||||||||||||||
2017 | 2018 | 2017 | |||||||||||||
(In millions of dollars) | |||||||||||||||
Net cash provided by operating activities | $ | 575 | $ | 225 | $ | 157 | |||||||||
Changes in operating assets and liabilities and other | (316 | ) | 88 | (18 | ) | ||||||||||
Deferred income taxes | 557 | (16 | ) | 6 | |||||||||||
Net income | $ | 816 | $ | 297 | $ | 145 | |||||||||
Add: | |||||||||||||||
Depreciation and amortization | 152 | 156 | 150 | ||||||||||||
Interest expense | 40 | 37 | 40 | ||||||||||||
Provision for (benefit from) income taxes | (491 | ) | 89 | 56 | |||||||||||
EBITDA | $ | 517 | $ | 579 | $ | 391 |
WESTLAKE CHEMICAL CORPORATION | |||||||||||||||
SUPPLEMENTAL INFORMATION | |||||||||||||||
Product Sales Price and Volume Variance by Operating Segments | |||||||||||||||
First Quarter 2018 vs. First Quarter |
First Quarter 2018 vs. Fourth Quarter |
||||||||||||||
Average |
Volume |
Average |
Volume | ||||||||||||
Olefins | +1.2% | -8.6% | +0.7% | -3.6% | |||||||||||
Vinyls | +12.0% | +5.6% | +1.8% | +8.4% | |||||||||||
Company | +9.0% | +1.7% | +1.5% | +5.4% | |||||||||||
Average Quarterly Industry Prices (1) |
|||||||||||||||
|
Quarter Ended | ||||||||||||||
March 31, |
June 30, |
September 30, |
December 31, |
March 31, |
|||||||||||
Ethane (cents/lb) | 7.8 | 8.3 | 8.8 | 8.4 | 8.5 | ||||||||||
Propane (cents/lb) | 16.9 | 14.9 | 18.2 | 22.6 | 20.2 | ||||||||||
Ethylene (cents/lb) (2) | 31.2 | 27.6 | 24.7 | 28.4 | 23.6 | ||||||||||
Polyethylene (cents/lb) (3) | 67.3 | 69.0 | 70.7 | 77.5 | 73.7 | ||||||||||
Styrene (cents/lb) (4) | 85.6 | 84.4 | 85.1 | 91.1 | 98.3 | ||||||||||
Caustic soda ($/short ton) (5) | 568.3 | 623.3 | 646.7 | 703.3 | 748.3 | ||||||||||
Chlorine ($/short ton) (6) | 305.0 | 325.0 | 332.5 | 332.5 | 332.5 | ||||||||||
PVC (cents/lb) (7) | 60.2 | 62.5 | 62.5 | 65.2 | 67.2 |
________________ | ||
(1) | Industry pricing data was obtained from IHS Markit ("IHS"). We have not independently verified the data. | |
(2) | Represents average North American spot prices of ethylene over the period as reported by IHS. | |
(3) | Represents average North American net transaction prices of polyethylene low density GP-Film grade over the period as reported by IHS. | |
(4) | Represents average North American contract prices of styrene over the period as reported by IHS. | |
(5) | Represents average North American United States Gulf Coast undiscounted contract prices of caustic soda over the period as reported by IHS. During the first quarter of 2018, IHS discontinued the previous caustic soda index that we used. For comparability, the average caustic soda for the prior periods presented are based on the current index. | |
(6) | Represents average North American contract prices of chlorine (into chemicals) over the period as reported by IHS. | |
(7) | Represents average North American contract prices of polyvinyl chloride (PVC) over the period as reported by IHS. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20180503005129/en/
Source:
Westlake Chemical Corporation
Investors
Steve Bender,
(713) 960-9111
or
Media
L. Benjamin Ederington,
(713) 960-9111