Third quarter 2014 net income attributable to
"We delivered strong results for the quarter and reported record operating income of
For the nine months ended
EBITDA (earnings before interest expense, income taxes, depreciation and amortization) of
Net cash provided by operating activities was
OLEFINS SEGMENT
The Olefins segment reported income from operations of
The Olefins segment reported income from operations of
The Olefins segment reported income from operations of
VINYLS SEGMENT
The Vinyls segment reported record income from operations of
The Vinyls segment reported income from operations of
The Vinyls segment reported income from operations of
The statements in this release and the related teleconference relating to matters that are not historical facts, such as statements regarding our estimated annual tax rate, cost advantages and the benefits of certain strategic initiatives and growth opportunities 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 from shale production; Westlake's ability to integrate acquired businesses; currency exchange risks; uncertainties associated with
This release makes reference to certain "non-GAAP" financial measures, such as EBITDA, 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. 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 four hours after its conclusion until
The conference call will also be available via webcast at: http://edge.media-server.com/m/p/v8wqukso/lan/en and the earnings release can be obtained via the company's web page at: http://www.westlake.com/fw/main/IR_Home_Page-123.html.
WESTLAKE CHEMICAL CORPORATION |
||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) |
||||||||||||
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||
2014 |
2013 |
2014 |
2013 |
|||||||||
(In thousands of dollars, except per share data) |
||||||||||||
Net sales |
$ |
1,253,227 |
$ |
1,004,165 |
$ |
3,279,479 |
$ |
2,807,859 |
||||
Cost of sales |
891,707 |
699,694 |
2,324,978 |
2,002,092 |
||||||||
Gross profit |
361,520 |
304,471 |
954,501 |
805,767 |
||||||||
Selling, general and administrative expenses |
54,759 |
37,869 |
132,897 |
109,883 |
||||||||
Income from operations |
306,761 |
266,602 |
821,604 |
695,884 |
||||||||
Interest expense |
(9,486) |
(3,297) |
(28,182) |
(14,921) |
||||||||
Other (expense) income, net |
(2,670) |
(287) |
4,440 |
3,137 |
||||||||
Income before income taxes |
294,605 |
263,018 |
797,862 |
684,100 |
||||||||
Provision for income taxes |
124,449 |
92,728 |
300,231 |
244,647 |
||||||||
Net income |
170,156 |
170,290 |
497,631 |
439,453 |
||||||||
Net income attributable to noncontrolling interests |
2,399 |
— |
2,399 |
— |
||||||||
Net income attributable to Westlake Chemical Corporation |
$ |
167,757 |
$ |
170,290 |
$ |
495,232 |
$ |
439,453 |
||||
Earnings per common share attributable to Westlake Chemical Corporation: (1) |
||||||||||||
Basic |
$ |
1.26 |
$ |
1.28 |
$ |
3.71 |
$ |
3.29 |
||||
Diluted |
$ |
1.25 |
$ |
1.27 |
$ |
3.69 |
$ |
3.27 |
_____________ |
|
(1) |
On February 14, 2014, our Board of Directors authorized a two-for-one split of our common stock. Stockholders of record as of February 28, 2014 were entitled to one additional share for every share outstanding, which was distributed on March 18, 2014. Per share data for the three and nine months ended September 30, 2013 have been restated to reflect the effect of the stock split. |
WESTLAKE CHEMICAL CORPORATION |
||||||
CONSOLIDATED BALANCE SHEETS (Unaudited) |
||||||
September 30, |
December 31, |
|||||
(In thousands of dollars) |
||||||
ASSETS |
||||||
Current assets |
||||||
Cash and cash equivalents |
$ |
813,468 |
$ |
461,301 |
||
Marketable securities |
— |
239,388 |
||||
Accounts receivable, net |
592,964 |
428,457 |
||||
Inventories |
500,552 |
471,879 |
||||
Other current assets |
44,964 |
48,057 |
||||
Total current assets |
1,951,948 |
1,649,082 |
||||
Property, plant and equipment, net |
2,710,475 |
2,088,014 |
||||
Other assets, net |
463,860 |
323,813 |
||||
Total assets |
$ |
5,126,283 |
$ |
4,060,909 |
||
LIABILITIES AND EQUITY |
||||||
Current liabilities (accounts payable and accrued liabilities) |
$ |
573,036 |
$ |
404,858 |
||
Long-term debt |
763,968 |
763,879 |
||||
Other liabilities |
666,931 |
473,569 |
||||
Total liabilities |
2,003,935 |
1,642,306 |
||||
Total Westlake Chemical Corporation stockholders' equity |
2,833,861 |
2,418,603 |
||||
Noncontrolling interests |
288,487 |
— |
||||
Total equity |
3,122,348 |
2,418,603 |
||||
Total liabilities and equity |
$ |
5,126,283 |
$ |
4,060,909 |
WESTLAKE CHEMICAL CORPORATION
(Unaudited) |
||||||
Nine Months Ended September 30, |
||||||
2014 |
2013 |
|||||
(In thousands of dollars) |
||||||
Cash flows from operating activities |
||||||
Net income |
$ |
497,631 |
$ |
439,453 |
||
Adjustments to reconcile net income to net cash provided by operating activities: |
||||||
Depreciation and amortization |
148,394 |
116,294 |
||||
Deferred income taxes |
34,459 |
83,443 |
||||
Other balance sheet changes |
95,640 |
(91,690) |
||||
Net cash provided by operating activities |
776,124 |
547,500 |
||||
Cash flows from investing activities |
||||||
Acquisition of business, net of cash acquired |
(611,087) |
(178,309) |
||||
Additions to equity investments |
— |
(23,338) |
||||
Additions to property, plant and equipment |
(311,183) |
(498,290) |
||||
Construction of assets pending sale-leaseback |
— |
(136) |
||||
Proceeds from disposition of assets |
145 |
78 |
||||
Proceeds from repayment of loan acquired |
45,923 |
— |
||||
Proceeds from repayment of loan to affiliate |
— |
167 |
||||
Proceeds from sales and maturities of securities |
342,045 |
239,764 |
||||
Purchase of securities |
(117,332) |
(232,286) |
||||
Settlements of derivative instruments |
(689) |
(2,297) |
||||
Net cash used for investing activities |
(652,178) |
(694,647) |
||||
Cash flows from financing activities |
||||||
Capitalized debt issuance costs |
(1,167) |
— |
||||
Dividends paid |
(55,690) |
(40,204) |
||||
Net proceeds from issuance of Westlake Chemical Partners LP common units |
286,088 |
— |
||||
Proceeds from exercise of stock options |
5,502 |
3,182 |
||||
Repurchase of common stock for treasury |
(9,495) |
(19,409) |
||||
Windfall tax benefits from share-based payment arrangements |
6,670 |
5,056 |
||||
Net cash provided by (used for) financing activities |
231,908 |
(51,375) |
||||
Effect of exchange rate changes on cash |
(3,687) |
— |
||||
Net increase (decrease) in cash and cash equivalents |
352,167 |
(198,522) |
||||
Cash and cash equivalents at beginning of period |
461,301 |
790,078 |
||||
Cash and cash equivalents at end of period |
$ |
813,468 |
$ |
591,556 |
WESTLAKE CHEMICAL CORPORATION
(Unaudited) |
||||||||||||
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||
2014 |
2013 |
2014 |
2013 |
|||||||||
(In thousands of dollars) |
||||||||||||
Net external sales |
||||||||||||
Olefins |
$ |
703,097 |
$ |
679,339 |
$ |
2,124,948 |
$ |
1,885,525 |
||||
Vinyls |
550,130 |
324,826 |
1,154,531 |
922,334 |
||||||||
$ |
1,253,227 |
$ |
1,004,165 |
$ |
3,279,479 |
$ |
2,807,859 |
|||||
Income (loss) from operations |
||||||||||||
Olefins |
$ |
259,277 |
$ |
237,239 |
$ |
770,267 |
$ |
585,958 |
||||
Vinyls |
59,445 |
39,554 |
76,460 |
136,123 |
||||||||
Corporate and other |
(11,961) |
(10,191) |
(25,123) |
(26,197) |
||||||||
$ |
306,761 |
$ |
266,602 |
$ |
821,604 |
$ |
695,884 |
|||||
Depreciation and amortization |
||||||||||||
Olefins |
$ |
26,443 |
$ |
26,515 |
$ |
79,811 |
$ |
76,415 |
||||
Vinyls |
27,336 |
14,089 |
68,127 |
39,507 |
||||||||
Corporate and other |
141 |
124 |
456 |
372 |
||||||||
$ |
53,920 |
$ |
40,728 |
$ |
148,394 |
$ |
116,294 |
|||||
Other income (expense), net |
||||||||||||
Olefins |
$ |
1,609 |
$ |
728 |
$ |
4,262 |
$ |
5,889 |
||||
Vinyls |
1,189 |
(742) |
942 |
(1,687) |
||||||||
Corporate and other |
(5,468) |
(273) |
(764) |
(1,065) |
||||||||
$ |
(2,670) |
$ |
(287) |
$ |
4,440 |
$ |
3,137 |
WESTLAKE CHEMICAL CORPORATION
PROVIDED BY OPERATING ACTIVITIES (Unaudited) |
|||||||||||||||
Three Months Ended |
Three Months Ended |
Nine Months Ended |
|||||||||||||
2014 |
2014 |
2013 |
2014 |
2013 |
|||||||||||
(In thousands of dollars) |
|||||||||||||||
EBITDA |
$ |
319,891 |
$ |
358,011 |
$ |
307,043 |
$ |
974,438 |
$ |
815,315 |
|||||
Less: |
|||||||||||||||
Provision for income taxes |
92,407 |
124,449 |
92,728 |
300,231 |
244,647 |
||||||||||
Interest expense |
9,539 |
9,486 |
3,297 |
28,182 |
14,921 |
||||||||||
Depreciation and amortization |
48,502 |
53,920 |
40,728 |
148,394 |
116,294 |
||||||||||
Net income |
169,443 |
170,156 |
170,290 |
497,631 |
439,453 |
||||||||||
Changes in operating assets and liabilities |
39,210 |
158,626 |
98,712 |
244,034 |
24,604 |
||||||||||
Deferred income taxes |
11,084 |
15,100 |
23,018 |
34,459 |
83,443 |
||||||||||
Net cash provided by operating activities |
$ |
219,737 |
$ |
343,882 |
$ |
292,020 |
$ |
776,124 |
$ |
547,500 |
WESTLAKE CHEMICAL CORPORATION
Product Sales Price and Volume Variance by Operating Segments |
||||||||
Third Quarter 2014 vs. |
Third Quarter 2014 vs. |
|||||||
Average Sales Price |
Volume |
Average Sales Price |
Volume |
|||||
Olefins |
+10.7% |
-7.2% |
+1.5% |
-0.9% |
||||
Vinyls |
+1.6% |
+67.8% |
+2.1% |
+81.6% |
||||
Company |
+7.8% |
+17.1% |
+1.6% |
+23.9% |
Average Quarterly Industry Prices (1) |
||||||||||
Quarter Ended |
||||||||||
September 30, |
December 31, |
March 31, |
June 30, |
September 30, |
||||||
Ethane (cents/lb) |
8.4 |
8.8 |
11.4 |
9.8 |
7.9 |
|||||
Propane (cents/lb) |
24.4 |
28.4 |
30.8 |
25.2 |
24.6 |
|||||
Ethylene (cents/lb) (2) |
54.3 |
52.3 |
55.1 |
55.5 |
66.6 |
|||||
Polyethylene (cents/lb) (3) |
101.7 |
105.0 |
107.7 |
109.0 |
110.0 |
|||||
Styrene (cents/lb) (4) |
83.2 |
81.8 |
86.9 |
82.2 |
85.8 |
|||||
Caustic soda ($/short ton) (5) |
605.8 |
582.5 |
579.2 |
595.0 |
588.3 |
|||||
Chlorine ($/short ton) (6) |
248.3 |
245.0 |
236.7 |
232.5 |
232.5 |
|||||
PVC (cents/lb) (7) |
61.5 |
60.5 |
66.5 |
69.5 |
70.2 |
__________________ |
|
(1) |
Industry pricing data was obtained from IHS Chemical. We have not independently verified the data. |
(2) |
Represents average North American spot prices of ethylene over the period as reported by IHS Chemical. |
(3) |
Represents average North American contract prices of polyethylene low density film over the period as reported by IHS Chemical. |
(4) |
Represents average North American contract prices of styrene over the period as reported by IHS Chemical. |
(5) |
Represents average North American undiscounted contract prices of caustic soda over the period as reported by IHS Chemical. |
(6) |
Represents average North American contract prices of chlorine (into chemicals) over the period as reported by IHS Chemical. |
(7) |
Represents average North American contract prices of PVC over the period as reported by IHS Chemical. |
SOURCE
(713) 960-9111, Investors - Steve Bender, or Media - David R. Hansen