Westlake Chemical Partners Lp · NYSE:WLKP
Westlake Chemical Partners Lp — UBS NDRS (May 2021)
23 slides from Westlake Chemical Partners Lp's conference presentation, May 7, 2021
Slide 1: Westlake Chemical Partners LP
Westlake Chemical Partners LP UBS NDRS May 7, 2021
Slide 2: Commitment to Corporate Social Responsibility is Formed by Five Longstanding Core Values
Commitment to Corporate Social Responsibility is Formed by Five Longstanding Core Values HEALTH, SAFETY OUR PEOPLE QUALITY & COMPETITIVENESS CITIZENSHIP & ENVIRONMENT CONTINUOUS (“HSE”) The integrity, IMPROVEMENT We are committed to We recognize the creativity, enhancing the lives of importance of O
Slide 3: Westlake Chemical Partners LP
Westlake Chemical Partners LP • Predictable and stable cash flows insulated from commodity price risk • Long history of reliable operations from strategically located assets Stable and predictable cash flows Long history of predictable operation from strategically located assets 95% of sales at fixe
Slide 4: Predictable and Stable Cash Flows with Conservative Financial Structure
Westlake Chemical Partners LP & Westlake Chemical Corporation Predictable and Stable Cash Flows with Conservative Financial Structure Investors Investors 59.9% ownership Westlake Chemical 40.1% ownership Westlake Partners LP Chemical Corp (WLKP) (WLK) 22.8% ownership 77.2% ownership Westlake Chemica
Slide 5: Westlake Partners Assets Provide Vital Ethylene to Westlake Chemical
Westlake Partners Assets Provide Vital Ethylene to Westlake Chemical Lake Charles, Calvert City, Kentucky Longview, Texas Louisiana Complex Complex Complex • Two ethane-based processing • One ethane-based processing • A 200-mile common carrier ethylene facilities at Westlake’s Lake facility located
Slide 6: Westlake Chemical's Short Position in Ethylene Provides Strong and Contractual Demand
Westlake Chemical’s Short Position in Ethylene Provides Strong and Contractual Demand for Westlake Partners Westlake Partners’ current production capacity plus the potential 1.1B lbs in the JV cracker would still leave Westlake Chemical short an additional 1.1B lbs of Ethylene Westlake Westlake Chem
Slide 7: Westlake Partners Value Chain: Ethylene Sales Agreement
Westlake Partners Value Chain: Ethylene Sales Agreement Pricing Formula Promotes Stable & Predictable Cash Flows • Westlake Partners is the critical supplier of the Ethylene Westlake Chemical needs to produce it’s products • Ethylene Sales Agreement between Westlake Chemical and Westlake Partners pr
Slide 8: Sales Agreement has Insulated WLKP From Commodity Risk and Enhanced Cash Flow Stability
Sales Agreement has Insulated WLKP From Commodity Risk and Enhanced Cash Flow Stability Industry Integrated Margins – Ethylene and Polyethylene Integrated Margin (cents / lb) 50 40 30 20 OpCo 10 Margin 0 -10 1Q 21 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Ethylene Margin
Slide 9: Strong Distribution Growth From Conservative Financial Structure
Strong Distribution Growth From Conservative Financial Structure Annual Distributable Cash Flows and Production since IPO 4,000 $80 Higher, steady Distributable Cash Flow ($MM) Ethylene Production (MM lbs) production rates 3,000 $60 lead to Capacity dependable, expansion Hurricane outage 2,000 outag
Slide 10: Westlake Chemical Partners Distribution
Westlake Chemical Partners Distribution • For its Q1 2021 distribution, WLKP maintained its distribution at the prior quarter level of $0.4714 to build cash and avoid creating any capital market needs • Increase in year over year cash flow from 2019 to 2020 despite hurricane outage illustrates stabi
Slide 11: Stability of WLKP's Cash Flows Provides Significant Flexibility in Current Market Environment
Stability of WLKP’s Cash Flows Provides Significant Flexibility in Current Market Environment Westlake Chemical Partners Quarterly Distribution Since Inception $0.50 $0.45 $0.40 $0.35 $0.30 $0.25 $0.20 $0.15 $0.10 $0.05 $0.00 3Q 2014 4Q 2014 1Q 2015 2Q 2015 3Q 2015 4Q 2015 1Q 2016 2Q 2016 3Q 2016 4Q
Slide 12: Four Levers of Growth for Stable, Growing Cash Flows
Four Levers of Growth for Stable, Growing Cash Flows Increase our ownership interest in OpCo over time either by purchasing new OpCo interests or by purchasing outstanding interests in OpCo from WLK • Purchased 2.7% of OpCo for $135 Million in May 2015 • Purchased 5% of additional OpCo interests for
Slide 13: Partnership Well positioned to Provide Value to Unitholders
Partnership Well positioned to Provide Value to Unitholders • Most recent drop down in 1Q 2019 leaves over 77% of existing OpCo available to be dropped into WLKP for future cash flow and distribution growth • In July 2018, Westlake Chemical re-set Westlake Partners IDR schedule relieving Westlake Pa
Slide 14: Completed Capacity Expansions + IDR Resets + Acquisition of JV Opportunity Provides Extended Growth Runway
Completed Capacity Expansions + IDR Resets + Acquisition of JV Opportunity Provides Extended Growth Runway to WLKP Net Income Attributable to WLKP unitholders ($MM) $80 LACC JV OpCo drop IDR reset Cracker Calvert City down provides eligible to Expansion longer add to drop $60 Petro 1 and OpCo growth
Slide 15: Solid Leverage Metrics
Solid Leverage Metrics Well Capitalized for Financial Stability WLKP is well capitalized and has significant financial flexibility to fund future growth with its strong and supportive parent; Westlake Chemical (WLK) Westlake Partners Liquidity Liquidity (in millions) Mar 31, 2021 Cash and Equivalent
Slide 16: Westlake Makes Essential Products To Protect and Enhance Our Daily Lives
Westlake Makes Essential Products To Protect and Enhance Our Daily Lives Westlake’s products support over Westlake’s products are used for many half of the 17 Sustainable essential goods that are particularly Development Goals adopted by important in today’s environment: the United Nations: Chlor Al
Slide 17: Westlake's Environmental Responsibility
Westlake's Environmental Responsibility At Westlake, we strive to protect the world around us and preserve our natural resources. We have made meaningful reductions in our emissions and the natural resources that we use. Among these reductions described in our Sustainability Report, we have: • Reduc
Slide 18: Commitment to the Environment Through Both Company Action and Dedicated Industry Organizations
Commitment to the Environment Through Both Company Action and Dedicated Industry Organizations Participating in Multi-Industry Associations for Environmental Protection Westlake is a proud partner with the following organizations to drive sustainable action to eliminate plastic waste, capture more f
Slide 19: Key Investment Drivers
Key Investment Drivers Westlake Stable and Strategic Experienced & Chemical’s Predictable Relationship Strategically Incentivized Increasing Cash Flows with Westlake Located Assets Management Demand for Unencumbered Chemical Team Ethylene with IDR’s Competitive Global Cost Expanded Ethylene Market A
Slide 20: Appendix
Westlake W Ghemiaal Enhancing Your Life Every Day
Slide 21: WLKP Well Positioned to Protect and Grow Distributions
WLKP Well Positioned to Protect and Grow Distributions Maintain financial flexibility to protect and grow distributions Expand production capacity of ethylene through cost effective debottlenecks • Approximately 250 Million pounds completed in Lake Charles in 2016 • Approximately 100 Million pou
Slide 22: Reset IDR Tiers for Westlake Chemical Partners
Reset IDR Tiers for Westlake Chemical Partners Initial Newly reset distribution structure distribution structure % % Quarterly Annualized Quarterly Annualized distribution distribution distribution distribution distribution distribution IDR Tiers to IDRs to IDRs First target distribution up to: $ 0.
Slide 23: Disclaimer
Disclaimer This presentation contains certain forward-looking statements, including statements with respect to the ability to resume distribution growth, potential levers for growth, remaining drop down opportunities, avoiding the creation of any capital market needs, and accretive M&A as a source o