Westlake Chemical Partners Lp · NYSE:WLKP
Westlake Chemical Partners Lp — Investor Presentation (2023)
22 slides from Westlake Chemical Partners Lp's investor presentation, 2023
Slide 1: Westlake Chemical Partners LP 2nd Quarter 2023
Westlake Chemical Partners LP 2nd Quarter 2023
Slide 2: 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 3: Sustainability Focus Grounded in Longstanding Values
Sustainability Focus Grounded in Longstanding Values Our CORE VALUES, in place since our founding, we are grounded in socially responsible business Sustainable practices and continue to be a guiding light for our Products evolving sustainability strategy Health, Safety & Environment (“HSE”) Proactiv
Slide 4: Commitment to Robust ESG Governance
Westlake Commitment to Robust ESG Governance Our Board of Directors had previously delegated sustainability oversight to the Board Board’s Corporate Risk Committee, but more recently amended the Committee We are proud to have received the Oversight charter, changing its name to the Corporate Risk an
Slide 5: Commitment to the Environment Through Company Action and 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 6: Predictable and Stable Cash Flows with Conservative Financial Structure
Westlake Chemical Partners LP & Westlake Corporation Predictable and Stable Cash Flows with Conservative Financial Structure Investors Investors 59.9% ownership Westlake Chemical 40.1% ownership Westlake Partners LP Corporation (WLKP) (WLK) 22.8% ownership 77.2% ownership Westlake OpCo LP WLKP’s pre
Slide 7: Westlake Partners Assets Provide Vital Ethylene to Westlake Corporation
Westlake Partners Assets Provide Vital Ethylene to Westlake Corporation Lake Charles, Calvert City, Longview, Texas Louisiana Complex Kentucky Complex Complex • Two ethane-based processing • One ethane-based processing • A 200-mile common carrier ethylene facilities at Westlake’s Lake Charles, facil
Slide 8: Westlake Corporation's Short Position in Ethylene Provides Strong Contractual Demand
Westlake Corporation’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 Corporation short an additional 1.1B lbs of Ethylene Westlake Westlak
Slide 9: 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 Corporation needs to produce it’s products • Ethylene Sales Agreement between Westlake Corporation and Westlake Partn
Slide 10: Sales Agreement has Insulated WLKP From Commodity Risk
Sales Agreement has Insulated WLKP From Commodity Risk and Enhanced Cash Flow Stability Industry Integrated Margins – Ethylene and Polyethylene Integrated Margin (cents / lb) 70 60 50 40 30 20 OpCo 10 Margin 0 -10 2018 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2019 2020 2021 2022 Ethyle
Slide 11: Strong Distribution Growth From Conservative Financial Structure
Strong Distribution Growth From Conservative Financial Structure Annual Distributable Cash Flows and Production since IPO 4,000 $80 Distributable Cash Flow ($MM) Ethylene Production (MM lbs) Higher, steady 3,000 $60 production rates lead Capacity to dependable, stable expansion Hurricane 2,000 outag
Slide 12: Westlake Chemical Partners Distribution
Westlake Chemical Partners Distribution • For its Q1 2023 distribution, WLKP maintained its distribution at the prior quarter level of $0.4714 to build cash and avoid creating any capital market needs • The strength of WLKP’s stable and predictable cash flows through 95% of its sales at a fixed marg
Slide 13: Stability of WLKP's Cash Flows Provides Significant Flexibility
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 14: 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 $135 Million in May 2015 • Purchased 5% of additional OpCo interests for
Slide 15: Partnership Well Positioned to Provide Value to Unitholders
Partnership Well positioned to Provide Value to Unitholders • Most recent drop down leaves over 77% of existing OpCo available to be dropped into WLKP for future cash flow and distribution growth • In July 2018, Westlake Corporation re-set Westlake Partners IDR schedule relieving Westlake Partners o
Slide 16: Completed Capacity Expansions + IDR Resets + JV Opportunity Extend Growth Runway
Completed Capacity Expansions + IDR Resets + Acquisition of JV Opportunity Provides Extended Growth Runway to WLKP Net Income Attributable to WLKP unitholders ($MM) IDR reset LACC JV $80 Calvert provides Cracker City longer OpCo drop eligible to Expansion growth down add to $60 Petro 1 and OpCo path
Slide 17: 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 Corporation (WLK) Westlake Partners Liquidity Liquidity (in millions) Mar 31, 2023 Cash and Equival
Slide 18: Key Investment Drivers
Key Investment Drivers Stable and Westlake Strategic Predictable Cash Experienced & Corporation’s Relationship with Strategically Located Flows Incentivized Increasing Demand Westlake Assets Unencumbered with Management Team for Ethylene Corporation IDR’s Global Cost Expanded Ethylene Sales Competit
Slide 19: Appendix
Westlake j . A\ Vi Chemical Enhancing Your Life Every Day
Slide 20: 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 21: 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 22: 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
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