Westlake Corp (WLK) 2015 Q3 法說會逐字稿

Good morning, ladies and gentlemen, and thank you for standing by. Welcome to the Westlake Chemical Corporation third-quarter 2015 earnings conference call.

(Operator Instructions)

As a reminder, ladies and gentlemen, this conference is being recorded today, November 3, 2015.

I would now like to turn the call over to today's host, Dave Hansen, Westlake's Senior Vice President of Administration. Sir, you may begin.

Thank you very much. Good morning, everyone, and welcome to the Westlake Chemical Corporation third-quarter 2015 conference call. I'm joined today by Albert Chao, our President and CEO, Steve Bender, our Senior Vice President and Chief Financial Officer, and other members of our management team.

The conference call agenda will begin with Albert, who will open with a few comments regarding Westlake's performance in the third quarter of 2015, followed by a current perspective on the industry. Steve will then provide a more detailed look at our financial and operating results. Finally, Albert will add a few concluding comments, and we will then open the call up to questions.

During this call, we refer to ourselves as Westlake Chemical. Any reference to Westlake Partners is to the master limited partnership, Westlake Chemical Partners LP. References to OpCo refer to our subsidiary, Westlake Chemical OpCo LP, who owns certain olefin facilities.

Today, management is going to discuss certain topics that will contain forward-looking information that is based on management's beliefs, as well as assumptions made by, and information currently available to, management. These forward-looking statements suggest predictions or expectations, and thus, are subject to risks or uncertainties. Actual results could differ materially based upon many factors, including the cyclical nature of the chemical industry, availability, cost and volatility of raw materials, energy and utilities, government or regulatory actions, and political unrest, global economic conditions, industry operating rates, the supply/demand balance for Westlake's products, competitive products and pricing pressures, access to capital markets, technological developments, and other risk factors discussed in our SEC filings.

This morning, Westlake issued a press release with details of our third-quarter 2015 financial and operating results. This document is available in the Press Release section of our webpage at westlake.com.

A replay of today's call will be available beginning two hours after completion of this call until 11:59 PM Eastern time on November 10, 2015. The replay may be accessed by dialing the following numbers: domestic callers should dial 1-855-859-2056; international callers may access the replay at 404-537-3406. The access code for both numbers is 58784977.

Please note that information reported on this call speaks only as of today, November 3, 2015, and, therefore, you are advised that time-sensitive information may no longer be accurate as of the time of any replay. I would finally advise you that this conference call is being broadcast live through an internet webcast system that can be accessed on our webpage at westlake.com.

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

Thank you, Dave. Good morning, ladies and gentlemen, and thank you for joining us on our earnings call to discuss our third-quarter results.

In this morning's press release, we reported quarterly net income of $184 million or $1.39 per diluted share on sales of $1.2 billion. Our results this quarter reflect the value of our investments to fully integrate our Vinyls chain, and the contributions from our acquisitions of Vinnolit and North American Specialty Pipe that were made over the past few years. Our third-quarter results were impacted by the downward pressure on integrated Olefins margins and ethylene prices, resulting from the new ethylene capacity that came on stream, and by lower crude oil prices, which saw a 24% decline in the quarter, and which represents a 50% decline year over year.

In spite of the lower prices in the third quarter, we saw solid demand for our end products, and increased volumes in polyethylene sales, with improvement over prior-year levels. We benefited from good domestic and strong export demand, in spite of concerns over the pace and strength of global growth. Results for our Vinyls business also improved, driven by the addition of Vinnolit, and a gradual recovery of the housing and construction markets.

Now, I would like to turn our call over to Steve to provide more detail on the financial and operating results for the third quarter. Steve?

Thank you, Albert, and good morning, everyone. I will start with discussing our consolidated financial results, followed by a detailed review of our Olefins and Vinyls segment results.

Let me begin with our consolidated results. In this morning's press release, Westlake reported net income for the third quarter of 2015 of $184 million or $1.39 per diluted share on net sales of $1.2 billion. This represents an increase to net income of $16 million or $0.14 per diluted share, compared to the third quarter of 2014 net income of $168 million or $1.25 per diluted share on net sales of $1.3 billion. Third-quarter 2015 net income benefited from approximately $23 million or $0.17 per share, primarily due to tax-[cleaning] initiatives, resulting in increased tax benefits in certain prior years and the current year. We estimate that as a result of the tax-cleaning initiatives, our ongoing effective tax rate on ordinary income will be approximately 33.5%. Additionally, our third-quarter income from operations was lower by approximately $34 million, due to both unplanned outages and planned maintenance turnarounds at various North American and European facilities.

For the third quarter of 2015, net sales decreased by $65 million over the same period in 2014, due to lower sales prices for all of our major products, partially offset by higher sales volumes for most of our major products, and from sales contributed by Huasu, our Chinese PVC operation, in which we acquired a controlling interest on June 1, 2015, and from Vinnolit, which we acquired on July 31, 2014. Third-quarter 2015 income from operations was $254 million, a decrease of $53 million from the third quarter of 2014, driven by lower integrated product margins that were the result of lower sales prices, and the planned and unplanned outages. These results were partially offset by lower feedstock and energy costs; higher production rates at our Geismar, Louisiana, chlor-alkali plant; and the contribution from Vinnolit.

Sales revenue in the third quarter was $1.2 billion, while income from operations of $254 million decreased by $41 million compared to the second quarter of 2015. Operating income decreased due to lower integrated Olefins margins, caused by lower sales prices, and by the unplanned and planned outages in the quarter. For the first nine months of 2015, sales revenue was $3.5 billion, an increase of $197 million, compared to the nine months ended September 30, 2014, driven by sales contributed by Vinnolit, and stronger sales volume for most of our major products, partially offset by lower sales prices for these products.

Income from operations was $779 million for the nine months ended September 30, 2015, compared to $822 million for the prior-year period, a decrease led by lower integrated Olefins product margins due to lower sales prices, and costs related to the unplanned and planned outages in the period. This was partially offset by increased production at our Calvert City, Kentucky, facility following the completion of the feedstock conversion and ethylene expansion project in the second quarter of 2014, higher production rates at our Geismar chlor-alkali plant, lower feedstock and energy costs, and a contribution from Vinnolit.

Sales prices in the first nine months of 2015 were impacted by a significant decline in crude oil prices. Our utilization of the FIFO method of accounting resulted in an unfavorable impact of $3 million pre-tax, or $0.02 per share in the third quarter, compared to what earnings would have been if we had reported on the LIFO method. Please bear in mind that this calculation is only an estimate, and has not been audited.

Let's move on to review the performance of our two segments, starting with the Olefins segment. In the third quarter of 2015, the Olefins segment reported income from operations of $197 million on sales of $588 million, compared to operating income of $259 million and sales of $703 million in the third quarter of 2014. These results were due to lower integrated Olefins product margins, resulting from lower sales prices, partially offset by higher sales volumes from polyethylene, and lower feedstock and energy costs. Compared to the second quarter of 2015, third-quarter operating income of $197 million decreased by $24 million, while sales of $588 million decreased by $33 million. The lower results were mainly due to lower integrated Olefins product margins, resulting from lower polyethylene sales prices and volumes.

For the first nine months of 2015, sales revenue of $1.8 billion for the Olefins segment decreased by $333 million from the $2.1 billion reported in the first nine months of 2014, while operating income of $609 million decreased by $162 million in the same period. The lower operating income was driven by lower integrated Olefins product margins, primarily as the result of lower sales prices, partially offset by higher sales volumes, and lower feedstock and energy costs.

Now moving on to the Vinyls segment, the Vinyls segment reported operating income of $68 million in the third quarter of 2015 on sales revenue of $600 million, compared to operating income of $59 million on the sales of $550 million in the third quarter of 2014. These increases are mainly due to higher caustic soda sales volumes, primarily resulting from higher production rates at our Geismar chlor-alkali plant and the contribution from Vinnolit. The increase in operating income was partially offset by approximately $21 million in lost sales, lower production rates, and costs associated with an unplanned outage at our Calvert City facility, and several planned maintenance turnarounds at our Calvert City; Gendorf, Germany; and Burghausen, Germany, facilities. The results were also impacted by lower sales prices for caustic, PVC resin, and PVC pipe.

Third-quarter 2014 income from operations was negatively impacted by the unplanned outages at Calvert City and Geismar Vinyls facilities, and the effect of selling higher-cost Vinnolit inventory recorded at fair value, which was related to the acquisition. Vinyls segment operating income of $68 million in the third quarter of 2015 decreased by $20 million over the second-quarter 2015, while sales of $600 million increased by $36 million over the same period. Operating income was impacted by approximately $21 million related to unplanned and planned outages during the third quarter of 2015, partially offset by higher sales volumes for caustic and PVC resin.

For the first nine months of 2015, sales revenue of $1.7 billion for the Vinyls segment increased by $530 million from the same period in 2014, while operating income of $203 million increased by $127 million. The improved results were driven by higher integrated Vinyls product margins for the first nine months ended September 30, 2015, mainly attributable to lower feedstock costs and increased production at our Calvert City facility following the completion of the feedstock conversion and ethylene expansion project, higher caustic soda sales volumes, primarily attributable to higher production rates at our Geismar chlor-alkali plant, and the contribution from Vinnolit.

The increase in income from operations was partially offset by the unplanned outages and planned maintenance turnarounds at our various North American and European facilities, lower sales prices for our major products, and reduced sales volume in Europe related to widespread ethylene shortages in Europe. Income from operations for the first nine months of 2014 was negatively impacted by the effect of selling higher-cost Vinnolit inventory recorded at fair value, the lost sales, lower production rates and costs associated with the maintenance turnaround, and ethylene expansion and feedstock conversion at our Calvert City facility, and prior to the completion of these projects, lower integrated Vinyls product margins attributable to significant higher propane costs.

Next, let's turn our attention to the balance sheet and the statement of cash flows. Cash generated from operating activities in the first three quarters of the year was $841 million. And we have spent $329 million on capital expenditures, and returned nearly $200 million to our stockholders through share repurchases, dividends or unit distributions to unitholders of Westlake Partners. As of September 30, 2015, we had cash and marketable securities for approximately $1.2 billion, and long-term debt remained at approximately $764 million.

Let me also give you some guidance for your 2015 and 2016 planning purposes. In the fourth quarter, we expect to have planned turnaround at our Lake Charles, Louisiana, and Longview, Texas, plants that will have an impact of approximately $25 million pre-tax. Due to the efforts that I mentioned earlier, we estimate that our ongoing effective tax rate on ordinary income will be approximately 33.5%.

Our guidance for 2015 capital expenditures is in the range of $425 million to $475 million, and includes spending for the expansion of our Petro 1 ethylene unit in Lake Charles, Louisiana, which is scheduled to start up late in the second quarter of 2016. The work for this project will be completed in conjunction with a planned maintenance turnaround starting in the second quarter of 2016 that will last for approximately 80 days, and will add approximately 250 million pounds of ethylene capacity once completed. We estimate that the second-quarter 2016 results will be impacted by lost production, associated cost for this project, and other turn-around activities in the quarter that will be in the range of approximately $45 million to $50 million.

With that, I will turn the call back over to Albert to make some closing comments. Albert?

Thank you, Steve.

The current oil to gas ratio remains favorable for US petrochemical industry competitiveness, and continues to provide an advantage of lower-cost energy and feedstocks, from which we are well positioned to benefit. We are working to continue to capitalize on this advantage, and complete the work to expand our ethylene capacity by approximately 250 million pounds in Lake Charles in the first half of 2016 in order to further lower our cost position and balance our ethylene integration. Our new world-class low-scale Geismar chlor-alkali plant, the feedstock conversions, and ethylene expansion of our Calvert City facility, and the acquisitions of Vinnolit and North American Specialty Pipe continue to make solid contributions to the operating margin and cash flow for our Vinyls segment, and highlight our integration strategy and specialty product focus.

Demand for our products has steadily improved over the past several years, and we expect this trend to continue. The consumer flexible packaging market that our Olefins segment serves continues to grow consistently, and we're the leading producer in the Americas of low-density polyethylene, and look to grow with this market. With the completion of our ethylene integration in 2016, we'll be one of the most integrated and the lowest-cost producers of PVC. Export opportunities for our polyethylene and PVC should continue to grow consistently as global economies recover and global GDP growth improves over current levels. We remain focused on identifying opportunities that will strengthen our product integration, and grow our earnings potential.

Thank you very much for listening to our earnings call this morning. Now, I'll turn the call back over to Dave Hansen. Dave?

Thank you, Albert. Before we begin taking questions, I would like to remind you that a replay of this teleconference will be available starting two hours after we conclude the call. We will provide that number again to you at the end of the call. Operator, we're now prepared to take questions.

(Operator Instructions)

Alexi Jefremol, Nomura Securities.

Good morning. Thank you. I apologize if I missed it, but what was the impact of Vinnolit outages and the US outages in the third quarter?

The total outages impact in the third quarter was $34 million impact. That includes both European and North American impacts.

And did you have any negative impact from shortage of ethylene in Europe in the third quarter?

The impact of that we saw was in the second quarter, not in the third quarter.

Okay. Thank you. And could provide your thoughts on US polyethylene pricing outlook, and also the level of polyethylene inventory in the US?

Certainly. There is a price increase announced by members of the industry for $0.05 a pound, and it's effective on November 1. And I think the inventory levels I would think for polyethylene in the US about average for producers, and a low site for customers.

Thank you very much.

You're welcome.

Jim Sheehan, SunTrust. Jim, check your mute button please.

Operator, can we move to the next one, and we can re-queue Jim?

David Begleiter, Deutsche Bank.

Hello, good morning. This is actually Jermaine Brown filling in for David. A few questions. Can you talk about the caustic demand that you are seeing in the Asia-Pacific region, and how it's tracking versus historical levels?

We don't sell caustic in Asia, and we don't export caustic much internationally. But I understand that the chlor-alkali demand has slowed down a bit, so the caustic production probably has slowed down a bit in Asia with the upcoming winter months. So if industry demand is weak for caustic, it may impact on the caustic production, as well.

Understood. Thank you. And can you comment on the pace of the buybacks out through 2016?

Our program of buybacks was active in the third quarter, as well as second quarter of this year. And what we've said is the program is an opportunistic program that you see that we've been active throughout the second and third quarter.

And as I mentioned, we've returned about $200 million back to shareholders in the form -- and unitholders in the form of share buybacks, dividends, and distributions to our Partners' unitholders. But as I say, the program itself is discretionary, but you can see that we've been active in the last two quarters.

Okay. So I'd assume it is fair to assume that the pace would continue at a similar amount going forward?

That is reasonable to assume.

Thank you. That is all that I have.

You're welcome.

Hassan Ahmed, Alembic Global.

Morning, Albert and Steve. A question around net effective utilization rate for ethylene. You yourselves are talking about some turnaround in Q2 of 2016, and it seems a fair number of people are doing that.

So our we setting ourselves up for a year in 2016 similar to 2015? Where all of a sudden, you see [dite] effective utilization rates on the back of a number of planned and certainly some unplanned outages and maybe potentially a spike in spot ethylene prices?

From what we understand, there is over 10% of the capacity that will be off line in turnarounds about March, April, May period. So potentially, the industry could be tighter at that time.

And now just a longer-term question. You talked about LDP demand and the strength associated with that, and I guess one of the virtues of the polyethylene side of things has been that polyethylene supply demand has been tighter than ethylene supply demand. So hence, a pricing premium.

Now going forward, as and when all of this announced North American ethylene capacity comes online, it just seems that a number of people haven't really announced their derivative intentions. So, what are you hearing in terms of ethylene integration into polyethylene in general? Is the bulk of the ethylene capacity increment going into polyethylene?

So that's on the general side. And beyond that, LDPE in particular.

Certainly. I think you are right that with the increased capacity in ethylene, the ethylene prices has dropped as a result because of lack of derivative demand to catch up with the ethylene supply. I presume people do expand without broadcasting to the market that people are looking at expansions down derivatives.

As far as new ethylene plans that's being announced, they are usually tied with the downstream derivative plans, and most of that is polyethylene. About 60% of ethylene today goes through the polyethylene. But most of those capacities are not in LDPE. That is where Westlake's major product in polyethylene is. So we will be seeing more of the commodity grades of medium low and high density, and less of LDPE in the market on a global basis.

Super. Thanks so much Albert.

You're very welcome.

Arun Viswanathan, RBC Capital Markets.

Hello. Thanks. So curious on the caustic side, what are your observations in the market right now?

Are your customers accepting the current $30 that we've seen go through the indices? And what's your expectations for the rest of the $65 that's been announced?

Yes, I think in October that the industry accepted the $30, $35 price increase for caustic, and the export demand as good as well. So, we look forward to the rest of the $55 price announcement that is being put in place for fourth quarter.

Albert, do you believe that the market is tight enough that these prices will stick well into Q1, even when maintenance comes back online?

Well it depends also on the demand for PVC. We're head into winter months now. If the weather is severe and PVC demand slows down a lot, then it would be less production of chlorine, hence the less production of caustic.

Okay, thanks. And if I may, another one on your overall cash use priorities. You've discuss in the past your preference for essentially buying assets in somewhat depressed regions. Are you still seeing those opportunities?

You definitely have quite a nice cash balance on your balance sheet. How do you expect to deploy that? And maybe you could just discuss a little bit on the M&A pipeline right now. Thanks.

Arun, as we've said and as Albert noted in his closing comments or in prepared comments, that we continue to look for opportunities to deploy this capital. And you see that in 2013 and 2014 that we acquired some, I think, attractive assets contributed to the results this quarter, and I'm speaking to the North American Specialty Pipe business that we acquired in 2013 and Vinnolit last year. We're continuing to look for good opportunities such as those, and that's constantly something that we look at as well as the organic initiatives, of course, that we always pursue.

Thank you.

You're welcome.

Frank Mitsch, Wells Fargo.

Yes. Good morning. Steve, I'll take that last response as a yes in terms of the M&A. There's a lot of capacity coming online in VCM and PVC, or not a lot, but a material amount. And this has not been the best of years, 2015, in terms of utilization rates and demand.

As we start to think about 2016 and a little bit more capacity out there, what are you are thinking about in terms of the demand side? How should we start thinking about 2016 in terms of that part of your Business?

Certainly, the US construction market has improved, albeit still gradually. I think September we have the housing construction at 1.2 million rate, annual rate, which is better than last year, they averaged about 1 million units.

Hopefully, with the recovering economy, that next year that the construction and the multi-family, single-family homes will continue to grow. But also, because of the advantage the cost position we have in the US, the US is ready to export more PVC to the international markets. And the international market's demand is still good, and so there have been more exports from the US.

All right. So we have been exporting quite a significant amount so far. So you anticipate that that will continue to grow if we do not see the housing recovery, or least enough of a robust housing recovery. You would think that that's where we're going to put all of those pallets then.

Yes.

And as we think about the further upstream on the chlor-alkali side. A couple of competitors are at least talking about rationalizing some capacity there. What would your expectation be for operating rates in chlor-alkali, which I guess has been around the mid-80%s in 2015. How should we be thinking about that in 2016?

I think probably it will be the same ballpark. There's about 300,000 tons of chlor-alkali capacity coming on stream next year, as well. So probably would still be in the mid-80%s.

All right. Thanks so much.

You're welcome.

Brian Maguire, Goldman Sachs.

Good morning. This is Ryan Bernie on for Brian. Just had a quick question.

Could you maybe give us an update on the planned turnaround you have early next year? Are you still thinking it will be around 90 days, and then maybe comment on how that will impact maybe the first quarter versus the second quarter?

Yes, as we noted, it will be a planned 80-day outage, and it will be completed in the second quarter. So it starts earlier in that second quarter, and will be completed in that second quarter. As I noted in our remarks, we expect that the impact for those 80-day outages will be about $45 million to $50 million between that and some other planned turnaround activity occurring in that second quarter.

Great. Thank you. And then maybe could you also give a sense from a bridge perspective for the maintenance CapEx for 2015 versus 2016?

I think the maintenance capital certainly is, other than the turnaround related activity, is going to be, as we normally would expect it to be, year on year. As I say, when I think of the total capital spending that we have for our Business, maintenance capital tends to run in the neighborhood of about $150 million. But of course, it will be higher in 2016, because we'll pull some of that into the work related to the expansion and debottleneck of PetroOne.

Great. Thank you.

We haven't given guidance yet for the 2016 total capital spending budget. We'll do that once we finish our budgeting processes.

(Operator Instructions)

Don Carson, Susquehanna Financial.

A question on polyethylene inventories. Albert, you mentioned you thought that producer PE inventories were at about average levels. When would you start anticipating that to rise? Because for example, specifically in your own situation, as you take down Lake Charles, at what point do you start building inventory to see you through that to that turnaround?

And I know some of your competitors have even earlier turnarounds coming. So, do you expect that that need to build inventory will offset any softness we're seeing in spot polyethylene prices?

Yes, we expect that people will start building more inventory heading in the winter months and early part of next year. Ready for the turnaround in spring, which is most likely between March and May period.

Okay. Then finally, any update on the IRS MLP proposals? What further discussions have you had with them?

Don, we certainly participated in the formal 90-day comment period that ended in early August. And then there was a hearing that the IRS held in October, where they took formal comments from all of the commenting companies. And we participated in that hearing process.

No update from the IRS in terms of their timing. Other than what they told us earlier this year back in May, which would be a targeted date of late spring or early summer of 2016 for final regulations. But no update since May on that timeframe, so we're still working with that timeframe.

Thank you.

You're welcome.

Jeff Zekauskas, JPMorgan.

Hello, good morning. Are you surprised that the price of ethane isn't it lower with natural gas being pretty close to $2?

Well, the demand for ethane is still very strong. Ethane is still among the lowest feedstock costs in the US. And there will be also ethane be exported in the coming months. So, I think the ethane price is reasonable.

Some people think there's 500,000 barrels per day of ethane being rejected. Why would there be a $0.05 premium to the ethane price over its fuel value, given there's so much rejection? Do you have an opinion on that?

No, your guess is as good as mine, Jeff.

I noticed that you bought back about $50 million of stock in the quarter, and I think your share price averaged maybe $58 or so.

Jeff, it was $53, and we were -- and you are right. We were in the mid-$50 million in terms of millions of dollars, but it's got a $53 price.

$53 price. Well I think in the previous quarter, you bought back $60 million worth of stock. Maybe at around $72?

Yes. That's right.

That's right? So why is it that you spent less, even though your stock price went down quite a bit?

Opportunities, Jeff. We continue to be opportunistic, and certainly we continue to be opportunistic. And as I mentioned to one of the earlier questioners, we will continue to look at the program and buy shares.

So does that mean that the probability that you might need cash for acquisitions went up?

No, Jeff. I think the level of granularity between the numbers of shares and the dollar amount at this point is relatively insignificant to the balance that you see that we had at the end of the quarter.

How much do you still have to spend for your ethylene expansion next year?

Well, we are largely through the long lead items. And what we've said is that -- and so we're about halfway through that spending. But the great majority of that spending will occur when we get to that second quarter of 2016.

About halfway through. And forgive me, did you talk about what the total cost of the expansion project was?

We have. We've given no direct guidance on the amount of that, other than to say -- and I'm talking about the expansion not the turnaround related items.

Yes, exactly right. So how much did you say you were spending for the extension? Or when you've done it similarly in the past, how much did you spend?

The guidance range we gave was $350 million to -- $350 million would be the midpoint of that range.

Okay, good. Thank you so much.

You're welcome.

David Wang, Morningstar.

Hello, thank you for taking my question. I was wondering if you can talk a little bit more about the polyethylene margin. We've seen more of the intubated margin come from that part this quarter. I was wondering if you can talk about if you think this segment could tighten in the future, or if you think that these prices are sustainable?

There was a $0.05 per pound increase on November 1. And the demand has been quite strong, both domestically and internationally for polyethylene in general.

Great. Thank you. And can you talk about what your thinking is around profane versus ethane for feedstock, given the recent decline in propane prices?

Propane prices has fluctuated a lot. And in the summertime, it was very advantaged over ethane [things stand] as risen. And today, it's probably on par with ethane.

Thank you so much.

You're welcome.

John Roberts, UBS.

Morning. Once you finish the ethylene expansion, I think your capital spending cupboard is bare. Do you have any engineering studies underway for anything else significantly on that?

John, as you can imagine, we're always looking at opportunities to take further debottleneck opportunities in this business. And so while we've made no formal announcements at all, as you can imagine, that's a constant study and analysis process that we undertake.

Is there any update on the Eastman litigation?

No, John. I think you remember that there were two issues there. One was the directional flow, and one was the tariff itself in terms of the value of the tariff.

The tariff itself has been agreed I think in terms of being market oriented, and we've taken into the court system the other matter. And that's going to take some time to get resolved.

Is there a date for an initial hearing or fact-finding meeting?

It will be later this quarter.

All right. Thank you.

You are welcome.

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

We would like to thank you for participating in today's call. We hope that you will join us again for our next conference call to discuss our fourth-quarter and full-year 2015 results. Thank you very much, and have a wonderful day.

Thank you for participating in today's Westlake Chemical Corporation third quarter earnings conference call. As a reminder, this call will be available for replay beginning two hours after the call has ended, and may be accessed until 11:59 PM Eastern time on Tuesday, November 10, 2015.

The replay can be accessed by calling the following numbers. Domestic callers should dial 1-855-859-2056, international callers may access the replay at 404-537-3406. The access code at both numbers is 58784977. Thank you.