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Operator
Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to the Westlake Chemical Partners second quarter 2016 earnings conference call. (Operator Instructions). As a reminder, ladies and gentlemen, this conference is being recorded today, July 28th, 2016.
I will now turn the call over to your host, Ben Ederington, Westlake Chemical Partners Vice President and Chief Administrative Officer. Sir, you may begin.
Ben Ederington - VP, General Counsel, CAO and Corporate Secretary
Thank you, Valerie. Good afternoon, everyone, and welcome to the Westlake Chemical Partners second quarter 2016 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 will begin with Albert, who will open with a few comments regarding Westlake Chemical Partners' performance in the second quarter, as well as the current outlook on our performance and opportunities. Steve will then provide a more detailed look at our financial and operating results. Finally, Albert will add a few concluding comments, and then we will open the call up to questions.
During this call, we refer to ourselves as Westlake Partners, or the Partnership. References to Westlake Chemical refer to our parent company, Westlake Chemical Corporation; and references to OpCo refer to Westlake Chemical OpCo LP, a subsidiary of Westlake Chemical and the Partnership, which own certain Oliphant assets.
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 operating difficulties, the volume of ethylene that we're able to sell, the price at which we are able to sell ethylene, changes in the prevailing economic conditions, actual and proposed governmental regulatory actions, competitive products and pricing pressures, our ability to borrow funds and access capital markets, and other risk factors discussed in our SEC filings.
This afternoon, Westlake Partners issued a press release with details of our second quarter financial and operating results. This document is available in the Press Release section of our webpage at wlkpartners.com.
A replay of today's call will be available beginning two hours after completion of this call, until 11:59 Eastern Time on August 4th, 2016. The replay may be accessed by dialing the following numbers: Domestic callers should dial 855-859-2056. International callers may access the replay at 404-537-3406. The access code is 49762193.
Please note that information recorded on this call speaks only as of today, July 28th, 2016. 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 wlkpartners.com.
Now, I'd like to turn the call over to Albert Chao. Albert?
Albert Chao - President & CEO
Thank you, Ben. Good afternoon, ladies and gentlemen. And thank you for joining us, our earnings call, to discuss our second quarter results.
In this afternoon's press release, we reported consolidated net income, including OpCo's earnings of $81 million for the second quarter of 2016. Westlake Partners net income was $9 million.
We are pleased to announce that we have completed turnaround [an] expansion project at our Petro 1 facility in Lake Charles, Louisiana and are currently in a process of restarting the unit. This expansion will add 250 million pounds of ethylene capacity, which, along with other internal initiatives, including the expansion of our Calvert City, Kentucky facility, should allow us to continue with our targeted annual low-double-digit growth rate of distributions.
Yesterday, July 27th, 2016, we announced an increase in distributions to our unit holders with respect to the second quarter of 2016, with a coverage ratio of 0.49 times the declared distributions. This 2.9% increase in distribution is the sixth consecutive increase in distributions to our unit holders since our initial public offering in August of 2014.
In regards to the IRS proposed regulations governing qualified income for master limited partnerships, we participated in the IRS hearing on this matter in October 2015 and have had a number of subsequent meetings with the IRS and Treasury Department, where we presented our view that our activities are clearly within the plain reading of the statute. We believe that the IRS interpretation of the law when issuing a private letter ruling was and still is correct. And we continue to make this point to the IRS and Treasury.
I would now like to turn our call over to Steve to provide more detail on the financial and operating results for the second quarter. Steve?
Steve Bender - SVP, CFO and Treasurer
Thank you, Albert. And good afternoon, everyone.
In this afternoon's press release, we reported consolidated net income, including OpCo's earnings of $81 million on consolidated sales of $211 million for the second quarter of 2016. Westlake Partners net income was $9 million or $0.34 per limited partner unit. We also reported MLP distributable cash flow of $4 million for the second quarter.
Second quarter net income for Westlake Partners decreased by $1 million or $0.05 per limited partner unit, when compared to second quarter of 2015. MLP distributable cash flow of $4 million was $5 million lower than the second quarter of 2015.
The decrease in net income and MLP distributable cash flow was primarily due to the planned turnaround and expansion project of OpCo's Petro 1 unit, as well as lower operating rates and maintenance activity at the Calvert City facility due to an unplanned outage. The outage at OpCo's Calvert City facility was a force majeure event under the ethylene sales agreement with Westlake Chemical. As such, if OpCo is not able to make up the lost production throughout the remainder of the year, Westlake will be obligated to pay for 95% of the incremental costs incurred as well as a $0.10 margin on the production in which OpCo isn't able to make up.
The Partnership's second quarter 2016 net income of $9 million was $3 million or $0.11 per limited partner unit lower than first quarter 2016. MLP distributable cash flow was $5 million lower than first quarter MLP distributable cash flow. This decrease in net income and MLP distributable cash flow was a result of lower operating rates and maintenance activity at Petro 1 in Calvert City.
The benefit from the long-term ethylene sales agreement with our sponsor, Westlake Chemical, is the stable fee-based cash flow. This contract represents 95% of our ethylene sales and protects the Partnership's cash flow from the margin volatility that can be associated with the ethylene business. This ethylene contract, which is structured to generate a margin of $0.10 per pound of ethylene, along with the take-or-pay provisions, incentivize us to continue to look for opportunities to increase capacity and operating rates.
Along with our recently completed 250 million-pound ethylene expansion of our Petro 1 plant at our Lake Charles facility, we have also recently announced an expansion of our Calvert City facility, which we expect to complete in the first half of 2017.
This expansion, in addition to other incremental capacity increases, will bring our annual ethylene capacity at Calvert City to 730 million pounds. While the expansions of ethylene capacity caused a temporary lower coverage ratio this quarter of 0.49 times, we expect the additional capacity to drive higher production and grow our earnings and cash flows later this year and into next year, which is expected to bring our coverage ratio back to the targeted level of 1.1 times.
For the second quarter of 2016, OpCo spent $90 million in capital expenditures as we completed the expansion of our Petro 1 plant. As Albert stated, this 250 million-pound expansion began in mid-April and was recently completed. Due to the turnaround and expansion of Petro 1, as well as the unplanned outage in Calvert City, we expect production for the third quarter of 2016 to be 70 million pounds less than the third quarter of 2015.
At the end of the second quarter, we had a consolidated cash balance of $151 million, of which $142 million was held at OpCo and $9 million at the Partnership level. Long-term debt was $515 million, of which $380 million was at the OpCo level and $135 million was at the Partnership.
On July 27th, 2016, we declared a quarterly distribution to unit holders of $0.3259 per unit. This increase in distributions of $0.091 per unit represents a 2.9% increase from the second quarter 2016 and continues us down the path to deliver consistent quarterly increases, targeting an annualized low-double-digit growth rate. The excess of distributions over distributable cash flow this quarter will be funded from cash currently on hand at the MLP.
Now, I'd like to turn the call back over to Albert to make some closing comments. Albert?
Albert Chao - President & CEO
Thank you, Steve.
The stable fee-based cash flow generated by the fixed-margin ethylene sales contract with Westlake Chemical forms the foundation for us to deliver long-term value to our unit holders. This enables us to successfully pursue dropdown transactions, organic growth, and third-party acquisition opportunities to increase distributions to our unit holders.
Looking forward -- we're preparing for our upcoming expansion at our Calvert City facility in 2017. The additional 250 million pounds of ethylene capacity already achieved through the recently completed Lake Charles expansion, along with the planned 100 million pounds expansion in Calvert City, will allow us to continue our targeted low-double-digit growth rate in distributions. We'll continue to assess future growth opportunities that will allow us to grow MLP distributable cash flow.
Thank you very much for listening to our second quarter earnings call this afternoon. Now, I'll turn the call back over to Ben. Ben?
Ben Ederington - VP, General Counsel, CAO and Corporate Secretary
Thank you, Albert.
Before we begin taking questions, I would like to remind you that a replay of this call will be available starting two hours after we conclude the call. We will provide the number again at the end.
Valerie, we will now take questions.
Operator
(Operator Instructions). I'm showing no questions at this time. I would like to turn the conference over back to Mr. Ederington for any closing remarks.
Ben Ederington - VP, General Counsel, CAO and Corporate Secretary
Thank you, Valerie.
Thank you again for participating in today's call. We hope you will join us for our next conference call to discuss our third quarter results.
Operator
Thank you. Ladies and gentlemen, this does conclude today's conference. Thank you for your participation. You may all disconnect.