Good morning. Thank you for standing by. Welcome to the Westlake Chemical Partners Fourth Quarter and Full Year 2019 Earnings Conference Call. During the presentation all participants will be in a listen-only mode. After the speaker's remarks, you will be invited to participate in a question-and-answer session.

As a reminder, this conference is being recorded today, February 18, 2020.I would now like to turn the call over to today's host, Jeff Holy, Westlake's Chemical Partners, Vice President and Treasurer. Sir, you may begin.

Thank you. Good morning everyone, and welcome to the Westlake Chemical Partners fourth quarter and full year 2019 conference call.

I am joined today by Albert Chao, our President and CEO; Steve Bender, our Senior Vice President and CFO; 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 as well as the current outlook on our strategy 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'll open the call up to questions.During this call, we refer to ourselves as Westlake Partners or the partnership.

References to Westlake or 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 owns certain olefins assets.

Additionally, when we refer to distributable cash flow, we are referring to Westlake Chemical Partners' MLP distributable cash flow.

Definitions of these items are available on the partnership's websiteToday, 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 are 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 at a reasonable cost; and other risk factors discussed in our SEC filings.This morning, Westlake Partners issued a press release with details of our fourth quarter and record 2019 financial and operating results.

This document is available in the press release section of our web page at wlkpartners.com. A replay of today's call will be available beginning two hours after the conclusion of this call. 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 for both is 567-93-02.Please note that information reported on this call speaks only as of today, February, 18 2020. And therefore, you're 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 would like to turn the call over to Albert Chao.

Albert?.

Thank you, Jeff. Good morning, ladies and gentlemen, and thank you for joining us to discuss our fourth quarter and record year 2019 results. In this morning's press release, we reported consolidated net income including OpCo's earnings of $92 million for the fourth quarter of 2019.

Westlake Partners' fourth quarter net income was $17 million.In the fourth quarter of 2019, we achieved strong financial performance, driven by continued strong operations of our facilities and the acquisition of an incremental 4.5% interest of OpCo by the partnership in the first quarter of 2019.

2019 was a very successful year for Westlake Partners, anchored by the record production across the OpCo facilities. These facilities in Louisiana and Kentucky consistently ran well and above industry operating rates.

This consistent production, when combined with the sales agreement which insulates us from commodity price risk with our investment-grade rated sponsor Westlake Chemical produces exceptionally stable cash flows to drive distribution growth.On January 27, 2020 we announced distributions of $0.4714 per unit with respect to the fourth quarter of 2019.

This represents a 6% annualized increase as compared to the third quarter 2019 distributions.Since our IPO in 2014, this is the 20th consecutive quarterly increase in distributions to our unitholders an increase of 71% over the partnership's original minimum quarterly distribution of $0.2705 per unit.

For the 12-months ending December 31, 2019 distributable cash flow provided coverage of 1.13 times to declared distributions.I would now like to turn our call over to Steve to provide more detail on the financial and operating results for the fourth quarter.

Steve?.

Thank you, Albert, and good morning, everyone. In this morning's press release, we reported consolidated net income including OpCo's earnings of $92 million on consolidated sales of $273 million for the fourth quarter 2019. Westlake Partners' fourth quarter 2019 net income was $17 million or $0.49 per unit.

The partnership had distributable cash flow for the quarter of $19 million or $0.53 per unit.Fourth quarter 2019 net income for Westlake Partners of $17 million increased by $5 million compared to fourth quarter 2018 partnership net income of $12 million.

Distributable cash flow of $19 million for the fourth quarter of 2019 increased $4 million from fourth quarter 2018 distributable cash flow.The increase in both net income and distributable cash flow was primarily due to the 4.5% increase in ownership interest of OpCo.

The partnership's fourth quarter 2019 net income of $17 million increased $2 million from third quarter 2019 net income of $15 million.

The increase in net income was attributable to higher production at OpCo and higher margins on third-party sales.Fourth quarter 2019 distributable cash flow of $19 million decreased $1 million from third quarter 2019 distributable cash flow of $20 million resulting from higher maintenance capital spending.For the 12-months of 2019 the partnership had record net income of $61 million and record MLP distributable cash flow of $73 million.

The record performance in net income and distributable cash flow was driven by record production at OpCo, the increase in ownership interest of OpCo and higher third-party sales margins partially offset by higher maintenance capital expenditures.As Albert mentioned, we benefit from long-term ethylene sales agreement with Westlake Chemical who is short ethylene for their derivative production.

This take-or-pay agreement is 95% of our ethylene sales and protects the partnership's cash flows from the margin volatility that can be associated with the ethylene business.

This sales agreement also incentivizes us to continue to look for opportunities to increase capacity and maximize operating rates.Turning our attention to the balance sheet and cash flows.

At the end of the fourth quarter, we had a consolidated cash balance of $20 million in cash invested with Westlake Chemical through our investment management agreement of $163 million.

The $163 million in cash invested through the investment management agreement includes cash generated from operations throughout the quarter and the reserve for turnaround expenditures.Long-term debt at the end of the quarter was $400 million of which $377 million was at the partnership and $23 million held at OpCo.

For the fourth quarter of 2019 OpCo spent $14 million in capital expenditures. For the fourth quarter of 2019, we maintained strong leverage metrics with a consolidated leverage ratio below 1 times and a net debt-to-cap ratio below 20%.We are planning for a turnaround of our Petro 2 ethylene unit, which could occur in September or later.

The turnaround and associated outage is expected to last approximately 60 days. We will update you later in the year as we finalize our turnaround plan.

The cost for this turnaround has been included in the amount we charge to Westlake Chemical and has been reserved for.On January 27, 2020, we announced a quarterly distribution to unitholders of $0.4714 per unit.

This distribution will be paid on February 18, 2020 to unitholders of record February 3, 2020.Now, I'll turn the call back over to Albert to make some closing comments.

Albert?.

continuation of periodic drop-downs of OpCo into MLP; acquisitions of other qualified income streams such as Westlake's interest in the LACC cracker; organic expansions of our current ethylene facilities; and negotiating a higher fixed margin in our ethylene sales agreement with Westlake.

With these four levers, we have the sustainable capability to continue our history of steady growth in distributions to our unitholders over time.In closing, we remain excited about future prospects in front of us. We will continue to focus on the investment thesis we have laid out to drive value to our unitholders.

We'll do this while continuing to operate safely along with being good stewards of the environment and the communities in which we live and work.Thank you very much for listening to our fourth quarter 2019 earnings call. Now, I'll turn the call back over to Jeff..

Thank you, Albert. Before we begin taking questions, I would like to remind you that a replay of this teleconference will be available starting today at 2:00 p.m. Eastern Time. We will provide that number again at the end of the call.

Please be aware that we have also previously posted a presentation outlining our distribution philosophy, which is available on the partnership's website at wlkpartners.com.Toulouse, we'll now take questions..

Thank you, sir. [Operator Instructions] I show our first question comes from Matthew Blair from Tudor, Pickering, Holt. Please go ahead..

Hey. Good morning, Albert and Steve..

Good morning..

Good morning, Matthew..

The release mentioned, increased production at OpCo quarter-over-quarter.

Can you share any detail on the overall volumes or at least the magnitude of the quarter-over-quarter improvement?.

Yeah. Matthew, we haven't given production numbers specifically. But as you can see, it continues to perform quite strongly. And as I noted earlier, we do expect to assess the turnaround for later this year.But I will say that we had very strong production. And you can see it, really drove our results for the quarter..

Indeed. Okay. And then back in the second quarter of 2016 with the Petro 1 turnaround, your quarter-over-quarter EBITDA fell by about $20 million.

Is that a good ballpark impact estimate, for the upcoming Petro 2 turnaround?And, I guess, it's going to be the third quarter of 2020 here?.

Yeah.

So the way to think about the impact is really going to be the number of days of outage, because we've got a fixed toll arrangement around the facilities.And so, as you think about the turnaround, and we've given guidance of approximately 60 days, that really should give you guidance, in terms of the margin times, the production, that will be lost during that turnaround period..

Sounds good. Thank you..

You're welcome..

Thank you. Our next question comes from Mike Whitehead from Barclays. Please go ahead..

Thanks. Good morning, again, guys..

Good morning..

Good morning, Mike..

Just one quick one, from me, on the new ethylene Lotte stake, how should we think about potential drop-down into the MLP, as you think about, distribution growth going forward versus other drop-downs of OpCo already?.

So Mike, we know that the unit -- the ethylene unit is a qualified income stream. And we've identified it over time as a potential acquisition opportunity for OpCo.

And certainly as we consider the four levers of growth we have, certainly would be considered as one of those levers that we'll consider, as we think about growing the earnings later this year..

Got it. Thank you..

You're welcome..

Thank you. At this time, the Q&A session has ended. I would now like to turn the call back over to, Jeff Holy..

Thank you again, for participating in today's call. We hope you'll join us for our next conference call, to discuss our first quarter 2020 results..

Thank you for participating in today's Westlake Chemical Partners fourth quarter earnings Conference call. As a reminder, this call will be available for replay beginning two hours after the call has ended.The replay can be accessed by calling the following numbers. Domestic callers should dial 855-859-2056.

International callers may access the replay at 404-537-3406. The access code is, 5679302. This will conclude today's call. Goodbye..