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Westlake generates $109.5 mn in cash flow from operating activities

18 Feb '09
5 min read

Other items that negatively impacted 2008 results were outages caused by Hurricanes Gustav and Ike, higher raw material, natural gas and electricity costs, lower PVC pipe sales volumes and margins, and a trading loss of $9.4 million in 2008 compared to a trading loss of $1.0 million in 2007. The Olefins segment benefited from high operating rates through the first half of 2008, largely due to balanced industry supply and demand fundamentals.

The Olefins segment began experiencing reduced product demand in the third quarter of 2008 as customers began to anticipate lower product prices due to a weakening global economy and falling energy costs. The Vinyls segment results in 2008 were relatively flat compared to 2007 as lower margins and volumes for downstream products, primarily due to the weak construction market, were mostly offset by higher caustic margins.

EBITDA (earnings or loss before interest expense, income taxes, depreciation and amortization) for the fourth quarter of 2008 decreased from a positive EBITDA of $47.8 million in the fourth quarter of 2007 to negative EBITDA of $135.8 million in the fourth quarter of 2008.

EBITDA for the fourth quarter of 2008 decreased from the $78.2 million of positive EBITDA in the third quarter of 2008. A reconciliation of EBITDA to reported net (loss) income and to cash flows from operating activities can be found in the financial schedules at the end of this press release.

Cash flows from operating activities generated cash of $109.5 million in the fourth quarter of 2008 as working capital (excluding cash) fell by $196.9 million during the fourth quarter of 2008. Capital additions for the quarter were $45.4 million. Cash flows from operating activities generated cash of $186.1 million for the year ended December 31, 2008 and capital additions for 2008 were $172.6 million.

At December 31, 2008, the Company had $224.6 million in cash balances, including $90.2 million of cash and cash equivalents and $134.4 million of restricted cash. The restricted cash is held by a trustee until such time as the Company requests reimbursement for qualifying amounts spent for facilities in Louisiana. At December 31, 2008 the Company's long-term debt was $510.3 million with no maturities until 2016.

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Westlake Chemical Corporation

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