Westlake Chemical's net income rises in Q2

“A reconciliation of EBITDA to reported net income and to net cash provided by operating activities can be found in the financial schedules at the end of this press release.

Net cash provided by operating activities was $322.6 million in the first six months of 2012. Capital expenditures for the first six months of 2012 were $140.6 million. At June 30, 2012, the Company had cash balances of $1,131.0 million, including $20.5 million of restricted cash, and the Company's long-term debt was $764.6 million.

“The restricted cash is designated for qualifying amounts spent for capital additions in Louisiana. In July 2012, the Company refinanced $250 million of its 6 5/8% senior notes due 2016 with newly issued 3.6% senior notes due 2022.

Olefins Segment

Income from operations increased by $23.1 million to $155.9 million in the second quarter of 2012 from the $132.8 million reported in the second quarter of 2011. This increase was mainly attributable to higher olefins integrated product margins as compared to the prior year period. Margins improved as a result of significantly lower feedstock and energy costs in the quarter, which were only partially offset by lower sales prices.

Income from operations for the second quarter of 2012 for the Olefins segment of $155.9 million increased $26.7 million from the $129.2 million reported in the first quarter of 2012. This increase in income from operations was primarily due to higher olefins integrated product margins as a result of a decrease in feedstock cost that was only partially offset by a decrease in sales prices.

Income from operations in the first six months of 2012 was $285.1 million, an increase of $7.1 million from the $278.0 million in the first six months of 2011. This increase was mainly attributable to higher olefins integrated product margins as compared to the prior year period. Margins improved as a result of lower feedstock and energy costs, which were only partially offset by lower sales prices.

Vinyls Segment

The Vinyls segment reported income from operations of $22.6 million in the second quarter of 2012 compared to income from operations of $10.3 million in the second quarter of 2011. This increase was primarily driven by lower feedstock costs, improved building products margins and higher caustic sales volumes as compared to the prior year period.

The Vinyls segment income from operations of $22.6 million in the second quarter of 2012 increased $1.5 million compared to operating income of $21.1 million in the first quarter of 2012. The increase in second quarter 2012 income from operations is primarily a result of lower feedstock costs and higher building product margins as compared to the first quarter of 2012.

The Vinyls segment reported income from operations of $43.7 million for the six months ended June 30, 2012 as compared to income from operations of $7.4 million for the six months ended June 30, 2011, an increase of $36.3 million. The improvement in income from operations was primarily due to lower feedstock and energy costs and higher caustic and building products margins.

Westlake Chemical Corporation