Westlake Corporation (WLK) Q3 2014 Earnings Report, Transcript and Summary

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the Westlake Chemical Corporation Third Quarter 2014 Earnings Conference Call. [Operator Instructions] As a reminder, ladies and gentlemen, this conference is being recorded today, November 4, 2014. 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. Good morning, everyone, and welcome to the Westlake Chemical Corporation Third Quarter 2014 Conference Call. I am 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 and 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 open the call up to questions. 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 factors including the cyclical nature of the chemical industry; availability, cost and volatility of raw materials, energy and utilities; governmental 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. This morning, Westlake issued a press release with details of our third quarter 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 4 hours after completion of this call until 1 p.m. Eastern time on November 11, 2014. The replay may be accessed by dialing the following numbers: domestic callers should dial 1 (866) 286-8010; international callers may access the replay at (617) 801-6888. The access code for both numbers is 59480928. Please note that information reported on this call speaks only as of today, November 4, 2014, 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 web page at westlake.com. Now I'd 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 $168 million or $1.25 per diluted share, which includes the impact of acquisition related costs, certain nonrecurring tax items and the impact of outage related costs totaling $0.34 per diluted share. We also reported record income from operations of $307 million. Our record third quarter operating results reflect continued strong performance by our Olefins segment as well as record earnings in our Vinyls segment. We continue to benefit from a lower cost ethane-based ethylene production, resulting from increased North American natural gas liquids production, and we are seeing the benefits of our feedstock conversion from higher cost propane to ethane feedstock at our Calvert City, Kentucky facility and our overall increased ethylene capacity. Additionally, our results reflect 2 significant and strategic initiatives that we completed in the third quarter, namely, the acquisition of Vinnolit, the global leader in specialty PVC, which we closed on July 31, as well as the successful initial public offering of Westlake Chemical Partners LP, a master limited partnership that closed on August 4, where we raised $286 million in IPO proceeds. These strategic initiatives incurred nonrecurring costs that impact the quarter, which Steve will review in more detail. These initiatives will be important contributors in our continued drive to grow our business and to create value for our shareholders. I would now like to turn our call over to Steve to provide more detail on the financial and operating results for the third quarter.

Thank you, Albert, and good morning, everyone. I will begin with our consolidated financial results followed by a detailed review of our Olefins and Vinyls segment results. In this morning's press release, Westlake reported net income for the third quarter of 2014 of $168 million or $1.25 per diluted share. The record third quarter operating income was driven by strong margins due to higher sales prices and lower feedstock cost. Our net income reflected the impact of certain nonrecurring charges totaling approximately $38 million after tax and by several unplanned outages totaling approximately $7 million, which in aggregate, impacted earnings by $0.34 per diluted share. Net income for the third quarter of 2014 was impacted by the following 3 categories of items: First, the formation cost associated with the Westlake Chemical Partners and the sale of MLP units along with the acquisition related costs for our specialty PVC business, Vinnolit, of approximately $22 million after tax. Second, we had an elevated tax rate due to several nonrecurring tax items, which increased the tax provision by $16 million due principally to state tax rate changes. These rate changes did not impact cash taxes, and I expect the annual 2014 tax rate on ordinary income will be approximately 35.6%. And third, we experienced unplanned outages in the quarter in our Calvert City, Kentucky and Geismar, Louisiana facilities, resulting in manufacturing and other costs totaling approximately $7 million after tax impact. Therefore, the impact of these nonrecurring and unplanned outages was approximately $45 million after tax or $0.34 per diluted share. Additionally, these unplanned outages also resulted in lost sales and margin of approximately $5 million after tax. Westlake's net sales for the third quarter of $1.3 billion was $245 million higher than sales reported in third quarter 2013, driven by sales contributed by Vinnolit, which we acquired in July 2014, higher sales prices for our major olefins products and PVC resin, and higher sales volumes for PVC resin, caustic soda and ethylene. As a reminder, the 2 months of results contributed by Vinnolit since close is included in our third quarter Vinyls segment results. The increase in net sales was partially offset by lower sales volumes from styrene and ethylene coproducts. The lower ethylene coproduct sales volumes were mainly attributable to the feedstock conversion to ethane from propane that was completed in the second quarter 2014 at our Calvert City ethylene plant. Westlake's operating income for the third quarter of 2014 of $307 million increased by $40 million compared to the $267 million reported in the same period of 2013. Income from operations for the third quarter of 2014 benefited from improved olefins and vinyls integrated product margins predominantly due to higher sales prices for most of our major products and lower overall feedstock costs as compared to the prior year period. Income from operations for the third quarter 2014 was impacted by lost sales, lower production rates, manufacturing and other costs associated with our 2 unplanned outages as well as the nonrecurring Westlake Chemical Partners formation and the Vinnolit-related acquisition costs that I previously mentioned. Third quarter sales revenue of $1.3 billion increased by $255 million over sales in the second quarter 2014, driven by sales contributed by Vinnolit and by higher sales volumes for PVC resin, PVC pipe and polyethylene. Third quarter income from operations of $307 million was higher by $40 million than in the second quarter of 2014 due to higher integrated olefins and vinyls margins as ethane feedstock declined, benefiting our ethylene units included in our Calvert City ethylene plant that recently converted from propane to ethane feedstock. Additionally, income from operations for the third quarter of 2014 was impacted by the formation cost of our MLP and acquisition-related cost of Vinnolit as well as by the lost sales, lower production rates, unabsorbed fixed manufacturing costs and other costs associated with these unplanned outages. Sales revenue was $472 million higher in the first 9 months of 2014 compared to the first 9 months of 2013, driven by sales contributed by Vinnolit and our specialty PVC pipe business, which we acquired in July 2014 and May 2013, respectively. Higher sales prices and sales volumes for most of our major olefins products and higher PVC resin sales prices partially offset by lower ethylene coproducts and styrene sales volumes. Operating income in the first 9 months of 2014 was $126 million higher when compared to the same period of 2013 mainly attributable to improved olefins integrated product margins, primarily as a result of the increased ethylene production at our Lake Charles, Louisiana complex after the first quarter 2013 completion of the Petro 2 ethylene expansion and its conversion to 100% ethane feedstock capability. The increase in income from operations for the 9 months ended September 2014 was partially offset by the lost sales, lower production rates, unabsorbed fixed manufacturing costs and other costs associated with several unplanned and planned outages at our chemical complex within the third quarter at Calvert City and Geismar. Our utilization of the FIFO method of accounting resulted in an unfavorable impact of $2.5 million pretax or approximately $0.01 per share in the third quarter as compared to what earnings would have been if we had reported on the LIFO method. Please bear in mind this calculation is only an estimate and has not been audited. Let's move on to review the performance of our 2 segments, starting with the Olefins segment. The Olefin segment reported income from operations of $259 million on sales revenue of $703 million during the third quarter 2014 compared to operating income of $237 million on sales of $679 million in the same period of 2013. Olefins sales were higher by $24 million mainly due to higher polyethylene sales prices. The increase in operating income was mainly due to higher olefins integrated product margins primarily as a result of higher sales prices and lower ethane costs. Third quarter, Olefins operating income of $259 million increased by $21 million over the second quarter 2014. Olefins operating income benefited from higher integrated product margins as feedstock cost declined over the period. For the first 9 months of 2014, sales revenue of $2.1 billion for the Olefins segment increased by $239 million from the $1.9 billion in the first 9 months of 2013 while operating income of $770 million increased by $184 million in the same period. The increase in sales resulted from higher sales prices and sales volumes for most of our major olefins products while the increase in operating results were driven by improved olefins integrated margins that were largely a result of the increased ethylene production at our Lake Charles complex after the first quarter 2013 completion of the Petro 2 ethylene unit expansion and its conversion to 100% ethane feedstock capability. Now moving on to the Vinyls segment. Vinyls segment reported record operating income of $59 million in the third quarter of 2014 on sales revenue of $550 million as compared to operating income of $40 million on sales of $325 million in the same -- in the third quarter 2013. Vinyls sales revenue increased by $225 million, driven by sales contributed by Vinnolit, higher sales prices for PVC resin and higher sales volumes for PVC resin and caustic soda. The increase in net sales was partially offset by the lower ethylene coproducts volumes produced and sold as a result of the change to ethane feedstock from propane feedstock utilized at our Calvert City ethylene plant. The increase in operating income was mainly driven by higher vinyls integrated product margins in the third quarter of 2014 that were the result of ethane feedstock currently utilized at our Calvert City ethylene plant as compared to the propane feedstock utilized during the prior year period. The third quarter 2014 operating income was impacted by the unplanned outages resulting in maintenance and other costs at our Calvert City and Geismar facilities and the required valuation adjustment to reflect Vinnolit's inventory at fair value. The Vinyls segment operating income of $59 million in the third quarter of 2014 increased by $21 million compared to operating income of $38 million in the second quarter of 2014. The increase in operating income was the result of higher sales volumes for PVC resin, PVC pipe and higher integrated Vinyls margins that benefited from lower feedstock cost that are the result of the feedstock conversion of our Calvert City ethylene cracker. As I mentioned in our second quarter conference call, the required valuation adjustments to reflect Vinnolit inventory at fair value versus cost largely offset the contribution of operating income for the 2 months in which we owned Vinnolit. For the first 9 months of 2014, sales revenue of almost $1.2 billion for the Vinyls segment increased by $232 million from the $922 million in the first 9 months of 2013 while operating income of $76 million was lower by $60 million from the same period. The increase in sales was attributable to sales contributed by Vinnolit and our specialty PVC pipe business and higher PVC resin sales prices partially offset by lower ethylene coproducts sales volumes. The change in operating results was mostly driven by lost sales, lower production rates and the expensing of unabsorbed fixed manufacturing costs and other costs associated with several planned and unplanned outages at our chemical complexes. In addition, income from operations for the 9 months ended September 2014 was negatively impacted by lower caustic sales prices, the severe winter weather experienced in early 2014 and prior to the completion of our Calvert City ethylene plant feedstock conversion project, lower vinyls integrated product margins resulting from significantly higher propane costs. Next, let's turn our attention to the balance sheet and the statement of cash flow. Cash generated from operating activities in the first 9 months was $776 million, and we spent $311 million on capital expenditures. In addition, during the quarter, we raised $286 million from the initial public offering of Westlake Chemical Partners and paid $611 million net of cash required for the acquisition of Vinnolit. We have a strong liquidity position with a cash balance of $813 million and total debt was unchanged at $764 million at the end of September. We are reducing our guidance for 2014 capital expenditures to the range of $450 million to $500 million. Now I'd like to turn the call back over to Albert for some closing comments. Albert?

Thank you, Steve. Westlake's record operating income in the third quarter reflects the strength of our asset base and operating performance on the recent investments we have made. We also completed 2 important strategic initiatives this quarter with the acquisition of Vinnolit and the initial public offering of Westlake Chemical Partners. Vinnolit, a global leader in specialty PVC, enhances and diversifies our product mix within our Vinyls business, providing profitable growth in this important specialty market. Our master limited partnership provides a lower cost of capital and facilitates our growth. We believe both of these initiatives will create value for our shareholders and will provide additional growth opportunities. We are continuing to invest to improve our product integration and our cost position. We announced in October our plans to further expand our Petro 1 ethylene unit in Lake Charles. This expansion will add approximately 250 million pounds of annual capacity and is anticipated to be completed in late 2015 or early 2016. Thank you very much for listening to our third quarter earnings call this morning. Now I'll turn the call back over to Dave Hansen.

Thank you, Albert. Before we begin taking questions, I would like to remind you that a replay of this teleconference will be available starting 4 hours after we conclude the call. We will provide that number again at the end of the call. Operator, we're now prepared to take questions.

[Operator Instructions] We have our first question, and it comes from the line of Brian Maguire from Goldman Sachs.

This is Ryan Berney on for Brian. Just a quick question, kind of broadly on oil prices, can you walk us through how that's affecting your business considering the recent drop and more specifically, whether or not you're seeing destocking in your vinyls and across your ethylene chain businesses from your customers?

Well, certainly, the oil price has dropped quite dramatically since June, but during that period, we have increased our ethylene -- polyethylene price by $0.03 a pound in September as well as $0.02 a pound in PVC in September, and those price increase are holding. And as you heard in our report, the sales volume on our products are all very robust and we are coming into the fourth quarter, which generally is a slower seasonal quarter than rest of the year, so we'll see some slowness in demand. Otherwise, I think demand for our products are pretty normal.

And just as a quick follow-up, are you seeing any slowness in your export markets considering the kind of weak report from the Commerce Department this morning?

Generally, Westlake does not export a whole lot of our products. We are mainly domestic-oriented. But as I said earlier, some of the markets are also seasonally affected in the fourth quarter, so generally, there'll be some slowness as well.

Your next question comes from the line of Edlain Rodriguez from UBS.

Albert, quick question for you. I mean, I know you don't have your own forecast for ethylene, polyethylene prices and margins, but based on your extensive knowledge of the industry, how do you see the market playing out over the next several months given that we will have capacity outage resuming and with the lower cost impact in the spot market, how do you see it play out over the next couple of months?

Certainly if you read the industry trade journals and consultants like IHS and CDI, they're forecasting some lower prices in November, December for polymers in the U.S., but as I said earlier, we raised our prices in September and there are even some company has announced further price increases, and the demand is good in the U.S. domestically. As we go into a seasonal slowdown in the fourth quarter, there could be some softening in prices, but we have yet to see.

Okay, I guess we just have to wait and see. And just quick question on Vinnolit. I mean can you remind us again of the possible ways what you can do to achieve synergies between Westlake and Vinnolit? They buy their own chlorine but they purchase ethylene, like what can you do to achieve synergies between the 2 companies?

Certainly. Vinnolit is primarily a Europe-based company. Their markets are primarily European, between Western and Eastern European countries, and they have a very small position Asia and U.S., whereas Westlake, we have a large position in U.S. and also a presence in Asia. So hopefully going forward, we're able to assist them in developing their market on a global basis. Their feedstock, also as I said, buying ethylene and producing chlorine, so we will see where there's any area we can assist in that area. And they have technologies that are one of the best, world-class both in specialty PVC and the commodity side. So we will look at ways that we can help each other. And as you know, that Europe is -- economies is low growth in the cycle. There was talk of European recovery this year, but things have slowed down, so I think that we are coming in a good position that we can put a very good base going forward.

Okay. And lastly, just quickly, any comments on the Texas commission pipeline dispute with Eastman? I mean, what can you tell us? What's the next step?

Edlain, this is Steve. What I would say is we're certainly disappointed and we'll certainly look to see if we can move forward with the commissioners to reject that stance that the examiner has taken.

And our next question comes from the line of James Sheehan from SunTrust.

Albert, I was wondering if you could comment on caustic soda prices. Do you see any chance of those going up in the fourth quarter?

Yes, there was a $50 or so price announcement in the third quarter and some of that has been effective in the third quarter into the fourth quarter. As I said earlier, with the slowdown of polymer demand seasonally in the fourth quarter, there'll be less demand for chlorine. As a result there will be less production of caustic. And as a result, caustic prices are moving up.

Can you also give us some color on your building products business, prices and volumes during the quarter?

Certainly. Because of the PVC price increases, some of the building products' prices also improved and depending on -- going forward, depending on what prices will be on the PVC side, we have impact on building products.

And why did you lower your capital expenditures budget? Is there a certain project that's being delayed or something like that?

No, Jim, it's just the phasing of our expenditures as we think in terms of the 2014, 2015 capital spending. It's just the slight phasing, you'll notice I only lowered it very slightly, so it's just the timing of when we'll spend that capital, no changes really in the overall project timing.

And our next question comes from the line of Hassan Ahmed from Alembic Global.

First, a clarification. I know you broke out what the recurring EPS numbers should be, x a bunch of nonrecurring charges. And I noticed that you reported $358 million as your EBITDA. Does that include those charges or is it a recurring number?

It includes those charges, Hassan.

So if we were to exclude those, what would the clean EBITDA be for the quarter?

Yes, it does include those, so you're right.

So -- that's how the tax gets added back to it.

That's right.

Fair enough. So now sort of moving, guys, a bit, again, all the noise seems to be around declining crude oil prices and the associated declines in naphtha prices and obviously, the logic or the fear is that as naphtha prices come down, so does the marginal cost of production. Now my question is that what we've seen is and obviously, naphtha has come down fairly rapidly in line with crude oil prices, but ethylene prices have not sort of followed similar suit, or they haven't come down rapidly enough, right? So the marginal guys are making fairly chunky margins right now and the fear is that those margins essentially fall to 0. So my question is we actually have not seen a commensurate decline in coproduct values. So is it possible that ethylene prices are buffered a bit by declines in core product values and associated sort of declines in economics of these marginal guys?

That's possible. The naphtha crackers today are making money because of the lower price of naphtha, but that doesn't mean that they will reduce ethylene price commensurate with the drop in costs, and I think the ethylene price has softened a little bit in Europe, a little bit in Asia, but they're making pretty good money today.

Right, and there is a case to be made that maybe propylene prices and a bunch of coproduct values fall as well and the decline in ethylene may not be as steep as the decline in naphtha.

That's possible. Definitely.

And our next question comes from the line of Frank Mitsch from Wells Fargo Securities.

Looking more near-term with 1 month already in the books, how did October margins look relative to the third quarter? Were they a little bit better than the third quarter average?

October margins?

On the olefins side of the equation, I was just curious as to what sort of margin trends you've seen in the quarter to date?

In fourth quarter, well, as we said earlier, we announced a price increase -- implemented a price increase by $0.03 in polyethylene and it's still -- the price -- we received a full increase in price, and November is yet to see whether there will be a decline or not in prices. So we're building good margins right now.

And then coming back to, obviously, the chlor-alkali business, you built a new 350-kiloton plant that came up, I think full rates already. How should we think about the impact, the profitability impact of that facility, what percent should we ascribe to 2014 versus 2015?

Frank, when we think about operating rates, we're running the unit there at what I would call commercial rates and taking -- and I think you can see the improvement in the plant over the start-up over the last 9 months. And so I think you can see that the plant is running, and we're taking the plant operating rates at, as I say, commercial operating level.

My sense is that it took a while to get to that and you're incurring some costs, such that the back half of the year, you're probably at commercial profitability and then therefore, the other half would come in, in 2015. So I'm just talking -- I'm just trying to get a sense as to the benefits that Westlake's realizing from that new unit that roughly half of it hits in 2014 and half of it hits in 2015. Is that a fair way to look at it?

I think so. I think that's right. We did have the usual start-up of any new plant issues and I think that's the right way to think about it.

All right. And then you mentioned that the Petro 1 expansion project is on track for late 2015. Can you talk at all about what you're seeing in terms of the costs associated with that build relative to what your initial expectations were? Is everything on budget or do you see that facility perhaps costing a little bit more than your initial expectations?

No, we've given guidance for that, for the expansion there of $250 million to $310 million, and our numbers haven't changed. Of course, we built in the normal contingencies and escalations, but we feel very comfortable with that range of numbers I just quoted.

And the next question comes from the line of Kevin McCarthy from BofA Merrill Lynch.

This is Matt Con [ph] filling in for Kevin this morning. Given the decline in oil that you guys have touched on, how would you assess the likely impact of NGL production in the U.S.?

Well, NGL production also comes from natural gas and natural gas price is holding pretty well with the cold spell in the Northeast. So we have yet to see any slowdown in natural gas production yet.

And as a quick follow-up, can you quantify the magnitude of the Vinnolit inventory adjustment for 3Q?

It was, as I say, it negated the contribution of the 2 months that we owned it. It's about a $16 million number impact pretax.

Our next question comes from the line of Arun Viswanathan from RBC Capital Markets.

I just had a quick question, I guess, first on olefins. Were the volume expectations in line with what you thought it would turn out or were they below? And what was driving that? Was that mainly just coproducts lower volume there?

Yes, the volumes were in line with our expectation and the only change there was coproducts, and that was, as I mentioned, the fact that the coproducts are lower because we've switched from propane to ethane on a sequential basis if you're comparing those to prior quarters.

I guess on Vinyls, I just wanted to understand what's kind of the normal level now to expect with Vinnolit on a sales and income basis. How should we think about that? I mean, did you guys kind of double your business or how do you kind of look at that?

We've given some guidance when we announced the acquisition of Vinnolit, but, Arun, we're not going to give a breakout on an ongoing basis of Vinnolit's businesses. But if you want some guidance modeling, you can give us a call, but I can give you a range in terms of modeling work, but we gave the '13 numbers when we announced the acquisition of Vinnolit earlier this year.

And then I just had another kind of follow-up on the balance sheet. You're obviously running at a very healthy level now, net cash. I guess, what are your plans going forward? I mean, would you have to put in more -- would you consider putting in more ethylene capacity or downstream polyethylene capacity? Would you consider doing something larger? Doing something on the vinyls side? What are you guys looking at to greater utilize year balance sheet?

We've consistently said we'll continue to look for opportunities organically in terms of opportunities that expand our footprint that bring returns above that risk-adjusted cost of capital, obviously the ones that we see had the best return are the projects that we've announced and have been working on for several years. We've also looked at opportunities externally and you can see the acquisitions we made this year with Vinnolit and 1 prior year with the CertainTeed acquisition, so you'll see us continue to look for growth opportunities that return an above adjusted cost of capital to shareholders.

So that means you would consider something large even -- as long as it was above your risk-adjusted return basis?

Well, the answer is we'll assess those opportunities, but you also have to factor in the risk associated, the risk adjustment that I was referring to, to your cost of capital report.

[Operator Instructions] And our next question comes from the line of Don Carson from Susquehanna.

This is Bobby Geornas for Don Carson. Just a housekeeping question, of the $24.5 million in pretax corporate expenses, how much of that, I guess, was split between sort of corporate and the different segments? Could you just give us a breakout of sort of how that impacted the segment numbers?

Yes, when you think about the outages, when you think about the $0.34 impact, the outages were attributable to the Vinyls segment. When you think about the contribution to the corporate unit, those were the numbers that I spoke of earlier, we talked about on an after-tax basis, to keep everything on an after-tax basis. It was about a $12 million impact to inventory and that was in the Vinyls segment and the rest of that goes to corporate, which is the Vinnolit and the MLP formation costs, acquisition costs.

Okay, so the balance of the -- if you take $24.5 million and adjust it for the $12 million inventory, then the balance goes to corporate.

Yes.

And our next question comes from the line of John Roberts from UBS.

The new Lake Charles expansion that you just announced, I think it's 1,000 construction jobs you talked about at peak. There's been chatter that engineering availability was already tightening and cost were escalating, but your announcement would seem to suggest there's engineering capacity to be found. Could you talk a little bit about your experience in booking that project?

Yes, we've been planning for the project for a while and so it's an expansion of an existing plant. So some of the work we are progressing well, and we hope we will not experience any labor shortages with the project going forward.

Okay, you wouldn't call the market for engineering services particularly tight or...

It's tight, but manageable.

[Operator Instructions] We have our next question, and it comes from the line of Jeff Zekauskas from JPMorgan. Jeffrey J. Zekauskas - JP Morgan Chase & Co, Research Division: I think, Steve, early in the call, you might have said that the inventory adjustment for Vinnolit offset the Vinnolit profit contribution. Did you say that?

Yes. Jeffrey J. Zekauskas - JP Morgan Chase & Co, Research Division: Okay, so what we should understand is that it probably had a neutral effect inclusive of the -- a neutral effect to EBIT inclusive of the inventory adjustment. Is that right?

It's about -- it's at that order of magnitude, correct. Jeffrey J. Zekauskas - JP Morgan Chase & Co, Research Division: Okay, and in your tables, you said that the Vinyls volume growth was, I think, 68% in the quarter. What might be in rough terms the volume growth exclusive of the acquisition in the quarter? Did it go up? Did it go down? Is it plus a few percent, minus a few percent?

Yes. It's up a few percent, but the biggest contributor, as you noted, was Vinnolit.

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

Yes. Thank you very much. We appreciate you participating in today's call. We hope you will join us again for our next conference call to discuss our fourth quarter and full year results for 2014. 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 4 hours after the call has ended, and may be accessed until 1 p.m. Eastern time on Tuesday, August 11, 2014 (sic) [November 11, 2014]. The replay can be accessed by calling the following numbers: Domestic callers should dial 1 (888) 286-8010. International callers may access the replay at (617) 801-6888. The access code at both numbers is 59480928. Thank you, ladies and gentlemen. That concludes our conference call for today. You may now all disconnect. Thank you.