Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the Westlake Chemical Corporations' Second Quarter 2015 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 the question-and-answer session. As a reminder, ladies and gentlemen, this conference is being recorded today, August 4, 2015. I would now like to turn the call over to today's host, Mr. David Hansen, Westlake Chemical Partners’ Senior Vice President of Administration. Sir, you may begin.

Thank you very much. Good morning, everyone, and welcome to the Westlake Chemical Corporation second quarter 2015 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 agenda will begin with Albert, who will open with a few comments regarding Westlake's performance in the second quarter of 2015 followed by 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 then we will open the call up to questions. At times today, we may refer to ourselves as Westlake Chemical, reference as to Westlake Partners referred to the master limited partnership Westlake Chemical Partners LP reference’s to OpCo referred to Westlake Chemical OpCo LP who’s assets consistent two natural gas liquids processing facilities located in Lake Charles, Louisiana a natural gas liquids processing facility located in Calvert City, Kentucky and an ethylene pipeline that runs from Mont Belvieu, Texas to the chemical facilities located in Longview, Texas. 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 or 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 market, technological developments and other risk factors discussed in our SEC filings. This morning, Westlake issued a press release with details of our second quarter 2015 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 two hours after completion of this call until 11:59 PM Eastern time on August 11, 2015. The replay may be accessed by dialing the following numbers; domestic callers should dial 1855-859-2056; international callers may access the replay at 404-537-3406. The access code for both numbers is 82598901. Please note that information reported on this call speaks only as of today, August 4, 2015, 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 would 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 second quarter results. In this morning's press release we reported record quarterly net income of $205 million or $1.54 per diluted share, on sales of $1.2 billion. We also reported record income on operations in our vinyl segment along with strong performance in our olefins segment. The second quarter saw lower global crude oil prices that resulted in lower fee stock cost for global ethylene producers which intern lowered the sales prices for all of our major products as compared to 2014. In spite of the lower crude oil price environment our segments delivered strong performance in the second quarter and benefited from improving demand for our polyethylene and PVC end products as well as the benefits of our integration investments to capture the full range of margins in the vinyl segment. In the past two years we've invested approximately $2 billion to further expand our ethylene and chlorine chain integration through our ethylene unit expansions at both our Lake Charles and Calvert City facilities the new chlor-alkali unit in Geismar, Louisiana, a PVC expansion in Calvert City as well as through our acquisition of Vinnolit and North American Specialty Pipe which broaden our vinyl portfolio to include specialty PVC resin and pipes. 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?

Thank you Albert and good morning everyone. I’ll start with discussing our consolidated financial results followed by a detailed review of our Olefins and Vinyls segment results. Let me begin with our consolidated results. In this morning’s press release, Westlake reported record net income for the second quarter of 2015 of $205 million or $1.54 per diluted share and net sales of $1.2 billion. This represents an increase of $36 million or $0.28 per diluted share compared to the second quarter of 2014 net income of $169 million or $1.26 per diluted share on net sales of $999 million. Net income for the second quarter of 2015 included a net pre-tax gain of $16 million or $0.13 per diluted share related to a gain from the acquisition of controlling interest in our Chinese PVC joint venture, and an impairment loss related to an equity investment. The gain from the acquisition was non-taxable and lowered our effective tax rate for the second quarter of 2015 from approximately 34.3% to 31.9%, excluding this one-time net gain our earnings would have been $1.41 per diluted share. Net sales for the second quarter of 2015 increased by $186 million over the same period in 2014, mainly due to sales contributed by Vinnolit, our specialty PVC resin business, which we acquired in July 2014, and higher sales volumes for most of our major products, partially offset by lower sales prices for all of our major products. Second quarter 2015 income from operations was $295 million, an increase of $28 million over the second quarter of 2014. Operating income benefitted from higher vinyls integrated product margins as a result of lower feedstock costs, increased production rates at our Calvert City facility following the completion of the ethylene expansion projects, higher production rates at our Geismar chlor-alkali…

Thank you Steve. In the second quarter we delivered record quarterly results which were supported by strong performance in both of our segment. The global excess supply of crude oil has continued into the fourth consecutive quarter, putting downward pressure on crude oil prices and the selling prices of our major products, in spite of this our business results have benefited from the investments that we've made since 2013 to strengthen our integration, add to our facilities PVC resigns business and pipe businesses, load our cost position and improve our earnings capacity. We believe that underlying factors that are favorable to our businesses remain in place. North American natural gas liquids feedstock will remain globally competitive into the future which allows us to maintain our position as a low cost integrate producer of polyethylene and PVC. Our focus on differentiated and specialty products both in polyethylene and PVC will continue to position us well as global economies continue to recover. Looking forward we remain focused on identifying opportunities that will strengthen our product integrating, leverage our existing asset base and add to our earnings potential. Our product team continues with extension work of our Petro 1 ethylene unit at our Lake Charles facility which is on schedule for completion in the first half of 2016. Thank you very much for listening to our earnings call this morning. Now I'll turn the call back over to Dave Hansen. Dave?

Thank you very much Albert. Ladies and gentlemen before we begin taking questions I would like to remind you that replay of this teleconference will be available starting in two hours after we conclude the call. We’ll provide that number again at the end of the call. Operator we’re now prepared to take questions.

[Operator Instructions]. Our first question comes from the line of [indiscernible] from RBC Capital Markets. Please proceed with your question.

I guess my first question is just on the polyethylene market. What are you guys seeing right now as far as demand, obviously you have a pretty strong second quarter. However the trade industries are talking about some downward momentum on pricing. Is that something that you are seeing as well? And also what do you see on the supply side as far as outages in the second half of the year?

Yes, we had a good polyethylene and vinyl business for the second quarter. Seasonally the second quarter and third quarter usually are the two strong quarters of the year for both polyethylene and PVC and we expect the third quarter also to continue to with the seasonal pattern of good volume. There is a $0.05 a pound price increase that’s still is outstanding for polyethylene and is been pushed into August or September depending on the producers. And we believe that depending on oil price moments, if oil price stabilizes there is a potential for heavy note price increase to push through.

And then I guess on the vinyl's business, was it the case that you were able to take any share in the second quarter because of competitor outages or some outages would be ethylene [ph] pipeline. And then if you could just help us to understand what portion of the improvement year-on-year was from organic growth versus Vinnolit that would be very helpful.

Certainly it’s from the earnings and our volume base of vinyl segment, Vinnolit played a big part in the increase. But we’re also seeing volume improvements in the domestic and export market for our U.S. business, however as you know the PVC price that did drop compared to last year. So the price moved down when volume moved up.

As it reminds to the year-on-year comparison, I recall that we had not acquired Vinnoli this point in time last year and so the major contribution really though was driven by our integration investments that Albert made reference to earlier. Certainly Vinnoli was the nice contributor but the biggest driver of course is the integration investments that Albert made earlier reference too.

And just as a final follow-up, can you help us understand your own over the six months to 12 months on the ECU and what expected caustic soda prices will track?

Yes, with the summer season the demand for chlorine increases not only water treatment, but also for PVC and construction. So demand soaring high and production of caustic also is high measured with the chlorine production. As we go to the winter season this will slowdown and put less pressure on caustic.

And our next question comes from the line of Jim Sheehan from SunTrust. Please proceed.

Just following up on the caustic soda comments there, do you see any potential for upward pricing momentum in the fall due to industry outages and related to that do you -- does Westlake have any outages plan in the fourth quarter -- in the fall of the fourth quarter?

No, Westlake does not have any caustic plans to turnaround in the fourth quarter. If you look at IHS forecast, they are forecasting caustic prices to move up in the fourth quarter of this year.

And on the ethylene supply demand you mentioned tightness in Europe possibly extending a little further into the third quarter here, when do you guys expect that to loosen up a bit or do you think it remains tight for the balance of the year?

We think that the European ethylene business is improving, I think most of the plans are coming back, I think the impact on us is more of an inventory issue that will move over into the third quarter.

And lastly could you just comment on your pipeline dispute with Eastman, where does that stand now and when do you think that will be resolved?

We’ve taken that dispute, this is the directional flow, we’ve taken that dispute into the courts and it's unclear in terms of how long that will take to get result. So we’ll just have to keep you posted to see where that -- when that to close.

Your next question comes from the line of Frank Mitsch from Wells Fargo. Please proceed.

And obviously gentlemen you lead the quarter with yet again a terrific balance sheet and I saw that you stepped up significantly this year, buyback activity in the quarter, can you talk about how you're thinking about use of cash for the balance of the year and into next year share buyback versus possible M&A and what the M&A landscape may look like for your particular set of businesses?

As I mentioned earlier, we’re continuing to work through the expansion that we have in Lake Charles and complete that in 2016 in the first-half and so part of the cash will be used obviously for that expansion plan, certainly we continue to look at deploying the cash on a regular basis, we assess opportunities in the market and at the same time we do have an authorize program by the Board to buy shares back and you saw that we did just exactly some of that in the prior quarter. So we’ll continue to assess opportunities and see how they fit into our overall business strategies.

What is your sense in terms of the valuation multiples in the chlor-alkali side of the business as well as in your Olefin side of the business?

Well we certainly always assess that relative to where they are and where they will go and that’s part of the analysis that we’ll always undertake.

Looking at the chlor-alkali side obviously you talked about getting greater volumes out of the Geismar facility, what were your operating rates in the second quarter and how were they trending so far through July?

The operating rate’s quite high as mentioned in call that Geismar facility is running quite well and we believe it will into the third quarter as well.

So north of 90% or south of 90%?

I think we’re running at a high industry average rate.

Higher than industry average, so still be in the upper 80s.

And our next question comes from Hassan Ahmed from Alembic Global. Please proceed.

Nice bump up obviously on the Vinyl side of things both year-on-year and sequentially, just wanted to get a sense of some of the raw material sourcing you may be doing out in Europe, I mean you talked about how Vinnolit was a major contributing factor to the sequential uptick in earnings. Is there some form of advantage sort of raw material sourcing you are doing out in Europe?

Nothing in particular. As you know Vinnolit has been in business for decades and they have very good management team and have very good suppliers.

So just essentially regular market purchases?

Yes.

On the polyethylene side, a bit of a broader question, obviously a fair bit of noise around the Delta between Asian and U.S. pricing being on the higher side relative to sort of where it is normally, I mean your view is that sustainable near to medium term?

There is the relationship between the export price and domestic price and they reflect on each other. I think the Asian price reflect mainly by the recent movement in crude oil, as you know we are early -- but still early in the first quarter, so we don't know what crude oil will do and today went up by 1% or 2%, this morning.

Our next question comes from the line of Edlain Rodriguez from UBS. Please proceed with your question.

Just one quick one on PVC, like what are you seeing in prices and also relative to ethylene prices, I mean those -- can PVC price stay up even if ethylene prices come down or do they have to move together and essentially like those of PVC, is the PVC market strong enough to get the pricing on its own?

According to some relationship between feedstock costs and prices and PVC has industry exports of about 30% of PVC to international markets. So, the prices of international markets would an impact on the export prices and may have an impact directly on domestic prices outwards.

And our next question comes from the line of David Begleiter from Deutsche Bank. Please proceed.

Capital expenditure, that'll be Petro 1 completes the expansion next year, should capital spending trend be flat in next year or it'll be down post to that expansion?

David, we haven't announced for 2016 capital spending program, but certainly the capital spending as you would guess will be more elevated in the first half of 2016 and we will give latter guidance as we give it towards the end of the year for the full year 2016, but certainly we have no other announced projects at this stage or the for the public at this stage, but we continue to evaluate those all the time.

Just on the buyback question, Albert and Steve, should the pace of buybacks from the second half be similar to the pace of buybacks in the first half?

The program that we have authorized from the board allows us to use management judgment in that. We'll assess the market at that time.

And our next question is from the line of Don Carson from Susquehanna Financial. Please proceed.

Just want to go back to your year-over-year volume growth in Vinyl's -- you know they are just under 100%, which of those comparisons do you start to lap in Q3, so what kind of year-over-year -- how do the year-over-year comparisons get tougher?

On the Vinnolit business would have partial quarter in third quarter last year and for volume basis the difference will be less.

And then how about in the caustic side, I know you took your time to ramp up guidance for last year, but was that fully ramped by Q3?

Last year did not operate as well as this year so far. So, into the third quarter it should be -- our caustic business should do better than last year.

And then just if you remind, what's your ability to run propane at Petro 2?

Before we made our expansion we had ability to run 50% propane but as we expanded our ethylene plant that ability has dropped.

And how far is that dropped? Is that cut in half?

We have not disclosed -- discussed that publicly [multiple speakers].

And then how about Calvert City, I know you would lose ethylene capacity if you ran propane, but do you ever run propane through their from time to time or is that just strictly ethylene now to get the ethylene production you need?

As most, it is ethylene because of the volume we need.

Our next question comes from the line of Alexi [indiscernible]. Please proceed with your question.

Thank you. This is [indiscernible] for Alexi. Could you come in on the housing situation in U.S. and Europe and what sort of outlook you see for the second half and how does that translates down into Vinyl?

In recent months, we've seen uptick in home constructions for that's positive, on the other hand there's still a large part -- about 30%, 40% of that is still more to multi- family which requires less materials such as PVC like unit of housing unit building. So, we've liked the trend, but it's not making having the material impact on the demand of PVC.

And then Europe?

I think Europe is -- it's gradually returning, economy is improving but very gradually and we don't play a big part in the housing market in Europe.

And you mentioned that you haven't changed Vinnolit's thrusting strategy much. On the foot side have you been able to be in traction on leveraging their technology or products in the U.S. or any other benefits along those lines?

Yes, we have very active exchange of information between the two companies, technology people and we are both benefiting from our home technologies.

And our next question comes from the line of Brian Maguire from Goldman Sachs. Please proceed with your question.

Obviously a very strong results in Vinyls, just wanted if you could provide an update on the synergies and how they are going at Vinnolit and how far along you are in achieving the expected cost synergies as well as any revenue synergies that you might have found in the meantime?

Brian as Albert noted we have really good exchange of technologies going on and have with Vinnolit people at this stage within fully integrated with the Vinnolit business, and feel very good about the acquisition and feel like it's been well integrated into our overall business and seeing some of the benefits accordingly.

Are you able to shift EDC from the U.S. to Europe to source in Vinnolit, is that an option for you guys either over the last couple of months or going forward. Do you expect any changes going forward on the sourcing strategy there?

We've studied that, so far we haven't shipped EDC to Europe.

Just one last one if I could, just a comment on recent trends in light of the drop in oil prices are you seeing any early signs that customers might be holding off on some purchases either in the U.S. or Europe?

Our third quarter is quite strong and even into the second quarter is quite strong volume into the third quarter we still see a pretty stronger demand for our products.

[Operator Instructions]. Our next question comes from the line of [indiscernible] from JP Morgan. Please proceed.

You bought back many more shares than second than you in the first. But I think your average share price Westlake was much higher in the second quarter that it was in the first. What let to your change of heart?

It wasn't necessarily a change of heart it was certainly an opportunity to continue to buy shares and if you look at not only what activity we’ve required, we've taken and acquiring these shares in that quarter but I also looked back over the period of time when we've been authorized by the Board to buy shares and we still have a very attractive average share acquisition price relative to the current price today. Program that Board authorized continued in effect and we’ll continue to assess opportunities to buy shares opportunistically in the marketplace.

And what was your average acquisition price in the second quarter?

Within the 70s.

Within the 70s?

Yes, up 71.

And you have no time tables. So you have roughly 190 left on our authorization is that right?

That’s right.

And you have no timetable for that completion of that?

No there is no limit that Board has given us to exercise that program, it's a discretionary program.

And are your acquisition prospects better than they were three months ago or worse or it's too hard to tell?

Well they are continued to be a lot of ideas that we look at and we continue to asses those on a regular basis.

Are they large ideas, small ideas or it's hard to tell?

They run the range, both large and small of course.

How large?

Realistically, they run the range of course.

Operator we have time for one more question please.

And our final question comes from the line of Jim Sheehan from SunTrust. Please proceed.

Could you comment on your building products volumes? I remember last quarter you said these were impacted by weather a little bit did you see any bounce back in the second quarter and how has the dynamic changed if at all in early July here?

The building product volume have improved compared with the first quarter, but not dramatically.

At this time the Q&A session has now ended. Are there any closing remarks?

Yes, we would like to thank you very much for participating in today's call. We hope you will join us again for our next conference call to discuss our third quarter 2015 results. Have a great day.