false000126282300012628232024-11-052024-11-050001262823us-gaap:CommonStockMember2024-11-052024-11-050001262823wlk:OnePointSixTwoFivePercentageSeniorNotesDueTwentyTwentyNineMemberDomain2024-11-052024-11-05

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): November 5, 2024

Westlake Corporation
(Exact name of registrant as specified in its charter)

Delaware001-3226076-0346924
(State or other jurisdiction
of incorporation)		(Commission File Number)(I.R.S. Employer
Identification No.)

2801 Post Oak Boulevard, Suite 600
Houston, Texas77056
(Address of principal executive offices)(Zip Code)
Registrant's telephone number, including area code: (713) 960-9111

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.01 par valueWLKThe New York Stock Exchange
1.625% Senior Notes due 2029WLK29The New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
 
Emerging growth company ☐


If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ◻





Item 2.02. Results of Operations and Financial Condition.
On November 5, 2024, Westlake Corporation (the "Company"), issued a press release announcing its 2024 third quarter results. A copy of the press release is furnished with this Current Report as Exhibit 99.1.
The information furnished pursuant to this Current Report, including Exhibit 99.1, shall not be deemed to be "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and will not be incorporated by reference into any registration statement filed by Westlake Corporation under the Securities Act of 1933, as amended, unless specifically identified as being incorporated therein.
Item 7.01. Regulation FD Disclosure.
The Company is holding a conference call on November 5, 2024 to discuss its 2024 third quarter results. Information about the call can be found in the press release furnished with this Current Report as Exhibit 99.1. In addition, the Company made available an investor presentation regarding its 2024 third quarter results, which is furnished with this Current Report as Exhibit 99.2.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
The following exhibits are furnished herewith:
104    The cover page from this Current Report on Form 8-K, formatted in Inline XBRL.



SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

WESTLAKE CORPORATION
Date:November 5, 2024By:
/S/ JEAN-MARC GILSON
Jean-Marc Gilson
President and Chief Executive Officer





EXHIBIT 99.1
WESTLAKE CORPORATION

Contact—(713) 960-9111
Investors—Steve Bender
Media—L. Benjamin Ederington


Westlake Corporation Reports Third Quarter 2024 Results
HOUSTON--(BUSINESS WIRE)--Westlake Corporation (NYSE: WLK) (the "Company" or "Westlake") today announced third quarter 2024 results.

SUMMARY FINANCIAL HIGHLIGHTS (in millions of dollars, except per share data and percentages)
Three Months Ended September 30, 2024Three Months Ended June 30, 2024Three Months Ended September 30, 2023
Westlake Corporation
Net sales$3,117$3,207$3,115
Income from operations
$180$406$349
Net income attributable to Westlake Corporation
$108$313$285
Diluted earnings per common share
$0.83$2.40$2.20
Identified Item (1)
$75$—$—
Net income attributable to Westlake Corporation excl. Identified Item
$183$313$285
Diluted earnings per common share excl. Identified Item
$1.41$2.40$2.20
EBITDA$505$744$682
EBITDA excl. Identified Item
$580$744$682
EBITDA margin (2)
19%23%22%
Performance and Essential Materials ("PEM") Segment
Net sales$2,019$2,013$1,971
Income from operations
$(9)$157$105
EBITDA$222$391$339
Identified Item (1)
$75$—$—
EBITDA excl. Identified Item
$297$391$339
EBITDA margin (2)
15%19%17%
Housing and Infrastructure Products ("HIP") Segment
Net sales$1,098$1,194$1,144
Income from operations$202$266$256
EBITDA$262$336$327
EBITDA margin24%28%29%
i

______________________________
(1)"Identified Item" represents $75 million accrued expense to temporarily cease operations ("mothball") of the allyl chloride (AC) and epichlorohydrin (ECH) units at the Company's site in Pernis, the Netherlands
(2)Excludes Identified Item
RESULTS
Consolidated Results
(Unless otherwise noted the financial numbers below exclude the Identified Item)
For the third quarter of 2024, the Company reported net sales of $3.1 billion, net income of $183 million, or $1.41 per share, and EBITDA (earnings before interest expense, income taxes, depreciation and amortization) of $580 million. During the third quarter of 2024, we experienced extended maintenance outages at our ethylene JV facility, which drove higher purchases of ethylene feedstock, and one of our chlorovinyl facilities.

Third quarter 2024 sales of $3.1 billion declined by 3% compared to the second quarter of 2024. Company sales volume decreased 4% sequentially while average sales price increased 1% from the previous quarter. Net income of $183 million decreased by $130 million as compared to the second quarter of 2024. The sequential decrease in net income compared to the prior quarter was primarily due to the aforementioned production outages, higher ethylene feedstock costs and lower sales volume.

EBITDA of $580 million for the third quarter of 2024 decreased by $102 million as compared to third quarter 2023 EBITDA of $682 million. Third quarter 2024 EBITDA decreased by $164 million as compared to second quarter 2024 EBITDA of $744 million.

A reconciliation of EBITDA (including and excluding the Identified Item) to net income, income from operations and net cash provided by operating activities can be found in the financial schedules at the end of this press release. Reconciliations of segment EBITDA (including and excluding the Identified Item) to net income and income from operations can be found in the financial schedules at the end of this press release.
Mothball Expenses ("Identified Item")
During the third quarter of 2024, the Company accrued $75 million of mothball expenses in the Performance and Essential Materials segment related to the previously announced decision to mothball two units within our European epoxy business to align our manufacturing footprint and costs with changing global conditions. Consistent with our previous disclosure, cash outflows related to these mothball expenses are expected to occur over several years starting in 2025.
Cash and Debt
Net cash provided by operating activities was $474 million for the third quarter of 2024 and capital expenditures were $220 million. $300 million of maturing senior notes were redeemed during the quarter, resulting in cash and cash equivalents of $2.9 billion and total debt of $4.6 billion as of September 30, 2024.
Performance and Essential Materials Segment
(Unless otherwise noted the financial numbers below exclude the Identified Item)
For the third quarter of 2024, PEM sales of $2.0 billion were in line with the second quarter of 2024. PEM sales volume decreased 1% quarter-over-quarter while average sales price increased 1% sequentially.

PEM income from operations was $66 million in the third quarter of 2024 as compared to income from operations of $157 million in the second quarter of 2024. This sequential decrease of $91 million was primarily driven by unplanned outages and higher ethylene feedstock costs, which were partially offset by higher average sales price, particularly for polyethylene.

ii

Compared to the prior year period, PEM income from operations decreased by $39 million. This decrease in income from operations versus the third quarter of 2023 was primarily driven by unplanned outages and lower average sales price that were partially offset by higher sales volume, particularly for chlorine, caustic soda and epoxy resin.
Housing and Infrastructure Products Segment
For the third quarter of 2024, HIP sales of $1.1 billion decreased from second quarter of 2024 sales of $1.2 billion as a result of lower sales volume due to slower North American residential construction activity and weather disruptions.

HIP income from operations was $202 million in the third quarter of 2024 as compared to income from operations of $266 million in the second quarter of 2024. This sequential decrease of $64 million was primarily due to lower sales volume at most product categories as a result of slower North American residential construction activity and weather disruptions.

Compared to the prior year period, HIP income from operations decreased by $54 million. This decrease in income from operations versus the third quarter of 2023 was primarily driven by lower average sales price and lower sales volume, particularly for pipe & fittings.
EXECUTIVE COMMENTARY
"During the third quarter of 2024, global macroeconomic trends modestly improved from the environment we saw in the second quarter of 2024 with relatively solid and improving conditions in North America, a continuing recovery in Asia, and slow improvement in Europe. Demand for our products during the third quarter was consistent with these market conditions, and our third quarter financial results would have reflected these trends if it had not been for extended maintenance outages at two plants during the quarter in our PEM segment. While we are disappointed with this operational performance, we have completed the maintenance and these plants have returned to service. Furthermore, we are applying the lessons learned from these incidents to other plants, while increasing our focus on preventive maintenance across our organization to improve the reliability of our plants," said Jean-Marc Gilson, President and Chief Executive Officer.

"The pace of the recovery from the recent trough in global industrial and manufacturing activity remains uneven. However, recent monetary and fiscal stimulus, including actions by the Federal Reserve and the Chinese government, have the potential to accelerate the pace and duration of the macroeconomic recovery. Meanwhile, we will continue to focus on our levers for growth, including developing and commercializing innovative new products to help our customers address their needs, improving the profitability and reliability of our plants, and redeploying our investment-grade balance sheet to create long-term shareholder value," concluded Mr. Gilson.
iii

Forward-Looking Statements
The statements in this release and the related teleconference relating to matters that are not historical facts, including statements regarding our outlook for the performance of our business segments, global macroeconomic conditions, continuing stabilization or increases in sales prices, volumes, margins and profitability in both domestic and export markets for most of our products, industrial, manufacturing, residential construction and infrastructure activity in our target markets, our ability to weather economic volatility, raw material costs, higher energy prices, the earnings potential of our assets, monetary and fiscal policies domestically and abroad, the pace and duration of economic recovery, our ability to improve profitability and reliability of our plants, future preventative maintenance activities, our ability to continue to execute our strategies, and our ability to create long-term value for our shareholders are forward-looking statements.

These forward-looking statements are subject to significant risks and uncertainties. Actual results could differ materially, based on factors including, but not limited to: general economic and business conditions; the cyclical nature of the chemical and building products industries; the availability, cost and volatility of raw materials and energy; the results of acquisitions and our integration efforts; uncertainties associated with the United States, European and worldwide economies, including those due to political tensions and conflict in the Middle East, Russia and Ukraine and elsewhere; uncertainties associated with pandemic infectious diseases; uncertainties associated with climate change; the potential impact on demand for ethylene, polyethylene and polyvinyl chloride due to initiatives such as recycling and customers seeking alternatives to polymers; current and potential governmental regulatory actions in the United States and other countries; industry production capacity and operating rates; the supply/demand balance for Westlake's products; competitive products and pricing pressures; instability in the credit and financial markets; access to capital markets; terrorist acts; operating interruptions (including explosions, fires, weather-related incidents, unscheduled downtime and environmental risks); changes in laws and regulations, including trade policies; technological developments; information systems failures and cyberattacks; foreign currency exchange risks; our ability to implement our business strategies; creditworthiness of our customers; the effect and results of litigation and settlements of litigation; and other risk factors. For more detailed information about the factors that could cause actual results to differ materially, please refer to Westlake's Annual Report on Form 10-K for the year ended December 31, 2023, which was filed with the SEC in February 2024, and Westlake's Quarterly Report on Form 10-Q for the quarter ended June 30, 2024, which was filed with the SEC in August 2024.
Use of Non-GAAP Financial Measures
This release makes reference to certain "non-GAAP" financial measures, such as EBITDA, EBITDA margin and certain financial measures adjusted to exclude the effect of the Identified Item, as defined in Regulation G of the U.S. Securities Exchange Act of 1934, as amended. For this purpose, a non-GAAP financial measure is generally defined by the Securities and Exchange Commission (SEC) as a numerical measure of a registrant's historical or future financial performance, financial position or cash flows that (1) excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with GAAP in the statement of income, balance sheet or statement of cash flows (or equivalent statements) of the registrant; or (2) includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented. We report our financial results in accordance with U.S. generally accepted accounting principles (U.S. GAAP), but believe that certain non-GAAP financial measures, such as EBITDA, EBITDA margin and certain financial measures that exclude the effect of the Identified Item, provide useful supplemental information to investors regarding the underlying business trends and performance of the Company's ongoing operations and are useful for period-over-period comparisons of such operations. These non-GAAP financial measures should be considered as a supplement to, and not as a substitute for, or superior to, the financial measures prepared in accordance with U.S. GAAP. A reconciliation of (i) EBITDA to net income, income from operations and net cash provided by operating activities (including and excluding the Identified Item), and (ii) segment EBITDA to segment income from operations (including and excluding the Identified Item) can be found in the financial schedules at the end of this press release.
About Westlake
Westlake is a global manufacturer and supplier of materials and innovative products that enhance life every day. Headquartered in Houston, with operations in Asia, Europe and North America, we provide the building blocks for vital solutions — from housing and construction, to packaging and healthcare, to automotive and consumer goods. For more information, visit the Company's web site at www.westlake.com.

iv

Westlake Corporation Conference Call Information:
A conference call to discuss Westlake Corporation's third quarter 2024 results will be held Tuesday, November 5, 2024 at 11:00 AM Eastern Time (10:00 AM Central Time). To access the conference call, it is necessary to pre-register at https://register.vevent.com/register/BI9dd3d967e2694f52b0a3216544d073e3. Once registered, you will receive a phone number and unique PIN number.
A replay of the conference call will be available beginning two hours after its conclusion. The conference call and replay will be available via webcast at https://edge.media-server.com/mmc/p/te7pi7po.
v


WESTLAKE CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
(in millions of dollars, except per share data and share amounts)
Net sales$3,117 $3,115 $9,299 $9,722 
Cost of sales2,618 2,529 7,670 7,702 
Gross profit499 586 1,629 2,020 
Selling, general and administrative expenses215 206 648 641 
Amortization of intangibles29 31 89 92 
Restructuring, transaction and integration-related costs75 — 83 6 
Income from operations180 349 809 1,281 
Interest expense(39)(40)(120)(124)
Other income, net44 56 153 101 
Income before income taxes185 365 842 1,258 
Provision for income taxes65 70 214 249 
Net income120 295 628 1,009 
Net income attributable to noncontrolling interests12 10 33 33 
Net income attributable to Westlake Corporation$108 $285 $595 $976 
Earnings per common share attributable to Westlake Corporation:
Basic$0.84 $2.22 $4.61 $7.61 
Diluted$0.83 $2.20 $4.58 $7.56 
Weighted average common shares outstanding:
Basic128,638,632 127,854,464 128,525,531 127,685,210 
Diluted129,340,461 128,583,927 129,237,560 128,509,618 
vi


WESTLAKE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
September 30,
2024		December 31,
2023
(in millions of dollars)
ASSETS
Current assets
Cash and cash equivalents$2,915 $3,304 
Accounts receivable, net1,754 1,601 
Inventories1,747 1,622 
Prepaid expenses and other current assets133 82 
Total current assets6,549 6,609 
Property, plant and equipment, net8,602 8,519 
Other assets, net5,958 5,907 
Total assets$21,109 $21,035 
LIABILITIES AND EQUITY
Current liabilities (accounts payable and accrued and other liabilities)$2,351 $2,491 
Current portion of long-term debt, net— 299 
Long-term debt, net4,616 4,607 
Other liabilities2,956 2,874 
Total liabilities9,923 10,271 
Total Westlake Corporation stockholders' equity10,662 10,241 
Noncontrolling interests524 523 
Total equity11,186 10,764 
Total liabilities and equity$21,109 $21,035 
vii


WESTLAKE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended September 30,
20242023
(in millions of dollars)
Cash flows from operating activities
Net income$628 $1,009 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization833 815 
Deferred income taxes(58)(67)
Net loss on disposition and others51 43 
Other balance sheet changes(574)(37)
Net cash provided by operating activities880 1,763 
Cash flows from investing activities
Additions to investments in unconsolidated subsidiaries(24)(18)
Additions to property, plant and equipment(723)(752)
Other, net11 20 
Net cash used for investing activities(736)(750)
Cash flows from financing activities
Distributions to noncontrolling interests(31)(33)
Dividends paid(197)(156)
Proceeds from exercise of stock options
13 39 
Repayment of senior notes(300)— 
Repurchase of common stock for treasury— (23)
Other, net(2)(2)
Net cash used for financing activities(517)(175)
Effect of exchange rate changes on cash, cash equivalents and restricted cash(15)(12)
Net increase (decrease) in cash, cash equivalents and restricted cash(388)826 
Cash, cash equivalents and restricted cash at beginning of period3,319 2,246 
Cash, cash equivalents and restricted cash at end of period$2,931 $3,072 
viii


WESTLAKE CORPORATION
SEGMENT INFORMATION
(Unaudited)
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
(in millions of dollars)
Net external sales
Performance and Essential Materials
Performance Materials$1,164 $1,127 $3,505 $3,549 
Essential Materials855 844 2,458 2,907 
Total Performance and Essential Materials2,019 1,971 5,963 6,456 
Housing and Infrastructure Products
Housing Products937 963 2,826 2,699 
Infrastructure Products161 181 510 567 
Total Housing and Infrastructure Products1,098 1,144 3,336 3,266 
$3,117 $3,115 $9,299 $9,722 
Income (loss) from operations
Performance and Essential Materials$(9)$105 $170 $723 
Housing and Infrastructure Products202 256 678 589 
Corporate and other(13)(12)(39)(31)
$180 $349 $809 $1,281 
Depreciation and amortization
Performance and Essential Materials$225 $225 $669 $652 
Housing and Infrastructure Products54 51 157 157 
Corporate and other2 1 7 6 
$281 $277 $833 $815 
Other income, net
Performance and Essential Materials$6 $9 $27 $14 
Housing and Infrastructure Products6 20 27 30 
Corporate and other32 27 99 57 
$44 $56 $153 $101 
ix


WESTLAKE CORPORATION
RECONCILIATION OF EBITDA TO NET INCOME, INCOME FROM OPERATIONS AND
NET CASH PROVIDED BY OPERATING ACTIVITIES (INCLUDING AND EXCLUDING IDENTIFIED ITEM)
(Unaudited)
Three Months Ended June 30,Three Months Ended September 30,Nine Months Ended September 30,
20242024202320242023
(in millions of dollars, except percentages)
Net cash provided by operating activities
$237 $474 $696 $880 $1,763 
Changes in operating assets and liabilities and other50 (354)(417)(310)(821)
Deferred income taxes36 — 16 58 67 
Net income
323 120 295 628 1,009 
Add:
Mothball expenses
— 75 — 75 — 
Net income excl. Identified Item
$323 $195 $295 $703 $1,009 
Net income
323 120 295 628 1,009 
Less:
Other income, net59 44 56 153 101 
Interest expense(41)(39)(40)(120)(124)
Provision for income taxes
(101)(65)(70)(214)(249)
Income from operations
406 180 349 809 1,281 
Add:
Mothball expenses
— 75 — 75 — 
Income from operations excl. Identified Item
406 255 349 884 1,281 
Add:
Depreciation and amortization279 281 277 833 815 
Other income, net59 44 56 153 101 
EBITDA excl. Identified Item
744 580 682 1,870 2,197 
Less:
Mothball expenses
— 75 — 75 — 
EBITDA$744 $505 $682 $1,795 $2,197 
Net external sales$3,207 $3,117 $3,115 $9,299 $9,722 
Operating Income Margin
13%6%11%9%13%
Operating income margin excl. Identified Item
13%8%11%10%13%
EBITDA Margin23%16%22%19%23%
EBITDA margin excl. Identified Item
23%19%22%20%23%


x

WESTLAKE CORPORATION
RECONCILIATION OF DILUTED EARNINGS PER COMMON SHARE TO DILUTED EARNINGS PER COMMON SHARE EXCLUDING IDENTIFIED ITEM
(Unaudited)
Three Months Ended June 30,Three Months Ended September 30,Nine Months Ended September 30,
20242024202320242023
(per share data)
Diluted earnings per common share attributable to Westlake Corporation
$2.40 $0.83 $2.20 $4.58 $7.56 
Add:
Mothball expenses
—0.58 —0.58 —
Diluted earnings per common share attributable to Westlake Corporation excl. Identified Item
$2.40 $1.41 $2.20 $5.16 $7.56 

WESTLAKE CORPORATION
RECONCILIATION OF FREE CASH FLOW TO NET CASH PROVIDED BY OPERATING ACTIVITIES
(Unaudited)
Three Months Ended June 30,Three Months Ended September 30,Nine Months Ended September 30,
20242024202320242023
(in millions of dollars)
Net cash provided by operating activities
$237 $474 $696 $880 $1,763 
Less:
Additions to property, plant and equipment231 220 $245 723 752 
Free cash flow
$6 $254 $451 $157 $1,011 
xi


WESTLAKE CORPORATION
RECONCILIATION OF PEM SEGMENT EBITDA TO INCOME FROM OPERATIONS (INCLUDING AND EXCLUDING IDENTIFIED ITEM)
(Unaudited)
Three Months Ended June 30,Three Months Ended September 30,Nine Months Ended September 30,
20242024202320242023
(in millions of dollars, except percentages)
Performance and Essential Materials Segment
Income (loss) from operations
$157 $(9)$105 $170 $723 
Add:
Mothball expenses
— 75 — 75 — 
Income (loss) from operations excl. Identified Item
157 66 105 245 723 
Add:
Depreciation and amortization224 225 225 669 652 
Other income, net10 6 9 27 14 
EBITDA excl. Identified Item
391 297 339 941 1,389 
Less:
Mothball expenses
— 75 — 75 — 
EBITDA
$391 $222 $339 $866 $1,389 
Net external sales$2,013 $2,019 $1,971 $5,963 $6,456 
Operating Income Margin
8%—%5%3%11%
Operating income margin excl. Identified Item
8%3%5%4%11%
EBITDA Margin19%11%17%15%22%
EBITDA margin excl. Identified Item
19%15%17%16%22%
WESTLAKE CORPORATION

RECONCILIATION OF HIP SEGMENT EBITDA TO INCOME FROM OPERATIONS
(Unaudited)
Three Months Ended June 30,Three Months Ended September 30,Nine Months Ended September 30,
20242024202320242023
(in millions of dollars, except percentages)
Housing and Infrastructure Products Segment
Income from operations$266 $202 $256 $678 $589 
Add:
Depreciation and amortization53 54 51 157 157 
Other income, net17 6 20 27 30 
EBITDA$336 $262 $327 $862 $776 
Net external sales$1,194 $1,098 $1,144 $3,336 $3,266 
Operating Income Margin22%18%22%20%18%
EBITDA Margin28%24%29%26%24%
xii


WESTLAKE CORPORATION
SUPPLEMENTAL INFORMATION
PRODUCT SALES PRICE AND VOLUME VARIANCE BY OPERATING SEGMENTS
(Unaudited)
Third Quarter 2024 vs. Third Quarter 2023Third Quarter 2024 vs. Second Quarter 2024
Average
Sales Price		VolumeAverage
Sales Price		Volume
Performance and Essential Materials-3 %+6 %+1 %-1 %
Housing and Infrastructure Products-3 %-1 %— %-9 %
Company-3 %+3 %+1 %-4 %

xiii
1 Earnings Presentation 3Q 2024

 
2 Third Quarter 2024 Highlights 3Q 2024 Financial Results(1) Improving underlying trends despite impacts from outages and weather • Sales volume increased 3% YoY driven by improving chlorine and caustic soda demand • Average sales price increased 1% QoQ with improvement in each segment • Performance and Essential Materials (PEM) EBITDA impacted by ~$120 million from two extended outages and $75 million from accrued mothball expenses in our epoxy business • EBITDA would have been comparable to 2Q 2024 levels if not for the extended maintenance outages in PEM and weather headwinds in Housing and Infrastructure Products (HIP) • 3Q 2024 cost savings of $35 million ($120 million YTD) towards our 2024 target of $125 – $150 million • Investment-grade credit rating with $2.9 billion of cash and equivalents $3.1B Net Sales 3% decrease vs. 2Q $183M Net Income(1,2) 42% decrease vs. 2Q $580M EBITDA(1,3) 22% decrease vs. 2Q $1.41 Net Income Per Share(1,2) $474M Net Cash Provided by Operating Activities $2.9B Cash and Equivalents (1) Excludes “Identified Item” consisting of $75 million after-tax accrued mothball expenses (2) Reconciliation of Net Income and Net Income Per Share excl. Identified Item to Net Income and Net Income Per Share can be found on page 11 (3) Reconciliation of EBITDA excl. Identified Item to Net Income, Income from Operations and Net Cash Provided by Operating Activities can be found on page 12

 
3 Westlake Corporation 3Q 2024(1) Sales volume grew 3% YoY driven by chlorine and caustic soda in PEM and global compounds in HIP Identified Item consisting of $75 million accrued mothball expenses negatively impacted PEM segment reported earnings Westlake 3Q 2024 vs. 2Q 2024 Average Sales Price +1.0% Volume -3.8% Westlake 3Q 2024 vs. 3Q 2023 Average Sales Price -2.9% Volume +3.0% 3Q'24 2Q'24 QoQ% 3Q'23 YoY% $3,117 $3,207 (3%) $3,115 0% $ 255 $ 406 (37%) $349 (27%) Performance and Essential Materials $297 $391 (24%) $339 (12%) Housing and Infrastructure Products $262 $336 (22%) $327 (20%) Corporate $21 $17 - $16 - $580 $744 (22%) $682 (15%) Operating Income(1) Sales EBITDA(1,2) ($ in millions) (1) Excludes “Identified Item” consisting of $75 million accrued mothball expenses (2) Reconciliations of EBITDA excl. Identified Item, Performance and Essential Materials EBITDA excl. Identified Item, Housing and Infrastructure Products EBITDA and Corporate EBITDA to the applicable GAAP measures can be found on pages 12 and 13 Extended maintenance outages reduced PEM EBITDA by ~$120 million in 3Q 2024 Average sales price increased 1% QoQ driven by higher polyethylene, caustic soda and PVC prices

 
4 Housing and Infrastructure Products (“HIP”) Segment Performance HIP Segment 3Q 2024 vs. 2Q 2024 Average Sales Price +0.5% Volume -8.6% HIP Segment 3Q 2024 vs. 3Q 2023 Average Sales Price -2.6% Volume -1.4% Average sales price increased QoQ, driven by PVC compounds and siding & trim Sales volume declined QoQ from the strong 2Q 2024 level in part due to unusually wet weather and disruptions created by Hurricanes Beryl and Helene Solid EBITDA margin of 24%(2) benefited from our integration and cost-saving actions (1) Reconciliations of HIP EBITDA to the applicable GAAP measure can be found on page 12 (2) HIP EBITDA margin is calculated by dividing HIP EBITDA by Total HIP Sales 3Q'24 2Q'24 QoQ% 3Q'23 YoY% Housing Products Sales $937 $1,010 (7%) $963 (3%) Infrastructure Products Sales $161 $184 (13%) $181 (11%) Total HIP Sales $1,098 $1,194 (8%) $1,144 (4%) Operating Income $202 $266 (24%) $256 (21%) EBITDA(1) $262 $336 (22%) $327 (20%) EBITDA Margin (2) 24% 28% - 29% - ($ in millions)

 
5 Housing and Infrastructure Products Update 2 New PVCO pipe plant under construction to support the strong growth and market adoption for this innovative product that streamlines the assembly process with a more sustainable environmental footprint 3 Disruptions caused by Hurricanes Beryl, Helene and Milton are impacting 2024 sales volume, but Westlake Royal Building Products is positioned well to help communities rebuild in 2025 once disaster relief funding is dispersed and insurance claims are processed 4 Repair & remodel activity provides steady growth driven by large number of homes in prime remodel age, healthy home equity levels, homeowners with low-rate mortgages remaining in place, and significant backlog of projects 1 Longer-term housing fundamentals remain strong due to decade-plus of under-building, increasingly favorable demographics and popularity of remote work

 
6 PEM Segment 3Q 2024 vs. 2Q 2024 Average Sales Price +1.3% Volume -1.0% PEM Segment 3Q 2024 vs. 3Q 2023 Average Sales Price -3.1% Volume +5.6% Higher polyethylene, caustic soda and PVC resin prices drive QoQ improvement in average sales price Preliminary U.S. duties on some Chinese and Indian epoxy imports set at ~100% spurred some improvement in U.S. epoxy pricing Slow improvement in global macroeconomic conditions, similar to 2Q 2024 3Q'24 2Q'24 QoQ% 3Q'23 YoY% Performance Materials Sales $1,164 $1,177 (1%) $1,127 3% Essential Materials Sales $855 $836 2% $844 1% Total PEM Sales $2,019 $2,013 0% $1,971 2% Operating Income(1) 66 157 (58%) $105 (37%) EBITDA(1,2) $ 297 $391 (24%) $339 (12%) EBITDA Margin (1,3) 15% 19% - 17% - ($ in millions) (1) Excludes “Identified Item” consisting of $75 million accrued mothball expenses (2) Reconciliations of PEM EBITDA excl. Identified Item to the applicable GAAP measure can be found on page 13 (3) PEM EBITDA margin is calculated by dividing PEM EBITDA excl. Identified Item by Total PEM Sales Performance and Essential Materials (“PEM”) Segment Performance(1) Extended maintenance outages reduced PEM EBITDA by ~$120 million in 3Q 2024

 
7 Performance and Essential Materials Update 2 Relatively stable North American demand as global macroeconomic conditions remain sluggish in Europe and Asia, but Westlake’s high degree of product integration and large offtake of PVC resin to the HIP segment provide less exposure to weaker economies outside North America 3 Long-term growth fundamentals remain in place, supported by the global need for clean water, housing, transportation, renewable energy, packaging and consumer goods 4 Global epoxy markets remain oversupplied due to substantial capacity additions in China resulting in significant exports of subsidized, low-priced product from Asia into our markets in Europe and the U.S. 1 Continued energy and feedstock advantage in North America (~85% of our production capacity) with a high degree of vertical integration relative to the global industry, which supports our ability to profitably run our plants at high operating rates

 
8 High Degree of Product Integration Combined With Globally Advantaged Low-Cost Position North America has a long-term cost advantaged position through abundant supply of Ethane from shale, electricity from natural gas and ample salt compared to global markets Integration from feedstock to final product captures margin across the production chain and throughout the economic cycle enhancing margin stability Westlake products serve key market trends in: • Electrification • Automotive innovation • Medical and healthcare • Clean and fresh water • Energy efficient and durable housing Polyethylene 2.6B lbs Styrene 570M lbs Chlorinated Products 2.2B lbs Epoxy Specialty Resins 580M lbs Base Epoxy Resins and Intermediates 1.3B lbs North American Merchant Ethylene Purchases ~1.1B lbs Vinyls Ethylene 4.8B lbs Chlorine 7.4B lbs Caustic Soda 8.1B lbs All ethane feedstock capability • Pulp & paper • Glass • Alumina • Tires • Latexes for paint & coatings • Flooring • Roofing • Wallpaper • Films • Coating • Automotive • Artificial leather • Fencing • Decking • Siding • Pipe • Flexible packaging • Shrink wrap • Trash bags End Market Products that Improve Lives Every Day: • Wind power • Aviation • Automotive • Coatings PVC 7.8B lbs HIP Products Note: Capacity figures per 2023 Form 10-K

 
99 Financial Reconciliations

 
10 Consolidated Statements of Operations Performance and Essential Materials Sales $ 2,019 $ 1,971 $ 2,013 $ 5,963 $ 6,456 Housing and Infrastructure Products Sales 1,098 1,144 1,194 3,336 3,266 Net sales 3,117 3,115 3,207 9,299 9,722 Cost of sales Gross profit Selling, general and administrative expenses Amortization of intangibles Restructuring, transaction and integration-related costs Income from operations Interest expense Other income, net Income before income taxes Provision for income taxes Net income Net income attributable to noncontrolling interests Net income attributable to Westlake Corporation $ 108 $ 285 $ 313 $ 595 $ 976 Earnings per common share attributable to Westlake Corporation: Basic $ 0.84 $ 2.22 $ 2.42 $ 4.61 $ 7.61 Diluted $ 0.83 $ 2.20 $ 2.40 $ 4.58 $ 7.56 10 33 33 10 12 323 70 214 249 4 406 (41) 59 2023 2024 2023 (In millions of dollars, except per share data) 424 101 65 (39) (40) (120) (124) 295 628 1,009 185 365 842 1,258 44 56 153 101 120 75 - 83 6 180 349 809 1,281 29 31 89 92 30 215 206 648 641 224 Three months ended September 30, Nine months ended September 30, Three months ended June 30, 499 586 1,629 2,020 2024 2,543 664 2,618 2,529 7,670 7,702 2024

 
11 Reconciliation of Net Income Attributable to Westlake Corporation and Earnings Per Diluted Share to Net Income and Diluted Earnings Per Share excl. Identified Item Net income $ 120 $ 295 $ 323 $ 628 $ 1,009 Less: Net income attributable to noncontrolling interests Net income attributable to Westlake Corporation 108 285 313 595 976 Add: Mothball expense accrual, after-tax Net income attributable to Westlake Corporation excl. Identified Item $ 183 $ 285 $ 313 $ 670 $ 976 Diluted earnings per common share attributable to Westlake Corporation $ 0.83 $ 2.20 $ 2.40 $ 4.58 $ 7.56 Add: Mothball expense accrual per share Diluted earnings per common share attributable to Westlake Corporation excl. Identified Item $ 1.41 $ 2.20 $ 2.40 $ 5.16 $ 7.56 75 - - - - 75 - - 12 10 10 33 33 0.58 0.58 Three months ended September 30, Three months ended June 30, Nine months ended September 30, 2024 2023 2024 2024 2023 (In millions of dollars, except per share data)

 
12 Net cash provided by operating activities $ 474 $ 696 $ 237 $ 880 $ 1,763 Changes in operating assets and liabilities and other Deferred income taxes Net income Less: Other income, net Interest expense Provision for income taxes Income from operations Add: Depreciation and amortization Other income, net EBITDA 505 682 1,795 2,197 Add: Mothball expense accrual EBITDA excl. Identified Item $ 580 $ 682 $ 744 $ 1,870 $ 2,197 Income from operations margin 6% 11% 13% 9% 13% EBITDA excl. Identified Item margin 19% 22% 23% 20% 23% 75 - - 75 - Three months ended September 30, Nine months ended September 30, 20242024 2023 2024 2023 Three months ended June 30, (In millions of dollars) 67 50 (354) (417) (310) (821) 36 0 16 58 323 120 295 628 1,009 (41)(39) (40) (120) (124) 59 44 56 153 101 406 180 349 809 1,281 (101)(65) (70) (214) (249) 59 44 56 153 101 279 281 277 833 815 744 Reconciliation of EBITDA excl. Identified Item to EBITDA, Net Income, Income from Operations and Net Cash Provided by Operating Activities

 
13 Three months ended September 30, Three months ended June 30, Nine months ended September 30, 2024 2023 2024 2024 2023 Performance and Essential Materials EBITDA excl. Identified Item $ 297 $ 339 $ 391 $ 941 $ 1,389 Less: Mothball Expense Accrual 75 - - 75 - Depreciation and Amortization 225 225 224 669 652 Other income, net 6 9 10 27 14 Performance and Essential Materials Operating Income (Loss) (9) 105 157 170 723 Housing and Infrastructure Products EBITDA 262 327 336 862 776 Less: Depreciation and Amortization 54 51 53 157 157 Other income, net 6 20 17 27 30 Housing and Infrastructure Products Operating Income (Loss) 202 256 266 678 589 Corporate EBITDA 21 16 17 67 32 Less: Depreciation and Amortization 2 1 2 7 6 Other income, net 32 27 32 99 57 Corporate Operating Income (Loss) (13) (12) (17) (39) (31) Performance and Essential Materials Operating Income (Loss) (9) 105 157 170 723 Housing and Infrastructure Products Operating Income 202 256 266 678 589 Corporate Operating Income (Loss) (13) (12) (17) (39) (31) Total Operating Income 180$ 349$ 406$ 809$ 1,281$ (In millions of dollars) Reconciliation of PEM EBITDA excl. Identified Item, HIP EBITDA and Corporate EBITDA to Operating Income (Loss)

 
14 Reconciliation of Free Cash Flow to Net Cash Provided by Operating Activities Net cash provided by operating activities $ 474 $ 696 $ 237 $ 880 $ 1,763 Less: Additions to property, plant and equipment Free Cash Flow $ 254 $ 451 $ 6 $ 157 $ 1,011 220 245 231 723 752 (In millions of dollars) Three months ended September 30, Three months ended June 30, Nine months ended September 30, 2024 2023 2024 2024 2023

 
15 Safe Harbor Language This presentation contains certain forward-looking statements including statements regarding our cost savings objectives and our ability to maintain synergies, pricing and demand for our products and across the industrial and manufacturing sectors, global macroeconomic conditions, anticipated sales volumes, industry outlook for both of our segments, our cost control and efficiency efforts, the effects of changing demographics in the markets that we serve, anticipated residential construction, repair and remodel activities and infrastructure growth, housing market fundamentals, the proliferation of electrification, expectations regarding mortgage rates and their effects on the affordability of homes, expectations regarding homebuilder confidence, our cost advantages in the North American chemicals market, benefits from construction of our new PVCO plant, and our participation in rebuilding efforts following hurricanes. Actual results may differ materially depending on factors, including, but not limited to, the following: general economic and business conditions; the cyclical nature of the chemical and building products industries; the results of acquisitions and our integration efforts; the availability, cost and volatility of raw materials and energy; uncertainties associated with the United States, European and worldwide economies, including those due to political tensions and conflict in the Middle East, Russia, Ukraine and elsewhere; uncertainties associated with pandemic infectious diseases; uncertainties associated with climate change; the potential impact on the demand for ethylene, polyethylene and polyvinyl chloride due to initiatives such as recycling and customers seeking alternatives to polymers; current and potential governmental regulatory actions in the United States and other countries; industry production capacity and operating rates; the supply/demand balance for our products; competitive products and pricing pressures; instability in the credit and financial markets; access to capital markets; terrorist acts; operating interruptions; changes in laws or regulations, including trade policies; technological developments; information systems failures and cyber attacks; foreign currency exchange risks; our ability to implement our business strategies; creditworthiness of our customers; the effect and results of litigation and settlements of litigation; and other factors described in our reports filed with the Securities and Exchange Commission. Many of these factors are beyond our ability to control or predict. Any of these factors, or a combination of these factors, could materially affect our future results of operations and the ultimate accuracy of the forward-looking statements. These forward-looking statements are not guarantees of our future performance, and our actual results and future developments may differ materially from those projected in the forward-looking statements. Management cautions against putting undue reliance on forward-looking statements. Every forward-looking statement speaks only as of the date of the particular statement, and we undertake no obligation to publicly update or revise any forward-looking statements. Investor Relations Contacts Steve Bender Executive Vice President & Chief Financial Officer John Zoeller Vice President & Treasurer Westlake Corporation 2801 Post Oak Boulevard, Suite 600, Houston, Texas 77056 | 713-960-9111

 

 
v3.24.3
Cover Page
Nov. 05, 2024
Document Information [Line Items]  
Document Type 8-K
Document Period End Date Nov. 05, 2024
Entity Registrant Name Westlake Corporation
Entity Incorporation, State or Country Code DE
Entity File Number 001-32260
Entity Tax Identification Number 76-0346924
Entity Address, Address Line One 2801 Post Oak Boulevard,
Entity Address, Address Line Two Suite 600
Entity Address, City or Town Houston,
Entity Address, State or Province TX
Entity Address, Postal Zip Code 77056
City Area Code 713
Local Phone Number 960-9111
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Entity Emerging Growth Company false
Amendment Flag false
Entity Central Index Key 0001262823
Common Stock [Member]  
Document Information [Line Items]  
Title of 12(b) Security Common Stock, $0.01 par value
Trading Symbol WLK
Security Exchange Name NYSE
One Point Six Two Five Percentage Senior Notes Due Twenty Twenty Nine [Member] [Domain]  
Document Information [Line Items]  
Title of 12(b) Security 1.625% Senior Notes due 2029
Trading Symbol WLK29
Security Exchange Name NYSE
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