If you like to see more ideas, please subscribe to the premium service "Value in Corporate Events" here and try the free trial. In this service we cover major earnings events, M&A, IPOs and other significant corporate events with actionable ideas. Furthermore, we provide coverage of situations and names on request!It has been nearly a decade since I covered shares of Westlake Corporation (NYSE: WLK ) when it acquired Axiall. That coverage has obviously become outdated but nonetheless remains interesting. Ev ...

Group 1: Company Overview - Westlake Corporation's share was trading at $89.58 as of September 11th, with trailing and forward P/E ratios of 69.52 and 37.59 respectively [1] - Westlake is the second-largest fully integrated global chlor-alkali producer, benefiting from structural advantages in ethylene feedstock access and energy efficiency in its production process [3] Group 2: Market Conditions - Commodity chemicals companies are facing challenging business conditions, with stock valuations near decade lows due to excess capacity in China and energy price distortions from the war in Ukraine [2] - Current market conditions have depressed Westlake's margins, but limited capacity additions in the U.S., closures in Europe, and restrained Chinese expansion support a favorable mid-cycle outlook [3] Group 3: Investment Thesis - Westlake's acquisition of Boral North America building products assets enhances its Housing & Infrastructure Products segment, complementing its PVC operations [4] - Valuation analysis suggests a share value around $110 based on mid-cycle EBITDA of $2.7 billion, NOPAT of $1.3 billion, and EPS of $9.22, indicating significant upside potential from current levels [4] - The company presents a compelling cyclical investment opportunity, with catalysts including sector recovery, higher utilization, and structural capacity advantages [4]

Core Insights - Westlake Corporation (WLK) reported a loss of $142 million or $1.11 per share for Q2 2025, a significant decline from a profit of $313 million or $2.40 per share in the same quarter last year [1] - Adjusted loss per share was 9 cents, missing the Zacks Consensus Estimate of earnings of 6 cents [1] Financial Performance - Sales decreased by approximately 7.9% year over year to $2,953 million, falling short of the Zacks Consensus Estimate of $3,039.3 million [2] - The decline in sales was attributed to lower sales volumes due to planned turnarounds, unplanned plant outages, and lower average sales prices [2] - The Performance and Essential Materials segment saw sales drop around 10.9% year over year to $1,793 million, with a loss from operations of $318 million compared to an income of $157 million in Q2 2024 [3] - The Housing and Infrastructure Products (HIP) segment generated sales of $1,160 million, down about 2.8% from the previous year, with income from operations decreasing by $44 million [4] Cash Flow and Financial Position - Operating activities generated $135 million in net cash during Q2 2025, while capital expenditures were $267 million, resulting in a free cash outflow of $132 million [5] - As of June 30, 2025, the company had approximately $2.09 billion in cash and cash equivalents, with total debt amounting to $4.65 billion [5] Future Outlook - Westlake anticipates operational improvements in the second half of 2025 as production at chlorovinyls facilities normalizes, despite challenges from weak global demand and high feedstock and energy costs [6] - The company is implementing cost-cutting measures aimed at saving $150-$175 million in 2025 and an additional $200 million by 2026 [6] - Planned facility closures and efficiency measures are expected to enhance profitability in 2026, supported by a broad product range and strong market position [6]

[PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) The company reported a **net loss of $131 million in Q2 2025**, a significant downturn from **$323 million net income in Q2 2024**, driven by lower sales and restructuring costs [Notes to Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail financial statement preparation, accounting pronouncements, and key line items, including **$123 million in Pernis facility closure costs** and ongoing antitrust lawsuits - In June 2025, the company approved a plan to close all remaining operations at its Pernis, Netherlands facility, recognizing **$123 million** in related costs during the quarter, with additional charges of approximately **$78 million** expected in future periods[71](index=71&type=chunk)[72](index=72&type=chunk) - The company is a defendant in multiple antitrust lawsuits concerning caustic soda, ethylene, and PVC pipe, alleging price-fixing and conspiracy, with the potential financial impact currently indeterminable[80](index=80&type=chunk)[81](index=81&type=chunk)[84](index=84&type=chunk) - The company may be subject to reasonably possible loss contingencies related to environmental matters in the range of **$100 million to $170 million**, in addition to amounts already reserved[96](index=96&type=chunk) Segment Income (Loss) from Operations (in millions) | Segment | Q2 2025 | Q2 2024 | 6 Months 2025 | 6 Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Performance and Essential Materials | $(318) | $157 | $(481) | $179 | | Housing and Infrastructure Products | $222 | $266 | $370 | $476 | Consolidated Statement of Operations Highlights (3 & 6 Months Ended June 30) | Metric | Q2 2025 (in millions) | Q2 2024 (in millions) | 6 Months 2025 (in millions) | 6 Months 2024 (in millions) | | :--- | :--- | :--- | :--- | :--- | | **Net Sales** | $2,953 | $3,207 | $5,799 | $6,182 | | **Gross Profit** | $258 | $664 | $490 | $1,130 | | **Income (Loss) from Operations** | $(109) | $406 | $(141) | $629 | | **Net Income (Loss)** | $(131) | $323 | $(166) | $508 | | **Diluted EPS** | $(1.11) | $2.40 | $(1.42) | $3.75 | Consolidated Balance Sheet Highlights | Metric | June 30, 2025 (in millions) | Dec 31, 2024 (in millions) | | :--- | :--- | :--- | | **Total Current Assets** | $5,946 | $6,214 | | **Total Assets** | $20,806 | $20,750 | | **Total Current Liabilities** | $2,403 | $2,219 | | **Long-Term Debt, net** | $4,654 | $4,556 | | **Total Liabilities** | $10,015 | $9,707 | | **Total Equity** | $10,791 | $11,043 | Consolidated Cash Flow Highlights (6 Months Ended June 30) | Metric | 2025 (in millions) | 2024 (in millions) | | :--- | :--- | :--- | | **Net Cash from Operating Activities** | $58 | $406 | | **Net Cash used for Investing Activities** | $(726) | $(495) | | **Net Cash used for Financing Activities** | $(197) | $(146) | | **Net Decrease in Cash** | $(835) | $(261) | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the **Q2 2025 net loss of $142 million** to lower sales, higher costs, and **$115 million in restructuring charges**, impacting segment operating incomes - The company's European and North American businesses have been negatively impacted by reduced demand and lower prices due to macroeconomic conditions, including the war in Ukraine, volatile energy prices, slower GDP growth, inflation, and higher interest rates since 2022[110](index=110&type=chunk) - In Q2 2025, the company recognized restructuring charges of **$115 million** related to the closure of its Pernis, Netherlands facility and the temporary cessation of operations of a PVC resin unit in Suzhou, China[135](index=135&type=chunk)[140](index=140&type=chunk) Key Financial Results Summary (Q2 2025 vs Q2 2024) | Metric | Q2 2025 (in millions) | Q2 2024 (in millions) | Change (in millions) | | :--- | :--- | :--- | :--- | | **Net Sales** | $2,953 | $3,207 | $(254) | | **Income (Loss) from Operations** | $(109) | $406 | $(515) | | **Net Income (Loss) Attributable to Westlake** | $(142) | $313 | $(455) | | **Diluted EPS** | $(1.11) | $2.40 | $(3.51) | - Cash flow from operations decreased by **$348 million to $58 million** for the first six months of 2025, compared to **$406 million** in the same period of 2024, primarily due to lower earnings and cash used for a major plant turnaround[161](index=161&type=chunk) [Results of Operations](index=32&type=section&id=Results%20of%20Operations) Q2 2025 net sales decreased **8% to $2.95 billion**, with gross profit margin compressing to **9%** due to lower prices, volumes, and higher costs, impacting segment operating incomes Net Sales Percentage Change from Prior-Year Period (Q2 2025) | Segment | Average Sales Price | Volume | | :--- | :--- | :--- | | Performance and Essential Materials | -2% | -9% | | Housing and Infrastructure Products | -1% | -2% | | **Company Average** | **-1%** | **-7%** | - The Performance and Essential Materials segment's operating income decreased by **$475 million YoY** to a loss of **$318 million** in Q2 2025, driven by lower PVC and polyethylene sales prices, higher costs, plant outages, and **$115 million** in restructuring charges[145](index=145&type=chunk) - The Housing and Infrastructure Products segment's operating income decreased by **$44 million YoY to $222 million** in Q2 2025, primarily due to lower sales prices for pipe and fittings and lower sales volumes for building products[147](index=147&type=chunk) [Liquidity and Capital Resources](index=38&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2025, liquidity included **$2.085 billion cash** and **$192 million securities**, with **$4.657 billion long-term debt** and a fully available **$1.5 billion credit facility** - As of June 30, 2025, the company had cash and cash equivalents of **$2,085 million** and available-for-sale securities of **$192 million**[168](index=168&type=chunk) - Total long-term debt carrying value was **$4,657 million** as of June 30, 2025, with the company in compliance with all debt covenants[169](index=169&type=chunk)[177](index=177&type=chunk) - The company has a **$1.5 billion** revolving credit facility, which had no borrowings and full availability as of June 30, 2025[49](index=49&type=chunk)[178](index=178&type=chunk) - Under its stock repurchase program, the company repurchased **$30 million** of common stock in the first six months of 2025, with approximately **$386 million** remaining available for future repurchases as of June 30, 2025[163](index=163&type=chunk)[202](index=202&type=chunk)[204](index=204&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=44&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company manages commodity price, interest rate, and foreign currency risks through feedstock flexibility, derivatives, and hedging for its **$4.7 billion fixed-rate debt** and **€700 million senior notes** - The company faces commodity price risk as many of its products and raw materials are commodities, mitigating this risk through strategies like feedstock flexibility and derivative instruments[191](index=191&type=chunk) - As of June 30, 2025, the company had **$4.72 billion** in fixed-rate debt and **$16 million** in variable-rate debt, exposing it to interest rate risk upon refinancing or rate changes[192](index=192&type=chunk) - To mitigate foreign currency risk, the company uses foreign exchange hedging contracts with a notional value of **€150 million** and has designated its **€700 million** senior notes as a net investment hedge for its euro-denominated subsidiaries[194](index=194&type=chunk)[195](index=195&type=chunk) [Controls and Procedures](index=45&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded disclosure controls were effective as of June 30, 2025, with no material changes to internal controls - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures are effective as of the end of the period covered by the report[196](index=196&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[197](index=197&type=chunk) [PART II. OTHER INFORMATION](index=45&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=45&type=section&id=Item%201.%20Legal%20Proceedings) The company updates legal proceedings, including enforcement negotiations with the West Virginia DEP for its Natrium facility, with a potential penalty exceeding **$1 million** - The company is in enforcement negotiations with the West Virginia Department of Environmental Protection regarding alleged violations at its Natrium facility, with a potential penalty exceeding **$1 million**[199](index=199&type=chunk) - For a comprehensive update on legal matters, including various antitrust and environmental cases, the report refers to Note 13 of the consolidated financial statements[198](index=198&type=chunk) [Risk Factors](index=45&type=section&id=Item%201A.%20Risk%20Factors) No new risk factors are disclosed in this report; investors are referred to the 2024 Form 10-K for a comprehensive discussion - The report directs investors to Item 1A, "Risk Factors" in the 2024 Form 10-K for a discussion of potential risks[200](index=200&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=46&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No shares were repurchased under the stock program in Q2 2025; **780 shares** were acquired for tax obligations, with **$386 million** remaining for future repurchases Common Stock Purchases (Q2 2025) | Period | Total Shares Purchased | Average Price Paid Per Share | Shares Purchased as Part of Program | Max. Value Remaining for Purchase | | :--- | :--- | :--- | :--- | :--- | | April 2025 | 400 | $92.64 | 0 | $386,178,956 | | May 2025 | 0 | N/A | 0 | $386,178,956 | | June 2025 | 380 | $75.78 | 0 | $386,178,956 | | **Total** | **780** | **$84.42** | **0** | | - No shares were repurchased under the company's **$500 million** stock repurchase program expansion during the three months ended June 30, 2025[204](index=204&type=chunk) [Other Information](index=46&type=section&id=Item%205.%20Other%20Information) No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during the second quarter of 2025 - No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during the second quarter of 2025[203](index=203&type=chunk) [Exhibits](index=47&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including CEO and CFO certifications and XBRL data - The report includes required certifications from the CEO and CFO as exhibits[205](index=205&type=chunk)

Financial Data and Key Metrics Changes - For Q2 2025, the company reported EBITDA of $350 million on net sales of $3 billion, with a net loss of $12 million or $0.09 per share [10][15] - Compared to Q2 2024, net income decreased by $325 million due to higher North American feedstock and energy costs and lower average sales prices across segments [15][19] - The company achieved over $75 million in cost reductions towards a full-year target of $150 million to $175 million [14][20] Business Line Data and Key Metrics Changes - The Housing and Infrastructure Products (HIP) segment delivered EBITDA of $275 million on sales of $1.2 billion, representing a 24% EBITDA margin, with a 16% increase in sales driven by pipe and fittings demand [10][17] - The Performance and Essential Materials (PEM) segment saw sales of $1.8 billion, down $57 million from Q1 2025, with EBITDA of $52 million, significantly lower than the previous year due to production disruptions and higher costs [18][19] - The HIP segment's sales volume growth was supported by municipal water applications, while the PEM segment faced challenges from global oversupply and production outages [11][12] Market Data and Key Metrics Changes - The company noted a significant underspending on water infrastructure in the U.S., which is expected to support pipe and fitting sales for years to come [11] - The demand for PEM materials is stabilizing, albeit at lower levels than desired, with global manufacturing activity remaining soft [25] - The municipal water applications market is expected to grow at a rate of 5% to 7% over time, driven by infrastructure investments [99] Company Strategy and Development Direction - The company is implementing a three-pronged profitability improvement strategy for PEM, focusing on improving plant reliability, reducing costs, and optimizing the manufacturing footprint [13][25] - The long-term outlook for the HIP business remains positive, with expectations of organic growth at a compound annual growth rate of 5% to 7% [24] - The company continues to evaluate acquisition opportunities to broaden its product portfolio and deepen customer relationships [24] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging operating environment due to elevated interest rates and slower North American construction activity but emphasized the stability and resilience of the HIP segment [10][23] - The company expects production sales volumes to improve in Q3 2025, with a reduction in the impact of production disruptions compared to Q2 [21][22] - Management remains optimistic about the long-term demand for housing and infrastructure products, driven by demographic trends and undersupply [23][24] Other Important Information - The company announced the planned closure of its epoxy site in Pernice, The Netherlands, which is expected to lead to profitability in 2026 [19][20] - As of June 30, 2025, the company had cash and investments of $2.3 billion and total debt of $4.7 billion [20] Q&A Session Summary Question: Guidance on HIP margins and pricing headwinds - Management indicated that margins are expected to remain in the range of 20% to 22%, reflecting the realities of the residential building and construction markets [30][31] Question: Impact of tariffs on exports - Management noted that there has been no significant impact from tariffs on exports to Brazil, as customers have access to duty drawbacks [32][33] Question: Planned turnarounds and their impact - The majority of the $110 million impact from production disruptions was due to planned turnarounds, with no major turnarounds expected in the second half of 2025 [42][43] Question: Cost improvement initiatives - The additional $200 million in cost improvements will be across the entire PEM footprint, not solely focused on the Pernice site [44][45] Question: M&A opportunities - The company is open to M&A opportunities in both HIP and PEM segments, driven by valuation opportunities [48][49] Question: Plant reliability improvements - Management expects ongoing improvements in plant reliability, with no significant additional capital outlay required [53][54] Question: Pricing outlook for polyethylene and PVC - Pricing for polyethylene has not yet settled for July, with announcements for price increases in August [77][82]

Financial Data and Key Metrics Changes - For Q2 2025, the company reported EBITDA of $350 million on net sales of $3 billion, with a net loss of $12 million or $0.09 per share [8][14] - Compared to Q2 2024, net income decreased by $325 million due to higher North American feedstock and energy costs, and lower average sales prices across segments [14][19] - The company achieved over $75 million in cost reductions towards a full-year target of $150 million to $175 million [13][21] Business Line Data and Key Metrics Changes - The Housing and Infrastructure Products (HIP) segment delivered EBITDA of $275 million on sales of $1.2 billion, with a 24% EBITDA margin, driven by a 14% increase in sales volumes [8][17] - The Performance and Essential Materials (PEM) segment saw sales of $1.8 billion, down $57 million from Q1 2025, with EBITDA of $52 million, significantly impacted by planned turnarounds and unplanned outages [19][18] - The HIP segment's sales volume growth was supported by increasing demand for municipal water applications, while the Building Products business faced a slowdown due to reduced residential construction activity [10][17] Market Data and Key Metrics Changes - The company noted a significant underspending on water infrastructure in the U.S., which is expected to support pipe and fitting sales for years to come [10] - The global manufacturing activity has been soft, leading to a cumulative impact on PEM sales volumes and pricing [11][25] - The company anticipates stable demand for PEM materials, with improved production rates expected to lead to increased sales volumes compared to Q2 2025 [25] Company Strategy and Development Direction - The company is implementing a three-pronged profitability improvement strategy for PEM, focusing on improving plant reliability, reducing costs, and optimizing the manufacturing footprint [12][25] - The HIP segment strategy emphasizes providing products that address affordability and adapting offerings as market conditions evolve [17][22] - The company remains positive about the long-term growth outlook for HIP, expecting a 5% to 7% compound annual growth rate driven by market recovery and strategic acquisitions [24][22] Management Comments on Operating Environment and Future Outlook - Management acknowledged the challenging operating environment due to elevated interest rates and soft macroeconomic conditions but highlighted the resilience of the HIP segment [8][22] - The company expects the impact of production disruptions to lessen in Q3 2025, with improved sales volumes anticipated [21][25] - Management emphasized the foundational strengths of the company, including a diversified portfolio and a strong balance sheet, to create long-term value for shareholders [26] Other Important Information - The company announced the planned closure of its epoxy site in Pernice, The Netherlands, which is expected to lead to profitability in 2026 [19][20] - As of June 30, 2025, the company had cash and investments of $2.3 billion and total debt of $4.7 billion [20] Q&A Session Summary Question: Guidance on HIP margins and pricing pressures - Management indicated that margins are expected to remain in the 20% to 22% range despite lower sales guidance, reflecting the realities of the residential building market [30][32] Question: Impact of tariffs on exports - Management noted that current tariffs have not significantly impacted exports to Brazil, as customers can access duty drawbacks [34] Question: Performance in HIP and pricing pressures - Management highlighted the strength in the water business and the ability to adapt to market conditions, maintaining stable margins despite pricing pressures [38][39] Question: Planned turnarounds and cost savings - The majority of the $110 million impact from outages was due to planned turnarounds, with no major turnarounds expected in the second half of 2025 [44][45] Question: M&A opportunities in PEM - Management stated that they are open to M&A opportunities across both HIP and PEM segments, driven by valuation opportunities [50] Question: Plant reliability improvements - Management confirmed that improvements in plant reliability have been observed since late April, with expectations for continued progress in Q3 [66][67] Question: Chlor alkali supply outlook - Management expressed confidence in market stability and anticipated demand growth by the end of the decade [112]

Financial Performance - Westlake Corporation's net sales for 2Q 2025 were $3 billion[5], with EBITDA of $340 million[5] - The company holds $2.3 billion in cash, equivalents, and investments[5] - Sales increased by 4% QoQ but decreased by 8% YoY[7] - EBITDA increased by 18% QoQ but decreased by 54% YoY[7] Segment Performance - Housing and Infrastructure Products (HIP) sales were $1.16 billion in 2Q 2025[11], a 16% increase QoQ[11] but a 3% decrease YoY[11], with EBITDA of $275 million[7], a 35% increase QoQ[7] but an 18% decrease YoY[7] - Performance and Essential Materials (PEM) sales were $1.793 billion in 2Q 2025[22], a 3% decrease QoQ[22] and an 11% decrease YoY[22], with EBITDA of $52 million[7], a 29% decrease QoQ[7] and an 87% decrease YoY[7] Strategic Initiatives - The company achieved over $75 million in cost savings in 1H 2025 towards a 2025 target of $150 - $175 million[6] - Westlake is taking action to generate an additional $200 million of cost savings by 2026 as part of its PEM profitability improvement strategy[6] - The closure of the Pernis facility is expected to significantly improve PEM segment profitability by removing ~$100 million in annual losses[6]

Financial Performance - For the quarter ended June 2025, Westlake Chemical reported revenue of $2.95 billion, down 7.9% year-over-year, and EPS of -$0.09 compared to $2.40 in the same quarter last year [1] - The reported revenue was below the Zacks Consensus Estimate of $3.04 billion, resulting in a surprise of -2.84%, while the EPS surprise was -250% against a consensus estimate of $0.06 [1] Key Metrics - Net external sales for Performance and Essential Materials were $1.79 billion, below the five-analyst average estimate of $1.84 billion, reflecting a year-over-year decline of -10.9% [4] - Net external sales for Housing and Infrastructure Products were $1.16 billion, slightly below the estimated $1.2 billion, marking a -2.9% change year-over-year [4] - Performance Materials within Performance and Essential Materials reported net external sales of $1.02 billion, compared to the average estimate of $1.05 billion, representing a -13.2% year-over-year change [4] - Essential Materials within Performance and Essential Materials had net external sales of $771 million, slightly below the average estimate of $782.96 million, indicating a -7.8% year-over-year change [4] - EBITDA for Housing and Infrastructure Products was $203 million, compared to the average estimate of $264.6 million [4] - EBITDA for Performance and Essential Materials was $73 million, significantly lower than the estimated $167.07 million [4] Stock Performance - Westlake shares have returned -3.1% over the past month, contrasting with the Zacks S&P 500 composite's +1% change, and the stock currently holds a Zacks Rank 5 (Strong Sell), suggesting potential underperformance in the near term [3]

Westlake Chemical (WLK) came out with a quarterly loss of $0.09 per share versus the Zacks Consensus Estimate of $0.06. This compares to earnings of $2.4 per share a year ago. These figures are adjusted for non- recurring items. This quarterly report represents an earnings surprise of -250.00%. A quarter ago, it was expected that this chemical company would post earnings of $0.7 per share when it actually produced a loss of $0.31, delivering a surprise of -144.29%. Over the last four quarters, the company h ...

[Executive Summary & Financial Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Financial%20Highlights) Westlake Corporation reported a net loss of $142 million for Q2 2025, or $1.11 per diluted share, on net sales of $2,953 million. Excluding Identified Items, the net loss was $12 million, or $0.09 per share, with EBITDA of $340 million. The Housing and Infrastructure Products (HIP) segment showed stronger performance compared to the Performance and Essential Materials (PEM) segment [Summary Financial Highlights](index=1&type=section&id=Summary%20Financial%20Highlights) Westlake Corporation reported a net loss of $142 million for Q2 2025, or $1.11 per diluted share, on net sales of $2,953 million. Excluding Identified Items, the net loss was $12 million, or $0.09 per share, with EBITDA of $340 million. The Housing and Infrastructure Products (HIP) segment showed stronger performance compared to the Performance and Essential Materials (PEM) segment Westlake Corporation Financial Summary (Millions of US Dollars, except per share data) | | Three Months Ended June 30, 2025 | Three Months Ended March 31, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | | **Westlake Corporation** | | | | | Net sales | $2,953 | $2,846 | $3,207 | | Income (loss) from operations | $(109) | $(32) | $406 | | Net income (loss) attributable to Westlake Corporation | $(142) | $(40) | $313 | | Diluted earnings (loss) per common share | $(1.11) | $(0.31) | $2.40 | | Identified Items | $130 | — | — | | Net income (loss) attributable to Westlake Corporation excl. Identified Items | $(12) | $(40) | $313 | | Diluted earnings (loss) per common share excl. Identified Items | $(0.09) | $(0.31) | $2.40 | | EBITDA | $210 | $288 | $744 | | EBITDA excl. Identified Items | $340 | $288 | $744 | | EBITDA margin | 12% | 10% | 23% | | **Housing and Infrastructure Products ("HIP") Segment** | | | | | Net sales | $1,160 | $996 | $1,194 | | Income from operations | $222 | $148 | $266 | | EBITDA | $275 | $203 | $336 | | EBITDA margin | 24% | 20% | 28% | | **Performance and Essential Materials ("PEM") Segment** | | | | | Net sales | $1,793 | $1,850 | $2,013 | | Income (loss) from operations | $(318) | $(163) | $157 | | EBITDA | $(78) | $73 | $391 | | Identified Items | $130 | — | — | | EBITDA excl. Identified Items | $52 | $73 | $391 | | EBITDA margin | 3% | 4% | 19% | [Business Highlights](index=2&type=section&id=Business%20Highlights) In Q2 2025, Westlake reported a net loss of $142 million and EBITDA of $210 million, significantly impacted by $130 million in 'Identified Items' related to facility closures and temporary cessations. Excluding these items, the net loss was $12 million and EBITDA was $340 million. Sequentially, EBITDA (excl. Identified Items) increased due to higher HIP sales volume, though year-over-year, it decreased due to lower PEM sales volume, higher costs, and lower average sales prices - Q2 2025 Net Sales: **$3.0 billion**[5](index=5&type=chunk) - Q2 2025 Net Loss: **$142 million**, or **$1.11 per share**. Excluding Identified Items, net loss was **$12 million**, or **$0.09 per share**[5](index=5&type=chunk) - Q2 2025 EBITDA: **$210 million**. Excluding Identified Items, EBITDA was **$340 million**[5](index=5&type=chunk) - Identified Items impact: **$130 million** from the closure of the Pernis Epoxy facility and temporary cessation of a PVC resin unit at Huasu joint venture[5](index=5&type=chunk) - Sequential EBITDA (excl. Identified Items) increased by **$52 million** from Q1 2025, driven by seasonally higher HIP sales volume, partially offset by a **$30 million** impact from PEM turnarounds and outages[6](index=6&type=chunk) - Q2 2025 sales volume increased **1%** and average sales price increased **2%** compared to Q1 2025[7](index=7&type=chunk) - HIP sales increased **16%** sequentially (**14%** volume growth, **2%** average sales price increase)[7](index=7&type=chunk) - PEM sales decreased **3%** sequentially (higher average sales price offset by **6%** volume decline)[7](index=7&type=chunk) - Year-over-year EBITDA (excl. Identified Items) decreased from **$744 million** (Q2 2024) to **$340 million** (Q2 2025), primarily due to lower PEM sales volume (impacted by **$110 million** from turnarounds/outages), higher North American feedstock/energy costs, lower average sales prices in both segments, and a **2%** decline in HIP sales volume[8](index=8&type=chunk) [Executive Commentary](index=2&type=section&id=Executive%20Commentary) CEO Jean-Marc Gilson highlighted that Q2 2025 performance was affected by transitory headwinds. The HIP segment showed resilience despite a challenging residential construction market, while the PEM segment faced soft global demand, tariff uncertainty, and production disruptions. The company is focused on operational improvements, cost reductions targeting an additional $200 million by 2026, and expects the Pernis closure to significantly improve profitability in 2026 - Overall financial performance in Q2 2025 reflected several headwinds, many believed to be transitory[9](index=9&type=chunk) - HIP segment delivered solid results despite lower North American residential construction activity, with sales similar to the prior year period[9](index=9&type=chunk) - PEM sales volume was impacted by continued soft global industrial and manufacturing activity, exacerbated by temporary disruptions to export sales volumes due to tariff uncertainty[10](index=10&type=chunk) - PEM earnings were also impacted by production disruptions from the tie-in of new VCM capacity at the Geismar, Louisiana, chlorovinyls site[10](index=10&type=chunk) - Focus for H2 2025: running plants well and reducing controllable costs. Chlorovinyls production is returning to normal rates during Q3[11](index=11&type=chunk) - Cost reduction efforts: Eliminated over **$75 million** in H1 2025 towards a 2025 target of **$150-$175 million**. Expanding scope to target an additional **$200 million** of cost reductions by 2026[11](index=11&type=chunk) - Planned closure of the Pernis Epoxy facility announced in Q2 2025 to put the global Epoxy business on a path to profitability, expected to significantly improve profitability in 2026[11](index=11&type=chunk) [Detailed Financial Results](index=3&type=section&id=Detailed%20Financial%20Results) For Q2 2025, Westlake reported a net loss of $12 million (excluding Identified Items) on $3.0 billion net sales, an improvement from Q1 2025's $40 million net loss. This sequential improvement was driven by higher HIP sales volume and margins, offsetting lower PEM sales volume. Year-over-year, the net loss was $325 million lower than Q2 2024, primarily due to reduced PEM sales volume, elevated turnarounds/outages, and higher feedstock/energy costs [Consolidated Results](index=3&type=section&id=Consolidated%20Results) For Q2 2025, Westlake reported a net loss of $12 million (excluding Identified Items) on $3.0 billion net sales, an improvement from Q1 2025's $40 million net loss. This sequential improvement was driven by higher HIP sales volume and margins, offsetting lower PEM sales volume. Year-over-year, the net loss was $325 million lower than Q2 2024, primarily due to reduced PEM sales volume, elevated turnarounds/outages, and higher feedstock/energy costs - Q2 2025 net loss (excl. Identified Items): **$12 million**, or **$0.09 per share**, on net sales of **$3.0 billion**[13](index=13&type=chunk) - Sequential improvement from Q1 2025 net loss of **$40 million**, benefiting from higher sales volume and margins in the HIP segment, offsetting lower sales volume in the PEM segment[13](index=13&type=chunk) - Q2 2025 net loss (excl. Identified Items) was **$325 million** below Q2 2024, primarily due to lower sales volume in the PEM segment (elevated planned turnarounds and unplanned outages) and higher feedstock and energy costs[14](index=14&type=chunk) - EBITDA (excl. Identified Items) of **$340 million** for Q2 2025 increased by **$52 million** compared to Q1 2025, driven by higher sales volume and margins in the HIP segment, partially offset by a **$30 million** higher impact from planned turnarounds and unplanned outages in the PEM segment[15](index=15&type=chunk) [Identified Items](index=3&type=section&id=Identified%20Items) During Q2 2025, Westlake accrued $108 million in expenses and a $15 million inventory write-off related to the permanent shutdown of its Pernis facility. Additionally, $7 million in expenses were accrued for the temporary cessation of a PVC resin production unit at the Huasu joint venture in China. These items collectively represent the 'Identified Items' impacting Q2 results - Accrued expenses for Pernis facility shutdown: **$108 million**[17](index=17&type=chunk) - Inventory write-off related to Pernis facility shutdown: **$15 million**[17](index=17&type=chunk) - Accrued expenses for temporary cessation of Huasu PVC resin production unit: **$7 million**[17](index=17&type=chunk) - Total 'Identified Items' impact: **$130 million**[5](index=5&type=chunk)[12](index=12&type=chunk)[17](index=17&type=chunk) - Cash outflows related to the Pernis closure are expected to occur over several years[17](index=17&type=chunk) [Cash, Investments and Debt](index=3&type=section&id=Cash,%20Investments%20and%20Debt) As of June 30, 2025, Westlake reported $135 million in net cash provided by operating activities for Q2 2025, with capital expenditures totaling $267 million. The company maintained a strong liquidity position with $2.3 billion in cash, cash equivalents, and fixed-income investments, against a total debt of $4.7 billion - Net cash provided by operating activities (Q2 2025): **$135 million**[18](index=18&type=chunk) - Capital expenditures (Q2 2025): **$267 million**[18](index=18&type=chunk) - Cash, cash equivalents and fixed-income investments (as of June 30, 2025): **$2.3 billion**[18](index=18&type=chunk) - Total debt (as of June 30, 2025): **$4.7 billion**[18](index=18&type=chunk) [Segment Performance](index=3&type=section&id=Segment%20Performance) Westlake's segments showed divergent performance in Q2 2025. The Housing and Infrastructure Products (HIP) segment saw improved sequential income from operations due to seasonal demand, though it declined year-over-year. Conversely, the Performance and Essential Materials (PEM) segment experienced a significant increase in operating loss both sequentially and year-over-year, driven by weak global demand, tariff uncertainty, and production disruptions [Housing and Infrastructure Products (HIP) Segment](index=3&type=section&id=Housing%20and%20Infrastructure%20Products%20(HIP)%20Segment) For Q2 2025, the HIP segment's income from operations increased by $74 million sequentially to $222 million, primarily due to seasonally higher sales volume in Pipe & Fittings and Building Products. However, compared to Q2 2024, income from operations decreased by $44 million, attributed to lower sales volume, average sales price, and margins, particularly in Pipe & Fittings - Q2 2025 Income from operations: **$222 million**[19](index=19&type=chunk) - Sequential increase in income from operations: **$74 million** compared to Q1 2025, driven by seasonally higher sales volume in Pipe & Fittings and Building Products[19](index=19&type=chunk) - Year-over-year decrease in income from operations: **$44 million** compared to Q2 2024, due to lower sales volume, average sales price, and margins, particularly in Pipe & Fittings[20](index=20&type=chunk) HIP Segment Sales Price and Volume Variance | Metric | Q2 2025 vs. Q2 2024 | Q2 2025 vs. Q1 2025 | | :--- | :--- | :--- | | Average Sales Price | -1 % | +2 % | | Volume | -2 % | +14 % | [Performance and Essential Materials (PEM) Segment](index=3&type=section&id=Performance%20and%20Essential%20Materials%20(PEM)%20Segment) The PEM segment reported a loss from operations of $188 million (excluding Identified Items) for Q2 2025, an increase of $25 million from Q1 2025. This was primarily due to a 6% decline in sales volume from weaker global demand, tariff uncertainty, and lower production levels (chlorine, caustic soda, PVC resin) due to planned turnarounds and unplanned outages. Year-over-year, the segment's operating results significantly deteriorated from an income of $157 million in Q2 2024, driven by a 9% sales volume decline, higher North American feedstock/energy costs, and a 2% lower average sales price - Q2 2025 Loss from operations (excl. Identified Items): **$188 million**[21](index=21&type=chunk) - Sequential increase in loss from operations: **$25 million** compared to Q1 2025[21](index=21&type=chunk) - Drivers of sequential loss increase: **6%** decline in sales volume (weaker global demand, tariff uncertainty) and lower production levels (chlorine, caustic soda, PVC resin) due to planned turnarounds and unplanned outages[21](index=21&type=chunk) - Year-over-year change: Loss from operations of **$188 million** in Q2 2025 compared to income from operations of **$157 million** in Q2 2024[22](index=22&type=chunk) - Drivers of year-over-year decline: **9%** decline in sales volume (elevated planned turnarounds and unplanned outages), higher North American feedstock and energy costs, and **2%** lower average sales price[22](index=22&type=chunk) PEM Segment Sales Price and Volume Variance | Metric | Q2 2025 vs. Q2 2024 | Q2 2025 vs. Q1 2025 | | :--- | :--- | :--- | | Average Sales Price | -2 % | +2 % | | Volume | -9 % | -6 % | [Forward-Looking Information & Non-GAAP Measures](index=4&type=section&id=Forward-Looking%20Information%20%26%20Non-GAAP%20Measures) This section outlines Westlake's forward-looking statements, which are subject to various risks and uncertainties, and explains the use of non-GAAP financial measures to provide supplemental insights into business performance [Forward-Looking Statements](index=4&type=section&id=Forward-Looking%20Statements) This release includes forward-looking statements concerning Westlake's business outlook, global macroeconomic conditions, operational reliability, cost reduction efforts, and future profitability. These statements are inherently subject to significant risks and uncertainties, including general economic conditions, raw material and energy volatility, geopolitical conflicts, regulatory actions, and competitive pressures, as detailed in the company's annual Form 10-K - Statements regarding business outlook, global macroeconomic conditions, operational reliability, cost reduction efforts, and future profitability are forward-looking[23](index=23&type=chunk) - These statements are subject to significant risks and uncertainties, including general economic and business conditions, cyclical nature of industries, raw material and energy availability/cost, geopolitical tensions, regulatory actions, competitive pressures, and technological developments[24](index=24&type=chunk) - For more detailed information on risk factors, refer to Westlake's Annual Report on Form 10-K for the year ended December 31, 2024[24](index=24&type=chunk) [Use of Non-GAAP Financial Measures](index=4&type=section&id=Use%20of%20Non-GAAP%20Financial%20Measures) Westlake utilizes non-GAAP financial measures such as EBITDA, free cash flow, and metrics excluding 'Identified Items' to offer investors supplemental information on underlying business trends and performance. These measures are presented as a complement to, not a replacement for, U.S. GAAP financial results, and detailed reconciliations are provided in the financial schedules - Non-GAAP financial measures (EBITDA, free cash flow, and measures excluding Identified Items) provide useful supplemental information regarding underlying business trends and performance[25](index=25&type=chunk) - These measures are not intended as a substitute for or superior to financial measures prepared in accordance with U.S. GAAP[25](index=25&type=chunk) - Reconciliations of non-GAAP measures to the most directly comparable U.S. GAAP measures are available in the financial schedules[25](index=25&type=chunk) [Company Information & Conference Call](index=5&type=section&id=Company%20Information%20%26%20Conference%20Call) This section provides an overview of Westlake Corporation's global operations and details for its Q2 2025 earnings conference call [About Westlake](index=5&type=section&id=About%20Westlake) Westlake Corporation is a global manufacturer and supplier of materials and innovative products, headquartered in Houston with operations across Asia, Europe, and North America. The company provides essential building blocks for solutions in diverse sectors including housing, construction, packaging, healthcare, automotive, and consumer goods - Westlake is a global manufacturer and supplier of materials and innovative products[26](index=26&type=chunk) - Headquartered in Houston, with operations in Asia, Europe, and North America[26](index=26&type=chunk) - Provides building blocks for vital solutions in housing, construction, packaging, healthcare, automotive, and consumer goods[26](index=26&type=chunk) [Westlake Corporation Conference Call Information](index=5&type=section&id=Westlake%20Corporation%20Conference%20Call%20Information) Westlake Corporation will host a conference call on Tuesday, August 5, 2025, at 11:00 AM Eastern Time to discuss its Q2 2025 results. Participants must pre-register to receive access details. A webcast replay of the call will be available two hours after its conclusion - Conference call to discuss Q2 2025 results: Tuesday, August 5, 2025, at **11:00 AM Eastern Time**[27](index=27&type=chunk) - Pre-registration is required to access the conference call[27](index=27&type=chunk) - A replay of the conference call will be available via webcast two hours after its conclusion[28](index=28&type=chunk) [Financial Statements](index=6&type=section&id=Financial%20Statements) This section presents Westlake's consolidated statements of operations, balance sheets, and cash flows for the reported periods [Consolidated Statements of Operations](index=6&type=section&id=Consolidated%20Statements%20of%20Operations) The Consolidated Statements of Operations present Westlake's financial performance for the three and six months ended June 30, 2025, and 2024. For Q2 2025, the company reported net sales of $2,953 million and a net loss attributable to Westlake Corporation of $142 million, or $(1.11) diluted earnings per common share Consolidated Statements of Operations (Millions of US Dollars, except per share data) | | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net sales | $2,953 | $3,207 | $5,799 | $6,182 | | Cost of sales | 2,695 | 2,543 | 5,309 | 5,052 | | Gross profit | 258 | 664 | 490 | 1,130 | | Selling, general and administrative expenses | 221 | 224 | 448 | 433 | | Amortization of intangibles | 31 | 30 | 61 | 60 | | Restructuring, transaction and integration-related costs | 115 | 4 | 122 | 8 | | Income (loss) from operations | (109) | 406 | (141) | 629 | | Interest expense | (40) | (41) | (79) | (81) | | Other income, net | 24 | 59 | 61 | 109 | | Income (loss) before income taxes | (125) | 424 | (159) | 657 | | Provision for income taxes | 6 | 101 | 7 | 149 | | Net income (loss) | (131) | 323 | (166) | 508 | | Net income attributable to noncontrolling interests | 11 | 10 | 16 | 21 | | Net income (loss) attributable to Westlake Corporation | $(142) | $313 | $(182) | $487 | | Earnings (loss) per common share attributable to Westlake Corporation: | | | | | | Basic | $(1.11) | $2.42 | $(1.42) | $3.77 | | Diluted | $(1.11) | $2.40 | $(1.42) | $3.75 | | Weighted average common shares outstanding: | | | | | | Basic | 128,238,514 | 128,576,735 | 128,273,332 | 128,468,359 | | Diluted | 128,238,514 | 129,350,720 | 128,273,332 | 129,185,545 | [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The Condensed Consolidated Balance Sheets provide a summary of Westlake's financial position as of June 30, 2025, and December 31, 2024. As of June 30, 2025, total assets stood at $20,806 million, with total liabilities of $10,015 million and total equity of $10,791 million Condensed Consolidated Balance Sheets (Millions of US Dollars) | | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **ASSETS** | | | | Current assets | | | | Cash and cash equivalents | $2,085 | $2,919 | | Available-for-sale securities | 192 | — | | Accounts receivable, net | 1,832 | 1,483 | | Inventories | 1,731 | 1,697 | | Prepaid expenses and other current assets | 106 | 115 | | Total current assets | 5,946 | 6,214 | | Property, plant and equipment, net | 8,827 | 8,633 | | Other assets, net | 6,033 | 5,903 | | Total assets | $20,806 | $20,750 | | **LIABILITIES AND EQUITY** | | | | Current liabilities (accounts payable and accrued and other liabilities) | $2,403 | $2,219 | | Long-term debt, net | 4,654 | 4,556 | | Other liabilities | 2,958 | 2,932 | | Total liabilities | 10,015 | 9,707 | | Total Westlake Corporation stockholders' equity | 10,278 | 10,527 | | Noncontrolling interests | 513 | 516 | | Total equity | 10,791 | 11,043 | | Total liabilities and equity | $20,806 | $20,750 | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) The Condensed Consolidated Statements of Cash Flows detail the cash movements for the six months ended June 30, 2025, and 2024. For the first half of 2025, net cash provided by operating activities was $58 million, while net cash used for investing activities was $726 million and net cash used for financing activities was $197 million, resulting in a net decrease in cash of $835 million Condensed Consolidated Statements of Cash Flows (Millions of US Dollars) | | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | **Cash flows from operating activities** | | | | Net income (loss) | $(166) | $508 | | Adjustments to reconcile net income to net cash provided by operating activities | | | | Depreciation and amortization | 578 | 552 | | Deferred income taxes | (19) | (58) | | Net loss on disposition and others | 55 | 24 | | Other balance sheet changes | (390) | (620) | | Net cash provided by operating activities | 58 | 406 | | **Cash flows from investing activities** | | | | Additions to investments in unconsolidated subsidiaries | (22) | (1) | | Additions to property, plant and equipment | (515) | (503) | | Purchase of available-for-sale securities | (192) | — | | Other, net | 3 | 9 | | Net cash used for investing activities | (726) | (495) | | **Cash flows from financing activities** | | | | Distributions to noncontrolling interests | (23) | (21) | | Dividends paid | (136) | (130) | | Repurchase of common stock for treasury | (30) | — | | Other, net | (8) | 5 | | Net cash used for financing activities | (197) | (146) | | Effect of exchange rate changes on cash, cash equivalents and restricted cash | 30 | (26) | | Net decrease in cash, cash equivalents and restricted cash | (835) | (261) | | Cash, cash equivalents and restricted cash at beginning of period | 2,935 | 3,319 | | Cash, cash equivalents and restricted cash at end of period | $2,100 | $3,058 | [Segment Information](index=9&type=section&id=Segment%20Information) This section provides a detailed breakdown of Westlake's net external sales, income (loss) from operations, depreciation, amortization, and other income by its HIP and PEM segments [Segment Net External Sales](index=9&type=section&id=Segment%20Net%20External%20Sales) This section details the net external sales for Westlake's two reportable segments: Housing and Infrastructure Products (HIP) and Performance and Essential Materials (PEM), for the three and six months ended June 30, 2025, and 2024. Total consolidated net external sales for Q2 2025 were $2,953 million Segment Net External Sales (Millions of US Dollars) | | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | **Housing and Infrastructure Products** | | | | | | Housing Products | $980 | $1,010 | $1,818 | $1,889 | | Infrastructure Products | 180 | 184 | 338 | 349 | | Total Housing and Infrastructure Products | 1,160 | 1,194 | 2,156 | 2,238 | | **Performance and Essential Materials** | | | | | | Performance Materials | 1,022 | 1,177 | 2,078 | 2,341 | | Essential Materials | 771 | 836 | 1,565 | 1,603 | | Total Performance and Essential Materials | 1,793 | 2,013 | 3,643 | 3,944 | | Total reportable segments and consolidated | $2,953 | $3,207 | $5,799 | $6,182 | [Segment Income (Loss) from Operations](index=9&type=section&id=Segment%20Income%20(Loss)%20from%20Operations) This section outlines the income (loss) from operations for the HIP and PEM segments, along with corporate and consolidated figures, for the three and six months ended June 30, 2025, and 2024. In Q2 2025, HIP reported an income of $222 million, while PEM recorded a loss of $318 million Segment Income (Loss) from Operations (Millions of US Dollars) | | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | **Income (loss) from operations** | | | | | | Housing and Infrastructure Products | $222 | $266 | $370 | $476 | | Performance and Essential Materials | (318) | 157 | (481) | 179 | | Total reportable segments | (96) | 423 | (111) | 655 | | Corporate and other | (13) | (17) | (30) | (26) | | Consolidated | $(109) | $406 | $(141) | $629 | [Segment Depreciation and Amortization](index=9&type=section&id=Segment%20Depreciation%20and%20Amortization) This section presents the depreciation and amortization expenses for the HIP and PEM segments, corporate, and consolidated totals for the three and six months ended June 30, 2025, and 2024. Consolidated depreciation and amortization for Q2 2025 amounted to $295 million Segment Depreciation and Amortization (Millions of US Dollars) | | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | **Depreciation and amortization** | | | | | | Housing and Infrastructure Products | $55 | $53 | $108 | $103 | | Performance and Essential Materials | 236 | 224 | 463 | 444 | | Total reportable segments | 291 | 277 | 571 | 547 | | Corporate and other | 4 | 2 | 7 | 5 | | Consolidated | $295 | $279 | $578 | $552 | [Segment Other Income, Net](index=9&type=section&id=Segment%20Other%20Income,%20Net) This section provides a breakdown of other income, net, for the HIP and PEM segments, corporate, and consolidated totals for the three and six months ended June 30, 2025, and 2024. Consolidated other income, net, for Q2 2025 was $24 million Segment Other Income, Net (Millions of US Dollars) | | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | **Other income, net** | | | | | | Housing and Infrastructure Products | $(2) | $17 | $— | $21 | | Performance and Essential Materials | 4 | 10 | 13 | 21 | | Total reportable segments | 2 | 27 | 13 | 42 | | Corporate and other | 22 | 32 | 48 | 67 | | Consolidated | $24 | $59 | $61 | $109 | [Reconciliations of Non-GAAP Measures](index=10&type=section&id=Reconciliations%20of%20Non-GAAP%20Measures) This section provides detailed reconciliations of Westlake's non-GAAP financial measures, including EBITDA, diluted EPS, and free cash flow, to their most directly comparable U.S. GAAP equivalents [Reconciliation of EBITDA to Net Income (Loss), Income (Loss) from Operations and Net Cash Provided by (Used for) Operating Activities](index=10&type=section&id=Reconciliation%20of%20EBITDA%20to%20Net%20Income%20(Loss),%20Income%20(Loss)%20from%20Operations%20and%20Net%20Cash%20Provided%20by%20(Used%20for)%20Operating%20Activities) This reconciliation provides a detailed breakdown of EBITDA to net income (loss), income (loss) from operations, and net cash provided by operating activities, both including and excluding 'Identified Items,' for the three and six months ended June 30, 2025, and March 31, 2025, and June 30, 2024. For Q2 2025, reported EBITDA was $210 million, while EBITDA excluding Identified Items was $340 million Reconciliation of EBITDA (Millions of US Dollars, except percentages) | | Three Months Ended March 31, 2025 | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | Net cash provided by (used for) operating activities | $(77) | $135 | $237 | $58 | $406 | | Changes in operating assets and liabilities and other | 41 | (284) | 50 | (243) | 44 | | Deferred income taxes | 1 | 18 | 36 | 19 | 58 | | Net income (loss) | (35) | (131) | 323 | (166) | 508 | | Add: Identified Items | — | 130 | — | 130 | — | | Net income (loss) excl. Identified Items | $(35) | $(1) | $323 | $(36) | $508 | | Net income (loss) | (35) | (131) | 323 | (166) | 508 | | Less: Other income, net | 37 | 24 | 59 | 61 | 109 | | Interest expense | (39) | (40) | (41) | (79) | (81) | | Provision for income taxes | (1) | (6) | (101) | (7) | (149) | | Income (loss) from operations | (32) | (109) | 406 | (141) | 629 | | Add: Identified Items | — | 130 | — | 130 | — | | Income (loss) from operations excl. Identified Items | (32) | 21 | 406 | (11) | 629 | | Add: Depreciation and amortization | 283 | 295 | 279 | 578 | 552 | | Other income, net | 37 | 24 | 59 | 61 | 109 | | EBITDA excl. Identified Items | 288 | 340 | 744 | 628 | 1,290 | | Less: Identified Items | — | 130 | — | 130 | — | | EBITDA | $288 | $210 | $744 | $498 | $1,290 | | Net external sales | $2,846 | $2,953 | $3,207 | $5,799 | $6,182 | | Operating Income Margin | (1)% | (4)% | 13% | (2)% | 10% | | Operating income margin excl. Identified Items | (1)% | 1% | 13% | —% | 10% | | EBITDA Margin | 10% | 7% | 23% | 9% | 21% | | EBITDA margin excl. Identified Items | 10% | 12% | 23% | 11% | 21% | [Reconciliation of Diluted Earnings (Loss) Per Common Share to Diluted Earnings (Loss) Per Common Share Excluding Identified Item](index=11&type=section&id=Reconciliation%20of%20Diluted%20Earnings%20(Loss)%20Per%20Common%20Share%20to%20Diluted%20Earnings%20(Loss)%20Per%20Common%20Share%20Excluding%20Identified%20Item) This reconciliation adjusts diluted earnings (loss) per common share to exclude the impact of 'Identified Items' for the three and six months ended June 30, 2025, and March 31, 2025, and June 30, 2024. For Q2 2025, diluted EPS was $(1.11), which improved to $(0.09) when excluding the Identified Items Reconciliation of Diluted EPS (US Dollars per share) | | Three Months Ended March 31, 2025 | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | Diluted earnings (loss) per common share attributable to Westlake Corporation | $(0.31) | $(1.11) | $2.40 | $(1.42) | $3.75 | | Add: Identified Items | — | 1.02 | — | 1.02 | — | | Diluted earnings (loss) per common share attributable to Westlake Corporation excl. Identified Items | $(0.31) | $(0.09) | $2.40 | $(0.40) | $3.75 | [Reconciliation of Free Cash Flow to Net Cash Provided by (Used for) Operating Activities](index=11&type=section&id=Reconciliation%20of%20Free%20Cash%20Flow%20to%20Net%20Cash%20Provided%20by%20(Used%20for)%20Operating%20Activities) This reconciliation details the calculation of free cash flow from net cash provided by (used for) operating activities for the three and six months ended June 30, 2025, and March 31, 2025, and June 30, 2024. For Q2 2025, net cash provided by operating activities was $135 million, while free cash flow was $(132) million after accounting for additions to property, plant and equipment Reconciliation of Free Cash Flow (Millions of US Dollars) | | Three Months Ended March 31, 2025 | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | Net cash provided by (used for) operating activities | $(77) | $135 | $237 | $58 | $406 | | Less: Additions to property, plant and equipment | 248 | 267 | 231 | 515 | 503 | | Free cash flow | $(325) | $(132) | $6 | $(457) | $(97) | [Reconciliation of HIP Segment EBITDA to Income from Operations](index=12&type=section&id=Reconciliation%20of%20HIP%20Segment%20EBITDA%20to%20Income%20from%20Operations) This reconciliation provides the calculation of EBITDA for the Housing and Infrastructure Products (HIP) segment from its income from operations for the three and six months ended June 30, 2025, and March 31, 2025, and June 30, 2024. For Q2 2025, HIP segment EBITDA was $275 million, with an EBITDA margin of 24% Reconciliation of HIP Segment EBITDA (Millions of US Dollars, except percentages) | | Three Months Ended March 31, 2025 | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | **Housing and Infrastructure Products Segment** | | | | | | | Income from operations | $148 | $222 | $266 | $370 | $476 | | Add: Depreciation and amortization | 53 | 55 | 53 | 108 | 103 | | Other income, net | 2 | (2) | 17 | — | 21 | | EBITDA | $203 | $275 | $336 | $478 | $600 | | Net external sales | $996 | $1,160 | $1,194 | $2,156 | $2,238 | | Operating Income Margin | 15% | 19% | 22% | 17% | 21% | | EBITDA Margin | 20% | 24% | 28% | 22% | 27% | [Reconciliation of PEM Segment EBITDA to Income (Loss) from Operations](index=12&type=section&id=Reconciliation%20of%20PEM%20Segment%20EBITDA%20to%20Income%20(Loss)%20from%20Operations) This reconciliation details the calculation of EBITDA for the Performance and Essential Materials (PEM) segment from its income (loss) from operations, both including and excluding 'Identified Items,' for the three and six months ended June 30, 2025, and March 31, 2025, and June 30, 2024. For Q2 2025, PEM segment reported an EBITDA of $(78) million, which was $52 million excluding Identified Items Reconciliation of PEM Segment EBITDA (Millions of US Dollars, except percentages) | | Three Months Ended March 31, 2025 | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | **Performance and Essential Materials Segment** | | | | | | | Income (loss) from operations | $(163) | $(318) | $157 | $(481) | $179 | | Add: Identified Items | — | 130 | — | 130 | — | | Income (loss) from operations excl. Identified Items | $(163) | $(188) | $157 | $(351) | $179 | | Add: Depreciation and amortization | 227 | 236 | 224 | 463 | 444 | | Other income, net | 9 | 4 | 10 | 13 | 21 | | EBITDA excl. Identified Items | 73 | 52 | 391 | 125 | 644 | | Less: Identified Items | — | 130 | — | 130 | — | | EBITDA | $73 | $(78) | $391 | $(5) | $644 | | Net external sales | $1,850 | $1,793 | $2,013 | $3,643 | $3,944 | | Operating Income Margin | (9)% | (18)% | 8% | (13)% | 5% | | Operating income margin excl. Identified Items | (9)% | (10)% | 8% | (10)% | 5% | | EBITDA Margin | 4% | (4)% | 19% | —% | 16% | | EBITDA margin excl. Identified Items | 4% | 3% | 19% | 3% | 16% | [Product Sales Price and Volume Variance by Operating Segments](index=13&type=section&id=Product%20Sales%20Price%20and%20Volume%20Variance%20by%20Operating%20Segments) This supplemental information provides a comparative analysis of average sales price and volume variances for Westlake's operating segments (HIP and PEM) and the company as a whole, comparing Q2 2025 against Q2 2024 and Q1 2025. HIP saw sequential price and volume growth, while PEM experienced a sequential volume decline despite a price increase Product Sales Price and Volume Variance | | Second Quarter 2025 vs. Second Quarter 2024 | Second Quarter 2025 vs. First Quarter 2025 | | :--- | :--- | :--- | | | Average Sales Price | Volume | Average Sales Price | Volume | | Housing and Infrastructure Products | -1 % | -2 % | +2 % | +14 % | | Performance and Essential Materials | -2 % | -9 % | +2 % | -6 % | | Company | -1 % | -7 % | +2 % | +1 % |