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]

Core Viewpoint - Westlake Chemical reported a quarterly loss of $0.09 per share, missing the Zacks Consensus Estimate of $0.06, and significantly down from earnings of $2.4 per share a year ago, indicating a substantial decline in performance [1][2] Financial Performance - The company posted revenues of $2.95 billion for the quarter ended June 2025, which was 2.84% below the Zacks Consensus Estimate and down from $3.21 billion in the same quarter last year [2] - Over the last four quarters, Westlake has consistently failed to meet consensus EPS and revenue estimates [2] Stock Performance - Westlake shares have decreased by approximately 33.5% since the beginning of the year, contrasting with the S&P 500's gain of 7.6% [3] - The stock currently holds a Zacks Rank of 5 (Strong Sell), indicating expectations of underperformance in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.75 on revenues of $3.06 billion, and for the current fiscal year, it is $0.86 on revenues of $11.79 billion [7] - The trend of estimate revisions for Westlake has been unfavorable leading up to the earnings release [6] Industry Context - The Chemical - Plastic industry, to which Westlake belongs, is currently ranked in the bottom 1% of over 250 Zacks industries, suggesting a challenging environment for the company [8]

[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 % |

Company Overview - Westlake Corporation manufactures and markets performance and essential materials, as well as housing and infrastructure products globally, including ethylene, polyethylene, PVC, and vinyl intermediates [1] - Founded in 1986 and headquartered in Houston, Texas, the company also provides consumer and commercial products such as landscape edging and marine dock edging, serving various markets [2] Current Challenges - The company faces challenges from elevated interest rates and lingering inflation, which have dampened housing starts and reduced demand, negatively impacting business confidence [3] - Sluggish construction activity in North America is a concern, particularly affecting the pipe-and-fitting and siding-and-trim businesses [3] Industry Performance - Westlake is a component of the Zacks Chemical – Plastic industry group, which ranks in the bottom 4% out of approximately 250 Zacks Ranked Industries, indicating expected underperformance over the next 3 to 6 months [4] - Stocks in this industry are relatively overvalued and projected to experience below-average earnings growth, with a PE ratio of 92.19 compared to the iShares-SP500's 19.59 [6][7] Stock Performance - WLK shares have been underperforming, hitting a series of lower lows and representing a compelling short opportunity as 2025 approaches [8] - The company has missed earnings estimates in three of the past four quarters, with a significant loss of -$0.31 per share in Q1, missing the Zacks Consensus Estimate by -144.3% [9] - The trailing four-quarter average earnings miss stands at -61.4%, indicating a trend of underperformance [9] Earnings Outlook - Analysts have revised second-quarter earnings estimates down by -88.89% in the past 60 days, with the current Zacks Consensus EPS Estimate at $0.06 per share, reflecting negative growth of -97.5% year-over-year [10] - Falling earnings estimates are viewed as a significant red flag, contributing to a bearish outlook [11] Technical Analysis - WLK stock is in a sustained downtrend, trading below a downward-sloping 200-day moving average, which is a bearish indicator [12] - The stock has experienced a "death cross," where the 50-day moving average crosses below the 200-day moving average, indicating a need for a substantial upside move to warrant long positions [14][15] Conclusion - The combination of a deteriorating fundamental and technical backdrop suggests that WLK is unlikely to reach new highs soon, with a history of earnings misses and falling future earnings estimates likely capping any potential rallies [16] - The stock is recommended to be avoided by potential investors or considered for short or hedge strategies until significant improvements are observed [17]

Financial Performance (LTM 1Q 2016) - Westlake Chemical Corporation reported Net Sales of $4335 million[6] - The company's EBITDA was $1217 million[6] - Net Income attributable to Westlake was $623 million[6] - Olefins contributed $822 million to EBITDA, representing 67% of the total[6] - Vinyls contributed $410 million to EBITDA, representing 33% of the total[6] Strategic Advantages and Growth Drivers - The company leverages a strong ethane and other NGL advantage due to fundamental structural advances in supply[13] - Significant product integration allows the company to capture the full value chain[13] - Westlake is well-positioned for continued profitable growth due to its ongoing financial strength and flexibility[13] - Westlake has one of the highest LDPE product mix percentages in North America[30] - Global PVC demand is growing, supporting exports[45]

Financial Performance - Westlake Chemical Corporation reported net sales of $6.936 billion and EBITDA of $1.291 billion [4] - Net income attributable to Westlake Chemical Corporation was $456 million [4] - Olefins contributed $750 million to EBITDA, representing 53% of the total, while Vinyls contributed $658 million, accounting for 47% [4] Strategic Acquisitions and Synergies - The acquisition of Axiall has created a diverse, vertically-integrated chemicals leader, enhancing margin stability and growth opportunities [7] - Westlake expects to realize $120 million in synergy savings and cost reductions in 2017, with a total of $200 million expected by 2018 [7] Ethylene and Feedstock Advantages - Westlake has a short position in ethylene, providing cost advantages in the coming years due to its all-ethane feedstock capability [11, 12] - The company's ethylene plants are fully capable of using ethane and have some NGL flexibility, with the European business (Vinnolit) providing further feedstock diversification [22] Polyethylene Product Mix - Westlake has an advantaged polyethylene product mix, with LDPE accounting for 58% and LLDPE for 42% of its capacity [24] - The company focuses on LDPE, which has a higher average margin advantage compared to other PE grades [24] PVC and Global Presence - The Axiall acquisition has given Westlake a global PVC presence with facilities in North America, Europe, and Asia [36] - Westlake/Vinnolit is a leading specialty PVC producer with a global capacity of approximately 4,000 KMT in 2016 [48]

Financial Performance - Westlake's Net Sales reached $7766 million[5] - The company's EBITDA was $1631 million[5] - Net Income attributable to Westlake was $601 million[5] - Olefins EBITDA was $796 million, accounting for 47% of the total[5] - Vinyls EBITDA was $915 million, representing 53% of the total[5] Strategic Initiatives and Growth - The acquisition of Axiall has created a diverse, vertically-integrated chemicals leader[8] - Westlake expects to realize $120 million in synergy savings and cost reductions in 2017 and a total of $200 million by 2018 from the Axiall acquisition[8] - Westlake has a polyethylene capacity of 2600 million lbs[13] Market Position and Advantages - Westlake is the second largest producer of PVC in North America and the third largest globally[47] - Westlake is the third largest producer of Chlor-Alkali in North America and the third largest globally[47] - Westlake has one of the highest LDPE product mix percentages in North America[29]