Westlake Corporation (NYSE:WLK) Q1 2024 Results Conference Call May 1, 2024 11:00 AM ET Company Participants John Zoeller - Vice President and Treasurer Albert Chao - President, CEO & Director Steve Bender - Executive VP & CFO Jeff Holy - VP & Chief Accounting Officer Conference Call Participants Patrick Cunnigham - Citibank Frank Mitsch - Fermium Research Vincent Andrews - Morgan Stanley Aleksay Yefremov - KeyBanc Hassan Ahmed - Alembic Global Advisors Kevin McCarthy - Vertical Research Partners Michael Si ...

WESTLAKE CORPORATION Contact—(713) 960-9111 Investors—Steve Bender Media—L. Benjamin Ederington Westlake Corporation Reports First Quarter 2024 Results HOUSTON--(BUSINESS WIRE)--Westlake Corporation (NYSE: WLK) (the "Company" or "Westlake") today announced first quarter 2024 results. SUMMARY FINANCIAL HIGHLIGHTS (in millions of dollars, except per share data and percentages) | | | Three Months | | Three Months | | Three Months | | --- | --- | --- | --- | --- | --- | --- | | | | Ended March 31, 2024 | | Ende ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended December 31, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period from to Commission File No. 001-32260 Westlake Corporation (Exact name of registrant as specified in its charter) Delaware 76-0346924 (State or other jurisdictio ...

Financial Data and Key Metrics Changes - For Q4 2023, the company reported net income of $93 million or $0.72 per share, and EBITDA of $390 million on sales of $2.8 billion, with a decrease in net income of $139 million from Q4 2022 due to lower average sales prices and margins in the PEM segment [7][16] - For the full year 2023, net income was $1.1 billion and EBITDA was $2.6 billion on sales of $12.5 billion, reflecting a decline of $1.1 billion from record 2022 results [17][22] Business Line Data and Key Metrics Changes - The Performance and Essential Materials (PEM) segment's EBITDA for 2023 was $1.6 billion, down from record 2022 results due to lower global sales prices and margins [18] - The Housing and Infrastructure Products (HIP) segment achieved record income from operations of $710 million and an EBITDA margin of 23%, despite lower revenue [10][20] - In Q4 2023, HIP sales volumes increased by 11% year-over-year, while PEM's sales volumes rose by 6% year-over-year [21][29] Market Data and Key Metrics Changes - European operations faced significant volume and price declines due to a weak macroeconomic environment and increased imports from Asia, particularly affecting the base epoxy business [8][9] - The company noted that customer inventories are at lower levels, which may lead to increased orders in 2024 as customers begin to restock [28][30] Company Strategy and Development Direction - The company aims to reduce earnings and cash flow volatility while maximizing growth potential, integrating PEM and HIP segments to capture value across the value chain [25][26] - Sustainability remains a critical focus, with new goals addressing water usage, health and safety, and community engagement [12][26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the near-term outlook due to low customer inventory levels and solid sales volume momentum entering 2024 [28][30] - The company anticipates potential price increases in 2024 due to rising demand and recent disruptions in global trade routes [30][31] Other Important Information - The company generated $2.3 billion in cash from operations and $1.3 billion in free cash flow for 2023, with a solid investment-grade rated balance sheet [11][22] - A noncash impairment charge of $475 million was recorded for the epoxy business, reflecting a change in fair value due to market conditions [5][14] Q&A Session Summary Question: Can you elaborate on the sales and margin guide for the HIP segment? - Management noted good momentum entering 2024, with constructive growth outlook based on housing starts and permits [35] Question: What is the status of the manufacturing footprint optimization for HIP? - The company is optimizing assets based on market demand, with no specific plans announced for 2024 yet [36] Question: How do recent movements in natural gas and ethane prices affect the company? - A drop in natural gas prices is expected to provide significant benefits, reducing overall energy costs [40] Question: What is the outlook for epoxy earnings in 2024? - Management indicated that while there is some upward price pressure, the market remains weak, and actions are being taken to manage costs [52][48] Question: How does the company view the M&A market? - The company is seeing more ideas and opportunities in both HIP and PEM sectors, evaluating deals based on economic returns [70]

1 Earnings Presentation 4Q 2023 $93M $390M Net Income(1,2) EBITDA(1,3) $3.3B $291M Free Cash Flow(1,4) Fourth Quarter 2023 Highlights 4Q 2023 Financial Results(1) Improving volume trends provide momentum into 2024 $2.8B Net Sales 67% decrease vs. 3Q 9% decrease vs. 3Q 43% decrease vs. 3Q $0.72 Net Income Per Share(1,2) Cash and Equivalents • Record Housing and Infrastructure Products (HIP) annual income from operations of $710 million reflecting the strength of our brands • Generated free cash flow of $291 ...

Westlake Corporation (NYSE:WLK) Q3 2023 Results Conference Call November 2, 2023 11:00 AM ET Company Participants Jeff Holy - VP and Treasurer Albert Chao - President and CEO Steve Bender - EVP and CFO Conference Call Participants Patrick Cunningham - Citi Frank Mitsch - Fermium Research Bhavesh Lodaya - BMO Capital Markets Matthew Blair - TPH David Begleiter - Deutsche Bank Duffy Fisher - Goldman Sachs Kevin McCarthy - Vertical Research Partners Chris Perrella - UBS Hassan Ahmed - Alembic Global Advisors M ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period from to Commission File No. 001-32260 Westlake Corporation (Registrant's telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act ...

Westlake Corporation (NYSE:WLK) Q2 2023 Earnings Conference Call August 3, 2023 11:00 AM ET Company Participants Jeff Holy - Vice President & Treasurer Albert Chao - President & Chief Executive Officer Steve Bender - Executive Vice President & Chief Financial Officer Conference Call Participants Chris Perrella - UBS Patrick Cunningham - Citi David Begleiter - Deutsche Bank Aleksey Yefremov - KeyBanc Kevin McCarthy - Vertical Research Partners Michael Leithead - Barclays Matthew DeYoe - Bank of America Matth ...

2Q 2023 Earnings Presentation 2 Westlake Second Quarter 2023 Highlights ▪ Net sales of $3.3 billion, net income of $297 million and EBITDA(1) of $690 million ▪ Elevated level of unplanned outages impacted operating income and EBITDA by ~$50 million ▪ Performance and Essential Materials second quarter sales of $2.1 billion with EBITDA(2) of $435 million ▪ Housing and Infrastructure Products second quarter sales of $1.1 billion with EBITDA(3) of $244 million ▪ Raising 2023 cost savings target to $75 - $105 mi ...

PART I. FINANCIAL INFORMATION This section details Westlake Corporation's unaudited consolidated interim financial statements and management's analysis [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents Westlake Corporation's unaudited consolidated interim financial statements, including balance sheets, statements of operations, comprehensive income, changes in stockholders' equity, and cash flows, along with detailed notes explaining the basis of presentation, significant accounting policies, and specific financial line items for the periods ended June 30, 2023, and December 31, 2022 [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) This section presents Westlake Corporation's consolidated balance sheets, detailing assets, liabilities, and equity as of June 30, 2023, and December 31, 2022 | Metric | June 30, 2023 (in millions) | December 31, 2022 (in millions) | | :--- | :--- | :--- | | Cash and cash equivalents | $2,677 | $2,228 | | Total current assets | $6,296 | $5,973 | | Property, plant and equipment, net | $8,550 | $8,525 | | Goodwill | $2,167 | $2,161 | | Total assets | $20,981 | $20,550 | | Total current liabilities | $2,131 | $2,298 | | Long-term debt, net | $4,894 | $4,879 | | Total liabilities | $9,904 | $10,085 | | Total equity | $11,077 | $10,465 | [Consolidated Statements of Operations](index=6&type=section&id=Consolidated%20Statements%20of%20Operations) This section presents Westlake Corporation's consolidated statements of operations, detailing net sales, gross profit, income from operations, and net income for specified periods | Metric | Three Months Ended June 30, 2023 (in millions) | Three Months Ended June 30, 2022 (in millions) | Six Months Ended June 30, 2023 (in millions) | Six Months Ended June 30, 2022 (in millions) | | :--- | :--- | :--- | :--- | :--- | | Net sales | $3,251 | $4,483 | $6,607 | $8,539 | | Gross profit | $642 | $1,445 | $1,434 | $2,730 | | Income from operations | $396 | $1,175 | $932 | $2,207 | | Net income attributable to Westlake Corporation | $297 | $858 | $691 | $1,614 | | Diluted EPS | $2.31 | $6.60 | $5.35 | $12.43 | [Consolidated Statements of Comprehensive Income](index=7&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) This section presents Westlake Corporation's consolidated statements of comprehensive income, including net income and other comprehensive income (loss) for specified periods | Metric | Three Months Ended June 30, 2023 (in millions) | Three Months Ended June 30, 2022 (in millions) | Six Months Ended June 30, 2023 (in millions) | Six Months Ended June 30, 2022 (in millions) | | :--- | :--- | :--- | :--- | :--- | | Net income | $307 | $873 | $714 | $1,637 | | Other comprehensive income (loss), net of income taxes | $(12) | $(73) | $10 | $(84) | | Comprehensive income attributable to Westlake Corporation | $285 | $787 | $701 | $1,534 | [Consolidated Statements of Changes in Stockholders' Equity](index=8&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) This section presents Westlake Corporation's consolidated statements of changes in stockholders' equity, detailing movements in common stock, retained earnings, and total equity | Metric | Balances at Dec 31, 2022 (in millions) | Balances at June 30, 2023 (in millions) | | :--- | :--- | :--- | | Common Stock Amount | $1 | $1 | | Common Stock, Held in Treasury (At Cost) | $(467) | $(463) | | Additional Paid-in Capital | $601 | $601 | | Retained Earnings | $9,885 | $10,484 | | Accumulated Other Comprehensive Income (Loss) | $(89) | $(79) | | Total Westlake Corporation Stockholders' Equity | $9,931 | $10,544 | | Noncontrolling Interests | $534 | $533 | | Total Equity | $10,465 | $11,077 | - For the six months ended June 30, 2023, net income attributable to Westlake Corporation was **$691 million**, and dividends declared were **$92 million**[16](index=16&type=chunk)[11](index=11&type=chunk)[56](index=56&type=chunk) [Consolidated Statements of Cash Flows](index=10&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This section presents Westlake Corporation's consolidated statements of cash flows, detailing operating, investing, and financing activities for specified periods | Cash Flow Activity | Six Months Ended June 30, 2023 (in millions) | Six Months Ended June 30, 2022 (in millions) | | :--- | :--- | :--- | | Net cash provided by operating activities | $1,067 | $1,613 | | Net cash used for investing activities | $(499) | $(1,803) | | Net cash used for financing activities | $(131) | $(377) | | Net increase (decrease) in cash, cash equivalents and restricted cash | $446 | $(597) | | Cash, cash equivalents and restricted cash at end of period | $2,692 | $1,344 | [Notes to Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures for the unaudited consolidated interim financial statements, covering accounting policies, business acquisitions, financial instruments, balance sheet components, debt, equity, income taxes, earnings per share, segment information, and legal contingencies [Note 1. Basis of Financial Statements](index=11&type=section&id=Note%201.%20Basis%20of%20Financial%20Statements) This note details the preparation of unaudited interim financial statements in accordance with SEC rules and U.S. GAAP, and outlines the company's global operations and recent accounting standard adoptions - The unaudited consolidated interim financial statements were prepared in accordance with SEC rules for interim periods and U.S. GAAP, reflecting all necessary normal recurring adjustments for a fair statement of financial position as of June 30, 2023[23](index=23&type=chunk)[24](index=24&type=chunk) - Westlake Corporation operates as an integrated global manufacturer and marketer of performance and essential materials and housing and infrastructure products, serving diverse consumer and industrial markets across North America, Europe, and Asia[23](index=23&type=chunk) - The Company is evaluating the impact of ASU 2023-01 (Leases - Common Control Arrangements) effective after December 15, 2023, and adopted ASU 2022-04 (Supplier Finance Programs) and ASU 2021-08 (Business Combinations - Contract Assets/Liabilities) effective January 1, 2023, with no material impact on financial statements from the latter two[26](index=26&type=chunk)[27](index=27&type=chunk)[29](index=29&type=chunk) [Note 2. Hexion Epoxy Business Acquisition](index=12&type=section&id=Note%202.%20Hexion%20Epoxy%20Business%20Acquisition) This note details Westlake Corporation's acquisition of Hexion's global epoxy business for $1,207 million on February 1, 2022, integrating it into the Performance and Essential Materials segment - On February 1, 2022, Westlake Corporation acquired Hexion's global epoxy business (Westlake Epoxy) for **$1,207 million**, integrating its assets and operations into the Performance and Essential Materials segment[31](index=31&type=chunk) [Note 3. Financial Instruments](index=12&type=section&id=Note%203.%20Financial%20Instruments) This note provides details on restricted cash and cash equivalents, primarily related to employee distributions, as of June 30, 2023, and December 31, 2022 | Metric | June 30, 2023 (in millions) | December 31, 2022 (in millions) | | :--- | :--- | :--- | | Restricted cash and cash equivalents | $15 | $18 | - Restricted cash and cash equivalents are primarily related to balances for distributions to current and former employees[32](index=32&type=chunk) [Note 4. Accounts Receivable](index=12&type=section&id=Note%204.%20Accounts%20Receivable) This note details the composition of accounts receivable, net, including trade customers, related parties, and allowances for credit losses, as of June 30, 2023, and December 31, 2022 | Component | June 30, 2023 (in millions) | December 31, 2022 (in millions) | | :--- | :--- | :--- | | Trade customers | $1,666 | $1,676 | | Related parties | $3 | $3 | | Allowance for credit losses | $(27) | $(28) | | Federal and state taxes | $141 | $69 | | Other | $72 | $81 | | Accounts receivable, net | $1,855 | $1,801 | [Note 5. Inventories](index=13&type=section&id=Note%205.%20Inventories) This note details the composition of inventories, including finished products, feedstock, and materials and supplies, as of June 30, 2023, and December 31, 2022 | Component | June 30, 2023 (in millions) | December 31, 2022 (in millions) | | :--- | :--- | :--- | | Finished products | $1,039 | $1,157 | | Feedstock, additives, chemicals and other raw materials | $410 | $496 | | Materials and supplies | $222 | $213 | | Total Inventories | $1,671 | $1,866 | [Note 6. Goodwill](index=13&type=section&id=Note%206.%20Goodwill) This note details the changes in goodwill by segment, including measurement period adjustments and foreign exchange effects, from December 31, 2022, to June 30, 2023 | Segment | Balances at Dec 31, 2022 (in millions) | Measurement Period Adjustments (in millions) | Effects of FX Changes (in millions) | Balances at June 30, 2023 (in millions) | | :--- | :--- | :--- | :--- | :--- | | Performance and Essential Materials | $1,020 | $4 | $0 | $1,024 | | Housing and Infrastructure Products | $1,141 | $1 | $1 | $1,143 | | Total Goodwill | $2,161 | $5 | $1 | $2,167 | [Note 7. Accounts Payable](index=13&type=section&id=Note%207.%20Accounts%20Payable) This note details the composition of accounts payable, including amounts due to third parties and related parties, as of June 30, 2023, and December 31, 2022 | Component | June 30, 2023 (in millions) | December 31, 2022 (in millions) | | :--- | :--- | :--- | | Accounts payable—third parties | $785 | $870 | | Accounts payable to related parties | $14 | $16 | | Notes payable | $3 | $3 | | Total Accounts Payable | $802 | $889 | [Note 8. Long-Term Debt](index=14&type=section&id=Note%208.%20Long-Term%20Debt) This note details the Company's long-term debt, including various senior notes and term loans, their principal amounts, carrying values, and compliance with covenants as of June 30, 2023 | Debt Type | June 30, 2023 (Principal Amount, in millions) | December 31, 2022 (Principal Amount, in millions) | | :--- | :--- | :--- | | 0.875% senior notes due 2024 | $300 | $300 | | 3.60% senior notes due 2026 | $750 | $750 | | 1.625% €700 million senior notes due 2029 | $762 | $750 | | 3.375% senior notes due 2030 | $300 | $300 | | 3.50% senior notes due 2032 | $250 | $250 | | 2.875% senior notes due 2041 | $350 | $350 | | 5.00% senior notes due 2046 | $700 | $700 | | 4.375% senior notes due 2047 | $500 | $500 | | 3.125% senior notes due 2051 | $600 | $600 | | 3.375% senior notes due 2061 | $450 | $450 | | Term loans due 2026 | $14 | $15 | | Total long-term debt, principal amount | $4,987 | $4,976 | | Less: unamortized discount and debt issuance costs | $(93) | $(97) | | Total long-term debt, carrying value | $4,894 | $4,879 | - As of June 30, 2023, the Company was in compliance with all of its long-term debt covenants[39](index=39&type=chunk) - The Company has a **$1,500 million** revolving credit facility maturing June 9, 2027, with no borrowings or letters of credit outstanding as of June 30, 2023, providing full borrowing availability[40](index=40&type=chunk)[42](index=42&type=chunk) [Note 9. Accumulated Other Comprehensive Income (Loss)](index=15&type=section&id=Note%209.%20Accumulated%20Other%20Comprehensive%20Income%20(Loss)) This note details the components of accumulated other comprehensive income (loss), including pension liabilities and foreign currency exchange, from December 31, 2022, to June 30, 2023 | Component | Balances at Dec 31, 2022 (in millions) | Net Other Comprehensive Income (Loss) (in millions) | Balances at June 30, 2023 (in millions) | | :--- | :--- | :--- | :--- | | Pension and Other Post-Retirement Benefits Liability, Net of Tax | $52 | $(13) | $39 | | Cumulative Foreign Currency Exchange, Net of Tax | $(141) | $24 | $(117) | | Other, Net of Tax | $0 | $(1) | $(1) | | Total | $(89) | $10 | $(79) | [Note 10. Fair Value Measurements](index=15&type=section&id=Note%2010.%20Fair%20Value%20Measurements) This note describes the Company's fair value measurement classifications (Level 1, 2, 3) and provides fair value and carrying value for long-term debt as of June 30, 2023, and December 31, 2022 - The Company classifies fair value inputs into three levels: **Level 1** (quoted active market prices), **Level 2** (observable market-based inputs), and **Level 3** (unobservable inputs that are not corroborated by market data)[45](index=45&type=chunk)[46](index=46&type=chunk) - Cash and cash equivalents, accounts receivable, and accounts payable approximate fair value due to short maturities[47](index=47&type=chunk) - Long-term debt fair value is measured using a market approach with **Level 2** inputs[48](index=48&type=chunk) | Metric | June 30, 2023 (in millions) | December 31, 2022 (in millions) | | :--- | :--- | :--- | | Long-term debt carrying value | $4,894 | $4,879 | | Long-term debt fair value | $4,027 | $3,940 | [Note 11. Income Taxes](index=16&type=section&id=Note%2011.%20Income%20Taxes) This note details the effective income tax rates for the three and six months ended June 30, 2023 and 2022, explaining differences from the statutory rate due to R&D credits and tax position reserves | Period | Effective Income Tax Rate | Statutory Rate (21.0%) | Primary Reasons for Difference | | :--- | :--- | :--- | :--- | | Three Months Ended June 30, 2023 | 18.6% | Below | U.S. federal R&D credits, reduction of uncertain tax position reserves (closed federal audit), partially offset by state and foreign taxes | | Three Months Ended June 30, 2022 | 23.9% | Above | Primarily due to state and foreign taxes | | Six Months Ended June 30, 2023 | 20.0% | Below | U.S. federal R&D credits, reduction of uncertain tax position reserves (closed federal audit), mostly offset by state and foreign taxes | | Six Months Ended June 30, 2022 | 23.7% | Above | Primarily due to state and foreign taxes | [Note 12. Earnings and Dividends per Share](index=16&type=section&id=Note%2012.%20Earnings%20and%20Dividends%20per%20Share) This note details net income, basic and diluted EPS, weighted average shares, and dividends per common share for the three and six months ended June 30, 2023, and 2022 | Metric | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--- | :--- | :--- | :--- | :--- | | Net income attributable to Westlake Corporation | $297 | $858 | $691 | $1,614 | | Basic EPS | $2.32 | $6.65 | $5.39 | $12.52 | | Diluted EPS | $2.31 | $6.60 | $5.35 | $12.43 | | Weighted average common shares outstanding (Diluted) | 128,484,016 | 129,341,096 | 128,471,760 | 129,134,246 | | Period | Dividends per common share | | :--- | :--- | | Three Months Ended June 30, 2023 | $0.3570 | | Three Months Ended June 30, 2022 | $0.2975 | | Six Months Ended June 30, 2023 | $0.7140 | | Six Months Ended June 30, 2022 | $0.5950 | [Note 13. Supplemental Information](index=17&type=section&id=Note%2013.%20Supplemental%20Information) This note provides supplemental financial details, including the investment in LACC, LLC, other assets, liabilities, and cash paid for interest and income taxes for specified periods - The Company holds a **50%** membership interest in LACC, LLC, accounted for under the equity method, with the investment balance at **$1,050 million** as of June 30, 2023[57](index=57&type=chunk) | Metric | June 30, 2023 (in millions) | December 31, 2022 (in millions) | | :--- | :--- | :--- | | Other assets, net | $697 | $569 | | Deferred turnaround costs, net | $446 | $359 | | Accrued and other liabilities | $1,329 | $1,409 | | Accrued rebates | $183 | $227 | | Current portion of operating lease liabilities | $113 | $116 | | Accrued income taxes | $172 | $169 | | Accrued liabilities with related parties | $30 | $44 | - Restructuring, transaction, and integration-related costs decreased to **$3 million** for Q2 2023 (from **$7 million** in Q2 2022) and **$6 million** for YTD 2023 (from **$18 million** in YTD 2022), primarily due to reduced integration activities from prior acquisitions[60](index=60&type=chunk) | Cash Paid For (Six Months Ended June 30) | 2023 (in millions) | 2022 (in millions) | | :--- | :--- | :--- | | Interest, net of interest capitalized | $75 | $83 | | Income taxes | $305 | $355 | [Note 14. Commitments and Contingencies](index=18&type=section&id=Note%2014.%20Commitments%20and%20Contingencies) This note details the Company's involvement in legal and regulatory matters, including environmental proceedings, class action lawsuits, and other litigation, and related financial contingencies - The Company is involved in various legal and regulatory matters, primarily environmental, and believes the aggregate outcome will not materially adversely affect its consolidated financial statements, though specific period costs could be material[64](index=64&type=chunk) - The Company is a defendant in multiple class action lawsuits alleging price-fixing and supply restriction for caustic soda in the U.S. and Canada, with direct purchasers seeking **$861 million** in single damages and indirect purchasers seeking **$500 million** in single damages, plus treble damages and attorney's fees, but cannot estimate the impact at this time[65](index=65&type=chunk) - Shell Chemical Europe B.V. filed a civil lawsuit against the Company and other ethylene consumers in the Netherlands, alleging conspiracy to lower ethylene purchase prices through manipulation, but the Company cannot estimate the impact at this time[66](index=66&type=chunk) - Environmental contingencies reserves totaled approximately **$53 million** at June 30, 2023, mostly noncurrent, and the Company may be subject to reasonably possible loss contingencies related to environmental matters in the range of **$75 million to $135 million**, in addition to current reserves[67](index=67&type=chunk)[76](index=76&type=chunk) - The Company is involved in ongoing Calvert City environmental proceedings under CERCLA, with a consent decree for remedial action effective January 28, 2021[69](index=69&type=chunk) - Arbitration regarding cost allocation with Avient Corporation was affirmed in May 2019, holding Avient responsible for **100%** of allocable costs[70](index=70&type=chunk) - A new arbitration was filed by the Company in March 2022 seeking reimbursement, which Avient disputes, claiming the Company is liable for up to **$22 million**[71](index=71&type=chunk)[72](index=72&type=chunk) - The Company believes its allocable remediation costs are unlikely to be material in any individual reporting period[74](index=74&type=chunk) - In October 2022, a jury found the Company liable for trespass and negligence in salt mining operations at the Natrium Plant, awarding approximately **$70 million** in damages to Triad Hunter, LLC, which the Company reserved and intends to appeal if a final judgment is entered[75](index=75&type=chunk) [Note 15. Segment Information](index=21&type=section&id=Note%2015.%20Segment%20Information) This note provides financial information by segment, including net external sales, income from operations, depreciation, amortization, capital expenditures, and total assets for Performance and Essential Materials and Housing and Infrastructure Products - The Company operates in two principal segments: Performance and Essential Materials (including Performance Materials and Essential Materials) and Housing and Infrastructure Products (including Housing Products and Infrastructure Products)[79](index=79&type=chunk)[87](index=87&type=chunk) | Metric (in millions) | Q2 2023 | Q2 2022 | YTD 2023 | YTD 2022 | | :--- | :--- | :--- | :--- | :--- | | **Net External Sales** | | | | | | Performance and Essential Materials | $2,136 | $3,104 | $4,485 | $5,936 | | Housing and Infrastructure Products | $1,115 | $1,379 | $2,122 | $2,603 | | **Income (Loss) from Operations** | | | | | | Performance and Essential Materials | $215 | $965 | $618 | $1,844 | | Housing and Infrastructure Products | $190 | $236 | $333 | $421 | | Corporate and other | $(9) | $(26) | $(19) | $(58) | | **Depreciation and Amortization** | | | | | | Performance and Essential Materials | $217 | $192 | $427 | $376 | | Housing and Infrastructure Products | $51 | $70 | $106 | $141 | | Corporate and other | $3 | $2 | $5 | $4 | | **Capital Expenditures** | | | | | | Performance and Essential Materials | $194 | $192 | $420 | $413 | | Housing and Infrastructure Products | $42 | $36 | $80 | $75 | | Corporate and other | $4 | $2 | $7 | $5 | | Total Assets (in millions) | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Performance and Essential Materials | $13,856 | $13,978 | | Housing and Infrastructure Products | $5,093 | $5,022 | | Corporate and other | $2,032 | $1,550 | | Total Assets | $20,981 | $20,550 | [Note 16. Westlake Chemical Partners LP](index=22&type=section&id=Note%2016.%20Westlake%20Chemical%20Partners%20LP) This note details Westlake Corporation's significant ownership interest in Westlake Chemical Partners LP and OpCo, and their equity distribution agreement - Westlake Chemical Partners LP was formed in 2014 to operate, acquire, and develop ethylene production facilities[83](index=83&type=chunk) - As of June 30, 2023, Westlake Corporation holds a **77.2%** limited partner interest in OpCo and a significant interest in Westlake Partners, including **40.1%** of limited partner interests and incentive distribution rights[84](index=84&type=chunk) - Westlake Partners has an Equity Distribution Agreement to offer and sell common units up to **$50 million**, but no common units have been issued under this program as of June 30, 2023[85](index=85&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the Company's financial condition and results of operations, highlighting key trends, segment performance, liquidity, and capital resources for the periods ended June 30, 2023, and June 30, 2022, including discussions of macroeconomic factors and non-GAAP financial measures [Overview](index=23&type=section&id=Overview) This section provides an overview of Westlake's integrated global operations, highlighting macroeconomic impacts on its Performance and Essential Materials and Housing and Infrastructure Products segments - Westlake is a vertically integrated global manufacturer of performance and essential materials and housing and infrastructure products, operating in two segments: Performance and Essential Materials, and Housing and Infrastructure Products[87](index=87&type=chunk) - European businesses were impacted by higher energy prices, inflation, and reduced demand in 2022 and Q2 2023[88](index=88&type=chunk) - North American businesses also faced high energy costs, interest rates, and slower demand since H2 2022, though energy costs are now lower and inflation easing[88](index=88&type=chunk) - The Performance and Essential Materials segment, including ethylene, PVC, polyethylene, epoxy, and chlor-alkali, experienced significant volatility in natural gas, electricity, ethane, and ethylene prices, along with lower prices and reduced demand globally since H2 2022[89](index=89&type=chunk)[90](index=90&type=chunk) - The Housing and Infrastructure Products segment saw declining demand since Q2 2022 due to rising mortgage rates and inflationary pressures impacting residential construction and repair/remodeling markets[92](index=92&type=chunk) - High interest rates and recession concerns are expected to continue unfavorable impacts[92](index=92&type=chunk) - The Company faces ongoing volatility in raw material prices and energy costs, which directly impact cost of sales, and its ability to maintain margins depends on market acceptance of price increases[93](index=93&type=chunk) [Non-GAAP Financial Measures](index=25&type=section&id=Non-GAAP%20Financial%20Measures) This section explains the Company's use of non-GAAP financial measures like EBITDA and Free Cash Flow to supplement GAAP, detailing their purpose and limitations - The Company uses non-GAAP financial measures, primarily **EBITDA** (Net income before interest expense, income taxes, depreciation, and amortization) and **Free Cash Flow** (Net cash provided by operating activities less additions to property, plant and equipment), to supplement GAAP measures[95](index=95&type=chunk) - Management uses EBITDA to evaluate performance against industry peers, assess acquisition targets, and measure ability to meet debt service, capital expenditure, and working capital needs[96](index=96&type=chunk) - Free Cash Flow is used to evaluate liquidity, strategic investments, and stock buyback plans[97](index=97&type=chunk) - EBITDA and Free Cash Flow are not substitutes for GAAP measures and have limitations, as EBITDA excludes interest, depreciation, amortization, and taxes, while Free Cash Flow only considers operating cash and not net income or income from operations[98](index=98&type=chunk) [Results of Operations](index=26&type=section&id=Results%20of%20Operations) The Company experienced significant declines in net income, diluted EPS, and income from operations for both the second quarter and six months ended June 30, 2023, compared to the prior year, primarily driven by lower sales prices and volumes across most products due to weaker global demand and plant outages, partially offset by higher caustic soda prices and lower energy costs [Summary](index=28&type=section&id=Summary) This summary highlights the significant declines in net sales, net income, diluted EPS, and income from operations for Q2 and YTD 2023 compared to 2022 | Metric | Q2 2023 (in millions) | Q2 2022 (in millions) | Change (in millions) | YTD 2023 (in millions) | YTD 2022 (in millions) | Change (in millions) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Net sales | $3,251 | $4,483 | $(1,232) | $6,607 | $8,539 | $(1,932) | | Net income attributable to Westlake | $297 | $858 | $(561) | $691 | $1,614 | $(923) | | Diluted EPS | $2.31 | $6.60 | $(4.29) | $5.35 | $12.43 | $(7.08) | | Income from operations | $396 | $1,175 | $(779) | $932 | $2,207 | $(1,275) | - The decrease in net income and income from operations was primarily due to lower sales prices and volumes for most products, weaker global demand, and lower plant operating rates due to planned and unplanned outages[110](index=110&type=chunk)[111](index=111&type=chunk) - This was partially offset by higher caustic soda sales prices and lower natural gas and feedstock costs[110](index=110&type=chunk)[111](index=111&type=chunk) [Second Quarter 2023 Compared with Second Quarter 2022](index=28&type=section&id=Second%20Quarter%202023%20Compared%20with%20Second%20Quarter%202022) This section analyzes the financial performance for Q2 2023 versus Q2 2022, detailing changes in net sales, gross profit, expenses, and segment results - Net sales decreased by **$1,232 million** (**27%**) to **$3,251 million**, driven by a **15%** decrease in average sales prices and a **13%** decrease in sales volumes for most products, partially offset by higher caustic soda and chlorine sales prices[112](index=112&type=chunk)[105](index=105&type=chunk) - Gross profit margin decreased to **20%** from **32%**, primarily due to lower prices and margins for most products, partially offset by higher caustic soda prices and lower natural gas (**-71%**) and ethane (**-64%**) costs[113](index=113&type=chunk)[105](index=105&type=chunk) - Selling, general and administrative expenses decreased by **$7 million** to **$213 million**, mainly due to lower selling expenses from reduced net sales, partially offset by higher compensation[114](index=114&type=chunk) - Amortization of intangibles decreased by **$13 million** to **$30 million** due to the end of useful lives for certain intangible assets in the Housing and Infrastructure Products segment[115](index=115&type=chunk) - Interest expense decreased by **$2 million** to **$42 million** due to 2022 debt repayment[117](index=117&type=chunk) - Other income, net, increased by **$6 million** to **$23 million** due to higher interest rates[117](index=117&type=chunk) - The effective income tax rate decreased to **18.6%** from **23.9%**, primarily due to increased U.S. federal R&D credits, reduced reserves for uncertain tax positions, and lower state and foreign taxes[118](index=118&type=chunk) - Performance and Essential Materials segment net sales decreased by **$968 million** (**31%**) due to lower PVC resin, polyethylene, and epoxy sales prices and volumes, partially offset by higher caustic soda and chlorine prices[119](index=119&type=chunk) - Income from operations decreased by **$750 million** to **$215 million**[120](index=120&type=chunk) - Housing and Infrastructure Products segment net sales decreased by **$264 million** (**19%**) due to an **18%** decrease in sales volumes and lower PVC compounds sales prices, partially offset by higher building product prices[121](index=121&type=chunk) - Income from operations decreased by **$46 million** to **$190 million**[122](index=122&type=chunk) [Six Months Ended June 30, 2023 Compared with Six Months Ended June 30, 2022](index=29&type=section&id=Six%20Months%20Ended%20June%2030,%202023%20Compared%20with%20Six%20Months%20Ended%20June%2030,%202022) This section analyzes the financial performance for the six months ended June 30, 2023, versus 2022, detailing changes in net sales, gross profit, expenses, and segment results - Net sales decreased by **$1,932 million** (**23%**) to **$6,607 million**, driven by a **12%** decrease in average sales prices and an **11%** decrease in sales volumes for most products, partially offset by higher caustic soda and chlorine sales prices[123](index=123&type=chunk)[105](index=105&type=chunk) - Gross profit margin decreased to **22%** from **32%**, primarily due to lower prices and margins for most products, partially offset by higher caustic soda prices and lower natural gas (**-55%**) and ethane (**-53%**) costs[124](index=124&type=chunk)[105](index=105&type=chunk) - Selling, general and administrative expenses increased by **$15 million** to **$435 million**, mainly due to higher compensation and a full six months of expenses for the epoxy business acquired in February 2022[125](index=125&type=chunk) - Amortization of intangibles decreased by **$24 million** to **$61 million** due to the end of useful lives for certain intangible assets in the Housing and Infrastructure Products segment[126](index=126&type=chunk) - Interest expense decreased by **$6 million** to **$84 million** due to 2022 debt repayment[128](index=128&type=chunk) - Other income, net, increased by **$17 million** to **$45 million** due to higher interest rates[128](index=128&type=chunk) - The effective income tax rate decreased to **20.0%** from **23.7%**, primarily due to increased U.S. federal R&D credits, reduced reserves for uncertain tax positions, and lower state and foreign taxes[129](index=129&type=chunk) - Performance and Essential Materials segment net sales decreased by **$1,451 million** (**24%**) due to lower PVC resin, polyethylene, and epoxy sales prices and volumes, partially offset by higher caustic soda and chlorine prices[130](index=130&type=chunk) - Income from operations decreased by **$1,226 million** to **$618 million**[131](index=131&type=chunk) - Housing and Infrastructure Products segment net sales decreased by **$481 million** (**18%**) due to a **19%** decrease in sales volumes, partially offset by a **1%** increase in average sales prices for building products and PVC pipe/fittings[132](index=132&type=chunk) - Income from operations decreased by **$88 million** to **$333 million**[133](index=133&type=chunk) [Cash Flow Discussion for the Six Months Ended June 30, 2023 and 2022](index=31&type=section&id=Cash%20Flow%20Discussion%20for%20the%20Six%20Months%20Ended%20June%2030,%202023%20and%202022) For the first six months of 2023, cash flows from operating activities decreased due to lower income from operations but were partially offset by favorable working capital changes. Investing activities saw a significant decrease in cash used due to the absence of a large acquisition like the epoxy business in 2022. Financing activities primarily involved dividend payments, distributions to noncontrolling interests, and common stock repurchases [Operating Activities](index=31&type=section&id=Operating%20Activities) This section discusses the decrease in net cash provided by operating activities for H1 2023, primarily due to lower income from operations, partially offset by favorable working capital changes - Net cash provided by operating activities decreased by **$546 million** to **$1,067 million** in H1 2023 from **$1,613 million** in H1 2022, mainly due to decreased income from operations[135](index=135&type=chunk) - Favorable changes in working capital provided **$30 million** in H1 2023, a **$607 million** improvement from **$577 million** cash used in H1 2022, primarily driven by favorable changes in accounts receivable and inventories due to lower operating activities[135](index=135&type=chunk) [Investing Activities](index=31&type=section&id=Investing%20Activities) This section discusses the significant decrease in net cash used for investing activities in H1 2023, mainly due to the absence of a major acquisition compared to H1 2022 - Net cash used for investing activities decreased significantly to **$499 million** in H1 2023 from **$1,803 million** in H1 2022, primarily due to the absence of the **$1,163 million** epoxy acquisition made in February 2022[136](index=136&type=chunk) - Capital expenditures were **$507 million** in H1 2023, slightly up from **$493 million** in H1 2022, mainly for production capacity/cost improvement, maintenance, safety, and environmental projects[136](index=136&type=chunk) [Financing Activities](index=31&type=section&id=Financing%20Activities) This section discusses the decrease in net cash used for financing activities in H1 2023, detailing dividend payments, distributions to noncontrolling interests, and common stock repurchases - Net cash used for financing activities decreased to **$131 million** in H1 2023 from **$377 million** in H1 2022[137](index=137&type=chunk) - H1 2023 activities included **$92 million** in cash dividends, **$24 million** in distributions to noncontrolling interests, and **$23 million** in common stock repurchases[137](index=137&type=chunk) - H1 2022 activities included **$77 million** in cash dividends, **$24 million** in distributions to noncontrolling interests, **$250 million** debt repayment, and **$31 million** in common stock repurchases[137](index=137&type=chunk) [Liquidity and Capital Resources](index=31&type=section&id=Liquidity%20and%20Capital%20Resources) The Company maintains liquidity through cash, operations, and a revolving credit facility, believing these are adequate for normal operations and capital expenditures. It also manages long-term debt, which is in compliance with covenants, and has a stock repurchase program. The Company also has credit arrangements with Westlake Chemical Partners LP and OpCo, which are eliminated upon consolidation [Liquidity and Financing Arrangements](index=31&type=section&id=Liquidity%20and%20Financing%20Arrangements) This section outlines the Company's primary liquidity sources, including cash, operations, and credit facilities, and details its stock repurchase program - Principal liquidity sources are cash and cash equivalents, cash from operations, short-term borrowings under the credit agreement, and long-term financing[138](index=138&type=chunk) - The Board of Directors authorized a **$250 million** stock repurchase program in 2014, expanded by an additional **$150 million** in 2015, **$150 million** in 2018, and **$500 million** in August 2022[139](index=139&type=chunk) - As of June 30, 2023, **8,722,550 shares** were repurchased for approximately **$574 million** under the program[139](index=139&type=chunk) - During the six months ended June 30, 2023, the Company repurchased **9,552 shares** under the 2014 Program[139](index=139&type=chunk) - Westlake Partners has an Equity Distribution Agreement to offer and sell common units up to **$50 million**, but no common units have been issued under this program as of June 30, 2023[140](index=140&type=chunk) [Cash and Cash Equivalents](index=32&type=section&id=Cash%20and%20Cash%20Equivalents) This section details the Company's cash and cash equivalents balance as of June 30, 2023, and its supplementary availability under the credit agreement - As of June 30, 2023, cash and cash equivalents totaled **$2,677 million**, supplemented by availability under the credit agreement[142](index=142&type=chunk) [Debt](index=32&type=section&id=Debt) This section details the Company's long-term indebtedness, including various senior notes and term loans, and confirms compliance with debt covenants as of June 30, 2023 - As of June 30, 2023, the carrying value of long-term indebtedness was **$4,894 million**[143](index=143&type=chunk) - The Company believes its cash flows from operations, available cash, and credit agreement borrowings are adequate for normal operating needs, but large expansions or acquisitions may require additional financing[144](index=144&type=chunk) | Debt Type | Principal Amount (in millions) as of June 30, 2023 | Maturity Date | Par Call Date | | :--- | :--- | :--- | :--- | | 0.875% senior notes due 2024 | $300 | August 2024 | August 15, 2022 | | 3.60% senior notes due 2026 | $750 | August 2026 | May 15, 2026 | | Loan related to tax-exempt waste disposal revenue bonds due 2027 | $11 | December 2027 | N/A | | 1.625% €700 million senior notes due 2029 | $762 | July 2029 | April 17, 2029 | | 3.375% senior notes due 2030 | $300 | June 2030 | March 15, 2030 | | 3.50% senior notes due 2032 | $250 | November 2032 | November 1, 2027 | | 2.875% senior notes due 2041 | $350 | August 2041 | February 15, 2041 | | 5.00% senior notes due 2046 | $700 | August 2046 | February 15, 2046 | | 4.375% senior notes due 2047 | $500 | November 2047 | May 15, 2047 | | 3.125% senior notes due 2051 | $600 | August 2051 | February 15, 2051 | | 3.375% senior notes due 2061 | $450 | August 2061 | February 15, 2061 | | Term loan 2026 | $14 | March 2026 | N/A | | Total long-term debt | $4,987 | | | - The Company was in compliance with all long-term debt covenants as of June 30, 2023[149](index=149&type=chunk) [Credit Agreement](index=33&type=section&id=Credit%20Agreement) This section describes the Company's $1.5 billion revolving credit facility, its maturity, interest rates, and compliance with the total leverage ratio covenant as of June 30, 2023 - A new **$1.5 billion** revolving credit facility, maturing June 9, 2027, was entered into on June 9, 2022[150](index=150&type=chunk) - It bears interest at Adjusted Term SOFR plus a margin (**1.00% to 1.625%**) or Alternate Base Rate plus a margin (**0.00% to 0.625%**), depending on credit rating[150](index=150&type=chunk) - The Credit Agreement includes a quarterly total leverage ratio financial maintenance covenant, with the Company in compliance as of June 30, 2023[150](index=150&type=chunk) - The facility has a **$150 million** sub-limit for letters of credit and a discretionary **$50 million** commitment for swingline loans[152](index=152&type=chunk) - The facility size can be increased by up to **$500 million** under certain conditions[152](index=152&type=chunk) [Westlake Chemical Partners LP Credit Arrangements](index=34&type=section&id=Westlake%20Chemical%20Partners%20LP%20Credit%20Arrangements) This section details the revolving credit facilities with Westlake Partners and OpCo, their outstanding borrowings, interest rates, and consolidation treatment - Westlake Chemical Finance Corporation is the lender for a **$600 million** revolving credit facility with Westlake Partners (MLP Revolver), maturing July 12, 2027[153](index=153&type=chunk) - Outstanding borrowings were **$377 million** at June 30, 2023, bearing interest at SOFR plus an Applicable Margin (**1.75%-2.75%**) and a **0.10%** credit spread adjustment[153](index=153&type=chunk) - Westlake Polymers LLC is the administrative agent for a **$600 million** revolving credit facility with OpCo (OpCo Revolver), maturing July 12, 2027[154](index=154&type=chunk) - Outstanding borrowings were **$23 million** at June 30, 2023, bearing interest at SOFR plus an Applicable Margin of **1.75%** and a **0.10%** credit spread adjustment[154](index=154&type=chunk) - Both MLP Revolver and OpCo Revolver facilities are eliminated from consolidated financial statements due to Westlake Corporation's controlling financial interest and consolidation of Westlake Partners and OpCo[155](index=155&type=chunk) [Off-Balance Sheet Arrangements](index=34&type=section&id=Off-Balance%20Sheet%20Arrangements) This section confirms that the Company has no off-balance sheet arrangements as of the reporting period - The Company has no off-balance sheet arrangements[156](index=156&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=37&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section discusses the Company's exposure to market risks, including commodity price risk, interest rate risk, and foreign currency exchange rate risk, and outlines strategies employed to mitigate these risks [Commodity Price Risk](index=37&type=section&id=Commodity%20Price%20Risk) This section discusses the Company's exposure to commodity price fluctuations for products and raw materials, and its use of derivative instruments and feedstock flexibility to mitigate risk - The Company is exposed to commodity price fluctuations for products and raw materials, impacting product margins and profitability[162](index=162&type=chunk) - Mitigation strategies include ethylene product feedstock flexibility and downstream integration[162](index=162&type=chunk) - Derivative instruments (commodity swaps and options) are used to reduce price volatility risk on feedstocks and products[162](index=162&type=chunk) - A hypothetical **$0.10** increase in ethane or natural gas prices would not materially impact income before income taxes based on June 30, 2023, positions[162](index=162&type=chunk) [Interest Rate Risk](index=37&type=section&id=Interest%20Rate%20Risk) This section discusses the Company's exposure to interest rate risk from fixed and variable rate debt, and the potential impact of interest rate changes on annual interest expense - The Company is exposed to interest rate risk from fixed and variable rate debt[163](index=163&type=chunk) - As of June 30, 2023, it had **$4,962 million** in fixed rate debt and **$25 million** in variable rate debt (weighted average **2.42%**)[163](index=163&type=chunk) - A hypothetical **1.0%** increase in interest rates at refinancing would increase annual interest expense by approximately **$50 million** for fixed-rate debt[163](index=163&type=chunk) - A **100 basis point** increase on variable-rate debt would not materially change interest expense[163](index=163&type=chunk) - SOFR is used as a reference rate for the revolving line of credit, with no SOFR-based borrowings outstanding at June 30, 2023[164](index=164&type=chunk) [Foreign Currency Exchange Rate Risk](index=37&type=section&id=Foreign%20Currency%20Exchange%20Rate%20Risk) This section discusses the Company's exposure to foreign currency exchange rate risk from international operations and its use of derivative instruments and net investment hedges to mitigate this risk - The Company is exposed to foreign currency exchange rate risk from international operations, though its impact on overall operating results has not been material[165](index=165&type=chunk) - Mitigation strategies include currency exchange derivative instruments (forward exchange contracts, cross-currency swaps, spot purchases) and designating euro-denominated debt (**€700 million 1.625% 2029 Senior Notes**) as a non-derivative net investment hedge[165](index=165&type=chunk)[166](index=166&type=chunk) - Net investment hedges with a notional value of **€150 million** were in place at June 30, 2023, scheduled to settle in 2026[165](index=165&type=chunk) [Item 4. Controls and Procedures](index=38&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the effectiveness of disclosure controls and procedures as of June 30, 2023, concluding they are effective. There were no material changes in internal control over financial reporting during the quarter - Management, including the President and CEO and Executive Vice President and CFO, concluded that disclosure controls and procedures were effective as of June 30, 2023, for accumulating, communicating, recording, processing, summarizing, and reporting required information[168](index=168&type=chunk) - No changes in internal control over financial reporting occurred during the three months ended June 30, 2023, that materially affected, or are reasonably likely to materially affect, internal control over financial reporting[169](index=169&type=chunk) FORWARD-LOOKING STATEMENTS This section contains forward-looking statements, identified by terms like 'believes,' 'intends,' or 'anticipates,' which are based on management's expectations but involve substantial risks and uncertainties. Actual future results could differ materially due to various factors, including economic conditions, industry cycles, raw material costs, geopolitical events, climate change, acquisitions, and legal proceedings, as detailed in the 2022 Form 10-K and other SEC filings - The report contains forward-looking statements, identifiable by terms such as 'believes,' 'intends,' 'may,' 'should,' 'could,' 'anticipates,' or 'expected,' which are subject to substantial risks and uncertainties[158](index=158&type=chunk)[160](index=160&type=chunk) - Factors that could cause actual future results to differ materially include future operating rates, margins, cash flows, product demand, industry market outlook (crude oil, natural gas, ethane, housing), macroeconomic outlook (interest rates, inflation, recession), supply chain constraints, currency devaluation, debt obligations, capital projects, environmental regulations, and pending legal proceedings[159](index=159&type=chunk)[161](index=161&type=chunk) - Management cautions against undue reliance on forward-looking statements, as they are not guarantees of future performance, and the Company undertakes no obligation to publicly update or revise them[161](index=161&type=chunk) PART II. OTHER INFORMATION This section details Westlake Corporation's legal proceedings, risk factors, equity sales, and other required disclosures [Item 1. Legal Proceedings](index=38&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to the detailed description of legal proceedings in the 2022 Form 10-K and Note 14 of this report. It also mentions ongoing notices from government entities regarding environmental laws, but the Company does not believe any of these proceedings will have a material adverse effect on its financial condition, results of operations, or cash flows - The Company's legal proceedings are described in the 2022 Form 10-K and updated in Note 14 of this Quarterly Report on Form 10-Q[170](index=170&type=chunk) - The Company receives notices regarding alleged environmental law violations but does not believe any legal proceedings will have a material adverse effect on its financial condition, results of operations, or cash flows[171](index=171&type=chunk)[172](index=172&type=chunk) [Item 1A. Risk Factors](index=38&type=section&id=Item%201A.%20Risk%20Factors) This section directs readers to Item 1A, 'Risk Factors' in the 2022 Form 10-K for a comprehensive discussion of factors that could materially and adversely affect the Company's business, results of operations, cash flow, liquidity, or financial condition - For a discussion of risk factors, readers are directed to Item 1A, 'Risk Factors' in the 2022 Form 10-K, which details factors that could materially and adversely affect the Company's business, results of operations, cash flow, liquidity, or financial condition[173](index=173&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=39&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During the second quarter of 2023, the Company repurchased 9,552 shares of common stock under its 2014 Program, which has been expanded multiple times and had approximately $476.16 million remaining authorization as of June 30, 2023 | Period | Total Number of Shares Purchased | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs | | :--- | :--- | :--- | :--- | :--- | | April 2023 | 91 | $113.94 | — | $477,162,187 | | May 2023 | 9,552 | $104.67 | 9,552 | $476,162,427 | | June 2023 | 90 | $116.47 | — | $476,162,427 | | Total Q2 2023 | 9,733 | $104.86 | 9,552 | | - The 2014 stock repurchase program, initially **$250 million**, was expanded by an additional **$150 million** in 2015, **$150 million** in 2018, and **$500 million** in August 2022[176](index=176&type=chunk) - As of June 30, 2023, **8,722,550 shares** were acquired for approximately **$574 million** under this program[176](index=176&type=chunk) [Item 5. Other Information](index=39&type=section&id=Item%205.%20Other%20Information) No director or officer of the Company adopted or terminated a 'Rule 10b5-1 trading arrangement' or 'non-Rule 10b5-1 trading arrangement' during the three months ended June 30, 2023 - No director or officer adopted or terminated a 'Rule 10b5-1 trading arrangement' or 'non-Rule 10b5-1 trading arrangement' during the three months ended June 30, 2023[177](index=177&type=chunk) [Item 6. Exhibits](index=40&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including amendments to the Certificate of Incorporation, Bylaws, incentive plans, and certifications - The exhibits include various corporate documents such as Amended and Restated Certificate of Incorporation, Bylaws, incentive plans, and certifications (Rule 13a-14(a)/15d-14(a) and Section 1350)[179](index=179&type=chunk) SIGNATURES This section contains the official signatures of Westlake Corporation's President and Chief Executive Officer, Albert Chao, and Executive Vice President and Chief Financial Officer, M. Steven Bender, certifying the report as of August 3, 2023 - The report is signed by Albert Chao, President and Chief Executive Officer, and M. Steven Bender, Executive Vice President and Chief Financial Officer, on August 3, 2023[184](index=184&type=chunk)