Westlake(WLK) - 2025 Q2 - Quarterly Results

Executive Summary & Financial Highlights 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 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 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] - 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] - Q2 2025 EBITDA: $210 million. Excluding Identified Items, EBITDA was $340 million[5] - 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] - 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] - Q2 2025 sales volume increased 1% and average sales price increased 2% compared to Q1 2025[7] - HIP sales increased 16% sequentially (14% volume growth, 2% average sales price increase)[7] - PEM sales decreased 3% sequentially (higher average sales price offset by 6% volume decline)[7] - 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] Executive Commentary 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] - HIP segment delivered solid results despite lower North American residential construction activity, with sales similar to the prior year period[9] - 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] - PEM earnings were also impacted by production disruptions from the tie-in of new VCM capacity at the Geismar, Louisiana, chlorovinyls site[10] - Focus for H2 2025: running plants well and reducing controllable costs. Chlorovinyls production is returning to normal rates during Q3[11] - 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] - 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] Detailed Financial Results 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 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] - 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] - 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] - 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] Identified Items 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] - Inventory write-off related to Pernis facility shutdown: $15 million[17] - Accrued expenses for temporary cessation of Huasu PVC resin production unit: $7 million[17] - Total 'Identified Items' impact: $130 million[5][12][17] - Cash outflows related to the Pernis closure are expected to occur over several years[17] Cash, Investments and Debt 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] - Capital expenditures (Q2 2025): $267 million[18] - Cash, cash equivalents and fixed-income investments (as of June 30, 2025): $2.3 billion[18] - Total debt (as of June 30, 2025): $4.7 billion[18] Segment Performance 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 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] - 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] - 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] 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 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] - Sequential increase in loss from operations: $25 million compared to Q1 2025[21] - 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] - 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] - 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] 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 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 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] - 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] - 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] Use of Non-GAAP Financial Measures 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] - These measures are not intended as a substitute for or superior to financial measures prepared in accordance with U.S. GAAP[25] - Reconciliations of non-GAAP measures to the most directly comparable U.S. GAAP measures are available in the financial schedules[25] Company Information & Conference Call This section provides an overview of Westlake Corporation's global operations and details for its Q2 2025 earnings conference call About Westlake 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] - Headquartered in Houston, with operations in Asia, Europe, and North America[26] - Provides building blocks for vital solutions in housing, construction, packaging, healthcare, automotive, and consumer goods[26] Westlake Corporation Conference Call Information 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] - Pre-registration is required to access the conference call[27] - A replay of the conference call will be available via webcast two hours after its conclusion[28] Financial Statements This section presents Westlake's consolidated statements of operations, balance sheets, and cash flows for the reported periods Consolidated Statements of Operations 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 % |