8-K
WESTLAKE CORP (WLK)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): February 22, 2022
Westlake Corporation
(Exact name of registrant as specified in its charter)
| Delaware | 001-32260 | 76-0346924 | ||||
|---|---|---|---|---|---|---|
| (State or other jurisdiction<br>of incorporation) | (Commission File Number) | (I.R.S. Employer<br>Identification No.) | 2801 Post Oak Boulevard, | Suite 600 | ||
| --- | --- | --- | ||||
| Houston, | Texas | 77056 | ||||
| (Address of principal executive offices) | (Zip Code) |
Registrant's telephone number, including area code: (713) 960-9111
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock, $0.01 par value | WLK | The New York Stock Exchange |
| 1.625% Senior Notes due 2029 | WLK29 | The New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ◻
Item 2.02. Results of Operations and Financial Condition.
On February 22, 2022, Westlake Chemical Corporation (the "Company") issued a press release announcing its 2021 fourth quarter and full year results. A copy of the press release is furnished with this Current Report as Exhibit 99.1.
The information furnished pursuant to this Current Report, including Exhibit 99.1, shall not be deemed to be "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and will not be incorporated by reference into any registration statement filed by Westlake Chemical Corporation under the Securities Act of 1933, as amended, unless specifically identified as being incorporated therein.
Item 7.01. Regulation FD Disclosure.
The Company is holding a conference call on February 22, 2022 to discuss its 2021 fourth quarter and full year results. Information about the call can be found in the press release furnished with this Current Report as Exhibit 99.1. In addition, the Company made available an investor presentation regarding its 2021 fourth quarter and full year results, which is furnished with this Current Report as Exhibit 99.2.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
The following exhibits are furnished herewith:
99.1 Press release issued on February 22, 2022.
99.2 Investor Presentation.
104 The cover page from this Current Report on Form 8-K, formatted in Inline XBRL.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| WESTLAKE CHEMICAL CORPORATION | |||
|---|---|---|---|
| Date: | February 22, 2022 | By: | /S/ ALBERT CHAO |
| Albert Chao<br>President and Chief Executive Officer |
Document
EXHIBIT 99.1
WESTLAKE CORPORATION
Contact—(713) 960-9111
Investors—Steve Bender
Media— L. Benjamin Ederington
Westlake Corporation Reports Record Fourth Quarter and Full Year 2021 Results
•Record annual net sales of $11.8 billion, an increase of 57% vs. 2020 net sales
•Record annual net income of $2.0 billion, an increase of 511% vs. 2020 net income
•Record annual EBITDA of $3.7 billion, an increase of 196% vs. 2020 EBITDA
•Transformational investments of approximately $3.8 billion in building products and Hexion's global epoxy business
•Integrated portfolio of diversified businesses under one unified brand with two segments – Housing and Infrastructure Products ("HIP") and Performance and Essential Materials ("PEM")
•Market conditions continue to look favorable
HOUSTON--(BUSINESS WIRE)-- Westlake Corporation (NYSE: WLK) (the "Company" or "Westlake") today announced record fourth quarter and record full year 2021 results.
SUMMARY FINANCIAL HIGHLIGHTS ($ in millions except per share data)
| Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||
|---|---|---|---|---|---|---|---|---|
| 2021 | 2020 | 2021 | 2020 | |||||
| Westlake Corporation | ||||||||
| Income from operations | $ | 873 | $ | 178 | $ | 2,800 | $ | 429 |
| Net income attributable to Westlake Corporation | $ | 644 | $ | 113 | $ | 2,015 | $ | 330 |
| Diluted earnings per common share | $ | 4.98 | $ | 0.87 | $ | 15.58 | $ | 2.56 |
| EBITDA | $ | 1,131 | $ | 386 | $ | 3,693 | $ | 1,246 |
| EBITDA margin | 32% | 20% | 31% | 17% | ||||
| Performance and Essential Materials Segment | ||||||||
| Net external sales | $ | 2,460 | $ | 1,433 | $ | 8,670 | $ | 5,465 |
| Income from operations | $ | 821 | $ | 143 | $ | 2,549 | $ | 231 |
| EBITDA | $ | 997 | $ | 314 | $ | 3,247 | $ | 898 |
| EBITDA margin | 41% | 22% | 37% | 16% | ||||
| Housing and Infrastructure Products Segment | ||||||||
| Net external sales | $ | 1,047 | $ | 532 | $ | 3,108 | $ | 2,039 |
| Income from operations | $ | 86 | $ | 65 | $ | 356 | $ | 256 |
| EBITDA | $ | 162 | $ | 99 | $ | 534 | $ | 388 |
| EBITDA margin | 15% | 19% | 17% | 19% |
i
BUSINESS HIGHLIGHTS
In February 2022, the Company changed its name from Westlake Chemical Corporation to Westlake Corporation reflecting our more diversified business portfolio and is now organized under one unified brand with two financial reporting segments: Performance and Essential Materials and Housing and Infrastructure Products. Westlake reorganized its operating and reporting segments to better reflect the products produced and the breadth of industries served. The Company's two newly established reporting segments replace the former segments, Olefins and Vinyls. Performance and Essential Materials includes Westlake North American Vinyls, Westlake North American Chlor-alkali & Derivatives, Westlake European & Asian Chlorovinyls, Westlake Olefins, Westlake Polyethylene and Westlake Epoxy. Performance materials includes polyethylene, PVC and epoxy. Essential materials include caustic soda, styrene, and chlorinated derivative materials. Housing and Infrastructure Products includes Westlake Royal Building Products, Westlake Pipe & Fittings, Westlake Global Compounds and Westlake Dimex. Housing products includes housing exterior and interior products, residential pipes and fittings and residential PVC compounds. Infrastructure products includes non-residential pipes and fittings and non-residential PVC compounds. These changes have been retrospectively reflected in the periods presented.
EXECUTIVE COMMENTARY
"In 2021, we accomplished a series of meaningful milestones at Westlake including record financial results and the completion of a number of strategic acquisitions. For the fourth quarter and full year of 2021, we achieved financial records for sales, net income and EBITDA, which were attributable to strong economic conditions and our strategic market positions. We were able to deliver these results despite Winter Storm Uri, Hurricane Ida, the COVID-19 pandemic and on-going supply chain interruptions. Throughout 2021, we saw strong markets across our businesses as a result of the continuing global economic expansion. Residential construction and remodeling spending drove robust demand for PVC resin, as well as products in our Housing and Infrastructure Products segment; likewise, consumer demand for packaging products spurred demand for caustic soda and polyethylene. Our record earnings in 2021 were driven by strong demand across our product portfolio while delivering life enhancing benefits to people every day," said Albert Chao, President and Chief Executive Officer.
"Looking at the Housing and Building Products acquisitions we closed in the second half of 2021, as well as our epoxy acquisition in early 2022, we have developed a larger platform for growth which should drive value through our integrated chain and expect these businesses to meaningfully contribute to earnings in 2022," continued Mr. Chao. "We have created a framework for growth by expanding our footprint in the building product markets, enhancing our position to drive greater value with new and complementary businesses. We remain focused on advancing sustainability and reducing our carbon footprint. We will continue to deliver consistent, durable and increasingly sustainable products through our market leading brands to customers in the United States and around the world, while remaining steadfast in creating value for our shareholders."
"As we look ahead, we remain confident in the fundamentals of our business and the markets in which we participate. Market conditions continue to look favorable in 2022. As the market leader in Performance and Essential Materials including PVC, polyethylene, epoxy, chlorine and caustic soda, we are well-positioned to continue to provide value to our customers and investors. The outlook also remains favorable in our Housing and Infrastructure Products with strong market indicators in 2022. With the ground work we have laid through organic growth projects and our transformative acquisitions, including most recently our new epoxy business, combined with a continued strong market outlook for our products, we are excited about the future ahead," concluded Mr. Chao.
RESULTS
Consolidated Results
The company reported record net income, excluding a tax benefit that occurred in the fourth quarter of 2017, of $644 million on record net sales of $3,507 million for the three months ended December 31, 2021. Net income in the fourth quarter of 2020 was $113 million. The increase in net income of $531 million was driven by significantly higher sales prices and margins across most of our businesses. The continued strength of residential construction coupled with the solid repair and remodeling markets drove strong demand and pricing for PVC resin as well as demand in our Housing and Infrastructure Products business. Additionally, the Performance and Essential Materials business experienced robust strength in polyethylene for packaging and consumer markets and caustic soda benefitting from increasing industrial activity, resulting in higher prices and margins.
ii
For the full year of 2021, record net income of $2,015 million increased by $1,685 million from the full year of 2020 net income of $330 million. Income from operations of $2,800 million for the full year of 2021 increased by $2,371 million from income from operations of $429 million for the full year of 2020, which was severely impacted by the global COVID-19 pandemic. The increases in net income and income from operations were primarily due to the global economic expansion, which created strong demand across our businesses as well as significantly higher sales prices and margins through our integrated chain. The earnings associated with the Housing and Infrastructure Products acquisitions in late 2021, were partially offset by the recognition of purchase accounting adjustments and closing costs.
Record EBITDA (earnings before interest expense, income taxes, depreciation and amortization) of $1,131 million for the fourth quarter of 2021 increased by $745 million compared to fourth quarter 2020 EBITDA of $386 million. Record EBITDA of $3,693 million for the full year of 2021 was $2,447 million higher than EBITDA for the year of 2020 of $1,246 million. A reconciliation of EBITDA to net income, income from operations, and net cash provided by operating activities can be found in the financial schedules at the end of this press release.
Cash and Debt
Net cash provided by operating activities was $757 million for the fourth quarter of 2021 and $2,394 million for the full year 2021. As of December 31, 2021, cash and cash equivalents were $1,908 million and long-term debt was $5,180 million. Capital expenditures were $658 million for the full year 2021.
Performance and Essential Materials Segment
Performance and Essential Materials income from operations for the fourth quarter of 2021 of $821 million increased by $678 million from fourth quarter 2020 income from operations of $143 million. This increase in income from operations versus the prior-year period was due to strong demand dynamics resulting in higher prices for products in the segment. Fourth quarter 2020 was impacted by hurricane outages in Southwest Louisiana.
For the full year of 2021, Performance Materials net sales of $5,997 million increased by $2,569 million from 2020 and Essential Materials net sales of $2,673 million increased by $636 million from 2020. Both increases were attributable to significantly higher prices and elevated volumes for PVC resin, caustic soda and polyethylene. Performance and Essential Materials income from operations of $2,549 million increased by $2,318 million from income from operations of $231 million for the full year of 2020. This increase in income from operations versus the prior-year period was primarily due to significantly higher sales and integrated margins for PVC resin, caustic soda and polyethylene. Income from operations for the full year of 2021 was additionally impacted by Winter Storm Uri and Hurricane Ida, while income from operations for the full year of 2020 was impacted by the onset of the COVID-19 pandemic and Hurricanes Laura and Delta.
Housing and Infrastructure Products Segment
For the fourth quarter of 2021, Housing and Infrastructure Products income from operations of $86 million increased by $21 million from fourth quarter 2020 income from operations of $65 million. This increase in income from operations versus the prior-year period was the result of robust housing and remodeling activity driving healthy demand and higher prices for all products in the segment.
For the full year of 2021, Housing Products net sales of $2,334 million increased by $837 million from 2020 and Infrastructure Products net sales of $774 million increased by $232 million from 2020, both increases were attributable to significantly higher prices and higher sales volumes including those of recent acquisitions driven by housing construction and remodeling activity. Housing and Infrastructure Products income from operations of $356 million increased by $100 million from income from operations of $256 million for the full year of 2020. This increase in income from operations was primarily due to significantly higher sales and margins driven by robust housing construction and remodeling activity driving increased demand. Additionally, 2021 experienced higher energy costs as well as the impacts from Winter Storm Uri and Hurricane Ida, while income from operations for 2020 was impacted by the onset of the COVID-19 pandemic and Hurricanes Laura and Delta.
iii
Forward-Looking Statements
The statements in this release and the related teleconference relating to matters that are not historical facts, including statements regarding favorable market conditions, our outlook for our business segments, our ability to create value and grow, the contribution of recent acquisitions and demand for our products, are forward-looking statements. These forward-looking statements are subject to significant risks and uncertainties. Actual results could differ materially, based on factors including, but not limited to: the COVID-19 pandemic and the response thereto; general economic and business conditions; the cyclical nature of the industry; availability, cost and volatility of raw materials and utilities, including natural gas and natural gas liquids from shale production; the price of crude oil; uncertainties associated with the United States and worldwide economies, including those due to global economic and financial conditions; governmental regulatory actions, including environmental regulation and changes in trade policies; political unrest; industry production capacity and operating rates; the supply/demand balance for Westlake's products; competitive products and pricing pressures; access to capital markets; technological developments; the effect and results of litigation and settlements of litigation; operating interruptions; the ability to integrate the recent acquisitions; the diversion of management time on transaction-related issues; and other risk factors. For more detailed information about the factors that could cause actual results to differ materially, please refer to Westlake's Annual Report on Form 10-K for the year ended December 31, 2020, which was filed with the SEC in February 2021 and Quarterly Report on Form 10-Q for the quarters ended March 31, 2021, June 30, 2021 and September 30, 2021 which were filed with the SEC in May 2021, August 2021 and November 2021, respectively.
Use of Non-GAAP Financial Measures
This release makes reference to certain "non-GAAP" financial measures, such as EBITDA, as defined in Regulation G of the U.S. Securities Exchange Act of 1934, as amended. For this purpose, a non-GAAP financial measure is generally defined by the Securities and Exchange Commission ("SEC") as a numerical measure of a registrant's historical or future financial performance, financial position or cash flows that (1) excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with GAAP in the statement of income, balance sheet or statement of cash flows (or equivalent statements) of the registrant; or (2) includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented. We report our financial results in accordance with U.S. generally accepted accounting principles ("U.S. GAAP"), but believe that certain non-GAAP financial measures, such as EBITDA, provide useful supplemental information to investors regarding the underlying business trends and performance of the Company's ongoing operations and are useful for period-over-period comparisons of such operations. These non-GAAP financial measures should be considered as a supplement to, and not as a substitute for, or superior to, the financial measures prepared in accordance with U.S. GAAP. A reconciliation of EBITDA to net income, income from operations and net cash provided by operating activities can be found in the financial schedules at the end of this press release.
About Westlake
Westlake is a global manufacturer and supplier of materials and innovative products that enhance life every day. Headquartered in Houston, with operations in Asia, Europe and North America, we provide the building blocks for vital solutions — from housing and construction, to packaging and healthcare, to automotive and consumer. For more information, visit the company's web site at www.westlake.com.
Westlake Corporation Conference Call Information:
A conference call to discuss Westlake Corporation's fourth quarter and full year 2021 results will be held Tuesday, February 22, 2022 at 11:00 AM Eastern Time (10:00 AM Central Time). To access the conference call, dial (855) 760-8160 or (704) 288-0624 for international callers, approximately 10 minutes prior to the scheduled start time and reference passcode 835 63 11.
A replay of the conference call will be available beginning two hours after its conclusion until 11:59 p.m. Eastern Time on March 1, 2022. To hear a replay, dial (855) 859-2056 or (404) 537-3406 for international callers. The replay passcode is 835 63 11.
The conference call will also be available via webcast at https://edge.media-server.com/mmc/p/bty22e28 and the earnings release can be obtained via the Company's website at: http://www.westlake.com/investor-relations.
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WESTLAKE CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||
|---|---|---|---|---|---|---|---|---|
| 2021 | 2020 | 2021 | 2020 | |||||
| (In millions of dollars, except per share data and share amounts) | ||||||||
| Net sales | $ | 3,507 | $ | 1,965 | $ | 11,778 | $ | 7,504 |
| Cost of sales | 2,411 | 1,642 | 8,283 | 6,481 | ||||
| Gross profit | 1,096 | 323 | 3,495 | 1,023 | ||||
| Selling, general and administrative expenses | 168 | 117 | 551 | 449 | ||||
| Amortization of intangibles | 40 | 28 | 123 | 109 | ||||
| Restructuring, transaction and integration-related costs | 15 | — | 21 | 36 | ||||
| Income from operations | 873 | 178 | 2,800 | 429 | ||||
| Interest expense | (46) | (34) | (176) | (142) | ||||
| Other income, net | 18 | 12 | 53 | 44 | ||||
| Income before income taxes | 845 | 156 | 2,677 | 331 | ||||
| Provision for (benefit from) income taxes | 184 | 33 | 607 | (42) | ||||
| Net income | 661 | 123 | 2,070 | 373 | ||||
| Net income attributable to noncontrolling interests | 17 | 10 | 55 | 43 | ||||
| Net income attributable to Westlake Corporation | $ | 644 | $ | 113 | $ | 2,015 | $ | 330 |
| Earnings per common share attributable to Westlake<br> Corporation: | ||||||||
| Basic | $ | 5.01 | $ | 0.87 | $ | 15.66 | $ | 2.57 |
| Diluted | $ | 4.98 | $ | 0.87 | $ | 15.58 | $ | 2.56 |
| Weighted average common shares outstanding: | ||||||||
| Basic | 127,853,277 | 127,785,542 | 128,002,911 | 127,850,592 | ||||
| Diluted | 128,674,359 | 128,136,687 | 128,697,982 | 128,089,058 |
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WESTLAKE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
| December 31,<br>2021 | December 31,<br>2020 | |||
|---|---|---|---|---|
| (In millions of dollars) | ||||
| ASSETS | ||||
| Current assets | ||||
| Cash and cash equivalents | $ | 1,908 | $ | 1,313 |
| Accounts receivable, net | 1,868 | 1,214 | ||
| Inventories | 1,407 | 918 | ||
| Prepaid expenses and other current assets | 80 | 32 | ||
| Total current assets | 5,263 | 3,477 | ||
| Property, plant and equipment, net | 7,606 | 6,920 | ||
| Other assets, net | 5,590 | 3,438 | ||
| Total assets | $ | 18,459 | $ | 13,835 |
| LIABILITIES AND EQUITY | ||||
| Current liabilities (accounts payable and accrued and other liabilities) | $ | 2,075 | $ | 1,357 |
| Current portion of long-term debt, net | 269 | — | ||
| Long-term debt, net | 4,911 | 3,566 | ||
| Other liabilities | 2,676 | 2,334 | ||
| Total liabilities | 9,931 | 7,257 | ||
| Total Westlake Corporation stockholders' equity | 7,955 | 6,043 | ||
| Noncontrolling interests | 573 | 535 | ||
| Total equity | 8,528 | 6,578 | ||
| Total liabilities and equity | $ | 18,459 | $ | 13,835 |
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WESTLAKE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| Twelve Months Ended December 31, | ||||
|---|---|---|---|---|
| 2021 | 2020 | |||
| (In millions of dollars) | ||||
| Cash flows from operating activities | ||||
| Net income | $ | 2,070 | $ | 373 |
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||
| Depreciation and amortization | 840 | 773 | ||
| Deferred income taxes | 23 | 146 | ||
| Net loss on disposition and others | 75 | 83 | ||
| Other balance sheet changes | (614) | (78) | ||
| Net cash provided by operating activities | 2,394 | 1,297 | ||
| Cash flows from investing activities | ||||
| Acquisition of businesses, net of cash acquired | (2,554) | — | ||
| Additions to investments in unconsolidated subsidiaries | (24) | (18) | ||
| Additions to property, plant and equipment | (658) | (525) | ||
| Return of investment from an unconsolidated subsidiary | — | 44 | ||
| Other, net | 23 | (10) | ||
| Net cash used for investing activities | (3,213) | (509) | ||
| Cash flows from financing activities | ||||
| Debt issuance costs | (18) | (3) | ||
| Distributions to noncontrolling interests | (48) | (55) | ||
| Dividends paid | (145) | (137) | ||
| Proceeds from debt issuance and drawdown of revolver, net | 1,671 | 1,299 | ||
| Proceeds from (repayment of) short-term notes payable, net | 8 | (17) | ||
| Repayment of revolver and senior notes | — | (1,254) | ||
| Repurchase of common stock for treasury | (30) | (54) | ||
| Other, net | (1) | 5 | ||
| Net cash provided by (used for) financing activities | 1,437 | (216) | ||
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | (14) | 15 | ||
| Net increase (decrease) in cash, cash equivalents and restricted cash | 604 | 587 | ||
| Cash, cash equivalents and restricted cash at beginning of the year | 1,337 | 750 | ||
| Cash, cash equivalents and restricted cash at end of the year | $ | 1,941 | $ | 1,337 |
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WESTLAKE CORPORATION
SEGMENT INFORMATION
(Unaudited)
| Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||
|---|---|---|---|---|---|---|---|---|
| 2021 | 2020 | 2021 | 2020 | |||||
| (In millions of dollars) | ||||||||
| Net external sales | ||||||||
| Performance and Essential Materials | ||||||||
| Performance materials | $ | 1,664 | $ | 953 | $ | 5,997 | $ | 3,428 |
| Essential materials | 796 | 480 | 2,673 | 2,037 | ||||
| Total performance and essential materials | 2,460 | 1,433 | 8,670 | 5,465 | ||||
| Housing and Infrastructure Products | ||||||||
| Housing products | 843 | 390 | 2,334 | 1,497 | ||||
| Infrastructure products | 204 | 142 | 774 | 542 | ||||
| Total housing and infrastructure products | 1,047 | 532 | 3,108 | 2,039 | ||||
| $ | 3,507 | $ | 1,965 | $ | 11,778 | $ | 7,504 | |
| Income (loss) from operations | ||||||||
| Performance and Essential Materials | $ | 821 | $ | 143 | $ | 2,549 | $ | 231 |
| Housing and Infrastructure Products | 86 | 65 | 356 | 256 | ||||
| Corporate and other | (34) | (30) | (105) | (58) | ||||
| $ | 873 | $ | 178 | $ | 2,800 | $ | 429 | |
| Depreciation and amortization | ||||||||
| Performance and Essential Materials | $ | 168 | $ | 161 | $ | 665 | $ | 637 |
| Housing and Infrastructure Products | 70 | 33 | 168 | 128 | ||||
| Corporate and other | 2 | 2 | 7 | 8 | ||||
| $ | 240 | $ | 196 | $ | 840 | $ | 773 | |
| Other income, net | ||||||||
| Performance and Essential Materials | $ | 8 | $ | 10 | $ | 33 | $ | 30 |
| Housing and Infrastructure Products | 6 | 1 | 10 | 4 | ||||
| Corporate and other | 4 | 1 | 10 | 10 | ||||
| $ | 18 | $ | 12 | $ | 53 | $ | 44 |
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WESTLAKE CORPORATION
RECONCILIATION OF EBITDA TO NET INCOME, INCOME FROM
OPERATIONS AND NET CASH PROVIDED BY OPERATING ACTIVITIES
(Unaudited)
| Three Months Ended September 30, | Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 2021 | 2021 | 2020 | 2021 | 2020 | ||||||
| (In millions of dollars) | ||||||||||
| Net cash provided by operating activities | $ | 755 | $ | 757 | $ | 431 | $ | 2,394 | $ | 1,297 |
| Changes in operating assets and liabilities and other | (109) | (123) | (316) | (301) | (778) | |||||
| Deferred income taxes | (26) | 27 | 8 | (23) | (146) | |||||
| Net income | 620 | 661 | 123 | 2,070 | 373 | |||||
| Less: | ||||||||||
| Other income, net | 13 | 18 | 12 | 53 | 44 | |||||
| Interest expense | (61) | (46) | (34) | (176) | (142) | |||||
| Benefit from (provision for) income taxes | (193) | (184) | (33) | (607) | 42 | |||||
| Income from operations | 861 | 873 | 178 | 2,800 | 429 | |||||
| Add: | ||||||||||
| Depreciation and amortization | 203 | 240 | 196 | 840 | 773 | |||||
| Other income, net | 13 | 18 | 12 | 53 | 44 | |||||
| EBITDA | $ | 1,077 | $ | 1,131 | $ | 386 | $ | 3,693 | $ | 1,246 |
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WESTLAKE CORPORATION
RECONCILIATION OF SEGMENT EBITDA TO INCOME FROM OPERATIONS
(Unaudited)
| Three Months Ended September 30, | Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 2021 | 2021 | 2020 | 2021 | 2020 | ||||||
| (In millions of dollars) | ||||||||||
| Performance and Essential Materials Segment | ||||||||||
| Income from operations | $ | 769 | $ | 821 | $ | 143 | $ | 2,549 | $ | 231 |
| Add: | ||||||||||
| Depreciation and amortization | 168 | 168 | 161 | 665 | 637 | |||||
| Other income, net | 9 | 8 | 10 | 33 | 30 | |||||
| EBITDA | $ | 946 | $ | 997 | $ | 314 | $ | 3,247 | $ | 898 |
| Three Months Ended September 30, | Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| 2021 | 2021 | 2020 | 2021 | 2020 | ||||||
| (In millions of dollars) | ||||||||||
| Housing and Infrastructure Products Segment | ||||||||||
| Income from operations | $ | 103 | $ | 86 | $ | 65 | $ | 356 | $ | 256 |
| Add: | ||||||||||
| Depreciation and amortization | 34 | 70 | 33 | 168 | 128 | |||||
| Other income, net | — | 6 | 1 | 10 | 4 | |||||
| EBITDA | $ | 137 | $ | 162 | $ | 99 | $ | 534 | $ | 388 |
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WESTLAKE CORPORATION
SUPPLEMENTAL INFORMATION
Product Sales Price and Volume Variance by Operating Segments
| Fourth Quarter 2021 vs. Fourth Quarter 2020 | Fourth Quarter 2021 vs. Third Quarter 2021 | |||||||
|---|---|---|---|---|---|---|---|---|
| Average<br>Sales Price | Volume | Average<br>Sales Price | Volume | |||||
| Performance and Essential Materials | +61.9 | % | +9.8 | % | +7.3 | % | -1.3 | % |
| Housing and Infrastructure Products | +46.7 | % | +50.0 | % | +10.9 | % | +31.7 | % |
| Company | +57.8 | % | +20.7 | % | +8.2 | % | +6.6 | % |
Average Quarterly Industry Prices and Housing Starts
| Quarter Ended | |||||
|---|---|---|---|---|---|
| December 31,<br>2020 | March 31,<br>2021 | June 30,<br>2021 | September 30,<br>2021 | December 31,<br>2021 | |
| Average domestic prices (1) | |||||
| Natural Gas ($/MMBtu) (2) | 2.7 | 2.8 | 2.9 | 4.0 | 5.8 |
| Ethane (cents/lb) (3) | 7.1 | 8.1 | 8.7 | 11.7 | 13.2 |
| Propane (cents/lb) (4) | 13.5 | 21.2 | 20.7 | 27.6 | 29.5 |
| Ethylene (cents/lb) (5) | 24.0 | 45.1 | 43.0 | 48.0 | 35.4 |
| Polyethylene (cents/lb) (6) | 67.7 | 78.0 | 99.0 | 109.0 | 92.0 |
| Styrene (cents/lb) (7) | 59.6 | 76.5 | 90.5 | 82.0 | 84.8 |
| Caustic soda ($/short ton) (8) | 653 | 648 | 755 | 825 | 920 |
| Chlorine ($/short ton) (9) | 193 | 234 | 309 | 443 | 563 |
| PVC (cents/lb) (10) | 84.5 | 92.8 | 105.0 | 109.0 | 114.3 |
| Average export prices (1) | |||||
| Polyethylene (cents/lb) (11) | 53.2 | 76.3 | 89.7 | 86.0 | 72.7 |
| Caustic soda ($/short ton) (12) | 219 | 249 | 333 | 364 | 573 |
| PVC (cents/lb) (13) | 55.4 | 67.8 | 77.8 | 74.1 | 90.0 |
| Housing Starts (in thousands of units) | |||||
| Housing Starts - Actual quarterly starts (14) | 364 | 358 | 435 | 419 | 385 |
| Housing Starts - Seasonally Adjusted Annual Rate (15) | 1,575 | 1,599 | 1,588 | 1,562 | 1,654 |
________________
(1)Industry pricing data was obtained through IHS Markit ("IHS"). We have not independently verified the data.
(2)Average Burner Tip contract prices of natural gas over the period.
(3)Average Mont Belvieu spot prices of purity ethane over the period.
(4)Average Mont Belvieu spot prices of non-TET propane over the period.
(5)Average North American spot prices of ethylene over the period.
(6)Average North American Net Transaction prices of polyethylene low density GP-Film grade over the period.
(7)Average North American contract prices of styrene over the period.
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(8)Average USGC-CSLi index values for caustic soda over the period. As stated by IHS, "the caustic soda price listing represents the USGC-CSLi values. USGC-CSLi does not reflect contract price discounts, implementation lags, caps or other adjustments factors. Additionally, it is not intended to represent a simple arithmetic average of all market transactions occurring during the month. Rather, the USGC-CSLi is most representative of the month-to-month caustic soda price movement for contract volumes of liquid 50% caustic soda rather than the absolute value of contract prices at a particular point in time. It is intended to serve only as a benchmark."
(9)Average North American contract prices of chlorine over the period.
(10)Average North American contract prices of pipe grade polyvinyl chloride ("PVC") over the period. As stated by IHS, "the contract resin prices posted reflect an "index" or "market" for prices before discounts, rebates, incentives, etc."
(11)Average North American export price for low density polyethylene GP-Film grade over the period.
(12)Average North American low spot export prices of caustic soda over the period.
(13)Average North American spot export prices of PVC over the period.
(14)Quarterly Single and Multi-family Starts data per the U.S. Census Bureau - February 17, 2022 report.
(15)Quarterly Average Single and Multi-family Seasonally Adjusted Annual Rate data per the U.S. Census Bureau - February 17, 2022 report.
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ex992_20211231investorpr
Westlake Corporation Fourth Quarter 2021 Earnings Presentation February 22, 2022
Westlake Corporation 2021 Highlights Record fourth quarter and full-year 2021 results for sales, net income and EBITDA Re-segmentation of business to provide greater clarity and enhanced reporting of all businesses Housing and Infrastructure Products segment EBITDA of $534 million for 2021 Performance and Essential Materials segment EBITDA of $3,247 million for 2021 Announce $3.8 billion of acquisitions transforming business mix and company profile Establish 2030 sustainability goal to reduce CO2 intensity of operations by 20% with a 2016 baseline 2 Business Highlights Reconciliations of EBITDA to the applicable GAAP measures can be found on pages 14 and 15.
Re-segmentation to Provide Greater Clarity 3 New Segmentation Performance and Essential Materials Housing and Infrastructure Products Performance Materials Housing Products • Westlake North American Vinyls • Westlake Polyethylene • Westlake Epoxy • Westlake Royal Building Products • Westlake Pipe and Fittings – residential • Westlake Global Compounds – residential • Westlake Dimex Essential Materials Infrastructure Products • Westlake North American Chlor-alkali & Derivatives • Westlake European & Asian Chlorovinyls • Westlake Olefins • Westlake Pipe and Fittings – infrastructure • Westlake Global Compounds – infrastructure Re-segmentation provides transparency for the Housing and Infrastructure Products segment (“HIP”) and the Performance and Essential Materials segment (“PEM”). Year End 2021 Westlake Corporation Net external sales $11,778 Income from operations $2,800 Net income $2,015 EBITDA $3,693 EBITDA margin 31% Performance and Essential Materials Segment Net external sales $8,670 Income from operations $2,549 EBITDA $3,247 EBITDA margin 37% Housing and Infrastructure Products Segment Net external sales $3,108 Income from operations $356 EBITDA $534 EBITDA margin 17%
Advancing Sustainability Westlake Sets 2030 Carbon Dioxide Reduction Goal Westlake has set a goal of reducing Scope 1 and Scope 2 CO2 emissions rate¹ by 20% by 2030. To achieve this goal, Westlake will act to reduce the carbon intensity of operations by focusing on the optimal feedstocks for energy as well as manufacturing processes. 4 (1) Scope 1 and Scope 2 CO2 emissions per ton of production against a 2016 baseline Sustainability Governance In February 2021, the Board amended the charter of the Board’s Corporate Risk Committee, changing its name to the Corporate Risk and Sustainability Committee. The Committee’s scope of responsibilities include environmental, health and safety, social responsibilities Westlake has an executive level role, Vice President — Sustainability, providing oversight and coordination to the many ESG activities being done on an enterprise basis across Westlake and is responsible for ensuring that we deliver on goals and targets that we set.
Westlake Corporation Performance Fourth Quarter and Full Year 2021 (1) Reconciliations of EBITDA, Housing and Infrastructure Products EBITDA, Performance and Essential Materials EBITDA and Corporate EBITDA to the applicable GAAP measures can be found on pages 14 and 15 5 ($ in millions) 4Q 2021 3Q 2021 4Q 2021 vs. 3Q 2021 4Q 2020 4Q 2021 vs. 4Q 2020 YTD 2021 YTD 2020 YTD 2021 vs. YTD 2020 Sales $3,507 $3,055 15% $1,965 78% $11,778 $7,504 57% Operating Income $873 $861 1% $178 390% $2,800 $429 553% Net Income $644 $607 6% $113 470% $2,015 $330 511% Housing and Infrastructure Products EBITDA $162 $137 18% $99 64% $534 $388 38% Performance and Essential Materials EBITDA $997 $946 5% $314 218% $3,247 $898 262% Corporate EBITDA ($28) ($6) - ($27) - ($88) ($40) - EBITDA¹ $1,131 $1,077 5% $386 193% $3,693 $1,246 196% + Continuing global economic expansion resulted in strong markets for our products and businesses, contributing to solid margins + Westlake’s leading market positions and integration captures the value chain margins across our businesses + Through innovation, Westlake provides differentiated specialty products and solutions • Record annual net sales of $11.8 billion, a 57% increase vs. 2020 net sales • Record annual net income of $2.0 billion, a 511% increase vs. 2020 net income • Record annual EBITDA of $3.7 billion, a 196% increase vs. 2020 EBITDA A Record Year for Westlake
Housing and Infrastructure Products (“HIP”) Segment Performance 6 (1) Reconciliations of EBITDA to the applicable GAAP measure can be found on page 15 + With demographics driving household formation, paired with underbuilding of homes since the 2007- 2009 recession, led to a significant deficit in available homes. Undersupply of housing drives strong building, repair and remodeling and infrastructure fundamentals + Anchored by robust demand in U.S., repair and remodeling activity and the highest level of residential construction starts in over a decade, Westlake’s HIP business benefited from these macro trends ($ in millions) 4Q 2021 3Q 2021 4Q 2021 vs. 3Q 2021 4Q 2020 4Q 2021 vs. 4Q 2020 YTD 2021 YTD 2020 YTD 2021 vs. YTD 2020 Housing Products Sales $843 $536 57% $390 116% $2,334 $1,497 56% Infrastructure Products Sales $204 $197 4% $142 44% $774 $542 43% Total HIP Sales $1,047 $733 43% $532 97% $3,108 $2,039 52% Operating Income $86 $103 (17%) $65 32% $356 $256 39% EBITDA $162 $137 18% $99 64% $534 $388 38% HIP Segment 4Q 2021 vs. 3Q 2021 Average Sales Price Volume +10.9% +31.7% HIP Segment 4Q 2021 vs. 4Q 2020 Average Sales Price Volume +46.7% +50.0%
0 500 1,000 1,500 2,000 2,500 2000 2003 2006 2009 2012 2015 2018 2021 An nu al H ou si ng S ta rt s¹ (t ho us an ds ) Housing and Infrastructure Products Overview 7 Leading market positions with well-established high value brands to serve the residential repair and remodeling and new construction markets With a strong correlation between housing starts and building products, Westlake is well situated to benefit from this continuing trend Westlake Dimex serves demand for sustainable consumer products Segment Commentary Favorable demographics with increasing percentage of the U.S. population to be in household formation years Residential construction drives associated demand for infrastructure products Underbuilding of home and associated lack of supply drives repair and remodeling spending to meet housing deficit Industry Outlook (1) Not seasonally adjusted monthly total residential starts (source: U.S. Census Bureau) Over Decade of Underbuilding Supports Strong Future Demand 50-Year Average
Westlake’s Leading Portfolio of Housing Products 8 Westlake’s leading portfolio of brands provide broad range of products to serve residential customers Westlake Royal Building Products provides residential siding, trim and molding, stone, roofing and window though a number of industry-leading brands to offer a full compliment of interior and exterior resources for the home Westlake Dimex offers a variety of consumer products including top quality brands No-Dig Landscape Edging® MotionTex® Fitness Equipment Mats, and GrillTex® Under the Grill Protective Deck and Patio Mats Building a Leading Brand
Performance and Essential Materials (“PEM”) Segment Performance 9 + Residential construction drove strong demand and pricing for PVC in downstream markets + The global economic expansion drove demand in consumer and industrial packaging as well as manufacturing activity throughout 2021 and Westlake experienced strong demand for caustic soda and polyethylene resulting in healthy margins + Polyethylene realized strong demand dynamics and robust strength in pricing while experiencing supply constraints throughout the year (1) Reconciliations of EBITDA to the applicable GAAP measure can be found on page 15 ($ in millions) 4Q 2021 3Q 2021 4Q 2021 vs. 3Q 2021 4Q 2020 4Q 2021 vs. 4Q 2020 YTD 2021 YTD 2020 YTD 2021 vs. YTD 2020 Performance Materials Sales $1,664 $1,588 5% $953 75% $5,997 $3,428 75% Essential Materials Sales $796 $734 8% $480 66% $2,673 $2,037 31% Total PEM Sales $2,460 $2,322 6% $1,433 72% $8,670 $5,465 59% Operating Income $821 $769 7% $143 474% $2,549 $231 1,003% EBITDA $997 $946 5% $314 218% $3,247 $898 262% PEM Segment 4Q 2021 vs. 3Q 2021 Average Sales Price Volume +7.3% -1.3% PEM Segment 4Q 2021 vs. 4Q 2020 Average Sales Price Volume +61.9% +9.8%
Performance and Essential Materials Outlook 10 As a highly integrated, global leader in chlorovinyls, Westlake is well-positioned to benefit from higher margins over the cycle throughout the value chain PVC supply/demand fundamentals remain strong with the growth in demand higher than the limited supply increases Westlake benefits from globally competitive feedstocks and power costs To meet the needs of customers, Westlake creates formulated products that support the medical, food packaging and other specialty needs markets Epoxies expand Westlake’s essential materials business into attractive global high-growth, innovative, and sustainably oriented end-use markets Westlake produces Specialty PE to meet customer needs to drive value Segment Commentary Global growth in PVC demand is forecasted to continue into the future, driven by robust end use markets, particularly the North American housing market Strength in consumer, industrial and packaging end-markets remains very positive Outlook for caustic soda demand growth outpaces industry capacity additions over the next several years Industry Outlook (1) Chart reflects a mix of both specialized and differentiated products for LDPE and LLDPE 0 3 6 2017-2021 Average Westlake Produces Specialty PE to Create Value for Customers ¢ /lb Average premium for specialty PE over commodity PE
A Sustainable Future - Developing Green Products and Reducing CO2 Emission Intensity 20% by 2030¹ 11 Developing Green Products Westlake offers certified climate-friendly products, GreenVin ® Caustic Soda, and GreenVin® PVC, which utilize renewable energy and have a lower CO2 footprint compared to conventional caustic soda and PVC. Westlake offers PVC Oriented Pipe (“PVCO”), which is PVC pipe that uses less material while delivering the enhanced strength and capabilities of traditional PVC pipes. Epoxy business allows us light-weighting products to create low impact solutions. Westlake Dimex is one of the largest processors of post-industrial recycled plastic material with a variety of consumer products. Westlake and Nexii announced alliance to support sustainable building We are continuing to develop products that are in line with our sustainability goals. Participating in Multi-Industry Associations for Environmental Protection Westlake is a proud partner with the following organizations to drive sustainable action to eliminate plastic waste, capture more flexible food packaging waste for recycling and support vinyls’ sustainable impact in the world, along with many other initiatives. (1) Baseline of 2016
Financial Reconciliations
Consolidated Statements of Operations 13 Three months ended September 30, Three months ended December 31, Twelve months ended December 31, 2021 2021 2020 2021 2020 (In millions of dollars, except per share data) Housing and Infrastructure Products Sales $ 733 $ 1,047 $ 532 $ 3,108 $ 2,039 Performance and Essential Materials Sales 2,322 2,460 1,433 8,670 5,465 Net sales 3,055 3,507 1,965 11,778 7,504 Cost of sales 2,037 2,411 1,642 8,283 6,481 Gross profit 1,018 1,096 323 3,495 1,023 Selling, general and administrative expenses 122 168 117 551 449 Amortization of intangibles 29 40 28 123 109 Restructuring, transaction and integration-related costs 6 15 - 21 36 Income from operations 861 873 178 2,800 429 Interest expense (61) (46) (34) (176) (142) Other income, net 13 18 12 53 44 Income before income taxes 813 845 156 2,677 331 Provision for (benefit from) income taxes 193 184 33 607 (42) Net income 620 661 123 2,070 373 Net income attributable to noncontrolling interests 13 17 10 55 43 Net income attributable to Westlake Corporation $ 607 $ 644 $ 113 $ 2,015 $ 330 Earnings per common share attributable to Westlake Corporation: Basic $ 4.71 $ 5.01 $ 0.87 $ 15.66 $ 2.57 Diluted $ 4.69 $ 4.98 $ 0.87 $ 15.58 $ 2.56
Reconciliation of EBITDA to Net Income, Income from Operations and Net Cash Provided by Operating Activities 14 Three months ended September 30, Three months ended December 31, Twelve months ended December 31, 2021 2021 2020 2021 2020 (In millions of dollars) Net cash provided by operating activities $ 755 $ 757 $ 431 $ 2,394 $ 1,297 Changes in operating assets and liabilities and other (109) (123) (316) (301) (778) Deferred income taxes (26) 27 8 (23) (146) Net income 620 661 123 2,070 373 Less: Other income, net 13 18 12 53 44 Interest expense (61) (46) (34) (176) (142) Benefit from (provision for) income taxes (193) (184) (33) (607) 42 Income from operations 861 873 178 2,800 429 Add: Depreciation and amortization 203 240 196 840 773 Other income, net 13 18 12 53 44 EBITDA $ 1,077 $ 1,131 $ 386 $ 3,693 $ 1,246
Reconciliation of HIP, PEM and Corporate EBITDA to Applicable Operating Income (Loss) 15 Three months ended September 30, Three months ended December 31, Twelve months ended December 31, 2021 2021 2020 2021 2020 (In millions of dollars) Housing and Infrastructure Products EBITDA $ 137 $ 162 $ 99 $ 534 $ 388 Less: Depreciation and Amortization 34 70 33 168 128 Other Income (Expenses) - 6 1 10 4 Housing and Infrastructure Products Operating Income (Loss) 103 86 65 356 256 Performance and Essential Materials EBITDA 946 997 314 3,247 898 Less: Depreciation and Amortization 168 168 161 665 637 Other Income (Expenses) 9 8 10 33 30 Performance and Essential Materials Operating Income (Loss) 769 821 143 2,549 231 Corporate EBITDA (6) (28) (27) (88) (40) Less: Depreciation and Amortization 1 2 2 7 8 Other Income (Expenses) 4 4 1 10 10 Corporate Operating Income (Loss) (11) (34) (30) (105) (58) Housing and Infrastructure Operating Income (Loss) 103 86 65 356 256 Performance and Essential Materials Operating Income (Loss) 769 821 143 2,549 231 Corporate Operating Income (Loss) (11) (34) (30) (105) (58) Total Operating Income (Loss) $ 861 $ 873 $ 178 $ 2,800 $ 429
Quarterly Industry Pricing
1) Industry pricing data was obtained through IHS Markit ("IHS"). We have not independently verified the data. 2) Average Burner Tip contract prices of natural gas over the period. 3) Average Mont Belvieu spot prices of purity ethane over the period. 4) Average Mont Belvieu spot prices of non-TET propane over the period. 5) Average North American spot prices of ethylene over the period. 6) Average North American Net Transaction prices of polyethylene low density GP-Film grade over the period. 7) Average North American contract prices of styrene over the period. 8) Average USGC-CSLi index values for caustic soda over the period. As stated by IHS, "the caustic soda price listing represents the USGC-CSLi values. USGC-CSLi does not reflect contract price discounts, implementation lags, caps or other adjustments factors. Additionally, it is not intended to represent a simple arithmetic average of all market transactions occurring during the month. Rather, the USGC-CSLi is most representative of the month-to-month caustic soda price movement for contract volumes of liquid 50% caustic soda rather than the absolute value of contract prices at a particular point in time. It is intended to serve only as a benchmark." 9) Average North American contract prices of chlorine over the period. 10) Average North American contract prices of pipe grade polyvinyl chloride ("PVC") over the period. As stated by IHS, "the contract resin prices posted reflect an "index" or "market" for prices before discounts, rebates, incentives, etc." 11) Average North American export price for low density polyethylene GP-Film grade over the period. 12) Average North American low spot export prices of caustic soda over the period. 13) Average North American spot export prices of PVC over the period. 14) Quarterly Single and Multi-family Starts data per the U.S. Census Bureau – February 17, 2022 report. 15) Quarterly Average Single and Multi-family Seasonally Adjusted Annual Rate data per the U.S. Census Bureau – February 17, 2022 report. Average Quarterly Industry Prices and Housing Starts 17 Quarter Ended December 31, 2020 March 31, 2021 June 30, 2021 September 30, 2021 December 31, 2021 Average domestic prices (1) Natural Gas ($/MMBtu) (2) 2.7 2.8 2.9 4.0 5.8 Ethane (cents/lb) (3) 7.1 8.1 8.7 11.7 13.2 Propane (cents/lb) (4) 13.5 21.2 20.7 27.6 29.5 Ethylene (cents/lb) (5) 24.0 45.1 43.0 48.0 35.4 Polyethylene (cents/lb) (6) 67.7 78.0 99.0 109.0 92.0 Styrene (cents/lb) (7) 59.6 76.5 90.5 82.0 84.8 Caustic soda ($/short ton) (8) 653 648 755 825 920 Chlorine ($/short ton) (9) 193 234 309 443 563 PVC (cents/lb) (10) 84.5 92.8 105.0 109.0 114.3 Average export prices (1) Polyethylene (cents/lb) (11) 53.2 76.3 89.7 86.0 72.7 Caustic soda ($/short ton) (12) 219 249 333 364 573 PVC (cents/lb) (13) 55.4 67.8 77.8 74.1 90.0 Housing Starts (In thousands of units) Housing Starts – Actual quarterly starts (14) 364 358 435 419 385 Housing Starts – Seasonally Adjusted Annual Rate (15) 1,575 1,599 1,588 1,562 1,654
Safe Harbor Language This presentation contains certain forward-looking statements including statements regarding creating value for our shareholders, pricing and demand for our products, continued recovery in key end markets, industry outlook for both of our segments, our cost control and efficiency efforts, our ability to deliver end-use building products to consumers, our ability to capture integrated chain margin, our development of additional green products in the future, our sustainability goals and commitments and our reduction in carbon impact. Actual results may differ materially depending on factors, including, but not limited to, the following: the effects of our recently completed acquisitions, including our future financial condition, results of operations, strategy and plans; and expected synergies and other benefits from the acquisitions and our ability to realize such synergies and other benefits; general economic and business conditions; the cyclical nature of the chemical and building products industries; the availability, cost and volatility of raw materials and energy; uncertainties associated with the United States, European and worldwide economies, including those due to political tensions and unrest in the Middle East and elsewhere; uncertainties associated with pandemic infectious diseases, particularly COVID-19; current and potential governmental regulatory actions in the United States and other countries; industry production capacity and operating rates; the supply/demand balance for our products; competitive products and pricing pressures; instability in the credit and financial markets; access to capital markets; terrorist acts; operating interruptions (including leaks, explosions, fires, weather-related incidents, mechanical failure, unscheduled downtime, labor difficulties, transportation interruptions, spills and releases and other environmental risks); changes in laws or regulations, including trade policies; technological developments; foreign currency exchange risks; our ability to implement our business strategies; creditworthiness of our customers; and other factors described in our reports filed with the Securities and Exchange Commission. Many of these factors are beyond our ability to control or predict. Any of these factors, or a combination of these factors, could materially affect our future results of operations and the ultimate accuracy of the forward-looking statements. These forward-looking statements are not guarantees of our future performance, and our actual results and future developments may differ materially from those projected in the forward-looking statements. Management cautions against putting undue reliance on forward-looking statements. Every forward-looking statement speaks only as of the date of the particular statement, and we undertake no obligation to publicly update or revise any forward-looking statements. Investor Relations Contacts Westlake Corporation 2801 Post Oak Boulevard, Suite 600 Houston, Texas 77056 713-960-9111 Steve Bender Executive Vice President & Chief Financial Officer Jeff Holy Vice President & Treasurer 18
