Westlake Corporation
10/31/2025 | Press release | Distributed by Public on 10/31/2025 13:03
Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)
Management's Discussion and Analysis of Financial Condition and Results of Operations
This discussion and analysis should be read in conjunction with information contained in the accompanying unaudited consolidated interim financial statements of Westlake Corporation and the notes thereto and the consolidated financial statements and notes thereto of Westlake Corporation included in Westlake Corporation's Annual Report on Form 10-K for the fiscal year ended December 31, 2024 (the "2024 Form 10-K"). Unless otherwise indicated, references in this report to "we," "our," "us" or like terms refer to Westlake Corporation ("Westlake" or the "Company"). The following discussion contains forward-looking statements. Please read "Forward-Looking Statements" for a discussion of limitations inherent in such statements.
Overview
We are a vertically integrated global manufacturer and marketer of performance and essential materials and housing and infrastructure products. We operate in two principal operating segments, Performance and Essential Materials and Housing and Infrastructure Products. The Performance and Essential Materials segment includes Westlake North American Vinyls, Westlake North American Chlor-alkali & Derivatives, Westlake European & Asian Chlorovinyls, Westlake Olefins, Westlake Polyethylene and Westlake Epoxy. The Housing and Infrastructure Products segment includes Westlake Royal Building Products, Westlake Pipe & Fittings, Westlake Global Compounds and Westlake Dimex. We are highly integrated along our materials chain with significant downstream integration from ethylene and chlor-alkali (chlorine and caustic soda) into vinyls, polyethylene, epoxy and styrene monomer. We also have substantial downstream integration from polyvinyl chloride("PVC") into our building products, PVC pipes and fittings and PVC compounds in our Housing and Infrastructure Products segment.
Since 2022, our European and North American businesses have been impacted by reduced demand and lower prices due to macroeconomic conditions such as the war in Ukraine, volatility in energy prices, slower GDP growth, inflation and higher interest rates. Furthermore, the lower-than-expected demand for performance and essential materials in Asia amid capacity build-up over the years have also impacted most of our product prices and demand in Europe and North America. In the near term, we expect that the uncertainty in import tariff regimes and trading relationships across the world, volatility in energy prices, inflation and other macroeconomic conditions will continue to impact margins and demand for most of our products. Our North American Chlorovinyls business performance has been significantly impacted by declining prices and reduced demand for our products, resulting in operating losses and a downward revision of our forecasts in the third quarter of 2025. As a result of these factors, the Company performed goodwill impairment analyses during the third quarter of 2025, as discussed under the recent developments section below, and recorded a non-cash impairment charge of $727 million, representing all of the goodwill associated with the North American Chlorovinyls reporting unit.
Recent Developments
Goodwill Impairment
Goodwill is evaluated for impairment when events or changes in circumstances indicate the fair value of a reporting unit with goodwill has been reduced below its carrying amount, and otherwise at least annually. As part of the Company's continuous assessment of changes in the macroeconomic environment in the performance and essential materials industry and recent operating performance and updated forecasts in the third quarter of 2025, the Company identified triggering factors associated with the North American Chlorovinyls reporting unit which comprises PVC, VCM, caustic soda, chlorine and related derivatives assets in North America. Due to the recent operating losses and downward revision of forecasts for the North American Chlorovinyls reporting unit along with negative chlorovinyls industry trends, the Company performed a quantitative assessment to determine if the fair value of this reporting unit had been reduced below its carrying amount.
Based on the quantitative tests performed during the third quarter of 2025, the Company determined that the fair value of the North American Chlorovinyls reporting unit did not exceed its carrying amount. This resulted in a non-cash goodwill impairment charge of $727 million taken in the third quarter of 2025, representing all the goodwill associated with the North American Chlorovinyls reporting unit recognized within the Performance and Essential Materials segment. The goodwill impairment charge is reported as impairment of goodwill on the consolidated statements of operations. For all other reporting units, the Company determined that the fair value of each of the reporting units was in excess of the carrying amounts.
One Big Beautiful Bill Act
On July 4, 2025, President Trump signed into law the legislation commonly referred to as the One Big Beautiful Bill Act ("OBBBA"), which includes a broad range of tax reform provisions affecting corporations. The OBBBA, among other changes, permanently reinstates the "bonus" depreciation provisions that allow for the immediate expensing of 100% of the cost of certain qualified property, permanently reinstates the elective immediate expensing of domestic research and experimental expenditures paid or incurred, and permanently relaxes the limitation on the deductibility of business interest. The OBBBA also modifies certain international tax provisions. The Company evaluated the impact of these tax law changes and recognized the associated income tax effects in the consolidated financial statements beginning in the third quarter of 2025, the period of enactment. At this time, the Company expects these tax law changes to reduce its cash tax without materially impacting its effective income tax rate.
Pernis Facilities Closure
In July 2024, the Company approved a plan to mothball the allyl chloride ("AC") and epichlorohydrin ("ECH") units at the Company's site in Pernis, the Netherlands and recognized charges of approximately $75 million related to mothballing of the AC and ECH units in the third quarter of 2024. The Company continued to operate the liquid and solid epoxy resin ("LER/SER") and bisphenol A ("BPA") units at the Pernis facility through June 2025. In June 2025, due to the continued deterioration of the Company's business in Europe, the Company revised the original mothballing plan and approved a plan to close and cease all the remaining operations at its Pernis facility including the LER/SER and BPA units. In connection therewith, the Company plans to continue supplying customers from its LER/SER and BPA production capacity at its Deer Park, Texas facility. The anticipated closure of the entire Pernis facility would take place after the conclusion of the consultations with local works councils and unions. The Company ceased the BPA unit operations in June 2025 and ceased the LER/SER unit operations in the fourth quarter of 2025. In June 2025, the Company notified the affected employees at the Pernis facility of the Company's revised plan.
The total costs recognized during the nine months ended September 30, 2025 of $145 million consist of charges for asset retirement obligations of $77 million, other plant shutdown related costs of $33 million and employee severance and separation costs of $20 million, that are included in the restructuring, transaction and integration-related costs, and the write-down of inventory of $15 million, that is included as a component of cost of sales in the Company's consolidated statement of operations. The Company expects to incur additional costs in connection with the shutdown. The Company expects to complete the closure plan in 2030.
Suzhou Huasu Plastics PVC Resin Unit Cessation of Operations
In October 2025, the Company's 95% owned joint venture Suzhou Huasu Plastics approved the shutdown of its polyvinyl chloride ("PVC") resin unit located at its plant in Suzhou, Jiangsu, China. The decision was driven by the unit's lack of long-term economic viability. Westlake will continue to operate the PVC calendar products unit at Suzhou Huasu Plastics facility. The Company previously recognized expenses of $7 million in the second quarter of 2025 and an additional $2 million in the third quarter of 2025 associated with the cessation of operations of the unit, and expects to incur additional costs in connection with the shutdown.
Tariffs and Trading Relationships
In 2025, the U.S. government has threatened and announced the imposition of new and expanded tariffs on products imported from other countries, with an emphasis on the countries with which the United States has the largest trade deficits, including China. Increased tariffs by the United States have led and may continue to lead to the imposition of retaliatory tariffs by foreign jurisdictions. Additionally, the U.S. government has announced and modified, delayed or rescinded multiple tariffs on several foreign jurisdictions, which has increased uncertainty regarding the ultimate effect of the tariffs on economic conditions. Current uncertainties about tariffs and their effects on trading relationships may affect the costs for and availability of raw materials or contribute to inflation in the markets in which we operate. Although we are continuing to monitor the economic effects of such announcements, as well as opportunities to mitigate their related impacts, costs and other effects associated with the tariffs remain uncertain.
Antidumping and Countervailing Duty Investigations
In April 2024, the U.S. Epoxy Resin Producers Ad Hoc Coalition (the "Coalition"), of which we are a member, filed petitions with the U.S. Department of Commerce and the U.S. International Trade Commission requesting the initiation of antidumping investigations regarding imports of certain epoxy resins from China, India, South Korea, Taiwan, and Thailand and countervailing duty investigations regarding imports of the same products from China, India, South Korea, and Taiwan. The U.S. Department of Commerce made its final determinations in March 2025. The U.S. International Trade Commission concluded its investigation in April 2025. In May 2025, the U.S. Department of Commerce imposed antidumping and countervailing duty orders on imports of epoxy resins from South Korea and Taiwan and an antidumping order on imports of epoxy resins from Thailand.
In June 2024, the Coalition confidentially lodged an antidumping complaint with the European Commission requesting the initiation of an antidumping investigation concerning imports of epoxy resins into the European Union market originating in China, South Korea, Taiwan and Thailand. In July 2024, the European Commission published in the EU Official Journal a notice initiating an antidumping investigation concerning imports of epoxy resins originating in China, South Korea, Taiwan, and Thailand. In October 2024, the European Commission published a regulation requiring registration of imports subject to the investigation. The European Commission imposed definitive duties in late July 2025 on imports of epoxy resins from China, Taiwan, and Thailand.
Our Operations and Outlook
Performance and Essential Materials
Our performance and essential materials such as ethylene, PVC, polyethylene, epoxy and caustic soda are some of the most widely used materials in the world and are upgraded into a wide variety of higher value-added products used in many end-markets. Westlake is the second-largest chlor-alkali producer and the second-largest PVC producer in the world, which makes Westlake a leading global chlorovinyls producer. Our performance and essential materials are used by customers in PVC pipe applications; housing and construction products; food and specialty packaging; industrial and consumer packaging; renewable wind energy; coatings; consumer durables; medical health applications; and mobility and transportation. Chlor-alkali and petrochemicals are typically manufactured globally in large volume by a number of different producers using widely available technologies. The chlor-alkali and petrochemical industries exhibit cyclical commodity characteristics, and margins are influenced by changes in the balance between global supply and demand and the resulting operating rates, the level of general economic activity and the price of raw materials. Due to the significant size of new plants, capacity additions are built in large increments and typically require several years of demand growth to be absorbed. The cycle is generally characterized by periods of tight supply, leading to high operating rates and margins, followed by a decline in operating rates and margins primarily as a result of excess new capacity additions. Westlake is a leading supplier of liquid and solid epoxy resins that are used in a wide variety of industrial coating applications. We are also one of the leading producers of epoxy specialty resins, modifiers and curing agents in Europe, the United States and Asia with a global reach to our end markets. Epoxy resins are the fundamental component of many types of materials and are often used in the automotive, construction, wind energy, aerospace and electronics industries due to their superior adhesion, strength and durability.
Since 2022, we have continued to experience lower prices and weak demand for most of our performance and essential materials products globally. The ongoing conflict between Russia and Ukraine since Russia's invasion of Ukraine in 2022, the conflict in the Middle East, slow economic growth in China and Europe, increases in bisphenol-A, epichlorohydrin and base epoxy resin exports out of Asia into European and North American markets, disruption of trade flows due to enactment of duties and tariffs and related uncertainties, overcapacity in all the regions of PVC resin, polyethylene, chlor-alkali and epoxy, and volatility in natural gas, electricity and crude oil prices could have a continuing negative impact on the performance of Performance and Essential Materials businesses.
Housing and Infrastructure Products
Our Housing and Infrastructure Products segment is primarily comprised of residential building products, PVC pipes and fittings and PVC compound products. Our sales are affected by new home constructions and home repair and remodeling as well as the decisions of distributors and dealers on the levels of inventory they carry, their views on product demand, their financial condition and the manner in which they choose to manage inventory risk. A significant portion of our performance in this segment is driven by the activities in the residential construction and repair and remodeling markets in North America, which began to decline at the end of the second quarter of 2022 primarily due to the negative effect that rising mortgage rates in the United States had on buyer sentiment. Since the beginning of 2024, with the stabilization of interest rates and the possibility of interest rate cuts by the U.S. Federal Reserve in the near term, we have seen improvement in the demand for housing products. Performance of our housing and infrastructure products businesses over time are generally reflective of the trends of building permits and housing starts in the New Residential Construction Survey by the U.S. Census Bureau and the Repair and Remodeling Index (RRI) provided by the National Association of Home Builders (the "NAHB") among others. Although we ultimately expect that the Infrastructure Investment and Jobs Act of 2021 and historically low residential housing construction that has resulted in an undersupply of existing housing may have a favorable long-term impact on our Housing and Infrastructure Products segment, the current inflationary environment impacting consumer spending and priorities and decade-high mortgage interest rates impacting consumer affordability are expected to have an unfavorable impact on the demand for housing construction in the near term and, as a result, our products produced by this segment.
Factors that have caused volatility in our raw material prices, energy costs and other production costs in the past, and which may do so in the future, include significant fluctuation in prices of these raw materials in response to, among other things, variable worldwide supply and demand across different industries, speculation in commodities futures, general economic, business or environmental conditions, labor costs, competition, import duties impacting our cross-border trades within North America, enactment of tariffs and related uncertainties, worldwide currency fluctuations, freight, inflationary pressures, regulatory costs, and product and process evolutions that impact demand for the same materials. Increasing raw material prices directly impact our cost of sales and our ability to maintain margins depends on implementing price increases in response to increasing raw material costs. The market for our products may or may not accept price increases, and as such, our future financial condition, results of operations or cash flows could be materially impacted.
Non-GAAP Financial Measures
The body of accounting principles generally accepted in the United States is commonly referred to as "GAAP." For this purpose, a non-GAAP financial measure is generally defined by the Securities and Exchange Commission ("SEC") as one that purports to measure 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. In this report, we disclose non-GAAP financial measures, primarily earnings before interest, taxes, depreciation and amortization ("EBITDA") and Free Cash Flow. We define EBITDA as net income before interest expense, income taxes, depreciation and amortization. We define Free Cash Flow as net cash provided by operating activities less additions to property, plant and equipment. The non-GAAP financial measures described in this Form 10-Q are not substitutes for the GAAP measures of earnings and cash flows.
EBITDA is included in this Form 10-Q because our management considers it an important supplemental measure of our performance and believes that it is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry, some of which present EBITDA when reporting their results. We regularly evaluate our performance as compared to other companies in our industry that have different financing and capital structures and/or tax rates by using EBITDA. In addition, we utilize EBITDA in evaluating acquisition targets. Management also believes that EBITDA is a useful tool for measuring our ability to meet our future debt service and satisfy capital expenditure and working capital requirements, and EBITDA is commonly used by us and our investors to measure our ability to service indebtedness.
Free Cash Flow is included in this Form 10-Q because our management considers it an important supplemental measure of our performance and believes that it is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry, some of which present Free Cash Flow when reporting their results. We regularly evaluate our performance as compared to other companies in our industry that have different financing and capital structures and/or tax rates by using Free Cash Flow. Management also believes that Free Cash Flow is useful to investors and securities analysts to evaluate our liquidity, evaluate strategic investment, evaluate our stock buyback plan and measure our ability to meet our future debt service.
EBITDA and Free Cash Flow are not substitutes for the GAAP measures of net income, income from operations and net cash provided by operating activities and are not necessarily measures of our ability to fund our cash needs. In addition, companies calculate EBITDA and Free Cash Flow differently and, therefore, EBITDA and Free Cash Flow as presented for us may not be comparable to EBITDA and Free Cash Flow reported by other companies. EBITDA has material limitations as a performance measure because it excludes interest expense, depreciation and amortization and income taxes. Free Cash Flow has material limitations as a performance measure because it only considers net cash provided by operating activities, and not net income or income from operations. For instance, it applies the entire cost of capital expenditure in the period in which the property or equipment is acquired, rather than spreading it over several periods as is the case with net income and income from operations.
Reconciliations of EBITDA to net income, income from operations and net cash provided by operating activities, and Free Cash Flow to net cash provided by operating activities are included in the "Results of Operations" section below.
Results of Operations
Segment Data
The table below and descriptions that follow represent the consolidated results of operations of the Company for the three and nine months ended September 30, 2025and 2024.
Net External Sales
The table below presents net external sales on a disaggregated basis for our two principal operating segments. Performance Materials net external sales primarily consist of sales of PVC resin, polyethylene and epoxy resin. Essential Materials net external sales primarily consist of sales of caustic soda, chlorine, styrene, and related derivative materials. Housing Products net external sales primarily consist of sales of housing exterior and interior products, residential pipes and fittings and residential products utilizing PVC compounds. Infrastructure Products net external sales primarily consist of sales of infrastructure related pipes and fittings and infrastructure products utilizing PVC compounds.
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||
|
(in millions of dollars, except per share data)
|
||||||||||||||||||||||||||
| Net external sales | ||||||||||||||||||||||||||
| Performance and Essential Materials | ||||||||||||||||||||||||||
| Performance Materials | $ | 1,010 | $ | 1,164 | $ | 3,088 | $ | 3,505 | ||||||||||||||||||
| Essential Materials | 737 | 855 | 2,302 | 2,458 | ||||||||||||||||||||||
| Total Performance and Essential Materials | 1,747 | 2,019 | 5,390 | 5,963 | ||||||||||||||||||||||
| Housing and Infrastructure Products | ||||||||||||||||||||||||||
| Housing Products | 928 | 937 | 2,746 | 2,826 | ||||||||||||||||||||||
| Infrastructure Products | 163 | 161 | 501 | 510 | ||||||||||||||||||||||
| Total Housing and Infrastructure Products | 1,091 | 1,098 | 3,247 | 3,336 | ||||||||||||||||||||||
| $ | 2,838 | $ | 3,117 | $ | 8,637 | $ | 9,299 | |||||||||||||||||||
| Income (loss) from operations | ||||||||||||||||||||||||||
| Performance and Essential Materials | $ | (902) | $ | (9) | $ | (1,383) | $ | 170 | ||||||||||||||||||
| Housing and Infrastructure Products | 151 | 202 | 521 | 678 | ||||||||||||||||||||||
| Corporate and other | (15) | (13) | (45) | (39) | ||||||||||||||||||||||
|
Total income (loss) from operations
|
(766) | 180 | (907) | 809 | ||||||||||||||||||||||
| Interest expense | (41) | (39) | (120) | (120) | ||||||||||||||||||||||
| Other income, net | 32 | 44 | 93 | 153 | ||||||||||||||||||||||
|
Provision for (benefit from) income taxes
|
(3) | 65 | 4 | 214 | ||||||||||||||||||||||
|
Net income (loss)
|
(772) | 120 | (938) | 628 | ||||||||||||||||||||||
| Net income attributable to noncontrolling interests | 10 | 12 | 26 | 33 | ||||||||||||||||||||||
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Net income (loss) attributable to Westlake Corporation
|
$ | (782) | $ | 108 | $ | (964) | $ | 595 | ||||||||||||||||||
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Diluted earnings (loss) per share
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$ | (6.06) | $ | 0.83 | $ | (7.48) | $ | 4.58 | ||||||||||||||||||
|
EBITDA (1)
|
$ | (431) | $ | 505 | $ | 67 | $ | 1,795 | ||||||||||||||||||
|
Free Cash Flow (2)
|
$ | (57) | $ | 254 | $ | (514) | $ | 157 | ||||||||||||||||||
_____________
(1)See above for discussions on non-GAAP financial measures. See "Reconciliation of EBITDA to Net Income, Income from Operations and Net Cash Provided by Operating Activities" below.
(2)See above for discussions on non-GAAP financial measures. See "Reconciliation of Free Cash Flow to Net Cash Provided by Operating Activities" below.
| Three Months Ended September 30, 2025 | Nine Months Ended September 30, 2025 | |||||||||||||||||||||||||
|
Average Sales Price |
Volume |
Average Sales Price |
Volume | |||||||||||||||||||||||
| Net sales percentage change from prior-year period due to average sales price and volume | ||||||||||||||||||||||||||
| Performance and Essential Materials | -7 | % | -6 | % | -3 | % | -6 | % | ||||||||||||||||||
| Housing and Infrastructure Products | -1 | % | - | % | -2 | % | -1 | % | ||||||||||||||||||
|
Company average
|
-5 | % | -4 | % | -3 | % | -4 | % | ||||||||||||||||||
| Three Months Ended September 30, 2025 | Nine Months Ended September 30, 2025 | |||||||||||||
| Domestic US prices percentage change from prior-year period for fuel cost and feedstock | ||||||||||||||
| Fuel cost (Natural Gas) | +45 | % | +61 | % | ||||||||||
| Feedstock (Ethane) | +47 | % | +38 | % | ||||||||||
Reconciliation of EBITDA to Net Income, Income from Operations and Net Cash Provided by Operating Activities
The following table presents the reconciliation of EBITDA to net income, income from operations and net cash provided by operating activities, the most directly comparable GAAP financial measures, for each of the periods indicated.
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||
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(in millions of dollars)
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||||||||||||||||||||||||||
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Net cash provided by operating activities
|
$ | 182 | $ | 474 | $ | 240 | $ | 880 | ||||||||||||||||||
| Changes in operating assets and liabilities and other | (895) | (354) | (1,138) | (310) | ||||||||||||||||||||||
| Deferred income taxes | (59) | - | (40) | 58 | ||||||||||||||||||||||
|
Net income (loss)
|
(772) | 120 | (938) | 628 | ||||||||||||||||||||||
| Less: | ||||||||||||||||||||||||||
|
Other income, net
|
32 | 44 | 93 | 153 | ||||||||||||||||||||||
|
Interest expense
|
(41) | (39) | (120) | (120) | ||||||||||||||||||||||
|
Provision for (benefit from) income taxes
|
3 | (65) | (4) | (214) | ||||||||||||||||||||||
|
Income (loss) from operations
|
(766) | 180 | (907) | 809 | ||||||||||||||||||||||
| Add: | ||||||||||||||||||||||||||
| Depreciation and amortization | 303 | 281 | 881 | 833 | ||||||||||||||||||||||
| Other income, net | 32 | 44 | 93 | 153 | ||||||||||||||||||||||
| EBITDA | $ | (431) | $ | 505 | $ | 67 | $ | 1,795 | ||||||||||||||||||
Reconciliation of Free Cash Flow to Net Cash Provided by Operating Activities
The following table presents the reconciliation of Free Cash Flow to net cash provided by operating activities, the most directly comparable GAAP financial measure, for each of the periods indicated.
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||
|
(in millions of dollars)
|
||||||||||||||||||||||||||
|
Net cash provided by operating activities
|
$ | 182 | $ | 474 | $ | 240 | $ | 880 | ||||||||||||||||||
| Less: | ||||||||||||||||||||||||||
| Additions to property, plant and equipment | 239 | 220 | 754 | 723 | ||||||||||||||||||||||
|
Free cash flow
|
$ | (57) | $ | 254 | $ | (514) | $ | 157 | ||||||||||||||||||
Summary
For the quarter ended September 30, 2025, Westlake Corporation incurred a net loss of $782 million, or $(6.06) per diluted share, on net sales of $2,838 million. This represents a decrease in net income attributable to Westlake Corporation of $890 million, or $6.89 per diluted share, compared to the quarter ended September 30, 2024 net income attributable to Westlake Corporation of $108 million, or $0.83 per diluted share, on net sales of $3,117 million. Loss from operations was $766 million for the quarter ended September 30, 2025, as compared to income from operations of $180 million for the quarter ended September 30, 2024, a decrease of $946 million. The decrease in net income and income from operations was due to lower sales prices for many of our products across both segments, including PVC resin, polyethylene and pipe and fittings, lower sales volumes for PVC resin, chlorine, chlorinated derivatives, epoxy resin and building products, and higher energy and feedstock costs in the third quarter of 2025. The decrease in net income and income from operations was also due to a non-cash impairment charge of $727 million related to North American Chlorovinyls goodwill under the Performance and Essential Materials segment, as discussed under the recent developments section. These decreases were slightly offset by higher PVC compounds sales prices, higher pipe and fittings sales volumes and lower impact from fewer unplanned plant outages in the third quarter of 2025 as compared to the third quarter of 2024. Net sales decreased by $279 million to $2,838 million in the quarter ended September 30, 2025 from $3,117 million in the quarter ended September 30, 2024, primarily due to lower sales prices for PVC resin, polyethylene and pipe and fittings and lower sales volumes for PVC resin, chlorine, chlorinated derivatives, epoxy resin and building products, which were partially offset by higher PVC compounds sales prices and higher pipe and fittings sales volumes.
For the nine months ended September 30, 2025, Westlake Corporation incurred a net loss of $964 million, or $(7.48) per diluted share, on net sales of $8,637 million. This represents a decrease in net income attributable to Westlake Corporation of $1,559 million, or $12.06 per diluted share, compared to the nine months ended September 30, 2024 net income attributable to Westlake Corporation of $595 million, or $4.58 per diluted share, on net sales of $9,299 million. Loss from operations was $907 million for the nine months ended September 30, 2025, as compared to income of $809 million from operations for the nine months ended September 30, 2024, a decrease of $1,716 million in income from operations. The decrease in net income and income from operations was primarily due to lower sales prices for many of our products across both segments, including PVC resin, polyethylene, chlorine and pipe and fittings, lower sales volumes for PVC resin, epoxy resin, polyethylene, caustic soda, chlorine, and building products and higher energy and feedstock costs in the nine months ended September 30, 2025. The decrease in net income and income from operations in the nine months ended September 30, 2025 was also due to the recognition of a non-cash impairment charge of $727 million related to North American Chlorovinyls goodwill and the recognition of restructuring charges of $139 million, primarily related to the closure of the Pernis facility located in the Netherlands , all under the Performance and Essential Materials Segment. These decreases were slightly offset by higher caustic soda and PVC compounds sales prices and higher pipe and fittings sales volumes. Net sales decreased by $662 million to $8,637 million in the nine months ended September 30, 2025 from $9,299 million in the nine months ended September 30, 2024, primarily due to lower sales prices for PVC resin, polyethylene, chlorine and pipe and fittings, and lower sales volumes for PVC resin, epoxy resin, polyethylene, caustic soda, chlorine, and building products, which were partially offset by higher caustic soda and PVC compounds sales prices and pipe and fittings sales volumes.
RESULTS OF OPERATIONS
Third Quarter 2025 Compared with Third Quarter 2024
Net Sales. Net sales decreased by $279 million, or 9%, to $2,838 million in the third quarter of 2025 from $3,117 million in the third quarter of 2024. Average sales prices for the third quarter of 2025 decreased by 5% as compared to the third quarter of 2024 as a result of lower sales prices for many of our products across both segments, including PVC resin, polyethylene and pipe and fittings, which were partially offset by higher PVC compounds sales prices. Sales volumes decreased by 4% in the third quarter of 2025 as compared to the third quarter of 2024 due to lower sales volumes for PVC resin, chlorine, chlorinated derivatives, epoxy resin and building products, which were partially offset by higher pipe and fittings sales volumes.
Gross Profit. Gross profit margin was 8% in the third quarter of 2025 as compared to 16% in the third quarter of 2024. The decrease in gross profit margin was primarily due to lower sales volumes and prices for most of our major products across both segments and higher energy and feedstock costs in the third quarter of 2025, as compared to the third quarter of 2024.
Selling, General and Administrative Expenses. Selling, general and administrative expenses increased by $13 million to $228 million in the third quarter of 2025 from $215 million in the third quarter of 2024. This increase was mainly due to higher contract labor and legal and other consulting costs.
Amortization of Intangibles.Amortization expense in the third quarter of 2025 was consistent with the third quarter of 2024.
Impairment of Goodwill.The impairment of goodwill of $727 million represents a North American Chlorovinyls goodwill impairment charge recognized in the third quarter of 2025, within the Performance and Infrastructure Materials segment.
Restructuring, Transaction and Integration-related Costs. Restructuring, transaction and integration-related costs were $17 million in the third quarter of 2025 compared to $75 million in the third quarter of 2024. The restructuring, transaction and integration-related costs in the third quarter of 2025 primarily consisted of $15 million related to the closure of Pernis facility located in the Netherlands, under the Performance and Essential Materials Segment. The restructuring, transaction and integration-related costs in the third quarter of 2024 related to mothballing of the allyl chloride and epichlorohydrin units located in Pernis facility, which consisted of expenses for environmental remediation and other plant mothballing expenses of approximately $71 million and employee severance and separation expenses of approximately $4 million.
Interest Expense. Interest expense in the third quarter of 2025 was consistent with the third quarter of 2024.
Other Income, Net. Other income, net decreased by $12 million to $32 million in the third quarter of 2025 from $44 million in the third quarter of 2024, primarily due to lower interest income resulting from the lower average cash and cash equivalent balances and lower interest rates in the third quarter of 2025 as compared to the third quarter of 2024.
Income Taxes. The effective income tax rate was 0.4% for the third quarter of 2025 as compared to 35.1% for the third quarter of 2024. The effective tax rate in the third quarter of 2025 was lower compared to the third quarter of 2024 primarily due to the non-deductible goodwill impairment charge associated with the North American Chlorovinyls reporting unit, slightly offset by a lower valuation allowance recorded against Westlake Epoxy Netherlands's net operating loss and the impact of earnings mix across jurisdictions associated with the pre-tax loss in the third quarter of 2025.
Performance and Essential Materials Segment
Net Sales. Net sales for the Performance and Essential Materials segment decreased by $272 million, or 13%, to $1,747 million in the third quarter of 2025 from $2,019 million in the third quarter of 2024. Average sales prices for the Performance and Essential Materials segment decreased by 7% in the third quarter of 2025 as compared to the third quarter of 2024. Lower Performance Materials sales prices were primarily due to lower PVC resin and polyethylene sales prices. Sales volumes for the Performance and Essential Materials segment decreased by 6% in the third quarter of 2025 as compared to the third quarter of 2024, primarily due to lower PVC resin, chlorine, chlorinated derivatives and epoxy resin sales volumes.
Income from Operations. Income from operations for the Performance and Essential Materials segment decreased by $893 million to a loss of $902 million in the third quarter of 2025 from a loss of $9 million in the third quarter of 2024. This decrease in income from operations in the third quarter of 2025, as compared to the third quarter of 2024 was due to lower PVC resin and polyethylene sales prices, lower PVC resin, chlorine, chlorinated derivatives and epoxy resin sales volumes and higher natural gas and feedstock costs in the third quarter of 2025, partially offset by lower impact from fewer unplanned plant outages in the third quarter of 2025 as compared to the third quarter of 2024. This decrease in income from operations was also due to the recognition of a goodwill impairment charge of $727 million related to North American Chlorovinyls and restructuring charges of $15 million in the quarter ended September 30, 2025 related to the closure of Pernis facility located in the Netherlands.
Housing and Infrastructure Products Segment
Net Sales. Net sales for the Housing and Infrastructure Products segment decreased by $7 million, or 1%, to $1,091 million in the third quarter of 2025 from $1,098 million in the third quarter of 2024. Average sales prices for the Housing and Infrastructure Products segment decreased by 1% in the third quarter of 2025 as compared to the third quarter of 2024, primarily due to lower sales prices for pipe and fittings, partially offset by higher PVC compounds sales prices. Sales volumes for the Housing and Infrastructure Products segment was consistent in the third quarter of 2025 with the third quarter of 2024, as higher sales volumes for pipes and fittings was substantially offset by the lower building products sales volumes.
Income from Operations. Income from operations for the Housing and Infrastructure Products segment decreased by $51 million to $151 million in the third quarter of 2025 from $202 million in the third quarter of 2024. This decrease in income from operations in the third quarter of 2025, as compared to the third quarter of 2024, was primarily due to lower sales prices and margins for pipe and fittings and lower sales volumes for our building products, partially offset by higher sales volumes for pipe and fittings.
Nine Months Ended September 30, 2025 Compared with Nine Months Ended September 30, 2024
Net Sales. Net sales decreased by $662 million, or 7%, to $8,637 million in the nine months ended September 30, 2025 from $9,299 million in the nine months ended September 30, 2024. Sales volumes decreased by 4% in the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024, due to lower sales volumes for PVC resin, epoxy resin, polyethylene, caustic soda, chlorine and building products, which were partially offset by higher pipe and fittings sales volumes. Average sales prices for the nine months ended September 30, 2025 decreased by 3% as compared to the nine months ended September 30, 2024 as a result of lower sales prices for PVC resin, polyethylene, chlorine and pipe and fittings, which were partially offset by higher caustic soda and PVC compounds sales prices.
Gross Profit. Gross profit margin was 8% in the nine months ended September 30, 2025 as compared to 18% in the nine months ended September 30, 2024. The decrease in gross profit margin was primarily due to lower sales volumes and prices for most of our products across both segments and higher energy and feedstock costs in the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024.
Selling, General and Administrative Expenses. Selling, general and administrative expenses increased by $28 million to $676 million in the nine months ended September 30, 2025 from $648 million in the nine months ended September 30, 2024. This increase was mainly due to higher legal and other consulting costs and higher technology-related expenses, partially offset by lower payroll and related benefit costs.
Amortization of Intangibles.Amortization expense in the nine months ended September 30, 2025 was consistent with the nine months ended September 30, 2024.
Impairment of Goodwill.The impairment of $727 million represents a North American Chlorovinyls goodwill impairment charge recognized within the Performance and Infrastructure Materials segment in nine months ended September 30, 2025.
Restructuring, Transaction and Integration-related Costs. Restructuring, transaction and integration-related costs were $139 million in the nine months ended September 30, 2025 compared to $83 million in the nine months ended September 30, 2024. The costs in the nine months ended September 30, 2025 primarily consisted of $130 million related to the closure of Pernis facility located in the Netherlands and $9 million related to the cessation of operations of the PVC resin unit at the Suzhou Huasu Plastics plant located in China, under the Performance and Essential Materials Segment.
Interest Expense. Interest expense in the nine months ended September 30, 2025 was comparable to the nine months ended September 30, 2024.
Other Income, Net. Other income, net decreased by $60 million to $93 million in the nine months ended September 30, 2025 from $153 million in the nine months ended September 30, 2024, primarily due to lower interest income resulting from the lower average cash and cash equivalent balances and lower interest rates in the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024 and also due to the recognition of higher insurance recoveries in the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2025.
Income Taxes. The effective income tax rate was (0.4)% for the nine months ended September 30, 2025 as compared to 25.4% for the nine months ended September 30, 2024. The effective tax rate in the nine months ended September 30, 2025 was lower compared to the nine months ended September 30, 2024 primarily due to the non-deductible goodwill impairment charge associated with the North American Chlorovinyls reporting unit, a higher valuation allowance recorded against Westlake Epoxy Netherlands's net operating loss and the impact of earnings mix across jurisdictions associated with the pre-tax loss for the nine months ended September 30, 2025.
Performance and Essential Materials Segment
Net Sales. Net sales for the Performance and Essential Materials segment decreased by $573 million, or 10%, to $5,390 million in the nine months ended September 30, 2025 from $5,963 million in the nine months ended September 30, 2024. Average sales prices for the Performance and Essential Materials segment decreased by 3% in the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024. Sales volumes for the Performance and Essential Materials segment decreased by 6% in the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024, primarily due to lower polyethylene, caustic soda and chlorine sales volumes. Lower Performance Materials sales prices were primarily due to lower PVC resin and epoxy resin sales prices. Lower Essential Materials sales prices for chlorine was offset by higher caustic soda sales prices.
Income from Operations. Income from operations for the Performance and Essential Materials segment decreased by $1,553 million to a loss of $1,383 million in the nine months ended September 30, 2025 from income of $170 million in the nine months ended September 30, 2024. This decrease in income from operations in the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024, was due to lower sales prices for most of our major products in this segment, particularly PVC resin, polyethylene, chlorine, lower sales volumes for PVC resin, epoxy resin, polyethylene, caustic soda and chlorine, the impact of Petro 1 and other planned turnaround activities, offset by the impact of fewer unplanned plant outages in the nine months ended September 30, 2025, and higher natural gas and feedstock costs. This decrease in income from operations was also due to the recognition of a North American Chlorovinyls goodwill impairment charge of $727 million in the quarter ended September 30, 2025, the recognition of restructuring charges of $139 million in the nine months ended September 30, 2025 primarily related to the closure of Pernis facility. These decreases were partially offset by higher sales prices for caustic soda.
Housing and Infrastructure Products Segment
Net Sales. Net sales for the Housing and Infrastructure Products segment decreased by $89 million, or 3%, to $3,247 million in the nine months ended September 30, 2025 from $3,336 million in the nine months ended September 30, 2024. Average sales prices for the Housing and Infrastructure Products segment decreased by 2% in the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024, primarily due to lower sales prices for pipe and fittings, partially offset by higher PVC compounds sales prices. Sales volumes for the Housing and Infrastructure Products segment decreased by 1% in the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024 primarily due to lower building products sales volumes, partially offset by higher pipe and fittings sales volumes.
Income from Operations. Income from operations for the Housing and Infrastructure Products segment decreased by $157 million to an income of $521 million in the nine months ended September 30, 2025 from income of $678 million in the nine months ended September 30, 2024. This decrease in income from operations in the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024, was primarily due to lower sales volumes, particularly for building products, and lower sales prices for pipe and fittings, partially offset by higher pipe and fittings sales volumes and higher PVC compounds sales prices.
CASH FLOW DISCUSSION FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024
Cash Flows
Operating Activities
Operating activities provided cash of $240 million in the first nine months of 2025 compared to cash provided by operating activities of $880 million in the first nine months of 2024. The $640 million decrease in cash flows from operating activities was mainly due to lower prices and demand for most of our products and cash used in connection with the turnaround of the Petro 1 ethylene facility in Lake Charles, partially offset by a favorable change in working capital in the nine months ended September 30, 2025. The favorable change in the first nine months of 2025 was substantially driven by the higher accrued and other liabilities which were due to the accrual of Pernis facility closure costs partially offset by the cash outflows related to a payment to Triad Hunter, LLC, which was accrued previously in 2023, to resolve litigation in the nine months ended September 30, 2025 and lower inventory levels during the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024.
Investing Activities
Net cash used for investing activities in the first nine months of 2025 was $968 million as compared to net cash used for investing activities of $736 million in the first nine months of 2024. The increase in cash used for investing activities in the first nine months of 2025 as compared to the first nine months of 2024 was primarily related to the purchase of $198 million of investments comprising corporate bonds and U.S. government debt securities, among others. Capital expenditures were $754 million in the first nine months of 2025 as compared to $723 million in the first nine months of 2024.
Financing Activities
Net cash used for financing activities during the first nine months of 2025 was $285 million as compared to net cash used for financing activities of $517 million in the first nine months of 2024. The financing activities during the first nine months of 2025 included the payment of $204 million of cash dividends, the repurchase of $30 million of our outstanding common stock for treasury and $33 million of cash distributions to noncontrolling interests. The financing activities in the first nine months of 2024 included the redemption of $300 million aggregate principal amount of the 0.875% senior notes due 2024, $197 million payment of cash dividends and $31 million of cash distributions to noncontrolling interests.
LIQUIDITY AND CAPITAL RESOURCES
Liquidity and Financing Arrangements
Our principal sources of liquidity are from cash and cash equivalents, available-for-sale securities, cash from operations, short-term borrowings under our credit agreement and our long-term financing.
In November 2014, our Board of Directors authorized a $250 million stock repurchase program (the "2014 Program"). In November 2015, our Board of Directors approved the expansion of the 2014 Program by an additional $150 million. In August 2018, our Board of Directors approved the further expansion of the existing 2014 Program by an additional $150 million. In August 2022, our Board of Directors approved the further expansion of the existing 2014 Program by an additional $500 million. There were no repurchases of common stock under the 2014 Program during the three months ended September 30, 2025. As of September 30, 2025, we had repurchased 9,482,402 shares of our common stock for an aggregate purchase price of approximately $664 million under the 2014 Program. Purchases under the 2014 Program may be made either through the open market or in privately negotiated transactions. Decisions regarding the amount and the timing of purchases under the 2014 Program will be influenced by our cash on hand, our cash flows from operations, general market conditions and other factors. The 2014 Program may be discontinued by our Board of Directors at any time.
On October 4, 2018, Westlake Chemical Partners LP ("Westlake Partners") and Westlake Chemical Partners GP LLC, the general partner of Westlake Partners, entered into an Equity Distribution Agreement with UBS Securities LLC, Barclays Capital Inc., Citigroup Global Markets Inc., Deutsche Bank Securities Inc., RBC Capital Markets, LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Wells Fargo Securities, LLC to offer and sell Westlake Partners common units, from time to time, up to an aggregate offering amount of $50 million. This Equity Distribution Agreement was amended on February 28, 2020 to reference a new shelf registration and subsequent renewals thereof for utilization under this agreement. No common units have been issued under this program as of September 30, 2025.
We believe that our sources of liquidity as described above are adequate to fund our normal operations and ongoing capital expenditures and turnaround activities. We commenced the planned maintenance turnaround at our Petro 1 ethylene facility in the first quarter of 2025, which concluded in April 2025. Funding of any potential large expansions such as our recent acquisitions or potential future acquisitions or the redemption of debt may likely necessitate, and therefore depend on, our ability to obtain additional financing in the future. We may not be able to access additional liquidity at favorable interest rates due to volatility of the commercial credit markets.
Cash and Cash Equivalents and Available-For-Sale Securities
As of September 30, 2025, our cash and cash equivalents totaled $1,927 million.
As of September 30, 2025, our available-for-sale securities totaled $198 million. See Note 2 to the unaudited consolidated financial statements appearing elsewhere in this Form 10-Q for a discussion of our available-for-sale securities.
In addition to our cash and cash equivalents, our credit agreement is available to provide liquidity as needed, as described under "Debt" below.
Debt
As of September 30, 2025, the carrying value of our indebtedness totaled $4,656 million. See Note 7 to the unaudited consolidated financial statements appearing elsewhere in this Form 10-Q for a discussion of our long-term indebtedness.
Our ability to make payments on our indebtedness and to fund planned capital expenditure will depend on our ability to generate cash in the future, which is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control. Based on our current level of operations and unless we were to undertake a new expansion or large acquisition, we believe our cash flows from operations, available cash and available borrowings under our credit agreement will be adequate to meet our normal operating needs for the foreseeable future. In order to reduce future cash interest payments, as well as future amounts due at maturity or upon redemption, we or our affiliates may from time to time seek to redeem, repurchase or otherwise acquire our outstanding debt securities through open market purchases, privately negotiated transactions, tender offers or pursuant to the terms of such securities. Such acquisitions, if any, will be upon such terms and at such prices as we may determine, and will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved in any such transactions, individually or in the aggregate, may be material.
Our long-term debt consisted of the following as of September 30, 2025:
|
Principal Amount
(in millions of dollars)
|
Debt Issuance Date | Maturity Date |
Par Call Date
|
|||||||||||||||||||||||
|
3.60% senior notes due 2026 (the "3.60% 2026 Senior Notes")
|
$ | 750 | August 2016 | August 2026 | May 15, 2026 | |||||||||||||||||||||
| Loan related to tax-exempt waste disposal revenue bonds due 2027 | 11 | December 1997 | December 2027 | |||||||||||||||||||||||
|
1.625% €700 million senior notes due 2029 (the "1.625% 2029 Senior Notes")
|
822 | July 2019 | July 2029 |
April 17, 2029
|
||||||||||||||||||||||
|
3.375% senior notes due 2030 (the "3.375% 2030 Senior Notes")
|
300 | June 2020 | June 2030 | March 15, 2030 | ||||||||||||||||||||||
|
3.50% senior notes due 2032 (the "3.50% 2032 tax-exempt GO Zone Refunding Senior Notes")
|
250 | November 2017 | November 2032 | November 1, 2027 | ||||||||||||||||||||||
|
2.875% senior notes due 2041 (the "2.875% 2041 Senior Notes")
|
350 | August 2021 | August 2041 |
February 15, 2041
|
||||||||||||||||||||||
|
5.00% senior notes due 2046 (the "5.00% 2046 Senior Notes")
|
700 | August 2016 | August 2046 |
February 15, 2046
|
||||||||||||||||||||||
|
4.375% senior notes due 2047 (the "4.375% 2047 Senior Notes")
|
500 | November 2017 | November 2047 |
May 15, 2047
|
||||||||||||||||||||||
|
3.125% senior notes due 2051 (the "3.125% 2051 Senior Notes")
|
600 | August 2021 | August 2051 |
February 15, 2051
|
||||||||||||||||||||||
|
3.375% senior notes due 2061 (the "3.375% 2061 Senior Notes")
|
450 | August 2021 | August 2061 |
February 15, 2061
|
||||||||||||||||||||||
| Term loan 2026 (the "2026 Term Loan") | 3 | March 2021 | March 2026 | |||||||||||||||||||||||
| Total long-term debt | $ | 4,736 | ||||||||||||||||||||||||
The holders of the 3.60% 2026 Senior Notes, the 1.625% 2029 Senior Notes, the 3.375% 2030 Senior Notes, the 3.50% 2032 tax-exempt GO Zone Refunding Senior Notes, the 2.875% 2041 Senior Notes, the 5.00% 2046 Senior Notes, the 4.375% 2047 Senior Notes, the 3.125% 2051 Senior Notes and the 3.375% 2061 Senior Notes may require us to repurchase the notes at a price equal to 101% of their principal amount, plus accrued and unpaid interest to, but not including, the date of repurchase, upon the occurrence of both a "change of control" and, within 60 days of such change of control, a "below investment grade rating event" (as such terms are defined in the respective indentures governing these notes).
The indenture governing the 3.60% 2026 Senior Notes, the 1.625% 2029 Senior Notes, the 3.375% 2030 Senior Notes, the 3.50% 2032 tax-exempt GO Zone Refunding Senior Notes, the 2.875% 2041 Senior Notes, the 5.00% 2046 Senior Notes, the 4.375% 2047 Senior Notes, the 3.125% 2051 Senior Notes, and the 3.375% 2061 Senior Notes contains customary events of default and covenants that, among other things and subject to certain exceptions, restrict us and certain of our subsidiaries' ability to (1) incur certain secured indebtedness, (2) engage in certain sale and leaseback transactions and (3) consolidate, merge or transfer all or substantially all of our assets.
As of September 30, 2025,we were in compliance with all of our long-term debt covenants.
Credit Agreement
On June 9, 2022, we entered into a new $1.5 billion revolving credit facility that is scheduled to mature on June 9, 2027 (the "Credit Agreement") and, in connection therewith, terminated our then existing revolving credit agreement. The Credit Agreement bears interest at either (a) Adjusted Term SOFR (as defined in the Credit Agreement) plus a margin ranging from 1.00% to 1.625% per annum or (b) Alternate Base Rate (as defined in the Credit Agreement) plus a margin ranging from 0.00% to 0.625% per annum, in each case depending on the credit rating of the Company. The Credit Agreement contains certain affirmative and negative covenants, including a quarterly total leverage ratio financial maintenance covenant. As of September 30, 2025, we were in compliance with the total leverage ratio financial maintenance covenant.
Westlake Chemical Partners LP Credit Arrangements
Our subsidiary, Westlake Chemical Finance Corporation, is the lender party to a $600 million revolving credit facility with Westlake Chemical Partners LP ("Westlake Partners") (the "MLP Revolver") that is scheduled to mature on July 12, 2027. As of September 30, 2025, outstanding borrowings under the credit facility totaled $377 million and bore interest at Secured Overnight Financing Rate, as administered by the Federal Reserve Bank of New York ("SOFR") plus the Applicable Margin plus a 0.10% credit spread adjustment. On July 12, 2022, Westlake Partners entered into the Fourth Amendment (the "MLP Revolver Amendment") to the MLP Revolver. The MLP Revolver Amendment, among other things, extended the maturity date to July 12, 2027 and provided for the replacement of LIBOR with SOFR. Borrowings under the MLP Revolver now bear interest at a variable rate of either (a) SOFR plus the Applicable Margin plus a 0.10% credit spread adjustment or, if SOFR is no longer available, (b) the Alternate Base Rate plus the Applicable Margin minus 1.0%. The Applicable Margin under the MLP Revolver varies between 1.75% and 2.75%, depending on the Partnership's Consolidated Leverage Ratio.
Our subsidiary, Westlake Polymers LLC, is the administrative agent to a $600 million revolving credit facility with Westlake Chemical OpCo LP ("OpCo") (the "OpCo Revolver") that is scheduled to mature on July 12, 2027. As ofSeptember 30, 2025, outstanding borrowings under the credit facility totaled $23 million and bore interest at SOFR plus the Applicable Margin of 1.75% plus a 0.10% credit spread adjustment. On July 12, 2022, OpCo entered into the Second Amendment (the "OpCo Revolver Amendment") to the OpCo Revolver. The OpCo Revolver Amendment, among other things, extended the maturity date to July 12, 2027, and provided for the replacement of LIBOR with SOFR. Borrowings under the OpCo Revolver now bear interest at a variable rate of either (a) SOFR plus the Applicable Margin plus a 0.10% credit spread adjustment or, if SOFR is no longer available, (b) the Alternate Base Rate plus the Applicable Margin minus 1.0%. The Applicable Margin under the OpCo Revolver is 1.75%.
We consolidate Westlake Partners and OpCo for financial reporting purposes as we have a controlling financial interest. As such, the revolving credit facilities described above between our subsidiaries and Westlake Partners and OpCo are eliminated from the financial statements upon consolidation.
Off-Balance Sheet Arrangements
None.
Recent Accounting Pronouncements
See Note 1 to the consolidated financial statements included in Item 1 of this Form 10-Q for a full description of recent accounting pronouncements, including expected date of adoption and estimated effect on results of operations and financial condition.
FORWARD-LOOKING STATEMENTS
The Private Securities Litigation Reform Act of 1995 provides safe harbor provisions for forward-looking information. Certain of the statements contained in this report are forward-looking statements. All statements, other than statements of historical facts, included in this report that address activities, events or developments that we expect, project, believe or anticipate will or may occur in the future are forward-looking statements. Forward-looking statements can be identified by the use of words such as "believes," "intends," "may," "should," "could," "anticipates," "expected" or comparable terminology, or by discussions of strategies or trends. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we cannot give any assurances that these expectations will prove to be correct. Forward-looking statements relate to matters such as:
•the ultimate timing, outcome and results of integrating the operations of any acquisitions and the ultimate outcome of our operating efficiencies applied to the products and services; the effects of any such acquisition, including the combined company's future financial condition, results of operations, strategy and plans; and expected synergies and other benefits from any such acquisition and our ability to realize such synergies and other benefits;
•recoverability of the carrying value of our long-lived assets, including tangible assets and intangible assets with finite lives, and the fair value of our reporting units with goodwill;
•future operating rates, margins, cash flows and demand for our products;
•industry market outlook, including the price of crude oil, natural gas, ethane, housing starts and repair and remodeling activity;
•macroeconomic outlook, including elevated interest rates, inflation and possible recession;
•widespread outbreak of an illness or any other communicable disease, or any other public health crisis;
•production capacities;
•the impact of ongoing conflicts in the Middle East and between Russia and Ukraine;
•currency devaluation;
•our ability to borrow under our credit agreement;
•our ability to meet our liquidity needs;
•our ability to meet debt obligations under our debt instruments;
•our intended quarterly dividends;
•future capacity additions and expansions in the industries in which we compete;
•timing, funding and results of capital projects;
•pension plan obligations, funding requirements and investment policies;
•compliance with present and future environmental regulations and costs associated with environmentally related penalties, capital expenditures, remedial actions and proceedings, including any new laws, regulations or treaties that may come into force to limit or control carbon dioxide and other greenhouse gas emissions or to address other issues of climate change;
•recovery of losses under our insurance policies;
•effects of pending legal proceedings and settlements;
•timing of and amount of capital expenditures;
•increased costs and other effects of tariffs imposed by the U.S. government, and any effects on trading relationships among the United States and other countries; and
•results of the closure of the Pernis, Netherlands facility and cessation of operations of the PVC resin unit at the Suzhou Huasu Plastics plant located in China (such as timing and amount of recognition of related costs and our expectations regarding our financial performance following such closure and cessation of operations).
We have based these statements on assumptions and analyses in light of our experience and perception of historical trends, current conditions, expected future developments and other factors we believe were appropriate in the circumstances when the statements were made. Forward-looking statements by their nature involve substantial risks and uncertainties that could significantly impact expected results, and actual future results could differ materially from those described in such statements. While it is not possible to identify all factors, we continue to face many risks and uncertainties. Among the factors that could cause actual future results to differ materially are the risks and uncertainties discussed under "Risk Factors" in the 2024 Form 10-K and those described from time to time in our other filings with the SEC including, but not limited to, the following:
•general economic and business conditions, including inflation, interest rates and possible recession;
•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 conflict in the Middle East, Russia and Ukraine and elsewhere;
•uncertainties associated with pandemic infectious diseases;
•uncertainties associated with climate change;
•the potential impact on demand for ethylene, polyethylene and polyvinyl chloride due to initiatives such as recycling and customers seeking alternatives to polymers;
•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, delays in turnaround activities, labor difficulties, transportation interruptions, spills and releases and other environmental risks);
•changes in laws or regulations, including trade policies and tariffs imposed on or by foreign jurisdictions;
•disruptions in global trade, including as a result of tariffs, trade restrictions, retaliatory trade measures or the effect of such actions on trading relationships between the United States and other countries;
•the effects of government shutdowns;
•technological developments;
•information systems failures and cyberattacks;
•foreign currency exchange risks;
•our ability to implement our business strategies; and
•creditworthiness of our customers.
Many of such factors are beyond our ability to control or predict. Any of the 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 or projecting any future results based on such statements or present or prior earnings levels. 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.
Westlake Corporation published this content on October 31, 2025, and is solely responsible for the information contained herein. Distributed via Edgar on October 31, 2025 at 19:03 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]