Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes¨No¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange ~~Act.~~Act (Check one):

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes ¨ No x

The number of shares outstanding of the registrant’s sole class of common stock, as of ~~October 31, 2008,~~April 28, 2009 was ~~65,655,133.~~65,924,543.


	September 30, 2008			December 31, 2007			March 31, 2009			December 31, 2008
	(in thousands of dollars, except par values and share amounts)						(in thousands of dollars, except par values and share amounts)
ASSETS
Current assets
Cash and cash equivalents	$	22,452		$	24,914		$	179,343		$	90,239
Accounts receivable, net		562,804			507,463			281,011			347,323
Inventories, net		491,185			527,871			283,873			327,967
Prepaid expenses and other current assets		13,593			14,232			10,294			6,838
Deferred income taxes		17,576			17,705			26,617			26,622

Total current assets		1,107,610			1,092,185			781,138			798,989
Property, plant and equipment, net		1,181,572			1,126,212			1,210,748			1,197,452
Equity investment		32,009			29,486			31,870			30,107
Restricted cash		146,695			199,450			120,763			134,432
Other assets, net		128,925			122,002			143,701			126,009

Total assets	$	2,596,811		$	2,569,335		$	2,288,220		$	2,286,989


LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	275,896		$	314,951		$	132,904		$	112,833
Accrued liabilities		115,893			126,311			79,255			99,455

Total current liabilities		391,789			441,262			212,159			212,288
Long-term debt		515,948			511,414			510,339			510,319
Deferred income taxes		291,177			287,965			289,397			280,486
Other liabilities		39,003			42,024			45,217			44,836

Total liabilities		1,237,917			1,282,665			1,057,112			1,047,929
Commitments and Contingencies (Notes 12 and 15)
Commitments and Contingencies (Notes 13 and 16)
Stockholders’ equity
Preferred stock, $0.01 par value, 50,000,000 shares authorized; no shares issued and outstanding		—			—			—			—
Common stock, $0.01 par value, 150,000,000 shares authorized; 65,655,133 and 65,487,119 shares issued and outstanding in 2008 and 2007, respectively		657			655
Common stock, $0.01 par value, 150,000,000 shares authorized; 65,924,043 and 65,658,142 shares issued and outstanding in 2009 and 2008, respectively								659			657
Additional paid-in capital		434,531			431,197			436,902			435,581
Retained earnings		927,886			857,872			805,337			814,873
Accumulated other comprehensive income
Benefits liability, net of tax		(8,576	)		(9,234	)		(12,989	)		(13,339	)
Cumulative translation adjustment		4,396			6,180			1,199			1,288

Total stockholders’ equity		1,358,894			1,286,670			1,231,108			1,239,060

Total liabilities and stockholders’ equity	$	2,596,811		$	2,569,335		$	2,288,220		$	2,286,989

The accompanying notes are an integral part of these consolidated financial statements.


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended March 31,
	2008			2007			2008			2007			2009			2008
	(in thousands of dollars, except per share data)												(in thousands of dollars, except per share data and share amounts)
Net sales	$	1,073,735		$	840,160		$	3,095,245		$	2,341,626		$	488,251		$	915,061
Cost of sales		1,001,948			754,100			2,890,294			2,113,246			468,187			878,357

Gross profit		71,787			86,060			204,951			228,380			20,064			36,704
Selling, general and administrative expenses		22,999			26,305			68,728			73,680			20,967			22,845

Income from operations		48,788			59,755			136,223			154,700
(Loss) income from operations														(903	)		13,859
Other income (expense)
Interest expense		(8,093	)		(4,692	)		(25,908	)		(12,780	)		(8,596	)		(8,528	)
Other income, net		1,267			305			5,874			1,004			2,477			2,408

Income before income taxes		41,962			55,368			116,189			142,924
Provision for income taxes		14,598			17,027			36,165			47,021
(Loss) income before income taxes														(7,022	)		7,739
(Benefit from) provision for income taxes														(947	)		2,352

Net income	$	27,364		$	38,341		$	80,024		$	95,903
Net (loss) income													$	(6,075	)	$	5,387

Basic and diluted earnings per share	$	0.42		$	0.59		$	1.23		$	1.47
Basic and diluted (loss) earnings per share													$	(0.09	)	$	0.08

Weighted average shares outstanding:
Basic		65,275,499			65,238,376			65,266,645			65,227,147			65,797,273			65,561,552
Diluted		65,341,150			65,325,668			65,309,045			65,325,020			65,797,273			65,587,292

The accompanying notes are an integral part of these consolidated financial statements.


	Nine Months Ended September 30,						Three Months Ended March 31,
	2008			2007			2009			2008
	(in thousands of dollars)						(in thousands of dollars)
Cash flows from operating activities
Net income	$	80,024		$	95,903
Adjustments to reconcile net income to net cash provided by operating activities:
Net (loss) income							$	(6,075	)	$	5,387
Adjustments to reconcile net (loss) income to net cash provided by (used for) operating activities:
Depreciation and amortization		81,527			77,425			28,987			26,001
Provision for bad debts		2,057			226
(Recovery of) provision for bad debts								(90	)		84
Amortization of debt issue costs		662			567			318			219
Stock-based compensation expense		3,126			2,108			1,309			947
Loss from disposition of fixed assets		4,479			187			293			2,385
Deferred income taxes		3,096			15,997			8,105			1,163
Equity in income of joint venture		(2,523	)		(1,895	)		(1,763	)		(1,068	)
Changes in operating assets and liabilities
Accounts receivable		(57,604	)		(129,327	)		66,402			42,790
Inventories		36,686			(10,123	)		44,094			(4,180	)
Prepaid expenses and other current assets		639			8,870			(3,456	)		3,244
Accounts payable		(40,785	)		29,310			20,818			(54,893	)
Accrued liabilities		(10,945	)		17,532			(19,873	)		(35,658	)
Other, net		(23,853	)		(11,779	)		(18,766	)		(14,675	)

Net cash provided by operating activities		76,586			95,001
Net cash provided by (used for) operating activities								120,303			(28,254	)


Cash flows from investing activities
Additions to property, plant and equipment		(127,163	)		(86,295	)		(32,792	)		(42,984	)
Acquisition of business								(6,297	)		—
Proceeds from disposition of assets		573			33			—			214
Settlements of derivative instruments		344			3,339			(1,352	)		319
Addition to equity investment		—			(308	)
Settlement of acquisition purchase price		—			8,043

Net cash used for investing activities		(126,246	)		(75,188	)		(40,441	)		(42,451	)


Cash flows from financing activities
Proceeds from the exercise of stock options		208			303			14			—
Dividends paid		(10,010	)		(8,503	)		(3,461	)		(3,282	)
Proceeds from borrowings		851,635			287,884			—			300,800
Repayment of borrowings		(847,162	)		(212,884	)		—			(257,427	)
Utilization of restricted cash		55,045			—			14,026			13,546
Capitalized debt issuance costs		(2,518	)		—			(1,337	)		—

Net cash provided by financing activities		47,198			66,800			9,242			53,637

Net (decrease) increase in cash and cash equivalents		(2,462	)		86,613
Net increase (decrease) in cash and cash equivalents								89,104			(17,068	)
Cash and cash equivalents at beginning of period		24,914			52,646			90,239			24,914

Cash and cash equivalents at end of period	$	22,452		$	139,259		$	179,343		$	7,846

The accompanying notes are an integral part of these consolidated financial statements.

The accompanying unaudited consolidated interim financial statements were prepared in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim periods. Accordingly, certain information and footnotes required for complete financial statements under generally accepted accounting principles in the United States have not been included. These interim consolidated financial statements should be read in conjunction with the December 31, ~~2007~~2008 financial statements and notes thereto of Westlake Chemical Corporation (the “Company”) included in the annual report on Form 10-K for the fiscal year ended December 31, ~~2007,~~2008, filed with the SEC on February ~~20, 2008. The accompanying~~19, 2009. These financial statements have been prepared in conformity with the accounting principles and practices as disclosed in the notes to the consolidated financial statements of the Company for the fiscal year ended December 31, ~~2007.~~2008.

In the opinion of the Company’s management, the accompanying unaudited consolidated interim financial statements reflect all adjustments (consisting only of normal recurring adjustments) that are necessary for a fair statement of the Company’s financial position as of ~~September 30, 2008,~~March 31, 2009, its results of operations for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2009 and 2008 ~~and 2007~~ and the changes in its cash position for the ~~nine~~three months ended ~~September 30, 2008~~March 31, 2009 and ~~2007.~~2008.

Results of operations and changes in cash position for the interim periods presented are not necessarily indicative of the results that will be realized for the year ending December 31, ~~2008~~2009 or any other interim period. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities. Actual results could differ from those estimates.

In September 2006, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting ~~Standard~~Standards (“SFAS”) No. 157, “Fair Value Measurements” (“SFAS 157”). SFAS 157 defines fair value, establishes a framework for measuring fair value, and expands disclosure about fair value measurements. The Company adopted SFAS 157 as of January 1, 2008, ~~with the exception of the application of the statement to non-recurring nonfinancial assets and nonfinancial liabilities. Non-recurring~~except for nonfinancial assets and nonfinancial liabilities ~~for which~~that are recognized on a nonrecurring basis, and the Company has not applied the provisions of SFAS 157 include those measured at fair value in goodwill impairment testing, indefinite lived intangible assets measured at fair value for impairment testing, asset retirement obligations initially measured at fair value, and those initially measured at fair value in a business combination. The adoption of SFAS 157 ~~has~~did not had a material impact on the Company’s financial position or results of operations. In addition, the adoption of this statement with respect to non-recurring nonfinancial assets and liabilities in the future is not expected to have a material impact on the Company’s financial position or results of operations.

~~Relative to SFAS 157,~~In February 2008, the FASB issued FASB Staff ~~Positions (FSP) 157-1 and 157-2. FSP 157-1 amends SFAS~~Position (“FSP”) FAS 157-2, “Effective Date of FASB Statement No. 157, ~~to exclude SFAS No. 13, “Accounting for Leases” (“SFAS 13”), and its related interpretive accounting pronouncements that address leasing transactions, while FSP 157-2 delays~~”which delayed the effective date of ~~the application of~~ SFAS 157 ~~to fiscal years beginning after November 15, 2008~~ for all nonfinancial assets and nonfinancial liabilities that are recognized or disclosed at fair value in the financial statements on a nonrecurring basis to November 15, 2008. The Company adopted SFAS 157 with respect to nonfinancial assets and nonfinancial liabilities that are recognized on a nonrecurring basis as ~~discussed above.~~of January 1, 2009, and such adoption did not have a material impact on the Company’s financial position or results of operations.

In December 2007, the FASB issued SFAS No. 141 (revised 2007), “Business Combinations” (“SFAS 141R”), which replaces SFAS 141, “Business Combinations” (“SFAS 141”). SFAS 141R retains the fundamental requirements in SFAS 141 that the purchase method of accounting be used for all business combinations. This statement further establishes principals and requirements for how the acquiring entity recognizes and measures in its financial statements the identifiable assets acquired, including goodwill, the liabilities assumed, and any noncontrolling interest in the acquiree. SFAS 141R also determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. SFAS 141R applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. The Company adopted SFAS 141R as of January 1, 2009.

In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements—an amendment of ARB No. 51” (“SFAS 160”). SFAS 160 addresses the accounting and reporting for entities that consolidate a noncontrolling interest, sometimes called a minority interest. The Company adopted SFAS 160 as of January 1, 2009. This statement does not have any impact on the Company’s consolidated financial statements as there are no noncontrolling interests in the Company’s consolidated subsidiaries.

In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging ~~Activities—an~~Activities-an amendment of FASB Statement No. 133” (“SFAS 161”). This statement does not change the accounting for derivatives but ~~will require~~requires enhanced disclosures about derivative strategies and accounting practices. ~~SFAS 161 is effective for fiscal years beginning after January 15, 2008, and the~~The Company ~~will comply~~has complied with ~~any~~ necessary disclosure requirements beginning with the ~~2009~~ interim financial statements included in this Quarterly Report on Form 10-Q. See Note 7 to the consolidated financial statements.

~~Accounts receivable consist~~ In June 2008, the FASB issued FSP EITF 03-6-1, “Determining Whether Instruments Granted In Share-Based Payment Transactions Are Participating Securities” (“FSP EITF 03-6-1”). This FSP addresses whether instruments, such as the Company’s restricted stock awards, are participating securities prior to vesting for inclusion in the computation of ~~the following:~~earnings per share. The

guidance in this FSP concludes that unvested share-based payment awards that contain nonforfeitable rights to dividends should be included in the computation of earnings per share. The Company’s unvested restricted stock awards contain rights to dividends, so this FSP applies to the Company’s earnings per share computation. This FSP is effective for financial statements issued for fiscal years beginning after December 15, 2008 and interim periods within those years. As a result, the Company has amended its computation of weighted average common shares for purposes of its basic and diluted earnings per share calculations in the interim financial statements included in this Quarterly Report on Form 10-Q. The earnings per share calculation for the three months ended March 31, 2008 has also been amended to reflect the new computation, but the change in the calculation was insignificant and did not change the originally reported earnings per basic and diluted share of $0.08 for the three months ended March 31, 2008.

In December 2008, the FASB issued FSP FAS 132(R)-1, “Employers Disclosures about Postretirement Benefit Plan Assets” (“FSP FAS 132(R)-1”), which provides guidance on an employer’s disclosures about plan assets of a defined benefit pension or other postretirement plans. This would require additional disclosures about investment policies and strategies, the reporting of fair value by asset category and other information about fair value measurements. FSP FAS 132(R)-1 is effective January 1, 2009 and early application is permitted. Upon initial application, the provisions of FSP FAS 132(R)-1 are not required for earlier periods that are presented for comparative purposes. We will expand our disclosures in accordance with FSP FAS 132(R)-1 in our annual report on Form 10-K for the year ending December 31, 2009; however, the adoption of this standard is not expected to have a significant impact on our consolidated results of operations, financial position or cash flows.

In April 2009, the FASB issued FSP FAS 107-1 and Accounting Principles Board (“APB”) Opinion 28-1, “Interim Disclosures about Fair Value of Financial Instruments” (“FSP FAS 107-1 and APB 28-1”). This FSP amends SFAS 107, “Fair Value of Financial Instruments”, to require disclosures about fair value of financial instruments for interim reporting periods in addition to the required disclosures in annual financial statements. This FSP also amends APB Opinion 28, “Interim Financial Reporting”, to require those disclosures in summarized financial information at interim reporting periods. FSP FAS 107-1 and APB 28-1 is effective for interim reporting periods ending after June 15, 2009.


	September 30, 2008			December 31, 2007			March 31, 2009			December 31, 2008
Finished products	$	296,974		$	332,882		$	149,096		$	173,982
Feedstock, additives and chemicals		160,501			164,832			98,996			119,881
Materials and supplies		41,070			38,058			43,566			42,415

		498,545			535,772			291,658			336,278
Allowance for inventory obsolescence		(7,360	)		(7,901	)		(7,785	)		(8,311	)

Inventories, net	$	491,185		$	527,871		$	283,873		$	327,967

Depreciation expense on property, plant and equipment of ~~$23,218~~$24,061 and ~~$22,700~~$21,954 is included in cost of sales in the consolidated statements of operations for the three months ended ~~September 30,~~March 31, 2009 and 2008, ~~and 2007, respectively, and $67,605 and $63,336 is included for the nine months ended September 30, 2008 and 2007,~~ respectively.

Amortization expense on other assets of ~~$5,155~~$5,244 and ~~$4,198~~$4,266 is included in the consolidated statements of operations for the three months ended ~~September 30,~~March 31, 2009 and 2008, ~~and 2007, respectively, and $14,584 and $14,656 is included for the nine months ended September 30, 2008 and 2007,~~ respectively.

Under the Westlake Chemical Corporation 2004 Omnibus Incentive Plan (the “2004 Plan”), all employees and ~~non-employee~~nonemployee directors of the Company, as well as certain individuals who have agreed to become the Company’s employees, are eligible for awards. Shares of common stock may be issued as authorized in the 2004 Plan. At the discretion of the administrator of the 2004 Plan, employees and non-employee directors may be granted awards in the form of stock options, stock appreciation rights, stock awards or cash awards (any of which may be a performance award). The Company utilizes the fair value method to account for these awards, and the total compensation expense related to the 2004 Plan was ~~$1,050~~$1,309 and ~~$721~~$947 for the three months ended ~~September 30,~~March 31, 2009 and 2008, ~~and 2007, respectively, and $3,126 and $2,108 for the nine months ended September 30, 2008 and 2007,~~ respectively.

Option activity and changes during the ~~nine~~three months ended ~~September 30, 2008~~March 31, 2009 were as follows:


	Options		Weighted Average Exercise Price		Weighted Average Remaining Term (Years)	Aggregate Intrinsic Value		Options		Weighted Average Exercise Price		Weighted Average Remaining Term (Years)	Aggregate Intrinsic Value
Outstanding at December 31, 2007	677,243		$	26.43
Outstanding at December 31, 2008								910,329		$	24.72
Granted	259,021			19.40				493,540			14.24
Exercised	(14,389	)		14.50				(500	)		14.50
Cancelled	(9,975	)		18.81				(642	)		25.24

Outstanding at September 30, 2008	911,900		$	24.70	8.0	$	1,556
Outstanding at March 31, 2009								1,402,727		$	21.03	8.4	$	217

Exercisable at September 30, 2008	280,776		$	20.52	6.5	$	1,134
Exercisable at March 31, 2009								398,732		$	21.54	6.7	$	22

For options outstanding at ~~September 30, 2008,~~March 31, 2009, the options had the following range of exercise prices:

The aggregate intrinsic value in the table above represents the total pretax intrinsic value (the difference between the Company’s closing stock price on the last trading day of the ~~third~~first quarter of ~~2008~~2009 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on ~~September 30, 2008.~~March 31, 2009. This amount changes based on the fair market value of the Company’s common stock. The total intrinsic value of options exercised ~~for~~during the three months ended ~~September 30, 2008 and 2007~~March 31, 2009 was ~~$96 and $221, respectively, and the total intrinsic value of~~$1. There were no options exercised ~~for~~during the ~~nine~~three months ended ~~September 30, 2008 and 2007 was $96 and $278, respectively.~~March 31, 2008.

As of ~~September 30, 2008, $4,883~~March 31, 2009, $6,374 of total unrecognized compensation cost related to stock options is expected to be recognized over a weighted-average period of ~~3.3~~2.8 years.

The Company used the Black-Scholes option pricing model to value its options. The table below presents the weighted average value and assumptions used in determining the fair value for each option granted during the first three months ~~ended September 30, 2008~~of 2009 and ~~2007, and the first nine months of 2008 and 2007.~~2008. Volatility was calculated using historical trends of the Company’s common stock price.


	Stock Option Grants												Stock Option Grants
	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended March 31,
	2008			2007			2008			2007			2009			2008
Weighted average fair value of grants	$	8.97		$	10.57		$	7.52		$	14.15
Weighted average fair value													$	5.48		$	7.40
Risk-free interest rate		5.1	%		4.4	%		5.0	%		4.5	%		2.8	%		5.0	%
Expected life in years		6-7			6-7			6-7			6-10			6-7			6-7
Expected volatility		38.7	%		33.4	%		35.0	%		33.2	%		42.5	%		34.7	%
Expected dividend yield		1.0	%		0.7	%		1.0	%		0.5	%		1.5	%		1.0	%

Non-vested restricted stock awards as of ~~September 30, 2008~~March 31, 2009 and changes during the ~~nine~~three months ended ~~September 30, 2008~~March 31, 2009 were as follows:


	Number of Shares		Weighted Average Grant Date Fair Value		Number of Shares		Weighted Average Grant Date Fair Value
Non-vested at December 31, 2007	228,761		$	31.45
Non-vested at December 31, 2008					363,432		$	26.32
Granted	155,812			19.37	265,698			14.24
Vested	(21,022	)		30.08	(6,428	)		36.10
Forfeited	(2,187	)		25.00	(297	)		31.61

Non-vested at September 30, 2008	361,364		$	26.39
Non-vested at March 31, 2009					622,405		$	21.06

As of ~~September 30, 2008,~~March 31, 2009, there was ~~$6,142~~$8,266 of unrecognized stock-based compensation expense related to non-vested restricted stock awards. This cost is expected to be recognized over a weighted-average period of ~~3.0~~2.7 years. The total fair value of shares of restricted stock that vested during the three months ended ~~September 30,~~March 31, 2009 and 2008 was $83 and ~~2007 was $279 and $365, respectively, and the total fair value of shares of restricted stock that vested during the nine months ended September 30, 2008 and 2007 was $369 and $584,~~$89, respectively.

The Company uses derivative instruments, in conjunction with certain physical commodity positions, to reduce price volatility risk on ~~commodities.~~raw materials and products as a substantial portion of its raw materials and products are commodities whose prices fluctuate as market supply and demand fundamentals change. Business strategies to protect against such instability include ethylene product feedstock flexibility and moving downstream into the olefins and vinyls products where pricing is more stable. Due to the short-term nature of the commodities and associated derivatives, the Company did not designate any of its commodity derivative instruments as hedges under the provisions of SFAS 133.

The exposure on commodity derivatives used for price risk management includes the risk that the counterparty will not pay if the market declines below the established fixed price. In such case, the Company would lose the benefit of the derivative differential on the volume of the commodities covered. In any case, the Company would continue to receive the market price on the actual volume hedged. The Company ~~had a net loss~~also bears the risk that it could lose the benefit of ~~$7,795 in connection with trading activity~~market improvements over the fixed derivative price for the ~~nine months ended September 30, 2008 compared to a net gain of $6,424 for the nine months ended September 30, 2007. All~~term and volume of the ~~2008 net loss was related~~derivative securities (as such improvements would accrue to ~~derivative losses. Of~~ the ~~2007 net gain, $7,902 related to sales~~benefit of ~~related physical feedstock positions and was partially offset by $1,478 related to derivative losses. Net trading losses in~~ the third quarter of 2008 totaled $913, all of which were attributable to derivative losses, compared to a net gain of $1,616 in the third quarter of 2007 ($3,421 in gains related to sales of related physical feedstock positions, offset by $1,805 related to derivative losses)counterparty). Gains and losses in connection with trading activity are included in cost of sales. The fair value of risk management liability balances of $6,693 and $6,415 were included in current liabilities in the

~~Company’s consolidated balance sheets as of September 30, 2008 and December 31, 2007, respectively.~~ Under SFAS 157, inputs used to measure fair value are classified in one of three levels:

Level 1: Quoted market prices in active markets for identical assets or liabilities.

Level 2: Observable ~~market based~~market-based inputs or unobservable inputs that are corroborated by market data.

The following table summarizes the classification of ~~the~~inventory held as part of a trading strategy and risk management assets and liabilities by fair value measurement level at ~~September 30, 2008:~~March 31, 2009:

The Company complied with the enhanced disclosures of SFAS 161 effective for the 2009 interim financial statements. The following tables reflect the fair values of derivative instruments in our consolidated balance sheets and the gain (loss) from trading activities in our consolidated statements of operations.

See also management’s discussion and analysis of financial condition and results of operations as well as disclosures about market risk for additional discussions related to the Company’s derivative instruments and risk management activities.

On March 26, 2009, the Company completed the acquisition of a Janesville, Wisconsin PVC pipe plant. The plant has an estimated pipe production capacity of 175 million pounds per year and has the ability to produce PVC pipe in sizes varying up to 24 inches for use in a variety of applications including sewer, water, plumbing and irrigation. The purchase price was $6,297, and no goodwill was recognized as a result of this acquisition. Because of the size of the acquisition, no pro forma disclosures are required.

~~The~~During the first quarter of 2008, the Company decided to permanently close the Pawling, New York facility and consolidate manufacturing of window and door components in Calgary, ~~Canada in the first quarter of 2008.~~Canada. Asset impairments, severance and other costs recorded in the first ~~nine months~~quarter of 2008 related to this closure were ~~approximately $2,947.~~$2,522.

~~The Company adopted~~There was no material change to the ~~provisions of FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes – an interpretation of FASB Statement No. 109” on January 1, 2007. The~~ total gross unrecognized tax benefits for the ~~nine~~three months ended ~~September 30, 2008 were reduced by $2,838 due to the settlement of tax audits and expiring statutes of limitations.~~March 31, 2009. Management anticipates reductions to the total amount of unrecognized tax benefits of an additional ~~$1,579~~$1,570 within the next twelve months due to expiring statutes of limitations.

The Company recognizes penalties and interest accrued related to unrecognized tax benefits in income tax expense. As of January 1, ~~2008,~~2009, the Company had ~~approximately $3,289~~$1,082 of accrued interest and penalties related to uncertain tax positions. The Company increased the accrued interest and penalties by approximately ~~$651~~$41 during the ~~nine~~three months ended September 30, 2008. There was also a reduction in interest and penalties of $1,784, due to the settlement of tax audits and expiring statutes of limitations resulting in a net decrease of $1,133 during the nine months ended September 30, 2008.March 31, 2009.

The Company files income tax returns in the U.S. federal jurisdiction, various states and foreign jurisdictions. The Company is no longer subject to examinations by tax authorities before the year ~~1999.~~2001. During the second quarter of 2008, the Internal Revenue Service completed the audit of the Company for the tax years 2005 and 2006.

The effective income tax benefit rate was ~~31.1%~~13.5% for the ~~nine~~three months ended ~~September 30,~~March 31, 2009. The 2009 tax rate is below the statutory rate of 35% primarily due to the loss of the domestic manufacturing deduction due to the carry back of the year-to-date taxable loss and state income taxes, partially offset by state tax credits. The effective tax rate was 30.4% for the three months ended March 31, 2008. The 2008 tax rate was below the statutory rate of 35% primarily due to state tax credits, ~~the domestic manufacturing deduction, and a reduction of gross unrecognized~~ tax ~~benefits, partially offset by state~~exempt interest income ~~taxes. The effective tax rate was 32.9% for the nine months ended September 30, 2007. The 2007 tax rate was below the statutory rate of 35% primarily due to state tax credits~~ and the domestic manufacturing deduction, partially offset by state income taxes.

Effective for the 2009 interim financial statements, the Company implemented FSP EITF 03-6-1, which requires that the Company’s restricted stock be included in the computation of basic earnings per share. As a result, the weighted average common shares for the three months ended March 31, 2008 have been restated to reflect this implementation. The earnings per share calculation for the three months ended March 31, 2008 has also been amended to reflect the new computation, but the change in the calculation was insignificant and did not change the originally reported basic and diluted earnings per share of $0.08 for the three months ended March 31, 2008.

There are no adjustments to “Net (loss) income” for the diluted earnings per share computations.

~~There are no adjustments to “Net income” for the diluted earnings per share computations.~~

The following table reconciles the denominator for the basic and diluted earnings per share computations shown in the consolidated statements of operations:


	Three Months Ended September 30,		Nine Months Ended September 30,		Three Months Ended March 31,
	2008	2007	2008	2007	2009	2008
	(in thousands)		(in thousands)		(in thousands)
Weighted average common shares—basic	65,275	65,238	65,267	65,227	65,797	65,562
Plus incremental shares from:
Assumed exercise of options	34	78	27	85	0	25
Assumed vesting of restricted stock	32	10	15	13


Weighted average common shares—diluted	65,341	65,326	65,309	65,325	65,797	65,587

All potentially dilutive instruments in 2009 are considered to be antidilutive as the Company has recognized a net loss for the three months ended March 31, 2009.


	Three Months Ended September 30,										Nine Months Ended September 30,										Three Months Ended March 31,
	Pension						Post-Retirement				Pension						Post-Retirement				Pension						Post-retirement Healthcare
	2008			2007			2008		2007		2008			2007			2008		2007		2009			2008			2009		2008
Service cost	$	246		$	260		$	24	$	78	$	739		$	780		$	71	$	234	$	246		$	246		$	20	$	24
Interest cost		593			557			274		146		1,780			1,671			824		438		623			593			280		275
Expected return on plan assets		(615	)		(599	)		—		—		(1,844	)		(1,797	)		—		—		(470	)		(615	)		—		—
Amortization of transition obligation		—			—			29		28		—			—			86		85		—			—			29		28
Amortization of prior service cost		80			80			53		67		239			239			159		200		80			80			53		53
Amortization of net loss		135			132			42		104		404			397			125		311		351			135			26		42


Net periodic benefit cost	$	439		$	430		$	422	$	423	$	1,318		$	1,290		$	1,265	$	1,268	$	830		$	439		$	408	$	422

~~The Company contributed $600 to the Wage pension plan in~~In the first ~~nine months~~quarters of ~~2008. No other~~2009 and 2008, the Company made no contributions ~~were made in the first nine months of 2008 and 2007~~ to the Salaried and Wage pension ~~plans; however, the~~plans. The Company ~~has contributed an additional $795~~expects to make contributions of $1,377 to the Salaried ~~pension~~plan and $151 to the Wage plan during ~~the fourth quarter of 2008. The Company has no current plan to contribute any additional funds to the plans during the remainder of~~ the fiscal year ending December 31, ~~2008.~~2009.

The Company is subject to environmental laws and regulations that can impose civil and criminal sanctions and that may require it to mitigate the effects of contamination caused by the release or disposal of hazardous substances into the environment. Under one law, an owner or operator of property may be held strictly liable for remediating contamination without regard to whether that person caused the contamination, and without regard to whether the practices that resulted in the contamination were legal at the time they occurred. Because several of the Company’s production sites have a history of industrial use, it is impossible to predict precisely what effect these requirements will have on the Company.

Contract Disputes with Goodrich and PolyOne.In connection with the 1990 and 1997 acquisitions of the Goodrich Corporation (“Goodrich”) chemical manufacturing complex in Calvert City, Kentucky, Goodrich agreed to indemnify the Company for any liabilities related to preexisting contamination at the complex. For its part, the Company agreed to indemnify Goodrich for post-closing contamination caused by the Company’s operations. The soil and groundwater at the complex, which does not include the Company’s nearby PVC facility, had been extensively contaminated by Goodrich’s operations. In 1993, Goodrich spun off the predecessor of PolyOne Corporation (“PolyOne”), and that predecessor assumed Goodrich’s indemnification obligations relating to preexisting contamination. PolyOne is now coordinating the investigation and remediation of contamination at the complex.

In 2003, litigation arose among the Company, Goodrich and PolyOne with respect to the allocation of the cost of remediating contamination at the site. The parties settled this litigation in December 2007 and the case was dismissed. In the settlement the parties agreed that, among other things: (1) PolyOne would pay 100% of the costs (with specified exceptions), net of recoveries or credits from third parties, incurred with respect to environmental issues at the Calvert City site from August 1, 2007 forward; (2) either the

Company or PolyOne might, from time to time in the future (but not more than once every five years), institute a proceeding to adjust that percentage; and (3) the Company and PolyOne would negotiate a new environmental remediation utilities and services agreement to cover the Company’s provision to or on behalf of PolyOne of certain environmental remediation services at the site. The current environmental remediation activities at the Calvert City complex do not have a specified termination date but are expected to last for the foreseeable future. The costs incurred by PolyOne to provide the environmental remediation services were $3,790 in 2008.

Administrative Proceedings.There are several administrative proceedings in Kentucky involving the Company, Goodrich and PolyOne related to the same manufacturing complex in Calvert City. In 2003, the Kentucky Environmental and Public Protection Cabinet (“Cabinet”) re-issued Goodrich’s Resource Conservation and Recovery Act, or RCRA, permit which requires Goodrich to remediate contamination at the Calvert City manufacturing complex. Both Goodrich and PolyOne challenged various terms of the permit in an attempt to shift Goodrich’s clean-up obligations under the permit to the Company.

In January 2004, the Cabinet notified the Company that the Company’s ownership of a closed landfill (known as former Pond 4) requires it to submit an application for its own permit under RCRA. This could require the Company to bear the cost of performing remediation work at former Pond 4 and adjacent areas at the complex. The Company challenged the Cabinet’s January 2004 order and has obtained several extensions to submit the required permit application. In October 2006, the Cabinet notified Goodrich and the Company that both were “operators” of former Pond 4 under RCRA, and ordered them to jointly submit an application for a RCRA permit. Goodrich and the Company have both challenged the Cabinet’s October 2006 order.

All of these administrative proceedings have been ~~consolidated. The~~consolidated, and the case ~~has been continued, and a status conference~~ is ~~scheduled for December 10, 2008.~~pending before the Cabinet.

Litigation Related to the Administrative Proceedings.The Company has the contractual right to reconvey title to former Pond 4 back to Goodrich, and the Company has tendered former Pond 4 back to Goodrich under this provision. In March 2005, the Company sued Goodrich in the United States District Court for the Western District of Kentucky to require Goodrich to accept the tendered reconveyance and to indemnify the Company for costs the Company incurred in connection with former Pond 4. Goodrich subsequently filed a third-party complaint against PolyOne, seeking to hold PolyOne responsible for any of Goodrich’s former Pond 4 liabilities to the Company. Goodrich moved to dismiss the Company’s suit against it, the Company filed a motion for partial summary judgment against Goodrich, and PolyOne moved to dismiss Goodrich’s third-party complaint against it. OnIn March ~~30,~~ 2007, the court granted Goodrich’s motion to dismiss the Company’s claim that Goodrich is required to accept the tendered reconveyance. Although the Company’s motion for partial summary judgment was denied ~~on March 30, 2007,~~then, the Company’s claim for indemnification of its costs incurred in connection with Pond 4 is still pending before the court. ~~A status conference was held on October 24, 2008, and the case was continued until March 19, 2009.~~

Monetary Relief. Except as noted above, with respect to the settlement of the contract litigation among the Company, Goodrich and PolyOne, neither the court nor the Cabinet has established any allocation of the costs of remediation among the various parties that are involved in the judicial and administrative proceedings discussed above. The Company is not in a position at this time to state what effect, if any, the resolution of these proceedings could have on the Company’s financial condition, results of operations or cash flows in ~~2008~~2009 and later years. Any cash expenditures that the Company might incur in the future with respect to the remediation of contamination at the complex would likely be spread out over an extended period. As a result, the Company believes it is unlikely that any remediation costs allocable to it will be material in terms of expenditures made in any individual reporting period.

Environmental Investigations. In 2002, the ~~EPA’s~~ National Enforcement Investigations Center, or NEIC, of the U.S. Environmental Protection Agency, or EPA, investigated the Company’s manufacturing complex in Calvert City. In early 2004, the NEIC investigated the Company’s nearby PVC plant. The EPA subsequently submitted information requests to the Company under the Clean Air Act and RCRA. The Company and the EPA met in ~~June~~ 2004 to attempt to voluntarily resolve the notices of violation that were issued to the Company for the 2002 investigation and to voluntarily resolve any issues raised at the PVC plant in the 2004 investigation. Since then, the parties have continued to engage in settlement discussions. The EPA has indicated that it will impose monetary penalties and require plant modifications that will involve capital expenditures. The Company expects that, based on the EPA’s past practices, the amount of any monetary penalties would be reduced by a portion of the expenditures that the Company would agree to make for certain “supplemental environmental projects.” The Company has recorded an accrual for a probable loss related to monetary penalties and other items to be expensed. Although the ultimate amount of liability is not ascertainable, the Company believes that any amounts exceeding the recorded accruals should not materially affect the Company’s financial condition. It is possible, however, that the ultimate resolution of this matter could result in a material adverse effect on the Company’s results of operations or cash flows for a particular reporting period.

EPA Audit of Ethylene Units in Lake Charles.During 2007, the ~~U.S. Environmental Protection Agency, or~~ EPA conducted an audit of the Company’s ethylene units in Lake Charles, Louisiana, with a focus on leak detection and repair, or LDAR. ~~By letter dated~~In January ~~31,~~ 2008, the U.S. Department of Justice, or DOJ, notified the Company that the EPA had referred the matter to the DOJ to bring a civil case against the Company alleging violations of various environmental laws and regulations. The DOJ informed the Company that it would seek monetary penalties and require the Company to implement an “enhanced LDAR” program for the ethylene units. The Company’s representatives met with the

EPA onin February ~~14,~~ 2008 to conduct initial settlement discussions. While the Company can offer no assurance as to an outcome, the Company believes that the resolution of this matter will not have a material adverse effect on the Company’s financial condition, cash flows or results of operations.

In addition to the matters described above, the Company is involved in various routine legal proceedings incidental to the conduct of its business. The Company does not believe that any of these routine legal proceedings will have a material adverse effect on its financial condition, results of operations or cash flows.

The Company operates in two principal business segments: Olefins and Vinyls. These segments are strategic business units that offer a variety of different products. The Company manages each segment separately as each business requires different technology and marketing strategies.


	Three Months Ended September 30,					Nine Months Ended September 30,						Three Months Ended March 31,
	2008		2007			2008			2007			2009			2008
Net sales to external customers
Net external sales
Olefins
Polyethylene	$	504,035	$	393,237		$	1,447,222		$	1,119,241		$	256,374		$	444,163
Ethylene, styrene and other		221,028		177,181			704,624			450,243			66,395			216,658


Total olefins		725,063		570,418			2,151,846			1,569,484			322,769			660,821
Vinyls
Fabricated finished products		127,498		126,129			364,151			384,880			62,428			91,606
VCM, PVC and other		221,174		143,613			579,248			387,262			103,054			162,634


Total vinyls		348,672		269,742			943,399			772,142			165,482			254,240

	$	1,073,735	$	840,160		$	3,095,245		$	2,341,626		$	488,251		$	915,061

Intersegment sales
Olefins	$	33,496	$	20,808		$	85,882		$	51,169		$	7,047		$	16,766
Vinyls		641		312			1,477			831			464			381

	$	34,137	$	21,120		$	87,359		$	52,000		$	7,511		$	17,147

Income (loss) from operations
(Loss) income from operations
Olefins	$	18,190	$	57,032		$	96,146		$	126,967		$	16,074		$	20,152
Vinyls		30,483		5,420			45,752			34,029			(15,381	)		(3,085	)
Corporate and other		115		(2,697	)		(5,675	)		(6,296	)		(1,596	)		(3,208	)

	$	48,788	$	59,755		$	136,223		$	154,700		$	(903	)	$	13,859

Depreciation and amortization
Olefins	$	19,670	$	17,791		$	56,513		$	50,934		$	19,724		$	17,661
Vinyls		8,427		8,882			24,868			26,381			9,188			8,298
Corporate and other		52		36			146			110			75			42

	$	28,149	$	26,709		$	81,527		$	77,425		$	28,987		$	26,001

Other income (expense), net
Other income, net
Olefins	$	9	$	—		$	67		$	170		$	130		$	16
Vinyls		64		(68	)		230			21			4			100
Corporate and other		1,194		373			5,577			813			2,343			2,292

	$	1,267	$	305		$	5,874		$	1,004		$	2,477		$	2,408

Capital expenditures
Olefins												$	17,430		$	15,468
Vinyls													15,313			26,762
Corporate and other													49			754

												$	32,792		$	42,984

A reconciliation of total segment (loss) income from operations to consolidated (loss) income before income taxes is as follows:


	September 30, 2008		December 31, 2007		Three Months Ended March 31,
					2009			2008
(Loss) income from operations					$	(903	)	$	13,859
Interest expense						(8,596	)		(8,528	)
Other income, net						2,477			2,408


(Loss) income before income taxes					$	(7,022	)	$	7,739

					March 31, 2009			December 31, 2008
Total assets
Olefins					$	1,254,730		$	1,275,762
Vinyls						621,755			651,678
Corporate and other						411,735			359,549

					$	2,288,220		$	2,286,989

15. Comprehensive (Loss) Income Information
					Three Months Ended March 31,
					2009			2008
Net (loss) income					$	(6,075	)	$	5,387
Other comprehensive income:
Amortization of benefits liability, net of tax						350			220
Change in cumulative translation adjustment						(89	)		(1,063	)


Comprehensive (loss) income					$	(5,814	)	$	4,544

16. Long-Term Debt
Long-term indebtedness consists of the following:
					March 31, 2009			December 31, 2008
6⁵/8% senior notes due 2016	$	249,409	$	249,348	$	249,450		$	249,430
Revolving line of credit due 2013		5,650		1,177
6³/4% senior notes due 2032		250,000		250,000		250,000			250,000
Loan related to tax-exempt waste disposal revenue bonds due 2027		10,889		10,889		10,889			10,889


Long-term debt	$	515,948	$	511,414	$	510,339		$	510,319

On ~~September 8, 2008,~~February 5, 2009, the Company amended its ~~senior secured~~ revolving credit facility to ~~among other things, increase~~allow the ~~lenders’ commitments~~Company to make specified distributions when the fixed charge coverage ratio falls below 1.0 if the Company maintains at least $125 million to $200 million (depending on the amount of distributions) of borrowing availability, including cash, under the ~~facility from $300,000 to $400,000.~~credit facility. As of ~~September 30, 2008,~~March 31, 2009, the Company had no borrowings under the revolving credit facility. Any borrowings under the facility ~~that bore~~would bear interest at either LIBOR plus ~~2.25%~~a spread ranging from 2.75% to 3.50% or ~~the prime~~a base rate plus ~~0.75%~~a spread ranging from 1.25% to 2.0%. The revolving credit facility also requires an unused commitment fee ranging from 0.75% to 0.875%, depending on the average daily borrowings. All interest rates under the facility are subject to monthly grid pricing adjustments based on prior month average daily loan availability. The revolving credit facility matures on September 8, 2013.

also requires an unused commitment fee of 0.625%. All interest rates under the facility are subject to quarterly grid pricing adjustments based on average daily loan availability. The facility matures on September 8, 2013.

The Company’s payment obligations under its 6⁵/8% senior notes and 6³/4% senior notes are fully and unconditionally guaranteed by each of its current and future domestic restricted subsidiaries that guarantee other debt of the Company or of another guarantor of the 6⁵/8% senior notes or the 6³/4% senior notes in excess of $5,000 (the “Guarantor Subsidiaries”). Each Guarantor Subsidiary is 100% owned by ~~the Company.~~Westlake Chemical Corporation. These guarantees are the joint and several obligations of the Guarantor Subsidiaries. The following unaudited condensed consolidating financial information presents the financial condition, results of operations and cash flows of Westlake Chemical Corporation, the Guarantor Subsidiaries and the remaining subsidiaries that do not guarantee the notes (the “Non-Guarantor Subsidiaries”), together with consolidating adjustments necessary to present the Company’s results on a consolidated basis.

Condensed Consolidating Financial Information as of ~~September 30, 2008~~March 31, 2009


	Westlake Chemical Corporation		Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated		Westlake Chemical Corporation		Guarantor Subsidiaries		Non- Guarantor Subsidiaries			Eliminations			Consolidated
Balance Sheet
Current assets
Cash and cash equivalents	$	14,289	$	66	$	8,097		$	—		$	22,452	$	177,384	$	111	$	1,848		$	—		$	179,343
Accounts receivable, net		181,260		548,003		(1,196	)		(165,263	)		562,804		55,973		248,800		(2,520	)		(21,242	)		281,011
Inventories, net		—		479,146		12,039			—			491,185		—		273,778		10,095			—			283,873
Prepaid expenses and other current assets		523		12,866		204			—			13,593		876		9,210		208			—			10,294
Deferred income taxes		17,295		—		281			—			17,576		26,388		—		229			—			26,617


Total current assets		213,367		1,040,081		19,425			(165,263	)		1,107,610		260,621		531,899		9,860			(21,242	)		781,138
Property, plant and equipment, net		—		1,166,128		15,444			—			1,181,572		—		1,198,307		12,441			—			1,210,748
Equity investment		1,797,460		23,250		32,009			(1,820,710	)		32,009		1,620,354		23,250		31,870			(1,643,604	)		31,870
Restricted cash		146,695		—		—			—			146,695		120,763		—		—			—			120,763
Other assets, net		44,910		114,098		5,946			(36,029	)		128,925		45,755		127,420		6,558			(36,032	)		143,701


Total assets	$	2,202,432	$	2,343,557	$	72,824		$	(2,022,002	)	$	2,596,811	$	2,047,493	$	1,880,876	$	60,729		$	(1,700,878	)	$	2,288,220


Current liabilities
Accounts payable	$	20,133	$	252,076	$	3,687		$	—		$	275,896	$	11,324	$	120,249	$	1,331		$	—		$	132,904
Accrued liabilities		19,761		94,769		1,520			(157	)		115,893		9,741		68,559		972			(17	)		79,255


Total current liabilities		39,894		346,845		5,207			(157	)		391,789		21,065		188,808		2,303			(17	)		212,159
Long-term debt		505,059		209,031		2,996			(201,138	)		515,948		499,450		66,100		2,048			(57,259	)		510,339
Deferred income taxes		290,179		—		998			—			291,177		289,301		—		96			—			289,397
Other liabilities		8,406		30,597		—			—			39,003		6,569		38,648		—			—			45,217
Stockholders’ equity		1,358,894		1,757,084		63,623			(1,820,707	)		1,358,894		1,231,108		1,587,320		56,282			(1,643,602	)		1,231,108


Total liabilities and stockholders’ equity	$	2,202,432	$	2,343,557	$	72,824		$	(2,022,002	)	$	2,596,811	$	2,047,493	$	1,880,876	$	60,729		$	(1,700,878	)	$	2,288,220


	Westlake Chemical Corporation		Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated		Westlake Chemical Corporation		Guarantor Subsidiaries		Non- Guarantor Subsidiaries			Eliminations			Consolidated
Balance Sheet
Current assets
Cash and cash equivalents	$	16,173	$	96	$	8,645		$	—		$	24,914	$	88,368	$	69	$	1,802		$	—		$	90,239
Accounts receivable, net		183,723		492,974		(2,307	)		(166,927	)		507,463		145,598		286,941		(2,241	)		(82,975	)		347,323
Inventories, net		—		515,465		12,406			—			527,871		—		317,312		10,655			—			327,967
Prepaid expenses and other current assets		10		13,867		355			—			14,232		763		5,830		245			—			6,838
Deferred income taxes		17,344		—		361			—			17,705		26,388		—		234			—			26,622

Total current assets		217,250		1,022,402		19,460			(166,927	)		1,092,185		261,117		610,152		10,695			(82,975	)		798,989
Property, plant and equipment, net		—		1,113,365		12,847			—			1,126,212		—		1,184,078		13,374			—			1,197,452
Equity investment		1,671,979		23,250		29,486			(1,695,229	)		29,486		1,621,068		23,250		30,107			(1,644,318	)		30,107
Restricted cash		199,450		—		—			—			199,450		134,432		—		—			—			134,432
Other assets, net		43,053		109,302		5,677			(36,030	)		122,002		44,735		111,332		5,971			(36,029	)		126,009

Total assets	$	2,131,732	$	2,268,319	$	67,470		$	(1,898,186	)	$	2,569,335	$	2,061,352	$	1,928,812	$	60,147		$	(1,763,322	)	$	2,286,989


Current liabilities
Accounts payable	$	29,319	$	284,658	$	974		$	—		$	314,951	$	20,052	$	91,626	$	1,155		$	—		$	112,833
Accrued liabilities		16,654		108,702		1,055			(100	)		126,311		15,872		83,263		324			(4	)		99,455

Total current liabilities		45,973		393,360		2,029			(100	)		441,262		35,924		174,889		1,479			(4	)		212,288
Long-term debt		500,525		213,647		102			(202,860	)		511,414		499,430		127,798		2,094			(119,003	)		510,319
Deferred income taxes		286,603		—		1,362			—			287,965		280,395		—		91			—			280,486
Other liabilities		11,961		30,063		—			—			42,024		6,543		38,293		—			—			44,836
Stockholders’ equity		1,286,670		1,631,249		63,977			(1,695,226	)		1,286,670		1,239,060		1,587,832		56,483			(1,644,315	)		1,239,060

Total liabilities and stockholders’ equity	$	2,131,732	$	2,268,319	$	67,470		$	(1,898,186	)	$	2,569,335	$	2,061,352	$	1,928,812	$	60,147		$	(1,763,322	)	$	2,286,989

Condensed Consolidating Financial Information for the Three Months Ended ~~September 30, 2008~~March 31, 2009

Condensed Consolidating Financial Information for the Three Months Ended ~~September 30, 2007~~March 31, 2008


	Westlake Chemical Corporation			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated			Westlake Chemical Corporation			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Statement of Operations
Net sales	$	—		$	828,528		$	13,405		$	(1,773	)	$	840,160		$	—		$	907,504		$	9,589		$	(2,032	)	$	915,061
Cost of sales		—			741,934			13,939			(1,773	)		754,100			—			871,574			8,815			(2,032	)		878,357

Gross profit		—			86,594			(534	)		—			86,060			—			35,930			774			—			36,704
Selling, general and administrative expenses		482			25,464			359			—			26,305			780			21,084			981			—			22,845

Income (loss) from operations		(482	)		61,130			(893	)		—			59,755			(780	)		14,846			(207	)		—			13,859
Interest expense		469			(5,161	)		—			—			(4,692	)		(5,037	)		(3,423	)		(68	)		—			(8,528	)
Other income (expense), net		39,222			(426	)		540			(39,031	)		305			10,708			140			1,240			(9,680	)		2,408

Income (loss) before income taxes		39,209			55,543			(353	)		(39,031	)		55,368			4,891			11,563			965			(9,680	)		7,739
Provision for (benefit from) income taxes		868			16,670			(511	)		—			17,027
(Benefit from) provision for income taxes																	(496	)		2,783			65			—			2,352

Net income	$	38,341		$	38,873		$	158		$	(39,031	)	$	38,341
Net income (loss)																$	5,387		$	8,780		$	900		$	(9,680	)	$	5,387

Condensed Consolidating Financial Information for the ~~Nine~~Three Months Ended ~~September 30, 2008~~March 31, 2009

~~Condensed Consolidating Financial Information for the Nine Months Ended September 30, 2007~~

Condensed Consolidating Financial Information for the ~~Nine~~Three Months Ended ~~September 30,~~March 31, 2008


	Westlake Chemical Corporation			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated			Westlake Chemical Corporation			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Statement of Cash Flows
Cash flows from operating activities
Net income	$	80,024		$	71,512		$	1,192		$	(72,704	)	$	80,024
Net income (loss)																$	5,387		$	8,780		$	900		$	(9,680	)	$	5,387

Adjustments to reconcile net income to net cash used for operating activities
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities
Depreciation and amortization		662			79,092			2,435			—			82,189			219			25,225			776			—			26,220
Provision for (recovery of) bad debts		—			2,155			(98	)		—			2,057
(Recovery of) provision for bad debts																	—			182			(98	)		—			84
Stock-based compensation expense		—			3,018			108			—			3,126			—			914			33			—			947
Gain from disposition of fixed assets		—			4,479			—			—			4,479			—			2,385			—			—			2,385
Deferred tax expense		3,270			—			(174	)		—			3,096			1,164			—			(1	)		—			1,163
Equity in income of joint venture		—			—			(2,523	)		—			(2,523	)		—			—			(1,068	)		—			(1,068	)
Net changes in working capital and other		(134,763	)		(33,963	)		160			72,704			(95,862	)		(28,198	)		(42,466	)		(2,388	)		9,680			(63,372	)

Net cash (used for) provided by operating activities		(50,807	)		126,293			1,100			—			76,586
Net cash used for operating activities																	(21,428	)		(4,980	)		(1,846	)		—			(28,254	)

Cash flows from investing activities
Additions to property, plant and equipment		—			(125,580	)		(1,583	)		—			(127,163	)		—			(42,733	)		(251	)		—			(42,984	)
Settlements of futures contracts		—			344			—			—			344			—			319			—			—			319
Proceeds from disposition of assets		—			573			—			—			573			—			214			—			—			214

Net cash used for investing activities		—			(124,663	)		(1,583	)		—			(126,246	)		—			(42,200	)		(251	)		—			(42,451	)

Cash flows from financing activities
Intercompany financing		1,725			(1,660	)		(65	)		—			—			(47,288	)		47,183			105			—			—
Proceeds from exercise of stock options		208			—			—			—			208
Dividends paid		(10,010	)		—			—			—			(10,010	)		(3,282	)		—			—			—			(3,282	)
Proceeds from borrowings		851,635			—			—			—			851,635			300,800			—			—			—			300,800
Repayments of borrowings		(847,162	)		—			—			—			(847,162	)		(257,427	)		—			—			—			(257,427	)
Utilization of restricted cash		55,045			—			—			—			55,045			13,546			—			—			—			13,546
Capitalized debt issuance cost		(2,518	)		—			—			—			(2,518	)

Net cash provided by (used for) financing activities		48,923			(1,660	)		(65	)		—			47,198
Net decrease in cash and cash equivalents		(1,884	)		(30	)		(548	)		—			(2,462	)
Net cash provided by financing activities																	6,349			47,183			105			—			53,637
Net (decrease) increase in cash and cash equivalents																	(15,079	)		3			(1,992	)		—			(17,068	)
Cash and cash equivalents at beginning of period		16,173			96			8,645			—			24,914			16,173			96			8,645			—			24,914

Cash and cash equivalents at end of period	$	14,289		$	66		$	8,097		$	—		$	22,452		$	1,094		$	99		$	6,653		$	—		$	7,846

~~Condensed Consolidating Financial Information for the Nine Months Ended September 30, 2007~~

Item 2.

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 Chemical Corporation and the notes thereto and the consolidated financial statements and notes thereto of Westlake Chemical Corporation included in Westlake Chemical Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, ~~2007.~~2008. The following discussion contains forward-looking statements. Please read “Forward-Looking Statements” for a discussion of limitations inherent in such statements.

We are a vertically integrated manufacturer and marketer of petrochemicals, polymers and fabricated products. Our two principal business segments are ~~Olefins~~olefins and ~~Vinyls.~~vinyls. We use the majority of our internally-produced basic chemicals to produce higher value-added chemicals and fabricated products.

~~During August~~In March 2009, we acquired a PVC pipe plant in Janesville, Wisconsin for $6.3 million. The plant has the ability to produce PVC pipe in sizes up to 24 inches for use in a variety of applications including sewer, water, plumbing and ~~September 2008,~~irrigation. We began operating the plant in April 2009 with limited production, but the plant is designed to produce up to 175 million pounds of PVC pipe annually at full capacity.

In the first quarter of 2009, we ~~shut~~began operating a new PVC pipe plant in Yucca, Arizona built to produce pipe for water, sewer, irrigation and related industrial and residential markets in the Western United States. The new plant has the capacity to produce approximately 120 million pounds of PVC pipe annually. Also in the first quarter of 2009, we completed our PVC resin plant expansion in Calvert City and increased our capacity by 300 million pounds per year, bringing our total PVC capacity to 1.7 billion pounds annually.

In late January 2009, our Calvert City, Kentucky complex experienced an ice storm that caused a power failure at the facility and resulted in damage to a compressor for our ethylene unit. The power outage caused the complex to be down for eight days and the ethylene unit compressor damage resulted in reduced production rates for all major products produced at the facility.

One of our ~~vinyls facilities at our Geismar, Louisiana complex and our olefins facilities at our~~ethylene units in Lake Charles, Louisiana ~~complex~~was idled during December 2008 due to ~~Hurricanes Gustav~~significant customer inventory destocking and ~~Ike. Both complexes sustained minimal damage from~~resulting weakened demand. A maintenance turnaround for this unit initially scheduled for the ~~hurricanes; however, the energy~~first half of 2009 was brought forward and ~~power shortages caused by the hurricanes affected many suppliers and, as a consequence, the Lake Charles facilities were~~performed during this down time. The unit was shut down for a total of 86 days (71 days during the first quarter of 2009), and the turnaround was completed in March 2009. During a turnaround, production at the unit is suspended while work on the unit is performed, but sales from inventory can continue during the turnaround period. The cost of this turnaround was approximately ~~three weeks due to the two hurricanes, while the Geismar facilities were shut down for approximately one and a half weeks due to Hurricane Gustav.~~$23.1 million, which was capitalized.

In August 2008, we announced that we ~~will~~intend to construct a new chlor-alkali plant to be located at our vinyls manufacturing complex in Geismar, Louisiana. The new chlor-alkali unit iswould be expected to produce 250,000 ECUs annually upon completion, bringing our total ECU capacity to 525,000 per ~~year, including the chlor-alkali expansion at our Calvert City complex described below.~~year. The new plant iswould be expected to improve the vertical integration of our vinyls business from chlorine downstream into VCM and PVC, and increase caustic soda sales. The project is currently estimated to cost between ~~$250.0~~$250 million and ~~$300.0 million~~$300 million. At present we are evaluating a start date for construction of this plant in light of current economic and business conditions. The project is ~~targeted for completion in the first half of 2011.~~expected to take about 36 months to complete. We expect the project ~~will~~would be partially funded with funds drawn from the proceeds of the issuance of the 6³/4% revenue bonds of the Louisiana Local Government Environmental Facility and Community Development Authority (the “Authority”), issued in December 2007 for ~~the~~our benefit, ~~of the Company,~~ which are currently held as restricted cash. We expect the remaining funding would come from our revolving credit facility, cash flow from operations, and, possibly, our ability to obtain additional financing.

We announced in March 2008 that we will open a new PVC pipe plant in Yucca, Arizona to produce pipe for water, sewer, irrigation and related industrial and residential markets in the Western United States. The new plant is expected to begin full operations by the first quarter of 2009 and have the capacity to produce approximately 120 million pounds of PVC pipe annually in its initial phase.

In October 2007, we announced that we intend to expand our chlor-alkali and PVC resin units and build a large diameter PVC pipe plant at our Calvert City complex. The expanded chlor-alkali unit is expected to add 50,000 ECUs. The chlor-alkali expansion is expected to improve the vertical integration of our vinyls business from chlorine downstream into VCM and PVC and increase caustic soda sales once the expansion is completed, which is expected to occur in the first quarter of 2009. The PVC resin plant expansion is expected to increase capacity by 300 million pounds per year, bringing our total PVC capacity to 1.7 billion pounds annually. The expansion is expected to be completed in the first half of 2009. The expansion is expected to consume VCM that is currently being sold on the merchant market and enhance the integration of the vinyls product chain. During the third quarter of 2008, we also started production at a new large diameter PVC pipe facility at the complex with a capacity of approximately 50 million pounds per year of large diameter pipe. Our annual PVC pipe capacity is expected to increase to approximately 985 million pounds with this expansion and the completion of the Yucca project.

Since 2006 we have been in discussions with the Government of The Republic of Trinidad and Tobago (the “Government”) to develop an ethane-based ethylene, polyethylene and other derivatives project in that country. As originally envisioned, the project would use 37,500 barrels per day of ethane to produce 570,000 metric tons (1.25 billion pounds) per year of ethylene, which would in turn be used to produce polyethylene and other derivative products. One of the major constraints to the project has been the rising international capital costs of the construction of such plants around the world. We and the Government are discussing how to overcome that challenge. In the interim, we have suspended active work on the project.


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended March 31,
	2008			2007			2008			2007			2009			2008
	(dollars in thousands)												(dollars in thousands)
Net External Sales
Net external sales
Olefins
Polyethylene	$	504,035		$	393,237		$	1,447,222		$	1,119,241		$	256,374		$	444,163
Ethylene, styrene and other		221,028			177,181			704,624			450,243			66,395			216,658

Total olefins		725,063			570,418			2,151,846			1,569,484			322,769			660,821

Vinyls
Fabricated finished products		127,498			126,129			364,151			384,880			62,428			91,606
VCM, PVC and other		221,174			143,613			579,248			387,262
VCM, PVC, and other														103,054			162,634

Total vinyls		348,672			269,742			943,399			772,142			165,482			254,240

Total	$	1,073,735		$	840,160		$	3,095,245		$	2,341,626		$	488,251		$	915,061

Income (loss) from operations

(Loss) income from operations
Olefins		18,190			57,032			96,146			126,967			16,074			20,152
Vinyls		30,483			5,420			45,752			34,029			(15,381	)		(3,085	)
Corporate and other		115			(2,697	)		(5,675	)		(6,296	)		(1,596	)		(3,208	)

Total income from operations		48,788			59,755			136,223			154,700
Total (loss) income from operations														(903	)		13,859
Interest expense		(8,093	)		(4,692	)		(25,908	)		(12,780	)		(8,596	)		(8,528	)
Other income, net		1,267			305			5,874			1,004			2,477			2,408
Provision for income taxes		(14,598	)		(17,027	)		(36,165	)		(47,021	)
(Benefit from) provision for income taxes														(947	)		2,352

Net income	$	27,364		$	38,341		$	80,024		$	95,903
Net (loss) income													$	(6,075	)	$	5,387

Diluted earnings per share	$	0.42		$	0.59		$	1.23		$	1.47
Diluted (loss) earnings per share													$	(0.09	)	$	0.08


	Three Months Ended September 30, 2008						Nine Months Ended September 30, 2008
	Average Sales Price			Volume			Average Sales Price			Volume
Key product sales price and volume percentage change from prior year period
Olefins(1)		32.3	%		-5.2	%		35.2	%		1.9	%
Vinyls(2)		25.6	%		3.7	%		19.2	%		3.0	%
Company average		30.2	%		-2.4	%		29.9	%		2.3	%

   Three Months Ended
September 30,    Nine Months Ended
September 30,
   2008    2007    2008    2007
Average industry prices(1)

Ethane (cents/lb)
   36.7    27.6    35.4    23.9
Propane (cents/lb)
   39.8    29.0    38.3    26.2
Ethylene (cents/lb) (2)
   68.0    50.2    64.9    44.9
Polyethylene (cents/lb) (3)
   103.7    79.0    95.4    72.9
Styrene (cents/lb) (4)
   85.7    68.1    79.0    68.0
Caustic ($/short ton) (5)
   885.8    450.0    693.9    405.0
Chlorine ($/short ton) (6)
   265.0    322.5    280.0    314.2
PVC (cents/lb) (7)
   64.0    61.3    59.0    57.8

For the three months ended ~~September 30, 2008,~~March 31, 2009, we incurred a net ~~income was $27.4~~loss of $6.1 million, or ~~$0.42~~$0.09 per diluted share, on net sales of ~~$1,073.7~~$488.3 million. This represents a decrease in net income of ~~$10.9~~$11.5 million, or $0.17 per diluted share, from the three months ended ~~September 30, 2007~~March 31, 2008 net income of ~~$38.3~~$5.4 million, or ~~$0.59~~$0.08 per diluted share, on net sales of ~~$840.2~~$915.1 million. The loss from operations was $0.9 million for the first quarter of 2009 as compared to income from operations of $13.9 million for the first quarter of 2008. Sales for the three months ended ~~September 30, 2008 increased $233.5~~March 31, 2009 decreased $426.8 million over the third quarter of 2007 largely due to higher sales prices for most major products, which were partially offset by a small decrease in overall sales volumes. Income from operations was $48.8 million for the third quarter of 2008 as compared to $59.8 million for the third quarter of 2007. The third quarter of 2008 income from operations was adversely impacted by higher feedstock and energy costs and outages at the Lake Charles and Geismar facilities related to Hurricanes Gustav and Ike. The negative impact from the hurricanes and higher costs were partially offset by increased prices and reduced selling, general and administrative expense. The 2007 results were negatively impacted by the settlement of contract litigation and related legal expenses, which lowered operating income in the third quarter of 2007. In addition, trading activity resulted in a loss in the third quarter of 2008 of $0.9 million as compared to a gain of $1.6 million in the third quarter of 2007. Net income declined in the third quarter of 2008 compared to the ~~third quarter~~first three months of ~~2007~~2008 due primarily due to the lower income from operations and the increase of $3.4 million in interest expense as a result of higher average debt outstanding during the third quarter of 2008. The continued weak construction market in the U.S. has kept vinyls downstream product margins at low levels. This market weakness, coupled with industry capacity additions and the economic uncertainty resulting from the instability in the credit and financial markets, is expected to make it difficult to significantly improve vinyls margins in the near term. With respect to the Olefins segment, we are concerned with the weakness in the global economy and increased supply from the Middle East, both of which could reduce our sales volumes and margins.

For the nine months ended September 30, 2008, net income was $80.0 million, or $1.23 per diluted share, on net sales of $3,095.2 million. This represents a decrease in net income of $15.9 million, or $0.24 per diluted share, from the nine months ended September 30, 2007 net income of $95.9 million, or $1.47 per diluted share, on net sales of $2,341.6 million. Sales for the nine months ended September 30, 2008 increased $753.6 million over the first nine months of 2007 largely due to higherlower sales prices for all of our major products except caustic and ~~higher~~lower sales volumes for ~~PVC resin, which was partially offset by~~all major products except styrene. The first quarter of 2009 loss from operations reflected lower sales ~~volume~~volumes, weakness in the vinyls downstream markets, reduced demand for PVC pipe. Income from operations was $136.2 million for the first nine months of 2008 as compared to $154.7 million for the first nine months of 2007. The income from operations for the first nine months of 2008 was negatively impactedpolyethylene, an unscheduled outage caused by ~~a number of factors, including the effects of Hurricanes Gustav~~an ice storm at our Calvert City facility and Ike, a turnaround and revamp of our styrene facility in Lake Charles, higher raw material, natural gas and electricity costs, lower PVC pipe sales volume and a loss from trading activities. These negative impacts were partially offset by the higher sales prices. Trading activity resulted in a loss of $7.8 million for the first nine months of 2008 as compared to a gain of $6.4 million for the first nine months of 2007. The first nine months of 2007 were negatively impacted by a turnaround at one of our ethylene units in Lake ~~Charles~~Charles. The Calvert City outage and the ~~settlement~~Lake Charles turnaround resulted in repair costs and the expensing of ~~contract litigation and related legal expenses.~~unabsorbed fixed manufacturing costs of $19.5 million. The increase in loss from operations was partially offset by a gain from trading activity of $2.5 million during the first quarter of 2009 compared to a gain of $0.1 million during the first quarter of 2008.

~~Third~~First Quarter ~~2008~~2009 Compared with ~~Third~~First Quarter ~~2007~~2008

Net Sales. Net sales ~~increased~~decreased by ~~$233.5~~$426.8 million to ~~$1,073.7~~$488.3 million in the ~~third~~first quarter of ~~2008~~2009 from ~~$840.2~~$915.1 million in the ~~third~~first quarter of ~~2007.~~2008. This ~~increase~~decrease was primarily due to ~~higher~~lower sales prices and lower sales volumes for most of our major products. Average sales prices for the ~~three months ended September 30, 2008 increased~~first quarter of 2009 decreased by ~~30.2%~~29.1% as compared to the ~~third quarter of 2007. Overall sales volumes decreased by 2.4% in the third~~first quarter of 2008, and sales volumes declined 17.5% as compared to the ~~third~~first quarter of ~~2007 as decreased sales volumes for ethylene and polyethylene were only partially offset by increases in styrene and PVC resin sales volumes.~~2008 due to lower demand.

Gross Margin. Gross margin percentage ~~decreased to 6.7%~~of 4.1% in the ~~third~~first quarter of ~~2008 from 10.2%~~2009 was relatively flat compared to the 4.0% gross margin percentage in the ~~third~~first quarter of ~~2007. This decrease~~2008. The 2009 gross margin percentage was negatively impacted by lower sales volumes and lower operating rates. The lower operating rates were primarily due to the ~~impact~~ice storm in Calvert City, the turnaround of ~~Hurricanes Gustav~~one of our ethylene units in Lake Charles and ~~Ike and an increase~~weakness in the downstream vinyls markets. These decreases were offset by raw material ~~natural gas and electricity costs.~~cost reductions that outpaced the drop in product sales prices. Our raw material cost in both segments normally tracks industry prices, which experienced ~~an increase~~a decrease of ~~33.0%~~64.8% for ethane and ~~37.2%~~54.0% for propane as compared to the ~~third~~first quarter of ~~2007. Average sales~~2008. Sales prices ~~increased by 30.2% for~~only decreased an average of 29.1% during that ~~same~~ period. ~~Also contributing to the lower gross margin percentage was a trading loss of $0.9 million in the third quarter of 2008 as compared to a $1.6 million gain in the third quarter of 2007.~~

Selling, General and Administrative Expenses. Selling, general and administrative expenses decreased ~~$3.3~~$1.9 million, or ~~12.5%~~8.2%, in the ~~third~~first quarter of ~~2008~~2009 as compared to the ~~third~~first quarter of ~~2007.~~2008. The decrease was ~~largely~~primarily due to ~~a legal settlement in the third quarter of 2007~~lower compensation expense and ~~the associated reduction in legal expenses.~~consulting fees.

Interest Expense.Interest expense in the ~~third~~first quarter of ~~2008~~2009 increased by ~~$3.4~~$0.1 million as debt balances and interest rates were relatively flat compared to ~~$8.1 million, from $4.7 million in~~ the ~~third~~first quarter of ~~2007. This increase was primarily due to higher average debt outstanding for the period, largely as a result of our issuance of the 6~~ ³/4~~% senior notes in the fourth quarter of 2007.~~2008.

Other Income, Net. Other income, net increased by ~~$1.0~~$0.1 million to ~~$1.3~~$2.5 million in the ~~third~~first quarter of 2009 from $2.4 million in the first quarter of 2008 primarily due to higher equity in income from ~~$0.3 million~~our joint venture in ~~the third quarter of 2007. Higher~~China, partially offset by lower interest ~~income associated with the restricted cash balance related to our 6~~³/4 ~~% senior notes contributed to the increase.~~income.

Income Taxes.The effective income tax rate was ~~34.8% in~~13.5% for the ~~third quarter~~three months ended March 31, 2009. The 2009 tax rate is below the statutory rate of 35% primarily due to the loss of the domestic manufacturing deduction due to the carry back of the year-to-date taxable loss and state income taxes, partially offset by state tax credits. The effective tax rate was 30.4% for the three months ended March 31, 2008. The 2008 tax rate was below the statutory rate of 35% primarily due to state tax credits, ~~and the domestic manufacturing deduction, partially offset by state~~tax exempt interest income ~~taxes. The effective tax rate was 30.8% for the third quarter of 2007. The 2007 tax rate was below the statutory rate of 35% primarily due to state tax credits~~ and the domestic manufacturing deduction, partially offset by state income taxes.

Net Sales. Net sales ~~increased~~decreased by ~~$154.7~~$338.0 million, or ~~27.1%~~51.2%, to ~~$725.1~~$322.8 million in the ~~third~~first quarter of ~~2008~~2009 from ~~$570.4~~$660.8 million in the ~~third~~first quarter of ~~2007.~~2008. This ~~increase~~decrease was primarily due to ~~higher~~lower sales volumes for all major products except styrene and lower sales prices for all major ~~products, partially offset by lower~~products. Average sales ~~volumes for ethylene~~prices and ~~polyethylene. Polyethylene sales~~ volumes ~~were negatively impacted by the hurricane activity but were also slowed as customers reduced their purchases in anticipation of lower polyethylene sales prices. Average selling prices~~ for the Olefins segment ~~increased~~decreased by ~~32.3%~~33.5% and 17.5%, respectively, in the ~~third~~first quarter of ~~2008~~2009 as compared to the ~~third~~first quarter of ~~2007.~~2008.

Income from Operations. Income from operations decreased by ~~$38.8~~$4.1 million, or ~~68.1%~~20.3%, to ~~$18.2~~$16.1 million in the ~~third~~first quarter of ~~2008~~2009 from ~~$57.0~~$20.2 million in the ~~third~~first quarter of ~~2007.~~2008. This decrease was primarily due to ~~the impact of Hurricanes Gustav and Ike, which caused two separate shut-downs of our Lake Charles facilities during the third quarter of 2008,~~ lower sales volumes and ~~higher feedstock, natural gas~~lower operating rates. The lower operating rates were primarily due to reduced polyethylene demand and ~~electricity costs, which~~the turnaround of one of our ethylene facilities in Lake Charles in the first quarter of 2009. These decreases were partially offset by ~~higher sales prices. Trading~~trading activity, which resulted in a ~~loss~~gain in the ~~third~~first quarter of ~~2008~~2009 of ~~$0.9~~$2.5 million as compared to a gain of ~~$1.6~~$0.1 million in the ~~third~~first quarter of ~~2007.~~2008.

Net Sales. Net sales ~~increased~~decreased by ~~$79.0~~$88.7 million, or ~~29.3%~~34.9%, to ~~$348.7~~$165.5 million in the ~~third~~first quarter of ~~2008~~2009 from ~~$269.7~~$254.2 million in the ~~third~~first quarter of ~~2007.~~2008. This ~~increase~~decrease was primarily due to ~~higher selling prices for most of our products and higher sales volumes for PVC resin, partially offset by~~ lower ~~PVC pipe sales volumes. Average selling prices for the Vinyls segment increased by 25.6% in the third quarter of 2008 as compared to the second quarter of 2007.~~

~~Income from Operations.~~ Income from operations increased by $25.1 million to $30.5 million in the third quarter of 2008 from $5.4 million in the third quarter of 2007. This increase was primarily due to increased prices for caustic, PVC resin, ethylene co-products and PVC pipe and higher sales volumes for PVC resin. These increases were partially offset by higher feedstock costs for propane and ethylene and lower PVC pipe sales volumes. The reduced demand for PVC downstream products has led to reduced demand for chlorine, which in turn, has resulted in higher prices and margins for caustic. The third quarter of 2007 was negatively impacted by $6.7 million due to a legal settlement and expenses associated with the litigation.

~~Nine Months Ended September 30, 2008 Compared with Nine Months Ended September 30, 2007~~

~~Net Sales.~~ ~~Net sales increased by $753.6 million to $3,095.2 million in the first nine months of 2008 from $2,341.6 million in the first nine months of 2007. This increase was primarily due to higher~~ sales prices for all of our major vinyls products except caustic and ~~higher~~lower sales ~~volumes for PVC resin.~~volumes. Average sales prices and volumes for the Vinyls segment decreased by 17.6% and 17.3%, respectively, in the first ~~nine months~~quarter of ~~2008 increased by 29.9%~~2009 as compared to the first ~~nine months~~quarter of ~~2007.~~2008.

~~Gross Margin.~~Income (loss) from Operations. ~~Gross margin percentage decreased to 6.6% in the first nine months~~The segment produced a loss from operations of 2008 from 9.8% in the first nine months of 2007. The decrease in gross margin percentage was primarily due to the increase in feedstock, natural gas and electricity costs, which were partially offset by higher sales prices. Our raw material cost in both segments normally tracks industry prices, which experienced an increase of 48.1% for ethane and 46.2% for propane as compared to the first nine months of 2007. Margins were also negatively impacted by Hurricanes Gustav and Ike during the third quarter of 2008 and a trading loss of $7.8$15.4 million in the first ~~nine months~~quarter of ~~2008~~2009 as compared to a ~~$6.4 million gain in the first nine months of 2007.~~

~~Selling, General and Administrative Expenses.~~ Selling, general and administrative expenses decreased $5.0 million, or 6.8%, in the first nine months of 2008 as compared to the first nine months of 2007. The decrease was primarily due to the transition costs related to the acquisition of the Longview facilities incurred in the first four months of 2007 and a legal settlement in the third quarter of 2007 and the associated reduction in legal expenses.

~~Interest Expense.~~Interest expense in the first nine months of 2008 increased by $13.1 million, to $25.9 million, from $12.8 million in the first nine months of 2007, primarily due to higher average debt outstanding for the period, largely as a result of our issuance of the 6³/4~~% senior notes in the fourth quarter of 2007.~~

~~Other Income, Net.~~ Other income, net increased by $4.9 million to $5.9 million in the first nine months of 2008 from $1.0 million in the first nine months of 2007 primarily due to higher interest income from the restricted cash balance associated with our 6³/4~~% senior notes, higher equity in income from our joint venture in China and a $0.9 million write-down of a long-term investment in 2007.~~

~~Income Taxes.~~ The effective income tax rate was 31.1% for the first nine months of 2008. The 2008 tax rate was below the statutory rate of 35% primarily due to state tax credits, the domestic manufacturing deduction, and a reduction of gross unrecognized tax benefits, partially offset by state income taxes. The effective tax rate was 32.9% for the first nine months of 2007. The 2007 tax rate was below the statutory rate of 35% primarily due to state tax credits and the domestic manufacturing deduction, partially offset by state income taxes.

~~Net Sales.~~ Net sales increased by $582.3 million, or 37.1%, to $2,151.8 million in the first nine months of 2008 from $1,569.5 million in the first nine months of 2007. This increase was primarily due to higher sales prices for all major products. Average selling prices for the Olefins segment increased by 35.2% in the first nine months of 2008 as compared to the first nine months of 2007.

~~Income from Operations.~~ ~~Income~~loss from operations ~~decreased by $30.9~~of $3.1 million ~~or 24.3%, to $96.1 million~~ in the first nine months of 2008 from $127.0 million in the first nine months of 2007. The decrease was largely due to the impact of Hurricanes Gustav and Ike, which caused two separate outages at the Lake Charles plant during the third quarter of 2008, the impact of a styrene plant turnaround in Lake Charles during the first quarter of 2008, ~~and the~~a decline of $12.3 million. The increase in ~~feedstock, natural gas and electricity costs, which were higher than the increase in sales prices. Trading activity resulted in a~~ loss of $7.8 million in the first nine months of 2008 as compared to a gain of $6.4 million in the first nine months of 2007. The first nine months of 2007 were negatively impacted by a major turnaround and an unscheduled outage at our ethylene units in Lake Charles.

~~Net Sales.~~ Net sales increased by $171.3 million, or 22.2%, to $943.4 million in the first nine months of 2008 from $772.1 million in the first nine months of 2007. This increase was due to higher selling prices for all major products and increased PVC resin sales volumes. Average selling prices for the Vinyls segment increased by 19.2% in the first nine months of 2008 as compared to the first nine months of 2007. These increases were partially offset by lower sales volumes for VCM and PVC pipe.

~~Income from Operations.~~ ~~Income~~ from operations ~~increased by $11.8 million, or 34.7%, to $45.8 million in the first nine months of 2008 as compared to $34.0 million in the first nine months of 2007. This increase~~ was primarily due to ~~higher~~lower sales ~~prices, which were partially offset by higher feedstock costs for propane~~volumes and ~~ethylene. Pricing and margins have been especially strong for caustic in the first nine months of 2008, but~~lower operating rates. Continued weakness in the construction ~~market continues to affect~~markets further reduced already low seasonal demand and reduced operating rates and margins in our vinyls downstream businesses. In addition, the ~~closure of~~ice storm at our ~~Pawling~~Calvert City facility caused an extended outage at that facility, adversely impacting production rates for all major products produced at Calvert City and resulted in ~~the first quarter of 2008 negatively impacted income from operations in the first nine months of 2008. Closure costs, including severance, inventory write-downs~~lost sales and ~~fixed asset impairments, totaled approximately $2.9 million in the first nine months of 2008. Results for the first nine months of 2007 were negatively impacted by $6.7 million~~margins due to ~~a legal settlement and expenses associated with~~ the ~~litigation.~~reduced production.

CASH FLOW DISCUSSION FOR ~~NINE~~THREE MONTHS ENDED ~~SEPTEMBER 30,~~MARCH 31, 2009 AND 2008 ~~AND 2007~~

Operating activities provided cash of ~~$76.6~~$120.3 million in the first ~~nine~~three months of ~~2008~~2009 compared to cash ~~provided~~used by operating activities of ~~$95.0~~$28.3 million in the first ~~nine~~three months of ~~2007.~~2008. The ~~$18.4~~$148.6 million ~~decrease~~increase in cash flows from operating activities was primarily due to ~~lower~~favorable changes in working capital, partially offset by a reduction in income from operations ~~in 2008~~ and ~~higher~~capitalized turnaround costs ~~partially offset by changes~~of $23.1 million resulting from the turnaround of our ethylene unit in ~~working capital.~~Lake Charles. Income from operations decreased by ~~$18.5~~$14.8 million in the first ~~nine~~three months of ~~2008~~2009 as compared to the first ~~nine~~three months of ~~2007.~~2008. Changes in components of working capital, which we define for purposes of this cash flow discussion as accounts receivable, inventories, prepaid expense and other current assets less accounts payable and accrued liabilities, ~~used~~provided cash of ~~$72.0~~$108.0 million in the first ~~nine~~three months of 2009 (including a federal tax refund of $30.0 million, resulting from over payment of 2008 federal income taxes), compared to ~~$83.7~~$48.7 million of cash used in the first ~~nine~~three months of ~~2007,~~2008, a favorable change of $156.7 million. This change was largely due to lower inventory and reduced accounts receivable primarily due to the decrease in ~~cash use of $11.7 million.~~average sales prices and feedstock costs from the prior year period.

Net cash used for investing activities during the first ~~nine~~three months of ~~2008~~2009 was ~~$126.2~~$40.4 million as compared to net cash used for investing activities of ~~$75.2~~$42.5 million in the first ~~nine~~three months of ~~2007.~~2008. Capital expenditures were ~~$127.2~~$32.8 million in the first ~~nine~~three months of ~~2008~~2009 compared to ~~$86.3~~$43.0 million in the first ~~nine~~three months of ~~2007.~~2008. The ~~increase~~decrease in capital expenditures in the ~~2008~~2009 period was largely due to expenditures related to the expansions at Calvert City ~~and~~during the ~~retrofitting of the new plant at Yucca.~~2008 period. The remaining capital expenditures in the ~~nine months~~first quarters of ~~2008~~2009 and ~~2007~~2008 primarily related to maintenance, safety and environmental projects. In addition, we purchased a PVC pipe plant in Janesville, Wisconsin for $6.3 million during the first quarter of 2009.

Net cash provided by financing activities during the first ~~nine~~three months of ~~2008~~2009 was ~~$47.2~~$9.2 million as compared to net cash provided of ~~$66.8~~$53.6 million in the first ~~nine~~three months of ~~2007.~~2008. The ~~2008~~2009 activity was primarily related to ~~borrowing~~ a ~~net $4.5~~$14.0 million ~~under our revolving credit facility and $55.0 million in draw-downs~~draw-down of our restricted cash for use for eligible capital expenditures, partially offset by the ~~$10.0 million~~ payment of cash ~~dividends and $2.5 million of fees in connection with the amendment of our revolving credit agreement. During the first nine months of 2007, we paid $8.5 million of cash dividends and borrowed~~dividends. The 2008 activity was primarily related to borrowing a net ~~$75.0~~$43.4 million under our revolving credit ~~facility.~~facility and a $13.5 million draw-down of our restricted cash, partially offset by the payment of cash dividends.

Our principal sources of liquidity are from cash and cash equivalents, restricted cash, cash from operations, short-term borrowings under our revolving credit facility and our long-term financing. ~~We recently~~In August 2008, we announced plans for the construction of a new chlor-alkali plant at our Geismar, Louisiana facility. ~~We expect this~~The project ~~will~~is currently estimated to cost between ~~$250.0~~$250 million and ~~$300.0~~

$300 million and ~~will~~would be partially funded with funds drawn from the proceeds of the issuance of the 6³/4% revenue bonds of the ~~Louisiana Local Government Environmental Facility and Development~~ Authority, issued in December 2007 for our benefit, which are currently held as restricted cash. We expect the remaining funding will come from our revolving credit facility, cash flow from operations and, possibly, our ability to obtain additional financing in the future. We believe that our sources of liquidity as described above will be adequate to fund our ~~cash requirements. Should~~normal operations and on-going capital expenditures. In addition, in response to the declining economic conditions, we ~~pursue~~have increased our focus on cost cutting and working capital reduction to improve our liquidity. Funding of any potential large expansions or any potential acquisitions of third-party assets may depend on our ability to obtain additional ~~expansions~~financing in the future. As of ~~existing assets~~March 31, 2009, the indenture governing our senior notes restricted us from incurring additional debt, except for specified permitted debt (including borrowings under our credit facility, additional borrowings under one or ~~acquisition~~more term loan facilities in an amount not to exceed $200 million and $100 million of ~~third party assets, the availability of~~other debt), because our fixed charge coverage ratio remained below 2.0 at March 31, 2009. We may not be able to access additional liquidity at cost effective interest rates ~~cannot be assured~~ due to the ~~current~~ volatility of the commercial credit markets. Despite the current economic downturn and the credit crisis, our management believes that our revolving credit facility should be available up to our borrowing base, if needed. At March 31, 2009, the borrowing base of our credit facility had declined to $235.3 million, which is below the maximum borrowing capacity of $400 million due to our low carrying amount of accounts receivable and inventory, which make up the borrowing base.

~~Cash~~Total cash balances ~~(excluding restricted cash)~~ were ~~$22.5~~$300.1 million at ~~September 30, 2008 compared to $24.9~~March 31, 2009, which included cash and cash equivalents of $179.3 million ~~at December 31, 2007.~~and restricted cash of $120.8 million. In addition, we have a revolving credit facility available to supplement cash if needed, as described under “Debt” below.

As of ~~September 30, 2008,~~March 31, 2009, our long-term debt, including current maturities, totaled ~~$515.9~~$510.3 million, consisting of $250.0 million principal amount of 6⁵/8% senior notes due 2016 (less the unamortized discount of ~~$0.6~~$0.5 million), $250.0 million of 6³/4% senior notes due 2032 and a $10.9 million loan from the proceeds of tax-exempt waste disposal revenue bonds (supported by an $11.3 million letter of credit) ~~and $5.6 million of borrowings under our revolving credit facility.~~. The 6³/4% senior notes evidence and secure our obligations to the ~~Louisiana Local Government Environmental Facility and Development~~ Authority ~~a political subdivision of the State of Louisiana (the “Authority”),~~ under a loan agreement relating to the issuance of $250.0 million aggregate principal amount of the Authority’s tax-exempt revenue bonds. Debt outstanding under the tax-exempt waste disposal revenue bonds bears interest at variable rates.

On September 8, 2008, we amended our senior secured revolving credit facility to, among other things, increase the lenders’ commitments under the facility from $300 million to $400 million. AsOn February 5, 2009, we further amended our revolving credit facility to allow us to make specified distributions when our fixed charge coverage ratio falls below 1.0 but we maintain at least $125 million to $200 million (depending on the amount of ~~September 30, 2008,~~the distribution) of borrowing availability, including cash, under the credit facility. At March 31, 2009, we had no borrowings outstanding under the revolving credit facility, ~~that bore~~and we had outstanding letters of credit totaling $14.2 million and borrowing availability of $235.3 million under the revolving credit facility. Any borrowings under the facility would bear interest at either LIBOR plus ~~2.25%~~a spread ranging from 2.75% to 3.50% or ~~the prime~~a base rate plus ~~0.75%~~a spread ranging from 1.25% to 2.0%. The revolving credit facility also requires an unused commitment fee ~~of 0.625%.~~ranging from 0.75% to 0.875%, depending on the average daily borrowings. All interest rates under the facility are subject to ~~quarterly~~monthly grid pricing adjustments based on prior month average daily loan availability. The revolving credit facility matures on September 8, 2013.

On December 13, 2007 the Authority issued $250.0 million of 6³/4% ~~exempt~~tax-exempt revenue bonds due November 1, 2032 under the Gulf Opportunity Zone Act of 2005. The bonds are non-callable through November 1, 2017. The bonds are subject to redemption and the holders may require the bonds to be repurchased upon a change of control or a change in or loss of the current tax status. In connection with the issuance of the bonds, we entered into a loan agreement with the Authority pursuant to which we agreed to pay all of the principal, premium, if any, and interest on the bonds and certain other amounts to the Authority. The proceeds from the bond offering were loaned by the Authority to us. We intend to use the proceeds to expand, refurbish and maintain certain of our facilities in the Louisiana Parishes of Calcasieu and Ascension. To evidence and secure our obligations under the loan agreement, we entered into a second supplemental indenture, by and among us, the subsidiary guarantors party thereto and The Bank of New York Trust Company, N.A., as trustee, and issued $250 million aggregate principal amount of our 6³/4% senior notes due 2032 to be held by the trustee pursuant to the terms and provisions of the loan agreement. The 6³/4% senior notes are unsecured and rank equally in right of payment with other existing and future unsecured senior indebtedness. All domestic restricted subsidiaries that guarantee other debt of ours or of another guarantor of the senior notes in excess of $5.0 million are guarantors of the senior notes. As of ~~September 30, 2008,~~March 31, 2009, we had drawn ~~$103.2~~$130.4 million of bond proceeds. The balance of the proceeds, principal plus current and accrued interest income, remains with a trustee, and is classified on our consolidated balance sheet as a non-current asset, restricted cash, until such time as we request reimbursement of amounts used to expand, refurbish and maintain our facilities in Calcasieu and Ascension Parishes.

On January 13, 2006, we issued $250.0 million of 6⁵/8% aggregate principal amount of senior notes due 2016. The 6⁵/8%senior notes are unsecured and were issued with an original issue discount of $0.8 million. There is no sinking fund and no scheduled amortization of the notes prior to maturity. The notes are subject to redemption and the holders may require us to repurchase the notes upon a change of control. All domestic restricted subsidiaries that guarantee other debt of ours or of another guarantor of the senior notes in excess of $5.0 million are guarantors of the notes.

The agreements governing the 6⁵/8% and the 6³/4% senior notes (together the “senior notes”) and the revolving credit facility each contain customary covenants and events of default. Accordingly, these agreements impose significant operating and financial restrictions on us. These restrictions, among other things, provide limitations on incurrence of additional indebtedness, the payment of dividends, certain investments and acquisitions and sales of assets. One such restriction currently restricts us from incurring additional debt, except specified permitted debt (including borrowings under our credit facility), because our fixed charge coverage ratio remained below 2.0 at March 31, 2009. These limitations are subject to a number of important qualifications and exceptions, including, without limitation, an exception for the payment of our regular quarterly dividend of up to ~~$0.21~~$0.20 per share (currently $0.0525 per share). The senior notes indenture does not allow distributions, unless, after giving pro forma effect to the distribution, our fixed charge coverage ratio is at least 2.0 and such payment, together with the aggregate amount of all other distributions after January 13, 2006, is less than the sum of 50% of our consolidated net income for the period from October 1,

2003 to the end of the most recent quarter for which financial statements have been filed, plus 100% of net cash proceeds received after October 1, 2003 as a contribution to our common equity capital or from the issuance or sale of certain securities, plus several other adjustments. The amount allowed under this restriction ~~was $508.9~~would have been $444.3 million at ~~September 30, 2008.~~March 31, 2009; however, because our fixed charge coverage ratio was below 2.0, the actual amount allowed was restricted to the payment of our regular quarterly dividend of up to $0.20 per share. The revolving credit facility also restricts ~~dividend payments~~distributions unless, after giving effect to such payment, our fixed charge coverage ratio is at least 1.0, provided that we may also make specified distributions when our fixed charge coverage ratio falls below 1.0 but we maintain at least between $125 million to $200 million (depending on the amount of the distributions) of borrowing availability, including cash, under the ~~line of~~ credit ~~equals or exceeds $75.0 million. None of the~~facility. No other agreements require us to maintain specified financial ~~ratios, except that the revolving credit facility requires us to maintain a minimum fixed charge coverage ratio of 1.0 when availability falls below $75.0 million.~~ratios. In addition, the senior notes indenture and the revolving credit facility restrict our ability to create liens, to engage in certain affiliate transactions and to engage in sale-leaseback transactions.

In December 1997, we entered into a loan agreement with a public trust established for public purposes for the benefit of the Parish of Calcasieu, Louisiana. The public trust issued $10.9 million principal amount of tax-exempt waste disposal revenue bonds (revenue bonds) in order to finance our construction of waste disposal facilities for an ethylene plant. The revenue bonds expire in December 2027 and are subject to redemption and mandatory tender for purchase prior to maturity under certain conditions. Interest on the revenue bonds accrues at a rate determined by a remarketing agent and is payable quarterly. The interest rate on the revenue bonds at ~~September 30,~~March 31, 2009 and December 31, 2008 was ~~8.23%.~~0.75% and 1.08%, respectively.

Our ability to make payments on our indebtedness and to fund planned capital expenditures 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, we believe our cash flow from operations, available cash and available borrowings under our revolving credit facility will be adequate to meet our ~~liquidity~~normal operating needs for the foreseeable future.

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. ~~These include~~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:

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. These statements are subject to a number of assumptions, risks and uncertainties, including those described in “Risk Factors” in Westlake Chemical Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, ~~2007~~2008 and the following:

Many of these 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.

A substantial portion of our products and raw materials are commodities whose prices fluctuate as market supply and demand fundamentals change. Accordingly, product margins and the level of our profitability tend to fluctuate with changes in the business cycle. We try to protect against such instability through various business strategies. Our strategies include ethylene product feedstock flexibility and moving downstream into the olefins and vinyls products where pricing is more stable. We use derivative instruments in certain instances to reduce price volatility risk on feedstocks and ~~products; however, we had no significant~~products. Based on our open derivative positions at ~~September 30, 2008.~~March 31, 2009, a hypothetical $0.10 increase in the price of a gallon of ethane would have increased our income before taxes by $0.2 million and a hypothetical $0.10 increase in the price per MMBTU of natural gas would have decreased our income before taxes by $0.4 million. Additional information concerning derivative commodity instruments appears in Note 7 to the consolidated financial statements.

We are exposed to interest rate risk with respect to fixed and variable rate debt. At ~~September 30, 2008,~~March 31, 2009, we had variable rate debt of ~~$16.5~~$10.9 million outstanding. All of the debt outstanding under our revolving credit facility (none was outstanding at March 31, 2009) and tax-exempt waste disposal revenue bonds is at variable rates. We do not currently hedge our variable interest rate debt, but we may do so in the future. The average variable interest rate for our variable rate debt of ~~$16.5~~$10.9 million as of ~~September 30, 2008~~March 31, 2009 was ~~7.38%~~0.75%. A hypothetical 100 basis point increase in the average interest rate on our variable rate debt would increase our annual interest expense by approximately ~~$0.2~~$0.1 million. Also, at ~~September 30, 2008,~~March 31, 2009, we had $500.0 million principal amount of ~~undiscounted~~ fixed rate debt. We are subject to the risk of higher interest cost if and when this debt is refinanced. If interest rates are 1% higher at the time of refinancing, our annual interest expense would increase by approximately $5.0 million.

We carried out an evaluation, under the supervision and with the participation of our management, including our President and Chief Executive Officer and our Senior Vice President, Chief Financial Officer and Treasurer, of the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15 under the Securities Exchange Act of 1934 as of the end of the period covered by this report. In the course of this evaluation, management considered certain internal control areas in which we have made and are continuing to make changes to improve and enhance controls. Based upon that evaluation, our President and Chief Executive Officer and our Senior Vice President, Chief Financial Officer and Treasurer concluded that our disclosure controls and procedures are effective, in all material respects, with respect to (i) the accumulation and communication to our management, including our Chief Executive Officer and our Chief Financial Officer, of information required to be disclosed by us in the reports that we submit under the Exchange Act, and (ii) the recording, processing, summarizing and reporting of such information within the time periods specified in the SEC’s rules and forms.

There were no changes in our internal control over financial reporting that occurred during the three months ended ~~September 30, 2008,~~March 31, 2009, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Westlake Chemical Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, ~~2007~~2008 (the ~~“2007~~“2008 Form 10-K”), filed on February ~~20, 2008,~~19, 2009, contained a description of various legal proceedings in which we are involved, including environmental proceedings at our facilities in Calvert City, Kentucky. See Note 1213 to the consolidated financial statements for ~~an update~~a description of certain of those proceedings, which information is incorporated by reference herein.

~~Other than the addition~~For a discussion of ~~the risk factor set forth below, there have been no material changes from the~~ risk factors, ~~as previously disclosed in~~please read Item 1A, “Risk Factors” in the ~~2007~~2008 Form 10-K.

~~The global financial crisis may have impacts on our business and financial condition that we currently cannot predict.~~

The continued credit crisis and related instability in the global financial system has had, and may continue to have, an impact on our business and our financial condition. We may face significant challenges if conditions in the financial markets do not improve. Our ability to access the capital markets may be severely restricted at a time when we would like, or need, to access such markets, which could have an impact on our flexibility to react to changing economic and business conditions. The credit crisis could have an impact on the lenders under our revolving credit facility or on our customers and suppliers, causing them to fail to meet their obligations to us. Additionally, the crisis could lead to reduced demand for our products, which could have a negative impact on our revenues.

The following table provides information on our purchase of equity securities during the quarter ended ~~September 30, 2008.~~March 31, 2009:

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 thereunto duly authorized.


Item		Page
PART I. FINANCIAL INFORMATION

	1) Financial Statements	3

	2) Management’s Discussion and Analysis of Financial Condition and Results of Operations	20

	3) Quantitative and Qualitative Disclosures about Market Risk	26

	4) Controls and Procedures	27

PART II. OTHER INFORMATION

	1) Legal Proceedings	28

	1A) Risk Factors	28

	2) Unregistered Sales of Equity Securities and Use of Proceeds	28

	6) Exhibits	28


	September 30, 2008			December 31, 2007
Accounts receivable — trade	$	540,077		$	498,073
Accounts receivable — affiliates		1,775			1,365
Allowance for doubtful accounts		(5,568	)		(3,546	)

		536,284			495,892
Accounts receivable — other		26,520			11,571

Accounts receivable, net	$	562,804		$	507,463


	March 31, 2009			December 31, 2008
Trade customers	$	246,876		$	293,318
Affiliates		1,270			1,226
Allowance for doubtful accounts		(13,705	)		(14,438	)

		234,441			280,106
Federal and state taxes		27,971			54,886
Other		18,599			12,331

Accounts receivable, net	$	281,011		$	347,323


Range of Prices	Options Outstanding	Weighted Average Remaining Contractual Life (Years)
$14.50—$20.83	432,726	8.0
$25.42—$36.10	479,174	8.1


	Level 1		Level 2		Total
Risk management liabilities	$	6,464	$	229	$	6,693


		Three Months Ended March 31,
Derivatives Not Designated as	Location of Gain (Loss)	2009			2008
Hedging Instruments Under SFAS 133	Recognized in Income on Derivative	Gain (Loss)			Gain (Loss)
Commodity contract	Cost of sales	$	4,030		$	492
Physical commodity	Cost of sales		(1,578	)		(358	)

Total		$	2,452		$	134


	Three Months Ended March 31, 2009
	Average Sales Price		Volume
Key product sales price and volume percentage change from prior year period
Olefins(1)	-33.5	%	-17.5	%
Vinyls(2)	-17.6	%	-17.3	%
Company average	-29.1	%	-17.5	%


Period	Total Number of Shares Purchased(1)	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs
July 2008	—		—	N/A	N/A
August 2008	—		—	N/A	N/A
September 2008	3,107	$	19.29	N/A	N/A

	3,107	$	19.29	N/A	N/A


Exhibit No.
10.1		~~Amended and Restated~~First Amendment to the Revolving Credit Agreement, dated ~~as of September 8, 2008~~February 5, 2009, by and among Westlake Chemical Corporation, certain of its domestic subsidiaries, Bank of America, N.A., in its capacity as agent for lenders, and lenders party thereto (incorporated by reference to ~~Exhibit 10.1 to~~ Westlake’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on ~~September 11, 2008)~~February 9, 2009).

31.1		Rule 13a – 14(a) / 15d – 14(a) Certification (Principal Executive Officer).

31.2		Rule 13a – 14(a) / 15d – 14(a) Certification (Principal Financial Officer).

32.1		Section 1350 Certification (Principal Executive Officer and Principal Financial Officer).


			WESTLAKE CHEMICAL CORPORATION

Date: ~~November 7, 2008~~	May 6, 2009	By:	/s/ Albert Chao
				Albert Chao
				President and Chief Executive Officer
				(Principal Executive Officer)

Date: ~~November 7, 2008~~	May 6, 2009	By:	/s/ M. Steven Bender
				M. Steven Bender
				Senior Vice President, Chief Financial Officer & Treasurer
				(Principal Financial Officer)


Range of Prices	Options Outstanding	Weighted Average Remaining Contractual Life (Years)
$14.24 - $19.29	904,856	8.8
$20.83 - $27.22	98,490	7.1
$30.07 - $36.10	399,381	7.8

Large accelerated filer

Accelerated filer

Non-accelerated filer

¨ (Do not check if a smaller reporting company)

Smaller reporting company