UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q



x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended ~~September~~June 30, ~~2017~~2018



¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the Transition Period from to

Commission File No. 001-32260

Westlake Chemical Corporation

(Exact name of Registrant as specified in its charter)



Delaware		76-0346924
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

2801 Post Oak Boulevard, Suite 600

Houston, Texas 77056

(Address of principal executive offices, including zip code)

(713) 960-9111

(Registrant's telephone number, including area code)

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 x No ¨

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

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

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, 2017~~July 26, 2018 was ~~129,107,447.~~129,656,702.

INDEX




Item	Page
PART I. FINANCIAL INFORMATION
1) Financial Statements	1
2) Management's Discussion and Analysis of Financial Condition and Results of Operations	3928
3) Quantitative and Qualitative Disclosures about Market Risk	5341
4) Controls and Procedures	5542

PART II. OTHER INFORMATION
1) Legal Proceedings	5642
1A) Risk Factors	5643
2) Unregistered Sales of Equity Securities and Use of Proceeds	5643
6) Exhibits	5744

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

WESTLAKE CHEMICAL CORPORATION

CONSOLIDATED BALANCE SHEETS

(Unaudited)


	September 30, 2017			December 31, 2016			June 30, 2018			December 31, 2017

	(in thousands of dollars, except par values and share amounts)						(in millions of dollars, except par values and share amounts)
ASSETS
Current assets
Cash and cash equivalents	$	678,233		$	459,453		$	482		$	1,531
Accounts receivable, net	1,142,979			938,743			1,261			1,001
Inventories	834,835			801,100			905			900
Prepaid expenses and other current assets	34,860			48,493			46			31
Restricted cash	8,626			160,527
Total current assets	2,699,533			2,408,316			2,694			3,463
Property, plant and equipment, net	6,343,637			6,420,062			6,468			6,412
Other assets, net
Goodwill	1,011,342			946,553			1,006			1,012
Customer relationships, net	635,884			611,615			569			616
Other intangible assets, net	166,166			175,839			149			161
Deferred charges and other assets, net	387,563			327,868
Total other assets, net	2,200,955			2,061,875
Other assets, net							460			412
Total assets	$	11,244,125		$	10,890,253		$	11,346		$	12,076
LIABILITIES AND EQUITY
Current liabilities
Accounts payable	$	560,804		$	496,259		$	582		$	600
Accrued liabilities	609,472			537,483			604			657
Term loan	—			149,341
Current portion of long-term debt, net							—			710
Total current liabilities	1,170,276			1,183,083			1,186			1,967
Long-term debt, net	3,349,402			3,678,654			2,666			3,127
Deferred income taxes	1,660,914			1,650,575			1,153			1,111
Pension and other post-retirement benefits	367,705			364,819			332			344
Other liabilities	144,329			121,077			163			158
Total liabilities	6,692,626			6,998,208			5,500			6,707
Commitments and contingencies (Note 18)
Commitments and contingencies (Note 12)
Stockholders' equity
Preferred stock, $0.01 par value, 50,000,000 shares authorized; no shares issued and outstanding	—			—			—			—
Common stock, $0.01 par value, 300,000,000 shares authorized; 134,651,380 and 134,651,380 shares issued at September 30, 2017 and December 31, 2016, respectively	1,347			1,347
Common stock, held in treasury, at cost; 5,551,693 and 5,726,377 shares at September 30, 2017 and December 31, 2016, respectively	(314,694		)	(319,339		)
Common stock, $0.01 par value, 300,000,000 shares authorized; 134,651,380 and 134,651,380 shares issued at June 30, 2018 and December 31, 2017, respectively							1			1
Common stock, held in treasury, at cost; 4,999,765 and 5,232,875 shares at June 30, 2018 and December 31, 2017, respectively							(289		)	(302		)
Additional paid-in capital	558,423			550,641			558			555
Retained earnings	3,837,644			3,412,286			5,125			4,613
Accumulated other comprehensive loss	(13,946		)	(121,306		)
Accumulated other comprehensive income (loss)							(33		)	7
Total Westlake Chemical Corporation stockholders' equity	4,068,774			3,523,629			5,362			4,874
Noncontrolling interests	482,725			368,416			484			495
Total equity	4,551,499			3,892,045			5,846			5,369
Total liabilities and equity	$	11,244,125		$	10,890,253		$	11,346		$	12,076

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

Table of Contents

WESTLAKE CHEMICAL CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016			2018			2017			2018			2017

	(in thousands of dollars, except per share data and share amounts)												(in millions of dollars, except per share data and share amounts)
Net sales	$	2,108,889		$	1,279,028		$	6,030,666		$	3,340,276		$	2,235		$	1,979		$	4,385		$	3,922
Cost of sales	1,610,837			1,076,895			4,759,637			2,641,192			1,683			1,576			3,291			3,153
Gross profit	498,052			202,133			1,271,029			699,084			552			403			1,094			769
Selling, general and administrative expenses	125,642			72,729			379,919			179,757			115			101			223			200
Transaction and integration-related costs	6,663			82,841			22,949			90,550
Amortization of intangibles													25			30			51			55
Integration-related costs													8			8			15			16
Income from operations	365,747			46,563			868,161			428,777			404			264			805			498
Other income (expense)
Interest expense	(40,036		)	(24,366		)	(118,784		)	(36,966		)	(31		)	(39		)	(68		)	(79		)
Other income, net	2,058			41,265			6,591			52,091			8			2			30			9
Income before income taxes	327,769			63,462			755,968			443,902			381			227			767			428
Provision for (benefit from) income taxes	108,619			(6,552		)	232,690			129,332
Provision for income taxes													93			68			182			124
Net income	219,150			70,014			523,278			314,570			288			159			585			304
Net income attributable to noncontrolling interests	8,318			4,352			21,429			14,656			10			6			20			13
Net income attributable to Westlake Chemical Corporation	$	210,832		$	65,662		$	501,849		$	299,914		$	278		$	153		$	565		$	291
Earnings per common share attributable to Westlake Chemical Corporation:
Basic	$	1.62		$	0.51		$	3.87		$	2.31		$	2.13		$	1.18		$	4.34		$	2.24
Diluted	$	1.61		$	0.51		$	3.85		$	2.29		$	2.12		$	1.17		$	4.31		$	2.23
Weighted average common shares outstanding:
Basic	129,069,186			128,793,661			129,033,597			129,519,577			129,624,291			129,051,227			129,554,528			129,015,507
Diluted	129,888,968			129,379,956			129,789,965			130,103,897			130,306,615			129,786,714			130,249,084			129,739,643
Dividends per common share	$	0.2100		$	0.1906		$	0.5912		$	0.5536		$	0.2100		$	0.1906		$	0.4200		$	0.3812

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

Table of Contents

WESTLAKE CHEMICAL CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017
2016

(in thousands of dollars)
Net income $ 219,150
$ 70,014
$ 523,278
$ 314,570
Other comprehensive income (loss), net of income taxes
Pension and other post-retirement benefits liability
Pension and other post-retirement reserves
   adjustment (excluding amortization)
—
(206 ) —
(412 )
Amortization of benefits liability 529
369
1,600
1,072
Income tax provision on pension and other post-
   retirement benefits liability
(193 ) (60 ) (543 ) (251 )
Foreign currency translation adjustments
Foreign currency translation 39,714
6,453
108,166
15,758
Income tax provision on foreign currency
   translation
(76 ) —
(1,603 ) —
Net unrealized holding gains (losses) on investments
Unrealized holding gains on investments —
1,550
—
61,524
Reclassification of net realized gains to net
   income
—
(52,401 ) —
(53,720 )
Income tax provision on available-for-sale
   investments
—
18,270
—
(2,805 )
Other (96 ) —
(260 ) —
Other comprehensive income (loss), net of income taxes 39,878
(26,025 ) 107,360
21,166
Comprehensive income 259,028
43,989
630,638
335,736
Comprehensive income attributable to
   noncontrolling interests, net of tax of $846 and
   $0 for the three months ended September 30, 2017
   and 2016, respectively; and $2,467 and $0 for
   the nine months ended September 30, 2017 and
   2016, respectively.
4,628
4,352
17,288
14,656
Comprehensive income attributable to Westlake
   Chemical Corporation
$ 254,400
$ 39,637
$ 613,350
$ 321,080



	Three Months Ended June 30,					Six Months Ended June 30,
	2018			2017		2018			2017

	(in millions of dollars)
Net income	$	288		$	159	$	585		$	304
Other comprehensive income (loss), net of income taxes
Pension and other post-retirement benefits liability
Amortization of benefits liability	—			1		—			1
Foreign currency translation adjustments
Foreign currency translation	(37		)	52		(43		)	71
Income tax benefit (provision) on foreign currency translation	(3		)	—		1			(2		)
Other comprehensive income (loss), net of income taxes	(40		)	53		(42		)	70
Comprehensive income	248			212		543			374
Comprehensive income attributable to noncontrolling interests, net of tax of $1 for the three months ended June 30, 2018 and 2017; and net of tax of $2 for the six months ended June 30, 2018 and 2017	6			7		18			15
Comprehensive income attributable to Westlake Chemical Corporation	$	242		$	205	$	525		$	359

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

Table of Contents

WESTLAKE CHEMICAL CORPORATION

CONSOLIDATED STATEMENTS OF ~~CASH FLOWS~~CHANGES IN STOCKHOLDERS' EQUITY

(Unaudited)

Nine Months Ended September 30,
2017 2016

(in thousands of dollars)
Cash flows from operating activities
Net income $ 523,278
$ 314,570
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization 448,533
227,193
Provision for doubtful accounts 3,771
1,176
Amortization of debt issuance costs 3,471
1,018
Stock-based compensation expense 16,740
6,588
Loss from disposition of property, plant and equipment 14,319
6,541
Gains realized on previously held shares of Axiall common stock and from sales of securities —
(53,720 )
Write-off of debt issuance costs 659
—
Deferred income taxes 23,294
105,910
Windfall tax benefits from share-based payment arrangements —
(1,190 )
Dividends in excess of income from equity method investments (2,132 ) (61 )
Gain on involuntary conversion of assets (1,672 ) —
Other losses (gains), net (6,659 ) 833
Changes in operating assets and liabilities, net of effect of business acquisitions
Accounts receivable (185,153 ) (92,311 )
Inventories 23,945
(6,124 )
Prepaid expenses and other current assets 16,788
1,631
Accounts payable 60,899
34,109
Accrued liabilities 57,419
73,157
Other, net (34,836 ) (75,160 )
Net cash provided by operating activities 962,664
544,160
Cash flows from investing activities
Acquisition of business, net of cash acquired —
(2,437,829 )
Additions to property, plant and equipment (414,271 ) (467,330 )
Additions to cost method investment (47,000 ) (4,000 )
Proceeds from disposition of assets 171
213
Proceeds from involuntary conversion of assets 1,672
—
Proceeds from sales and maturities of securities —
662,938
Purchase of securities —
(138,422 )
Settlements of derivative instruments (7 ) (4,655 )
Net cash used for investing activities (459,435 ) (2,389,085 )
Cash flows from financing activities
Debt issuance costs (376 ) (35,207 )
Dividends paid (76,491 ) (71,933 )
Distributions to noncontrolling interests (20,767 ) (12,300 )
Net proceeds from issuance of Westlake Chemical Partners LP common units 110,739
—
Proceeds from debt issuance —
1,428,512
Proceeds from issuance of notes payable 5,946
5,597
Proceeds from term loan and drawdown of revolver 225,000
600,000
Restricted cash associated with term loan 154,000
(154,000 )
Repayment of term loan (150,000 ) —
Repayment of notes payable (6,695 ) (10,602 )
Repayment of revolver (550,000 ) (125,000 )
Repurchase of common stock for treasury —
(67,406 )
Other 2,204
2,840
Net cash provided by (used for) financing activities (306,440 ) 1,560,501
Effect of exchange rate changes on cash and cash equivalents 21,991
2,418
Net increase (decrease) in cash and cash equivalents 218,780
(282,006 )
Cash and cash equivalents at beginning of period 459,453
662,525
Cash and cash equivalents at end of period $ 678,233
$ 380,519



	Common Stock			Common Stock, Held in Treasury
	Number of Shares	Amount		Number of Shares		At Cost			Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Noncontrolling Interests			Total

	(in millions of dollars, except share amounts)
Balances at December 31, 2016	134,651,380	$	1	5,726,377		$	(319	)	$	551		$	3,412		$	(121	)	$	368		$	3,892
Net income	—	—		—		—			—			291			—			13			304
Other comprehensive income	—	—		—		—			—			—			67			3			70
Shares issued—stock- based compensation	—	—		(127,901	)	3			(2		)	—			—			—			1
Stock-based compensation, net of tax on stock options exercised	—	—		—		—			7			—			—			—			7
Dividends declared	—	—		—		—			—			(49		)	—			—			(49		)
Distributions to noncontrolling interests	—	—		—		—			—			—			—			(16		)	(16		)
Balances at June 30, 2017	134,651,380	$	1	5,598,476		$	(316	)	$	556		$	3,654		$	(54	)	$	368		$	4,209

Balances at December 31, 2017	134,651,380	$	1	5,232,875		$	(302	)	$	555		$	4,613		$	7		$	495		$	5,369
Cumulative effect of accounting change	—	—		—		—			—			1			—			—			1
Net income	—	—		—		—			—			565			—			20			585
Other comprehensive loss	—	—		—		—			—			—			(40		)	(2		)	(42		)
Shares issued—stock- based compensation	—	—		(233,110	)	13			(5		)	—			—			—			8
Stock-based compensation, net of tax on stock options exercised	—	—		—		—			8			—			—			—			8
Dividends declared	—	—		—		—			—			(54		)	—			—			(54		)
Distributions to noncontrolling interests	—	—		—		—			—			—			—			(29		)	(29		)
Balances at June 30, 2018	134,651,380	$	1	4,999,765		$	(289	)	$	558		$	5,125		$	(33	)	$	484		$	5,846

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

Table of Contents

WESTLAKE CHEMICAL CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)



	Six Months Ended June 30,
	2018			2017

	(in millions of dollars)
Cash flows from operating activities
Net income	$	585		$	304
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization	312			295
Stock-based compensation expense	11			11
Loss from disposition of property, plant and equipment	15			7
Deferred income taxes	45			15
Other gains, net	—			(1		)
Changes in operating assets and liabilities
Accounts receivable	(272		)	(142		)
Inventories	(9		)	21
Prepaid expenses and other current assets	(13		)	5
Accounts payable	(11		)	82
Accrued liabilities	(70		)	(87		)
Other, net	(44		)	(30		)
Net cash provided by operating activities	549			480
Cash flows from investing activities
Additions to property, plant and equipment	(312		)	(281		)
Additions to investments in unconsolidated subsidiaries	(45		)	(31		)
Other	3			2
Net cash used for investing activities	(354		)	(310		)
Cash flows from financing activities
Dividends paid	(54		)	(49		)
Distributions to noncontrolling interests	(29		)	(16		)
Proceeds from notes payable and drawdown of revolver	6			178
Repayment of term loan	—			(150		)
Repayment of revolver	—			(360		)
Redemption and repayment of notes payable	(1,173		)	(5		)
Other	8			1
Net cash used for financing activities	(1,242		)	(401		)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(2		)	13
Net decrease in cash, cash equivalents and restricted cash	(1,049		)	(218		)
Cash, cash equivalents and restricted cash at beginning of period	1,554			646
Cash, cash equivalents and restricted cash at end of period	$	505		$	428

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

Table of Contents

WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(in ~~thousands~~millions of dollars, except share amounts and per share data)

1. Basis of 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 ("U.S. GAAP") have not been included. These interim consolidated financial statements should be read in conjunction with the December 31, ~~2016~~2017 consolidated 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, ~~2016~~2017 (the "~~2016~~2017 Form 10-K"), filed with the SEC on February ~~22, 2017.~~21, 2018. These consolidated 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, ~~2016.~~2017 with the exception of those accounting standards adopted in the first quarter of 2018 as discussed in Note 1.

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~~June 30, ~~2017~~2018, its results of operations for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 and ~~2016~~2017 and the changes in its cash position for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 and ~~2016~~2017.

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 fiscal year ending December 31, ~~2017~~2018 or any other interim period. The preparation of consolidated financial statements in conformity with U.S. GAAP 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.

Certain reclassifications have been made to the prior-year financial statements to conform to the current-year presentation.

Recent Accounting Pronouncements

~~Revenue from Contracts with Customers (ASU No. 2014-09)~~

In May 2014, the Financial Accounting Standards Board ("FASB") issued an accounting standards update on a comprehensive new revenue recognition standard that will supersede the existing revenue recognition guidance. The new accounting guidance creates a framework by which an entity will allocate the transaction price to separate performance obligations and recognize revenue when each performance obligation is satisfied. Under the new standard, entities will be required to use judgment and make estimates, including identifying performance obligations in a contract, estimating the amount of variable consideration to include in the transaction price, allocating the transaction price to each separate performance obligation and determining when an entity satisfies its performance obligations. The standard allows for either "full retrospective" adoption, meaning that the standard is applied to all of the periods presented with a cumulative catch-up as of the earliest period presented, or "modified retrospective" adoption, meaning the standard is applied only to the most current period presented in the financial statements with a cumulative catch-up as of the current period. In 2016, the FASB issued various additional authoritative guidance for the new revenue recognition standard. The accounting standard will be effective for reporting periods beginning after December 15, 2017. The Company is in the process of evaluating the impact that the new accounting standard will have on its consolidated financial position, results of operations and cash flows. The Company has completed a preliminary assessment including detailed review of a representative sample of contracts with customers. The Company does not believe that adoption of the new accounting standard will materially impact timing or amounts of revenue recognized for the majority of its sales. The Company intends to elect the modified retrospective method of adoption.

~~WESTLAKE CHEMICAL CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued~~

~~(Unaudited)~~

~~(in thousands of dollars, except share amounts and per share data)~~

~~Recognition and Measurement of Financial Assets and Financial Liabilities (ASU No. 2016-01)~~

In January 2016, the FASB issued an accounting standards update making certain changes principally to the current guidance for equity investments, financial liabilities under the fair value option and the presentation and disclosure requirements for financial instruments. Among other things, the guidance (1) requires equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value, with changes in fair value recognized in net income; (2) provide entities with a policy election to record equity investments without readily determinable fair values at cost, less impairment, and subsequent adjustments for observable price changes (changes in the basis of these equity investments to be reported in net income); (3) requires an entity that has elected the fair value option for financial liabilities to recognize changes in fair value due to instrument-specific credit risk separately in other comprehensive income; (4) clarified current guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities; and (5) requires specific disclosure pertaining to financial assets and financial liabilities in the financial statements. The accounting standard will be effective for reporting periods beginning after December 15, 2017. The Company is in the process of evaluating the impact that the new accounting guidance will have on its consolidated financial position, results of operations and cash flows.

Leases (ASU No. 2016-02)

In February 2016, the ~~FASB~~Financial Accounting Standards Board ("FASB") issued an accounting standards update on a new lease standard that will supersede the existing lease guidance. The standard requires a lessee to recognize assets and liabilities related to long-term leases that are classified as operating leases under current guidance on its balance sheet. An asset would be recognized related to the right to use the underlying asset and a liability would be recognized related to the obligation to make lease payments over the term of the lease. The standard also requires expanded disclosures related to leases. The accounting standard will be effective for reporting periods beginning after December 15, 2018. The standard requires adoption using a modified retrospective approach and allows for the election of certain transition practical expedients. The Company is in the process of reviewing its existing lease agreements and evaluating the impact that the new accounting guidance will have on the Company's consolidated financial position, results of operations and cash flows.

Credit Losses (ASU No. 2016-13)

In June 2016, the FASB issued an accounting standards update providing new guidance for the accounting for credit losses on loans and other financial instruments. The new guidance introduces an approach based on expected losses to estimate credit losses on certain types of financial instruments. The standard also modifies the impairment model for available-for-sale debt securities and provides for a simplified accounting model for purchased financial assets with credit deterioration since their origination. The accounting standard will be effective for reporting periods beginning after December 15, 2019 and is not expected to have a material impact on the Company's consolidated financial position, results of operations and cash flows.

WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)

(in millions of dollars, except share amounts and per share data)

Intangibles - Goodwill and Other (ASU No. 2017-04)

In January 2017, the FASB issued an accounting standards update to simplify the subsequent measurement of goodwill. The guidance removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit's carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The accounting standard will be effective for reporting periods beginning after December 15, 2019 and is not expected to have a material impact on the Company's consolidated financial position, results of operations and cash flows.

Income Statement - Reporting Comprehensive Income (ASU 2018-02)

In February 2018, the FASB issued an accounting standards update to (1) allow reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the U.S. Tax Cuts and Jobs Act (the "Tax Act"); and (2) require certain disclosures about stranded tax effects. The accounting standard will be effective for reporting periods beginning after December 15, 2018. Early adoption is permitted. The Company is in the process of evaluating the impact that the new accounting guidance will have on the Company's consolidated financial position, results of operations and cash flows.

Recently Adopted Accounting Standards

Revenue from Contracts with Customers (ASU No. 2014-09)

In May 2014, the FASB issued an accounting standards update on a comprehensive new revenue recognition standard that supersedes virtually all previously issued revenue recognition guidance. The new accounting guidance creates a framework by which an entity will allocate the transaction price to separate performance obligations and recognize revenue when each performance obligation is satisfied. Under the new standard, entities are required to use judgment and make estimates, including identifying performance obligations in a contract, estimating the amount of variable consideration to include in the transaction price, allocating the transaction price to each separate performance obligation and determining when an entity satisfies its performance obligations. The standard allows for "modified retrospective" adoption, meaning the standard is applied only to the most current period presented in the financial statements with a cumulative catch-up as of the current period.

The Company adopted ASU No. 2014-09, Revenue from Contracts with Customers ("ASC 606"), effective January 1, 2018. The Company applied the modified retrospective transition method to all contracts that were not completed as of the adoption date. Periods prior to January 1, 2018 were not adjusted and are reported under the accounting standards that were in place during those periods. The cumulative effects of changes to the Company's consolidated January 1, 2018 balance sheet for the adoption of this accounting standard were immaterial.

The impact of ASC 606 adoption on the financial statements for the three and six months ended June 30, 2017 as compared with the guidance that was in effect prior to January 1, 2018 was immaterial.

Revenue is recognized when the Company transfers control of inventories to its customers. Amounts recognized as revenues reflect the consideration to which the Company expects to be entitled in exchange for those inventories. Provisions for discounts, rebates and returns are incorporated in the estimate of variable consideration and reflected as reduction to revenue in the same period as the related sales.

Control of inventories generally transfers upon shipment for domestic sales. The Company excludes taxes collected on behalf of customers from the estimated contract price. For export contracts, the point at which control passes to the customer varies depending on the terms specified in the customer contract.

The Company generally invoices customers and recognizes revenue and accounts receivable upon transferring control of inventories. In limited circumstances, the Company transfers control of inventories shortly before it has an unconditional right to receive consideration, resulting in recognition of contract assets. The Company also receives advance payments from certain customers, resulting in recognition of contract liabilities. Contract assets and liabilities are generally settled within the period and are not material to the consolidated balance sheets.

The Company expenses sales commissions when incurred. These costs are recorded within selling, general and administrative expenses. The Company does not disclose the value of unsatisfied performance obligations because its contracts with customers (i) have an original expected duration of one year or less or (ii) have only variable consideration that is calculated based on market prices at specified dates and is allocated to wholly unsatisfied performance obligations.

WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)

(in millions of dollars, except share amounts and per share data)

ASC 606 requires disclosure of disaggregated revenue into categories that depict the nature of how the Company's revenue and cash flows are affected by economic factors. The Company discloses revenues by product and segment in Note 13 to this quarterly report on Form 10-Q.

Recognition and Measurement of Financial Assets and Financial Liabilities (ASU No. 2016-01)

In January 2016, the FASB issued an accounting standards update making certain changes principally to the current guidance for equity investments, financial liabilities under the fair value option and the presentation and disclosure requirements for financial instruments. Among other things, the guidance (1) requires equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value, with changes in fair value recognized in net income; (2) allows entities to elect to measure equity investments without readily determinable fair values at cost, less impairment, adjusted for subsequent observable price changes (changes in the basis of these equity investments to be reported in net income); (3) requires an entity that has elected the fair value option for financial liabilities to recognize changes in fair value due to instrument-specific credit risk separately in other comprehensive income; (4) clarified current guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities; and (5) requires specific disclosure pertaining to financial assets and financial liabilities in the financial statements. The accounting standard became effective for reporting periods beginning after December 15, 2017. The Company adopted this accounting standard effective January 1, 2018 and the adoption did not have a material impact on the Company's consolidated financial position, results of operations and cash flows. The Company is party to a joint venture investment with Lotte Chemical USA Corporation to build an ethylene facility, LACC, LLC ("LACC"). The Company measures its investment in LACC at cost, adjusted for observable price changes because the investment does not have a readily determinable fair value.

Cash Flows (ASU No. 2016-15)

In August 2016, the FASB issued an accounting standards update providing new guidance on the classification of certain cash receipts and payments including debt extinguishment costs, debt prepayment costs, settlement of zero-coupon debt instruments, contingent consideration payments, proceeds from the settlement of insurance claims and life insurance policies and distributions received from equity method investees in the statement of cash flows. This update is required to be applied using the retrospective transition method to each period presented unless it is impracticable to be applied retrospectively. In such situation, this guidance is to be applied prospectively. The accounting standard ~~will be~~became effective for reporting periods beginning after December 15, ~~2017~~2017. The Company adopted this accounting standard effective January 1, 2018 and isthe adoption did not ~~expected to~~ have a material impact on the Company's consolidated financial position, results of operations and cash flows.

Cash Flows (ASU No. 2016-18)

In November 2016, the FASB issued an accounting standards update to clarify certain existing principles in Accounting Standards Codification ~~("ASC")~~ 230, Cash flows, including providing additional guidance related to transfers between cash and restricted cash and how entities present, in their statement of cash flows, the cash receipts and cash payments that directly affect the restricted cash accounts. The accounting standard ~~will be~~became effective for reporting periods beginning after December 15, 2017. The Company adopted this accounting standard effective January 1, 2018. Upon adoption, ~~of the accounting standards update,~~ the Company ~~will~~ retrospectively ~~adjust~~adjusted its financial statements to reflect restricted cash in the beginning and ending cash and restricted cash balances within the statements of cash flows. ~~Transfers between cash~~As a result of this retrospective adoption and reclassification of restricted ~~cash will be excluded from net changes in~~ cash and cash equivalents, ~~within~~net cash provided by (used for) financing activities on the ~~statements~~consolidated statement of cash ~~flows.~~flows for the six months ended June 30, 2017 has been adjusted to $(401) from the originally reported $(247) to reflect the retrospective application of the new accounting guidance. Previously reported cash and cash equivalents at beginning of the period and cash and cash equivalents at end of the period for the six months ended June 30, 2017 have been adjusted to include restricted cash of $186 and $32, respectively.

WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)

(in ~~thousands~~millions of dollars, except share amounts and per share data)

Business Combinations (ASU No. 2017-01)

In January 2017, the FASB issued an accounting standards update to assist entities with evaluating when a set of transferred assets and activities is a business. The guidance requires an entity to evaluate if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets; if so, the set of transferred assets and activities is not a business. The guidance also requires a business to include at least one substantive process and narrows the definition of outputs by more closely aligning it with how outputs are described in ~~the~~ ASC ~~606, Revenue from contracts with customers.~~606. The accounting standard ~~will be~~became effective for reporting periods beginning after December 15, ~~2017 and is not expected to have a material impact on~~2017. The Company adopted the ~~Company's consolidated financial position, results of operations and cash flows.~~

~~Intangibles - Goodwill and Other (ASU No. 2017-04)~~

In January 2017, the FASB issued an accounting standards update to simplify the subsequent measurement of goodwill. The guidance removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit's carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The accounting standard ~~will be~~ effective ~~for reporting periods beginning after December 15, 2019~~January 1, 2018 and isthe adoption did not ~~expected to~~ have a material impact on the Company's consolidated financial position, results of operations and cash flows.

Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (ASU No. 2017-05)

In February 2017, the FASB issued an accounting standards update to clarify the scope of guidance related to other income—gains and losses from the derecognition of nonfinancial assets, and to add guidance for partial sales of nonfinancial assets. The new guidance clarifies that an in substance nonfinancial asset is an asset or group of assets for which substantially all of the fair value consists of nonfinancial assets and the group or subsidiary is not a business. The guidance also outlines that when an entity transfers its controlling interest in a nonfinancial asset, but retains a noncontrolling interest, it will measure the retained interest at fair value resulting in full gain or loss recognition upon sale of the controlling interest. The accounting standard ~~will be~~became effective for reporting periods beginning after December 15, ~~2017~~2017. The Company adopted this accounting standard effective January 1, 2018 and isthe adoption did not ~~expected to~~ have a material impact on the Company's consolidated financial position, results of operations and cash flows.

Compensation - Retirement Benefits (ASU No. 2017-07)

In March 2017, the FASB issued an accounting standards update to improve the presentation of net periodic pension cost and net periodic postretirement benefit cost. The new guidance requires employers to disaggregate the service cost component from the other components of net periodic benefit cost and report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The amendments also allow only the service cost component to be eligible for capitalization when applicable. The accounting standard ~~will be~~became effective for reporting periods beginning after December 15, 2017. The Company ~~is in~~adopted this accounting standard effective January 1, 2018 and the ~~process of evaluating~~adoption did not have a material impact on the ~~impact that the new accounting guidance will have on its~~Company's consolidated financial position, results of operations and cash flows.

Compensation - Stock Compensation (ASU No. 2017-09)

In May 2017, the FASB issued ~~the~~an accounting standards update to provide clarity and reduce both (1) diversity in practice and (2) cost and complexity when applying the guidance in Topic 718, Compensation-Stock Compensation, to a change to the terms or conditions of a share-based payment award. The amendments in this update provide guidance about which changes to the terms or conditions of a share-based payment award require the application of modification accounting in Topic 718. Essentially, an entity will not have to account for the effects of a modification if: (1) the fair value of the modified award is the same immediately before and after the modification; (2) the vesting conditions of the modified award are the same immediately before and after the modification; and (3) the classification of the modified award as either an equity instrument or liability instrument is the same immediately before and after the modification. This update is to be applied prospectively to an award modified on or after the adoption date. The accounting standard ~~will be~~became effective for reporting periods beginning after December 15, 2017. ~~Early adoption is permitted.~~ The Company ~~is in~~adopted this accounting standard effective January 1, 2018 and the ~~process of evaluating~~adoption did not have a material impact on the ~~impact that the new accounting guidance will have on its~~Company's consolidated financial position, results of operations and cash flows.

~~WESTLAKE CHEMICAL CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued~~

~~(Unaudited)~~

~~(in thousands of dollars, except share amounts and per share data)~~

Derivatives and Hedging - Targeted Improvements to Accounting for Hedging Activities (ASU No. 2017-12)

In August 2017, the FASB issued an accounting standards update to improve financial reporting of hedging relationships, to better portray the economic results of an entity's risk management activities in the financial statements and to simplify application of hedge accounting guidance. The accounting standard eliminates certain hedge effectiveness measurement and reporting requirements and expands the types of permissible hedging strategies. The accounting standard will be effective for reporting periods beginning after December 15, 2018, and interim periods within those fiscal years. Early application is permitted in any interim period after issuance, to be applied retrospectively to the beginning of the fiscal year. The Company ~~is in the process of evaluating the impact that the new accounting guidance will have on its consolidated financial position, results of operations and cash flows.~~

~~Recently Adopted Accounting Standards~~

~~Investments - Equity Method and Joint Ventures (ASU No. 2016-07)~~

In March 2016, the FASB issued an accounting standards update providing new guidance for the accounting for equity method investments. The new guidance eliminates the requirement that when an investment qualifies for use of the equity method as a result of an increase in the level of ownership interest or degree of influence, an investor must adjust the investment, results of operations and retained earnings retroactively on a step-by-step basis as if the equity method had been in effect during all previous periods that the investment had been held. In addition, the guidance requires that the equity method investor add the cost of acquiring the additional interest in the investee to the current basis of the investor's previously held interest and adopt the equity method of accounting as of the date the investment becomes qualified for equity method accounting. Therefore, upon qualifying for the equity method of accounting, no retroactive adjustment of the investment is required. The accounting standard became effective for reporting periods beginning after December 15, 2016. The Company adopted this accounting standard effective January 1, ~~2017 and the adoption did not have a material impact on the Company's consolidated financial position, results of operations and cash flows.~~

~~Stock Compensation (ASU No. 2016-09)~~

In March 2016, the FASB issued an accounting standards update to simplify several aspects of the accounting for share-based payment transactions, including income tax consequences, classifications of awards as either equity or liabilities and certain related classifications on the statement of cash flows. In addition, the new guidance permits entities to make an accounting policy election for the impact of forfeitures on the recognition of expense for share-based payment awards. Forfeitures can be estimated, as required prior to adoption of the accounting standards update, or recognized when they occur. The accounting standard became effective for reporting periods beginning after December 15, 2016. The Company adopted this accounting standard effective January 1, 2017 and elected to continue estimating forfeitures as required prior to adoption of the accounting standards update. The adoption did not have a material impact on the Company's consolidated financial position, results of operations and cash flows.

~~Amendments to the Consolidation Analysis (ASU No. 2016-17)~~

In October 2016, the FASB issued an accounting standards update making certain changes to the current consolidation guidance. The amendments affect reporting entities that are required to evaluate whether they should consolidate a variable interest entity in certain situations involving entities under common control. Specifically, the amendments change the evaluation of whether a reporting entity is the primary beneficiary of a variable interest entity by changing how a reporting entity that is a single decision maker of a variable interest entity treats indirect interests in the entity held through related parties that are under common control with the reporting entity. The amendments became effective for annual periods beginning after December 15, 2016. The Company adopted this accounting standard, to be applied prospectively, effective January 1, 2017,2018 and the adoption did not have a material impact on the Company's consolidated financial position, results of operations and cash flows.

WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)

(in ~~thousands~~millions of dollars, except share amounts and per share data)

2. ~~Acquisition~~Financial Instruments

~~On August~~Cash Equivalents

The Company had $85 and $644 of held-to-maturity securities with original maturities of three months or less, primarily consisting of corporate debt securities, classified as cash equivalents at June 30, 2018 and December 31, 2016, the Company completed its acquisition of, and acquired all the remaining equity interest in, Axiall Corporation ("Axiall"), a Delaware corporation. Prior to the acquisition, the Company held 3.1 million shares in Axiall. Pursuant to the terms of the Agreement and Plan of Merger, dated as of June 10, 2016, by and among Westlake, Axiall and Lagoon Merger Sub, Inc., a Delaware corporation that is a wholly-owned subsidiary of Westlake ("Merger Sub"), the Company acquired all of the remaining issued and outstanding shares of common stock of Axiall for $33.00 per share in cash. Pursuant to the Merger Agreement, Merger Sub was merged with and into Axiall and Axiall survived the merger as a wholly-owned subsidiary of the Company (the "Merger"). The combined company is the third-largest global chlor-alkali producer and the third-largest global polyvinyl chloride ("PVC") producer.2017, respectively. The Company's ~~management believes that this strategic acquisition will enhance its strategy of integration and will further strengthen its role~~investments in ~~the North American markets.~~

Axiall produces a highly integrated chain of chlor-alkali and derivative products, including chlorine, caustic soda, vinyl chloride monomer ("VCM"), PVC resin, PVC compounds and chlorinated derivative products. Axiall also manufactures and sells building products, including siding, trim, mouldings, pipe and pipe fittings.

Total consideration transferred for the Merger was $2,539,360. The Merger was accounted for under the acquisition method of accounting. The assets acquired and liabilities assumed and the results of operations of the acquired business are included in the Company's Vinyls segment.

For the nine months ended September 30, 2016, the Company recognized $90,550 of transaction and integration-related costs. This included acquisition-related costs of $43,895 for advisory, consulting and professional fees and other expenses during the nine months ended September 30, 2016. Transaction and integration-related costs also included $46,655 during the nine months ended September 30, 2016 related to the settlement of Axiall share-based awards, retention agreement costs and severance benefits provided to former Axiall employees in connection with the Merger.

~~The following table summarizes the consideration transferred and the estimated~~held-to-maturity securities were held at amortized cost, which approximates fair value of identified assets acquired and liabilities assumed at the date of acquisition. The allocation of the consideration transferred is based on management's estimates, judgments and assumptions. When determining the fair values of assets acquired, liabilities assumed and noncontrolling interests of the acquiree, management made significant estimates, judgments and assumptions. Management estimated that consideration paid exceeded the fair value of the net assets acquired. Therefore, goodwill of $942,096 was recorded. The goodwill recognized is primarily attributable to synergies related to the Company's vinyls integration strategy that are expected to arise from the Merger. All of the goodwill is assigned to the Company's Vinyls segment. As a portion of the goodwill arising from the Merger is attributable to foreign operations, there will be a continuing foreign currency impact to goodwill in the consolidated financial statements.

~~WESTLAKE CHEMICAL CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued~~

~~(Unaudited)~~

~~(in thousands of dollars, except share amounts and per share data)~~

Final Purchase Consideration as of August 31, 2016
Closing stock purchase:
Offer per share $ 33.00
Multiplied by number of shares outstanding at acquisition (in thousands of shares) 67,277
Fair value of Axiall shares outstanding purchased by the Company 2,220,141
Plus:
Axiall debt repaid at acquisition 247,135
Seller's transaction costs paid by the Company ⁽¹⁾
47,458
Total fair value of consideration transferred 2,514,734

Fair value of Axiall share-based awards attributed to pre-combination service ⁽²⁾
11,346
Additional settlement value of shares acquired 13,280
Purchase consideration 2,539,360

Fair value of previously held equity interest in Axiall ⁽³⁾
102,300
Total fair value allocated to net assets acquired $ 2,641,660

~~_____________~~


~~(1)~~	Transaction costs incurred by the seller included legal and advisory costs incurred for the benefit of Axiall's former shareholders and board of directors to evaluate the Company's initial Merger proposals, explore strategic alternatives and negotiate the purchase price.


~~(2)~~	The fair value of share-based awards attributable to pre-combination service includes the ratio of the pre-combination service performed to the original service period of the Axiall restricted share units and options, including related dividend equivalent rights.


~~(3)~~	Prior to the Merger, the Company owned 3.1 million shares in Axiall. The investment in Axiall was carried at estimated fair value with unrealized gains recorded as a component of accumulated other comprehensive loss in the consolidated balance sheet. The Company recognized a $49,080 gain for the investment in other income, net in the consolidated statements of operations upon gaining control.

~~WESTLAKE CHEMICAL CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued~~

~~(Unaudited)~~

~~(in thousands of dollars, except share amounts and per share data)~~

~~The following table summarizes the purchase price allocation:~~

Net Assets Acquired as of August 31, 2016
Cash $ 88,251
Accounts receivable ⁽¹⁾
422,274
Income tax receivable 50,980
Inventories ⁽²⁾
349,205
Prepaid expenses and other current assets 55,462
Property, plant and equipment ⁽²⁾
2,942,162
Customer relationships (weighted average lives of 9.8 years) ⁽³⁾
670,000
Other intangible assets:
Trade name (weighted average lives of 6.8 years) 50,000
Technology (weighted average lives of 5.4 years) 41,500
Supply contracts and leases (weighted average lives of 6.3 years) 27,288
Other assets 93,875
Total assets acquired 4,790,997
Accounts and notes payable 254,041
Interest payable 8,154
Income tax payable 1,607
Accrued compensation 44,186
Accrued liabilities 154,290
Deferred income taxes ⁽⁴⁾
958,304
Tax reserve non-current 3,130
Pension and other post-retirement obligations 311,106
Other liabilities 101,325
Long-term debt 1,187,290
Total liabilities assumed 3,023,433
Total identifiable net assets acquired 1,767,564
Noncontrolling interest (68,000 )
Goodwill 942,096
Total fair value allocated to net assets acquired $ 2,641,660


~~(1)~~	~~The fair value of accounts receivable acquired was $422,274, with the gross contractual amount being $434,834. The Company expects $12,560 to be uncollectible.~~


~~(2)~~	The Company obtained additional information related to its inventories and property, plant and equipment which led to an increase in inventories of $43,047, a decrease in property, plant and equipment of $192,579 and a corresponding increase in goodwill of $149,532 compared to the estimated fair values included in the 2016 Form 10-K.


~~(3)~~	The Company obtained additional information related to its customer relationship balances which led to an increase in customer relationships of $80,000 and a corresponding decrease in goodwill compared to the estimated fair values included in the 2016 Form 10-K.


~~(4)~~	~~Decreases in the estimated fair values of identified assets acquired led to a decrease in deferred income taxes of $26,824 compared to the estimated fair values included in the 2016 Form 10-K.~~

~~WESTLAKE CHEMICAL CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued~~

~~(Unaudited)~~

~~(in thousands of dollars, except share amounts and per share data)~~

~~The pro forma information for the nine months ended September 30, 2016 was as follows:~~

Pro Forma Nine Months Ended September 30, 2016
Net sales $ 5,345,365
Net income ⁽¹⁾
$ 277,567
Net income attributable to noncontrolling interest 16,404
Net income attributable to Westlake Chemical Corporation ⁽¹⁾
$ 261,163
Earnings per common share attributable to Westlake Chemical Corporation
Basic $ 2.01
Diluted $ 2.00

~~_____________~~

~~(1)~~

The pro forma net income amounts include Axiall's historical charges recorded during the eight-month period prior to the closing of the Merger for (1) divestitures; (2) restructuring; and (3) legal and settlement claims, net, of $26,666, $22,881 and $23,376, respectively. These amounts have not been eliminated for pro forma purposes because they do not relate to nonrecurring, transaction specific costs related to the Merger.

The pro forma amounts above have been calculated after applying the Company's accounting policies and adjusting the Axiall results to reflect (1) the increase to depreciation and amortization that would have been charged assuming the fair value adjustments to property, plant and equipment and intangible assets had been applied from January 1, 2016; (2) the elimination of net sales and cost of sales between the Company and Axiall; (3) additional pension service costs; (4) amortization of debt premium and accretion of asset retirement obligations and environmental liabilities as part of the Company's adjustments to fair value; (5) incremental interest expense that would have been incurred assuming the financing arrangements entered by the Company and repayment of a portion of Axiall's outstanding debt had occurred on January 1, 2016; (6) the elimination of transaction-related costs; and (7) an adjustment to tax-effect the aforementioned pro forma adjustments using an estimated aggregate statutory income tax rate of the jurisdictions to which the above adjustments relate. The pro forma amounts do not include any potential synergies, cost savings or other expected benefits of the Merger, are presented for illustrative purposes only and are not necessarily indicative of results that would have been achieved if the Merger had occurred as of January 1, 2016 or of future operating performance.

~~3. Financial Instruments~~value.

Restricted Cash and Cash Equivalents

The Company had restricted cash and cash equivalents of ~~$31,682~~$23 at ~~September~~June 30, ~~2017, which was primarily~~2018 and December 31, 2017. The Company's restricted cash and cash equivalents are related to balances that are restricted for payment of distributions to certain of the Company's current and former ~~employees. The Company had restricted cash~~employees and ~~cash equivalents of $186,216 at December 31, 2016, which was~~are reflected primarily related to balances deposited with and held as security by the lender under the Company's term loan facility and for distributions to certain of the Company's current and former employees. The current portion of restricted cash and cash equivalents was $8,626 and $160,527 at September 30, 2017 and December 31, 2016, respectively. The noncurrent portion of restricted cash and cash equivalents was $23,056 and $25,689 at September 30, 2017 and December 31, 2016, respectively, and is reflected in ~~deferred charges and~~ other assets, net in the consolidated balance sheets.

~~Available-for-Sale Marketable Securities~~

~~The Company had no available-for-sale securities at September 30, 2017 or at December 31, 2016.~~

There were no sales or maturities of available-for-sale securities during the three and nine months ended September 30, 2017. The proceeds from sales and maturities of available-for-sale securities included in the consolidated statement of cash flows and the gross realized gains and losses included in the consolidated statement of operations for the three and nine months ended September 30, 2016 are reflected in the table below. The cost of securities sold was determined using the specific identification method.

Three Months Ended September 30, Nine Months Ended September 30,
2016 2016
Proceeds from sales and maturities of securities $ 360,506
$ 662,938
Gross realized gains 52,414
53,755
Gross realized losses (13 ) (35 )

4.3. Accounts Receivable

Accounts receivable consist of the following:


	September 30, 2017			December 31, 2016			June 30, 2018			December 31, 2017
Trade customers	$	1,111,563		$	819,739		$	1,198		$	974
Affiliates	7,601			7,982			12			9
Allowance for doubtful accounts	(21,961		)	(17,991		)	(24		)	(22		)
	1,097,203			809,730			1,186			961
Federal and state taxes	16,657			90,414			48			7
Other	29,119			38,599			27			33
Accounts receivable, net	$	1,142,979		$	938,743		$	1,261		$	1,001

5.4. Inventories

Inventories consist of the following:


	September 30, 2017		December 31, 2016		June 30, 2018		December 31, 2017
Finished products	$	488,061	$	500,861	$	552	$	549
Feedstock, additives and chemicals	213,144		216,877		209		221
Materials and supplies	133,630		83,362		144		130
Inventories	$	834,835	$	801,100	$	905	$	900

~~6. Property, Plant~~5. Goodwill

The gross carrying amounts and ~~Equipment~~

~~As of~~ ~~September 30, 2017, the Company had property, plant and equipment, net totaling $6,343,637. The Company assesses these assets for impairment whenever events or~~ changes in ~~circumstances indicate that~~ the carrying amount of ~~an asset may not be recoverable, including when negative conditions such~~goodwill for the six months ended June 30, 2018 were as ~~significant current or projected operating losses exist. Other factors considered by~~follows:



	Olefins Segment		Vinyls Segment			Total
Balances at December 31, 2017	$	30	$	982		$	1,012
Effects of changes in foreign exchange rates	—		(6		)	(6		)
Balances at June 30, 2018	$	30	$	976		$	1,006

The Company performed its annual impairment analysis for the Vinyls reporting units during the second quarter of 2018. The Company elected to perform a qualitative assessment (commonly known as "step zero") for the purposes of its annual goodwill impairment analysis for the Vinyls reporting units. Based upon this assessment, the Company ~~when determining if an impairment~~determined that it is more likely than not that the fair value of each of the Vinyls reporting units exceeds its carrying value. Factors considered in the qualitative assessment ~~is necessary include, but are not limited~~included macroeconomic conditions, industry and market considerations, cost factors related to ~~significant changes or projected~~raw materials and labor, overall financial performance (both current and projected), changes in ~~supply~~management or strategy, and demand fundamentals (which would have a negative impact on operating rates or margins), new technological developments, new competitors with significant raw material or other cost advantages, adverse changes associated with the U.S. and world economies and uncertainties associated with governmental actions. Long-lived assets assessed for impairment are grouped at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities.market capitalization.

1210

WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)

(in ~~thousands~~millions of dollars, except share amounts and per share data)

~~Depreciation expense on property, plant and equipment~~6. Long-Term Debt

Long-term debt consists of ~~$116,160~~ ~~and~~ ~~$75,143~~ ~~is primarily included in cost of sales in~~ the ~~consolidated statements of operations for the~~ ~~three months ended September 30, 2017 and 2016~~, respectively. Depreciation expense on property, plant and equipment of $334,545 and $189,114 is primarily included in cost of sales in the consolidated statements of operations for the nine months ended September 30, 2017 and 2016, respectively.

~~7. Other Assets~~

Amortization expense on intangible and other assets included in cost of sales and selling, general and administrative expenses in the consolidated statements of operations for the three and nine months ended September 30, 2017 and 2016 were as follows:following:

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
Cost of sales $ 10,834
$ 10,061
$ 33,121
$ 24,452
Selling, general and administrative 26,792
9,114
81,323
13,888
Total amortization expense $ 37,626
$ 19,175
$ 114,444
$ 38,340

~~Goodwill~~

~~The gross carrying amounts of goodwill and the changes in the carrying amount of goodwill for the nine months ended September 30, 2017 were as follows:~~

Olefins Segment Vinyls Segment Total
Balance at December 31, 2016 $ 29,990
$ 916,563
$ 946,553
Goodwill acquired during the period —
—
—
Measurement period adjustment —
54,605
54,605
Effects of changes in foreign exchange rates —
10,184
10,184
Balance at September 30, 2017 $ 29,990
$ 981,352
$ 1,011,342

~~The Company performed its annual impairment tests for the Vinyls reporting units in the second quarter of 2017 and did not identify any impairment.~~

~~8. Term Loan~~

On August 10, 2016, an indirect subsidiary of the Company, Westlake International Holdings II C.V., a limited partnership organized under the laws of the Netherlands (the "CV Borrower"), entered into a credit agreement with Bank of America, N.A., as agent and lender, providing the CV Borrower with a $150,000 term loan facility. The term loan facility had a maturity date of March 31, 2017. The term loan was fully repaid in January 2017. The loans thereunder bore interest at a floating interest rate equal to LIBOR plus 2% per annum, payable in arrears on the last day of each three-month period following the date of funding and at maturity.



	June 30, 2018							December 31, 2017
	Principal Amount		Unamortized Discount and Debt Issuance Costs			Net Long-term Debt		Principal Amount		Unamortized Premium, Discount and Debt Issuance Costs			Net Long-term Debt
3.60% senior notes due 2022 (the "3.60% 2022 Senior Notes")	$	250	$	(1	)	$	249	$	250	$	(1	)	$	249
3.60% senior notes due 2026 (the "3.60% 2026 Senior Notes")	750		(9		)	741		750		(10		)	740
Loan related to tax-exempt waste disposal revenue bonds due 2027	11		—			11		11		—			11
6 ½% senior notes due 2029 (the "6 ½% 2029 GO Zone Senior Notes")	100		(1		)	99		100		(1		)	99
6 ½% senior notes due 2035 (the "6 ½% 2035 GO Zone Senior Notes")	89		(1		)	88		89		(1		)	88
6 ½% senior notes due 2035 (the "6 ½% 2035 IKE Zone Senior Notes")	65		(1		)	64		65		—			65
5.0% senior notes due 2046 (the "5.0% 2046 Senior Notes")	700		(25		)	675		700		(25		)	675
4.375% senior notes due 2047 (the "4.375% 2047 Senior Notes")	500		(9		)	491		500		(9		)	491
3.50% senior notes due 2032 (the "3.50% 2032 GO Zone Refunding Senior Notes")	250		(2		)	248		250		(2		)	248
4.625% senior notes due 2021 (the "4.625% Westlake 2021 Senior Notes")	—		—			—		625		20			645
4.625% senior notes due 2021 (the "4.625% Subsidiary 2021 Senior Notes")	—		—			—		63		2			65
4.875% senior notes due 2023 (the "4.875% Westlake 2023 Senior Notes")	—		—			—		434		11			445
4.875% senior notes due 2023 (the "4.875% Subsidiary 2023 Senior Notes")	—		—			—		16		—			16
Total Long-term debt	2,715		(49		)	2,666		3,853		(16		)	3,837
Less:
Current portion - 4.625% Westlake 2021 Senior Notes and 4.625% Subsidiary 2021 Senior Notes	—		—			—		688		22			710
Long-term debt, net of current portion	$	2,715	$	(49	)	$	2,666	$	3,165	$	(38	)	$	3,127

1311

WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)

(in ~~thousands~~millions of dollars, except share amounts and per share data)

~~9. Long-Term Debt~~

~~Long-term debt consists of the following:~~

September 30, 2017 December 31, 2016
Principal
Amount
Unamortized
Premium,
Discount
and Debt
Issuance
Costs
Net
Long-term
Debt Principal
Amount Unamortized
Premium,
Discount
and Debt
Issuance
Costs Net
Long-term
Debt
Revolving credit facility $ —
$ —
$ —
$ 325,000
$ —
$ 325,000
4.625% senior notes due 2021 (the
   "4.625% Westlake 2021 Senior
   Notes")
624,793
21,881
646,674
624,793
26,837
651,630
4.625% senior notes due 2021
   (the "4.625% Subsidiary 2021 Senior
   Notes")
63,207
2,343
65,550
63,207
2,862
66,069
3.60% senior notes due 2022 250,000
(1,635 ) 248,365
250,000
(1,891 ) 248,109
4.875% senior notes due 2023 (the
   "4.875% Westlake 2023 Senior
   Notes")
433,793
11,791
445,584
433,793
13,431
447,224
4.875% senior notes due 2023
   (the "4.875% Subsidiary 2023 Senior
   Notes")
16,207
477
16,684
16,207
540
16,747
3.60% senior notes due 2026
   (the "3.60% 2026 Senior Notes")
750,000
(10,031 ) 739,969
750,000
(10,757 ) 739,243
Loan related to tax-exempt waste
   disposal revenue bonds due 2027
10,889
—
10,889
10,889
—
10,889
6 ½% tax-exempt senior notes due 2029 100,000
(861 ) 99,139
100,000
(916 ) 99,084
6 ¾% tax-exempt senior notes due 2032 250,000
(605 ) 249,395
250,000
(1,883 ) 248,117
6 ½% tax-exempt senior notes due 2035
   (the "6 ½% 2035 GO Zone Senior
   Notes")
89,000
(806 ) 88,194
89,000
(839 ) 88,161
6 ½% tax-exempt senior notes due 2035
   (the "6 ½% 2035 IKE Zone Senior
   Notes")
65,000
(578 ) 64,422
65,000
(602 ) 64,398
5.0% senior notes due 2046 (the "5.0%
   2046 Senior Notes")
700,000
(25,463 ) 674,537
700,000
(26,017 ) 673,983
Long-term debt, net $ 3,352,889
$ (3,487 ) $ 3,349,402
$ 3,677,889
$ 765
$ 3,678,654

Credit Agreement

~~The~~As of June 30, 2018, the Company ~~has~~had a ~~$1,000,000~~$1,000 revolving credit facility that ~~matures~~was scheduled to mature on August 23, 2021 (the "Credit Agreement"). The Credit Agreement bore interest at either (a) LIBOR plus a spread ranging from 1.00% to 1.75% or (b) Alternate Base Rate plus a spread ranging from 0.00% to 0.75% in each case depending on the credit rating of the Company. At June 30, 2018, the Company had no borrowings outstanding under the Credit Agreement. As of June 30, 2018, the Company had outstanding letters of credit totaling $4 and borrowing availability of $996 under the Credit Agreement. The obligations of the Company under the Credit Agreement were guaranteed by current and future material domestic subsidiaries of the Company, subject to certain exceptions. The Credit Agreement contained certain affirmative and negative covenants, including a quarterly total leverage ratio financial maintenance covenant. The Credit Agreement also contained certain events of default and if and for so long as an event of default had occurred and was continuing, any amounts outstanding under the Credit Agreement would accrue interest at an increased rate, the Lenders could terminate their commitments thereunder and payments of any outstanding amounts could be accelerated by the Lenders. As of June 30, 2018, the Company was in compliance with the total leverage ratio financial maintenance covenant.

New Credit Agreement

On July 24, 2018, the Company entered into a new $1,000 revolving credit facility that is scheduled to mature on July 24, 2023 (the "New Credit Agreement") and, in connection therewith, terminated the existing Credit Agreement. The New Credit Agreement bears interest at either (a) LIBOR plus a spread ranging from 1.00% to 1.75% or (b) Alternate Base Rate plus a spread ranging from 0.00% to 0.75% in each case depending on the credit rating of the Company. ~~At September 30, 2017, the Company had no borrowings outstanding under the~~The New Credit ~~Agreement. As of September 30, 2017, the Company had outstanding letters of credit totaling $45,414~~Agreement contains certain affirmative and ~~borrowing availability of $954,586 under the Credit Agreement. As of September 30, 2017, the Company was in compliance with the~~negative covenants, including a quarterly total leverage ratio financial maintenance covenant. The New Credit Agreement also contains certain events of default and if and for so long as certain events of default have occurred and are continuing, any overdue amounts outstanding under the New Credit Agreement will accrue interest at an increased rate, the lenders can terminate their commitments thereunder and payments of any outstanding amounts could be accelerated by the lenders. None of the Company's subsidiaries are required to guarantee the obligations of the Company under the New Credit Agreement.

The New Credit Agreement includes a $150 sub-limit for letters of credit, and any outstanding letters of credit will be deducted from availability under the facility. The New Credit Agreement also provides for a discretionary $50 commitment for swingline loans to be provided on a same-day basis. The Company may also increase the size of the facility, in increments of at least $25, up to a maximum of $500, subject to certain conditions and if certain lenders agree to commit to such an increase.

In connection with the Company's entry into the New Credit Agreement and termination of the existing Credit Agreement on July 24, 2018, all guarantees by the Guarantor Subsidiaries of the Company's payment obligations under the 4.375% 2047 Senior Notes, the 3.60% 2022 Senior Notes, the 3.60% 2026 Senior Notes and the 5.0% 2046 Senior Notes were released.

4.625% Senior Notes due 2021

In December 2017, the Company delivered irrevocable notices for the optional redemption of all of the outstanding 4.625% Westlake 2021 Senior Notes and 4.625% Subsidiary 2021 Senior Notes (collectively, the "2021 Notes"). The 2021 Notes were redeemed on February 15, 2018 at a redemption price equal to 102.313% of the principal amount of the 2021 Notes plus accrued and unpaid interest on the 2021 Notes to the redemption date. The Company recognized a $6 gain in other income upon redemption of the 2021 Notes.

4.875% Senior Notes due 2023

In March 2018, the Company delivered irrevocable notices for the optional redemption of all of the outstanding 4.875% Westlake 2023 Senior Notes and 4.875% Subsidiary 2023 Senior Notes (collectively, the "2023 Notes"). The 2023 Notes were redeemed on May 15, 2018 at a redemption price equal to 102.438% of the principal amount of the 2023 Notes plus accrued and unpaid interest on the 2023 Notes to the redemption date.

1412

WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)

(in ~~thousands~~millions of dollars, except share amounts and per share data)

~~3.60% Senior Notes due 2026 and 5.0% Senior Notes due 2046~~

In August 2016, the Company issued $750,000 aggregate principal amount of 3.60% senior notes due 2026 (the "3.60% 2026 Senior Notes") and $700,000 aggregate principal amount of 5.0% senior notes due 2046 (the "5.0% 2046 Senior Notes"). On March 27, 2017, the Company commenced registered exchange offers to exchange the 3.60% 2026 Senior Notes and the 5.0% 2046 Senior Notes for new notes that are identical in all material respects to the 3.60% 2026 Senior Notes and the 5.0% 2046 Senior Notes, except that the offer and issuance of the new SEC-registered notes have been registered under the Securities Act of 1933, as amended (the “Securities Act”). The exchange offers expired on April 24, 2017, and approximately 99.97% of the 3.60% 2026 Senior Notes and 100.00% of the 5.0% 2046 Senior Notes were exchanged. The 3.60% 2026 Senior Notes that were not exchanged pursuant to the exchange offers have not been registered under the Securities Act or any state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements or a transaction not subject to the registration requirements of the Securities Act or any state securities law.

~~4.625% Senior Notes due 2021 and 4.875% Senior Notes due 2023~~

In September 2016, the Company issued $624,793 aggregate principal amount of 4.625% senior notes due 2021 (the “4.625% Westlake 2021 Senior Notes”) and $433,793 aggregate principal amount of 4.875% senior notes due 2023 (the “4.875% Westlake 2023 Senior Notes”) upon the closing of the Company's offers to exchange any and all of the $688,000 aggregate principal amount of the outstanding 4.625% senior notes due 2021 issued by Eagle Spinco Inc., a wholly-owned subsidiary of Axiall (“Eagle Spinco”), and the $450,000 aggregate principal amount of the outstanding 4.875% senior notes due 2023 issued by Axiall. In the exchange offers, $624,793 aggregate principal amount of 4.625% Westlake 2021 Senior Notes and $433,793 aggregate principal amount of 4.875% Westlake 2023 Senior Notes were issued by the Company, leaving outstanding $63,207 aggregate principal amount of the 4.625% 2021 senior notes (the "4.625% Subsidiary 2021 Senior Notes") and $16,207 aggregate principal amount of the 4.875% 2023 senior notes (the " 4.875% Subsidiary 2023 Senior Notes"). On March 27, 2017, the Company commenced registered exchange offers to exchange the 4.625% Westlake 2021 Senior Notes and the 4.875% Westlake 2023 Senior Notes for new SEC-registered notes that are identical in all material respects to the 4.625% Westlake 2021 Senior Notes and the 4.875% Westlake 2023 Senior Notes, except that the offer and issuance of the new notes have been registered under the Securities Act. The exchange offers expired on April 24, 2017, and 100.00% of both the 4.625% Westlake 2021 Senior Notes and the 4.875% Westlake 2023 Senior Notes were exchanged.

~~GO Zone Bonds~~

During September 2017, the Company directed the Louisiana Local Government Authority Environmental Facilities and Community Development Authority (the “Authority”) to optionally redeem in full $250,000 aggregate principal amount of the 2007 Series revenue bonds (the “GO Zone Bonds”) on November 1, 2017. The GO Zone Bonds were issued by the Authority in December 2007 under the Gulf Opportunity Zone Act of 2005 (GO Zone Act) for the benefit of the Company and were subject to optional redemption by the Authority upon the direction of the Company at any time on or after November 1, 2017 for 100% of the principal plus accrued interest. In connection with the redemption of the Go Zone Bonds, the Authority is required to cause the GO Zone Bonds trustee to surrender the 6 ¾% tax exempt senior notes due November 2032 to the Senior Notes trustee for cancellation. The Company used cash on hand to fund the redemption of the GO Zone Bonds.

As of ~~September~~June 30, ~~2017,~~2018, the Company was in compliance with all of the covenants with respect to the ~~Credit Agreement,~~3.60% 2022 Senior Notes, the 3.60% 2026 Senior Notes, the 5.0% 2046 Senior Notes, ~~4.625% Westlake 2021~~the 4.375% 2047 Senior Notes, ~~4.875% Westlake 2023~~the 6 ½% 2029 GO Zone Senior Notes, ~~3.60%~~the 3.50% 2032 GO Zone Refunding Senior Notes, ~~Due 2022, 6 ½% tax-exempt senior notes due 2029, the 6 ¾% tax-exempt senior notes due 2032,~~ the 6 ½% 2035 GO Zone Senior Notes, the 6 ½% 2035 IKE Zone Senior Notes, the Credit Agreement and the waste disposal revenue bonds.

Unamortized debt issuance costs on ~~Long-term~~long-term debt were ~~$21,547~~$25 and ~~$24,113~~$26 at ~~September~~June 30, ~~2017~~2018 and December 31, ~~2016,~~2017, respectively.

~~10. Pension and Post-Retirement Benefits~~

In connection with the Merger, the Company assumed certain U.S. and non-U.S. pension plans and other post-retirement benefit plans covering Axiall employees. The Axiall pension plans are closed to new participants and provide benefits to certain employees and retirees. The other post-retirement benefit plans are unfunded and provide medical and life insurance benefits for certain employees and their dependents. See Note 2 for the fair value of pension and other post-retirement obligations assumed in the Merger.

~~WESTLAKE CHEMICAL CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued~~

~~(Unaudited)~~

~~(in thousands of dollars, except share amounts and per share data)~~

~~Defined Benefit Plans~~

~~Components of net periodic benefit cost (income) for the Company's pension plans are as follows:~~

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
U.S.
Plans Non-U.S.
Plans U.S.
Plans Non-U.S.
Plans U.S.
Plans Non-U.S.
Plans U.S.
Plans Non-U.S.
Plans
Service cost $ 1,336
$ 528
$ 315
$ 318
$ 4,007
$ 1,509
$ 315
$ 777
Expected administrative
expenses
—
—
730
—
—
—
730
—
Interest cost 6,198
615
2,191
622
18,594
1,754
1,553
1,763
Expected return on plan assets (9,976 ) (162 ) (3,800 ) (50 ) (29,928 ) (466 ) (5,260 ) (50 )
Amortization of net loss 297
217
338
—
892
663
978
—
Net periodic benefit cost
(income)
$ (2,145 ) $ 1,198
$ (226 ) $ 890
$ (6,435 ) $ 3,460
$ (1,684 ) $ 2,490

~~The Company made $8,108 of contributions to its U.S. pension plans and $659 of contributions to its non-U.S. pension plans during the~~ ~~first nine months of 2017. The Company made no contributions to its U.S. and non-U.S. pension plans during the first nine months of 2016.~~

The Company's funding policy for its U.S. plans is consistent with the minimum funding requirements of federal law and regulations, and, based on preliminary estimates, the Company expects to make contributions of approximately $2,569 to its U.S. pension plans and approximately $143 to its non-U.S. pension plans during the remainder of the fiscal year ending December 31, 2017.

~~Other Post-retirement Benefits~~

~~Components of net periodic benefit cost for the Company's other post-retirement benefits are as follows:~~

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
U.S.
Plans Non-U.S.
Plans U.S.
Plans Non-U.S.
Plans U.S.
Plans Non-U.S.
Plans U.S.
Plans Non-U.S.
Plans
Service cost $ 163
$ 14
$ 72
$ 1
$ 489
$ 41
$ 81
$ 1
Interest cost 500
35
250
3
1,499
100
540
3
Amortization of net loss 15
—
31
—
45
—
94
—
Net periodic benefit cost $ 678
$ 49
$ 353
$ 4
$ 2,033
$ 141
$ 715
$ 4

~~WESTLAKE CHEMICAL CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued~~

~~(Unaudited)~~

~~(in thousands of dollars, except share amounts and per share data)~~

~~11. Stockholders' Equity~~

~~Changes in stockholders' equity for the~~ ~~nine months ended September 30, 2017 and 2016~~ ~~were as follows:~~

Common
Stock

Common
Stock,
Held in
Treasury

Additional
Paid-in
Capital

Retained
Earnings

Accumulated
Other
Comprehensive
Income (Loss)

Noncontrolling
Interests
Total
Balances at December 31,
   2016
$ 1,347
$ (319,339 ) $ 550,641
$ 3,412,286
$ (121,306 ) $ 368,416
$ 3,892,045
Net income —
—
—
501,849
—
21,429
523,278
Other comprehensive income
   (loss), net of income taxes:

Pension and other post-
   retirement benefits
   liability
—
—
—
—
1,057
(44 ) 1,013
Foreign currency
   translation adjustments
—
—
—
—
106,563
2,952
109,515
Other —
—
—
—
(260 ) —
(260 )
Shares issued—stock-
   based compensation
—
4,645
(2,441 ) —
—
—
2,204
Stock-based compensation,
   net of tax on stock options
   exercised
—
—
10,223
—
—
—
10,223
Dividends declared —
—
—
(76,491 ) —
—
(76,491 )
Distributions to
   noncontrolling interests
—
—
—
—
—
(20,767 ) (20,767 )
Issuance of Westlake
   Chemical Partners LP
   common units
—
—
—
—
—
110,739
110,739
Balances at September 30,
   2017
$ 1,347
$ (314,694 ) $ 558,423
$ 3,837,644
$ (13,946 ) $ 482,725
$ 4,551,499

~~WESTLAKE CHEMICAL CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued~~

~~(Unaudited)~~

~~(in thousands of dollars, except share amounts and per share data)~~

Common
Stock

Common
Stock,
Held in
Treasury

Additional
Paid-in
Capital

Retained
Earnings

Accumulated
Other
Comprehensive
Income (Loss)

Noncontrolling
Interests
Total
Balances at December 31,
   2015
$ 1,347
$ (258,312 ) $ 542,148
$ 3,109,987
$ (129,292 ) $ 296,053
$ 3,561,931
Net income —
—
—
299,914
—
14,656
314,570
Other comprehensive income
   (loss), net of income taxes

Pension and other post-
   retirement benefits
   liability
—
—
—
—
409
—
409
Foreign currency
   translation adjustments
—
—
—
—
15,758
—
15,758
Net unrealized holding
   gains on investments
—
—
—
—
4,999
—
4,999
Common stock repurchased —
(66,725 ) —
—
—
—
(66,725 )
Shares issued—stock-
   based compensation
—
5,057
(3,407 ) —
—
—
1,650
Stock-based compensation,
   net of tax on stock options
   exercised
—
—
7,778
—
—
—
7,778
Dividends declared —
—
—
(71,933 ) —
—
(71,933 )
Distributions to
   noncontrolling interests
—
—
—
—
—
(12,300 ) (12,300 )
Noncontrolling interest in
   acquired business
—
—
—
—
—
68,000
68,000
Balances at September 30,
   2016
$ 1,347
$ (319,980 ) $ 546,519
$ 3,337,968
$ (108,126 ) $ 366,409
$ 3,824,137

7. Accumulated Other Comprehensive Income (Loss)

Changes in accumulated other comprehensive income (loss) by component for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 and ~~2016~~2017 were as follows:

Benefits
Liability,
Net of Tax

Cumulative
Foreign
Currency
Exchange,
Net of Tax

Net Unrealized
Holding Gains
(Losses) on
Investments,
Net of Tax
Total
Balances at December 31, 2016 $ 28,945
$ (150,202 ) $ (49 ) $ (121,306 )
Other comprehensive income (loss) before
reclassifications
—
106,563
(260 ) 106,303
Amounts reclassified from accumulated other
comprehensive loss
1,057
—
—
1,057
Net other comprehensive income (loss) for the period 1,057
106,563
(260 ) 107,360
Balances at September 30, 2017 $ 30,002
$ (43,639 ) $ (309 ) $ (13,946 )

~~WESTLAKE CHEMICAL CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued~~

~~(Unaudited)~~

~~(in thousands of dollars, except share amounts and per share data)~~

Benefits
Liability,
Net of Tax

Cumulative
Foreign
Currency
Exchange,
Net of Tax

Net Unrealized
Holding Gains
(Losses) on
Investments,
Net of Tax
Total
Balances at December 31, 2015 $ (8,607 ) $ (115,690 ) $ (4,995 ) $ (129,292 )
Other comprehensive income (loss) before
reclassifications
(252 ) 15,758
57,550
73,056
Amounts reclassified from accumulated other
comprehensive loss (income)
661
—
(52,551 ) (51,890 )
Net other comprehensive income for the period 409
15,758
4,999
21,166
Balances at September 30, 2016 $ (8,198 ) $ (99,932 ) $ 4
$ (108,126 )

~~The following table provides the details of the amounts reclassified from accumulated other comprehensive income (loss) into net income in the consolidated statements of operations for the three and~~ ~~nine months ended September 30, 2017 and 2016~~:

Details about Accumulated Other
   Comprehensive Income (Loss)
   Components

Location of Reclassification
(Income (Expense)) in
Consolidated Statements
of Operations
Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
Amortization of pension and
   other post-retirement items

Net loss (1) $ (529 ) $ (369 ) $ (1,600 ) $ (1,072 )

Benefit from
   income taxes
193
141
543
411
(336 ) (228 ) (1,057 ) (661 )
Net unrealized gains on
   available-for-sale
   investments

Realized gain on available-for-sale investments Other income, net —
52,401
—
53,720

Provision for
   income taxes
—
(696 ) —
(1,169 )
—
51,705
—
52,551
Total reclassifications for the
   period
$ (336 ) $ 51,477
$ (1,057 ) $ 51,890

~~_____________~~


~~(1)~~	These accumulated other comprehensive loss components are included in the computation of net periodic benefit cost. For additional information, please read Note 13 (Employee Benefits) to the consolidated financial statements included in the ~~2016~~ ~~Form 10-K.~~

~~12. Stock-Based Compensation~~

Under the Westlake Chemical Corporation 2013 Omnibus Incentive Plan (as amended and restated, the "2013 Plan"), all employees and non-employee 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 2013 Plan. At the discretion of the administrator of the 2013 Plan, employees and non-employee directors may be granted awards in the form of stock options, stock appreciation rights, stock awards, restricted stock units or cash awards (any of which may be a performance award). Total stock-based compensation expense related to the 2013 Plan was $5,972 and $1,502 for the three months ended September 30, 2017 and 2016,~~respectively, and $16,740 and $6,588 for the nine months ended September 30, 2017 and 2016, respectively.~~

~~WESTLAKE CHEMICAL CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued~~

~~(Unaudited)~~

~~(in thousands of dollars, except share amounts and per share data)~~

Under the Merger Agreement, all outstanding Axiall restricted stock units were assumed by the Company and converted into restricted stock units in respect of the Company's common stock, with the same terms and conditions except that upon settlement the award holders will receive the greater of (1) the value of $33.00 per Axiall restricted stock unit that was converted into a restricted stock unit in respect of the Company's common stock and (2) the value of the Company's common stock. The awards are classified as liability awards for financial accounting purposes and are re-measured at each reporting date until they vest.



	Benefits Liability, Net of Tax		Cumulative Foreign Currency Exchange, Net of Tax			Total
Balances at December 31, 2016	$	29	$	(150	)	$	(121	)
Other comprehensive income before reclassifications	—		66			66
Amounts reclassified from accumulated other comprehensive income	1		—			1
Net other comprehensive income attributable to Westlake Chemical Corporation	1		66			67
Balances at June 30, 2017	$	30	$	(84	)	$	(54	)

Balances at December 31, 2017	$	43	$	(36	)	$	7
Other comprehensive loss before reclassifications	—		(40		)	(40		)
Net other comprehensive loss attributable to Westlake Chemical Corporation	—		(40		)	(40		)
Balances at June 30, 2018	$	43	$	(76	)	$	(33	)

~~13. Derivative Instruments~~

~~Commodity Risk Management~~

The Company uses derivative instruments to reduce price volatility risk on commodities, primarily ethane and natural gas. The Company does not use derivative instruments to engage in speculative activities. The Company had no derivative instruments that were designated as fair value hedges during the three and nine months ended September 30, 2017 and 2016.

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 event, the Company would continue to receive the market price on the actual volume hedged. The Company also bears the risk that it could lose the benefit of market improvements over the fixed derivative price for the term and volume of the derivative instruments (as such improvements would accrue to the benefit of the counterparty). The Company had non-hedge designated feedstock forward contracts for approximately 138,600,000 gallons and 12,500,000 MMBtu as of September 30, 2017 and for approximately 257,000,000 gallons and 8,500,000 MMBtu as of December 31, 2016.

~~WESTLAKE CHEMICAL CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued~~

~~(Unaudited)~~

~~(in thousands of dollars, except share amounts and per share data)~~

Certain of the Company's derivative instruments are executed under an International Swaps and Derivatives Association ("ISDA") Master Agreement, which permits the Company and a counterparty to aggregate the amounts owed by each party under multiple transactions and replace them with a single net amount payable by one party to the other. The following tables present the Company's derivative assets and derivative liabilities reported in the consolidated balance sheets and derivative assets and derivative liabilities subject to enforceable master netting arrangements.

September 30, 2017
Net Presentation Gross Presentation
Net Assets (Liabilities) Presented in the Consolidated Balance Sheets Risk management assets—Commodity forward contracts Risk management liabilities—Commodity forward contracts
Accounts receivable, net
Derivative positions subject to enforceable master netting
   arrangements
$ 793
$ 2,778
$ (1,985 )
Derivative positions not subject to enforceable master netting
   arrangements
4,557
4,557
—
5,350
7,335
(1,985 )
Deferred charges and other assets, net
Derivative positions subject to enforceable master netting
arrangements —
—
—
Derivative positions not subject to enforceable master netting
arrangements 4,336
4,336
—
4,336
4,336
—
Accrued liabilities
Derivative positions subject to enforceable master netting
arrangements —
—
—
Derivative positions not subject to enforceable master netting
arrangements (704 ) —
(704 )
(704 ) —
(704 )
Other liabilities
Derivative positions subject to enforceable master netting
arrangements (1,410 ) 745
(2,155 )
Derivative positions not subject to enforceable master netting
arrangements (2,774 ) —
(2,774 )
(4,184 ) 745
(4,929 )
Risk management assets (liabilities)—Commodity forward
   contracts
$ 12,416
$ (7,618 )

~~WESTLAKE CHEMICAL CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued~~

~~(Unaudited)~~

~~(in thousands of dollars, except share amounts and per share data)~~

December 31, 2016
Net Presentation Gross Presentation
Net Assets (Liabilities) Presented in the Consolidated Balance Sheets Risk management assets—Commodity forward contracts Risk management liabilities—Commodity forward contracts
Accounts receivable, net
Derivative positions subject to enforceable master netting
arrangements $ 1,498
$ 1,636
$ (138 )
Derivative positions not subject to enforceable master netting
arrangements 6,091
6,091
—
7,589
7,727
(138 )
Deferred charges and other assets, net
Derivative positions subject to enforceable master netting
arrangements —
—
—
Derivative positions not subject to enforceable master netting
arrangements 5,249
5,249
—
5,249
5,249
—
Accrued liabilities
Derivative positions subject to enforceable master netting
arrangements —
—
—
Derivative positions not subject to enforceable master netting
arrangements (1,349 ) —
(1,349 )
(1,349 ) —
(1,349 )
Other liabilities
Derivative positions subject to enforceable master netting
arrangements (436 ) 2,010
(2,446 )
Derivative positions not subject to enforceable master netting
arrangements (3,288 ) —
(3,288 )
(3,724 ) 2,010
(5,734 )
Risk management assets (liabilities)—Commodity forward
contracts
$ 14,986
$ (7,221 )

~~The impacts of derivative instruments that have not been designated as hedges on the Company's consolidated statements of operations were as follows:~~

Derivatives Not Designated as
Hedging Instruments

Location of Gain (Loss) Recognized
in Income on Derivative
Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
Commodity forward contracts Cost of sales $ 6,846
$ (7,840 ) $ (2,756 ) $ 7,784

~~See Note 14 for the fair value of the Company's derivative instruments.~~

~~14.~~8. Fair Value Measurements

The Company reports certain assets and liabilities at fair value, which is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). Under the accounting guidance for fair value measurements, 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 inputs or unobservable inputs that are corroborated by market data.

~~WESTLAKE CHEMICAL CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued~~

~~(Unaudited)~~

~~(in thousands of dollars, except share amounts and per share data)~~

Level 3: Unobservable inputs that are not corroborated by market data.

The ~~following tables summarize, by level within the fair value hierarchy, the Company's assets and liabilities that were accounted for at fair value on a recurring basis:~~

September 30, 2017
Level 1 Level 2 Total
Derivative instruments
Risk management assets—Commodity forward contracts $ 233
$ 12,183
$ 12,416
Risk management liabilities—Commodity forward contracts (6,183 ) (1,435 ) (7,618 )

December 31, 2016
Level 1 Level 2 Total
Derivative instruments
Risk management assets—Commodity forward contracts $ 878
$ 14,108
$ 14,986
Risk management liabilities—Commodity forward contracts (6,854 ) (367 ) (7,221 )

~~The Level 2 measurements for the Company's commodity contracts are derived using forward curves supplied by industry-recognized and unrelated third-party services.~~

~~There were no transfers in or out of Levels 1 and 2 of the fair value hierarchy for the~~ ~~nine months ended September 30, 2017 and 2016~~.

~~In addition to the financial assets and liabilities above, the~~ Company has ~~other~~ financial assets and liabilities subject to fair value measures. These financial assets and liabilities include cash and cash equivalents, accounts receivable, net, accounts payable ~~and current~~ and long-term debt, all of which are recorded at carrying value. The amounts reported in the consolidated balance sheets for cash and cash equivalents, accounts receivable, net and accounts payable ~~and current term loan~~ approximate their fair ~~values~~value due to the short maturities of these instruments.

The carrying and fair values of the Company's long-term debt (including the current portion of long-term debt) are summarized in the table below. The ~~fair value of the~~ Company's long-term debt instruments ~~is determined using a~~are publicly-traded. A market approach, based upon quotes from financial reporting ~~services.~~services, is used to measure the fair value of the Company's long-term debt. Because the Company's long-term debt instruments may not be actively traded, the inputs used to measure the fair value of the Company's long-term debt are classified as Level 2 inputs within the fair value hierarchy.

September 30, 2017 December 31, 2016

Carrying
Value

Fair
Value

Carrying
Value

Fair
Value
Revolving credit facility $ —
$ —
$ 325,000
$ 325,000
4.625% Westlake 2021 Senior Notes 646,674
646,486
651,630
650,847
4.625% Subsidiary 2021 Senior Notes 65,550
62,983
66,069
65,775
3.60% senior notes due 2022 248,365
255,733
248,109
251,725
4.875% Westlake 2023 Senior Notes 445,584
452,004
447,224
451,301
4.875% Subsidiary 2023 Senior Notes 16,684
16,842
16,747
16,501
3.60% 2026 Senior Notes 739,969
749,570
739,243
722,055
Loan related to tax-exempt waste disposal revenue bonds
due 2027
10,889
10,889
10,889
10,889
6 ½% tax-exempt senior notes due 2029 99,139
113,789
99,084
112,433
6 ¾% tax-exempt senior notes due 2032 249,395
251,250
248,117
258,818
6 ½% 2035 GO Zone Senior Notes 88,194
100,936
88,161
100,323
6 ½% 2035 IKE Zone Senior Notes 64,422
73,908
64,398
73,270
5.0% 2046 Senior Notes 674,537
760,739
673,983
691,712

2313

WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)

(in ~~thousands~~millions of dollars, except share amounts and per share data)

~~15.~~



	June 30, 2018				December 31, 2017
	Carrying Value		Fair Value		Carrying Value		Fair Value
3.60% 2022 Senior Notes	$	249	$	247	$	249	$	255
3.60% 2026 Senior Notes	741		711		740		757
Loan related to tax-exempt waste disposal revenue bonds due 2027	11		11		11		11
6 ½% 2029 GO Zone Senior Notes	99		109		99		111
6 ½% 2035 GO Zone Senior Notes	88		98		88		99
6 ½% 2035 IKE Zone Senior Notes	64		71		65		74
5.0% 2046 Senior Notes	675		708		675		787
4.375% 2047 Senior Notes	491		462		491		518
3.50% 2032 GO Zone Refunding Senior Notes	248		247		248		256
4.625% Westlake 2021 Senior Notes	—		—		645		639
4.625% Subsidiary 2021 Senior Notes	—		—		65		65
4.875% Westlake 2023 Senior Notes	—		—		445		449
4.875% Subsidiary 2023 Senior Notes	—		—		16		16

9. Income Taxes

The effective income tax rate was ~~33.1%~~24.4% for the ~~third~~second quarter of 2018 as compared to the effective income tax rate of 30.0% for the second quarter of 2017. The lower tax rate in the second quarter of 2018 as compared to the second quarter of 2017 was a result of the changes enacted under the Tax Act, which was signed into law on December 22, 2017. The effective income tax rate for the ~~third~~second quarter of ~~2017~~2018 was ~~below~~above the U.S. federal statutory rate of ~~35.0%~~21.0% primarily due to ~~a higher domestic manufacturing deduction, depletion deductions, income attributable~~certain discrete adjustments related to ~~noncontrolling interests, research~~foreign and ~~development credits~~state corporate rate changes and ~~the~~state and foreign ~~earnings rate differential, partially offset by state income~~ taxes. ~~The effective income tax rate, which was a benefit, was (10.3)% for three months ended September 30, 2016.~~ The effective income tax rate for the ~~third~~second quarter of 2016 was below the U.S. federal statutory rate of 35.0% primarily due to the benefit of state tax credits, the domestic manufacturing deduction, depletion deductions, income attributable to noncontrolling interests, the non-recognition of tax related to the gain recognized on previously held outstanding shares of common stock of Axiall, the benefit in prior years' and current-year tax credits for increased research and development expenditures and adjustments related to prior years' tax returns as filed and the foreign earnings rate differential, partially offset by state income taxes and nondeductible transaction costs related to the Merger.

~~The effective income tax rate was 30.8% for the nine months ended September 30, 2017. The effective income tax rate for the nine months ended September 30,~~ 2017 was below the U.S. federal statutory rate of 35.0% primarily due to certain discrete adjustments, a higher domestic manufacturing deduction, depletion deductions, income attributable to noncontrolling interests, research and development credits and the foreign earnings rate differential, partially offset by state income taxes.

The effective income tax rate was ~~29.1%~~23.7% for the ~~nine~~six months ended ~~September~~June 30, ~~2016.~~2018. The effective income tax rate for the ~~2016~~six months ended June 30, 2018 was above the U.S. federal statutory rate of 21.0% primarily due to certain discrete adjustments related to foreign and state corporate rate changes and state and foreign taxes. The effective income tax rate was 29.0% for the six months ended June 30, 2017. The effective income tax rate for the 2017 period was below the U.S. federal statutory rate of 35.0% primarily due to ~~the benefit of state tax credits, the~~certain discrete adjustments, a higher domestic manufacturing deduction, depletion deductions, income attributable to noncontrolling interests, ~~the non-recognition of tax related to the gain recognized on previously held outstanding shares of common stock of Axiall, the benefit in prior years' and current-year tax credits for increased~~ research and development ~~expenditures and adjustments related to prior years' tax returns as filed~~credits and the foreign earnings rate differential, partially offset by state income ~~taxes and nondeductible transaction costs related to the Merger.~~taxes.

The ~~Company files~~Tax Act, among other changes, reduced U.S. corporate income tax ~~returns~~rate from 35.0% to 21.0%, effective January 1, 2018, and also required a one-time deemed repatriation of foreign earnings at specified rates. The accounting guidance on income taxes requires that the effect on deferred tax assets and liabilities of a change in tax rates be recognized in the ~~U.S. federal jurisdiction~~period the tax rate change was enacted. The SEC staff guidance allows registrants to record provisional amounts during a measurement period when it does not have the necessary information available, prepared or analyzed (including computations) in reasonable detail to complete its accounting for the change in tax law. The measurement period ends when a company has obtained, prepared and analyzed the information necessary to finalize its accounting, but cannot extend beyond one year. The corporate income tax rate change resulted in ~~various states and foreign jurisdictions. During the second quarter of 2017, the Internal Revenue Service began an audit~~a revaluation of the Company's deferred tax assets and liabilities. At December 31, 2017, under the above guidance, the Company made a provisional adjustment of $591 of income tax benefit in the 2017 consolidated financial statements for items that the Company could reasonably estimate such as revaluation of deferred tax assets and liabilities and a one-time U.S. tax on the mandatory deemed repatriation of the Company's post-1986 foreign earnings. The Company will continue to assess the income tax effects of the Tax Act based on further standard setting activities, any transition provisions, and changes in the facts and circumstances of the Company's tax position, during the measurement period. No measurement period adjustment was made for the ~~tax years 2012 to 2014.~~six months ended June 30, 2018.

~~16.~~

WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)

(in millions of dollars, except share amounts and per share data)

10. Earnings per Share

The Company has unvested restricted stock units outstanding that are considered participating securities and, therefore, computes basic and diluted earnings per share under the two-class method. Basic earnings per share for the periods are based upon the weighted average number of shares of common stock outstanding during the periods. Diluted earnings per share ~~include~~includes the effect of certain stock options.

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
Net income attributable to Westlake Chemical
Corporation
$ 210,832
$ 65,662
$ 501,849
$ 299,914
Less:
Net income attributable to participating securities (1,117 ) (294 ) (2,630 ) (1,347 )
Net income attributable to common shareholders $ 209,715
$ 65,368
$ 499,219
$ 298,567

~~WESTLAKE CHEMICAL CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued~~

~~(Unaudited)~~

~~(in thousands of dollars, except share amounts and per share data)~~



	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Net income attributable to Westlake Chemical Corporation	$	278		$	153		$	565		$	291
Less:
Net income attributable to participating securities	(2		)	(1		)	(3		)	(2		)
Net income attributable to common shareholders	$	276		$	152		$	562		$	289

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 June 30,				Six Months Ended June 30,
	2017		2016		2017		2016		2018		2017		2018		2017
Weighted average common shares—basic	129,069,186		128,793,661		129,033,597		129,519,577		129,624,291		129,051,227		129,554,528		129,015,507
Plus incremental shares from:
Assumed exercise of options	819,782		586,295		756,368		584,320		682,324		735,487		694,556		724,136
Weighted average common shares—diluted	129,888,968		129,379,956		129,789,965		130,103,897		130,306,615		129,786,714		130,249,084		129,739,643

Earnings per common share attributable to Westlake Chemical Corporation:
Basic	$	1.62	$	0.51	$	3.87	$	2.31	$	2.13	$	1.18	$	4.34	$	2.24
Diluted	$	1.61	$	0.51	$	3.85	$	2.29	$	2.12	$	1.17	$	4.31	$	2.23

Excluded from the computation of diluted earnings per share are options to purchase ~~335,276~~172,642 and ~~620,010~~583,585 shares of common stock for the three months ended ~~September~~June 30, ~~2017~~2018 and ~~2016,~~2017, respectively, and ~~291,888~~128,892 and ~~577,254~~511,085 shares of common stock for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 and ~~2016,~~2017, respectively. These options were outstanding during the periods reported but were excluded because the effect of including them would have been antidilutive.

~~17.~~11. Supplemental Information

Accrued Liabilities

Accrued liabilities were ~~$609,472~~$604 and ~~$537,483~~$657 at ~~September~~June 30, ~~2017~~2018 and December 31, ~~2016,~~2017, respectively. Accrued rebates, ~~and accrued income taxes,~~ which are components of accrued liabilities, were ~~$110,862~~$94 and ~~$72,187, respectively,~~$108 at ~~September~~June 30, ~~2017~~2018 and ~~$77,985 and $10,891, respectively, at~~ December 31, ~~2016.~~2017, respectively. No other component of accrued liabilities was more than five percent of total current liabilities. Accrued liabilities with affiliates were ~~$30,609~~$42 and ~~$10,551~~$37 at ~~September~~June 30, ~~2017~~2018 and December 31, ~~2016,~~2017, respectively.

Non-cash Investing Activity

The change in capital expenditure accrual ~~increasing~~resulted in a decrease in additions to property, plant and equipment ~~was $8,082~~by $18 for the ~~nine~~six months ended ~~September~~June 30, ~~2017.~~2018. The change in capital expenditure accrual ~~increasing~~resulted in an increase in additions to property, plant and equipment ~~was $23,878~~by $11 for the ~~nine~~six months ended ~~September~~June 30, ~~2016.~~

~~Other Income, Net~~

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
Interest income $ 644
$ 537
$ 1,578
$ 6,900
Dividend income 127
574
250
1,499
Acquisition-related financing costs —
(11,420 ) —
(12,220 )
Foreign exchange currency loss, net (3,197 ) (1,281 ) (9,483 ) (2,435 )
Gain realized on previously held shares of Axiall
common stock
—
49,080
—
49,080
Gains from sales of securities, net —
3,321
—
4,640
Income from non-consolidated subsidiaries 3,855
1,475
11,066
7,213
Other 629
(1,021 ) 3,180
(2,586 )
Other income, net $ 2,058
$ 41,265
$ 6,591
$ 52,091

2017.

2515

WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)

(in ~~thousands~~millions of dollars, except share amounts and per share data)

~~18.~~12. Commitments and Contingencies

The Company is involved in a number of legal and regulatory matters, principally environmental in nature, that are incidental to the normal conduct of its business, including lawsuits, investigations and claims. The outcomes of these matters are inherently unpredictable. The Company believes that, in the aggregate, the outcome of all known legal and regulatory matters will not have a material adverse effect on its consolidated financial statements; however, specific outcomes with respect to such matters may be material to the Company's consolidated statements of operations in any particular period in which costs, if any, are recognized. The Company's assessment of the potential impact of environmental matters, in particular, is subject to uncertainty due to the complex, ongoing and evolving process of investigation and remediation of such environmental matters, and the potential for technological and regulatory developments. In addition, the impact of evolving claims and programs, such as natural resource damage claims, industrial site reuse initiatives and state remediation programs creates further uncertainty of the ultimate resolution of these matters. The Company anticipates that the resolution of many legal and regulatory matters, and in particular environmental matters, will occur over an extended period of time.

Environmental. As of ~~September~~June 30, ~~2017~~2018 and December 31, ~~2016,~~2017, the Company had reserves for environmental contingencies totaling approximately ~~$47,409~~$53 and ~~$48,817,~~$49, respectively, most of which ~~was~~were classified as noncurrent liabilities. The Company's assessment of the potential impact of these environmental contingencies is subject to considerable uncertainty due to the complex, ongoing and evolving process of investigation and remediation, if necessary, of such environmental contingencies, and the potential for technological and regulatory developments.

From time to time the Company receives notices or inquiries from government entities regarding alleged violations of environmental laws and regulations pertaining to, among other things, the disposal, emission and storage of chemical substances, including hazardous wastes. Item 103 of the SEC's Regulation S-K requires disclosure of certain environmental matters when a governmental authority is a party to the proceedings and the proceedings involve potential monetary sanctions, unless the Company reasonably believes such sanctions would not exceed $100.

In May 2013, an amendment to an existing consent order agreed to by the West Virginia Department of Environmental Protection and a predecessor of Axiall required that it, among other things, pay a penalty in the amount of $449 and continue certain corrective action associated with discharges of hexachlorocyclohexane (commonly referred to as BHC) from the Natrium, West Virginia facility's effluent discharge outfalls. The penalty was paid and corrective actions required are on-going per a December 2016 agreement to extend the compliance date under the amended consent order.

~~In May 2013 and September 2013,~~Calvert City Proceedings. For several years, the Environmental Protection Agency (the "EPA") ~~conducted inspections~~has been conducting remedial investigation and feasibility studies at the Company's ~~Plaquemine, Louisiana~~Calvert City, Kentucky facility pursuant to ~~requirements~~the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 ("CERCLA"). As the current owner of the ~~federal Clean Air Act Section 112(r) Risk Management Program~~Calvert City facility, the Company was named by the EPA as a potentially responsible party ("PRP") along with Goodrich Corporation ("Goodrich") and ~~Title V. As~~its successor-in-interest, PolyOne Corporation ("PolyOne"). On November 30, 2017, the EPA published a ~~result~~draft Proposed Plan, incorporating by reference an August 2015 draft Remedial Investigation ("RI") report, an October 2017 draft Feasibility Study ("FS") report and a new Technical Impracticability Waiver document dated December 19, 2017. The draft Proposed Plan described a preferred remedy that included a containment wall with targeted treatment and supplemental hydraulic containment, as well as active treatment of historical groundwater contamination under the Tennessee River. The EPA estimated that the total remedy would cost $200 to $250 with an estimated $1 to $3 in annual operation and maintenance ("O&M") costs. Each PRP, including the Company, submitted comments to the Proposed Plan and associated documents. The Company's comments also proposed alternative removal options for the groundwater contamination under the Tennessee River. On June 18, 2018, the EPA published an amendment to its Proposed Plan. The amended Proposed Plan addresses the comments filed on the river excavation remedy outlined in the original Proposed Plan. Under the amended Proposed Plan, the EPA proposes an interim approach to address the contamination under the river that would include recovery of any mobile contaminants by an extraction well along with further study of the ~~inspections,~~extent of the ~~EPA identified areas~~contamination and potential treatment options. The EPA's revised estimated cost of ~~concern~~implementation is $107, with the estimated annual O&M costs remaining unchanged. The Company's allocation of liability for remedial or O&M costs, if any, will be determined by the outcome of the contractual dispute with Goodrich/PolyOne, which is the subject of a pending arbitration proceeding as described below.

In connection with the 1990 and 1997 acquisitions of the Goodrich chemical manufacturing complex in Calvert City, 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, and that predecessor assumed Goodrich's indemnification obligations relating to preexisting contamination. 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 ~~Company subsequently engaged in negotiations~~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 ~~resolve alleged violations. A Consent Agreement~~environmental issues at the Calvert City site from August 1, 2007 forward; and ~~Final Order (“CAFO”) was filed in October 2016, pursuant to which~~(2) either the Company ~~paid civil penalties~~or PolyOne might, from time to time in the ~~amount~~future (but not more than once every five years), institute an arbitration proceeding to adjust that percentage. In May 2017, PolyOne filed a demand for arbitration. In this proceeding, PolyOne seeks to readjust the percentage allocation of ~~$167.~~

~~The LDEQ has issued notices~~costs and to recover approximately $17 from the Company in reimbursement of ~~violations ("NOVs") regarding the Company's olefins facilities in Lake Charles, Louisiana for various air and water compliance issues.~~previously paid remediation costs. The Company has ~~reached an agreement with~~filed a cross demand for arbitration seeking unreimbursed remediation costs incurred during the LDEQ to settle certain of the NOVs along with other alleged violations not made the subject of any specific NOV in two separate settlement agreements, pursuant to which the Company paid $192 in civil penalties.

During September 2010, the Company's vinyls facilities in north Lake Charles and Plaquemine each received a Consolidated Compliance Order and Notice of Potential Penalty, alleging violations of various requirements of those facilities' air permits, based largely on self-reported permit deviations related to record-keeping violations. The Company has been negotiating a possible global settlement of these and several other matters with the LDEQ. The Company believes the resolution of these matters may require the payment of a monetary sanction in excess of $100.

In April 2015, Axiall received a communication from the EPA related to, among other things, the EPA's investigation of the 2012 and 2013 fires that occurred at its VCM plant in Lake Charles. In late 2015, Axiall settled this matter with the EPA, with such settlement including on-going supplemental environmental projects and a penalty payment of $878.relevant period.

2616

WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)

(in ~~thousands~~millions of dollars, except share amounts and per share data)

~~For several years, the EPA has been conducting an enforcement initiative~~On October 6, 2017, PolyOne filed suit against ~~petroleum refineries and petrochemical plants with respect to emissions from flares. On April 21, 2014,~~ the Company ~~received a Clean Air Act Section 114 Information Request from~~in the ~~EPA which sought information regarding flares~~U.S. District Court for the Western District of Kentucky seeking for the court, instead of the arbitration panel, to resolve claims asserted by the Company in the arbitration proceedings related to reimbursement of costs incurred by the Company at the Calvert City complex. On May 30, 2018, the U.S. District Court for the Western District of Kentucky granted the Company's motion to dismiss, concluding that all of PolyOne's claims were the proper subject of the current arbitration panel's jurisdiction, and ~~certain Lake Charles facilities. The EPA has informed~~dismissed PolyOne's action before the court. On July 10, 2018, PolyOne filed another action in the U.S. District Court for the Western District of Kentucky, seeking for the court to issue an injunction against continued proceedings in the arbitration. PolyOne's motion is currently pending before the Court.

At this time, the Company is not able to estimate the impact, if any, that the information provided leads the EPA to believe that some of the flares are out of compliance with applicable standards. The EPA has indicated that it is seeking a consent decree that would obligate the Company to take corrective actions relating to the alleged noncompliance. The Company believes the resolution of these matters may require the payment of a monetary sanction in excess of $100.

~~The Company does not believe that resolutions of any or all of these matters will~~arbitration proceeding could have ~~a material adverse effect~~ on the Company's consolidated financial ~~condition, results~~statements either in the current period or in later periods. Any cash expenditures that the Company might incur in the future with respect to the remediation of ~~operations or cash flows.~~contamination at the Calvert City 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 Remediation: Reasonably Possible Matters. The Company's assessment of the potential impact of environmental contingencies is subject to considerable uncertainty due to the complex, ongoing and evolving process of investigation and remediation, if necessary, of such environmental contingencies, and the potential for technological and regulatory developments. As such, in addition to the amounts currently reserved, the Company may be subject to reasonably possible loss contingencies related to environmental matters in the range of ~~$40,000~~$55 to ~~$80,000.~~$110.

Commitments. ~~In connection with the Merger, the~~The Company became a party to a joint venture investment with Lotte Chemical USA Corporation to build an ethylene facility, ~~LACC, LLC ("LACC").~~LACC. The ethylene facility is located adjacent to the Company's vinyls facility in Lake Charles. Pursuant to the contribution and subscription agreement, the Company agreed to make a maximum capital commitment to LACC of up to ~~$225,000~~$225 to fund the construction costs of the ethylene plant, which represents approximately ~~10.0%~~10% of the interests in LACC. The construction of the ethylene plant commenced in January 2016, with an anticipated start-up in 2019. As of ~~September~~June 30, ~~2017,~~2018, the Company had funded approximately ~~$106,405~~$160 of the Company's portion of the construction costs of the ethylene plant.

~~19.~~13. Segment Information

The Company operates in two principal operating 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 June 30,				Six Months Ended June 30,
	2017		2016		2017		2016		2018		2017		2018		2017
Net external sales
Olefins
Polyethylene	$	377,269	$	380,810	$	1,121,603	$	1,098,500	$	387	$	358	$	756	$	744
Styrene, feedstock and other	124,974		116,555		412,869		324,369		95		131		229		288
Total Olefins	502,243		497,365		1,534,472		1,422,869		482		489		985		1,032
Vinyls
PVC, caustic soda and other	1,252,963		599,276		3,541,409		1,492,650		1,396		1,157		2,754		2,288
Building products	353,683		182,387		954,785		424,757		357		333		646		602
Total Vinyls	1,606,646		781,663		4,496,194		1,917,407		1,753		1,490		3,400		2,890
	$	2,108,889	$	1,279,028	$	6,030,666	$	3,340,276	$	2,235	$	1,979	$	4,385	$	3,922

Intersegment sales
Olefins	$	106,722	$	30,614	$	290,658	$	85,856	$	112	$	98	$	232	$	184
Vinyls	260		2,130		871		2,719		1		—		1		—
	$	106,982	$	32,744	$	291,529	$	88,575	$	113	$	98	$	233	$	184

2717

WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)

(in ~~thousands~~millions of dollars, except share amounts and per share data)


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016			2018			2017			2018			2017
Income (loss) from operations
Olefins	$	165,438		$	118,475		$	488,532		$	408,274		$	158		$	143		$	321		$	323
Vinyls	216,515			22,235			431,276			136,559			271			141			537			211
Corporate and other	(16,206		)	(94,147		)	(51,647		)	(116,056		)	(25		)	(20		)	(53		)	(36		)
	$	365,747		$	46,563		$	868,161		$	428,777		$	404		$	264		$	805		$	498

Depreciation and amortization
Olefins	$	35,029		$	36,649		$	111,244		$	95,582		$	33		$	35		$	67		$	76
Vinyls	117,490			56,136			331,585			128,691			120			107			238			214
Corporate and other	1,115			1,444			5,704			2,920			3			3			7			5
	$	153,634		$	94,229		$	448,533		$	227,193		$	156		$	145		$	312		$	295

Other income (expense), net
Other income, net
Olefins	$	(184	)	$	1,101		$	1,555		$	3,706		$	1		$	1		$	3		$	2
Vinyls	(970		)	(1,226		)	1,087			1,722			4			—			16			6
Corporate and other	3,212			41,390			3,949			46,663			3			1			11			1
	$	2,058		$	41,265		$	6,591		$	52,091		$	8		$	2		$	30		$	9

Provision for (benefit from) income taxes
Olefins	$	58,218		$	31,956		$	152,482		$	136,429		$	36		$	36		$	73		$	94
Vinyls	60,784			(3,912		)	114,979			29,655			69			39			130			54
Corporate and other	(10,383		)	(34,596		)	(34,771		)	(36,752		)	(12		)	(7		)	(21		)	(24		)
	$	108,619		$	(6,552	)	$	232,690		$	129,332		$	93		$	68		$	182		$	124

Capital expenditures
Olefins	$	20,960		$	96,469		$	70,043		$	285,359		$	26		$	24		$	48		$	49
Vinyls	107,515			83,523			329,968			180,392			128			114			258			222
Corporate and other	4,894			178			14,260			1,579			4			9			6			10
	$	133,369		$	180,170		$	414,271		$	467,330		$	158		$	147		$	312		$	281

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


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016			2018			2017			2018			2017
Income from operations	$	365,747		$	46,563		$	868,161		$	428,777		$	404		$	264		$	805		$	498
Interest expense	(40,036		)	(24,366		)	(118,784		)	(36,966		)	(31		)	(39		)	(68		)	(79		)
Other income (expense), net	2,058			41,265			6,591			52,091
Other income, net													8			2			30			9
Income before income taxes	$	327,769		$	63,462		$	755,968		$	443,902		$	381		$	227		$	767		$	428



	June 30, 2018		December 31, 2017
Total assets
Olefins	$	2,044	$	2,006
Vinyls	8,863		8,853
Corporate and other	439		1,217
	$	11,346	$	12,076

WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)

(in ~~thousands~~millions of dollars, except share amounts and per share data)

14. Subsequent Events

September 30,
2017 December 31,
2016
Total assets
Olefins $ 2,015,888
$ 2,092,617
Vinyls 8,695,509
8,287,204
Corporate and other 532,728
510,432
$ 11,244,125
$ 10,890,253
New Credit Agreement

On July 24, 2018, the Company entered into a new $1,000 revolving credit facility that is scheduled to mature on July 24, 2023 and, in connection therewith, terminated the existing Credit Agreement. For additional information on the New Credit Agreement, see Note 6.

~~20.~~ Westlake Chemical Partners LP ~~Offerings~~

In March 2014, we formed Westlake Chemical Partners LP ("WLKP") to operate, acquire and develop ethylene production facilities and related assets. On August 4, 2014, WLKP completed its initial public offering (the "IPO") of 12,937,500 common units at a price of $24.00 per unit. Net proceeds to WLKP from the sale of the units was approximately $286,100, net of underwriting discounts, structuring fees and estimated offering expenses of approximately $24,400. At the consummation of the IPO, WLKP's assets consisted of a 10.6%The Company has an 81.7% limited partner interest in Westlake Chemical OpCo LP ("OpCo"), ~~as well as the~~a 43.8% limited partner interest in Westlake Chemical Partners LP ("Westlake Partners"), a general partner interest in ~~OpCo. Immediately after~~Westlake Partners and incentive distribution rights ("IDRs"). On July 27, 2018, the ~~IPO,~~Westlake Partners' partnership agreement was amended to revise the ~~Company retained an 89.4% limited partner interest~~minimum quarterly distribution thresholds for Westlake Partners' IDRs. The amended agreement provides that Westlake Partners will distribute cash each quarter to all the unitholders, pro rata, until each unit has received a distribution of $1.2938. If cash distributions to Westlake Partners' unitholders exceed $1.2938 per unit in ~~OpCo~~any quarter, Westlake Partners' unitholders and ~~a significant interest in WLKP. The initial public offering represented~~Westlake, as the ~~sale of 47.8%~~holder of the ~~common units in WLKP.~~Westlake Partners' incentive distribution rights, will receive distributions according to the following percentage allocations per the amendment:

On April 29, 2015, WLKP purchased an additional 2.7% newly-issued limited partner interest in OpCo. On September 29, 2017, WLKP purchased an additional 5.0% newly-issued limited partner interest in OpCo.

~~On September 29, 2017, WLKP completed~~



	Marginal Percentage Interest in Distributions
Total Quarterly Distribution Per Unit	Unitholders		IDR Holders
Above $1.2938 up to $1.4063	85.0	%	15.0	%
Above $1.4063 up to $1.6875	75.0	%	25.0	%
Above $1.6875	50.0	%	50.0	%

The Westlake Partners' distribution for the three months ended June 30, 2018 did not exceed the $1.2938 per unit threshold, and, as a ~~secondary offering of 5,175,000 common units at a price of $22.00 per unit. Net proceeds to WLKP from the sale~~result of the ~~units~~amendment, no distribution was ~~$110,739, net~~made with respect to Westlake Partners' IDRs to Westlake, as the holder of ~~underwriting discounts, structuring fees~~the Westlake Partners' IDRs.

Prior to the amendment, Westlake Partners' partnership agreement provided that Westlake Partners' unitholders and ~~estimated offering expenses~~Westlake, as the holder of ~~approximately $3,111. At September 30, 2017, WLKP had a 18.3% limited partner interest in OpCo, and~~Westlake Partners' IDRs, would receive distributions according to the ~~Company retained a 81.7% limited partner interest in OpCo and a significant interest in WLKP.~~following percentage allocations:



	Marginal Percentage Interest in Distributions
Total Quarterly Distribution Per Unit	Unitholders		IDR Holders
Above $0.3163 up to $0.3438	85.0	%	15.0	%
Above $0.3438 up to $0.4125	75.0	%	25.0	%
Above $0.4125	50.0	%	50.0	%

~~21. Subsequent Events~~

~~Subsequent events were evaluated through the date on which the consolidated financial statements were issued.~~

~~22.~~15. Guarantor Disclosures

The Company's payment obligations under the 4.375% 2047 Senior Notes, the 3.60% ~~senior notes due~~ 2022 Senior Notes, the 3.60% 2026 Senior Notes and the 5.0% 2046 Senior Notes ~~4.625% Westlake 2021 Senior Notes and the 4.875% Westlake 2023 Senior Notes are~~were, as of June 30, 2018, required to be fully and unconditionally guaranteed by each of its current and future domestic subsidiaries that guarantee other debt of the Company or of another guarantor of those notes in excess of ~~$5,000~~$5 (the "Guarantor Subsidiaries"). Each Guarantor Subsidiary is 100% owned by Westlake Chemical Corporation (the "100% Owned Guarantor Subsidiaries"). ~~In October~~During 2016 and 2017, the Company executed a Joinder Agreement with the Administrative Agent of the Credit Agreement, whereby certain subsidiaries of the Company were added as Guarantor Subsidiaries. These guarantees ~~are~~were 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 100% ~~owned~~Owned Guarantor Subsidiaries, and the remaining subsidiaries that dodid not guarantee the 4.375% 2047 Senior Notes, the 3.60% ~~senior notes due~~ 2022 ,Senior Notes, the 3.60% 2026 Senior Notes and the 5.0% 2046 Senior Notes ~~4.625% Westlake 2021 Senior Notes and the 4.875% Westlake 2023 Senior Notes~~as of June 30, 2018 (the "Non-Guarantor Subsidiaries"), together with consolidating eliminations necessary to present the Company's results on a consolidated basis.

In August 2016, certain of the Company's subsidiary guarantors were released from their guarantees of the Company's 3.60% senior notes due 2022 in connection with the replacement of the Company's revolving credit facility. Westlake Chemical OpCo LP, which was previously separately presented as a less than 100% owned guarantor, and certain of the Company's other 100% owned subsidiaries that were previously presented as guarantors, are now reflected as Non-Guarantor Subsidiaries in the condensed consolidating guarantor financial information. Prior periods were retrospectively adjusted to conform to the current presentation of Guarantor Subsidiaries and Non-Guarantor Subsidiaries.

2919

WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)

(in ~~thousands~~millions of dollars, except share amounts and per share data)

Condensed Consolidating Financial Information as of ~~September~~June 30, ~~2017~~2018


	Westlake Chemical Corporation		100% Owned Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Eliminations			Consolidated		Westlake Chemical Corporation		100% Owned Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Eliminations			Consolidated
Balance Sheet
Current assets
Cash and cash equivalents	$	334,111	$	33,089	$	311,033	$	—		$	678,233	$	258	$	40	$	184	$	—		$	482
Accounts receivable, net	3,060,591		4,048,824		432,238		(6,398,674		)	1,142,979		4,963		5,488		666		(9,856		)	1,261
Inventories	—		631,322		203,513		—			834,835		—		651		254		—			905
Prepaid expenses and other current assets	16,616		31,785		22,365		(35,906		)	34,860		158		39		23		(174		)	46
Restricted cash	—		1,275		7,351		—			8,626
Total current assets	3,411,318		4,746,295		976,500		(6,434,580		)	2,699,533		5,379		6,218		1,127		(10,030		)	2,694
Property, plant and equipment, net	—		4,330,104		2,013,533		—			6,343,637		—		4,466		2,002		—			6,468
Other assets, net
Goodwill	—		854,896		156,446		—			1,011,342		—		855		151		—			1,006
Customer relationships, net	—		493,960		141,924		—			635,884		—		447		122		—			569
Other intangible assets, net	—		92,155		74,011		—			166,166		—		81		68		—			149
Deferred charges and other assets, net	9,890,164		551,732		1,372,070		(11,426,403		)	387,563
Total other assets, net	9,890,164		1,992,743		1,744,451		(11,426,403		)	2,200,955
Other assets, net												11,188		800		1,312		(12,840		)	460
Total assets	$	13,301,482	$	11,069,142	$	4,734,484	$	(17,860,983	)	$	11,244,125	$	16,567	$	12,867	$	4,782	$	(22,870	)	$	11,346
Current liabilities
Accounts payable	$	5,821,323	$	830,824	$	128,673	$	(6,220,016	)	$	560,804	$	8,356	$	1,675	$	231	$	(9,680	)	$	582
Accrued liabilities	155,106		436,816		232,114		(214,564		)	609,472		183		514		255		(348		)	604
Total current liabilities	5,976,429		1,267,640		360,787		(6,434,580		)	1,170,276		8,539		2,189		486		(10,028		)	1,186
Long-term debt, net	3,256,280		4,334,142		223,578		(4,464,598		)	3,349,402		2,656		4,161		224		(4,375		)	2,666
Deferred income taxes	—		1,577,209		106,587		(22,882		)	1,660,914		—		1,072		94		(13		)	1,153
Pension and other liabilities	—		364,011		148,023		—			512,034		10		336		149		—			495
Total liabilities	9,232,709		7,543,002		838,975		(10,922,060		)	6,692,626		11,205		7,758		953		(14,416		)	5,500
Total Westlake Chemical Corporation stockholders' equity	4,068,773		3,526,140		3,412,784		(6,938,923		)	4,068,774		5,362		5,109		3,345		(8,454		)	5,362
Noncontrolling interests	—		—		482,725		—			482,725		—		—		484		—			484
Total equity	4,068,773		3,526,140		3,895,509		(6,938,923		)	4,551,499		5,362		5,109		3,829		(8,454		)	5,846
Total liabilities and equity	$	13,301,482	$	11,069,142	$	4,734,484	$	(17,860,983	)	$	11,244,125	$	16,567	$	12,867	$	4,782	$	(22,870	)	$	11,346

3020

WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)

(in ~~thousands~~millions of dollars, except share amounts and per share data)

Condensed Consolidating Financial Information as of December 31, ~~2016~~2017


	Westlake Chemical Corporation		100% Owned Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Consolidated		Westlake Chemical Corporation		100% Owned Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Eliminations			Consolidated
Balance Sheet
Current assets
Cash and cash equivalents	$	146,990	$	53,006	$	259,457	$	—		$	459,453	$	1,089	$	57	$	385	$	—		$	1,531
Accounts receivable, net	2,117,540		3,329,871		323,931		(4,832,599		)	938,743		3,331		4,128		580		(7,038		)	1,001
Inventories	—		597,819		203,281		—			801,100		—		654		246		—			900
Prepaid expenses and other current assets	30,748		41,755		12,494		(36,504		)	48,493		52		27		31		(79		)	31
Restricted cash	—		—		160,527		—			160,527
Total current assets	2,295,278		4,022,451		959,690		(4,869,103		)	2,408,316		4,472		4,866		1,242		(7,117		)	3,463
Property, plant and equipment, net	—		4,475,943		1,944,119		—			6,420,062		—		4,374		2,038		—			6,412
Other assets, net
Goodwill	—		791,706		154,847		—			946,553		—		855		157		—			1,012
Customer relationships, net	—		468,645		142,970		—			611,615		—		479		137		—			616
Other intangible assets, net	—		130,243		71,177		(25,581		)	175,839		—		88		73		—			161
Deferred charges and other assets, net	9,170,042		874,003		1,115,877		(10,832,054		)	327,868
Total other assets, net	9,170,042		2,264,597		1,484,871		(10,857,635		)	2,061,875
Other assets, net												10,706		798		1,271		(12,363		)	412
Total assets	$	11,465,320	$	10,762,991	$	4,388,680	$	(15,726,738	)	$	10,890,253	$	15,178	$	11,460	$	4,918	$	(19,480	)	$	12,076
Current liabilities
Accounts payable	$	4,330,375	$	748,364	$	225,300	$	(4,807,780	)	$	496,259	$	6,367	$	864	$	224	$	(6,855	)	$	600
Accrued liabilities	26,367		389,216		183,223		(61,323		)	537,483		189		484		246		(262		)	657
Term loan	—		—		149,341		—			149,341
Current portion of long-term debt, net												710		—		—		—			710
Total current liabilities	4,356,742		1,137,580		557,864		(4,869,103		)	1,183,083		7,266		1,348		470		(7,117		)	1,967
Long-term debt, net	3,584,949		4,090,775		—		(3,997,070		)	3,678,654		3,034		4,242		220		(4,369		)	3,127
Deferred income taxes	—		1,581,260		91,809		(22,494		)	1,650,575		—		1,026		92		(7		)	1,111
Pension and other liabilities	—		360,622		125,274		—			485,896		4		347		151		—			502
Total liabilities	7,941,691		7,170,237		774,947		(8,888,667		)	6,998,208		10,304		6,963		933		(11,493		)	6,707
Total Westlake Chemical Corporation stockholders' equity	3,523,629		3,592,754		3,245,317		(6,838,071		)	3,523,629		4,874		4,497		3,490		(7,987		)	4,874
Noncontrolling interests	—		—		368,416		—			368,416		—		—		495		—			495
Total equity	3,523,629		3,592,754		3,613,733		(6,838,071		)	3,892,045		4,874		4,497		3,985		(7,987		)	5,369
Total liabilities and equity	$	11,465,320	$	10,762,991	$	4,388,680	$	(15,726,738	)	$	10,890,253	$	15,178	$	11,460	$	4,918	$	(19,480	)	$	12,076

3121

WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)

(in ~~thousands~~millions of dollars, except share amounts and per share data)

Condensed Consolidating Financial Information for the Three Months Ended June 30, 2018



	Westlake Chemical Corporation			100% Owned Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Statement of Operations
Net sales	$	—		$	1,826		$	878		$	(469	)	$	2,235
Cost of sales	—			1,465			680			(462		)	1,683
Gross profit	—			361			198			(7		)	552
Selling, general and administrative expenses	—			86			36			(7		)	115
Amortization of intangibles	—			19			6			—			25
Integration-related costs	—			8			—			—			8
Income from operations	—			248			156			—			404
Other income (expense)
Interest expense	(31		)	(52		)	(3		)	55			(31		)
Other income (expense), net	41			8			14			(55		)	8
Income (loss) before income taxes	10			204			167			—			381
Provision (benefit) for income taxes	2			71			20			—			93
Equity in net income of subsidiaries	270			—			—			(270		)	—
Net income	278			133			147			(270		)	288
Net income attributable to noncontrolling interests	—			—			10			—			10
Net income attributable to Westlake Chemical Corporation	$	278		$	133		$	137		$	(270	)	$	278
Comprehensive income attributable to Westlake Chemical Corporation	$	242		$	133		$	99		$	(232	)	$	242

WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)

(in millions of dollars, except share amounts and per share data)

Condensed Consolidating Financial Information for the Three Months Ended June 30, 2017



	Westlake Chemical Corporation			100% Owned Guarantor Subsidiaries			Non- Guarantor Subsidiaries		Eliminations			Consolidated
Statement of Operations
Net sales	$	—		$	1,597		$	804	$	(422	)	$	1,979
Cost of sales	—			1,350			640		(414		)	1,576
Gross profit	—			247			164		(8		)	403
Selling, general and administrative expenses	—			73			36		(8		)	101
Amortization of intangibles	—			23			7		—			30
Integration-related costs	—			8			—		—			8
Income from operations	—			143			121		—			264
Other income (expense)
Interest expense	(38		)	(46		)	—		45			(39		)
Other income (expense), net	37			6			4		(45		)	2
Income (loss) before income taxes	(1		)	103			125		—			227
Provision (benefit) for income taxes	4			52			12		—			68
Equity in net income of subsidiaries	158			—			—		(158		)	—
Net income	153			51			113		(158		)	159
Net income attributable to noncontrolling interests	—			—			6		—			6
Net income attributable to Westlake Chemical Corporation	$	153		$	51		$	107	$	(158	)	$	153
Comprehensive income attributable to Westlake Chemical Corporation	$	205		$	52		$	148	$	(200	)	$	205

WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)

(in millions of dollars, except share amounts and per share data)

Condensed Consolidating Financial Information for the Six Months Ended June 30, 2018



	Westlake Chemical Corporation			100% Owned Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Statement of Operations
Net sales	$	—		$	3,572		$	1,717		$	(904	)	$	4,385
Cost of sales	—			2,870			1,312			(891		)	3,291
Gross profit	—			702			405			(13		)	1,094
Selling, general and administrative expenses	—			163			73			(13		)	223
Amortization of intangibles	—			38			13			—			51
Integration-related costs	—			15			—			—			15
Income from operations	—			486			319			—			805
Other income (expense)
Interest expense	(69		)	(100		)	(5		)	106			(68		)
Other income (expense), net	86			16			34			(106		)	30
Income (loss) before income taxes	17			402			348			—			767
Provision (benefit) for income taxes	4			134			44			—			182
Equity in net income of subsidiaries	552			—			—			(552		)	—
Net income	565			268			304			(552		)	585
Net income attributable to noncontrolling interests	—			—			20			—			20
Net income attributable to Westlake Chemical Corporation	$	565		$	268		$	284		$	(552	)	$	565
Comprehensive income attributable to Westlake Chemical Corporation	$	525		$	268		$	244		$	(512	)	$	525

WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)

(in millions of dollars, except share amounts and per share data)

Condensed Consolidating Financial Information for the Six Months Ended June 30, 2017



	Westlake Chemical Corporation			100% Owned Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Statement of Operations
Net sales	$	—		$	3,177		$	1,540		$	(795	)	$	3,922
Cost of sales	—			2,712			1,222			(781		)	3,153
Gross profit	—			465			318			(14		)	769
Selling, general and administrative expenses	1			146			67			(14		)	200
Amortization of intangibles	—			42			13			—			55
Integration-related costs	—			16			—			—			16
Income from operations	(1		)	261			238			—			498
Other income (expense)
Interest expense	(76		)	(92		)	(1		)	90			(79		)
Other income (expense), net	74			9			16			(90		)	9
Income (loss) before income taxes	(3		)	178			253			—			428
Provision (benefit) for income taxes	(1		)	105			20			—			124
Equity in net income of subsidiaries	293			—			—			(293		)	—
Net income	291			73			233			(293		)	304
Net income attributable to noncontrolling interests	—			—			13			—			13
Net income attributable to Westlake Chemical Corporation	$	291		$	73		$	220		$	(293	)	$	291
Comprehensive income attributable to Westlake Chemical Corporation	$	359		$	73		$	259		$	(332	)	$	359

WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)

(in millions of dollars, except share amounts and per share data)

Condensed Consolidating Financial Information for the Six Months Ended June 30, 2018



	Westlake Chemical Corporation			100% Owned Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Statement of Cash Flows
Cash flows from operating activities
Net income	$	565		$	268		$	304		$	(552	)	$	585
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization	—			208			104			—			312
Deferred income taxes	1			40			4			—			45
Net changes in working capital and other	(533		)	(459		)	47			552			(393		)
Net cash provided by operating activities	33			57			459			—			549
Cash flows from investing activities
Additions to property, plant and equipment	—			(248		)	(64		)	—			(312		)
Additions to investments in unconsolidated subsidiaries	—			(35		)	(10		)	—			(45		)
Other	—			3			—			—			3
Net cash used for investing activities	—			(280		)	(74		)	—			(354		)
Cash flows from financing activities
Intercompany financing	347			(1		)	(346		)	—			—
Dividends paid	(54		)	—			—			—			(54		)
Distributions to noncontrolling interests	—			207			(236		)	—			(29		)
Proceeds from notes payable and drawdown of revolver	—			—			6			—			6
Redemption and repayment of notes payable	(1,165		)	—			(8		)	—			(1,173		)
Other	8			—			—			—			8
Net cash used for financing activities	(864		)	206			(584		)	—			(1,242		)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	—			—			(2		)	—			(2		)
Net decrease in cash, cash equivalents and restricted cash	(831		)	(17		)	(201		)	—			(1,049		)
Cash, cash equivalents and restricted cash at beginning of period	1,089			79			386			—			1,554
Cash, cash equivalents and restricted cash at end of period	$	258		$	62		$	185		$	—		$	505

WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)

(in millions of dollars, except share amounts and per share data)

Condensed Consolidating Financial Information for the ~~Three~~Six Months Ended ~~September~~June 30, 2017

Westlake
Chemical
Corporation

100% Owned
Guarantor
Subsidiaries

Non-
Guarantor
Subsidiaries
Eliminations Consolidated
Statement of Operations
Net sales $ —
$ 1,704,086
$ 837,536
$ (432,733 ) $ 2,108,889
Cost of sales —
1,371,813
665,124
(426,100 ) 1,610,837
Gross profit —
332,273
172,412
(6,633 ) 498,052
Selling, general and administrative expenses 1,509
93,149
37,617
(6,633 ) 125,642
Transaction and integration-related costs —
6,387
276
—
6,663
Income (loss) from operations (1,509 ) 232,737
134,519
—
365,747
Other income (expense)
Interest expense (38,811 ) (44,381 ) (1,635 ) 44,791
(40,036 )
Other income, net 37,563
2,517
6,769
(44,791 ) 2,058
Income (loss) before income taxes (2,757 ) 190,873
139,653
—
327,769
Provision for (benefit from) income taxes (599 ) 92,597
16,621
—
108,619
Equity in net income of subsidiaries 212,989
—
—
(212,989 ) —
Net income 210,831
98,276
123,032
(212,989 ) 219,150
Net income attributable to noncontrolling
   interests
—
—
8,318
—
8,318
Net income attributable to Westlake Chemical
   Corporation
$ 210,831
$ 98,276
$ 114,714
$ (212,989 ) $ 210,832
Comprehensive income attributable to
   Westlake Chemical Corporation
$ 254,400
$ 98,455
$ 158,160
$ (256,615 ) $ 254,400



	Westlake Chemical Corporation			100% Owned Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Statement of Cash Flows
Cash flows from operating activities
Net income	$	291		$	73		$	233		$	(293	)	$	304
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization	—			194			101			—			295
Deferred income taxes	—			15			—			—			15
Net changes in working capital and other	(400		)	(26		)	(1		)	293			(134		)
Net cash provided by (used for) operating activities	(109		)	256			333			—			480
Cash flows from investing activities
Additions to property, plant and equipment	—			(199		)	(82		)	—			(281		)
Additions to investments in unconsolidated subsidiaries	—			(31		)	—			—			(31		)
Other	—			2			—			—			2
Net cash used for investing activities	—			(228		)	(82		)	—			(310		)
Cash flows from financing activities
Intercompany financing	242			(254		)	12			—			—
Dividends paid	(49		)	—			—			—			(49		)
Distributions to noncontrolling interests	—			189			(205		)	—			(16		)
Proceeds from notes payable and drawdown of revolver	175			—			3			—			178
Repayment of term loan	—			—			(150		)	—			(150		)
Repayment of revolver	(360		)	—			—			—			(360		)
Redemption and repayment of notes payable	—			(1		)	(4		)	—			(5		)
Other	1			—			—			—			1
Net cash used for financing activities	9			(66		)	(344		)	—			(401		)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	—			—			13			—			13
Net decrease in cash, cash equivalents and restricted cash	(100		)	(38		)	(80		)	—			(218		)
Cash, cash equivalents and restricted cash at beginning of period	147			78			421			—			646
Cash, cash equivalents and restricted cash at end of period	$	47		$	40		$	341		$	—		$	428

~~WESTLAKE CHEMICAL CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued~~

~~(Unaudited)~~

~~(in thousands of dollars, except share amounts and per share data)~~

~~Condensed Consolidating Financial Information for the~~ ~~Three Months Ended September 30, 2016~~

Westlake
Chemical
Corporation

100% Owned
Guarantor
Subsidiaries

Non-
Guarantor
Subsidiaries
Eliminations Consolidated
Statement of Operations
Net sales $ —
$ 984,937
$ 611,983
$ (317,892 ) $ 1,279,028
Cost of sales —
892,198
497,460
(312,763 ) 1,076,895
Gross profit —
92,739
114,523
(5,129 ) 202,133
Selling, general and administrative expenses 2,092
47,952
27,814
(5,129 ) 72,729
Transactions and integration-related costs —
82,687
154
—
82,841
Income (loss) from operations (2,092 ) (37,900 ) 86,555
—
46,563
Other income (expense)
Interest expense (22,130 ) (22,207 ) (908 ) 20,879
(24,366 )
Other income (expense), net 35,405
(15,189 ) 41,928
(20,879 ) 41,265
Income (loss) before income taxes 11,183
(75,296 ) 127,575
—
63,462
Provision for (benefit from) income taxes (2,088 ) (11,080 ) 6,616
—
(6,552 )
Equity in net income of subsidiaries 52,391
—
—
(52,391 ) —
Net income 65,662
(64,216 ) 120,959
(52,391 ) 70,014
Net income attributable to noncontrolling
   interests
—
—
4,352
—
4,352
Net income attributable to Westlake Chemical
   Corporation
$ 65,662
$ (64,216 ) $ 116,607
$ (52,391 ) $ 65,662
Comprehensive income attributable to
   Westlake Chemical Corporation
$ 39,636
$ (64,113 ) $ 104,129
$ (40,015 ) $ 39,637

~~WESTLAKE CHEMICAL CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued~~

~~(Unaudited)~~

~~(in thousands of dollars, except share amounts and per share data)~~

~~Condensed Consolidating Financial Information for the Nine Months Ended September 30, 2017~~

Westlake
Chemical
Corporation

100% Owned
Guarantor
Subsidiaries

Non-
Guarantor
Subsidiaries
Eliminations Consolidated
Statement of Operations
Net sales $ —
$ 4,880,682
$ 2,377,862
$ (1,227,878 ) $ 6,030,666
Cost of sales —
4,077,633
1,889,571
(1,207,567 ) 4,759,637
Gross profit —
803,049
488,291
(20,311 ) 1,271,029
Selling, general and administrative expenses 2,429
281,412
116,389
(20,311 ) 379,919
Transaction and integration-related costs —
22,611
338
—
22,949
Income (loss) from operations (2,429 ) 499,026
371,564
—
868,161
Other income (expense)
Interest expense (115,156 ) (133,048 ) (5,623 ) 135,043
(118,784 )
Other income, net 112,002
2,944
26,688
(135,043 ) 6,591
Income (loss) before income taxes (5,583 ) 368,922
392,629
—
755,968
Provision for (benefit from) income taxes (1,451 ) 198,054
36,087
—
232,690
Equity in net income of subsidiaries 505,981
—
—
(505,981 ) —
Net income 501,849
170,868
356,542
(505,981 ) 523,278
Net income attributable to noncontrolling
   interests
—
—
21,429
—
21,429
Net income attributable to Westlake Chemical
   Corporation
$ 501,849
$ 170,868
$ 335,113
$ (505,981 ) $ 501,849
Comprehensive income attributable to
   Westlake Chemical Corporation
$ 613,350
$ 171,413
$ 233,030
$ (404,443 ) $ 613,350

~~WESTLAKE CHEMICAL CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued~~

~~(Unaudited)~~

~~(in thousands of dollars, except share amounts and per share data)~~

~~Condensed Consolidating Financial Information for the Nine Months Ended September 30, 2016~~

Westlake
Chemical
Corporation

100% Owned
Guarantor
Subsidiaries

Non-
Guarantor
Subsidiaries
Eliminations Consolidated
Statement of Operations
Net sales $ —
$ 2,567,232
$ 1,734,611
$ (961,567 ) $ 3,340,276
Cost of sales —
2,233,395
1,353,764
(945,967 ) 2,641,192
Gross profit —
333,837
380,847
(15,600 ) 699,084
Selling, general and administrative expenses 3,648
121,261
70,448
(15,600 ) 179,757
Transaction and integration-related costs —
90,396
154
—
90,550
Income (loss) from operations (3,648 ) 122,180
310,245
—
428,777
Other income (expense)
Interest expense (43,228 ) (39,693 ) (1,054 ) 47,009
(36,966 )
Other income (expense), net 40,807
(22,291 ) 80,584
(47,009 ) 52,091
Income (loss) before income taxes (6,069 ) 60,196
389,775
—
443,902
Provision for (benefit from) income taxes (8,268 ) 106,792
30,808
—
129,332
Equity in net income of subsidiaries 297,715
—
—
(297,715 ) —
Net income 299,914
(46,596 ) 358,967
(297,715 ) 314,570
Net income attributable to noncontrolling
   interests
—
—
14,656
—
14,656
Net income attributable to Westlake Chemical
   Corporation
$ 299,914
$ (46,596 ) $ 344,311
$ (297,715 ) $ 299,914
Comprehensive income attributable to
   Westlake Chemical Corporation
$ 321,079
$ (46,187 ) $ 364,402
$ (318,214 ) $ 321,080

~~WESTLAKE CHEMICAL CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued~~

~~(Unaudited)~~

~~(in thousands of dollars, except share amounts and per share data)~~

~~Condensed Consolidating Financial Information for the Nine Months Ended September 30, 2017~~

Westlake
Chemical
Corporation

100% Owned
Guarantor
Subsidiaries

Non-
Guarantor
Subsidiaries
Eliminations Consolidated
Statement of Cash Flows
Cash flows from operating activities
Net income $ 501,849
$ 170,868
$ 356,542
$ (505,981 ) $ 523,278
Adjustments to reconcile net income to net
   cash provided by (used for) operating
   activities

Depreciation and amortization —
294,227
154,306
—
448,533
Deferred income taxes (217 ) 20,299
3,212
—
23,294
Net changes in working capital and other (532,120 ) (129,330 ) 123,028
505,981
(32,441 )
Net cash provided by (used for)
   operating activities
(30,488 ) 356,064
637,088
—
962,664
Cash flows from investing activities
Additions to property, plant and equipment —
(294,138 ) (120,133 ) —
(414,271 )
Additions to cost method investment —
(47,000 ) —
—
(47,000 )
Proceeds from disposition of assets —
25
146
—
171
Proceeds from involuntary conversion of
   assets
—
—
1,672
—
1,672
Receivable under the investment management
   agreement
—
—
(119,000 ) 119,000
—
Settlements of derivative instruments —
(7 ) —
—
(7 )
Net cash used for investing activities —
(341,120 ) (237,315 ) 119,000
(459,435 )
Cash flows from financing activities
Intercompany financing 498,272
(313,276 ) (184,996 ) —
—
Receivable under the investment management
   agreement
119,000
—
—
(119,000 ) —
Debt issuance costs (376 ) —
—
—
(376 )
Dividends paid (76,491 ) —
—
—
(76,491 )
Distributions to noncontrolling interests —
279,203
(299,970 ) —
(20,767 )
Net proceeds from issuance of Westlake
   Chemical Partners LP common units
—
—
110,739
—
110,739
Proceeds from issuance of notes payable —
—
5,946
—
5,946
Proceeds from drawdown of revolver 225,000
—
—
—
225,000
Restricted cash associated with term loan —
—
154,000
—
154,000
Repayment of term loan —
—
(150,000 ) —
(150,000 )
Repayment of notes payable —
(788 ) (5,907 ) —
(6,695 )
Repayment of revolver (550,000 ) —
—
—
(550,000 )
Other 2,204
—
—
—
2,204
Net cash provided by (used for)
   financing activities
217,609
(34,861 ) (370,188 ) (119,000 ) (306,440 )

~~WESTLAKE CHEMICAL CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS��Continued~~

~~(Unaudited)~~

~~(in thousands of dollars, except share amounts and per share data)~~

Westlake
Chemical
Corporation

100% Owned
Guarantor
Subsidiaries

Non-
Guarantor
Subsidiaries
Eliminations Consolidated
Effect of exchange rate changes on cash and
   cash equivalents
—
—
21,991
—
21,991
Net increase (decrease) in cash and cash
   equivalents
187,121
(19,917 ) 51,576
—
218,780
Cash and cash equivalents at beginning of
   period
146,990
53,006
259,457
—
459,453
Cash and cash equivalents at end of period $ 334,111
$ 33,089
$ 311,033
$ —
$ 678,233

~~WESTLAKE CHEMICAL CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued~~

~~(Unaudited)~~

~~(in thousands of dollars, except share amounts and per share data)~~

~~Condensed Consolidating Financial Information for the~~ ~~Nine Months Ended September 30, 2016~~

Westlake
Chemical
Corporation

100% Owned
Guarantor
Subsidiaries

Non-
Guarantor
Subsidiaries
Eliminations Consolidated
Statement of Cash Flows
Cash flows from operating activities
Net income $ 299,914
$ (46,596 ) $ 358,967
$ (297,715 ) $ 314,570
Adjustments to reconcile net income (loss) to
   net cash provided by (used for) operating
   activities

Depreciation and amortization —
118,645
108,548
—
227,193
Deferred income taxes (5,178 ) 100,908
10,180
—
105,910
Net changes in working capital and other (313,676 ) (39,859 ) (47,693 ) 297,715
(103,513 )
Net cash provided by (used for)
   operating activities
(18,940 ) 133,098
430,002
—
544,160
Cash flows from investing activities
Acquisition of business, net of cash acquired —
(2,437,829 ) —
—
(2,437,829 )
Additions to property, plant and equipment —
(162,288 ) (305,042 ) —
(467,330 )
Additions to cost method investment —
(4,000 ) —
—
(4,000 )
Proceeds from disposition of assets —
48
165
—
213
Proceeds from sales and maturities of
   securities
658,338
—
4,600
—
662,938
Purchase of securities (138,422 ) —
—
—
(138,422 )
Settlements of derivative instruments —
(4,655 ) —
—
(4,655 )
Net cash provided by (used for)
   investing activities
519,916
(2,608,724 ) (300,277 ) —
(2,389,085 )
Cash flows from financing activities
Intercompany financing (2,242,604 ) 2,289,200
(46,596 ) —
—
Debt issuance costs (33,617 ) —
(1,590 ) —
(35,207 )
Dividends paid (71,933 ) —
—
—
(71,933 )
Distributions to noncontrolling interests —
202,210
(214,510 ) —
(12,300 )
Proceeds from debt issuance 1,428,512
—
—
—
1,428,512
Proceeds from issuance of notes payable —
—
5,597
—
5,597
Proceeds from term loan and drawdown of
   revolver
450,000
—
150,000
—
600,000
Restricted cash associated with term loan —
—
(154,000 ) —
(154,000 )
Repayment of notes payable —
—
(10,602 ) —
(10,602 )
Repayment of revolver (125,000 ) —
—
—
(125,000 )
Repurchase of common stock for treasury (67,406 ) —
—
—
(67,406 )
Other 2,840
—
—
—
2,840
Net cash provided by (used for)
   financing activities
(659,208 ) 2,491,410
(271,701 ) —
1,560,501
Effect of exchange rate changes on cash and
   cash equivalents
—
—
2,418
—
2,418
Net increase (decrease) in cash and cash
   equivalents
(158,232 ) 15,784
(139,558 ) —
(282,006 )
Cash and cash equivalents at beginning of
   period
303,131
6,818
352,576
—
662,525
Cash and cash equivalents at end of period $ 144,899
$ 22,602
$ 213,018
$ —
$ 380,519

3827

Table of Contents


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 ("Westlake" or the "Company") 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, ~~2016~~2017 (the "~~2016~~2017 Form 10-K"). 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 global manufacturer and marketer of petrochemicals, polymers and building products. Our two principal operating segments are Olefins and Vinyls. We use athe majority of our internally-produced basic chemicals to produce higher value-added chemicals and building products.

Consumption of the basic chemicals that we manufacture in the commodity portions of our olefins and vinyls processes has increased significantly since we began operations in 1986. Our olefins and vinyls products are some of the most widely used chemicals in the world and are upgraded into a wide variety of higher value-added chemical products used in many end-markets. Petrochemicals are typically manufactured in large volume by a number of different producers using widely available technologies. The petrochemical industry exhibits cyclical commodity characteristics, and margins are influenced by changes in the balance between supply and demand and the resulting operating rates, the level of general economic activity and the price of raw materials. The cycle is generally characterized by periods of tight supply, leading to high operating rates and margins, followed by a decline in operating rates and margins primarily as a result of excess new capacity additions. Due to the significant size of new plants, capacity additions are built in large increments and typically require several years of demand growth to be absorbed.

Since 2009 and continuing through the ~~third~~second quarter of ~~2017,~~2018, a cost advantage for ethane-based ethylene producers over naphtha-based ethylene producers has allowed a strong export market for polyethylene and ethylene derivatives and higher margins for North American chemical producers, including Westlake. ~~However, the falling crude oil prices in recent years have resulted in reduced prices and margins.~~ Continued strong global demand for polyethylene has ~~resulted in improved~~benefited operating margins and cash flows for our Olefins segment in recent years. However, we ~~have seen~~saw a significant reduction in the cost advantage enjoyed by North American ethane-based ethylene producers due to lower crude oil prices, beginning in the third quarter of 2014 and continuing through ~~the third quarter of 2017.~~early 2018 (which resulted in reduced prices and margins). Looking forward, new ethylene and polyethylene capacity additions in North America, Asia and the Middle East ~~and a number of new capacities announced in recent years,~~ may continue to lead to periods of over-supply and lower ~~profitability. As a result, our Olefins segment operating margins may be negatively impacted.~~profitability despite the recent trend of rising crude oil prices.

Since the ~~2008~~U.S. housing market collapse in 2008, continued slow recovery in the U.S. construction markets and budgetary constraints in municipal spending ~~have~~ contributed to lower North American demand for our vinyls products, which ~~have~~ negatively impacted our Vinyls segment operating rates and margins. However, since late 2010, the PVC industry in the U.S. has experienced an increase in PVC resin exports, driven largely by more competitive feedstock and energy cost positions in the U.S. As a consequence, the U.S. PVC resin industry operating rates have improved since 2010. In addition, our July 2014 acquisition of Vinnolit Holdings GmbH and its subsidiary companies ("Vinnolit"), an integrated global leader in specialty PVC resins, has contributed to improved operating margins and cash flows for our Vinyls segment. With the acquisition of Axiall Corporation ("Axiall") in August 2016, Westlake is the third-largest global chlor-alkali producer and the third-largest PVC producer in the world. Westlake is the second-largest purchaser of ethylene in the U.S., and lower prices of ethylene could positively impact our Vinyls segment. Globally, there were large chlor-alkali capacity additions between 2008 and 2015 resulting in excess capacity and lower industry operating rates which exerted downward pressure on caustic soda pricing. Announced capacity is now complete and increasing demand driven by ~~the~~ improving economic growth and U.S. producers' competitive export position is expected to result in improved operating rates and caustic soda pricing. On August 31, 2016, we completed the acquisition of Axiall Corporation ("Axiall") for $33.00 per share in an all-cash transaction (the "Merger"). The combined company is the third-largest global chlor-alkali producer and the third-largest PVC producer in the world. Westlake is the second-largest purchaser of ethylene in the U.S. and lower prices could positively impact our Vinyls segment.

The economic environment in the U. S. and globally ~~appears to be~~has been improving. However, depending on the performance of the global economy and potential changes in trade policies in the remainder of ~~2017~~2018 and beyond, our financial condition, results of operations or cash flows could be negatively impacted.

Non-GAAP Financial Measures

The body of accounting principles generally accepted in the United States is commonly referred to as ~~"U.S. GAAP.~~"GAAP." For this purpose, a non-GAAP financial measure is generally defined by the ~~Securities and Exchange Commission ("SEC")~~SEC as one that purports to measure historical or future financial performance, financial position or cash flows, but excludes or includes amounts that would not be so adjusted in the most comparable GAAP measures. In this report, we disclose non-GAAP financial measures, primarily earnings before interest, taxes, depreciation and amortization ("EBITDA"). EBITDA is calculated as net income before interest expense, income taxes, depreciation and amortization. The non-GAAP financial measures described in this Form 10-Q are not substitutes for the GAAP measures of earnings and cash ~~flow.~~flows.

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EBITDA is included in this Form 10-Q because our management considers it an important supplemental measure of our performance and believes that it is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry, some of which present EBITDA when reporting their results. We regularly evaluate our performance as compared to other companies in our industry that have different financing and capital structures and/or tax rates by using EBITDA. In addition, we utilize EBITDA in evaluating acquisition targets. Management also believes that EBITDA is a useful tool for measuring our ability to meet our future debt service, capital expenditures and working capital requirements, and EBITDA is commonly used by us and our investors to measure our ability to service indebtedness. EBITDA is not a substitute for the GAAP measures of earnings or of cash ~~flow~~flows and is not necessarily a measure of our ability to fund our cash needs. In addition, it should be noted that companies calculate EBITDA differently and, therefore, EBITDA as presented for us may not be comparable to EBITDA reported by other companies. EBITDA has material limitations as a performance measure because it excludes interest expense, depreciation and amortization, and income taxes.

Recent Developments

~~On September 29, 2017, Westlake Chemical Partners, LP ("WLKP") completed a secondary offering of 5,175,000 common units at a price of $22.00 per unit and purchased~~We have an ~~additional 5.0% newly-issued~~81.7% limited partner interest in Westlake Chemical OpCo LP ("OpCo") ~~for approximately $229.2 million resulting in an aggregate 18.3%~~, a 43.8% limited partner interest in ~~OpCo effective~~Westlake Chemical Partners LP ("Westlake Partners"), a general partner interest in Westlake Partners and incentive distribution rights ("IDRs"). On July ~~1, 2017. Net proceeds~~27, 2018, the Westlake Partners' partnership agreement was amended to ~~WLKP from~~revise the ~~sale of~~minimum quarterly distribution thresholds for Westlake Partners' IDRs. For more information on the ~~units was $110.7 million, net of underwriting discounts, structuring fees and estimated offering expenses of approximately $3.1 million. WLKP used~~amendment, see Note 14 to the ~~proceeds from~~consolidated financial statements.

On July 24, 2018, the ~~offering and the existing~~Company entered into a new $1 billion revolving credit facility ~~with Westlake Chemical Finance Corporation, our subsidiary,~~that is scheduled to ~~fund the purchase~~mature on July 24, 2023. See "Liquidity and Capital Resources—Debt—Credit Agreement" for more information.

On May 15, 2018, we redeemed all of the ~~additional 5.0% interest in OpCo.~~

~~During September 2017, we directed~~outstanding Westlake 4.875% Senior Notes due 2023 ($434 million aggregate principal amount) and all of the ~~Louisiana Local Government Authority Environmental Facilities and Community Development Authority (the “Authority”) to optionally redeem in full $250.0~~outstanding Axiall Corporation 4.875% Senior Notes due 2023 ($16 million aggregate principal amount) (collectively, the "2023 Notes") at a redemption price equal to 102.438% of the principal amount of the ~~2007 Series revenue bonds (the “GO Zone Bonds”) on November 1, 2017 at a redemption price of par,~~2023 Notes plus accrued and unpaid interest ~~if any,~~on the 2023 Notes to the redemption date. The GO Zone Bonds were issued by the Authority in December 2007 under the Gulf Opportunity Zone Act of 2005 (GO Zone Act) for the benefit of the Company and were subject to optional redemption by the Authority at any time on or after November 1, 2017 for 100.0% of the principal plus accrued unpaid interest, if any. In connection with the redemption of the Go Zone Bonds, the Authority is required to cause the GO Zone Bonds trustee to surrender the 6 ¾% tax exempt senior notes due November 2032 of $250.0 million, to the Senior Notes trustee for cancellation. We used cash on hand to fund the redemption of the GO Zone Bonds.

On August 30, 2017, following WLKP's cash distribution for the second quarter of 2017, the requirement under WLKP's partnership agreement for the conversion of all subordinated units was satisfied. As a result, effective August 30, 2017, the 12,686,115 subordinated units owned by us were converted into common units on a one-for-one basis and thereafter participate on terms equal with all other common units in distributions of available cash.

On August 1, 2017, the Company, WLKP and OpCo executed an Investment Management Agreement (the "Investment Management Agreement") that authorized Westlake to invest the Partnership's and OpCo's excess cash.

On August 1, 2017, our wholly owned subsidiary, Westlake Chemical Finance Corporation, entered into an amendment to the revolving credit facility with WLKP, resulting in the extension of the credit facility's maturity date from April 29, 2018 to April 29, 2021.

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Results of Operations


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016			2018			2017			2018			2017

	(dollars in thousands, except per share data)												(dollars in millions, except per share data)
Net external sales
Olefins
Polyethylene	$	377,269		$	380,810		$	1,121,603		$	1,098,500		$	387		$	358		$	756		$	744
Styrene, feedstock and other	124,974			116,555			412,869			324,369			95			131			229			288
Total Olefins	502,243			497,365			1,534,472			1,422,869			482			489			985			1,032
Vinyls
PVC, caustic soda and other	1,252,963			599,276			3,541,409			1,492,650			1,396			1,157			2,754			2,288
Building products	353,683			182,387			954,785			424,757			357			333			646			602
Total Vinyls	1,606,646			781,663			4,496,194			1,917,407			1,753			1,490			3,400			2,890
Total	$	2,108,889		$	1,279,028		$	6,030,666		$	3,340,276		$	2,235		$	1,979		$	4,385		$	3,922

Income (loss) from operations
Olefins	$	165,438		$	118,475		$	488,532		$	408,274		$	158		$	143		$	321		$	323
Vinyls	216,515			22,235			431,276			136,559			271			141			537			211
Corporate and other	(16,206		)	(94,147		)	(51,647		)	(116,056		)	(25		)	(20		)	(53		)	(36		)
Total income from operations	365,747			46,563			868,161			428,777			404			264			805			498
Interest expense	(40,036		)	(24,366		)	(118,784		)	(36,966		)	(31		)	(39		)	(68		)	(79		)
Other income, net	2,058			41,265			6,591			52,091			8			2			30			9
Provision for (benefit from) income taxes	108,619			(6,552		)	232,690			129,332
Provision for income taxes													93			68			182			124
Net income	219,150			70,014			523,278			314,570			288			159			585			304
Net income attributable to noncontrolling interests	8,318			4,352			21,429			14,656			10			6			20			13
Net income attributable to Westlake Chemical Corporation	$	210,832		$	65,662		$	501,849		$	299,914		$	278		$	153		$	565		$	291
Diluted earnings per share	$	1.61		$	0.51		$	3.85		$	2.29		$	2.12		$	1.17		$	4.31		$	2.23
EBITDA ⁽¹⁾	$	521,439		$	182,057		$	1,323,285		$	708,061		$	568		$	411		$	1,147		$	802

_____________


(1)	See "Reconciliation of EBITDA to Net Income and to Net Cash Provided by Operating Activities" below.

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	Three Months Ended September 30, 2017				Nine Months Ended September 30, 2017				Three Months Ended June 30, 2018				Six Months Ended June 30, 2018
	Average Sales Price		Volume		Average Sales Price		Volume		Average Sales Price		Volume		Average Sales Price		Volume
Product sales price and volume percentage change from prior-year period
Olefins	+1.8	%	-0.8	%	+9.2	%	-1.3	%	+3.0	%	-4.4	%	+2.6	%	-7.1	%
Vinyls	+18.7	%	+86.8	%	+17.8	%	+116.7	%	+8.5	%	+9.1	%	+10.4	%	+7.3	%
Company average	+12.1	%	+52.8	%	+14.1	%	+66.4	%
Company									+7.1	%	+5.8	%	+8.3	%	+3.5	%

	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended June 30,				Six Months Ended June 30,
	2017		2016		2017		2016		2018		2017		2018		2017
Average industry prices ⁽¹⁾
Ethane (cents/lb)	8.8		6.3		8.3		6.2		9.7		8.3		9.1		8.1
Propane (cents/lb)	18.2		11.2		16.6		10.7		20.7		14.9		20.5		15.9
Ethylene (cents/lb) ⁽²⁾	24.7		32.5		27.8		26.5		14.8		27.6		19.2		29.4
Polyethylene (cents/lb) ⁽³⁾	70.7		68.7		69.0		65.3		73.7		69.0		73.7		68.2
Styrene (cents/lb) ⁽⁴⁾	85.1		66.8		85.0		63.3		93.0		84.4		95.6		85.0
Caustic soda ($/short ton) ⁽⁵⁾	811.7		660.8		777.8		618.3		795.0		623.3		771.7		595.8
Chlorine ($/short ton) ⁽⁶⁾	332.5		304.2		320.8		295.3		347.5		325.0		340.0		315.0
PVC (cents/lb) ⁽⁷⁾	62.5		56.5		61.7		53.9		67.5		62.5		67.3		61.3

_____________


(1)	Industry pricing data was obtained from IHS ~~Chemical.~~Markit ("IHS"). We have not independently verified the data.


(2)	Represents average North American spot prices of ethylene over the period as reported by ~~IHS Chemical.~~IHS.


(3)	Represents average North American net transaction prices of polyethylene low density GP-Film grade over the period as reported by ~~IHS Chemical.~~IHS.


(4)	Represents average North American contract prices of styrene over the period as reported by ~~IHS Chemical.~~IHS.


(5)	Represents average North American United States Gulf Coast undiscounted contract prices of caustic soda over the period as reported by IHS. During the first quarter of 2018, IHS ~~Chemical.~~discontinued the previous caustic soda index that we used. For comparability, the average 2017 caustic soda is based on the current index.


(6)	Represents average North American contract prices of chlorine (into chemicals) over the period as reported by ~~IHS Chemical.~~IHS.


(7)	Represents average North American contract prices of polyvinyl chloride (PVC) over the period as reported by IHS Chemical. Effective January 1, 2017, IHS Chemical made a non-market downward adjustment of 15 cents per pound to PVC prices. For comparability, we adjusted each prior-year period's PVC price downward by 15 cents per pound consistent with the IHS Chemical non-market adjustment.IHS.

Reconciliation of EBITDA to Net Income and to Net Cash Provided by Operating Activities

The following table presents the reconciliation of EBITDA to net income and to net cash provided by operating activities, the most directly comparable GAAP financial measures, for each of the periods indicated.


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016			2018			2017			2018			2017

	(dollars in thousands)												(dollars in millions)
Net cash provided by operating activities	$	482,950		$	174,268		$	962,664		$	544,160		$	324		$	323		$	549		$	480
Changes in operating assets and liabilities and other	(255,468		)	(101,334		)	(416,092		)	(123,680		)	(7		)	(143		)	81			(161		)
Deferred income taxes	(8,332		)	(2,920		)	(23,294		)	(105,910		)	(29		)	(21		)	(45		)	(15		)
Net income	219,150			70,014			523,278			314,570			288			159			585			304
Add:
Depreciation and amortization	153,634			94,229			448,533			227,193			156			145			312			295
Interest expense	40,036			24,366			118,784			36,966			31			39			68			79
Provision for (benefit from) income taxes	108,619			(6,552		)	232,690			129,332
Provision for income taxes													93			68			182			124
EBITDA	$	521,439		$	182,057		$	1,323,285		$	708,061		$	568		$	411		$	1,147		$	802

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Summary

For the quarter ended ~~September~~June 30, ~~2017,~~2018, net income attributable to Westlake Chemical Corporation was ~~$210.8~~$278 million, or ~~$1.61~~$2.12 per diluted share, on net sales of ~~$2,108.9~~$2,235 million. This represents an increase in net income attributable to Westlake Chemical Corporation of ~~$145.1~~$125 million, or ~~$1.10~~$0.95 per diluted share, compared to the ~~third~~second quarter of ~~2016~~2017 net income attributable to Westlake Chemical Corporation of ~~$65.7~~$153 million, or ~~$0.51~~$1.17 per diluted share, on net sales of ~~$1,279.0~~$1,979 million. Net income for the ~~third~~second quarter of ~~2017~~2018 increased versus the prior-year period primarily due to (1) ~~earnings contributed by Axiall, which was acquired on August 31, 2016; (2) lower transaction and integration-related costs associated with the acquisition; and (3)~~ higher sales prices for our major products, resulting in improved ~~margins. These increases,~~margins; (2) a lower effective income tax rate resulting from the reduced U.S. corporate income tax rate under the U.S. Tax Cuts and Jobs Act (the "Tax Act"); (3) higher sales volumes for caustic soda, PVC resin and polyethylene as ~~compared to the third quarter~~a result of ~~2016, were partially offset by (1) higher~~continuing strong demand in both domestic and export markets; and (4) a lower interest expense due to the ~~increased~~repayment of $688 million of debt ~~balance as a result~~in February 2018 and $450 million of ~~the Axiall acquisition; (2) a third quarter 2016 realized gain of $49.1 million from the previously held common stock of Axiall; and (3) a higher effective tax rate.~~debt in May 2018. These increases were partially offset by lower styrene sales volume. Net sales for the ~~third~~second quarter of ~~2017~~2018 increased by ~~$829.9~~$256 million compared to net sales for the ~~third~~second quarter of ~~2016,~~2017, mainly due to higher sales ~~contributed by Axiall and higher sales~~ prices for ~~our~~ major ~~products.~~products and increases in sales volumes for caustic soda, PVC resin and polyethylene, partially offset by lower styrene sales volume as a result of the planned turnaround completed in May 2018. Income from operations was ~~$365.7~~$404 million for the ~~third~~second quarter of ~~2017~~2018 as compared to ~~$46.6~~$264 million for the ~~third~~second quarter of ~~2016.~~2017. The increase in income from operations ~~for the third quarter of 2017~~ was mainly a result of ~~earnings contributed~~higher sales prices and volumes for our major products, improved operating rates in the Vinyls segment due to fewer planned turnarounds and unplanned outages and lower ethylene costs, partially offset by ~~Axiall,~~ lower ~~transaction and integration-related costs~~styrene sales volume and higher ~~sales prices~~ethane feedstock costs, as compared to the ~~third~~second quarter of ~~2016. Transaction~~2017. The second quarter of 2018 was negatively impacted by $9 million, or $0.05 per diluted share, associated with increased reserves related to pre-acquisition periods at Axiall and ~~integration-related~~our European vinyls business. The second quarter of 2017 was negatively impacted by the unabsorbed fixed manufacturing costs and other costs associated with the turnaround and expansion of OpCo's Calvert City ethylene unit and other planned turnarounds and unplanned outages. Integration-related costs in the ~~third~~second quarter of ~~2017~~2018 were ~~$6.7~~$8 million, or ~~$0.03~~$0.05 per diluted share.

For the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2018, net income attributable to Westlake Chemical Corporation was ~~$501.8~~$565 million, or ~~$3.85~~$4.31 per diluted share, on net sales of ~~$6,030.7~~$4,385 million. This represents an increase in net income attributable to Westlake Chemical Corporation of ~~$201.9~~$274 million, or ~~$1.56~~$2.08 per diluted share, compared to the ~~nine~~six months ended ~~September~~June 30, ~~2016~~2017 net income attributable to Westlake Chemical Corporation of ~~$299.9~~$291 million, or ~~$2.29~~$2.23 per diluted share, on net sales of ~~$3,340.3~~$3,922 million. Net income for the ~~nine~~first six months ~~ended September 30, 2017~~of 2018 increased versus the prior-year period primarily due to (1) ~~earnings contributed by Axiall; (2)~~ higher sales prices for our major products, resulting in improved margins; (2) a lower effective income tax rate resulting from the reduced U.S. corporate income tax rate under the Tax Act; (3) higher sales volumes for caustic soda and ~~(3)~~PVC resin; (4) a lower ~~transaction~~interest expense; and ~~integration-related costs associated with~~(5) higher other income, including a $6 million pre-tax net gain from the ~~integration~~redemption of ~~Axiall.~~the 2021 Notes and income from unconsolidated subsidiaries. These increases ~~versus the prior-year period~~ were partially offset by ~~higher interest expense due to the increased debt balance~~lower polyethylene and ~~the realized gain in the nine months ended September 30, 2016 of $49.1 million from the previously held common stock of Axiall.~~styrene sales volumes. Net sales for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 increased by ~~$2,690.4~~$463 million compared to net sales for the ~~nine~~six months ended ~~September~~June 30, ~~2016,~~2017, mainly due to higher sales ~~contributed by Axiall, which was acquired on August 31, 2016, and higher sales~~ prices for ~~our~~ major ~~products.~~products and increases in sales volumes for caustic soda and PVC resin, partially offset by lower polyethylene and styrene sales volumes. Income from operations was ~~$868.2~~$805 million for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 as compared to ~~$428.8~~$498 million for the ~~nine~~six months ended ~~September~~June 30, ~~2016.~~2017. The increase in income from operations for the six months ended June 30, 2018 was mainly a result of ~~earnings contributed by Axiall,~~ higher sales prices for our major products, higher sales volumes for caustic soda and PVC, lower ~~transaction~~ethylene costs and ~~integration-related costs. Transaction~~improved operating rates in the Vinyls segment due to fewer planned turnarounds and ~~integration-related~~unplanned outages, partially offset by lower polyethylene and styrene sales volumes due to planned turnarounds in our Olefins segment and higher ethane feedstock costs, as compared to the six months ended June 30, 2017. The first six months of 2017 was negatively impacted by the unabsorbed fixed manufacturing costs and other costs associated with the turnaround and expansion of OpCo's Calvert City ethylene unit and other planned turnarounds and unplanned outages. Integration-related costs in the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 were ~~$22.9~~$15 million, or ~~$0.12~~$0.09 per diluted share.

RESULTS OF OPERATIONS

~~Third~~Second Quarter ~~2017~~2018 Compared with ~~Third~~Second Quarter ~~2016~~2017

Net Sales. Net sales increased by ~~$829.9~~$256 million, or ~~64.9%~~12.9%, to ~~$2,108.9~~$2,235 million in the ~~third~~second quarter of 2018 from $1,979 million in the second quarter of 2017, ~~from $1,279.0 million in the third quarter of 2016,~~ primarily attributable to higher sales ~~contributed by Axiall, which was acquired on August 31, 2016,~~prices for our major products and higher sales ~~prices.~~volumes for caustic soda, PVC resin and polyethylene, partially offset by lower sales volume for styrene. Average sales prices for the ~~third~~second quarter of ~~2017~~2018 increased by ~~12.1%~~7.1% as compared to the ~~third~~second quarter of ~~2016.~~2017. Overall sales ~~volumes~~volume increased by ~~52.8%~~5.8% for the second quarter of 2018 as compared to the ~~third~~second quarter of ~~2016, primarily attributable to sales contributed by Axiall, as compared to the prior-year period.~~2017.

Table of Contents

Gross Profit. Gross profit margin percentage increased to ~~23.6%~~24.7% in the ~~third~~second quarter of ~~2017~~2018 from ~~15.8%~~20.4% in the ~~third~~second quarter of ~~2016.~~2017. The ~~third~~second quarter of ~~2017~~2018 gross profit margin was higher primarily due to higher sales prices for major products (resulting in improved margins), higher sales volumes for caustic soda, ~~and~~ PVC resin ~~contributed~~and polyethylene, lower ethylene costs and improved operating rates at our Vinyls segment, partially offset by ~~Axiall~~lower styrene sales volume and ~~an increase in sales prices for our major products~~higher ethane feedstock costs, as compared to the ~~third~~second quarter of ~~2016.~~2017. The ~~increase~~second quarter of 2017 was ~~partially offset~~negatively impacted by ~~higher feedstock~~the unabsorbed fixed manufacturing costs and ~~higher energy prices, as compared to~~other costs associated with the ~~third quarter~~turnaround and expansion of ~~2016.~~OpCo's Calvert City ethylene unit and other planned turnarounds and unplanned outages.

Selling, General and Administrative Expenses. Selling, general and administrative expenses increased by ~~$52.9~~$14 million to ~~$125.6~~$115 million in the ~~third~~second quarter of ~~2017~~2018 as compared to ~~$72.7~~$101 million in the ~~third~~second quarter of ~~2016.~~2017. This increase was mainly due to ~~selling, general~~an increase in employee compensation and ~~administrative expenses~~professional fees.

Amortization of Intangibles. Amortization expense was $25 million in the second quarter of 2018 as compared to $30 million in the second quarter of 2017. Amortization expense for the second quarter of 2017 was higher primarily due to the Axiall ~~which were primarily comprised~~purchase price allocation related adjustment to the customer relationship balance in the second quarter of ~~the amortization of intangible assets acquired on acquisition.~~2017.

~~Table of Contents~~

~~Transaction and~~ Integration-related Costs. The ~~transactions and~~ integration-related costs ~~were $6.7~~of $8 million in the ~~third~~second quarter of ~~2017 as compared~~2018 were comparable to ~~$82.8~~$8 million in the ~~third~~second quarter of ~~2016. Transaction and~~2017. The integration-related costs were lower by $76.1 million in the third quarter of 2017 as compared to the third quarter of 2016 predominantly because significant transaction and integration-related costs were incurred at the time of the Merger in the third quarter of 2016. The transaction and integration costs for the third quarter of 2017 primarily consisted of integration-related consulting fees and severance benefits provided ~~to former Axiall employees~~ in conjunction with the Merger and integration costs and consulting fees related to the Merger. The transaction and integration-related costs for the third quarter of 2016 primarily consisted of severance benefits provided to former Axiall executives in conjunction with the Merger, including the conversion of Axiall restricted stock units into our restricted stock units, transitional service expenses for certain former Axiall employees, retention agreement costs and consulting and professional fees related to the Merger.merger.

Interest Expense. Interest expense ~~increased~~decreased by ~~$15.6~~$8 million to ~~$40.0~~$31 million in the ~~third~~second quarter of ~~2017~~2018 from ~~$24.4~~$39 million in the ~~third~~second quarter of ~~2016~~2017, primarily as a result of ~~higher~~lower average debt outstanding ~~for the period as well as decreased capitalized interest on major capital projects~~ in the ~~third~~second quarter of ~~2017~~2018 as compared to the ~~third~~second quarter of ~~2016.~~2017. The lower average debt balance ~~increased~~ in ~~August 2016~~the second quarter of 2018 was mainly due to ~~finance~~ the ~~Merger.~~redemption of the 2023 Notes in May 2018 and the 2021 Notes in February 2018. See "Liquidity and Capital Resources—Debt" below for further discussion onof our indebtedness.

Other Income (Expense), Net. Other income, net ~~decreased~~increased by ~~$39.2~~$6 million to ~~income of $2.1~~$8 million in the ~~third~~second quarter of ~~2017~~2018 from ~~income of $41.3~~$2 million in the ~~third~~second quarter of ~~2016.~~2017. The ~~decrease~~increase was primarily attributable to ~~the realized gain in the third quarter of 2016 of $49.1 million~~increased interest income and income from ~~the previously held common stock of Axiall.~~unconsolidated subsidiaries.

Income Taxes. The effective income tax rate was ~~33.1%~~24.4% for the ~~third~~second quarter of 2018 as compared to 30.0% for the second quarter of 2017. The lower effective tax rate in the second quarter of 2018 as compared to the second quarter of 2017 was primarily a result of the changes enacted under the Tax Act. The Tax Act was signed into law on December 22, 2017. The Tax Act, among other changes, reduced the U.S. corporate income tax rate from 35.0% to 21.0%, effective January 1, 2018, and also required a one-time deemed repatriation of foreign earnings at specified rates. The effective income tax rate for the ~~third~~second quarter of 2018 was above the U.S. federal statutory rate of 21.0% primarily due to certain discrete adjustments related to foreign and state corporate rate changes and state and foreign taxes. The effective income tax rate for the second quarter of 2017 was below the U.S. federal statutory rate of 35.0% primarily due to certain discrete adjustments, a higher domestic manufacturing deduction, depletion deductions, income attributable to noncontrolling interests, research and development credits and the foreign earnings rate differential, partially offset by state income taxes. The effective tax rate, which was a benefit, was (10.3)% for the three months ended September 30, 2016. The effective income tax rate for the third quarter of 2016 was below the U.S. federal statutory rate of 35.0% primarily due to the benefit of state tax credits, the domestic manufacturing deduction, depletion deductions, income attributable to noncontrolling interests, the non-recognition of tax related to the gain recognized on previously held outstanding shares of common stock of Axiall, the benefit in prior years' and current-year tax credits for increased research and development expenditures, adjustments related to prior years' tax returns as filed and the foreign earnings rate differential, partially offset by state income taxes and nondeductible transaction costs related to the Merger.

Olefins Segment

Net Sales. Net sales for the Olefins segment ~~increased~~decreased by ~~$4.8~~$7 million, or ~~1.0%~~1.4%, to ~~$502.2~~$482 million in the ~~third~~second quarter of ~~2017~~2018 from ~~$497.4~~$489 million in the ~~third~~second quarter of ~~2016, primarily~~2017. The decrease was mainly due to lower styrene sales volume, partially offset by higher polyethylene sales volume and higher sales ~~prices.~~prices for our major products. Average sales volumes for the Olefins segment decreased by ~~0.8%~~4.4% in the ~~third~~second quarter of ~~2017~~2018 as compared to the ~~third~~second quarter of ~~2016.~~2017. Average sales prices for the Olefins segment increased by ~~1.8%~~3.0% in the ~~third~~second quarter of ~~2017~~2018 as compared to the ~~third~~second quarter of ~~2016.~~2017.

Income from Operations. Income from operations for the Olefins segment increased by ~~$46.9~~$15 million to ~~$165.4~~$158 million in the ~~third~~second quarter of ~~2017~~2018 from ~~$118.5~~$143 million in the ~~third~~second quarter of ~~2016.~~2017. This increase was mainly attributable to higher sales prices for our major products and higher ~~overall operating rates. These increases were~~polyethylene sales volume, partially offset by lower styrene sales volume and costs associated with the planned turnaround in May 2018 and higher feedstock ~~and energy costs. Trading activity in the third quarter of 2017 resulted in a gain of $6.8 million~~costs, as compared to ~~a loss of $7.8 million in~~ the ~~third quarter of 2016.~~prior-year period.

Vinyls Segment

Net Sales. Net sales for the Vinyls segment increased by ~~$824.9~~$263 million, or ~~105.5%~~17.7%, to ~~$1,606.6~~$1,753 million in the ~~third~~second quarter of ~~2017~~2018 from ~~$781.7~~$1,490 million in the ~~third~~second quarter of ~~2016.~~2017. This increase was mainly attributable to higher sales ~~contributed by Axiall~~volumes and ~~higher~~ sales prices for our major ~~products. Net sales for the three months ended September 30, 2017 were higher~~products, as compared to ~~the prior-year period primarily because a full three months of Axiall's operations were included as compared to only one month of Axiall's operations included in~~ the prior-year period. Average sales prices for the Vinyls segment increased by ~~18.7%~~8.5% in the ~~third~~second quarter of ~~2017~~2018 as compared to the ~~third~~second quarter of ~~2016.~~2017. Average sales volumes for the Vinyls segment increased by ~~86.8%~~9.1% in the ~~third~~second quarter of ~~2017~~2018 as compared to the ~~third~~second quarter of ~~2016, primarily attributable to sales contributed by Axiall, as compared to the prior-year period.~~2017.

Table of Contents

Income from Operations. Income from operations for the Vinyls segment increased by ~~$194.3~~$130 million to ~~$216.5~~$271 million in the ~~third~~second quarter of ~~2017~~2018 from ~~$22.2~~$141 million in the ~~third~~second quarter of ~~2016.~~2017. This increase was mainly attributable to ~~earnings contributed by Axiall and~~ higher sales prices and volumes for our major ~~products. These increases were partially offset by higher energy prices during the quarter ended September 30, 2017,~~products, lower ethylene costs and improved operating rates due to fewer planned turnarounds and unplanned outages as compared to the ~~prior-year period.~~second quarter of 2017. The second quarter of 2017 was negatively impacted by the unabsorbed fixed manufacturing costs and other costs associated with the turnaround and expansion of OpCo's Calvert City ethylene unit and other planned turnarounds and unplanned outages.

~~Table of Contents~~

~~Nine~~Six Months Ended ~~September~~June 30, ~~2017~~2018 Compared with ~~Nine~~Six Months Ended ~~September~~June 30, ~~2016~~2017

Net Sales. Net sales increased by ~~$2,690.4~~$463 million, or ~~80.5%~~11.8%, to ~~$6,030.7~~$4,385 million for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 from ~~$3,340.3~~$3,922 million for the ~~nine~~six months ended ~~September~~June 30, ~~2016,~~2017, primarily attributable to ~~higher sales contributed by Axiall, which was acquired on August 31, 2016, and~~ higher sales prices for our major products ~~as compared to the nine months ended September 30, 2016.~~and higher sales volumes for caustic soda and PVC resin, partially offset by lower polyethylene and styrene sales volumes. Average sales prices for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 increased by ~~14.1%~~8.3% as compared to the ~~nine~~six months ended ~~September~~June 30, ~~2016.~~2017. Overall sales ~~volumes~~volume increased by ~~66.4%~~3.5% for the six months ended June 30, 2018 as compared to the ~~nine~~six months ended ~~September~~June 30, ~~2016, primarily attributable to sales contributed by Axiall, as compared to the prior-year period.~~2017.

Gross Profit. Gross profit margin percentage increased to ~~21.1%~~24.9% for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 from ~~20.9%~~19.6% for the ~~nine~~six months ended ~~September~~June 30, ~~2016.~~2017. The six months ended June 30, 2018 gross profit margin ~~for the nine months ended September 30, 2017~~ was ~~slightly~~ higher primarily due to higher sales prices for major products (resulting in improved margins), higher sales volumes for caustic soda and PVC resin, ~~contributed~~lower ethylene costs and improved operating rates at our Vinyls segment, partially offset by ~~Axiall~~lower polyethylene and styrene sales volume and higher ~~sales prices for our major products,~~ethane feedstock costs, as compared to the ~~nine~~six months ended ~~September~~June 30, 2016. These increases were substantially offset by a proportionately larger sales volume for the Vinyls segment as compared to the Olefins segment, Vinyls segment industry margins were lower as compared to those of the Olefins segment industry for the nine2017. The six months ended ~~September~~June 30, 2017 gross profit margin was negatively impacted by the unabsorbed fixed manufacturing costs and other costs associated with the ~~nine months ended September 30, 2016.~~turnaround and expansion of OpCo's Calvert City ethylene unit and other planned turnarounds and unplanned outages.

Selling, General and Administrative Expenses. Selling, general and administrative expenses increased by ~~$200.1~~$23 million to ~~$379.9~~$223 million for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 as compared to ~~$179.8~~$200 million infor the ~~nine~~six months ended ~~September~~June 30, ~~2016.~~2017. This increase was mainly due to ~~selling, general~~an increase in employee compensation and ~~administrative expenses of Axiall which were primarily comprised of the amortization of intangible assets acquired on acquisition.~~professional fees.

~~Transaction and~~ Amortization of Intangibles. Amortization expense was $51 million for the six months ended June 30, 2018 as compared to $55 million for the six months ended June 30, 2017. Amortization expense for the six months ended June 30, 2017 was higher due to the Axiall purchase price allocation related adjustment to the customer relationship balance.

Integration-related Costs. ~~Transaction and~~The integration-related costs ~~were $22.9~~of $15 million for the ~~nine~~six months ended ~~September~~June 30, ~~2017 as compared~~2018 were comparable to ~~$90.6~~$16 million for the ~~nine~~six months ended ~~September~~June 30, ~~2016. Transaction and~~2017. The integration-related costs were $67.7 million lower in the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016 predominantly because significant transaction and integration-costs were incurred at the time of the Merger in 2016. The transaction and integration costs for the nine months ended September 30, 2017 primarily consisted of integration-related consulting fees and severance benefits provided ~~to former Axiall employees~~ in conjunction with the Merger and integration costs and consulting fees related to the Merger. The transaction and integration costs for the nine months ended September 30, 2016 primarily consisted of severance benefits provided to former Axiall executives in conjunction with the Merger, including the conversion of Axiall restricted stock units into our restricted stock units, transitional service expenses for certain former Axiall employees, retention agreement costs and consulting and professional fees related to the Merger.merger.

Interest Expense. Interest expense ~~increased~~decreased by ~~$81.8~~$11 million to ~~$118.8~~$68 million for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 from ~~$37.0~~$79 million for the ~~nine~~six months ended ~~September~~June 30, ~~2016~~2017, primarily as a result of ~~higher~~lower average debt outstanding for the ~~period as well as decreased capitalized interest on major capital projects in the nine~~six months ended ~~September~~June 30, ~~2017~~2018 as compared to the ~~nine~~six months ended ~~September~~June 30, ~~2016.~~2017. The lower average debt balance ~~increased~~for the six months ended June 30, 2018 was mainly due to the redemption of the 2023 Notes in ~~August 2016 to finance~~May 2018 and the ~~Merger.~~2021 Notes in February 2018. See "Liquidity and Capital Resources—Debt" below for further discussion onof our indebtedness.

Other Income (Expense), Net. Other income, net ~~decreased~~increased by ~~$45.5~~$21 million to ~~$6.6~~$30 million infor the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 from ~~$52.1~~$9 million infor the ~~nine~~six months ended ~~September~~June 30, ~~2016.~~2017. The ~~decrease~~increase was ~~mainly~~primarily attributable to increased interest income, income from unconsolidated subsidiaries and a net gain of $6 million recognized on the ~~realized gain in~~redemption of the ~~2016 period of $49.1 million from the previously held common stock of Axiall.~~2021 Notes.

Income Taxes. The effective income tax rate was ~~30.8%~~23.7% for the ~~nine~~six months ended ~~September~~June 30, 2018 as compared to 29.0% for the six months ended June 30, 2017. The lower effective tax rate for the six months ended June 30, 2018 was primarily a result of the changes enacted under the Tax Act. The Tax Act was signed into law on December 22, 2017. The Tax Act, among other changes, reduced the U.S. corporate income tax rate from 35.0% to 21.0%, effective January 1, 2018, and also required a one-time deemed repatriation of foreign earnings at specified rates. The effective income tax rate for the ~~nine~~six months ended ~~September~~June 30, 2018 was above the U.S. federal statutory rate of 21.0% primarily due to certain discrete adjustments related to foreign and state corporate rate changes and state and foreign taxes. The effective income tax rate for the six months ended June 30, 2017 was below the U.S. federal statutory rate of 35.0% primarily due to certain discrete adjustments, a higher domestic manufacturing deduction, depletion deductions, income attributable to noncontrolling interests, research and development credits and the foreign earnings rate differential, partially offset by state income taxes. The effective income tax rate was 29.1% for the nine months ended September 30, 2016. The effective income tax rate for the nine months ended September 30, 2016 was below the U.S. federal statutory rate of 35.0% primarily due to the benefit of state tax credits, the domestic manufacturing deduction, depletion deductions, income attributable to noncontrolling interests, the non-recognition of tax related to the gain recognized on previously held outstanding shares of common stock of Axiall, the benefit in prior years' and current-year tax credits for increased research and development expenditures, adjustments related to prior years' tax returns as filed and the foreign earnings rate differential, partially offset by state income taxes and nondeductible transaction costs related to the Merger.

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Olefins Segment

Net Sales. Net sales for the Olefins segment ~~increased~~decreased by ~~$111.6~~$47 million, or ~~7.8%~~4.6%, to ~~$1,534.5~~$985 million infor the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 from ~~$1,422.9~~$1,032 million infor the ~~nine~~six months ended ~~September~~June 30, ~~2016, primarily~~2017. The decrease was mainly due to lower sales volumes for styrene and polyethylene, partially offset by higher sales prices for our major ~~products.~~products, as compared to the prior-year period. Average sales volumes for the Olefins segment decreased by 7.1% for the six months ended June 30, 2018 as compared to the six months ended June 30, 2017. Average sales prices for the Olefins segment increased by ~~9.2% in~~2.6% for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 as compared to the ~~nine~~six months ended ~~September~~June 30, ~~2016. Average sales volumes for the Olefins segment decreased by 1.3% in the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016.~~2017.

Income from Operations. Income from operations of $321 million for the Olefins segment ~~increased by $80.2 million~~in the six months ended June 30, 2018 was comparable to ~~$488.5~~$323 million in the ~~nine~~six months ended ~~September~~June 30, ~~2017 from $408.3 million in~~2017. For the ~~nine~~six months ended ~~September~~June 30, ~~2016. This increase~~2018, the Olefins segment was ~~mainly attributable~~impacted by lower production and sales volumes for styrene and polyethylene due to increased planned turnaround activity and higher ~~olefins integrated product margins, primarily due to~~feedstock costs, partially offset by higher sales prices for our major products, ~~higher operating rates and lower costs associated with turnarounds and outages~~ as compared to the prior-year period. ~~These increases were partially offset by higher energy prices. The nine~~Trading activity for the six months ended ~~September~~June 30, 2016 were negatively impacted by the planned turnaround and expansion of the Lake Charles Petro 1 ethylene unit along with other unplanned outages. Trading activity in the nine months ended September 30, 20172018 resulted in a ~~loss~~gain of ~~$2.8~~$2 million as compared to a ~~gain~~loss of ~~$7.8~~$10 million infor the ~~nine~~six months ended ~~September~~June 30, ~~2016.~~2017.

Vinyls Segment

Net Sales. Net sales for the Vinyls segment increased by ~~$2,578.8~~$510 million, or ~~134.5%~~17.6%, to ~~$4,496.2~~$3,400 million infor the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 from ~~$1,917.4~~$2,890 million infor the ~~nine~~six months ended ~~September~~June 30, ~~2016.~~2017. This increase was mainly attributable to higher sales ~~contributed by Axiall~~prices for major products and higher sales ~~prices and~~ volumes for ~~our major products. The net sales for the nine months ended September 30, 2017 was higher~~caustic soda and PVC resin as compared to ~~the prior-year period primarily because nine months of Axiall's operations were included in the current period as compared to one month of Axiall operations included in~~ the prior-year period. Average sales prices for the Vinyls segment increased by ~~17.8% in~~10.4% for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 as compared to the ~~nine~~six months ended ~~September~~June 30, ~~2016.~~2017. Average sales volumes for the Vinyls segment increased by ~~116.7%~~7.3% in the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 as compared to the ~~nine~~six months ended ~~September~~June 30, ~~2016, primarily attributable to sales contributed by Axiall, as compared to the prior-year period.~~2017.

Income from Operations. Income from operations for the Vinyls segment increased by ~~$294.7~~$326 million to ~~$431.3~~$537 million infor the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 from ~~$136.6~~$211 million infor the ~~nine~~six months ended ~~September~~June 30, ~~2016.~~2017. This increase was mainly attributable to ~~earnings contributed by Axiall and~~ higher sales prices and volumes for our major ~~products. These increases were partially offset~~products, lower ethylene costs and improved operating rates, as compared to the six months ended June 30, 2017. The six months ended June 30, 2017 was negatively impacted by the unabsorbed fixed manufacturing costs and other costs associated with the ~~planned~~ turnaround and expansion ~~at the~~of OpCo's Calvert City ~~facility~~ethylene unit and other planned turnarounds and unplanned ~~turnarounds as well as higher energy prices during the nine months ended September 30, 2017, as compared to the prior-year period.~~outages.

CASH FLOW DISCUSSION FOR THE ~~NINE~~SIX MONTHS ENDED ~~SEPTEMBER~~JUNE 30, ~~2017~~2018 AND ~~2016~~2017

Cash Flows

Operating Activities

Operating activities provided cash of ~~$962.7~~$549 million in the first ~~nine~~six months of ~~2017~~2018 compared to cash provided by operating activities of ~~$544.2~~$480 million in the first ~~nine~~six months of ~~2016.~~2017. The ~~$418.5~~$69 million increase in cash flows from operating activities was mainly due to an increase in income from operations ~~and lower turnaround related expenditures~~ during the ~~nine~~first six months ~~ended September 30, 2017~~of 2018 as compared to the first ~~nine~~six months of ~~2016,~~2017, partially offset by an increase in working capital requirements. The increase in ~~net~~ income from operations was primarily due to higher prices for ~~the first nine months of 2017 was mainly as a result of higher sales prices~~our major products and ~~volumes, resulting in a higher margin, and earnings contributed by Axiall, which was acquired on August 31, 2016.~~stronger demand for Vinyls segment products. Changes in components of working capital, which we define for purposes of this cash flow discussion as accounts receivable, net, inventories, prepaid expenses and other current assets, less accounts payable and accrued liabilities, used cash of ~~$26.2~~$375 million in the first ~~nine~~six months of ~~2017,~~2018, compared to ~~$10.5~~$121 million of cash ~~provided~~used in the first ~~nine~~six months of ~~2016,~~2017, an unfavorable change of ~~$36.7~~$254 million. The change was mainly driven by an unfavorable ~~change~~changes in accounts receivable, ~~partially offset by favorable changes in inventory, prepaid and other current assets~~inventories and accounts ~~payable.~~payable and accrued liabilities. Unfavorable changes were primarily the result of an increase in sales and inventory levels in the first six months of 2018, as compared to the first six months of 2017, and a decline in payables and accrued liabilities since the beginning of 2018.

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Investing Activities

Net cash used for investing activities during the first ~~nine~~six months of ~~2017~~2018 was ~~$459.4~~$354 million as compared to net cash used for investing activities of ~~$2,389.1~~$310 million in the first ~~nine~~six months of ~~2016. In the first nine months of 2016 we used $2,437.8 million, net of cash acquired, for the acquisition of Axiall.~~2017. Capital expenditures were ~~$414.3~~$312 million in the first ~~nine~~six months of ~~2017~~2018 compared to ~~$467.3~~$281 million in the first ~~nine~~six months of ~~2016.~~2017. Capital expenditures in the first ~~nine~~six months of ~~2017~~2018 were primarily incurred on the upgrade and expansion of OpCo's Calvert City ethylene plant at our Calvert City site. Capital expenditures in the first nine months of 2016 were primarily incurred on the upgrade and expansion of OpCo's Petro 1 ethylene unit at our Lake Charles site. The remaining capital expenditures in the first nine months of 2017 and 2016 primarily related to projects to improve production capacity or reduce costs, maintenance and safety projects and environmental projects at our various facilities. ~~In addition, we~~Capital expenditures in the first six months of 2017 were incurred on the upgrade and expansion of OpCo's ethylene unit at our Calvert City site and on projects to improve production capacity or reduce costs, maintenance and safety projects and environmental projects at our various facilities. We spent ~~$47.0~~$35 million and $31 million in the ~~nine~~first six months of 2018 and 2017, respectively, related to our contribution ~~to Lotte Chemical USA Corporation~~ to fund the construction costs of the ethylene ~~plant.~~plant contemplated by our joint venture LACC, LLC ("LACC"). In addition, we invested $10 million in other unconsolidated subsidiaries in the first six months of 2018. Please see "Liquidity and Capital Resources—Liquidity and Financing Arrangements" below for further discussion. Investing activities in the first nine months of 2016 included purchases of securities totaling $138.4 million. We also received aggregate proceeds of $662.9 million from the sales and maturities of our investments in the first nine months of 2016.discussion on LACC.

Financing Activities

Net cash used for financing activities during the first ~~nine~~six months of ~~2017~~2018 was ~~$306.4~~$1,242 million as compared to net cash ~~provided~~used by financing activities of ~~$1,560.5~~$401 million in the first ~~nine~~six months of ~~2016.~~2017. We used ~~$150.0~~$1,173 million ~~and $550.0 million, respectively,~~ for the ~~full~~repayment of notes payable, of which $704 million was used for the redemption of the 2021 Notes in February 2018 and $461 million was used for the redemption of the 2023 Notes in May 2018 and the remaining balance was used for the repayment of short-term notes payable. The remaining activities during the first six months of 2018 were primarily related to the $54 million payment of cash dividends, the $29 million payment of cash distributions to noncontrolling interests and proceeds of $6 million from the issuance of short-term notes payable. The financing activities during the first six months of 2017 were mainly related to the repayment of our term loan of $150 million and the ~~partial~~ repayment of borrowings under the Credit Agreement in the ~~first nine months~~amount of ~~2017.~~$360 million. These uses were partially offset by a drawdown under the Credit Agreement of ~~$225.0~~$175 million ~~in the first nine months~~and $3 million of ~~2017 and net~~ proceeds ~~of $110.7 million~~ from the issuance of ~~WLKP common units as a result of its secondary offering~~short-term notes payable in ~~September 2017. During~~ the first ~~nine~~six months of 2017. The remaining activity during the first six months of 2017 ~~the restriction on $154.0 million of cash~~ was ~~also removed as a result of the repayment of our term loan. The remaining activities during the first nine months of 2017 were~~ primarily related to the ~~$76.5~~$49 million payment of cash dividends, the ~~$20.8~~$16 million payment of cash distributions to noncontrolling interests and the ~~$0.4~~repayment of $5 million ~~payment~~ of ~~debt issuance costs. In addition, we repaid $6.7 million of Huasu's~~ short-term notes payable to banks in connection with the payment of suppliers through letters of credit, partially offset by $5.9 million of proceeds from the issuance of such notes payable. The financing activities during the first nine months of 2016 were mainly related to the net proceeds from the issuance of our senior notes and the proceeds from our term loan of $1,428.5 in the aggregate and the drawdown under the Credit Agreement of $600.0 million, partially offset by the $125.0 million partial repayment of the Credit Agreement in the first nine months of 2016. The remaining activity during the first nine months of 2016 was primarily related to the $71.9 million payment of cash dividends, the $12.3 million payment of cash distributions to noncontrolling interests, the $35.2 million payment of debt issuance costs and the $67.4 million of cash used for repurchases of shares of our common stock. In addition, we repaid $10.6 million of Huasu's short-term notes payable to banks in connection with the payment of suppliers through letters of credit, partially offset by $5.6 million of proceeds from the issuance of such notes payable in the first nine months of 2016.credit.

LIQUIDITY AND CAPITAL RESOURCES

Liquidity and Financing Arrangements

Our principal sources of liquidity are from cash and cash equivalents, cash from operations, short-term borrowings under the Credit Agreement and our long-term financing.

In November 2014, our Board of Directors authorized a ~~$250.0~~$250 million share repurchase program (the "2014 Program"). In November 2015, our Board of Directors approved the expansion of the 2014 Program by an additional ~~$150.0~~$150 million. As of ~~September~~June 30, ~~2017,~~2018, we had repurchased 4,193,598 shares of our common stock for an aggregate purchase price of approximately ~~$228.7~~$229 million under the 2014 Program. During the six months ended June 30, 2018, no shares of our common stock were repurchased under the 2014 Program. Purchases under the 2014 Program may be made either through the open market or in privately negotiated transactions. Decisions regarding the amount and the timing of purchases under the 2014 Program will be influenced by our cash on hand, our cash flow from operations, general market conditions and other factors. The 2014 Program may be discontinued by our Board of Directors at any time.

In connection with the ~~Merger,~~Axiall merger, we became a party to athe LACC joint ~~venture investment with Lotte Chemical USA Corporation to build an ethylene facility, LACC, LLC ("LACC").~~venture. The ethylene facility is located adjacent to our vinyls facility in Lake Charles. Pursuant to the contribution and subscription agreement, we agreed to make a maximum capital commitment to LACC of up to ~~$225.0~~$225 million to fund the construction costs of the ethylene plant, which represents approximately 10.0% of the interests in LACC. The construction of the ethylene plant commenced in January 2016, with an anticipated start-up in 2019. As of ~~September~~June 30, ~~2017,~~2018, we had funded approximately ~~$106.4~~$160 million of our portion of the construction costs of the ethylene plant.

On February 15 and May 15, 2018, we redeemed all of the 2021 Notes ($688 million aggregate principal amount) and all of the 2023 Notes ($450 million aggregate principal amount), respectively.

On July 24, 2018, the Company entered into a new $1 billion revolving credit facility that is scheduled to mature on July 24, 2023 (the "New Credit Agreement"). See "Liquidity and Capital Resources—Debt—Credit Agreement" for more information.

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We believe that our sources of liquidity as described above ~~will be~~are adequate to fund our normal operations and ongoing capital expenditures. Funding of any potential large expansions or any potential acquisitions would likely necessitate and therefore depend on our ability to obtain additional financing in the future. We may not be able to access additional liquidity at cost effective interest rates due to the volatility of the commercial credit markets.

Cash and Cash Equivalents

As of ~~September~~June 30, ~~2017~~2018, our cash and cash equivalents totaled ~~$678.2~~$482 million. In addition, we have the Credit Agreement available to supplement cash if needed, as described under "Debt" below.

Debt

As of ~~September~~June 30, ~~2017~~,2018, our indebtedness, including the current ~~maturities,~~portion, totaled ~~$3.3 billion, consisting of $100.0 million of~~$2.7 billion. See Note 6 ½% senior notes due 2029, $250.0 million of 6 ¾% senior notes due 2032, $89.0 million of 6 ½% senior notes due 2035 (the "6 ½% 2035 GO Zone Senior Notes"), $65.0 million of 6 ½% senior notes due 2035 (the "6 ½% 2035 IKE Zone Senior Notes") (collectively, the "Senior Notes"), $624.8 million aggregate principal amount of 4.625% senior notes due 2021 (the "4.625% 2021 Senior Notes"), $63.2 million aggregate principal amount of the 4.625% senior notes due 2021 (the "4.625% Subsidiary 2021 Senior Notes"), $250.0 million principal amount of 3.60% senior notes due 2022 (the "3.6% senior notes due 2022"), $433.8 million aggregate principal amount of 4.875% senior notes due 2023 (the "4.875% 2023 Senior Notes"), $16.2 million aggregate principal amount of the 4.875% senior notes due 2023 (the "4.875% Subsidiary 2023 Senior Notes"), $750.0 million aggregate principal amount of 3.60% senior notes due 2026 (the "3.60% 2026 Senior Notes"), $700.0 million aggregate principal amount of 5.0% senior notes due 2046 (the "5.0% 2046 Senior Notes") 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), plus unamortized premium net of unamortized discount and debt issuance costs of $3.5 million. The 6 ½% senior notes due 2029, the 6 ¾% senior notes due 2032, the 6 ½% 2035 GO Zone Senior Notes and the 6 ½% 2035 IKE Zone Senior Notes evidence and secure our obligations to the ~~Louisiana Local Government Environmental Facility and Development Authority (the "Authority"),~~consolidated financial statements appearing elsewhere in this Form 10-Q for a ~~political subdivision~~discussion of our long-term indebtedness. Defined terms used in this section have the ~~State of Louisiana, under four loan agreements relating~~definitions assigned to such terms in Note 6 to the ~~issuance of $100.0 million, $250.0 million, $89.0 million and $65.0 million aggregate principal amount of the Authority's tax-exempt revenue bonds, respectively. As of~~ ~~September 30, 2017, debt outstanding under the tax-exempt waste disposal revenue bonds bore interest at a variable rate. As of~~ ~~September 30, 2017~~, we were in compliance with all of the covenants with respect to the Senior Notes, the 4,625% 2021 Senior Notes, the 4.625% Subsidiary 2021 Senior Notes, the 3.60% senior notes due 2022, the 4.875% 2023 Senior Notes, the 4.875% Subsidiary 2023 Senior Notes, the 3.60% 2026 Senior Notes, the 5.0% 2046 Senior Notes, the Credit Agreement and our waste disposal revenue bonds.consolidated financial statements.

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 and unless we were to undertake a new expansion or large acquisition, we believe our cash ~~flow~~flows from operations, available cash and available borrowings under the Credit Agreement will be adequate to meet our normal operating needs for the foreseeable future.

~~Term Loan~~

On August 10, 2016, our indirect subsidiary, Westlake International Holdings II C.V., a limited partnership organized under the laws of the Netherlands (the "CV Borrower"), entered into a credit agreement with Bank of America, N.A., as agent and lender, providing the CV Borrower with a $150.0 million term loan facility. The term loan facility had a maturity date of March 31, 2017. The term loan was fully repaid in January 2017. The loans thereunder bore interest at a floating interest rate equal to LIBOR plus 2.0% per annum, payable in arrears on the last day of each three-month period following the date of funding and at maturity.

~~Table of Contents~~

Credit Agreement

On August 23, 2016, we and certain of our subsidiaries entered into an unsecured revolving credit facility (the "Credit Agreement"), by and among us, the other borrowers and guarantors referred to therein, the lenders from time to time party thereto (collectively, the "Lenders"), the issuing banks party thereto and JPMorgan Chase Bank, National Association, as Administrative Agent. Under the Credit Agreement, the Lenders ~~have~~ committed to provide an unsecured five-year revolving credit facility in an aggregate principal amount of up to ~~$1.0~~$1 billion. The Credit Agreement ~~replaced~~included a $150 million sub-limit for letters of credit, with any outstanding letters of credit to be deducted from availability under the facility. The Credit Agreement also provided for a discretionary $50 million commitment for swing-line loans to be provided on a same-day basis.

At June 30, 2018, we had under the Credit Agreement (i) no borrowings outstanding, (ii) outstanding letters of credit totaling $4 million and (iii) borrowing availability of $996 million. Borrowings under the Credit Agreement bore interest, at our ~~$400.0 million senior secured third amended~~option, at either (a) LIBOR plus a spread ranging from 1.00% to 1.75% depending on our credit rating or (b) Alternate Base Rate plus a spread ranging from 0.00% to 0.75% depending on our credit rating. The Credit Agreement also required an undrawn commitment fee ranging from 0.10% to 0.25% depending on our credit rating.

Our obligations under the Credit Agreement were guaranteed by our current and ~~restated~~future material domestic subsidiaries, subject to certain exceptions. The Credit Agreement contained certain affirmative and negative covenants, including a quarterly total leverage ratio financial maintenance covenant. The Credit Agreement also contained certain events of default and if and for so long as an event of default had occurred and was continuing, any amounts outstanding under the Credit Agreement would accrue interest at an increased rate, the Lenders could terminate their commitments thereunder and payments of any outstanding amounts could be accelerated by the Lenders. As of June 30, 2018, we were in compliance with the total leverage ratio financial maintenance covenant.

On July 24, 2018, the Company entered into the New Credit Agreement and, in connection therewith, terminated the existing Credit Agreement. The New Credit Agreement bears interest at either (a) LIBOR plus a spread ranging from 1.00% to 1.75% or (b) Alternate Base Rate plus a spread ranging from 0.00% to 0.75% in each case depending on the credit ~~facility, dated~~rating of the Company. The New Credit Agreement contains certain affirmative and negative covenants, including a quarterly total leverage ratio financial maintenance covenant. The New Credit Agreement also contains certain events of default and if and for so long as certain events of ~~July 17, 2014 (the "Prior ABL~~default have occurred and are continuing, any overdue amounts outstanding under the Credit ~~Agreement"),~~Agreement will accrue interest at an increased rate, the lenders can terminate their commitments thereunder and payments of any outstanding amounts could be accelerated by ~~and among us,~~ the ~~financial institutions party thereto, as lenders, Bank~~lenders. None of ~~America, N.A., as agent, and us and certain~~the Company's subsidiaries are required to guarantee the obligations of ~~our subsidiaries, as borrowers.~~ the Company under the New Credit Agreement.

The New Credit Agreement includes a ~~$150.0~~$150 million sub-limit for letters of credit, and any outstanding letters of credit will be deducted from availability under the facility. The New Credit Agreement also provides for a discretionary ~~$50.0~~$50 million commitment for ~~swing-line~~swingline loans to be provided on a same-day basis. WeThe Company may also increase the size of the facility, in increments of at least ~~$25.0~~$25 million, up to a maximum of ~~$500.0~~$500 million, subject to certain conditions and if certain ~~Lenders~~lenders agree to commit to such an increase. ~~On October 14, 2016, certain domestic subsidiaries~~

Table of ~~Axiall and Lagoon LLC were added as subsidiary guarantors to~~Contents

In connection with the ~~Credit Agreement.~~

~~At September 30, 2017, we had no borrowings outstanding under~~Company's entry into the ~~Credit Agreement. Borrowings under the~~New Credit Agreement will bear interest, at our option, at either (a) LIBOR plus a spread ranging from 1.0% to 1.75% that will vary depending on our credit rating or (b) Alternate Base Rate plus a spread ranging from 0.0% to 0.75% that will vary depending on our credit rating. Theand termination of the existing Credit Agreement ~~also requires an undrawn commitment fee ranging from 0.10% to 0.25% that will vary depending~~ on ~~our credit rating. The Credit Agreement matures on August 23, 2021. As~~July 24, 2018, all guarantees by the Guarantor Subsidiaries of ~~September 30, 2017, we had outstanding letters of credit totaling $45.4 million and borrowing availability of $954.6 million under~~ the ~~Credit Agreement.~~

~~Our~~Company's payment obligations under the ~~Credit Agreement are guaranteed by our current~~4.375% 2047 Senior Notes, the 3.60% 2022 Senior Notes, the 3.60% 2026 Senior Notes and future material domestic subsidiaries, subject to customary exceptions. The Credit Agreement contains customary affirmative and negative covenants, including a quarterly total leverage ratio financial maintenance covenant. The Credit Agreement also contains customary events of default and if and for so long as an event of default has occurred and is continuing, any amounts outstanding under the Credit Agreement will accrue interest at an increased rate, the Lenders can terminate their commitments thereunder and payments of any outstanding amounts could be accelerated by the Lenders. As of September 30, 2017, we5.0% 2046 Senior Notes were ~~in compliance with the total leverage ratio financial maintenance covenant.~~released.

GO Zone Bonds and IKE Zone Bonds

AsIn November 2017, the Louisiana Local Government Environmental Facility and Development Authority (the "Authority") completed the offering of ~~September 30, 2017, we had drawn all~~$250 million aggregate principal amount of 3.50% tax-exempt revenue refunding bonds due November 1, 2032 (the "Refunding Bonds"), the net proceeds ~~from~~of which were used to redeem $250 million aggregate principal amount of the Authority's 6 ¾% tax-exempt revenue bonds due November 1, 2032 issued by the Authority under the Gulf Opportunity Zone Act of 2005 (the "GO Zone Act") in December 2007. In connection with the issuance of the ~~6 ½% senior notes due 2029, 6 ¾% senior notes due~~Refunding Bonds, we issued $250 million of the 3.5% 2032 ~~6 ½% 2035~~ GO Zone ~~Senior Notes and 6 ½% 2035 IKE Zone~~Refunding Senior Notes. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Debt" in the 2016 Form 10-K and below for more information on the 6 ½% senior notes due 2029, the 6 ¾% senior notes due 2032, the 6 ½% 2035 GO Zone Senior Notes and the 6 ½% 2035 IKE Zone Senior Notes. All domestic restricted subsidiaries that guarantee other debt of ours or of another guarantor of the Senior Notes in excess of $5.0 millionThe Refunding Bonds are ~~guarantors of these notes.~~

~~The $250.0 million of 6 ¾% senior notes due November 1, 2032 under the GO Zone Act was issued by the Authority in December 2007. The bonds were~~ subject to optional redemption by the Authority upon the direction of the Company at any time on or after November 1, ~~2017~~2027, for ~~100.0%~~100% of the principal plus accrued interest. ~~During September 2017, we directed~~

In July 2010, the Authority ~~to optionally redeem in full $250.0~~completed the reoffering of $100 million of the 6 ~~¾% senior notes on November 1, 2017 at a redemption price~~½% 2029 GO Zone Bonds. In connection with the reoffering of ~~par, plus accrued and unpaid interest, if any, to~~ the ~~redemption date. The Authority is required to cause the~~6 ½% 2029 GO Zone Bonds, ~~trustee to surrender~~we issued $100 million of the 6 ~~¾% senior notes due November 2032 of $250.0~~½% 2029 GO Zone Senior Notes. In December 2010, the Authority issued $89 million ~~to the Senior Notes trustee for cancellation. We used cash on hand to fund the redemption~~ of the 6 ½% 2035 GO Zone Bonds.

~~Table~~ In connection with the issuance of ~~Contents~~

the 6 ½% 2035 GO Zone Bonds, we issued $89 million of the 6 ½% 2035 GO Senior Notes. In December 2010, the Authority completed the offering of $65 million of the 6 ½% 2035 IKE Zone Bonds under Section 704 of the Emergency Economic Stabilization Act of 2008 (the "IKE Zone Act"). In connection with the issuance of the 6 ½% 2035 IKE Zone Bonds, we issued $65 million of the 6 ½% 2035 IKE Zone Senior Notes.

The ~~indentures governing~~6 ½% 2029 GO Zone Bonds are subject to optional redemption by the ~~Senior Notes contain customary covenants~~Authority upon the direction of the Company at any time prior to August 1, 2020 for 100% of the principal plus accrued interest and ~~events~~a discounted "make whole" payment. On or after August 1, 2020, the 6 ½% 2029 GO Zone Bonds are subject to optional redemption by the Authority upon the direction of ~~default. Accordingly, these agreements generally impose significant operating~~the Company for 100% of the principal plus accrued interest. The 6 ½% 2035 GO Zone Bonds 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. However, the effectiveness of certain of these restrictions is currently suspended because the~~6 ½% 2035 IKE Zone Senior Notes are ~~currently rated investment grade~~subject to optional redemption by the Authority upon the direction of the Company at ~~least two nationally recognized credit rating agencies. The most significant~~any time prior to November 1, 2020 for 100% of these provisions, if it were currently effective, would restrict us from incurring additional debt, except specified permitted debt (including borrowings under our credit facility), when our fixed charge coverage ratio is below 2.0:1. These limitationsthe principal plus accrued interest and a discounted "make whole" payment. On or after November 1, 2020, the 6 ½% 2035 GO Zone Bonds and the 6 ½% 2035 IKE Zone Senior Notes are subject to ~~a number of important qualifications and exceptions, including, without limitation, an exception for~~optional redemption by the ~~payment of our regular quarterly dividend of up to $0.10 per share. If~~Authority upon the restrictions were currently effective, distributions in excess of $100.0 million would not be allowed unless, after giving pro forma effect to the distribution, our fixed charge coverage ratio is at least 2.0:1 and such payment, together with the aggregate amount of all other distributions after January 13, 2006, is less than the sum of 50.0% of our consolidated net income for the period from October 1, 2003 to the enddirection of the ~~most recent quarter~~Company for which consolidated financial statements have been filed, plus 100.0% 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.

~~3.60% Senior Notes due 2022~~

~~The 3.60% senior notes due 2022 are unsecured and were issued with an original issue discount of $1.2 million. There is no sinking fund and no scheduled amortization~~100% of the ~~3.60% senior notes due 2022 prior to maturity. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Debt" in the~~ ~~2016~~ Form 10-K for more information on the 3.60% senior notes due 2022. All of our domestic subsidiaries that guarantee other indebtedness of ours or of another guarantor of the 3.60% senior notes due 2022 in excess of $5.0 million are guarantors of the 3.60% senior notes due 2022.

The indenture governing the 3.60% senior notes due 2022 contains customary events of default and covenants that will restrict our and certain of our subsidiaries' ability to (1) incur certain secured indebtedness, (2) engage in certain sale-leaseback transactions and (3) consolidate, merge or transfer all or substantially all of our or their assets.principal plus accrued interest.

3.60% Senior Notes due 2026 and 5.0% Senior Notes due 2046

In August 2016, we ~~issued $750.0~~completed the private offering of $750 million aggregate principal amount of ~~the~~our 3.60% 2026 Senior Notes and ~~$700.0~~$700 million aggregate principal amount of ~~the~~our 5.0% 2046 Senior Notes. In connection with the private offering and issuance of the 3.60% 2026 Senior Notes and the 5.0% 2046 Senior Notes, we entered into a registration rights agreement pursuant to which, among other things, we agreed to file with the SEC a registration statement relating to an offer to exchange the 3.60% 2026 Senior Notes and the 5.0% 2046 Senior Notes for the 2026 and 2046 Exchange Notes containing terms substantially identical to the 3.60% 2026 Senior Notes and the 5.0% 2046 Senior Notes (except that the transfer restrictions on the 2026 and 2046 Exchange Notes will be modified or eliminated and there will be no registration rights). On March 27, 2017, we commenced registered exchange offers to exchange the 3.60% 2026 Senior Notes and the 5.0% 2046 Senior Notes for new notes that are identical in all material respects to the 3.60% 2026 Senior Notes and the 5.0% 2046 Senior Notes, except that the offer and issuance of the new notes have been registered under the Securities Act. The exchange offers expired on April 24, 2017, and approximately 99.97% of the 3.60% 2026 Senior Notes and 100.00% of the 5.0% 2046 Senior Notes were exchanged. The 3.60% 2026 Senior Notes that were not exchanged pursuant to the exchange offers have not been registered under the Securities Act or any state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements or a transaction not subject to the registration requirements of the Securities Act or any state securities law.

All of our domestic subsidiaries that guarantee other indebtedness of ours or of another guarantor of the 3.60% 2026 Senior Notes or ~~the~~ 5.0% 2046 Senior Notes in excess of ~~$40.0~~$40 million ~~are~~were required to be guarantors of the 3.60% 2026 Senior Notes and the 5.0% 2046 Senior Notes. The ~~indenture governing the~~ 3.60% 2026 Senior Notes and the 5.0% 2046 Senior Notes ~~contains customary events~~and guarantees are unsecured and rank equally with our existing and future senior unsecured obligations and each guarantor's existing and future senior unsecured obligations.

3.60% Senior Notes due 2022

In July 2012, we issued $250 million aggregate principal amount of ~~default~~the 3.60% 2022 Senior Notes. We may optionally redeem the 3.60% 2022 Senior Notes at any time and ~~covenants that will restrict our and certain of our subsidiaries' ability~~from time to ~~(1) incur certain secured indebtedness, (2) engage in certain sale-leaseback transactions and (3) consolidate, merge or transfer all or substantially all of our or their assets. References~~time prior to April 15, 2022 (three months prior to the maturity date) for 100% of the principal plus accrued interest and a discounted "make whole" payment. On or after April 15, 2022, we may optionally redeem the 3.60% ~~2026~~2022 Senior Notes ~~and~~for 100% of the ~~5.0% 2046~~principal plus accrued interest. The holders of the 3.60% 2022 Senior Notes ~~in this paragraph refer~~may require us to repurchase the 3.60% 2022 Senior Notes at a price of 101% of their principal amount, plus accrued and unpaid interest to the ~~3.60% 2026 Senior Notes~~date of repurchase, upon the occurrence of both a "change of control" and, ~~the 5.0% 2046 Senior Notes that were exchanged~~within 60 days of such change of control, a "below investment grade rating event" (as such terms are defined in the ~~exchange offers described in the preceding paragraph as well as~~indenture governing the 3.60% ~~2026~~2022 Senior ~~Notes that were not exchanged in such exchange offers.~~Notes).

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~~4.625%~~4.375% Senior Notes due ~~2021 and 4.875% Senior Notes due 2023~~2047

In ~~September 2016,~~November 2017, we ~~issued $624.8~~completed the registered public offering of $500 million aggregate principal amount of ~~the 4.625% 2021~~4.375% Senior Notes due November 15, 2047. We may optionally redeem the 4.375% 2047 Senior Notes at any time and ~~$433.8 million aggregate principal amount~~from time to time prior to May 15, 2047 (six months prior to the maturity date) for 100% of the ~~4.875% 2023 Senior Notes upon~~principal plus accrued interest and a discounted "make whole" payment. On or after May 15, 2047, we may optionally redeem the closing of our offers to exchange any and all of the $688.0 million aggregate principal amount of the outstanding 4.625% senior notes due 2021 issued by Eagle Spinco Inc., a wholly owned subsidiary of Axiall, and the $450.0 million aggregate principal amount of the outstanding 4.875% senior notes due 2023 issued by Axiall. In connection with the private offering and issuance of the 4.625% 2021 Senior Notes and the 4.875% Senior Notes, we entered into a registration rights agreement pursuant to which, among other things, we agreed to file with the SEC a registration statement relating to an offer to exchange the 4.625% 2021 Senior Notes and the 4.875% 20234.375% 2047 Senior Notes for ~~new SEC registered notes (the "2021 and 2023 Exchange Notes") containing terms substantially identical to~~100% of the ~~4.625% 2021~~principal amount plus accrued interest. The holders of the 4.375% 2047 Senior Notes ~~and~~may require us to repurchase the ~~4.875% 2023~~4.375% 2047 Senior Notes ~~except that~~at a price of 101% of their principal amount, plus accrued and unpaid interest to, but not including, the ~~transfer restrictions on~~date of repurchase, upon the ~~2021~~occurrence of both a "change of control" and, ~~2023 Exchange Notes will be modified or eliminated and there will be no registration rights). On March 27, 2017, we commenced registered exchange offers to exchange~~within 60 days of such change of control, a "below investment grade rating event" (as such terms are defined in the 4.625% 2021 Senior Notes and the 4.875% 2023 Senior Notes for new notes that are identical in all material respects to the 4.625% 2021 Senior Notes and the 4.875% 2023 Senior Notes, except that the offer and issuance of the new notes have been registered under the Securities Act. The exchange offers expired on April 24, 2017, and 100.0% of the 4.625% 2021 Senior Notes and 100.0% of the 4.875% 2023 Senior Notes were exchanged.

All of our domestic subsidiaries that guarantee other indebtedness of ours or of another guarantor of the 4.625% 2021 Senior Notes or the 4.875% 2023 Senior Notes in excess of $40.0 million are guarantors of the 4.625% 2021 Senior Notes and the 4.875% 2023 Senior Notes. The indenture governing the ~~4.625% 2021~~4.375% 2047 Senior Notes and the 4.875% 2023 Senior Notes contains customary events of default and covenants that will restrict our and certain of our subsidiaries' ability to (1) incur certain secured indebtedness, (2) engage in certain sale-leaseback transactions and (3) consolidate, merge or transfer all or substantially all of our or their assets. References to the 4.625% 2021 Senior Notes and the 4.875% 2023 Senior Notes in this paragraph refer to the 4.625% 2021 Senior Notes and the 4.875% 2023 Senior Notes that were exchanged in the exchange offers described in the preceding paragraph.Notes).

Revenue Bonds

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~~$11 million principal amount of tax-exempt waste disposal revenue bonds in order to finance our construction of waste disposal facilities for an ethylene plant. The waste disposal 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 waste disposal revenue bonds accrues at a rate determined by a remarketing agent and is payable quarterly. The interest rate on the waste disposal revenue bonds at June 30, 2018 was 1.60% and at December 31, 2017 was 1.73%.

The indenture governing the 3.60% 2026 Senior Notes, the 5.0% 2046 Senior Notes, the 4.875% Westlake 2023 Senior Notes, the 3.60% 2022 Senior Notes and the 4.375% 2047 Senior Notes contains customary events of default and covenants that will restrict us and certain of our subsidiaries' ability to (1) incur certain secured indebtedness, (2) engage in certain sale-leaseback transactions and (3) consolidate, merge or transfer all or substantially all of its assets.

As of June 30, 2018, we were in compliance with all of the covenants with respect to the 3.60% 2022 Senior Notes, the 3.60% 2026 Senior Notes, the 5.0% 2046 Senior Notes, the 4.375% 2047 Senior Notes, the 6 ½% 2029 GO Zone Senior Notes, the 3.50% 2032 Go Zone Refunding Senior Notes, the 6 ½% 2035 GO Zone Senior Notes, the 6 ½% 2035 IKE Zone Senior Notes, the Credit Agreement and the waste disposal revenue bonds.

Westlake Chemical Partners LP Credit Arrangements

Our subsidiary, Westlake Chemical Finance Corporation, is the lender party to a ~~$300.0~~$600 million revolving credit facility with Westlake ~~Chemical~~ Partners, ~~LP ("WLKP"). On August 1, 2017, the~~originally entered into on April 29, 2015. The revolving credit facility ~~was amended~~is scheduled to ~~extend the maturity from 2018 to~~mature on April 29, 2021. Borrowings under the revolver bear interest at LIBOR plus a spread ranging from 2.0% to 3.0% (depending on ~~WLKP's~~Westlake Partners'' consolidated leverage ratio), payable quarterly. ~~WLKP~~Westlake Partners may pay all or a portion of the interest on any borrowings in kind, in which case any such amounts would be added to the principal amount of the loan. As of ~~September~~June 30, ~~2017,~~2018, outstanding borrowings under the credit facility totaled ~~$253.5~~$254 million and bore interest at the LIBOR rate plus 2.0%.

Our subsidiary, Westlake Development Corporation, is the lender party to a ~~$600.0~~$600 million revolving credit facility with OpCo. The revolving credit facility matures in August 2019. As of ~~September~~June 30, ~~2017,~~2018, outstanding borrowings under the credit facility totaled ~~$223.6~~$224 million and bore interest at the LIBOR rate plus 3.0%, which is accrued in arrears quarterly.

We consolidate ~~WLKP~~Westlake Partners and OpCo for financial reporting purposes as we have a controlling financial interest. As such, the revolving credit facilities described above between our subsidiaries and ~~WLKP~~Westlake Partners and OpCo are eliminated upon consolidation.

Off-Balance Sheet Arrangements

None.

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FORWARD-LOOKING STATEMENTS

The Private Securities Litigation Reform Act of 1995 provides safe harbor provisions for forward-looking information. Certain of the statements contained in this report are forward-looking statements. All statements, other than statements of historical facts, included in this report that address activities, events or developments that we expect, project, believe or anticipate will or may occur in the future are forward-looking statements. Forward-looking statements can be identified by the use of words such as "believes," "intends," "may," "should," "could," "anticipates," "expected" or comparable terminology, or by discussions of strategies or trends. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we cannot give any assurances that these expectations will prove to be correct. Forward-looking statements relate to matters such as:

future operating rates, margins, cash flows and demand for our ~~products (including any changes as a result of economic growth or North American producers' competitive position);~~products;

industry market outlook, including the price of crude oil;

production capacities;

currency devaluation;

our ability to borrow additional funds under the Credit Agreement;

our ability to meet our liquidity needs;

our ability to meet debt obligations under our debt instruments;

our intended quarterly dividends;

future capacity additions and expansions in the industry;

timing, funding and results of capital projects, such as the construction of the LACC plant and associated facilities;

~~results of acquisitions, including our acquisition of Axiall (including the benefits, results and effects thereof);~~

pension plan obligations, funding requirements and investment policies;

compliance with present and future environmental regulations and costs associated with environmentally related penalties, capital expenditures, remedial actions and proceedings, including any new laws, regulations or treaties that may come into force to limit or control carbon dioxide and other greenhouse gases emissions or to address other issues of climate change;

effects of pending legal proceedings; and

timing of and amount of capital expenditures.

We have based these statements on assumptions and analyses in light of our experience and perception of historical trends, current conditions, expected future developments and other factors we believe were appropriate in the circumstances when the statements were made. Forward-looking statements by their nature involve substantial risks and uncertainties that could significantly impact expected results, and actual future results could differ materially from those described in such statements. While it is not possible to identify all factors, we continue to face many risks and uncertainties. Among the factors that could cause actual future results to differ materially are the risks and uncertainties discussed under "Risk Factors" in the ~~2016~~2017 Form 10-K and those described from time to time in our other filings with the SEC including, but not limited to, the following:

general economic and business conditions;

the cyclical nature of the chemical industry;

the availability, cost and volatility of raw materials and energy;

uncertainties associated with the United States, European and worldwide economies, including those due to political tensions and unrest in the Middle East, the Commonwealth of Independent States (including Ukraine) and elsewhere;

current and potential governmental regulatory actions in the United States and other countries and political unrest in other ~~areas;~~areas, including environmental regulations;

industry production capacity and operating rates;

the supply/demand balance for our products;

competitive products and pricing pressures;

~~Table of Contents~~

instability in the credit and financial markets;

access to capital markets;

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terrorist acts;

operating interruptions (including leaks, explosions, fires, weather-related incidents, mechanical failure, unscheduled downtime, labor difficulties, transportation interruptions, spills and releases and other environmental risks);

changes in laws or ~~regulations;~~regulations, including trade policies;

technological developments;

~~our ability to realize anticipated benefits of the Merger and to integrate Axiall's business;~~

~~charges or other liabilities relating to the Merger;~~

~~the significant indebtedness that we have incurred in connection with the Merger;~~

~~our ability to integrate acquired businesses other than Axiall;~~

foreign currency exchange risks;

our ability to implement our business strategies; and

creditworthiness of our customers.

Many of such factors are beyond our ability to control or predict. Any of the factors, or a combination of these factors, could materially affect our future results of operations and the ultimate accuracy of the forward-looking statements. These forward-looking statements are not guarantees of our future performance, and our actual results and future developments may differ materially from those projected in the forward-looking statements. Management cautions against putting undue reliance on forward-looking statements or projecting any future results based on such statements or present or prior earnings levels. Every forward-looking statement speaks only as of the date of the particular statement, and we undertake no obligation to publicly update or revise any forward-looking statements.


Item 3.	Quantitative and Qualitative Disclosures about Market Risk

Commodity Price Risk

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 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. Based on our open derivative positions at ~~September~~June 30, ~~2017,~~2018, a hypothetical $0.10 increase in the price of a gallon of ethane would have increased our income before taxes by ~~$6.9 million and a hypothetical $0.10 increase in the price of a gallon of propane would have increased our income before taxes by $3.8~~$1 million. ~~Additional information concerning derivative commodity instruments appears in Notes 13 and 14 to the unaudited consolidated financial statements within this Quarterly Report on Form 10-Q.~~

Interest Rate Risk

We are exposed to interest rate risk with respect to fixed and variable rate debt. At ~~September~~June 30, ~~2017~~2018, we had ~~$10.9~~$11 million principal amount of variable rate debt outstanding. The debt outstanding under the tax-exempt waste disposal revenue bonds is at a variable rate. 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 ~~$10.9~~$11 million as of ~~September~~June 30, ~~2017~~2018 was ~~1.0%~~1.6%. A hypothetical 100 basis point increase in the average interest rate on our variable rate debt would ~~increase our annual~~not result in a material change in the interest ~~expense by approximately $0.1 million.~~expense. Also, at ~~September~~June 30, ~~2017~~2018, we had ~~$3.3 billion~~$2,704 million aggregate principal amount of fixed rate debt. We are subject to the risk of higher interest cost if and when this debt is refinanced. If interest rates were 1.0% higher at the time of refinancing, our annual interest expense would increase by approximately ~~$33.4~~$27 million.

Foreign Currency Exchange Rate Risk

We are exposed to foreign currency exchange rate risk associated with our international operations. However, the effect of fluctuations in foreign currency exchange rates caused by our international operations has not had a material impact on our overall operating results. WeFrom time to time, we may engage in activities to mitigate our exposure to foreign currency exchange risk in certain instances through the use of currency exchange derivative instruments, including forward exchange contracts, cross-currency swaps or spot purchases. A forward exchange contract obligates us to exchange predetermined amounts of specified currencies at a stated

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exchange rate on a stated date.

A cross-currency swap obligates us to make periodic payments in the local currency and receive periodic payments in our functional currency based on the notional amount of the instrument. In January 2018, we entered into hedging arrangements designated as net investment hedges with an aggregate notional value of 220 million euros to reduce the volatility in stockholders' equity from changes in currency exchange rates associated with our net investments in foreign operations.

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Item 4.	Controls and Procedures

We carried out an evaluation, under the supervision and with the participation of our management, including our President and Chief Executive Officer and our Executive Vice President and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures pursuant to Rules 13a-15 or 15d-15 under the Securities Exchange Act of 1934 as of the end of the period covered by this report. Based upon that evaluation, our President and Chief Executive Officer and our Executive Vice President and Chief Financial Officer concluded that our disclosure controls and procedures are effective 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~~June 30, ~~2017~~2018 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION



Item 1.	Legal Proceedings

The ~~2016~~2017 Form 10-K, filed on February ~~22, 2017,~~21, 2018, contained a description of various legal proceedings in which we are involved. See below and Note 1812 to the unaudited consolidated financial statements within this Quarterly Report on Form 10-Q for a description of certain of those proceedings, which information is incorporated by reference herein.

From time to time, we receive notices or inquiries from government entities regarding alleged violations of environmental laws and regulations pertaining to, among other things, the disposal, emission and storage of chemical substances, including hazardous wastes. Item 103 of the SEC's Regulation S-K requires disclosure of certain environmental matters when a governmental authority is a party to the proceedings and the proceedings involve potential monetary sanctions, unless we reasonably believe such sanctions would not exceed $100,000.

In May 2013, an amendment to an existing consent order agreed to by the West Virginia Department of Environmental Protection and a predecessor of Axiall required that it, among other things, pay a penalty in the amount of $449,000 and continue certain corrective actions associated with discharges of hexachlorocyclohexane (commonly referred to as BHC) from the Natrium, West Virginia facility's effluent discharge outfalls. The penalty was paid and corrective actions required are on-going per a December 2016 agreement to extend the compliance date under the amended consent order. The amended consent order also imposes stipulated penalties for exceedances of the facility's interim effluent discharge limits, which penalties we believe may, in the aggregate, reach or exceed $100,000 by year end 2018.

During September 2010, our vinyls facilities in Lake Charles and Plaquemine each received a Consolidated Compliance Order and Notice of Potential Penalty, alleging violations of various requirements of those facilities' air permits, based largely on self-reported permit deviations related to record-keeping violations. We have been negotiating a possible global settlement of these and several other matters with the Louisiana Department of Environmental Quality ("LDEQ"). In May 2018 we reached an agreement in principal with the LDEQ to resolve these consolidated enforcement matters for a penalty of $162,500. The settlement agreement is being prepared and when finalized will be subject to public comment and approval by the Louisiana Attorney General.

For several years, the Environmental Protection Agency (the "EPA") has been conducting an enforcement initiative against petroleum refineries and petrochemical plants with respect to emissions from flares. On April 21, 2014, we received a Clean Air Act Section 114 Information Request from the EPA which sought information regarding flares at the Calvert City, Kentucky facility and certain Lake Charles facilities. The EPA has informed us that the information provided leads the EPA to believe that some of the flares are out of compliance with applicable standards. The EPA has indicated that it is seeking a consent decree that would obligate us to take corrective actions relating to the alleged noncompliance. We believe the resolution of these matters may require the payment of a monetary sanction in excess of $100,000.

Regional offices of the EPA have investigated, and in some cases inspected, our compliance with Risk Management Program requirements under the Clean Air Act at our Calvert City, Kentucky; Natrium, West Virginia and Geismar, Louisiana facilities. We believe the resolution of these matters may require the payment of a monetary sanction in excess of $100,000.

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On November 24, 2014, we entered into an Agreed Order with the Kentucky Energy and Environmental Cabinet ("KEEC") regarding our Kentucky Pollutant Discharge Elimination System ("KPDES") permit limits for hexachlorobenzene and mercury at our Calvert City, Kentucky facility. We and the KEEC recently negotiated a new Agreed Order under which we will be subject to new interim discharge limits for hexachlorobenzene in addition to accompanying stipulated penalties for exceedances of those interim discharge limits. The new Agreed Order further requires us to seek a formal variance from the Tier 3 limit for hexachlorobenzene during the interim period. A formal variance requires public comment and approval by both the KEEC and the EPA.

The KEEC has indicated that it intends to proceed with enforcement on two Notices of Violation ("NOVs") received by our Calvert City, Kentucky facility in December 2016 and May 2017. The NOVs allege violations of state and federal air requirements in connection with the operation of the olefins unit at the facility. We are engaged in negotiations with the KEEC to resolve these alleged violations. We believe the resolution of these matters may require the payment of a monetary sanction in excess of $100,000.

We do not believe that the resolution of any or all of these matters will have a material adverse effect on our financial condition, results of operations or cash flows.



Item 1A.	Risk Factors

For a discussion of risk factors, please read Item 1A, "Risk Factors" in the ~~2016~~2017 Form 10-K. There have been no material changes from those risk factors.



Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds

The following table provides information on our purchase of equity securities during the quarter ended ~~September~~June 30, ~~2017~~2018.

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 ⁽²⁾

Maximum Number
(or Approximate
Dollar Value) of
Shares that
May Yet Be
Purchased Under the
Plans or Programs ⁽²⁾
July 2017 —
$ —
—
$ 171,285,000
August 2017 —
$ —
—
$ 171,285,000
September 2017 1,142
$ 77.67
—
$ 171,285,000
1,142
$ 77.67
—



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 ⁽²⁾	Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs ⁽²⁾
April 2018	165	$	111.25	—	$	171,285,000
May 2018	—	$	—	—	$	171,285,000
June 2018	—	$	—	—	$	171,285,000
	165	$	111.25	—

_____________


(1)	Represents shares withheld in satisfaction of withholding taxes due upon the vesting of restricted stock units granted to our employees under the 2013 Plan.

(2)

In November 2014, our Board of Directors authorized a ~~$250.0~~$250 million share repurchase program (the "2014 Program"). In November 2015, our Board of Directors approved the expansion of the 2014 Program by an additional ~~$150.0~~$150 million. As of ~~September~~June 30, ~~2017,~~2018, 4,193,598 shares of common stock had been acquired at an aggregate purchase price of approximately ~~$228.7~~$229 million under the 2014 Program. Transaction fees and commissions are not reported in the average price paid per share in the table above. Decisions regarding the amount and the timing of purchases under the 2014 Program will be influenced by our cash on hand, our cash flow from operations, general market conditions and other factors. The 2014 Program may be discontinued by our Board of Directors at any time.

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Item 6.	Exhibits



Exhibit No.		EXHIBIT INDEX
4.1
~~10.1†~~		~~Investment Management~~Credit Agreement dated as of July 24, 2018, by and among Westlake Chemical Corporation, ~~Westlake Chemical OpCo LP~~the lenders from time to time party thereto, the issuing banks party thereto and ~~Westlake Chemical Partners LP, dated~~JPMorgan Chase Bank, National Association, as ~~of August 1, 2017~~Administrative Agent, relating to a $1 billion senior unsecured revolving credit facility (incorporated by reference to Exhibit 10.1 to Westlake's Current Report on Form 8-K filed on July 26, 2018, File No. 001-32260)

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)

101.INS†		XBRL Instance Document

101.SCH†		XBRL Taxonomy Extension Schema Document

101.CAL†		XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF†		XBRL Taxonomy Extension Definition Linkbase Document

101.LAB†		XBRL Taxonomy Extension Label Linkbase Document

101.PRE†		XBRL Taxonomy Extension Presentation Linkbase Document


†	Filed herewith.


#	Furnished herewith.

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SIGNATURES

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.



		WESTLAKE CHEMICAL CORPORATION

Date:	~~November 7, 2017~~August 2, 2018	By:	/S/ ALBERT CHAO
			Albert Chao
			President and Chief Executive Officer (Principal Executive Officer)

Date:	~~November 7, 2017~~August 2, 2018	By:	/S/ M. STEVEN BENDER
			M. Steven Bender
			Executive Vice President and Chief Financial Officer (Principal Financial Officer)

5845



	Final Purchase Consideration as of August 31, 2016
Closing stock purchase:
Offer per share	$	33.00
Multiplied by number of shares outstanding at acquisition (in thousands of shares)	67,277
Fair value of Axiall shares outstanding purchased by the Company	2,220,141
Plus:
Axiall debt repaid at acquisition	247,135
Seller's transaction costs paid by the Company ⁽¹⁾	47,458
Total fair value of consideration transferred	2,514,734

Fair value of Axiall share-based awards attributed to pre-combination service ⁽²⁾	11,346
Additional settlement value of shares acquired	13,280
Purchase consideration	2,539,360

Fair value of previously held equity interest in Axiall ⁽³⁾	102,300
Total fair value allocated to net assets acquired	$	2,641,660



	Net Assets Acquired as of August 31, 2016
Cash	$	88,251
Accounts receivable ⁽¹⁾	422,274
Income tax receivable	50,980
Inventories ⁽²⁾	349,205
Prepaid expenses and other current assets	55,462
Property, plant and equipment ⁽²⁾	2,942,162
Customer relationships (weighted average lives of 9.8 years) ⁽³⁾	670,000
Other intangible assets:
Trade name (weighted average lives of 6.8 years)	50,000
Technology (weighted average lives of 5.4 years)	41,500
Supply contracts and leases (weighted average lives of 6.3 years)	27,288
Other assets	93,875
Total assets acquired	4,790,997
Accounts and notes payable	254,041
Interest payable	8,154
Income tax payable	1,607
Accrued compensation	44,186
Accrued liabilities	154,290
Deferred income taxes ⁽⁴⁾	958,304
Tax reserve non-current	3,130
Pension and other post-retirement obligations	311,106
Other liabilities	101,325
Long-term debt	1,187,290
Total liabilities assumed	3,023,433
Total identifiable net assets acquired	1,767,564
Noncontrolling interest	(68,000		)
Goodwill	942,096
Total fair value allocated to net assets acquired	$	2,641,660



	Pro Forma Nine Months Ended September 30, 2016
Net sales	$	5,345,365
Net income ⁽¹⁾	$	277,567
Net income attributable to noncontrolling interest	16,404
Net income attributable to Westlake Chemical Corporation ⁽¹⁾	$	261,163
Earnings per common share attributable to Westlake Chemical Corporation
Basic	$	2.01
Diluted	$	2.00



	September 30, 2017							December 31, 2016
	Principal Amount		Unamortized Premium, Discount and Debt Issuance Costs			Net Long-term Debt		Principal Amount		Unamortized Premium, Discount and Debt Issuance Costs			Net Long-term Debt
Revolving credit facility	$	—	$	—		$	—	$	325,000	$	—		$	325,000
4.625% senior notes due 2021 (the "4.625% Westlake 2021 Senior Notes")	624,793		21,881			646,674		624,793		26,837			651,630
4.625% senior notes due 2021 (the "4.625% Subsidiary 2021 Senior Notes")	63,207		2,343			65,550		63,207		2,862			66,069
3.60% senior notes due 2022	250,000		(1,635		)	248,365		250,000		(1,891		)	248,109
4.875% senior notes due 2023 (the "4.875% Westlake 2023 Senior Notes")	433,793		11,791			445,584		433,793		13,431			447,224
4.875% senior notes due 2023 (the "4.875% Subsidiary 2023 Senior Notes")	16,207		477			16,684		16,207		540			16,747
3.60% senior notes due 2026 (the "3.60% 2026 Senior Notes")	750,000		(10,031		)	739,969		750,000		(10,757		)	739,243
Loan related to tax-exempt waste disposal revenue bonds due 2027	10,889		—			10,889		10,889		—			10,889
6 ½% tax-exempt senior notes due 2029	100,000		(861		)	99,139		100,000		(916		)	99,084
6 ¾% tax-exempt senior notes due 2032	250,000		(605		)	249,395		250,000		(1,883		)	248,117
6 ½% tax-exempt senior notes due 2035 (the "6 ½% 2035 GO Zone Senior Notes")	89,000		(806		)	88,194		89,000		(839		)	88,161
6 ½% tax-exempt senior notes due 2035 (the "6 ½% 2035 IKE Zone Senior Notes")	65,000		(578		)	64,422		65,000		(602		)	64,398
5.0% senior notes due 2046 (the "5.0% 2046 Senior Notes")	700,000		(25,463		)	674,537		700,000		(26,017		)	673,983
Long-term debt, net	$	3,352,889	$	(3,487	)	$	3,349,402	$	3,677,889	$	765		$	3,678,654



	Common Stock		Common Stock, Held in Treasury			Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Noncontrolling Interests			Total
Balances at December 31, 2016	$	1,347	$	(319,339	)	$	550,641		$	3,412,286		$	(121,306	)	$	368,416		$	3,892,045
Net income	—		—			—			501,849			—			21,429			523,278
Other comprehensive income (loss), net of income taxes:
Pension and other post- retirement benefits liability	—		—			—			—			1,057			(44		)	1,013
Foreign currency translation adjustments	—		—			—			—			106,563			2,952			109,515
Other	—		—			—			—			(260		)	—			(260		)
Shares issued—stock- based compensation	—		4,645			(2,441		)	—			—			—			2,204
Stock-based compensation, net of tax on stock options exercised	—		—			10,223			—			—			—			10,223
Dividends declared	—		—			—			(76,491		)	—			—			(76,491		)
Distributions to noncontrolling interests	—		—			—			—			—			(20,767		)	(20,767		)
Issuance of Westlake Chemical Partners LP common units	—		—			—			—			—			110,739			110,739
Balances at September 30, 2017	$	1,347	$	(314,694	)	$	558,423		$	3,837,644		$	(13,946	)	$	482,725		$	4,551,499



	Benefits Liability, Net of Tax		Cumulative Foreign Currency Exchange, Net of Tax			Net Unrealized Holding Gains (Losses) on Investments, Net of Tax			Total
Balances at December 31, 2016	$	28,945	$	(150,202	)	$	(49	)	$	(121,306	)
Other comprehensive income (loss) before reclassifications	—		106,563			(260		)	106,303
Amounts reclassified from accumulated other comprehensive loss	1,057		—			—			1,057
Net other comprehensive income (loss) for the period	1,057		106,563			(260		)	107,360
Balances at September 30, 2017	$	30,002	$	(43,639	)	$	(309	)	$	(13,946	)



Details about Accumulated Other Comprehensive Income (Loss) Components	Location of Reclassification (Income (Expense)) in Consolidated Statements of Operations	Three Months Ended September 30,						Nine Months Ended September 30,
		2017			2016			2017			2016
Amortization of pension and other post-retirement items
Net loss	(1)	$	(529	)	$	(369	)	$	(1,600	)	$	(1,072	)
	Benefit from income taxes	193			141			543			411
		(336		)	(228		)	(1,057		)	(661		)
Net unrealized gains on available-for-sale investments
Realized gain on available-for-sale investments	Other income, net	—			52,401			—			53,720
	Provision for income taxes	—			(696		)	—			(1,169		)
		—			51,705			—			52,551
Total reclassifications for the period		$	(336	)	$	51,477		$	(1,057	)	$	51,890



	September 30, 2017
	Net Presentation			Gross Presentation
	Net Assets (Liabilities) Presented in the Consolidated Balance Sheets			Risk management assets—Commodity forward contracts		Risk management liabilities—Commodity forward contracts
Accounts receivable, net
Derivative positions subject to enforceable master netting arrangements	$	793		$	2,778	$	(1,985	)
Derivative positions not subject to enforceable master netting arrangements	4,557			4,557		—
	5,350			7,335		(1,985		)
Deferred charges and other assets, net
Derivative positions subject to enforceable master netting arrangements	—			—		—
Derivative positions not subject to enforceable master netting arrangements	4,336			4,336		—
	4,336			4,336		—
Accrued liabilities
Derivative positions subject to enforceable master netting arrangements	—			—		—
Derivative positions not subject to enforceable master netting arrangements	(704		)	—		(704		)
	(704		)	—		(704		)
Other liabilities
Derivative positions subject to enforceable master netting arrangements	(1,410		)	745		(2,155		)
Derivative positions not subject to enforceable master netting arrangements	(2,774		)	—		(2,774		)
	(4,184		)	745		(4,929		)
Risk management assets (liabilities)—Commodity forward contracts				$	12,416	$	(7,618	)



Derivatives Not Designated as Hedging Instruments	Location of Gain (Loss) Recognized in Income on Derivative	Three Months Ended September 30,					Nine Months Ended September 30,
Derivatives Not Designated as Hedging Instruments	Location of Gain (Loss) Recognized in Income on Derivative	2017		2016			2017			2016
Commodity forward contracts	Cost of sales	$	6,846	$	(7,840	)	$	(2,756	)	$	7,784



	September 30, 2017
	Level 1			Level 2			Total
Derivative instruments
Risk management assets—Commodity forward contracts	$	233		$	12,183		$	12,416
Risk management liabilities—Commodity forward contracts	(6,183		)	(1,435		)	(7,618		)

	December 31, 2016
	Level 1			Level 2			Total
Derivative instruments
Risk management assets—Commodity forward contracts	$	878		$	14,108		$	14,986
Risk management liabilities—Commodity forward contracts	(6,854		)	(367		)	(7,221		)

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Smaller reporting company

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