SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

(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)

Houston, Texas 77056

(Address of principal executive offices, including zip code)

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

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. YesxNo¨

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). YesxNo¨

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

Large accelerated filer

Accelerated filer

¨☐

Non-accelerated filer

¨ ~~(Do not check if a smaller reporting company)~~

Smaller reporting company

¨☐

Emerging growth company

¨☐

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes¨ ☐ Nox

The number of shares outstanding of the registrant's sole class of common stock as of October ~~31, 2017~~27, 2021 was ~~129,107,447.~~127,821,964.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

WESTLAKE CHEMICAL CORPORATION

CONSOLIDATED BALANCE SHEETS

(Unaudited)


	September 30, 2021		December 31, 2020

	(in millions of dollars, except par values and share amounts)
ASSETS
Current assets
Cash and cash equivalents	$	3,571	$	1,313
Accounts receivable, net	1,642		1,214
Inventories	1,124		918
Prepaid expenses and other current assets	98		32
Total current assets	6,435		3,477
Property, plant and equipment, net	6,992		6,920
Operating lease right-of-use assets	479		461
Goodwill	1,253		1,083
Customer relationships, net	470		444
Other intangible assets, net	198		168
Equity method investments	1,010		1,059
Other assets, net	271		223
Total assets	$	17,108	$	13,835
LIABILITIES AND EQUITY
Current liabilities
Accounts payable	$	718	$	536
Accrued and other liabilities	912		821
Current portion of long-term debt, net	268		—
Total current liabilities	1,898		1,357
Long-term debt, net	4,929		3,566
Deferred income taxes	1,445		1,368
Pension and other post-retirement benefits	362		391
Operating lease liabilities	392		376
Other liabilities	213		199
Total liabilities	9,239		7,257
Commitments and contingencies (Note 14)	0		0
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, 2021 and December 31, 2020, respectively	1		1
Common stock, held in treasury, at cost; 6,830,317 and 6,821,174 shares at September 30, 2021 and December 31, 2020, respectively	(406)		(401)
Additional paid-in capital	576		569
Retained earnings	7,202		5,938
Accumulated other comprehensive loss	(75)		(64)
Total Westlake Chemical Corporation stockholders' equity	7,298		6,043
Noncontrolling interests	571		535
Total equity	7,869		6,578
Total liabilities and equity	$	17,108	$	13,835

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

WESTLAKE CHEMICAL CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands of dollars, except

par values and share amounts)

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,

Common stock, held in treasury, at cost; 5,551,693 and 5,726,377 shares at

September 30, 2017 and December 31, 2016, respectively

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

WESTLAKE CHEMICAL CORPORATION

CONSOLIDATED STATEMENTS OF ~~OPERATIONS~~COMPREHENSIVE INCOME

Net income attributable to Westlake Chemical

Earnings per common share attributable to Westlake

Chemical Corporation:

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

WESTLAKE CHEMICAL CORPORATION

CONSOLIDATED STATEMENTS OF ~~COMPREHENSIVE INCOME~~CHANGES IN STOCKHOLDERS' EQUITY

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


	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, 2020	134,651,380	$	1	6,821,174	$	(401)	$	569	$	5,938	$	(64)	$	535	$	6,578
Net income	—	—		—	—		—		242		—		11		253
Other comprehensive loss	—	—		—	—		—		—		(6)		(1)		(7)

Shares issued—stock-based compensation	—	—		(301,112)	22		(13)		—		—		—		9
Stock-based compensation	—	—		—	—		8		—		—		—		8
Dividends declared	—	—		—	—		—		(35)		—		—		(35)
Distributions to noncontrolling interests	—	—		—	—		—		—		—		(11)		(11)
Noncontrolling interests	—	—		—	—		—		—		—		30		30
Balances at March 31, 2021	134,651,380	1		6,520,062	(379)		564		6,145		(70)		564		6,825
Net income	—	—		—	—		—		522		—		14		536
Other comprehensive income	—	—		—	—		—		—		14		1		15

Shares issued—stock-based compensation	—	—		(18,397)	1		—		—		—		—		1
Stock-based compensation	—	—		—	—		7		—		—		—		7
Dividends declared	—	—		—	—		—		(34)		—		—		(34)
Distributions to noncontrolling interests	—	—		—	—		—		—		—		(11)		(11)

Balances at June 30, 2021	134,651,380	1		6,501,665	(378)		571		6,633		(56)		568		7,339

Table of Contents

WESTLAKE CHEMICAL CORPORATION

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

(Unaudited)


	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)
Net income	—	—		—	—		—		607		—		13		620
Other comprehensive income	—	—		—	—		—		—		(19)		—		(19)
Common stock repurchased	—	—		355,800	(30)		—		—		—		—		(30)
Shares issued—stock-based compensation	—	—		(27,148)	2		(2)		—		—		—		—
Stock-based compensation	—	—		—	—		7		—		—		—		7
Dividends declared	—	—		—	—		—		(38)		—		—		(38)
Distributions to noncontrolling interests	—	—		—	—		—		—		—		(10)		(10)

Balances at September 30, 2021	134,651,380	$	1	6,830,317	$	(406)	$	576	$	7,202	$	(75)	$	571	$	7,869

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

WESTLAKE CHEMICAL CORPORATION

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

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, 2019	134,651,380	$	1	6,266,609	$	(377)	$	553	$	5,757	$	(74)	$	543	$	6,403
Net income	—	—		—	—		—		145		—		12		157
Other comprehensive loss	—	—		—	—		—		—		(32)		—		(32)
Common stock repurchased	—	—		995,529	(54)		—		—		—		—		(54)
Shares issued—stock-based compensation	—	—		(282,476)	18		(8)		(8)		—		—		2
Stock-based compensation	—	—		—	—		6		—		—		—		6
Dividends declared	—	—		—	—		—		(34)		—		—		(34)
Distributions to noncontrolling interests	—	—		—	—		—		—		—		(10)		(10)

Balances at March 31, 2020	134,651,380	1		6,979,662	(413)		551		5,860		(106)		545		6,438
Net income	—	—		—	—		—		15		—		9		24
Other comprehensive income	—	—		—	—		—		—		19		1		20

Shares issued—stock-based compensation	—	—		(16,331)	2		(1)		(1)		—		—		—
Stock-based compensation	—	—		—	—		8		—		—		—		8
Dividends declared	—	—		—	—		—		(34)		—		—		(34)
Distributions to noncontrolling interests	—	—		—	—		—		—		—		(19)		(19)
Balances at June 30, 2020	134,651,380	1		6,963,331	(411)		558		5,840		(87)		536		6,437

Table of Contents

WESTLAKE CHEMICAL CORPORATION

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

(Unaudited)


	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)
Net income	—	—		—	—		—		57		—		12		69
Other comprehensive loss	—	—		—	—		—		—		18		1		19

Shares issued—stock-based compensation	—	—		(32,707)	2		(2)		—		—		—		—
Stock-based compensation	—	—		—	—		7		—		—		—		7
Dividends declared	—	—		—	—		—		(34)		—		—		(34)
Distributions to noncontrolling interests	—	—		—	—		—		—		—		(10)		(10)
Balances at September 30, 2020	134,651,380	$	1	6,930,624	$	(409)	$	563	$	5,863	$	(69)	$	539	$	6,488

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

WESTLAKE CHEMICAL CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS


	Nine Months Ended September 30,
	2021		2020

	(in millions of dollars)
Cash flows from operating activities
Net income	$	1,409	$	250
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization	600		577
Stock-based compensation expense	23		21
Loss from disposition and write-off of property, plant and equipment	14		26

Deferred income taxes	50		154
Other losses, net	21		23
Changes in operating assets and liabilities, net of effect of business acquisitions
Accounts receivable	(414)		(251)
Inventories	(180)		108
Prepaid expenses and other current assets	(49)		(8)
Accounts payable	184		17
Accrued and other liabilities	78		14
Other, net	(99)		(65)
Net cash provided by operating activities	1,637		866
Cash flows from investing activities
Acquisition of businesses, net of cash acquired	(428)		—

Additions to property, plant and equipment	(414)		(403)
Return of (additions to) investment from unconsolidated subsidiaries	(19)		44
Other, net	19		(7)
Net cash used for investing activities	(842)		(366)
Cash flows from financing activities
Debt issuance costs	(18)		(3)
Distributions to noncontrolling interests	(32)		(39)
Dividends paid	(107)		(102)



Proceeds from debt issuance and drawdown of revolver, net	1,668		1,299
Proceeds from (repayment of) short-term notes payable, net	5		(17)

Repayment of revolver and senior notes	—		(1,100)
Repurchase of common stock for treasury	(30)		(54)
Other, net	1		2
Net cash provided by (used for) financing activities	1,487		(14)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(9)		4
Net increase in cash, cash equivalents and restricted cash	2,273		490
Cash, cash equivalents and restricted cash at beginning of period	1,337		750
Cash, cash equivalents and restricted cash at end of period	$	3,610	$	1,240

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~~ 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~~2020 (the "~~2016~~"2020 Form 10-K"), filed with the SEC on February ~~22, 2017.~~24, 2021. 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.~~2020.

In the opinion of the Company's management, the accompanying unaudited consolidated interim financial statements reflect all adjustments (consisting only of normal recurring adjustments) that are necessary for a fair statement of the Company's financial position as of September 30, ~~2017~~,2021, its results of operations for the three and nine months ended September 30, ~~2017~~2021 and ~~2016~~2020, and the changes in its cash position for the nine months ended September 30, ~~2017~~2021 and ~~2016~~.2020.

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~~2021 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.

The coronavirus ("COVID-19") pandemic resulted in widespread adverse impacts on the global economy in 2020. As the COVID-19 pandemic and its impacts on the global economy continue, the Company may experience impacts on its business operations. However, the impact that COVID-19 will have on the financial condition, results of operations and cash flows of the Company cannot be estimated with certainty at this time as it will depend on future developments, including, among others, the timing and logistics with respect to the distribution of vaccines globally and the efficacy of the available vaccines (including with respect to the more recent variants of COVID-19) and other treatments, the ultimate duration of the pandemic, geographic spread and severity of the virus, the consequences of governmental and other measures designed to prevent the spread of the virus, actions taken by customers, suppliers and other third parties, workforce availability, and the timing and extent to which normal economic and operating conditions resume.

The Company holds a 50% interest in RS Cogen, LLC ("RS Cogen") with Entergy Power RS, LLC ("Entergy") holding the remaining interest. Effective January 2021, the Company consolidated RS Cogen into its consolidated financial statements and classified Entergy's 50% interest in RS Cogen as a component of noncontrolling interest on the consolidated balance sheet.

Recent Accounting Pronouncements

~~Revenue from Contracts with Customers~~Reference Rate Reform (ASU No. ~~2014-09)~~2020-04)

In ~~May 2014,~~March 2020, 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.~~to provide optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships and other transactions affected by reference rate reform, if certain criteria are met. 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 obligationsamendments 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 bethis update are effective for ~~reporting periods beginning after~~all entities from March 12, 2020 through 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~~31, 2022, 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 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 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.

~~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 andadoption is not expected to have a material impact on ~~the Company's~~our consolidated financial ~~position, results of operations and cash flows.~~statements. Certain exceptions provided under this guidance may be applicable to future reference rate reform related transitions.

~~Cash Flows~~Recently Adopted Accounting Standards

Income Taxes (ASU No. ~~2016-15)~~2019-12)

In ~~August 2016,~~December 2019, the FASB issued an accounting standards update ~~providing new guidance on the classification of~~removing 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 effectiveexceptions for ~~reporting periods beginning after December 15, 2017 and is 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 effective for reporting periods beginning after December 15, 2017. Upon adoption of the accounting standards update, the Company will retrospectively adjust 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 and restricted cash will be excluded from net changes in cash and cash equivalents within the statements of cash flows.

~~WESTLAKE CHEMICAL CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued~~

~~(Unaudited)~~

~~(in thousands 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. The accounting standard will be effective for reporting periods beginning after December 15, 2017 and is not expected to have a material impact on 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 and is 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 effective for reporting periods beginning after December 15, 2017 and is 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 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.

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

In May 2017, the FASB issued the 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 effective for reporting periods beginning after December 15, 2017. Early adoption is permitted. 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.

~~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,investments, intraperiod allocations and interim ~~periods within those fiscal years. Early application is permitted~~calculations and adding guidance to reduce complexity 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.income taxes. The accounting standard became effective for reporting periods beginning after December 15, ~~2016.~~2020. The Company adopted this accounting standard effective January 1, ~~2017~~2021, 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, and the adoption did not have a material impact on the Company's consolidated financial position, results of operations and cash flows.

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WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)

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

2. Acquisitions

~~2. Acquisition~~Boral Target Companies in North America. On June 20, 2021, Royal Building Products (USA) Inc. ("RBP"), a wholly-owned subsidiary of Westlake, entered into an Equity Purchase Agreement (the "Boral Purchase Agreement") by and among Boral Building Products Inc., a Michigan corporation, Boral Stone Products LLC, a Delaware limited liability company, Boral Lifetile Inc., a California corporation, Boral Windows LLC, a Utah limited liability company, Boral Industries Inc., a California corporation ("Boral Industries"), RBP and, solely for the limited purposes set forth therein, Westlake and Boral Limited, an Australian corporation ("Boral"). Pursuant to the terms of the Boral Purchase Agreement, RBP agreed to acquire from Boral Industries all of the issued and outstanding equity interests of certain subsidiaries of Boral Industries engaged in Boral's North American building products businesses in roofing, siding, trim and shutters, decorative stone and windows (the "Boral Target Companies") for a purchase price of $2,150 in cash, subject to working capital post-closing adjustments. The Boral Purchase Agreement also includes a potential earn-out payment from RBP to Boral Industries of up to $65 if Boral's windows business generates EBITDA in excess of a specified target in its fiscal year ending June 30, 2024. The acquisition will be accounted for under the acquisition method of accounting. The fair value of the estimated earn-out will be recognized as contingent consideration liability as part of the Company's purchase accounting. On October 1, 2021, the Company completed the acquisition of, and acquired all of the equity interests in, the Boral Target Companies. Due to the recent closing of this acquisition, certain financial information related to this acquisition, including the fair value of total consideration transferred or estimated to be transferred, is not yet finalized.

LASCO Fittings, Inc. On July 4, 2021, North American Pipe Corporation ("NAPCO"), a wholly-owned subsidiary of Westlake, entered into an Equity Purchase Agreement with Aalberts U.S. Holding Corp., a Delaware corporation ("Aalberts") and wholly-owned subsidiary of Aalberts N.V., pursuant to which NAPCO agreed to acquire LASCO Fittings, Inc., a Delaware corporation ("LASCO"), from Aalberts. LASCO is a manufacturer of injected-molded PVC fittings that serve the plumbing, pool and spa, industrial, irrigation and retail markets in the United States. On August ~~31, 2016,~~19, 2021, 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~~equity interests in, LASCO. The total closing purchase consideration was $277. The acquisition 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. The Company's management believes that this strategic acquisition will enhance its strategy of integration and will further strengthen its role 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~~being accounted for under the acquisition method of accounting. The assets acquired and liabilities assumed and the results of operations of ~~the acquired business~~LASCO are included in the ~~Company's~~ Vinyls segment.

~~For~~ LASCO net sales and net income since the acquisition date and the acquisition-related costs recognized in the consolidated statement of operations for the three and nine months ended September 30, 2021 were not material to the Company's consolidated statement of operations. The pro forma impact of this acquisition has not been presented as it is not material to the Company's consolidated statements of operations for the nine months ended September 30, ~~2016, the~~2021 and 2020. The Company recognized ~~$90,550~~intangible assets of ~~transaction and integration-related costs. This~~$77, of which $50 is included ~~acquisition-related costs~~in customer relationships, net on the Company's consolidated balance sheets as of ~~$43,895 for advisory, consulting and professional fees and other expenses during the nine months ended~~ September 30, ~~2016. Transaction~~2021, and ~~integration-related costs also included $46,655 during the nine months ended September 30, 2016 related to the settlement~~goodwill of ~~Axiall share-based awards, retention agreement costs and severance benefits provided to former Axiall employees in connection~~$106 with the ~~Merger.~~

~~The following table summarizes the consideration transferred and the estimated fair value of identified assets acquired and liabilities assumed at the date of acquisition. The allocation~~remainder of the purchase consideration ~~transferred~~primarily allocated to property, plant, and equipment, net and working capital balances. The goodwill 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.expected to be deductible for income tax purposes. The goodwill recognized is primarily attributable to ~~synergies related~~the expected value to be achieved from the acquisition. The intangible assets that have been acquired are being amortized over a period of 17 to 18 years.

Dimex LLC. On August 2, 2021, Rome Delaware Corp. ("Rome"), a wholly-owned subsidiary of Westlake, entered into a Stock Purchase Agreement with DX Acquisition Corp., a Delaware corporation ("Dimex"), each of Dimex's stockholders, and for limited purposes, Westlake and Grey Mountain Partners Fund III Holdings, L.P., pursuant to which Rome agreed to acquire Dimex. Dimex is a producer of various consumer products made from post-industrial-recycled polyvinyl chloride, polyethylene and thermoplastic elastomer materials, including landscape edging; industrial, home and office matting; marine dock edging; and masonry joint controls. On September 10, 2021, the Company completed its acquisition of, and acquired all of the equity interests in, Dimex. The total closing purchase consideration was $172, subject to working capital post-closing adjustments. The acquisition is being accounted for under the acquisition method of accounting. The assets acquired and liabilities assumed and the results of operations of Dimex are included in the Vinyls segment. Dimex net sales and net income since the acquisition date and the acquisition-related costs recognized in the consolidated statement of operations for the three and nine months ended September 30, 2021 were not material to the Company's ~~vinyls integration strategy that are expected to arise from the Merger. All~~consolidated statement of ~~the goodwill~~operations. The pro forma impact of this acquisition has not been presented as it is ~~assigned~~not material to the Company's ~~Vinyls segment. As a portion~~consolidated statements of operations for the nine months ended September 30, 2021 and 2020. The Company recognized intangible assets of $69, of which $45 is included in customer relationships, net on the Company's consolidated balance sheets as of September 30, 2021, and goodwill of $66 with the remainder of the purchase consideration primarily allocated to property, plant, and equipment, net and working capital balances. The goodwill ~~arising~~is not expected to be deductible for income tax purposes and is primarily attributable to the expected value to be achieved from the ~~Merger is attributable~~acquisition. The intangible assets that have been acquired are being amortized over a period of 17 to ~~foreign operations, there will be a continuing foreign currency impact to goodwill in the consolidated financial statements.~~19 years.

Table of Contents

WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)

(in ~~thousands~~millions 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

Restricted Cash and Cash Equivalents

The Company had restricted cash and cash equivalents of ~~$31,682~~$39 and $24 at September 30, ~~2017, which was~~2021 and December 31, 2020, respectively. The Company's restricted cash and cash equivalents are primarily related to balances that are restricted for payment of distributions to certain of the Company's current and former employees. ~~The Company had~~In addition, the Company's restricted cash and cash equivalents ~~of $186,216 at December 31, 2016, which was primarily related to balances deposited with and held as security by the lender~~include RS Cogen's cash that is restricted 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~~its senior credit facility. 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 isare reflected primarily 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. Accounts Receivable

Accounts receivable consist of the following:


	September 30, 2021		December 31, 2020
Trade customers	$	1,553	$	1,086
Related parties	2		9
Allowance for credit losses	(23)		(17)
	1,532		1,078
Federal and state taxes	49		92
Other	61		44
Accounts receivable, net	$	1,642	$	1,214

September 30,
2017 December 31,
2016
Trade customers $ 1,111,563
$ 819,739
Affiliates 7,601
7,982
Allowance for doubtful accounts (21,961 ) (17,991 )
1,097,203
809,730
Federal and state taxes 16,657
90,414
Other 29,119
38,599
Accounts receivable, net $ 1,142,979
$ 938,743

5. Inventories

Inventories consist of the following:


	September 30, 2021		December 31, 2020
Finished products	$	639	$	524
Feedstock, additives, chemicals and other raw materials	316		227
Materials and supplies	169		167
Inventories	$	1,124	$	918

September 30,
2017 December 31,
2016
Finished products $ 488,061
$ 500,861
Feedstock, additives and chemicals 213,144
216,877
Materials and supplies 133,630
83,362
Inventories $ 834,835
$ 801,100

6. ~~Property, Plant 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 as significant current or projected operating losses exist. Other factors considered by the Company when determining if an impairment assessment is necessary include, but are not limited to, significant changes or projected changes in supply 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.

~~WESTLAKE CHEMICAL CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued~~

~~(Unaudited)~~

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

~~Depreciation expense on property, plant and equipment 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:

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~~2021 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


	Vinyls Segment		Olefins Segment		Total
Balances at December 31, 2020	$	1,053	$	30	$	1,083
Goodwill acquired during the period	172		—		172


Effects of changes in foreign exchange rates	(2)		—		(2)
Balances at September 30, 2021	$	1,223	$	30	$	1,253

The Company performed its annual impairment ~~tests~~analysis for the Vinyls reporting units induring the second quarter of ~~2017~~2021 and ~~did~~determined that it is more likely than not ~~identify any impairment.~~

~~8. Term Loan~~

~~On August 10, 2016, an indirect subsidiary~~that the fair value of each of the ~~Company, Westlake International Holdings II C.V., a limited partnership organized under~~Vinyls reporting units exceeds its carrying value. Factors considered in the ~~laws~~qualitative assessment included macroeconomic conditions, industry and market considerations, cost factors, current and projected financial performance, changes in management or strategy and market capitalization.

Table 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.

Contents

WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)

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

7. Accounts Payable

9.Accounts payable consist of the following:


	September 30, 2021		December 31, 2020
Accounts payable—third parties	$	687	$	529
Accounts payable to related parties	17		—
Notes payable	14		7
Accounts payable	$	718	$	536

Table of Contents

WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)

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

8. Long-Term Debt

Long-term debt consists of the following:


	September 30, 2021						December 31, 2020
	Principal Amount		Unamortized Discount and Debt Issuance Costs		Net Long-term Debt		Principal Amount		Unamortized Discount and Debt Issuance Costs		Net Long-term Debt
3.60% senior notes due 2022 (the "3.60% 2022 Senior Notes")	$	250	$	—	$	250	$	250	$	(1)	$	249
0.875% senior notes due 2024 (the "0.875% 2024 Senior Notes")	300		(2)		298		—		—		—
3.60% senior notes due 2026 (the "3.60% 2026 Senior Notes")	750		(6)		744		750		(6)		744
Loan related to tax-exempt waste disposal revenue bonds due 2027	11		0		11		11		—		11
1.625% senior notes due 2029 (the "1.625% 2029 Senior Notes")	811		(9)		802		859		(10)		849
3.375% senior notes due 2030 (the "3.375% 2030 Senior Notes")	300		(4)		296		300		(4)		296
3.50% senior notes due 2032 (the "3.50% 2032 GO Zone Refunding Senior Notes")	250		(1)		249		250		(1)		249
2.875% senior notes due 2041 (the "2.875% 2041 Senior Notes")	350		(11)		339		—		—		—
5.0% senior notes due 2046 (the "5.0% 2046 Senior Notes")	700		(22)		678		700		(23)		677
4.375% senior notes due 2047 (the "4.375% 2047 Senior Notes")	500		(8)		492		500		(9)		491
3.125% senior notes due 2051 (the "3.125% 2051 Senior Notes")	600		(23)		577		—		—		—
3.375% senior notes due 2061 (the "3.375% 2061 Senior Notes")	450		(19)		431		—		—		—
8.73% RS Cogen debt due 2022 (the "8.73% 2022 RS Cogen Debt")	24		0		24		—		—		—
Term loans due 2026 (the "2026 Term Loans")	6		—		6		—		—		—
Total long-term debt	5,302		(105)		5,197		3,620		(54)		3,566
Less current portion:
3.60% 2022 Senior Notes	(250)		—		(250)		—		—		—
8.73% 2022 RS Cogen Debt	(18)		—		(18)		—		—		—
Long-term debt, net of current portion	$	5,034	$	(105)	$	4,929	$	3,620	$	(54)	$	3,566

Unamortized debt issuance costs on long-term debt were $43 and $28 at September 30, 2021 and December 31, 2020, respectively.

As of September 30, 2021, the Company was in compliance with all of its long-term debt covenants.

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

Table of Contents

WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)

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

Credit Agreement

The Company has a ~~$1,000,000~~$1,000 revolving credit facility that ~~matures~~is scheduled to mature on ~~August 23, 2021~~July 24, 2023 (the "Credit Agreement"). The 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,~~2021, the Company had no borrowings outstanding under the Credit Agreement. As of September 30, ~~2017,~~2021, the Company had no outstanding letters of credit ~~totaling $45,414~~ and had $1,000 of borrowing availability ~~of $954,586~~ under the Credit Agreement. The Credit Agreement contains certain affirmative and negative covenants, including a quarterly total leverage ratio financial maintenance covenant. As of September 30, ~~2017,~~2021, the Company was in compliance with the total leverage ratio financial maintenance covenant. The 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 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.

The 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 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.

Senior Notes Offering

On August 19, 2021, the Company completed the registered public offering of $300 aggregate principal amount of 0.875% senior notes due 2024 (the “0.875% 2024 Senior Notes”), $350 aggregate principal amount of 2.875% senior notes due 2041 (the “2.875% 2041 Senior Notes”), $600 aggregate principal amount of 3.125% senior notes due 2051 (the “3.125% 2051 Senior Notes”) and $450 aggregate principal amount of 3.375% senior notes due 2061 (the “3.375% 2061 Senior Notes” and, together with the 0.875% 2024 Senior Notes, the 2.875% 2041 Senior Notes and the 3.125% 2051 Senior Notes, the “Notes”). There is no sinking fund and no scheduled amortization of each series of Notes prior to maturity of such respective series. The 0.875% 2024 Senior Notes will accrue interest at a rate of 0.875% per annum, the 2.875% 2041 Senior Notes will accrue interest at a rate of 2.875% per annum, the 3.125% 2051 Senior Notes will accrue interest at a rate of 3.125% per annum and the 3.375% 2061 Senior Notes will accrue interest at a rate of 3.375% per annum. Interest on each series of Notes will accrue from August 19, 2021 and will be payable semi-annually in arrears on February 15 and August 15 of each year, beginning February 15, 2022. The indenture and supplemental indenture governing the Notes contain customary events of default and covenants that restrict the Company and certain of its 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. The Company may optionally redeem each series of Notes in accordance with the terms of such series of Notes. The Notes are unsecured and none of the Company's subsidiaries have guaranteed any series of the Notes.

8.73% 2022 RS Cogen Debt

In July 2000, RS Cogen, our 50%-owned joint venture, entered into a $75 aggregate principal amount senior credit facility institutional loan at an interest rate of 8.73%. All of the assets of RS Cogen are pledged as collateral under its senior credit facility. Borrowings under this senior credit facility are repayable quarterly by September 2022. The Company does not guarantee RS Cogen's debt commitments and RS Cogen is not a guarantor for any of the Company's other long-term debt obligations.

2026 Term Loans

In March 2021, Taiwan Chlorine Industries, Ltd., our 60%-owned joint venture, entered into five-year loan agreements for a maximum total limit of approximately $23. The interest rate on these loans at September 30, 2021 was 0.20%. The unsecured loans include a government rate subsidy and have a 5-year maturity.

Table of Contents

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 30, 2017, the Company was in compliance with all of the covenants with respect to the Credit Agreement, 3.60% 2026 Senior Notes, 5.0% 2046 Senior Notes, 4.625% Westlake 2021 Senior Notes, 4.875% Westlake 2023 Senior Notes, 3.60% 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 and the waste disposal revenue bonds.

~~Unamortized debt issuance costs on Long-term debt were $21,547 and $24,113 at September 30, 2017 and December 31, 2016, 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

9. Accumulated Other Comprehensive Income (Loss)

Changes in accumulated other comprehensive income (loss) by component for the nine months ended September 30, ~~2017~~2021 and ~~2016~~ ~~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.

~~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~~2020 were as follows:


	Pension and Other Post-Retirement Benefits Liability, Net of Tax		Cumulative Foreign Currency Exchange, Net of Tax		Total
Balances at December 31, 2020	$	(24)	$	(40)	$	(64)
Other comprehensive loss attributable to Westlake Chemical Corporation	—		(11)		(11)
Balances at September 30, 2021	$	(24)	$	(51)	$	(75)

Balances at December 31, 2019	$	3	$	(77)	$	(74)
Other comprehensive income attributable to Westlake Chemical Corporation	—		5		5
Balances at September 30, 2020	$	3	$	(72)	$	(69)

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.~~10. 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 are summarized in the table below. The fair value~~majority 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

The carrying and fair values of the Company's long-term debt are summarized in the table below.

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WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)

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


	September 30, 2021				December 31, 2020
	Carrying Value		Fair Value		Carrying Value		Fair Value
3.60% 2022 Senior Notes	$	250	$	254	$	249	$	259
0.875% 2024 Senior Notes	298		301		—		—
3.60% 2026 Senior Notes	744		825		744		846
Loan related to tax-exempt waste disposal revenue bonds due 2027	11		11		11		11
1.625% 2029 Senior Notes	802		860		849		897
3.375% 2030 Senior Notes	296		325		296		332
3.50% 2032 GO Zone Refunding Senior Notes	249		276		249		276
2.875% 2041 Senior Notes	339		337		—		—
5.0% 2046 Senior Notes	678		872		677		905
4.375% 2047 Senior Notes	492		577		491		597
3.125% 2051 Senior Notes	577		571		—		—
3.375% 2061 Senior Notes	431		427		—		—
8.73% 2022 RS Cogen Debt	24		24		—		—
2026 Term Loans	6		6		—		—

~~15.~~

11. Income Taxes

The effective income tax rate was ~~33.1%~~an expense of 23.7% for the ~~third quarter~~three months ended September 30, 2021 as compared to a benefit of ~~2017.~~27.8% for the three months ended September 30, 2020. The effective income tax rate for the third quarter of 2017 was below the U.S. federal statutory rate of 35.0% primarily due to 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, which was a benefit, was (10.3)% for three months ended September 30, ~~2016.~~2021 was above the statutory rate of 21.0% primarily due to state and foreign taxes. The effective income tax rate for the ~~third quarter of 2016~~three months ended September 30, 2020 was a benefit and below the ~~U.S. federal~~ statutory rate of ~~35.0%~~21.0% primarily due to the income tax rate benefit resulting from the carryback of ~~state~~additional federal net operating loss ("NOL") to taxable years that were taxed at the U.S. corporate tax ~~credits,~~rate of 35.0% as permitted under the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act"), partially offset by the reduction in the Internal Revenue Code Section 199 ("Section 199") domestic manufacturing deduction ~~depletion deductions, income attributable to noncontrolling interests,~~as a result of 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.NOL carryback.

The effective income tax rate was ~~30.8%~~an expense of 23.1% for the nine months ended September 30, ~~2017.~~2021 as compared to a benefit of 42.9% for the nine months ended September 30, 2020. The effective income tax rate for the nine months ended September 30, ~~2017~~2021 was ~~below~~above the ~~U.S. federal~~ statutory rate of ~~35.0%~~21.0% primarily due to ~~certain discrete adjustments, a higher domestic manufacturing deduction, depletion deductions, income attributable to noncontrolling interests, research~~state 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 2016 period~~2020 was a benefit and below the ~~U.S. federal~~ statutory rate of ~~35.0%~~21.0% primarily due to the income tax rate benefit resulting from the carryback of ~~state~~federal NOL to taxable years that were taxed at the U.S. corporate tax ~~credits,~~rate of 35.0% as permitted under the CARES Act, partially offset by the reduction in the Section 199 domestic manufacturing deduction as a result of the NOL carryback, the 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 anddeduction, the foreign earnings rate differential ~~partially offset by~~and the state income ~~taxes~~tax benefit.

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WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)

(in millions of dollars, except share amounts and ~~nondeductible transaction costs related to the Merger.~~per share data)

~~The Company files income tax returns in the U.S. federal jurisdiction~~12. Earnings and ~~in various states and foreign jurisdictions. During the second quarter of 2017, the Internal Revenue Service began an audit of the Company for the tax years 2012 to 2014.~~Dividends per Share

~~16.~~ 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.~~each period. Diluted earnings per share include the ~~effect~~effects of certain stock ~~options.~~options and performance stock units.

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 September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Net income attributable to Westlake Chemical Corporation	$	607	$	57	$	1,371	$	217
Less:
Net income attributable to participating securities	(3)		—		(7)		(1)
Net income attributable to common shareholders	$	604	$	57	$	1,364	$	216

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 September 30,				Nine Months Ended September 30,
	2017		2016		2017		2016			2021		2020		2021		2020
Weighted average common shares—basic	129,069,186		128,793,661		129,033,597		129,519,577		Weighted average common shares—basic	128,060,193		127,701,340		128,053,337		127,872,434
Plus incremental shares from:									Plus incremental shares from:
Assumed exercise of options	819,782		586,295		756,368		584,320
Assumed exercise of options and vesting of performance stock units									Assumed exercise of options and vesting of performance stock units	705,621		252,567		656,760		200,632
Weighted average common shares—diluted	129,888,968		129,379,956		129,789,965		130,103,897		Weighted average common shares—diluted	128,765,814		127,953,907		128,710,097		128,073,066

Earnings per common share attributable to Westlake Chemical Corporation:									Earnings per common share attributable to Westlake Chemical Corporation:
Basic	$	1.62	$	0.51	$	3.87	$	2.31	Basic	$	4.71	$	0.45	$	10.65	$	1.69
Diluted	$	1.61	$	0.51	$	3.85	$	2.29	Diluted	$	4.69	$	0.45	$	10.60	$	1.69

Excluded from the computation of diluted earnings per share are options to purchase ~~335,276~~426,918 and ~~620,010~~1,298,659 shares of common stock for the three months ended September 30, ~~2017~~2021 and ~~2016, respectively,~~2020, respectively; and ~~291,888~~476,162 and ~~577,254~~1,234,126 shares of common stock for the nine months ended September 30, ~~2017~~2021 and ~~2016,~~2020, respectively. These options were outstanding during the periods reported but were excluded because the effect of including them would have been antidilutive.

Dividends per Share

~~17.~~Dividends per common share for the three and nine months ended September 30, 2021 and 2020 were as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Dividends per common share	$	0.2975	$	0.2700	$	0.8375	$	0.7950

13. Supplemental Information

Equity Method Investments

LACC, LLC

The Company's investment in LACC, LLC ("LACC"), a related party, was $947 and $961 at September 30, 2021 and December 31, 2020, respectively. The Company made capital contributions to LACC of $10 and $17 during the three and nine months ended September 30, 2021, respectively.

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WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)

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

Accrued and Other Liabilities

Accrued and other liabilities were ~~$609,472~~$912 and ~~$537,483~~$821 at September 30, ~~2017~~2021 and December 31, ~~2016,~~2020, respectively. Accrued rebates, ~~and accrued income taxes, which are components~~a component of accrued and other liabilities, ~~were $110,862 and $72,187, respectively,~~was $152 at September 30, ~~2017~~2021, and ~~$77,985 and $10,891, respectively,~~$128 at December 31, ~~2016.~~2020. No other component of accrued and other liabilities was more than five percent of total current liabilities. Accrued liabilities with ~~affiliates~~related parties were ~~$30,609~~$30 and ~~$10,551~~$61 at September 30, ~~2017~~2021 and December 31, ~~2016,~~2020, respectively.

Restructuring, Transaction and Integration-Related Costs

For the three and nine months ended September 30, 2021, the restructuring, transaction and integration-related costs of $6 primarily consisted of integration-related consulting fees and costs associated with Company's recent acquisitions. For the three and nine months ended September 30, 2020, the restructuring, transaction and integration-related costs of $34 and $36, respectively, primarily consisted of restructuring expenses related to the closure of a non-integrated plant located in Germany.

Non-cash Investing Activity

The change in capital expenditure ~~accrual~~accruals increasing additions to property, plant and equipment was ~~$8,082~~$14 and $49 for ~~the~~the nine months ended September 30, ~~2017. The change in capital expenditure accrual increasing additions to property, plant~~2021 and ~~equipment was $23,878 for the nine months ended September 30, 2016.~~2020, respectively.

~~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

~~WESTLAKE CHEMICAL CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued~~

~~(Unaudited)~~

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

~~18.~~14. 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~~outcome 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, under certain circumstances, if required to recognize costs in a specific period, when combined with other factors, 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.~~such period. 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.

Antitrust Proceedings. The Company and other caustic soda producers were named as defendants in multiple purported class action civil lawsuits filed since March 2019 in the U.S. District Court for the Western District of New York. The lawsuits allege the defendants conspired to fix, raise, maintain and stabilize the price of caustic soda, restrict domestic (U.S.) supply of caustic soda and allocate caustic soda customers. The other defendants named in the lawsuits are Olin Corporation, K.A. Steel Chemicals (a wholly-owned subsidiary of Olin), Occidental Petroleum Corporation, Occidental Chemical Corporation d/b/a OxyChem, Shin-Etsu Chemical Co., Ltd., Shintech Incorporated, Formosa Plastics Corporation, and Formosa Plastics Corporation, U.S.A. Each of the lawsuits is filed on behalf of the respective named plaintiff or plaintiffs and a putative class comprised of either direct purchasers or indirect purchasers of caustic soda in the U.S. The plaintiffs seek an unspecified amount of damages and injunctive relief. The defendants' joint motion to dismiss the direct purchaser lawsuits was denied and the cases have proceeded to discovery. Beginning in October 2020, similar class action proceedings were also filed in Canada before the Superior Court of Quebec as well as before the Federal Court. These proceedings seek the certification or authorization of a class action on behalf of all residents of Canada who purchased caustic soda (including, in one of the cases, those who merely purchased products containing caustic soda) from October 1, 2015 through the present or such date deemed appropriate by the court. At this time, the Company is not able to estimate the impact, if any, that these lawsuits could have on the Company's consolidated financial statements either in the current period or in future periods.

Environmental. As of September 30, ~~2017~~2021 and December 31, ~~2016,~~2020, the Company had reserves for environmental contingencies totaling approximately ~~$47,409~~$55 and ~~$48,817,~~$53, respectively, most of which was 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, the Environmental Protection Agency (the "EPA") conducted inspections at the Company's Plaquemine, Louisiana facility pursuant to requirements of the federal Clean Air Act Section 112(r) Risk Management Program and Title V. As a result of the inspections, the EPA identified areas of concern and the Company subsequently engaged in negotiations to resolve alleged violations. A Consent Agreement and Final Order (“CAFO”) was filed in October 2016, pursuant to which the Company paid civil penalties in the amount of $167.

The LDEQ has issued notices of violations ("NOVs") regarding the Company's olefins facilities in Lake Charles, Louisiana for various air and water compliance issues. The Company has reached an agreement with 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.

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WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)

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

Calvert City Proceedings. For several years, the ~~EPA~~Environmental Protection Agency (the "EPA") has been conducting ~~an enforcement initiative against petroleum refineries~~remedial investigation and ~~petrochemical plants with respect~~feasibility studies at the Company's Calvert City, Kentucky facility pursuant to ~~emissions from flares. On April 21, 2014,~~the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 ("CERCLA"). As the current owner of the Calvert City facility, the Company ~~received a Clean Air Act Section 114 Information Request from~~was named by the EPA as a potentially responsible party ("PRP") along with Goodrich Corporation ("Goodrich") and its successor-in-interest, Avient Corporation (formerly known as PolyOne Corporation, "Avient"). On November 30, 2017, the EPA published a draft Proposed Plan, incorporating by reference an August 2015 draft Remedial Investigation ("RI") report, an October 2017 draft Feasibility Study ("FS") report and a Technical Impracticability Waiver document dated December 19, 2017. On June 18, 2018, the EPA published an amendment to its Proposed Plan. The amended Proposed Plan describes a final remedy for the onshore portion of the site comprised of a containment wall, targeted treatment and supplemental hydraulic containment. The amended Proposed Plan also describes 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 extent of the contamination and potential treatment options. The EPA's estimated cost of implementation is $107, with an estimated $1 to $3 in annual operation and maintenance ("O&M") costs. In September 2018, the EPA published the Record of Decision ("ROD") for the site, formally selecting the preferred final and interim remedies outlined in the amended Proposed Plan. In October 2018, the EPA issued Special Notice letters to the PRPs for the remedial design phase of work under the ROD. In April 2019, the PRPs and the EPA entered into an administrative settlement agreement and order on consent for remedial design. In October 2019, the PRPs received special notice letters for the remedial action phase of work at the site. The Company, jointly with the other PRPs, submitted a good faith offer response in December 2019. On September 17, 2020, the EPA and the Department of Justice filed a proposed consent decree for the remedial action with the U.S. District Court for the Western District of Kentucky. On November 16, 2020, the Department of Justice filed a motion to approve and enter the consent decree. On January 28, 2021, the Court granted the unopposed motion to enter the consent decree, which ~~sought information regarding flares~~became effective the same day. The Company's allocation of liability for remedial and O&M costs at the Calvert City site, if any, is governed by a series of agreements between the Company, Goodrich and Avient. These agreements and the associated litigation are 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 Avient, and that predecessor assumed Goodrich's indemnification obligations relating to preexisting contamination. In 2003, litigation arose among the Company, Goodrich and Avient with respect to the allocation of the cost of remediating contamination at the site. The parties settled this litigation in December 2007 and the case was dismissed. In the settlement, the parties agreed that, among other things: (1) Avient would pay 100% of the costs (with specified exceptions), net of recoveries or credits from third parties, incurred with respect to environmental issues at the Calvert City site from August 1, 2007 forward; and (2) either the Company or Avient might, from time to time in the future (but not more than once every five years), institute an arbitration proceeding to adjust that percentage. In May 2017, Avient filed a demand for arbitration. In this proceeding, Avient sought to readjust the percentage allocation of future costs and to recover approximately $11 from the Company in reimbursement of previously paid remediation costs. The Company's cross demand for arbitration seeking unreimbursed remediation costs incurred during the relevant period was dismissed from the proceedings when Avient paid such costs in full at the beginning of the arbitration hearing.

On July 10, 2018, Avient sued the Company in the U.S. District Court for the Western District of Kentucky, and ~~certain Lake Charles facilities.~~sought to invalidate the arbitration provisions in the parties' 2007 settlement agreement and enjoin the arbitration it had initiated in 2017. On July 30, 2018, the district court refused to enjoin the arbitration and, on January 15, 2019, the court granted the Company's motion to dismiss Avient's suit. On February 13, 2019, Avient appealed those decisions to the U.S. Court of Appeals for the Sixth Circuit. The ~~EPA has informed~~court of appeals issued an opinion and final order on September 6, 2019, affirming the district court.

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WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)

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

The arbitration hearing began in August 2018 and concluded in December 2018. On May 22, 2019, the arbitration panel issued its final award. It determined that Avient was responsible for 100% of the allocable costs at issue in the proceeding and that Avient would remain responsible for 100% of the costs to operate the existing groundwater remedy at the Calvert City site. In August 2019, Avient filed a motion to vacate before the U.S. District Court for the Western District of Kentucky, seeking to invalidate the final award under the Federal Arbitration Act. On February 11, 2020, the U.S. District Court for the Western District of Kentucky denied Avient's motion to vacate and affirmed the arbitration final award. Avient did not file a notice of appeal before the March 10, 2020 deadline to contest the court's decision. Accordingly, the final award was affirmed and the arbitration proceeding is fully and finally resolved. 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 subsequent arbitration or ~~all of these matters will~~judicial 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~~$65 to ~~$80,000.~~$130.

~~Commitments.~~ In connection with the Merger, the Company became a party to a joint venture investment with Lotte Chemical USA Corporation to build an ethylene facility, LACC, LLC ("LACC"). The ethylene facility is located adjacent to the Company's vinyls facility

Table of Contents

WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)

(in ~~Lake Charles. Pursuant to the contribution~~millions of dollars, except share amounts and subscription agreement, the Company agreed to make a maximum capital commitment to LACC of up to $225,000 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 30, 2017, the Company had funded approximately $106,405 of the Company's portion of the construction costs of the ethylene plant.per share data)

~~19.~~15. Segment Information

The Company operates in ~~two~~2 principal operating segments: ~~Olefins~~Vinyls and ~~Vinyls.~~Olefins. 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,
	2021		2020		2021		2020
Net external sales
Vinyls
PVC, caustic soda and other	$	1,834	$	1,116	$	4,950	$	3,333
Building products	514		413		1,406		1,049
Total Vinyls	2,348		1,529		6,356		4,382
Olefins
Polyethylene	559		302		1,488		914
Styrene, feedstock and other	148		67		427		243
Total Olefins	707		369		1,915		1,157
	$	3,055	$	1,898	$	8,271	$	5,539

Intersegment sales
Vinyls	$	—	$	—	$	—	$	1
Olefins	163		79		447		183
	$	163	$	79	$	447	$	184

Income (loss) from operations
Vinyls	$	601	$	42	$	1,236	$	135
Olefins	281		51		738		138
Corporate and other	(21)		(14)		(47)		(22)
	$	861	$	79	$	1,927	$	251

Depreciation and amortization
Vinyls	$	166	$	160	$	486	$	467
Olefins	36		34		109		104
Corporate and other	1		2		5		6
	$	203	$	196	$	600	$	577

Other income, net
Vinyls	$	10	$	7	$	27	$	21
Olefins	—		1		2		2
Corporate and other	3		4		6		9
	$	13	$	12	$	35	$	32

Provision for (benefit from) income taxes
Vinyls	$	141	$	(25)	$	279	$	(121)
Olefins	66		4		170		41
Corporate and other	(14)		6		(26)		5
	$	193	$	(15)	$	423	$	(75)

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
Net external sales
Olefins
Polyethylene $ 377,269
$ 380,810
$ 1,121,603
$ 1,098,500
Styrene, feedstock and other 124,974
116,555
412,869
324,369
Total Olefins 502,243
497,365
1,534,472
1,422,869
Vinyls
PVC, caustic soda and other 1,252,963
599,276
3,541,409
1,492,650
Building products 353,683
182,387
954,785
424,757
Total Vinyls 1,606,646
781,663
4,496,194
1,917,407
$ 2,108,889
$ 1,279,028
$ 6,030,666
$ 3,340,276

Intersegment sales
Olefins $ 106,722
$ 30,614
$ 290,658
$ 85,856
Vinyls 260
2,130
871
2,719
$ 106,982
$ 32,744
$ 291,529
$ 88,575

Table of Contents

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 September 30,						Nine Months Ended September 30,							2021		2020		2021		2020
	2017			2016			2017			2016
Income (loss) from operations
Capital expenditures													Capital expenditures
Vinyls													Vinyls	$	124	$	94	$	346	$	338
Olefins	$	165,438		$	118,475		$	488,532		$	408,274		Olefins	19		16		66		60
Vinyls	216,515			22,235			431,276			136,559
Corporate and other	(16,206		)	(94,147		)	(51,647		)	(116,056		)	Corporate and other	1		2		2		5
	$	365,747		$	46,563		$	868,161		$	428,777			$	144	$	112	$	414	$	403

Depreciation and amortization
Olefins	$	35,029		$	36,649		$	111,244		$	95,582
Vinyls	117,490			56,136			331,585			128,691
Corporate and other	1,115			1,444			5,704			2,920
	$	153,634		$	94,229		$	448,533		$	227,193

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

Provision for (benefit from) income taxes
Olefins	$	58,218		$	31,956		$	152,482		$	136,429
Vinyls	60,784			(3,912		)	114,979			29,655
Corporate and other	(10,383		)	(34,596		)	(34,771		)	(36,752		)
	$	108,619		$	(6,552	)	$	232,690		$	129,332

Capital expenditures
Olefins	$	20,960		$	96,469		$	70,043		$	285,359
Vinyls	107,515			83,523			329,968			180,392
Corporate and other	4,894			178			14,260			1,579
	$	133,369		$	180,170		$	414,271		$	467,330

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,
	2021		2020		2021		2020
Income from operations	$	861	$	79	$	1,927	$	251
Interest expense	(61)		(37)		(130)		(108)
Other income, net	13		12		35		32
Income before income taxes	$	813	$	54	$	1,832	$	175


	September 30, 2021		December 31, 2020
Total assets
Vinyls	$	11,655	$	10,680
Olefins	2,153		1,923
Corporate and other	3,300		1,232
	$	17,108	$	13,835

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
Income from operations $ 365,747
$ 46,563
$ 868,161
$ 428,777
Interest expense (40,036 ) (24,366 ) (118,784 ) (36,966 )
Other income (expense), net 2,058
41,265
6,591
52,091
Income before income taxes $ 327,769
$ 63,462
$ 755,968
$ 443,902

~~WESTLAKE CHEMICAL CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued~~

~~(Unaudited)~~

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

~~20.~~16. Westlake Chemical Partners LP ~~Offerings~~

In ~~March~~ 2014, wethe Company formed Westlake Chemical Partners LP ("~~WLKP"~~Westlake Partners") to operate, acquire and develop ethylene production facilities and related assets. ~~On August 4,~~Also in 2014, ~~WLKP~~Westlake Partners completed its initial public offering ~~(the "IPO")~~ of 12,937,500 common ~~units at~~units.

At September 30, 2021, Westlake Partners had 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%22.8% limited partner interest in Westlake Chemical OpCo LP ("OpCo"), ~~as well as the general partner interest in OpCo. Immediately after the IPO,~~and the Company retained ~~an 89.4%~~a 77.2% limited partner interest in OpCo and a significant interest in ~~WLKP. The initial public offering represented~~Westlake Partners through the ~~sale~~Company's ownership of ~~47.8%~~Westlake Partners' general partner, 40.1% of the limited partner interests (consisting of 14,122,230 common units) and incentive distribution rights.

On October 4, 2018, Westlake Partners and Westlake Partners GP, the general partner of Westlake Partners, entered into an Equity Distribution Agreement with UBS Securities LLC, Barclays Capital Inc., Citigroup Global Markets Inc., Deutsche Bank Securities Inc., RBC Capital Markets, LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Wells Fargo Securities, LLC to offer and sell Westlake Partners' common units, ~~in WLKP.~~

~~On April 29, 2015, WLKP purchased~~from time to time, up to 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~~aggregate offering amount of $50. This Equity Distribution Agreement was amended on February 28, 2020 to reference a ~~secondary offering of 5,175,000~~new shelf registration for utilization under this agreement. No common units at a price of $22.00 per unit. Net proceeds to WLKP from the sale of the units was $110,739, net of underwriting discounts, structuring fees and estimated offering expenses of approximately $3,111. At September 30, 2017, WLKP had a 18.3% limited partner interest in OpCo, and the Company retained a 81.7% limited partner interest in OpCo and a significant interest in WLKP.

~~21. Subsequent Events~~

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

~~22. Guarantor Disclosures~~

~~The Company's payment obligations~~issued under the 3.60% senior notes due 2022, the 3.60% 2026 Senior Notes, the 5.0% 2046 Senior Notes, 4.625% Westlake 2021 Senior Notes and the 4.875% Westlake 2023 Senior Notes are 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~~ (the "Guarantor Subsidiaries"). Each Guarantor Subsidiary is 100% owned by Westlake Chemical Corporation (the "100% Owned Guarantor Subsidiaries"). In October 2016, 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 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 Guarantor Subsidiaries, and the remaining subsidiaries that do not guarantee the 3.60% senior notes due 2022 , the 3.60% 2026 Senior Notes, the 5.0% 2046 Senior Notes, 4.625% Westlake 2021 Senior Notes and the 4.875% Westlake 2023 Senior Notes (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.

~~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
Balance Sheet
Current assets
Cash and cash equivalents $ 334,111
$ 33,089
$ 311,033
$ —
$ 678,233
Accounts receivable, net 3,060,591
4,048,824
432,238
(6,398,674 ) 1,142,979
Inventories —
631,322
203,513
—
834,835
Prepaid expenses and other current assets 16,616
31,785
22,365
(35,906 ) 34,860
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
Property, plant and equipment, net —
4,330,104
2,013,533
—
6,343,637
Other assets, net
Goodwill —
854,896
156,446
—
1,011,342
Customer relationships, net —
493,960
141,924
—
635,884
Other intangible assets, net —
92,155
74,011
—
166,166
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
Total assets $ 13,301,482
$ 11,069,142
$ 4,734,484
$ (17,860,983 ) $ 11,244,125
Current liabilities
Accounts payable $ 5,821,323
$ 830,824
$ 128,673
$ (6,220,016 ) $ 560,804
Accrued liabilities 155,106
436,816
232,114
(214,564 ) 609,472
Total current liabilities 5,976,429
1,267,640
360,787
(6,434,580 ) 1,170,276
Long-term debt, net 3,256,280
4,334,142
223,578
(4,464,598 ) 3,349,402
Deferred income taxes —
1,577,209
106,587
(22,882 ) 1,660,914
Pension and other liabilities —
364,011
148,023
—
512,034
Total liabilities 9,232,709
7,543,002
838,975
(10,922,060 ) 6,692,626
Total Westlake Chemical Corporation
stockholders' equity
4,068,773
3,526,140
3,412,784
(6,938,923 ) 4,068,774
Noncontrolling interests —
—
482,725
—
482,725
Total equity 4,068,773
3,526,140
3,895,509
(6,938,923 ) 4,551,499
Total liabilities and equity $ 13,301,482
$ 11,069,142
$ 4,734,484
$ (17,860,983 ) $ 11,244,125

~~WESTLAKE CHEMICAL CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued~~

~~(Unaudited)~~

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

Total Westlake Chemical Corporation

stockholders' equity

~~WESTLAKE CHEMICAL CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued~~

~~(Unaudited)~~

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

Net income attributable to noncontrolling

Net income attributable to Westlake Chemical

Comprehensive income attributable to

Westlake Chemical Corporation

~~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~~

Net income attributable to noncontrolling

Net income attributable to Westlake Chemical

Comprehensive income attributable to

Westlake Chemical Corporation

~~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~~

Net income attributable to noncontrolling

Net income attributable to Westlake Chemical

Comprehensive income attributable to

Westlake Chemical Corporation

~~WESTLAKE CHEMICAL CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued~~

~~(Unaudited)~~

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

Adjustments to reconcile net income to net

cash provided by (used for) operating

Net cash provided by (used for)

operating activities

Proceeds from involuntary conversion of

Receivable under the investment management

Net proceeds from issuance of Westlake

Chemical Partners LP common units

Net cash provided by (used for)

financing activities

~~WESTLAKE CHEMICAL CORPORATION~~

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

~~(Unaudited)~~

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

Effect of exchange rate changes on cash and

Net increase (decrease) in cash and cash

Cash and cash equivalents at beginning of

~~WESTLAKE CHEMICAL CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued~~

~~(Unaudited)~~

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

Adjustments to reconcile net income (loss) to

net cash provided by (used for) operating

Net cash provided by (used for)

operating activities

Proceeds from sales and maturities of

Net cash provided by (used for)

investing activities

Proceeds from term loan and drawdown of

Net cash provided by (used for)

financing activities

Effect of exchange rate changes on cash and

Net increase (decrease) in cash and cash

Cash and cash equivalents at beginning of

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")~~ 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~~2020 (the "~~2016~~"2020 Form 10-K"). Unless otherwise indicated, references in this report to "we," "our," "us" or like terms refer to Westlake Chemical Corporation ("Westlake" or the "Company"). The following discussion contains forward-looking statements. Please read "Forward-Looking Statements" for a discussion of limitations inherent in such statements.

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

~~Since 2009~~Consumption of the basic chemicals that we manufacture in the commodity portions of our vinyls and ~~continuing~~olefins processes has increased significantly since we began operations in 1986. Our vinyls and olefins 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. Chlor-alkali and petrochemicals are typically manufactured in large volume by a number of different producers using widely available technologies. The chlor-alkali and petrochemical industries exhibit cyclical commodity characteristics, and margins are influenced by changes in the balance between supply and demand and the resulting operating rates, the level of general economic activity and the price of raw materials. Due to the significant size of new plants, capacity additions are built in large increments and typically require several years of demand growth to be absorbed. The cycle is generally characterized by periods of tight supply, leading to high operating rates and margins, followed by a decline in operating rates and margins primarily as a result of excess new capacity additions.

Westlake is the second-largest chlor-alkali producer and the second-largest PVC producer in the world. Demand for vinyl products in the first half of 2020 was negatively impacted by the onset of the coronavirus ("COVID-19") pandemic. Global demand for most of our vinyls products started strengthening in the second half of 2020 and remained strong through the third quarter of ~~2017,~~2021, and we expect global demand for most of our vinyls products to remain robust through the remainder of 2021 and well into 2022. Depending on the performance of the global economy, potential changes in international trade and tariffs policies, the trend of crude oil prices, the timing of the new capacity additions in 2021 and beyond, and the sustainability of the current, strong demand for most of our products, our financial condition, results of operations or cash flows could be negatively or positively impacted.

Ethane-based ethylene producers have in the recent past experienced a cost advantage ~~for ethane-based ethylene producers~~ over naphtha-based ethylene producers during periods of higher crude oil prices. This cost advantage has ~~allowed~~resulted in a strong export market for polyethylene and other 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.~~during such periods. However, we have seen a significant reduction in the cost advantage enjoyed by North American ethane-based ethylene producers ~~due to~~during periods of lower crude oil prices. In the past year, we have seen volatility in ethane and ethylene prices, ~~beginning~~primarily due to changes in demand resulting from the COVID-19 pandemic, anticipated timing for certain new ethylene capacity additions and availability of natural gas liquids, as well as fluctuation in the ~~third quarter~~price of ~~2014~~crude oil. Additionally, we have seen volatility in ethane and ~~continuing~~ethylene prices in 2021 due to winter storm Uri and Hurricane Ida that resulted in shutdowns of many industry production facilities on the Gulf Coast and delayed or extended the timing of planned turnarounds of various ethylene crackers. Global demand for most of our olefins products started strengthening in the second half of 2020 and remained strong through the third quarter of ~~2017. Looking forward,~~2021, and we expect global demand for most of our olefins products to remain robust through the remainder of 2021 and the first half of 2022. However, new ethylene and polyethylene capacity additions in North America, Asia and the Middle East will add additional supply and ~~a number of new capacities announced in recent years,~~ may ~~lead~~contribute to periods of ~~over-supply~~lower profitability in our Olefins segment.

Significant Developments

COVID-19, Industry Conditions and Our Business

On March 11, 2020, the World Health Organization declared the ongoing COVID-19 outbreak a pandemic and recommended containment and mitigation measures worldwide. The pandemic has resulted in widespread adverse impacts on the global economy. We experienced significant disruptions in the second quarter of 2020 as the pandemic and its impact on the global economy spread through most of our markets. We were designated as an essential industry by many governments based on the nature of the products we manufacture. While demand for some of our products used in cleaning, packaging and medical applications and manufacturing continued to be firm, we expected lower ~~profitability.~~demand for certain of our other products that led us to proactively temporarily idle production at several of our smaller non-integrated plants and reduce operating rates at others in the beginning of the second quarter of 2020. Since the middle of the second quarter of 2020, a general ease in government restrictions in many jurisdictions across the world has resulted in a gradual increase in demand for our products. As a result, all of our ~~Olefins segment operating margins may be negatively impacted.~~

~~Since~~idled plants recommenced production. Except for the ~~2008 housing market collapse, continued slow recovery in~~impact of the ~~U.S. construction markets~~winter storm Uri 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 industryHurricane Ida, operating rates have improved for most of our plants since ~~2010. In addition,~~the second half of 2020 due to continuing increase in demand for our ~~July 2014 acquisition~~products. Though the government restrictions across the world generally eased through the third quarter of ~~Vinnolit Holdings GmbH~~2021, there is considerable uncertainty regarding the extent to which COVID-19 will continue to spread and the extent and duration of governmental and other measures implemented to try to slow the spread of the virus. Factors that could impact the spread of COVID-19 include timing and logistics with respect to the distribution of vaccines globally and the efficacy of the available vaccines (including with respect to the more recent variants of COVID-19) and other treatments. We continue to monitor the volatile environment and may reduce operating rates or idle production if the pandemic and its ~~subsidiary companies~~financial impacts persist or worsen. Considering the uncertain and volatile environment, we could continue to experience significant disruptions to our business operations in the near future.

For additional discussion regarding our operations and COVID-19, see Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations in Part II of the 2020 Form 10-K. For additional discussion regarding risks associated with the COVID-19 pandemic, see Item 1A. Risk Factors in Part I of the 2020 Form 10-K.

Acquisition of Boral Target Companies

On June 20, 2021, Royal Building Products (USA) Inc. ("~~Vinnolit"~~RBP"), one of our wholly-owned subsidiaries, entered into that certain Equity Purchase Agreement (the "Boral Purchase Agreement") by and among Boral Building Products Inc., a Michigan corporation, Boral Stone Products LLC, a Delaware limited liability company, Boral Lifetile Inc., a California corporation, Boral Windows LLC, a Utah limited liability company, Boral Industries Inc., a California corporation ("Boral Industries"), RBP and, solely for the limited purposes set forth therein, Westlake and Boral Limited, an ~~integrated global leader~~Australian corporation ("Boral"). Pursuant to the terms of the Boral Purchase Agreement, RBP agreed to acquire from Boral Industries 100% of the issued and outstanding equity interests of certain subsidiaries of Boral Industries engaged in ~~specialty PVC resins, has contributed~~Boral's North American building products businesses in roofing, siding, trim and shutters, decorative stone and windows (the "Boral Target Companies") for a purchase price of $2.15 billion in cash, subject to ~~improved operating margins and cash flows for our Vinyls segment. Globally, there were large chlor-alkali capacity additions between 2008 and 2015 resulting~~working capital post-closing adjustment, as well as a potential earn-out payment from RBP to Boral Industries of up to $65 million if Boral's windows business generates EBITDA 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 resultof a specified target in ~~improved operating rates and caustic soda pricing.~~ its fiscal year ending June 30, 2024 (the “Boral Acquisition”).

On ~~August 31, 2016,~~October 1, 2021, we completed the acquisition of, ~~Axiall~~and acquired all of the equity interests in, the Boral Target Companies.

LASCO Fittings, Inc. On July 4, 2021, North American Pipe Corporation ("~~Axiall"~~NAPCO"), one of our wholly-owned subsidiaries, entered into that certain Equity Purchase Agreement with Aalberts U.S. Holding Corp., a Delaware corporation ("Aalberts") ~~for $33.00 per share~~and wholly-owned subsidiary of Aalberts N.V., pursuant to which NAPCO agreed to acquire LASCO Fittings, Inc., a Delaware corporation ("LASCO"), from Aalberts. On August 19, 2021, we completed the acquisition of, and acquired all of the equity interests in, ~~an all-cash transaction~~LASCO. The total closing purchase consideration was $277 million (the ~~"Merger"~~"LASCO Acquisition"). The ~~combined company is the third-largest global chlor-alkali producer~~assets acquired and liabilities assumed 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 improving. However, depending on the performance of the global economy in the remainder of 2017 and beyond, our financial condition,~~ results of operations of LASCO are included in the Vinyls segment. LASCO is a manufacturer of injected-molded PVC fittings that serve the plumbing, pool and spa, industrial, irrigation and retail markets in the United States.

Dimex Inc. On August 2, 2021, Rome Delaware Corp. ("Rome"), one of our wholly-owned subsidiaries, entered into that certain Stock Purchase Agreement (the "Dimex Purchase Agreement") with DX Acquisition Corp., a Delaware corporation ("Dimex"), each of Dimex's stockholders, and for limited purposes, Westlake and Grey Mountain Partners Fund III Holdings, L.P., pursuant to which Rome agreed to acquire Dimex. On September 10, 2021, we completed the acquisition of, and acquired all of the equity interests in, Dimex. The total closing purchase consideration was $172 million, subject to working capital post-closing adjustments (the "Dimex Acquisition" and, together with the Boral Acquisition and the LASCO Acquisition, the "Acquisitions"). The assets acquired and liabilities assumed and the results of operations of Dimex are included in the Vinyls segment. Dimex is a producer of various consumer products made from post-industrial-recycled polyvinyl chloride, polyethylene and thermoplastic elastomer materials, including, landscape edging; industrial, home and office matting; marine dock edging; and masonry joint controls.

Senior Notes Offering

On August 19, 2021, we completed the registered public offering of $300 million aggregate principal amount of 0.875% senior notes due 2024 (the “0.875% 2024 Senior Notes”), $350 million aggregate principal amount of 2.875% senior notes due 2041 (the “2.875% 2041 Senior Notes”), $600 million aggregate principal amount of 3.125% senior notes due 2051 (the “3.125% 2051 Senior Notes”) and $450 million aggregate principal amount of 3.375% senior unsecured notes due 2061 (the “3.375% 2061 Senior Notes” and, together with the 0.875% 2024 Senior Notes, the 2.875% 2041 Senior Notes and the 3.125% 2051 Senior Notes, the “Notes”). The net proceeds from the offering of the Notes were used to fund a portion of the purchase prices of the Acquisitions. See "Liquidity and Capital Resources—Debt" below and Note 8 to the consolidated financial statements included in this Form 10-Q for more information.

On August 29, 2021, Hurricane Ida made a landfall in Louisiana as a category 4 storm. Due to Hurricane Ida, several of our facilities in the region experienced disruption to their operations, resulting in lost production and sales and higher maintenance expense in the three months ended September 30, 2021. Our facilities impacted by Hurricane Ida have since resumed production.

Petro 2 Facility Flash Fire

In September 2021, Westlake Chemical OpCo LP's Petro 2 ethylene unit commenced turnaround activities. On September 27, 2021, shortly after the turnaround commenced, there was a flash fire at the quench tower of the Petro 2 facility. Several contractors working on the quench tower were injured. Although there was no sustained fire or ~~cash flows could be negatively impacted.~~offsite impact resulting from the incident and the quench tower did not sustain significant damage, due to the subsequent investigation by the Occupational Safety and Health Administration, the duration of the turnaround has been extended and is now expected to conclude in December. There are five lawsuits pending in connection with the flash fire at the quench tower during the Petro 2 turnaround.

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") as one that purports to measure historical or future financial performance, financial position or cash flows ~~but~~that (1) excludes amounts, or ~~includes~~is subject to adjustments that have the effect of excluding amounts, that ~~would not be so adjusted~~are included in the most directly comparable measure calculated and presented in accordance with GAAP ~~measures.~~in the statement of income, balance sheet or statement of cash flows (or equivalent statements) of the registrant; or (2) includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented. In this report, we disclose non-GAAP financial measures, primarily earnings before interest, taxes, depreciation and amortization ("EBITDA"). We define 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.~~

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~~net income, income from operations and net cash ~~flow~~provided by operating activities 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~~A reconciliation of ~~5,175,000 common units at a price of $22.00 per unit~~EBITDA to net income, income from operations and purchased an additional 5.0% newly-issued limited partner interest in Westlake Chemical OpCo LP ("OpCo") for approximately $229.2 million resulting in an aggregate 18.3% limited partner interest in OpCo effective July 1, 2017. Net proceeds to WLKP from the sale of the units was $110.7 million, net of underwriting discounts, structuring fees and estimated offering expenses of approximately $3.1 million. WLKP used the proceeds from the offering and the existing revolving credit facility with Westlake Chemical Finance Corporation, our subsidiary, to fund the purchase of the additional 5.0% interest in OpCo.

During September 2017, we directed the Louisiana Local Government Authority Environmental Facilities and Community Development Authority (the “Authority”) to optionally redeem in full $250.0 million aggregate principal amount of the 2007 Series revenue bonds (the “GO Zone Bonds”) on November 1, 2017 at a redemption price of par, plus accrued and unpaid interest, if any, to the redemption date. The GO Zone Bonds were issuedcash provided 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 Authorityoperating activities 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~~included in the ~~extension~~"Results of ~~the credit facility's maturity date from April 29, 2018 to April 29, 2021.~~

Operations" section below.

Results of Operations

Net income attributable to Westlake Chemical



x☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended	September 30, ~~2017~~2021


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	WLK	The New York Stock Exchange
1.625% Senior Notes due 2029	WLK29	The New York Stock Exchange



Item
~~Item~~	Page
PART I. FINANCIAL INFORMATION
1) Financial Statements		1
2) Management's Discussion and Analysis of Financial Condition and Results of Operations		3924
3) Quantitative and Qualitative Disclosures about Market Risk		5342
4) Controls and Procedures		5543

PART II. OTHER INFORMATION
1) Legal Proceedings		5643
1A) Risk Factors		5644
2) Unregistered Sales of Equity Securities and Use of Proceeds		5644
6) Exhibits		5745



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



	September 30, 2017			December 31, 2016

	(in thousands of dollars, except par values and share amounts)
ASSETS
Current assets
Cash and cash equivalents	$	678,233		$	459,453
Accounts receivable, net	1,142,979			938,743
Inventories	834,835			801,100
Prepaid expenses and other current assets	34,860			48,493
Restricted cash	8,626			160,527
Total current assets	2,699,533			2,408,316
Property, plant and equipment, net	6,343,637			6,420,062
Other assets, net
Goodwill	1,011,342			946,553
Customer relationships, net	635,884			611,615
Other intangible assets, net	166,166			175,839
Deferred charges and other assets, net	387,563			327,868
Total other assets, net	2,200,955			2,061,875
Total assets	$	11,244,125		$	10,890,253
LIABILITIES AND EQUITY
Current liabilities
Accounts payable	$	560,804		$	496,259
Accrued liabilities	609,472			537,483
Term loan	—			149,341
Total current liabilities	1,170,276			1,183,083
Long-term debt, net	3,349,402			3,678,654
Deferred income taxes	1,660,914			1,650,575
Pension and other post-retirement benefits	367,705			364,819
Other liabilities	144,329			121,077
Total liabilities	6,692,626			6,998,208
Commitments and contingencies (Note 18)
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		)
Additional paid-in capital	558,423			550,641
Retained earnings	3,837,644			3,412,286
Accumulated other comprehensive loss	(13,946		)	(121,306		)
Total Westlake Chemical Corporation stockholders' equity	4,068,774			3,523,629
Noncontrolling interests	482,725			368,416
Total equity	4,551,499			3,892,045
Total liabilities and equity	$	11,244,125		$	10,890,253



	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		)



	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
Accounts receivable, net	3,060,591		4,048,824		432,238		(6,398,674		)	1,142,979
Inventories	—		631,322		203,513		—			834,835
Prepaid expenses and other current assets	16,616		31,785		22,365		(35,906		)	34,860
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
Property, plant and equipment, net	—		4,330,104		2,013,533		—			6,343,637
Other assets, net
Goodwill	—		854,896		156,446		—			1,011,342
Customer relationships, net	—		493,960		141,924		—			635,884
Other intangible assets, net	—		92,155		74,011		—			166,166
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
Total assets	$	13,301,482	$	11,069,142	$	4,734,484	$	(17,860,983	)	$	11,244,125
Current liabilities
Accounts payable	$	5,821,323	$	830,824	$	128,673	$	(6,220,016	)	$	560,804
Accrued liabilities	155,106		436,816		232,114		(214,564		)	609,472
Total current liabilities	5,976,429		1,267,640		360,787		(6,434,580		)	1,170,276
Long-term debt, net	3,256,280		4,334,142		223,578		(4,464,598		)	3,349,402
Deferred income taxes	—		1,577,209		106,587		(22,882		)	1,660,914
Pension and other liabilities	—		364,011		148,023		—			512,034
Total liabilities	9,232,709		7,543,002		838,975		(10,922,060		)	6,692,626
Total Westlake Chemical Corporation stockholders' equity	4,068,773		3,526,140		3,412,784		(6,938,923		)	4,068,774
Noncontrolling interests	—		—		482,725		—			482,725
Total equity	4,068,773		3,526,140		3,895,509		(6,938,923		)	4,551,499
Total liabilities and equity	$	13,301,482	$	11,069,142	$	4,734,484	$	(17,860,983	)	$	11,244,125



	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
Accounts receivable, net	2,117,540		3,329,871		323,931		(4,832,599		)	938,743
Inventories	—		597,819		203,281		—			801,100
Prepaid expenses and other current assets	30,748		41,755		12,494		(36,504		)	48,493
Restricted cash	—		—		160,527		—			160,527
Total current assets	2,295,278		4,022,451		959,690		(4,869,103		)	2,408,316
Property, plant and equipment, net	—		4,475,943		1,944,119		—			6,420,062
Other assets, net
Goodwill	—		791,706		154,847		—			946,553
Customer relationships, net	—		468,645		142,970		—			611,615
Other intangible assets, net	—		130,243		71,177		(25,581		)	175,839
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
Total assets	$	11,465,320	$	10,762,991	$	4,388,680	$	(15,726,738	)	$	10,890,253
Current liabilities
Accounts payable	$	4,330,375	$	748,364	$	225,300	$	(4,807,780	)	$	496,259
Accrued liabilities	26,367		389,216		183,223		(61,323		)	537,483
Term loan	—		—		149,341		—			149,341
Total current liabilities	4,356,742		1,137,580		557,864		(4,869,103		)	1,183,083
Long-term debt, net	3,584,949		4,090,775		—		(3,997,070		)	3,678,654
Deferred income taxes	—		1,581,260		91,809		(22,494		)	1,650,575
Pension and other liabilities	—		360,622		125,274		—			485,896
Total liabilities	7,941,691		7,170,237		774,947		(8,888,667		)	6,998,208
Total Westlake Chemical Corporation stockholders' equity	3,523,629		3,592,754		3,245,317		(6,838,071		)	3,523,629
Noncontrolling interests	—		—		368,416		—			368,416
Total equity	3,523,629		3,592,754		3,613,733		(6,838,071		)	3,892,045
Total liabilities and equity	$	11,465,320	$	10,762,991	$	4,388,680	$	(15,726,738	)	$	10,890,253


~~Item 2.~~	~~Management's Discussion and Analysis of Financial Condition and Results of Operations~~


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



	Three Months Ended September 30, 2017				Nine Months Ended September 30, 2017
	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	%
Vinyls	+18.7	%	+86.8	%	+17.8	%	+116.7	%
Company average	+12.1	%	+52.8	%	+14.1	%	+66.4	%

	Three Months Ended September 30,				Nine Months Ended September 30,
	2017		2016		2017		2016
Average industry prices ⁽¹⁾
Ethane (cents/lb)	8.8		6.3		8.3		6.2
Propane (cents/lb)	18.2		11.2		16.6		10.7
Ethylene (cents/lb) ⁽²⁾	24.7		32.5		27.8		26.5
Polyethylene (cents/lb) ⁽³⁾	70.7		68.7		69.0		65.3
Styrene (cents/lb) ⁽⁴⁾	85.1		66.8		85.0		63.3
Caustic soda ($/short ton) ⁽⁵⁾	811.7		660.8		777.8		618.3
Chlorine ($/short ton) ⁽⁶⁾	332.5		304.2		320.8		295.3
PVC (cents/lb) ⁽⁷⁾	62.5		56.5		61.7		53.9


	Three Months Ended September 30, 2021				Nine Months Ended September 30, 2021
	Average Sales Price		Volume		Average Sales Price		Volume
Product sales price and volume percentage change from prior-year period
Vinyls	+53.0	%	+0.5	%	+41.5	%	+3.5	%
Olefins	+88.1	%	+3.6	%	+71.8	%	-6.2	%
Company	+59.8	%	+1.1	%	+47.8	%	+1.5	%

Average Industry Prices (1)
	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020

Average domestic prices
Natural gas ($/MMBtu) (2)	4.0		2.0		3.2		1.9
Ethane (cents/lb) (3)	11.7		7.4		9.5		6.2
Propane (cents/lb) (4)	27.6		11.9		23.2		10.1
Ethylene (cents/lb) (5)	48.0		19.3		45.3		15.4
Polyethylene (cents/lb) (6)	109.0		61.0		95.3		54.1
Styrene (cents/lb) (7)	82.0		53.8		83.0		54.8
Caustic soda ($/short ton) (8)	825		697		743		681
Chlorine ($/short ton) (9)	443		176		328		176
PVC (cents/lb) (10)	109.0		73.3		102.3		70.6

Average export prices
Polyethylene (cents/lb) (11)	86.0		45.7		84.0		41.2
Caustic soda ($/short ton) (12)	364		260		315		261
PVC (cents/lb) (13)	74.1		38.5		73.2		34.3


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


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


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


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


~~(5)~~	~~Represents average North American undiscounted contract prices of caustic soda over the period as reported by IHS Chemical.~~


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


~~(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.


~~Item 3.~~	~~Quantitative and Qualitative Disclosures about Market Risk~~



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



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)
July 2021	175	$	90.04	—	$	131,155,000
August 2021	148,834	84.04		148,598	118,667,000
September 2021	207,876	84.54		207,202	101,151,000
	356,885	$	84.34	355,800


~~(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.~~