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~~July 27, 2023 was ~~129,107,447.~~127,687,296.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

WESTLAKE ~~CHEMICAL~~ CORPORATION

CONSOLIDATED BALANCE SHEETS

(Unaudited)


	June 30, 2023		December 31, 2022

	(in millions of dollars, except par values and share amounts)
ASSETS
Current assets
Cash and cash equivalents	$	2,677	$	2,228
Accounts receivable, net	1,855		1,801
Inventories	1,671		1,866
Prepaid expenses and other current assets	93		78
Total current assets	6,296		5,973
Property, plant and equipment, net	8,550		8,525
Operating lease right-of-use assets	644		615
Goodwill	2,167		2,161
Customer relationships, net	955		993
Other intangible assets, net	552		572
Equity method investments	1,120		1,142
Other assets, net	697		569
Total assets	$	20,981	$	20,550
LIABILITIES AND EQUITY
Current liabilities
Accounts payable	$	802	$	889
Accrued and other liabilities	1,329		1,409

Total current liabilities	2,131		2,298
Long-term debt, net	4,894		4,879
Deferred income taxes	1,692		1,735
Pension and other post-retirement benefits	358		355
Operating lease liabilities	536		504
Other liabilities	293		314
Total liabilities	9,904		10,085
Commitments and contingencies (Note 14)
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 June 30, 2023 and December 31, 2022, respectively	1		1
Common stock, held in treasury, at cost; 6,965,071 and 7,278,651 shares at June 30, 2023 and December 31, 2022, respectively	(463)		(467)
Additional paid-in capital	601		601
Retained earnings	10,484		9,885
Accumulated other comprehensive loss	(79)		(89)
Total Westlake Corporation stockholders' equity	10,544		9,931
Noncontrolling interests	533		534
Total equity	11,077		10,465
Total liabilities and equity	$	20,981	$	20,550

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

WESTLAKE 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.

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, 2022	134,651,380	$	1	7,278,651	$	(467)	$	601	$	9,885	$	(89)	$	534	$	10,465
Net income	—	—		—	—		—		394		—		13		407
Other comprehensive income	—	—		—	—		—		—		22		—		22
Common stock repurchased	—	—		201,742	(22)		—		—		—		—		(22)
Shares issued—stock-based compensation	—	—		(469,404)	24		(20)		—		—		—		4
Stock-based compensation	—	—		—	—		9		—		—		—		9
Dividends declared	—	—		—	—		—		(47)		—		—		(47)
Distributions to noncontrolling interests	—	—		—	—		—		—		—		(10)		(10)

Balances at March 31, 2023	134,651,380	$	1	7,010,989	$	(465)	$	590	$	10,232	$	(67)	$	537	$	10,828
Net income	—	—		—	—		—		297		—		10		307
Other comprehensive loss	—	—		—	—		—		—		(12)		—		(12)
Common stock repurchased	—	—		9,552	(1)		—		—		—		—		(1)
Shares issued—stock-based compensation	—	—		(55,470)	3		1		—		—		—		4
Stock-based compensation	—	—		—	—		10		—		—		—		10
Dividends declared	—	—		—	—		—		(45)		—		—		(45)
Distributions to noncontrolling interests	—	—		—	—		—		—		—		(14)		(14)

Balances at June 30, 2023	134,651,380	$	1	6,965,071	$	(463)	$	601	$	10,484	$	(79)	$	533	$	11,077

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 Loss		Noncontrolling Interests		Total

	(in millions of dollars, except share amounts)
Balances at December 31, 2021	134,651,380	$	1	6,735,639	$	(399)	$	581	$	7,808	$	(36)	$	573	$	8,528
Net income	—	—		—	—		—		756		—		8		764
Other comprehensive loss	—	—		—	—		—		—		(9)		(2)		(11)

Shares issued—stock-based compensation	—	—		(403,743)	27		(17)		—		—		—		10
Stock-based compensation	—	—		—	—		8		—		—		—		8
Dividends declared	—	—		—	—		—		(39)		—		—		(39)
Distributions to noncontrolling interests	—	—		—	—		—		—		—		(10)		(10)
Noncontrolling interests	—	—		—	—		—		—		—		2		2
Balances at March 31, 2022	134,651,380	$	1	6,331,896	$	(372)	$	572	$	8,525	$	(45)	$	571	$	9,252
Net income	—	—		—	—		—		858		—		15		873
Other comprehensive loss	—	—		—	—		—		—		(71)		(2)		(73)
Common stock repurchased	—	—		412,490	(41)		—		—		—		—		(41)
Shares issued—stock-based compensation	—	—		(103,079)	5		1		—		—		—		6
Stock-based compensation	—	—		—	—		9		—		—		—		9
Dividends declared	—	—		—	—		—		(38)		—		—		(38)
Distributions to noncontrolling interests	—	—		—	—		—		—		—		(14)		(14)

Balances at June 30, 2022	134,651,380	$	1	6,641,307	$	(408)	$	582	$	9,345	$	(116)	$	570	$	9,974

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

WESTLAKE ~~CHEMICAL~~CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS


	Six Months Ended June 30,
	2023		2022

	(in millions of dollars)
Cash flows from operating activities
Net income	$	714	$	1,637
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization	538		521
Stock-based compensation expense	21		17
Loss from disposition and write-off of property, plant and equipment	12		18
Deferred income taxes	(51)		81
Other losses, net	(11)		17
Changes in operating assets and liabilities, net of effect of business acquisitions
Accounts receivable	(34)		(416)
Inventories	205		(299)
Prepaid expenses and other current assets	(29)		(40)
Accounts payable	(43)		112
Accrued and other liabilities	(69)		66
Other, net	(186)		(101)
Net cash provided by operating activities	1,067		1,613
Cash flows from investing activities
Acquisition of business, net of cash acquired	—		(1,163)
Additions to investments in unconsolidated subsidiaries	(2)		(156)
Additions to property, plant and equipment	(507)		(493)
Other, net	10		9
Net cash used for investing activities	(499)		(1,803)
Cash flows from financing activities

Distributions to noncontrolling interests	(24)		(24)
Dividends paid	(92)		(77)


Repayment of senior notes	—		(250)
Repurchase of common stock for treasury	(23)		(31)
Other, net	8		5
Net cash used for financing activities	(131)		(377)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	9		(30)
Net increase (decrease) in cash, cash equivalents and restricted cash	446		(597)
Cash, cash equivalents and restricted cash at beginning of period	2,246		1,941
Cash, cash equivalents and restricted cash at end of period	$	2,692	$	1,344

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

Table of Contents

WESTLAKE 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~~2022 (the "~~2016~~"2022 Form 10-K"), filed with the SEC on February 22, ~~2017.~~2023. 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.~~2022. The Company operates as an integrated global manufacturer and marketer of performance and essential materials and housing and infrastructure products. These products include some of the most widely used materials in the world, which are fundamental to many diverse consumer and industrial markets, including residential construction, flexible and rigid packaging, automotive products, healthcare products, materials used in turbines to generate wind energy, water treatment, coatings as well as other durable and non-durable goods. The Company's customers range from large chemical processors and plastics fabricators to small construction contractors, municipalities and supply warehouses throughout North America, Europe and Asia.

In the opinion of the Company's management, the accompanying unaudited consolidated interim financial statements reflect all adjustments (consisting only of normal recurring adjustments) that are necessary for a fair statement of the Company's financial position as of ~~September~~June 30, ~~2017~~,2023, its results of operations for the ~~three and~~ ~~nine~~six months ended ~~September~~June 30, ~~2017~~2023 and ~~2016~~2022, and the changes in its cash position for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2023 and ~~2016~~.2022.

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~~2023 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.

~~Recent~~Recently Issued Accounting ~~Pronouncements~~Pronouncement

~~Revenue from Contracts with Customers (ASU No. 2014-09)~~Leases (Topic 842): Common Control Arrangements ASU 2023-01

In ~~May 2014,~~March 2023, the Financial Accounting Standards Board ("FASB") issued an accounting standards update ~~on a comprehensive new revenue recognition standard~~No. 2023-01 to amend certain provisions of ASC 842 that ~~will supersede~~apply to arrangements between related parties under common control. The update requires all companies to amortize leasehold improvements associated with common control leases over the ~~existing revenue recognition guidance. The new accounting guidance creates a framework by which an entity will allocate~~asset’s useful life to the transaction price to separate performance obligations and recognize revenue when each performance obligation is satisfied. Under the new standard, entities will be required to use judgment and make estimates, including identifying performance obligations in a contract, estimating the amount of variable consideration to include in the transaction price, allocating the transaction price to each separate performance obligation and determining when an entity satisfies its performance obligations. The standard allows for either "full retrospective" adoption, meaning that the standard is applied to allcommon control group regardless of the ~~periods presented with a cumulative catch-up as of the earliest period presented, or "modified retrospective" adoption, meaning the standard~~lease term. The amendment in this update is applied only to the most current period presented in the financial statements with a cumulative catch-up as of the current period. In 2016, the FASB issued various additional authoritative guidance for the new revenue recognition standard. The accounting standard will be effective for ~~reporting periods~~all entities in fiscal years beginning after December 15, 2017. The Company is in the process of evaluating the impact that the new accounting standard will have on its consolidated financial position, results of operations and cash flows. The Company has completed a preliminary assessment2023, including detailed review of a representative sample of contracts with customers. The Company does not believe that adoption of the new accounting standard will materially impact timing or amounts of revenue recognized for the majority of its sales. The Company intends to elect the modified retrospective method of adoption.

~~WESTLAKE CHEMICAL CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued~~

~~(Unaudited)~~

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

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

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

~~Leases (ASU No. 2016-02)~~

In February 2016, the FASB 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 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. 2016-15)~~

In August 2016, the FASB issued an accounting standards update providing new guidance on the classification of certain cash receipts and payments including debt extinguishment costs, debt prepayment costs, settlement of zero-coupon debt instruments, contingent consideration payments, proceeds from the settlement of insurance claims and life insurance policies and distributions received from equity method investees in the statement of cash flows. This update is required to be applied using the retrospective transition method to each period presented unless it is impracticable to be applied retrospectively. In such situation, this guidance is to be applied prospectively. The accounting standard will be 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.

~~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, and interim periods within those fiscal years. Early application is ~~permitted in any interim period after issuance, to be applied retrospectively to the beginning of the fiscal year.~~permitted. The Company is ~~in the process of~~currently evaluating the impact ~~that~~of this accounting standard on the ~~new accounting guidance will have on its~~Company's consolidated financial position, results of operations and cash flows.

Recently Adopted Accounting Standards

~~Investments~~Liabilities - ~~Equity Method and Joint Ventures~~Supplier Finance Programs (ASU No. ~~2016-07)~~2022-04)

In ~~March 2016,~~September 2022, the FASB issued an accounting standards update ~~providing new guidance for~~No. 2022-04 to enhance transparency of supplier finance programs. Under the ~~accounting for equity method investments. The new guidance eliminates~~ASU, the ~~requirement that when an investment qualifies for use~~buyer in a supplier finance program is required to disclose information about the key terms 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 accountingprogram, outstanding confirmed amounts as of the ~~date the investment becomes qualified for equity method accounting. Therefore, upon qualifying for the equity method of accounting, no retroactive adjustment~~end of the ~~investment is required.~~period, a rollforward of the amount of obligations confirmed and the amount of obligations subsequently paid, and a description of where in the financial statements outstanding amounts are presented. The ~~accounting standard~~amendments in this update became effective for ~~reporting periods~~all entities for fiscal years beginning after December 15, ~~2016.~~2022, including interim periods within those fiscal years, except for the disclosure of rollforward information, which is effective for fiscal years beginning after December 15, 2023. The Company adopted this accounting standard effective January 1, ~~2017~~2023, and the adoption did not have a material impact on the Company's consolidated financial position, results of operations and cash flows.

~~Stock Compensation~~

Table of Contents

WESTLAKE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)

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

Business Combinations - Accounting for Contract Assets and Contract Liabilities from Contracts with Customers Update (ASU ~~No. 2016-09)~~No.2021-08)

In ~~March 2016,~~October 2021, the FASB issued an accounting standards update that requires acquiring entities to ~~simplify several aspects of~~recognize and measure contract assets and contract liabilities in a business combination in accordance with the accounting guidance on Revenue from Contracts with Customers (ASC 606). The guidance in this update improves comparability 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 onboth the recognition and measurement of ~~expense for share-based payment awards. Forfeitures can be estimated, as required prior to adoption~~acquired revenue contracts with customers at the date of ~~the accounting standards update, or recognized when they occur.~~and after a business combination. The accounting standard became effective for reporting periods beginning after December 15, ~~2016.~~2022. The Company adopted this accounting standard effective January 1, ~~2017~~2023, and ~~elected~~the standard will be applicable to ~~continue estimating forfeitures as required prior~~future business combinations.

Inflation Reduction Act of 2022

On August 16, 2022, the Inflation Reduction Act of 2022 (the "IRA") was signed into law. The IRA contains several revisions to ~~adoption~~the Internal Revenue Code, including a 15% corporate minimum income tax for corporations with average annual adjusted financial statement income over a three-tax-year period in excess of $1 billion and is effective for the ~~accounting standards update. The adoption did~~tax years beginning after December 31, 2022, a 1% excise tax on stock repurchases made by publicly traded U.S. corporations after December 31, 2022, and business tax credits and incentives for the development of clean energy projects and the production of clean energy. At this time, the Company does not expect the IRA will 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.~~statements. The ~~amendments affect reporting entities that are required~~Company continues 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,IRA's impact as new information and ~~the adoption did not have a material impact on the Company's consolidated financial position, results of operations and cash flows.~~guidance becomes available.

~~WESTLAKE CHEMICAL CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued~~

~~(Unaudited)~~

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

2. Hexion Epoxy Business Acquisition

On ~~August 31, 2016,~~February 1, 2022, the Company completed its acquisition of ~~and acquired all the remaining equity interest in, Axiall Corporation~~Hexion's global epoxy business ("~~Axiall"~~Westlake Epoxy"), for a ~~Delaware corporation. Prior to the acquisition, the Company held 3.1 million shares in Axiall. Pursuant to the terms~~total final purchase consideration of the Agreement and Plan of Merger, dated as of June 10, 2016, by and among Westlake, Axiall and Lagoon Merger Sub, Inc., a Delaware corporation that is a wholly-owned subsidiary of Westlake ("Merger Sub"), the Company acquired all of the remaining issued and outstanding shares of common stock of Axiall for $33.00 per share in cash. Pursuant to the Merger Agreement, Merger Sub was merged with and into Axiall and Axiall survived the merger as a wholly-owned subsidiary of the Company (the "Merger"). The combined company is the third-largest global chlor-alkali producer and the third-largest global polyvinyl chloride ("PVC") producer. 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 accounted for under the acquisition method of accounting.~~$1,207. The assets acquired and liabilities assumed and the results of operations of the ~~acquired~~Westlake Epoxy business are included in the ~~Company's Vinyls~~Performance and Essential Materials segment.

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

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

~~WESTLAKE CHEMICAL CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued~~

~~(Unaudited)~~

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

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

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

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

~~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

~~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

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~~$15 and $18 at ~~September~~June 30, ~~2017, which was~~2023 and December 31, 2022, 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 restricted cash~~employees and ~~cash equivalents of $186,216 at December 31, 2016, which was~~are reflected primarily related to balances deposited with and held as security by the lender under the Company's term loan facility and for distributions to certain of the Company's current and former employees. The current portion of restricted cash and cash equivalents was $8,626 and $160,527 at September 30, 2017 and December 31, 2016, respectively. The noncurrent portion of restricted cash and cash equivalents was $23,056 and $25,689 at September 30, 2017 and December 31, 2016, respectively, and is reflected in ~~deferred charges and~~ other assets, net in the consolidated balance sheets.

~~Available-for-Sale Marketable Securities~~

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

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

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

4. Accounts Receivable

Accounts receivable consist of the following:


	June 30, 2023		December 31, 2022
Trade customers	$	1,666	$	1,676
Related parties	3		3
Allowance for credit losses	(27)		(28)
	1,642		1,651
Federal and state taxes	141		69
Other	72		81
Accounts receivable, net	$	1,855	$	1,801

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

~~Inventories consist of the following:~~

~~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.

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)

~~Depreciation expense on property, plant and equipment~~Inventories consist 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.following:


	June 30, 2023		December 31, 2022
Finished products	$	1,039	$	1,157
Feedstock, additives, chemicals and other raw materials	410		496
Materials and supplies	222		213
Inventories	$	1,671	$	1,866

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

The ~~gross~~ carrying amounts ~~of goodwill~~ and ~~the~~ changes in the carrying amount of goodwill for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2023 were as follows:


	Performance and Essential Materials Segment		Housing and Infrastructure Products Segment		Total
Balances at December 31, 2022	$	1,020	$	1,141	$	2,161

Measurement period adjustments	4		1		5
Effects of changes in foreign exchange rates	—		1		1
Balances at June 30, 2023	$	1,024	$	1,143	$	2,167

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

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

~~On August 10, 2016, an indirect subsidiary~~Accounts payable consist of the ~~Company, Westlake International Holdings II C.V., a limited partnership organized under the laws~~following:


	June 30, 2023		December 31, 2022
Accounts payable—third parties	$	785	$	870
Accounts payable to related parties	14		16
Notes payable	3		3
Accounts payable	$	802	$	889

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)

9.8. Long-Term Debt

Long-term debt consists of the following:


	June 30, 2023		December 31, 2022


0.875% senior notes due 2024	$	300		$	300
3.60% senior notes due 2026	750			750
Loan related to tax-exempt waste disposal revenue bonds due 2027	11			11
1.625% €700 million senior notes due 2029	762			750
3.375% senior notes due 2030	300			300
3.50% senior notes due 2032	250			250
2.875% senior notes due 2041	350			350
5.00% senior notes due 2046	700			700
4.375% senior notes due 2047	500			500
3.125% senior notes due 2051	600			600
3.375% senior notes due 2061	450			450
Term loans due 2026	14			15
Total long-term debt, principal amount	4,987			4,976
Less: unamortized discount and debt issuance costs	(93)			(97)
Total long-term debt, carrying value	$	4,894		$	4,879

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
Unamortized debt issuance costs on long-term debt were $39 and $40 at June 30, 2023 and December 31, 2022, respectively. As of June 30, 2023, the Company was in compliance with all of its long-term debt covenants.

Credit Agreement

~~The~~On June 9, 2022, the Company ~~has~~entered into a ~~$1,000,000~~new $1,500 revolving credit facility that ~~matures~~is scheduled to mature on ~~August 23, 2021~~June 9, 2027 (the "Credit Agreement"). and, in connection therewith, terminated the Company's then existing revolving credit agreement. The Credit Agreement bears interest at either (a) ~~LIBOR~~Adjusted Term Secured Overnight Financing Rate (as defined in the Credit Agreement) plus a ~~spread~~margin ranging from 1.00% to ~~1.75%~~1.625% per annum or (b) Alternate Base Rate (as defined in the Credit Agreement) plus a ~~spread~~margin ranging from 0.00% to ~~0.75%~~0.625% per annum, in each case depending on the credit rating of the Company. ~~At September 30, 2017, the Company had no borrowings outstanding under the~~The Credit ~~Agreement.~~Agreement contains certain affirmative and negative covenants, including a quarterly total leverage ratio financial maintenance covenant. As of ~~September~~June 30, ~~2017, the Company had outstanding letters of credit totaling $45,414 and borrowing availability of $954,586 under the Credit Agreement. As of September 30, 2017,~~2023, 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 to lend thereunder and payments of any outstanding amounts thereunder could be accelerated by the lenders. None of the Company's subsidiaries are required to guarantee the obligations of the Company under the Credit Agreement.

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.

As of June 30, 2023, the Company had no borrowings and no letters of credit outstanding, and had borrowing availability of $1,500, under the Credit Agreement.

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~~six months ended ~~September~~June 30, ~~2017~~2023 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~~2022 were as follows:


	Pension and Other Post-Retirement Benefits Liability, Net of Tax		Cumulative Foreign Currency Exchange, Net of Tax		Other, Net of Tax		Total
Balances at December 31, 2022	$	52	$	(141)	$	—	$	(89)
Net other comprehensive income (loss) attributable to Westlake Corporation	(13)		24		(1)		10
Balances at June 30, 2023	$	39	$	(117)	$	(1)	$	(79)

Balances at December 31, 2021	$	20	$	(56)	$	—	$	(36)
Net other comprehensive income (loss) attributable to Westlake Corporation	1		(81)		—		(80)
Balances at June 30, 2022	$	21	$	(137)	$	—	$	(116)

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:~~

~~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.

The carrying and fair values of the Company's total long-term debt are summarized below:


	June 30, 2023				December 31, 2022
	Carrying Value		Fair Value		Carrying Value		Fair Value
Long-term debt	$	4,894	$	4,027	$	4,879	$	3,940

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

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)

~~15.~~11. Income Taxes

The effective income tax rate was ~~33.1%~~18.6% for the ~~third quarter of 2017.~~three months ended June 30, 2023 as compared to 23.9% for the three months ended June 30, 2022. The effective income tax rate for the ~~third quarter of 2017~~three months ended June 30, 2023 was below the ~~U.S. federal~~ statutory rate of ~~35.0%~~21.0% primarily due to ~~a higher domestic manufacturing deduction, depletion deductions, income attributable to noncontrolling interests,~~U.S. federal research and development credits available to the Company and the ~~foreign earnings rate differential,~~reduction of reserves for uncertain income tax positions as a result of a closed federal income tax audit partially offset by state ~~income~~and foreign taxes. ~~The effective income tax rate, which was a benefit, was (10.3)% for three months ended September 30, 2016.~~ The effective income tax rate for the ~~third quarter of 2016~~three months ended June 30, 2022 was ~~below~~above the ~~U.S. federal~~ statutory rate of ~~35.0%~~21.0% primarily due to ~~the benefit of~~ state tax credits, the domestic manufacturing deduction, depletion deductions, income attributable to noncontrolling interests, the non-recognition of tax related to the gain recognized on previously held outstanding shares of common stock of Axiall, the benefit in prior years' and ~~current-year tax credits for increased research and development expenditures and adjustments related to prior years' tax returns as filed and the~~ foreign ~~earnings rate differential, partially offset by state income taxes and nondeductible transaction costs related to the Merger.~~taxes.

The effective income tax rate was ~~30.8%~~20.0% for the ~~nine~~six months ended ~~September~~June 30, ~~2017.~~2023 as compared to 23.7% for the six months ended June 30, 2022. The effective income tax rate for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2023 was below 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,~~U.S. federal research and development credits available to the Company and the ~~foreign earnings rate differential, partially~~reduction of reserves for uncertain income tax positions as a result of a closed federal income tax audit mostly offset by state ~~income~~and foreign 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~~six months ended June 30, 2022 was ~~below~~above the ~~U.S. federal~~ statutory rate of ~~35.0%~~21.0% primarily due to ~~the benefit of~~ state tax credits, the domestic manufacturing deduction, depletion deductions, income attributable to noncontrolling interests, the non-recognition of tax related to the gain recognized on previously held outstanding shares of common stock of Axiall, the benefit in prior years' and current-year tax credits for increased research and development expenditures and adjustments related to prior years' tax returns as filed and the foreign earnings rate differential, partially offset by state income taxes and nondeductible transaction costs related to the Merger.

~~The Company files income tax returns in the U.S. federal jurisdiction 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.~~taxes.

~~16.~~ 12. Earnings and Dividends per Share

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 June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Net income attributable to Westlake Corporation	$	297	$	858	$	691	$	1,614
Less:
Net income attributable to participating securities	(1)		(5)		(3)		(9)
Net income attributable to common shareholders	$	296	$	853	$	688	$	1,605

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


	Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended June 30,				Six Months Ended June 30,
	2017		2016		2017		2016			2023		2022		2023		2022
Weighted average common shares—basic	129,069,186		128,793,661		129,033,597		129,519,577		Weighted average common shares—basic	127,649,341		128,341,132		127,599,093		128,206,988
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	834,675		999,964		872,667		927,258
Weighted average common shares—diluted	129,888,968		129,379,956		129,789,965		130,103,897		Weighted average common shares—diluted	128,484,016		129,341,096		128,471,760		129,134,246

Earnings per common share attributable to Westlake Chemical Corporation:
Earnings per common share attributable to Westlake Corporation:									Earnings per common share attributable to Westlake Corporation:
Basic	$	1.62	$	0.51	$	3.87	$	2.31	Basic	$	2.32	$	6.65	$	5.39	$	12.52
Diluted	$	1.61	$	0.51	$	3.85	$	2.29	Diluted	$	2.31	$	6.60	$	5.35	$	12.43

Excluded from the computation of diluted earnings per share are options to purchase ~~335,276~~386,526 and ~~620,010~~217,729 shares of common stock for the three months ended ~~September~~June 30, ~~2017~~2023 and ~~2016, respectively,~~2022, respectively; and ~~291,888~~347,470 and ~~577,254~~160,142 shares of common stock for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2023 and ~~2016,~~2022, respectively. These options were outstanding during the periods reported but were excluded because the effect of including them would have been antidilutive.

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~~17.~~WESTLAKE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)

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

Dividends declared per common share for the six months ended June 30, 2023 and 2022 were as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Dividends per common share	$	0.3570	$	0.2975	$	0.7140	$	0.5950

13. Supplemental Information

Equity Method Investments

LACC, LLC Joint Venture

As of June 30, 2023, the Company owned an aggregate 50% membership interest in LACC, LLC ("LACC"). The Company accounts for its investment in LACC under the equity method of accounting and the change for the six months ended June 30, 2023 was as follows:


	Investment in LACC





Balance at December 31, 2022	$	1,075


Depreciation and amortization	(25)

Balance at June 30, 2023	$	1,050

Other assets, net were $697 and $569 at June 30, 2023 and December 31, 2022, respectively. Deferred turnaround costs, net of accumulated amortization, included in other assets, net were $446 and $359 at June 30, 2023 and December 31, 2022, respectively.

Accrued and Other Liabilities

Accrued and other liabilities were ~~$609,472~~$1,329 and ~~$537,483~~$1,409 at ~~September~~June 30, ~~2017~~2023 and December 31, ~~2016,~~2022, respectively. Accrued rebates, current portion of operating lease liabilities and accrued income taxes, which are components of accrued and other liabilities, were ~~$110,862~~$183, $113 and ~~$72,187,~~$172, respectively, at ~~September~~June 30, ~~2017~~2023 and ~~$77,985~~$227, $116 and ~~$10,891,~~$169, respectively, at December 31, ~~2016.~~2022. 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~~$44 at ~~September~~June 30, ~~2017~~2023 and December 31, ~~2016,~~2022, respectively.

Restructuring, Transaction and Integration-Related Costs

The restructuring, transaction and integration-related costs of $3 and $7 for the three months ended June 30, 2023 and 2022, and of $6 and $18 for the six months ended June 30, 2023 and 2022, primarily consisted of costs associated with the Company's acquisitions in previous years.

Non-cash Investing Activity

~~The change~~Capital expenditure related liabilities, included in ~~capital expenditure accrual increasing additions to property, plant~~accounts payable and ~~equipment was $8,082 for the nine months ended September~~accrued and other liabilities, were $102 and $167at June 30, ~~2017. The change in capital expenditure accrual increasing additions to property, plant~~2023 and ~~equipment was $23,878 for the nine months ended September~~June 30, ~~2016.~~2022, respectively.

~~Other Income, Net~~Supplemental Cash Flow Information


	Six Months Ended June 30,
	2023		2022
Cash paid for:
Interest, net of interest capitalized	$	75	$	83
Income taxes	305		355
Operating lease information:
Right-of-use assets obtained in exchange for operating lease obligations	$	90	$	115

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

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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)

~~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.

Caustic Soda Antitrust. 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 Chemical Corporation d/b/a OxyChem, Shintech Incorporated 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 in the putative class for such direct purchasers seek $861 in single damages from the defendants, in addition to treble damages and attorney's fees. The plaintiffs in the putative class for such indirect purchasers seek approximately $500 in single damages from the defendants, in addition to treble damages (if permitted under applicable state law) and injunctive relief. The defendants' joint motion to dismiss the direct purchaser lawsuits was denied. The defendants' joint motion to dismiss the indirect purchaser lawsuits was granted in part and denied in part. Both groups of 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. On December 10, 2021, the Superior Court of Quebec stayed its proceedings until after a final certification decision is released in the Federal Court proceedings. 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.

Ethylene Antitrust.The Company and other ethylene consumers were named as defendants in a civil lawsuit filed by Shell Chemical Europe B.V. ("SCE") in March 2023 in the District Court of Amsterdam, the Netherlands. SCE is a producer of ethylene in the European market and the lawsuit alleges the defendants conspired to lower the purchase price for ethylene and ethylene derivatives by manipulating the monthly contract price. SCE is seeking a declaratory judgment establishing that the Company and the co-defendants are jointly and severally liable for alleged damages resulting from artificially lowered prices for ethylene and ethylene derivatives during the specified period. At this time, the Company is not able to estimate the impact, if any, that this lawsuit could have on the Company's consolidated financial statements either in the current period or in future periods.

Environmental. As of ~~September~~June 30, ~~2017~~2023 and December 31, ~~2016,~~2022, the Company had reserves for environmental contingencies totaling approximately ~~$47,409~~$53 and ~~$48,817,~~$55, 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.

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.

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WESTLAKE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)

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

In March 2022, the Company filed a demand for arbitration seeking reimbursement for certain allocable costs incurred during the applicable period since May 2017, and which Avient has failed to pay or disputed as not subject to indemnity under the 1990 and 1997 agreements. In April 2022, Avient filed a complaint in the federal district court for the Western District of Kentucky disputing the enforceability of the 2007 settlement agreement and seeking to enjoin arbitration. Avient claims that the ~~information provided leads~~allocable costs at issue are up to $22, for which Avient claims the ~~EPA to believe that some of~~Company is totally liable. The Company disputes these claims and at this time, the ~~flares are out of compliance with applicable standards. The EPA has indicated that~~Company believes it is unlikely that any remediation costs allocable to it would result in material expenditures in any individual reporting period.

Triad Hunter. In April 2018, Triad Hunter, LLC ("Triad Hunter") filed suit against the Company and certain of its subsidiaries in the Court of Common Pleas in Monroe County, Ohio seeking injunctive relief and alleging negligence and trespass at the Natrium Plant with respect to Triad Hunter's well drilling activities in Ohio. The case was initially dismissed. Triad Hunter appealed the dismissal, and in March 2019, the Court of Appeals in the Seventh Appellate District in Monroe County, Ohio reversed the dismissal. Trial began in October 2022. On October 27, 2022, the jury returned a ~~consent decree~~verdict finding that ~~would obligate~~the Company had committed trespass and was negligent in conducting salt mining operations at the Natrium Plant and awarded damages of approximately $70. No final judgment has yet been entered. The final judgment could include pre-judgment interest, post-judgment interest, and attorneys' fees. If the final judgment required the Company to ~~take corrective actions relating~~pay any amount of damages, the Company intends to appeal that decision to the ~~alleged noncompliance. The~~Court of Appeals. Upon receipt of the jury verdict, the Company ~~believes~~reserved approximately $70, for the ~~resolution of these matters may require the payment of a monetary sanction in excess of $100.~~damages awarded to Triad Hunter.

~~The Company does not believe that resolutions of any or all of these matters will have a material adverse effect on the Company's financial condition, results of operations or cash flows.~~

Environmental Remediation:Reasonably Possible ~~Matters.~~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~~$75 to ~~$80,000.~~$135.

~~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

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WESTLAKE 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 principal operating segments: ~~Olefins~~Performance and ~~Vinyls.~~Essential Materials and Housing and Infrastructure Products. These segments are strategic business units that offer a variety of different materials and products. The Company manages each segment separately as each business requires different technology and marketing strategies.


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Net external sales
Performance and Essential Materials
Performance Materials	$	1,140	$	2,060	$	2,422	$	3,989
Essential Materials	996		1,044		2,063		1,947
Total Performance and Essential Materials	2,136		3,104		4,485		5,936
Housing and Infrastructure Products
Housing Products	918		1,116		1,736		2,088
Infrastructure Products	197		263		386		515
Total Housing and Infrastructure Products	1,115		1,379		2,122		2,603
	$	3,251	$	4,483	$	6,607	$	8,539

Intersegment sales
Performance and Essential Materials	$	102	$	292	$	213	$	540
Housing and Infrastructure Products	—		—		—		—
	$	102	$	292	$	213	$	540

Income (loss) from operations
Performance and Essential Materials	$	215	$	965	$	618	$	1,844
Housing and Infrastructure Products	190		236		333		421
Corporate and other	(9)		(26)		(19)		(58)
	$	396	$	1,175	$	932	$	2,207

Depreciation and amortization
Performance and Essential Materials	$	217	$	192	$	427	$	376
Housing and Infrastructure Products	51		70		106		141
Corporate and other	3		2		5		4
	$	271	$	264	$	538	$	521

Other income, net
Performance and Essential Materials	$	3	$	5	$	5	$	13
Housing and Infrastructure Products	3		4		10		6
Corporate and other	17		8		30		9
	$	23	$	17	$	45	$	28

Provision for (benefit from) income taxes
Performance and Essential Materials	$	14	$	222	$	81	$	424
Housing and Infrastructure Products	47		58		84		102
Corporate and other	9		(5)		14		(18)
	$	70	$	275	$	179	$	508

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,
2017 2016 2017 2016
Income (loss) from operations
Olefins $ 165,438
$ 118,475
$ 488,532
$ 408,274
Vinyls 216,515
22,235
431,276
136,559
Corporate and other (16,206 ) (94,147 ) (51,647 ) (116,056 )
$ 365,747
$ 46,563
$ 868,161
$ 428,777

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


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Capital expenditures
Performance and Essential Materials	$	194	$	192	$	420	$	413
Housing and Infrastructure Products	42		36		80		75
Corporate and other	4		2		7		5
	$	240	$	230	$	507	$	493

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


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Income from operations	$	396	$	1,175	$	932	$	2,207
Interest expense	(42)		(44)		(84)		(90)
Other income, net	23		17		45		28
Income before income taxes	$	377	$	1,148	$	893	$	2,145


	June 30, 2023		December 31, 2022
Total assets
Performance and Essential Materials	$	13,856	$	13,978
Housing and Infrastructure Products	5,093		5,022
Corporate and other	2,032		1,550
	$	20,981	$	20,550

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)~~

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

~~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.

As of June 30, 2023, 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 Chemical Partners GP LLC, the general partner of Westlake Partners, entered into an Equity Distribution Agreement with UBS Securities LLC, Barclays Capital Inc., Citigroup Global Markets Inc., Deutsche Bank Securities Inc., RBC Capital Markets, LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Wells Fargo Securities, LLC to offer and sell Westlake Partners' common units, ~~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 and subsequent renewals thereof 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)~~

~~Condensed Consolidating Financial Information~~this program as of ~~September~~June 30, ~~2017~~2023.

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)~~

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

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

~~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, 2017~~

Westlake
Chemical
Corporation

100% Owned
Guarantor
Subsidiaries

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

~~WESTLAKE CHEMICAL CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued~~

~~(Unaudited)~~

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

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

Westlake
Chemical
Corporation

100% Owned
Guarantor
Subsidiaries

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

~~WESTLAKE CHEMICAL CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued~~

~~(Unaudited)~~

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

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

Westlake
Chemical
Corporation

100% Owned
Guarantor
Subsidiaries

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

~~WESTLAKE CHEMICAL CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued~~

~~(Unaudited)~~

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

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

Westlake
Chemical
Corporation

100% Owned
Guarantor
Subsidiaries

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

~~WESTLAKE CHEMICAL CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued~~

~~(Unaudited)~~

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

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

Westlake
Chemical
Corporation

100% Owned
Guarantor
Subsidiaries

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

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

~~WESTLAKE CHEMICAL CORPORATION~~

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

~~(Unaudited)~~

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

Westlake
Chemical
Corporation

100% Owned
Guarantor
Subsidiaries

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

~~WESTLAKE CHEMICAL CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued~~

~~(Unaudited)~~

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

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

Westlake
Chemical
Corporation

100% Owned
Guarantor
Subsidiaries

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

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

Table of Contents


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

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~~2022 (the "~~2016~~"2022 Form 10-K"). Unless otherwise indicated, references in this report to "we," "our," "us" or like terms refer to Westlake Corporation ("Westlake" or the "Company"). The following discussion contains forward-looking statements. Please read "Forward-Looking Statements" for a discussion of limitations inherent in such statements.

Overview

We are a vertically integrated global manufacturer and marketer of ~~petrochemicals, polymers~~performance and ~~building~~essential materials and housing and infrastructure products. ~~Our~~We operate in two principal operating segments, Performance and Essential Materials and Housing and Infrastructure Products. The Performance and Essential Materials segment includes Westlake North American Vinyls, Westlake North American Chlor-alkali & Derivatives, Westlake European & Asian Chlorovinyls, Westlake Olefins, Westlake Polyethylene and Westlake Epoxy. The Housing and Infrastructure Products segment includes Westlake Royal Building Products, Westlake Pipe & Fittings, Westlake Global Compounds and Westlake Dimex. We are ~~Olefins~~highly integrated along our materials chain with significant downstream integration from ethylene and ~~Vinyls.~~chlor-alkali (chlorine and caustic soda) into vinyls, polyethylene, epoxy and styrene monomer. We ~~use a majority of~~also have substantial downstream integration from polyvinyl chloride ("PVC") into our ~~internally-produced basic chemicals to produce higher value-added chemicals~~building products, PVC pipes and ~~building products.~~fittings and PVC compounds in our Housing and Infrastructure Products segment.

~~Since 2009~~During 2022 and continuing through the ~~third~~second quarter of ~~2017, a cost advantage for ethane-based ethylene producers over naphtha-based ethylene producers has allowed a strong export market for polyethylene~~2023, our European businesses have been impacted by higher energy prices, inflation and ~~ethylene derivatives and higher margins for~~reduced demand. Our North American ~~chemical producers, including Westlake.~~businesses, where we derive a significant portion of our revenue, have also experienced the impacts of high energy costs and interest rates and slower demand for most of our products since the second half of 2022. However, ~~the falling crude oil prices~~ in recent ~~years~~months we have ~~resulted~~experienced lower energy costs as prices for electricity and natural gas have declined following the elevated 2022 levels and inflation appears to be easing. In the near term, we expect that volatility in ~~reduced~~energy prices, higher interest rates, inflation and ~~margins. Continued strong global~~other macroeconomic conditions will continue to reduce margins and demand for most of our products.

Performance and Essential Materials

Our performance and essential materials such as ethylene, PVC, polyethylene, ~~has resulted~~epoxy and chlor-alkali are some of the most widely used materials in ~~improved~~the world and are upgraded into a wide variety of higher value-added products used in many end-markets. Westlake is the second-largest chlor-alkali producer and the second-largest PVC producer in the world, which makes Westlake a leading global chlorovinyls producer. Our performance and essential materials are used by customers in food and specialty packaging; industrial and consumer packaging; medical health applications; PVC pipe applications; consumer durables; mobility and transportation; renewable wind energy; coatings; and housing and construction products. Chlor-alkali and petrochemicals are typically manufactured globally in large volume by a number of different producers using widely available technologies. The chlor-alkali and petrochemical industries exhibit cyclical commodity characteristics, and margins are influenced by changes in the balance between 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 ~~cash flows~~margins primarily as a result of excess new capacity additions. Westlake is one of the leading producers of epoxy specialty resins, modifiers and curing agents in Europe, the United States and Asia with a global reach to our end markets. Epoxy resins are the fundamental component of many types of materials and are often used in the automotive, construction, wind energy, aerospace and electronics industries due to their superior adhesion, strength and durability. We are also a leading supplier of Liquid and Solid Epoxy Resin. These base epoxies are used in a wide variety of industrial coatings applications.

Global demand for most of our ~~Olefins segment~~products started to recover from the effects of the COVID-19 pandemic in ~~recent years.~~the second half of 2020 and remained strong through the first half of 2022. However, since the second half of 2022 and continuing so far in 2023, we have seen a significant ~~reduction~~volatility in natural gas and electricity prices, particularly in Europe, as well as in ethane and ethylene prices. We have also experienced lower prices and reduced demand for most of our products globally. The ongoing conflict between Russia and Ukraine, the ~~cost advantage enjoyed by North American ethane-based ethylene producers due to lower crude oil prices, beginning in the third quarter~~timing of ~~2014 and continuing through the third quarter of 2017. Looking forward,~~certain new ethylene and polyethylene capacity additions in North America, Asia, and the Middle East, volatility in natural gas and electricity prices, volatility in crude oil prices, as well as inflationary pressures and concerns of a ~~number of new capacities announced in recent years, may lead to periods of over-supply and lower profitability. As a result, our Olefins segment operating margins may be negatively impacted.~~

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

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As noted in Item 1A, "Risk Factors" in our 2022 Form 10-K, we are subject to extensive environmental regulations, which may impose significant additional costs on our operations in the ~~remainder~~future. Further, concerns about greenhouse gas ("GHG") emissions and their effects on climate change has led to the enactment of ~~2017~~regulations, and ~~beyond,~~to proposed legislation and additional regulations, that could affect us in the form of increased cost of feedstocks and fuel, other increased costs of production and decreased demand for our products. The adoption and implementation of any international, federal or state legislation or regulations that restrict emissions of GHGs could result in increased compliance costs or additional operating restrictions.

Housing and Infrastructure Products

Our Housing and Infrastructure Products segment is primarily comprised of building products, PVC pipes and fittings and PVC compound products. Our sales are affected by the individual decisions of distributors and dealers on the levels of inventory they carry, their views on product demand, their financial condition and the manner in which they choose to manage inventory risk. A significant portion of our performance in this segment is driven by the activities in the residential construction and repair and remodeling markets in North America, which began to decline at the end of the second quarter of 2022 due to the negative effect that rising mortgage rates in the United States had on buyer sentiment. Performance of our housing and infrastructure products businesses over time are generally reflective of the trends of building permits and housing starts in the New Residential Construction Survey by the U.S. Census Bureau and the Repair and Remodeling Index provided by the National Association of Home Builders, among others. Although we ultimately expect that the Infrastructure Investment and Jobs Act of 2021 and historically low residential housing construction may have a favorable long-term impact on certain industries related to our Housing and Infrastructure Products segment, the current inflationary environment impacting consumer spending and priorities, concerns of a possible recession in the near-term, high interest rates, decade high mortgage interest rates impacting consumer affordability are expected to continue to have an unfavorable impact on the demand for housing construction and, as a result, our products produced by this segment.

Factors that have caused volatility in our raw material prices, energy costs and production processes in the past, and which may do so in the future, include significant fluctuation in prices of these raw materials in response to, among other things, variable worldwide supply and demand across different industries, speculation in commodities futures, general economic, business or environmental conditions, labor costs, competition, import duties, tariffs, worldwide currency fluctuations, freight, inflationary pressures, regulatory costs, and product and process evolutions that impact demand for the same materials. Increasing raw material prices directly impact our cost of sales and our ability to maintain margins depends on implementing price increases in response to increasing raw material costs. The market for our products may or may not accept price increases, and as such, our future financial condition, results of operations or cash flows could be ~~negatively~~materially impacted.

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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"). and Free Cash Flow. We define EBITDA ~~is calculated~~ as net income before interest expense, income taxes, depreciation and amortization. We define Free Cash Flow as net cash provided by operating activities less additions to property, plant and equipment. The non-GAAP financial measures described in this Form 10-Q are not substitutes for the GAAP measures of earnings and cash ~~flow.~~

~~Table of Contents~~

flows.

EBITDA is included in this Form 10-Q because our management considers it an important supplemental measure of our performance and believes that it is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry, some of which present EBITDA when reporting their results. We regularly evaluate our performance as compared to other companies in our industry that have different financing and capital structures and/or tax rates by using EBITDA. In addition, we utilize EBITDA in evaluating acquisition targets. Management also believes that EBITDA is a useful tool for measuring our ability to meet our future debt service and satisfy capital ~~expenditures~~expenditure and working capital requirements, and EBITDA is commonly used by us and our investors to measure our ability to service indebtedness.

Free Cash Flow is included in this Form 10-Q because our management considers it an important supplemental measure of our performance and believes that it is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry, some of which present Free Cash Flow when reporting their results. We regularly evaluate our performance as compared to other companies in our industry that have different financing and capital structures and/or tax rates by using Free Cash Flow. Management also believes that Free Cash Flow is useful to investors and securities analysts to evaluate our liquidity, evaluate strategic investment, evaluate our stock buyback plan and measure our ability to meet our future debt service.

EBITDA isand Free Cash Flow are not ~~a substitute~~substitutes for the GAAP measures of ~~earnings~~net income, income from operations or ofnet cash ~~flow~~provided by operating activities and isare not necessarily ~~a measure~~measures of our ability to fund our cash needs. In addition, ~~it should be noted that~~ companies calculate EBITDA and Free Cash Flow differently and, therefore, EBITDA and Free Cash Flow as presented for us may not be comparable to EBITDA and Free Cash Flow reported by other companies. EBITDA has material limitations as a performance measure because it excludes interest expense, depreciation and amortization and income taxes.

~~Recent Developments~~

~~On September 29, 2017, Westlake Chemical Partners, LP ("WLKP") completed~~ Free Cash Flow has material limitations as a ~~secondary offering~~performance measure because it only considers net cash provided by operating activities, and not net income or income from operations. For instance, it applies the entire cost of 5,175,000 common units at a price of $22.00 per unit 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 issued by the Authority in December 2007 under the Gulf Opportunity Zone Act of 2005 (GO Zone Act) for the benefit of the Company and were subject to optional redemption by the Authority at any time on or after November 1, 2017 for 100.0% of the principal plus accrued unpaid interest, if any. In connection with the redemption of the Go Zone Bonds, the Authority is required to cause the GO Zone Bonds trustee to surrender the 6 ¾% tax exempt senior notes due November 2032 of $250.0 million, to the Senior Notes trustee for cancellation. We used cash on hand to fund the redemption of the GO Zone Bonds.

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

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

~~On August 1, 2017, our wholly owned subsidiary, Westlake Chemical Finance Corporation, entered into an amendment to the revolving credit facility with WLKP, resulting~~capital expenditure in the ~~extension~~period in which the property or equipment is acquired, rather than spreading it over several periods as is the case with net income and income from operations.

Reconciliations of EBITDA to net income, income from operations and net cash provided by operating activities, and Free Cash Flow to net cash provided by operating activities are included in the ~~credit facility's maturity date from April 29, 2018 to April 29, 2021.~~

"Results of Operations" section below.

Table of Contents

Results of Operations

Net External Sales

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

(dollars in thousands, except per share data)
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
Total $ 2,108,889
$ 1,279,028
$ 6,030,666
$ 3,340,276

Income (loss) from operations
Olefins $ 165,438
$ 118,475
$ 488,532
$ 408,274
Vinyls 216,515
22,235
431,276
136,559
Corporate and other (16,206 ) (94,147 ) (51,647 ) (116,056 )
Total income from operations 365,747
46,563
868,161
428,777
Interest expense (40,036 ) (24,366 ) (118,784 ) (36,966 )
Other income, net 2,058
41,265
6,591
52,091
Provision for (benefit from) income taxes 108,619
(6,552 ) 232,690
129,332
Net income 219,150
70,014
523,278
314,570
Net income attributable to noncontrolling interests 8,318
4,352
21,429
14,656
Net income attributable to Westlake Chemical
Corporation
$ 210,832
$ 65,662
$ 501,849
$ 299,914
Diluted earnings per share $ 1.61
$ 0.51
$ 3.85
$ 2.29
EBITDA ⁽¹⁾
$ 521,439
$ 182,057
$ 1,323,285
$ 708,061
The table below presents net external sales on a disaggregated basis for our two principal operating segments. Performance Materials net external sales primarily consist of sales of PVC, polyethylene and epoxy. Essential Materials net external sales primarily consist of sales of caustic soda, styrene, and related derivative materials. Housing Products net external sales primarily consist of sales of housing exterior and interior products, residential pipes and fittings and residential PVC compounds. Infrastructure Products net external sales primarily consist of sales of non-residential pipes and fittings and non-residential PVC compounds.


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022

	(dollars in millions, except per share data)
Net external sales
Performance and Essential Materials
Performance Materials	$	1,140	$	2,060	$	2,422	$	3,989
Essential Materials	996		1,044		2,063		1,947
Total Performance and Essential Materials	2,136		3,104		4,485		5,936
Housing and Infrastructure Products
Housing Products	918		1,116		1,736		2,088
Infrastructure Products	197		263		386		515
Total Housing and Infrastructure Products	1,115		1,379		2,122		2,603
	$	3,251	$	4,483	$	6,607	$	8,539

Income (loss) from operations
Performance and Essential Materials	$	215	$	965	$	618	$	1,844
Housing and Infrastructure Products	190		236		333		421
Corporate and other	(9)		(26)		(19)		(58)
Total income from operations	396		1,175		932		2,207
Interest expense	(42)		(44)		(84)		(90)
Other income, net	23		17		45		28
Provision for income taxes	70		275		179		508
Net income	307		873		714		1,637
Net income attributable to noncontrolling interests	10		15		23		23
Net income attributable to Westlake Corporation	$	297	$	858	$	691	$	1,614
Diluted earnings per share	$	2.31	$	6.60	$	5.35	$	12.43
EBITDA (1)	$	690	$	1,456	$	1,515	$	2,756
Free Cash Flow (2)	$	315	$	683	$	560	$	1,120

_____________


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

(1)See above for discussions on non-GAAP financial measures. See "Reconciliation of EBITDA to Net Income, Income from Operations and Net Cash Provided by Operating Activities" below.

(2)See above for discussions on non-GAAP financial measures. See "Reconciliation of Free Cash Flow to Net Cash Provided by Operating Activities" below.

Table of Contents


	Three Months Ended June 30, 2023				Six Months Ended June 30, 2023
	Average Sales Price		Volume		Average Sales Price		Volume
Net sales percentage change from prior-year period due to average sales price and volume
Performance and Essential Materials	-21	%	-10	%	-17	%	-8	%
Housing and Infrastructure Products	-1	%	-18	%	+1	%	-19	%
Company average	-15	%	-13	%	-12	%	-11	%


	Three Months Ended June 30, 2023		Six Months Ended June 30, 2023
Domestic US prices percentage change from prior-year period for fuel cost and feedstock
Fuel cost (Natural Gas)	-71	%	-55	%
Feedstock (Ethane)	-64	%	-53	%

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

~~_____________~~


~~(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.

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

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


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022

	(dollars in millions)
Net cash provided by operating activities	$	555	$	913	$	1,067	$	1,613
Changes in operating assets and liabilities and other	(283)		(1)		(404)		105
Deferred income taxes	35		(39)		51		(81)
Net income	307		873		714		1,637
Less:
Other income, net	23		17		45		28
Interest expense	(42)		(44)		(84)		(90)
Provision for income taxes	(70)		(275)		(179)		(508)
Income from operations	396		1,175		932		2,207
Add:
Depreciation and amortization	271		264		538		521
Other income, net	23		17		45		28
EBITDA	$	690	$	1,456	$	1,515	$	2,756

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

(dollars in thousands)
Net cash provided by operating activities $ 482,950
$ 174,268
$ 962,664
$ 544,160
Changes in operating assets and liabilities and other (255,468 ) (101,334 ) (416,092 ) (123,680 )
Deferred income taxes (8,332 ) (2,920 ) (23,294 ) (105,910 )
Net income 219,150
70,014
523,278
314,570
Add:
Depreciation and amortization 153,634
94,229
448,533
227,193
Interest expense 40,036
24,366
118,784
36,966
Provision for (benefit from) income taxes 108,619
(6,552 ) 232,690
129,332
EBITDA $ 521,439
$ 182,057
$ 1,323,285
$ 708,061
Reconciliation of Free Cash Flow to Net Cash Provided by Operating Activities

The following table presents the reconciliation of Free Cash Flow to net cash provided by operating activities, the most directly comparable GAAP financial measure, for each of the periods indicated.


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022

	(dollars in millions)
Net cash provided by operating activities	$	555	$	913	$	1,067	$	1,613
Less:
Additions to property, plant and equipment	(240)		(230)		(507)		(493)
Free Cash Flow	$	315	$	683	$	560	$	1,120

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Summary

For the quarter ended ~~September~~June 30, ~~2017,~~2023, net income attributable to Westlake ~~Chemical Corporation~~ was ~~$210.8~~$297 million, or ~~$1.61~~$2.31 per diluted share, on net sales of ~~$2,108.9~~$3,251 million. This represents ~~an increase~~a decrease in net income attributable to Westlake ~~Chemical Corporation~~ of ~~$145.1~~$561 million, or ~~$1.10~~$4.29 per diluted share, compared to the ~~third~~ quarter ~~of 2016~~ended June 30, 2022 net income attributable to Westlake ~~Chemical Corporation~~ of ~~$65.7~~$858 million, or ~~$0.51~~$6.60 per diluted share, on net sales of ~~$1,279.0~~$4,483 million. ~~Net income~~Income from operations for the ~~third~~ quarter ended June 30, 2023 was $396 million, a $779 million decrease from income from operations of ~~2017 increased versus~~$1,175 million for the ~~prior-year period~~quarter ended June 30, 2022. The decrease in net income and income from operations was primarily due to ~~(1) earnings contributed~~lower sales prices and volumes for most of our products resulting from weaker global demand and lower plant operating rates due to planned and unplanned outages. The decreases in net income and income from operations in the second quarter of 2023 were partially offset by ~~Axiall, which was acquired on August 31, 2016; (2)~~higher caustic soda sales prices resulting from the continuing strong global markets for chlor-alkali products as well as lower ~~transaction~~natural gas and ~~integration-related costs associated with~~feedstock costs. Net sales decreased by $1,232 million to $3,251 million in the ~~acquisition;~~quarter ended June 30, 2023 from $4,483 million in the quarter ended June 30, 2022, primarily due to lower sales prices and ~~(3)~~volumes for most of our products, partially offset by higher sales prices for major products resulting in improved margins. These increases, as compared to the third quarter of 2016, were partially offset by (1) higher interest expense due to the increased debt balance as a result of the Axiall acquisition; (2) a third quarter 2016 realized gain of $49.1 million from the previously held common stock of Axiall;caustic soda and (3) a higher effective tax rate. Net sales for the third quarter of 2017 increased by $829.9 million compared to net sales for the third quarter of 2016, mainly due to higher sales contributed by Axiall and higher sales prices for our major products. Income from operations was $365.7 million for the third quarter of 2017 as compared to $46.6 million for the third quarter of 2016. The increase in income from operations for the third quarter of 2017 was mainly a result of earnings contributed by Axiall, lower transaction and integration-related costs and higher sales prices as compared to the third quarter of 2016. Transaction and integration-related costs in the third quarter of 2017 were $6.7 million, or $0.03 per diluted share.chlorine.

For the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2023, net income attributable to Westlake ~~Chemical Corporation~~ was ~~$501.8~~$691 million, or ~~$3.85~~$5.35 per diluted share, on net sales of ~~$6,030.7~~$6,607 million. This represents ~~an increase~~a decrease in net income attributable to Westlake ~~Chemical Corporation~~ of ~~$201.9~~$923 million, or ~~$1.56~~$7.08 per diluted share, compared to the ~~nine~~six months ended ~~September~~June 30, ~~2016~~2022 net income attributable to Westlake ~~Chemical Corporation~~ of ~~$299.9~~$1,614 million, or ~~$2.29~~$12.43 per diluted share, on net sales of ~~$3,340.3~~$8,539 million. ~~Net income~~Income from operations for the ~~nine~~six months ended ~~September~~June 30, ~~2017 increased versus~~2023 was $932 million, a $1,275 million decrease from income from operations of $2,207 million for the ~~prior-year period~~six months ended June 30, 2022. The decrease in net income and income from operations was primarily due to ~~(1) earnings contributed by Axiall; (2) higher~~lower sales prices and volumes for most of our ~~major~~ products resulting from weaker global demand and planned and unplanned outages. The decreases in ~~improved margins;~~net income and ~~(3) lower transaction and integration-related costs associated with~~income from operations in the ~~integration of Axiall. These increases versus the prior-year period~~six months ended June 30, 2023 were partially offset by higher ~~interest expense~~caustic soda and chlorine sales prices and lower natural gas and feedstock costs. Net sales decreased by $1,932 million to $6,607 million in the six months ended June 30, 2023 from $8,539 million in the six months ended June 30, 2022, primarily due to ~~the increased debt balance~~lower sales prices and ~~the realized gain in the nine months ended September 30, 2016~~volumes for most of ~~$49.1 million from the previously held common stock of Axiall. Net sales for the nine months ended September 30, 2017 increased~~our products, partially offset by ~~$2,690.4 million compared to net sales for the nine months ended September 30, 2016, mainly due to higher sales contributed by Axiall, which was acquired on August 31, 2016, and~~ higher sales prices for our major products. Income from operations was $868.2 million for the nine months ended September 30, 2017 as compared to $428.8 million for the nine months ended September 30, 2016. The increase in income from operations was mainly a result of earnings contributed by Axiall, higher sales prices for our major productscaustic soda and ~~lower transaction and integration-related costs. Transaction and integration-related costs in the nine months ended September 30, 2017 were $22.9 million, or $0.12 per diluted share.~~chlorine.

RESULTS OF OPERATIONS

~~Third~~Second Quarter ~~2017~~2023 Compared with ~~Third~~Second Quarter ~~2016~~2022

Net Sales. Net sales ~~increased~~decreased by ~~$829.9~~$1,232 million, or ~~64.9%~~27%, to ~~$2,108.9~~$3,251 million in the ~~third~~second quarter of ~~2017~~2023 from ~~$1,279.0~~$4,483 million in the ~~third~~second quarter of ~~2016,~~2022, primarily ~~attributable~~due to lower sales ~~contributed~~prices and volumes for most of our products, partially offset by ~~Axiall, which was acquired on August 31, 2016,~~higher caustic soda and ~~higher~~chlorine sales prices. Average sales prices for the ~~third~~second quarter of ~~2017 increased~~2023 decreased by ~~12.1%~~15% as compared to the ~~third~~second quarter of ~~2016. Overall~~2022 due to continuing weaker demand for most of our products, partially offset by the higher sales prices for caustic soda and chlorine. Sales volumes ~~increased~~decreased by ~~52.8%~~13% in the second quarter of 2023 as compared to the ~~third~~second quarter of ~~2016, primarily attributable~~2022, substantially due to ~~sales contributed by Axiall, as compared to~~weaker global demand for most of our products across both the ~~prior-year period.~~segments.

Gross Profit. Gross profit margin percentage ~~increased~~was 20% in the second quarter of 2023 as compared to ~~23.6%~~32% in the second quarter of 2022. The decrease in gross profit margin was primarily due to lower prices and margins for most of our products, which was partially offset by higher prices for caustic soda as well as lower natural gas and feedstock costs.

Selling, General and Administrative Expenses. Selling, general and administrative expenses decreased by $7 million to $213 million in the second quarter of 2023 as compared to $220 million in the second quarter of 2022. This decrease was mainly due to lower selling expenses associated with the decline in net sales, partially offset by higher compensation expenses.

Amortization of Intangibles. Amortization expense decreased by $13 million to $30 million in the second quarter of 2023, from $43 million in the second quarter of 2022, primarily due to the end of useful lives of certain intangible assets within the Housing and Infrastructure Products segment during the third quarter of ~~2017 from 15.8%~~2022.

Restructuring, Transaction and Integration-Related Costs. Restructuring, transaction and integration-related costs decreased by $4 million to $3 million in the ~~third~~second quarter of ~~2016. The third~~2023, from $7 million in the second quarter of ~~2017 gross profit margin was higher~~2022, primarily due to decreased integration activities related to the businesses acquired in previous years.

Interest Expense. Interest expense decreased by $2 million to $42 million in the second quarter of 2023 from $44 million in the second quarter of 2022, primarily due to the repayment of $269 million of debt during 2022.

Other Income, Net. Other income, net increased by $6 million to $23 million in the second quarter of 2023 from $17 million in the second quarter of 2022, substantially due to higher interest income attributable to higher interest rates in the current period.

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Income Taxes. The effective income tax rate was 18.6% for the second quarter of 2023 as compared to 23.9% for the second quarter of 2022. The effective tax rate in the second quarter of 2023 was lower compared to the second quarter of 2022 primarily due to an increase in U.S. federal research and development credits available to the Company, the reduction of reserves for uncertain income tax positions as a result of a closed federal income tax audit and a decrease in state and foreign taxes.

Performance and Essential Materials Segment

Net Sales. Net sales for the Performance and Essential Materials segment decreased by $968 million, or 31%, to $2,136 million in the second quarter of 2023 from $3,104 million in the second quarter of 2022. Average sales prices for the Performance and Essential Materials segment decreased by 21% in the second quarter of 2023 as compared to the second quarter of 2022. Lower Performance Materials sales prices were primarily due to lower PVC resin, polyethylene and epoxy sales prices. These decreases were partially offset by higher caustic soda and chlorine sales prices in the Essential Materials businesses. Sales volumes for the Performance and Essential Materials segment decreased by 10% in the second quarter of 2023 as compared to the second quarter of 2022, primarily resulting from lower global demand for materials produced by the businesses in this segment.

Income from Operations. Income from operations for the Performance and Essential Materials segment decreased by $750 million to $215 million in the second quarter of 2023 from $965 million in the second quarter of 2022. This decrease in income from operations in the second quarter of 2023, as compared to the second quarter of 2022, was primarily due to lower PVC resin, polyethylene and epoxy sales prices and volumes, lower sales volumes for caustic soda and planned and unplanned outages, partially offset by higher caustic soda and chlorine sales prices and lower natural gas and feedstock costs.

Housing and Infrastructure Products Segment

Net Sales. Net sales for the Housing and Infrastructure Products segment decreased by $264 million, or 19%, to $1,115 million in the second quarter of 2023 from $1,379 million in the second quarter of 2022. Our businesses in the Housing and Infrastructure Products segment continued to experience lower demand in the second quarter of 2023 as compared to the second quarter of 2022, which resulted in an 18% decrease in sales volumes for the segment. Average sales prices for the Housing and Infrastructure Products segment slightly decreased in the second quarter of 2023 as compared to the second quarter of 2022, primarily due to lower PVC ~~resin contributed~~compounds sales prices, most of which was offset by ~~Axiall and an increase in~~higher sales prices for our ~~major products~~building products.

Income from Operations. Income from operations for the Housing and Infrastructure Products segment decreased by $46 million to $190 million in the second quarter of 2023 from $236 million in the second quarter of 2022. This decrease in income from operations in the second quarter of 2023, as compared to the ~~third~~second quarter of ~~2016.~~2022, was primarily due to lower sales volumes across all of our housing and infrastructure businesses and lower sales prices for PVC compounds, partially offset by higher sales prices for our building products as well as lower raw material costs.

Six Months Ended June 30, 2023 Compared with Six Months Ended June 30, 2022

Net Sales. Net sales decreased by $1,932 million, or 23%, to $6,607 million in the six months ended June 30, 2023 from $8,539 million in the six months ended June 30, 2022, primarily due to lower sales prices and volumes for most of our products, partially offset by higher caustic soda and chlorine sales prices. Average sales prices for the six months ended June 30, 2023 decreased by 12% as compared to the six months ended June 30, 2022 due to continuing weaker demand for most of our products, partially offset by higher sales prices for caustic soda and chlorine. Sales volumes decreased by 11% for the six months ended June 30, 2023 as compared to the six months ended June 30, 2022, substantially due to weaker global demand for many of our products across both the segments.

Gross Profit. Gross profit margin percentage was 22% in the six months ended June 30, 2023 as compared to 32% in the six months ended June 30, 2022. The ~~increase~~decrease in gross profit margin was primarily due to lower prices and margins for most of our products, which was partially offset by higher prices for caustic soda as well as lower natural gas and feedstock ~~costs and higher energy prices, as compared to the third quarter of 2016.~~costs.

Selling, General and Administrative ~~Expenses~~.Expenses. Selling, general and administrative expenses increased by ~~$52.9~~$15 million to ~~$125.6~~$435 million in the ~~third quarter of 2017~~six months ended June 30, 2023 as compared to ~~$72.7~~$420 million in the ~~third quarter of 2016.~~six months ended June 30, 2022. This increase was mainly due to higher compensation expenses and a full six months of selling, general, and administrative expenses in the current period for the epoxy business acquired in February 2022.

Amortization of ~~Axiall which were~~Intangibles. Amortization expense decreased by $24 million to $61 million in the six months ended June 30, 2023, as compared to $85 million in the six months ended June 30, 2022, primarily ~~comprised~~due to the end of ~~the amortization~~useful lives of certain intangible assets ~~acquired on acquisition.~~

~~Table of Contents~~

~~Transaction~~within the Housing and ~~Integration-related Costs. The transactions and integration-related costs were $6.7 million in~~Infrastructure Products segment during the third quarter of ~~2017 as compared to $82.8 million in the third quarter~~2022.

Table of ~~2016.~~Contents

Restructuring, Transaction and ~~integration-related costs were lower by $76.1 million in the third quarter of 2017 as compared to the third quarter of 2016 predominantly because significant~~Integration-Related Costs. Restructuring, transaction and integration-related costs ~~were incurred at the time of the Merger~~decreased by $12 million to $6 million in the ~~third quarter of 2016. The transaction and~~six months ended June 30, 2023, from $18 million in the six months ended June 30, 2022, primarily due to decreased integration ~~costs for the third quarter of 2017 primarily consisted of severance benefits provided to former Axiall employees in conjunction with the Merger and integration costs and consulting fees~~activity related to the ~~Merger. The transaction and integration-related costs for the third quarter of 2016 primarily consisted of severance benefits provided to former Axiall executives~~businesses acquired in conjunction with the Merger, including the conversion of Axiall restricted stock units into our restricted stock units, transitional service expenses for certain former Axiall employees, retention agreement costs and consulting and professional fees related to the Merger.previous years.

Interest ~~Expense~~.Expense. Interest expense ~~increased~~decreased by ~~$15.6~~$6 million to ~~$40.0~~$84 million in the ~~third quarter of 2017~~six months ended June 30, 2023 from ~~$24.4~~$90 million in the ~~third quarter of 2016~~six months ended June 30, 2022, primarily ~~as a result of higher average debt outstanding for the period as well as decreased capitalized interest on major capital projects in the third quarter of 2017 as compared~~due to the ~~third quarter~~repayment of ~~2016. The~~$269 million of debt ~~balance increased in August 2016 to finance the Merger. See "Liquidity and Capital Resources—Debt" below for further discussion on our indebtedness.~~during 2022.

Other Income, ~~(Expense),~~ Net. Other income, net ~~decreased~~increased by ~~$39.2~~$17 million to ~~income of $2.1~~$45 million in the ~~third quarter of 2017~~six months ended June 30, 2023 from ~~income of $41.3~~$28 million in the ~~third quarter of 2016. The decrease was primarily~~six months ended June 30, 2022, substantially due to higher interest income attributable to ~~the realized gain~~higher interest rates in the ~~third quarter of 2016 of $49.1 million from the previously held common stock of Axiall.~~current period.

Income Taxes.The effective income tax rate was ~~33.1%~~20.0% for the ~~third quarter of 2017.~~six months ended June 30, 2023 as compared to 23.7% for the six months ended June 30, 2022. The change in effective ~~income~~ tax rate ~~for~~in the ~~third quarter of 2017~~six months ended June 30, 2023 as compared to the six months ended June 30, 2022 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,~~an increase in U.S. federal research and development credits ~~and~~available to the ~~foreign earnings rate differential, partially offset by state income taxes. The effective tax rate, which was a benefit, was (10.3)%~~Company, the reduction of reserves for ~~the three months ended September 30, 2016. The effective~~uncertain income tax ~~rate for the third quarter~~positions as a result of ~~2016 was below the U.S.~~a closed federal ~~statutory rate of 35.0% primarily due to the benefit of~~income tax audit and a decrease in state tax credits, the domestic manufacturing deduction, depletion deductions, income attributable to noncontrolling interests, the non-recognition of tax related to the gain recognized on previously held outstanding shares of common stock of Axiall, the benefit in prior years' and ~~current-year tax credits for increased research~~foreign taxes.

Performance and development expenditures, adjustments related to prior years' tax returns as filed and the foreign earnings rate differential, partially offset by state income taxes and nondeductible transaction costs related to the Merger.

~~Olefins~~Essential Materials Segment

Net ~~Sales~~.Sales. Net sales for the ~~Olefins~~Performance and Essential Materials segment ~~increased~~decreased by ~~$4.8~~$1,451 million, or ~~1.0%~~24%, to ~~$502.2~~$4,485 million in the ~~third quarter of 2017~~six months ended June 30, 2023 from ~~$497.4~~$5,936 million in the ~~third quarter of 2016, primarily due to higher sales prices. Average sales volumes for the Olefins segment decreased by 0.8% in the third quarter of 2017 as compared to the third quarter of 2016.~~six months ended June 30, 2022. Average sales prices for the ~~Olefins~~Performance and Essential Materials segment ~~increased~~decreased by ~~1.8%~~17% in the ~~third quarter of 2017~~six months ended June 30, 2023 as compared to the ~~third quarter of 2016.~~six months ended June 30, 2022. Lower Performance Materials sales prices were primarily due to lower PVC resin, polyethylene and epoxy sales prices. These decreases were partially offset by higher caustic soda and chlorine sales prices in the Essential Materials businesses. Sales volumes for the Performance and Essential Materials segment decreased by 8% in the six months ended June 30, 2023 as compared to the six months ended June 30, 2022, primarily resulting from lower global demand for our products across our businesses under this segment.

Income from Operations. Income from operations for the ~~Olefins~~Performance and Essential Materials segment ~~increased~~decreased by ~~$46.9~~$1,226 million to ~~$165.4~~$618 million in the ~~third quarter of 2017~~six months ended June 30, 2023 from ~~$118.5~~$1,844 million in the ~~third quarter of 2016.~~six months ended June 30, 2022. This ~~increase was mainly attributable to higher sales prices and higher overall operating rates. These increases were partially offset by higher feedstock and energy costs. Trading activity~~decrease in income from operations in the ~~third quarter of 2017 resulted in a gain of $6.8 million as compared to a loss of $7.8 million in the third quarter of 2016.~~

~~Vinyls Segment~~

~~Net Sales~~. Net sales for the Vinyls segment increased by $824.9 million, or 105.5%, to $1,606.6 million in the third quarter of 2017 from $781.7 million in the third quarter of 2016. This increase was mainly attributable to higher sales contributed by Axiall and higher sales prices for our major products. Net sales for the threesix months ended ~~September~~June 30, ~~2017 were higher~~2023, as compared to the prior-year period primarily because a full three months of Axiall's operations were included as compared to only one month of Axiall's operations included in the prior-year period. Average sales prices for the Vinyls segment increased by 18.7% in the third quarter of 2017 as compared to the third quarter of 2016. Average sales volumes for the Vinyls segment increased by 86.8% in the third quarter of 2017 as compared to the third quarter of 2016, primarily attributable to sales contributed by Axiall, as compared to the prior-year period.

~~Income from Operations.~~ Income from operations for the Vinyls segment increased by $194.3 million to $216.5 million in the third quarter of 2017 from $22.2 million in the third quarter of 2016. This increase was mainly attributable to earnings contributed by Axiall and higher sales prices for our major products. These increases were partially offset by higher energy prices during the quarter ended September 30, 2017, as compared to the prior-year period.

~~Table of Contents~~

~~Nine Months Ended September 30, 2017 Compared with Nine Months Ended September 30, 2016~~

~~Net Sales. Net sales increased by $2,690.4 million, or 80.5%, to $6,030.7 million for the nine~~six months ended ~~September~~June 30, ~~2017 from $3,340.3 million for the nine months ended September 30, 2016, primarily attributable to higher sales contributed by Axiall, which~~2022, was acquired on August 31, 2016, and higher sales prices for our major products, as compared to the nine months ended September 30, 2016. Average sales prices for the nine months ended September 30, 2017 increased by 14.1% as compared to the nine months ended September 30, 2016. Overall sales volumes increased by 66.4% as compared to the nine months ended September 30, 2016, primarily attributable to sales contributed by Axiall, as compared to the prior-year period.

~~Gross Profit~~. Gross profit margin percentage increased to 21.1% for the nine months ended September 30, 2017 from 20.9% for the nine months ended September 30, 2016. The gross profit margin for the nine months ended September 30, 2017 was slightly higher primarily due to ~~higher~~lower PVC resin, polyethylene and epoxy sales prices and volumes, lower sales volumes for caustic soda and ~~PVC resin contributed~~planned and unplanned outages, partially offset by ~~Axiall~~higher caustic soda and ~~higher~~chlorine sales prices and lower natural gas and feedstock costs.

Housing and Infrastructure Products Segment

Net Sales. Net sales for ~~our major products,~~the Housing and Infrastructure Products segment decreased by $481 million, or 18%, to $2,122 million in the six months ended June 30, 2023 from $2,603 million in the six months ended June 30, 2022. Our businesses in the Housing and Infrastructure Products segment experienced lower demand in the six months ended June 30, 2023 as compared to the ~~nine~~six months ended ~~September~~June 30, ~~2016. These increases were substantially offset by~~2022, which resulted in a ~~proportionately larger~~19% decrease in sales volume for the ~~Vinyls~~segment. Average sales prices for the Housing and Infrastructure Products segment increased slightly by 1% in the six months ended June 30, 2023, as compared to the ~~Olefins segment, Vinyls segment industry margins were lower as compared to those of the Olefins segment industry for the nine~~six months ended ~~September~~June 30, ~~2017 and the nine months ended September 30, 2016.~~

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

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

~~Interest Expense~~. Interest expense increased by $81.8 million to $118.8 million for the nine months ended September 30, 2017 from $37.0 million for the nine months ended September 30, 2016 primarily as a result of higher average debt outstanding for the period as well as decreased capitalized interest on major capital projects in the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016. The debt balance increased in August 2016 to finance the Merger. See "Liquidity and Capital Resources—Debt" below for further discussion on our indebtedness.

~~Other Income, Net~~. Other income, net decreased by $45.5 million to $6.6 million in the nine months ended September 30, 2017 from $52.1 million in the nine months ended September 30, 2016. The decrease was mainly attributable to the realized gain in the 2016 period of $49.1 million from the previously held common stock of Axiall.

~~Income Taxes.~~ The effective income tax rate was 30.8% for the nine months ended September 30, 2017. The effective income tax rate for the nine months ended September 30, 2017 was below the U.S. federal statutory rate of 35.0% primarily due to certain discrete adjustments, a higher domestic manufacturing deduction, depletion deductions, income attributable to noncontrolling interests, research and development credits and the foreign earnings rate differential, partially offset by state income taxes. The effective income tax rate was 29.1% for the nine months ended September 30, 2016. The effective income tax rate for the nine months ended September 30, 2016 was below the U.S. federal statutory rate of 35.0% primarily due to the benefit of state tax credits, the domestic manufacturing deduction, depletion deductions, income attributable to noncontrolling interests, the non-recognition of tax related to the gain recognized on previously held outstanding shares of common stock of Axiall, the benefit in prior years' and current-year tax credits for increased research and development expenditures, adjustments related to prior years' tax returns as filed and the foreign earnings rate differential, partially offset by state income taxes and nondeductible transaction costs related to the Merger.

~~Table of Contents~~

~~Olefins Segment~~

~~Net Sales~~. Net sales for the Olefins segment increased by $111.6 million, or 7.8%, to $1,534.5 million in the nine months ended September 30, 2017 from $1,422.9 million in the nine months ended September 30, 2016,2022, primarily due to higher sales prices for our ~~major products. Average~~building products and PVC pipe and fittings, most of which was offset by lower PVC compounds sales prices for the Olefins segment increased by 9.2% in the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016. Average sales volumes for the Olefins segment decreased by 1.3% in the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016.prices.

Income from ~~Operations~~.Operations. Income from operations for the ~~Olefins~~Housing and Infrastructure Products segment ~~increased~~decreased by ~~$80.2~~$88 million to ~~$488.5~~$333 million in the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2023 from ~~$408.3~~$421 million in the ~~nine~~six months ended ~~September~~June 30, ~~2016.~~2022. This ~~increase~~decrease in income from operations in the six months ended June 30, 2023, as compared to the six months ended June 30, 2022, was ~~mainly attributable to higher olefins integrated product margins,~~ primarily due to lower sales volumes across all of our housing and infrastructure businesses and lower sales prices for PVC compounds, partially offset by higher sales prices for our ~~major~~building products ~~higher operating rates~~ and ~~lower costs associated with turnarounds~~PVC pipe and outages as compared to the prior-year period. These increases were partially offset by higher energy prices. The nine months ended September 30, 2016 were negatively impacted by the planned turnaround and expansion of the Lake Charles Petro 1 ethylene unit along with other unplanned outages. Trading activity in the nine months ended September 30, 2017 resulted in a loss of $2.8 million as compared to a gain of $7.8 million in the nine months ended September 30, 2016.

~~Vinyls Segment~~

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

~~Income from Operations.~~ Income from operations for the Vinyls segment increased by $294.7 million to $431.3 million in the nine months ended September 30, 2017 from $136.6 million in the nine months ended September 30, 2016. This increase was mainly attributable to earnings contributed by Axiall and higher sales prices and volumes for our major products. These increases were partially offset by unabsorbed fixed manufacturing costs and other costs associated with the planned turnaround and expansion at the Calvert City facility and other planned and unplanned turnaroundsfittings as well as ~~higher energy prices during the nine months ended September 30, 2017, as compared to the prior-year period.~~lower raw material costs.

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CASH FLOW DISCUSSION FOR THE ~~NINE~~SIX MONTHS ENDED ~~SEPTEMBER~~JUNE 30, ~~2017~~2023 AND ~~2016~~2022

Cash Flows

Operating Activities

Operating activities provided cash of ~~$962.7~~$1,067 million in the first ~~nine~~six months of ~~2017~~2023 compared to cash provided by operating activities of ~~$544.2~~$1,613 million in the first ~~nine~~six months of ~~2016.~~2022. The ~~$418.5~~$546 million ~~increase~~decrease in cash flows from operating activities was mainly due to ~~an increase~~a decrease in income from operations, ~~and lower turnaround related expenditures during the nine months ended September 30, 2017 as compared to the first nine months of 2016,~~ partially offset by ~~an increase~~favorable changes in working capital requirements. The increase in net income from operations for the first nine months of 2017 was mainly as a result of higher sales prices and volumes, resulting in a higher margin, and earnings contributed by Axiall, which was acquired on August 31, 2016.capital. Changes in components of working capital, which we define for purposes of this cash flow discussion as accounts receivable, ~~net,~~ inventories, prepaid expenses and other current assets, less accounts payable and accrued and other liabilities, ~~used~~provided cash of ~~$26.2~~$30 million in the first ~~nine~~six months of ~~2017,~~2023, compared to ~~$10.5~~$577 million of cash ~~provided~~used in the first ~~nine~~six months of ~~2016, an unfavorable~~2022, a favorable change of ~~$36.7~~$607 million. The favorable change in the first six months of 2023 was ~~mainly~~substantially driven by ~~an unfavorable change~~the favorable changes in accounts receivable ~~partially offset by favorable changes~~and inventories, primarily due to the lower operating activities in ~~inventory, prepaid and other current assets and accounts payable.~~

~~Table~~the first six months of ~~Contents~~

2023, as compared to the first six months of 2022.

Investing Activities

Net cash used for investing activities ~~during~~in the first ~~nine~~six months of ~~2017~~2023 was ~~$459.4~~$499 million as compared to net cash used for investing activities of ~~$2,389.1~~$1,803 million in the first ~~nine~~six months of ~~2016. In~~2022. The decrease in investing activities in the first ~~nine~~six months of ~~2016 we used $2,437.8 million, net~~2023 as compared to first six months of ~~cash acquired,~~2022, was primarily because of the epoxy acquisition in February 2022 for ~~the acquisition of Axiall.~~$1,163 million. Capital expenditures were ~~$414.3~~$507 million in the first ~~nine~~six months of ~~2017~~2023 as compared to ~~$467.3~~$493 million in the first ~~nine~~six months of ~~2016.~~2022. Capital expenditures in the first ~~nine~~six months of ~~2017~~2023 and 2022 were primarily incurred on the upgrade and expansion of OpCo's Calvert City ethylene plant at our Calvert City site. Capital expenditures in the first nine months of 2016 were primarily incurred on the upgrade and expansion of OpCo's Petro 1 ethylene unit at our Lake Charles site. The remaining capital expenditures in the first nine months of 2017 and 2016 primarily related to projects to improve production capacity or reduce costs, maintenance and safety projects and environmental projects at our various facilities. In addition, we spent $47.0 million in the nine months of 2017 related to our contribution to Lotte Chemical USA Corporation to fund the construction costs of the ethylene plant. Please see "Liquidity and Capital Resources—Liquidity and Financing Arrangements" below for further discussion. Investing activities in the first nine months of 2016 included purchases of securities totaling $138.4 million. We also received aggregate proceeds of $662.9 million from the sales and maturities of our investments in the first nine months of 2016.

Financing Activities

Net cash used for financing activities during the first ~~nine~~six months of ~~2017~~2023 was ~~$306.4~~$131 million as compared to net cash ~~provided by~~used for financing activities of ~~$1,560.5~~$377 million in the first ~~nine~~six months of 2016. We used $150.0 million and $550.0 million, respectively, for the full repayment of our term loan and the partial repayment of the Credit Agreement in the first nine months of 2017. These uses were partially offset by a drawdown under the Credit Agreement of $225.0 million in the first nine months of 2017 and net proceeds of $110.7 million from the issuance of WLKP common units as a result of its secondary offering in September 2017. During the first nine months of 2017, the restriction on $154.0 million of cash was also removed as a result of the repayment of our term loan.2022. The ~~remaining~~ activities during the first ~~nine~~six months of ~~2017~~2023 were primarily related to the ~~$76.5~~$92 million payment of cash dividends, the ~~$20.8~~$24 million payment of cash distributions to noncontrolling interests and ~~the $0.4 million payment~~repurchases of ~~debt issuance costs. In addition, we repaid $6.7 million~~shares of ~~Huasu's short-term notes payable to banks in connection with the payment~~our common stock for an aggregate amount of ~~suppliers through letters of credit, partially offset by $5.9 million of proceeds from the issuance of such notes payable.~~$23 million. The financing activities during the first nine months of 2016 were mainly related to the net proceeds from the issuance of our senior notes and the proceeds from our term loan of $1,428.5 in the aggregate and the drawdown under the Credit Agreement of $600.0 million, partially offset by the $125.0 million partial repayment of the Credit Agreement in the first ~~nine~~six months of ~~2016. The remaining activity during the first nine months of 2016 was~~2022 were primarily related to the ~~$71.9~~$77 million payment of cash dividends, the ~~$12.3~~$24 million payment of cash distributions to noncontrolling interests, the ~~$35.2~~redemption of $250 million ~~payment~~aggregate principal amount of ~~debt issuance costs~~the 3.60% Senior Notes due 2022 and ~~the $67.4 million of cash used for~~ repurchases ~~of shares~~ of our common ~~stock. In addition, we repaid $10.6 million~~stock of Huasu's short-term notes payable to banks in connection with the payment of suppliers through letters of credit, partially offset by $5.6 million of proceeds from the issuance of such notes payable in the first nine months of 2016.$31 million.

LIQUIDITY AND CAPITAL RESOURCES

Liquidity and Financing Arrangements

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

In November 2014, our Board of Directors authorized a ~~$250.0~~$250 million ~~share~~stock repurchase program (the "2014 Program"). In November 2015, our Board of Directors approved the expansion of the 2014 Program by an additional ~~$150.0~~$150 million. In August 2018, our Board of Directors approved the further expansion of the existing 2014 Program by an additional $150 million. In August 2022, our Board of Directors approved the further expansion of the existing 2014 Program by an additional $500 million. As of ~~September~~June 30, ~~2017,~~2023, we had repurchased ~~4,193,598~~8,722,550 shares of our common stock for an aggregate purchase price of approximately ~~$228.7~~$574 million under the 2014 Program. During the six months ended June 30, 2023, we repurchased 9,552 shares of our common stock under the 2014 Program. Purchases under the 2014 Program may be made either through the open market or in privately negotiated transactions. Decisions regarding the amount and the timing of purchases under the 2014 Program will be influenced by our cash on hand, our cash ~~flow~~flows from operations, general market conditions and other factors. The 2014 Program may be discontinued by our Board of Directors at any time.

~~In connection~~On October 4, 2018, Westlake Chemical Partners LP ("Westlake Partners") and Westlake Chemical Partners GP LLC, the general partner of Westlake Partners, entered into an Equity Distribution Agreement with ~~the Merger, we became party~~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 ~~a joint venture investment with Lotte Chemical USA Corporation~~offer and sell WLK Partners common units, from time to build an ethylene facility, LACC, LLC ("LACC"). The ethylene facility is located adjacent to our vinyls facility in Lake Charles. Pursuant to the contribution and subscription agreement, we agreed to make a maximum capital commitment to LACC oftime, up to ~~$225.0 million~~an aggregate offering amount of $50 million. This Equity Distribution Agreement was amended on February 28, 2020 to ~~fund the construction costs~~reference a new shelf registration and subsequent renewals thereof for utilization under this agreement. No common units have been issued under this program as of 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 SeptemberJune 30, ~~2017, we had funded approximately $106.4 million of our portion of the construction costs of the ethylene plant.~~

2023.

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

Cash and Cash Equivalents

As of ~~September~~June 30, ~~2017~~,2023, our cash and cash equivalents totaled ~~$678.2~~$2,677 million. In addition ~~we have the Credit Agreement~~to our cash and cash equivalents, our credit agreement is available ~~to supplement cash if~~as needed, as described under "Debt" below.

Debt

As of ~~September~~June 30, ~~2017~~,2023, the carrying value of our long-term indebtedness ~~including current maturities,~~ totaled $3.3 billion, consisting of $100.0 million of 6 ½% senior notes due 2029, $250.0 million of 6 ¾% senior notes due 2032, $89.0 million of 6 ½% senior notes due 2035 (the "6 ½% 2035 GO Zone Senior Notes"), $65.0 million of 6 ½% senior notes due 2035 (the "6 ½% 2035 IKE Zone Senior Notes") (collectively, the "Senior Notes"), $624.8 million aggregate principal amount of 4.625% senior notes due 2021 (the "4.625% 2021 Senior Notes"), $63.2 million aggregate principal amount of the 4.625% senior notes due 2021 (the "4.625% Subsidiary 2021 Senior Notes"), $250.0 million principal amount of 3.60% senior notes due 2022 (the "3.6% senior notes due 2022"), $433.8 million aggregate principal amount of 4.875% senior notes due 2023 (the "4.875% 2023 Senior Notes"), $16.2 million aggregate principal amount of the 4.875% senior notes due 2023 (the "4.875% Subsidiary 2023 Senior Notes"), $750.0 million aggregate principal amount of 3.60% senior notes due 2026 (the "3.60% 2026 Senior Notes"), $700.0 million aggregate principal amount of 5.0% senior notes due 2046 (the "5.0% 2046 Senior Notes") and a $10.9 million loan from the proceeds of tax-exempt waste disposal revenue bonds (supported by an $11.3 million letter of credit), plus unamortized premium net of unamortized discount and debt issuance costs of $3.5$4,894 million. ~~The 6 ½% senior notes due 2029, the 6 ¾% senior notes due 2032, the 6 ½% 2035 GO Zone Senior Notes and the 6 ½% 2035 IKE Zone Senior Notes evidence and secure our obligations~~See Note 8 to the ~~Louisiana Local Government Environmental Facility and Development Authority (the "Authority"),~~consolidated financial statements appearing elsewhere in this Form 10-Q for a ~~political subdivision~~discussion of our long-term indebtedness. Defined terms used in this section have the ~~State of Louisiana, under four loan agreements relating~~definitions assigned to such terms in Note 8 to the ~~issuance~~consolidated financial statements included in Item 1 of ~~$100.0 million, $250.0 million, $89.0 million and $65.0 million aggregate principal amount~~Part I of ~~the Authority's tax-exempt revenue bonds, respectively. As of~~ ~~September 30, 2017, debt outstanding under the tax-exempt waste disposal revenue bonds bore interest at a variable rate. As of~~ ~~September 30, 2017~~, we were in compliance with all of the covenants with respect to the Senior Notes, the 4,625% 2021 Senior Notes, the 4.625% Subsidiary 2021 Senior Notes, the 3.60% senior notes due 2022, the 4.875% 2023 Senior Notes, the 4.875% Subsidiary 2023 Senior Notes, the 3.60% 2026 Senior Notes, the 5.0% 2046 Senior Notes, the Credit Agreement and our waste disposal revenue bonds.this Form 10-Q.

Our ability to make payments on our indebtedness and to fund planned capital expenditures will depend on our ability to generate cash in the future, which is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control. Based on our current level of operations and unless we were to undertake a new expansion or large acquisition, we believe our cash ~~flow~~flows from operations, available cash and available borrowings under the ~~Credit Agreement~~credit agreement will be adequate to meet our normal operating needs for the foreseeable future.

~~Term Loan~~

~~On August 10, 2016, our indirect subsidiary, Westlake International Holdings II C.V., a limited partnership organized under the laws~~Our long-term debt consisted of the ~~Netherlands (the "CV Borrower"), entered into a credit agreement with Bank~~following as of ~~America, N.A., as agent and lender, providing~~June 30, 2023:

Principal Amount
(in millions)

Debt Issuance Date

Maturity Date

Par Call Date

Optional Redemption Terms and Other Matters

0.875% senior notes due 2024 (the "0.875% 2024 Senior Notes")

300

August 2021

August 2024

August 15, 2022

(1)

3.60% senior notes due 2026 (the "3.60% 2026 Senior Notes")

750

August 2016

August 2026

May 15, 2026

(1) (4)

Loan related to tax-exempt waste disposal revenue bonds due 2027

December 1997

December 2027

(6)

1.625% €700 million senior notes due 2029 (the "1.625% 2029 Senior Notes")

762

July 2019

July 2029

April 17, 2029

(1) (2)

3.375% senior notes due 2030 (the "3.375% 2030 Senior Notes")

300

June 2020

June 2030

March 15, 2030

(1) (3)

3.50% senior notes due 2032 (the "3.50% 2032 tax-exempt GO Zone Refunding Senior Notes")

250

November 2017

November 2032

November 1, 2027

(5)

2.875% senior notes due 2041 (the "2.875% 2041 Senior Notes")

350

August 2021

August 2041

February 15, 2041

(1) (3)

5.00% senior notes due 2046 (the "5.00% 2046 Senior Notes")

700

August 2016

August 2046

February 15, 2046

(1) (4)

4.375% senior notes due 2047 (the "4.375% 2047 Senior Notes")

500

November 2017

November 2047

May 15, 2047

(1) (3)

3.125% senior notes due 2051 (the "3.125% 2051 Senior Notes")

600

August 2021

August 2051

February 15, 2051

(1) (3)

3.375% senior notes due 2061 (the "3.375% 2061 Senior Notes")

450

August 2021

August 2061

February 15, 2061

(1) (3)

Term loan 2026 (the "2026 Term Loan")

March 2021

March 2026

(7)

Total long-term debt

4,987

(1) At our option, we may redeem the ~~CV Borrower with a $150.0 million term loan facility. The term loan facility had a maturity~~notes at any time on or after the specified par call date ~~of March 31, 2017. The term loan was fully repaid in January 2017. The loans thereunder bore interest~~ at a ~~floating interest rate~~redemption price equal to ~~LIBOR~~100% of the principal amount of the notes being redeemed plus ~~2.0% per annum, payable in arrears on the last day of each three-month period following the date of funding~~accrued and ~~at maturity.~~

unpaid interest.

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~~Credit Agreement~~

~~On August 23, 2016,~~(2) At our option, we ~~and certain~~may redeem the notes at any time prior to the specified par call date at a redemption price equal to the greater of ~~our subsidiaries entered into an unsecured revolving credit facility (the "Credit Agreement"), by and among us,~~(i) 100% of the other borrowers and guarantors referred to therein, the lenders from time to time party thereto (collectively, the "Lenders"), the issuing banks party thereto and JPMorgan Chase Bank, National Association, as Administrative Agent. Under the Credit Agreement, the Lenders have committed to provide an unsecured five-year revolving credit facility in an aggregate principal amount of ~~up to $1.0 billion. The Credit Agreement replaced our $400.0 million senior secured third amended~~the notes being redeemed plus accrued and ~~restated credit facility, dated~~unpaid interest and (ii) the sum of the present values of the remaining scheduled payments on the notes being redeemed that would be due if the notes matured on the specified par call date (not including any portion of such payments of interest accrued as of ~~July 17, 2014 (the "Prior ABL Credit Agreement")~~the redemption date), bydiscounted to the redemption date on an annual basis at the applicable comparable government bond rate plus 30 basis points plus accrued and ~~among us,~~unpaid interest.

(3) At our option, we may redeem the ~~financial institutions party thereto, as lenders, Bank~~notes at any time prior to the specified par call date at a redemption price equal to the greater of ~~America, N.A.~~(i) 100% of the principal amount of the notes being redeemed plus accrued and unpaid interest and (ii) the sum of the present values of the remaining scheduled payments on the notes being redeemed that would be due if the notes matured on the specified par call date (excluding accrued and unpaid interest to the redemption date), as agent, and us and certain of our subsidiaries, as borrowers. The Credit Agreement includes a $150.0 million sub-limit for letters of credit, and any outstanding letters of credit will be deducted from availability underdiscounted to the ~~facility. The Credit Agreement also provides for a discretionary $50.0 million commitment for swing-line loans to be provided~~redemption date on a ~~same-day basis. We~~semi-annual basis at the treasury rate plus 20 to 40 basis points plus accrued and unpaid interest.

(4) At our option, we may ~~also increase~~redeem the ~~size~~notes at any time prior to the specified par call date at a redemption price equal to the greater of (i) 100% of the ~~facility, in increments~~principal amount of ~~at least $25.0 million, up to a maximum~~the notes being redeemed plus accrued and unpaid interest and (ii) the sum of ~~$500.0 million, subject to certain conditions~~the present values of the remaining scheduled payments on the notes being redeemed (excluding accrued and ~~if certain Lenders agree to commit to such an increase. On October 14, 2016, certain domestic subsidiaries of Axiall and Lagoon LLC were added as subsidiary guarantors~~unpaid interest to the ~~Credit Agreement.~~redemption date), discounted to the redemption date on a semi-annual basis at the treasury rate plus 35 to 45 basis points, plus accrued and unpaid interest.

~~At September 30,~~(5) In the event of a redemption of certain bonds (the "GO Zone Bonds") issued by the Louisiana Local Government Environmental Facility and Development Authority (the "Authority") in 2017, we ~~had no borrowings outstanding under the Credit Agreement. Borrowings under the Credit Agreement~~ will ~~bear interest, at our option, at either (a) LIBOR plus a spread ranging from 1.0%~~redeem notes equal in principal amount to 1.75% that will vary depending on our credit rating or (b) Alternate Base Rate plus a spread ranging from 0.0% to 0.75% that will vary depending on our credit rating. The Credit Agreement also requires an undrawn commitment fee ranging from 0.10% to 0.25% that will vary depending on our credit rating. The Credit Agreement matures on August 23, 2021. As of September 30, 2017, we had outstanding letters of credit totaling $45.4 million and borrowing availability of $954.6 million under the Credit Agreement.

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

~~GO Zone and IKE Zone Bonds~~

As of September 30, 2017, we had drawn all the proceeds from the issuance of the 6 ½% senior notes due 2029, 6 ¾% senior notes due 2032, 6 ½% 2035 GO Zone Senior Notes and 6 ½% 2035 IKE Zone Senior Notes. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Debt" in the 2016 Form 10-K and below for more information on the 6 ½% senior notes due 2029, the 6 ¾% senior notes due 2032, the 6 ½% 2035 GO Zone Senior Notes and the 6 ½% 2035 IKE Zone Senior Notes. All domestic restricted subsidiaries that guarantee other debt of ours or of another guarantor of the Senior Notes in excess of $5.0 million are guarantors of these notes.

~~The $250.0 million of 6 ¾% senior notes due November 1, 2032 under~~ the GO Zone ~~Act was issued by~~Bonds to be redeemed at a redemption price equal to the ~~Authority in December 2007.~~redemption price of the GO Zone Bonds to be redeemed, plus accrued interest to the redemption date. The ~~bonds were~~GO Zone Bonds are subject to optional redemption by the Authority upon the direction of the Company at any time on or after November 1, ~~2017~~2027, for ~~100.0%~~100% of the principal amount plus accrued ~~interest. During September 2017, we directed the Authority to optionally redeem in full $250.0 million 6 ¾% senior notes on November 1, 2017 at a redemption price of par, plus accrued and unpaid~~ interest ~~if any,~~ to the redemption date. The Authority is required to cause the GO Zone Bonds trustee to surrender the 6 ¾% 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.

~~Table of Contents~~

The indentures governing the Senior Notes contain customary covenants and events of default. Accordingly, these agreements generally impose significant operating and financial restrictions on us. These restrictions, among other things, provide limitations on incurrence of additional indebtedness, the payment of dividends, certain investments and acquisitions and sales of assets. However, the effectiveness of certain of these restrictions is currently suspended because the Senior Notes are currently rated investment grade by at least two nationally recognized credit rating agencies. The most significant of these provisions, if it were currently effective, would restrict us from incurring additional debt, except specified permitted debt (including borrowings under our credit facility), when our fixed charge coverage ratio is below 2.0:1. These limitations are subject to a number of important qualifications and exceptions, including, without limitation, an exception for the payment of our regular quarterly dividend of up to $0.10 per share. If the restrictions were currently effective, distributions in excess of $100.0 million would not be allowed unless, after giving pro forma effect to the distribution, our fixed charge coverage ratio is at least 2.0:1 and such payment, together with the aggregate amount of all other distributions after January 13, 2006, is less than the sum of 50.0% of our consolidated net income for the period from October 1, 2003 to the end of the most recent quarter for which consolidated financial statements have been filed, plus 100.0% of net cash proceeds received after October 1, 2003 as a contribution to our common equity capital or from the issuance or sale of certain securities, plus several other adjustments.

~~3.60% Senior Notes due 2022~~

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

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

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

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

All of our domestic subsidiaries that guarantee other indebtedness of ours or of another guarantor of the 3.60% 2026 Senior Notes or the 5.0% 2046 Senior Notes in excess of $40.0 million are guarantors of the 3.60% 2026 Senior Notes and the 5.0% 2046 Senior Notes. The indenture governing the 3.60% 2026 Senior Notes and the 5.0% 2046 Senior Notes contains customary events of default and covenants that will restrict our and certain of our subsidiaries' ability to (1) incur certain secured indebtedness, (2) engage in certain sale-leaseback transactions and (3) consolidate, merge or transfer all or substantially all of our or their assets. References to the 3.60% 2026 Senior Notes and the 5.0% 2046 Senior Notes in this paragraph refer to the 3.60% 2026 Senior Notes and the 5.0% 2046 Senior Notes that were exchanged in the exchange offers described in the preceding paragraph as well as the 3.60% 2026 Senior Notes that were not exchanged in such exchange offers.

~~Table of Contents~~

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

In September 2016, we issued $624.8 million aggregate principal amount of the 4.625% 2021 Senior Notes and $433.8 million aggregate principal amount of the 4.875% 2023 Senior Notes upon the closing of our offers to exchange any and all of the $688.0 million aggregate principal amount of the outstanding 4.625% senior notes due 2021 issued by Eagle Spinco Inc., a wholly owned subsidiary of Axiall, and the $450.0 million aggregate principal amount of the outstanding 4.875% senior notes due 2023 issued by Axiall. In connection with the private offering and issuance of the 4.625% 2021 Senior Notes and the 4.875% Senior Notes, we entered into a registration rights agreement pursuant to which, among other things, we agreed to file with the SEC a registration statement relating to an offer to exchange the 4.625% 2021 Senior Notes and the 4.875% 2023 Senior Notes for new SEC registered notes (the "2021 and 2023 Exchange Notes") containing terms substantially identical to the 4.625% 2021 Senior Notes and the 4.875% 2023 Senior Notes except that the transfer restrictions on the 2021 and 2023 Exchange Notes will be modified or eliminated and there will be no registration rights). On March 27, 2017, we commenced registered exchange offers to exchange the 4.625% 2021 Senior Notes and the 4.875% 2023 Senior Notes for new notes that are identical in all material respects to the 4.625% 2021 Senior Notes and the 4.875% 2023 Senior Notes, except that the offer and issuance of the new notes have been registered under the Securities Act. The exchange offers expired on April 24, 2017, and 100.0% of the 4.625% 2021 Senior Notes and 100.0% of the 4.875% 2023 Senior Notes were exchanged.

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

~~Revenue Bonds~~

In December 1997, we entered into a loan agreement with a public trust established for public purposes for the benefit of the Parish of Calcasieu, Louisiana. The public trust issued $10.9 million principal amount of tax-exempt waste disposal revenue bonds in order to finance our construction of waste disposal facilities for an ethylene plant.(6) The waste disposal revenue bonds expire in December 2027 and are subject to redemption and mandatory tender for purchase prior to maturity under certain conditions. Interest on the waste disposal revenue bonds accrues at a rate determined by a remarketing agent and is payable quarterly. The interest rate on the waste disposal revenue bonds at June 30, 2023 was 4.30%.

(7) The 2026 Term Loan has a 5-year maturity and include a government rate subsidy. The interest rate on the 2026 Term Loan as of June 30, 2023 was 0.95%.

The holders of the 0.875% 2024 Senior Notes, the 3.60% 2026 Senior Notes, the 1.625% 2029 Senior Notes, the 3.375% 2030 Senior Notes, the 3.50% 2032 tax-exempt GO Zone Refunding Senior Notes, the 2.875% 2041 Senior Notes, the 5.00% 2046 Senior Notes, the 4.375% 2047 Senior Notes, the 3.125% 2051 Senior Notes and the 3.375% 2061 Senior Notes may require us to repurchase the notes at a price equal to 101% of their principal amount, plus accrued and unpaid interest to, but not including, the date of repurchase, upon the occurrence of both a "change of control" and, within 60 days of such change of control, a "below investment grade rating event" (as such terms are defined in the respective indentures governing these notes).

The indenture governing the 0.875% 2024 Senior Notes, the 3.60% 2026 Senior Notes, the 1.625% 2029 Senior Notes, the 3.375% 2030 Senior Notes, the 3.50% 2032 tax-exempt GO Zone Refunding Senior Notes, the 2.875% 2041 Senior Notes, the 5.00% 2046 Senior Notes, the 4.375% 2047 Senior Notes, the 3.125% 2051 Senior Notes, and the 3.375% 2061 Senior Notes contains customary events of default and covenants that, among other things and subject to certain exceptions, restrict us and certain of our subsidiaries' ability to (1) incur certain secured indebtedness, (2) engage in certain sale and leaseback transactions and (3) consolidate, merge or transfer all or substantially all of our assets.

As of June 30, 2023, we were in compliance with all of our long-term debt covenants.

Credit Agreement

On June 9, 2022, we entered into a new $1.5 billion revolving credit facility that is scheduled to mature on June 9, 2027 (the "Credit Agreement") and, in connection therewith, terminated our then existing revolving credit agreement. The Credit Agreement bears interest at either (a) Adjusted Term SOFR (as defined in the Credit Agreement) plus a margin ranging from 1.00% to 1.625% per annum or (b) Alternate Base Rate (as defined in the Credit Agreement) plus a margin ranging from 0.00% to 0.625% per annum, in each case depending on the credit rating of the Company. The Credit Agreement contains certain affirmative and negative covenants, including a quarterly total leverage ratio financial maintenance covenant. As of June 30, 2023, we were in compliance with the total leverage ratio financial maintenance covenant.

Table of Contents

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 to lend thereunder and payments of any outstanding amounts thereunder could be accelerated by the lenders. None of our subsidiaries are required to guarantee our obligations under the Credit Agreement.

The Credit Agreement includes a $150 million 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 million commitment for swingline loans to be provided on a same-day basis. We may also increase the size of the facility, in increments of at least $25 million, up to a maximum of $500 million, subject to certain conditions and if certain lenders agree to commit to such an increase.

Westlake Chemical Partners LP Credit Arrangements

Our subsidiary, Westlake Chemical Finance Corporation, is the lender party to a ~~$300.0~~$600 million revolving credit facility with Westlake Chemical Partners LP ("~~WLKP"~~Westlake Partners")~~. On August 1, 2017, the revolving credit facility was amended~~ (the "MLP Revolver") that is scheduled to ~~extend the maturity from 2018 to 2021. Borrowings under the revolver bear interest at LIBOR plus a spread ranging from 2.0% to 3.0% (depending~~mature on WLKP's consolidated leverage ratio), payable quarterly. WLKP may pay all or a portion of the interest on any borrowings in kind, in which case any such amounts would be added to the principal amount of the loan.July 12, 2027. As of ~~September~~June 30, ~~2017,~~2023, outstanding borrowings under the credit facility totaled ~~$253.5~~$377 million and bore interest at Secured Overnight Financing Rate, as administered by the Federal Reserve Bank of New York ("SOFR") plus the Applicable Margin plus a 0.10% credit spread adjustment. On July 12, 2022, Westlake Partners entered into the Fourth Amendment (the "MLP Revolver Amendment") to the MLP Revolver. The MLP Revolver Amendment, among other things, extended the maturity date to July 12, 2027 and provided for the replacement of LIBOR with SOFR. Borrowings under the MLP Revolver now bear interest at a variable rate of either (a) SOFR plus ~~2.0%~~the Applicable Margin plus a 0.10% credit spread adjustment or, if SOFR is no longer available, (b) the Alternate Base Rate plus the Applicable Margin minus 1.0%. The Applicable Margin under the MLP Revolver varies between 1.75% and 2.75%, depending on the Partnership's Consolidated Leverage Ratio.

Our subsidiary, Westlake ~~Development Corporation,~~Polymers LLC, is the ~~lender party~~administrative agent to a ~~$600.0~~$600 million revolving credit facility with ~~OpCo. The revolving credit facility matures in 2019.~~ Westlake Chemical OpCo LP ("OpCo") (the "OpCo Revolver") that is scheduled to mature on July 12, 2027. As of ~~September~~ June 30, ~~2017,~~2023, outstanding borrowings under the credit facility totaled ~~$223.6~~$23 million and bore interest at SOFR plus the Applicable Margin of 1.75% plus a 0.10% credit spread adjustment. On July 12, 2022, OpCo entered into the Second Amendment (the "OpCo Revolver Amendment") to the OpCo Revolver. The OpCo Revolver Amendment, among other things, extended the maturity date to July 12, 2027 and provided for the replacement of LIBOR with SOFR. Borrowings under the OpCo Revolver now bear interest at a variable rate of either (a) SOFR plus ~~3.0%, which~~the Applicable Margin plus a 0.10% credit spread adjustment or, if SOFR is ~~accrued in arrears quarterly.~~no longer available, (b) the Alternate Base Rate plus the Applicable Margin minus 1.0%. The Applicable Margin under the OpCo Revolver is 1.75%.

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

Off-Balance Sheet Arrangements

None.

5131

FORWARD-LOOKING STATEMENTS

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

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

•industry market outlook, including the price of crude ~~oil;~~oil, natural gas, ethane, housing starts and repair and remodeling activity;

•macroeconomic outlook, including rising interest rates, inflation and possible recession;

•widespread outbreak of an illness or any other communicable disease, or any other public health crisis, including the coronavirus ("COVID-19") pandemic, and efforts to contain its transmission;

•our plans to respond to the challenges presented by the COVID-19 pandemic;

•production capacities;

•the impact of ongoing supply chain constraints and workforce availability caused by the COVID-19 pandemic and the conflict between Russia and Ukraine;

•currency devaluation;

•our ability to borrow additional funds under ~~the Credit Agreement;~~our credit agreement;

•our ability to meet our liquidity needs;

•our ability to meet debt obligations under our debt instruments;

•our intended quarterly dividends;

•future capacity additions and expansions in the ~~industry;~~industries in which we compete;

•results of acquisitions including the results, effects and benefits of the acquisition of Westlake Epoxy;

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

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

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

•effects of pending legal proceedings; and

•timing of and amount of capital expenditures.

We have based these statements on assumptions and analyses in light of our experience and perception of historical trends, current conditions, expected future developments and other factors we believe were appropriate in the circumstances when the statements were made. Forward-looking statements by their nature involve substantial risks and uncertainties that could significantly impact expected results, and actual future results could differ materially from those described in such statements. While it is not possible to identify all factors, we continue to face many risks and uncertainties. Among the factors that could cause actual future results to differ materially are the risks and uncertainties discussed under "Risk Factors" in the ~~2016~~2022 Form 10-K and those described from time to time in our other filings with the SEC including, but not limited to, the following:

•the ultimate timing, outcome and results of integrating the operations of Westlake Epoxy and the ultimate outcome of our operating efficiencies applied to the products and services of Westlake Epoxy; the effects of the acquisition, including the combined company's future financial condition, results of operations, strategy and plans; and expected synergies and other benefits from the acquisition and our ability to realize such synergies and other benefits;

•general economic and business ~~conditions;~~conditions, including inflation, interest rates and possible recession;

•the cyclical nature of the chemical ~~industry;~~and building products industries;

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

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

•uncertainties associated with pandemic infectious diseases, particularly COVID-19;

•uncertainties associated with climate change;

•the potential impact on demand for ethylene, polyethylene and polyvinyl chloride due to initiatives such as recycling and customers seeking alternatives to polymers;

•current and potential governmental regulatory actions in the United States and other ~~countries and political unrest in other areas;~~countries;



x☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended ~~September~~	June 30, ~~2017~~2023


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		3920
3) Quantitative and Qualitative Disclosures about Market Risk		5334
4) Controls and Procedures		5535

PART II. OTHER INFORMATION
1) Legal Proceedings		5635
1A) Risk Factors		5635
2) Unregistered Sales of Equity Securities and Use of Proceeds		5636
5) Other Information		36
6) Exhibits		5737



¨☐			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


~~(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.



	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.


~~(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.~~



	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



	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



	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



	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


~~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)
April 2023	91	$	113.94	—	$	477,162,187
May 2023	9,552	104.67		9,552	476,162,427
June 2023	90	116.47		—	476,162,427
	9,733	$	104.86	9,552


~~(1)~~	~~Represents~~ (1) Includes 91, 0 and 90 shares withheld in April 2023, May 2023 and June 2023, respectively, in satisfaction of withholding taxes due upon the vesting of restricted stock units granted to our employees under the 2013 Omnibus Incentive Plan.