8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of Report (date of earliest event reported): August 3, 2010

WESTLAKE CHEMICAL CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	001-32260	76-0346924
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

2801 Post Oak Boulevard, Suite 600
Houston, Texas	77056
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (713) 960-9111

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.

On August 3, 2010, Westlake Chemical Corporation issued a press release announcing its 2010 second quarter earnings. A copy of the press release is furnished with this Current Report as Exhibit 99.1 and is incorporated by reference herein.

The information furnished pursuant to this Item 2.02, including Exhibit 99.1, shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and will not be incorporated by reference into any registration statement filed by Westlake Chemical Corporation under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated therein by reference.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

The following exhibit is furnished herewith:

99.1 Press release issued on August 3, 2010 by Westlake Chemical Corporation.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

WESTLAKE CHEMICAL CORPORATION
By:	/S/    ALBERT CHAO
	Albert Chao President and Chief Executive Officer

Date: August 3, 2010

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EXHIBIT INDEX

Exhibit No.	Description
99.1	Press release issued on August 3, 2010 by Westlake Chemical Corporation.

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EX-99.1

Exhibit 99.1

WESTLAKE CHEMICAL CORPORATION

Contact – (713) 960-9111

Investors – Steve Bender

Media – David R. Hansen

Westlake Announces Strong Second Quarter Earnings

Second quarter 2010 highlights

¡ Earnings per share up over 200% versus year-ago quarter and last quarter.

¡ Net sales increased 42% versus second quarter 2009.

Westlake Chemical Corporation (NYSE: WLK) today reported net income for the three months ended June 30, 2010 of $56.9 million, or $0.86 per diluted share, on sales of $818.4 million. This represents an improvement from the quarter ended June 30, 2009 net income of $16.9 million, or $0.26 per diluted share, on sales of $574.9 million. Sales for the second quarter of 2010 increased $243.5 million compared to the second quarter of 2009 driven primarily by higher sales prices for most of the Company’s major products. Income from operations was $99.5 million for the second quarter of 2010 as compared to $36.2 million for the second quarter of 2009. Income from operations benefited from improved Olefins integrated product margins resulting from increases in product prices, which were only partially offset by increased feedstock costs. This increase in income from operations was partially offset by lower PVC resin and pipe margins.

Second quarter 2010 earnings of $56.9 million, or $0.86 per diluted share, are an improvement over the $17.6 million, or $0.27 per diluted share, reported by the Company in the first quarter of 2010. Sales in the second quarter of 2010 were $818.4 million compared to sales of $778.3 million in the first quarter of 2010, an increase of $40.1 million. The increase in sales was largely due to higher average sales prices for all major products. Second quarter 2010 income from operations of $99.5 million was an increase of $65.1 million over the income from operations in the first quarter of 2010 of $34.4 million. The increase in income from operations was primarily due to higher Olefins integrated product margins resulting from lower feedstock costs, continued strong demand for polyethylene and higher sales prices. In addition, during the first quarter we had an unscheduled outage at one of the ethylene units at our Lake Charles facility caused by freezing temperatures.

Albert Chao, President and Chief Executive Officer, said, “We are pleased to report a significant improvement in earnings in the second quarter of 2010 as the Olefins segment margins continued to improve. The Olefins segment benefited from strong domestic and export demand for polyethylene and lower feedstock costs. Our natural gas-based production of ethylene continues to have a cost advantage over naphtha-based ethylene. In addition, we bolstered our cash position in July 2010 with the issuance of $100.0 million in tax exempt bonds, restricted for qualifying investments.”

Net income for the six months ended June 30, 2010 was $74.6 million, or $1.13 per diluted share, on net sales of $1,596.7 million. This represents an increase in net income of $63.8 million, or $0.97 per diluted share, from the six months ended June 30, 2009 net income of $10.8 million, or $0.16 per diluted share, on net sales of $1,063.1 million. Sales for the six months ended June 30, 2010 increased $533.6 million compared to the prior year period mainly due to higher sales prices and sales volumes for most of our major products. Income from operations was $134.0 million for the six months ended June 30, 2010 as compared to $35.3 million for the six months ended June 30, 2009. The increase in income from operations was primarily attributable to improved production rates for most of our major products and higher Olefins integrated product margins as compared to the prior year period. This increase was partially offset by lower caustic margins resulting from a 47.1% decrease in industry caustic prices compared to the first six months of 2009 and the unscheduled outage at one of our ethylene units in Lake Charles in the first quarter of 2010. In addition, trading activity for the six months ended June 30, 2010 resulted in a loss of $2.2 million compared to a gain of $3.9 million for the six months ended June 30, 2009. Income from operations for the six months ended June 30, 2009 was negatively impacted by an unscheduled outage at our Calvert City facility and a turnaround at one of our ethylene units in Lake Charles.

EBITDA (earnings before interest expense, income taxes, depreciation and amortization) for the second quarter of 2010 increased $63.9 million to $131.5 million from $67.6 million in the first quarter of 2010. EBITDA for the second quarter of 2010 increased $63.1 million compared to the EBITDA of $68.4 million in the second quarter of 2009. A reconciliation of EBITDA to reported net income and to net cash (used for) provided by operating activities can be found in the financial schedules at the end of this press release.

Net cash provided by operating activities was $55.6 million in the first six months of 2010. Capital expenditures for the first six months of 2010 were $31.1 million. At June 30, 2010, we had $142.3 million of net debt. Net debt is long-term debt of $515.4 million less cash balances of $373.1 million ($84.3 million of the cash balances are restricted for qualifying investments). In addition, we issued $100.0 million in tax-exempt bonds in July 2010, which are also restricted for qualifying investments in the state of Louisiana.

OLEFINS SEGMENT

Income from operations increased by $66.9 million to $111.2 million in the second quarter of 2010 from $44.3 million in the second quarter of 2009. This increase was mainly attributable to improved Olefins integrated product margins, which were partially offset by a loss from trading activity. Olefins integrated product margins benefited from a significant increase in product prices, which outpaced the increase in feedstock costs. Trading activity resulted in a loss of $2.6 million in the second quarter of 2010 compared to a loss of $0.1 million in the second quarter of 2009.

Income from operations for the second quarter of 2010 for the Olefins segment of $111.2 million increased $53.0 million from the $58.2 million reported in the first quarter of 2010. This increase was primarily due to increased Olefins integrated product margins as a result of a decrease in average feedstock costs, continued strong demand for polyethylene and higher sales prices.

Income from operations in the first six months of 2010 was $169.4 million, an increase of $109.0 million from the $60.4 million in the first six months of 2009. This increase was mainly attributable to improved Olefins integrated product margins, higher operating rates and increased polyethylene sales volume. The increase was partially offset by the unscheduled outage at one of our ethylene units in Lake Charles during the first six months of 2010. In addition, trading activity resulted in a loss of $2.2 million for the six months ended June 30, 2010 as compared to a gain of $3.9 million for the prior year period. The first six months of 2009 was negatively impacted by a turnaround at one of our ethylene units in Lake Charles.

VINYLS SEGMENT

The Vinyls segment incurred a loss from operations of $10.9 million in the second quarter of 2010 compared to a loss from operations of $4.8 million in the second quarter of 2009. This decrease was primarily due to lower PVC resin and pipe margins, which were negatively impacted by higher feedstock costs. These factors were only partially offset by higher caustic volumes and increased sales prices. In addition, continued weakness in the construction markets has prevented us from raising downstream fabricated products prices to sufficiently offset cost increases.

The Vinyls segment loss of $10.9 million in the second quarter of 2010 was an improvement as compared to the loss of $14.9 million in the first quarter of 2010. The improved results were primarily due to higher caustic sales prices and margins.

The Vinyls segment incurred a loss from operations of $25.8 million for the six months ended June 30, 2010 as compared to a loss from operations of $20.2 million for the six months ended June 30, 2009, a negative change of $5.6 million. Operating results were negatively impacted by lower margins for caustic, resulting from a 47.1% decrease in industry caustic prices, and higher feedstock costs compared to the prior year period.

The statements in this release relating to matters that are not historical facts are forward-looking statements that are subject to risks and uncertainties. Actual results could differ materially, based on factors including, but not limited to: general economic and business conditions; the cyclical nature of the chemical industry; availability, cost and volatility of raw materials and utilities; uncertainties associated with the United States and worldwide economies, including those due to global economic and financial conditions; governmental regulatory actions and political unrest; industry production capacity and operating rates; the supply/demand balance for Westlake’s products; competitive products and pricing pressures; access to capital markets; technological developments; the effect and results of litigation and settlements of litigation; operating interruptions; and other risk factors. For more detailed information about the factors that could cause actual results to differ materially, please refer to Westlake’s Annual Report on Form 10-K for the year ended December 31, 2009, which was filed with the SEC in February 2010.

In this release, Westlake refers to non-GAAP financial measures, EBITDA and net debt. EBITDA is calculated as net income before interest expense, income taxes, depreciation and amortization. The body of accounting principles generally accepted in the United States is commonly referred to as “GAAP.” For this purpose a non-GAAP financial measure is generally defined by the U.S. Securities and Exchange Commission as one that purports to measure historical and future financial performance, financial position or cash flows, but excludes or includes amounts that would not be so adjusted in the most comparable GAAP measures. We have included EBITDA in this release 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. EBITDA allows for meaningful company-to-company performance comparisons by adjusting for factors such as interest expense, depreciation and amortization and taxes, which often vary from company to company. In addition, we utilize EBITDA in evaluating acquisition targets. Management also believes that EBITDA is a useful tool for measuring our ability to meet our future debt service, capital expenditures and working capital requirements, and EBITDA is commonly used by us and our investors to measure our ability to service indebtedness. EBITDA is not a substitute for the GAAP measures of earnings or of cash flow and is not necessarily a measure of our ability to fund our cash needs. In addition, it should be noted that companies calculate EBITDA differently and, therefore, EBITDA as presented in this release may not be comparable to EBITDA reported by other companies. EBITDA has material limitations as a performance measure because it excludes (1) interest expense, which is a necessary element of our costs and ability to generate revenues because we have borrowed money to finance our operations, (2) depreciation, which is a necessary element of our costs and ability to generate revenues because we use capital assets and (3) income taxes, which is a necessary element of our operations. We compensate for these limitations by relying primarily on our GAAP results and using EBITDA only supplementally. A table included in the financial schedules at the end of this release reconciles EBITDA to net income (loss) and to cash flow from operating activities. We have presented net debt because management believes that net debt is helpful in analyzing leverage and uses it as a performance measure. Net debt should not be considered as an alternative to total debt determined in accordance with GAAP.

Westlake Chemical Corporation Conference Call Information:

A conference call to discuss Westlake Chemical Corporation’s second quarter 2010 results will be held Tuesday, August 3, 2010 at 11:00 a.m. EDT (10:00 a.m. CDT). To access the conference call, dial (866) 825-3209, or (617) 213-8061 for international callers, approximately 10 minutes prior to the scheduled start time and reference passcode 88106536.

A replay of the conference call will be available beginning two hours after its conclusion until 1:00 p.m. EDT on Tuesday, August 10, 2010. To hear a replay, dial (888) 286-8010, or (617) 801-6888 for international callers. The replay passcode is 36309906.

The conference call will also be available via webcast at: http://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=180248&eventID=3223147 and the earnings release can be obtained via the company’s Web page at: http://www.westlake.com/fw/main/IR_Home_Page-123.html.

WESTLAKE CHEMICAL CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2010			2009			2010			2009
	(In thousands of dollars, except per share data and shares outstanding)
Net sales	$	818,389		$	574,865		$	1,596,723		$	1,063,116
Cost of sales		692,365			519,203			1,413,019			987,390
Gross profit		126,024			55,662			183,704			75,726
Selling, general and administrative expenses		26,487			19,487			49,738			40,454
Income from operations		99,537			36,175			133,966			35,272
Interest expense		(8,784	)		(8,795	)		(17,572	)		(17,391	)
Other (expense) income, net		(180	)		1,303			914			3,780
Income before income taxes		90,573			28,683			117,308			21,661
Provision for income taxes		33,631			11,832			42,719			10,885
Net income	$	56,942		$	16,851		$	74,589		$	10,776
Basic and diluted earnings per share	$	0.86		$	0.26		$	1.13		$	0.16
Weighted average shares outstanding:
Basic		66,141,710			65,925,121			66,090,164			65,861,550
Diluted		66,289,758			65,982,952			66,228,794			65,890,986

WESTLAKE CHEMICAL CORPORATION

CONSOLIDATED BALANCE SHEETS

(Unaudited)

	June 30, 2010		December  31, 2009
	(In thousands of dollars)
ASSETS
Current assets
Cash and cash equivalents	$	288,805	$	245,592
Accounts receivable, net		427,919		339,796
Inventories, net		370,025		369,417
Other current assets		44,344		33,573
Total current assets		1,131,093		988,378
Property, plant and equipment, net		1,172,632		1,194,311
Restricted cash		84,298		101,149
Other assets, net		156,114		162,518
Total assets	$	2,544,137	$	2,446,356
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities (accounts payable and accrued liabilities)	$	304,924	$	286,566
Long-term debt		515,441		515,400
Other liabilities		365,665		359,408
Total liabilities		1,186,030		1,161,374
Stockholders’ equity		1,358,107		1,284,982
Total liabilities and stockholders’ equity	$	2,544,137	$	2,446,356

WESTLAKE CHEMICAL CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Six Months Ended June 30,
	2010			2009
	(In thousands of dollars)
Cash flows from operating activities
Net income	$	74,589		$	10,776
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		64,121			59,901
Deferred income taxes		6,065			(10,959	)
Other balance sheet changes		(89,181	)		93,634
Net cash provided by operating activities		55,594			153,352
Cash flows from investing activities
Additions to property, plant and equipment		(31,086	)		(50,363	)
Acquisition of business		—			(6,297	)
Proceeds from disposition of assets		438			3,251
Proceeds from repayment of loan to affiliate		167			—
Settlements of derivative instruments		8,116			155
Net cash used for investing activities		(22,365	)		(53,254	)
Cash flows from financing activities
Proceeds from exercise of stock options		702			42
Dividends paid		(7,606	)		(6,922	)
Utilization of restricted cash		16,974			21,979
Capitalized debt issuance costs		(86	)		(1,429	)
Net cash provided by financing activities		9,984			13,670
Net increase in cash and cash equivalents		43,213			113,768
Cash and cash equivalents at beginning of period		245,592			90,239
Cash and cash equivalents at end of period	$	288,805		$	204,007

WESTLAKE CHEMICAL CORPORATION

SEGMENT INFORMATION

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2010			2009			2010			2009
	(In thousands of dollars)
Net external sales
Olefins	$	577,327		$	386,542		$	1,142,351		$	709,311
Vinyls		241,062			188,323			454,372			353,805
	$	818,389		$	574,865		$	1,596,723		$	1,063,116
Income (loss) from operations
Olefins	$	111,158		$	44,289		$	169,403		$	60,363
Vinyls		(10,890	)		(4,829	)		(25,816	)		(20,210	)
Corporate and other		(731	)		(3,285	)		(9,621	)		(4,881	)
	$	99,537		$	36,175		$	133,966		$	35,272
Depreciation and amortization
Olefins	$	21,465		$	20,892		$	42,701		$	40,616
Vinyls		10,482			9,971			21,127			19,159
Corporate and other		146			50			293			126
	$	32,093		$	30,913		$	64,121		$	59,901
Other income (expense), net
Olefins	$	36		$	33		$	74		$	163
Vinyls		(408	)		28			(25	)		31
Corporate and other		192			1,242			865			3,586
	$	(180	)	$	1,303		$	914		$	3,780

WESTLAKE CHEMICAL CORPORATION

RECONCILIATION OF EBITDA TO NET INCOME AND TO NET CASH

(USED FOR) PROVIDED BY OPERATING ACTIVITIES

(Unaudited)

	Three Months Ended March 31,			Three Months Ended June 30,					Six Months Ended June 30,
	2010			2010		2009			2010			2009
	(In thousands of dollars)
EBITDA	$	67,551		$	131,450	$	68,391		$	199,001		$	98,953
Less:
Provision for income taxes		9,088			33,631		11,832			42,719			10,885
Interest expense		8,788			8,784		8,795			17,572			17,391
Depreciation and amortization		32,028			32,093		30,913			64,121			59,901
Net income		17,647			56,942		16,851			74,589			10,776
Changes in operating assets and liabilities		(73,389	)		48,329		35,262			(25,060	)		153,535
Deferred income taxes		664			5,401		(19,064	)		6,065			(10,959	)
Net cash (used for) provided by operating activities	$	(55,078	)	$	110,672	$	33,049		$	55,594		$	153,352

WESTLAKE CHEMICAL CORPORATION

SUPPLEMENTAL INFORMATION

Product Sales Price and Volume Variance by Operating Segments

	Second Quarter 2010 vs. Second Quarter 2009		Second Quarter 2010 vs. First Quarter 2010
	Average Sales Price	Volume	Average Sales Price	Volume
Olefins	+51.2%	-1.7%	+4.5%	-2.4%
Vinyls	+25.6%	+2.4%	+7.3%	+5.7%
Company	+42.8%	-0.3%	+5.3%	-0.1%

Average Quarterly Industry Prices ⁽¹⁾

	Quarter Ended
	June 2009	September 2009	December 2009	March 2010	June 2010
Ethane (cents/lb)	14.5	15.9	22.3	24.7	18.4
Propane (cents/lb)	17.3	20.6	25.8	29.4	25.7
Ethylene (cents/lb) (2)	31.5	32.3	40.5	52.3	45.6
Polyethylene (cents/lb) (3)	68.0	72.3	75.0	86.3	89.0
Styrene (cents/lb) (4)	46.3	56.5	55.3	67.7	64.7
Caustic ($/ short ton) (5)	368.3	171.7	216.7	273.3	356.7
Chlorine ($/ short ton) (6)	204.2	388.3	385.0	311.7	310.0
PVC (cents/lb) (7)	48.5	54.5	56.7	67.0	67.3

(1) Industry pricing data was obtained through the Chemical Market Associates, Inc., or CMAI. We have not independently verified the data.

(2) Represents average North American contract prices of ethylene over the period as reported by CMAI.

(3) Represents average North American contract prices of polyethylene low density film over the period as reported by CMAI.

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

(5) Represents average North American acquisition prices of caustic soda (diaphragm grade) over the period as reported by CMAI.

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

(7) Represents average North American contract prices of PVC over the period as reported by CMAI.