Acquisitions (Tables)

12 Months Ended

Dec. 31, 2017



	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
Plus:
Axiall debt repaid at acquisition	247
Seller's transaction costs paid by the Company ⁽¹⁾	48
Total fair value of consideration transferred	2,515

Fair value of Axiall share-based awards attributed to pre-combination service ⁽²⁾	12
Additional settlement value of shares acquired	13
Purchase consideration	2,540

Fair value of previously held equity interest in Axiall ⁽³⁾	102
Total fair value allocated to net assets acquired	$	2,642

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(1)	Transactions 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 gain for the investment in other income, net in the consolidated statements of operations upon gaining control.

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed

The following table summarizes the purchase price allocation:



	Net Assets Acquired as of August 31, 2016
Cash	$	88
Accounts receivable ⁽¹⁾	422
Income tax receivable	51
Inventories ⁽²⁾	349
Prepaid expenses and other current assets	56
Property, plant and equipment ⁽²⁾	2,942
Customer relationships (weighted average lives of 9.8 years) ⁽³⁾	670
Other intangible assets:
Trade name (weighted average lives of 6.8 years)	50
Technology (weighted average lives of 5.4 years)	42
Supply contracts and leases (weighted average lives of 6.3 years)	27
Other assets	94
Total assets acquired	$	4,791
Accounts and notes payable	254
Interest payable	8
Income tax payable	2
Accrued compensation	44
Accrued liabilities	154
Deferred income taxes ⁽⁴⁾	958
Tax reserve non-current	3
Pension and other post-retirement obligations	311
Other liabilities	102
Long-term debt	1,187
Total liabilities assumed	$	3,023
Total identifiable net assets acquired	$	1,768
Noncontrolling interest	(68		)
Goodwill	942
Total fair value allocated to net assets acquired	$	2,642

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(1)	The fair value of accounts receivable acquired was $422, with the gross contractual amount being $435. The Company expects $13 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, a decrease in property plant and equipment of $193 and a corresponding increase in goodwill of $150 compared to the estimated fair values included in the 2016 Form 10-K.


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


(4)	Decreases in the estimated fair values of identified assets acquired led to a decrease in deferred income taxes of $27 compared to the estimated fair values included in the 2016 Form 10-K.

Pro Forma Information

The following unaudited consolidated pro forma information presents consolidated pro forma information as if the Merger had occurred on January 1, 2015:



	Pro Forma
	Year Ended December 31,
	2016		2015
Net sales	$	7,081	$	7,793

Net income ⁽¹⁾	$	397	$	663
Net income (loss) attributable to noncontrolling interest	23		(2		)
Net income attributable to Westlake Chemical Corporation ⁽¹⁾	$	374	$	665
Earnings per common share attributable to Westlake Chemical Corporation:
Basic	$	2.88	$	5.02
Diluted	$	2.86	$	5.00

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(1)

The 2016 pro forma net income amounts include Axiall's historical charges recorded during the eight-month period prior to the closing of the Merger for (1) divestitures; (2) restructuring; and (3) legal and settlement claims, net, of $27, $23 and $23, respectively. These amounts have not been eliminated for pro forma results because they do not relate to nonrecurring transaction-specific costs related to the Merger.