Employee Benefits

Defined Contribution Plans

U.S. Plans

The Company has a defined contribution savings plan covering the eligible U.S. regular full-time and part-time employees, whereby eligible employees may elect to contribute up to 100% of their annual eligible compensation, subject to an annual plan limit in line with the annual elective contribution limit as determined by the Internal Revenue Service. During 2017, the Axiall savings plans were merged into the Company's defined contribution plan. The Company matches its employee's contribution up to a certain percentage of such employee's compensation, per the terms of the plan. The Company may, at its discretion and per the terms of the plan, make an additional non-matching contribution in an amount as the Board of Directors may determine. For the years ended December 31, 2018, 2017 and 2016, the Company recorded approximately $21, $23 and $11, respectively, to expense for these contributions.

Further, within the plan, the Company also makes an annual retirement contribution to substantially all employees of certain subsidiaries. The Company's contributions to the plan are determined as a percentage of employees' pay. For the years ended December 31, 2018, 2017 and 2016, the Company charged approximately $31, $29 and $17, respectively, to expense for these contributions.

Non-U.S. Plans

The Company has various defined contribution plans in Germany, Canada, the United Kingdom, Italy and Belgium covering eligible employees of the Company. The Company's contributions to the plans are based on applicable laws in each country. Contributions to the Company's non-U.S. defined contribution plans are made by both the employee and the Company. For the years ended December 31, 2018, 2017 and 2016, the Company charged approximately $5, $5 and $2, respectively, to expense for its contributions to these plans.

Defined Benefit Plans

U.S. Plans

The Company has noncontributory defined benefit pension plans that cover certain eligible salaried and wage employees of certain subsidiaries. However, eligibility for the Company's plans has been frozen. Benefits for salaried employees under these plans are based primarily on years of service and employees' pay near retirement. Benefits for wage employees are based upon years of service and a fixed amount as periodically adjusted. The Company recognizes the years of service prior to the Company's acquisition of the subsidiary's facilities for purposes of determining vesting, eligibility and benefit levels for certain employees of the subsidiary and for determining vesting and eligibility for certain other employees of the subsidiary. The measurement date for these plans is December 31.

In connection with the Axiall Merger, the Company assumed certain U.S. pension plans and other post-retirement benefit plans covering Axiall employees. The Axiall pension plans were closed to new participants and provide benefits to certain employees and retirees. The Axiall pension plans' assets and obligations merged into the Company's defined benefit pension plan for salaried employees during 2017. In 2018, a portion of the assets and obligations of the defined benefit pension plan for salaried employees was transferred to the defined benefit pension plan for wage employees, which was subsequently renamed the Westlake Defined Benefit Plan. The remaining portion of the assets and obligations of the defined benefit pension plan for salaried employees was terminated through an annuity purchase transaction. The other post-retirement benefit plans are unfunded and provide medical and life insurance benefits for certain employees and their dependents.

Non-U.S. Plans

The Company has defined benefit pension plans covering current and former employees associated with the Company's operations. These pension plans are closed to new participants and are for employees who commenced employment before July 1, 2007. Benefits for employees for these plans are based primarily on employees' pay near retirement. These pension plans are unfunded and have no plan assets. In connection with the Axiall Merger, the Company assumed certain defined benefit pension plans. These pension plans are for employees outside of the U.S., namely in Canada and Taiwan. The measurement date for the non-U.S. plans is December 31.

Details of the changes in benefit obligations, plan assets and funded status of the Company's pension plans are as follows:



	2018						2017
	U.S. Plans			Non-U.S. Plans			U.S. Plans			Non-U.S. Plans
Change in benefit obligation
Benefit obligation, beginning of year	$	807		$	142		$	799		$	125
Service cost	3			2			3			2
Interest cost	24			3			25			3
Actuarial loss (gain)	(43		)	—			41			—
Benefits paid	(40		)	(4		)	(45		)	(3		)
Settlements	(103		)	—			(16		)	(1		)
Foreign exchange effects	—			(7		)	—			16
Benefit obligation, end of year	$	648		$	136		$	807		$	142

Change in plan assets
Fair value of plan assets, beginning of year	$	650		$	18		$	614		$	16
Actual return	(22		)	—			97			1
Employer contribution	3			1			2			1
Benefits paid	(40		)	(1		)	(45		)	—
Administrative expenses paid	(2		)	—			(2		)	—
Settlements	(103		)	—			(16		)	(1		)
Foreign exchange effects	—			(1		)	—			1
Fair value of plan assets, end of year	$	486		$	17		$	650		$	18
Funded status, end of year	$	(162	)	$	(119	)	$	(157	)	$	(124	)



	2018						2017
	U.S. Plans			Non-U.S. Plans			U.S. Plans			Non-U.S. Plans
Amounts recognized in the consolidated balance sheet at December 31
Current liabilities	$	(2	)	$	(3	)	$	(2	)	$	(3	)
Noncurrent liabilities	(160		)	(116		)	(155		)	(121		)
Net amount recognized	$	(162	)	$	(119	)	$	(157	)	$	(124	)



	2018					2017
	U.S. Plans			Non-U.S. Plans		U.S. Plans			Non-U.S. Plans
Amounts recognized in accumulated other comprehensive income (loss)
Net loss (gain)	$	(36	)	$	9	$	(71	)	$	9
Total before tax ⁽¹⁾	$	(36	)	$	9	$	(71	)	$	9

______________________________


(1)	After-tax totals for pension benefits were $22 and $43 for 2018 and 2017, respectively, and are reflected in stockholders' equity as accumulated other comprehensive income (loss).

In the U.S., the Pension Protection Act of 2006 (the "Pension Protection Act") established a relationship between a qualified pension plan's funded status and the actual benefits that can be provided. Restrictions on plan benefits and additional funding and notice requirements are imposed when a plan's funded status is less than certain threshold levels. For the 2018 plan year, the funded status for the Company's U.S. pension plans are above 80% and, as such, are exempt from the Pension Protection Act's benefit restrictions.

Pension plans with an accumulated benefit obligation in excess of plan assets at December 31 are as follows:



	2018						2017
	U.S. Plans			Non-U.S. Plans			U.S. Plans			Non-U.S. Plans
Information for pension plans with an accumulated benefit obligation in excess of plan assets
Projected benefit obligation	$	(648	)	$	(128	)	$	(807	)	$	(128	)
Accumulated benefit obligation	(648		)	(125		)	(807		)	(126		)
Fair value of plan assets	486			10			650			5

The following table provides the components of net periodic benefit costs, other changes in plan assets and benefit obligation recognized in other comprehensive income.



	Year Ended December 31,
	2018						2017						2016
	U.S. Plans			Non-U.S. Plans			U.S. Plans			Non-U.S. Plans			U.S. Plans			Non-U.S. Plans
Components of net periodic benefit cost
Service cost	$	3		$	2		$	3		$	2		$	1		$	2
Administrative expenses	3			—			2			—			3			—
Interest cost	24			3			25			2			9			2
Expected return on plan assets	(42		)	(1		)	(40		)	(1		)	(15		)	—
Net amortization	(1		)	1			1			1			1			—
Settlement gain	(14		)	—			—			—			—			—
Net periodic benefit cost (gain)	$	(27	)	$	5		$	(9	)	$	4		$	(1	)	$	4

Other changes in plan assets and benefit obligation recognized in other comprehensive income (OCI)
Net loss (gain) emerging	$	20		$	1		$	(18	)	$	—		$	(67	)	$	13
Settlement gain	14			—			—			—			—			—
Amortization of net gain (loss)	1			(1		)	(1		)	(1		)	(1		)	—
Total recognized in OCI	$	35		$	—		$	(19	)	$	(1	)	$	(68	)	$	13
Total net periodic benefit cost and OCI	$	8		$	5		$	(28	)	$	3		$	(69	)	$	17

The estimated prior service cost and net loss for the defined benefit plans to be amortized from accumulated other comprehensive income (loss) into net periodic benefit cost during 2019 are both expected to be zero.

During the third quarter of 2018, the Company's U.S. pension plans settled portions of their projected benefit obligations through the purchase of annuities and lump sum payments to certain participants. In conjunction with the settlement, the Company also remeasured the pension obligations and plan assets of the affected plans, resulting in a $26 increase in accumulated other comprehensive income (loss) before tax and a corresponding decrease in net pension liabilities recorded in the consolidated balance sheets. The Company recognized a $14 one-time settlement gain in other income, net, which was reclassified from accumulated other comprehensive income (loss).

The weighted-average assumptions used to determine pension plan obligations and net periodic benefit costs for the plans are as follows:



	2018				2017				2016
	U.S. Plans		Non-U.S. Plans		U.S. Plans		Non-U.S. Plans		U.S. Plans		Non-U.S. Plans
Weighted average assumptions used to determine benefit obligations at December 31
Discount rate	4.1	%	2.0	%	3.4	%	1.8	%	3.8	%	1.8	%
Rate of compensation increase	—	%	2.6	%	—	%	2.6	%	—	%	2.6	%
Weighted average assumptions used to determine net periodic benefit costs for years ended December 31
Discount rate for benefit obligations	3.4	%	1.8	%	3.8	%	1.8	%	3.2	%	2.4	%
Discount rate for service cost	3.8	%	2.0	%	4.1	%	1.9	%	3.4	%	2.4	%
Discount rate for interest cost	3.3	%	2.0	%	3.2	%	2.0	%	2.9	%	2.4	%
Expected return on plan assets	7.0	%	3.8	%	6.8	%	3.8	%	6.8	%	4.6	%
Rate of compensation increase	—	%	2.6	%	—	%	2.6	%	—	%	2.6	%

The discount rates for the Company's U.S. and non-U.S. plans are determined using a benchmark pension discount curve and applying spot rates from the curve to each year of expected benefit payments to determine the appropriate discount rate for the Company.

The Company's U.S. pension plan investments are held in the Westlake Defined Benefit Plan. The Company's overall investment strategy for these pension plan assets is to achieve a balance between moderate income generation and capital appreciation. The investment strategy includes a mix of approximately 60% of investments for long-term growth, and 40% for near-term benefit payments with a diversification of asset types. These pension funds' investment policies target asset allocations from approximately 60% equity securities and 40% fixed income securities in order to pursue a balance between moderate income generation and capital appreciation.

Equity securities primarily include investments in large-cap and small-cap companies located in the U.S. and international developed and emerging markets stocks. Fixed income securities are comprised of investment and non-investment grade bonds, including U.S. Treasuries and U.S. and non-U.S. corporate bonds of companies from diversified industries. Each pension fund investment policy allows a discretionary range in various asset classes within the asset allocation model of up to 10%. The Company does not believe that there are significant concentrations of risk in the pension plan assets due to its strategy of asset diversification. At December 31, 2018, plan assets did not include direct ownership of the Company's common stock.

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.

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

The investments in the collective trust and mutual funds are valued using a market approach based on the net asset value of units held. The fair values of the Company's U.S. plan assets at December 31, by asset category, are as follows:



	2018
	U.S. Plans						Non U.S. Plans
	Level 1		Level 2		Total		Level 1		Level 2		Total
Cash and common stock:
Cash and cash equivalents	$	—	$	—	$	—	$	5	$	—	$	5
Common stock	13		—		13		—		—		—
Collective investment trust and mutual funds—Equity securities:
Large-cap funds ⁽¹⁾	44		98		142		—		1		1
Small-cap funds ⁽²⁾	6		13		19		—		—		—
International funds ⁽³⁾	64		38		102		—		5		5
Collective investment trust and mutual funds—Fixed income:
Bond funds ⁽⁴⁾	96		102		198		—		6		6
Short-term investment funds	—		12		12		—		—		—
	$	223	$	263	$	486	$	5	$	12	$	17



	2017
	U.S. Plans						Non U.S. Plans
	Level 1		Level 2		Total		Level 1		Level 2		Total
Cash and common stock:
Cash and cash equivalents	$	—	$	—	$	—	$	5	$	—	$	5
Common stock	21		—		21		—		—		—
Collective investment trust and mutual funds—Equity securities:
Large-cap funds ⁽¹⁾	49		173		222		—		2		2
Small-cap funds ⁽²⁾	9		25		34		—		—		—
International funds ⁽³⁾	69		50		119		—		5		5
Collective investment trust and mutual funds—Fixed income:
Bond funds ⁽⁴⁾	116		125		241		—		6		6
Short-term investment funds	—		13		13		—		—		—
	$	264	$	386	$	650	$	5	$	13	$	18

______________________________


(1)	Substantially all of the assets of these funds are invested in large-cap U.S. companies. The remainder of the assets of these funds is invested in cash reserves.


(2)	Substantially all of the assets of these funds are invested in small-cap U.S. companies. The remainder of the assets of these funds is invested in cash reserves.


(3)	Substantially all of the assets of these funds are invested in international companies in developed markets (excluding the U.S.). The remainder of the assets of these funds is invested in cash reserves.


(4)	This category represents investment grade bonds of U.S. issuers, including U.S. Treasury notes.

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 for the pension plans in 2019.

Multi-employer Plans

Non-U.S. Plans

The Company participates in two multi-employer plans, Pensionskasse der Mitarbeiter der Hoechst-Gruppe VVaG and Pensionskasse der Wacker-Chemie GmbH VVaG, which provide benefits to certain of the Company's employees in Germany. These multi-employer plans are closed to new participants. The benefit obligations are covered up to a certain salary threshold by contributions made by the Company and employees to the plans.

Contributions to the Company's multi-employer plans are expensed as incurred and were as follows:



	Year Ended December 31,
	2018		2017		2016
	Non-U.S. Plans		Non-U.S. Plans		Non-U.S. Plans
Contributions to multi-employer plans ⁽¹⁾	$	7	$	8	$	5

______________________________

(1)

The plan information for both the Pensionskasse der Mitarbeiter der Hoechst-Gruppe VVaG and Pensionskasse der Wacker-Chemie GmbH VVaG plans is publicly available. The plans provide fixed, monthly retirement payments on the basis of the credits earned by the participating employees. To the extent that the plans are underfunded, future contributions to the plans may increase and may be used to fund retirement benefits for employees related to other employers. The Company does not consider either of its multi-employer plans individually significant.

Other Post-retirement Benefits

In the U.S., the Company provides post-retirement healthcare benefits to the employees of two subsidiaries who meet certain minimum age and service requirements. The Company has the right to modify or terminate some of these benefits.

In conjunction with the Axiall Merger, the Company assumed post-retirement plans in the U.S. and Canada which are unfunded and provide medical and life insurance benefits for certain employees and their dependents.

The following table provides a reconciliation of the benefit obligations of the Company's unfunded post-retirement healthcare plans.



	2018						2017
	U.S. Plans			Non-U.S. Plans			U.S. Plans			Non-U.S. Plans
Change in benefit obligation
Benefit obligation, beginning of year	$	73		$	3		$	80		$	3
Service cost	1			—			1			—
Interest cost	2			—			2			—
Actuarial gain	(1		)	—			(1		)	—
Benefits paid	(8		)	—			(9		)	—
Benefit obligation, end of year	$	67		$	3		$	73		$	3

Change in plan assets
Fair value of plan assets, beginning of year	$	—		$	—		$	—		$	—
Employer contribution	8			—			9			—
Benefits paid	(8		)	—			(9		)	—
Fair value of plan assets, end of year	$	—		$	—		$	—		$	—
Funded status, end of year	$	(67	)	$	(3	)	$	(73	)	$	(3	)



	2018						2017
	U.S. Plans			Non-U.S. Plans			U.S. Plans			Non-U.S. Plans
Amounts recognized in the consolidated balance sheet at December 31
Current liabilities	$	(8	)	$	—		$	(8	)	$	—
Noncurrent liabilities	(59		)	(3		)	(65		)	(3		)
Net amount recognized	$	(67	)	$	(3	)	$	(73	)	$	(3	)



	2018					2017
	U.S. Plans			Non-U.S. Plans		U.S. Plans			Non-U.S. Plans
Amounts recognized in accumulated other comprehensive income (loss)
Net gain	$	(6	)	$	—	$	(5	)	$	—
Total before tax ⁽¹⁾	$	(6	)	$	—	$	(5	)	$	—

______________________________


(1)	After-tax totals for post-retirement healthcare benefits were $5 and $0 for 2018 and 2017, respectively, and are reflected in stockholders' equity as accumulated other comprehensive income (loss).

The following table provides the components of net periodic benefit costs, other changes in plan assets and benefit obligation recognized in other comprehensive income.



	Year Ended December 31,
	2018						2017					2016
	U.S. Plans			Non-U.S. Plans			U.S. Plans			Non-U.S. Plans		U.S. Plans			Non-U.S. Plans
Components of net periodic benefit cost
Service cost	$	1		$	—		$	1		$	—	$	—		$	—
Interest cost	2			—			2			—		1			—
Net amortization	—			—			—			—		—			—
Net periodic benefit cost	$	3		$	—		$	3		$	—	$	1		$	—

Other changes in plan assets and benefit obligation recognized in OCI
Net gain emerging	$	(1	)	$	(1	)	$	(1	)	$	—	$	(6	)	$	—
Total recognized in OCI	$	(1	)	$	(1	)	$	(1	)	$	—	$	(6	)	$	—
Total net periodic benefit cost and OCI	$	2		$	(1	)	$	2		$	—	$	(5	)	$	—

The estimated prior service cost and net loss for the post-retirement healthcare benefit plans that will be amortized from accumulated other comprehensive income (loss) into net periodic benefit cost during 2019 are both expected to be zero.

The weighted-average assumptions used to determine post-retirement healthcare plan obligations and net periodic benefit costs for the plans are as follows:



	2018				2017				2016
	U.S. Plans		Non-U.S. Plans		U.S. Plans		Non-U.S. Plans		U.S. Plans		Non-U.S. Plans
Weighted average assumptions used to determine benefit obligations at December 31
Discount rate	3.7	%	3.9	%	3.0	%	4.0	%	3.3	%	4.0	%
Health care cost trend rate
- Initial rate	7.0	%	5.8	%	7.3	%	6.2	%	7.3	%	6.2	%
- Ultimate rate	4.5	%	4.0	%	4.5	%	4.5	%	4.5	%	4.5	%
- Years to ultimate	11		22		11		12		11		12
Weighted average assumptions used to determine net periodic benefit costs for years ended December 31
Discount rate for benefit obligations	3.0	%	3.6	%	3.3	%	3.3	%	2.6	%	3.3	%
Discount rate for service cost	3.4	%	3.6	%	3.8	%	3.3	%	3.1	%	3.3	%
Discount rate for interest cost	2.7	%	3.6	%	2.6	%	3.3	%	2.8	%	3.3	%
Health care cost trend rate
- Initial rate	7.0	%	6.1	%	6.8	%	6.8	%	7.0	%	6.8	%
- Ultimate rate	4.5	%	4.5	%	4.6	%	4.5	%	4.5	%	4.5	%
- Years to ultimate	10		11		11		12		12		13

The discount rate is determined using a benchmark pension discount curve and applying spot rates from the curve to each year of expected benefit payments to determine the appropriate discount rate for the Company. A one percentage-point increase or decrease in assumed healthcare trend rates would not have a significant effect on the amounts reported for the healthcare plans.

Estimated Future Benefit Payments

The following benefit payments are expected to be paid:



	Pension Benefits		Other Post- retirement Benefits
Estimated future benefit payments:
Year 1	$	44	$	8
Year 2	44		8
Year 3	45		8
Year 4	46		8
Year 5	46		8
Years 6 to 10	233		25