QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||||||||
For the quarterly period ended |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the Transition Period from to |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
x | Accelerated filer | ☐ | ||||||||||||||||||
Non-accelerated filer | ¨ | Smaller reporting company | ||||||||||||||||||
Emerging growth company |
Item | Page | ||||
March 31, 2023 | December 31, 2022 | |||||||||||||
(in millions of dollars, except par values and share amounts) | ||||||||||||||
ASSETS | ||||||||||||||
Current assets | ||||||||||||||
Cash and cash equivalents | $ | $ | ||||||||||||
Accounts receivable, net | ||||||||||||||
Inventories | ||||||||||||||
Prepaid expenses and other current assets | ||||||||||||||
Total current assets | ||||||||||||||
Property, plant and equipment, net | ||||||||||||||
Operating lease right-of-use assets | ||||||||||||||
Goodwill | ||||||||||||||
Customer relationships, net | ||||||||||||||
Other intangible assets, net | ||||||||||||||
Equity method investments | ||||||||||||||
Other assets, net | ||||||||||||||
Total assets | $ | $ | ||||||||||||
LIABILITIES AND EQUITY | ||||||||||||||
Current liabilities | ||||||||||||||
Accounts payable | $ | $ | ||||||||||||
Accrued and other liabilities | ||||||||||||||
Total current liabilities | ||||||||||||||
Long-term debt, net | ||||||||||||||
Deferred income taxes | ||||||||||||||
Pension and other post-retirement benefits | ||||||||||||||
Operating lease liabilities | ||||||||||||||
Other liabilities | ||||||||||||||
Total liabilities | ||||||||||||||
Commitments and contingencies (Note 14) | ||||||||||||||
Stockholders' equity | ||||||||||||||
Preferred stock, $ | ||||||||||||||
Common stock, $ | ||||||||||||||
Common stock, held in treasury, at cost; | ( | ( | ||||||||||||
Additional paid-in capital | ||||||||||||||
Retained earnings | ||||||||||||||
Accumulated other comprehensive loss | ( | ( | ||||||||||||
Total Westlake Corporation stockholders' equity | ||||||||||||||
Noncontrolling interests | ||||||||||||||
Total equity | ||||||||||||||
Total liabilities and equity | $ | $ |
Three Months Ended March 31, | ||||||||||||||
2023 | 2022 | |||||||||||||
(in millions of dollars, except per share data and share amounts) | ||||||||||||||
Net sales | $ | $ | ||||||||||||
Cost of sales | ||||||||||||||
Gross profit | ||||||||||||||
Selling, general and administrative expenses | ||||||||||||||
Amortization of intangibles | ||||||||||||||
Restructuring, transaction and integration-related costs | ||||||||||||||
Income from operations | ||||||||||||||
Other income (expense) | ||||||||||||||
Interest expense | ( | ( | ||||||||||||
Other income, net | ||||||||||||||
Income before income taxes | ||||||||||||||
Provision for income taxes | ||||||||||||||
Net income | ||||||||||||||
Net income attributable to noncontrolling interests | ||||||||||||||
Net income attributable to Westlake Corporation | $ | $ | ||||||||||||
Earnings per common share attributable to Westlake Corporation: | ||||||||||||||
Basic | $ | $ | ||||||||||||
Diluted | $ | $ | ||||||||||||
Weighted average common shares outstanding: | ||||||||||||||
Basic | ||||||||||||||
Diluted | ||||||||||||||
Three Months Ended March 31, | ||||||||||||||
2023 | 2022 | |||||||||||||
(in millions of dollars) | ||||||||||||||
Net income | $ | $ | ||||||||||||
Other comprehensive income (loss), net of income taxes | ||||||||||||||
Foreign currency translation adjustments | ||||||||||||||
Foreign currency translation | ( | |||||||||||||
Income tax (provision) benefit on foreign currency translation | ( | |||||||||||||
Other, net of income tax | ( | |||||||||||||
Other comprehensive income (loss), net of income taxes | ( | |||||||||||||
Comprehensive income | ||||||||||||||
Comprehensive income attributable to noncontrolling interests, net of tax of $ | ||||||||||||||
Comprehensive income attributable to Westlake Corporation | $ | $ |
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 | $ | $ | ( | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
Common stock repurchased | — | — | ( | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
Shares issued—stock-based compensation | — | — | ( | ( | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Dividends declared | — | — | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||
Distributions to noncontrolling interests | — | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||
Balances at March 31, 2023 | $ | $ | ( | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
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 | $ | $ | ( | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | — | — | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||
Shares issued—stock-based compensation | — | — | ( | ( | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Dividends declared | — | — | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||
Distributions to noncontrolling interests | — | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||
Noncontrolling interests | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Balances at March 31, 2022 | $ | $ | ( | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended March 31, | ||||||||||||||
2023 | 2022 | |||||||||||||
(in millions of dollars) | ||||||||||||||
Cash flows from operating activities | ||||||||||||||
Net income | $ | $ | ||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities | ||||||||||||||
Depreciation and amortization | ||||||||||||||
Stock-based compensation expense | ||||||||||||||
Loss from disposition and write-off of property, plant and equipment | ||||||||||||||
Deferred income taxes | ( | |||||||||||||
Other losses, net | ( | ( | ||||||||||||
Changes in operating assets and liabilities, net of effect of business acquisitions | ||||||||||||||
Accounts receivable | ( | ( | ||||||||||||
Inventories | ( | |||||||||||||
Prepaid expenses and other current assets | ( | |||||||||||||
Accounts payable | ( | ( | ||||||||||||
Accrued and other liabilities | ( | ( | ||||||||||||
Other, net | ( | ( | ||||||||||||
Net cash provided by operating activities | ||||||||||||||
Cash flows from investing activities | ||||||||||||||
Acquisition of business, net of cash acquired | ( | |||||||||||||
Additions to investments in unconsolidated subsidiaries | ( | ( | ||||||||||||
Additions to property, plant and equipment | ( | ( | ||||||||||||
Other, net | ||||||||||||||
Net cash used for investing activities | ( | ( | ||||||||||||
Cash flows from financing activities | ||||||||||||||
Distributions to noncontrolling interests | ( | ( | ||||||||||||
Dividends paid | ( | ( | ||||||||||||
Repurchase of common stock for treasury | ( | |||||||||||||
Other, net | ||||||||||||||
Net cash used for financing activities | ( | ( | ||||||||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | ( | |||||||||||||
Net increase (decrease) in cash, cash equivalents and restricted cash | ( | |||||||||||||
Cash, cash equivalents and restricted cash at beginning of period | ||||||||||||||
Cash, cash equivalents and restricted cash at end of period | $ | $ |
Cash | $ | |||||||
Accounts receivable | ||||||||
Inventories | ||||||||
Prepaid expenses and other current assets | ||||||||
Property, plant and equipment | ||||||||
Operating lease right-of-use assets | ||||||||
Intangible assets | ||||||||
Other assets | ||||||||
Total assets acquired | ||||||||
Accounts payable | ||||||||
Accrued and other liabilities | ||||||||
Deferred income taxes | ||||||||
Pensions and other post-retirement benefits | ||||||||
Operating lease liabilities | ||||||||
Other liabilities | ||||||||
Total liabilities assumed | ||||||||
Total identifiable net assets acquired | ||||||||
Noncontrolling interest | ( | |||||||
Goodwill | ||||||||
Total Westlake Corporation purchase consideration | $ |
March 31, 2023 | December 31, 2022 | |||||||||||||
Trade customers | $ | $ | ||||||||||||
Related parties | ||||||||||||||
Allowance for credit losses | ( | ( | ||||||||||||
Federal and state taxes | ||||||||||||||
Other | ||||||||||||||
Accounts receivable, net | $ | $ |
March 31, 2023 | December 31, 2022 | |||||||||||||
Finished products | $ | $ | ||||||||||||
Feedstock, additives, chemicals and other raw materials | ||||||||||||||
Materials and supplies | ||||||||||||||
Inventories | $ | $ |
Performance and Essential Materials Segment | Housing and Infrastructure Products Segment | Total | ||||||||||||||||||
Balances at December 31, 2022 | $ | $ | $ | |||||||||||||||||
Measurement period adjustments | ||||||||||||||||||||
Effects of changes in foreign exchange rates | ||||||||||||||||||||
Balances at March 31, 2023 | $ | $ | $ |
March 31, 2023 | December 31, 2022 | |||||||||||||
Accounts payable—third parties | $ | $ | ||||||||||||
Accounts payable to related parties | ||||||||||||||
Notes payable | ||||||||||||||
Accounts payable | $ | $ |
March 31, 2023 | December 31, 2022 | |||||||||||||
$ | $ | |||||||||||||
Loan related to tax-exempt waste disposal revenue bonds due 2027 | ||||||||||||||
Term loans due 2026 | ||||||||||||||
Total long-term debt, principal amount | ||||||||||||||
Less: unamortized discount and debt issuance costs | ( | ( | ||||||||||||
Total long-term debt, carrying value | $ | $ | ||||||||||||
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 | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||
Net other comprehensive income (loss) attributable to Westlake Corporation | ( | |||||||||||||||||||||||||
Balances at March 31, 2023 | $ | $ | ( | $ | ( | $ | ( | |||||||||||||||||||
Balances at December 31, 2021 | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||
Net other comprehensive loss attributable to Westlake Corporation | ( | ( | ||||||||||||||||||||||||
Balances at March 31, 2022 | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||
March 31, 2023 | December 31, 2022 | |||||||||||||||||||||||||
Carrying Value | Fair Value | Carrying Value | Fair Value | |||||||||||||||||||||||
Long-term debt | $ | $ | $ | $ |
Three Months Ended March 31, | ||||||||||||||
2023 | 2022 | |||||||||||||
Net income attributable to Westlake Corporation | $ | $ | ||||||||||||
Less: | ||||||||||||||
Net income attributable to participating securities | ( | ( | ||||||||||||
Net income attributable to common shareholders | $ | $ |
Three Months Ended March 31, | ||||||||||||||
2023 | 2022 | |||||||||||||
Weighted average common shares—basic | ||||||||||||||
Plus incremental shares from: | ||||||||||||||
Assumed exercise of options and vesting of performance stock units | ||||||||||||||
Weighted average common shares—diluted | ||||||||||||||
Earnings per common share attributable to Westlake Corporation: | ||||||||||||||
Basic | $ | $ | ||||||||||||
Diluted | $ | $ |
Three Months Ended March 31, | ||||||||||||||
2023 | 2022 | |||||||||||||
Dividends per common share | $ | $ |
Investment in LACC | ||||||||
Balance at December 31, 2022 | $ | |||||||
Depreciation and amortization | ( | |||||||
Balance at March 31, 2023 | $ |
Three Months Ended March 31, | ||||||||||||||
2023 | 2022 | |||||||||||||
Cash paid (refunded) for: | ||||||||||||||
Interest paid, net of interest capitalized | $ | $ | ||||||||||||
Income taxes paid |
Three Months Ended March 31, | ||||||||||||||
2023 | 2022 | |||||||||||||
Net external sales | ||||||||||||||
Performance and Essential Materials | ||||||||||||||
Performance Materials | $ | $ | ||||||||||||
Essential Materials | ||||||||||||||
Total Performance and Essential Materials | ||||||||||||||
Housing and Infrastructure Products | ||||||||||||||
Housing Products | ||||||||||||||
Infrastructure Products | ||||||||||||||
Total Housing and Infrastructure Products | ||||||||||||||
$ | $ | |||||||||||||
Intersegment sales | ||||||||||||||
Performance and Essential Materials | $ | $ | ||||||||||||
Housing and Infrastructure Products | ||||||||||||||
$ | $ | |||||||||||||
Income (loss) from operations | ||||||||||||||
Performance and Essential Materials | $ | $ | ||||||||||||
Housing and Infrastructure Products | ||||||||||||||
Corporate and other | ( | ( | ||||||||||||
$ | $ | |||||||||||||
Depreciation and amortization | ||||||||||||||
Performance and Essential Materials | $ | $ | ||||||||||||
Housing and Infrastructure Products | ||||||||||||||
Corporate and other | ||||||||||||||
$ | $ | |||||||||||||
Other income, net | ||||||||||||||
Performance and Essential Materials | $ | $ | ||||||||||||
Housing and Infrastructure Products | ||||||||||||||
Corporate and other | ||||||||||||||
$ | $ | |||||||||||||
Provision for (benefit from) income taxes | ||||||||||||||
Performance and Essential Materials | $ | $ | ||||||||||||
Housing and Infrastructure Products | ||||||||||||||
Corporate and other | ( | |||||||||||||
$ | $ | |||||||||||||
Three Months Ended March 31, | ||||||||||||||
2023 | 2022 | |||||||||||||
Capital expenditures | ||||||||||||||
Performance and Essential Materials | $ | $ | ||||||||||||
Housing and Infrastructure Products | ||||||||||||||
Corporate and other | ||||||||||||||
$ | $ |
Three Months Ended March 31, | ||||||||||||||
2023 | 2022 | |||||||||||||
Income from operations | $ | $ | ||||||||||||
Interest expense | ( | ( | ||||||||||||
Other income, net | ||||||||||||||
Income before income taxes | $ | $ |
March 31, 2023 | December 31, 2022 | |||||||||||||
Total assets | ||||||||||||||
Performance and Essential Materials | $ | $ | ||||||||||||
Housing and Infrastructure Products | ||||||||||||||
Corporate and other | ||||||||||||||
$ | $ |
Three Months Ended March 31, | ||||||||||||||
2023 | 2022 | |||||||||||||
(dollars in millions, except per share data) | ||||||||||||||
Net external sales | ||||||||||||||
Performance and Essential Materials | ||||||||||||||
Performance Materials | $ | 1,282 | $ | 1,929 | ||||||||||
Essential Materials | 1,067 | 903 | ||||||||||||
Total Performance and Essential Materials | 2,349 | 2,832 | ||||||||||||
Housing and Infrastructure Products | ||||||||||||||
Housing Products | 818 | 972 | ||||||||||||
Infrastructure Products | 189 | 252 | ||||||||||||
Total Housing and Infrastructure Products | 1,007 | 1,224 | ||||||||||||
$ | 3,356 | $ | 4,056 | |||||||||||
Income (loss) from operations | ||||||||||||||
Performance and Essential Materials | $ | 403 | $ | 879 | ||||||||||
Housing and Infrastructure Products | 143 | 185 | ||||||||||||
Corporate and other | (10) | (32) | ||||||||||||
Total income from operations | 536 | 1,032 | ||||||||||||
Interest expense | (42) | (46) | ||||||||||||
Other income, net | 22 | 11 | ||||||||||||
Provision for income taxes | 109 | 233 | ||||||||||||
Net income | 407 | 764 | ||||||||||||
Net income attributable to noncontrolling interests | 13 | 8 | ||||||||||||
Net income attributable to Westlake Corporation | $ | 394 | $ | 756 | ||||||||||
Diluted earnings per share | $ | 3.05 | $ | 5.83 | ||||||||||
EBITDA (1) | $ | 825 | $ | 1,300 | ||||||||||
Free Cash Flow (2) | $ | 245 | $ | 437 |
Three Months Ended March 31, 2023 | ||||||||||||||
Average Sales Price | Volume | |||||||||||||
Net sales percentage change from prior-year period due to average sales price and volume | ||||||||||||||
Performance and Essential Materials | -13 | % | -4 | % | ||||||||||
Housing and Infrastructure Products | +3 | % | -21 | % | ||||||||||
Company average | -8 | % | -9 | % | ||||||||||
Three Months Ended March 31, 2023 | ||||||||
Domestic US prices percentage change from prior-year period for fuel cost and feedstock | ||||||||
Fuel cost (Natural Gas) | -30 | % | ||||||
Feedstock (Ethane) | -38 | % | ||||||
Three Months Ended March 31, | ||||||||||||||
2023 | 2022 | |||||||||||||
(dollars in millions) | ||||||||||||||
Net cash provided by operating activities | $ | 512 | $ | 700 | ||||||||||
Changes in operating assets and liabilities and other | (121) | 106 | ||||||||||||
Deferred income taxes | 16 | (42) | ||||||||||||
Net income | 407 | 764 | ||||||||||||
Less: | ||||||||||||||
Other income, net | 22 | 11 | ||||||||||||
Interest expense | (42) | (46) | ||||||||||||
Provision for income taxes | (109) | (233) | ||||||||||||
Income from operations | 536 | 1,032 | ||||||||||||
Add: | ||||||||||||||
Depreciation and amortization | 267 | 257 | ||||||||||||
Other income, net | 22 | 11 | ||||||||||||
EBITDA | $ | 825 | $ | 1,300 |
Three Months Ended March 31, | ||||||||||||||
2023 | 2022 | |||||||||||||
(dollars in millions) | ||||||||||||||
Net cash provided by operating activities | $ | 512 | $ | 700 | ||||||||||
Less: | ||||||||||||||
Additions to property, plant and equipment | (267) | (263) | ||||||||||||
Free Cash Flow | $ | 245 | $ | 437 |
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) (3) | |||||||||||||||||||||||||||
Loan related to tax-exempt waste disposal revenue bonds due 2027 | 11 | December 1997 | December 2027 | (5) | ||||||||||||||||||||||||||||
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 | (4) | |||||||||||||||||||||||||||
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) (3) | |||||||||||||||||||||||||||
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") | 15 | March 2021 | March 2026 | (6) | ||||||||||||||||||||||||||||
Total long-term debt | $ | 4,988 |
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) | ||||||||||||||||||||||
January 2023 | 20,613 | $ | 100.03 | 19,993 | $ | 497,158,065 | ||||||||||||||||||||
February 2023 | 66,777 | 121.87 | — | 497,158,065 | ||||||||||||||||||||||
March 2023 | 259,465 | 108.33 | 181,749 | 477,162,187 | ||||||||||||||||||||||
346,855 | $ | 110.44 | 201,742 |
Exhibit No. | Exhibit Index | ||||||||||
3.1 | |||||||||||
3.2 | |||||||||||
3.3 | |||||||||||
3.4 | |||||||||||
3.5 | |||||||||||
3.6 | |||||||||||
31.1† | |||||||||||
31.2† | |||||||||||
32.1# | |||||||||||
101.INS† | XBRL Instance Document - The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | ||||||||||
101.SCH† | XBRL Taxonomy Extension Schema Document | ||||||||||
101.CAL† | XBRL Taxonomy Extension Calculation Linkbase Document | ||||||||||
101.DEF† | XBRL Taxonomy Extension Definition Linkbase Document | ||||||||||
101.LAB† | XBRL Taxonomy Extension Label Linkbase Document | ||||||||||
101.PRE† | XBRL Taxonomy Extension Presentation Linkbase Document | ||||||||||
104 | Cover Page Interactive Data File - The cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document and contained in Exhibit 101 |
WESTLAKE CORPORATION | ||||||||||||||||||||
Date: | May 4, 2023 | By: | /S/ ALBERT CHAO | |||||||||||||||||
Albert Chao | ||||||||||||||||||||
President and Chief Executive Officer (Principal Executive Officer) | ||||||||||||||||||||
Date: | May 4, 2023 | By: | /S/ M. STEVEN BENDER | |||||||||||||||||
M. Steven Bender | ||||||||||||||||||||
Executive Vice President and Chief Financial Officer (Principal Financial Officer) |
1. | I have reviewed this Quarterly Report on Form 10-Q of Westlake Corporation (the "registrant"); |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: | May 4, 2023 | /S/ ALBERT CHAO | |||||||||||||||||||||
Albert Chao | |||||||||||||||||||||||
President and Chief Executive Officer (Principal Executive Officer) |
1. | I have reviewed this Quarterly Report on Form 10-Q of Westlake Corporation (the "registrant"); |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: | May 4, 2023 | /S/ M. STEVEN BENDER | |||||||||||||||||||||
M. Steven Bender | |||||||||||||||||||||||
Executive Vice President and Chief Financial Officer (Principal Financial Officer) |
Date: | May 4, 2023 | /S/ ALBERT CHAO | |||||||||||||||||||||
Albert Chao | |||||||||||||||||||||||
President and Chief Executive Officer (Principal Executive Officer) | |||||||||||||||||||||||
Date: | May 4, 2023 | /S/ M. STEVEN BENDER | |||||||||||||||||||||
M. Steven Bender | |||||||||||||||||||||||
Executive Vice President and Chief Financial Officer (Principal Financial Officer) |
Consolidated Balance Sheets (Unaudited) (Parentheticals) - $ / shares |
Mar. 31, 2023 |
Dec. 31, 2022 |
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Preferred stock, par value, in dollars per share | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value, in dollars per share | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Common Stock | ||
Common Stock, Shares, Issued | 134,651,380 | 134,651,380 |
Common Stock, Held in Treasury | ||
Treasury Stock, Shares | 7,010,989 | 7,278,651 |
Consolidated Statements of Operations (Unaudited) - USD ($) $ in Millions |
3 Months Ended | |
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Mar. 31, 2023 |
Mar. 31, 2022 |
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Income Statement [Abstract] | ||
Net sales | $ 3,356 | $ 4,056 |
Cost of sales | 2,564 | 2,771 |
Gross profit | 792 | 1,285 |
Selling, general and administrative expenses | 222 | 200 |
Amortization of intangibles | 31 | 42 |
Restructuring, transaction and integration-related costs | 3 | 11 |
Income from operations | 536 | 1,032 |
Other income (expense) | ||
Interest expense | (42) | (46) |
Other income, net | 22 | 11 |
Income before income taxes | 516 | 997 |
Provision for income taxes | 109 | 233 |
Net income | 407 | 764 |
Net income attributable to noncontrolling interests | 13 | 8 |
Net income attributable to Westlake Corporation | $ 394 | $ 756 |
Earnings per common share attributable to Westlake Corporation: | ||
Basic (in dollars per share) | $ 3.07 | $ 5.87 |
Diluted (in dollars per share) | $ 3.05 | $ 5.83 |
Weighted average common shares outstanding: | ||
Basic (in shares) | 127,548,287 | 128,071,355 |
Diluted (in shares) | 128,459,368 | 128,925,099 |
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Millions |
3 Months Ended | |
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Mar. 31, 2023 |
Mar. 31, 2022 |
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Statement of Comprehensive Income [Abstract] | ||
Net income | $ 407 | $ 764 |
Foreign currency translation adjustments | ||
Foreign currency translation | 20 | (8) |
Income tax (provision) benefit on foreign currency translation | 3 | (3) |
Other, net of income tax | (1) | 0 |
Other comprehensive income (loss), net of income taxes | 22 | (11) |
Comprehensive income | 429 | 753 |
Comprehensive income attributable to noncontrolling interests, net of tax of $1 and $1 for the three months ended March 31, 2023 and 2022, respectively | 13 | 6 |
Comprehensive income attributable to Westlake Corporation | $ 416 | $ 747 |
Consolidated Statements of Comprehensive Income (Unaudited) Parenthetical - USD ($) $ in Millions |
3 Months Ended | |
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Mar. 31, 2023 |
Mar. 31, 2022 |
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Statement of Comprehensive Income [Abstract] | ||
Other Comprehensive Income (Loss), Tax, Portion Attributable to Noncontrolling Interest | $ 1 | $ 1 |
Basis of Financial Statements (Notes) |
3 Months Ended |
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Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Financial Statements | 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 consolidated financial statements and notes thereto of Westlake Corporation, included in the annual report on Form 10-K for the fiscal year ended December 31, 2022 (the "2022 Form 10-K"), filed with the SEC on February 22, 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, 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 March 31, 2023, its results of operations for the three months ended March 31, 2023 and 2022, and the changes in its cash position for the three months ended March 31, 2023 and 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, 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. Recently Issued Accounting Pronouncement Leases (Topic 842): Common Control Arrangements ASU 2023-01 In March 2023, the Financial Accounting Standards Board ("FASB") issued accounting standards update No. 2023-01 to amend certain provisions of ASC 842 that 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 asset’s useful life to the common control group regardless of the lease term. The amendment in this update is effective for all entities in fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early application is permitted. The Company is currently evaluating the impact of this accounting standard on the Company's consolidated financial position, results of operations and cash flows. Recently Adopted Accounting Standards Liabilities - Supplier Finance Programs (ASU No. 2022-04) In September 2022, the FASB issued accounting standards update No. 2022-04 to enhance transparency of supplier finance programs. Under the ASU, the buyer in a supplier finance program is required to disclose information about the key terms of the program, outstanding confirmed amounts as of the end of the 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 amendments in this update became effective for all entities for fiscal years beginning after December 15, 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, 2023, and the adoption did not have a material impact on the Company's consolidated financial position, results of operations and cash flows. Business Combinations - Accounting for Contract Assets and Contract Liabilities from Contracts with Customers Update (ASU No.2021-08) In October 2021, the FASB issued an accounting standards update that requires acquiring entities to 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 both the recognition and measurement of acquired revenue contracts with customers at the date of and after a business combination. The accounting standard became effective for reporting periods beginning after December 15, 2022. The Company adopted this accounting standard effective January 1, 2023, and the standard will be applicable to 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 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 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 statements. The Company continues to evaluate the IRA's impact as new information and guidance becomes available.
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Acquisitions |
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Business Combination and Asset Acquisition [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisition | Acquisitions Hexion Epoxy Business. On February 1, 2022, the Company completed its acquisition of Hexion's global epoxy business ("Westlake Epoxy") for a total final purchase consideration of $1,207. The assets acquired and liabilities assumed and the results of operations of the Westlake Epoxy business are included in the Performance and Essential Materials segment. The purchase accounting adjustments recorded since the date of the acquisition resulted in a $12 increase in goodwill. The intangible assets that have been acquired are being amortized over periods of 11 to 19 years. The information below represents the final purchase price allocation:
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Financial Instruments (Notes) |
3 Months Ended |
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Mar. 31, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |
Financial Instruments | Financial Instruments Restricted Cash and Cash Equivalents The Company had restricted cash and cash equivalents of $15 and $18 at March 31, 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 and are reflected primarily in other assets, net in the consolidated balance sheets.
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Accounts Receivable |
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Receivables [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Receivable | Accounts Receivable Accounts receivable consist of the following:
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Inventories |
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Inventories | Inventories Inventories consist of the following:
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Goodwill |
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Goodwill | Goodwill The gross carrying amounts and changes in the carrying amount of goodwill for the three months ended March 31, 2023 were as follows:
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Accounts Payable (Notes) |
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Accounts and Notes Payable | Accounts Payable Accounts payable consist of the following:
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Long-Term Debt |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-Term Debt | Long-Term Debt Long-term debt consists of the following:
Unamortized debt issuance costs on long-term debt were $40 as of March 31, 2023 and December 31, 2022. As of March 31, 2023, the Company was in compliance with all of its long-term debt covenants. Credit Agreement On June 9, 2022, the Company entered into a new $1,500 revolving credit facility that is scheduled to mature on 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) Adjusted Term Secured Overnight Financing Rate (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 March 31, 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 March 31, 2023, the Company had no borrowings and no letters of credit outstanding, and had borrowing availability of $1,500, under the Credit Agreement.
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Accumulated Other Comprehensive Income (Loss) |
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Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) Changes in accumulated other comprehensive income (loss) by component for the three months ended March 31, 2023 and 2022 were as follows:
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | 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. Level 3: Unobservable inputs that are not corroborated by market data. The Company has 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 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 approximate their fair value due to the short maturities of these instruments. The majority of the Company's long-term debt instruments are publicly-traded. A market approach, based upon quotes from financial reporting 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:
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Income Taxes (Notes) |
3 Months Ended |
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Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income TaxesThe effective income tax rate was 21.1% for the three months ended March 31, 2023 as compared to 23.4% for the three months ended March 31, 2022. The effective income tax rate for the three months ended March 31, 2023 and March 31, 2022 was above the statutory rate of 21.0% primarily due to state and foreign taxes partially offset by U.S. federal research and development credits available to the Company. |
Earnings and Dividends per Share (Notes) |
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Earnings and Dividends Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings per Share | 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 each period. Diluted earnings per share include the effects of certain stock options and performance stock units.
The following table reconciles the denominator for the basic and diluted earnings per share computations shown in the consolidated statements of operations:
Excluded from the computation of diluted earnings per share are options to purchase 307,411 and 102,025 shares of common stock for the three months ended March 31, 2023 and 2022, respectively. These options were outstanding during the periods reported but were excluded because the effect of including them would have been antidilutive. Dividends per Share Dividends declared per common share for the three months ended March 31, 2023 and 2022 were as follows:
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Supplemental Information (Notes) |
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Mar. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Information | Supplemental Information Equity Method Investments LACC, LLC Joint Venture As of March 31, 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 three months ended March 31, 2023 was as follows:
Other Assets, Net Other assets, net were $662 and $569 at March 31, 2023 and December 31, 2022, respectively. Deferred turnaround costs, net of accumulated amortization, included in other assets, net were $414 and $359 at March 31, 2023 and December 31, 2022, respectively. Accrued and Other Liabilities Accrued and other liabilities were $1,331 and $1,409 at March 31, 2023 and December 31, 2022, respectively. Accrued rebates, current portion of operating lease liabilities and accrued income taxes, which are components of accrued and other liabilities, were $177, $114 and $237, respectively, at March 31, 2023 and $227, $112 and $169, respectively, at December 31, 2022. No other component of accrued and other liabilities was more than five percent of total current liabilities. Accrued liabilities with related parties were $31 and $44 at March 31, 2023 and December 31, 2022, respectively. Restructuring, Transaction and Integration-Related Costs The restructuring, transaction and integration-related costs of $3 for the three months ended March 31, 2023 and of $11 for the three months ended March 31, 2022, primarily consisted of costs associated with the Company's recent acquisitions. Non-cash Investing Activity Capital expenditure related liabilities, included in accounts payable and accrued and other liabilities, were $111 and $108 at March 31, 2023 and March 31, 2022, respectively. Operating Lease Supplemental Cash Flow Right-of-use assets obtained in exchange for operating lease obligations were $56 and $98 for the three months ended March 31, 2023 and 2022, respectively.
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Commitments and Contingencies (Notes) |
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Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 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 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 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 March 31, 2023 and December 31, 2022, the Company had reserves for environmental contingencies totaling approximately $54 and $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. Calvert City Proceedings. For several years, the Environmental Protection Agency (the "EPA") has been conducting remedial investigation and feasibility studies at the Company's Calvert City, Kentucky facility pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 ("CERCLA"). As the current owner of the Calvert City facility, the Company 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 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 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 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. 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 allocable costs at issue are up to $22, for which Avient claims the Company is totally liable. The Company disputes these claims and at this time, the 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 verdict finding that 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 pay any amount of damages, the Company intends to appeal that decision to the Court of Appeals. Upon receipt of the jury verdict, the Company reserved approximately $70, for the damages awarded to Triad Hunter. Environmental Remediation: Reasonably Possible Matters. The Company's assessment of the potential impact of environmental contingencies is subject to considerable uncertainty due to the complex, ongoing and evolving process of investigation and remediation, if necessary, of such environmental contingencies, and the potential for technological and regulatory developments. As such, in addition to the amounts currently reserved, the Company may be subject to reasonably possible loss contingencies related to environmental matters in the range of $75 to $135.
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Segment Information (Notes) |
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Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | Segment Information The Company operates in two principal operating segments: Performance and 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.
A reconciliation of total segment income from operations to consolidated income before income taxes is as follows:
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Westlake Chemical Partners LP (Notes) |
3 Months Ended |
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Mar. 31, 2023 | |
Partners' Capital [Abstract] | |
Westlake Chemical Partners LP | Westlake Chemical Partners LP In 2014, the Company formed Westlake Chemical Partners LP ("Westlake Partners") to operate, acquire and develop ethylene production facilities and related assets. Also in 2014, Westlake Partners completed its initial public offering of 12,937,500 common units. As of March 31, 2023, Westlake Partners had a 22.8% limited partner interest in Westlake Chemical OpCo LP ("OpCo"), and the Company retained a 77.2% limited partner interest in OpCo and a significant interest in Westlake Partners through the Company's ownership of 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, from time to time, up to an aggregate offering amount of $50. This Equity Distribution Agreement was amended on February 28, 2020 to reference a new shelf registration and subsequent renewals thereof for utilization under this agreement. No common units were issued under this program as of March 31, 2023.
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Basis of Financial Statements (Policies) |
3 Months Ended |
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Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
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 consolidated financial statements and notes thereto of Westlake Corporation, included in the annual report on Form 10-K for the fiscal year ended December 31, 2022 (the "2022 Form 10-K"), filed with the SEC on February 22, 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, 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 March 31, 2023, its results of operations for the three months ended March 31, 2023 and 2022, and the changes in its cash position for the three months ended March 31, 2023 and 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, 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.
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Recent Accounting Pronouncements | Recently Issued Accounting Pronouncement Leases (Topic 842): Common Control Arrangements ASU 2023-01 In March 2023, the Financial Accounting Standards Board ("FASB") issued accounting standards update No. 2023-01 to amend certain provisions of ASC 842 that 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 asset’s useful life to the common control group regardless of the lease term. The amendment in this update is effective for all entities in fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early application is permitted. The Company is currently evaluating the impact of this accounting standard on the Company's consolidated financial position, results of operations and cash flows. Recently Adopted Accounting Standards Liabilities - Supplier Finance Programs (ASU No. 2022-04) In September 2022, the FASB issued accounting standards update No. 2022-04 to enhance transparency of supplier finance programs. Under the ASU, the buyer in a supplier finance program is required to disclose information about the key terms of the program, outstanding confirmed amounts as of the end of the 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 amendments in this update became effective for all entities for fiscal years beginning after December 15, 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, 2023, and the adoption did not have a material impact on the Company's consolidated financial position, results of operations and cash flows. Business Combinations - Accounting for Contract Assets and Contract Liabilities from Contracts with Customers Update (ASU No.2021-08) In October 2021, the FASB issued an accounting standards update that requires acquiring entities to 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 both the recognition and measurement of acquired revenue contracts with customers at the date of and after a business combination. The accounting standard became effective for reporting periods beginning after December 15, 2022. The Company adopted this accounting standard effective January 1, 2023, and the standard will be applicable to future business combinations.
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Acquisitions (Tables) |
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Business Combination and Asset Acquisition [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The information below represents the final purchase price allocation:
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Accounts Receivable (Tables) |
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Receivables [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Receivable | Accounts receivable consist of the following:
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Inventories (Tables) |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Inventory | Inventories consist of the following:
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Goodwill (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill | The gross carrying amounts and changes in the carrying amount of goodwill for the three months ended March 31, 2023 were as follows:
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Accounts Payable (Tables) |
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Payable [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accounts Payable | Accounts payable consist of the following:
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Long-Term Debt (Tables) |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Long-Term Debt | Long-term debt consists of the following:
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Accumulated Other Comprehensive Income (Loss) (Tables) |
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Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accumulated Other Comprehensive Income (Loss) | Changes in accumulated other comprehensive income (loss) by component for the three months ended March 31, 2023 and 2022 were as follows:
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Fair Value Measurements (Tables) |
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Summary Of Carrying And Fair Values Of Long-Term Debt | The carrying and fair values of the Company's total long-term debt are summarized below:
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Earnings and Dividends per Share (Tables) |
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Earnings and Dividends Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Net Income Attributable To Common Stockholders | Diluted earnings per share include the effects of certain stock options and performance stock units.
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Reconciliation Of Denominator For Basic And Diluted Earnings Per Share | The following table reconciles the denominator for the basic and diluted earnings per share computations shown in the consolidated statements of operations:
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Dividends Per Share | Dividends per Share Dividends declared per common share for the three months ended March 31, 2023 and 2022 were as follows:
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Supplemental Information (Tables) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in Investment | The Company accounts for its investment in LACC under the equity method of accounting and the change for the three months ended March 31, 2023 was as follows:
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Schedule of Cash Flow Information | Cash Flow Information
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Segment Information (Tables) |
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Segment Reporting Information |
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Reconciliation Of Total Segment Income From Operations To Consolidated Income Before Income Taxes | A reconciliation of total segment income from operations to consolidated income before income taxes is as follows:
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Total Assets |
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Basis of Financial Statements (Details) |
3 Months Ended |
---|---|
Mar. 31, 2023
Segment
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of segments | 2 |
Acquisitions - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 14 Months Ended | |
---|---|---|---|
Feb. 01, 2022 |
Mar. 31, 2023 |
Mar. 31, 2023 |
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Business Acquisition [Line Items] | |||
Measurement period adjustments | $ 5 | ||
Hexion | |||
Business Acquisition [Line Items] | |||
Business Combination, Consideration Transferred | $ 1,207 | ||
Measurement period adjustments | $ 12 | ||
Minimum | Hexion | |||
Business Acquisition [Line Items] | |||
Finite-lived intangible asset useful life | 11 years | ||
Maximum | Hexion | |||
Business Acquisition [Line Items] | |||
Finite-lived intangible asset useful life | 19 years |
Acquisitions - Purchase Price Allocation (Details) - Hexion $ in Millions |
Feb. 01, 2022
USD ($)
|
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Business Acquisition [Line Items] | |
Cash | $ 42 |
Accounts receivable | 299 |
Inventories | 346 |
Prepaid expenses and other current assets | 22 |
Property, plant and equipment | 664 |
Operating lease right-of-use assets | 59 |
Intangible assets | 145 |
Other assets | 104 |
Total assets acquired | 1,681 |
Accounts payable | 189 |
Accrued and other liabilities | 88 |
Deferred income taxes | 96 |
Pensions and other post-retirement benefits | 163 |
Operating lease liabilities | 48 |
Other liabilities | 19 |
Total liabilities assumed | 603 |
Total identifiable net assets acquired | 1,078 |
Noncontrolling interest | (2) |
Goodwill acquired during the period | 131 |
Business Combination, Consideration Transferred | $ 1,207 |
Financial Instruments (Narrative) (Details) - USD ($) $ in Millions |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Investments, Debt and Equity Securities [Abstract] | ||
Restricted Cash and Cash Equivalents | $ 15 | $ 18 |
Accounts Receivable (Details) - USD ($) $ in Millions |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Receivables [Abstract] | ||
Trade customers | $ 1,753 | $ 1,676 |
Related parties | 3 | 3 |
Allowance for credit losses | (28) | (28) |
Accounts receivable from trade customers, net | 1,728 | 1,651 |
Federal and state taxes | 35 | 69 |
Other | 72 | 81 |
Accounts receivable, net | $ 1,835 | $ 1,801 |
Inventories (Details) - USD ($) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
Dec. 31, 2022 |
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Inventory Disclosure [Abstract] | |||
Finished products | $ 1,185 | $ 1,157 | |
Feedstock, additives, chemicals and other raw materials | 440 | 495 | |
Materials and supplies | 217 | 213 | |
Inventories | $ 1,842 | $ 1,866 | |
U.S. federal statutory income tax rate | 21.00% | 21.00% |
Goodwill (Details) $ in Millions |
3 Months Ended |
---|---|
Mar. 31, 2023
USD ($)
| |
Goodwill [Roll Forward] | |
Beginning Balance | $ 2,161 |
Measurement period adjustments | 5 |
Effects of changes in foreign exchange rates | 1 |
Ending Balance | 2,167 |
Performance and Essential Materials | |
Goodwill [Roll Forward] | |
Beginning Balance | 1,020 |
Measurement period adjustments | 4 |
Effects of changes in foreign exchange rates | 1 |
Ending Balance | 1,025 |
Housing and Infrastructure Products | |
Goodwill [Roll Forward] | |
Beginning Balance | 1,141 |
Measurement period adjustments | 1 |
Effects of changes in foreign exchange rates | 0 |
Ending Balance | $ 1,142 |
Accounts Payable (Details) - USD ($) $ in Millions |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Accounts Payable [Abstract] | ||
Accounts payable—third parties | $ 811 | $ 870 |
Accounts payable to related parties | 15 | 16 |
Notes payable | 2 | 3 |
Accounts payable | $ 828 | $ 889 |
Long-Term Debt (Narrative) (Details) - USD ($) $ in Millions |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Debt Disclosure [Abstract] | ||
Unamortized debt issuance cost | $ 40 | $ 40 |
Fair Value Measurements (Summary of Carrying and Fair Values of Long Term Debt) (Details) - USD ($) $ in Millions |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Fair Value Disclosures [Abstract] | ||
Long-term Debt | $ 4,892 | $ 4,879 |
Fair Value | $ 4,088 | $ 3,940 |
Income Taxes (Details) |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
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Income Tax Disclosure [Abstract] | ||
Effective income tax rate | 21.10% | 23.40% |
U.S. federal statutory income tax rate | 21.00% | 21.00% |
Earnings and Dividends per Share (Schedule of Net Income Attributable to Common Stockholders) (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
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Earnings and Dividends Per Share [Abstract] | ||
Net income attributable to Westlake Chemical Corporation | $ 394 | $ 756 |
Net income attributable to participating securities | (2) | (4) |
Net income attributable to common shareholders | $ 392 | $ 752 |
Earnings and Dividends per Share (Reconciliation of Denominator for Basic and Diluted Earnings Per Share) (Details) - $ / shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
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Earnings and Dividends Per Share [Abstract] | ||
Weighted average common shares—basic | 127,548,287 | 128,071,355 |
Weighted Average Number Diluted Shares Outstanding Adjustment | 911,081 | 853,744 |
Weighted average common shares-diluted | 128,459,368 | 128,925,099 |
Earnings per share attributable to Westlake Chemical Corporation: Basic (in dollars per share) | $ 3.07 | $ 5.87 |
Earnings per share attributable to Westlake Chemical Corporation: Diluted (in dollars per share) | $ 3.05 | $ 5.83 |
Earnings and Dividends per Share (Additional Information) (Details) - shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
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Earnings and Dividends Per Share [Abstract] | ||
Number of options excluded from computation of diluted earnings per share | 307,411 | 102,025 |
Earnings and Dividends per Share Dividends Per Share (Details) - $ / shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
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Earnings and Dividends Per Share [Abstract] | ||
Dividends per common share (in usd per share) | $ 0.3570 | $ 0.2975 |
Supplemental Information (Equity Method Investments) (Details) - LACC, LLC $ in Millions |
3 Months Ended |
---|---|
Mar. 31, 2023
USD ($)
| |
Schedule of Equity Method Investments [Line Items] | |
Ownership interest (percent) | 50.00% |
Equity Method Investments Activity [Roll Forward] | |
Beginning balance | $ 1,075 |
Depreciation and amortization | (13) |
Ending balance | $ 1,062 |
Supplemental Information (Additional Information) (Details) - USD ($) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
Dec. 31, 2022 |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Other assets, net | $ 662 | $ 569 | |
Deferred Turnaround Costs, Net | 414 | 359 | |
Accrued Liabilities and Other Liabilities [Abstract] | |||
Accrued and other liabilities | 1,331 | 1,409 | |
Accrued rebates | 177 | 227 | |
Accrued and other liabilities | 114 | 112 | |
Accrued income taxes | 237 | 169 | |
Accrued liabilities with related parties | 31 | $ 44 | |
Restructuring, transaction and integration-related costs | 3 | $ 11 | |
Noncash Investing and Financing Items [Abstract] | |||
Capital Expenditures Incurred but Not yet Paid | 111 | 108 | |
Right-of-use assets obtained in exchange for operating lease obligations | 56 | 98 | |
Interest Paid, Excluding Capitalized Interest, Operating Activities | 54 | 60 | |
Income Taxes Paid, Net | $ 23 | $ 9 |
Segment Information (Additional Information) (Detail) |
3 Months Ended |
---|---|
Mar. 31, 2023
Segment
| |
Segment Reporting [Abstract] | |
Number of segments | 2 |
Segment Information (Reconciliation of Total Segment Income from Operations to Consolidated Income before Income Taxes) (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Segment Reporting [Abstract] | ||
Income from operations | $ 536 | $ 1,032 |
Interest expense | (42) | (46) |
Other income, net | 22 | 11 |
Income before income taxes | $ 516 | $ 997 |
Segment Information (Total Assets) (Details) - USD ($) $ in Millions |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | $ 20,806 | $ 20,550 |
Operating Segments | Performance and Essential Materials | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | 14,114 | 13,978 |
Operating Segments | Housing and Infrastructure Products | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | 5,073 | 5,022 |
Corporate and other | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | $ 1,619 | $ 1,550 |
Westlake Chemical Partners LP (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Oct. 04, 2018 |
Mar. 31, 2023 |
Dec. 31, 2014 |
|
Related Party Transaction [Line Items] | |||
Partners' capital, sold in public offering (in shares) | 12,937,500 | ||
Partners' Units, Maximum Aggregate Offering Amount, ATM | $ 50 | ||
Subsidiary of Common Parent | Limited Partner | Westlake Chemical OpCo LP | |||
Related Party Transaction [Line Items] | |||
Limited Liability Company (LLC) or Limited Partnership (LP), Managing Member or General Partner, Ownership Interest | 22.80% | ||
Limited Liability Company or Limited Partnership, Members or Limited Partners, Ownership Interest | 77.20% | ||
Subsidiary of Common Parent | Limited Partner | Westlake Chemical Partners LP | |||
Related Party Transaction [Line Items] | |||
Limited Liability Company or Limited Partnership, Members or Limited Partners, Ownership Interest | 40.10% | ||
Ownership interest (in shares) | 14,122,230 |
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