(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
| ||||||||||||||
(Address of principal executive offices) | (Zip Code) |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
WESTLAKE CHEMICAL CORPORATION | ||||||||||||||
Date: | By: | /S/ ALBERT CHAO | ||||||||||||
Albert Chao President and Chief Executive Officer |
Three Months Ended September 30, 2023 | Three Months Ended June 30, 2023 | Three Months Ended September 30, 2022 | ||||||||||||||||||
Westlake Corporation | ||||||||||||||||||||
Net sales | $ | 3,115 | $ | 3,251 | $ | 3,956 | ||||||||||||||
Income from operations | $ | 349 | $ | 396 | $ | 516 | ||||||||||||||
Operating income margin | 11% | 12% | 13% | |||||||||||||||||
Net income attributable to Westlake Corporation | $ | 285 | $ | 297 | $ | 401 | ||||||||||||||
Diluted earnings per common share | $ | 2.20 | $ | 2.31 | $ | 3.10 | ||||||||||||||
EBITDA | $ | 682 | $ | 690 | $ | 804 | ||||||||||||||
EBITDA margin | 22% | 21% | 20% | |||||||||||||||||
Performance and Essential Materials ("PEM") Segment | ||||||||||||||||||||
Net sales | $ | 1,971 | $ | 2,136 | $ | 2,711 | ||||||||||||||
Income from operations | $ | 105 | $ | 215 | $ | 353 | ||||||||||||||
Operating income margin | 5% | 10% | 13% | |||||||||||||||||
EBITDA | $ | 339 | $ | 435 | $ | 561 | ||||||||||||||
EBITDA margin | 17% | 20% | 21% | |||||||||||||||||
Housing and Infrastructure Products ("HIP") Segment | ||||||||||||||||||||
Net sales | $ | 1,144 | $ | 1,115 | $ | 1,245 | ||||||||||||||
Income from operations | $ | 256 | $ | 190 | $ | 186 | ||||||||||||||
Operating income margin | 22% | 17% | 15% | |||||||||||||||||
EBITDA | $ | 327 | $ | 244 | $ | 254 | ||||||||||||||
EBITDA margin | 29% | 22% | 20% |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
(In millions of dollars, except per share data and share amounts) | ||||||||||||||||||||||||||
Net sales | $ | 3,115 | $ | 3,956 | $ | 9,722 | $ | 12,495 | ||||||||||||||||||
Cost of sales | 2,529 | 3,180 | 7,702 | 8,989 | ||||||||||||||||||||||
Gross profit | 586 | 776 | 2,020 | 3,506 | ||||||||||||||||||||||
Selling, general and administrative expenses | 206 | 215 | 641 | 635 | ||||||||||||||||||||||
Amortization of intangibles | 31 | 39 | 92 | 124 | ||||||||||||||||||||||
Restructuring, transaction and integration-related costs | — | 6 | 6 | 24 | ||||||||||||||||||||||
Income from operations | 349 | 516 | 1,281 | 2,723 | ||||||||||||||||||||||
Interest expense | (40) | (44) | (124) | (134) | ||||||||||||||||||||||
Other income, net | 56 | 24 | 101 | 52 | ||||||||||||||||||||||
Income before income taxes | 365 | 496 | 1,258 | 2,641 | ||||||||||||||||||||||
Provision for income taxes | 70 | 84 | 249 | 592 | ||||||||||||||||||||||
Net income | 295 | 412 | 1,009 | 2,049 | ||||||||||||||||||||||
Net income attributable to noncontrolling interests | 10 | 11 | 33 | 34 | ||||||||||||||||||||||
Net income attributable to Westlake Corporation | $ | 285 | $ | 401 | $ | 976 | $ | 2,015 | ||||||||||||||||||
Earnings per common share attributable to Westlake Corporation: | ||||||||||||||||||||||||||
Basic | $ | 2.22 | $ | 3.12 | $ | 7.61 | $ | 15.65 | ||||||||||||||||||
Diluted | $ | 2.20 | $ | 3.10 | $ | 7.56 | $ | 15.54 | ||||||||||||||||||
Weighted average common shares outstanding: | ||||||||||||||||||||||||||
Basic | 127,854,464 | 127,943,400 | 127,685,210 | 128,118,160 | ||||||||||||||||||||||
Diluted | 128,583,927 | 128,747,012 | 128,509,618 | 129,003,750 |
September 30, 2023 | December 31, 2022 | |||||||||||||
(In millions of dollars) | ||||||||||||||
ASSETS | ||||||||||||||
Current assets | ||||||||||||||
Cash and cash equivalents | $ | 3,057 | $ | 2,228 | ||||||||||
Accounts receivable, net | 1,939 | 1,801 | ||||||||||||
Inventories | 1,672 | 1,866 | ||||||||||||
Prepaid expenses and other current assets | 89 | 78 | ||||||||||||
Total current assets | 6,757 | 5,973 | ||||||||||||
Property, plant and equipment, net | 8,570 | 8,525 | ||||||||||||
Other assets, net | 6,069 | 6,052 | ||||||||||||
Total assets | $ | 21,396 | $ | 20,550 | ||||||||||
LIABILITIES AND EQUITY | ||||||||||||||
Current liabilities (accounts payable and accrued and other liabilities) | $ | 2,360 | $ | 2,298 | ||||||||||
Current portion of long-term debt, net | 299 | — | ||||||||||||
Long-term debt, net | 4,574 | 4,879 | ||||||||||||
Other liabilities | 2,878 | 2,908 | ||||||||||||
Total liabilities | 10,111 | 10,085 | ||||||||||||
Total Westlake Corporation stockholders' equity | 10,754 | 9,931 | ||||||||||||
Noncontrolling interests | 531 | 534 | ||||||||||||
Total equity | 11,285 | 10,465 | ||||||||||||
Total liabilities and equity | $ | 21,396 | $ | 20,550 |
Nine Months Ended September 30, | ||||||||||||||
2023 | 2022 | |||||||||||||
(In millions of dollars) | ||||||||||||||
Cash flows from operating activities | ||||||||||||||
Net income | $ | 1,009 | $ | 2,049 | ||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||
Depreciation and amortization | 815 | 785 | ||||||||||||
Deferred income taxes | (67) | 44 | ||||||||||||
Net loss on disposition and others | 43 | 86 | ||||||||||||
Other balance sheet changes | (37) | (404) | ||||||||||||
Net cash provided by operating activities | 1,763 | 2,560 | ||||||||||||
Cash flows from investing activities | ||||||||||||||
Acquisition of business, net of cash acquired | — | (1,171) | ||||||||||||
Additions to investments in unconsolidated subsidiaries | (18) | (177) | ||||||||||||
Additions to property, plant and equipment | (752) | (811) | ||||||||||||
Other, net | 20 | 11 | ||||||||||||
Net cash used for investing activities | (750) | (2,148) | ||||||||||||
Cash flows from financing activities | ||||||||||||||
Distributions to noncontrolling interests | (33) | (34) | ||||||||||||
Dividends paid | (156) | (123) | ||||||||||||
Proceeds from exercise of stock options | 39 | 17 | ||||||||||||
Repayment of senior notes | — | (250) | ||||||||||||
Repurchase of common stock for treasury | (23) | (68) | ||||||||||||
Other, net | (2) | (22) | ||||||||||||
Net cash used for financing activities | (175) | (480) | ||||||||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (12) | (67) | ||||||||||||
Net increase (decrease) in cash, cash equivalents and restricted cash | 826 | (135) | ||||||||||||
Cash, cash equivalents and restricted cash at beginning of period | 2,246 | 1,941 | ||||||||||||
Cash, cash equivalents and restricted cash at end of period | $ | 3,072 | $ | 1,806 | ||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
(In millions of dollars) | ||||||||||||||||||||||||||
Net external sales | ||||||||||||||||||||||||||
Performance and Essential Materials | ||||||||||||||||||||||||||
Performance Materials | $ | 1,127 | $ | 1,689 | $ | 3,549 | $ | 5,678 | ||||||||||||||||||
Essential Materials | 844 | 1,022 | 2,907 | 2,969 | ||||||||||||||||||||||
Total Performance and Essential Materials | 1,971 | 2,711 | 6,456 | 8,647 | ||||||||||||||||||||||
Housing and Infrastructure Products | ||||||||||||||||||||||||||
Housing Products | 963 | 1,018 | 2,699 | 3,106 | ||||||||||||||||||||||
Infrastructure Products | 181 | 227 | 567 | 742 | ||||||||||||||||||||||
Total Housing and Infrastructure Products | 1,144 | 1,245 | 3,266 | 3,848 | ||||||||||||||||||||||
$ | 3,115 | $ | 3,956 | $ | 9,722 | $ | 12,495 | |||||||||||||||||||
Income (loss) from operations | ||||||||||||||||||||||||||
Performance and Essential Materials | $ | 105 | $ | 353 | $ | 723 | $ | 2,197 | ||||||||||||||||||
Housing and Infrastructure Products | 256 | 186 | 589 | 607 | ||||||||||||||||||||||
Corporate and other | (12) | (23) | (31) | (81) | ||||||||||||||||||||||
$ | 349 | $ | 516 | $ | 1,281 | $ | 2,723 | |||||||||||||||||||
Depreciation and amortization | ||||||||||||||||||||||||||
Performance and Essential Materials | $ | 225 | $ | 196 | $ | 652 | $ | 572 | ||||||||||||||||||
Housing and Infrastructure Products | 51 | 65 | 157 | 206 | ||||||||||||||||||||||
Corporate and other | 1 | 3 | 6 | 7 | ||||||||||||||||||||||
$ | 277 | $ | 264 | $ | 815 | $ | 785 | |||||||||||||||||||
Other income, net | ||||||||||||||||||||||||||
Performance and Essential Materials | $ | 9 | $ | 12 | $ | 14 | $ | 25 | ||||||||||||||||||
Housing and Infrastructure Products | 20 | 3 | 30 | 9 | ||||||||||||||||||||||
Corporate and other | 27 | 9 | 57 | 18 | ||||||||||||||||||||||
$ | 56 | $ | 24 | $ | 101 | $ | 52 |
Three Months Ended June 30, | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||
2023 | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||||||||
(In millions of dollars, except percentages) | ||||||||||||||||||||||||||||||||
Net cash provided by operating activities | $ | 555 | $ | 696 | $ | 947 | $ | 1,763 | $ | 2,560 | ||||||||||||||||||||||
Changes in operating assets and liabilities and other | (283) | (417) | (572) | (821) | (467) | |||||||||||||||||||||||||||
Deferred income taxes | 35 | 16 | 37 | 67 | (44) | |||||||||||||||||||||||||||
Net income | 307 | 295 | 412 | 1,009 | 2,049 | |||||||||||||||||||||||||||
Less: | ||||||||||||||||||||||||||||||||
Other income, net | 23 | 56 | 24 | 101 | 52 | |||||||||||||||||||||||||||
Interest expense | (42) | (40) | (44) | (124) | (134) | |||||||||||||||||||||||||||
Provision for income taxes | (70) | (70) | (84) | (249) | (592) | |||||||||||||||||||||||||||
Income from operations | 396 | 349 | 516 | 1,281 | 2,723 | |||||||||||||||||||||||||||
Add: | ||||||||||||||||||||||||||||||||
Depreciation and amortization | 271 | 277 | 264 | 815 | 785 | |||||||||||||||||||||||||||
Other income, net | 23 | 56 | 24 | 101 | 52 | |||||||||||||||||||||||||||
EBITDA | $ | 690 | $ | 682 | $ | 804 | $ | 2,197 | $ | 3,560 | ||||||||||||||||||||||
Net external sales | $ | 3,251 | $ | 3,115 | $ | 3,956 | $ | 9,722 | $ | 12,495 | ||||||||||||||||||||||
Operating Income Margin | 12% | 11% | 13% | 13% | 22% | |||||||||||||||||||||||||||
EBITDA Margin | 21% | 22% | 20% | 23% | 28% |
Three Months Ended June 30, | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||
2023 | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||||||||
(In millions of dollars) | ||||||||||||||||||||||||||||||||
Net cash provided by operating activities | $ | 555 | $ | 696 | $ | 947 | $ | 1,763 | $ | 2,560 | ||||||||||||||||||||||
Less: | ||||||||||||||||||||||||||||||||
Additions to property, plant and equipment | (240) | (245) | $ | (318) | (752) | (811) | ||||||||||||||||||||||||||
Free Cash Flow | $ | 315 | $ | 451 | $ | 629 | $ | 1,011 | $ | 1,749 |
Three Months Ended June 30, | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||
2023 | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||||||||
(In millions of dollars, except percentages) | ||||||||||||||||||||||||||||||||
Performance and Essential Materials Segment | ||||||||||||||||||||||||||||||||
Income from operations | $ | 215 | $ | 105 | $ | 353 | $ | 723 | $ | 2,197 | ||||||||||||||||||||||
Add: | ||||||||||||||||||||||||||||||||
Depreciation and amortization | 217 | 225 | 196 | 652 | 572 | |||||||||||||||||||||||||||
Other income, net | 3 | 9 | 12 | 14 | 25 | |||||||||||||||||||||||||||
EBITDA | $ | 435 | $ | 339 | $ | 561 | $ | 1,389 | $ | 2,794 | ||||||||||||||||||||||
Net external sales | $ | 2,136 | $ | 1,971 | $ | 2,711 | $ | 6,456 | $ | 8,647 | ||||||||||||||||||||||
Operating Income Margin | 10% | 5% | 13% | 11% | 25% | |||||||||||||||||||||||||||
EBITDA Margin | 20% | 17% | 21% | 22% | 32% | |||||||||||||||||||||||||||
Three Months Ended June 30, | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||
2023 | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||||||||
(In millions of dollars, except percentages) | ||||||||||||||||||||||||||||||||
Housing and Infrastructure Products Segment | ||||||||||||||||||||||||||||||||
Income from operations | $ | 190 | $ | 256 | $ | 186 | $ | 589 | $ | 607 | ||||||||||||||||||||||
Add: | ||||||||||||||||||||||||||||||||
Depreciation and amortization | 51 | 51 | 65 | 157 | 206 | |||||||||||||||||||||||||||
Other income, net | 3 | 20 | 3 | 30 | 9 | |||||||||||||||||||||||||||
EBITDA | $ | 244 | $ | 327 | $ | 254 | $ | 776 | $ | 822 | ||||||||||||||||||||||
Net external sales | $ | 1,115 | $ | 1,144 | $ | 1,245 | $ | 3,266 | $ | 3,848 | ||||||||||||||||||||||
Operating Income Margin | 17% | 22% | 15% | 18% | 16% | |||||||||||||||||||||||||||
EBITDA Margin | 22% | 29% | 20% | 24% | 21% |
Third Quarter 2023 vs. Third Quarter 2022 | Third Quarter 2023 vs. Second Quarter 2023 | |||||||||||||||||||||||||
Average Sales Price | Volume | Average Sales Price | Volume | |||||||||||||||||||||||
Performance and Essential Materials | -26 | % | -1 | % | -10 | % | +2 | % | ||||||||||||||||||
Housing and Infrastructure Products | -8 | % | — | % | -5 | % | +7 | % | ||||||||||||||||||
Company | -20 | % | -1 | % | -8 | % | +4 | % |
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