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What changed in WESTLAKE CORP's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of WESTLAKE CORP's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+439 added−372 removedSource: 10-K (2025-02-25) vs 10-K (2024-02-22)

Top changes in WESTLAKE CORP's 2024 10-K

439 paragraphs added · 372 removed · 308 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

77 edited+21 added−17 removed82 unchanged
Biggest changeAs of February 14, 2024, we (directly and through OpCo, our investment in LACC, and our 95%- and 60%-owned joint ventures in China and Taiwan, respectively) had approximately 43.3 billion pounds per year of aggregate production capacity at numerous manufacturing sites in North America, Europe and Asia in our Performance and Essential Materials segment. 2 Ta ble of Contents The following table illustrates our Performance and Essential Materials segment production capacities at February 14, 2024 by principal product and the end uses of these products: Product (1) Annual Capacity (2) End Uses Principal Manufacturing Facilities (4) (5) (6) (Millions of pounds) Ethylene (3) 4,820 VCM, polyethylene, EDC, styrene, ethylene oxide/ethylene glycol Calvert City, Kentucky Lake Charles, Louisiana Chlorine 7,400 VCM, EDC, organic/inorganic chemicals, bleach and water treatment Calvert City, Kentucky Geismar, Louisiana Lake Charles, Louisiana Plaquemine, Louisiana Natrium, West Virginia Gendorf and Knapsack, Germany Caustic Soda 8,140 Pulp and paper, organic/inorganic chemicals, neutralization and alumina Calvert City, Kentucky Geismar, Louisiana Lake Charles, Louisiana Plaquemine, Louisiana Natrium, West Virginia Gendorf and Knapsack, Germany VCM 7,940 PVC, PVC Compounds Calvert City, Kentucky Geismar, Louisiana Lake Charles, Louisiana Plaquemine, Louisiana Gendorf and Knapsack, Germany Specialty PVC 980 Automotive sealants, cable sheathing, medical applications and other applications Burghausen, Cologne, and Gendorf, Germany Commodity PVC 6,820 Construction materials including pipe, siding, profiles for windows and doors, film and sheet for packaging and other applications Calvert City, Kentucky Geismar, Louisiana Plaquemine, Louisiana Aberdeen, Mississippi Cologne and Knapsack, Germany Low-Density Polyethylene ("LDPE") 1,500 High clarity packaging and bags, shrink films, food packaging, coated paper board, cup stock, paper folding cartons, lids, closures and general purpose molding Lake Charles, Louisiana Longview, Texas Linear Low-Density Polyethylene ("LLDPE") 1,070 Heavy-duty films and bags, general purpose liners Lake Charles, Louisiana Longview, Texas Chlorinated Derivative Materials 2,190 Coatings, flavorants, films, refrigerants, water treatment applications, chemicals and pharmaceutical production Lake Charles, Louisiana Natrium, West Virginia Styrene 570 Consumer disposables, packaging material, appliances, paints and coatings, resins and building materials Lake Charles, Louisiana 3 Ta ble of Contents Product (1) Annual Capacity (2) End Uses Principal Manufacturing Facilities (4) (5) (6) (Millions of pounds) Epoxy Specialty Resins 580 Protective Coatings and Adhesive Applications; Building and bridge construction, flooring, transportation, oil & gas Electrical Applications; Generators and bushings, transformers, medium and high-voltage switch gear components Composites Epoxy Resins; Wind energy, automotive, aerospace, construction, industrial applications Lakeland, Florida Argo, Illinois Duisburg and Esslingen, Germany Onsan, South Korea Barbostro, Spain Base Epoxy Resins and Intermediaries (BERI) 1,280 Electrocoat; Automotive, general industry Powder coatings; White goods, pipes for oil and gas transmission, general industry Heat Cured Coatings; Metal packaging and coil coated steel for construction and general industry Deer Park, Texas Pernis, Rotterdam, The Netherlands ______________________________ (1) EDC, a VCM intermediate product, is not included in the table.
Biggest changeThe following table illustrates our Performance and Essential Materials segment production capacities at February 18, 2025 by principal product and the end uses of these products: Product (1) Annual Capacity (2) End Uses Principal Manufacturing Facilities (4) (5) (6) (Millions of pounds) Ethylene (3) 4,820 VCM, polyethylene, EDC, styrene, ethylene oxide/ethylene glycol Calvert City, Kentucky Lake Charles, Louisiana Chlorine 7,400 VCM, EDC, organic/inorganic chemicals, bleach and water treatment Calvert City, Kentucky Geismar, Louisiana Lake Charles, Louisiana Plaquemine, Louisiana Natrium, West Virginia Gendorf and Knapsack, Germany Caustic Soda 8,140 Pulp and paper, organic/inorganic chemicals, neutralization and alumina Calvert City, Kentucky Geismar, Louisiana Lake Charles, Louisiana Plaquemine, Louisiana Natrium, West Virginia Gendorf and Knapsack, Germany VCM 7,940 PVC, PVC Compounds Calvert City, Kentucky Geismar, Louisiana Lake Charles, Louisiana Plaquemine, Louisiana Gendorf and Knapsack, Germany Specialty PVC 980 Automotive sealants, cable sheathing, medical applications and other applications Burghausen, Cologne, and Gendorf, Germany Commodity PVC 6,820 Construction materials including pipe, siding, profiles for windows and doors, film and sheet for packaging and other applications Calvert City, Kentucky Geismar, Louisiana Plaquemine, Louisiana Aberdeen, Mississippi Cologne and Knapsack, Germany Low-Density Polyethylene ("LDPE") 1,500 High clarity packaging and bags, shrink films, food packaging, coated paper board, cup stock, paper folding cartons, lids, closures and general purpose molding Lake Charles, Louisiana Longview, Texas Linear Low-Density Polyethylene ("LLDPE") 1,070 Heavy-duty films and bags, general purpose liners Lake Charles, Louisiana Longview, Texas 3 Table of Contents Product (1) Annual Capacity (2) End Uses Principal Manufacturing Facilities (4) (5) (6) (Millions of pounds) Chlorinated Derivative Materials 2,190 Coatings, flavorants, films, refrigerants, water treatment applications, chemicals and pharmaceutical production Lake Charles, Louisiana Natrium, West Virginia Styrene 570 Consumer disposables, packaging material, appliances, paints and coatings, resins and building materials Lake Charles, Louisiana Epoxy Specialty Resins 580 Protective Coatings and Adhesive Applications; Building and bridge construction, flooring, transportation, oil & gas Electrical Applications; Generators and bushings, transformers, medium and high-voltage switch gear components Composites Epoxy Resins; Wind energy, automotive, aerospace, construction, industrial applications Lakeland, Florida Argo, Illinois Duisburg and Esslingen, Germany Onsan, South Korea Barbostro, Spain Base Epoxy Resins and Intermediaries (BERI) 1,280 Electrocoat; Automotive, general industry Powder coatings; White goods, pipes for oil and gas transmission, general industry Heat Cured Coatings; Metal packaging and coil coated steel for construction and general industry Deer Park, Texas Pernis, Rotterdam, The Netherlands (7) ______________________________ (1) EDC, a VCM intermediate product, is not included in the table.
Chlorinated Derivative Materials. Our chlorinated derivative products include ethyl chloride, perchloroethylene, trichloroethylene, tri-ethane ® solvents, VersaTRANS ® solvents, calcium hypochlorite, hydrochloric acid ("HCL") and pelletized caustic soda ("PELS"). We have the capacity to produce approximately 2.2 billion pounds of chlorinated derivative products per year, primarily at our Lake Charles, Natrium, Beauharnois and Longview (WA) facilities.
Chlorinated Derivative Materials. Our chlorinated derivative products include ethyl chloride, perchloroethylene, trichloroethylene, tri-ethane ® solvents, VersaTRANS ® solvents, calcium hypochlorite, hydrochloric acid ("HCL") and pelletized caustic soda. We have the capacity to produce approximately 2.2 billion pounds of chlorinated derivative products per year, primarily at our Lake Charles, Natrium, Beauharnois and Longview (WA) facilities.
Our other major roofing name brands include NewPoint TM , Concrete Roof Tile, US Tile ® Clay Roofing Products, Unified Steel TM , and Stone Coated Roofing among others. Windows. We are a regional fabricator of vinyl windows in the South and Southeast markets of the United States.
Our other major roofing name brands include NewPoint ® , Concrete Roof Tile, US Tile ® Clay Roofing Products, Unified Steel ® , and Stone Coated Roofing among others. Windows. We are a regional fabricator of vinyl windows in the South and Southeast markets of the United States.
We are a leading producer of LDPE by capacity in North America and predominantly use the autoclave technology (versus tubular technology), which is capable of producing higher-margin specialty polyethylene products. In 2023, our annual capacity of approximately 1.5 billion pounds of LDPE was available in numerous formulations to meet the needs of our diverse customer base.
We are a leading producer of LDPE by capacity in North America and predominantly use the autoclave technology (versus tubular technology), which is capable of producing higher-margin specialty polyethylene products. In 2024, our annual capacity of approximately 1.5 billion pounds of LDPE was available in numerous formulations to meet the needs of our diverse customer base.
During the third quarter of 2019, the LACC ethylene plant began its commercial operations. At December 31, 2023, we, through one of our subsidiaries, owned 50% of the membership interests in LACC. We receive our proportionate share in ethylene production on a cash-cost basis and primarily use it to produce VCM.
During the third quarter of 2019, the LACC ethylene plant began its commercial operations. At December 31, 2024, we, through one of our subsidiaries, owned 50% of the membership interests in LACC. We receive our proportionate share in ethylene production on a cash-cost basis and primarily use it to produce VCM.
Also see our discussion of our environmental matters contained in Item 1A, "Risk Factors" below, Item 3, "Legal Proceedings" below and Note 22 to our consolidated financial statements included in Item 8 of this Form 10-K. Human Capital Westlake is committed to acting in a safe, ethical, environmentally, and socially responsible manner.
Also see our discussion of our environmental matters contained in Item 1A, "Risk Factors" below, Item 3, "Legal Proceedings" below and Note 21 to our consolidated financial statements included in Item 8 of this Form 10-K. Human Capital Westlake is committed to acting in a safe, ethical, environmentally, and socially responsible manner.
Our fittings products include a range of injection molded and custom fabricated fittings including: injection mold DWV fittings for residential, low-rise and high-rise commercial installations; molded gasketed and solvent weld sewer fittings up to 15 inches, molded gasketed municipal pressure fittings and molded fittings for the pool, spa, industrial markets and electrical assemblies; and fabricated custom fittings up to 36 inches for municipal and plumbing installations.
Our fittings products include a range of injection molded and custom fabricated fittings including: injection mold DWV fittings for residential, low-rise and high-rise commercial installations; molded gasketed and solvent weld sewer fittings up to 12 inches, molded gasketed municipal pressure fittings and molded fittings for the pool, spa, industrial markets and electrical assemblies; and fabricated custom fittings up to 36 inches for municipal and plumbing installations.
Prior to the Transaction, we owned approximately 12% of the membership interests in LACC. On March 15, 2022, the Company completed the acquisition of an additional 3.2% membership interest in LACC from Lotte for approximately $89 million. As of December 31, 2023, we owned an aggregate 50% membership interest in LACC.
Prior to the Transaction, we owned approximately 12% of the membership interests in LACC. On March 15, 2022, the Company completed the acquisition of an additional 3.2% membership interest in LACC from Lotte for approximately $89 million. As of December 31, 2024, we owned an aggregate 50% membership interest in LACC.
Westlake PVCO pipe provides an approximately 10% increase in internal flow area compared with pipes with the same outside diameter, and approximately 40% less PVC pipe compound compared to traditional Westlake PVC pipe used for distribution of potable water, sewer and other systems.
Westlake PVCO pipe provides an approximately 10% increase in internal flow area compared with pipes with the same outside diameter, and approximately 40% less PVC pipe weight compared to traditional Westlake PVC pipe used for distribution of potable water, sewer and other systems.
We have been a public company for 19 years, but we still think of our employees as members of our extended family. We value the integrity, creativity, dedication and diversity of ideas that our employees bring to work every day.
We have been a public company for 20 years, but we still think of our employees as members of our extended family. We value the integrity, creativity, dedication and diversity of ideas that our employees bring to work every day.
Bio-attributed GreenVin ® PVC is approximately 90% less carbon-intensive compared with conventionally-produced Westlake PVC in Germany, based on a cradle-to-gate product carbon footprint study by Sustainable AG, tested by TÜV Rheinland, in accordance with the ISO 14067 standard, taking biogenic CO 2 fixations into account.
Bio-attributed GreenVin ® PVC is approximately 90% less carbon intensive compared with conventionally produced Westlake PVC in Germany, based on a cradle-to-gate product carbon footprint study by Sustainable AG, tested by TÜV Rheinland, in accordance with the ISO 14067 standard, taking biogenic CO2 fixations into account.
The remainder of the 2024 and 2025 estimated expenditures are related to equipment replacement and upgrades. We anticipate that stringent environmental regulations will continue to be imposed on us and the industry in general.
The remainder of the 2025 and 2026 estimated expenditures are related to equipment replacement and upgrades. We anticipate that stringent environmental regulations will continue to be imposed on us and the industry in general.
We obtain the remainder of the ethylene we need for our business from third party purchases. The use of ethane feedstock by our ethylene plants enables us to enhance our low-cost materials chain integration. Chlorine and Caustic Soda. We are the second-largest chlor-alkali producer in the world.
We obtain the remainder of the ethylene we need for our business from third party purchases. The use of ethane feedstock by our ethylene plants enables us to enhance our low-cost materials chain integration. 4 Table of Contents Chlorine and Caustic Soda. We are the second-largest chlor-alkali producer in the world.
We intend to satisfy the requirement under Item 5.05 of Form 8-K to disclose any amendments to our Code of Ethics and any waiver from a provision of our Code of Ethics by posting such information on our website at www.westlake.com under "Investor Relations/Governance."
We intend to satisfy the requirement under Item 5.05 of Form 8-K to disclose any amendments to our Code of Ethics and any waiver from a provision of our Code of Ethics by posting such information on our website at www.westlake.com under "Investor Relations/Governance." 12 Table of Contents
The assets acquired and liabilities assumed and the results of operations of this business are included in the Housing and Infrastructure Products segment. 1 Ta ble of Contents On August 19, 2021, we completed the acquisition of, and acquired all of the equity interests in LASCO Fittings, Inc.
The assets acquired and liabilities assumed and the results of operations of this business are included in the Housing and Infrastructure Products segment. 1 Table of Contents On August 19, 2021, we completed the acquisition of, and acquired all of the equity interests in LASCO Fittings, Inc.
We manufacture and market specialty fittings under the Westlake Pipe & Fittings brand name. PVC Compound s. PVC compounds are custom blended formulations made by combining PVC resin with functional additives. They offer specific end-use properties based on customer-determined specifications and are used to produce rigid and flexible PVC applications.
We manufacture and market specialty fittings under the Westlake Pipe & Fittings brand name. 8 Table of Contents PVC Compound s. PVC compounds are custom blended formulations made by combining PVC resin with functional additives. They offer specific end-use properties based on customer-determined specifications and are used to produce rigid and flexible PVC applications.
As an Asian American and Pacific Islander ("AAPI")-controlled business, we feel a special commitment to ensuring that Westlake continues to offer opportunities for employees of all backgrounds and experiences. As of December 31, 2023, approximately 36% of our employees in the United States and Canada self-identified as Black, Indigenous, Hispanic, or AAPI.
As an Asian American and Pacific Islander ("AAPI")-controlled business, we feel a special commitment to ensuring that Westlake continues to offer opportunities for employees of all backgrounds and experiences. As of December 31, 2024, approximately 35% of our employees in the United States and Canada self-identified as Black, Indigenous, Hispanic, or AAPI.
A significant portion of our management team and our Board of Directors comes from diverse backgrounds, and we are focused on hiring and retaining diverse and talented employees. Our Board of Directors has charged the Compensation Committee with oversight responsibility of the Company's DEI efforts.
A significant portion of our management team and our Board of Directors comes from diverse backgrounds, and we are focused on hiring and retaining diverse and talented employees. Our Board of Directors has charged the Compensation Committee with oversight responsibility of the Company's D&I efforts.
It is our policy to comply with all environmental, health and safety requirements and to provide safe and environmentally sound workplaces for our employees. In some cases, compliance can be achieved only by incurring capital expenditures. In 2023, we made capital expenditures of $54 million related to environmental compliance.
It is our policy to comply with all environmental, health and safety requirements and to provide safe and environmentally sound workplaces for our employees. In some cases, compliance can be achieved only by incurring capital expenditures. In 2024, we made capital expenditures of $43 million related to environmental compliance.
The salt requirements for several of our larger chlor-alkali plants are supplied internally from salt domes we either own or lease and the salt is transported by pipelines we own. We purchase the salt required for our other chlor-alkali plants pursuant to long-term contracts.
We purchase butene and hexene pursuant to multi-year contracts. The salt requirements for several of our larger chlor-alkali plants are supplied internally from salt domes we either own or lease and the salt is transported by pipelines we own. We purchase the salt required for our other chlor-alkali plants pursuant to long-term contracts.
We also manufacture and market specialty pipe under the Certa-Set ® , Certa-Flo ® , Certa-Com ® , Yelomine ® , Fluid-Tite ® , Kwik-Set ® , Sure-Fit ® , Cobra Lock™, and Kor-Flo ® brand names, among others. Fittings.
We also manufacture and market specialty pipe under the Certa-Set ® , Certa-Flo ® , Certa-Com ® , Yelomine ® , Fluid-Tite ® , Kwik-Set ® and Sure-Fit ® brand names, among others. Fittings.
Our 12 PVC Compounds facilities across the world sell through a combination of our internal sales force and distributors. No single customer accounted for 10% or more of net sales for the Housing and Infrastructure Products segment in 2023.
Additionally, our 12 PVC Compounds manufacturing facilities across the world sell through a combination of our internal sales force and distributors. No single customer accounted for 10% or more of net sales for the Housing and Infrastructure Products segment in 2024.
We produce base epoxies and intermediaries at our Deer Park, United States and Pernis, the Netherlands plants, where we have the capacity to produce approximately 1,280 million pounds per year. 5 Ta ble of Contents Product and Application Development. Our product and application development activities are geared towards developing and enhancing products, processes and applications.
We produce base epoxies and intermediaries at our Deer Park, United States and Pernis, the Netherlands plants, where we have the capacity to produce approximately 1,280 million pounds per year. Product and Application Development. Our product and application development activities are geared towards developing and enhancing products, processes and applications.
As of February 14, 2024, Westlake Partners' assets consisted of a 22.8% limited partner interest in Westlake Chemical OpCo LP ("OpCo"), as well as the general partner interest in OpCo. Prior to the Westlake Partners IPO, OpCo's assets were wholly-owned by us.
As of February 18, 2025, Westlake Partners' assets consisted of a 22.8% limited partner interest in Westlake Chemical OpCo LP ("OpCo"), as well as the general partner interest in OpCo. Prior to the Westlake Partners IPO, OpCo's assets were wholly-owned by us.
In addition, we are a major producer of bisphenol-A ("BPA") and epichlorohydrin ("ECH"), key precursors in the downstream manufacturing of basic epoxy resins and specialty resins. We internally consume the majority of our BPA and ECH, which ensures consistent supply of our required intermediate materials.
In addition, we are a major producer of bisphenol-A ("BPA"), a key precursor in the downstream manufacturing of basic epoxy resins and specialty resins. We internally consume the majority of our BPA, which ensures consistent supply of our required intermediate materials.
In North America, we operate 38 leased and 6 owned distribution centers and warehouses that service and supply our products to local customers, contractors and distributors. We also engage in advertising programs primarily directed at trade professionals and homeowners that are intended to develop awareness and interest in our products. In addition, we display our products at trade shows.
In North America, we operate 40 leased and 7 owned distribution centers, storage and warehouses that service and supply these products to local customers, contractors and distributors. We also engage in advertising programs primarily directed at trade professionals and homeowners that are intended to develop awareness and interest in our products. In addition, we display our products at trade shows.
Diversity, Equity and Inclusion (DEI) As a global company, we recognize the diversity of our employees, customers and communities, and believe in creating an inclusive and equitable environment that represents a broad spectrum of backgrounds and cultures.
Diversity and Inclusion (D&I) As a global company, we recognize the diversity of our employees, customers and communities, and believe in creating an inclusive environment that represents a broad spectrum of backgrounds and cultures.
As a global manufacturer of products in the performance and essential materials and housing and infrastructure products businesses, we continue to build on our core strengths in delivering high-value, essential products for our customers and endeavor to produce and deliver these products in increasingly-sustainable ways.
The Units are expected to temporarily cease operations in 2025. As a global manufacturer of products in the performance and essential materials and housing and infrastructure products businesses, we continue to build on our core strengths in delivering high-value, essential products for our customers and endeavor to produce and deliver these products in increasingly-sustainable ways.
Our brands include Royal ® Siding, Portsmouth ® Shake and Shingle™, Foundry ® Specialty Siding, TruExterior ® Siding&Trim, Celect ® Cellular Exteriors, Mid-America ® Exteriors, Tapco Tools ® , and many more. 7 Ta ble of Contents Trim and Mouldings.
Our brands include Royal ® Siding, Portsmouth ® Shake and Shingle, Foundry ® Specialty Siding, TruExterior ® Siding&Trim, Celect ® Cellular Exteriors, Mid-America ® Exteriors, Tapco Tools ® , and many more. Trim and Mouldings.
The Louisiana Department of Natural Resources issued Compliance Order No. IMD 2022-027 and several supplements to that order, the latest in October 2023, in response to pressure anomaly events in two of our brine caverns. The brine caverns were not active, operating wells but under ongoing, post-operational monitoring requirements.
IMD 2022-027 and several supplements to that order, the latest in October 2023, in response to pressure anomaly events in two of our brine caverns. These brine caverns were not active, operating wells but were under ongoing, post-operational monitoring requirements.
These lower sales volumes and prices were primarily driven by record exports at lower prices of bisphenol-A, epichlorohydrin and base epoxy resins (constituting the epoxy value chain) out of Asia into Europe and North America during the time when demand in the European market was contracting.
These lower sales volumes and prices were primarily driven by record exports at lower prices of bisphenol-A, epichlorohydrin and base epoxy resins (constituting the epoxy value chain) out of Asia into Europe and North America during the time when demand in the European market was contracting. In addition, Westlake Epoxy operations in Europe experienced sustained high energy and power costs.
We have over 1,650 active and pending trademark registrations worldwide for our various business segments. We also rely on a combination of patents and un-patented proprietary know-how and trade secrets to preserve our competitive technology position in the market. We have over 1,300 issued patents and pending-patent applications in the United States and several other countries.
We also rely on a combination of patents and un-patented proprietary know-how and trade secrets to preserve our competitive technology position in the market. We have over 1,300 issued patents and pending-patent applications in the United States and several other countries.
We use ethylene and chlorine to produce EDC, which is used in turn, to produce VCM. We have the capacity to produce approximately 6.3 billion pounds and 1.6 billion pounds of VCM per year at our North American and European facilities, respectively. The majority of our VCM is used internally in our PVC operations.
We have the capacity to produce approximately 6.3 billion pounds and 1.6 billion pounds of VCM per year at our North American and European facilities, respectively. The majority of our VCM is used internally in our PVC operations. VCM and EDC not used internally are sold externally. PVC.
The majority of our products are shipped from production facilities directly to the customer via pipeline, truck, rail, barge and/or ship. The remaining products are shipped from production facilities to third party chemical terminals and warehouses until being sold to customers.
We sell the remainder of our chlorine and substantially all of our caustic soda production to external customers. The majority of our products are shipped from production facilities directly to the customer via pipeline, truck, rail, barge and/or ship. The remaining products are shipped from production facilities to third party chemical terminals and warehouses until being sold to customers.
Following our acquisition of Westlake Dimex, we started to utilize increasing amounts of in-house generated PVC plastic regrind purchased from other Westlake businesses, in addition to purchasing post-industrial recycled materials from third parties.
Following our acquisition of Westlake Dimex, we started to utilize increasing amounts of in-house generated PVC plastic regrind purchased from other Westlake businesses, in addition to purchasing post-industrial recycled materials from third parties. In 2023, Westlake Dimex doubled the tonnage of in-house post-industrial waste received from within Westlake businesses and customers.
We (through OpCo) produce most of the ethylene required to produce our polyethylene and styrene. Ethylene can be produced from either petroleum liquid feedstocks, such as naphtha, condensates and gas oils, or from natural gas liquid feedstocks, such as ethane, propane and butane. Both of OpCo's Lake Charles ethylene plants use ethane as the primary feedstock.
Ethylene can be produced from either petroleum liquid feedstocks, such as naphtha, condensates and gas oils, or from natural gas liquid feedstocks, such as ethane, propane and butane. Both of OpCo's Lake Charles ethylene plants use ethane as the primary feedstock.
Any remaining chlorine is sold into the merchant chlorine market. Our caustic soda is sold to external customers who use it for, among other things, the production of pulp and paper, organic and inorganic chemicals and alumina. VCM. VCM is used to produce PVC, solvents and PVC-related products.
Our caustic soda is sold to external customers who use it for, among other things, the production of pulp and paper, organic and inorganic chemicals and alumina. VCM. VCM is used to produce PVC, solvents and PVC-related products. We use ethylene and chlorine to produce EDC, which is used in turn, to produce VCM.
We estimate that we will make capital expenditures of approximately $56 million in 2024 and $74 million in 2025, respectively, related to environmental compliance.
We estimate that we will make capital expenditures of approximately $84 million in 2025 and $116 million in 2026, respectively, related to environmental compliance.
Our customers use our one-pellet polyethylene compound, PIVOTAL ® , a product line that contains a blend of post-consumer-recycled (PCR) and virgin polyethylene resins and has obtained GreenCircle certification, to achieve PCR content in their products ranging from 25% to 45%. Our Westlake Epoxy business also continued to incorporate alternative, bio-based feedstocks.
Our customers use our one-pellet polyethylene compound, PIVOTAL ® , a product line that contains a blend of post-consumer-recycled (PCR) and virgin polyethylene resins and has obtained GreenCircle certification, to achieve PCR content in their products ranging from 25% to 70%.
Our raw materials for stone, roofing and accessories, windows, shutters, and specialty tool products are externally purchased. PVC required for the PVC compounds plants is either internally sourced from our North American and Asian facilities within the Performance and Essential Materials segment or externally purchased based on the location of the plants.
PVC required for the PVC compounds plants is either internally sourced from our North American and Asian facilities within the Performance and Essential Materials segment or externally purchased based on the location of the plants.
Performance and Essential Materials Business Products Principal products in our integrated Performance and Essential Materials segment include ethylene, polyethylene, styrene, chlor-alkali (chlorine and caustic soda), chlorinated derivative products, ethylene dichloride ("EDC"), vinyl chloride monomer ("VCM") and PVC. We manage our integrated vinyls production chain to optimize product margins and capacity utilization.
Performance and Essential Materials Business Products Principal products in our integrated Performance and Essential Materials segment include ethylene, polyethylene, styrene, chlor-alkali (chlorine and caustic soda), chlorinated derivative products, ethylene dichloride ("EDC"), vinyl chloride monomer ("VCM") and PVC.
As of December 31, 2023, approximately 68% were employed in the United States. Approximate ly 27% of our employees are represented by labor unions, including works councils in Europe, and our collective bargaining agreements in Europe, North America and Asia expire at various times through 2026.
Approximate ly 27% of our employees are represented by labor unions, including works councils in Europe, and our collective bargaining agreements in Europe, North America and Asia expire at various times through 2026.
Competition in the housing and infrastructure products market is based on product quality, product innovation, customer service, product consistency, on-time delivery and price.
Competition The markets in which our housing and infrastructure businesses operate are highly competitive. Competition in the housing and infrastructure products market is based on product quality, product innovation, customer service, product consistency, on-time delivery and price.
Although we do not collect race and ethnicity data of our workforces in Latin America, Europe, and Asia, we know that we are a diverse, multinational company. 11 Ta ble of Contents Training and Professional Development As part of our retention and promotion efforts, we invest in internal leadership development.
Although we do not collect race and ethnicity data of our workforces in Latin America, Europe, and Asia, we know that we are a diverse, multinational company. Training and Professional Development As part of our retention and promotion efforts, we invest in internal leadership development. Westlake regularly provides its employees with a blend of live, virtual, and digital training opportunities.
In September 2023, the Office of Conservation issued an emergency declaration as a conservative step and to ensure that the full suite of powers and resources are available to the government in its response and management of the evolving circumstances at the Sulphur Dome.
In September 2023, the Office of Conservation issued an emergency declaration as a conservative step to ensure ample resources are available to the government in its response and management of the evolving circumstances at the Sulphur Brine Dome. In June 2024, the Company's cavern experienced a pressure event.
No single customer accounted for 10% or more of net sales for the Performance and Essential Materials segment in 2023. Competition The markets in which our Performance and Essential Materials businesses operate are highly competitive. Competition in the materials market is based on product availability, product quality and consistency, product performance, customer service and price.
No single customer accounted for 10% or more of net sales for the Performance and Essential Materials segment in 2024. Competition The markets in which our Performance and Essential Materials businesses operate are highly competitive.
Several of our U.S. manufacturing sites have been recognized by the U.S. Occupational Safety & Health Administration's ("OSHA") Voluntary Protection Program ("VPP") for their low injury rates, employee engagement and safety programs. Most of our manufacturing sites in Germany satisfy the Deutsche Industrie Norm ISO 45001 certification program, which is comparable to VPP.
Several of our U.S. manufacturing sites have been recognized by the U.S. Occupational Safety & Health Administration's ("OSHA") Voluntary Protection Program for their low injury rates, employee engagement, and safety programs. Several of our manufacturing sites have achieved ISO 45001 certification, which are internationally recognized standards for Occupational Health and Safety.
Westlake Dimex is a producer of post-industrial-recycled PVC, PE and thermoplastic elastomer (TPE) compounds in addition to various consumer and professional products made from recycled PVC, PE and TPE materials.
Westlake Dimex is a producer of post-industrial-recycled PVC, PE and thermoplastic elastomer (TPE) compounds in addition to various consumer and professional products made from recycled PVC, PE and TPE materials. These products include landscape edging; industrial, home and office matting; marine dock edging; and masonry control joints.
We have the capacity to use a majority of our chlorine internally to produce VCM and EDC, most of which, in turn, is used to produce PVC. We also use our chlorine internally to produce chlorinated derivative products. We sell the remainder of our chlorine and substantially all of our caustic soda production to external customers.
The remainder of our PVC is sold to downstream fabricators and the international markets. We have the capacity to use a majority of our chlorine internally to produce VCM and EDC, most of which, in turn, is used to produce PVC. We also use our chlorine internally to produce chlorinated derivative products.
At this time, the Company is unable to estimate the impact that other ongoing expenditures or future injunctive relief ordered by the government could have on the Company's financial condition, results of operations or cash flows.
In response to these orders, the Company reserved approximately $28 million in connection with monitoring wells and other remedial activities. At this time, the Company is unable to estimate the impact that other ongoing expenditures or future injunctive relief ordered by the government could have on the Company's financial condition, results of operations or cash flows.
Our other Asian manufacturing facilities are located near Shanghai, in China, and in Kaohsiung, Taiwan, through our 95%- and 60%-owned joint ventures, respectively, where we produce chlor-alkali, PVC and associated products.
Base Epoxy Resins and Intermediaries are produced at our plants in Pernis, the Netherlands and Deer Park, United States. Our other Asian manufacturing facilities are located near Shanghai, in China, and in Kaohsiung, Taiwan, through our 95%- and 60%-owned joint ventures, respectively, where we produce chlor-alkali, PVC and associated products.
We manufacture ethylene through three of the OpCo plants and our portion of LACC's production capacity located in Lake Charles and Calvert City. Chlor-alkali materials are produced at our three plants located in Lake Charles, two plants located in Germany and one plant each located in Calvert City, Plaquemine, Geismar, Natrium, Longview and Beauharnois.
Chlor-alkali materials are produced at our three plants located in Lake Charles, two plants located in Germany and one plant each located in Calvert City, Plaquemine, Geismar, Natrium, Longview and Beauharnois. Our VCM is produced at our two plants in Lake Charles, two plants located in Germany and one plant each at Calvert City, Plaquemine and Geismar.
Our VCM is produced at our two plants in Lake Charles, two plants located in Germany and one plant each at Calvert City, Plaquemine and Geismar. Our PVC is produced at our four plants located in Germany and one plant each at Calvert City, Plaquemine, Geismar and Aberdeen.
Our PVC is produced at our four plants located in Germany and one plant each at Calvert City, Plaquemine, Geismar and Aberdeen. Polyethylene and associated products are produced at our two polyethylene plants in Lake Charles and three polyethylene plants and a specialty polyethylene wax plant at our Longview site.
Prices for our main feedstocks are generally driven by the underlying petrochemical benchmark prices and energy costs, which are subject to price fluctuations. Sustainability We continued our efforts to deliver high-value products in increasingly sustainable ways in 2023.
Prices for our main feedstocks are generally driven by the underlying petrochemical benchmark prices and energy costs, which are subject to price fluctuations. 6 Table of Contents Sustainability We continued our efforts to deliver high-value products in increasingly sustainable ways in 2024. For instance, having introduced lower-carbon caustic soda and PVC products since early 2021.
VCM and EDC not used internally are sold externally. PVC. PVC, the world's third most widely used plastic, is an attractive alternative to traditional materials such as glass, metal, wood, concrete and other plastic materials because of its versatility, durability and cost-competitiveness.
PVC, the world's third most widely used plastic, is an attractive alternative to traditional materials such as glass, metal, wood, concrete and other plastic materials because of its versatility, durability and cost-competitiveness. PVC is produced from VCM, which is, in turn, made from chlorine and ethylene. We are the second-largest PVC producer in the world.
We combine salt and electricity to produce chlorine and caustic soda, commonly referred to as chlor-alkali, at our Lake Charles, Plaquemine, Natrium, Calvert City, Geismar, Beauharnois, Longview (WA), Gendorf, Knapsack and Kaohsiung facilities. We use our chlorine production in our VCM and chlorinated derivative products plants. We currently have the capacity to supply all of our chlorine requirements internally.
We have the capacity to produce approximately 7.4 billion pounds of chlorine and 8.1 billion pounds of caustic soda. We combine salt and electricity to produce chlorine and caustic soda, commonly referred to as chlor-alkali, at our Lake Charles, Plaquemine, Natrium, Calvert City, Geismar, Beauharnois, Longview (WA), Gendorf, Knapsack and Kaohsiung facilities.
We receive butene and hexene at the Lake Charles site and hexene at the Longview (TX) site via rail car from several suppliers. We receive benzene via barges, ships and pipeline pursuant to short-term arrangements. We purchase butene and hexene pursuant to multi-year contracts.
In Germany, we have access to, and partially own, an ethylene pipeline. We acquire butene and hexene to manufacture polyethylene and benzene to manufacture styrene. We receive butene and hexene at the Lake Charles site and hexene at the Longview (TX) site via rail car from several suppliers. We receive benzene via barges, ships and pipeline pursuant to short-term arrangements.
Less PVC pipe compound per unit length means a lighter weight product that provides secondary benefits for shipping the product. We also enhanced circularity of more of our products as discussed in our latest 2022 Environmental Social and Governance Report, which is available at our website at www.westlake.com.
Less material per unit length provides secondary benefits for shipping the product. 9 Table of Contents We also enhanced circularity of more of our products as discussed in our 2023 Sustainability Report, which is available at our website at www.westlake.com.
Pursuant to Item 103 of the SEC's Regulation S-K, the following environmental matters involve a governmental authority as a party to the proceedings and potential monetary sanctions that we believe could exceed $1 million (which is less than one percent of our current assets on a consolidated basis as of December 31, 2023): • To resolve alleged violations associated with exceedances of discharge limits under the Natrium facility's National Pollutant Discharge Elimination System ("NPDES") permit effective August 2020, we have entered into enforcement negotiations with the West Virginia Department of Environmental Protection ("WVDEP").
Pursuant to Item 103 of the SEC's Regulation S-K, the following environmental matters involve a governmental authority as a party to the proceedings and potential monetary sanctions that we believe could exceed $1 million (which is less than one percent of our current assets on a consolidated basis as of December 31, 2024): • Natrium Facility Discharge Investigation.
We provide our employees with competitive compensation packages, development programs that enable continued learning and growth, and comprehensive and competitive benefit packages worldwide. Our compensation and benefits arrangements generally are tailored to local markets of operation. Health and Safety The health and safety of our employees and our operations is our highest priority.
Our compensation and benefits arrangements generally are tailored to local markets of operation. Health and Safety The health and safety of our employees and our operations is our highest priority.
The expected 2024 and 2025 capital expenditures are relatively higher than the amounts we have spent related to environmental compliance in recent years in large part due to capital expenditures related to previously existing and new Environmental Protection Agency (the "EPA") regulations and corrective actions required by the EPA to resolve the flare enforcement matter discussed below.
The expected 2025 and 2026 capital expenditures are relatively higher than the amounts we have spent related to environmental compliance in recent years in large part due to capital expenditures related to previously existing and new Environmental Protection Agency (the "EPA") regulations, including the EPA's 2024 update to the hazardous organic national emission standards for hazardous air pollutants ("NESHAPs").
There were no strikes, lockouts or work stoppages in 2023, and we believe that our relationship with our employees and unions is open and positive. Attracting, developing and retaining talented people is crucial to executing our strategy. Our ability to recruit and retain such talent depends on a number of factors, including compensation and benefits, career opportunities and work environment.
Attracting, developing and retaining talented people is crucial to executing our strategy. Our ability to recruit and retain such talent depends on a number of factors, including compensation and benefits, career opportunities and work environment. We provide our employees with competitive compensation packages, development programs that enable continued learning and growth, and comprehensive and competitive benefit packages worldwide.
In addition, we periodically conduct employee surveys to gauge employee engagement and identify areas for additional focus. Headcount As of December 31, 2023, we had approximately 15,520 employees in the following areas: Category Number Performance and Essential Materials segment 6,830 Housing and Infrastructure Products segment 8,130 Corporate and other 560 Our employees are distributed across 19 countries.
Headcount As of December 31, 2024, we had approximately 15,540 employees in the following areas: Category Number Performance and Essential Materials segment 6,800 Housing and Infrastructure Products segment 8,130 Corporate and other 610 11 Table of Contents Our employees are distributed across 19 countries. As of December 31, 2024, approximately 68% were employed in the United States.
Housing and Infrastructure Products Business Our Brands and Products We manufacture and sell housing and infrastructure products including residential PVC siding; PVC trim and mouldings; architectural stone veneer; windows; PVC decking; PVC films for various inflatables, wallcovering, tape and roofing applications; polymer composite and cement roof tiles; PVC pipe and fittings for various water, sewer, electrical and industrial applications; PVC compounds used in various housing, medical and automobile products; and a variety of consumer and commercial products such as landscape edging; industrial, home and office matting; marine dock edging; and masonry joint controls.
Our competitors in the epoxy value chain include Olin Corporation, Nan Ya Plastics Corporation, the Spolchemie Group, LEUNA-Harze GmbH, Aditya Birla Chemicals (Thailand) Ltd., Huntsman Corporation, Swancor Holding Company Limited, Ningbo Bohui Chemical Technology Co., Ltd., Techstorm Advanced Material Co., Ltd., Shanghai Kangda Chemical New Material Group Co., Ltd., Evonik Industries AG, Allnex Management GmbH, Kukdo Chemical Co., Ltd., Kumhu Asiana Group and Chang Chun Plastics Co., Ltd. 7 Table of Contents Housing and Infrastructure Products Business Our Brands and Products We manufacture and sell housing and infrastructure products including residential PVC siding; PVC trim and mouldings; architectural stone veneer; windows; PVC decking; PVC films for various inflatables, wallcovering, tape and roofing applications; polymer composite and cement roof tiles; PVC pipe and fittings for various water, sewer, electrical and industrial applications; PVC compounds used in various housing, medical and automobile products; and a variety of consumer and commercial products such as landscape edging; industrial, home and office matting; marine dock edging; and masonry joint controls.
Epoxy Specialty Resins are produced at two plants located in Germany, two plants in the United States, one plant in Spain and one plant in South Korea. Base Epoxy Resins and Intermediaries are produced at our plants in Pernis, the Netherlands and Deer Park, United States.
Our chlorinated derivative products are primarily produced at our plants in Lake Charles and Natrium. Styrene monomer is produced at our plant located in our Lake Charles facility. Epoxy Specialty Resins are produced at two plants located in Germany, two plants in the United States, one plant in Spain and one plant in South Korea.
These derivatives are used in a number of applications including consumer disposables, food packaging, housewares, paints and coatings, building materials, tires and toys. We produce styrene at our Lake Charles plant, where we have the capacity to produce approximately 570 million pounds of styrene per year, all of which is sold to external customers. Epoxy Specialty Resins.
We produce styrene at our Lake Charles plant, where we have the capacity to produce approximately 570 million pounds of styrene per year, all of which is sold to external customers. 5 Table of Contents Epoxy Specialty Resins.
For instance, having introduced lower-carbon caustic soda and PVC products since early 2021, in October 2022, we expanded our GreenVin ® bio-attributed PVC, which is produced in Germany with renewable power (under European Guarantees of Origin) and renewable ethylene. The renewable ethylene is derived from biomass.
In October 2022, we expanded our GreenVin ® bio-attributed PVC, which is produced in Germany with renewable power (under European Guarantees of Origin) and renewable ethylene. The renewable ethylene is derived from second-generation waste biomass. GreenVin ® bio-attributed PVC is both International Sustainability & Carbon Certification PLUS and REDcert2 certified, using the mass balance approach.
Sustainability We endeavor to continue to focus on manufacturing products in a more sustainable way and developing products with improved sustainable features. For instance, we expanded production of Westlake molecular-oriented polyvinyl chloride (PVCO) pipe, which offers both enhanced water flow and a lower-carbon footprint due to its lighter weight compared to traditional Westlake PVC pipe.
For instance, since 2023, we have been planning to expand production of Westlake molecular-oriented polyvinyl chloride ("PVCO") pipe from Canada to the U.S., which offers both enhanced water flow and a lower-carbon footprint due to its lighter weight compared to traditional Westlake PVC pipe.
(6) We lease a portion of the land on which our Aberdeen and Calvert City facilities are located. Ethylene. Ethylene is the world's most widely used petrochemical in terms of volume. It is the key building block used to produce a large number of higher value-added chemicals including polyethylene, EDC, VCM and styrene.
Annual capacity of 155 million pounds associated with ECH production at the Pernis facility is included in this table. Ethylene. Ethylene is the world's most widely used petrochemical in terms of volume. It is the key building block used to produce a large number of higher value-added chemicals including polyethylene, EDC, VCM and styrene.
Facilities where we perform such activities are located in the United States, Germany, China and the Netherlands. Electricity. Our Lake Charles, Plaquemine and Natrium cogeneration assets have the capacity to generate electricity of approximately 845, 240 and 100 megawatts, respectively, per year. Feedstocks We are highly integrated along our materials production chain.
Facilities where we perform such activities are located in the United States, Germany, China and the Netherlands. Feedstocks We are highly integrated along our materials production chain. We (through OpCo) produce most of the ethylene required to produce our polyethylene and styrene.
We have storage agreements and exchange agreements that provide us and OpCo with access to customers who are not directly connected to the pipeline system that we own. OpCo ships crude butadiene and pyrolysis gasoline by rail or truck. Additionally, we transport our polyethylene and styrene by rail or truck. Further, styrene can be transported by barge or ship.
We and OpCo sell ethylene and ethylene co-products to external customers. OpCo's primary ethylene co-products are chemical grade propylene, crude butadiene, pyrolysis gasoline and hydrogen. We have storage agreements and exchange agreements that provide us and OpCo with access to customers who are not directly connected to the pipeline system that we own.
These products include landscape edging; industrial, home and office matting; marine dock edging; and masonry control joints. 8 Ta ble of Contents Raw Materials and Suppliers Our North American PVC facilities within the Performance and Essential Materials segment supply most of the PVC required by building products for our housing exteriors and PVC pipes and fittings plants.
Raw Materials and Suppliers Our North American PVC facilities within the Performance and Essential Materials segment supply most of the PVC required by building products for our housing exteriors and PVC pipes and fittings plants. Our raw materials for stone, roofing and accessories, windows, shutters, and specialty tool products are externally purchased.
In addition, Westlake Epoxy operations in Europe have experienced sustained high energy and power costs. These factors negatively impacted Westlake Epoxy financial results during 2023.
These factors negatively impacted Westlake Epoxy financial results during 2023.
We established a target 20% reduction in our Scope 1 and Scope 2 CO 2 equivalent emissions intensity per ton of production by 2030 from a 2016 baseline. As of December 31, 2022, we had achieved a reduction of approximately 18% in such emissions intensity from our 2016 baseline.
As of December 31, 2023, we had achieved a total reduction of approximately 16% in Scope 1 and Scope 2 GHG emissions intensity from our 2016 intensity baseline. Relatively higher emissions intensity in 2023 as compared to the prior year primarily occurred due to lower production rates.
The Pernis, Netherlands site, for example, received certification by ISCC PLUS for our tracing and handling of bio-based materials in the production of epoxy products. 6 Ta ble of Contents Marketing, Sales and Distribution We have a dedicated sales force for our business, organized by product line and region that sells our products directly to our customers.
Marketing, Sales and Distribution We have a dedicated sales force for our business, organized by product line and region that sells our products directly to our customers. In addition, we rely on distributors to market products to smaller customers. Our polyethylene customers are some of the nation's largest producers of film and flexible packaging.
We use some of our PVC internally in the production of our building products, pipes and fittings and PVC compounds in the Housing and Infrastructure Products segment. The remainder of our PVC is sold to downstream fabricators and the international markets.
OpCo ships crude butadiene and pyrolysis gasoline by rail or truck. Additionally, we transport our polyethylene and styrene by rail or truck. Further, styrene can be transported by barge or ship. We use some of our PVC internally in the production of our building products, pipes and fittings and PVC compounds in the Housing and Infrastructure Products segment.
Unless specifically stated herein, documents and information on our website are not incorporated by reference in this Form 10-K. 9 Ta ble of Contents Competition The markets in which our housing and infrastructure businesses operate are highly competitive.
In 2023, two of our stone veneer products produced at our two facilities incorporated approximately 45% (Versetta Stone) to 55% (Cultured Stone) recycled content. Unless specifically stated herein, documents and information on our website, including our 2023 Sustainability Report, are not incorporated by reference in this Form 10-K.
Removed
Polyethylene and associated products are produced at our two polyethylene plants in Lake Charles and three polyethylene plants and a specialty polyethylene wax plant at our Longview site. Our chlorinated derivative products are produced at our plants in Lake Charles and Natrium. Styrene monomer is produced at our plant located in our Lake Charles facility.
Added
In July 2024, the Company approved a plan to temporarily cease operations ("mothball") of the allyl chloride (AC) and epichlorohydrin (ECH) units at the Company's site in Pernis, the Netherlands (collectively, the "Units"). The Company continues to operate the liquid epoxy resin (LER) and bisphenol A (BPA) units at the Pernis facility.
Removed
PVC is produced from VCM, which is, in turn, made from chlorine and ethylene. 4 Ta ble of Contents We are the second-largest PVC producer in the world.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

97 edited+61 added−9 removed138 unchanged
Biggest changeRisk Factor Summary Risks Related to Our Business, Industry and Operations • Cyclicality in the petrochemical industry has in the past, and may in the future, result in reduced operating margins or operating losses. • We sell commodity products in highly competitive markets and face significant competition and price pressure. • Our operations depend on the availability and costs of raw materials, energy and utilities, and volatility in costs of raw materials, energy and utilities and supply chain constraints may result in increased operating expenses and adversely affect our results of operations and cash flows. • External factors beyond our control can cause fluctuations in demand for our products and in our prices and margins, which may negatively affect our results of operations and cash flows. • The housing market may continue its recent decline or decline further, and any such continuation or decline in the homebuilding industry may adversely affect our operating results. • We operate internationally and are subject to related risks, including exchange rate fluctuations, exchange controls, political risk and other risks relating to international operations. • Our inability to compete successfully may reduce our operating profits. • Our production facilities process some volatile and hazardous materials that subject us to operating and litigation risks that could adversely affect our operating results. • We rely on a limited number of outside suppliers for specified feedstocks and services. • We rely heavily on third party transportation, which subjects us to risks and costs that we cannot control.
Biggest changeRisk Factor Summary Risks Related to Our Business, Industry and Operations • Cyclicality in the petrochemical industry has in the past, and may in the future, result in reduced operating margins or operating losses. • We sell most of our commodity products in highly competitive markets and face significant competition and price pressure. • Our Performance and Essential Materials business could suffer if commodity product exports by other countries significantly increase or are sold in global markets in violation of international fair trade laws. • We operate internationally and are subject to related risks, including exchange rate fluctuations, exchange controls, trade barriers, tariffs and duties, political risk and other risks relating to international operations. • Our operations depend on the availability and costs of raw materials, energy and utilities, and volatility in costs of raw materials, energy and utilities and supply chain constraints may result in increased operating expenses and adversely affect our results of operations and cash flows. • Our operations and assets are subject to climate-related risks such as hurricanes or other weather events that may adversely affect our results of operations and cash flows. • External factors beyond our control can cause fluctuations in demand for our products and in our prices and margins, which may negatively affect our results of operations and cash flows. • The housing market may remain depressed or decline further, and any such continuation or decline in the homebuilding industry may adversely affect our operating results. • Our inability to compete successfully may reduce our operating profits. • Our production facilities process some volatile and hazardous materials that subject us to operating and litigation risks that could adversely affect our operating results. • We rely on a limited number of outside suppliers for specified feedstocks and services. • We rely heavily on third party transportation, which subjects us to risks and costs that we cannot control.
Our participation in joint ventures and similar arrangements exposes us to a number of risks, including risks of shared control. We are party to several joint ventures and similar arrangements, including an investment, together with Lotte Chemical USA Corporation ("Lotte"), in a joint venture, LACC, LLC ("LACC"), to build and operate an ethylene facility.
Our participation in joint ventures and similar arrangements exposes us to a number of risks, including risks of shared control. We are party to several joint ventures and similar arrangements, including an investment, together with Lotte Chemical USA Corporation, in a joint venture, LACC, LLC ("LACC"), to build and operate an ethylene facility.
If the Internal Revenue Service ("IRS") were to treat Westlake Partners as a corporation for federal income tax purposes, or if Westlake Partners became subject to entity-level taxation for state tax purposes, its cash available for distribution would be substantially reduced, which would also likely cause a substantial reduction in the value of its common units that we hold.
If the Internal Revenue Service ("IRS") were to treat Westlake Partners as a corporation for federal income tax purposes, or if Westlake Partners became subject to entity-level taxation for state tax purposes, its cash available for distribution would be substantially reduced, which would also likely cause a substantial reduction in the value of its common units that we hold.
We are subject to increasing climate-related risks and uncertainties, many of which are outside of our control. Climate change may result in more frequent severe weather events, potential changes in precipitation patterns, flooding, sea level rise, and variability in weather patterns, which can disrupt our operations as well as those of our customers, partners and suppliers.
We are subject to increasing climate-related risks and uncertainties, many of which are outside of our control. Climate change may result in more frequent severe weather events, potential changes in precipitation patterns, flooding, sea level rise, wildfires and variability in weather patterns, which can disrupt our operations as well as those of our customers, partners and suppliers.
Our level of debt and the limitations imposed on us by our existing or future debt agreements could have significant consequences on our business and future prospects, including the following: • a portion of our cash flows from operations will be dedicated to the payment of interest and principal on our debt and will not be available for other purposes; • we may not be able to obtain necessary financing in the future for working capital, capital expenditures, acquisitions, debt service requirements or other purposes; • our less leveraged competitors could have a competitive advantage because they have greater flexibility to utilize their cash flows to improve their operations; • we may be exposed to risks inherent in interest rate fluctuations because some of our borrowings are at variable rates of interest, which would result in higher interest expense in the event of increases in interest rates; • we could be vulnerable in the event of a downturn in our business that would leave us less able to take advantage of significant business opportunities and to react to changes in our business and in market or industry conditions; and • should we pursue additional expansions of existing assets or acquisition of third-party assets, we may not be able to obtain additional liquidity at cost effective interest rates.
Our level of debt and the limitations imposed on us by our existing or future debt agreements could have significant consequences on our business and future prospects, including the following: • a portion of our cash flows from operations will be dedicated to the payment of interest and principal on our debt and will not be available for other purposes; • we may not be able to obtain necessary financing in the future for working capital, capital expenditures, acquisitions, debt service requirements or other purposes; • our less leveraged competitors could have a competitive advantage because they have greater flexibility to utilize their cash flows to improve their operations; 29 Table of Contents • we may be exposed to risks inherent in interest rate fluctuations because some of our borrowings are at variable rates of interest, which would result in higher interest expense in the event of increases in interest rates; • we could be vulnerable in the event of a downturn in our business that would leave us less able to take advantage of significant business opportunities and to react to changes in our business and in market or industry conditions; and • should we pursue additional expansions of existing assets or acquisition of third-party assets, we may not be able to obtain additional liquidity at cost effective interest rates.
Expansion projects may be subject to delays or cost overruns, including delays or cost overruns resulting from any one or more of the following: • unexpectedly long delivery times for, or shortages of, key equipment, parts or materials; • shortages of skilled labor and other personnel necessary to perform the work; • delays and performance issues; • failures or delays of third-party equipment vendors or service providers; • unforeseen increases in the cost of equipment, labor and raw materials; • work stoppages and other labor disputes; • unanticipated actual or purported change orders; • disputes with contractors and suppliers; • design and engineering problems; • latent damages or deterioration to equipment and machinery in excess of engineering estimates and assumptions; • financial or other difficulties of our contractors and suppliers; • sabotage; • terrorist attacks; • interference from adverse weather conditions; and • difficulties in obtaining necessary permits or in meeting permit conditions.
Expansion projects may be subject to delays or cost overruns, including delays or cost overruns resulting from any one or more of the following: • unexpectedly long delivery times for, or shortages of, key equipment, parts or materials; • shortages of skilled labor and other personnel necessary to perform the work; • delays and performance issues; • failures or delays of third-party equipment vendors or service providers; • unforeseen increases in the cost of equipment, labor and raw materials; • work stoppages and other labor disputes; • unanticipated actual or purported change orders; • disputes with contractors and suppliers; 21 Table of Contents • design and engineering problems; • latent damages or deterioration to equipment and machinery in excess of engineering estimates and assumptions; • financial or other difficulties of our contractors and suppliers; • sabotage; • terrorist attacks; • interference from adverse weather conditions; and • difficulties in obtaining necessary permits or in meeting permit conditions.
Future funding obligations related to these obligations could restrict cash available for our operations, capital expenditures or other requirements or require us to borrow additional funds. • If our goodwill or other long-lived assets become impaired in the future, we may be required to record non-cash charges to earnings, which could be significant. • Failure to adequately protect critical data and technology systems could materially affect our operations. • Fluctuations in foreign currency exchange and interest rates could affect our consolidated financial results. • Our property insurance has only partial coverage for acts of terrorism and, in the event of terrorist attack, we could lose net sales and our facilities.
Future funding obligations related to these obligations could restrict cash available for our operations, capital expenditures or other requirements or require us to borrow additional funds. • If our goodwill or other long-lived assets become impaired in the future, we may be required to record non-cash charges to earnings, which could be significant. • Failure to adequately protect critical data and technology systems could materially affect our operations. • Fluctuations in foreign currency exchange and interest rates could affect our consolidated financial results. 13 Table of Contents • Our property insurance has only partial coverage for acts of terrorism and, in the event of terrorist attack, we could lose net sales and our facilities.
As long as TTWF LP (the "principal stockholder") and certain of its affiliates (such affiliates, together with the principal stockholder, the "principal stockholder affiliates"), which as of December 31, 2023, beneficially owned approximately 72% of our common stock, own a majority of our outstanding common stock, they will be able to exert significant control over us, and our other stockholders, by themselves, will not be able to affect the outcome of any stockholder vote.
As long as TTWF LP (the "principal stockholder") and certain of its affiliates (such affiliates, together with the principal stockholder, the "principal stockholder affiliates"), which as of December 31, 2024, beneficially owned approximately 72% of our common stock, own a majority of our outstanding common stock, they will be able to exert significant control over us, and our other stockholders, by themselves, will not be able to affect the outcome of any stockholder vote.
Our operations are subject to the usual hazards associated with chemical, plastics, housing and infrastructure products manufacturing and the related use, storage, transportation and disposal of feedstocks, products and wastes, and litigation arising as a result of such hazards, including: • pipeline leaks and ruptures; • explosions; • fires; • severe weather and natural disasters; • mechanical failure; • unscheduled downtime; • labor difficulties; • transportation interruptions; • transportation accidents involving our products; • remediation complications; • chemical spills, discharges or releases of toxic or hazardous substances or gases; • other environmental risks; • sabotage; • terrorist attacks; and • political unrest.
Our operations are subject to the usual hazards associated with chemical, plastics, housing and infrastructure products manufacturing and the related use, storage, transportation and disposal of feedstocks, products and wastes, and litigation arising as a result of such hazards, including: • pipeline leaks and ruptures; • explosions; • fires; • severe weather and natural disasters; • mechanical failure; • unscheduled downtime; • labor difficulties; • transportation interruptions; • transportation accidents involving our products; • remediation complications; • chemical spills, discharges or releases of toxic or hazardous substances or gases; • other environmental risks; • sabotage; • terrorist attacks; and 19 Table of Contents • political unrest.
If we or our securities are unable to meet the ESG standards or investment criteria set by these investors and funds, we may lose investors or investors may allocate a portion of their capital away from us, our cost of capital may increase, and our stock price may be negatively impacted.
If we or our securities are unable to meet the sustainability standards or investment criteria set by these investors and funds, we may lose investors or investors may allocate a portion of their capital away from us, our cost of capital may increase, and our stock price may be negatively impacted.
As a result, we may continue to face increasing pressure regarding our ESG disclosures and practices. Additionally, members of the investment community may screen companies such as ours for ESG disclosures and performance before investing in our stock.
As a result, we may continue to face increasing pressure regarding our sustainability disclosures and practices. Additionally, members of the investment community may screen companies such as ours for sustainability disclosures and performance before investing in our stock.
We may have difficulties integrating the operations of recently acquired businesses, such as Westlake Epoxy, and future acquired businesses. • Capital projects are subject to risks, including delays and cost overruns, which could have an adverse impact on our financial condition and results of operations. • Public and investor sentiment towards climate change and other environmental, social and governance ("ESG") matters could adversely affect our cost of capital and the price of our common stock. • Our participation in joint ventures and similar arrangements exposes us to a number of risks, including risks of shared control. • Our operations could be adversely affected by labor relations. • We have certain material pension and other post-retirement employment benefit ("OPEB") obligations.
We may have difficulties integrating the operations of recently acquired businesses, such as Westlake Epoxy, and future acquired businesses. • Capital projects are subject to risks, including delays and cost overruns, which could have an adverse impact on our financial condition and results of operations. • Public and investor sentiment towards climate change and other sustainability matters could adversely affect our cost of capital and the price of our common stock. • Our participation in joint ventures and similar arrangements exposes us to a number of risks, including risks of shared control. • Our operations could be adversely affected by labor relations. • We have certain material pension and other post-retirement employment benefit ("OPEB") obligations.
Our casualty and other insurance policies may be subject to coverage limitations. • The impact and effects of public health crises, pandemics and epidemics could adversely affect our business, financial condition and results of operations.
Our property, casualty and other insurance policies may be subject to coverage limitations and deductibles. • The impact and effects of public health crises, pandemics and epidemics could adversely affect our business, financial condition and results of operations.
The housing market may continue its recent decline or decline further, and any such continuation or decline in the homebuilding industry may adversely affect our operating results. We cannot predict whether and to what extent the housing market in the United States will grow, particularly if interest rates for mortgage loans remain elevated or continue to rise.
The housing market may remain depressed or decline further, and any such continuation or decline in the homebuilding industry may adversely affect our operating results. We cannot predict whether and to what extent the housing market in the United States will grow, particularly if interest rates for mortgage loans remain elevated or continue to rise.
The anticipated after-tax economic benefit of an investment in the common units of Westlake Partners depends largely on Westlake Partners being treated as a partnership for U.S. federal income tax purposes.
The anticipated after-tax economic benefit of our investment in the common units of Westlake Partners depends largely on Westlake Partners being treated as a partnership for U.S. federal income tax purposes.
Historically, there have been a number of mergers, acquisitions, spin-offs and joint ventures in the industry in which the PEM business operates. This restructuring activity has resulted in fewer but more competitive PEM producers, many of which are larger than we are and have greater financial resources than we do.
The industries in which we operate are highly competitive. Historically, there have been a number of mergers, acquisitions, spin-offs and joint ventures in the industry in which the PEM business operates. This restructuring activity has resulted in fewer but more competitive PEM producers, many of which are larger than we are and have greater financial resources than we do.
Any of the foregoing could have a material adverse effect on our financial condition, results of operations or cash flows. Our operations could be adversely affected by labor relations. The vast majority of our employees in Europe and Asia, and some of our employees in North America, are represented by labor unions and works councils.
Any of the foregoing could have a material adverse effect on our financial condition, results of operations or cash flows. 22 Table of Contents Our operations could be adversely affected by labor relations. The vast majority of our employees in Europe and Asia, and some of our employees in North America, are represented by labor unions and works councils.
Compliance with the final rules resulted in additional restrictions on our operations, increased compliance costs and will result in the cessation of operation of the mercury cell production unit. Our operations produce greenhouse gas ("GHG") emissions, which have been the subject of increased scrutiny and regulation.
Compliance with the final rules resulted in additional restrictions on our operations, increased compliance costs and will result in the cessation of operation of the mercury cell production unit. 25 Table of Contents Our operations produce greenhouse gas ("GHG") emissions, which have been the subject of increased scrutiny and regulation.
In the European Union, the Emissions Trading Scheme obligates certain emitters to obtain GHG emission allowances to comply with a cap and trade system for GHG emissions. In addition, the European Union has committed to reduce domestic GHG emissions by at least 57% below the 1990 level by 2030.
In the European Union ("EU"), the Emissions Trading Scheme obligates certain emitters to obtain GHG emission allowances to comply with a cap and trade system for GHG emissions. In addition, the EU has committed to reduce domestic GHG emissions by at least 55% below the 1990 level by 2030.
With respect to any of these investors, our ESG disclosures and efforts may not satisfy the investor requirements or their requirements may not be made known to us.
With respect to any of these investors, our sustainability disclosures and efforts may not satisfy the investor requirements or their requirements may not be made known to us.
Imposition of similar entity-level taxes on Westlake Partners in other jurisdictions in which Westlake Partners conducts operations in the future could substantially reduce its cash available for distribution. 28 Ta ble of Contents Risks Related to the Ownership of Our Securities We will be controlled by our principal stockholder and its affiliates as long as they own a majority of our common stock, and our other stockholders will be unable to affect the outcome of stockholder voting during that time.
Imposition of similar entity-level taxes on Westlake Partners in other jurisdictions in which Westlake Partners conducts operations in the future could substantially reduce its cash available for distribution. 31 Table of Contents Risks Related to the Ownership of Our Securities We will be controlled by our principal stockholder and its affiliates as long as they own a majority of our common stock, and our other stockholders will be unable to affect the outcome of stockholder voting during that time.
Our interests may conflict with those of the principal stockholder and its affiliates, and we may not be able to resolve these conflicts on terms possible in arms-length transactions. 14 Ta ble of Contents Risk Related to Business, Industry and Operations Cyclicality in the petrochemical industry has in the past, and may in the future, result in reduced operating margins or operating losses.
Our interests may conflict with those of the principal stockholder and its affiliates, and we may not be able to resolve these conflicts on terms possible in arms-length transactions. Risk Related to Business, Industry and Operations Cyclicality in the petrochemical industry has in the past, and may in the future, result in reduced operating margins or operating losses.
As part of rejoining the Paris Agreement, President Biden announced that the United States would commit to a 50 to 52 percent reduction from 2005 levels of GHG emissions by 2030 and set the goal of reaching net-zero GHG emissions by 2050.
As part of rejoining the Paris Agreement, the United States announced that it would commit to a 50 to 52 percent reduction from 2005 levels of GHG emissions by 2030 and set the goal of reaching net-zero GHG emissions by 2050.
Competition within the petrochemical industry and in the manufacturing of housing and infrastructure products is affected by a variety of factors, including: • product price; • balance of product supply/demand; • material, technology and process innovation; • technical support and customer service; 17 Ta ble of Contents • quality; • reliability of raw material and utility supply; • availability of potential substitute materials; and • product performance.
Competition within the petrochemical industry and in the manufacturing of housing and infrastructure products is affected by a variety of factors, including: • product price; • balance of product supply/demand; • material, technology and process innovation; • technical support and customer service; • quality; • reliability of raw material and utility supply; • availability of potential substitute materials; and • product performance.
In addition, certain policies may be subject to coverage limitations, which may affect the extent of any recovery thereunder. As a result of market conditions and past claims, premiums and deductibles for certain insurance policies can increase substantially and, in some instances, certain insurance may become unavailable or available only for reduced amounts of coverage.
In addition, certain policies may be subject to coverage limitations, which may affect the extent of any recovery thereunder. As a result of market conditions and past claims, premiums and deductibles for certain insurance policies have increased and may continue to increase substantially and, in some instances, certain insurance may become unavailable or available only for reduced amounts of coverage.
As our chemical manufacturing processes result in GHG emissions, these and other GHG laws and regulations could affect our costs of doing business. 24 Ta ble of Contents Similarly, the Toxic Substances Control Act ("TSCA") imposes reporting, record-keeping and testing requirements, and restrictions relating to the production, handling, and use of chemical substances.
As our chemical manufacturing processes result in GHG emissions, these and other GHG laws and regulations could affect our costs of doing business. Similarly, the Toxic Substances Control Act ("TSCA") imposes reporting, record-keeping and testing requirements, and restrictions relating to the production, handling, and use of chemical substances.
The impact of COVID-19 and the conflicts in the Middle East and between Russia and Ukraine may lead to further supply chain constraints, supply and demand shifts, workforce availability issues and increased uncertainty in general economic and business conditions, including inflationary pressures, persistent high interest rates and possible recession.
The impact of the ongoing conflicts in the Middle East and between Russia and Ukraine may lead to further supply chain constraints, supply and demand shifts, workforce availability issues and increased uncertainty in general economic and business conditions, including inflationary pressures, high interest rates and possible recession.
Our failure to meet the challenges involved in integrating such businesses could adversely affect our results of operations. 19 Ta ble of Contents In addition, the overall integration of the businesses may result in material unanticipated problems, expenses, liabilities, competitive responses, loss of customer relationships, or diversion of management's attention.
Our failure to meet the challenges involved in integrating such businesses could adversely affect our results of operations. In addition, the overall integration of the businesses may result in material unanticipated problems, expenses, liabilities, competitive responses, loss of customer relationships, or diversion of management's attention.
The Credit Agreement also requires us to maintain a quarterly total leverage ratio. 27 Ta ble of Contents These covenants may adversely affect our ability to finance future business opportunities or acquisitions. A breach of any of these covenants could result in a default in respect of the related debt.
The Credit Agreement also requires us to maintain a quarterly total leverage ratio. These covenants may adversely affect our ability to finance future business opportunities or acquisitions. A breach of any of these covenants could result in a default in respect of the related debt.
The unfunded OPEB obligations as of December 31, 2023 were $44 million. We will require future operating cash flows to fund our pension and OPEB obligations, which could restrict available cash for our operations, capital expenditures and other requirements.
The unfunded OPEB obligations as of December 31, 2024 were $36 million. We will require future operating cash flows to fund our pension and OPEB obligations, which could restrict available cash for our operations, capital expenditures and other requirements.
Significant cost overruns or delays could materially affect our financial condition and results of operations. Additionally, actual capital expenditures could materially exceed our planned capital expenditures. Public and investor sentiment towards climate change and other environmental, social and governance ("ESG") matters could adversely affect our cost of capital and the price of our common stock.
Significant cost overruns or delays could materially affect our financial condition and results of operations. Additionally, actual capital expenditures could materially exceed our planned capital expenditures. Public and investor sentiment towards climate change and other sustainability matters could adversely affect our cost of capital and the price of our common stock.
For example, all of our petrochemical facilities in the United States and Europe may require improvements to comply with certain changes in process safety management requirements. New laws, rules and regulations as well as changes to laws, rules and regulations may also affect us.
For example, all of our petrochemical facilities in the United States and Europe may require improvements to comply with certain changes in process safety management requirements. New laws, rules and regulations as well as changes to laws, rules and regulations, including changes resulting from the new presidential administration, may also affect us.
Our results of operations have been and could in the future be significantly affected by increases in these costs. 15 Ta ble of Contents Price increases increase our working capital needs and, accordingly, can adversely affect our liquidity and cash flows.
Our results of operations have been and could in the future be significantly affected by increases in these costs. 16 Table of Contents Price increases increase our working capital needs and, accordingly, can adversely affect our liquidity and cash flows.
Such risks and costs may adversely affect our operations. 13 Ta ble of Contents • We may pursue acquisitions, dispositions, joint ventures or other transactions that may impact our results of operations and financial condition.
Such risks and costs may adversely affect our operations. • We may pursue acquisitions, dispositions, joint ventures or other transactions that may impact our results of operations and financial condition.
Risks Related to Taxes • A change in tax laws, treaties or regulations, or their interpretation or application, could have a negative impact on our business and results of operations. • We depend in part on distributions from Westlake Partners to generate cash for our operations, capital expenditures, debt service and other uses.
Risks Related to Taxes • A change in our effective income tax rate, including as a result of changes in tax laws, treaties or regulations, or their interpretation or application, could have a negative impact on our business and results of operations. • We depend in part on distributions from Westlake Partners to generate cash for our operations, capital expenditures, debt service and other uses.
Examples of external factors include: • general economic and business conditions, including in North America, Europe and Asia, including inflation, persistent high interest rates and possible recession; • new capacity additions in North America, Europe, Asia and the Middle East; • the level of business activity in the industries that use our products; • competitor action; • technological innovations; • currency fluctuations; • the impact of supply chain constraints and workforce availability; • international events and circumstances; • pandemics, such as COVID-19 pandemic, and other public health threats and efforts to contain their transmission; • war, sabotage, terrorism and civil unrest, including the conflicts between Russia and Ukraine and in the Middle East; • governmental regulation, including in the United States, Europe and Asia; • public attitude towards climate change and safety, health and the environment; • perceptions of our products by potential buyers of our products, as well as the public generally, and related changes in behavior, including with respect to recycling; • severe weather and natural disasters; • long-term impacts of climate change, including rising sea levels and changes in weather patterns, such as drought and flooding; and • credit worthiness of customers and vendors. 16 Ta ble of Contents A number of our products are highly dependent on durable goods markets, such as housing and construction, which are themselves particularly cyclical.
Examples of external factors include: • general economic and business conditions, including in North America, Europe and Asia, including inflation, persistent high interest rates and possible recession; • new capacity additions in North America, Europe, Asia and the Middle East; • the level of business activity in the industries that use our products; • competitor action; • technological innovations; • currency fluctuations; • the impact of supply chain constraints and workforce availability; • international events and circumstances; • pandemics, such as the COVID-19 pandemic, and other public health threats and efforts to contain their transmission; • war, sabotage, terrorism and civil unrest, including the conflicts between Russia and Ukraine and in the Middle East; • governmental regulation, including in the United States (including changes due to the new presidential administration), Europe and Asia; • public attitude towards climate change and safety, health and the environment; 17 Table of Contents • perceptions of our products by potential buyers of our products, as well as the public generally, and related changes in behavior, including with respect to recycling; • severe weather and natural disasters; • long-term impacts of climate change, including rising sea levels and changes in weather patterns, such as drought and flooding; and • credit worthiness of customers and vendors.
Over the past few years, there has also been an acceleration in investor demand for ESG investing opportunities, and many large institutional investors have committed to increasing the percentage of their portfolios that are allocated towards ESG investments.
Over the past few years, there has also been an acceleration in investor demand for investing opportunities in sustainability-focused companies, and many large institutional investors have committed to increasing the percentage of their portfolios that are allocated towards investments in companies with a commitment towards sustainability.
If we are delayed or unable to ship finished products or unable to obtain raw materials as a result of any such new regulations or public policy changes related to transportation safety, or these transportation companies fail to operate properly, or if there were significant changes in the cost of these services due to new or additional regulations, or otherwise, we may not be able to arrange efficient alternatives and timely means to obtain raw materials or ship goods, which could result in a material adverse effect on our business and results of operations.
If we are delayed or unable to ship finished products or unable to obtain raw materials as a result of any such new regulations or public policy changes related to transportation safety, or these transportation companies fail to operate properly, or if there were significant changes in the cost of these services due to new or additional regulations, or otherwise, we may not be able to arrange efficient alternatives and timely means to obtain raw materials or ship goods, which could result in a material adverse effect on our business and results of operations. 20 Table of Contents We may pursue acquisitions, dispositions, joint ventures or other transactions that may impact our results of operations and financial condition.
Legal, Governmental and Regulatory Risks • Our operations and assets are subject to extensive environmental, health and safety laws and regulations. • Our operations and assets are subject to climate-related risks and uncertainties. • We are subject to operational and financial risks and liabilities associated with the implementation of and efforts to achieve our carbon emission reduction goals.
Legal, Governmental and Regulatory Risks • Our operations and assets are subject to extensive environmental, health and safety laws and regulations. • We are subject to legal and regulatory claims, investigations and proceedings, some of which could be material. • Our operations and assets are subject to climate-related risks and uncertainties. • We are subject to operational and financial risks and liabilities associated with the implementation of and efforts to achieve our carbon emission reduction goals.
On May 6, 2022, the EPA finalized rules amending (i) the national emission standards for hazardous air pollutants ("NESHAPs") for mercury emissions from mercury cell chlor-alkali plants and (ii) the 2003 NESHAPs for mercury cell chlor-alkali plants residual risk and technology review.
On May 6, 2022, the EPA finalized rules amending (i) the NESHAPs for mercury emissions from mercury cell chlor-alkali plants and (ii) the 2003 NESHAPs for mercury cell chlor-alkali plants residual risk and technology review.
The total underfunded status of the pension obligations calculated on a projected benefit obligation basis as of December 31, 2023 was $305 million, including the Westlake Defined Benefit Plan and the Vinnolit Pension Plan (locally known as 'Grund- und Zusatzversorgung' in Germany), which were underfunded by $47 million and $142 million, respectively, on an individual plan basis.
The total net underfunded status of the pension obligations calculated on a projected benefit obligation basis as of December 31, 2024 was $223 million, including the Westlake Defined Benefit Plan and the Vinnolit Pension Plan (locally known as 'Grund- und Zusatzversorgung' in Germany), which were underfunded by $27 million and $125 million, respectively, on an individual plan basis.
Cyber-attacks could include, but are not limited to, ransomware attacks, malicious software, attempts to gain unauthorized access to our systems or data or other electronic security breaches that could lead to disruptions in critical systems, unauthorized release, corruption or loss of data including protected information such as personal information of our employees, interruptions in communication, loss of our intellectual property or theft of our sensitive or proprietary technology, loss or damage to our data delivery systems, or other cybersecurity and infrastructure systems, including our property and equipment.
Cyber-attacks could include, but are not limited to, ransomware attacks, malicious software, attempts to gain unauthorized access to our systems or data or other electronic security breaches that could lead to disruptions in critical systems, unauthorized release, corruption or loss of data including protected information such as personal information of our employees, interruptions in communication, loss of our intellectual property or theft of our sensitive or proprietary technology, loss or damage to our data delivery systems or other cybersecurity and infrastructure systems, including our property and equipment, diversion of management or work force attention, or increased costs required to prevent, respond to or mitigate the incident.
We cannot predict the ultimate impact of achieving our emissions reduction goal, or the various implementation aspects, on our financial condition and results of operations. 26 Ta ble of Contents Risks Related to Our Indebtedness Our level of debt could adversely affect our ability to operate our business.
We cannot predict the ultimate impact that our emissions reduction goal, or the various implementation aspects, will have on our financial condition and results of operations. Risks Related to Our Indebtedness Our level of debt could adversely affect our ability to operate our business.
In November 2023, the European Chemicals Agency ("ECHA") sent its investigation results of the risks from PVC and PVC additives to the European Commission for further consideration. The EPA has proposed risk management rules which would phase out the manufacturing, processing and distribution of TCE completely, PCE for consumer and most industrial and commercial uses, and asbestos for commercial use.
In November 2023, the European Chemicals Agency ("ECHA") sent its investigation results of the risks from PVC and PVC additives to the European Commission for further consideration. In December 2024, the EPA finalized risk management rules which phase out the manufacturing, processing and distribution of trichloroethylene (TCE) completely and perchloroethylene (PCE) for consumer and most industrial and commercial uses.
We manufacture several of these chemical substances. On December 14, 2023, the EPA announced that it will prioritize vinyl chloride (used to make PVC) for evaluation and potential regulation under TSCA as a High Priority Substance.
We manufacture several of these chemical substances. On December 14, 2023, the EPA announced that it would prioritize vinyl chloride (used to make PVC) for evaluation and potential regulation under TSCA as a High Priority Substance and in July 2024, the EPA announced it would move forward with the designation of vinyl chloride as a High Priority Substance.
On March 14, 2023, the EPA announced a proposed National Primary Drinking Water Regulation for six PFAS, including PFOA, PFOS, perfluorononanoic acid (PFNA), hexafluoropropylene oxide dimer acid (HFPO-DA, commonly known as GenX Chemicals), perfluorohexane sulfonic acid (PFHxS), and perfluorobutane sulfonic acid (PFBS). On February 7, 2023, the ECHA published proposed restrictions on PFAS.
On April 10, 2024, the EPA announced its final National Primary Drinking Water Regulation under the Safe Drinking Water Act for six PFAS, including PFOA, PFOS, perfluorononanoic acid (PFNA), hexafluoropropylene oxide dimer acid (HFPO-DA, commonly known as GenX Chemicals), perfluorohexane sulfonic acid (PFHxS), and perfluorobutane sulfonic acid (PFBS). On February 7, 2023, the ECHA published proposed restrictions on PFAS.
Other factors that might impact the homebuilding industry include uncertainty in domestic and international financial, credit and consumer lending markets amid slow economic growth or recessionary conditions in various regions or industries around the world, including as a result of the conflicts in the Middle East and between Russia and Ukraine, higher interest rates, tight lending standards and practices for mortgage loans that limit consumers' ability to qualify for mortgage financing to purchase a home, higher home prices, population declines or slower rates of population growth or U.S.
Other factors that might impact the homebuilding industry include uncertainty in domestic and international financial, credit and consumer lending markets amid slow economic growth or recessionary conditions in various regions or industries around the world, including as a result of the conflicts in the Middle East and between Russia and Ukraine, higher interest rates, tight lending standards and practices for mortgage loans that limit consumers' ability to qualify for mortgage financing to purchase a home, higher home prices, reliance on inadequately capitalized builders and sub-contractors, population declines, unfavorable changes in consumer demographics or preferences, adverse weather conditions, shortages of skilled labor or qualified tradesmen or slower rates of population growth or U.S.
If there is limited economic growth, a decline in employment and consumer income, a general change in consumer behavior and/or tightening of mortgage lending standards, practices and regulation, or if interest rates for mortgage loans or home prices rise, there could be a corresponding adverse effect on our financial condition, results of operations or cash flows, including, but not limited to, the amount of revenues or profits we generate in our Housing and Infrastructure Products segment.
If there is limited economic growth, a decline in employment and consumer income, a general change in consumer behavior and/or tightening of mortgage lending standards, practices and regulation, or if interest rates for mortgage loans or home prices rise, or other factors adversely affecting demand for home construction, renovations or remodeling, there could be a corresponding adverse effect on our financial condition, results of operations or cash flows, including, but not limited to, the amount of revenues or profits we generate in our Housing and Infrastructure Products segment. 18 Table of Contents Our inability to compete successfully may reduce our operating profits.
We are unable to predict the impact these requirements and concepts may have on our future costs of compliance. Under the IED, European Union member state governments are expected to adopt rules and implement environmental permitting programs relating to air, water and waste for industrial facilities. In this context, concepts such as the "best available technique" are being explored.
We are unable to predict the impact these requirements and concepts may have on our future costs of compliance. 27 Table of Contents Under the IED, European Union member state governments are expected to adopt rules and implement environmental permitting programs relating to air, water and waste for industrial facilities.
In addition, we may be liable for existing contamination related to certain of our facilities for which, in some cases, we believe third parties are liable in the event such third parties fail to perform their obligations. Our operations and assets are subject to climate-related risks and uncertainties.
In addition, we may be liable for existing contamination related to certain of our facilities for which, in some cases, we believe third parties are liable in the event such third parties fail to perform their obligations. We are subject to legal and regulatory claims, investigations and proceedings, some of which could be material.
As of December 31, 2023, our indebtedness, including the current portion, totaled $4.9 billion, and our debt represented approximately 31.3% of our total capitalization. Our annual interest expense for 2023 was $165.0 million, net of interest capitalized of $8.0 million.
As of December 31, 2024, our indebtedness, including the current portion, totaled $4.6 billion, and our debt represented approximately 29.2% of our total capitalization. Our annual interest expense for 2024 was $159.0 million, net of interest capitalized of $13.0 million.
These proposed amendments, among other things, would impose tougher emissions limits, additional leak detection and repair obligations, certain performance standard for the operation of flares at applicable facilities, and new fenceline air monitoring for several chemicals.
These amendments, among other things, impose tougher emissions limits, additional leak detection and repair obligations, certain performance standard for the operation of flares at applicable facilities, and new fenceline air monitoring for several chemicals. The amendments may require us to incur further capital expenditures and increase operating costs.
In the event of a terrorist attack impacting one or more of our facilities, we could lose the net sales from the facilities and the facilities themselves, and could become liable for any contamination or for personal or property damage due to exposure to hazardous materials caused by any catastrophic release that may result from a terrorist attack.
In the event of a terrorist attack impacting one or more of our facilities, we could lose the net sales from the facilities and the facilities themselves, and could become liable for any contamination or for personal or property damage due to exposure to hazardous materials caused by any catastrophic release that may result from a terrorist attack. 24 Table of Contents The impact and effects of public health crises, pandemics and epidemics could adversely affect our business, financial condition and results of operations.
If we were to incur a significant liability for which we were not fully insured, or if an insurer was unwilling or unable to meet its obligations, it could have a material adverse effect on our financial condition, results of operations or cash flows. 18 Ta ble of Contents We are exposed to significant losses from products liability, personal injury and other claims relating to the products we manufacture.
If we were to incur a significant liability for which we were not fully insured, or if an insurer was unwilling or unable to meet its obligations, it could have a material adverse effect on our financial condition, results of operations or cash flows.
Under the risk management rule process established by the TSCA, the EPA has also issued several Test Orders for chemical substances that we manufacture or import, including EDC.
Under the risk management rule process established by the TSCA, the EPA has also issued several Test Orders for chemical substances that we manufacture or import, including EDC. In July 2024, EPA issued a draft TSCA human health hazard assessment for EDC for public comment and peer review.
The United States signed the Paris Agreement in April 2016, and the Paris Agreement went into effect in November 2016. In November 2019, the United States submitted formal notification to the United Nations that it intended to withdraw from the Paris Agreement. The withdrawal took effect in November 2020.
In November 2019, the United States submitted formal notification to the United Nations that it intended to withdraw from the Paris Agreement. The withdrawal took effect in November 2020. On February 19, 2021, the United States formally rejoined the Paris Agreement.
On January 12, 2023, the EPA published a tentative denial of the 2014 Center for Biological Diversity Petition to regulate discarded PVC as hazardous waste under the Resource Conservation and Recovery Act. Pursuant to a consent decree entered into by the EPA and the Center for Biological Diversity, the EPA has until April 12, 2024 to issue its final determination.
On April 26, 2024, the EPA published a final denial of the 2014 Center for Biological Diversity Petition to regulate discarded PVC as hazardous waste under the Resource Conservation and Recovery Act.
In the fourth quarter of 2023, we recorded a goodwill impairment charge in the PEM segment of $128 million related to Westlake Epoxy and a non-cash long-lived asset impairment charge of $347 million related to our base epoxy resin business in the Netherlands. 21 Ta ble of Contents The process of impairment testing for our goodwill and long-lived assets involves a number of judgments and estimates made by management including the fair values of assets and liabilities, future cash flows, our interpretation of current economic indicators and market conditions, overall economic conditions and our strategic operational plans with regards to our business units.
The process of impairment testing for our goodwill and long-lived assets involves a number of judgments and estimates made by management including the fair values of assets and liabilities, future cash flows, our interpretation of current economic indicators and market conditions, overall economic conditions and our strategic operational plans with regards to our business units.
In addition, we are exposed to volatility in interest rates. When appropriate, we may use derivative financial instruments to reduce our exposure to interest rate risks.
In addition, we are exposed to volatility in interest rates. When appropriate, we may use derivative financial instruments to reduce our exposure to interest rate risks. However, our financial risk management program may not be successful in reducing the risks inherent in exposures to interest rate fluctuations.
Additionally, individuals currently seek, and likely will continue to seek, damages for alleged personal injury or property damage due to alleged exposure to chemicals at our facilities or to chemicals otherwise owned, controlled or manufactured by us. We are also subject to present and future claims with respect to workplace exposure, workers' compensation and other matters.
We are exposed to significant losses from products liability, personal injury and other claims relating to the products we manufacture. Additionally, individuals currently seek, and likely will continue to seek, damages for alleged personal injury or property damage due to alleged exposure to chemicals at our facilities or to chemicals otherwise owned, controlled or manufactured by us.
Information technology system failures, network disruptions and breaches of data security due to internal or external factors including cyber-attacks could have material adverse impacts on our business—and the business of our subsidiaries and affiliates that we support—or cause disruptions to our operations.
We use these technologies for internal and operational purposes, including data storage, processing, and transmission, as well as in our interactions with our business associates, such as customers and suppliers. 23 Table of Contents Information technology system failures, network disruptions and breaches of data security due to internal or external factors including cyber-attacks could have material adverse impacts on our business—and the business of our subsidiaries and affiliates that we support—or cause disruptions to our operations.
These and similar events have caused and may again cause supply chain constraints and disruptions and workforce availability issues as well. Legal, Governmental and Regulatory Risks Our operations and assets are subject to extensive environmental, health and safety laws and regulations. We use large quantities of hazardous substances and generate hazardous wastes and emissions in our manufacturing operations.
Legal, Governmental and Regulatory Risks Our operations and assets are subject to extensive environmental, health and safety laws and regulations. We use large quantities of hazardous substances and generate hazardous wastes and emissions in our manufacturing operations.
New capacity additions, principally of ethylene, polyethylene, chlorine, caustic soda and PVC in North America, Asia and the Middle East and in the epoxy value chain in Asia, a number of which have been recently completed, may lead to periods of over-supply and lower profitability.
It is not possible to predict accurately the supply and demand balances, market conditions and other factors that will affect industry operating margins in the future. 14 Table of Contents New capacity additions, principally of ethylene, polyethylene, chlorine, caustic soda and PVC in North America, Asia and the Middle East and in the epoxy value chain in Asia, a number of which have been recently completed, may lead to periods of over-supply and lower profitability.
The integration process may disrupt the businesses and, if implemented ineffectively or if impacted by unforeseen negative economic or market conditions or other factors, we may not realize the full anticipated benefits of the acquisitions.
As a result, we have devoted, and will continue to devote significant management attention and resources to integrating business practices and operations. The integration process may disrupt the businesses and, if implemented ineffectively or if impacted by unforeseen negative economic or market conditions or other factors, we may not realize the full anticipated benefits of the acquisitions.
We are subject to operational and financial risks and liabilities associated with the implementation of and efforts to achieve our carbon emission reduction goals. We have publicly announced a GHG emissions reduction target for 2030.
We are subject to operational and financial risks and liabilities associated with the implementation of and efforts to achieve our carbon emission reduction goals. We have publicly announced a target 20% reduction in our Scope 1 and Scope 2 CO2 equivalent emissions intensity per ton of production by 2030 from a 2016 baseline.
The EPA issued its final rule on September 28, 2023, which requires manufacturers, and importers, that have manufactured or imported PFAS chemicals since January 1, 2011, to electronically report information regarding PFAS uses, production volumes, disposal, exposures, and hazards. On September 6, 2022, the EPA proposed listing perfluorooctanoic acid ("PFOA") and perfluorooctane sulfonic acid (PFOS) as CERCLA hazardous substances.
On September 28, 2023, the EPA released its final rule for the reporting and recordkeeping requirements for PFAS under TSCA, which requires manufacturers, and importers, that have manufactured or imported PFAS chemicals since January 1, 2011, to electronically report information regarding PFAS uses, production volumes, disposal, exposures, and hazards.
Risks Related to Taxes A change in tax laws, treaties or regulations, or their interpretation or application, could have a negative impact on our business and results of operations.
Risks Related to Taxes A change in our effective income tax rate, including as a result of changes in tax laws, treaties or regulations, or their interpretation or application, could have a negative impact on our business and results of operations. We operate in many different countries and in many states within the United States.
These transactions may not yield the business benefits, synergies or financial benefits anticipated by management. Integration of acquired operations could lead to restructuring charges or other costs. Our ability to realize the anticipated benefits of acquisitions will depend, to a large extent, on our ability to integrate our business with the acquired businesses.
Acquisitions or dispositions may not yield the business benefits, synergies or financial benefits anticipated by management. Integration of acquired operations could lead to restructuring charges or other costs.
Westlake Partners' tax treatment depends on its status as a partnership for federal income tax purposes, and it not being subject to a material amount of entity-level taxation.
We depend in part on distributions from Westlake Partners to generate cash for our operations, capital expenditures, debt service and other uses. Westlake Partners' tax treatment depends on its status as a partnership for federal income tax purposes, and it not being subject to a material amount of entity-level taxation.
Any such claims, whether with or without merit, could be time consuming, expensive to defend and could divert management's attention and resources.
We are also subject to present and future claims with respect to workplace exposure, workers' compensation and other matters. Any such claims, whether with or without merit, could be time consuming, expensive to defend and could divert management's attention and resources.
These risks include, but are not limited to, fluctuations in currency exchange rates, currency devaluations, imposition or the threat of trade barriers (which could, among other things, negatively impact our ability to export our products outside of the United States), imposition or the threat of tariffs and duties (which could, among other things, lead to lower demand for our products outside of the United States), inflationary pressures and possibility of recession, restrictions on the transfer of funds, changes in law and regulatory requirements, involvement in judicial proceedings in unfavorable jurisdictions, economic instability and disruptions, political unrest and epidemics.
These risks include, but are not limited to, fluctuations in currency exchange rates, currency devaluations, inflationary pressures and possibility of recession, restrictions on the transfer of funds, changes in law and regulatory requirements, involvement in judicial proceedings in unfavorable jurisdictions, economic instability and disruptions, political unrest and epidemics. Our operating results could be negatively affected by any of these risks.
However, increased regulation on the use of plastics could cause reduced demand for our polyethylene products, which could adversely affect our business, operating results and financial condition. 25 Ta ble of Contents These rules or future new, amended or proposed laws or rules could increase our costs or reduce our production, which could have a material adverse effect on our business, financial condition, operating results or cash flows.
These rules or future new, amended or proposed laws or rules could increase our costs or reduce our production, which could have a material adverse effect on our business, financial condition, operating results or cash flows.
Our insurance carriers maintain certain exclusions for losses from terrorism from our property insurance policies. While separate terrorism insurance coverage is available, premiums for full coverage are very expensive, especially for chemical facilities, and the policies are subject to high deductibles.
While separate terrorism insurance coverage is available, premiums for full coverage are very expensive, especially for chemical facilities, and the policies are subject to high deductibles. Available terrorism coverage typically excludes coverage for losses from acts of war and from acts of foreign governments as well as nuclear, biological and chemical attacks.
The U.S. housing market remained strong throughout the COVID-19 pandemic, but began softening at the end of the second quarter of 2022 and continued to decline throughout 2023 primarily due to inflationary pricing, rapidly rising interest rates for mortgage loans and increasing construction costs.
Although the U.S. housing market remained strong throughout the COVID-19 pandemic, demand for home construction, renovations and remodeling began softening at the end of the second quarter of 2022 and has continued to decline throughout 2024 primarily due to inflationary pricing, high interest rates for mortgage loans, elevated construction costs and the impacts of tariffs on lumber and other raw materials imported into the United States.
Although we cannot predict the outcome or timing of EPA's final rule amendments, the amendments as proposed would require us to incur further capital expenditures and increase operating costs.
Although we cannot predict the outcome or timing of the legal challenges or EPA reconsideration, the EPA's proposed rule amendments could require us to incur further capital expenditures, or increase our operating costs, to levels higher than what we have previously estimated.
We have U.S. and non-U.S. defined benefit pension plans covering certain current and former employees. Certain non-U.S. defined benefit plans associated with our European operations have not been funded and we are not obligated to fund those plans under applicable law.
Certain non-U.S. defined benefit plans associated with our European operations have not been funded and we are not obligated to fund those plans under applicable law. As of December 31, 2024, the projected benefit obligations for our pension and OPEB plans were $1,018 million and $36 million, respectively.
We operate internationally and are subject to related risks, including exchange rate fluctuations, exchange controls, political risk and other risks relating to international operations. We operate internationally and are subject to the risks of doing business on a global basis.
We operate internationally and are subject to the risks of doing business on a global basis.
Failure to adequately protect critical data and technology systems could materially affect our operations. We are increasingly dependent on digital technologies and services to conduct our business. We use these technologies for internal and operational purposes, including data storage, processing, and transmission, as well as in our interactions with our business associates, such as customers and suppliers.
Failure to adequately protect critical data and technology systems could materially affect our operations. We are increasingly dependent on digital technologies and services to conduct our business.
Our operations may be adversely affected by strikes, work stoppages and other labor disputes. We have certain material pension and other post-retirement employment benefit ("OPEB") obligations. Future funding obligations related to these obligations could restrict cash available for our operations, capital expenditures or other requirements or require us to borrow additional funds .
Future funding obligations related to these obligations could restrict cash available for our operations, capital expenditures or other requirements or require us to borrow additional funds . We have U.S. and non-U.S. defined benefit pension plans covering certain current and former employees.
We cannot predict the timing or content of these actions or amendments, or their ultimate cost to, or impact on us. On June 28, 2021, the EPA proposed reporting and recordkeeping requirements for Per- and Polyfluoroalkyl Substances ("PFAS") under TSCA.
We cannot predict the timing or content of these actions or amendments, or their ultimate cost to, or impact on us. Per- and Polyfluoroalkyl Substances ("PFAS") chemicals have come under increased scrutiny by federal, state, and local governments.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur focus is on protecting our highest-value information assets, which include manufacturing systems, financial systems, and confidential, personal, and private information. 29 Ta ble of Contents To safeguard our networks and systems, we have a dedicated cybersecurity organization overseen by our Chief Information Security Officer, which operates within our information technology department overseen by our Chief Information Officer.
Biggest changeOur focus is on protecting our highest-value information assets, which include manufacturing systems, financial systems, and confidential, personal, and private information. 32 Table of Contents To safeguard our networks and systems, we have a dedicated cybersecurity organization overseen by our Chief Information Security Officer, which operates within our information technology department overseen by our Chief Information Officer.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeSee Note 20 to the consolidated financial statements appearing elsewhere in this Form 10-K and "Certain Relationships and Related Party Transactions" in our proxy statement to be filed with the SEC pursuant to Regulation 14A with respect to our 2024 annual meeting of stockholders (the "Proxy Statement").
Biggest changeSee Note 19 to the consolidated financial statements appearing elsewhere in this Form 10-K and "Certain Relationships and Related Party Transactions" in our proxy statement to be filed with the SEC pursuant to Regulation 14A with respect to our 2025 annual meeting of stockholders (the "Proxy Statement").

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings In addition to the matters described under "Item 1. Business — Environmental" and Note 22 to our consolidated financial statements included in Item 8 of this Form 10-K, we are involved in various legal proceedings incidental to the conduct of our business.
Biggest changeItem 3. Legal Proceedings In addition to the matters described under "Item 1. Business — Environmental" and Note 21 to our consolidated financial statements included in Item 8 of this Form 10-K, we are involved in various legal proceedings incidental to the conduct of our business.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeChao and his brother James Chao in founding Westlake Corporation (formerly known as Westlake Chemical Corporation), where he served as Executive Vice President until he succeeded James Chao as President. In addition, Mr. Chao has been the President, Chief Executive Officer and a director of Westlake Partners' general partner since its formation in March 2014.
Biggest changeChao has been a director of Westlake Partners' general partner since its formation in March 2014, its Executive Chairman of the Board since July 2024 and served as its President and Chief Executive Officer from March 2014 to July 2024. In 1985, Mr. Chao assisted his father T.T. Chao and his brother James Chao in founding Westlake Corporation.
He has served as a Special Assistant to the Chairman of China General Plastics Group and worked in various financial, managerial and technical positions at Mattel Incorporated, Developmental Bank of Singapore, Singapore Gulf Plastics Pte. Ltd. and Gulf Oil Corporation. Mr. Chao, along with his brother Albert Chao, assisted their father T.T.
He has served as a Special Assistant to the Chairman of China General Plastics Group and worked in various financial, managerial and technical positions at Mattel Incorporated, Developmental Bank of Singapore, Singapore Gulf Plastics Pte. Ltd. and Gulf Oil Corporation. Mr. Chao, along with his brother Albert Chao, assisted their father T.T. Chao in founding Westlake Corporation.
Bender received a Bachelor of Business Administration from Texas A&M University and an M.B.A. from Southern Methodist University. Mr. Bender is also a Certified Public Accountant. Robert F. Buesinger (age 67) . Mr. Buesinger has been our Executive Vice President, Housing and Infrastructure Products, IT and Digital since February 2022. From July 2017 to February 2022, Mr.
Bender received a Bachelor of Business Administration from Texas A&M University and an M.B.A. from Southern Methodist University. Mr. Bender is also a Certified Public Accountant. Robert F. Buesinger (age 68) . Mr. Buesinger has been our Executive Vice President, Housing and Infrastructure Products, IT and Digital since February 2022. From July 2017 to February 2022, Mr.
Ederington holds a B.A. from Yale University and received his J.D. from Harvard University. Thomas J, Janssens (age 58). Mr. Janssens has been our Senior Vice President, Operations — Performance and Essential Material & Corporate Logistics since March 2022. From January 2021 to March 2022, Mr.
Ederington holds a B.A. from Yale University and received his J.D. from Harvard University. Thomas J, Janssens (age 59). Mr. Janssens has been our Senior Vice President, Operations — Performance and Essential Material & Corporate Logistics since March 2022. From January 2021 to March 2022, Mr.
Prior to that, he held various technical and sales management positions within that company. Mr. Buesinger holds a B.S. in Chemical Engineering from Tulane University. 31 Table of Contents L. Benjamin Ederington (age 53). Mr. Ederington has been our Executive Vice President, Performance and Essential Materials, General Counsel and Chief Administrative Officer since April 2023.
Prior to that, he held various technical and sales management positions within that company. Mr. Buesinger holds a B.S. in Chemical Engineering from Tulane University. 34 Table of Contents L. Benjamin Ederington (age 54). Mr. Ederington has been our Executive Vice President, Performance and Essential Materials, General Counsel and Chief Administrative Officer since April 2023.
From February 2008 to July 2017, Mr. Bender served as our Senior Vice President and Chief Financial Officer. In addition, Mr. Bender served as our Treasurer from July 2011 to April 2017, a position he also held from February 2008 until December 2010. From February 2007 to February 2008, Mr.
Bender served as our Treasurer from July 2011 to April 2017, a position he also held from February 2008 until December 2010. From February 2007 to February 2008, Mr. Bender served as our Vice President, Chief Financial Officer and Treasurer and from June 2005 to February 2007, he served as our Vice President and Treasurer. In addition, Mr.
He began his career with Shell International in 1991, where he held a variety of commercial, engineering and planning roles. Mr. Janssens holds a MSc in Chemical Engineering from Eindhoven University of Technology and an MBA from the University of Chicago. Johnathan S. Zoeller (age 48). Mr. Zoeller has been our Vice President and Chief Accounting Officer since March 2020.
He began his career with Shell International in 1991, where he held a variety of commercial, engineering and planning roles. Mr. Janssens holds a MSc in Chemical Engineering from Eindhoven University of Technology and an MBA from the University of Chicago. Jeffrey A. Holy (age 45). Mr. Holy has been our Vice President and Chief Accounting Officer since April 2024.
Chao in founding Westlake Corporation (formerly known as Westlake Chemical Corporation). He is the brother of Albert Y. Chao, father of Catherine T. Chao and David T. Chao and uncle of John T. Chao and Carolyn C. Sabat. Mr. Chao received his B.S. degree from Massachusetts Institute of Technology and an M.B.A. from Columbia University. Albert Y.
He is the brother of Albert Y. Chao, father of Catherine T. Chao and David T. Chao and uncle of John T. Chao and Carolyn C. Sabat. Mr. Chao received his B.S. degree from Massachusetts Institute of Technology and an M.B.A. from Columbia University. Albert Y. Chao (age 75) . Mr.
Item 4. Mine Safety Disclosure Not Applicable. 30 Table of Contents Information about our Executive Officers James Y. Chao (age 76) . Mr. Chao has been our Chairman of the Board of Directors since July 2004 and became a director in June 2003. From May 1996 to July 2004, he served as our Vice Chairman. Mr.
Item 4. Mine Safety Disclosure Not Applicable. 33 Table of Contents Information about our Executive Officers James Y. Chao (age 77) . Mr. Chao has been our Senior Chairman of the Board of Directors since July 2024 and became a director in June 2003. From July 2004 to July 2024, Mr.
Chao, father of John T. Chao and Carolyn C. Sabat and uncle of Catherine T. Chao and David T. Chao. Mr. Chao received a bachelor's degree from Brandeis University and an M.B.A. from Columbia University. M. Steven Bender (age 67). Mr. Bender has been our Executive Vice President and Chief Financial Officer since July 2017.
Chao, father of John T. Chao and Carolyn C. Sabat and uncle of Catherine T. Chao and David T. Chao. Mr. Chao received a bachelor's degree from Brandeis University and an M.B.A. from Columbia University. Jean-Marc Gilson (age 61). Mr. Gilson has been our President and Chief Executive Officer since July 2024. Mr.
From August 2018 to March 2020, Mr. Zoeller served as our Vice President and Corporate Controller. In addition, Mr. Zoeller has been the Vice President and Chief Accounting Officer of Westlake Partners' general partner since March 2020. Mr.
From April 2017 to April 2024, Mr. Holy served as our Vice President and Treasurer. In addition, Mr. Holy has been the Vice President and Chief Accounting Officer of Westlake Partners' general partner since April 2024 and served as its Vice President and Treasurer from April 2017 to April 2024.
Chao has over 45 years of global experience in the chemical industry. In addition, Mr. Chao has been the Chairman of the Board of Westlake Partners' general partner since its formation in March 2014. From June 2003 until November 2010, Mr. Chao was the executive chairman of Titan Chemicals Corp. Bhd.
Chao has been a director of Westlake Partners' general partner since its formation in March 2014, its Senior Chairman of the Board since July 2024 and served as its Chairman of the Board from July 2014 to July 2024. From June 2003 until November 2010, Mr. Chao was the executive chairman of Titan Chemicals Corp. Bhd.
Bender served as our Vice President, Chief Financial Officer and Treasurer and from June 2005 to February 2007, he served as our Vice President and Treasurer. In addition, Mr.
Steven Bender (age 68). Mr. Bender has been our Executive Vice President and Chief Financial Officer since July 2017. From February 2008 to July 2017, Mr. Bender served as our Senior Vice President and Chief Financial Officer. In addition, Mr.
Chao (age 74) . Mr. Chao has been our President since May 1996 and a director since June 2003. Mr. Chao became our Chief Executive Officer in July 2004. Mr. Chao has over 40 years of global experience in the chemical industry. In 1985, Mr. Chao assisted his father T.T.
Chao has been our Executive Chairman of the Board of Directors since July 2024 and a director since June 2003. From May 1996 to July 2024, Mr. Chao served as President and, from July 2004 to July 2024 he served as our Chief Executive Officer. In addition, Mr.
He began his career with Arthur Andersen LLP in 1998. Mr. Zoeller holds a Bachelor of Accounting degree and a Master of Accounting degree from the University of Mississippi. He is a Certified Public Accountant. 32 Table of Contents PART II
He began his career in public accounting with Ernst & Young LLP in 2001. Mr. Holy holds a Bachelor of Science Degree from Trinity University in Business Administration and Economics, a Master in Accounting Degree from the University of Virginia, and a Master in Finance Degree from London Business School.
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Zoeller joined us with over 19 years of public accounting experience, the majority of which was spent at KPMG LLP, where he was responsible for clients in the chemicals, oilfield services and oil/gas exploration and production industries. Mr. Zoeller held a variety of senior accounting positions at KPMG, including most recently as Partner, Audit from October 2011 to August 2018.
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Chao served as Chairman of the Board and, from May 1996 to July 2004, he served as our Vice Chairman. In addition, Mr.
Added
Gilson has also served as President and Chief Executive Officer and a Director of Westlake Partners' general partner since July 2024. Prior to joining Westlake, Mr. Gilson served as President, Chief Executive Officer and Representative Director of Mitsubishi Chemical Group Corporation (formerly known as Mitsubishi Chemical Holdings Corporation), from April 2021 until April 2024.
Added
From September 2014 until December 2020, Mr. Gilson served as Chief Executive Officer of Roquette Frères. Before that, Mr. Gilson served as Vice-Chairman and Chief Operating Officer of NuSil Technology LLC. Earlier in his career, Mr.
Added
Gilson held various leadership roles at Dow Corning Corporation, including Executive Vice President, Specialty Chemicals Business, before becoming Chief Executive Officer of Avantor Performance Materials, Inc. Mr. Gilson holds a Master of Science in Chemical Engineering from the University of Liege in Belgium and an Executive Master of Business Administration from the International Institute for Management Development in Switzerland. M.
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Prior to joining Westlake, from October 2014 to March 2017, Mr. Holy was Assistant Treasurer at FMC Technologies, Inc. and from October 2013 to September 2014 was Director of Corporate Finance. From September 2007 to September 2013, he held various financial positions at General Motors Company in their Treasurers' Office in New York and Germany.
Added
He is a Chartered Financial Analyst and Certified Public Accountant. 35 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeAs of December 31, 2023, 8,722,550 shares of our common stock had been acquired at an aggregate purchase price of approximately $574 million under the 2014 Program. Transaction fees and commissions are not reported in the average price paid per share in the table above.
Biggest changeDuring the year ended December 31, 2024, 480,081 shares of our common stock were repurchased for an aggregate purchase price of $60 million under the 2014 Program. As of December 31, 2024, 9,202,631 shares of our common stock had been acquired at an aggregate purchase price of approximately $634 million under the 2014 Program.
Our common stock is listed on the New York Stock Exchange under the symbol "WLK." Unregistered Sales of Equity Securities We did not have any unregistered sales of equity securities during the quarter or fiscal year ended December 31, 2023 that we have not previously reported on a Quarterly Report on Form 10-Q or a Current Report on Form 8-K.
Our common stock is listed on the New York Stock Exchange under the symbol "WLK." Unregistered Sales of Equity Securities We did not have any unregistered sales of equity securities during the quarter or fiscal year ended December 31, 2024 that we have not previously reported on a Quarterly Report on Form 10-Q or a Current Report on Form 8-K.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Stockholder Matters As of February 14, 2024, there were 30 holders of record of our common stock.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Stockholder Matters As of February 18, 2025, there were 29 holders of record of our common stock.
Issuer Purchases of Equity Securities The following table provides information on our purchase of equity securities during the quarter ended December 31, 2023: 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) October 2023 3,582 $ 122.54 — $ 476,162,426 November 2023 — — — 476,162,426 December 2023 — — — 476,162,426 Total 3,582 $ 122.54 — ______________________________ (1) Represents 3,582 shares withheld in October 2023 in satisfaction of withholding taxes due upon the vesting of restricted stock units granted to our employees under the 2013 Omnibus Incentive Plan.
Issuer Purchases of Equity Securities The following table provides information on our purchase of equity securities during the quarter ended December 31, 2024: 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) October 2024 3,136 $ 149.15 — $ 476,162,426 November 2024 163,556 128.37 163,556 455,166,139 December 2024 316,525 123.19 316,525 416,172,903 Total 483,217 $ 125.11 480,081 ______________________________ (1) Represents 3,136 shares withheld in October 2024 in satisfaction of withholding taxes due upon the vesting of restricted stock units granted to our employees under the 2013 Omnibus Incentive Plan.
Decisions regarding the amount and the timing of purchases under the 2014 Program will be influenced by our cash on hand, our cash flows from operations, general market conditions and other factors. The 2014 Program may be discontinued by our Board of Directors at any time. 33 Table of Contents
Transaction fees and commissions are not reported in the average price paid per share in the table above. Decisions regarding the amount and the timing of purchases under the 2014 Program will be influenced by our cash on hand, our cash flows from operations, general market conditions and other factors.
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The 2014 Program may be discontinued by our Board of Directors at any time. 36 Table of Contents

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe $1,001 million increase in cash flows from operating activities was mainly due to the increase in income from operations, which was partially offset by working capital changes and an unfavorable change related to the turnaround at OpCo's Petro 2 facility and other turnaround activities.
Biggest changeCash Flows Operating Activities Operating activities provided cash of $1,314 million in 2024 as compared to cash provided by operating activities of $2,336 million in 2023. The $1,022 million decrease in cash flow from operating activities was mainly due to unfavorable changes in working capital and lower prices for most of our products resulting in lower operating income.
Westlake is the second-largest chlor-alkali producer and the second-largest PVC producer in the world, which makes Westlake a leading global chlorovinyls producer. Our performance and essential materials are used by customers in food and specialty packaging; industrial and consumer packaging; medical health applications; PVC pipe applications; consumer durables; mobility and transportation; renewable wind energy; coatings; and housing and construction products.
Westlake is the second-largest chlor-alkali producer and the second-largest PVC producer in the world, which makes Westlake a leading global chlorovinyls producer. Our performance and essential materials are used by customers in PVC pipe applications; housing and construction products; food and specialty packaging; industrial and consumer packaging; renewable wind energy; coatings; consumer durables; medical health applications; and mobility and transportation.
Investing activities during 2022 were comprised primarily of the acquisition of Westlake Epoxy in February 2022 for $1,163 million, the purchase of an additional 3.2% interest in LACC for $89 million, aggregate contributions of $87 million to LACC, capital expenditures, and other asset acquisitions.
The investing activities during 2022 were comprised primarily of the acquisition of Westlake Epoxy in February 2022 for $1,163 million, the purchase of an additional 3.2% interest in LACC for $89 million, aggregate contributions of $87 million to LACC, capital expenditures, and other asset acquisitions.
Financing Activities Net cash used by financing activities during 2023 was $245 million as compared to net cash used by financing activities of $587 million in 2022.
Net cash used by financing activities during 2023 was $245 million as compared to net cash used of $587 million in 2022.
Chlor-alkali and petrochemicals are typically manufactured globally in large volume by a number of different producers using widely available technologies. The chlor-alkali and petrochemical industries exhibit cyclical commodity characteristics, and margins are influenced by changes in the balance between supply and demand and the resulting operating rates, the level of general economic activity and the price of raw materials.
Chlor-alkali and petrochemicals are typically manufactured globally in large volume by a number of different producers using widely available technologies. The chlor-alkali and petrochemical industries exhibit cyclical commodity characteristics, and margins are influenced by changes in the balance between global supply and demand and the resulting operating rates, the level of general economic activity and the price of raw materials.
The market for our products may or may not accept price increases, and as such, our future financial condition, results of operations or cash flows could be materially impacted. 37 Table of Contents Non-GAAP Financial Measures The body of accounting principles generally accepted in the United States is commonly referred to as "GAAP." For this purpose, a non-GAAP financial measure is generally defined by the Securities and Exchange Commission ("SEC") as one that purports to measure historical or future financial performance, financial position or cash flows that (1) excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with GAAP in the statement of income, balance sheet or statement of cash flows (or equivalent statements) of the registrant; or (2) includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented.
The market for our products may or may not accept price increases, and as such, our future financial condition, results of operations or cash flows could be materially impacted. 41 Table of Contents Non-GAAP Financial Measures The body of accounting principles generally accepted in the United States is commonly referred to as "GAAP." For this purpose, a non-GAAP financial measure is generally defined by the Securities and Exchange Commission ("SEC") as one that purports to measure historical or future financial performance, financial position or cash flows that (1) excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with GAAP in the statement of income, balance sheet or statement of cash flows (or equivalent statements) of the registrant; or (2) includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented.
Our raw materials for stone, roofing and accessories, windows, shutters and specialty tool products are externally purchased. PVC required for the PVC compounds plants is either internally sourced from our North American and Asian facilities within the Performance and Essential Materials segment or externally purchased based on the location of the plants.
Our raw materials for stone, roofing and accessories, windows, shutters and specialty tool products are externally purchased. PVC required for the PVC compounds plants is either internally sourced from our North American, European and Asian facilities within the Performance and Essential Materials segment or externally purchased based on the location of the plants.
The holders of the 0.875% 2024 Senior Notes, the 3.60% 2026 Senior Notes, the 1.625% 2029 Senior Notes, the 3.375% 2030 Senior Notes, the 3.50% 2032 tax-exempt GO Zone Refunding Senior Notes, the 2.875% 2041 Senior Notes, the 5.00% 2046 Senior Notes, the 4.375% 2047 Senior Notes, the 3.125% 2051 Senior Notes and the 3.375% 2061 Senior Notes may require us to repurchase the notes at a price equal to 101% of their principal amount, plus accrued and unpaid interest to, but not including, the date of repurchase, upon the occurrence of both a "change of control" and, within 60 days of such change of control, a "below investment grade rating event" (as such terms are defined in the respective indentures governing these notes).
The holders of the 3.60% 2026 Senior Notes, the 1.625% 2029 Senior Notes, the 3.375% 2030 Senior Notes, the 3.50% 2032 tax-exempt GO Zone Refunding Senior Notes, the 2.875% 2041 Senior Notes, the 5.00% 2046 Senior Notes, the 4.375% 2047 Senior Notes, the 3.125% 2051 Senior Notes and the 3.375% 2061 Senior Notes may require us to repurchase the notes at a price equal to 101% of their principal amount, plus accrued and unpaid interest to, but not including, the date of repurchase, upon the occurrence of both a "change of control" and, within 60 days of such change of control, a "below investment grade rating event" (as such terms are defined in the respective indentures governing these notes).
(4) At our option, we may redeem the notes at any time prior to the specified par call date at a redemption price equal to the greater of (i) 100% of the principal amount of the notes being redeemed plus accrued and unpaid interest and (ii) the sum of the present values of the remaining scheduled payments on the notes being redeemed (excluding accrued and unpaid interest to the redemption date), discounted to the redemption date on a semi-annual basis at the treasury rate plus 35 to 45 basis points, plus accrued and unpaid interest. 48 Table of Contents (5) In the event of a redemption of certain bonds (the "GO Zone Bonds") issued by the Louisiana Local Government Environmental Facility and Development Authority (the "Authority") in 2017, we will redeem notes equal in principal amount to the GO Zone Bonds to be redeemed at a redemption price equal to the redemption price of the GO Zone Bonds to be redeemed, plus accrued interest to the redemption date.
(4) At our option, we may redeem the notes at any time prior to the specified par call date at a redemption price equal to the greater of (i) 100% of the principal amount of the notes being redeemed plus accrued and unpaid interest and (ii) the sum of the present values of the remaining scheduled payments on the notes being redeemed (excluding accrued and unpaid interest to the redemption date), discounted to the redemption date on a semi-annual basis at the treasury rate plus 35 to 45 basis points, plus accrued and unpaid interest. 51 Table of Contents (5) In the event of a redemption of certain bonds (the "GO Zone Bonds") issued by the Louisiana Local Government Environmental Facility and Development Authority (the "Authority") in 2017, we will redeem notes equal in principal amount to the GO Zone Bonds to be redeemed at a redemption price equal to the redemption price of the GO Zone Bonds to be redeemed, plus accrued interest to the redemption date.
Borrowings under the OpCo Revolver now bear interest at a variable rate of either (a) SOFR plus the Applicable Margin plus a 0.10% credit spread adjustment or, if SOFR is no longer available, (b) the Alternate Base Rate plus the Applicable Margin minus 1.0%.
Borrowings under the OpCo Revolver now bear interest at a variable rate of either (a) SOFR plus the Applicable Margin plus a 0.10% credit spread adjustment or, if SOFR is no longer available, (b) the Alternate Base Rate plus the Applicable Margin minus 1.0%. The Applicable Margin under the OpCo Revolver is 1.75%.
See Note 11, "Long-Term Debt," in the Notes to Consolidated Financial Statements in Item 8 of this Form 10-K for further information on our debt obligations and the expected timing of future principal and interest payments. Operating leases.
See Note 10, "Long-Term Debt," in the Notes to Consolidated Financial Statements in Item 8 of this Form 10-K for further information on our debt obligations and the expected timing of future principal and interest payments. Operating Leases.
See Note 11 to the consolidated financial statements appearing elsewhere in this Form 10-K for a discussion of our long-term indebtedness. Defined terms used in this section have the definitions assigned to such terms in Note 11 to the consolidated financial statements included in Item 8 of this Form 10-K.
See Note 10 to the consolidated financial statements appearing elsewhere in this Form 10-K for a discussion of our long-term indebtedness. Defined terms used in this section have the definitions assigned to such terms in Note 10 to the consolidated financial statements included in Item 8 of this Form 10-K.
The indenture governing the 0.875% 2024 Senior Notes, the 3.60% 2026 Senior Notes, the 1.625% 2029 Senior Notes, the 3.375% 2030 Senior Notes, the 3.50% 2032 tax-exempt GO Zone Refunding Senior Notes, the 2.875% 2041 Senior Notes, the 5.00% 2046 Senior Notes, the 4.375% 2047 Senior Notes, the 3.125% 2051 Senior Notes, and the 3.375% 2061 Senior Notes contains customary events of default and covenants that, among other things and subject to certain exceptions, restrict us and certain of our subsidiaries' ability to (1) incur certain secured indebtedness, (2) engage in certain sale and leaseback transactions and (3) consolidate, merge or transfer all or substantially all of our assets.
The indenture governing the 3.60% 2026 Senior Notes, the 1.625% 2029 Senior Notes, the 3.375% 2030 Senior Notes, the 3.50% 2032 tax-exempt GO Zone Refunding Senior Notes, the 2.875% 2041 Senior Notes, the 5.00% 2046 Senior Notes, the 4.375% 2047 Senior Notes, the 3.125% 2051 Senior Notes, and the 3.375% 2061 Senior Notes contains customary events of default and covenants that, among other things and subject to certain exceptions, restrict us and certain of our subsidiaries' ability to (1) incur certain secured indebtedness, (2) engage in certain sale and leaseback transactions and (3) consolidate, merge or transfer all or substantially all of our assets.
Net External Sales The table below presents net external sales on a disaggregated basis for our two principal operating segments. Performance Materials net external sales primarily consist of sales of PVC, polyethylene and epoxy. Essential Materials net external sales primarily consist of sales of caustic soda, styrene, and related derivative materials.
Net External Sales The table below presents net external sales on a disaggregated basis for our two principal operating segments. Performance Materials net external sales primarily consist of sales of PVC, polyethylene and epoxy. Essential Materials net external sales primarily consist of sales of caustic soda, chlorine, styrene, and related derivative materials.
We may also increase the size of the facility, in increments of at least $25 million, up to a maximum of $500 million, subject to certain conditions and if certain lenders agree to commit to such an increase. 49 Table of Contents Westlake Chemical Partners LP Credit Arrangements Our subsidiary, Westlake Chemical Finance Corporation, is the lender party to a $600 million revolving credit facility with Westlake Chemical Partners LP ("Westlake Partners") (the "MLP Revolver") that is scheduled to mature on July 12, 2027.
We may also increase the size of the facility, in increments of at least $25 million, up to a maximum of $500 million, subject to certain conditions and if certain lenders agree to commit to such an increase. 52 Table of Contents Westlake Chemical Partners LP Credit Arrangements Our subsidiary, Westlake Chemical Finance Corporation, is the lender party to a $600 million revolving credit facility with Westlake Chemical Partners LP ("Westlake Partners") (the "MLP Revolver") that is scheduled to mature on July 12, 2027.
In addition, we record all pension plan assets and certain marketable securities at fair value. The fair value of these items is determined by quoted market prices or from observable market-based inputs. See Note 16 to the consolidated financial statements appearing elsewhere in this Form 10-K for more information. Long-Lived Assets.
In addition, we record all pension plan assets and certain marketable securities at fair value. The fair value of these items is determined by quoted market prices or from observable market-based inputs. See Note 15 to the consolidated financial statements appearing elsewhere in this Form 10-K for more information. Long-Lived Assets.
While we believe that the amounts recorded in the accompanying consolidated financial statements related to these contingencies are based on the best estimates and judgments available, the actual outcomes could differ from our estimates. Additional information about certain legal proceedings and environmental matters appears in Note 22 to the consolidated financial statements appearing elsewhere in this Form 10-K.
While we believe that the amounts recorded in the accompanying consolidated financial statements related to these contingencies are based on the best estimates and judgments available, the actual outcomes could differ from our estimates. Additional information about certain legal proceedings and environmental matters appears in Note 21 to the consolidated financial statements appearing elsewhere in this Form 10-K.
Valuation allowances are recorded against deferred tax assets when it is considered more likely than not that the deferred tax assets will not be realized. Additional information on income taxes appears in Note 17 to the consolidated financial statements appearing elsewhere in this Form 10-K. Environmental and Legal Obligations.
Valuation allowances are recorded against deferred tax assets when it is considered more likely than not that the deferred tax assets will not be realized. Additional information on income taxes appears in Note 16 to the consolidated financial statements appearing elsewhere in this Form 10-K. Environmental and Legal Obligations.
As of December 31, 2023, outstanding borrowings under the credit facility totaled $23 million and bore interest at SOFR plus the Applicable Margin of 1.75% plus a 0.10% credit spread adjustment. On July 12, 2022, OpCo entered into the Second Amendment (the "OpCo Revolver Amendment") to the OpCo Revolver.
As of December 31, 2024, outstanding borrowings under the credit facility totaled $23 million and bore interest at SOFR plus the Applicable Margin of 1.75% plus a 0.10% credit spread adjustment. On July 12, 2022, OpCo entered into the Second Amendment (the "OpCo Revolver Amendment") to the OpCo Revolver.
As of December 31, 2023, outstanding borrowings under the credit facility totaled $377 million and bore interest at Secured Overnight Financing Rate, as administered by the Federal Reserve Bank of New York ("SOFR") plus the Applicable Margin plus a 0.10% credit spread adjustment.
As of December 31, 2024, outstanding borrowings under the credit facility totaled $377 million and bore interest at Secured Overnight Financing Rate, as administered by the Federal Reserve Bank of New York ("SOFR") plus the Applicable Margin plus a 0.10% credit spread adjustment.
Recent Accounting Pronouncements See Note 1 to the consolidated financial statements included in Item 8 of this Form 10-K for a full description of recent accounting pronouncements, including expected date of adoption and estimated effect on results of operations and financial condition. 54 Table of Contents
Recent Accounting Pronouncements See Note 1 to the consolidated financial statements included in Item 8 of this Form 10-K for a full description of recent accounting pronouncements, including expected date of adoption and estimated effect on results of operations and financial condition. 57 Table of Contents
Contractual and Other Obligations The Company's material cash requirements for contractual and other obligations in the near term (next 12 months) and the long term period (2024 and thereafter) include long-term debt, interest payments, operating leases, pension benefits funding, post-retirement healthcare benefits, purchase obligations, asset retirement obligations and letters of credit. Debt Obligations and Interest Payments.
Contractual and Other Obligations The Company's material cash requirements for contractual and other obligations in the near term (next 12 months) and the long term period (2026 and thereafter) include long-term debt, interest payments, operating leases, pension benefits funding, post-retirement healthcare benefits, purchase obligations, asset retirement obligations and letters of credit. Debt Obligations and Interest Payments.
Performance and Essential Materials Our performance and essential materials such as ethylene, PVC, polyethylene, epoxy and caustic soda are some of the most widely used materials in the world and are upgraded into a wide variety of higher value-added products used in many end-markets.
Our Operations and Outlook Performance and Essential Materials Our performance and essential materials such as ethylene, PVC, polyethylene, epoxy and caustic soda are some of the most widely used materials in the world and are upgraded into a wide variety of higher value-added products used in many end-markets.
While we do not expect any of these enactments or proposals to have a material adverse effect on us in the near term, we cannot predict the longer-term effect of any of these regulations or proposals on our future financial condition, results of operations or cash flows. 36 Table of Contents Housing and Infrastructure Products Our Housing and Infrastructure Products segment is primarily comprised of building products, PVC pipes and fittings and PVC compound products.
While we do not expect any of these enactments or proposals to have a material adverse effect on us in the near term, we cannot predict the longer-term effect of any of these regulations or proposals on our future financial condition, results of operations or cash flows. 40 Table of Contents Housing and Infrastructure Products Our Housing and Infrastructure Products segment is primarily comprised of residential building products, PVC pipes and fittings and PVC compound products.
Based on our current level of operations and unless we were to undertake a new expansion or large acquisition, we believe our cash flows from operations, available cash and available borrowings under our credit agreement will be adequate to meet our normal operating needs for the foreseeable future. 47 Table of Contents Our long-term debt consisted of the following as of December 31, 2023: 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) (4) Loan related to tax-exempt waste disposal revenue bonds due 2027 11 December 1997 December 2027 (6) 1.625% €700 million senior notes due 2029 (the "1.625% 2029 Senior Notes") 773 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 (5) 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) (4) 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") 13 March 2021 March 2026 (7) Total long-term debt $ 4,997 ______________________________ (1) At our option, we may redeem the notes at any time on or after the specified par call date at a redemption price equal to 100% of the principal amount of the notes being redeemed plus accrued and unpaid interest.
Based on our current level of operations and unless we were to undertake a new expansion or large acquisition, we believe our cash flows from operations, available cash and available borrowings under our credit agreement will be adequate to meet our normal operating needs for the foreseeable future. 50 Table of Contents Our long-term debt consisted of the following as of December 31, 2024: Principal Amount (in millions) Debt Issuance Date Maturity Date Par Call Date Optional Redemption Terms and Other Matters 3.60% senior notes due 2026 (the "3.60% 2026 Senior Notes") 750 August 2016 August 2026 May 15, 2026 (1) (4) Loan related to tax-exempt waste disposal revenue bonds due 2027 11 December 1997 December 2027 (6) 1.625% €700 million senior notes due 2029 (the "1.625% 2029 Senior Notes") 727 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 (5) 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) (4) 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") 7 March 2021 March 2026 (7) Total long-term debt $ 4,645 ______________________________ (1) At our option, we may redeem the notes at any time on or after the specified par call date at a redemption price equal to 100% of the principal amount of the notes being redeemed plus accrued and unpaid interest.
The Credit Agreement contains certain affirmative and negative covenants, including a quarterly total leverage ratio financial maintenance covenant. As of December 31, 2023, we were in compliance with the total leverage ratio financial maintenance covenant.
The Credit Agreement contains certain affirmative and negative covenants, including a quarterly total leverage ratio financial maintenance covenant. As of December 31, 2024, we were in compliance with the total leverage ratio financial maintenance covenant.
The results of operations of acquired businesses are included in our consolidated financial statements from the acquisition date. 51 Table of Contents Fair Value Estimates.
The results of operations of acquired businesses are included in our consolidated financial statements from the acquisition date. 54 Table of Contents Fair Value Estimates.
Other income, net of $136 million in 2023 was higher than other income, net of $73 million in 2022, substantially due to higher interest income attributable to a higher average cash and cash equivalents balance and higher interest rates in the current period and insurance recoveries in 2023. Income Taxes.
Other income, net of $136 million in 2023 was higher than other income, net of $73 million in 2022, substantially due to higher interest income attributable to a higher average cash and cash equivalents balance and higher interest rates in the current period and insurance recoveries in 2023. 47 Table of Contents Income Taxes.
At December 31, 2023, the projected pension benefit obligations for U.S. and non-U.S. plans were calculated using assumed weighted average discount rates of 5.0% and 3.2%, respectively. The discount rates were determined using a benchmark pension discount curve and applying spot rates from the curve to each year of expected benefit payments to determine the appropriate discount rate.
At December 31, 2024, the projected pension benefit obligations for U.S. and non-U.S. plans were calculated using assumed weighted average discount rates of 5.5% and 3.5%, respectively. The discount rates were determined using a benchmark pension discount curve and applying spot rates from the curve to each year of expected benefit payments to determine the appropriate discount rate.
Reconciliations of EBITDA to net income, income from operations and net cash provided by operating activities, and Free Cash Flow to net cash provided by operating activities, are included in the "Results of Operations" section below. 38 Table of Contents Results of Operations Segment Data The table below and descriptions that follow represent the consolidated results of operations of the Company for the years ended December 31, 2023, 2022 and 2021.
Reconciliations of EBITDA to net income, income from operations and net cash provided by operating activities, and Free Cash Flow to net cash provided by operating activities, are included in the "Results of Operations" section below. 42 Table of Contents Results of Operations Segment Data The table below and descriptions that follow represent the consolidated results of operations of the Company for the years ended December 31, 2024, 2023 and 2022 .
Factors that have caused volatility in our raw material prices, energy costs and production processes in the past, and which may do so in the future, include significant fluctuation in prices of these raw materials in response to, among other things, variable worldwide supply and demand across different industries, speculation in commodities futures, general economic, business or environmental conditions, labor costs, competition, import duties, tariffs, worldwide currency fluctuations, freight, inflationary pressures, regulatory costs, and product and process evolutions that impact demand for the same materials.
Factors that have caused volatility in our raw material prices, energy costs and production processes in the past, and which may do so in the future, include significant fluctuation in prices of these raw materials in response to, among other things, variable worldwide supply and demand across different industries, speculation in commodities futures, general economic, business or environmental conditions, labor costs, competition, import duties impacting our cross-border trades within North America, tariffs, worldwide currency fluctuations, freight, inflationary pressures, regulatory costs, and product and process evolutions that impact demand for the same materials.
Sales volumes for the Performance and Essential Materials segment decreased by 3% in 2023 as compared to 2022, primarily due to lower epoxy and caustic soda sales volumes. 42 Table of Contents Income from Operations . Income from operations for the Performance and Essential Materials segment decreased by $2,357 million to $59 million in 2023 from $2,416 million in 2022.
Sales volumes for the Performance and Essential Materials segment decreased by 3% in 2023 as compared to 2022, primarily due to lower epoxy and caustic soda sales volumes. Income from Operations . Income from operations for the Performance and Essential Materials segment decreased by $2,357 million to $59 million in 2023 from $2,416 million in 2022.
See Note 14, "Employee Benefits," in the Notes to Consolidated Financial Statements in Item 8 of this Form 10-K for further information on our obligations and the timing of expected future payments. 50 Table of Contents Purchase Obligations.
See Note 13, "Employee Benefits," in the Notes to Consolidated Financial Statements in Item 8 of this Form 10-K for further information on our obligations and the timing of expected future payments. 53 Table of Contents Purchase Obligations.
Letters of Credit. As of December 31, 2023, we had $39 million standby letters of credit, made in the ordinary course of business, maturing within the near term, and no standby letters of credit maturing over the long-term period. We had no letters of credit outstanding under our Credit Agreement.
Letters of Credit. As of December 31, 2024, we had $45 million standby letters of credit, made in the ordinary course of business, maturing within the near term, and no standby letters of credit maturing over the long-term period. We had no letters of credit outstanding under our Credit Agreement.
Census Bureau and the 2024 and 2025 outlook per the NAHB: Period Single and Multi-family Housing Starts (in thousands of units) % Change 2021 1,601 16% 2022 1,553 (3)% 2023 1,420 (9)% 2024 Outlook 1,366 2025 Outlook 1,417 North American PVC facilities within the Performance and Essential Materials segment supply most of the PVC required for our building products and PVC pipes and fittings plants.
Census Bureau and the 2025 and 2026 outlook per the NAHB: Period Single and Multi-family Housing Starts (in thousands of units) % Change 2022 1,553 (3)% 2023 1,420 (9)% 2024 1,366 (4)% 2025 Outlook 1,329 2026 Outlook 1,387 North American PVC facilities within the Performance and Essential Materials segment supply most of the PVC required for our building products and PVC pipes and fittings plants.
Housing Products net external sales primarily consist of sales of housing exterior and interior products, residential pipes and fittings and residential PVC compounds. Infrastructure Products net external sales primarily consist of sales of non-residential pipes and fittings and non-residential PVC compounds.
Housing Products net external sales primarily consist of sales of housing exterior and interior products, residential pipes and fittings and residential products utilizing PVC compounds. Infrastructure Products net external sales primarily consist of sales of infrastructure related pipes and fittings and infrastructure products utilizing PVC compounds.
As of December 31, 2023, there was $142 million in operating lease obligations due within the near term, and $768 million due over the long-term period. See Note 7, "Leases," in the Notes to Consolidated Financial Statements in Item 8 of this Form 10-K for further detail of our obligations and the timing of expected future payments.
As of December 31, 2024, there was $158 million in operating lease obligations due within the near term, and $881 million due over the long-term period. See Note 6, "Leases," in the Notes to Consolidated Financial Statements in Item 8 of this Form 10-K for further detail of our obligations and the timing of expected future payments.
Westlake is one of the leading producers of epoxy specialty resins, modifiers and curing agents in Europe, the United States and Asia, with a global reach to our end markets.
We are also one of the leading producers of epoxy specialty resins, modifiers and curing agents in Europe, the United States and Asia with a global reach to our end markets.
The Applicable Margin under the OpCo Revolver is 1.75% We consolidate Westlake Partners and OpCo for financial reporting purposes as we have a controlling financial interest. As such, the revolving credit facilities described above between our subsidiaries and Westlake Partners and OpCo are eliminated from the financial statements upon consolidation.
We consolidate Westlake Partners and OpCo for financial reporting purposes as we have a controlling financial interest. As such, the revolving credit facilities described above between our subsidiaries and Westlake Partners and OpCo are eliminated from the financial statements upon consolidation.
Pension Benefits Funding and Post-retirement Healthcare Benefits. Pension benefits funding obligations due within the near term were $8 million while post-retirement healthcare benefit payment obligations due within the near term were $8 million as of December 31, 2023.
Pension Benefits Funding and Post-retirement Healthcare Benefits. Pension benefits funding obligations due within the near term were $10 million while post-retirement healthcare benefit payment obligations due within the near term were $7 million as of December 31, 2024.
Our North American businesses, where we derive a significant portion of our revenue, have also experienced the impacts of high energy costs and interest rates and slower demand for most of our products since the second half of 2022.
Since 2022, our European businesses have been impacted by higher energy prices, inflation and reduced demand. Our North American businesses, where we derive a significant portion of our revenue, have also experienced the impacts of high energy costs and interest rates and slower demand for most of our products since the second half of 2022.
For all reporting units other than Westlake Epoxy, even if the fair values of the reporting units decreased by 10% from the fair values determined for the quantitative tests, the carrying amounts of the reporting units would not have exceeded their fair values.
For all reporting units with goodwill, even if the fair values of the reporting units decreased by 10% from the fair values determined for the quantitative tests, the carrying amounts of the reporting units would not have exceeded their fair values.
Decisions regarding the amount and the timing of purchases under the 2014 Program will be influenced by our cash on hand, our cash flows from operations, general market conditions and other factors. The 2014 Program may be discontinued by our Board of Directors at any time.
Decisions regarding the amount and the timing of purchases under the 2014 Program will be influenced by our cash on hand, our cash flows from operations, general market conditions and other factors.
On October 4, 2018, Westlake Chemical Partners LP ("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 million.
The 2014 Program may be discontinued by our Board of Directors at any time. 49 Table of Contents On October 4, 2018, Westlake Chemical Partners LP ("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 million.
The forecast is based on historical results, estimates by management of future market conditions, current and future strategic and operational plans and future financial performance. Significant assumptions used in the discounted cash flow projection included projected sales volumes based on production capacities, future sales prices, feedstock, energy and power costs and capital expenditures to maintain safe and reliable plant operations.
The forecast is based on historical results, estimates by management of future market conditions, current and future strategic and operational plans and future financial performance. Significant assumptions used in the discounted cash flow projection include projected sales volumes based on production capacities, future sales prices, EBITDA margin, inclusive of feedstock, energy and power costs and capital expenditures.
As of December 31, 2023, we had $135 million and $64 million of pension benefit funding and post-retirement healthcare benefit obligations due over the long-term period, respectively.
As of December 31, 2024, we had $125 million and $49 million of pension benefit funding and post-retirement healthcare benefit obligations due over the long-term period, respectively.
Our sales are affected by the individual decisions of distributors and dealers on the levels of inventory they carry, their views on product demand, their financial condition and the manner in which they choose to manage inventory risk.
Our sales are affected by new home constructions and home repair and remodeling as well as the decisions of distributors and dealers on the levels of inventory they carry, their views on product demand, their financial condition and the manner in which they choose to manage inventory risk.
Cash and Cash Equivalents As of December 31, 2023, our cash and cash equivalents totaled $3,304 million. In addition to our cash and cash equivalents, our credit agreement is available to provide liquidity as needed, as described under "Debt" below. Debt As of December 31, 2023, the carrying value of our indebtedness totaled $4,906 million.
Cash and Cash Equivalents As of December 31, 2024, our cash and cash equivalents totaled $2,919 million. In addition to our cash and cash equivalents, our credit agreement is available to provide liquidity as needed, as described under "Debt" below. Debt As of December 31, 2024, the carrying value of our indebtedness totaled $4,562 million.
Epoxy resins are the fundamental component of many types of materials and are often used in the automotive, construction, wind energy, aerospace and electronics industries due to their superior adhesion, strength and durability. We are also a leading supplier of Liquid and Solid Epoxy Resin.
Epoxy resins are the fundamental component of many types of materials and are often used in the automotive, construction, wind energy, aerospace and electronics industries due to their superior adhesion, strength and durability.
Year Ended December 31, 2023 2022 2021 (In millions of dollars) Net cash provided by operating activities $ 2,336 $ 3,395 $ 2,394 Changes in operating assets and liabilities and other (1,989) (1,119) (301) Deferred income taxes 175 21 (23) Net income 522 2,297 2,070 Less: Other income, net 136 73 53 Interest expense (165) (177) (176) Provision for income taxes (178) (649) (607) Income from operations 729 3,050 2,800 Add: Depreciation and amortization 1,097 1,056 840 Other income, net 136 73 53 EBITDA $ 1,962 $ 4,179 $ 3,693 Reconciliation of Free Cash Flow to Net Cash Provided by Operating Activities The following table presents the reconciliation of Free Cash Flow to net cash provided by operating activities, the most directly comparable GAAP financial measure, for each of the periods indicated.
Year Ended December 31, 2024 2023 2022 (In millions of dollars) Net cash provided by operating activities $ 1,314 $ 2,336 $ 3,395 Changes in operating assets and liabilities and other (702) (1,989) (1,119) Deferred income taxes 35 175 21 Net income 647 522 2,297 Less: Other income, net 222 136 73 Interest expense (159) (165) (177) Provision for income taxes (291) (178) (649) Income from operations 875 729 3,050 Add: Depreciation and amortization 1,114 1,097 1,056 Other income, net 222 136 73 EBITDA $ 2,211 $ 1,962 $ 4,179 Reconciliation of Free Cash Flow to Net Cash Provided by Operating Activities The following table presents the reconciliation of Free Cash Flow to net cash provided by operating activities, the most directly comparable GAAP financial measure, for each of the periods indicated.
See "Reconciliation of Free Cash Flow to Net Cash Provided by Operating Activities" below. 39 Table of Contents Year Ended December 31, 2023 2022 Average Sales Price Volume Average Sales Price Volume Product sales price and volume percentage change from prior year Performance and Essential Materials -21 % -3 % +15 % +13 % Housing and Infrastructure Products -3 % -9 % +35 % +19 % Company average -16 % -5 % +20 % +14 % Year Ended December 31, 2023 2022 Domestic US prices percentage change from prior-year period for fuel cost and feedstock Fuel cost (Natural Gas) -59 % +67 % Feedstock (Ethane) -49 % +56 % 40 Table of Contents Reconciliation of EBITDA to Net Income, Income from Operations and Net Cash Provided by Operating Activities The following table presents the reconciliation of EBITDA to net income, income from operations and net cash provided by operating activities, the most directly comparable GAAP financial measures, for each of the periods indicated.
See "Reconciliation of Free Cash Flow to Net Cash Provided by Operating Activities" below. 43 Table of Contents Year Ended December 31, 2024 2023 Average Sales Price Volume Average Sales Price Volume Net sales percentage change from prior-year due to average sales price and volume Performance and Essential Materials -12 % +5 % -21 % -3 % Housing and Infrastructure Products -6 % +8 % -3 % -9 % Company average -10 % +6 % -16 % -5 % Year Ended December 31, 2024 2023 Domestic US prices percentage change from prior-year period for fuel cost and feedstock Fuel cost (Natural Gas) -17 % -59 % Feedstock (Ethane) -23 % -49 % Reconciliation of EBITDA to Net Income, Income from Operations and Net Cash Provided by Operating Activities The following table presents the reconciliation of EBITDA to net income, income from operations and net cash provided by operating activities, the most directly comparable GAAP financial measures, for each of the periods indicated.
While we have agreements providing for the supply of ethane feedstock, natural gas, ethylene, salt and electricity, the contractual prices for these raw materials and energy vary with market conditions and may be highly volatile.
We also purchase significant amounts of electricity to supply the energy required in our production processes. While we have agreements providing for the supply of ethane feedstock, natural gas, ethylene, salt and electricity, the contractual prices for these raw materials and energy vary with market conditions and may be highly volatile.
Cash Flows Operating Activities Operating activities provided cash of $2,336 million in 2023 as compared to cash provided by operating activities of $3,395 million in 2022. The $1,059 million decrease in cash flow from operating activities was mainly due to lower prices and demand for most of our products, partially offset by favorable changes in working capital.
The $1,059 million decrease in cash flows from operating activities was mainly due to lower prices and demand for most of our products, partially offset by favorable changes in working capital.
Year Ended December 31, 2023 2022 2021 (In millions of dollars) Net cash provided by operating activities $ 2,336 $ 3,395 $ 2,394 Less: Additions to property, plant and equipment 1,034 1,108 658 Free Cash Flow $ 1,302 $ 2,287 $ 1,736 2023 Compared with 2022 Summary For the year ended December 31, 2023, net income attributable to Westlake Corporation was $479 million, or $3.70 per diluted share, on net sales of $12,548 million.
Year Ended December 31, 2024 2023 2022 (In millions of dollars) Net cash provided by operating activities $ 1,314 $ 2,336 $ 3,395 Less: Additions to property, plant and equipment 1,008 1,034 1,108 Free Cash Flow $ 306 $ 1,302 $ 2,287 44 Table of Contents 2024 Compared with 2023 Summary For the year ended December 31, 2024, net income attributable to Westlake Corporation was $602 million, or $4.64 per diluted share, on net sales of $12,142 million.
Although we ultimately expect that the Infrastructure Investment and Jobs Act of 2021 and historically low residential housing construction may have a favorable long-term impact on certain industries related to our Housing and Infrastructure Products segment, the current inflationary environment impacting consumer spending and priorities, the possibility of recession or financial market instability, rapidly rising interest rates, decade high mortgage interest rates impacting consumer affordability, and ongoing labor and supply chain constraints are expected to have an unfavorable impact on the demand for housing construction in the near term and, as a result, our products produced by this segment.
Although we ultimately expect that the Infrastructure Investment and Jobs Act of 2021 and historically low residential housing construction that has resulted in an undersupply of existing housing may have a favorable long-term impact on our Housing and Infrastructure Products segment, the current inflationary environment impacting consumer spending and priorities and decade-high mortgage interest rates impacting consumer affordability are expected to have an unfavorable impact on the demand for housing construction in the near term and, as a result, our products produced by this segment.
The qualitative assessment considers factors such as macroeconomic conditions, industry and market considerations, cost factors related to raw materials and labor, current and projected financial performance, changes in management or strategy, and market capitalization. Alternatively, we may unconditionally elect to bypass the qualitative assessment and perform a quantitative goodwill impairment assessment in any period.
We may elect to perform an optional qualitative assessment to determine whether a quantitative impairment analysis is required. The qualitative assessment considers factors such as macroeconomic conditions, industry and market considerations, cost factors related to raw materials and labor, current and projected financial performance, changes in management or strategy, and market capitalization.
The interest rate on the waste disposal revenue bonds at December 31, 2023 was 4.30%. (7) The 2026 Term Loan has a 5-year maturity and includes a government rate subsidy. The interest rate on the 2026 Term Loan as of December 31, 2023 was 0.95%.
The interest rate on the waste disposal revenue bonds at December 31, 2024 was 3.35%. (7) The 2026 Term Loan has a 5-year maturity and includes a government rate subsidy. The interest rate on the 2026 Term Loan as of December 31, 2024 was 1.08%.
Based on the recoverability tests, we determined that the carrying amount of the primary assets of Westlake Epoxy's Netherlands asset group is not recoverable, and as such, an impairment loss was recorded to reduce the carrying amount of the asset group to its fair value. See Note 6 in the notes to the consolidated financial statements for further details.
Based on the recoverability tests, we determined that the carrying amount of the primary assets of Westlake Epoxy's Netherlands asset group is not recoverable, and as such, an impairment loss was recorded in fourth quarter of 2023 to reduce the carrying amount of the asset group to its fair value.
As of December 31, 2023, we had $2,152 million of enforceable and legally binding purchase commitments due within the near term, and $5,976 million due over the long-term period. Asset Retirement Obligations. As of December 31, 2023, we had $3 million asset retirement obligations due within the near term, and $55 million due over the long-term period.
As of December 31, 2024, we had $2,592 million of enforceable and legally binding purchase commitments due within the near term, and $5,509 million due over the long-term period. Asset Retirement Obligations. As of December 31, 2024, we had $38 million asset retirement obligations due within the near term, and $34 million due over the long-term period.
Plans (In millions of dollars) Projected benefit obligation, end of year $ 494 $ 629 Discount rate increases by 100 basis points (41) (82) Discount rate decreases by 100 basis points 48 104 A one-percentage point increase or decrease in assumed healthcare trend rates would not have a significant effect on the amounts reported for the healthcare plans.
Plans (In millions of dollars) Projected benefit obligation, end of year $ 464 $ 554 Discount rate increases by 100 basis points (36) (72) Discount rate decreases by 100 basis points 42 90 56 Table of Contents A one-percentage point increase or decrease in assumed healthcare trend rates would not have a significant effect on the amounts reported for the healthcare plans.
Year Ended December 31, 2023 2022 2021 (In millions of dollars, except per share data) Net external sales Performance and Essential Materials Performance Materials $ 4,656 $ 6,964 $ 5,997 Essential Materials 3,680 4,044 2,673 Total Performance and Essential Materials 8,336 11,008 8,670 Housing and Infrastructure Products Housing Products 3,494 3,864 2,334 Infrastructure Products 718 922 774 Total Housing and Infrastructure Products 4,212 4,786 3,108 Total net external sales $ 12,548 $ 15,794 $ 11,778 Income (loss) from operations Performance and Essential Materials $ 59 $ 2,416 $ 2,549 Housing and Infrastructure Products 710 675 356 Corporate and other (40) (41) (105) Total income from operations 729 3,050 2,800 Interest expense (165) (177) (176) Other income, net 136 73 53 Provision for income taxes 178 649 607 Net income 522 2,297 2,070 Net income attributable to noncontrolling interests 43 50 55 Net income attributable to Westlake Corporation $ 479 $ 2,247 $ 2,015 Diluted earnings per share $ 3.70 $ 17.34 $ 15.58 EBITDA (1) $ 1,962 $ 4,179 $ 3,693 Free Cash Flow (2) $ 1,302 $ 2,287 $ 1,736 ______________________________ (1) See above for discussions on non-GAAP financial measures.
Year Ended December 31, 2024 2023 2022 (In millions of dollars, except per share data) Net external sales Performance and Essential Materials Performance Materials $ 4,626 $ 4,656 $ 6,964 Essential Materials 3,199 3,680 4,044 Total Performance and Essential Materials 7,825 8,336 11,008 Housing and Infrastructure Products Housing Products 3,644 3,494 3,864 Infrastructure Products 673 718 922 Total Housing and Infrastructure Products 4,317 4,212 4,786 Total net external sales $ 12,142 $ 12,548 $ 15,794 Income (loss) from operations Performance and Essential Materials $ 129 $ 59 $ 2,416 Housing and Infrastructure Products 807 710 675 Corporate and other (61) (40) (41) Total income from operations 875 729 3,050 Interest expense (159) (165) (177) Other income, net 222 136 73 Provision for income taxes 291 178 649 Net income 647 522 2,297 Net income attributable to noncontrolling interests 45 43 50 Net income attributable to Westlake Corporation $ 602 $ 479 $ 2,247 Diluted earnings per share $ 4.64 $ 3.70 $ 17.34 EBITDA (1) $ 2,211 $ 1,962 $ 4,179 Free Cash Flow (2) $ 306 $ 1,302 $ 2,287 ______________________________ (1) See above for discussions on non-GAAP financial measures.
Changes in components of working capital, which we define for purposes of this cash flow discussion as accounts receivable, inventories, prepaid expenses and other current assets, less accounts payable and accrued and other liabilities, provided cash of $174 million in 2022, as compared to $383 million of cash used in 2021, a favorable change of $557 million.
Changes in components of working capital, which we define for purposes of this cash flow discussion as accounts receivable, inventories, prepaid expenses and other current assets, less accounts payable and accrued and other liabilities, used cash of $278 million in 2024, as compared to $600 million of cash provided in 2023, an unfavorable change of $878 million.
As of December 31, 2023, we had $300 million debt obligations due within the near term, and debt obligations of $4,697 million due over the long-term period. At December 31, 2023, long-term debt related interest expense of $158 million was due within the near term, and related interest expense of $2,692 million was due over the long-term period.
As of December 31, 2024, we had $6 million debt obligations due within the near term, and debt obligations of $4,639 million due over the long-term period. At December 31, 2024, long-term debt related interest expense of $156 million was due within the near term, and related interest expense of $2,543 million was due over the long-term period.
As of December 31, 2023, we were in compliance with all of our long-term debt covenants. Credit Agreement On June 9, 2022, we entered into a new $1.5 billion revolving credit facility that is scheduled to mature on June 9, 2027 (the "Credit Agreement") and, in connection therewith, terminated our then existing revolving credit agreement.
Credit Agreement On June 9, 2022, we entered into a new $1.5 billion revolving credit facility that is scheduled to mature on June 9, 2027 (the "Credit Agreement") and, in connection therewith, terminated our then existing revolving credit agreement.
The ongoing conflict between Russia and Ukraine since Russia's invasion of Ukraine in 2022, conflict in the Middle East, slow economic growth in China, increase in bisphenol-A, epichlorohydrin and base epoxy resin exports out of Asia into European and North American markets, timing of certain new ethylene and polyethylene capacity additions in North America, Asia, and the Middle East, volatility in natural gas and electricity prices, volatility in crude oil prices and inflationary pressures could have a continuing negative impact on the performance of Performance and Essential Materials businesses.
The ongoing conflict between Russia and Ukraine since Russia's invasion of Ukraine in 2022, the conflict in the Middle East, slow economic growth in China, increase in bisphenol-A, epichlorohydrin and base epoxy resin exports out of Asia into European and North American markets, disruption of trade flows due to enactment of duties and tariffs, timing of certain new ethylene and polyethylene capacity additions in North America, Asia, and the Middle East, volatility in natural gas and electricity prices and volatility in crude oil prices could have a continuing negative impact on the performance of Performance and Essential Materials businesses. 39 Table of Contents We purchase significant amounts of ethane feedstock, natural gas, ethylene and salt from external suppliers for use in production of performance and essential materials.
The cycle is generally characterized by periods of tight supply, leading to high operating rates and margins, followed by a decline in operating rates and margins primarily as a result of excess new capacity additions.
The cycle is generally characterized by periods of tight supply, leading to high operating rates and margins, followed by a decline in operating rates and margins primarily as a result of excess new capacity additions. Westlake is a leading supplier of liquid and solid epoxy resins that are used in a wide variety of industrial coating applications.
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.
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 have been issued under this program in 2024, 2023 or 2022.
Maturities of our debt consist of $300 million in 2024, $763 million in 2026 and $11 million in 2027. There are no other scheduled maturities of debt in 2024 through 2028.
Maturities of our debt consist of $6 million in 2025, $751 million in 2026, $11 million in 2027 and $727 million in 2029. There are no other scheduled maturities of debt in 2025 through 2029.
Net sales decreased by $3,246 million to $12,548 million in 2023 from $15,794 million in 2022, primarily due to lower sales prices and volumes for most of our products across both segments. 41 Table of Contents Net Sales.
The decreases in net income and income from operations in 2023 were partially offset by lower natural gas and feedstock costs and lower amortization of intangibles. Net sales decreased by $3,246 million to $12,548 million in 2023 from $15,794 million in 2022, primarily due to lower sales prices and volumes for most of our products across both segments. Net Sales.
These base epoxies are used in a wide variety of industrial coatings applications. 35 Table of Contents Global demand for most of our products started to recover from the effects of the COVID-19 pandemic in the second half of 2020 and remained strong through the first half of 2022.
Global demand for most of our products started to recover from the effects of the COVID-19 pandemic in the second half of 2020 and remained strong through the first half of 2022.
During the year ended December 31, 2023, 211,294 shares of our common stock were repurchased for an aggregate purchase price of $23 million under the 2014 Program. Purchases under the 2014 Program may be made either through the open market or in privately negotiated transactions.
As of December 31, 2024, we had repurchased 9,202,631 shares of our common stock for an aggregate purchase price of approximately $634 million under the 2014 Program. Purchases under the 2014 Program may be made either through the open market or in privately negotiated transactions.
In August 2022, our Board of Directors approved the further expansion of the existing 2014 Program by an additional $500 million. As of December 31, 2023, we had repurchased 8,722,550 shares of our common stock for an aggregate purchase price of approximately $574 million under the 2014 Program.
In August 2022, our Board of Directors approved the further expansion of the existing 2014 Program by an additional $500 million. During the year ended December 31, 2024, 480,081 shares of our common stock were repurchased for an aggregate purchase price of $60 million under the 2014 Program.
Total costs deferred on turnarounds were $179 million, $178 million and $215 million in 2023, 2022 and 2021, respectively. As of December 31, 2023, deferred turnaround costs, net of accumulated amortization, totaled $391 million. Amortization in 2023, 2022 and 2021 of deferred turnaround costs was $137 million, $80 million and $56 million, respectively.
As of December 31, 2024, deferred turnaround costs, net of accumulated amortization, totaled $352 million. Amortization in 2024, 2023 and 2022 of deferred turnaround costs was $153 million, $137 million and $80 million, respectively.
The increase in income from operations was primarily due to lower raw material costs and higher sales prices for some of our building products, partially offset by lower sales prices for PVC compounds and pipe and fittings and volumes across most of our housing and infrastructure businesses. 2022 Compared with 2021 Summary For the year ended December 31, 2022, net income attributable to Westlake Corporation was $2,247 million, or $17.34 per diluted share, on net sales of $15,794 million.
The increase in income from operations was primarily due to lower raw material costs and higher sales prices for some of our building products, partially offset by lower sales prices for PVC compounds and pipe and fittings and volumes across most of our housing and infrastructure businesses.
The financing activities during 2022 were primarily related to the redemption of $250 million aggregate principal amount of the 3.60% 2022 Senior Notes, $169 million payment of cash dividends, the $60 million payment of cash distributions to noncontrolling interests and repurchases of shares of our common stock for an aggregate purchase price of $101 million.
Other financing activities during 2024 were primarily related to the $264 million payment of cash dividends, the $49 million payment of cash distributions to noncontrolling interests, repurchases of shares of our common stock for an aggregate purchase price of $60 million and inflows of $13 million from the exercise of stock options.
Income from operations was $3,050 million for the year ended December 31, 2022, as compared to $2,800 million for the year ended December 31, 2021, an increase of $250 million.
Income from operations was $875 million for the year ended December 31, 2024, as compared to $729 million for the year ended December 31, 2023, an increase of $146 million.
The favorable changes in 2023 were substantially due to lower inventory costs driven by lower feedstock and fuel costs, as compared to 2022. Operating activities provided cash of $3,395 million in 2022 as compared to cash provided by operating activities of $2,394 million in 2021.
The favorable changes in 2023 were substantially due to lower inventory costs driven by lower feedstock and fuel costs, as compared to 2022. Investing Activities Net cash used for investing activities during 2024 was $1,001 million as compared to net cash used of $1,037 million in 2023.
The estimated useful lives of long-lived assets range from one to 40 years. Depreciation and amortization of these assets, including amortization of deferred turnaround costs, under the straight-line method over their estimated useful lives totaled $1,097 million, $1,056 million and $840 million in 2023, 2022 and 2021, respectively.
Depreciation and amortization of these assets, including amortization of deferred turnaround costs, under the straight-line method over their estimated useful lives totaled $1,114 million, $1,097 million and $1,056 million in 2024, 2023 and 2022, respectively. If the useful lives of the assets were found to be shorter than originally estimated, depreciation or amortization charges would be accelerated.
However, since the second half of 2022 and continuing through the end of 2023, we saw significant volatility in natural gas and electricity prices, particularly in Europe, as well as in ethane and ethylene prices. We have also experienced lower prices and reduced demand for most of our products globally.
However, since the second half of 2022 and during the early part of 2023, we saw significant volatility in natural gas and electricity costs, particularly in Europe, as well as in ethane and ethylene prices.
At December 31, 2023, our recorded goodwill was $2,041 million. Goodwill is evaluated for impairment when events or changes in circumstances indicate the fair value of a reporting unit with goodwill has been reduced below its carrying value, and otherwise at least annually.
Goodwill is evaluated for impairment when events or changes in circumstances indicate the fair value of a reporting unit with goodwill has been reduced below its carrying amount, and otherwise at least annually. We perform our annual impairment assessment for both the Performance and Essential Materials and Housing and Infrastructure Products reporting units in the fourth quarter each year.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeWe try to protect against such instability through various business strategies. Our strategies include ethylene product feedstock flexibility and moving downstream into our other products where pricing is more stable. We use derivative instruments (including commodity swaps and options) in certain instances to reduce price volatility risk on feedstocks and products.
Biggest changeWe try to protect against such instability through various business strategies. Our strategies include ethylene product feedstock flexibility and moving downstream into our other products where pricing is more stable. We use derivative instruments (including commodity swaps, futures, forwards and options) in certain instances to reduce price volatility risk on feedstocks and products.
A hypothetical 100 basis point increase in the average interest rate on our variable rate debt would not result in a material change in the interest expense. Secured Overnight Financing Rate ("SOFR") is used as a reference rate for borrowings under our revolving line of credit. We did not have any SOFR-based borrowings outstanding at December 31, 2023.
A hypothetical 100 basis point increase in the average interest rate on our variable rate debt would not result in a material change in the interest expense. Secured Overnight Financing Rate ("SOFR") is used as a reference rate for borrowings under our revolving line of credit. We did not have any SOFR-based borrowings outstanding at December 31, 2024.
In July 2019, we completed the registered public offering of €700 million aggregate principal amount of the 1.625% 2029 Senior Notes. We designated this euro-denominated debt as a non-derivative net investment hedge of a portion of our net investments in euro functional-currency denominated subsidiaries to offset foreign currency fluctuations. 55 Table of Contents
In July 2019, we completed the registered public offering of €700 million aggregate principal amount of the 1.625% 2029 Senior Notes. We designated this euro-denominated debt as a non-derivative net investment hedge of a portion of our net investments in euro functional-currency denominated subsidiaries to offset foreign currency fluctuations. 58 Table of Contents
Based on our open derivative positions at December 31, 2023, a hypothetical $0.10 increase in the price of a gallon of ethane and a hypothetical $0.10 increase in the price of a million British thermal units of natural gas would not have a material impact on our income before income taxes.
Based on our open derivative positions at December 31, 2024, a hypothetical $0.10 increase in the price of a gallon of ethane and a hypothetical $0.10 increase in the price of a million British thermal units of natural gas would not have a material impact on our income before income taxes.
In July 2019, we terminated a portion of the foreign exchange hedging contract with a notional value of €70 million. The notional value of the remaining net investment hedges was €150 million at December 31, 2023. The arrangement is scheduled to settle in 2026.
In July 2019, we terminated a portion of the foreign exchange hedging contract with a notional value of €70 million. The notional value of the remaining net investment hedges was €150 million at December 31, 2024. The arrangement is scheduled to settle in 2026.
Interest Rate Risk We are exposed to interest rate risk with respect to fixed and variable rate debt. At December 31, 2023, we had $4,973 million aggregate principal amount of fixed rate debt. We are subject to the risk of higher interest cost if and when this debt is refinanced.
Interest Rate Risk We are exposed to interest rate risk with respect to fixed and variable rate debt. At December 31, 2024, we had $4,627 million aggregate principal amount of fixed rate debt. We are subject to the risk of higher interest cost if and when this debt is refinanced.
If interest rates were 1.0% higher at the time of refinancing, our annual interest expense would increase by approximately $50 million. Also, at December 31, 2023, we had $24 million principal amount of variable rate debt outstanding, which represents the 2026 term loans due 2026 and the tax-exempt waste disposal revenue bonds due 2027.
If interest rates were 1.0% higher at the time of refinancing, our annual interest expense would increase by approximately $46 million. Also, at December 31, 2024, we had $18 million principal amount of variable rate debt outstanding, which represents the 2026 term loans due 2026 and the tax-exempt waste disposal revenue bonds due 2027.
We do not currently hedge our variable interest rate debt, but we may do so in the future. The weighted average variable interest rate for our variable rate debt of $24 million as of December 31, 2023 was 2.48%.
We do not currently hedge our variable interest rate debt, but we may do so in the future. The weighted average variable interest rate for our variable rate debt of $18 million as of December 31, 2024 was 2.46%.

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