UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended	September 30, ~~2021~~2022


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			For the Transition Period from to

Commission File No. 001-32260

Westlake ~~Chemical~~ Corporation

(Exact name of Registrant as specified in its charter)


Delaware						76-0346924
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification Number)

2801 Post Oak Boulevard, Suite 600

Houston, Texas 77056

(Address of principal executive offices, including zip code)

(713) 960-9111

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	WLK	The New York Stock Exchange
1.625% Senior Notes due 2029	WLK29	The New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act:

Large accelerated filer

Accelerated filer

☐

Non-accelerated filer

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes ☐ No x

The number of shares outstanding of the registrant's sole class of common stock as of October ~~27, 2021~~28, 2022 was ~~127,821,964.~~127,537,599.

Table of Contents

TABLE OF CONTENTS



Item			Page
PART I. FINANCIAL INFORMATION
1) Financial Statements			1
2) Management's Discussion and Analysis of Financial Condition and Results of Operations			2428
3) Quantitative and Qualitative Disclosures about Market Risk			4243
4) Controls and Procedures			4344

PART II. OTHER INFORMATION
1) Legal Proceedings			4344
1A) Risk Factors			4445
2) Unregistered Sales of Equity Securities and Use of Proceeds			4447
6) Exhibits			4548

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Table of Contents

WESTLAKE ~~CHEMICAL~~ CORPORATION

CONSOLIDATED BALANCE SHEETS

(Unaudited)


		September 30, 2021		December 31, 2020			September 30, 2022		December 31, 2021

		(in millions of dollars, except par values and share amounts)					(in millions of dollars, except par values and share amounts)
ASSETS	ASSETS					ASSETS
Current assets	Current assets					Current assets
Cash and cash equivalents	Cash and cash equivalents	$	3,571	$	1,313	Cash and cash equivalents	$	1,778	$	1,908
Accounts receivable, net	Accounts receivable, net	1,642		1,214		Accounts receivable, net	2,181		1,868
Inventories	Inventories	1,124		918		Inventories	2,024		1,407
Prepaid expenses and other current assets	Prepaid expenses and other current assets	98		32		Prepaid expenses and other current assets	118		80
Total current assets	Total current assets	6,435		3,477		Total current assets	6,101		5,263
Property, plant and equipment, net	Property, plant and equipment, net	6,992		6,920		Property, plant and equipment, net	8,301		7,606
Operating lease right-of-use assets	Operating lease right-of-use assets	479		461		Operating lease right-of-use assets	583		562
Goodwill	Goodwill	1,253		1,083		Goodwill	2,143		2,024
Customer relationships, net	Customer relationships, net	470		444		Customer relationships, net	1,005		1,083
Other intangible assets, net	Other intangible assets, net	198		168		Other intangible assets, net	570		497
Equity method investments	Equity method investments	1,010		1,059		Equity method investments	1,147		1,007
Other assets, net	Other assets, net	271		223		Other assets, net	575		417
Total assets	Total assets	$	17,108	$	13,835	Total assets	$	20,425	$	18,459
LIABILITIES AND EQUITY	LIABILITIES AND EQUITY					LIABILITIES AND EQUITY
Current liabilities	Current liabilities					Current liabilities
Accounts payable	Accounts payable	$	718	$	536	Accounts payable	$	994	$	879
Accrued and other liabilities	Accrued and other liabilities	912		821		Accrued and other liabilities	1,461		1,196
Current portion of long-term debt, net	Current portion of long-term debt, net	268		—		Current portion of long-term debt, net	6		269
Total current liabilities	Total current liabilities	1,898		1,357		Total current liabilities	2,461		2,344
Long-term debt, net	Long-term debt, net	4,929		3,566		Long-term debt, net	4,813		4,911
Deferred income taxes	Deferred income taxes	1,445		1,368		Deferred income taxes	1,803		1,681
Pension and other post-retirement benefits	Pension and other post-retirement benefits	362		391		Pension and other post-retirement benefits	394		291
Operating lease liabilities	Operating lease liabilities	392		376		Operating lease liabilities	474		461
Other liabilities	Other liabilities	213		199		Other liabilities	292		243
Total liabilities	Total liabilities	9,239		7,257		Total liabilities	10,237		9,931
Commitments and contingencies (Note 14)	Commitments and contingencies (Note 14)	0		0		Commitments and contingencies (Note 14)
Stockholders' equity	Stockholders' equity					Stockholders' equity
Preferred stock, $0.01 par value, 50,000,000 shares authorized; no shares issued and outstanding	Preferred stock, $0.01 par value, 50,000,000 shares authorized; no shares issued and outstanding	—		—		Preferred stock, $0.01 par value, 50,000,000 shares authorized; no shares issued and outstanding	—		—
Common stock, $0.01 par value, 300,000,000 shares authorized; 134,651,380 and 134,651,380 shares issued at September 30, 2021 and December 31, 2020, respectively		1		1
Common stock, held in treasury, at cost; 6,830,317 and 6,821,174 shares at September 30, 2021 and December 31, 2020, respectively		(406)		(401)
Common stock, $0.01 par value, 300,000,000 shares authorized; 134,651,380 and 134,651,380 shares issued at September 30, 2022 and December 31, 2021, respectively						Common stock, $0.01 par value, 300,000,000 shares authorized; 134,651,380 and 134,651,380 shares issued at September 30, 2022 and December 31, 2021, respectively	1		1
Common stock, held in treasury, at cost; 6,992,435 and 6,735,639 shares at September 30, 2022 and December 31, 2021, respectively						Common stock, held in treasury, at cost; 6,992,435 and 6,735,639 shares at September 30, 2022 and December 31, 2021, respectively	(439)		(399)
Additional paid-in capital	Additional paid-in capital	576		569		Additional paid-in capital	590		581
Retained earnings	Retained earnings	7,202		5,938		Retained earnings	9,700		7,808
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(75)		(64)		Accumulated other comprehensive loss	(231)		(36)
Total Westlake Chemical Corporation stockholders' equity		7,298		6,043
Total Westlake Corporation stockholders' equity						Total Westlake Corporation stockholders' equity	9,621		7,955
Noncontrolling interests	Noncontrolling interests	571		535		Noncontrolling interests	567		573
Total equity	Total equity	7,869		6,578		Total equity	10,188		8,528
Total liabilities and equity	Total liabilities and equity	$	17,108	$	13,835	Total liabilities and equity	$	20,425	$	18,459

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

WESTLAKE ~~CHEMICAL~~ CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2021		2020		2021		2020			2022		2021		2022		2021

		(in millions of dollars, except per share data and share amounts)									(in millions of dollars, except per share data and share amounts)
Net sales	Net sales	$	3,055	$	1,898	$	8,271	$	5,539	Net sales	$	3,956	$	3,055	$	12,495	$	8,271
Cost of sales	Cost of sales	2,037		1,650		5,872		4,839		Cost of sales	3,180		2,037		8,989		5,872
Gross profit	Gross profit	1,018		248		2,399		700		Gross profit	776		1,018		3,506		2,399
Selling, general and administrative expenses	Selling, general and administrative expenses	122		108		383		332		Selling, general and administrative expenses	215		122		635		383
Amortization of intangibles	Amortization of intangibles	29		27		83		81		Amortization of intangibles	39		29		124		83
Restructuring, transaction and integration-related costs	Restructuring, transaction and integration-related costs	6		34		6		36		Restructuring, transaction and integration-related costs	6		6		24		6
Income from operations	Income from operations	861		79		1,927		251		Income from operations	516		861		2,723		1,927
Other income (expense)	Other income (expense)									Other income (expense)
Interest expense	Interest expense	(61)		(37)		(130)		(108)		Interest expense	(44)		(61)		(134)		(130)
Other income, net	Other income, net	13		12		35		32		Other income, net	24		13		52		35
Income before income taxes	Income before income taxes	813		54		1,832		175		Income before income taxes	496		813		2,641		1,832
Provision for (benefit from) income taxes		193		(15)		423		(75)
Provision for income taxes										Provision for income taxes	84		193		592		423
Net income	Net income	620		69		1,409		250		Net income	412		620		2,049		1,409
Net income attributable to noncontrolling interests	Net income attributable to noncontrolling interests	13		12		38		33		Net income attributable to noncontrolling interests	11		13		34		38
Net income attributable to Westlake Chemical Corporation		$	607	$	57	$	1,371	$	217
Earnings per common share attributable to Westlake Chemical Corporation:
Net income attributable to Westlake Corporation										Net income attributable to Westlake Corporation	$	401	$	607	$	2,015	$	1,371
Earnings per common share attributable to Westlake Corporation:										Earnings per common share attributable to Westlake Corporation:
Basic	Basic	$	4.71	$	0.45	$	10.65	$	1.69	Basic	$	3.12	$	4.71	$	15.65	$	10.65
Diluted	Diluted	$	4.69	$	0.45	$	10.60	$	1.69	Diluted	$	3.10	$	4.69	$	15.54	$	10.60
Weighted average common shares outstanding:	Weighted average common shares outstanding:									Weighted average common shares outstanding:
Basic	Basic	128,060,193		127,701,340		128,053,337		127,872,434		Basic	127,943,400		128,060,193		128,118,160		128,053,337
Diluted	Diluted	128,765,814		127,953,907		128,710,097		128,073,066		Diluted	128,747,012		128,765,814		129,003,750		128,710,097

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

WESTLAKE ~~CHEMICAL~~ CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2021		2020		2021		2020			2022		2021		2022		2021

		(in millions of dollars)									(in millions of dollars)
Net income	Net income	$	620	$	69	$	1,409	$	250	Net income	$	412	$	620	$	2,049	$	1,409
Other comprehensive income (loss), net of income taxes	Other comprehensive income (loss), net of income taxes									Other comprehensive income (loss), net of income taxes
Pension and other post-retirement benefits liability	Pension and other post-retirement benefits liability									Pension and other post-retirement benefits liability
Pension and other post-retirement benefits reserves adjustment	Pension and other post-retirement benefits reserves adjustment	1		—		1		—		Pension and other post-retirement benefits reserves adjustment	—		1		1		1
Income tax provision on pension and other post-retirement benefits liability	Income tax provision on pension and other post-retirement benefits liability	(1)		—		(1)		—		Income tax provision on pension and other post-retirement benefits liability	—		(1)		—		(1)
Foreign currency translation adjustments	Foreign currency translation adjustments									Foreign currency translation adjustments
Foreign currency translation	Foreign currency translation	(13)		10		2		—		Foreign currency translation	(106)		(13)		(175)		2
Income tax benefit (provision) on foreign currency translation		(6)		9		(13)		7
Other comprehensive income (loss), net of income taxes		(19)		19		(11)		7
Income tax provision on foreign currency translation										Income tax provision on foreign currency translation	(13)		(6)		(29)		(13)
Other comprehensive loss, net of income taxes										Other comprehensive loss, net of income taxes	(119)		(19)		(203)		(11)
Comprehensive income	Comprehensive income	601		88		1,398		257		Comprehensive income	293		601		1,846		1,398
Comprehensive income attributable to noncontrolling interests, net of tax of $1 and $0 for the three months ended September 30, 2021 and 2020; and net of tax of $2 and $1 for the nine months ended September 30, 2021 and 2020, respectively		13		13		38		35
Comprehensive income attributable to Westlake Chemical Corporation		$	588	$	75	$	1,360	$	222
Comprehensive income attributable to noncontrolling interests, net of tax of $1 and $1 for the three months ended September 30, 2022 and 2021; and net of tax of $3 and $2 for the nine months ended September 30, 2022 and 2021, respectively										Comprehensive income attributable to noncontrolling interests, net of tax of $1 and $1 for the three months ended September 30, 2022 and 2021; and net of tax of $3 and $2 for the nine months ended September 30, 2022 and 2021, respectively	7		13		26		38
Comprehensive income attributable to Westlake Corporation										Comprehensive income attributable to Westlake Corporation	$	286	$	588	$	1,820	$	1,360

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

WESTLAKE ~~CHEMICAL~~ CORPORATION

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

(Unaudited)


		Common Stock			Common Stock, Held in Treasury														Common Stock			Common Stock, Held in Treasury
		Number of Shares	Amount		Number of Shares	At Cost		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Noncontrolling Interests		Total			Number of Shares	Amount		Number of Shares	At Cost		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Noncontrolling Interests		Total

		(in millions of dollars, except share amounts)																	(in millions of dollars, except share amounts)
Balances at December 31, 2020		134,651,380	$	1	6,821,174	$	(401)	$	569	$	5,938	$	(64)	$	535	$	6,578
Balances at December 31, 2021																		Balances at December 31, 2021	134,651,380	$	1	6,735,639	$	(399)	$	581	$	7,808	$	(36)	$	573	$	8,528
Net income	Net income	—	—		—	—		—		242		—		11		253		Net income	—	—		—	—		—		756		—		8		764
Other comprehensive loss	Other comprehensive loss	—	—		—	—		—		—		(6)		(1)		(7)		Other comprehensive loss	—	—		—	—		—		—		(9)		(2)		(11)

Shares issued—stock-based compensation	Shares issued—stock-based compensation	—	—		(301,112)	22		(13)		—		—		—		9		Shares issued—stock-based compensation	—	—		(403,743)	27		(17)		—		—		—		10
Stock-based compensation	Stock-based compensation	—	—		—	—		8		—		—		—		8		Stock-based compensation	—	—		—	—		8		—		—		—		8
Dividends declared	Dividends declared	—	—		—	—		—		(35)		—		—		(35)		Dividends declared	—	—		—	—		—		(39)		—		—		(39)
Distributions to noncontrolling interests	Distributions to noncontrolling interests	—	—		—	—		—		—		—		(11)		(11)		Distributions to noncontrolling interests	—	—		—	—		—		—		—		(10)		(10)
Noncontrolling interests	Noncontrolling interests	—	—		—	—		—		—		—		30		30		Noncontrolling interests	—	—		—	—		—		—		—		2		2
Balances at March 31, 2021		134,651,380	1		6,520,062	(379)		564		6,145		(70)		564		6,825
Balances at March 31, 2022																		Balances at March 31, 2022	134,651,380	$	1	6,331,896	$	(372)	$	572	$	8,525	$	(45)	$	571	$	9,252
Net income	Net income	—	—		—	—		—		522		—		14		536		Net income	—	—		—	—		—		858		—		15		873
Other comprehensive income		—	—		—	—		—		—		14		1		15

Other comprehensive loss																		Other comprehensive loss	—	—		—	—		—		—		(71)		(2)		(73)
Common stock repurchased																		Common stock repurchased	—	—		412,490	(41)		—		—		—		—		(41)
Shares issued—stock-based compensation	Shares issued—stock-based compensation	—	—		(18,397)	1		—		—		—		—		1		Shares issued—stock-based compensation	—	—		(103,079)	5		1		—		—		—		6
Stock-based compensation	Stock-based compensation	—	—		—	—		7		—		—		—		7		Stock-based compensation	—	—		—	—		9		—		—		—		9
Dividends declared	Dividends declared	—	—		—	—		—		(34)		—		—		(34)		Dividends declared	—	—		—	—		—		(38)		—		—		(38)
Distributions to noncontrolling interests	Distributions to noncontrolling interests	—	—		—	—		—		—		—		(11)		(11)		Distributions to noncontrolling interests	—	—		—	—		—		—		—		(14)		(14)

Balances at June 30, 2021		134,651,380	1		6,501,665	(378)		571		6,633		(56)		568		7,339
Balances at June 30, 2022																		Balances at June 30, 2022	134,651,380	$	1	6,641,307	$	(408)	$	582	$	9,345	$	(116)	$	570	$	9,974

Table of Contents

WESTLAKE ~~CHEMICAL~~ CORPORATION

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

(Unaudited)


		Common Stock			Common Stock, Held in Treasury														Common Stock			Common Stock, Held in Treasury
		Number of Shares	Amount		Number of Shares	At Cost		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Noncontrolling Interests		Total			Number of Shares	Amount		Number of Shares	At Cost		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Noncontrolling Interests		Total

		(in millions of dollars, except share amounts)																	(in millions of dollars, except share amounts)
Net income	Net income	—	—		—	—		—		607		—		13		620		Net income	—	—		—	—		—		401		—		11		412
Other comprehensive income		—	—		—	—		—		—		(19)		—		(19)
Other comprehensive loss																		Other comprehensive loss	—	—		—	—		—		—		(115)		(4)		(119)
Common stock repurchased	Common stock repurchased	—	—		355,800	(30)		—		—		—		—		(30)		Common stock repurchased	—	—		372,430	(32)		—		—		—		—		(32)
Shares issued—stock-based compensation	Shares issued—stock-based compensation	—	—		(27,148)	2		(2)		—		—		—		—		Shares issued—stock-based compensation	—	—		(21,302)	1		—		—		—		—		1
Stock-based compensation	Stock-based compensation	—	—		—	—		7		—		—		—		7		Stock-based compensation	—	—		—	—		8		—		—		—		8
Dividends declared	Dividends declared	—	—		—	—		—		(38)		—		—		(38)		Dividends declared	—	—		—	—		—		(46)		—		—		(46)
Distributions to noncontrolling interests	Distributions to noncontrolling interests	—	—		—	—		—		—		—		(10)		(10)		Distributions to noncontrolling interests	—	—		—	—		—		—		—		(10)		(10)

Balances at September 30, 2021		134,651,380	$	1	6,830,317	$	(406)	$	576	$	7,202	$	(75)	$	571	$	7,869
Balances at September 30, 2022																		Balances at September 30, 2022	134,651,380	$	1	6,992,435	$	(439)	$	590	$	9,700	$	(231)	$	567	$	10,188

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

WESTLAKE ~~CHEMICAL~~ CORPORATION

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

(Unaudited)


		Common Stock			Common Stock, Held in Treasury														Common Stock			Common Stock, Held in Treasury
		Number of Shares	Amount		Number of Shares	At Cost		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Noncontrolling Interests		Total			Number of Shares	Amount		Number of Shares	At Cost		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Noncontrolling Interests		Total

		(in millions of dollars, except share amounts)																	(in millions of dollars, except share amounts)
Balances at December 31, 2019		134,651,380	$	1	6,266,609	$	(377)	$	553	$	5,757	$	(74)	$	543	$	6,403
Balances at December 31, 2020																		Balances at December 31, 2020	134,651,380	$	1	6,821,174	$	(401)	$	569	$	5,938	$	(64)	$	535	$	6,578
Net income	Net income	—	—		—	—		—		145		—		12		157		Net income	—	—		—	—		—		242		—		11		253
Other comprehensive loss	Other comprehensive loss	—	—		—	—		—		—		(32)		—		(32)		Other comprehensive loss	—	—		—	—		—		—		(6)		(1)		(7)
Common stock repurchased		—	—		995,529	(54)		—		—		—		—		(54)

Shares issued—stock-based compensation	Shares issued—stock-based compensation	—	—		(282,476)	18		(8)		(8)		—		—		2		Shares issued—stock-based compensation	—	—		(301,112)	22		(13)		—		—		—		9
Stock-based compensation	Stock-based compensation	—	—		—	—		6		—		—		—		6		Stock-based compensation	—	—		—	—		8		—		—		—		8
Dividends declared	Dividends declared	—	—		—	—		—		(34)		—		—		(34)		Dividends declared	—	—		—	—		—		(35)		—		—		(35)
Distributions to noncontrolling interests	Distributions to noncontrolling interests	—	—		—	—		—		—		—		(10)		(10)		Distributions to noncontrolling interests	—	—		—	—		—		—		—		(11)		(11)

Balances at March 31, 2020		134,651,380	1		6,979,662	(413)		551		5,860		(106)		545		6,438
Noncontrolling interests																		Noncontrolling interests	—	—		—	—		—		—		—		30		30
Balances at March 31, 2021																		Balances at March 31, 2021	134,651,380	$	1	6,520,062	$	(379)	$	564	$	6,145	$	(70)	$	564	$	6,825
Net income	Net income	—	—		—	—		—		15		—		9		24		Net income	—	—		—	—		—		522		—		14		536
Other comprehensive income	Other comprehensive income	—	—		—	—		—		—		19		1		20		Other comprehensive income	—	—		—	—		—		—		14		1		15

Shares issued—stock-based compensation	Shares issued—stock-based compensation	—	—		(16,331)	2		(1)		(1)		—		—		—		Shares issued—stock-based compensation	—	—		(18,397)	1		—		—		—		—		1
Stock-based compensation	Stock-based compensation	—	—		—	—		8		—		—		—		8		Stock-based compensation	—	—		—	—		7		—		—		—		7
Dividends declared	Dividends declared	—	—		—	—		—		(34)		—		—		(34)		Dividends declared	—	—		—	—		—		(34)		—		—		(34)
Distributions to noncontrolling interests	Distributions to noncontrolling interests	—	—		—	—		—		—		—		(19)		(19)		Distributions to noncontrolling interests	—	—		—	—		—		—		—		(11)		(11)
Balances at June 30, 2020		134,651,380	1		6,963,331	(411)		558		5,840		(87)		536		6,437

Balances at June 30, 2021																		Balances at June 30, 2021	134,651,380	$	1	6,501,665	$	(378)	$	571	$	6,633	$	(56)	$	568	$	7,339

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WESTLAKE ~~CHEMICAL~~ CORPORATION

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

(Unaudited)


		Common Stock			Common Stock, Held in Treasury														Common Stock			Common Stock, Held in Treasury
		Number of Shares	Amount		Number of Shares	At Cost		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Noncontrolling Interests		Total			Number of Shares	Amount		Number of Shares	At Cost		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Noncontrolling Interests		Total

		(in millions of dollars, except share amounts)																	(in millions of dollars, except share amounts)
Net income	Net income	—	—		—	—		—		57		—		12		69		Net income	—	—		—	—		—		607		—		13		620
Other comprehensive loss	Other comprehensive loss	—	—		—	—		—		—		18		1		19		Other comprehensive loss	—	—		—	—		—		—		(19)		—		(19)

Common stock repurchased																		Common stock repurchased	—	—		355,800	(30)		—		—		—		—		(30)
Shares issued—stock-based compensation	Shares issued—stock-based compensation	—	—		(32,707)	2		(2)		—		—		—		—		Shares issued—stock-based compensation	—	—		(27,148)	2		(2)		—		—		—		—
Stock-based compensation	Stock-based compensation	—	—		—	—		7		—		—		—		7		Stock-based compensation	—	—		—	—		7		—		—		—		7
Dividends declared	Dividends declared	—	—		—	—		—		(34)		—		—		(34)		Dividends declared	—	—		—	—		—		(38)		—		—		(38)
Distributions to noncontrolling interests	Distributions to noncontrolling interests	—	—		—	—		—		—		—		(10)		(10)		Distributions to noncontrolling interests	—	—		—	—		—		—		—		(10)		(10)
Balances at September 30, 2020		134,651,380	$	1	6,930,624	$	(409)	$	563	$	5,863	$	(69)	$	539	$	6,488

Balances at September 30, 2021																		Balances at September 30, 2021	134,651,380	$	1	6,830,317	$	(406)	$	576	$	7,202	$	(75)	$	571	$	7,869

The accompanying notes are an integral part of these consolidated financial statements.

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WESTLAKE ~~CHEMICAL~~ CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


		Nine Months Ended September 30,					Nine Months Ended September 30,
		2021		2020			2022		2021

		(in millions of dollars)					(in millions of dollars)
Cash flows from operating activities	Cash flows from operating activities					Cash flows from operating activities
Net income	Net income	$	1,409	$	250	Net income	$	2,049	$	1,409
Adjustments to reconcile net income to net cash provided by operating activities	Adjustments to reconcile net income to net cash provided by operating activities					Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization	Depreciation and amortization	600		577		Depreciation and amortization	785		600
Stock-based compensation expense	Stock-based compensation expense	23		21		Stock-based compensation expense	26		23
Loss from disposition and write-off of property, plant and equipment	Loss from disposition and write-off of property, plant and equipment	14		26		Loss from disposition and write-off of property, plant and equipment	36		14

Deferred income taxes	Deferred income taxes	50		154		Deferred income taxes	44		50
Other losses, net	Other losses, net	21		23		Other losses, net	24		21
Changes in operating assets and liabilities, net of effect of business acquisitions	Changes in operating assets and liabilities, net of effect of business acquisitions					Changes in operating assets and liabilities, net of effect of business acquisitions
Accounts receivable	Accounts receivable	(414)		(251)		Accounts receivable	(100)		(414)
Inventories	Inventories	(180)		108		Inventories	(338)		(180)
Prepaid expenses and other current assets	Prepaid expenses and other current assets	(49)		(8)		Prepaid expenses and other current assets	(18)		(49)
Accounts payable	Accounts payable	184		17		Accounts payable	2		184
Accrued and other liabilities	Accrued and other liabilities	78		14		Accrued and other liabilities	206		78
Other, net	Other, net	(99)		(65)		Other, net	(156)		(99)
Net cash provided by operating activities	Net cash provided by operating activities	1,637		866		Net cash provided by operating activities	2,560		1,637
Cash flows from investing activities	Cash flows from investing activities					Cash flows from investing activities
Acquisition of businesses, net of cash acquired		(428)		—

Acquisition of business, net of cash acquired						Acquisition of business, net of cash acquired	(1,171)		(428)
Additions to investments in unconsolidated subsidiaries						Additions to investments in unconsolidated subsidiaries	(177)		(19)
Additions to property, plant and equipment	Additions to property, plant and equipment	(414)		(403)		Additions to property, plant and equipment	(811)		(414)
Return of (additions to) investment from unconsolidated subsidiaries		(19)		44
Other, net	Other, net	19		(7)		Other, net	11		19
Net cash used for investing activities	Net cash used for investing activities	(842)		(366)		Net cash used for investing activities	(2,148)		(842)
Cash flows from financing activities	Cash flows from financing activities					Cash flows from financing activities
Debt issuance costs	Debt issuance costs	(18)		(3)		Debt issuance costs	—		(18)
Distributions to noncontrolling interests	Distributions to noncontrolling interests	(32)		(39)		Distributions to noncontrolling interests	(34)		(32)
Dividends paid	Dividends paid	(107)		(102)		Dividends paid	(123)		(107)
Proceeds from debt issuance						Proceeds from debt issuance	—		1,668

Proceeds from debt issuance and drawdown of revolver, net		1,668		1,299
Proceeds from (repayment of) short-term notes payable, net		5		(17)

Repayment of revolver and senior notes		—		(1,100)
Repayment of senior notes						Repayment of senior notes	(250)		—
Repurchase of common stock for treasury	Repurchase of common stock for treasury	(30)		(54)		Repurchase of common stock for treasury	(68)		(30)
Other, net	Other, net	1		2		Other, net	(5)		6
Net cash provided by (used for) financing activities	Net cash provided by (used for) financing activities	1,487		(14)		Net cash provided by (used for) financing activities	(480)		1,487
Effect of exchange rate changes on cash, cash equivalents and restricted cash	Effect of exchange rate changes on cash, cash equivalents and restricted cash	(9)		4		Effect of exchange rate changes on cash, cash equivalents and restricted cash	(67)		(9)
Net increase in cash, cash equivalents and restricted cash		2,273		490
Net increase (decrease) in cash, cash equivalents and restricted cash						Net increase (decrease) in cash, cash equivalents and restricted cash	(135)		2,273
Cash, cash equivalents and restricted cash at beginning of period	Cash, cash equivalents and restricted cash at beginning of period	1,337		750		Cash, cash equivalents and restricted cash at beginning of period	1,941		1,337
Cash, cash equivalents and restricted cash at end of period	Cash, cash equivalents and restricted cash at end of period	$	3,610	$	1,240	Cash, cash equivalents and restricted cash at end of period	$	1,806	$	3,610

The accompanying notes are an integral part of these consolidated financial statements.

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WESTLAKE ~~CHEMICAL~~ CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(in millions of dollars, except share amounts and per share data)

1. Basis of Financial Statements

The accompanying unaudited consolidated interim financial statements were prepared in accordance with the rules and regulations of the Securities and Exchange Commission (the "SEC") for interim periods. Accordingly, certain information and footnotes required for complete financial statements under generally accepted accounting principles in the United States ("U.S. GAAP") have not been included. These interim consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto of Westlake Corporation, formerly known as Westlake Chemical Corporation (the "Company"), included in the annual report on Form 10-K for the fiscal year ended December 31, ~~2020~~2021 (the ~~"2020~~"2021 Form 10-K"), filed with the SEC on February ~~24, 2021.~~23, 2022. The Company changed its name from Westlake Chemical Corporation to Westlake Corporation on February 18, 2022. These consolidated financial statements have been prepared in conformity with the accounting principles and practices as disclosed in the notes to the consolidated financial statements of the Company for the fiscal year ended December 31, ~~2020.~~2021. The Company operates as an integrated global manufacturer and marketer of performance and essential materials and housing and infrastructure products. These products include some of the most widely used materials in the world, which are fundamental to many diverse consumer and industrial markets, including residential construction, flexible and rigid packaging products, mobility and transportation products, healthcare products, materials used in turbines to generate wind energy, water treatment, coatings as well as other durable and non-durable goods. The Company's customers range from large chemical processors and plastics fabricators to small construction contractors, municipalities and supply warehouses throughout North America, Europe and Asia.

In the opinion of the Company's management, the accompanying unaudited consolidated interim financial statements reflect all adjustments (consisting only of normal recurring adjustments) that are necessary for a fair statement of the Company's financial position as of September 30, ~~2021,~~2022, its results of operations for the three and nine months ended September 30, ~~2021~~2022 and ~~2020,~~2021, and the changes in its cash position for the nine months ended September 30, ~~2021~~2022 and ~~2020.~~2021.

Results of operations and changes in cash position for the interim periods presented are not necessarily indicative of the results that will be realized for the fiscal year ending December 31, ~~2021~~2022 or any other interim period. The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities. Actual results could differ from those estimates.

~~The coronavirus ("COVID-19") pandemic resulted in widespread adverse impacts on the global economy in 2020.~~ As the COVID-19 pandemic and its impacts on the global economy continue, the Company may experience impacts on its business operations. However, the impact that COVID-19 will have on the financial condition, resultsRecasting of operations and cash flows of the Company cannot be estimated with certainty at this time as it will depend on future developments, including, among others, the timing and logistics with respect to the distribution of vaccines globally and the efficacy of the available vaccines (including with respect to the more recent variants of COVID-19) and other treatments, the ultimate duration of the pandemic, geographic spread and severity of the virus, the consequences of governmental and other measures designed to prevent the spread of the virus, actions taken by customers, suppliers and other third parties, workforce availability, and the timing and extent to which normal economic and operating conditions resume.Certain Prior Period Information

The Company ~~holds a 50% interest~~had historically operated in ~~RS Cogen, LLC ("RS Cogen") with Entergy Power RS, LLC ("Entergy") holding~~two principal operating segments, Vinyls and Olefins. In the ~~remaining interest. Effective January~~fourth quarter of 2021, the Company ~~consolidated RS Cogen~~reorganized its business into ~~its consolidated financial statements~~two principal operating segments, Performance and ~~classified Entergy's 50% interest~~Essential Materials and Housing and Infrastructure Products. These reporting changes have been retrospectively reflected in ~~RS Cogen as a component of noncontrolling interest on~~ the ~~consolidated balance sheet.~~segment results for all periods presented.

Recent Accounting ~~Pronouncements~~Pronouncement

~~Reference Rate Reform~~Business Combinations - Accounting for Contract Assets and Contract Liabilities from Contracts with Customers Update (ASU ~~No. 2020-04)~~No.2021-08)

In ~~March 2020,~~October 2021, the Financial Accounting Standards Board ("FASB") issued an accounting standards update that requires acquiring entities to ~~provide optional expedients~~recognize and ~~exceptions for applying generally accepted~~measure contract assets and contract liabilities in a business combination in accordance with the accounting ~~principles to contracts, hedging relationships and other transactions affected by reference rate reform, if certain criteria are met.~~guidance on Revenue from Contracts with Customers (ASC 606). The ~~amendments~~guidance in this update ~~are effective~~improves comparability for ~~all entities from March 12, 2020 through December 31, 2022,~~both the recognition and measurement of acquired revenue contracts with customers as of the ~~adoption is not expected to have~~date of and after a ~~material impact on our consolidated financial statements. Certain exceptions provided under this guidance may be applicable to future reference rate reform related transitions.~~

~~Recently Adopted Accounting Standards~~

~~Income Taxes (ASU No. 2019-12)~~

In December 2019, the FASB issued an accounting standards update removing certain exceptions for investments, intraperiod allocations and interim calculations and adding guidance to reduce complexity in accounting for income taxes.business combination. The accounting standard ~~became~~will be effective for reporting periods beginning after December 15, ~~2020.~~2022. Early adoption of the guidance is permitted. The Company ~~adopted this accounting standard effective January 1, 2021, and the~~does not expect that its adoption ~~did not~~will have a material impact on the Company's consolidated financial position, results of operations and cash flows.

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WESTLAKE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)

(in millions of dollars, except share amounts and per share data)

Inflation Reduction Act of 2022

On August 16, 2022, the Inflation Reduction Act of 2022 (the "IRA") was signed into law. The IRA, among other provisions, imposes a 15% corporate alternative minimum tax on the adjusted financial statement income of certain large corporations effective for tax years beginning after December 31, 2022 and a 1% excise tax on stock repurchases made by publicly traded U.S. corporations after December 31, 2022. The Company is in the process of evaluating the IRA and the impact it may have on the Company's consolidated financial statements.

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WESTLAKE ~~CHEMICAL~~ CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)

(in millions of dollars, except share amounts and per share data)

2. Acquisitions

~~Boral Target Companies in North America.~~Hexion Epoxy Business.

On ~~June 20,~~November 24, 2021, ~~Royal Building Products (USA) Inc. ("RBP"),~~the Company, through a wholly-owned subsidiary, ~~of Westlake,~~ entered into ~~an Equity~~a Stock Purchase Agreement (the ~~"Boral~~"Hexion Epoxy Purchase Agreement") by and among ~~Boral Building Products~~Hexion Inc. ("Hexion"), a ~~Michigan~~New Jersey corporation, Boral Stone Products LLC, a Delaware limited liability company, Boral Lifetile Inc., a California corporation, Boral Windows LLC, a Utah limited liability company, Boral Industries Inc., a California corporation ("Boral Industries"), RBP and solely for the limited purposes set forth therein, ~~Westlake and Boral Limited, an Australian corporation ("Boral").~~the Company. Pursuant to the terms of the ~~Boral~~Hexion Epoxy Purchase Agreement, ~~RBP~~the Company agreed to acquire ~~from Boral Industries~~ all of the ~~issued and outstanding~~ equity interests in Hexion's global epoxy business ("Westlake Epoxy"). On February 1, 2022, the Company completed its acquisition of ~~certain subsidiaries~~Westlake Epoxy for a total purchase consideration of $1,207 and accounted for the acquisition under the business combination method in accordance with Accounting Standard Codification Topic 805, Business Combinations. This acquisition represents a significant strategic expansion of the Company's Performance and Essential Materials businesses into additional high-growth, innovative and sustainability-oriented applications – such as wind turbine blades and light-weight automotive structural components. Because epoxies are produced from chlorine and caustic soda, the transaction also provides vertical integration with the Company's global chlor-alkali businesses. The assets acquired and liabilities assumed and the results of operations of the Westlake Epoxy business are included in the Performance and Essential Materials segment.

For the nine months ended September 30, 2022, the Company recognized acquisition-related costs of $6 for advisory, consulting and professional fees, and other expenses that were expensed as restructuring, transaction and integration-related costs as a component of the income from operations. The acquisition of Westlake Epoxy on the statement of cash flows is presented net of the cash and restricted cash acquired.

The following table summarizes the fair value of identified assets acquired and liabilities assumed at the date of acquisition. The preliminary allocation of consideration transferred is based on management's estimates, judgments and assumptions. These estimates, judgments and assumptions are subject to change upon final valuation and should be treated as preliminary values. The final allocation of purchase consideration could include changes in the estimated fair value of (1) inventories; (2) property, plant and equipment; (3) intangible assets comprising of customer relationships, trade names, developed technologies; (4) deferred income taxes; (5) leases; and (6) other assets.

The information below represents the purchase price allocation:


Cash	$	42
Accounts receivable	299
Inventories	346
Prepaid expenses and other current assets	24

Property, plant and equipment	660
Operating lease right-of-use assets	59
Intangible assets	145



Other assets	104
Total assets acquired	1,679
Accounts payable	189
Accrued and other liabilities	84
Deferred income taxes	95
Pensions and other post-retirement benefits	163
Operating lease liabilities	48
Other liabilities	19
Total liabilities assumed	598
Total identifiable net assets acquired	1,081
Noncontrolling interest	(2)
Goodwill	128
Total Westlake Corporation purchase consideration	$	1,207

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WESTLAKE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)

(in millions of dollars, except share amounts and per share data)

Management estimated that consideration paid exceeded the fair value of the net assets acquired. The excess of the total equity value of Westlake Epoxy based on the purchase consideration over net assets acquired was recorded as goodwill, most of which is not expected to be deductible for income tax purposes. The goodwill is primarily attributable to the assembled workforce and synergies expected to arise after the acquisition. The purchase accounting adjustments recorded since the date of the acquisition resulted in a $9 increase in goodwill. Intangible assets acquired as a result of the Westlake Epoxy acquisition are amortized on a straight-line basis to reflect the pattern in which the economic benefits of the intangible assets are realized. The Company has preliminarily estimated the useful lives of trade names, technology and customer relationships as 19 years, 17 years and 11 years, respectively.

The fair value for trade names and technology were estimated using the income approach, specifically the relief-from-royalty method which estimates the cost savings that accrue to the owner of the intangible assets that would otherwise be payable as royalties or licenses fees on revenues earned through the use of the asset. The fair value of customer relationships was estimated using the multi-period excess earnings method. The excess earning method model estimates revenues and cash flows derived from the asset and then deducts portions of the cash flow that can be attributed to supporting assets. The resulting cash flow, which is attributable solely to the asset acquired, is then discounted at a rate of return commensurate with the risk of the asset to calculate the present value.

Unaudited Pro Forma Financial Information

The acquired Westlake Epoxy business contributed net sales and net income of $1,146 and $68, respectively, to the Company for the period from February 1, 2022 to September 30, 2022. The following unaudited pro forma summary presents the results of operations of the Company as if the acquisition of Westlake Epoxy occurred on January 1, 2021:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Net sales	$	3,956	$	3,508	$	12,654	$	9,457
Net income attributable to Westlake Corporation	$	401	$	678	$	2,086	$	1,468

The amounts have been calculated after applying the Company's accounting policies and adjusting the results of Westlake Epoxy to reflect additional depreciation, amortization, and other purchase accounting adjustments assuming the fair value adjustments to the property, plant and equipment and intangibles assets and other purchase accounting adjustments have been applied on January 1, 2021. The pro forma amounts do not include any potential synergies, cost savings or other expected benefits of the acquisition, and are presented for illustrative purposes only and are not necessarily indicative of results that would have been achieved if the acquisition had occurred as of January 1, 2021 or of future operating performance.

Boral Target Companies in North America.

On October 1, 2021, the Company completed its acquisition of Boral ~~Industries engaged in Boral's~~Limited's North American building products businesses in roofing, siding, trim and shutters, decorative stone and windows (the "Boral Target Companies") for a total final purchase consideration of $2,140 in an all-cash transaction. The assets acquired and liabilities assumed and the results of operations of the Boral Target Companies are included in the Housing and Infrastructure Products segment. The Company recognized intangible assets of $952, of which $645 is included in customer relationships, net on the Company's consolidated balance sheets and goodwill of $787. The purchase accounting adjustments for the nine months ended September 30, 2022, resulted in a $16 increase in goodwill. The intangible assets that have been acquired are being amortized over periods of 12 to 22 years.

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WESTLAKE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)

(in millions of dollars, except share amounts and per share data)

The information below represents the final purchase price of $2,150 in cash, subject to working capital post-closing adjustments. The Boral Purchase Agreement also includes a potential earn-out payment from RBP to Boral Industries of up to $65 if Boral's windows business generates EBITDA in excess of a specified target in its fiscal year ending June 30, 2024. The acquisition will be accounted for under the acquisition method of accounting. The fair value of the estimated earn-out will be recognized as contingent consideration liability as part of the Company's purchase accounting. allocation:


Cash	$	5
Accounts receivable	119
Inventories	156
Prepaid expenses and other current assets	3

Property, plant and equipment	482
Operating lease right-of-use assets	87
Intangible assets	952
Other assets	18
Total assets acquired	1,822
Accounts payable	46
Accrued and other liabilities	105
Deferred income taxes	243
Operating lease liabilities	73
Other liabilities	2
Total liabilities assumed	469
Total identifiable net assets acquired	1,353
Goodwill	787
Total Westlake Corporation purchase consideration	$	2,140

LASCO Fittings, Inc.

On ~~October 1,~~August 19, 2021, the Company completed ~~the~~its acquisition of and acquired all of the equity interests in, the Boral Target Companies. Due to the recent closing of this acquisition, certain financial information related to this acquisition, including the fair value of total consideration transferred or estimated to be transferred, is not yet finalized.

~~LASCO Fittings, Inc~~. On July 4, 2021, North American Pipe Corporation ("NAPCO"), a wholly-owned subsidiary of Westlake, entered into an Equity Purchase Agreement with Aalberts U.S. Holding Corp., a Delaware corporation ("Aalberts") and wholly-owned subsidiary of Aalberts N.V., pursuant to which NAPCO agreed to acquire LASCO Fittings, Inc., a Delaware corporation ("LASCO"), ~~from Aalberts. LASCO is~~ a manufacturer of injected-molded ~~PVC~~polyvinyl chloride ("PVC") fittings that serve the plumbing, pool and spa, industrial, irrigation and retail markets in the United ~~States. On August 19, 2021, the Company completed its acquisition of, and acquired all of the equity interests in, LASCO. The~~States, for a total final closing purchase consideration ~~was~~of $277. ~~The acquisition is being accounted for under the acquisition method of accounting.~~ The assets acquired and liabilities assumed and the results of operations of LASCO are included in the ~~Vinyls~~Housing and Infrastructure Products segment. LASCO net sales and net income since the acquisition date and the acquisition-related costs recognized in the consolidated statement of operations for the three and nine months ended September 30, 2021 were not material to the Company's consolidated statement of operations. The pro forma impact of this acquisition has not been presented as it is not material to the Company's consolidated statements of operations for the nine months ended September 30, 2021 and 2020. The Company recognized intangible assets of $77, of which $50 is included in customer relationships, net on the Company's consolidated balance sheets ~~as of September 30, 2021,~~ and goodwill of ~~$106~~$105, with the remainder of the purchase consideration primarily allocated to property, plant and equipment, net and working capital balances. The ~~goodwill is expected to be deductible for income tax purposes. The goodwill recognized is primarily attributable to the expected value to be achieved from the acquisition. The~~ intangible assets that have been acquired are being amortized over ~~a period~~periods of 17 to 18 years.

Dimex ~~LLC~~. On August 2, 2021, Rome Delaware Corp. ("Rome"), a wholly-owned subsidiary of Westlake, entered into a Stock Purchase Agreement with DX Acquisition Corp., a Delaware corporation ("Dimex"), each of Dimex's stockholders, and for limited purposes, Westlake and Grey Mountain Partners Fund III Holdings, L.P., pursuant to which Rome agreed to acquire Dimex. Dimex is a producer of various consumer products made from post-industrial-recycled polyvinyl chloride, polyethylene and thermoplastic elastomer materials, including landscape edging; industrial, home and office matting; marine dock edging; and masonry joint controls. LLC.

On September 10, 2021, the Company completed its acquisition of DX Acquisition Corp., a Delaware corporation ("Dimex"), a producer of various consumer products made from post-industrial-recycled PVC, polyethylene and ~~acquired all of the equity interests in, Dimex.~~thermoplastic elastomer materials, including, landscape edging; home, office and industrial matting; marine dock edging; and masonry joint controls. The total final closing purchase consideration was ~~$172, subject to working capital post-closing adjustments. The acquisition is being accounted for under the acquisition method of accounting.~~$172. The assets acquired and liabilities assumed and the results of operations of Dimex are included in the ~~Vinyls~~Housing and Infrastructure Products segment. Dimex net sales and net income since the acquisition date and the acquisition-related costs recognized in the consolidated statement of operations for the three and nine months ended September 30, 2021 were not material to the Company's consolidated statement of operations. The pro forma impact of this acquisition has not been presented as it is not material to the Company's consolidated statements of operations for the nine months ended September 30, 2021 and 2020. The Company recognized intangible assets of ~~$69,~~$72, of which ~~$45~~$48 is included in customer relationships, net on the Company's consolidated balance sheets ~~as of September 30, 2021,~~ and goodwill of ~~$66~~$68, with the remainder of the purchase consideration primarily allocated to property, plant and equipment, net and working capital balances. The ~~goodwill is not expected to be deductible for income tax purposes and is primarily attributable to the expected value to be achieved from the acquisition. The~~ intangible assets that have been acquired are being amortized over ~~a period~~periods of 17 to 19 years.

1114

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WESTLAKE ~~CHEMICAL~~ CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)

(in millions of dollars, except share amounts and per share data)

3. Financial Instruments

Restricted Cash and Cash Equivalents

The Company had restricted cash and cash equivalents of ~~$39~~$28 and ~~$24~~$33 at September 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively. The Company's restricted cash and cash equivalents are primarily related to balances that are restricted for payment of distributions to certain of the Company's current and former employees. In addition, the Company's restricted cash and cash equivalents include RS ~~Cogen's~~Cogen, L.L.C. ("RS Cogen") cash that is restricted under its senior credit facility. Restricted cash and cash equivalents are reflected primarily in other assets, net in the consolidated balance sheets.

4. Accounts Receivable

Accounts receivable consist of the following:


		September 30, 2021		December 31, 2020			September 30, 2022		December 31, 2021
Trade customers	Trade customers	$	1,553	$	1,086	Trade customers	$	2,001	$	1,764
Related parties	Related parties	2		9		Related parties	3		3
Allowance for credit losses	Allowance for credit losses	(23)		(17)		Allowance for credit losses	(36)		(26)
		1,532		1,078			1,968		1,741
Federal and state taxes	Federal and state taxes	49		92		Federal and state taxes	124		62
Other	Other	61		44		Other	89		65
Accounts receivable, net	Accounts receivable, net	$	1,642	$	1,214	Accounts receivable, net	$	2,181	$	1,868

5. Inventories

Inventories consist of the following:


		September 30, 2021		December 31, 2020			September 30, 2022		December 31, 2021
Finished products	Finished products	$	639	$	524	Finished products	$	1,285	$	842
Feedstock, additives, chemicals and other raw materials	Feedstock, additives, chemicals and other raw materials	316		227		Feedstock, additives, chemicals and other raw materials	530		374
Materials and supplies	Materials and supplies	169		167		Materials and supplies	209		191
Inventories	Inventories	$	1,124	$	918	Inventories	$	2,024	$	1,407

6. Goodwill

The gross carrying amounts and changes in the carrying amount of goodwill for the nine months ended September 30, ~~2021~~2022 were as follows:

Vinyls Segment Olefins Segment Total
Balances at December 31, 2020 $ 1,053 $ 30 $ 1,083
Goodwill acquired during the period 172 — 172
Effects of changes in foreign exchange rates (2) — (2)
Balances at September 30, 2021 $ 1,223 $ 30 $ 1,253

The Company performed its annual impairment analysis for the Vinyls reporting units during the second quarter of 2021 and determined that it is more likely than not that the fair value of each of the Vinyls reporting units exceeds its carrying value. Factors considered in the qualitative assessment included macroeconomic conditions, industry and market considerations, cost factors, current and projected financial performance, changes in management or strategy and market capitalization.


	Performance and Essential Materials Segment		Housing and Infrastructure Products Segment		Total
Balances at December 31, 2021	$	902	$	1,122	$	2,024
Goodwill acquired during the period	119		—		119
Measurement period adjustments	9		16		25
Effects of changes in foreign exchange rates	(17)		(8)		(25)
Balances at September 30, 2022	$	1,013	$	1,130	$	2,143

1215

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WESTLAKE ~~CHEMICAL~~ CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)

(in millions of dollars, except share amounts and per share data)

7. Accounts Payable

Accounts payable consist of the following:


		September 30, 2021		December 31, 2020			September 30, 2022		December 31, 2021
Accounts payable—third parties	Accounts payable—third parties	$	687	$	529	Accounts payable—third parties	$	971	$	849
Accounts payable to related parties	Accounts payable to related parties	17		—		Accounts payable to related parties	21		15
Notes payable	Notes payable	14		7		Notes payable	2		15
Accounts payable	Accounts payable	$	718	$	536	Accounts payable	$	994	$	879

1316

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WESTLAKE ~~CHEMICAL~~ CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)

(in millions of dollars, except share amounts and per share data)

8. Long-Term Debt

Long-term debt consists of the following:


		September 30, 2021						December 31, 2020							September 30, 2022						December 31, 2021
		Principal Amount		Unamortized Discount and Debt Issuance Costs		Net Long-term Debt		Principal Amount		Unamortized Discount and Debt Issuance Costs		Net Long-term Debt			Principal Amount		Unamortized Discount and Debt Issuance Costs		Net Long-term Debt		Principal Amount		Unamortized Discount and Debt Issuance Costs		Net Long-term Debt
3.60% senior notes due 2022 (the "3.60% 2022 Senior Notes")	3.60% senior notes due 2022 (the "3.60% 2022 Senior Notes")	$	250	$	—	$	250	$	250	$	(1)	$	249	3.60% senior notes due 2022 (the "3.60% 2022 Senior Notes")	$	—	$	—	$	—	$	250	$	—	$	250
0.875% senior notes due 2024 (the "0.875% 2024 Senior Notes")	0.875% senior notes due 2024 (the "0.875% 2024 Senior Notes")	300		(2)		298		—		—		—		0.875% senior notes due 2024 (the "0.875% 2024 Senior Notes")	300		(2)		298		300		(2)		298
3.60% senior notes due 2026 (the "3.60% 2026 Senior Notes")	3.60% senior notes due 2026 (the "3.60% 2026 Senior Notes")	750		(6)		744		750		(6)		744		3.60% senior notes due 2026 (the "3.60% 2026 Senior Notes")	750		(4)		746		750		(5)		745
Loan related to tax-exempt waste disposal revenue bonds due 2027	Loan related to tax-exempt waste disposal revenue bonds due 2027	11		0		11		11		—		11		Loan related to tax-exempt waste disposal revenue bonds due 2027	11		—		11		11		—		11
1.625% senior notes due 2029 (the "1.625% 2029 Senior Notes")	1.625% senior notes due 2029 (the "1.625% 2029 Senior Notes")	811		(9)		802		859		(10)		849		1.625% senior notes due 2029 (the "1.625% 2029 Senior Notes")	686		(7)		679		794		(8)		786
3.375% senior notes due 2030 (the "3.375% 2030 Senior Notes")	3.375% senior notes due 2030 (the "3.375% 2030 Senior Notes")	300		(4)		296		300		(4)		296		3.375% senior notes due 2030 (the "3.375% 2030 Senior Notes")	300		(3)		297		300		(4)		296
3.50% senior notes due 2032 (the "3.50% 2032 GO Zone Refunding Senior Notes")	3.50% senior notes due 2032 (the "3.50% 2032 GO Zone Refunding Senior Notes")	250		(1)		249		250		(1)		249		3.50% senior notes due 2032 (the "3.50% 2032 GO Zone Refunding Senior Notes")	250		(1)		249		250		(1)		249
2.875% senior notes due 2041 (the "2.875% 2041 Senior Notes")	2.875% senior notes due 2041 (the "2.875% 2041 Senior Notes")	350		(11)		339		—		—		—		2.875% senior notes due 2041 (the "2.875% 2041 Senior Notes")	350		(11)		339		350		(11)		339
5.0% senior notes due 2046 (the "5.0% 2046 Senior Notes")	5.0% senior notes due 2046 (the "5.0% 2046 Senior Notes")	700		(22)		678		700		(23)		677		5.0% senior notes due 2046 (the "5.0% 2046 Senior Notes")	700		(21)		679		700		(22)		678
4.375% senior notes due 2047 (the "4.375% 2047 Senior Notes")	4.375% senior notes due 2047 (the "4.375% 2047 Senior Notes")	500		(8)		492		500		(9)		491		4.375% senior notes due 2047 (the "4.375% 2047 Senior Notes")	500		(8)		492		500		(8)		492
3.125% senior notes due 2051 (the "3.125% 2051 Senior Notes")	3.125% senior notes due 2051 (the "3.125% 2051 Senior Notes")	600		(23)		577		—		—		—		3.125% senior notes due 2051 (the "3.125% 2051 Senior Notes")	600		(22)		578		600		(23)		577
3.375% senior notes due 2061 (the "3.375% 2061 Senior Notes")	3.375% senior notes due 2061 (the "3.375% 2061 Senior Notes")	450		(19)		431		—		—		—		3.375% senior notes due 2061 (the "3.375% 2061 Senior Notes")	450		(18)		432		450		(19)		431
8.73% RS Cogen debt due 2022 (the "8.73% 2022 RS Cogen Debt")	8.73% RS Cogen debt due 2022 (the "8.73% 2022 RS Cogen Debt")	24		0		24		—		—		—		8.73% RS Cogen debt due 2022 (the "8.73% 2022 RS Cogen Debt")	6		—		6		19		—		19
Term loans due 2026 (the "2026 Term Loans")	Term loans due 2026 (the "2026 Term Loans")	6		—		6		—		—		—		Term loans due 2026 (the "2026 Term Loans")	13		—		13		9		—		9
Total long-term debt	Total long-term debt	5,302		(105)		5,197		3,620		(54)		3,566		Total long-term debt	4,916		(97)		4,819		5,283		(103)		5,180
Less current portion:	Less current portion:													Less current portion:
3.60% 2022 Senior Notes	3.60% 2022 Senior Notes	(250)		—		(250)		—		—		—		3.60% 2022 Senior Notes	—		—		—		(250)		—		(250)
8.73% 2022 RS Cogen Debt	8.73% 2022 RS Cogen Debt	(18)		—		(18)		—		—		—		8.73% 2022 RS Cogen Debt	(6)		—		(6)		(19)		—		(19)
Long-term debt, net of current portion	Long-term debt, net of current portion	$	5,034	$	(105)	$	4,929	$	3,620	$	(54)	$	3,566	Long-term debt, net of current portion	$	4,910	$	(97)	$	4,813	$	5,014	$	(103)	$	4,911

Unamortized debt issuance costs on long-term debt were ~~$43~~$41 and ~~$28~~$42 at September 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively.

As of September 30, ~~2021,~~2022, the Company was in compliance with all of its long-term debt covenants.

1417

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WESTLAKE ~~CHEMICAL~~ CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)

(in millions of dollars, except share amounts and per share data)

New Credit Agreement

~~The~~On June 9, 2022, the Company ~~has~~entered into a ~~$1,000~~new $1,500 revolving credit facility that is scheduled to mature on ~~July 24, 2023~~June 9, 2027 (the ~~"Credit~~"New Credit Agreement"). and, in connection therewith, terminated the Company's existing revolving credit agreement. The New Credit Agreement bears interest at either (a) ~~LIBOR~~Adjusted Term Secured Overnight Financing Rate (as defined in the New Credit Agreement) plus a ~~spread~~margin ranging from ~~1.00%~~1.000% to ~~1.75%~~1.625% per annum or (b) Alternate Base Rate (as defined in the New Credit Agreement) plus a ~~spread~~margin ranging from ~~0.00%~~0.000% to ~~0.75%~~0.625% per annum, in each case depending on the credit rating of the Company. At September 30, 2021, the Company had no borrowings outstanding under the Credit Agreement. As of September 30, 2021, the Company had no outstanding letters of credit and had $1,000 of borrowing availability under the Credit Agreement. The New Credit Agreement contains certain affirmative and negative covenants, including a quarterly total leverage ratio financial maintenance covenant. As of September 30, ~~2021,~~2022, the Company was in compliance with the total leverage ratio financial maintenance covenant. The New Credit Agreement also contains certain events of default and, if and for so long as certain events of default have occurred and are continuing, any overdue amounts outstanding under the New Credit Agreement will accrue interest at an increased rate, the lenders can terminate their commitments to lend thereunder and payments of any outstanding amounts thereunder could be accelerated by the lenders. None of the Company's subsidiaries are required to guarantee the obligations of the Company under the New Credit Agreement.

The New Credit Agreement includes a $150 sub-limit for letters of credit, and any outstanding letters of credit will be deducted from availability under the facility. The New Credit Agreement also provides for a discretionary $50 commitment for swingline loans to be provided on a same-day basis. The Company may also increase the size of the facility, in increments of at least $25, up to a maximum of $500, subject to certain conditions and if certain lenders agree to commit to such an ~~increase~~.increase.

As of September 30, 2022, the Company had no borrowings and no letters of credit outstanding, and had borrowing availability of $1,500, under the New Credit Agreement.

Redemption of 3.60% Senior Notes ~~Offering~~Due 2022

~~On August 19, 2021,~~During April 2022, the Company ~~completed~~provided notice to the ~~registered public offering~~trustee of ~~$300 aggregate~~the 3.60% 2022 Senior Notes that the Company had elected to redeem all of the outstanding 3.60% 2022 Senior Notes on May 14, 2022 (the "Redemption Date") pursuant to its optional redemption right under the indenture governing the 3.60% 2022 Senior Notes. The 3.60% 2022 Senior Notes were redeemed on May 14, 2022. The redemption price was equal to 100% of the principal amount of 0.875% senior notes due 2024 (the “0.875% 2024 Senior Notes”), $350 aggregate principal amount of 2.875% senior notes due 2041 (the “2.875% 2041 Senior Notes”), $600 aggregate principal amount of 3.125% senior notes due 2051 (the “3.125% 2051 Senior Notes”) and $450 aggregate principal amount of 3.375% senior notes due 2061 (the “3.375% 2061 Senior Notes” and, together with the ~~0.875% 2024~~3.60% 2022 Senior Notes, plus accrued and unpaid interest on the ~~2.875% 2041~~3.60% 2022 Senior Notes ~~and~~to the 3.125% 2051 Senior Notes, the “Notes”). There is no sinking fund and no scheduled amortization of each series of Notes prior to maturity of such respective series. The 0.875% 2024 Senior Notes will accrue interest at a rate of 0.875% per annum, the 2.875% 2041 Senior Notes will accrue interest at a rate of 2.875% per annum, the 3.125% 2051 Senior Notes will accrue interest at a rate of 3.125% per annum and the 3.375% 2061 Senior Notes will accrue interest at a rate of 3.375% per annum. Interest on each series of Notes will accrue from August 19, 2021 and will be payable semi-annually in arrears on February 15 and August 15 of each year, beginning February 15, 2022. The indenture and supplemental indenture governing the Notes contain customary events of default and covenants that restrict the Company and certain of its subsidiaries’ ability to (1) incur certain secured indebtedness, (2) engage in certain sale-leaseback transactions and (3) consolidate, merge or transfer all or substantially all of its assets. The Company may optionally redeem each series of Notes in accordance with the terms of such series of Notes. The Notes are unsecured and none of the Company's subsidiaries have guaranteed any series of the Notes.Redemption Date.

~~8.73% 2022 RS Cogen Debt~~

In July 2000, RS Cogen, our 50%-owned joint venture, entered into a $75 aggregate principal amount senior credit facility institutional loan at an interest rate of 8.73%. All of the assets of RS Cogen are pledged as collateral under its senior credit facility. Borrowings under this senior credit facility are repayable quarterly by September 2022. The Company does not guarantee RS Cogen's debt commitments and RS Cogen is not a guarantor for any of the Company's other long-term debt obligations.

~~2026 Term Loans~~

In March 2021, Taiwan Chlorine Industries, Ltd., our 60%-owned joint venture, entered into five-year loan agreements for a maximum total limit of approximately $23. The interest rate on these loans at September 30, 2021 was 0.20%. The unsecured loans include a government rate subsidy and have a 5-year maturity.

~~Table of Contents~~

~~WESTLAKE CHEMICAL CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued~~

~~(Unaudited)~~

~~(in millions of dollars, except share amounts and per share data)~~

9. Accumulated Other Comprehensive Income (Loss)

Changes in accumulated other comprehensive income (loss) by component for the nine months ended September 30, ~~2021~~2022 and ~~2020~~2021 were as follows:

Pension and Other Post-Retirement Benefits
Liability,
Net of Tax Cumulative
Foreign
Currency
Exchange,
Net of Tax Total
Balances at December 31, 2020 $ (24) $ (40) $ (64)
Other comprehensive loss attributable to Westlake Chemical Corporation — (11) (11)
Balances at September 30, 2021 $ (24) $ (51) $ (75)
Balances at December 31, 2019 $ 3 $ (77) $ (74)
Other comprehensive income attributable to Westlake Chemical Corporation — 5 5
Balances at September 30, 2020 $ 3 $ (72) $ (69)


	Pension and Other Post-Retirement Benefits Liability, Net of Tax		Cumulative Foreign Currency Exchange, Net of Tax		Total
Balances at December 31, 2021	$	20	$	(56)	$	(36)
Other comprehensive gain (loss) attributable to Westlake Corporation	1		(196)		(195)
Balances at September 30, 2022	$	21	$	(252)	$	(231)

Balances at December 31, 2020	$	(24)	$	(40)	$	(64)
Other comprehensive loss attributable to Westlake Corporation	—		(11)		(11)
Balances at September 30, 2021	$	(24)	$	(51)	$	(75)

Table of Contents

WESTLAKE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)

(in millions of dollars, except share amounts and per share data)

10. Fair Value Measurements

The Company reports certain assets and liabilities at fair value, which is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). Under the accounting guidance for fair value measurements, inputs used to measure fair value are classified in one of three levels:

Level 1: Quoted market prices in active markets for identical assets or liabilities.

Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data.

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

The Company has financial assets and liabilities subject to fair value measures. These financial assets and liabilities include cash and cash equivalents, accounts receivable, net, accounts payable and long-term debt, all of which are recorded at carrying value. The amounts reported in the consolidated balance sheets for cash and cash equivalents, accounts receivable, net and accounts payable approximate their fair value due to the short maturities of these instruments.

The majority of the Company's long-term debt instruments are publicly-traded. A market approach, based upon quotes from financial reporting services, is used to measure the fair value of the Company's long-term debt. Because the Company's long-term debt instruments may not be actively traded, the inputs used to measure the fair value of the Company's long-term debt are classified as Level 2 inputs within the fair value hierarchy.

The carrying and fair values of the Company's total long-term debt are summarized in the table below.

~~Table of Contents~~

~~WESTLAKE CHEMICAL CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued~~

~~(Unaudited)~~

~~(in millions of dollars, except share amounts and per share data)~~


		September 30, 2021				December 31, 2020					September 30, 2022				December 31, 2021
		Carrying Value		Fair Value		Carrying Value		Fair Value			Carrying Value		Fair Value		Carrying Value		Fair Value
3.60% 2022 Senior Notes	3.60% 2022 Senior Notes	$	250	$	254	$	249	$	259	3.60% 2022 Senior Notes	$	—	$	—	$	250	$	252
0.875% 2024 Senior Notes	0.875% 2024 Senior Notes	298		301		—		—		0.875% 2024 Senior Notes	298		280		298		287
3.60% 2026 Senior Notes	3.60% 2026 Senior Notes	744		825		744		846		3.60% 2026 Senior Notes	746		699		745		805
Loan related to tax-exempt waste disposal revenue bonds due 2027	Loan related to tax-exempt waste disposal revenue bonds due 2027	11		11		11		11		Loan related to tax-exempt waste disposal revenue bonds due 2027	11		11		11		11
1.625% 2029 Senior Notes	1.625% 2029 Senior Notes	802		860		849		897		1.625% 2029 Senior Notes	679		518		786		824
3.375% 2030 Senior Notes	3.375% 2030 Senior Notes	296		325		296		332		3.375% 2030 Senior Notes	297		254		296		319
3.50% 2032 GO Zone Refunding Senior Notes	3.50% 2032 GO Zone Refunding Senior Notes	249		276		249		276		3.50% 2032 GO Zone Refunding Senior Notes	249		223		249		271
2.875% 2041 Senior Notes	2.875% 2041 Senior Notes	339		337		—		—		2.875% 2041 Senior Notes	339		222		339		339
5.0% 2046 Senior Notes	5.0% 2046 Senior Notes	678		872		677		905		5.0% 2046 Senior Notes	679		586		678		885
4.375% 2047 Senior Notes	4.375% 2047 Senior Notes	492		577		491		597		4.375% 2047 Senior Notes	492		380		492		592
3.125% 2051 Senior Notes	3.125% 2051 Senior Notes	577		571		—		—		3.125% 2051 Senior Notes	578		369		577		582
3.375% 2061 Senior Notes	3.375% 2061 Senior Notes	431		427		—		—		3.375% 2061 Senior Notes	432		262		431		432
8.73% 2022 RS Cogen Debt	8.73% 2022 RS Cogen Debt	24		24		—		—		8.73% 2022 RS Cogen Debt	6		6		19		19
2026 Term Loans	2026 Term Loans	6		6		—		—		2026 Term Loans	13		13		9		9

11. Income Taxes

The effective income tax rate was ~~an expense of~~16.9% for the three months ended September 30, 2022 as compared to 23.7% for the three months ended September 30, ~~2021 as compared to a benefit of 27.8%~~2021. The effective income tax rate for the three months ended September 30, ~~2020.~~2022 was below the statutory rate of 21.0% primarily due to an increase in U.S. federal research and development credits available to the Company. The effective income tax rate for the three months ended September 30, 2021 was above the statutory rate of 21.0% primarily due to state and foreign taxes. The effective income tax rate for the three months ended September 30, 2020 was a benefit and below the statutory rate of 21.0% primarily due to the income tax rate benefit resulting from the carryback of additional federal net operating loss ("NOL") to taxable years that were taxed at the U.S. corporate tax rate of 35.0% as permitted under the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act"), partially offset by the reduction in the Internal Revenue Code Section 199 ("Section 199") domestic manufacturing deduction as a result of the NOL carryback.

The effective income tax rate was ~~an expense of~~22.4% for the nine months ended September 30, 2022 as compared to 23.1% for the nine months ended September 30, ~~2021 as compared to a benefit of 42.9% for the nine months ended September 30, 2020.~~2021. The effective income tax rate for the nine months ended September 30, 2022 and September 30, 2021 was above the statutory rate of 21.0% primarily due to state and foreign taxes. The effective income tax rate for the nine months ended September 30, 2020 was a benefit and below the statutory rate of 21.0% primarily due to the income tax rate benefit resulting from the carryback of federal NOL to taxable years that were taxed at the U.S. corporate tax rate of 35.0% as permitted under the CARES Act, partially offset by the reduction in the Section 199 domestic manufacturing deduction as a result of the NOL carryback, the depletion deduction, the foreign earnings rate differential and the state income tax benefit.

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WESTLAKE ~~CHEMICAL~~ CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)

(in millions of dollars, except share amounts and per share data)

12. Earnings and Dividends per Share

Earnings per Share

The Company has unvested restricted stock units outstanding that are considered participating securities and, therefore, computes basic and diluted earnings per share under the two-class method. Basic earnings per share for the periods are based upon the weighted average number of shares of common stock outstanding during each period. Diluted earnings per share include the effects of certain stock options and performance stock units.


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2021		2020		2021		2020			2022		2021		2022		2021
Net income attributable to Westlake Chemical Corporation		$	607	$	57	$	1,371	$	217
Net income attributable to Westlake Corporation										Net income attributable to Westlake Corporation	$	401	$	607	$	2,015	$	1,371
Less:	Less:									Less:
Net income attributable to participating securities	Net income attributable to participating securities	(3)		—		(7)		(1)		Net income attributable to participating securities	(2)		(3)		(10)		(7)
Net income attributable to common shareholders	Net income attributable to common shareholders	$	604	$	57	$	1,364	$	216	Net income attributable to common shareholders	$	399	$	604	$	2,005	$	1,364

The following table reconciles the denominator for the basic and diluted earnings per share computations shown in the consolidated statements of operations:


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2021		2020		2021		2020			2022		2021		2022		2021
Weighted average common shares—basic	Weighted average common shares—basic	128,060,193		127,701,340		128,053,337		127,872,434		Weighted average common shares—basic	127,943,400		128,060,193		128,118,160		128,053,337
Plus incremental shares from:	Plus incremental shares from:									Plus incremental shares from:
Assumed exercise of options and vesting of performance stock units	Assumed exercise of options and vesting of performance stock units	705,621		252,567		656,760		200,632		Assumed exercise of options and vesting of performance stock units	803,612		705,621		885,590		656,760
Weighted average common shares—diluted	Weighted average common shares—diluted	128,765,814		127,953,907		128,710,097		128,073,066		Weighted average common shares—diluted	128,747,012		128,765,814		129,003,750		128,710,097

Earnings per common share attributable to Westlake Chemical Corporation:
Earnings per common share attributable to Westlake Corporation:										Earnings per common share attributable to Westlake Corporation:
Basic	Basic	$	4.71	$	0.45	$	10.65	$	1.69	Basic	$	3.12	$	4.71	$	15.65	$	10.65
Diluted	Diluted	$	4.69	$	0.45	$	10.60	$	1.69	Diluted	$	3.10	$	4.69	$	15.54	$	10.60

Excluded from the computation of diluted earnings per share are options to purchase ~~426,918~~587,530 and ~~1,298,659~~426,918 shares of common stock for the three months ended September 30, ~~2021~~2022 and ~~2020,~~2021, respectively; and ~~476,162~~303,878 and ~~1,234,126~~476,162 shares of common stock for the nine months ended September 30, ~~2021~~2022 and ~~2020,~~2021, respectively. These options were outstanding during the periods reported but were excluded because the effect of including them would have been antidilutive.

Dividends per Share

Dividends per common share for the three and nine months ended September 30, ~~2021~~2022 and ~~2020~~2021 were as follows:
Three Months Ended September 30, Nine Months Ended September 30,
2021 2020 2021 2020
Dividends per common share $ 0.2975 $ 0.2700 $ 0.8375 $ 0.7950

~~13. Supplemental Information~~

~~Equity Method Investments~~

~~LACC, LLC~~

The Company's investment in LACC, LLC ("LACC"), a related party, was $947 and $961 at September 30, 2021 and December 31, 2020, respectively. The Company made capital contributions to LACC of $10 and $17 during the three and nine months ended September 30, 2021, respectively.


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Dividends per common share	$	0.3570	$	0.2975	$	0.9520	$	0.8375

1820

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WESTLAKE ~~CHEMICAL~~ CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)

(in millions of dollars, except share amounts and per share data)

13. Supplemental Information

Equity Method Investments

LACC, LLC Joint Venture

On March 15, 2022, the Company completed the acquisition of an additional 3.2% of the membership interests in LACC, LLC ("LACC"), from Lotte Chemical Corporation for $89. The Company accounts for its investment in LACC under the equity method of accounting and changes for the nine months ended September 30, 2022 were as follows:


	Investment in LACC





Balance at December 31, 2021	$	943
Cash contributions	87
Additional interest purchased	89
Depreciation and amortization	(32)

Balance at September 30, 2022	$	1,087

Other Assets, Net

Other assets, net were $575 and $417 at September 30, 2022 and December 31, 2021, respectively. Deferred turnaround costs, net of accumulated amortization, included in other assets, net were $343 and $261 at September 30, 2022 and December 31, 2021, respectively.

Accrued and Other Liabilities

Accrued and other liabilities were ~~$912~~$1,461 and ~~$821~~$1,196 at September 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively. Accrued rebates ~~a component~~and accrued income taxes, which are components of accrued and other liabilities, ~~was $152~~were $234 and $141, respectively, at September 30, ~~2021,~~2022 and ~~$128~~$213 and $88, respectively, at December 31, ~~2020.~~2021. No other component of accrued and other liabilities was more than five percent of total current liabilities. Accrued liabilities with related parties were ~~$30~~$39 and ~~$61~~$49 at September 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively.

Restructuring, Transaction and Integration-Related Costs

~~For~~The restructuring, transaction and integration-related costs of $6 for the three months ended September 30, 2022 and $24 for the nine months ended September 30, 2022, and of $6 for the three and nine months ended September 30, 2021, ~~the restructuring, transaction and integration-related costs of $6~~ primarily consisted of ~~integration-related consulting fees and~~ costs associated with the Company's recent acquisitions. ~~For~~

Non-cash Investing Activity

Capital expenditure related liabilities, included in accounts payable and accrued and other liabilities, were $149 and $74at September 30, 2022 and September 30, 2021, respectively.

Operating Lease Supplemental Cash Flow

Right-of-use assets obtained in exchange for operating lease obligations were $138 and $63 for the ~~three and~~ nine months ended September 30, ~~2020, the restructuring, transaction~~2022 and ~~integration-related costs~~2021, respectively.

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WESTLAKE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)

(in millions of dollars, except share amounts and ~~$36, respectively, primarily consisted of restructuring expenses related to the closure of a non-integrated plant located in Germany.~~per share data)

~~Non-cash Investing Activity~~

~~The change in capital expenditure accruals increasing additions to property, plant and equipment was $14~~ ~~and~~ ~~$49~~ ~~for the nine months ended September 30, 2021 and 2020, respectively.~~

14. Commitments and Contingencies

The Company is involved in a number of legal and regulatory matters, principally environmental in nature, that are incidental to the normal conduct of its business, including lawsuits, investigations and claims. The outcome of these matters are inherently unpredictable. The Company believes that, in the aggregate, the outcome of all known legal and regulatory matters will not have a material adverse effect on its consolidated financial statements; however, under certain circumstances, if required to recognize costs in a specific period, when combined with other factors, outcomes with respect to such matters may be material to the Company's consolidated statements of operations in such period. The Company's assessment of the potential impact of environmental matters, in particular, is subject to uncertainty due to the complex, ongoing and evolving process of investigation and remediation of such environmental matters, and the potential for technological and regulatory developments. In addition, the impact of evolving claims and programs, such as natural resource damage claims, industrial site reuse initiatives and state remediation programs creates further uncertainty of the ultimate resolution of these matters. The Company anticipates that the resolution of many legal and regulatory matters, and in particular environmental matters, will occur over an extended period of time.

Antitrust Proceedings. The Company and other caustic soda producers were named as defendants in multiple purported class action civil lawsuits filed since March 2019 in the U.S. District Court for the Western District of New York. The lawsuits allege the defendants conspired to fix, raise, maintain and stabilize the price of caustic soda, restrict domestic (U.S.) supply of caustic soda and allocate caustic soda customers. The other defendants named in the lawsuits are Olin Corporation, K.A. Steel Chemicals (a wholly-owned subsidiary of Olin), Occidental ~~Petroleum Corporation, Occidental~~ Chemical Corporation d/b/a OxyChem, ~~Shin-Etsu Chemical Co., Ltd.,~~ Shintech Incorporated, ~~Formosa Plastics Corporation,~~ and Formosa Plastics Corporation, U.S.A. Each of the lawsuits is filed on behalf of the respective named plaintiff or plaintiffs and a putative class comprised of either direct purchasers or indirect purchasers of caustic soda in the U.S. The plaintiffs in the putative class for such direct purchasers seek ~~an unspecified amount of~~$861 in single damages from the defendants, in addition to treble damages and attorney's fees. The plaintiffs in the putative class for such indirect purchasers seek approximately $500 in single damages from the defendants, in addition to treble damages (if permitted under applicable state law) and injunctive relief. The defendants' joint motion to dismiss the direct purchaser lawsuits was denied and the cases have proceeded to discovery. Beginning in October 2020, similar class action proceedings were also filed in Canada before the Superior Court of Quebec as well as before the Federal Court. These proceedings seek the certification or authorization of a class action on behalf of all residents of Canada who purchased caustic soda (including, in one of the cases, those who merely purchased products containing caustic soda) from October 1, 2015 through the present or such date deemed appropriate by the court. On December 10, 2021, the Superior Court of Quebec stayed its proceedings until after a final certification decision is released in the Federal Court proceedings. At this time, the Company is not able to estimate the impact, if any, that these lawsuits could have on the Company's consolidated financial statements either in the current period or in future periods.

Environmental. As of September 30, ~~2021~~2022 and December 31, ~~2020,~~2021, the Company had reserves for environmental contingencies totaling approximately $55 and ~~$53,~~$56, respectively, most of which was classified as noncurrent liabilities. The Company's assessment of the potential impact of these environmental contingencies is subject to considerable uncertainty due to the complex, ongoing and evolving process of investigation and remediation, if necessary, of such environmental contingencies, and the potential for technological and regulatory developments.

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WESTLAKE ~~CHEMICAL~~ CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)

(in millions of dollars, except share amounts and per share data)

Calvert City Proceedings. For several years, the Environmental Protection Agency (the "EPA") has been conducting remedial investigation and feasibility studies at the Company's Calvert City, Kentucky facility pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 ("CERCLA"). As the current owner of the Calvert City facility, the Company was named by the EPA as a potentially responsible party ("PRP") along with Goodrich Corporation ("Goodrich") and its successor-in-interest, Avient Corporation (formerly known as PolyOne Corporation, "Avient"). On November 30, 2017, the EPA published a draft Proposed Plan, incorporating by reference an August 2015 draft Remedial Investigation ("RI") report, an October 2017 draft Feasibility Study ("FS") report and a Technical Impracticability Waiver document dated December 19, 2017. On June 18, 2018, the EPA published an amendment to its Proposed Plan. The amended Proposed Plan describes a final remedy for the onshore portion of the site comprised of a containment wall, targeted treatment and supplemental hydraulic containment. The amended Proposed Plan also describes an interim approach to address the contamination under the river that would include recovery of any mobile contaminants by an extraction well along with further study of the extent of the contamination and potential treatment options. The EPA's estimated cost of implementation is $107, with an estimated $1 to $3 in annual operation and maintenance ("O&M") costs. In September 2018, the EPA published the Record of Decision ("ROD") for the site, formally selecting the preferred final and interim remedies outlined in the amended Proposed Plan. In October 2018, the EPA issued Special Notice letters to the PRPs for the remedial design phase of work under the ROD. In April 2019, the PRPs and the EPA entered into an administrative settlement agreement and order on consent for remedial design. In October 2019, the PRPs received special notice letters for the remedial action phase of work at the site. The Company, jointly with the other PRPs, submitted a good faith offer response in December 2019. On September 17, 2020, the EPA and the Department of Justice filed a proposed consent decree for the remedial action with the U.S. District Court for the Western District of Kentucky. On November 16, 2020, the Department of Justice filed a motion to approve and enter the consent decree. On January 28, 2021, the Court granted the unopposed motion to enter the consent decree, which became effective the same day. The Company's allocation of liability for remedial and O&M costs at the Calvert City site, if any, is governed by a series of agreements between the Company, Goodrich and Avient. These agreements and the associated litigation are described below.

In connection with the 1990 and 1997 acquisitions of the Goodrich chemical manufacturing complex in Calvert City, Goodrich agreed to indemnify the Company for any liabilities related to preexisting contamination at the complex. For its part, the Company agreed to indemnify Goodrich for post-closing contamination caused by the Company's operations. The soil and groundwater at the complex, which does not include the Company's nearby PVC facility, had been extensively contaminated by Goodrich's operations. In 1993, Goodrich spun off the predecessor of Avient, and that predecessor assumed Goodrich's indemnification obligations relating to preexisting contamination. In 2003, litigation arose among the Company, Goodrich and Avient with respect to the allocation of the cost of remediating contamination at the site. The parties settled this litigation in December 2007 and the case was dismissed. In the settlement, the parties agreed that, among other things: (1) Avient would pay 100% of the costs (with specified exceptions), net of recoveries or credits from third parties, incurred with respect to environmental issues at the Calvert City site from August 1, 2007 forward; and (2) either the Company or Avient might, from time to time in the future (but not more than once every five years), institute an arbitration proceeding to adjust that percentage. In May 2017, Avient filed a demand for arbitration. In this proceeding, Avient sought to readjust the percentage allocation of future costs and to recover approximately $11 from the Company in reimbursement of previously paid remediation costs. The Company's cross demand for arbitration seeking unreimbursed remediation costs incurred during the relevant period was dismissed from the proceedings when Avient paid such costs in full at the beginning of the arbitration hearing.

On July 10, 2018, Avient sued the Company in the U.S. District Court for the Western District of Kentucky and sought to invalidate the arbitration provisions in the parties' 2007 settlement agreement and enjoin the arbitration it had initiated in 2017. On July 30, 2018, the district court refused to enjoin the arbitration and, on January 15, 2019, the court granted the Company's motion to dismiss Avient's suit. On February 13, 2019, Avient appealed those decisions to the U.S. Court of Appeals for the Sixth Circuit. The court of appeals issued an opinion and final order on September 6, 2019, affirming the district court.

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~~WESTLAKE CHEMICAL CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued~~

~~(Unaudited)~~

~~(in millions of dollars, except share amounts and per share data)~~

The arbitration hearing began in August 2018 and concluded in December 2018. On May 22, 2019, the arbitration panel issued its final award. It determined that Avient was responsible for 100% of the allocable costs at issue in the proceeding and that Avient would remain responsible for 100% of the costs to operate the existing groundwater remedy at the Calvert City site. In August 2019, Avient filed a motion to vacate before the U.S. District Court for the Western District of Kentucky, seeking to invalidate the final award under the Federal Arbitration Act. On February 11, 2020, the U.S. District Court for the Western District of Kentucky denied Avient's motion to vacate and affirmed the arbitration final award. Avient did not file a notice of appeal before the March 10, 2020 deadline to contest the court's decision. Accordingly, the final award was affirmed and the arbitration proceeding is fully and finally resolved. ~~At this time,~~

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WESTLAKE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)

(in millions of dollars, except share amounts and per share data)

In March 2022, the Company filed a demand for arbitration seeking reimbursement for certain allocable costs incurred during the applicable period since May 2017, and which Avient has failed to pay or disputed as not subject to indemnity under the 1990 and 1997 agreements. In April 2022, Avient filed a complaint in the federal district court for the Western District of Kentucky disputing the enforceability of the 2007 settlement agreement and seeking to enjoin arbitration. Avient claims that the allocable costs at issue are up to $22, for which Avient claims the Company is not able to estimate the impact, if any, that any subsequent arbitration or judicial proceeding could have on the Company's consolidated financial statements either in the current period or in later periods. Any cash expenditures that thetotally liable. The Company ~~might incur in the future with respect to the remediation of contamination~~disputes these claims and at ~~the Calvert City complex would likely be spread out over an extended period. As a result,~~this time, the Company believes it is unlikely that any remediation costs allocable to it ~~will be~~would result in material ~~in terms of~~ expenditures ~~made~~ in any individual reporting period.

Other Matter. In April 2018, Triad Hunter, LLC ("Triad Hunter") filed suit against the Company and certain of its subsidiaries in the Court of Common Pleas in Monroe County, Ohio seeking injunctive relief and alleging negligence and trespass at the Natrium Plant with respect to Triad Hunter's well drilling activities in Ohio. The case was initially dismissed. Triad Hunter appealed the dismissal, and in March 2019, the Court of Appeals in the Seventh Appellate District in Monroe County, Ohio reversed the dismissal. Trial began in October 2022. On October 27, 2022, the jury returned a verdict finding that the Company had committed trespass and was negligent in conducting salt mining operations at the Natrium Plant and awarded damages of approximately $70. No final judgment has yet been entered. The final judgment could include punitive damages, pre-judgment interest, post-judgment interest, and attorneys' fees. If the final judgment orders the Company to pay any amount of damages, the Company will appeal that decision to the Court of Appeals. Upon receipt of the jury verdict, the Company reserved approximately $70, in the quarter ended September 30, 2022, for the damages awarded to Triad Hunter.

Environmental ~~Remediation:~~ Remediation;Reasonably Possible ~~Matters.~~Matters. The Company's assessment of the potential impact of environmental contingencies is subject to considerable uncertainty due to the complex, ongoing and evolving process of investigation and remediation, if necessary, of such environmental contingencies, and the potential for technological and regulatory developments. As such, in addition to the amounts currently reserved, the Company may be subject to reasonably possible loss contingencies related to environmental matters in the range of $65 to $130.

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WESTLAKE ~~CHEMICAL~~ CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)

(in millions of dollars, except share amounts and per share data)

15. Segment Information

The Company ~~operates~~had historically operated in 2two principal operating ~~segments:~~segments, Vinyls and Olefins. During the fourth quarter of 2021, the Company reorganized its business into two principal operating segments, Performance and Essential Materials and Housing and Infrastructure Products. These segments are strategic business units that offer a variety of different materials and products. The Company manages each segment separately as each business requires different technology and marketing strategies. These reporting changes have been retrospectively reflected in the segment results for all periods presented.

Three Months Ended September 30, Nine Months Ended September 30,
2021 2020 2021 2020
Net external sales
Vinyls
PVC, caustic soda and other $ 1,834 $ 1,116 $ 4,950 $ 3,333
Building products 514 413 1,406 1,049
Total Vinyls 2,348 1,529 6,356 4,382
Olefins
Polyethylene 559 302 1,488 914
Styrene, feedstock and other 148 67 427 243
Total Olefins 707 369 1,915 1,157
$ 3,055 $ 1,898 $ 8,271 $ 5,539
Intersegment sales
Vinyls $ — $ — $ — $ 1
Olefins 163 79 447 183
$ 163 $ 79 $ 447 $ 184
Income (loss) from operations
Vinyls $ 601 $ 42 $ 1,236 $ 135
Olefins 281 51 738 138
Corporate and other (21) (14) (47) (22)
$ 861 $ 79 $ 1,927 $ 251
Depreciation and amortization
Vinyls $ 166 $ 160 $ 486 $ 467
Olefins 36 34 109 104
Corporate and other 1 2 5 6
$ 203 $ 196 $ 600 $ 577
Other income, net
Vinyls $ 10 $ 7 $ 27 $ 21
Olefins — 1 2 2
Corporate and other 3 4 6 9
$ 13 $ 12 $ 35 $ 32
Provision for (benefit from) income taxes
Vinyls $ 141 $ (25) $ 279 $ (121)
Olefins 66 4 170 41
Corporate and other (14) 6 (26) 5
$ 193 $ (15) $ 423 $ (75)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Net external sales
Performance and Essential Materials
Performance Materials	$	1,689	$	1,588	$	5,678	$	4,333
Essential Materials	1,022		734		2,969		1,877
Total Performance and Essential Materials	2,711		2,322		8,647		6,210
Housing and Infrastructure Products
Housing Products	1,018		536		3,106		1,491
Infrastructure Products	227		197		742		570
Total Housing and Infrastructure Products	1,245		733		3,848		2,061
	$	3,956	$	3,055	$	12,495	$	8,271

Intersegment sales
Performance and Essential Materials	$	248	$	202	$	788	$	586
Housing and Infrastructure Products	—		—		—		—
	$	248	$	202	$	788	$	586

Income (loss) from operations
Performance and Essential Materials	$	353	$	769	$	2,197	$	1,728
Housing and Infrastructure Products	186		103		607		270
Corporate and other	(23)		(11)		(81)		(71)
	$	516	$	861	$	2,723	$	1,927

Depreciation and amortization
Performance and Essential Materials	$	196	$	168	$	572	$	497
Housing and Infrastructure Products	65		34		206		98
Corporate and other	3		1		7		5
	$	264	$	203	$	785	$	600

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WESTLAKE ~~CHEMICAL~~ CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)

(in millions of dollars, except share amounts and per share data)


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2021		2020		2021		2020			2022		2021		2022		2021
Capital expenditures
Vinyls		$	124	$	94	$	346	$	338
Olefins		19		16		66		60
Other income, net										Other income, net
Performance and Essential Materials										Performance and Essential Materials	$	12	$	9	$	25	$	25
Housing and Infrastructure Products										Housing and Infrastructure Products	3		—		9		4
Corporate and other	Corporate and other	1		2		2		5		Corporate and other	9		4		18		6
		$	144	$	112	$	414	$	403		$	24	$	13	$	52	$	35

Provision for (benefit from) income taxes										Provision for (benefit from) income taxes
Performance and Essential Materials										Performance and Essential Materials	$	40	$	179	$	464	$	388
Housing and Infrastructure Products										Housing and Infrastructure Products	44		25		146		65
Corporate and other										Corporate and other	—		(11)		(18)		(30)
											$	84	$	193	$	592	$	423

Capital expenditures										Capital expenditures
Performance and Essential Materials										Performance and Essential Materials	$	265	$	126	$	678	$	367
Housing and Infrastructure Products										Housing and Infrastructure Products	51		17		126		45
Corporate and other										Corporate and other	2		1		7		2
											$	318	$	144	$	811	$	414

A reconciliation of total segment income from operations to consolidated income before income taxes is as follows:


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2021		2020		2021		2020			2022		2021		2022		2021
Income from operations	Income from operations	$	861	$	79	$	1,927	$	251	Income from operations	$	516	$	861	$	2,723	$	1,927
Interest expense	Interest expense	(61)		(37)		(130)		(108)		Interest expense	(44)		(61)		(134)		(130)
Other income, net	Other income, net	13		12		35		32		Other income, net	24		13		52		35
Income before income taxes	Income before income taxes	$	813	$	54	$	1,832	$	175	Income before income taxes	$	496	$	813	$	2,641	$	1,832


		September 30, 2021		December 31, 2020			September 30, 2022		December 31, 2021
Total assets	Total assets					Total assets
Vinyls		$	11,655	$	10,680
Olefins		2,153		1,923
Performance and Essential Materials						Performance and Essential Materials	$	13,990	$	11,938
Housing and Infrastructure Products						Housing and Infrastructure Products	5,129		5,021
Corporate and other	Corporate and other	3,300		1,232		Corporate and other	1,306		1,500
		$	17,108	$	13,835		$	20,425	$	18,459

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WESTLAKE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)

(in millions of dollars, except share amounts and per share data)

16. Westlake Chemical Partners LP

In 2014, the Company formed Westlake Chemical Partners LP ("Westlake Partners") to operate, acquire and develop ethylene production facilities and related assets. Also in 2014, Westlake Partners completed its initial public offering of 12,937,500 common units.

AtAs of September 30, ~~2021,~~2022, Westlake Partners had a 22.8% limited partner interest in Westlake Chemical OpCo LP ("OpCo"), and the Company retained a 77.2% limited partner interest in OpCo and a significant interest in Westlake Partners through the Company's ownership of Westlake Partners' general partner, 40.1% of the limited partner interests (consisting of 14,122,230 common units) and incentive distribution rights.

On October 4, 2018, Westlake Partners and Westlake Partners GP, the general partner of Westlake Partners, entered into an Equity Distribution Agreement with UBS Securities LLC, Barclays Capital Inc., Citigroup Global Markets Inc., Deutsche Bank Securities Inc., RBC Capital Markets, LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Wells Fargo Securities, LLC to offer and sell Westlake Partners' common units, from time to time, up to an aggregate offering amount of $50. This Equity Distribution Agreement was amended on February 28, 2020 to reference a new shelf registration for utilization under this agreement. No common units were issued under this program as of September 30, ~~2021.~~2022.

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

This discussion and analysis should be read in conjunction with information contained in the accompanying unaudited consolidated interim financial statements of Westlake ~~Chemical~~ Corporation and the notes thereto and the consolidated financial statements and notes thereto of Westlake ~~Chemical~~ Corporation included in Westlake ~~Chemical~~ Corporation's Annual Report on Form 10-K for the fiscal year ended December 31, ~~2020~~2021 (the ~~"2020~~"2021 Form 10-K"). Unless otherwise indicated, references in this report to "we," "our," "us" or like terms refer to Westlake ~~Chemical~~ Corporation ("Westlake" or the "Company"). The following discussion contains forward-looking statements. Please read "Forward-Looking Statements" for a discussion of limitations inherent in such statements.

Overview

We are a ~~vertically-integrated~~vertically integrated global manufacturer and marketer of ~~basic chemicals, vinyls, polymers~~performance and ~~building~~essential materials and housing and infrastructure products. ~~Our~~We operate in two principal operating segments, ~~are~~Performance and Essential Materials and Housing and Infrastructure Products. The Performance and Essential Materials segment includes Westlake North American Vinyls, Westlake North American Chlor-alkali & Derivatives, Westlake European & Asian Chlorovinyls, Westlake Olefins, Westlake Polyethylene and Westlake Epoxy. The Housing and Infrastructure Products segment includes Westlake Royal Building Products, Westlake Pipe & Fittings, Westlake Global Compounds and Westlake Dimex. Prior to our segment reorganization in the fourth quarter of 2021, we operated in two principal operating segments, Vinyls and Olefins. The change has been retrospectively reflected in the periods presented in this Form 10-Q. We ~~use the majority~~are highly integrated along our materials chain with significant downstream integration from ethylene and chlor-alkali (chlorine and caustic soda) into vinyls, polyethylene, epoxy and styrene monomer. We also have substantial downstream integration from polyvinyl chloride ("PVC") into our building products, PVC pipes and fittings and PVC compounds in our Housing and Infrastructure Products segment.

During third quarter 2022, our European businesses continued to be impacted by higher energy prices, inflation and reduced demand. Our North American businesses, where we derive a significant portion of our ~~internally-produced basic chemicals to produce~~revenue, also saw impacts of rising energy costs and interest rates and slowing demand. In the near term, we expect that higher ~~value-added chemicals, polymers~~energy costs, inflation and ~~building products.~~

~~Consumption of the basic chemicals that we manufacture in the commodity portions~~other macroeconomic conditions could reduce margins and demand for most of our ~~vinyls~~products.

Performance and ~~olefins processes has increased significantly since we began operations in 1986.~~ Essential Materials

Our ~~vinyls~~performance and ~~olefins products~~essential materials such as ethylene, PVC, polyethylene, epoxy and chlor-alkali are some of the most widely used ~~chemicals~~materials in the world and are upgraded into a ~~wide~~ variety of higher value-added ~~chemical~~ products used in many end-markets. Westlake is the second-largest chlor-alkali producer and the second-largest PVC producer in the world, which makes Westlake a global leading 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. 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. Due to the significant size of new plants, capacity additions are built in large increments and typically require several years of demand growth to be absorbed. 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 the second-largest chlor-alkali producer and the second-largest PVC producer in the world.~~ Demand for ~~vinyl~~our products in the first half of 2020 was negatively impacted by the onset of the ~~coronavirus ("COVID-19")~~COVID-19 pandemic. Global demand for most of our ~~vinyls~~ products started strengthening in the second half of 2020 and remained strong through the ~~third quarter~~first half of ~~2021,~~2022. However, in the past year, we have seen significant volatility in natural gas, ethane and ~~we expect global~~ethylene prices, primarily due to changes in demand, the timing for ~~most~~certain new ethylene capacity additions, the availability of ~~our vinyls products to remain robust through~~natural gas liquids, and the ~~remainder of 2021~~ongoing conflict between Russia and ~~well into 2022.~~Ukraine. Depending on the performance of the global economy, the timing of resolution of the conflict between Russia and Ukraine, disruption in the global supply chain, volatility in natural gas and electricity prices in Europe and across the world, labor shortages and costs, potential ~~changes in international trade and tariffs policies,~~resurgence of the COVID-19 pandemic, the trend of crude oil prices, ~~the timing of the~~ new ethylene and polyethylene capacity additions in ~~2021~~North America, Asia and the Middle East in the remainder of 2022 and beyond, ~~and~~ the sustainability of the current ~~strong~~ demand for most of our products in this segment, inflationary pressures and concerns over slower future economic growth, including the possibility of recession or financial market instability, our financial condition, results of operations or cash flows could be negatively or positively impacted.

Ethane-based ethylene producers have in the recent past experienced a cost advantage over naphtha-based ethylene producers during periods of higher crude oil prices. This cost advantage has resulted in a strong export market for polyethylene and other ethylene derivatives and has benefited operating margins and cash flows for our Olefins segment during such periods. However, we have seen a significant reduction in the cost advantage enjoyed by North American ethane-based ethylene producers during periods of lower crude oil prices. In the past year, we have seen volatility in ethane and ethylene prices, primarily due to changes in demand resulting from the COVID-19 pandemic, anticipated timing for certain new ethylene capacity additions and availability of natural gas liquids, as well as fluctuation in the price of crude oil. Additionally, we have seen volatility in ethane and ethylene prices in 2021 due to winter storm Uri and Hurricane Ida that resulted in shutdowns of many industry production facilities on the Gulf Coast and delayed or extended the timing of planned turnarounds of various ethylene crackers. Global demand for most of our olefins products started strengthening in the second half of 2020 and remained strong through the third quarter of 2021, and we expect global demand for most of our olefins products to remain robust through the remainder of 2021 and the first half of 2022. However, new ethylene and polyethylene capacity additions in North America, Asia and the Middle East will add additional supply and may contribute to periods of lower profitability in our Olefins segment.

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~~Significant Developments~~On February 1, 2022, we completed the acquisition of Westlake Epoxy for a purchase consideration of $1,207 million. The assets acquired and liabilities assumed and the results of operations of the Westlake Epoxy business are included in the Performance and Essential Materials segment. This acquisition represents a significant strategic expansion of Westlake's Performance and Essential Materials businesses into additional high-growth, innovative and sustainability-oriented applications – such as wind turbine blades and light-weight automotive structural components. We supply epoxy resin systems to composite fabricators in the wind energy, automotive and pipe markets. Epoxy specialty resins are also used for a variety of high-end coating applications that require the superior adhesion, corrosion resistance and durability of epoxy, such as protective coatings for industrial flooring, pipe, marine and construction applications and automotive coatings.

~~COVID-19, Industry Conditions~~As noted in Item 1A, "Risk Factors" in our 2021 Form 10-K, we are subject to extensive environmental regulations, which may impose significant additional costs on our operations in the future. Further, concerns about greenhouse gas emissions and their possible effects on climate change has led to the enactment of regulations, and to proposed legislation and additional regulations, that could affect us in the form of increased cost of feedstocks and fuel, other increased costs of production and decreased demand for our 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.

Housing and Infrastructure Products

Our ~~Business~~

~~On March 11, 2020,~~Housing and Infrastructure Products segment is primarily comprised of building products, PVC pipes and fittings and PVC compound products. Our sales are affected by the ~~World Health Organization declared the ongoing COVID-19 outbreak a pandemic~~individual decisions of distributors and ~~recommended containment and mitigation measures worldwide. The pandemic has resulted in widespread adverse impacts~~dealers on the ~~global economy. We experienced~~levels of inventory they carry, their views on product demand, their financial condition and the manner in which they choose to manage inventory risk. A significant ~~disruptions~~portion of our performance in this segment is driven by the activities in the ~~second quarter of 2020 as~~residential construction and repair and remodeling markets in North America, which began to decline at the pandemic and its impact on the global economy spread through most of our markets. We were designated as an essential industry by many governments based on the nature of the products we manufacture. While demand for some of our products used in cleaning, packaging and medical applications and manufacturing continued to be firm, we expected lower demand for certain of our other products that led us to proactively temporarily idle production at several of our smaller non-integrated plants and reduce operating rates at others in the beginningend of the second quarter of ~~2020. Since the middle~~2022 due to rising mortgage rates. Performance of our housing and infrastructure products businesses over time are generally reflective of the ~~second quarter~~trends of ~~2020,~~building permits and housing starts in the New Residential Construction Survey by the U.S. Census Bureau and the Repair and Remodeling Index provided by the National Association of Home Builders among others. Although we ultimately expect that the Infrastructure Investment and Jobs Act of 2021 and historically low residential housing construction may have a ~~general ease in government restrictions in many jurisdictions across~~favorable long-term impact on certain industries related to our Housing and Infrastructure Products segment, the ~~world has resulted in a gradual increase in~~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 ~~our products. As~~housing and, as a result, ~~all~~our products produced by this segment.

North American PVC facilities within the Performance and Essential Materials segment supply most of the PVC required for our ~~idled plants recommenced production. Except~~building products and PVC pipes and fittings plants. Our raw materials for stone, roofing and accessories, windows, shutters and specialty tool products are externally purchased. PVC required for the ~~impact~~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 ~~winter storm Uri~~plants. The remaining feedstocks required, including pigments, fillers, stabilizers and ~~Hurricane Ida, operating rates have improved for most of our plants since~~other ingredients, are purchased under short-term contracts based on prevailing market prices.

During the ~~second half of 2020 due to continuing increase in demand for our products. Though the government restrictions across the world generally eased through the third~~fourth quarter of 2021, ~~there is considerable uncertainty regarding~~we completed the ~~extent to which COVID-19 will continue to spread and the extent and duration~~acquisition of governmental and other measures implemented to try to slow the spread of the virus. Factors that could impact the spread of COVID-19 include timing and logistics with respect to the distribution of vaccines globally and the efficacy of the available vaccines (including with respect to the more recent variants of COVID-19) and other treatments. We continue to monitor the volatile environment and may reduce operating rates or idle production if the pandemic and its financial impacts persist or worsen. Considering the uncertain and volatile environment, we could continue to experience significant disruptions to our business operations in the near future.

For additional discussion regarding our operations and COVID-19, see Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations in Part II of the 2020 Form 10-K. For additional discussion regarding risks associated with the COVID-19 pandemic, see Item 1A. Risk Factors in Part I of the 2020 Form 10-K.

~~Acquisitions~~

~~Acquisition of Boral Target Companies~~

On June 20, 2021, Royal Building Products (USA) Inc. ("RBP"), one of our wholly-owned subsidiaries, entered into that certain Equity Purchase Agreement (the "Boral Purchase Agreement") by and among Boral Building Products Inc., a Michigan corporation, Boral Stone Products LLC, a Delaware limited liability company, Boral Lifetile Inc., a California corporation, Boral Windows LLC, a Utah limited liability company, Boral Industries Inc., a California corporation ("Boral Industries"), RBP and, solely for the limited purposes set forth therein, Westlake and Boral Limited, an Australian corporation ("Boral"). Pursuant to the terms of the Boral Purchase Agreement, RBP agreed to acquire from Boral Industries 100% of the issued and outstanding equity interests of certain subsidiaries of Boral Industries engaged in Boral's North American building products businesses in roofing, siding, trim and shutters, decorative stone and windows (the "Boral Target Companies") for ~~a purchase price~~$2,140 million. During the third quarter of $2.15 billion in cash, subject to working capital post-closing adjustment, as well as a potential earn-out payment from RBP to Boral Industries of up to $65 million if Boral's windows business generates EBITDA in excess of a specified target in its fiscal year ending June 30, 2024 (the “Boral Acquisition”).

~~On October 1,~~ 2021, we completed the ~~acquisition~~acquisitions of ~~and acquired all of the equity interests in, the Boral Target Companies.~~

~~Other Acquisitions~~

~~LASCO Fittings, Inc~~. On July 4, 2021, North American Pipe Corporation ("NAPCO"), one of our wholly-owned subsidiaries, entered into that certain Equity Purchase Agreement with Aalberts U.S. Holding Corp., a Delaware corporation ("Aalberts") and wholly-owned subsidiary of Aalberts N.V., pursuant to which NAPCO agreed to acquire LASCO Fittings, Inc.~~, a Delaware corporation~~ ("LASCO"), from Aalberts. On August 19, 2021, we completed the acquisition of, and acquired all of the equity interests in, LASCO. The total closing purchase consideration was $277 million (the "LASCO Acquisition"). The assets acquired and liabilities assumed and the results of operations of LASCO are included in the Vinyls segment. LASCO is a manufacturer of injected-molded PVC fittings that serve the plumbing, pool and spa, industrial, irrigation and retail markets in the United ~~States.~~

~~Table of Contents~~

~~Dimex Inc.~~ ~~On August 2, 2021, Rome Delaware Corp. ("Rome"), one of our wholly-owned subsidiaries, entered into that certain Stock Purchase Agreement (the "Dimex Purchase Agreement") with~~States, for $277 million, and DX Acquisition Corp.~~, a Delaware corporation~~ ("Dimex"), each of Dimex's stockholders, and for limited purposes, Westlake and Grey Mountain Partners Fund III Holdings, L.P., pursuant to which Rome agreed to acquire Dimex. On September 10, 2021, we completed the acquisition of, and acquired all of the equity interests in, Dimex. The total closing purchase consideration was $172 million, subject to working capital post-closing adjustments (the "Dimex Acquisition" and, together with the Boral Acquisition and the LASCO Acquisition, the "Acquisitions"). The assets acquired and liabilities assumed and the results of operations of Dimex are included in the Vinyls segment. Dimex is a producer of various consumer products made from post-industrial-recycled ~~polyvinyl chloride,~~PVC, polyethylene and thermoplastic elastomer materials, including, landscape edging; industrial, home and office matting; marine dock edging; and masonry joint ~~controls.~~

~~Senior Notes Offering~~

~~On August 19, 2021, we completed the registered public offering~~controls, for $172 million. The results of $300 million aggregate principal amount of 0.875% senior notes due 2024 (the “0.875% 2024 Senior Notes”), $350 million aggregate principal amount of 2.875% senior notes due 2041 (the “2.875% 2041 Senior Notes”), $600 million aggregate principal amount of 3.125% senior notes due 2051 (the “3.125% 2051 Senior Notes”) and $450 million aggregate principal amount of 3.375% senior unsecured notes due 2061 (the “3.375% 2061 Senior Notes” and, together with the 0.875% 2024 Senior Notes, the 2.875% 2041 Senior Notes and the 3.125% 2051 Senior Notes, the “Notes”). The net proceeds from the offering of the Notes were used to fund a portion of the purchase prices of the Acquisitions. See "Liquidity and Capital Resources—Debt" below and Note 8 to the consolidated financial statementsoperations for these acquired businesses are included in ~~this Form 10-Q~~the Housing and Infrastructure Products segment for ~~more information.~~

~~Hurricane Ida~~

~~On August 29, 2021, Hurricane Ida made a landfall in Louisiana as a category 4 storm. Due to Hurricane Ida, several of our facilities in~~ the ~~region experienced disruption to their operations, resulting in lost production and sales and higher maintenance expense in the three~~nine months ended September 30, ~~2021. Our facilities impacted by Hurricane Ida~~2022.

Factors that have ~~since resumed production.~~

~~Petro 2 Facility Flash Fire~~

~~In September 2021, Westlake Chemical OpCo LP's Petro 2 ethylene unit commenced turnaround activities. On September 27, 2021, shortly after~~caused volatility in our raw material prices, energy costs and production processes in the ~~turnaround commenced, there was a flash fire at~~past, and which may do so in the ~~quench tower~~future, include significant fluctuation in prices of 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 ~~Petro 2 facility. Several contractors working~~same materials. Increasing raw material prices directly impact our cost of sales and our ability to maintain margins depends on ~~the quench tower were injured. Although there was no sustained fire~~implementing price increases in response to increasing raw material costs. The market for our products may or ~~offsite impact resulting from the incident~~may not accept price increases, and ~~the quench tower did not sustain significant damage, due to the subsequent investigation by the Occupational Safety and Health Administration, the duration~~as such, our future financial condition, results of ~~the turnaround has been extended and is now expected to conclude in December. There are five lawsuits pending in connection with the flash fire at the quench tower during the Petro 2 turnaround.~~operations or cash flows could be materially impacted.

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Recent Developments

Inflation Reduction Act of 2022

Expansion of Share Repurchase Program

On August 12, 2022, our Board of Directors authorized the Company to repurchase an additional $500 million of shares of its common stock under its existing share repurchase program.

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. In this report, we disclose non-GAAP financial measures, primarily earnings before interest, taxes, depreciation and amortization ("EBITDA"). and Free Cash Flow. We define EBITDA as net income before interest expense, income taxes, depreciation and amortization. We define Free Cash Flow as net cash provided by operating activities less additions to property, plant and equipment. The non-GAAP financial measures described in this Form 10-Q are not substitutes for the GAAP measures of earnings and cash flows.

EBITDA is included in this Form 10-Q because our management considers it an important supplemental measure of our performance and believes that it is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry, some of which present EBITDA when reporting their results. We regularly evaluate our performance as compared to other companies in our industry that have different financing and capital structures and/or tax rates by using EBITDA. In addition, we utilize EBITDA in evaluating acquisition targets. Management also believes that EBITDA is a useful tool for measuring our ability to meet our future debt service, capital expenditures and working capital requirements, and EBITDA is commonly used by us and our investors to measure our ability to service indebtedness. Free Cash Flow is included in this Form 10-Q because our management considers it an important supplemental measure of our performance and believes that it is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry, some of which present Free Cash Flow when reporting their results. We regularly evaluate our performance as compared to other companies in our industry that have different financing and capital structures and/or tax rates by using Free Cash Flows. Management also believes that Free Cash Flow is useful to investors and securities analysts to evaluate our liquidity, evaluate strategic investment, evaluate our stock buyback plan and measure our ability to meet our future debt service. EBITDA isand Free Cash Flow are not ~~a substitute~~substitutes for the GAAP measures of net income, income from operations and net cash provided by operating activities and is not necessarily a measure of our ability to fund our cash needs. In addition, ~~it should be noted that~~ companies calculate EBITDA and Free Cash Flow differently and, therefore, EBITDA and Free Cash Flow as presented for us may not be comparable to EBITDA and Free Cash Flow reported by other companies. EBITDA has material limitations as a performance measure because it excludes interest expense, depreciation and amortization and income taxes.

~~A reconciliation~~Reconciliations of EBITDA to net income, income from operations and net cash provided by operating activities, isand Free Cash Flow to net cash provided by operating activities are included in the "Results of Operations" section below.

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Results of Operations

Three Months Ended September 30, Nine Months Ended September 30,
2021 2020 2021 2020
(dollars in millions, except per share data)
Net external sales
Vinyls
PVC, caustic soda and other $ 1,834 $ 1,116 $ 4,950 $ 3,333
Building products 514 413 1,406 1,049
Total Vinyls 2,348 1,529 6,356 4,382
Olefins
Polyethylene 559 302 1,488 914
Styrene, feedstock and other 148 67 427 243
Total Olefins 707 369 1,915 1,157
Total $ 3,055 $ 1,898 $ 8,271 $ 5,539
Income (loss) from operations
Vinyls $ 601 $ 42 $ 1,236 $ 135
Olefins 281 51 738 138
Corporate and other (21) (14) (47) (22)
Total income from operations 861 79 1,927 251
Interest expense (61) (37) (130) (108)
Other income, net 13 12 35 32
Provision for (benefit from) income taxes 193 (15) 423 (75)
Net income 620 69 1,409 250
Net income attributable to noncontrolling interests 13 12 38 33
Net income attributable to Westlake Chemical Corporation $ 607 $ 57 $ 1,371 $ 217
Diluted earnings per share $ 4.69 $ 0.45 $ 10.60 $ 1.69
EBITDA (1)
$ 1,077 $ 287 $ 2,562 $ 860
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. 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.


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021

	(dollars in millions, except per share data)
Net external sales
Performance and Essential Materials
Performance Materials	$	1,689	$	1,588	$	5,678	$	4,333
Essential Materials	1,022		734		2,969		1,877
Total Performance and Essential Materials	2,711		2,322		8,647		6,210
Housing and Infrastructure Products
Housing Products	1,018		536		3,106		1,491
Infrastructure Products	227		197		742		570
Total Housing and Infrastructure Products	1,245		733		3,848		2,061
Total	$	3,956	$	3,055	$	12,495	$	8,271

Income (loss) from operations
Performance and Essential Materials	$	353	$	769	$	2,197	$	1,728
Housing and Infrastructure Products	186		103		607		270
Corporate and other	(23)		(11)		(81)		(71)
Total income from operations	516		861		2,723		1,927
Interest expense	(44)		(61)		(134)		(130)
Other income, net	24		13		52		35
Provision for income taxes	84		193		592		423
Net income	412		620		2,049		1,409
Net income attributable to noncontrolling interests	11		13		34		38
Net income attributable to Westlake Corporation	$	401	$	607	$	2,015	$	1,371
Diluted earnings per share	$	3.10	$	4.69	$	15.54	$	10.60
EBITDA (1)	$	804	$	1,077	$	3,560	$	2,562
Free Cash Flow (2)	$	629	$	611	$	1,749	$	1,223

_____________

(1)See "Reconciliation of EBITDA to Net Income, Income from Operations and Net Cash Provided by Operating Activities" below.

(2)See "Reconciliation of Free Cash Flow to Net Cash Provided by Operating Activities" below.

Three Months Ended September 30, 2022

Nine Months Ended September 30, 2022

Average
Sales Price

Volume

Average
Sales Price

Volume

Product sales price and volume percentage change from prior-year period

Performance and Essential Materials

+7.3

+9.5

+24.0

+15.3

Housing and Infrastructure Products

+31.1

+38.6

+44.6

+42.0

Company average

+13.0

+16.5

+29.1

+21.9

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Three Months Ended September 30, 2021 Nine Months Ended September 30, 2021
Average
Sales Price Volume Average
Sales Price Volume
Product sales price and volume percentage change from prior-year period
Vinyls +53.0 % +0.5 % +41.5 % +3.5 %
Olefins +88.1 % +3.6 % +71.8 % -6.2 %
Company +59.8 % +1.1 % +47.8 % +1.5 %
Average Industry Prices (1)
Three Months Ended September 30, Nine Months Ended September 30,
2021 2020 2021 2020
Average domestic prices
Natural gas ($/MMBtu) (2)
4.0 2.0 3.2 1.9
Ethane (cents/lb) (3)
11.7 7.4 9.5 6.2
Propane (cents/lb) (4)
27.6 11.9 23.2 10.1
Ethylene (cents/lb) (5)
48.0 19.3 45.3 15.4
Polyethylene (cents/lb) (6)
109.0 61.0 95.3 54.1
Styrene (cents/lb) (7)
82.0 53.8 83.0 54.8
Caustic soda ($/short ton) (8)
825 697 743 681
Chlorine ($/short ton) (9)
443 176 328 176
PVC (cents/lb) (10)
109.0 73.3 102.3 70.6
Average export prices
Polyethylene (cents/lb) (11)
86.0 45.7 84.0 41.2
Caustic soda ($/short ton) (12)
364 260 315 261
PVC (cents/lb) (13)
74.1 38.5 73.2 34.3

~~_____________~~

~~(1)Industry pricing data was obtained through IHS Markit ("IHS"). We have not independently verified the data.~~

~~(2)Average Burner Tip contract prices of natural gas over the period.~~

~~(3)Average Mont Belvieu spot prices of purity ethane over the period.~~

~~(4)Average Mont Belvieu spot prices of non-TET propane over the period.~~

~~(5)Average North American spot prices of ethylene over the period.~~

~~(6)Average North American Net Transaction prices of polyethylene low density GP-Film grade over the period.~~

~~(7)Average North American contract prices of styrene over the period.~~

~~(8)~~Average USGC-CSLi index values for caustic soda over the period. As stated by IHS, "the caustic soda price listing represents the USGC-CSLi values. USGC-CSLi does not reflect contract price discounts, implementation lags, caps or other adjustments factors. Additionally, it is not intended to represent a simple arithmetic average of all market transactions occurring during the month. Rather, the USGC-CSLi is most representative of the month-to-month caustic soda price movement for contract volumes of liquid 50% caustic soda rather than the absolute value of contract prices at a particular point in time. It is intended to serve only as a benchmark."

~~(9)Average North American contract prices of chlorine over the period.~~

~~(10)~~Average North American contract prices of pipe grade polyvinyl chloride ("PVC") over the period. As stated by IHS, "the contract resin prices posted reflect an "index" or "market" for prices before discounts, rebates, incentives, etc."

~~(11)Average North American export price for low density polyethylene GP-Film grade over the period.~~

~~(12)Average North American low spot export prices of caustic soda over the period.~~

~~(13)Average North American spot export prices of PVC over the period.~~

~~Table of Contents~~

Three Months Ended September 30, 2022

Nine Months Ended September 30, 2022

Domestic US prices percentage change from prior-year period for fuel cost and feedstock

Fuel cost (Natural Gas)

+102.8

+107.1

Feedstock (Ethane)

+58.0

+81.7

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.


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2021		2020		2021		2020			2022		2021		2022		2021

		(dollars in millions)									(dollars in millions)
Net cash provided by operating activities	Net cash provided by operating activities	$	755	$	357	$	1,637	$	866	Net cash provided by operating activities	$	947	$	755	$	2,560	$	1,637
Changes in operating assets and liabilities and other	Changes in operating assets and liabilities and other	(109)		(230)		(178)		(462)		Changes in operating assets and liabilities and other	(572)		(109)		(467)		(178)
Deferred income taxes	Deferred income taxes	(26)		(58)		(50)		(154)		Deferred income taxes	37		(26)		(44)		(50)
Net income	Net income	620		69		1,409		250		Net income	412		620		2,049		1,409
Less:	Less:									Less:
Other income, net	Other income, net	13		12		35		32		Other income, net	24		13		52		35
Interest expense	Interest expense	(61)		(37)		(130)		(108)		Interest expense	(44)		(61)		(134)		(130)
Benefit from (provision for) income taxes		(193)		15		(423)		75
Provision for income taxes										Provision for income taxes	(84)		(193)		(592)		(423)
Income from operations	Income from operations	861		79		1,927		251		Income from operations	516		861		2,723		1,927
Add:	Add:									Add:
Depreciation and amortization	Depreciation and amortization	203		196		600		577		Depreciation and amortization	264		203		785		600
Other income, net	Other income, net	13		12		35		32		Other income, net	24		13		52		35
EBITDA	EBITDA	$	1,077	$	287	$	2,562	$	860	EBITDA	$	804	$	1,077	$	3,560	$	2,562

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.


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021

	(dollars in millions)
Net cash provided by operating activities	$	947	$	755	$	2,560	$	1,637
Less:
Additions to property, plant and equipment	(318)		(144)		(811)		(414)
Free Cash Flow	$	629	$	611	$	1,749	$	1,223

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Summary

For the quarter ended September 30, 2022, net income attributable to Westlake was $401 million, or $3.10 per diluted share, on net sales of $3,956 million. This represents a decrease in net income attributable to Westlake of $206 million, or $1.59 per diluted share, compared to the quarter ended September 30, 2021 net income attributable to Westlake ~~was~~of $607 million, or $4.69 per diluted share, on net sales of $3,055 million. Income from operations for the quarter ended September 30, 2022 was $516 million, a $345 million decrease from income from operations of $861 million for the quarter ended September 30, 2021. The decrease in net income and income from operations was primarily due to significant volatility in the global economic environment resulting in higher natural gas, power and feedstock costs, lower polyethylene and PVC resin sales prices and margins, lower demand for certain of our products and a litigation charge for $70 million, or $0.42 per diluted share, after tax. The decrease in net income and income from operations in the third quarter of 2022 was partially offset by higher prices for caustic soda and higher polyethylene sales volumes. Selling, general and administrative expenses were also higher in the third quarter of 2022 primarily due to the businesses acquired in the fourth quarter of 2021 and in the first quarter of 2022. Net sales increased by $901 million to $3,956 million in the quarter ended September 30, 2022 from $3,055 million in the quarter ended September 30, 2021. The increase in net sales was due to higher sales prices for caustic soda, chlorine and derivative products in addition to many of our products in the Housing and Infrastructure Products segment, contributions from the businesses acquired in the second half of 2021 and in the first quarter of 2022 and higher polyethylene sales volumes, partially offset by lower prices for polyethylene and PVC resin and lower sales volumes for PVC resin and caustic soda.

For the nine months ended September 30, 2022, net income attributable to Westlake was $2,015 million, or $15.54 per diluted share, on net sales of $12,495 million. This represents an increase in net income attributable to Westlake of ~~$550~~$644 million, or ~~$4.24~~$4.94 per diluted share, compared to the ~~quarter~~nine months ended September 30, ~~2020~~2021 net income attributable to Westlake of ~~$57~~$1,371 million, or ~~$0.45~~$10.60 per diluted share, on net sales of ~~$1,898~~$8,271 million. Income from operations for the ~~quarter~~nine months ended September 30, ~~2021~~2022 was ~~$861~~$2,723 million, a ~~$782~~$796 million increase from income from operations of ~~$79~~$1,927 million for the ~~quarter~~nine months ended September 30, ~~2020.~~2021. The increase in net income and income from operations was primarily due to significantly higher global sales prices and integrated margins for most of our major products, caused by the strong demand for our products ~~resulting from continued improvement in global economic activity, strong residential construction and repair and remodeling markets in North America, and strong demand~~primarily during the first half of 2022, as well as the contributions from the ~~packaging~~businesses acquired in the second half of 2021 and ~~other consumer markets. In addition,~~in the ~~third~~first quarter of ~~2021~~2022. The nine months ended September 30, 2022 net income and operating income were ~~positively impacted by higher margin contribution on ethylene produced by our joint venture LACC, LLC ("LACC") and were~~ negatively impacted by higher natural gas, power and feedstock ~~costs, fuel costs, selling,~~costs. Selling, general and administrative ~~expense. Net sales~~expenses were also higher for the ~~quarter~~nine months ended September 30, 2022 primarily due to the businesses acquired in the second half of 2021 and in the first quarter of 2022. Net sales increased by ~~$1,157~~$4,224 million ~~compared~~ to ~~net sales for~~$12,495 million in the ~~quarter~~nine months ended September 30, ~~2020, mainly due to higher sales prices for our major products, partially offset by lower sales volumes for downstream building products.~~

~~For~~2022 from $8,271 million in the nine months ended September 30, 2021, ~~net income attributable~~due to ~~Westlake was $1,371 million, or $10.60 per diluted share, on net~~higher sales prices for most of ~~$8,271 million. This represents an increase~~our products in ~~net income attributable to Westlake~~both of ~~$1,154 million, or $8.91 per diluted share,~~our segments. Sales volumes in the nine months ended September 30, 2022 were also higher in both segments as compared to the nine months ended September 30, ~~2020 net income attributable to Westlake of $217 million, or $1.69 per diluted share, on net sales of $5,539 million. Income from operations for the nine months ended September 30,~~ 2021, was $1,927 million, a $1,676 million increase from income from operations of $251 million for the nine months ended September 30, 2020. The increase in net income and income from operations was primarily due to significantly higher global sales prices and integrated margins for most of our major products and higher sales volumes for downstream building products and PVC compounds, due to the ~~strengthening of demand for our products resulting from continued improvement in global economic activity~~contributions from the impact of COVID-19 in 2020, strong residential construction and repair and remodeling markets in North America, and strong demand from the packaging and other consumer markets. Net income and income from operations for the nine months ended September 30, 2021 were positively impacted by higher margin contribution on ethylene produced by LACC. Net income and income from operations for the nine months ended September 30, 2021 was negatively impacted by the shutdown of our production facilitiesacquired businesses in the ~~southern United States due to weather-related events~~second half of 2021 and in the ~~nine months ended September 30, 2021, which resulted in lower production for many~~first quarter of ~~our major products including polyethylene. In addition, net income~~2022 and ~~income from operations for the nine months ended September 30, 2021 was negatively impacted by~~ higher feedstock costs, fuel costs and selling, general and administrative expense. The nine months ended September 30, 2020 net income included an income tax rate benefit of $95 million resulting from the carryback of federal net operating losses permitted by the Coronavirus Aid, Relief, and Economic Security Act ("the CARES Act"). Net sales for the nine months ended September 30, 2021 increased by $2,732 million compared to net sales for the nine months ended September 30, 2020, mainly due to higher sales prices for our major products, as well as higherpolyethylene sales volumes, ~~for downstream building products and PVC compounds,~~ partially offset by lower PVC resin, caustic soda and PVC compounds sales ~~volumes for polyethylene.~~volumes.

RESULTS OF OPERATIONS

Third Quarter ~~2021~~2022 Compared with Third Quarter ~~2020~~2021

Net Sales. Net sales increased by ~~$1,157~~$901 million, or ~~61%~~29%, to $3,956 million in the third quarter of 2022 from $3,055 million in the third quarter of 2021, ~~from $1,898 million in the third quarter of 2020,~~ primarily attributable to higher sales prices for caustic soda, chlorine and derivative products in the Performance and Essential Materials segment in addition to many of our ~~major~~ products ~~partially offset by lower sales volumes for downstream building products.~~in the Housing and Infrastructure Products segment and from the businesses acquired in the second half of 2021 and in the first quarter of 2022. Average sales prices for the third quarter of ~~2021~~2022 increased by ~~60%~~13% as compared to the third quarter of ~~2020~~2021 due to ~~the~~ strong demand for caustic soda and many of our products ~~resulting from~~that serve the ~~continued improvement of global economic activity, strong~~ residential construction, ~~and~~ repair and remodeling markets in North America, partially offset by lower polyethylene and ~~strong demand from the packaging and other consumer markets.~~PVC resin sales prices. Sales volumes increased by 1%17% in the third quarter of ~~2021~~2022 as compared to the third quarter of ~~2020.~~2021, substantially due to the businesses acquired in the second half of 2021 and in the first quarter of 2022 and higher polyethylene sales volumes, partially offset by lower caustic soda and PVC resin sales volume.

Gross Profit. Gross profit margin percentage was 20% in the third quarter of 2022 as compared to 33% in the third quarter of ~~2021 as compared to 13% in the third quarter of 2020.~~2021. The ~~increase~~decrease in gross profit margin was primarily due to higher ~~sales~~natural gas, power and feedstock costs, and lower prices and margins for ~~our major products. Gross profit margin for the third quarter of 2021~~polyethylene and PVC resin, which was ~~also positively impacted~~partially offset by higher ~~margin contribution~~prices and margins for caustic soda and higher margins on ~~ethylene produced by LACC~~our housing and ~~was negatively impacted by higher feedstock and fuel costs.~~infrastructure products.

Selling, General and Administrative Expenses. Selling, general and administrative expenses increased by ~~$14~~$93 million to $215 million in the third quarter of 2022 as compared to $122 million in the third quarter of ~~2021 as compared to $108 million in the third quarter of 2020.~~2021. This increase was mainly due to selling, general, and administrative expenses of the businesses acquired in the fourth quarter of 2021 and in the first quarter of 2022 as well as higher ~~employee~~ compensation ~~selling and consulting~~ expenses.

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Amortization of Intangibles. Amortization expense ~~was~~increased by $10 million to $39 million in the third quarter of 2022, from $29 million in the third quarter of 2021, ~~which was comparable~~primarily due to the ~~third~~amortization of intangibles associated with the businesses acquired in the fourth quarter of ~~2020.~~2021 and in the first quarter of 2022.

Restructuring, Transaction and Integration-Related Costs. The restructuring, transaction and integration-related costs of $6 million in the third quarter of 2022 was consistent with the third quarter of 2021 and primarily consisted of costs associated with our ~~recent acquisitions. Restructuring, transaction and integration-related costs of $34 million~~businesses acquired in the ~~third~~second half of 2021 and in the first quarter of ~~2020 primarily related to the closure of a non-integrated PVC plant located in Germany.~~2022.

Interest Expense. Interest expense ~~increased~~decreased by ~~$24~~$17 million to $44 million in the third quarter of 2022 from $61 million in the third quarter of 2021, ~~from $37 million in the third quarter~~primarily due to realization of ~~2020, primarily as a result of higher average debt outstanding~~losses in the third quarter of 2021 ~~as compared to the third quarter of 2020 and~~on the settlement of interest rate lock arrangements associated with the issuance of $1,700 million aggregate principal amount of senior notes in August 2021 ("Notes"), partially offset by higher average debt outstanding in the ~~Notes.~~third quarter of 2022 as compared to the third quarter of 2021.

Other Income, Net. Other income, net increased by $11 million to $24 million in the third quarter of 2022 from $13 million in the third quarter of 2021, ~~was comparable~~primarily due to ~~the other income, net in the third quarter of 2020.~~higher interest income.

Income Taxes. The effective income tax rate was ~~an expense~~16.9% for the third quarter of 2022 as compared to 23.7% for the third quarter of ~~2021 as compared to a benefit of 27.8% for the third quarter of 2020.~~2021. The ~~change in~~ effective tax rate in the third quarter of ~~2021 as~~2022 was lower compared to the third quarter of ~~2020 was~~2021 primarily due to an increase in U.S. federal research and development credits available to the income tax rate benefit in the third quarter of 2020 resulting from the carryback of federal net operating loss to taxable years that were taxed at the U.S. corporate tax rate of 35.0% as permitted under the CARES Act, partially offset by the reduction in the Internal Revenue Code Section 199 ("Section 199") domestic manufacturing deduction as a result of the net operating loss carryback.Company.

~~Vinyls~~Performance and Essential Materials Segment

Net Sales. Net sales for the ~~Vinyls~~Performance and Essential Materials segment increased by ~~$819~~$389 million, or ~~54%~~17%, to ~~$2,348~~$2,711 million in the third quarter of ~~2021~~2022 from ~~$1,529~~$2,322 million in the third quarter of ~~2020. The increase was mainly due to higher sales prices for our major products, partially offset by lower downstream building products sales volumes, as compared to the prior-year period.~~2021. Average sales prices for the ~~Vinyls~~Performance and Essential Materials segment increased by ~~53%~~7% in the third quarter of ~~2021,~~2022 as compared to the third quarter of ~~2020,~~2021. Higher Essential Materials sales prices were primarily ~~due to continued improvement~~driven by higher prices for caustic soda, chlorine and derivative products. These increases were offset by lower polyethylene and PVC resin sales prices in ~~global economic activity and strong residential construction and repair and remodeling industry performance.~~the Performance Materials businesses. Sales volumes for the ~~Vinyls~~Performance and Essential Materials segment increased by 1%10% in the third quarter of ~~2021~~2022 as compared to the third quarter of ~~2020.~~

~~Income from Operations.~~ ~~Income from operations for the Vinyls segment increased by $559 million to $601 million in the third quarter of~~ 2021, ~~from $42 million in the third quarter of 2020. This increase in income from operations was~~ primarily ~~due to significantly higher sales prices and margins for our major products, including PVC resin,~~ resulting from ~~continued improvement in global economic activity and strong residential construction and repair and remodeling industry performance. The third quarter~~contributions from the acquisition of ~~2021 was also positively impacted by higher margin contribution on ethylene produced by LACC, partially offset by higher feedstock and fuel costs.~~

~~Olefins Segment~~

~~Net Sales~~. Net sales for the Olefins segment increased by $338 million, or 92%, to $707 million in the third quarter of 2021 from $369 million in the third quarter of 2020. Average sales prices for the Olefins segment increased by 88% in the third quarter of 2021 as compared to the third quarter of 2020 primarily due to higher sales prices for our major products. The higher prices were driven by a shortage of ethylene from unplanned shutdowns of many plants in the industry due to the severe winter stormWestlake Epoxy in the first quarter of ~~2021,~~2022 and ~~hurricanes in 2020~~higher polyethylene sales volumes, partially offset by lower caustic soda and 2021, and planned turnarounds compounded by continued improvement in global economic activity. Sales volumes for the Olefins segment increased by 4% in the third quarter of 2021 as compared to the third quarter of 2020.PVC resin sales volumes.

Income from Operations. Income from operations for the ~~Olefins~~Performance and Essential Materials segment ~~increased~~decreased by ~~$230~~$416 million to ~~$281~~$353 million in the third quarter of ~~2021~~2022 from ~~$51~~$769 million in the third quarter of ~~2020.~~2021. This decrease in income from operations was due to lower polyethylene and PVC resin sales prices, lower caustic soda and PVC resin sales volumes, higher natural gas, power and feedstock costs and a litigation charge. The decrease in income from operations was partially offset by higher caustic soda sales prices and margins and higher polyethylene sales volumes. Trading activity for the third quarter of 2022 resulted in a loss of approximately $24 million as compared to a gain of $10 million for the third quarter of 2021.

Housing and Infrastructure Products Segment

Net Sales. Net sales for the Housing and Infrastructure Products segment increased by $512 million, or 70%, to $1,245 million in the third quarter of 2022 from $733 million in the third quarter of 2021. In addition to the net sales from the businesses we acquired in the second half of 2021, the increase in the third quarter of 2022 was mainly due to higher sales prices across our businesses as compared to the prior-year period. Average sales prices for the Housing and Infrastructure Products segment increased by 31% in the third quarter of 2022 as compared to the third quarter of 2021, primarily due to continued demand for residential construction and repair and remodeling products as well as increased prices to account for higher raw material costs. Sales volumes for the Housing and Infrastructure Products segment increased by 39% in the third quarter of 2022 as compared to the third quarter of 2021 primarily due to contributions from the businesses acquired in the second half of 2021.

Income from Operations. Income from operations for the Housing and Infrastructure Products segment increased by $83 million to $186 million in the third quarter of 2022 from $103 million in the third quarter of 2021. This increase in income from operations was primarily due to ~~significantly~~ higher sales prices driven by continuing higher demand for housing construction and ~~margins for our major~~remodeling products ~~mainly resulting~~and contributions from the ~~ethylene shortage and continued improvement~~businesses acquired in ~~global economic activity.~~the second half of 2021. The ~~increase in~~higher income from operations ~~versus~~in the ~~prior-year period~~third quarter of 2022 as compared to the third quarter of 2021 was partially offset by higher ~~feedstock~~raw material and ~~fuel~~production costs. Trading activity for the third quarter of 2021 resulted in a gain of approximately $10 million primarily due to favorable derivative positions as compared to no net gain or loss for the third quarter of 2020.

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Nine Months Ended September 30, ~~2021~~2022 Compared with Nine Months Ended September 30, ~~2020~~2021

Net Sales. Net sales increased by ~~$2,732~~$4,224 million, or ~~49%~~51%, to $12,495 million in the nine months ended September 30, 2022 from $8,271 million in the nine months ended September 30, 2021, ~~from $5,539 million in the nine months ended September 30, 2020,~~ primarily attributable to higher sales prices for our ~~major~~PVC resin, caustic soda and for many of our products in the Housing and Infrastructure Products segment as well as higher sales volumes for ~~downstream building products~~polyethylene and ~~PVC compounds, partially offset by lower sales volumes for polyethylene.~~contributions from the businesses acquired in 2021 and 2022. Average sales prices for the nine months ended September 30, ~~2021~~2022 increased by ~~48%~~29% as compared to the nine months ended September 30, ~~2020~~2021 due to ~~the strengthening of~~strong demand for our chlorovinyl products ~~resulting from continued improvement in global economic activity,~~and strong residential construction, ~~and~~ repair and remodeling markets in North America ~~and strong demand from~~during the ~~packaging and other consumer markets.~~first half of 2022. Sales volumes increased by 2%22% for the nine months ended September 30, ~~2021~~2022 as compared to the nine months ended September 30, ~~2020.~~2021, primarily due to the businesses acquired in the second half of 2021 and in the first quarter of 2022, partially offset by lower PVC resin, caustic soda and PVC compounds sales volume.

Gross Profit. Gross profit margin percentage was 28% in the nine months ended September 30, 2022 which was comparable to 29% in the nine months ended September 30, ~~2021 as compared to 13% in~~2021. Higher sales prices and margins for PVC resin, caustic soda, pipes and fittings and PVC compounds were offset by higher natural gas, power and feedstock costs and lower volumes for PVC resin, caustic soda and PVC compounds during the nine months ended September 30, 2020. The increase in gross profit margin was primarily due to higher sales prices and margins for our major products, as well as the higher sales volumes for downstream building products and PVC compounds. Gross profit margin for the nine months ended September 30, 2021 was also positively impacted by the margin contributed from LACC's produced ethylene. Gross profit margin for the nine months ended September 30, 2021 was negatively impacted by the lost production due to weather-related events in the nine months ended September 30, 2021, which resulted in lower plant operating rates, higher maintenance expense and lower production for polyethylene, as well as higher feedstock and fuel costs.2022.

Selling, General and Administrative Expenses. Selling, general and administrative expenses increased by ~~$51~~$252 million to $635 million in the nine months ended September 30, 2022 as compared to $383 million in the nine months ended September 30, 2021. This increase was mainly due to the inclusion of expenses related to the businesses acquired in the second half of 2021 ~~as compared~~and in the first quarter of 2022 and higher compensation expenses.

Amortization of Intangibles. Amortization expense increased by $41 million to ~~$332~~$124 million in the nine months ended September 30, ~~2020. This increase was mainly due~~2022, as compared to ~~higher employee compensation, selling and consulting expenses.~~

~~Amortization of Intangibles.~~ ~~Amortization expense was~~ $83 million in the nine months ended September 30, 2021, ~~which was comparable~~primarily due to the ~~nine months ended September 30, 2020.~~amortization of intangibles associated with the businesses acquired in the second half of 2021 and in the first quarter of 2022.

Restructuring, Transaction and Integration-Related Costs. The restructuring, transaction and integration-related costs of ~~$6 million for the nine months ended September 30, 2021 primarily consisted of costs associated with our recent acquisitions. Restructuring, transaction and integration-related costs of $36~~$24 million in the nine months ended September 30, ~~2020~~2022 primarily ~~related to~~consisted of costs associated with the ~~closure~~businesses acquired in the second half of ~~a non-integrated PVC plant located~~2021 and in ~~Germany.~~the first quarter of 2022.

Interest Expense. Interest expense increased by ~~$22~~$4 million to $134 million in the nine months ended September 30, 2022 from $130 million in the nine months ended September 30, 2021, ~~from $108 million~~due to the higher average debt outstanding in the nine months ended September 30 ~~2020 as a result of higher average debt outstanding in the third quarter of 2021 as compared~~2022 due to ~~the third quarter of 2020 and the settlement of interest rate lock arrangements associated with~~ the issuance of ~~the Notes.~~senior notes in August 2021.

Other Income, Net. Other income, net ofincreased by $17 million to $52 million in the nine months ended September 30, 2022 from $35 million in the nine months ended September 30, 2021, primarily due to higher interest income.

Income Taxes. The effective income tax rate was ~~comparable to other income, net in~~22.4% for the nine months ended September 30, ~~2020.~~

~~Income Taxes.~~ ~~The effective income tax rate was an expense of~~2022 as compared to 23.1% for the nine months ended September 30, ~~2021 as compared to a benefit of 42.9% for the nine months ended September 30, 2020.~~2021. The ~~change in~~ effective tax rate in the nine months ended September 30, 2022 was lower compared to the nine months ended September 30, 2021, primarily due to an increase in U.S. federal research and development credits available to the Company.

Performance and Essential Materials Segment

Net Sales. Net sales for the Performance and Essential Materials segment increased by $2,437 million, or 39%, to $8,647 million in the nine months ended September 30, 2022 from $6,210 million in the nine months ended September 30, 2021. Average sales prices for the Performance and Essential Materials segment increased by 24% in the nine months ended September 30, 2022 as compared to the nine months ended September 30, ~~2020 was primarily~~2021. Higher Performance Materials sales prices were due to higher PVC resin sales prices. Higher Essential Materials sales prices were primarily driven by higher prices for caustic soda, chlorine and derivative products. Sales volumes for the ~~income tax rate benefit~~Performance and Essential Materials segment increased by 15% in the nine months ended September 30, 2020 resulting from the carryback of federal net operating loss to taxable years that were taxed at the U.S. corporate tax rate of 35.0% as permitted under the CARES Act, partially offset by the reduction in the Section 199 domestic manufacturing deduction as a result of the net operating loss carryback.

~~Vinyls Segment~~

~~Net Sales~~. Net sales for the Vinyls segment increased by $1,974 million, or 45%, to $6,356 million in the nine months ended September 30, 2021 from $4,382 million in the nine months ended September 30, 2020. The increase was mainly due to higher sales prices for our major products and higher sales volumes for downstream building products and PVC compounds, as compared to the prior-year period. The increase in prices were primarily due to continued improvement in global economic activity and strong residential construction and repair and remodeling industry performance. Average sales prices for the Vinyls segment increased by 42% in the nine months ended September 30, 2021,2022 as compared to the nine months ended September 30, ~~2020. Sales volumes for the Vinyls segment increased by 4% in the nine months ended September 30,~~ 2021, ~~as compared to the nine months ended September 30, 2020.~~

~~Table of Contents~~

~~Income from Operations.~~ Income from operations for the Vinyls segment increased by $1,101 million to $1,236 million in the nine months ended September 30, 2021 from $135 million in the nine months ended September 30, 2020. This increase in income from operations was primarily due to significantly higher sales prices for our major products, including PVC resin, and higher volumes for downstream building products and PVC compounds, resulting from continued improvement in global economic activity and strong residential construction and repair and remodeling industry performance, higher margin contribution from ethylene produced by LACC, partially offset by higher ethylene feedstock and fuel costs as well as the impacts of the weather related events in the nine months ended September 30, 2021.

~~Olefins Segment~~

~~Net Sales~~. Net sales for the Olefins segment increased by $758 million, or 66%, to $1,915 million in the nine months ended September 30, 2021 from $1,157 million in the nine months ended September 30, 2020. The increase was mainly due to higher sales prices for our major products. Average sales prices for the Olefins segment increased by 72% in the nine months ended September 30, 2021 as compared to the nine months ended September 30, 2020. The higher prices were driven by a shortage of ethylene resulting from shutdowns of many plants in the in the southern United States due to the severe winter storm in the first quarter of 2021 and hurricanes in 2020 and in 2021 compounded by continued improvement in global economic activity. The higher feedstock cost also contributed to higher prices in the Olefins segment. Sales volumes for ~~the Olefins segment decreased by 6% in the nine months ended September 30, 2021 as compared to the nine months ended September 30, 2020, primarily as a result of the lower~~ polyethylene ~~inventory levels, lower production~~ and ~~lower product availability resulting~~contributions from the ~~continuing inventory shortages.~~acquisition of Westlake Epoxy, which were partially offset by lower PVC resin sales volumes.

Income from Operations. Income from operations for the ~~Olefins~~Performance and Essential Materials segment increased by ~~$600~~$469 million to ~~$738~~$2,197 million in the nine months ended September 30, ~~2021~~2022 from ~~$138~~$1,728 million in the nine months ended September 30, ~~2020.~~2021. This increase in income from operations was ~~primarily~~ due to ~~significantly~~ higher sales prices for ~~our major products, mainly resulting~~PVC resin and caustic soda and higher margins for polyethylene. Income from operations was also higher due to contributions from the ~~ethylene shortage and continued improvement~~acquisition of Westlake Epoxy in ~~global economic activity.~~the first quarter of 2022. The increase in income from operations versus the prior-year period was partially offset by ~~the lower polyethylene sales volumes, lower product availability~~higher natural gas, power and ~~by higher~~ feedstock costs and ~~fuel costs.~~a litigation charge. Trading activity for the nine months ended September 30, ~~2021~~2022 resulted in a ~~gain~~loss of approximately ~~$26~~$23 million as compared to a gain of $1$26 million for the nine months ended September 30, ~~2020.~~2021.

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Housing and Infrastructure Products Segment

Net Sales. Net sales for the Housing and Infrastructure Products segment increased by $1,787 million, or 87%, to $3,848 million in the nine months ended September 30, 2022 from $2,061 million in the nine months ended September 30, 2021. In addition to the net sales from the businesses acquired in the second half of 2021, the increase in the nine months ended September 30, 2022 was also due to generally higher sales prices across our businesses as compared to the prior-year period. Average sales prices for the Housing and Infrastructure Products segment increased by 45% in the nine months ended September 30, 2022, as compared to the nine months ended September 30, 2021, primarily due to strong residential construction and repair and remodeling industry activity during the first half of 2022. Sales volumes for the Housing and Infrastructure Products segment increased by 42% in the nine months ended September 30, 2022 as compared to the nine months ended September 30, 2021, primarily due to contributions from the businesses acquired in the second half of 2021.

Income from Operations. Income from operations for the Housing and Infrastructure Products segment increased by $337 million to $607 million in the nine months ended September 30, 2022 from $270 million in the nine months ended September 30, 2021. This increase in income from operations was primarily due to higher sales prices driven by higher housing construction and remodeling activity during the first half of 2022. Income from operations was also higher due to contributions from the businesses acquired in the second half of 2021. The higher income from operations in the nine months ended September 30, 2022 as compared to the nine months ended September 30, 2021 was partially offset by higher raw material, power and production costs.

CASH FLOW DISCUSSION FOR THE NINE MONTHS ENDED SEPTEMBER 30, ~~2021~~2022 AND ~~2020~~2021

Cash Flows

Operating Activities

Operating activities provided cash of $2,560 million in the first nine months of 2022 compared to cash provided by operating activities of $1,637 million in the first nine months of ~~2021 compared to cash provided by operating activities of $866 million in the first nine months of 2020.~~2021. The ~~$771~~$923 million increase in cash flows from operating activities was mainly due to an increase in income from operations ~~that was partially offset by~~and favorable changes in working ~~capital changes.~~capital. 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 ~~$381~~$248 million in the first nine months of ~~2021,~~2022, compared to ~~$120~~$381 million of cash used in the first nine months of ~~2020, an unfavorable~~2021, a favorable change of ~~$261~~$133 million. The ~~majority of the unfavorable changes~~favorable change in the first nine months of ~~2021 were~~2022 was driven by ~~higher~~favorable changes in accounts receivable and ~~higher inventories,~~accrued and other liabilities, which were partially offset by ~~higher accounts payable. The~~ unfavorable ~~change~~changes in ~~accounts receivable was primarily driven by higher sales prices resulting in higher trade customer balances. The higher~~ inventories and accounts ~~payable in the first nine months of 2021 were primarily driven by higher inventory cost and an increase in operating activities, as compared to the nine months ended September 30, 2020.~~

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payable.

Investing Activities

Net cash used for investing activities in the first nine months of ~~2021~~2022 was ~~$842~~$2,148 million as compared to net cash used for investing activities of ~~$366~~$842 million in the first nine months of ~~2020.~~2021. The increase in investing activities in the first nine months of ~~2021~~2022 was primarily due to the ~~acquisitions~~acquisition of ~~LASCO and Dimex~~Westlake Epoxy in February 2022 for ~~$428~~$1,171 million, net of cash ~~acquired.~~acquired, the purchase of an additional 3.2% interest in LACC for $89 million and additional contributions of $87 million in LACC. Capital expenditures were $811 million in the first nine months of 2022, an increase of $397 million as compared to $414 million in the first nine months of ~~2021, which was higher by $11 million as compared to $403 million in the first nine months of 2020.~~2021. Capital expenditures in the first nine months of ~~2021~~2022 and ~~2020~~2021 were primarily related to projects to improve production capacity or reduce costs, maintenance and safety projects and environmental projects at our various facilities. In the first nine months of 2021, we contributed $17 million to LACC and $2 million to an unconsolidated investee compared to return of investment of $44 million from LACC in the first nine months of 2020.

Financing Activities

Net cash ~~provided~~used for financing activities during the first nine months of ~~2021~~2022 was ~~$1,487~~$480 million as compared to net cash ~~used~~provided by financing activities of ~~$14~~$1,487 million in the first nine months of ~~2020.~~2021. The activities during the first nine months of 2022 were primarily related to the $123 million payment of cash dividends, the $34 million payment of cash distributions to noncontrolling interests, the redemption of $250 million aggregate principal amount of the 3.60% 2022 Senior Notes and repurchases of shares of our common stock for an aggregate amount of $68 million. The activities in the first nine months of 2021 were primarily related to the registered public offering of $300 million aggregate principal amount of the 0.875% 2024 Senior Notes, $350 million aggregate principal amount of the 2.875% 2041 Senior Notes, $600 million aggregate principal amount of the 3.125% 2051 Senior Notes and $450 million aggregate principal amount of the 3.375% 2061 Senior Notes and the payment of debt issuance costs of $18 million related to such ~~Notes.~~notes. The remaining activities during the nine months ended September 30, 2021 related to the $107 million payment of cash dividends, the $32 million payment of cash distributions to noncontrolling interests and the repurchase of shares of our common stock for an aggregate purchase price of $30 million. ~~In the first nine months~~

Table of 2020, out of an abundance of caution due to the COVID-19 pandemic, we borrowed $1,000 million under our revolving credit facility, which we subsequently repaid in June 2020. We also completed a registered public offering of $300 million aggregate principal amount of the 3.375% 2030 Senior Notes in June 2020. The remaining activities in the first nine months of 2020 were primarily related to the $102 million payment of cash dividends, the $39 million payment of cash distributions to noncontrolling interests, repurchases of our common stock of $54 million and $17 million representing repayment of short-term notes payable.Contents

LIQUIDITY AND CAPITAL RESOURCES

Liquidity and Financing Arrangements

Our principal sources of liquidity are from cash and cash equivalents, cash from operations, short-term borrowings under the New Credit Agreement and our long-term financing.

In November 2014, our Board of Directors authorized a $250 million stock repurchase program (the "2014 Program"). In November 2015, our Board of Directors approved the expansion of the 2014 Program by an additional $150 million. In August 2018, our Board of Directors approved the further expansion of the existing 2014 Program by an additional $150 million. In August 2022, our Board of Directors approved the further expansion of the existing 2014 Program by an additional $500 million. During the third quarter of 2022, we repurchased 372,430 shares of our common stock and in the nine months ended September 30, 2022, we repurchased 784,920 shares of our common stock under the 2014 Program. As of September 30, ~~2021,~~2022, we had repurchased ~~7,431,520~~8,216,440 shares of our common stock for an aggregate purchase price of approximately ~~$449 million under the 2014 Program. During the nine months ended September 30, 2021, we repurchased shares of our common stock for an aggregate purchase price of $30~~$522 million under the 2014 Program. Purchases under the 2014 Program may be made either through the open market or in privately negotiated transactions. Decisions regarding the amount and the timing of purchases under the 2014 Program will be influenced by our cash on hand, our cash ~~flow~~flows from operations, general market conditions and other factors. The 2014 Program may be discontinued by our Board of Directors at any time.

On October 4, 2018, Westlake Chemical Partners LP ("Westlake Partners") and Westlake Partners GP, 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 WLK ~~Partners'~~Partners common units, from time to time, up to an aggregate offering amount of $50 million. This Equity Distribution Agreement was amended on February 28, 2020 to reference a new shelf registration for utilization under this agreement. No common units have been issued under this program as of September 30, ~~2021.~~2022.

We believe that our sources of liquidity as described above are adequate to fund our normal operations and ongoing capital expenditures and turnaround ~~activities (such as the planned ongoing turnaround of OpCo's Petro 2 ethylene unit in Lake Charles).~~activities. Funding of any potential large expansions or potential acquisitions ~~would~~or the redemption of debt may likely necessitate, and therefore depend on, our ability to obtain additional financing in the future. We may not be able to access additional liquidity at ~~cost effective~~favorable interest rates due to ~~the~~ volatility of the commercial credit markets.

~~On August 19, 2021, we completed the registered public offering of the Notes. See "Liquidity and Capital Resources—Debt" below for more information.~~

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Cash and Cash Equivalents

As of September 30, ~~2021,~~2022, our cash and cash equivalents totaled ~~$3,571~~$1,778 million. In addition to our cash and cash equivalents, our New Credit Agreement is available as needed, as described under "Debt" below.

Debt

As of September 30, ~~2021,~~2022, our indebtedness totaled ~~$5.2~~$4.8 billion. See Note 8 to the consolidated financial statements appearing elsewhere in this Form 10-Q for a discussion of our long-term indebtedness. Defined terms used in this section have the definitions assigned to such terms in Note 8 to the consolidated financial statements included in Item 1 of this Form 10-Q.

Our ability to make payments on our indebtedness and to fund planned capital expenditures will depend on our ability to generate cash in the future, which is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control. 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 the New Credit Agreement will be adequate to meet our normal operating needs for the foreseeable future.

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New Credit Agreement

On ~~July 24, 2018, we~~June 9, 2022, the Company entered into a $1new $1.5 billion revolving credit facility that is scheduled to mature on ~~July 24, 2023~~June 9, 2027 (the ~~"Credit~~"New Credit Agreement"). and, in connection therewith, terminated the Company's existing revolving credit agreement. The New Credit Agreement bears interest at either (a) ~~LIBOR~~Adjusted Term SOFR (as defined in the New Credit Agreement) plus a ~~spread~~margin ranging from ~~1.00%~~1.000% to ~~1.75%~~1.625% per annum or (b) Alternate Base Rate (as defined in the New Credit Agreement) plus a ~~spread~~margin ranging from ~~0.00%~~0.000% to ~~0.75%~~0.625% per annum, in each case depending on the credit rating of the Company. As of September 30, 2021, we had no borrowings outstanding under the Credit Agreement. As of September 30, 2021, we had no outstanding letters of credit and had borrowing availability of $1 billion under the Credit Agreement. The New Credit Agreement contains certain affirmative and negative covenants, including a quarterly total leverage ratio financial maintenance covenant. As of September 30, ~~2021, we were~~2022, the Company was in compliance with the total leverage ratio financial maintenance covenant.

The New Credit Agreement also contains certain events of default and, if and for so long as certain events of default have occurred and are continuing, any overdue amounts outstanding under the New Credit Agreement will accrue interest at an increased rate, the lenders can terminate their commitments to lend thereunder and payments of any outstanding amounts thereunder could be accelerated by the lenders. None of ~~our~~the Company's subsidiaries are required to guarantee ~~our~~the obligations of the Company under the New Credit Agreement.

The New Credit Agreement includes a $150 million sub-limit for letters of credit, and any outstanding letters of credit will be deducted from availability under the facility. The New Credit Agreement also provides for a discretionary $50 million commitment for swingline loans to be provided on a same-day basis. WeThe Company 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.

~~3.60% Senior Notes due 2022~~

In July 2012, we issued $250 million aggregate principal amount of the 3.60% 2022 Senior Notes. We may optionally redeem the 3.60% 2022 Senior Notes at any time and from time to time prior to April 15, 2022 (three months prior to the maturity date) for 100% of the principal plus accrued interest and a discounted "make whole" payment. On or after April 15, 2022, we may optionally redeem the 3.60% 2022 Senior Notes for 100% of the principal plus accrued interest. The holders of the 3.60% 2022 Senior Notes may require us to repurchase the 3.60% 2022 Senior Notes at a price of 101% of their principal amount, plus accrued and unpaid interest to 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 indenture governing the 3.60% 2022 Senior Notes).

0.875% Senior Notes due 2024

In August 2021, we completed the registered public offering of $300 million aggregate principal amount of the 0.875% 2024 Senior Notes. We may optionally redeem the 0.875% 2024 Senior Notes at any time and from time to time on or after August 15, 2022 for 100% of the principal amount plus accrued and unpaid interest. The holders of the 0.875% 2024 Senior Notes may require us to repurchase the 0.875% 2024 Senior Notes at a price of 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 indenture governing the 0.875% 2024 Senior Notes).

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3.60% Senior Notes due 2026 and 5.0% Senior Notes due 2046

In August 2016, we completed the private offering of $750 million aggregate principal amount of ~~our~~the 3.60% 2026 Senior Notes and $700 million aggregate principal amount of ~~our~~the 5.0% 2046 Senior Notes. In March 2017, the Company commenced registered exchange offers to exchange the 3.60% 2026 Senior Notes and the 5.0% 2046 Senior Notes for new notes that are identical in all material respects to the 3.60% 2026 Senior Notes and the 5.0% 2046 Senior Notes, except that the offer and issuance of the new Securities and Exchange Commission-registered notes have been registered under the Securities Act of 1933, as amended (the "Securities Act"). The exchange offers expired on April 24, 2017, and approximately 99.97% of the 3.60% 2026 Senior Notes and 100% of the 5.0% 2046 Senior Notes were exchanged. The notes that were not exchanged in the exchange offers have not been registered under the Securities Act or any state securities laws and may not be offered or sold in the U.S. absent registration or an applicable exemption from registration requirements or a transaction not subject to the registration requirements of the Securities Act or any state securities law.

Revenue Bonds

In December 1997, we entered into a loan agreement with a public trust established for public purposes for the benefit of the Parish of Calcasieu, Louisiana. The public trust issued $11 million principal amount of tax-exempt waste disposal revenue bonds in order to finance our construction of waste disposal facilities for an ethylene plant. The waste disposal revenue bonds expire in December 2027 and are subject to redemption and mandatory tender for purchase prior to maturity under certain conditions. Interest on the waste disposal revenue bonds accrues at a rate determined by a remarketing agent and is payable quarterly. The interest rate on the waste disposal revenue bonds at September 30, ~~2021~~2022 was ~~0.07%~~2.45% and at December 31, ~~2020~~2021 was 0.14%.

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1.625% Senior Notes due 2029

In July 2019, we completed the registered public offering of €700 million aggregate principal amount of the 1.625% 2029 Senior ~~Notes due July 17, 2029.~~Notes. The Company received approximately $779 million of net proceeds from the offering. We may optionally redeem the 1.625% 2029 Senior Notes at any time and from time to time prior to April 17, 2029 (three months prior to the maturity date) for 100% of the principal plus accrued interest and a discounted "make whole" payment. On or after April 17, 2029, we may optionally redeem the 1.625% 2029 Senior Notes for 100% of the principal amount plus accrued interest. The holders of the 1.625% 2029 Senior Notes may require us to repurchase the 1.625% 2029 Senior Notes at a price of 101% of their principal amount, plus accrued and unpaid interest to 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 indenture governing the 1.625% 2029 Senior Notes).

3.375% Senior Notes due 2030

In June 2020, we completed the registered public offering of $300 million aggregate principal amount of the 3.375% 2030 Senior ~~Notes due June 15, 2030.~~Notes. The Company received approximately $297 million of net proceeds from the offering, and used a portion of the net proceeds to fund the purchase in lieu of optional redemption of the 6 ½% 2029 GO Zone Bonds, the 6 ½% 2035 GO Zone Bonds and the 6 ½% 2035 IKE Zone Bonds. We may optionally redeem the 3.375% 2030 Senior Notes at any time and from time to time prior to March 15, 2030 (three months prior to the maturity date) for 100% of the principal plus accrued interest and a discounted "make whole" payment. On or after March 15, 2030, we may optionally redeem the 3.375% 2030 Senior Notes for 100% of the principal amount plus accrued interest. The holders of the 3.375% 2030 Senior Notes may require us to repurchase the 3.375% 2030 Senior Notes at a price of 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 indenture governing the 3.375% 2030 Senior Notes).

3.50% 2032 GO Zone Refunding Bonds

In November 2017, the Louisiana Local Government Environmental Facility and Development Authority (the "Authority") completed the offering of $250 million aggregate principal amount of 3.50% tax-exempt revenue refunding bonds due November 1, 2032 (the "Refunding Bonds"), the net proceeds of which were used to redeem $250 million aggregate principal amount of the Authority's 6 ¾% tax-exempt revenue bonds due November 1, 2032 issued by the Authority under the GO Zone Act in December 2007. In connection with the issuance of the Refunding Bonds, we issued $250 million of the 3.50% 2032 GO Zone Refunding Senior Notes. The Refunding Bonds are subject to optional redemption by the Authority upon the direction of the Company at any time on or after November 1, 2027, for 100% of the principal plus accrued interest.

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2.875% Senior Notes due 2041

In August 2021, we completed the registered public offering of $350 million aggregate principal amount of the 2.875% 2041 Senior Notes. We may optionally redeem the 2.875% 2041 Senior Notes at any time and from time to time prior to February 15, 2041 (six months prior to the maturity date) for a redemption price equal to the greater of (i) 100% of the principal amount plus accrued and unpaid interest and (ii) the sum of the present values of the remaining scheduled payments on the 2.875% 2041 Senior Notes being redeemed that would be due if the 2.875% 2041 Senior Notes matured on February 15, 2041, discounted to the redemption date on a semi-annual basis, plus 20 basis points, and plus accrued and unpaid interest. In addition, we may optionally redeem the 2.875% 2041 Senior Notes at any time on or after February 15, 2041 for 100% of the principal amount plus accrued and unpaid interest. The holders of the 2.875% 2041 Senior Notes may require us to repurchase the 2.875% 2041 Senior Notes at a price of 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 indenture governing the 2.875% 2041 Senior Notes).

4.375% Senior Notes due 2047

In November 2017, we completed the registered public offering of $500 million aggregate principal amount of the 4.375% 2047 Senior ~~Notes due November 15, 2047.~~Notes. We may optionally redeem the 4.375% 2047 Senior Notes at any time and from time to time prior to May 15, 2047 (six months prior to the maturity date) for 100% of the principal plus accrued interest and a discounted "make whole" payment. On or after May 15, 2047, we may optionally redeem the 4.375% 2047 Senior Notes for 100% of the principal amount plus accrued interest. The holders of the 4.375% 2047 Senior Notes may require us to repurchase the 4.375% 2047 Senior Notes at a price of 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 indenture governing the 4.375% 2047 Senior Notes).

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3.125% Senior Notes due 2051

In August 2021, we completed the registered public offering of $600 million aggregate principal amount of the 3.125% 2051 Senior Notes. We may optionally redeem the 3.125% 2051 Senior Notes at any time and from time to time prior to February 15, 2051 (six months prior to the maturity date) for a redemption price equal to the greater of (i) 100% of the principal amount plus accrued and unpaid interest and (ii) the sum of the present values of the remaining scheduled payments on the 3.125% 2051 Senior Notes being redeemed that would be due if the 3.125% 2051 Senior Notes matured on February 15, 2051, discounted to the redemption date on a semi-annual basis, plus 25 basis points, and plus accrued and unpaid interest. In addition, we may optionally redeem the 3.125% 2051 Senior Notes at any time on or after February 15, 2051 for 100% of the principal amount plus accrued and unpaid interest. The holders of the 3.125% 2051 Senior Notes may require us to repurchase the 3.125% 2051 Senior Notes at a price of 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 indenture governing the 3.125% 2051 Senior Notes).

3.375% Senior Notes due 2061

In August 2021, we completed the registered public offering of $450 million aggregate principal amount of the 3.375% 2061 Senior Notes. We may optionally redeem the 3.375% 2061 Senior Notes at any time and from time to time prior to February 15, 2061 (six months prior to the maturity date) for a redemption price equal to the greater of (i) 100% of the principal amount plus accrued and unpaid interest and (ii) the sum of the present values of the remaining scheduled payments on the 3.375% 2061 Senior Notes being redeemed that would be due if the 3.375% 2061 Senior Notes matured on February 15, 2061, discounted to the redemption date on a semi-annual basis, plus 25 basis points, and plus accrued and unpaid interest. In addition, we may optionally redeem the 3.375% 2061 Senior Notes at any time on or after February 15, 2061 for 100% of the principal amount plus accrued and unpaid interest. The holders of the 3.375% 2061 Senior Notes may require us to repurchase the 3.375% 2061 Senior Notes at a price of 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 indenture governing the 3.375% 2061 Senior Notes).

8.73% 2022 RS Cogen Debt

~~Table~~In July 2000, RS Cogen, L.L.C. ("RS Cogen"), our 50%-owned joint venture, entered into a $75 million aggregate principal amount senior credit facility institutional loan at an interest rate of ~~Contents~~8.73%. All of the assets of RS Cogen are pledged as collateral under its senior credit facility. Borrowings under this senior credit facility are repayable quarterly over the remaining term. The Company does not guarantee RS Cogen's debt commitments and RS Cogen is not a guarantor for any of the Company's other long-term debt obligations. The balance outstanding under this loan was $6 million at September 30, 2022.

2026 Term Loans

In March 2021, Taiwan Chlorine Industries, Ltd., our 60%-owned joint venture, entered into five-year loan agreements for a maximum total limit of approximately $21 million. The interest rate on these loans as of September 30, 2022 was 0.2%. The unsecured loans include a government rate subsidy and have a 5-year maturity. The balance outstanding under these loans was approximately $13 million as of September 30, 2022.

The indenture governing ~~the 3.60% 2022 Senior Notes,~~ 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 GO Zone Refunding Senior Notes, the 2.875% 2041 Senior Notes, the 5.0% 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 its assets.

~~8.73% 2022 RS Cogen Debt~~

In July 2000, RS Cogen, our 50%-owned joint venture, entered into a $75 million aggregate principal amount senior credit facility institutional loan at an interest rate of 8.73%. All of the assets of RS Cogen are pledged as collateral under its senior credit facility. Borrowings under this senior credit facility are repayable quarterly over the remaining term. The Company does not guarantee RS Cogen's debt commitments and RS Cogen is not a guarantor for any of the Company's other long-term debt obligations. The balance outstanding under this loan was $24 million at September 30, 2021.

~~2026 Term Loans~~

In March 2021, Taiwan Chlorine Industries, Ltd., our 60%-owned joint venture, entered into five-year loan agreements for a maximum total limit of approximately $23 million. The interest rate on these loans at September 30, 2021 was 0.2%. The unsecured loans include a government rate subsidy and have a 5-year maturity. The balance outstanding under these loans was approximately $6 million at September 30, 2021.

As of September 30, ~~2021,~~2022, we were in compliance with all of our long-term debt covenants.

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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 ~~originally entered into~~LP ("Westlake Partners") (the "MLP Revolver") that is scheduled to mature on April 29, 2015 and amended in August and December 2017. In addition, on March 19, 2020, Westlake Partners and Westlake Chemical Finance Corporation entered into an amendment to the revolving credit facility, to extend the maturity date to March 19, 2023 and add a phase-out provision for LIBOR, which is to be replaced by an alternate benchmark rate. Borrowings under the revolving credit facility bear interest at LIBOR plus a spread ranging from 2.0% to 3.0% (depending on Westlake Partners' consolidated leverage ratio), payable quarterly. Westlake Partners may pay all or a portion of the interest on any borrowings in kind, in which case any such amounts would be added to the principal amount of the loan.July 12, 2027. As of September 30, ~~2021,~~2022, outstanding borrowings under the credit facility totaled $377 million and bore interest at SOFR plus the Applicable Margin plus a 0.10% credit spread adjustment. On July 12, 2022, Westlake Partners entered into the Fourth Amendment (the "MLP Revolver Amendment") to the MLP Revolver. The MLP Revolver Amendment, among other things, extended the maturity date to July 12, 2027 and provided for the replacement of LIBOR with Secured Overnight Financing Rate, as administered by the Federal Reserve Bank of New York ("SOFR"). Borrowings under the MLP Revolver now bear interest at a variable rate of either (a) SOFR plus ~~2.0%~~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 MLP Revolver varies between 1.75% and 2.75%, depending on the Partnership's Consolidated Leverage Ratio.

Our subsidiary, Westlake Polymers LLC, is the administrative agent to a $600 million revolving credit facility with Westlake Chemical OpCo LP ("OpCo")~~. The revolving credit facility~~ (the "OpCo Revolver") that is scheduled to ~~mat~~mature on July 12, 2027. ~~ure in September 2023.~~ As of September 30, ~~2021,~~2022, 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. The OpCo Revolver Amendment, among other things, extended the maturity date to July 12, 2027 and provided for the replacement of LIBOR with SOFR. Borrowings under the OpCo Revolver now bear interest at a variable rate of either (a) SOFR plus ~~2.0%, which~~the Applicable Margin plus a 0.10% credit spread adjustment or, if SOFR is ~~accrued in arrears quarterly.~~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%.

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 upon consolidation.

Off-Balance Sheet Arrangements

None.

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FORWARD-LOOKING STATEMENTS

The Private Securities Litigation Reform Act of 1995 provides safe harbor provisions for forward-looking information. Certain of the statements contained in this report are forward-looking statements. All statements, other than statements of historical facts, included in this report that address activities, events or developments that we expect, project, believe or anticipate will or may occur in the future are forward-looking statements. Forward-looking statements can be identified by the use of words such as "believes," "intends," "may," "should," "could," "anticipates," "expected" or comparable terminology, or by discussions of strategies or trends. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we cannot give any assurances that these expectations will prove to be correct. Forward-looking statements relate to matters such as:

•future operating rates, margins, cash flows and demand for our products;

•industry market outlook, including the price of crude ~~oil;~~oil, natural gas, housing starts and repair and remodeling activity;

•macroeconomic outlook, including rising interest rates, inflation and possible recession;

•widespread outbreak of an illness or any other communicable disease, or any other public health crisis, including the COVID-19 pandemic, and efforts to contain its transmission;

•our plans to respond to the challenges presented by the COVID-19 ~~pandemic, including planned reductions of costs and increases of operating efficiencies, as well as the duration of the planned ongoing turnaround at our Petro 2 ethylene unit;~~pandemic;

•production capacities;

•the impact of ongoing supply chain constraints and workforce availability ~~(including any impacts as a result of vaccination requirements)~~ caused by the COVID-19 ~~pandemic;~~pandemic and the conflict between Russia and Ukraine;

•currency devaluation;

•our ability to borrow additional funds under our credit agreement;

•our ability to meet our liquidity needs;

•our ability to meet debt obligations under our debt instruments;

•our intended quarterly dividends;

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•future capacity additions and expansions in the industries in which we compete;

•results of acquisitions, including the results, effects and benefits of the acquisitions of the Boral Target Companies, LASCO, Dimex and ~~Dimex;~~Westlake Epoxy;

•timing, funding and results of capital projects;

•pension plan obligations, funding requirements and investment policies;

•compliance with present and future environmental regulations and costs associated with environmentally related penalties, capital expenditures, remedial actions and proceedings, including any new laws, regulations or treaties that may come into force to limit or control carbon dioxide and other greenhouse gas emissions or to address other issues of climate change;

•effects of pending legal proceedings; and

•timing of and amount of capital expenditures.

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We have based these statements on assumptions and analyses in light of our experience and perception of historical trends, current conditions, expected future developments and other factors we believe were appropriate in the circumstances when the statements were made. Forward-looking statements by their nature involve substantial risks and uncertainties that could significantly impact expected results, and actual future results could differ materially from those described in such statements. While it is not possible to identify all factors, we continue to face many risks and uncertainties. Among the factors that could cause actual future results to differ materially are the risks and uncertainties discussed under "Risk Factors" in the ~~2020~~2021 Form 10-K and those described from time to time in our other filings with the SEC including, but not limited to, the following:

•the ultimate timing, outcome and results of integrating the operations of the Boral Target Companies, LASCO, Dimex and ~~Dimex~~Westlake Epoxy and the ultimate outcome of our operating efficiencies applied to the products and services of the Boral Target Companies, LASCO, Dimex and ~~Dimex;~~Westlake Epoxy; the effects of the ~~Acquisitions,~~acquisitions, including the combined company's future financial condition, results of operations, strategy and plans; and expected synergies and other benefits from the ~~Acquisitions~~acquisitions and our ability to realize such synergies and other benefits;

•general economic and business ~~conditions;~~conditions, including inflation, interest rates and recession;

•the cyclical nature of the chemical and building products industries;

•the availability, cost and volatility of raw materials and energy;

•uncertainties associated with the United States, European and worldwide economies, including those due to political tensions and unrest in the Middle East and ~~elsewhere;~~elsewhere including the conflict between Russia and Ukraine;

•uncertainties associated with pandemic infectious diseases, particularly COVID-19;

•uncertainties associated with global warming;

•the potential impact on demand for ethylene due to initiatives such as recycling and customers seeking alternatives to polymers;

•current and potential governmental regulatory actions in the United States and other countries;

•industry production capacity and operating rates;

•the supply/demand balance for our products;

•competitive products and pricing pressures;

•instability in the credit and financial markets;

•access to capital markets;

•terrorist acts;

•operating interruptions (including leaks, explosions, fires, weather-related incidents, mechanical failure, unscheduled downtime, labor difficulties, transportation interruptions, spills and releases and other environmental risks);

•changes in laws or regulations, including trade policies;

•technological developments;

•information systems failures and cyberattacks;

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•foreign currency exchange risks;

•our ability to implement our business strategies; and

•creditworthiness of our customers.

Many of such factors are beyond our ability to control or predict. Any of the factors, or a combination of these factors, could materially affect our future results of operations and the ultimate accuracy of the forward-looking statements. These forward-looking statements are not guarantees of our future performance, and our actual results and future developments may differ materially from those projected in the forward-looking statements. Management cautions against putting undue reliance on forward-looking statements or projecting any future results based on such statements or present or prior earnings levels. Every forward-looking statement speaks only as of the date of the particular statement, and we undertake no obligation to publicly update or revise any forward-looking statements.

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Item 3. Quantitative and Qualitative Disclosures about Market Risk

Commodity Price Risk

A substantial portion of our products and raw materials (such as ethane, natural gas and propane) are commodities whose prices fluctuate as market supply and demand fundamentals change. Accordingly, product margins and the level of our profitability tend to fluctuate with changes in the business cycle. We try to protect against such instability through various business strategies. Our strategies include ethylene product feedstock flexibility and moving downstream into ~~the olefins and vinyls~~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. Based on our open derivative positions at September 30, ~~2021,~~2022, a hypothetical $0.10 increase in the price of a gallon of ethane would have increased our income before income taxes by ~~$33~~$27 million and a hypothetical $0.10 increase in the price of a ~~MMBtu~~million British thermal units of natural gas would have decreased our income before income taxes by $1 million.

Interest Rate Risk

We are exposed to interest rate risk with respect to fixed and variable rate debt. At September 30, ~~2021,~~2022, we had ~~$5,285~~$4,892 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 ~~$53~~$49 million. Also, at September 30, ~~2021,~~2022, we had ~~$17~~$24 million principal amount of variable rate debt outstanding, which ~~primarily~~ represents the term loans due 2026 and the tax-exempt waste disposal revenue ~~bonds.~~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 ~~$17~~$24 million as of September 30, ~~2021~~2022 was ~~0.11%~~1.21%. A hypothetical 100 basis point increase in the average interest rate on our variable rate debt would not result in a material change in ~~our annual~~the interest expense. During June and July 2021, in order to manage the interest rate risk associated with potential borrowings, we entered into treasury lock agreements to fix the treasury yield component of the interest cost. These agreements settled in August 2021 on the issuance of the Notes.

~~LIBOR~~Secured Overnight Financing Rate ("SOFR") is used as a reference rate for borrowings under our revolving line of credit. ~~The phase-out of LIBOR is set to commence at the end of 2021 and conclude by June 30, 2023.~~ We ~~do not expect the impact of the LIBOR phase out to be material as we do~~did not have any ~~external LIBOR-based~~SOFR-based borrowings outstanding at September 30, ~~2021.~~2022.

Foreign Currency Exchange Rate Risk

We are exposed to foreign currency exchange rate risk associated with our international operations. However, the effect of fluctuations in foreign currency exchange rates caused by our international operations has not had a material impact on our overall operating results. We may engage in activities to mitigate our exposure to foreign currency exchange risk in certain instances through the use of currency exchange derivative instruments, including forward exchange contracts, cross-currency swaps or spot purchases. A forward exchange contract obligates us to exchange predetermined amounts of specified currencies at a stated exchange rate on a stated date. A cross-currency swap obligates us to make periodic payments in the local currency and receive periodic payments in our functional currency based on the notional amount of the instrument. In January 2018, we entered into foreign exchange hedging contracts designated as net investment hedges with an aggregate notional value of €220 million designed to reduce the volatility in stockholders' equity from changes in currency exchange rates associated with our net investments in foreign operations. 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 ~~€220~~€150 million at September 30, ~~2021.~~2022. The arrangement is scheduled to mature in 2026.

In July 2019, we completed the registered public offering of €700 million aggregate principal amount of the 1.625% 2029 Senior ~~Notes due 2029.~~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.

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Item 4. Controls and Procedures

We carried out an evaluation, under the supervision and with the participation of our management, including our President and Chief Executive Officer and our Executive Vice President and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures pursuant to Rules 13a-15 or 15d-15 under the Securities Exchange Act of 1934 as of the end of the period covered by this report. Based upon that evaluation, our President and Chief Executive Officer and our Executive Vice President and Chief Financial Officer concluded that our disclosure controls and procedures are effective with respect to (i) the accumulation and communication to our management, including our Chief Executive Officer and our Chief Financial Officer, of information required to be disclosed by us in the reports that we submit under the Exchange Act, and (ii) the recording, processing, summarizing and reporting of such information within the time periods specified in the SEC's rules and forms.

There were no changes in our internal control over financial reporting that occurred during the three months ended September 30, ~~2021~~2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

The ~~2020~~2021 Form 10-K, filed on February ~~24, 2021,~~23, 2022, contained a description of various legal proceedings in which we are involved. See below and Note 14 to the unaudited consolidated financial statements within this Quarterly Report on Form 10-Q for description of certain of those proceedings, which information is incorporated by reference herein.

We and other caustic soda producers were named as defendants in multiple purported class action civil lawsuits filed since March 2019 in the U.S. District Court for the Western District of New York. The lawsuits allege the defendants conspired to fix, raise, maintain and stabilize the price of caustic soda, restrict domestic (U.S.) supply of caustic soda and allocate caustic soda customers. The other defendants named in the lawsuits are Olin Corporation, K.A. Steel Chemicals (a wholly owned subsidiary of Olin), Occidental ~~Petroleum Corporation, Occidental~~ Chemical Corporation d/b/a OxyChem, ~~Shin-Etsu Chemical Co., Ltd.,~~ Shintech Incorporated, ~~Formosa Plastics Corporation,~~ and Formosa Plastics Corporation, U.S.A. Each of the lawsuits is filed on behalf of the respective named plaintiff or plaintiffs and a putative class comprised of either direct purchasers or indirect purchasers of caustic soda in the U.S. The plaintiffs in the putative class for such direct purchasers seek $861 million in single damages from the defendants, in addition to treble damages and attorney's fees. The plaintiffs in the putative class for such indirect purchasers seek an ~~unspecified amount of~~approximately $500 million in single damages from the defendants, in addition to treble damages (if permitted under applicable state law) and injunctive relief. The defendants' joint motion to dismiss the direct purchaser lawsuits was denied and the cases have proceeded to discovery. Beginning in October 2020, similar class action proceedings were also filed in Canada before the Superior Court of Quebec as well as before the Federal Court. These proceedings seek the certification or authorization of a class action on behalf of all residents of Canada who purchased caustic soda (including, in one of the cases, those who merely purchased products containing caustic soda) from October 1, 2015 through the present or such date deemed appropriate by the court. On December 10, 2021, the Superior Court of Quebec stayed its proceedings until after a final certification decision is released in the Federal Court proceedings. At this time, we are not able to estimate the impact, if any, that these lawsuits could have on our consolidated financial statements either in the current period or in future periods.

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From time to time, we receive notices or inquiries from government entities regarding alleged violations of environmental laws and regulations pertaining to, among other things, the disposal, emission and storage of chemical substances, including hazardous wastes. 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 September 30, ~~2021)~~2022):

•For several years, the Environmental Protection Agency (the "EPA") has been conducting an enforcement initiative against petroleum refineries and petrochemical plants with respect to emissions from flares. On April 21, 2014, we received a Clean Air Act Section 114 Information Request from the EPA which sought information regarding flares at the Calvert City facility and certain Lake Charles facilities. The EPA has informed us that the information provided leads the EPA to believe that some of the flares are out of compliance with applicable standards. ~~The~~In June 2022, the Department of Justice announced that the Company, EPA ~~has indicated that it is seeking~~and state environmental agencies had reached agreement on a consent decree ~~that would obligate us~~resolving this matter. The consent decree requires the Company to ~~take corrective actions relating~~install flare gas recovery units, implement fence line monitoring, install and operate flare monitoring and control equipment to ~~the alleged noncompliance. We believe the resolution of these matters may require the payment of~~meet certain performance standards, and pay a ~~monetary sanction in excess~~penalty of $1 million. Implementation of the requirements under the decree is estimated to cost approximately $110 million, which includes capital expenditures associated with installation of the flare gas recovery units we are required to install at our Calvert City and Lake Charles facilities. The capital expenditures and other costs required to comply with the consent decree have either been incurred in 2021 or will be incurred over the course of 2022 and 2023. The 30-day federal public comment period for the consent decree has concluded, as well as the public comment period for the states. When the court enters the consent decree, it will become effective. We do not believe that the resolution of these flare matters will have a material adverse effect on our financial condition, results of operations or cash flows.

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Item 1A. Risk Factors

For a discussion of risk factors, please read Item 1A, "Risk Factors" in the ~~2020 Form 10-K and the quarterly report on Form 10-Q for the quarter ended June 30, 2021 (the "Second Quarter~~ 2021 Form ~~10-Q").~~10-K. The risk factors included below provide updates to certain risk factors described in the 2021 Form 10-K. The risks described ~~in the 2020 Form 10-K and the Second Quarter 2021 Form 10-Q~~below and in other documents that we file from time to time with the Securities and Exchange Commission could materially and adversely affect our business, results of operations, cash flow, liquidity or financial condition.

Risk Factors Relating to Our Operations

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.

External factors beyond our control can cause volatility in raw material prices, demand for our products, product prices and volumes and deterioration in operating margins. These factors can also magnify the impact of economic cycles on our business and results of operations. Examples of external factors include:

•general economic and business conditions, including in the United States, Europe and Asia, including inflation, 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 conflict between Russia and Ukraine;

•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;

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•severe weather and natural disasters; and

•credit worthiness of customers and vendors.

A number of our products are highly dependent on durable goods markets, such as housing and construction, which are themselves particularly cyclical. Weakness in the U.S. residential housing market and economic weakness in North America, Europe, Asia and the Middle East could have an adverse effect on demand and margins for our products. Further, inflationary pressures and the possibility of recession can have an unfavorable impact on the demand for housing and our products.

We may reduce production at or idle a facility for an extended period of time or exit a business because of high raw material prices, an oversupply of a particular product and/or a lack of demand for that particular product, which makes production uneconomical. Temporary outages sometimes last for several quarters or, in certain cases, longer and cause us to incur costs, including the expenses of maintaining and restarting these facilities. Factors such as increases in raw material costs or lower demand in the future may cause us to further reduce operating rates, idle facilities or exit uncompetitive businesses.

A lower level of economic activity in the United States, Europe or globally could result in a decline in demand for our products, which could adversely affect our net sales and margins and limit our future growth prospects. In addition, these risks could cause increased instability in the financial and insurance markets and could adversely affect our ability to access capital and to obtain insurance coverage that we consider adequate or is otherwise required by our contracts with third parties.

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 and construction costs continue to rise. 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 has continued to decline in the third quarter of 2022 primarily due to inflationary pricing, rapidly rising interest rates for mortgage loans and increasing construction costs. 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 COVID-19 pandemic, the conflict between Russia and Ukraine, 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. Federal Reserve policy changes.

If there is limited economic growth, a decline in employment and consumer income, a general change in consumer behavior, including as a result of the COVID-19 pandemic, the conflict between Russia and Ukraine, 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.

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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following table provides information on our ~~purchase~~purchases of ~~equity securities~~our common stock during the quarter ended September 30, ~~2021.~~2022.

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)
July 2021 175 $ 90.04 — $ 131,155,000
August 2021 148,834 84.04 148,598 118,667,000
September 2021 207,876 84.54 207,202 101,151,000
356,885 $ 84.34 355,800


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)
July 2022	51,958	$	97.37	51,330	$	55,652,979
August 2022	—	—		—	555,652,979
September 2022	321,100	85.64		321,100	528,153,475
	373,058	$	87.27	372,430

_____________

(1) Includes ~~175, 236~~628, 0 and ~~674~~0 shares withheld in July ~~2021,~~2022, August ~~2021~~2022 and September ~~2021,~~2022, respectively, in satisfaction of withholding taxes due upon the vesting of restricted stock units granted to our employees under the 2013 Omnibus Incentive Plan.

(2) In November 2014, our Board of Directors authorized a $250 million stock repurchase program (the "2014 Program"). In November 2015, our Board of Directors approved the expansion of the 2014 Program by an additional $150 million. In August 2018, ~~our~~our Board of Directors approved the further expansion of the existing 2014 Program by an additional $150 million. In August 2022, our Board of Directors approved the further expansion of the existing 2014 Program by an additional $500 million. As of September 30, ~~2021, 7,431,520~~2022, 8,216,440 shares of our common stock had been acquired at an aggregate purchase price of approximately ~~$449~~$522 million under the 2014 Program. At September 30, 2022, $5 million related to the repurchase of common stock for treasury, was included as a component of accounts payable on the consolidated balance sheet. 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. The 2014 Program may be discontinued by our Board of Directors at any time.

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Item 6. Exhibits


Exhibit No.						Exhibit Index

3.1						Amended and Restated Certificate of Incorporation of Westlake as filed with the Delaware Secretary of State on August 6, 2004 (incorporated by reference to Westlake's Registration Statement on Form S-1/A, filed on August 9, 2004).

3.2						Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Westlake as filed with the Delaware Secretary of State on May 16, 2014 (incorporated by reference to Westlake's Current Report on Form 8-K, filed on May 16, 2014, File No. 001-32260).

3.3						Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Westlake as filed with the Delaware Secretary of State on May 19, 2017 (incorporated by reference to Westlake's Current Report on Form 8-K, filed on May 19, 2017, File No. 001-32260).

3.4						Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Westlake as filed with the Delaware Secretary of State on May 14, 2021 (incorporated by reference to Westlake's Current Report on Form 8-K, filed on May 13, 2021, File No. 001-32260).

3.5						Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Westlake as filed with the Delaware Secretary of State on February 18, 2022 (incorporated by reference to Westlake's Current Report on Form 8-K, filed on February 18, 2022, File No. 001-32260).

3.6						Amended and Restated Bylaws of Westlake (incorporated by reference to Westlake's Current Report on Form 8-K, filed on February 18, 2022, File No. 001-32260).

31.1†						Rule 13a – 14(a) / 15d – 14(a) Certification (Principal Executive Officer)

31.2†						Rule 13a – 14(a) / 15d – 14(a) Certification (Principal Financial Officer)

32.1#						Section 1350 Certification (Principal Executive Officer and Principal Financial Officer)

101.INS†						XBRL Instance Document - The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

101.SCH†						XBRL Taxonomy Extension Schema Document

101.CAL†						XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF†						XBRL Taxonomy Extension Definition Linkbase Document

101.LAB†						XBRL Taxonomy Extension Label Linkbase Document

101.PRE†						XBRL Taxonomy Extension Presentation Linkbase Document

104						Cover Page Interactive Data File - The cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document and contained in Exhibit 101

† Filed herewith.

# Furnished herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

WESTLAKE ~~CHEMICAL~~ CORPORATION

Date:

November 3, ~~2021~~2022

By:

/S/ ALBERT CHAO

Albert Chao

President and Chief Executive Officer
(Principal Executive Officer)

Date:

November 3, ~~2021~~2022

By:

/S/ M. STEVEN BENDER

M. Steven Bender

Executive Vice President and Chief Financial Officer
(Principal Financial Officer)

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	Vinyls Segment		Olefins Segment		Total
Balances at December 31, 2020	$	1,053	$	30	$	1,083
Goodwill acquired during the period	172		—		172


Effects of changes in foreign exchange rates	(2)		—		(2)
Balances at September 30, 2021	$	1,223	$	30	$	1,253


	Three Months Ended September 30, 2021				Nine Months Ended September 30, 2021
	Average Sales Price		Volume		Average Sales Price		Volume
Product sales price and volume percentage change from prior-year period
Vinyls	+53.0	%	+0.5	%	+41.5	%	+3.5	%
Olefins	+88.1	%	+3.6	%	+71.8	%	-6.2	%
Company	+59.8	%	+1.1	%	+47.8	%	+1.5	%

Average Industry Prices (1)
	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020

Average domestic prices
Natural gas ($/MMBtu) (2)	4.0		2.0		3.2		1.9
Ethane (cents/lb) (3)	11.7		7.4		9.5		6.2
Propane (cents/lb) (4)	27.6		11.9		23.2		10.1
Ethylene (cents/lb) (5)	48.0		19.3		45.3		15.4
Polyethylene (cents/lb) (6)	109.0		61.0		95.3		54.1
Styrene (cents/lb) (7)	82.0		53.8		83.0		54.8
Caustic soda ($/short ton) (8)	825		697		743		681
Chlorine ($/short ton) (9)	443		176		328		176
PVC (cents/lb) (10)	109.0		73.3		102.3		70.6

Average export prices
Polyethylene (cents/lb) (11)	86.0		45.7		84.0		41.2
Caustic soda ($/short ton) (12)	364		260		315		261
PVC (cents/lb) (13)	74.1		38.5		73.2		34.3