Westlake Corp Files 10-Q for Period Ending March 31, 2024

TL;DR

<b>Westlake Corp filed its Q1 2024 10-Q report on May 2, 2024, detailing financial positions and equity changes.</b>

AI Summary

WESTLAKE CORP (WLK) filed a Quarterly Report (10-Q) with the SEC on May 2, 2024. Filing is a 10-Q for Westlake Corp covering the period from January 1, 2024, to March 31, 2024. The company's SIC code is INDUSTRIAL ORGANIC CHEMICALS [2860]. Westlake Corp is incorporated in Delaware with its fiscal year ending December 31. The filing includes data related to common stock, treasury stock, additional paid-in capital, retained earnings, accumulated other comprehensive income, and noncontrolling interest for various periods. Key dates mentioned include the filing date of May 2, 2024, and the period of report as March 31, 2024.

Why It Matters

For investors and stakeholders tracking WESTLAKE CORP, this filing contains several important signals. This 10-Q filing provides a quarterly update on Westlake Corp's financial health and operational performance, crucial for investors to assess recent trends and make informed decisions. The detailed breakdown of equity components and segment information (though incomplete in the provided text) allows stakeholders to understand the company's capital structure and the performance drivers of its business segments.

Risk Assessment

Risk Level: low — WESTLAKE CORP shows low risk based on this filing. The provided text is a header and index of a 10-Q filing, lacking specific financial performance data or forward-looking statements, thus making a definitive risk assessment impossible.

Analyst Insight

Review the full 10-Q filing to analyze Westlake Corp's financial statements, management discussion, and risk factors for a comprehensive understanding of its current business status.

Key Numbers

• 2024-03-31 — Period of Report (Conformed period of report)
• 2024-05-02 — Filing Date (Filed as of date)
• 2860 — SIC Code (Standard Industrial Classification)

Key Players & Entities

• WESTLAKE CORP (company) — Filer name
• 2801 POST OAK BLVD (location) — Business address street 1
• HOUSTON (location) — Business address city
• DE (location) — State of incorporation
• 2024-05-02 (date) — Filed as of date
• 2024-03-31 (date) — Conformed period of report
• INDUSTRIAL ORGANIC CHEMICALS (industry) — Standard Industrial Classification
• 713-960-9111 (phone) — Business phone

FAQ

Industry Context

Westlake Corp operates within the Industrial Organic Chemicals sector (SIC 2860), indicating its focus on the production and distribution of chemicals used in various industrial applications.

Regulatory Implications

As a publicly traded company, Westlake Corp is subject to SEC regulations, including the requirement to file quarterly reports (10-Q) to disclose financial and operational information.

What Investors Should Do

1. Analyze the complete financial statements within the 10-Q for revenue, net income, and cash flow.
2. Examine the Management's Discussion and Analysis (MD&A) section for insights into business performance and outlook.
3. Review the Risk Factors section for potential challenges and uncertainties facing Westlake Corp.

Key Dates

• 2024-05-02: Filing Date — Submission of the 10-Q report for Q1 2024.
• 2024-03-31: Period End Date — End of the reporting period for the 10-Q.

Year-Over-Year Comparison

This filing is a 10-Q for the first quarter of 2024, providing an update compared to previous filings which would include the prior year's Q1 and the full year 2023 10-K.

Key Financial Figures

• $0.01 — ange on which registered Common Stock, $0.01 par value WLK The New York Stock Exchan

Filing Documents

• wlk-20240331.htm (10-Q) — 1077KB
• exhibit311_20240331.htm (EX-31.1) — 19KB
• exhibit312_20240331.htm (EX-31.2) — 19KB
• exhibit321_20240331.htm (EX-32.1) — 13KB
• 0001262823-24-000025.txt (&nbsp;) — 5730KB
• wlk-20240331.xsd (EX-101.SCH) — 40KB
• wlk-20240331_cal.xml (EX-101.CAL) — 64KB
• wlk-20240331_def.xml (EX-101.DEF) — 161KB
• wlk-20240331_lab.xml (EX-101.LAB) — 505KB
• wlk-20240331_pre.xml (EX-101.PRE) — 347KB
• wlk-20240331_htm.xml (XML) — 746KB

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION Item 1)

Financial Statements

Financial Statements 1 2)

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 22 3)

Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures about Market Risk 34 4)

Controls and Procedures

Controls and Procedures 35

OTHER INFORMATION

PART II. OTHER INFORMATION 1)

Legal Proceedings

Legal Proceedings 35 1A)

Risk Factors

Risk Factors 35 2) Unregistered Sales of Equity Securities and Use of Proceeds 36 5) Other Information 36 6) Exhibits 37 Table of Contents

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements 1 Table of Contents WESTLAKE CORPORATION CONSOLIDATED BALANCE SHEETS (Unaudited) March 31, 2024 December 31, 2023 (in millions of dollars, except par values and share amounts) ASSETS Current assets Cash and cash equivalents $ 3,108 $ 3,304 Accounts receivable, net 1,691 1,601 Inventories 1,661 1,622 Prepaid expenses and other current assets 66 82 Total current assets 6,526 6,609 Property, plant and equipment, net 8,523 8,519 Operating lease right-of-use assets 706 697 Goodwill 2,037 2,041 Customer relationships, net 889 910 Other intangible assets, net 481 493 Equity method investments 1,104 1,115 Other assets, net 694 651 Total assets $ 20,960 $ 21,035 LIABILITIES AND EQUITY Current liabilities Accounts payable $ 891 $ 877 Accrued and other liabilities 1,464 1,614 Current portion of long-term debt, net 300 299 Total current liabilities 2,655 2,790 Long-term debt, net 4,590 4,607 Deferred income taxes 1,544 1,560 Pension and other post-retirement benefits 353 363 Operating lease liabilities 622 611 Other liabilities 343 340 Total liabilities 10,107 10,271 Commitments and contingencies (Note 13) Stockholders' equity 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 March 31, 2024 and December 31, 2023, respectively 1 1 Common stock, held in treasury, at cost; 6,082,171 and 6,439,289 shares at March 31, 2024 and December 31, 2023, respectively ( 414 ) ( 435 ) Additional paid-in capital 624 630 Retained earnings 10,252 10,143 Accumulated other comprehensive loss ( 132 ) ( 98 ) Total Westlake Corporation stockholders' equity 10,331 10,241 Noncontrolling interests 522 523 Total equity 10,853 10,764 Total liabilities and equity $ 20,960 $ 21,035 The accompanying notes are an integral part of these consolidated financial statements.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 (the "Company"), included in the annual report on Form 10-K for the fiscal year ended December 31, 2023 (the "2023 Form 10-K"), filed with the SEC on February 22, 2024. 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, 2023. The Company operates as an integrated global manufacturer and marketer of performance and essential materials and housing and infrastructure products. These products include some of the most widely used materials in the world, which are fundamental to many diverse consumer and industrial markets, including residential construction, flexible and rigid packaging, automotive products, healthcare products, materials used in turbines to generate wind energy, water treatment, coatings as well as other durable and non-durable goods. The Company's customers range from large chemical processors and plastics fabricators to small construction contractors, municipalities and supply warehouses throughout North America, Europe and Asia. In the opinion of the Company's management, the accompanying unaudited consolidated interim financial statements reflect all adjust

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued (Unaudited) (in millions of dollars, except share amounts and per share data) Recently Adopted Accounting Standards Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (ASU 2023-07) In November 2023, the FASB issued accounting standards update No. 2023-07 to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The update requires public entities to disclose, on an annual and interim basis, significant segment expenses that are regularly provided to the chief operating decision maker (CODM), the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. The amendments in this update are effective for public entities in fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, and are to be applied retrospectively to all prior periods presented in the financial statements. Early adoption is permitted. The Company adopted this accounting standard effective January 1, 2024, and the adoption will result in additional segment disclosures in the Company's annual consolidated financial statements for the year ending December 31, 2024 and the interim periods thereafter. Leases (Topic 842): Common Control Arrangements (ASU 2023-01) In March 2023, the FASB issued accounting standards update No. 2023-01 to amend certain provisions of ASC 842 that apply to arrangements between related parties under common control. The update requires all companies to amortize leasehold improvements associated with common control leases over the asset's useful life to the common control group regardless of the lease term. The amendment in this update is effective for all entities in fiscal years beginning after December 15, 2023, including in

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued (Unaudited) (in millions of dollars, except share amounts and per share data) 4. Inventories Inventories consist of the following: March 31, 2024 December 31, 2023 Finished products $ 1,055 $ 989 Feedstock, additives, chemicals and other raw materials 372 401 Materials and supplies 234 232 Inventories $ 1,661 $ 1,622 5. Goodwill The carrying amounts and changes in the carrying amount of goodwill for the three months ended March 31, 2024 were as follows: Performance and Essential Materials Segment Housing and Infrastructure Products Segment Total Balances at December 31, 2023 $ 897 $ 1,144 $ 2,041 Effects of changes in foreign exchange rates ( 2 ) ( 2 ) ( 4 ) Balances at March 31, 2024 $ 895 $ 1,142 $ 2,037 6. Accounts Payable Accounts payable consist of the following: March 31, 2024 December 31, 2023 Accounts payable—third parties $ 871 $ 849 Accounts payable to related parties 12 15 Notes payable 8 13 Accounts payable $ 891 $ 877 10 Table of Contents WESTLAKE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued (Unaudited) (in millions of dollars, except share amounts and per share data) 7. Long-Term Debt Long-term debt consists of the following: March 31, 2024 December 31, 2023 0.875 % senior notes due 2024 $ 300 $ 300 3.60 % senior notes due 2026 750 750 Loan related to tax-exempt waste disposal revenue bonds due 2027 11 11 1.625 % 700 million senior notes due 2029 756 773 3.375 % senior notes due 2030 300 300 3.50 % senior notes due 2032 250 250 2.875 % senior notes due 2041 350 350 5.00 % senior notes due 2046 700 700 4.375 % senior notes due 2047 500 500 3.125 % senior notes due 2051 600 600 3.375 % senior notes due 2061 450 450 Term loans due 2026 12 13 Total long-term debt, principal amount 4,979 4,997 Less: Unamortized discount and debt issuance costs 89 91 Long-term debt, carrying value 4,890 4,906 Less current portion: 0.875 % senior notes due 2024 300 299 Long-term debt, carrying value, net of current portion $ 4,590 $ 4,607 Unamortized debt issuance costs on long-term debt were $ 35 and $ 36 at March 31, 2024 and December 31, 2023, respectively. As of March 31, 2024, the Company was in compliance with all of its long-term debt covenants. Credit Agreement On June 9, 2022, the Company entered into a new $ 1,500 revolving credit facility that is scheduled to mature on June 9, 2027 (the "Credit Agreement") and, in connection therewith, terminated the Company's then existing revolving credit agreement. The Credit Agreement bears interest at either (a) Adjusted Term Secured Overnight Financing Rate (as defined in the Credit Agreement) plus a margin ranging from 1.00 % to 1.625 % per annum or (b) Alternate Base Rate (as defined in the Credit Agreement) plus a margin ranging from 0.00 % to 0.625 % per annum, in each case depending on the credit rating of the Company. The Credit Agreement contains certain affirmative and negative covenants, including a quarterly total levera

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued (Unaudited) (in millions of dollars, except share amounts and per share data) 8. Accumulated Other Comprehensive Income (Loss) Changes in accumulated other comprehensive income (loss) by component for the three months ended March 31, 2024 and 2023 were as follows: Pension and Other Post-Retirement Benefits Liability, Net of Tax Cumulative Foreign Currency Exchange, Net of Tax Other, Net of Tax Total Balances at December 31, 2023 $ 4 $ ( 102 ) $ — $ ( 98 ) Net other comprehensive income (loss) attributable to Westlake Corporation 1 ( 35 ) — ( 34 ) Balances at March 31, 2024 $ 5 $ ( 137 ) $ — $ ( 132 ) Balances at December 31, 2022 $ 52 $ ( 141 ) $ — $ ( 89 ) Net other comprehensive income (loss) attributable to Westlake Corporation — 23 ( 1 ) 22 Balances at March 31, 2023 $ 52 $ ( 118 ) $ ( 1 ) $ ( 67 ) 9. 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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued (Unaudited) (in millions of dollars, except share amounts and per share data) 10. Income Taxes The effective income tax rate was 20.6 % for the three months ended March 31, 2024 as compared to 21.1 % for the three months ended March 31, 2023. The effective income tax rate for the three months ended March 31, 2024 was below the statutory rate of 21.0 % primarily due to U.S. federal research and development credits available to the Company, partially offset by state and foreign taxes. The effective income tax rate for the three months ended March 31, 2023 was above the statutory rate of 21.0 % primarily due to state and foreign taxes partially offset by U.S. federal research and development credits available to the Company. On October 8, 2021, the Organization for Economic Co-operation and Development (the "OECD")/G20 Inclusive Framework on Base Erosion and Profit Shifting released a statement indicating that its members had agreed to a Two – Pillar Solution to Address the Tax Challenges Arising from the Digitalisation of the Economy. Pillar One aims to reallocate a taxpayer's residual profits to the market jurisdictions with which the taxpayer has a nexus. Pillar Two aims to establish a minimum global tax rate of 15%, assessed through a top-up tax imposed on a country-by-country basis. Pillar One targets multinational companies with global annual revenue exceeding 20 billion and profit-to-revenue ratio of more than 10%. Based on the current threshold requirements, the Company does not expect to be subject to Pillar One. On December 20, 2021, the OECD released the Pillar Two model rules providing a framework for implementing a 15% minimum tax, also referred to as the Global Anti-Base Erosion ("GloBE") rules, on earnings of multinational companies with consolidated annual revenue exceeding 750 million. On December 12, 2022, European Union (EU) member states agreed to adopt the 15% minimum tax under the Pillar

View Full Filing

View this 10-Q filing on SEC EDGAR