Westlake Corp. Files Q3 2024 10-Q

TL;DR

WESTLAKE CORP Q3 2024 10-Q FILED. CHECK FINANCIALS.

AI Summary

Westlake Corp. reported its third-quarter 2024 results, with the filing dated November 6, 2024. The company's fiscal year ends on December 31st. Key financial data points and segment information are included in this 10-Q filing.

Why It Matters

This filing provides investors with the latest financial performance and operational details for Westlake Corp. during the third quarter of 2024.

Risk Assessment

Risk Level: low — This is a standard quarterly financial filing (10-Q) and does not inherently contain new, high-risk information.

Key Numbers

• 2024 Q3 — Reporting Period (Third quarter of 2024 financial reporting)
• 2024-09-30 — As of Date (End of the reporting period)
• 2023-12-31 — Previous Year End (Comparison point for financial data)

Key Players & Entities

• WESTLAKE CORP (company) — Filer
• 20240930 (date) — Period of Report
• 20241106 (date) — Filing Date
• 760346924 (company) — IRS Number
• DE (company) — State of Incorporation
• 713-960-9111 (company) — Business Phone

FAQ

Key Financial Figures

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

Filing Documents

• wlk-20240930.htm (10-Q) — 1406KB
• exhibit311_20240930.htm (EX-31.1) — 19KB
• exhibit312_20240930.htm (EX-31.2) — 19KB
• exhibit321_20240930.htm (EX-32.1) — 13KB
• 0001262823-24-000053.txt ( ) — 6631KB
• wlk-20240930.xsd (EX-101.SCH) — 41KB
• wlk-20240930_cal.xml (EX-101.CAL) — 65KB
• wlk-20240930_def.xml (EX-101.DEF) — 177KB
• wlk-20240930_lab.xml (EX-101.LAB) — 532KB
• wlk-20240930_pre.xml (EX-101.PRE) — 367KB
• wlk-20240930_htm.xml (XML) — 936KB

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 25 3)

Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures about Market Risk 41 4)

Controls and Procedures

Controls and Procedures 42

OTHER INFORMATION

PART II. OTHER INFORMATION 1)

Legal Proceedings

Legal Proceedings 42 1A)

Risk Factors

Risk Factors 42 2) Unregistered Sales of Equity Securities and Use of Proceeds 43 5) Other Information 43 6) Exhibits 44 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) September 30, 2024 December 31, 2023 (in millions of dollars, except par values and share amounts) ASSETS Current assets Cash and cash equivalents $ 2,915 $ 3,304 Accounts receivable, net 1,754 1,601 Inventories 1,747 1,622 Prepaid expenses and other current assets 133 82 Total current assets 6,549 6,609 Property, plant and equipment, net 8,602 8,519 Operating lease right-of-use assets 819 697 Goodwill 2,039 2,041 Customer relationships, net 843 910 Other intangible assets, net 469 493 Equity method investments 1,099 1,115 Other assets, net 689 651 Total assets $ 21,109 $ 21,035 LIABILITIES AND EQUITY Current liabilities Accounts payable $ 898 $ 877 Accrued and other liabilities 1,453 1,614 Current portion of long-term debt, net — 299 Total current liabilities 2,351 2,790 Long-term debt, net 4,616 4,607 Deferred income taxes 1,514 1,560 Pension and other post-retirement benefits 356 363 Operating lease liabilities 730 611 Other liabilities 356 340 Total liabilities 9,923 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 September 30, 2024 and December 31, 2023, respectively 1 1 Common stock, held in treasury, at cost; 5,952,302 and 6,439,289 shares at September 30, 2024 and December 31, 2023, respectively ( 408 ) ( 435 ) Additional paid-in capital 645 630 Retained earnings 10,541 10,143 Accumulated other comprehensive loss ( 117 ) ( 98 ) Total Westlake Corporation stockholders' equity 10,662 10,241 Noncontrolling interests 524 523 Total equity 11,186 10,764 Total liabilities and equity $ 21,109 $ 21,035 The accompanying notes are an integral part of these consolidated financial st

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, which 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 interim periods within those fiscal years. Early application is permitted. The Company adopted this accounting standard effective Januar

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: September 30, 2024 December 31, 2023 Finished products $ 1,090 $ 989 Feedstock, additives, chemicals and other raw materials 416 401 Materials and supplies 241 232 Inventories $ 1,747 $ 1,622 5. Goodwill The carrying amounts and changes in the carrying amount of goodwill for the nine months ended September 30, 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 ) Balances at September 30, 2024 $ 895 $ 1,144 $ 2,039 6. Accounts Payable Accounts payable consist of the following: September 30, 2024 December 31, 2023 Accounts payable—third parties $ 883 $ 849 Accounts payable to related parties — 15 Notes payable 15 13 Accounts payable $ 898 $ 877 11 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 consist of the following: September 30, 2024 December 31, 2023 0.875 % senior notes due 2024 $ — $ 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 781 773 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 9 13 Total long-term debt, principal amount 4,701 4,997 Less: Unamortized discount and debt issuance costs 85 91 Long-term debt, carrying value 4,616 4,906 Less current portion: 0.875 % senior notes due 2024 — 299 Long-term debt, carrying value, net of current portion $ 4,616 $ 4,607 Unamortized debt issuance costs on long-term debt were $ 33 and $ 36 at September 30, 2024 and December 31, 2023, respectively. As of September 30, 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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued (Unaudited) (in millions of dollars, except share amounts and per share data) Redemption of 0.875 % senior notes due 2024 On August 15, 2024, the Company redeemed $ 300 aggregate principal amount of its outstanding 0.875 % senior notes due August 15, 2024 at a redemption price equal to 100 % of the principal amount of the senior notes to be redeemed plus accrued and unpaid interest thereon. 8. Accumulated Other Comprehensive Income (Loss) Changes in accumulated other comprehensive income (loss) by component for the nine months ended September 30, 2024 and 2023 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, 2023 $ 4 $ ( 102 ) $ ( 98 ) Net other comprehensive income (loss) attributable to Westlake Corporation 2 ( 21 ) ( 19 ) Balances at September 30, 2024 $ 6 $ ( 123 ) $ ( 117 ) Balances at December 31, 2022 $ 52 $ ( 141 ) $ ( 89 ) Net other comprehensive income (loss) attributable to Westlake Corporation ( 13 ) ( 29 ) ( 42 ) Balances at September 30, 2023 $ 39 $ ( 170 ) $ ( 131 ) 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

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