Westlake Annual Report 2023

FY2023 Annual Report · Westlake

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2023
Annual
Report

Enhancing your life every day®

Dear Shareholders,

chain. These investments combined with our strong
market positions serve global demand with Westlake’s
materials and products that enhance life every day.

Our commitment to sustainability is deeply embedded
in Westlake’s core values. In 2022, we set an ambitious
target to reduce our Scope 1 and Scope 2 carbon-
dioxide equivalent (CO2) emission per ton of production
by 2030 from a 2016 baseline. We are pleased to
report that, as of December 31, 2022, we achieved
a reduction of 18% in our Scope 1 and Scope 2 GHG
emissions intensity from our 2016 intensity baseline.
This illustrates strong progress toward our 2030
target. We continue to research economically feasible
technologies, which could help us establish a path to
reach operational net zero carbon on or before 2050.

In the future, we will continue our sustainability
strategy by commercializing new product innovations
and expanding our portfolio of products, which include
lower-carbon GreenVin® PVC and caustic soda, both of
which are produced with renewable energy; Azures™
products, which are epoxy resins, modifiers, and curing
agents that are free of any SVHC- and CMR-labelled
substances; and Pivotal™ polyethylene resin, which
contains post-consumer content.

As always, we remain anchored to our values and
purpose: To protect the heath and safety of our
employees, deliver on our commercial commitments,
and provide value to our shareholders. We are focused
on these values to ensure we are well positioned
and always working to provide value to all of our
stakeholders. We are grateful to our shareholders,
employees and their families, customers, and to
the communities that we work and live in, whose
contributions make us a continued success.

Albert Chao
President and Chief
Executive Officer

James Chao
Chairman of the Board
of Directors

As we reflect on the past year, we are pleased to share
our progress on key initiatives and achievements with
you. Despite the challenges posed by the global macro-
economic environment, Westlake Corporation remained
resilient and focused on delivering sustainable value
creation for our investors, serving our customers,
managing costs, and continuing to make strategic
investments that strengthen our business.

Net sales for the year 2023 were $12.5 billion with
net income of $479 million or $3.70 per share.
Earnings before interest, taxes, and depreciation and
amortization (EBITDA) were $2 billion. Our focus on
cash flow generation enabled Westlake to generate
$2.3 billion of cash from operations and $1.3 billion of
free cash flow after investing over $1 billion to maintain
and improve our manufacturing facilities. Our strong
cash flow generation, the strength of our business, and
confidence in the future allowed us to return over $240
million to shareholders in 2023, including an increase
of our quarterly dividend by 40%. As of December
31, 2023, cash and cash equivalents were $3.3 billion
and total debt was $4.9 billion, with our net leverage
remaining below one turn of EBITDA. Westlake’s debt is
at an attractive average fixed rate of 3.2% and average
maturity of approximately 16 years with an investment-
grade-rated balance sheet. These aspects put Westlake
in a financially strong position at any stage of the
business cycle and enable us to make decisions to
maximize long-term value irrespective of discrete
market conditions.

Our Housing & Infrastructure Products (HIP) segment
reported record annual income from operations of
$710 million with a 23% EBITDA margin. We are very
pleased with the evolution and financial performance
of our HIP segment, which produced back-to-back
record results over the past two years despite the
economic challenges in the residential housing and
building products market. This strong HIP performance
illustrates the benefits of our vertical integration and
diversification strategy. These record results provided
stability to our overall earnings in 2023 with an asset-
lite, cash-generation business model with leading
market positions and consumer recognition in our
product categories.

We have continued to implement our focused strategy
in the Performance & Essential Materials (PEM) segment
by enhancing our global low-cost manufacturing
position, extending our integrated manufacturing chain,
and enhancing our more downstream and differentiated
product positions through technology-led acquisitions
such as Westlake Epoxy. This focus and investment
allow us to better serve our customers with leading
technology and know-how and to add more value.
We have also continued to invest in extending our
manufacturing integration by making investments in
2023 to expand our chlor-akali and PVC production

WESTLAKE | 2023 Annual Report

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-K

È ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended December 31, 2023

‘ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF

1934
For the Transition Period from

Commission File No. 001-32260

Westlake Corporation

(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of
incorporation or organization)

76-0346924
(I.R.S. Employer
Identification No.)

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:
Trading Symbol(s)

Name of each exchange on which registered

Title of each class

Common Stock, $0.01 par value
1.625% Senior Notes due 2029

WLK
WLK29

The New York Stock Exchange
The New York Stock Exchange

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities

Act. Yes È No ‘

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange

Act. Yes ‘ No È

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 È 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 È 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 È
Non-accelerated filer ‘

‘
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 has filed a report on and attestation to its management’s assessment of the
effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by
the registered public accounting firm that prepared or issued its audit report. È

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the

registrant included in the filing reflect the correction of an error to previously issued financial statements. ‘

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-

based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to
§240.10D-1(b). ‘

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ‘ No È
The aggregate market value of the registrant’s voting stock held by non-affiliates of the registrant on June 30, 2023, the end
of the registrant’s most recently completed second fiscal quarter, based on a closing price on June 30, 2023 of $119.47 on the New
York Stock Exchange was approximately $3.9 billion.

There were 128,216,207 shares of the registrant’s common stock outstanding as of February 14, 2024.

DOCUMENTS INCORPORATED BY REFERENCE:
Certain information required by Part II and Part III of this Form 10-K is incorporated by reference from the registrant’s

definitive Proxy Statement to be filed pursuant to Regulation 14A with respect to the registrant’s 2024 Annual Meeting of
Stockholders to be held on May 9, 2024.

TABLE OF CONTENTS

PART I

Item

1) Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1A) Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1B) Unresolved Staff Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1C) Cybersecurity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2)
3)
Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4) Mine Safety Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Information about our Executive Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

PART II

5) Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases

of Equity Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6)
[Reserved] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7) Management’s Discussion and Analysis of Financial Condition and Results of Operations . . .
7A) Quantitative and Qualitative Disclosures about Market Risk . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial Statements and Supplementary Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8)
9) Changes in and Disagreements with Accountants on Accounting and Financial Disclosure . . .
9A) Controls and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9B) Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9C) Disclosure Regarding Foreign Jurisdictions that Prevent Inspections . . . . . . . . . . . . . . . . . . . .

PART III

10) Directors, Executive Officers and Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
11)
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
12)
Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13) Certain Relationships and Related Transactions, and Director Independence . . . . . . . . . . . . . .
Principal Accountant Fees and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
14)

PART IV

15)
16)

Exhibits and Financial Statement Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Form 10-K Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Page

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128
128

128
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128

129
132

References in this Annual Report on Form 10-K (this “report”) to “we,” “our,” “us” or like terms refer to

Westlake Corporation (“Westlake” or the “Company”).

Explanatory Note

Cautionary Statements about 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 Form 10-K are forward-looking statements. All
statements, other than statements of historical facts, included in this Form 10-K 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:

(cid:129)

the ultimate timing, outcome and results of integrating the operations of acquisitions and the ultimate
outcome of our operating efficiencies applied to the products and services; the effects of the
acquisition, including the combined company’s future financial condition, results of operations,
strategy and plans; and expected synergies and other benefits from the acquisition and our ability to
realize such synergies and other benefits;

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

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

(cid:129) macroeconomic outlook, including rising interest rates, inflation and possible recession;

(cid:129)

widespread outbreak of an illness or any other communicable disease, or any other public health
crisis;

production capacities;

the impact of uncertainties and ongoing supply chain constraints caused by the Panama Canal
reduced transit capacity and conflicts in the Middle East and between Russia and Ukraine;

currency devaluation;

our ability to borrow 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;

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

results of acquisitions;

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;

(cid:129)

recovery of losses under our insurance policies;

effects of pending legal proceedings and settlements; and

timing of and amount of capital expenditures.

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” and those described from time to time in
our other filings with the SEC including, but not limited to, the following:

(cid:129)

general economic and business conditions, including inflation, interest rates and possible 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 conflict in the Middle East, Russia and Ukraine and elsewhere;

uncertainties associated with pandemic infectious diseases;

uncertainties associated with climate change;

the potential impact on demand for ethylene, polyethylene and polyvinyl chloride 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;

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.

Industry and Market Data

Industry and market data used throughout this Form 10-K were obtained through internal company
research, surveys and studies conducted by unrelated third parties and publicly available industry and general
publications. We have not independently verified market and industry data from external sources. While we
believe internal company estimates are reliable and market definitions are appropriate, neither such estimates nor
these definitions have been verified by any independent sources.

Production Capacity

Unless we state otherwise, annual production capacity estimates used throughout this Form 10-K represent

rated capacity of the facilities at December 31, 2023. We calculated rated capacity by estimating the number of
days in a typical year that a production unit of a plant is expected to operate, after allowing for downtime for
regular maintenance, and multiplying that number by an amount equal to the unit’s optimal daily output based on
the design feedstock mix. Because the rated capacity of a production unit is an estimated amount, actual
production volumes may be more or less than the rated capacity.

iii

Item 1. Business

General

PART I

We are a vertically integrated global manufacturer and marketer of performance and essential materials and
housing and infrastructure products that enhance the lives of people every day. Our 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, water treatment, wind turbines, coatings as well as other durable and non-durable goods. We operate in
two principal operating segments, Performance and Essential Materials and Housing and Infrastructure Products.
Performance and Essential Materials includes Westlake North American Vinyls, Westlake North American
Chlor-alkali & Derivatives, Westlake European & Asian Chlorovinyls, Westlake Olefins, Westlake Polyethylene
and Westlake Epoxy. Housing and Infrastructure Products includes Westlake Royal Building Products, Westlake
Pipe & Fittings, Westlake Global Compounds and Westlake Dimex. We are highly integrated along our materials
chain with significant downstream integration from ethylene and chlor-alkali (chlorine and caustic soda) into
vinyls, polyethylene 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.

We began operations in 1986. Since 1986, we have grown rapidly into an integrated global producer of

chemicals and building products. We achieved this growth by acquiring existing plants or constructing new
plants and completing numerous capacity or production line expansions. We regularly consider acquisitions and
other internal and external growth opportunities that would be consistent with, or complementary to, our overall
business strategy.

In 2014, we formed Westlake Chemical Partners LP (“Westlake Partners”) to operate, acquire and develop

ethylene production facilities and related assets. Also in 2014, Westlake Partners completed an initial public
offering of common units (the “Westlake Partners IPO”). As of February 14, 2024, Westlake Partners’ assets
consisted of a 22.8% limited partner interest in Westlake Chemical OpCo LP (“OpCo”), as well as the general
partner interest in OpCo. Prior to the Westlake Partners IPO, OpCo’s assets were wholly-owned by us. OpCo’s
assets include two ethylene production facilities at our olefins facility in Lake Charles, one ethylene production
facility at our Calvert City site and a 200-mile common carrier ethylene pipeline that runs from Mont Belvieu,
Texas to the Longview, Texas site, which includes our Longview polyethylene production facility. We retain a
77.2% limited partner interest in OpCo, a 40.1% limited partner interest in Westlake Partners (consisting of
14,122,230 common units), a general partner interest in Westlake Partners and incentive distribution rights. The
operations of Westlake Partners are consolidated in our financial statements. We are party to certain agreements
with Westlake Partners and OpCo whereby, among other things, OpCo sells us 95% of the ethylene it produces
on a cost-plus basis that is expected to generate a fixed margin per pound of $0.10. We use this ethylene in the
production processes of our Performance and Essential Materials segment. For more information, see “—
Performance and Essential Materials Business” below.

On November 12, 2019, we completed the acquisition of an additional 34.8% of the membership interests
in LACC, LLC (“LACC”) from Lotte Chemical USA Corporation, a subsidiary of Lotte Chemical Corporation
(“Lotte”), for approximately $817 million (the “Transaction”). Prior to the Transaction, we owned approximately
12% of the membership interests in LACC. On March 15, 2022, the Company completed the acquisition of an
additional 3.2% membership interest in LACC from Lotte for approximately $89 million. As of December 31,
2023, we owned an aggregate 50% membership interest in LACC. The LACC ethylene plant has 2.2 billion

pounds per year of ethylene production capacity and is adjacent to our chlor-alkali facility in Lake Charles. We
receive our proportionate share of LACC’s ethylene production on a cash-cost basis, which is expected to benefit
our integrated downstream operations.

On June 20, 2021, we, through one of our wholly-owned subsidiaries, entered into an 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”), and, solely for the limited purposes set forth therein, we and Boral Limited, an
Australian corporation (“Boral”). Pursuant to the terms of the Boral Purchase Agreement, we agreed to acquire
from Boral Industries all 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”). On October 1, 2021, we completed the acquisition of the
Boral Target Companies. The total consideration was $2,140 million in an all-cash transaction. The assets
acquired and liabilities assumed and the results of operations of this business are included in the Housing and
Infrastructure Products segment.

On August 19, 2021, we completed the acquisition of, and acquired all of the equity interests in LASCO

Fittings, Inc. (“LASCO”), a manufacturer of injected-molded PVC fittings that serve the plumbing, pool and spa,
industrial, irrigation and retail markets in the United States from Aalberts U.S. Holding Corp. and Aalberts N.V.
(the “LASCO Acquisition”). The total consideration was $277 million. The assets acquired and liabilities
assumed and the results of operations of LASCO are included in the Housing and Infrastructure Products
segment.

On September 10, 2021, we completed the acquisition of, and acquired all of the equity interests in,
DX Acquisition Corp. (“Dimex”), 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 The total consideration was
$172 million. The assets acquired and liabilities assumed and the results of operations of Dimex are included in
the Housing and Infrastructure Products segment.

On February 1, 2022, we completed the acquisition of the global epoxy business of Hexion Inc. (“Westlake
Epoxy”) for a total consideration of $1,207 million. The assets acquired and liabilities assumed and the results of
operations of Westlake Epoxy are included in the Performance and Essential Materials segment. During the
fourth quarter of 2023, the Westlake Epoxy business’s sales volumes and prices, specifically base epoxy resins in
Europe, continued to deteriorate. These lower sales volumes and prices were primarily driven by record exports
at lower prices of bisphenol-A, epichlorohydrin and base epoxy resins (constituting the epoxy value chain) out of
Asia into Europe and North America during the time when demand in the European market was contracting. In
addition, Westlake Epoxy operations in Europe have experienced sustained high energy and power costs. These
factors negatively impacted Westlake Epoxy financial results during 2023. Based on these developments, along
with management’s outlook for the Westlake Epoxy business over the foreseeable future, we determined, in the
fourth quarter of 2023, that the carrying amount of long-lived assets of our base epoxy resin business in the
Netherlands and all of the goodwill of the Westlake Epoxy business will not be recoverable. As a result of this
assessment, a goodwill impairment charge of $128 million and a non-cash long-lived asset impairment charge
related to Epoxy Netherlands base epoxy resin business assets of $347 million were recognized in the fourth
quarter of 2023.

As a global manufacturer of products in the performance and essential materials and housing and

infrastructure products businesses, we continue to build on our core strengths in delivering high-value, essential
products for our customers and endeavor to produce and deliver these products in increasingly-sustainable ways.
To further these objectives, we endeavor to reduce the environmental footprint of our operations and enhance the
circularity in more of our products, including continuing to focus on recycling opportunities within our
businesses, reducing waste at our facilities, incorporating more recycled content into our products, and seeking to
incorporate renewable and bio-based materials. We established a target 20% reduction in our Scope 1 and Scope
2 CO2 equivalent emissions intensity per ton of production by 2030 from a 2016 baseline. As of December 31,
2022, we had achieved a reduction of approximately 18% in such emissions intensity from our 2016 baseline.

Performance and Essential Materials Business

Products

Principal products in our integrated Performance and Essential Materials segment include ethylene,

polyethylene, styrene, chlor-alkali (chlorine and caustic soda), chlorinated derivative products, ethylene
dichloride (“EDC”), vinyl chloride monomer (“VCM”) and PVC. We manage our integrated vinyls production
chain to optimize product margins and capacity utilization.

We manufacture ethylene through three of the OpCo plants and our portion of LACC’s production capacity

located in Lake Charles and Calvert City. Chlor-alkali materials are produced at our three plants located in Lake
Charles, two plants located in Germany and one plant each located in Calvert City, Plaquemine, Geismar,
Natrium, Longview and Beauharnois. Our VCM is produced at our two plants in Lake Charles, two plants
located in Germany and one plant each at Calvert City, Plaquemine and Geismar. Our PVC is produced at our
four plants located in Germany and one plant each at Calvert City, Plaquemine, Geismar and Aberdeen.
Polyethylene and associated products are produced at our two polyethylene plants in Lake Charles and three
polyethylene plants and a specialty polyethylene wax plant at our Longview site. Our chlorinated derivative
products are produced at our plants in Lake Charles and Natrium. Styrene monomer is produced at our plant
located in our Lake Charles facility. Epoxy Specialty Resins are produced at two plants located in Germany, two
plants in the United States, one plant in Spain and one plant in South Korea. Base Epoxy Resins and
Intermediaries are produced at our plants in Pernis, the Netherlands and Deer Park, United States. Our other
Asian manufacturing facilities are located near Shanghai, in China, and in Kaohsiung, Taiwan, through our 95%-
and 60%-owned joint ventures, respectively, where we produce chlor-alkali, PVC and associated products. As of
February 14, 2024, we (directly and through OpCo, our investment in LACC, and our 95%- and 60%-owned
joint ventures in China and Taiwan, respectively) had approximately 43.3 billion pounds per year of aggregate
production capacity at numerous manufacturing sites in North America, Europe and Asia in our Performance and
Essential Materials segment.

The following table illustrates our Performance and Essential Materials segment production capacities at

February 14, 2024 by principal product and the end uses of these products:

Product (1)

Ethylene (3) . . . . . . . . . . . .

Chlorine . . . . . . . . . . . . . .

Annual

Capacity (2) End Uses

(Millions of
pounds)

4,820 VCM, polyethylene, EDC,
styrene, ethylene oxide/
ethylene glycol

7,400 VCM, EDC, organic/inorganic
chemicals, bleach and water
treatment

Caustic Soda . . . . . . . . . .

8,140 Pulp and paper, organic/

inorganic chemicals,
neutralization and alumina

VCM . . . . . . . . . . . . . . . .

7,940 PVC, PVC Compounds

Specialty PVC . . . . . . . . .

980 Automotive sealants, cable

sheathing, medical applications
and other applications

Principal Manufacturing Facilities (4) (5) (6)

Calvert City, Kentucky
Lake Charles, Louisiana

Calvert City, Kentucky
Geismar, Louisiana
Lake Charles, Louisiana
Plaquemine, Louisiana
Natrium, West Virginia
Gendorf and Knapsack, Germany

Calvert City, Kentucky
Geismar, Louisiana
Lake Charles, Louisiana
Plaquemine, Louisiana
Gendorf and Knapsack, Germany

Burghausen, Cologne, and Gendorf,
Germany

Commodity PVC . . . . . . .

6,820 Construction materials including
pipe, siding, profiles for
windows and doors, film and
sheet for packaging and other
applications

Calvert City, Kentucky
Geismar, Louisiana
Plaquemine, Louisiana
Aberdeen, Mississippi
Cologne and Knapsack, Germany

Low-Density Polyethylene
. . . . . . . . . . .

(“LDPE”)

1,500 High clarity packaging and bags,

shrink films, food packaging,
coated paper board, cup stock,
paper folding cartons, lids,
closures and general purpose
molding

Lake Charles, Louisiana
Longview, Texas

Linear Low-Density

Polyethylene
(“LLDPE”) . . . . . . . . . .

1,070 Heavy-duty films and bags,

general purpose liners

Lake Charles, Louisiana
Longview, Texas

Product (1)

Annual

Capacity (2) End Uses

(Millions of
pounds)

Chlorinated Derivative

Materials . . . . . . . . . . . .

2,190 Coatings, flavorants, films,

refrigerants, water treatment
applications, chemicals and
pharmaceutical production

Principal Manufacturing Facilities (4) (5) (6)

Lake Charles, Louisiana
Natrium, West Virginia

Styrene . . . . . . . . . . . . . . .

570 Consumer disposables,

Lake Charles, Louisiana

Epoxy Specialty

Resins . . . . . . . . . . . . . .

Base Epoxy Resins and

Intermediaries
(BERI) . . . . . . . . . . . . . .

packaging material, appliances,
paints and coatings, resins and
building materials

580 Protective Coatings and
Adhesive Applications;
Building and bridge
construction, flooring,
transportation, oil & gas

Electrical Applications;

Generators and bushings,
transformers, medium and
high-voltage switch gear
components

Composites Epoxy Resins; Wind
energy, automotive, aerospace,
construction, industrial
applications

1,280 Electrocoat; Automotive, general

industry

Powder coatings; White goods,

pipes for oil and gas
transmission, general industry

Heat Cured Coatings; Metal

packaging and coil coated steel
for construction and general
industry

Lakeland, Florida
Argo, Illinois
Duisburg and Esslingen, Germany
Onsan, South Korea
Barbostro, Spain

Deer Park, Texas
Pernis, Rotterdam, The Netherlands

(1)

(2)

(3)

EDC, a VCM intermediate product, is not included in the table.

Includes capacity related to our 95%- and 60%-owned Asian joint ventures.

Includes production capacity in Lake Charles and Calvert City owned by OpCo and our portion of LACC’s
production capacity in Lake Charles. For additional information on OpCo, see “Ethylene” below.

(4)

Except as noted in notes (5) and (6) below, we own each of these facilities.

(5) We lease the land on which our Gendorf, Burghausen, Knapsack, Cologne and Esslingen, Germany

facilities, Pernis, Rotterdam, The Netherlands facility, Longview and Deer Park, Texas facilities and Argo,
Illinois facility are located. We also lease the Esslingen, Germany building.

(6) We lease a portion of the land on which our Aberdeen and Calvert City facilities are located.

Ethylene. Ethylene is the world’s most widely used petrochemical in terms of volume. It is the key building

block used to produce a large number of higher value-added chemicals including polyethylene, EDC, VCM and
styrene. OpCo has the capacity to produce approximately 3.0 billion pounds of ethylene per year at our Lake
Charles site, and we have the capability to consume all of OpCo’s production that we purchase at Lake Charles to
produce EDC, VCM, polyethylene and styrene monomer. In addition, we (through OpCo) produce ethylene
co-products including chemical grade propylene, crude butadiene, pyrolysis gasoline and hydrogen. We (through
OpCo) sell our entire output of these co-products to external customers. The ethylene from OpCo’s facility in
Calvert City and LACC is utilized to produce VCM at our facilities. We obtain the remainder of the ethylene we
need for our business from third party purchases. The use of ethane feedstock by our ethylene plants enables us
to enhance our low-cost materials chain integration.

Chlorine and Caustic Soda. We are the second-largest chlor-alkali producer in the world. We combine salt

and electricity to produce chlorine and caustic soda, commonly referred to as chlor-alkali, at our Lake Charles,
Plaquemine, Natrium, Calvert City, Geismar, Beauharnois, Longview (WA), Gendorf, Knapsack and Kaohsiung
facilities. We use our chlorine production in our VCM and chlorinated derivative products plants. We currently
have the capacity to supply all of our chlorine requirements internally. Any remaining chlorine is sold into the
merchant chlorine market. Our caustic soda is sold to external customers who use it for, among other things, the
production of pulp and paper, organic and inorganic chemicals and alumina.

VCM. VCM is used to produce PVC, solvents and PVC-related products. We use ethylene and chlorine to

produce EDC, which is used in turn, to produce VCM. We have the capacity to produce approximately
6.3 billion pounds and 1.6 billion pounds of VCM per year at our North American and European facilities,
respectively. The majority of our VCM is used internally in our PVC operations. VCM and EDC not used
internally are sold externally.

PVC. PVC, the world’s third most widely used plastic, is an attractive alternative to traditional materials

such as glass, metal, wood, concrete and other plastic materials because of its versatility, durability and cost-
competitiveness. PVC is produced from VCM, which is, in turn, made from chlorine and ethylene.

We are the second-largest PVC producer in the world. With the completion of our previously announced

expansion projects at our Geismar and Burghausen plants in 2019, we have the capacity to produce
approximately 6.8 billion pounds and 1.0 billion pounds of commodity and specialty PVC per year, respectively,
at our various facilities globally. We use some of our PVC internally in the production of our building products,
PVC pipes and fittings and PVC compounds in the Housing and Infrastructure Products segment. The remainder
of our PVC is sold to downstream fabricators and the international markets.

Polyethylene. Polyethylene, the world’s most widely consumed polymer, is used in the manufacture of a

wide variety of film, coatings and molded product applications primarily used in packaging. Polyethylene is
generally classified as either LDPE, LLDPE or high-density polyethylene (“HDPE”). The density correlates to
the relative stiffness of the end-use products. The difference between LDPE and LLDPE is molecular, and
products produced from LLDPE, in general, have higher strength properties than products produced from LDPE.
LDPE exhibits better clarity and other physical properties and is used in end products such as bread bags, food
wraps, milk carton coatings and food packaging. LLDPE is used for higher film strength applications such as
stretch film and heavy-duty sacks. HDPE is used to manufacture products such as grocery, merchandise and trash
bags, rigid plastic containers, plastic closures and pipe.

We are a leading producer of LDPE by capacity in North America and predominantly use the autoclave
technology (versus tubular technology), which is capable of producing higher-margin specialty polyethylene
products. In 2023, our annual capacity of approximately 1.5 billion pounds of LDPE was available in numerous
formulations to meet the needs of our diverse customer base. We also have the capacity to produce
approximately 1.1 billion pounds of LLDPE per year in various formulations. We produce LDPE and LLDPE at
both the Lake Charles and Longview (TX) facilities. Our Lake Charles and Longview facilities also have the
capability to produce HDPE. We sell polyethylene to external customers as a final product in pellet form.

Chlorinated Derivative Materials. Our chlorinated derivative products include ethyl chloride,
perchloroethylene, trichloroethylene, tri-ethane® solvents, VersaTRANS® solvents, calcium hypochlorite,
hydrochloric acid (“HCL”) and pelletized caustic soda (“PELS”). We have the capacity to produce approximately
2.2 billion pounds of chlorinated derivative products per year, primarily at our Lake Charles, Natrium,
Beauharnois and Longview (WA) facilities. The majority of our chlorinated derivative products are sold to
external customers who use these products for, among other things, refrigerants, water treatment applications,
chemicals and pharmaceutical production, food processing, steel pickling, solvent and cleaning chemicals and
natural gas and oil production.

Styrene. Styrene is used to produce derivatives such as polystyrene, acrylonitrile butadiene styrene,

unsaturated polyester and synthetic rubber. These derivatives are used in a number of applications including
consumer disposables, food packaging, housewares, paints and coatings, building materials, tires and toys. We
produce styrene at our Lake Charles plant, where we have the capacity to produce approximately 570 million
pounds of styrene per year, all of which is sold to external customers.

Epoxy Specialty Resins. With the acquisition of the Westlake Epoxy business, Westlake is now one of the
leading producers of epoxy specialty resins, modifiers and curing agents in Europe, the United States and Asia
with a global reach to our end markets. Epoxy resins are the fundamental component of many types of materials
and are often used in the automotive, construction, wind energy, aerospace and electronics industries due to their
superior adhesion, strength and durability. Epoxy specialty resins are used for a variety of high-end coating
applications that require superior adhesion, corrosion resistance and durability of epoxy such as protective
coatings that are used for construction, flooring and transportation, among others. Epoxy-based surface coatings
are among the most widely used industrial coatings due to their long service life and broad application
functionality combined with overall economic efficiency. Our epoxy specialty resins are also used for electrical
applications such as generators, bushings, transformers and medium and high voltage switch gear components. In
composites, our specialty epoxy products are used either as replacements for traditional materials such as metal,
wood and ceramics, or in applications where traditional materials do not meet demanding engineering
specifications. We are also one of the leading producers of resins that are used in fiber reinforced composites.
Composites are used in a wide variety of applications ranging from wind energy, automotive, aerospace,
construction and industrial applications. We produce epoxy specialty resins at our Duisburg and Esslingen plants
in Germany, Barbastro plant in Spain, Onsan plant in South Korea, and Lakeland and Argo plants in the
United States. We have the total capacity to produce approximately 580 million pounds of epoxy specialty resins
per year, all of which is sold to external customers.

Base Epoxy Resins and Intermediaries (BERI). We are a leading supplier of Liquid and Solid Epoxy Resin.

These base epoxies are used in a wide variety of industrial coatings applications. In addition, we are a major
producer of bisphenol-A (“BPA”) and epichlorohydrin (“ECH”), key precursors in the downstream
manufacturing of basic epoxy resins and specialty resins. We internally consume the majority of our BPA and

ECH, which ensures consistent supply of our required intermediate materials. We produce base epoxies and
intermediaries at our Deer Park, United States and Pernis, the Netherlands plants, where we have the capacity to
produce approximately 1,280 million pounds per year.

Product and Application Development. Our product and application development activities are geared

towards developing and enhancing products, processes and applications. Facilities where we perform such
activities are located in the United States, Germany, China and the Netherlands.

Electricity. Our Lake Charles, Plaquemine and Natrium cogeneration assets have the capacity to generate

electricity of approximately 845, 240 and 100 megawatts, respectively, per year.

Feedstocks

We are highly integrated along our materials production chain. We (through OpCo) produce most of the

ethylene required to produce our polyethylene and styrene. Ethylene can be produced from either petroleum
liquid feedstocks, such as naphtha, condensates and gas oils, or from natural gas liquid feedstocks, such as
ethane, propane and butane. Both of OpCo’s Lake Charles ethylene plants use ethane as the primary feedstock.
Pursuant to a feedstock supply agreement between us and OpCo, OpCo receives ethane feedstock at our Lake
Charles site through several pipelines from a variety of suppliers in Texas and Louisiana. We own a 50% interest
in a 104-mile natural gas liquids pipeline from Mont Belvieu to our Lake Charles site. OpCo owns a 200-mile
ethylene pipeline that runs from Mont Belvieu to our Longview (TX) site. Additionally, through OpCo, we
produce most of the ethylene required at our Calvert City facility utilizing ethane feedstock. The LACC ethylene
facility is located adjacent to our chlor-alkali facility in Lake Charles and has an ethylene production capacity of
2.2 billion pounds per year. During the third quarter of 2019, the LACC ethylene plant began its commercial
operations. At December 31, 2023, we, through one of our subsidiaries, owned 50% of the membership interests
in LACC. We receive our proportionate share in ethylene production on a cash-cost basis and primarily use it to
produce VCM. In addition to ethylene supplied by OpCo and LACC, we also acquire ethylene from third parties
in order to supply a portion of our ethylene requirements. In Germany, we have access to, and partially own, an
ethylene pipeline.

We acquire butene and hexene to manufacture polyethylene and benzene to manufacture styrene. We
receive butene and hexene at the Lake Charles site and hexene at the Longview (TX) site via rail car from several
suppliers. We receive benzene via barges, ships and pipeline pursuant to short-term arrangements. We purchase
butene and hexene pursuant to multi-year contracts.

The salt requirements for several of our larger chlor-alkali plants are supplied internally from salt domes

we either own or lease and the salt is transported by pipelines we own. We purchase the salt required for our
other chlor-alkali plants pursuant to long-term contracts. Electricity and steam for one of our Lake Charles
facilities and our Plaquemine facility are produced by on-site cogeneration units. A portion of our Natrium
facility’s electricity requirements is produced by our on-site generation unit, and the remainder is purchased. We
purchase electricity for our remaining facilities under long-term contracts. We purchase VCM for our Asian PVC
plant on a contract and spot basis.

The raw materials that we primarily use to manufacture our epoxy products include chlorine, caustic soda,

phenol and acetone, all of which are available from more than one source. Prices for our main feedstocks are
generally driven by the underlying petrochemical benchmark prices and energy costs, which are subject to price
fluctuations.

Sustainability

We continued our efforts to deliver high-value products in increasingly sustainable ways in 2023. For
instance, having introduced lower-carbon caustic soda and PVC products since early 2021, in October 2022, we
expanded our GreenVin® bio-attributed PVC, which is produced in Germany with renewable power (under
European Guarantees of Origin) and renewable ethylene. The renewable ethylene is derived from biomass.
GreenVin® bio-attributed PVC is both International Sustainability & Carbon Certification PLUS (“ISCC PLUS”)
and REDcert2 certified, using the mass balance approach. Bio-attributed GreenVin® PVC is approximately 90%
less carbon-intensive compared with conventionally-produced Westlake PVC in Germany, based on a
cradle-to-gate product carbon footprint study by Sustainable AG, tested by TÜV Rheinland, in accordance with
the ISO 14067 standard, taking biogenic CO2 fixations into account.

Another example of our efforts to improve the sustainability of our products is our incorporation of higher

volumes of recycled materials in our polyethylene resin. Our customers use our one-pellet polyethylene
compound, PIVOTAL®, a product line that contains a blend of post-consumer-recycled (PCR) and virgin
polyethylene resins and has obtained GreenCircle certification, to achieve PCR content in their products ranging
from 25% to 45%.

Our Westlake Epoxy business also continued to incorporate alternative, bio-based feedstocks. The Pernis,

Netherlands site, for example, received certification by ISCC PLUS for our tracing and handling of bio-based
materials in the production of epoxy products.

Marketing, Sales and Distribution

We have a dedicated sales force for our business, organized by product line and region that sells our
products directly to our customers. In addition, we rely on distributors to market products to smaller customers.
Our polyethylene customers are some of the nation’s largest producers of film and flexible packaging. We and
OpCo sell ethylene and ethylene co-products to external customers. OpCo’s primary ethylene co-products are
chemical grade propylene, crude butadiene, pyrolysis gasoline and hydrogen. We have storage agreements and
exchange agreements that provide us and OpCo with access to customers who are not directly connected to the
pipeline system that we own. OpCo ships crude butadiene and pyrolysis gasoline by rail or truck. Additionally,
we transport our polyethylene and styrene by rail or truck. Further, styrene can be transported by barge or ship.

We use some of our PVC internally in the production of our building products, pipes and fittings and PVC

compounds in the Housing and Infrastructure Products segment. The remainder of our PVC is sold to
downstream fabricators and the international markets. We have the capacity to use a majority of our chlorine
internally to produce VCM and EDC, most of which, in turn, is used to produce PVC. We also use our chlorine
internally to produce chlorinated derivative products. We sell the remainder of our chlorine and substantially all
of our caustic soda production to external customers. The majority of our products are shipped from production
facilities directly to the customer via pipeline, truck, rail, barge and/or ship. The remaining products are shipped
from production facilities to third party chemical terminals and warehouses until being sold to customers.

No single customer accounted for 10% or more of net sales for the Performance and Essential Materials

segment in 2023.

Competition

The markets in which our Performance and Essential Materials businesses operate are highly competitive.

Competition in the materials market is based on product availability, product quality and consistency, product

performance, customer service and price. Our competitors in the ethylene, polyethylene and styrene markets are
some of the world’s largest chemical companies, including Chevron Phillips Chemical Company, Dow Inc.,
ExxonMobil Chemical Company, Formosa Plastics Corporation, LyondellBasell Industries, N.V., NOVA
Chemicals Corporation and Sasol Limited. We compete in the chlor-alkali and PVC markets with other
producers including Formosa Plastics Corporation, INOVYN ChlorVinyls Limited, KEM ONE Group SAS, Olin
Corporation, Orbia Advance Corporation, Occidental Chemical Corporation, Shintech, Inc. and VYNOVA
Group. Our competitors in the epoxy value chain include Olin Corporation, Nan Ya Plastics Corporation, the
Spolchemie Group, LEUNA-Harze GmbH, Aditya Birla Chemicals (Thailand) Ltd., Huntsman Corporation,
Swancor Holding Company Limited, Ningbo Bohui Chemical Technology Co., Ltd., Techstorm Advanced
Material Co., Ltd., Shanghai Kangda Chemical New Material Group Co., Ltd., Evonik Industries AG, Allnex
Management GmbH, Kukdo Chemical Co., Ltd., Kumhu Asiana Group and Chang Chun Plastics Co., Ltd.

Housing and Infrastructure Products Business

Our Brands and Products

We manufacture and sell housing and infrastructure products including residential PVC siding; PVC trim

and mouldings; architectural stone veneer; windows; PVC decking; PVC films for various inflatables,
wallcovering, tape and roofing applications; polymer composite and cement roof tiles; PVC pipe and fittings for
various water, sewer, electrical and industrial applications; PVC compounds used in various housing, medical
and automobile products; and a variety of consumer and commercial products such as landscape edging;
industrial, home and office matting; marine dock edging; and masonry joint controls.

Our housing and infrastructure products consist of several product groups including: (i) exterior and

interior building products, which includes siding, trim and mouldings, stone, roofing, windows and outdoor
living products; (ii) PVC pipe, specialty PVC pipe and fittings; and (iii) PVC compounds. Many of our products
are made from PVC, including products for water and sewer systems and home and light commercial
applications for siding, trim and mouldings, outdoor living products, windows and PVC compounds.

Siding. Our siding products include insulated siding and vinyl siding and accessory products. Additionally,

we offer premium siding products such as Celect® Cellular Composite Siding and, TruExterior® Siding. Our
siding business is also a leader in non-wood shutters and siding accessories along with an array of specialty tools
to aid installation. Our brands include Royal® Siding, Portsmouth® Shake and Shingle™, Foundry® Specialty
Siding, TruExterior® Siding&Trim, Celect® Cellular Exteriors, Mid-America® Exteriors, Tapco Tools®, and
many more.

Trim and Mouldings. We offer a wide variety of trim and moulding products, including exterior and
interior products for homes, multi-family and light commercial structures that are used as substitute for wood and
wood composite offerings. Our brands include Royal® Trim and Mouldings, TruExterior® Siding&Trim, and,
Kleer Lumber®, among others.

Stone. We are a leader in the masonry stone veneer category, with both mortar applied products and
mechanically fastened products that are used as a substitute for stone on exterior walls and accents as well as in
interior applications such as fireplaces, kitchens and bathrooms. Our stone brands include Cultured Stone®,
Eldorado Stone®, Versetta Stone®, StoneCraft Industries® and Dutch Quality Stone®, among others.

Roofing. Our DaVinci® Roofscapes is a premium composite roofing. Additional product offerings include

concrete and clay roof tiles and stone coated steel roofing. Our other major roofing name brands include

NewPointTM, Concrete Roof Tile, US Tile® Clay Roofing Products, Unified SteelTM, and Stone Coated Roofing
among others.

Windows. We are a regional fabricator of vinyl windows in the South and Southeast markets of the United

States. Our brands include Legacy Collection™, the Krestmark® Collection, and the Magnolia Collection™.

Outdoor Living Products. Our outdoor living products include Zuri™ Premium Decking and Kindred®

Outdoor kitchens and fire bowls.

PVC Pipe. We manufacture and sell pipe ranging from 1⁄ 2 inch to 36 inches in diameter, in gasketed,

solvent welded, and restrained joint configurations. Our pipe products are used in residential water and sewer
applications; municipal potable water and sewer infrastructure; plumbing and industrial applications, including
drain, waste & vent (“DWV”); electrical duct and conduit; turf irrigation, water well and other major water
transport market segments. We manufacture and market pipe for water, sewer, irrigation and conduit pipe
products under the Westlake Pipe & Fittings brand name.

Specialty PVC Pipe. Our specialty PVC pipe includes the Certa-Lok® pipe and Certa-Lok® CLICTM joining

systems, which provide restrained joints with rapid assembly, designed for use in potable water, sewer, fire
protection, agriculture, well-casing, electrical conduit and other piping system applications in the residential and
various infrastructure markets. Other specialty products include a system for high rise DWV installations that
incorporates low smoke and flame properties. Our molecularly-oriented PVC (“PVCO”) pipe, AquaMax™, is
produced with less PVC than conventional pipe improving our environmental footprint while delivering higher
performance. We also manufacture and market specialty pipe under the Certa-Set®, Certa-Flo®, Certa-Com®,
Yelomine®, Fluid-Tite®, Kwik-Set®, Sure-Fit®, Cobra Lock™, and Kor-Flo® brand names, among others.

Fittings. Our fittings products include a range of injection molded and custom fabricated fittings including:

injection mold DWV fittings for residential, low-rise and high-rise commercial installations; molded gasketed
and solvent weld sewer fittings up to 15 inches, molded gasketed municipal pressure fittings and molded fittings
for the pool, spa, industrial markets and electrical assemblies; and fabricated custom fittings up to 36 inches for
municipal and plumbing installations. We manufacture and market specialty fittings under the Westlake Pipe &
Fittings brand name.

PVC Compounds. PVC compounds are custom blended formulations made by combining PVC resin with

functional additives. They offer specific end-use properties based on customer-determined specifications and are
used to produce rigid and flexible PVC applications. Our compounds are processed via extrusion, injection
molding, blow molding, calendering. Our primary markets are building materials (housing), pipe and fittings,
industrial materials, automotive, healthcare, telecommunications and consumer goods. Flexible PVC compounds
are used for, but not limited to, the following applications: wire and cable, flooring, roofing, wall coverings,
window and door trims, gaskets, industrial applications, automotive interior and exterior trims, footwear and
medical applications. Rigid extrusion PVC compounds are commonly used for pipe, window and door profiles,
fencing, decking, railing, siding and trim. Injection molding and blow molding PVC compounds are commonly
used for pipe fittings, electrical components, industrial applications and packaging for consumer goods. We
manufacture and market custom PVC compounds under the Westlake Global Compounds and Nakan brand
names.

Recycled Products. Westlake Dimex is a producer of post-industrial-recycled PVC, PE and thermoplastic

elastomer (TPE) compounds in addition to various consumer and professional products made from recycled

PVC, PE and TPE materials. These products include landscape edging; industrial, home and office matting;
marine dock edging; and masonry control joints.

Raw Materials and Suppliers

Our North American PVC facilities within the Performance and Essential Materials segment supply most
of the PVC required by building products for our housing exteriors and PVC pipes and fittings plants. Our raw
materials for stone, roofing and accessories, windows, shutters, and specialty tool products are externally
purchased. PVC required for the PVC compounds plants is either internally sourced from our North American
and Asian facilities within the Performance and Essential Materials segment or externally purchased based on the
location of the plants. The remaining raw materials required, including pigments, fillers, stabilizers, and other
ingredients, are purchased under short-term contracts, long-term contracts and in the spot market based on
prevailing market prices.

Manufacturing

We operate 58 manufacturing locations primarily in the United States and Canada where we produce
siding, trim and mouldings, stone, roofing, windows, outdoor living products, PVC pipes, specialty PVC pipes
and fittings. In addition, we have 12 manufacturing locations across the world where we produce PVC
compounds, including locations in North America, Europe and Asia. The following table illustrates the properties
owned and leased by the Housing and Infrastructure Products business:

Manufacturing Facilities
Leased
Owned

North America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

45
2
3

18
2
—

Marketing, Sales and Distribution

We sell a majority of our siding, trim and mouldings, stone, roofing, windows and outdoor living products,

PVC pipe, specialty PVC pipe and fittings through a combination of our internal sales force and some
manufacturer’s representatives. In North America, we operate 38 leased and 6 owned distribution centers and
warehouses that service and supply our products to local customers, contractors and distributors. We also engage
in advertising programs primarily directed at trade professionals and homeowners that are intended to develop
awareness and interest in our products. In addition, we display our products at trade shows. Our 12 PVC
Compounds facilities across the world sell through a combination of our internal sales force and distributors.

No single customer accounted for 10% or more of net sales for the Housing and Infrastructure Products

segment in 2023.

Sustainability

We endeavor to continue to focus on manufacturing products in a more sustainable way and developing

products with improved sustainable features. For instance, we expanded production of Westlake molecular-
oriented polyvinyl chloride (PVCO) pipe, which offers both enhanced water flow and a lower-carbon footprint
due to its lighter weight compared to traditional Westlake PVC pipe. Westlake PVCO pipe provides an
approximately 10% increase in internal flow area compared with pipes with the same outside diameter, and
approximately 40% less PVC pipe compound compared to traditional Westlake PVC pipe used for distribution of

potable water, sewer and other systems. Less PVC pipe compound per unit length means a lighter weight product
that provides secondary benefits for shipping the product.

We also enhanced circularity of more of our products as discussed in our latest 2022 Environmental Social
and Governance Report, which is available at our website at www.westlake.com. For instance, we produced more
final products made using in-house generated regrind, post-industrial recycled materials, and/or post-consumer
recycled material. Several of our stone veneer products produced at two of our facilities incorporated
approximately 45% (Versetta Stone® and ProStone®) to 55% (Cultured Stone®) recycled content. Following our
acquisition of Westlake Dimex, we started to utilize increasing amounts of in-house generated PVC plastic
regrind purchased from other Westlake businesses, in addition to purchasing post-industrial recycled materials
from third parties. Unless specifically stated herein, documents and information on our website are not
incorporated by reference in this Form 10-K.

Competition

The markets in which our housing and infrastructure businesses operate are highly competitive.

Competition in the housing and infrastructure products market is based on product quality, product innovation,
customer service, product consistency, on-time delivery and price. We compete in the housing and infrastructure
products market with other producers and fabricators including Associated Materials LLC., CertainTeed
Corporation, Cornerstone Building Brands, Inc., Diamond Plastics Corporation, IPEX Inc., JM Eagle Inc., Trex
Company, Inc. and The Azek Company and with producers of PVC compounds including GEON Performance
Solutions and Teknor Apex Company, Inc.

Seasonality

Though we generally experience demand for our products throughout the year, our sales, particularly of
housing products have historically experienced some seasonality. We have typically experienced moderately
higher levels of sales of our residential products in the first half of the year due to inventory restocking and
improved weather for construction. Our sales are affected by the individual decisions of distributors and dealers
on the levels of inventory they carry, their views on product demand, their financial condition and the manner in
which they choose to manage inventory risk. Our sales are also generally impacted by the number of days in a
quarter or a year that contractors and other professionals are able to install our products. This can vary
dramatically based on, among other things, weather events such as rain, snow and extreme temperatures. We
have generally experienced lower levels of sales of our housing products in the fourth quarter due to adverse
weather conditions in certain markets, which typically reduces the construction and renovation activity during the
winter season.

Environmental

As is common in our industry, we are subject to environmental laws and regulations related to the use,

storage, handling, generation, transportation, emission, discharge, disposal and remediation of, and exposure to,
hazardous and non-hazardous substances and wastes in all of the countries in which we do business. National,
state or provincial and local standards regulating air, water and land quality affect substantially all of our
manufacturing locations around the world. Compliance with such laws and regulations has required and will
continue to require capital expenditures and increase operating costs.

It is our policy to comply with all environmental, health and safety requirements and to provide safe and

environmentally sound workplaces for our employees. In some cases, compliance can be achieved only by

incurring capital expenditures. In 2023, we made capital expenditures of $54 million related to environmental
compliance. We estimate that we will make capital expenditures of approximately $56 million in 2024 and
$74 million in 2025, respectively, related to environmental compliance. The expected 2024 and 2025 capital
expenditures are relatively higher than the amounts we have spent related to environmental compliance in recent
years in large part due to capital expenditures related to previously existing and new Environmental Protection
Agency (the “EPA”) regulations and corrective actions required by the EPA to resolve the flare enforcement
matter discussed below. The remainder of the 2024 and 2025 estimated expenditures are related to equipment
replacement and upgrades. We anticipate that stringent environmental regulations will continue to be imposed on
us and the industry in general.

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 December 31, 2023):

(cid:129)

To resolve alleged violations associated with exceedances of discharge limits under the Natrium
facility’s National Pollutant Discharge Elimination System (“NPDES”) permit effective August
2020, we have entered into enforcement negotiations with the West Virginia Department of
Environmental Protection (“WVDEP”). The resolution of this matter may involve a penalty in excess
of $1 million.

For several years, 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 informed us
that the information provided led the EPA to believe that some of the flares were out of compliance
with applicable standards. In June 2022, the Department of Justice announced that the Company, the
EPA and state environmental agencies had reached agreement on a consent decree resolving this
matter. The consent decree was entered by the court and became effective in October 2022. The
consent decree requires us to install flare gas recovery units, implement fence line monitoring, install
and operate flare monitoring and control equipment to meet certain performance standards, and pay a
civil penalty of $1 million. We estimate that the total cost to implement the requirements under the
decree will be approximately $110 million, which includes capital expenditures associated with
installation of the flare gas recovery units and monitoring and control equipment we are required to
install at our Calvert City and Lake Charles facilities. The substantial majority of the capital
expenditures and other costs required to comply with the consent decree were incurred in 2021, 2022
or 2023. We have paid all penalties required under the consent decree and have planned, budgeted for
and scheduled all compliance requirements going forward. While the final consent decree does
provide for stipulated penalties if certain requirements are not met, we do not believe that any
stipulated penalties, if incurred and assessed, will have a material adverse effect on our financial
condition, results of operations or cash flows.

(cid:129) Westlake owns and operates salt solution-mining caverns at the Sulphur Brine Dome in Sulphur,
Louisiana. The Louisiana Department of Natural Resources issued Compliance Order No. IMD
2022-027 and several supplements to that order, the latest in October 2023, in response to pressure
anomaly events in two of our brine caverns. The brine caverns were not active, operating wells but

under ongoing, post-operational monitoring requirements. The compliance order and supplements
thereto have required us to undertake various activities related to response planning, monitoring,
investigation and mitigation of potential impacts in the event of future cavern pressure anomalies or
failures. Since December 2022, continuous brine injection has maintained cavern pressure while we
continue to pursue active monitoring, studies, groundwater monitoring, modeling and other activities
under the compliance order and supplements. In September 2023, the Office of Conservation issued
an emergency declaration as a conservative step and to ensure that the full suite of powers and
resources are available to the government in its response and management of the evolving
circumstances at the Sulphur Dome. Capital costs and expenditures required to comply with the
compliance order and supplements have been and will continue to be incurred throughout 2024. In
response to the most recent supplement to the compliance order, the Company reserved
approximately $13 million in connection with groundwater monitoring wells and monitoring required
by the supplement. At this time, the Company is unable to estimate the impact that other ongoing
expenditures or future injunctive relief ordered by the government could have on the Company’s
financial condition, results of operations or cash flows.

Also see our discussion of our environmental matters contained in Item 1A, “Risk Factors” below, Item 3,

“Legal Proceedings” below and Note 22 to our consolidated financial statements included in Item 8 of this
Form 10-K.

Human Capital

Westlake is committed to acting in a safe, ethical, environmentally, and socially responsible manner. We

have been a public company for 19 years, but we still think of our employees as members of our extended family.
We value the integrity, creativity, dedication and diversity of ideas that our employees bring to work every day.

Diversity, Equity and Inclusion (DEI)

As a global company, we recognize the diversity of our employees, customers and communities, and
believe in creating an inclusive and equitable environment that represents a broad spectrum of backgrounds and
cultures. A significant portion of our management team and our Board of Directors comes from diverse
backgrounds, and we are focused on hiring and retaining diverse and talented employees. Our Board of Directors
has charged the Compensation Committee with oversight responsibility of the Company’s DEI efforts.

As an Asian American and Pacific Islander (“AAPI”)-controlled business, we feel a special commitment to
ensuring that Westlake continues to offer opportunities for employees of all backgrounds and experiences. As of
December 31, 2023, approximately 36% of our employees in the United States and Canada self-identified as
Black, Indigenous, Hispanic, or AAPI. Although we do not collect race and ethnicity data of our workforces in
Latin America, Europe, and Asia, we know that we are a diverse, multinational company.

Training and Professional Development

As part of our retention and promotion efforts, we invest in internal leadership development. Westlake

regularly provides its employees with a blend of live, virtual, and digital training opportunities, including safety
training, technical courses, compliance training relating to company policies, business and professional
development training, and professional growth classes. In conjunction with technical training, we believe that the
non-technical training helps to create well-rounded, and highly-driven, employees. In addition, we periodically
conduct employee surveys to gauge employee engagement and identify areas for additional focus.

Headcount

As of December 31, 2023, we had approximately 15,520 employees in the following areas:

Category

Performance and Essential Materials segment
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Housing and Infrastructure Products segment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Corporate and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Number

6,830
8,130
560

Our employees are distributed across 19 countries. As of December 31, 2023, approximately 68% were

employed in the United States. Approximately 27% of our employees are represented by labor unions, including
works councils in Europe, and our collective bargaining agreements in Europe, North America and Asia expire at
various times through 2026. There were no strikes, lockouts or work stoppages in 2023, and we believe that our
relationship with our employees and unions is open and positive.

Attracting, developing and retaining talented people is crucial to executing our strategy. Our ability to

recruit and retain such talent depends on a number of factors, including compensation and benefits, career
opportunities and work environment. We provide our employees with competitive compensation packages,
development programs that enable continued learning and growth, and comprehensive and competitive benefit
packages worldwide. Our compensation and benefits arrangements generally are tailored to local markets of
operation.

Health and Safety

The health and safety of our employees and our operations is our highest priority. Our health and safety

programs are designed around global standards with appropriate variations addressing the multiple jurisdictions
and regulations, specific hazards and unique working environments of our manufacturing, research and
development, and administrative office locations. We require each of our locations to perform regular safety
audits to ensure proper safety policies, program procedures, analyses and training are in place.

Our focus on safety starts at the top with our Board of Directors. Safety is a key performance indicator that
is reported on and discussed at every Board meeting. Our Health, Safety and Environment (“HSE”) team plays a
pivotal role in overseeing all related policy protections, risk identification and other aspects of our business.

Several of our U.S. manufacturing sites have been recognized by the U.S. Occupational Safety & Health

Administration’s (“OSHA”) Voluntary Protection Program (“VPP”) for their low injury rates, employee
engagement and safety programs. Most of our manufacturing sites in Germany satisfy the Deutsche Industrie
Norm ISO 45001 certification program, which is comparable to VPP.

With respect to the COVID-19 pandemic, we adopted safety guidelines and practices, including safety and
health training for existing and new employees, remote working, health screening of employees, contact tracing
for reported exposure, enforcing self-isolation after exposure, provisions for mask wearing, modifications to the
in-office work environment, social distancing, increased sanitation stations and increased cleaning of offices and
workstations.

Intellectual Property and Technology

We rely upon both trademark and service mark protection to protect our brands, and have registered or

applied to register many of these on a world-wide basis. We have over 1,650 active and pending trademark

registrations worldwide for our various business segments. We also rely on a combination of patents and
un-patented proprietary know-how and trade secrets to preserve our competitive technology position in the
market. We have over 1,300 issued patents and pending-patent applications in the United States and several other
countries. While some of our production capacity operates under licenses from third parties, other parts of our
production operate under technology that was developed internally. Consequently, we offer our own
independently developed technology for licensing when the opportunity makes sense on a commercial basis.
Although the Company considers its patents, licenses, trademarks and trade secrets in the aggregate to constitute
a valuable asset that provides competitive advantage to us, we do not regard any one of our businesses as being
materially dependent upon any single or group of related patents, trademarks, licenses, or trade secrets.

Available Information

Our website address is www.westlake.com. Our website content is available for information purposes only.

It should not be relied upon for investment purposes, nor is it incorporated by reference in this Form 10-K. We
make available on this website under “Investor Relations/Financials,” free of charge, our proxy statements,
annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to
those materials as soon as reasonably practicable after we electronically file those materials with, or furnish those
materials to, the SEC. The SEC also maintains a website at www.sec.gov that contains reports, proxy statements
and other information regarding SEC registrants, including us.

We intend to satisfy the requirement under Item 5.05 of Form 8-K to disclose any amendments to our Code

of Ethics and any waiver from a provision of our Code of Ethics by posting such information on our website at
www.westlake.com under “Investor Relations/Governance.”

Item 1A. Risk Factors

We are subject to various risks and uncertainties in the course of our business. The following summarizes the
risks and uncertainties that we consider to be material and that may materially and adversely affect our business,
financial condition, results of operations or cash flows and the market value of our securities. Investors should
consider these matters, in addition to the other information we have provided in this Annual Report on Form
10-K and the documents we incorporate by reference.

Risk Factor Summary

Risks Related to Our Business, Industry and Operations

(cid:129)

Cyclicality in the petrochemical industry has in the past, and may in the future, result in reduced
operating margins or operating losses.

(cid:129) We sell commodity products in highly competitive markets and face significant competition and

price pressure.

(cid:129)

Our operations depend on the availability and costs of raw materials, energy and utilities, and
volatility in costs of raw materials, energy and utilities and supply chain constraints may result in
increased operating expenses and adversely affect our results of operations and cash flows.

External factors beyond our control can cause fluctuations in demand for our products and in our
prices and margins, which may negatively affect our results of operations and cash flows.

The housing market may continue its recent decline or decline further, and any such continuation or
decline in the homebuilding industry may adversely affect our operating results.

(cid:129) We operate internationally and are subject to related risks, including exchange rate fluctuations,

exchange controls, political risk and other risks relating to international operations.

(cid:129)

Our inability to compete successfully may reduce our operating profits.

Our production facilities process some volatile and hazardous materials that subject us to operating
and litigation risks that could adversely affect our operating results.

(cid:129) We rely on a limited number of outside suppliers for specified feedstocks and services.

(cid:129) We rely heavily on third party transportation, which subjects us to risks and costs that we cannot

control. Such risks and costs may adversely affect our operations.

(cid:129) We may pursue acquisitions, dispositions, joint ventures or other transactions that may impact our
results of operations and financial condition. We may have difficulties integrating the operations of
recently acquired businesses, such as Westlake Epoxy, and future acquired businesses.

(cid:129)

Capital projects are subject to risks, including delays and cost overruns, which could have an adverse
impact on our financial condition and results of operations.

Public and investor sentiment towards climate change and other environmental, social and
governance (“ESG”) matters could adversely affect our cost of capital and the price of our common
stock.

Our participation in joint ventures and similar arrangements exposes us to a number of risks,
including risks of shared control.

Our operations could be adversely affected by labor relations.

(cid:129) We have certain material pension and other post-retirement employment benefit (“OPEB”)

obligations. Future funding obligations related to these obligations could restrict cash available for
our operations, capital expenditures or other requirements or require us to borrow additional funds.

(cid:129)

If our goodwill or other long-lived assets become impaired in the future, we may be required to
record non-cash charges to earnings, which could be significant.

Failure to adequately protect critical data and technology systems could materially affect our
operations.

Fluctuations in foreign currency exchange and interest rates could affect our consolidated financial
results.

Our property insurance has only partial coverage for acts of terrorism and, in the event of terrorist
attack, we could lose net sales and our facilities. Our casualty and other insurance policies may be
subject to coverage limitations.

The impact and effects of public health crises, pandemics and epidemics could adversely affect our
business, financial condition and results of operations.

Legal, Governmental and Regulatory Risks

(cid:129)

Our operations and assets are subject to extensive environmental, health and safety laws and
regulations.

Our operations and assets are subject to climate-related risks and uncertainties.

(cid:129) We are subject to operational and financial risks and liabilities associated with the implementation of

and efforts to achieve our carbon emission reduction goals.

Risks Related to Our Indebtedness

(cid:129)

Our level of debt could adversely affect our ability to operate our business.

To service our indebtedness and fund our capital requirements, we will require a significant amount
of cash. Our ability to generate cash depends on many factors beyond our control.

The Credit Agreement and the indenture governing certain of our senior notes impose significant
operating and financial restrictions, which may prevent us from capitalizing on business
opportunities and taking some actions.

Risks Related to Taxes

(cid:129)

A change in tax laws, treaties or regulations, or their interpretation or application, could have a
negative impact on our business and results of operations.

(cid:129) We depend in part on distributions from Westlake Partners to generate cash for our operations,

capital expenditures, debt service and other uses. Westlake Partners’ tax treatment depends on its
status as a partnership for federal income tax purposes, and it not being subject to a material amount
of entity-level taxation. If the Internal Revenue Service (“IRS”) were to treat Westlake Partners as a
corporation for federal income tax purposes, or if Westlake Partners became subject to entity-level
taxation for state tax purposes, its cash available for distribution would be substantially reduced,
which would also likely cause a substantial reduction in the value of its common units that we hold.

Risks Related to the Ownership of Our Securities

(cid:129) We will be controlled by our principal stockholder and its affiliates as long as they own a majority of
our common stock, and our other stockholders will be unable to affect the outcome of stockholder
voting during that time. Our interests may conflict with those of the principal stockholder and its
affiliates, and we may not be able to resolve these conflicts on terms possible in arms-length
transactions.

Risk Related to Business, Industry and Operations

Cyclicality in the petrochemical industry has in the past, and may in the future, result in reduced operating
margins or operating losses.

Our historical operating results reflect the cyclical and volatile nature of the petrochemical industry. The
industry is mature and capital intensive. Margins in this industry are sensitive to supply and demand balances
both domestically and internationally, which historically have been cyclical. The cycles are generally
characterized by periods of tight supply, leading to high operating rates and margins, followed by periods of
oversupply primarily resulting from excess new capacity additions, leading to reduced operating rates and lower
margins.

Moreover, profitability in the petrochemical industry is affected by the worldwide level of demand along

with vigorous price competition which may intensify due to, among other things, new industry capacity. In
general, weak economic conditions reduce demand and put pressure on margins. It is not possible to predict
accurately the supply and demand balances, market conditions and other factors that will affect industry
operating margins in the future.

New capacity additions, principally of ethylene, polyethylene, chlorine, caustic soda and PVC in North

America, Asia and the Middle East and in the epoxy value chain in Asia, a number of which have been recently

completed, may lead to periods of over-supply and lower profitability. Additionally, new entrants to the market,
including when customers backward integrate into products we supply, can further exacerbate supply and
demand imbalances. As a result, our Performance and Essential Materials (“PEM”) segment operating margins
may be negatively impacted.

The impact of COVID-19 and the conflicts in the Middle East and between Russia and Ukraine may lead to

further supply chain constraints, supply and demand shifts, workforce availability issues and increased
uncertainty in general economic and business conditions, including inflationary pressures, persistent high interest
rates and possible recession.

We sell most of our commodity products in highly competitive markets and face significant competition and
price pressure.

We sell most of our commodity products in highly competitive markets. Competition in commodity
markets is based primarily on price and to a lesser extent on performance, product quality, product deliverability
and customer service. As a result, we generally are not able to protect our market position for most of these
products by product differentiation and may not be able to pass on cost increases to our customers. Accordingly,
increases in raw material and other costs may not necessarily correlate with changes in prices for these products,
either in the direction of the price change or in magnitude. Specifically, timing differences in pricing between
raw material prices, which may change daily, and contract product prices, which in many cases are negotiated
monthly or less often, sometimes with an additional lag in effective dates for increases, have had and may
continue to have a negative effect on profitability. Significant volatility in raw material costs tends to place
pressure on product margins as sales price increases could lag behind raw material cost increases. Conversely,
when raw material costs decrease, customers could seek relief in the form of lower sales prices.

Our operations depend on the availability of raw materials, energy and utilities, and volatility in costs of raw
materials, energy and utilities may result in increased operating expenses and adversely affect our results of
operations and cash flows.

Our operations depend on the continued supply of raw materials and reliable energy. The availability of
natural gas and electricity can be affected by numerous events such as weather (e.g., hurricanes and periods of
considerable heat or cold, like Winter Storm Uri in 2021), pipeline and other logistics interruptions, electrical
grid outages, cybersecurity incidents, intermittent electricity generation (particularly from wind and solar),
hostilities and sanctions arising from geopolitical tensions, human error, and supply and demand imbalances for
raw materials and electricity.

Significant variations in the costs and availability of raw materials and energy may negatively affect our

results of operations. These costs have risen significantly in the past due primarily to oil and natural gas cost
increases. We purchase significant amounts of ethane feedstock, natural gas, ethylene and salt to produce several
basic chemicals. We also purchase significant amounts of electricity to supply the energy required in our
production processes. The cost of these raw materials and energy, in the aggregate, represents a substantial
portion of our operating expenses. The prices of raw materials and energy generally follow price trends of, and
vary with market conditions for, crude oil and natural gas, which are highly volatile and cyclical, as well as the
ability of domestic producers to export natural gas liquids, ethane and ethylene. Changes to regulatory policies
applicable to the German energy sector for industrial users have contributed to higher prices for industrial users
of energy in the past and may continue to do so in the future. Our results of operations have been and could in the
future be significantly affected by increases in these costs.

Price increases increase our working capital needs and, accordingly, can adversely affect our liquidity and
cash flows. In addition, because we utilize the first-in, first-out (“FIFO”) method of inventory accounting, during
periods of falling raw material prices and declining sales prices, our results of operations for a particular
reporting period could be negatively impacted as the lower sales prices would be reflected in operating income
more quickly than the corresponding drop in feedstock costs. We use derivative instruments (including
commodity swaps and options) in an attempt to reduce price volatility risk on some feedstock commodities. In
the future, we may decide not to hedge any of our raw material costs or any hedges we enter into may not have
successful results. Also, our hedging activities involve credit risk associated with our hedging counterparties, and
a deterioration in the financial markets could adversely affect our hedging counterparties and their abilities to
fulfill their obligations to us.

Lower prices of crude oil, such as those experienced from the third quarter of 2014 through 2020, led to a

reduction in the cost advantage for natural gas liquids-based ethylene crackers in North America, such as ours, as
compared to naphtha-based ethylene crackers. As a result, our margins and cash flows were negatively impacted.
Lower crude oil and natural gas prices could lead to a reduction in hydraulic fracturing in the United States,
which could reduce the availability of feedstock and increase prices of feedstock for our operations. Higher
natural gas prices could also adversely affect our ability to export products that we produce in the United States.
In addition to the impact that this has on our exports from the United States, reduced competitiveness of U.S.
producers also has in the past increased the availability of chemicals in North America, as U.S. production that
would otherwise have been sold overseas was instead offered for sale domestically, resulting in excess supply
and lower prices in North America. We could also face the threat of imported products from countries that have a
cost advantage. Furthermore, additional export storage facilities for natural gas liquids, ethane and ethylene may
lead to higher exports of such products from the United States or greater restrictions on hydraulic fracturing
could restrict the availability of our raw materials in the United States, thereby increasing our costs.

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:

(cid:129)

general economic and business conditions, including in North America, Europe and Asia, including
inflation, persistent high interest rates and possible recession;

new capacity additions in North America, Europe, Asia and the Middle East;

the level of business activity in the industries that use our products;

competitor action;

technological innovations;

currency fluctuations;

the impact of supply chain constraints and workforce availability;

international events and circumstances;

pandemics, such as COVID-19 pandemic, and other public health threats and efforts to contain their
transmission;

war, sabotage, terrorism and civil unrest, including the conflicts between Russia and Ukraine and in
the Middle East;

(cid:129)

governmental regulation, including in the United States, Europe and Asia;

public attitude towards climate change and safety, health and the environment;

perceptions of our products by potential buyers of our products, as well as the public generally, and
related changes in behavior, including with respect to recycling;

severe weather and natural disasters;

long-term impacts of climate change, including rising sea levels and changes in weather patterns,
such as drought and flooding; and

credit worthiness of customers and vendors.

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, persistent high interest rates, 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 remain elevated or 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 continued to decline throughout 2023 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 conflicts in the Middle East and between Russia and Ukraine, higher interest rates, tight lending
standards and practices for mortgage loans that limit consumers’ ability to qualify for mortgage financing to
purchase a home, higher home prices, population declines or slower rates of population growth or U.S. Federal
Reserve policy changes.

If there is limited economic growth, a decline in employment and consumer income, a general change in

consumer behavior and/or tightening of mortgage lending standards, practices and regulation, or if interest rates
for mortgage loans or home prices rise, there could be a corresponding adverse effect on our financial condition,

results of operations or cash flows, including, but not limited to, the amount of revenues or profits we generate in
our Housing and Infrastructure Products segment.

We operate internationally and are subject to related risks, including exchange rate fluctuations, exchange
controls, political risk and other risks relating to international operations.

We operate internationally and are subject to the risks of doing business on a global basis. These risks
include, but are not limited to, fluctuations in currency exchange rates, currency devaluations, imposition or the
threat of trade barriers (which could, among other things, negatively impact our ability to export our products
outside of the United States), imposition or the threat of tariffs and duties (which could, among other things, lead
to lower demand for our products outside of the United States), inflationary pressures and possibility of
recession, restrictions on the transfer of funds, changes in law and regulatory requirements, involvement in
judicial proceedings in unfavorable jurisdictions, economic instability and disruptions, political unrest and
epidemics. U.S. foreign trade policies could lead to the imposition of additional trade barriers and tariffs on us in
foreign jurisdictions. Our operating results could be negatively affected by any of these risks.

Our inability to compete successfully may reduce our operating profits.

The industries in which we operate are highly competitive. Historically, there have been a number of
mergers, acquisitions, spin-offs and joint ventures in the industry in which the PEM business operates. This
restructuring activity has resulted in fewer but more competitive PEM producers, many of which are larger than
we are and have greater financial resources than we do. Among our PEM competitors are some of the world’s
largest chemical companies and chemical industry joint ventures. Competition within the petrochemical industry
and in the manufacturing of housing and infrastructure products is affected by a variety of factors, including:

(cid:129)

product price;

balance of product supply/demand;

(cid:129) material, technology and process innovation;

(cid:129)

technical support and customer service;

quality;

reliability of raw material and utility supply;

availability of potential substitute materials; and

product performance.

Changes in the competitive environment could have a material adverse effect on our business and our

operations. These changes could include:

(cid:129)

the emergence of new domestic and international competitors;

the rate of capacity additions by competitors;

the additions of export storage facilities for natural gas liquids, ethane and ethylene;

changes in customer base due to mergers;

the intensification of price competition in our markets;

the introduction of new or substitute products by competitors; and

the technological innovations of competitors.

Our production facilities process some volatile and hazardous materials that subject us to operating risks that
could adversely affect our operating results.

We have manufacturing sites in North America, Europe and Asia. Our operations are subject to the usual

hazards associated with chemical, plastics, housing and infrastructure products manufacturing and the related
use, storage, transportation and disposal of feedstocks, products and wastes, and litigation arising as a result of
such hazards, including:

(cid:129)

pipeline leaks and ruptures;

explosions;

fires;

severe weather and natural disasters;

(cid:129) mechanical failure;

(cid:129)

unscheduled downtime;

labor difficulties;

transportation interruptions;

transportation accidents involving our products;

remediation complications;

chemical spills, discharges or releases of toxic or hazardous substances or gases;

other environmental risks;

sabotage;

terrorist attacks; and

political unrest.

All of these hazards can cause personal injury and loss of life, catastrophic damage to or destruction of

property and equipment and environmental damage, and may result in a suspension of operations and the
imposition of civil or criminal penalties. We are from time to time subject to environmental claims brought by
governmental entities or third parties. A loss or shutdown over an extended period of operations at any one of our
chemical manufacturing facilities would have a material adverse effect on us. We maintain property, business
interruption and casualty insurance that we believe is in accordance with customary industry practices, but we
cannot be fully insured against all potential hazards incident to our business, including losses resulting from wars
or terrorist acts, among other things. In addition, certain policies may be subject to coverage limitations, which
may affect the extent of any recovery thereunder. As a result of market conditions and past claims, premiums and
deductibles for certain insurance policies can increase substantially and, in some instances, certain insurance may
become unavailable or available only for reduced amounts of coverage. If we were to incur a significant liability
for which we were not fully insured, or if an insurer was unwilling or unable to meet its obligations, it could have
a material adverse effect on our financial condition, results of operations or cash flows.

We are exposed to significant losses from products liability, personal injury and other claims relating to the
products we manufacture. Additionally, individuals currently seek, and likely will continue to seek, damages for
alleged personal injury or property damage due to alleged exposure to chemicals at our facilities or to chemicals
otherwise owned, controlled or manufactured by us. We are also subject to present and future claims with respect
to workplace exposure, workers’ compensation and other matters. Any such claims, whether with or without

merit, could be time consuming, expensive to defend and could divert management’s attention and resources. We
maintain and expect to continue to maintain insurance for products liability, workplace exposure, workers’
compensation and other claims, but the amount and scope of such insurance may not be adequate or available to
cover a claim that is successfully asserted against us. In addition, such insurance could become more expensive
and difficult to maintain and may not be available to us on commercially reasonable terms or at all. The results of
any future litigation or claims are inherently unpredictable, but such outcomes could have a material adverse
effect on our financial condition, results of operations or cash flows.

We rely on a limited number of outside suppliers for specified feedstocks and services.

We obtain a significant portion of our raw materials from a few key suppliers. If any of these suppliers is

unable to meet its obligations under any present or future supply agreements, we may be forced to pay higher
prices to obtain the necessary raw materials. Any interruption of supply or any price increase of raw materials
could have a material adverse effect on our business and results of operations. A vendor may choose, subject to
existing contracts, to modify its relationship due to general economic concerns or concerns relating to the vendor
or us, at any time. Any significant change in the terms that we have with our key suppliers, or any significant
additional requirements from our suppliers that we provide them additional security in the form of prepayments
or with letters of credits, could materially adversely affect our financial condition, results of operations or cash
flows.

We rely heavily on third party transportation, which subjects us to risks and costs that we cannot control. Such
risks and costs may materially adversely affect our operations.

We rely heavily on railroads, barges, pipelines, ships, trucks and other shipping companies to transport raw
materials to the manufacturing facilities used by our businesses and to ship finished products to customers. These
transport operations are subject to various hazards and risks, including extreme weather conditions, work
stoppages and operating hazards (including pipeline leaks and ruptures and storage tank leaks), as well as
interstate transportation regulations. In addition, the methods of transportation we utilize, including shipping
chlorine and other chemicals by railroad, may be subject to additional, more stringent and more costly
regulations in the future. If we are delayed or unable to ship finished products or unable to obtain raw materials
as a result of any such new regulations or public policy changes related to transportation safety, or these
transportation companies fail to operate properly, or if there were significant changes in the cost of these services
due to new or additional regulations, or otherwise, we may not be able to arrange efficient alternatives and timely
means to obtain raw materials or ship goods, which could result in a material adverse effect on our business and
results of operations.

We may pursue acquisitions, dispositions, joint ventures or other transactions that may impact our results of
operations and financial condition. We may have difficulties integrating the operations of acquired
businesses.

We seek opportunities to maximize efficiency and create stockholder value through various transactions.

These transactions may include domestic and international business combinations, purchases or sales of assets or
contractual arrangements or joint ventures. In this regard, we regularly consider acquisition opportunities that
would be consistent or complementary to our existing business strategies. To the extent permitted under our
credit facility, the indenture governing our senior notes and other debt agreements, some of these transactions
may be financed by additional borrowings by us. Although we would pursue these transactions because we
expect them to yield longer-term benefits if the efficiencies and synergies we expect are realized, they could

adversely affect our results of operations in the short term because of the costs associated with such transactions
and because they may divert management’s attention from existing business operations. These transactions may
not yield the business benefits, synergies or financial benefits anticipated by management. Integration of acquired
operations could lead to restructuring charges or other costs.

Our ability to realize the anticipated benefits of acquisitions will depend, to a large extent, on our ability to

integrate our business with the acquired businesses. The combination of such independent businesses is a
complex, costly and time-consuming process. As a result, we have devoted, and will continue to devote
significant management attention and resources to integrating business practices and operations. The integration
process may disrupt the businesses and, if implemented ineffectively or if impacted by unforeseen negative
economic or market conditions or other factors, we may not realize the full anticipated benefits of the
acquisitions. Our failure to meet the challenges involved in integrating such businesses could adversely affect our
results of operations.

In addition, the overall integration of the businesses may result in material unanticipated problems,
expenses, liabilities, competitive responses, loss of customer relationships, or diversion of management’s
attention. Even if the operations of our businesses acquired are integrated successfully, we may not realize the
full benefits of the acquisitions, including the synergies, cost savings or sales or growth opportunities that we
expect. These benefits may not be achieved within the anticipated time frame, or at all. Furthermore, additional
unanticipated costs may be incurred in the integration of the businesses. All of these factors could decrease or
delay the expected benefits of the acquisitions and negatively impact us.

If we are unable to integrate or to successfully manage businesses that we may acquire in the future, our

business, financial condition and results of operations could be adversely affected. We may not be able to realize
the operating efficiencies, synergies, cost savings or other benefits expected from acquisitions for a number of
reasons, including the following:

(cid:129)

we may fail to integrate the businesses we acquire into a cohesive, efficient enterprise;

our resources, including management resources, are limited and may be strained if we engage in a
large acquisition or significant number of acquisitions, and acquisitions may divert our
management’s attention from initiating or carrying out programs to save costs or enhance revenues;
and

(cid:129)

our failure to retain key employees and contracts of the businesses we acquire.

Capital projects are subject to risks, including delays and cost overruns, which could have an adverse impact
on our financial condition and results of operations.

We have capital expansion plans for our facilities. Expansion projects may be subject to delays or cost

overruns, including delays or cost overruns resulting from any one or more of the following:

(cid:129)

unexpectedly long delivery times for, or shortages of, key equipment, parts or materials;

shortages of skilled labor and other personnel necessary to perform the work;

delays and performance issues;

failures or delays of third-party equipment vendors or service providers;

unforeseen increases in the cost of equipment, labor and raw materials;

work stoppages and other labor disputes;

(cid:129)

unanticipated actual or purported change orders;

disputes with contractors and suppliers;

design and engineering problems;

latent damages or deterioration to equipment and machinery in excess of engineering estimates and
assumptions;

financial or other difficulties of our contractors and suppliers;

sabotage;

terrorist attacks;

interference from adverse weather conditions; and

difficulties in obtaining necessary permits or in meeting permit conditions.

Significant cost overruns or delays could materially affect our financial condition and results of operations.

Additionally, actual capital expenditures could materially exceed our planned capital expenditures.

Public and investor sentiment towards climate change and other environmental, social and governance
(“ESG”) matters could adversely affect our cost of capital and the price of our common stock.

There have been intensifying efforts within the investment community (including investment advisors,
investment fund managers, sovereign wealth funds, public pension funds, universities and individual investors) to
promote the divestment of, or limit investment in, the stock of companies in the petrochemical industry. There
has also been pressure on lenders and other financial services companies to limit or curtail financing of
companies in the industry. Because we operate within the petrochemical industry, if these efforts continue or
expand, our stock price and our ability to raise capital may be negatively impacted.

Members of the investment community are increasing their focus on ESG practices and disclosures by
public companies, including practices and disclosures related to climate change and sustainability, DEI initiatives
and heightened governance standards. As a result, we may continue to face increasing pressure regarding our
ESG disclosures and practices. Additionally, members of the investment community may screen companies such
as ours for ESG disclosures and performance before investing in our stock. Over the past few years, there has
also been an acceleration in investor demand for ESG investing opportunities, and many large institutional
investors have committed to increasing the percentage of their portfolios that are allocated towards ESG
investments. With respect to any of these investors, our ESG disclosures and efforts may not satisfy the investor
requirements or their requirements may not be made known to us. If we or our securities are unable to meet the
ESG standards or investment criteria set by these investors and funds, we may lose investors or investors may
allocate a portion of their capital away from us, our cost of capital may increase, and our stock price may be
negatively impacted.

Our participation in joint ventures and similar arrangements exposes us to a number of risks, including risks
of shared control.

We are party to several joint ventures and similar arrangements, including an investment, together with

Lotte Chemical USA Corporation (“Lotte”), in a joint venture, LACC, LLC (“LACC”), to build and operate an
ethylene facility. Our participation in joint ventures and similar arrangements, by their nature, requires us to
share control with unaffiliated third parties. If there are differences in views among joint venture participants in
how to operate a joint venture that result in delayed decisions or the failure to make decisions, or our joint

venture partners do not fulfill their obligations, the affected joint venture may not be able to operate according to
its business plan and fulfill its obligations. In that case, we may be required to write down the value of our
investment in a joint venture, increase the level of financial or other commitments to the joint venture or, if we
have contractual agreements with the joint venture, our operations may be materially adversely affected. Any of
the foregoing could have a material adverse effect on our financial condition, results of operations or cash flows.

Our operations could be adversely affected by labor relations.

The vast majority of our employees in Europe and Asia, and some of our employees in North America, are

represented by labor unions and works councils. Our operations may be adversely affected by strikes, work
stoppages and other labor disputes.

We have certain material pension and other post-retirement employment benefit (“OPEB”) obligations.
Future funding obligations related to these obligations could restrict cash available for our operations, capital
expenditures or other requirements or require us to borrow additional funds.

We have U.S. and non-U.S. defined benefit pension plans covering certain current and former employees.

Certain non-U.S. defined benefit plans associated with our European operations have not been funded and we are
not obligated to fund those plans under applicable law. As of December 31, 2023, the projected benefit
obligations for our pension and OPEB plans were $1,123 million and $44 million, respectively. The fair value of
pension investment assets was $818 million as of December 31, 2023. The total underfunded status of the
pension obligations calculated on a projected benefit obligation basis as of December 31, 2023 was $305 million,
including the Westlake Defined Benefit Plan and the Vinnolit Pension Plan (locally known as ‘Grund- und
Zusatzversorgung’ in Germany), which were underfunded by $47 million and $142 million, respectively, on an
individual plan basis.

The unfunded OPEB obligations as of December 31, 2023 were $44 million. We will require future

operating cash flows to fund our pension and OPEB obligations, which could restrict available cash for our
operations, capital expenditures and other requirements. We may also not generate sufficient cash to satisfy these
obligations, which could require us to seek funding from other sources, including through additional borrowings,
which could materially increase our outstanding debt or debt service requirements.

If our goodwill or other long-lived assets become impaired in the future, we may be required to record
non-cash charges to earnings, which could be significant.

Under the accounting principles generally accepted in the United States (“GAAP”), we review goodwill for

impairment on an annual basis or more frequently if events or circumstances indicate that the carrying amount
may not be recoverable. Long-lived assets, including tangible assets and intangible assets with finite lives, are
reviewed if events or circumstances indicate that their carrying amount may not be recoverable. Our balance
sheet includes significant goodwill and long-lived assets. In the fourth quarter of 2023, we recorded a goodwill
impairment charge in the PEM segment of $128 million related to Westlake Epoxy and a non-cash long-lived
asset impairment charge of $347 million related to our base epoxy resin business in the Netherlands.

The process of impairment testing for our goodwill and long-lived assets involves a number of judgments

and estimates made by management including the fair values of assets and liabilities, future cash flows, our
interpretation of current economic indicators and market conditions, overall economic conditions and our
strategic operational plans with regards to our business units. If the judgments and estimates used in our analysis
are not realized or change due to future external factors, then actual results may not be consistent with these

judgments and estimates, and our goodwill and other long-lived assets may become further impaired in future
periods. If our goodwill and long-lived assets are determined to be impaired in the future, we may be required to
record further non-cash charges to earnings during the period in which the impairment is determined, which
could be significant and have an adverse effect on our financial condition and results of operations.

Failure to adequately protect critical data and technology systems could materially affect our operations.

We are increasingly dependent on digital technologies and services to conduct our business. We use these
technologies for internal and operational purposes, including data storage, processing, and transmission, as well
as in our interactions with our business associates, such as customers and suppliers.

Information technology system failures, network disruptions and breaches of data security due to internal

or external factors including cyber-attacks could have material adverse impacts on our business—and the
business of our subsidiaries and affiliates that we support—or cause disruptions to our operations. Such
disruptions could include, but are not limited to, delaying or cancelling customer orders, impeding the
manufacture or shipment of products or causing standard business processes to become ineffective, or the
unintentional or malicious disclosure of proprietary, confidential or other sensitive information. Cyber-attacks
could include, but are not limited to, ransomware attacks, malicious software, attempts to gain unauthorized
access to our systems or data or other electronic security breaches that could lead to disruptions in critical
systems, unauthorized release, corruption or loss of data including protected information such as personal
information of our employees, interruptions in communication, loss of our intellectual property or theft of our
sensitive or proprietary technology, loss or damage to our data delivery systems, or other cybersecurity and
infrastructure systems, including our property and equipment.

We have taken steps to address these risks by implementing network security and internal control

measures, including employee training, comprehensive monitoring of our networks and systems, maintenance of
backup and protective systems and disaster recovery and incident response plans. However, we also rely on our
business associates with whom we may share data and digital services to defend their digital technologies,
systems, and services against attack. As a result, there is a risk that an incident could originate from our business
associates, as well.

Our employees, systems, networks, products, facilities and services remain potentially vulnerable to

sophisticated cyber-assault, including the additional cybersecurity risks posed by the increased use of remote
networking technologies and services, and, as such, there can be no assurance that a system failure, network
disruption or data security breach will not have a material adverse effect on our business, financial condition,
operating results or cash flows. In addition, laws and regulations governing cybersecurity, data privacy, and the
unauthorized disclosure of confidential or protected information pose increasingly complex compliance
challenges, and failure to comply with these laws could result in penalties and legal liability.

Fluctuations in foreign currency exchange and interest rates could affect our consolidated financial results.

We earn revenues, pay expenses, own assets and incur liabilities in countries using currencies other than
the U.S. dollar. Because our consolidated financial statements are presented in U.S. dollars, we must translate
revenues and expenses into U.S. dollars at the average exchange rate during each reporting period, as well as
assets and liabilities into U.S. dollars at exchange rates in effect at the end of each reporting period. Therefore,
increases or decreases in the value of the U.S. dollar against other major currencies will affect our net sales,
operating income and the value of balance sheet items denominated in foreign currencies. Because of the
geographic diversity of our operations, weaknesses in various currencies might occur in one or many of such

currencies over time. From time to time, we may use derivative financial instruments to further reduce our net
exposure to currency exchange rate fluctuations. However, fluctuations in foreign currency exchange rates, such
as the strengthening of the U.S. dollar against major currencies, including, in particular, the Euro and the
Canadian dollar, could nevertheless materially adversely affect our financial results.

In addition, we are exposed to volatility in interest rates. When appropriate, we may use derivative

financial instruments to reduce our exposure to interest rate risks. However, our financial risk management
program may not be successful in reducing the risks inherent in exposures to interest rate fluctuations.

Our property insurance has only partial coverage for acts of terrorism and, in the event of terrorist attack, we
could lose net sales and our facilities.

Our insurance carriers maintain certain exclusions for losses from terrorism from our property insurance

policies. While separate terrorism insurance coverage is available, premiums for full coverage are very
expensive, especially for chemical facilities, and the policies are subject to high deductibles. Available terrorism
coverage typically excludes coverage for losses from acts of war and from acts of foreign governments as well as
nuclear, biological and chemical attacks. We have determined that it is not economically prudent to obtain full
terrorism insurance, especially given the significant risks that are not covered by such insurance. Where feasible
we have secured some limited terrorism insurance coverage on our property where insurers have included it in
their overall programs. In the event of a terrorist attack impacting one or more of our facilities, we could lose the
net sales from the facilities and the facilities themselves, and could become liable for any contamination or for
personal or property damage due to exposure to hazardous materials caused by any catastrophic release that may
result from a terrorist attack.

The impact and effects of public health crises, pandemics and epidemics could adversely affect our business,
financial condition and results of operations.

Public health crises, pandemics and epidemics, such as the COVID-19 pandemic, could materially
adversely affect our business, financial condition and results of operations. Such events have resulted in and
could again result in authorities implementing numerous measures to try to contain the disease, such as travel
bans and restrictions, quarantines, shelter-in-place orders and shutdowns, among others. Such events have had
and could again have widespread adverse impacts on the global economy, many of our facilities and on our
employees, customers and suppliers. These and similar events have caused and may again cause supply chain
constraints and disruptions and workforce availability issues as well.

Legal, Governmental and Regulatory Risks

Our operations and assets are subject to extensive environmental, health and safety laws and regulations.

We use large quantities of hazardous substances and generate hazardous wastes and emissions in our
manufacturing operations. Due to the associated quantities of hazardous substances and wastes, our industry is
highly regulated and monitored by various environmental regulatory authorities such as the EPA, federal or state
analogs in other countries and the European Union, which promulgated the Industrial Emission Directive
(“IED”). As such, we are subject to extensive international, national, state and local laws, regulations and
directives pertaining to pollution and protection of the environment, health and safety, which govern, among
other things, emissions to the air, discharges onto land or waters, the maintenance of safe conditions in the
workplace, the remediation of contaminated sites, and the generation, handling, storage, transportation, treatment
and disposal of waste materials. Some of these laws, regulations and directives are subject to varying and

conflicting interpretations. Many of these laws, regulations and directives provide for substantial fines and
potential criminal sanctions for violations and require the installation of costly pollution control equipment or
operational changes to limit pollution emissions or reduce the likelihood or impact of hazardous substance
releases, whether permitted or not. For example, all of our petrochemical facilities in the United States and
Europe may require improvements to comply with certain changes in process safety management requirements.

New laws, rules and regulations as well as changes to laws, rules and regulations may also affect us. For

example, on April 17, 2012, the EPA promulgated maximum achievable control technology standards for major
sources and generally available control technology standards for area sources of PVC production. The rule sets
emission limits and work practice standards for total organic air toxics and for three specific air toxics: vinyl
chloride, chlorinated di-benzo dioxins and furans and hydrogen chloride and includes requirements to
demonstrate initial and continuous compliance with the emission standards. In June 2012, the EPA received
petitions for reconsideration of the rule. On November 9, 2020, the EPA proposed rule amendments to address
issues raised in the petitions for reconsideration. While this rule is the subject of legal challenge and EPA
reconsideration, the rule has not been stayed. Although we cannot predict the outcome or timing of the legal
challenges or EPA reconsideration, the EPA’s proposed rule amendments could require us to incur further capital
expenditures, or increase our operating costs, to levels higher than what we have previously estimated.

In April 2023, the EPA proposed amendments to new source performance standards for the synthetic
organic chemical manufacturing industry and amendments to the national emissions standards for hazardous air
pollutants for the synthetic organic chemical manufacturing industry and group I & II polymers and resins
industry. These proposed amendments, among other things, would impose tougher emissions limits, additional
leak detection and repair obligations, certain performance standard for the operation of flares at applicable
facilities, and new fenceline air monitoring for several chemicals. Although we cannot predict the outcome or
timing of EPA’s final rule amendments, the amendments as proposed would require us to incur further capital
expenditures and increase operating costs.

On May 6, 2022, the EPA finalized rules amending (i) the national emission standards for hazardous air

pollutants (“NESHAPs”) for mercury emissions from mercury cell chlor-alkali plants and (ii) the 2003
NESHAPs for mercury cell chlor-alkali plants residual risk and technology review. Among other things, the
amendments require improvements in work practices to reduce fugitive mercury emissions and work practice
standards for the cell rooms and instrumental monitoring of cell room fugitive emissions, modify regulatory
provisions regarding startup, shutdown, and malfunctions, and add standards for fugitive chlorine emissions from
mercury cell chlor-alkali plants, which are not currently regulated under the NESHAP. The final rules also
include a requirement to cease all mercury emissions from the operation of mercury cell chlor-alkali facilities by
May 6, 2025. We operate a mercury cell production unit at our Natrium facility. Compliance with the final rules
resulted in additional restrictions on our operations, increased compliance costs and will result in the cessation of
operation of the mercury cell production unit.

Our operations produce greenhouse gas (“GHG”) emissions, which have been the subject of increased
scrutiny and regulation. In December 2015, the United States joined the international community at the 21st
Conference of the Parties of the United Nations Framework Convention on Climate Change in Paris, France. The
resulting Paris Agreement calls for the parties to undertake “ambitious efforts” to limit the average global
temperature and to conserve and enhance sinks and reservoirs of greenhouse gases. The United States signed the
Paris Agreement in April 2016, and the Paris Agreement went into effect in November 2016. In November 2019,
the United States submitted formal notification to the United Nations that it intended to withdraw from the Paris
Agreement. The withdrawal took effect in November 2020. However, President Biden signed an executive order

on January 20, 2021 for reentry of the United States into the Paris Agreement and on February 19, 2021,
President Biden formally rejoined the Paris Agreement. As part of rejoining the Paris Agreement, President
Biden announced that the United States would commit to a 50 to 52 percent reduction from 2005 levels of GHG
emissions by 2030 and set the goal of reaching net-zero GHG emissions by 2050. To measure progress towards
this target, the Paris Agreement requires the parties to complete a global stocktake, assessing members’
collective efforts and achievements in reducing GHG emissions and adapting to the impacts of climate change,
every five years. On December 13, 2023, the 28th annual United Nations Climate Change Conference (“COP
28”), which was held in Dubai, issued its first global stocktake, which calls on parties, including the
United States, to contribute to the transitioning away from fossil fuels, reduce methane emissions, and increase
renewable energy capacity, among other things, to achieve net zero emissions by 2050. Legislation to regulate
GHG emissions has periodically been introduced in the United States Congress, and such legislation may be
proposed or adopted in the future. There has been a wide-ranging policy debate regarding the impact of these
gases and possible means for their regulation. Some of the proposals would require industries to meet stringent
new standards that would require substantial reductions in carbon emissions. The adoption and implementation
of any international, federal or state legislation or regulations that restrict emissions of GHGs could result in
increased compliance costs or additional operating restrictions.

Various jurisdictions have considered or adopted laws and regulations on GHG emissions, with the general

aim of reducing such emissions. The EPA currently requires certain industrial facilities to report their GHG
emissions, and to obtain permits with stringent control requirements before constructing or modifying new
facilities with significant GHG emissions. In the European Union, the Emissions Trading Scheme obligates
certain emitters to obtain GHG emission allowances to comply with a cap and trade system for GHG emissions.
In addition, the European Union has committed to reduce domestic GHG emissions by at least 57% below the
1990 level by 2030. Effective January 2023, the European Union expanded its sustainability-related reporting
with its Corporate Sustainability Reporting Directive, which requires the reporting of Scope 1, 2, and 3 emissions
and climate-related financial risks, in addition to a broad array of sustainability-related information. The SEC
proposed similar climate-related disclosures in March 2022 and, in September of 2023, California passed
climate-related disclosure mandates that are broader than the SEC’s proposed rules. As our chemical
manufacturing processes result in GHG emissions, these and other GHG laws and regulations could affect our
costs of doing business.

Similarly, the Toxic Substances Control Act (“TSCA”) imposes reporting, record-keeping and testing

requirements, and restrictions relating to the production, handling, and use of chemical substances. The TSCA
reform legislation enacted in June 2016 expanded the EPA’s authority to review and regulate new and existing
chemicals. Under the reform legislation, the EPA is required to, among other things, undertake rule making
within statutory time frames related to: (1) chemical risk evaluation, designation and management; (2) reporting
of mercury supply, use and trade; and (3) management of persistent, bioaccumulative, and toxic chemical
substances (“PBTs”). In response to this mandate, the EPA issued rules establishing the EPA’s process and
criteria for identifying high priority chemicals for risk evaluation and setting the EPA’s approach for determining
whether these high priority chemicals present an unreasonable risk to health or the environment. Pursuant to its
rules, the EPA designated certain chemical substances as high priority for risk evaluation. We manufacture
several of these chemical substances. On December 14, 2023, the EPA announced that it will prioritize vinyl
chloride (used to make PVC) for evaluation and potential regulation under TSCA as a High Priority Substance.
In November 2023, the European Chemicals Agency (“ECHA”) sent its investigation results of the risks from
PVC and PVC additives to the European Commission for further consideration. The EPA has proposed risk
management rules which would phase out the manufacturing, processing and distribution of TCE completely,

PCE for consumer and most industrial and commercial uses, and asbestos for commercial use. Under the risk
management rule process established by the TSCA, the EPA has also issued several Test Orders for chemical
substances that we manufacture or import, including EDC. Although we cannot predict with certainty the extent
of our future liabilities and costs at this time, we do not anticipate that the Test Order requirements or risk
evaluation and management rules of these chemical substances will have a material adverse effect on our
business, financial condition, operating results or cash flows.

In addition, the TSCA inventory reset rule required industry reporting of chemicals manufactured or
processed in the United States over a 10-year period ending in 2016. This reporting is used by the EPA to
identify which chemicals are active or inactive on the TSCA Inventory. Beginning in 2019, chemical
manufacturers and processors are required to notify and obtain approval by the EPA before reintroducing inactive
chemicals into commerce. A final mercury reporting rule published in June 2018 requires manufacturers,
including manufacturers who use mercury in a manufacturing process, to report information about their mercury
supply, use and trade. The first periodic reporting deadline under the mercury reporting rule was July 1, 2019.
The EPA used the information collected to develop an inventory of mercury and mercury-added products as well
as mercury-use manufacturing processes. The EPA also recommended actions and rule amendments based on the
collected information. We cannot predict the timing or content of these actions or amendments, or their ultimate
cost to, or impact on us.

On June 28, 2021, the EPA proposed reporting and recordkeeping requirements for Per- and

Polyfluoroalkyl Substances (“PFAS”) under TSCA. The EPA issued its final rule on September 28, 2023, which
requires manufacturers, and importers, that have manufactured or imported PFAS chemicals since January 1,
2011, to electronically report information regarding PFAS uses, production volumes, disposal, exposures, and
hazards. On September 6, 2022, the EPA proposed listing perfluorooctanoic acid (“PFOA”) and perfluorooctane
sulfonic acid (PFOS) as CERCLA hazardous substances. PFAS chemicals have come under increased scrutiny by
federal, state, and local governments. For example, many states have banned the use of PFAS in certain
consumer products and set Maximum Contaminant Levels for PFAS in drinking water. On March 14, 2023, the
EPA announced a proposed National Primary Drinking Water Regulation for six PFAS, including PFOA, PFOS,
perfluorononanoic acid (PFNA), hexafluoropropylene oxide dimer acid (HFPO-DA, commonly known as GenX
Chemicals), perfluorohexane sulfonic acid (PFHxS), and perfluorobutane sulfonic acid (PFBS). On February 7,
2023, the ECHA published proposed restrictions on PFAS. We are unable to predict the impact these
requirements and concepts may have on our future costs of compliance.

Under the IED, European Union member state governments are expected to adopt rules and implement

environmental permitting programs relating to air, water and waste for industrial facilities. In this context,
concepts such as the “best available technique” are being explored. Future implementation of these concepts may
result in technical modifications in our European facilities. In addition, under the Environmental Liability
Directive, European Union member states can require the remediation of soil and groundwater contamination in
certain circumstances, under the “polluter pays principle.” The European Chemical Agency is collecting
information on PVC and its additives to determine whether further regulation is warranted. We are unable to
predict the impact these requirements and concepts may have on our future costs of compliance.

Local, state, federal and foreign governments have increasingly proposed or implemented restrictions on
certain plastic-based products, including single-use plastics and plastic food packaging. Plastics have also faced
increased public scrutiny due to negative coverage of plastic waste in the environment. On January 12, 2023, the
EPA published a tentative denial of the 2014 Center for Biological Diversity Petition to regulate discarded PVC
as hazardous waste under the Resource Conservation and Recovery Act. Pursuant to a consent decree entered

into by the EPA and the Center for Biological Diversity, the EPA has until April 12, 2024 to issue its final
determination. We are unable to predict the EPA’s final decision in this matter or its impact on us. However,
increased regulation on the use of plastics could cause reduced demand for our polyethylene products, which
could adversely affect our business, operating results and financial condition.

These rules or future new, amended or proposed laws or rules could increase our costs or reduce our
production, which could have a material adverse effect on our business, financial condition, operating results or
cash flows. In addition, we cannot accurately predict future developments, such as increasingly strict
environmental and safety laws or regulations, and inspection and enforcement policies, as well as resulting
higher compliance costs, which might affect the handling, manufacture, use, emission, disposal or remediation of
products, other materials or hazardous and non-hazardous waste, and we cannot predict with certainty the extent
of our future liabilities and costs under environmental, health and safety laws and regulations. These liabilities
and costs may be material.

We also may face liability for alleged personal injury or property damage due to exposure to chemicals or

other hazardous substances at our facilities or to chemicals that we otherwise manufacture, handle or own.
Although these types of claims have not historically had a material impact on our operations, a significant
increase in the success of these types of claims could have a material adverse effect on our business, financial
condition, operating results or cash flows.

Environmental laws may have a significant effect on the nature and scope of, and responsibility for,
cleanup of contamination at our current and former operating facilities, the costs of transportation and storage of
raw materials and finished products, the costs of reducing emissions and the costs of the storage and disposal of
wastewater. The U.S. Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”),
similar state laws and certain European directives impose joint and several liability for the costs of remedial
investigations and actions on the entities that generated waste, arranged for disposal of the waste, transported to
or selected the disposal sites, and the past and present owners and operators of such sites. All such potentially
responsible parties (or any one of them, including us) may be required to bear all of such costs regardless of fault,
legality of the original disposal or ownership of the disposal site. In addition, CERCLA, similar state laws and
certain European directives could impose liability for damages to natural resources caused by contamination.

Although we seek to take preventive action, our operations are inherently subject to accidental spills,
discharges or other releases of hazardous substances that may make us liable to governmental entities or private
parties. This may involve contamination associated with our current and former facilities, facilities to which we
sent wastes or by-products for treatment or disposal and other contamination. Accidental discharges may occur in
the future, future action may be taken in connection with past discharges, governmental agencies may assess
damages or penalties against us in connection with any past or future contamination, or third parties may assert
claims against us for damages allegedly arising out of any past or future contamination. In addition, we may be
liable for existing contamination related to certain of our facilities for which, in some cases, we believe third
parties are liable in the event such third parties fail to perform their obligations.

Our operations and assets are subject to climate-related risks and uncertainties.

We are subject to increasing climate-related risks and uncertainties, many of which are outside of our

control. Climate change may result in more frequent severe weather events, potential changes in precipitation
patterns, flooding, sea level rise, and variability in weather patterns, which can disrupt our operations as well as
those of our customers, partners and suppliers. Climate change may result in heightened hurricane activity in the

Gulf of Mexico and other weather and natural disaster hazards that pose a risk to our facilities, particularly those
in Louisiana. The transition to lower greenhouse gas emissions technology, the effects of carbon pricing, changes
in public sentiment, regulations, taxes, public mandates or requirements, increases in climate-related lawsuits,
insurance premiums and implementation of more robust disaster recovery and business continuity plans may
increase costs to maintain or resume our operations, which could in turn negatively impact our business and
results of operations.

We are subject to operational and financial risks and liabilities associated with the implementation of and
efforts to achieve our carbon emission reduction goals.

We have publicly announced a GHG emissions reduction target for 2030. We believe that our expected

allocation of growth capital into lower-carbon projects is consistent with such targets; however, our analysis and
plan for execution requires us to make a number of assumptions. These goals and underlying assumptions
involve risks and uncertainties and are not guarantees. Should one or more of our underlying assumptions prove
incorrect, our actual results and ability to achieve our GHG emissions reduction goal could differ materially from
our expectations. For example, certain lower-carbon projects that we plan to make investments in are currently at
various stages of progress, evaluation or approval.

Developing and implementing plans for compliance with voluntary climate commitments can lead to

additional capital, personnel, operations and maintenance expenditures and could significantly affect the
economic position of existing facilities and proposed projects. Our failure or perceived failure to pursue or fulfill
our sustainability-focused goals, targets and objectives within the timelines we announce, or at all, could
adversely affect our business or reputation, as well as expose us to potential government enforcement actions and
private litigation. We cannot predict the ultimate impact of achieving our emissions reduction goal, or the various
implementation aspects, on our financial condition and results of operations.

Risks Related to Our Indebtedness

Our level of debt could adversely affect our ability to operate our business.

As of December 31, 2023, our indebtedness, including the current portion, totaled $4.9 billion, and our debt

represented approximately 31.3% of our total capitalization. Our annual interest expense for 2023 was
$165.0 million, net of interest capitalized of $8.0 million. Our level of debt and the limitations imposed on us by
our existing or future debt agreements could have significant consequences on our business and future prospects,
including the following:

(cid:129)

a portion of our cash flows from operations will be dedicated to the payment of interest and principal
on our debt and will not be available for other purposes;

we may not be able to obtain necessary financing in the future for working capital, capital
expenditures, acquisitions, debt service requirements or other purposes;

our less leveraged competitors could have a competitive advantage because they have greater
flexibility to utilize their cash flows to improve their operations;

we may be exposed to risks inherent in interest rate fluctuations because some of our borrowings are
at variable rates of interest, which would result in higher interest expense in the event of increases in
interest rates;

we could be vulnerable in the event of a downturn in our business that would leave us less able to
take advantage of significant business opportunities and to react to changes in our business and in
market or industry conditions; and

(cid:129)

should we pursue additional expansions of existing assets or acquisition of third-party assets, we may
not be able to obtain additional liquidity at cost effective interest rates.

These factors could be magnified or accelerated to the extent we were to finance future acquisitions with

significant amounts of debt.

To service our indebtedness and fund our capital requirements, we will require a significant amount of cash.
Our ability to generate cash depends on many factors beyond our control.

Our ability to make payments on and to refinance our indebtedness and to fund planned capital
expenditures and pay cash dividends will depend on our ability to generate cash in the future, including any
distributions that we may receive from Westlake Partners. This is subject to general economic, financial,
currency, competitive, legislative, regulatory and other factors that are beyond our control.

Our business may not generate sufficient cash flows from operations, we may not receive sufficient
distributions from Westlake Partners, and currently anticipated cost savings and operating improvements may not
be realized on schedule. We also generate revenues denominated in currencies other than that of our indebtedness
and may have difficulty converting those revenues into the currency of our indebtedness. We may need to
refinance all or a portion of our indebtedness on or before maturity. In addition, we may not be able to refinance
any of our indebtedness, including our credit facility and our senior notes, on commercially reasonable terms or
at all. All of these factors could be magnified if we were to finance any future acquisitions with significant
amounts of debt.

The Credit Agreement and the indenture governing certain of our senior notes impose significant operating
and financial restrictions, which may prevent us from capitalizing on business opportunities and taking some
actions.

The Credit Agreement and the indenture governing certain of our senior notes impose significant operating

and financial restrictions on us. These restrictions limit our ability to:

(cid:129)

incur additional indebtedness;

create liens;

sell all or substantially all of our assets or consolidate or merge with or into other companies; and

engage in sale-leaseback transactions.

These limitations are subject to a number of important qualifications and exceptions. The Credit

Agreement also requires us to maintain a quarterly total leverage ratio.

These covenants may adversely affect our ability to finance future business opportunities or acquisitions. A

breach of any of these covenants could result in a default in respect of the related debt. If a default occurred, the
relevant lenders could elect to declare the debt, together with accrued interest and other fees, to be immediately
due and payable. In addition, any acceleration of debt under the Credit Agreement will constitute a default under
some of our other debt, including the indentures governing our senior notes.

Risks Related to Taxes

A change in tax laws, treaties or regulations, or their interpretation or application, could have a negative
impact on our business and results of operations.

We operate in many different countries and in many states within the United States, and we are subject to

changes in applicable tax laws, treaties or regulations in the jurisdictions in which we operate. A material change

in these tax laws, treaties or regulations, or their interpretation or application, could have a negative impact on
our business and results of operations.

On August 16, 2022, the Inflation Reduction Act of 2022 (the “IRA”) was signed into law. The IRA

contains several revisions to the Internal Revenue Code of 1986, as amended (the “Code”), including a 15%
corporate minimum income tax for corporations with average annual adjusted financial statement income over a
three-tax-year period in excess of $1 billion and is effective for the tax years beginning after December 31, 2022,
a 1% excise tax on stock repurchases made by publicly traded U.S. corporations after December 31, 2022, and
business tax credits and incentives for the development of clean energy projects and the production of clean
energy. At this time, we do not expect the IRA will have a material impact on our consolidated financial
statements. We continue to evaluate its impacts as new information and guidance becomes available.

We depend in part on distributions from Westlake Partners to generate cash for our operations, capital
expenditures, debt service and other uses. Westlake Partners’ tax treatment depends on its status as a
partnership for federal income tax purposes, and it not being subject to a material amount of entity-level
taxation. If the Internal Revenue Service (“IRS”) were to treat Westlake Partners as a corporation for federal
income tax purposes, or if Westlake Partners became subject to entity-level taxation for state tax purposes, its
cash available for distribution would be substantially reduced, which would also likely cause a substantial
reduction in the value of its common units that we hold.

The anticipated after-tax economic benefit of an investment in the common units of Westlake Partners
depends largely on Westlake Partners being treated as a partnership for U.S. federal income tax purposes. Despite
the fact that Westlake Partners is organized as a limited partnership under Delaware law, it would be treated as a
corporation for U.S. federal income tax purposes unless it satisfies a “qualifying income” requirement. Based on
Westlake Partners’ current operations and current Treasury Regulations, Westlake Partners believes it satisfies
the qualifying income requirement.

Prior to its initial public offering, Westlake Partners requested and obtained a favorable private letter ruling

from the IRS to the effect that, based on facts presented in the private letter ruling request, income from the
production, transportation, storage and marketing of ethylene and its co-products constitutes “qualifying income”
within the meaning of Section 7704 of the Code. However, no ruling has been or will be requested regarding
Westlake Partners’ treatment as a partnership for U.S. federal income tax purposes. Failing to meet the qualifying
income requirement or a change in current law could cause Westlake Partners to be treated as a corporation for
U.S. federal income tax purposes or otherwise subject Westlake Partners to taxation as an entity.

If Westlake Partners were treated as a corporation for federal income tax purposes, it would pay U.S.

federal income tax on its taxable income at the corporate tax rate. Because a tax would be imposed upon
Westlake Partners as a corporation, its cash available for distribution to its unitholders would be substantially
reduced. Therefore, treatment of Westlake Partners as a corporation would result in a material reduction in the
anticipated cash flow and after-tax return to its unitholders, likely causing a substantial reduction in the value of
its common units.

Westlake Partners’ partnership agreement provides that if a law is enacted or an existing law is modified or

interpreted in a manner that subjects Westlake Partners to taxation as a corporation or otherwise subjects
Westlake Partners to entity-level taxation for U.S. federal, state, local or foreign income tax purposes, the
minimum quarterly distribution amount and the target distribution amounts may be adjusted to reflect the impact
of that law or interpretation on Westlake Partners. At the state level, several states have been evaluating ways to

subject partnerships to entity-level taxation through the imposition of state income, franchise or other forms of
taxation. Westlake Partners currently owns assets and conducts business in several states, most of which impose
entity-level franchise or gross receipt taxes on partnerships. Imposition of similar entity-level taxes on Westlake
Partners in other jurisdictions in which Westlake Partners conducts operations in the future could substantially
reduce its cash available for distribution.

Risks Related to the Ownership of Our Securities

We will be controlled by our principal stockholder and its affiliates as long as they own a majority of our
common stock, and our other stockholders will be unable to affect the outcome of stockholder voting during
that time. Our interests may conflict with those of the principal stockholder and its affiliates, and we may not
be able to resolve these conflicts on terms possible in arms-length transactions.

As long as TTWF LP (the “principal stockholder”) and certain of its affiliates (such affiliates, together with

the principal stockholder, the “principal stockholder affiliates”), which as of December 31, 2023, beneficially
owned approximately 72% of our common stock, own a majority of our outstanding common stock, they will be
able to exert significant control over us, and our other stockholders, by themselves, will not be able to affect the
outcome of any stockholder vote. As a result, the principal stockholder, subject to any fiduciary duty owed to our
minority stockholders under Delaware law, will be able to control all matters affecting us (some of which may
present conflicts of interest), including:

(cid:129)

the composition of our Board of Directors and, through the Board, any determination with respect to
our business direction and policies, including the appointment and removal of officers and the
determination of compensation;

any determinations with respect to mergers or other business combinations or the acquisition or
disposition of assets;

our financing decisions, capital raising activities and the payment of dividends; and

amendments to our restated certificate of incorporation or amended and restated bylaws.

The principal stockholder will be permitted to transfer a controlling interest in us without being required to

offer our other stockholders the ability to participate or realize a premium for their shares of common stock. A
sale of a controlling interest to a third party may adversely affect the market price of our common stock and our
business and results of operations because the change in control may result in a change of management decisions
and business policy. Because we have elected not to be subject to Section 203 of the General Corporation Law of
the State of Delaware, the principal stockholder may find it easier to sell its controlling interest to a third party
than if we had not so elected.

In addition to any conflicts of interest that arise in the foregoing areas, our interests may conflict with those

of the principal stockholder affiliates in a number of other areas, including:

(cid:129)

business opportunities that may be presented to the principal stockholder affiliates and to our officers
and directors associated with the principal stockholder affiliates, and competition between the
principal stockholder affiliates and us within the same lines of business;

the solicitation and hiring of employees from each other; and

agreements with the principal stockholder affiliates relating to corporate services that may be
material to our business.

We may not be able to resolve any potential conflicts with the principal stockholder affiliates, and even if
we do, the resolution may be less favorable than if we were dealing with an unaffiliated party, particularly if the
conflicts are resolved while we are controlled by the principal stockholder affiliates. Our restated certificate of
incorporation provides that the principal stockholder affiliates have no duty to refrain from engaging in activities
or lines of business similar to ours and that the principal stockholder affiliates will not be liable to us or our
stockholders for failing to present specified corporate opportunities to us.

Item 1B. Unresolved Staff Comments

None.

Item 1C. Cybersecurity

The Company maintains a comprehensive approach to cybersecurity and data protection, based on a risk-

based, defense-in-depth strategy. We regularly assess industry best practices and standards and endeavor to
implement them in our efforts to manage cybersecurity risk. We follow industry standard cybersecurity
frameworks, including the National Institute of Standards and Technology’s Cybersecurity Framework, to
design, assess and update our cybersecurity strategy, controls and processes. Our focus is on protecting our
highest-value information assets, which include manufacturing systems, financial systems, and confidential,
personal, and private information.

To safeguard our networks and systems, we have a dedicated cybersecurity organization overseen by our
Chief Information Security Officer, which operates within our information technology department overseen by
our Chief Information Officer. Our cybersecurity organization employs multiple security controls, such as
firewalls, spam protection, web filtering, endpoint detection and response software, controlled access,
vulnerability management, redundancies, patching, and regular onsite and offsite backups. Our cybersecurity
organization also uses a variety of processes to address cybersecurity threats related to the use of third-party
technology and services, including pre-acquisition diligence, imposition of contractual obligations, and risk-
based performance monitoring.

Both our Chief Information Officer and our Chief Information Security Officer have extensive experience

in assessing and managing cybersecurity risks, including decades of collective experience in information
technology and cybersecurity roles of increasing responsibility both at the Company and in prior positions. We
prioritize cybersecurity awareness among our employees and contractors through various training exercises,
including formal programs and simulated phishing events. We maintain incident response plans, playbooks, and
engage third-party cybersecurity firms for simulated cyberattacks and penetration testing to identify potential
risks. We also have a third-party cybersecurity firm on retainer for incident assistance and response. Periodic
internal self-assessments are conducted by our cybersecurity organization using the National Institute of
Standards and Technology Cybersecurity Framework.

From time to time, we experience cybersecurity threats and attempted breaches and other incidents. We

classify and track these events based on significance and implement remediation actions that we consider
appropriate to address the risks relating to such incidents. Although we have not experienced material impacts to
our business strategy, results of operations or financial condition from any such incidents in the past three years,
we cannot guarantee that a material incident will not occur in the future. Refer to “Failure to adequately protect
critical data and technology systems could materially affect our operations” under “Item 1A. Risk Factors—
Legal, Government and Regulatory Risks” of this Form 10-K.

Our Board has charged the Corporate Risk and Sustainability Committee with assisting the Board with its
oversight of cybersecurity risks, which is a component of our overall enterprise risk management program. The
Corporate Risk and Sustainability Committee includes directors with cybersecurity experience and expertise,
primarily through supervision of information technology departments as executive officers. The Corporate Risk
and Sustainability Committee receives regular updates from senior management and our Chief Information
Officer on cybersecurity risks, incidents and trends, and ongoing and planned projects. Regular status reports are
also provided by the cybersecurity organization to our Chief Information Officer and other members of our
senior management and incident updates are reported to senior management as the Chief Information Officer and
cybersecurity organization considers appropriate depending on the severity of the incident.

As part of our incident response planning, we also maintain cross-functional response teams involving
personnel outside of our cybersecurity organization, both globally and regionally, in order to be prepared to
respond to an incident.

Item 2. Properties

Information concerning the principal locations from which our products are manufactured are included in
the tables set forth under the captions “Performance and Essential Materials Business—Products” and “Housing
and Infrastructure Products Business—Products” contained in “Item 1. Business.”

Headquarters

Our principal executive offices are located in Houston, Texas. Some of our office space is leased, at market

rates, from an affiliate of our principal stockholder. See Note 20 to the consolidated financial statements
appearing elsewhere in this Form 10-K and “Certain Relationships and Related Party Transactions” in our proxy
statement to be filed with the SEC pursuant to Regulation 14A with respect to our 2024 annual meeting of
stockholders (the “Proxy Statement”).

Item 3. Legal Proceedings

In addition to the matters described under “Item 1. Business—Environmental” and Note 22 to our
consolidated financial statements included in Item 8 of this Form 10-K, we are involved in various legal
proceedings incidental to the conduct of our business. We do not believe that any of these legal proceedings will
have a material adverse effect on our financial condition, results of operations or cash flows.

Item 4. Mine Safety Disclosure

Not Applicable.

Information about our Executive Officers

James Y. Chao (age 76). Mr. Chao has been our Chairman of the Board of Directors since July 2004 and
became a director in June 2003. From May 1996 to July 2004, he served as our Vice Chairman. Mr. Chao has
over 45 years of global experience in the chemical industry. In addition, Mr. Chao has been the Chairman of the
Board of Westlake Partners’ general partner since its formation in March 2014. From June 2003 until November
2010, Mr. Chao was the executive chairman of Titan Chemicals Corp. Bhd. He has served as a Special Assistant
to the Chairman of China General Plastics Group and worked in various financial, managerial and technical
positions at Mattel Incorporated, Developmental Bank of Singapore, Singapore Gulf Plastics Pte. Ltd. and Gulf
Oil Corporation. Mr. Chao, along with his brother Albert Chao, assisted their father T.T. Chao in founding

Westlake Corporation (formerly known as Westlake Chemical Corporation). He is the brother of Albert Y. Chao,
father of Catherine T. Chao and David T. Chao and uncle of John T. Chao and Carolyn C. Sabat. Mr. Chao
received his B.S. degree from Massachusetts Institute of Technology and an M.B.A. from Columbia University.

Albert Y. Chao (age 74). Mr. Chao has been our President since May 1996 and a director since June 2003.
Mr. Chao became our Chief Executive Officer in July 2004. Mr. Chao has over 40 years of global experience in
the chemical industry. In 1985, Mr. Chao assisted his father T.T. Chao and his brother James Chao in founding
Westlake Corporation (formerly known as Westlake Chemical Corporation), where he served as Executive Vice
President until he succeeded James Chao as President. In addition, Mr. Chao has been the President, Chief
Executive Officer and a director of Westlake Partners’ general partner since its formation in March 2014. He has
held positions in the Controller’s Group of Mobil Oil Corporation, in the Technical Department of Hercules
Incorporated, in the Plastics Group of Gulf Oil Corporation and has served as Assistant to the Chairman of China
General Plastics Group and Deputy Managing Director of a plastics fabrication business in Singapore. He is the
brother of James Y. Chao, father of John T. Chao and Carolyn C. Sabat and uncle of Catherine T. Chao and
David T. Chao. Mr. Chao received a bachelor’s degree from Brandeis University and an M.B.A. from Columbia
University.

M. Steven Bender (age 67). Mr. Bender has been our Executive Vice President and Chief Financial Officer

since July 2017. From February 2008 to July 2017, Mr. Bender served as our Senior Vice President and Chief
Financial Officer. In addition, Mr. Bender served as our Treasurer from July 2011 to April 2017, a position he
also held from February 2008 until December 2010. From February 2007 to February 2008, Mr. Bender served
as our Vice President, Chief Financial Officer and Treasurer and from June 2005 to February 2007, he served as
our Vice President and Treasurer. In addition, Mr. Bender has been a director of Westlake Partners’ general
partner since its formation in March 2014, its Executive Vice President and Chief Financial Officer since
February 2021, and its Senior Vice President and Chief Financial Officer from March 2014 to February 2021.
Prior to joining Westlake, from June 2002 until June 2005, Mr. Bender served as Vice President and Treasurer of
KBR, Inc., and from 1996 to 2002 he held the position of Assistant Treasurer for Halliburton Company. Prior to
that, he held various financial positions within that company. Additionally, he was employed by Texas Eastern
Corporation for over a decade in a variety of increasingly responsible audit, finance and treasury positions.
Mr. Bender received a Bachelor of Business Administration from Texas A&M University and an M.B.A. from
Southern Methodist University. Mr. Bender is also a Certified Public Accountant.

Robert F. Buesinger (age 67). Mr. Buesinger has been our Executive Vice President, Housing and
Infrastructure Products, IT and Digital since February 2022. From July 2017 to February 2022, Mr. Buesinger
served as our Executive Vice President, Vinyl Products and, from April 2010 to July 2017, he served as our
Senior Vice President, Vinyls. Prior to joining us, Mr. Buesinger served as the General Manager and President of
Chevron Phillips Chemical Company L.P.’s Performance Pipe Division from February 2010 to March 2010.
From June 2008 to January 2010, Mr. Buesinger held the position of General Manager in the Alpha Olefins and
Poly Alpha Olefins business of Chevron Phillips Chemical Company L.P. From April 2005 to May 2008, he
served as the President and Managing Director of Chevron Phillips Singapore Chemicals Pte. Ltd. and Asia
Region General Manager for Chevron Phillips Chemical Company L.P. Prior to that, he held various technical
and sales management positions within that company. Mr. Buesinger holds a B.S. in Chemical Engineering from
Tulane University.

L. Benjamin Ederington (age 53). Mr. Ederington has been our Executive Vice President, Performance and
Essential Materials, General Counsel and Chief Administrative Officer since April 2023. From February 2022 to
April 2023, Mr. Ederington served as our Executive Vice President, General Counsel, Chief Administrative

Officer and Corporate Secretary; from July 2017 to February 2022; he served as our Senior Vice President,
General Counsel, Chief Administrative Officer and Corporate Secretary; from December 2015 to July 2017, he
served as our Vice President, General Counsel, Chief Administrative Officer and Corporate Secretary; and, from
October 2013 to December 2015, he served as our Vice President, General Counsel and Corporate Secretary. In
addition, Mr. Ederington has been a director of Westlake Partners’ general partner since its formation in March
2014 and its Executive Vice President, Performance and Essential Materials, General Counsel and Chief
Administrative Officer since May 2023. Mr. Ederington was Westlake Partners’ general partner’s Executive Vice
President, General Counsel, Chief Administrative Officer and Corporate Secretary from March 2022 to May
2023; Senior Vice President, General Counsel, Chief Administrative Officer and Corporate Secretary from
February 2021 to March 2022; and, its Vice President, General Counsel and Secretary from March 2014 to
February 2021. Prior to joining Westlake, he held a variety of senior legal positions at LyondellBasell Industries,
N.V. and its predecessor companies, LyondellBasell Industries AF SCA and Lyondell Chemical Company,
including most recently as Associate General Counsel, Commercial & Strategic Transactions. He began his legal
career more than 25 years ago at the law firm of Steptoe & Johnson, LLP. Mr. Ederington holds a B.A. from
Yale University and received his J.D. from Harvard University.

Thomas J, Janssens (age 58). Mr. Janssens has been our Senior Vice President, Operations—Performance

and Essential Material & Corporate Logistics since March 2022. From January 2021 to March 2022,
Mr. Janssens served as our Vice President, Olefins, Feedstocks & Energy; from December 2019 to December
2020, he was our Vice President, Olefins & Logistics; from July 2017 to November 2019, he was our Vice
President, Corporate Development, Logistics & IT; from January 2016 to June 2017, he was our Vice President,
Logistics & IT; and, from October 2015 to December 2015, he was our Vice President, Logistics & Business
Process Improvement. Prior to joining Westlake, Mr. Janssens was a consultant, from September 2002 to June
2009, and later, a Partner, from July 2009 to September 2015, with McKinsey & Company, where he advised
energy and chemicals clients on strategic, commercial, operational and business process improvement projects.
He began his career with Shell International in 1991, where he held a variety of commercial, engineering and
planning roles. Mr. Janssens holds a MSc in Chemical Engineering from Eindhoven University of Technology
and an MBA from the University of Chicago.

Johnathan S. Zoeller (age 48). Mr. Zoeller has been our Vice President and Chief Accounting Officer since

March 2020. From August 2018 to March 2020, Mr. Zoeller served as our Vice President and Corporate
Controller. In addition, Mr. Zoeller has been the Vice President and Chief Accounting Officer of Westlake
Partners’ general partner since March 2020. Mr. Zoeller joined us with over 19 years of public accounting
experience, the majority of which was spent at KPMG LLP, where he was responsible for clients in the
chemicals, oilfield services and oil/gas exploration and production industries. Mr. Zoeller held a variety of senior
accounting positions at KPMG, including most recently as Partner, Audit from October 2011 to August 2018. He
began his career with Arthur Andersen LLP in 1998. Mr. Zoeller holds a Bachelor of Accounting degree and a
Master of Accounting degree from the University of Mississippi. He is a Certified Public Accountant.

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities

Stockholder Matters

As of February 14, 2024, there were 30 holders of record of our common stock. Our common stock is listed

on the New York Stock Exchange under the symbol “WLK.”

Unregistered Sales of Equity Securities

We did not have any unregistered sales of equity securities during the quarter or fiscal year ended

December 31, 2023 that we have not previously reported on a Quarterly Report on Form 10-Q or a Current
Report on Form 8-K.

Issuer Purchases of Equity Securities

The following table provides information on our purchase of equity securities during the quarter ended

December 31, 2023:

Period

October 2023 . . . . . . . . . . . . . . .
November 2023 . . . . . . . . . . . . .
December 2023 . . . . . . . . . . . . .

Total . . . . . . . . . . . . . . . . . . . . . .

Total Number
of Shares
Purchased (1)

Average Price
Paid Per
Share

3,582 $
—
—

3,582 $

122.54
—
—

122.54

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)

476,162,426
476,162,426
476,162,426

— $
—
—

—

(1)

(2)

Represents 3,582 shares withheld in October 2023 in satisfaction of withholding taxes due upon the vesting
of restricted stock units granted to our employees under the 2013 Omnibus Incentive Plan.

In November 2014, our Board of Directors authorized a $250 million stock repurchase program (the “2014
Program”) with no expiration date. 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.
As of December 31, 2023, 8,722,550 shares of our common stock had been acquired at an aggregate
purchase price of approximately $574 million under the 2014 Program. Transaction fees and commissions
are not reported in the average price paid per share in the table above. 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.

Item 6. [Reserved]

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

We are a vertically integrated global manufacturer and marketer of performance and essential materials and
housing and infrastructure products. We operate in two principal operating segments, 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. We 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 2022 and continuing through the end of 2023, our European businesses have been impacted by

higher energy prices, inflation and reduced demand. Our North American businesses, where we derive a
significant portion of our revenue, have also experienced the impacts of high energy costs and interest rates and
slower demand for most of our products since the second half of 2022. However, in recent months we have
experienced lower energy costs as prices for electricity and natural gas have declined following the elevated 2022
levels and inflation appears to be easing. In the near term, we expect that the volatility in energy prices, higher
interest rates, inflation and other macroeconomic conditions will continue to impact margins and demand for
most of our products.

On February 1, 2022, we completed the acquisition of the global epoxy business of Hexion Inc. (“Westlake

Epoxy”) for total consideration of $1,207 million. The assets acquired and liabilities assumed and the results of
operations of Westlake Epoxy are included in the Performance and Essential Materials segment. During the
fourth quarter of 2023, the Westlake Epoxy business’s sales volumes and prices, specifically base epoxy resins in
Europe, continued to deteriorate. These lower sales volumes and prices have been primarily driven by record
exports at lower prices of bisphenol-A, epichlorohydrin and base epoxy resins (constituting the epoxy value
chain) out of Asia into Europe and North America during the time when demand in the European market was
contracting. In addition, Westlake Epoxy operations in Europe have experienced sustained high energy and
power costs. These factors negatively impacted Westlake Epoxy financial results during 2023. Based on these
developments, along with management’s outlook for the Westlake Epoxy business we determined, in the fourth
quarter of 2023, that the carrying amount of long-lived assets of our base epoxy resin business in the Netherlands
and all of the goodwill of the Westlake Epoxy business will not be recoverable in the foreseeable future. As a
result of this assessment, a goodwill impairment charge of $128 million and a non-cash long-lived asset
impairment charge of $347 million, related to our base epoxy resin business in the Netherlands, were recognized
in the fourth quarter of 2023.

Performance and Essential Materials

Our performance and essential materials such as ethylene, PVC, polyethylene, epoxy and caustic soda are
some of the most widely used materials in the world and are upgraded into a wide variety of higher value-added
products used in many end-markets. Westlake is the second-largest chlor-alkali producer and the second-largest
PVC producer in the world, which makes Westlake a leading global chlorovinyls producer. Our performance and
essential materials are used by customers in food and specialty packaging; industrial and consumer packaging;

medical health applications; PVC pipe applications; consumer durables; mobility and transportation; renewable
wind energy; coatings; and housing and construction products. 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
one of the leading producers of epoxy specialty resins, modifiers and curing agents in Europe, the United States
and Asia, with a global reach to our end markets. Epoxy resins are the fundamental component of many types of
materials and are often used in the automotive, construction, wind energy, aerospace and electronics industries
due to their superior adhesion, strength and durability. We are also a leading supplier of Liquid and Solid Epoxy
Resin. These base epoxies are used in a wide variety of industrial coatings applications.

Global demand for most of our products started to recover from the effects of the COVID-19 pandemic in

the second half of 2020 and remained strong through the first half of 2022. However, since the second half of
2022 and continuing through the end of 2023, we saw significant volatility in natural gas and electricity prices,
particularly in Europe, as well as in ethane and ethylene prices. We have also experienced lower prices and
reduced demand for most of our products globally. The ongoing conflict between Russia and Ukraine since
Russia’s invasion of Ukraine in 2022, conflict in the Middle East, slow economic growth in China, increase in
bisphenol-A, epichlorohydrin and base epoxy resin exports out of Asia into European and North American
markets, timing of certain new ethylene and polyethylene capacity additions in North America, Asia, and the
Middle East, volatility in natural gas and electricity prices, volatility in crude oil prices and inflationary pressures
could have a continuing negative impact on the performance of Performance and Essential Materials businesses.

We purchase significant amounts of ethane feedstock, natural gas, ethylene and salt from external suppliers
for use in production of performance and essential materials. We also purchase significant amounts of electricity
to supply the energy required in our production processes. While we have agreements providing for the supply of
ethane feedstock, natural gas, ethylene, salt and electricity, the contractual prices for these raw materials and
energy vary with market conditions and may be highly volatile. Factors that have caused volatility in our raw
material prices in the past, and which may do so in the future include:

(cid:129)

the availability of feedstock from shale gas and oil drilling;

supply and demand for crude oil and natural gas;

shortages of raw materials due to increasing demand;

ethane and liquefied natural gas exports;

capacity constraints due to higher construction costs for investments, construction delays, strike
action or involuntary shutdowns;

the general level of business and economic activity; and

the direct or indirect effect of governmental regulation.

Significant volatility in raw material costs tends to put pressure on product margins as sales price increases
could lag behind raw material cost increases. Conversely, when raw material costs decrease, customers may seek
immediate relief in the form of lower sales prices. We currently use derivative instruments to reduce price

volatility risk on feedstock commodities and lower overall costs. Normally, there is a pricing relationship
between a commodity that we process and the feedstock from which it is derived. When this pricing relationship
deviates from historical norms, we have from time to time entered into derivative instruments and physical
positions in an attempt to take advantage of this relationship.

Our historical results have been significantly affected by our plant production capacity, our efficient use of

that capacity and our ability to increase capacity. Since our inception, we have followed a disciplined growth
strategy that focuses on plant acquisitions, new plant construction and internal expansion. We evaluate each
expansion project on the basis of its ability to produce sustained returns in excess of our cost of capital and its
ability to improve efficiency or reduce operating costs. We also regularly look at acquisition opportunities that
would be consistent with, or complimentary to, our overall business strategies. Depending on the size of the
acquisition, any such acquisitions could require external financing.

As noted above in Item 1A, “Risk Factors,” 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 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 individual decisions of distributors and
dealers on the levels of inventory they carry, their views on product demand, their financial condition and the
manner in which they choose to manage inventory risk. A significant portion of our performance in this segment
is driven by the activities in the residential construction and repair and remodeling markets in North America,
which began to decline at the end of the second quarter of 2022 primarily due to the negative effect that rising
mortgage rates in the United States had on buyer sentiment. Performance of our housing and infrastructure
products businesses over time are generally reflective of the trends of building permits and housing starts in the
New Residential Construction Survey by the U.S. Census Bureau and the Repair and Remodeling Index (RRI)
provided by the National Association of Home Builders (the “NAHB”) among others. Although we ultimately
expect that the Infrastructure Investment and Jobs Act of 2021 and historically low residential housing
construction may have a favorable long-term impact on certain industries related to our Housing and
Infrastructure Products segment, the current inflationary environment impacting consumer spending and
priorities, the possibility of recession or financial market instability, rapidly rising interest rates, decade high
mortgage interest rates impacting consumer affordability, and ongoing labor and supply chain constraints are
expected to have an unfavorable impact on the demand for housing construction in the near term and, as a result,
our products produced by this segment. The lower demand for new housing construction as a result of the factors
discussed above, however, could encourage homeowners to remodel and repair existing homes, which could have
a favorable impact on our product sales

The following table presents annual historical housing starts per the U.S. Census Bureau and the 2024 and

2025 outlook per the NAHB:

Period

2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2024 Outlook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2025 Outlook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Single and Multi-
family Housing
Starts
(in thousands of
units)

1,601
1,553
1,420

1,366
1,417

% Change

16%
(3)%
(9)%

North American PVC facilities within the Performance and Essential Materials segment supply most of the

PVC required for our building products and PVC pipes and fittings plants. Our raw materials for stone, roofing
and accessories, windows, shutters and specialty tool products are externally purchased. PVC required for the
PVC compounds plants is either internally sourced from our North American and Asian facilities within the
Performance and Essential Materials segment or externally purchased based on the location of the plants. The
remaining feedstocks required, including pigments, fillers, stabilizers and other ingredients, are purchased under
short-term contracts based on prevailing market prices.

Factors that have caused volatility in our raw material prices, energy costs and production processes in the

past, and which may do so in the future, include significant fluctuation in prices of these raw materials in
response to, among other things, variable worldwide supply and demand across different industries, speculation
in commodities futures, general economic, business or environmental conditions, labor costs, competition, import
duties, tariffs, worldwide currency fluctuations, freight, inflationary pressures, regulatory costs, and product and
process evolutions that impact demand for the same materials. Increasing raw material prices directly impact our
cost of sales and our ability to maintain margins depends on implementing price increases in response to
increasing raw material costs. The market for our products may or may not accept price increases, and as such,
our future financial condition, results of operations or cash flows could be materially impacted.

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-K are
not substitutes for the GAAP measures of earnings and cash flows.

EBITDA is included in this Form 10-K 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 and satisfy capital expenditure 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-K 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 Flow.
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 and Free Cash Flow are not substitutes for the GAAP measures of net income, income from

operations and net cash provided by operating activities and are not necessarily measures of our ability to fund
our cash needs. In addition, 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. Free Cash Flow has material limitations as a
performance measure because it only considers net cash provided by operating activities, and not net income or
income from operations. For instance, it applies the entire cost of capital expenditure in the period in which the
property or equipment is acquired, rather than spreading it over several periods as is the case with net income and
income from operations.

Reconciliations of EBITDA to net income, income from operations and net cash provided by operating

activities, and Free Cash Flow to net cash provided by operating activities, are included in the “Results of
Operations” section below.

Results of Operations

Segment Data

The table below and descriptions that follow represent the consolidated results of operations of the

Company for the years ended December 31, 2023, 2022 and 2021.

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.

Year Ended December 31,

2023

2022

2021

(In millions of dollars, except per share data)

Net external sales
Performance and Essential Materials

Performance Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Essential Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total Performance and Essential Materials . . . . . . . . . .

4,656 $
3,680

8,336

6,964 $
4,044

11,008

Housing and Infrastructure Products

Housing Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Infrastructure Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total Housing and Infrastructure Products . . . . . . . . . .

3,494
718

4,212

3,864
922

4,786

5,997
2,673

8,670

2,334
774

3,108

Total net external sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

12,548 $

15,794 $

11,778

Income (loss) from operations
Performance and Essential Materials . . . . . . . . . . . . . . . . . . . . . . $
Housing and Infrastructure Products . . . . . . . . . . . . . . . . . . . . . .
Corporate and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total income from operations . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other income, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income attributable to noncontrolling interests . . . . . . .

Net income attributable to Westlake Corporation . . . . . . . . . . . . $

Diluted earnings per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

EBITDA (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

Free Cash Flow (2)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

59 $

710
(40)

729
(165)
136
178

522
43

479 $

3.70 $

1,962 $

1,302 $

2,416 $
675
(41)

3,050
(177)
73
649

2,297
50

2,247 $

17.34 $

4,179 $

2,287 $

2,549
356
(105)

2,800
(176)
53
607

2,070
55

2,015

15.58

3,693

1,736

(1)

See above for discussions on non-GAAP financial measures. See “Reconciliation of EBITDA to Net
Income, Income from Operations and Net Cash Provided by Operating Activities” below.

(2)

See above for discussions on non-GAAP financial measures. See “Reconciliation of Free Cash Flow to Net
Cash Provided by Operating Activities” below.

Product sales price and volume percentage

change from prior year

Performance and Essential Materials . . . . . . . . .
Housing and Infrastructure Products . . . . . . . . .
Company average . . . . . . . . . . . . . . . . . . . . . . . .

Year Ended December 31,

2023

2022

Average Sales
Price

Volume

Average Sales
Price

Volume

-21%
-3%
-16%

-3%
-9%
-5%

+15%
+35%
+20%

+13%
+19%
+14%

Year Ended December 31,

2023

2022

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

and feedstock

Fuel cost (Natural Gas)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Feedstock (Ethane) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

-59%
-49%

+67%
+56%

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.

Year Ended December 31,

2023

2022

2021

Net cash provided by operating activities . . . . . . . . . . . . . . . . . . $
Changes in operating assets and liabilities and other . . . . . .
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(In millions of dollars)
3,395 $
(1,119)
21

2,336 $
(1,989)
175

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

522

2,297

Less:

Other income, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for income taxes . . . . . . . . . . . . . . . . . . . . . . . . . .

Income from operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Add:

Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . .
Other income, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

136
(165)
(178)

729

1,097
136

73
(177)
(649)

3,050

1,056
73

2,394
(301)
(23)

2,070

53
(176)
(607)

2,800

840
53

EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

1,962 $

4,179 $

3,693

Reconciliation of Free Cash Flow to Net Cash Provided by Operating Activities

The following table presents the reconciliation of Free Cash Flow to net cash provided by operating

activities, the most directly comparable GAAP financial measure, for each of the periods indicated.

Net cash provided by operating activities . . . . . . . . . . . . . . . . . . $
Less:

Additions to property, plant and equipment . . . . . . . . . . . . .

Free Cash Flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

2023 Compared with 2022

Summary

Year Ended December 31,

2023

2022

2021

(In millions of dollars)
3,395 $

2,336 $

1,034

1,302 $

1,108

2,287 $

2,394

658

1,736

For the year ended December 31, 2023, net income attributable to Westlake Corporation was $479 million,

or $3.70 per diluted share, on net sales of $12,548 million. This represents a decrease in net income attributable
to Westlake Corporation of $1,768 million, or $13.64 per diluted share, compared to 2022 net income attributable
to Westlake Corporation of $2,247 million, or $17.34 per diluted share, on net sales of $15,794 million. Income
from operations was $729 million for the year ended December 31, 2023, as compared to $3,050 million for the
year ended December 31, 2022, a decrease of $2,321 million. The decrease in net income and income from
operations was primarily due to lower sales prices and volumes for most of our products across both segments as
a result of weaker global demand, a non-cash impairment charge of $475 million that comprised of Westlake
Epoxy goodwill and long-lived assets of our epoxy base resin business in the Netherlands in the fourth quarter of
2023, and a pre-tax litigation charge of approximately $150 million related to a final settlement to fully resolve
lawsuits involving certain liability claims. The decreases in net income and income from operations in 2023 were
partially offset by lower natural gas and feedstock costs and lower amortization of intangibles. Net sales
decreased by $3,246 million to $12,548 million in 2023 from $15,794 million in 2022, primarily due to lower
sales prices and volumes for most of our products across both segments.

Net Sales. Net sales decreased by $3,246 million, or 21%, to $12,548 million in 2023 from $15,794 million
in 2022, primarily due to lower sales prices and volumes for most of our products. Average sales prices for 2023
decreased by 16% as compared to 2022, due to continuing weaker demand for most of our products across both
segments. Sales volumes decreased by 5% in 2023 as compared to 2022, substantially due to weaker global
demand for many of our products across both segments.

Gross Profit. Gross profit margin percentage was 18% in 2023 as compared to 26% in 2022. The decline in

gross margin percentage for the year ended December 31, 2023 as compared to the year ended December 31,
2022 was primarily due to lower prices for most of our products and the litigation charge, as discussed above,
partially offset lower natural gas and feedstock costs.

Selling, General and Administrative Expenses. Selling, general and administrative expenses increased by

$30 million to $865 million in 2023 from $835 million in 2022. This increase was mainly due to higher
compensation and professional consulting expenses and a full year of selling, general and administrative
expenses in the current year for the epoxy business acquired in February 2022.

Amortization of Intangibles. Amortization expense decreased by $33 million to $122 million in 2023 from
$155 million in 2022, primarily due to the end of useful lives of certain intangible assets within the Housing and
Infrastructure Products segment during 2022.

Impairment of Goodwill and Long-Lived Assets. The impairment of $475 million comprised of Westlake

Epoxy goodwill impairment of $128 million and long-lived asset impairment of $347 million related to our base
epoxy resin business in the Netherlands, recognized within the Performance and Infrastructure Materials
segment.

Restructuring, Transaction and Integration-related Costs. Restructuring, transaction and integration-

related costs decreased by $5 million to $28 million in 2023 from $33 million in 2022. The costs in 2023 are
restructuring and integration costs primarily related to plant closures resulting from the Company’s
manufacturing footprint optimization efforts. The 2022 expenses primarily related to the integration-related
consulting fees and restructuring expenses related to the businesses acquired in previous years.

Interest Expense. Interest expense decreased by $12 million to $165 million in 2023 from $177 million in

2022, primarily due to the repayment of $269 million of debt during 2022.

Other Income, Net. Other income, net of $136 million in 2023 was higher than other income, net of
$73 million in 2022, substantially due to higher interest income attributable to a higher average cash and cash
equivalents balance and higher interest rates in the current period and insurance recoveries in 2023.

Income Taxes. The effective income tax rate was 25% in 2023, which was higher than the 22% effective

income tax rate in 2022. The effective income tax rate in 2023 was higher as compared to 2022, primarily
because Westlake Epoxy’s goodwill impairment was not deductible for tax purposes, and because of a valuation
allowance that was recorded against Westlake Epoxy Netherlands’ deferred tax assets including net operating
loss carryforwards, mostly generated from the impairment of long-lived assets. Such increase in the effective
income tax rate was partially offset by an increase in U.S. federal research and development credits available to
the Company and a decrease in state and foreign taxes.

Performance and Essential Materials Segment

Net Sales. Net sales for the Performance and Essential Materials segment decreased by $2,672 million, or
24%, to $8,336 million in 2023 from $11,008 million in 2022, primarily resulting from lower global demand for
most of our products across our businesses under this segment. Average sales prices for the Performance and
Essential Materials segment decreased by 21% in 2023 as compared to 2022. Lower Performance Materials sales
prices were primarily due to lower PVC resin, polyethylene and epoxy sales prices. Lower Essential Materials
sales prices were due to lower caustic soda sales prices. Sales volumes for the Performance and Essential
Materials segment decreased by 3% in 2023 as compared to 2022, primarily due to lower epoxy and caustic soda
sales volumes.

Income from Operations. Income from operations for the Performance and Essential Materials segment

decreased by $2,357 million to $59 million in 2023 from $2,416 million in 2022. This decrease in income from
operations was primarily due to lower sales prices and volumes for most of our products, a non-cash impairment
charge of $475 million related to Westlake Epoxy goodwill and long-lived assets of our epoxy base resin
business in the Netherlands, and a litigation charge of approximately $150 million related to a final settlement to
fully resolve lawsuits involving certain liability claims, both of which were recorded in the fourth quarter of
2023, and planned and unplanned outages. These decreases were partially offset by lower natural gas and
feedstock costs.

Housing and Infrastructure Products Segment

Net Sales. Net sales for the Housing and Infrastructure Products segment decreased by $574 million, or

12%, to $4,212 million in 2023 from $4,786 million in 2022. Housing Products net sales of $3,494 million
decreased by $370 million as compared to 2022 primarily due to lower demand for most of our products across
our housing businesses due to the downturn in U.S. residential construction throughout 2023, partially offset by
higher sales prices for some of our building products. Infrastructure Products net sales of $718 million decreased
by $204 million as compared to 2022, due to a continuing lower demand for our products attributable to
customers destocking from elevated inventory levels in the prior year. Average sales prices for the Housing and
Infrastructure Products segment decreased slightly by 3% in 2023 as compared to 2022. Sales volumes for the
Housing and Infrastructure Products segment decreased by 9% in 2023, as compared to 2022.

Income from Operations. Income from operations for the Housing and Infrastructure Products segment

increased by $35 million to $710 million in 2023 from $675 million in 2022. The increase in income from
operations was primarily due to lower raw material costs and higher sales prices for some of our building
products, partially offset by lower sales prices for PVC compounds and pipe and fittings and volumes across
most of our housing and infrastructure businesses.

2022 Compared with 2021

Summary

For the year ended December 31, 2022, net income attributable to Westlake Corporation was

$2,247 million, or $17.34 per diluted share, on net sales of $15,794 million. This represents an increase in net
income attributable to Westlake Corporation of $232 million, or $1.76 per diluted share, compared to 2021 net
income attributable to Westlake Corporation of $2,015 million, or $15.58 per diluted share, on net sales of
$11,778 million. Income from operations was $3,050 million for the year ended December 31, 2022, as
compared to $2,800 million for the year ended December 31, 2021, an increase of $250 million. The increase in
net income and income from operations was primarily due to significantly higher global sales prices for caustic
soda and chlorine caused by higher demand through the year, and higher prices and margins on many of our
products in the Housing and Infrastructure Products segment, due to strong demand for our products primarily
during the first half of 2022. In addition, net income and income from operations included the contributions from
the businesses acquired in the second half of 2021 and in the first quarter of 2022. Net income and income from
operations for the year ended December 31, 2022 was negatively impacted by softening demand for PVC resin
during the second half of 2022 due to slowing global economic conditions. In addition, higher natural gas, power
and feedstock costs and a $70 million pre-tax litigation charge negatively impacted net income and income from
operations during the year ended December 31, 2022. Selling, general and administrative expenses were also
higher for the year ended December 31, 2022 primarily due to the businesses acquired in the second half of 2021
and in the first quarter of 2022. Net sales increased by $4,016 million to $15,794 million in 2022 from
$11,778 million in 2021, due to higher sales prices for caustic soda and chlorine and for many of our products in
the Housing and Infrastructure Products segment, partially offset by lower polyethylene sales prices. Sales
volumes in the year ended December 31, 2022 were also higher in both segments as compared to the year ended
December 31, 2021, primarily due to the contributions from the acquired businesses 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
volumes.

Net Sales. Net sales increased by $4,016 million, or 34%, to $15,794 million in 2022 from $11,778 million

in 2021, primarily due to higher sales prices for caustic soda and chlorine and for many of our products in the

Housing and Infrastructure Products segment as well as higher sales volumes due to the businesses acquired in
the second half of 2021 and in the first quarter of 2022, partially offset by lower polyethylene sales prices.
Average sales prices for 2022 increased by 20% as compared to 2021 due to strong demand for caustic soda and
strong residential construction, repair and remodeling markets in North America during the first half of 2022.
Sales volumes increased by 14% in 2022 as compared to 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 volumes.

Gross Profit. Gross profit margin percentage was 26% in 2022 as compared to 30% in 2021. The decline in

gross margin percentage for the year ended December 31, 2022 as compared to the year ended December 31,
2021 was primarily due to higher natural gas, power, feedstock and raw material costs and lower polyethylene
sales prices. These decreases versus the prior year were partially offset by higher sales prices for caustic soda,
chlorine, derivative products, pipes and fittings and PVC compounds.

Selling, General and Administrative Expenses. Selling, general and administrative expenses increased by
$284 million to $835 million in 2022 from $551 million in 2021. This increase was mainly due to the inclusion
of expenses related to the businesses acquired in the second half of 2021 and in the first quarter of 2022 as well
as higher employee-related costs.

Amortization of Intangibles. Amortization expense increased by $32 million to $155 million in 2022 from
$123 million in 2021, primarily due to the 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 $33 million and $21 million for the years ended December 31, 2022 and
December 31, 2021, respectively, primarily consisted of restructuring, transaction and integration-related costs
associated with the businesses acquired in the second half of 2021 and in the first quarter of 2022.

Interest Expense. Interest expense of $177 million in 2022 was comparable to $176 million in 2021. The
full year interest expense in 2022 associated with the issuance of $1,700 million aggregate principal amount of
senior notes in August 2021 was substantially offset by the realization of losses in 2021 on the settlement of
interest rate lock arrangements associated with the senior notes issued in August 2021.

Other Income, Net. Other income, net of $73 million in 2022 was higher than other income, net of

$53 million in 2021, primarily due to higher interest income.

Income Taxes. The effective income tax rate was 22% in 2022, which was slightly lower than the 23%
effective tax rate in 2021. The effective tax rate in 2022 was lower as compared to 2021, primarily due to an
increase in U.S. federal research and development credits available to the Company in 2022.

Performance and Essential Materials Segment

Net Sales. Net sales for the Performance and Essential Materials segment increased by $2,338 million, or

27%, to $11,008 million in 2022 from $8,670 million in 2021. Average sales prices for the Performance and
Essential Materials segment increased by 15% in 2022 as compared to 2021. The increase in average sales prices
were primarily driven by higher prices for caustic soda, chlorine and derivative products, partially offset by lower
polyethylene sales prices. Sales volumes for the Performance and Essential Materials segment increased by 13%
in 2022 as compared to 2021, primarily due to contributions from the recently acquired Westlake Epoxy
business, which were partially offset by lower PVC resin, caustic soda and styrene sales volumes.

Income from Operations. Income from operations for the Performance and Essential Materials segment

decreased by $133 million to $2,416 million in 2022 from $2,549 million in 2021. This decrease in income from
operations was primarily due to lower polyethylene sales prices and integrated margins and lower sales volumes
for PVC resin and caustic soda, higher natural gas, power and feedstock costs and a $70 million pre-tax litigation
charge in the third quarter of 2022. The decrease in income from operations versus the prior-year was partially
offset by higher sales prices for caustic soda, chlorine and derivative products and income from Westlake Epoxy,
which was acquired in the first quarter of 2022. Trading activity in 2022 resulted in a loss of approximately
$28 million as compared to a gain of $12 million in 2021.

Housing and Infrastructure Products Segment

Net Sales. Net sales for the Housing and Infrastructure Products segment increased by $1,678 million, or

54%, to $4,786 million in 2022 from $3,108 million in 2021. Housing Products net sales of $3,864 million
increased by $1,530 million as compared to 2021 primarily due to higher sales prices for all products as well as a
full year of sales contribution from the businesses acquired in the second half of 2021. Infrastructure Products net
sales of $922 million increased by $148 million as compared to 2021 primarily due to significantly higher sales
prices. Average sales prices for the Housing and Infrastructure Products segment increased by 35% in 2022 as
compared to 2021, primarily due to strong residential construction and repair and remodeling activity during the
first half of 2022. Sales volumes for the Housing and Infrastructure Products segment increased by 19% in 2022,
as compared to 2021, primarily due to contributions from the businesses acquired in the second half of 2021,
partially offset by lower sales volumes for PVC compounds.

Income from Operations. Income from operations for the Housing and Infrastructure Products segment

increased by $319 million to $675 million in 2022 from $356 million in 2021. The 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 2022 as compared to 2021
was partially offset by higher raw material, power and production costs.

Cash Flows

Operating Activities

Operating activities provided cash of $2,336 million in 2023 as compared to cash provided by operating

activities of $3,395 million in 2022. The $1,059 million decrease in cash flow from operating activities was
mainly due to lower prices and demand for most of our products, partially offset by favorable changes in working
capital. Changes in components of working capital, which we define for purposes of this cash flow discussion as
accounts receivable, inventories, prepaid expenses and other current assets, less accounts payable and accrued
and other liabilities, provided cash of $600 million in 2023, as compared to $174 million of cash provided in
2022, a favorable change of $426 million. The favorable changes in 2023 were substantially due to lower
inventory costs driven by lower feedstock and fuel costs, as compared to 2022.

Operating activities provided cash of $3,395 million in 2022 as compared to cash provided by operating

activities of $2,394 million in 2021. The $1,001 million increase in cash flows from operating activities was
mainly due to the increase in income from operations, which was partially offset by working capital changes and
an unfavorable change related to the turnaround at OpCo’s Petro 2 facility and other turnaround activities.
Changes in components of working capital, which we define for purposes of this cash flow discussion as
accounts receivable, inventories, prepaid expenses and other current assets, less accounts payable and accrued

and other liabilities, provided cash of $174 million in 2022, as compared to $383 million of cash used in 2021, a
favorable change of $557 million. The majority of the unfavorable changes in 2021 were driven by higher
accounts receivable and higher inventories, partially offset by higher accounts payable and accrued and other
liabilities. The unfavorable change in accounts receivable was primarily driven by higher sales prices resulting in
higher trade customer balances. The higher inventories, accounts payable and accrued and other liabilities in
2022 were primarily driven by higher inventory cost and an increase in operating activities, as compared to 2021.

Investing Activities

Net cash used for investing activities during 2023 was $1,037 million as compared to net cash used of
$2,479 million in 2022. The decrease in investing activities during 2023 was primarily because of the epoxy
acquisition in February 2022 for $1,163 million. Capital expenditures were $1,034 million during 2023 as
compared to $1,108 million during 2022. Capital expenditures in 2023 and 2022 were primarily related to
projects to increase production capacity or reduce costs, maintenance and safety projects and environmental
projects at our various facilities. The investing activities during 2022 were comprised primarily of the acquisition
of Westlake Epoxy in February 2022 for $1,163 million, the purchase of an additional 3.2% interest in LACC for
$89 million, aggregate contributions of $87 million to LACC, capital expenditures, and other asset acquisitions.

Net cash used for investing activities during 2022 was $2,479 million as compared to net cash used of
$3,213 million in 2021. Investing activities during 2022 were comprised primarily of the acquisition of Westlake
Epoxy in February 2022 for $1,163 million, the purchase of an additional 3.2% interest in LACC for $89 million,
aggregate contributions of $87 million to LACC, capital expenditures, and other asset acquisitions. Our 2021
acquisition related activities were higher, as compared to 2022, due to the acquisitions of the Boral Target
Companies, LASCO and Dimex for $2,554 million in the aggregate. Capital expenditures were $1,108 million in
2022 compared to $658 million in 2021. Capital expenditures in 2022 and 2021 were primarily related to
expansion projects at various chlor-alkali plants as well as projects to improve production capacity or reduce
costs, maintenance and safety projects and environmental projects at our various facilities.

Financing Activities

Net cash used by financing activities during 2023 was $245 million as compared to net cash used by

financing activities of $587 million in 2022. The decrease in cash used for financing activities during 2023 as
compared to 2022 was primarily due to the redemption of $250 million aggregate principal amount of the 3.60%
Senior Notes due 2022 and higher repurchases of our common stock in 2022 as compared to 2023. The financing
activities during 2023 were primarily related to the $221 million payment of cash dividends, the $54 million
payment of cash distributions to noncontrolling interests, repurchases of shares of our common stock for an
aggregate purchase price of $23 million and inflows of $44 million from the exercise of stock options. The
financing activities during 2022 were primarily related to the redemption of $250 million aggregate principal
amount of the 3.60% 2022 Senior Notes, $169 million payment of cash dividends, the $60 million payment of
cash distributions to noncontrolling interests and repurchases of shares of our common stock for an aggregate
purchase price of $101 million.

Net cash used by financing activities during 2022 was $587 million as compared to net cash provided of

$1,437 million in 2021. Financing activities during 2022 were primarily related to the redemption of
$250 million aggregate principal amount of the 3.60% 2022 Senior Notes, the $169 million payment of cash
dividends, the $60 million payment of cash distributions to noncontrolling interests and repurchases of our
common stock for an aggregate purchase price of $101 million. The activities during 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. The remaining
activities in 2021 were primarily related to the $145 million payment of cash dividends, the $48 million payment
of cash distributions to noncontrolling interests and repurchases of our common stock for an aggregate purchase
price of $30 million.

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 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. As of December 31, 2023, we had
repurchased 8,722,550 shares of our common stock for an aggregate purchase price of approximately
$574 million under the 2014 Program. During the year ended December 31, 2023, 211,294 shares of our common
stock were repurchased for an aggregate purchase price of $23 million under the 2014 Program. Purchases under
the 2014 Program may be made either through the open market or in privately negotiated transactions. 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.

On October 4, 2018, Westlake Chemical Partners LP (“Westlake Partners”) and Westlake Chemical
Partners GP LLC, the general partner of Westlake Partners, entered into an Equity Distribution Agreement with
UBS Securities LLC, Barclays Capital Inc., Citigroup Global Markets Inc., Deutsche Bank Securities Inc., RBC
Capital Markets, LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Wells Fargo Securities, LLC to
offer and sell Westlake Partners common units, from time to time, up to an aggregate offering amount of
$50 million. This Equity Distribution Agreement was amended on February 28, 2020 to reference a new shelf
registration and subsequent renewals thereof for utilization under this agreement. No common units were issued
under this program in 2023, 2022 or 2021.

We believe that our sources of liquidity as described above are adequate to fund our normal operations and

ongoing capital expenditures and turnaround activities. Funding of any potential large expansions such as our
recent acquisitions or potential future acquisitions 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 favorable interest rates due to volatility of the commercial credit markets.

Cash and Cash Equivalents

As of December 31, 2023, our cash and cash equivalents totaled $3,304 million.

In addition to our cash and cash equivalents, our credit agreement is available to provide liquidity as

needed, as described under “Debt” below.

Debt

As of December 31, 2023, the carrying value of our indebtedness totaled $4,906 million. See Note 11 to the

consolidated financial statements appearing elsewhere in this Form 10-K for a discussion of our long-term
indebtedness. Defined terms used in this section have the definitions assigned to such terms in Note 11 to the
consolidated financial statements included in Item 8 of this Form 10-K.

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 our credit agreement will be adequate to meet our normal operating needs
for the foreseeable future.

Our long-term debt consisted of the following as of December 31, 2023:

Principal
Amount
(in millions)

Debt Issuance
Date

Maturity Date

Par Call Date

Optional
Redemption
Terms and Other
Matters

0.875% senior notes due 2024
(the “0.875% 2024 Senior
Notes”)

. . . . . . . . . . . . . . . . . $

3.60% senior notes due 2026
(the “3.60% 2026 Senior
Notes”)

. . . . . . . . . . . . . . . . .

Loan related to tax-exempt

waste disposal revenue bonds
due 2027 . . . . . . . . . . . . . . . .

1.625% €700 million senior

notes due 2029 (the “1.625%
2029 Senior Notes”) . . . . . . .

3.375% senior notes due 2030
(the “3.375% 2030 Senior
Notes”)

. . . . . . . . . . . . . . . . .

3.50% senior notes due 2032

(the “3.50% 2032 tax-exempt
GO Zone Refunding Senior
Notes”)

. . . . . . . . . . . . . . . . .

2.875% senior notes due 2041
(the “2.875% 2041 Senior
Notes”)

. . . . . . . . . . . . . . . . .

5.00% senior notes due 2046
(the “5.00% 2046 Senior
Notes”)

. . . . . . . . . . . . . . . . .

4.375% senior notes due 2047
(the “4.375% 2047 Senior
Notes”)

. . . . . . . . . . . . . . . . .

3.125% senior notes due 2051
(the “3.125% 2051 Senior
Notes”)

. . . . . . . . . . . . . . . . .

3.375% senior notes due 2061
(the “3.375% 2061 Senior
Notes”)

. . . . . . . . . . . . . . . . .

Term loan 2026 (the “2026

300 August 2021

August 2024

August 15, 2022

(1)

750 August 2016

August 2026

May 15, 2026

(1) (4)

11 December 1997 December 2027

(6)

773

July 2019

July 2029

April 17, 2029

(1) (2)

300

June 2020

June 2030

March 15, 2030

(1) (3)

250 November 2017 November 2032 November 1, 2027

(5)

350 August 2021

August 2041

February 15, 2041

(1) (3)

700 August 2016

August 2046

February 15, 2046

(1) (4)

500 November 2017 November 2047 May 15, 2047

(1) (3)

600 August 2021

August 2051

February 15, 2051

(1) (3)

450 August 2021

August 2061

February 15, 2061

(1) (3)

Term Loan”) . . . . . . . . . . . . .

13 March 2021

March 2026

(7)

Total long-term debt . . . . . . . . . $

4,997

(1) At our option, we may redeem the notes at any time on or after the specified par call date at a redemption
price equal to 100% of the principal amount of the notes being redeemed plus accrued and unpaid interest.

(2) At our option, we may redeem the notes at any time prior to the specified par call date at a redemption

price equal to the greater of (i) 100% of the principal amount of the notes being redeemed plus accrued and
unpaid interest and (ii) the sum of the present values of the remaining scheduled payments on the notes
being redeemed that would be due if the notes matured on the specified par call date (not including any
portion of such payments of interest accrued as of the redemption date), discounted to the redemption date
on an annual basis at the applicable comparable government bond rate plus 30 basis points plus accrued
and unpaid interest.

(3) At our option, we may redeem the notes at any time prior to the specified par call date at a redemption

price equal to the greater of (i) 100% of the principal amount of the notes being redeemed plus accrued and
unpaid interest and (ii) the sum of the present values of the remaining scheduled payments on the notes
being redeemed that would be due if the notes matured on the specified par call date (excluding accrued
and unpaid interest to the redemption date), discounted to the redemption date on a semi-annual basis at the
treasury rate plus 20 to 40 basis points plus accrued and unpaid interest.

(4) At our option, we may redeem the notes at any time prior to the specified par call date at a redemption

price equal to the greater of (i) 100% of the principal amount of the notes being redeemed plus accrued and
unpaid interest and (ii) the sum of the present values of the remaining scheduled payments on the notes
being redeemed (excluding accrued and unpaid interest to the redemption date), discounted to the
redemption date on a semi-annual basis at the treasury rate plus 35 to 45 basis points, plus accrued and
unpaid interest.

(5)

(6)

In the event of a redemption of certain bonds (the “GO Zone Bonds”) issued by the Louisiana Local
Government Environmental Facility and Development Authority (the “Authority”) in 2017, we will
redeem notes equal in principal amount to the GO Zone Bonds to be redeemed at a redemption price equal
to the redemption price of the GO Zone Bonds to be redeemed, plus accrued interest to the redemption
date. The GO Zone 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 amount plus accrued
interest to the redemption date.

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 December 31, 2023 was 4.30%.

(7)

The 2026 Term Loan has a 5-year maturity and includes a government rate subsidy. The interest rate on the
2026 Term Loan as of December 31, 2023 was 0.95%.

The holders of the 0.875% 2024 Senior Notes, the 3.60% 2026 Senior Notes, the 1.625% 2029 Senior

Notes, the 3.375% 2030 Senior Notes, the 3.50% 2032 tax-exempt GO Zone Refunding Senior Notes, the
2.875% 2041 Senior Notes, the 5.00% 2046 Senior Notes, the 4.375% 2047 Senior Notes, the 3.125% 2051
Senior Notes and the 3.375% 2061 Senior Notes may require us to repurchase the notes at a price equal to 101%
of their principal amount, plus accrued and unpaid interest to, but not including, the date of repurchase, upon the
occurrence of both a “change of control” and, within 60 days of such change of control, a “below investment
grade rating event” (as such terms are defined in the respective indentures governing these notes).

The indenture governing the 0.875% 2024 Senior Notes, the 3.60% 2026 Senior Notes, the 1.625% 2029

Senior Notes, the 3.375% 2030 Senior Notes, the 3.50% 2032 tax-exempt GO Zone Refunding Senior Notes, the
2.875% 2041 Senior Notes, the 5.00% 2046 Senior Notes, the 4.375% 2047 Senior Notes, the 3.125% 2051
Senior Notes, and the 3.375% 2061 Senior Notes contains customary events of default and covenants that, among

other things and subject to certain exceptions, restrict us and certain of our subsidiaries’ ability to (1) incur
certain secured indebtedness, (2) engage in certain sale and leaseback transactions and (3) consolidate, merge or
transfer all or substantially all of our assets.

As of December 31, 2023, we were in compliance with all of our long-term debt covenants.

Credit Agreement

On June 9, 2022, we entered into a new $1.5 billion revolving credit facility that is scheduled to mature on

June 9, 2027 (the “Credit Agreement”) and, in connection therewith, terminated our then existing revolving
credit agreement. The Credit Agreement bears interest at either (a) Adjusted Term SOFR (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 leverage ratio financial maintenance covenant. As of December 31, 2023,
we were in compliance with the total leverage ratio financial maintenance covenant.

The Credit Agreement 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 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 subsidiaries are required
to guarantee our obligations under the Credit Agreement.

The 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 Credit Agreement also provides for a
discretionary $50 million commitment for swingline loans to be provided on a same-day basis. We may also
increase the size of the facility, in increments of at least $25 million, up to a maximum of $500 million, subject to
certain conditions and if certain lenders agree to commit to such an increase.

Westlake Chemical Partners LP Credit Arrangements

Our subsidiary, Westlake Chemical Finance Corporation, is the lender party to a $600 million revolving

credit facility with Westlake Chemical Partners LP (“Westlake Partners”) (the “MLP Revolver”) that is
scheduled to mature on July 12, 2027. As of December 31, 2023, outstanding borrowings under the credit facility
totaled $377 million and bore interest at Secured Overnight Financing Rate, as administered by the Federal
Reserve Bank of New York (“SOFR”) plus the Applicable Margin plus a 0.10% credit spread adjustment. 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 SOFR. Borrowings under the MLP Revolver now bear interest
at a variable rate of either (a) SOFR plus the Applicable Margin plus a 0.10% credit spread adjustment or, if
SOFR is no longer available, (b) the Alternate Base Rate plus the Applicable Margin minus 1.0%. The
Applicable Margin under the 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 “OpCo Revolver”) that is scheduled to mature on
July 12, 2027. As of December 31, 2023, outstanding borrowings under the credit facility totaled $23 million and
bore interest at SOFR plus the Applicable Margin of 1.75% plus a 0.10% credit spread adjustment. On July 12,

2022, OpCo entered into the Second Amendment (the “OpCo Revolver Amendment”) to the OpCo Revolver.
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 the Applicable Margin plus a 0.10% credit spread adjustment or, if SOFR is no
longer available, (b) the Alternate Base Rate plus the Applicable Margin minus 1.0%. The Applicable Margin
under the OpCo Revolver is 1.75%

We consolidate Westlake Partners and OpCo for financial reporting purposes as we have a controlling
financial interest. As such, the revolving credit facilities described above between our subsidiaries and Westlake
Partners and OpCo are eliminated from the financial statements upon consolidation.

Contractual and Other Obligations

The Company’s material cash requirements for contractual and other obligations in the near term (next

12 months) and the long term period (2024 and thereafter) include long-term debt, interest payments, operating
leases, pension benefits funding, post-retirement healthcare benefits, purchase obligations, asset retirement
obligations and letters of credit.

Debt Obligations and Interest Payments. As of December 31, 2023, we had $300 million debt obligations
due within the near term, and debt obligations of $4,697 million due over the long-term period. At December 31,
2023, long-term debt related interest expense of $158 million was due within the near term, and related interest
expense of $2,692 million was due over the long-term period. Maturities of our debt consist of $300 million in
2024, $763 million in 2026 and $11 million in 2027. There are no other scheduled maturities of debt in 2024
through 2028. See Note 11, “Long-Term Debt,” in the Notes to Consolidated Financial Statements in Item 8 of
this Form 10-K for further information on our debt obligations and the expected timing of future principal and
interest payments.

Operating leases. As of December 31, 2023, there was $142 million in operating lease obligations due
within the near term, and $768 million due over the long-term period. See Note 7, “Leases,” in the Notes to
Consolidated Financial Statements in Item 8 of this Form 10-K for further detail of our obligations and the timing
of expected future payments.

Pension Benefits Funding and Post-retirement Healthcare Benefits. Pension benefits funding obligations

due within the near term were $8 million while post-retirement healthcare benefit payment obligations due within
the near term were $8 million as of December 31, 2023. As of December 31, 2023, we had $135 million and
$64 million of pension benefit funding and post-retirement healthcare benefit obligations due over the long-term
period, respectively. The estimate of the timing of future payments under our defined benefit pension plans
which cover certain eligible employees in the United States and non-U.S. countries and our post-retirement
healthcare benefits to the employees of certain subsidiaries who meet certain minimum age and service
requirements involves the use of certain assumptions, including retirement ages and payout periods. See Note 14,
“Employee Benefits,” in the Notes to Consolidated Financial Statements in Item 8 of this Form 10-K for further
information on our obligations and the timing of expected future payments.

Purchase Obligations. Purchase obligations include agreements to purchase goods and services that are
enforceable and legally binding and that specify all significant terms, including a minimum quantity and price.
We are party to various obligations to purchase goods and services, including commitments to purchase various
feedstock, utilities, nitrogen, oxygen, product storage, pipeline usage and logistic support, in each case in the
ordinary course of our business, as well as various purchase commitments for our capital projects. As of

December 31, 2023, we had $2,152 million of enforceable and legally binding purchase commitments due within
the near term, and $5,976 million due over the long-term period.

Asset Retirement Obligations. As of December 31, 2023, we had $3 million asset retirement obligations
due within the near term, and $55 million due over the long-term period. Asset retirement obligations includes
the estimated costs and timing of payments to satisfy our recognized asset retirement obligations. We recognize
asset retirement obligations in the period in which the liability becomes probable and reasonably estimable.
Initially, the asset retirement obligation is recorded at fair value and capitalized as a component of the carrying
value of the long-lived asset to which the obligation relates. See Note 1, “Description of Business and Significant
Accounting Policies,” in the Notes to Consolidated Financial Statements in Item 8 of this Form 10-K for further
detail of our asset retirement obligations.

Letters of Credit. As of December 31, 2023, we had $39 million standby letters of credit, made in the

ordinary course of business, maturing within the near term, and no standby letters of credit maturing over the
long-term period. We had no letters of credit outstanding under our Credit Agreement.

Critical Accounting Policies and Estimates

Critical accounting policies are those that are important to our financial condition and require
management’s most difficult, subjective or complex judgments. Different amounts would be reported under
different operating conditions or under alternative assumptions. We have evaluated the accounting policies used
in the preparation of the accompanying consolidated financial statements and related notes and believe those
policies are reasonable and appropriate. Our significant accounting policies are summarized in Note 1 to the
consolidated financial statements appearing elsewhere in this Form 10-K.

Critical accounting estimates are those estimates made in accordance with the accounting principles
generally accepted in the United States (“GAAP”) that involve a significant level of estimation uncertainty and
have had or are reasonably likely to have a material impact on our financial condition or results of operation. Our
more critical accounting estimates include those related to business combinations, fair values, long-lived assets,
goodwill, accruals for long-term employee benefits, accounts receivable, income taxes and environmental and
legal obligations. Inherent in such estimates are certain key assumptions. We periodically update the estimates
used in the preparation of the financial statements based on our latest assessment of the current and projected
business and general economic environment. We believe the following to be our most critical accounting
estimates required for the preparation of our financial statements.

Business Combinations and Intangible Assets Including Goodwill. We account for business combinations

using the acquisition method of accounting, and accordingly, the assets and liabilities of the acquired business are
recorded at their fair values at the date of acquisition. The excess of the purchase price over the estimated fair
value is recorded as goodwill. Any changes in the estimated fair values of the net assets recorded for acquisitions
prior to the finalization of more detailed analysis, but not to exceed one year from the date of acquisition, will
change the amount of the purchase price allocable to goodwill. Any subsequent changes to any purchase price
allocations that are material to our consolidated financial results will be adjusted in the same period’s financial
statements, including the effect on earnings of changes in depreciation, amortization or other income effects, if
any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at
the acquisition date. All acquisition costs are expensed as incurred and in-process research and development
costs are recorded at fair value as an indefinite-lived intangible asset and assessed for impairment thereafter until
completion, at which point the asset is amortized over its expected useful life. Separately recognized transactions

associated with business combinations are generally expensed subsequent to the acquisition date. The application
of business combination accounting requires the use of significant estimates and assumptions. Our estimates of
fair value are based upon assumptions we believe to be reasonable, but which are inherently uncertain and
unpredictable. The fair value of the customer relationships acquired are estimated by management through a
discounted cash flow model using the multi-period excess earnings methodology, which involves the use of
significant estimates and assumptions related to revenue growth rates, operating margins, discount rates, and
customer attrition rates, among other items. The fair value of the technology and trade names acquired is
estimated by management through a discounted cash flow model using the relief from royalty methodology,
which involves the use of significant estimates and assumptions related to revenue growth rates, and discount
rates. The results of operations of acquired businesses are included in our consolidated financial statements from
the acquisition date.

Fair Value Estimates. We develop estimates of fair value to allocate the purchase price paid to acquire a

business to the assets acquired and liabilities assumed in an acquisition, to assess impairment of long-lived assets
and goodwill and to record marketable securities and pension plan assets. We use all available information to
make these fair value determinations, including the engagement of third-party consultants. In addition, we record
all pension plan assets and certain marketable securities at fair value. The fair value of these items is determined
by quoted market prices or from observable market-based inputs. See Note 16 to the consolidated financial
statements appearing elsewhere in this Form 10-K for more information.

Long-Lived Assets. Key estimates related to long-lived assets include useful lives, recoverability of
carrying values and existence of any retirement obligations. Such estimates could be significantly modified. The
carrying values of long-lived assets could be impaired by significant changes or projected changes in supply and
demand fundamentals (which could have a negative impact on operating rates or margins), new technological
developments, new competitors with significant raw material or other cost advantages, adverse changes
associated with the United States and global economies, the cyclical nature of the chemical and refining
industries and uncertainties associated with governmental actions.

We evaluate long-lived assets for potential impairment indicators whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be recoverable, including when negative
conditions such as significant current or projected operating losses exist. Our judgments regarding the existence
of impairment indicators are based on legal factors, market conditions and the operational performance of our
businesses. Actual impairment losses incurred could vary significantly from amounts estimated. Long-lived
assets are assessed for impairment by asset group, the lowest level for which identifiable cash flows are largely
independent of the cash flows of other groups of assets and liabilities. Additionally, future events could cause us
to conclude that impairment indicators exist and that associated long-lived assets of our businesses are impaired.
Any resulting impairment loss could have a material adverse impact on our financial condition and results of
operations.

During the fourth quarter of 2023, the Westlake Epoxy business’s sales volumes and prices, specifically

base epoxy resins in Europe, continued to deteriorate. These lower sales volumes and prices were primarily
driven by record exports out of Asia into Europe and North America. In addition, Westlake Epoxy operations in
Europe have experienced sustained high energy and power costs. These factors negatively impacted Westlake
Epoxy financial results during 2023. The Company identified these developments, along with management’s
outlook for the Westlake Epoxy business over the foreseeable future, as impairment indicators during the fourth
quarter of 2023. Recoverability tests were performed for each of Westlake Epoxy’s asset groups to compare the
carrying amounts of assets to the net undiscounted cash flow projections of the asset group generated from its use

and eventual disposition. The undiscounted cash flow projections were based on historical results, estimates
made by management of future market conditions, current and future strategic and operational plans and future
financial performance projected through the remaining useful life of the primary asset in the asset group. Based
on the recoverability tests, we determined that the carrying amount of the primary assets of Westlake Epoxy’s
Netherlands asset group is not recoverable, and as such, an impairment loss was recorded to reduce the carrying
amount of the asset group to its fair value. See Note 6 in the notes to the consolidated financial statements for
further details.

The estimated useful lives of long-lived assets range from one to 40 years. Depreciation and amortization

of these assets, including amortization of deferred turnaround costs, under the straight-line method over their
estimated useful lives totaled $1,097 million, $1,056 million and $840 million in 2023, 2022 and 2021,
respectively. If the useful lives of the assets were found to be shorter than originally estimated, depreciation or
amortization charges would be accelerated.

We defer the costs of planned major maintenance activities, or turnarounds, and amortize the costs over the

period until the next planned turnaround of the affected unit. Total costs deferred on turnarounds were
$179 million, $178 million and $215 million in 2023, 2022 and 2021, respectively. As of December 31, 2023,
deferred turnaround costs, net of accumulated amortization, totaled $391 million. Amortization in 2023, 2022
and 2021 of deferred turnaround costs was $137 million, $80 million and $56 million, respectively. Expensing
turnaround costs as incurred would likely result in greater variability of our quarterly operating results and would
adversely affect our financial position and results of operations.

Additional information concerning long-lived assets and related depreciation and amortization appears in

Notes 6 and 8 to the consolidated financial statements appearing elsewhere in this Form 10-K.

Goodwill. At December 31, 2023, our recorded goodwill was $2,041 million. Goodwill is evaluated for
impairment when events or changes in circumstances indicate the fair value of a reporting unit with goodwill has
been reduced below its carrying value, and otherwise at least annually. We perform our annual impairment
assessment for both the Performance and Essential Materials and Housing and Infrastructure Products reporting
units in October each year. We may elect to perform an optional qualitative assessment to determine whether a
quantitative impairment analysis is required. The qualitative assessment considers factors such as
macroeconomic conditions, industry and market considerations, cost factors related to raw materials and labor,
current and projected financial performance, changes in management or strategy, and market capitalization.
Alternatively, we may unconditionally elect to bypass the qualitative assessment and perform a quantitative
goodwill impairment assessment in any period.

We evaluated the Westlake Epoxy reporting unit’s goodwill for impairment during the fourth quarter of

2023 in line with the timing of our annual goodwill impairment assessment for all reporting units. We performed
the quantitative assessment for each of our reporting units within both of our segments during the fourth quarter
of 2023. The quantitative analysis compares a reporting unit’s fair value to its carrying amount to determine
whether goodwill is impaired. The fair values of the reporting units are calculated using both a discounted cash
flow methodology and a market value methodology. The discounted cash flow projections are based on a forecast
to reflect the cyclicality of the business. The forecast is based on historical results, estimates by management of
future market conditions, current and future strategic and operational plans and future financial performance.
Significant assumptions used in the discounted cash flow projection included projected sales volumes based on
production capacities, future sales prices, feedstock, energy and power costs and capital expenditures to maintain
safe and reliable plant operations. The future cash flows are discounted to present value using an applicable

discount rate. The significant assumptions used in determining the fair value of the reporting unit using the
market value methodology include the determination of appropriate market comparables and the estimated
multiples of EBITDA a willing buyer is likely to pay. Based on the quantitative tests performed during the fourth
quarter of 2023, an impairment of the Westlake Epoxy reporting unit was identified as the carrying amount of the
reporting unit exceeded its fair value. See Note 8 in the notes to the consolidated financial statements for further
details. For all reporting units other than Westlake Epoxy, even if the fair values of the reporting units decreased
by 10% from the fair values determined for the quantitative tests, the carrying amounts of the reporting units
would not have exceeded their fair values. See Item 1A, “Risk Factors—If our goodwill or other long-lived assets
become impaired in the future, we may be required to record non-cash charges to earnings, which could be
significant.”

Long-Term Employee Benefit Costs. Our costs for long-term employee benefits, particularly pension and
postretirement medical and life benefits, are incurred over long periods of time and involve many uncertainties
over those periods. The net periodic benefit cost attributable to current periods is based on several assumptions
about such future uncertainties and is sensitive to changes in those assumptions. It is our responsibility, often
with the assistance of independent experts, to select assumptions that represent the best estimates of those
uncertainties. It is also our responsibility to review those assumptions periodically and, if necessary, adjust the
assumptions to reflect changes in economic or other factors.

Accounting for employee retirement plans involves estimating the cost of benefits that are to be provided in

the future and attempting to match, for each employee, that estimated cost to the period worked. To accomplish
this, we rely extensively on advice from actuaries, and we make assumptions about inflation, investment returns,
mortality, employee turnover and discount rates that ultimately impact amounts recorded. Changes in these
assumptions may result in different expense and liability amounts. One of the more significant assumptions
relates to the discount rate for measuring benefit obligations. At December 31, 2023, the projected pension
benefit obligations for U.S. and non-U.S. plans were calculated using assumed weighted average discount rates
of 5.0% and 3.2%, respectively. The discount rates were determined using a benchmark pension discount curve
and applying spot rates from the curve to each year of expected benefit payments to determine the appropriate
discount rate. As a result of the funding relief provided by the enactment of the Bipartisan Budget Act of 2015,
no minimum funding requirements are expected during 2024 for the U.S. pension plans. Additional information
on the 2024 funding requirements and key assumptions underlying these benefit costs appear in Note 14 to the
consolidated financial statements appearing elsewhere in this Form 10-K.

The following table reflects the sensitivity of the benefit obligation of our pension plans to changes in the

actuarial assumptions:

2023

U.S. Plans

Non-U.S. Plans

(In millions of dollars)

Projected benefit obligation, end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Discount rate increases by 100 basis points . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Discount rate decreases by 100 basis points . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

494 $
(41)
48

629
(82)
104

A one-percentage point increase or decrease in assumed healthcare trend rates would not have a significant

effect on the amounts reported for the healthcare plans.

While we believe that the amounts recorded in the consolidated financial statements appearing elsewhere in

this Form 10-K related to these retirement plans are based on the best estimates and judgments available, the
actual outcomes could differ from these estimates.

Income Taxes. We utilize the balance sheet method of accounting for deferred income taxes. Under this

method, deferred tax assets or liabilities are recorded based upon temporary differences between the tax basis of
assets and liabilities and their carrying values for financial reporting purposes. Deferred tax expense or benefit is
the result of changes in the deferred tax assets and liabilities during the period. Valuation allowances are
recorded against deferred tax assets when it is considered more likely than not that the deferred tax assets will not
be realized. Additional information on income taxes appears in Note 17 to the consolidated financial statements
appearing elsewhere in this Form 10-K.

Environmental and Legal Obligations. We consult with various professionals to assist us in making
estimates relating to environmental costs and legal proceedings. We accrue an expense when we determine that it
is probable that a liability has been incurred and the amount is reasonably estimable. While we believe that the
amounts recorded in the accompanying consolidated financial statements related to these contingencies are based
on the best estimates and judgments available, the actual outcomes could differ from our estimates. Additional
information about certain legal proceedings and environmental matters appears in Note 22 to the consolidated
financial statements appearing elsewhere in this Form 10-K.

Asset Retirement Obligations. We recognize asset retirement obligations in the period in which the liability
becomes probable and reasonably estimable. Initially, the asset retirement obligation is recorded at fair value and
capitalized as a component of the carrying value of the long-lived asset to which the obligation relates. The
liability is recorded at its future value each period, and the capitalized cost is depreciated over the estimated
useful life of the related asset. Upon settlement of the liability, a gain or loss is recorded. We have conditional
asset retirement obligations for the removal and disposal of hazardous materials from certain of our
manufacturing facilities. Additional information on asset retirement obligations appears in Note 1, under Asset
Retirement Obligations, to the consolidated financial statements appearing elsewhere in this Form 10-K.

We also have conditional asset retirement obligations that have not been recognized because the fair values

of the conditional legal obligations cannot be measured due to the indeterminate settlement date of the
obligations. Settlements of the unrecognized conditional asset retirement obligations are not expected to have a
material adverse effect on our financial condition, results of operations or cash flows in any individual reporting
period.

Recent Accounting Pronouncements

See Note 1 to the consolidated financial statements included in Item 8 of this Form 10-K for a full
description of recent accounting pronouncements, including expected date of adoption and estimated effect on
results of operations and financial condition.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

Commodity Price Risk

A substantial portion of our products and raw materials 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 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 December 31, 2023, a hypothetical $0.10 increase in the price of a gallon of ethane and a
hypothetical $0.10 increase in the price of a million British thermal units of natural gas would not have a material
impact on our income before income taxes.

Interest Rate Risk

We are exposed to interest rate risk with respect to fixed and variable rate debt. At December 31, 2023, we

had $4,973 million aggregate principal amount of fixed rate debt. We are subject to the risk of higher interest
cost if and when this debt is refinanced. If interest rates were 1.0% higher at the time of refinancing, our annual
interest expense would increase by approximately $50 million. Also, at December 31, 2023, we had $24 million
principal amount of variable rate debt outstanding, which represents the 2026 term loans due 2026 and the
tax-exempt waste disposal revenue bonds due 2027. We do not currently hedge our variable interest rate debt, but
we may do so in the future. The weighted average variable interest rate for our variable rate debt of $24 million
as of December 31, 2023 was 2.48%. A hypothetical 100 basis point increase in the average interest rate on our
variable rate debt would not result in a material change in the interest expense.

Secured Overnight Financing Rate (“SOFR”) is used as a reference rate for borrowings under our revolving

line of credit. We did not have any SOFR-based borrowings outstanding at December 31, 2023.

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 €150 million at December 31, 2023. The arrangement is scheduled to settle
in 2026.

In July 2019, we completed the registered public offering of €700 million aggregate principal amount
of the 1.625% 2029 Senior Notes. We designated this euro-denominated debt as a non-derivative net investment
hedge of a portion of our net investments in euro functional-currency denominated subsidiaries to offset foreign
currency fluctuations.

Item 8. Financial Statements and Supplementary Data

Index to Consolidated Financial Statements

Management’s Report on Internal Control over Financial Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Report of Independent Registered Public Accounting Firm (PCAOB ID 238) . . . . . . . . . . . . . . . . . . . . . .
Consolidated Financial Statements:

Consolidated Balance Sheets as of December 31, 2023 and 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Operations for the Years Ended December 31, 2023, 2022 and 2021 . . .
Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2023, 2022
and 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Consolidated Statements of Changes in Stockholders’ Equity for the Years Ended December 31,

2023, 2022 and 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Cash Flows for the Years Ended December 31,2023, 2022 and 2021 . . .
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Financial statement schedules not included in this Form 10-K have been omitted because they are not

applicable or because the required information is shown in the financial statements or notes thereto.

Page

70
71

74
75

77
78
79

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

The management of Westlake Corporation is responsible for establishing and maintaining adequate internal

control over financial reporting. Westlake’s internal control over financial reporting is a process designed to
provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted accounting principles.

Westlake management assessed the effectiveness of the Company’s internal control over financial
reporting as of December 31, 2023. In making this assessment, management used the criteria set forth by the
Committee of Sponsoring Organizations of the Treadway Commission in Internal Control—Integrated
Framework (2013). Based on its assessment, Westlake’s management has concluded that the Company’s internal
control over financial reporting was effective as of December 31, 2023 based on those criteria.

PricewaterhouseCoopers LLP, the independent registered public accounting firm that audited the financial

statements included in this Annual Report on Form 10-K, has also audited the effectiveness of internal control
over financial reporting as of December 31, 2023 as stated in their report that appears on the following page.

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of Westlake Corporation

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of Westlake Corporation and its
subsidiaries (the “Company”) as of December 31, 2023 and 2022, and the related consolidated statements of
operations, of comprehensive income, of changes in stockholders’ equity and of cash flows for each of the three
years in the period ended December 31, 2023, including the related notes (collectively referred to as the
“consolidated financial statements”). We also have audited the Company’s internal control over financial
reporting as of December 31, 2023, based on criteria established in Internal Control—Integrated Framework
(2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material
respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its
operations and its cash flows for each of the three years in the period ended December 31, 2023 in conformity
with accounting principles generally accepted in the United States of America. Also in our opinion, the Company
maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023,
based on criteria established in Internal Control—Integrated Framework (2013) issued by the COSO.

Basis for Opinions

The Company’s management is responsible for these consolidated financial statements, for maintaining

effective internal control over financial reporting, and for its assessment of the effectiveness of internal control
over financial reporting, included in Management’s Report on Internal Control over Financial Reporting
appearing under Item 8. Our responsibility is to express opinions on the Company’s consolidated financial
statements and on the Company’s internal control over financial reporting based on our audits. We are a public
accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and
are required to be independent with respect to the Company in accordance with the U.S. federal securities laws
and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we

plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements
are free of material misstatement, whether due to error or fraud, and whether effective internal control over
financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of

material misstatement of the consolidated financial statements, whether due to error or fraud, and performing
procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding
the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the
accounting principles used and significant estimates made by management, as well as evaluating the overall
presentation of the consolidated financial statements. Our audit of internal control over financial reporting
included obtaining an understanding of internal control over financial reporting, assessing the risk that a material
weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on
the assessed risk. Our audits also included performing such other procedures as we considered necessary in the
circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A company’s internal control over financial reporting
includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that receipts and expenditures of the company are being made
only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the
company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect

misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the
consolidated financial statements that was communicated or required to be communicated to the audit committee
and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and
(ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit
matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we
are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit
matter or on the accounts or disclosures to which it relates.

Goodwill Impairment Assessment—Westlake Epoxy Reporting Unit

As described in Notes 1 and 8 to the consolidated financial statements, management tests goodwill for
impairment at least annually in the fourth quarter of each year, or when events or changes in circumstances
indicate the fair value of a reporting unit with goodwill has been reduced below its carrying amount. The fair
value of the reporting unit was determined using both a discounted cash flow methodology and a market value
methodology. Significant assumptions used in the discounted cash flow projection included projected sales
volumes based on production capacities, future sales prices, feedstock, energy and power costs and capital
expenditures to maintain safe and reliable plant operations. The future cash flows were discounted to present
value using a discount rate. The significant assumptions used in determining the fair value of the reporting unit
using the market value methodology include the determination of appropriate market comparables and the
estimated multiples of net income before interest expense, income taxes, depreciation and amortization
(EBITDA) a willing buyer is likely to pay. Based on the quantitative tests performed during the fourth quarter of
2023, management determined that the fair value of the Westlake Epoxy reporting unit did not exceed its
carrying amount, and as such, a goodwill impairment charge of $128 million was recognized.

The principal considerations for our determination that performing procedures relating to the goodwill

impairment assessment of the Westlake Epoxy reporting unit is a critical audit matter are (i) the significant
judgment by management when developing the fair value estimate of the Westlake Epoxy reporting unit; (ii) a
high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s

significant assumptions related to future sales prices, feedstock cost, the discount rate, and estimated EBITDA;
and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with

forming our overall opinion on the consolidated financial statements. These procedures included testing the
effectiveness of controls relating to management’s goodwill impairment assessment, including controls over the
valuation of the Westlake Epoxy reporting unit. These procedures also included, among others (i) testing
management’s process for developing the fair value estimate of the reporting unit; (ii) evaluating the
appropriateness of the discounted cash flow and market value methodologies used by management; (iii) testing
the completeness and accuracy of underlying data used in the discounted cash flow and market value
methodologies; and (iv) evaluating the reasonableness of the significant assumptions used by management
related to future sales prices, feedstock cost, the discount rate, and estimated EBITDA. Evaluating management’s
assumptions related to future sales prices, feedstock cost, and estimated EBITDA involved evaluating whether
the assumptions used by management were reasonable considering (i) the current and past performance of the
Westlake Epoxy reporting unit; (ii) the consistency with external industry data; and (iii) whether the assumptions
were consistent with evidence obtained in other areas of the audit. Professionals with specialized skill and
knowledge were used to assist in evaluating (i) the appropriateness of the discounted cash flow and market value
methodologies and (ii) the reasonableness of the discount rate assumption.

/s/PricewaterhouseCoopers LLP

Houston, Texas
February 21, 2024

We have served as the Company’s auditor since 1986, which includes periods before the Company became

subject to SEC reporting requirements.

WESTLAKE CORPORATION

CONSOLIDATED BALANCE SHEETS

ASSETS

Current assets

Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Accounts receivable, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prepaid expenses and other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property, plant and equipment, net
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating lease right-of-use assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Customer relationships, net
Other intangible assets, net
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity method investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

Current liabilities

LIABILITIES AND EQUITY

Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Accrued and other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Current portion of long-term debt, net
Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt, net
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pension and other post-retirement benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Commitments and contingencies (Note 22)
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 December 31, 2023 and
2022, respectively . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Common stock, held in treasury, at cost; 6,439,289 and 7,278,651 shares at
December 31, 2023 and 2022, respectively . . . . . . . . . . . . . . . . . . . . . . . . .
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated other comprehensive loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total Westlake Corporation stockholders’ equity . . . . . . . . . . . . . . . . . .
Noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities and equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

December 31,

2023

2022

(in millions of dollars, except
par values and share amounts)

3,304 $
1,601
1,622
82
6,609
8,519
697
2,041
910
493
1,115
651
21,035 $

877 $

1,614
299
2,790
4,607
1,560
363
611
340
10,271

—

(435)
630
10,143
(98)
10,241
523
10,764
21,035 $

2,228
1,801
1,866
78
5,973
8,477
615
2,161
993
572
1,142
617
20,550

889
1,409
—
2,298
4,879
1,735
355
504
314
10,085

—

(467)
601
9,885
(89)
9,931
534
10,465
20,550

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

WESTLAKE CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

Year Ended December 31,

2023

2022

2021

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

Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

12,548 $
10,329

15,794 $
11,721

11,778
8,283

Gross profit
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Selling, general and administrative expenses . . . . . . . . . . . . . . .
Impairment of goodwill and long-lived assets . . . . . . . . . . . . . . .
Amortization of intangibles . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restructuring, transaction and integration-related costs . . . . . . .

Income from operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other income (expense)

Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other income, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for income taxes . . . . . . . . . . . . . . . . . . . . . . . . . .

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income attributable to noncontrolling interests . . . . . . .

2,219
865
475
122
28

729

(165)
136

700
178

522
43

4,073
835
—
155
33

3,050

(177)
73

2,946
649

2,297
50

Net income attributable to Westlake Corporation . . . . . . . . . $

479 $

2,247 $

3,495
551
—
123
21

2,800

(176)
53

2,677
607

2,070
55

2,015

Earnings per common share attributable to Westlake

Corporation:

Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

3.73 $
3.70 $

17.46 $
17.34 $

15.66
15.58

Weighted average common shares outstanding:

Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

127,806,317
128,598,441

127,970,445
128,845,562

128,002,911
128,697,982

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

WESTLAKE CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Other comprehensive income (loss), net of income taxes

Pension and other post-retirement benefits

Pension and other post-retirement benefits reserves

Year Ended December 31,

2023

2022

2021

(in millions of dollars)
2,297 $

522 $

2,070

adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(40)

Income tax benefit (provision) on pension and other

post-retirement benefits . . . . . . . . . . . . . . . . . . . . . . .

Foreign currency translation adjustments

Foreign currency translation . . . . . . . . . . . . . . . . . . . . .
Income tax benefit (provision) on foreign currency

translation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other comprehensive income (loss), net of income taxes . . . . . .

(8)

(9)

(78)

(12)

(58)

(16)

(17)

Comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

513

2,239

2,099

Comprehensive income attributable to noncontrolling

interests, net of tax of $3, $3 and $2 for 2023, 2022 and
2021, respectively . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Comprehensive income attributable to Westlake Corporation . . $

470 $

2,194 $

2,043

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

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WESTLAKE CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

Cash flows from operating activities
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Adjustments to reconcile net income to net cash provided by

operating activities

Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . .
Stock-based compensation expense . . . . . . . . . . . . . . . . . . .
Loss from disposition and write-off of property, plant and

equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment of goodwill and long-lived assets . . . . . . . . . . .
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other (gains) losses, net

Changes in operating assets and liabilities, net of effect of

business acquisitions

Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prepaid expenses and other current assets . . . . . . . . . . . . . .
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued and other liabilities . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other, net

Year Ended December 31,

2023

2022

2021

(in millions of dollars)

522 $

2,297 $

2,070

1,097
43

1,056
36

45
475
(175)
(3)

225
250
(19)
(26)
170
(268)

46
—
(21)
5

325
(140)
5
(153)
137
(198)

840
31

28
—
23
16

(528)
(309)
(27)
242
239
(231)

Net cash provided by operating activities . . . . . . . . . . .

2,336

3,395

2,394

Cash flows from investing activities
Acquisition of businesses, net of cash acquired . . . . . . . . . . . . . .
Additions to investments in unconsolidated subsidiaries . . . . . .
Additions to property, plant and equipment
. . . . . . . . . . . . . . . .
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net cash used for investing activities . . . . . . . . . . . . . .

Cash flows from financing activities
Debt issuance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Distributions to noncontrolling interests . . . . . . . . . . . . . . . . . . .
Dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from debt issuance and drawdown of revolver, net . . .
Proceeds from exercise of stock options . . . . . . . . . . . . . . . . . . .
Repayment of revolver and senior notes . . . . . . . . . . . . . . . . . . .
Repurchase of common stock for treasury . . . . . . . . . . . . . . . . . .
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net cash provided by (used for) financing activities . . .

Effect of exchange rate changes on cash, cash equivalents and

restricted cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net increase in cash, cash equivalents and restricted cash . . . . .
Cash, cash equivalents and restricted cash at beginning of the

year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—
(25)
(1,034)
22

(1,037)

—
(54)
(221)
—
44
—
(23)
9

(245)

19
1,073

2,246

(1,203)
(180)
(1,108)
12

(2,479)

—
(60)
(169)
—
18
(250)
(101)
(25)

(587)

(24)
305

1,941

Cash, cash equivalents and restricted cash at end of the year . . . $

3,319 $

2,246 $

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

(2,554)
(24)
(658)
23

(3,213)

(18)
(48)
(145)
1,671
13
—
(30)
(6)

1,437

(14)
604

1,337

1,941

WESTLAKE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in millions of dollars, except share amounts and per share data)

1. Description of Business and Significant Accounting Policies

Description of Business

Westlake Corporation, formerly known as Westlake Chemical Corporation (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, 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. The industries in which the Company operates are subject to price fluctuations and volatile feedstock
pricing typical of a commodity-based industry, the effects of which may not be immediately passed along to
customers.

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. Westlake Partners’ assets consist of a limited
partner interest in Westlake Chemical OpCo LP (“OpCo”), as well as the general partner interest in OpCo.
OpCo’s assets include two ethylene production facilities at the Company’s Lake Charles, Louisiana site, one
ethylene production facility at the Company’s Calvert City, Kentucky site and a 200-mile common carrier
ethylene pipeline that runs from Mont Belvieu, Texas to the Company’s Longview, Texas site. As of
December 31, 2023, the Company held a 77.2% limited partner interest in OpCo and a controlling interest in
Westlake Partners. The operations of Westlake Partners are consolidated in the Company’s financial statements.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and subsidiaries in which the

Company directly or indirectly owns more than a 50% voting interest and exercises control and, when applicable,
entities for which the Company has a controlling financial interest or is the primary beneficiary. Investments in
majority-owned companies where the Company does not exercise control and investments in nonconsolidated
affiliates (20%-50% owned companies, joint ventures and partnerships) are accounted for using the equity
method of accounting. Undistributed earnings from joint ventures included in retained earnings were immaterial
as of December 31, 2023. All intercompany transactions and balances are eliminated in consolidation.

Certain reclassifications have been made to the prior-year financial statements to conform to the current

year presentation.

Noncontrolling interests represent the direct equity interests held by investors in the Company’s

consolidated subsidiaries, Westlake Partners, Taiwan Chlorine Industries, Ltd. and Suzhou Huasu Plastics Co.,
Ltd.

Effective January 2021, the Company consolidated RS Cogen, LLC (“RS Cogen”) into its consolidated

financial statements. Effective October 31, 2022, the Company acquired the remaining 50% interest in RS
Cogen.

WESTLAKE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(in millions of dollars, except share amounts and per share data)

Basis of Presentation

The accompanying consolidated financial statements have been prepared in conformity with the accounting

principles generally accepted in the United States.

Cash and Cash Equivalents

Cash equivalents consist of highly liquid investments that are readily convertible into cash and have a

maturity of three months or less at the date of acquisition.

Concentration of Credit Risk

Financial instruments which potentially subject the Company to concentration of risk consist principally of

trade receivables from customers engaged in manufacturing polyethylene products, polyvinyl chloride (“PVC”)
products, epoxy products, chlor-alkali and derivative products as well as housing and infrastructure products such
as PVC compounds, PVC pipe and fittings, trim and mouldings, stone, windows, roofing and exterior products.
The Company’s large number of customers, the diversity of these customers’ businesses and the markets they
serve and customers geographic dispersion limits the concentrations of credit risk with respect to receivables.
The Company performs periodic credit evaluations of the customers’ financial condition and generally does not
require collateral. The Company maintains allowances for potential losses.

Allowance for Credit Losses

The determination of the allowance for credit losses is based on estimation of the amount of accounts
receivable that the Company believes are unlikely to be collected. Estimating this amount requires analysis of the
financial strength of the Company’s customers, the use of historical experience, the Company’s accounts
receivable aged trial balance, customer specific collectability analysis and an evaluation of economic conditions.
The allowance for credit losses is reviewed quarterly. Past due balances over 90 days and high-risk accounts as
determined by the analysis of financial strength of customers are reviewed individually for collectability.

Inventories

Inventories primarily include product, material and supplies. Inventories are stated at lower of cost or net

realizable value. Cost is determined using the first-in, first-out (“FIFO”) or average method.

Property, Plant and Equipment

Property, plant and equipment are carried at cost, net of accumulated depreciation. Cost includes

expenditures for improvements and betterments that extend the useful lives of the assets and interest capitalized
on significant capital projects. Capitalized interest was $8, $4 and $3 for the years ended December 31, 2023,
2022 and 2021, respectively. Repair and maintenance costs are charged to operations as incurred. Gains and
losses on the disposition or retirement of fixed assets are reflected in the consolidated statement of operations
when the assets are sold or retired.

WESTLAKE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(in millions of dollars, except share amounts and per share data)

Depreciation is provided by utilizing the straight-line method over the estimated useful lives of the assets

as follows:

Classification

Buildings and improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Years

40
10-25
3-15

Impairment of Long-Lived Assets

The Company reviews long-lived assets, including tangible assets and intangible assets with finite lives, for

impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not
be recoverable. Long-lived assets assessed for impairment are grouped by asset group, the lowest level for which
identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities.
Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to
future net undiscounted cash flows expected to be generated by the asset group from its use and eventual
disposition of that asset group. Assets are considered to be impaired if the carrying amount of an asset exceeds
the future undiscounted cash flows. The impairment recognized is measured by the amount by which the carrying
amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the
carrying amount or estimated fair value less costs to sell. Intangible assets with finite lives are amortized over
their estimated useful lives and evaluated with the associated long-lived asset group for impairment whenever
impairment indicators exist. See Note 6 for more information on the Company’s long-lived assets impairment
tests.

Impairment of Goodwill

Goodwill is tested for impairment at least annually, or when events or changes in circumstances indicate

the fair value of a reporting unit with goodwill has been reduced below its carrying amount. The Company
performed its annual goodwill impairment tests for each of the reporting units within the Performance and
Essential Materials and Housing and Infrastructure Products segments in the fourth quarter of 2023. The tests
indicated impairment of the Westlake Epoxy reporting unit under the Performance and Essential Materials
segment as the carrying amount of the reporting unit exceeded its fair value. See Note 8 for more information on
the Company’s annual goodwill impairment tests.

Equity Method Investments

The Company accounts for investments using the equity method of accounting if the Company has the
ability to exercise significant influence over, but not control of, an investee. Significant influence generally exists
if the Company has an ownership interest representing between 20% and 50% of the voting rights. Under the
equity method of accounting, investments are stated initially at cost and are adjusted for subsequent additional
investments and the proportionate share of profit or losses and distributions. The Company records its share of
the profits or losses of the equity investments, net of income taxes, in the consolidated statements of income. The
equity method investments are evaluated for impairment when events or changes in circumstances indicate, in

WESTLAKE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(in millions of dollars, except share amounts and per share data)

management’s judgment, that the carrying value of such investments may have experienced an other-than-
temporary decline in value. When evidence of loss in value has occurred, management compares the estimated
fair value of the investment to the carrying value of the investment to determine whether an impairment has
occurred. If the estimated fair value is less than the carrying value and management considers the decline in
value to be other-than-temporary, the excess of the carrying value over the estimated fair value is recognized in
the consolidated financial statements as an impairment.

Other Assets, net

Other assets, net include turnaround costs, investments in unconsolidated subsidiaries, restricted cash,

deferred charges and other long-term assets.

The Company accounts for turnaround costs under the deferral method. Turnarounds are the scheduled and

required shutdowns of specific operating units in order to perform planned major maintenance activities. The
costs related to the significant overhaul and refurbishment activities include maintenance materials, parts and
direct labor costs. The costs of the turnaround are deferred when incurred at the time of the turnaround and
amortized (within depreciation and amortization) on a straight-line basis until the next planned turnaround, which
typically range from three to six years. Deferred turnaround costs are presented as a component of other assets,
net. The cash outflows related to these costs are included in operating activities in the consolidated statement of
cash flows.

Business Combinations

The Company records business combinations using the acquisition method of accounting. Under the
acquisition method of accounting, identifiable assets acquired and liabilities assumed are recorded at their
acquisition date fair values. The excess of the purchase price over the estimated fair value is recorded as
goodwill. Changes in the estimated fair values of net assets recorded for acquisitions prior to the finalization of
more detailed analysis, but not to exceed one year from the date of acquisition, will adjust the amount of the
purchase price allocable to goodwill. Measurement period adjustments are reflected in the period in which they
occur.

Income Taxes

The Company utilizes the balance sheet method of accounting for deferred income taxes. Under this
method, deferred tax assets or liabilities are recorded based upon temporary differences between the tax basis of
assets and liabilities and their carrying values for financial reporting purposes. Deferred tax expense or benefit is
the result of changes in the deferred tax assets and liabilities during the period. Valuation allowances are
recorded against deferred tax assets when it is considered more likely than not that the deferred tax assets will not
be realized.

Foreign Currency Translation

Assets and liabilities of foreign subsidiaries are translated to U.S. dollars at the exchange rate as of the end

of the year. Statement of operations items are translated at the average exchange rate for the year. The resulting
translation adjustment is recorded as a separate component of stockholders’ equity.

WESTLAKE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(in millions of dollars, except share amounts and per share data)

Revenue Recognition

Revenue is recognized when the Company transfers control of inventories to its customers. Amounts

recognized as revenues reflect the consideration to which the Company expects to be entitled in exchange for
those inventories. Provisions for discounts, rebates and returns are incorporated in the estimate of variable
consideration and reflected as a reduction to revenue in the same period as the related sales.

Control of inventories generally transfers upon shipment for domestic sales. The Company excludes taxes

collected on behalf of customers from the estimated contract price. For export contracts, the point at which
control passes to the customer varies depending on the terms specified in the customer contract.

The Company generally invoices customers and recognizes revenue and accounts receivable upon

transferring control of inventories. In limited circumstances, the Company transfers control of inventories shortly
before it has an unconditional right to receive consideration, resulting in recognition of contract assets. The
Company also receives advance payments from certain customers, resulting in recognition of contract liabilities.
Contract assets and liabilities are generally settled within the period and are not material to the consolidated
balance sheets. The Company expenses sales commissions when incurred. These costs are recorded within
selling, general and administrative expenses. Aside from the amounts disclosed within Note 9, the Company does
not disclose the value of unsatisfied performance obligations because its contracts with customers (1) have an
original expected duration of one year or less or (2) have only variable consideration that is calculated based on
market prices at specified dates and is allocated to wholly unsatisfied performance obligations.

Revenue from Contracts with Customers (“ASC 606”) requires disclosure of disaggregated revenue into

categories that depict the nature of how the Company’s revenue and cash flows are affected by economic factors.
The Company discloses revenues by business and segment in Note 23.

Leases

The Company is obligated under various long-term and short-term operating leases for rail cars, buildings,

land and other transportation and storage assets. The Company determines whether an arrangement is, or
contains, a lease at contract inception. Some of the Company’s arrangements contain both lease and non-lease
components. For certain transportation equipment leases, the Company accounts for the lease and non-lease
components as a single lease component. The Company records right-of-use assets and corresponding lease
liabilities for operating leases with terms greater than one year. Operating lease right-of-use assets and liabilities
are recorded at the present value of the fixed lease payments over the life of the lease. The majority of the
Company’s leases do not provide an implicit rate. Therefore, the Company uses its incremental borrowing rate at
lease commencement to measure operating lease right-of-use assets and lease liabilities. Certain of the
Company’s leases provide for renewal and purchase options. Renewal and purchase options are evaluated at
lease commencement and included in the lease term if they are reasonably certain to be exercised. Short-term
leases are recognized in rental expense on a straight-line basis over the lease term and are not recorded in the
consolidated balance sheets. The Company’s finance leases are not material to the consolidated financial
statements.

WESTLAKE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(in millions of dollars, except share amounts and per share data)

Transportation and Freight

Amounts billed to customers for freight and handling costs on outbound shipments are included in net sales

in the consolidated statements of operations. Transportation and freight costs incurred by the Company on
outbound shipments are included in cost of sales in the consolidated statements of operations.

Price Risk Management

The Company recognizes derivative instruments on the balance sheet at fair value, and changes in a

derivative’s fair value are currently recognized in earnings or comprehensive income, depending on the
designation of the derivative. If the derivative is designated as a fair value hedge, the changes in the fair value of
the derivative and of the hedged item attributable to the hedged risk are recognized in earnings. If the derivative
is designated as a cash flow hedge, the effective portion of the change in the fair value of the derivative is
recorded in comprehensive income and is recognized in the statement of operations when the hedged item affects
earnings. Ineffective portions of changes in the fair value of cash flow hedges are recognized in earnings
currently. The derivative instruments did not have a material impact on the Company’s consolidated financial
statements.

Asset Retirement Obligations

The Company has conditional asset retirement obligations for the removal and disposal of hazardous

materials from certain of the Company’s manufacturing facilities.

The Company recognizes asset retirement obligations in the period in which the liability becomes probable

and reasonably estimable. Recognized asset retirement obligations are initially recorded at fair value and
capitalized as a component of the carrying value of the long-lived asset to which the obligation relates. The
liability is accreted to its future value each period, and the capitalized cost is depreciated over the estimated
useful life of the related asset. Upon settlement of the liability, a gain or loss is recorded. As of December 31,
2023, the Company had $3 and $37 of asset retirement obligations recorded as accrued and other liabilities and
other liabilities, respectively. As of December 31, 2022, the Company had no asset retirement obligations
recorded as accrued and other liabilities and had $31 of asset retirement obligations recorded as other liabilities.

The Company also has conditional asset retirement obligations that have not been recognized because the

fair values of the conditional legal obligations cannot be measured due to the indeterminate settlement date of the
obligations. Settlements of the unrecognized conditional asset retirement obligations are not expected to have a
material adverse effect on the Company’s financial condition, results of operations or cash flows in any
individual reporting period.

Environmental Costs

Environmental costs relating to current operations are expensed or capitalized, as appropriate, depending
on whether such costs provide future economic benefits. Remediation liabilities are recognized when the costs
are considered probable and can be reasonably estimated. Measurement of liabilities is based on currently
enacted laws and regulations, existing technology and undiscounted site-specific costs. Environmental liabilities

WESTLAKE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(in millions of dollars, except share amounts and per share data)

in connection with properties that are sold or closed are realized upon such sale or closure, to the extent they are
probable and estimable and not previously reserved. Recognition of any joint and several liabilities is based upon
the Company’s best estimate of its final pro rata share of the liability.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the

United States of America 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.

Warranty Costs

The Company provides warranties for certain products, primarily under the housing and infrastructure
segment, against defects in material and performance. The accrual for warranty claims is recorded at the time of
sale based on historical warranty claims experience. Warranty liabilities are included in accrued liabilities and
other liabilities in the consolidated balance sheets.

The warranty liabilities activity for the years ended December 31, 2023 and 2022 is as follows:

Beginning balance, January 1, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Estimated fair value of warranty liability assumed in acquisition . . . . . . . . . . . . .
Warranty provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Warranty claims paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Ending balance, December 31,

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

58 $
—
24
(13)

69 $

55
1
15
(13)

Year Ended December 31,

2023

2022

Recently Issued Accounting Pronouncements

Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU No.2023-09)

In December 2023, the Financial Accounting Standards Board (“FASB”) issued accounting standards

update No. 2023-09 to enhance the transparency and decision-usefulness of income tax disclosures and to
provide information to better assess how an entity’s operations and related tax risks and tax planning and
operational opportunities affect its tax rate and prospects for future cash flows. For public business entities, the
amendments in this update are effective for annual periods beginning after December 15, 2024. The Company is
in the process of evaluating the impact of this standard on the disclosures in the Company’s financial statements.

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

WESTLAKE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(in millions of dollars, except share amounts and per share data)

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 is in the process of evaluating the impact of this standard on the
disclosures in the Company’s financial statements.

Business Combinations—Joint Venture Formations (Subtopic 805-60): Recognition and Initial Measurement
(ASU 2023-05)

In August 2023, the FASB issued accounting standards update No. 2023-05 to address the accounting for

contributions made to a joint venture, upon formation, in a joint venture’s financial statements, and to (1) provide
decision-useful information to investors and other allocators of capital (collectively, investors) in a joint
venture’s financial statements and (2) reduce diversity in practice. Under the ASU, upon formation, a joint
venture should recognize and initially measure its assets and liabilities at fair value (with exceptions to fair value
measurement that are consistent with guidance for business combinations). The amendments in this update
become effective for all joint venture formations with a formation date on or after January 1, 2025. Additionally,
a joint venture that was formed before January 1, 2025 may elect to apply the amendments retrospectively if it
has sufficient information. Early adoption is permitted in any interim or annual period in which financial
statements have not yet been issued (or made available for issuance), either prospectively or retrospectively. The
Company does not expect that this accounting standard will have a material impact, upon adoption, on the
Company’s consolidated financial position, results of operations and cash flows.

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 does not expect that this accounting standard will have a material
impact, upon adoption, on the Company’s consolidated financial position, results of operations and cash flows.

Recently Adopted Accounting Standards

Liabilities—Supplier Finance Programs (ASU No. 2022-04)

In September 2022, the FASB issued accounting standards update No. 2022-04 to enhance transparency of

supplier finance programs. Under the ASU, the buyer in a supplier finance program is required to disclose
information about the key terms of the program, outstanding confirmed amounts as of the end of the period, a
rollforward of the amount of obligations confirmed and the amount of obligations subsequently paid, and a
description of where in the financial statements outstanding amounts are presented. The amendments in this
update became effective for all entities for fiscal years beginning after December 15, 2022, including interim

WESTLAKE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(in millions of dollars, except share amounts and per share data)

periods within those fiscal years, except for the disclosure of rollforward information, which is effective for fiscal
years beginning after December 15, 2023. The Company adopted this accounting standard effective January 1,
2023, and the adoption did not have a material impact on the Company’s consolidated financial position, results
of operations and cash flows.

Business Combinations—Accounting for Contract Assets and Contract Liabilities from Contracts with Customers
Update (ASU No.2021-08)

In October 2021, the FASB issued an accounting standards update that requires acquiring entities to
recognize and measure contract assets and contract liabilities in a business combination in accordance with the
accounting guidance on Revenue from Contracts with Customers (ASC 606). The guidance in this update
improves comparability for both the recognition and measurement of acquired revenue contracts with customers
at the date of and after a business combination. The accounting standard became effective for reporting periods
beginning after December 15, 2022. The Company adopted this accounting standard effective January 1, 2023,
and the adoption did not have a material impact on the Company’s consolidated financial position, results of
operations and cash flows. The standard will be applicable to future business combinations.

2. Acquisitions

Hexion Epoxy Business.

On February 1, 2022, the Company completed its acquisition of Hexion’s global epoxy business

(“Westlake Epoxy”) for total consideration of $1,207. 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.
The purchase accounting adjustments for the year ended December 31, 2023 resulted in a $4 increase in
goodwill. The intangible assets that have been acquired are being amortized over periods of 11 to 19 years,
except for certain intangible assets that were subject to impairment in the fourth quarter of 2023 as discussed in
Note 6.

WESTLAKE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(in millions of dollars, except share amounts and per share data)

The information below represents the purchase price allocation:

Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prepaid expenses and other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating lease right-of-use assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

42
299
346
22
664
59
145
104

Total assets acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,681

Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued and other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pensions and other post-retirement benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total liabilities assumed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

189
88
96
163
48
19

603

Total identifiable net assets acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,078

Noncontrolling interest
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2)
131

Total Westlake Corporation purchase consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

1,207

Boral Target Companies in North America.

On October 1, 2021, the Company completed its acquisition of Boral Limited’s North American building

products businesses in roofing, siding, trim and shutters, decorative stone and windows (the “Boral Target
Companies”) for total consideration of $2,140. 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.

LASCO Fittings, Inc.

On August 19, 2021, the Company completed its acquisition of LASCO Fittings, Inc., a Delaware
corporation (“LASCO”), a manufacturer of injected-molded polyvinyl chloride (“PVC”) fittings that serve the
plumbing, pool and spa, industrial, irrigation and retail markets in the United States, for total consideration of
$277. The assets acquired and liabilities assumed and the results of operations of LASCO are included in the
Housing and Infrastructure Products segment.

Dimex 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,

WESTLAKE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(in millions of dollars, except share amounts and per share data)

polyethylene and thermoplastic elastomer materials, including, landscape edging; home, office and industrial
matting; marine dock edging; and masonry joint controls. The total consideration was $172. The assets acquired
and liabilities assumed and the results of operations of Dimex are included in the Housing and Infrastructure
Products segment.

3. Financial Instruments

Cash Equivalents

The Company had $360 of held-to-maturity securities with original maturities of three months or less,
primarily consisting of corporate debt securities, classified as cash equivalents at December 31, 2023. There were
no held-to-maturity securities at December 31, 2022. The Company’s investments in held-to-maturity securities
were held at amortized cost, which approximates fair value.

Restricted Cash and Cash Equivalents

The Company had restricted cash and cash equivalents of $15 and $18 at December 31, 2023 and 2022,

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 and are
reflected primarily in other assets, net in the consolidated balance sheets.

4. Accounts Receivable

Accounts receivable consist of the following at December 31:

2023

2022

Trade customers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Related parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Allowance for credit losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Federal and state taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,413 $
7
(27)

1,393
65
143

Accounts receivable, net

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

1,601 $

1,676
3
(28)

1,651
69
81

1,801

5. Inventories

Inventories consist of the following at December 31:

Finished products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Feedstock, additives, chemicals and other raw materials . . . . . . . . . . . . . . . . . . .
Materials and supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

989 $
401
232

Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

1,622 $

1,157
496
213

1,866

2023

2022

WESTLAKE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(in millions of dollars, except share amounts and per share data)

6. Property, Plant and Equipment

Property, plant and equipment consist of the following at December 31:

2023

2022

Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Buildings and improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Less: Accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Construction in progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

304 $
951
10,771
803

12,829
5,240

7,589
930

Property, plant and equipment, net

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

8,519 $

299
895
10,408
711

12,313
4,655

7,658
819

8,477

Depreciation expense on property, plant and equipment of $763, $762 and $604 is included primarily in

cost of sales in the consolidated statements of operations for the years ended December 31, 2023, 2022 and 2021,
respectively.

Westlake Epoxy

During the fourth quarter of 2023, the Westlake Epoxy business’s sales volumes and prices, specifically base

epoxy resins in Europe, continued to deteriorate. These lower sales volumes and prices were primarily driven by
record exports out of Asia into Europe and North America. In addition, Westlake Epoxy operations in Europe have
experienced sustained high energy and power costs. These factors negatively impacted Westlake Epoxy financial
results during 2023. The Company identified these developments, along with management’s outlook for the
Westlake Epoxy business over the foreseeable future, as impairment indicators during the fourth quarter of 2023.
Based on this triggering event, the Company performed a quantitative impairment analysis of Westlake Epoxy’s
long-lived assets along with the annual goodwill impairment assessment during the fourth quarter of 2023.

Long-Lived Assets Impairment

The Company evaluated Westlake Epoxy’s long-lived asset groups for impairment during the fourth quarter
of 2023 in line with the identification of the triggering event discussed above. Recoverability tests were performed
for each of Westlake Epoxy’s asset groups to compare the carrying amounts to the net undiscounted cash flow
projections of the respective asset groups. The undiscounted cash flow projections were based on historical results,
estimates made by management of future market conditions, current and future strategic and operational plans and
future financial performance projected through the remaining useful life of the primary asset in the asset group.
Based on the recoverability tests, the Company determined that the carrying amount of the primary assets of the
Westlake Epoxy Netherlands asset group is not recoverable. We determined all other Epoxy asset groups to be
recoverable. The fair value of the asset group was calculated using a discounted cash flow methodology and a
non-cash impairment charge of $347, related to the Company’s base epoxy resin business in the Netherlands, was
recognized within the Performance and Essential Materials segment to reduce the carrying amount of the asset

WESTLAKE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(in millions of dollars, except share amounts and per share data)

group to its fair value. The long-lived assets impairment within the Westlake Epoxy Netherlands asset group
consists of non-cash charges of $256 in property, plant and equipment, $32 in operating lease right-of-use assets, $6
in customer relationships, $43 in other intangible assets, and $10 in other assets. The long-lived assets impairment
charge is reported in impairment of goodwill and long-lived assets on the consolidated statements of operations.

7. Leases

Lease-related asset and liability balances consist of the following at December 31:

Operating Leases

Right-of-use assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

697 $

2023

2022

Accrued and other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Operating lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total operating lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

Weighted Average Remaining Term (in years) . . . . . . . . . . . . . . . . . . . . . . .
Weighted Average Lease Discount Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . .

124 $
611

735 $

9
3.8%

615

116
504

620

9
2.9%

The Company’s operating lease cost is comprised of payments related to operating leases recorded in the

consolidated balance sheet and short-term rental payments for leases that are not recorded in the consolidated
balance sheet. Variable operating lease cost was not material to the consolidated statements of operations for the
years ended December 31, 2023, 2022, and 2021. The components of operating lease expense were as follows:

Year Ended December 31,

2023

2022

2021

Operating lease cost (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Short-term lease cost

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total operating lease cost . . . . . . . . . . . . . . . . . . . . . . . . . . . $

142 $
121

263 $

139 $
101

240 $

117
85

202

(1)

Includes fixed lease payments for operating leases recorded in the consolidated balance sheet.

Maturities of lease liabilities were as follows at December 31, 2023:

2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2026 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2027 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2028 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total lease payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: imputed interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Present value of lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

142
122
108
95
81
362

910
(175)

735

Operating Leases

WESTLAKE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(in millions of dollars, except share amounts and per share data)

Related Party Leases

The Company leases certain assets under operating leases with related parties. Right-of-use assets and the

associated operating lease liabilities for related party operating leases were approximately $26 and $29 as of
December 31, 2023 and December 31, 2022, respectively. The Company recognized operating lease cost for
fixed lease payments to related parties of $5 and $6 for the years ended December 31, 2023 and 2022,
respectively.

8. Goodwill and Other Intangible Assets

Goodwill

The following table summarizes gross carrying amounts and changes in the carrying amount of goodwill

for the years ended December 31, 2023 and 2022.

Performance and
Essential
Materials
Segment

Housing and
Infrastructure
Products
Segment

Total

Balance at December 31, 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . $
Goodwill acquired during the year . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . .
Measurement period adjustment
Effects of changes in foreign exchange rates . . . . . . . . . . . . . . . .

Balance at December 31, 2022 . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . .
Measurement period adjustment
Impairment of goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effects of changes in foreign exchange rates . . . . . . . . . . . . . . . .

902 $
119
8
(9)

1,020
4
(128)
1

1,122 $
5
16
(2)

1,141
1
—
2

Balance at December 31, 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . $

897 $

1,144 $

2,024
124
24
(11)

2,161
5
(128)
3

2,041

Goodwill Impairment

The Company performed a quantitative assessment for the purposes of its annual goodwill impairment
analysis for each of the reporting units within the Performance and Essential Materials and the Housing and
Infrastructure Products segments during the fourth quarter of 2023. The fair values of the reporting units were
determined using both a discounted cash flow methodology and a market value methodology. The discounted
cash flow projections were based on a long-term forecast to reflect the cyclicality of the business. The forecast is
based on historical results, estimates by management of future market conditions, current and future strategic and
operational plans and future financial performance. Significant assumptions used in the discounted cash flow
projection included projected sales volumes based on production capacities, future sales prices, feedstock, energy
and power costs and capital expenditures to maintain safe and reliable plant operations. The future cash flows
were discounted to present value using a discount rate ranging from 10.0% to 12.0%. The significant assumptions
used in determining the fair value of the reporting unit using the market value methodology include the
determination of appropriate market comparables and the estimated multiples of net income before interest
expense, income taxes, depreciation and amortization (EBITDA) a willing buyer is likely to pay. Based on the
quantitative tests performed during the fourth quarter of 2023, the Company determined that the fair value of the

WESTLAKE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(in millions of dollars, except share amounts and per share data)

Westlake Epoxy reporting unit did not exceed its carrying amount, and as such, a goodwill impairment charge of
$128 was recognized within the Performance and Essential Materials segment. The goodwill impairment charge
is reported in impairment of goodwill and long-lived assets on the consolidated statements of operations. For all
other reporting units, the Company determined that the fair value of each of the reporting units were substantially
in excess of carrying value.

Intangible Assets

Intangible assets consist of the following at December 31:

2023

Accumulated
Amortization

Cost

Net

Cost

2022

Accumulated
Amortization

Net

Weighted
Average
Life

Customer

relationships . . . . . . . . $

1,586 $

(676) $

910 $

1,589 $

(596) $

993

Other intangible assets:
Licenses and
intellectual
property . . . . . . . .
Trade name . . . . . . .
Other . . . . . . . . . . . .

Total other intangible

264
385
112

(136)
(104)
(28)

128
281
84

306
411
84

(124)
(86)
(19)

182
325
65

15
18
17

assets . . . . . . . . . . . . $

761 $

(268) $

493 $

801 $

(229) $

572

Scheduled amortization of intangible assets for the next five years is as follows: $142, $113, $105, $103

and $103 in 2024, 2025, 2026, 2027 and 2028, respectively.

9. Equity Method Investments

LACC, LLC Joint Venture

In 2015, Eagle US 2 LLC (“Eagle”), a wholly-owned subsidiary of the Company, and Lotte Chemical USA

Corporation, a subsidiary of Lotte Chemical Corporation (“Lotte”), formed a joint venture, LACC, LLC
(“LACC”), to design, build and operate an ethylene facility with 2.2 billion pounds per year of ethylene
production capacity. Pursuant to a contribution and subscription agreement between Eagle and LACC, Eagle
contributed $225 to LACC to fund construction costs of the ethylene plant, representing approximately 12% of
the membership interests in LACC. On November 12, 2019, the Company, through Eagle, completed the
acquisition of an additional 34.8% of the membership interests in LACC from Lotte for approximately $817. On
March 15, 2022, the Company acquired an additional 3.2% of the membership interests in LACC from Lotte for
$89. As of December 31, 2023, the Company owned an aggregate 50% membership interest in LACC. As of
December 31, 2023, the Company’s investment exceeded the underlying equity in net assets by approximately
$200 which was assigned to goodwill and not amortized.

The ethylene plant was built adjacent to the Company’s chlor-alkali facility in Lake Charles. During the

third quarter of 2019, the ethylene plant began commercial operations.

WESTLAKE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(in millions of dollars, except share amounts and per share data)

The Company accounts for its investment in LACC under the equity method of accounting. The LACC
joint venture is a cost-sharing arrangement between the members of LACC. The members of LACC receive their
proportionate shares of ethylene offtake each month and fund cash operating costs, excluding depreciation and
amortization. As a result, LACC recognizes net losses equal to depreciation and amortization each period. The
Company’s equity in losses from LACC, which is equal to its share of depreciation and amortization expenses, is
recognized in cost of sales in the consolidated statements of operations. The Company’s investment in LACC is
classified as an equity method investment in the consolidated balance sheets. The Company’s capital
contributions to fund its share of capital expenditures are classified within investing activities in the consolidated
statements of cash flows.

The Company’s ethylene offtake from LACC was approximately 935 million and 766 million pounds

during the years ended December 31, 2023 and 2022, respectively.

Changes in the Company’s investment in LACC for the years ended December 31, 2023 and 2022 were as

follows:

Investment in
LACC

Balance at December 31, 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Cash contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additional interest purchased . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Balance at December 31, 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Balance at December 31, 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

943
87
89
(44)

1,075
21
(49)

1,047

Services Provided to LACC and Lotte

The Company provides certain utilities and other services to LACC and Lotte. Pursuant to a construction
and reimbursement agreement, LACC and Lotte agreed to reimburse the Company for construction costs over a
6.5-year period beginning in 2020. In addition to the reimbursements for construction costs, the Company
charges LACC and Lotte certain fixed fees under an operating, maintenance and logistics agreement. The
Company accounts for the reimbursement of construction costs and the fixed fees as components of the total
transaction price and recognizes it ratably in net sales over approximately 25 years. The remaining performance
obligations at December 31, 2023, representing these fixed components of the transaction price, totaled $52 and
$72 from LACC and Lotte, respectively. The associated contract liabilities recorded from LACC and Lotte
totaled $23 and $29 as of December 31, 2023, respectively, and $19 and $24 as of December 31, 2022,
respectively. In addition to the reimbursements for construction costs and other fixed fees, the Company charges
LACC and Lotte certain variable fees.

WESTLAKE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(in millions of dollars, except share amounts and per share data)

Other Equity Method Investments

In addition to LACC, the Company has other equity method investments amounting to $68 and $67 as of

December 31, 2023 and 2022, respectively. See Note 20 for more detailed information.

10. Accounts Payable

Accounts payable consist of the following at December 31:

Accounts payable—third parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Accounts payable to related parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Notes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

2023

2022

849 $
15
13

877 $

870
16
3

889

11. Long-Term Debt

Long-term debt consist of the following at December 31:

December 31,
2023

December 31,
2022

0.875% senior notes due 2024 (the “0.875% 2024 Senior Notes”) . . . . . . . . . . . . $
3.60% senior notes due 2026 (the “3.60% 2026 Senior Notes”) . . . . . . . . . . . . . .
Loan related to tax-exempt waste disposal revenue bonds due 2027 . . . . . . . . . .
1.625% €700 million senior notes due 2029 (the “1.625% 2029 Senior

300 $
750
11

Notes”)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.375% senior notes due 2030 (the “3.375% 2030 Senior Notes”) . . . . . . . . . . . .
3.50% senior notes due 2032 (the “3.50% 2032 tax-exempt GO Zone Refunding
Senior Notes”) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.875% senior notes due 2041 (the “2.875% 2041 Senior Notes”) . . . . . . . . . . . .
5.00% senior notes due 2046 (the “5.00% 2046 Senior Notes”) . . . . . . . . . . . . . .
4.375% senior notes due 2047 (the “4.375% 2047 Senior Notes”) . . . . . . . . . . . .
3.125% senior notes due 2051 (the “3.125% 2051 Senior Notes”) . . . . . . . . . . . .
3.375% senior notes due 2061 (the “3.375% 2061 Senior Notes”) . . . . . . . . . . . .
Term loans due 2026 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Long-term debt, principal amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less:

Unamortized discount and debt issuance costs . . . . . . . . . . . . . . . . . . . . . . . .

Long-term debt, carrying value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less current portion:

773
300

250
350
700
500
600
450
13

4,997

4,906

0.875% senior notes due 2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

299

Long-term debt, carrying value, net of current portion . . . . . . . . . . . . . . . . . . . . . $

4,607 $

300
750
11

750
300

250
350
700
500
600
450
15

4,976

4,879

—

4,879

WESTLAKE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(in millions of dollars, except share amounts and per share data)

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 SOFR (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 leverage ratio financial maintenance covenant. As of December 31, 2023,
the Company was in compliance with the total leverage ratio financial maintenance covenant. The 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 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 Credit Agreement.

The 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 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.

As of December 31, 2023, the Company had no borrowings and no letters of credit outstanding, and had

borrowing availability of $1,500, under the Credit Agreement.

0.875% Senior Notes due 2024

In August 2021, the Company completed the registered public offering of $300 aggregate principal amount

of the 0.875% 2024 Senior Notes. The Company 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.

3.60% Senior Notes due 2026 and 5.00% Senior Notes due 2046

In August 2016, the Company issued $750 aggregate principal amount of the 3.60% 2026 Senior Notes and

$700 aggregate principal amount of the 5.00% 2046 Senior Notes. In March 2017, the Company commenced
registered exchange offers to exchange the 3.60% 2026 Senior Notes and the 5.00% 2046 Senior Notes for new
notes that are identical in all material respects to the 3.60% 2026 Senior Notes and the 5.00% 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 5.00% 2046 Senior
Notes were exchanged. The 3.60% 2026 Senior Notes that were not exchanged in the 3.60% 2026 Senior Notes
exchange offer 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.

WESTLAKE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(in millions of dollars, except share amounts and per share data)

Revenue Bonds

In December 1997, the Company 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 principal amount of
tax-exempt waste disposal revenue bonds in order to finance the Company’s 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. The interest rate on the
waste disposal revenue bonds at December 31, 2023 and 2022 was 4.30% and 3.88%, respectively.

1.625% Senior Notes due 2029

On July 17, 2019, the Company completed the registered public offering of €700 million aggregate
principal amount of the 1.625% 2029 Senior Notes. The Company received approximately $779 of net proceeds
from the offering. The 1.625% 2029 Senior Notes will accrue interest from July 17, 2019 at a rate of 1.625% per
annum, payable annually in arrears on July 17 of each year, beginning July 17, 2020. The Company may
optionally redeem the 1.625% 2029 Senior Notes in accordance with the terms of the 1.625% 2029 Senior Notes.
The Company designated this euro-denominated debt as a non-derivative net investment hedge of a portion of the
Company’s net investments in euro functional-currency denominated subsidiaries to offset foreign currency
fluctuations.

3.375% Senior Notes due 2030

On June 12, 2020, the Company completed the registered public offering of $300 aggregate principal
amount of the 3.375% 2030 Senior Notes. There is no sinking fund and no scheduled amortization of the 3.375%
2030 Senior Notes prior to maturity. The 3.375% 2030 Senior Notes accrue interest from June 12, 2020 at a rate
of 3.375% per annum, payable semi-annually in arrears on June 15 and December 15 of each year, beginning
December 15, 2020. The Company may optionally redeem the 3.375% 2030 Senior Notes in accordance with the
terms of 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 remarketing of $250 aggregate principal amount of 3.50% tax-exempt revenue
refunding bonds due November 1, 2032 (the “3.50% 2032 GO Zone Bonds”), the net proceeds of which were
used to redeem $250 aggregate principal amount of the Authority’s 6 3⁄4% tax-exempt revenue bonds due
November 1, 2032 issued by the Authority under the GO Zone Act in December 2007. In connection with the
remarketing of the 3.50% 2032 GO Zone Bonds, the Company issued $250 aggregate principal amount of the
3.50% 2032 GO Zone Refunding Senior Notes. The 3.50% 2032 GO Zone 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 amount plus accrued interest.

WESTLAKE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(in millions of dollars, except share amounts and per share data)

2.875% Senior Notes due 2041

In August 2021, the Company completed the registered public offering of $350 aggregate principal amount

of the 2.875% 2041 Senior Notes. The Company 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, the Company 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.

4.375% Senior Notes due 2047

In November 2017, the Company completed the registered public offering of $500 aggregate principal

amount of the 4.375% 2047 Senior Notes. The 4.375% 2047 Senior Notes are unsecured and mature on
November 15, 2047. There is no sinking fund and no scheduled amortization of the 4.375% 2047 Senior Notes
prior to maturity. The Company may optionally redeem the 4.375% 2047 Senior Notes in accordance with the
terms of the 4.375% 2047 Senior Notes.

3.125% Senior Notes due 2051

In August 2021, the Company completed the registered public offering of $600 aggregate principal amount

of the 3.125% 2051 Senior Notes. The Company 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, the Company 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.

3.375% Senior Notes due 2061

In August 2021, the Company completed the registered public offering of $450 aggregate principal amount

of the 3.375% 2061 Senior Notes. The Company 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, the Company 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.

WESTLAKE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(in millions of dollars, except share amounts and per share data)

The holders of the 0.875% 2024 Senior Notes, the 3.60% 2026 Senior Notes, the 1.625% 2029 Senior
Notes, the 3.375% 2030 Senior Notes, the 3.50% 2032 GO Zone Refunding Senior Notes, the 2.875% 2041
Senior Notes, the 5.00% 2046 Senior Notes, the 4.375% 2047 Senior Notes, the 3.125% 2051 Senior Notes and
the 3.375% 2061 Senior Notes may require the Company to repurchase the notes at a price equal to 101% of their
principal amount, plus accrued and unpaid interest to, but not including, the date of repurchase, upon the
occurrence of both a “change of control” and, within 60 days of such change of control, a “below investment
grade rating event” (as such terms are defined in the respective indentures governing these notes).

The indenture governing the 0.875% 2024 Senior Notes, the 3.60% 2026 Senior Notes, the 1.625% 2029

Senior Notes, the 3.375% 2030 Senior Notes, the 3.50% 2032 GO Zone Refunding Senior Notes, the 2.875%
2041 Senior Notes, the 5.00% 2046 Senior Notes, the 4.375% 2047 Senior Notes, the 3.125% 2051 Senior Notes,
and the 3.375% 2061 Senior Notes (together, the “Notes”) contains customary events of default and covenants
that, among other things and subject to certain exceptions, restrict the Company and certain of the Company’s
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. The Notes are unsecured
and none of the Company’s subsidiaries have guaranteed any series of the Notes.

2026 Term Loans

In March 2021, Taiwan Chlorine Industries, Ltd., the Company’s 60%-owned joint venture, entered into
five-year loan agreements for a maximum total limit of approximately $22. The interest rate on these loans at
December 31, 2023 was 0.95%. The unsecured loans include a government rate subsidy and have a 5-year
maturity. The balance outstanding under these loans was approximately $13 at December 31, 2023.

As of December 31, 2023, the Company was in compliance with all of its long-term debt covenants.

The weighted average interest rate on all long-term debt was 3.2% at December 31, 2023 and 2022.

Unamortized debt issuance costs on long-term debt were $36 and $40 at December 31, 2023 and 2022,
respectively.

Aggregate scheduled maturities of long-term debt during the next five years consist of $300 in 2024, $763

in 2026 and $11 in 2027. There are no other scheduled maturities of debt in 2024 through 2028.

12. Stockholders’ Equity

The Company’s Board of Directors has declared regular quarterly dividends to holders of its common stock

aggregating $221, $169 and $145 for the years ended December 31, 2023, 2022 and 2021, respectively.

Common Stock

Each share of common stock entitles the holder to one vote on all matters on which holders are permitted to

vote, including the election of directors. There are no cumulative voting rights. Accordingly, holders of a
majority of the total votes entitled to vote in an election of directors will be able to elect all of the directors
standing for election. Subject to preferences that may be applicable to any outstanding preferred stock, the

WESTLAKE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(in millions of dollars, except share amounts and per share data)

holders of the common stock will share equally on a per share basis any dividends when, as and if declared by
the Board of Directors out of funds legally available for that purpose. If the Company is liquidated, dissolved or
wound up, the holders of the Company’s common stock will be entitled to a ratable share of any distribution to
stockholders, after satisfaction of all the Company’s liabilities and of the prior rights of any outstanding class of
the Company’s preferred stock. The Company’s common stock has no preemptive or conversion rights or other
subscription rights. There are no redemption or sinking fund provisions applicable to the Company’s common
stock.

Preferred Stock

The Company’s charter authorizes the issuance of shares of preferred stock. The Company’s Board of

Directors has the authority, without shareholder approval, to issue preferred shares from time to time in one or
more series, and to fix the number of shares and terms of each such series. The Board may determine the
designations and other terms of each series including dividend rates, whether dividends will be cumulative or
non-cumulative, redemption rights, liquidation rights, sinking fund provisions, conversion or exchange rights and
voting rights.

Stock Repurchase Program

In November 2014, the Company’s Board of Directors approved a $250 share repurchase program (the
“2014 Program”). In November 2015, the Company’s Board of Directors approved the expansion of the 2014
Program by an additional $150. In August 2018, the Company’s Board of Directors approved the expansion of
the 2014 Program by an additional $150. In August 2022, the Company’s Board of Directors approved the
further expansion of the existing 2014 Program by an additional $500. The number of shares repurchased by the
Company under the 2014 Program was 211,294, 1,079,736 and 355,800 for the years ended December 31, 2023,
2022 and 2021, respectively. As of December 31, 2023, the Company had repurchased a total of 8,722,550 shares
of its common stock for an aggregate purchase price of approximately $574.

Any shares repurchased under the 2014 Program are held by the Company as treasury stock and may be

used for general corporate purposes, including for the 2013 Omnibus Incentive Plan. In 2014, the Company
began delivering treasury shares to employees and non-employee directors for options exercised, for the
settlement of restricted stock units and for the settlement of performance stock units. The cost of treasury shares
delivered is determined using the specific identification method.

100

WESTLAKE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(in millions of dollars, except share amounts and per share data)

13. Accumulated Other Comprehensive Income (Loss)

Changes in accumulated other comprehensive income (loss) by component 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, 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . $

20 $

(56) $

Net other comprehensive income (loss) attributable to

Westlake Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Balances at December 31, 2022 . . . . . . . . . . . . . . . . . . . . . . . . . .
Net other comprehensive income (loss) attributable to

Westlake Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(48)

(85)

(141)

Balances at December 31, 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . $

4 $

(102) $

(36)

(53)

(89)

(9)

(98)

14. Employee Benefits

Defined Contribution Plans

U.S. Plans

The Company has a defined contribution savings plan covering the eligible U.S. regular full-time and part-

time employees, whereby eligible employees may elect to contribute up to 100% of their annual eligible
compensation, subject to an annual plan limit in line with the annual elective contribution limit as determined by
the Internal Revenue Service. The Company matches its employee’s contribution up to a certain percentage of
such employee’s compensation, per the terms of the plan. The Company may, at its discretion and per the terms
of the plan, make an additional non-matching contribution in an amount as the Board of Directors may
determine. For the years ended December 31, 2023, 2022 and 2021, the Company recorded approximately $36,
$33 and $24, respectively, to expense for these contributions.

Further, within the plan, the Company also makes an annual retirement contribution to substantially all
employees of certain subsidiaries. The Company’s contributions to the plan are determined as a percentage of
employees’ pay. For the years ended December 31, 2023, 2022 and 2021, the Company charged approximately
$48, $46 and $35, respectively, to expense for these contributions.

Non-U.S. Plans

The Company has defined contribution plans in several countries covering eligible employees of the
Company. The Company’s contributions to the plans are based on applicable laws in each country and eligibility
of employees of certain subsidiaries for the annual retirement contribution. Contributions to the Company’s
non-U.S. defined contribution plans are made by both the employee and the Company. For the years ended
December 31, 2023, 2022 and 2021, the Company charged approximately $13, $3 and $4, respectively, to
expense for its contributions to these plans. For the years ended December 31, 2023, 2022 and 2021, the
Company charged an additional $3, $2 and $1, respectively, to expense related to the annual retirement
contributions to these plans.

101

WESTLAKE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(in millions of dollars, except share amounts and per share data)

Defined Benefit Plans

U.S. Plans

The Company has noncontributory defined benefit pension plans that cover certain eligible salaried and

wage employees of certain subsidiaries. However, eligibility for the Company’s plans has been frozen. Benefits
for salaried employees under these plans are based primarily on years of service and employees’ pay near
retirement. Benefits for wage employees are based upon years of service and a fixed amount as periodically
adjusted. The Company recognizes the years of service prior to the Company’s acquisition of the subsidiary’s
facilities for purposes of determining vesting, eligibility and benefit levels for certain employees of the
subsidiary and for determining vesting and eligibility for certain other employees of the subsidiary. The
measurement date for these plans is December 31.

Non-U.S. Plans

The Company has defined benefit pension plans covering current and former employees associated with

the Company’s operations. In conjunction with the Westlake Epoxy acquisition on February 1, 2022, as disclosed
in Note 2, the Company assumed certain defined benefit pension plans that are incorporated in the information
disclosed. Several non-U.S. pension plans are unfunded and have no plan assets. These pension plans are closed
to new participants. Benefits for employees for these plans are based primarily on employees’ pay near
retirement. The measurement date for the non-U.S. plans is December 31.

Details of the changes in benefit obligations, plan assets and funded status of the Company’s pension plans

are as follows:

2023

2022

U.S. Plans

Non-U.S. Plans

U.S. Plans

Non-U.S. Plans

Change in benefit obligation
Benefit obligation, beginning of year . . . . . . . . $
Benefit obligation assumed with acquisition . .
Service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Actuarial loss (gain)
. . . . . . . . . . . . . . . . . . . . .
Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . .
Settlements . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange effects . . . . . . . . . . . . . . . . . .

Benefit obligation, end of year . . . . . . . . . . . . . $

Change in plan assets
Fair value of plan assets, beginning of year . . . $
Plan assets assumed with acquisition . . . . . . . .
Actual return . . . . . . . . . . . . . . . . . . . . . . . . . . .
Employer contribution . . . . . . . . . . . . . . . . . . . .
Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . .
Administrative expenses paid . . . . . . . . . . . . . .
Settlements . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange effects . . . . . . . . . . . . . . . . . .

Fair value of plan assets, end of year . . . . . . . . $

Funded status, end of year . . . . . . . . . . . . . . . . . $

518 $
—
1
24
(7)
(42)
—
—

494 $

415 $
—
55
2
(42)
(3)
—
—

427 $

(67) $

102

530 $
—
4
19
82
(21)
(3)
18

629 $

370 $
—
19
15
(21)
—
(3)
11

391 $

673 $
—
1
14
(121)
(49)
—
—

518 $

562 $
—
(97)
2
(49)
(3)
—
—

415 $

(238) $

(103) $

152
612
3
7
(188)
(17)
(1)
(38)

530

21
538
(145)
1
(17)
—
(1)
(27)

370

(160)

WESTLAKE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(in millions of dollars, except share amounts and per share data)

The actuarial loss (gain) in the benefit obligation for the periods presented is primarily driven by discount

rate assumption changes.

Amounts recognized in the consolidated

balance sheet at December 31

Noncurrent assets . . . . . . . . . . . . . . . . . . . . . . . . $
Current liabilities . . . . . . . . . . . . . . . . . . . . . . . .
Noncurrent liabilities . . . . . . . . . . . . . . . . . . . . .

Net amount recognized . . . . . . . . . . . . . . . . . . . $

2023

2022

U.S. Plans

Non-U.S. Plans

U.S. Plans

Non-U.S. Plans

36 $
(11)
(263)

(238) $

— $
(2)
(65)

(67) $

2023

63
(9)
(214)

(160)

— $
(2)
(101)

(103) $

2022

U.S. Plans

Non-U.S. Plans

U.S. Plans

Non-U.S. Plans

Amounts recognized in accumulated other

comprehensive income (loss)

Net loss (gain) . . . . . . . . . . . . . . . . . . . . . . . . . . $
Prior service credit . . . . . . . . . . . . . . . . . . . . . . .

Total before tax (1)

. . . . . . . . . . . . . . . . . . . . . . . $

(66) $
(1)

(67) $

67 $
(4)

63 $

(30) $
(2)

(32) $

(10)
(4)

(14)

(1) After-tax totals for pension benefits were a loss of $4 and a gain of $45 for 2023 and 2022, respectively,

and are reflected in stockholders’ equity as accumulated other comprehensive income (loss).

In the U.S., the Pension Protection Act of 2006 (the “Pension Protection Act”) established a relationship

between a qualified pension plan’s funded status and the actual benefits that can be provided. Restrictions on
plan benefits and additional funding and notice requirements are imposed when a plan’s funded status is less than
certain threshold levels. For the 2023 plan year, the funded status for the Company’s U.S. pension plans are
above 80% and, as such, are exempt from the Pension Protection Act’s benefit restrictions.

Pension plans with an accumulated benefit obligation in excess of plan assets at December 31 are as

follows:

2023

2022

U.S. Plans

Non-U.S. Plans

U.S. Plans

Non-U.S. Plans

Information for pension plans with an

accumulated benefit obligation in excess of plan
assets

Projected benefit obligation . . . . . . . . . . . . . . . . . . . . $
Accumulated benefit obligation . . . . . . . . . . . . . . . .
Fair value of plan assets . . . . . . . . . . . . . . . . . . . . . .

(494) $
(494)
427

(273) $
(271)
—

(518) $
(518)
415

(223)
(221)
—

103

WESTLAKE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(in millions of dollars, except share amounts and per share data)

The following table provides the components of net periodic benefit costs, other changes in plan assets and

benefit obligation recognized in other comprehensive income.

Year Ended December 31,

2023

2022

2021

U.S.
Plans

Non-U.S.
Plans

U.S.
Plans

Non-U.S.
Plans

U.S.
Plans

Non-U.S.
Plans

. . . . . . . . . . . . . . . . . . . . . . . . . . $

Components of net periodic benefit cost
Service cost
Administrative expenses . . . . . . . . . . . . . . . .
Interest cost
. . . . . . . . . . . . . . . . . . . . . . . . . .
Expected return on plan assets . . . . . . . . . . . .
Net amortization . . . . . . . . . . . . . . . . . . . . . . .

Net periodic benefit cost (gain) . . . . . . . . . . . $

Other changes in plan assets and benefit

obligation recognized in other
comprehensive income (OCI)

Net loss (gain) emerging . . . . . . . . . . . . . . . . $
Prior service credit . . . . . . . . . . . . . . . . . . . . .
Amortization of prior service credit . . . . . . . .
Amortization of net gain (loss)
. . . . . . . . . . .
Foreign exchange effects . . . . . . . . . . . . . . . .

Total recognized in OCI . . . . . . . . . . . . . . . . . $

Total net periodic benefit cost and OCI . . . . . $

1 $
3
24
(26)
(1)

1 $

(36) $
—
1
—
—

(35) $

(34) $

4 $
—
19
(12)
(2)

9 $

74 $
—
—
2
1

77 $

86 $

1 $
3
14
(38)
—

(20) $

13 $
—
—
—
—

13 $

(7) $

3 $
—
7
(12)
1

(1) $

(31) $
—
—
(1)
(1)

(33) $

(34) $

3 $
3
11
(38)
—

(21) $

(49) $
(2)
—
—
—

(51) $

(72) $

2
—
1
(1)
3

(9)
—
—
(2)
—

(11)

(6)

The estimated prior service credit and net gain (loss) for the defined benefit plans to be amortized from

accumulated other comprehensive income (loss) into net periodic benefit cost during 2024 are expected to be $1
and $0, respectively.

The weighted-average assumptions used to determine pension plan obligations and net periodic benefit

costs for the plans are as follows:

2023

2022

2021

U.S.
Plans

Non-U.S.
Plans

U.S.
Plans

Non-U.S.
Plans

U.S.
Plans

Non-U.S.
Plans

Weighted average assumptions used
to determine benefit obligations at
December 31

Discount rate . . . . . . . . . . . . . . . . . . . . .
Rate of compensation increase . . . . . . .
Weighted average assumptions used
to determine net periodic benefit
costs for years ended December 31
Discount rate for benefit obligations . .
Discount rate for service cost . . . . . . . .
Discount rate for interest cost . . . . . . . .
Expected return on plan assets . . . . . . .
Rate of compensation increase . . . . . . .

5.0%
—%

3.2%
3.1%

4.9%
—%

3.7%
2.9%

2.6%
—%

1.4%
2.6%

4.9%
5.0%
4.8%
6.5%
—%

3.7%
3.8%
3.7%
3.3%
2.9%

2.5%
2.8%
2.1%
7.0%
—%

1.2%
1.4%
1.2%
2.6%
2.8%

2.1%
2.4%
1.5%
7.0%
—%

0.8%
0.8%
0.8%
4.0%
2.6%

104

WESTLAKE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(in millions of dollars, except share amounts and per share data)

The discount rates for the Company’s U.S. and non-U.S. plans are determined using a benchmark pension

discount curve and applying spot rates from the curve to each year of expected benefit payments to determine the
appropriate discount rate for the Company. The assumed long-term return on plan assets is estimated by
considering factors such as the plan’s overall investment strategy, current economic conditions and historical
averages.

The Company’s U.S. pension plan investments are held in the Westlake Defined Benefit Plan. The
Company’s overall investment strategy for these pension plan assets is to achieve a balance between moderate
income generation and capital appreciation. The investment strategy includes a mix of approximately 60% of
investments for long-term growth, and 40% for near-term benefit payments and liability hedging, with a
diversification of asset types. These pension funds’ investment policies target asset allocations of approximately
60% equity securities and 40% fixed income securities in order to pursue a balance between moderate income
generation, capital appreciation and a reduction in funded status volatility.

The Company’s non-U.S. pension plan investments are primarily held in three pension plans in the

Netherlands (collectively, the “Netherlands Plan”). Per the terms of the Netherlands Plan asset management
agreement between the Company and the asset manager, the Netherlands Plan’s current portfolio is strategically
weighted towards fixed income securities. The Netherlands Plan’s investment policy targets asset allocations of
approximately 20% equity securities and 80% fixed income securities. The Netherlands Plan’s investment
strategy allows for re-allocations of either of the equity or the fixed income securities from 0% up to 100%.

Equity securities primarily include investments in large-cap and small-cap companies located in the U.S.
and international developed and emerging markets stocks. Fixed income securities are comprised of investment
and non-investment grade bonds, including U.S. Treasuries and U.S. and non-U.S. corporate bonds of companies
from diversified industries. These bonds also include longer duration securities to reduce funding volatility and
reduce the asset/liability mismatch in terms of interest rate sensitivity. Fixed income funds also include
international government bonds and mortgage funds. The U.S. pension fund investment policy allows a
discretionary range in various asset classes within the asset allocation model of up to 10%. The Company does
not believe that there are significant concentrations of risk in the pension plan assets due to its strategy of asset
diversification. At December 31, 2023, plan assets did not include direct ownership of the Company’s common
stock.

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.

105

WESTLAKE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(in millions of dollars, except share amounts and per share data)

The investments in the collective trust and mutual funds are valued using a market approach based on the

net asset value of units held. The fair values of the Company’s plan assets at December 31, by asset category, are
as follows:

U.S. Plans

Non-U.S. Plans

Level 1

Level 2

Level 3

Total

Level 1

Level 2

Level 3

Total

2023

Cash and common stock:
Cash and cash

equivalents . . . . . . . . $

— $

3 $

— $

Collective investment trust

and mutual funds—Equity
securities:

Large-cap funds (1) . . . .
Small-cap funds (2) . . . .
International funds (3)
.
Collective investment trust
and mutual funds—Fixed
income:

Bond funds (4)
Short-term investment

. . . . . . .

funds . . . . . . . . . . . . .
Group insurance contract . .

Cash and common stock:
Cash and cash

47
—
70

—
—

92
8
23

138

10
—

—
—
—

—

—
—

139
8
93

177

10
—

—
—
—

—

—
—

1
—
74

303

—
—

—
—
—

—

—
10

1
—
74

303

—
10

156 $

271 $

— $

427 $

3 $

378 $

10 $

391

U.S. Plans

Non-U.S. Plans

Level 1

Level 2

Level 3

Total

Level 1

Level 2

Level 3

Total

2022

equivalents . . . . . . . . $

— $

7 $

— $

Collective investment

trust and mutual funds—
Equity securities:

Large-cap funds (1) . . . .
Small-cap funds (2) . . . .
International funds (3) . .

Collective investment trust
and mutual funds—Fixed
income:

Bond funds (4) . . . . . . . .
Short-term investment

funds . . . . . . . . . . . . .
. .

Group insurance contract

42
—
72

—
—

90
10
24

128

12
—

—
—
—

—

—
—

132
10
96

165

12
—

—
—
—

—

—
—

1
—
73

280

—
—

—
—
—

—

—
9

1
—
73

280

—
9

151 $

264 $

— $

415 $

7 $

354 $

9 $

370

(1)

Substantially all of the assets of these funds are invested in large-cap U.S. companies. The remainder of the
assets of these funds is invested in cash reserves.

106

WESTLAKE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(in millions of dollars, except share amounts and per share data)

(2)

(3)

(4)

Substantially all of the assets of these funds are invested in small-cap U.S. companies. The remainder of
the assets of these funds is invested in cash reserves.
Substantially all of the assets of the U.S. Plans’ funds are invested in international companies in developed
markets (excluding the U.S.), and the remainder of the assets of these funds is invested in cash reserves.
The assets of the non-U.S. Plans’ funds are primarily invested in diversified global equities, real estate and
private equities.
The assets of the U.S. Plans’ funds represent investment grade bonds of U.S. issuers, including U.S.
Treasury notes. The assets of the non-U.S. Plans represent fixed income funds that are primarily invested in
international government bonds and mortgage funds.

The Company’s funding policy for its U.S. plans is consistent with the minimum funding requirements of

federal law and regulations. Based on preliminary estimates, the Company expects to make contributions of
approximately $0 and $5 for the U.S. and Non-U.S. pension plans, respectively, in 2024.

Multi-employer Plans

Non-U.S. Plans

The Company participates in two multi-employer plans, Pensionskasse der Mitarbeiter der Hoechst-Gruppe
VVaG and Pensionskasse der Wacker-Chemie GmbH VVaG, which provide benefits to certain of the Company’s
employees in Germany. These multi-employer plans are closed to new participants. The plans provide fixed,
monthly retirement payments on the basis of the credits earned by the participating employees. To the extent that
the plans are underfunded, future contributions to the plans may increase and may be used to fund retirement
benefits for employees related to other employers. The benefit obligations are covered up to a certain salary
threshold by contributions made by the Company and employees to the plans. Contributions to the Company’s
multi-employer plans are expensed as incurred.