wlk-20210331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended	March 31, 2021


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

Commission File No. 001-32260

Westlake Chemical Corporation

(Exact name of Registrant as specified in its charter)


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

2801 Post Oak Boulevard, Suite 600

Houston, Texas 77056

(Address of principal executive offices, including zip code)

(713) 960-9111

(Registrant's telephone number, including area code)

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


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

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

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

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

Large accelerated filer

Accelerated filer

☐

Non-accelerated filer

Smaller reporting company

☐

Emerging growth company

☐

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

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

The number of shares outstanding of the registrant's sole class of common stock as of April 28, 2021 was 128,132,613.

Table of Contents

TABLE OF CONTENTS



Item			Page
PART I. FINANCIAL INFORMATION
1) Financial Statements			1
2) Management's Discussion and Analysis of Financial Condition and Results of Operations			19
3) Quantitative and Qualitative Disclosures about Market Risk			32
4) Controls and Procedures			34

PART II. OTHER INFORMATION
1) Legal Proceedings			34
1A) Risk Factors			35
2) Unregistered Sales of Equity Securities and Use of Proceeds			35
6) Exhibits			36

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

WESTLAKE CHEMICAL CORPORATION

CONSOLIDATED BALANCE SHEETS

(Unaudited)


	March 31, 2021		December 31, 2020

	(in millions of dollars, except par values and share amounts)
ASSETS
Current assets
Cash and cash equivalents	$	1,393	$	1,313
Accounts receivable, net	1,327		1,214
Inventories	955		918
Prepaid expenses and other current assets	59		32
Total current assets	3,734		3,477
Property, plant and equipment, net	6,921		6,920
Operating lease right-of-use assets	467		461
Goodwill	1,082		1,083
Customer relationships, net	419		444
Other intangible assets, net	160		168
Equity method investments	1,029		1,059
Other assets, net	238		223
Total assets	$	14,050	$	13,835
LIABILITIES AND EQUITY
Current liabilities
Accounts payable	$	603	$	536
Accrued and other liabilities	723		821
Total current liabilities	1,326		1,357
Long-term debt, net	3,547		3,566
Deferred income taxes	1,385		1,368
Pension and other post-retirement benefits	378		391
Operating lease liabilities	383		376
Other liabilities	206		199
Total liabilities	7,225		7,257
Commitments and contingencies (Note 13)
Stockholders' equity
Preferred stock, $0.01 par value, 50,000,000 shares authorized; no shares issued and outstanding	—		—
Common stock, $0.01 par value, 300,000,000 shares authorized; 134,651,380 and 134,651,380 shares issued at March 31, 2021 and December 31, 2020, respectively	1		1
Common stock, held in treasury, at cost; 6,520,062 and 6,821,174 shares at March 31, 2021 and December 31, 2020, respectively	(379)		(401)
Additional paid-in capital	564		569
Retained earnings	6,145		5,938
Accumulated other comprehensive loss	(70)		(64)
Total Westlake Chemical Corporation stockholders' equity	6,261		6,043
Noncontrolling interests	564		535
Total equity	6,825		6,578
Total liabilities and equity	$	14,050	$	13,835

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

Table of Contents

WESTLAKE CHEMICAL CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)


	Three Months Ended March 31,
		2021		2020

		(in millions of dollars, except per share data and share amounts)
Net sales		$	2,357	$	1,932
Cost of sales		1,848		1,649
Gross profit		509		283
Selling, general and administrative expenses		136		120
Amortization of intangibles		27		27

Income from operations		346		136
Other income (expense)
Interest expense		(33)		(31)
Other income, net		12		11
Income before income taxes		325		116
Provision for (benefit from) income taxes		72		(41)
Net income		253		157
Net income attributable to noncontrolling interests		11		12
Net income attributable to Westlake Chemical Corporation		$	242	$	145
Earnings per common share attributable to Westlake Chemical Corporation:
Basic		$	1.88	$	1.13
Diluted		$	1.87	$	1.13
Weighted average common shares outstanding:
Basic		127,955,532		128,237,364
Diluted		128,483,373		128,442,972

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

Table of Contents

WESTLAKE CHEMICAL CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


	Three Months Ended March 31,
		2021		2020

		(in millions of dollars)
Net income		$	253	$	157
Other comprehensive income (loss), net of income taxes



Foreign currency translation adjustments
Foreign currency translation		3		(25)
Income tax provision on foreign currency translation		(10)		(7)
Other comprehensive loss, net of income taxes		(7)		(32)
Comprehensive income		246		125
Comprehensive income attributable to noncontrolling interests, net of tax of $0 and $1 for the three months ended March 31, 2021 and 2020, respectively		10		12
Comprehensive income attributable to Westlake Chemical Corporation		$	236	$	113

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

Table of Contents

WESTLAKE CHEMICAL CORPORATION

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

(Unaudited)

Common Stock

Common Stock, Held in Treasury

Number of Shares

Amount

Number of Shares

At Cost

SEC Form 10-Q filed by Westlake Chemical Corporation