WESTLAKE CORP
For the period ended Jun 30, 2025. Filed Aug 6, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 6, 2025
WLK$63.49-4.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-02.
0001262823-25-000029
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-06.
0001262823-25-000052
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 143 previous paragraphs and 166 current paragraphs.
112 unchanged; 27 reworded; 25 added; 4 removed; 0 previous and 2 current paragraphs rearranged.
Tables are not compared: 6 previous and 6 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (25)
Current report
One Big Beautiful Bill Act
Current report
On July 4, 2025, President Trump signed into law the legislation commonly referred to as the One Big Beautiful Bill Act ("OBBBA"), which includes a broad range of tax reform provisions affecting corporations. The OBBBA, among other changes, permanently reinstates the "bonus" depreciation provisions that allow for the immediate expensing of 100% of the cost of certain qualified property acquired and placed in service after January 19, 2025, permanently reinstates the elective immediate expensing of domestic research and experimental expenditures paid or incurred in tax years beginning after December 31, 2024 (with a special transition rule that allows accelerated deduction of the remaining unamortized balance of capitalized domestic research and experimental expenditures), and permanently relaxes the limitation on the deductibility of business interest effective for tax years beginning after December 31, 2024. The OBBBA also modifies certain international tax provisions effective for tax years beginning after December 31, 2025. The Company is currently evaluating the impact of these tax law changes and will recognize the income tax effects in the consolidated financial statements beginning in the period in which the OBBBA was signed into law. At this time, we expect these tax law changes to reduce our cash tax without materially impacting our effective income tax rate.
Current report
Pernis Facilities Closure
Current report
In July 2024, the Company approved a plan to mothball the allyl chloride ("AC") and epichlorohydrin ("ECH") units at the Company's site in Pernis, the Netherlands and recognized charges of approximately $75 million related to mothballing of the AC and ECH units in the third quarter of 2024. The Company continued to operate the liquid epoxy resin ("LER") and bisphenol A ("BPA") units at the Pernis facility through June 2025. In June 2025, due to the continued deterioration of the Company's business in Europe, the Company revised the original mothballing plan and approved a plan to close and cease all the remaining operations at its Pernis facility including the LER and BPA units. In connection therewith, the Company plans to continue supplying customers from its LER and BPA production capacity at its Deer Park, Texas facility. The anticipated closure of the entire Pernis facility would take place after the conclusion of the consultations with local works councils and unions. The Company ceased the BPA unit operations in June 2025 and expects to cease the LER unit operations in the second half of 2025. In June 2025, the Company notified the affected employees at the Pernis facility of the Company's revised plan.
Current report
In addition to the previous charges related to the July 2024 mothballing, the Company recognized expected costs of $123 million in the three months ended June 30, 2025 related to the closure of the Pernis facility. The additional costs recognized consist of charges for asset retirement obligations of $76 million, other plant shutdown related costs of $19 million and employee severance and separation costs of $13 million, that are included in the restructuring, transaction and integration-related costs, and the write-down of inventory of $15 million, that is included as a component of cost of sales in the Company's consolidated statement of operations. The Company expects to recognize additional charges related to other plant shut down costs of approximately $64 million and severance and separation costs of $14 million in future periods in connection with the closure of the LER unit and other future events. The Company expects to complete the closure plan in 2030.
Current report
Suzhou Huasu Plastics PVC Resin Unit Temporary Cessation of Operations
Current report
In June 2025, the Company's 95% owned joint venture Suzhou Huasu Plastics plant located in Suzhou, Jiangsu, China temporarily ceased operations of its polyvinyl chloride ("PVC") resin unit. The decision was driven by the unit's lack of long-term economic viability. Westlake will continue to operate the PVC calendar products unit at Suzhou Huasu Plastics facility. The Company recognized expenses of $7 million in the second quarter of 2025 associated with the temporary cessation of operations of the unit.
Current report
For the six months ended June 30, 2025, Westlake Corporation incurred a net loss of $182 million, or $(1.42) per diluted share, on net sales of $5,799 million. This represents a decrease in net income attributable to Westlake Corporation of $669 million, or $5.17 per diluted share, compared to the six months ended June 30, 2024 net income attributable to Westlake Corporation of $487 million, or $3.75 per diluted share, on net sales of $6,182 million. Loss from operations was $141 million for the six months ended June 30, 2025, as compared to income of $629 million from operations for the six months ended June 30, 2024, a decrease of $770 million in income from operations. The decrease in net income and income from operations was primarily due to lower sales prices for many of our products across both segments, including PVC resin, chlorine and pipe and fittings, lower sales volumes for polyethylene, caustic soda, PVC resin and building products and higher energy and feedstock costs, as well as unplanned plant outages and planned turnarounds in the six months ended June 30, 2025. The lower sales prices and demand resulted from continuing weak global industrial and manufacturing activity. The decrease in net income and income from operations was also due to the recognition of charges of $115 million in the six months ended June 30, 2025, related to the closure of the Pernis facility located in the Netherlands and the temporary cessation of operations of the PVC resin unit at the Suzhou Huasu Plastics plant located in China, under the Performance and Essential Materials Segment. These decreases were slightly offset by higher caustic soda sales prices and higher pipe and fittings sales volumes. Net sales decreased by $383 million to $5,799 million in the six months ended June 30, 2025 from $6,182 million in the six months ended June 30, 2024, primarily due to lower sales prices for chlorine, PVC resin and pipe and fittings, and lower sales volumes for polyethylene, caustic soda, PVC resin and building products, which were partially offset by slightly higher caustic soda sales prices and pipe and fittings sales volumes.
Current report
Selling, General and Administrative Expenses. Selling, general and administrative expenses decreased by $3 million to $221 million in the second quarter of 2025 from $224 million in the second quarter of 2024. This decrease was mainly due to lower payroll and related benefit costs that were partially offset by higher technology related expenses.
Current report
Restructuring, Transaction and Integration-related Costs. Restructuring, transaction and integration-related costs were $115 million in the second quarter of 2025 compared to $4 million in the second quarter of 2024. The restructuring, transaction and integration-related costs in the second quarter of 2025 comprised of $108 million related to the closure of Pernis facility located in the Netherlands and of $7 million related to the temporary cessation of the PVC resin unit at the Suzhou Huasu Plastics plant located in China, under the Performance and Essential Materials Segment.
Current report
Income from Operations. Income from operations for the Performance and Essential Materials segment decreased by $475 million to a loss of $318 million in the second quarter of 2025 from income of $157 million in the second quarter of 2024. This decrease in income from operations in the second quarter of 2025, as compared to the second quarter of 2024 was primarily due to lower PVC resin and polyethylene sales prices, and higher natural gas and feedstock costs, as well as unplanned plant outages and planned turnarounds in the second quarter of 2025. This decrease in income from operations was also due to the recognition of charges of $115 million in the quarter ended June 30, 2025 related to the closure of Pernis facility located in the Netherlands and the temporary cessation of the PVC resin unit at the Suzhou Huasu Plastics plant located in China. These decreases were partially offset by higher sales prices for caustic soda.
Current report
Net Sales. Net sales for the Housing and Infrastructure Products segment decreased by $34 million, or 3%, to $1,160 million in the second quarter of 2025 from $1,194 million in the second quarter of 2024. Sales volumes for the Housing and Infrastructure Products segment decreased by 2% in the second quarter of 2025 as compared to the second quarter of 2024 primarily due to lower demand for our building products, partially offset by an increase in sales volumes for pipe and fittings. Average sales prices for the Housing and Infrastructure Products segment decreased by 1% in the second quarter of 2025 as compared to the second quarter of 2024, primarily due to lower sales prices for pipe and fittings.
Current report
Income from Operations. Income from operations for the Housing and Infrastructure Products segment decreased by $44 million to $222 million in the second quarter of 2025 from $266 million in the second quarter of 2024. This decrease in income from operations in the second quarter of 2025, as compared to the second quarter of 2024, was primarily due to lower sales prices and margins for pipe and fittings and lower sales volumes for our building products.
Current report
Six Months Ended June 30, 2025 Compared with Six Months Ended June 30, 2024
Current report
Net Sales. Net sales decreased by $383 million, or 6%, to $5,799 million in the six months ended June 30, 2025 from $6,182 million in the six months ended June 30, 2024. Sales volumes decreased by 5% in the six months ended June 30, 2025 as compared to the six months ended June 30, 2024, due to lower sales volumes for polyethylene, caustic soda, PVC resin and building products, which were partially offset by higher pipe and fittings sales volumes. Average sales prices for the six months ended June 30, 2025 decreased by 2% as compared to the six months ended June 30, 2024 as a result of lower sales prices for chlorine, PVC resin and pipe and fittings, which were partially offset by slightly higher caustic soda sales prices.
Current report
Gross Profit. Gross profit margin was 8% in the six months ended June 30, 2025 as compared to 18% in the six months ended June 30, 2024. The decrease in gross profit margin was primarily due to lower sales volumes and prices for most of our products across both segments and higher energy and feedstock costs, as well as unplanned plant outages and planned turnarounds in the six months ended June 30, 2025.
Current report
Restructuring, Transaction and Integration-related Costs. Restructuring, transaction and integration-related costs were $122 million in the six months ended June 30, 2025 compared to $8 million in the six months ended June 30, 2024. The costs in the six months ended June 30, 2025 primarily comprised of $108 million related to the closure of Pernis facility located in the Netherlands and $7 million related to the temporary cessation of the PVC resin unit at the Suzhou Huasu Plastics plant located in China, under the Performance and Essential Materials Segment.
Current report
Other Income, Net. Other income, net decreased by $48 million to $61 million in the six months ended June 30, 2025 from $109 million in the six months ended June 30, 2024, primarily due to lower interest income resulting from the lower average cash and cash equivalent balances and lower interest rates in the six months ended June 30, 2025 as compared to the six months ended June 30, 2024 and also due to the recognition of higher insurance recoveries in the six months ended June 30, 2024 as compared to the six months ended June 30, 2025.
Current report
Income Taxes. The effective income tax rate was (4.4)% for the six months ended June 30, 2025 as compared to 22.7% for the six months ended June 30, 2024. The effective tax rate in the six months ended June 30, 2025 was lower compared to the six months ended June 30, 2024 primarily due to an increase in the valuation allowance recorded against Westlake Epoxy Netherlands's net operating loss for which no tax benefit can be recognized, U.S. federal research and development credits available to the Company, state tax benefits and income attributable to noncontrolling interests, partially offset by an increase in reserves for uncertain tax positions and foreign taxes, and the impact of earnings mix across jurisdictions associated with the pre-tax loss for the six months ended June 30, 2025.
Current report
Performance and Essential Materials Segment
Current report
Net Sales. Net sales for the Performance and Essential Materials segment decreased by $301 million, or 8%, to $3,643 million in the six months ended June 30, 2025 from $3,944 million in the six months ended June 30, 2024. Average sales prices for the Performance and Essential Materials segment decreased by 1% in the six months ended June 30, 2025 as compared to the six months ended June 30, 2024. Sales volumes for the Performance and Essential Materials segment decreased by 6% in the six months ended June 30, 2025 as compared to the six months ended June 30, 2024, primarily due to lower polyethylene, caustic soda and PVC resin sales volumes. Lower Performance Materials sales prices were primarily due to lower PVC resin sales prices. Lower Essential Materials sales prices for chlorine was offset by higher caustic soda sales prices.
Current report
Housing and Infrastructure Products Segment
Current report
Net Sales. Net sales for the Housing and Infrastructure Products segment decreased by $82 million, or 4%, to $2,156 million in the six months ended June 30, 2025 from $2,238 million in the six months ended June 30, 2024. Average sales prices for the Housing and Infrastructure Products segment decreased by 2% in the six months ended June 30, 2025 as compared to the six months ended June 30, 2024, primarily due to lower sales prices for pipe and fittings. Sales volumes for the Housing and Infrastructure Products segment decreased by 2% in the six months ended June 30, 2025 as compared to the six months ended June 30, 2024 primarily due to lower prices for our building products, partially offset by higher pipe and fittings sales volumes.
Current report
Income from Operations. Income from operations for the Housing and Infrastructure Products segment decreased by $106 million to an income of $370 million in the six months ended June 30, 2025 from income of $476 million in the six months ended June 30, 2024. This decrease in income from operations in the six months ended June 30, 2025, as compared to the six months ended June 30, 2024, was primarily due to lower sales volumes, particularly for building products, and lower sales prices for pipe and fittings, partially offset by higher pipe and fittings sales volumes.
Current report
•results of the closure of the Pernis, Netherlands facility and temporary cessation of operations of the PVC resin unit at the Suzhou Huasu Plastics plant located in China (such as timing and amount of recognition of related costs and our expectations regarding our financial performance following such closure and temporary cessation).
Removed paragraphs (4)
Previous report
Restructuring, Transaction and Integration-related Costs. Restructuring, transaction and integration-related costs were $7 million in the first quarter of 2025 compared to $4 million in the first quarter of 2024. The first quarter of 2025 and 2024 costs primarily represent mothballing and plant closure related costs.
Previous report
Net Sales. Net sales for the Housing and Infrastructure Products segment decreased by $48 million, or 5%, to $996 million in the first quarter of 2025 from $1,044 million in the first quarter of 2024. Average sales prices for the Housing and Infrastructure Products segment decreased by 3% in the first quarter of 2025 as compared to the first quarter of 2024, primarily due to lower sales prices for pipe and fittings and siding and trim. Sales volumes for the Housing and Infrastructure Products segment decreased by 2% in the first quarter of 2025 as compared to the first quarter of 2024 primarily due to lower demand for pipe and fittings and siding and trim.
Previous report
Income from Operations. Income from operations for the Housing and Infrastructure Products segment decreased by $62 million to $148 million in the first quarter of 2025 from $210 million in the first quarter of 2024. This decrease in income from operations in the first quarter of 2025, as compared to the first quarter of 2024, was primarily due to lower sales price and margins, due to an unfavorable shift in sales mix, and lower sales volume, particularly in pipe and fittings, partly due to winter storms early in the quarter.
Previous report
•results of mothballing of the AC and ECH Units (such as timing and amount of recognition of related costs, expectation of improvement of the financial performance of our Pernis, Netherlands site).
Reworded paragraphs (27)
Previous wording
In April 2025, the U.S. government announced a baseline tariff of 10% on products imported from all countries and an additional individualized reciprocal tariff on the countries with which the United States has the largest trade deficits, including China. Increased tariffs by the United States have led and may continue to lead to the imposition of retaliatory tariffs by foreign jurisdictions. Additionally, the U.S. government has announced and rescinded multiple tariffs on several foreign jurisdictions, which has increased uncertainty regarding the ultimate effect of the tariffs on economic conditions. Current uncertainties about tariffs and their effects on trading relationships may affect the costs for and availability of raw materials or contribute to inflation in the markets in which we operate. Although we are continuing to monitor the economic effects of such announcements, as well as opportunities to mitigate their related impacts, costs and other effects associated with the tariffs remain uncertain.
Current wording
In 2025, the U.S. government has threatened and announced the imposition of new and expanded tariffs on products imported from other countries, with an emphasis on the countries with which the United States has the largest trade deficits, including China. Increased tariffs by the United States have led and may continue to lead to the imposition of retaliatory tariffs by foreign jurisdictions. Additionally, the U.S. government has announced and modified, delayed or rescinded multiple tariffs on several foreign jurisdictions, which has increased uncertainty regarding the ultimate effect of the tariffs on economic conditions. Current uncertainties about tariffs and their effects on trading relationships may affect the costs for and availability of raw materials or contribute to inflation in the markets in which we operate. Although we are continuing to monitor the economic effects of such announcements, as well as opportunities to mitigate their related impacts, costs and other effects associated with the tariffs remain uncertain.
Previous wording
In April 2024, the U.S. Epoxy Resin Producers Ad Hoc Coalition (the "Coalition"), of which we are a member, filed petitions with the U.S. Department of Commerce and the U.S. International Trade Commission requesting the initiation of antidumping investigations regarding imports of certain epoxy resins from China, India, South Korea, Taiwan, and Thailand and countervailing duty investigations regarding imports of the same products from China, India, South Korea, and Taiwan. The U.S. Department of Commerce made its final determinations in March 2025. The U.S. International Trade Commission concluded its investigation in April 2025. In May 2025, the U.S. Department of Commerce is expected to impose antidumping and countervailing duty orders on imports of epoxy resins from South Korea and Taiwan and an antidumping order on imports of epoxy resins from Thailand.
Current wording
In April 2024, the U.S. Epoxy Resin Producers Ad Hoc Coalition (the "Coalition"), of which we are a member, filed petitions with the U.S. Department of Commerce and the U.S. International Trade Commission requesting the initiation of antidumping investigations regarding imports of certain epoxy resins from China, India, South Korea, Taiwan, and Thailand and countervailing duty investigations regarding imports of the same products from China, India, South Korea, and Taiwan. The U.S. Department of Commerce made its final determinations in March 2025. The U.S. International Trade Commission concluded its investigation in April 2025. In May 2025, the U.S. Department of Commerce imposed antidumping and countervailing duty orders on imports of epoxy resins from South Korea and Taiwan and an antidumping order on imports of epoxy resins from Thailand.
Previous wording
In June 2024, the Coalition confidentially lodged an antidumping complaint with the European Commission requesting the initiation of an antidumping investigation concerning imports of epoxy resins into the European Union market originating in China, South Korea, Taiwan and Thailand. In July 2024, the European Commission published in the EU Official Journal a notice initiating an antidumping investigation concerning imports of epoxy resins originating in China, South Korea, Taiwan, and Thailand. In October 2024, the European Commission published a regulation requiring registration of imports subject to the investigation. The European Commission imposed provisional duties in late February 2025 and is expected to conclude the investigation by late August 2025.
Current wording
In June 2024, the Coalition confidentially lodged an antidumping complaint with the European Commission requesting the initiation of an antidumping investigation concerning imports of epoxy resins into the European Union market originating in China, South Korea, Taiwan and Thailand. In July 2024, the European Commission published in the EU Official Journal a notice initiating an antidumping investigation concerning imports of epoxy resins originating in China, South Korea, Taiwan, and Thailand. In October 2024, the European Commission published a regulation requiring registration of imports subject to the investigation. The European Commission imposed provisional duties in late February 2025 on imports of epoxy resins from China, Taiwan, and Thailand and is expected to conclude the investigation by late August 2025.
Previous wording
Our Housing and Infrastructure Products segment is primarily comprised of residential building products, PVC pipes and fittings and PVC compound products. Our sales are affected by new home constructions and home repair and remodeling as well as the 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. Since the beginning of 2024, with the stabilization of interest rates and the possibility of further interest rate cuts by the U.S. Federal Reserve in the near term, we have seen improvement in the demand for housing products. 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 that has resulted in an undersupply of existing housing may have a favorable long-term impact on our Housing and Infrastructure Products segment, the current inflationary environment impacting consumer spending and priorities and decade-high mortgage interest rates impacting consumer affordability 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.
Current wording
Our Housing and Infrastructure Products segment is primarily comprised of residential building products, PVC pipes and fittings and PVC compound products. Our sales are affected by new home constructions and home repair and remodeling as well as the 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. Since the beginning of 2024, with the stabilization of interest rates and the possibility of interest rate cuts by the U.S. Federal Reserve in the near term, we have seen improvement in the demand for housing products. 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 that has resulted in an undersupply of existing housing may have a favorable long-term impact on our Housing and Infrastructure Products segment, the current inflationary environment impacting consumer spending and priorities and decade-high mortgage interest rates impacting consumer affordability 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.
Previous wording
The table below and descriptions that follow represent the consolidated results of operations of the Company for thethree months ended March 31, 2025 and 2024.
Current wording
The table below and descriptions that follow represent the consolidated results of operations of the Company for the three andsix months ended June 30, 2025 and 2024.
Previous wording
For the quarter ended March 31, 2025, Westlake Corporation incurred a net loss of $40 million, or $(0.31) per diluted share, on net sales of $2,846 million. This represents a decrease in net income attributable to Westlake Corporation of $214 million, or $1.65 per diluted share, compared to the quarter ended March 31, 2024 net income attributable to Westlake Corporation of $174 million, or $1.34 per diluted share, on net sales of $2,975 million. Loss from operations was $32 million for the quarter ended March 31, 2025, as compared to income of $223 million for the quarter ended March 31, 2024, a decrease of $255 million in income from operations. The decrease in net income and income from operations was primarily due to lower sales prices for many of our products across both segments, including PVC resin, chlorine and pipe and fittings, lower sales volumes for polyethylene and PVC resin and higher energy and feedstock costs. The lower sales prices and demand resulted from weak global industrial and manufacturing activity. These decreases were slightly offset by higher caustic soda sales volumes. Net sales decreased by $129 million to $2,846 million in the quarter ended March 31, 2025 from $2,975 million in the quarter ended March 31, 2024, primarily due to lower sales prices for PVC resin, chlorine and pipe and fittings and lower sales volumes for polyethylene and PVC resin, which were partially offset by higher caustic soda volumes.
Current wording
For the quarter ended June 30, 2025, Westlake Corporation incurred a net loss of $142 million, or $(1.11) per diluted share, on net sales of $2,953 million. This represents a decrease in net income attributable to Westlake Corporation of $455 million, or $3.51 per diluted share, compared to the quarter ended June 30, 2024 net income attributable to Westlake Corporation of $313 million, or $2.40 per diluted share, on net sales of $3,207 million. Loss from operations was $109 million for the quarter ended June 30, 2025, as compared to income from operations of $406 million for the quarter ended June 30, 2024, a decrease of $515 million. The decrease in net income and income from operations was primarily due to lower sales prices for many of our products across both segments, including PVC resin and pipe and fittings, lower sales volumes for polyethylene, chlorine, caustic soda, PVC resin, and building products, and higher energy and feedstock costs, as well as unplanned plant outages and planned turnarounds in the second quarter of 2025. The lower sales prices and demand resulted from continuing weak global industrial and manufacturing activity. The decrease in net income and income from operations was also due to the recognition of charges of $115 million in the quarter ended June 30, 2025, related to the closure of the Pernis facility located in the Netherlands and the temporary cessation of operations of the PVC resin unit at the Suzhou Huasu Plastics plant located in China, under the Performance and Essential Materials Segment. These decreases were slightly offset by higher caustic soda sales prices and higher pipe and fittings sales volumes. Net sales decreased by $254 million to $2,953 million in the quarter ended June 30, 2025 from $3,207 million in the quarter ended June 30, 2024, primarily due to lower sales prices for PVC resin and pipe and fittings and lower sales volumes for polyethylene, chlorine, caustic soda, PVC resin and building products, which were partially offset by higher caustic soda sales prices and higher pipe and fittings sales volumes.
Previous wording
First Quarter 2025 Compared with First Quarter 2024
Current wording
Second Quarter 2025 Compared with Second Quarter 2024
Previous wording
Net Sales. Net sales decreased by $129 million, or 4%, to $2,846 million in the first quarter of 2025 from $2,975 million in the first quarter of 2024. Average sales prices for the first quarter of 2025 decreased by 2% as compared to the first quarter of 2024 as a result of lower sales prices for many of our products across both segments, including PVC resin, chlorine and pipe and fittings. Sales volumes decreased by 2% in the first quarter of 2025 as compared to the first quarter of 2024, due to lower sales volumes for polyethylene and PVC resin, which were partially offset by higher caustic soda volumes.
Current wording
Net Sales. Net sales decreased by $254 million, or 8%, to $2,953 million in the second quarter of 2025 from $3,207 million in the second quarter of 2024. Sales volumes decreased by 7% in the second quarter of 2025 as compared to the second quarter of 2024, due to lower sales volumes for polyethylene, chlorine, caustic soda, PVC resin and building products, which were partially offset by higher pipe and fittings sales volumes. Average sales prices for the second quarter of 2025 decreased by 1% as compared to the second quarter of 2024 as a result of lower sales prices for many of our products across both segments, including PVC resin and pipe and fittings, which were partially offset by higher caustic soda sales prices.
Previous wording
Gross Profit. Gross profit margin was 8% in the first quarter of 2025 as compared to 16% in the first quarter of 2024. The decrease in gross profit margin was primarily due to lower sales prices for most of our products across both segments and higher energy and feedstock costs.
Current wording
Gross Profit. Gross profit margin was 9% in the second quarter of 2025 as compared to 21% in the second quarter of 2024. The decrease in gross profit margin was primarily due to lower sales volumes and prices for most of our major products across both segments and higher energy and feedstock costs, as well as unplanned plant outages and planned turnarounds in the second quarter of 2025.
Previous wording
Amortization of Intangibles. Amortization expense in the first quarter of 2025 was consistent with the first quarter of 2024.
Current wording
Amortization of Intangibles. Amortization expense in the second quarter of 2025 was consistent with the second quarter of 2024.
Previous wording
Interest Expense. Interest expense in the first quarter of 2025 was comparable to the first quarter of 2024.
Current wording
Interest Expense. Interest expense in the second quarter of 2025 was comparable to the second quarter of 2024.
Previous wording
Other Income, Net. Other income, net decreased by $13 million to $37 million in the first quarter of 2025 from $50 million in the first quarter of 2024, primarily due to lower interest income resulting from the lower average cash and cash equivalent balances and lower interest rates in the first quarter of 2025 as compared to the first quarter of 2024.
Current wording
Other Income, Net. Other income, net decreased by $35 million to $24 million in the second quarter of 2025 from $59 million in the second quarter of 2024, primarily due to lower interest income resulting from the lower average cash and cash equivalent balances and lower interest rates in the second quarter of 2025 as compared to the second quarter of 2024 and also due to the recognition of higher insurance recovery in the second quarter of 2024 as compared to the second quarter of 2025.
Previous wording
Income Taxes. The effective income tax rate was (2.9)% for the first quarter of 2025 as compared to 20.6% for the first quarter of 2024. The effective tax rate in the first quarter of 2025 was lower compared to the first quarter of 2024 primarily due to an increase in the valuation allowance recorded against Westlake Epoxy Netherlands's net operating loss for which no tax benefit can be recognized associated with the pre-tax loss in the first quarter of 2025.
Current wording
Income Taxes. The effective income tax rate was (4.8)% for the second quarter of 2025 as compared to 23.8% for the second quarter of 2024. The effective tax rate in the second quarter of 2025 was lower compared to the second quarter of 2024 primarily due to an increase in the valuation allowance recorded against Westlake Epoxy Netherlands's net operating loss for which no tax benefit can be recognized, U.S. federal research and development credits available to the Company, state tax benefits and income attributable to noncontrolling interests, partially offset by an increase in reserves for uncertain tax positions and foreign taxes and the impact of earnings mix across jurisdictions associated with the pre-tax loss in the second quarter of 2025.
Previous wording
Net Sales. Net sales for the Performance and Essential Materials segment decreased by $81 million, or 4%, to $1,850 million in the first quarter of 2025 from $1,931 million in the first quarter of 2024. Average sales prices for the Performance and Essential Materials segment decreased by 2% in the first quarter of 2025 as compared to the first quarter of 2024. Lower Performance Materials sales prices were primarily due to lower PVC resin and epoxy resin sales prices. Lower Essential Materials sales prices were primarily due to lower chlorine sales prices. Sales volumes for the Performance and Essential Materials segment decreased by 2% in the first quarter of 2025 as compared to the first quarter of 2024, primarily due to lower PVC resin and polyethylene sales volumes.
Current wording
Net Sales. Net sales for the Performance and Essential Materials segment decreased by $220 million, or 11%, to $1,793 million in the second quarter of 2025 from $2,013 million in the second quarter of 2024. Sales volumes for the Performance and Essential Materials segment decreased by 9% in the second quarter of 2025 as compared to the second quarter of 2024, primarily due to lower polyethylene, chlorine, caustic soda and PVC resin sales volumes. Average sales prices for the Performance and Essential Materials segment decreased by 2% in the second quarter of 2025 as compared to the second quarter of 2024. Lower Performance Materials sales prices were primarily due to lower PVC resin and polyethylene sales prices, partially offset by slightly higher Essential Materials sales prices driven by caustic soda.
Previous wording
Selling, General and Administrative Expenses. Selling, general and administrative expenses increased by $18 million to $227 million in the first quarter of 2025 from $209 million in the first quarter of 2024. This increase was mainly due to higher allowance for credit losses, legal and other consulting costs, and technology related expenses.
Current wording
Selling, General and Administrative Expenses. Selling, general and administrative expenses increased by $15 million to $448 million in the six months ended June 30, 2025 from $433 million in the six months ended June 30, 2024. This increase was mainly due to higher legal and other consulting costs and higher technology related expenses, partially offset by lower payroll and related benefit costs.
Previous wording
Income from Operations. Income from operations for the Performance and Essential Materials segment decreased by $185 million to a loss of $163 million in the first quarter of 2025 from income of $22 million in the first quarter of 2024. This decrease in income from operations in the first quarter of 2025, as compared to the first quarter of 2024, was primarily due to lower sales prices for most of our major products in this segment, particularly PVC resin, chlorine and epoxy resin, lower sales volumes for PVC resin and polyethylene, impact of Petro 1 turnaround activities and higher North American natural gas and feedstock costs, driven in part by winter storms early in the quarter. These decreases were partially offset by higher sales volumes for caustic soda.
Current wording
Income from Operations. Income from operations for the Performance and Essential Materials segment decreased by $660 million to a loss of $481 million in the six months ended June 30, 2025 from income of $179 million in the six months ended June 30, 2024. This decrease in income from operations in the six months ended June 30, 2025, as compared to the six months ended June 30, 2024, was primarily due to lower sales prices for most of our major products in this segment, particularly chlorine and PVC resin, lower sales volumes for polyethylene, caustic soda and PVC resin, the impact of Petro 1 and other planned turnaround activities and unplanned outages in the six months ended June 30, 2025, and higher natural gas and feedstock costs. This decrease in income from operations was also due to the recognition of charges of $115 million in the quarter ended June 30, 2025 related to the closure of Pernis facility located in the Netherlands and the temporary cessation of the PVC resin unit at the Suzhou Huasu Plastics plant located in China. These decreases were partially offset by higher sales prices for caustic soda.
Previous wording
CASH FLOW DISCUSSION FOR THE THREE MONTHS ENDED MARCH 31, 2025 AND 2024
Current wording
CASH FLOW DISCUSSION FOR THE SIX MONTHS ENDED JUNE 30, 2025 AND 2024
Previous wording
Operating activities used cash of $77 million in the first three months of 2025 compared to cash provided by operating activities of $169 million in the first three months of 2024. The $246 million decrease in cash flows from operating activities was mainly due to lower prices and demand for most of our products, cash used in connection with the turnaround of Petro 1 ethylene facility in Lake Charles and a favorable change in working capital in the three months ended March 31, 2025. Changes in components of working capital, which we define for purposes of this cash flow discussion as accounts receivable, inventories, prepaid expenses and other current assets, less accounts payable and accrued and other liabilities, used cash of $135 million in the first three months of 2025, compared to $177 million of cash used in the first three months of 2024, a favorable change of $42 million. The favorable change in the first three months of 2025 was substantially driven by the higher accounts payable and accrued and other liabilities due to the impact of the Petro 1 turnaround activities and the timing of related payments in the first three months of 2025 and also due to higher feedstock and energy purchase costs during the three months ended March 31, 2025.
Current wording
Operating activities provided cash of $58 million in the first six months of 2025 compared to cash provided by operating activities of $406 million in the first six months of 2024. The $348 million decrease in cash flows from operating activities was mainly due to lower prices and demand for most of our products and cash used in connection with the turnaround of the Petro 1 ethylene facility in Lake Charles, partially offset by a favorable change in working capital in the six months ended June 30, 2025. Changes in components of working capital, which we define for purposes of this cash flow discussion as accounts receivable, inventories, prepaid expenses and other current assets, less accounts payable and accrued and other liabilities, used cash of $141 million in the first six months of 2025, compared to $453 million of cash used in the first six months of 2024, a favorable change of $312 million. The favorable change in the first six months of 2025 was substantially driven by the higher accounts payable and accrued and other liabilities which were due to the accrual of Pernis facility closure costs, and higher feedstock and energy costs during the six months ended June 30, 2025.
Previous wording
Net cash used for investing activities in the first three months of 2025 was $434 million as compared to net cash used for investing activities of $272 million in the first three months of 2024. The increase in cash used for investing activities in the first three months of 2025 as compared to the first three months of 2024 was primarily related to the 2025 purchase of $183 million of investments comprising corporate bonds and U.S. government debt securities, among others. Capital expenditures were $248 million in the first three months of 2025 as compared to $272 million in the first three months of 2024. Capital expenditures in the first three months of 2025 and 2024 were primarily related to projects to increase production capacity or reduce costs, maintenance and safety projects and environmental projects at our various facilities.
Current wording
Net cash used for investing activities in the first six months of 2025 was $726 million as compared to net cash used for investing activities of $495 million in the first six months of 2024. The increase in cash used for investing activities in the first six months of 2025 as compared to the first six months of 2024 was primarily related to the purchase of $192 million of investments comprising corporate bonds and U.S. government debt securities, among others. Capital expenditures were $515 million in the first six months of 2025 as compared to $503 million in the first six months of 2024. Capital expenditures in the first six months of 2025 and 2024 were primarily related to projects to increase production capacity or reduce costs, maintenance and safety projects and environmental projects at our various facilities.
Previous wording
Net cash used for financing activities during the first three months of 2025 was $115 million as compared to net cash used for financing activities of $74 million in the first three months of 2024. The financing activities during the first three months of 2025 included the payment of $68 million of cash dividends, the repurchase of $30 million of our outstanding common stock for treasury and $10 million of cash distributions to noncontrolling interests. The financing activities in the first three months of 2024 included the payment of $65 million of cash dividends and $10 million of cash distributions to noncontrolling interests.
Current wording
Net cash used for financing activities during the first six months of 2025 was $197 million as compared to net cash used for financing activities of $146 million in the first six months of 2024. The financing activities during the first six months of 2025 included the payment of $136 million of cash dividends, the repurchase of $30 million of our outstanding common stock for treasury and $23 million of cash distributions to noncontrolling interests. The financing activities in the first six months of 2024 included the payment of $130 million of cash dividends and $21 million of cash distributions to noncontrolling interests.
Previous wording
In November 2014, our Board of Directors authorized a $250 million stock repurchase program (the "2014 Program"). In November 2015, our Board of Directors approved the expansion of the 2014 Program by an additional $150 million. In August 2018, our Board of Directors approved the further expansion of the existing 2014 Program by an additional $150 million. In August 2022, our Board of Directors approved the further expansion of the existing 2014 Program by an additional $500 million. During the three months ended March 31, 2025, we repurchased 279,771 shares of common stock for an aggregate purchase price of $30 million under the 2014 Program. As of March 31, 2025, we had repurchased 9,482,402 shares of our common stock for an aggregate purchase price of approximately $664 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.
Current wording
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. There were no repurchases of common stock under the 2014 Program during the three months ended June 30, 2025. As of June 30, 2025, we had repurchased 9,482,402 shares of our common stock for an aggregate purchase price of approximately $664 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.
Previous wording
As of March 31, 2025, our cash and cash equivalents totaled $2,297 million.
Current wording
As of June 30, 2025, our cash and cash equivalents totaled $2,085 million.
Previous wording
As of March 31, 2025, our available-for-sale securities totaled $183 million. See Note 2 to the unaudited consolidated financial statements appearing elsewhere in this Form 10-Q for a discussion of our available-for-sale securities.
Current wording
As of June 30, 2025, our available-for-sale securities totaled $192 million. See Note 2 to the unaudited consolidated financial statements appearing elsewhere in this Form 10-Q for a discussion of our available-for-sale securities.
Previous wording
As of March 31, 2025, the carrying value of our indebtedness totaled $4,592 million. See Note 7 to the unaudited consolidated financial statements appearing elsewhere in this Form 10-Q for a discussion of our long-term indebtedness.
Current wording
As of June 30, 2025, the carrying value of our indebtedness totaled $4,657 million. See Note 7 to the unaudited consolidated financial statements appearing elsewhere in this Form 10-Q for a discussion of our long-term indebtedness.
Previous wording
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.
Current wording
Our ability to make payments on our indebtedness and to fund planned capital expenditure 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. In order to reduce future cash interest payments, as well as future amounts due at maturity or upon redemption, we or our affiliates may from time to time seek to redeem, repurchase or otherwise acquire our outstanding debt securities through open market purchases, privately negotiated transactions, tender offers or pursuant to the terms of such securities. Such acquisitions, if any, will be upon such terms and at such prices as we may determine, and will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved in any such transactions, individually or in the aggregate, may be material.
Previous wording
(6) 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 March 31, 2025 was 3.00%.
Current wording
(6) 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 June 30, 2025 was 1.95%.
Previous wording
•operating interruptions (including leaks, explosions, fires, weather-related incidents, mechanical failure, unscheduled downtime, labor difficulties, transportation interruptions, spills and releases and other environmental risks);
Current wording
•operating interruptions (including leaks, explosions, fires, weather-related incidents, mechanical failure, unscheduled downtime, delays in turnaround activities, labor difficulties, transportation interruptions, spills and releases and other environmental risks);
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
Amortization of Intangibles. Amortization expense in the six months ended June 30, 2025 was consistent with the six months ended June 30, 2024.
Current report — wording carried from elsewhere
Interest Expense. Interest expense in the six months ended June 30, 2025 was comparable to the six months ended June 30, 2024.