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x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
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For the quarterly period ended September 30, 2016
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the Transition Period from to
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Delaware
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76-0346924
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification Number)
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Large accelerated filer
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x
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Accelerated filer
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¨
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Non-accelerated filer
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¨
(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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Item
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Page
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September 30,
2016 |
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December 31,
2015 |
||||
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|
|
||||
|
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(in thousands of dollars, except
par values and share amounts)
|
||||||
ASSETS
|
|
|
|
|
||||
Current assets
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
380,519
|
|
|
$
|
662,525
|
|
Marketable securities
|
|
—
|
|
|
520,144
|
|
||
Accounts receivable, net
|
|
1,070,501
|
|
|
508,532
|
|
||
Inventories
|
|
744,536
|
|
|
434,060
|
|
||
Prepaid expenses and other current assets
|
|
54,868
|
|
|
14,489
|
|
||
Restricted cash
|
|
169,320
|
|
|
—
|
|
||
Deferred income taxes
|
|
—
|
|
|
35,439
|
|
||
Total current assets
|
|
2,419,744
|
|
|
2,175,189
|
|
||
Property, plant and equipment, net
|
|
6,450,947
|
|
|
3,004,067
|
|
||
Other assets, net
|
|
|
|
|
||||
Goodwill
|
|
925,700
|
|
|
62,016
|
|
||
Customer relationships
|
|
604,551
|
|
|
52,677
|
|
||
Other intangible assets, net
|
|
185,651
|
|
|
98,711
|
|
||
Deferred charges and other assets, net
|
|
310,456
|
|
|
176,625
|
|
||
Total other assets, net
|
|
2,026,358
|
|
|
390,029
|
|
||
Total assets
|
|
$
|
10,897,049
|
|
|
$
|
5,569,285
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
||||
Current liabilities
|
|
|
|
|
||||
Accounts and notes payable
|
|
$
|
503,388
|
|
|
$
|
235,329
|
|
Accrued liabilities
|
|
552,581
|
|
|
287,313
|
|
||
Term loan
|
|
148,681
|
|
|
—
|
|
||
Total current liabilities
|
|
1,204,650
|
|
|
522,642
|
|
||
Long-term debt, net
|
|
3,680,585
|
|
|
758,148
|
|
||
Deferred income taxes
|
|
1,607,084
|
|
|
575,603
|
|
||
Pension and other post-retirement benefits
|
|
434,067
|
|
|
122,821
|
|
||
Other liabilities
|
|
146,526
|
|
|
28,140
|
|
||
Total liabilities
|
|
7,072,912
|
|
|
2,007,354
|
|
||
Commitments and contingencies (Notes 10 and 20)
|
|
|
|
|
|
|
||
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 134,663,244 shares issued at September 30, 2016 and December 31, 2015, respectively |
|
1,347
|
|
|
1,347
|
|
||
Common stock, held in treasury, at cost; 5,752,377 and 4,444,898 shares
at September 30, 2016 and December 31, 2015, respectively |
|
(319,980
|
)
|
|
(258,312
|
)
|
||
Additional paid-in capital
|
|
546,519
|
|
|
542,148
|
|
||
Retained earnings
|
|
3,337,968
|
|
|
3,109,987
|
|
||
Accumulated other comprehensive loss
|
|
(108,126
|
)
|
|
(129,292
|
)
|
||
Total Westlake Chemical Corporation stockholders' equity
|
|
3,457,728
|
|
|
3,265,878
|
|
||
Noncontrolling interests
|
|
366,409
|
|
|
296,053
|
|
||
Total equity
|
|
3,824,137
|
|
|
3,561,931
|
|
||
Total liabilities and equity
|
|
$
|
10,897,049
|
|
|
$
|
5,569,285
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
(in thousands of dollars, except per share data and share amounts)
|
||||||||||||||
Net sales
|
|
$
|
1,279,028
|
|
|
$
|
1,188,037
|
|
|
$
|
3,340,276
|
|
|
$
|
3,476,570
|
|
Cost of sales
|
|
1,076,895
|
|
|
876,761
|
|
|
2,641,192
|
|
|
2,527,567
|
|
||||
Gross profit
|
|
202,133
|
|
|
311,276
|
|
|
699,084
|
|
|
949,003
|
|
||||
Selling, general and administrative expenses
|
|
72,729
|
|
|
57,248
|
|
|
179,757
|
|
|
170,321
|
|
||||
Transaction and integration-related costs
|
|
82,841
|
|
|
—
|
|
|
90,550
|
|
|
—
|
|
||||
Income from operations
|
|
46,563
|
|
|
254,028
|
|
|
428,777
|
|
|
778,682
|
|
||||
Other income (expense)
|
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
|
(24,366
|
)
|
|
(8,211
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)
|
|
(36,966
|
)
|
|
(26,760
|
)
|
||||
Other income, net
|
|
41,265
|
|
|
2,636
|
|
|
52,091
|
|
|
33,790
|
|
||||
Income before income taxes
|
|
63,462
|
|
|
248,453
|
|
|
443,902
|
|
|
785,712
|
|
||||
(Benefit from) provision for income taxes
|
|
(6,552
|
)
|
|
60,033
|
|
|
129,332
|
|
|
236,824
|
|
||||
Net income
|
|
70,014
|
|
|
188,420
|
|
|
314,570
|
|
|
548,888
|
|
||||
Net income attributable to noncontrolling interests
|
|
4,352
|
|
|
4,816
|
|
|
14,656
|
|
|
13,847
|
|
||||
Net income attributable to
Westlake Chemical Corporation
|
|
$
|
65,662
|
|
|
$
|
183,604
|
|
|
$
|
299,914
|
|
|
$
|
535,041
|
|
Earnings per common share attributable to
Westlake Chemical Corporation:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
0.51
|
|
|
$
|
1.39
|
|
|
$
|
2.31
|
|
|
$
|
4.04
|
|
Diluted
|
|
$
|
0.51
|
|
|
$
|
1.39
|
|
|
$
|
2.29
|
|
|
$
|
4.02
|
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
128,793,661
|
|
|
131,664,296
|
|
|
129,519,577
|
|
|
132,301,814
|
|
||||
Diluted
|
|
129,379,956
|
|
|
132,121,235
|
|
|
130,103,897
|
|
|
132,786,534
|
|
||||
Dividends per common share
|
|
$
|
0.1906
|
|
|
$
|
0.1815
|
|
|
$
|
0.5536
|
|
|
$
|
0.5115
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
(in thousands of dollars)
|
||||||||||||||
Net income
|
|
$
|
70,014
|
|
|
$
|
188,420
|
|
|
$
|
314,570
|
|
|
$
|
548,888
|
|
Other comprehensive (loss) income, net of income taxes
|
|
|
|
|
|
|
|
|
||||||||
Pension and other post-retirement benefits liability
|
|
|
|
|
|
|
|
|
||||||||
Pension and other post-retirement reserves
adjustment (excluding amortization)
|
|
(206
|
)
|
|
(22
|
)
|
|
(412
|
)
|
|
(208
|
)
|
||||
Amortization of benefits liability
|
|
369
|
|
|
692
|
|
|
1,072
|
|
|
2,019
|
|
||||
Income tax provision on pension and other
post-retirement benefits liability
|
|
(60
|
)
|
|
(232
|
)
|
|
(251
|
)
|
|
(621
|
)
|
||||
Foreign currency translation adjustments
|
|
6,453
|
|
|
(1,920
|
)
|
|
15,758
|
|
|
(43,746
|
)
|
||||
Available-for-sale investments
|
|
|
|
|
|
|
|
|
||||||||
Unrealized holding gains (losses) on
investments
|
|
1,550
|
|
|
(716
|
)
|
|
61,524
|
|
|
3,987
|
|
||||
Reclassification of net realized gains
to net income
|
|
(52,401
|
)
|
|
—
|
|
|
(53,720
|
)
|
|
(3,795
|
)
|
||||
Income tax benefit (provision) on
available-for-sale investments
|
|
18,270
|
|
|
257
|
|
|
(2,805
|
)
|
|
(68
|
)
|
||||
Other comprehensive (loss) income
|
|
(26,025
|
)
|
|
(1,941
|
)
|
|
21,166
|
|
|
(42,432
|
)
|
||||
Comprehensive income
|
|
43,989
|
|
|
186,479
|
|
|
335,736
|
|
|
506,456
|
|
||||
Comprehensive income attributable to
noncontrolling interests, net of tax of $0
for each of the respective periods presented
|
|
4,352
|
|
|
4,816
|
|
|
14,656
|
|
|
13,847
|
|
||||
Comprehensive income attributable to
Westlake Chemical Corporation
|
|
$
|
39,637
|
|
|
$
|
181,663
|
|
|
$
|
321,080
|
|
|
$
|
492,609
|
|
|
|
Nine Months Ended September 30,
|
||||||
|
|
2016
|
|
2015
|
||||
|
|
|
|
|
||||
|
|
(in thousands of dollars)
|
||||||
Cash flows from operating activities
|
|
|
|
|
||||
Net income
|
|
$
|
314,570
|
|
|
$
|
548,888
|
|
Adjustments to reconcile net income to net cash provided by operating activities
|
|
|
|
|
||||
Depreciation and amortization
|
|
227,193
|
|
|
180,229
|
|
||
Provision for doubtful accounts
|
|
1,176
|
|
|
778
|
|
||
Amortization of debt issuance costs
|
|
1,018
|
|
|
1,504
|
|
||
Stock-based compensation expense
|
|
6,588
|
|
|
7,544
|
|
||
Loss from disposition of property, plant and equipment
|
|
6,541
|
|
|
2,590
|
|
||
Gains realized on previously held shares of Axiall common stock and from
sales of securities
|
|
(53,720
|
)
|
|
(3,795
|
)
|
||
Gain on acquisition, net of loss on the fair value remeasurement
of preexisting equity interest
|
|
—
|
|
|
(21,045
|
)
|
||
Impairment of equity method investment
|
|
—
|
|
|
4,925
|
|
||
Deferred income taxes
|
|
105,910
|
|
|
7,585
|
|
||
Windfall tax benefits from share-based payment arrangements
|
|
(1,190
|
)
|
|
(2,452
|
)
|
||
Income from equity method investments, net of dividends
|
|
(61
|
)
|
|
(1,016
|
)
|
||
Other losses, net
|
|
833
|
|
|
3,584
|
|
||
Changes in operating assets and liabilities, net of effect of business acquisitions
|
|
|
|
|
||||
Accounts receivable
|
|
(92,311
|
)
|
|
54,937
|
|
||
Inventories
|
|
(6,124
|
)
|
|
105,899
|
|
||
Prepaid expenses and other current assets
|
|
1,631
|
|
|
(5,496
|
)
|
||
Accounts payable
|
|
34,109
|
|
|
(30,511
|
)
|
||
Accrued liabilities
|
|
73,157
|
|
|
(10,893
|
)
|
||
Other, net
|
|
(75,160
|
)
|
|
(1,955
|
)
|
||
Net cash provided by operating activities
|
|
544,160
|
|
|
841,300
|
|
||
Cash flows from investing activities
|
|
|
|
|
||||
Acquisition of business, net of cash acquired
|
|
(2,437,829
|
)
|
|
15,782
|
|
||
Additions to cost method investment
|
|
(4,000
|
)
|
|
—
|
|
||
Additions to property, plant and equipment
|
|
(467,330
|
)
|
|
(329,236
|
)
|
||
Proceeds from disposition of assets
|
|
213
|
|
|
17
|
|
||
Proceeds from disposition of equity method investment
|
|
—
|
|
|
27,865
|
|
||
Proceeds from sales and maturities of securities
|
|
662,938
|
|
|
16,056
|
|
||
Purchase of securities
|
|
(138,422
|
)
|
|
(282,542
|
)
|
||
Settlements of derivative instruments
|
|
(4,655
|
)
|
|
(1,535
|
)
|
||
Net cash used for investing activities
|
|
(2,389,085
|
)
|
|
(553,593
|
)
|
||
Cash flows from financing activities
|
|
|
|
|
||||
Debt issuance costs
|
|
(35,207
|
)
|
|
—
|
|
||
Dividends paid
|
|
(71,933
|
)
|
|
(67,852
|
)
|
||
Distributions to noncontrolling interests
|
|
(12,300
|
)
|
|
(10,982
|
)
|
||
Proceeds from debt issuance
|
|
1,428,512
|
|
|
—
|
|
||
Proceeds from exercise of stock options
|
|
1,650
|
|
|
984
|
|
||
Proceeds from issuance of notes payable
|
|
5,597
|
|
|
19,483
|
|
||
Proceeds from term loan and drawdown of revolver
|
|
600,000
|
|
|
—
|
|
||
Restricted cash associated with term loan
|
|
(154,000
|
)
|
|
—
|
|
||
Repayment of notes payable
|
|
(10,602
|
)
|
|
(32,954
|
)
|
||
Repayment of revolver
|
|
(125,000
|
)
|
|
—
|
|
||
Repurchase of common stock for treasury
|
|
(67,406
|
)
|
|
(114,254
|
)
|
||
Windfall tax benefits from share-based payment arrangements
|
|
1,190
|
|
|
2,452
|
|
||
Net cash provided by (used for) financing activities
|
|
1,560,501
|
|
|
(203,123
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
|
2,418
|
|
|
(3,260
|
)
|
||
Net (decrease) increase in cash and cash equivalents
|
|
(282,006
|
)
|
|
81,324
|
|
||
Cash and cash equivalents at beginning of period
|
|
662,525
|
|
|
880,601
|
|
||
Cash and cash equivalents at end of period
|
|
$
|
380,519
|
|
|
$
|
961,925
|
|
|
|
Pro Forma
Nine Months Ended September 30,
|
||||||
|
|
2016
|
|
2015
|
||||
Net sales
|
|
$
|
5,345,365
|
|
|
$
|
6,053,330
|
|
Net income
(1)
|
|
$
|
284,324
|
|
|
$
|
595,442
|
|
Net income (loss) attributable to noncontrolling interest
|
|
16,404
|
|
|
(5,953
|
)
|
||
Net income attributable to Westlake Chemical Corporation
(1)
|
|
$
|
267,920
|
|
|
$
|
601,395
|
|
Earnings per common share attributable to Westlake Chemical Corporation
|
|
|
|
|
||||
Basic
|
|
$
|
2.06
|
|
|
$
|
4.54
|
|
Diluted
|
|
$
|
2.05
|
|
|
$
|
4.52
|
|
(1)
|
The 2016 pro forma net income amounts include Axiall's historical charges recorded during the eight-month period prior to the closing of the Merger for (1) divestitures; (2) restructuring; and (3) legal and settlement claims, net, of
$26,666
,
$22,881
and
$23,376
, respectively. These amounts have not been eliminated for pro forma purposes because they do not relate to nonrecurring transaction specific costs related to the Merger.
|
Closing stock purchase:
|
|
|
||
Offer per share
|
|
$
|
33.00
|
|
Multiplied by number of shares outstanding at acquisition
|
|
67,277
|
|
|
Fair value of Axiall shares outstanding purchased by the Company
|
|
$
|
2,220,141
|
|
|
|
|
||
Axiall debt repaid at acquisition
|
|
247,135
|
|
|
Seller's transaction costs paid by the Company
(1)
|
|
47,458
|
|
|
Fair value of Axiall share-based awards attributed to pre-combination service
(2)
|
|
11,346
|
|
|
Purchase consideration transferred
|
|
$
|
2,526,080
|
|
|
|
|
||
Fair value of previously held equity interest in Axiall
(3)
|
|
102,300
|
|
|
Total fair value allocated to net assets acquired
|
|
$
|
2,628,380
|
|
(1)
|
Transactions costs incurred by the seller include legal and advisory costs incurred for the benefit of Axiall's former shareholders and board of directors to evaluate the Company's initial Merger proposals, explore strategic alternatives and negotiate the purchase price.
|
(2)
|
The fair value of share-based awards attributable to pre-combination service includes the ratio of the pre-combination service performed to the original service period of the Axiall restricted share units and options, including related dividend equivalent rights.
|
(3)
|
Prior to the Merger, the Company owned
3.1 million
shares in Axiall. The investment in Axiall was carried at estimated fair value with unrealized gains recorded as a component of accumulated other comprehensive loss on the consolidated balance sheet. The Company recognized a
$49,080
gain for the investment in other income, net in the consolidated statement of operations upon gaining control.
|
Cash
|
|
$
|
88,251
|
|
Accounts receivable
|
|
422,023
|
|
|
Income tax receivable
|
|
48,398
|
|
|
Inventories
|
|
302,868
|
|
|
Prepaid expenses and other current assets
|
|
48,435
|
|
|
Property, plant and equipment
|
|
3,189,582
|
|
|
Customer relationships (weighted average life of 10.7 years)
|
|
560,000
|
|
|
Other intangible assets:
|
|
|
||
Trade name (weighted average life of 6.8 years)
|
|
50,000
|
|
|
Technology (weighted average life of 5.4 years)
|
|
41,500
|
|
|
Supply contracts and leases (weighted average life of 6.0 years)
|
|
26,710
|
|
|
Other assets
|
|
105,214
|
|
|
Total assets acquired
|
|
4,882,981
|
|
|
Accounts and notes payable
|
|
253,967
|
|
|
Interest payable
|
|
8,154
|
|
|
Income tax payable
|
|
1,921
|
|
|
Accrued compensation
|
|
30,057
|
|
|
Accrued liabilities
|
|
165,793
|
|
|
Deferred income taxes
|
|
973,799
|
|
|
Tax reserve non-current
|
|
3,130
|
|
|
Pension and other post retirement obligations
|
|
311,106
|
|
|
Other liabilities
|
|
114,528
|
|
|
Long-term debt
|
|
1,187,290
|
|
|
Total liabilities assumed
|
|
3,049,745
|
|
|
Total identifiable net assets acquired
|
|
1,833,236
|
|
|
Noncontrolling interest
|
|
(68,000
|
)
|
|
Goodwill
|
|
863,144
|
|
|
Total purchase consideration
|
|
$
|
2,628,380
|
|
|
|
December 31,
2015 |
||
Current
|
|
$
|
520,144
|
|
Non-current
|
|
48,081
|
|
|
Total available-for-sale securities
|
|
$
|
568,225
|
|
|
|
December 31, 2015
|
||||||||||||||
|
|
Cost
|
|
Gross
Unrealized Gains |
|
Gross
Unrealized Losses (1) |
|
Fair Value
|
||||||||
Debt securities
|
|
|
|
|
|
|
|
|
||||||||
Corporate bonds
|
|
$
|
336,665
|
|
|
$
|
55
|
|
|
$
|
(1,076
|
)
|
|
$
|
335,644
|
|
U.S. government debt
(2)
|
|
135,226
|
|
|
2
|
|
|
(374
|
)
|
|
134,854
|
|
||||
Asset-backed securities
|
|
49,759
|
|
|
2
|
|
|
(115
|
)
|
|
49,646
|
|
||||
Equity securities
|
|
54,371
|
|
|
466
|
|
|
(6,756
|
)
|
|
48,081
|
|
||||
Total available-for-sale securities
|
|
$
|
576,021
|
|
|
$
|
525
|
|
|
$
|
(8,321
|
)
|
|
$
|
568,225
|
|
(1)
|
All unrealized loss positions were held at a loss for less than 12 months.
|
(2)
|
U.S. Treasury obligations, U.S. government agency obligations and U.S. government agency mortgage-backed securities.
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Proceeds from sales and maturities of securities
|
|
$
|
360,506
|
|
|
$
|
1,019
|
|
|
$
|
662,938
|
|
|
$
|
16,056
|
|
Gross realized gains
|
|
52,414
|
|
|
—
|
|
|
53,755
|
|
|
3,795
|
|
||||
Gross realized losses
|
|
13
|
|
|
—
|
|
|
35
|
|
|
—
|
|
|
|
September 30,
2016 |
|
December 31,
2015 |
||||
Trade customers
|
|
$
|
923,499
|
|
|
$
|
438,538
|
|
Allowance for doubtful accounts
|
|
(15,322
|
)
|
|
(14,095
|
)
|
||
|
|
908,177
|
|
|
424,443
|
|
||
Federal and state taxes
|
|
134,733
|
|
|
60,748
|
|
||
Other
|
|
27,591
|
|
|
23,341
|
|
||
Accounts receivable, net
|
|
$
|
1,070,501
|
|
|
$
|
508,532
|
|
|
|
September 30,
2016 |
|
December 31,
2015 |
||||
Finished products
|
|
$
|
466,165
|
|
|
$
|
253,338
|
|
Feedstock, additives and chemicals
|
|
199,827
|
|
|
106,435
|
|
||
Materials and supplies
|
|
78,544
|
|
|
74,287
|
|
||
Inventories
|
|
$
|
744,536
|
|
|
$
|
434,060
|
|
|
|
Olefins Segment
|
|
Vinyls Segment
|
|
Total
|
||||||
Balance at December 31, 2015
|
|
$
|
29,990
|
|
|
$
|
32,026
|
|
|
$
|
62,016
|
|
Goodwill acquired during the period
|
|
—
|
|
|
863,144
|
|
|
863,144
|
|
|||
Effects of changes in foreign exchange rates
|
|
—
|
|
|
540
|
|
|
540
|
|
|||
Balance at September 30, 2016
|
|
$
|
29,990
|
|
|
$
|
895,710
|
|
|
$
|
925,700
|
|
|
|
September 30,
2016 |
|
December 31,
2015 |
||||
Accounts payable
|
|
$
|
502,378
|
|
|
$
|
229,219
|
|
Notes payable to banks
|
|
1,010
|
|
|
6,110
|
|
||
Accounts and notes payable
|
|
$
|
503,388
|
|
|
$
|
235,329
|
|
|
|
September 30, 2016
|
|
December 31, 2015
|
||||||||||||||||||||
|
|
Principal
Amount |
|
Unamortized
Premium,
Discount
and Debt Issuance Costs (1) |
|
Net
Long-term Debt |
|
Principal
Amount |
|
Unamortized
Discount and Debt Issuance Costs (1) |
|
Net
Long-term Debt |
||||||||||||
Revolving credit facility
|
|
$
|
325,000
|
|
|
$
|
—
|
|
|
$
|
325,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
4.625% senior notes due 2021 (the
"4.625% Westlake 2021 Senior Notes")
|
|
624,793
|
|
|
28,463
|
|
|
653,256
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
4.625% senior notes due 2021
(the "4.625% Subsidiary 2021 Senior
Notes")
|
|
63,207
|
|
|
3,036
|
|
|
66,243
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
3.60% senior notes due 2022
|
|
250,000
|
|
|
(1,976
|
)
|
|
248,024
|
|
|
250,000
|
|
|
(2,232
|
)
|
|
247,768
|
|
||||||
4.875% senior notes due 2023 (the
"4.875% Westlake 2023 Senior Notes")
|
|
433,793
|
|
|
13,958
|
|
|
447,751
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
4.875% senior notes due 2023
(the "4.875% Subsidiary 2023 Senior
Notes")
|
|
16,207
|
|
|
562
|
|
|
16,769
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
3.60% senior notes due 2026
(the "3.60% 2026 Senior Notes")
|
|
750,000
|
|
|
(10,918
|
)
|
|
739,082
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Loan related to tax-exempt waste
disposal revenue bonds due 2027
|
|
10,889
|
|
|
—
|
|
|
10,889
|
|
|
10,889
|
|
|
—
|
|
|
10,889
|
|
||||||
6 ½% senior notes due 2029
|
|
100,000
|
|
|
(934
|
)
|
|
99,066
|
|
|
100,000
|
|
|
(989
|
)
|
|
99,011
|
|
||||||
6 ¾% senior notes due 2032
|
|
250,000
|
|
|
(1,913
|
)
|
|
248,087
|
|
|
250,000
|
|
|
(2,002
|
)
|
|
247,998
|
|
||||||
6 ½% senior notes due 2035 (the "6 ½%
2035 GO Zone Senior Notes")
|
|
89,000
|
|
|
(851
|
)
|
|
88,149
|
|
|
89,000
|
|
|
(884
|
)
|
|
88,116
|
|
||||||
6 ½% senior notes due 2035 (the "6 ½%
2035 IKE Zone Senior Notes")
|
|
65,000
|
|
|
(610
|
)
|
|
64,390
|
|
|
65,000
|
|
|
(634
|
)
|
|
64,366
|
|
||||||
5.0% senior notes due 2046 (the "5.0%
2046 Senior Notes")
|
|
700,000
|
|
|
(26,121
|
)
|
|
673,879
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Long-term debt, net
|
|
$
|
3,677,889
|
|
|
$
|
2,696
|
|
|
$
|
3,680,585
|
|
|
$
|
764,889
|
|
|
$
|
(6,741
|
)
|
|
$
|
758,148
|
|
(1)
|
Includes unamortized debt issuance costs of
$21,286
and
$5,967
at
September 30, 2016
and
December 31, 2015
, respectively.
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||||||||||||||||||
|
|
U.S.
Plans |
|
Non-U.S.
Plans |
|
U.S.
Plans |
|
Non-U.S.
Plans |
|
U.S.
Plans |
|
Non-U.S.
Plans |
|
U.S.
Plans |
|
Non-U.S.
Plans |
||||||||||||||||
Service cost
|
|
$
|
315
|
|
|
$
|
318
|
|
|
$
|
—
|
|
|
$
|
416
|
|
|
$
|
315
|
|
|
$
|
777
|
|
|
$
|
29
|
|
|
$
|
1,248
|
|
Expected administrative
expenses
|
|
730
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
730
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Interest cost
|
|
2,191
|
|
|
622
|
|
|
487
|
|
|
528
|
|
|
1,553
|
|
|
1,763
|
|
|
1,519
|
|
|
1,585
|
|
||||||||
Expected return on plan assets
|
|
(3,800
|
)
|
|
(50
|
)
|
|
(712
|
)
|
|
—
|
|
|
(5,260
|
)
|
|
(50
|
)
|
|
(2,237
|
)
|
|
—
|
|
||||||||
Amortization of net loss
|
|
338
|
|
|
—
|
|
|
333
|
|
|
263
|
|
|
978
|
|
|
—
|
|
|
942
|
|
|
789
|
|
||||||||
Net periodic benefit (income)
cost
|
|
$
|
(226
|
)
|
|
$
|
890
|
|
|
$
|
108
|
|
|
$
|
1,207
|
|
|
$
|
(1,684
|
)
|
|
$
|
2,490
|
|
|
$
|
253
|
|
|
$
|
3,622
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||||||||||
|
|
U.S.
Plans |
|
Non-U.S.
Plans |
|
U.S.
Plans |
|
U.S.
Plans |
|
Non-U.S.
Plans |
|
U.S.
Plans |
||||||||||||
Service cost
|
|
$
|
72
|
|
|
$
|
1
|
|
|
$
|
6
|
|
|
$
|
81
|
|
|
$
|
1
|
|
|
$
|
17
|
|
Interest cost
|
|
250
|
|
|
3
|
|
|
149
|
|
|
540
|
|
|
3
|
|
|
448
|
|
||||||
Amortization of net loss
|
|
31
|
|
|
—
|
|
|
96
|
|
|
94
|
|
|
—
|
|
|
288
|
|
||||||
Net periodic benefit cost
|
|
$
|
353
|
|
|
$
|
4
|
|
|
$
|
251
|
|
|
$
|
715
|
|
|
$
|
4
|
|
|
$
|
753
|
|
|
|
Common
Stock
|
|
Common
Stock,
Held in
Treasury
|
|
Additional
Paid-in
Capital
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Noncontrolling
Interests
|
|
Total
|
||||||||||||||
Balances at December 31, 2015
|
|
$
|
1,347
|
|
|
$
|
(258,312
|
)
|
|
$
|
542,148
|
|
|
$
|
3,109,987
|
|
|
$
|
(129,292
|
)
|
|
$
|
296,053
|
|
|
$
|
3,561,931
|
|
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
299,914
|
|
|
—
|
|
|
14,656
|
|
|
314,570
|
|
|||||||
Other comprehensive income,
net of income taxes:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Pension and other post-
retirement benefits
liability
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
409
|
|
|
—
|
|
|
409
|
|
|||||||
Foreign currency
translation adjustments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15,758
|
|
|
—
|
|
|
15,758
|
|
|||||||
Net unrealized holding
gains on investments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,999
|
|
|
—
|
|
|
4,999
|
|
|||||||
Common stock repurchased
|
|
—
|
|
|
(66,725
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(66,725
|
)
|
|||||||
Shares issued—stock-
based compensation
|
|
—
|
|
|
5,057
|
|
|
(3,407
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,650
|
|
|||||||
Stock-based compensation,
net of tax on stock options
exercised
|
|
—
|
|
|
—
|
|
|
7,778
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,778
|
|
|||||||
Dividends paid
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(71,933
|
)
|
|
—
|
|
|
—
|
|
|
(71,933
|
)
|
|||||||
Distributions to noncontrolling
interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12,300
|
)
|
|
(12,300
|
)
|
|||||||
Noncontrolling interest in
acquired business
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
68,000
|
|
|
68,000
|
|
|||||||
Balances at September 30, 2016
|
|
$
|
1,347
|
|
|
$
|
(319,980
|
)
|
|
$
|
546,519
|
|
|
$
|
3,337,968
|
|
|
$
|
(108,126
|
)
|
|
$
|
366,409
|
|
|
$
|
3,824,137
|
|
|
|
Common
Stock
|
|
Common
Stock,
Held in
Treasury
|
|
Additional
Paid-in
Capital
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Noncontrolling
Interests
|
|
Total
|
||||||||||||||
Balances at December 31, 2014
|
|
$
|
1,347
|
|
|
$
|
(96,372
|
)
|
|
$
|
530,441
|
|
|
$
|
2,555,528
|
|
|
$
|
(79,433
|
)
|
|
$
|
290,377
|
|
|
$
|
3,201,888
|
|
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
535,041
|
|
|
—
|
|
|
13,847
|
|
|
548,888
|
|
|||||||
Other comprehensive income
(loss), net of income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Pension and other post-
retirement benefits
liability
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,190
|
|
|
—
|
|
|
1,190
|
|
|||||||
Foreign currency
translation adjustments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(43,746
|
)
|
|
—
|
|
|
(43,746
|
)
|
|||||||
Net unrealized holding
gains on investments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
124
|
|
|
—
|
|
|
124
|
|
|||||||
Common stock repurchased
|
|
—
|
|
|
(122,249
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(122,249
|
)
|
|||||||
Shares issued—stock-
based compensation
|
|
—
|
|
|
1,079
|
|
|
(95
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
984
|
|
|||||||
Stock-based compensation,
net of tax on stock options
exercised
|
|
—
|
|
|
—
|
|
|
9,996
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,996
|
|
|||||||
Dividends paid
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(67,852
|
)
|
|
—
|
|
|
—
|
|
|
(67,852
|
)
|
|||||||
Distributions to noncontrolling
interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10,982
|
)
|
|
(10,982
|
)
|
|||||||
Noncontrolling interest in
acquired business
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,597
|
|
|
1,597
|
|
|||||||
Balances at September 30, 2015
|
|
$
|
1,347
|
|
|
$
|
(217,542
|
)
|
|
$
|
540,342
|
|
|
$
|
3,022,717
|
|
|
$
|
(121,865
|
)
|
|
$
|
294,839
|
|
|
$
|
3,519,838
|
|
|
|
Benefits
Liability,
Net of Tax
|
|
Cumulative
Foreign
Currency
Exchange,
Net of Tax
|
|
Net Unrealized
Holding Gains
(Losses) on
Investments,
Net of Tax
(1)
|
|
Total
|
||||||||
Balances at December 31, 2015
|
|
$
|
(8,607
|
)
|
|
$
|
(115,690
|
)
|
|
$
|
(4,995
|
)
|
|
$
|
(129,292
|
)
|
Other comprehensive (loss) income before
reclassifications
|
|
(252
|
)
|
|
15,758
|
|
|
57,550
|
|
|
73,056
|
|
||||
Amounts reclassified from accumulated other
comprehensive loss (income)
|
|
661
|
|
|
—
|
|
|
(52,551
|
)
|
|
(51,890
|
)
|
||||
Net other comprehensive income for the period
|
|
409
|
|
|
15,758
|
|
|
4,999
|
|
|
21,166
|
|
||||
Balances at September 30, 2016
|
|
$
|
(8,198
|
)
|
|
$
|
(99,932
|
)
|
|
$
|
4
|
|
|
$
|
(108,126
|
)
|
(1)
|
Includes other comprehensive income from equity method investment.
|
|
|
Benefits
Liability,
Net of Tax
|
|
Cumulative
Foreign
Currency
Exchange,
Net of Tax
|
|
Net Unrealized
Holding Gains
on Investments,
Net of Tax
|
|
Total
|
||||||||
Balances at December 31, 2014
|
|
$
|
(23,442
|
)
|
|
$
|
(56,224
|
)
|
|
$
|
233
|
|
|
$
|
(79,433
|
)
|
Other comprehensive (loss) income before
reclassifications
|
|
(128
|
)
|
|
(43,746
|
)
|
|
2,556
|
|
|
(41,318
|
)
|
||||
Amounts reclassified from accumulated other
comprehensive loss (income)
|
|
1,318
|
|
|
—
|
|
|
(2,432
|
)
|
|
(1,114
|
)
|
||||
Net other comprehensive income (loss) for the period
|
|
1,190
|
|
|
(43,746
|
)
|
|
124
|
|
|
(42,432
|
)
|
||||
Balances at September 30, 2015
|
|
$
|
(22,252
|
)
|
|
$
|
(99,970
|
)
|
|
$
|
357
|
|
|
$
|
(121,865
|
)
|
Details about Accumulated
Other Comprehensive
Income (Loss) Components
|
|
Location of Reclassification
(Income (Expense)) in
Consolidated Statements
of Operations
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|||||||||||
Amortization of pension and
other post-retirement items
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net loss
|
|
(1)
|
|
$
|
(369
|
)
|
|
$
|
(692
|
)
|
|
$
|
(1,072
|
)
|
|
$
|
(2,019
|
)
|
|
|
Provision for
income taxes
|
|
141
|
|
|
241
|
|
|
411
|
|
|
701
|
|
||||
|
|
|
|
(228
|
)
|
|
(451
|
)
|
|
(661
|
)
|
|
(1,318
|
)
|
||||
Net unrealized gains on
available-for-sale
investments
|
|
|
|
|
|
|
|
|
|
|
||||||||
Realized gain on
available-for-sale
investments
|
|
Other income, net
|
|
52,401
|
|
|
—
|
|
|
53,720
|
|
|
3,795
|
|
||||
|
|
Provision for
income taxes
|
|
(696
|
)
|
|
—
|
|
|
(1,169
|
)
|
|
(1,363
|
)
|
||||
|
|
|
|
51,705
|
|
|
—
|
|
|
52,551
|
|
|
2,432
|
|
||||
Total reclassifications for
the period
|
|
|
|
$
|
51,477
|
|
|
$
|
(451
|
)
|
|
$
|
51,890
|
|
|
$
|
1,114
|
|
(1)
|
These accumulated other comprehensive loss components are included in the computation of net periodic benefit cost. For additional information, please read Note 11 (Employee Benefits) to the financial statements included in the
2015
Form 10-K.
|
|
|
Derivative Assets
|
||||||||
|
|
Balance Sheet Location
|
|
Fair Value as of
|
||||||
|
|
September 30,
2016 |
|
December 31,
2015 |
||||||
Not designated as hedging instruments
|
|
|
|
|
|
|
||||
Commodity forward contracts
|
|
Accounts receivable, net
|
|
$
|
2,221
|
|
|
$
|
3,465
|
|
Commodity forward contracts
|
|
Other assets, net
|
|
3,674
|
|
|
2,088
|
|
||
Total derivative assets
|
|
|
|
$
|
5,895
|
|
|
$
|
5,553
|
|
|
|
Derivative Liabilities
|
||||||||
|
|
Balance Sheet Location
|
|
Fair Value as of
|
||||||
|
|
September 30,
2016 |
|
December 31,
2015 |
||||||
Not designated as hedging instruments
|
|
|
|
|
|
|
||||
Commodity forward contracts
|
|
Accrued liabilities
|
|
$
|
3,196
|
|
|
$
|
9,325
|
|
Commodity forward contracts
|
|
Other liabilities
|
|
6,811
|
|
|
12,437
|
|
||
Total derivative liabilities
|
|
|
|
$
|
10,007
|
|
|
$
|
21,762
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivatives Not Designated as
Hedging Instruments
|
|
Location of Gain (Loss) Recognized
in Income on Derivative
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||||||
Commodity forward contracts
|
|
Gross profit
|
|
$
|
(7,840
|
)
|
|
$
|
(9,314
|
)
|
|
$
|
7,784
|
|
|
$
|
(4,478
|
)
|
|
|
Derivative Assets as of
|
||||||
|
|
September 30,
2016 |
|
December 31,
2015 |
||||
Derivative assets subject to enforceable master netting arrangements
|
|
$
|
—
|
|
|
$
|
—
|
|
Derivative assets not subject to enforceable master netting arrangements
|
|
3,560
|
|
|
462
|
|
||
Total derivative assets
|
|
$
|
3,560
|
|
|
$
|
462
|
|
|
|
September 30, 2016
|
|
December 31, 2015
|
||||||||||||||||||||
Offsetting of Derivative Assets
|
|
Gross Amounts of
Recognized Assets
|
|
Gross Amounts Offset in the
Consolidated Balance Sheet
|
|
Net Amounts of Assets Presented
in the Consolidated Balance Sheet
|
|
Gross Amounts of
Recognized Assets
|
|
Gross Amounts Offset in the
Consolidated Balance Sheet
|
|
Net Amounts of Assets Presented
in the Consolidated Balance Sheet
|
||||||||||||
Commodity forward contracts
|
|
$
|
2,335
|
|
|
$
|
(2,335
|
)
|
|
$
|
—
|
|
|
$
|
5,091
|
|
|
$
|
(5,091
|
)
|
|
$
|
—
|
|
|
|
Derivative Liabilities as of
|
||||||
|
|
September 30,
2016 |
|
December 31,
2015 |
||||
Derivative liabilities subject to enforceable master netting arrangements
|
|
$
|
1,889
|
|
|
$
|
5,803
|
|
Derivative liabilities not subject to enforceable master netting arrangements
|
|
5,782
|
|
|
10,868
|
|
||
Total derivative liabilities
|
|
$
|
7,671
|
|
|
$
|
16,671
|
|
|
|
September 30, 2016
|
|
December 31, 2015
|
||||||||||||||||||||
Offsetting of Derivative Liabilities
|
|
Gross Amounts of
Recognized Liabilities
|
|
Gross Amounts Offset in the
Consolidated Balance Sheet
|
|
Net Amounts of Liabilities Presented
in the Consolidated Balance Sheet
|
|
Gross Amounts of
Recognized Liabilities
|
|
Gross Amounts Offset in the
Consolidated Balance Sheet
|
|
Net Amounts of Liabilities Presented
in the Consolidated Balance Sheet
|
||||||||||||
Commodity forward contracts
|
|
$
|
4,224
|
|
|
$
|
(2,335
|
)
|
|
$
|
1,889
|
|
|
$
|
10,894
|
|
|
$
|
(5,091
|
)
|
|
$
|
5,803
|
|
|
|
September 30, 2016
|
|
December 31, 2015
|
||||||||||||||||||||
Derivative Liabilities by Counterparty
|
|
Net Amounts of Liabilities Presented
in the Consolidated Balance Sheet
|
|
Gross Amounts Not Offset in the
Consolidated Balance Sheet
|
|
Net
Amount
|
|
Net Amounts of Liabilities Presented
in the Consolidated Balance Sheet
|
|
Gross Amounts Not Offset in the
Consolidated Balance Sheet
|
|
Net
Amount
|
||||||||||||
Counterparty A
|
|
$
|
1,889
|
|
|
$
|
—
|
|
|
$
|
1,889
|
|
|
$
|
5,564
|
|
|
$
|
—
|
|
|
$
|
5,564
|
|
Counterparty B
|
|
—
|
|
|
—
|
|
|
—
|
|
|
239
|
|
|
—
|
|
|
239
|
|
||||||
Total
|
|
$
|
1,889
|
|
|
$
|
—
|
|
|
$
|
1,889
|
|
|
$
|
5,803
|
|
|
$
|
—
|
|
|
$
|
5,803
|
|
|
|
September 30, 2016
|
||||||||||
|
|
Level 1
|
|
Level 2
|
|
Total
|
||||||
Derivative instruments
|
|
|
|
|
|
|
||||||
Risk management assets—Commodity forward contracts
|
|
$
|
1,551
|
|
|
$
|
4,344
|
|
|
$
|
5,895
|
|
Risk management liabilities—Commodity forward contracts
|
|
(8,091
|
)
|
|
(1,916
|
)
|
|
(10,007
|
)
|
|||
|
|
|
|
|
|
|
||||||
|
|
December 31, 2015
|
||||||||||
|
|
Level 1
|
|
Level 2
|
|
Total
|
||||||
Derivative instruments
|
|
|
|
|
|
|
||||||
Risk management assets—Commodity forward contracts
|
|
$
|
5,553
|
|
|
$
|
—
|
|
|
$
|
5,553
|
|
Risk management liabilities—Commodity forward contracts
|
|
(11,648
|
)
|
|
(10,114
|
)
|
|
(21,762
|
)
|
|||
Marketable securities
|
|
|
|
|
|
|
||||||
Available-for-sale securities
|
|
48,081
|
|
|
520,144
|
|
|
568,225
|
|
|
|
September 30, 2016
|
|
December 31, 2015
|
||||||||||||
|
|
Carrying
Value
|
|
Fair
Value
|
|
Carrying
Value
|
|
Fair
Value
|
||||||||
Revolving credit facility
|
|
$
|
325,000
|
|
|
$
|
325,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
4.625% Westlake 2021 Senior Notes
|
|
653,256
|
|
|
653,715
|
|
|
—
|
|
|
—
|
|
||||
4.625% Subsidiary 2021 Senior Notes
|
|
66,243
|
|
|
66,058
|
|
|
—
|
|
|
—
|
|
||||
3.60% senior notes due 2022
|
|
248,024
|
|
|
251,480
|
|
|
247,768
|
|
|
244,828
|
|
||||
4.875% Westlake 2023 Senior Notes
|
|
447,751
|
|
|
454,151
|
|
|
—
|
|
|
—
|
|
||||
4.875% Subsidiary 2023 Senior Notes
|
|
16,769
|
|
|
16,954
|
|
|
—
|
|
|
—
|
|
||||
3.60% 2026 Senior Notes
|
|
739,082
|
|
|
752,055
|
|
|
—
|
|
|
—
|
|
||||
Loan related to tax-exempt waste
disposal revenue bonds due 2027 |
|
10,889
|
|
|
10,889
|
|
|
10,889
|
|
|
10,889
|
|
||||
6 ½% senior notes due 2029
|
|
99,066
|
|
|
117,726
|
|
|
99,011
|
|
|
117,153
|
|
||||
6 ¾% senior notes due 2032
|
|
248,087
|
|
|
265,383
|
|
|
247,998
|
|
|
268,490
|
|
||||
6 ½% 2035 GO Zone Senior Notes
|
|
88,149
|
|
|
105,298
|
|
|
88,116
|
|
|
106,491
|
|
||||
6 ½% 2035 IKE Zone Senior Notes
|
|
64,390
|
|
|
76,837
|
|
|
64,366
|
|
|
76,741
|
|
||||
5.0% 2046 Senior Notes
|
|
673,879
|
|
|
705,985
|
|
|
—
|
|
|
—
|
|
Balance as of June 30, 2016
|
|
$
|
—
|
|
Amounts attributable to Axiall pre-acquistion
|
|
5,471
|
|
|
Additions during the three months ended September 30, 2016
|
|
3,444
|
|
|
Reduction during the three months ended September 30, 2016 due to expiration of statute of limitations
|
|
(92
|
)
|
|
Foreign currency translation
|
|
(5
|
)
|
|
Balance as of September 30, 2016
|
|
$
|
8,818
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Net income attributable to
Westlake Chemical Corporation
|
|
$
|
65,662
|
|
|
$
|
183,604
|
|
|
$
|
299,914
|
|
|
$
|
535,041
|
|
Less:
|
|
|
|
|
|
|
|
|
||||||||
Net income attributable to participating securities
|
|
(294
|
)
|
|
(195
|
)
|
|
(1,347
|
)
|
|
(653
|
)
|
||||
Net income attributable to common shareholders
|
|
$
|
65,368
|
|
|
$
|
183,409
|
|
|
$
|
298,567
|
|
|
$
|
534,388
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Weighted average common shares—basic
|
|
128,793,661
|
|
|
131,664,296
|
|
|
129,519,577
|
|
|
132,301,814
|
|
||||
Plus incremental shares from:
|
|
|
|
|
|
|
|
|
||||||||
Assumed exercise of options
|
|
586,295
|
|
|
456,939
|
|
|
584,320
|
|
|
484,720
|
|
||||
Weighted average common shares—diluted
|
|
129,379,956
|
|
|
132,121,235
|
|
|
130,103,897
|
|
|
132,786,534
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Earnings per common share attributable to
Westlake Chemical Corporation:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
0.51
|
|
|
$
|
1.39
|
|
|
$
|
2.31
|
|
|
$
|
4.04
|
|
Diluted
|
|
$
|
0.51
|
|
|
$
|
1.39
|
|
|
$
|
2.29
|
|
|
$
|
4.02
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Interest income
|
|
$
|
537
|
|
|
$
|
1,631
|
|
|
$
|
6,899
|
|
|
$
|
3,383
|
|
Dividend income
|
|
868
|
|
|
—
|
|
|
5,142
|
|
|
3,328
|
|
||||
Acquisition-related financing costs
|
|
(11,420
|
)
|
|
—
|
|
|
(12,220
|
)
|
|
—
|
|
||||
Foreign exchange currency (losses) gains, net
|
|
(1,281
|
)
|
|
(731
|
)
|
|
(2,435
|
)
|
|
1,140
|
|
||||
Impairment of equity method investment
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,925
|
)
|
||||
Gain realized on previously held shares of Axiall
common stock
|
|
49,080
|
|
|
—
|
|
|
49,080
|
|
|
—
|
|
||||
Gain on acquisition and related expenses, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20,430
|
|
||||
Gains from sales of securities, net
|
|
3,321
|
|
|
—
|
|
|
4,640
|
|
|
3,795
|
|
||||
Other
|
|
160
|
|
|
1,736
|
|
|
985
|
|
|
6,639
|
|
||||
Other income, net
|
|
$
|
41,265
|
|
|
$
|
2,636
|
|
|
$
|
52,091
|
|
|
$
|
33,790
|
|
•
|
In May 2013, an amendment to an existing consent order agreed to by the West Virginia Department of Environmental Protection and a predecessor of Axiall required that it, among other things, pay a penalty in the amount of
$449
and continue certain corrective action associated with discharges of hexachlorocyclohexane
|
•
|
In May 2013 and September 2013, the Environmental Protection Agency (the "EPA") conducted inspections at the Company's Plaquemine, Louisiana facility pursuant to requirements of the federal Clean Air Act Section 112(r) Risk Management Program and Title V. As a result of the inspections, the EPA identified areas of concern and the Company has subsequently engaged in negotiations, which are anticipated to result in sanctions of
$167
.
|
•
|
The LDEQ has issued notices of violations ("NOVs") regarding the Company's olefins facilities in Lake Charles, Louisiana for various air and water compliance issues. The Company is working with the LDEQ to settle these claims, and a global settlement of all claims is being discussed. The Company has reached a verbal agreement with the LDEQ to settle certain of the NOVs in
two
separate settlements for a combined
$192
in civil penalties.
|
•
|
During September 2010, the Company's vinyls facilities in north Lake Charles and Plaquemine each received a Consolidated Compliance Order and Notice of Potential Penalty, alleging violations of various requirements of those facilities' air permits, based largely on self-reported permit deviations related to record-keeping violations. The Company has been negotiating a possible global settlement of these and several other matters with the LDEQ. The Company believes the resolution of these matters may require the payment of a monetary sanction in excess of
$100
.
|
•
|
In April 2015, Axiall received a communication from the EPA related to, among other things, the EPA's investigation of the 2012 and 2013 fires that occurred at its VCM plant in Lake Charles. In late 2015, Axiall settled this matter with the EPA, with such settlement including on-going supplemental environmental projects and a payment of
$900
.
|
•
|
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, the Company received a Clean Air Act Section 114 Information Request from the EPA which sought information regarding flares at the Calvert City, Kentucky and certain Lake Charles facilities. The EPA has informed the Company that the information provided leads the EPA to believe that some of the flares are out of compliance with applicable standards. The EPA has indicated that it is seeking a consent decree that would obligate the Company to take corrective actions relating to the alleged noncompliance. The Company believes the resolution of these matters may require the payment of a monetary sanction in excess of
$100
.
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Net external sales
|
|
|
|
|
|
|
|
|
||||||||
Olefins
|
|
|
|
|
|
|
|
|
||||||||
Polyethylene
|
|
$
|
380,810
|
|
|
$
|
423,631
|
|
|
$
|
1,098,500
|
|
|
$
|
1,283,545
|
|
Styrene, feedstock and other
|
|
116,555
|
|
|
164,466
|
|
|
324,369
|
|
|
508,507
|
|
||||
Total Olefins
|
|
497,365
|
|
|
588,097
|
|
|
1,422,869
|
|
|
1,792,052
|
|
||||
Vinyls
|
|
|
|
|
|
|
|
|
||||||||
PVC, caustic soda and other
|
|
599,276
|
|
|
468,235
|
|
|
1,492,650
|
|
|
1,315,101
|
|
||||
Building products
|
|
182,387
|
|
|
131,705
|
|
|
424,757
|
|
|
369,417
|
|
||||
Total Vinyls
|
|
781,663
|
|
|
599,940
|
|
|
1,917,407
|
|
|
1,684,518
|
|
||||
|
|
$
|
1,279,028
|
|
|
$
|
1,188,037
|
|
|
$
|
3,340,276
|
|
|
$
|
3,476,570
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Intersegment sales
|
|
|
|
|
|
|
|
|
||||||||
Olefins
|
|
$
|
30,614
|
|
|
$
|
28,551
|
|
|
$
|
85,856
|
|
|
$
|
78,654
|
|
Vinyls
|
|
2,130
|
|
|
341
|
|
|
2,719
|
|
|
1,098
|
|
||||
|
|
$
|
32,744
|
|
|
$
|
28,892
|
|
|
$
|
88,575
|
|
|
$
|
79,752
|
|
|
|
|
|
|
|
|
|
|
||||||||
Income (loss) from operations
|
|
|
|
|
|
|
|
|
||||||||
Olefins
|
|
$
|
118,475
|
|
|
$
|
196,703
|
|
|
$
|
408,274
|
|
|
$
|
608,744
|
|
Vinyls
|
|
22,235
|
|
|
67,779
|
|
|
136,559
|
|
|
202,831
|
|
||||
Corporate and other
|
|
(94,147
|
)
|
|
(10,454
|
)
|
|
(116,056
|
)
|
|
(32,893
|
)
|
||||
|
|
$
|
46,563
|
|
|
$
|
254,028
|
|
|
$
|
428,777
|
|
|
$
|
778,682
|
|
|
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization
|
|
|
|
|
|
|
|
|
||||||||
Olefins
|
|
$
|
36,649
|
|
|
$
|
27,678
|
|
|
$
|
95,582
|
|
|
$
|
82,240
|
|
Vinyls
|
|
56,136
|
|
|
33,432
|
|
|
128,691
|
|
|
97,615
|
|
||||
Corporate and other
|
|
1,444
|
|
|
138
|
|
|
2,920
|
|
|
374
|
|
||||
|
|
$
|
94,229
|
|
|
$
|
61,248
|
|
|
$
|
227,193
|
|
|
$
|
180,229
|
|
|
|
|
|
|
|
|
|
|
||||||||
Other income (expense), net
|
|
|
|
|
|
|
|
|
||||||||
Olefins
|
|
$
|
1,101
|
|
|
$
|
1,323
|
|
|
$
|
3,706
|
|
|
$
|
3,770
|
|
Vinyls
|
|
(1,226
|
)
|
|
10
|
|
|
1,722
|
|
|
6,927
|
|
||||
Corporate and other
|
|
41,390
|
|
|
1,303
|
|
|
46,663
|
|
|
23,093
|
|
||||
|
|
$
|
41,265
|
|
|
$
|
2,636
|
|
|
$
|
52,091
|
|
|
$
|
33,790
|
|
|
|
|
|
|
|
|
|
|
||||||||
Provision for (benefit from) income taxes
|
|
|
|
|
|
|
|
|
||||||||
Olefins
|
|
$
|
31,956
|
|
|
$
|
45,865
|
|
|
$
|
136,429
|
|
|
$
|
186,534
|
|
Vinyls
|
|
(3,912
|
)
|
|
15,812
|
|
|
29,655
|
|
|
55,270
|
|
||||
Corporate and other
|
|
(34,596
|
)
|
|
(1,644
|
)
|
|
(36,752
|
)
|
|
(4,980
|
)
|
||||
|
|
$
|
(6,552
|
)
|
|
$
|
60,033
|
|
|
$
|
129,332
|
|
|
$
|
236,824
|
|
|
|
|
|
|
|
|
|
|
||||||||
Capital expenditures
|
|
|
|
|
|
|
|
|
||||||||
Olefins
|
|
$
|
96,469
|
|
|
$
|
69,885
|
|
|
$
|
285,359
|
|
|
$
|
206,719
|
|
Vinyls
|
|
83,523
|
|
|
53,510
|
|
|
180,392
|
|
|
114,935
|
|
||||
Corporate and other
|
|
178
|
|
|
1,909
|
|
|
1,579
|
|
|
7,582
|
|
||||
|
|
$
|
180,170
|
|
|
$
|
125,304
|
|
|
$
|
467,330
|
|
|
$
|
329,236
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Income from operations
|
|
$
|
46,563
|
|
|
$
|
254,028
|
|
|
$
|
428,777
|
|
|
$
|
778,682
|
|
Interest expense
|
|
(24,366
|
)
|
|
(8,211
|
)
|
|
(36,966
|
)
|
|
(26,760
|
)
|
||||
Other income, net
|
|
41,265
|
|
|
2,636
|
|
|
52,091
|
|
|
33,790
|
|
||||
Income before income taxes
|
|
$
|
63,462
|
|
|
$
|
248,453
|
|
|
$
|
443,902
|
|
|
$
|
785,712
|
|
|
|
September 30,
2016 |
|
December 31,
2015 |
||||
Total assets
|
|
|
|
|
||||
Olefins
|
|
$
|
2,094,163
|
|
|
$
|
1,869,888
|
|
Vinyls
|
|
8,262,971
|
|
|
2,638,833
|
|
||
Corporate and other
|
|
539,915
|
|
|
1,060,564
|
|
||
|
|
$
|
10,897,049
|
|
|
$
|
5,569,285
|
|
|
|
Westlake
Chemical
Corporation
|
|
100% Owned
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Balance Sheet
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$
|
144,899
|
|
|
$
|
1,884
|
|
|
$
|
233,736
|
|
|
$
|
—
|
|
|
$
|
380,519
|
|
Accounts receivable, net
|
|
1,457
|
|
|
2,838,917
|
|
|
765,949
|
|
|
(2,535,822
|
)
|
|
1,070,501
|
|
|||||
Inventories
|
|
—
|
|
|
329,233
|
|
|
415,303
|
|
|
—
|
|
|
744,536
|
|
|||||
Prepaid expenses and other current assets
|
|
8,257
|
|
|
16,264
|
|
|
43,741
|
|
|
(13,394
|
)
|
|
54,868
|
|
|||||
Restricted cash
|
|
—
|
|
|
—
|
|
|
169,320
|
|
|
—
|
|
|
169,320
|
|
|||||
Total current assets
|
|
154,613
|
|
|
3,186,298
|
|
|
1,628,049
|
|
|
(2,549,216
|
)
|
|
2,419,744
|
|
|||||
Property, plant and equipment, net
|
|
—
|
|
|
1,538,148
|
|
|
4,912,799
|
|
|
—
|
|
|
6,450,947
|
|
|||||
Other assets, net
|
|
9,074,810
|
|
|
418,588
|
|
|
1,695,970
|
|
|
(9,163,010
|
)
|
|
2,026,358
|
|
|||||
Total assets
|
|
$
|
9,229,423
|
|
|
$
|
5,143,034
|
|
|
$
|
8,236,818
|
|
|
$
|
(11,712,226
|
)
|
|
$
|
10,897,049
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts and notes payable
|
|
$
|
2,172,989
|
|
|
$
|
466,907
|
|
|
$
|
387,807
|
|
|
$
|
(2,524,315
|
)
|
|
$
|
503,388
|
|
Accrued liabilities
|
|
12,022
|
|
|
162,645
|
|
|
402,815
|
|
|
(24,901
|
)
|
|
552,581
|
|
|||||
Term loan
|
|
—
|
|
|
—
|
|
|
148,681
|
|
|
—
|
|
|
148,681
|
|
|||||
Total current liabilities
|
|
2,185,011
|
|
|
629,552
|
|
|
939,303
|
|
|
(2,549,216
|
)
|
|
1,204,650
|
|
|||||
Long-term debt, net
|
|
3,586,684
|
|
|
775,995
|
|
|
2,199,812
|
|
|
(2,881,906
|
)
|
|
3,680,585
|
|
|||||
Deferred income taxes
|
|
—
|
|
|
596,928
|
|
|
1,022,226
|
|
|
(12,070
|
)
|
|
1,607,084
|
|
|||||
Pension and other liabilities
|
|
—
|
|
|
48,837
|
|
|
531,756
|
|
|
—
|
|
|
580,593
|
|
|||||
Total liabilities
|
|
5,771,695
|
|
|
2,051,312
|
|
|
4,693,097
|
|
|
(5,443,192
|
)
|
|
7,072,912
|
|
|||||
Total Westlake Chemical Corporation stockholders' equity
|
|
3,457,728
|
|
|
3,091,722
|
|
|
3,177,312
|
|
|
(6,269,034
|
)
|
|
3,457,728
|
|
|||||
Noncontrolling interests
|
|
—
|
|
|
—
|
|
|
366,409
|
|
|
—
|
|
|
366,409
|
|
|||||
Total equity
|
|
3,457,728
|
|
|
3,091,722
|
|
|
3,543,721
|
|
|
(6,269,034
|
)
|
|
3,824,137
|
|
|||||
Total liabilities and equity
|
|
$
|
9,229,423
|
|
|
$
|
5,143,034
|
|
|
$
|
8,236,818
|
|
|
$
|
(11,712,226
|
)
|
|
$
|
10,897,049
|
|
|
|
Westlake
Chemical
Corporation
|
|
100% Owned
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Balance Sheet
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$
|
303,131
|
|
|
$
|
6,818
|
|
|
$
|
352,576
|
|
|
$
|
—
|
|
|
$
|
662,525
|
|
Marketable securities
|
|
520,144
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
520,144
|
|
|||||
Accounts receivable, net
|
|
10,943
|
|
|
2,474,963
|
|
|
190,384
|
|
|
(2,167,758
|
)
|
|
508,532
|
|
|||||
Inventories
|
|
—
|
|
|
287,114
|
|
|
146,946
|
|
|
—
|
|
|
434,060
|
|
|||||
Prepaid expenses and other current assets
|
|
2,201
|
|
|
10,186
|
|
|
4,981
|
|
|
(2,879
|
)
|
|
14,489
|
|
|||||
Deferred income taxes
|
|
702
|
|
|
28,325
|
|
|
6,412
|
|
|
—
|
|
|
35,439
|
|
|||||
Total current assets
|
|
837,121
|
|
|
2,807,406
|
|
|
701,299
|
|
|
(2,170,637
|
)
|
|
2,175,189
|
|
|||||
Property, plant and equipment, net
|
|
—
|
|
|
1,476,642
|
|
|
1,527,425
|
|
|
—
|
|
|
3,004,067
|
|
|||||
Other assets, net
|
|
5,003,096
|
|
|
914,823
|
|
|
1,442,436
|
|
|
(6,970,326
|
)
|
|
390,029
|
|
|||||
Total assets
|
|
$
|
5,840,217
|
|
|
$
|
5,198,871
|
|
|
$
|
3,671,160
|
|
|
$
|
(9,140,963
|
)
|
|
$
|
5,569,285
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable
|
|
$
|
1,817,963
|
|
|
$
|
374,468
|
|
|
$
|
185,931
|
|
|
$
|
(2,143,033
|
)
|
|
$
|
235,329
|
|
Accrued liabilities
|
|
9,117
|
|
|
163,167
|
|
|
142,633
|
|
|
(27,604
|
)
|
|
287,313
|
|
|||||
Total current liabilities
|
|
1,827,080
|
|
|
537,635
|
|
|
328,564
|
|
|
(2,170,637
|
)
|
|
522,642
|
|
|||||
Long-term debt, net
|
|
747,259
|
|
|
744,405
|
|
|
—
|
|
|
(733,516
|
)
|
|
758,148
|
|
|||||
Deferred income taxes
|
|
—
|
|
|
513,692
|
|
|
68,478
|
|
|
(6,567
|
)
|
|
575,603
|
|
|||||
Pension and other liabilities
|
|
—
|
|
|
49,202
|
|
|
101,759
|
|
|
—
|
|
|
150,961
|
|
|||||
Total liabilities
|
|
2,574,339
|
|
|
1,844,934
|
|
|
498,801
|
|
|
(2,910,720
|
)
|
|
2,007,354
|
|
|||||
Total Westlake Chemical Corporation stockholders' equity
|
|
3,265,878
|
|
|
3,353,937
|
|
|
2,876,306
|
|
|
(6,230,243
|
)
|
|
3,265,878
|
|
|||||
Noncontrolling interests
|
|
—
|
|
|
—
|
|
|
296,053
|
|
|
—
|
|
|
296,053
|
|
|||||
Total equity
|
|
3,265,878
|
|
|
3,353,937
|
|
|
3,172,359
|
|
|
(6,230,243
|
)
|
|
3,561,931
|
|
|||||
Total liabilities and equity
|
|
$
|
5,840,217
|
|
|
$
|
5,198,871
|
|
|
$
|
3,671,160
|
|
|
$
|
(9,140,963
|
)
|
|
$
|
5,569,285
|
|
|
|
Westlake
Chemical
Corporation
|
|
100% Owned
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Statement of Operations
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
|
$
|
—
|
|
|
$
|
775,474
|
|
|
$
|
823,238
|
|
|
$
|
(319,684
|
)
|
|
$
|
1,279,028
|
|
Cost of sales
|
|
—
|
|
|
677,085
|
|
|
714,365
|
|
|
(314,555
|
)
|
|
1,076,895
|
|
|||||
Gross profit
|
|
—
|
|
|
98,389
|
|
|
108,873
|
|
|
(5,129
|
)
|
|
202,133
|
|
|||||
Selling, general and administrative expenses
|
|
2,092
|
|
|
31,180
|
|
|
44,586
|
|
|
(5,129
|
)
|
|
72,729
|
|
|||||
Transaction and integration-related costs
|
|
—
|
|
|
35,379
|
|
|
47,462
|
|
|
—
|
|
|
82,841
|
|
|||||
(Loss) income from operations
|
|
(2,092
|
)
|
|
31,830
|
|
|
16,825
|
|
|
—
|
|
|
46,563
|
|
|||||
Interest expense
|
|
(22,130
|
)
|
|
(10,247
|
)
|
|
(9,117
|
)
|
|
17,128
|
|
|
(24,366
|
)
|
|||||
Other income (expense), net
|
|
35,405
|
|
|
(8,622
|
)
|
|
31,610
|
|
|
(17,128
|
)
|
|
41,265
|
|
|||||
Income before income taxes
|
|
11,183
|
|
|
12,961
|
|
|
39,318
|
|
|
—
|
|
|
63,462
|
|
|||||
(Benefit from) provision for income taxes
|
|
(2,088
|
)
|
|
18,987
|
|
|
(23,451
|
)
|
|
—
|
|
|
(6,552
|
)
|
|||||
Equity in net income of subsidiaries
|
|
52,391
|
|
|
—
|
|
|
—
|
|
|
(52,391
|
)
|
|
—
|
|
|||||
Net income (loss)
|
|
65,662
|
|
|
(6,026
|
)
|
|
62,769
|
|
|
(52,391
|
)
|
|
70,014
|
|
|||||
Net income attributable to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
4,352
|
|
|
—
|
|
|
4,352
|
|
|||||
Net income (loss) attributable to Westlake Chemical Corporation
|
|
$
|
65,662
|
|
|
$
|
(6,026
|
)
|
|
$
|
58,417
|
|
|
$
|
(52,391
|
)
|
|
$
|
65,662
|
|
Comprehensive income (loss) attributable to Westlake Chemical Corporation
|
|
$
|
39,637
|
|
|
$
|
(5,923
|
)
|
|
$
|
45,945
|
|
|
$
|
(40,022
|
)
|
|
$
|
39,637
|
|
|
|
Westlake
Chemical
Corporation
|
|
100% Owned
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Statement of Operations
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
|
$
|
—
|
|
|
$
|
901,006
|
|
|
$
|
596,860
|
|
|
$
|
(309,829
|
)
|
|
$
|
1,188,037
|
|
Cost of sales
|
|
—
|
|
|
712,681
|
|
|
469,137
|
|
|
(305,057
|
)
|
|
876,761
|
|
|||||
Gross profit
|
|
—
|
|
|
188,325
|
|
|
127,723
|
|
|
(4,772
|
)
|
|
311,276
|
|
|||||
Selling, general and administrative expenses
|
|
804
|
|
|
37,156
|
|
|
24,060
|
|
|
(4,772
|
)
|
|
57,248
|
|
|||||
(Loss) income from operations
|
|
(804
|
)
|
|
151,169
|
|
|
103,663
|
|
|
—
|
|
|
254,028
|
|
|||||
Interest expense
|
|
(10,405
|
)
|
|
(5,711
|
)
|
|
—
|
|
|
7,905
|
|
|
(8,211
|
)
|
|||||
Other income, net
|
|
1,239
|
|
|
203
|
|
|
9,099
|
|
|
(7,905
|
)
|
|
2,636
|
|
|||||
(Loss) income before income taxes
|
|
(9,970
|
)
|
|
145,661
|
|
|
112,762
|
|
|
—
|
|
|
248,453
|
|
|||||
(Benefit from) provision for income taxes
|
|
(3,249
|
)
|
|
53,131
|
|
|
10,151
|
|
|
—
|
|
|
60,033
|
|
|||||
Equity in net income of subsidiaries
|
|
190,325
|
|
|
—
|
|
|
—
|
|
|
(190,325
|
)
|
|
—
|
|
|||||
Net income
|
|
183,604
|
|
|
92,530
|
|
|
102,611
|
|
|
(190,325
|
)
|
|
188,420
|
|
|||||
Net income attributable to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
4,816
|
|
|
—
|
|
|
4,816
|
|
|||||
Net income attributable to Westlake Chemical Corporation
|
|
$
|
183,604
|
|
|
$
|
92,530
|
|
|
$
|
97,795
|
|
|
$
|
(190,325
|
)
|
|
$
|
183,604
|
|
Comprehensive income attributable to Westlake Chemical Corporation
|
|
$
|
181,663
|
|
|
$
|
92,781
|
|
|
$
|
96,062
|
|
|
$
|
(188,843
|
)
|
|
$
|
181,663
|
|
|
|
Westlake
Chemical
Corporation
|
|
100% Owned
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Statement of Operations
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
|
$
|
—
|
|
|
$
|
2,357,769
|
|
|
$
|
1,945,866
|
|
|
$
|
(963,359
|
)
|
|
$
|
3,340,276
|
|
Cost of sales
|
|
—
|
|
|
2,018,282
|
|
|
1,570,669
|
|
|
(947,759
|
)
|
|
2,641,192
|
|
|||||
Gross profit
|
|
—
|
|
|
339,487
|
|
|
375,197
|
|
|
(15,600
|
)
|
|
699,084
|
|
|||||
Selling, general and administrative expenses
|
|
3,648
|
|
|
104,488
|
|
|
87,221
|
|
|
(15,600
|
)
|
|
179,757
|
|
|||||
Transaction and integration-related costs
|
|
—
|
|
|
43,088
|
|
|
47,462
|
|
|
—
|
|
|
90,550
|
|
|||||
(Loss) income from operations
|
|
(3,648
|
)
|
|
191,911
|
|
|
240,514
|
|
|
—
|
|
|
428,777
|
|
|||||
Interest expense
|
|
(43,228
|
)
|
|
(19,051
|
)
|
|
(9,117
|
)
|
|
34,430
|
|
|
(36,966
|
)
|
|||||
Other income (expense), net
|
|
40,807
|
|
|
(12,057
|
)
|
|
57,771
|
|
|
(34,430
|
)
|
|
52,091
|
|
|||||
(Loss) income before income taxes
|
|
(6,069
|
)
|
|
160,803
|
|
|
289,168
|
|
|
—
|
|
|
443,902
|
|
|||||
(Benefit from) provision for income taxes
|
|
(8,268
|
)
|
|
136,856
|
|
|
744
|
|
|
—
|
|
|
129,332
|
|
|||||
Equity in net income of subsidiaries
|
|
297,715
|
|
|
—
|
|
|
—
|
|
|
(297,715
|
)
|
|
—
|
|
|||||
Net income
|
|
299,914
|
|
|
23,947
|
|
|
288,424
|
|
|
(297,715
|
)
|
|
314,570
|
|
|||||
Net income attributable to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
14,656
|
|
|
—
|
|
|
14,656
|
|
|||||
Net income attributable to Westlake Chemical Corporation
|
|
$
|
299,914
|
|
|
$
|
23,947
|
|
|
$
|
273,768
|
|
|
$
|
(297,715
|
)
|
|
$
|
299,914
|
|
Comprehensive income attributable to Westlake Chemical Corporation
|
|
$
|
321,080
|
|
|
$
|
24,356
|
|
|
$
|
293,859
|
|
|
$
|
(318,215
|
)
|
|
$
|
321,080
|
|
|
|
Westlake
Chemical
Corporation
|
|
100% Owned
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Statement of Operations
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
|
$
|
—
|
|
|
$
|
2,677,773
|
|
|
$
|
1,727,561
|
|
|
$
|
(928,764
|
)
|
|
$
|
3,476,570
|
|
Cost of sales
|
|
—
|
|
|
2,078,730
|
|
|
1,362,710
|
|
|
(913,873
|
)
|
|
2,527,567
|
|
|||||
Gross profit
|
|
—
|
|
|
599,043
|
|
|
364,851
|
|
|
(14,891
|
)
|
|
949,003
|
|
|||||
Selling, general and administrative expenses
|
|
1,617
|
|
|
115,400
|
|
|
68,195
|
|
|
(14,891
|
)
|
|
170,321
|
|
|||||
(Loss) income from operations
|
|
(1,617
|
)
|
|
483,643
|
|
|
296,656
|
|
|
—
|
|
|
778,682
|
|
|||||
Interest expense
|
|
(31,726
|
)
|
|
(18,353
|
)
|
|
—
|
|
|
23,319
|
|
|
(26,760
|
)
|
|||||
Other income (expense), net
|
|
17,627
|
|
|
(4,743
|
)
|
|
44,225
|
|
|
(23,319
|
)
|
|
33,790
|
|
|||||
(Loss) income before income taxes
|
|
(15,716
|
)
|
|
460,547
|
|
|
340,881
|
|
|
—
|
|
|
785,712
|
|
|||||
(Benefit from) provision for income taxes
|
|
(5,226
|
)
|
|
222,743
|
|
|
19,307
|
|
|
—
|
|
|
236,824
|
|
|||||
Equity in net income of subsidiaries
|
|
545,531
|
|
|
—
|
|
|
—
|
|
|
(545,531
|
)
|
|
—
|
|
|||||
Net income
|
|
535,041
|
|
|
237,804
|
|
|
321,574
|
|
|
(545,531
|
)
|
|
548,888
|
|
|||||
Net income attributable to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
13,847
|
|
|
—
|
|
|
13,847
|
|
|||||
Net income attributable to Westlake Chemical Corporation
|
|
$
|
535,041
|
|
|
$
|
237,804
|
|
|
$
|
307,727
|
|
|
$
|
(545,531
|
)
|
|
$
|
535,041
|
|
Comprehensive income attributable to Westlake Chemical Corporation
|
|
$
|
492,609
|
|
|
$
|
238,433
|
|
|
$
|
264,542
|
|
|
$
|
(502,975
|
)
|
|
$
|
492,609
|
|
|
|
Westlake
Chemical
Corporation
|
|
100% Owned
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Statement of Cash Flows
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
|
$
|
299,914
|
|
|
$
|
23,947
|
|
|
$
|
288,424
|
|
|
$
|
(297,715
|
)
|
|
$
|
314,570
|
|
Adjustments to reconcile net income to net cash (used for)
provided by operating activities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Depreciation and amortization
|
|
747
|
|
|
98,658
|
|
|
128,806
|
|
|
—
|
|
|
228,211
|
|
|||||
Deferred income taxes
|
|
(5,178
|
)
|
|
111,795
|
|
|
(707
|
)
|
|
—
|
|
|
105,910
|
|
|||||
Net changes in working capital and other
|
|
(314,423
|
)
|
|
93,280
|
|
|
(181,103
|
)
|
|
297,715
|
|
|
(104,531
|
)
|
|||||
Net cash (used for) provided by operating activities
|
|
(18,940
|
)
|
|
327,680
|
|
|
235,420
|
|
|
—
|
|
|
544,160
|
|
|||||
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Acquisition of business, net of cash acquired
|
|
—
|
|
|
—
|
|
|
(2,437,829
|
)
|
|
—
|
|
|
(2,437,829
|
)
|
|||||
Additions to cost method investment
|
|
—
|
|
|
—
|
|
|
(4,000
|
)
|
|
—
|
|
|
(4,000
|
)
|
|||||
Additions to property, plant and equipment
|
|
—
|
|
|
(163,579
|
)
|
|
(303,751
|
)
|
|
—
|
|
|
(467,330
|
)
|
|||||
Proceeds from disposition of assets
|
|
—
|
|
|
48
|
|
|
165
|
|
|
—
|
|
|
213
|
|
|||||
Proceeds from sales and maturities of securities
|
|
658,338
|
|
|
—
|
|
|
4,600
|
|
|
—
|
|
|
662,938
|
|
|||||
Purchase of securities
|
|
(138,422
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(138,422
|
)
|
|||||
Settlements of derivative instruments
|
|
—
|
|
|
(4,655
|
)
|
|
—
|
|
|
—
|
|
|
(4,655
|
)
|
|||||
Net cash provided by (used for) investing activities
|
|
519,916
|
|
|
(168,186
|
)
|
|
(2,740,815
|
)
|
|
—
|
|
|
(2,389,085
|
)
|
|||||
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Intercompany financing
|
|
(2,242,604
|
)
|
|
(366,639
|
)
|
|
2,609,243
|
|
|
—
|
|
|
—
|
|
|||||
Capitalized debt issuance costs
|
|
(33,617
|
)
|
|
—
|
|
|
(1,590
|
)
|
|
—
|
|
|
(35,207
|
)
|
|||||
Dividends paid
|
|
(71,933
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(71,933
|
)
|
|||||
Distributions paid
|
|
—
|
|
|
202,211
|
|
|
(214,511
|
)
|
|
—
|
|
|
(12,300
|
)
|
|||||
Proceeds from debt issuance
|
|
1,428,512
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,428,512
|
|
|||||
Proceeds from exercise of stock options
|
|
1,650
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,650
|
|
|||||
Proceeds from issuance of notes payable
|
|
—
|
|
|
—
|
|
|
5,597
|
|
|
—
|
|
|
5,597
|
|
|||||
Proceeds from term loan and drawdown of revolver
|
|
450,000
|
|
|
—
|
|
|
150,000
|
|
|
—
|
|
|
600,000
|
|
|||||
Restricted cash associated with term loan
|
|
—
|
|
|
—
|
|
|
(154,000
|
)
|
|
—
|
|
|
(154,000
|
)
|
|
|
Westlake
Chemical
Corporation
|
|
100% Owned
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Repayment of notes payable
|
|
—
|
|
|
—
|
|
|
(10,602
|
)
|
|
—
|
|
|
(10,602
|
)
|
|||||
Repayment of revolver
|
|
(125,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(125,000
|
)
|
|||||
Repurchase of common stock for treasury
|
|
(67,406
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(67,406
|
)
|
|||||
Windfall tax benefits from share-based payment arrangements
|
|
1,190
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,190
|
|
|||||
Net cash (used for) provided by financing activities
|
|
(659,208
|
)
|
|
(164,428
|
)
|
|
2,384,137
|
|
|
—
|
|
|
1,560,501
|
|
|||||
Effect of exchange rate changes on cash and cash equivalents
|
|
—
|
|
|
—
|
|
|
2,418
|
|
|
—
|
|
|
2,418
|
|
|||||
Net decrease in cash and cash equivalents
|
|
(158,232
|
)
|
|
(4,934
|
)
|
|
(118,840
|
)
|
|
—
|
|
|
(282,006
|
)
|
|||||
Cash and cash equivalents at beginning of period
|
|
303,131
|
|
|
6,818
|
|
|
352,576
|
|
|
—
|
|
|
662,525
|
|
|||||
Cash and cash equivalents at end of period
|
|
$
|
144,899
|
|
|
$
|
1,884
|
|
|
$
|
233,736
|
|
|
$
|
—
|
|
|
$
|
380,519
|
|
|
|
Westlake
Chemical
Corporation
|
|
100% Owned
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Statement of Cash Flows
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
|
$
|
535,041
|
|
|
$
|
237,804
|
|
|
$
|
321,574
|
|
|
$
|
(545,531
|
)
|
|
$
|
548,888
|
|
Adjustments to reconcile net income to net cash (used for)
provided by operating activities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Depreciation and amortization
|
|
1,504
|
|
|
81,770
|
|
|
98,459
|
|
|
—
|
|
|
181,733
|
|
|||||
Deferred income taxes
|
|
87
|
|
|
3,972
|
|
|
3,526
|
|
|
—
|
|
|
7,585
|
|
|||||
Net changes in working capital and other
|
|
(567,137
|
)
|
|
110,574
|
|
|
14,126
|
|
|
545,531
|
|
|
103,094
|
|
|||||
Net cash (used for) provided by operating activities
|
|
(30,505
|
)
|
|
434,120
|
|
|
437,685
|
|
|
—
|
|
|
841,300
|
|
|||||
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Acquisition of business, net of cash acquired
|
|
—
|
|
|
—
|
|
|
15,782
|
|
|
—
|
|
|
15,782
|
|
|||||
Additions to property, plant and equipment
|
|
—
|
|
|
(137,844
|
)
|
|
(191,392
|
)
|
|
—
|
|
|
(329,236
|
)
|
|||||
Proceeds from disposition of assets
|
|
—
|
|
|
—
|
|
|
17
|
|
|
—
|
|
|
17
|
|
|||||
Proceeds from disposition of equity method investment
|
|
—
|
|
|
27,865
|
|
|
—
|
|
|
—
|
|
|
27,865
|
|
|||||
Proceeds from sales and maturities of securities
|
|
16,056
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16,056
|
|
|||||
Purchase of securities
|
|
(282,542
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(282,542
|
)
|
|||||
Settlements of derivative instruments
|
|
—
|
|
|
(1,535
|
)
|
|
—
|
|
|
—
|
|
|
(1,535
|
)
|
|||||
Net cash used for investing activities
|
|
(266,486
|
)
|
|
(111,514
|
)
|
|
(175,593
|
)
|
|
—
|
|
|
(553,593
|
)
|
|||||
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Intercompany financing
|
|
467,360
|
|
|
(570,217
|
)
|
|
102,857
|
|
|
—
|
|
|
—
|
|
|||||
Dividends paid
|
|
(67,852
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(67,852
|
)
|
|||||
Distributions paid
|
|
—
|
|
|
249,999
|
|
|
(260,981
|
)
|
|
—
|
|
|
(10,982
|
)
|
|||||
Proceeds from exercise of stock options
|
|
984
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
984
|
|
|||||
Proceeds from issuance of notes payable
|
|
—
|
|
|
—
|
|
|
19,483
|
|
|
—
|
|
|
19,483
|
|
|||||
Repayment of notes payable
|
|
—
|
|
|
—
|
|
|
(32,954
|
)
|
|
—
|
|
|
(32,954
|
)
|
|||||
Repurchase of common stock for treasury
|
|
(114,254
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(114,254
|
)
|
|||||
Windfall tax benefits from share-based payment arrangements
|
|
2,452
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,452
|
|
|||||
Net cash provided by (used for) financing activities
|
|
288,690
|
|
|
(320,218
|
)
|
|
(171,595
|
)
|
|
—
|
|
|
(203,123
|
)
|
|
|
Westlake
Chemical
Corporation
|
|
100% Owned
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Effect of exchange rate changes on cash and cash equivalents
|
|
—
|
|
|
—
|
|
|
(3,260
|
)
|
|
—
|
|
|
(3,260
|
)
|
|||||
Net (decrease) increase in cash and cash equivalents
|
|
(8,301
|
)
|
|
2,388
|
|
|
87,237
|
|
|
—
|
|
|
81,324
|
|
|||||
Cash and cash equivalents at beginning of period
|
|
655,947
|
|
|
3,047
|
|
|
221,607
|
|
|
—
|
|
|
880,601
|
|
|||||
Cash and cash equivalents at end of period
|
|
$
|
647,646
|
|
|
$
|
5,435
|
|
|
$
|
308,844
|
|
|
$
|
—
|
|
|
$
|
961,925
|
|
Item 2.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
(dollars in thousands, except per share data)
|
||||||||||||||
Net external sales
|
|
|
|
|
|
|
|
|
||||||||
Olefins
|
|
|
|
|
|
|
|
|
||||||||
Polyethylene
|
|
$
|
380,810
|
|
|
$
|
423,631
|
|
|
$
|
1,098,500
|
|
|
$
|
1,283,545
|
|
Styrene, feedstock and other
|
|
116,555
|
|
|
164,466
|
|
|
324,369
|
|
|
508,507
|
|
||||
Total Olefins
|
|
497,365
|
|
|
588,097
|
|
|
1,422,869
|
|
|
1,792,052
|
|
||||
Vinyls
|
|
|
|
|
|
|
|
|
||||||||
PVC, caustic soda and other
|
|
599,276
|
|
|
468,235
|
|
|
1,492,650
|
|
|
1,315,101
|
|
||||
Building products
|
|
182,387
|
|
|
131,705
|
|
|
424,757
|
|
|
369,417
|
|
||||
Total Vinyls
|
|
781,663
|
|
|
599,940
|
|
|
1,917,407
|
|
|
1,684,518
|
|
||||
Total
|
|
$
|
1,279,028
|
|
|
$
|
1,188,037
|
|
|
$
|
3,340,276
|
|
|
$
|
3,476,570
|
|
|
|
|
|
|
|
|
|
|
||||||||
Income (loss) from operations
|
|
|
|
|
|
|
|
|
||||||||
Olefins
|
|
$
|
118,475
|
|
|
$
|
196,703
|
|
|
$
|
408,274
|
|
|
$
|
608,744
|
|
Vinyls
|
|
22,235
|
|
|
67,779
|
|
|
136,559
|
|
|
202,831
|
|
||||
Corporate and other
|
|
(94,147
|
)
|
|
(10,454
|
)
|
|
(116,056
|
)
|
|
(32,893
|
)
|
||||
Total income from operations
|
|
46,563
|
|
|
254,028
|
|
|
428,777
|
|
|
778,682
|
|
||||
Interest expense
|
|
(24,366
|
)
|
|
(8,211
|
)
|
|
(36,966
|
)
|
|
(26,760
|
)
|
||||
Other income, net
|
|
41,265
|
|
|
2,636
|
|
|
52,091
|
|
|
33,790
|
|
||||
(Benefit from) provision for income taxes
|
|
(6,552
|
)
|
|
60,033
|
|
|
129,332
|
|
|
236,824
|
|
||||
Net income
|
|
70,014
|
|
|
188,420
|
|
|
314,570
|
|
|
548,888
|
|
||||
Net income attributable to noncontrolling interests
|
|
4,352
|
|
|
4,816
|
|
|
14,656
|
|
|
13,847
|
|
||||
Net income attributable to
Westlake Chemical Corporation
|
|
$
|
65,662
|
|
|
$
|
183,604
|
|
|
$
|
299,914
|
|
|
$
|
535,041
|
|
Diluted earnings per share
|
|
$
|
0.51
|
|
|
$
|
1.39
|
|
|
$
|
2.29
|
|
|
$
|
4.02
|
|
EBITDA
(1)
|
|
$
|
182,057
|
|
|
$
|
317,912
|
|
|
$
|
708,061
|
|
|
$
|
992,701
|
|
(1)
|
See "Reconciliation of EBITDA to Net Income and to Net Cash Provided by Operating Activities" below.
|
|
|
Three Months Ended September 30, 2016
|
|
Nine Months Ended September 30, 2016
|
||||||||
|
|
Average
Sales Price |
|
Volume
|
|
Average
Sales Price |
|
Volume
|
||||
Product sales price and volume percentage change
from prior-year period
|
|
|
|
|
|
|
|
|
||||
Olefins
|
|
-6.3
|
%
|
|
-9.1
|
%
|
|
-12.0
|
%
|
|
-8.6
|
%
|
Vinyls
|
|
-3.0
|
%
|
|
+33.3
|
%
|
|
-5.7
|
%
|
|
+19.5
|
%
|
Company average
|
|
-4.6
|
%
|
|
+12.3
|
%
|
|
-8.9
|
%
|
|
+5.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||
Average industry prices
(1)
|
|
|
|
|
|
|
|
|
||||
Ethane (cents/lb)
|
|
6.3
|
|
|
6.4
|
|
|
6.2
|
|
|
6.3
|
|
Propane (cents/lb)
|
|
11.2
|
|
|
9.6
|
|
|
10.7
|
|
|
11.0
|
|
Ethylene (cents/lb)
(2)
|
|
32.5
|
|
|
28.2
|
|
|
26.5
|
|
|
33.6
|
|
Polyethylene (cents/lb)
(3)
|
|
68.7
|
|
|
72.3
|
|
|
65.3
|
|
|
73.8
|
|
Styrene (cents/lb)
(4)
|
|
66.8
|
|
|
64.2
|
|
|
63.3
|
|
|
61.4
|
|
Caustic soda ($/short ton)
(5)
|
|
660.8
|
|
|
563.3
|
|
|
618.3
|
|
|
576.1
|
|
Chlorine ($/short ton)
(6)
|
|
304.2
|
|
|
275.0
|
|
|
295.3
|
|
|
260.8
|
|
PVC (cents/lb)
(7)
|
|
71.5
|
|
|
66.5
|
|
|
68.8
|
|
|
66.5
|
|
(1)
|
Industry pricing data was obtained from IHS Chemical. We have not independently verified the data.
|
(2)
|
Represents average North American spot prices of ethylene over the period as reported by IHS Chemical.
|
(3)
|
Represents average North American net transaction prices of polyethylene low density GP-Film grade over the period as reported by IHS Chemical.
|
(4)
|
Represents average North American contract prices of styrene over the period as reported by IHS Chemical.
|
(5)
|
Represents average North American undiscounted contract prices of caustic soda over the period as reported by IHS Chemical.
|
(6)
|
Represents average North American contract prices of chlorine (into chemicals) over the period as reported by IHS Chemical.
|
(7)
|
Represents average North American contract prices of PVC over the period as reported by IHS Chemical.
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
(dollars in thousands)
|
||||||||||||||
EBITDA
|
|
$
|
182,057
|
|
|
$
|
317,912
|
|
|
$
|
708,061
|
|
|
$
|
992,701
|
|
Less:
|
|
|
|
|
|
|
|
|
||||||||
(Benefit from) provision for income taxes
|
|
(6,552
|
)
|
|
60,033
|
|
|
129,332
|
|
|
236,824
|
|
||||
Interest expense
|
|
24,366
|
|
|
8,211
|
|
|
36,966
|
|
|
26,760
|
|
||||
Depreciation and amortization
|
|
94,229
|
|
|
61,248
|
|
|
227,193
|
|
|
180,229
|
|
||||
Net income
|
|
70,014
|
|
|
188,420
|
|
|
314,570
|
|
|
548,888
|
|
||||
Changes in operating assets and liabilities and other
|
|
101,334
|
|
|
213,028
|
|
|
123,680
|
|
|
284,827
|
|
||||
Deferred income taxes
|
|
2,920
|
|
|
4,497
|
|
|
105,910
|
|
|
7,585
|
|
||||
Net cash provided by operating activities
|
|
$
|
174,268
|
|
|
$
|
405,945
|
|
|
$
|
544,160
|
|
|
$
|
841,300
|
|
•
|
future operating rates, margins, cash flow and demand for our products;
|
•
|
industry market outlook, including the price of crude oil;
|
•
|
production capacities;
|
•
|
currency devaluation;
|
•
|
our ability to borrow additional funds under the 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 industry;
|
•
|
timing, funding and results of capital projects, such as the expansion program at our Calvert City facility;
|
•
|
results of acquisitions, including our acquisition of Axiall (including the benefits, results and effects thereof);
|
•
|
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 gases emissions or to address other issues of climate change;
|
•
|
effects of pending legal proceedings; and
|
•
|
timing of and amount of capital expenditures.
|
•
|
general economic and business conditions;
|
•
|
the cyclical nature of the chemical industry;
|
•
|
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 unrest in the Middle East, the Commonwealth of Independent States (including Ukraine) and elsewhere;
|
•
|
current and potential governmental regulatory actions in the United States and other countries and political unrest in other areas;
|
•
|
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;
|
•
|
technological developments;
|
•
|
our ability to realize anticipated benefits of the Merger and to integrate Axiall's business;
|
•
|
charges or other liabilities relating to the Merger;
|
•
|
the significant indebtedness that we have incurred in connection with the Merger;
|
•
|
our ability to integrate acquired businesses other than Axiall;
|
•
|
foreign currency exchange risks;
|
•
|
our ability to implement our business strategies; and
|
•
|
creditworthiness of our customers.
|
Item 3.
|
Quantitative and Qualitative Disclosures about Market Risk
|
Item 4.
|
Controls and Procedures
|
Item 1.
|
Legal Proceedings
|
Item 1A.
|
Risk Factors
|
•
|
the diversion of management's attention to integration matters;
|
•
|
difficulties in achieving anticipated cost savings, synergies, business opportunities and growth prospects from combining Axiall's business with our business;
|
•
|
difficulties entering new markets or manufacturing in new geographies where we have no or limited direct prior experience;
|
•
|
difficulties in the integration of operations and systems;
|
•
|
difficulties in the assimilation of employees;
|
•
|
difficulties in managing the expanded operations of a significantly larger and more complex company;
|
•
|
successfully managing relationships with our strategic partners and our supplier and customer base;
|
•
|
challenges in maintaining existing, and establishing new, business relationships; and
|
•
|
challenges in attracting and retaining key personnel.
|
•
|
a portion of our cash flow from operations will be dedicated to the payment of interest and principal on our debt and will not be available for other purposes, including the payment of dividends;
|
•
|
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 flow 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
|
•
|
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.
|
•
|
pay dividends on, redeem or repurchase our capital stock;
|
•
|
make investments and other restricted payments;
|
•
|
incur additional indebtedness or issue preferred stock;
|
•
|
create liens;
|
•
|
permit dividend or other payment restrictions on our restricted subsidiaries;
|
•
|
sell all or substantially all of our assets or consolidate or merge with or into other companies;
|
•
|
engage in transactions with affiliates; and
|
•
|
engage in sale-leaseback transactions.
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
Period
|
|
Total Number
of Shares
Purchased
(1)
|
|
Average Price
Paid Per
Share
|
|
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)
|
||||||
July 2016
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
171,285,000
|
|
August 2016
|
|
16,613
|
|
|
$
|
51.91
|
|
|
—
|
|
|
$
|
171,285,000
|
|
September 2016
|
|
13,212
|
|
|
$
|
51.11
|
|
|
—
|
|
|
$
|
171,285,000
|
|
|
|
29,825
|
|
|
$
|
51.56
|
|
|
—
|
|
|
|
(1)
|
Represents shares withheld in satisfaction of withholding taxes due upon the vesting of restricted stock and restricted stock units granted to our employees under the 2013 Plan.
|
(2)
|
In November 2014, our Board of Directors authorized a $250.0 million share repurchase program (the "2014 Program"). In November 2015, our Board of Directors approved the expansion of the 2014 Program by an additional $150.0 million. As of
September 30, 2016
,
4,193,598
shares of common stock had been acquired at an aggregate purchase price of approximately
$228.7 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 flow from operations, general market conditions and other factors. The 2014 Program may be discontinued by our Board of Directors at any time.
|
Item 6.
|
Exhibits
|
Exhibit No.
|
|
|
|
|
|
4.1
|
|
Eighth Supplemental Indenture (including the form of the Notes), dated as of August 10, 2016, among Westlake Chemical Corporation, the Guarantors (as defined therein) and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.2 to Westlake's Current Report on Form 8-K, filed on August 10, 2016, File No. 001-32260)
|
|
|
|
4.2
|
|
Fourth Supplemental Indenture, dated as of August 22, 2016, to the Indenture, dated as of February 1, 2013, by and among Axiall Corporation, the guarantors party thereto and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to Axiall's Current Report on Form 8-K, filed on August 22, 2016, File No. 001-09753)
|
|
|
|
4.3
|
|
Fifth Supplemental Indenture, dated as of August 22, 2016, to the Indenture, dated as of January 28, 2013, by and among Eagle Spinco, Inc., the guarantors party thereto and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.2 to Axiall's Current Report on Form 8-K, filed on August 22, 2016, File No. 001-09753)
|
|
|
|
4.4
|
|
Ninth Supplemental Indenture (including the form of the Notes) as of September 7, 2016, among Westlake Chemical Corporation, the Guarantors (as defined therein) and the Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.2 to Westlake's Current Report on Form 8-K, filed on September 7, 2016, File No. 001-32260)
|
|
|
|
4.5
|
|
Indenture dated as of September 8, 2016 by and among Westlake and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.4 to Westlake's Registration Statement on Form S-3, filed on September 8, 2016, File No. 333-213548)
|
|
|
|
10.1
|
|
Registration Rights Agreement, dated as of August 10, 2016, among Westlake Chemical Corporation, the Guarantors (as defined therein) and Deutsche Bank Securities Inc. and Goldman Sachs & Co., as representatives of the Initial Purchasers (as defined therein) (incorporated by reference to Exhibit 4.3 to Westlake's Current Report on Form 8-K, filed on August 10, 2016, File No. 001-32260)
|
|
|
|
10.2
|
|
Registration Rights Agreement, dated as of September 7, 2016, among Westlake Chemical Corporation, the Guarantors (as defined therein) and Deutsche Bank Securities Inc. and Goldman, Sachs & Co., as dealer managers (incorporated by reference to Exhibit 4.3 to Westlake's Current Report on Form 8-K, filed on September 7, 2016, File No. 001-32260)
|
|
|
|
10.3†
|
|
Credit Agreement, dated as of August 10, 2016, by and between Bank of America, N.A. and Westlake International Holdings II C.V.
|
|
|
|
10.4
|
|
Credit Agreement dated as of August 23, 2016, by and among Westlake Chemical Corporation, the other borrowers and guarantors referred to therein, the lenders from time to time party thereto, the issuing banks party thereto and JPMorgan Chase Bank, National Association, as Administrative Agent, relating to a $1 billion senior unsecured revolving credit facility (incorporated by reference to Exhibit 10.1 to Westlake's Current Report on Form 8-K, filed on August 24, 2016, File No. 001-32260)
|
|
|
|
31.1†
|
|
Rule 13a – 14(a) / 15d – 14(a) Certification (Principal Executive Officer)
|
|
|
|
31.2†
|
|
Rule 13a – 14(a) / 15d – 14(a) Certification (Principal Financial Officer)
|
|
|
|
32.1#
|
|
Section 1350 Certification (Principal Executive Officer and Principal Financial Officer)
|
|
|
|
101.INS†
|
|
XBRL Instance Document
|
|
|
|
101.SCH†
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
101.CAL†
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
101.DEF†
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
101.LAB†
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
101.PRE†
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
†
|
Filed herewith.
|
#
|
Furnished herewith.
|
|
|
|
|
WESTLAKE CHEMICAL CORPORATION
|
||
|
|
|
|
|||
Date:
|
November 9, 2016
|
|
|
By:
|
|
/
S
/ A
LBERT
C
HAO
|
|
|
|
|
|
|
Albert Chao
|
|
|
|
|
|
|
President and Chief Executive Officer
(Principal Executive Officer)
|
|
|
|
|
|||
Date:
|
November 9, 2016
|
|
|
By:
|
|
/
S
/ M. S
TEVEN
B
ENDER
|
|
|
|
|
|
|
M. Steven Bender
|
|
|
|
|
|
|
Senior Vice President, Chief Financial Officer
and Treasurer
(Principal Financial Officer)
|
Exhibit No.
|
|
Exhibit
|
|
|
|
4.1
|
|
Eighth Supplemental Indenture (including the form of the Notes), dated as of August 10, 2016, among Westlake Chemical Corporation, the Guarantors (as defined therein) and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.2 to Westlake's Current Report on Form 8-K, filed on August 10, 2016, File No. 001-32260)
|
|
|
|
4.2
|
|
Fourth Supplemental Indenture, dated as of August 22, 2016, to the Indenture, dated as of February 1, 2013, by and among Axiall Corporation, the guarantors party thereto and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to Axiall's Current Report on Form 8-K, filed on August 22, 2016, File No. 001-09753)
|
|
|
|
4.3
|
|
Fifth Supplemental Indenture, dated as of August 22, 2016, to the Indenture, dated as of January 28, 2013, by and among Eagle Spinco, Inc., the guarantors party thereto and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.2 to Axiall's Current Report on Form 8-K, filed on August 22, 2016, File No. 001-09753)
|
|
|
|
4.4
|
|
Ninth Supplemental Indenture (including the form of the Notes) as of September 7, 2016, among Westlake Chemical Corporation, the Guarantors (as defined therein) and the Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.2 to Westlake's Current Report on Form 8-K, filed on September 7, 2016, File No. 001-32260)
|
|
|
|
4.5
|
|
Indenture dated as of September 8, 2016 by and among Westlake and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.4 to Westlake's Registration Statement on Form S-3, filed on September 8, 2016, File No. 333-213548)
|
|
|
|
10.1
|
|
Registration Rights Agreement, dated as of August 10, 2016, among Westlake Chemical Corporation, the Guarantors (as defined therein) and Deutsche Bank Securities Inc. and Goldman Sachs & Co., as representatives of the Initial Purchasers (as defined therein) (incorporated by reference to Exhibit 4.3 to Westlake's Current Report on Form 8-K, filed on August 10, 2016, File No. 001-32260)
|
|
|
|
10.2
|
|
Registration Rights Agreement, dated as of September 7, 2016, among Westlake Chemical Corporation, the Guarantors (as defined therein) and Deutsche Bank Securities Inc. and Goldman, Sachs & Co., as dealer managers (incorporated by reference to Exhibit 4.3 to Westlake's Current Report on Form 8-K, filed on September 7, 2016, File No. 001-32260)
|
|
|
|
10.3†
|
|
Credit Agreement, dated as of August 10, 2016, by and between Bank of America, N.A. and Westlake International Holdings II C.V.
|
|
|
|
10.4
|
|
Credit Agreement dated as of August 23, 2016, by and among Westlake Chemical Corporation, the other borrowers and guarantors referred to therein, the lenders from time to time party thereto, the issuing banks party thereto and JPMorgan Chase Bank, National Association, as Administrative Agent, relating to a $1 billion senior unsecured revolving credit facility (incorporated by reference to Exhibit 10.1 to Westlake's Current Report on Form 8-K, filed on August 24, 2016, File No. 001-32260)
|
|
|
|
31.1†
|
|
Rule 13a – 14(a) / 15d – 14(a) Certification (Principal Executive Officer)
|
|
|
|
31.2†
|
|
Rule 13a – 14(a) / 15d – 14(a) Certification (Principal Financial Officer)
|
|
|
|
32.1#
|
|
Section 1350 Certification (Principal Executive Officer and Principal Financial Officer)
|
|
|
|
101.INS†
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XBRL Instance Document
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101.SCH†
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XBRL Taxonomy Extension Schema Document
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101.CAL†
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XBRL Taxonomy Extension Calculation Linkbase Document
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101.DEF†
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XBRL Taxonomy Extension Definition Linkbase Document
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101.LAB†
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XBRL Taxonomy Extension Label Linkbase Document
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101.PRE†
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XBRL Taxonomy Extension Presentation Linkbase Document
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†
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Filed herewith.
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#
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Furnished herewith.
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No information found
* THE VALUE IS THE MARKET VALUE AS OF THE LAST DAY OF THE QUARTER FOR WHICH THE 13F WAS FILED.
FUND | NUMBER OF SHARES | VALUE ($) | PUT OR CALL |
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DIRECTORS | AGE | BIO | OTHER DIRECTOR MEMBERSHIPS |
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No information found
Customers
No Suppliers Found
Price
Yield
Owner | Position | Direct Shares | Indirect Shares |
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