Westlake Corporation

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the Westlake Chemical Corporation second quarter 2021 earnings conference call. During this presentation, all participants will be in a listen-only mode. After the speaker's remarks, you will be invited to participate in a question and answer session. As a reminder, ladies and gentlemen, this conference is being recorded today, August 3rd, 2021. I would now like to turn the call over to today's host, Jeff Hawley, Westlake's vice president and treasurer. Sir, you may begin.

Thank you, Julia. Good morning, everyone, and welcome to the Westlake Chemical Corporation second quarter 2021 conference call. I'm joined today by Albert Chow, our president and CEO, Steve Bender, our executive vice president and chief financial officer, and other members of our management team. The conference call agenda will begin with Albert, who will open with a few comments regarding Westlake's performance and a current perspective on the industry. Steve will then provide a more detailed look at our financial and operating results. Finally, Albert will add a few concluding comments, and we will then open the call up to questions. During this call, we refer to ourselves as Westlake Chemical. Any reference to Westlake Partners is to the Master Limited Partnership Westlake Chemical Partners LP, and similar references to OPCO refer to our subsidiary, Westlake Chemical OPCO LP, which owns certain Olofens facilities. Today, management is going to discuss certain topics that will contain forward-looking information that is based on management's beliefs as well as assumptions made by and information currently available to management. These forward-looking statements suggest predictions or expectations and thus are subject to risks or uncertainties. Actual results could differ materially based upon many factors, including the cyclical nature of the industries in which we compete, availability, cost, and volatility of raw materials, energy, and utilities, governmental regulatory actions, changes in trade policy and political unrest, global economic conditions, including the impact of the coronavirus, industry production capacity and operating rates, Impacts of extreme weather events, the conditions to the closing of Boral, Lasco, and Dymex acquisitions may not be satisfied or the closing of either acquisitions otherwise may not occur. The supply-demand balance for Westlake's products, competitive products and pricing pressures, access to capital markets, technological developments, and other risk factors as discussed in our SEC filings. This morning, Westlake issued a press release with details of our second quarter results. This document is available in the press release section of our webpage at westlake.com. We have also posted a presentation on our website to review the second quarter results. A replay of today's call will be available beginning today, two hours following the conclusion of this call. This replay may be accessed by dialing the following numbers. Domestic callers should dial 855-859-2056. International callers may access the replay at 404-537-3406. The access code for both numbers is 459-4733. Please note that information reported on this call speaks only as of today, August 3, 2021, And therefore, you're advised that time-sensitive information may no longer be accurate as of the time of any replay. I would finally advise you that this conference call is being broadcast live through an internet webcast system that can be accessed on our webpage at westlake.com. Now, I would like to turn the call over to Albert Chao. Albert?

Albert Chao Thank you, Jeff. Good morning, everyone. We appreciate you joining us to discuss our record second quarter 2021 results. In this morning's press release, we reported record net income excluding prior one-time tax benefits for the second quarter of 2021 of $522 million, or $4.04 per share, as well as quarterly records for net sales, operating income, and EBITDA. Net income for the quarter increased $507 million from the second quarter of 2020. demonstrating the strength of our business amid the economic recovery and expansion from the impacts of the pandemic. Before we delve into our record results, I just wanted to make some brief comments on our recent acquisitions. Westlake's leading positions in PVC siding, trim and molding, compounds, pipe and fittings, provide our residential and commercial customers with a comprehensive building product portfolio of PVC products and solutions. We have recently announced two acquisitions in the building and construction materials space that will provide exciting new platforms of growth and development for Westlake. In June, we announced we will be acquiring Borough North America's building products business. This acquisition will place Westlake into leading positions in concrete and clay roofing, premium PVC siding, trim and shutters, decorative stone and PVC windows, creating new strategic product platforms complementary to our existing building product business. These products improve the energy efficiency, durability, and value in residential housings, schools, hospitals, and other buildings, while enhancing the everyday lives of countless individuals. Additionally, We announced in July that we will acquire Lasko Fittings, a leading manufacturer of injection molded PVC pipe fittings. The addition of Lasko will further expand our PVC fittings offering footprint into additional markets, serving the plumbing, pool and spa, industrial, irrigation, and retail markets in North America. This product mix is also complementary to our existing product portfolio of PVC pipe and larger diameter fittings. Yesterday, we announced plans to acquire Dimex LLC, one of the largest processors of recycled plastic material in the United States. Dimex is the producer of a variety of consumer products made from processed post-industrial recycled PVC, polyethylene, and thermoplastic elastomer, and sells these consumer products to national retailers for home and commercial uses. We anticipate closing these transactions in the second quarter, in the second half of this year. Look forward to welcoming Borough, LASCO, and Dymex employees to the Westlake family. Now turning to our second quarter results. Our earnings for the second quarter of 2021 reflect the robust demand for most of our products in strong pricing environment. The strength in global demand in PVC and polyethylene resulting from the growth in building and construction and the strength in consumer packaged goods drove price increases and margin expansions across both of our business segments. The 23% year-over-year increase in U.S. housing permits demonstrated the strength in residential construction activity that is driving U.S. demand for PVC, benefiting both of our rhinos and downstream building products businesses. The demographics of the U.S. population in peak household formation ages paired with the lack of housing starts over the last 10 years and limited global PVC capacity additions created secular and structural strengths in demand for PVC and building and construction materials. In our olefin segment, Wesley experienced strong margins as the polyethylene industry experienced strong ongoing global consumer packaging product demand and tight inventory conditions due to lingering effects of the severe winter storm in February. Westlake has made significant progress in our strategic growth plans this year, and with a tight supply-demand picture, we believe our businesses are very well positioned going forward. I would now like to turn our call over to Steve to provide more detail on our financial and operating results for the second quarter.