Westlake Corporation

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the Westlake Chemical Corporation third quarter 2021 earnings conference call. During the presentation, all participants will be in a listen-only mode. After the speaker's remarks, you will be invited to participate in the question and answer session. As a reminder, ladies and gentlemen, this conference is being recorded today, November 2nd, 2021. I will now like to turn the call over to your host, Jeff Hawley, Westlake's Vice President and Treasurer. Sir, you may begin.

Thank you. Good morning, everyone, and welcome to the Westlake Chemical Corporation third 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'll 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 Olyphant's 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 can 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 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 third 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 third quarter. 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 249-5584. Please note that information reported on this call speaks only as of today, November 2, 2021. And therefore, you are 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 Chow. Albert? Thank you, Jeff.

Good morning, everyone. We appreciate you joining us to discuss our record quarterly results. In this morning's press release for the third quarter of 2021, we reported another quarter of record net income of $607 million, or $4.69 diluted share, as well as quarterly records for net sales, operating income, and EBITDA. Net income for the quarter increased $550 million from the third quarter of 2020, reflecting the continued strong demand for most of our products, driving a strong pricing environment. I'm very proud of the Westlake team for delivering these results, despite the impact from Hurricane Ida on our operations in the third quarter, as well as global supply chain constraints on our building products business. Strong demand dynamics in PVC, caustic soda, and polyethylene created a healthy pricing dynamic which contributed to our expanding margins. The strong and broad market momentum in global construction driven by tight supply demand balances across our key products drove higher earned pricing and strong margins year over year in both our vinyls and building products businesses. Our olefin segment benefited from a continuation of strong margins and solid volume gains year over year as the polyethylene industry experienced robust global consumer packaging product demand and tight inventories. This momentum in margins also continued from the second quarter into the third quarter in spite of a planned maintenance outage. The strong long-term prospects of the U.S. housing market and favorable demographics supporting continued housing growth along with broad demand in U.S. repair and remodeling expenditures provide for the compelling growth opportunities in our building products business. Our recently completed acquisitions in building products greatly expands our product offering with leading brands to meet these market opportunities. In August, we completed the acquisition of Lasco Fittings, a leading manufacturer of injection molded PVC pipe fittings. Lasco brings additional markets serving the plumbing, pool and spa, industrial, irrigation, and retail markets in North America, and is complementary to our existing product portfolio of PVC pipe and larger diameter fittings. In September, we acquired Dymax, one of the largest processors of post-industrial recycled plastic material in the U.S. This acquisition further expands Westlake's product portfolio to include a variety of consumer products made from processed post-industrial recycled PVC, polyethylene, and thermoplastics elastomer, and sells these consumer products throughout the nation in big box home improvement retailers and online through nationally known e-commerce platforms. In October, we completed the acquisition of Borough North America's building products business. This acquisition places Westlake into industry-leading positions, serving the housing market in concrete and clay roofing, premium siding trim and shutters, decorated stone and vinyl windows. These transactions transform our existing building products business into new strategic product platforms which offer market innovative leading brands of exterior building products designed to enhance customers' satisfaction. These products improve the energy efficiency, durability, and value in residential housing, schools, hospitals, and other buildings. We are pleased to welcome our new fellow employees from Borough Dimex, and Lasco to Westlake. These transactions are transformative and bring significant value benefits to Westlake through their attractive financial attributes and market-leading product platforms serving the housing markets. The acquisition of Dimex introduces recycled plastic products that serve the consumer markets. Approximately 50% of our building products business is oriented to the repair and remodeling markets, which have proven to be more stable and predictable over the long term. These newly acquired products and brands, when compared with Westlake's existing leading positions in PVC siding, trim and molding, compounds, PVC pipe and fittings, now provide our residential customers with a comprehensive portfolio of products and solutions which enhance the everyday lives of countless individuals. We continue to look for opportunities to expand our business while driving value for our shareholders. Westlake has made significant progress in our strategic growth plans this year, and with a strong demand picture and leading positions in building products, PVC, caustic soda, and polyethylene. 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 third quarter.