Westlake Corporation

Good morning, ladies and gentlemen. Thank you for standing by. And welcome to the Westlake Corporation first quarter 2022 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 a question and answer session. As a reminder, ladies and gentlemen, this conference is being recorded May 3rd, 2022. I would now like to turn the call over to today's host, Jeff Tolley, Westlake's Vice President and Treasurer. Sir, you may begin.

Thank you. Good morning, everyone, and welcome to the Westlake Corporation Conference call to discuss our results for the first quarter of 2022. We additionally would like to thank everyone who was able to attend our recent Investor Day, which occurred on April 7th. The webcast and presentation from the Investor Day are available in the Investor Relations section of our website for those of you who are unable to attend. I'm joined today by Albert Chow, our President and CEO, Steve Bender, our Executive Vice President and Chief Financial Officer, Roger Kearns, our Chief Operating Officer, and other members of our management team. We have included an earnings presentation, which we will reference during our call today, that can be found in the investor relations section on our website. During the call, we will refer to ourselves, our recently established reporting segments, the housing and infrastructure product segment, which we refer to as HIP, and the Performance and Essential Materials segment, which we refer to as PIM. Today's conference call will begin with Albert, who will open with a few comments regarding Westlake's performance. Steve will then discuss our financial and operating results. Albert will then add a few concluding comments, and we'll open the call up to questions. 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. These risks and uncertainties are discussed in Westlake's Form 10-K for the year ended December 31, 2021 and other SEC filings. We encourage you to learn more about these factors that could lead our actual results to differ by reviewing these SEC filings, which are also available on our investor relations website. This morning, Westlake issued a press release with details of our first quarter results. This document is available in the press release section of our website at westlake.com. 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 424-6547. Please note that information reported on this call speaks only as of today May 3rd, 2022, 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? Thank you, Jeff.

Good morning, everyone. We appreciate you joining us to discuss our first quarter 2022 results. I'm pleased to announce that we reported record results in the first quarter of 2022. We achieved record quarterly sales of $4.1 billion, record quarterly net income of $756 million, and record quarterly EBITDA of $1.3 billion. These record results were driven by the compelling attributes of Westlake we spoke about in our recent investor day including resilient earnings from a specialty portfolio with globally-advantaged cost positions, value-added branded products in growing markets, and a strong track record of acquisitions creating long-term value. We benefited from these attributes combined with end-market demand strengths in industrial and consumer packaging, housing construction, industrial manufacturing, coatings, and wind energy markets. Strong revenue growth, driven by the robust housing and construction activity, the value of our leading brands, and equally strong revenue growth in our specialty portfolio in the pen segment, driven by gains in polyethylene and PVC, as well as caustic soda, all drove record sales. The strength in these markets mitigated the impact of rising energy and raw material costs, as well as supply chain disruptions, driving record EBITDA and strong EBITDA margins in the quarter. I want to thank all of our employees for their hard work and dedication in helping us achieving these results. We complete our acquisition of Hexion's global epoxy business, effective February 1st, which has been rebranded Westlake Epoxy. This acquisition as to Westlake's scale of differentiated and specialty product portfolio with a globally advantaged fee stock and energy cost position in North America and with a long track record of operational strengths. These important attributes enable us to continue to deliver more resilient earnings in a variety of economic environments while positioning us well for the future. Since mid-2021, we invested $3.8 billion to significantly expand and drive specialization and diversify our portfolio of branded products across our businesses. These new businesses accelerate Westlake's existing capability to continue our growth and execute on our many opportunities with their attractive financial attributes, further enhancing Westlake's existing leading positions and scale. I think it's important to highlight the magnitude of the growth we have already delivered. Supported by our recent acquisitions, total year-over-year first quarter 2022 sales growth in PEN was 63%, and in HIP was 99%. Steve will provide further details on our results. The significant contribution to sales, net income, and EBITDA of these acquisitions and the magnitude of the transformation we have undertaken since 2021. We experienced margin expansion in PEM by leveraging our best-in-class cost position, driven by vertical integration and a large North American footprint with globally advantaged cost, low-cost raw material and energy. Our leading positions in chloral vinyls contributed significantly to our results this quarter. as strengths in coffee soda, PVC, and specialty PVC markets drove our margins higher. Industrial and consumer packaging demand also drove the strong results of Penn, and our specialty polyethylene, which is over 40 percent of our polyethylene capacity, made significant contributions this quarter as well. Our focus on these specialty and differentiated products provides a clear margin advantage and our product mix distinguishes us from other commodity producers. With our market leading positions in HIP, we realized significant earnings growth from our value added strong brand name product offerings with attractive secular growth trends. In the first quarter, we were able to reap the benefits of the continuation of the momentum from 2021 in North American housing and construction activity with our leading product positions and brands. These factors drove robust demand for PVC resin and building products, and our sales volumes significantly improved as we benefited from that strong demand dynamic. We are continuing to integrate the acquisitions we have made over the past year and are capturing the benefits these best businesses have brought to our greatly expanded portfolio. I would now like to turn our call over to Steve provide more detail on the financial results for the first quarter of 2022.