Westlake Corporation

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the Westlake Corporation fourth quarter and full year 2022 earnings conference call. During the presentation, all participants will be in a listen-only mode. After the speaker's remarks, you'll be invited to participate in a question and answer session. As a reminder, ladies and gentlemen, this conference is being recorded today, February 24th, 1st, 2023. I would now like to turn the call over to today's host, Jeff Holley, Westlake's Vice President and Treasurer. Sir, you may begin.

Thank you, Justin. Good morning, everyone, and welcome to the Westlake Corporation conference call to discuss our fourth quarter and record full-year results for 2022. I'm joined today by Albert Chao, 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. During the call, we will refer to our two reporting segments, performance and essential materials, which we refer to as PEM or materials, and housing and infrastructure products, which we refer to as HIP or products. 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, after which, Albert will 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 fourth quarter and full year results. This document is available in the press release section of our website at westlake.com. We have also included an earnings presentation, which can be found in the investor relations section on our website. A replay of today's call will be available beginning today, two hours following the conclusion of this call. This replay may be accessed via Westlake's website. Please note that information reported on this call speaks only as of today, February 21, 2023, And therefore, you're advised that time-sensitive information may no longer be accurate as the time of any replay. Finally, I would 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 fourth quarter and full year 2022 results. For the full year of 2022, we reported record net income of over $2.2 billion, or $17.34 per share, and record EBITDA of $4.2 billion on record sales of $15.8 billion. While 2022 was a record year, it was also a challenging year as we experienced energy volatility, rapidly rising interest rates, EVOLVING COVID POLICIES IMPACTING ASIAN DEMAND AND MARKET DISLOCATIONS DUE TO THE WAR IN UKRAINE. AS THESE OBSTACLES EVOLVED AND DROVE MORE DIFFICULT ECONOMIC CONDITIONS IN THE SECOND HALF OF THE YEAR, WESTLAKE TOOK PROACTIVE ACTIONS TO NAVIGATE THE SLOWER GDP GROWTH WITH COST SAVINGS INITIATIVES. THESE BROAD-BASED 2022 INITIATIVES INCLUDED reductions in overhead and energy costs, synergies from acquisitions and investments in digital and automation that lowered our costs by approximately $50 million, and also drove operational efficiencies. Thanks in part to these actions, and despite the challenging external environment, for a second consecutive year, we achieved records for sales, EBITDA, and net income. with EBITDA almost doubling from the previous cycle high in 2018. I want to take a few minutes to review several of our major accomplishments in 2022. We generated record cash from operations of $3.4 billion. This significant level of cash flow allowed us to return $270 million to investors in the form of dividends and share repurchases. retire $250 million in debt, deploy $1 billion to improve the reliability of our plants, and grow our production capacity to meet customers' needs, close $1.4 billion in acquisitions, and grow our ending cash balance by $300 million. The evolution and integration of our business continued in 2022 as we closed the epoxy acquisition and increase our ethylene integration with the additional investment into our LACC ethylene joint venture. Integrating these businesses into Westlake, as we have with Borough, Lascaux, and Diamant acquisitions, which closed in 2021, drove synergies in 2022. We are committed to investing and delivering strong risk-adjusted returns across the economic cycle as we prioritize higher return, lower risk, and faster payback investments. Our deployment of growth capital in 2022 included several organic projects, including the bottleneck work that increased our capacity by 120,000 ECUs, in addition to a number of cost reduction initiatives. The evolution of our business through both acquisitions and organic growth efforts drove the need for added clarity, which we provided by resegmenting the company into the performance and essential materials segment, PEM, and the housing and infrastructure product segment, HIP. Our new segmentation emphasizes the higher value chemical and building products we manufacture. This evolution of our business spurred the changing of our name from Westlake Chemical to Westlake Corporation, which better represents the significant breadth of the products we produce and industries we serve. Decarbonizing our assets and drive sustainability remain important initiatives and growth opportunities for Westlake. As part of our sustainability efforts, we established a carbon reduction goal to reduce our scope one and scope two emission intensity by 20 percent by 2030. I'm happy to report that by the end of 2022, we were already approaching a 15 percent reduction. As part of that commitment, we continue to pursue new and innovative materials, technologies, and leverage our nine global R&D centers to advance and commercialize specialty sustainable products, such as our polyethylene one-palette solution and GreenVine chloro-vinyl product lines, among others. Taken together, I'm very proud of our 2022 accomplishments, and I would like to thank our 16,000 team members for their hard work and dedication that contributed to these accomplishments and record results. I would now like to turn our call over to Steve to provide more detail on our financial results for the fourth quarter and full year of 2022.