Westlake Corporation

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the Westlake Corporation fourth quarter and four-year 2024 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 today, February the 24th, 2025. I would now like to turn the call over to today's host, John Zeller, 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 fourth quarter and full year results for 2024. I am joined today by Albert Chow, our executive chairman, John Mark Gilson, our president and CEO, Steve Bender, our executive vice president and chief financial officer, and other members of our management team. During the call, we will refer to our two reporting segments, housing and infrastructure products, which we refer to as HIP or products, and performance and essential materials, which we refer to as PEM or materials. Today's conference call will begin with Jean-Marc, who will open with a few comments regarding Westlake's performance. Steve will then discuss our financial and operating results, after which Jean-Marc will add a few concluding comments, and we will open up the call to questions. During the third quarter of 2024, we accrued $75 million of expenses related to the decision to mothball two units within our European epoxy business. Additionally, during the fourth quarter of 2023, we recorded a non-cash impairment charge of $475 million related to the company's epoxy business, as well as a $150 million charge to fully resolve certain liability claims. We refer to these three charges as the identified items in our earnings release and on this conference call. References to income from operations, EBITDA, net income and earnings per share on this call exclude the financial impact of the identified items. As such, comments made on this call will be in regard to our underlying business results using non-GAAP financial measures. A reconciliation of these non-GAAP financial measures to GAAP financial measures is provided in our earnings release which is available in the investor relations section of our website. 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 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 reporting on this call speaks only as of today, February 24, 2025, and therefore you are advised that time-sensitive information may no longer be accurate as of 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'd like to turn the call over to Jean-Marc Gilson. Jean-Marc?

Thank you, John, and good morning, everyone. We appreciate you joining us to discuss our fourth quarter and full year 24 results. During the fourth quarter, Each of our segments delivered year-over-year sales volume and EBITDA growth, while advancing several key initiatives to improve Westlake's future earnings potential, including continuing construction on a new PVCO pipe to satisfy strong customer demand in our HIP segment. We have taken decisive action in reducing structural costs in our business, such as the most balling of our ACH and ECH units in Pernis and other company-wide cost-saving initiatives, approximating $50 million in the fourth quarter. This brings total cost savings for the year to $170 million, exceeding our target. Overall, I'm pleased with the progress the team is making to position Westlake for continued earning growth well into the future. For the fourth quarter of 2024, we reported sales of $2.8 billion and EBITDA of $416 million, an increase of 7% compared to the fourth quarter of 2023 EBITDA of $390 million. Sales volume increased year over year at each of our segments, highlighted by a strong 7% growth in HIP driven by continued solid demand for pipe and fittings and side and trim. Meanwhile, PEM sales volume growth of 1% was driven by export market demand and higher polyethylene production levels, with some polyethylene lines setting new production records during the quarter. While PEM grew sales volume year over year, average sales price was impacted by capacity increases across the industry. We also delivered on our proactive cost control measures across all of our business, with EBITDA margin improving in each segment in the fourth quarter of 2024 compared to the same period in 2023. Regionally, North America was a bright spot for us during the fourth quarter, as demand remained relatively strong in both segments. Our performance in North America was aided by our broad product portfolio in HIP, our strong and differentiated portfolio in PEM, and our globally advantaged feedstock and energy position and high degree of vertical integration. Before turning the call over to Steve to review our financial results in more detail, I want to take a few minutes to review some of our key accomplishments in 2024. First, our HIP segment achieved record income from operations of $807 million and a record EBITDA margin of 24%, driven by strong 8% sales volume growth. HIP has now set annual records for income from operation in each of the last five years demonstrating the consistent solid growth characteristics of its underlying housing products and infrastructure product business ips a bid of 1.1 billion dollars in 2024 and operating income of 807 million contributed 85% of our total segments operating income in 2024. These record results provided stability to our overall earnings in 2024 with an asset-light cash generative business model with leading market positions in North America. Second, we began construction on a new PVCO manufacturing plant in Wichita Falls in Texas to support the continued strong customer adoption of this innovative product that improves the municipal pipe installation process with a reduced environmental footprint. Third, we returned approximately $325 million to shareholders through dividends and share repurchases, which demonstrates our commitment to rewarding shareholders and our value-based approach to share repurchases while we grow the company. Finally, we finished the year with a solid investment-graded balance sheet highlighted by $2.9 billion of cash and cash equivalents providing flexibility to pursue growth opportunities. Taken together, I'm very proud of our 2024 accomplishments, and I would like to thank our nearly 16,000 team members for their hard work and dedication that enabled these achievements and the record HIP 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 2024. Steve?