Westlake Corporation

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the Westlake Corporation Third Quarter 2025 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. And as a reminder, ladies and gentlemen, this conference is being recorded today, October 30th, 2025. I would now like to turn the call over to today's host, Jeff Hawley, Westlake's Vice President and Chief Accounting Officer. Sir, you may begin.

Thank you, Stephan. Good morning, everyone, and welcome to the Westlake Corporation conference call to discuss our third quarter 2025 results. I'm joined today by Albert Chao, 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, 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 John Mark, 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'll open the call up to questions. During the third quarter of 2025, we recorded a non-cash impairment charge of $727 million, representing all of the goodwill associated with our North American Chlorobinols business unit. We also accrued expenses of $17 million related to previously announced facilities closures. We refer to these expense items, which in aggregate were $744 million, 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 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 into December 31, 2024 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 third quarter 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, October 30, 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 would like to turn the call over to Jean-Marc Gilson. Jean-Marc?

Thank you, Jeff, and good morning, everyone. We appreciate you joining us to discuss our third quarter 2025 results. For the third quarter of 2025, we reported EBITDA of $313 million on net sales of $2.8 billion. Compared to the second quarter of 2025, sales and EBITDA decreased as improved production and sales volume in our PEM segment was more than offset by lower sales volume in our HIP segment and PEM's lower average selling price. While North American residential construction demand has softened in 2025, HIP sales volume and total sales were comparable to those in 2024. This sales resiliency illustrates the strength of our relationships with key customers and our broad and deep portfolio as we continue to grow in this important market. As compared to the third quarter of 2024, HIP's margin and EBITDA were negatively impacted by a sales mix shift to lower price and lower margin products as our key customers worked to address the home price affordability impact felt by home buyers. In addition, HIP's EBITDA includes some period-related administrative, restructuring, and integration expenses in the third quarter of 2025 that are expected to be of a non-recurring nature. Overall, our HIP business is performing well in light of the affordability headwinds facing the new home construction market. We remain very positive on HIP's long-term growth outlook, supported by the need to rebuild the North American housing stock following over a decade of underbuilding of homes, and we have continued to invest in the HIP business to accelerate our growth. The construction of a new PVC pipe facility in North Texas to be completed in 2026 and the recently announced acquisition of ACI are some visible examples of our commitment to HIP through these exciting growth-oriented investments. The ACI acquisition significantly expands our global compound business by introducing silicon and cross-linked polyethylene compounds into our portfolio. And it also importantly widens our access to new automotive, electrical, and power markets. we expect to close the ACI acquisition in the first quarter of 2026. Turning to PEM, compared to both the prior quarter and prior year periods, our third quarter earnings and margins reflect the soft global demand for many of our PEM products, particularly PVC resins. Our improved operational performance and resulting increase in sales volume in the third quarter helped offset some of the reduction in prices resulting from the global supply-demand imbalance. This global imbalance in supply-demand in the chlorovinyl chain, coupled with the challenging macroeconomic environment, has resulted in an extended trough. As a result, during the third quarter of 2025, we took a non-cash impairment charge of $727 million for all of the goodwill associated with PEMS North American chloro-vinyl business. While significant, the charge represents only a small portion of our net investment in the business, and we remain positive in the outlook for chloro-vinyls. We remain committed to this business as the global need for its products, which are critical to industries ranging from building materials to water to manufacturing, remains intact. While the current trough continues to persist, we advanced several strategic actions to improve PEMS performance centered around three key pillars. Number one, improve plant reliability to lower production cost, unit production cost. This pillar is beginning to show results in the third quarter. Two, reduce cost. We are on track to achieve our $150 to $175 million of company-wide structural cost reduction in 2025. And we are taking further actions to achieve another $200 million of structural cost reduction in 2026. Approximately 75% of these cost reductions are attributable to the PEMS segment, and these cost reductions will lower PEMS costs and improve our global competitiveness. Three, optimize our manufacturing footprint. We have taken strategic actions to close facilities such as Pernis in the Netherlands and our WASO PVC resin facility in China. We will take other appropriate asset optimization actions to improve our financial performance as needed. Our relentless focus on these three pillars demonstrates Westlake's continued efforts to adjust our cost structure in response to changing global macroeconomic conditions. Advancing these strategic actions in the coming months is a critical driver to improve our cost and return our PEMS segment to levels of profitability that provide an appropriate return on investment. So to summarize the third quarter, our HIP businesses continue to perform well and provide a very valuable platform of earning stability, while profitability in our PEM segment is challenged by the ongoing trough. We believe our determined drive to deliver on the elements of this three-pillar strategy will return PEM to profitability, improve the competitiveness of our assets, and deliver the financial performance we expect. I would now like to turn our call over to Steve to provide more detail on our financial results for the third quarter of 2025. Steve?