Westlake Corporation

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the Westlake Corporation fourth quarter and full year 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. As a reminder, ladies and gentlemen, this conference is being recorded today, February 24th, 2026. 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, Amber. Good morning, everyone, and welcome to the Westlake Corporation conference call to discuss our fourth quarter and full year results for 2025. I'm joined today by Albert Chao, our Executive Chairman, Jean-Marc 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 John Mark, who will open with a few comments regarding Westlake's performance. Steve will then discuss our financial and operating results, after which John Mark will add a few concluding comments, and we'll open the call up to questions. During the fourth quarter of 2025, we wrote off inventory and accrued expenses totaling $495 million related to the decision to shut one styrene and three core vinyl facilities in North America and our epoxy facility in Pernis, Netherlands, in Pembe. We also recognized 16 million of accrued expenses within our HIP footprint optimization actions and the sale of a compounding business. We refer to these expense items, which in aggregate were 511 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 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 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 24th, 2026, 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 fourth quarter and full year 2025 results. Our fourth quarter EBITDA of $196 million is net of $511 million of identified items that reflect our announced plan to restructure the businesses and reset our cost position to address the persistent macroeconomic challenges and volatility in trade policies we are experiencing. Despite continued industry pressures, We have taken decisive action to strengthen our global manufacturing footprint, and we'll continue to deliver on our commercial commitments while executing our three pillar strategy, which we expect to contribute $600 million of growth earnings improvement in 2026, while maintaining a focus on our long-term strategy of value creation. Westlake's cost-saving measures gained significant traction across every business in 2025, and we delivered over $170 million of structural cost reductions. Looking at our fourth quarter results, HIP performed well while experiencing the typical seasonal decline in sales volume and earnings, and the added impact of lower construction activity in the fourth quarter. The year-over-year decline in sales reflected lower new housing construction activity in North America, but that decline was partially offset by solid municipal pipe sales volumes as we benefited from the growth in infrastructure spending in cities across North America. Turning to PEM, the fourth quarter was a continuation of the trends that we witnessed throughout 2025, with results reflecting a decline in volume and price with margin compressions across our product portfolio as we serve the stable global industrial and manufacturing base. As we discussed in December, global overcapacity in certain products created downward pressure on the sales price for many of PEMS products, leading to a sharp decline in PEMS profitability compared to historical levels. These pricing pressures continued in the fourth quarter, with a further 5% decline in PEMS average sales prices compared to the third quarter of 2025. Our three pillar strategy, which I outlined in December, is expected to contribute a $600 million improvement in earnings in 2026. Let me summarize each of these pillars as significant steps have already been taken to drive this earnings performance strategy forward. First, we have taken decisive actions to close higher cost PEM assets that largely sold products into low-priced export markets. We closed an epoxy manufacturing site in Pernis, the Netherlands, a non-integrated PVC plant in China, three North American chloro-vinyl assets, a styrene asset, and three HIP fabrication sites. These actions contributed to a 6% reduction in our headcount and an even more significant reduction in our contractor workforce in 2025. Having now shuttered all of these assets, we expect to see an improvement in earnings of $200 million in 2026 from footprint optimization. Second, we have redoubled our efforts to address reliability in plant operation. Thus, we expect to deliver a $200 million year-over-year EBITDA improvement from better plant reliability in 2026. Third, building on the successful structural cost reduction efforts achieved in 2025, we have implemented an additional structural company-wide cost reduction program that we expect will deliver $200 million in 2026. These decisive steps and the commitment to deliver improved financial performance through these self-help actions will deliver better utilized assets and an improved cost structure to compete in a global marketplace. I would like now to turn our call over to Steve to provide more detail on our financial results for the first quarter and full year of 2020-25. But before I do that, I would like to make an additional comment. As you may have seen in the 8K we issued yesterday, our colleague and long-serving Chief Financial Officer Steve Bender has informed us that he plans to retire later this year. Once his replacement has been appointed, an appropriate transition has occurred. We are tremendously grateful for the countless contributions that Steve has made to the company over the years. He joined Westlake in 2005, not long after the company's 2004 initial public offering. And he has been instrumental to the significant growth in the company that the company enjoyed since then. Steve will be with me on several more earnings calls in 2026, so this is not yet a goodbye. Nonetheless, we wanted to take this moment to express our gratitude to Steve. Now, let's turn to the fourth quarter and full year 2025 financial results. Steve?