Westlake (WLK) risk factors, FY2024 10-K

Risk Related to Business, Industry and Operations

1. 01Cyclicality in the petrochemical industry has in the past, and may in the future, result in reduced operating margins or operating losses
2. 02We sell most of our commodity products in highly competitive markets and face significant competition and price pressure
3. 03Our Performance and Essential Materials business could suffer if commodity product exports by other countries significantly increase or are sold in global markets in violation of international fair trade laws
4. 04We operate internationally and are subject to related risks, including exchange rate fluctuations, exchange controls, trade barriers, tariffs and duties, political risk and other risks relating to international operations
5. 05Our operations depend on the availability of raw materials, energy and utilities, and volatility in costs of raw materials, energy and utilities may result in increased operating expenses and adversely affect our results of operations and cash flows
6. 06Our operations and assets are subject to climate-related risks such as hurricanes or other weather events that may adversely affect our results of operations and cash flows
7. 07External factors beyond our control can cause fluctuations in demand for our products and in our prices and margins, which may negatively affect our results of operations and cash flows
8. 08The housing market may remain depressed or decline further, and any such continuation or decline in the homebuilding industry may adversely affect our operating results
9. 09Our inability to compete successfully may reduce our operating profits
10. 10Our production facilities process some volatile and hazardous materials that subject us to operating risks that could adversely affect our operating results
11. 11We rely on a limited number of outside suppliers for specified feedstocks and services
12. 12We rely heavily on third party transportation, which subjects us to risks and costs that we cannot control. Such risks and costs may materially adversely affect our operations
13. 13We may pursue acquisitions, dispositions, joint ventures or other transactions that may impact our results of operations and financial condition. We may have difficulties integrating the operations of acquired businesses
14. 14Capital projects are subject to risks, including delays and cost overruns, which could have an adverse impact on our financial condition and results of operations
15. 15Public and investor sentiment towards climate change and other sustainability matters could adversely affect our cost of capital and the price of our common stock
16. 16Our participation in joint ventures and similar arrangements exposes us to a number of risks, including risks of shared control
17. 17Our operations could be adversely affected by labor relations
18. 18We have certain material pension and other post-retirement employment benefit ("OPEB") obligations. Future funding obligations related to these obligations could restrict cash available for our operations, capital expenditures or other requirements or require us to borrow additional funds
19. 19If our goodwill or other long-lived assets become impaired in the future, we may be required to record non-cash charges to earnings, which could be significant
20. 20We are increasingly dependent on digital technologies and services to conduct our business. We use these technologies for internal and operational purposes, including data storage, processing, and transmission, as well as in our interactions with our business associates, such as customers and suppliers
21. 21Fluctuations in foreign currency exchange and interest rates could affect our consolidated financial results
22. 22Our property insurance has only partial coverage for acts of terrorism and, in the event of terrorist attack, we could lose net sales and our facilities
23. 23The impact and effects of public health crises, pandemics and epidemics could adversely affect our business, financial condition and results of operations

Legal, Governmental and Regulatory Risks

1. 24Our operations and assets are subject to extensive environmental, health and safety laws and regulations
2. 25We are subject to legal and regulatory claims, investigations and proceedings, some of which could be material
3. 26Our operations and assets are subject to climate-related risks and uncertainties
4. 27We are subject to operational and financial risks and liabilities associated with the implementation of and efforts to achieve our carbon emission reduction goals

Risks Related to Our Indebtedness

1. 28Our level of debt could adversely affect our ability to operate our business
2. 29To service our indebtedness and fund our capital requirements, we will require a significant amount of cash. Our ability to generate cash depends on many factors beyond our control
3. 30The Credit Agreement and the indenture governing certain of our senior notes impose significant operating and financial restrictions, which may prevent us from capitalizing on business opportunities and taking some actions
4. 31These limitations are subject to a number of important qualifications and exceptions. The Credit Agreement also requires us to maintain a quarterly total leverage ratio

Risks Related to Taxes

1. 32A change in our effective income tax rate, including as a result of changes in tax laws, treaties or regulations, or their interpretation or application, could have a negative impact on our business and results of operations