What the changes say
- Westlake closed facilities in the Netherlands and Louisiana due to low-cost foreign competition and recorded a $727 million goodwill impairment charge.
- The company integrated ACI into its operations while managing new GHG emission regulations and cyber security threats.
What changed since the prior 10-K
New
- NewRisk Related to Business, Industry and Operations
If we are unable to execute our cost reduction plans successfully, our total operating costs may be greater than expected, which may adversely affect our profitability
The company faces profitability risks if it fails to execute cost-reduction plans, including plant closures like the Pernis, Netherlands site and Louisiana and Mississippi assets.
- NewRisk Related to Business, Industry and Operations
Failure to adequately protect critical data and technology systems could materially affect our operations
The company is vulnerable to information technology system failures, network disruptions, and cyber-attacks that could disrupt customer orders and manufacturing operations.
- NewLegal, Governmental and Regulatory Risks
We are subject to laws and regulations regarding greenhouse gas emissions and climate-related matters
The company's greenhouse gas emissions subject it to evolving global climate regulations, including the United States' withdrawal from the Paris Agreement in January 2026.
Dropped
- DroppedRisk Related to Business, Industry and Operations
We 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
- DroppedLegal, Governmental and Regulatory Risks
Our operations and assets are subject to climate-related risks and uncertainties
- DroppedRisks Related to Our Indebtedness
These limitations are subject to a number of important qualifications and exceptions. The Credit Agreement also requires us to maintain a quarterly total leverage ratio
Reworded
- 75% rewrittenRisks Related to Our Indebtedness
The Credit Agreement and the indenture governing certain of our senior notes impose operating and financial restrictions, which may prevent us from capitalizing on business opportunities and taking certain actions
Added specific language regarding the requirement to maintain a quarterly total leverage ratio under the Credit Agreement.
Was: The 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
- 72% rewrittenLegal, Governmental and Regulatory Risks
Our operations and assets are subject to extensive environmental, health and safety laws and regulations
Removed specific mention of the European Union's Industrial Emission Directive (IED).
- 65% rewrittenRisk Related to Business, Industry and Operations
Our operations could be adversely affected by labor relations
Removed specific details of the November 2024 IAM strike at the Calvert City, Kentucky facility, generalizing to past strikes.
- 63% rewrittenRisk Related to Business, Industry and Operations
External 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
Added transition to lower greenhouse gas emissions technology as an example of a technological innovation affecting demand.
- 62% rewrittenRisk Related to Business, Industry and Operations
Public and investor sentiment towards climate change and other sustainability matters could adversely affect our cost of capital and the price of our common stock
Softened investor sentiment language by changing 'intensifying efforts' to 'efforts' regarding petrochemical industry divestment.
- 62% rewrittenRisk Related to Business, Industry and Operations
If 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
Added a $727 million non-cash goodwill impairment charge taken in the third quarter of 2025 for North American Chlorovinyls.
- 61% rewrittenRisk Related to Business, Industry and Operations
Our 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
Added reference to impairment charges recognized in the fourth quarter of 2025 due to low-priced Asian commodity exports.
- 57% rewrittenRisk Related to Business, Industry and Operations
We 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, such as ACI, and future acquired businesses
Added specific mention of the recently completed acquisition of ACI.
Was: We 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
- 52% rewrittenRisk Related to Business, Industry and Operations
Our inability to compete successfully may reduce our operating profits
- 48% rewrittenRisk Related to Business, Industry and Operations
The North American housing market may remain depressed or decline further, and any such continuation or decline in the homebuilding industry may adversely affect our operating results
Was: The housing market may remain depressed or decline further, and any such continuation or decline in the homebuilding industry may adversely affect our operating results
- 48% rewrittenRisk Related to Business, Industry and Operations
Capital projects are subject to risks, including delays and cost overruns, which could have an adverse impact on our financial condition and results of operations
- 48% rewrittenRisk Related to Business, Industry and Operations
Our 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
- 46% rewrittenRisk Related to Business, Industry and Operations
Our production facilities process some volatile and hazardous materials that subject us to operating risks that could adversely affect our operating results
- 44% rewrittenRisk Related to Business, Industry and Operations
We 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
- 43% rewrittenRisk Related to Business, Industry and Operations
Our participation in joint ventures and similar arrangements exposes us to a number of risks, including risks of shared control
- 41% rewrittenLegal, Governmental and Regulatory Risks
We are subject to operational and financial risks and liabilities associated with the implementation of and efforts to achieve our carbon emission reduction goals
- 35% rewrittenRisks Related to Our Indebtedness
Our level of debt could adversely affect our ability to operate our business
- 29% rewrittenRisk Related to Business, Industry and Operations
We sell most of our commodity products in highly competitive markets and face significant competition and price pressure
- 21% rewrittenRisk Related to Business, Industry and Operations
Cyclicality in the petrochemical industry has in the past, and may in the future, result in reduced operating margins or operating losses
- 20% rewrittenRisk Related to Business, Industry and Operations
The impact and effects of public health crises, pandemics and epidemics could adversely affect our business, financial condition and results of operations
All 32 risk factors
Headings as the filing states them, in filing order.
Risk Related to Business, Industry and Operations
- 01Cyclicality in the petrochemical industry has in the past, and may in the future, result in reduced operating margins or operating losses21% rewritten
- 02Our 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 laws61% rewritten
- 03We sell most of our commodity products in highly competitive markets and face significant competition and price pressure29% rewritten
- 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
- 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
- 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
- 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 flows63% rewritten
- 08The North American housing market may remain depressed or decline further, and any such continuation or decline in the homebuilding industry may adversely affect our operating results48% rewritten
- 09Our inability to compete successfully may reduce our operating profits52% rewritten
- 10Our production facilities process some volatile and hazardous materials that subject us to operating risks that could adversely affect our operating results46% rewritten
- 11We rely on a limited number of outside suppliers for specified feedstocks and services
- 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
- 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, such as ACI, and future acquired businesses57% rewritten
- 14Capital projects are subject to risks, including delays and cost overruns, which could have an adverse impact on our financial condition and results of operations48% rewritten
- 15Public and investor sentiment towards climate change and other sustainability matters could adversely affect our cost of capital and the price of our common stock62% rewritten
- 16Our participation in joint ventures and similar arrangements exposes us to a number of risks, including risks of shared control43% rewritten
- 17Our operations could be adversely affected by labor relations65% rewritten
- 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 funds44% rewritten
- 19If we are unable to execute our cost reduction plans successfully, our total operating costs may be greater than expected, which may adversely affect our profitabilityNew
- 20If 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 significant62% rewritten
- 21Failure to adequately protect critical data and technology systems could materially affect our operationsNew
- 22Fluctuations in foreign currency exchange rates could affect our consolidated financial results
- 23Our property insurance has only partial coverage for acts of terrorism and, in the event of terrorist attack, we could lose net sales and our facilities48% rewritten
- 24The impact and effects of public health crises, pandemics and epidemics could adversely affect our business, financial condition and results of operations20% rewritten
Legal, Governmental and Regulatory Risks
- 25Our operations and assets are subject to extensive environmental, health and safety laws and regulations72% rewritten
- 26We are subject to laws and regulations regarding greenhouse gas emissions and climate-related mattersNew
- 27We are subject to legal and regulatory claims, investigations and proceedings, some of which could be material
- 28We are subject to operational and financial risks and liabilities associated with the implementation of and efforts to achieve our carbon emission reduction goals41% rewritten
Risks Related to Our Indebtedness
- 29Our level of debt could adversely affect our ability to operate our business35% rewritten
- 30To 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
- 31The Credit Agreement and the indenture governing certain of our senior notes impose operating and financial restrictions, which may prevent us from capitalizing on business opportunities and taking certain actions75% rewritten
Risks Related to Taxes
- 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
Other Westlake 10-Ks
- FY2024 10-K risk factors32 risks
Petrochemical cyclicality, intensive competition, raw material cost volatility, and environmental regulatory compliance dominate Westlake Corp's risk profile.
Filed Feb 25, 2025
About this page
The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.