Q1 2025 Westlake Corp Earnings Call

Events will be analysts and only mode. After the Speakers' 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 May <unk> 2025, I would now like to turn the call over to your host today, John Zeller, Westlake, Vice President and Treasurer, Sir you may begin.

John Zeller: Thank you good morning, everyone and welcome to the Westlake Corporation Conference call to discuss our first quarter 2025 results.

Speaker Change: Im joined today by Albert Chao, Our executive Chairman, John 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 two reporting segments performance in our central materials, which we refer to as Pam our materials and housing and infrastructure.

Speaker Change: <unk> products, which we refer to as hip where products today's conference call will begin with Jean Marc who will open with a few comments regarding Westlake performance. Steve will then discuss our financial and operating results after which John Mark will add a few concluding comments and we will open up the call to questions.

Speaker Change: 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.

Speaker Change: These forward looking statements suggest predictions or expectations and thus are subject to risks or uncertainties. These risks and uncertainties are discussed in Westlake Form 10-K for the year ended December 31, 2024, and other SEC filings. We encourage you to learn more about these factors that could lead our actual results to differ.

Speaker Change: By reviewing the SEC filings, which are also available on our Investor Relations website.

Speaker Change: This morning, Westlake issued a press release with details of our first quarter results. This document is available in the press release section of our website at.

Speaker Change: At Westlake Dot com.

We have also included an earnings presentation, which can be found in the Investor Relations section on our website.

Speaker Change: 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 Western <unk> website. Please note that information reported on this call speaks only as of today May <unk> 2025, and therefore, you're advised that time sensitive information may no longer be accurate as of the time.

Speaker Change: Of any replay.

Speaker Change: Finally, I would advise you that this conference call is being broadcast live through an internet webcast system that can be accessed on our web page at Westlake Dot Com now I would like to turn the call over to John Marc Gilson.

Speaker Change: Mark.

Speaker Change: Thank you John and good morning, everyone. We appreciate you joining us to discuss our first quarter 2025 results.

Speaker Change: For the first quarter of 2025, we reported EBITDA of $288 million on net sales of $2 8 billion.

Speaker Change: As has been the case in recent quarters Westlake benefited from the diversity of our businesses and our low cost highly integrated business model.

Speaker Change: In the first quarter of 2025.

Speaker Change: Our hip segment.

Speaker Change: Performed well.

Speaker Change: Despite winter storms slowing home constructions in certain parts of the U S.

Speaker Change: And an uptick in mortgage interest rates that slowed sales of completed homes by the nations large builders.

Speaker Change: Both of which weighed on sales of our products in the quarter.

Speaker Change: The broad portfolio and expensive footprint of our hip segment.

Speaker Change: With its solid 20% EBITDA margin and asset light cash.

Speaker Change: Generative business model.

Speaker Change: Partially offset the first quarter headwinds.

That we experienced in our pet segment.

Speaker Change: Our <unk> segment.

Speaker Change: Results reflected a confluence of events.

Speaker Change: Converging to deliver results below our expectations.

Speaker Change: Specifically, a strong run up in feedstock and energy prices increased <unk> cost by approximately $100 million year over year.

While at the same time, we undertook two planned turnarounds and experienced unplanned outages that impacted our EBITDA by approximately $80 million.

Speaker Change: This confluence of events resulted in extraordinary margin compressions.

Speaker Change: Which drove terms EBITDA to be $180 million lower than the first quarter of 'twenty 'twenty four.

Speaker Change: Global demand remains well below historical levels and recent disruptions from tariffs, it's weighted on global growth.

Speaker Change: While we navigate the uncertain macroeconomic environment, we are taking immediate and targeted actions to adjust to the business conditions to improve profitability.

Speaker Change: And will the business.

Speaker Change: First we are focused on right sizing our operations for the current economic realities.

Speaker Change: On this front.

Speaker Change: During the first quarter.

Speaker Change: We continued to make progress with optimizing our manufacturing footprint.

Speaker Change: Including taking the actions in our epoxy business that we announced last fall to drive improvements in our cost and earnings in the coming months.

Speaker Change: Charges for these actions were accrued in 2024.

Speaker Change: And we are continuing to assess our asset portfolio to improve.

Speaker Change: Financial performance.

Speaker Change: Second.

Speaker Change: We are raising our cost reduction target for 2025 by $25 million.

Speaker Change: To a new range of 150 $275 million.

Speaker Change: Building on the $40 million of cost reductions, we achieved in the first quarter.

Speaker Change: Additionally, we are reducing our capital spending forecast for 2025 by 10% to.

Speaker Change: To $900 million to support our cash generation this year.

Speaker Change: We are monitoring market conditions, and we will adjust this capital spending level is needed.

Operator: During the presentation, all participants will be in a listen-only mode.

Okay.

To a new range of 150 $275 million.

Speaker Change: Third.

Operator: After the speaker's remarks, you will be invited to participate in a question-and-answer session.

Speaker Change: We are improving our cost structure and operational reliability.

Building on the $40 million of cost reductions, we achieved in the first quarter.

Operator: As a reminder, ladies and gentlemen, this conference is being recorded today, May 2, 2025.

Speaker Change: Last month, we successfully completed our Petro one ethylene plant turnaround.

John Zoeller: I would now like to turn the call over to your host today, John Zoeller, Westlake's Vice President and Treasurer. Sir, you may begin. Thank you.

Additionally, we are reducing our capital spending forecast for 2025 by 10%.

Speaker Change: After running the unit for a record eight and a half years.

Speaker Change: This is the second ATM planned turnarounds in 2023.

To $900 million to support our cash generation this year.

Jean-Marc Gilson: Good morning, everyone, and welcome to the Westlake Corporation conference call to discuss our first quarter 2025 results. 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.

Speaker Change: And we expect both brands to deliver reliable production with an eye towards achieving yet another future record of operations between turnarounds.

We are monitoring market conditions, and we will adjust this.

Capital spending level is needed.

Speaker Change: Also in the first quarter, we completed a new vcs tie ins and I guess more plant.

Third.

We are improving our cost structure and operational reliability.

Jean-Marc Gilson: During the call, we will refer to 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.

Last month, we successfully completed our Petro one ethylene plant turnaround.

Speaker Change: Its turnaround.

Speaker Change: Which will provide enhanced reliability across our entire chloro vinyl production chain.

After running the unit for a record eight and a half years.

Jean-Marc Gilson: Today's conference call will begin with Jean-Marc who will open with a few comments regarding Westlake's performance.

Speaker Change: The bcm tie in will also allow us to replace the current mercury cell capacity being rationalized this year with new.

This is the second ethylene plant turnaround since 2023, and we expect both plants to deliver reliable production with an eye towards achieving yet another future record of operations between turnarounds.

Jean-Marc Gilson: Steve will then discuss our financial and operating results, after which John Mark will add a few concluding comments, and we will open up the call to questions.

Speaker Change: More environmentally friendly membrane cell capacity with no material impact on our overall capacity.

Unknown Executive: 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 Form 10-K for the year-ended December 31, 2024, and other SEC filings.

Also in the first quarter, we completed a new V <unk> tie ins and I guess more plant.

Speaker Change: These major sites completed the turnaround work in the second quarter and are now ramping up to address market demand.

Its turnaround.

We could provide enhance reliability across our entire chloro vinyl production chain.

Speaker Change: We are pleased to have completed the significant operational milestones.

The bcm tie in will also allow us to replace the current mercury cell capacity being rationalized this year with new.

Speaker Change: With the associated benefits from improved operational reliability that they will provide well into the future.

Unknown Executive: 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.

More environmentally friendly membrane cell capacity with no material impact on our overall capacity.

Speaker Change: In this protracted down cycle.

Unknown Executive: This morning, Westlake issued a press release with details of our first-quarter results. This document is available in the press release section of our website at westlake.com.

Speaker Change: We believe that these actions will better position us and ensure Westlake will continue to create value for its shareholders.

These are major sites completed the turnaround work in the second quarter and are now ramping up to address market demand.

Speaker Change: I would now like to turn over our call to Steve to provide more detail on our financial results for the first quarter of 2025.

Unknown Executive: We have also included an earnings presentation, which can be found in the Investor Relations section on our website.

We are pleased to have completed the significant operational milestones.

Unknown Executive: 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.

Steve: Thank you John Marc and good morning, everyone.

With the associated benefits from improved operational reliability that they will provide well into the future.

Speaker Change: Westlake reported a net loss of $40 million or <unk> 31 per share in the first quarter on sales of $2 $8 billion.

Unknown Executive: Please note that information reported on this call speaks only as of today, May 2, 2025, and therefore you are advised that time-sensitive information may no longer be accurate as of the time of any replay.

In this protracted down cycle.

Speaker Change: Net income for the first quarter of 2025 decreased $214 million from the first quarter of 2024.

We believe that these actions will better position us and then sure Westlake will continue to create value for its shareholders.

Unknown Executive: 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.

Speaker Change: The year over year decline in net income was primarily due to higher north American feedstock and energy cost of approximately $100 million.

I would now like to turn over our call to Steve to provide more detail on our financial results for the first quarter of 2025.

Jean-Marc Gilson: 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 first quarter 2025 results. For the first quarter of 2025, we reported EBITDA of $288 million on net sales of $2.8 billion. As has been the case in recent quarters, Westlake benefited from the diversity of our businesses and our low-cost, highly integrated business model during the first quarter of 2025. Our HIP segment performed well. Despite winter storms slowing home constructions in certain parts of the U.S. and an uptick in mortgage interest rates that slowed sales of completed homes by the nation's large builders.

Speaker Change: Planned turnarounds and unplanned outages that impacted EBITDA by approximately $80 million as well as unfavorable changes in hip sales mix when.

Speaker Change: Thank you John Marc and good morning, everyone.

Steve: Westlake reported a net loss of $40 million or <unk> 31 cents per share in the first quarter on sales of $2 $8 billion.

Speaker Change: When compared to the fourth quarter of 2024 net income decreased by $47 million in the first quarter as the seasonal increase in sales volume did not fully offset higher feedstock and energy cost turnaround and outage impacts and the sales mix changes.

Steve: Net income for the first quarter of 2025 decreased $214 million from the first quarter of 2024.

Steve: The year over year decline in net income was primarily due to higher north American feedstock and energy cost of approximately $100 million.

Speaker Change: For the first quarter of 2025, our utilization of the FIFO method of accounting resulted in a favorable pre tax impact of $66 million.

Steve: Planned turnarounds and unplanned outages that impacted EBITDA by approximately $80 million as well as unfavorable changes in hip sales mix.

Speaker Change: Compared to what earnings would have been reported on the LIFO method. This is only an estimate and has not been audited.

Steve: When compared to the fourth quarter of 2024 net income decreased by $47 million in the first quarter as the seasonal increase in sales volume did not fully offset higher feedstock and energy cost turnaround and outage impacts and the sales mix changes.

Speaker Change: Before I discuss the details of our segment results I want to provide some high level thoughts on the quarter.

Speaker Change: Compared to the record year ago period financial results and our hip segment during the first quarter reflected lower average sales prices.

Jean-Marc Gilson: both of which were on our sales of our products in the quarter. The broad portfolio and expensive footprint of our HIP segment with its solid 20% EBITDA margin and AssetLite cash generative business model. partially offset the first quarter headwind. that we experienced in our PEMS sector. Append Segment Results reflected a confluence of events. converging to deliver results below our expectations. Specifically, a strong run-up in feedstock and energy prices increased PEMP's cost by approximately $100 million year-over-year. While at the same time, we undertook two planned turnarounds and experienced unplanned outages that impacted our EBITDA by approximately $80 million.

Speaker Change: This was the result of winter storms, which slowed new construction of homes in certain parts of the United States.

Steve: For the first quarter of 2025, our utilization of the FIFO method of accounting resulted in a favorable pre tax impact of $66 million.

Speaker Change: And higher interest rates that drove fewer housing permits impacting our volumes and pricing in our pipe and fitting and siding and trim businesses.

Steve: Compared to what earnings would have been reported on the LIFO method. This is only an estimate and has not been audited.

Speaker Change: While winter storms delayed the normal start of the construction season, we were pleased with hips EBITA margin of 20% in the first quarter, which typically experiences lower seasonal demand.

Steve: Before I discuss the details of our segment results I want to provide some high level thoughts on the quarter comp.

Steve: Compared to the record year ago period financial results and our hip segment during the first quarter reflected lower average sales prices.

Speaker Change: Turning to our <unk> segment, our first quarter results reflected a number of headwinds most of which we believe are transitory.

Steve: This was the result of winter storms, which slowed new construction of homes in certain parts of the United States and higher interest rates that drove fewer housing permits impacting our volumes and pricing in our pipe and fitting and siding and trim businesses.

Speaker Change: Significant was the year over year increase in feedstock and energy cost of approximately $100 million.

Speaker Change: As a result of a protracted down cycle negatively impacting industrywide sales volumes, we were unable to realize higher average sales prices in the first quarter to offset these higher costs.

Steve: While winter storms delayed the normal start up the construction season, we were pleased with hips EBITDA margin of 20% in the first quarter, which typically experiences lower seasonal demand.

Additionally, planned turnarounds and unplanned outages reduced our first quarter of 2025, EBITDA by approximately $80 million.

Jean-Marc Gilson: This confluence of events resulted in extraordinary margin compression. which drove PEMS-EBEDA to be $180 million lower than the first quarter of 2025. Global demand remains well below historical levels and recent disruptions from tariffs have weighted on global growth.

Steve: Turning to our <unk> segment, our first quarter results reflected a number of headwinds most of which we believe are transitory.

Speaker Change: The turnarounds were completed in the second quarter and now ramping up to meet demand.

Speaker Change: We continue to take proactive steps to rightsize, our perm business for the current demand environment, including actions to improve profit profitability of our <unk> assets in the Netherlands, where we took the charge to earnings in 2024.

Steve: Most significant was the year over year increase in feedstock and energy cost of approximately $100 million.

Steve: As a result of a protracted down cycle negatively impacting industrywide sales volumes, we were unable to realize higher average sales prices in the first quarter to offset these higher costs.

Speaker Change: Additionally, substantially all of the approximately $40 million of companywide cost savings generated in the first quarter of 2025 are in our <unk> segment, and we continue to drive to reduce costs beyond our company companywide rate target of $150 million to $175 million for the full year of 2025.

Jean-Marc Gilson: While we navigate the uncertain macroeconomic environment, we are taking immediate and targeted actions to adjust to the business conditions, to improve profitability, and grow the business. First, we are focused on right-sizing our operations for the current economic reality. and this front. During the first quarter, we continued to make progress with optimizing our manufacturing footprint, including taking the actions in our epoxy business that we announced last fall to drive improvements in our costs and earnings in the coming months. Charges for these actions were accrued in 2024 and we are continuing to assess our asset portfolio to improve our financial performance.

Steve: Additionally, planned turnarounds and unplanned outages reduced our first quarter of 2025, EBITDA by approximately $80 million.

Steve: The turnarounds were completed in the second quarter are now ramping up to meet demand.

Steve: We continue to take proactive steps to rightsize, our perm business for the current demand environment.

Speaker Change: Five.

Speaker Change: Moving to the specifics of our segment performance, our housing and infrastructure products segment produced EBITDA of $203 million on $1 billion of sales.

Steve: <unk> actions to improve profitability profitability of our <unk> assets in the Netherlands, where we took the charge to earnings in 2024.

Speaker Change: EBITDA decreased $61 million year over year due to a 2% decline in sales volumes and a 3% decline in average sales prices.

Steve: Additionally, substantially all of the approximately $40 million of companywide cost savings generated in the first quarter of 2025 are in our <unk> segment, and we continue to drive to reduce costs beyond our company companywide rate target of $150 billion to $175 billion for the full year of 2020.

Speaker Change: Sales volumes during the first quarter of 2025 was impacted by a significant pre buying activity late in 2024 and pipe and fittings.

Speaker Change: Does the change in product mix and a slower start to the construction season due to the winter weather contributed to lower segment EBITA margin when compared to the first quarter of 2024.

Steve: Five.

Steve: Moving to the specifics of our segment performance.

Jean-Marc Gilson: Second, we are raising our cost reduction target for 2025 by $25 million to a new range of $150-$275 million. Building on the $40 million of cost reductions we achieved in the first quarter. Additionally, we are reducing our capital spending forecast for 2025 by 10% to $900 million to support our cash generation decision. We are monitoring market conditions and we will adjust this capital spending level as needed. We are improving our cost structure and operational reliability. Last month, we successfully completed a Petro One ethylene plant turnaround. after running the unit for a record eight and a half years.

Steve: Housing and infrastructure products segment produced EBITDA of $203 million on $1 billion of sales.

Speaker Change: When compared to the fourth quarter of 2020 for hip segment sales of $1 billion rose, 2% driven by a 4% sequential increase in sales volume.

EBITDA decreased $61 million year over year due to a 2% decline in sales volumes and a 3% decline in average sales prices.

Speaker Change: <unk> more than offset a 2% decline in average sales price.

Steve: Sales volumes during the first quarter of 2025 was impacted by a significant pre buying activity late in 2024 and pipe and fittings.

Speaker Change: Housing product sales of $838 million in the quarter increased $20 million due to sales volume growth, particularly for siding and trim and roofing.

Steve: Does the change in product mix and a slower start to the construction season due to the winter weather contributed to lower segment EBITA margin when compared to the first quarter of 2024.

Speaker Change: Infrastructure product sales with both $158 million in the first quarter of 2025 decreased $5 million from the fourth quarter of 2024 due to some customers pre buying in the fourth quarter of 2024.

Steve: When compared to the fourth quarter of 2020 for hip segment sales of $1 billion rose, 2% driven by a 4% sequential increase in sales volume.

Speaker Change: That they would normally have bought in the first quarter of 2025.

Steve: That more than offset a 2% decline in average sales price.

Speaker Change: Moving to our <unk> segment first quarter EBITDA of $73 million was below first quarter of 2020 for EBITDA of $253 million due primarily to significant higher north American feedstock cost and energy cost.

Steve: Housing product sales of $838 million in the quarter increased $20 million due to sales volume growth, particularly for us siding and trim and roofing.

Jean-Marc Gilson: This is the second ATN plant turnaround since 2023, and we expect both plants to deliver reliable production with an eye toward achieving yet another future record of operations between turnarounds. Also, in the first quarter, we completed the new VCM tie-ins at our GESMAR plant during its turnaround. which will provide enhanced reliability across our entire chlorovinyl production chain. The VCM tie-in will also allow us to replace the current mercury cell capacity being rationalized this year with new, more environmentally friendly membrane cell capacity with no material impact on our overall capacity. These major sites completed their turnaround work in the second quarter and are now ramping up to address market demand.

Speaker Change: <unk>, a 59% increase in natural gas cost and a 42% increase in ethane cost.

Steve: Infrastructure product sales of both $158 million in the first quarter of 2025 decreased $5 million from the fourth quarter of 2024 due to some customers pre buying in the fourth quarter of 2024.

Speaker Change: Weak global industrial and manufacturing activity during the first quarter and some flattening of the global cost curve led to delays in our price initiatives increases, resulting in a 2% decrease in <unk> average sales price.

Steve: That they would normally have bought in the first quarter of 2025.

Steve: Moving to our <unk> segment first quarter EBITDA of $73 million was below first quarter of 2020 for EBITDA of $253 million due primarily to significant higher north American feedstock cost and energy cost.

Speaker Change: Sales volumes also declined 2% year over year, driven by lower global demand for PVC resin and polyethylene.

Speaker Change: As a result of these factors and the impact of planned turnarounds and unplanned outages pins.

Steve: Including a 59% increase in natural gas cost and a 42% increase in ethane cost.

Speaker Change: First quarter EBITDA margin of 4% was below the first quarter of 2020 for EBITA margin of 13%.

Steve: Weak global industrial and manufacturing activity during the first quarter and some flattening of the global cost curve led to delays in our price initiatives increases, resulting in a 2% decrease in <unk> average sales price.

Speaker Change: On a sequential basis <unk> segment EBITDA of $73 million in the first quarter decreased by $147 million from the fourth quarter of 2024 as a result of the higher North American feedstock and energy costs and the impact of the planned turnarounds and unplanned outages that I previously.

Jean-Marc Gilson: We are pleased to have completed these significant operational milestones with the associated benefits from improved operational reliability that they will provide well into the future. In this protracted down cycle, We believe that these actions will better position us and ensure Westlake will continue to create value for its shareholders.

Steve: Sales volumes also declined 2% year over year, driven by lower global demand for PVC resin and polyethylene.

Speaker Change: Just.

Steve: As a result of these factors and the impact of planned turnarounds and unplanned outages.

Speaker Change: Compared to the fourth quarter of 2020 for timber sales volumes was down 1% driven by polyethylene while average sales prices were flat.

Steve: Yes.

Steve: First quarter EBITDA margin of 4% was below the first quarter of 2020 for EBITA margin of 13%.

Speaker Change: Shifting to our balance sheet as of March 31, 2025, cash and investments were $2 5 billion and total debt was $4 6 billion with a staggered long term fixed rate debt maturity.

Steve: On a sequential basis <unk> segment EBITDA of $73 million in the first quarter decreased by $147 million from the fourth quarter of 2024 as a result of the higher North American feedstock and energy costs and the impact of the planned turnarounds and unplanned outages that I previously.

Steve Bender: I would now like to turn over our call to Steve to provide more detail on our financial results for the first quarter of 2025. Thank you, John, Mark, and good morning, everyone. Westlake reported a net loss of $40 million, or 31 cents per share in the first quarter on sales of $2.8 billion. Net income for the first quarter of 2025 decreased $214 million from the first quarter of 2024. The year over year decline in net income was primarily due to higher North American feedstock and energy costs of approximately $100 million. dollars. Planned turnarounds and unplanned outages that impacted EBITDA by approximately $80 million, as well as unfavorable changes in HIP sales mix.

Speaker Change: For the first quarter of 2025 net cash used from operating activities of $77 million was impacted by cash outlays associated with the planned turnarounds that I previously mentioned as well as our typical seasonal increase in working capital to support seasonal changes in demand for our products.

Steve: <unk>.

Steve: Compared to the fourth quarter of 2020 for Perm sales volumes was down 1% driven by polyethylene while average sales prices were flat.

Speaker Change: Additionally, we used $30 million of cash to repurchase shares of Westwood common stock.

Steve: Shifting to our balance sheet as of March 31, 2025, cash and investments were $2 5 billion and total debt was $4 6 billion with a staggered long term fixed rate debt maturity.

Speaker Change: While returning $68 million of cash to shareholders in the form of dividends during the quarter.

Speaker Change: We continue to look for opportunities to strategically deploy our balance sheet in order to create long term value.

Steve: For the first quarter of 2025 net cash used from operating activities of $77 million.

Speaker Change: Now let me provide some guidance for your models.

Speaker Change: Given the macroeconomic uncertainty and an uptick in mortgage interest rates combined with slower starts and new home construction. We now expect 2025 revenue and EBITA margin and our housing and infrastructure product segment be towards the low end of the previous previously communicated range of $4 four to $4 <unk>.

Steve: It was impacted by cash outlays associated with the planned turnarounds that I previously mentioned as well as our typical seasonal increase in working capital to support seasonal changes in demand for our products.

Steve Bender: When compared to the fourth quarter of 2024, net income decreased by $47 million in the first quarter, as the seasonal increase in sales volume did not fully offset higher feedstock and energy cost, turnaround and outage impacts, and the sales mix changed For more information visit www.FEMA.gov For the first quarter of 2025, our utilization of the FIFO method of accounting resulted in a favorable pre-tax impact of $66 million compared to what earnings would have been reported on the LIFO method.

Steve: Additionally, we used $30 million of cash to repurchase shares of Westwood common stock.

Steve: While returning $68 million of cash to shareholders in the form of dividends during the quarter.

Speaker Change: $6 billion of revenue.

Speaker Change: With EBITDA margin between 2022%.

Steve: We continue to look for opportunities to strategically deploy our balance sheet in order to create long term value.

Speaker Change: Our revised outlook reflects continued mix shifts impacts on revenue and EBITDA margin.

Steve: Now let me provide some guidance for your models.

Speaker Change: We continue to expect positive sales growth for hip in 2025.

Steve Bender: This is only an estimate and has not been audited.

Given the macroeconomic uncertainty and an uptick in mortgage interest rates combined with slower starts and new home construction. We now expect 2025 revenue and EBITA margin and our housing and infrastructure product segment be towards the low end of the previous previously communicated range of $4 four to four.

Speaker Change: Expected total cap expenditures for the company has been lowered by 10% to $900 million as we optimize our business.

Steve Bender: Before I discuss the details of our segment results, I want to provide some high-level thoughts on the quarter. Compared to the record year ago period, financial results in our HIP segment during the first quarter reflected lower average sales prices. This was a result of winter storms, which slowed new construction of homes in certain parts of the United States and higher interest rates that drove fewer housing permits, impacting our volumes and pricing and our pipe and fitting and siding and trim business.

Speaker Change: As John Mark mentioned, we are now targeting $150 billion to $175 billion company wide savings in 2025.

Steve: $6 billion of revenue.

Speaker Change: Roughly $40 million achieved in the first quarter for.

Steve: With EBITDA margin between 2022%.

Speaker Change: For the first year of 2025, we expect our effective tax rate to be approximately 23% and we expect cash interest expense to be approximately $160 million.

Steve: Our revised outlook reflects continued mix shifts impacts on revenue and EBITDA margin.

Steve: We continue to expect positive sales growth for hip in 2025.

Steve Bender: While winter storms delayed the normal start of the construction season, we were pleased with HIP's EBITDA margin of 20% in the first quarter, which typically experiences lower seasonal demand. Turning to our PIMS segment, our first quarter results reflected a number of headwinds, most of which we believe are transitory. The most significant was the year-over-year increase in feedstock and energy cost of approximately $100 million. As a result of a protracted down cycle negatively impacting entity-wide sales volumes, we were unable to realize higher average sales prices in the first quarter to offset these higher costs. Additionally, planned turnarounds and unplanned outages reduced our first quarter of 2025 EBITDA by approximately $80 million.

Speaker Change: Now I'd like to turn the call back over to John Martin to provide our current outlook of our business Sean Mark. Thank you Steve.

Steve: As expected total capital expenditures for the company has been lowered by 10% to $900 million as we optimize our business.

Speaker Change: F 2025 progresses.

Speaker Change: Efforts will be focused on executing several proactive.

Speaker Change: As John Mark mentioned, we are now targeting $150 million to $175 million.

Speaker Change: And decisive actions to enhance margins.

Speaker Change: Company wide savings in 2025 with roughly $40 million achieved in the first quarter.

Speaker Change: <unk> has a footprint and improve our cost structure and operational reliability.

Speaker Change: For the first year of 2025, we expect our effective tax rate to be approximately 23%.

Speaker Change: These are all actions that are within our control and that will position westlake to create greater value as we navigate this business cycle.

Speaker Change: We expect cash interest expense to be approximately $160 million.

Speaker Change: Like to turn the call back over to John Martin to provide our current outlook of our business Sean Mark. Thank you Steve.

Speaker Change: Yeah.

Speaker Change: Global trade tensions have intensified and.

Speaker Change: And we estimate the direct impact from recent tariff announcements on that business.

Speaker Change: F 2025 progresses.

Speaker Change: <unk> will be focused on executing several proactive.

Speaker Change: It's largely manageable.

Steve Bender: The turnarounds were completed in the second quarter and now ramping up to meet demand.

Speaker Change: A large majority of our products and sales U S MCA compliant.

Speaker Change: And decisive actions to enhance margins.

Steve Bender: We continue to take proactive steps to right-size our PIM business for the current demand environment, including actions to improve profitability of our epoxy assets in the Netherlands, where we took the charge to earnings in 2024. Additionally, substantially all of the approximately $40 million of company-wide cost savings generated in the first quarter of 2025 were in our PIM segment. And we continue to drive to reduce costs beyond our company-wide raised target of $150 to $175 billion for the full year of 2025.

Speaker Change: Optimize our footprint and improve our cost structure and operational reliability.

Speaker Change: And limit our exposures at this moment.

Speaker Change: While it remains unclear our trade negotiations will conclude.

These are all actions that are within our control and that will position westlake to create greater value as we navigate this business cycle.

Speaker Change: And as we clearly said the impact they may have on demand for our products.

Speaker Change: We are taking proactive steps to reduce all direct impacts to product, we import that are subject to significant duties.

Speaker Change: Global trade tensions have intensified.

Speaker Change: And we estimate the direct impact from recent tariff announcements on that business.

Speaker Change: Hit businesses.

Speaker Change: It's largely manage about it.

Speaker Change: Primarily domestic in nature and the supply chain.

Speaker Change: A large majority of our products and sales U S MCA compliant.

Speaker Change: Relatively insulated by recent tariff announcements.

Steve Bender: Moving to the specifics of our segment performance, our housing and infrastructure product segment produced EBITDA of $203 million on $1 billion of sales. EBITDA decreased $61 million year-over-year due to a 2% decline in sales volumes and a 3% decline in average sales price. Sales volumes during the first quarter of 2025 was impacted by significant pre-buying activity late in 2024 in pipe and fitting. That's the change in product mix and a slower start to the construction season due to the winter weather contributed to lower segment EBITDA margin when compared to the first quarter of 2024. When compared to the fourth quarter of 2024, HIP segment sales of $1 billion rose 2%, driven by a 4% sequential increase in sales volume that more than offset a 2% decline in average sales price.

Speaker Change: Limit our exposures at this moment.

Speaker Change: The U S MCA.

Speaker Change: While it remains unclear our trade negotiation will conclude and.

Speaker Change: As Steve mentioned earlier, while we are now expecting revenue and EBITDA margin to be towards the low end of our previous guidance ranges.

Speaker Change: And as we clearly said the impact they may have on demand for our products.

Speaker Change: We are taking proactive steps to reduce all direct impacts to protocol import data.

Speaker Change: We continue to expect.

Speaker Change: <unk> hip sales volume growth for 2025.

Speaker Change: Subject to significant duties.

Speaker Change: Turning to pen.

Speaker Change: We expect the direct impact from recent tariff announcements on our cost and supply chain to also be manageable.

Speaker Change: Our hit businesses.

Speaker Change: Primarily domestic in nature and the supply chain.

Speaker Change: Relatively insulated by recent tariff announcements.

Speaker Change: However in the wake of the tariff announcement, we have seen increased volatility in.

Speaker Change: The U S MCA.

Speaker Change: And commodity prices and currency rates, which may impact our pep segment in the second quarter and full year of 2025.

Speaker Change: As Steve mentioned earlier, while we are now expecting revenue and EBITDA margin to be towards the low end of our previous guidance ranges.

Speaker Change: We continue to expect.

Speaker Change: And Timna negotiations, Ontario finalize.

Speaker Change: Positive hip sales volume growth for 2025.

Speaker Change: We expect the uncertainty to persist and we are prepared to take action to adjust to changing conditions.

Steve Bender: Housing product sales of $838 million in a quarter increased $20 million due to sales volume growth, particularly for siding and trim and roofing. Infrastructure product sales of $158 million in the first quarter of 2025 decreased $5 million from the fourth quarter of 2024 due to some customers pre buying in the fourth quarter of 2024. that they would normally have bought in the first quarter of 2025.

Speaker Change: Turning to pen.

Speaker Change: We expect the direct impact from recent tariff announcements on a cost and supply chain to also be manageable.

Speaker Change: Let me remind you of Westlake foundational strengths.

Speaker Change: However, in the wake of the tariff announcements, we have seen increased volatility.

Speaker Change: Which have served us very well over many decades.

Speaker Change: I want to focus on five in particular.

Speaker Change: And commodity prices and currency rates, which may impact our pep segment in the second quarter and full year of 2025.

Speaker Change: That I believe will differentiate us from peers.

During the current period events uncertainty.

Speaker Change: And Timna negotiations, Ontario finalize.

Speaker Change: The first of these is our integrated business model from ethylene all the way to the building products.

Steve Bender: Moving to our PEMS segment, first quarter EBITDA of $73 million was below first quarter of 2024 EBITDA of $253 million due primarily to significant higher North American feedstock cost and energy cost. including a 59% increase in natural gas cost and a 42% increase in FAA cost. Weak global industrial and manufacturing activity during the first quarter and some flattening of the global cost curve led to delays in our price initiative increases, resulting in a 2% decrease in PIMS average sales price. Sales volumes also declined 2% year-over-year, driven by lower global demand for PVC resin and polyethylene.

Speaker Change: We expect the uncertainty to persist and we are prepared to take action to adjust to changing conditions.

Speaker Change: Insulating us from supply chain disruptions and enabling us to capture margin.

Speaker Change: Let me remind you of Westlake foundational strengths.

Speaker Change: Long this integrated chain.

Speaker Change: Second is the diversity of our businesses.

Speaker Change: Which have served us very well over many decades.

Speaker Change: <unk> by the strength of earnings didn't hit and the leverage to microeconomic upturns in Ben.

Speaker Change: I want to focus on five in particular.

Speaker Change: That I believe will differentiate us from peers.

Speaker Change: Which is a key source of resilience and opportunity throughout the business cycle.

Speaker Change: During the current period events uncertainty.

Speaker Change: The first of these is our integrated business model from ethylene all the way to the building products.

Speaker Change: Third is our globally advantaged feedstock and energy position in North America, where 85% of our products are manufactured.

Speaker Change: Insulating us from supply chain disruptions and enabling us to capture margin.

Speaker Change: Pulse.

Steve Bender: As a result of these factors and the impact of planned turnarounds and unplanned outages, First quarter EBITDA margin of 4% was below the first quarter of 2024 EBITDA margin of 13%. On a sequential basis, PEM's segment EBITDA of $73 million in the first quarter decreased by $147 million from the fourth quarter of 2024 as a result of the higher North American feedstock and energy cost and the impact of the planned turnarounds and unplanned outages that I previously discussed. Compared to the fourth quarter of 2024, PEM's sales volumes was down 1%, driven by polyethylene, while average sales prices were flat.

Speaker Change: Long this integrated chain.

Speaker Change: Is a strong investment grade balance sheet with $2 5 billion of cash and securities.

Speaker Change: Second is the diversity of our businesses.

Speaker Change: <unk> by the strength of earnings didn't hit and the leverage to microeconomic upturns in Ben.

Speaker Change: And no near term debt maturities.

Speaker Change: <unk> helps support our ability to reward shareholders through share repurchases and our broken string of quarterly dividends for over 20 years since our IPO.

Speaker Change: Which is a key source of resilience and opportunity throughout the business cycle.

Speaker Change: Third is our globally advantaged feedstock and energy position in North America, where 85% of our products are manufactured.

Speaker Change: Fifth is our low cost manufacturing culture with an emphasis on the safety and reliability of our plants.

Speaker Change: Pulse is.

Speaker Change: While no one can predict the future.

Speaker Change: Our strong investment grade balance sheet with $2 5 billion of cash and securities and.

Speaker Change: Best we can do is to prepay for many potential outcomes.

Speaker Change: And no near term debt maturities.

Speaker Change: I believe that the key strengths that I just outlined.

Speaker Change: <unk> helps support our ability to reward shareholders through share repurchases and our broken string of quarterly dividends.

Steve Bender: Shifting to our balance sheet, as of March 31, 2025, cash and investments were $2.5 billion and total debt was $4.6 billion with a staggered long-term fixed rate debt maturity. For the first quarter of 2025, net cash used from operating activities of $77 million was impacted by cash outlays associated with the planned turnarounds that I previously mentioned, as well as our typical seasonal increase in working capital to support seasonal changes in demand for our products. Additionally, we use $30 million of cash to repurchase shares of Westlake Common Stock while returning $68 million of cash to shareholders in the form of dividends during the quarter.

Position us to succeed across a wide range of potential outcomes in the current uncertain macroeconomic environment.

Speaker Change: Over 20 years since our IPO.

Speaker Change: Thank you very much for listening to our first quarter earnings call.

Speaker Change: Safe is a low cost manufacturing culture with an emphasis on the safety and reliability of our plants.

John: We now turn the call back over to John.

John: Thank you John Mark before we begin taking questions I would like to remind listeners that our earnings presentation, which provides additional clarity into our results is available on our website and a replay of this teleconference will be available two hours. After the call has ended Michelle we will now take questions. Thank.

Speaker Change: While no one can predict the future.

Speaker Change: The best we can do is to prepay for many potential outcomes.

Speaker Change: I believe that the key strengths that I just outlined.

Speaker Change: Thank you to ask a question at this time. Please press star one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one again, one moment for our first question.

Speaker Change: Position us to succeed across a wide range of potential outcomes in the current uncertain macroeconomic environment.

Steve Bender: We continue to look for opportunities to strategically deploy our balance sheet in order to create long-term value.

Speaker Change: Thank you very much for listening to our first quarter earnings call I will now turn the call back over to John Thank.

Speaker Change: Our first question is going to come from the line of Patrick Cunningham with Citi. Your line is open. Please go ahead.

Steve Bender: Now, let me provide some guidance for your models.

Steve Bender: Given the macroeconomic uncertainty and an uptick in mortgage interest rates combined with slower starts in new home construction, we now expect 2025 revenue and EBITDA margin in our housing and infrastructure product segment be towards the low end of the previously communicated range of $4.4 to $4.6 billion of revenue, with EBITDA margin between 20 and 22 percent. Our revised outlet reflects continued mixed-shift impacts on revenue and EBITDA margins. We continue to expect positive sales growth for HIP in 2025.

Speaker Change: Thank you John Mark before we begin taking questions I would like to remind listeners that our earnings presentation, which provides additional clarity into our results is available on our website and a replay of this teleconference will be available two hours. After the call has ended.

Patrick Cunningham: Hi, Good morning, John Mark and Steve I guess, maybe I wanted to just start off on <unk>, specifically on price costs. It seems like more margin degradation is implied can you first remind us the typical timeline for price realization, there and your level of confidence and passing through inflation.

Michelle we will now take questions.

Speaker Change: Thank you to ask a question at this time. Please press star one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one again, one moment for our first question.

Steve: Yes, Patrick this market is much more of those hip market is much more stable and pricing dynamics. Unlike the <unk> segment, which moves on a <unk>.

Patrick Cunningham: Monthly and sometimes more frequent basis.

Speaker Change: Our first question is going to come from the line of Patrick Cunningham with Citi. Your line is open. Please go ahead.

Patrick Cunningham: And so I would say in the hip segment, we see more stability in price nominations and so certainly in an environment, where we see dynamic in some of the input costs, we're able to actually provide more price stability. There that doesn't mean, we're not exposed to some of the changes in the market conditions, but it's much more stable in price.

Patrick Cunningham: Hi, Good morning, John Mark and Steve I guess, maybe I wanted to just start off on the hip specifically on price costs. It seems like more margin degradation is implied can you first remind us the typical timeline for price realization, there and your level of confidence and passing through inflation.

Steve Bender: Expected total cap expenditures for the company has been lowered by 10% to $900 million as we optimize our business.

Steve Bender: As Jean-Marc mentioned, we are now targeting $150 to $175 million of company-wide savings in 2025, with roughly $40 million achieved in the first quarter. For the first year of 2025, we expect our effective tax rate to be approximately 23%, and we expect cash interest expense to be approximately $160 million.

Patrick Cunningham: Across the entire change.

Patrick Cunningham: Yeah.

Speaker Change: Yes, Patrick this market is much more of those hip market is much more stable and pricing dynamics.

Speaker Change: Understood very helpful and I know you discussed the direct impacts of illicit trade uncertainty being manageable when do you anticipate retaliatory tariffs in China will do to pay operating rates in domestic prices.

Patrick Cunningham: Like the <unk> segment, which moves on a <unk>.

Speaker Change: Monthly and sometimes more frequent basis.

Jean-Marc Gilson: I'd like to turn the call back over to Jean-Marc to provide a current outlook of our business. Jean-Marc? Thank you, Steve. As 2025 progresses, our efforts will be focused on executing several proactive and decisive actions to enhance margins, optimize our footprint and improve our cost structure and operational reliability. These are all actions that are within our control and that will position Westlake to create greater value as we navigate this business cycle.

Speaker Change: And so I would say in the hip segment, we see more stability in price nominations and so certainly in an environment, where we see dynamic in some of the input cost we're able to actually provide more price stability. There that doesn't mean, we're not exposed to some of the changes in the market conditions, but it's much more stable in price.

Speaker Change: But it's hard to project, what what may occur there, but certainly when we think about the direct impacts because it's hard to anticipate what the indirect impacts could be but simply as we think about the mix of polyethylene that we produce which is largely going into domestic packaging applications that are <unk>.

Across the entire change.

Speaker Change: Yeah.

Speaker Change: Understood very helpful and I know you've discussed the direct impacts of illicit trade uncertainty being manageable when do you anticipate retaliatory tariffs in China will go to pay operating rates in domestic prices.

Speaker Change: <unk> to the Asian market for most of the well.

Speaker Change: Low density polyethylene that we produce in some of the specialty and differentiated forms really are not targeted for those markets and so the markets that we're focusing our products oriented into it was really more of that specialty end of the chain and less exposed to really those kind of dynamics that you see in the Asian markets.

Jean-Marc Gilson: Global trade tensions have intensified. and we estimate the direct impact from recent tariff announcement on our business. is largely manageable. A large majority of our products and sales are USMCA compliant. and limit our exposures at this moment. While it remains unclear how trade negotiations will conclude, and as we clearly assess the impact they may have on demand for our products, We are taking proactive steps to reduce all direct impacts to products we import that are subject to significant duty.

Speaker Change: But it's hard to project, what what may occur there, but certainly when we think about the direct impacts because it's hard to anticipate what the indirect impacts could be but simply as we think about the mix of polyethylene that we produce which is largely going into domestic packaging applications that are <unk>.

Speaker Change: Thank you.

Speaker Change: Thank you Youre welcome Amit for our next question.

Speaker Change: Our next question is going to come from the line of Jesse <unk> with Jpmorgan. Your line is open. Please go ahead.

Speaker Change: <unk> to the Asian market for most of the well.

Speaker Change: Low density polyethylene that we produce in some of the specialty and differentiated forms really are not targeted for those markets and so the markets that we're focusing our products oriented into it was really more of that specialty end of the chain and less exposed to really those kind of dynamics that you see in the Asian markets.

Jesse: Thanks very much.

Speaker Change: Okay.

Speaker Change: Now how the.

Speaker Change: PVC industry.

Speaker Change: Formed in the first quarter.

Speaker Change: Were volumes up or down or by how much.

Speaker Change: Yes, so Jeff the industry continues to in the first quarter see a bit of a build in inventory in anticipation of the construction season. So I would say that operating rates for the industry, we're probably in the in the eighty's in that in that range.

Jean-Marc Gilson: are hip businesses. are primarily domestic in nature and their supply chains are relatively insulated by recent tariff announcement through the USMCA. As Steve mentioned earlier, while we are now expecting IP revenue and EBITDA margin to be towards the low ends of our previous guidance ranges, We continue to expect. Positive, HIP says volume growth for 2025.

Speaker Change: Thank you.

Speaker Change: Thank you Youre welcome Amit for our next question.

Speaker Change: Our next question is going to come from the line of Jesse <unk> with Jpmorgan. Your line is open. Please go ahead.

Speaker Change: <unk> construction season doesn't really start until we get it really into the late portions of the first quarter and into the second quarter. So they would typically be in the low to mid eighties.

Speaker Change: Thanks very much.

Speaker Change: Okay.

Now how the.

Speaker Change: PVC industry.

Speaker Change: Formed in the first quarter.

Speaker Change: Were volumes up or down or by how much.

Speaker Change: In your slide.

Speaker Change: In describing the <unk> segment.

Speaker Change: Yes, so Jeff the industry continues to in the first quarter see a bit of a build in inventory in anticipation of the construction season. So I would say that operating rates for the industry, we're probably in the in the eighty's in that in that range.

Jean-Marc Gilson: Turning to PEM. We expect the direct impact from recent tariff announcements on our cost and supply chains to also be managed. However, in the wake of the tariff announcement, we have seen increased volatility in commodity prices and currency rates, which may impact our PEM segment in the second quarter and full year of 2025. Until negotiations on tariffs are finalized. We expect the uncertainty to persist, and we are prepared to take action to adjust to changing conditions.

Speaker Change: There were.

Speaker Change: Decline in.

Speaker Change: Chlor alkali and PVC resin prices sequentially.

Speaker Change: I thought PVC resin prices went up.

Speaker Change:

Course construction season doesn't really start until we get it really into the late portions of the first quarter and into the second quarter. So they would typically be in the low to mid eighties.

Speaker Change: In the first quarter I thought there was a.

Speaker Change: Price increase in February March.

Speaker Change: Did you have a different experience or maybe posted prices were different.

Speaker Change: In your slide.

Speaker Change: Experience so Jeff when you think about the the change that we saw we remember we saw some price resets at the end of the year that carried into into the first.

Speaker Change: In describing the Perm segment.

Speaker Change: You said that there were.

Speaker Change: Decline in.

Speaker Change: A month or so of the first quarter and to your point there were price increases realized over the course of February and March.

Speaker Change: Chlor alkali and PVC resin prices sequentially.

Jean-Marc Gilson: Let me remind you of Westlake's foundational strength. which have served us very well over many decades. I want to focus on five in particular. that I believe will differentiate us from peers. during the current period of uncertainty. The first of these is an integrated business model from ethylene all the way through the building product. insulating us from supply chain disruptions and enabling us to capture margin along this integrated chain. Second, is the diversity of our business. Supported by the strength of earnings in HIP and the leverage to macroeconomic upturns in PEM. which is a key source of resilience and opportunity throughout the business cycle.

I thought PVC resin prices went up and.

Speaker Change: And so as we think about.

Speaker Change: What we experienced there have been agree with you that there have been increases over the port over the course of the.

Speaker Change: In the first quarter I thought there was a.

Speaker Change: Price increase in February March.

Speaker Change: Did you have a different experience or maybe posted prices were different.

Speaker Change: First quarter, but there were some kind of market resets that occurred at the end of the year.

Speaker Change: And.

Jeff: Experience so Jeff when you think about the the change that we saw we will remember we saw some price reset to the end of the year that carried into into the first month.

Speaker Change:

Speaker Change: Okay.

Speaker Change: Talk to you about declines in Chlor alkali.

Speaker Change: Is that both chlorine and caustic or only in chlorine and caustic.

Jeff: A month or so of the first quarter and to your point there were price increases realized over the course of February and March.

Speaker Change: Now we've continued to see some continued strength really in Korea, and as we enter the.

Speaker Change: Season now.

Jeff: And so as we think about.

Jeff: What we experienced there have been agree with you that there have been increases over the port over the course of the <unk>.

Speaker Change: Excuse me as we enter this season for bleaching and for construction materials that demand for Korea will continue.

Jeff: First quarter, there were some kind of market resets that occurred at the end of the year.

Speaker Change: Maybe there are some of course regional pressures of course in all of these product offerings. Both in coring of course and in caustic that may occur at the end of the year during a slow period of construction and demand for bleached materials.

Jean-Marc Gilson: Third is our globally advantaged feedstock and energy position in North America, where 85% of our products are manufactured. BOSC is a strong investment-grade balance sheet with $2.5 billion of cash and security. and no near term death maturity. which helps support our ability to reward shareholders to share repurchases and our unbroken string of quarterly dividends for over 20 years since our IPO.

Jeff: And.

Jeff:

Jeff: You talked about declines in Chlor alkali.

Jeff: Is that both chlorine and caustic or only in chlorine and caustic.

Speaker Change: And water treatment materials in January December.

Jeff: Now we've continued to see some continued strength really in Korea, and as we enter the.

Speaker Change: But as you think about the onset of the construction season, and the onset of the water treatment season.

Speaker Change: We've seen some stability in fact in costs with some price increases in the first quarter.

Jeff: Season now.

Jeff: Excuse me as we enter this season for bleaching and for construction materials that demand for Korea will continue.

Speaker Change: Okay. Thank you very much.

Speaker Change: Welcome.

Speaker Change: One moment for our next question.

Jeff: Maybe there are some of course regional pressures of course in all of these product offerings. Both in coring of course and in caustic that may occur at the end of the year during a slow period of construction and demand for bleached materials.

Speaker Change: Our next question comes from the line of John Roberts with Mizuho. Your line is open. Please go ahead.

John Roberts: Thank you I think a driver for hips was gaining share at distributors because of your ability to fill more of an order and competitors that have more narrow product lines.

Jean-Marc Gilson: SAFE is a low-cost manufacturing culture with an emphasis on the safety and reliability of While no one can predict the future, the best we can do is to prepare for many potential outcomes. I believe that the key strengths that I just outlined position us to succeed across a wide range of potential outcomes in the current uncertain macroeconomic environment.

Jeff: And water treatment materials in January December, but as you think about the onset of the construction season and the onset of the water treatment season.

John Roberts: How is that going and does this kind of environment make it harder to gain share because its more competitive or is it easier to gain some share here.

Jeff: We've seen some stability in fact in costs with some price increases in the first quarter.

John Roberts: So John I would say that and you can see from our prepared remarks. So we expect to continue the revenue growth in our business and I think that speaks directly to the question you're asking I think the broad offering that we offer in our hip segment has allowed us to continue to gain share in that market.

Jeff: Okay. Thank you very much.

Jeff: Welcome.

Jeff: One moment for our next question.

Speaker Change: Our next question comes from the line of John Roberts with Mizuho. Your line is open. Please go ahead.

Jean-Marc Gilson: Thank you very much for listening to our first quarter earnings call.

John Roberts: Thank you I think a driver for hips was gaining share at distributors because of your ability to fill more of an order and competitors that have more narrow product lines.

John Zoeller: I will now turn the call back over to John. Thank you, Jean-Marc.

John Roberts: Our focus is really meeting the needs of the customers customer, which is the homebuilder and in those dialogues that we have with the homebuilders. The nationwide builders. We find that there is really good selection and of those product offerings and that allows us to have that penetration into our distributor.

Operator: Before we begin taking questions, I would like to remind listeners that our earnings presentation, which provides additional clarity into our results, is available on our website, and a replay of this teleconference will be available two hours after the call has ended.

John Roberts: How is that going and does this kind of environment make it harder to gain share because its more competitive or is it easier to gain some share here.

Operator: Michelle, we will now take questions. Thank you.

John Roberts: Customers and so we do see good growth in the range of product offerings with our distributors and ultimately go into our end customer.

John Roberts: So John I would say that and you can see from our prepared remarks. So we expect to continue the revenue growth in our business and I think that speaks directly to the question you're asking I think the broad offering that we offer in our hip segment has allowed us to continue to gain share in that market.

Operator: To ask a question at this time, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again.

John Roberts: Okay.

John Roberts: Thank you.

John Roberts: Youre welcome.

John Roberts: One moment for our next question.

Patrick Cunningham: Our first question is going to come from the line of Patrick Cunningham with Citi. Your line is open. Please go ahead. Good morning, John, Mark and Steve, I guess maybe I want to just start off on the hip, you know, specifically on price costs, you know, it seems like more margin degradation is implied. Can you first remind us the typical timeline for price realization there and your level of confidence in passing through inflation? Yeah, Patrick, you know, this market is much more this hip market is much more stable and pricing dynamics, unlike the PIMS segment, which moves on a monthly and sometimes more frequent basis.

Speaker Change: And our next question is going to come from the line of Mike might head with Barclays. Your line is open. Please go ahead.

John Roberts: Our focus is really meeting the needs of the customers customer, which is the homebuilder and in those dialogues that we have with the homebuilders that nationwide builders. We find that there is really good selection and of those product offerings and that allows us to have that penetration into our distributor.

Mike: Thanks, Good morning, Jim.

Speaker Change: First one Mike you talked to were good morning can you talk more about the mix shift impact that you're calling within hips, just what businesses are generating above average margin.

John Roberts: Customers and so we do see good growth in the range of product offerings with our distributors and ultimately go into our end customer.

Mike: Maybe youre seeing the disproportional slowed down here.

Speaker Change: Yeah. Good question, so in the fourth quarter because of some of the weather.

John Roberts: Thank you.

Speaker Change: Did see a pull forward of some of the pipe and fittings businesses in the fourth quarter and of course with some of the winter season, and we saw big and because of the temperatures it's harder to put some of that material into the ground.

John Roberts: Youre welcome.

John Roberts: One moment for our next question.

Speaker Change: And our next question is going to come from the line of Mike might head with Barclays. Your line is open. Please go ahead.

Patrick Cunningham: And so I would say in the HIP segment, we see more stability in price nominations. And so certainly in an environment where we see dynamic in some of the input cost, we're able to actually provide more price stability there. That doesn't mean we're not exposed to some of the changes in the market conditions, but it's much more stable in price across the entire chain.

Speaker Change: The ground is frozen in many parts of the northern portions of the United States, and Canada, and so less pull on that in the early stages of the first quarter of course that was backfill with some of the volumes we saw in our exterior building products business as well as in compounds. So it was really the pull forward of some of our pipe and fittings busy.

Mike: Thanks, Good morning, Jim.

Speaker Change: First wondering Mike you talk good morning can you talk more about the mix shift impact that you're calling within just what businesses are generating above average margin that maybe youre seeing a disproportional slowed down here.

Speaker Change: Yeah. Good question, so in the fourth quarter because of some of the weather.

Patrick Cunningham: Recent Indo-Pacific Tokyo Briefings. Well, it's hard to project what what may occur there. But certainly when we think about the direct impacts, because it's hard to anticipate what the indirect impacts could be. But simply, as we think about the mix of polyethylene that we produce, which is largely going into domestic packaging applications, that our exposure to the Asian market for most of the low density polyethylene that we produce, and some of the specialty and differentiated forms, really are not targeted for those markets. And so the markets that we're focusing our products into, is really more of that specialty end of the chain, and less exposed to really those kind of dynamics that you see in the Asian market.

Speaker Change: And fourth quarter.

Speaker Change: Got it that's helpful and then second.

Speaker Change: Did see a pull forward of some of the pipe and fittings businesses in the fourth quarter and of course with some of the winter season, and we saw big and because of the temperatures it's harder to put some of that material into the ground.

Speaker Change: As a proxy generating positive EBITDA today, and do you need to take further actions to improve that business is profitability.

Speaker Change: It remains a challenge business and you can see Mike as we spoke to it we're taking proactive steps really to really address. This you can see that we took the charge in the third quarter of last year and you can see in our prepared remarks were moving forward to take steps to really improve the bottom line results of that business.

Speaker Change: The ground is frozen in many parts of the northern portions of the United States, and Canada, and so less pull on that in the early stages of the first quarter of course that was backfill with some of the volumes we saw in our exterior building products business.

Speaker Change: As well as in compounds. So it was really the pull forward of some of our pipe and fittings business in fourth quarter.

Speaker Change: Thank you and one moment for our next question.

Speaker Change: Got it that's helpful and then second is.

Speaker Change: As a proxy generating positive EBITDA today, and do you need to take further actions to improve that business is profitability.

Speaker Change: Our next question comes from the line of Alexia <unk> with.

Speaker Change: Keybanc capital markets. Your line is open. Please go ahead.

Speaker Change: It remains a challenge business and as you can see Mike as we spoke to it we're taking proactive steps really to really address. This you can see that we took the charge in the third quarter of last year and you can see in our prepared remarks were moving forward to take steps to really improve the bottom line results of that business.

Speaker Change: Good morning, everyone.

Speaker Change: You mentioned mix and your ship.

Speaker Change: Sales in Q1 could you comment on what's happening in pricing.

Speaker Change: Specific categories, and I was wondering pipe and fittings or practices.

Jeffrey Zekauskas: Our next question is going to come from the line of Jeffrey Zekauskas with JP Morgan. Your line is open. Please go ahead.

Speaker Change: Rob.

Speaker Change: And is there any difference between large and small diameter products.

Speaker Change: Thank you and one moment for our next question.

Jeffrey Zekauskas: Thanks for Um, can you let us know how the TVC, were volumes up or down, or by. In your slides. in describing the PEMDAS. said that there were declines. Chloralkali and PVC resin. I thought PVC resin prices went up in the first quarter. I thought there was a price increase in February and in March. Did you have a different experience or maybe posted prices? So, Jeff, when you think about the change that we saw, remember we saw some price resets at the end of the year that carried into the first month or so of the first quarter.

Speaker Change: Yes, there is more value really in the larger diameter.

Speaker Change: Our next question comes from the line of Alexia <unk> with.

Speaker Change: Diameter business as you might recall, we're the only player with really the pipe and the <unk> combination.

Speaker Change: Keybanc capital markets. Your line is open. Please go ahead.

Alexia: Good morning, everyone.

Speaker Change: You mentioned mix and your ship.

So I would say that that's really where we're seeing the strength I would say that when we think about price. It does vary across the country and so its hard to quote an overall price, but I would say that with some of the push through in PVC resin. There is sometimes a bit of a lag in getting that all the way through in our pipe and fittings applications.

Speaker Change: Sales in Q1 could you comment on what's happening in pricing.

Speaker Change: Specific categories, and I was wondering pipe and fittings, where prices are flat or up.

Speaker Change: And is there any difference between large and small diameter products.

Speaker Change: And so you would you have seen so therefore, some margin compression in that pipe and fittings business, that's more of a lag than an inability to ultimately get that pricing that resin through.

Speaker Change: Yes, there is more value really in the larger diameter.

Speaker Change: Larger diameter business.

Speaker Change: As you might recall, we're the only player with really the pipe in the city in combination and so I would say that that's really where we're seeing the strength I would say that when we think about price. It does vary across the country and so its hard to quote an overall price, but I would say that with some of the push through in PVC resin there's sometimes.

Speaker Change: But the value proposition that we see in the larger pipe business is really why we've continued to stay so very focused in that business there.

Speaker Change: There are so many players and it's a much more fragmented market and the much smaller diameter.

Speaker Change: Forum's pipe.

Speaker Change: That's where we play a much smaller role because frankly, it's a smaller value added segment of the business.

Speaker Change: A bit of a lag in getting that all the way through in our pipe and fittings applications and so you would you have seen so therefore, some margin compression in that pipe and fittings business, that's more of a lag than an inability to ultimately get that pricing that resin through but.

Thanks, Steven staying with.

Speaker Change: And you just mentioned that.

Overall after discounts it sounded like in PVC pricing was lower in Q1.

Just broadly petrochemical prices are lower with any of that benefit.

Speaker Change: The value proposition that we see in the larger pipe business is really why we've continued to stay so very focused in that business.

Speaker Change: In the first half or this year in terms of margins.

Speaker Change: There are so many players and it's a much more fragmented market and the much smaller diameter.

Speaker Change: I'm, sorry could you repeat that I didn't quite fully hear your question.

Speaker Change: Forum's pipe that's.

Speaker Change: Sorry, the question really is about lower PVC prices and lower petrochemical prices in general at.

Speaker Change: That's where we play a much smaller role because frankly, it's a smaller value added segment of the business.

Jeffrey Zekauskas: And to your point, there were price increases realized over the course of February and March. And so as we think about what we experienced, there have been, I agree with you, there have been increases over the course of the first quarter. But there were some kind of market resets that occurred at the end of the year. You know, you talked about the clones and chlorophyll. that boasts in glory. for Only in Now we've continued to see some continued strength really in chlorine. And as we enter the season now, excuse me, as we enter this season for bleaching and for construction materials, that demand for chlorine will continue.

Steven: Thanks, Steven staying with.

Speaker Change: At least at this moment.

Steven: And you just mentioned that overall after discounts it sounded like in PVC pricing was lower in Q1.

Speaker Change: And was any of.

Speaker Change: Benefit.

Speaker Change: Margins.

Speaker Change: Yes, so as we think about the run up and now we've actually seen some normalization of some of those energy price or we experienced in the first quarter, but I would say some of the price nominations, we've seen specifically in PBC have come through.

Steven: Just broadly petrochemical prices are lower with any of that benefit.

Steven: In the first half or this year in terms of margins.

Speaker Change: I'm, sorry could you repeat that I didn't quite fully hear your question.

Speaker Change: In terms of.

Recognizing higher prices, but getting there.

Speaker Change: Sorry, the question really is about lower PVC prices and lower petrochemical prices in general at.

Speaker Change: Early portions of the first quarter.

Speaker Change: At least at this moment.

Speaker Change: I Hope I answered your question I was trying to understand I understand your question Arun.

Speaker Change: And was any of.

Speaker Change: Benefit.

Speaker Change: Margins.

Jeffrey Zekauskas: There may be, there are some, of course, regional pressures, of course, in all these product offerings, both in chlorine, of course, and in caustic, that may occur at the end of the year during a slow period of construction and demand for bleaching materials and water treatment materials in January, December.

Speaker Change: Yes, so as we think about the the run up and now we've actually seen some normalization of some of those energy prices, we experienced in the first quarter, but.

Steve: I am sorry, Steve.

Speaker Change: You broke up a little bit at least on my part I'm not sure. If that's an issue for the whole call.

Speaker Change: Question was really about lower raw material costs or hip.

Speaker Change: But I would say some of the price nominations, we've seen specifically in PVC have come through.

Yes, and so we're not really seeing a degradation in pricing in our building products business as a result of those lower prices.

Speaker Change: In terms of recognizing higher prices, but getting the.

Jeffrey Zekauskas: But as you think about the of the construction season and the onset of the water treatment season, we've seen some stability, in fact, in caustic, some price increases in the first quarter. Okay, thank you very much. Welcome.

Speaker Change: Early portions of the first quarter.

Speaker Change: And some of the inputs as I mentioned earlier to one of the questioners, we see a much more stability and building products pricing.

Speaker Change: Okay I hope I answered your question I was trying to understand understand your question Arun.

And so therefore, we don't see a transference of the high degree of volatility you typically see in the more commodity oriented materials translated into building products prices tend to be significantly more stable.

Steve: Sorry, Steve.

John Roberts: Our next question comes from the line of John Roberts with Mizzouho. Your line is open. Please go ahead. Thank you. I think a driver for HIPS was gaining share at distributors because of your ability to fill more of an order than competitors that have more narrow product lines. How's that going? And does this kind of environment make it harder to gain share because it's more competitive or is it easier to gain some share?

You broke up a little bit at least on my part I'm not sure. If that's an issue for the whole call.

Steve: Question was really about lower raw material costs or hip.

On the building products side.

Steve: Yes, and so we're not really seeing a degradation in pricing in our building products business as a result of those lower prices.

Speaker Change: Thank you and one moment as we move on to our next question.

Speaker Change: Our next question comes from the line of Josh Spector with UBS. Your line is open. Please go ahead.

Steve: Some of the inputs as I mentioned earlier to one of the questioners, we see a much more stability and building products pricing.

Josh Spector: Hi, Good morning, I wanted to ask specifically on PVC exports in Perm.

John Roberts: So John, I would say that, and you can see from our prepared remarks, that we expect to continue the revenue growth in our business. And I think that speaks directly to the question you're asking. I think the broad offering that we offer in our HIP segment has allowed us to continue to gain share in that market. You know, our focus is really meeting the needs of the customer's customer, which is the home builder. And in those dialogues that we have with the home builders, the nationwide builders, we find that there is really good selection and of those product offerings, and that allows us to have that penetration into our distributor customers.

Steve: And so therefore, we don't see transference of the high degree of volatility you typically see in the more commodity oriented materials translated into building products prices tend to be significantly more stable.

Are you, making any money on the exports of PVC at this point I'm trying to understand kind of the negative EBIT and some of the shifts down and I guess, depending on your answer there.

Do you need to flex any of your U S operations, just given some of your assets are net short ethylene and probably less advantaged are there opportunities for you to pull levers to improve that or is my analysis wrong.

Steve: On the building products side.

Steve: Thank you and one moment as we move on to our next question.

Speaker Change: Our next question comes from the line of Josh Spector with UBS. Your line is open. Please go ahead.

Yes, Josh.

I would say that the export pricing that we're seeing.

Hi, Good morning, I wanted to ask specifically on PVC exports in Perm.

Josh Spector: Prices have trended higher domestic price, we're seeing in PVC were really reflect the export prices.

John Roberts: And so we do see good growth in the range of product offerings with our distributors and ultimately going to our end customer. Thank you. You're welcome.

Speaker Change: Are you, making any money on the exports of PVC at this point I'm trying to understand kind of the negative EBIT and some of the shift down and I guess, depending on your answer there do.

Speaker Change: I agree that the export margin is very narrow, but it is a positive margin. So no need to really flex. The if you will the front end of the.

Speaker Change: Do you need to flex any of your U S operations, just given some of your assets are net short ethylene and probably less advantaged are there opportunities for you to pull levers to improve that or is my analysis wrong.

Mike Leithead: And our next question is going to come from the line of Mike Leithead with Barclays. Your line is open. Please go ahead. Thanks. Good morning, team.

Josh Spector: Manufacturing chain.

Josh Spector: Okay I'll leave it there thank you.

Josh Spector: Okay. Thank you one moment for our next question.

Mike Leithead: First, can you talk more about the mixed shift impact that you're calling within HIP? Just what businesses are generating above average margin that maybe are seeing a disproportional slowdown? Yeah, good question. So in the fourth quarter, because of some of the weather, we did see a pull forward of some of the pipe and fittings businesses in the fourth quarter. And of course, with some of the winter season we saw, and because of the temperatures, it's harder to put some of that material into the ground. The ground is frozen in many parts of the northern portions of the United States and Canada.

Speaker Change: Our next question comes from the line of Michael Sison with Wells Fargo. Your line is open. Please go ahead.

Josh: Yes, Josh.

Speaker Change: I'd say that the export pricing that we're seeing.

Speaker Change: Prices have trended higher the domestic price we're seeing in PVC were really reflect the export prices, but I agree that the export margin is very narrow, but it is a positive margin. So no need to really flex. The if you will of the front end of the Manny.

Michael Sison: Hey, good morning.

Speaker Change: Good morning.

In terms of your outlook for <unk> and I know you don't get into specifics, but directionally should.

<unk> hip.

Speaker Change: EBITDA get better and then if if Pam could get better.

Speaker Change: Manufacturing chain.

And and you know what we need to drive that for an improvement in EBITDA for <unk> versus <unk>.

Speaker Change: Okay I'll leave it there thank you.

Speaker Change: Okay. Thank you one moment for our next question.

Speaker Change: So Mike as we look at some of the forecasters such as NIH beef or housing starts and even housing permits.

Mike Leithead: And so let's pull on that in the early stages of the first quarter. Of course, that was backfilled with some of the volumes we saw in our exterior building products business, as well as in compounds. So it was really the pull forward of some of our pipe and fittings business in fourth quarter. Got it. That's helpful.

Speaker Change: Our next question comes from the line of Michael Sison with Wells Fargo. Your line is open. Please go ahead.

Speaker Change: For the 25 here, we see those numbers forecasted to be in the $1 $3 million range. The second quarter in the third quarter tend to be seasonally strong from a construction perspective.

Michael Sison: Hey, good morning.

Speaker Change: Good morning.

Michael Sison: In terms of your outlook for <unk> and I know you don't get into specifics, but directionally, yes.

Speaker Change: She had hip.

Speaker Change: And you can see our commentary and guidance for hip that we do expect revenue growth and so I do expect that as we start into the second quarter in the third quarter will continue to see growth in those activities.

Mike Leithead: And then second, is Epoxy generating positive EBITDA today? And do you need to take further actions to improve that business's profitability? It remains a challenged business. And as you can see, Mike, as we spoke to it, we're taking proactive steps really to really address this, you can see that we took the charge in third quarter of last year. And you can see in our prepared remarks, we're moving forward to take steps to really improve the bottom line results of that business.

Speaker Change: EBITDA get better and then if if perm could get better why and and you know what we need to drive that for an improvement in EBITDA for <unk> versus <unk>.

And you can see the guidance, we're providing and revenue.

Speaker Change: So Mike as we look at some of the forecasters such as NIH be for housing starts and even housing permits for the 25 year. When you see those numbers forecasted to be in the $1 $3 million range. The second quarter in the third quarter tend to be seasonally strong from a construction perspective.

So the ramp up that we typically see we do expect in the second quarter and so I do expect that we'll be able to continue to get traction really in that in that business and that is really what is driving the PVC pricing we've seen some.

Traction in the first quarter and PVC pricing over the course of the first quarter. So far this year and Thats really driving that.

Operator: Thank you and one moment for our next question.

Speaker Change: And you can see our commentary and guidance for hip that we do expect revenue growth.

Aleksey Yefremov: Our next question comes from the line of Aleksey Yefremov with. Key Bank Capital Markets. Your line is open. Please go ahead. Good morning, everyone. You mentioned mix in your hit. Sales, NPO1. Could you comment on what's happening in the pricing in specific categories? And I was wondering, pipe and fitting? were prices flat or up? And is there any difference between large and small diameter product? Yeah, there is more value really in the larger diameter, larger diameter business. As you might recall, we're the only player with really the pipe and the fittings combination. And so I would say that that's really where we're seeing the strength.

Speaker Change: And so I do expect that as we start into the second quarter in the third quarter, we will continue to see growth in those activities.

Speaker Change: Okay, and then in Pam sequentially.

Speaker Change: Yeah, and so with that sequential pickup that we're seeing in downstream demand in construction materials those prices that we talked about earlier in PBC that we've been able to nominate in February and March.

Speaker Change: You can see the guidance were providing and revenue so the ramp up that we typically see we do expect in the second quarter and so I do expect that we'll be able to continue to get traction really in that in that business and that is really what is driving the PVC pricing we've seen some <unk>.

April settled relatively flat, we believe those sequentially should be constructive because you get the compounding effect of those prices coming through that we were able to put in place in the first quarter will carry on into the second quarter.

Speaker Change: Traction in the first quarter and PVC pricing over the course of the first quarter. So far this year and Thats really driving that.

Speaker Change: Alright, and the headwind in feedstocks and Pam for Q1 does that.

Speaker Change: Okay, and then in Pam sequentially.

Speaker Change: Improve materially until Q.

So as we think about gas as an example for fuel we've seen that gas is now in the neighborhood of about three and a half and ethane has started to trend lower from the first quarter ethane ran up fairly significantly in the middle portion of the white portion of the first quarter and ethane has trended lower.

Speaker Change: Yeah, and so with that sequential pickup that we're seeing in downstream demand in construction materials those prices that we talked about earlier in PBC that we've been able to nominate in February and March.

Aleksey Yefremov: I would say that when we think about price, it does vary across the country. And so it's hard to quote an overall price. But I would say that with some of the push through in PVC resin, there's sometimes a bit of a lag in getting that all the way through in our pipe and fittings applications. And so you would you have seen some therefore some margin compression in that pipe and fittings business, that's more of a lag than an inability to ultimately get that pricing of that resin through. But the value proposition that we see in the larger pipe business is really why we've continued to stay so very focused in that business.

Speaker Change: April settled relatively flat, we believe those sequentially should be constructive because you get the compounding effect of those prices coming through that we were able to put in place in the first quarter will carry on into the second quarter.

Sure over the month of April and so far in May relative to the peaks that we saw in the first quarter. So that will be a positive headwind or positive tailwind I should say.

Speaker Change: Alright, and the headwind in feedstocks and Pam for Q1 does that.

Speaker Change: Great. Thank you.

Speaker Change: Improve materially until Q.

Speaker Change: Youre welcome.

Speaker Change: Thank you one moment for our next question.

Speaker Change: So as we think about gas as an example for fuel we've seen that gas is now in the neighborhood of about three and a half and ethane has started to trend lower from the first quarter ethane ran up fairly significantly in the middle portion of the white portion of the first quarter and ethane has trended lower.

Speaker Change: Our next question comes from the line of Pete Mr. Lin with Turo Securities. Your line is open. Please go ahead.

Aleksey Yefremov: There are so many players and it's a much more fragmented market in the much smaller diameter forms of pipe. That's where we play a much smaller role, because frankly, it's a smaller value added segment of the business.

Speaker Change: Hey, good morning, Thanks for taking the questions.

Speaker Change: First one I wanted to ask how much of the $80 million of outage costs were planned versus unplanned in the first quarter and could you size the expected costs associated with these outages in the second quarter.

Speaker Change: Sure over the month of April and so far in May relative to the peaks that we saw in the first quarter. So that will be a positive headwind or positive tailwind I should say.

Aleksey Yefremov: Thanks, Steve. Staying with HIP, you just mentioned that overall, after discounts, it sounds like your PVC pricing was lower in Q1. Just broadly, petrochemical prices are lower. Would any of that benefit HIP in the first half or this year in terms of margins? I'm sorry, could you repeat that? I didn't quite fully hear your question. Sorry, the question really is about lower PVC prices and lower petrochemical prices in general, at least at this moment. and would any of them benefit HIP margin? Yeah, so as we think about the the run up, and now we've actually seen some normalization of some of those energy prices we experienced in the first quarter.

Speaker Change: Yeah, and so paid the planned at the planned outages for the turnaround was about two thirds of that $80 million.

Speaker Change: Great. Thank you.

Speaker Change: Youre welcome.

Speaker Change: And so as you heard me in my prepared remarks say that we're ramping up now to meet demand.

Speaker Change: Thank you one moment for our next question.

Speaker Change: Our next question comes from the line of Mr. Lin with tourist Securities. Your line is open. Please go ahead.

Speaker Change: <unk> for the turnaround that we took for both the Petro one unit that was in turnaround as well as our Geismar <unk> tie ins.

Mr. Lin: Hey, good morning, Thanks for taking the questions.

Mr. Lin: First one I wanted to ask how much of the $80 million of outage costs were planned versus unplanned in the first quarter and could you size the expected costs associated with these outages in the second quarter.

Speaker Change: So those units are ramping up over the course of April and May.

Speaker Change: I expect them to be in full or rates.

Speaker Change: By in May.

Speaker Change: Understood. Thank you and then just as a follow up on your plans to reduce capex by 10% this year.

Mr. Lin: Yeah, and so paid the planned at the planned outages for the turnarounds was about two thirds of that $80 million.

Speaker Change: If overall market conditions meaningfully worse and how much could you or would you be willing to cut this year beyond that.

Mr. Lin: And so as you heard me in my prepared remarks say that we're ramping up now to meet demand.

Speaker Change: Well, we actually will take a look at the market conditions as you noted and of course, we won't means we won't pull.

Mr. Lin: For the turnarounds that we took for both the Petro one unit that was in turnaround as well as our Geismar <unk> tie ins.

Aleksey Yefremov: But I would say some of the price dominations we've seen specifically in PVC have come through in terms of recognizing higher prices, but getting the early portions of the first quarter. I hope I answered your question. I was trying to understand, understand your question, Arun. Oh, sorry, Steve. You broke up a little bit, at least on my part. Hall.

Speaker Change: Pull back on spending related to safety and reliability, but we will be focused in making sure that any other activities are certainly being looked at very closely but safety of course is job. One will of course maintain a safe inoperable plant and reliability continues to be an important element in our business.

Mr. Lin: So those units are ramping up over the course of the April and May I.

Mr. Lin: I expect them to be in full of rates.

Mr. Lin: By in May.

Speaker Change: Understood. Thank you and then just as a follow up on your plans to reduce capex by 10% this year.

Speaker Change: We'll take a look and see what those market conditions dictate changes lower are dictated will take those actions.

Speaker Change: If overall market conditions meaningfully worse and how much could you or would you be willing to cut this year beyond that.

Speaker Change: Alright, thank you.

Aleksey Yefremov: But the question was really about lower raw material costs for a care on the build and product side.

Speaker Change: Well, we actually will take a look at the market conditions. As you noted and of course, we won't means we won't pull back on spending related to safety and reliability, but we will be focused in making sure that any other activities or certainly being looked at very closely but safety of course is job one will of course may.

Speaker Change: Welcome.

Thank you one moment for our next question.

Speaker Change: And our next question is going to be from the line of Matthew Blair with Tpa <unk>. Your line is open. Please go ahead.

Speaker Change: Great. Thank you and good morning could you talk about the M&A pipeline market weakness shrinking anything loose or is M&A just not related consideration right now thank you.

<unk> is safe and operable plant and reliability continues to be an important element in our business.

Speaker Change: Matthew the in the.

Speaker Change: The acquisition opportunities has always been an important element in the growth of our business and I would say the dialogues that we have across both segments continue to be good.

Speaker Change: We will take a look and see what those market conditions dictate changes lower are dictated will take those actions.

Thank you.

Speaker Change: Welcome.

Speaker Change: And I would say, we're always thoughtful about how we deploy capital to an acquisition, but I would say there are opportunities in the marketplace and we'll assess those and the value of those bring on an ongoing basis.

Speaker Change: One moment for our next question.

Speaker Change: And our next question is going to be from the line of Matthew Blair with Tpa <unk>. Your line is open. Please go ahead.

Operator: Thank you and one moment as we move on to our next question.

Speaker Change: Great. Thank you and good morning could you talk about the M&A pipeline market weakness shrinking anything loose.

Speaker Change: But in markets such as this there are always good opportunities and we will look at those and act on those if those are good opportunities.

Josh Spector: Our next question comes from the line of Josh Spector with UBS. Your line is open. Please go ahead. Hi, good morning. I wanted to ask specifically on PVC exports in PEM. Are you making any money on the exports of PVC at this point? I'm trying to understand kind of the negative EBIT and some of the shift down, and I guess, depending on your answer there, do you need to flex any of your US operations, just given some of your assets are net short ethylene and probably less advanced? Are there opportunities for you to pull levers to improve that or is my analysis wrong?

Speaker Change: Or is M&A, just not related consideration right now thank you.

Speaker Change: We have a strong balance sheet and.

Speaker Change: An investment grade rated balance sheet, so with the cash and the under leveraged position. We have we see good opportunities, we'll be able to act accordingly.

Speaker Change: Matthew the.

Speaker Change: Acquisition opportunities has always been an important element in the growth of our business and I would say the dialogues that we have across both segments continue to be good.

Speaker Change: Sounds good and then.

Speaker Change: Construction is weak across the board, but could you talk about any patterns and any differences you're seeing in residential versus commercial thank you.

Speaker Change: And I would say, we're always thoughtful about how we deploy capital to an acquisition, but I would say there are opportunities in the marketplace and we'll assess those and the value of those bring on an ongoing basis.

Speaker Change: Well, we don't really address the commercial market. So I can't speak to that market, but I will say that certainly some of the higher interest rates are causing some cautiousness bye bye buyers, but I would say that our guidance has really been consistent that we see housing starts last year at one three consistent with the guidance we see from.

Speaker Change: But in markets such as this there are always good opportunities and we'll look at those and act on those if those are good opportunities, we have a strong balance sheet and.

Josh Spector: You know, Josh, you know, I would say that the export pricing that we're seeing, prices have trended higher, the domestic price we're seeing in PVC will really reflect the export prices. But I agree that the export margin is very narrow, but it is a positive margin. So no need to really flex the, if you will, the front end of the of the manufacturing chain.

Speaker Change: An investment grade rated balance sheet, so with the cash and the under leveraged position. We have we see good opportunities, we'll be able to act accordingly.

Speaker Change: Forecasters like NIH be in others, such as John Burns, we're forecasting starts to be in the $1 $3 million range and that's our view and Thats the guidance on which we built our hip guidance around.

Speaker Change: Sounds good and then <unk>.

Speaker Change: Structuring is weak across the board, but could you talk about any patterns and any differences you're seeing in residential versus commercial thank you.

Josh Spector: Okay, I'll leave it there. Thank you.

Speaker Change: Great. Thanks.

Speaker Change: Well, we don't really address the commercial market. So I can't speak to that market, but I will say that certainly some of the higher interest rates are causing some cautiousness bye bye buyers, but I would say that our guidance has really been consistent that we see housing starts last year at $1 three consistent with the guidance we see from.

Speaker Change: Youre welcome.

Speaker Change: Thank you and our next question comes from the line of Kevin Mccarthy with vertical Research partners. Your line is open. Please go ahead.

Michael Sison: Your next question comes from the line of Michael Sison with Wells Fargo. Your line is open. Please go ahead. Hey, good morning. Morning.

Kevin Mccarthy: Yes, Thank you and good morning, as you look across your portfolio do you see any examples of businesses, where you think volumes are being negatively affected by the international trade chaos and say April or may or is that not the case.

Michael Sison: In terms of your outlook for 2Q, and I know you don't get into specifics, but directionally, you know, should HIP Ibbida get better, and then if PEM could get better, why and what would need to drive that for an improvement in Ibbida for PEM in 2Q versus 1Q? So Mike, as we look at some of the forecasters, such as NAHP for housing starts and even housing permits for the 25 year, we see those numbers forecasted to be in the 1.3 million range. The second quarter and the third quarter tend to be seasonally strong from a construction perspective.

Speaker Change: Forecasters like NIH be in others, such as John Burns, we're forecasting starts to be in the $1 $3 million range and that's our view and Thats the guidance on which we built our hip guidance around.

Speaker Change: And.

Speaker Change: The volume experience.

Speaker Change: Great. Thanks.

Speaker Change: Is is on par with what you would normally expect seasonally.

Speaker Change: Youre welcome.

Speaker Change: Thank you and our next question comes from the line of Kevin Mccarthy with vertical Research partners. Your line is open. Please go ahead.

Speaker Change: No I would say Kevin that there has been cautiousness I would say by customers for exports.

Kevin Mccarthy: Yes, Thank you and good morning, as you look across your portfolio do you see any examples of businesses, where you think volumes are being negatively affected by the international trade chaos and say April or may or is that not the case.

Speaker Change: And so therefore I would say that's caused some just cautiousness across the spectrum in many of our products and so I would say that.

Michael Sison: And you can see our commentary and guidance for HIP that we do expect revenue growth. And so I do expect that as we start into the second quarter and the third quarter, we'll continue to see growth in those activities. You can see the guidance we're providing and revenue. So the ramp up that we typically see, we do expect in the second quarter. And so I do expect we'll be able to continue to get traction really in that business. And that is really what is driving the PVC pricing. We've seen some traction in the first quarter in PVC pricing over the course of the first quarter so far this year.

Speaker Change: We're watching and in dialogue with the customer base that we have across all of our product spectrums, it's affecting not only our chemical.

Speaker Change: Customer base, but also our building products customer base with some of the uncertainty and so that's why I would say that as we look forward were building plans.

Speaker Change: And.

Speaker Change: The volume experience.

Speaker Change: Is is on par with what you would normally expect seasonally.

Speaker Change: No I would say Kevin that there has been cautiousness I would say by customers for exports.

Speaker Change: To deal with a macro economic situation in both sides of our business.

Okay, and then secondly, if I may Steve.

Speaker Change: And so therefore I would say that's caused some just cautiousness across the spectrum in many of our products and so I would say that.

Speaker Change: Steve Your polyethylene.

Speaker Change: Spot export prices seem to be ebbing, a little bit in recent weeks can you update us on.

Michael Sison: And that's really driving that.

Speaker Change: We're watching and in dialogue with the customer base that we have across all of our product spectrums, it's affecting not only our chemical.

Speaker Change: What your expectations are for resin selling prices polyethylene resin that is.

Michael Sison: Okay, and then in PEM sequentially. Yeah, and so with that sequential pickup that we're seeing in downstream demand in construction materials, those prices that we talked about earlier in PVC that we've been able to nominate in February and March, April settled relatively flat, we believe those sequentially should be constructive because you get the compounding effect of those prices coming through that we were able to put in place in the first quarter will carry on into the second quarter.

Speaker Change: Customer base, but also our building products customer base with some of the uncertainty and so that's why I would say that as we look forward were building plans.

Speaker Change: And the next month or two here, including the contract market.

Speaker Change: Yes, the contract market.

To deal with a macro economic situation in both sides of our business.

Speaker Change: <unk> has not yet settled even though we're the first few days of May at this stage. So it's hard to see where that will ultimately land and have certainly those price nominations. We've got a <unk> price nomination that really has just been pushed to may if we don't get that achieved in April. So we'll take a look and see how the market begins to sort itself out.

Speaker Change: Okay, and then secondly, if I may Steve.

Speaker Change: Steve Your polyethylene.

Speaker Change: Spot export prices seem to be ebbing, a little bit in recent weeks can you update us on.

Michael Sison: Right, and the headwind in C stocks and PAM for Q1, does that improve materially in 2Q? So as we think about gas, as an example for fuel, we've seen that gas is now in the neighborhood of about three and a half. And ethane has started to trend lower from the first quarter, you know, ethane ran up fairly significantly in the middle portion, the late portion of the first quarter. And ethane has trended lower over the month of April and so far in May relative to the peaks that we saw in the first quarter. So that will be a positive headwind or positive tailwind, I should Great, thank you.

Speaker Change: What your expectations are for resin selling prices polyethylene resin that is.

Speaker Change: As I say at this stage April has not yet settled.

Thank you very much.

Speaker Change: And the next month or two here, including the contract market.

Speaker Change: Youre welcome.

Speaker Change: Thank you and our next question is going to come from the line of.

Speaker Change: Yes, the contract market.

Arun Viswanathan: Arun Viswanathan.

Speaker Change: <unk> has not yet settled even though we're the first few days of May at this stage. So it's hard to see where that will ultimately land and have certainly those price nominations, we've got a <unk> price nomination.

Speaker Change: Your line is open with RBC capital markets Sorry. Your line is open. Please go ahead.

Speaker Change: Great. Thanks for taking my question Hope you guys are well.

Speaker Change: I guess first off just on caustic.

Speaker Change: That really has just been pushed to may if we don't get that achieved in April. So we'll take a look and see how the markets begins to sort itself out but.

Speaker Change: I guess theres been some stability some strength.

Do you expect that to continue and I guess.

Speaker Change: As I say at this stage April has not yet settled.

Speaker Change: I guess are you guys kind of.

Operator: You're welcome.

Pete Osterland: One moment for our next question. Our next question is going to come from the line of Pete Osterland with Truist Securities. Your line is open. Please go ahead. Hey, good morning. Thanks for taking the question.

Speaker Change: Operating maybe slightly below the market just given some of the maintenance or where would you kind of characterize.

Speaker Change: Thank you very much.

Speaker Change: Youre welcome.

Speaker Change: Thank you and our next question is going to come from the line of Arun Viswanathan.

Speaker Change: Industry and your own operating rates. Thanks.

Speaker Change: So when you think of where we are we've seen price traction in the first quarter that will carryover end of the second quarter from a caustic perspective.

Speaker Change: Your line is open with RBC capital markets Sorry. Your line is open. Please go ahead.

Pete Osterland: First, I wanted to ask, how much of the $80 million of outage costs were planned versus unplanned in the first quarter? And could you size the expected costs associated with these outages in the second quarter? Yeah, and so Pete, the planned outages for the turnarounds is about two thirds of that $80 million. And so as you heard me in my prepared remarks say that we're ramping up now to meet demand for the turnaround that we took for both the Petro One unit that was in turnaround as well as our Geismer VCM tie-ins. So those units are ramping up over the course of April and May.

Arun Viswanathan: Great. Thanks for taking my question Hope you guys are well.

Speaker Change: I guess first off just on caustic.

Speaker Change: And as I mentioned, we've had some turnaround activity with the Vcs tie ins that we had planned in the first quarter in Geismar.

Speaker Change: I guess theres been some stability some strength.

Speaker Change: Do you expect that to continue and I guess.

Speaker Change: And so our operating rates in the first quarter were unusually low because of that turnaround that planned turnaround activity, but as we expect that the construction season will begin to pick up the pull on chlorine will go into water treatment and then the construction materials. So I do expect some further pull on PBC. So I do expect operating rates for.

Speaker Change: I guess are you guys kind of.

Speaker Change: Operating maybe slightly below the market just given some of the maintenance or where would you kind of characterize.

Industry and your own operating rates. Thanks.

Speaker Change: So when you think of where we are we've seen price traction in the first quarter that will carryover into the second quarter from a caustic perspective.

Speaker Change: <unk> for the industry to lift from where they were in the first quarter.

Pete Osterland: I expect them to be in fuller rates by in May. Understood. Thank you.

Speaker Change: Okay. Thanks, Steve and just curious on the impact of China, and Chinese production on PVC I mean historically.

Speaker Change: And as I mentioned, we've had some turnaround activity with the <unk> tie ins that we had planned in the first quarter in Geismar.

Pete Osterland: And then just as a follow up on your plans to reduce CapEx by 10% this year, if overall market conditions meaningfully worsen, how much could you or would you be willing to cut this year beyond Well, we actually will take a look at, you know, the market conditions, as you noted. And of course, we won't pull back on spending related to safety and reliability. But we will be focused on making sure that any other activities are certainly being looked at very closely. But safety, of course, is job one. We'll, of course, maintain a safe and operable plant.

Speaker Change: And so our operating rates in the first quarter were unusually low because of that turnaround that planned turnaround activity, but as we expect that the construction season will begin to pick up the pull on chlorine will go into water treatment and then the construction materials. So we do expect some further pull on PBC. So I do expect operating rates for our <unk>.

Speaker Change: We had.

Speaker Change: They are selling based on production.

Speaker Change: But you can still ship North American PVC over there.

Speaker Change: Understanding you guys didn't necessarily participate in a lot of that do you see any changes.

Speaker Change: Say, the mid term PVC outlook or to get more positive because of.

Tariffs and maybe.

Speaker Change: <unk> for the industry to lift from where they were in the first quarter.

Speaker Change: Less imports are less Chinese exports entering different markets, maybe that would open up some some.

Speaker Change: Okay. Thanks, Steve and just curious on the impact of China, and Chinese production on PVC historically.

Operator: And reliability continues to be an important element in our business. We'll take a look and see what those market conditions dictate. And if changes lower are dictated, we'll take those actions. All right. Thank you.

Speaker Change: And this extra export opportunities for you guys. Thanks.

Speaker Change: We had.

Speaker Change: Yes, I think it's a really good question and it's hard to know exactly where all this may get sorted given the conversations on tariffs, but I would say that when we look at the opportunity has been on the lower end of the cost curve positions us very well the integrated chain, we have gives us an ability to run our plants.

Speaker Change: Theyre acetylene based production that you could still shifting north American PVC over there.

Speaker Change: Understanding you guys didn't necessarily participate in a lot of that do you see.

Matthew Blair: And our next question is going to be from the line of Matthew Blair with TPH. Your line is open. Please go ahead. Great, thank you and good morning.

Speaker Change: Any changes in say the mid term PVC outlook does it get more positive because of <unk>.

Speaker Change: Excuse me I'd add average higher operating rates.

Speaker Change: Tariffs and maybe.

Matthew Blair: Could you talk about the M&A pipeline? Is market weakness shaking anything loose? Or is M&A just not really a consideration right now? You know, Matthew, the acquisition opportunities has always been an important element in the growth of our business. And I would say the dialogues that we have across both segments continue to be good. And I would say we're always thoughtful about how we deploy capital to an acquisition. But I would say there are opportunities in the marketplace, and we'll assess those and the value those bring on an ongoing basis. But in markets such as this, there are always good opportunities.

Speaker Change: And so the <unk> that we added gives us what I would call more elbow operating room and more reliability over the cycle and so we will look for opportunities given how some of these trade negotiations may play through.

Speaker Change: Less imports are less Chinese exports entering different markets and maybe that would open up some some.

Speaker Change: And this extra export opportunities for you guys. Thanks.

Speaker Change: Clearly some of the trade patterns have changed as a result of not only those discussions with Asia players, but also some of the European players have imposed.

Speaker Change: Yes, I think it's a really good question and it's hard to know exactly where all this may get sorted given the conversations on tariffs, but I would say that when we look at the opportunity has been on the lower end of the cost curve positions us very well the integrated chain, we have gives us an ability to run our plants.

Speaker Change: Tariffs as well so we've seen change in trade patterns and we'll certainly take every opportunity we can to leverage that but as you know most of our manufacturing capacity is here most of our demand.

Speaker Change: Excuse me of at average higher operating rates and so the VC that we added gives us what I would call more elbow operating room and more reliability over the cycle and so we will look for opportunities given how some of these trade negotiations may play through clearly some of the trade patterns have changed as a result of not only those discussions.

Matthew Blair: And we'll look at those and act on those if those are good opportunities. You know, we have a strong balance sheet and an investment grade rated balance sheet. So with the cash and the under leveraged position we have, we see good opportunities, we'll be able to act accordingly. Sounds good.

Speaker Change: Is here, we see a large amount of demand for resin domestically and of course about a third of our PVC resin goes into building products. So our export exposure is much more limited than some of our other vinyl peers.

Speaker Change: Thanks.

Speaker Change: With Asia players, but also some of the European players have imposed.

Speaker Change: Youre welcome.

Speaker Change: One moment for our next question.

Matthew Blair: And then, you know, construction is weak across the board. But could you talk about any patterns and any differences you're seeing in residential versus commercial? Well, we don't really address the commercial market. So I can't speak to that market. But I will say that certainly some of the higher interest rates are causing some cautiousness by by buyers. But I would say that our guidance has really been consistent, that we see housing starts last year at 1.3 consistent with the guidance we see from forecasters like NIHB and others, such as John Burns, where forecasting starts to be in the 1.3 million range.

Speaker Change: Our next question is going to be from the line of.

Speaker Change: Higher tariffs as well so we've seen change in trade patterns and we will certainly take every opportunity we can to leverage that but as you know most of our manufacturing capacity is here most of our demand is here, we see a large amount of demand for resin domestically and of course about a third of our PVC resin goes into building.

Speaker Change: Frank Mitsch with Freemium research LLC. Your line is open. Please go ahead.

Speaker Change: Thank you good morning, and long time no speak.

Speaker Change: Hey, Steve I want to come back to the hit margin question I'm not sure if I'm understanding this correctly.

Speaker Change: So would appreciate elucidation here so.

I thought I heard you say that.

Speaker Change: Products, sorry export exposure is much more limited than some of our other vinyl peers.

Speaker Change: Some of the higher margin types of things were sold in the foot was pull forward into the fourth quarter.

Speaker Change: So that would lead to a negative mix effect in the first quarter.

Speaker Change: Thanks.

Speaker Change: Youre welcome.

Speaker Change: Thank you one moment for our next question. Our next question is going to be from the line of.

Speaker Change: And.

Matthew Blair: And that's our view. And that's the guidance on which we've built our HIP guidance around. Great, thanks. You're welcome.

Speaker Change: So yes, it seems that we posted a 24% EBITDA margins and so with that negative mix effect in <unk>, one would suspect that we probably get a.

Frank Mitsch: Frank Mitsch with Freemium research LLC. Your line is open. Please go ahead.

Frank Mitsch: Thank you good morning, and long time no speak.

Speaker Change: Lift in <unk> in terms of margin so it would be some number above.

Speaker Change: Hey, Steve I want to come back to the hit margin question I'm not sure if I'm understanding this correctly.

Kevin Mccarthy: And our next question comes from the line of Kevin McCarthy with Vertical Research Partners. Your line is open. Please go ahead.

Speaker Change: 24.

Speaker Change: And then in.

Frank Mitsch: So would appreciate elucidation here so.

Speaker Change: And so as part and parcel of that.

Speaker Change: Our full year guide in terms of margins with guided towards the low end of 'twenty to 'twenty. Two so is there is there some sense of conservatism here am I misunderstanding should we not expect margins and hip to be better in <unk> versus <unk>.

Speaker Change: I thought I heard you say that you know.

Kevin Mccarthy: Thank you and good morning. As you look across your portfolio, do you see any examples of businesses where you think volumes are being negatively affected by the international trade chaos? say April or May, or is that not the case and, you know, the the volume experience. is on par with what you would normally expect. Now, I'd say, Kevin, that there has been cautiousness, I would say by customers for exports, excuse me. And so therefore, I'd say that's caused some just cautiousness across the spectrum in many of our products. And so I would say that, you know, we're watching and in dialogue with the the customer base that we have across all of our product spectrums. It's affecting not only our chemical customer base, but also our building products customer base with some of the uncertainty.

Speaker Change: Some of the higher margin pipes and fittings were sold in the foot was pull forward into the fourth quarter.

Speaker Change: So that would lead to a negative mix effect in the first quarter.

Speaker Change: And.

Help would be appreciated.

Speaker Change: So yes, it seems that we posted a 24% EBITDA margins and so with that negative mix effect in <unk>, one would suspect that we probably get.

Speaker Change: Yeah, So Frank as we think about the and you outlined the dynamics that I described in the first quarter.

Speaker Change: Quite well and I would say as we think forward about the the guidance that we provided in margin. There is of course some degree of.

Speaker Change: A lift in <unk> in terms of margin. So it would be some number above 20.

Speaker Change: 24.

Speaker Change: Conservative conservatism built into that forecast because I think the outlook that we see in interest rates and some of the dynamics really are unclear at this stage. So as you can see we are seeing growth in share you see that through the growth in revenue and it's really unclear in terms of really how that will progress through the course of the year.

Speaker Change: And then.

Speaker Change: And so as part and parcel of that.

Speaker Change: Your guide in terms of margins with guided towards the low end of 'twenty to 'twenty. Two. So is there is there are some sense of conservatism here am I misunderstanding should we not expect margins and hip to be better in <unk> versus <unk> any help would be appreciated.

Speaker Change: In terms of margin, we certainly will be looking to to gain the share back in our higher value added products in pipe and fittings or one of those but I would say that as we look forward there is some conservative.

Frank Mitsch: Yes, so Frank as we think about the and you outlined the the dynamics that I described in the first quarter quite.

Frank Mitsch: Quite well and I would say as we think forward about the the guidance that we provided in margin. There is of course some degree of.

Kevin Mccarthy: And so that's why I'd say that as we look forward, we're building plans to deal with a macro economic situation in both sides of our business.

Speaker Change: <unk> have you built into that margin guidance.

Frank Mitsch: Conservative conservatism built into that forecast because I think the outlook that we see in interest rates and some of the dynamics really are unclear at this stage. So as you can see we are seeing growth in share you'll see that through the growth in revenue and it's really unclear in terms of really how that will progress through the course of the year.

Speaker Change: Excellent. Thank you.

Speaker Change: And then and then lastly.

Kevin Mccarthy: And then secondly, if I may. Steve, you know, polyethylene spot export price. be ebbing a little bit in recent weeks. Can you update us on what your expectations are for resin selling prices, polyethylene resin that is, you know, in the next month? Including the Yeah, the contract market, you know, April has not yet settled, even though we're the first few days of May at this stage. So it's hard to see where that will ultimately land. And certainly those price nominations, we've got a five cent price nomination, that really has just been pushed to May if we don't get that achieved in April.

Speaker Change: Last quarter as we've seen some some buybacks unfortunately, Mr market seems to be giving you another opportunity here, how should we think about westlake and buybacks in <unk> and beyond.

Speaker Change: So Frank certainly as you know we have.

Frank Mitsch: In terms of margin, we certainly will be looking to to gain the share back in our higher value added products in pipe and fittings or one of those but I would say that as we look forward. There is some conservative conservative view built into that margin guidance.

Speaker Change: <unk> 40 from the Board to act as we see opportunities to do so and we have liquidity to be able to act we will be looking at where we think the best deployment of that capital is and as you can see we took those actions recently.

Speaker Change: We'll assess those opportunities prospectively, we obviously don't guide quarter by quarter, our activity in the market, but certainly we will look at those opportunities and assess is that the best place to deploy our capital and if it is we will certainly act, but theres. Some other good growth opportunities in our business.

Speaker Change: Excellent. Thank you.

Frank Mitsch: And then and then lastly.

Speaker Change: Last quarter as we've seen some some buybacks unfortunately, Mr market seems to be giving you another opportunity here, how should we think about westlake and buybacks in <unk> and beyond.

Kevin Mccarthy: So we'll take a look and see how the market begins to sort itself out. But as I say, at this stage, April has not yet settled.

Speaker Change: You mentioned some of the opportunities through acquisitions, we're also expanding our footprint in PVC pipe as well in Wichita Falls, Texas. So there are some good opportunities that we see but we will also assess are there opportunities in our own stock.

Speaker Change: So Frank you certainly as you know we have authority from the Board to act as we see opportunities to do so and we have liquidity to be able to act we will be looking at where we think the best deployment of that capital is and as you can see we took those actions recently.

Operator: Thank you very much. You're welcome. Thank you.

Speaker Change: Terrific. Thanks, so much.

Arun Viswanathan: And our next question is going to come from the line of Arun Viswanathan.

Speaker Change: Youre welcome.

Speaker Change: Thank you and our next question is going to come from the line of Vincent Andrews with Morgan Stanley. Your line is open. Please go ahead.

Speaker Change: We'll assess those opportunities prospectively, we obviously don't guide quarter by quarter, our activity in the market, but certainly we will look at those opportunities and assess is that the best place to deploy our capital and if it is we'll certainly act, but theres. Some other good growth opportunities in our business.

Arun Viswanathan: Your line is open with RBC Capital Markets. Sorry, your line is open. Please go ahead. Great, thanks for taking my question. I hope you guys are well. I guess, you know, first off, just on Caustic, you know, I guess there's been some stability, some strength. Do you expect that to continue? And I guess, you know, I guess, are you guys kind of operating maybe slightly below the market, just given some of the maintenance? Or where would you kind of characterize industry in your own operating? You know, so when you think of where we are, you know, we've seen price traction in the first quarter that will carry over into the second quarter from a caustic perspective.

Speaker Change: Hi, This is Turner on for Vincent It would be great to make sure that we're level setting for the $100 million of energy and feedstock headwinds correctly. It was all of this is just related to energy markets tightening or were there. Some one time headwinds related to the winter storms, you mentioned that we should back out ahead of it.

Speaker Change: I mentioned some of the opportunities through acquisitions, we're also expanding our footprint in PVC pipe as well in Wichita Falls, Texas. So there are some good opportunities that we see but we'll also assess are there opportunities in our own stock.

For energy costs quarter over quarter in the second quarter.

Speaker Change: Terrific. Thanks, so much.

Speaker Change: Oh Turner it was all related to just really.

Speaker Change: Youre welcome.

Speaker Change: The dynamics that you mentioned in the energy markets, both ethane and ethylene and Nat gas.

Speaker Change: Thank you and our next question is going to come from the line of Vincent Andrews with Morgan Stanley. Your line is open. Please go ahead.

Speaker Change: Okay, great great it would be great to get some color on capex as well in light of the $100 million a reduction of your full year guide can you quantify your maintenance Capex and what was taken out with this reduction.

Speaker Change: Hi, This is Turner on for Vincent It would be great to make sure that we're level setting for the $100 million of energy and feedstock headwinds correctly. It was all of this just related to energy markets tightening or were there. Some one time headwinds related to the winter storms, you mentioned that we should back out.

Arun Viswanathan: And as I mentioned, you know, we've had some turnaround activity with the VCM tie ins that we had planned in the first quarter in Geismar. And so our operating rates in the first quarter were unusually low because of that turnaround, that planned turnaround activity. But as we expect that the construction season will begin to pick up the pull on chlorine, we'll go into water treatment, and into the construction materials. So we do expect some further pull on PVC.

Speaker Change: Yes, so part of that of course that was removed as really as I mentioned earlier, we're looking at our operations in the <unk> Arena that we that we took a charge for in the third quarter of 2024 as I mentioned, we're looking at.

Speaker Change: Head of accounting for energy costs quarter over quarter in the second quarter.

Speaker Change: Turner It was all related to just really the dynamics that you mentioned in the energy markets, both ethane and ethylene and Nat gas.

Arun Viswanathan: So I do expect operating rates for ourselves and for the industry to lift from where they were in the first quarter. Okay, thanks, Steve. And just curious on the impact of China and Chinese production on PVC. I mean, historically, you know, we had their acetylene based production, but you could still, you know, ship North American PVC over there. Understanding you guys didn't necessarily participate in a lot of that. Do you see any changes in, say, the midterm PVC outlook, get more positive because of, you know, tariffs, and maybe less imports, or less Chinese exports entering different markets?

Speaker Change: Actions related to our ECH and AC facilities there.

Speaker Change: So as we think about the the charge that we took in the third quarter of last year, we do expect there'll be diminished capital spending in those operations in the Netherlands, but we'll also look across the entire organization and see are there opportunities to really tighten the belt on some of our operations so ordinary maintenance in the business run.

Speaker Change: Okay, great great.

Speaker Change: Great to get some color on Capex as well in light of the $100 million reduction of your full year Guide can you quantify your maintenance Capex and what was taken out with this reduction.

Speaker Change: Yes, so part of that of course that was removed as really as I mentioned earlier, we're looking at our operations in the <unk> Arena that we that we took a charge for in the third quarter of 2024 as I mentioned, we're looking at.

Speaker Change: <unk> in the neighborhood of $700 million to $800 million and so therefore, as I mentioned safety and reliability would not be those areas, where we would be pulling back on capital.

Speaker Change: Actions related to our ECH and AC facilities there.

Speaker Change: Okay. Thank you.

Speaker Change: Youre welcome. Thank you and as a reminder, if you would like to ask a question at this time. Please press star one on your telephone.

Speaker Change: So as we think about the the charge that we took in the third quarter of last year, we do expect there'll be diminished capital spending in those operations in the Netherlands, but we'll also look across the entire organization and see are there opportunities to really tightened the belt on some of our operations so ordinary maintenance in the business run.

Arun Viswanathan: And maybe that would open up some extra export opportunities for you guys? Thanks. Yeah, I think it's a really good question. And it's hard to know exactly where all this may get sorted, given the conversations on tariffs. But I would say that when we look at the opportunities being on the lower end of the cost curve positions us very well. The integrated chain we have gives us an ability to run our plants. at average higher operating rates. And so the VCM that we added gives us what I would call more elbow operating room and more reliability over the cycle.

Speaker Change: And our next question is going to come from the line of Hassan Ahmed with Alembic Global advisors.

Speaker Change: Advisors. Your line is open. Please go ahead good morning, Stephen Shamrock.

Speaker Change: We've obviously over the last several quarters has been hearing about.

Speaker Change: <unk> in the neighborhood of $700 million to $800 million and so therefore, as I mentioned safety and reliability would not be those areas, where we would be pulling back on capital.

A fair degree of sort of capacity rationalization happening on the ethylene polyethylene side of things.

Speaker Change: Could you comment a bit on what you guys are hearing globally on the PVC side.

Speaker Change: Okay. Thank you.

Speaker Change: Youre welcome. Thank you.

Speaker Change: And part and parcel with that what the global cost curves are looking like within PVC.

Speaker Change: A reminder, if you would like to ask a question at this time. Please press star one on your telephone.

Arun Viswanathan: And so we'll look for opportunities given how some of these trade negotiations may play through. Clearly, some of the trade patterns have changed as a result of not only those discussions with Asia players, but also some of the European players have imposed higher tariffs as well. So we've seen change in trade patterns, and we'll certainly take every opportunity we can to leverage that. But as you know, most of our manufacturing capacity is here. Most of our demand is here. We see a large amount of demand for resin domestically. And of course, about a third of our PVC resin goes into building products.

Speaker Change: And our next question is going to come from the line of Hassan Ahmed with Alembic Global advisors.

Speaker Change: Yes, I mean, if you look at the PVC market Thats been a oversupplied market globally I mean, there is overcapacity certainly.

Hassan Ahmed: Advisors. Your line is open. Please go ahead good morning, Stephen Shamrock.

Speaker Change: In Asia. It has been a market that has tended to rationalize in Europe now.

Speaker Change: We've obviously over the last several quarters has been hearing about.

Speaker Change: As you remember Europe used to be an exporter of PVC across the world and because of raw material cost and certainly energy cost.

Speaker Change: A fair degree of sort of capacity rationalization happening on the ethylene polyethylene side of things.

Speaker Change: Could you comment a bit on what you guys are hearing globally on the PVC side.

Speaker Change: That has stopped so the situation is not yet completely sold at all due to some rationalization that needs to take place in Europe, but you also see upstream and on the ethylene side that some of the crackers that are operating in Europe are also not really profitable and you have started seeing some major producers.

Speaker Change: And part and parcel with that what the global cost curves are looking like within PVC.

Frank Mitsch: So our export exposure is much more limited than some of our other vinyl peers. Thanks. You're welcome. Thank you.

Speaker Change: Yeah, I mean, if you look at the PVC market Thats been a oversupplied market globally I mean, there is overcapacity certainly.

Speaker Change: To rationalize some of their production there. So I think there is still some ways.

Speaker Change: In Asia. It has been a market that has tended to rationalize in Europe now.

Frank Mitsch: Our next question is going to be from the line of Frank Mitsch with Fermium Research LLC. Your line is open. Please go ahead. Thank you.

Speaker Change: As you remember Europe used to be an exporter of PVC across the world.

To go we are not really exposed in terms of ethylene in Europe, we have bayou of ethylene and so on but we are actually have seen a reduction in price in Atlanta, and I think it is putting pressure certainly on ethylene producer in Europe, So I <unk>.

Speaker Change: Because of raw material cost uncertainty energy cost.

Frank Mitsch: Good morning and long time no speak. Hey, Steve, I want to come back to the hit margin question. I'm not sure if I'm understanding this correctly, so would appreciate elucidation here. So, I thought I heard you say that, you know, some of the higher margin pipes and fittings were sold in the fourth, was pulled forward into the fourth quarter. So that would lead to a negative mix effect in the first quarter.

Speaker Change: That has stopped so the situation is not yet completely sold at all due to some rationalization that needs to take place in Europe, but you also see upstream and on the ethylene side that some of the crackers that are operating in Europe are also not really profitable and you have started seeing some major producer.

Speaker Change: There is still some some ways to go in terms of restructuring around the world in some of these commodities.

Speaker Change: Very helpful very helpful and as a follow up you know continuing with sort of the overcapacity theme.

Speaker Change: To rationalize some of their products in there so.

Frank Mitsch: and and so yeah you see so you posted 20.4 percent EBITDA margins and so with that negative mix effect in one queue one would suspect that we'd probably get a a lift in two queue in terms of margins so it would be some number above that 20.4 and then and and so as part and parcel of that the four-year guide in terms of margins was guided towards the low end of 20 to 22 so is there is there some sense of conservatism here am i misunderstanding should we not expect margins and hip to be better in 2q versus 1q any help would be appreciated Yeah, so Frank, as we think about the, you know, and you outlined the dynamics that I described in the first quarter quite well.

Speaker Change: Obviously, we're sort of swimming in oversupply on the epoxy side of things as well.

Speaker Change: There is still some ways.

Speaker Change: To go we are not really exposed to in terms of ethylene in Europe. We have bayou are at the landfill.

Speaker Change: But then there are some glimmers of hope around the whole sort of anti dumping.

Speaker Change: <unk>.

Speaker Change: Sort of duties potentially being imposed so where do we stand on that and are you guys in the camp that as and when those anti dumping duty that do get imposed.

Speaker Change: But we actually have seen a reduction in price in Atlanta, and I think it's putting pressure certainly on ethylene producer in Europe. So.

Speaker Change: You could see at the very least to return to positive EBITDA.

Speaker Change: I think there is still some some ways to go in terms of restructuring around the world in some of these commodities.

Speaker Change: So yes these anti dumping.

Speaker Change: Very helpful very helpful and as a follow up continuing with sort of the overcapacity theme.

Speaker Change: Being somehow being put in place in the U S and in Europe.

Speaker Change: Obviously, we're sort of swimming in oversupply on the epoxy side of things as well.

I think there was an expectation in Europe that prices would start going up and we've seen a little bit of that we've seen certainly a pickup a small pickup in terms of demand, but the expectation that it's going to dramatically improve profitability. Thank you.

Speaker Change: But then there are some glimmers of hope around the whole sort of.

Speaker Change: Anti dumping.

Frank Mitsch: And I would say, as we think forward about the guidance we're providing in margin, you know, there is, of course, some degree of conservative conservatism built in that forecast, because I think the outlook that we see in interest rates and some of the dynamics really are unclear at this stage. So as you can see, we are seeing growth in share, you see that through the growth in revenue. And it's really unclear in terms of really how that will progress through the course of the year in terms of margin. We certainly will be looking to gain the share back in our higher value added products and pipe and fillings are one of those.

Speaker Change: Sort of duties.

Speaker Change: Actually being imposed so where do we stand on that and are you guys in the camp that as and when those anti dumping duty that do get imposed.

Speaker Change: It's going to be a little bit difficult to achieve.

Speaker Change: As a reminder, some of the major producer certainly out of Korea has not been impacted by some of these antidumping.

Speaker Change: You could see at the very least to return to positive EBITDA.

Speaker Change: So.

Speaker Change: Yes. These anti dumping have been somehow being put in place in the U S and in Europe.

Speaker Change: And so tariffs and so that has put a little bit of a.

Speaker Change: Of a damper on our expectations of a quick return to high profitability I would say that the situation in the U S is pretty similar and we have seen certainly.

Speaker Change: I think there was an expectation in Europe, the prices would start going up.

Speaker Change: And we've seen a little bit of that we've seen certainly a pickup a small pickup in terms of demand, but the expectation that it's going to dramatically improve profitability I think it is.

Speaker Change: Better performance in the U S.

Frank Mitsch: But I would say that as we look forward, there is some conservative, conservative view built into that margin guidance.

Speaker Change: But not to the extend boy the market has changed dramatically.

Speaker Change: Very helpful. Thank you so much.

Speaker Change: It's going to be a little bit difficult to achieve as a reminder of some of the major producer certainly out of Korea have not been impacted by some of these antidumping.

Frank Mitsch: Excellent, thank you.

Frank Mitsch: And then, and then lastly, you know, last quarter, as we've seen some, some buybacks, unfortunately, Mr. Mark, it seems to be giving you another opportunity here, how should we think about Westlake and buybacks in 2Q and beyond? Well, Frank, certainly, as you know, we have authority from the board to act as we see opportunities to do so. And we have liquidity to be able to act. We'll be looking at where we think the best deployment of that capital is. And as you can see, we took those actions recently. And we'll assess those opportunities prospectively. We obviously don't guide quarter by quarter our activity in the market.

Speaker Change: Thank you at this time the Q&A session has now ended are there any closing remarks.

Speaker Change: Thank you again for participating in today's call. We hope you will join US again for our next conference call to discuss our second quarter results.

Speaker Change: And so tariffs and so that has put a little bit of a.

Speaker Change: Of a damper on our expectations of a quick return to high profitability I would say that the situation in the U S is pretty similar and we've seen certainly.

Speaker Change: Thank you for participating in today's Westlake Corporation first quarter earnings Conference call. As a reminder, this call will be available for replay beginning two hours. After the call has ended.

Speaker Change: Better performance in the U S.

Speaker Change: The replay can be accessed via Westlake website goodbye.

Speaker Change: But not to the extend boy the market has changed dramatically.

Speaker Change: Very helpful. Thank you so much.

Frank Mitsch: But certainly we'll look at those opportunities and assess is that the best place to deploy our capital. And if it is, we'll certainly act. But there's some other good growth opportunities in our business. I mentioned some of the opportunities through acquisitions. We're also expanding our footprint in PVCO pipe as well in Wichita Falls, Texas. So there are some good opportunities that we see. But we'll also assess are there opportunities in our own stock.

Speaker Change: Thank you at this time the Q&A session has now ended are there any closing remarks.

Speaker Change: Thank you again for participating in today's call. We hope you will join US again for our next conference call to discuss our second quarter results.

Speaker Change: Thank you for participating in today's Westlake Corporation first quarter earnings Conference call. As a reminder, this call will be available for replay beginning two hours. After the call has ended.

Operator: Terrific. Thanks so much. You're welcome.

Speaker Change: Replay can be accessed via Westlake website goodbye.

Vincent Andrews: And our next question is going to come from the line of Vincent Andrews with Morgan Stanley. Your line is open. Please go ahead. All right. Was all of this just related to energy markets tightening or were there some one-time headwinds related to the winter storms you mentioned that we should back ahead of No, Turner, it was all related to just really the dynamics that you mentioned in the energy markets, both ethane, ethylene and net gas.

Speaker Change: Okay.

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Vincent Andrews: It'd be great to Hapex as well in light of the 100 million dollar reduction of your full year guide. Yeah, so part of that, of course, that was removed is really, as I mentioned earlier, we're looking at our operations in the epoxy arena that we that we took a charge for in the third quarter of 2024. As I mentioned, we're looking at actions related to our ECH and AC facilities there. So as we think about the charge that we've took in the third quarter of last year, we do expect there'll be diminished capital spending in those operations in the Netherlands.

Speaker Change: Yes.

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Vincent Andrews: But we'll also look across the entire organization and see are there opportunities to really tighten the belt on some of our operations. So ordinary maintenance in the business runs in the neighborhood of 700 to $800 million. And so therefore, as I mentioned, safety and reliability would not be those areas where we would be pulling back on capital. You're welcome.

Hassan Ahmed: And as a reminder, if you would like to ask a question at this time, please press star 11 on your telephone. And our next question is going to come from the line of Hassan Ahmed with Olympic Global Advisors.

Hassan Ahmed: Your line is open. Please go ahead.

Hassan Ahmed: Morning, Steve and Jean-Marc. You know, we've obviously over the last several quarters been hearing about a fair degree of sort of capacity rationalization happening on the ethylene polyethylene side of things. You know, could you comment a bit on what you guys are hearing globally on the PVC side? And, you know, part and parcel with that, what the global cost curves are looking like within PVC. Yeah, I mean, if you look at the PVC market, it's been a oversupplied market globally. I mean, there is overcapacity, certainly in Asia, it's been a market that has tended to rationalize in Europe now.

Hassan Ahmed: As you remember, Europe used to be an exporter of PVC across the world. And because of raw material costs, and certainly energy costs, that has stopped. So the situation is not yet completely sorted out, there is still some rationalization that needs to take place in Europe. But you also see upstream and on the ethylene side, that some of the crackers that are operating in Europe are also not really profitable. And you have started seeing some major producer to rationalize some of their production there. So I think there is still some ways to go. We are not really exposed in terms of ethylene in Europe, we are buyers of ethylene.

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Hassan Ahmed: But we actually have seen a reduction in price in ethylene. And I think it's putting pressure certainly on ethylene producer in Europe. So I think there's still some ways to go in terms of restructuring around the world in some of these commodities.

Hassan Ahmed: Very helpful. And as a follow-up, you know, continuing with sort of the overcapacity theme, you know, obviously we're sort of swimming in oversupply on the epoxy side of things as well. But then there are some glimmers of hope around the whole sort of anti-dumping sort of duties, you know, potentially being imposed. So where do we stand on that? And are you guys in the camp that as and when those anti-dumping duties do get imposed, you could see at the very least a return to positive EBITDA there?

Hassan Ahmed: So, yes, these anti-dumping have somehow been put in place in the U.S. and in Europe. I think there was an expectation in Europe that prices would start going up. We've seen a little bit of that.

Hassan Ahmed: We've seen certainly a small pickup in terms of demand, but the expectation that it's going to dramatically improve profitability, I think it's going to be a little bit difficult to As a reminder, some of the major producers, certainly out of Korea, have not been impacted by some of these anti-dumping tariffs, and so that has put a little bit of a damp on our expectations of a quick return to high profitability. I would say that the situation in the U.S. is pretty similar, and we've seen certainly better performance in the U.S., but not to the extent where the market has changed dramatically.

Hassan Ahmed: Very helpful.

Hassan Ahmed: Thank you so much.

Operator: Thank you.

Operator: At this time, the Q&A session has now ended.

Operator: Are there any closing remarks? Thank you again for participating in today's call. We hope you will join us again for our next conference call to discuss our second quarter results.

Operator: Thank you for participating in today's Westlake Corporation First Quarter Earnings Conference Call. As a reminder, this call will be available for replay beginning two hours after the call has ended. The replay can be accessed via Westlake's website.

Goodbye.

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