Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the Westlake Chemical Corporation's Second Quarter 2015 Earnings Conference Call. During the presentation, all participants will be in a listen-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, August 4, 2015. I would now like to turn the call over to today's host, Dave Hansen, Westlake's Senior Vice President of Administration. Sir, you may begin.

Thank you very much. Good morning, everyone, and welcome to the Westlake Chemical Corporation's second quarter 2015 conference call. I am joined today by Albert Chao, our President and CEO; Steve Bender, our Senior Vice President and Chief Financial Officer and other members of our management team. The conference agenda will begin with Albert who will open with a few comments regarding Westlake's performance in the second quarter of 2015, followed by a current perspective on the industry. Steve will then provide a more detailed look at our financial and operating results. Finally, Albert will add a few concluding comments, and then we will open the call up to questions. At times today, we may refer to ourselves as Westlake Chemical, references to Westlake Partners refer to the master limited partnership, Westlake Chemical Partners LP. References to OpCo refer to Westlake Chemical OpCo LP, whose assets consist of two natural gas liquids processing facilities located in Lake Charles, Louisiana, our natural gas liquids processing facility located in Calvert City, Kentucky, and an ethylene pipeline that runs from Mont Belvieu, Texas to the chemical facilities located in Longview, Texas. 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. Actual results could differ materially based upon many factors including the cyclical nature of the chemical industry; availability, cost, and volatility of raw materials, energy, and utilities; governmental regulatory actions and political unrest; global economic conditions; industry operating rates; the supply/demand balance for Westlake's products; competitive products, and pricing pressures; access to capital markets; technological developments, and other risk factors discussed in our SEC filings. This…

Thank you, Albert, and good morning, everyone. I will start with discussing our consolidated financial results followed by a detailed review of our Olefins and Vinyls segment results. Let me begin with our consolidated results. In this morning's press release, Westlake reported record net income for the second quarter of 2015 of $205 million or $1.54 per diluted share on net sales of $1.2 billion. This represents an increase of $36 million or $0.28 per diluted share compared to the second quarter of 2014 net income of $169 million or $1.26 per diluted share on net sales of $999 million. Net income for the second quarter of 2015 included a net pre-tax gain of $16 million or $0.13 per diluted share related to a gain from the acquisition of a controlling interest in our Chinese PVC joint venture and an impairment loss related to an equity investment. The gain from the acquisition was non-taxable and lowered our effective tax rate for the second quarter of 2015 from approximately 34.3% to 31.9%. Excluding this one-time net gain, our earnings would have been $1.41 per diluted share. Net sales for the second quarter of 2015 increased by $186 million over the same period in 2014, mainly due to sales contributed by Vinnolit, our specialty PVC resin business, which we acquired in July 2014, and higher sales volumes for most of our major products, partially offset by lower sales prices for all of our major products. Second quarter 2015 income from operations was $295 million, an increase of $28 million over the second quarter of 2014. Operating income benefited from higher vinyls integrated product margins as a result of lower feedstock costs, increased production rates at our Calvert City facility following the completion of the ethylene expansion project, higher production rates at our…

Thank you very much, Albert. Ladies and gentlemen, before we begin taking questions, I would like to remind you that a replay of this teleconference will be available starting two hours after we conclude the call. We will provide that number again at the end of the call. Operator, we're now prepared to take questions.

Our first question comes from the line of Arun Viswanathan from RBC Capital Markets. Please proceed with your question.

Hi guys, thanks a lot for taking my question. I guess my first question is just on the polyethylene market, what are you guys seeing right now as far as demand? Obviously, you had a pretty strong second quarter. However the trade indices are talking about some downward momentum on pricing. Is that something that you're seeing as well and also what do you see on the supply side as far as outages in the second half of the year? Albert Chao - President, Chief Executive Officer & Director: Yes. We had a good polyethylene and vinyl business for the second quarter. Seasonally, the second quarter and third quarter usually are the two strong quarters of the year for both polyethylene and PVC. And we expect the third quarter also to continue with a seasonal pattern of good volume. There is a $0.05 of comp price increase that still is outstanding for polyethylene and is being pushed into August or September depending on the producers. And we believe that depending on oil price movements, if oil price stabilizes, there is a potential for getting a price increase push through.

Okay, thanks. And then I guess just on the Vinyls business, was it the case that you were able to take any share in the second quarter, because of competitor outages or some outages with the Evangeline pipeline? And then if you could just help us understand what portion of the improvement year-on-year was from organic growth versus Vinnolit that would be very helpful? Albert Chao - President, Chief Executive Officer & Director: Certainly, from the earnings and volume base for Vinyls segment, Vinnolit played the big part in the increase, but we're also seeing volume improvements in the domestic and export market for our U.S. business, however as you know, the PVC price did drop compared to last year. So the price moved down, while volume moved up.

As it relates to the year-on-year comparison, I recall that we had not acquired Vinnolit at this point in time last year and so the major contribution really though was driven by our integration investments that Albert made reference to earlier. Certainly, Vinnolit was a nice contributor, but the biggest driver of course was the integration investments that Albert made earlier reference to.

Okay, thanks. And just as a final followup, can you help us understand your own view over the next 6 months to 12 months on the ECU and where you expect caustic soda prices will track? Albert Chao - President, Chief Executive Officer & Director: Yes, with the summer season, the demand for chlorine increases not only for order treatment, but also for PVC in construction. So demand for chlorine is high and production of caustic also is high, commensurate with the chlorine production. As we go to the winter season, this will slow down and put less pressure on caustic.

Okay, thanks.

You're welcome.

Okay. And our next question comes from the line of Jim Sheehan from SunTrust. Please proceed.

Thank you. Just following up on the caustic soda comments there, do you see any potential for upward pricing momentum in the fall due to industry outages and related to that, does Westlake have any outages planned in the fall or the fourth quarter? Albert Chao - President, Chief Executive Officer & Director: Though Westlake does not have any caustic planned turnaround in the fourth quarter, if you look at IHS forecast, they are forecasting caustic prices to move up in the fourth quarter of this year.

Great and on the ethylene supply demand, you mentioned tightness in Europe possibly extending a little further into the third quarter here. When do you guys expect that to loosen up a bit or do you think it remains tight for the balance of the year? Albert Chao - President, Chief Executive Officer & Director: We think that the European ethylene business is improving. I think most of the plants are coming back. I think that the impact on us is more of an inventory issue that will move forward into the third quarter.

Great and lastly, could you just comment on your pipeline dispute with Eastman. Where does that stand now and when do you think that will be resolved? Albert Chao - President, Chief Executive Officer & Director: Jim, we've taken that dispute – this is the directional flow. We've taken that dispute into the courts and it's unclear in terms of how long that will take to get resolved, so we'll just have to keep you posted to see when that concludes.

Okay. Thank you very much. Albert Chao - President, Chief Executive Officer & Director: You're welcome.

Our next question comes from the line of Frank Mitsch from Wells Fargo. Please proceed.

Hey good morning, gentlemen and nice quarter. And obviously gentlemen, you leave the quarter with yet again a terrific balance sheet and I saw that you stepped up significantly the share buyback activity in the quarter. Can you talk about how you're thinking about use of cash for the balance of the year and into next year share buyback versus possible M&A and what the M&A landscape may look like for your particular set of businesses?

Yeah. Frank, as I mentioned earlier, we are continuing work through the expansion that we have in Lake Charles and complete that in 2016 in the first half and so part of the cash will be used obviously for that expansion plan. Certainly we continue to look at deploying the cash on a regular basis. We assess opportunities in the market and at the same time, we do have an authorized program by the board to buy shares back and you saw that we did just exactly some of that in the prior quarter.

So...

So, we'll continue to assess opportunities and see how they fit into our overall business strategies.

What is your sense in terms of the valuation multiples in the chlor-alkali side of the business as well as in the olefins side of the business?

Well, we certainly always assess that relative to where they are and where they'll go and that's part of the analysis that we always undertake.

Okay. Looking at the chlor-alkali side, obviously you talked about getting greater volumes out of the Geismar facility. Where were your operating rates in the second quarter? And how are they trending so far through July? Albert Chao - President, Chief Executive Officer & Director: The operating rate is quite high. As we mentioned in our call that our Geismar facility is doing quite well and we believe they'll continue into the third quarter as well.

So, north of 90% or South of 90%? Albert Chao - President, Chief Executive Officer & Director: I think we're running at higher than industry average rate.

Higher than industry average, okay. So it could still be in the upper 80%. All right, thank you so much. Albert Chao - President, Chief Executive Officer & Director: You're very welcome.

And our next question comes from Hassan Ahmed from Alembic Global. Please proceed.

Good morning, Albert and Steve. Albert Chao - President, Chief Executive Officer & Director: Good morning.

Good morning.

Nice bump up obviously on the Vinyls side of things both year-on-year and sequentially. Just wanted to get a sense of some of the raw material sourcing you may be doing out in Europe. I mean you talked about how Vinnolit was a major contributing factor to the sequential uptick in earnings. Is there some form of advantaged raw material sourcing you're doing out in Europe? Albert Chao - President, Chief Executive Officer & Director: Nothing in particular. As you know, Vinnolit has been in business for decades and they have very good management team and have very good suppliers.

So just essentially regular market purchases? Albert Chao - President, Chief Executive Officer & Director: Yes, sir.

Perfect. And on the polyethylene side, bit of a broader question, obviously a fair bit of noise around the delta between Asian and U.S. pricing being on the higher side relative to where it is normally. In your view is that sustainable near- to medium-term? Albert Chao - President, Chief Executive Officer & Director: There is a relationship between the export price and domestic price and they reflect on each other. I think the Asian price reflect mainly by the recent movements in crude oil. As you know, we're still early in the third quarter. So we don't know what crude oil will do. Today it went up by a 1% to 2% this morning.

Super. Thanks so much, Albert. Albert Chao - President, Chief Executive Officer & Director: You're welcome.

All right. Our next question comes from the line of Edlain Rodriguez from UBS. Please proceed with your question.

Thank you. Good morning, guys. Albert Chao - President, Chief Executive Officer & Director: Good morning.

Good morning.

Just one quick one on PVC. Like what are you seeing in prices and also relative to ethylene prices? I mean can PVC price stay up even if ethylene prices come down or do they have to move together? They essentially lagged. Is the PVC market strong enough to get pricing on its own? Albert Chao - President, Chief Executive Officer & Director: That's a good question. Certainly there's some relationship between feedstock cost and prices, and PVC as a industry exports about 30% of PVC to international markets. So the prices of international markets would have an impact on the export prices and may have an impact directly on domestic prices afterwards.

Okay. That's all I have. Thank you. Albert Chao - President, Chief Executive Officer & Director: Thank you.

And our next question comes from the line of David Begleiter from Deutsche Bank. Please proceed.

Thank you. Good morning. Albert Chao - President, Chief Executive Officer & Director: Morning.

Good morning, Dave.

Thank you. Capital expenditure, as Petro 1 completes the expansion next year, should capital spending trend up, be flat next year or even down post that expansion?

David, we haven't announced our 2016 capital spending program, but certainly the capital spending, as you would guess, will be more elevated in the first half of 2016 and we'll give later guidance as we get toward the end of the year for the full year of 2016. But certainly we have no other announced projects at this stage – for the public at this stage, but we continue to evaluate those all the time.

Fair enough. And just back on the buyback question, Albert and Steve, should the pace of buybacks in the second half be similar to the pace of buybacks in the first half?

So our program that we have authorized from the board allows us to use management judgment in that, and we'll assess the markets at that time.

Thank you very much. Albert Chao - President, Chief Executive Officer & Director: You're welcome.

And our next question is from the line of Don Carson from Susquehanna Financial. Please proceed.

Yes. Just want to go back to your year-over-year volume growth in Vinyls of just under 100%. Which of those comparisons do you start to lap in Q3? So how did the year-over-year comparisons get tougher? Albert Chao - President, Chief Executive Officer & Director: The Vinnolit business would have a partial quarter in the third quarter last year and so from a volume basis the difference will be less.

And then how about on the caustic side? I know you took your time to ramp up Geismar last year, but was that fully ramped up by Q3? Albert Chao - President, Chief Executive Officer & Director: Last year did not operate as well as this year so far. So into the third quarter our caustic business should do better than last year.

All right, okay. And then just if you can remind us, what's your ability to run propane at Petro 2? Albert Chao - President, Chief Executive Officer & Director: Before we made our expansion, we had ability to run 50% propane, but as we expanded our ethylene plant that ability has dropped.

Okay. And how far has that dropped? Has that been cut in half or... Albert Chao - President, Chief Executive Officer & Director: We have not discussed that publicly.

Okay. And then Calvert City... Albert Chao - President, Chief Executive Officer & Director: (33:53) on propane.

Okay. And then how about at Calvert City? I know you would lose ethylene capacity if you ran propane, but do you ever run propane through there from time-to-time or is that just strictly ethane now to get the ethylene production you need? Albert Chao - President, Chief Executive Officer & Director: Most is ethane because of the volume we need.

All right, okay. All right. Thank you. Albert Chao - President, Chief Executive Officer & Director: You're welcome.

Our next question comes from the line of Alexey Abramov (34:21). Please proceed with your question.

Thank you. This is Jagan Prasard sitting in for Alexey (34:26). Could you comment on the housing situation in U.S. and Europe and what sort of outlook you see for the second half and how does that translate down into vinyls? Albert Chao - President, Chief Executive Officer & Director: Yes in recent months we've seen an uptick in home construction, so that's positive. On the other hand, there's still a large part – about 30%, 40% of that is multi-family, which requires less material such as PVC per unit of housing unit built. So we like the trend, but it's not having a material impact on the demand for PVC.

And in Europe? Albert Chao - President, Chief Executive Officer & Director: I think Europe is gradually returning. The economy is improving but very gradually, and we don't play a big part in housing market in Europe.

Sure, thanks. And you mentioned that you haven't changed Vinnolit sourcing strategy much. On the flipside, have you been able to gain traction on leveraging their technology or products in the U.S. or any other benefits along those lines? Albert Chao - President, Chief Executive Officer & Director: Yes, we have. We have a very active exchange of innovation between the two companies' technology people and we are both benefiting from our own technologies.

Okay, great. Thank you. Albert Chao - President, Chief Executive Officer & Director: You're welcome.

And our next question comes from the line of Brian Maguire from Goldman Sachs. Please proceed with your question. Brian P. Maguire - Goldman Sachs & Co.: Hey, good morning. Thanks for taking my questions. Albert Chao - President, Chief Executive Officer & Director: Morning.

Morning. Brian P. Maguire - Goldman Sachs & Co.: Yes. Obviously, very strong results in Vinyls. Just wondering if you can provide an update on the synergies and how they're going at Vinnolit and how far along you are in achieving the expected cost synergies as well as any revenue synergies that you might have found in the meantime?

Brian, as Albert noted, we have really a good exchange of technologies going on and have with the Vinnolit people and at this stage we've been fully integrated with the Vinnolit business and feel very good about the acquisition and feel like it's been well integrated into our overall business and seen some of the benefits accordingly. Brian P. Maguire - Goldman Sachs & Co.: Are you able to ship EDC from the U.S. to Europe to source in Vinnolit? Is that an option for you guys, either over the last couple of months or going forward? Do you expect any changes going forward on your sourcing strategy there? Albert Chao - President, Chief Executive Officer & Director: We have studied that, but so far we haven't shipped EDC to Europe. Brian P. Maguire - Goldman Sachs & Co.: Okay, great. Just one last one if I could. Just a comment on recent trends. In light of the drop in oil prices, are you seeing any early signs that customers might be holding off on some purchases either in the U.S. or Europe? Albert Chao - President, Chief Executive Officer & Director: Our third quarter is quite strong and even into the – second quarter was quite strong in volume. Into the third quarter we still see a pretty strong demand for our products. Brian P. Maguire - Goldman Sachs & Co.: Great. Thanks very much. Albert Chao - President, Chief Executive Officer & Director: You're welcome.

Our next question comes from the line of Jeff Zekauskas from JPMorgan. Please proceed.

Hi, good morning. Albert Chao - President, Chief Executive Officer & Director: Good morning, Jeff.

Good morning.

Hi. You bought back many more shares in second quarter than you did in the first, but I think your average share price or the average share price of Westlake was much higher in the second quarter than it was in the first. What led to your change of heart?

Well, Jeff, it wasn't necessarily a change of heart. It was certainly an opportunity to continue to buy shares and if you look at not only what activity we've taken in acquiring these shares in that quarter, but I also look back over the period of time when we'd been authorized by the board to buy shares. And we still have a very attractive average share acquisition price relative to the current price today. The program the board authorized continues in effect and we'll continue to assess opportunities to buy shares opportunistically in the marketplace.

What was your average acquisition price in the second quarter?

It was in the $70s.

It was in the $70s?

Yes, about $71.

$71. And you have no timetable – so you have roughly $190 million left on your authorization, is that right?

That's about right.

And you have no timetable for the completion of that?

No. There is no limit that the board's given us to exercise that program. It's a discretionary program.

Are your acquisition prospects better than they were three months ago or worse or it's too hard to tell?

Well, there have continued to be a flow of ideas that we look at and we continue to assess those on a regular basis.

Are they large ideas or small ideas or it's hard to tell?

Well they run the range, Jeff, both large and small of course.

How large?

How big is a breadbox now, Jeff? Realistically they run the range, of course.

Okay, great. Thank you so much.

You're welcome. Operator, if I may just say, we have time for one more question, please.

All right, and our final question comes from the line of Jim Sheehan from SunTrust. Please proceed.

Thanks. Could you comment on your building products volumes? I remember last quarter you said that these were impacted by weather a little bit. Did you see any bounce back in the second quarter and how has the dynamic changed, if at all, in early July here? Albert Chao - President, Chief Executive Officer & Director: Yes, the building products volume has improved compared with the first quarter, but not dramatically.

Thank you. Albert Chao - President, Chief Executive Officer & Director: You're welcome.

Okay. At this time, the Q&A session has now ended. Are there any closing remarks?

Yes. We'd like to thank you very much for participating in today's call. We hope you will join us again for our next conference call to discuss our third quarter 2015 results. Have a great day.