SEC Filings

10-Q
WESTLAKE CHEMICAL CORP filed this Form 10-Q on 05/03/2018
Entire Document
 

WESTLAKE CHEMICAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued
(Unaudited)
(in millions of dollars, except share amounts and per share data)

 
 
March 31, 2018
 
December 31, 2017
 
 
Carrying
Value
 
Fair
Value
 
Carrying
Value
 
Fair
Value
3.60% 2022 Senior Notes
 
$
249

 
$
250

 
$
249

 
$
255

4.875% Westlake 2023 Senior Notes (1)
 
445

 
445

 
445

 
449

4.875% Subsidiary 2023 Senior Notes (1)
 
16

 
17

 
16

 
16

3.60% 2026 Senior Notes
 
740

 
727

 
740

 
757

Loan related to tax-exempt waste disposal revenue bonds
   due 2027
 
11

 
11

 
11

 
11

6 ½% 2029 GO Zone Senior Notes
 
99

 
109

 
99

 
111

6 ½% 2035 GO Zone Senior Notes
 
88

 
97

 
88

 
99

6 ½% 2035 IKE Zone Senior Notes
 
65

 
71

 
65

 
74

5.0% 2046 Senior Notes
 
675

 
740

 
675

 
787

4.375% 2047 Senior Notes
 
491

 
484

 
491

 
518

3.50% 2032 GO Zone Refunding Senior Notes
 
248

 
246

 
248

 
256

4.625% Westlake 2021 Senior Notes (2)
 

 

 
645

 
639

4.625% Subsidiary 2021 Senior Notes (2)
 

 

 
65

 
65

___________________________
(1)
The 4.875% Westlake 2023 Senior Notes and 4.875% Subsidiary 2023 Senior Notes were classified as a component of current liabilities in the consolidated balance sheet at March 31, 2018. For additional information, see Note 5.
(2)
The 4.625% Westlake 2021 Senior Notes and 4.625% Subsidiary 2021 Senior Notes were classified as a component of current liabilities in the consolidated balance sheet at December 31, 2017. For additional information, see Note 5.
9. Income Taxes
The effective income tax rate was 22.9% for the first quarter of 2018 as compared to the effective income tax rate of 27.9% for the first quarter of 2017. The lower tax rate in the first quarter of 2018 as compared to the first quarter of 2017 was a result of the changes enacted under the Tax Act, which was signed into law on December 22, 2017. The effective income tax rate for the first quarter of 2018 was above the U.S. federal statutory rate of 21.0% primarily due to state and foreign taxes. The effective income tax rate for the first quarter of 2017 was below the U.S. federal statutory rate of 35.0% primarily due to certain discrete adjustments, a higher domestic manufacturing deduction, depletion deductions, income attributable to noncontrolling interests, research and development credits and the foreign earnings rate differential, partially offset by state income taxes.
The Tax Act, among other changes, reduced U.S. corporate income tax rate from 35% to 21%, effective January 1, 2018, and also required a one-time deemed repatriation of foreign earnings at specified rates. The accounting guidance on income taxes requires that the effect on deferred tax assets and liabilities of a change in tax rates be recognized in the period the tax rate change was enacted. The SEC staff guidance allows registrants to record provisional amounts during a measurement period when it does not have the necessary information available, prepared or analyzed (including computations) in reasonable detail to complete its accounting for the change in tax law. The measurement period ends when a company has obtained, prepared and analyzed the information necessary to finalize its accounting, but cannot extend beyond one year. The corporate income tax rate change resulted in a revaluation of the Company's deferred tax assets and liabilities. At December 31, 2017, under the above guidance, the Company made a provisional adjustment of $591 of income tax benefit in the 2017 consolidated financial statements for items that the Company could reasonably estimate such as revaluation of deferred tax assets and liabilities and a one-time U.S. tax on the mandatory deemed repatriation of the Company's post-1986 foreign earnings. The Company will continue to assess the income tax effects of the Tax Act based on further standard setting activities, any transition provisions, and changes in the facts and circumstances of the Company's tax position, during the measurement period. No measurement period adjustment was made for the three months ended March 31, 2018.

15