Q2 2024 Olin Corp Earnings Call

Operator: Good morning, and welcome to Olin Corporation's second quarter 2024 earnings conference call. All participants will be in listen only mode.

Good morning, and welcome to Olin Corporation's second quarter 2024 earnings Conference call. All participants will be in listen only mode should you need assistance. Please signal a conference specialist by pressing the star key followed by zero.

Operator: Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. Following today's brief opening comments, there will be an opportunity to ask questions. To ask a question, you may press the star key, then one on your touchtone phone.

Today's brief opening comments, there will be an opportunity to ask question to ask a question you May Press Star then one on your Touchtone phone to withdraw your question. Please press Star then two please note. This event is being recorded I would now like to turn the conference over to Steve Keenan Olin's.

Operator: To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to Steve Keenan, Olin's Director of Investor Relations. Please go ahead, Steve. Thank you. Good morning, everyone, and thank you for joining us today.

Steve A. Keenan: Director of Investor Relations. Please go ahead Steve.

Steve A. Keenan: Thank you good morning, everyone and thank you for joining us today.

Steve A. Keenan: Before we begin, I'll remind you that this discussion, along with the associated slides, will include statements regarding estimates or expectations of future performance. Please note that these are forward-looking statements and that actual results could differ materially from those projected. Some of the factors that could cause actual results to differ from our projections are described without limitations in the risk factors section of our most recent Form 10-K and in yesterday's second quarter earnings press release.

Speaker Change: Before we begin I'll remind you that this discussion along with the associated slides and the question and answer session that follows.

Speaker Change: I'll include statements regarding estimates or expectations of future performance.

Steve A. Keenan: Please note that these are forward looking statements and that actual results could differ materially from those projected.

Steve A. Keenan: Some of the factors that could cause actual results to differ from our projections are described without limitations in the risk factors section of our most recent Form 10-K and in yesterday's second quarter earnings press release.

Steve A. Keenan: A copy of today's transcripts and slides will be available on our website in the Investors section under Past Events. Our earnings press release and other financial data and information are available under the press release section. With me this morning are Ken Lane, Olin CEO, and Todd Slater, Olin CFO. We'll begin with our prepared remarks, and thereafter we'll be happy to take your questions. I'll now turn the call over to Ken Lane.

Steve A. Keenan: A copy of today's transcripts and slides will be available on our website in the investors section under past events.

Steve A. Keenan: Our earnings press release, and other financial data and information are available under press releases.

Speaker Change: With me. This morning are Ken Layne, <unk>, CEO, and Todd Slater Olin's CFO.

Steve A. Keenan: Well begin with our prepared remarks, and thereafter, we'll be happy to take your questions.

Ken: I'll now turn the call over to Ken Ken.

Kenneth Todd Lane: Thank you, Steve, and good morning everyone. I want to start by saying how grateful we are that, despite a direct hit on our Freeport, Texas facility by Hurricane Beryl, all our team members are safe. I'm very proud of how everyone responded. We saw the best in each other, with colleagues supporting one another, not only on site during and following the storm, but in each other's homes as well. Many team members experienced significant damage to their homes, and I want to personally thank all of those who stepped up to help during the recovery. While we did experience damage to some of our assets, Olin's preparations limited the impact of the storm and kept our team members and neighbors safe.

Ken: Thank you, Steve and good morning, everyone.

Ken: I want to start by saying how grateful we are that despite a direct hit on our Freeport, Texas facility by Hurricane barrel all our team members are safe.

Ken: I'm very proud of how everyone responded we.

Speaker Change: We saw the best come out with colleagues supporting one another not only on site during and following the storm, but with each other's homes as well.

Speaker Change: Many team members experienced significant damage to their homes and I want to personally. Thank all of those who stepped up to help during the recovery.

Speaker Change: While we did experience damage to some of our assets Owens preparations limited the impact of the storm and kept our team members and neighbors safe.

Kenneth Todd Lane: Turning to our second quarter results, overall, the quarter unfolded as expected, with our chemical businesses improving modestly with seasonal demand gains and generally improved prices. Winchester also delivered on its second quarter objectives, as higher propellant costs were partially offset by improved pricing, continued strength in the military, and a strong performance by White Flyer. Looking ahead to the second half, we now have greater clarity around the macroeconomic outlook, customer demand, and global supply. The industrial-economic trough we find ourselves in looks to be longer-lived than typical. We expect Hurricane Beryl to represent a setback for our chemicals businesses of approximately $100 million in the third quarter.

Speaker Change: Turning to our second quarter results overall, the quarter unfolded as expected with our chemical business is improving modestly with seasonal demand games and generally improved pricing.

Speaker Change: Winchester also delivered on its second quarter objectives is higher for pellet costs were partially offset by improved pricing continued strength in military and a strong performance by white Flyer.

Speaker Change: Looking ahead to the second half, we now have greater clarity around the macroeconomic outlook customer demand and global supply.

Speaker Change: The industrial economic trough, we find ourselves in it looks to be longer lived than typical.

Speaker Change: We expect hurricane barrel to represent a setback for our chemicals businesses of approximately $100 million during the third quarter.

Kenneth Todd Lane: Based on our current outlook and including the effect of the hurricane, we have lowered our full-year 2024 adjusted EBITDA outlook. Olin remains in great shape with our investment-grade balance sheet, strong liquidity, and leading market position. We will continue to be disciplined with our capital allocation strategy as we were during the quarter. Additionally, we remain focused on executing our value-first commercial strategy and continuing to anticipate a bright future as economic activity improves and Olin acts as a coiled spring to serve that recovering demand.

Speaker Change: Based on our current outlook and including the effect of the Hurricane we have lowered our full year 2024, adjusted EBITDA outlook.

Speaker Change: Oh, there remains in great shape, with our investment grade balance sheet strong liquidity and leading market positions.

Speaker Change: We will continue to be disciplined with our capital allocation strategy as we were during the quarter.

Speaker Change: Also we remain focused on executing our value first commercial strategy and continuing to anticipate a bright future as economic activity improves and Olin acts as a coiled spring to serve that recovering demand.

Kenneth Todd Lane: Turning to slide four, I'll highlight our efforts in the second half to maximize cash flow. Our teams will continue to focus on cash generation by reducing capital expenditures in spite of hurricane barrel requirements, maintaining cost discipline, and reducing working capital through the second half of 2024. We've done a lot of restructuring around our chloralkali and epoxy assets and expect to continue to realize benefits in the second half. We will continue to stay focused on cost discipline and explore additional cost-saving opportunities.

Speaker Change: Turning to slide four I'll highlight our efforts in the second half to maximize cash flow.

Speaker Change: Our teams will continue to focus on cash generation by reducing capital expenditures in spite of hurricane, they're all requirements, maintaining cost discipline and reducing working capital through the second half of 2024.

Speaker Change: We've done a lot of restructuring around our chlor alkali and epoxy assets and expect to continue to realize benefits in the second half.

Speaker Change: We will continue to stay focused on cost discipline and explore additional cost saving opportunities.

Kenneth Todd Lane: Now let's turn to slide 5 for an update on our Oralkali and vinyls business. During the second quarter, we saw typical seasonal demand improvement, but little underlying recovery or growth volume. Olin has been extremely disciplined and continues to not sell into weak markets.

Speaker Change: Now, let's turn to slide five for an update on our core alkali vinyls business.

Speaker Change: During the second quarter, we saw typical seasonal demand improvement, but little underlying recovery or growth volume.

Speaker Change: And it's been extremely disciplined and continues to not sell it to weak markets.

Kenneth Todd Lane: The green shoots of demand anticipated as U.S. chlorine customers sought to restart access during the second half proved overly optimistic. Global industrial activity continues to remain weak, with US chlorine demand still running well below pre-COVID levels. As previously mentioned, Hurricane Beryl made landfall in Freeport, TX on July 8, with sustained winds measured at our site in excess of 120 mph. Our remarkable Freeport team mobilized quickly to assess and repair damage. Today, fewer than three weeks after landfall, Olin has safely returned many plants to operation, although wind damage to ancillary equipment has prevented the remainder from resuming production.

Speaker Change: The green shoots of demand anticipated as U S flooring customers sought to restart assets.

Speaker Change: The second half proved overly optimistic.

Speaker Change: Global industrial activity continues to remain weak with U S flooring demand still running well below pre COVID-19 levels.

Speaker Change: As previously mentioned Hurricane barrel made landfall at Freeport, Texas on July eight.

Speaker Change: With sustained winds measured at our site in excess of 120 miles per hour.

Speaker Change: Our remarkable free 14 mobilized quickly to assess and repair damage.

Speaker Change: Today, if you were the three weeks after landfall Olin has safely returned many plants in operation.

Speaker Change: When the homage to ancillary equipment has prevented the remainder for resuming production.

Kenneth Todd Lane: Once this critical equipment is restored, those remaining assets, including our vinyl chloride monomer and phenol acetone plants, will be restarted. Additional global outages have tightened caustic supply and resulted in upward pricing momentum. For a look at our epoxy business, let's turn to slide six. The proxy results continued to improve in the second quarter with lower costs and higher prices. Third quarter epoxy results will be challenged by both the impact of Hurricane Beryl and our planned Stade Germany epoxy resin turnaround.

Speaker Change: What's this critical equipment is restore those remaining assets, including our vinyl chloride monomer and phenol acetone plants will be restarted.

Speaker Change: Additional global outages have tightened caustic supply it has resulted in upward pricing momentum.

Speaker Change: For a look at our our policy business, let's turn to slide six.

Speaker Change: The proxy results continue to improve in the second quarter of lower costs and higher pricing.

Speaker Change: Third quarter of Oxy results will be challenged by both the impact of hurricane barrel and our plant startup, Germany epoxy resin turnaround.

Kenneth Todd Lane: Our U.S. epoxy anti-dumping case continues to progress on schedule with an expectation for provisional duties to be set later this year. We are encouraged that the European Union recently launched a parallel investigation as we pull all available levers to level the global playing field and combat the government-subsidized dumping of foreign apocryphal.

Speaker Change: Our U S. A posse anti dumping case continues to progress on schedule with an expectation for provisional duties to be set later this year.

Speaker Change: We are encouraged that the European Union recently launched a parallel investigation.

Speaker Change: As we pool, all available levers to level, the global playing field and come back the government subsidized dumping of Florida policy.

Kenneth Todd Lane: During the second quarter, we've seen several U.S. and EU importers accelerate their epoxy import volumes. This raises the potential for retroactive duties to be applied, and we would expect our coalition of U.S. producers to request this additional remedy. Olin has been clear with regulators in both the U.S. and Europe that success on each front will be essential to keeping production of these critical materials in the region. Please turn to slide 7 for a Winchester update. As expected, Winchester's second-quarter results were relatively flat versus the first quarter.

Speaker Change: During the second quarter, we've seen several U S and EU importers and accelerate their epoxy import volumes.

Speaker Change: This raises the potential for a retroactive duties to be applied and we would expect our coalition of U S producers to request this additional revenue.

Speaker Change: But what has been clear with regulators in both the U S and Europe that success on each front will be essential to keeping production of these critical materials and region.

Speaker Change: Please turn to slide seven for Winchester update.

As expected Winchester's second quarter results were relatively flat versus the first quarter.

Kenneth Todd Lane: Commercial ammunition sales were sequentially lower, and rising propellant costs and reduced availability generated a headwind. However, domestic and international military sales continued to show strength during the quarter. Winchester military revenues will continue to grow as global defense spending surges. Our Lake City Next Generation Squad Weapon Ammunition Facility Project is expected to generate at least $1 billion of government-funded revenue over the next three to four years. Winchester is a well-respected military partner with a strong brand and reputation within the industry, which provides a solid platform to grow our defense participation.

Speaker Change: Ammunition sales were sequentially, lower and rising propellant costs and reduced availability generated a headwind.

Speaker Change: Domestic and international military sales continued to show strength during the quarter.

Speaker Change: Winchester military revenues will continue to grow as global defense spending surges.

Speaker Change: Our Lake City next generation squad weapon ammunition facility project is expected to generate at least $1 billion of government funded revenue over the next three to four years.

Speaker Change: Winchester is a well respected military partner with a strong brand and reputation within the industry, which provides a solid platform to grow our defense participation.

Kenneth Todd Lane: We expect our military sales across all value chains, domestic, international, and project, to significantly increase in the second half of 2024 compared to the first half. This trend of higher military revenue is expected to continue in the coming years. Also, we continue to see very strong performance by our new white flyer business, exceeding all expectations and delivering on center... Now I'll turn it over to Todd for financial highlights before I wrap up our prepared comments. Thanks, Ken.

Speaker Change: We expect our military sales across all value chains.

Mesnick International: Mesnick International M projects to significantly increase in the second half of 2024 versus the first half.

Mesnick International: This trend of higher military revenue is expected to continue in the coming years.

Mesnick International: Also we continue to see very strong performance by our new White flower business.

Speaker Change: <unk>, all expectations and delivering on the synergies.

Speaker Change: And now I'll turn it over to Todd for financial highlights before I wrap up our prepared comments.

Todd: Thanks, Ken.

Todd A. Slater: Times like these reinforce the importance of Olin's investment-grade balance sheet and our robust cash flow generation throughout the cycle. This strong financial foundation enables Olin to continue running our disciplined commercial model while also currently deploying a substantial portion of our leverage-free cash flow towards share repurchase. We ended the second quarter with $182.1 million in cash and cash equivalents and approximately $1 billion in available liquidity. Our net debt has increased by approximately $229 million from year-end, which is typical with our seasonal increases in working capital.

Todd: Times like these reinforce the importance of olin's investment grade balance sheet, and our robust cash flow generation throughout the cycle.

Todd: This strong financial foundation enables all linked to continue running our disciplined commercial model. While also currently deploying a substantial portion of our levered free cash flow towards share repurchase.

Todd: We ended the second quarter with $182 $1 million in cash and cash equivalents and approximately $1 billion in available liquidity.

Todd: Our net debt has increased by approximately $229 million from year end, which is typical with our seasonal increases in working capital.

Todd A. Slater: The quarter ended with a net debt to adjusted EBITDA ratio of 2.6 times. Our second half cash flow projection will benefit from cash returned from liquidating the first half seasonal working capital build. We now expect working capital at year end 2024 to be similar to year end 2023. We've successfully deferred our international tax payments of approximately $80 million now into 2025.

Warner ended with a net debt to adjusted EBITDA ratio of two six times.

Todd: Our second half cash flow projection will benefit from cash returned from liquidating. The first half seasonal working capital build we now expect working capital at year end 2024 to be similar to year end 2023.

Todd: We've successfully deferred our international tax payments of approximately $80 million now into 2025.

Todd A. Slater: We've reduced our annual capital spending plan by roughly $25 million to approximately $225 million for 2024, despite hurricane barrel requirements of approximately $10 million. With all these initiatives, we expect net debt at year-end 2024 to be similar to year-end 2023. Excluding one-time payments under a long-term energy supply contract of approximately $50 million, our 2024 leveraged free cash flow yield would currently equate to approximately 8%. Now, we turn it back to Ken for a few closing comments.

Todd: We've reduced our annual capital spending plan by roughly $25 million to approximately $225 million for 2024, despite hurricane barrel requirements of approximately $10 million.

With all of these initiatives, we expect net debt at year end 'twenty 'twenty four to be similar to year end 2023.

Todd: Excluding onetime payments under our long term energy supply contract of approximately $50 million or 2020 for Levered free cash flow you know currently would equate to approximately 8%.

Todd: Now, let me turn it back to Ken for a few closing comments.

Kenneth Todd Lane: Thank you, Todd. As we fight through one of the longest troughs I've experienced in over 30 years, it is solely due to Team Olin's discipline and leadership that we've achieved the strongest trough-level ECU values ever recorded and Superior Cash Flow Generation and Share Buybacks during the draw. Finally, I'm excited to announce that Olin will be hosting an Investor Day on Thursday, December 12th at the New York Stock Exchange and via webcast.

Kenneth Todd Lane: Thank you Todd as we fight through one of the longest troughs I've experienced in over 30 years is solely due to T. Mo is discipline and leadership that we've achieved the strongest trough level E. C. You values ever recorded.

And superior cash flow generation and share buybacks during this role.

Kenneth Todd Lane: Now finally, I'm excited to announce that Olin will be hosting an investor day on Thursday December 12th at the New York Stock exchange and via webcast.

Kenneth Todd Lane: Todd and I will be joined by other members of the leadership team to provide an in-depth review of our businesses, strategy, and financial goals. We will share more details with you as we get closer to the day, but we hope many of you will be able to join us. Operator, we're now ready to take questions. We will now begin the question and answer session. To ask a question, you may press star, then one on your touchtone phone.

Kenneth Todd Lane: And I will be joined by other members of the leadership team to provide an in depth review of our business strategy and financial goals.

Kenneth Todd Lane: We will share more details with you as we get closer to the date, but we hope many of you will be able to join us.

Speaker Change: Operator, we're now ready to take questions.

Speaker Change: We will now begin the question and answer session.

Speaker Change: I ask a question you May press Star then one on your Touchtone phone.

Operator: If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press. Star 2. At this time, we will pause momentarily to assemble our roster. The first question comes from Jeff Zekauskas with J.P. Morgan. Please go ahead. Thanks very much. Um, why did you defer your international tax payment? And will your payment be larger or smaller next year than it would have been? Good morning, Jeff. This is Ken.

If youre using a speakerphone please pick up your handset before pressing the keys to withdraw your question. Please press.

Speaker Change: Start to at this time, we will pause momentarily to assemble our roster.

Speaker Change: The first question comes from Jeff.

Jeff: The caucus with J P. Morgan. Please go ahead.

Jeff: Thanks very much.

Jeff: Why do you why did you defer your international tax payment and will your payment to be larger or smaller next year than it would have been this year.

Kenneth Todd Lane: I'm going to hand it over to Todd and let him take care of it. Sure, Jeff. You know, this is the $80 million that we talked about even back in 2023 related to international tax payments that we had successfully deferred into 24. Based on the pace of conclusion of those international tax work, we are able to defer it into 2025 without additional incremental costs to Olin. And it does relate to prior years.

Jeff: Good morning, Good morning, Jeff This is Ken I'm going to hand, it over to Todd and let him take that question.

Todd: Sure. Jeff. This is the $80 million that we talked about even back in 2023 unrelated to international tax payments that we had successfully deferred into 'twenty four.

Speaker Change: Based on that.

Speaker Change: <unk> of conclusion of those international the international tax work, we are able to deferred into 2025 without additional incremental cost to own them and it does relate to prior years. So there is no incremental increase in cost other than about 80 million.

Kenneth Todd Lane: So, you know, there is no incremental increase in costs other than that $80 million. Okay, and in terms of your reassessment of demand for the second half, are there particular industry areas that have slowed relative to your expectations? Hey, Jeff, I'll take that one. This is Ken.

Payment.

Speaker Change: Okay and in terms of your reassessment of demand for the second half.

Speaker Change: Are there particular industry areas that or.

That has slowed relative to your expectations.

Kenneth Todd Lane: So, you know, back in Unknown Executive, Stephen Byrne, Patrick Fischer, Damian Gumpel, Olin Corp. And we were seeing some, you know, some inquiries coming in around volume in the second half for our business. But as we got closer to that, they just didn't materialize because the economy, frankly, is still struggling to really start to grow again. I wouldn't say that there's any significant difference. There was no difference in any one particular industry; there were a couple that we thought there would be some more improvement than what we've seen, maybe in the TIO2 space, maybe in polyurethanes. Both of those have continued to be stable, but have not really shown any growth.

Speaker Change: Hey, Jeff I'll take that one this is Ken So you know back.

Speaker Change: In the first half of the year, even in the first quarter.

Speaker Change: There was a lot of expectation that we were going to start to see the economy improve in the second half of the year I think that is a consensus pretty much across.

Speaker Change: Across industries.

Speaker Change: We were seeing some of you know some inquiries coming in around volume in the second half for for our businesses.

Speaker Change: But as we got closer to that they just didnt develop because the economy frankly, it's still.

Speaker Change: It's still struggling too to really see.

Speaker Change: Start to grow again, I Wouldnt say that theres any.

Speaker Change: Significant difference in any one particular registry there were a couple.

Speaker Change: We thought there would be some sort of more improvement than what we've seen maybe the T. I O two space maybe in polyurethane both of those and have continued to be.

Speaker Change: Table, but have not really shown any any growth so in Q2.

Kenneth Todd Lane: So in Q2, you know, the volume uptick that we saw was more of a normal seasonal uplift; there was really no underlying growth that we saw in the market, which you would expect to see if you were going to see growth in the second half of the year. Thank you very much.

Speaker Change: The volume uptick that we saw was more of a normal seasonal uplift there was really no.

Speaker Change: Underlying growth that we saw in the market, which you would expect to see if you were going to see growth in the second half of the year.

Speaker Change: Okay. Thank you very much.

Hassan I. Ahmed: The next question comes from Hassan Ahmed with Albec Global. Please go ahead. Good morning Ken and Todd.

Ethan Mott: Next question comes from ethane met with how that global Please go ahead.

Hassan I. Ahmed: You know, just a question around, obviously, you guys have sort of reset 2024 expectations and you know, obviously given us commentary around, you know, the demand profile and demand not looking as great as you sort of thought it would be at the beginning of the year, but just more on the numerical side of things. I mean, it seems that, excluding the hurricane impact, you're guiding to 1.04 billion in 2024 EBITDA, around 940 million if you include the hurricane impact.

Ethan Mott: Good morning, Ken and God.

Ethan Mott:

Ethan Mott: You know, it's just a question around obviously you guys have sort of a reset our 2024 the expectation.

Speaker Change: Obviously, given us commentary around.

Speaker Change: You know the demand profile in demand not looking as is as great. As you sort of taught us to be at the beginning of that yet, but just more on the new medical side of things I mean, it seems that.

Speaker Change: Excluding the hurricane impact you're guiding to one point or 4 billion in 2000 2040, EBITDAR around 940 million. If you include the hurricane impact. So I'm just trying to get a better sense of you know what do you guys think in terms of the trough earnings power of the company.

Hassan I. Ahmed: So I'm just trying to get a better sense of, you know, what you guys think in terms of the trough earnings power of the company. Because, you know, it just seems that the bar has been lowered a few times.

Speaker Change: And it just seems that the bar has been lowered a few times you know it was one and a half billion to 2 billion earlier than you know around 1.3, so I'm just trying to get a better sense of it.

Unknown Executive: You know, it was one and a half billion to two billion earlier than, you know, around 1.3. So I'm just trying to get a better sense of internally how you guys are thinking about the trough earnings power. You know, what I would say is we certainly are in the trough. 2012 University of Georgia College of Agricultural and Environmental Sciences. Transcription by Transcription Outsourcing, LLC.

Speaker Change: How you guys are thinking about the draw signings bother with it.

Speaker Change: Yeah. Thanks for the question.

Speaker Change: What I would say is we certainly are in the trough in Europe and if you look at the last the last 12 months.

Speaker Change: I think certainly represent a trough level of earnings and what I will say is I think the expectations are there.

Unknown Executive: Unknown Executive, Stephen Byrne, Patrick Fischer, Damian Gumpel, Olin Corp. Relative to Historic Performance. So, you know, that's not a typical trough level.

Speaker Change: Even if you look at the epoxy business that is in a very unusual position relative to historic performance. So.

Unknown Executive: It's it's really driven by the overinvestment that we've seen in China with the new capacity. And we know the impact that that's having on both Europe and the U.S. market, which is why we've got the anti-dumping cases now. You know, so that's a bit of an unusual case, but I do think that the trough level of earnings is going to be somewhere around this level.

Speaker Change: That's not a typical trough level, it's really driven by the over investment than we've seen in China.

Speaker Change: With the new capacity and we know the impact that that's having on both Europe and in the U S markets, which is why we've got the anti dumping cases out there.

Speaker Change: You know so that's a bit of an unusual case, but I do think that the trough level of earnings is going to be somewhere around this level idle.

Unknown Executive: We expect that it is going to continue at this level significantly longer. As I said in my prepared comments, this is a very long trough that we've been in, and as soon as we, And just, you know, as a follow-up to that whole sort of trough question, you guys were talking about the Value Accelerator Initiative and how that could be a potential quarterly EBITDA tailwind of $25 to $35 million. And I guess the notion was that you guys were...

Speaker Change: Don't expect that it's.

Speaker Change: And it's going to continue.

Speaker Change: At this level significantly longer as I said in my prepared comments. This is a very long form that we've been at.

Speaker Change: And you know as soon as we start to see the Green shoots are not just in the U S markets, but also in the China market and we really need to see China.

Speaker Change: Starts to recover and yet the demand in the economy going there a.

Speaker Change: Europe is probably closer to seeing some improvement, but it's still very very early I would say even in Europe.

Speaker Change: Understood understood and just as a follow up to that call it sort of crossed a question.

Speaker Change: Sure and maybe even late last year, you guys were talking about the evaluate accelerator initiative and how that could be a potential EBITDA tailwind of 25 to 35 got it right and and and I guess you know the notion was that you guys were.

Unknown Executive: Incremental supply with incremental demand, and that kind of gives you the sort of EBITDA uplift. So is it fair to assume that as it stands right now, you know, I mean, Q1 to Q2, the results were a slight increment and you're, you know, excluding the hurricane impact, not really? Q2 to Q3. So is it fair to assume that you're really not seeing anything at all from that value accelerator initiative and As and When Demand Returns? Unknown Executive, Stephen Byrne, Patrick Fischer, Damian Gumpel, Olin Corp. Yeah, Hassan, you were breaking up there. I think I got the...

Speaker Change: Incremental supply with incremental demand and that kind of good news.

Speaker Change: It's sort of EBITDA up there. So is it fair to assume that as it stands right. Now you know in Q1 to Q2 the results with a slight increment in your you know excluding the hurricane impact not really no.

Thank you to the Q3, so is it fair to assume that you'll read got rent and not.

Speaker Change: At all from that Oh value accelerator initiative.

Speaker Change: And as and when demand returns.

Speaker Change: EBITDA, we should go and.

Speaker Change: That's all I had been when you're operating rates and all that.

Speaker Change: Yeah I saw that you were breaking up there I think I got the gist of your question I'll take a shot at it.

Speaker Change: Answer it and then we can come back to it.

Unknown Executive: I'll take a shot at it. You know, listen. We were successful with that value initiative that we had at the end of the year last year because we did stop the fall in the costing price. And that has proven to be successful. In fact, we continue to see firmness in the cost of pricing and even upward momentum at this point in time with the outages, not just that we're seeing in our system but also others in Europe and in Asia.

Speaker Change: Listen we were successful with that with that value initiatives that we had at the end of the year last year, because we did stop the fall in the caustic price.

Speaker Change: And that has proven to be successful in fact, we continue to see firmness in caustic pricing and even upward momentum at this point in time would be where the outage is not just that we're seeing in our system, but also others in Europe and in Asia. So you know so there is a firmness in there is support for pricing.

Unknown Executive: So there is firmness, and there is support for prices going forward, but we are not moving away from our strategy of only selling in the markets where we see values that are acceptable to us, the values that we want to have in our system. So that strategy is going to continue, and focusing on value is what is going to continue to help us maintain a very high level of profit relative to historic troughs. You're going to continue to see us generate very good cash flow at the trough level. Very helpful. Thank you so much.

Going forward, but we are not moving away from our strategy of only selling into markets, where we see value that that is acceptable to us the values that we want to have in our system.

Speaker Change: So that strategy is going to continue and focusing on value is what is going to continue to help us maintain a very high level of.

Speaker Change: Of profit relative to historic troughs.

Speaker Change: Going to continue to see us generate very good cash flow and at the trough level.

Speaker Change: Very helpful. Thank you so much.

Steve Byrne: Thanks. And the next question comes from Steve Byrne with Bank of America. Please go ahead. Yes, thank you. I have got a couple questions about Freeport.

Speaker Change: And the next question comes from Steve Byrne with Bank of America. Please go ahead.

Steve Byrne: You mentioned VCM and phenol, but are the four chloralkali operations there in operation right now? Dow indicated they are still getting chlorine. I don't know; perhaps they get priority for your chlorine out of that plant.

Steve Byrne: Yeah. Thank you got a couple of questions about Freeport.

Steve Byrne: You you mentioned D C N and phenol, but are these are the four core alkali operations. There in operation right. Now now indicated they are still getting corrine I didn't know if perhaps they get priority for your chlorine out of that plant, but in general what was what is what is the most significant.

Kenneth Todd Lane: But in general, what are the most significant issues for the restart of that facility? And maybe a longer-term question for you. What are your plans going to be when Dow shutters their PO operation? Do you anticipate getting, you know, further downstream? Are you satisfied with the margins you're making on EDC relative to what your EDC customers are making off of that? We, uh, yes, you're correct. The assets.

Speaker Change: And issues for the restart of that facility and maybe a longer term question for you for Freeport is.

Speaker Change: What are your plans going to be win win Dow shutters, They're P. O operation do you anticipate getting you know further downstream.

Speaker Change: Are you are you satisfied with the margins, you're making on E. D C relative to whats your EDC customers are making off of that.

Speaker Change: Hey, good morning, Thanks for joining us we are yes, you're correct. The assets that you that you've named it the ones that are still down we have not restarted all of the flooring capacity there yet as you know we've got a force majeure systemwide.

Kenneth Todd Lane: We have not restarted all of the chlorine capacity there yet. As you know, we've got a force majeure system-wide. We're continuing to work through that. But the good news is that there's not any damage, really, to chlorophyll assets.

We're continuing to work through that but the good news is is that there is that there's not any damage really to chlor alkali assets as to equipment.

Kenneth Todd Lane: It's to equipment that supports the VCM and the acetone and phenol assets. So we're not able to operate everything yet, but we're working through getting those assets back online, and the priority is to do that safely and be able to... You know, communicate with our customers when that's going to happen. You know, with regard to the future of the assets there at the Freeport site, you know, we're, we're going to work through the asset strategy.

Speaker Change: In support of it.

Speaker Change: The bcm in the acetyl phenol assets.

So where we're not able to operate everything yet, but we're working through getting those those assets back online and the priority is to do that safely and be able to.

Speaker Change: Communicate with our customers with when that's going to happen.

Kenneth Todd Lane: And, and that's a great question for us to be discussing at the investor day coming up later this year, but we're still working through the options. And, of course, we're going to find the highest value option for the assets there and look forward to sharing that with you at the end of the year. And then just a quick question on these. You know, these anti-dumping initiatives in the US and Europe, which restrict epoxy imports. Does that require some level of government support in order for those initiatives to get some traction? And what is it that you view as enabling those four countries?

Speaker Change: With regards to the future of the assets there at the Freeport site, where we're going to work through the asset strategy.

Speaker Change: That's a great question for us to be discussing at the Investor day coming up later this year, but we're still working through the options and of course, we're going to find the highest value option for our.

Speaker Change: For the assets, there and look forward to sharing that with you at the end of the year.

Speaker Change: And then just a quick question on these.

Speaker Change: The use of anti dumping our initiatives in the U S and in Europe with respect to the Pax era.

Speaker Change: It does it does.

Speaker Change: Does that.

Speaker Change: Require some level of government support in order for those initiatives to to get some traction and what what is it that your you view is enabling those four countries to to undercut you on price in our parks.

Kenneth Todd Lane: To undercut you on price for epoxy, it would seem, you know, to be propylene and energy related, but what's your outlook on that? Well, again, our outlook is that we favor, you know, fair and free trade. That's what we want to have. And what we have seen is that, over the last few years, there have been subsidized assets that have been brought online. [inaudible] You know, to get some protection for domestic producers, they are very much at risk.

Speaker Change: We've seen you know to be propylene in energy related but what's your outlook for that.

Speaker Change: Well again, our outlook is that we favor fair and free trade that that's what we want to have and what we have seen is over the last few years. There have been subsidized assets that are brought online.

Speaker Change: That has created tremendous imbalances and people are operating.

Speaker Change: In a way that they are dumping material into these markets and threatening local production. So.

Speaker Change: You know as I said in the prepared remarks, if if we don't see some intervention with with import duties too.

Speaker Change: You know to get some protection to the domestic producers they are very much at risk.

Speaker Change: And I think these are these are materials that we wanted to continue to produce both in Europe and in the United States market. So.

Kenneth Todd Lane: And I think these are materials that we want to continue to produce both in Europe and in the United States market. So, you know, we'll see how this all plays out. We expect to see some announcements around that later this year, and we hope that it's favorable for local producers. Very good Thank you. And the next question comes from Duffy Vichert with Goldman Sachs. Please go ahead. Yes, good morning. Could you just clarify the Freeport startup or restart?

Speaker Change: So we'll see how this all plays out we expect to see.

Speaker Change: We expect to see some.

Speaker Change:

Speaker Change: Some announcements around that later this year.

Speaker Change: And we hope that we hope it is favorable for the local producers.

Speaker Change: Very good thank you.

Speaker Change: And the next question comes from Duffy.

Duffy: Sure with Goldman Sachs. Please go ahead.

Duffy Vichert: I mean, are we talking weeks or months? Can you roughly give us an idea of the timeline there? Yeah, good morning, Duffy.

Duffy: Yes. Good morning could you just clarify the Freeport start up or restart I mean are we talking weeks or months can you roughly give us an idea of the timeline there.

Kenneth Todd Lane: Yeah, what we're looking at just to kind of scale it for you in weeks and the 100 million that we've put out there as the approximate impact, really is assuming that sometime around mid-August we begin the start-up process. You don't flip a switch, and these assets are running on the first day, but at least we get the assets started up. Sometime around the middle of August is what we are assuming. Okay. And then maybe one for Todd.

Speaker Change: Yeah. Good morning, Duffy, Yeah, what we're looking at just to just to kind of scale. It for you as weeks and the 100 million that we've put out there as the approximate impact.

Really is assuming some time around mid August we began the startup process.

Speaker Change: I'll flip a switch and these assets for fronting on the first day, but at least we get the assets started up sometime around the middle of August is what we're assuming.

Todd A. Slater: On the buyback, at least with the numbers you gave, it looked like your average price was about $56 a share, but I think there were only like 11 or 12 days in the quarter when the stock was even at 56. Can you just walk us through, I mean, what is it, how do you buy? Is it just a couple of days that you take care of it in a quarter? Or, you know, why were we so far off kind of from the average of the quarter?

Speaker Change: Okay.

Speaker Change: And then maybe one for Todd on the buyback at least with the numbers you gave it looked like your average price was about $56 a share but I think there are only like 11 or 12 days in the quarter that the stock was even at 56 can you just walk us through I mean is it how do you buy is it on a couple of days that you take care of it in a quarter or.

Speaker Change: Why are we so far off kind of from the average of the quarter.

Todd A. Slater: Thanks for the question, Duffy. We do operate under a 10-B-5 plan, and over the quarter, generally, our purchases are at or below the weighted average purchase price over that, I'll say, the roughly 90-day quarter period. Don't forget included in that number is the 1% tax associated with share repurchases. So that may be throwing you off a little bit, and rounding may be throwing you off a little bit. Okay, great. Thank you, guys. Thank you. The next question comes from Aleksey Yefremov with Olin. Please go ahead. Hi, good morning, everyone.

Speaker Change: Yeah. Thanks for the question Duffy.

Speaker Change: We do operate under a <unk> five plan and over the quarter generally our purchases are at or below.

The weighted average purchase price over that I'll say, the roughly 90 day quarter period.

Speaker Change: Don't forget included in that number is the 1% tax associated with perjury on share repurchases.

Speaker Change: So that made me throwing you off a little bit in routing, maybe throwing you off a little bit.

Speaker Change: Okay, great. Thank you guys.

Speaker Change: Thank you.

Aleksey Yefremov: I just wanted to confirm that in your EBITDA outlook for the full year, did you assume that the barrel impact goes away completely in the fourth quarter? And also, does the $100 million include any insurance recovery? And if not, do you expect any in the future? Good morning, Aleksey.

Speaker Change: And the next question comes from L E. Yeah for move with Poland. Please go ahead.

Speaker Change: Good morning, everyone I just wanted to confirm that in your EBITDA outlook for the full year did you assume that barrel impact goes away completely in the fourth quarter and also does the 100 million include any insurance recovery and if not do you expect any in the future.

Todd A. Slater: Yeah, that is a Q3 event. We do expect that all to be in the third quarter. At this point, we don't expect to have any insurance recovery at all just based on where we are in terms of the damage levels and the deductibles, but that should all be in the third quarter. Okay, very helpful. And Ken, I mean, you've been in your seat for some time; you just shared sort of a new view on demand, which is weaker.

Alexia: Hi, good morning Alexia.

Speaker Change: And that is a Q3 event, we do expect that all to be in the third quarter. At this point, we don't expect to have any any insurance recovery just based on where we are in terms of the damage levels and deductibles, but that's that's all that all should be in the third quarter.

Todd A. Slater: Any thoughts on the sustainability of card operating rates and Clorox for your system, the sustainability of your pricing strategy and the overall strategy of, you know, pricing for value and operating the way the company's been run for the last couple years? Just, just want to, Need to share your thoughts on this.

Speaker Change: Okay very helpful and can I mean, you're you've been in your seat personal time and he just shared sort of many of you on the Humana, which is weaker.

Speaker Change: Or any thoughts on the sustainability of current operating rates in Chlor alkali for yours, just in sustainability of your pricing strategy and overall strategy.

Speaker Change: You know pricing for value and operating the way the company has been run for the last couple of years just Florida.

Speaker Change: Let me just share your thoughts with us.

Kenneth Todd Lane: Yeah, I'll tell you my thoughts. I mean, I believe very much that we are going to be able to sustain what we have and the way that we operate. I think I commented on this at the last earnings call, Aleksey. I'm very impressed with the flexibility that our teams have shown in being able to adjust the operating rates, again, based on the model that we're running for value. They have learned how to do that very well.

Speaker Change: I'll tell you my thoughts I mean I I.

Speaker Change: I believe very much that we're gonna be able to sustain what we have in the way that we operate I think I commented on this in the last earnings call.

Alexia: Alexia I'm very impressed with the flexibility that our teams have shown.

Alexia: And being able to adjust on the operating rates again based on the model that we're running for for value.

Alexia: They have learned how to do that very well in.

Kenneth Todd Lane: Initially, I think it's the sort of thing that you have to go through that learning curve because it is a change in how we operate. But they have done very well at adjusting, and everybody, not just on the commercial side but also in the manufacturing plants. We've made some real progress in learning how to operate differently, and we're going to continue to do that. We'll also continue to look for areas to optimize and reduce costs. That is not something that we are going to lose sight of.

Alexia: Actually I think it's just the sort of thing that you have to go through that learning curve because it is a change in how we operate.

Alexia: But they have done very well at adjusting and it's everybody not just on the commercial side, but also on the manufacturing plants. We've we've made some real progress in learning how to operate differently and we're going to continue to do that will continue.

Alexia: Also to look for areas to optimize and reduce cost that is not something that we're going to lose sight of we are staying very focused on that and.

Kenneth Todd Lane: We are staying very focused on that, and you can imagine that as you... As you do things like what we have done over the last couple of years when you're rationalizing assets, you can still find ways to reduce costs as you optimize the asset base that's left. And we're going to continue to be really, really focused on that as an organization. The next question comes from David Edgeletter with Deutsche Bank.

Alexia: You can imagine that as you.

Alexia: As you do things like what we've done over the last couple of years, when you're rationalizing assets.

Alexia: You can still find ways to reduce costs as you optimize the asset base that is left and we're going to continue to be really really focused on that as an organization.

Kevin: Thanks, Kevin.

Kevin: The next question comes from David.

David Begleiter: Please go ahead. Thank you. Good morning, Ken. Does the $100 billion impact from Beryl include any benefit from the announced price increases for July? The $100 million does not include any benefit from that.

David: That's where there with Deutsche Bank. Please go ahead.

David: Thank you good morning, Ken.

David: Does the $100 billion impact from barrel include any benefit from the announced price increases for for July.

Speaker Change: The $100 million does not include any benefit from from that we we are expecting to see some improvement in pricing in the second half of the year is as we said that we believe that.

Kenneth Todd Lane: We are expecting to see some improvement in pricing in the second half of the year. We believe that, especially in the caustic market, there is firmness there with all of the outages that we've seen around the world. So that does include some, you know, the outlook does include some improvement in cost. Unknown Executive, Stephen Byrne, Patrick Fischer, Damian Gumpel, Olin Corp.

Speaker Change: Especially in the caustic market there is firmness there with all of the outages that we've seen around.

Speaker Change: Around the world So that that does include some.

The outlook does include some improvement in caustic.

Speaker Change: Pricing, but that 100 million is just really just the cost and lost a lost opportunity impact.

Kenneth Todd Lane: Very good. And just again, back on Freeport, pre-hurricane, what were the operating rates of those four chlorine units you had? Listen, as I said before, what our focus is, is running to meet the demand that we see in the market. That value that we like. So we don't focus on utilization rates as a metric in terms of our performance or how we think about running our business.

Speaker Change: Very good and just again back on Freeport pre hurricane why or what would the operating rates are those for chlorine units you have.

Kenneth Todd Lane: We do focus on reliability, you know; we want to be able to run at the levels that we want to run at, but we're very, We're very flexible in how we do that, and so the utilization rate, we don't look at that as a metric around our operating performance. We focus on reliability. And to be clear, today, are any of those four units running today? Yes, we do have some of the units online, but we have not restarted all of them yet. So, two on, two off. Is that fair?

Speaker Change: Well listen as you know like I said before what what our focus is running to meet the demand that we see in the market and without that we'd like so we don't focus on utilization rates as a.

Speaker Change: As a metric in terms of our performance or how we think about running our business. We do focus on reliability, we want to be able to to run at the levels that we want to run at but we're very.

Speaker Change: We're very flexible in how we do that and so the utilization rate. We don't we don't look at that as a as a metric around our our operating performance we focus on reliability.

Speaker Change: And to be clear today or any of those four units running today.

Speaker Change: Oh, yes, we do have we do have some of the units online, but we have not restarted all of them yet.

Speaker Change: So two on two office that fair.

Kenneth Todd Lane: No, we're not going to comment on any of the specifics around specific units. Okay, thank you. The next question comes from Patrick Cunningham with Citi. Please go ahead.

Speaker Change: No we're not going to comment on any of the specifics around specific units.

Speaker Change: Okay. Thank you sure.

Speaker Change: Okay.

Speaker Change: And the next question comes from Patrick Cunningham with Citi. Please go ahead.

Patrick David Cunningham: Hi, good morning, Ken and Todd. So there's some new capacity coming online in the back half of the year from one of your competitors, you know. How does this, in your view, impact the market and your ability to bring back volumes and raise prices? Morning, Patrick.

Patrick David Cunningham: Hi, good morning, Curt and Todd So there's there's some new capacity coming online in the back half of the year from one of your competitors how does in your view how does this impact the market and your ability to bring back volumes.

Speaker Change: These operating rates.

Kenneth Todd Lane: So I don't see that really impacting that volume has already been contracted up earlier this year, even later in the year last year. So it's already in the market. I don't see that being an issue. I know there's a lot of chatter about that in the market, but it's, it's, it's already in the market, frankly. So I'm not, I don't see that as a head

Speaker Change: Good morning, Patrick So I I don't see that really impacting that that volume has already been contracted up earlier this year or even later in the year last year. So it's already in the market.

Speaker Change: I don't see that being an issue I know theres a lot of chatter about that in the market, but it's it's it's already in the market frankly, so I'm not I'm not I don't see that as a headwind.

Kenneth Todd Lane: And you've obviously talked about, you know, improvement in commercial volumes, as well as the strength in the military in the back half for Winchester. I'm trying to better understand where we are in the cycle here, you know, how you're thinking about cyclicality, given, you know, the full general discussion across the whole business in terms of cyclical earnings power. The Winchester business is a very strong business for us.

Speaker Change: Understood and you've obviously talked about you know improvement in commercial volumes as well as the strength in the military in the back half for Winchester trying to better understand where we are in the cycle here you know how youre thinking about cyclicality given you know the full general discussion across the whole business in terms of cyclical earnings power.

Speaker Change: Although the Winchester business is very strong business for us we've seen.

Kenneth Todd Lane: We've seen this year, of course, a big step up in our military revenue and profitability around that, especially international military. The international military business this year is on track to be double what it is. I would not, you know, we don't think about Winchester, that business, really having a cycle.

Speaker Change: This year of course, a big step up in our in our military revenue and the profitability around that especially international military.

Speaker Change: The international military business. This year is on track being double what it is I would not yeah, we do.

Speaker Change: Don't think about Winchester that business really having a cycle.

Kenneth Todd Lane: It is a much more stable cash generator for us and a much more significant one than it was even just a few years ago now that we've got the Lake City contract. That has been a very strong business for us, working with the U.S. Army. So, you know, that business has some seasonality to it. Typically, in the second quarter, it's a little bit weaker. This year, it was down a little bit more than normal. I think you've seen that across the board.

Speaker Change: It is a much more stable cash generator for us in a much more significant one and it was even just a few years ago now that we've got the the Lake City contract that has been of a very strong business for us working with the U S Army.

Speaker Change: So you know that business. It has some seasonality to it typically in the second quarter, it's a little bit weaker.

Speaker Change: This year it was down a little bit more than normal I think you've seen that across the other.

Kenneth Todd Lane: The Sporting Goods Retail Space. I think a lot of that is related to inflationary pressures on the consumer. So it's going to track, the consumer part of that business is going to track more of the general economy and how inflation is going, while the military side of that obviously is going to be tracking more of what's happening geopolitically, and the setup right now for that business for the long term is quite strong on the military side. Great Thank you so much.

Speaker Change: The sporting goods retail space I think a lot of that is related to the inflationary pressures on the consumer.

Speaker Change: So it's going to track the consumer part of that business is going to attract more of the general economy and how inflation is going.

Speaker Change: While the military side of that obviously is going to be tracking more with what's happening geopolitically and to set up right now for that business for the long term is quite strong and the military side.

Speaker Change: Great. Thank you so much.

Speaker Change: <unk>.

Kenneth Todd Lane: And the next question comes from Evan McCarthy with Vertical Research. Please go ahead. Yes, thank you, and good morning.

Speaker Change: And the next question comes from Evan Mccarthy with vertical research. Please go ahead.

Kevin Mccarthy: Yes, Thank you and good morning.

Kevin Mccarthy: Ken, there's been a fair amount of discussion about the Sherry purchases, but I'm curious to hear your thoughts on... Potential for inorganic growth as you take a fresh look at Olin's portfolio here. The company has been, I would say, modestly active in recent years through White Flyer and the Blue Water alliance with Mitsui, but nothing really bigger than a breadbox, so to speak. What are your views, say, for the next two or three years on portfolio composition and potentially using the balance sheet to advance external growth?

Kevin Mccarthy: Ken There's you know a fair amount of discussion on the share repurchases, but I'm curious to hear your thoughts on potential.

Kevin Mccarthy: Potential for inorganic growth as you take a fresh look at Orleans portfolio here.

Speaker Change: And he's been a I would say modestly active in recent years through white flyer in the Blue water Alliance with Mitsui, but there's nothing really bigger than a bread box. So to speak what what are your views you know say for the next two or three years on portfolio composition and potentially using the <unk>.

Speaker Change: Balance sheet to advance external growth.

Kevin Mccarthy: Good morning, thanks. Well, listen, we will continue if we see opportunities like the one that we saw with Whiteflyer, which has been extremely attractive. You know, we've been able to leverage our channels to market and really make that business flourish. It's been very impressive what the Winchester team has done with Whiteflyer.

Speaker Change: Good morning. Thanks.

Speaker Change: And we will continue if we see opportunities like the one that we saw with Wi Flyer, which has been extremely attractive we've been able to leverage.

Speaker Change: Our channels to market and really make that business flourish. It's been very impressive with the Winchester teams has done with with light flyer.

Speaker Change: So if we see opportunities like that the small scale bolt ons that we think are going to be highly accretive and ones that we can run better than current owners. We're gonna move all knows anything beyond that.

Kenneth Todd Lane: So we see opportunities like that, the small-scale bolt-ons that we think are going to be highly creative and ones that we can run better than the current owners; we're going to move on those. Anything beyond that, you know, we'll, we'll talk more about that at our investor day. You know, you can imagine we're, we're thinking about where we want to go in the future. And that's part of the conversation. But right now, there's no change.

Speaker Change: We'll talk more about that at our Investor day. So you can imagine where we're thinking about where we want to go in the future and that's part of the conversation, but right now there's no change in what we're thinking about in terms of how we use the balance sheet, we're going to continue to stay focused on having a strong investment grade balance sheet.

Speaker Change: And then continue with our capital allocation strategy as we have up to this point.

Kenneth Todd Lane: And what we're thinking about in terms of how we use the balance sheet, we are going to continue to stay focused on having a strong investment grade balance sheet and continue with our capital allocation strategy as we have up to this point. Okay, then as a second question, if I may, on Winchester, how would you compare and contrast your margins in the military versus commercial?

Speaker Change: Okay, and then as a second question if I may on Winchester, how would you compare and contrast, your margins and in military versus commercial and perhaps related to that is the propellant remarket our markets seemingly remains quite tight.

Kenneth Todd Lane: And perhaps related to that is the propellant market seemingly remains quite tight. Does that impact... or how does that impact margins in the military versus commercial? Or is it a similar impact on both of those types of businesses?

Speaker Change: Does that impact.

Speaker Change: Or how does that impact margins and military versus.

Speaker Change: Commercial or is it a similar impact on both of those types of businesses. Maybe you can talk through some of the mix issues are that are evolving in Winchester.

Kenneth Todd Lane: Maybe you can talk through some of the mixed issues that are evolving in Winchester. Sure, yeah, I mean, listen. On the Winchester side, the military business is clearly a lower margin than the commercial business, there's no doubt. The domestic military is the lowest; the international Military is... actually an attractive margin for us.

Speaker Change: Sure Yeah, I mean listen on the Winchester side, the military business is clearly a lower margin than the commercial business, there's no doubt.

Speaker Change: The domestic military has the lowest international military is actually an attractive margin for us.

Speaker Change: But it's still not as good as commercial so that's kind of the mix that we see across the portfolio in terms of propel and <unk>.

Speaker Change: Clearly, we're going to prioritize for pellets for for the U S military.

Speaker Change: That's that's one of the requirements around the Lake City asset so that's.

Kenneth Todd Lane: That's the way that would work in terms of the allocation of volume, but so far, we've been able to secure the volume that we need that both covers our military demand and commercial demand. It is a very tight market, and those costs have gone up. Some of that has been offset by some pricing, but frankly, not all of it, and we're going to continue to see that headwind in the second half of the year.

Speaker Change: That's the way that that would work in terms of allocation of volume, but we have been so far we've been able to secure the volume that we need that both covers our military demand in the commercial demand. It is a very tight market and those costs have gone up.

Speaker Change: Some of that has been offset.

Speaker Change: With some pricing, but frankly, not all of it and we're going to continue to see that headwind in the second half of the year. This is this is an area where I think in the market overall when you look at propel us.

Kenneth Todd Lane: This is an area where I think in the market overall, when you look at propellants. It is an area that there's got to be some strategic focus, from even national security concerns that there's got to be some clear path forward on how we secure that capacity for United States demand, and we don't want to be importing that from regions that are not necessarily friendly to the U.S. I think there's more to come on that.

Speaker Change: It is an area of that.

Speaker Change: There's got to be some strategic focus from even national security concerns.

Speaker Change: So there's got to be some some clear path forward on how we secure that capacity for the United States.

Speaker Change: Demand and we don't want to be a fortinet from from regions that are not necessarily friendly to the U S. So I think theres more and more to come on that I know I know the government is looking at that and we're eager to see where that goes because it will have a long term impact on on <unk>.

Kenneth Todd Lane: I know the government is looking at that, and we're eager to see where that goes because it will have a long-term impact on Winchester, but being a large player in that market, we've done a very good job securing the physical volume that we need, but you know the cost is still going to be a headwind going forward. Thank you. Thank you. The next question comes from Matthew Blair with CPH. Please go ahead. Good morning.

Speaker Change #100: Winchester, but being a large player in that market, we've done a very good job securing this physical.

Speaker Change #100: Volume that we need but you know that.

Speaker Change #101: Cost is still going to be a headwind going forward.

Understood. Thank you.

Speaker Change #102: Thank you.

Speaker Change #102: The next question comes from Matthew Blair with C. P. H. Please go ahead.

Matthew Blair: Thanks for taking my question. I'm glad everyone is safe after the hurricane. For that $100 million impact, is there a breakout between the CAPV and POCSI segments? And then I just want to confirm, but it sounds like the $940 million full-year guide actually does include an assumption of better caustic pricing in Q4. Yeah, thanks for your question, Matthew. You know, the split, if you think about the asset that we've talked about. It's going to be around 70-30 roughly. You know, don't make that too precise, but that's kind of the range that you could think about, 70 for chloralkali.

Matthew Blair: Oh good morning, Thanks for taking my question I'm glad everyone is safe after the hurricane for that 100 million impact is there a breakout between the C. P V. In hoxie segments, and then I just wanted to confirm but it sounds like the $940 million full year guide actually does include an assumption of.

Matthew Blair: A better caustic pricing in Q4.

Speaker Change #104: Yeah. Thanks for your question Matt.

Speaker Change #105: The split if you think about the assets.

Speaker Change #106: That we've talked about it it's going to be around 70 30 roughly.

Speaker Change #107: Make that too precise, but that's kind of the range that you could think about 74 chlor alkali.

Kenneth Todd Lane: I would use that as a rough estimate. You know, and when we think about the back half of the year, yeah, we see that there's pricing momentum. So in our outlook, we've included some, some improvement in the cost of the market. Sounds good.

Speaker Change #108: 34 of policy you know.

Speaker Change #108: I would use that as a rough estimate.

Speaker Change #108: And when we think about the back half of the year, Yeah, we see that there's pricing momentum.

Speaker Change #108: In our outlook we've included some.

Speaker Change #108: Some improvement in the caustic market.

Kenneth Todd Lane: And then, you know, according to just various market indicators, EDC prices fell by a couple pennies in the second quarter. But it looks like on slide 10, in your system, EDC prices moved up quarter over quarter. Could you talk about, you know, what you were able to do to capitalize on that market? I think that's a reflection of our model, right? That's exactly what we try to do is manage, manage our portfolio for the value that we want to have.

Speaker Change #109: Sounds good and then.

Speaker Change #111: According to various market indicators EDC prices fell by a couple of pennies in the second quarter, but it looks like on slide 10 in your system EDC prices moved up quarter over quarter could you talk about you know what.

Speaker Change #110: What's you are able to do to capitalize on that market.

Kenneth Todd Lane: And we are very agile in doing that. And we're going to continue to use that model. That's why, as I said previously, there's a lot of focus on indexes. Some of them are better than others, but our focus is on getting the highest value that we can for the volumes and the assets that we've got in our portfolio. And that's what you see reflected.

Speaker Change #112: But I think that's a reflection of our model right. That's exactly what we tried to do is manage our manage our portfolio for the value that we want to have and we're very agile in doing that and we're going to continue to.

Speaker Change #112: To use that model that.

Speaker Change #112: That's why I think I had said previously is it I guess theres a lot of focus on indexes some of them are better than others, but but our focus is on getting the highest value that we can for.

Speaker Change #112: For the the volumes and the assets that we've got in our portfolio and that's what you see reflected there.

Speaker Change #113: Great. Thank you.

Speaker Change #112: <unk>.

Kenneth Todd Lane: Great, thank you. Thank you. And the next question comes from Arun Viswanathan with RBC. Please go ahead.

Speaker Change #112: And the next question comes from Arun.

Jonathan with RBC. Please go ahead.

Arun Viswanathan: Great, thanks for taking my questions. Yeah, glad to hear things are safe there at Freeport. So I guess just wanted to circle back to how you're thinking about... profitable conditions and maybe an early look on 25. So, assuming we do kind of settle in the mid-900s on EBITDA this year, obviously, a good part of that is hurricane related. And you noted a couple of times that you do feel like this is a trough.

Arun Viswanathan: Great. Thanks for taking my questions, Yeah glad to hear things are save their Freeport. So I guess just wanted to circle back to how you're thinking about.

Speaker Change #114: Although conditions and maybe an early look on twenty-five so I'm, assuming we do kind of settle in the mid nine hundreds on EBITDA this year.

Speaker Change #115: Obviously, a good some of that is is hurricane related.

Speaker Change #116: And you noted a couple of times that you you do feel like this is a trough.

Arun Viswanathan: What kind of growth should we expect, I guess, moving forward? And what are some of the indicators that you're looking for to see that inflection point coming? Is it this kind of macro-related interest rate environment and so on? Or is there something else that we can kind of hone in on?

Speaker Change #120: What kind of growth should we expect I guess moving forward I mean, what and what are some of the indicators that you're looking for to see that inflection point coming is it just kind of macro related interest rate environment and so on or is there something else that we can kind of hone in on that.

Kenneth Todd Lane: Yeah, thanks for the question, Arun. So listen, I think there's a lot of uncertainty, not just in the United States around everything that's happening currently, and with the elections coming up, but even globally.

Speaker Change #118: Yeah. Thanks for the question.

Speaker Change #119: And I think there's a lot of uncertainty not just in the United States around everything Thats happening.

Speaker Change #119: Currently and with the elections coming up but even even globally. So that uncertainty I don't think we're going to get any real clarity on where things are going until after the elections and maybe even into the beginning of next year. So you know where we're taking more of a wait and see approach, but the things the things that we're going to watch we're gonna be thing.

Kenneth Todd Lane: So that uncertainty, I don't think we're going to get any real clarity on where things are going until after the elections and maybe even into the beginning of next year. So we're taking more of a wait-and-see approach, but the things that we're going to watch are going to be things like what's happening in the U.S. housing market. Are we seeing the Fed reduce interest rates, and are we seeing buyers coming back into, you know, are we seeing that the Chinese economy has really begun to recover, because that is still missing?

Speaker Change #119: Like what's happening in the U S housing market are we seeing the fed reduce interest rates and are we seeing buyers coming back into the housing market, where housing starts to take a meaningful step up.

Kenneth Todd Lane: And, and Chinese local demand is going to have to grow significantly to begin to match very closely over the coming months, but it is way too early to start talking about what we see for a 2025 outlook. Okay, and well, maybe I can ask the question a little differently then. So, you know, if you do have a resumption of normal operations, you know, given some of the capacity that you've taken out, would that be a limitation on your earlier comments, maybe a little while ago, that peak EBITDA was kind of in the 3 billion range? You know, maybe it is now kind of two and a half or, you know, well below that?

Speaker Change #119:

Speaker Change #119: Are we seeing that the Chinese economy.

Speaker Change #121: Has really begun to recover because of that that is still missing in.

Speaker Change #119: And the Chinese local demand is going to have to grow significantly and to begin to help.

Speaker Change #119: To help the global economy economy come back so we're gonna be watching those sources day.

Speaker Change #119: Very closely over the coming months, but it is it is way too early to start talking about what we see for 2025 outlets.

Speaker Change #122: Okay, and maybe I can ask the question a little differently than so you know if you do have a resumption of normal operations.

Speaker Change #122: You know given some of the capacity that you've taken out.

Speaker Change #123: Is that would that be a limitation on your earlier comments, maybe a little while ago that <unk>.

Speaker Change #124: EBITDA is kind of in the in the $3 billion range.

Speaker Change #125: Yeah, maybe is that now kind of two and a half for Oh, well below that and then Hum along those lines do you see any kind of structural impairment to any of these markets I know epoxy has gone through a pretty significant pullback, especially in China and demand.

Kenneth Todd Lane: And then along those lines, do you see any kind of structural impairment to any of these markets? I know epoxy has gone through a pretty significant pullback, especially in China and demand. It's unlikely that China will return to its prior growth rates.

Speaker Change #126: Unlikely that China will return to their prior growth rates. So you know I don't know if they've taken enough actions to rightsize the their own epoxy market either so it seems like that business does have some structural limitations that werent there in the past.

Kenneth Todd Lane: So, you know, I don't know if they've taken enough action to right-size their own epoxy market either. So it seems like that business does have some structural limitations that weren't there in the past. And then on chloroquine, again, you've shut down some capacities.

Speaker Change #127: And then on car alkali again, you've shut down some capacity. So I just wanted to understand if there's been any change in kind of the earnings power of the businesses.

Kenneth Todd Lane: So just wanted to understand if there's been any change in the earnings power of the business. Listen, I said in the prepared comments as well that, you know, we've positioned ourselves very well with a set of assets that are going to be competitive in the long term. They're very well positioned on the cost curve.

Speaker Change #128: Well listen I have said in the prepared comments as well that you know, we've we positioned ourselves very well with.

Speaker Change #129: A set of assets that are going to be competitive in the long term, they're very well positioned on the cost curve.

Kenneth Todd Lane: We're continuously looking at optimizing our asset portfolio, especially around chlorophyllite. But our focus is going to be on operating those assets. As we see demand coming back, we will adjust our position in the market to be the ones that are capturing that growth. I mean, that's really how we position ourselves.

Speaker Change #129: We're continuously looking at optimizing our asset portfolio, especially around around Chlor alkali.

Speaker Change #129: But our focus is is going to be on operating those assets as we see demand coming back we will adjust our position in the market to be the ones that are capturing that growth I mean, that's really the way we've positioned ourselves. So if you think about the capacity puts us offline.

Kenneth Todd Lane: So if you think about the capacity we took offline, it doesn't take away the optionality for us to be that coiled spring, as we've called it, to be able to respond when we see the growth coming back. With respect to epoxy, yes, structurally there are more challenges in that market, and that's why, again, we've been so vocal about the anti-dumping cases that we have filed. It's very important that there is some support that comes into those markets.

Speaker Change #129: It does it it doesn't take away the optionality for us to be that at coiled spring as we've called it.

Speaker Change #129: To be able to respond when we see the growth coming back.

Speaker Change #130: With respect to two or possibly yes structurally there are you know.

Speaker Change #130: War challenges in that market and that's why again, we've been so vocal.

Speaker Change #130: The anti dumping cases that we have that we have filed we think that is.

Speaker Change #130: Very important that there is some support that comes into those markets.

Kenneth Todd Lane: But ultimately, you know, there probably does need to be some restructuring in the Chinese market; there's probably going to need to be some capacity that goes offline. Because, to your point, it's going to be a very long time before they're able to grow into that capacity.

Speaker Change #130: But ultimately you know theyre, probably does need to be some restructuring in the China market theres, probably going to need to be some capacity that comes offline because to your point is going to be a very long time before they're able to grow into that capacity.

Kenneth Todd Lane: And when you've seen these sorts of troughs in the past, that's what happened. You've seen capacity come off, in conjunction with growth in the market, and both of those things will typically correct themselves over time, but it's going to be years, if not months, before we see that happen. Great, thanks for that. And just one quick last one.

Speaker Change #130: Now when you've seen these sorts of trough in the past that's what's happened.

Speaker Change #131: <unk> capacity come off.

Speaker Change #131: In conjunction with growth in the market in both of those things, we'll typically correct themselves over time, but it's going to be years not months before we see that happen.

Kenneth Todd Lane: So if you do generate, you know, that level of EBITDA, you will be kind of maybe north of four or 500 million in free cash flow. So is stock buyback still the preferred deployment of that cache, or are there some other options you're considering? We are not changing anything about our capital allocation strategy.

Great. Thanks for that and just one quick last one so if you do generate them you know that level of EBITDA. You know you will be kind of maybe north of four or 500 million of free cash flow. So is stock buyback still.

Speaker Change #131: The preferred deployment of that cash.

Speaker Change #132: Or are there some other options we're considering.

Speaker Change #133: Yeah, we're not we're not changing anything on our capital allocation strategy will continue to be a buyer of our shares with the excess cash that we've got.

Kenneth Todd Lane: We will continue to be a buyer of our shares with the excess cash that we've got. We still view our shares very much as being discounted to the value that they should be and will continue to be a steady buyer going forward. Thanks. The next question comes from Mike Sisson with Wells Fargo. Please go ahead.

Speaker Change #133: Yeah, we still view our shares very much is being discounted to the value that they should be and it will continue to be a steady buyer.

Speaker Change #133: Going forward.

Speaker Change #133: Thanks.

Rob: Thanks, Rob.

Speaker Change #135: And the next question comes from Mike Sison with Wells Fargo. Please go ahead.

Michael Joseph Sison: Hey, good morning, guys. Ken, you might want to save, you know, some ammo for analyst day. But how do you think about mid-cycle EBITDA here? You know, you've, you know, any thoughts there? And maybe, to some degree, if you can't get the specifics, you know, when you do get volume growth back, how do we sort of model that into better EBITDA? And so maybe a contribution margin to think about as we get closer to mid-cycle dynamics. Sure. Thanks, Mike. And yeah, you're right.

Michael Joseph Sison: Hey, good morning, guys I'm, Ken you might want to say you know some ammo for the analyst day, but how do you think about mid cycle. EBITDA here you know US you know any thoughts there on and maybe to some degree if you can't get the specifics.

Speaker Change #137: When you do get volume goes back how do we sort of model that into better EBITDA and answer maybe a contribution.

Speaker Change #137: Eastern margin to <unk>.

Speaker Change #138: [noise] about as we get to as we get closer to mid cycle dynamics sure. Thanks.

Kenneth Todd Lane: You know, some of the work that we're going through right now is working through where we think those things will land, especially looking at our asset strategies and how that's going to shape up and, you know, where we're going with Winchester, those sorts of things. So, you know, when I think about where we are and how we're going to go forward, The biggest thing that we see is that as that coil starts to unwind, demand starts to come back.

Speaker Change #139: Thanks, Mike and yeah, you're right. So that's that some of the work that we're going through right now is it.

Speaker Change #139: As a working through where we where we think those things land, especially looking at our asset strategies and how that's going to shape up and.

Speaker Change #139: You know, where we're going with Winchester those sorts of things.

Speaker Change #139: So.

Speaker Change #139: When I when I think about.

Speaker Change #139: Oh.

Speaker Change #139: When I think about where we are and how we're going to go forward.

Speaker Change #139: The biggest the biggest thing that we see is as that coil starts to spring as demand starts to come back.

Kenneth Todd Lane: That's the biggest lever that we see in terms of our portfolio today. You know, yes, there will be some steady improvements with epoxy over time. We've already done some things around self-help in terms of restructuring and cost reductions.

Speaker Change #139: That's the biggest lever that we see in terms of our portfolio today.

Speaker Change #140: Yes, there's going to be some steady improvements with a policy overtime, we've already done some things around self help in terms of restructuring and cost reduction we continue to realize the benefits of that that's that is coming through in line with what we had expected.

Kenneth Todd Lane: We continue to realize the benefits of that, and that is coming through in line with what we had expected. As I said earlier, we'll look for additional cost savings and put that as a priority as well. But really, as you start to see demand come back in for that, that leverage around the volume that we have in chlor-alkali, that's where the real upside is to get you back to that mid-cycle level of earnings the quickest. The question is always going to be, well, when does that happen?

Speaker Change #140: As I said earlier, we will look for additional.

Speaker Change #140: Cost savings and put that as a priority as well.

Speaker Change #140: But really as you start to see demand come back in that.

Speaker Change #140: That leverage around the volume that we have in Chlor alkali, that's where the real upside is to get you back to kind of that mid cycle level of earnings. The quickest. The question is always going to be but when does that happen and frankly, we don't know.

Kenneth Todd Lane: And frankly, we don't know. We're going to be prepared, though, when it does happen, and we'll be the ones that are going to benefit from that recovery. Great. And as a follow-up, when you think about getting to that mid cycle, you know, right now, on slide 10, caustic is the stronger side, and chlorine is the weaker side. So, in mid-cycle, is chlorine the stronger side where you really could, you know, lever up profitability and, and maybe talk about, you know, how that needs to, if that's sort of what creates that higher EBITDA, which side needs to be stronger, et cetera? Yeah, that's a great question, Mike.

Speaker Change #140: We're gonna be prepared though when it does happen it will be the ones that are going to benefit from that from that recovery.

Speaker Change #141: Great and as a follow up when you think about getting to that mid cycle.

Speaker Change #142: Right now.

Speaker Change #143: In Slide 10, you know cost it gets stronger Si chlorine weaker side.

Speaker Change #144: So in mid cycle is chlorine the stronger side, where you really can you lever up profitability in and maybe talk about you know how that need it and if that's sort of what creates that higher EBITDA is lit side needs to be stronger et cetera, yeah. That's a great.

Kenneth Todd Lane: And as you can imagine, it's all about the timeframe. And, you know, I know you're referring to the chart that's in the appendix that we had issued. It's a much shorter-term discussion than that, so you can't look at a cycle and say, you know, across a cycle, one side needs to be the stronger versus the other. The model that we run, we adjust that very frequently

Speaker Change #144: Question, Mike and as you can imagine it's all about the timeframe and I know you're referring to the chart. That's in the appendix that we had issued.

Speaker Change #145: It's a much shorter term discussion than that so you can't look at the cycle and say.

Speaker Change #145: You know across the cycle, one side needs to be the stronger versus the other.

Kenneth Todd Lane: It's, you know, it's going to be within the month; we may change between what we see as the weak or the strong side. You know, so that. That's the way that we think about that; it's not a long-term play; it's a very short-term operational, and commercial decision making that we need overall, and frankly, that's going to be driven by the demand that we see on each side. It's going to be demand improving on both the chlorine and the caustic side that's going to help accelerate. Got it.

Speaker Change #146: The model that we run we adjust that very frequently but it's you know it's gonna be within the month, we may change between what we see is the week of the strong side.

Speaker Change #145:

Speaker Change #145: You know so that's.

Speaker Change #145: That's the way, we think about that it's not a it's not a long term play it's a very short term.

Speaker Change #147: Operational commercial.

Speaker Change #147: Decision, making that we need overall.

Speaker Change #147: And frankly, that's that's going to be driven by the demand that we see on each side, but.

Speaker Change #147: It's gonna be demand improving on both the chlorine and caustic side, that's going to help accelerate that.

Speaker Change #148: Got it thank you.

Kenneth Todd Lane: Thank you. And the next question comes from Mike Leithead with Barclays; please go ahead. Great, thanks. Good morning, guys.

Unknown Executive: And the next question comes from Mike Hi, let head with.

Speaker Change #150: Please go ahead.

Michael Leithead: I wanted to follow up to a previous question, just how you're thinking about capital deployment in the current earnings backdrop. Should we expect any share repurchases in the second half of this year? Are you comfortable with where your leverage ratio is now intended to end this year? Just how are you thinking about everything here in the second half? Yeah, I mean, I'll comment on that, and then I'll ask Todd to add to that. But yeah, we will continue to be a buyer again with the excess cash flow that we've got. But Todd, do you want to add to that?

Unknown Executive: Great. Thanks, Good morning, guys I wanted to follow up to a previous question just how you're thinking about capital deployment in the current earnings backdrop should we expect any share repurchases in the second half of this year are you comfortable with where your leverage ratio is now intended to end. This year, just how you're thinking about everything here in the second half.

Speaker Change #151: Yeah, I mean I'll I'll.

Tom: I'll comment on that and then I'll ask Tom to add to that but yeah. We will continue to be a buyer again with the excess cash flow that we've got but Todd you want to add to that no.

Todd A. Slater: Yeah, no, sure. You know, we've taken several actions here, you know, to really improve our second half cash flow. And then our prepared remarks are articulated. Previously, we had talked about working capital being a use for the year. We now think that will be at least neutral. We have deferred the $80 million of international tax payments, and reduced capital spending.

Speaker Change #151: Sure.

Tom: We've taken several actions here to really improve our second half cash flow and in our prepared remarks I articulated.

Todd: Previously, we had talked about working capital being a use for the year. We now think that will be at least neutral we have deferred the $80 million of international tax payments reduced capital spending so all of those actions enable us to keep we would expect that flat from where we.

Todd A. Slater: So all those actions enable us to keep, we would expect that flat from where we were at the end of 23 to the end of 24. So that does enable us to utilize our leverage free cash flow towards share repurchase. And that will allow us to continue to repurchase shares in the back half. Great, that's super helpful.

Todd: We were at the end of 'twenty three to the end of 'twenty four so that does enable us to utilize our levered free cash flow towards share repurchase and that will allow us to continue to repurchase shares in the back half of the year.

Michael Leithead: And then just briefly, I want to clarify on the third quarter outlook. It sounds like you would have expected chemicals to be flat before the barrel impact, and Winchester should improve sequentially. So is it fair to summarize that the third quarter should be down something on a consolidated basis, like 80 to 90 million EBITDA sequentially? Mike, your comments on chemicals at Winchester are correct, based on our outlook. In the second quarter, corporate and other had a significant benefit associated with a reduction in the stock-based compensation, a much lower stock price.

Todd: Yeah.

Speaker Change #153: Great. That's Super helpful. And then just briefly I wanted to clarify on the third quarter outlook. It sounds like you would have expected chemicals to be flat before the barrel impact in Winchester should improve sequentially.

Is it fair to summarize that third quarter should be down something on a consolidated basis like $80 million to $90 million EBITDA sequentially.

Speaker Change #153: Mike when you your comments on chemicals of Winchester are correct.

Speaker Change #153: Based on our outlook.

In the second quarter corporate and other unfortunately had a significant benefit associated with a reduction in the stock based compensation a much lower stock price. So.

Speaker Change #153: We would not necessarily expect that to continue into the third quarter.

Michael Joseph Sison: So your numbers might be.

Speaker Change #155: Who maybe haven't taken that part into account.

Michael Joseph Sison: Yeah.

Speaker Change #154: Fair enough. Thank you.

Todd A. Slater: We would not necessarily expect that to continue into the third quarter, so your numbers might be, you know, maybe haven't taken that part into account. Fair enough. Thank you. And the next question comes from Josh Spector with UBS. Please go ahead. Yeah, hi, good morning.

Speaker Change #154: And the next question comes from Josh Spector with UBS. Please go ahead.

Joshua David Spector: So Ken, in some of your earlier comments, you talked about demand for chlorine and caustic as well below 2019 levels. I guess when we look at some of the consultant data, it's kind of forecasting about 10% below. How would you characterize what you're seeing in the merchant market? Is it meaningfully different than that at this point in time? Good morning, Josh.

Joshua David Spector: Yeah, Hi, good morning.

Joshua David Spector: So Ken in some of your earlier comments you talked about.

Kenneth Todd Lane: Demand for chlorine and caustic is well below 2019 levels.

Kenneth Todd Lane: I guess when we look at some of the consultant data, it's kind of forecasting about 10% below.

How would you characterize what you're seeing in the merchant market is it meaningfully different than that at this point in time.

Kenneth Todd Lane: No, it's not. I mean, it's in that range. So, you know, it's what I had commented before, until we really see... the economy generally globally is coming back because, you know, a lot of even domestic demand was supporting exports. And until we see the global economy, really, and we say the economy is really the industrial economy where we're focused, that's where we're going to start to see that recovery. But remember, in that time, we've also taken offline a lot of capacity.

Joshua David Spector: People are Josh no its not I mean, it's in that range. So you know we we.

Kenneth Todd Lane: It's what I had commented before until we really see.

Kenneth Todd Lane: The economy generally globally coming back because there are a lot of even domestic demand.

Kenneth Todd Lane: Supporting exports and until we see the global economy really.

Kenneth Todd Lane: We say the economy is truly industrial economy, where we're focused.

Kenneth Todd Lane: That's what we're going to start to see that recovery, but remember in that time. We've also taken offline a lot of capacity. So that that makes that that really tightened that spring, but that we keep talking about.

Kenneth Todd Lane: So that that really tightens that spring that we keep talking about. Yeah, thanks. And I guess, to that point, I mean, if I kind of go off of consultant forecasts, there's not really a strong snapback forecasted in 2526, maybe a couple percent a year. Obviously, your circuit is a lot lower.

Speaker Change #157: Yeah, Thanks, and I guess, I mean to that point I mean, if I kind of go off with consulting forecast, there's not really a strong snapback forecasted in 'twenty five 'twenty six maybe a couple of percent a year. Obviously your circuit is a lot lower and I assume theres still some slack and other players and we talked earlier about some additional capacity.

Kenneth Todd Lane: And I assume there's still some slack in other players, and we talked earlier about some additional capacity. I guess, how do you see Olin performing relative to that? Is that something where you can really bring back volumes at a much greater rate than the market without having an impact on pricing, or? How do you navigate that scenario?

Kenneth Todd Lane: City.

Speaker Change #158: I guess, how do you see OLED performing relative to that is that something where you can really bring back volumes at a much greater rate than the market without having an impact on pricing or.

Speaker Change #159: How do you navigate that scenario yeah.

Speaker Change #160: Well listen that's what you do in commodities right I mean, we're focused on having the most competitive assets that we can have I'm not going to comment on what other what others are doing but you know obviously, it's it would be a very challenging time to make any kind of an economic case around a large investment in these commodities. So I would be I would be surprised.

Kenneth Todd Lane: It would be a very challenging time to make any kind of an economic case for a large investment in these commodities, so I would be surprised. It's certainly not something that we're going to be doing. We believe that you've got to consider different scenarios when you're thinking about these things because when you're in the trough, it always looks worse, and you never think it's going to get better. And we're not naive enough to fall into that trap.

Speaker Change #160: Certainly not something that I'm that we're gonna be doing.

Speaker Change #160: We've we've we believe that you've gotta considered different scenarios when you're thinking about these things because when you're in the trough.

It always looks worse than you'd never think it's going to get better.

Speaker Change #160: And we're not we're not naive enough to fall into that trap, we know things are going to get better at some point.

Kenneth Todd Lane: We know things are going to get better at some point, but trying to predict when it's going to get better gets to be a little bit dicey. So we're going to be thinking about scenarios going forward. We're going to be prepared when that demand comes back with a competitive asset base to be able to supply that demand and capture that demand as it grows and comes back into the market. That is our focus.

Speaker Change #160: To predict when it's going to get better that gets to be a little bit dicey. So we're gonna be thinking about scenarios going forward, we're gonna be prepared when that demand comes back with.

Speaker Change #160: With a competitive asset base to be able to supply that demand and capture that.

Speaker Change #160: That demand as it grows and comes back into the market. That's that is our focus but.

Kenneth Todd Lane: You know, there's a lot of... Negative outlooks that are out there, and all I'll say is... You know, think about this in scenarios, because if you get too focused on one scenario, you're going to be wrong.

Speaker Change #160: You know theres a lot of.

Speaker Change #160: Negative outlooks that are out there and all I'll say is.

Speaker Change #160: You know think about different scenarios, because if you get too focused on one scenario you're going to be wrong.

Kenneth Todd Lane: Fair enough. Thanks, guys. And the next question comes from Frank Mitsch with Spermium Research. Please go ahead. Thank you. Good morning.

Speaker Change #161: Fair enough thanks, guys.

Speaker Change #161: And the next question comes from Frank Mitsch with Fermium Research. Please go ahead.

Frank Mitsch: I want to come back to the pricing question. It was nice to see that PCI picked up 15% sequentially into the second quarter. So I was curious, you know, looking at your system, what was the biggest driver of that?

Frank Mitsch: Thank you good morning, I wanted to come back to the pricing question. It was a nice to see.

Speaker Change #163: That's a P C I picked up 15% sequentially.

Frank Mitsch: Sequentially into the second quarter. So I was curious you know.

Kenneth Todd Lane: And how do you think about the outlook for the PCI? Yeah, thanks for the question, Frank. I mean, listen, like I said before, there's going to continue to be pricing momentum in the second half of the year. As we've said, the demand is firm out there. We've seen some seasonal improvement, but supply has tightened up a little bit. So, you know, our expectation is that going forward, we'll continue to be able to manage our portfolio and the mix that we have there to, you know, maximize the value for Olin. That's, that's our goal.

Looking at your system, what was the biggest driver.

Speaker Change #164: All of that and and how do you think about the outlook on the T. G I.

Yeah. Thanks for the question, Frank I mean listen like I said before there there's going to continue to be pricing momentum in the second half of the year as we've said the no. The demand is firm out there we've seen some seasonal improvement, but supply has tightened up a little bit so.

Speaker Change #164: You know where our expectation is that that going forward, we will continue to be able to manage our portfolio and the mix that we have there too.

Two it you know maximize the value for for Olin, that's that's our goal but.

Kenneth Todd Lane: You know, it's very hard to predict where some of the demand is going at this point in time. You know, we were expecting to see more significant demand recovery than what we are seeing in the second half of the year. But we'll still look in terms of the portfolio that we have around maximizing the value and the mix of that portfolio.

Speaker Change #164: You know, it's very hard to it's very hard to predict where.

Speaker Change #164: Some of the demand is going at this point in time.

Speaker Change #164: If you recall first quarter earnings call, we were expecting to see.

Speaker Change #164: More significant demand recovery than what we are seeing in the second half of the year, but we.

We'll still look in terms of the portfolio that we have around maximizing.

Speaker Change #164: The value and the mix of that portfolio.

Kenneth Todd Lane: Thank you. I understood, and you know coming back to the comments on indices and so forth, so obviously, you guys do not work off of Indicy. So it's more difficult for us to kind of figure out what's going on within the internal Olin system.

Speaker Change #165: Hi, Thank you I understood and you know coming back to the to the comments on the indices and so forth. So obviously you guys do not work off of.

Speaker Change #166: Indices, so it's more difficult for us to kind of figure out what's going on with internal Olin system. So I was just curious I mean, yeah.

Kenneth Todd Lane: So I was just curious, I mean, You know, in terms of what might be what might be, 15% sequential is is is a pretty impressive hefty lift. So I was just curious, you know, was it chlorine, was it EDC, was it HCL, was it, you know, aromatics, you know, any any sort of guided or proxies, what have you, any any sort of guided therapy would be helpful, just so we understand from the outside, what's really clicking in terms of Olin's pricing mechanisms.

Speaker Change #167: In terms of what was what might've I mean, 15% sequentially is a is a pretty impressive lift.

Speaker Change #168: So I was just curious you know with Korean was at EDC was at Hcl with it you know aromatics, you know any any sort of guidance or proxies. What have you any any sort of guided therapy be helpful. Just so we understand from the outside what's really clicking in terms of olin's pricing mechanisms.

Kenneth Todd Lane: Yeah, no, I get that, Frank. And listen, it's probably the easiest way to put that again, it will be a mix of that portfolio because we are constantly looking at, you know, what are the values of each of the products. And where are we going to place the molecules that we have? So it's, It would be very difficult for me to give you some kind of a modeling basis that would be consistent quarter to quarter because it is a very dynamic model that we're going to run, and we'll continue to do that to be as agile as we can to maximize that value. So it's not something that I can point to that you would then, you know, build into your models consistently and have it be correct.

Speaker Change #168: Yeah, no I get that Frank and listen, it's probably the easiest way to put that again as it will be mix of that portfolio. Because we are constantly looking at.

Speaker Change #168: What are the values of each of the products and where are we going to place the molecules that we have so it's.

Speaker Change #168: It would be very difficult for me to give you some kind of a modeling basis that would be consistent quarter to quarter because it is a very dynamic.

Speaker Change #168: Model that we're going to run and it will continue to do that to be as agile as we can to maximize that value. So it is not something that I can point to that you would be able to then build.

Speaker Change #168: Build into your models consistently and have it be be correct.

Kenneth Todd Lane: Fair enough, fair enough. I did make note that bleach pricing was lower in the second quarter. And I would have thought, you know, from a demand standpoint, it picks up two Q versus one Q. What are the dynamics going on in the bleach market? Yeah, listen. What happened with bleach, there's definitely a mix element with that. And during the quarter, the bleach market was very interesting, because the quarter started off cold and rainy, and the hand was fairly low. And then, and then it really got very hot and dry in the second half of the quarter.

Speaker Change #169: Fair Fair enough fair enough.

Speaker Change #170: I did make note that bleach was the bleach pricing.

Was lower in the second quarter and I would've thought you know from a from a demand standpoint, you know with it picks up <unk> versus <unk> what what.

Speaker Change #171: What are the dynamics going on in the bleach market.

Kenneth Todd Lane: So there was, there was a mixed effect in the quarter. And, you know, again, very odd in terms of just the weather pattern during the second quarter. Okay, gotcha. Thanks so much. And the final question comes from Vincent Andrews with Morgan Stanley. Please go ahead. Just two quick ones for me.

Speaker Change #172: Yeah listen what what happened with bleach, there's definitely a mix element with that.

Speaker Change #173: And during the quarter the bleach market was very interesting because the quarter started off cold and rainy and depend was fairly low.

Speaker Change #173: And then and then it really got very hot and dry in the second half of the quarter. So there was there was a mix effect in the quarter end.

Speaker Change #172: You know again very odd in terms of just the the weather pattern during the second quarter.

Speaker Change #174: Okay got you. Thanks, Thanks, so much sure.

Vincent Stephen Andrews: The reduction in CapEx this year, what is it that you're not doing? And will that, should we put that spend into next year? And then secondly, was there an SG&A or incentive comp reduction that was done with the reduction in guidance that we should think about coming back next year in a more normal year? Hi Vince, thanks for the question. So listen, the things that will not be done in terms of CAFEC. Some of that will come back next year, but that doesn't mean that we're going to see an increase next year.

And our final question comes from Vincent Andrews with Morgan Stanley. Please go ahead.

Vincent Stephen Andrews: He me in just two quick ones for me the reduction in Capex. This year, what is it that you're not doing well that are should we put that that spend into next year and then secondly was there an SG&A or incentive comp production that was that was done with the reduction in guidance that we should think about coming back next year in a more normal.

Speaker Change #174: Here.

Speaker Change #176: Hi, guys. Thanks for the question. So, let's say the things that that will we will not be done in terms of capex.

Speaker Change #177: Some of that will come back next year, but that doesn't mean that we're going to see an increase next year on it and it will we'll continue to.

Vincent Stephen Andrews: We'll continue to look for ways to defer other things, but we're going to prioritize. Operating our assets safely and maintaining those in good condition. So we're not deferring things that put any of the assets at risk. These are things that are easily deferred, and don't do that.

Speaker Change #177: So look for ways to defer other things, but we're going to prioritize.

Speaker Change #177: Operating our assets safely and maintaining those and in good condition. So we're not deferring things that.

Speaker Change #177: Put any of the assets of risks. These are these are things that are easily deferred and.

Speaker Change #178: Adult and don't do that.

Kenneth Todd Lane: Now, in terms of SG&A, I don't know, Todd, if you want to add anything on that. Yeah, you know, Vincent, thanks for the question. The big driver right now in SG&A is really, you know, lower stock-based compensation, and that's what really has driven the year-over-year decrease, not only in the quarter but, you know, so far year-to-date.

Speaker Change #179: Terms of the SG&A outside you want to add anything on that yet.

Speaker Change #181: So thanks for the question.

Speaker Change #180: The Big driver right now in SG&A is really you know lower stock based compensation.

Speaker Change #180: And that's what really has driven the year over year decrease.

Speaker Change #180: Not only in the quarter, but you know so far year to date.

Todd A. Slater: Thanks, guys. Thanks. Okay, well, thank you, Dave, for hosting the call. I want to just say thank you to everybody that joined today. We appreciate your interest in Olin and look forward to hopefully seeing all of you on December 12 at the New York Stock Exchange and seeing you in person. Thank you all very much and have a safe weekend. Thank you for attending today's presentation. You may now.

Speaker Change #182: Thanks, guys.

Speaker Change #183: Makes sense.

Speaker Change #183: Okay, well, thank you Dave for hosting the call I wanted to just say thank you everybody that joined US today. We appreciate your interest in Olin and look forward to hopefully seeing all of you on December 12, as the New York Stock Exchange and see you in person.

Speaker Change #184: Thank you all very much and have a safe weekend.

Speaker Change #185: Thank you for attending today's presentation you may now.

Speaker Change #183: Okay.

Speaker Change #183: [noise] [noise].