Q3 2025 Olin Corp Earnings Call

The Olin Corporation's third quarter 2025 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: Good morning and welcome. The Olin Corporation's Q3 2025 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. Following today's brief opening comments, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touch-tone phone, and to withdraw your question, please press star then two. Please note today's 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.

Following today's brief opening comments, there will be an opportunity to ask questions.

Good morning and welcome. The Owen Corporation is third quarter 2025 earnings conference call.

All participants will be in listen-only mode.

To ask a question you May press Star then one on your Touchstone phone and to withdraw your question. Please press Star then two.

Please note today's event is being recorded.

I would now like to turn the conference over to Steve hit It always director of Investor Relations. Please go ahead Steve.

Thank you operator, good morning, everyone. We appreciate you joining us today to review <unk> third quarter 2025 results.

Please keep in mind that today's discussion together with the associated slides as well as the question and answer session that follows.

Steve Keenan: Thank you, Operator. Good morning, everyone. We appreciate you joining us today to review Olin Corporation's Q3 2025 results. Please keep in mind that today's discussion, together with the associated slides as well as the question and answer session that follows, will include statements regarding estimates or expectations of future performance. Please note these are forward-looking statements and that Olin Corporation's 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 Q3 earnings press release. A copy of today's transcript and slides will be available on our website in the Investors section under Past Events. Our earnings press release and related financial data and information are available under Press Releases.

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

Please note. These are forward looking statements and that <unk> 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 third quarter earnings press release.

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

Our earnings press release and related financial data and information are available under press releases.

With me. This morning are Ken Layne, Olin's, President and CEO and Todd Slater Olin's CFO.

I will start with some prepared remarks, then we will look forward to taking your questions.

Steve Keenan: With me this morning are Ken Lane, Olin Corporation's President and CEO, and Todd Slater, Olin Corporation's CFO. We'll start with some prepared remarks, then we'll look forward to taking your questions. In order to give everyone an opportunity, we will limit participants to one question with no follow-ups. I'll now turn the call over to Olin Corporation's President and CEO, Ken Lane.

In order to give everyone an opportunity we will limit participants to one question with no follow ups.

I'll now turn the call over to Olin's, President and CEO, Ken Layne.

Thank you, Steve and thanks to everyone for joining us today.

Let's start with slide three in our third quarter highlights.

During the third quarter, we delivered robust results, reflecting strong performance in our core alkali products and vinyls business.

Ken Lane: Thank you, Steve, and thanks to everyone for joining us today. Let's start with slide three and our third quarter highlights. During the third quarter, we delivered robust results reflecting strong performance in our core alkali products and vinyls business, partially offset by ongoing weakness in our epoxy and Winchester commercial ammunition businesses. We remained disciplined in our value-first commercial approach and operated our assets safely, reliably, and efficiently. Team Olin is more committed than ever to executing our value-first commercial strategy, maximizing cash generation, and delivering on our capital allocation priorities while preserving our strong leverage to a demand recovery. During the third quarter, we continued to generate positive operating cash flow and, with a focused effort by Team Olin, achieved a significant milestone by securing our eligibility for Section 45V Clean Hydrogen Production tax credits, which Todd will discuss shortly.

Partially offset by ongoing weakness in our our policy in Winchester commercial ammunition businesses.

We remain disciplined in our value first commercial approach and operated our assets safely reliably and efficiently.

Jim Alden is more committed than ever to executing our value first commercial strategy.

<unk> cash generation and delivering our capital allocation priorities, while preserving our strong leverage to a demand recovery.

During the third quarter, we continued to generate positive operating cash flow.

And with a focused effort by team Olin achieved a significant milestone by securing our eligibility for section 45 clean hydrogen production tax credits, which Todd will discuss shortly.

Now, let's turn to slide four and review, our Chlor alkali products and vinyls results.

Third quarter ECE values remained stable as the global caustic soda demand.

Ken Lane: Now let's turn to slide four and review our core alkali products and vinyls results. Third quarter ECU values remained stable, as did global caustic soda demand. The main end markets for caustic soda have held up well. Some weakness in pulp and paper has been largely offset by good demand in other markets such as alumina and water treatment. As expected, caustic soda remains the stronger side of the ECU. Adding to the good results for CAPV was improved operating performance and lower costs. We are beginning to realize the benefits of our optimized core strategy. During the quarter, we announced the dissolution of our Blue Water Alliance joint venture with Mitsui at year-end. Mitsui has been a long-term partner for Olin, and that will continue to be the case.

The main end markets for caustic soda have held up well.

Some weakness in pulp and paper has been largely offset a good demand in other markets such as alumina and water treatment.

As expected caustic soda remains the stronger side of the ECB.

Adding to the good results for CATV was improved operating performance and lower costs. We are beginning to realize the benefits of our optimize the core strategy.

During the quarter, we announced the dissolution of our Blue water Alliance joint venture with Mitsui at year end.

Mitsui has been a long term partner for Olin and that will continue to be the case. However.

However, we believe the complexity of a joint venture is not needed for us to strategically manage our participation in the EDC market.

Ken Lane: However, we believe the complexity of a joint venture is not needed for us to strategically manage our participation in the EDC market. Aligned with our value-first commercial strategy, we will reduce our spot EDC exposure and focus on longer-term structural relationships offering higher returns across the cycle. Looking forward to the fourth quarter, we expect seasonally lower demand, and our core alkali team is focused on preserving ECU values. In support of that, we are taking aggressive steps to adjust our operating rates, which will also help us deliver on our target to reduce working capital. Now let's turn to slide five for a look at our epoxy results. Global epoxy resin demand remains weak, and we continue to face significant headwinds in both Europe and the U.S. regions, facing subsidized imported resin from Asian producers. U.S.

Aligned with our value first commercial strategy, we will reduce our spot EDC exposure and focus on longer term structural relationships offering higher returns across the cycle.

Looking forward to the fourth quarter, we expect seasonally lower demand in our Chlor alkali team is focused on preserving ECE values.

In support of that we are taking aggressive steps to adjust our operating rates, which will also help us deliver on our target to reduce working capital now.

Now, let's turn to slide five for a look at our policy results global epoxy resin demand remains weak and we continue to face significant headwinds in both Europe and the U S regions facing subsidized imported resin from Asian producers.

U S demand has been more resilient in Europe, and with the removal of Hoxie residence from annex two tariff exemptions were seeing traction with U S price increases.

Ken Lane: demand has been more than Europe, and with the removal of epoxy resins from Annex II tariff exemptions, we are seeing traction with U.S. price increases. In spite of these market dynamics, Olin Corporation's third quarter formulated solutions volume improved sequentially. Fourth quarter planned maintenance presents a $14 million sequential headwind to epoxy earnings. As we execute this turnaround safely and efficiently, the epoxy team will focus on cash management as they reduce year-end inventories. Olin Corporation's new Stade, Germany supply agreement will provide improved economics for our European production, similar to the benefits from our integrated operations at Freeport. Starting in January 2026, the new agreement is expected to provide an annual adjusted EBITDA benefit of approximately $40 million. With rationalization of capacity in Europe, we are seeing opportunities to grow our participation and will do so at a value that is attractive.

In spite of these market dynamics olin's third quarter formulated solutions volume improved sequentially.

Fourth quarter planned maintenance presents a $14 million sequential headwind to our policy earnings.

As we execute this turnaround safely and efficiently the posse team will focus on cash management as they reduce year end inventories.

Olin's, new starter, Germany supply agreement, we will provide improved economics for our European production similar to the benefits from our integrated operations at Freeport.

Starting in January 2026, the new agreement is expected to provide an annual adjusted EBITDA benefit of approximately $40 million.

With the rationalization of capacity in Europe, we are seeing opportunities to grow our participation and we will do so at a value that is attractive next we move to slide six for an update on our Winchester business as we discussed last quarter, our commercial ammunition business has been hit by a perfect storm.

Ken Lane: Next, we move to slide six for an update on our Winchester business. As we discussed last quarter, our commercial ammunition business has been hit by a perfect storm: rising costs, elevated channel inventories, lower out-the-door retail sales, and falling market prices. We estimate that high retail inventories have decreased Winchester commercial sales by approximately 5% to 10% so far this year. In the face of weak consumer sales, retail inventories have been slow to correct. As a result of this market environment, commercial margins have dropped dramatically, with half being attributable to lower volume, while the other half is a combination of lower pricing and higher costs. We are seeing some positive pricing trends developing for the fourth quarter. Given the recent run-up in metals and manufacturing costs, commercial margins will not be restored until demand recovers and inventory levels have been right-sized.

Rising costs elevated channel inventories lower out the door retail sales and falling market prices.

We estimate the high retail inventories have decreased Winchester commercial sales by approximately 5% to 10% so far this year.

In the face of weak consumer sales retail inventories have been slow to correct.

As a result of this market environment commercial margins have dropped dramatically with half being attributable to lower volume while the other half is a combination of lower pricing and higher costs.

We are seeing some positive pricing trends developing for the fourth quarter given.

Given the recent run up in metals and manufacturing cost commercial margins will not be restored until demand recovers and inventory levels have been right sized.

In contrast to weak commercial demand Winchester military business continues to show strength.

Domestic military and international military demand continues to grow as NATO countries expand their defense budgets.

Ken Lane: In contrast to weak commercial demand, Winchester's military business continues to show strength. Domestic military and international military demand continues to grow as NATO countries expand their defense budgets. Our next-generation squad weapon ammunition facility project at Lake City is well underway, and we are on course to complete construction in late 2027. In parallel, we are developing and delivering components and equipment to support the Army's accelerated fielding plan. Recognizing that the commercial market is not improving as quickly as we had hoped, we are adjusting our operating model to make-to-order versus make-to-inventory. As a result, we will see a reduction in Winchester working capital that will be sustained until we see demand improve. As part of this change, we will extend our typical holiday plant shutdowns to further reduce supply and reduce inventory. This will shift Winchester closer to a just-in-time manufacturing model.

Our next generation squad weapon ammunition facility project at Lake City is well underway and we are on course to complete construction in late 2027.

In parallel we are developing and delivering components and equipment to support the army's accelerated fielding plan.

Recognizing that the commercial market is not improving as quickly as we had hoped we are adjusting our operating model to make to order versus make to inventory.

As a result, we will see a reduction in Winchester working capital that will be sustained until we see demand improve.

As part of this change we will extend our typical holiday plant shutdowns to further reduced supply and reduce inventory.

This will shift Winchester closer to adjust in time manufacturing model.

I'll now turn the call over to Todd Slater for look at our financial highlights.

Thanks, Ken.

Let's review, our sequential quarterly adjusted EBITDA Bridge.

Ken Lane: I'll now turn the call over to Todd Slater for a look at our financial highlights.

Third quarter 2025, adjusted EBITDA included a $32 million pre tax benefit.

Steve Keenan: Thanks, Ken. Let's review our sequential quarterly adjusted EBITDA bridge. Q3 2025 adjusted EBITDA included a $32 million pre-tax benefit, primarily related to the Clean Hydrogen Production tax credit under Section 45V as part of the Inflation Reduction Act of 2022. Excluding the Section 45V tax credit, our third quarter adjusted EBITDA was $190 million, which was an 8% sequential improvement. Core alkali products and vinyls results improved, driven by lower operating costs and higher ethylene dichloride volumes while preserving ECU values as we navigate through this prolonged trough. Our epoxy business continued to grow its formulated solutions volume as persistent headwinds from subsidized Asian imports impacted both the U.S. and European markets. As expected, epoxy's third quarter results included higher operating costs from unabsorbed fixed manufacturing expenses incurred from planned inventory reductions.

Primarily related to the clean hydrogen production tax credits under section 45, as part of the inflation reduction Act of 2022.

Excluding the section 45 tax credit our third quarter, adjusted EBITDA was $190 million, which was an 8% sequential improvement.

Chlor alkali products and vinyls results improved driven by lower operating cost and higher ethylene dichloride volumes, while preserving <unk> values as we navigate through this prolonged trough.

Our proxy business continued to grow its formulated solutions volume as persistent headwinds from subsidized Asian imports impacted both the United States and European markets.

As expected Epocrates third quarter results included higher operating cost.

And absorb fixed manufacturing expenses incurred from planned inventory reductions winter.

Winchester's third quarter segment results reflected the continued weakness of commercial ammunition volumes and margins, which more than offset improved military and military project earnings.

Steve Keenan: Winchester's third quarter segment results reflected the continued weakness of commercial ammunition volumes and margins, which more than offset improved military and military project earnings. The typical third quarter seasonal growth in commercial demand was muted. Now turning back to the 45V tax credit, we recognize this benefit as a result of our team's dedicated efforts over the last three years. During the third quarter, we received notification from the Department of Energy regarding our provisional carbon dioxide emissions rate, marking a significant milestone for tax credit recognition. The Section 45V tax credit pertains to qualified clean hydrogen produced and either sold or used at certain of our core alkali plants. Looking forward, we expect an annual benefit in adjusted EBITDA of $15 million to $20 million for the years 2026 through 2028, with lower amounts through 2032. Next, let's move to slide eight for a view of our liquidity.

The typical third quarter seasonal growth in commercial demand was muted.

Now turning back to the 45 the tax credit.

We recognize this benefit as a result of our teams dedicated efforts over the last three years.

During the third quarter, we received notification from the department of energy regarding our provisional carbon dioxide emissions rate.

Marking a significant milestone for tax credit recognition.

The section 45 tax credit pertains to qualified clean hydrogen produced.

And either sold or used at certain of our chlor alkali plants.

Looking forward, we expect an annual benefit in adjusted EBITDA.

Up 15% to $20 million for the years 2026 through 2028.

With lower amounts through 2032.

Next let's move to slide eight for a review of our liquidity during the third quarter, we fell short of our cash flow and working capital targets.

<unk> and an increase in net debt for the period. This was primarily due to unforeseen payment delays from the U S government related to Lake City military business.

Steve Keenan: During the third quarter, we fell short of our cash flow and working capital targets, resulting in an increase in net debt for the period. This was primarily due to unforeseen payment delays from the U.S. government related to Lake City military business. These payments were subsequently received in October. For 2025, we continue to expect working capital to be a source of at least $100 million of cash, excluding the timing of tax payments. Consistent with what we previously discussed, by year-end 2025, we expect net debt to be flat with year-end 2024. Finally, we remain committed to our disciplined capital allocation approach, and our priorities are clear. First and foremost, we retain our investment-grade balance sheet. Second, we fund sustaining capital spending to maintain the safe and reliable operation of our assets. Third, we are committed to maintaining our quarterly dividend.

These payments were subsequently received in October.

For 2025, we continue to expect working capital to be a source of at least $100 million of cash excluding the timing of tax payments.

Consistent with what we previously discussed by year end 2025, we expect net debt to be flat with year end 2024.

Finally, we remain committed to our disciplined capital allocation approach and our priorities are clear.

First and foremost we retain our investment grade balance sheet.

Second we fund sustaining capital spending to maintain the safe and reliable operation of our assets and third we are committed to maintaining our quarterly dividend.

And then for.

Any available free cash flow is returned to shareholders through either highly accretive growth opportunities or share buybacks. Our teams continued to focus on cash generation, maintaining cost discipline and supporting our beyond 250 cost savings initiative our <unk>.

Steve Keenan: Fourth, any available free cash flow is returned to shareholders through either highly accretive growth opportunities or share buybacks. Our teams continue to focus on cash generation, maintaining cost discipline, and supporting our Beyond 250 cost savings initiative. Our strong financial foundation enables Olin Corporation to continue executing our value-first commercial approach while adhering to our capital allocation priorities and prudent capital structure with a strong balance sheet and cash flow. Ken, I'll now hand the call back to you.

Strong financial Foundation enables OLED to continue executing our value first commercial approach, while adhering to our capital allocation priorities and prudent capital structure with a strong balance sheet and cash flow.

Ken I'll now hand, the call back to you.

Thanks, Todd, let's finish up with slide nine and our outlook for the fourth quarter.

And our CATV business through actions, we're taking we expect to see stable <unk> values in the face of seasonally weaker demand.

Ken Lane: Thanks, Todd. Let's finish up with slide nine and our outlook for the fourth quarter. In our CAPV business, through actions we're taking, we expect to see stable ECU values in the face of seasonally weaker demand. Our epoxy business remains challenged, but we'll begin to see improvement as we enter the new year and benefits accrue from our new Stade supply agreement, some pricing improvements in the U.S. market, and volume gains in Europe following capacity rationalizations. In Winchester, we have a very strong legacy and an industry-leading brand that has supported the U.S. and allied militaries for more than 150 years. We will see resilience in this business and are taking actions to accelerate that in the fourth quarter by adjusting our operating model, driving price increases, and finding new opportunities in our international military business.

Our posse business remains challenged but we'll begin to see improvement as we enter the new year and benefits accrued from our new status supply agreement some pricing improvements in the U S market and volume gains in Europe following capacity rationalizations.

And Winchester, we have a very strong legacy and an industry leading brand that has supported the U S and allied militaries for more than 150 years.

We will see resilience in this business and are taking actions to accelerate that in the fourth quarter by adjusting our operating model driving price increases and finding new opportunities in our international military business.

Current trough has been a test our commercial model and our commitment to operating discipline.

We've stayed the course and develop ways to further help ourselves through improvements in our cost structure that are beginning to show benefits.

Ken Lane: The current trough has been a test of our commercial model and our commitment to operating discipline. We've stayed the course and developed ways to further help ourselves through improvements in our cost structure that are beginning to show benefits. We will provide a more detailed progress report during our fourth quarter earnings call in early 2026. As we shared during our Investor Day, our Beyond 250 initiative is built upon three pillars. First, the structural right-sizing and cleanup of our production assets. Recent rationalizations have left behind inefficiencies or remnant costs. This will be implemented in close coordination with our planned outages in the coming years. Second, we must streamline our operations and maintenance practices to work more efficiently and reduce our dependency on contractors. Third, we will redouble our efforts to be the industry leader in operating efficiencies.

We will provide a more detailed progress report during our fourth quarter earnings call in early 2026, but as we shared during our Investor day, our beyond $2 50 initiative is built upon three pillars.

First the structural right sizing and clean up of our production assets.

Recent rationalizations and left behind inefficiencies or remnant costs.

This will be implemented in close coordination with our planned outages in the coming years.

Second we must streamline our operations and maintenance practices to work more efficiently and reduce our dependency on contractors.

Third we will redouble, our efforts to be the industry leader and operating efficiencies.

These beyond $2 50 pillars are embedded in every employee's incentives. So that we create a culture of ownership and performance driven accountability that is aligned to our values, including being the safest and most reliable operator in the industry.

Ken Lane: These Beyond 250 pillars are embedded in every employee's incentives so that we create a culture of ownership and performance-driven accountability that is aligned to our values, including being the safest and most reliable operator in the industry. Finally, during the fourth quarter, we will realize a $40 million EBITDA penalty to reduce inventories and support our value-first commercial strategy. Including this, we expect our fourth quarter 2025 adjusted EBITDA to be in the range of $110 to $130 million. Operator, we are now ready to take questions.

Finally during the fourth quarter, we will realize a $40 million EBITDA penalty to reduce inventories and support our value first commercial strategy include.

Including this we expect our fourth quarter 2025, adjusted EBITDA to be in the range of $110 million to $130 million operator, we're now ready to take questions.

Thank you.

A question and answer session.

Ask a question you May press Star then one on your Touchtone phone.

The speaker for whom we ask you please pick up your handset before pressing the keys.

Operator: Thank you. We will now begin the question and answer session. To ask a question, you may press star then one on your touch-tone phone. If you're using a speaker phone, we ask you please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. Today's first question comes from Hassan Ahmed with Alembic Global. Please go ahead.

To withdraw your question. Please press Star then two.

At this time, we will pause momentarily to assemble our roster.

And today's first question comes from Hassan Ahmed of Alembic Global. Please go ahead.

Good morning, Todd and Ken.

A question around I know its early days to start thinking about 2026.

But I mean, if I sit there and take a look at what your guidance implies for 2025, excluding sort of the inventory.

[Analyst]: Morning, Todd and Ken. You know, a question around, I know it's early days to start thinking about 2026, but I mean, if I sit there and take a look at what guidance implies for 2025, excluding sort of the inventory penalty, you get to around $734 to $754 million in EBITDA, and that's obviously ex the inventory penalty. I'm just trying to figure out, you know, via self-help, via stuff that's in your control, how much of an increment could we see in 2026? Obviously, you guys have the Dow contract in place. There won't be the turnaround in the epoxy business, and obviously, you guys have the whole cost-cutting side of things as well.

You get to around 734 to seven.

$754 million.

EBITDA and Thats, obviously ex the inventory penalty.

I'm just trying to figure out via self help stuff that's in your control.

How much.

The increment could we see in 2026.

You guys have the Dow contract in place they won't be.

Turnaround in the epoxy business and obviously you guys have the whole cost cutting side of things as well.

Hey, Good morning Hassan This is Ken I'll listen I'll start and then maybe Todd can add a little bit.

As we look at what we're doing going into the fourth quarter, we've talked a lot about things that we have to do to help ourselves just because we're not seeing the market environment.

Steve Keenan: Hey, good morning, Hassan. This is Ken. I'll start and then maybe Todd can add a little bit. As we look at what we're doing going into the fourth quarter, we've talked a lot about things that we have to do to help ourselves just because we're not seeing the market environment improve really in any of our businesses so far. The focus on Beyond 250 and the cost reductions that we're going to realize there is something that the entire organization is really driving to make sure that we can deliver that. We've talked about a $70 to $90 million run rate coming out of this year into next year, and that does include the Dow agreement at Stade, the new agreement that we've got that's going to be seeing that in the P&L in the first quarter. It actually took effect on October 1.

Improved really in any of our businesses so far.

So the focus on beyond $2 50, and the cost reductions that we're going to realize there is something that the entire organization.

Is really driving to make sure that we can deliver that so we've talked about a $70 million to $90 million.

Run rate coming out of this year into next year.

And that does include the DAU agreement and started the new the new agreement that we've got.

We're going to be seeing that in the P&L in the first quarter. It actually took effect on October one.

But with all of that we do see some upside.

Due to $70 million to $90 million in 2026 so.

We're going to be giving you a little bit more color around that in the fourth quarter fourth quarter earnings call at the beginning of the year next year. So stay tuned for that and will you be a little bit more details, but the end of the day, we've really got a buckle down here and do what we can do to help ourselves Todd do you want add anything to that.

Steve Keenan: With all of that, we do see some upside to the $70 to $90 million in 2026. We're going to be giving you a little bit more color around that in the fourth quarter earnings call at the beginning of the year next year. Stay tuned for that, and we'll give you a little bit more details. At the end of the day, we've really got to buckle down here and do what we can do to help ourselves. Todd, do you want to add anything to that?

Hassan as we look into 2027, and you mentioned turnarounds I'll remind everyone on the call that we do have our one in every three year major turnaround on our DCM vinyl chloride monomer unit that will happen generally in the first half of next year. So that's probably a headwind.

Todd Slater: Yeah. Hassan, as we look into 2027, you mentioned turnarounds. I'll remind everyone on the call that we do have our one in every three-year major turnaround on our VCM, Vinyl Chloride Monomer Unit, that will happen generally in the first half of next year. That's probably a headwind relative to what we've seen this year.

<unk>.

<unk> to what we've seen this year.

Thank you. Our next question today comes from Josh Spector with UBS. Please go ahead.

Yes, hi, good morning, guys I apologize if I missed this earlier, but I just wanted to ask on the 45 credit I mean, the $32 million in the quarter.

Operator: Thank you. Our next question today comes from Josh Spector at UBS. Please go ahead.

How much of that is catch up for earlier in the year and really the question is what's the ongoing benefit we should be modeling in for OLED.

[Analyst]: Yeah, hi. Good morning, guys. I apologize if I missed this earlier, but I also wanted to ask on the Section 45V credit, I mean, the $32 million in the quarter, how much of that is catch-up for earlier in the year? The question is, what's the ongoing benefit we should be modeling in for Olin into next year or further out?

Into next year or further out.

Yeah, Hey.

Josh It's Todd Thanks for the question yes.

It is ultimately a catch up the $32 million.

We were finally able to realize that.

Todd Slater: Yeah. Hey, Josh. It's Todd. Thanks for the question. Yes, it is ultimately a catch-up. The $32 million, we were finally able to realize that because of getting our final CO2 emissions information from the Department of Energy. We've been working on this candidly for the last three years. As we go forward, we would look at 2026 through 2028. We think you'll see an adjusted EBITDA benefit in the $15 to $20 million range each of those years.

Because of getting.

Final Cotwo emissions information from the Department of energy, we have been working on this candidly for the last three years as we go forward. We would look at 2000 2006 through 2028, we think Youll see adjusted EBITDA benefit in the $15 million to $20 million range.

Each of those years.

Thank you and our next question today comes from Matt.

With Bank of America. Please go ahead.

Yes, thanks, Jonathan for a month.

Operator: Thank you. Our next question today comes from Matt Dio with Bank of America. Please go ahead.

Can you talk a little bit about the working capital situation in Q3 I think.

A very big increase in some some of the working capital buckets.

[Analyst]: Yes, thank you. This is Salvador Tiano filling in for Matt. Can you talk a little bit about the working capital situation in Q3? I think there was a very big increase in some of the working capital buckets. Why this happened? Given that, is it safe to assume that Q3 operating rates, especially in core alkali, were better than you expected in the initial guidance? Ultimately, what does this mean for your Q4 operating rates versus how you've been running the past few years?

Why this happened then deepen.

Safe to assume about three operating rigs, especially chlor alkali ware.

Bedroom I expect that would be great. Thanks, guys.

Ultimately what does this mean.

For operating rates versus or how would you think of the past few years.

Good morning Sal.

So listen, let's talk a little bit more detail about this inventory reduction we're going to take a $40 million.

Yes, thank you. This is, um, can you talk a little bit about the working capital situation, Q3? I think there was a, a very big increase in some uh, some of the working capital buckets. Um, why this happened then? Given that is it safe to assume that Q3 operating rates, especially in plural Alkali were, um, better than you expected in the initial guidance. And ultimately, what does this mean for your Q4, operating rates versus your, how you've been running the past few years?

Penalty and EBITDA in the fourth quarter, what that's going to do is going to free up about $150 million in cash.

Steve Keenan: Morning, Sal. Listen, let's talk a little bit more detail about this inventory reduction. We're going to take a $40 million penalty in EBITDA in the fourth quarter. What that's going to do is free up about $150 million in cash. That benefit we're going to see in cash is something that really was built up over the full year. We've seen increases in working capital in all of the businesses. Some of it was back at the beginning of the year when we were expecting demand to be stronger, particularly when you think about Winchester. We just didn't see the inventories coming down as fast. Now we're going to have to take some aggressive action to reduce that. In chemicals, it's a combination of timing around turnarounds and needing to build some inventory during the third quarter in order to be ready for turnarounds in the fourth quarter.

Morning Sal.

And.

That that.

That benefit that we're going to see in cash is something that we.

Really was built up over the full year. So we've seen increases in working capital.

So listen you know let's let's talk a little bit more detail about about this inventory reduction, you know, we're going to take a 40 million. Um penalty in ibadan, the fourth quarter, what that's going to do is going to free up about 150 million in cash.

and,

That.

And all of the businesses some of it.

Was it back at the beginning of the year, when we were expecting demand to be stronger, particularly when you think about Winchester.

that benefit that we're going to see in cash is something that

And we just didn't CV, the inventories coming down as fast and now we're going to have to take some aggressive action to reduce that.

really was built up over the the full year, so we've seen increases in working capital

In chemicals, it's a combination of timing around turnarounds and needing to build some inventory.

Uh in in all of the businesses some of it uh was it back at the beginning of the year when we were expecting demand to be stronger? Particularly when you think about Winchester,

During the third quarter in order to be ready for turnarounds in the fourth quarter, So youre going to see that come back out in the fourth quarter.

And we just didn't see the the inventory is coming down as fast and now we're going to have to take some aggressive action to reduce that.

But frankly some of it is just us continuing to show discipline in supporting our commercial one.

Steve Keenan: You're going to see that come back out in the fourth quarter. Frankly, some of it is just us continuing to show discipline and supporting our value-first commercial strategy and being sure that we continue to be disciplined with that. Todd, I don't know if there's anything you want to add related to that.

<unk> commercial strategy and being sure that we continue to be disciplined with that.

So Todd I don't know if theres anything you want to add.

The only comment I would remind everyone.

Thanks for the question itself.

We did have a penalty on working capital at the end of September related to delayed payments from the U S government for Lake City military business. Ultimately those have been received here in October but that was candidly.

And chemicals, It's a combination of timing around turnarounds, and needing to build some, some inventory. Uh, during the third quarter, in order to be ready for turnarounds in the fourth quarter. So you're going to see that come back out in the fourth quarter. Um but frankly, some of it is just us continuing to show discipline and supporting our commercial. First, our value first commercial strategy, and being sure that we continue to to be disciplined with that.

Todd Slater: Yeah. The only comment I would remind everyone, and thanks for the question, Sal, was that we did have a penalty on working capital at the end of September related to delayed payments from the U.S. government for our Lake City military business. Ultimately, those have been received here in October. That was candidly the biggest driver by far on why working capital moved up in the third quarter compared to the second.

<unk> driver by far.

Working capital moved up.

In the third quarter compared to the second.

Thank you and our next question today comes from Frank Mitsch Fermium Research. Please go ahead.

Up. Um, in the third quarter, compared to the second

Hey, good morning, I'd like to flesh out this $40 million negative impact on NIM.

Operator: Thank you. Our next question today comes from Frank Mitsch with Fermium Research. Please go ahead.

The inventories in the fourth quarter it looks like it's a combination of Chlor alkali and Winchester.

[Analyst]: Hey, good morning. I'd like to flesh out this $40 million negative impact due to inventories in the fourth quarter. It looks like it's a combination of core alkali and Winchester. I'm wondering if you could size it to, is this more of an Olin issue or do you feel like the industry overall is holding much too much inventory, so we should expect lower operating rates from the industry overall? How confident are you that the $40 million is the right number, and then as we start Q1 2026, you can go back to operating as you normally would?

Thank you. And our next question comes from Frank, Mitch, with Fermion Research. Please go ahead.

I was wondering if you could size. It too is this does this is more of an open issue or do you feel like the industry overall.

Is holding much too much too much inventory, so we should expect lower operating rates.

Hey, good morning I'd. I'd like to flesh out this 40 million negative, uh, impact on in, uh, due to inventories in the fourth quarter. Uh, you know, it looks like it's a combination of Clark lie and uh, and Winchester.

From the industry overall.

And how confident are you that that $40 million is the right number and then as we start <unk> to 'twenty six.

Can you can go back to operating as you normally would.

Yeah.

Good morning, Frank Thank you for the question.

So, let's just just to add a little bit more color, maybe two to that EBITDA penalty that we're facing.

I was wondering if you could size it to, uh, is this, uh, is this more of an Olden issue or do you feel like, uh, the industry overall, uh, is holding much to, uh, much too much inventory. So, we should expect the lower operating rates, uh, from uh, the industry, uh, overall. Uh, and um, and how confident are you that, uh, that the 40 million is the right number. And then, as we start 1 Q 226, uh, it can you can go back to operating as you normally would

Ken Lane: Good morning, Frank. Thank you for the question. Just to add a little bit more color maybe to that EBITDA penalty that we're facing, like I said, a lot of the working capital build was related to Winchester. That's a totally different animal than when you talk about the chemicals value chains and whether the industry there has got too much inventory in the chain. Let me talk about Winchester first. We've been talking about high inventories in the retail chain since this time last year. Those levels of inventory came down at the beginning of the year, but they have not continued to fall. They've sort of leveled off at a relatively high level. If you couple that with the fact that there was sort of a wave of imports that came in prior to the tariffs of ammunition, that also added to that issue.

Like I said a lot of the working capital build was related to Winchester.

Good morning, Frank. Thank you for the question.

so listen, just, uh,

And so that's a totally different animal than when you talk about the chemicals value chains and.

Caller, maybe to to that Eva dot penalty, that we're facing.

Either the industry there has got.

Too much inventory in the chain. So let me let me talk about Winchester first we've been talking about high inventories in the retail chain since this time last year.

Those levels of inventory came down the beginning of the year.

Um, like I said, a lot of the, um, working capital build was related to, uh, Winchester. And so, that's a totally different animal than when you talk about the chemicals value chains. And and you know whether the industry there has got um you know, too much inventory in the chain, so let me let me talk about Winchester first. We've been talking

But they have not continued to fall they sort of leveled off at a relatively high level and if you couple that with the fact that there was some.

Talking about high inventories in in the retail chain, since this time last year.

Uh, those levels of inventory came down at the beginning of the year.

We have a wave of imports that came in prior to the tariffs.

Ammunition.

That also added to that to that issue. So.

But they have not continued to fall. They've sort of leveled off at a at a relatively high level.

Winchester is a bit unique there is a lot of inventory in the chain there that needs to come out and what we're going to do is we're not going to continue to use our balance sheet to carry that inventory if that inventory or somewhere else in the chain.

and if you couple that with the fact that there was sort of a wave of imports that came in prior to the tariffs of of ammunition,

Ken Lane: Winchester is a bit unique. There is a lot of inventory in the chain there that needs to come out. What we're going to do is we're not going to continue to use our balance sheet to carry that inventory if that inventory is somewhere else in the chain. That's just what we have to do to be disciplined and support our balance sheet. Now, for chemicals, it's really hard to have visibility. What I would say right now is I'm not concerned about too much inventory in the chain and the chemicals value chains. That's not something that we've seen. There is always a risk when you get into the fourth quarter because that's seasonally the weakest quarter. There's always a chance that people do start to pull inventory. Even if they have low inventories, they can take the inventories really very low very quickly.

That also added to that to that issue. So,

What we have to do to be disciplined in and support our balance sheet now.

Now for chemicals, it's really hard to have visibility what I would say right now is.

You know, Winchester is a bit unique. There is a lot of inventory in the chain there, that that needs to come out. And what we're going to do is we're not going to continue to use our balance sheet to carry that inventory. If that inventory of somewhere else in the chain,

I'm not concerned about too much inventory in the chain and the chemicals value chain.

That's just what we have to do to be disciplined and and support our balance sheet.

That's not something that we've seen.

Now for chemicals it's really hard to have visibility what I would say right now is

But what I would say is there's always a risk when you get into the fourth quarter, because that's seasonally the weakest quarter Theres always a chance if people do start to pull inventory even if they have.

I'm not concerned about too much inventory in the chain in the chemicals, value chains.

uh, that's not something that we've

Low inventories I can take the inventory is really very low very quickly and so we want to be prepared for anything here, we want to make sure that we rightsize our inventory levels really reduce them to the minimum level at the same time, we are going to reduce operating rates and show the discipline around being able to.

Ken Lane: We want to be prepared for anything here. We want to make sure that we right-size our inventory levels, really reduce them to the minimum level. At the same time, we are going to reduce operating rates and show the discipline around being able to move the volume at the value that we like. That strategy is not changing.

seen. Uh, but what I would say is there's always a risk when you get into the fourth quarter because that's seasonally the the weakest quarter, there's always a chance that people do start to pull inventory. Even if they have low inventories, they can take the inventories really very low, very quickly.

To move the volume of the value that we like and that strategy is not is not changing.

And so we want to be prepared for anything here. We, we want to make sure that we right-size our inventory levels, really reduce them to the minimum level. At the same time, we are going to reduce operating rates.

Thank you and our next question today comes from Alexia <unk> with Keybanc. Please go ahead.

And, and show the discipline around being able to, to move the volume. And the value that we like,

Thanks, Good morning, everyone.

And and that strategy is not is not changing.

Operator: Thank you. Our next question today comes from Aleksey Yefremov with KeyBanc Capital Markets. Please go ahead.

You mentioned the opportunity to sign a B C.

By agreements do you have.

Thing.

[Analyst]: Thanks, Sal. Good morning, everyone. You mentioned the opportunity to sign EDC supply agreements. Do you have anything in place today, or is your entire EDC volume on a spot basis? Are there any agreements that are fairly close to getting over the finish line soon in this area?

Thank you. And our next question. Today comes from Alexi affirmative with Key Bank. Please go ahead.

In place today or is your entire agency volume on a spot basis and Oh.

Thanks. Uh, good morning, everyone. Um, you mentioned the opportunity to sign ABC.

Also are there any agreements that are fairly close to getting over the finish line soon.

In this area.

Good morning, Alexia, So listen we obviously we are working on.

More structural.

Firm agreements term contracts for EDC.

Uh, supply agreements. Uh, do you have anything, um, in place today, or is your entire agency volume on a SPA basis? And, uh, also, um, are there any agreements that are fairly close to getting over the finish line soon, uh, in this area?

Ken Lane: Good morning, Aleksey. Listen, we obviously are working on more structural term agreements, term contracts for EDC. If you look at the EDC values today, one of the biggest variances we've got versus prior year is the EDC price that we see in the market today. Now, fortunately, we're the cost leader in producing EDC, so we're able to weather that better than others. When we think about this across the cycle, it does make more sense for us to have more contracted positions than what we have today. We do have contracted business today. A lot of that runs through our joint venture with Blue Water Alliance. We announced that we're going to be unwinding that between now and the end of the year.

You look at EDC values today, one of the biggest variances we've got versus prior year is the EDC price that we see in the market today now Fortunately we are the cost leader in producing EDC, So we're able to weather that better than others.

Good morning Alexi. Um, so listen, we uh, obviously we are working on

Uh, more structural term agreements term contracts for EBC.

But when we think about this across the cycle. It does make more sense for us to have more contracted positions in what we have today, we do have contracted business today.

A lot of that runs through our joint venture with BW way, we announced that we're going to be on unwinding that between now and the end of the year.

If you look at BBC values today, 1 of the biggest variances we've got versus prior year is the EDC price that we see in the market today. Now, fortunately, we're the cost leader in producing EDC, so we're able to weather that better than others. Um, but when we think about this across the cycle, it does make more sense for us to have more contract

Mitsui has been a great partner, but the the complexity of running that business through a joint venture versus the value that we were realizing in the option for us to control.

Attracted positions in what we have today, we do have contracted business today.

Ken Lane: Mitsui has been a great partner, but the complexity of running that business through a joint venture versus the value that we were realizing and the option for us to control that channel to market exclusively to ourselves, the trade-offs just were not in our favor. That was really what drove our decision to unwind that joint venture so that we can go out and make these structural deals. We'll still be working with Mitsui as a counterparty. That's not going to change. We are looking at bigger opportunities to be able to place volume, and we should be able to have more to be able to say about that in the coming weeks. Yes, we are shifting the portfolio, but we will still have an exposure to the spot market. It's not going to go to zero, but it will be less than what we've had in the past.

That channel to market exclusively to ourselves the tradeoff just were not in our favor. So that was really what drove our decision to unwind that joint venture. So that we can go out and make these structural deals we.

We will still be working with Mitsui as a counterparty.

That's not going to change, but we are looking at bigger opportunities to be able to place volume in and we should be able to have more to be able to say about that in the coming weeks, but.

Decision to unwind that joint venture so that we can go out and make these structural deals.

Yes, we are shifting the portfolio, but we will still have an exposure to the spot market is not going to go to zero.

But it will be less than what we've had in the past.

Thank you and our next question today comes from John Roberts.

Please go ahead.

Alright. Thank you could you give us an update on the Radnor propellants contract bidding process.

We'll still be working with mitsui as a counterparty, uh, that's not going to change, but we are looking at bigger opportunities to be able to place volume. And, and we should be able to have more to be able to say about that in the coming weeks. But, uh, yes, we are shifting the portfolio, but we will still have an exposure to the spot Market. It's not going to go to zero, uh, but it will be less than what we've had in the past.

Operator: Thank you. Our next question today comes from John Roberts at Mizuho. Please go ahead.

Also maybe an update on your head.

Thank you. And our next question. Today comes from John Roberts at mizuho. Please go ahead.

Todd Slater: Thank you. Could you give us an update on the Radnor Propellants contract bidding process, and also maybe an update on your hedging in metals and what you're expecting there?

In metals, and what Youre expecting there.

Good morning, John Yeah, I'll give you a quick update there.

You know like anything with the government, it's a slow process and with the government government being shut down its basic.

Thank you. Could you give us an update on the radar propellants, uh, contract bidding process, and also maybe an update on your uh, hedging and metals and what you're expecting their

Ken Lane: Good morning, John. I'll give you a quick update there. You know, like anything with the government, it's a slow process. With the government being shut down, it's basically not a running process right now. It's a little bit frustrating when you're dealing with the government here, especially when they're not paying you sometimes. We're going to continue to look at that as an opportunity. All it is is a working capital investment for us. It doesn't require any real capital to speak of. They've issued a preliminary RFP. They've received comments from industry, and now they're going back and revising that. There will be another draft RFP that's coming out in the not-too-distant future. Let's see what happens with the government shutdown. There will be another iteration.

Basically not a running process right now.

Good morning John. Yeah, I'll give you a quick update there. Um,

It's a little bit frustrating when youre dealing with the government here.

Especially when they are paying us sometimes but.

We're going to continue to look at that as a as an opportunity. All it is is a working capital investment for us it doesn't require any any real capital to speak of.

You know, like anything with the government, it's a slow process and with the government government being shut down, it's, uh, it's it's basically not a running process right now. It's, uh, uh. It's a, it's a little bit frustrating when, when you're dealing with the government here, um, especially when they're not paying you sometimes, but

You know.

They issued a preliminary RFP.

They received comments from industry and now they're going back and they are revising that so there'll be another draft RFP, that's coming out in the not too distant future, let's see what happens with the government shutdown and then there'll be another iteration. So I don't expect theres going to be anything decided regarding this until.

We're going to continue to look at that as a as an opportunity. You know all it is is a working capital investment for us. It doesn't require any any real Capital to speak of. Um they've issued a preliminary RFP

Late next year at the earliest which means they probably won't be any transition to a to a new operator, assuming that's the choice that they make until sometime in 2027 and I can't predict when that's going to be but.

Ken Lane: I don't expect there's going to be anything decided regarding this until late next year at the earliest, which means there probably won't be any transition to a new operator, assuming that's the choice that they make, until sometime in 2027. I can't predict when that's going to be. It certainly is an opportunity that we're still very interested in. As I said in my prepared comments, Winchester has been a strong supporter of the U.S. and NATO allied militaries over many years. We believe that with our chemical-based core businesses, along with the advantages that we have with our Winchester brand, we're the best person to be able to operate that. We're going to do it for a value that makes sense for Olin and Olin shareholders. I'll let Todd talk about the metals hedging.

It certainly is an opportunity that we're still very interested in.

As I said in my prepared comments.

Winchester has been a strong supporter of the U S and NATO allies militaries over many years, we believe that with our chemical based core businesses along with the.

They've received comments from industry and now they're going back and they're revising that. So there'll be another draft RFP that's coming out in the not too distant future. Let's see what happens with the government shutdown and then they'll be another iteration. So, you know, I don't expect there's going to be anything decided regarding this until late next year at the earliest, which means there probably won't be any transition to a to a new operator. Assuming that's the choice that they make until sometime in 2027 and and I can't predict when that's going to be. But

It certainly is an opportunity that we're still very interested in.

as I said, in my prepared comments,

Advantages that we have with our Winchester brand.

We are the best person to be able to operate that but we're going to do it for a value that makes sense for OLED and OLED shareholders now I'll, let Todd talk about the metals hedging.

You know, Winchester has been a strong supporter of the US and NATO Ally militaries. Over many years, we believe that with our chemical based core businesses along with the uh uh advantages that we have with our Winchester brand.

Thank you Ken.

As everyone I believe on the call knows.

Our hedger.

And we would expect metal cost to be a headwind.

Todd Slater: Yeah. Thanks, Ken. As everyone, I believe, on the call knows, we are a hedger, and we would expect metal costs to be a headwind in 2026 relative to 2025. We do operate at at least a rolling four-quarter hedging program. I happened to look this morning at copper, and it was, I don't know, $5.10. As you know, those prices eventually seed into our system slowly but do. Copper has been up. As we think about raw material costs, raw material costs will be a headwind, have been a headwind, and we expect that headwind to continue.

We're the best person to be able to operate that, but we're going to do it for a value. That makes sense for for all in and old and shareholders. Now, I'll let Todd talk about the, uh, the metals hedging.

Well in 2026 relative to 2025, we do operate at least a rolling four quarter hedging program.

And I happened to look this morning, Amit Kapur and it was I don't know.

<unk> hundred 10.

So as you know those prices eventually seed into our system slowly.

But do.

And copper has been up so as we think about raw material costs raw material costs.

We will be a headwind have been a headwind and we expect that headwind to continue.

Thank you and our next question comes from Patrick Cunningham at Citi. Please go ahead.

Hi, good morning.

Maybe just on a park C. Obviously still continues to be challenged by some price competitive Asian imports, maybe youre getting a little protection here that gives you a platform for price, but how should we think about earnings levels into next year you have some nice savings back from the start are you have you know maybe some incremental volume opportunities.

Operator: Thank you. Our next question today comes from Patrick Cunningham at Citi. Please go ahead.

[Analyst]: Hi, good morning. Maybe just on epoxy, obviously, it still continues to be challenged by some price competitive Asian imports. Maybe you're getting a little protection here that gives you a platform for price. How should we think about earnings levels into next year? You have some nice savings actions at Stade. You have maybe some incremental volume opportunities with competitors leaving the space in Europe. I'm just, how are you thinking about the framework for next year on epoxy?

We're competitors, leaving the space in Europe. So I'm just how are you thinking about the framework for next year on a policy.

Good morning, Patrick Thank you for your question.

<unk>.

I hate to get too too far out over my skis here, but I am probably more optimistic on a policy than I have been in the last year and a half.

Ken Lane: Good morning, Patrick. Thank you for your question. I hate to get too far out over my skis here, but I'm probably more optimistic on epoxy than I have been in the last year and a half. That's not because the market is improving. It's really because of the actions that we've taken as Olin over the last few years to be able to right-size our cost base, right-size our capacities. We do have a very good integrated business that has allowed us to survive when others can't. That's what happens in the trough. You start to see people that are not as competitive close capacity until demand begins to recover. We're positioned very well as that happens.

But that's not because the market is improving it's really because of the actions that we've taken at.

As old and over the last few years to be able to right size, our cost base right size our capacities.

I hate to get too too far out over my skis here, but I'm probably more optimistic on epoxy than I have been uh, in the last year and a half.

We do have a very good integrated business that has allowed us to survive when others can't.

And so that's what happens in the trough you start to see people that are that are not as competitive close capacity.

But that's not because the market is improving. It's really because of the actions that we've taken as old and over the last few years to be able to, right size our cost base, right size our capacities.

Until demand begins to recover and we're positioned very well as that happens, but in the meantime, with all of the cost reductions that we're going to realize.

People that are that are not as competitive close capacity.

Both in Europe, and frankly in the U S along with a little bit of a tailwind around tariffs I do expect that going into next year.

Ken Lane: In the meantime, with all the cost reductions that we're going to realize, both in Europe and frankly in the U.S., along with a little bit of a tailwind around tariffs, I do expect that going into next year, we're going to see a pretty significant improvement from a very low level for epoxy. I think that's a business where, yeah, I'm going to be very eager to see that improvement next year, which should be quite positive versus this year. As a percentage, we'll probably be better than any other business we've got.

Going to see a pretty significant improvement from a very low level.

Um, until demand begins to recover, and we're positioned very well as that happens. But in the meantime, with all the cost reductions that we're going to realize.

If hoxie, but I think that's a business, where yes, I'm going to I'm going to be very eager to see that improvement next year, which should be quite positive.

Versus this year and as a percentage.

We'll probably be better than any other business we've got.

Thank you and our next question today comes from David Begleiter with Deutsche Bank. Please go ahead.

Good morning, Ken on Slide 14. Your E. C. You profit index was down in Q3 versus Q2.

Um, both in Europe and frankly in the US along with a little bit of a Tailwind around tariffs, I do expect that going into next year. Uh, we're going to see, you know, a pretty significant improvement from a very low level, um, for epoxy. But I think that's a business where? Yeah, I'm going to I'm going to be uh very eager to see that Improvement next year, which should be quite positive, uh, versus this year. And as a percentage, uh, we'll probably be better than any other business we've got

Operator: Thank you. Our next question today comes from David Begleiter with Deutsche Bank. Please go ahead.

But your Chlor alkali EBITDA was actually up in Q3 versus Q2, even after the one time benefit so why was that.

[Analyst]: Thank you. Good morning. Ken, on slide 14, your ECU profit index was down in Q3 versus Q2, but your core alkali EBITDA was actually up in Q3 versus Q2, even after the one-time benefit. Why was that?

Thank you. And our next question. Today comes from David begler with Deutsche Bank. Please go ahead.

Good morning, Dave how are you glad to hear from you so listen that that that index. Obviously has got a lot of moving parts to it a big a big issue with that is mix and we've seen that in other quarters and what I'll tell you is its all just related to mix in the portfolio.

Thank you. Good morning cannot slide. 14. Your ECU profit index was, uh, down in Q3 versus Q2.

But your clock light, even though I was actually up in the Q3 versus Q2 even after the uh 1 time benefit. So why why was that?

Ken Lane: Good morning, Dave. How are you? Glad to hear from you. That index obviously has got a lot of moving parts to it. A big issue with that is MIX, and we've seen that in other quarters. What I'll tell you is it's all just related to MIX in the portfolio. You've seen it sort of going up and down quarter to quarter, but it is not something that I expect to see any further deterioration. Like I said, we expect ECU values to continue to be stable into Q4. Nothing that I see is changing that. Depending on which customers are operating plants or taking volume, that number is going to move around. It is not something right now that is indicating any trend one way or the other. Stability is the way that I would be thinking about that.

So.

So you've seen it sort of going up and down quarter to quarter.

But it is not something that I expect to see any any further deterioration like I said, we expect EC values continue to be stable into Q4, nothing that I see us changing that.

Uh, good morning. Dave, how are you, uh, glad to hear from you. So listen that that um that index obviously has got a lot of moving parts to it. A big, a big issue with that is is mix and we've seen that in other quarters. And what I'll tell you is, it's all just related to mix, uh, in the portfolio. Um,

But depending on which customers are operating plants or taking volume.

That number is going to move around but it is not something right now that is indicating any trend one way or the other stability is the way that I would be thinking about that.

Um, so you’ve seen it sort of going up and down quarter to quarter. Uh, but it is not something that I expect to see any further deterioration. Like I said, we expect ECU values to continue to be stable in Q4; nothing that I see is changing that. Um, you know, but depending on...

Yeah.

Thank you and our next question comes from Peter <unk> with Trust Securities. Please go ahead.

Hey, good morning, Thanks for taking the question.

Which customers are operating plants or taking volume that that number is going to move around, but it is not something right now. That is indicating any Trend uh, 1 way or the other stability is the way that I would be thinking about that.

Operator: Thank you. Our next question today comes from Pete Osterland with Truist Securities. Please go ahead.

Within Winchester could you talk a bit more about your plans to shift production towards the international defense markets is this intended to be a permanent change in strategy just given the stronger growth opportunities that youre seeing within defense and where do you see the revenue mix between commercial and defense going for this business over the medium term.

Thank you. Our next question comes from Pete Osterland with Social Security. Please go ahead.

[Analyst]: Good morning. Thanks for taking the question. Within Winchester, could you talk a bit more about your plans to shift production towards the international defense markets? Is this intended to be a permanent change in strategy, just given the stronger growth opportunities that you're seeing within defense? Where do you see the revenue mix between commercial and defense going for this business over the medium term?

Good morning, Pete Thank you for the question.

Yes. This is if you go back to our Investor Day, we were very intentional talking about growing our defense business and we have seen.

Hey, good morning. Thanks for taking the question. Um, within Winchester. Uh, could you talk a bit more about your plans to shift production towards the international defense markets? Uh, is this intended to be a permanent change in strategy? Just given the stronger growth opportunities that you're seeing within Defence. And um you know, where do you see the revenue mix between commercial and defense going for this business over the medium term?

Ken Lane: Good morning, Pete. Thank you for the question. Yes, this is, if you go back to our Investor Day, you know, we were very intentional talking about growing our defense business. We have seen very positive developments in that market, especially around the NATO countries increasing the amount of spending that they're going to be or the investments that they're going to make in the coming years for their own defense. There's an opportunity for us to participate in that. Now, there's two things. There's a short term where we're getting a lot of inbound, and the backlog for international military is growing quite substantially. We're actively working with our partners to be able to secure that demand in the orders for the coming year.

Very positive developments in that market, especially around the NATO countries increasing.

Good morning, Pete. Thank you for the question. Um,

The amount of spending that theyre going to be or the investments that they're going to make in the coming years.

For their own defense, there is an opportunity for us to participate in that now Theres two things. There is a short term where we're getting a lot of inbound in the backlog for international military is growing quite substantially and we are.

We are actively.

Working with our partners.

To to be able to secure that that demand in the orders for the coming year. So we're going to continue to see robust growth in the short term, but we're also thinking more strategically about how do we participate in this.

Yes, this is. If you go back to our investor today, you know, we we were very intentional talking about growing our defense business and and we have seen um, you know, very positive developments in that market, especially around the NATO countries, increasing the uh the amount of of spending that they're going to be or the Investments that they're going to make in the coming years. Uh, for their own defense, There's an opportunity for us to participate in that now there's there's 2 things there's a short term where we're getting a lot of inbound and the backlog for international military is growing quite substantially and and we're we're actively.

Ken Lane: You know, we're going to continue to see robust growth in the short term, but we're also thinking more strategically about how do we participate in this in the longer term. There are ways that we can do that, whether it's through partnerships or long-term supply deals. We're going to be looking at that. We do see that as a strategic opportunity for us. We also talked about earlier in this year that the fact that military was going to become a larger part of our portfolio in terms of revenue, that's also driven largely by the project that we've got running at Lake City. There's a lot of project revenue that's showing up there that's skewing the sales number for Winchester towards military. It's got a relatively low margin because it's a project-based fee that we're basically earning for executing that project.

Working with our partners uh to to be able to secure that uh that demand in the orders.

In the longer term.

And there are ways that we can do that whether it's through partnerships or long term supply deals we're going to be looking at that.

For the coming year. So you know we're going to continue to see robust growth in the short term but we're also thinking more strategically about how do we participate in this.

We do see that as a as a strategic opportunity for us.

We also talked about earlier in this year that the fact that military was going to become a larger part of our portfolio in terms of revenue. That's also driven largely by the projects that we've got running at Lake City. So Theres a lot of project revenue, that's showing up there thats skewing.

In the longer term and there are ways that that we can do that, whether it's through Partnerships or long-term Supply deals, we're going to be looking at that.

Um, we do see that as a as a strategic opportunity for us.

It's skewing the sales number for Winchester towards military.

Got a relatively low margin because it's a project based.

We also talked uh, about earlier in this year that the fact that military was going to become a larger part of our portfolio. In terms of Revenue, that's also driven largely by the project that we've got running at Lake City. So, there's a lot of project Revenue that's showing up there. That's

Fee that we're basically earning for executing that project now having said that I do think that it's going to be a while before we see commercial demand come back I think we're just continuing to see that.

Skewing.

Ken Lane: Now, having said that, I do think that it's going to be a while before we see commercial demand come back. I think we're just continuing to see that consumers and consumer spending is still challenged around discretionary items such as ammunition. We will see this growth in international military. That's going to keep our military portfolio stronger in the portfolio than what we maybe had thought a year ago. Good news is international military margins are attractive. We're really excited about that.

Consumers and consumer spending is still challenged.

Round discretionary items, such as such as ammunition.

But we will see this growth in international military so that that's going to keep our military portfolio stronger in the portfolio than what we maybe had thought a year ago. Good news is international military margins are attractive so were really.

It's skewing the sales number for Winchester towards military. It's got a relatively low margin because it's a project-based fee that we're basically earning for executing that project. Now, having said that, I do think that it's going to be a while before we see commercial demand come back. I think we're just continuing to see that.

Um, consumers and consumer spending are still challenged around discretionary items such as ammunition.

Um, but we will.

see this growth in international military so that that's going to keep

our, our military

Excited about that.

As you think about revenue, you're probably sitting today.

62% military and the remainder commercial.

Todd Slater: As you think about revenue, you're probably sitting today at 62% military and the remainder commercial. That is higher than it has been over the last several years. Candidly, I would expect that to tick up a little bit as we move forward with this shift toward more military sales, both internationally as well as project.

Portfolio than than what we maybe had thought. Uh, a year ago. Good news, is international military. Margins are are attractive. So we're we're really excited about that.

That is higher than it has been over the last several years.

As you think about Revenue, you're probably sitting today.

Candidly I would I would expect that to tick up a little bit as we move forward with the shift toward more military sales both internationally as well as project.

Okay.

Thank you and our next question today comes from Mike Sison with Wells Fargo. Please go ahead.

Hey, guys.

62% military and you know the remainder of commercial you know that is higher than it has been over the last several years. It candidly. I would I would expect that to tick up a little bit as we move forward with this shift toward more military sales. Both internationally as well as project.

When you think about what needs to happen for a recovery in chemicals.

Operator: Thank you. Our next question today comes from Mike Sison with Wells Fargo. Please go ahead.

Are you seeing anything that.

[Analyst]: Hey, guys. When you think about what needs to happen for a recovery in chemicals, are you seeing anything that might give you some confidence that there could be a recovery in 2026? I know you don't talk about operating rates anymore, but how much volume is in the system that could recover and maybe help us understand the earnings power of that volume now versus the past? Thank you.

Mike, giving you some confidence that there could be a recovery in 'twenty six and then I know you don't talk about operating rates, even more but how.

Thank you. And our next question comes from Mike Sisson with Wells Fargo. Please go ahead.

How much volume.

It is in the system that that could recover and maybe help us understand the earnings power of that volume now.

Versus the past thank you.

Hey guys. Um, when you think about what needs to happen for a recovery in chemicals, are you seeing anything that might give you some confidence that there could be a recovery in '26? And then I know you don't talk about operating rates anymore, but how much volume...

Yes, good morning, Mike So listen.

The fact of the matter is it like like I had said earlier, we are going to continue to adjust our operating rates to meet the demand that we see and manage our working.

Is in the system that that could recover and and maybe help us um, understand the earnings power of that volume. Now, um, versus the past, thank you.

Ken Lane: Good morning, Mike. The fact of the matter is that, like I had said earlier, we are going to continue to adjust our operating rates to meet the demand that we see and manage our working capital in the chemical space accordingly. We are not going to carry inventory in this environment other than for things like turnaround. All that I'll tell you is that our operating rates are differentially lower than the rest of the industry. That shouldn't surprise anybody. That's our operating model, and we're going to continue to execute on that. In terms of what it is going to take to see a recovery, you can focus in first on North America, and you can look at housing. Obviously, housing is a big driver for chemicals, especially a lot of the chemistry that chlorine goes into.

Working capital in the chemical space.

Accordingly, we are not going to carry inventory in this environment other than for things like turnaround so.

I'll, let I'll tell you is that our operating rates are differentially lower than the rest of the industry.

Yeah, good morning Mike. So listen the um you know the fact of the matter is it like like I had said earlier, we are going to continue to, to adjust our operating rates to, to meet the demand that we see and manage our, uh, our working capital in the chemical space.

And that Shouldnt surprise anybody that's our operating model and we're going to continue to execute on that.

Um, accordingly, we are not going to carry inventory in this environment, other than for things like turnaround. So.

So in terms of.

What is it going to take to see a recovery.

all that I'll tell you is that our operating rates are differentially lower than the rest of the industry. Um,

You can you can focus in first on North America and you can look at housing obviously housing is a big driver for chemicals.

And that shouldn't surprise anybody. That's our operating model and we're going to continue to execute on that.

so in, in terms of,

Especially a lot of the chemistry.

That chlorine goes into and once we see housing start to really recover its.

Anybody's guess when that May occur I hope, it's next year, but right now I just don't see any any signs that really there is a big turnaround in the housing market on the horizon.

Ken Lane: Once we see housing start to really recover, it's anybody's guess when that may occur. I hope it's next year, but right now, I just don't see any signs that really there's a big turnaround in the housing market on the horizon. That's sort of North America. I think that's what's going to drive the market here in North America. When you think beyond our shores and you go to Europe or into Asia, you've got to see both of those markets begin to grow as well. We haven't seen any signs yet of consumption really taking off, particularly in China, the largest market, to be able to absorb a lot of this new capacity that they've been bringing on. They are a big exporter now of PVC, which makes them a bigger exporter of things like caustic.

That's sort of North America, I think that's what's going to drive the market here in North America.

But when you think beyond our shores and you go to Europe or in the Asia, you've got to see both of those markets begin to grow as well.

What is going to take to to see a recovery, you know, you can you can focus in first on North America and you can look at housing, obviously housing is a big driver for chemicals uh especially a lot of the chemistry that that chlorine goes into and once we see housing start to really recover, it's it's you know anybody's guess when that may may occur. I hope it's next year but right now I just don't see any any signs. That really there's a, a big turnaround in the house.

Housing market on the horizon.

Um,

And we haven't seen any signs yet of consumption really taking off.

you know, that sort of North America, I think that's what's going to drive the market here in North America.

And particularly in China, the largest market to be able to absorb a lot of this new capacity that <unk> been bringing on so they are a big export or now a PVC, which makes them a bigger exporter of things like caustic.

But when you think beyond our shores, and you go to Europe or into Asia, you've got to see both of those markets begin to grow as well.

and,

And all of that is going to need to find a home with demand growth. So we need to see the global economy growing as well to be able to help absorb a lot of that additional supply that's coming on in China. I know, we've talked a lot about anti involution in all of those things.

Ken Lane: All of that is going to need to find a home with demand growth. We need to see the global economy growing as well to be able to help absorb a lot of that additional supply that's coming on in China. I know we've talked a lot about anti-involution and all of those things. Those are great theories, and they're great policies that I hope we see the Chinese government begin to execute on. So far, it's been not as much directed at chemicals as we had hoped that it would be. Maybe that changes in the new year, but right now, we need to see higher demand in Asia and some more rationalization there as well.

you know, we haven't seen any signs yet of consumption really taking off in, in particularly, in China, the largest market to be able to absorb a lot of this new capacity that they've been bringing on. So, you know, they are a big exporter now, a PVC, which makes them a bigger exporter of of things like caustic.

Those are great theories and theyre, great policies that I hope we see.

The Chinese government begin to execute on but so far it's been not as much directly to chemicals as we had hoped that it would be maybe that changes in the new year, but right now we need to see higher demand in.

In Asia, and some more rationalization there as well.

Thank you and our next question today comes from Kevin Mccarthy with vertical Research partners. Please go ahead.

Thank you and good morning, Ken I was wondering if you could provide an update on your.

And, and all of that is, is going to need to find a home with demand growth. So we need to see the global economy growing as well, to be able to help absorb a lot of that additional Supply that's coming on in China. I know, we've talked a lot, a lot about anti-, involution, and all of those things. Um, those are great theories and, and they're a great policies that I that I hope we see uh, the Chinese government begin to execute on. But so far it's been uh not as much directed at chemicals. As we had hoped that it would be maybe that changes in the new year but right now we we need to see higher demand in um in Asia and some more rationalization there as well.

Operator: Thank you. Our next question today comes from Kevin McCarthy of Vertical Research Partners. Please go ahead.

It's about the U S caustic soda market on slide nine it appears as though you're baking in some price improvement for caustic in the fourth quarter, maybe you could speak to how much of that is seasonal uplift as chlorine.

[Analyst]: Yes, thank you, and good morning. Ken, I was wondering if you could provide an update on your thoughts about the U.S. caustic soda market. On slide nine, it appears as though you're baking in some price improvement for caustic in the fourth quarter. Maybe you could speak to how much of that is seasonal uplift as chlorine operating rates or demand presumably comes down seasonally versus any cyclical or structural uplift that you may see unfolding in caustic?

Thank you, and our. Next question is for Kevin McCarthy, a vertical research Partners, please go ahead.

Chlorine operating rates or demand, presumably comes down seasonally versus.

Any any cyclical or structural uplift.

Thank you and good morning. Uh, Ken. I was wondering if you could provide an update on your um, thoughts. Uh, about the US caustic soda Market on slide 9, it appears as though you're baking in some price Improvement for caustic in the fourth quarter, maybe you could speak to you know how much of that is.

That you may see unfolding in caustic.

Good morning, Kevin. Thank you for the question, yes, So we are expecting to see higher values for caustic in the fourth quarter.

Seasonal uplift as, uh, you know, chlorine operating rates or demand presumably comes down seasonally versus, uh, you know, any cyclical or structural uplift that you may see unfolding in caustic.

Ken Lane: Good morning, Kevin. Thank you for the question. Yes, we are expecting to see higher values for caustic in the fourth quarter. As I said in the prepared remarks, the caustic market is relatively stable. We have seen some softening around pulp and paper, but we continue to see a robust market around aluminum. If you look at the aluminum market, prices for aluminum still are holding up quite well, which indicates healthy demand, and that's a very positive thing for caustic. On the demand side, I would say stability is the key word. On the supply side, yes, you're going to see less supply in the fourth quarter. Some of that is going to be related to some of the actions that we're taking with our portfolio.

As I said in the prepared remarks.

The caustic market is relatively stable. So we have seen some softening around pulp and paper, but we continue to see robust market around the alumina and if you look at the aluminum market prices for aluminum still are holding up quite well, which indicate healthy demand and that's that's a very positive thing for caustic.

So the demand side I would say stability is the key word on the supply side, yes, youre going to see less supply in the fourth quarter. Some of that is going to be related to some of the things some of the actions that we're taking with our portfolio.

Order. Um you know as as I said in the prepared remarks the the cost that market is is relatively stable. So we have seen some softening around Pulp and Paper, but we continue to see, you know, a robust market around aluminum. And if you look at the aluminum market prices for aluminum, still are holding up quite well which indicates healthy demand. And and that's that's a very positive thing for caustic.

Some of it is also related to other industry outages that normally happen in the fourth quarter, that's going to be the case here as well so.

Ken Lane: Some of it is also related to other industry outages that normally happen in the fourth quarter. That is going to be the case here as well. Between lower demand for chlorine derivatives, which is naturally going to pull down operating rates, and the normal sort of seasonal turnarounds that occur in the fourth quarter, that's going to restrict supply, and that should give support for caustic values in the fourth quarter.

Between lower lower demand for chlorine derivatives, which is naturally going to pull down operating rates.

And the.

The the normal sort of seasonal turnarounds that occur in the fourth quarter, that's going to restrict supply and that should give support for caustic values in the fourth quarter.

Thank you and our next question today comes from Jeff Zekauskas with Jpmorgan. Please go ahead.

Thanks very much.

Um, so the demand side I would say stability is is the key word on the supply side? Yes. You're going to see less Supply in the fourth quarter. Some of that is going to be related to some of the things, some of the actions that we're taking with our portfolio. Um, some of it is related to other industry outages, that normally happen in the fourth quarter, uh, that's going to be the case here as well. So, you know, between lower lower demand for chlorine derivatives, which is naturally going to pull down operating rates and the, uh, the, the, the, the normal sort of seasonal turnarounds that occur in the fourth quarter, that's going to restrict Supply and that should give support for caustic values in the fourth quarter.

Operator: Thank you. Our next question today comes from Jeff Zekauskas with JPMorgan. Please go ahead.

You talked about a large turnaround in PCM.

I think this year in Europe.

Thank you. And our next question. Today comes from Jeff sakas, with JP Morgan. Please go ahead.

[Analyst]: Thanks very much. You talked about a large turnaround in VCM. I think this year your forecasted turnaround costs are $125 million. It is maybe something like $175 million next year, up $50 million, a reasonable first draft.

Casted turnaround costs.

$25 million.

Okay.

Maybe something like 175 next year up 15, a reasonable first trial.

Uh, thanks very much. Um, you you talked about a large turnaround in vcm.

I I think this year, you're

Forecasted turnaround costs are 125 million.

Good morning, Jeff.

So listen turnarounds. This year was pretty heavy we are going to be updating our modeling data for 2026.

It is maybe something like 175 next year up. 50, um, a reasonable first draft.

Ken Lane: Good morning, Jeff. Listen, turnarounds this year were pretty heavy. We are going to be updating our modeling data for 2026 at our fourth quarter earnings call coming up at the beginning of the year. That is a very large turnaround for us. It happens every three years, like Todd had mentioned. There are other puts and takes as well. We're currently finalizing our schedule for turnarounds in 2026, so I don't have a final number to give you today. Some of that is still moving around. Once we do, like I said, we will get you a new outlook for 2026 at the beginning of the year.

At our fourth quarter earnings call here coming up at the beginning of the year, but.

Good morning, Jeff.

That is that that is a very large turnaround for us. It happens every three years like Todd had mentioned.

Um, so listen, turn arounds, you know this year was was pretty heavy, we are going to be updating our modeling.

Data for a 2026.

But there are other puts and takes as well. We're currently finalizing our schedule for turnarounds in 2026, So I don't have a final number to give you today.

Some of that is still moving around.

And once we do like I said, we will get you a new.

Outlook for 2026 at the beginning of the year.

Thank you and our next question today comes from Vincent Andrews Morgan Stanley. Please go ahead.

At our fourth quarter, earnings call here, coming up at the beginning of of the year. But, uh, you know that is that is a very large turnaround for us, it happens every 3 years like Todd had mentioned, uh, but there are there are other puts and takes as well. We're currently finalizing our schedule for turnarounds in 2026. So I don't have a final number to give you today. Uh, some of that is still moving around. And, uh, once we do, uh, like I said, we will get you a, a new, uh, outlook for 2026 at the beginning of the year.

Thank you and.

Operator: Thank you. Our next question today comes from Vincent Andrews at Morgan Stanley. Please go ahead.

Good morning wondering if you could just talk a little bit.

I know you went through your capital allocation priorities, but if we look at.

Thank you. And our next question comes from Vincent Andrews at Morgan Stanley. Please go ahead.

[Analyst]: Thank you, and good morning. Wondering if you could just talk a little bit, you know, Todd, I know you went through your capital allocation priorities, but if we look at trailing 12-month leverage at the end of the year based on the fourth quarter EBITDA guidance, it pushes you close to 4. Does that change anything in terms of what you're going to be able to do? Are you going to continue to repurchase stock? Are you going to hold off a little bit and see how 2026 develops? How should we be thinking about that in terms of your desire to maintain your investment-grade credit rating?

Trailing 12 month leverage at the end of the year based on the fourth quarter EBITDA guidance. It pushes you close to four so does that does that change anything in terms of.

Whats youre going to be able to do or are you going to continue to repurchase stock or are you going to hold off a little bit and see how 2026 developments.

Should we be thinking about that in terms of your desire to maintain your investment grade credit rating.

Yeah. Thanks for the question.

We would expect as we've said too.

Have a significant cash flow in the fourth quarter and be able to reduce that back to even where we started the year.

Uh, thank you and uh and good morning, um, wondering if you could just talk a little bit. Uh you know, Todd I know you went through your Capital allocation priorities but you know if we look at uh you know trailing 12-month leverage at the end of the year, based on uh the fourth quarter, Evita guidance, it pushes you close to 4. So does that does that change anything in terms of, you know uh what you're going to be able to do or you going to continue to repurchase stock? Or are you going to hold off a little bit and see how 2026 develops? Um, how should we be thinking about that in terms of your desire to maintain your investment grade credit rating rating?

Todd Slater: Yeah, thanks for the question. We would expect, as we've said, to have a significant cash flow in the fourth quarter and be able to reduce debt back to even where we started the year. Net debt flat year over year. We have clearly curtailed the level of share repurchases this year compared to what we have done over the last several years. I think you saw us buy $10 million the last couple of quarters. I wouldn't be surprised if we don't continue at a modest pace. We are going to clearly prioritize that cash flow that we generate in the fourth quarter toward our reduction of debt for where we sit today.

So net debt flat year over year.

We do we have clearly curtailed the level of share repurchases this year compared to what we have done over the last several years.

Yeah, thanks for the question. Um, we would expect, as we've said, to have a significant cash flow in the fourth quarter and be able to reduce debt back to even where we started the year. Um, so net debt will be flat year-over-year.

You saw us buy $10 million last couple of quarters or so.

I wouldn't be surprised if we don't continue at a modest pace, but.

We are going to clearly prioritize that cash flow that we generate in the fourth quarter toward our reduction of debt from where we sit today.

We do. We have, you know, clearly curtailed the level of share purchases this year compared to what we have done over the last several years. Um, I think you saw us buy, you know, $10 million the last couple of quarters. So, I wouldn't be surprised if we continue at a modest pace, but you know, we are going to clearly prioritize that.

Thank you and our next question today comes from Arun Viswanathan with RBC. Please go ahead.

Cash flow that we generated in the fourth quarter toward our reduction of debt for where we sit today.

Great. Thanks for taking my question have you guys are well.

Operator: Thank you. Our next question today comes from Arun Viswanathan with RBC Capital Markets. Please go ahead.

You guys are roughly at a 700 million dollar annualized EBITDA run rate here.

Thank you. Our next question comes from a rude business way with RBC. Please, go ahead.

[Analyst]: Great. Thanks for taking my question. I hope you guys are well. You know, you guys are roughly at a $700 million annualized EBITDA run rate here. We've seen kind of flattish core alkali index numbers. What do you think it's going to take you to get to maybe a billion? Is that maybe roughly $50 million in epoxy and Winchester uplift and then maybe $200 million or so in core alkali? How does that maybe

So.

And then we've seen kind of flattish.

Chlor alkali.

<unk> members. So what do you think it's going to take you to get to maybe a $1 billion is that maybe roughly $50 million and in the proxy and Winchester uplift and then maybe.

$200 million or so in Chlor alkali and how does that.

Maybe you can help us bridge that gap.

That'd be great. Thanks.

Good morning, Arun. Thank you for the question.

Operator: You can help us bridge that gap. That'd be great. Thanks.

Listen if you just think about where we are year to date.

The biggest the biggest delta versus prior year was or is Winchester.

You know, maybe you can help us bridge that gap. Um, that'd be great. Thanks.

Steve Keenan: Good morning, Arun. Thank you for the question. Listen, if you just think about where we are year to date, the biggest delta versus prior year was or is Winchester. You know, so chlor alkali has held up quite well, and that's a really positive thing for us, the company. It's one of our, you know, it is, as Todd says, the engine that drives the bus. Right. I'm very happy to see that. Yes, you're going to see over time, you're going to see ECU values improve off of trough levels. With our operating rate leverage that we have, that's where you've got the biggest leverage right now in the portfolio overall. There will be a recovery in Winchester at some point. We've got to get through some of these cost headwinds. We've got to get to a point where we see stronger consumer spending for discretionary items improve.

Good morning room. Thank you.

So chlor alkali has held up quite well and that's really.

Uh, listen, if if you just think about where we are year to date,

Positive thing for us as a company.

It's one of our.

It is his task is the engine that drives the bus right.

And so I'm very happy to see that so yes, you're going to see over time, youre going to see values improve off of trough levels and with our operating rate leverage that we have that's where you've got the biggest leverage right now in the portfolio overall, there will be a recovery in Winchester at some point, we've got to get through some.

Uh, the the biggest uh, the biggest Delta versus prior year was or is Winchester. Um, you know, so chlorophyll is held up quite well. And and that's a really

Positive thing for us as a company. It's, it's

These cost headwinds.

We got to get to a point, where we see stronger consumer spending.

Discretionary items improve I'm not sure that we're going to see that in the short term.

But the good news is.

We are in the Winchester team is very focused on adjusting their operating model to the new environment that they're in we.

Steve Keenan: I'm not sure that we're going to see that in the short term. The good news is we are, and the Winchester team is very focused on adjusting their operating model to the new environment that they're in. We did not think we would be here a year ago. We thought we were going to see demand recovering in 2025, and we just have not seen that. We've seen it go the other way. We'll adjust that model, and I expect that we'll start to see some recovery there. Again, I go back to what I said earlier on epoxy. I'm probably more optimistic on epoxy than any other business right now. Not because, again, we're seeing lots of positive signals in demand in the market. You know, that is still challenging.

It's one of our, you know, it is as Todd says, the engine that drives the bus, right? And, uh, so I'm very happy to see that. So yes, you're going to see, over time, you're going to see ECU values improve off of trough levels and with our operating rate leverage that we have. That's where you've got the biggest leverage right now in the portfolio. Overall, there will be a recovery in Winchester at some point. We've got to get through some of these cost headwinds. We've got to get to a point where we see stronger consumer spending for discretionary items improve. Uh, I'm not sure that we're going to see that in the short term.

We did not think we would be here a year ago. We thought we were going to see demand recovering in 2025, and we just have not seen that we've seen it go the other way.

But the good news is.

And so we will adjust that that model and I expect that we'll start to see some recovery there.

Uh, we are and and and the Winchester team is very focused on adjusting their operating model to the new environment that they're in.

But again I go back to what I said earlier on epoxy I'm, probably more optimistic on epoxy than any other business right now.

We did not think we would be here a year ago. You know, we thought we were going to see demand recovering in 2025, and we just have not seen that. We've seen it go the other way.

Not because again, we're seeing lots of positive signals in demand in the market that is still challenging.

But with rationalization of capacity that's happening in the industry. Some of the challenges that you see with higher glycerin costs in Asia.

And so, we'll adjust that that model. And, and I expect that, we'll start to see some recovery there. Uh, but again, I go back to what I said earlier on, on epoxy. I'm I'm probably more optimistic on epoxy than than any other business right now.

Steve Keenan: With rationalization of capacity that's happening in the industry, some of the challenges that you see with higher glycerin costs in Asia, which is, you know, putting a floor under pricing, you get the tariff headwinds, you get the self-help that we've been implementing over the last several years, we start to see some really positive momentum into next year for the epoxy business. That's kind of how I think about, you know, where you're going to see the improvements going into 2026. From there, I think things are going to move higher, but it just depends on what's the rate of change. It's going to be largely dependent on what's the global economy doing as well.

Not because, again, we're seeing lots of positive signals in demand in the market. You know, that is still challenging.

Which is putting a floor under pricing you get the tariff headwinds.

You get the self help that we've been implementing over the last several years, we start to see some really positive momentum into into next year for the epoxy business. So.

Um but with rationalization of capacity that's happening in the industry, some of the challenges that you see with higher glycerin costs in Asia, uh which is, you know, putting a a floor under pricing. You get the Tariff headwinds

That's kind of how I think about where youre going to see the improvements going into 2026.

From there I think I think things are going to move higher but it just depends on what what's the rate of change.

Is going to be largely dependent on what's the global economy doing as well.

You get the self-help that we've been implementing over the last several years. We start to see some really positive momentum in in to into next year for the epoxy business. So that's kind of how I think about, you know, where you're going to see the the the improvements going into 2026 and

um, you know

Thank you and our next question today comes from Matthew Blair a P. P. H. Please go ahead.

From there, I think things are going to move higher, but it just depends on what the rate of change is.

Alright, great. Thanks for taking the question.

Uh, it's going to be largely dependent on what the global economy is doing as well.

Todd Slater: Thank you. Our next question today comes from Matthew Blair at Wells Fargo. Please go ahead.

The slower production outlook for Winchester are things going on the ammo acquisition and do you still expect to realize I think it was previous guidance of about $5 million EBITDA in the back half of the year from ammo is that that's still realistic.

Thank you. And our next question comes from Matthew Blair at PPH. Please go ahead.

Ken Lane: Great. Thanks for taking the question. In light of the slower production outlook for Winchester, how are things going on the ammo acquisition? Do you still expect to realize that, I think it was previous guidance of about $5 million EBITDA in the back half of the year from ammo. Is that still realistic? Thanks.

Thank you for the question good morning, Matthew.

We still feel very positive we actually.

When we look at the business case around that acquisition and.

Uh, great. Thanks for taking the question. Um, in light of the slower production outlook for Winchester, how are things going on the ammo acquisition? And do you still expect to realize, I think it was previous guidance of about $5 million EBITDA in the back half of the year from ammo? Is that still realistic? Thanks.

Steve Keenan: Thank you for the question. Good morning, Matthew. Listen, we still feel very positive. When we look at the business case around that acquisition and what we had talked about before, the synergies with the capability to build shell cases at that facility have proven to be as good, if not even a little bit better than what we thought. The synergies that we talked about, yes, very confident in delivering them, not just for this year, but that $40 million level in three years' time. We feel very positive about that. The asset is in great shape. The employees have really been great, coming into Winchester. I think they're excited to be part of the Winchester brand, and that has been a very positive acquisition for us. We feel really good about it.

What we had talked about before the synergies with the capability to to build shell cases at that facility.

Thank you for the question. Good morning, Matthew. Listen, we still feel very positive. We actually, um,

Has proven to be as good if not even a little bit better than what we thought so the synergies the synergies that we've talked about yes, very confident in delivering them not just for this year, but that $40 million level in three years time.

You know, when we look at the business case around that acquisition,

We feel very positive about that.

The asset is in great shape, the employees have really been great.

Coming into Winchester, I think they're excited to be part of the Winchester brand in and that has been a very positive acquisition for us. So we feel really good about it.

And what we had talked about before, the synergies with the capability, to, to build shell cases at that facility, um, has proven to be as good if not even a little bit better than what we thought. So, the centers, the synergies that we talked about yes, very confident in delivering them not just for this year but that 40 million level in in 3 years time, uh, we feel very positive about that.

Thank you and our next question today comes from Roger Spitz of Bank of America. Please go ahead.

The asset is in great shape. The employees have really been great, and you know, coming into Winchester, I think they're excited to be part of the Winchester brand.

Alright, Thank you very much.

and that has been a very positive acquisition for us. So we feel really good about it.

Todd how should we see expect to see the clean headroom benefit in EBITDA will you start putting into EBITDA maybe.

Todd Slater: Thank you. Our next question today comes from Roger Smith at Bank of America. Please go ahead.

Operator: Thank you very much. Todd, how should we expect to see the Clean Hydrogen Production tax credits (Section 45V) benefit in EBITDA? Will you start putting it into EBITDA, you know, maybe 25% each quarter, or will you periodically be showing us a bigger once-a-year number in the EBITDA?

Thank you. And our next question today comes from Roger Smith at Bank of America. Please go ahead.

25% each quarter or will you periodically be showing us a bigger once in your number and the EBITDA.

Yes. Thanks for the question Roger you should start now that we have received the real.

The key determining factor, which was our admissions information from the department of energy you should start to see.

Uh, thank you very much. Uh, Todd. How should we, uh, see expect to see the clean hydrogen benefit and Ava? Will you start, uh, putting into the, uh, uh, you know, maybe, uh, 25% each quarter? Or will you periodically be showing us, uh, a bigger once a year number in the ibida.

Steve Keenan: Yeah. Thanks for the question, Roger. You should start now that we have received the key determining factor, which was our emissions information from the Department of Energy. You should start to see the 45V tax credit just be included as part of our normal earnings as a reduction to cost of goods sold every quarter. There it won't be called out like it is today. This was really the catch-up for this year because we finally got the emissions data. As you think about next year and the next three years of a $15 to $20 million benefit, that'll just run through as a reduction to cost of goods sold on a quarterly basis.

The 40 <unk> tax credit just be included as part of our normal earnings as a reduction to cost of goods sold ever.

Every quarter. So there it won't be it won't be called out like it is today. It will be yes. This was really the catch up for this year.

Because we finally got the.

Admissions data. So there as you think about next year in the next three years of a $15 million to $20 million benefit.

I'll just run through as a reduction to cost of goods sold.

On a quarterly basis.

Thank you.

No further questions. This concludes our question and answer session.

I would like to turn the conference back over to Kevin Williams for closing comments.

Normal earnings as a reduction to cost of goods sold you know every quarter so there it won't be an you know, won't be called out like it is today. It'll be a you know, this was really the catch-up for this year and because we finally got the um emissions data. So that as you think about next year and the next 3 years of a 15 to 20 million dollar benefit you know that'll just run through as a reduction to cost of goods sold you know on a quarterly basis.

Todd Slater: Thank you. As there are no further questions, this concludes our question and answer session. I'd now like to turn the conference back over to Ken Lane for closing comments.

Thank you Rocco and listen Thank you everyone for joining us. This morning, we appreciate your interest in OLED and we look forward to speaking with you at the beginning of the year next year, we wish you all a very safe and prosperous week. Thank you.

Thank you president. No further questions. This concludes our question and answer session.

Steve Keenan: Thank you, Rocco. Thank you, everyone, for joining us this morning. We appreciate your interest in Olin Corporation, and we look forward to speaking with you at the beginning of the year next year. We wish you all a very safe and prosperous week. Thank you.

I'd now like to turn the conference back over to Ken for closing comments.

Thank you.

We thank you all for attending today's presentation. You may now disconnect your lines and have a wonderful day.

Todd Slater: Thank you. We thank you all for attending today's presentation. You may now disconnect your lines and have a wonderful day.

Thank you, Rocco. And listen, thank you, everyone, for joining us this morning. We appreciate your interest in OLED, and we look forward to speaking with you at the beginning of the year next year. We wish you all a very safe and prosperous week. Thank you.

Thank you.

Oh, we thank you all for attending today's presentation. You may now disconnect your lines and have a wonderful day.