Good morning. My name is Kim and I will be your conference operator today. At this time, I would like to welcome everyone to The Chemours Company Fourth Quarter 2018 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions] Thank you. Jonathan Lock, Vice President of Corporate Development and Investor Relations, you may begin your conference.

Good morning. Welcome to The Chemours Company’s fourth quarter and full year 2018 earnings conference call. I am joined today by Mark Vergnano, President and Chief Executive Officer and Mark Newman, Senior Vice President and Chief Financial Officer. Before we start, I would like to remind you that comments made on this call as well as the supplemental information provided in our presentation and on our website contains forward-looking statements that involve risks and uncertainties including those described in the documents Chemours has filed with the SEC. These forward-looking statements are not guarantees of future performance and are based on certain assumptions and expectations of future events that may not be realized. Actual results may differ and Chemours undertakes no duty to update any forward-looking statements as a result of future developments or new information. During the course of this call, management will refer to certain non-GAAP financial measures that we believe are useful to investors evaluating the company’s performance. A reconciliation of non-GAAP terms and adjustments are included in our release and at the end of this presentation. I will now turn the call over to Mark Vergnano who will review the highlights from the year. Mark?

Well, thank you Jonathan and good morning everyone. Thank you all for joining us today and I hope you all remember Valentine’s Day. So I am proud to report our results for the fourth quarter of 2018, our best full year since becoming Chemours. For the full year, we generated over $6.6 billion in revenue and over $1.7 billion in adjusted EBITDA. This represents an improvement of 7% on the top line driven by sales growth in each of our three segments. Adjusted EBITDA was up 22% and created a 320 basis point expansion in our adjusted EBITDA margin. Free cash flow conversion was strong and the company delivered free cash flow of over $640 million in 2018, a 14% increase from 2017. Looking beyond the financials, as I reflect on 2018 I see significant progress against the ambitious goals we have set as a management team since our inception. When we initiated our journey in mid 2015, we wanted to create a new kind of chemistry company for a world that demands more. Today, we have laid the foundation for long-term profitable growth and are investing in the resources, infrastructure and talent which will make that great future possible. 2018 was the year we released our first corporate responsibility commitment report. I am proud of the ambitious goals we have defined because they will keep Chemours on the path to sustainable, profitable growth for years to come. Our corporate responsibility commitments truly embody the spirit of what makes us a different kind of chemistry company. It is a foundational element of our strategy and will be incorporated in everything we do going forward. We achieved a number of important strategic goals across our segments in 2018, bold steps which were designed to help Chemours generate more stable predictable earnings…

Thanks Mark. I will begin my comments on Slide 4. As Mark mentioned 2018 was a record year with broad based growth across all of our businesses and solid improvement in all our key financial metrics. I am proud to say that this marks three full years of improving financial results since spin. Net sales of over $6.6 billion improved 7%, a result of mid to high single-digit revenue growth from each of our segments. GAAP and adjusted net income rose to approximately $1 billion, a year-over-year increase of 33% and 42% respectively. These translated into GAAP EPS growth of 39% and adjusted EPS growth of 48% in comparison to 2017. Adjusted EBITDA of $1.7 billion increased over $300 million versus the previous year, a 22% improvement. This resulted in margin expansion of 320 basis points to over 26%. Free cash flow generation of $642 million was up nearly $80 million when compared to 2017. Let’s go to Slide 5 to review our Q4 results. While 2018 was a great year for Chemours, we finished with a softer Q4 than in 2017. This slide contains our fourth quarter financial summary compared to last year’s historically strong fourth quarter. Quarterly results were primarily driven by lower sales volumes of Ti-Pure titanium dioxide in comparison to a record volume quarter last year. Fourth quarter GAAP net income of $142 million and adjusted net income of $185 million resulted in GAAP and adjusted EPS of $0.81 and $1.05 per share respectively. Adjusted EBITDA of $341 million translated into an adjusted EBITDA margin of over 23% for the fourth quarter with corresponding free cash flow of $105 million. Our pre-tax ROIC of 39%, up from 36% a year ago highlights our continued commitment to invest in our portfolio through high-return projects. Now to our…

Thanks Mark. Turning to Fluoroproducts on the next slide, we continue to be pleased with the progress of this segment. 2018 results built on the long-term secular growth trends for this business which we would expect to remain a source of growth over the coming years. 2018 sales rose 8% to nearly $2.9 billion with solid volume and price increases year-over-year. Adoption of our low GWP refrigerant Opteon continues despite the slowdown in global auto builds as we entered the fourth quarter. We remain committed to supporting our customers to the low GWP switch including providing base refrigerants during this time of transition. As expected volume for our base refrigerants declined year-over-year reflecting the regulatory environment. This was mostly offset by higher pricing with price peaking in the second quarter of last year. Our fluoropolymers products saw solid demand improvement in 2018 even with the supply constraints we mentioned last quarter. We continue to make progress unlocking capacity in our key product lines to meet growing customer demand. We also implemented price increases throughout 2018 providing an up-lift to segment revenue. For the full year segment adjusted EBITDA increased to over $780 million, a 17% increase versus 2017. Our fourth quarter revenue of nearly $650 million reflected the strength in our Fluoropolymers business and positive revenue growth for Opteon refrigerants, partially offset by declines in base refrigerant revenue. 2017’s fourth quarter was the beginning of the strong price increases for base refrigerants as the EU prepared for our quota step down in 2018. As prices came of the highs from earlier this year, we experienced a bit of a headwind versus fourth quarter of 2017. In total our quarterly adjusted EBITDA improved 3% to $164 million when compared to last year. Looking ahead, as I mentioned earlier, we are actively…

[Operator Instructions] Your first question comes from John McNulty from BMO Capital Markets. Your line is open.

Yes, thanks for taking my question. I guess with regard to the TiO2 platform, I guess, how are you thinking about pricing as you look through 2019? And then I guess also with regard to some of the inflation that you had spoken about in the business, I guess early on and in the release. I guess, how should we be thinking about how you manage through that inflation as we look through 2019?

Yes. Thanks, John. We’re looking at pricing being fairly stable through the year, that’s part of the work we’ve done with our AVA contracts, obviously on our Ti-Pure Flex portal we have more flexibility on price if we want that our AVA contracts will always be advantaged on price, but the Flex pricing allows us to move that up, if we see things differently. Right now our raw material look is fairly flat, from a pricing point of view. And again, our contracts will reset as we’ve talked about in the six months increments based on producer price index, so if there are other things there that will really take into account that kind of pricing, but I think as you look at us for 2019, think of it as fairly flat pricing.

Great. And then maybe just a follow-up, with regard to your commentary around it looks like some of the share that you may lose to, with regard to some of the plastics demand. I guess what percent of your business, do you think is in jeopardy in terms of the volumes there until the demand starts to kind of stabilize itself?

Yes, I don’t know if we really lay out a percentage. I would say as we sort of set the guidance, we yes, we were conservative, but prudent in our mind because we looked at this from a standpoint of, our range was based on a lot of sophisticated models we have, and I would say the low-end of that range was based on very low demand. In that, we’ve also looked at what kind of share could we lose in the early going. And as I said in the commentary, we really think that’s primarily focused on the plastics space because that’s a little bit under pressure right now, as all of you who follow plastics know from that standpoint. We think that’s going to change in the second half of the year. So, I would say that for the first two quarters is really where we are probably the most conservative, but we do believe things are going to improve significantly in the second half. Primarily because the demand comes back there is no new supply. So, from that standpoint, we think this is going to be a positive story as the year progresses.

Great. Thanks very much for the color.

Sure, John.

Your next question comes from Duffy Fischer from Barclays. Your line is open.

Yes, good morning, fellas. I just wanted to get a sense, you already talked about you think price will be flat, raw mats will be flat this year. If you think about the high-end and the low-end of your guidance, roughly what’s the delta in volumes for TiO2. So, with the 135, how much down would volume be this year and then at the 16 level, what would volume do this year?

Yes, so you hit you really hit our guidance on the head, Duffy, as you normally would. It’s the delta is in demand, right. So, as we do our modeling, we’re looking at the extremes of demand, we’re not going to share the volume that we specifically have, but it is purely around volume and that volume is really around demand. And I think the best way to think about it from our point of view is the normally in these, kind of situations where you’re in a de-stocking area or when you’re in a lower demand type of space, you have two big variables right, price and volume. We only have one variable here, which is volume and that’s what we’re working off of. So that’s the extreme that you’re seeing in our guidance, it’s almost entirely around TiO2 volume.

Okay. And then if we could jump on the Opteon plant, how should we think about that impacting earnings this year and into next year as that starts to ramp, will there be lumpy costs in one quarter where we start to see margin improvement toward the back-end of the year because of the better cost, just how does that feather in throughout the year as far as margins go?

Yes, so in the beginning as you noted, as we start up, obviously there’s more cost. The cost benefit we see from that production facility, which is the lowest cost HFO facility in the world, will really manifests itself toward the end of this year, but mostly toward the beginning of next year. However, we are getting more volume out of that than what we have currently, so because of that our revenue will go up at the same time. So, the cost benefit is primarily going to be way at the back end of 2019 and toward the beginning of 2020 is when you’ll start seeing that.

Great. Thank you guys.

Your next question comes from Robert Koort from Goldman Sachs. Your line is open.

Thanks. Good morning.

Hey Mr. Koort.

Mark, you talked about the resi opportunity for Opteon, I am wondering if you could give a little more clarity on the patent challenges, I think you guys have said in 2023 you are going to start to see some HFO expirations in 26 Opteon. So, could we start to think the size of that resi market is enormous but maybe the competition can build or what gives you some confidence that you will continue to stake out your fair share of that business once those patents start to roll on?

Yes. Bob, we do have a lot of patent protection for a period of time. We think on the stationary blends which are unique we have a lot of patent protection into the 2030s. So from that standpoint when you start doing blends, you have some uniqueness in terms of how you do the blends, what you blend it with and a proprietary position usually with your customer base. So that actually is going to extend longer than just the pure HFO patents that are out there. So from that standpoint, we feel very confident and why we say we see this growth happening over the next decade because of that.

And then I think you specified that plastics customer base maybe is having a little harder time, would you throw in that 10% or 15% of volume you sell into the paper industry similarly or is there something unique to your plastic customers that doesn’t replicate it at the paper or the coatings customers?

Yes. I would say plastics because of all the dynamics you know, the laminate side is under pressure primarily from their demand side. So, yes, I would say the laminate customers are in that same boat.

Got it. Thank you.

Yes.

Your next question comes from Laurence Alexander from Jefferies. Your line is open.

Good morning. I guess first of all on Titanium Technologies, can you characterize on the flex channel, how much volume is going through that, give some sense for the spread between that and the regular pricing. But I guess also can you help explain the volume calculation in the deck, back of the envelope it looks like your volumes were down about $50 million, but the EBITDA hit was 81, but can you explain how that works? And if that kind of leverage continues, how does that affect your – the way you think about the Ti-Pure strategy?

Yes. So on the first piece, Laurence we just kicked off Ti-Pure Flex actually just in the UK and Brazil in February. It will go global March 1. Over time, we expect pretty good balance between what’s on Flex and what’s in our contracts most likely, but we will play that out as we go forward, because I think we will get a good sense of that as we come into the March, April, May timeframe as people who haven’t entered into our AVA contracts will be primarily purchasing the Flex platform. In terms of the volume question that you have, I would say that first of all think of it as a different way, I can’t validate your number, that probably was a little bit more volume there than you had mentioned, but you got to remember as our volume comes down, as we have always said, we are very willing to let volume come down versus price that is the whole basis for the value stabilization strategy and we have the flexibility that how we operate our assets, but you do have fixed cost absorption issues when you have lower volume. And I think that’s what you are seeing when we get to a certain level of volume is more fixed cost getting absorbed by less pounds and that’s really what the hit is on the bottom line. That is all contemplated, we understand that and I don’t want anyone to think that is going to be a reason to see us turn away from our strategy. We are absolutely committed to it, because if you think of the alternative to that, the alternative to that would have been volume down and price down and we think that would have been actually a worse outcome. So we still think this is the best outcome for us overall.

And I guess just to follow-up are you seeing outside plastics and laminates, how much volumes swing did you see in the sort of softer environment that we have seen in the last, call it, 3, 4 months. I mean, I know you were expecting like sort of to take more of the Flex in the channel. Was it really just those two areas or do you see it more broadly?

Yes, I’d say it’s more regional, right. So, Asia down, Europe sort of flattish, North America continues to be strong. And I’d say, when you look at it from a segment point of view, the segment sort of flow that way. We’ve seen pretty good strength in the coding side, as well as the North America side from that standpoint. So, I would say, when you look at the volume piece, it’s probably more regionally based than it is by segment.

Okay. Thank you.

Your next question comes from Don Carson from Susquehanna. Your line is open.

Yes, Mark, wanted to follow up on volumes and in particular your 19% Q4 decline. So, how much of that was share loss? How much of it was a tough comp for the year before? And what’s your sense of what customers are doing in terms of destocking? So what – is there a major difference here between your shipments and market demand?

Yes, Don, I would say that was primarily pure demand and destocking versus share loss, and we also had a big comparison to the year before, pretty strong comp in the fourth quarter of the year before. So, think of it as comp with a very strong year prior quarter and also think of it primarily as true demand not market share loss. So, that would be the, I guess, the best way I would characterize it. I’m sorry, Don, the second half of your question?

What customers are doing in terms of their destocking? So, are your shipments lagging end-market demand because customers are drawing down inventories or do you think that drawdown is coming to a close as prices stabilize in markets like North America?

Yes, we saw a pretty sharp decline that I would attribute to destocking, second half of last year and the beginning of this year. I think going forward, as you look at probably the middle of the second quarter and for the rest of the year it’s going to be really about demand. So, I think you could say through this quarter being the first quarter you probably be done with all the destocking. Now it’s going to be true demand and what’s the market really pulling forward from a demand standpoint.

Right. Thank you.

Your next question comes from Arun Viswanathan from RBC Capital Markets. Your line is open.

Good morning. Thanks for taking my question. Just curious how we should think about titanium dioxide volumes through the year? So, I understand there’s going to be destocking that continues maybe in – should wrap up in Q1. But, I guess, are you hearing from your customers that they’re expecting weaker demand in ‘19 is that what you’re also trying to communicate or is it just certain sectors like plastics and laminates? Thanks.

Yes, I would say, overall, we’re not hearing weaker demand for the year. I think you’re going to see a distinct difference in the two halves of the year, the first half and the second half of the year. From our standpoint, we’ve signaled that we’re going to probably have a fairly weak first quarter that I think will be demand based and a bit market share based, which we believe will recover toward the second half of the year. So, overall, I think demand if you look at it year-on-year should be fairly good and it’s just going to be a matter of timing in terms of the year versus second half being much stronger than the first half.

Okay, thanks. And just as a follow-up on fluoro, maybe you can just describe what you’re seeing in the mobile markets there? Is there any impact from any slowdown in global auto production? Thanks.

Yes, when you look at global auto production probably China is the weakest, but we don’t sell HFO in China. So that’s why that doesn’t have a big impact on us, slightly down in Europe, flattish to slightly down maybe in the U.S. So – but you got to remember, so, think about Europe for a second, slightly – flat to slightly down, U.S. even if it’s down a little bit, we’re gaining share there. So, only really about 50% penetrated in the U.S., we’re going to go to 100% penetrated by 2021. So, the ramp-up actually more than offsets any downturn you see in production. So, net-net, you’re still going to see an increase for automotive for us.

Okay, thanks.

Your next question comes from Matthew DeYoe from Vertical Research. Your line is open.

Hi, good morning. So, question for you on your inventory balance. Why is it up so much over the past 2 [ph] years? Looks like something like 50% since year-end 2016 and should the slowdown be an opportunity to harvest a lot of this new working capital?

So, it’s Mark Newman here. I think when I look at inventory, we did have some increase in finished goods, but the majority of our increase actually was in our raw materials. As we had indicated on our Q3 conference call, with the lower demand that we saw in TiO2, we had elected to make some strategic ore purchases throughout the year. So, we ended the year with, I would say, slightly higher inventory, but it’s primarily focused in raws and it’s primarily focused within that in our TiO2 ore base.

Okay. Presumably then that would be an opportunity in 2019 to move lower. But as a follow-up and maybe not to beat a dead horse here, but I’m going to try my best to do it. On the volume side for TiO2, just trying to frame like the macro backdrop on these scenarios. So, the low-end, I mean, does that imply just destocking throughout the whole year and no back half pickup or is the $4.00 or $5.05 all still reflective of some form of back half brand. Just how bad would the bad scenario be? Yes.

Yes. So, we – I will have to say our TiO2 team probably has some of the most sophisticated statistical models of all our businesses based on past experience, marking conditions, macro factors. So, our bottom end of our range and, I guess, the best way to say when we give our range for 2019, the biggest swing in that is our TiO2 volume for the whole – so as you look at our range and the bottom half of our range is really low demand. As I mentioned before, it’s probably a little conservative, but we think that’s prudent, we’ve had a very strong record of delivering against our targets and so we’re going to do that. So you – so it is a low demand case. I’m not saying it’s a high probability case, but it’s a low demand case. The higher end of our range is predicated on something that we would consider to be a good recovery in the second half, a solid recovery in the second half. So, in no cases are we saying, hey, we’re looking at a recessionary period here. We don’t believe that’s the case, but there is a big swing in our low-end case and our high-end case based on volume of TiO2 and that volume is really based on demand. So yes, it is a conservative, but we think prudent case on the bottom side.

Yes, because just looking, I mean, volumes were down 7% in ‘18 in TiO2 and if you throw like a 50% decrement, your low-end is something like down 20% and plastics is only 26% of your TiO2 business I think so, I would, yes, okay, we follow it more offline. Thank you.

Sure.

Your next question comes from P.J. Juvekar – your line – from Citi. Your line is open.

Yes, hi, good morning.

Hi, P.J.

So, Mark, you had 2 quarters of negative volume growth in TiO2, I think volumes were down 10% in 3Q and 19% in 4Q, and you just mentioned that you did not build inventory. So, I’m assuming that you 10 [indiscernible] your plans back to adjust for demand decline?

Yes.

So, can you talk about what your utilization rates are, and where are your inventories relative to past year ends? Thank you.

Yes, as Mark said, P.J., most of that inventory is in ore. We do have some pigment inventory, because as you said we slowed down fairly fast in the second half. So yes, we have some pigment inventory as well, but the majority of it is ore inventory and other raw material inventory. As we are looking at the first quarter, we are at lower utilization rates than what we would normally operate at, we think that will move up pretty quickly in the second quarter. So, I would say, we have 1 quarter that we’re in right now, which will be low utilization rates compared to the rest of the year. Rest of the year, we’ll be ramping up to normal type utilization going forward and that’s the way we’ve decided to operate with the TVS strategy.

Thank you. And then second question on your Opteon and refrigerants. Can you talk about Opteon pricing versus base refrigerant pricing, and how much of your business now is in HFOs versus the base refrigerants? Thank you.

So, from a pricing standpoint in the automotive side, we’ve told everyone, you definitely have pricing down when you’re with the bigger OEMs year-on-year, that’s part of the productivity. Our job is to keep our margins flat by driving productivity to sort of offset that, but on the stationary blends you have pricing opportunities depending on the blends. Remember, I – as I mentioned to Bob, these are proprietary blends, they’re very unique to each of your manufacturers based on the equipment they have. So, you have solid pricing opportunities there. I think there’s solid value opportunities for our customers as well from that standpoint. Obviously, HFOs will be larger than our base over time. We really don’t disclose the split between the two, P.J. But over time HFOs will be much larger than the base refrigerants, that’s our whole goal and reason for being in the refrigerant business to be honest with you. Outside of Europe and the U.S., the rest of the world is primarily a base refrigerant user. So, those will continue over time until the regulation sort of shifts them over to the HFO side.

I’m sorry, Mark, did you say that base refrigerants are flat or how is the pricing shaping there? Thank you.

The price – the volumes obviously will come down in time on base refrigerants. On pricing, it’s really a – I would say, it’s a supply/demand situation, P.J. that we have. They peaked for us in Europe in the middle of last year, they came down toward the end of the year, over time they will go up, because as quotas sort of come into play, you’re just going to naturally see those base refrigerant prices go up. But they do fluctuate fairly quickly and we saw peak in the middle of the year came down toward the end of the year, and I would say, as we walk through ‘19 toward the next quota drop, you’ll see again prices go up again at the next quota drop.

Great. Thank you.

Yes.

Your next question comes from Jeff Zekauskas from JPMorgan. Your line is open.

Thanks very much. Did Opteon volumes grow about 30% in 2018 and do you expect them to grow about 20% in 2019?

They were – Jeff, they were slightly under 30% in 2018, they were probably in the mid-20s. And I would say that there’ll definitely be double-digit as we’re going into ‘19 going forward. So, still very, very, very solid growth across the whole platform.

Can you remind me Mark, where you make Opteon now? And is the goal to consolidate all of the manufacturer into Corpus Christi over the next 18 months? And, I guess, by double-digit growth, you mean, somewhere between 10 and 20 [ph] Is that right?

Yes. You understand our code, Jeff, you’re so good. Yes, between 10 and 20, I think is where we’ll be around Opteon. Today we manufacture in China, we will move that all over to our – mostly all over to our facility in Corpus because it’s a lower cost facility and be able to utilize the facility we have in China for our – for very unique blends or unique opportunities that we have including our Foam business as well.

Okay, great. Thank you so much.

Sure.

Your next question comes from Vincent Andrews from Morgan Stanley. Your line is open.

Thank you, and good morning. I guess, I’d just like to play devil’s advocate for a moment on the idea that you can lose the share and then get it back. And, I guess, what I’m trying to get at is, I think about ‘17 as a significant stock up year, ‘18 in the second half into the first half of ‘19 is a destock year. So, I’m struggling to really have confidence in what’s the new base level of volume is that we’re going to grow off of? And so I can’t help wondering that when all this inventory settles out and prices are flat and customer inventory management adjusts, maybe there will be a little extra capacity around and maybe there is risk that you don’t get the share back. So, maybe you could help me by quantifying some of that to help us have confidence that there really won’t be supply once demand normalizes?

Sure. So, Vincent two things. One thing is, demand really grows at GDP rates over time for this industry. I mean, it’s very, very – you can see the correlation. So, from that standpoint, I think it’s a very steady demand growth over time. Supply, there is no new supply on the horizon over the next couple of years that we see. We keep a pretty good eye on this from that standpoint. So, really the way for us to regain our share is twofold. One is, the supply/demand balance that’s out there and we think that demand will outstrip supply at some point in time. And the other is our new products, our products that actually customers prefer versus other products. So, our job one is to make sure we have enough supply out there and that’s why we’re doing the debottlenecking work at our facilities to sort of basically open up another line over the next 3 years, and two, continue to work hard at new product development in the – in our Titanium Technologies business, so that our customers can enjoy higher value products going forward, that’s our – really our game plan of how we get our share back.

Okay.

So – when you do the math balance, the math balance will show you over the next 18 months that if the demand and supply are going to be pretty close.

Okay. So, just to follow up on that, is it fair to say then that if we are talking about GDP growth over time, we are talking about the next 18 months, if there is risk to the back half of the year that you don’t get as much volume as you – back as you think or is that already contemplated in the low-end of guidance?

It’s contemplated in our range. Yes, that’s why I think people have said the low-end of the range or implying in this call, low-end of the range is a bit conservative, that’s implied in that range.

Okay, that’s very helpful. Thank you very much.

Sure. Thanks.

Your next question comes from John Roberts from UBS. Your line is open.

Thank you. Are you still going ahead with your 10% capacity expansion in TiO2 across your network? Are you going to pause for a year and rethink that in 2020 instead of 2019?

No, John, we’re continuing with that, that’s a very cost-effective way for us to add capacity and we believe we will need that in 2020 and 2021. So, we need to get that done now so that we’re ready and the demands going to be there.

Okay. And then how should we think about seasonality in the back end of the year, normally the fourth quarter volume I think was seasonally slow, the last 2 years having been very representative, I would say, because we’re starting slow. Do you think there’s a reasonable chance that we’re continuing to ramp as we get into the back end of the year besides just the second half, but maybe the fourth quarter versus third quarter?

Yes, John, I think that’s possible based on the pick-up that we – that could happen with the economy in the second half. So, you could have a little bit of skew versus the normal shape, if you will, of demand normally on the TiO2 side, you could see a little bit stronger second half than normal.

Okay, thank you.

And we have a question from Jim Sheehan from SunTrust. Your line is open.

Good morning. In your free cash flow guidance, what do you assume for working capital?

Yes, we normally don’t parse out our working capital assumptions, I think has been identified on the call, we did end the year with slightly higher inventory than would be the norm. So, my expectation is, there could be some small opportunities here on working capital. Obviously, that to match that with what’s been said before, we expect a weaker first half versus the second half, so, it take – it take a little time, I would say, to work through any working capital improvement throughout the year.

Thank you. And could you comment on efforts in Europe to label titanium dioxide or carcinogen? And also comment if you would on the substitute ability of TiO2 in cosmetic and food applications?

Yes, I know that was something that came up to the REACH sub-committee that was deferred, so that decision was deferred. We’ve been very, very open about our position there. Again, this is around inhalant aspects of TiO2. So, we’re continuing to work with the regulators there and we think that’s just something that’s going to be dealt with in the proper way with the committee there. So, again, that decision was deferred going forward. In terms of the cosmetics side, that’s something that we continue to work with our customers to make sure for the most part this is about production issues, then it is final product issues. So we at this point in time don’t see an issue with that from a substitution point of view.

I now turn the call back over to Mark Vergnano.

Well, listen I want to thank everyone. We didn’t get many questions about our share repurchase, but I will say that that is an area that our board and ourselves are very aligned with, that’s why they upped our authorization another $250 million and that is an area that Mark and I are very committed on around making sure that we are giving our shareholders a great return on this company. We think it’s undervalued and we will be opportunistically using that going forward because of that. So again we thank you for all your time this morning. We really look forward to speaking with you. Both Mark and I will be on the road in the first quarter with Jonathan. So if you have any questions, we didn’t get to please reach us when we are on the road or reach out to our Investor Relations team as well. So thanks again.

This concludes today’s conference call. You may now disconnect.