Good day, ladies and gentlemen, and welcome to the Huntsman Corporation's Third Quarter 2016 Earnings Conference Call. My name is Jennada and I'll be your operator for today. At this time, all participants are in listen-only mode. Later, we will be conducting a question-and-answer session. As a reminder, this conference is being recorded for replay purposes. I would now like to turn the conference over to Kurt Ogden, Vice President, Investor Relations and Finance. Please proceed.

Thank you, Jennada, and good morning, everyone. Welcome to our third quarter 2016 earnings call. Joining us on the call today are Jon Huntsman, our Founder and Executive Chairman; Peter Huntsman, President and CEO; and Kimo Esplin, Executive Vice President and CFO. This morning before the market opened, we released our earnings for the third quarter 2016 via press release and posted it on our website, huntsman.com. We also posted a set of slides on our website, which we will use on the call this morning in the discussion of our results. During this call, we may make statements about our projections or expectations for the future. All such statements are forward-looking statements and while they reflect our current expectations, they involve risks and uncertainties and are not guarantees of future performance. You should review our filings with the Securities and Exchange Commission for more information regarding the factors that could cause actual results to differ materially from these projections or expectations. We do not plan on publicly updating or revising any forward-looking statements during the quarter. In addition, we will also refer to non-GAAP financial measures such as adjusted EBITDA, adjusted net income or loss, and free cash flow. You can find reconciliations to the most directly comparable GAAP financial measures in our earnings release, which has been posted on our website. In our earnings release this morning, we reported second quarter 2016 revenue of $2.363 billion, adjusted EBITDA of $272 million, and adjusted earnings per share of $0.38 per diluted share. I will now turn the call over to Peter Huntsman, our President and CEO.

Thank you, Kurt. Good morning, everyone. Thanks for taking the time to join us. Let's turn to slide number three. Adjusted EBITDA for our Polyurethanes division in the third quarter was $137 million. MDI urethanes delivered impressive earnings growth, with a third quarter EBITDA of $138 million. This represents an improvement of $17 million compared to the prior-year period. MDI volume growth was strong for the quarter at 5% globally, driven by strong growth in Europe and North America. Growth in Europe was across the board. In particular, we saw a strong double-digit growth within our downstream specialty MDI product range into our adhesives, composites, elastomers, as well as automotive and furniture business units. North American growth was driven by commercial insulation as we continue to see a recovery in this large market combined with the ongoing trend of MDI system substitution of alternative insulating materials. Asian growth was relatively flat. However, we grew our differentiated portfolio by 10%, while de-selecting our lower margin component business. Overall, Asian profitability increased substantially compared to the prior-year period, as tightness in the Chinese market led to significantly improved margins. Our MTBE business recorded an EBITDA loss of $1 million in the third quarter. The average C-Factor, which is an industry proxy for MTBE contribution margins declined by 50% compared to the prior-year period, from $1.45 per gallon to $0.73 per gallon. The decrease in C-Factors was primarily attributable to higher gasoline inventories and lower refined margins. The C-Factors remain low today and we expect this to have an adverse impact on MTBE earnings in the fourth quarter. During the third quarter, we experienced a negative EBITDA impact of approximately $15 million to Polyurethanes' earnings from weather related and other production outages that we expect – and we expect a $10 million negative…

Thanks, Peter. Let's go to slide eight. Our adjusted EBITDA decreased to $272 million in the third quarter of 2016 from $311 million in the prior year period. During the quarter, adjusted EBITDA was impacted by approximately $25 million from weather-related and other production outages in our Performance Products and Polyurethane businesses. Sales volumes were essentially flat, excluding the effect of the outages. Overall margins decreased by $36 million, primarily in MTBE, where the C-Factor was approximately half of what it was in the prior year and due to competitive market conditions in our Performance Products division. However, we continue to see strong EBITDA growth in our MDI business and margin expansion in TiO2 as a result of the previously announced price increases. Compared to the prior quarter, our adjusted EBITDA decreased to $272 million from $325 million in the second quarter. Overall sales prices increased by 2% sequentially, primarily due to higher MDI and TiO2 prices. However, sales volume and contribution margins combined decreased $52 million. Slide nine. This year we set a goal to generate more than $350 million of free cash flow. As of the end of the third quarter, we have exceeded that goal by producing $569 million of free cash flow year to date. It's worth noting that in the fourth quarter we expect inventory build in some of our businesses, such as in European MDI, in preparation for our first quarter scheduled maintenance of our Rotterdam facility, and, as we replenish inventories from our unplanned outages in Performance Products and Polyurethanes. As we look forward to 2017, we expect to continue our strong free cash flow generation, most notably through growth in EBITDA, stable working capital, as well as lower capital expenditure and restructuring payments. We expect pension payments to increase in 2017 due…

Thank you, Kimo. Earlier this year, I outlined three objectives for our company. The first was to build on our core differentiated businesses. I'd summarize our third quarter operational performance as follows. We're seeing attractive earnings growth in MDI, margins for key business lines in Performance Products have stabilized, Advanced Materials and Textile Effects continue to operate at a steady and modestly improving pace, and TiO2 prices are improving. We've had some headwinds such as lower MTBE margins, as well as weather-related and other one-time production outages. Our second objective was the delivery of more than $350 million of pre-dividend free cash flow for the entire year of 2016. To this end, we're generating substantial amounts of free cash flow, and are putting it to use by prepaying our debt. To-date, we've generated over $550 million of free cash flow, made debt payments of more than $250 million, including $200 million which were early pre-payments, and strengthened our balance sheet. Our third objective is the separation of our Pigments and Additives division. Let's turn to slide number 10. Earlier today, we filed an initial Form 10 registration statement with the U.S. Securities and Exchange Commission. The filing represents an important step in the progression towards the separation. The filing contains useful information and answers many questions that you've been asking. Additional information such as the company name, capitalization, additional pro forma information and other matters will be provided in subsequent amendments to the Form 10. Within the filing this morning, we indicated that we intend to spin the combination of our Pigments and Additives and Textile Effects businesses, which we referred to as SpinCo. An overview of these businesses is provided in the filing along with industry and market information, strengths of the business and an outline of strategy. Historical…

Thanks, Peter. Jennada, will you explain the procedure for Q&A and then open the line for questions, please?

Thank you. And your first question comes from the line of Laurence Alexander with Jefferies. Please proceed.

Good morning.

Good morning.

Two questions. One, can you flesh out a little bit on how you see the pension costs possibly shifting in 2017, 2018? And it sounds as if the pension will be retained at the Huntsman level. Is that correct?

Well, you mean, Laurence, in terms of the spin?

Right. Yes.

The spin companies carry with them the pensions associated with the businesses that are being spun. So, and to your first question around where we think pension contributions will go, of course, we haven't got through the actuary process yet. So we don't have specific numbers, but obviously interest rates have fallen in the last year in Europe, where most of our liabilities sit. And so we would expect that the required contribution would go up. This year, I think our pension contribution is about $90 million. My guess is that it'll be up significantly. I mean it could be 30%, 40% increase.

Okay. And then for the volume swing in Polyurethanes, can you disaggregate that somewhat between the MDI component and the balance of the business?

When you say MDI components and the balance of the business, the...

The polyurethanes component within the poly – the pure polyurethanes business within Polyurethanes as opposed to MTBE volumes or any other swings?

Yeah. Well, okay. We'll have to look at that. But if I just look at the MTBE in general, we did see a 5% growth over the prior year. And again, 8% of that growth was in the Americas, 6% of that was in Europe, and Asia was essentially flat. And so, as we look within that number, we did see a slowdown in the appliances, but that was mostly because that's typically a lower margin for us. Our automotive, composite wood, and our construction and insulation were all very strong year-over-year.

That was MDI, Peter was quoting.

Yes. Okay. Perfect. Okay. Thank you.

Your next question comes from the line of Robert Koort with Goldman Sachs. Please proceed. Robert Andrew Koort - Goldman Sachs & Co.: Thanks. Good morning.

Good morning, Bob. Robert Andrew Koort - Goldman Sachs & Co.: I wanted to talk maybe sort of the strategy on the spin-outs. I guess I recognize the massive volatility in TiO2 maybe distracts from shareholders looking at the value of the core business, but you're still going to have the ethylene and MTBE components in there. Is there something you can do to moderate the cyclicality of those businesses so that it doesn't impair the valuation you might get on your higher-performing businesses?

I think on the ethylene part, we're consuming over 1 billion pounds of ethylene as a company, in ethylene oxide and in other ethylene derivatives, and of course we consume a great deal of propylene as well, Bob. So, we are going to be subject to the cyclicality of those raw material costs one way or the other. The ethylene production that we have internally is about 400 million pounds of that billion-plus pounds of consumption that we have. It's low-cost production, ethane-fed production, and I think should that ever not be profitable to us, we certainly can shut that smaller unit down, as we have in years past. But while it continues to generate margin uplift and improvement for us, we'll continue to operate that facility. I don't see that really as a massive flywheel on the overall cyclicality and profitability of the company. On the MTBE side, if there was some way that you could look at MTBE, it's just a stand-alone facility that was out from the rest of our portfolio. I think that we probably would have some more options there. But, Bob, as you know, that's a facility that produces MTBE as a by-product of propylene oxide. And I think we've tried to be, particularly starting about a year ago, as transparent as we could, educating investors as to what are the components of volatility there and what drives the MTBE markets. As tough as MTBE looks, as we look at this on a combined propylene oxide MTBE sort of a basis, I expect this year that our EBITDA margins in that PO/MTBE combined business is going to be around somewhere in the mid-teens of an EBITDA to sales. So, as we look at that I would just remind you that when we look at MTBE, if you take that and you put it in with the propylene oxide, the downstream advantage that propylene oxide adds to the Polyurethanes business, I think it probably doesn't provide quite the volatility that it would appear when you break it out. But, nevertheless, as you compare it to where we were a year ago, it is a volatile component of our earnings. Robert Andrew Koort - Goldman Sachs & Co.: And then, Peter, if I might follow up. I don't believe I heard on MDI you talk about the opportunistic margins you might be making in the short run from some competitor problems. Is that just being diplomatic, or is that something you guys won't realize from a short-term basis?

I think that we've realized some short-term basis on – particularly on the Asian side of the business. But, as we've said, most of our growth and earnings in Asia have come about through our downstream specialty side of the business. We're trying to take as much as the component – the more commoditized end of our Asian MDI business and shifting that over to the more specialty side of the business. So, I'm not sure that we've seen a huge uplift because of various outages that have occurred in the industry and I would expect some of those benefits to moderate, perhaps, in the fourth quarter and first quarter over the course of the next couple of months here.

Bob, as it relates to an outage in Asia by one of our competitors, you remember that our Asian facility is running full out, and so when we look at year-over-year volumes in Asia, we were actually down a little bit. So we weren't grabbing market share because of that outage. Certainly, polymeric MDI margins did rise year-over-year because of that outage and other reasons. But, it wasn't a volume drill in Asia for us. We didn't grab market share. Robert Andrew Koort - Goldman Sachs & Co.: Got it. Thanks very much.

Thank you, Bob.

Your next question comes from the line of John Roberts with UBS. Please proceed.

Thanks and congrats, Kurt, on the new CFO role.

Thanks, John. I look forward to working with the talented people at Pigments and Additives and Textile Effects more closely.

He's already harder to live with.

And Peter, you're named on the board, are you Chairman of the SpinCo?

Subject to some final decisions and so forth, at this point that will be – that is our plan going forward.

Okay. And then there's some language about being able to exchange the retained SpinCo stock for debt. Could you maybe elaborate a little bit on that?

That is just the – I think you've seen it, where there is a equity for debt exchange structure that can be used on a tax-free basis, within a certain time period of the spin, and we will have the option to avail ourselves of that opportunity.

Okay. Thank you.

Your next question comes from the line of Frank Mitsch with Wells Fargo Securities. Please proceed.

Good morning, gentlemen, and let me also echo my congrats to Mr. Ogden. But also in his new role, let me go ahead and ask a question. In the slides, you're looking at a normalized EBITDA level I think of $500 million, of which 80% is going to be Pigments and Additives. So $400 million. What would be your estimation as to when you could reach normalized levels in that business? Obviously, TiO2 is churning upwards. So I was just curious as to what sort of timeframe folks might want to think about there.

First of all, thanks, Frank, for the kind words. I think that as you have heard from us in the past, we won't put a time line on when we expect to reach that normalization. Of course, there are a number of variables that will feed into our ability to hit that historical normalized profitability. That said, with the rise in TiO2 prices that is going to be the primary driver, which lifts this business to that. And so it'll be conditioned on the market environment that we find for particularly titanium dioxide. And so to the extent that that continues to be strong, as we have seen here over the last few quarters, then we would expect to get there sooner rather than later, but no specific time horizon.

If I can just add as the old CFO to those comments, what's interesting, Frank, and we've pointed it out over the quarters that that normalized EBITDA that we're showing is really based on an industry utilization rate of the mid-80%s, which we're at right now. So, it isn't predicated on getting back to some sort of utilization rate threshold. We are already at that normalized utilization rate level today. It is really a question of how quickly will prices rebound over the next few years.

And as the old CEO and as perhaps the incoming Chairman, again, I think that when we talk about that bridge as to where we are today and where we're going, if you just look at it on a functional TiO2 basis, kind of if you assume that we're kind of running today on this annualized run rate of around $160 million, if you look at that uplift, you need about $500 a ton. And I would just remind you that if we went back to first quarter of last year, which were pretty bad prices for TiO2, on average, globally. If we go back to where we were the first quarter of last year, you are half way there from where we are today, halfway there from where we are today. So, I don't think, we are trying to be very realistic here. We're not saying that we need to go back to where we were a few years ago, anything close to what record peaks were. I do think that it's quite realistic and when you look at the pricing momentum that we've seen on average across the company over the last couple of quarters, we've seen a better than $200 per ton increase that we've realized just in the last two quarters.

All right. Terrific. That's very helpful, and I know that Kurt is going to say a lot more when he is just reporting to Simon, so I look forward to that. And if I could just follow up on the MDI outage question. Peter, you mentioned that you are not seeing a ton of benefit in Q4, but is there a chance that as contracts reset in Q1 that that could be a source of upside for you based on expectations of how long the outages will last on MDI?

You're talking about particularly in Asia?

Yeah, Asia and Europe. Yes.

Yeah. I would think that it might, but I'm not really counting on it. I'm counting more on the continued growth of our downstream differentiated to 70% of our business that drives on improvement of economics in margins because of its – the value that delivers to the customers. That's not to say that we're not going to push as aggressively as we can for margin expansion in the component side of the business, but it is a smaller, volumetrically it is a much smaller end of our business on the MDI side. But, yes, we'll try to take as much as we possibly can.

All right. Terrific. Thank you.

Thank you.

Your next question comes from the line of James Sheehan with SunTrust Robinson Humphrey. Please proceed.

Morning. Want to talk about your very positive working capital investment. That's very impressive here. I was just wondering if you could break that out between TiO2 versus Polyurethanes or Performance Products. How much of that is repeatable with that sort of execution, especially after TiO2 is separated?

Well, we continue to have initiatives in all areas of our business to reduce the supply chain. So, we will see incremental benefits, I think, over the next few years. I think we've made a pretty big step change here, and I wouldn't expect that in 2017 you'd see this sort of working capital improvement unless you see raw materials continue to fall. I would expect that we will have a fairly flat working capital view for 2017, again, assuming that energy prices stay at the levels they are today.

Okay. Great. And, Peter, given your comments on Polyurethane benefits you're seeing from outages maybe falling off over the next couple of months, what chance do you see of full-year 2016 EBITDA getting back to 2015 levels, if any?

For MDI?

No. The entire business.

For the entire Polyurethanes business?

Your total Huntsman EBITDA looks like it may be falling short of 2015 levels at this rate. What is your view as to how much lower 2016 EBITDA will be versus 2015 right now?

I'd be giving a very specific number in the fourth quarter on guidance, and given the volatility, particularly around MTBE, I'd be reluctant to do that. But I think as we look at our fourth quarter, MTBE is the variable there. I think that we're expecting, as I tried to give division-by-division guidance of flat to perhaps seasonally down in some of the divisions and so forth, I think that on a relative basis on the typical seasonality of our MDI business, I think it's going to be stronger than we seasonally would see. But nevertheless we will see a seasonal impact on most of our businesses.

Terrific. And on TiO2 pricing, it looks like you're continuing to push for more here. Given some of the comments of your downstream coatings producers, it looks like demand is fairly muted there. What are the prospects for getting higher price in that type of environment?

Again, I think we went over some of these same sort of concerns the last conference call when people were questioning if we'd be able to get any price increase when some of the largest TiO2 consumers were saying that they weren't seeing price increases, nor were they accepting any price increases, and I think we said last conference that every one of our customers were going to be going up. I think that as we see the needed economics in the TiO2 industry, the needed improvement of margins and cash flow generation, we also see the pressures of raw materials and ores that have gone up in the third and fourth quarter time period. I think that the environment is such that we are going to continue to push very hard to have margin recovery take place. I'm quite pleased with what we've seen in the last two quarters of price increases, but as I look at our average selling price globally in the third quarter, it's exactly where we were in the third quarter of last year, which were pretty tough – well, very tough market conditions for us. Now, our business has improved on an annualized basis by nearly $130 million, $140 million third quarter last year versus third quarter this year. A little bit of that's growth, a little bit of that's mix, but mostly all of that is due to the cost cutting that we've implemented. So when we look at the cost – or, excuse me, the price – the selling price of TiO2 and the margin of TiO2, it still has quite a ways to go until we see any sort of margin that I think we would call anything close to normalized, or even justifiable for reinvestment back in that industry. So, again, happy with where we've been, but, we've still got quite a ways to go.

Jim, maybe I can give you some near term guidance relative to TiO2 pricing. I think the coverage of coatings tends to be a little bit U.S. centric and the TiO2 price increases have been pushed off to the first quarter in the U.S., but non-U.S. prices will rise in the fourth quarter, and they will be substantial. And of course, with our mix of business, with a big European business, expect prices to rise sequentially third quarter to fourth quarter without a U.S. price increase.

Appreciate the help guys. Thanks.

Thanks.

Your next question comes from the line of P.J. Juvekar with Citi. Please proceed.

Hi. Good morning. This is Eric Petrie on for P.J.

Hello.

First question is on TiO2. Could you give us an update on Huntsmans' inventory days? And then second, you commented that raw material or pricing pressure is occurring in third quarter and fourth quarter. Is that across the spectrum? Or are you seeing more price inflation in chloride versus sulphate ore?

Our inventories right now for Huntsman are – I would say that they're in the mid-40s, the number of days. The industry is probably in the mid-50s. When I say probably, there's no exact published data on that and frankly we don't track competitor inventories. So I'm just assuming that that's pretty typical with demand and so forth. We are seeing across the board pressure taking place on the ore side, the largest – volumetrically, the largest ore we buy, ilmenite, we've seen that go from a $100 a ton and upwards of a $120 to a $140 a ton. On a contained basis, that ilmenite ore still is substantially more cost competitive to us than rutile or chloride slag or even sulphate slag. And I would also remind you that when we agree on a price, there's typically about a quarter if not two quarters of time until we've accepted that price to the time that cost actually hits our bottom line. So, I think that we've got a pretty good supply chain of raw materials. I think we've got a very competitive supply chain of raw materials. And we have time to be able to, I believe, implement price increases to offset those rising raw material pressures.

Just to put a dollar amount on that ilmenite increase, so that $100 to – whatever you said, Peter, $130 a ton to $140 a ton ilmenite price, that's roughly a $10 million annualized increase in our ore costs.

Helpful. For my follow up, do you expect overall MDI demand growth to slow following weakness noted by auto OEMs and appliance manufacturers, or are you tilting your portfolio to more specialty and consumer end markets to offset that?

As I look at our year-on-year improvement, a lot of what we're doing is – the biggest area of growth that we're actually seeing globally in the automotive area for MDI is – the biggest area of growth on a percentage basis is Asia. And so as you think of the Asian consumer buying a more quality oriented car, a higher valued car, typically you're going to see a higher valued automobile, a better automobile, if you will, using MDI rather than TDI applications. And so, we've seen double-digit demand growth in our Asian auto sector over the prior year; seeing strong single digit growth in Europe and we've seen a decrease in the Americas. So, you're right. In the U.S., we're seeing a decline in demand from a year earlier in the automotive area, but I think when you take the global picture of year-over-year automotive demand for MDI, we're up about 8% or so.

Thank you.

Your next question comes from the line of Hassan Ahmed with Alembic Global. Please proceed.

Good morning, Peter.

Good morning, Hassan.

Peter, I wanted to revisit the ilmenite ore pricing dynamics. You obviously talked about pricing moving up to $130 a ton, $140 a ton from $100 a ton. Now, as I sit there and look at some of the announcements coming out of China, in particular the Chinese have come out and said that they're looking for aggressive steel production cuts. In line with that, obviously, iron ore production is going to go down, which means magnetite production is going to go down. So it theory, that should imply that one could see significant ilmenite production cuts as well. Now, is there a fare on your part that despite a $30, $40 a ton price hike, if these production cuts do take hold, ilmenite could move significantly up, above and beyond the $30 to $40 we've already seen?

I would think that there could be more upward pressure on ilmenite. Again, as you think about ilmenite, it has about half the contained TiO2 raw material in it as some of the other slags and raw materials. So when I talk about – when you talk about $130 per ton, you're talking like a $260 a ton competitive ore comparison to a $400, $450 sort of an ore. But, you're absolutely right. As you see demand for iron ore and the steel industry go down, you are going to see the amount of ilmenite ore, which is the byproduct of the iron ore, you'll see that tighten as well. But I would remind you that we source our ilmenite from Africa, from multiple continents and so forth, and I think in comparison to the other ores, ilmenite is going to continue to have a very much of a cost advantage to the other ores. And as I look at the inventory that is on hand, I look at the number of suppliers around the world of ilmenite ores versus chloride and various slags and so forth. I think that ilmenite is going to be the cost leader and the preferred raw material for some time to come.

Very good.

And I think, Hassan, just if I could add, I think ilmenite producers have been producing at below their marginal cost. It's been pretty tough market for them. And so they're getting really back to kind of a breakeven level. There is some – I don't think that this price pressure on ore is going to be unique to sulphate ilmenite ores. I think there is an expectation out there in the marketplace that higher-grade ores for chloride will likely move up with TiO2 pricing.

Understood. Now, sort of moving on to the TiO2 pricing side of things, you guys mentioned sequentially Q3 to Q4 you will see decent price gains in the non-U.S. markets. But what should we expect as far as the U.S. market goes? Should we expect sort of sequentially flattish pricing in the U.S.?

Yes.

Perfect. Perfect. Thank you so much, guys.

Thank you.

Your next question comes from the line of Kevin McCarthy with Vertical Research Partners. Please proceed.

Yes. Good morning, gentlemen. Kimo, would you comment on any expected tax-related synergies or dis-synergies as you proceed with the spin domiciled in the UK, please?

Sure. And welcome to the name, Kevin. It's good to have you back.

Good to be back. Thank you.

I think, from a spin standpoint notwithstanding, a domicile that will be UK based, we wouldn't expect any sort of inversion-type benefits with that transaction from a tax standpoint. The taxes in aggregate for the two businesses will look an awful lot like they do on a consolidated basis. Now, of course, there are NOLs associated with the countries that TiO2 manufactures in. And they will enjoy those benefits going forward just like they do today.

Very good. And then second question if I may on cash flow. It looks like your CapEx is coming down. Maybe pension comes up a bit. I recognize it's early to comment on 2017. But as you look into the crystal ball, do you have reason to believe free cash flow would be materially better or worse were it not for the spin off, if I look at Huntsman stand-alone?

Well, if you look at sort of Huntsman together as a consolidated entity relative to 2016, I think we're not going to have the same working capital benefits in 2017 that we had in 2016. But I think generally, you pick your EBITDA at $400 million of CapEx, I think we're going to have a lot less restructuring and little bit more pension. I think we're still going to have substantial free cash flow, but it won't be at the mid $500 million level that we're at today because of working capital.

Understood. Thank you very much.

Your next question comes from the line of Ivan Marcuse with KeyBanc Capital Markets. Please proceed.

Hi. Most of my questions have been answered. Just have a couple of quick ones. And if I've missed this, I apologize. But where MTBE stands today, where does – in the fourth quarter, would be that a year-over-year headwind?

I think that the – we'd see MTBE on a year-over-year basis would be south of where it was in the fourth quarter. I think on a sequential basis, again, if C-Factors remain where they are today, it would be a few million, singular million dollars worse in the fourth quarter than in the third quarter.

Ivan, the comparison period, so fourth quarter 2015 MTBE made $5 million and, of course, Peter's referencing that negative $1 million into the third quarter.

Okay. Great. And then if you look at the, on the performance of the business that you sold at $24 million in EBITDA, is there any sort of seasonality to that or would that be pretty much flow through at a pretty equal level through the quarters? Will that be in discontinued operations in the fourth quarter?

No. It won't be discontinued and it's a fairly stable business, not lots of seasonality other than the typical European December you usually see.

August and December.

And then with the $225 million, is there any tax leakage?

A little bit. We should net $200 million after taxes and transaction costs.

Okay. Great. Thanks for taking my questions.

Operator, why don't we take one more question? I think we're coming up to the top of the hour.

Your next question comes from the line of Roger Spitz with Bank of America. Please proceed.

Thank you very much and good morning. I know it's early days, but would SpinCo likely raise debt and give a dividend back to Huntsman Corp upon the spin and what might you think SpinCo leverage and ratings might be?

We're just going through that process now, Roger, and so in the Form 10 we really didn't discuss the capital structure. That will come in the coming weeks from an amendment to that Form 10. But what we have said is it will be modestly capitalized and maybe the right way to think about it is roughly what Huntsman Corporation is today, so forth three-and-a-half times leverage. Maybe that's the way you ought to think about SpinCo. So there will be some modest amount of debt: bonds and bank, and Huntsman Corporation will receive that dividend back. In addition, as we've mentioned, Roger, we will have a retained interest and we are asking the IRS for the opportunity to have a greater than a 20% retained interest in SpinCo upwards, as Peter said, of 40% and the use of proceeds as we divest of that retained interest will be used to continue to pay down debt at Huntsman Corporation. So there's really two means by which we will receive proceeds from SpinCo, both debt incurrence at SpinCo at the time of the spin and then subsequent sell down of our retained interest.

Thank you for that. And lastly, just the missing MTBE for Q2 2016 EBITDA.

Q2 2016 MTBE EBITDA is $19 million.

Perfect. Thank you very much.

Good talking to you, Roger.

Jennada, this is Kurt. We want to thank everybody for joining us on the call this morning, and to the extent that you have additional questions, please feel free to reach out to the Investor Relations team. Thanks, again.

Ladies and gentlemen, that concludes today's conference. Thank you for your participation. You may now disconnect. Have a great day.