Welcome to the Olin Corporation’s Fourth Quarter Earnings 2014 Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] I would now like to turn the conference over to Joseph Rupp, Chairman and CEO. Mr. Rupp, please go ahead.

Good morning. Thanks for joining us today. With me this morning is John Fischer, our President and Chief Operating Officer; John McIntosh, our Senior Vice President of Chemicals; Todd Slater, Vice President and Chief Financial Officer; and Larry Kromidas, our Assistant Treasurer and Director of Investor Relations. Last night, we announced that income from continuing operations in the fourth quarter of 2014 was $12.8 million or $0.16 per diluted share, which compares to $24.7 million, or $0.31 per diluted share, in the fourth quarter of 2013. Sales in the fourth quarter of 2014 were $499.8 million, compared to $562.1 million in the fourth quarter of 2013. Fourth quarter 2014 results included $11.2 million of pretax restructuring charges, primarily related to the decision to permanently close approximately 50% of our chlor alkali capacity at the Becancour, Canada facility. Fourth quarter of 2013 results included $1.4 million of pretax restructuring charges, a pretax gain of $6.5 million associated with the sale of a joint venture interest, and $4 million of favorable tax adjustments. In 2015, we expect segment earnings in all three businesses to improve compared to 2014. In Chlor Alkali, we believe that we have reached the trough of this cycle. And as a result, we expect a meaningful year-over-year improvement in Chlor Alkali Products earnings which will be generated by improved ECU netbacks and higher volumes in hydrochloric acid, bleach and potassium hydroxide. In Winchester, while we forecast lower ammunition shipments in the first quarter of 2015 when we compared to the first quarter 2014, we expect ammunition shipments for the full year of 2015 to be similar to 2014. We also expect that the cost reductions from our ongoing centerfire ammunition manufacturing relocation project will result in improved Winchester segment earnings in 2015, when compared to 2014. Chemical Distribution…

Thank you, Joe. Let me begin with Chlor Alkali. Demand for chlorine in Olin’s system continued to be uneven during the fourth quarter. Fourth quarter 2014 chlorine shipments declined 7% compared to the fourth quarter of 2013 as several of our larger chlorine customers had planned an unplanned maintenance outages. The uneven demand was reflected by the level of chlorine shipments to major end-use customers. Fourth quarter 2014 chlorine shipments to vinyls customers decreased by 36% compared to the fourth quarter of 2013, while shipments to titanium dioxide customers increased 38% and shipments to urethane customers were similar to the fourth quarter of 2013. Fourth quarter 2014 caustic soda shipments were also similar to the fourth quarter of 2013. As we had previously discussed in late June, we experienced an incident at one of our two Chlor Alkali production units at our Becancour, Canada facility. The other unit has continued to operate at normal rates. The diamonds unit which represents approximately 50% of the facility’s capacity did not operate in the third and fourth quarters and we have announced our plan to permanently close this capacity. As a result, our system-wide capacity has been reduced by approximately 9%. After giving consideration to this closure, our operating rate for the fourth quarter of 2014 was 84%. During the fourth quarter of 2014, the impact of planned and unplanned customer outages reduced our operating rate by approximately 3 percentage points. Fourth quarter 2014 shipments of hydrochloric acid increase 4% compared to the fourth quarter of 2013, and potassium hydroxide shipments increased 14%. Fourth quarter 2014 shipments of bleach were similar to the fourth quarter of 2013 but full year 2014 bleach shipments improved 2% compared to the 2013 level. In addition to the year-over-year growth in bleach, hydrochloric acid full year 2014…

Thanks, John. First, I’d like to discuss the balance sheet and the 2014 cash flow. Cash and cash equivalents at December 31, 2014 totaled $256.8 million compared to $307.8 million at December 31, 2013. During 2014, working capital employed increased by approximately $62 million, the increase primarily reflected the anticipated higher levels of inventory. Winchester’s year-end inventory was increased by approximately $30 million, because it was able to replenish inventories in 2014 and that it has liquidated in 2013. Capital spending in the fourth quarter of 2014 was $22.1 million and for the full year it was $71.8 million. Full year depreciation and amortization expense was $139.1 million. By comparison capital spending in 2013 was $90.8 million and depreciation and amortization expense in 2013 was $135.3 million. In 2015, we forecast that capital spending will be in the $120 million to $130 million range and that depreciation and amortization expense will be in the $140 million to $145 million range. We believe that the maintenance level of capital spending will be in the $70 million to $80 million range. During the fourth quarter, Olin repaid $13.2 million of debt that matures. During 2015, there will be $50.4 million payments on maturing debt. During the fourth quarter of 2014, we repurchased approximately 830,000 shares of Olin’s stock at a cost of $20.1 million. A total of 2.5 million shares have been repurchased during 2014 at a cost of approximately $64.8 million. There were approximately 6.1 million shares remaining under the April 2014 8 million share authorization. And as Joe said earlier, we intend to continue to repurchase shares on a consistent and steady and opportunistic basis. Now turning to the income statement. Selling and administration expense decreased $13.8 million in the fourth quarter of 2014, compared to the fourth quarter of…

We will now begin the question-and-answer session. [Operator Instructions] Our first question comes from Frank Mitsch of Wells Fargo Securities. Please go ahead. Q – Sabina Chatterjee: Hey, good morning. It’s Sabina Chatterjee in for Frank today.

Hi, Sabina. Q – Sabina Chatterjee: Hello. Regarding your commentary on Chlor Alkali, having reached the trough of the cycle with chlorine now leading increases, can you just give us a little more color on what you are seeing in the marketplace, maybe in terms of supply and demand from various end-markets?

Sabina, this is John McIntosh, our system – our system from a chlorine standpoint is tight. Even though, early in the fourth quarter we saw some customers destocking inventory, we’ve seen recovery in a lot of the market segments chlorine consuming market segments as we entered into the first quarter. And, we really believe that that recovery of demand and the expected 4% or 5% capacity – industry capacity that will be out of service for maintenance turnarounds in the months of February and March is going to create a supply demand balance that leading into the spring and the beginning of seasonal chlorine demands is going to be an attractive backdrop for us. And we believe that at that point in time, we will see everyone else in the similar position worrying with a real tight supply demand balances. So that’s the basis for our forecast of continuing improving dynamics on the chlorine molecule. Q – Sabina Chatterjee: Okay, and then, with the Becancour closure, you’ve taken out about 9% of capacity, how much of that volume would you say is lost business versus spread across the existing asset base and have you factored that into your 80% operating rate for 2015?

There is no lost – no lost sales associated with that capacity, when we look at our operating rate forecast for the coming year, we expect to be operating in the high 80s for the entire year of 2015 and that’s consistent with the capacity that we currently have employed. The capacity we took out at Becancour was really swing capacity for us and we took it out and somehow we are in a position where we are able to operate all of our facilities at high operating rates which is the most efficient situation for any Chlor Alkali producer to be in. Q – Sabina Chatterjee: Okay, terrific. Thank you.

Thank you.

Our next question comes from Christopher Butler from Sidoti & Company. Please go ahead.

Hi, good morning everyone.

Good morning.

I was hoping you might offer a little bit more color on the confidence that you have on the pricing environment for Chlor Alkali and the timing there. It’s been a while since we’ve seen chlorine price increases. So it that similar as far as the timing for you as the caustic soda price increases that you have had in the recent past?

I added one other comment to what – to the answer I just gave to the previous question. 2014 total production for Chlor Alkali was as high as the industry had seen since 2008. So we believe that we are at the endpoint of a trough and that we will see 2015 start the recovery. We believe it will be a chlorine led recovery which is traditional when you look at recoveries from past troughs in our industry. However, there is an alternative scenario which some people believe might be likely based on the change in oil pricing and that is the change in oil pricing will really put pressure on exporting chlorine derivatives from the US and if that happens, we believe we’ll see caustic supply be under pressure, which I believe would facilitate improvements in caustic pricing. So we believe we are in a position where depending upon how 2015 plays out, we will have pricing leverage on one part of the molecule or the other.

Thanks, and with the oil prices down, could you talk about hydrochloric acid and your thoughts on that part of the molecule as we look to 2015?

I can’t – when we look at demand across all the segments, oil being one of them, oil sticks out as the one in which there is some reduction in demand. We’ve seen a reduction in rig counts, but I think it’s important to understand that in the HCL, into the oil patch market segment, not all of the shale plays are created equal. There is some that have much higher cost to extract than others. We believe that the shale plays that we are concentrated and focused on based on the locations of our plants, and the oil field services companies that we are working with are the more competitive lower priced to extract plays that exist. So, while we understand that oil pricing will [indiscernible] with demand in this segment, we don’t think it will be anything significant and we believe that if you look across the other demand segments for HCL, food and others that they continue to be strong. So, that’s one side of the equation. On the supply side of the equation, we continue to believe that supply or overcapacity is not a phenomenon we are going to see at least through the first quarter, the byproduct production facilities have not really started up, there is still outages that are putting a dampening impact on byproducts supply. The – some of the HCL burners that were scheduled to come online in the early part of 2015 has been announced that they are delayed. So on the supply side, we don’t see negative impact as well as we look into the first half of the year.

And just finally, with the increase in capital spending, now that you are shifting to bleach production in Becancour, is there anything else that you planning on doing in 2015 that has that number up?

No, it’s continued spending on Oxford as we wrap that up and there is a little bit of de-bottlenecking around some of the HCL and bleach and the Chlor Alkali system and other than that, it’s more standard maintenance level of spending.

I appreciate your time.

The next question comes from Herbert Hardt with Monness. Please go ahead.

Thank you. Could you give us an idea of the percentage of production and chlorine and cost that’s gone into your upgraded products now, would you expect it to be a year from now?

I think in 2014, about between 20% and 25% of our chlorine went into the co-products and we’ve talked historically that we have an objective to get that up to between 30% and 35%.

So we can reach that by the end of this year?

I would say that’s probably not likely, it would probably be in 2016.

Okay. Thank you.

Thank you.

Our next question comes from Don Carson of Susquehanna Financial. Please go ahead.

Yes, thank you. I want to go back to your view of the cycle, John. You mentioned that, you see the molecule going up in either scenario. But, would it be fair to say that a stronger and tighter caustic market is better for Olin?

Well, we’ve always said that, as a merchant caustic player that we are better served when caustic is tight. But, as we continue – that was a comment that was true and historically and still to some extent it’s true, but what’s moderated that a little bit, Don, I believe is, as we move more and more chlorine into co-products, which in all cases are really premiums to what we would sell chlorine at if we were selling it in the merchant market. We’ve made ourselves less concerned about which molecule is strong, because we have the ability to participate in value-added chlorine derivative products and we have the historical base of caustic volume that we sell into. So, we are comfortable in either situation.

Okay, then switching to Winchester, just a question on the backlog and how firm it is. Back, when you had those $400 million backlogs, did any of that disappear, because it was double-ordering or were those all good orders and what does that imply for the quality of the backlog today?

I think, ultimately, most of that backlog became good backlog, Don, and I think the backlog we are looking at today as we analyze it looks like good backlog. I can never guarantee you that somebody isn’t going to come in and change in order down or up. But generally speaking, the backlog looks deliverable.

All right, thank you.

The next question is from Jason Freuchtel of SunTrust Robinson Humphrey. Please go ahead.

Hey, good morning. How much of the caustic and chlorine price increases are included in your 2015 EBITDA guidance? And can you also provide some greater detail on what will drive operating costs higher in the Chlor Alkali segment in 2015?

I believe our cost comment was relative to the first quarter and we have some shutdowns – shutdown costs in the first quarter that we didn’t have in the fourth quarter and that’s the cost delta that we were referring to. In terms of pricing, that we have forecast on our numbers, we don’t typically comment on what we expect to see. We do expect to see improvement in chlorine and caustic pricing and improvement in the overall ECU as we compare 2015 with 2014 actual results.

Okay, and how have Chlor Alkali plant outages in Europe impacted domestic demand and pricing you are seeing? And how would the industry domestic demand supply environment be impacted if the West Coast ports went through with a shutdown?

The first question about Europe, let me speak to that. What we have seen is that, caustic, although caustic has looked at globally, it’s also looked at regionally and one of the areas where caustic pricing has been the strongest is really been in the northeast, northeast coast of the US and that is driven almost entirely by the fact that what’s gone on in Europe’s Chlor Alkali industry has really been a situation in which there isn’t caustic to export from Europe to North America. And so, that’s created a situation where pricing in the US northeast has been more positive than maybe it’s been in some other regions. So, we have seen that impact and we have seen some regional price strength because of that. It hasn’t translated necessarily to other regions because import or exports from the Far East to the West Coast continue. And, I don’t know that I have a comment to make on strike – the strike comment about the West Coast. I think typically, the ports that typically serve us both caustic, both chemical imports are not always the same ports that are tied up with these huge container ships. But I just don’t really know how to answer that question without doing more study.

Okay, and then turning to Winchester briefly, can you explain the shift in Winchester demand throughout 2015? It sounds like ammunition demand for 1Q 2015 may be weaker year-over-year, but demand in the second half will actually be better than environment in 2014 that was experiencing normalizing demand patterns. Is that the case?

I think you got a scenario where you had the business filling up inventory or replenishing inventory that is virtually complete at this point in time and that we are going to go back to a more typical seasonal demand which would suggest that the second half of the year would be stronger and we do expect as we’ve said that there is continuing growth in this business.

Okay, great. And then, lastly, how should we think about cost savings from closing your Becancour facility?

I don’t think we’ve commented on that at this point in time and think what we’ve essentially said is, that we right-sized the business for the geography in which should operate and the plants going to be focused on bleach and hydrochloric acid.

Okay, great. Thank you.

The next question comes from Arun Viswanathan of RBC. Please go ahead.

Thanks guys. I just wanted to go back to the guidance a little bit and tie it back with the first quarter. So if I go through the numbers, it looks like you are going to be around $0.20, $0.25 in the first quarter and then 2015 looks like it's going to be a little bit like 2014. I mean, so, are you guys calling for a much stronger back half and similarly, if I go through the ECU realizations to get to - you did about $505 million or so in 2014, would you say that that should be materially higher in 2015? And that's why you are saying that you've reached a bottom and the cycle should be up from here?

I think there is two driving factors about the way we see the year unfolding. One is, the comments that were made about ECU pricing, where we expect them to improve sequentially coming out of Q4 and that we think as John said there is positive momentum for pricing throughout the year and then the comments we just made on Winchester where we think we are really looking at the low point and at the front-end of the year and we see improvement as we move through the year.

Okay, and then just so I am completely clear on this, because there wasn't a $25 or so realization in caustic the fourth quarter. Do you expect any of that to come through in the first quarter and if not, how many more price increases do you think would be announced in the coming months in order to get these prices through?

What we said that there was $30 of caustic price increases cumulatively recognizing index in Q4 that we said would benefit us in the first and second quarters of 2015.

Okay, so, I guess, most of that is in the second quarter and that's why your - that combined with the low Winchester guidance in the first quarter is why you see earnings improving through the year?

Yes, we expect to see some realization of the caustic in Q1, but the majority in Q2. So your comment is right.

Okay, and then the reason I am asking is because it sounds like there has been some pressure on export markets in caustic, are you seeing that, I know it's less of your volume, but are you seeing that? And then secondarily, I am also struggling with the fact that your costs will likely be lower because of lower operating cost. I know that natural gas isn't a large part of your system, but I am just curious as to why that's not a bigger benefit for you guys. Thanks.

On the caustic export market, it’s not a big market that we participate in, but when you look nationally and you look at numbers through the end in November which is the latest numbers we have. In aggregate, 2014 looks a lot like 2013 did in which net caustic imports were about 1.5 million tons. That’s comprised of about 2 million tons of exports and about 0.5 million of imports. So the US continues to be on a 2014, compared to 2013, a net exporter of 1.5 million tons of caustic. We don’t see that trend changing in the future. As a matter of fact, some of the volume that typically originated in Europe and found its way into South America maybe volume that has picked up logically by US shipments. So, if anything the bias would be towards that net number being higher.

Okay and then anything on the cost side you could help us with? A –Todd Slater: I have mentioned that we had a turnaround in the first quarter and that was a comparison of costs from Q4 2014 to Q1 2015, but that’s the only comment we made about costs.

So outside of the turnaround, would you expect your operating costs to be lower on lower energy prices? A – Todd Slater: We had not made a comment around energy. Other than that, we’ve said we are not – our system is not fully exposed to gas like many of the Gulf Coast producers.

All right, okay. Thanks.

The next question comes from Edlain Rodriguez of UBS. Please go ahead.

Thank you. Good morning, guys. Joe, a quick question for you. I mean, you’ve talked about being interested in strategic acquisitions. So besides the one big asset that's out there from Dow, are there other assets available that you might be interested in that could fit into your portfolio, essentially, where are you seeing opportunities for strategic acquisitions?

There are other assets available that we would have an interest in.

Okay, that's clear. And just one quick question on caustic soda prices, I mean, we've had some increases in November, December and then the market seems to have stalled a little bit, but you seem to be – I mean, IHS is looking at prices flattish to down going forward as chlorine prices go up, but you seem to think that caustic prices can go up. But how confident are you that could be the case and where could IHS be wrong?

Well, I think that, it’s not fair to say that that we believe both price – caustic – prices on both molecules are going up. We believe that a typical chlorine-led recovery coming out of a Chlor Alkali industry trough is one in which chlorine pricing leads and at least initially gives pressure on caustic pricing because of the improved operating rates. And we are not advocating a position where you would see price improvements in that kind of an environment on both molecules.

Okay, that's what I thought. Thank you very much.

Thank you.

Our next question comes from John Roberts of UBS. Please go ahead.

Thanks for taking my questions. Overseas chlor alkali producers have power based on oil, it sounds like you don't think lower oil prices will allow them to be more competitive in some of the export markets and I’m curious as to why that would be?

The perspective I have on that is, yes, they will be, their competitive position will be improved because of electricity pricing. But I honestly believe that when you look at Europe, there has been and will continue to be capacity rationalization as the European mercury sale component of their chlor alkali industry is rationalized or is converted. And that’s going to really reduce the amount of product that the European community has the export even at an improved competitive position, because they still have a freight cost of moving it somewhere and that doesn’t offset that improvement in their overall cost position. We believe that the Asian economies will see also some improvement in their operating costs. But they are currently operating, in some cases below an acceptable return number and we believe that at least in some of those economies they are not going to be transformed just because of lower oil prices on some temporary basis into being able to take advantage of that by exporting to other markets.

Thank you.

Our next question is from Dmitry Silversteyn of Longbow Research. Please go ahead.

Good morning gentlemen. Couple of quick questions. First of all, just out of curiosity, your chlorine shipments were down, I think you said 8 -7% year-over-year and your caustic was flat. I think you are using between potassium hydroxide and hydrochloric acid and bleach roughly the same amount of chlorine and caustic. So where did you get the extra caustic from, since your chlorine - I'm assuming you run your plants to chlorine demand. So it would sound like it would be down as well as chlorine?

The one big change, Dmitry was we talked about the increased year-over-year in hydrochloric acid which liberated caustic and the other is just simply a change in inventory position on caustic.

Okay, okay. Got it. Secondly, your Winchester projections for 2015 where you expect flattish profits year-over-year, I would say, significantly better than what you were intimating the post-surge performance of Winchester can be. Are we not officially in the post-surge environment yet and there is still some benefit or is the improvements in the market that took place during the surge allows you to believe that, sort of post-surge fundamentals will be much stronger than you previously expected?

The post-surge fundamentals will be stronger than what we’ve previously expected.

Fair enough. With that segue, there has been some talk and you addressed this on a couple of occasions of potentially or thinking about or contemplating potentially monetizing the Winchester asset, given the higher profitability level, which, theoretically, at least makes it a more viable standalone entity. Are there any changes in your thought process or timing or sort of outlook for this business?

No, as we’ve stated before, that’s an option and something that actually we evaluate it on a regular basis.

Okay, but no – no updates on any timing or any decision getting close?

No, Dmitry.

All right, and one final question. Your bleach volumes were up about 2% year over year. You continue to express a lot of – sort of confidence in bleach growth and certainly in the market penetration phase, I would expect you to continue to do better. Was there anything specific about 2014 that’s caused the volumes of bleach to slow down? Were you capacity-constrained at any point or was it weather impact or…?

Weather was a big impact last year.

In 2014?

We were not capacity-constrained. The issue in 2014 was weather and in the first half of the year and total bleach demand that we could service.

Okay, so, basically, the cold weather in the first half of the year, which, with the ponds freezing, you don't need to – did this in fact that impacted the whole year for you at the end of the day. And then you don't expect that to happen obviously in 2015.

We are expecting a more normalized pattern for bleach consumption in 2015.

Okay, very good. That's all the questions I had. Thank you very much.

The next question is from Richard O'Reilly of Revere Associates. Please go ahead.

Thank you. Good morning still guys.

Good morning.

Can you discuss the other corporate and allocated cost line, I mean, an outlook for 2015 on it, because the other sub-segment line items are going to be negative for you. Can you talk about that other corporate line? A – Todd Slater: As I think, we’ve said, we expect environmental cost to be $15 million to $20 million, pension income to be about $7 million lower and I think we’ve said in our remarks, SG&A for 2015 full year will be similar to 2013. I would take that as a proxy for what we would expect for that corporate and other line for 2015.

Okay, fine, okay. And in my press release for the outlook for the first quarter, it says Winchester should be slightly lower than the first quarter 2013 level. Is that right?

That’s correct. A – Todd Slater: That’s right.

That's correct, okay, fine. And the last question, this is the tongue and cheek, in your outlook for the full year of 2015, can I get you to define what you mean by meaningful year-over-year improvement in the chlorine business?

Well, meaningful means measurable.

Okay, good. Okay, that helps. Thank you, guys.

Our next question is from Owen Douglas of Baird. Please go ahead.

Hi, guys. Thanks for taking my question here. Just wanted to drill in down a little bit more on some of your comments regarding the investments and any acquisitions, just wanted to better understand what sort of a profile do you think would fit in with your business?

We’ve often stated that further downstream, more bleach, more ability from hydrochloric acid, more potential distribution strategically located and there are several smaller chlor alkali producers who would make sense for us. So those would be the areas that we would be looking.

Okay and as far as that goes, is this a view to - sort of speculated a bit about the Winchester ammunition, there has been a bit of a sale in that business. Could that possibly be a use of proceeds or is there a view towards raising additional capital, because just sort of going through some back-of-the-envelope numbers here, it sounds as though there is going to be ballpark $50 million, $100 million, call it, of cash flow that could be used to make these investments. Are we looking at a bigger number here, where you guys may need to raise additional financing, or could there be some recycling of capital?

I think, there is a pretty broad spectrum of what could happen there. I don’t think as we think about strategic investments like that. We think about Winchester generally as a source of funds. I think what we’ve said historically is that they were the large transformational chlor alkali type of transaction we would consider at. But, again we haven’t committed ourselves to doing anything with Winchester, I mean, we’ve talked in the past. We have as virtue of owning it for 120 plus years, we’ve got a very low tax basis, a sale of Winchester for cash could be problematic.

Understood, understood, okay. So that would require a bit more of a creative financing structure there to - in order to make that appealing to you, I guess. Okay, and finally, on the Chemical Distribution business, so - if you wouldn't mind, walk me through how exactly you can see sort of having the EBITDA levels double in the coming years? What are some of the puts and takes? Do you need to see a bit of a less competitive environment in that segment? Or is that more of a GDP growth type scenario? Can you help me understand what are some of these swing factors that could help you guys double the EBITDA in that segment?

The biggest element in that growth is what we talked about when we made the acquisition which was our goal was to move more of the Olin produced products, potassium hydroxide, HCL and bleach through their system. And that for us is simply an issue of execution getting the tanks, getting the customers, selling the products, because we can certainly make it. On the caustic side, I mean, our improvements are predicated on the caustic side by growing volumes and margins and we believe that that we can do that by looking at on geographies where we don’t participate now and we can look at accomplishing that by just by execution on that side of the business as well.

Okay, thanks. That's all for me.

Thank you.

This concludes our question-and-answer session. I would like to turn the conference back over to Joseph Rupp for any closing remarks.

We just to thank you for joining us today and we look forward to talking with you again in April when we announce the first quarter results of 2015. Thank you.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.