Good morning and welcome to the Olin Corporation's Second Quarter 2018 Earnings Conference Call. All participants will be in listen-only mode. After today's presentation, there will be an opportunity to ask questions to ask questions. Please note that this event is being recorded. I would now like to turn the conference over to Larry Kromidas, Olin's Director of Investor Relations. Please go ahead, sir.

Thank you, Cole. Good morning, everyone and thank you for joining us on our second quarter earnings call. Before we begin this morning, I want to remind everyone that this presentation along with the associated slides and the question-and-answer session following our prepared remarks will include statements regarding estimates of future performance. Please note that these are forward-looking statements and that actual results could differ materially from those projected. Some of the factors that could cause actual results to differ from our projections are described without limitations in the Risk Factors section of our most recent Form 10-K and in yesterday's earnings press release. A copy of today's transcript and slides will be available on our website in the Investor section under calendar of events. The earnings press release and other financial data and information are available under press releases. With me this morning are John Fischer, Olin's Chairman, President and Chief Executive Officer; Pat Dawson, Executive Vice President and President, Epoxy and International; John McIntosh, Executive Vice President, Synergies and Systems; Jim Varilek, Executive Vice President and President, Chlor Alkali Products and Vinyls and Services; and Todd Slater, Vice President and Chief Financial Officer. Now I'd like to turn the call over to John Fischer. John?

Thank you, Larry. Good morning and thank you for joining us today. During this morning's call, I will begin by describing the four key highlights of Olin's second quarter performance, followed by a more detailed discussion of each of our business segments. So let's turn to slide 3. In the second quarter of 2018, Olin generated the highest level of quarterly adjusted EBITDA since the acquisition of the DowDuPont Chlorine Products assets. After the strong performance in the second quarter by our Chlor Alkali Products and Vinyls and Epoxy businesses, we are raising our adjusted EBITDA guidance for 2018 by $50 million to $1.3 billion, with upside opportunities and downside risks of approximately 4%. This year's major turnarounds in our Chlor Alkali Products and Vinyls and Epoxy businesses have been completed on schedule and on budget. Maintenance turnaround cost during the second half of this year will be approximately $135 million lower than in the first half of the year. This is consistent with the normal seasonal pattern of our planned maintenance outages. The maintenance turnaround costs are expected to be approximately $195 million in 2018, which would be approximately $25 million lower than 2017 turnaround cost. We are forecasting 2019 planned maintenance turnaround cost to be approximately $30 million to $40 million lower than our expected 2018 levels. The Epoxy business earned approximately $50 million of adjusted EBITDA during the second quarter, a quarter which was impacted by $21 million of planned maintenance turnaround costs. The overall supply and demand environment for epoxy resins has continued to be favorable. With the significant maintenance turnaround successfully completed, we expect improved volumes and improved results in the second half of 2018. However, a word of caution, higher raw material costs, primarily benzene and propylene, are expected to dampen the second half…

Thanks, John. Let's turn to our 2018 cash flow forecast, which is on slide 9. We expect to generate approximately $500 million of free cash flow. Our top priority for free cash flow remains debt reduction and our expectation is that by the end of 2018, the combination of debt reduction and EBITDA growth will reduce the net debt-to-EBITDA leverage ratio to the 2.5 times range. During the first half of the year, we prepaid approximately $80 million of debt. Starting with the mid-point of our full-year adjusted EBITDA forecast of $1.3 billion on the far left of the waterfall chart, we deduct $50 million in estimated tax payments, which primarily reflect income tax payments made to foreign jurisdictions in 2018. We're forecasting our cash tax rate will be in the 10% to 15% range for the year. Since 2015, Olin has not been a U.S. federal tax payer, because of the utilization of net operating loss carry forwards, primarily arising out of cost associated with the acquisition in 2015. Because of this, we do not expect to be a U.S. federal tax payer in 2018. While we're continuing to analyze the full impact of the Tax Cuts and Jobs Act of 2017, the cash tax benefit to Olin of the changes in the tax law is minimal in 2018 due to the tax credit carry forwards. We do expect the new law to provide cash tax benefits to Olin beginning in 2019. The new law is currently estimated to reduce our cash tax rate for 2019 and beyond to the 15% to 20% range. This translates into an estimated annual reduction in cash taxes of approximately $75 million. Column 3 reflects the midpoint of our current forecast for capital spending of $400 million, which includes annual maintenance capital spending…

Thank you. We will now begin the question-and-answer session. At this time we will pause momentarily to assemble our roster. And our first question comes from Don Carson from Susquehanna. Please go ahead.

So, John, where do you think we are in the chlor alkali cycle? You've talked in the past about mid-cycle earnings of EBITDA of a $1.5 billion, do you think we can get there by next year? And as you look, you expressed confidence that caustic pricing will continue to increase, what sort of the magnitude versus what you show on slide 5 in terms of what we've seen over the last year?

Your first question, I think, from the standpoint of achieving mid-cycle of a $1.5 billion, I think that is a 2019 or 2020 event for us. I think, from a standpoint of where we are in the cycle, I would say we're at worst case halfway through the cycle. I think, what we're going to see though is that the level or the degree of price increases are going to be slower as we go forward, than we've seen in the past. We obviously saw a significant jump last year, but I think it will be more steady increases. And I think, we'll see occasionally things, some dislocations around events and production in certain areas that will cause slowing down of those increases, which is sum of what we've seen right now, recently.

And then, a follow up on Epoxy. So, how would you characterize – what's your view on what's your average margins will be this year versus last year? And can you help us out at all with any sort of idea of operating leverage per – related to changes in say a $0.01 margin per pound?

I'm not really sure from a competitive standpoint we want to answer either of those questions. I would tell you that if you look at the – if you go back to the investor presentation we made in February of 2016, we showed a chart that suggested that EBITDA could reach $250 million to $300 million. And I would say, based on where we are today, we're making very good progress towards achieving that.

Okay. Thank you.

And our next question comes from Neel Kumar from Morgan Stanley. Please go ahead. Neel Kumar - Morgan Stanley & Co. LLC: Hi. Good morning.

Good morning. Neel Kumar - Morgan Stanley & Co. LLC: What is your new $1.3 billion EBITDA guidance, I assume, with regards to cost at EDC and epoxy prices, is it as of July levels?

Neel, this is Todd. It assumes the pricing for caustic that was in effect at the end of July. And for EDC, it assumes our outlook for the full year on EDC being higher priced in 2018 than it was in 2017. That is an improvement over what we've talked about in the prior two earnings calls. And on Epoxy, I think, we haven't talked about pricing other than the improvement that you saw on the slide, and then there's a September 1 price announcement out there. But on Epoxy, as we were clear, there is $20 million to $25 million of higher hydrocarbons that are coming through in the third quarter compared to the second quarter. Neel Kumar - Morgan Stanley & Co. LLC: Thanks. That's helpful. And then, you've also guided to maintenance costs declining additional $30 million to $40 million in 2019. Do you believe that would be a good run rate level for maintenance going forward or can costs come down even further?

I think, we guided to – they would be $30 million to $40 million lower in 2019 than they were in 2018. Neel Kumar - Morgan Stanley & Co. LLC: Right. Yeah. It's probably, maybe you heard me wrong, but that's what I was saying, is that basically a new run rate 2019 levels, or do you think they can come down even more in 2020 going forward?

I think if you look at, there are – we've talked about there are large turnarounds in three different assets, the Epoxy assets which are done every five to six years which have now been done, and the VCM asset which is done every three years. That was done in 2017. So, I would say if you looked at it on balance, 2019 is probably near the low end of what we would see. Neel Kumar - Morgan Stanley & Co. LLC: I see. Okay, great. And then, last question, in the Epoxy, where are you in your longer-term initiatives to drive cost out of that business, then upgrade your portfolio and product mix?

Yeah. Neel, this is Pat Dawson. We have announced that we're going to drive about $100 million of cost over the next five years. I would say, we've made good progress on that here in the last two years, that remains productivity – driving productivity improvements is a critical part of the Epoxy strategy going forward. Neel Kumar - Morgan Stanley & Co. LLC: Great. Thanks.

And our next question comes from Kevin McCarthy from Vertical Research Partners. Please go ahead.

Yes. Good morning. Couple of questions on Epoxy. How would you describe operating rate in North America and Europe? And likewise, how would you describe your level of confidence that prices can increase enough through the course of time to offset the $20 million to $25 million of cost inflation that you referenced? What is the outlook there?

The outlook, if you step back just a few years ago, the outlook has been improving over the past two years, in terms of supply/demand fundamentals. So, supply/demand, we think continues to improve. We have not announced any operating rates, that's not public information. But it's definitely improving. We also see the crackdowns on the enforcement in China around the environmental regulations. As each month goes by that seem to have more teeth in it and that has helped the improvement as well. But also, you don't see any new additional capacity being added in the industry right now. And as long as we continue to grow in that 3% to 5% range that we've talked about before, we think conditions will continue to improve.

And Pat, as a follow-up, propylene prices have been relatively high and volatile lately in both the U.S. and Europe. Obviously, Olin is short of the molecule. Have you considered or would you consider vertical integration in propylene, either on your own or synthetically through base-loading someone else's asset?

Yeah. I think, that's something that we would continue to evaluate. Propylene, obviously, follows what oil has been doing and oil has been hitting highs here in the last couple of months. So that definitely is a headwind and we definitely are always looking at options to improve our propylene position.

Thank you.

And our next question comes from Jeff Zekauskas from JPMorgan. Please go ahead.

Thanks very much. On your slide 7, you show trends in liquid epoxy resin pricing and all of the three regions are decreasing as raw materials are going up. Can you describe what the market dynamic is and do you have an idea of where you think things will stabilize?

Yeah. I think, first of all, I mean, if you look at where this started back probably the middle of last year, third quarter of last year, you've seen a pretty good run up. And as I just mentioned earlier, I think that our supply/demand fundamental has been getting better across the whole Epoxy chain. I think this little cool-down that you've seen here, I think, prices has gotten pretty frothy towards the end of last year, the beginning of the year. So, I think that things are stable and we've seen things very stable here the last three or four months. So, overall, with this improving supply/demand fundamentals, I think, you're going to see better stability going forward than what you've seen in the past. And by the way, as John mentioned in his remarks, we do have a September first price increase out there in North America and Europe.

Okay. And I've a, I guess, a question of caustic soda, I imagine that you have different caustic contracts that were signed at different points in time. If all of your contract caustic was now priced at the market price, would that make a difference to your earnings or how much might that change your average caustic realizations?

Yeah. This is Jim. Yeah, we've got momentum in the contracts and the contracts do renew over a period of time, two to three years often times, sometimes extending beyond that. So, we constantly have contracts that are renewed and so we do have momentum going into the third quarter out of the second quarter. The prices that we attained there, index changes and so forth that will continue to provide momentum into the third quarter, which is why we're saying that we will have higher domestic prices in Olin in the third quarter.

And I would just add to that, typically, contract renewal season is in the fourth quarter. And we have contracts that run anywhere from three to five years, so we still have a group of contracts that were negotiated in the 2015 timeframe, which you would say was not a seller's market at that point in time. And it's our expectation that as they rollover, you will see a meaningful improvement in our netback when we get to Q1 of 2019 versus Q4.

Okay. Great. Thank you so much.

And the next question comes from John Roberts from UBS. Please go ahead.

Thank you. Was the improvement in Epoxies concentrated at all in LER, EPI, or aromatics?

Yeah. I would say that that really was across the Epoxy, our whole Epoxy value chain, from the upstream to the midstream to the downstream.

Okay. So, it is very broad-based you're saying. And that LER price chart would that be reflective of kind of the center of gravity of your mix?

I think it's a fair statement.

Okay. And then, you gave your 2019 maintenance expense outlook, do you have the capital budget yet for 2019 as well or anything else that you can share for us on a forward outlook?

Not at this time, John.

Okay. Thank you.

And our next question comes from Jim Sheehan from SunTrust. Please go ahead.

You talked about the new capacity addition in chlor alkali as taking three years and not having a dramatic impact on long-term supply/demand. Can you talk about why the basis for your confidence in saying that?

If you look at the capacity announcement and the size of it and you believe that caustic demand is growing at 2% annually, the new capacity represents two months' worth of global growth and maybe 10 months of domestic growth. So, that's really not a lot of capacity.

Great. And on your outlook for 2018 EBITDA, you've got the range of plus or minus 4%. Obviously, raw materials are a factor there. What would have to happen for you to get to the high end of that range?

I think the biggest factor for us would be if we have stronger-than-expected volumes. We've got some opportunities around pricing of caustic soda and EDC. And I would say those are the two biggest.

Thank you.

And the next question comes from Matthew Blair from Tudor, Pickering, Holt. Please go ahead. Matthew Blair - Tudor, Pickering, Holt & Co. Securities, Inc.: Hey, good morning. John, you mentioned you're expecting higher cost to contract pricing in Q3 despite some of the spot weakness, could you explain what gives you confidence here? Is that just a function of what you're seeing on supply and demand? And also, could you talk about what kind of demand trends are you seeing in the U.S., Europe, and Asia? Thanks.

Matthew, this is Jim. We do have confidence in what we're seeing. The demand picture actually for caustic is quite good. North America, the GDPs that you're seeing, industrial production and so forth is very solid, very strong. We're confident in our third quarter numbers because of the fact that we have had success in the first and second quarter. Demand is strong and those carry-through with our contract situations that we have. And we'd expect that to continue on. There is nothing that takes us off of that. From a global standpoint, we have seen some things in Latin America, in Asia that have impacted the export pricing. We believe those to be temporary. As capacity comes back on stream in Latin America, we return to the trade flows that we had about a year ago and those were tight. And, in Asia, we also expect – even though we have seen some things in China in terms of the demand, we do expect some capacity to come offline. But we also expect the demand side to return to the norm there. So, there's nothing that takes us off of the long-term trends that we'd been saying all along. Continued global GDP, very strong, there's no capacity coming on stream anytime soon. And actually, there's been capacity taken out and good GDPs around the world that drive the caustic growth. So, we expect a continued good environment as we go forward. Matthew Blair - Tudor, Pickering, Holt & Co. Securities, Inc.: Okay. Thanks. And then, I guess, based on current pricing, what do you think greenfield and brownfield economics are for new chlor alkali capacity in the U.S., whether in terms of like an IRR or maybe a multiple?

I wouldn't necessarily want to comment on an IRR because, remember, you're building an ECU and where the user puts his chlorine has a lot to do with that. I would say that we think, today, greenfield is probably north of $1,500 a ton. I think brownfield, all depends on who it is and what they're doing. There's probably some debottlenecking that could be done for $750 to $1,000 a ton, I would imagine. But those kind of debottlenecks don't create world scale plans. They create 100,000 tons here and there. Matthew Blair - Tudor, Pickering, Holt & Co. Securities, Inc.: Got it. Thank you.

And the next question comes from Arun Viswanathan from RBC Capital Markets. Please go ahead.

Great. Thanks. Good morning, guys. Congrats on a good quarter.

Thank you.

Just a question on the operating rates. We're seeing, I guess relatively high operating rates in the mid-90s now. And just wanted to get your thoughts on how we traject for the rest of the year. I mean, should we expect operating rates to remain high in Q3, and that would result in your kind of stable pricing environment for caustic? And then, maybe operating rates tick down in Q4 and that allows for some pricing on typical maintenance, or is that seasonality kind of change now?

Arun, I think, you've outlined it actually quite well. We do expect operating rates to stay strong during the summer months. You've got a strong chlorine demand, both from water treatment from a vinyl standpoint that will drive operating rates. There is some seasonality to those operating rates into the fourth quarter. And we would expect to see some modest decline. But overall, the picture is still very snug from an operating capacity standpoint.

But is that the mechanism that you do expect prices to reaccelerate in Q4? The reason I ask is because there has been an increase for Q3 and now we've seen a decrease of $5 in July, so, I guess, should we assume that the price momentum picks back up in Q4 on the maintenance? And another reason I ask is because it seems like the maintenance has now been shifted, a lot of it within the industry to the first two quarters of the year. But, I may be wrong, so maybe you could just elaborate on that.

Yeah. The operating rates definitely have an impact on the pricing and that's what you've seen in caustic. And then, any specific event-driven things that under a high operating rate environment causes some spikes and we've seen that over the last couple of years. I think it's also important to note the chlorine side of the equation as well. And a lot of the chlorine derivatives, the tightness in the marketplace is driving the chlorine side and the pricing on the chlorine side as well.

Okay. That's helpful. And then, maybe you can just give us your thoughts on input costs as well on – through the chain in Vinyls. We've seen some increase in ethane. Is that an impact for you guys or not? Thanks.

We have a cost-base ethylene and so now, ethane being an input into that, yes, it does have an impact on our cost structure.

All right. Thanks.

And our next question comes from Eric Petrie from Citi. Please go ahead.

Hi. Good morning.

Good morning.

A question on caustic soda prices, you noted going forward, you expect smaller initiatives. At what price point do we get into a dynamic potential substitution in some end markets for either soda ash or alumina customers produce, purchasing more pure bauxite grades?

I think that customers are always going to want to try to optimize their usage and so forth and so that's something that can be done whether – in the alumina markets and so forth. They're doing that all the time. So, I don't see any specific change on the pricing. Alumina prices are moving, the affordability is there, in terms of caustic soda production so – and pricing. So we're not – I'm not that concerned about that. Soda ash, quite honestly, there's a – that market and those demands are running – they're running high capacities, there's a large switching cost and so forth. So, we don't see any impact from soda ash.

Helpful. Thank you. And then secondly, on your slide 7 with the liquid epoxy resin pricing dynamic and the gap between regions, are you seeing any competitive pressures from Asia producers into either Europe or U.S. markets?

No, not really. It's been this way for many years. So, we don't see anything really changing dramatically. Actually, we see much better fundamentals. As the market tightens, we see better fundamentals in each of the regions. And I think that's been one of the main – a good data point for the fact that things are tighter.

Thank you.

And our next question comes from Stephen Byrne from Bank of America Merrill Lynch. Please go ahead.

I was wondering if you had a roster of chlor alkali plants in China that you've drilled into and whether you have a view on the fraction that's not operating at historical levels, whether it's more a function of a permanent shutdown or a temporary idling, or whether it's just a matter of implementing some updated pollution controls?

I think the answer to that, in general, is we have some view and it's some effect of all the three things that you mentioned.

And similarly on epoxy is – are those Asian producers – is that just a matter of improvement in emission controls that's driving that because you're not really dealing with a coal-derived unit operation?

No, no, but you are dealing with – sorry, this is Pat Dawson. You are dealing though with high-energy intensiveness. I mean, that's where – it starts with chlorine to get to epichlorohydrin, which is the key raw material. So you are dealing with high energy, high resource, and a very environmentally challenging product from a water and a water treatment standpoint. So, we do see this new round of China regulations and enforcement continuing to have an impact on capacity in China.

Very good. Thank you.

And our next question comes from Dmitry Silversteyn from Longbow Research. Please go ahead.

Thanks for taking my question, a couple of them. One, on the Chlor Alkali segment. Can you talk a little bit about domestic volume growth that you're seeing versus export growth in terms of – if there's big differences in the pace of growth you mentioned in the overall market growing at about 2% globally, but in terms of your volumes and where they're going? And in the export growth, can you talk a little bit about what, kind of the main destinations are, is it still sort of Asia-Pacific and Latin America, or you're getting more and more into Europe there?

This is Jim. The second part of the question in terms of destinations and so forth, the destinations out of the Gulf Coast are similar to what they have been, not a significant amount of trade differential. But Latin America has significant movement and also into Asia Pacific, a lot into Australia into aluminum. There were earlier this year some movements to Europe in the second quarter, that's pretty much slowed down. So, not a dramatic shift in any of the trade flows out of the Gulf Coast. As far as demand, I think, the best way to look at it is in terms of the GDPs, because we have a tendency to track GDP quite well. And as you know, in the U.S., GDPs have been relatively strong. So, we do have strong demand growth here in the U.S. and we expect to have that continue, the strong markets, pulp and paper market and in processed chemicals. Quite honestly, everything is relatively strong. So, we see good domestic demand. That's not to say that the export and around the world the demand is dropping off by any means. You get some dislocations here or there. But I would say again, China is what it is and the aluminum markets in Australia are solid. So, the demand is there globally. And again, GDPs is probably the best driver to use for our demand.

All right. Thank you. And my second question on Winchester. How should we think about the profitability of this business in an environment of persistently high raw material costs that you don't seemed to be able to pass through? We've kind of talked about $120 million, $130 million in the annual EBITDA back in the day when you were relocating from Illinois to Mississippi. How should we think about, sort of structural EBITDA of this business, assuming the pricing stays where it is in terms of raw material and metal costs, and your ability or lack thereof to recapture some of that margin?

Dmitry, last quarter, when we talked about Winchester, we said we did not believe that 2018 results would be better than 2017. I mean, all the factors that you just described, we have lower commercial volumes. However, we do think if you look back historically, commercial volumes tend to decline somewhere around six consecutive quarters off of a peak. The second quarter of this year would have been the sixth quarter. So, we have expectations that commercial volumes will stabilize here. The higher commodity cost, we've been able to offset some of that with better military volumes, which for us should continue for several years and we've got to improve our operating costs. I would say, right now, as we look at the world, I think the $125 million was probably too high. But I definitely think that once we get to a more stable market environment, we will do better than what we did in 2017.

All right. That's helpful. Thank you.

And our next question comes from Aleksey Yefremov from Nomura Instinet. Please go ahead.

Good morning, everyone. Thank you. In Epoxy segment, your outage cost will decline approximately $20 million sequentially and raw material costs are going up $20 million to $25 million, should we think about Epoxy pricing as a sort of a neutral factor here and so your EBITDA could be about flat sequentially? Is it a good way to think about the segment?

Well, the one thing we did say was we expected improved volumes in the second half of Epoxy relative to the first half. So, I think, other than what you just said, if you add in improved volumes, it would be – if you don't have improved volumes, it would be flat. I agree.

So, John, just to clarify this $20 million improvement in outage cost, it does not account for that improved volume, right?

Alex, this is Todd. There are additional volumes beyond the factor that's just in the $20 million of the outage and the outage costs as well as the unabsorbed fixed cost.

Understood. Okay. Thank you very much. And then, another question on Epoxy. If we look at slide 7, Asia resin prices went up. They're approximately $0.40 a pound. Is there any way to say how much costs went up and what's the current cost floor for these prices globally?

No, I don't think we have given any information out on that cost floor, other than saying that if you look at the published indexes on epichlorohydrin and BPA that those costs have been going up and that has a real impact on non-integrated producers.

Maybe one follow-up for Pat in epoxies as well. Do you think sort of the next move in August for these prices in the U.S. and Europe, is flat, up or down, and also, what gives you confidence in the September price increase?

I think, what gives us confidence in September increase is just the tightness of the market. So there's been some turnarounds, we obviously just came off of a big turnaround our self. So, we just don't see a lot of available product out there, anywhere in the globe and that gives us the most confidence.

Great. Thank you.

And our next question comes from Roger Spitz from Bank of America. Please go ahead.

Thanks very much. Good morning. I just want to help square the higher caustic soda pricing outlook and the higher EDC price outlook in the second half. I mean, usually, as you said before, EDC exports is where you – one pushes chlorine to make more caustic, so they tend to move in opposite directions frequently. I wonder if you might address that.

Yeah. Roger, remember, EDC for us is entirely an export product. The short-term improvement in caustic soda prices is in the domestic market. Those two markets do not react to each other. Its caustic soda in the export market which we've talked about was being lower and a factor for the higher EDC prices.

Got it. And on the small product, but I guess you sell U.S. acetone core part out of your Freeport phenol facility, is that all under fixed spread contracts or acetone has been weak here in demand and pricing? Has that impacted you or it's all on cost plus fixed spread contracts for you?

Roger, it primarily moves around the indexes that you see published out there.

Got it. Thank you very much.

And our next question comes from Karl Blunden from Goldman Sachs. Please go ahead. Karl Blunden - Goldman Sachs & Co. LLC: Hi. Good morning, guys. Thanks for the time. Just to focus on slide 14, your 2018 bridge to the near-term $1.5 billion potential. On the Epoxy piece, when you described Epoxy improvement in earnings, could you go into bit more detail about what drives that? Is that a continuation of existing margins and simply run rating at a higher rate perhaps in the first half of 2019/2020, relative to where we were in 2018 or is there something else, maybe its operating rates? Interested in your view on what drives it and how big that driver could be?

The biggest driver as we move forward here is the absence of large outages that occurred both in 2017 and 2018 that will drive lower maintenance costs and improved volumes. Pat talked a little bit about productivity. That's a piece of it. And obviously, we have the opportunity to be in a better long-term pricing environment as we move through 2019 and 2020 than we've been in historically. Karl Blunden - Goldman Sachs & Co. LLC: Got you. That's helpful. So, part of it is you and then part of it is an expectation on market pricing holding up. Just on the capital structure here, you've announced a $300 million debt reduction target, what's the rationale for that? Is that tied in some way to the cash flow expectations you have for the business? Is it maybe more precision on where you want debt to be through the cycle? Any thoughts around that, from Todd, perhaps? It'd be very helpful.

This is John. We have a debt target that is based on what do we think the trough EBITDA in this business will be. Because, as you know, it's a highly cyclical business, when the cycle turns, it turns and I'm not forecasting a turn to the negative cycle here. But that's what we are targeting, a specific debt level based upon what we think we can earn in a trough. And that would be our objective.

And Karl, what we've said is that by the time you get to the $1.5 billion range of EBITDA, we'll have net debt to EBITDA under 2 times. And doing that math, you need to repay approximately $700 million of debt from where we ended 2017. So, approximately $300 million and a minimum is coming out this year. Karl Blunden - Goldman Sachs & Co. LLC: Got you. Okay. So, it's simply kind of allocating a timeframe to actions that you had in mind already. That's helpful. Thanks, guys. Appreciate it.

And our next question comes from Owen Douglas from Baird. Please go ahead. Owen Douglas - Robert W. Baird & Co., Inc.: Hi. Good morning, guys. Thanks for taking the question. Just a quick one in terms of the outlook for the higher chlorine prices, while also being constructive on caustic soda. How much of that is a reflection on the market supply/demand balance for chlorine versus perhaps a little bit of sort of I guess cost push?

I think it's more reflective of the supply-demand environment quite honestly. We talked about high operating rates earlier and we're seeing good demand on both sides of the ECU and that's what's driving pricing. Owen Douglas - Robert W. Baird & Co., Inc.: Got it. I see. So, as things move forward in this cycle here, do you think that there's a real risk to softening on the caustic soda economics?

This is Jim. I guess the short answer would be no. We see a positive outlook with several years of runway left. And we would expect the economics to continue to improve. Owen Douglas - Robert W. Baird & Co., Inc.: Okay. That's very helpful, and final one for me. The outlook for Epoxy kind of sounded a little bit more cautious than I was expecting with some of the commentary around the earnings potential for that business, appearing that you guys were not too far off of it. Can you sort of help me understand what do you think are some of the factors holding back the enthusiasm?

Yeah. This is Pat. I think, first of all, you've seen on our graph 7, the run-up that we've experienced here, primarily in the last six to nine months. And I'd say, we're cautiously optimistic about that run-up and the sustainability of the supply/demand fundamentals continuing to improve. I think the other issue is around growth. And we talk about 3% to 5% market growth depending on geography and applications. And there's no question that we're probably seeing a little bit on the lower end of that growth curve than what we had expected at this point in time. And I would say, those are factors we think about going forward. And, of course, as we've mentioned and we'll mention again, you've got the hydrocarbon volatility or you know the oil volatility that impacts our hydrocarbon costs that continue to be a concern looking forward. Owen Douglas - Robert W. Baird & Co., Inc.: Okay. That is helpful and final one from me. I know that you guys obviously have performed well, but still have these legacy 9.75% and 10% notes which take a little bite out of the EPF, if you will. So, just to help me understand a little bit, what are your priorities as far as some of this debt repayment? How much of it is around the absolute balance of debt versus also thinking about your sort of funding cost and what that does for your earnings?

I think the debt reduction targets are based on the long-term capital structure. The debt that's being repaid is designed to put us in a position, where we can refinance those 2020 bonds on the date with first day we can call them. Owen Douglas - Robert W. Baird & Co., Inc.: 2020 bonds? Oh, I see. Sorry, the 2025 bonds and 2023 bonds, you mean?

The debt that was issued in conjunction with the Dow transaction is first callable in October of 2020 and because of the Reverse Morris Trust, can't really be called before October of 2020. And in today's economics on interest, you're looking at potentially saving between $50 million and $70 million once those bonds are called, so. But that can't happen until late 2020. Owen Douglas - Robert W. Baird & Co., Inc.: Got it. I understand. Great. Thank you very much, guys.

There are no further questions. This concludes our question-and-answer session. I would now like to turn the conference back over to John Fischer for closing remarks.

So, I'd like to thank everyone for joining us today and we look forward to speaking to you again about our third quarter results.

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