Good morning, and welcome to Olin Corporation's Fourth Quarter 2024 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] Following today's brief opening comments, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Steve Keenan, Olin's Director of Investor Relations. Please go ahead, Steve.

Thank you, operator. Good morning, everyone. We appreciate you joining us today to review Olin's fourth quarter results. Before we begin, I'll remind you that this discussion, together with the associated slides and the question-and-answer session that follows, will include statements regarding estimates or expectations of future performance. Please note that these are forward-looking statements and that Olin's 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 fourth quarter earnings press release. A copy of today's transcript and slides will be available on our website in the Investors section under Past Events. Our earnings press release and other financial data and information are available under Press Releases. With me this morning are Ken Lane, Olin's President and CEO; and Todd Slater, Olin's CFO. We'll start with our prepared remarks, then we look forward to taking your questions. I'll note though that in order to give each analyst an opportunity, we will limit participants to one question with no follow-ups. I'll now turn the call over to Ken Lane and kick us off.

Thanks, Steve, and thank you all for joining us today. Starting with Slide 3, I hope everyone was able to participate in our December Investor Day, whether in person or virtually. We laid out our Value Creation Strategy that optimizes our core businesses by maintaining our focus on a value-first commercial approach and streamlining our assets to achieve greater than $250 million in cost reductions by 2028. We expect to achieve $20 million to $30 million of these savings in 2025. We also explained how we will grow our core by focusing on adjacent high-return options, all while being disciplined with our capital allocation framework. Olin has a great legacy, a leading set of businesses and assets, and a bright future. During our Investor Day, we guided the fourth quarter adjusted EBITDA at the low end of our range. However, as we closed the quarter, the downward pressure on our share price created an unexpected benefit to adjusted EBITDA and Hurricane Beryl costs came in lower than we expected. In Epoxy, seasonally lower demand was a headwind during the fourth quarter. However, this was partially offset by continued price improvement. In Winchester, domestic and international military demand remains strong. However, near-term commercial headwinds persist as commercial retailers continue to trim inventories, and consumer disposable income remains challenged. Now let's take a closer look at our Chlor Alkali Products and Vinyls results on Slide 4. CAPV sales were up 9% sequentially on higher volume in the absence of Hurricane Beryl and improved pricing. Our CAPV results also benefited as final Hurricane Beryl spending came in approximately $8 million below expectation during the quarter. Although we are in the midst of a prolonged industry trough, Olin continues to realize higher value than experienced previously. We continue to be disciplined with our operating…

Thanks, Ken. On Slide 8, we've added a sequential quarterly adjusted EBITDA bridge. The comparison from third quarter to fourth quarter 2024 is highlighted by business. At a high level, we experienced an approximately $93 million overall sequential benefit from the lower Hurricane Beryl impact. Our chemical businesses experienced favorable pricing momentum, but were offset by higher raw material costs and higher expenses, including penalties from unabsorbed fixed manufacturing costs related to our planned Freeport, Texas chlorinated organics plant maintenance turnaround. As expected, Winchester experienced lower commercial demand as retailers continued their inventory destocking efforts. At corporate, we benefited from lower stock-based compensation, primarily due to mark-to-market adjustments, partially offset by higher environmental remediation expenses and legal and legal-related costs. Now let's turn to Slide 9, quarterly and full-year highlights. The continued challenging industry environment reinforces the importance of Olin's investment-grade balance sheet and our strong cash flow generation. We have minimal bond maturities in the next few years with opportunities to refinance our long-term debt, such as the expansion and refinancing of our $500 million accounts receivable securitization facility completed during the fourth quarter, but from the previous $425 million facility. With this refinancing, we had approximately $63 million of off-balance sheet accounts receivable factoring return to balance sheet debt as our factoring program was discontinued. Our strong financial foundation enables Olin to continue running our value-first commercial approach, while maintaining our disciplined capital allocation priorities. During 2024, Olin returned approximately 78% of operating cash flow to shareholders through quarterly dividends and share repurchases. As a result, we repurchased approximately 5% of our outstanding shares. Our net debt has increased by approximately $167 million from year-end 2023, while remaining approximately flat during the fourth quarter. After taking into consideration the impact of Hurricane Beryl, our year-end net debt to…

Thanks, Todd. Let's turn to Slide 10 and our outlook for the first quarter. In general, we don't see significant short-term improvement in the macro demand environment and we will maintain our disciplined operating rates. As a result of our value-first strategy, we expect our first quarter 2025 ECU values to be comparable with the fourth quarter. At the same time and aligned with our optimizing the core strategy, we are staying focused on productivity, cost improvements and the variables within our control. With near-term, lower-planned CAPV volumes and pricing headwinds in EDC, combined with continued customer destocking and lower consumer demand in the Winchester commercial business, we expect our first quarter 2025 adjusted EBITDA to be in the range of $150 million to $170 million. As we continue leading through this challenging market environment, we will stay focused on our value creation strategy and the capital allocation framework we laid out during our Investor Day in December. We are committed to maintaining our investment-grade balance sheet, ample liquidity and superior cash flow generation. As all cycles do, this extended industrial trough will end and we look forward to demonstrating our significant leverage into that recovery. Operator, we're now ready to take questions.

[Operator Instructions] The first question comes from Aleksey Yefremov with KeyBanc Capital Markets. Please go ahead.

Thank you, and good morning, everyone. Ken, can you provide as much detail as possible about your volume outlook for chlorovinyls in the first quarter? And also, if you could comment whether you've lost any chlorine or other Chlor Alkali business in Q1 for the rest of the year on a contract basis where that step-down in volume is more temporary and tactical and we should expect volumes to rebound in coming quarters in '25.

Good morning, Aleksey. Appreciate you joining us. So listen, on the volume side of things, Q4, we saw very good volume. Some of that was rebound volume, of course, from Hurricane Beryl. And then coming into the beginning of the year, obviously, we've got very low inventories as we were pulling inventory towards the end of the year just working on working capital and as that rebound volume was very strong in Q4, what we see happening in the first quarter, we do have a turnaround going on. So, that's impacting volume because we don't have the inventory to offset some of that. We've also had some of our customers in the first quarter. While we weathered the Winter Storm Enzo very well with our assets, some of our customers did not. So that's going to have some impact on volumes, and then we're going to continue to be disciplined with our operating rates and meet the demand at the value that we like. So in the first quarter, we will see lower volumes, but most of that is related to things that are not, let's say, overall market in terms of demand. We do see good demand for caustic. We think caustic demand is going to continue to be strong, relatively strong relative to the rest of the portfolio. We see good demand in pulp and paper. In the export markets, we see good demand for alumina and aluminum still. So that's going to continue. And as long as we see continued weak demand on the vinyl side or the chlorine side of the chain, that's going to make caustic tighter. So we expect that to be supportive for pricing as well. But in general, there's a lot of uncertainty out there. We still expect to see strength in caustic, more weakness on the chlorine side of the ECU. But overall, like I said in my comments, ECU values should be relatively flat in the first quarter versus fourth quarter.

The next question comes from Mike Leithead with Barclays. Please go ahead.

Great. Thanks, and good morning, guys. Just two around guidance. First, on the fourth quarter, I think in mid-December, you said you'd be closer to $170 million and then you ended up about $20 million higher. So, what happened in the last two weeks of the year? And then second, as we look through 2025 beyond the first quarter, I appreciate there's limited demand visibility, but are there Olin's specific earnings contributors we should think about as the year goes on to sort of build a bridge off of that 1Q? Thank you.

Thank you, Mike. Good morning. Yeah, so listen, things change pretty quickly there after the Investor Day. We didn't, of course, expect the benefit from the lower share price, which was not a good thing. That was a $10 million tailwind for us. And then, we did have a little bit of a surprise that Hurricane Beryl spend came in about $8 million less. So that makes up almost all of that $20 million. Otherwise, we would have been right in line with where we had expected. As I said before, I think that we don't want to fall in the trap that we have -- many people have in the industry over the past couple of years of giving some view that the second half of the year is going to be a lot better than the first half of the year. There's just still a lot of uncertainty and visibility is not very good. However, we do think that as we get into the back half of the year, we should see for Winchester, a lot of that destocking should be finished. Hopefully, we start to see the consumer come back and then see a little more strength in consumer demand. But certainly, working down that inventory is taking a little bit longer than what our commercial customers had expected. In Winchester, we're also going to see stronger military demand as we go through the year. Right now, the project at Lake City is running a little bit slower only because of the weather. As you know, it's been very cold, so that has slowed some of the progress around construction. That's going to pick-up in the spring. So, we should see Winchester improving in the back half of the year. For the rest of the business, I think we're going to see a more normal seasonality. So as we get into Q2 and the warmer months, you're going to start to see the chlorine demand pick-up as we see bleach demand increase, and that's going to be positive for Olin. That's more of a differential position for us. I think in Epoxy, you're going to continue to see some seasonal improvement with construction improving. Automotive still is fairly weak over in Europe. So hopefully, that is going to turn and start to improve. Now there is a little bit of a bogey out there around the anti-dumping duties and we're not going to build any of that into our forecast at the moment because we need to wait for those things to be finalized. But obviously, those could be a bit of a tailwind here for Epoxy.

The next question comes from Hassan Ahmed with Alembic Global. Please go ahead.

Morning, Ken and Todd. A quick question around supply. And I brought this up at the Analyst Day as well. I mean, look, one of the virtues obviously of the Chlor Alkali story historically had been the dirt of capacity additions. But it just seems that between certain TiO2 producers sort of announcing chlorine capacity additions, certain polyurethane producers out there sort of investing in infrastructure to potentially sort of source chlorine from other vendors. There seems to be a creep in terms of supply. So, could you sort of give us your near- and medium-term sort of outlook on maybe even numerically of what you think the supply picture looks like for Chlor Alkali?

Hi. Good morning, Hassan. So, look, on supply-demand, we talked about this at the Investor Day and our view is this, that you do see capacity coming out as well as being added in the future. And in fact, the capacity is coming out is coming out sooner than the capacity that's being added. So, we don't think that that is anything more than a normal level of supply addition and capacity that's coming out with less competitive assets and less competitive regions. So, we think net-net, it's going to be relatively balanced in the mid-term. There's not anything there that we see that's concerning for our outlook and what we laid out at the Investor Day. But I will tell you when we look at it, we do not see the economics to make an investment pencil where we are today and we're very far away from that. There's a lot of risk in building these assets. So people are going to do what they want to do, but that doesn't mean that it's going to happen in the time that is stated and doesn't mean that it's going to happen at all necessarily. Let's see. But even if everything happens as it's been announced, we think net-net, it's going to be fairly neutral on the supply side.

The next question comes from Jeff Zekauskas with JPMorgan. Please go ahead.

Thanks very much. So, Ken, you've been CEO of Olin now for almost a year. When you look back on the year and you compare your actions or your leadership direction to Scott Sutton, have there been any changes? Or do you see your tenure over the past year as a continuation of what Scott did?

Good morning, Jeff. Thanks for the question. Listen, we laid out our vision for the company at the Investor Day. And as we look forward, what we see is that our leading position in both our CAPV business, the Epoxy business, and the Winchester business, we've got a lot of opportunity to do things that are well within our control to optimize that. We talked about reducing our costs by $250 million. And a lot of that is related to us cleaning up the asset footprint that we've got to remove some of the assets and optimize some of the sites that we've got to make them more efficient and to reduce our fixed and variable costs at those sites. Those are things that we're going to be able to control and deliver on, and I'm convinced that we will. And then you look at the business model that we operate. We're going to continue to stay focused on being a leader in the industry. And what that means is that we're going to continue to be disciplined. We're going to continue to watch our operating rates and we're going to be focused on value. We don't see the need to get overly aggressive in terms of volume. I said it just a minute ago, we don't think that where we are today, there are opportunities for reinvestment economics. We think that we're far away from that. So we believe that as long as we continue to be disciplined, we can hold value relatively flat versus where we were last year. And as the market comes back, we have the coiled spring and we've got a lot of value ahead of us. And as we see the trough -- as we come out of the trough, we're very well-positioned to realize a tremendous amount of value as a company from that. So we've got a bright future just around optimizing our core. And then you think about some of the options that we described around growing the core. So we're entering the PVC resin market here in the first quarter. That's a way for us to begin to test and learn more about that market to be able to position the future of a very strong set of assets that we have to make Vinyls down at Freeport. And so that creates a great opportunity for us. We talked about building on our bleach position, and we talked about building on our Winchester position and leveraging off of our chemical expertise into some very attractive markets that we think have got strong growth and strong returns for the long term. So that's our vision for the future is to stay focused on optimizing and growing, and I'm really excited about getting after that and continuing to deliver on that strategy.

The next question comes from Bhavesh Lodaya with BMO Capital Markets. Please go ahead.

Hi, good morning, Ken. So a question on your Chlor Alkali strategy. So industrial consultants are expecting higher operating rates sequentially in the first quarter. Now expectations were that when the market improves, when operating rates increase industry-wide, volume gets a higher share of those volumes. It appears that you are not seeing that sort of a market or that sort of margins and are actually restricting your participation because you expect lower volumes in the first quarter. So I guess the question is what needs to change for this trend to not continue as we go ahead into the year.

Good morning, Bhavesh. Listen, I think in the short-term, in the first quarter, if you go back to what I had said earlier, what you see in terms of the lower volumes in Q1 is more related to the bounce-back that we saw in volumes in Q4, we don't see that repeating in Q1 and that bounce-back was our bounce-back from Hurricane Beryl. We also have got a turnaround occurring here in the first quarter. And we've got, like I said before, some of our customers were impacted from the winter freeze or winter storm, Enzo. So, it's more related to transient things. I hate to use that word, but that's the way that we see it. We do continue to see strength in caustic in the caustic market, a little more challenging in the Vinyls. As construction returns, that's going to change. But right now, as you know, housing is still challenged. Hopefully, that's going to start to change in the coming months, but we don't have visibility of that just yet. But I don't see anything where we're differential in the marketplace, but what we will do is continue to be disciplined that we're not going to push volume into weak markets just to get the volume. So we're going to stay focused on holding our position until we see the values that we like and then we'll start to operate harder. But right now, the focus is on being disciplined.

The next question comes from Patrick Cunningham with Citi. Please go ahead.

Hi, good morning. Just on the recent AMMO acquisition, can you provide some more color on the $40 million in synergies that you expect to achieve through economies of scale and if there's anything from a commercial standpoint that's baked into that number? Thank you.

Yeah, good morning, Patrick. Listen, on those synergies, part of the synergies is SG&A, obviously, that's going to be a smaller part. The bigger part is going to be, as we talked about at the Investor Day, Winchester is the largest small-caliber ammunition producer. So we're a very big buyer in the market for raw materials and different components for ammunition. That's going to be a big lever for us with these assets relative to the past. So that is going to be a very positive thing for us. Just right off the bat, those are things that are going to be able to be leveraged from day one. The other part of this is more unique to Winchester and that we've got these already three sites that we have and they're very large-scale sites that produce very large-scale volumes. And what we're going to get with this asset is the ability to produce niche high-margin caliber products that we currently have to make in these larger-scale assets which is less efficient. We have more changeovers. That's the sort of thing that we can move into this asset, we can make more of those calibers and we can make them more efficiently. So those three things are really going to drive that $40 million of synergies. So I have a very high level of confidence that we're going to get those. And the procurement and the SG&A, we're going to get very quickly.

The next question comes from Duffy Fischer with Goldman Sachs. Please go ahead.

Hey, good morning, guys. Just a question around the potential change in trade flows from the tariffs and anti-dumpings around Epoxy. What have you seen so far? Obviously, some of your customers are calling out higher Epoxy prices already. But what do you think is going to happen if the ask that you guys have put forward happens, what do you think that will do to trade flows and what do you think that will do from incremental pricing from here forward?

Good morning, Duffy. Great question. Listen, it's a little bit different for Epoxy. Europe is a very large Epoxy market. So once the duties go up there, that's going to be that's going to be a good thing for the European market and our position in Europe. It's not like some other markets that you may think about where there are other large sinks of volume. I do think that between Europe and the US, once you put duties there, it is going to drive prices higher in the short term. And when you look at the cost structure around Chinese producers, they were already dumping product and frankly not making money. The situation is getting worse there. So if their costs continue to rise, you may actually just see the production slow down or even or even shut down. I'm not predicting anything is going to happen for sure, but certainly, the economics are not favorable for them to continue to operate where they are and they've added a lot of capacity. So I don't know that it's as much about product just shifting around and flowing into different regions, because the largest consuming regions are really US and Europe. I think it's going to be more about rationalization over the mid-term of capacity that's not competitive. And you've already seen some of that in Asia. So, you saw some capacity announced being shut down just in the past couple of weeks. So that's how the cycle works. The strong are going to survive and the weak aren't. I think it's going to be more that story than it is going to be just things are going to move to different regions in Epoxy.

The next question comes from Mike Sison with Wells Fargo. Please go ahead.

Hey, good morning. Most companies sort of have said that the outlook or the demand outlook for '25 doesn't look much better than '24. And so, if you think -- so if you think about -- if that does unfortunately unfold, how does your -- how do you improve EBITDA? And I know you don't give annual guidance. But how do you improve EBITDA this year year-over-year? And when you think about the first quarter kind of low point, what sort of drives the improvement potentially sequentially into the later quarters?

Hi, Mike. Thanks for the question. Yeah, listen, we're going to focus as you always have to do in the trough on what we can control. So we're going to focus on our costs, controlling our costs, making sure that our cash flow is strong. Financially, we are in very good shape as a company in a very deep and long trough that we've been in now for a while. So continuing to focus on the things that we can control, being disciplined around our operating rates, those are the things that are going to help us really hold the value that we see in our positions that we've got. But we do expect to see some improvement, as I had said earlier, as we go through the year, we do expect to see some improvement with the Winchester business. We're going to see some recovery as we get the seasonality with warmer temperatures coming and the bleach business is going to come back. We should see continued momentum with Epoxy pricing. Now, Epoxy is in a pretty deep hole. So in terms of material improvements, I don't know that we're going to get there this year, but we certainly expect to see some improvement in Epoxy as we go through the year.

The next question comes from Steve Byrne with Bank of America. Please go ahead.

Yes, thank you. Just a little bit about your new tolling agreement to convert some EDC into PVC. How would you compare the variable margins that you make on your current sales of EDC versus what you expect to get on this PVC post the tolling and shipping costs? And I'm curious who are you going to be selling to? Are you developing your new customers with the new commercial organization such as selling direct to like pipe producers? Or are you selling to your existing, say, EDC customers who then would use their own commercial organization? Just curious on your outlook for this business.

Good morning, Steve. Listen, this is a really important part of our strategy as we think longer-term. This is not a short-term move for us. So, the idea here is for us to get into selling PVC resin directly to customers and doing it ourselves. That's how we're going to learn who the customers are, learn more about creating higher value from our market position that we think we can build over time. And, this is, obviously, when you look at the economics, over the mid-to-long term, this is an upgrade for us of our EDC compared to selling EDC. So it is higher-value for us. As we go through developing the market, it's going to be smaller scale. So the economics are not going to be great. But relative to selling EDC, I can tell you, it's not any worse. So this is going to be a benefit for us not just in terms of moving volume. It's going to be benefiting us when we think about potentially a million tons of PVC resin that we could be looking at bringing into the market in the next few years. That really is why we're doing this.

The next question comes from Arun Viswanathan with RBC Capital Markets. Please go ahead.

Thanks for taking my question. Good morning. So I guess, I wanted to get your thoughts, if I could, on maybe some preliminary thoughts on '25. So obviously, you're guiding to that $150 million to $170 million for Q1. And if we look at '24 without the Hurricane Beryl impacts are in the $1 billion or so range. Assuming some synergies and growth in Winchester and maybe some recovery in the other segments, should you be above that $1 billion range, maybe in the $1.1 billion to $1.2 billion range for the full year, or how should we think about what you see in the cards for '25 EBITDA?

Good morning, Arun. Yeah, listen, so when we think about the first quarter and that guide that we've given, if you even just think about first quarter versus prior year, obviously, one of the big changes versus '24 is Winchester. So Winchester is significantly below where it was in the first quarter of last year. What I think is maybe being lost though is that we do see stable CAPV performance, which really is a very good thing to see. We see a firm business environment around CAPV. We saw that last year. Hurricane Beryl, yeah, it was a headwind, but for CAPV, we see things continuing to be kind of where they were and they will start to improve as we come out of the trough. We've talked about Epoxy. The biggest thing that's going to help us there is going to be rationalization of capacity and then growth coming back into the market. Of course, duties will help, but we're not going to -- we're not going to bank on duties being our savior here, but that is something that certainly will be a tailwind for us. But ultimately, I think you're going to see Winchester being of being the headwind in the first quarter. And as I said before, we won't see that really recover until the back half of the year until the inventory that's in the system gets worked out.

The next question comes from David Begleiter with Deutsche Bank. Please go ahead.

Thank you. Good morning. Ken, just on natural gas, can you discuss your hedging strategies for this year? And how should we think about the impact from higher natural gas prices on your earnings for the year? Thank you.

Todd, do you want to take that one?

No, thanks, Ken. Thanks for the question on natural gas. As you know, we do have a very disciplined approach on hedging our natural gas. Yeah, we generally use a rolling four-quarter basis where we are heavily hedged a quarter out and the sliding scale the remaining quarters. If you think about Q1 versus Q4, directionally, we would think about our natural gas and power costs being relatively flattish sequentially in Q1 versus Q4 and probably not nearly as big a headwind as you might see at the spot market.

The next question comes from Peter Osterland with Truist Securities. Please go ahead.

Good morning. Thanks for taking the questions. Within Winchester, is there an extensive pipeline of opportunities out there that you are considering or would consider for additional bolt-on M&A? And at the current valuation, how do you weigh that option as a priority versus share repurchases? Thank you.

Hi. Good morning, Peter. Thank you for joining us and welcome. Listen, we talked about this at the Investor Day. We are going to be focused on highly-accretive, high-return bolt-on investments around Winchester. Obviously, we're not going to talk about anything specific at this point. But with the scale that we've got in the industry, there could be other options, but they will be small. We're not looking for something transformational at this point. But when you can do deals like the White Flyer deal that we did at the end of 2023, the deal that's proposed here for the AMMO, Inc. assets and hopefully closing here in the second quarter. As those things come up, if you can buy assets or businesses at a multiple like two times, obviously, we're going to look really hard at that. And we're going to watch that marketplace to see if other things come on. But at this point, I don't have any more specifics to share with you than that. We did talk a little bit though about the potential to backward integrate with Winchester into the Radford facility that would be bid here in the next couple of years. That's the only other thing that we've talked about publicly, so we'll keep watching the space. And as we see things, we will be disciplined and we're going to watch value relative to us buying back a share of Olin stock and looking at the share of Olin stock today, as you can tell, it's a very good value. So it's got to be a high hurdle.

The next question comes from Kevin McCarthy with Vertical Research. Please go ahead.

Yeah. Thank you, and good morning. Ken, I'd appreciate your updated thoughts on the dynamics in the caustic soda export market coming out of the US Gulf Coast. I think you made a comment earlier on the call that you expect ECU values to trend flat sequentially into the first quarter. And I'm just wondering in that context, what you're thinking about directionally for spot export prices for caustic soda? Do you think we're at a bottom here? And do we need any sequential improvement over the next couple of months to achieve that flat level? Maybe you could just provide a little bit of context for us in that regard? Thanks.

Good morning, Kevin. Appreciate the question. Listen, what I said earlier stands. We see firm demand. The other thing that we see is the Asian market pricing is improving. So I do think that we've hit a bottom here in terms of the export pricing, which overall will lend to a floor for domestic pricing as well. So as we see the headwinds in the EDC market, we do see people having to cut back because they're not making any money on EDC at the price level that you see in the market today. That's going to add to the tightness in the caustic market. So, I -- that just gives me that confidence that we're going to see firmness in the ECU values out there, including in the export market.

The next question comes from John Roberts with Mizuho. Please go ahead.

Thank you. Sometimes in the past, Olin has idled EDC because the margin was too low and I don't think you're allowed to resell the ethylene. Will the new PVC strategy require you to keep EDC running even if margins on the rest of the merchant EDC market are unacceptable?

Good morning, John. Listen, we're not going to treat EDC any differently than anything else. We're going to be optimizing the operating rate based on the value that we see to -- or the demand that we see at the value that we want in the marketplace. So I don't see us being the industry leader in terms of cost positions. I don't see us being in a position where we would be idling the capacity. Obviously, we're not running it at full rates, but we will operate it at the rate that we think creates the highest value for Olin.

The next question comes from Frank Mitsch with Fermium Research. Please go ahead.

Hey, good morning. Hey, Todd, I was wondering if you could talk about the plans to tackle the $110 million that's due in June and when -- in the $80 million deferred international tax payment, so we're coming up on close to $200 million. What is your plan of attack? Will it be refinancing involved, et cetera? And then just a clarification, Ken. You indicated that the ECU value is expected to be flat in the first quarter relative to the fourth quarter. So is that -- should we read that the PCI index is going to be essentially flat 1Q to 4Q. Thank you.

Okay. I'll start. Hi, Frank. Yeah, the cash taxes and the $80 million international tax payment that we've preferred for the last couple of years, we really are going to make it. It will be made in the first half of -- excuse me, of 2025. And regarding the roughly $100 million of debt that comes due, we would expect just to pay that with our revolver and it will be neutral from a debt perspective on our balance sheet.

And, Frank, with respect to your second question, the PCI, remember, is an amalgamation of a lot of things. It's not just the ECU. It includes derivatives as well. So you can't say that if ECU values are flat, that the PCI is going to be flat. So..

Frank, as we commented, we do see headwinds pricing of EDC. So that would be a little bit of a negative on the PCI.

The next question comes from Matthew Blair with TPH. Please go ahead.

Thank you and good morning. Is there any update regarding your thinking on potential growth projects? I think at the Investor Day, you talked about some opportunities with the bleach plant in California, the Radford, AMMO bid and the expansion of the Quebec captive plant. As you stand today, could you rank those projects and what's most attractive and what would be least attractive? Thanks.

Good morning, Matthew. Well, listen, I would say that, obviously, the Radford opportunity is one that's going to come in a couple of years, doesn't really require any capital. So I'd say that that is a priority for us. We see that as a very good move for Olin, for Winchester, and that is one that would be a priority for us. I think between the other two, it's going to come down really to economics and timing. So we are studying both of those very hard at the moment. But we will, given the current environment that we're in, we're going to stay true to what we've talked about around our capital allocation priorities and we will have to phase those projects accordingly, but they're both attractive projects and we want to keep them on the books and we'll make a decision at the right time based on our cash flow availability and when it meets the hurdle that we laid out in December at the Investor Day, if we can achieve those two things, which is, meeting the commitments around capital allocation, and meeting the return criteria that we laid out, then we'll move forward. But we're not in a position here today to really give you any clear view on those two projects in terms of priority, that both are attractive.

The next question comes from Josh Spector with UBS. Please go ahead.

Hi, good morning. It's Chris Perrella on for Josh. As I think about the Winchester business over the course of the year, I know sequentially weaker in the first quarter here. You have higher input costs on propellant and the metal. When do you think you outpace those costs with price increases? And does the second half for Winchester, does that look like the first half of 2024, or does it have to build up over a longer timeframe?

Good morning, Chris. Obviously, we've talked a lot in the last year about the cost of propellant and metals and different materials going into ammunition as being a headwind. And we've been working to move that through in pricing in the market. But obviously, that's difficult to do when our customers have built a tremendous amount of inventory and they're working that off. So that's going to take a little bit more time to be able to work down and pass through into the marketplace. So like I said before, I expect to see Winchester's performance improve in the back half of the year. So that's going to be a combination of improved demand and not just from our commercial customers buying more to refill their inventory, but we're hoping to see improved consumer demand out the door at our commercial customers.

The next question comes from Vincent Andrews with Morgan Stanley. Please go ahead.

Thank you. Ken, I actually have a follow-up to your last point, which is, do you have any data on retail sales versus your sell into retail? I'm just trying to see if you have a really good sense of what's -- obviously, your customers are destocking, but have your customers' customers been destocking and are there any bends in those trends that are giving you the confidence about the back half of the year?

Right. Yeah, good morning, Vincent. Thank you. And yeah, listen, we do collect different data and it's from a number of different sources where we look at things that are reported, whether it's gun registrations, gun sales, and those sorts of things. But the point of things. But the point-of-sale data that we look at gives us an idea, but obviously, we are very close with our customers. And so, we get some nice intelligence from them in terms of what their sales are looking like and we're able to estimate inventories. And so, we factor all of that into our outlook and that's why we see the challenging environment here around the inventory continuing into the first half of the year, not just the first quarter.

As there are no further questions, this concludes our question-and-answer session. I would like to turn the conference back over to Ken Lane for any closing remarks.

Thank you, Michael. And listen, we appreciate all of you joining us today. We appreciate your interest in Olin, and we look forward to discussing our first quarter earnings with you here in a few months. We wish you all a great weekend. Stay safe and be healthy.

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