Good morning. And welcome to Olin Corporation's Third Quarter 2024 Earnings Conference Call. All participants will be in listen-only mode. 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. And we appreciate you joining us today to review Olin's third quarter results. Before we begin, I'll remind you that this discussion, together with the associated slides and question-and-answer session that follows, will include statements regarding estimates or expectations of future performance. Please note these are forward-looking statements and that Olin's 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 third 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 now turn the call over to Ken Lane.

Thanks, Steve. And good morning, everyone. Olin's third quarter was significantly impacted by operational disruptions as a result of hurricane Beryl damage. I want to thank our team at the Freeport site for their efforts to restart our assets, which were shut down in early July due to the hurricane. Multiple plants are now returning to normal operations. The Olin team worked through the difficult time safely and expeditiously while facing hurricane-related challenges at home and in their communities. Now turning to our third quarter results on Slide 3. The quarter unfolded slightly better than expected for our chemicals businesses, excluding the impact of Hurricane Beryl, which came in at $110 million versus our initial estimate of $100 million during the quarter. We will have some residual hurricane impact in the fourth quarter due to additional downtime and the completion of some less critical infrastructure repairs. Excluding the impacts from Hurricane Beryl, chlor alkali products achieved a solid quarter with sequential improvement. The aftermath of recent hurricanes also drove third quarter demand for bleach and hydrochloric acid higher in support of water treatment and cleaning end uses. During the third quarter, caustic prices increased supported by some demand improvement in export markets as well as continued constraints in supply related to global industry planned and unplanned outages. Epoxy prices and margins continue to slowly improve, though volumes remain weak. We remain focused on delivering cost reductions during a very challenging market environment. Our third quarter epoxy resin volumes were sequentially lower as we started our planned start at Germany turnaround. Third quarter Winchester commercial ammunition volume fell significantly short of our expectations due to softness in consumer demand at our customers' retail outlets, retailers are now slowing their purchases to normalize inventories by year end. This headwind is partially offset by continued strength in defense demand. Turning to Slide 4. Let's take a closer look at our chlor alkali and vinyls business. With Hurricane Beryl behind us, our Freeport plants are returning to normal operations. Caustic soda is a strong side of the ECU. And with global industry supplies constrained, Olin will stay focused on our value-first commercial model to meet demand. Caustic soda demand continues to be strong with alumina and pulp and paper leading the way. South American demand has been the most robust with two recent world-scale pulp and paper plant startups. Index pricing for US Gulf Coast caustic exports finished the third quarter up by over $100 sequentially, a 30% improvement over the second quarter index. North American merchant chlorine demand remains steady with positive trade press outlooks for vinyls and titanium dioxide heading into 2025. We expect agricultural-related consumption to pick up seasonally late in the fourth quarter. Chlorine into water treatment is expected to slow seasonally and pick up again during the first quarter. Our EDC participation remains disciplined. EDC values are up slightly year-over-year in line with PVC, but we remain diligent to keep our EDC position value-driven. For a look at our epoxy business, let's turn to Slide 5. During the third quarter, we began our planned Stade, Germany outage, which occurs once every six years and is proceeding on plan and budget for completion in the fourth quarter. As the largest and only integrated producer of epoxy in the European Union, Stade remains an important asset for Olin, and that value is expected to increase as we realize contractual cost savings in 2026. Despite improving margins, resin and formulated solution volumes remain challenged in both the US and Europe. The inflow of China-subsidized epoxy continues unabated even with local production costs rising in Asia on tightening glycerin feedstocks. In September, the US International Trade Commission announced preliminary countervailing duties for epoxy imports, which only impacted China. We hope the US ITC's upcoming November antidumping duties will level the playing field across Korea and Taiwan and appropriately value domestic production of these critical materials and stem the flow of unfairly subsidized Asian imports. In parallel, the European Union is also evaluating epoxy antidumping duties with preliminary determinations expected in mid-2025. I'll now turn to Slide 6 for a Winchester review.

Thanks, Ken. Continued macro challenges reinforce the importance of Olin's investment-grade balance sheet and our robust cash flow generation. This strong financial foundation enables Olin to continue running our disciplined value-focused commercial model while also deploying a substantial portion of our cash flow towards share repurchases. Over the last four quarters, Olin has returned approximately 60% of our operating cash flow to shareholders through our quarterly dividends and share repurchases. Over that same time frame, we have repurchased 6% of our outstanding shares. We ended the third quarter with $225.9 million of cash and cash equivalents and approximately $1 billion of available liquidity. Our net debt has increased by approximately $164 million from year end, while decreasing approximately $65 million during the third quarter. After taking into consideration the impact of Hurricane Beryl, our quarter-end net debt to adjusted EBITDA ratio was 2.7 times. We continue to make progress on our cash flow initiatives that we outlined in our last quarterly earnings call. Let me give you a brief update. During the third quarter, we generated approximately $108 million from liquidating a portion of our seasonal working capital build. We now expect working capital to be an approximately $20 million source of cash flow in 2024. We have taken additional steps to further reduce our annual capital spending, targeting approximately $200 million for 2024. As a reminder, we have successfully deferred our international tax payment of approximately $80 million into 2025. While we expect to reduce debt further in the fourth quarter, we believe that net debt at year end 2024 will be approximately $100 million higher than year end 2023. After giving effect to Hurricane Beryl, our year-end net debt to adjusted EBITDA ratio is expected to be 2.6 times. Our teams continue to focus on cash generation, maintaining cost discipline, and exploring additional cost savings opportunities. We are committed to a strong balance sheet with investment-grade credit ratings while consistently returning cash to shareholders. I'll turn the call back to Ken for a few additional comments before we begin our question-and-answer session.

Thanks, Todd. Let's turn to Slide 7 and our outlook for the fourth quarter. Overall, we expect to see a seasonally weaker fourth quarter. Also due to lingering operational issues at Freeport that extended into the first half of October, Hurricane Beryl will present an estimated additional impact of $25 million during the quarter, resulting in a full-year impact of $135 million to our 2024 adjusted EBITDA. Including the Hurricane Beryl impact, we expect our fourth quarter EBITDA to be in the range of $170 million to $200 million. Our investment-grade balance sheet, strong liquidity, and leading market positions continue to support our value-first commercial strategy through this extended industrial trough. Our capital allocation strategy remains focused on returning cash to shareholders. Now on Slide 8, just a reminder, we will be hosting an Investor Day on Thursday, December 12th at the New York Stock Exchange. We truly hope you'll be able to join us live whether in person or virtually to learn more about Olin and participate in our question-and-answer session. Our entire leadership team will be there to provide an in-depth review of our businesses, strategy, and financial goals. Please mark your calendars. Operator, we're now ready to take questions.

Thank you. We’ll now begin the question-and-answer session. Our first question is from Duffy Fischer with Goldman Sachs.

First question is just around the announcement that your competitor Shintech made back in August that they're going to build a large integrated chlor vinyl project in the US. So I just wanted to get your sense on what you think that will do to the market. And also remind us, you've got a relationship with them where you supply them chlorine today, roughly what is the scale or scope of that? And do you think that will be impacted by this plant that they're going to build?

So we've known about this announcement going back over a year. As you know, the strongest growth segment for vinyls or for chlorine is vinyl. So it's not surprising that you see companies like Shintech that are already in a leading position for PVC to be announcing growth plans. Obviously, we're going to stay close to them in terms of what they're doing. Yes, we've got a relationship but I don't see that being a negative for our relationship. They want to continue to grow their business and ultimately, I think that's part of their strategy. So it's to be expected.

And then if you would, maybe just give us a little preview of the Investor Day, what is it that you think investors will take away from that or what is it that you want to strategy wise kind of show to investors?

Well, listen, I do think that it's important. We've not done one of these for a few years, I think it's five years since we had done it. So it's going to be important for people to understand how we're thinking about our portfolio. We've been doing a lot of work around that, and we feel like we've got a very good portfolio of leading positions in all the businesses that we have. So just resetting some of the things around our financial targets longer-term, where we see the growth potential of the company, that's going to be a really important part of the discussion. The other side of it is we've got a management team that has really experienced a very strong team that I want you all to get to know better, that's something that's going to feature pretty prominently. You're going to have an opportunity to hear from each one of the business leaders about how they see things for their businesses going forward. And I think that's an important step in our evolution with a relatively new leadership team, but again, a very experienced team.

A question around your Q4 guidance. I appreciate how you guys broke out the hurricane impact. So I mean, just the way I see it is the hurricane impact was $110 million worth of an EBITDA hit in Q3, and you're guiding to a lingering $25 million sort of EBITDA hit in Q4, yet the uptick from Q3 to Q4 in EBITDA is $10 million to $40 million. So I'm just trying to understand that despite some of that EBITDA coming back on the back of sort of ramping up operations and the like. I mean, why is the EBITDA not going up more, is it exclusively because of seasonality?

So I think that a big part of it, yes, is seasonality when you think about the chemicals business. So we're talking about normal seasonality in a trough market. Okay? So we're not saying seasonality is any more than in a normal year but it's in a market where we're already seeing relatively weak demand. So there's not anything abnormal to what we're indicating for Q4 for the Chemicals business. I think what people have probably overlooked somewhat is around Winchester. Winchester is typically weakest in the fourth quarter, and so what we saw in Q3 with our customers reducing their inventory at their retail outlets, that's going to carry into Q4. They just did not see the recovery in demand and they were buying ahead of this even going back into Q4 last year, knowing this is an election year. And seeing some of the cost increases that were coming, they were buying pretty heavily ahead, expecting that demand to step up in the second half of the year. That just hasn't materialized, and that hit us pretty hard in Q3. It's not going to hit us quite as hard as Q4, but it's coming down. And again, there is seasonality in Winchester as well. So I think that's the part of the equation that's probably not been picked up as much.

I appreciate that you have your December Analyst Day coming up, where I'm sure you'll discuss 2025 and beyond. Could you provide an early preview of your thoughts on 2025, even if just in a general sense? Rates are decreasing, and historically, your operating rates were around the 60s while the industry was in the 80s. It seems that if there is restocking, you would be well-positioned to gain market share. Beyond the seasonally weak Q4 you've already mentioned, can you share any qualitative insights about 2025 and the future?

When I think about 2025, I think the theme of uncertainty that we've seen in the back half of this year is going to continue into 2025. And as you know, we've said we're no longer going to give annual guidance, and the reason for that is because of the amount of uncertainty. It just creates a lot of issues in terms of crystal ball, which we don't have. I do think that sitting here a year ago, if you listen to pretty much all industries, they were expecting the back half of this year to look better. Right now, I would say that next year, with the uncertainty that we have, probably is going to look pretty similar to this year from a market standpoint until we really see more aggressive cuts in interest rates. You've probably noticed here recently interest rates have actually ticked back up. So that's just adding to the uncertainty in the environment. I'm not sure exactly where things are going to end up. Once we see housing come back, then we're going to start to see the demand come back. And until we see demand come back in housing and some of the other markets that are going to be driven by those lower rates and industrial activity following, I don't think that you're going to see that sort of spring unloading where we would see the benefit. So we're anxiously awaiting to see when that's going to happen. I still believe firmly that we will benefit from that. And we're going to continue to be disciplined and focusing on volume at the value that we like in the marketplace, that's not going to change. I think that's more important now than ever. And so that's how we're going to play it going into next year.

I guess, I'll just ask on some of your main end markets, what you're seeing as far as supply demand, specifically for caustic soda. There were some disruptions late in or earlier maybe at a peer site and there was maybe some tightening. It looks like there's been some stable demand. Have you seen any signs of potential pricing opportunities in caustic? And then similarly, maybe you could provide some comments on EDC and epoxy if anything?

For caustic, we continue to see strength. There have been several outages in the third quarter that extended into the fourth quarter, which will impact global supply. It's not only the outage we experienced at Freeport. Regarding end-use demand, the strongest areas are in the export market. Export pricing has firmed up and risen significantly during the third quarter, continuing into the fourth quarter. The paper and pulp sector remains strong, with some new capacity coming online in South America, and we have also observed strength in Southeast Asia. Alumina is performing well, with tightness in the aluminum market providing additional support for caustic pricing. Overall, we feel positive about the caustic market, which has been steadily improving throughout the year. As we anticipate industrial activity to pick up next year, the demand for caustic is expected to continue tightening, bolstering pricing in the market. We remain optimistic about the caustic market moving forward.

And then if I could just ask a couple of follow-ups on that. So I guess when you think about Epoxy, it sounds like you're expecting a date in November, where I get maybe an update on the antidumping situation. I guess, what are your expectations for that? And does that maybe drive some optimism about that business for '25? And I guess when you think about that, if you were to add back some of your impacts, the 135. Is that the only driver that you really see adding back for '25, or would there be some other potential uplift to '25 EBITDA?

One of the positive factors is that we are not anticipating another Hurricane Beryl, which is certainly a relief. We are expecting the US government and the ITC to make an announcement in early November. However, since it's government-related, I want to temper my optimism and pessimism. We have done everything possible to argue that this situation involves unfair trade practices and I hope you had a chance to read the op-ed I published about a week ago. We are actively supporting our case, and we will see how the ITC responds. Throughout the year, we have seen some success in gradually increasing prices, but that has been challenged by strong incoming volumes from Asia, which is still concerning. We are hopeful for a favorable outcome in early November, but at this point, I can't predict whether it will be positive or negative.

In 2024, did you come close to making any acquisitions of size?

Jeff, we're not going to comment on anything that may or may not have taken place. As you know, I've been here about six months, and we've been spending a lot of time thinking about the future of the company and the strategy going forward. We've been pretty open that where we see opportunities for small bolt-on acquisitions that are highly accretive like what we had done with White Flyer, we see opportunities like that, we may take them. But our focus has really been on thinking about the future of the company and getting a position coming out of this trough to show the performance of the company that we think we've got the potential for. But that's all I can say about that for now.

And in the chlor alkali business, in the third quarter, overall, did prices go up or down sequentially and by how much? And likewise, in Winchester, how much did prices go down sequentially?

Jeff, looking at the PCI, it has trended down slightly. This was primarily due to noise related to the portfolio mix from Hurricane Beryl. We have continued to observe strength in caustic pricing and stability in chlorine pricing. The market has developed as we anticipated for the third quarter, aligning with our previously stated outlook. We expect this trend of stable chlorine pricing and firming caustic pricing to carry into the fourth quarter.

And at Winchester, how much did things fall?

Winchester was volume related. It was not related to pricing. We've actually got a price increase that we've put out there for the beginning of the year, reflecting the continued higher cost base that we're seeing related to metals and propellants. So we're looking to recover some of that with the price increase that we put out there for January 1st.

I wanted to come back to Shintech. Is it a realistic scenario where you need to replace them as a customer after 2030, I guess, or is it a pretty low probability scenario? And does the outcome of this depend on whether Shintech builds this new project or not?

It's important to recognize that five or six years from now is still quite a ways off, and there are many factors that could change before then. We have previously mentioned that we hold a strong position in vinyls at our Freeport site, and we will continue to explore future options as circumstances develop. We are not going to remain inactive and will consider various scenarios. However, at this moment, I cannot provide any insights or indications about what might occur in 2030, as it is still too early to tell.

And then in epoxy, you were $200 per ton price increase. Can you tell us how successful it was so far and what do you expect from that in Q4 and Q1?

So we announced that for October 1st, and we are optimistic we are seeing some traction on that price increase in Q4. I mentioned it a minute ago, we're still seeing the volume coming in from Asia. So I think some people are starting to maybe react a little bit to concerns around what may happen with tariffs. But we have seen some success in implementing that price increase. It's really too early to say for the quarter. But I do think we're going to see some price gains in epoxy resins in Q4. But it did not make up anywhere close to where we need to be to get back to a reasonable level of margin there.

I wanted to ask on the fourth quarter guide relative to what you delivered in first quarter in chlor alkali vinyls. If you exclude the hurricane impacts, it's kind of similar, fourth quarter and first quarter are sometimes up, sometimes down. But I think if we look at the moving parts, caustic prices have moved higher. Your goal was to bring operating rates up, maybe that hasn't happened to the hurricane or other pieces. But are there other factors that we should be considering why fourth quarter earnings would be lower kind of in the context that I frame out there?

Yes, I go back to what I had mentioned earlier. We've got a $25 million impact, it's lingering from Hurricane Beryl in chemicals. We've also got lower profitability that we're expecting from Winchester. Again, it's that seasonality and that's really been accentuated by the destocking that we see at the retailer. So it's a combination of those two things. But in general, I would say that caustic pricing is better than what we had in Q1. And if you take out the impact of Hurricane Beryl, volume wise it's probably looking pretty similar to Q1 of 2024.

I was asking specifically about chlor alkali vinyls and excluding the hurricane. So I guess your volume comment answers a piece of that caustic prices are higher. So I guess, to some extent, we'd expect earnings to be higher. It seems like there's something else offsetting, but I'll ask related to that, my follow-up around chlorine pricing. You talked about it flat and more mix effects, but in your slide in the appendix, you show it as a negative sequentially. So is that really small and it's just noise or is there any other maybe change in strategy or approach to maybe chlorine prices and related to that volumes that you'd highlight?

No, Josh. That really is related just to mix with the hurricane impacts. We had a lot of capacity down, and that did impact our participation in the market, obviously. And unfortunately, it just is a mix effect related to that, no change in strategy.

So Winchester third quarter EBITDA is down about $20 million versus the first quarter, and the Winchester was supposed to benefit from the project to build capacity on behalf of the US government. Does this mean that core EBITDA in Winchester is down more than $20 million?

No, I would not say that. What we've seen is that we are ramping up the project for the next generation squad weapon facility, which is just now starting to increase in Q4. This has resulted in some dilution effects on the EBITDA margin. However, the decline is mainly linked to the commercial ammunition sector, and as I mentioned earlier, it is more related to volume as retailers are expected to be destocking, likely into the first quarter.

And then somewhat related, how should we be thinking about the 2025 implications for some of these headwinds you're seeing in Winchester?

Well, I had mentioned it before. We have announced a price increase because we still see a headwind related to higher costs for metals and propellants, but we do need to see demand coming back to get back to where we were in terms of the earnings for Winchester, let's say, in the first half of the year. But it will take some time for the retailers to get the inventory back down. And believe me, we see them moving to get their inventory levels back down by the end of the year. That's why you saw such a big impact in Q3.

Ken, I'd appreciate your updated thoughts on chlorine and maybe over the medium term. If I look at the bottom right of your Slide 10, it's been the weaker side of the ECU for about a year now and that's expected to continue in the fourth quarter. What needs to happen for the chlorine market to retighten? At a high level, I think a lot of managers would argue that we've been in an industrial recession. I normally think of caustic demand as being more industrial in nature. And yet caustic has been the stronger side and action overseas, as you pointed out, has been encouraging in caustic, I think. So it seems to me we need chlorine to retighten and turn around. Is it the case that that's happening but it's being masked by seasonality? Do we need vinyls to be more vibrant going into next spring? How would you characterize the potential for inflection in chlorine over the next few quarters?

Kevin, if you consider the chlorine market going back to pre-COVID, the demand has not returned to previous levels. This is largely due to the lack of recovery in housing and durable goods demand, including automotive and appliances. Once we see that recovery, chlorine demand is likely to improve, especially as PVC starts to rebound along with housing. This will likely drive chlorine demand for PVC, and as housing improves, we can expect other markets, such as titanium dioxide, to recover as well. All these factors could lead to a stronger chlorine market, but we need to see an increase in demand, especially from vinyls, which are the largest consumers of chlorine, before we can expect significant changes.

And then I had a few hurricane housekeeping questions. So of your $110 million hit in the third quarter, how did that split between chlor alkali and epoxy segments? And maybe you could comment similarly for the anticipated $25 million in the fourth quarter.

In the third quarter, roughly $77 million was in chlor alkali and the remainder was in epoxy, you'd say roughly 33 there. And then as you think about the 25 for the fourth quarter, you should think about that in chlor alkali.

Just want to drill into Winchester a little bit. The EBITDA margin was 14% in the quarter. How wide is the spread on that between commercial versus military? Do you have the ability to push price in military ammunition, and high level are you the best owner of this business?

Steve, I had mentioned before as we ramp up the project work at Lake City, that's going to be dilutive around the military business that we have or Winchester overall. In terms of pricing, pricing is definitely more flexible in terms of our international military business. That business is done more on a spot type of a basis than a contract basis for the contract that we've got for Lake City, that's on a more longer-term contract basis that's got some things that are passed through and some that aren't. So it gets to be relatively complicated. But we've said it before, obviously, the commercial business that we have is the highest-value business that we've got in the portfolio. We like to have more of that. The future though, in terms of growth and opportunity, is going to continue to be around the defense space and how we position ourselves there. I think that there are some good linkages with Olin in terms of Winchester. We're going to talk more about that at the Investor Day. But ultimately, Winchester is the best brand in the industry and is a very valuable business for Olin Corporation.

And maybe just one more portfolio-related question, and that is, in a year from now when the contract with Dow, have you given more thought and have a conceptual interest in what to do with that chlorine capacity and low-cost ethylene? Do you have some thoughts on that?

Steve, when we're developing our long-term strategy for the company, especially with the upcoming Investor Day, our portfolio will be a key topic of discussion. This includes not just our businesses but also our assets moving forward. We'll provide more details on this at the Investor Day in December.

I wanted to go back to the Hurricane Beryl impact, and I apologize if I missed it. But what exactly was incremental in terms of what actually played out relative to what you expected in your operations a few months ago that's driving the incremental, say, $35 million cost?

So basically, what happened is in the third quarter, we had a little bit more impact than we had expected. Some of that was related to additional repairs that we had to make. And then the carryover into the fourth quarter is related to some operational issues that we had. When we shut these plants down in an emergency fashion, sometimes things happen in the plant that you can't necessarily see when you restart and that's what happened in some of the assets. When we restarted, we thought we had everything in good shape. As it turned out, we still had some issues that we had to come back down for and make some additional repairs. We completed that just over a week ago. So we got about 10 days or so of runtime. So we're feeling good about where we're at right now. I will tell you, because this may get asked later, we had to build some temporary infrastructure that we're still operating there. And we're going to be operating that temporary infrastructure until probably the middle of next year, which we don't particularly like, but we had to do it to get the plant back up until we can build the permanent fixes. So that's something we're going to continue to deal with. But we think in terms of cost, operating costs, and meaningful impact to the P&L, we've got that all behind us.

And then second, Dow initiated a strategic review yesterday of some of their European assets, and I believe that includes their Stade data complex. I guess, one, are there any Dow assets there that would be of interest and fit to Olin? And two, if they decide another outcome there, how, if at all, does that impact your Stade operations?

Mike, I really don't know enough. I saw the announcement just like you did, but I don't know enough about what they're doing to make any comment there. Stade is a site that has been really challenged for us in our portfolio, and we've been able to work through that without to get to an agreement that at least helps to improve the viability of that site for Olin. That really doesn't kick in until 2026. As you can imagine, we're constantly talking to Dow because we've got such a strong relationship with them in terms of interdependency, and we'll continue to have discussions with them. But I don't have anything that I can comment on. I just don't know enough about what they're doing.

Maybe first on the Winchester side of things, you mentioned the destocking impact to end around the first quarter. Are you also expecting some easing of the higher propellant costs given some of the weaker demand from the commercial side of the industry right now? And I guess the broader question is, do you expect margins to go back to the 19%, 20% after the first quarter?

It has been very challenging in terms of propellants in terms of the cost. One of the nice things is, from an availability standpoint, as large of a buyer as we are, we've been able to do a good job of securing volume. But again, it's a headwind in terms of cost. But the increased demand and people trying to catch up with additional production capability around propellants and the materials that go into the propellants, we're still seeing that well into the future. If you just look at the requirements on propellants that are going to be needed just to restock things, even if peace were to break out immediately, the restocking is going to go on for quite some time. And that's going to continue to keep pressure on propellants until you see new capacity coming online, which is going to be a year or two out in the future.

And then maybe circling back to the chlor alkali. If we add back the Beryl impact you highlighted during the quarter, that would suggest EBITDA would have been up sequentially around 10%. That seems to contrast with your ECU index on Slide 10, which actually moved down during the quarter. So was it stronger volumes that you saw, maybe stronger exports or some other dynamics that you can share and maybe how those are trending in the current quarter?

We've noticed that the PCI is more related to mix and represents an average across the entire portfolio. What we observed in Q3 aligned with our expectations, showing stable chlorine prices and strengthening caustic prices. Margins have shown some improvement, though it's gradual and not sufficient. Regarding epoxy pricing, volumes decreased when excluding the Beryl effect, but there was continued strength in caustic and stable chlorine. Overall, when excluding Beryl, we experienced a slight improvement compared to what we anticipated.

Are the Vista Outdoor activities having any impact on the competitor or customer dynamics at Winchester?

It's very hard to say. We're not seeing any different behavior than normal. They're a competitor in the marketplace, and that's all that I can tell you. I don't know if it's impacting how they're behaving or not. What we see them doing is participating in the market that is difficult with retailers destocking, and that's all I can say. I don't know if they're changing their behavior based on what's happening around that sale process or not.

And then why do you think the higher glittering costs in China aren't having any impact on pricing?

Well, I think that's exactly supporting our case for the tariffs. They continue to produce low cost and push that volume into the market, which then allows other epoxy resin producers to export below cost. And that's exactly the case that we're making to the US ITC and to the EU.

Why don't you think the pricing is even lower then if glistering costs don't matter?

I think it's related to the amount of supply that they brought on. So they want to operate their assets. They've added a lot of capacity, and they want to run those assets and they're willing to do it at a loss. That's all I can tell you.

Staying on epoxy. How do imports in '24 into the US compare versus '23?

Well, we're still seeing significantly higher import volumes, and that has really been unabated. So we're not seeing any in that tide. It's continued to grow. And as I just mentioned to John, as they add capacity, they're going to continue to push that volume into the market. We're not seeing that slow down at all.

But do you have a number for the increase year-over-year?

I don't, Dave, but I know that it has increased, but I don't have a percentage.

And just in chlor alkali, once everything is back up and running, where do you expect or where you want your operates to be, and how would that compare to where they were at the beginning of the year?

Well, Dave, we're not changing our strategy. We're going to continue to focus on placing the volume in the market at the value we like. We did have a lot of downtime in Q3. We've pulled inventories quite significantly. We're not going to go crazy trying to run the assets harder to make up for lost time. That just doesn't make sense. We're going to continue to be disciplined and stay focused on operating in a way that creates the highest value for Olin.

Sherwin-Williams mentioned that they expect the first half of 2025 to be similar to the second half of 2024, which might provide a decent indication for the housing market. If that is the case for you, it could indicate an extended downturn. How do you foresee EBITDA improving, if at all, in a sequential manner? While we will account for Beryl, what other strategies can you implement in the first half of 2025 to demonstrate improvement if the market conditions do not significantly change?

We've got to stay focused on cost discipline as well. The teams have done a very good job adjusting to the environment that we're in and doing what we can to help ourselves. So where we can take costs out where we can reduce capital spending, which we've shown, we've taken another step there in the fourth quarter, we'll continue to do those things to maximize the cash flow. And that, combined with our commercial strategy around staying focused on value and not pushing volume, that's the equation for success in the trough. And that's where we've got to continue to stay very disciplined with that.

And then one quick follow-up. A lot of companies use their Analyst Days to make some sort of pivot or change to the strategy, you've been there quite some time now. Any thoughts? Are there any major changes or pivots you think you might have in the strategy or are we going to hear a little bit more just like tweaks here or there or highlights of what you want to do?

Mike, I hope I'm going to see you there because then you'll find out.

I want to come back to the PCI on Slide 10, I know Ken you said that the decline was largely due to mix and so forth. I was wondering if you could add a few more details on it, what specifically led to that decline? And we're at levels now back to 2021. If it is a mix and so forth, what would that normally be, what are your expectations for 4Q?

If you had split out Beryl, which that PCI includes the impact of Beryl, we didn't do any sanitization of that. I would have expected it to be relatively flat to where we were in Q2. But again, that's a portfolio of all customers, all products. So there are a lot of moving parts. The biggest impact, though, was the downtime around Hurricane Beryl.

So flattish is where it would have been and that's probably not too far off from where you think 4Q might be?

Yes, that's correct.

And given where the share price is today, just curious as to how we should think about the pace of buybacks in 4Q?

So Frank, I think what you're going to see is probably a similar level. We adjusted midyear as we saw the earnings outlook declining. Obviously, we did not anticipate Hurricane Beryl, but we did adjust to a lower level as we observed that happening. I would expect Q4 to look probably similar to Q3. We will continue to monitor that closely as we approach next year and assess the earnings heading into Q1, but that's how I would think about Q4.

This concludes the question-and-answer session. I'd like to hand the conference back over to Ken Lane for any closing remarks.

Thank you. So listen, I want to say thank you, everybody, for joining us. Just a reminder, we do have the Investor Day coming up in December. I look forward to seeing you all there in person. And wish you all a great weekend and stay safe and healthy.

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