Good morning, and welcome to the Olin Corporation's First Quarter 2025 Earnings Conference Call. All participants will be in a 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. We truly appreciate you joining us today to review Olin's first quarter results. Please keep in mind that today's 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 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 first 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 related 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 some prepared remarks, then we look forward to taking your questions. In order to give everyone an opportunity, we will limit participants to one question with no follow-ups. I'll now turn the call over to Olin's President and CEO, Ken Lane.

Thanks, Steve, and thank you to everyone joining our call today. Let's start with a few first quarter highlights on Slide 3. Looking across the global macro environment, economic uncertainty continues to dominate the narrative. Against this backdrop, everyone here at Olin continues to focus on the path we laid out during our Investor Day while closely managing the factors within our control and advancing our value creation strategy. As a result, we're increasing our cost reduction target to $50 million to $70 million related to productivity and structural cost improvements for full year 2025. During the first quarter, our Chlor Alkali products and Vinyls business exceeded expectations as several planned and unplanned industry outages reduced first quarter chlorine and caustic soda supply. In response, we delayed the planned first quarter outage at our Chlor Alkali facility in Freeport, Texas, to meet customer needs and we're pleased to help many customers during the tight market conditions. This is in line with our value-first commercial approach, and as we've consistently said, Olin is ready to raise operating rates to meet demand at fair values. We view this as a positive turning point for our Chlor Alkali sector that will be more apparent as we emerge from this extended trough environment. During the first quarter, we also saw stable ECU values continue with positive pricing trends into the second quarter. In our Winchester division, domestic and international military ammunition volume continues to grow while commercial sales continue to be weak as retailers destock, coupled with lower consumer sales. Also during the first quarter, Olin took advantage of historically narrow spreads and successfully refinanced our nearest debt tranche through a bond issue and bank refinancing. This pushed our nearest debt maturity out to 2029 and positions us very well to weather the uncertain environment we see today. As we manage through this challenging economic environment, we're taking important steps to advance our strategy and strengthen our business. Slide 4 reviews several of our recent actions. Our optimize and grow the core strategy introduced during our December Investor Day outlines our path forward, and we took several steps to advance that strategy in the first quarter, continuing our commitment to a value-first commercial approach, accelerating structural cost reductions, and maintaining our disciplined capital allocation framework, all while not losing focus on the high-value growth opportunities laid out in December. As an example, we made solid progress to implement our Winchester growth strategy. I'm pleased to report that Winchester has been awarded a three-year contract extension to continue operating the Lake City GOCO2 Ammunition facility through 2030. Additionally, we closed the acquisition of AMMO Inc.'s Ammunition assets. We've also been focused on enhancing our organizational accountability. We've aligned each employee's incentives with our corporate goals and strengthened our equity plans to increase engagement and retention. Also, we consolidated our chemicals commercial talent to our Houston office to facilitate greater cross collaboration and teamwork. And finally, we established Clayton, Missouri as our Winchester headquarters. Now let's turn to Slide 5 to review our Chlor Alkali Products and Vinyls results. First quarter CAPV EBITDA was up slightly with increased chlorine and caustic volumes as we continue to focus on value and push for price gains on each side of the ECU. We expect caustic to remain the stronger side of the ECU and see positive pricing trends going into the second quarter. As mentioned earlier, we delayed the start of our planned Freeport, Texas turnaround to opportunistically capture spot demand created by planned and unplanned industry outages. During the first quarter, we reengaged with several chlorine customers seeking interim supply. The turnaround delay is reflected in our updated expense data on Slide 17. This delay will result in $33 million higher sequential turnaround expense. Despite this headwind, we still expect to deliver sequentially similar Chlor Alkali adjusted EBITDA in the second quarter. As we continue to navigate this unusually long trough, Olin's ECU values and volumes have proven remarkably resilient across the past six quarters as we implement our disciplined value-first commercial approach. PVC was another highlight in the quarter as we delivered our first shipments of Olin PVC during March, marking a key milestone for our PVC business development. In addition to our entry into the PVC market, we're adding value to every ton of EDC we toll with ChemOne. As we discussed at our December Investor Day, we're exploring potential long-term PVC strategic opportunities, including long-term commercial arrangements, available production technologies, and the evaluation of joint venture partners. With respect to current tariffs, we do not expect the direct impact on CAPV to be significant. Olin's export sales, mainly caustic soda and EDC, are generally sold to low-tariff countries. One potential positive effect may be to tighten U.S. caustic supply as tariffs challenge the economics of Asian imports to the U.S. West Coast and European imports to the U.S. East Coast. Now let's turn to Slide 6 for a brief look at our Epoxy results. First quarter Epoxy sales improved sequentially, reflecting an increase in both resin prices and volumes. However, the margin benefits of improved pricing were more than offset by higher costs. Last month, the U.S. Commerce Department issued their final Epoxy antidumping decision. Olin was encouraged that the antidumping duty percentages for selected countries were raised beyond the preliminary determination. However, we remain concerned that the Commerce Department lowered the duty percentages for certain countries, in particular, South Korea. The European Union announced their provisional Epoxy resin antidumping duties during the first quarter and expects to conclude the investigation by issuing definitive measures during the third quarter of 2025. Today, South Korea, the largest importer of Epoxy resins to the European Union, unfortunately remains exempt. Bulk Epoxy resins subject to antidumping duties represent less than 25% of our overall Epoxy division sales. Current antidumping duties provide minimal upside value. We will continue to advocate for fair trade practices here and in Europe, pursuing every available avenue. Looking ahead, building and construction, automotive, and consumer electronics demand remain weak in the U.S. and Europe. We are seeing mild seasonal demand improvement, but nothing we would consider as demand recovery. Second quarter Epoxy results will include a planned Stade, Germany, turnaround estimated to present a $10 million sequential headwind. As a result, Epoxy earnings are expected to remain negative. Slide 7 provides an update on our Winchester business. Winchester domestic and international military sales continue to grow as anticipated. Military project spending accelerated through the first quarter and is expected to continue gaining momentum throughout 2025. Commercial ammunition demand continues to be weak. We're seeing mid single-digit pullback across sporting goods, hunting, and gun sales. However, commercial ammunition sales have declined more than the sporting goods category. Ammunition retailers are destocking in parallel with consumers. You may recall that ammunition retailers built very high inventories during the first half of last year in advance of expected propellant shortages and the Presidential election. Lower out-the-door retail sales have made destocking a lengthier process, which will likely stretch into the second half of 2025. Winchester costs for metals are rising due to tariffs and tight supply. Propellants also continue to present a cost headwind. Although Winchester buys most metals locally, we still realize tariff-related price inflation on the domestic price of steel, aluminum, and copper. At the same time, tariffs may also provide a tailwind for Winchester as ammunition imports will now carry at least a 10% penalty. And in order to reduce U.S. trade imbalances, country-level tariff negotiations are promoting the increase of defense-related U.S. exports, including small-caliber ammunition. Now turning to Slide 8, this past month, we were pleased to close on the acquisition of AMMO Inc.'s manufacturing assets. Winchester's timing for the purchase of this state-of-the-art ammunition production facility was ideal. We were able to acquire a modern plant with a skilled workforce at a highly attractive adjusted purchase price of $56 million. We've begun integrating this new plant to optimize production across our assets in order to begin realizing our target synergies and extending our scale benefits to this new production site. As detailed during our December Investor Day, Winchester is an iconic brand and an excellent platform for growth. In addition to being immediately accretive, the showcase expertise we acquired will support a new area of growth for Winchester. The value-creation potential of our Winchester platform is significant and this acquisition absolutely exceeds our investment hurdles at less than approximately 1.5 times adjusted EBITDA, including synergies. Let me now turn the call over to Todd Slater to walk us through some financial highlights.

Thanks, Ken. I'll start with Slide 9 for a review of our sequential quarterly adjusted EBITDA bridge. The adjusted EBITDA comparison from fourth quarter 2024 to first quarter 2025 is highlighted here by business. Our Chlor Alkali Products and Vinyls business benefited from our decision to delay the Freeport maintenance turnaround until the second quarter, resulting in higher sales than expected and lower turnaround costs. As we anticipated, our Chlor Alkali results were affected by lower ethylene dichloride, EDC pricing. Our Epoxy business continued to benefit from modest Epoxy resin price improvements and saw lower-than-normal seasonal volume increases. But this favorability was more than offset by higher raw material and operating costs. Winchester results were negatively impacted by lower commercial ammunition demand. In addition, tariff actions have raised the domestic cost of commodity metals, further pressuring Winchester commercial margins. These higher costs have proven difficult to pass along in the weak demand environment. Now let's turn to Slide 10 for a look at our cash flow and liquidity. The increasing uncertainty in the macroeconomic environment reinforces the importance of Olin's investment-grade balance sheet and strong cash flow generation. During the first quarter, we further enhanced our financial resiliency as our team executed a well-timed bond issuance and debt refinancing, which provided a leverage-neutral extension to 2033 of our nearest bond maturities, as well as an extension of our senior credit agreement from 2027 to 2030. We now have no material required debt repayments until mid-year 2029. We have the tools, discipline, and flexibility needed to deliver resilient operating cash flows across the cycle. As we expected, first quarter 2025 operating cash flow was negatively impacted by our normal seasonal working capital growth. By year-end, we expect to liquidate our seasonal build-in working capital and in fact, expect working capital to be a source of cash flow for 2025, excluding the timing effects of cash tax payments, including the payment of approximately $80 million for the deferred foreign tax payments that we previously discussed. To further enhance our 2025 cash flow, we've reduced our capital spending estimate by approximately $25 million to the range of $200 million to $220 million. Through additional productivity initiatives, we've increased our year-over-year cost savings expectations to $50 million to $70 million, which is more than double our previous outlook. Consistent with what we discussed last quarter, we expect our net debt to increase during the early quarters of 2025 due to the normal seasonality of working capital, the ammunition acquisition funding, and cash tax payments. But by year-end 2025, we expect net debt to be flat with year-end 2024. We remain committed to the disciplined capital allocation approach we shared during our most recent Investor Day. Our capital allocation priorities are clear. First and foremost, we maintain our investment-grade balance sheet. Second, we fund our sustaining capital spending to maintain the safe and reliable operation of our assets. Third, we're committed to maintaining our quarterly dividend. And then fourth, any available free cash flow is returned to our shareholders via highly accretive growth opportunities such as the recent ammunition acquisition or share buybacks. Our teams continue to focus on cash generation, maintaining cost discipline, and exploring additional cost savings opportunities. Our strong financial foundation enables Olin to continue executing on our value-first commercial approach, while adhering to our capital allocation priorities and a prudent capital structure with a strong balance sheet and cash flow. Now, I'll hand the call back to you, Ken.

Thanks, Todd. Let's turn to Slide 11, and our outlook for the second quarter. Our Chlor Alkali products and Vinyls business continues to perform well. We're holding true to our disciplined value-first commercial approach and the proof of our success lies in our ability to preserve value, even though this deep and long economic trough. Caustic Soda prices are rising and we're seeing seasonal recovery in demand for bleach and caustic soda. Our Epoxy business is slowly improving, but still faces significant challenges. We're making good progress with our self-help efforts as we continue to focus on cost control and growth in our more profitable formulated solution product lines, but the global capacity overhang will continue to be a headwind for the foreseeable future. The commercial ammunition market is also challenging at the moment, but this is not structural. Consumers are cautious and have pulled back at the same time that retailers are trimming inventories and tariffs are inflating metal costs. This combination will continue to weigh on Winchester earnings in the second quarter. However, our military and law enforcement business outlook remains robust. Against the backdrop of heightened macro uncertainty, we expect our second quarter 2025 adjusted EBITDA to be in a broader range of $170 million to $210 million, including an approximate $40 million sequential chemicals turnaround expense headwind. We expect the overall direct impact of tariffs to be net neutral to Olin earnings. We say this as we generally source and sell where we produce. We can't speculate on potential indirect or secondary tariff impacts, including effects on demand. Finally, as we've discussed today, we continue to navigate this challenging environment by managing the factors that are within our control and by executing our long-term strategy. To that end, I'm delighted to share that yesterday, retired U.S. Army General Edward M. Daly was officially elected to Olin's Board. General Daly's last assignment was as the 20th Commanding General of the U.S. Army Material Command, where he oversaw 190,000 people across more than 150 countries. General Daly provided logistics and material readiness across the U.S. Department of Defense and the Joint Forces. As part of Olin's Board, General Daly will provide invaluable input and guidance related to our company's strategy. Operator, we're now ready to take questions.

The first question today comes from Patrick Cunningham with Citi. Please proceed.

Hi, good morning, Ken and Todd. Could you provide an update to sort of volume and price outlook for Chlor Vinyl sequentially? It seems like you got a clear signal on further price support in the first quarter. How would you characterize the pricing across the major derivatives, particularly EDC as it's been the weakest one?

Good morning, Patrick. Thanks for joining us. Yes, so we are continuing to see weakness, particularly around the EDC pricing, but we don't see it getting significantly worse than where it is now. Price levels have already reached a point where even Asian producers are underwater, and that's going to keep a floor under EDC pricing. So like we said in the prepared comments, we see positive pricing trends going into Q2, particularly around caustic. And so with the seasonal improvement that we're expecting there, combined with improvements that we see seasonally with bleach, we feel really positive going into the second quarter around price developments for chlor-alkali.

The next question comes from Aleksey Yefremov with KeyBanc. Please go ahead.

Thanks. Good morning, everyone. You mentioned that you're adding value for every ton of toll PVC. Should we assume that your PVC resin is generating positive cash flow? Additionally, how do you plan to increase your Kem One tolling volumes for the rest of this year?

Good morning, Aleksey. Thanks for the question. Yes, we're going to be ramping up through the end of the year. There's obviously uncertainty just around the economic environment, but we've had a very positive reception in the market with our sales team for PVC volumes. It is cash positive to us for the PVC sales that we're tolling through Kem One. And I think that just shows the strength of the advantage that we've got in our structure that we're going to continue to leverage. Longer-term, we see this being a very positive growth opportunity for us. And I'm extremely proud of the team and what they've been able to do in a very short amount of time. We've assembled a small team. They've managed to get into the market and realize some sales and start building a portfolio with customers and it's great to see. So we're really excited about the things that are happening today, and we're setting ourselves up for a really positive future here.

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

Good morning, Ken and Todd. Question, it seems in Q1, you guys talked about it in your prepared remarks that you took advantage of some industry outages. So just trying to get a sense of historically, you guys have talked about your operating rates being in the 60s on the CAPV side of things, the industry running at maybe in the 80s. So just trying to get a sense of where your operating rates were in Q1, particularly as you took advantage of those industry outages.

Good morning, Hassan. Yes. I mean, listen, what you said is correct. We did take advantage of some of the increased spot demand that we saw in the first quarter and deferred that turnaround during Q1, which as a result did elevate our operating rates during the quarter versus what we thought. You may remember back in the earnings call for the fourth quarter, we had indicated volumes would be softer in Q1. That turned out not to be the case because we were able to run a little bit harder and deliver products that our customers needed. Frankly, some customers that we've not supplied in a while, which was nice to see. But again, that was spot demand. So we're going to be opportunistic with that and continue to be disciplined. But what we are seeing as a result is, in Q2, our operating rates are back down as you would expect because the turnaround has moved into Q2. So it just reflects exactly what we've been saying is continuing to be disciplined and operating at rates that reflect the values in the market that we want. And we continue to see strength on the caustic side of the ECU, and we're going to balance that with the demand around chlorine at the value that we like.

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

Thank you. Good morning. Ken, on the same topic, do you expect to retain any of the spot business you realized in Q1 going forward?

Thanks for the question. Good morning, Dave. So, listen, I think just by definition, it's spot volume. So it is opportunistic. And what I expect is we're going to continue to see some volatility as others have turnarounds either planned or unplanned. You're going to see some opportunities for us to sell a little bit more volume here and there. But I would not say that that is going to be consistent because we've not contracted that volume and that's by intention.

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

Hi, good morning. I wanted to ask just on Winchester kind of two things. First, can you kind of give us a bridge year-over-year between what's the EBITDA decline from lost volumes versus higher costs? And then with your guidance for the next quarter, there are some moving pieces. Do you think EBITDA is higher or lower sequentially?

Yes, good morning. So like we said in the prepared remarks, we expect to see a little bit of an improvement in Winchester for the second quarter. Some of that is frankly related to the White Flyer business that we acquired at the end of 2023. This is typically a time when we see some seasonal improvement for White Flyer, but we will see some improvement as well in the commercial demand, although more modest than what you would have seen last year. And military is going to continue to improve in the second quarter. So the biggest driver for the decline year-over-year is going to be the commercial demand, but the headwinds around metals and propellant costs is a meaningful part of the decline.

In a high level, you should think of the year-over-year first-quarter decline roughly two-thirds as volume and price and one-third is cost, higher commodity metal costs and propellant.

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

Ken, I'd like to follow up on two things you said. You referred to the capacity overhang in Epoxy and you have this turnaround in Stade coming up. But is that a business that just warrants more shuttered capacity for you to drive a recovery? And the other comment you made was you referred to Winchester as an iconic brand. Could you take an approach to pushing price by calling it a surcharge or something to lead the higher pricing in Winchester in ammunition at the commercial level?

Good morning, Steve. I'll address your question about Epoxy first. There's been a significant amount of excess capacity in Asia built up over the past few years, and that situation is still ongoing this year. We've already made considerable reductions to our capacity, and the remaining capacity we have is very competitive, particularly in the Western markets. Thus, we cannot reduce capacity further. As mentioned at Investor Day, we have Epoxy in our portfolio because it provides strong value due to integration. Furthermore, in Europe, there are some positive changes on the horizon. We'll begin to see effects from the new cost structure and agreements starting in the first quarter, although the impact won’t be felt until then. The combination of integration value and the new commercial agreements in Europe should lead to an improvement in the Epoxy business, likely starting in the first quarter and expected to be significant. Regarding Winchester, as we mentioned, the primary challenge is the high inventory levels, which are decreasing but not as quickly as we had anticipated, due to slower retail sales. Consequently, adjusting pricing in this environment is going to be difficult since we haven't reached the necessary turning point for that yet. However, we remain optimistic about Winchester's mid-term prospects. We just need to navigate through the unprecedented inventory buildup coupled with rising costs, which is a challenging situation that we believe will eventually resolve, allowing Winchester to become a strong growth platform for us.

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

Thank you for taking my question. I hope you are doing well. It's obviously a very volatile and challenging environment. We've observed some weakness downstream. I'm curious, as caustic seems to be holding up a bit better, do you anticipate some softness in caustic as we look towards Q2 and the summer months with the approaching water treatment season? Additionally, there may be some downstream demand that could affect this. Could you share your thoughts on caustic and possibly PVC? I understand your company doesn't participate directly in PVC, but I'm also interested in your views on EDC. Thank you.

Good morning, Arun. Thank you. When considering the amount of chlorine you're producing for the bleach market, it's relatively small compared to the caustic market, so it won't pressure caustic. The caustic market is much larger, and we are seeing some seasonal improvements. We also continue to experience strength in pulp and paper, and alumina as well. These markets are significantly larger than bleach, which means the chlorine production for bleach or water treatment doesn't impact the caustic market. As we've mentioned before, we continue to see strength in caustic and expect that to persist into the second quarter. We are closely engaged with our customers during this time, and while there is some uncertainty, we aren't hearing much negativity regarding their outlook. Instead, customers are telling us they expect stability and potential improvements, so I view that as a positive sign. Given the uncertainty, it could be more negative than what we're observing, and I'm cautiously optimistic.

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

Thank you and good morning. Ken, I'd like to come back to Winchester and appreciate your thoughts on what you would consider to be the structural or normalized profitability of that business. Part of the reason I ask is, if we look back at history pre-pandemic, maybe EBITDA trended on either side of $100 million. And then what happened was, it quadrupled for a couple of years. And then we've regressed back down. So when you think about where we are in the first quarter, where do you think we are relative to normalized for Winchester, given the various headwinds that you articulated? And how might it change if at all through the AMMO deal?

Good morning, Kevin. That's a great question. Yes, we are definitely in a trough for Winchester right now, even though it's not a cyclical business. Looking back at the past few years, our earnings capacity for Winchester has significantly improved. This is due to the new Lake City business, which will continue to deliver results, and we've announced a three-year extension that will allow us to operate that facility through 2030. Additionally, we acquired the White Flyer business, which has been very beneficial for us in terms of return on investment. We also recently completed the acquisition of AMMO Inc., and we expect to realize $40 million in synergies over the next few years, which will positively impact our results this year. Reflecting on the last 12 months and the current earnings level, there is still substantial growth ahead. We remain very optimistic about Winchester's earnings future. Last year, the effects of inflation and the strain on consumers, along with higher costs and increased inventory at our retail customers, have to work their way through the system. Once we navigate this period and consumers are able to spend more and increase their consumption, we are confident that we will see an improvement in the Winchester business over the next 12 to 18 months.

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

Thank you. Good morning. Ken, I want to follow up on Epoxy. It seems like unfortunately the South Korean lobbyists are very effective at their job. So we're not going to get the sort of benefits on antidumping. And you mentioned earlier that you have new agreements in place in Europe, but that should start kicking in in the first quarter of '26. So are we looking at a lost year here in Epoxy? I mean, what needs to happen in order to get Epoxy back into the black in 2025?

Good morning, Frank. I would not call it a lost year, but I do think that you're going to see Epoxy continue to struggle in 2025. We've got some tailwinds related to some of the antidumping duties. On some of the countries that we've seen, we have seen some positive impact. Pricing has improved. We've seen some improvement in volume, where we've had customers that were not buying from us that have come back to us. So we've seen those improvements already flow through in the P&L. We did have some cost headwinds in the first quarter related to some unplanned outages and just some other things that were not related to the market. But I do think that this year is going to continue to be a struggle for the Epoxy business. However, I think by the time we get to the end of the year to the beginning of next year, we will start to see a positive result coming out of Epoxy. But don't forget, the integration value there is still in the mid to high double-digit millions that it creates for us being integrated with our Chlor Alkali assets. So it still is very positive for us to have that in the portfolio, and we're going to continue to manage our product portfolio more towards higher value formulated solutions. And we're already seeing growth in that business for us this year as well. So a lot of good things that we're doing that are within our control, but it is a challenging environment for sure.

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

Hi, good morning. Wanted to ask one on the increased cost-cutting target for the year. Just in the context of the $250 million of cost savings you're targeting for 2028, do you view the increase you just announced for 2025 as a pull forward that's included in that target, or are these incremental? And in which segment or segments are the extra savings this year concentrated?

Good morning, Peter. Some of that is, we are working to accelerate some of our structural costs for sure, some of our structural cost savings, but we're also working very hard. We've got robust processes in place to find productivity opportunities as well during the year. And so all of those things are, like I had said in the prepared comments, these are things that we can control. And the team is very focused across all of our sites, across all of our functions at finding ways to reduce costs and be more efficient. So it's a combination of accelerating some of our structural cost savings that we've talked about as well as increasing the productivity savings that we can realize in 2025.

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

Thank you. Can I ask if the reduction in your annual capital spending by $25 million is applicable only to 2025, or is it a change that provides ongoing benefits? Additionally, regarding the PVC strategy, what capital-light opportunities do you foresee?

Good morning, Vincent. Thanks for the question. Yes. So the reduction that we are announcing for our capital spend this year doesn't change what we talked about at the Investor Day, which is you can think about an average level of spend for us between now and 2028 of around $250 million. That's still going to be the case. So what we're doing is we're trying to optimize spend on assessing and investigating some of those growth opportunities that we talked about at the Investor Day. We're going to just be a little bit more prudent with the spend there. We're continuing to make progress on investigating, looking at some of those growth options that we talked about around our water treatments, the bleach space, the PVC space as well. We want to keep looking at those things. We don't want to take our eye off of the future. So we're just trying to tighten our belt a little bit here this year. We're going to spend what we need to spend to be able to operate safely and reliably. Related to PVC specifically, we're going to look at all options. We will continue to explore potential commercial agreements similar to what we have today to continue to have exposure to the PVC market. But what you see us doing with our business development activities through our tolling arrangements is we're building the capability to be able to do something directly in PVC either through a joint venture with a new PVC asset in the next, say, five and a half years to six years or something similar to that. So there's more that we've got to do to study that. We're already talking with potential partners. We're talking with also potential technology providers. So those are things that we've got to do to be ready. And I'm really happy with the progress that we're making.

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

Thank you. Is the difference on the purchase price for AMMO related to an earnout, or what is it that lowered the price there?

Good morning. Good morning, John. No, it's not related to an earnout. Frankly, the team did a very good job working through some things as we approached closing on that to find areas of value for Olin. It's also lower working capital when we closed the deal. But again, we did a tremendous job finding value in that deal and we're going to be able to realize a tremendous return on that investment.

And candidly, the lower working capital is working capital we didn't want anyway.

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

Thank you, and good morning, Ken and Todd. If we can circle back to caustic. So you mentioned some positive trends in pulp and alumina. Your guidance includes higher caustic prices for the first quarter. I think U.S. spot caustic has been moving up as well. I would say the one red flag is the recent drops in Southeast Asia caustic prices, I think they've fallen by about $35 a ton over the past three weeks or so. What's driving that delta between the U.S. and Asia market? And do the falling values in Asia represent a concern?

Good morning, Matthew. Listen, we're watching that very closely as well. I don't see that as a concern for us. When we look even here domestically, we're already seeing those price increases firm. We mentioned in our prepared remarks that there is a potential upside just related to the tariffs on caustic imports to the East and West Coast from Europe and Asia, respectively. And frankly, we are seeing that get passed through in the market. So we still feel very good about the outlook for caustic in the markets where we mainly participate, which is going to be in the Americas. We see continued strength in Latin America as well. So we're remaining very constructive on our outlook for caustic in the second quarter.

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

Hi, good morning. It was a strong quarter. You mentioned that caustic is performing better in the ECU. How do you plan to take advantage of that? Or are you mainly focused on managing the weaker side with chlorine, where your earnings potential could really increase in the long term?

Good morning, and thanks, Mike. I mean, listen, we are taking advantage of that, but we're going to do it in a disciplined way. So part of that is our EDC position. EDC is our flywheel, and we're going to continue to participate in the EDC market because we are the lowest cost producer of EDC. There are a number of players in Asia that have already backed off their production. And what that does is it allows us to maintain a very good value approach around our caustic position in the markets where we like to participate. I just mentioned that's primarily in the Americas. So we are actually optimizing that today. But we're not going to start pushing chlorine or chlorine derivatives into the market just to make caustic. That's not going to be the strategy. We're going to stay focused on the ECU values that we're realizing. And as long as we see values there that are attractive to us, then that's how we're going to set our operating rates.

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

Thanks very much. I think Dow wants to sell various assets in Europe. Would you be interested in looking at any of those at the appropriate value? Do their plans perhaps make it more difficult for you in your European operations, or do they not really touch you? And then secondly, can you talk a little bit about the wind turbine market in Epoxies? How important is that for you? And what are the current demand trends?

Good morning, Jeff. In terms of the Dow assets or M&A in general, we won't comment on anything specific. Instead, I'll refer back to what we discussed at our Investor Day regarding the key areas for growth and investment, which will primarily focus on water treatment. This includes our bleach business and the PVC business, where we intend to concentrate our efforts. On a positive note, we have a new cost structure from our agreement that will start to take effect in Q1, which is significant for our Epoxy business. Regarding the wind business, it remains an important area for us, and we are a leader in the wind segment for Epoxy. We are experiencing continued year-over-year growth, with expectations of low double-digit growth this year compared to last. This aligns well with our strategy for growth in formulated solutions, where we also expect to see progress this year, contributing to our earnings improvements as we move through 2025.

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, Betsy. I just want to say thank you to everybody for joining us today. We're really optimistic about the future of Olin. We've laid out a great strategy. Our team is focused on the things that we can control, and we're going to continue to do that without taking our eye off the future. So we wish you all a very safe weekend and look forward to speaking to you at the end of the second quarter.

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