Todd Slater: Yes. Kevin, as you saw from Q4 to Q1, chlor alkali, we had favorable cost and you should expect that to continue into Q2. Part of that includes power. So, even though we are a hedger, the lower power prices and natural gas cost will flow through our system, albeit not necessarily on a spot basis, but will flow into our system favorable from a cost perspective.
Kevin McCarthy: Okay. That’s very helpful. And then Todd, I wanted to clarify some of the commentary around levered free cash flow. I think you were at $545 million last quarter, sounds like, if I did my math correctly, maybe you are tracking a little bit less than that, maybe closer to $500 million, and I heard you call out tax timing and long-term energy agreement. I guess my questions would be, what exactly changed over the last two months or three months? And has there been any change in what I would call kind of the normal drivers of free cash flow, such as working capital and CapEx and so forth.
Todd Slater: Kevin, from a levered free cash flow perspective, I think really, our assumptions were virtually unchanged. We did have a slight change in the assumption page where we said we thought the total amount that we are going to spend on the Gulf Coast power contract payments to be $50 million, now that the person is doing that, that we have to pay to, we have a relatively final number now for 2024. So, we think that’s going to be $50 million. We had estimated that $25 million to $50 million before. So, we will come in at the high end. Other than that, I don’t think there was any substantive changes to our outlook on levered free cash flow.
Kevin McCarthy: Got it. Thank you so much.
Operator: Our next question comes from Vincent Andrews from Morgan Stanley. Please go ahead with your question.
Vincent Andrews: Thank you and good morning, and congrats to you, Ken, very well deserved. If I could just ask you two things, one, could you give a little bit more color on the orders that you are already getting for the back half of the year? Are they coming from any specific end markets? And what’s driving that so far in advance? And then secondly, if I could ask you just about St. Gabriel and just sort of operating issues. In general, is there any tension between wanting to be a reliable operator in having plants down for extended periods of time in terms of the risks of them coming back online easily and without any incremental maintenance costs?
Ken Lane: Hi Vincent. Thank you. So, listen, the orders that we are seeing in the second half are actually pretty broad in terms of the end markets that we see. We are even seeing some customers who have had assets now that are looking to restart. So, it’s not just one place that we are seeing that. It’s pretty broad, which gives us some pretty good confidence in terms of that demand uptick that we are talking about. I get your question around the reliability topics in St. Gabriel. We will do what we need to do to operate safely first. And we want to have the assets available when we need them. And that means that when they need to run, they will run. And that’s what you have seen happen with St. Gabriel. We took it down.
We have restarted that asset and we are going to continue to focus on operating safely and doing what we have to do to do that, but make sure that when we need that asset to operate, it will operate. And one of the things that I have seen just traveling around to the sites and I have visited many of our chlor alkali sites in the U.S. is the strong commitment to that. I was really impressed with the condition of the assets, visiting the site. So, very happy with that, and I will continue to support our manufacturing team to be ready and be able to operate the assets at the demand level we need and the value that we need.
Operator: Our next question comes from Frank Mitsch from Fermium Research. Please go ahead with your question.
Frank Mitsch: Good morning and yes, let me echo my congrats, Ken, nice to reconnect. One of the interesting things is chlorine prices in the first quarter, according to the consultants ticked down a little bit, but it was up in your system. So, I understand that some of that maybe contract resets. Can you talk about the interplay between contract resets and maybe other pricing for chlorine that led chlorine prices to be up in the Olin system?
Ken Lane: Yes. Thanks Frank. I appreciate the question, good to reconnect. Listen, I will tell you that I don’t put a lot of faith in those indices. I just don’t. I look at what we have in our system and you know how we operate, we operate to meet the demand at the value that we want, and that’s basically the model that we have. We are not going to give away our products. We are going to make sure that we get the right value for the products that we produce and we will continue to focus on matching the demand at the weak side of the ECU, and that’s the result is what you see in the numbers for us. We are going to be the ones that are focusing on value, and that’s not going to change.
Frank Mitsch: Terrific. The guess that you heard were coming out of CMA and ISIS, etcetera.
Ken Lane: We will get it…
Frank Mitsch: Great. And then just a follow-up also on chlorine end use, I mean you did talk about B and C, not seeing a big recovery there and so forth. Do you have any – in the $1.3 billion for 2024, do you have any measure of recovery in the construction markets in the back half of the year? And I guess the reason why I ask that is obviously, the flavor of the month is interest rates aren’t going to be cut anytime soon, so people are concerned about construction in general. Can you talk about how – what may or may not be embedded into your full year guide from those markets?
Ken Lane: Yes. I mean listen, for construction, no, we are not baking in any kind of significant recovery there. You just – you look at the housing starts and the purpose, and we don’t see the momentum in housing that would support us baking in any optimism in that market. So, really, like I have said earlier, it’s more of a broad-based consumer-driven demand with a lot of different areas that we see signs of hope in, but I wouldn’t say construction is one of those yet.
Frank Mitsch: Sure. Perfect. Thank you so much.
Ken Lane: Yes. Thank you.
Operator: [Operator Instructions] Our next question comes from Roger Spitz from Bank of America. Please go ahead with your question.
Roger Spitz: Thanks very much. Good morning. When you said earlier, the free cash flow yield of 10%, are you saying that operating cash flow less CapEx and before dividends would be circa $130 million for 2024? Do I understand that correctly?
Ken Lane: Todd, do you want to take that?
Todd Slater: Yes. Roger, when we talk – I said specifically our levered free cash flow yield, which is consistent with the metric that we have been using and we would say that’s probably in the 10% range for the year, maybe a little higher than that as we sit with the price today.
Roger Spitz: Okay. And secondly, I am looking at Slide 12, lower right, where you are showing caustic being on the stronger side in the first half, first quarter and second quarter of 2024. Next to it on the presentation, it’s showing that caustic is actually down sequentially. I guess maybe I don’t fully understand the stronger side when caustic soda pricing is falling.
Ken Lane: Well, again, this is relative. You can’t think about it in absolute terms. It’s relative to what we see in chlorine versus caustic market momentum. We have seen caustic market momentum actually be more positive. I talked about this before, where actually inventory levels are low, ours are very low. We have seen pricing moving up in caustic and we are just starting to see some recovery in chlorine, so chlorine from our perspective, it’s still the weaker side.
Roger Spitz: Got it. Thank you very much.
Ken Lane: Yes. Thank you, Roger.
Operator: And ladies and gentlemen, I am showing no further questions, this will conclude our question-and-answer session. I would like to turn the conference call back over to Ken Lane for closing comments.
Ken Lane: Well, thank you very much, Jamie, and thank you all for participating in the call today. I wish you all a safe and relaxing weekend.
Operator: Ladies and gentlemen, thank you for attending today’s presentation. You may now disconnect your lines.
