Scott Sutton: Yes. I mean, sure. I mean, hopefully, you’ll give us a little bit on Winchester, and the fact that you broke over repeat Epoxy being a zero. So, I get your question for sure. I would also think a little bit about some of the math even behind this. We took our operating rate down to roughly 50% from around 60% in the fourth quarter and that was $100 million penalty. So, you might been imagine that as those rates very slowly creep up to match customers coming back online that’s sort of an equation for where you might be, $100 million penalty for one quarter to change the rates from 50% to 60%. If everyone’s paying attention, they’ll understand the math behind our operating leverage exactly. And it doesn’t take very much there to add $100 million or a couple of $100 million or even $1 billion as things get better maybe in 2025.
Operator: The next question comes from Aleksey Yefremov of KeyBanc Capital Markets.
Aleksey Yefremov: Scott, you talked about January 1st caustic soda price increases. Can you discuss on were those mostly, monthly customers or quarterly contracts or maybe spot and what is your outlook for caustic next few months?
Scott Sutton: Yes. Hey, Aleksey. Yes, I mean, look, I would say it’s some of all of that. In fact, even though we put January 1st, some of that success happened early, earlier than that. And while it’s across a number of customers, I mean, please understand that we still have a lot of work to do there. And caustic is a business that is still heavily tied to a trade index. And that trade index in the fourth quarter relative to the third quarter showed a decline. So, our pricing in the first quarter is going to change by the difference between those prior two quarters. So, we still have to get by that hurdle, and that’s why in the last quarterly earnings call, we said you’re really going to see this start to materialize in a bigger way in our second quarter results.
Aleksey Yefremov: And on the chlorine side, I mean, there’s a consultant’s view of declines for the year. What is your outlook and level of confidence in the outlook for the next few quarters as well?
Scott Sutton: Yes. Well, I mean the chlorine, and chlorine derivative sides are still the weaker side of the ECU. But what I will say is that, Olin’s average chlorine pricing in the first quarter relative to the fourth quarter absolutely goes up. Some of that is because we’ve been able to renegotiate pricing in some contracts that expired at the end of the year, some of that is because, we ran this value accelerator initiative, and the only way to pull out of the market was actually to pull out of some of our higher price business because it was more spot in nature, but at least on our base business that continues without a contract change, that pricing doesn’t go down either. Nothing is getting worse in terms of chlorine pricing.
Operator: The next question comes from Steve Byrne of Bank of America.
Steve Byrne: Scott, I was curious about this prolonged trough in PVC demand. Is that representing a bit of a challenge for you to negotiate maybe a partnering opportunity downstream post the end of the Dow agreement in another year?
Scott Sutton: I mean, look, I do think it’s extended it some right? But of course, with the change in our relationship with Dow at Freeport in 2025. We get a lot of excess capability coming back in our hands and we’ll have to decide what to do there and everyone already knows that that’s quite accretive for us for sure no matter what we do. So that comes available. I would say in addition to that. We have a tremendous amount of VCM that’s going through a pipeline to one customer and all of that ends in 2030 as well. So we’re getting close to being able to match up with a different PVC operator. So instead of spending $6 billion on a completely integrated world scale facility, someone has the ability to spend 20% of that to get in business in a world scale PVC plant. So I think the timing is okay. We wish it was a bit faster. But you’re right, I mean the situation in the world right now has just slowed down some of those activities.
Steve Byrne: And then just given this uncertainty about the new CEO, Scott, are you opposed to staying there in that seat or staying longer depending on this transition?
Scott Sutton: No, I’m not.
Operator: The next question comes from Joshua Spector of UBS.
Chris Perrella: It’s Chris Perrella on for Josh. Question, on the follow-up, I saw that the share repurchases slowed in the fourth quarter. What’s the outlook for share repurchases for 2024?
Todd Slater: We committed to repurchase approximately 10% of our standing shares in 2023, and that was consistent with what we achieved. We were relatively steady buyer through the year. We bought a little less than the fourth quarter, but consistent with the guidance that we had provided. As you look at our leverage free cash flow for 2024, you should expect us to primarily deploy that cash towards share repurchases. Our strong investment grade balance sheet and cash flow, enable Olin to continue to deploy our cash toward repurchasing our shares.
Chris Perrella: And then a follow-up, as you take the break-off the value accelerator initiative and you raised operating rates starting in March with as the current plan. I thought there’d be a larger step up in EBITDA earnings for the Chlor Alkali business. And I’m just curious, given the puts and takes there, it seems like it’s not up much that $100 million penalty should be coming back a bit faster. Can you just kind of walk through how that penalty lifts?
Scott Sutton: Yes. I mean, Chris, look, it’s a really good observation. I mean, I would just keep two things in mind. I mean, number one, we’re continuing to run that initiative for up to two-thirds of the first quarter. But also on top of that, it goes back to that caustic pricing phenomena that I talked about whereby the first quarter pricing that we print is determined by the difference between the fourth quarter and the third quarter, and that’s already known to be a drop. So, we have to overcome that as well.
