Vertical Research - Global Materials Conferenceb2icontent.irpass.cc/1548/174610.pdf · Olin is a...

TM

VerticalResearch-GlobalMaterialsConferenceWestbrook, CT June 14, 2018

Forward-LookingStatements

2

Thiscommunicationincludesforward-lookingstatementswithinthemeaningofthePrivateSecuritiesLitigationReformActof1995.Thesestatementsrelatetoanalysesandotherinformationthatarebasedonmanagement’sbeliefs,certainassumptionsmadebymanagement,forecastsoffutureresults,andcurrentexpectations,estimatesandprojectionsaboutthemarketsandeconomyinwhichweandourvarioussegmentsoperate.Thestatementscontainedinthispresentationthatarenotstatementsofhistoricalfactmayincludeforward-lookingstatementsthatinvolveanumberofrisksanduncertainties.

Wehaveusedthewords“anticipate,”“intend,”“may,”“expect,”“believe,”“should,”“plan,”“project,”“estimate,”“forecast,”“optimistic,”andvariationsofsuchwordsandsimilarexpressionsinthispresentationtoidentifysuchforward-lookingstatements.Thesestatementsarenotguaranteesoffutureperformanceandinvolvecertainrisks,uncertaintiesandassumptions,whicharedifficulttopredictandmanyofwhicharebeyondourcontrol.Therefore,actualoutcomesandresultsmaydiffermateriallyfromthosemattersexpressedorimpliedinsuchforward-lookingstatements.Allreferencestoexpectationsandotherforward-lookingstatementsarebasedonexpectationsatMay1,2018.Olinundertakesnoobligationtoupdatepubliclyanyforward-lookingstatements,whetherasaresultoffutureevents,newinformationorotherwise.

Factorsthatcouldcauseorcontributetosuchdifferencesinclude,butarenotlimitedto:oursensitivitytoeconomic,businessandmarketconditionsintheU.S.andoverseas;thecyclicalnatureofouroperatingresultsandthesupply/demandbalanceforourproducts;ourrelianceonalimitednumberofsuppliersforspecifiedfeedstockandservices,includingthird-partytransportationservices;higher-than-expectedrawmaterialandenergy,transportation,and/orlogisticscosts;failuretocontrolcostsortoachievetargetedcostreductions;newregulationsorpublicpolicychangesregardingthetransportationofhazardouschemicalsandthesecurityofchemicalmanufacturingfacilities;theoccurrenceofunexpectedmanufacturinginterruptionsandoutages;complicationsresultingfromourmultipleenterpriseresourceplanningsystemsandtheconversiontoonesystem;changesin,orfailuretocomplywith,legislationorgovernmentregulationsorpolicies;thefailureoraninterruptionofourinformationtechnologysystems;economicandindustrydownturns;declinesinglobalequitymarketsandinterestratesimpactingpensionplanassetvaluesandliabilities;fluctuationsinforeigncurrencyexchangerates;unexpectedlitigationoutcomesandenvironmentalinvestigationandremediationcosts;oursubstantialamountofindebtednessanddebtserviceobligations;theintegrationoftheDowChemicalProductsBusinessnotfullyrealizingthebenefitsoftheanticipatedsynergies;thefailuretoattract,retainandmotivatekeyemployees;assetimpairmentchargesresultingfromthefailuretorealizeourlongrangeplanassumptions;adverseconditionsinthecreditandcapitalmarkets;andtheotherrisksdetailedinOlin’sForm10-KforthefiscalyearendedDecember31,2017.Alloftheforward-lookingstatementsshouldbeconsideredinlightofthesefactors.Inaddition,otherrisksanduncertaintiesnotpresentlyknowntoOlinorthatOlinconsidersimmaterialcouldaffecttheaccuracyofourforward-lookingstatements.Thereaderiscautionednottorelyundulyontheseforward-lookingstatements.

Non-GAAPFinancialMeasures

InadditiontoU.S.GAAPfinancialmeasures,thispresentationincludescertainnon-GAAPfinancialmeasuresincludingEBITDA,andAdjustedEBITDA.Thesenon-GAAPmeasuresareinadditionto,notasubstitutefororsuperiorto,measuresforfinancialperformancepreparedinaccordancewithU.S.GAAP.DefinitionsofthesemeasuresandreconciliationofGAAPtonon-GAAPmeasuresareprovidedintheappendixtothispresentation.

All financial data are for the three months ended March 31, 2018 and the twelve months ended December 31, 2017. Data are presented in millions of U.S. dollars. Additional information is available at www.olin.com.

WinchesterChlorAlkaliProductsandVinyls

1Q18 FY ‘17

Revenue: $ 936 $ 3,501

Adj. EBITDA: $ 244 $ 838

Revenue: $ 1,710 $ 6,268 Adjusted EBITDA: $ 240 $ 944

Olin 1Q 2018 FY 2017

OlinCorporation

Epoxy

CompanyOverview

1Q18 FY ‘17

Revenue: $ 603 $ 2,086

Adj. EBITDA: $ 5 $ 83

1Q18 FY ‘17

Revenue: $ 171 $ 681

Adj. EBITDA: $ 17 $ 92

3

2:Olin’sdefinitionof“AdjustedEBITDA”(earningsbeforeinterest,taxes,depreciationandamortization)isnetincome(loss)plusanadd-backfordepreciationandamortization,interestexpense(income),incometaxexpense(benefit),otherexpense(income),restructuringcharges,acquisition-relatedcostsandcertainnon-recurringitems.

2

1:ChlorAlkaliProductsandVinylsfullyear2017AdjustedEBITDAwasreducedby$27millionandEpoxyfullyear2017AdjustedEBITDAwasreduced$27.7millionasaresultofincrementalcoststocontinueoperationsandunabsorbedfixedmanufacturingcostsandreducedprofitfromlostsalesassociatedwithHurricaneHarvey.

1

KeyTakeawaysfromFirstQuarter2018

4

3

4.Sharerepurchaseprogramauthorized

3.Winchester2018outlookisweaker

1.Mostsignificantplannedmaintenanceturnaroundsarebehindus

2.PricinghasmovedhigherforChlorAlkaliProducts&VinylsandEpoxybusinesses

OlinisaGlobalLeaderinChlorineDerivativesGlobal:•  Topquartilechlor-alkalicostposition•  #1chlor-alkaliproducer•  #1sellerofmembranegradecausticsoda

•  #1supplierofepoxymaterials•  #1sellerofchlorinatedorganic•  Broadestgeographicpresenceincaustic,epoxyandchlorinatedorganics

Industry-leadingScaleandCostAdvantage

PowerfulUpstreamIntegration

UnparalleledEnd-UseandGeographicDiversity

5

NorthAmerica:•  MostdiversifiedchlorineenvelopeofanyNorthAmericaproducer

•  #1sellerofchlorine•  #1sellerofindustrialbleach•  #1sellerofon-purposehydrochloricacid•  Fullownershipofnewest,world-scalemembranechlor-alkalifacility

•  Themostextensivedistributionandlogisticsnetwork

SignificantlyExpandedChlorineEndUses

3MerchantHCIBleach

19MerchantHCIBleachEthyleneDichlorideVCMAllylChlorideEpichlorohydrinLiquidEpoxyResinVinylideneChloridePercTricM1M2M3CarbonTetrachlorideMDIPropyleneOxidePropyleneGlycolAg

5MerchantHCIBleachEthyleneDichlorideVCM

Vinyl

8MerchantHCIBleachEthyleneDichlorideVCMAllylChlorideEpichlorohydrinLiquidEpoxyResin

Epoxy

15MerchantHCIBleachEthyleneDichlorideVCMAllylChlorideEpichlorohydrinLiquidEpoxyResinVinylideneChloridePerchloroethyleneTrichloroethyleneM1M2M3CarbonTetrachloride

ChlorinatedOrganics

6Pre10/5/15 Today

Heritage

FavorableChlor-AlkaliIndustryDynamicsContinue

1

1

Source:IHSMarkitandTecnon

CausticSodaandChlorinePrices

Janu

ary2015=100

NorthAmericanCausticSodaSpotExportPrice

+39.8%YoY

NorthAmericanChlorineContractPrice+4.6%YoY

NorthAmericanCausticSodaContractLiquidIndexPrice

+28.2%YoY

U.S.CausticSodaImportsandExports(inthousandsofshorttons)

7

25020015010050Jan-15Mar-15Jun-15Sep-15Dec-15Mar-16Jun-16Sep-16Dec-16Mar-17Jun-17Sep-17Dec-17Mar-18

January2015toApril2018

•  NorthAmericancapacityreductionin1Q18,nomaterialchloralkaliplantscomingonlineinthenext2to3years

•  2017globaloperatingrates83%;2017U.S.operatingrates86%•  Favorablecausticsodadynamicscontinue:

•  2015-2017U.S.exportsincreased38%to3.6milliontons,importsdown25%to550,000tons

•  2015-2017U.S.exportstoBrazilincreased30%to1.3milliontons

•  2017Chineseexportsdown12%from2015levelsto850,000tons

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

ImportsShortTons ExportsShortTons

8

EDCPricingHistory2000–April2018

EDCSpotExportPrices

31%

Source:IHSMarkit

Centsp

erpou

nd

2000200220042006200820102012201420162018

PercentageofTimeinPriceRange

4%

15%

14%

31%

10%

26%

•  Pricinghasrecoveredfromthe5yearlowsexperiencedinDecember2017

•  USGCpricingin1Q18drivenbynewEuropeandemandalongwithanoutageataBrazilianvinylsproducer

•  Near-termvolatilityremains,ashighercausticsodapricescontinuetoincentivizeEDCproduction

•  Ourcurrentfullyear2018AdjustedEBITDAforecastassumeslowerEDCpricesthan2017

•  A1centchangeinOlin’sEDCsalespricechangesannualAdjustedEBITDAby$20million

0

2

4

6

8

10

12

14

16

18

20

22

24

Average=13.4cents

9

Product PriceChangeInOlin’sSystem

FullYearEBITDAImpact

Chlorine $10/ton $10million

CausticSoda $10/ton $30million

EthyleneDichloride $.01/pound $20million

KeyChlorAlkaliProducts&VinylsEBITDASensitivity

EpoxyhasAccesstoAttractiveHighGrowthEndUsesAroundtheGlobe

SelectEpoxyEndUseApplications

Composites CivilEngineering

Marine&ProtectiveCoatings

ElectricalLaminates2016 2021

China Asia(Excl.China)LAA EMEAINorthAmerica

EpoxyResinConsumption

3.7%

CAGR(’16-’21)

4.7%

2.2%

4.1%

Source:IHSMarkitEpoxyResinsChemicalEconomicsHandbook-Nov2017

(Tonsinthousands)

3,335

2,765

2.7%

10

0.60

0.80

1.00

1.20

1.40

1.60

1.80

USLER EuropeLER AsianLER

LiquidEpoxyResinPricingUS$perpou

nd

Jan-16Mar-16Jun-16Sep-16Dec-16Mar-17Jun-17Sep-17Dec-17Mar-18

Source:ICIS

•  Improvedsupply/demandfundamentalsforLiquidEpoxyResin

•  HigherliquidepoxyresinpricingintheU.S.,EuropeandAsiasince2016

•  Globalresingrowthisbetween3%and5%

January2016toApril2018

LiquidEpoxyResinPricing1

1.Europeanliquidepoxyresinpricesreflectanon-marketadjustmentmadeinthethirdquarterof2017.11

EpoxyPrioritiesforSuccess

12

0

50

100

150

200

250

300

350

EpoxySegmentEBITDA($inmillions)Upstream Midstream Downstream

Driveproductivitytosustaincostadvantage

Focusoncapturingthefullvalueofour

low-costassetbase(“Sellout”)

Upgradesalesportfolioandproductmixtoimprovemargin

(“Sellup”)N/A

1

2

3

N/A

Winchester

Brands:

Hunters & Recreational Shooters

Ammunition Products

Retail Distributors Mass Merchants

Law Enforcement Military Industrial

Rifle ü ü ü ü ü N/A

Handgun ü ü ü ü ü N/A

Rimfire ü ü ü ü ü ü

Shotshell ü ü ü ü ü ü

Components ü ü ü ü ü ü

13

0

20

40

60

80

100

120

140

160

180

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

WinchesterAdjustedEBITDAMargins

6.7%8.3%

8.6%

13.7%13.3%

8.6%

11.2%

20.3%

19.4%

18.7%

2006-2012AverageAdj.EBITDAmargin:10.1%2013-2017AverageAdj.EBITDAmargin:18.2%

14

($inmillions)

19.1%

13.5%

$944.1

15

FullYear2018AdjustedEBITDAForecastCurrentView:“MoreUpsideOpportunities”

2017Actual 2018Forecast

($inmillions)

1:Olin’sdefinitionof“AdjustedEBITDA”(Earningsbeforeinterest,taxes,depreciationandamortization)isnetincome(loss)plusanadd-backfordepreciationandamortization,interestexpense(income),incometaxexpense(benefit),otherexpense(income),restructuringcharges,acquisition-relatedcosts,andcertainothernon-recurringitems.

1

+Highercausticsodapricing+Higherchlorineandchlorine-derivativespricing+HigherEpoxyearnings+Fullyearofcost-basedethylene+Synergies

-  LowerEDCpricing-  Higherhydrocarboncosts

--

$1,250

Opportunities+Highercausticsodapricing

HigherEDCpricing

+Growthinvolumes

+++

RisksLowerEDCpricing

Highernaturalgasprices

Higherhydrocarboncosts

Lowercommercialammunitiondemandandpricing

----

derivativespricing

+/-5%

WorkingCapital4

FreeCashFlowAfterDividend

CashTaxes2 CapitalSpending3

FreeCashFlow

1:Mid-pointofOlin’sestimatedAdjustedEBITDAforecastof$1.25billionplusorminus5%.Includespensionincomeconsistentwithprioryear’sreporting2:Estimatedusingthecashtaxrateof10%to15%3:Representsthemid-pointofmanagement’sannualcapitalspendingestimaterangeof$375millionto$425million,whichincludes$100millionassociatedwiththeinformationtechnologyproject4:Estimatedincreaseinworkingcapitalduetohighersellingpricesandhydrocarboncosts5:One-timeitemsincludeintegrationexpenses,includingtheinformationtechnologyproject,cashrestructuringcharges,andan$8.0millioninsurancerecovery6:CalculatedbasedonOlin’scapitalstructureandassumingcurrentinterestrates7:Calculatedbasedon167millionsharesoutstandingandanannualdividendof$0.80pershare

2018CashFlowForecastDebtReductionRemainsTopPriorityforFreeCashFlow

One-timeItems

5

Dividend7

Interest6

($inmillions)

$1,250

($400)

($50)

($240)

$450

($134)

$316

($60)

AdjustedEBITDA1

($50)

16

$1,250

17

Near-TermAdjustedEBITDAPotential

Near-Term2018Forecast

($inmillions)

$1,500+

•  Highercausticsodapricing

•  Higherchlorine&chlorine

derivativespricing

•  EDCpricerecovery

•  Epoxyimprovement

•  Lowerturnaroundcosts

•  Winchesterimprovement

Appendix

TheChlorineEnvelope

19

Epoxy

Brine(NaCl)

Power

Phenol

Acetone

CausticSoda(NaOH)

Chlorine(CI2)

Bisphenol-A

GCO(Perc/Tric/CMP/VDC)

Epichlorohydrin

AllylChloride

EDC/VCM

Chlor-alkali

Cumene

Bleach

HCl

Merchant

1Q18 1Q17 ∆Q/Q

Sales $936.1 $836.9 11.9%

AdjustedEBITDA $244.2 $192.1 27.1%

�  1Q18Performancevs.1Q17

�  Highercausticsoda,chlorineandotherchlorine-derivativespricing,lowerEDCpricing

�  Lowervolumes

�  Lowerethylenecosts

�  2Q18Outlookvs.2Q17

�  Expectimprovementincausticsoda,chlorineandchlorine-derivativespricing

�  ExpectlowerEDCpricing

�  Lowerplannedmaintenanceturnaroundcosts

($inmillions)

ChlorAlkaliProductsandVinylsSegmentPerformance

20

1Q18versus

1Q17 4Q17

Chlorine

CausticSoda

EDC

Bleach

HCI

ChlorinatedOrganics

ChlorAlkaliProductsandVinylsPricingandVolumeComparisons

1Q18versus

1Q17 4Q17

Chlorine

CausticSoda

EDC

Bleach

HCI

ChlorinatedOrganics

VolumeComparison PricingComparison

21

OlinCausticSodaPriceRealization

•  A$10pertonchangeinOlin’scausticsodasellingpricechangesannualAdjustedEBITDAbyapproximately$30million

FundamentalPrinciple

DomesticSales

•  Asignificantportionofdomesticsalesarelinkedtoindexprices

•  Indexpricechangestypicallyoccur30to60dayspostourpricenomination

•  Realizationofindexpricechangesaretypically50%to100%

•  Overallpricerealizationlagsindexpricechangesby30to90days

ExportSales•  Typicallyrangebetween20%and25%ofcausticsales

•  Soldonacombinationofnegotiatedsalesandexportindexprice

•  Realizationofindexpricechangesaretypically90%to100%

•  Changesinexportindexpricesaretypicallyrealizedona30to90daylag

22

AdvantagedEthyleneArrangement

• AseriesofthreesupplyagreementswithDow

• Pipelinesupplywithoutoperatingorstart-uprisk

• Producereconomicsfor20yearsforeachtranche

Tranche EffectiveDate AnnualVolume(short-tons)

Cost(millions)

#1 Acquiredatclosing Upto180,000 $433

#2 AcquiredlateSeptember2017 Upto160,000 $209

#3 Available~4Q2020 Upto300,000 $440-$465

1.IncludesoptionpaymentsforTranches#2and#3;alloptionstoobtainfuturecost-basedethylenehavebeenexercised

23

1

1Q18 1Q17 ∆Q/QSales $603.3 $567.6 6.3%AdjustedEBITDA $4.6 $21.2 -78.3%

�  1Q18Performancevs.1Q17

�  Higherproductpricing,partiallyoffsetbyhigherrawmaterialcosts

�  Higherplannedmaintenanceturnaroundcostsofapproximately$43million

�  2Q18Outlookvs.2Q17

�  Expecthigherproductpricing

�  Expecthigherrawmaterialscostsassociatedwithbenzeneandpropylene

($inmillions)

EpoxySegmentPerformance

24

0.20

0.25

0.30

0.35

0.40

0.45

0.50

0.55

0.60

0.65

PropylenePricing

USPropylene EUPropylene

RawMaterialCosts-Benzene&PropylenePricing

1/163/166/169/1612/163/176/179/1712/173/18

US$perpou

nd

US$perpou

nd

1/163/166/169/1612/163/176/179/1712/173/18

•  1Q18U.S.benzenepriceshigherthan1Q17and4Q17

•  Europeanbenzene1Q18priceslowerthan1Q17,buthigherthan4Q17

•  U.S.andEuropeanpropylenepricesarehigherin1Q18versus1Q17and4Q17

Source:ICIS

0.20

0.25

0.30

0.35

0.40

0.45

0.50

0.55

0.60

BenzenePricing

USBenzene EUBenzene

January2016toApril2018

January2016toApril2018

25

261.Lostvolumepenaltyincludesunabsorbedfixedmanufacturingcostsandreducedpretaxprofitfromlostsalesassociatedwiththeturnaroundsandoutages

1

Expenses

SignificantRealizableSynergies

Logistics&Procurement

OperationalEfficiencies

AssetOptimization

AccessingNewSegments&Customers

CapitalInvestment

27

ActualActualSynergiesForecastTotal20162017Breakdown2018Synergies

$75$100 $75-$100$250-$275

($inmillions)

$6$30 $50-$65 $85-$100

$205$30 $0 $235

$70$35 $20 $125

ProjectedAnnualImpact

ProjectedAnnualImpact

ProjectedCAPEX&

InvestmentsProjected

CashIntegration&Restructuring

�  1Q18Performancevs.1Q17

�  Lowercommercialsalespartiallyoffsetbyhighermilitaryvolumes

�  Lessfavorableproductmixandlowersellingprices

�  Highercommodityandothermaterialcosts

�  2Q18Outlookvs.2Q17

�  Expecthighersalestomilitarycustomers

�  Expectlowercommercialvolumesandlessfavorableproductmix

�  Expecthighercommodityandothermaterialcosts

WinchesterSegmentPerformance

28

1Q18 1Q17 ∆Q/QSales $170.9 $162.6 5.1%AdjustedEBITDA $17.1 $30.0 -43.0%

($inmillions)

2018ForecastAssumptions

LineItem Forecast KeyElements($inmillions)

Maintenancelevelofcapitalspendingof$225Mto$275MCapitalSpending $375to$425annually,informationtechnologyprojectspendingof$100M

andotherprojects

Depreciation& Amortization

Non-operating PensionIncome

EnvironmentalExpense$15to$20Representsamorehistoriclevelofexpense

OtherCorporate& Forecastisanincreasefrom2017levelsduetostock-basedUnallocatedCosts compensationandlegalandlitigationcosts

Restructuring& Acquisitionrelatedintegration,includinginformationtechnologyAcquisitionCosts projectandrestructuringcosts

Reflects2017taxlawchangesand2017taxcreditcarryforwards benefits;primarilypayingforeignincometaxesin2017

Reflects2017taxlawchangesandfavorablebook/taxdeductions, partiallyoffsetbystateandforeignincometaxes

29

$70

25%

$110to$120

$570to$580Forecastisanincreasefrom2017levelsof$559M

10%to15%

BookEffectiveTaxRate

CashTaxRate

Lowerthan2017incomelevelsbyapproximately$10Mto$15M$20to$25

30

Non-GAAPFinancialMeasures–AdjustedEBITDA(a)Olin's definition of Adjusted EBITDA (Earnings before interest, taxes, depreciation, and amortization) is net income (loss) plus an add-back for depreciation and amortization, interest expense (income), income tax expense (benefit), other expense (income), restructuring charges, acquisition-related costs and certain other non-recurring items. Adjusted EBITDA is a non-GAAP financial measure. Management believes that this measure is meaningful to investors as a supplemental financial measure to assess the financial performance without regard to financing methods, capital structures, taxes or historical cost basis. The use of non-GAAP financial measures is not intended to replace any measures of performance determined in accordance with GAAP and Adjusted EBITDA presented may not be comparable to similarly titled measures of other companies. Reconciliation of forward-looking non-GAAP financial measures to the most directly comparable GAAP financial measures are omitted from this release because Olin is unable to provide such reconciliations without the use of unreasonable efforts. This inability results from the inherent difficulty in forecasting generally and quantifying certain projected amounts that are necessary for such reconciliations. In particular, sufficient information is not available to calculate certain adjustments required for such reconciliations, including interest expense (income), income tax expense (benefit), other expense (income), restructuring charges and acquisition-related costs. Because of our inability to calculate such adjustments, forward-looking net income guidance is also omitted from this release. We expect these adjustments to have a potentially significant impact on our future GAAP financial results.

(a) Unaudited.

(b) Income tax provision (benefit) for the year ended December 31, 2017 reflects the tax benefit of $437.9 million from the Tax Cuts & Jobs Act.

(c) Restructuring charges for both the three months ended March 31, 2018 and 2017 and the year ended December 31, 2017 were primarily associated with the closure of 433,000 tons of chlor alkali capacity across three separate Olin locations.

(d) Acquisition-related costs for both the three months ended March 31, 2018 and 2017 and the year ended December 31, 2017 were associated with our integration of the Acquired Business.

(e) Information technology integration project for the three months ended March 31, 2018 and year ended December 31, 2017 included costs associated with the implementation of new enterprise resource planning, manufacturing, and engineering systems, and related infrastructure costs of $6.5 million and $5.3 million, respectively.

(f) Certain non-recurring items for the three months ended March 31, 2018 included an $8.0 million insurance recovery associated with a second quarter 2017 business interruption at our Freeport, Texas vinyl chloride monomer facility. Certain non-recurring items for the year ended December 31, 2017 included a gain of $3.3 million on the sale of a former manufacturing facility.

Year EndedDecember 31,

(In millions) 2018 2017 2017

Reconciliation of Net Income to Adjusted EBITDA:Net Income 20.9$ 13.4$ 549.5$

Add Back:Interest Expense 63.7 52.4 217.4Interest Income (0.4) (0.2) (1.8)Income Tax Provision (Benefit) (b) 6.6 4.5 (432.3)Depreciation and Amortization 146.7 135.1 558.9

EBITDA 237.5 205.2 891.7Add Back:

Restructuring Charges (c) 4.0 8.2 37.6Acquisition-related Costs (d) 0.3 7.0 12.8Information Technology Integration Project (e) 6.5 - 5.3Certain Non-recurring Items (f) (8.0) - (3.3)

Adjusted EBITDA 240.3$ 220.4$ 944.1$

Three MonthsEnded March 31,

Non-GAAPFinancialMeasuresbySegment

31

Three Months Ended March 31, 2018 (In millions)

Income (loss) before Taxes

Depreciation and Amortization

Adjusted EBITDA

Chlor Alkali Products and Vinyls $ 130.5 $ 113.7 $ 244.2 Epoxy (22.1) 26.7 4.6 Winchester 12.0 5.1 17.1

Three Months Ended March 31, 2017

Income (loss) before Taxes

Depreciation and Amortization

Adjusted EBITDA

Chlor Alkali Products and Vinyls $ 87.5 $ 104.6 $ 192.1 Epoxy (1.2) 22.4 21.2 Winchester 25.1 4.9 30.0

Year Ended December 31, 2017

Income (loss) before Taxes

Depreciation and Amortization

Adjusted EBITDA

Chlor Alkali Products and Vinyls $ 405.8 $ 432.2 $ 838.0 Epoxy (11.8) 94.3 82.5 Winchester 72.4 19.5 91.9