Good morning. My name is Dan, and I will be your conference operator today. At this time, I would like to welcome everyone to the Chemours Company Second Quarter Earnings Call. [Operator Instructions] Thank you. As a reminder please limit yourself to one question and one follow-up question. Alisha Bellezza, you may begin your conference.

Thank you, and good morning, everyone. I'd like to welcome you to The Chemours Company 2016 second quarter earnings call. I'm joined today by Mark Vergnano, President and Chief Executive Officer and Mark Newman, Senior Vice President and Chief Financial Officer. Mark Vergnano will begin with our discussion with some highlights of the quarter and then Mark Newman will review company's financial performance for the second quarter. He will turn the call back to Mark Vergnano to discuss additional details on each segments, provide an update on our transformation plan and discuss our 2016 outlook. Before we begin, let me remind you that comments on this call, as well as the supplemental information provided in our presentation and on our website will contain forward-looking statements that involve risks and uncertainties, including those described in the documents Chemours has filed with the SEC. These forward-looking statements are not guarantees of future performance and are based on certain assumptions and expectations of future events that may not be realized. Actual results may differ, and Chemours undertakes no duty to update any forward-looking statements as a result of future developments or new information. During the course of this call, management will refer to certain non-GAAP financial measures that we believe are useful to investors evaluating the company's performance. Historical results prior to July 1, 2015 are presented on a standalone basis from DuPont's historical results and are subject to certain adjustments and assumptions as indicated and may not be an indicator of future performance. A reconciliation of non-GAAP terms and adjustments are included in our release and at the end of the presentation that accompanies our remarks. I'll now the turn the call over to Mark Vergnano.

Thanks, Alisha, and good morning, everyone. Thank you all for joining us today. I'd like to begin today's discussion by acknowledging the tremendous work of the entire Chemours team and the significant progress that's been made on Five-Point Transformation Plan. We continue to take action on all aspects of the plan as evidenced by this quarter's performance and accomplishments. Our cost reduction programs contributed approximately $100 million of year-over-year savings through the first half of 2016, on track to reach the $200 million target for the entire year. During this quarter, we completed over review of the Chemical Solutions business an important milestone in optimizing our portfolio. We closed the sale of our Sulfur products business and expect to close the Clean and Disinfect business sale to LANXESS, later this year. During the second quarter, we continue to work closely with our customers to implement our pricing strategies. As a result, we saw a TiO2 average price increase 5% sequentially beginning to offset the $200 million per ton headwind from the start of the year versus last year's average price. We remain committed to achieving profitability levels that ensure we can deliver long-term quality supply aligned to our customers' need. We are also pleased that we have successfully commenced commercial production on our new Altamira TiO2 line this quarter, which over time will add significant low cost capacity for our Titanium Technologies business. On the liquidity front, we saw a strong free cash flow improvement $230 million higher than the same period in 2015 and ended the period with a cash balance of $383 million, even after interest payments and debt reduction in the quarter. Beginning in the second quarter and through the beginning of July, we reduced our long-term debt position by $100 million and began modestly improving our balance sheet. So with that overview of our quarter highlights, let me turn the call over to our CFO, Mark Newman.

Thanks, Mark. Turning to Slide 3, we generated nearly $1.4 billion of revenue down from last year, but up sequentially. Adjusted EBITDA in the second quarter was $187 million up approximately $60 million both on a year-over-year and sequential basis. We reported a GAAP net loss of $18 million which included impairment charges of $63 million primarily related to our Sulfur business interest expense of $50 million and restructuring cost of $9 million. Current movements in TiO2 prices unfavorably impacted our results year-over-year. Sequentially these factors proved favorable contributing to higher top and bottom line results versus the first quarter of 2016. As Mark mentioned we're pleased with the performance we achieved this quarter especially the improved working capital and free cash flow, where we also saw, $156 million improvement in free cash flow versus the prior year period. Turning to Slide 4, adjusted EBITDA increased by $60 million on year-over-year basis. Currency movement resulted in a headwind to adjusted EBITDA of approximately $9 million most of which was in the Fluoro product segment. Pricing in the quarter reduced to adjusted EBITDA by $67 million, off that lower average selling prices in Titanium Technologies were about $35 million and the impact of pass-through pricing of lower raw materials in the chemical solution segment reduced adjusted EBITDA by about $25 million. This was partially offset by higher volumes of Opteon and TiO2. The improvement in adjusted EBITDA was driven by significantly lower controllable fixed cost, reduced raw material pricing and improved operations and utilization. I would like to highlight that in the quarter approximately $60 million of lower controllable fixed cost came from initiatives we implemented as part of our transformation plan. We are definitely seeing the benefits from the actions taken in 2015, the facility shut down or streamlined organization…

Thanks, Mark. On Slide 7 you can see that we generated $596 million in revenue $111 million and adjusted EBITDA from the Titanium Technologies segment. In the second quarter we saw volume aligned with seasonal patterns, that said we continue to experience stronger than expected demand particularly in North America and Europe. The start-up of Altamira also represented an important milestone for this segment. The ramp up to 200,000 metric tons is progressing as expected. While we are not yet at full capacity, the capacity that is online is fully booked and committed. As I mentioned earlier, we have realized sequentially higher prices as we work with customers and implemented our announced price increases. As part of a broad review of our customer portfolio, we determined that additional price increases were appropriate for customers in both Europe and Latin America. As a result, last week we communicated a $150 per ton increase to these customers. We believe our Ti-Pure products are undervalued in these select geographies, applications and accounts. We will begin working with our European and Latin American customers to implement this latest change and ensure winning customer needs with our high quality products. This month we expect global average pricing to exceed the average from a year ago, lessening the headwind that we have faced all year. Ongoing execution against our transformation plan resulted in operating efficiencies and working capital reduction for the segment during the quarter. The better than expect demand stretched our supply chain during the second quarter and we see that situation continuing through at least the third quarter. We continue to work with our customers through another quarter of extended lead times to meet their needs. Moving to Slide 8, our Fluoro product segment generated $573 million in revenue and $105 million in adjusted…

[Operator Instructions] your first question comes from the line of PJ Juvekar from Citi. Please go ahead.

This is Eric Petrie on for PJ. How much of the $60 million of cost reduction between Titanium Technologies Fluoro products as well as Chemical Solutions.

This is Mark Newman, we don't break that out. What I would say is, we saw a cost reduction in all of our segments with obvious exception of corporate and other where cost were up year-over-year for a variety of reasons and I would say across all businesses, we see a combination of both fixed cost reduction driven by the transformation as well as cost reduction related to variable cost improvements. The one call out maybe I'll make also on our Fluoro business. Recall we had an outage last year at Corpus, so that's also reflected in our improved cost performance in the quarter on a year-over-year basis.

Okay and then in TiO2, how would you describe underlying market trends. Are you seeing any competitive pressures and I think through June, year-to-date China exports are up nearly 30% year-over-year, so any comments there.

Yes, so I mean if you look at the markets. We saw a very strong North America coating season and that's something that I think everyone benefited from. We were happy to see an uptick in Europe, so Europe has been strong for us from a market perspective. We continue to have strong performance in China on the high end of the market, where we participate and Asia was fairly strong. The only weak region we saw was Latin America, which continues to be weak primarily off of Brazil. So overall we see the market, being a very good market from a standpoint of TiO2 volume. Now if you look at the, as you point out exports to China were up, I think they were somewhere in the just under 25% from the data we have. When we look at that, we see a couple things happening there. First of all, you can't draw a trend from a point, right? Because last quarter was very low exports out of China, this quarter was a bit higher. Our data shows that, a lot of this sort of was headed toward India and Southeast Asia, primarily we think some inventory was probably built somewhere in the channel and you know there is an initiative going on with the G20 coming into China, the Blue Skies Initiative, which shuts down a lot of production for about 30 days as emissions are tried to be reduced during that timeframe. So I think there's a lot of factors there. I think third quarter will play out a little better in terms of how things are playing out of China export. But right now, we don't see anything that concerns us and you can't really draw a trend from one point.

Thank you.

Your next question comes from the line of Jeff Zekauskas from J.P. Morgan. Please go ahead.

So just some accounting things, quickly. What was there pension income of $7 million and off the $9 million in restructuring charges, how would you allocate that to SG&A or to cost of goods sold?

Jeff the pension income question, it's Mark again. Really relates to our, the funding status of our pension plan in the Netherlands on a year-over-year basis.

Jeff, what was the second half of your question? Sorry.

The second half was, you had a restructuring charge of $9 million was that reflected in cost of goods sold or in SG&A or a combination of both?

It's a combination of both and that really relates to our shutdown of our Edge Moor facility. As we had told everyone last year, the cost related to cleaning up that site really will be incurred as we go forward and so, we're expensing it as incurred and so we just had $9 million in the quarter.

Okay and then for my follow-up. How big is Europe and Latin America to your TiO2 business in very rough terms and then on your Slide 4, where you show your adjusted EBITDA bridge year-over-year, what you show is very little benefit from volume growth about $131 million benefit from low costs, so is the meaning of that, that in the Fluoro products all of the EBITDA growth is or effectively hold the EBITDA growth as cost related or is it more subtle than that?

Jeff, I'd say for the first part. Europe is a lot more significant for us than Latin America from a TiO2 volume point of view, we haven't really broken out that by percentages, but I would say that Europe is lot more significant for us than Latin America.

Is it 20% of the company or 10% or 15% or 30%, like what's the order of magnitude?

On a revenue basis, it's a little bit more than 20%.

Okay.

On the EBITDA bridge you referenced in Chart 4. You're right, there's a combination when you Fluoro, there a combination of what's going on there. So you have sort of three things happening. You have the significant growth we're seeing in Opteon which is bringing in volume higher margin, so obviously earnings at the same time and you're also seeing the cost reductions that are happening in the segment, but what you're also seeing is a mix, a negative mix happening in our Fluoropolymer side. So all those three things are sort of playing out there. So when you look at that volume number, yes Opteon's higher but remember the base refrigerant side is going through a lot of regulatory downturn right now. So you're seeing volume drop off even though margins are increasing and our Fluoropolymers business side I'd say is semi-flat on a volume basis, but the mix is negative from that standpoint. So those things are all sort of mixed up in those two charts or that one chart and those two bars. From the Fluoropolymer side, from our standpoint we've got some work to do on that. We have a new President at Business Paul Kirsch. Paul is in place and you know one of Paul's focus areas are to improve the profitability specifically on the Fluoropolymer side of the house.

Okay, great. Thank you so much.

Your next question comes from the line of Brian Lalli from Barclays. Please go ahead.

I guess first on the market side TiO2, one of your peers last week was talking about upwards of 400 KT of supply reduction in China due to some policy changes, I guess you're seeing similar things from your side, I guess any comments on that would be helpful.

Yes for sure we're seeing or anticipating and seeing that there is going to be some level of reduction of volume coming out of China, primarily on the small producers and primarily based on some of these new regulations that are flowing through China. You continue to see consolidation happening, I think the [indiscernible] merger is an indication of that, there is a sentiment to try to drive consolidation in the industry, we think that's going to play some volume down as well. So we've seen numbers anywhere from 200,000 to 400,000 tons from that standpoint and I think that's right in line with others saying as well.

Got it, that's helpful and then, I guess my follow-up just on the balance sheet side. You guys said some debt repurchases this quarter and into July. I mean, housekeeping wise first, could you maybe talk about what bonds you bought back appreciate that your senior notes are pairing with one another and then secondly, as we go into the future. Your cash balance I would say is set to move higher second half free cash flow, asset sales proceeds. How would you weigh future bond buybacks and maybe layout sort of how you made the decision in the second quarter, Mark if you could I think that will be helpful for the group [ph]? Thanks.

So this is Mark Newman. I'll start first with the housekeeping question. We bought back 2023 Notes. You'll recall that as part of the spinoff the 2025 Notes have some restrictions related to the tax re-separation from DuPont, so that's where our focus has been so far. Mark and I have been very consistent that our focus is on getting the company to be three times leveraged in 2017 and that we believe that would come through some combination of EBITDA improvement really driven by the transformation plan and some actual debt reduction which we achieved in the quarter. So I think as we move forward in time, our focus will be on delivering on our leverage target. Again through really looking at primarily through driving EBITDA higher, but as our liquidity improves we will continue to evaluate our further debt repurchases if we think those are prudent.

And Brian just to follow-up with Mark, just a reminder to you and everyone on the call. We did buyback $50 million of bonds, but we also bought back $50 million of Term Loan B as well, so it was a balance between the two.

Sure. Thanks for the time. I'll turn it over.

Your next question comes from the line of Bob Port [ph] from Goldman Sachs. Please go ahead.

Mark, so I was wondering if you could give some appraisal of how Altamira is progressing and what the relative feedstock cost are doing, if there's been any change in sort of your inputs slate there if you anticipate any change. Thanks.

Sure, Bob. So as everyone probably remembers. Altamira has a capacity of 200,000 tons. We will get to that level in the next couple of years, it usually takes a while to ramp up. But we started that up really well. I'm very impressed and I would just say, I think it's, there's very few players in the world that could start up that complex of a chloride facility on the timeframe we did and able to get it up and running the capacity we'd be able to get out of that so far. So we're at or ahead of schedule in terms of being able to get production out of that, as I mentioned in the comments to start of the call. We are fully booked out of that facility right now. So everything that we make is going into the marketplace right now and because it does allow us to use lower cost and lower grade ore, it brings down the total ore blend for the whole circuit down as well. So as we look forward as we're looking now and looking forward at our ore costs. We're looking pretty much flat because from that standpoint, we're able to benefit from a lower ore blends, we have a good set of contracts in place, a good balance of spot versus contracted business in place. so we're forecasting fairly flat ore cost for the rest of the year.

And can I ask on the cadence of your price hikes. I know you mentioned you're still working through that first round you implemented earlier in the year, now you've got a new one in a couple of markets. should we expect there to be a gradual climb in your realized pricing then as we go through the end of this year and then maybe another set up as the paint season gets underway next year. Is that the right way to think about it?

Yes, I think as you know look at the rest of the year you'll see a cadence up in our price as you look at third quarter and then the effect of this recent price increase that will play out primarily in the fourth quarter. So you should see that cadence continue, if you just look at it from a year-on-year basis, remember when we laid out the transformation plan and when we started the year, we said net average price entering into 2016 was about $200 a ton lower than the average price of last year and when our transformation plan through 2017 basically states that we have to be at parity of that, for this all to work. As we're in August now, we're basically at parity now, so we feel good about where we are on the price side and I think you'll see continued movement because of these execution of these price increases for the rest of the year.

Thanks very much.

Your next question comes from the line of Edlain Rodriguez. Please go ahead.

Quick question on TiO2. I mean, Mark, you've talked about stronger than expected volume in North America and Europe. In one, like what's driving that and can inventory build-up be playing a role in that and could that play a role in volume in 2017 like year-over-year.

Yes, our sense is there's not inventory build-up going on. There was a good solid coating season in North America, I mean the coating producers probably have the best view on that, but it was a very solid North America coating season, much better than it was the year prior. And in Europe, it was just coming off of a real low base, so last year was not a good year in Europe and we are starting to see some nice pick up. So our intelligence and our conversations with customers would say, this is demand driven, in both those regions and we're just not seeing a big build up in the inventory anywhere.

Good. Just a quick follow-up, so you announced another price increase in Latin America and Europe, but not in North America, is there something different in those markets like seasonally likewise enterprise price increase be applicable for North America.

We're always looking at devaluing use for our Ti-Pure products. You got a currency effect happening also in those two regions that's not happening anywhere else. So as we sort of look at our full portfolio we looked at those two regions at having one opportunity for pricing increase and two really getting our value across the world in the right place. So that's why we aimed at those two.

Okay, thank you very much.

Your next question comes from the line of Christopher Perrella. Please go ahead.

Question on the divestitures, what's the estimated net cash proceeds of the three assets sales?

So we've announced the gross proceeds of, if you add all three this year its $695 million. What we've also said is when you take the impact of proceeds with our operating results. We expect our cash tax rate this year to be in the high-teens, so that sort of should give you a good sense of where will you come out on that proceeds.

All right, thank you and then a follow-up on the PFOA litigation and settlement talks. Are you party to those talks or are you just handed the final bill by DuPont?

Yes, until obviously DuPont is the litigant of record. We are conversing with DuPont. So we are aligned in terms of discussing with them, but they are the party here.

And any additional environmental liabilities that would come out of the groundwater in West Virginia and Ohio, how does that factor in any of the existing agreements you have with DuPont?

Yes, so the only thing that's changed has been the EPA decree that had an effect on the Vienna water system, which we have stated that we put in filtration capability in that water district for a cost of about $4 million, that's the only addition that's happened.

Okay, thank you very much.

Your next question comes from the line of Bill Hoffmann from RBC Capital Markets. Please go ahead.

Mark, I wonder if you can just talk a little bit more about Altamira, maybe give us some thoughts on what kind of operating rates you're up to here by the third quarter end or what kind of contribution and provided in the second?

Yes, so we haven't been vocal about exactly what our rates are there, I will tell you that they have moved up very quickly and it takes us a couple years to get to full capacity rates and I wouldn't say that's a straight line, but it does take us a couple years to get there, but we're at or above our expectations, we just haven't [technical difficulty] specifically talk through with anybody because of competitive reasons exactly where we are at that facility as well as what the contribution is, what I will say is, we've always said that the benefit of Altamira will be at least $20 million of EBITDA benefit and we're seeing at least that.

Great thank you and then just a follow-up on that. Any thoughts on, I mean as you bring this into the market and try to keep things balanced. You're obviously going to have to dial back production to some of the other plants, any thoughts on what that sort of the drag from cost absorption might be as you ramp this thing up and then, when it might go away obviously when you get over 90%, most of it goes away.

We're tasked pretty full across our entire circuit right now, so we're seeing an increase of capacity across that circuit as well. But remember the way we get our volume out the door is based on ore blends. So we have this very unique ability to dial down our ore blends which cuts our cost, but also puts let out the back door. So we have that flexibility constantly. It's not something you turn on a dime because you have to plan for this in terms of the ore's that you have in place in your inventory, but we think we are very thoughtful about that in terms of how we do that. So we feel very confident that we can maintain very high utilization rates for our circuit going forward independent of what we need going out the back door.

Great, thank you.

Your next question comes from the line of Roger Spitz from Bank of America Merrill Lynch. Please go ahead.

In mobile refrigerants, has Chinese import pressure increased this spring as we've indirectly heard from other companies?

Yes, I think that China continues to be an issue on the non-Opteon grades the traditional grade. What we see is a benefit of that is the Vienna [ph] dumping rulings that have been going on and we think that's going to be helpful to us as those get implemented in the rest of the year, but there is some price pressure based on Chinese exports.

Okay, what are your expectations for chloride ilmenite price moves going forward and have you been building your chloride ilmenite inventories ahead of your current requirements as a general matter or perhaps you did a sort of one-time-ish build just for the new Altamira line? Thank you

Yes, we've been very careful about our working capital and as you could see in our free cash flow numbers, we've had a very, very positive affecting working capital on free cash flow and that's really - by taking down inventories in some places, where we just felt like we didn't need to have those high level of inventory. So we're not stocking up anywhere, we feel very confident about our ilmenite buys for the rest of the year, our contracts are in place. so that's why we feel confident saying that, we think that's going to be flat going forward and we don't see anything see different then and we don't feel like we have to go take in a bunch of inventory to be able to secure that, we have our contracts in place to be able to do that.

Thank you.

Your next question comes from the line of Don Carson from Susquehanna Financial. Please go ahead.

Mark, a question on inventory levels, both years and the industry referred that inventory levels were down to 40 to 50 days or about half of what they were a year ago, what would you assessment be?

Don, you're specific on TiO2, right?

Yes.

Yes, I think that's about right. We're seeing inventory levels in that range.

Okay, then a follow-up on your litigation strategy. Obviously there's two types of damages compensatory versus punitive. Are you responsible for punitive in terms of your indemnification of DuPont or only for a compensatory damages in any PFOA litigation?

Yes Don, we're preserving all our defenses around that, so there is, it's written in the indemnification. I think DuPont has been real clear what they've said in indemnification, but on our side we're keeping open all our defenses around that.

Okay, thank you.

Your next question comes from the line of James Finnerty from Citi. Please go ahead.

Just a quick follow-up on the ores. You mentioned the contracts that you have in place, what's the tenure of those contracts? My understanding was they are short-term contracts now.

Yes we have laddered contracts on purpose, so our contracts are overlap in time and then we keep some volume open for spot as well. So and these contracts are different on the ilmenite [ph] side than they are on the [indiscernible] side, but we have a very, very good and very proud of our team because we have a very good team doing this. We have very good set of contracts around when they're open, what overlaps where and what we want to keep open for spot purchases. So that's why I have the confidence that we were going to be able to manage through any perturbations on the ore market.

Okay and then with regard to your mineral sands mining operation Florida. What the use for life there and what's the plan for that facility?

So we've - I'm trying to figure out, my edgings [ph] it's - we have multiple years of life in fact, we've expanded that only a couple years ago to be able to take on more land down there. So that's less than 10% of our total take, but it does give us a source of really good ilmenite but also it gives us a source of competitive advantage as we're dealing with suppliers because we understand exactly, how the cost of that. We could always follow-up with that, I don't know off the top of my head but we have multiple years of life of that mine.

Great, thank you.

And we have no further questions at this time. I'll turn the call back over to Mark Vergnano.

Thanks, Dan. Well thanks everyone and in closing I just wanted to reiterate, we remain confident that we have capabilities to realize Chemours potential as a higher value chemistry company. We're also investing as you heard in other high return capital projects that will enhance our opportunities and our core businesses. We have full confidence in our ability to realize our transformation plan goals of delivering up to $350 million of cost reduction and $150 million in adjusted EBITDA, which is really associated with our Opteon and Altamira facilities through 2017 over the 2015 period. We believe that we're increasingly well position to continue to strengthen our balance sheet and enhance our market leadership as we move forward. So thank you all for your time on the call and thank you all for your continued interest in Chemours.

This concludes today's conference call. You may now disconnect.