Good morning. My name is [ph] Tobey (00:04), and I will be your conference operator today. At this time, I would like to welcome everyone to The Chemours Company Fourth Quarter Earnings Call. All lines have been placed on mute to prevent any background noise. After the speaker’s remarks, there will be a question-and-answer session. [Operator Instructions] Thank you. Alisha Bellezza, Treasurer and Director of Investor Relations, you may begin your conference.

Thank you, and good morning, everyone. Welcome to The Chemours Company 2016 fourth quarter earnings conference call. I’m joined today by Mark Vergnano, President and Chief Executive Officer; and Mark Newman, Senior Vice President and Chief Financial Officer. 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 turn the call over to Mark Vergnano.

Thanks, Alisha, and good morning, everyone. I will start the call with some highlights then turn it over to Mark Newman, who will review our financial performance for the fourth quarter and full year 2016, including a liquidity and litigation update. After that, I will provide additional details on each segment, an update on our transformation plan and conclude the call with our 2017 outlook. We finished off an exceptional year with a great quarter. This was truly a year of transformation guided by our five-point transformation plan. We achieved approximately $200 million in cost reductions for the year and significantly improved our adjusted EBITDA and margins. We completed our review of the Chemical Solutions portfolio and have streamlined the remaining businesses in the segment. Our low cost TiO2 production line at Altamira began operations in May and has been steadily ramping up, and Opteon adoption rate surpassed our expectations and remains a strong growth opportunity for the future. The combination of those factors allowed us to reduce our debt position by nearly $400 million and end the year with total liquidity of $1.7 billion. This puts us at a net leverage position of approximately 3.3 times, a tremendous reduction since then. As you saw earlier this week, a global settlement agreement in principle was reached between DuPont and the plaintiffs in the Ohio PFOA multi-district litigation. In connection with that settlement, we reached an agreement with DuPont to address the associated indemnification claims. We believe this agreement significantly mitigates uncertainty around potential outcomes related to this litigation and allows us to quantify its impact of the company and move ahead. Mark Newman will provide some additional details on this, but we feel that Chemours exited 2016 in a very strong position. The effects of our transformation plan are evident in our earnings results and the energy of our employees. We are prepared and looking forward to completing our transformation journey in 2017. So, with that, I will turn now the call over to Mark to cover the financials.

Thanks, Mark. Turning to slide three, in the fourth quarter we generated $1.3 billion of revenue and $239 million in adjusted EBITDA. Our significant improvement in adjusted EBITDA margin up nearly 850 basis points was driven by the benefits of the transformation plan initiatives. We reported the GAAP net loss of $230 million, reflecting the impact of the $335 million charge related to the PFOA settlement. On an adjusted basis, our net income was $15 million and adjusted EPS was $0.08. Cost savings from our transformation plan combined with increase volume in Opteon refrigerants and higher prices in TiO2 led to our $107 million improvement in adjusted EBITDA versus the prior year, despite the impact of portfolio changes within Chemical Solutions. On a sequential basis we reported lower sales and adjusted EBITDA, primarily due to normal seasonality in our Titanium Technologies and Fluoroproducts segments. In the quarter, we generated $166 million of free cash flow, primarily the result of seasonal net working capital release. Now turning to slide four to cover the full year. What a difference a year makes? We generated $5.4 billion of revenue and $822 million of adjusted EBITDA, resulting in a 520 basis point year-over-year improvement in our margin. Sales were 6% lower year-over-year primarily as a result of the portfolio changes during 2016. Lower prices of TiO2 and fluoropolymers were also a challenge in the year. We more than offset those headwinds and increased EBITDA margins through our transformation cost reduction efforts on both controllable fixed and raw material costs. As an example, disciplined inventory management across all of the segments and better ore optimization in our TiO2 production lines help reduce cost of goods sold in 2016, just one area that demonstrates clearly that our transformation plan is working. As a result, we reported…

Thanks, Mark. On slide nine you can see that in the fourth quarter we generated $623 million in revenue and $157 million in adjusted EBITDA from the Titanium Technologies segment. We more than doubled our adjusted EBITDA margin from the previous year's fourth quarter. This impressive improvement in our margin was driven by several factors, including transformation plan cost savings, higher TiO2 prices, better plant utilization and the benefits from the ramp-up of our Altamira facility. We are truly benefiting across our whole manufacturing network, optimizing our ore usage and production capabilities. Relative to very strong volume in the fourth quarter of 2015, TiPure fourth quarter 2016 volume was comparable to fourth quarter 2015. While segment sales were down approximately 2% due to lower derivative product sales. On a full year basis, Titanium Technologies segment volume improved 2% and TiPure volume increased 4% versus 2015. As of December 31, 2016, we had closed the gap on price versus the 2015 average price. However, for the year, 2016 average price was a headwind of about 3% versus 2015. As we began 2017 our current TiO2 price is trending above our 2015 average price. Last week we announced differential price increases in all regions across the globe. We believe our products continue to be at prices well below value and use. We are working with our customers worldwide to implement these changes and expect to realize the benefits of price increases in the second quarter. Order patterns for the first quarter are stronger than we had anticipated. Our assets are fully booked for the near-term and we continue to request extended leap order times from our customers. That said, we expect TiO2 demand to follow historic GDP trends long-term. Moving to slide 10, during the fourth quarter our Fluoroproducts segment generated $569…

[Operator Instructions] Your first question comes from the line of Robert Koort of Goldman Sachs. Please go ahead.

Thank you. Good morning, Marks.

Hi, Bob.

I'm wondering if you could talk about, you have done a lot of changes in your TiO2 business with Altamira expansion the consolidation, obviously, quite an aggressive cost reduction plan. When you think of that, maybe stay on that and putting in a context to historical earnings power, I wondered if you hazard a guess where your normalize margin might be in this business compared to that historical normalized level maybe around 20% or maybe said differently, do you have any concept of what your earnings power could be on a normal TiO2 price maybe close to $1.50 or pound, can you help us size the improvements that you have made.

Yeah. Bob, I would say that, take price out of it for a second. I think the configuration we have now. Our ability to be much more flexible with a lower cost ores gives us a better cost position than we have in the past. There's no question about that. I can’t do the math in my head that fast with the price point you said. But I would say that on a, compared to the past our margin opportunity is better, because of where we are in the cost side.

And my follow-up, I was hoping to ask on the fluoro, basically we have auto build rates are decelerating into next year. Can you talk about the ramp penetration into the auto markets and then is there still some scope and maybe this speaks to your increased capital spending in Corpus but is there still some scope for stationary storage, sorry, stationary cooling applications for Opteon?

Yeah. If you look at it altogether, we are saying, Opteon is probably going to be about 40% up in terms of our volume in 2017 versus 2016. Some of that, we are looking at auto builds about flat, as we look at across the world and so, it’s heavily, Opteon heavily impacts primarily Europe and North America the most, although we are seeing pick up in other places as well. And as you said, stationary is starting to pick up as we work really, really closely with a lot of our customers who are trying to get ahead of that curve. Just putting context for you, the increased investment that we put at Corpus really was about making that a lot more of an efficient process. We have looked in the past that perhaps buying more ingredients to bring into that. We have decided that we can make those ingredients at a lower cost and it would take a lot of risk out of that facility, so that was really the driver for that is getting speed of that facility up and running and also the efficiency across it as well. But we see a good 40% uptick. I would say, primarily driven automobile but also starting to see stationary start to come in Bob.

Great. Thanks for the help.

Your next question comes from the line of Duffy Fischer of Barclays. Please go ahead.

Yeah. Good morning.

Hey, Duffy.

Just question around the settlement, obviously, expense for that was running quite high and it ramped up when we thought we are going to have a number of cases this spring. Year-over-year and then even into, how much does the expense come down from this settlement as far as lower legal fees and as the $335 settlement number in your positive free cash flow number or that's excluding that?

Our free cash flow it exclude the payout of the settlement and in terms of expense, we still expect with all the work being done to have fairly high legal costs at least through the first half of the year and we will probably provide a more clear update when we get beyond the settlement itself.

But, Duffy, to your point, when we look at the way we structured this settlement with DuPont, obviously the upfront piece. But also the second half of that was this sort of five-year play out, if you will. We are not anticipating those kind of costs that we have there. If you see the settlement its $25 million that we would have to pay upfront, DuPont will then cover the next $25. We look at that as an insurance policy. Right now we are -- we don’t have any projections, let’s say, we would be spending that kind of money. But we did want to have that built into the agreement with DuPont. So I would say, as Mark said, after this period as we get through the finality of the settlement, we should have our cost come down.

Okay. And then on the Opteon, is the plants being built, on your projections do you max out your current production before the next plant comes online or do have enough production to see through to that next expansion?

We have enough production to see us through. We get close. But we have enough production to see us through when the expansion starts up.

Great. Thank you, guys.

Your next conf -- your next question comes from the line of Laurence Alexander of Jefferies. Please go ahead.

Hi. This is Jeff Schnell on for Laurence today. Just following up on the prior question, given that the PFOA litigation, $25 million sort of insurance policy, how do you think about your leverage ratio across the cycle, would you want to keep a slightly higher, a slightly lower leverage ratio, given potential risks from environmental and if not, how do you think about use of cash, given your liquidity position throughout the cycle?

So I would say, we've always said, we expect our environmental to be a fairly steady in a mature liability. Now that we have clarity around PFOA, I think, from a credit perspective, our view is we are in a better position today with that as a known certainly for the next five years. And so, I would say, our plan is still to be close to 3 times. I think if you look at our net leverage today and the guidance that we've given on EBITDA for next year, it would suggest we could be below 3 times even after the settlement payout. So, our view is, we are fairly close to where we want to be from a leverage position, and obviously, with the PFOA clarity, I think, that would put you in a position where you might potentially have slightly higher leverage for some period of time.

Thank you.

Your next question comes from the line of PJ Juvekar of City. Please go ahead.

Hi. Good morning, Marks. It’s Eric Petrie for JP.

Okay. How are you doing?

Well, thanks. How much of your stronger order patterns as you mentioned in 2017 might be related to a competitor outage in Europe?

Eric, I would say that, we -- prior to that we saw pretty strong order pattern. So we are seeing a really strong across world. When I say, across the world, North America is strongly but so as the other regions as well and we saw that before any indication that anyone else's going to have supply issues. So I would say, that probably adds to it, but it was strong to start with.

Okay. And TiO2 capacity reductions in China, how much was that in 2016 and you see that continuing into ’17 and related can you still see a tightening market as China diverges on utilization [ph] great (31:57) trend with western markets?

Yeah. Eric it’s hard for us to know exactly the number that came out. We definitely have seen capacity coming out, what's not apparent to us is a permanent or temporary from that standpoint. But a good 200,000 tons appears to come out. But it is a little foggy to be able to give you a definitive there. I think what is interesting is we are seeing real action happening in China. We are seeing the government step in from both an environmental standpoint, as well as a quality of business standpoint. We will see if that continues. But that's been a positive sign in our mind.

Thanks, Mark.

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

Good morning. This is Emily Wagner on for Don. Just a question on the improved manufacturing efficiency in Titanium Technologies, what exactly was that improvement and was that contribution in 2016, and is that separate from the structural cost improvements of $200 million for the whole company?

I would say that, Emily, this is highly connected. Let me start first with, structurally in 2016 we took out probably our -- one of our higher cost facilities when we shutdown our Edgemoor facility at the end of ’15, so that was out of the circuit in ’16. We ramped up a brand new facility, a second line in Altamira, Mexico, which is probably our -- one of our earlier lowest cost facilities. So the trade-off there was positive. It allowed us to run a lower ore blend across the whole circuit which helped us. But on top of that the business just alongside the rest of the company took out structural fixed costs as well. So I'd say all those sort of melded into the benefits we are seeing in that business.

So if you had to think of that $200 million it would be encompassing of all of those changes?

It would be encompassing the fixed costs contribution of that. It doesn't really encompass all the variable cost improvements that we have seen from the ore side.

Okay. And then could you just give an update on how Altamira is ramping into 2017?

Yeah. Ramping extremely well, we are real happy with the performance of that facility. Our team is doing just a fantastic job there. We had told you guys early on that we anticipated the fully ramp in an 18-month to 24-month period. We are well within that, probably, on the lower end of that range.

Yeah.

Your next question comes from the line of John Roberts of UBS. Please go ahead.

Thank you and nice quarter.

Thanks, John.

Are you interested in bolt-on deals in Mining, Chemicals now that you have a focus over that business?

I wouldn't -- don't read into the fact that we change the name because we are diving in there really hard, John. I would say that we have some technology already that we think plays into the Mining Solutions side beyond just our sodium cyanides product, so that fits there. But as I've always said, we are always looking for opportunities on bolt-on acquisitions that would be very accretive and makes sense. So we are not saying no to that, but I wouldn't read into that that that's where we are running first.

And then back on the Chinese capacity question, how would you know when Chinese capacity is permanently closed. Do you see sales of scrap equipment or do you do site visits to see if the plants can't be restarted?

Yeah. We are sure don’t do site visits, but it’s a really good question, John. I think, we rely on industry intelligence to help us with that. And I would say, we are not doing anything specific ourselves there.

Okay. Thank you.

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

Thank you and good morning. The first is of the techno bond question, regarding the 10% senior notes of $25 million, you talked about this on earlier call. We understand $507 million of the issue represents so-called debt for indebtedness related to spin and that on the Tax Matters Agreement you’ve agreed not to repay or redeem the debt prior to maturity unless certain things occur. First, would you take any chance on redeeming early any of the remaining $243 million of the $7 million that is not debt for indebtedness? And second, could you envision a scenario where prior to maturity DuPont might accept an unqualified tax opinion or a tax-free status ruling so that you could purchase some or all of the $507 million early?

Yeah. Roger, I think, what we said previously is, we have a lot of indebtedness that is not part of the Tax Matters Agreement that provides a significant flexibility to improve our balance sheet. As I said early on the call we are very close to 3 times. So, I think, if it was a scenario where we wanted to do more significant debt reduction, we would investigate this. But candidly for the amount of debt reduction we have felt necessary to do up to now, it really hasn’t risen to the level of something we want to pursue.

Thank you very much.

Welcome.

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

Hi. Good morning, gentlemen. Question on the EBITDA guidance for next year or for 2017, with the $150 million in cost savings the $200 million you have done this year. How should I think about that being realized in your 2017 number and from a TiO2 perspective with the GDP growth in the at least 3% rise in your price, the $1 billion seems like a layup, knock on wood. Am I missing something in either Fluoroproducts or Chemicals that would offset that?

So let me help you through our logic with that one, Chris. So if you think about just our transformation plan math you get basically at the $1 billion. So there's things that can move that up, right. Additional TiO2 price can be a help to that. Stronger Opteon sales can be a help to that. We are seeing strong first half volumes that if they continued at that rate could be an upside to that. Something offsets our cost reduction timing and upfront costs. We are committed to the additional $150 million of costs. But that last $150 million is really we are going after systems to really get at that. So timing of that, as well as the costs incurred for us to make that switch is sort of an offset for that. Currency is a bit of unknown for us. So we are going to try to really understand that. And obviously, what was built in already to the $1 billion was the fact that the divestitures we already did in the Chem Solutions segment. So the way we position this and the way we, I guess, would like to position us with everyone is, we see the $1 billion as a floor, right. So that EBITDA is sort of a floor for us. These other things can improve it from there, but we also have some offsets there and we have to watch. So we felt it was prudent to say above a $1 billion with the $1 billion being that floor.

I appreciate the clarification on that. Just a one quick follow-up, the Chemical Solutions, you said it was a $35 million EBITDA headwind from the divestitures, does that make the segment breakeven or slightly above breakeven for 2017?

So, I'd say, we could see, well, first of all, Q4 EBITDA is representative of having the divestitures already out in the quarter. So I would say, it would be representative of a starting point before further cost reduction in our Chem Solutions business. And the $35 million, just to be clear is and we had the business in say through half a year, a lot of them closed in Q3. So what we've said is, we realized close to $700 million proceeds on about $60 million or so million of adjusted EBITDA. Say, if you start to prorate that for the period that we had the assets in, it's about $35 million.

And Chris, just to give you a little geography, Chem Solutions will be EBITDA positive for the year. Think of it from a standpoint of Mining Solutions being positive from an EBITDA side. Performance chemicals at our Belle facility being above breakeven as we've made a bunch of improvements there and then we have a little bit of leftover of our aniline business that that's a bit of a negative. So that's how you can sort of shape the whole segment. But it will be positive EBITDA for the year.

All right. Thank you very much guys. Good year.

Thank you.

Thank you.

[Operator Instructions] Your next question comes from the line of Robert Koort of Goldman Sachs. Please go ahead.

Hi. Good morning. This is Chris Evans on for Bob. Expanding on earlier question, with the PFOA settlement or PFOA agreement kind of behind you now, strong balance sheet, you are growing free cash flow, what is your near to mid-term plan for cash or should we expect gross debt reduction, bolt-on M&A, dividend increases, just kind of what we should expect all that cash end up in the future?

Chris, what -- we are pretty consistent with what we said before, which is delivering is number one on our list. Beyond that we said we are going to look at opportunity to get cash back to the shareholder. But I -- as I mentioned in a previous comment, we will look at smart, very accretive bolt-on acquisitions if they play up, play in our hand. It’s not something I want you guys worry about that we are going to be running out doing acquisition tomorrow, that that's not our plan. But if things make sense for us, it may -- could be very accretive very quickly, we are going to be open to that. But by far delevering and returning cash to shareholders is top on our list.

Thanks, Mark. And then, maybe shift to Opteon for a second, obviously you got your expansion at Corpus going on, I was thinking kind of on the mid to longer term basis, given how demand could ramp once Opteon does transition into stationary and another applications? Do you believe that you and Honeywell have enough capacity to meet global demand or you have to deploy additional CapEx or potentially license the technology to meet the demand out there?

Yeah. I would say that, in the period of time that we're looking at for that new facility come up in Corpus, I think, we have the capacity. We will need to fulfill the market that we want to participate in. When you look long-term, let's face it, HFOs are going to be what everyone turns to in the refrigerant side, both on stationary, as well as on mobile. So, that in time and hopefully we are going to continue to have our protection as long as we can. But in time, you have to believe that there will more participants in that. How we play that? I think is yet to be seen, whether that is, we add capacity whether that there is licensing opportunities we will evaluate that for our future. But at least for the mid-term, I think, we have the capacity that will need to be able to fulfill our customers.

Thanks Mark.

There are no further questions at this time. I will turn the call back over to Mark Vergnano.

Well, listen, I just want to thank everyone for joining the call. But I also want to thank you all for the support over the year. This is absolutely been our big year of transition for us. We think we are poised for growth in 2017. But more importantly, we think we are poised for growth beyond that as well. So we will remain very disciplined on our cost reductions. We will be remain very disciplined on our transformation plan throughout the year, but we are going to continue to invest in our core businesses and drive those improvements down to our results. So, again, thanks for joining and thanks for all the support in 2016.

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