Good day, ladies and gentlemen and welcome to the Fourth Quarter 2016 Huntsman Corporation Earnings Conference Call. My name is Dave. I'll be your operator for today. At this time, all participants are in a listen-only mode. We will conduct a question-and-answer session towards the end of this conference. As a reminder, the call is being recorded for replay purposes. I'd now like to turn the call over to Mr. Kurt Ogden, Vice President, Investor Relations and Finance. Please proceed, sir.

Thank you, Dave, and good morning, everyone. Welcome to our fourth quarter 2016 earnings call. Joining us on the call today are Jon Huntsman, our Founder and Executive Chairman; Peter Huntsman, President and CEO; Sean Douglas, Executive Vice President and CFO; as well as Simon Turner, Division President of our Pigments & Additives Division. This morning, before the market open, we released our earnings for the fourth quarter and full year of 2016 via press release and posted it to our website, huntsman.com. We also posted a set of slides on our website which we will use on the call this morning while presenting our results. During this call, we may make statements about our projections or expectations for the future. All such statements are forward-looking statements and while they reflect our current expectations, they involve risks and uncertainties and are not guarantees of future performance. You should review our filings with the Securities and Exchange Commission for more information regarding the factors that could cause actual results to differ materially from these projections or expectations. We do not plan on publicly updating or revising any forward-looking statements during the quarter. In addition, we will also refer to non-GAAP financial measures such as adjusted EBITDA, adjusted net income, or loss, and free cash flow. You can find reconciliations to the most directly comparable GAAP financial measures in our earnings release, which has been posted to our website at huntsman.com. In our earnings release this morning, we reported fourth quarter 2016 revenue of $2.395 billion, adjusted EBITDA of $256 million, adjusted earnings of $0.30 per diluted share, and free cash flow generation of $117 million. Importantly, we generated $686 million of free cash flow in the full year of 2016. I will now turn the call over to Peter Huntsman, our President and CEO.

Thank you, Kurt. Good morning, everyone. Thank you for joining us. Let's turn to slide number 3. Adjusted EBITDA for our Polyurethanes division in the fourth quarter was $131 million. MDI urethanes, which includes propylene oxide recorded earnings of $131 million during the quarter. MDI volume growth was 4% globally for the full year, continuing the trend of strong demand in mature economies of North America and Europe with weaker demand in emerging markets. Importantly, our differentiated MDI sales volumes grew 6% in 2016. In North America, we saw impressive growth in commercial insulation and composite wood product sales, driven by improved end-market conditions and continued product substitution. Underlying growth continued to be strong, driven by demand in automotive and commercial construction. In Asia, although volume growth remained relatively flat, we grew our differentiated sales by 7% during the quarter. Overall, Asian profitability increased markedly during the quarter, driven by sharply increasing component margins as a result of a competitor's outage. We expect these margins to return to more normalized levels during the first quarter as production capacity re-enters the market. Our MTBE business recorded an adjusted EBITDA loss of $1 million in the fourth quarter. The average C-Factor, which is an industry proxy for MTBE contribution margins, decreased to $0.57 per gallon from an already low $0.76 per gallon during the prior year's period. The low C-Factor is attributable to high gasoline inventories and low refining margins as well as a spike in butane prices relative to oil during December. The C-Factor is currently lower today than during the fourth quarter and we expect this to have an adverse impact on first quarter MTBE earnings. We have planned maintenance at our MDI facility in Rotterdam in the first half of 2017. This occurs once every four years and is…

Thank you, Peter. Let's turn to slide 8. Our adjusted EBITDA increased to $256 million in the fourth quarter of 2016 from $240 million in the prior year period. During the quarter, adjusted EBITDA in our Performance Products and Polyurethanes businesses was impacted by approximately $20 million from temporary weather-related and other production outages. Sales volumes increased across most of our businesses. Overall margins increased moderately, primarily due to stronger MDI and TiO2 prices. Compared to the prior quarter, our adjusted EBITDA decreased to $256 million from $272 million in the third quarter. The impact of seasonally lower sales volumes was partially offset by higher margins. Turning to slide 9, at the end of 2016, we had liquidity of $1.208 billion. This is an increase of $185 million from the end of 2015. As Kurt mentioned, in 2016, we generated a record $686 million of free cash flow through reduced spending and intense focus on working capital. We reduced primary working capital by $304 million, primarily from targeted sustainable reductions in inventory where we reduced overall days inventory by more than 10 days. This free cash flow generation enabled us to strengthen our balance sheet by repaying $560 million of debt during the year. On December 30, we received a $199 million cash payment in connection with the sale of our European differentiated surfactants business to Innospec, and quickly prepaid $260 million of our bank debt. During 2016, we spent $421 million on capital expenditures, and received approximately $31 million of capital reimbursements from our customers and joint venture partners. During 2016, we recorded income tax expense of $87 million, and paid $40 million in cash for income taxes. The combination of significantly lower U.S. earnings and higher earnings in countries with valuation allowances resulted in a low adjusted effective…

Thanks, Sean. Our company has had the objective of improving the quality of our earnings and we continue to make progress in this area. MDI urethanes continues to show steady and an impressive growth with differentiated MDI volumes growing 6% compared to last year and representing 85% of the MDI EBITDA. Advanced Materials and Textile Effects have become solid performers with steady and modestly improving earnings. Our Performance Products business is poised for recovery in 2017. As TiO2 prices have rebounded, our Pigments and Additives divisions doubled its earnings in 2016 from the previous year, and earnings are expected to improve meaningfully in 2017. We've also delivered on our commitment to separate the TiO2 businesses through the announced spin-off of our Pigments and Additives division. Turn to slide number 10 and look at some of the highlights of the spin-off considerations. We filed an initial Form 10 with the SEC on October 27, and on January 17, we filed an amendment which included, among other things, the name for the new company, Venator Materials Corporation. Additional information, such as capitalization, additional pro forma information, and other matters will be provided in subsequent amendments to the Form 10. Venator is incorporated in the U.S. and we plan to have Venator's shares listed on the New York Stock Exchange, using the ticker VNTR. We continue to make progress with the IRS towards retaining a 40% economic interest in Venator with 19.9% of the voting power, allowing us to capture the anticipated appreciation in value associated with an improving titanium dioxide cycle. This would be an additional significant reduction of our debt and strengthening of our balance sheet. TiO2 prices have steadily improved in 2016 and are expected to improve further in 2017. In addition, we've identified $75 million in annual EBITDA business improvements incremental to 2016 earnings. Improving TiO2 prices and the business improvement program will further strengthen the financial wherewithal of Venator. We continue to proceed with all preparations to spin in the second quarter of 2017. The impact, if any, of the fire on the timing of the spin is not yet fully understood. We intend to keep the market informed as we progress. As we look back in 2016, we also saw a major improvement in our cash generation. We will continue this focus throughout 2017 as the reduction of our debt remains a high priority. Looking into the remaining Huntsman Corporation divisions, the Polyurethanes, Performance Products, Advanced Materials, and Textile Effects, we see improving earnings that meet or exceed global GDP. Throughout 2017, I believe we will continue to generate free cash flow, execute our Venator spin-off, and see improving results from all of our four divisions. We look forward to a great year. Kurt?

Thanks, Peter. Dave, will you explain the procedure for questions and then open the line?

Certainly. Thank you. Please stand by for your first question. This comes from the line of Aleksey Yefremov at Nomura Instinet. Please go ahead.

Good morning. Thank you. You mentioned in your slides that in the fourth quarter, Asian MDI Polyurethanes benefited from competitor outage. That outage has ended, and strength seems to have continued in the first quarter. So do you think that this continued strength is due to something more sustainable, such as underlying supply and demand, or is this due to maybe some planned maintenance and seasonality?

I think it's a little too early to say exactly what it is, but we are seeing decent demand continue in China. One of our largest competitors there has publicly announced that they've put off some maintenance and turnaround work in an attempt to build inventory, which would tell me that demand across the board is stronger than usual. We did see prices increase because of industry outages in China, specifically in the fourth quarter, and would have expected as this new capacity – or excuse me, the repaired capacity came back and margin for these margins to diminish. They've come up a little bit, but again, the markets feel pretty good and I hope that we can continue to take advantage of that.

Great. Thank you, Peter. And to follow up on your comments on the Pori outage, so is it fair to summarize that overall downtime, we're looking at four to six months, and then total cash cost for Huntsman including the insurance reimbursement could be around $20 million to $25 million?

Well, I would say the $20 million to $25 million is going to be what we'll be seeing on the P&L in the first quarter. And as we look at the timing, look, we'll be starting the facility up as soon as possible. There's still parts of the facility that we're unable to even access at this point. So when we talked about the timing and so forth, it is just too early to tell.

And I can just clarify one comment there. The cash impact will not only be the 25 business interruption that Peter mentioned, but there'll be a $15 million deductible for physical damage, which makes the total out of pocket cost, call it, somewhere $35 million to $40 million.

Okay. Thank you very much.

Thank you. The next question is from the line of John Roberts at UBS. Go ahead, please.

Thank you. In your previous guidance for Pigments normalized EBITDA $400 million, how much lower should we adjust that for the Bluebird disappointment?

I think that that $400 million is purely around TiO2. That did not include color pigment.

Okay. And so you want to at least let us know in terms of what the delta is on Bluebird.

Let's make sure that we understand that. What we are seeking from the represented economics of Bluebird does not take away from what we would have expected to be the $400 million. I think that had the Bluebird technology worked as it was represented to us, that $400 million would have been a higher number. So let's – I want to make sure I said that the $400 million was TiO2. That $400 million included the color pigment, that's the TiO2 division I meant to say. So it includes TiO2 and the color pigments, and so we would stand by the $400 million as a normalized number for the division of TiO2 and color pigments. And what we would have liked to be here saying is that we would have expected that $400 million to be a higher number had the Bluebird technology worked the way that it was represented to us to have worked.

Thank you. And then as we go through the new ethylene startups here in the Gulf Coast, you buy about half of your ethylene, I think. Can you update us on your thoughts about trying to get a longer term contract on ethylene maybe as we go through what might be a little weaker period for ethylene?

I think that as we look at ethylene, and a lot of that ethylene is done on a tolling basis, so our customers are actually buying the ethylene, bringing it to us, and we're tolling it. We also are large merchant buyers ourselves. Look, I look at a lot of the capacity consumption versus utilization and so forth. I kind of just feel that there's a wave of ethylene that's going to be hitting the North American markets quite substantially over the next couple of years. I'd rather be probably a spot buyer than a contract buyer, and we'll probably continue to have the same purchasing strategy we've had the last couple of years, and that would be leaning towards a spot-price position, and we'll have some of that covered as well by contract. But I can't imagine with all of the ethylene that's going to be coming into the market that it's not going to be a buying opportunity.

Thank you.

Thank you. The next question is from the line of Hassan Ahmed at Alembic Global Advisors. Please proceed.

Good morning, Peter. Peter, just wanted to quickly chat about the titanium dioxide side of things. Obviously, demand is looking good. It seems utilization rates are tightening and profitability seems to be improving quite markedly. So my question is twofold. One is what are you seeing on the inventory side of things? And second, what are you seeing on the trade side of things, meaning are you beginning to see sort of utilization rates in China, in particular, and China sort of take more and more part in the export markets?

Yeah, I think – and Hassan, this may be the first time that you actually hear me say this in my entire career. I wish we had more inventory in TiO2 than we actually have. We're in the low 50 days, which is where I'd like to be if it weren't for Pori, but because of Pori, I wish we have a little bit more inventory. I can't tell exactly where the industry is, but if you kind of take what little public information is out there, it would tell me that they're probably a bit higher, maybe in the low to mid 60s, the number of days on inventory. So going into what will be starting next month into the buying season, I think those are pretty low inventory compared to where we've been the last couple of years. At this point, I have not anecdotally heard of Chinese exports coming into the European/U.S. markets that would have any material impact. I've got Simon Turner here who will be the soon-to-be-CEO of Venator. Simon, would you care to comment on anything that we've seen out of China?

Yeah, thank you, Peter. Hassan, we've seen a continuing trend of Chinese exports, namely mainly into greater Asia, and the kind of levels we've seen in Europe and North America, pretty much at the same low kind of like 5%, sub 10% type of levels that we've been seeing over these past three or four years. So we don't anticipate that to change tremendously. But to your point, we do see gradual tightening of this market as we see our demand rising and improving.

Very helpful. Now, as a follow-up, if I may. Around the free cash flow guidance for 2017, a large component obviously of that is a continuation of the working capital improvements that you guys have seen. And in the prepared remarks, you talked about the sustainability of these working capital improvements, and you cited a 10-day step-change or reduction in the days of inventories across the company. So could you just sort of explain that a bit further? Why do you feel those lower inventory levels are sustainable? I mean is it sort of a new ERP system? What makes you comfortable with those lower levels of inventory? So that's the first part. And the second part is around CapEx. You're guiding to $400 million in CapEx for 2017. If you could also remind me where maintenance CapEx levels are and how that number compares to maintenance levels. Just trying to understand A) the sustainability of the working capital improvement; and B) these lower sort of CapEx guidance figures.

Well, as you know, Hassan, some of our divisions have been going under some restructuring. I think that when we look at a lot of the restructuring that's taking place with Textile Effects, Advanced Materials and even some of our other divisions where we didn't necessarily publicize a lot of that, I think quite frankly to be honest with you, a lot of our attention was drawn to our costs and were drawn to expanding the business. I think certainly something that we – I mean, I take fault of this as CEO, we could've perhaps started a little bit earlier was a more intense focus on getting our inventories, and getting our free cash flow right. I think this last year that was certainly a top priority. I want to make sure that as we generate free cash flow that we're just not sucking in our gut, and we're seeing inventory drop for a quarter or two and then next year it'll all come back out. I think that the inventory improvements that we've made, the 10-day reduction that we've made is a material step, and I think it's a permanent step. And we've looked throughout the entire system from warehousing to shipments, to plants, to our needs at each facility and so forth, and I think that these are permanent improvements. I think that as we look in 2017, we're going to continue to see – I'm hopeful that we'll see another two to three days of improvement. Every day in a company this size obviously tens of millions of dollars. So I would hope that we would continue to see that sort of days of improvement this next year in 2017. However, that's going to be offset a little bit by the value if we continue to…

Very helpful, Peter. Thank you so much.

Thank you. The next question is from the line of Kevin McCarthy at Vertical Research Partners. Go ahead, please.

Hi, this is Matt on for Kevin. Just wanted to touch a little bit on the one-time separation costs for Venator, around $100 million. What should we estimate for those kind of recurring, stranded costs for that business as it becomes an independent entity?

Yeah, the $100 million, none of that what I would call stranded or recurring costs. That is all related to one-time setup of IT and reorganization of legal entities and things like that, so it's a one-time charge.

Okay. And to maybe piggyback a little bit on Hassan's question on maintenance CapEx levels, do we know what these levels will be for the independent entities, both Venator and RemainCo?

Matt, we generally think about capital for Venator at being roughly kind of $100 million or so. Maintenance, within that $100 million is going to be approximately $50 million to $60 million.

Okay. I appreciate it. Thank you.

Thank you. The next question comes from the line of James Sheehan at SunTrust Robinson Humphrey. Please go ahead.

Hi, this is Matthew Stevenson on for Jim. I want to ask you on your opinion on your ability to pass through the recent movements in benzene prices?

Yeah, we feel that the markets are sufficient that we will be able to move those through on a timely basis. Again, they won't always match up day-to-day, but I would hope that within the quarter itself, that you should be able to within a two or three-month period, by the time the benzene's flushed through our system, that we should have been able to effect price increases. So I feel confident that the markets are such today that we'll be able to adjust our prices accordingly.

Got it. And then on slide 10, you provide a series of annual EBITDA improvements in – for – I think it's meant to be for the Pigments and Additives business. And I noticed that just the 2018 increase is quite a bit larger than the increases in 2017 and 2019. Could you clarify why that would be the case? And maybe quantify that? It says here $75 million annually, but I don't know what the...

A lot of that's timing. And so as you implement and you put this stuff through, and you look at it on an annualized basis, many of these projects will be started in 2017, and in order to see the full impact of it, you have to have a full 12 month. So it's not to say that you look at the slide, it looks like we're only doing 15%, 10% of the projects in 2017. What we'll be doing the majority of the projects will be started obviously as quickly as possible in the first six to 12 months. But a lot of that's just the timing on the implementation and when they're completed.

Is it meant to be – you say $75 million a year, is that meant to be an average? So if you take the three years of improvement and divide by three; that would equal $75 million or greater, or is that even in the worst year a $75 million improvement?

I think that would be $75 million on a per-year basis on average.

Got it. Okay. Thank you very much.

Thank you. Next question is from the line of Laurence Alexander at Jefferies. Please go ahead.

Good morning. This is Dan Rizzo on for Laurence. Could you just give us an update on what you think – how you're thinking about leverage targets for the levels for Venator and Huntsman post-spin?

Yes. Dan, we've said before that we believe that the leverage will be similar to what the leverage ratio is on an LTM basis at Huntsman Corporation. So think about it in a similar-type basis as we lead out. That will quickly de-lever in Venator as it continues to have pricing improvement and business improvements going forward. So that will be the maximum leverage for that company as it comes out of the box on an LTM basis.

Okay. But just given the percentages that would suggest that in the beginning at least Venator would have a greater percentage than the spinout was – that the EBITDA breakup just given general transfer payments and things like that.

I'm not sure I follow your question on that one, Dan. I think you're saying...

Well, you're saying that you'll have similar less 12 months leverage ratios, but with the assumption that Venator makes a payment to Huntsman post-spin, I would think that their leverage levels would initially – they would have initially higher percentage of the leverage than Huntsman, correct?

No, I don't follow that. I don't think so. I think what they will have is they will have a similar leverage amount. When you think about a turn of debt to EBITDA that Huntsman Corporation has at the time it spins, and so it will have that amount of debt. And you're right, Huntsman intends to pull that amount back into Huntsman Corporation. But it will have that level of debt, and it will quickly be able to reduce that debt and over time with its increased earnings, it will de-lever.

Okay. Thanks. And then across the entire portfolio, what's the net impact of butane prices at current levels compared to where they were in 2016?

I'm sorry, you're saying what's impacted or how much is it?

How much is it?

Oh, it's – let's see. If we look at the fourth quarter of where we are today, it's around $0.85 a gallon. A year ago this time it was around $0.60, and currently, as we look in the first quarter right now, it's around $1.20, $1.25. So from the fourth quarter of 2015 to today, it's doubled.

All right. Thank you very much.

Thank you. The next question is from the line of Robert Koort at Goldman Sachs. Please go ahead. Robert Andrew Koort - Goldman Sachs & Co.: Thanks. Good morning.

Good morning, Bob. How are you? Robert Andrew Koort - Goldman Sachs & Co.: I'm well, thank you. I was wondering if you guys could talk about maybe what you see in the industry in terms of the philosophy on pricing for this up-cycle. Obviously, you're just in the early days, but the prior up-cycle was extreme and quick and had a pretty negative hangover effect. A couple of cycles before that were a little more gradual on pricing. So can you talk maybe about what your intent would be? Is it get as much as you can while you can? Is it be a little bit more diplomatic with the customer as to have more of an extended up-cycle? Has anything changed in light of maybe the past cycle, and again the painful effect of the past down-cycle?

Well, let's remember that we are a participant in the market and anything that we say, Robert – Bob, I don't want to represent our competition and I don't want to represent the market. I think that any time, whether it's Huntsman that receives rapid and sudden price increases on our raw materials or our customers, I'm not sure that this is beneficial to either side, because they're typically short-lived. And I think that as you look at where we are in TiO2, there is some elasticity in that the margins got so bad and prices got so low as we were saying a few quarters ago, that these were wholly unsustainable sort of rates. And so I would think that as we look at the prices that are – the momentum that's building now, the supply demand that's building now, the capacity that's in the overall market, I would hope that this would be a longer, more sustainable, perhaps a more gradual sort of an increase, and not just a spike to where people are panic buying and subsequently people are then panic selling which is somewhat what we saw last time. But look, as you know in this industry, the best-laid plans often go outdated very, very quickly. But you just asked for philosophy here. Simon, do you want to – anything in there you would want to change?

Yeah. No, I think that's right, Peter. A more measured, steady approach, you've seen the $300 captures off of 450 announced these past three quarters. You've seen fresh announcements of that scale. There can be some difference in Europe because of the weakened euro against the dollar these past number of months. But broadly speaking, it's a more measured, sustained and we're encouraged by our pricing progress going through 2017, continuing through into 2018, and we fully anticipate and we've seen that our feedstock and all suppliers are taking similar type of measured approaches with us. And I think that's the pattern we continue to see. Robert Andrew Koort - Goldman Sachs & Co.: And could you give us an update on what's happening in China? Obviously, as a consequence of some of the other commodity markets and governmental interventions, you saw a pretty massive increase in ore costs there. Has that reversed at all as we've seen some of those commodity prices soften a bit, and what's your sense on incremental capacity available out of Asia?

Bob, that's – I'll take that part in two parts. To your first point, we have seen some higher import ilmenite prices into China these past months. We've also seen, as a result of some of the governmental initiatives around the environment, there's some curtailments and reductions in operating rates of key facilities that are down to constraints around the 70% kind of level. It's less unclear whether some of those are complete and they're through those. We suspect some of those continue. But I don't think that if you look at the latent capacity in China, I think we can continue to see some kind of like nipping up of exports into the Asian region from China. Robert Andrew Koort - Goldman Sachs & Co.: Terrific. Thanks.

Thank you.

Thanks. The next question is from the line of Frank Mitsch at Wells Fargo. Please proceed.

Good morning, gentlemen, and congrats to Sean and Kimo on their new roles.

Thanks.

To follow up, Simon, you mentioned the 3% or Peter mentioned the 3% sequential increase in TiO2 price in Q4. Can you talk about where you saw that geographically? Parse that out geographically, and what have you been seeing so far here or realizing so far here in Q1?

Yes. So let's pick up with Q4. You may recall that there was no announced North American price increase in the fourth quarter. So that's why you saw a lower kind of overall price capture, but we expected and achieved price captures that we represented on prior calls, et cetera, the 50% to two-thirds types of range. So that's the fourth quarter. In the first quarter, we've got these announcements running. Similar types of levels by all markets than – I think that as we said before, you should think about this as a consistent and steady approach to pricing. And that's possibly where this lands.

No offering of what sort of percent you're seeing so far in Q1? Just consistent? Is that fair?

Yeah, I think that when we're still in discussion with customers and so forth, it's just premature for us to talk at this point.

Understood. And Peter, can you envision a scenario where you would go forward with the Venator spin-off prior to the restart and demonstration of Pori coming back online?

Yes, I could envision that. I'd have to be very, very certain that we were very close to a startup and that there wasn't a lot of startup risk. I think that the last thing we want to do is have a spin that takes place under any sort of a cloud of uncertainty. And I think in order to be able to maximize value on both sides, we need to have absolute clarity and certainty about where we're going and how we're operating, and plan operations and so forth. So as we get closer to that date, we'll certainly be taking those things into consideration on that decision.

Very helpful. Thank you.

Thanks. The next question is from the line of P.J. Juvekar at Citi PB. Please go ahead.

Good morning. This is Eric Petrie on for P.J.

Hey, Eric.

Hi. Paint volumes are growing at 1% to 2%. But TiO2 volumes are growing faster than that. So does that indicate some restocking by customers given a rise in prices, and could you give any qualitative comments on your customer inventory levels?

Yeah, I think that when we see that, look, there's going to be some seasonal lumpiness. I wish that there wasn't. I wish it there was more consistent buying with consumption patterns, but our industry has a tendency to be the shock absorber of being able to supply when and how much our customers want, so I think that when you see quarters like this, when people are building stock to go into a heavy paint season, that you typically would see buying ahead of the consumption of TiO2. I wouldn't be overly concerned with that. And there are other elements as well in the plastics compounding area and other applications in TiO2 that go beyond just the paint capacity.

Okay. And secondly, just could you give some guidance on your contract renewals for mineral spins and how are input costs trending for you?

Yeah, I'll pick that one up, Eric. We purchase a broad slate of advantaged sulfate ores, as you know. So we have a high number of choices. We have phased range of contracts, which allows us some protections and some – a better way to manage our business. So I think it's fair to say that we feel good about that, and manage any profile of pass-through cost from feedstock producers. In terms of trends, I mean, I mentioned earlier some uptick in some ilmenite price particularly into China. So that's what the market's seen. Obviously, we're less in a position to answer on behalf of the market. For ourselves, of course, we can say that we see some nominal headwind. We expect some inflationary pressures in ores as we go through this year, but we still expect to continue to increase our margins through 2017.

Thank you.

Thanks. Next question is from the line of Roger Spitz at Bank of America. Please go ahead.

Thank you and good morning. Thank you and good morning.

Hey, Roger.

How are you?

Okay.

Hey, on the Rockwood lawsuit, how does that lawsuit impact the timing and perhaps even the feasibility of spinning off Venator? Presumably Venator will be a lot smaller if the judge allows you to make a recision or unwinding of the Rockwood acquisition as you're asking for in the suit?

Yeah, I don't think that we'd want to really get into that, Roger. It's a good question, but at this point I wouldn't even want to begin to speculate what a judge may or may not say or rule.

Understood. On LER, if I understood it correctly, it sounds like you're destocking LER in Q1 2017. Were you running with too high an LER inventory? Or are you seeing LER underlying demand down? Or perhaps you're walking away from some low margin LER business and just simply want to right size your LER inventory due to that?

I think it's a combination of all of those. I think that we're seeing LER margins dropping, and we are in the process of ourselves making sure that our inventories are at the proper level, and so when you under-run a facility because demand is down and margins are dropping, you under-run those facilities, you have your fixed costs spread over fewer pounds, and that's a bump that – or in this case, a pothole that you'll see in our earnings in the first quarter. We believe that to be a one-time event. But LER, because of the actions that we've taken over the last two years, is a much less impactful part of the business.

Thanks. And lastly, did I just hear correctly in the remarks that the Q4 2016 MTBE EBITDA was a negative one again?

Yes, unfortunately you did hear that right.

Okay. Thank you very much.

But I would also remind you that our propylene oxide business is a strong business. It's a healthy business. It's a good contributor, strong contributor to our MDI business. So what we've done in the past is we've had our propylene oxide and MTBE earnings up until this past year combined into one and I think a more accurate reflection is to see that PO MDI margin together because they both feed on each other, their products that we blend together and so forth. And I think it's a more accurate reflection to the overall health of the MDI urethane story.

Understood. Thank you very much.

Thank you. The next question is from the line of David Wang at Morningstar. Please go ahead.

Hi. Good morning, everybody.

Good morning, David.

Hello.

I just wanted to follow up on Polyurethanes. So if we take out the MTBE impact on the adjusted EBITDA, how would the margins for the MDI side do, I guess, year-on-year and for full year?

Margins on that business for the full year, taking out MTBE is right in the mid-teens and we – if you look at the last couple of years, that trend has continued to improve and increase as we move further downstream. Obviously our ultimate objective in that business is to take out volatility and to continue to see a strengthening in the margins in that business. And I think that that business is not peaking and I think that as we look at the overall strength of that MDI business, that's going to continue to be a strong core of our business as we push towards the 20% sort of margin level in that business.

Great. And can you talk a little bit about the supply and demand dynamics for MDI going forward? What sort of projects you're seeing coming online and how demand is trending?

Well, I mean, demand continues to be strong. Surprisingly, as you look at where the real strength is coming globally, it's coming from North America and from Europe, and as we continue to look at that, those are the large bases for us of our downstream plan, and of our largest facilities, our most competitive manufacturing sites and so forth. The next major project to come on stream globally, I'm talking about a grassroots, standalone sort of a project is our project, that will be – well, let's see, I guess it'd be the Sadara project, and Dow Chemical in the Middle East, exactly when that will be coming up, probably the latter part of the year. And then our project which will be coming up this next year, and so I think that as we look at that, it's for the next couple of years not a lot of new capacity coming into the market. And the market I think continues to grow at solid single-digit sort of growth rates.

All right. Thank you.

Thank you. The next question is from the line of Christopher Perrella at Bloomberg Intelligence. Go ahead, please.

Good morning. I wanted to delve into the restructuring. I realize the cash outlay is trending down. What projects are you still working on? And how should I think about that trending continuing into 2018?

Well, I'd say that there isn't one majority that's taking up the lion's share of that. But we continue to look at our cost footprint and business improvement plans and so forth in our Textile Effects business. And we also have that in our TiO2 as well as in our Performance Products. Of the $70 million, $75 million, probably right around half that is going to be from TiO2 and the Venator restructuring, that $75 million project that's starting off.

Okay. Okay. Will the Performance Products and Textile actions and cash outlay be done by the end of 2017?

Pretty close. Generally, Textile Effects still has some cash flow as we restructure the Swiss area of that business, and there's still some elongated cash flow that will go out. But it's not significant. We also have some inflows that will offset that as we go forward into the years...

You're talking net-net singular millions of dollars beyond 2017.

Okay. I appreciate the clarity on that. And looking at the net debt as we go through the year here, you ended at 3.3. Do you expect that to change materially by midyear? And should we be thinking I guess that Venator is coming in at three times debt to EBITDA?

I would just say this. I would expect that the ratio that we ended the year at to be pretty similar as we go into a pre-spin in the second quarter. First quarter as we draw down working capital, it'll be a modest increase in terms of our leverage ratio just because of seasonality as we do on inventory. But I'm not going to comment yet in terms of the size of debt that we expect to put on Venator other than we think that it will be roughly in line on the leverage ratio at Huntsman Corp. depending on the LTM EBITDA of Venator at the time.

Okay. Thank you very much.

Thank you. We now have another question from the line of James Sheehan at SunTrust Robinson Humphrey. Please proceed.

Hi, this is Matthew Stevenson on again. Quick question about your interest expense in 2017. You obviously paid down quite a bit of debt there at the end of December, and I noticed that in the cash flow slide, it seems as though at least your cash interest is not declining very much year-over-year. I was wondering if you could explain that and give me maybe some guidance on the P&L interest expense?

Again, I think maybe there's a little bit of conservatism in that number. I do think, again, we'll see debt go up a little bit end of the first quarter as we draw down inventory, and there's really no assumption made there as it relates to Venator. That is pre Venator. So there may be a little conservatism in that number.

Thank you.

Operator, we're just about at the top of the hour here. Why don't we take one more question?

Certainly. This is from the line of Alex Yefremov at Nomura Instinet. Go ahead, please.

Thanks for the follow-up. Just wanted to check in on the status of your JV with Sinopec at Nanjing? I think you were looking at first half of 2017 commercial startup. How is that trending? Do you see any EBITDA or cash flow contribution this year from that project?

That project is on schedule to start up the middle of this year, and all updates I've now received would tell me that we're right on schedule.

Any thoughts on financial impact?

I would just say that as cash flow is generated there, they certainly have leverage on that business. Cash flow will be used in that business to reduce its indebtedness on its balance sheet. So as far as dividends back, I would expect none this year.

Okay. Thanks a lot.

Thank you. I'd like to return the – sorry.

Yeah, Dave, this is Kurt and we want to thank everybody for joining us on the call today. We look forward to engaging further with folks as we go through the first quarter here at various conferences and marketing events and certainly to the extent that you have additional questions, feel free to reach out to us here at Huntsman. So thank you for your time.

Thank you for your participation in today's conference. This concludes the presentation. You may now disconnect. Good day.