Greetings, and welcome to the LSB Industries Second Quarter 2015 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions]. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Carol Oden, Executive Administrative Assistant for LSB Industries. Thank you. Ms. Oden, you may begin.

Thank you. Good morning. Welcome to the LSB Industries, Inc. second quarter 2015 conference call. Today, LSB’s management participants are Barry Golsen, Chief Executive Officer and President; and Mark Behrman, Executive Vice President and Chief Financial Officer. Jack Golsen, LSB’s Executive Chairman will also join the question-and-answer session after the prepared comments. This conference call is being broadcast live over the Internet and is also being recorded. An archive of the webcast will be available shortly after the call on our Web site at www.lsbindustries.com. After comments by management, a question-and-answer session will be held. Instructions for asking questions will be provided at that time. And now, I will turn the call over to Mr. Barry Golsen. Please turn to Page 3 of the presentation.

Thank you for joining our conference call today. During this call, we will report to you the results of the second quarter and also share some other information about LSB that’s important to our shareholders. We are very disappointed with the results for the quarter. Sales declined 9.4% for the quarter compared to the second quarter of 2014. Operating income decreased $21 million to $2.6 million. And adjusted EPS decreased to $0.02 per share compared to $0.47 per share in last year’s second quarter. I will give you an overview of the most significant drivers of our results this quarter and Mark will review the financial metrics and provide more detail analysis later in the call. During May, we had an unplanned outage at our Pryor Facility that lasted 17 days, primarily related to the repair of a heat exchanger in Pryor’s ammonia plant that could not be repaired on site. This repair was completed and Pryor was returned to production. Incidentally, for April and June, Pryor had at or near 100% on-stream rates. Unfortunately, the May outage at Pryor occurred at the height of the ag season. By the time the facility was back on line, it had missed much of the season for its products. Going forward, Pryor will be able to sell all UAN products it produces pursuant to its off-take agreement with coke. While we are on the subject of Pryor, it just completed a 26-day planned turnaround and is the process of restarting. We have been implementing extensive reliability and safety enhancements at Pryor over the last three years and coupled with its new management team, the facility has shown substantial improved performance over that time. While there are certainly still improvements to make, which we are in the process of making, we expect unplanned…

Thanks, Barry. As Barry indicated, our second quarter results were disappointing compared to last year and certainly what we expected going into the quarter. Page 6 of the presentation provides a consolidated summary statement of operations for the second quarter of 2015 and the first half of 2015. Net sales were down for the quarter driven by the lower chemical sales, which contributed to depressed margins. I’ll go into some detail in the next few slides. Overall, SG&A increased $7.5 million in the second quarter versus the second quarter of 2014. That increase was primarily driven by higher corporate expenses of approximately 3.9 million arising primarily from additional advisor fees incurred in the finalizing of a settlement with an activist shareholder, which totaled $2.7 million. An increase in SG&A at our chemical business of approximately $1.7 million primarily from higher training expenses related to the incremental staff hired to run a new ammonia plant at EDC. An increase in railcar lease cost at EDC related to the sale of low density ammonium nitrate and additional maintenance costs related to railcars and related infrastructure also at EDC. And finally, an increase in SG&A at our climate control business of approximately $2 million related to higher warranty costs for specific claims and increasing freight costs as a percentage of sales from a shift in product and customer mix and an increase in personnel costs. Some of the warranty and personnel costs related to one-time items, which totaled $700,000. Operating income and net income were both down for the quarter versus Q2 2014 due to the decrease in sales and gross profit margins and the increase in SG&A that I just discussed. Page 7 provides a summary of the chemical businesses operating results for the second quarter of 2015 compared to the second…

Thanks, Mark. Page 13 updates the status of each of our chemical facilities. In a nutshell, the Pryor facility successfully completed its turnaround and is in the process of restarting at this time. All other facilities are currently performing as expected. Page 14 details the status of the El Dorado ammonia plant expansion project, which I already discussed with you. The project timeline is now driven by the execution of the construction process with the critical path item being installation of piping. Having terminated the underperforming contractor, piping is our main focus before installing controls and electrical equipment. As mentioned before, we have revised the completion and start-up date to the second quarter of 2016. In addition to the ammonia plant being constructed at El Dorado, we are adding a 65% Weatherly nitric acid plant and concentrator. A timeline for this part of the project is outlined on Page 15. At this time, the nitric acid concentrator is in operation. The nitric acid plant is scheduled to be mechanically complete in September 2015 with production beginning in mid fourth quarter 2015. On Page 16, there is a recent photograph of the ammonia plant on the top of the page and below you can see a recent photo of the nitric acid plant and the concentrator. On Page 17, we outline our third quarter 2015 chemical sales volume outlook. Finally, I’d like to switch focus to the vision of LSB’s future on Page 17. As we have described to you over the past several conference calls, we’re focused on value drivers, projects and initiatives that have the potential to be transformative to the company. We expect all of these initiatives to drive improved performance, enhanced profitability and shareholder value creation. Summing up, despite our still inconsistent financial performance, our efforts over…

Thank you. Before opening for questions, I would like to thank you for listening. We request that you limit yourself to three questions so that others have the opportunity to ask as well. If you should have additional questions, please feel free to rejoin the question queue. [Operator Instructions]. Our first question comes from the line of Joe Mondillo with Sidoti & Company. Please proceed with your question.

Hi. Good morning, everyone.

Hi, Joe.

So my first question is sort of a two-part question related to the financing for the project. Just in regard – first part is regarding the increased budget. I’m just wondering how does this work regarding the subcontractor? Is there any way that there is a negotiation process regarding sort of the faulty work that that one subcontractor was doing, or is this sort of a done deal in terms of the budget that you’re putting out here today? And then second part, I was just wondering if you could give any more color regarding sort of your cash needs and your feeling going into the back half of this year and into 2016 regarding cash flow and your cash needs?

I’ll take the first part of that question and Mark will take the second part of that question, Joe. With regard to the question you asked about the subcontractor, we will have a back charge claim. And at this point in time, I feel that that’s all I – it’s prudent to say about that, because it’s something that is in process at this time.

So you do – you’re confident that you’re going to be able to recoup something?

At this point in time, I don’t want to speculate on that but that certainly would be our objective.

Okay.

Joe, as far as talking about – let’s walk through from a cash perspective. So let’s just think about it from a high level for a second. We said that the new range is now $660 million to $680 million in total cost for EDC. We’ve spent $437 million to-date. So that really leaves us $223 million to $243 million to spend on the project. We talked about how the cash that we had on hand, so after deducting about $15 million for the repayment of the Marcellus Shale working interest loan, we’re left $143 million of cash at the end of the second quarter. You subtract out $75 million on the working capital line. I mentioned that we have $50 million of additional debt available under the bond indenture. So really that leaves us on the low side if we – the project only cost 660, that leaves us $45 million excess for all the CapEx or $25 million on the high side. I have mentioned earlier and you can see it on the slide that we have about $30 million to $50 million of other capital projects scheduled for the second half of 2015. So when you really subtract that out, there’s $15 million excess if we spend 660 and we have a debt of $25 million if we spend 680. Of course, keep in mind that that excludes any expected operating cash flow for the second half of this year. So I think I’m trying to give you a roadmap as to how maybe is the best way to look at it.

Yes, that’s helpful. So it sounds like you have some levers to pull. It sounds like you have some leeway regarding the financials.

Well, we have availability as I said under the working capital line. We can pull down another $50 million of debt under the bond indenture. And then I mentioned that we are in discussions with various financing sources for additional capital. So I would expect that we would see some additional capital.

Okay. And I missed the working capital flexibility that you have there. What are you expecting for working capital in the back half?

The working capital in general or the working capital line?

In regard to whether working capital is going to be a source of cash or use of cash?

No. I mean working capital generally runs between $75 million and $80 million and it’s been pretty constant. So we don’t usually have a lot of flexibility. We usually have a lot of variability there.

Okay, that’s what I thought. I just wanted to confirm. The other question I had is regarding these costs. It looks like a decent portion of the costs that you cited were sort of one-time in nature but then some seemed like they could sort of reoccur. So at least maybe half of them are one-time. In the back half of the year, how are you looking at sort of these inflated costs that you saw in the second quarter?

I’m assuming you’re talking about SG&A costs.

That’s correct.

Okay. So as I mentioned, corporate expenses was up $3.5 million to $4 million; 2.6 million was from advisor fees that we paid. And so we will not have that in the third quarter. When you get to chemical, most of it is at EDC. And as I went through that, I just kind of talked about how those would be ongoing costs until we get the ammonia plant up and running, because they’re all related to the expansion and/or the shifting of our contract from Orica to other customers. So when the plant comes up, those costs will be absorbed into product sales. On the climate control side, I did point out that there was $700,000 of one-time expenses really related to specific warranty items and then there was a one-time expense for personnel-related expenses. So I would look at climate control as certainly not having $700,000 of the $2 million of additional SG&A. And then certainly on the corporate expense side, I would look at, at least $2.6 million as being done going from third quarter going forward.

And is that related to the settlement with activist fee, the 2.7?

Yes.

Okay. So you’re looking at maybe $3 million of sort of one-time or I guess actually more like 3.5 million to 4 million of one-time that you saw in this quarter?

Yes, I’d say $3.5 million is a pretty good number.

Okay. And then just lastly regarding the El Dorado plant, sort of the expectations in the back half of the year. I realize the economics of that plant are still pretty tough given just the price of ammonia. However, it seems like ammonia prices have fallen faster than UAN prices over the last couple of months. Is that what you’re seeing? And if so, how is that going to sort of effect the profitability at that plant relative to the first half of the year, because if ammonia is falling faster than UAN, it should actually be somewhat of a positive for now?

Yes, so let me give you some perspective on EDC. We lost $10 million in the quarter and honestly I think that you should expect that going forward on a quarterly basis until we get the ammonia plant up and running. Orica is a big part of that. We come off of a contract where we had a take or pay contract for 60,000 tons. And so if you want to do sort of a comparison, second quarter of last year – this second quarter, we had a swing of about $9 million. We lost $10 million this quarter. We lost $1 million in the second quarter of last year. About $4 million of that swing was the loss of the Orica contract. We went from 60,000 tons that were being paid for, so in this past quarter we sold 16,500 tons. So a big swing there and there’s a lot of sensitivity to absorption of costs based on the amount of times. Going back to our – we don’t sell UAN out of EDC but we do sell high-density ammonium nitrate, which is sold into the ag markets. Remember, it’s sold at spot pricing. So you really – while ammonia is a big component of that, because we’re producing from purchased ammonia, believe it or not in the last quarter, high-density ammonium nitrate prices dropped about 17% and ammonia prices dropped something less than that. So the margin differential compressed. So it’s not just looking at ammonia prices, we also got to look at the selling prices and have a drop relative to each other.

Okay. And just to clarify, you said 4 million of the 10 million loss was related to Orica?

I said that there was a difference of 9 million between the two quarters last year the second quarter and $4 million was – there was $4 million related to Orica of that $9 million.

Okay. And then the 5 million is related to the lower AN prices and I guess higher ammonia?

Lower AN prices was about $3 million of the difference. And then remember we talked about SG&A being about $1.5 million. So that gets you to 8.5 or the 9.

Okay. Thank you.

Sure.

Thank you. Our next question comes from the line of Stefan Neely with Avondale Partners. Please proceed with your question.

Hi. Good morning, guys. Thanks for taking my questions.

Hi, Stefan. How are you?

Doing well. So I’m going to kind of run this down again. With the – covering the additional costs on EDC, you mentioned that there should be some discretionary costs that you can defer. Can you – is that just the 11 million to 14 million that you highlighted in the slide, or is there more than that?

No. I don’t have the slide in front of me but if you take out EDC, there’s about $30 million to $50 million of other capital projects in the second half of 2015 that we outlined.

Okay.

I’d say we’re taking a look at that really hard to try and figure out what’s really discretionary. Clearly, we don’t want to defer things that are related to safety in our plants or things that require maintenance. But there’s always discretionary capital projects. So we’re looking at that now. My gut tells me there’s probably $10 million to $15 million of that, but we can probably defer into the second half of '16 but I think we need to do a more thorough review than just my gut.

Sure, understood. Okay. And you said you were talking to – looking at other sources of capital beyond this. Can you give us any color as to what you’re thinking there? I mean, more debt, maybe a rights offering or anything like that.

Look, it’s early in the process and I think I can’t give a whole lot of detail. I would tell you that any equity issuance would probably be really low on our list.

Okay. All right, fair enough. Moving on to Pryor. The 17-day outage that was entirely isolated to the Q, I didn’t catch if you said that or not, and was there any reason why it wasn’t disclosed?

I didn’t get the first part. It was entirely isolated to --?

Sorry, to Q2. You don’t expect to have to deal with any more issues outside of the quarter, do you?

No. I mean as Barry mentioned, we came up back in June. We then came down from a plant turnaround, and that turnaround is finished and we’re in start-up right now. As far as why we didn’t announce it, honestly, we didn’t think – at the time that the outage happened, it sort of took on a life of its own. We think it was going to last that long. In fact, out of the 17 days, 15 days were really related to the heat exchanger and believe it or not, another two days for a problem in the industrial park. We had a water main problem in the industrial part that took this down for two days and that was – the industrial park wide, it wasn’t specific to our plant. But in retrospect, after that happened we should have made the announcement and it won’t happen going forward.

All right, sounds good. And one last question on – switching to climate. Could you explain the warranty issue that occurred during the quarter?

Yes. We do regular warranty or proof of warranty on an ongoing basis and obviously we review that every quarter – every month in fact. But there was a couple of specific things that happened in a couple of our businesses with some product that came back that necessitated us to increase the warranty expense for the quarter. So those were kind of one-time things that don’t normally happen. But we felt it was prudent to accrue for those.

Sure, okay. All right, thanks guys. That’s all my questions.

Thanks.

Thank you. Our next question comes from the line of Brent Rystorm with Feltl. Please proceed with your question.

Thank you. Just a couple of quick ones, most of mine have been answered. Does the EPC contractor have any exposure to cost recovery on these overruns?

This is Barry responding. This is an ongoing area of discussion and it’s an open issue. And I’m not trying to be evasive but at this point in time, I feel that it’s something that we really feel uncomfortable discussing. At this point, we’re having dialogue with the EPC contractor.

All right. Could you – and you may have mentioned this, I apologize if you did. Could you remind us of how the agricultural chemicals from El Dorado will be sold? I don’t recall what you said as far as off-take agreements or if you’re just selling all of them on your own?

Could you repeat that please? I had a little trouble hearing it.

Yes. How will the agricultural chemicals from El Dorado be sold?

Well, they’re sold now. We’ve got a sales force that sells them and none of that --

There will be no off-take agreements with the expansion of them. It will all be sold internally?

Well, we’re looking to have an off-take agreement with regard to any excess ammonia that is produced at that plant that we don’t update into other products. And also we look to have certain specific agreements in place on industrial AN. But with regard to the ag products, which was your question, it will go through the traditional channels that we sold our ag products.

Thank you.

Thank you. Our next question comes from the line of Keith Maher with Singular Research. Please proceed with your question.

Good morning. I want to just follow-up a little on the Pryor outage. Just trying to understand, you mentioned the heat exchanger. I know that you’d replaced a lot of the parts there. I’m just trying to understand, just maybe a little bit more details on why you had this failure?

Well, it just so happened there was an idiosyncrasy of this heat exchanger that when the failure occurred, which had to do with the tube that ruptured I believe that because of where it was located in the heat exchanger, it was not a repair that could be made on site. It was one of those unusually – most repairs are made on site when those things occur. And it had to be demounted, sent out to a shop, repaired and brought back. So it was an unusual occurrence.

Okay. Thanks. Also just to understand the income statement, did you – is that one charge for or one expense – are you increasing the allowance for doubtful accounts? And if so, just trying to understand what the motivation was for that?

No, it’s not an allowance for doubtful accounts.

Okay.

Are you talking about the one-time warranty expense?

Well, it’s like 400 – the 491 provision for losses on accounts receivable, 491k.

We review accounts receivable on a quarterly basis, so I think if you’re looking at that on the balance sheet, we might have taken an additional reserve but that’s sort of normal course of business.

Okay, all right. And on the – I know you’ve been working to replace the Orica business and we talked about this some in the past. I know it’s come up. But the motivation there was to get I assume a bit better margin on that business. Is that the case? As I understood it, it was your choice to not renew that contract, to go out and try to replace that business. So I’m just trying to understand what the reasoning was behind that?

I think the reasoning behind replacing Orica was and I think we discussed this in the past. We sold Orica as well as CF Industries. And so CF made an announcement that they were going to further increase their agreement with Orica and increase the amount of tons that they were going to sell them. So for us, sort of the handwriting was on the wall. I mean we saw what that meant for us. So there was a nuance within our contract. We had to give a one-year notice so that we could actually go out and talk to others to start marketing so that at the end of the contract, we could fill it. So yes, we took the first step but I think it was more reactionary than anything else. As far as the contracts that we have, you’re absolutely right. If we are – Barry talked about a majority of the previous volume that we sold or Orica took being replaced, if the contracts are – or customers under their contracts take the stated volumes that are expected in that contract, we are about 90% filled on the Orica volume. Now keep in mind though that they’re not take or pay contracts. They are minimum volume contracts with penalties if they don’t take those minimum volumes. But at the end of the day, if they do take those volumes on an apples-to-apples comparison, we make significantly more money from a margin standpoint than we would under Orica.

Okay.

I’d like to just add one point of clarification to what Mark just said. When he said we were 90% filled, he’s talking about 90% filled after we bring the new ammonia plant online.

Yes.

All right. Thank you.

Thank you. Our next question comes from Bruce Zessar with Advisory Research. Please proceed with your question.

Hi, guys. I just wanted to come back again to the financing. I think with the prior question, Mark, you went through some of the math relating to the cash on the balance sheet. Just real quickly. My first question is how much cash do you need to keep for kind of operating purposes?

Well, I think we have at any point in time, as I said earlier, $75 million to $80 million of working capital. So if I had $20 million to $30 million to as much as $40 million, I think we’d be fine but I don’t think we really any more than that.

So I mean, how does the – you need to run with 40 million cash on the balance sheet just to operate the business day-to-day, right?

No. I’d say we need to run with $40 million of availability of cash. So whether that’s having a working capital line that’s got $40 million on it or some other availability, I don’t necessarily just have to keep the cash on the balance sheet.

Okay. So then I guess my question is kind of going through this math here, you said that you can go out for 50 million under the bond indenture. How much additional are you looking for right now? Is it just say another 50 million, so you’re looking to have 100 million total financing? I mean, what are you looking for in total?

Bruce, I don’t think I’m prepared to answer exactly what the gap is right now. I think we need to do a little bit more work to do that. And it’s too early in the game. But clearly I’ve outlined that if we are at 680 instead of 660, we’ve got a cash deficit.

You mean a cash deficit based on what you can borrow under your revolver, the 50 million you can go out with under the bond indenture and cash on balance sheet. So you’re saying the delta is if you go to 680 instead of 660?

For the most part, yes.

So to me it doesn’t sound like beyond going out for the 50 million bond indenture, you’d need more than another 50 million on top of that. Am I right about that?

I think you’re in the ballpark.

Okay. And it could be less, right?

It could be less. There are the measures that we could take and we could cut back on some of the discretionary capital spending, yes.

Okay, all right. And then you didn’t include the 2017 kind of targets as you had in your fourth quarter presentation and first quarter presentation in May. You did mention on the call, or maybe Barry did, that you still expect 90 million in incremental EBITDA from the capital projects at El Dorado on an annual basis once they’re fully up and running. Are your 2017 targets still the same as they were in the last quarter’s presentation?

Yes.

Okay. And then I know there’s been some questions back and forth about Orica and trying to replace that volume. If Orica were to keep running at the current – the volumes lost and partially replaced from Orica. If you were to keep running at that run rate going forward, how does that impact your EBITDA target in 2017 on the chemical side of the business?

It’s kind of an interesting question. I mean we have customers lined up to take – that want the product and want to take it, but they don’t want to take it at the high cost that we can sell it to them today. So, I think we feel pretty strongly than when the ammonia plant comes up and online, the volumes that they’re talking about in the contracts that we have, they’ll take those volumes providing that the market is there. So, I think what we’re talking about really is another $10 million a quarter for the next two or three quarters of losses at EDC, but we would definitely not expect that to continue once the new ammonia plant is up and running.

Okay. That’s everything I have for now. Thanks, guys.

Thank you. Our next question comes from the line of Roger Spitz with Bank of America Merrill Lynch. Please proceed with your questions.

Thank you. Good morning.

Hi, Roger. How are you?

Good. I just want to state this fact clearly just to make sure it’s clear in my own head. If we go to 680 CapEx level, we are looking at a cash deficit of 25 million after drawing the 50 million that would be allowed under the bond indenture and maintaining the 40 million availability you require for working capital. Is that the way to think about it?

No.

It’s not, okay. I thought I’d ask.

We would be in a cash deficit of $25 million if we borrowed that $50 million and we fully drew down on our working capital line.

Okay. So you need another – because you need 40 million, you also need another 40 million. So it’s really – I should think of it as like keeping the availability of 40 million you need just to operate. It’s really a 65 million cash deficit plus the drawing of the 50 million. That’s way to think about it.

Again, I think Bruce had mentioned earlier about 50, now you’re talking 60, 65. As I said, I’m not prepared to throw out a number but relatively in the ballpark?

Okay. And you talked in the press release about funding some piece of the El Dorado equipment with third parties. Shall we assume that this will be done under the max of 35 million and 5% of assets capital lease carve-out under the bond indenture that this would be capital leased and you’d use that carve-out?

Yes.

And regarding the 50 million basket, looks like you can lien that up presumably in parity with the current bonds. Should we think about it as if you do that, that it would sort of still be in the same collateral pool such that if you – the bonds would have an equal first lien on whatever you borrow on the 50 million as well as whoever you borrow it from would have the same parity claim on the rest of the collateral supporting the bonds? Is that correct?

I think that that would be a good assumption.

Okay. And then lastly, would you in fact tap – think about tapping it? Maybe you’re not ready to comment on whether you’d tap the bond?

It’s certainly always out there and available, but I don’t want to comment on exactly what we’re going to do on the $50 million. I’m not in a position to talk about that yet.

Okay. I guess the two – second half '15, the 254 to 290 CapEx, is there any pacing on that? Should we think it’s roughly 50-50 between the two, or is there some rough pacing on that between the two quarters?

Well, I think most of our CapEx spending is EDC and as I said we’re heavy into the construction phase. So I would assume it’s pretty equal third and fourth quarter.

Great. Mark, thank you very much.

Sure.

Thank you. Our final question today comes from the line of Owen Douglas with Robert W. Baird. Please proceed with your questions.

Hi, guys. Thanks for taking my questions. A lot of good ones have been asked before. I wanted to quickly just get confirmation that you guys do have business interruption insurance, correct?

Yes.

Okay. So I think in the past – sorry, I don’t have the notes to hand, but in the past you guys have been able to successfully get claims when there were these outages?

Well, yes, but there’s a waiting period on those. So a 17-day outage, for example, at Pryor is less than the waiting period before the BI kicks in.

I’m sorry. Can you explain what that waiting period is?

I think it’s 45 days.

I believe it’s 45 days, yes.

So you’re saying that you would need to be down for 45 days before you would have a claim? So this 17-day interruption would not be covered by your policy.

That’s correct.

Okay, understood. And if I could just to make sure I’m sort of thinking about this right. I think in the past you guys have sort of provided a sense for the benefit to be received from the El Dorado ammonia. What sort of the differential were you guys seeing in this most recent quarter between the cost to produce ammonia and the market price?

Yes, it’s between $250 and $270 a ton.

Okay, thanks for that. And just as I kind of think about this disruption, so you’re saying that you guys missed the peak of the season. So really this disruption – this is one of those things where you’ve sort of missed the boat and there’s no way to really recoup any benefit from it, correct?

Yes. I mean we didn’t miss the whole season. We missed 17 days of the season. But you’re right. Once the season’s past, it’s not like we can go back and restart it.

So I will add one comment to that. Because of the off-take agreement that we have at Pryor, which is different than the way we sell product from our other facilities into the ag sector, they are prepared because of their storage and distribution system to take UAN as we produce it. So it is somewhat slightly less seasonal than our other facilities. So even though we did miss the peak of the season, we will be able to continue to sell UAN.

I see, understood. And just to go back to the comments with regards to the minimum volumes. This is with regards to the contracts for replacing the Orica off-take agreement. You mentioned that there were minimum volumes and you’ve spoken a little bit about the maximum how that would look if they were to actually take what’s ultimately contracted for. How should we think about the minimums relative to the volumes, which Orica was taking previously?

I’d say the minimums in those contracts are probably 50% to 60% versus the maximum of 90%.

Okay, I see. Well, thank you very much, guys.

Thank you. This concludes the Q&A portion of today’s conference. I’d like to turn the floor back over to management for closing comments.

Thank you for participating today. We appreciate your attention. And I’d like to turn the call over to Carol Oden who has some important forward-looking statements.

Thank you, Barry. Information reported on this call speaks only as of today, August 7, 2015. You are advised that time-sensitive information may no longer be accurate at the time of any replay. The comments today and the information contained in the presentation materials contains certain forward-looking statements. All these statements other than statements of historical facts are forward-looking statements. Forward-looking statements include the words expects, intends, plans, believes, projects, anticipates, estimates, or similar expressions or statements of the future of forward-looking statements’ nature identify forward-looking statements. And forward-looking statements contained in this presentation include, but are not limited to, the following statements; unplanned interruptions going forward, cost and timing to complete the El Dorado expansion projects, goal of the El Dorado expansion projects, results of operations and losses at El Dorado until a new ammonia plant is up and running, expected improvements at El Dorado upon completion of the expansion projects, demand for climate control products, outlook for the markets served by our chemical business, Chinese urea replacing lost Orica chemical business, outlook for construction in the residential and commercial markets, expenses to be incurred until the ammonia plant goes into operation and contracts with new customers to purchase LDAN become effective, CapEx for the balance of 2015, funding capital expenditures and cash needs, negative cash flow until El Dorado expansion projects have completed, cost savings once new ammonia plant is completed, third quarter chemical sales outlook, improved performance and enhanced profitability and shareholder value, balance of 2015, increasing profitability in 2016, objective enhanced shareholder value, future for our chemical and climate-controlled businesses, and actions to be taken as directed by our strategic committee and benefits for those actions. You should not rely on the forward-looking statements because actual events or results may differ materially from those indicated by…