Good day ladies, and gentleman, and welcome to Olin’s Fourth Quarter 2007 Earnings Call. My name is Jen and I’ll be your coordinator for today. (Operator Instructions). I’ll now turn the presentation over to Mr. Joseph Rupp, Chairman, President and Chief Executive Officer.

Thank you. Good morning and thank you for joining us today. With me this morning are John Fischer, Vice President and CFO; John McIntosh, Vice President and President of our core Chlor Alkali products business; and Larry Kromidas, our Assistant Treasurer and Director of Investor Relations. Last night we announced that earnings from continuing operations in the fourth quarter of 2007 were $29.6 million, or $0.40 per diluted share, compared to $15.6 million, or $0.22 per diluted share, in the fourth quarter of 2006. Sales from continuing operations in the fourth quarter of 2007 were $404.8 million, compared to $247.1 million in the fourth quarter of 2006. Both our Chlor Alkali and Winchester businesses finished 2007 on a strong note. Chlor Alkali fourth quarter segment earnings were $68.1 million, which includes $20.9 million from the Pioneer operations acquired in August. Included in these results are approximately $5 million of realized synergies. In achieving these Chlor Alkali earnings, we overcame a lower operating rates, reflecting both planned maintenance outages at seven of our plants, and seasonally weaker demand. Operating rates in the fourth quarter of 2007 were 88%. Winchester earned $2.7 million in the quarter and completed its best year since 1994. During the quarter Winchester benefited from higher selling prices and stronger than expected demand, which more than offset higher commodity and manufacturing costs. Fourth quarter 2007 results included a $1.3 million pre-tax recovery associated with a prior year’s divestiture, and a $1 million pre-tax reduction in stock based compensation expense due to the sale of the metals business. Fourth quarter 2007 results also include a $3 million dollar pre-tax charge to adjust the asset retirement obligation previously recorded, as required under accounting standards for asset retirement obligations. Fourth quarter 2006 results included a $6 million pre-tax insurance recovery, which…

Thank you, Jim. First I’d like to discuss a few items on the income statement. Selling and administrative expenses increased by $3.5 million in the fourth quarter of 2007 compared to the fourth quarter of 2006. The increase reflects SG&A expenses from the acquired Pioneer operations, which more than offset lower corporate costs, primarily legal and legally-related costs. Looking at the 2007 SG&A expenses, I would remind everyone that these Pioneer costs are a significant component of the synergies expected to be realized as part of the acquisition. For the full year 2007, other corporate and unallocated costs decreased $5.4 million from the 2006 levels. This reduction reflects the lower level of legal and legal-related settlement expenses, associated primarily with legacy environmental issues and environmental recovery actions. As a point of reference, these legal and legal-related expenses represented approximately 25% of the total 2007 other corporate and unallocated costs. The decline in these expenses was partially offset by higher asset retirement costs and higher incentive and stock-based compensation expenses. Fourth quarter and full year environmental investigatory and remediation expenses were $8.6 million and $37.9 million respectively. This compares to $6.3 million and $22.6 million of expenses for the fourth quarter and full year of 2006. The increase in 2007 charges compared to 2006 relate primarily to a $7.9 million increase in costs at a former waste disposal site based on revised remediation estimates resulting from negotiations with a government agency. These charges relate primarily to remedial and investigatory activities associated with former waste sites and past operations. We currently anticipate the 2008 charges for environmental, investigatory and remedial activities will be approximately 25% lower than 2007. Total company defined benefit pension plan expense for 2007 was $14.4 million, compared to $27.8 million in 2006. The year-over-year decrease reflects the favorable…

Our first question comes from Frank Mitsch - BB&T Capital Markets. Frank Mitsch - BB&T Capital Markets: I jumped on just a tad late. I was wondering if you talked, when you were discussing the Chlor Alkali business, if you talked at all about the impact of plant turnarounds in the fourth quarter? And what your expectations are for the first and second quarter of 2008 in terms of what impact that might be?

We didn’t touch on that. We have outages in the first half of 2008 scheduled at four different locations. In the first quarter, we have an outage scheduled at Henderson. It’s an annual outage; expected duration to be seven days. We also have an outage at the Sunbelt plant in March, which is expected to be five days in length. Absent those two, there isn’t anything else scheduled of significance in the first quarter. In the second quarter, we do have a couple of annual outages scheduled, one at [Veccor] and one at Niagara Falls. But those are pretty typical annual outage obligations that we currently have scheduled for the first half of the year. That’s quite a bit different than what we saw in the fourth quarter, where we had outages at seven different facilities across the entire combined system. Frank Mitsch - BB&T Capital Markets: Any order of magnitude as to what those seven outages might have negatively impacted your earnings in the fourth quarter?

I don’t have that information, Frank. Frank Mitsch - BB&T Capital Markets: It’s bigger than a bread box, then?

We did say that our fourth quarter operating rate was 88%. Frank Mitsch - BB&T Capital Markets: John, obviously you ended the year with $74 million of net cash on the balance sheet, and I do realize that you are going to ramp up CapEx meaningfully in 2008. Although my guess is that 2008 CapEx is going to be higher than 2009 CapEx if you’re going to be done with the San Gabriel project early 2009. So you’re going to see that ramp back down. Any thoughts on what your target debt levels would be and what might you do with your cash?

Your first point is very good because we will be a user of cash in 2008, by virtue of both the level of capital spending and also some of the other uses of cash I mentioned in terms of settling out the metals transaction. I would look at the level of debt and say something in the 2 to 2.5 of debt to EBITDA is a comfortable level for us. And if we could maintain that through the cycle, I think we’d been in good shape. Frank Mitsch - BB&T Capital Markets: And then lastly, obviously 2007 was quite a transformational year for the company in terms of M&A. Any thoughts on possible M&A in 2008?

Frank, we’re going to keep looking for ways that we can continue to create value, as we said, and you’ve got to assume that we’re actively looking at what we can do next.

Our next question comes from Don Carson - Merrill Lynch.

A couple of questions for John McIntosh. John, what’s your view on Dow’s announcement this morning in terms of taking capacity out. Do you think that’s significant? Was it a surprise? And then Joe, I know you talked at some length about freight. How do see your freight synergies unfolding in 2008, and is that enough to offset what seems to be an inexorable rise in railcar rates?

Don, I really haven’t had time to look at Dow’s announcement in any detail, so I don’t really know that I have a comment on it yet at this point in time. In terms of your question about freight, when we look at our $35 million synergy objective for the transaction, a significant part of that commitment came from freight savings associated with consolidating and improving the logistics of the combined company. And so we think that that will go a long ways towards offsetting some of the freight increases that we expect to see in 2008. It’s hard to predict the magnitude of those freight increases. However, if they run consistent with what they have run in the last couple of years, even the synergy that we expect to receive would not be enough to offset all of it.

But I think it would be fair to say that from a budgeting perspective, we felt that we could offset the freight. The question that we don’t know, Don, is if the freight rates get out of bounds, beyond what we’re forecasting. That’s what John’s saying. That’s hard to predict at this point.

And a couple of price questions. We talked about getting most of the $75 realization by the second quarter. My understanding is only about $50 of that has gone through as of today. Do you expect to gain the balance of that going forward? And then secondly, Joe, you mentioned that your decline, the $525 ECU versus the $540 Q3, that that decline was due to something about your chlorine customers. Was that a specific customer or is there something unique about your chlorine mix?

On the first one, on caustic realization, our position is that during the quarter we will implement the full $75 price increase. Some producers have announced that they are going to do $50 of it January 1 and then 25 of it February 1. Where we fall out in terms of how that works in our system remains to be seen, but we are intending to implement the full $75 some time during the quarter. And it may not all come at once because of competitive situations created by others in the market. In terms of the chlorine change, as the operating rates have gone down because chlorine demand has gone down, we’ve seen, first, spot chlorine prices trending off, and that’s being followed by contract chlorine prices, which are trending down. As a result of that, across our portfolio we’ve seen some weakness in chlorine pricing. It’s not anything that’s specific to necessarily any given contract or given customer situation, but the worst or the most pressure is in the vinyl sector, which is driven by overall vinyl demand that everybody is aware of and has been reading and writing about.

Our next question is from Christopher Butler - Sidoti.

I’d like to ask you a question on the Winchester segment. You had made mention to concerns about demand being impacted by the price increases that have been going through the system. You didn’t mention whether you’ve seen any softness in demand as a result of that. Could you talk to that a little bit?

I can, Chris. What we’ve been concerned about over the past couple of quarters is, as the price of lead has gone up and as we have announced price increases, we were concerned. For example, a box of shells has almost doubled in what it cost you 2 years ago. We were concerned that the shooter might quit buying and start slowing down in his purchases of product. The good news is that we have not seen that yet. And the further good news that we are trying to point out is that right now, with lead sliding back a little bit in $1.10 range, we think that that alleviates or offsets some of those fears that we’ve been concerned about. So not to misinterpret, we are positive on what’s happening with lead at this point.

And looking at your overall guidance of at around $0.50, I noticed for the fourth quarter that Chlor Alkali volumes were down 2%. I was wondering what your assumptions were for volumes looking into the first quarter here.

Chris, for the first quarter, we are assuming that operating rates are going to be in the low to mid 80s, which is quite frankly where we have started out the first part of the year. So on a combined basis, volumes are not going to move much one way or the other, looking at the combined system now. But our overall operating rate, with the new capacity added, will be a little bit lower.

And the point we are making, Chris, is the upside to us is volume. And if vinyls were to pick up, which we all would hope and pray it would, there is upside to us.

The next question is from Sergey Vasnetsov - Lehman Brothers.

What kind of pressure do you see, if any, on the western side of the United States of caustic exports from China?

Sergey, what we have really seen is that caustic imports to China have not been a short term problem. And we have actually heard that in the short term, caustic coming out of China has been stopped because the Chinese economy is suffering from a shortage of coal and the resulting limitations on electricity production, and operating problems for their chlor alkali industry has really reduced the caustic available to ship. Plus the economics have changed for the Chinese chlor alkali producer, in that not only the elimination of the value added tax subsidy but an additional export tax that’s predicted to occur in 2008 have really made exporting caustic not as attractive a situation as it was historically, even as recently as a quarter or two ago. So we haven’t seen real issues from caustic into the West Coast, and have actually heard rumors that caustic pricing, on the West Coast, is following some of the pricing announcements that were made in the other part of the U.S. last month.

Could you please remind us on the combined platform with Pioneer, what’s the net percentage of your caustic being exported out of the U.S.; where are the end markets for you?

It’s a very small number, Sergey. Neither Pioneer nor Olin before the acquisition exported any continuing significant amount of caustic. So I would guess that number is in the low single digits in terms of caustic exports.

The next question is from Joe Herrick - Gutternam Research.

A couple of things regarding your operational improvement initiatives. Could you talk about what are you’re doing regarding lean manufacturing, taking it to Six Sigma , and how do you expect to see throughput throughout your plants to improve your stock price?

We have a lean manufacturing program that we implemented several years ago with the help of outside consultants, so it’s actually been initiated in our old metals business, and it has been applied both to our Chlor Alkali business and to our Winchester business, and it’s currently being used as we integrate the Pioneer acquisition. It embodies all of the Six Sigma and all the concepts with from a lean manufacturing perspective. And it’s reflected in our targets and how we improve our productivity and put together our annual cost reduction programs.

And a follow up to that question, what metrics are you using in your manufacturing facilities to figure out how well you are doing? Are you looking at O.E. and RONA? And also in the future, as we go into a very challenging environment, what systems and solutions are you going to be putting in place to accelerate your continuous improvement initiatives throughout your company?

We’ll continue to put what are best practices from an industry perspective, and we happen to believe that return on capital and return on invested capital are excellent measures of our returns.

We have an opportunity in that I think the Olin operating excellence program in our Chlor Alkali business was more maturer than the program that Pioneer had in theirs. So we really feel like we have got an opportunity to bring operating excellence and all those tools into the new plants in our organization and yield some significant improvements.

What can you tell a shareholder is your number one goal to help improve throughput throughout your organization, become a more efficient company and overall improve shareholder value?

Our number one goal is to make more money for the shareholders.

Our next question is from Richard O’Reilly - Standard & Poor’s. Richard O’Reilly - Standard & Poor’s: I just want to get a clarification on the pension expense guidance and the $19 million number that was given, but then something about $3 million reduction in the first quarter. I’m not sure, is $19 million what we see on the income statements on that segment? Can you just go through those numbers again?

We said that pension expense associated with our defined benefit plan would be $19 million lower in 2008 than it was in 2007. And we said that that would be partially offset by increased expenses associated with the defined contribution plan that we put in place to replace the defined benefit plan, because, as we said, we have frozen the plan effective January 1, 2008. So those two go together on an annual basis; the $3 million related purely to the first quarter of 2008. Richard O’Reilly - Standard & Poor’s: So you would see a greater reduction throughout the rest of the year than that $3 million?

I think you’re going to see something in the $3 to $4 million range each quarter. $19 less $6 is $13, so... Richard O’Reilly - Standard & Poor’s: Second, I am going to ask about any legal or regulatory issues that would be major if you wanted to sell the ammunition business. Is there anything out there that would be a significant impediment to you not being able to sell that business?

I think there’s a fairly substantive discussion of those issues in our Form 10-K, and I would encourage you to read that because that will cover what I think you would be concerned about in terms of material issues. Richard O’Reilly - Standard & Poor’s: And second, there was a lot of numbers on the ECU in the freights and I am just going to ask Larry to give me a call later and go through those numbers again.

That will be fine.

Our next question is from Herb Hardt - Monness, Crespi, Hardt & Co. Herb Hardt - Monness, Crespi, Hardt & Co: Did the recent moves by the Fed, if they were to stay at this level, would that change your pension assumptions at all?

It should not, no.

Our next question is from Justin Boisseau - Gates Capital Management.

I was wondering if you can give me an update on your expectations for supply additions and subtractions in the next a couple of years in the industry.

Obviously, the Shintech plant is currently in the final stages of construction or the early stages of start up, depending upon which dates you hear. We have heard recently that start up in production will not occur until possibly as late as the early part of the second quarter. As we’ve mentioned before, there are other announcements for new capacity that have been made, but to our knowledge none of those projects are currently being worked on actively, and with the timing requirement of approximately 2 years to bring a world scale Chlor Alkali plant online, we really don’t see new capacity, absent the Shintech facility, coming on within that 2 year window that you mentioned. I would also reiterate that the change being made in Oxy, with Oxy’s shutdown of its Muscle Shoals KOH plant and converting Taft will take caustic out of the North American market, which will tend to offset some of the additions being made by the new Shintech facility. In summary, we see a relatively balanced supply-demand situation going forward. No significant additions of world scale capacity, which we think bodes well for the Chlor Alkali industry.

Our last question is from Bob Goldberg - Scopus Asset Management.

A couple of questions. I was just curious, do you have data on how much of the combined Chlor Alkali business is exposed to the vinyls market? And I am also wondering what demand trends you are seeing outside of vinyls? Any change in demand ex-vinyls?

About 17% of Olin’s volume before the acquisition was tied to the vinyls segment. Pioneer really had 0% of their volume tied to vinyls. So the resulting combination of the two is obviously something less than where Olin started prior to the acquisition. The other market segments that we serve and we do serve the balance really of all the major market segments, none show the degree of pressure or weakness, however you want to characterize it, that we are seeing with vinyls. To some extent some of the other market segments, especially for chlorine derivatives, have been helped by the ability, in the last half of 2007, to export derivatives overseas, so that’s helped some of those market segments. And as we sit right now, taking into account the normal seasonality that we would see in the first quarter of any year, we don’t really see weakness in any market segment except for really the vinyls.

I apologize if I missed this, John, but did you say the operating rates in Chlor Alkali would be in the mid to high 80s? Is that what you’re seeing right now?

Low to mid 80s is our expectation for the quarter.

It just seems a little bit on the low side to me, because even if you assumed a 20% drop in PVC, if it was 15% of the business that would knock three points off of the operating rate.

Seasonally the first quarter is typically a slow quarter for us with seasonal business. So you have to take into account the seasonal impact as well.

So second quarter might get back into the high 80s, low 90s?

We would expect definite improvement in the second and third quarter, which are our highest operating rate quarters in any given year.

And not to put words in your mouth, but if the full caustic increase is put through by the second quarter, would it be fair to expect ECUs to be up, 1Q to 2Q?

We expect to see some slight improvement in ECUs from first quarter to second quarter, yes sir.

And on Winchester, just one question there. The business has done very well over the last couple of years, has improved earnings significantly, and you are seeing a little bit of reduction in raw material costs now going into 2008. You put through price increases. Should we expect to see some more earnings growth in 2008 or do you just hope to maintain the level that you attained last year?

We would expect to see a little bit of growth with it, is what we would expect to see. Obviously the side of the equation we’ve got to work on, that we have been working on, is the cost side as well.

As there are no further questions in the queue. I’ll turn the call back to management for closing remarks.

Thank you for joining us today and we will look forward to speaking with you in April, where we will announce the results of our first quarter 2008. Thank you very much.

Ladies and gentleman we thank you for your participation in today’s conference. This concludes the presentation and you may now disconnect. Have a good day.