Good day ladies and gentlemen and welcome to the Olin Corporation First Quarter 2009 Earnings Conference Call. My name is Michelle and I will be your coordinator for today. At this time all participants are in a listen-only mode. We will be facilitating a question-and-answer session towards the end of today's conference. (Operator Instructions). As a reminder this conference is being recorded for replay purposes. And now I would like to turn the presentation over to your host for today's call Mr. Joseph Rupp, Chairman, President and CEO. Please proceed.

Good morning and thank you for joining us today. With me this morning are John Fischer, Vice President, Chief Financial Officer. John McIntosh, Vice President and President of 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 first quarter of 2009 were $46.7 million or $0.60 per diluted share compared to $37.3 million or $0.50 per diluted share in the first quarter of 2008. During the first quarter of 2009, the Winchester business achieved the highest level of quarterly earnings in the history of the business. In the first quarter of 2009 we realized $5 million of pre-tax gains, associated with the sale of land and other asset disposals. Our first quarter results also included a $4.9 million increase in the allowance for doubtful accounts related to the deterioration in customer credit. Sales in the first quarter of 2009 were $400.6 million compared with $399.1 million in the first quarter of 2008. Chlor Alkali earned $68.7 million in the first quarter as the record ECU net back of approximately $765 offset historically weak volumes. Combined first quarter 2009 chlorine and caustic soda volumes declined 29% from the first quarter of 2008 levels. Our first quarter operating rate was 65% compared to 82% in the first quarter of 2008. In the first quarter of 2009 Winchester continued to experience the stronger than normal demand that began in the fourth quarter of 2008. The increased demand in combination with a year-over-year improvement in pricing resulted in record quarterly Winchester earnings of $17 million. Earnings in the second quarter of 2009 are projected to be in the $0.30 to $0.40 per diluted share range. This forecast reflects the combination of continued weak demand and lower ECU…

Thanks Joe. First I'd like to discuss a few items on the income statement. Selling and administrative costs increased $5.9 million in the first quarter of 2009 compared to the first quarter of 2008. The increase was primarily due to a $4.9 million increase in the provision for doubtful accounts receivable. During the quarter both the Chlor Alkali and Winchester to businesses encountered credit issues among their customer base. In Chlor Alkali these issues were most evident among pulp and paper customers, while in Winchester the issues were focused in smaller retailer accounts. Also during the quarter higher salary and benefit cost were offset by a lower level of management incentive costs which included a $1.2 million reduction due to mark-to-market adjustments on stock based compensation. As a reminder $1 change in the prize of Olin's common stock changes pre-tax stock based compensation by approximately $400,000. First quarter 2009 environmental, investigatory and remediation expenses were $4.8 million compared to the $5.1 million in the first quarter of 2008. These expenses relate primarily to remedial and investigatory activities associated with former waste sites and past operations. We continue to anticipate that full year 2009 charges for environmental investigatory and remedial activities will be similar to the full year 2008 level. On a total company basis defined benefit pension plan income was $3.9 million during the first quarter of 2009, compared to $3 million of defined benefit pension plan income in the first quarter of 2008. We are not required to make any cash contributions to our domestic define benefit plan in 2009, and also believe it is unlikely we will be required to make any cash contributions in 2010. During the first quarter of 2009, $1 million cash contribution was made to our Canadian defined benefit pension plan. Defined contribution pension…

(Operator Instructions) Your first question comes from the line of Frank Mitsch of BB&T Capital Markets. Please proceed. Frank Mitsch - BB&T Capital Markets: Hey good morning guys.

Good morning. Frank Mitsch - BB&T Capital Markets: Joe, back on March 17th, you put out some guidance for the first quarter of a range of $0.60 to $0.65, which included $0.03 unusual in terms of land sale. So that would make in on an operational basis, 57 to 62 and you posed $0.56 on an operational basis. What accounts for the decline versus that mid March update?

We can give it to you here, Frank.

Frank, this is John. There's three things that happened right at the end of the quarter. First we had an, a second asset disposal that was $1.3 million that happened right at the end of quarter, that we didn't think was going to be in the quarter. Second, we experienced significantly weaker box sales of caustic during the last 10 days of the quarter, and that reduced earnings between 3 and 3.5 million. And finally one of the bad debts that we discussed actually occurred after the quarter ended and we were forced to bring the effective debt back into the third quarter, and that was about $1 million. So if you net those three things, that's somewhere in the neighborhood of $3 million of pre-tax. That's really the difference. Frank Mitsch - BB&T Capital Markets: I don't recall your bad debts being this high. Am I mistaken -- is this an unusual high level of bad debt expense?

It is unusual. Frank Mitsch - BB&T Capital Markets: And any thoughts on whether or not given the economy that we should anticipate this order of magnitude for a 2Q and beyond?

I have no reason to believe we'll see this level of magnitude in Q2. I think it would be safe to say that in this economy we're going to see more of bad debts going forward than we've seen in the last couple of years where essentially we haven't had any. Frank Mitsch - BB&T Capital Markets: Okay, all right fair enough. Mr. McIntosh can you talk a little bit about the input situation to the West Coast coming up from Asia in terms of where's pricing in Asia and talk about a little bit about the shipping costs and I know that there was a discussion about some of the factors that you did not anticipate, the level of imports to remain at high levels; can you add some granularity to that?

Yes, I can. If you go back to the last half of last year when caustic demand really, and pulp and paper and aluminum took some very precipitous declines the end of the year the Asian producers really found themselves with a surplus of caustic soda. No demand for the export markets that they normally would serve. At the same time in the North American continent we had historic high prices for caustic. And the combination of those two created -- what for lack of a better term I'll call an arbitrage opportunity for bringing caustic into the U.S., not only the West Coast but to the Gulf Coast and East Coast as well. FOB Asia of caustic prices which were in the $500 range at the beginning of the year, dropped by the end of the first quarter to $200. And when you take that kind of a number and then you add $170 freight to it, to get it to the Gulf Coast and then you add $50 cost to get it through a shore tank, then you've got an FOB Gulf Coast caustic price in the $450 -- 420 to $450 range. And that's what led to the increase in imported caustic material coming into the U.S. in the first quarter. Now, a couple of things have happened subsequent to that. Number one, the FOB caustic price in China has stopped dropping and in fact in April there are reports that it’s gone up some 30 to $50. And so, that's created -- that ripples through and creates a little higher landed price for caustic in North America. The other thing that's happened is the North American producers have met competitive situations to take back market shares that they lost to imported caustic. Realistically, you have to understand that the total import caustic numbers if you look historically from China into North America are in the 800 to 900,000 tons a year, which represents a minority of the 13 to 14 million tones market in North America for caustic. So, although north although imported caustic into the US isn't the primary driver from a supply stand point, right now it is the primary driver from a price decline standard point. But as we see results from April we see some of that leveling out and stabilizing, at least in the short term. Frank Mitsch - BB&T Capital Markets: John is fair to say that given the very high freight costs that are involved to ship the material over from Asia -- and by the way, just for clarification purposes I know there is some confusion out in the marketplace but caustic soda is typically shipped as a liquid and not a solid, is that correct?

Correct. Frank Mitsch - BB&T Capital Markets: Yes, thank you. Given the very high freight and steeper door (ph) cost etcetera, you are basically looking at a floor in the four plus $100 range such that the decline from the hurricane spike that we saw in the in fourth quarter and that carried through in the first quarter, the declines that you are talking about are starting to level out. Is that not fair to say?

From our perspective, we believe that's a fair statement based on what we're seeing in the market and what we're seeing reported for pricing, not only FOB Asia but also pricing in North America. Frank Mitsch - BB&T Capital Markets: So, it’s really more of a volume issue in terms of the economic activity?

For us it is a volume issue. Frank Mitsch - BB&T Capital Markets: Thank you, guys.

Thank you.

Your next question comes from the line of Don Carson of UBS. Please proceed.

Yes, thank you. John Macintosh, I just wanted to add -- ask you more Chlor Alkali questions. First off, if you could may be outline the difference between your realizations in the market, how much is your contract lag going to help you this quarter. For example, you talked about your expectation that this quarter's realizations will be above last year's Q2 590. And what impact does bleach play on your realizations in Q2 and Q3? Do you still expect bleach to be 100 and $120 ECU premium?

Let me do the last question first Don. We continue see bleach at the high-end of that premium range for from comparative to an ECU and we've said historically that range can be anywhere from a 100 to $175. So what we've seen so far would put us at the high-end of that range. Both in our year-to-date performance of what we're seeing in this quarter. In terms of your first question was...

Contract lags.

Oh, contract lags. Let me just give you an example of how that would work. This is an ideal world example; our caustic pricing are for contracts that are indexed in the second quarter of 2009, would be impacted by a comparison of what the fourth quarter of 2008 pricing was relative to the first quarter of 2009 index is. Comparing those indexes for those two periods and then applying the change to a customer's price at the end of the first quarter to give a 2Q price. So, in an ideal world if the fourth quarter index averaged a $1000 a ton, first quarter index averaged $800 a ton, then customer contracts driven by those indexes in the second quarter would see a 20% reduction. And that, because we're comparing quarters that are lagging; that's what drives the fact, that our prices lag going up, because the same mechanism works on the way up as it does on the way down. So, we continue to expect to see that continue. Now, in the real world the thing you overlay onto that is the fact is that there are competitive situations that you are forced to meet, because volume is an important consideration for us. But in balance when you put everything together we still see our prices lag going down and that's because of the contract mechanisms.

And John, two follow ups. One, what percentage of your shipments in Q2 and Q3 are bleached, and then you thought that the floor be around this 420 range. I assume that's a contract floor because we do see some reports of even domestic spot business at prices slightly below that.

Well those numbers I reported were really a combination of some spot prices that were reported and then some contract -- some competitive situations where contracts are being forced to lower levels. So it depends upon the situation. But in terms of bleach we've said that bleach represents about 10% of the ECUs we produce. There is a seasonal component to that obviously, so 2Q and 3Q bleach volumes are higher than the other two quarters of the year. So, it’s not a 10% number across evenly split amongst the four quarters and there will be some seasonal strength that we expect to see in the next two quarters.

And just one question on volume, I heard reported that you've put border control on chlorine, is that just to manage your caustic inventories. And then secondly, once again we've seen proposals to perhaps force a closure of mercury cell plants. I assume that could actually -- the first Senator proposed that, and I know he's now President but if the current bill is more successful, could that help from a capacity standpoint, if the mercury plants have to be closed?

Don, let me answer the first question and I'll let Joe answer the second one. We did enact order control for chlorine for our customers system wide early in the month of April. Driven by the dynamics of the situation that changed in our remarks, we commented that caustic demand is now what's driving industry operating rights and that's the first time that's been in place for several-several quarters. And that reversal or flip flop between demand for the various parts of the ECU that are driving operating rates has created the situation where we're significantly behind in chlorine shipments to our customers and in order to protect our entire customer base we established order control for that part of our customer portfolio.

Don, on the mercury question as you correctly pointed out similar legislation was introduced, actually Barack Obama introduced legislation a couple of years ago. So as in the past we're monitoring it and we're going to evaluate it carefully and one of the part of the evaluation is, does it make sense to convert to another technology or not and one option obviously is no conversion at all. So, we will evaluate all options.

Thank you.

Thank you.

Your next question comes from the line of Christopher Butler of Sidoti & Company. Please proceed. Christopher Butler - Sidoti & Company LLC: Hi, good morning guys.

Good morning. Christopher Butler - Sidoti & Company LLC: I was hoping you might be able to speak to what your utilization rates as they progressed through the quarter. I understand that you're at 65% which is a little less than the fourth quarter, but could you give us a map of how things progressed?

If you are talking about the first quarter, Chris, we were an average of 65% for the quarter. But that really span numbers as low as the low 50s, in March and as high as the upper 70s in February and as our comments said the order pattern for chlorine over the quarter was in fact very erratic.

We stand at being in the low 70s.

And we had significant outages which helped drive March's number, low and as we saw it in March in the low 50s. In the second quarter, we said in our remarks that we expect to be in operating rates in the low 70s. Christopher Butler - Sidoti & Company LLC: And talking to the weak caustic demand, could you give us a little bit more color on exactly what's going there? Is this something that we can expect continues through the remainder of the recession or is this more temporary, what are you seeing there?

Well I would tell you that from a visibility stand point we just have visibility to see when demand is going to return and we'll tell you -- I'll give you some first quarter facts to help you with the demand in the two key market segments that are really driving caustic consumption, low in pulp and paper -- global operating rates for pulp and paper in March were 88 % and that's better than North America which was only 77%. In alumina, global aluminum consumption in the first quarter was down 20%, year-over-year. So at least looking backwards in the very short term both those industries which are key caustic soda consumption mark -- end-markets are weak and there is many things that leads us to believe in the short term that there's going be a very dramatic turnaround. How far we go before we start to see strength in those markets is be unknown that creates both lack of visibility, we have. Christopher Butler - Sidoti & Company LLC: And if we're looking at the netback side of the ECU netback equation, should we be giving a bit of a benefit year-over-year with energy prices being down?

The energy prices will be down and we've seen that in our comments about lower electricity prices. In terms of netback sort of remarks that we expected netbacks in the second quarter to be better than they were in 2Q in '08. And that's driven I think more by the fact that our contract prices or contracts lag and prices going down, that lag will be prevalent as we look into the second quarter. Christopher Butler - Sidoti & Company LLC: I appreciate your time.

Thank you.

Your next question comes from the line of Edward Yang of Oppenheimer, please proceed. Edward Yang - Oppenheimer & Co.: Hi, good morning.

Good morning. Edward Yang - Oppenheimer & Co.: Are you expecting any alleviation on freight cost, certainly up 10% is better than up 30% which have been more the recent trend but with volumes down, do you think that freight costs will come down?

I guess, I would hope the trend that we saw in the last year was one that could be repeated. But in all honesty, rail roads (ph) are under similar financial pressures because the overall economic conditions, reduced their revenue and reduced the volume of material they're moving and they continue to try to put pressure on the industry -- on our industry, on the chemical industry to raise rates to cover the, risk profile that they say is inherent upon the chemicals that they move for us. So, although I would hope that we're not going to see 30%, kinds of annual increases in the future I don't expect our freight cost to go down any time soon.

The rate at which they will rise will be lower. We hope. Edward Yang - Oppenheimer & Co.: Okay. Thank you, and back to the bad debt expense. How was that distributed in the income statement and was it one or two particular customers within pulp and paper or was it much more broad based?

In the income statement its shows up in the SG&A line. If you look at the segments it is included in the business segment operating income of the segment where it has a bad debt, the pulp and paper was actually two customers that were substantial. And that was really pre-clerical (ph) like where it was. Edward Yang - Oppenheimer & Co.: And John do you expect additional. I mean it sounds like or how does two customers compare to your overall pulp and paper customer base. Do you have 30 customers or just size that relatively please?

I don't know the exact number. I mean we have a significant number of pulp and paper customers. And even larger number of total mills that we serve -- serving multiple locations within one customer entity. So, its not a -- obviously it's not a large percentage of our portfolio of pulp and paper customers. Edward Yang - Oppenheimer & Co.: Okay. And final question on the clarification on free cash flow. The declining cash -- your cash balance decline around 78 million or so and most of that as you know that was in the working capital side. I understand what's going on with the inventory situation with caustic. What's going on the payable side? Was that just all related to metals or is -- there is something else going on there as well?

The majority of it is the metals, thing that I discussed. Edward Yang - Oppenheimer & Co.: Okay thank you.

Thank you

Your next question comes from the line of Thomas Hue of FR (ph), please proceed.

Good morning guys.

Morning.

Just wanted to know a little more detailed about the regional supplies in north (ph) that you see a specially when the St. Gabriel facility is coming back up? What kind of impact do you expect that's going to insert on your target market going forward?

The question is what kind of impact will the start up of St. Gabriel have on our target market?

Yes.

As we mentioned in the comments is that we are not expecting that facility to come up until June and when it comes up based upon market conditions we'll optimize running our multiple plants to where we get the best margins, meaning that some if necessary other operations would be curtailed if that's required.

And then would you say that going forward that the entire industry will be or even more rational in terms of a pricing?

I don't know what's going to happen with the industry from a pricing perspective, to be honest about it at this point.

But I think its fair to say that the industry in the first quarter has demonstrated that they're willing to take capacity offline based on reduced overall demand. And most recently there's been an announcement that a producer is going to idle a plant a Chlor Alkali facility in Geismar, Louisiana and for at least the majority of the month of May. So, the producers are continuing to react to the North American supply-demand dynamics and I think we'll continue to continue to see that.

Okay, thank you.

That concludes the question-and-answer session. I'll now turn it back to Mr. Rupp for closing remarks.

Thank you for joining us today and we look forward to speaking with you in July when we will announce the results of our second quarter. Thank you.

Ladies and gentlemen, thank you for your participation in today's conference, this concludes the presentation, you may now disconnect. Have a great day.