Good morning, ladies and gentlemen, and welcome to the Third Quarter Cabot Earnings Conference Call. At this this time all participants are in a listen only mode. Later we will conduct a question and answer session, and instructions will follow at that time. If anyone should require assistance during the conference, please press star then zero on your touchtone telephone. Also reminder, this conference call is being recorded. I would now like to turn the conference over to your host, Mr. Steve Delahunt, Vice President, Treasurer and Investor Relations. Please go ahead. Thank you, Jerome, and good morning. I'd like to welcome you to the Cabot Corporation Earnings Teleconference. With me today are Sean Keohane, CEO and President, and Erica McLaughlin, Senior Vice President and CFO. Last night, we released results for our third quarter of fiscal year 2021, copies of which are posted in the investor relations section of our website. The slide deck that accompanies this call is also available in the investor relations portion of our website and will be available in conjunction with the replay of the call. During this conference call, we will make forward-looking statements about our expected future operational and financial performance. Each forward-looking statement is subject to risks and uncertainties that would cause actual results to differ materially from those projected in such statements. Additional information regarding these factors appears under the heading Forward-Looking Statements in the press release we issued last night and in our annual report on Form 10-K for the fiscal year ended September 30, 2020, and in subsequent filings we make with the SEC, all of which are also available on the company's website. In order to provide greater transparency regarding our operating performance, we refer to certain non-GAAP financial measures that involve adjustments to GAAP results. Any non-GAAP financial measures presented should not be considered to be an alternative to financial measures required by GAAP. Any non-GAAP financial measures referenced on this call are reconciled to the most directly comparable GAAP financial measure in a table at the end of our earnings release issued last night and available in the investor relations section of our website. I will now turn the call over to Sean Keohane, who will discuss the key highlights of the company's performance. Erica McLaughlin will review the business segment and corporate financial details. Following this, Sean will provide closing comments and open the floor to questions. Sean? Thank you, Steve, and good morning, ladies and gentlemen, and welcome to our Third Quarter 2021 Earnings Conference Call. I'm very pleased with our results this quarter as we generated adjusted earnings per share of $1.35. This marks the second strongest quarterly earnings performance in the company's history. Demand across all businesses was strong, and we continued to leverage our global network of plants to serve our customers while managing the persistent challenges related to the COVID-19 pandemic and disruptions in international transportation and logistics markets. I am very proud of the entire Cabot team for demonstrating great operating discipline across all aspects of our business and for their resilience in this very dynamic environment. Our culture of teamwork and our commitment to commercial and operational excellence serves as the foundation for our strong performance, w hile raw material markets remained somewhat volatile during the quarter, we were successful in implementing price increases to maintain robust margins. I am also very excited about our continued progress across our portfolio of targeted growth initiatives, particularly in the battery application. I believe the battery market presents one of the most compelling new growth opportunities for the materials sector, and our strategic investments over the last several years have positioned Cabot very well to capitalize on this unique opportunity. Our Energy Materials business continued to build strong momentum in the quarter as we achieved qualification milestones and began commercial sales to an additional two of the global electric vehicle battery leaders. The top eight EV battery producers represent approximately 90% of the industry, and we now have commercial sales to six of these top eight manufacturers. In addition, we are supplying conductive carbon additives to the top five EV battery producers in China. The Cabot value proposition to the battery market is based on three factors. First, the breadth of our product line of conductive carbon additives, including conductive carbon blacks, carbon nanotubes, carbon nanostructures, and blends of conductive carbon additives. Second, the depth of our application knowledge and our global research and development centers allow us to tailor products for our customers and respond quickly in this fast-changing environment. Finally, our global footprint of manufacturing plants and our sales and technical service support. As battery producers expand their manufacturing footprint outside of Asia to support auto OEMs with robust regional supply chains, we see the value of our global footprint becoming even more important for our customers. We believe these capabilities represent a compelling differentiator for Cabot and position our company as a key supplier and innovator to the leading battery manufacturers. Transitioning now to cash, operating cash flow in the quarter was $71 million and $157 million year to date. While EBITDA generation has been very strong, conversion to operating cash has been impacted somewhat by higher oil prices, which contributed to over $100 million of the net working capital increase year to date. While oil price volatility can create short-term fluctuations in working capital balances, history has shown that over the long term, oil-driven working capital fluctuations tend to balance out. Given the size and strength of our balance sheet, we can easily absorb these changes in working capital without impacting our long-term capital allocation priorities. As oil prices stabilize, we expect to see a greater level of conversion of our strong EBITDA to operating cash flow. The strength of the balance sheet and our cash flow is reflected in our investment-grade credit rating. This has long been a priority for us, and we remain committed to this posture. We recently closed on a new $1 billion ESG-linked credit facility, which replaces our existing credit facility that was due to mature in October of 2022. The facility includes two ESG metrics centered around our annual sulfur dioxide and nitrogen oxides emission reduction goals. This agreement represents one of the first ESG-linked credit facilities in the chemical industry and further reinforces our commitment to sustainability. The facility matures in August of 2026, with key terms largely the same as our prior facility. In addition, during the quarter, we released our 2020 sustainability report, which provides enhanced transparency on our environmental, social, and governance priorities. ESG leadership is central to our strategy. The interactive digital report summarizes our progress and accomplishments. Overall, we had a very strong quarter in terms of financial performance and progress against strategic objectives. I will now turn the call over to Erica to discuss the financial results of the quarter in more detail. Erica? Thanks, Sean. I will start with discussing results in the Reinforcement Materials segment. The Reinforcement Materials segment delivered strong operating results with EBIT of $85 million, which is up $90 million compared to the same quarter in fiscal 2020. The increase is primarily due to significantly higher volumes across all regions and improved unit margins driven by favorable pricing in the Asia region. Globally, volumes were up 71% in the third quarter as compared to the same period of the prior year, due to 146% growth in the Americas, 100% increase in Europe, and up 30% in Asia. Higher volumes were driven by key end market demand that continued to recover from COVID-19-related impacts in fiscal 2020. Looking to the fourth quarter, we expect the volumes to remain strong. Fixed costs are expected to be sequentially higher due to the timing of planned plant maintenance. Given the very strong demand in the last few quarters and limited inventory in most supply chains, our focus has been on supporting our customers' product needs. As a result, we have scheduled a higher than normal amount of maintenance in the upcoming quarter. Another factor that will affect our fourth quarter is the impact of an outage at a plant in the U.S. due to an equipment failure on our recently installed air pollution control system. Cabot completed this project on schedule according to the consent decree. However, controlling this level of SOx and NOx emissions is new for the carbon black industry in the U.S. With the startup of any new technology, there can be unexpected issues, and this is the situation we currently face. We anticipate this site will be down for about one month to repair the equipment. In addition, we expect margins to moderate from the third fiscal quarter due to higher feedstock differentials. We anticipate this differential's impact will be approximately $5 million in the fourth quarter, and we expect to recover this impact in the first quarter of fiscal 2022 through our DCA mechanism. Turning to Performance Chemicals. EBIT increased by $33 million as compared to the third fiscal quarter of 2020, primarily due to strong volumes across the segment and improved product mix. The stronger product mix was driven by an increase in sales into automotive applications in our specialty carbons and specialty compounds product lines. Year-over-year volumes increased by 17% in performance additives and 20% in formulated solutions, driven by higher volumes across all our product lines, underpinned by higher demand levels in our key end markets. Looking ahead to the fourth quarter of fiscal 2021, we expect overall volumes to remain strong, with some impact from lower seasonal demand. We anticipate higher costs from planned turnarounds and an unfavorable impact from plant outages. The first outage is what I just mentioned at a plant in the U.S. This plant supplies both the Reinforcement Materials segment and the Performance Chemicals segment. Another plant outage is related to a specialty compounds plant in Belgium. This plant was severely impacted by the heavy rains and floods in the region in July, resulting in this plant remaining offline for the balance of the fourth quarter. With higher maintenance impacting both the Reinforcement Materials and Performance Chemicals segments, we estimate the sequential impact of higher maintenance costs for the company to be in the $8 million-$10 million range. We expect this elevated level to return to a more normal level in Q1 of fiscal 2022. With regard to the plant outages, this impact is also across both the Reinforcement Materials and Performance Chemicals segments, and we expect the impact across the company to be in the range of $7 million-$10 million in the fourth quarter. We expect to recover insurance proceeds that will help to offset the financial impact from these outages, but we do not anticipate any proceeds to benefit operating results until fiscal 2022. Moving to Purification Solutions. EBIT in the third quarter of 2021 increased by $4 million compared to the third quarter of fiscal 2020, driven by volume growth in specialty applications and an insurance reimbursement from a plant outage in the first quarter of this fiscal year. Looking ahead to the fourth quarter of fiscal 2021, we expect EBIT to decline due to lower volumes in our mercury removal applications, and we will not have insurance proceeds in the fourth quarter. I will now turn to corporate items. We ended the quarter with a cash balance of $173 million, and our liquidity position remains strong at $1.3 billion. During the third quarter of fiscal 2021, cash flows from operating activities were $71 million, which included a working capital increase of $47 million. The working capital increase was largely driven by the impact of higher raw material costs that caused higher inventory balances, and as we passed these higher costs on in our pricing, which drove accounts receivable higher as well. Capital expenditures for the third quarter of fiscal 2021 were $46 million. For the full year, we expect capital expenditures to be approximately $20 million. This estimate includes continued EPA-related compliance spend and the capital related to upgrading our new China carbon black plant to produce specialty products. We anticipate the new plant in China will be online in the second half of fiscal 2022. Additional uses of cash during the quarter included $20 million for dividends. Our year-to-date operating tax rate was 28%, and we forecast our operating tax rate will be between 27% and 28% for this fiscal year. I will now turn the call back over to Sean. Thanks, Erica. I'm very pleased with our third consecutive quarter of strong operating results. We are raising our expected full-year outlook of adjusted earnings per share to be in the range of $4.85-$5.05. This is truly exceptional performance for our company and reflects our strong commercial and operational execution and the value of the strategic choices we have made in recent years. Our Advancing the Core strategy is focused on strengthening our industry-leading positions through great execution and by making smart, targeted growth investments. We've invested aggressively in our operating platform to build excellence in our commercial and manufacturing operations. On the commercial front, our focus has been on strengthening our capabilities in the disciplines of key account management, data analytics, strategic pricing, and voice of the customer. All of these have been underpinned by a world-class CRM platform. On the manufacturing front, our focus has been on overall equipment effectiveness or OEE, energy recovery, process and yield optimization, and capital efficiency. Through these actions, we have demonstrated the earnings power of our two high-margin segments in Reinforcement Materials and Performance Chemicals, and we have enabled this growth in a more capital-efficient manner. On the growth front, we have a philosophy of building from positions of strength and investing in market spaces where we believe we have a right to win. This led us to invest for breakout growth in conductive carbon additives for batteries and to complete the Sanshun acquisition, and we are growing in the battery space as we expected. In addition, our capacity investments in Asia over the years have positioned us as a leader in the region across carbon black, fumed silica, and specialty compounds. These investments are enabling us to drive strong earnings and returns in this high-growth area of the world. Through these foundational capability investments and smart growth choices, we have structurally increased the profitability of the company and have moved EBITDA base to a new level. As I look forward, the underlying performance of our business is very strong, and customer demand remains robust. Our growth investments are well-positioned to take advantage of macro trends in the area of mobility, alternative energy generation and storage, connectivity, and infrastructure reinvestment. I feel very good about how Cabot is positioned for fiscal 2022 and the coming years. In closing, I want to thank and recognize our global Cabot team. The strength of our culture and the resilience of our employees has never been more apparent than it has been during these challenging times. Thank you very much for joining us today. I will now turn the call back over for our Q&A session. Ladies and gentleman if you have a question at this time, please press the star and the number one key on your touchtone telephone if you're question has been answered or you please to remove yourself from the queue, please press pound key. Your first question comes from David Begleiter with Deutsche Bank. Your line's open. Thank you. Good morning. Sean, Erica, thank you. Good morning. Looking at the Q4 guidance, it's a bit wide, about $0.20 a share. Can you discuss why it is so wide given we're almost halfway through the quarter? Yeah, sure, David. I think, as Erica outlined, the three main drivers there, the higher-than-normal maintenance spending as we were really focused on supporting customers and the rapid increase in demand earlier in the year. That's one. The second is the outages, the third is the differentials which we'll recover in the DCAs in the first quarter. I think the primary reason for a slightly wider range than would be normal at this stage is really related to the outages of both the specialty compounds plant in Belgium and the carbon black plant in the U.S. We've estimated that, but given the dynamic nature of the situation, that's really the reason why the range is slightly wider than what we might normally do. Understood. I know it's early to look at 2022, but when you think about Reinforcement Materials for next year, is this level of earnings, do you think, sustainable at around this high level? Yeah, I think it is early as we talk about 2022, but I think the business has really done a great job over the last several years here improving the structural profitability of the business. You can look at this business today and see that volumes are in and around the 2019 levels. If you look at where tire production is, for example, yet the profitability is substantially up in this business. I think the efforts focused on commercial excellence and strategic pricing and market management has been one. Our continued focus around yield, energy recovery, and overall equipment effectiveness has certainly been the second. The third is the Asia Pac market, and in particular China represents somewhere in the order of 35%-40% of the world's tires and 40% of the world's carbon black. Our position there and our ability to manage in that dynamic market, I think, has been proven out over a long period of time. We feel really good about the level of performance in this business. As we look forward into 2022 for the company, I think there are a few things that are on our mind. First, demand in some of these key end markets like tires and autos still remain below pre-COVID-19 levels. The tire side is still a few% below if you look at LMC's forecast. On the auto build side IHS's outlook is still a little below. I think there's growth runway there, number 1. Number 2, as we look at the tire contract season, we certainly see demand is strong, inventories are low, supply side investments in the West have not happened. Our view on that hasn't changed. It should lead to a favorable environment as we move forward. Third, our growth investments, like in batteries and a number of our other targeted areas are really beginning to perform quite well here, and we think there's good momentum. We feel good about the drivers for next year, and I would say those are the key ones, David, that are on our mind. Thank you. Your next question comes from Mike Leithead with Barclays. Your line's open. Great. Thanks. Good morning, guys. Hey, Mike. First question, I did want to just circle back on the 4Q guidance. It seems like sequentially you're guiding to, I don't know, $20 million-$30 million lower EBIT sequentially, and Erica did a good job trying to help size some of those buckets. I was hoping you could just repeat in aggregate how much you're attributing to outages and downtime versus feedstock differentials and other factors. I just want to make sure I got that walk correct. As we think to fiscal 2022, I appreciate you're not giving guidance yet, but it sounded like most of that gets resolved in fiscal 4Q and won't carry into 2022. Is that a correct interpretation? Yeah. Thanks, Mike. Erica tried to walk through to provide clarity there as there are some unusual elements in our Q4 numbers. Let me just repeat. The first bucket is an elevated level of maintenance activity, that's estimated in the range of $8 million-$10 million impact on the quarter. That's really driven by the fact that with a very sharp recovery in demand this year and very little inventory in most supply chains, our efforts have really been focused on supporting customers. Customers have needed product. That just meant we scheduled a higher level of maintenance in this quarter than what would normally occur. The maintenance is in that 8-10 range. The second is related to the two outages that Erica referenced in Belgium and the U.S., and the impact there is estimated in the range of $7 million-$10 million on the quarter. The plant in Louisiana we would expect to be out for one month. Let's call that back running in September. In Belgium, the impact at this point is through the balance of the fourth quarter. Our view at this stage is that those would not repeat beyond the fourth quarter. Finally, differentials. That's estimated to be around $5 million. As I think you know well, we've worked hard over the last few years to put in place mechanisms for recovery on those, what we call DCAs or delivered cost adjustments. Which are meant to recover when we have sort of temporary dislocations in feedstock pricing from the core underlying index. I think with a certain amount of volatility across the refining complex around the world you're seeing some of those occur. We'll expect to get recovery on those DCAs in the next quarter. You have them right I think, Mike, and that hopefully clarifies it for you and our view on these as we look beyond Q4. Great. That's super helpful. Maybe secondly, Cabot obviously has quite a large China presence, especially relative to some of our other U.S. companies. There's been probably some added consternation from investors of late around China auto numbers, some mixed economic data points. Just kind of curious if you could give us your view on the ground, what you're seeing today and expectations moving forward in China. Well, China is an important market for us, one that we have demonstrated for a long period of time here an ability to manage and be strongly profitable and generate strong returns in that business. We know how to operate there. Our view on China right now is that volumes are expected to be solid here. I don't see any fundamental change there. Underlying demand is strong and expected to continue as GDP grows and as the China car park continues to expand. Again, at the end of the day, in our biggest end markets, if we take Reinforcement Materials, for example, they make almost 40% of the world's tires. I think from a structural standpoint, the world is structurally dependent on Chinese tires, even if tariffs sometimes shift around the global flows a bit from time to time. I think our long view on China is unchanged here. In the short term, there is certainly some challenge in global logistics markets right now. Chinese exporters of tires are challenged to find container availability. It's pretty scarce, and pricing has gone up on international container shipments. This may result in some on-the-margin shifting of tire production back to importing regions. We may see a little bit of movement here between Chinese exporters and volumes that might be picked up in the importing region. As you know well, we've got a strong global footprint everywhere in the world. If that happens, we'd expect to pick it up on the other side. I think there are limits to what can happen there, though, because, again, the world's structurally dependent here. Our view on China remains bullish over the long term here, and if there are any short-term dislocations, I think we've proven an ability to manage those over a long time. Great. Thank you. Your next question comes from Josh Spector with UBS. Your line's open. Yeah. Hi. Thanks for taking my question. Just a question on the volume side of things. As you look at the September quarter and then the December quarter, just wondering how you think about seasonal volume movements and how much of you're talking about your fourth quarter is impacted by your own supply issues versus demand. Any kind of early read on how you're thinking about December, I think, would be helpful, if you can provide context. Yeah. We are, Josh, expecting volumes to remain strong here. We continue to see that inventories are low across pretty much every value chain. If economic activity remains robust, and of course, there are questions here around surges in COVID-19, but let me sort of put that aside for a minute. If you look at underlying economic growth and low inventories across the chains, we would expect demand to remain robust here. Now, in our fourth quarter, we do normally see a little bit of a seasonality, and so we're expecting that same level in the coming quarter. Again, we'd expect nothing really out of the normal here as we transition. As we go forward here and you think about turning the bend on 2021 and into 2022, we really look at it in terms of our key end markets. The tire market is still about 3% below 2019 levels. I think there's more recovery runway there. We've definitely seen very strong recovery in the truck and bus market because I think there's been such strength in industrial markets. Naturally, the truck tire market is very strong. What is still lagging a bit 2019 is the passenger car market because the mobility and miles driven are not yet back, though they have rebounded pretty sharply here. We see runway as we move into 2022 in terms of further room just simply to recover back to the pre-COVID levels. Hopefully that gives you a little bit of perspective. Normal seasonality in Q4 and still runway just to simply get back to the pre-COVID levels into 2022. Thanks. No, I appreciate that. I guess what I was trying to dig into a little bit is just if some of the supply issues in September quarter mean that perhaps there's less seasonality for Cabot specifically into the December quarter. Do you have any thoughts around that? I wouldn't say that while we have a higher level of maintenance turnarounds here, we'd expect to be filling most of that demand from inventory. We would typically build inventory ahead of maintenance turnaround. No, I don't see anything that you're describing there or any sort of shift of that sort. Okay. No, that's helpful. If I could just ask on the margin side quickly within Reinforcement Materials, was there anything abnormal within this most recent quarter? You've had some benefits from the China price cost dynamics. Was there any benefit embedded there in June Q? Or is that a relatively normal quarter for us to think about bridging into next year off of? I would say things developed pretty much as we outlined last quarter, with the exception that we thought that the cost flow-through in China, you remember we were in a rising feedstock environment pricing ahead of the flow-through in our P&L, and we expected that impact to hit us in Q3. The impact was a little more muted than we originally thought because feedstock prices, coal tar prices continued to surge up across the quarter in Q3. The impact was a little bit less than we would've thought. I think when you look at all the different puts and takes, I would say it was fairly normal. I think Erica wanted to comment, Josh, on your earlier question as well. Maybe you can provide a little more color. Josh, I just wanted to add, I think as you're trying to think about Q4 to Q1, as Sean said, the outages that we have in Q4, so the one in the U.S., that plant is expected to be back online within the quarter. There would be an impact in Q4, but not Q1. The Belgium plant we expect to be offline for the balance of the quarter. I'd say it's still unknown in Q1 when that would come back online or if it comes back online. That is one as you think Q4 to Q1 may continue. I'd say it's too early for us to know exactly when. Just a reminder, that's a specialty compounds plant, so a smaller plant as you think about impact, but could continue into the first quarter. Okay, got it. Thank you both. All right, your next question comes from Jeff Zekauskas with J.P. Morgan. Your line's open. Thanks very much. Your working capital is negative $226 through the nine months. What should it be for the year? How much should it improve in the fourth quarter? Yeah. Jeff, very oil dependent and as we commented on the year to date basis, just the strict oil impact is 100-ish, a little over $100 million. With oil prices moderating here, certainly had a pullback in the last week, but let's call it moderating, then we certainly would expect that much more of the strong EBITDA would be flowing through there. I think it's really just strictly a function of what happens with oil. Okay. Normally you have different turnarounds in the fourth quarter. Is the difference this year that you have an unusual amount of outage costs? What's unusual about the fourth quarter is there's whatever it is, $8 million-$10 million of outage, or $7 million-$10 million of outage costs relative to last year. Everything else is more or less the same as a fourth quarter? You're right in your memory that normally in the fourth quarter it's a little bit higher seasonal maintenance. You're right about that. What we're saying is above that norm. There is $8 million-$10 million higher. That is just simply because the demand recovery has been so strong this year, inventory so thin that the customers have just needed product. That has led us to schedule a higher level of maintenance than we would normally have in this quarter. That is in the $8 million-$10 million range. The outages are a separate issue in the $7 million-$10 million range. It is just a much, much higher level of maintenance activity. I think again, most supply chains have just been running so hot this year because of the strong demand and limited inventory that things like this have been pushed. You can only push those so long in order to maintain quality of assets and the like. We need to get quite a bit done this quarter. Okay. In China, coal prices have really elevated there. In general, are higher coal tar prices good for Cabot in China because of whatever raw material differentials you have, and low coal tar prices tend on the margin to be tougher for your pricing or your margins? Is that generally true or no? Yeah. I think you've got it right, Jeff. I think there's 2 factors here. There's sort of absolute price, and then there's direction of price. Yep. Let me try to talk through both of those. I think with respect to absolute price, you're right. coal tar prices, because the whole coal and coal chemicals chain has moved up in pricing. The absolute prices are higher. In general we would prefer that because what that means is that the Chinese carbon black producers do not have much of an arb relative to global fuel oil prices to then export out of China, because the economics simply don't work. I would say right now while that arb in some years past has been open, and therefore flows of carbon black out of China have been more pronounced, that arb is decidedly closed right now because of that. There's sort of absolute price point number one. Absolute price point number two would be, in general, we make a more profitability, higher levels of profitability when feedstock prices are higher because our yield investments in energy recovery are generally linked to that fuel price. I think that flows through. Now, the thing to manage in China is really the direction of travel on pricing, because it is a spot market, and so what you'll see is when prices are rising, then we will price and see benefits a little bit ahead of the flow-through on our P&L, as we've experienced this year. The same is true then when it moves down, is that you would see market prices adjust a little faster than the flow-through of inventory, and you'd see it a little bit on the negative side. It's really the direction of travel would impact us in a short-term way with those factors. In general, stability at a marginally higher level is best for our business. Thank you. In Energy Materials, has the rate of growth changed? You talked about this different customer wins, and this is a higher growth area for you. Do you have enough capacity to serve your customers? Has the rate of change in the business altered over the past three quarters? Yeah. I would say the rate of change has not altered from our outlook that we shared last quarter, Jeff. Okay. Pretty robust growth expectation. The customer wins are customer wins that we were expecting, and we embedded that expectation into that estimate of EBITDA range that we gave. We're simply executing really well, getting qualified, and ramping commercial sales as expected. This is all about execution, and I would say we're executing really well. I'm very pleased about that, and I do think this is a really unique opportunity and one that is somewhat time-bound because this market is ramping fast. I think the momentum there only continues to build as you look at what's happening both in terms of government policy in this direction, but also, maybe more importantly, what the automakers are saying. As they retool their product lines to 100% EVs over the next 10-plus years, once that happens, there isn't really a return to back to internal combustion. You've effectively got to shut off the R&D investment in internal combustion engines and pivot it. I think those are pretty significant moves, I would say, and just underpin the growth expectations even more. On the capacity side, we will have to invest over time here to continue to provide growth capacity to support our customers, but we've got plans underway there. You might recall that we purchased a carbon black plant in Pizhou, China, from Nippon Steel. We're converting that to specialty carbons as we speak, and that will inject a slug of capacity that allows us to rebalance things to continue to serve Energy Materials. On the Sanshun acquisition, the carbon nanotubes one, we continue to grow into that. You might recall when we bought it was about half utilized. We've been growing into that capacity over the last year and a half, and we'll have to debottleneck and add some incremental capacity there as things ramp. I would call that largely sort of normal course of business growth, and that would be a good thing to have high-value growth and investment to generate strong returns. Lastly, you expressed some optimism about carbon black pricing in 2022. It's just early August. Normally, it's hard to make out these issues at Thanksgiving or before Thanksgiving. What makes this year so different that you have, it seems, a little bit more forward vision than you normally do? Yeah. It certainly it's early in the process, Jeff, no change there. I think our optimism is really grounded in the fundamentals here, where demand is strong. Inventories right now are particularly low, we see that being just supportive. It's not like there's a lot of inventory that's been built. I think in general, demand recovering, still some room to go just to get back to the pre-COVID-19 levels. Inventory's pretty thin. As we've been calling for a long time here, no real changes on the supply side. The only other thing that might be a slight difference as we sit here today in a more favorable direction is simply that global flows of product are just more challenged today given the logistics and transportation issues. I think that's causing most companies to emphasize a little bit more supply reliability and local supply chains. We're certainly seeing trends of that sort across a whole host of different value chains. That then means that local suppliers, regional suppliers, the value proposition there to support our customer is going to be a little bit stronger. I think that was always the case, as you know well, that the Reinforcement Materials business is largely a regional business, but there are global flows. I would say those are more challenging these days because of the transportation. A couple of points that might be accented a little more now than normal, but the optimism is grounded more than anything in the fundamentals. Okay, great. Thank you so much. Your next question comes from Laurence Alexander with Jefferies. Your line's open. Hi, this is Dan Rizzo for Laurence. How are you? Hey, Dan. Hey, just one quick question. You mentioned free cash flow conversion is obviously being hurt by higher oil costs. I was just thinking if you think about over the long term, what's the goal or how should we think about what free cash flow conversion should be? Yeah. I think really, if you look at the oil movements, those are the single biggest things, factor that will drive cash flow generation. Over a very long period of time, that oil price volatility has largely balanced out. Over a very long period of time, the net change in dollar investment in working capital has been remarkably close to zero over a very long period of time. We've got the balance sheet to deal with that inflation, deflation of the flat oil price. You ought to think about operating cash flow as strong EBITDA minus some increase in working capital that is growth-related, simply volume and growth related. That should drive strong operating cash flows if the earnings should flow through and generate strong operating cash flow. With respect to free cash flow, it's a question of where our CapEx is. We've got a philosophy here, a capital allocation philosophy of roughly reinvesting about half of our discretionary free cash flow in growth and about half returned to shareholders. Over time, that's been a reasonable way to look at it. I think those are the factors. I think the working capital one, Dan, is the thing that can distort in a short period of time. Over a longer period of time, it's been remarkably not an issue, and we've got the balance sheet to deal with that. Thank you very much. Your next question comes from Chris Kapsch with Loop Capital Markets. Your line's open. Good morning. I appreciate your comments about the burgeoning conductive carbons business. As that EV battery technology roadmap evolves, there's a big emphasis on improving range via energy density and also an emphasis on charging cycle times. To address these improvements, there's evolutions in the cathodes and especially the anode technology. There's a lot of scuttlebutt, of course, about solid-state lithium-ion batteries maybe eventually becoming broadly adopted. My question to you in terms of how this business develops is, are you agnostic about how the technology roadmap evolves? In other words, do you simply benefit from a transition to EVs from ICEs? Are there certain battery technologies where you see your products being sort of disproportionately increasing in terms of content per battery? Yeah. I think the primary driver here, Chris, is the conversion from internal combustion engines to electrification. The current battery technology has strong needs for conductive carbon additives to improve both range as well as cycle life. The conductive carbon additives are really critical in the chemistry. Now, I think the current technology platforms have quite a bit of runway here. That's the basis on which so many plants and capacity increases are being installed today by the big battery manufacturers. Now, there are a number of technology developments. The next gen technology developments like solid-state batteries that you talked about. They're thought to be safer and higher energy density than conventional lithium-ion battery products are today. Since solid-state batteries will use either ceramic or polymer as the electrolyte, neither of which is conductive, solid-state batteries will likely need even more conductive carbon additives. In that sense, we're somewhat agnostic. I think the key for us is we want to be in this for the long haul. We want to win today, and then we want to be with our customers as this technology transition occurs and be their conductive carbon additive innovator to do that. You mentioned working with, I think you, or maybe even being specced in in, was it six of the top eight producers? Are you also having any development efforts ongoing with some of the companies that are trying to position themselves for solid-state in the future? Or right now is your commercial effort focused on the existing battery producers? Thanks a lot. Appreciate the color. Yep. Yeah, as I said in the comments, the top eight producers make up about 90% of the market today. We're now qualified and with commercial sales on six out of the top eight, and have development programs with, and qualification efforts underway with all of them. I think our focus is very much there. How technology develops here over time is going to be a combination of the existing leaders transitioning technology developments, and we're involved with them on those discussions, as well as some, what I would call more upstarts that are really trying to play for the next generation technology, and we're closely engaged with all of those players as well. Ultimately, how that plays out is unclear. My guess, once the big guys build scale here, they're going to be playing for the next generation, too. How that all plays out is, it's a bit early. We're engaged across all of the customers right now on the next generation work. Very helpful. Thank you. All right. I'm showing no further question at this time. I would now like to turn the conference back to Sean Keohane. Great. Thank you very much for joining us here today. We're excited about the momentum we've built and our growth prospects. We plan to share more of that with you at our Investor Day, which we'll be hosting in Boston on December 2. At that Investor Day, we'll be taking a deeper dive into our key businesses and provide more insight into our long-term strategy, our key growth initiatives, and our sustainability leadership. Hopefully we can see you all there in person. In the meantime, thank you for joining today, for your support of Cabot, and I hope you all remain healthy and safe. Thank you. Ladies and gentlemen, this concludes today's conference. Thank you for your participation, and have a wonderful day. You may all disconnect.