Hello, and welcome to the Celanese Q3 2023 earnings call and webcast. If anyone should require operator assistance, please press star zero on your telephone keypad. A question-and-answer session will follow the formal presentation. You may press star one at any time to be placed in the question queue. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Brandon Ayache, Investor Relations. Please go ahead. Thanks, Kevin. Welcome to the Celanese Corporation Q3 2023 earnings conference call. My name is Brandon Ayache, Vice President, Investor Relations, and with me today on the call are Lori Ryerkerk, Chairman of the Board and Chief Executive Officer, and Scott Richardson, Chief Financial Officer. Celanese distributed its Q3 earnings release via Business Wire and posted prepared comments on our investor relations website yesterday afternoon. As a reminder, we'll discuss non-GAAP financial measures today. You can find definitions of these measures as well as reconciliations to the comparable GAAP measures on our website. Today's presentation will also include forward-looking statements. Please review the cautionary language regarding forward-looking statements, which can be found at the end of both the press release as well as the prepared comments. Form 8-K reports containing all of these materials have also been submitted to the SEC. Before opening it up for your questions, let me turn it over to Lori to provide a few introductory comments. Thanks, Brandon. So we've done and announced a lot recently, so I just wanted to take a minute or two to emphasize again exactly what we are all working so hard to achieve at Celanese. I can confidently say that at no point in our history has there been a greater opportunity for Celanese to deliver significant earnings growth as in the next few years. In the Acetyl Chain, we continue to enhance our earnings power and optionality with projects like the acetic acid expansion at Clear Lake and the methanol expansion, also at Clear Lake, which will dramatically strengthen our sustainable product offerings. Of course, in Engineered Materials, we continue to integrate and synergize the M&M acquisition, which transforms EM into the preeminent global specialty materials provider. This important and valuable work has been made more challenging in a demand backdrop that remains exceptionally weak and volatile. Our visibility into future macro conditions is limited. Regardless, our teams have worked tremendously hard to deliver three consecutive quarters of earnings growth since closing the M&M acquisition, and to position us to meaningfully exceed our full year objective to reduce net debt by $1 billion in 2023. The work has not been easy, and I sincerely thank each of our employees for their individual contributions and dedication. Quite frankly, while the work is moving forward at pace, the macro environment has temporarily masked some of the underlying financial benefits of our actions to strengthen our business, but we remain resolute in continuing to take decisive and controllable actions. Our most recent actions, including the announced changes to our leadership team and manufacturing footprint, are evidence of our ongoing commitment to drive earnings growth and execute against our de-levering team plan. The purpose behind the changes I've made in our executive leadership team is to enhance the alignment of our individual strengths and experience to accelerate and deliver on the many value-enhancing opportunities before us. Scott, Chuck, and Ashley are exceptionally well prepared for their new roles, and I am confident these changes will immediately enhance the value we drive as a collective leadership team. I speak for our leadership team and broader Celanese in saying we are fully engaged and committed to delivering on the opportunities before us. With that, Kevin, let me turn it back over to you to open it up for questions. Certainly. We'll now be conducting a question-and-answer session. If you'd like to be placed in the question queue, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. One moment, please, while we poll for questions. Our first question is coming from Mike Leithead from Barclays. Your line is now live. Great, thanks. Good morning, and congrats to Scott, Chuck, and Ashley on the new roles. Lori, I wanted to start on Engineered Materials pricing. I think in the prepared remarks, you made a comment that pressure has widened throughout the year, but nothing indicates it's structural. So can you maybe just talk a bit more about your confidence here or maybe what you've seen in previous down cycles versus now? Just what gives you the confidence in making that comment? Yeah, if I think about pricing, and again, I'll split it into two. You know, what we've really seen is pretty good price stability in differentiated products. What we've seen then is more of the volume impact there associated with consumer durable, consumer electronics. You know, there, we've just seen a pretty significant volume decline as we've seen consumer demand come off this year as people have shifted their spending to more services and experiences. You know, where we've really seen the price pressure is for more standard grade materials, where, you know, we're seeing quite a bit of length in the industry in terms of supply, softer demand, and, you know, everyone having to take price action to come down. You know, what I would say is, you know, one of the reasons we're taking the steps as we've announced around Uentrop and other, is really to better position our supply with the current demand scenario by shutting down some of our higher cost operating capacity, filling those customer needs with lower cost capacity we already have, or even purchases, if that's lower. And then in the future, as we see demand start to come back to what I would consider a more normalized level, you know, we should be able to provide that demand from other assets that we already have in our network and through no and low cost to bottleneck. So, you know, again, I think we're in a kind of unique position structurally, with very little exports out of China, a very soft, soft environment in Europe, and, you know, feel confident in time it'll come up. I mean, auto is a great example. Auto has been very solid this year. We expect that to continue. Medical's been solid. So I think we really are just seeing a reflection of consumer preference and consumer spending, which we believe is temporary and off the highs that we saw in 2021. ... Great. Thank you. And then a question for Scott, maybe on free cash flow. I think in Lori's 2024 outlook, she laid out in the prepared remarks maybe $300 million-$400 million of earnings improvement next year. You guys are probably getting a similar type amount of working capital benefit this year. So as we think about free cash generation next year, is relatively flat year-on-year a good starting point today, or is there further working capital or other cash benefits you think you can get next year? Yeah, thanks, Mike. You know, we're gonna work to ensure that as we see earnings growth, that we put that as much to the bottom line of free cash flow as possible. You know, we've called out CapEx being $100 million lighter next year as well. I think the variable will be working capital, and it depends upon kind of what happens with raw material pricing, as well as depending on kind of where sales are and what happens with the accounts receivable line. But, you know, we're gonna do everything we can to continue to bring inventory down next year. There could be an opportunity for further reduction, depending on what happens with demand as well as in the raw material landscape. Great. Thank you. Thank you. Next question is coming from Jeff Zekauskas from JP Morgan. Your line is now live. Thanks very much. I think Eastman's filter tow profits are up, I don't know, $225 million through the nine months. There was no mention of filter tow in your remarks. How's that business doing, and how is it affecting the Acetyl Chain earnings? Jeff, as you know, we are running that as a end-to-end chain now. We're treating tow as we do other downstream derivatives. What I would say is we're seeing similar impacts in tow. Now, we are seeing in the second half a reset of contract pricing, which is bringing those margins down, slightly from the first half, but that was anticipated with the way the contracts are set up. But I would say, you know, we're still on track to exceed the $245 million that we set out, earlier this year as our target for tow. Okay. You're closing your German nylon facility. Is that about 15% of your nameplate capacity in nylon? You know, what utilization rate are you running at in nylon generally? Yeah. So Uentrop actually is one of the four plants that we have for nylon, and it represents right at 25% of our total capacity. I don't have the overall total utilization numbers in front of us, but I would characterize this, Jeff, as much like we've done with, with Pampa and other assets, where we've really worked on, you know, concentrating our footprint, taking out either underutilized or less profitable assets in order to shift volume into lower cost, more profitable assets, you know, giving more flexibility in our networks in terms of purchasing either of, you know, polymer or different raw materials, you know, depending on where we produce. You know, that's what we're trying to build here with the Uentrop shutdown is, you know, we knew going into the deal that, or we believed that DuPont had excess capacity. Now that we've had some time to look at it, we believe shutting down the Uentrop is the best way to really adjust our cost basis on nylon while still maintaining compounding in Europe, which is necessary for our customers. You know, but I would say this is very consistent with what you've seen us done over the last 10 or so years in Celanese, where we've probably shut down over 15 facilities in the last 10 years as we've implemented these models. Great. Thank you so much. Thank you. Next question today is coming from Mike Sison from Wells Fargo. Your line is now live. Hey, good morning. Yeah, I've been told I need to do more math these days. So if I add up sort of your bridges that you gave for 2024 and just use the lower end of the inventory stuff, looks like on no volume growth, you could do $12 or better. Is that the right math? And then can you help us on what or how to frame up volume and inflation or deflation upside for 2024? Yeah, Mike, you know, we, we laid out the, the, various buckets, so I think you can do the math. I mean, you know, just to reiterate, you know, we do expect to get more than $150 million in additional M&M synergy. With some of the acceleration of the, manufacturing footprint optimization, hopefully, we can, you know, exceed that amount as well, since we didn't have all of that baked in. We should get another $100 million once we get Clear Lake acetic acid started up. Debt service goes down by about $50 million. You know, we'll have less inventory reduction next year, so less margin impact from that. And then, you know, I think as you're saying, the biggest issue there is really gonna be, you know, what is the benefit we see for flushing through higher cost inventory? And, you know, this could be a very big number. It will depend on what happens with raws. As you know, we're in quite a volatile raw material environment right now. And then, you know, what happens with demand going forward? If demand stays low, you know, then, you know, I think these are the things we're focused on because these are what we can control. If demand goes up, obviously, we'll get more margin, but we will also probably see some increase again in working capital. So I would just say there's still a lot of volatility and uncertainty around next year, and that's why we're just really focusing on those big buckets that we outlined that are in our control. ... Got it. And then, when you think about 2024, you know, what, what do you think could happen to China Auto and some of your end markets? You know, any initial thoughts when you've talked to customers of what the demand environment could be next year? Yeah, I you know, again, if you could tell me what December is gonna look like, maybe I'd be better at thinking about 2024. I mean, things are very uncertain and volatile at this point. You know, I would say on auto, you know, consistent with the forecast you're seeing on auto build, we expect to see some moderate growth in auto, really across all sectors, a couple percent. And our growth should track that. We expect medical continue to be strong. I would say, you know, based on conversations with customers, I would expect some moderate growth across next year as we start to see some demand coming back. But I would also say the timing of when that starts and the pace at which that happens is very uncertain. So, you know, certainly a lot less conviction at this point on next year than we might usually have at this point, given the volatility we're seeing. Got it. And, congrats to everybody with the new roles. Thank you. Thanks. Thanks, Mark. Thank you. Next question today is coming from Josh Spector from UBS. Your line is now live. Yeah, hi. Thanks for taking my question. So I wanted to follow up on the price cost or, like, the inventory or lower cost inventory that can flow through. I guess, Lori, you sound a bit more uncertain on that, but it still could be large. I guess, if you look at where pricing is in Q4, is that a level, if that holds, you would actually get a spread benefit into next year? Or do you need pricing to move up from here? So just wondering around the kind of moving parts there. Thanks. No, look, even I think at the pricing we're seeing now, we are starting to see some pull-through of that lower cost inventory, and we see, you know, that as a moderate impact on our quarter-on-quarter growth. So I think even at these pricing, we would expect to continue to see some portion of that pull through. Obviously, if we saw pricing increase, that would help more, but, you know, we also have to consider what the price of raw is going in, and we are seeing some upward pressure on raw materials this quarter as well. But I, look, I would say in all cases, we expect some impact from that flushing through of higher cost inventory. It's just the magnitude will depend on raws as well as future pricing. Okay. Yeah, I, I guess just maybe to pin it, that when you talk about it being the biggest bridge item, if pricing stays where it is, is that a true statement or does that come down? I would say if pricing and raws stay where they are, that would still be a true statement. Okay. Thank you. I'll leave it there. Thanks. Thank you. Next question today is coming from Vincent Andrews from Morgan Stanley. Your line is now live. Thank you, and good morning, to all, and congratulations to those with new roles, excuse me. I just wanted to ask a couple of things. One, in acetals in the Q3, there clearly was a benefit, despite a bunch of headwinds, from outages in Asia. So I'm wondering if you have any way of sort of sizing that, in the Q3 and what you anticipate, in the Q4. It seems like there's some comments that you're still gonna have some higher pricing flowing through in the Q4, and I'm just wondering if that's just sort of a delay of inventory flowing through or what? And then secondly, on the tax rate, you know, I understand why it's lower this year and that it was originally contemplated in the lower guidance, but if the demand environment's gonna stay not all that different from where it is today, at least through the first half of next year, does that mean you have a lower than normal tax rate next year as well? Thanks. Yeah, Vincent, let me see, let me see if I can answer that. You know, what I would say is we did see a positive influence from the higher pricing in Asia that we saw as a result of supply outages in the Q3. Most of those occurred in the last few weeks of the year. I would think of those as you know, pretty much offsetting the impacts of the contract pricing reduction that we had called out and, you know, the turnaround impact that we saw. What I would say is, going into the Q4 now, we're really, we've seen that price drop back to closer to the cost curve, maybe slightly above it. So we've kind of lost that benefit in China. We will see a little bit of benefit, although significantly less of that in the Western Hemisphere in the Q4, you know, because typically, Western Hemisphere pricing lags by about a quarter. So, you know, we'll see some benefit, but not to the same extent that we saw the benefit in the Q3. Then on the tax rate, Vincent, a lot's just gonna depend upon the geographic mix of earnings. If things stay exactly as they are this year, then, you know, certainly we could be at lower levels. If we see things normalize back to kind of what I would say is the normal mix of geographic demand, then we'd be back more next year in that kind of 12% range. Thanks very much. Thank you. Next question today is coming from David Begleiter from Deutsche Bank. Your line is now live. Thank you, and good morning, and first, congratulations to Scott, Chuck and Ashley. Lori and Scott, just on EM pricing, pricing's up about 38% in 2021, 2022. Should be down this year, maybe around 8%. If we do go back to pre-2021 cost levels, do we retain some portion of this price increase? And if so, why is that the case? ... That seems like a very long time ago, Dave. You know, what I would say is, the good news is we are seeing volumes come back, and so in some areas, you know, like medical, like auto, we're kind of back to 2019 levels. I think, you know, so pricing similar or, you know, margins probably similar. Again, you know, consumer demand, durable goods, electronics, very, very soft. Pricing for differentiated grades, okay, I think that's something that we can keep. I think, you know, with the kind of the current low demand and therefore the long supply for some of those standard grades, you know, it. We're gonna need to see some more demand before we can get the pricing back up to those kind of levels. Yeah, David, I would just add, I think, you know, given some of the structural changes that we're making, we do think we should be able to hold that price, you know, as we get back to kind of normalized raws. You know, I think, you know, one of the things we've talked about is now with the Engineered Materials business and the acetyls business being about the same size, you know, as we see in more normalized demand environments, the raw material landscape move up and down, you know, we should see some countermovement in margins in EM versus acetyl. So, you know, overall, it should kind of fundamentally lower earnings volatility for the enterprise as a whole, you know, once we get back into kind of normalized conditions. Very good. Just on Clear Lake, the asset expansion for next year, how is your thinking about the ramp-up to the $100 million of normalized annualized earnings? Should be half of that next year in that range or something more or less? Thank you. Yeah, look, the Clear Lake asset expansion will start up within the Q1, and so I would expect that ramp-up to start kind of immediately after the start up. Thank you. Thank you. Next question today is coming from Kevin McCarthy from Vertical Research Partners. Your line is now live. Yes, good morning. Lori, I think in your prepared remarks, it mentioned that you ceased production at certain Engineered Materials facilities in Brazil, Argentina, and Germany, beyond the nylon shutdown that you discussed previously. Can you just put that into context for us? I wasn't entirely clear on whether these are temporary idlings or more permanent structural changes. Maybe you could talk through kind of where you are in that asset rationalization process today. Yeah, I would say for the majority of the ones that we've named, so the ones in Argentina, Brazil, and Europe, you know, these are more permanent shutdowns. Now, we are taking temporary actions in things like VAM, in Frankfurt and others. We're really using that as flex capacity to meet the current demands of the network, which is, you know, lower than normal, but where we will need that capacity when we come up again. But the ones we've announced recently, I would consider those structural changes to really, you know, redefine where we are on the cost curve by taking out our highest cost producers. Okay, that's helpful. And then I wanted to follow up on synergies. Can you, tell us what the synergy-related benefit was in 3Q and what you're expecting in 4Q? And then when we look at the targeted tailwind of $150 million next year, would you describe that as ratable or ramping throughout the course of 2024? Yeah. So Q3 was actually a little bit lower than we anticipated because some of our, I would say, at the lower end of the kind of 10-15 sequential uplift we had expected on synergies, because with our volumes a little bit lower, you know, some of our synergies are volume related. Again, we expect, though, a small synergy, sequential synergy increase in the Q4. But the real synergies will start to come in after we do the completion of our cut over to SAP next year in the Q1, you know, and after we take some of the shutdowns that we announced, for example, the shutdowns in Evansville, that will happen in January and February. So, you know, the synergies will definitely ramp across 2024, but I would say starting more in the Q2, into the Q2 and through the end of the year. Yeah, Kevin, in the Q3, synergies were around $30 million in total, which was incrementally up about 10-11 off of Q2. Got it. Thank you so much. Thank you. Next question today is coming from Hassan Ahmed from Alembic Global. Your line is now live. Morning, Lori. Lori, in your prepared remarks, you guys talked about maximizing the make versus buy flexibility. I mean, you know, to me, the legacy sort of Celanese portfolio, you know, you're pretty much optimized that side of things. So is it fair to assume that a lot of this sort of optimization work will be on the EM side of it? So that's part one of the question. And the second part is that it seems that, you know, right now there's a fair bit of idling or permanent shuttering going on. Could this also mean, you know, in the future, some greenfield build-out happening as well? Yeah, thanks for the question, Hassan. So what I would say is, you know, we're really focused on building the flexibility across all of our products, and so, you know, we're not just looking at make versus buy flexibility, but we're also looking at sourcing flexibility for raw materials, regional flexibility... flexibility and contract commitments, you know, much as, as we did with tow, more multi-sourcing versus single sourcing. You know, specifically for PA66, yes, we want the flexibility to make versus buy, especially in this low demand period, where we can often buy cheaper than we can make in Europe, in particular, because of higher energy costs and higher fixed costs, higher raws there. But I would say, you know, this has been a consistent theme in Celanese and one we're just now applying to the heritage M and M portfolio. So, you know, I think, you know, but, you know, I would say we've also applied this in Ateva with some of our contracting around raw materials and others. I mean, it is a way we continue to deliver value uplift year on year, even without a large amount of volume growth. So I think, you know, we expect that to continue, and I think, you know, as a result of that, you will continue to see some footprint optimization continuing over the next few years. And I would say in terms of greenfields, I wouldn't anticipate you know, anytime in the next many years, a lot of greenfield builds. I think what you'll continue to see us take advantage of the footprint we have and the opportunities to do no and low cost to bottlenecks around the world, you know, much like the Clear Lake expansion, where we're basically doubling the size of our unit for $400 million. So, you know, we think we have a lot of opportunity already on the ground to significantly expand our footprint without major investment. Very fair. Just switching gears a little bit. Look, I completely sort of understand that visibility is extremely low right now, but, you know, just thinking beyond sort of the near term, I mean, you know, with some sort of historical context as well, I mean, this destock has been unprecedented, you know, both in terms of absolute volume declines as well as, you know, the ongoing duration of it. So just as you sort of sit there and look at, you know, the legacy Celanese portfolio as well as the history, you know, of living through these destocks with the acquired businesses, I mean, what could a potential eventual restock look like? Yeah, look, I, at some point, I, you know, I think there will be some restocking. You know, when that happens, it's, I would say, you know, highly uncertain. Right now, we're just happy to see people starting to return to normal order patterns in some polymers in particular. I think Aptiv, we're seeing more. You know, I think, you know, I would think about restocking as being, you know, a few percent, but again, I think that could be spread across a pretty significant period, as I think people will be nervous to rapidly, you know, restock after what we've been through the last year. Very helpful, Lori. Thank you so much. Thank you. Next question is coming from Aleksey Yefremov from KeyBanc Capital Markets. Your line is now live. Thanks, and good morning, everyone. I wanted to return to the M&M synergies in your 2024 bridge. The $150 million improvement, does it depend on volume improvement or demand improvement, or is it independent of it? So the $150 million, what I would say is, look, initially, I would say there was some volume improvement in that because some of the synergies are volume related. I think that's why you see us continuing to accelerate some of our manufacturing footprint work to better, to better align current demand with our supply, and we will get synergies from there. So I would say, you know, we are fully committed to delivering well over the $150 million, this year. The blend may be slightly different than we had set out, say, a year ago at the time of the deal, but we think we have sufficient, you know, activities underway to deliver that. Thanks, Lori. And then staying with EM, and you just announced shutdown of some assets. Have you seen the industry and your peers either idle or announce permanent shutdowns in any significant polymer chains? Yeah, I think, you know, if we look at the industry, probably specifically, you know, PA six six is, is where we've seen the most activity. You know, we have seen some additional capacity, being built out in Asia, it particularly in China for nylon polymer, which has increased market length in a period of, of lower demand. And therefore, we've had some increased competition, depressed pricing. You've seen all those impacts. I think what you see, though, is much like our shutdown, we start to see other industry participants take action. So we've seen a nylon intermediate producer announce a shutdown of one of their largest assets here in the last month, which represents about 10% of the intermediate production. So I think you see the intermediate using this as an opportunity to take out some of the, you know, legacy, higher-cost assets in different parts of the world that have become quite high cost, and work towards rebalancing. Again, when demand returns, I think we'll be in a much better position, but I, I do think you're seeing a number of commercial actions going on across the industry to address it. Thanks, Laurie. Thank you. Next question is coming from Frank Mitsch from Fermium Research. Your line is now live. Good morning, and let me also offer my congrats. Maybe if I could ask the destocking question a little differently. You mentioned in the release, the prepared remarks that you're seeing it end here in the Q4 in the Americas and Asia, though will continue in Europe. What gives you the confidence that we're gonna be finally done in the Americas and Asia, such that 2024 we're gonna see underlying demand growth in those regions? Yeah, look, I think our confidence really comes from, you know, obviously, conversations with our distributors and our direct customers as well. But also just the buying patterns we're seeing in the U.S. I mean, we don't have a lot of visibility into future purchasing because what we're finding is, you know, now, especially in the Americas, when people want to buy, they want it now, which suggests to us that they are fully destocked because they don't have inventory in their chain that they can, they can pull on. And I think, you know, in the U.S. at least, we're starting to see some recovery, especially in those areas that have been weak, like consumer durables and electronics, to maybe more normal demand patterns. So I think, you know, it's the customer buying patterns that I would trigger off of to say we feel pretty confident that we're at the end of destocking in the U.S. I would say, you know, less so in China. China, I would describe as consumer demand in China for China is come back to, I would say, near normal levels. But obviously, China export volumes are still very weak, which is a significant portion of the China demand. And then in Europe, I would just say, you know, outside of auto, we really just don't see any improvement in Europe, as I think consumer confidence remains very low in light of the war in Ukraine and higher energy prices. Mm-hmm. and higher inflation. You know, we're just not seeing that, that behavior start to pick up in Europe yet. Gotcha. That, that's very helpful. And then, the early look at 2024 suggests that there's a bunch of one-time cost actions that you took in 2023 that will not be repeated, so that should set up an easier comp. I'm just curious if you could kinda quantify or provide an order of magnitude of that, and perhaps if plant turnarounds also play a role in some expectations for 2024 to be better than 2023. Any color there would be very helpful. Yeah, I, I think, you know, we had called out a couple of quarters ago, $60 million-$80 million of one-time actions that we were taking this year to really offset some of the softness we were seeing still in the Q2. Mm-hmm. Mm-hmm. You know, we're achieving those across Q3 and Q4. What I would say is those are really related to actions we've taken to idle lines, you know, to cut costs out of facilities that aren't running full. You know, if demand does not pick up, obviously, we will continue to realize those benefits next year as well. If demand picks up, we will be more than happy to spend that money again in order to capture the margin that will come from, from the increased demand. So I, you know, I don't see that as a big factor either way in our bridge from 2023 to 2024, 'cause we'll either get it in earnings or we'll continue to see it as cost savings. Yeah, Frank, and I would say our focus is really on now actioning other things that are gonna be more permanent in nature, given some of the things we called out in the prepared comments, so we can make kinda more sustainable cost reductions and really lower the overall fixed cost base of the company. And that then gives us an ability to withstand lower demand environment- Mm-hmm ... in the future and get much greater leverage on the fixed cost that we have. Great. Great. Thanks so much. Thank you. Next question is coming from Arun Viswanathan from RBC Capital Markets. Your line is now live. Great, thanks for taking my call. Congrats to everyone on the new roles as well. So I, I'm just looking at the bridge for 2024, and again, obviously, several questions have been asked here. But if we think about Q3 EBITDA around $625, and Q4 looking a little bit similar from your segment commentary, makeup, you're exiting the year at maybe like, you know, $2.5 billion run rate. You have maybe $100 coming from the AC uplift, and then, you know, $150 from incremental synergies, and then maybe a couple other items, including the lack of an inventory hit. So that puts us at maybe, you know, $2.8 or between $2.8 billion and $3 billion. Are we thinking about that correctly as far as EBITDA goes? And, you know, is volume the main driver that would push you above that range? Yeah, again, you know, we've called out what those factors are. I would say, you know, the big unknown at this point remains demand and pricing, particularly raw material pricing, which, as we've seen this year, can cause quite a lot of volatility. Hopefully, we'll be able to give a better guidance next quarter. Okay, I appreciate that. And, maybe I can just ask one on the balance sheet. So obviously, a lot of progress there, as well as, restructuring the debt profile and, redomiciling. Do you expect any other further opportunities there? And, you know, I guess could you just reiterate what your target, you know, leverage level is, maybe as you exit 2024? Yeah, Arun, I mean, our focus right now is continued to accelerate cash generation and aggressively repay debt. You know, we have obviously moved the maturities out since we last talked, a quarter ago. But certainly, now our focus is on bringing down, you know, overall net debt. You know, we're gonna be focused on repatriating cash and using that cash to reduce debt. And then with the cash generation, you know, we should next year, you know, between repatriation, cash gen, we should be able to reduce, you know, debt by, you know, almost $2 billion. Net debt reduction, certainly well north of $1 billion. So I think, you know, from- ...From that standpoint, that's where the focus is today. We don't have a need really to, adjust maturities or refinance. Certainly, if markets change, we'll be opportunistic around that. But, you know, we're gonna continue to focus on every single quarter, marching down and bringing our leverage levels down with a target to get to, to three times as quickly as possible. Great. Thanks. Thank you. Next question is coming from Lawrence Alexander from Jefferies. Your line is now live. Good morning. Just when you speak about kind of the, you know, improving the productivity in the Acetyls through, you know, shrinking capacity, and I guess also it's parts of EM. If you think about the next three, four years, if there is no significant surge in demand, how much of your capacity could be optimized or rationalized through, you know, shifting through process improvements at your larger facilities and debottlenecking and upgrading the network? In other words, how far are we in this upgrading process, and at what point would you need to start considering just sort of new greenfield projects? Yeah, let me take them as two separate. I, you know, I would say on Acetyls, we have done a lot of work over many years now to really reduce the number of facilities that we have, and really have larger, very efficient facilities, strategically located regionally. And our activities, including the big expansion at Clear Lake, but we've also had many, many small expansions in many of our downstream derivatives, to basically keep us at the same or greater volumes and certainly much higher margins, as a result. I would say we've also done that work in the Heritage EM portfolio over the last, call it, 10 years, as we adopted the new models and the project pipeline models, and you've seen a lot of those actions in the announcements we've made over the last 10 years. I think now, for us, that's now taking the M&M portfolio and applying that same mindset to that. So I don't, don't really have a number yet what that means in terms of, you know, capacity that we would take out. Again, I don't really see any time in the near to medium future, any need for greenfield, because we have sufficient capacity, even with some of the strategic shutdowns in our existing network, and we have a team that's exceptionally good at finding low and no-cost bottlenecks to our existing assets to add very efficiently and inexpensively, additional capacity. Thank you. Thank you. Our next question today is coming from Salvator Tiano from Bank of America. Your line is now live. Yes, thank you. Firstly, I want to ask a little bit, as you said, the shutdowns in Engineered Materials are a big part of the $150 million synergies. I'm just wondering, were these actions in your original plans when you acquired the DuPont assets, or were they more in response to recent market conditions? And, I guess if the latter, you know, why would the synergy target increase given that these will be incremental actions? Yeah, great question. Look, we knew at the time of the acquisition, or we believed at the time of the acquisition, that DuPont had more than sufficient capacity to meet normal demand, conditions, and requirements. We assumed that some would be more efficient or less efficient than others. We didn't know which assets those would be. So we've needed this time we've had since the acquisition, to really look at how all of these plants are operating, what their cost structures look like, and, you know, where the most opportunities are to really fine-tune our footprint, to build in the most flexibility, the most synergy, you know, the lowest cost footprint. Like I said, much as we've done with Celanese over the last 10 years. So the actions you're seeing us taking now is really addressing that overcapacity now that we've been able to identify where that is. Some of the temporary shutdowns and line shutdowns and things we're taking are more in response to the near-term demand environment, leaving the flexibility for the future. But the things like Uentrop in Argentina and those that we've announced, I'd say, are more permanent in nature. Okay, perfect. And I want to ask a little bit about your Q4 guidance and assumptions. I think there's a lot of questions regarding what's the demand destruction, the stock, the stocking, et cetera. But I think what makes, I guess, your outlook a little bit different than most of the comments that have been reported so far, is that you made the comment, if I understood correctly, you expect a more muted destocking into forward than normal, whereas I would say, the vast majority of your competitors expect the same, if not a more intense destocking quarter. What, what, why do you differ versus, I guess, most of the other chemical companies here? Yeah, I mean, I can't really comment on what anybody else believes is gonna happen. As I called out earlier, you know, we base our views on what we're hearing from our customers, what we're hearing from our distributors, the customer order patterns that we're seeing and our experience with those order patterns. You know, it certainly helps that half of our volume in engineered material is going into automotive, and we expect automotive to be quite solid across Q3 to Q4. So we're really just dealing with, you know, the other portions of our demand, when we're looking at what is the impact for the Q4. So again, I can't really say why we'd be different, but certainly our share of auto may be one of those impacts. ... Perfect. Thank you very much. Thank you. Next question today is coming from Andrew Keches from Barclays. Your line is now live. Yeah, thanks. Just to clarify, the comment earlier on the debt repayment. So it sounds like and you said cash flow will be used to handle the maturities now that you've reprofiled. But that excess cash you're running, can you just remind us where your operating needs are, and can you get all the way down there in 2024? Yeah, thanks, Andrew. You know, cash balance is a little north of $1.3 billion right now, and we'll be repatriating that cash now in the coming months. And then once we get integrated on one system, which we expect to happen in the early part of next year, then we'll be able to start moving that cash balance down to where we think we can, minimum needs would be right around $500 million. So we definitely are confident that we'll be able to get to that $500 million level during 2024. Okay, great. And then I just didn't catch the answer on the leverage metric. I know you've said three times in the past. Are you putting a horizon or a timeline on that at this point? No, I mean, look, we, we had originally targeted the end of 2024, and we're gonna do everything we can to get, get close to that. At last quarter, we said, you know, it may bleed into the early part of 2025. A lot just depends upon what happens with, you know, our cost reduction plans, which is another reason why we continue to take aggressive action on getting, you know, controllable earnings improvement from cost reduction, and then where, you know, the macro and, and, you know, the demand plans that we have. The other things that teams are doing, largely in engineered materials, is really working the revenue synergy side of things. You know, the revenue synergy side of bringing M&M into our project pipeline model, it will start to yield opportunities and then close wins as we get further into 2024. So, the pace and speed at which we're able to execute on those plans will certainly help us accelerate that deleveraging plan. That's great. Thank you. Thank you. Next question is coming from Patrick Cunningham from Citi. Your line is now live. Hi, good morning. Thanks for taking my question. How are you thinking about potential portfolio actions, let's say, if demand does not get better from here? Is there anything that maybe stands out as separable or where you can structure a similar deal as the food ingredients JV? Yeah, I think as we've called out in past calls, you know, we are gonna continue to be opportunistic and disciplined in our approach to divestment. We continue to look at a number of assets from both the heritage Celanese as well as the M&M portfolio as possible divestiture targets. But, you know, we really need to understand what the future potential of those assets are and what the value to us is, and then identify other parties that will value them more than we value them. So, you know, I would say we continue to look for opportunities, but, you know, we will be selective about what we do, so it doesn't impact long-term growth as well as making sure we get fair value for it. Got it. And then just on the, ECO-CC brand with products containing recycled CO2, you know, what sort of relative premiums do you expect to achieve? And, you know, would you be fulfilling incremental demand there, or is that more of just, you know, optionality with the rest of the portfolio? Look, I think you've said it best in terms of optionality. We, we actually started that project just on credits, and it was justified based just on additional methanol for use in Clear Lake. And really, the cost advantage of make versus buy for methanol on an average basis. So that was the justification for the project. Since the time we started the project, obviously, markets have continued to develop for more sustainable products, for lower carbon footprint products. And we, we do believe for certain that there will be a premium that will be available for more sustainable products. I would think not so much. I, I don't anticipate we will be in the biomethanol market. Our intent is to take that methanol and further convert it into lower carbon downstream derivatives. So think lower carbon acetic acid, lower carbon VAM, lower carbon VAE, lower carbon POM and, and other polymers. And that's really where we think the advantage is, as end users will see more value in being able to have low carbon. So, you know, think of it simply as being able to, through this project, you know, put CO2 in the paint on your wall that would otherwise be went into the atmosphere. I mean, that's where we see the premium coming, is from people who, you know, want to have that impact on their environmental footprint. Great, very helpful. Thank you. Next question is coming from Jaideep Pandya, from Onfield Research. Your line is now live. Thanks. The first question is really on the nylon chain. There is a lot of upstream capacity in monomers and polymers coming in Asia. So could you just tell us, like, you know, maybe on a fundamental basis, how do you add value in your nylon sort of portfolio? And, you know, in the long run, why would you actually want to be more in the polymerization? Why wouldn't you want to be more downstream, asset light, use this capacity that is coming in Asia and you know, create more product differentiation? That's my first question. And then on the acetyl side, you know, there is capacity again coming in China. Some of the plants have been late this year and ramping into next year. So how do you see demand-supply balance in acid and VAM next year? Thanks a lot. ... Thanks for the question. As I said earlier, you know, we do see the polymerization capacity and some intermediate capacity coming on stream in China. We have seen some other industry shutdowns going on, but we remain really excited about PA six-six. Again, a lot of what's coming on is polymer. A lot of the value is adding and compounding. A lot of our PA six-six goes into highly differentiated products where we are the sole suppliers, and we see a lot of future potential for PA six-six in EVs, for example. You know, uniquely to EVs, lately, we've had applications for, you know, battery cell planes, frames and end plates, high voltage connector, brackets and mounts for electric motors. So we see the EVs continuing to extend. To the extent that we see some moderation in EV production, we think that will be in favor of hybrids, and hybrids have even more PA six-six content, so that's only a good thing for us. And then, if you look at the next five years, we also see electricity demand more than doubling, partly driven by EVs, but also driven by the electrification of everything. And there will be a strong pull on PA six-six for that in building out electrical infrastructure. But these don't tend to be standard-grade materials. These tend to be highly differentiated. They need fire retardants, they need all sorts of different things, and that's where we really see the value being added, is in the differentiation, it, you know, achieved through compounding. Look, we always want the flexibility to make versus buy, 'cause we do see these markets swing because of outages and other things going on. This is really about building more optionality into this chain in a way that M&M didn't have, because they had a very cumbersome take or pay. They had a lot of overcapacity. They had single sourcing. You know, we have been systematically resolving these issues so that we will have a flexible and highly optional PA six-six chain, where we think we can achieve significant value uplift. Kevin, we'll take the next question as our last one, please. Certainly. Our final question today is coming from John Roberts from Mizuho. Your line is now live. Thanks, and congrats to all as well. After the startup of Clear Lake VAM in early 2024, do you have the option of permanently closing the VAM unit in Frankfurt, or do you need to maintain some optionality and flexibility by only doing temporary closures? Excluding any one-time upfront costs, is there a significant cost difference between a permanent closure and operating Frankfurt in a stop-and-start mode? Yeah, John, we're building a new acetic acid plant in Clear Lake, not a VAM unit. So, you know, we did the expansion in Clear Lake and VAM a number of years ago, so we feel really good about our current network in VAM. Do you think the prolonged Delrin divestment process contributed to some of the weakness in the Engineered Materials market? Yeah, you know, hard to say, but we haven't really seen that that's been an impact at all in terms of impacting the VAM market. Thank you. Thank you. We've reached the end of our question-and-answer session. I'd like to turn the floor back over to Brandon for any further closing comments. Thank you, Kevin. We'd like to thank everyone for listening in today. As always, we're around for any follow-up questions that you have. Kevin, please go ahead and close out the call. Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.