Good day, everyone, and welcome to the first quarter 2024 Eastman conference call. Today's conference is being recorded. This call is being broadcast live on the Eastman website, www.eastman.com. We'll now turn the call over to Mr. Greg Riddle of Eastman, Investor Relations. Please go ahead, sir. Okay. Thank you, Lydia, and good morning, everyone, and thank you for joining us. On the call with me today are Mark Costa, Board Chair and CEO, William McLain, Executive Vice President and CFO, and Jake LaRoe, Manager, Investor Relations. Yesterday, after market close, we posted our first quarter 2024 financial results news release and SEC 8-K filing, our slides, and the related prepared remarks in the investor section of our website, www.eastman.com. Before we begin, I'll cover two items. First, during this presentation, you will hear certain forward-looking statements concerning our plans and expectations. Actual events or results could differ materially. Certain factors related to future expectations are or will be detailed in our first quarter 2024 financial results news release during this call, in the preceding slides and prepared remarks, and in our filings with the SEC, including the Form 10-K filed for full year 2023, and the Form 10-Q to be filed for first quarter 2024. Second, earnings referenced in this presentation excludes certain non-core and unusual items. Reconciliations to the most directly comparable GAAP financial measures and other associated disclosures, including a description of the excluded and adjusted items, are available in the first quarter 2024 financial results news release. As we posted the slides and accompanying prepared remarks on our website last night, we will now go straight into Q&A. Lydia, please, let's start with our first question. Thank you. So please press star followed by the number one if you'd like to ask a question, and ensure your device is unmuted locally when it's your turn to speak. A kind reminder to please ask one question and one follow-up only. Our first question today comes from Vincent Andrews of Morgan Stanley. Please go ahead. Your line is open. Mark, if I could ask you on the France project, could you talk a little bit about what you think the scope of the timing delay might be? It sounds like they're still committed to going forward there, but have some issues to iron out on the customer and the cost side. So what type of timing delay are we talking about, and what's your confidence that both those issues will be resolved? So good morning, Vincent, and thanks for the question. You know, overall, we're incredibly excited about the circular platform, excited about how we're operating the first plant, proving out this technology works, and have a lot of engaged customers, and also excited about, you know, Longview with the DOE grant, and that's a contract that gives us a lot of confidence. And we believe long term, the European market is gonna be structurally an extremely attractive market to serve. But there are sort of two issues we're working with that we mentioned in prepared remarks. There's a sort of regulatory uncertainty, and there's just, you know, continuing to do the work we always do in dealing with inflation and getting the CapEx number to where it needs to be, for a good investment. On the CapEx, you know, we feel good about how we can manage that. So it really comes down to customer contracts and EU policy. What I'd say is, the European Union has been far ahead of the world on recognizing both, you know, the carbon issues in this world of climate change and having aggressive policy that, and also recognizing that they've got a packaging waste problem like we do everywhere else, and wanting to have policy that really drives the brands, suppliers, the market to sort of address that packaging waste, which also includes a lot of carbon emissions. They developed a policy been that is quite comprehensive, that has some reduce and reuse goals that will be sort of help the problem, but really focused on how do we get all of this material recycled. It's still being finalized, but they've got aggressive, you know, targets like 25% content in beverages next year in 2025, and everything being at 30%. Very high local recycling rates required in Europe. EPR taxes on people who don't do it, strict definitions of what is a recyclable polymer, et cetera. So all that is, you know, I think is headed to be in policy and makes sense. But there's one - there was one recent change that created some uncertainty on how the brands can achieve the recycled content targets. You know, there's a problem they face, especially, you know, as you go from this year to next year, which is they're only recycling about 12% of PET back to bottles at the food grade level. They got to be at 25% next year, so they, they, they will struggle to achieve that, pretty significantly. As well as there's some WTO issues that come up around imports. And so they changed the policy, from requiring everything to be made from local material to allow imports to be included. Now, they put a bunch of restrictions on what imports would, would qualify around, how it's being made from a sustainability point of view, as well as quality standards. There's still a lot of complexity in trying to understand that, but, you know, it would probably make it very difficult to import from most countries in these equivalency requirements. And it really creates a huge amount of complexity, both for the implementation of policy as well as, and achieving the goals of high recycling rates and really issues around consumer brand equity when you're using imports, right? Because if you bring imports into the country, you're replacing local demand for recycling, which increases incineration, which also violates, you know, the carbon emission goals of the European Union... The recyclability targets, which is, you know, your material considered recyclable, requires a very high recycling rate in the European Union, which is also a problem. And then consumers, you know, don't want to be solving China's waste problem. They want to see policy driving up recycling locally, to address the local problem. So this, you know, creates some uncertainty and really goes back to why we had the circular, you know, contracting model of, you know, we're in this business to be a service provider to the brands to solve their plastic waste problem. We're not getting back in the commodity business, so, you know, we're sticking to our guns as we've told you we would, around long-term take-or-pay contracts, you know, that provide stable margins. And so we're still highly engaged with customers, they're still very much working with us, but this has slowed down the discussion on how to structure these contracts in this market context. I'd also note that we are targeting a lot of applications that can't even use mechanical recycle material, because the performance requirements in the package, and long term, you know, mechanical recycling won't work anyway, 'cause it's gonna degrade without chemical recycling sort of keeping it refreshed. So, you know, we're very confident in the long-term market structure. We believe this is a facility that should get built, but we gotta stick to our milestones and our requirements around getting the contracts in place like we told you we would do. Okay, what about on the cost side of the equation? You seem like you're still working on that as well. I mean, inflation, I think, has been an issue for every project out there that I've seen, you know, in our industry. You know, the supply chain crisis has driven up the cost of everything from labor to equipment, et cetera. So, you know, all projects have had some amount of escalation to it. You know, we have a good plan to get the capital to where it needs to be on the Longview plant, and we have developed a plan on how to get the capital down on, on the French plant. But it's gonna take a little more work on some of the elements of, of doing that. And so while we're working on getting these contracts, we're taking that extra time to, you know, continue working on reducing the CapEx. We feel that we have, we have a pathway to manage that issue. Okay. Thanks very much. Appreciate it. Yep. Our next question comes from Aleksey Yefremov of KeyBanc. Please go ahead. Thank you, and good morning. Mark, just to follow up on this, do you have any idea to what degree this delay in France could maybe help you load Kingsport's facility for specialty applications? So, you know, we have, we have a lot of different flexibility. That's the beauty of how we manage all of our polymer lines in how we optimize value. You know, today we do it from Tritan to copolyesters to, you know, medical PET. And, you know, every line we ever build, you know, the ones in France as well as the Texas project, we'll have the flexibility to make both PET and specialty products. So, you know, we're always gonna be optimizing value and mix. That's the heart of our, our business model, and we're very good at doing it. So in that sense, it doesn't really matter which project gets built first. You know, we'll sort of optimize value between specialty and PET as we sort of build out sort of our global position. The first plant, you know, is already very much focused on specialty applications, so we'll be driving into, you know, Tritan, into cosmetic packaging, into shrink packaging, into a variety of different applications, and levering that up. And there's things we're working on to expand and extend the capacity on the first plant as we get it up and running, while we sort of work on building the second and third plants. And so whichever plant gets built first, you know, between Texas and France, you know, we'll optimize value between, PET, which we have the contract with PepsiCo on, and specialty, to maximize value, as we build out the portfolio. Thanks, Mark. And, on the annual guidance, you know, nice beat in Q1. You have just a lot of details in the press release. But in general, strong start of the year, why not raise the full year? Did anything change in the rest of the year to keep the guidance the same, or is it more conservative than anything else? It's more the latter. We're very proud of the beat we had in Q1, and the fact that it was volume driven, which is the key element of the challenges we had last year, frankly, the whole industry had last year. To see that volume come back better than expected, you know, gives us, you know, confidence, especially because it came back in the specialties, you know, which is where our highest value is generated for the portfolio. So we feel good about that, and as you look at our guidance, you know, clearly, we have confidence in AM and AFP, and we have confidence in fibers, you know, doing better. CI is always, you know, a little uncertain. But the main reason we didn't upgrade the range is, you know, it's the first quarter. There's a lot of macroeconomic uncertainty out there, a lot of geopolitical uncertainty, you know, that we're all living with every day. And we wanted to really stick to our approach in general, which is this is a economy-neutral forecast, right? We're not projecting fundamentals getting better in the back half of the year to deliver, you know, this range. We're also not projecting fundamental—you know, market—you know, underlying demand is gonna get worse, you know, in the back half of the year. We're saying it's neutral. If you believe, you know, fundamentals will get better, you know, in the back half, then there would be upside in our forecast. If you have concerns about geopolitics, then there's some sort of—there's risk to the midpoint of our forecast. But at this stage, I think it's just prudent to be a little cautious until we see how things develop. Thanks, Mark. The next question comes from Duffy Fischer of Goldman Sachs. Your line is open. Yeah, good morning. Can you just give us some more details around the methanolysis plant that's been running, let's say, for a month now? You know, I'm sure some stuff you can't, but, you know, things like, what's the premium looking like? What's the breadth of feedstock that you've been able to run through? You know, maybe just kind of an update on how the plant's running and how you'd expect it to ramp from here over the next couple quarters. Sure, Duffy. It's great to get that question because we're really excited about having this first plant up and running. You know, this will be the world's largest chemical recycling facility, and we're really excited to show the world what's possible, not just in generating earnings and growth for our owners, but in solving a pretty significant environmental problem. And we're really excited, you know, that we're on spec with the material, and we're serving our customers. It's pretty amazing when you look at, you know, basically garbage going into the front of the plant and sort of on-spec material coming out the back end. And it is a very complicated technology and plant. So it is nontrivial to start up, you know, compared to if you're building a commodity asset. The good news is that we have, you know, fully confirmed that the process chemistry works, which was always the, you know, biggest question that I think people had, and we can confirm that's working. We've validated all the unit ops are functioning as designed and can run continuously. So we feel really good about the sort of design and the structural aspects of the plant. The challenge has been, you know, just on getting the plant to run reliably, and we're certainly, you know, about four weeks behind schedule, as we mentioned in the prepared remarks on that front. And really, you know, we're still focused on reliability, so we haven't moved into a broad feedstocks slate or ramped up the capacity a lot until we've actually addressed some of these mechanical issues. So all the issues we're facing have nothing to do with the process chemistry. It's literally mechanical issues. Some of it was in the beginning, construction errors, so leaks and improperly installed equipment. We believe we've addressed most of those issues, actually, all of those issues at this stage. Then there's been sort of a more than normal early failure of some pieces of equipment like instrumentation, valves, and some other equipment. This is not unique to us. We see all of our peers having the same challenge, you know, globally, where just equipment wasn't as made as well as we would hope in this supply chain crisis. And we're all sort of dealing with these kind of sort of annoying little issues. They're simple to solve, but they just slow you down as you have to sort of pause to address them. And we've also had some reliability issues on rotating equipment, especially pumps. And that is a little more complicated. It's a mixture of quality of construct, you know, quality of assembly, some design issues, and some operating learning. We've done a total root cause analysis on that. Feel we have a very clear understanding of what's causing it, and we're very close to completing all the actions we need to address those issues. So I'd say from a mechanical point of view, we feel very good about where we're at. The plant's running. Our priority right now is serving customers, which we're doing. And we're just, you know, in the phase of ramping up production and sort of, you know, expanding our feedstock slate to sort of, you know, try out those issues. But 70% of the output of the plant is a monomer called DMT, and that's always clean, no matter what. So the process chemistry around sort of yield and impurities really is just about EG, which is a smaller part of the plant. So, you know, as we ramp up, test that other material, we feel very good about supplying customers this year, 'cause their demand that we're projecting is not close to capacity of this plant. And so we've got, you know, plenty of plenty of ways to keep them served and supported. So we still feel good about the $75 million of EBITDA that we've got out there as having a pathway. It's obviously a little more challenged with how we've had a slower start. But we feel good that we can achieve it for the year. What I'd say as far as progression goes, our plan was always to do what we're doing right now is run at a steady state to make sure mechanically everything's fine. Then you ramp up, as well as start broadening the feedstock, which we'll be doing through this next quarter. So we'll have you know, a lot more to tell you about that when we get to the second quarter call. Great, thanks. And then in the market, it seems like there's been an inordinate number of PDH unit issues over the last couple quarters. Maybe just bigger picture, how has that impacted your business? You obviously take a lot of propylene, make derivatives, but are you seeing that as a positive or a negative across your whole portfolio? Well, first and foremost, the sort of propylene derivatives are predominantly gonna show up in CI, as far as the value goes. But there are, you know, propylene derivatives that go into, AFP as well as AM. So, you know, there's parts of the propylene stream that goes across the whole integrated complex. When the outages occur, and the price of PGP goes up, you know, that's good for us, obviously. But it's always a question of how does PGP move relative to the price of propane? You know, that gets us to, you know, that spread. And through the first quarter, you know, we certainly saw PGP move up, but we also saw propane prices come in much higher than expected. So those sort of netted out to some degree. And as we go into this quarter, you know, those spreads look like they're gonna contract a bit from the first quarter, you know, with the way PGP prices have come off as outages have been resolved. So it's, you know, the nature of, you know, these olefin businesses where there's a certain amount of up and down and spreads and, and, you know, that's just factored into our guidance. Great. Thank you, guys. Our next question comes from Frank Mitsch of Fermium Research. Please go ahead. Thank you. Good morning. Mark, I do appreciate the color on what's going on in France, and I'm trying to reconcile how the consumer brand companies are out there. They're making promises about what percent they're gonna have recycled by what year, and reasonable minds believe that they're not gonna hit those targets. So here is an opportunity to get on board with a, you know, recycled content with you, and yet it seems like they're waiting for government subsidies or mandates or something before they sign contracts. I mean, it almost seems hypocritical on their part in terms of making these statements. So it begs the question, how committed are they in terms of recycled content? You know, given where we are right now, how do you feel about the potential of, if things don't work out the way that you anticipate, walking away from the France project? Hey, Frank. So one, every customer we have that we're meeting with, I think is highly committed to addressing, you know, the recycled content question, and making sure that they're making their packaging, with higher rates of recycled content. And frankly, many of the top brands have 100% goals on a lot of their packaging. They're, you know, they're way above any sort of regulatory policy that's out there. So I don't think there's any lack of commitment, that they know this is important. I do think there's a reality, which is there is a significant lack of recycling infrastructure in this world and, you know, in mechanical recycling today, and I think most of the brands understand that a lot of what they do in packaging, mechanical recycling, won't even work properly. So the need for chemical recycling is absolutely necessary, in the long term. There's just I haven't run into anyone who thinks that both mechanical and chemical aren't necessary. So demand condition is very clear. The question is: How do they meet those conditions, right? And you know at the moment you know there you know there's been a ramp up, if you go look at the data of you know imports of rPET you know into the U.S. and Europe that is affordable, and that's a way for them to manage costs and hit their targets in the short term. You know the dilemma for that is it doesn't really solve the actual problem, which is you know U.S. consumers, European consumers want the waste out of their environment, right? They don't want to be a solution to China's trash problem, right? So they've got to work their way through that, on the economics versus what the real goal is, which is addressing local recycling. So as they're sort of in this situation of, you know, where rPET prices are relatively low right now and imports are available versus the long term, which regulation is certainly gonna drive a requirement for higher recycling rates within the U.S., within Europe, how do they sort of make those choices and decisions? So it's just taking us longer to work through these contracts. I'm confident in the end, you know, these brands will focus on what is the correct thing to do for the U.S. and Europe sort of waste issues. It's just taking us longer to negotiate the contracts than we expected. I appreciate that. I mean, it seems like a slam dunk. You guys seem to be the best game in town for them to get to that chemical recycling, which is superior to mechanical recycling, and yet, you know, it's taking a little bit slower. Just one other question in the prepared remarks. You talked about a Patagonia partnership where you're recycling its unusable apparel. Unusable apparel, what is that? Is that like off-spec products? And is this something that... can you provide a little more color on that? And is this something that you're looking to expand with other consumer brands? It's a great story, and Patagonia is by far the leader, like, like Europe around, recycling. Patagonia has a take-back program. So it's an active program with their customers, to say, "When you're gonna-- instead of throwing your garment away, your, you know, fleece vest or whatever it is you have, drop it off at a store, and we'll take it back, so it doesn't end up in landfill." So it's actually a circular, you know, a genuine circular program to prevent, you know, textiles being thrown away. The second largest, you know, source of plastic waste in landfills or incineration are textiles after packaging. It's a huge problem. And so they are truly forward-leaning when it comes to anything environmental, way ahead of anyone else, and they really do their science on it. So they're taking back all these garments, and then we're shredding them and recycling them, and putting it back into fibers, in this case, Naia fibers, for some of their products. So it's a genuine, you know, circular, for the textile industry. So it's a program we certainly want to expand and do with other companies. If you think of all the fashion brands out there, where their whole business model has been centered on buy things, you know, and then throw away and buy new things, you know, with the regulations that are coming in Europe around, you know, that waste, which is the next round after packaging regulation, as well as the consumer pressure on waste, you know, that exists here as well, this is another great circular story. And we can, you know, take ultimately this, this back into the, our CRT to make Naia fibers, or we can take the textile back into, the polyester plant to make, you know, polyester fibers, chips for polyester fibers. So, it, it gives us a lot of opportunity to work on there. These are complicated programs, so I wouldn't say that the volume is gonna be particularly high anytime soon. But it is a model that has to be developed to build a future where we have, you know, waste out of the environment. And with the new technology, when you think about the Texas project, you know, 90% lower carbon footprint, almost close to a zero-carbon footprint plant, and that's extremely compelling, you know, not just on the waste side, but on the carbon- decarbonization side. So we're very excited about what we can do for the marketplace. ... Very helpful. Thanks so much, Mark. Yep. Our next question comes from David Begleiter of Deutsche Bank. Please go ahead. Thank you. Good morning. Mark, on the Longview project, if you could reach FID in Q3, what's the timeline from there for construction and startup? Yeah, that would have the plant sort of coming online in the second half of 2027. Would the cost-- How would the cost compare to, to Kingsport? The capital costs are different. The, you know, the methanolysis unit, it will be much cheaper than the Kingsport plant to build because there's a lot of sort of, lessons we learned as we've shared in past calls around, how to sort of be more effective in building a plant, right? So we, we certainly don't intend to, you know, have the, the construction issues that we ran into, and there's a lot of learning, both in the construction, as well as operating the plant now, that gives us, much better insight on how to, you know, improve, some aspects of the plant, all of which will make the plant, you know, cheaper to build. So, you know, we feel good about that, that part of the plant coming in lower than, than Kingsport, by a meaningful amount. But the difference is, Kingsport had a huge amount of polyester lines and all the infrastructure for handling you know, materials, into the plant and out of the plant that we could leverage, as well as energy infrastructure that was already in place here, that was leverageable. We didn't have to add energy and steam infrastructure. So when you go to the Longview plant or the France project, you know, the methanolys is one part is cheaper, but you're adding polymer lines, you're adding and you have a lot of infrastructure you need to build around this facility that doesn't exist in either of those locations. So the total capital cost turns out to be higher. Fortunately, we've got great incentives, you know, with the DOE grant, that $375 million is, you know, extremely helpful in supporting the economics of the project, offsetting inflation, and paying for this add of scope that we did to the plant, with this thermal battery and solar facility that allows us to get to that 90% reduced carbon footprint I mentioned. And then the French plant, same thing. You know, it's cornfield, so there's infrastructure you're having to add that's, you know, sort of more. And there you've got a biomass steam plant you're building, as opposed to leveraging existing energy infrastructure, you know, at the Tennessee site. So you know, it is each project is quite different in scope, in what it's building, and both projects have a lot of incentives to support it. We haven't disclosed the full amount from France, but it's an attractive amount of support as well. I mean, I have to say, the French government, through everything, has been incredibly supportive on incentives, on permitting, you know, helping make sure the policy, you know, makes sense in Europe as much as they can. So we really appreciate all their support and everything that they've done to enable that project. Mark, if I could ask, just on fibers and obviously strong top line driven by Naia, I read your prepared comments. How should the top line trend in fibers as we move through the rest of the year? I think that the fibers trend from a volume point of view is a bit less in the back half of the year than the first half. So, you know, volume and earnings will be a little bit less in the back half of the year. And it's just timing of customer orders. It's sort of, you know, normal. We've always talked about this business. The order pattern of the customers is a little bit unpredictable across the year. So it's just that. But the textile s side will continue to grow and provide, you know, earnings growth. The tow volume, you know, will obvious-- as I just said, will come off a bit, and the back half will be a little bit lower in the first half. Thank you very much. Our next question comes from Jeff Zekauskas of JP Morgan. Your line is open. Thanks very much. What's the depreciable life of the Kingsport methanolysis plant? Hey, Jeff, good morning. The depreciable life, you can just think about around 20 years for the Kingsport facility, and honestly, that would be true for each of the large circular recycling plants that we're building. Great. And in terms of the volume growth in the quarter, Additives and Functional Products shrank 1%. Which of the subcategories declined in volume in the quarter? And in Advanced Materials, where you were up 4%, how would you compare what happened in specialty plastics to interlayers to Performance Films? Did they all grow? Did some of them shrink? Sure, Jeff. And nice compound question. You got two segments in one. So on AFP, the—we were sort of net, net down 1%, which I call mostly flat. And there are meaningful moving parts in that, Jeff. Coatings and care chemicals actually had, you know, very good growth, sequentially, you know, into the first quarter. And then we had much lower, especially fluid fills and heat transfer fluids. And those two sort of offset each other. Ag was its own unique dynamic, right? So year-over-year, you know, there's still de-stocking relative to last year, so demand's down. But we did see, you know, more than expected sequential improvement in Ag demand from Q4 to Q1, which was, you know, just less. You know, it turns out they didn't need to destock as much as they thought. They had confidence about the Ag season this year. So in North America, you know, I would say destocking is over. There is still some residual destocking, you know, in competitive dynamics for our customers, not us, but for our customers going on in, in Latin America. So there's still some, some of that destocking to come to an end, you know, in the future. But the vast majority of our business is focused on North America. So for us, you know, we're feeling pretty good about the Ag business and how it's-- how it played out. Regarding AM, we had, you know, a very strong recovery in the durable space. So sequentially, sort of durables were up 15% from Q4. They were up significantly relative to last year, so that was a great improvement. We saw also shrink in cosmetics, sequentially grows, you know, shrink up 15%, and cosmetics also have a good sequential growth. So those were all good, but there's still a lot of destocking, offsetting some of that growth in medical that's still going on. And there's a tough comp on the performance film side. Last year, we had a very strong loading of channels in China, orders. And with the auto markets basically being flat globally, but down in China, you know, the demand was not nearly as good in Performance Films this year as it was last year, you know, against that tough comp. And, you know, the interlayer part was sort of flattish with builds. Okay, great. Thank you very much. Our next question comes from John Roberts of Mizuho. Your line is open. Please go ahead. Thank you. Sounds like the new Kingsport plant at the EBIT level will be modestly above break even in the second half. Do you still expect to get to corporate average or higher EBIT margins for that facility? And, what happens with the other segment here as Kingsport moves out of other, and you begin spending on Longview? Morning, John, and, thanks for the question. Just as a reminder, as we've highlighted earlier, we're on a pathway to the $75 million in incremental EBITDA. I would point out, obviously, in, 2023, we had a net investment, in the other of... and an expense of roughly about $25 million. So you can think about EBITDA growing from, you know, roughly consuming 25 to about 50 positive for the year. As we've highlighted, it took us a little longer, to start up here in Q1, and that's the reason that other, you know, ran over on, on the EBIT view. As we transition in the second half, we expect, you know, mostly, all of the EBITDA growth to occur in the second half, and, that'll be primarily within Advanced Materials, and that's also why you see our confidence in the range that we provided for AM overall. As I look at it, in total, you know, basically, the EBITDA is still about two-thirds Advanced Materials, one-third, and other for the full year. On the margin basis question, I would say, it's above segment average margins on both EBITDA and EBIT basis in Advanced Materials. Thank you. The next question comes from Kevin McCarthy of Vertical Research Partners. Your line is open. Yes, good morning, and thank you. Just to follow up on Advanced Materials, Mark, nice to see your quarterly results, and I guess if I look at the annual guide, you're looking for a 40% growth rate at the midpoint versus 2023 annual EBIT for AM. So maybe just if we zoom out the lens, your last couple of years have been kind of dislocated for that business. You're now seemingly coming back and regaining traction into a better place. What is your view of the likely growth rate, or how do you see the puts and takes for that segment over the next couple of years? Yet you had a few years where you did north of $500 million. Now you've got some methanolysis related, you know, earnings flowing into the segment, as was just discussed. So how do you see the glide path for AM, you know, in 2025 and 2026? Maybe some color there would be helpful. Sure. So first of all, you know, we're, we're extremely happy to have Advanced Materials back on a track of sort of recovering out of an extremely bad demand environment, and getting back on track to deliver, you know, very attractive growth and very attractive margins, for, for our owners. You know, at the end of 2022 and 2023 was obviously sort of the worst demand environment we've ever seen. When you think about how demand came off, and we had over 5 quarters of destocking, along with very low demand in, in all the discretionary markets, whether it be, you know, B&C or durables, and, you know, or even destocking in great markets like medical. I mean, we, we literally didn't—every market destocked out except for auto, you know, through the entire year last year. So the volume mix headwind, because those were also the highest value markets, was pretty significant. So getting volume back, which is just destocking this year. Remember, we're not forecasting any improvement in this forecast for end market growth in the discretionary markets. You know, we're gonna, you know, as we've guided, start recovering earnings in a pretty substantial way versus last year. So as you look forward into 2025 and 2026, you know, we believe we'll certainly get back above where we were in 2021, and continue to grow from there, right? So we don't have any market growth yet in this outlook for this year. So that's upside as the markets, you know, stabilize and recover. You've got just getting started on the Kingsport methanolysis plant, where the asset utilization is quite low and the volumes, you know, are, you know, not that high this year. So you've got the fill out of that plant, creating a lot of value so that, you know, can take that $75 million-$150 million of EBITDA, and that still has additional upside from there, but that's just in 2025. You know, we've got wins going on in our traditional innovation model in other parts of specialty plastics that's creating growth. We've got circular economy-driven growth in eyewear with our, you know, Renew, recycled loop, you know, for all the eyewear companies. And you've got automotive continuing to deliver innovative growth above market. They'll do that this year, and they'll keep doing that as we go forward. So you've got all these different sources of volume growth that help, you know, get back above 21 and keep going. You've got asset utilization tailwinds that will come with this, especially the methanolysis plant, you know, which is a pretty large chunk of new cost into this year relative to, you know, last year, and then leveraging that. I would say on the spread side, I would assume things to be relatively neutral. So, you know, we got our margins to an attractive level to support investment in this business, you know, from some of the challenges that we had, you know, as we caught up to inflation. And, you know, prices will probably come off a bit over time, in line with how raw material and energy costs are coming off a bit. So I would say, you know, as you think about the modeling, you know, I wouldn't assume an expansion or contraction in spreads. I would assume that we've got attractive margins now, and you're leveraging all that volume against those margins to create pretty attractive earnings growth. Thank you for that. Then just as a brief follow-up, I think your commentary cited some new application wins in Advanced Materials. What are those, and do you see yourself as gaining share relative to competitors and broader market growth rates? Yeah, the model of this business has always been, you know, growing above end markets because you're winning in applications relative to some other material, right? And that's been true for Tritan forever, as well as other copolyesters. So, you know, I'll just give you a couple examples. One, we're growing a lot in hydration bottles in China. Wasn't a market for us, you know, they're using Tritan, and we're seeing growth, you know, in those kind of products. You know, we're seeing, getting into a broader set of applications with BLACK+DECKER on their tools. Their first launch with, Tritan was really successful, and now they're expanding into a broader set of tools. We have a new product for shrink packaging that's patented, that is a recycle code one product. So it's fully recyclable, where the historical products were not. So that's gaining a lot of traction for us, both in volume and margin, you know, as we just win, you know, with a more recyclable product. You know, obviously, recycled content would add more value to it. You know, so there's always these wins we have in all kinds of places in the portfolio, that sort of has allowed us to deliver attractive growth. And, and as much as we're very excited about methanolysis, and that is a huge priority of capital deployment and innovation effort, you know, we wanted to remind investors that, you know, our core model is still active in winning business every day, and we're adding, you know, methanolysis on top of that. Thanks, Mark. The next question comes from Patrick Cunningham of Citi. Your line is open. Hi, good morning. You know, you seem to be fairly confident that we're, you know, reconnecting to primary demand levels here. Do you get the sense that any of the volume improvement in the first quarter, you know, came from maybe some modest restocking? I know I've heard the potential that that's happening on, you know, from paints and coatings producers, or maybe there's people, you know, building safety stock ahead of geopolitical disruption. So I'm just wondering if you've seen any of that in the first quarter and expectations, you know, into 2Q. Yeah, I'd say, you know, on the margin, there's probably a bit of restocking that's occurring. I mean, it's almost impossible to really know the answer to that question. You know, when you get into destocking or restocking, you know, your customers are not exactly that clear on what's going on. But I can definitely, you know, point to a few examples where, you know, Red Sea logistics concerns has caused some customers to, you know, buy ahead of that risk, in a few places, as an example. But, you know, at this stage, I think it's really hard to call, you know, lack of destocking, a little bit of restocking, or maybe even a little bit of market growth. I mean, there's just no way to know precisely, you know, what that is. But I can tell you it's not a material driver of our earnings at this stage, based on what we know from the customers. We're not seeing large orders come in, where people are restocking in some sort of noticeable way. Got it. That's helpful. And then just on the expanded scope for the Longview facility, you know, is the funding you're receiving there from the DOE simply just offsetting that expanded scope? And how should we think about economic returns, you know, given this expanded scope, and would you expect additional premiums, or maybe are we reliant on, you know, some price for carbon abatement in the future? Patrick, thanks for the question. The DOE program, as it's designed, basically provides a series of cash payments, you know, based on what we negotiate there, that, you know, basically is providing an investment offset to the CapEx as we move along. So yes, it is, the way I look at it, is a direct offset to the capital. Basically, it'll be progress payments across the, you know, the almost three years of construction. So you've got that matching, and it's up to $375 million, as we've talked about. And we're currently negotiating those exact terms of the award, but we're targeting to have line of sight to that over the next 3-6 months. It is definitely an offset to the additional, you know, as we talk about thermal batteries, as we think about the green energy source, that this will offset that, as well as the additional inflation on that. So, it's back to, you know, the, and we're confident that we'll have greater than 12% returns on the project. I think it's too early to tell on the sort of premiums associated with decarbonization. It's very clear people are willing to pay premiums for recycled content. You know, it's very like product safety, plastic waste in the environment is a very emotional issue for consumers, and they're really, really not happy about it. And so they're not happy with the brands about it, and they're putting pressure on their politicians to address it. You know, carbon, you know, is still not exactly clear what premiums people are going to get for just decarbonization. So I think there's, you know, upside as, as there becomes a cost to carbon, you know, as policies start getting implemented on that front. But we're not assuming any premiums associated with the carbon side of things in our core economics. But we are gonna, we are, as we go forward with this project, now that it's very compelling, see, you know, what the value is with consumers on that front. I mean, with the brands. Great. Thank you. The next question comes from Josh Spector of UBS. Please go ahead. Yeah. Hi, good morning. I had two questions I wanted to ask on volumes. So, you know, on my math, when I look at the first quarter, volumes versus 2019, it appears to be your easiest comp. You were up 3% year-on-year. So the first piece is: how do you think the year-on-year comps on volumes progress through the year? Do you do better or worse on where that comp is versus the 2019 baseline? And related to that, I guess there's a lot of choppiness in some of the numbers. Where would you say your core volumes are in your plan for the year versus 2019? Thinking about that in terms of, you know, what's the benefit if you see a stronger demand improvement or a full reconnection versus just improvement. Thanks. Sure. So, you know, I think it's easiest to sort of separate our revenue portfolio between what are stable end markets and what are sort of discretionary markets. The stable end markets, you know, have consistently sort of grown through the through 2019 to now at very modest rates, you know, call it 2%-3%, whether it's, you know, medical, personal care, et cetera, those kind of markets. But there was a dislocation that even in those markets, there was destocking last year that played out, depending on the on the market, one, two, three quarters to sort of finish their destocking, you know, in in in those in those markets. And then they've reconnected back to sort of demand and are growing again, which is true for this year. Medical being sort of the worst... Ag and medical being the most stable markets that had the biggest in destocking because of, you know, fears of not having inventory in 2021-2022. On the discretionary markets, you know, as everyone knows by looking at housing data or, you know, automotive build data, a little harder to see it, but, you know, appliances, electronics, et cetera, same story. You know, demand is, you know, relative to 2019, not great. You know, we're at a 28-year low in existing home sales in the United States. You know, B&C construction in China is off, you know, dramatically still, and also off a lot in Europe. So B&C prior demand is, you know, extremely challenged. You know, when you think about the materials world, you know, existing home sales to Eastman is more important than new homes because of all the appliances, electronics, you know, more painting, et cetera. So that market is very challenged. It will come back. It's obviously, I don't think, coming back this year, but that's upside to getting back to what is normal from where we are now and then growing from there. So there's a pretty big gap there relative to 2019. When it comes to auto, same thing. You know, there's a huge, you know, backlog of increasingly older cars that need to be replaced around the world. And, you know, first, it was semiconductors, you know, limiting the ability for consumers to buy cars, then interest rates now slowing down the rate of buying cars. But, you know, the demand for that will certainly recover and be a, you know, significant amount of upside for us. Same thing with durables. You know, big shift to service lifestyle, post, you know, COVID. At some point, people will rebalance back to some blend of, you know, buying material, you know, discretionary items and, you know, seeing Taylor Swift. So, you know, I think that all those, you know, are still well below sort of, you know, 2019 levels in one form or fashion, relative to where they should be. So as you look at this year and the way our guidance is built, all we have is a lack of destocking, some innovation-driven growth, you know, starting to deliver real value out of methanolysis, stable markets being okay. And all that recovery that I just described is upside to 2025 and 2026. I'm not about to tell you which year it's going to happen, but, you know, there's certainly a lot of upside, and places that are most challenged are also our highest value markets from a, you know, variable margin per unit basis. So, as those markets went down, it was a significant headwind. As those markets come back, it's gonna be a significant tailwind. Thanks. So I appreciate that. I guess if I try to wrap that all together, I mean, I struggle with if your volumes for 2019 versus 2018, are you flat? Are you down high single digits, just considering the two offtakes? Is there a way to quantify that at all? You know, I don't have that answer for you, and that at a sort of integrated company basis, we look at everything on a market-by-market basis. And so, you know, what I told you is sort of how to view it. Half the revenue is very stable and growing, half the revenue has a huge amount of upside at very high value. Got it. But I'm not going to try and quantify that on a weighted average basis. Okay. Thanks a lot. Our next question comes from Laurence Alexander of Jefferies. Please go ahead. Hi, given the feedback you're hearing from customers around the recycling plants, you know, now that you've started one up and you're making progress on the next two, and also kind of that consumers increasingly see that alternatives are available, is that changing the way you think about your, you know, managing the balance sheet and the cadence of projects over, say, the next five, seven years? I don't think so. I just want to make sure I understand the question correctly before I try and answer it. You know, we have the normal core business that has maintenance, right? So there's always CapEx around that, all right? Call that in the $3 million-$350 million range. And then there's always special investments we're making in growing our capacity to serve all the different specialty markets we have, you know, which has always been part of our core model. And that takes you to, you know, with maintenance, $500 million-$600 million range on CapEx. When you go beyond that, then you're starting to make choices around: how much am I doing in share repurchase versus how, you know, I'm deploying capital to the circular economy? Obviously, we've got one plant behind us at this stage, so there's a question of, you know, when you build France and Texas, how do you stagger them? Were they gonna be right on top of each other, you know, and how the CapEx for those two programs, net of incentives, you know, sort of add together, and you know... We believe we have a balance sheet and a cash flow in place to fund all that, so we don't have to take on debt to do it, just to answer that question. You know, how we're gonna, I mean, by just nature, I think, as opposed to intention, these projects will end up staggered one way or another. It would be extremely unusual if they both start at the same time, just based on getting permits and contracts and everything else. So they'll be staggered, to some degree. That's all factored into our analysis about how we work through 2025 and 2026. I don't know if you want to add to that, Willie. Yeah. So what I would just say is, we're confident that we can keep a strong investment-grade balance sheet through that. You're seeing that as we update our guidance on capital this year of being $700 million-$750 million and expecting share repurchases of $200 million-$300 million. And as Mark has outlined, we've always been agile between, you know, our growth investments and then using any excess cash for bolt-ons and then returning cash to shareholders. We will continue to be disciplined in that capital allocation, and we expect to generate the cash flow to fund our strategy. Thank you. Our next question comes from Mike Sisson of Wells Fargo. Please go ahead. Hey, guys. Nice start to the year. Mark, when you think about, you know, maybe a 2026, 2027, sort of longer term earnings potential, your methanolysis facility in the U.S. is ramping up well, it sounds like. And if you add that, the potential scale up there plus potential volume, is there sort of EBITDA potential you think you can get back to or get above? I think you peaked about 2.2 in 2021. Just, you know, framing up what the earnings potential is if volume does recover over the next several years. Yeah, Mike, let me start with, last year, we had $1.6 billion of EBITDA. This year, our guidance is, $1.8 billion. And, you know, what I would say, as we've talked about normalized, that's going to be, north of $2 billion. As we think about adding, you know, you know, $150 million-$200 million for the Kingsport plant, you know, that puts us, in, in that, $2.4 billion range. And then there's upside as we think about, you know, adding the Longview project and the France project on top of that. But we're obviously highly focused right now on, delivering the growth in Advanced Materials and Additives and Functional Products with the investments we've done to date. As Mark just highlighted, from an end market, you know, ultimately, we're leveraged to a recovery in the economy now that the stocking is substantially behind us, and that's what we're focused on delivering. Yeah, and if you do look at it on a historical comp basis, it's more compelling because we sold off, you know, $175 million of EBITDA in adhesives and tires and used the proceeds of that to reduce share counts, you know, basically, neutralizing what we sold off in the EBITDA. So when you get to an EPS level, the leverage of that EBITDA number that Willie just told you is much more significant, you know, on EPS and stock price basis. Great. Thank you. Our next question comes from Arun Viswanathan of RBC. Please go ahead. Great, thanks for taking my question. I have a similar question to Mike here. So if you think about your bridge to EPS, looks like you're on a path to do about $3.60 or so in the first half, and that would imply about $4.00-$4.40 for the second half, depending on where you land in the range, the midpoint to the upper end. And so, you know, that $4-$4.40, maybe if you annualize that for next year, that's $8-$8.80, which would kind of fall in line with your maybe 10% EPS growth targets or 8%-12%. Is that how you guys are thinking about how you kind of progress from here? And if that is the case, would that be mainly kind of volume recovery and maybe some methanolysis? Or how are we thinking, you guys are feeling about, you know, kind of where you are in the evolution here with the return of some primary demand and some volume growth? Do you see that target of 8%-12% EPS growth back in view? Thanks. Yeah, I think, I think you framed it well, and I think it fits into the end market lens and the leverage to the volume growth that we've seen since 2019, which is, it's basically been roughly flat to slightly negative since that timeline at the corporate level on the volume mix line. With the combination of Advanced Materials and the leverage we talked about how that volume mix drops to the bottom line with the fixed cost structure that we've had in combination with the growth. In the back half of this year, we see that leverage for the application growth as well as you know, the back half EBITDA growth for the methanolysis facility. When we look into growth in 2025, we've talked about another $75 million of EBITDA growth from methanolysis and the application wins that we'll have there, as well as, you know, we're at you know solidifying our contract structure on fiber, so you can consider that stable in this period, and we will have growth as Ag recovers, as building and construction recovers in AFP. And I would say we're at you know sort of trough levels in the intermediate space. So 10, 10% growth at the midpoint is reasonable as we go forward. I'd just add, AFP also has growth, where, you know, we're at exceptionally low level of heat transfer fluid fills this year. We have a clear order book to, you know, that $30 million drop from 2023 to 2024 to recover that as we go into 2025. Not to mention, B&C having any kind of market recovery would be upside. So there's upside in AFP, there's a lot of upside in AM, stability in fiber s, you know, CI is at the bottom of the market, so at some point, you know, start coming, you know, off of that and recovering from a spread point of view. So, you know, there's multiple ways you sort of combine that together to get to, you know, growth next year versus this year. Thanks. Let's make the next question the last one, please. Thank you. So our final question comes from Salvatore Tiano of Bank of America. Please go ahead. Thank you very much. So firstly, I want to ask a little bit about the France project and, you know, setting aside CapEx and regulations, how do you see the OpEx there? And especially because I think a couple of months ago, you signed an agreement with a recycling company to import PET waste from out as far away as Italy and Spain, which obviously it would mean pretty high feedstock costs. So does this mean that there could be that the France project may have elevated OpEx because of that? Firstly, and secondly, why so far, you know, you haven't signed agreements with for more domestic supply? Because I would think that in Europe, with their single-stream PET recycling, it would be the ideal location, and yet you still have to go, you know, as far as France and Italy to get feedstock. You know, this is a large-scale project, and aggregating feedstock from a wider range than just France, given the state of the current infrastructure in Europe for collection and sortation is the appropriate thing to do, right? France has a huge opportunity to improve in collections and sortation. It's part of why they want to really support this project. Currently, we have about 70% of our feedstock under contract, you know, which is a mixture of France, Germany, Italy, Spain, as you noted. Logistics costs were always factored into our economics, for this approach to the marketplace, so, you know, that's all built in. But the last 30%, you know, is not signed because we want to work with the French government and the local municipalities across France to sort of, you know, get that feedstock, you know, closer in as they develop that infrastructure. So that's sort of where we wanna go. That's why we're not signing up for any more from other places, 'cause we're focusing on how to get more out of France for that last remainder. But that's all built in, and the actual logistics cost per kg is not significant in the economics for this plant. Okay, perfect. Then the other thing I want to clarify is about what to expect for this year fibers volumes, because, you know, Q1 was down 7% sequentially. You talk about Q2 being similar to Q1, and then another step down in second half. So that pretty much seems to imply a very big annual decline, which I don't think is what we were expecting. On the volume, what I would say is, there's only... We've talked about Naia growing, and we expect that to grow on the base front. We would expect, I'll call it, flat to modestly down, but we also provide intermediates and flake, and we would expect that's where some of the volume would be declined. Yeah, on a full year basis, it gets a little complicated when you're doing looking at sequential and year-over-year numbers for this. The total volume is relatively flat to last year, when you look at it on a full year basis. Okay, perfect. Thank you very much. Okay. Thank you everyone for joining us today. I really hope you have a great day and a great weekend. Thank you. This concludes today's call. Thank you for your participation. You may now disconnect.