Good day, everyone, and welcome to the fourth quarter and full year 2025 Eastman Conference Call. Today's conference is being recorded. This call is being broadcast live on the Eastman website at www.eastman.com. I will now turn the call over to Mr. Greg Riddle, Eastman Investor Relations. Please go ahead, sir. Thank you, Becky, and good morning, everyone, and thanks for joining us. On the call with me today are Mark Costa, Board Chair and CEO, Willie McLain, Executive Vice President and CFO, and Jake LaRoe, Senior Manager, Investor Relations. Yesterday, after market close, we posted our fourth quarter and full year 2025 financial results news release and SEC 8-K filing. Our slides and the related prepared remarks in the investor section of our website, 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 fourth quarter and full year 2025 financial results news release. During this call, in the preceding slides and prepared remarks, and in our filings with the Securities and Exchange Commission, including the Form 10-K filed for full year 2024 and the Form 10-K to be filed for full year 2025. 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 fourth quarter and full year 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. Becky, please, let's start with our first question. Thank you. Our first question comes from Josh Spector from UBS. Your line is now open. Please go ahead. Yeah, hey, good morning. I wanted to ask two things on fibers here to start. First, you know, can you talk a bit more about the actions you're taking, how the shutdown impacts earnings through the year? And second, if you could talk about cellulose a little bit and your ability to pass through costs there if prices go up due to changes in supply behavior? Sure. And good morning, Josh. So fibers obviously is a top priority for us as we've been focusing on how we manage that business and stabilize it after what happened last year. Before I get into some of the actions we're taking in context of matters, and so I'm gonna just remind you of something we said before, where tow is certainly the largest driver in the drop in the volume, and we held prices actually relatively well in spreads last year. But that about 40% of the EBIT drop is actually not tow, right? So you've got about a $30 million decline that was tariff-driven in the textile business, where normally that's growing to offset market decline in tow, instead, it reversed in the negative direction with all the tariff pressure and consumer pressure. The second was the overall stream, you know, slowed down because of, you know, reduced demand across the company using cellulosics, and that was about a $20 million headwind, and utilization and energy costs were about $50 million higher. So there are multiple levers, tow plus everything else in this portfolio that matter. When it comes to the tow side of things, we feel good that we've stabilized the volume situation this year relative to last year in our contracts with our customers. That did include a bit of a modest price decline to make that happen. And what that price decline really is about is there were some customers that had higher prices in the marketplace, and they pulled in to be more in line with the broader market, and into where we are today. So stable, and the volume we're assuming when we say stable, is assuming our customers are at their contract minimums, because we do expect destocking will continue through this year, like it did last year. As a reminder, you know, we have contracts last year, too, and we started the year thinking people would be buying in their normal range of the contract, and then, as we told you through the year, they moved to their contract minimums, but we held them to that. That's why they have to continue destocking this year, to get to where they want to be. And Q1 is starting out a little bit light. The contract commitments are annual contracts, so but they have some ratability, flexibility around the quarters, and we expect the first quarter to start off a little soft, hence our guidance, and then they will ramp up as you go through the year. And normally the back half is a little bit stronger anyway, as load channels ahead of the tax increases that normally happen every January. So we feel good about that. Obviously, there are a bunch of actions in addition to stabilizing that business directly that, you know, we're taking. So the cost reduction actions across the company, that significant cost reduction goal that we have, this in the $125 million-$150 million range to build on $100 million last year. Decent portion of that goes towards fibers, with some of the actions we're taking specifically on how to optimize how we operate our assets more efficiently. The growth in textiles, we're seeing, you know, growth start to come back slowly, but it's coming back. We expect that to build through the year. We are expanding our efforts. So today, we've mostly focused on selling Naia filament, which is a very high-value product in the textile market. There is another product which is staple. It's short fibers that you use. It's a more economic product, typically goes into things like denim and fleece, and it's a huge market. And so the margins are not as good, but they're still reasonably attractive, and so we're ramping up our effort. Already got sales, you know, for this year, and we're going to try and ramp that up as another way to drive asset utilization. And then on the broader segment question around cellulosics, you know, we have the Aventa product, currently lives in corporate other, but, you know, that product is moving forward. We're going through a lot of product qualifications last year, and we expect volumes to build this year, especially in food trays and cutlery and straws. And so that'll drive segment utilization as well. So a lot of different actions that we're taking, they will build through the year. So how we get to the number this year, and stabilize it will sort of build through the year as we build on all the different actions we're taking. When it comes to price, you know, on the tow business, some of the prices do have CPTs in them, and allow for adjustment for, you know, changes in raw material and energy costs. So a number of those contracts will adjust, a few won't. And the textile prices are market-based, so, you know, we can raise prices. But in this weak environment, I would not assume we're raising prices a lot outside of the CPTs, you know, managing some of the headwinds. So that's sort of where we're at. You know, we're pulling every lever we've got. This is incredibly important source of earnings and even more important source of cash flow, and we take this business very seriously and what we're gonna do. Okay, that- Thank you. Our next question comes from David Begleiter from Deutsche Bank. Your line is now open. Please go ahead. Thank you. Good morning. Mark, looking at Chemical Intermediates, are there other actions or options you're looking at to reduce the earnings volatility of this business? Absolutely, David, and first of all, you know, the biggest action we're taking, we've already told you about, which is the E2P project. So we have a project to take our bulk ethylene, which is the biggest driver of earnings challenge in the segment, given how that ethylene market is challenged. And that's not a new topic. It's been a topic for us for a long time. We have a project where, you know, we can take the ethylene and turn it into propylene, and that dramatically improves the earnings in the segments. It allows us to, you know, not sell bulk ethylene, allows us to replace, you know, higher cost purchased propane, I'm sorry, propylene, and so we improve, you know, a loss as well as, you know, reduce and eliminate the loss on the bulk ethylene, and we also improve the margins on the propylene side of the equation at the same time. So that's worth... If you look at all the different ranges and scenarios of, of how the industry spreads can change, it's somewhere to $50 million-$100 million improvement in earnings, and the payback on that's less than 2 years from a capital point of view. So that project we're driving forward, as, as one that will definitely structurally improve the business. When it comes to how the business also it thrives and improves, frankly, is, you know, there, there's a cyclical nature of this, which is more demand-driven, in the business. So the North American market is much more profitable than the export market, especially with all the Chinese dumping going on that's really impacting the market outside the U.S. The tariffs are helping, to some degree, protect the North American markets. So as demand comes back within the segment, you know, in North American, building construction, durables, et cetera, you know, that's a big mix upgrade. Also remember, more than half of the product we make in this segment goes into our specialties. So as demand recovers there, you know, you're replacing, very low-value exports, you know, on the margin with much higher value specialty sales. So that also helps improve the, you know, stability and the earnings when we get back to a more normal demand situation in the core CI business. Of course, you know, there is the broader question around the overall market and how it gets better. With the current pricing and a lot of the products coming out of China right now, and the cost models we have, they're at their variable cash costs. We don't know how long that's sustainable, and it's certainly impacting high-cost assets around the world, especially in Europe, South Korea, Japan. So you see, you know, assets are gonna get rationalized, you know, I'm not about to guess, you know, what the timeframe is on that relative to how China's adding capacity. But I do think the market structure around the world will continue to get better over the next few years. You know, we're not banking on any of that this year, to be clear, you know, with the uncertainty that's in the current market situation. But there are a lot of actions we're taking to improve this business long term. No, very helpful. Thank you. And just on Q1, can you help us, help us with the bridge versus the prior year to get to that decline you're forecasting on an EPS basis? Sorry, could you repeat that question again? You were just broken up a little bit. Could you help us with an EPS bridge from Q1 last year to Q1 this year for that decline that you are forecasting? Oh, year-over-year decline. Sorry. Yes. I just want to make sure I understood the question correctly. So as we look at where we are today, obviously, we went on a journey through last year, right? Q1 was relatively strong, and then it evolved over time to where we, you know, finished Q4. In Q1, it's important to remember, as we told you in the third quarter call, you know, that was actually a year-over-year growth scenario, right? So, you know, the end markets and the consumer discretionary, for example, were up 2%-4%. So you know, if we had that year, we would have had, you know, growth, you know, normal seasonality for the rest of the year, we would have had growth for the year. So the evolution of the market after the, you know, April Liberation Day, causing markets to sort of, you know, go from being modestly up to down in meaningful ways, you know, changed and altered the rest of the year. So, you know, Q1 is a tough comp because it was actually a growth quarter. Now, where we are today, I think it's much more important to think about the progression of, you know, how we've, you know, gone through the year and how we come out of the back half of this year, you know, into Q1 and build from Q1 through this year. So when I look at where we are now, we feel good about how Q1 is progressing. You know, I think that we wanted to and are seeing a return in volume for you know, from fourth quarter to first quarter. So you're seeing strong improvement in volumes in AM with seasonality sort of coming back to some degree, although I'd say customers are still being cautious. We're definitely seeing the you know, lack of destocking of pre-tariff inventory that we told you about in the third quarter call, you know, which obviously was a big driver of the volume decline in Q4 relative to Q3. I think most of that's abated. So, you know, we're seeing good recovery in the volumes there, seeing good recovery in the volumes seasonally and AFP, you know, as you would normally expect. We've already talked about, you know, volume recovery being a bit modest in fibers, and we'll build through the rest of the year. And even CI is gonna have volume recovery, as a function of just less shutdowns, so more volume to sell, as well as, you know, some of the seasonality and destocking that was pretty aggressive in CI abating. So overall, we feel like we've got a meaningful amount of volume recovery, you know, coming our way. It's by no means taking us back to last year, Dave, but it's making good progress from where we were, you know, in Q4. On top of that, you know, you've got utilization benefits that come with the volume, and some of the cost benefits and actions we're taking, you know, that, you know, continue to build as we go from the fourth quarter to the first. There will be some offsets. Obviously, energy costs are higher, even in a normal period before we get to winter storms. We expected energy headwinds in our guidance, and we expect prices to be a bit off in CI, with some contracts resetting. And then fibers, as we already told you, will have a modest decline in price. So when you put it all together, we feel good about that guidance and starting the road to recovery. But all the things we're doing that we've talked to you about build over time, right? The innovation builds over time, circular builds over time, cost reductions build over time. We, you know, we're assuming we get back to normal seasonality, which will certainly help Q2 and Q3. So, you know, while it's, you know, Q1 is not, you know, where we want to be, you know, relative to what we think is possible for the full year, we're really encouraged to see the strength of recovery, you know, out of Q4. And we see a lot of levers on how we can build and improve and deliver a strong, meaningful earnings growth for the year. Thank you. Our next question comes from Patrick Cunningham from Citigroup. Your line is now open. Please go ahead. Hi, good morning. This is Rachel Li on for Patrick. So the earnings contribution from methanol seems to imply maybe less than 25% incremental margins on additional volumes this year. So is this the right way to think about incrementals for some of these non-core applications, or is there any additional fixed cost or mix drag impacting 2026? Well, thanks for the question. You know, what I would highlight is, obviously, as we think about the benefits of our circular solution for the packaging model, as well as the combination of the specialties with Tritan Renew and the end markets that we're going to into those applications. To your point, Rachel, there's a, I'll call it a spectrum of drop-through margins. As we think about 2025-2026, volume growth is a key aspect of that, and we've highlighted that with the contracts that we have across a spectrum of, you know, key brands that we're growing with in the packaging space, and that being the substantial driver. So as you think about that growth rate, what I would say is for the fixed, or I'll call it the model that we've talked about for packaging, where we have, you know, volume commitments, as well as cost pass-through, we believe that that is reasonable outcomes and delivers the returns that we've been talking about. What we will also have is upside to that as we have additional mix upgrade and sell into our specialty markets, and as we get momentum in the consumer discretionary markets, over the long term to drive those returns that we've committed to previously and the circular economy. Great. Thank you so much for that. And I know you haven't guided to this goal 2026 for the full year, but given your expected growth across AM and stable in FP, can you help size it related to your own price-cost trend for your specialty businesses in 2026? And, just one follow-up there. You often talk about defending the value of your products, but now it seems like you're giving some price back in AM, so I guess what's driving that? Sure. So that's, there's a lot of that question, right? So I'm gonna try and answer as best I can. You know, just to start off with, you know, around sort of how we look at 2026 and think about it, you know, we're very clear that the macroeconomic scenario is highly uncertain. I think everyone's pretty much in the same bucket, and so we're not trying to call the macroeconomy. The biggest driver of our company in earnings and performance and cash is volume. And, you know, that's been true for the last four years, and it'll be true for this year. But right now, we're assuming the markets in our planning scenario are relatively stable last year. And then what are all the different things that we can do to drive value? And so we start with the forecast on cost reduction, since that's immediately in our control. As you've seen, we delivered $100 million, which was, you know, 25 over our target last year. Great momentum, and that we think we can get another $125 million-$150 million on top of that. That's $225 million-$250 million in two years, which for our size of company, is pretty significant, and really demonstrates our accountability to our shareholders with great value in challenging times. But the biggest thing is around growth, right? So we have lower costs, you know, and a lot of that cost will flow into advanced materials. Then it's how do we grow volume? And on the volume front, there are several things that we're doing, you know, where are more in our control than waiting for the macroeconomy to get better. First and foremost, there's always innovation to create growth above your underlying markets. You know, the cellulosic... I'm sorry, the circular economy and polyesters is a key example of that. That incremental $30 million of improvement over 25 is significant, with a revenue growth of, you know, 45%. A lot of it being driven by the rPET customers that we talked about in the third quarter, that are already ordering and ramping up with us in the quarter. So we feel very good about that. And building, you know, starting to build in Q1 will create more value as we go into the rest of the year. You've got the classic, you know, innovation in the films business with HUD and luxury cars and EVs, and growing around the world. You've got the, you know, isopropyl ultrahigh purity solvents and semiconductors and AFP. We have all the cellulosic growth I just talked about, and how we're trying to drive growth in the fibers business. We're also expanding our aperture and how we think about volume growth, you know, across the company, but especially in advanced materials, and in fibers, is how do we target these applications that are outside of our normal core specialty businesses? You know, you don't really want to aggressively go after market share in your high-value products because you just erode your value in those applications. In a weak market, that's a bad choice. You want to win on your value proposition, you want to maintain your margins. So for targeting areas where we can grow, that adds volume and utilization to the overall cost structure of the company. One we've already done, which is regaining some of our architectural interlayers, where we lost some share last year. As I talked about, we're doing the staple product in fibers to drive growth. We have the Aventa. We also in polyester, you know, just with the actions we're taking in our core business, have a lot of volume growth already, but there's still space to look for more volume. So we're expanding some efforts in some markets like heavy gauge sheet and shrink packaging, where the margins are not as high as Triton, but they're still attractive and allow us to drive asset utilization. So how do we really ramp up volume and utilization and leverage that cost reduction altogether? The segment that will for sure benefit the most from these actions is in AM. Now to your question around prices, you know, there, there are some price declines. We already mentioned fibers and CI. In advanced materials, we do expect some, you know, modest declines there too, as we share our raw material costs advantages. We can't offset energy headwinds in this market condition, and our competitors are outside the U.S. But we certainly have done a phenomenal job of managing our price relative to our costs over the last four years. But after you get it in four years of doing a great job, you have to start sharing some of that raw material benefit with your customers, and so we're, we're doing that. But, you know, in the context of the volume growth we're getting, the overall variable margin is increasing. So those are all the actions that we're taking, you know, to try and drive value, and create, you know, very meaningful earnings growth for the year. Thank you. Our next question comes from Vincent Andrews from Morgan Stanley. Your line is now open. Please go ahead. Hi, this is Turner Hinrichs for Vincent Andrews. I'm just wondering if you could help with some of the bridge items for Advanced Materials, ex methanolysis. I believe that you've commented that innovation, reversal of the asset utilization, headwind from last year, and FX or tailwinds, while you should see some price cost headwinds. I'm curious if you could provide some more color or help put a finer point on what you might see on a year-over-year basis in that segment. Yeah, I think I just hit on a lot of it just in the last answer. But, you know, the great thing about Advanced Materials this year is it's got a lot of leverage to work with, right? So, to grow earnings this year relative to last year, the first and foremost is that volume growth, right? It's volume growth delivered by circular, which is one of the bigger drivers. It's finding volume growth, you know, in weak markets through our innovation, you know, and the levers that we're trying to pull there. So you've got some core recovery, and you got circular. On top of that, you have a good portion of the cost reduction flowing into AM. You know, that it is part of that overall corporate program. You've got the largest amount of utilization headwind last year, was the aggressive inventory actions we took in managing advanced materials. And so as these volumes come back, we start getting a meaningful tailwind on utilization in this segment. And then you do have some FX tailwinds and benefits as well. So when you put all those four levers together, you know, they're quite material. Now, there are some offsets, like a bit of higher energy costs this year, that modest price decline I just mentioned, you know, relative to the energy costs. And then, you've got, I just forgot what the other part was. The other, the other headwind is, that's it. I don't think there's another headwind. Oh, variable comp, that was it. Variable comp's the other headwind. All right. Thank you. So- Thank you. Our next question comes from Aleksey Yefremov from KeyCorp. Your line is now open. Please go ahead. Thanks. Good morning, everyone. Just looking at various bridge items you provided for this year, was sort of crudely came up as about $5.50-$6 in EPS. So I wonder if you could comment if that range is close to what you were thinking? So, I never imagined getting that question. So, look, as I already said, the macroeconomy is incredibly complicated right now. There's a lot of uncertainty. In that context, we're taking a huge amount of actions that are in our control, from cost to trying to create our own volume, leveraging asset utilization, and certain things like FX, that's a tailwind. So there's a lot that helps. Clearly, there's a few headwinds in, you know, the rate at which, you know, CI recovers from last year. And how we moderate, you know, and stabilize the fibers business as well as, you know, things like variable comp going, you know, back, you know, to 1x. So when you put it all together, you know, we've said, you know, there's a meaningful improvement in earnings that's possible. You know, what I would say is, you know, when you, when you think about the sort of upper end of what you're talking about, around $6 a share, you know, that's very much in the range of what we're thinking is possible. But I have to emphasize there's a wide range here around what could happen, you know, and it is macroeconomic that we're talking about, you know, where the uncertainty is. You know, if you look at GDP and everyone's talking about how great GDP is, and its growth last year were expectations of this year. You know, if you back out data centers, AI, healthcare, you know, GDP is sort of flat. The consumers, you know, as I think has been well understood through last year, especially the 80%, you know, of our consumers out there are really struggling with the economic challenges they have and affordability, the fear of what tariffs are gonna do, fear about, you know, can I get a new job if I lose mine, et cetera. So there's a lot of caution out there, you know, that's been there for the year or last year. I don't think it's materially changed. That's why we think the economy could be stable, but it's challenging out there. You know, there's any number of things, geopolitical wars, et cetera, that could make things worse. On the flip side, you know, there's a lot of potential upside here, too, you know, relative to, to sort of that six. You know, right now, demand has been incredibly weak since 2019. And we, we've told you housing, and you all know it, total home sales down 20%. Not just here, but in Europe, China's worse. You've got consumer durables down 5%-15%. You've got cars barely getting back to 2019 levels. A lot of pressure in accessories in the auto market because people can barely afford the car. There's a lot of pent-up demand, since 2019 to now, not to mention normal market growth being missing, that can recover at some point when consumers get confident and stable. And the... especially for the U.S. economy more than China and Europe, I think the current administration is very focused on getting the economy to grow for the consumers, not just data centers and healthcare, you know, because the midterms are coming up, and so, you know, lower interest rates obviously will help. A lot of the tax policy may get more money into the pockets of that 80%. There are a bunch of housing policies that they're considering that could be helpful. So, I'm very hopeful that they take those actions and the consumers get healthier, and buy more, and that would be upside. So, you know, we're very focused on controlling what we can control. Very aware that, you know, the economy could go any direction, so we're not gonna take our eye off the ball and everything that we can control. But there's just a lot of uncertainty, and right now, we're just focused on making sure we get a good start to Q1, and build from there. Thanks a lot. Thank you. Our next question comes from John Roberts from Mizuho. Your line is now open. Please go ahead. Thank you. It wasn't very long ago that you had a young chick featured on the cover of your slides. What's going on with the ag products you're discontinuing? Oh, we had a couple of crop protection products in Europe that had a regulatory ban go in force, and so we had to stop selling them. So that's what happened. It's just a European-specific thing, but they were, you know, profitable products, and we felt the impact. We will feel the impact this year. Okay. Maybe I could get a second one then. What's, what's going on with the decline that you cited in rPET from mechanical recycling? Decline? A decline in quality. I think you cited the decline- Oh, sorry. Got it. in quality of rPET. Yeah, yeah, absolutely, John. So the decline in mechanical recycling quality, what happens is, and we've known this from the beginning of our platform and why we're so excited about chemical recycling, is mechanical recycling has a major flaw, which is when you melt plastic, you break down the bonds of the polymer chain, every time. And as you do that over cycles, the polymer integrity chains get worse and worse. And so the quality of material degrades, and you get impurities also in the polymer, 'cause you have to remember, mechanical recycling has no purification. So, you know, you take waste plastic, you select the cleanest, clearest bottles you can find in the plastic waste stream, and then you wash them, and then you chop them up, and then you melt them back into pellets. So there's no purification. So also, if there's any, you know, contaminants in that bottle, it doesn't necessarily get removed from the polymer. So the polymer starts to get yellow, it starts to get gray. You'll see that on the bottles on the shelf, you know, that's already starting to show up. You also have some integrity issues around the strength of the polymer. So if you're stacking, you know, cases, you know, the bottles start to collapse a little bit. And so there was always the belief that, and understanding that the mechanical integrity would degrade with mechanical recycling. And but they thought it would take, you know, many years before that impact would actually show up in the polymer, and it's showing up a lot faster. It's already showing up. And that really confirms our value proposition because we have none of those problems, right? Chemical recycling, we, as we've told you before, we unzip the polymer back to the building blocks. We have a big purification step. So, you know, the intermediates that we produce out of it, that we then turn back into a polymer are perfect. They're exactly the same as virgin. In some cases, we're finding it actually has a little bit better clarity than a virgin polymer. So, you know, and we can do this infinitely like aluminum. So we are really the long-term solution to chemical recycling. Mechanical is a good thing to do, and it's, you know, energy efficient, but its yield is incredibly low because they can only clean up 25%-35% of the really clear bottles. The rest of it gets downgraded into low-end markets or landfills. That's why long term, we're very confident about the value of this, you know, so whole platform having a lot more demand, and it's already being confirmed with our customers now recognizing, you know, how much our quality is better. And that's why you see some volume being pulled forward with Pepsi and some other brands, you know, into buying our PET from us next year, not this year, you know, relative to, you know, when the second plant was going to come online. Okay, thank you. Thank you. Our next question comes from Frank Mitsch from Fermium Research. Your line is now open. Please go ahead. Thank you and good morning. Mark, I wanted to get your sense of where you think inventory levels are at your customers. You know, obviously, you know, you spoke a little bit about, you know, the volume decline that we saw in 4Q, kind of reminiscent of the great destock, you know, back in 2022, 2023. Yeah. So, I mean, you might make the case that inventory levels have to be, you know, bone dry at your customers, but, you know, I'm curious as to what your thoughts are. So I think that, you know, a lot of very painful lessons were learned back in 2021 and 2022, when customers and the retail channel massively overbuilt inventory, and then demand corrected, obviously, with inflation, interest rates, et cetera. People got caught holding on a lot of inventory that took a very long time to destock. I would say this year is very different, or 2025 was very different, than 2023. First of all, people learned their lesson, and we're not building, you know, inventory, you know, for some expected high growth scenario. Everyone was at the beginning of 2025 pretty cautious about the economic scenario for the year. So customers and retailers were being disciplined on that. Now, what was different was, you know, April changed everything, right? So when the tariff trade sort of situation escalated, you know, that caused everyone to go into action mode to try and mitigate their exposure, and they, you know, bought more than they needed for the moment, where, you know, they were trying to get ahead of those tariffs. And then demand slowed down a bit, as we described, you know, from Q1 to Q2, with the consumer. So you ended up with some excess inventory, not just for us, you know, because we were doing the same thing, building some volume with the expectation of, you know, modestly improving sales in the back half of the year, and, you know, obviously, that didn't happen. So we had to do our own destocking in Q3. Same was true of our customers, right? They, they were sitting on more inventory than they needed with the, you know, consumer demand not improving materially, and had to sort of take action on reducing that inventory. But the inventory levels they started with were much lower than, you know, where we were back in, in 2023. And the change in, in the market demand is, is not significant, right? The market demand is moderated a bit, but it didn't sort of collapse, you know, like it did in, in the back half of 2022 and, and 2023. I think the other test of it, Frank, is back then, you know, we had a huge and difficult Q4, where volume really dropped, and then it dropped even more- Mm-hmm ... in Q1 of 2023, right? Whereas now we see orders picking up in January, February, relative to, you know, last fourth quarter, right? So that also gives me that comfort that, you know, they wouldn't be ordering more right now if they hadn't managed their inventory. Okay, gotcha. Okay, and so that feeds into my next question. I'm trying to just reconcile a couple of different items related to this. You know, the asset utilization headwind in 2025 was $100 million, you know, running your plants lower because you want to meet demand. So that's $100 million negative in 2025. Now, for 2026, you're guiding $25 million-$50 million benefit from utilization, lower shutdowns, and volume growth. So it's $25 million-$50 million for that. Is that directly comparable to that $100 million negative for 2025? And then part of that is also the $20 million benefit from lower maintenance in 2026 versus 2025. So can you, if you can reconcile those numbers, that'd be very helpful. All right, Frank, just at a high level, what I would highlight for you is, as Mark just highlighted, we had to do some of our own destocking. So first half to second half, we basically had a $100 million headwind, as we look at, you know, the way we ran our plants, the demand that we had in the first half, and with the tariff, I'll call it, initiated pre-buying, ultimately in the back half, as things got more cautious, we turned our plants down to deliver, you know, the billion-dollar commitment that we made on cash flow. As you think about on a year-over-year basis, we highlighted in 2024, we actually built inventory as we were planning for, you know, the strategic transitions, to serve, you know, our circular economy footprint, including, you know, the rPET, and, we built inventory in advance of the transition. I would say our Advanced Materials business did a great job of bringing that inventory back down, but it was, you know, really the build of inventory in 2024, and the implications. So that's why there's a more modest, utilization tailwind as we go into 2026 from 2025, is it's really those, lower plan turnarounds as well as, the benefit of, you know, not planning to build or deplete inventory. We expect to hold it pretty stable, in our baseline assumptions, starting the year. The other thing I'd add is, you know, we have plans to drive a lot of volume growth in the things that we can control. We're, you know, appropriately cautious, like everyone else in the industry right now, about what the underlying market demand is gonna be. If the demand's stable, we get... You know, we can deliver on all the volume that we're trying to achieve, you know, the tailwind is gonna be more than $25 million-$50 million of utilization benefit for this year. But, you know, we need to prove all that, right? So we're gonna be a little conservative on how we think about that number until, until we, you know, see all the volume come together. And also, just as we highlighted, on advanced materials and why we... The reason to believe, obviously, a large portion of the benefit will show up in advanced materials from utilization. Thank you. Our next question comes from Kevin McCarthy from VRP. Your line is now open. Please, please go ahead. Hi, this is Matt on for Kevin McCarthy. Could you size the opportunity for your high-purity solvents in the semiconductor end market within additives and functional products? What does that growth rate look like, and how do the margins compare to the rest of the segment? So the high-purity solvents is a great business. The margins are definitely above segment average in that business, and it's always great to be connected to semiconductors right now and being on that growth. It's not a huge product line, and we don't break out, you know, those kind of numbers in our portfolio. But it is a meaningful contributor to sort of, you know, how to, you know, drive earnings growth, how to offset, you know, some of these discontinuing products as we think about how we keep AFP stable this year. And the growth rates are high. They're in the 20%-30% range in how we're growing it, but it's not a huge number when you apply that 20%-30%. So don't go overboard in how you think about it. But it definitely is helpful, you know, as we think about that lower HTF sales and a couple of the discontinued products being a headwind this year in AM, sorry, in AFP, and how we offset it. Thank you. And then, in your prepared remarks, you mentioned that the EPS guidance you gave for 1Q does not include the impact from winter storms. And I appreciate that's hard to predict, but could you maybe give us an idea of how you're thinking about that, given how the winter has progressed so far? To your point, it's too early at this point. We still have, you know, freezing temperatures here in Tennessee, as well as at our site in Longview, Texas. And there's more snow that's getting ready to come. You know, we've seen limited impact on our facilities so far. As you might expect, I'm sure you've been watching the natural gas markets. So the main impact is on the energy and natural gas and where does that actually play out and influence? As Mark highlighted, we expected higher natural gas in Q1, but this could also be an additional tailwind. You know, ultimately, we're taking actions to ensure the safety of... As a headwind, in addition, to what we had already forecasted. We're taking actions to ensure the safety of our team members and reducing rates to also limit the amount of natural gas headwind that would come from this event. And obviously, we have a hedging program, and we're, you know, about half of that is hedged as we go, you know, go through the quarter. We will provide, I'll call it more information, as we talk to you throughout the quarter. Thank you. Our next question comes from Salvator Tiano from Bank of America. Your line is now open. Please go ahead. ... Yes, good morning. So, firstly, I wanted to go back to the fibers volume. I know it's been a pretty long discussion, but I still do not really understand, you know, getting that obviously the textile part was down a lot, how, given the volume bounce in tow, the volume was down 19%. Setting aside the idea that you addressed in the first question of the call. So what are typically the volume bounds in your contracts? Like, is the minimum actually 20% below, for example, the normal level? And secondly, I, as we think about this year's volume, you do mention the call that you secured flat volumes year-on-year, but there will be continued destocking. So I'm, I don't really understand what that leaves us on a net basis for the fibers volume year-on-year. Should we just assume flat or, or does this mean there is a risk to the downside? So, on a full year basis, you should assume that the tow volumes are, you know, stable to last year. So that, just to get that question on the table, and then we have some volume growth we're pursuing in textiles, you know, on top of that sort of stable volume situation. The way you know you think about the contracts last year relative to the, you know, contracts we have this year. We started the year last year, you know, with volumes that were obviously better in Q1, and then they were, you know, became less each quarter. Q1 started, you know, largely with customers buying in their contract ranges, but not all at the bottom of their ranges. And that's where the volume sort of was sort of normal, in that sense, outside of, you know, you know, a couple of things, you know, that we started the year with on the destocking, but a lot of customers were normal. And then as the year went on, more and more people started taking actions and going to their contract minimums to, you know, try and destock. And we had also had some growth commitments from a couple of customers, last year. That was, you know, we, that they had plans on assets in the ground, you know, you know, were buying the volume for their growth, that they thought they were gonna have in winning some share from some competitors. And, you know, that growth didn't materialize for them. So suddenly they're sitting on more material they needed and started, you know, materially reducing, you know, their demand too. And that's sort of how the overall volume evolved, you know, to, you know, where we were, where most people were focused on destocking at the end of the year. So in that context, you know, we then sort of pursued and achieved a bunch of contracts, you know, that have volume ranges to them. And, you know, when we look at those contracts that we have in place now and the actions that we've taken, you know, we believe on an annual basis, the volumes, you know, when they're at their minimum, will be, you know, stable to the volumes we realized last year. Okay. But, you know, those contracts, you know, while they're volume commitments on an annual basis, they're not... You know, they have flexibility quarter by quarter in how much they buy in the annual commitment. And so, you know, they're modestly lower in Q1 on their commitments, you know, so they have to buy a bit more to stay in their contract zone as we go through the year, you know, which also coincides with, I think, less destocking that they need to have to accomplish this year relative to last year. Okay, perfect. That, that's very helpful. The other thing is a little bit on the variable compensation. I mean, you are walking a very tightrope, you know, trying to make sure that earnings will grow this year, as you said in the guidance, in the outlook. So, and you're cutting costs by, I believe, over $300 million in terms of the gross cost reductions, right? So in this context, why would the variable incentive compensation be such a big headwind then? I guess, if you do not deliver on earnings growth because of whatever happens in the macro environment, how should we think the headwind—like, will the variable comp be a headwind, or could it actually be, end up being neutral year on year? So what I would highlight is, obviously, as we, you know, set out with our business plans in 2025, the expectations at the start of the year were much higher than what was realized. Obviously, we reset commitments, but the plan was in place and, you know, we're accountable to shareholders for that plan. As a result, you're gonna see, you know, lower, there's lower variable comp expense in our P&L in 2025, and there will be lower cash payments here in 2026 for those plans. As we're resetting the business scenarios that Mark outlined today, we expect to deliver on those. If we deliver that stable cash and also deliver on all the actions, you know, net of some of the headwinds, we would expect that the variable comp would reset and would be a headwind year-over-year of about $50 million-$75 million, depending on where we see those scenarios play out. Okay, perfect. Thank you very much. Thank you. Our next question comes from Jeffrey Zekauskas from JPMorgan. Your line is now open. Please go ahead. Hi, this is Lydia Huang for Jeff. How much have you spent on the second methanolysis project, and what would help you make a go or no-go decision? And are you looking for another baseload contract, given Pepsi has been pulled forward? ... So, as far as the second project's concerned and expense, obviously, we've already done some engineering expense, around building the facility in Texas. And then we lost the DOE grant, and we put all that work on hold. So we're not spending any money, on engineering at this stage until we've lined out and developed a compelling project to be a lot more capital efficient in how we're approaching it to, you know, restart the project and go forward. So right now, you know, we don't have any engineering expense, you know, or a headwind from a capital expense point of view. Obviously, there's a team working on the circular economy, you know, across all platforms around the globe, and we're taking that cost down to some degree, too, you know, as we adjust the rate at which we're progressing. But so that's where we're at. But I would say, though, around the second project, you know, one, we're really excited that Kingsport can be de-debottlenecked by 130%, which allows us to grow more from the first plant, have better ROIC from the first plant, before we get to the second plant. And that's what's enabling us to be confident that we can grow, especially economic recovery, and serve the rPET market with some of our customers who are coming back, you know, and wanting to buy from us a lot sooner, as I described earlier, due to the degradation of mechanical material that they can buy. So that's all really good, and it gives us time to work on this, you know, idea of a more capital-efficient second plant, which we very much, you know, want to build. And so we've got three different options going on there, where we're looking at, you know, different locations and assets we could leverage that already exist, that, you know, we feel very good that at least one of them, you know, will be, you know, quite viable to move forward. But because of the debottlenecking, that means we can avoid ramping up significant CapEx around this platform, this year and next. So it's a great solution to moderate our capital in a very difficult economic environment, and make sure we have good, strong, free cash flow right now. But you know, but keep on track with the circular platform, which we believe is still gonna be incredibly successful over time. I mean, without a doubt, people are buying a little bit slower, and especially right now, because they're, you know, not because of, you know, recycling, just because there's a lack of demand, you know, for their products, right? The consumer durable guys are under a lot of stress. So, you know, so, you know, this all lines up and works out, you know, quite well to have a great platform, manage cash in the short term, be responsible to our shareholders on return on investment. Thank you. Is the Pepsi contract the main contributor? This is for the Kingsport project. Is that the main contributor to the $30 million incremental earnings in 2026, or is that later in the year? So the revenue growth for the Kingsport project in 2026, running 2025, you know, certainly there is a significant amount of revenue coming in from rPET. Pepsi is one of the contracts that we have in place. We also have several other strategic leading brands, you know, ramping up volumes with us on rPET as well. So that is a big part of the 4%-5% revenue increase. You know, to what degree the specialties play a role in the final outcome for the year, goes back to the macroeconomic question we talked about. You know, if the world stays stable, you know, we expect some growth in the specialties, especially in consumer durables, where Renew content we involve. We still have 100 customers committed and buying, you know, specialty Triton Renew and some cosmetic Renew products, et cetera. They're just not ramping volumes up as much as we'd like because the economy is so challenged. Once you have stable economy, that starts, you know, they start launching new products to try and accelerate their growth, and our volumes will grow with them. So as the year plays out, you know, we expect some of that specialty business, hopefully, will start coming in and being a bigger part of the mix. But a very good portion is rPET, but it's not just Pepsi, it's several other customers. Thank you. Our next question comes from Mike Sisson from Wells Fargo. Your line is now open. Please go ahead. Hey, good morning. Mark, when you think about sort of restoring earnings, Eastman's earnings power, you know, back to where it used to be, do is there anything structural, do you think, in either the end markets or, you know, competition or China or something that, that could prevent that, or? And then just a quick one on your outlook for AM and AFP, for, you know, sort of underpinning the significant earnings growth. What is kind of the range of volumes that you need? I know you have a lot of that volume with new products and, you know, within your control. What's sort of the variable on the volume growth that you need to get that sort of significant EBIT growth? Thank you. Thanks, Mike. And yeah, we spent a lot of time on this question, and we talked a bit about it at the deep dive and how we thought about getting back to what we said was normalized earnings. You can go back and look at some of that material, 'cause I think most of it is still true in what we said then, to where we are now. Without a doubt, you know, when you think about, you know, the driver of where our earnings are today, it is primarily due to lower volume from economic demand that's, you know, impacting, you know, AM and AFP to some degree, as well as CI. So it's... You know, that, that demand, whether it's, you know, high value, especially growth in AM, very attractive growth in AFP or even just North American high value relative to exports and CI, has all been impacted by the economy. It's been weak, as we all know, for over 4 years, which is pretty unprecedented. In that kind of a timeframe, you know, like 2009, 2020 were, you know, short blips, really steep down and snap back. You know, this is a long duration. So as we look at all that, and I said this earlier, there's a huge amount of potential pent-up demand to recover. You know, cars are 15 years old, appliances are getting to their end of life when they bought them back in 2020. You know, the housing market, you know, being 20% down, and for us, total housing is what matters, not new builds, to be clear. But total housing, you know, which is now down 20%, starts to recover, that's a lot of paint, that's a lot of appliances that, you know, go with, you know, people moving into a new or an existing home. And so there's a lot of upside in demand that can recover a lot of our earnings. So, you know, that's sort of the key, is that innovation, you know, you've got the circular platform driving a lot of growth on top of the core market recovery. And what's been impressive over the last three years, we've done a phenomenally good job of maintaining our price and our variable margins while defending our share because of our innovation, you know, giving us differentiation. So if volume comes back, the incremental margins, that volume recovery and the utilization benefits that go with it, I think are, you know, quite significant to bring earnings, you know, in AM and, to some degree, AFP, you know, back in a meaningful way and even help CI recover in, in their earnings. So I think that's all really good. Now, obviously, you know, the structural... So I don't think we have a structural problem in AM and AFP. We have a cyclical market demand problem, you know, that has been our challenge. And to some degree, that's also true in CI. Now, there are structural challenges in the olefins world, in the acetyl world from excess capacity in China, impacting some of the chemical intermediate margins, and there's a, you know, debate obviously going on in the industry around to what degree did that structural pressure change? I mean, right now, we are for sure at the bottom of the market, and the prices are at the variable cash costs of the Chinese. You know, so I don't think that's sustainable, but to what degree it fully recovers is unclear on CI. You know, now with CI, you know, the, when you think about it, you know, the actions we're taking on E2P provide a big lift. The margin recovery and demand recovery in North America will provide a lift. So there's a way to get the earnings, you know, back from where they are today to, you know, probably $150-$200 million in a normalized place. Now, that's probably below where we were in the past, trying to reflect some of the structural challenges that we expect, but significant improvement from where we are today. Fibers, as we've already covered, I think, you know, we're trying to stabilize, you know, in this year. What's interesting is if you look at the EBITDA in 2020-- in 2019 for CI and Fibers together, it's around $520 million. If you look at last year and put the EBITDA together, it's about $100 million less. With... You know, so from a structural question, which is more a Fiber CI question, just E2P can get you back to where we were in 2019, and then we have the specialties building on that. And we're taking a lot of cost out to, you know, $225 million-$250 million of cost is also coming out to offset structural challenges to enable us to get back to normalized earnings. So we still think it's possible to get back to that $2 billion kind of number. Great. Thank you. Let's make the next question the last one, please. No problem. Our last question comes from Laurence Alexander from Jefferies. Your line is now open. Please go ahead. Laurence, are you still there? Becky, maybe we go on to the next one. We don't have a response from Laurence's line. Okay. We- So, I think that's... Go ahead. Go ahead, Becky. No, that's okay, sir. I was just gonna say that was our last question. Perfect. So thank you, everyone, for joining us today. We appreciate your time and hope you have a great rest of your day. This concludes today's call. Thank you for your participation. You may now disconnect.