Greetings, and welcome to Huntsman Corporation Fourth Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Ivan Marcuse, Vice President, Investor Relations. Thank you, and over to you, sir. Thank you, operator, and good morning, everyone. Welcome to Huntsman's Fourth Quarter 2021 Earnings Call. Joining us on the call today are Peter Huntsman, Chairman, CEO, and President, and Phil Lister, Executive Vice President and CFO. This morning before the market opened, we released our earnings for the fourth quarter 2021 via press release and posted it to our website, huntsman.com. We also posted a set of slides on our website which we will use on the call this morning while presenting our results. During this call, we may make statements about our projections or expectations for the future. All such statements are forward-looking statements, and while they reflect our current expectations, they involve risks and uncertainties and are not guarantees of future performance. You should review our filings with the SEC for more information regarding the factors that could cause actual results to differ materially from these projections or our expectations. We do not plan on publicly updating or revising any forward-looking statements during the quarter. We will also refer to non-GAAP financial measures such as adjusted EBITDA, adjusted net income, and free cash flow. You can find reconciliations to the most directly comparable GAAP financial measures in our earnings release, which has been posted to our website, huntsman.com. I'll now turn the call over to Peter Huntsman, our Chairman, CEO, and President. Thank you, Ivan. Good morning, everyone. Thank you for taking the time to join us. Let's turn to slide 5. Adjusted EBITDA for our Polyurethanes division in the fourth quarter was $218 million versus $201 million a year ago, or an 8% increase. Revenue grew 35% as our proactive selling price actions more than offset significant inflationary feedstocks and logistics cost increases. Our volumes improved 2% year-over-year, and we benefited from slightly higher equity earnings. We saw strong demand in our North American region with 7% growth. Asian and European volumes were essentially flat versus fourth quarter of a year ago. We are pleased to see strong pricing development in China, the world's largest MDI market, as we head into the first quarter of 2022. Our core construction markets, including insulation, adhesives, and coatings, continue to be the strongest markets for polyurethanes. Underlying demand remains strong. We continue to see excellent growth in our commercial insulation and composite wood businesses. Our Huntsman Building Solutions business continues to benefit from strong pent-up demand and product substitution gains. HBS fourth quarter revenues were 20% above the prior year and $560 million in 2021. I would note that when we purchased each of Demilec and Icynene-Lapolla in 2018 and 2020, the combined revenues at acquisition were approximately $400 million. HBS did continue to be hindered by logistics and shortages of certain raw material ingredients, which restricted growth. The backlog for our order book remained very strong. We're implementing price increases that are more than offsetting higher costs and resulting in increased margins. Further, our efforts to expand internationally continues to gain momentum. We remain very positive about this platform, and we will look to add to it through bolt-on acquisitions and organic investments once feasible. Our elastomers platform, which includes our global footwear business, is another core growth platform for Polyurethanes. Revenues overall grew by 33% versus fourth quarter of 2020. Demand is strongest in the industrial markets, and this platform is implementing price increases globally to offset the headwinds of raw material supply chain costs that are pressuring margins. During the quarter, our volumes in our automotive platform continued to be impacted by the well-publicized global chip shortages. We did see improving trends as we moved through the quarter as the year-over-year volumes declined in each month, in each month moved from high teens to low single-digit declines. Overall revenues increased in 2021 by 24% to over $550 million. Our automotive platform is a core business that we will continue to invest in to bring innovative solutions to our customers. As we discussed in detail at our recent Investor Day, a key goal of our Polyurethanes business is to upgrade the quality of our portfolio and continue to push molecules downstream. We will keep redirecting more of our plant's output to our differentiated businesses and bottom slicing lower margin component business. We will invest in our downstream businesses organically, where it makes sense with bolt-on acquisitions. Where we can generate higher and more stable margins through long-term contracts in our component businesses, we are also doing this. Our MDI splitter investment in Geismar, Louisiana, is consistent with this strategy, helping us to drive our downstream growth and increasing overall margins. This project will be mechanically complete in April. We will have commercial beneficial operations towards the end of the second quarter of 2022. We remain confident that once fully operational and selling at capacity, this investment will contribute $45 million in incremental Adjusted EBITDA on an annualized basis by the end of 2023. We expect $10 million-$15 million of incremental EBITDA in the second half of this year. Our POM/MTBE joint venture with Sinopec in China, where we own a 49% interest, benefited from a strong 2021, where it contributed approximately $130 million in equity earnings for the year, including $22 million in the fourth quarter. We expect equity earnings to be approximately $50 million lower in 2022 as propylene oxide margins in China normalize. As we look into the first quarter of 2022, we foresee global demand remaining on track in our three core markets, North America, Europe, and China. Globally, we have offset over $300 million of raw material pricing headwinds. The area of greatest impact is Europe at $140 million, with higher gas and electricity prices being the largest driver for this increase. Rather than waiting for this to pass, we've initiated multiple steps to offset this impact. First, on September 22nd, we announced in Europe a EUR 125 per ton surcharge on our MDI to offset rising energy costs. We have continued to adjust this as needed. Secondly, we have moved nearly 90% of our pricing contracts to be settled on a monthly basis. Previous to this action, about 20% of our volume was settled monthly, while the remainder was settled quarterly. This move will give us better flexibility to react to changing market conditions. Thirdly, we've accelerated our efforts to optimize our cost structure. During our Investor Day, we announced that we would complete our initial $40 million cost reduction program by mid-2022. We now have reached that target ahead of schedule and we build on that achievement, as we focus on our previously announced $60 million cost optimization program. Fourth, as part of our $60 million cost optimization program, we will be moving tonnage to more differentiated markets where we can achieve higher margins. As we stated last year, our focus is to increase the margin per lb on our nearly 3 billion lbs of MDI and not to invest in more tonnage at any price. Throughout 2022, we will be exiting lower margin markets and will either increase margins or divert tonnage to our core markets in North America, Europe and China. Rather than waiting for markets to return to more normalized conditions, we intend to emerge from this period of higher raw materials and supply chain disruptions stronger than when we entered it. Looking into the first quarter, despite approximately $20 million of lower equity earnings and facing significantly higher feedstock costs than a year ago, we would expect our Polyurethanes first quarter adjusted EBITDA to be strong at between $200 million and $220 million of Adjusted EBITDA. Turning to slide 6. The Performance Products segments reported Adjusted EBITDA of $105 million for the fourth quarter, which was modestly above the high end of our expectation and accompanied by strong Adjusted EBITDA margins. We continue to see the benefit of our commercial excellence programs, including pricing initiatives and good cost control, which more than offset higher raw material costs and supply chain headwinds. Volumes increased 3% versus the prior year period. This increase understates true underlying demand as we exited some non-core low margin business during 2021, which impacted volumes in the quarter by roughly 3%. Demand fundamentals in coatings and adhesives, construction, wind and clean energy, fuel and lube additives, and other industrial markets are benefiting both our amines and maleic anhydride businesses. As we described in detail at our Investor Day, this business is benefiting from several positive factors that we expect will continue to keep EBITDA margins in excess of 20% for the foreseeable future. First, an increased focus on the remaining business and a value over volume strategy. Since the sale of our commercial intermediates business continues to benefit this business, throughout all of our divisions, we're focused on value over volume and Performance Products is no different. Secondly, we're making good progress pushing volume into higher value and more demanding end use applications and customers. Third, demand has been demonstrated by our sales volume and selling prices that have been consistently strong. The three Performance Products capital projects we announced during 2021 in polyurethane catalysts and chemicals serving the EV and semiconductor markets in North America and Europe continue to move forward. We expect all of these projects to contribute to results in 2023, deliver more than $35 million of EBITDA in 2024. We've said several times in the past, we would be highly interested in doing bolt-on acquisitions in Performance Products, but these opportunities tend to be few and far between. The opportunities that have come up recently have ultimately traded hands at multiples above our required hurdle rates. We will continue to assess bolt-on targets, but we will also continue to remain very disciplined with our capital. We expect the improvements in profitability and earnings momentum that we saw in Performance Products during 2021 to continue into 2022 and beyond. The first quarter tends to be a seasonally stronger quarter when compared to the fourth. As a result, we currently expect Performance Products to report a first quarter Adjusted EBITDA of $115 million-$120 million. Let's turn to slide number 7. Advanced Materials reported Adjusted EBITDA of $54 million in the quarter, significantly above last year's fourth quarter and the best fourth quarter ever, despite an aerospace market which is still some time away from a full recovery. Typically, the fourth quarter is a seasonally weaker quarter. However, positive momentum in our sales and pricing actions continued into the fourth quarter across our Specialty portfolio. As we discussed throughout 2021, our core aerospace business continued to show year-over-year growth with modest improvements in commercial production rates. We estimate that our aerospace EBITDA is approximately $45 million below pre-pandemic levels. In addition, we continue to increase prices across our portfolio in response to raw material and logistic cost inflation. These pricing actions have positioned us well for improved margins in the first quarter of 2022. The recent acquisitions of CVC and Gabriel helped to drive our record results in the quarter, and the integration of these businesses remain well on track. To date, we've achieved $12 million in synergies, and we're confident that another $11 million will be achieved by 2023. Underlying demand for the Advanced Materials division is tracking well, and as aerospace recover, we expect this division to consistently generate additional EBITDA margins of 20% or better. We will continue to grow this division organically and through targeted bolt-on acquisitions. We expect the momentum with which we exited the fourth quarter to continue into the first quarter. The combination of improved Automotive and aerospace demand, synergies and improved margins will drive year-over-year growth. As a result, we expect first quarter Adjusted EBITDA to be between $58 million and $62 million, which is an impressive 36% year-over-year improvement at the midpoint of this guidance. Let's move to slide number 8. Our Textile Effects division reported an Adjusted EBITDA of $22 million for the fourth quarter. This represents a 22% improvement versus the year ago period. Overall volumes declined 7% in the quarter as we deselected lower margin and non-core business, and increased our focus on growing the sustainable and Specialty end of our business. Volumes in our sustainability-based products grew 22% year-over-year. Our margins also benefit from this portfolio shift and pricing adjustments to offset higher raw materials and logistics costs. Our Specialty products are gaining market share as our customers as well as global brands and retailers look for ways to reduce weight, waste and increase transparency in their supply chain. As these groups make more meaningful commitments to improve their environmental and social footprints, we would expect to see our leading Specialty and sustainability products continue to grow. We remain positive on the long-term prospects of this business and are confident that EBITDA will continue to improve. Looking forward, the first quarter, we have a very strong order book and expect to see solid improvements versus the prior year. We expect Adjusted EBITDA in the first quarter to be in the range of $26 million-$28 million. I'll now turn a few minutes over to our Chief Financial Officer, Phil Lister. Phil? Thank you, Peter. Turning to slide nine. Our fourth quarter Adjusted EBITDA improved $109 million or 45% compared to the fourth quarter of 2020. Our Adjusted EBITDA margin was 15% for quarter four and 16% for the full year, as guided at our Investor Day. Each of our divisions increased Adjusted EBITDA compared to a year ago, with our Performance Products division delivering the largest gain. As Peter indicated, we expect our Performance Products margins to be in excess of 20% for the foreseeable future, following another strong performance in quarter four at 26%. Our total company year-on-year improvement in Adjusted EBITDA was driven by gross profit expansion as price increases more than offset over $400 million in feedstock and logistics cost headwinds. Sequentially, since quarter three, we were also able to more than offset over $100 million in cost inflation with further price increases. Let's turn to slide 10. Our cost optimization and synergy plans remain on track. As we highlighted in November, we increased our target from $140 million to $240 million, with full run rate to be achieved by the end of 2023. We delivered approximately $100 million of benefits in 2021, impacting both gross profit and SG&A, and we exited with an annualized run rate of approximately $120 million. In an inflationary environment, it is critical that we continue to deliver on our program and drive improved margins. As we said at our Investor Day, we will manage this through further expansion of our functional global business services model, supply chain optimization, and as Peter highlighted, improving Polyurethanes margins with an additional $60 million improvement target. Regarding SG&A, which includes divisional, functional, and corporate costs, we closed the year at 10% SG&A to sales, equal to the number we have guided at Investor Day, and we expect that number to decline towards 9% through 2023 as we deliver upon our cost program. I would note that our Textile Effects division requires the highest SG&A to sales ratio and that excluding fee, we would expect a ratio closer to 8% once we are complete with our cost optimization program. Turning to slide 11. Net cash provided by operating activities in quarter four was $790 million with free cash flow at $698 million after deducting $92 million of capital expenditures, which includes our Geismar split investment. Free cash flow for the quarter included approximately $333 million of cash related to the Albemarle settlement. Excluding this benefit, our full year free cash flow was $281 million, slightly above the guidance range of $250 million-$275 million we provided on our quarter three earnings call. In the bottom left of slide 11, we show a breakdown of the accounting for the Albemarle settlement. Our expected cash benefit, net of legal fees and taxes, is $410 million. $333 million received in Q4 2021, with the remainder to be received in Q2 2022. All of the legal fees and taxes associated with the settlement are expected to be paid in Q2 2022. We closed the year with a strong and flexible balance sheet with $2.5 billion of liquidity, which allows for our continued balanced approach to capital allocation. We returned just over $200 million to shareholders through share repurchases in the second half of 2021, including $101 million in the fourth quarter at an average price of $32.76. Our adjusted effective tax rate was 19% in quarter four, and with an expected reduction in our Chinese propylene oxide joint venture equity earnings and one-time tax benefits in 2021, our 2022 expected adjusted effective tax rate is in the range of 22%-24%. Moving forward in 2022, as we said at our Investor Day, we expect the free cash flow to Adjusted EBITDA conversion, excluding net cash from the Albemarle settlement, to be above 40%. We will see a seasonal cash outflow in quarter one, with cash inflows throughout the remainder of the year, leading to a much stronger operating and free cash flow performance in 2022 compared to 2021. Peter, back to you. Thank you, Phil. I'm pleased with the results of this past year. 2020 was a year where most companies were looking to survive. Because of an investment-grade balance sheet and a leaner and stronger portfolio, we were able to further strengthen our company. By the time we started 2021, we were more than ready to continue to move forward to accomplish, with this present portfolio of assets, the best year in our history. Now it is time to focus on 2022, a year that looks to be better than the year we just completed. As we stated at our Investor Day presentation, we expect our businesses to earn approximately $1.4 billion in 2022. As we sit here today with the results of January in hand, we believe this number is on the low end of our expectations. Subject to macroeconomic and geopolitical conditions. Through our pricing and cost actions, we see clear Adjusted EBITDA margins improvements at the start of the current year. Our biggest challenge that we see is in the volatile and high prices we see for energy and certain raw materials. As we move closer to the end of the first quarter, we should have better clarity and may provide further updates on the market conditions as to the conditions we're experiencing. We expect that global supply chains will be sorted out during 2022, but there are some obvious structural issues around energy, especially in Europe. In spite of these headwinds, we feel that these will be offset by a combination of pricing discipline, higher margins as we continue to focus on downstream products, aerospace recovery, and continued cost discipline. We announced at our Investor Day, all of our corporate officers, including our top 80 managers, are aligned not just to deliver improved results in 2022, but continued improvements in 2023 as well. We reported this past quarter approximately $100 million in share buybacks. With the collection of our proceeds from Albemarle and our improved outlook, we would expect that our earlier commitment to accomplish our $1 billion buyback in the next three years to be accelerated and should be completed in less than two years. We also announced an increase of $0.10 per share in dividends. These are both part of our balanced allocation of capital as we remain competitive in returning value to our shareholders. We also reaffirm our guidance of $300 million capital expenditures. This will allow us to assure safe and reliable operations, the completion of our MDI splitter in Geismar, Louisiana, and the previously announced projects to move our amines and Performance Products downstream into catalysts, EV batteries, and semiconductor chips. We reported to you at the beginning of this year our decision to explore our strategic options with our Textile Effects division. As I've said over the past few years, this is obviously not the first time we've reviewed this option. Given our focus and investment on our Polyurethanes Performance Products and Advanced Materials, as well as our strong M&A markets that we currently see, it makes sense to review this option once again. At the present time, we are in discussions with multiple interested parties and are moving ahead with an orderly process. Lastly, I would also like to acknowledge our newest board members and look forward to their skill sets being used to execute on the plans that we've presented. I want to publicly recognize the strong contributions of our outgoing board members and what they've achieved in getting our portfolio and balance sheet to where it is today. Likewise, our newest board members bring current experience to add further value as we continue to reshape our portfolio, return cash to shareholders, and improve our margins and multiples. With that, Operator, we'll open the lines up for any questions. Thank you. At this time, we will be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. As a reminder, we ask that you limit to one question per participant. For follow-up questions, please join the queue afresh. One moment, please, while we poll for questions. Our first question is from Bob Koort with Goldman Sachs. Please go ahead. Thank you very much. Good morning. Peter, I was hoping maybe you could talk about the expectations for the year. You guys gave some first quarter guidance that's obviously well received by the market, but you didn't comment on the full year. Is there any reason to expect anything different than what you offered up at the Investor Day? Maybe you could talk to some puts and takes sort of as the cadence as you go through the year. Thanks. Bob, yeah, great question. I think as we look short term over the course of Q1, quite optimistic about the conditions in pricing and margin development and so forth. Biggest concern that I would have would be the EU raw materials, gas, electricity. Just in the past 24 hours, gas in the EU has gone from $29 at a high down to a low of around $24. That's just in the last 24 hours of the news that Putin might be pulling out some of the troops from the Ukrainian front. That movement alone that I just mentioned on an annualized basis is equivalent around $50 million in cost to the company. Again, that's that sort of shock and volatility, you know, something that concerns me in the short term. Again, I think that we've been very disciplined on working with surcharges, pushing prices through, cutting off lower margin businesses that don't want to compensate us for the value that we're giving them. We think that the forecast that we've given, $1.4 billion for this year, certainly is on the low end of what we're seeing as of today. You know, I would see a range between $1.4 billion-$1.5 billion as we sit here today. Now, as we go throughout the year, if demand continues as it is, as we've seen over the last three to six months and raw materials were to moderate and come down a little bit, I'd probably feel even more optimistic. But again, I think given the volatility that we're seeing in Q1, I'll have a much better picture of that here, hopefully in the coming weeks. Given the fact that we'll be meeting with a number of shareholders here in the next couple weeks, we'll probably be updating the market before the end of the quarter. Great. Thank you. Thank you. The next question is from Aleksey Yefremov with KeyBanc Capital Markets. Please go ahead. Thank you. Good morning, everyone. Peter, can you discuss the changes you made to long-term management incentives? You know, what are they? How could they impact performance of the company? I think that rather than moving our quarterly and yearly numbers, we'd like to focus more on a multi-year basis that will take some of the volatility. Now, again, that means that we're going to be more focused on moving some of the spot material. I'll remind the market that sometimes when you get into a situation where spot material is unusually at a multi-year high, we may not be benefiting in that as much as some of our competitors. On an overall basis, I'm absolutely confident that as we move products further downstream, we'll provide better margins overall and we'll provide better stability. This needs to be coupled with, obviously, with the CapEx discipline and with cash flow generation. It really will be around the improvements of EBITDA, the minimum of a 40% free cash flow generation. Again, I would hope it would be higher than that. You know, being able to deliver on the projects, pricing, the volumes and so forth that we're seeing. That again, the bottom line of that being improved EBITDA margins. Now, I don't want to get too transfixed on the margins themselves as much as the actual EBITDA that's being generated and the free cash flow that goes along with that. Thank you. The next question is from Angel Castillo with Morgan Stanley. Please go ahead. Thanks for taking my question. Peter, just a quick one on China and just I guess more broadly on Polyurethanes. As you think about, you know, maybe some pricing developments in the first quarter, if you could just unpack that a little bit. And also, as we think about the contracts that you noted transitioning from, you know, 20% of them being monthly to 90% of them, is that broadly across all of your Polyurethanes portfolio? Or, you know, what is kind of the impact of that and the benefits as we think about kind of financially, and just how broad that could be? As we look at the first part of your questions about Chinese pricing, again, if we see polymeric pricing in China, and I don't want to get too transfixed on this because overall, the amount of impact that this has on our overall business is going to continue to decline. It's one of our major thrusts in China is to take that polymeric price and to continue to take that polymeric product, continue to split it and to further derivatize it into higher value markets. As we look into the first quarter, we're seeing polymeric pricing around RMB 21,000-RMB 22,000 per ton. You know, to give you an idea, a year ago this time it was around RMB 20,000-RMB 25,000 per ton. Again, that was the fallout of a year ago. You remember the freeze that we had here in the Gulf Coast that kind of played havoc on chemical pricings on a global basis. Last year we saw a great deal of volatility. First quarter benefited from that one-time gain. I think what we're seeing in first quarter 2022 this year is while it's a lower price, it's a more stable price. You know, I like the overall direction and the stability that is presenting. When I talk about the price movements and the contracts, that is virtually all taking place in Europe. We traditionally Europe's been very much of a quarter-to-quarter basis in pricing. Like I said, we about 90%, just around 90% of our contracts in Europe have now been moved to monthly pricing, which means we're going to have a lot more flexibility to be able to move pricing and to be able to pass through some of that volatile energy shock that we're seeing in the market. Again, this is what we're doing. These are steps we're taking. I'm not saying that that's being done by the industry. Our competition, I'm sure will do whatever suits them best. Thank you. Operator, if we have another question. Yes. Thank you. We have the next question from the lineup, David Begleiter with Deutsche Bank. Please go ahead. David, your line is unmuted. You may ask your question. Hi, can you hear me? Yes, we can. Yes, we can hear. Please go ahead. Great. Sorry about that. If you do about $1.5 billion this year, Peter, how do you see the longer-term earnings power for Huntsman? Could you see a path to $2 billion? If so, how do you get there? Well, I'm not sure that we put necessarily $2 billion out there as a target. I'll take it in incremental steps, you know, as we're able to earn it. I think that as we look into the future, we are quite optimistic about the cost programs and the corporate restructuring that we have in place that we'll be delivering here over the course of the next 12-18 months. We're looking forward to the recovery of the aerospace and aircraft industry, which will return another $40 million-$50 million. That's just getting us back to where we were in 2018, 2019. The new models that we're being spec'd into, I would expect us to continue to grow from that level. I certainly don't want to represent that as a plateauing number. I think that as we look in Performance Products and we look at our further downstream investments into EVs, into the MIRALON products that will be coming into the market here in 2023. As we look at the investments we're making into polyurethane catalyst and the semiconductor markets, that certainly will be incrementally expanding our EBITDA as we look at the continued growth of our HBS and our sustainable products that we're making across the board and home insulation, so forth, all of which are growing at multiple times the rate of GDP. I'm not putting in any M&A activities or anything like that in there, but yes, we remain very optimistic on all of our businesses and all of our divisions across the board. We'll take them and I don't know if we're going to get to the $2 billion overnight, David, but we'll take it in $100 million increments as we can get it. Thank you. Thank you. The next question is from Hassan Ahmed with Alembic Global Advisors. Please go ahead. Morning, Peter. Morning, Hassan. Peter, a question on Polyurethanes. You know, keeping in mind the European natural gas situation. You know, through the course of Q4 and, you know, call it, you know, January through today, you know, did you guys see broadly in the European industry any curtailments on the back of any polyurethane curtailments on the back of sort of inflated natural gas prices? I mean, I'm cognizant of the fact that, you know, call it roughly 20% of the MDI industry is out there, and I would imagine, you know, certain raw materials like chlorine, which are directly sort of linked in that gas, you know, procuring those may have been an issue. No, Hassan, we did not see anything. Matter of fact, in Europe, we think that the MDI capacity operating rates and utilization rates were probably in the mid- to high 90% utilization rate. I think most everybody was running and operating at designed capacities. I haven't read of anybody curtailing capacity, and we haven't heard anything from customers of that happening. Very helpful, Peter. Thank you. Thank you. Thank you. The next question is from Frank Mitsch with Fermium Research. Please go ahead. Good morning, gentlemen, and congrats on a nice end of the year. I wanted to follow up on the European energy situation, which, based on your comments, Peter, might become a moot point. I was curious about what success did you have in pushing through the energy surcharges? Then I guess more broadly, if we do see some of these energy inputs, nat gas, butane, et cetera, come off, you know, how do you think about the scope to hang on to pricing and hang on to margins, if we see a deflationary environment on the energy side? Great question, Frank. I think we're about 90% successful in the energy surcharges. There are some people, there's some volume that we walked away from. You know, it was tough for our sales groups and so forth. We remain resolute to it. I think we're going to continue to make sure that that stays in place. So long as energy prices are higher, we need to be disciplined. We need to move this on down to the consumer level. As we look at this on an ongoing basis, as prices start to come down and I look at operating utilization rates across Europe and America and globally in general in MDI, it's probably. I would guess it's somewhere in the low 90%, 91%, 92% utilization, particularly tight in Europe and the Americas. I would hope that if we see deflationary impacts on our products across the board, remember, it's not just polyurethane that's had these price increases. It's really happened across the board, though I think polyurethane, because it has such a large presence in Europe as an energy consumer in Europe, it's felt the brunt of it. I think that most of our products across the board will certainly be able to have some opportunity for margin expansion. There are also a number of our customers. It certainly isn't the majority, but a number of our customers are also in what I would say is more commoditized end to the business or in pricing contracts where you have energy pass-throughs. Some of them automatically will see price increases when the price of energy and natural gas go up, and they'll see it come down as it comes down. But the vast majority of our tonnage that we move around the world we would certainly be benefiting from a deflationary raw material environment. Very helpful. Thank you. Thank you. Thank you. The next question is from Mike Leithead with Barclays. Please go ahead. Great. Thanks. Good morning, and congrats on a strong 4Q. Just one question on the balance sheet and capital deployment. It looks like you ended the year call it about 0.4x net debt to EBITDA. I think with your forecast of earnings growth and more money to come from Albemarle, you're probably on pace to roughly stay at that leverage level or similar to it by the end of this year. Even with the stepped-up dividend buybacks. I guess what I'm trying to get at is how do you think about the right leverage ratio for Huntsman and when and how do you think you will get there? I think if anything, we're probably a bit underlevered right now. I think that as we look at the share buyback, we continue. Well, first of all, we continue to look for opportunities to buy bolt-on acquisitions. I say bolt-on acquisitions because we did commit at Investor Day that, yeah, we would, you know, with our ideal size of a bolt-on acquisition would be somewhere $300 million-$500 million, $500 million kind of being at the end of that extreme. I don't see us, you know, going after an acquisition that would certainly get us above an investment grade sort of a rating. As we look at that, if we're not able to get the bolt-on acquisitions at the right multiples and the right values, then we'll be even more aggressive in share buybacks. But again, we want to make sure that our leverage remains at or below that 2x. We're significantly below that today. If anything, this will probably give us an opportunity, depending on where the board wants to go, into an accelerated share buyback. Great. Thank you. Thank you. The next question is from John Roberts with UBS. Please go ahead. Thank you. On slide nine, on the right-hand side where you've got the bridge by account, the $103 million from gross profit mix, how much of that was the acquisitions, which I assume is the mix, and how much was price cost? Was that minimal? Yeah. John, hi, it's Phil. Thank you for the question on the $103 million. Acquisitions year on year were approximately $10 million-$15 million. From a cost benefit perspective overall, we highlighted our cost improvement program year on year being about $70 million. About 2/3 of that was gross profit and about 1/3 of that was SG&A. The remainder, as we say, in gross profit, was really exceeding the raw material increases that we saw with substantial price increases. Great. Thank you. Thank you. The next question is from Kevin McCarthy with Vertical Research Partners. Please go ahead. Good morning. Peter, would you provide an update on your organic growth projects? If we look beyond the splitter project, it sounds like it'll be completed in the second quarter. What are the other initiatives that are resident in the $300 million CapEx budget that you put forth this morning? Yeah. Well, let's remember that over half of that CapEx is going to be around just making sure that we have the proper maintenance levels and the replacement levels of our equipment and so forth. Then the remainder of that is going to be going largely into the Performance Products areas, where we will be expanding capacity in Pétfürdő, Hungary to produce more polyurethane catalyst materials. A lot of some of this will be going into HBS as a blowing agent into home insulation. It'll be going to other applications as well. In Conroe, Texas, we have two projects that will be ongoing. One of them will be producing ultrapure amines and also ultrapure carbonates. One will be going into the semiconductor. We'll be the only people we'll be the only company in North America that is producing the ultrapure amines, and we'll also be the only company in North America that'll be producing the ultrapure carbonates. The ultrapure carbonates are, again, one of the raw materials that are needed for the EV market. As you think about all those EV battery plants that have been announced in North America, virtually all the rare earth metals and the chemicals that are required to produce those batteries are imported materials, largely coming from Africa and China. We'll be one of the few suppliers outside of those regions capable of supplying the ultrapure carbonates and so forth that will be going into a lot of those applications. Largely those three areas around expanding our amines that'll be going into polyurethane catalysts and other applications. Ultrapure amines and carbonates will be going to semiconductor into the EV application. We'll also continue to be putting investment into the MIRALON process, which is the pyrolysis of methane that will be producing a unique and I think a proprietary product that will be a new product for us that will be used in our Advanced Materials area. We highlighted this new product during the Investor Day. More than welcome to go on huntsman.com and get a two-minute cursory video on MIRALON technology and its applications and so forth. I would think that later this year we should be completed with what we think will be a commercial size, commercially viable reactor, and should have product going into the markets as early as the end of this year, beginning part of next year. I will remind you that those applications usually require anywhere from a 9-12-month product approval process. You're going into high-end applications in the aerospace industry and NASA and so forth. Whilst we might be producing products near the latter part of this year, by the time those are approved and kind of into the market and generating revenues, it's probably going to be closer to the end of next year. That'll be a gradual ramp up. Sorry, John, rather, Kevin, long-winded answer there, but those are just among some of the projects that we've got on the deck right now. Very helpful. Thanks a lot, Peter. Thank you. The next question is from Mike Harrison with Seaport Research Partners. Please go ahead. Hi, good morning. Was wondering in the Polyurethanes business, can you help us think about how to model the contribution of Geismar? I believe you said it would be a $10 million-$15 million contributor to EBITDA this year. What does that ramp look like? Are there some startup costs that we need to keep in mind that would weigh on Q2, and then turn into mixed benefits later in the year? The second piece of my question is any key turnarounds in Polyurethanes that we need to think about as we model out the rest of the year? Mike, thanks for your question. It's Phil. In terms of the splitter, as we've said, we'd expect to start up the facility at the beginning of quarter two, with really commercial products coming up towards the back end of quarter two. Think about the benefits coming in the second half of the year, and as we ramp that up through 2023 and 2024. We guided to $10 million-$15 million of EBITDA benefit in the second half of 2022. As you move through 2023, think about that as $30 million-$35 million of benefits. Then we hit the full run rate in 2024 at $45 million overall. To your second question, Mike, around any major turnarounds. Not this year. We continue to have turnarounds. You have to do many turnarounds every year with your MDI facilities. We don't have anything as significant as we did last year, if you recall, towards the back end of Q1 and the start of Q2 when we had the Rotterdam cluster shut down. Mike, I'd also just want to take a second and just remind you that as we look at this entire splitting capacity, remember that we are not adding MDI pounds into the market. We're taking existing MDI pounds, and we're upgrading that tonnage. That means that the polymeric materials that we have left is less in availability to our customers, which gives us the opportunity, again, we've got a growing demand, and at the same time we've got a shrinking supply going to that I would. I don't want to say that it's more commoditized. It's an important segment to us, but traditionally it's been one of our lowest margin products that we produce. As we move tonnage for the downstream, the existing tonnage that we have upstream, if you will, we have an opportunity to renegotiate those contracts, and I believe to make those contracts more competitive to where they justify the ongoing production into those materials. Not only are we seeing the benefit that Phil just gave you is the benefit that we're seeing just from taking the product and upgrading it to a higher level. There's also going to be a benefit to the North American MDI business that will come with the ability to renegotiate contracts on the polymeric side of the business that will also be benefiting the business. I'm not sure that benefit is going to be much less than what we have stated as to the benefit it's going to be that we'll see this year coming from the splitter project. Again, it'll kind of be tandem in what we're upgrading and also what's left. Excellent. Thanks very much. Thank you. The next question is from P.J. Juvekar with Citigroup. Please go ahead. Yes. Hi, good morning. Peter, great to see quick pricing actions in Europe. You had surcharges. You mentioned quarterly pricing going to monthly pricing. Which products benefited from that monthly pricing? What was the reaction from customers on monthly pricing strategy? Well, it probably wasn't the most popular thing we've ever done with our customers. But again, I think that it's necessary. I would say that it's done, the movement from quarterly to monthly was done across the board. It's been polymeric, it's done in our variants, it's done in our ISO contracts, the high-end contracts. It's across the board on all the contracts. It's something that I mentioned that may not be the most popular thing amongst customers, but I think that it gives them an opportunity also to better understand what we're going through on the raw material end. It does require more communication and more education as to why and what's going on. We will not be the shock absorber to the industry, as we said on our last earnings call, as we said on Investor Day. I think that's where our industry traditionally has been. We take raw material costs, and our customers have a tendency to not really see the day-to-day impact of it. I think we've got to do a better job in that area. Great. An unrelated question on China. You know, the reports that Chinese industrial economy is slowing down. You know, the government is trying to cut rates and revive that economy. What signs are you seeing in China? Has it impacted your business? Can you just talk about that? Thank you. Well, I think that as we look at China, we're trying to focus on those areas that even in an economic slowdown are going to continue to see growth and opportunity. Automotive continues to be, especially on the higher end, a growing market for us. As we look at the insulation, energy conservation, the entire cold chain, you know, a lot of the crops and so forth that are grown in China are done on the western side and brought into the large coastal high population areas. That cold chain is something that over the next couple of years is going to require a great deal of investment. As we look at the large infrastructure projects around rail and everything from sound absorption to the absorption on the rails themselves, the shock absorbers that go underneath the rails and what have you, we're seeing pretty strong demand in that area as well. I'd say if you're looking at like large commodity sort of applications that are readily turned around and exported, you probably are seeing a falloff in demand in a lot of those areas. Where you're investing in the economy, where you're investing in long-term and insulation infrastructure, the cold chain, automotive and so forth, it remains strong. Our associates there, you know, we've got a great Chinese national workforce that have they're doing an extraordinary job of building a business from the ground up there, not just on something that's just going to be based on the vicissitudes of the export markets. I see our business there as being quite stable. Thank you. Thank you. Thank you. The next question is from Mike Sison with Wells Fargo. Please go ahead. Hey, guys, nice quarter. You know, Peter, a lot of Specialty businesses are struggling to grow EBITDA here in the first quarter. I just wanted some color, you know, on Polyurethanes, how the differentiated businesses are going to do in Q1 and how they're going to generate the growth. Maybe a comment on Performance Products. I know you have an acquisition there, but you know, where are you seeing the growth year-over-year in Q1 there? We're seeing the growth in volume. But more importantly than volume, let's focus on value, right? I mean, one of the criticisms of Huntsman that I think has been unfairly thrown in our direction is the lack of volumetric growth. The chemical industry, by and large, I mean, we can go out and spend billions of dollars and grow volume for the sake of growing volume. But if you're not growing value in that volume, you know, I think that you're missing a great deal of opportunity. As you focus merely on a statistic, I look at our EBITDA margin in fourth quarter 2020 at 14% and our fourth quarter of 2021 at 15%. It's a 1% movement. If I look at it on a per pound basis, $0.16 per lb versus $0.23 per lb, an increase of nearly 50%. You know, I think we've got to do a better job as an industry and a better job, frankly, as a company, of focusing on results on a per pound basis. Again, when we talk about absolute growth in tonnage, I again, I'm not saying that we want to walk away from volumes. We obviously, it's an intricate part of our industry and of our business. But more importantly than just focusing on volume, I want to make sure that we're taking that volume that we have and we're investing in being able to upgrade it to get the ultimate value out of it. You know, that's ultimately where we need to be. That's where we're going to increase our margins, and that's where we're going to increase our trading multiple. Great. Thank you. Thank you. The next question is from Matthew Blair with Tudor, Pickering, Holt & Co. Please go ahead. Hi. Hi, Peter. I was hoping you could talk about dynamics in the maleic market, especially any comments on the demand side. Should we think of this rising crude oil price environment, should we think about that as being supportive to Huntsman's maleic margins because it would raise benzene feed costs for some of your international competitors? Yeah, the maleic market, it continues to be very strong. As we look at the largest downstream derivative of maleic anhydride, UPRs, you think about recreational vehicles, everything from boats to, you know, the construction markets to bathroom, kitchen fixtures and so forth. All of this remains quite strong. I think it'll remain strong for the, you know, for the next couple of years. We also are being very aggressive, though, as we look at the maleic market, as to moving as much of maleic into areas like fuel additives, lube additives and so forth, and trying to diversify that customer base as aggressively as we can. We want to make sure that our formulations and our downstream applications are going to be fulsome and that we're going to be able to sell it more than just one application here. As we look at its higher priced raw materials, we're mostly a North American-based company. North America, with butane as our raw material. Typically that is a benefit. Higher crude prices are a benefit to the maleic business for two reasons. One, butane's usually traded at a lower MMBtu value to crude oil. Maleic anhydride is also an energy producing production, meaning that it generates steam, it generates energy. Where we have a maleic facility, as we do in Pensacola, Florida, and as we do in Geismar, Louisiana, that are near and built in conjunction with larger chemical plants that are able to take that energy and effectively and efficiently use it, the maleic business will benefit from that. Long story short, higher energy prices I think are going to be something that is. It's certainly not going to be detrimental to the maleic business. Very helpful. Thank you. The next question is. Operator, I think we have time for one more question. We usually try to finish at the top of the hour. We've gone a little bit over that. We'll take one more question here. Thank you. We have the next question from Arun Viswanathan with RBC Capital Markets. Please go ahead. Great. Thanks for taking my question. Congrats on a good year. I guess just wanted to understand your thoughts on capital structure here. You know, your debt levels obviously have come down, and you've done a great job with de-leveraging. You've been able to increase your free cash flow conversion as well. You did kind of go through some of the organic projects you have in mind, but it looks like your CapEx is going to remain, you know, $300 million or below. You potentially have some cash coming in from you know, textiles disposition as well. When you consider all of that, where do you see your leverage going in, say, the next couple years? I mean, you know, would it be safe to think that maybe you could see that rise up to the two level? Or what do you think is optimal? If you do have all that cash, how do you plan to spend it, I guess? If you could just help us with that. Thanks. Well, I think we've said that we want to spend our cash, and we want to make sure that it's mixed over four areas. One of those being in making sure that we're investing organically within the business. Second, that we are looking at bolt-on acquisitions. Third, that we're paying a competitive dividend. Fourth, share buyback. If we're not able to have the opportunity to buy bolt-on acquisitions, I've been surprised at the high multiples that are being paid for, you know, for relatively decent businesses, but I'm not sure that they warrant some of the multiples that have been paid recently. We're not going to chase after those. We're going to continue to be disciplined in our capital and our M&A opportunities, and we will be increasing our share buyback, I would imagine. We'll get even more aggressive in those areas. We'll be looking at our organic investments as to where we can upgrade materials and obviously making sure that we pay a competitive dividend. If things continue as they are today, I would see more capital being pushed to share buybacks. Thanks. Thank you. Ladies and gentlemen, this was the last question for today's conference. This concludes today's conference. You may now disconnect your lines. Thank you and have a great day.