Greetings, welcome to the Huntsman Corporation first quarter 2023 earnings call. At this time, all participants are in a listen-only mode. A brief 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. It is now my pleasure to introduce your host, Ivan Marcuse, Vice President of Investor Relations. Thank you, sir. You may begin. Thank you, Maria, and good morning, everyone. Welcome to Huntsman's first quarter 2023 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 first quarter of 2023 via press release and posted 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 the 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 SEC for more information regarding the factors that could cause actual results to differ materially from these projections or 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 or loss, 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 and CEO. Thank you, Ivan. Good morning, everyone. Thank you for taking the time to join us. Let's turn to slide number five. Adjusted EBITDA for our polyurethanes division in the first quarter was $66 million. We continued to see significant destocking across our markets, specifically in North America. This destocking, combined with a competitive pricing environment, continued to put substantial pressure on the polyurethanes business during the quarter. The business conditions improved sequentially in both our European and Asian regions, driving a nearly 80% improvement in EBITDA compared to the fourth quarter. Overall sales volumes in the quarter declined 21% year-on-year. Volumes also declined 6% sequentially, which is in line with normal seasonality. All regions declined in the quarter versus the prior year, with the Americas accounting for 2/3 of the reduction, as lower demand and significant destocking significantly impacted sales volumes. Our European region did show a sequential improvement versus the fourth quarter as business conditions stabilized, destocking subsided, and costs moved lower. From our vantage point, business conditions appear to be steadily improving from last year's low point within Europe. Our automotive business delivered volume improvements versus both the prior year and prior quarter. Most other major markets in Europe showed stable to improved volume sequentially. Profitability in the region was helped by natural gas prices falling from an average of about $23 per MMBTU to about $17 per MMBTU. I will note that while natural gas costs are significantly lower today, they're still 6 x higher than the US Gulf Coast prices. In addition, while benzene was relatively flat sequentially, we did see an increase throughout the quarter, combined with continued competitive MDI pricing pressure. Nevertheless, we continue to make progress on our previously announced European restructuring initiatives and expect to start seeing some of the cost savings positively impacting our margins as we move through the remainder of 2023. We will continue to aggressively manage costs and match production to lower demand. With lower costs and moderately better demand, we do expect profitability in our European region to improve through the remainder of the year. As a result of this steady improvement, we are restarting our smaller MDI unit and will have both our MDI lines operational in the second quarter. This will give us maximum flexibility to match our supply with demand as we progress through the seasonally higher sales months. Europe is and will be a core region for our polyurethanes business, and we will benefit for many years to come from the region's needed drive for better energy conservation and efficiency. We remain well positioned to bring energy saving solutions to both residential and commercial construction markets, as well as innovative improvements to the light weighting of automobiles. In China, we did begin to see some green shoots with steady improvements in the first quarter, which was in line with our expectations. We expect China to remain on a steady but positive trajectory as the eco-economic environment slowly returns to normal. We are seeing positive demand trends in end markets such as the cold chain, infrastructure, and certain consumer-related markets. Our China PO/MTBE joint venture contributed approximately $11 million in equity earnings for the quarter. The largest headwind that impacted polyurethanes first quarter results, and which have continued into the second quarter, is the high level of destocking in our Americas region, specifically in our construction businesses. Remember that 2/3 of our polyurethanes Americas portfolio comprises of construction end markets. Approximately 40% is commercial construction, 60% is residential, of which 70% is related to new residential buildings. For composite wood products, which is linked closely to residential construction, demand was under significant pressure throughout the first quarter, with housing starts down approximately 30% year-on-year. This pressure is moderated going into the second quarter. Our spray foam business also appears to have bottomed and is now showing some slight improvements in order patterns. In our commercial-related insulation markets, the destocking continues to be aggressive and may last through most of the second quarter. Our visibility into the full supply chain is limited, and it is tough to project when our customers will return to normal order patterns. While we are seeing factors such as rising interest rates placing pressure on new construction spending, about 65% of our commercial business is tied to repair and remodeling, such as reroofing, which we expect to normalize once destocking concludes. Additionally, we remain on the right side of energy efficiency drive, and we will benefit from both improved building codes and the U.S. government's Inflation Reduction Act. Outside of construction, our global automotive business, which represents approximately 15% of the polyurethanes portfolio, delivered volume improvements both sequentially and versus the first quarter. We continue to expect volumes in automotive to be up low single digits for the year. In our elastomers platform, we see stronger profitability from quarter four into quarter one on the back of margin expansion despite overall demand weakness. We are taking decisive and proactive steps to make our polyurethanes business more efficient, stronger, and better positioned for when the current challenging macro conditions abate. We continue to monitor and adjust production rates accordingly, both at Rotterdam and at Geismar, to ensure we aggressively manage our working capital with cash generation as our top priority. We're on track to deliver the $60 million in cost savings we've laid out for polyurethanes as planned. This includes exiting geographies that are not generating acceptable returns and consolidating additional back-office functions. We have now exited our Southeast Asia polyurethane sites in addition to our announced exit from South America last year. We've also been working for many months towards an orderly exit from our Russian operations while ensuring we remain fully compliant with multiple sanction regimes in a highly complex political, legal, and regulatory environment. Today, Russia represents less than 1% of our corporate revenue, and we are hopeful that we can complete an exit during 2023. Looking further into the second quarter, we expect to see a seasonal improvement overall. We do expect continued destocking in the United States, but we see that destocking moderating as we move through the quarter. We anticipate the current improving demand trends in Europe and Asia to continue. Putting it all together, we expect polyurethanes adjusted EBITDA for the second quarter to be in the range of $85 million-$100 million. Let's turn to slide number six. Performance Products reported adjusted EBITDA of $71 million for the first quarter, equaling a 21% EBITDA margin, despite significantly lower demand versus the first quarter a year ago. This margin is in line with our long-term expectations of 20%-25%. The decline in adjusted EBITDA versus the prior year was driven primarily by a 31% decline in volumes year-over-year. This is partially offset by a slight improvement in unit variable margins and lower fixed costs. The volume decline was due to lower demand across all regions, particularly in our performance amines and maleic anhydride businesses. Despite significantly lower demand year-on-year, we did see improvements quarter-on-quarter, especially in Europe and Asia, indicating that the destocking experience in the fourth quarter is in the past. Markets where we saw positive sequential trends were construction and coatings and adhesives, which both saw significant destocking in the fourth quarter. We also saw modestly positive sequential trends in our product lines that serve agriculture, energy, and electronic chemicals, namely semiconductor and lithium-ion batteries. Capital improvements into our differentiated performance amines products serving polyurethanes, insulation, EV batteries, and semiconductor markets continue to move forward on schedule. As we have stated in the past, assuming stable macro conditions, we expect these projects to start up by the end of 2023. Performance Products is an attractive division, and we'll continue to invest in high-return organic projects and look at possible bolt-on opportunities when available. Far in the second quarter, overall demand continues to be below the prior year level, but is running steady with the first quarter across each of our regions. We believe customer inventories are below average, and we will see our volumes quickly pick up when end market demand returns. Overall, Performance Products Second quarter adjusted EBITDA should be in the range of $60 million-$70 million based on current demand visibility and with some moderate pricing pressure in ethyleneamines and maleic anhydride. With that, let's turn to slide number seven. Advanced Materials reported adjusted EBITDA of $48 million in the quarter, an increase of $7 million versus fourth quarter and down versus the prior year, due primarily to lower sales volumes. Destocking appears largely behind us, though we continue to see pressure on our infrastructure coatings market. Total volumes increased quarter on quarter and drove the adjusted EBITDA improvements. The sales volumes decline of 21% was due in part to our ongoing reduction of bulk liquid resin commodity sales. Our core specialty business was down, but less than the segment average. The Americas was the weakest region due to depressed demand, primarily from our coatings, adhesives, and general industrial markets. Our aerospace business continues to demonstrate improving trends. Sales were stable compared to quarter one of 2022, primarily due to some supply chain constraints and timing impacting sales in the quarter. Our order backlog is solid, and we expect growth as we move through the rest of 2023 and into 2024. Increase in demand for our products is heavily relied to wide body production rates, which have positive tailwinds with increased travel and new airplane orders from airlines. Our expectations remain that this important and profitable sector will return to pre-pandemic levels during 2024. We continue to seek out bolt-on acquisitions for Advanced Materials to grow and expand the overall portfolio, as well as improve the overall returns of the business. We are also continuing to move forward with organic investments such as our MIRALON business, which provide an innovative technology to capture methane, turn it into hydrogen, and a carbon material that can be utilized across many different markets. While still in development, we expect to aggressively scale this business over the coming years. With lower destocking and seasonal improvements, we expect Advanced Materials to deliver improved results in the second quarter versus the first quarter. We expect second quarter adjusted EBITDA for this division to be in the range of $50 million-$56 million with improved EBITDA margins. I'll now turn over some time to our Chief Financial Officer, Phil Lister. Phil? Thank you, Peter. Good morning. Let's turn to slide eight. Adjusted EBITDA for the first quarter was $136 million, compared to $387 million in quarter one of 2022, and $87 million in the prior quarter. The decline versus the prior year was driven by reduced volumes of 24% across the portfolio, particularly in construction-related markets. America's volumes declined by 31%, Europe by 28%, and Asia by 21%. As a reminder, approximately 40%-45% of our portfolio is linked to global construction markets via commercial, residential, and infrastructure spend, which all remained under pressure. Year-on-year pricing across our total portfolio was flat, while cost of sales increased by $40 million. Polyurethanes unit variable margins declined with year-on-year pricing pressure in all regions and increased raw material costs. In Advanced Materials, we expanded unit variable margins as price improvements exceeded cost increases, while in Performance Products, we managed to maintain last year's strong unit margin performance. Sequentially, volumes improved slightly in Performance Products and Advanced Materials, while Polyurethanes volumes were lower as destocking continued throughout the quarter, in addition to the normal seasonal decline. We did expand unit variable margins from quarter four in all three divisions, improving EBITDA by $65 million as reduced costs more than offset some downward pressure on selling prices. Raw materials, in particular European natural gas, declined compared to the fourth quarter. This cost decline led to an improvement in European profitability and positive adjusted EBITDA for the region. We remain focused on our European restructuring efforts during 2023. SG&A costs remain under control while inflation remains high across all of our operations around the world, and delivery of our full-year cost optimization savings during the remainder of the year remains paramount. SG&A as a percentage of sales was 9% on a last twelve months basis. As a reminder, we also have an increase in 2023 of approximately $40 million of non-cash pension expense, lowering adjusted EBITDA. Year-on-year foreign exchange movements impacted the business by approximately $4 million as the U.S. dollar strengthened. Sequentially, we saw a benefit of approximately $3 million as the dollar weakened during the first quarter compared to the fourth quarter. Equity income from our propylene oxide joint venture in China declined compared to quarter one of last year by $2 million, though improved slightly sequentially. Adjusted EBITDA margins came in at 8% for the company, with all three divisions improving sequentially. Polyurethanes at 7% margins and Performance Products and Advanced Materials continuing to deliver higher returns at 21% and 17% margins respectively. Turn to slide nine. We concluded quarter one with approximately $240 million of run rate savings from our starting point in 2020. In Europe, we have now completed all of our works council negotiations and are progressing the plans we laid out at the end of last year to reduce our European cost base by approximately $40 million. Regarding our global business service operations, we're expanding our new regional service hubs in Costa Rica and in Poland to include customer service and certain supply chain roles as we continue to build out those two centers. We're also addressing improvements that we can make to our manufacturing indirect costs with a focus on some of our larger facilities. In addition, as previously anticipated, we did complete our exit from our polyurethane Southeast Asia sites at the end of the first quarter. We expect to meet or exceed our $280 million annualized run rate target by the end of 2023, and as we guided on our last call, delivery of our 2023 savings amounts to an in-year benefit of approximately $80 million compared to 2022, excluding the impact of inflation and the increase in non-cash pension expense. Turning to slide 10. First quarter operating cash flow from continuing operations has an outflow of $122 million, driven by lower levels of profitability, a seasonal adverse movement in working capital, as well as our annual insurance premium payment. Free cash flow for the first quarter was an outflow of $168 million, and our last 12 month free cash flow to adjusted EBITDA conversion ratio stands at 41%, excluding proceeds we received from the Albemarle settlement in quarter two of 2022. Capital expenditures from continuing operations was $46 million for the first quarter, and we remain on track with our Performance Products projects targeted at energy saving installation, semiconductors, and electric vehicles. As a reminder, given the current economic environment and state of the construction markets, we have reduced our targeted capital spend by approximately 10% compared to 2022 to a range of $240 million-$250 million for the year. During the quarter, we completed the sale of our Textile Effects division to Archroma. As previously indicated, we expect final net cash proceeds from the sale of approximately $500 million after tax and after customary closing statement adjustments. We closed out the quarter with $2 billion in liquidity and net debt leverage of 1 times based upon a last twelve months adjusted EBITDA. As we progress through the year, we would expect our leverage ratio to climb from its current level, given a decrease in LTM adjusted EBITDA. Our balance sheet remains investment grade, and we continue to be committed to a balanced capital allocation policy. Adjusted earnings per share for the first quarter was $0.20 per share. Our 2023 increased dividend is in place at $0.95 per share, a 12% increase over 2022, and dividend yield is currently approximately 3.5%. We repurchased $101 million of shares in the first quarter, consistent with the guidance we gave on our prior call and in line with a total return of capital yield to shareholders of approximately 10% at current levels of market capitalization. Peter, back to you. Thank you, Phil. Having taken some time and read the comments from analysts regarding this quarter's results and seemingly more important, any view of Q2 and the second half of this year, I'm reminded of the fairy tale of Goldilocks and the Three Bears, where Goldilocks was on a quest to find the perfect temperature for her newfound gruel and comfortable sleeping quarters. Everything was too hot or too cold, too soft or too hot. It seems that every forecast is either too aggressive and thusly unbelievable or too conservative and thusly unbearable. I shall attempt to share a forecast wherein I hope not to share the same fate as Goldilocks being discovered by a family of hungry bears. There are three macro indicators that we need to see for the continuation of improvement to more normalized earnings. The first of these conditions is our North American market. We need to see an improvement in the massive destocking that we've seen in the fourth and going into the first quarter. This is not to say that we need to return to last year's build rate of 1.7 million homes, but rather just a stabilization to the present level of housing starts. While new homes starts have dropped 25%, our demand has dropped much more as builders work through their supply of building materials. It is our hope that we will see a return to demand consistent with today's numbers in housing starts. I believe that our spray foam business has moved through its inventory and our OSB business is quite close as orders are now starting to recover. Some building materials used in commercial buildings and warehouses, I think, will take as long as the rest of Q2 to work through its remaining inventory. We will see an improvement in North American demand when we work through our inventory, and another step up when we see a recovery in the number of home starts returning to last year's numbers. We are seeing signs that much of our MDI that goes into the construction market is modestly improving and inventory levels are stabilizing. The second macro indicator we're following is European energy. As we look to our European businesses, we continue to see the impact and headwinds of higher energy costs. While we are seeing lower natural gas prices than any time in the last two years, they're still 6 x higher than in North America. These higher prices are also taking a toll on consumer spending and confidence. Europe has been enjoying low energy costs due to unusual weather conditions and slower economic activities. Europe's overreliance on a fundamentally unreliable energy source while also paying for reliable backup energy production is rendering the region uncompetitive on the global economic stage. I am concerned when I see forward electricity prices in France for this upcoming winter at near record prices that we are not improving a system that is simply not working. While we are all in hopes of lower energy costs, this is hardly a solution. We will continue to cut costs and do whatever we can to offset these higher costs. At the same time, we'll focus on those markets in Europe that will prosper, such as aerospace, energy conservation insulation, light weighting, adhesion, and the automotive industry. Finally, the third macro indicator is the Chinese economy. We continue to see improvements in demand as this massive economy reemerges from COVID lockdown. Having visited some of our sites in China this past week, I have a renewed sense of optimism that this recovery will continue and should lead to higher prices and margins. In short, we're seeing demand improve across a number of our business groups. This will obviously improve as inventory levels return to better match day-to-day demand. We are maintaining our market share, lowering our costs, pushing for higher prices where we can, and looking for ways to create faster shareholder value. We remain optimistic that this recovery continues while also preserving our investment grade balance sheet and continuing to reduce costs should this recovery prove to be transitory. These steps will allow us to take full advantage of improving markets as they happen. With that, Maria, I'll turn the time back over to you, and let's start the question and answer session. 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 that your line is in the question queue. You may press star two if you would like to remove your question from the queue. We ask that you limit your questions to one so that others may have an opportunity to ask questions. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Our first question comes from Mike Harrison with Seaport Research Partners. Please proceed with your question. Hi, good morning. Peter, was wondering if you could maybe give us some thoughts on how you expect the second half to unfold. Obviously, you've given us your Q2 outlook that includes still a lot of destocking. As that destocking subsides, it seems like we could see a pretty substantial step up in EBITDA in Q3. Maybe talk about some of the puts and takes that you're seeing in the second half. Thank you. Well, Mike, thank you very much. I think, yeah, as we look at the second half, I don't expect it will still be anywhere in the mode of destocking. That's not to say that everything's gonna be destocked by July 1, but I think it will be through the vast majority of that. As I think about the biggest area of concern for me, which is our U.S. MDI, where 2/3 of that goes into the construction market. I kind of break that out into three areas. We have 40% of that going into our spray foam business, Huntsman Building Solutions, of which I think all that inventory has basically been depleted, if you will. 30% of that goes into composite wood production, and I think that inventory is fast normalizing. The price for composite wood panels and orders are, I think, are both stabilizing, which are very good signs for us. I think that's pretty much run its course. As I look at the other 30% of that 2/3 construction demand of MDI in North America, that's going into what I'd consider the composite insulation panel. That's gonna be everything from roofing on warehouses to siding on office buildings and, you know, those sort of miscellaneous applications. That, I think that 30% probably has another month or so to go. Again, I don't have perfect vision into that. Yes, I think by the end of this quarter, and I look at the biggest areas that are being impacted in the business around destocking, mainly North American MDI, I think that we're pretty much done with that. I also think in the second half, we're not going to continue to see the impact of lockdowns coming out of lockdowns in China and the Chinese New Year celebration and so forth, which typically is a drag on our Q1 numbers. Again, I as I sit here today, having just returned from China a couple of days ago, and met with our, you know, face-to-face with our sales management and our various teams in China and so forth, there is quite a bit of a sense of optimism and so forth. I don't think that China's gonna come flying back and have a full recovery in a quarter, but I think it's gonna continue to be a gradual improvement between now and the end of the year, which ought to help tip the balance on a more optimistic view, at least, of the second half of the year. As I think about it, Advanced Materials and Performance Products, I think for the most part, the inventory levels of that destocking in those areas is largely either depleted or rather de minimis. It has more to do with just pricing competition and overall demand. Look at something like Performance Products, our margins on a per pound basis really haven't moved in the last year. What we've struggled with in Performance Products is the overall demand and the overall volume that's in that business. As that volume recovers, obviously, you'll see the profitability in that business recovers as well. I think that will certainly be a second half event. In the second quarter, as I said in my prepared remarks, we're seeing rather flat demand from Q1 - Q2, with some pressure on pricing in some of our products. I think as we look across the board, de-inventoring is going to become less and less of an issue. I think raw materials hopefully will stabilize, we continue to keep an eye on Europe. You know, but I again, as I try to look out in the second half, I wanna be absolutely clear here. Yesterday, you know, we were all running around worrying about regional banks that were dropping by double-digit percent. This morning, seemingly that crisis is over and all the regional banks are up double digits. The market lost a half a trillion dollars in value yesterday, and today we've gained a half a trillion dollars. I, you know, I don't wanna get, you know, so transfixed in the second half of the year that, you know, we're ignoring the day-to-day impacts that we're seeing in the macro global economies. I think what is important is that we stay focused on controlling those things around cost, having a quality customer base, matching our production working capital with the demands in the market. When the recovery does come, that we are there to take full advantage of it as quickly as anybody else in the market. Mike, sorry about the long rambling there, but I think it's a very good question and that should tell you that there are some positive issues in the second half, but I've also haven't much clarity for the next 48 hours. Our next question comes from Michael Sisson with Wells Fargo. Please proceed with your question. Hey there. Thanks for taking my question. This is Abigail on for Mike. I wanted to follow up on your. You said that you're managing production to meet lower levels of demand. I just wanted to get a feel for where your MDI operating rates are about now, and realistically, how low you could bring them in order to meet lower levels of demand. Well, I think that the lower levels of demand was probably more of a fourth quarter issue. We are seeing demand improving in the first quarter and going into the second quarter. We did reduce our rates in at our Rotterdam facility when we saw demand plummet at the end of last year. Our operating rates were, you know, in the high 60s, around 70% utilization rates. We are now seeing that we're able to sell more than that, so we will be operating all of our MDI lines, albeit at a reduced rate. All of our MDI lines will be operating back in Rotterdam. We'll be producing those as we're able to satisfy the needs of the marketplace. I would say that across the board, we're probably seeing a 70% - 80% utilization rate. That's gonna vary. Obviously, you look at the United States and North American market, it's much higher than that. If I were to assume that the imports that are presently coming into North America, you know, were stripped out. Nevertheless, I think you've got to look at least on the polymeric side of MDI, you've got to look at that as somewhat of a global market. Our next question comes from David Begleiter with Deutsche Bank. Please proceed with your question. Thank you. Good morning. Peter, back on to Chinese MDI, how impactful of imports of those products into the U.S. have been? When do you think the recovery in China could forestall further imports of Chinese MDI into the U.S.? I think that the Chinese imports coming into the U.S. is around 20%, and that's pretty much. I think that's pretty well kinda matched the economy as the economy slowed down and picked back up. I don't, I don't get a sense that there's a flood of Chinese material coming into the U.S. and, you know, that somehow is, is a drag on pricing and so forth. I, you know, as China recovers and continues to see demand, obviously Chinese production is much better off being produced and sold in China, and they're gonna make a lot more money selling it in China. I would assume that that will be a deterrent when that demand continues. As that demand continues to improve, that'll be a deterrent to export. Look, there's Chinese production that is I think is probably going to be coming into the U.S. on a permanent basis, as a large Chinese producer has a commitment to this industry and to supply a certain segment of it. I don't see that product awash in this market to the detriment of the market. Our next question comes from Frank Mitsch with Fermium Research. Please proceed with your question. Thank you so much. Peter, you indicated that you're gonna restart the lines in Geismar and in Rotterdam this quarter. I'm just curious how we think about the sequential improvement coming from restarting those plants and what the restraint on profitability might have been in the first quarter. Also, obviously, congratulations on completing the sale of Textile Effects. I was wondering if there was scope for now that that business is gone, if there was scope for improvement in terms of your corporate expenses, in terms of maybe rightsizing that. Any help there will be very helpful. Thanks. Yeah. I'll let Phil comment on the overall corporate expenses at the bottom line. Of course we are, and we're trying to, you know, look at making sure those expenses match our company size. Is, I wanna be very clear. When we talk about restarting MDI lines. Right now we've announced the restart of Rotterdam and the restart of Geismar has yet to take place. We've not made a decision yet to restart that facility. Mm-hmm. In order to do that, we'll need, you know, probably about two months or so lead time to get that idle facility up and going in full. Yeah, as I look at the amount of profit, Frank, I wanna be very clear on this. I don't think we've been constrained by not having that second line running in Rotterdam. What we've seen is the amount of inventory that we have in Rotterdam and the capacity of the existing plant has now reached, according to our sales forecast and the orders we have on the books, have now exceeded that 70% of production. We need more production in order to meet demand. Again, we'll be running all of the lines in Rotterdam, which is two, but that doesn't mean that we're gonna just be running them at 100% and slogging the market. I'd say that both those lines together will be running at around 80% utilization rate. On the corporate expenses, Frank, I think we guided on the last call to about $175 million in 2023. It's actually down from 2022 once you strip out about a $20 million benefit that we got from transactional FX in corporate last year. We will be down year-over-year. As Peter said, we'll continue to focus on that. When we sold Textile Effects, we removed all of the costs that were allocated directly to Textile Effects. You'll have a combination of all those costs have gone and corporate costs down year-over-year once you take account of FX. As Peter said, you know, our focus is on completing our overall cost savings program, our cost optimization program, where we're targeting in total additional $80 million year-over-year of cost savings. Thank you. Our next question comes from Aleksey Yefremov with KeyBanc Capital Markets. Please proceed with your question. Thanks and good morning, everyone. Peter, could you talk about your costs in MDI in Europe? How do they compare currently to your U.S. assets, China assets? Are you exporting any MDI from the U.S. to Europe? Yeah, I think that when we look at, you know, the gives and takes on all of these things, you know, in the U.S. we have a bit higher chlorine and caustic costs than, but we've got lower energy costs in the U.S. and Europe. You know, we're advantaged when we look at such things as tariffs and so forth. You know, where you've got if you're selling moving product to China, for example, in the U.S. you've got a 25%, 30% tariff where Europe you're looking at a single digit. There's internal and there are external forces as you look at these as you look at these. By and large, the gap between Rotterdam, without getting into too much specificity on a cost per ton basis, fair to say that the gap between the three regions has now shrunk to a point where they're all within freight distance. Or say, if you think about the cost of freight between the three regions, they're all lower than that. There is not a lot of advantage, unless you're desperately short of particular tonnage. There's not a lot of advantage of moving from one region to the other. Our next question comes from Arun Viswanathan with RBC Capital Markets. Please proceed with your question. Great. Thanks for taking my question. First off, on the outlook, you know, if you kind of look at the first half versus second half, I know this question was asked earlier. What is it gonna take? Is it really just come down to kinda China recovering, maybe some better construction or automotive trends? You know, what is it gonna take for maybe a little bit better performance in the second half? When you think about that, the destocking, is it really you noted it was maybe a little bit more pronounced in North America. Is that kind of in construction areas, or where specifically are you seeing that? Yeah. I'd say that the destocking is probably, as you look at it on a global basis, it's three quarters of the of that destocking is taking place in North America. I think that's where you see the greatest concentration of that taking place in the building materials in U.S. housing. That's not to say that we couldn't see other destocking take place. Europe, by and large, after COVID, stayed in a pretty lethargic state, whereas the U.S. housing, you know, 12 - 24 months has really, you know, gone up considerably, and it's come down. There was a lot of stock that was built up. Think of a year and a half ago when MDI was short, not just MDI, but a lot of building materials were very short. A lot of people were buying excessive amounts of materials and stockpiling it. Again, it's not just an MDI issue in the U.S. housing market. It's a number of raw materials from lumber all the way on through that's going. When we talk about a de-inventoring process that takes place, it's not just around MDI or around a particular chemical. It's largely the whole chain. Again, I believe that in North America, where I think that you have the greatest opportunity for improvement relative to where we are today. If we could get through that destocking, I think that starts to give us price leverage, and it gives us improved volume. Again, you're going to be selling into a housing market, a housing start market that is 25% against smaller than it was a year ago. As that now improves the number of homes being built, and that's gonna be a whole number of issues from demand to mortgage rates to consumer confidence and so forth. As that number increases from its present 1.2, 1.3 million homes per year sort of run rate back up to its 1.6, 1.7 run rate that we saw a year ago, you'll see another push for demand and another opportunity for pricing improvement. I think in North America, again, you're gonna be seeing a lot of, you know, kind of a multi-step. Europe, I think you're gonna have to just see a continued across the board GDP improvement coupled with an energy policy that needs to be established and needs to allow manufacturing to be competitive. It's not gonna help us a whole lot if you see a recovery in the economy in Europe and energy remains for electricity and for natural gas and natural gas byproducts that remain, you know, 5, 10x higher than the rest of the world. You know, we, there's gotta be some sort of a change, and continuous improvement takes place there. Again, in China, I think that one's just a question as to how quickly do they get back to, quote, "a normalized run rate." I'm as optimistic as I am. I think that it's gonna be a steady but gradual improvement between now and the end of the year. Our next question comes from Kieran de Brun with Mizuho. Please proceed with your question. Hi, good morning. You know, you clearly have a very strong capital position now, you know, after closing the textile business. You have cash flow that's being generated in the back half of the year. How should we think about your capital deployment priorities, and how does M&A, if at all, now fit into your story going forward? Thank you. Yeah. Thanks, Kieran, for the question. As we said, a balanced approach to capital in terms of policy, making sure that we maintain our investment grade, which in general, over time is a net debt leverage ratio of 2 x. We have said that we would deploy approximately $400 million of cash into share repurchases this year. We feel that that is competitive from an overall return to shareholders perspective. We do have the flexibility and the leverage, particularly with the portfolio we have going forward, to deploy cash into M&A. In order of priority, very clearly for us, Advanced Materials is an area that we would like to seek out bolt-on acquisitions, as we did during the COVID timeframe, where we added CVC, Gabriel to our portfolio, horizontal plates and Advanced Materials. We would look to build up that business as bolt-on acquisitions become available and as they become available from a value perspective. In general, if you look over the past couple of years, they've been pretty high, and we've therefore stayed on the sidelines. We think going forward, there should be some value to businesses. Balanced approach overall, and we've got a strong enough balance sheet to be able to do both. Our next question comes from Laurence Alexander with Jefferies. Please proceed with your question. Good morning. This is Dan Rizzo on for Laurence. Thanks for taking my question. You mentioned that the push for increased energy efficiency is a tailwind in the U.S. and U.S. construction. I was wondering if it's a kind of a similar potential secular tailwind in China, where they're looking to do that as well, or is it really not material in that region? I would say that it's not as material, but yes, it is going to continue to have an impact on the business, particularly around EVs. A lot of the infrastructures that we're selling into, you think about pipe and pipe, where you're re-insulating hot water lines, utility lines and so forth. That's a big application for us in China. I mentioned the EV market, light weighting and so forth. There's also a very large investments being made in China on building out the power grid system that is going to continue to help with us. As we think about our Advanced Materials and as we think about our, polyetheramines going into wind and, the amount of wind blades and so forth that are needed, not just in China, but, more and more of the world is becoming dependent on China to produce wind blades and to produce the components for batteries and solar panels and everything else. A lot of what the world's going to need as far as these various components around, a Green New Deal, if you will, so long as the United States has an anti-mining policy and anti-production policy around many of the components going into these end applications, we're going to see real growth in China. For a lot of these components, be it wind blades, be it EV batteries, solar panels and various other products. Thank you very much. Our next question comes from John Roberts with Credit Suisse. Please proceed with your question. You know, Peter, given your exposure to housing, I would have thought that Three Little Pigs would have been a better fairy tale than Goldilocks, but. That's a good point. You know, especially that insulated house where the wind wouldn't have been able to get through. Anyway, Huntsman Building Solutions has a lot of small competitors. Are you seeing any signs of distress among your competitors? Are you gaining any share even though the market's down? I wouldn't say anything that is appreciable or material to our bottom line. You know, I look at as we move further and further downstream, I think about, you know, HBS, where, you know, you're making up 40% of that 2/3 of our MDI. We really don't compete against another MDI producer. We don't compete there against another polyurethane. Really, we're competing against competing applications, competing material, mineral fiber, and other smaller entities. We'll certainly see this going downstream more and more, but at this point, I wouldn't say that it's having any impact on the business. I would say, John, that for HBS in particular, that market has changed over the last 5-10 years. I think it's become a little more consolidated with some of the larger strategic players coming into the market. You actually see less of the smaller players in that market today. We think that's good. We think that's good from a discipline into the end market in terms of making sure that the appropriate products are sold and they're applied correctly. That's, yeah, that's an excellent point. It comes like, Owens Corning, so forth. They used to be exclusively mineral fiber now moving into the spray foam business. You know, that's frankly, that's good for us. Our next question comes from Hassan Ahmed with Alembic Global. Please proceed with your question. Morning, Peter. You know, a lot of commentary about MDI volumes and the like, and, you know, you also touched on, you know, the sort of goings on the raw material side of things. You know, just wanted to get a sense of what you guys are seeing in terms of sort of global MDI cost curves. You know, you guys, obviously, you know, and you touched on that, are relatively cost advantaged. You know, you had like around 4-ish% EBITDA margins in Q4, around 7% EBITDA margins in the polyurethane segment in Q1. I would like to imagine that, a chunk of your competitors are maybe at break even or negative EBITDA margin levels. You know, any thoughts around cost curve positioning and how that may actually give the market some buoyancy would be appreciated. I think, Hassan, excellent question. I won't be saying anything about our competition, not 'cause I have a lawyer in the room, but just because I really don't follow them all that well on profitability and per ton. I look at our three regions, Rotterdam, Geismar and Kaohsiung, and you look at the kinda the four components that I look at manufacturing a ton of MDI. You've got, you know, benzene, I've got natural gas. When I talk about natural gas, that's everything from electricity to hydrogen to steam to CO. I mean, it's a whole range of products, right? It's not just the price of natural gas, but what natural gas does to all those. Then you kind of got your cost, caustic and chlorine, which is I'd say would be the fourth component. Then your third component, then your fourth component is gonna be labor, which you would think would be a big flywheel, but in actuality, these plants do not employ a lot of people. They employ a lot of people downstream and in ancillary businesses to keep these operations running. The number of people that you have actually working on a shift to keep an MDI plant, working, so kind of reverse it, of those four steps, I would say that labor is probably immaterial as far as one region competing versus the other. I would say that benzene is probably immaterial in the sense that it is a fungible global commodity, and we buy benzene from all over the world, source it from all over the world. The difference between benzene costs in North America to Europe to China is not going to drastically differ. I will say that where we see the biggest variability of differences come in the cost of natural gas. During the peak of last year's energy crisis in Europe, the cost delta between China and Rotterdam, where China's gonna see an energy that's more coal-based. Europe's gonna see an energy that's more wind, coal, and whatever else they've got going, was nearly was actually in excess of $1,000 per ton. That was only for a relatively short period of a quarter or so. We've never in the history of MDI, at least that I followed, have ever seen a $1,000 per ton difference just because of natural gas prices, energy prices, between one region and the next. That volatility, that's gonna be your single biggest variable. Then you get into caustic and chlorine, and that's gonna be. Again, that's gonna differ region to region, depending on supply and demand and the energy costs and values that go into that. component. That's not going to be much more than, you know, $100 and change different from region to region. It really is that energy component. I know I harp a lot on that, but I would just remind you, when we go back to 2019 and 2020, as recently as just two or three years ago, Rotterdam was consistently our cheapest MDI in the world. And cheaper than China, cheaper than North America, and as far as the production cost basis. That's the impact that energy policy, failed or successful, you know, has had on an operation like that within, you know, a year and a half after being the lowest cost operating facility, one of the lowest cost operating facilities in the world. Europe now finds itself is so... I mean, $1,000+ a ton out of the market, which is, what? Three times the cost of freight to get product from one place to another. Our next question comes from Jeff Zekauskas with J.P. Morgan. Please proceed with your question. Thanks very much. The cash flows were negative $122 million in the quarter, and part of that was a decrease in your accounts payable by about $50 million sequentially. Usually accounts payable goes up, I don't know, by $100 million. What were the sources of the changes in payables? Does that have to do with reverse factoring? You know, that is our financing terms for buyers changing in a higher interest rate environment, and does that affect your cash flow expectations for the year? Yeah, no. Jeff, it's Phil. Working capital came in as we expected and cash flow overall as we guided. The big element that you're talking about there on accounts payable is really related to our insurance premium that we pay in the first quarter every year. That wasn't a surprise to us. I think we guided that on the previous call overall. As you look forward, we're focused on maintaining our working capital to the appropriate degree, given the underlying economic conditions that we have. Obviously, cash flow will be under more pressure with lower EBITDA year-on-year, which is what we've said. A large focus for us on making sure that we're managing our working capital appropriately. If you look at the cash conversion cycle, the number of days, we're no real different to where we were last year at all. I think we're managing that in an appropriate manner. Thanks for the question. Okay, thank you. Our next question comes from Matthew DeYoe with Bank of America. Please proceed with your question. Morning, everyone. Peter, you mentioned briefly that you're expecting some price weakness in ethyleneamines in maleic, and, these are kind of hard markets for us to get a handle on. So as we look at price in your comments, I mean, how much are they actually falling and kind of what level are they now versus perhaps, pre-COVID? If, you know, if pre-COVID is even the right benchmark. If not, maybe what's a better, benchmark on price? Yeah, I think the prices, you know, from a pre-COVID basis, we certainly have seen prices on both of those products come down since the pre-COVID time period. You know, I think that as we look at pricing in those areas, it's just become more competitive, mostly among domestic and mostly with derivative demand of those products. Neither one of those have a great deal of competition, number of competitors and so forth. It's a combination of just what we're seeing on the domestic market and what we're seeing on downstream demand and volume pull-through. Fair to say that those prices of those products are a little bit lower than they were on a pre-COVID basis. And I think, Matt, we were guiding really to, to moderate pressure quarter on quarter, Q1 - Q2 for those products, which is really demand driven, and underlying market conditions driven overall. But our focus is on what our unit variable margins look like. And obviously you've got some of the raw materials there, such as butane, such as EDC caustic, dropping as well. Our focus remains on unit variable margins... Yeah. In what are fairly difficult end market growth conditions. Now as we look back to the performances of where we were a year ago in that business around, you know, that $150-ish sort of EBITDA on a quarterly basis, that's largely gonna be driven by demand. That's, you know, we just need to see demand pick up at the end of the day. The margins are there. The pricing discipline I think is there for the most part. It's demand. Our next question comes from Kevin McCarthy with Vertical Research Partners. Please proceed with your question. Good morning and thank you. Peter, within Performance Products, how would you compare and contrast your volume experience for maleic versus amines? Are you seeing any green shoots there whereby you would expect to be able to take up operating rates sequentially? I'd say good question, Kevin. On the maleic side, I think that the demand we're seeing is gonna be pretty flat. The biggest offtake that's going into is unsaturated polyester resin. Think about, you know, a lot of home Hotel, recreational vehicles and so forth. Yeah, I don't see those markets. I see them gradually improving over time. Again, from an inventory point of view, I think there's the destocking there has taken place and those markets will continue to gradually recover. I don't see that bouncing back, you know, all that quickly. Operator, we're at the top of the hour, and I'm cognizant of people's time. Why don't we take one more question, and then we'll let everybody go. Okay, great. Our next question is from Angel Castillo with Morgan Stanley. Please proceed with your question. Hi. Thanks for fitting me in here at the end. Just, I guess, a quick follow-up on restructuring. You said you're continuing to progress on your European restructuring. Just curious if there's any other, beyond some of the, you know, assets that you've shut down and that you moved away from, I guess anything incremental that you might be looking at, you know, that might provide greater opportunity for cost savings from an asset restructuring perspective? Thanks for the question, Angel. I think we've guided in terms of cash that we were looking to spend on restructuring this year of around $100 million, excluding capital. I think we're still on target for around those sort of numbers, and you can expect a lot less cash out in 2024 as we basically get those savings into our run rate. Honestly, our focus this year is completing our European restructuring and delivering on some of the savings which actually came through right at the end of the first quarter. I did say in the earlier remarks, we're focusing on some of our manufacturing costs and making sure that we're appropriately managing those indirect costs as well as we move forward for the remainder of the year. Thank you. We have reached the end of our question and answer session. This concludes today's conference. Thank you for your participation, and you may disconnect your lines.