Greetings. Welcome to the Huntsman Corporation's Fourth Quarter 2023 Earnings Call. At this time, all participants are in listen-only mode. A question-and-answer session will follow the formal presentation. If anyone today should require operator assistance during the conference, please press star zero from your telephone keypad. Please note, this conference is being recorded. At this time, I'll now turn the conference over to Ivan Marcuse, Vice President of Investor Relations and Corporate Development. Mr. Marcuse, you may now begin. Thank you, Rob, and good morning, everyone. Welcome to Huntsman's fourth 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. Yesterday, on February 21, 2024, after the U.S. equity markets closed, we released our earnings for the fourth quarter of 2023 via press release and posted it to our website, huntsman.com. We also posted a set of slides and detailed commentary discussing the fourth quarter of 2023 on our website. Peter Huntsman will provide some opening comments shortly, and we will then move into the question-and-answer session for the remainder of the call. During this call, let me remind you that we may make statements about our projections and 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 and 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, CEO, and President. Ivan, thank you very much. Thank you for joining us this morning. Last evening, we released our prepared remarks for the fourth quarter 2023 results. Before opening the call to questions, I'd like to take a few minutes and share with you our latest plans and views as we enter the second half of the first quarter. At the outset, I remind you that we have complete financial results for the month of January, but still have two more months until we know the full results of the first quarter. I'm also still a bit haunted by the ghosts of a year ago, when many of you, and most companies, were projecting 2023 to have a weak beginning, but a very strong second half. Second half proved to be nothing short of a disaster. Let me begin by sharing with you our five main goals for this year. First, this will be a year wherein we will recover some lost sales from 2023. A year ago, we showed strong pricing discipline early in the year, and in many cases, we held the line and kept pricing from falling faster than they otherwise would have. In some cases, we lost business to competition, who were pushing volume over value. Going forward, we will be pushing much needed price increases in most of our product ranges, but we will also be negotiating to get back some of that lost volume. Our second priority will be to improve our free cash flow generation. This will be at the top of our incentive pay targets for 2024. We will do this through a continued focus on working capital, controlling both indirect and direct costs, and moving more volume and higher prices. Our third priority is to maintain discipline in our cost structure. We will complete our previously announced cost reduction programs in each of our divisions and our corporate functions. We will also be focused on offsetting projected 3%-4% inflation increases. Our fourth priority will be to continue, as we have for the past several years, assessing our portfolio on an ongoing basis to ensure that we are the best owners for the businesses and assets that we have. We will continue to look for M&A opportunities to expand our more differentiated downstream businesses. Lastly, and most importantly, we will invest to continue improving our environmental and safety stewardship and our operating reliability. This focus on managed risks will also apply to our investment-grade balance sheet. Our board of directors remains committed to returning cash and value to our shareholders. To this end, we will be raising our dividend by 5% a share to $0.25 a quarter. While we do not plan to buy back any shares in the first quarter, we look forward to restarting our buyback program as soon as market conditions warrant. As I said at the beginning, it is still too early in the quarter to make bold predictions. However, the order patterns that I'm seeing in most areas of the world tells me that in most of our divisions, we have seen the end of a very long period of inventory drawdowns, and prices and volumes look to be gradually improving. With the restarting of China's economy post-New Year celebrations, I feel more optimistic than I did at year-end and see more proverbial green shoots than I have over the past 12-18 months. We have a lot of recovery before us, but I believe we're taking the right steps in the right directions. Thank you very much, and with that, operator, why don't we open the line up for any questions? Thank you. If you'd like to ask a question at this time, please press star one from your telephone keypad, and a confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For those participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. So that we may address questions for as many participants as possible, we ask you to please limit yourself to one question and one follow-up. Thank you. Our first question today comes from the line of Mike Sisson with Wells Fargo. Please proceed with your questions. Hey, good morning. Peter, you know, volumes in Polyurethane seem to have stabilized a bit in the fourth quarter. Yeah, how do you think volumes sort of, you know, unfold in the first quarter? Or you had sort of mentioned that order patterns look a little bit better. And then when do you think you will—we can see an inflection point for growth in 2024? Well, I think that, again, you're going to continue to see a gradual improvement throughout the first quarter, both in pricing and in volume. When I look at it on a prior- year basis, I would imagine we'll probably be seeing an improvement in the first quarter. Again, just looking at order patterns today and so forth, probably around mid-single digit sort of growth. And that's gonna be pretty much across the board. We're looking for growth to take place, as we've seen the cessation of de-inventoring in North America around housing and construction. And in China, we continue to see a bit of a rebound in construction, but mostly in automotive, and mostly as we look at infrastructure projects. In Europe, you know, well, I think we'll just see a continued gradual recovery across the board in Europe. Got it. And then if volumes do recover, what do you think needs to happen to shore up sort of either pricing or profitability? And maybe, you know, give us a thought on what the Polyurethanes segment should be able to do longer term in terms of, sort of margins and earnings power. Well, I think, you know, MDI, I've not seen anything structurally that has changed in MDI. This is a mid- to upper-teens sort of business during its normalized basis. And when you see MDI capacity utilization, usually somewhere in the mid- to upper 80s, particularly the upper 80s, you know, pushing 90%, you're going to see pricing power. I think the industry today, globally, is somewhere in the low 80s% capacity utilization, with a little bit of an improvement over what we've seen in previous quarters. Remind you that the last quarter, we were talking about global operating rates being probably in the mid— so we are seeing a bit of an uptake there, and but we need to see sustainability. Again, last year at this time, we were talking about, you know, a stronger second half of the year and so forth. And I think that what's gonna be important this time, or this year, is that we just see a long, steady recovery in volume and allowing us to recover the pricing as well. And I would say that across the board in virtually all of our products, not just MDI. Thank you. Our next question is from the line of Josh Spector— Thank you, Mike. With UBS. Mr. Spector, please proceed with your questions. Hey, guys, this is James Cannon on for Josh. Thanks for taking my question. Just looking at AM, you called out volumes down again against a weaker year-over-year comp. I was wondering, is there any impact from the ongoing BLR rationalization, or is that pretty much done at this point? No, I don't think that we've seen any impact from BLR rationalization. I mean, in our case, you know, we're seeing a little bit of fluctuation in order patterns on aerospace and so forth, but I wouldn't say that any of those are really material trends. A lot of that's just gonna be timing on year-end inventory. And, you know, as you look at something like aerospace or in automotive, how many parts are in the OEM supply chain or car companies shifting from EVs to hybrids to ICE, and, you know, that'll cause some disruption on a quarterly basis. But I don't see anything in Advanced Materials that would give me that would give me any concern about order patterns or sales. If you think about it, less than 10% of our Advanced Materials portfolio now is BLR. We've deselected an awful lot over the years, focused on the higher margin businesses, and that generates less than 5% of the profit. It's not our focus from a portfolio perspective. Okay, thanks. And then just on the aerospace, there was an incident earlier in the quarter that led to the FAA limiting production at a major aircraft manufacturer. Is there any impact on the first quarter guide from that? No. No, I would just remind you, it goes without saying, we didn't have anything to do— I mean, our products and so forth had nothing to do with that, with that manufacturing problem that Boeing had. So no, I don't, you know, we look at it overall, we don't see any impact in the first quarter because of that. Yeah, and if you think about it, our exposure is in general into wide body aircraft, into the relevant aircraft is less than 5%. So it's, again, for any recovery that we have, it's all focused on the wide body material that we sell into that end market. Our next question is from the line of John Roberts with Mizuho. Please proceed with your questions. Thank you. You decided that you're gonna restart your smaller Geismar unit. Maybe it didn't sound like that was maybe quite justified yet. Maybe that should come a little bit later, but maybe you could talk about where you think that volume's gonna go. Yeah, that's 100, I'd remind you, it's 130,000 tons of volume, you know, roughly 250 million pounds. And so we're looking at that sort of volume being a relatively small percent increase in the overall, you know, in the overall scheme of things. I would just say too, that as we look at restarting that, it does take time to restart an asset like this. Probably could take as long as, you know, throughout the entire quarter, going into the second quarter. The second quarter is usually pretty strong demand for OSB, CWP, you know, insulation, our building materials. And just because we're operating that line, doesn't mean that we're gonna put all 130,000 tons into the market on day one. That will gradually be fed into the market as the market needs it and so forth. But, looking at today's order patterns, what we're hearing from our customers and so forth, we feel that we need to start that asset up. John, we've been operating globally at between 75%-80%, the market's in the low 80s. So that should give you some indication that we're simply moving up to the market levels. Thank you. And then is the Boeing situation affecting your epoxy supply chain at all? No, we're not seeing any issues today on that. You know, I would remind you that we're supplying our customers that then supply Boeing, or in some cases, our customers supply an OEM that supplies Boeing. You know, what impact that may have if Boeing were to slow down production and so forth, we may not feel it for a quarter or two. But no, I don't see any reason today. We're certainly not seeing anything that would impact that. Our next question is from the line of David Begleiter with Deutsche Bank. Please proceed with your questions. Thank you. Good morning. Peter, just on MDI, what would it take to return to mid-cycle operating rates in MDI? And is there a path forward to a peak later in this decade? I think that as we look at you know we kind of look at the three regions. I think that as we look at the U.S. housing market, I think that a recovery in housing could be at you know that 1.5-1.7 you know kind of where we were just a few years ago which I think is still well below the 2 million level you know that people are saying is kind of the sustainable rate. If we look at housing that recovery of housing and I think again it's—w hat was really painful over the last year and a half was the de-inventoring that took place. It wasn't necessarily that housing dropped to, you know, 900,000 units or something like we saw during the Great Recession. It was a massive amount of de-inventoring that took place and how much inventory was in the system when that de-inventoring started. So I think in North America, it's going to be a lot around housing. I think that as we look at Europe, it's going to be, as we look to Asia, it's going to be around a continued pull that in automotive. For us, both ICE and particularly EV, have been very strong end markets for us in urethanes in China. China continues to improve, as we have pointed out in the last couple of quarters, that it would. But it— we're certainly not seeing, you know, the, from an overall macro point of view, the five, six percent growth that we've seen in past years. So I, I think that's going to be important. And then Europe, I think, you know, Europe's going through, particularly in Germany, something of a de-industrialization right now. And I think Europe needs to find, instead of courses to, do they want to continue this, this, this insanity that they're going through, or do they, they want to, you know, really have policies and, and, priorities that are going to encourage manufacturing and, you know, where, where they're gonna be going in that area. But Europe for us in building materials, insulation, light weighting, automotive, and so forth, those are some of those doing fairly well right now. We're seeing a gradual recovery in automobiles and so forth, insulation, but we need to see more coming out of Europe. So again, I think all of those indicators are going in the right direction right now, gradually, some faster than others. We just need to see it sustainably keep moving in that area. Very helpful. Just how should we think about the ramp in earnings from Q1 to Q2 for the whole company? I'm sorry, the ramp of earnings from Q1, Q2 for the entire company? Yeah, the ramp from Q1 to Q2, EBITDA for the company. Again, I think that will be a factor of what we see in continued growth and pricing discipline, you know, largely across the board. But we would assume that as we continue to see an improvement in demand and an improvement in pricing, that we'll see an improvement in earnings as well. Yeah, we're not gonna guide to Q2 right now. Dave, you've got the Q1 guidance, but we would expect a seasonal improvement as you move into the higher construction time period. Our next question comes from the line of Aleksey Yefremov with KeyBanc Capital Markets. Please state your questions. Thank you. Good morning, everyone. Just to piggyback on the last question, in your Polyurethane segment, you're expecting better margins in the first quarter. Should we think about that level of MDI margins in Q1 as sort of the baseline for 2024, or could those margins dip again in Q2? Because, you know, we now see benzene rising, for example, maybe you won't have enough pricing. Or do you feel comfortable that, at the very least, that Q1 level of MDI margins would not slip lower? Well, I'd like, I'd like to say that we have that much control in pricing for the entire year, and that we have that good of forecasting. But as we look at, and I'm focused right now as to how Q1 is ending and how Q2 is going to be starting. And as I look right now at some of the broader indicators, Europe, we're out with a price increase effective March 1 of EUR 250. These are public announcements, of EUR 250 a ton. Chinese on the post-New Year's, which ended just this past week, you know, we've seen a pretty strong demand, both in volume and in pricing, that's been publicly reported of around $150 a ton. In the US, we'll be pushing for a $400 a ton price improvement in HBS now, in our Huntsman Building Solutions. We also have some formula pricing in the US, and we'll be pushing for other price increases as well that are not public. So, you know, across the board. Now, a lot of that's gonna be setting. Last couple of days, we've seen benzene continue to be quite volatile, and you know, we've got to make sure that our prices stay above the wave of raw material price movements. But by and large, we're finishing first quarter in a much stronger position than we started first quarter on a pricing basis. And I would say that, again, some of that improvement, that optimism I talked about in my prepared remarks at the very beginning, literally, we've seen that really starting to come just in the last couple of days. You know, so we see some of the actions that have taken place in China and so forth. So again, some good optimism going into the second quarter. I feel like it feels like, you know, we've got the wind in our sails. But again, we've unfortunately said that before. Thank you, Peter. On Europe specifically, do— Yes. Pardon? Yes, Aleksey. In Europe specifically, do you see any benefit from lower imports of material from Asia in either Polyurethanes or performance products? Well, I think we'd always be happy to see fewer imports than more, just as a rule of thumb. So yeah, I think that would be the case, yes. Yeah, I mean, we've seen a little bit of a slowdown, Alexei, if you look at where we are today in February versus quarter four in terms of imports from Asia, just because of the Red Sea. You'll get as good as ours as to how temporary that actually is. Our next question comes from the line of Arun Viswanathan with RBC Capital Markets. Please proceed with your questions. Hi, this is Adam on for Arun. Thanks for taking my question. Looking into second and third quarter, looking at Polyurethanes and wondering, you know, other than some of the items you've just outlined, what might you think are some of the upside drivers beyond seasonality for that segment? Thank you. I believe it's going to just be a continued growth in demand, stability in raw material prices and discipline in finished product pricing. It's just, you know, getting back to the basic fundamentals. A little bit of restocking would also help. I think that inventories are very low and throughout Polyurethanes as well. We'll be completing our cost savings program throughout 2024, so we'll see some of the benefits of that fall to the bottom line. Great, thanks for that. Looking at ag and amine destocking, when do you think some of the negative impacts from that might start to subside? I'm sorry, the destocking around what? Sorry, ag chemicals and amines specifically. Yeah, I think we feel that most of the destocking, at least what we're seeing in our amines products, has come to an end. We're not that exposed to agricultural products and chemicals, so I don't wanna comment on anything on the ag side. We're just not exposed that much there, so I really don't track that. But with most of our amines, as we look again at the volume improvements we're seeing quarter-over-quarter, you know, I think we've seen the vast majority of the destocking that's taken place there has come to an end. Our next question is from the line of Kevin McCarthy with Vertical Research Partners. Please proceed with your questions. Yes, thank you, and good morning. Peter, I wanted to come to the, the five goals that you outlined at the top of the conversation, and I was particularly intrigued by your fourth point of, you know, assessing the portfolio, making sure you're the best owner for all of your assets, et cetera. Obviously, we've seen some significant divestitures over the last five years or so. Do you have in your mind, you know, potential to part with any businesses that are bigger than a breadbox, or are you referring to, you know, maybe potential for more surgical changes in the portfolio? Maybe any, any updated thoughts on, you know, where you'd like to drive the portfolio from here would be helpful. Yeah, I think that, you know, we need to just continue to look at the entire portfolio. I think that we'd be a real disservice to our shareholders if we said that, you know, we wanna stay exactly what we are today forever. As we look at those areas of the business that are particularly impacted by higher energy costs in Europe, I think that we need to step back, and we need to ask ourselves: You know, how do we structure those businesses for the next five or 10 years or next 20 years, where we're going to be in a competitive position? The markets have changed quite a bit in the last couple of years when it comes to pricing dynamics, when it comes to geopolitical shifts and energy policies and so forth. And I think we've got to continuously ask ourselves: Are we best positioned to own these assets? Are they in the right places? Do we have the right supply agreements or even partnerships? And see where we go from there. But again, I would, I think it'd be the wrong move if we came in one morning and said, "Everything's perfect, and there's no need to look." If we could trade some of our assets, and obviously, I'm not gonna get into which of those assets they'd be, but if you could trade some of those assets for less volatile, higher margin assets, I know that's a lot easier said than done, but I think we probably have proved some of that over the last couple of years as we've divested of our Textile Effects and TiO2, and some of the more commoditized intermediate chemicals and so forth, oxides and glycols and so forth, then we bought assets that have been put into our Advanced Materials, our downstream urethane spray foam businesses. You know, we look at those sort of changes. I'd like to see that going forward. That's really helpful. And then second, Peter, if I may, I wanted to ask about your view on China. I think you made a comment that you're more optimistic today than you were at year-end. The year-end was not too terribly long ago. So I'm just kind of curious, is it to do with, you know, a little bit of MDI uplift, that you referenced earlier, or are you seeing other signs, in China that are more encouraging to you, more, more green shoots? Maybe you could elaborate a little bit on, on the regional outlook there. Yeah, I'm not sure that my views necessarily have changed all that much. I always get a little bit leery when you go into Chinese New Year's, 'cause it seems like you come out of it, and you're either off to the races, or it seems like things just—t he New Year's ends, and things just remain lethargic. That's kind of what we've seen over the last two years or so, China struggling through COVID and then a rather lethargic recovery in the last year. I see them coming out of this new year just in the last week. And again, I don't wanna base a whole year on a week's of demand and pricing and so forth. But I think what we're seeing in market conditions in real time, Kevin, is we're seeing a better rebound, if you will, after the Chinese New Year's than we've seen over the last two or three years. And this is kind of the China that we were used to a couple of years ago. So again, I'm not saying that these guys have changed drastically, but I do think that the pickup that we're seeing in our particular business, on EVs, and as we look at some of the demand that is picking up in China in particular, it feels like it's real and it continues to, you know, see a gradual steady improvement. Kevin, for context, about 15%-20% of our sales are into China and less than 10% into property, which has obviously been the big, the big headline coming out of China and how far that's fallen. Our next question comes from the line of Vincent Andrews with Morgan Stanley. Please proceed with your questions. Hi, this is Turner Hinrichs on for Vincent. I'm wondering if you can walk us through price, cost, and other considerations underlying your guide, and that margins will move higher in the first quarter within Performance Products specifically. Yeah, I think that as we look at Performance Products, we continue to see a gradual recovery in the construction markets. That's going to be an improvement from maleic anhydride and the unsaturated polyester resin chain, as you kind of move downstream into North America. We'll see a volume will be higher in our amines products as well. And that goes into everything from spray foam. And we're seeing prices are stable to improving in this business. So, yeah, I think, again, Performance Products, we're gonna see a gradual improvement, and I hope that that builds momentum throughout the year. Great, thanks for the color. So you've mentioned that you anticipate stronger pricing in the first quarter in Polyurethanes. Could you walk us through what you're seeing in each region as it relates to Polyurethanes pricing and what you're expecting for underlying supply and demand? Well, again, some of the broader things that we're seeing in China, I'll just say that we're seeing around $150 a ton improvement. China, unlike Europe and the US, where we'll set a price out, China moves really almost on a daily basis on your base and more commoditized Polyurethanes, your downstream urethane blends and more differentiated urethanes are usually going to follow that macro movement in pricing. But as we see pricing today in China, we see that up around $150 a ton improvement over what we've seen in the past couple of weeks. And as we go to Europe, again, we're out with a $250 a ton improvement in Europe. And again, when I say that, that's not to say that you take all of our volume and put $250 a ton to that. Some of that will be effective March 1, some of it will be a little bit later than that. Some of it, depending on contracts and so forth in place, may be more, may be less than that 250. But directionally, that's where we see pricing going in the European market. And, and that's, that's obviously is very much needed, particularly in the European market. In the U.S. market, again, we're seeing a number of areas. With the splitter that we have in place, we see kind of more of a fragmented base in Europe. We sell a lot internally through down through the Huntsman Building Solutions. We have a bunch of our product that's on pricing formulations and so forth, where we're able to pass through raw material volatility and increases. And we have some that are just on standalone contracts with prices that we negotiate on a quarterly or monthly basis. But we are pushing for a broad price increase on the North American market as well in MDI. To your question on utilization, we'd still expect it to be in the low 80s in the first quarter. We're not up to the seasonal highs of construction in the second quarter. As we said earlier, the Polyurethanes industry really needs to get into that 85%+ utilization before you see a real inflection point when it comes to supply-demand. Our next questions come from the line of Mike Harrison with Seaport Research Partners. Please proceed with your questions. Hi, good morning. Good morning, Mike. You noted that you were maybe seeing some additional opportunities to improve the cost base, and I was just curious, are those additional actions that could be taking place above and beyond the $60 million worth of incremental savings that are part of the restructuring program that's been in place for several quarters? Or, were you just saying that there's still some actions that you need to take in order to achieve those incremental savings? Yeah, Mike, hi, it's Phil. I think we've guided to approximately $60 million year-on-year. That includes some of the actions that we'll be taking during the course of this year. We are looking at manufacturing efficiency, and honestly, outside of just the cost base, we're looking at working capital as well. I think we're cognizant that in any recovery, working capital, there should typically be an outflow when it comes to cash. And I think there's some more work for us to be done, particularly around inventory days, where we can offset some of that. We'll also continue to finish off our European restructuring project, as well as a small amount to do there as well. Quite frankly, we've still got to make sure that we're offsetting about $50 million-$60 million of inflation every single year. All right. Then, the other question I had is on the MIRALON product line and this pilot plant that's coming online in the next few quarters. Can you talk about the level of interest that you're getting from potential customers? And I guess, what needs to happen from a commercial or offtake standpoint, before you decide to move forward with construction on that larger scale facility? And then the second piece of that is, I apologize if you've already said this, but what could the cost of that 5,000-ton MIRALON facility look like? Well, the 30-ton facility, which would be the largest facility of its type, that's producing the carbon nanotube product, this will be the largest facility in the world. We believe it will have a very competitive cost basis, and the key to this is, the lower you can get the cost, the more applications you can get into. We're presently working right now with everything from concrete to car tires, EV batteries, and structural products. Right now, we're able to sell as much as we're able to make of the product, but the product right now, to cover the costs, are going to very high-end applications into satellites and NASA applications and so forth. As you come up with larger scale capacities, we're gonna be able to widen the product availability, the value, and the number of applications that go into. The next phase of that expansion will be taking place next year. We believe that we'll be starting up the 30-ton reactor. We'll be starting it before sometime in the middle part of this year, and we feel that we should have sufficient data from that to initiate the larger expansion, which will be in 2025. At that point, I think that next expansion really is what I would consider to be a commercial commercial-size reactor. That if you wanna go larger than that, you're just putting in multiple reactors of that size. So really coming, I think, to the end in the next, you know, year or two, of being able to see the product, being able to qualify the material and then being able to mass produce the material that economics that you know should make this a very, hopefully a very successful add-on to the rest of the business. In terms of cost, Mike, think about all of that investment that Peter described, the 30-ton, the 5-kiloton in the tens of millions, maybe $30-$40 million. It's all contained within the capital program that we've, we've outlined and contained within the $200 million that we've guided for, for this year's capital program. Our next question is from the line of Frank Mitsch with Fermium Research. Please proceed with your questions. Thank you so much, and good morning. Peter, I wanna come back to the comment on Performance Products, where you indicated that you anticipated gradual improvement. As I look at that sector, the decline over the past several quarters has been, you know, wasn't gradual, it was fairly significant. In fact, the volume declines were pretty horrific, you know, between the period of third quarter 2022 and third quarter 2023, we got back to relatively break even here in the fourth quarter. So the question is, you know, obviously, a lot of that has to be destock. If we're back to a period of underlying demand, why would we not see these double-digit declines on volumes flip to being double-digit increases on volumes and so forth? Can you help me understand, you know, gradual versus something more significant in terms of recovery? Yeah, I think that as we look at the amount of restocking that is taking place, I believe that when we go back and we look at where the markets were a little over a year ago, we were having a very difficult time fulfilling customer orders, and I think customers, when we started to work through the bottlenecks, customers had very high inventories of our product in their supply chain. I think that was really across the board. I mean, we had trouble getting blowing agents and for our building solutions, our spray foam, we had trouble producing enough amines. When you saw the boomeranging effect of the economy post-COVID. I think that there was, the supply chains built up too much inventory, and there was a concern that, that there wasn't going to be enough production, there wasn't going to be— the, the logistics were not in place, and pricing was going to go, you know, through the roof. And, a lot of our customers, almost across the board, whether it was an oriented strand board or, particle boards or insulation materials, amines, whatever, I think they built, unnecessarily large amounts of inventory. Now, when the markets turned, I think that it, that it turned certainly more suddenly and took longer to de-inventory than, than all of us anticipated this sort of a drawdown. I don't think so. I mean, I always look across the entire chemical industry. We're all hit at about the same magnitude, the same time, maybe off a quarter here and there. Now, does the market bounce back at the same magnitude that it came down? I don't believe that it does, because I don't think most people today are worried about where they're going to be getting product next quarter. They're seeing prices gradually improving. They're seeing there's plenty of capacity out there. Demand isn't going through the roof, and so I think that the recovery or the restocking is going to be gradual. It's gonna be throughout the year, and it's not going to take place as fast. I wish it would to some degree, but then again, if it did, Frank, as you know, there'd be a tremendous amount of volatility. If we saw the restocking take place as fast as the destocking, prices margins would go back up and probably collapse just as much. So I hope that there's a little more reason that goes into this restocking. I think it's gonna be gradual, and it's gonna be throughout the year. Understood. You did highlight, obviously, the high costs of benzene, but we've certainly gotten a nice respite on natural gas, not only here in the States, but also in Europe. What's the impact on Huntsman? What can we expect to see with respect to that flowing through the P&L? Well, I think that you'll see the impact of that throughout the second quarter, a little bit at the end of the first quarter. As you see, again, it's not necessarily natural gas, but it's the hydrogen, it's the CO that is made from natural gas, the hydrogen, and obviously, it's a raw material for our utilities and our boilers and so forth. And that will, some of that will be in real time. Some of it will be, it's in pricing, and the impact that will be in the next quarter. So again, it's great to see these low prices. I wish we saw, you know, the same sort of drop in the European markets. Europe is still about 5x higher in its cost today of its natural gas, and obviously, China's more based on coal than it is natural gas. That's usually pretty stable and pretty low. Our next question comes from the line of Matthew Blair with Tudor, Pickering, Holt. Please proceed with your questions. Thank you, good morning. Peter, one of your five goals was to improve free cash flow generation, and in the prepared remarks, you know, list out a few different levers here, things like reduced incentive comp, but higher turnaround spend. I think your free cash flow conversion in 2023 was only in, like, the low single digits. Do you have a target for 2024 that you could share on free cash flow conversion? Yeah, I would just say that when we talk about the improvement in our free cash flow, I'm—and I'll let Phil's quite anxious to make a comment here. But when we talk about the incentive pay, you know, I didn't say that we would be cutting incentive pay to help cash flow. I said that our incentive pay would be tied to the generation of cash flow. So I hope that came out clearly. This is the highest portion of our incentive pay for senior managers this year is going to be on achieving our cash flow targets and objectives. Yeah, so free cash flow is clearly gonna be better in 2024 than 2023, therefore, consequently, the conversion ratio is certainly going to be better year on year. And I think we highlighted some items to consider. CapEx will be $30 million lower. Restructuring cash will be $30 million lower. Between pension and incentive comp that we pay out in 2024, the 2023 performance combined will be about $35 million lower overall. We still do have outstanding the Praxair lawsuit that we won quite a while back against Linde. And so look, we're just gonna be very disciplined when it comes to cash flow. Hitting the cycle average 40% free cash flow conversion ratio that we've targeted, that's gonna be difficult in 2024 as we continue to recover overall. But quite frankly, again, we're gonna be clearly better than we were in 2023. Yeah, and I would just say when we look at on a normalized basis, that 40% free cash flow conversion rate, I would still say that's where this company ought to be during a normalized economic period. I don't see that number having changed. Sounds good. Then regarding the US construction market, at least on paper, housing starts were pretty good in the fourth quarter of 2023, up 6% after, you know, some big declines earlier in the year. Did you see that come through in your Q4 results? And Polyurethanes was just pretty soft due to weakness in other regions? Or should we be thinking about a lag, you know, if housing starts to improve in one quarter, maybe it takes, like, one or two quarters for that to flow through to Huntsman? Yeah, let's remember that the time from permitting to purchasing to building inventory, the impact of that entire supply chain is not an instantaneous issue. And, companies today are looking at where they're going to be in second quarter, and in some cases, third quarter. They're looking at what the demand is going to be and projected to be. You know, we'll see things like, mortgage rates will have an impact on, you know, on how much inventory and pre-buying, OSB and installation customers will be doing. So there, there are a lot of variables, but again, as we look at it, as we step back and we look at it, from a macro point of view, from what we're hearing from our customers, the early indications that we're seeing, you know, our, our indication internally, is telling us that it's time to restart, our, our line in Geismar and, and gradually start bringing that into the market. And, and, we believe that's gonna be needed to satisfy demand. So that, that should tell you as much as, of, of our view going forward. The next question is from the line of Hassan Ahmed with Alembic Global Advisors. Please proceed with your questions. Morning, Peter. Morning, Hassan. In the sort of prepared remarks that you guys posted overnight, you know, for the Polyurethane segment, you guys talked about, I believe it was like a 6% volume gain in Europe, and you talked about some market share gains out there as well. Can you talk about, you know, the dynamic that's transpiring over there with regards to this? Yeah, I would just, just remind you that, you know, that, that we had, we, we had our facility down earlier in the year. So when we talk about, you know, where we were a year ago and where we were even a quarter ago, it, it's, they're pretty easy comps to beat. So I'd, I'd like to think that Europe is, is expanding GDP 6% per quarter. You know, it's gonna continue like that. But again, there's, there's, I think there's some fundamental issues around Europe on the broader economic, perspective when you look at, at energy and industrial policy. But as we look at our customer base in Europe, we don't see it getting any worse. We see if anything, there's perhaps a building tendency for restocking and, you know, as we look at our facility there, it's running well. You know, we're continuing to see stability and gradual improvement there. You know, hopefully, effective March 1 here, we'll be successful in price increases. Understood. Understood. And just sticking to the Polyurethane segment, I mean, obviously, EBITDA margins in Q4 were around 1.5%. You know, call it near breakeven. And you guys are, you know, relatively sort of low cost, downstream integrated and the like. You know, could you talk a bit about the global cost curves? I mean, I'd like to think that, you know, a large chunk of the industry is loss-making right now, you know. I mean, how sustainable is that really? Should we be seeing sort of, you know, curtailments now, you know, and, you know, pricing increases, you know, in theory, that would ensue there on after? Well, it's, I mean, just going around the world, the lowest cost producers globally right now are in China. And, you've got low energy costs in China with the amount of coal that's being consumed and the coal-based economy largely, and that's gonna be where you've got the largest, newest facilities, and so you're gonna have the lowest cost coming out of China. Second on that cost curve is going to be the U.S. I believe our positioning in the U.S. is that I'm not going to sit here and say that we are the lowest cost producer in North America, but I would be surprised if anybody's lower than us. I don't know the exact economics of our competition, but I think between our reliability and the size of our facility and so forth, we would be among the lowest cost producers in North America. I would say that when I look at the profitability in North America, while it's improving, these are not long-term sustainable margins. We need to see better market conditions, pricing, and demand. And then when I go to Europe, you know, Europe is one cold winter or one fouled pipeline or one import terminal problem away from an energy spike, as we've saw in the summer before Putin's invasion, as we saw in the winter of Putin's invasions, we've seen since then, where energy prices can spike up 5-10x in a very short period of time. So Europe needs to figure out what their energy policy is going to be, and to have an economy that size based on the means of propulsion that you know Columbus used 700 years ago is insane. And you know they've got to figure out what they're gonna do from an energy point of view and from an industrial point of view and what are they gonna do to compete? When you look at the margins over the last 2 years, in particular, I think that I've publicly have said it, if I haven't, then I should. We haven't made strong cash flow out of Europe in almost 2 years. That's unacceptable, and it's unsustainable. So if we're in that position, even if our competition, I believe, again, in Europe, we may not be the lowest, but I, I bet we're very close to the lowest cost producer. There's no way that an MDI company is operating at European market economics today and says we're making a strong return on capital, and we're proud of what we're doing today. Europe just so, yeah, Hassan, I'm happy to where the direction that the markets are going. Demand's picking up, pricing's picking up. I don't mean to get on a tirade here, but we've got a long way to go, and there's a lot of work that needs to be done. And I think we're heading in the right direction, but I, I still— Europe probably has me more worried than the U.S. and Asia. Our next question comes from the line of Salvator Tiano with Bank of America. Please proceed with your questions. Yes, thank you very much. I just want to come back to the U.S., MDI market first. So firstly, it seems like you, you have some pretty steep price increase. You mentioned correctly, if I heard correctly, around $400 a ton in the U.S. But some trade publications, even last night, are still differentiating between U.S. and European and Asia conditions, saying, the demand and supply are much, much looser here. So what are you seeing that's making you quite more optimistic than, I guess, trade consultants here? And also, on the Geismar startup, in Q2, can you discuss a little bit, what would be the costs associated with that, and what is the minimum operating rate that you need to run in order to be profitable on an EBIT or an EBITDA level? Yeah, you know, when we talk about the $400 a ton, I will just remind you, that's what we're shooting for in our HBS business. So we take our own MDI internally, we transfer it to HBS, we price out at market, and then we sell that to customers. We're seeing, you know, we've been public, and I only want to talk about price increases that we have that are public. As we think about, you know, what the trade's saying versus what we're saying, well, the difference—you asked what the difference is between those. One sells paper and one sells product, and we sell product. I can only, I can only comment on what we're seeing, what our customers are seeing, the feedback we get from our customers, in reality, on pricing. Trade publications, I think are, are a good snapshot on the macro basis. But I wouldn't say right now that MDI in the U.S. is long and sloppy in pricing. I'd say, you know, if that were the case, we wouldn't be shooting for the price increases and pushing for the price increases that we are. And I apologize, I forgot the latter part of your question. I think it's just confirming. Yeah. I think just to—s orry, go ahead, Salvator. Just, it was the second unit on Geismar, if there will be any costs associated with the startup, and what's the minimum operating rate that needs to be, that you need to run to be profitable on an EBIT or an EBITDA basis? As we said, we'll just bring that on slowly, make sure that we operate appropriately above 50% levels. I mean, you know these plants below those levels, then they tend to glue up. So to operate them efficiently, we'll bring those on, but we'll bring it on slowly, and we'll make sure that we're profitable in what we put into the market. Great. Thank you very much. Our next question is from the line of Patrick Cunningham with Citi. Please proceed with your question. Hi, good morning. This is Eric Zhang on for Patrick. You've done a lot with Polyurethanes on the cost optimization front. What do you think EBITDA margins can get to this year with maybe a modest volume recovery and firmer prices? Thank you. Yeah, I'd be reticent to throw out a margin number because I know whatever I say, I'm either going to be too high or too low. But I do think that we'll be moving throughout the year, hopefully, again, unless we see a massive amount of restocking that happens very suddenly, which I'm not anticipating, but I think that we're gonna see a gradual improvement throughout the year. And I hope that we finish the year much closer to our normalized levels of EBITDA than when we started the year. I know that's a superfluous answer, but I think at this point, again, we've got the results of January, and it's just simply too early in the year to make a year prediction. And as we said, cycle average margins, if you go back over the last 10 years, this is a mid-teens, mid-teens plus, margin business. Got it. Thank you. Thank you. Operator, I think we'll take one more question. I think we're nearing the top of the hour, and assuming anybody else is with us? Yes, we have a question from line of Laurence Alexander with Jefferies. Good morning. Morning, Lawrence. Good morning. Just want to revisit the portfolio optimization comments. Was the scale of your business a limiting factor in what you do? Or is the focus really just on return on capital volatility? Kind of what value is reflected in your share price versus the fundamental value? Can you just help clarify how much scale constrains what you do? Yeah. So I mean, you're talking about the fact, Lawrence, that we've sold down our TiO2 business, our Spindletop business, so the Intermediates business, our Textile Effects business, and we've got a $6 billion company today. Again, I think we would rather that we were adding on bolt-on acquisitions to grow the business and grow the business both organically and inorganically over time. And those inorganic investments would come around particularly around Advanced Materials. And as Peter said earlier, you may look at some small parts around the edge as well in terms of whether we're the best owner or not. But to the point, we come in and we look every day, are we the best owner? Can we generate an effective return from the portfolio in the long run? You are correct, we're absolutely looking at the return on invested capital versus our cost of capital. I would just say, Lawrence, and I hope I don't get ahead of myself in saying this, that, you know, we do run the risk, if we were to look at selling a big chunk of the business today without the acquisition of something else, we run the risk of getting too small here, and I think that's not something that we want to entertain either. But that shouldn't preclude us from doing something big if we can replace it with something big and continue to shift and change the portfolio. I think I've again, I probably have said, if you go back and you look at the history of Huntsman, every 5 years, at least there's been, you know, there's been a major addition, a major divestiture, something that has fundamentally changed that I believe has made us a stronger company, whether it's a sale going back 15 years ago of our Base Chemicals businesses, 10 years ago, of our TiO2 and some of our, you know, the basic pieces and so forth, and more recently in the last 5 years of our intermediates and Textile Effects. I think that, you know, at the same time, being able to buy the right assets to replace those, or if we can't find the right assets, we're going to return cash, as we did this last year, with the sale of the Textile Effects business. We're going to return cash to shareholders. Thank you. Thank you. At this time, we've reached the end of the question and answer session. This will also conclude today's teleconference. You may now disconnect your lines at this time. Have a wonderful day.