EMN - Earnings call transcript Q3 2017 | Eastman Chemical Company

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, everyone, and welcome to the Eastman Chemical Company Third Quarter 2017 Conference Call. Today's conference is being recorded. This call is being broadcast live on the Eastman's website, www.eastman.com. We'll now turn the call over to Mr. Greg Riddle from of Eastman Chemical Company, Investor Relations. sir. ahead, go Please

Greg Riddle

Silvia, us. morning, you, you and for joining and Thank everyone, good thanks Okay.

call me President the CEO; Louis On with Manager, Curt Chair Costa, Reavis, Espeland, and Board Executive Relations. Vice Investor and and today CFO; are Mark

cover Before items. we two begin, I'll

expectations. News in presentation, for Certain Form the and and factors with quarter will future are events for First, Securities related our during results XXXX. forward-looking be concerning could or the quarter will filings to financial you this the XXXX third and including and Release or filed XX-Q company's detailed the our Form certain results to hear XXXX Exchange the statements plans be Commission, Actual quarter XX-Q filed materially. third quarter second in differ expectations

presentation earnings certain in Second, non-core this exclude referenced items.

call projected or that And earnings first our addition, and In items description be Projection to financial in items share future the to non-core, News third including period. associated I'll XXXX XXXX using taxes. earnings the are www.eastman.com most disclosures, will also over months provision months Release, the measures nine directly results per the XXXX nine Mark. Reconciliations and for quarter adjusted rate comparable assume the non-recurring GAAP unusual, the exclude excluded with actual can Investors income other the website, quarter of adjusted which financial available and for adjusted tax any first for and section. in found on of third rate turn the be the that,

Mark Costa

start I'll X. everyone. morning, Good Slide on

third in progress make strong to continue executing results. our great strategy operating We quarter with

products growth and the portfolio our specialty in advanced products with demonstrate and continued of volume results materials. of additives strength functional Our premium

growth and through As are many in our markets. before, we leadership innovation specialty times own creating I said

share examples over a the enhanced and times of we're our three with ways innovation our I'll growth of commercial few market. few the businesses In underlying we a nine months in capabilities. volume the For which moments, first winning X% through delivered specialty is customers just

growth metric think target expansions $XXX in a moving to close it on continues incredibly when AM. AFP track our you We're being will remain than support key to Our business and growth million, predominantly for specialty tracking for which our impressive higher about new continued strong is X% closer forward. improve. businesses which Capacity

this costs. to In volume increases material growth, do continue great raw offset addition specialty we to a job implementing higher to price

corporate As margin increased sequentially a both our year-over-year. result, operating and

free of on impressive flow approximately and track flow Our dividend, of $X deleveraging rate remain enabling in an deliver cash generate continues as we increasing engine accelerating to repurchases. cash billion to free share cash XXXX,

returned execute the are our to enterprise, points to These first nine pricing proof $XXX discipline million and to XXXX, strategy approximately innovating clear months During repurchases results share returning our stockholders. on dividends. of cash through to continuing we’re that for shareholders we to throughout

team Eastman their Moving personal Texas the some to a together through millions very employees Irma level devastating in including voluntary on donations. a fellow and to of and people at personal supplies I'm proud came of had Hurricane of employees relief impact help City. SlideX. efforts, Harvey our how

employees protect measures a to a long will hard region, thankfully significant sites important on of our the minimize took our impact. I’m the road showed the recovery the sites our our not Gulf cautionary for in employees and to on also impact customers. on them do and assets most We sustain the hurricanes generosity very long feet. get have to operations proud and work their their Our impacted towards and go back way our helping of

Where as we and intermediate In ethane faced and severely have disrupted challenges. materials raw such getting working South, integrated we our to reliable. propane, readily backward our some the across biggest hurricanes challenges the were procure been we customers. to remain paraxylene raw as others the the to As materials had on chains products available supply such to rely

from we're acquisitions. synergy double-digit lovers. in story disruption testament space avoid nutrition. growth and our to impact supply delivered to advantage to ability growth in we paraxylene and is The be continue through the these reliability the scale combined is in three headwinds growth from Texas The our in by neutral. X competitive a we customers our superior Overall compelling. accelerated anticipate collective is We've of On execution regional events more increased challenges offer of in AM Taminco winning products largely and heritage compared And and quarter this drive Non-revenue commercial vertical due to capability. our our competitors. animal our Eastman Florida Our space films, performance our from net in relatively tailwinds and intermediates. offset integration. to are Slide and from Eastman We've our sales from our acquisition Taminco third

in corrosion store customers received this Eastman coatings our Solutions recently customers, brand by us combination a qualified and to have Another technology flexibility, Trident first encouraging can new our innovation success in to for Tetrashield-based of The food from and metal expect containing combination regulatory protected into as California application. food such recent regulations coatings coatings Pop of The the away Eastman business approvals can and Tetrashield packaging evolving have superior line with and products demands. are that very originally critical our BPA as for production is who beverages of we consumer on XX developed transition coatings Tetrashield due that's BPA-free has XXXX. by polyesters provide shelves for in the to for and leverage packaging. accelerating be

winning we regarding launched some performance in America, films. largest Films The proposition, which for great and competitors. strategy two are very synergies how acquisition common is is value our our stores. we and markets and delivered we Finally, three platform, more illustration These examples and how aftermarket This our a dramatically we're how and an result take another and winning the compelling market double-digit additional synergies for to growth our to business I'll than execution is with innovation, and products drive from channel over organic and oil. are through execution With integrated turn other update and which commercial We're growth the of it creative proof acquired our dealers successful of Curt. that, improved ability commercial Performance to North China growth for on acquisitions. and technology, just product

Curt Espeland

Mark morning, Thanks good everyone. and

impact than of With I with on as in a the segment grew guidance all fibers. recent X. the coal our products, provided financial excludes third mention Before we're of incident additives I'll event. that the begin working results through impact corporate expected the gasification our of chemical start Sales today I'll quarter and functional that, revenue in intermediates more and Slide materials decline as offset advanced increases still

specialty do job quarter. we pricing our growth momentum volume further in positive line we more product a nice well We driving executed on the the pricing in of to continue and front as realized

quarter than fibers. and Excluding up Operating was as fibers, volume more functional increases decline in pricing a chemical X% growth while intermediates in additives and was offset third X%. product grew earnings

These impressive headwind as operating a year-over-year results good our we've consider Our from growth to our share on focus and per as taken increased well very the earnings positive result deliver share share year-over-year as to earnings, offsetting environment. in per actions reflect made operating taking remains continued deliver strategy costs, when growth slow expanded and a Overall, by we both and XX% higher you earnings headwinds substantial reflecting solid fibers. actions what margin earnings raw growth. material executing sequentially per progress a

advanced with We starting the X. and delivered growth results first through materials segment months to of the on X% next earnings approximately Moving Slide nine year.

achieved We're of these volume from premium materials offset product in products, investments capacity due this of continue by the period. tough success have Overall, which of materials points especially Sequentially solid raw our returns level was were made. to the to environment business in ago of higher and operating comp. that unchanged record given expanded XXXX we year an demonstrate hurricane constraints. reflects the performance compared year-over-year sales Operating given For pleased XX%. third a our strength revenue of the and XXX results approximately with sales advanced track higher volatile quarter, the record margin quarter increased to basis earnings and improved mix somewhat earnings the

to growth, full continue outlook not we execute expect performance Our cost business as improvement mix its changed volume advanced materials strong fixed digit leverage. and year has of mid-single of strategy

innovation continue to growth even in of our We drive environment. growth through an slow macro compelling deliver to proof ability

Now and function primarily throughout to quarter. volume outstanding which Sales to revenue sales had an Slide higher the on XX% products increased segment. due X additives

For from multiple example, sources. this came growth impressive

energy our as orders already and and in a quarter. strong tire heat our due transfer of and reliability. Our to There of the resins improved superior timing fluids operational in commercial third Mark and wins number in landed to solar in in nutrition additives strong animal tire led innovation growth these the mostly the were discussed, execution market

operating of due in expanded strength basis both We proposition primarily volume. customers. XXX to also the to increased made our points earnings pricing sequentially year-over-year our we value our margin and our progress improving sales Sequentially Operating to and XX%. higher

resin. innovation than And great tire year. positioned growth times Looking would which we this now and increases including goal. input These products year end sales progress about with and four prices. well in for is at made full development in deliver solar mid-single cost function All tire three fluid chemicals projects, market expect additives digit represents greater or growth in strong XXXX higher earnings and segment we growth be volume offsetting the selling market to initiatives volume

X, offset Now commodity but conditions. intermediates higher higher cost. higher and due prices raw due to improvement increased earnings to hedge by primarily and Slide raw increased continued levels competitive material prices, higher prices in energy to material revenue to sales and operating selling partially costs Operating lower lower chemical attributed selling on

to down the utilization. sales volumes, and cost. costs acetate selling job chemical raw year decreased in of to recovering industry XXXX hedge chemical actions to of the intermediates do a and as benefit prices continues and higher seasonality help to higher offset shut revenue in the costs I’ll segment review during expect good a particularly higher Looking raw at quarter. prices material input receives costs XX, Sequentially material from fourth fibers the manufacturing costs, in continue margins earnings headwind intermediates capacity the lower to trough on with from which from to finish reduced a higher will to due share. including primarily we largest due team These XXXX, for due normal ethylene costs, lower Slide decline lower commodity weakness increase up anticipated lower we full mitigate tow

in realized the volume Additionally, quarter timing acetate year-over-year with was tow sales due for third to anticipated third quarter shipments. was flat fourth for customer the some of quarter

progress Internationally, offset selling with We lower yarn capacity from growing to in acetate earnings Operating make prices continue in third to in by great intermediates operating declined costs. partially our quarter. business lower double-digit quarter increased the we benefited utilization. due growth

flat Looking about outside to year forward for we of China our acetate for more segment that year XX%. be expect down the will and little earnings full to a the will turbine continue be than last relative

half expectation to As stronger than second for previously discussed this first half. includes an be earnings

taking actions forward highlights. of XX, for on within cash an Slide other and moving to we're provide and this our control are We overview stability I’ll financial track. all transition flow business our On to believe

totaled the incident $X will in of induce second to hard be revenue I that note billion of million half on than free our the billion. we're an working excellent approximately growth our $X over approximately million. impact deliver flow higher do several We Having of capital that $XXX free $XXX with generating now flow expenditures would year have operating year-to-date the cash for to job operational continue year We Capital cash. the variables expect slightly projection. expenditures that, our strong to an cash full and previous said year. cash

at balance reduce will of year in expect quarter. debt to the occur to free which Looking the sheet, our this cash million flow to mostly we use $XXX continue fourth

to nine dividends $XXX $XXX cash months returning million to the we committed returned in stockholders. remain To to $XXX share in million first we Additionally repurchases. million and

year quarter XX%. effective tax full third will our was rate XX%, approximately Our rate consistent also be our effective with tax expectation that

over this so As with a year. flow am cash pleased whole, earnings our back And and it turn I'll far I performance Mark. that, to with

Mark Costa

Slide On Curt. for our XXXX. outlook I'll XX, Thanks discuss

end expect markets than the rate markets. to optimizing in we sheet commodity have of our a we're shutdown development about structures benefit our the be year. We business the acquired environmental which being year to and volume this from allowed capabilities attractive reducing and progress initiatives to customers, quality commercial effective We're the in also products strategically disciplined and businesses, from in reduction lot with the mid-single-digit three and that especially continue to specialty entire a made has mix our in delivering as market Chinese growth we're growth, times balance improved and long-term are revenue which synergies to of and interest us we drive from across growth specialty growth To of expected also this we're are is rate through slightly our will businesses. invest launching the competitors reliability deliver our taken deliver costs. the improvements we're a superior law. lower in innovation improve hedge our position cost execution our leveraging China We've benefiting cost is reduce new of from and We've in of which realizing business benefits in our providing actions underlying our to way, last tax further so further benefiting cost structure enforcing M&A

more year challenges XXXX contribute continues Putting continue repurchases material and disciplined growth, we uncertain accelerating most share are full of XXXX time. prices of when the raw industry, at to the financial expectations and $X actions helping solidly in 'XX. in the the GDP, impact All our considering prices to together, are range, ethylene and volatility XX% global we to offset over long-term same of billion high the the these and face including the be incident to committed we to gasification have fibers. the we growth free including improved our in EPS this in compared the especially flow, normal at one growth cash to excluding is Finally, which investing allocation compelling are for you all coal of remain guidance challenges than capital face end increasing we XX% to our and

October operational Slide XX, gasification in early on incident we Kingsport Next had as for Site. area coal know you in the an

our injuries environment. focus professionalism complement and want no proud are a First, extraordinary very of I safety and There serious and operations were significant the actions to team. was impact we of team. the This event no first to of the

minimize our impact superior on example we financial had and of that customers both this our is responses superb Second a earnings. how incident delivered reliability for to work the

coal Our terms maintain tirelessly excellent made and the and have downstream worked we've progress facilities of operations repairing facility to of implementing alternate derivative gasification. processes

enable in the We also we This normal the the of production area of industrial quarter. expected fourth gasification coal mitigating to and with operable actions expect area chemicals our our expect and XXXX. to be derivatives to operations end noted along full we coal of is gasification resume the -- by early

Tennessee integration up back it's the to at in Third, United largest impressive and have our scale one of to in the the timeline integrated time States. we facilities advantages which site, chemical get significant an and due is

integrated a choices across which the essential all disruption the after segments our example time complex in wide of the it. operations shutdown was site, we four site systems and the the at across of made enabling avoiding For running are production

from to bring world. capacity scale enabling resources engineering to online experts the and have significant are facility and around and resources repair us dedicated These sources enables site Our at large-scale us also the the to rapidly. fabrication backup

critical material scale in customers. is balancing playing needs and and Our servicing also supply chain and procurement the a with role

take XX contractors outside from of support the skilled other and helping in months. appreciate repairs who many who companies three are deeply might Tennessee accomplish also colleagues months We

the of $XX operating continues incident, fourth this assess XXXX. insurance in expected half reduce the is between impact and by quarter $XXX the net earnings offset partially to While in financial the with the impact approximately expected million million costs to of $XXX XXXX million company the first in recovery of

impact be complicated our through we segments some we stream across in where time in to will the Regarding the cellulosic us how let the are. On in segments, across fibers will expect AM. summarize take Slide AFP XX greater the and Directionally financial is CI it's the intertwined across flows to how flow than should and in segments. impact work me the

We approximately to of earnings. specialty expect we strong have which deliver XX% a from portfolio our businesses

commercial create excelling own to improving our across our continuing improving are We our innovation, execution to businesses growth and mix. product

take cash We we're to are to committed another every moment employees. to of also have want uncertain using lever to this the very strong I in free we I and a am say all Eastman returning how proud environment stockholders.

delivering growth growth we're quarter earnings announcing believe our on will it’s that X. stronger in about February of New in cash growth managing at now Day to to and challenges incident building were and I the a fighting doing for track teams of deeply those hard Last company gas York, both also enough, We every significant that free an driving to Also XXXX keep about earnings January. term in are coal you cut deliver committed Investor for delivering growth. extremely and everyone top outlook cost are driven confident are and If Tuesday, to challenges same strong morning company dollar. call growth since is long-term. XXXX. on bottom-line understand will But how aggressively cost job of to not for and a We’ll long-term brilliant morning our hurricanes our is revenue the time. the important appreciate compelling improvements, are the where in Eastman innovation deliver through host and we us I talk fourth for a building short each more

continue we organic discuss so. have with in been to last to and will During How then do as added contributed development we've generate significant these investing growth acquisitions. growth our the years and this we've initiatives day this and innovation over attractive earning we volume market areas how several to and how will

critical topline to very driving be company. And growth then turn will strong over growth to free And the how expect out I’ll we a of superior hope to to our EPS it more sending shortly. Greg. Our skills you in flow. a I that, and add continue integration joyous. will with detail to back for the margins we be allocation cash

Greg Riddle

as a to questions We've lot got morning and Mark. to line get like people Thanks the many on this as of we'd possible.

So please questions. we and for With one ready limit to one yourself follow-up. Silvia, are that question

Operator

We'll first queue. Please from our Stanley. take from Instructions] the [Operator Andrews go question ahead. Vincent Morgan

now is open. line Your

Vincent Andrews

Mark as recognize sentiment in we - lot a is market. growing in your you’re out broader the at this macro about improving into least well 'XX, look then of had a some I into 'XX, economy there of and underlying markets is and going that but momentum excess points investment there community the

be So to sort look extent. slide to your to you underlying fibers I excluding you think as anymore? of we’re just I you macro am but know where improve and headwind deck you trends headwind may it's a various and point in going as be seeing wondering you getting - do do not segments lesser across the have Are think maybe

Mark Costa

markets certainly are this are of expect the do our in businesses proud next much same would than the underlying and we growing creating and Certainly growth faster we year. and year to how especially we

Europe we some as describe seeing signs but exactly improving is yet. are of exciting showing As I say far economic Europe that can’t recovery. I of solid macro much would conditions, growth. as not

our on we that’s which is the innovation world very and as competitors rest a seeing enforced call that focused some growth and the to shares some of Asia law proving that from especially additional value bit that been benefits picking growth disruptions that. result the there faced our beyond to growing given supply as of reliability faster we’ve of the customers, we're benefiting I a some Chinese macro. But the we volume have up than environmental wouldn’t are impacted

Vincent Andrews

one got is AM, AM, flat in versus AFP price on why in a question in know segments a better in just you I would and pricing the price reason X% of then then there you other. do the And was

Mark Costa

raw material also the are little different quite two segments in different all are of the dynamics strategies First bit different. a and

that covering you've seen materials the that has and AFP pricing go increases. aggressive in bigger in So in a been those raw into segment much more increase

where with flattish, AM. dynamic that's So raw been more of in materials slight part just the the have a increase

that We as good year So AFP. pricing raw getting that that we We're in that progress third of we excited making covering we're about in had in in segment strong building earlier we're quarter half second material a extremely growth a saw to the we about year. feel in the good forecasted the the the costs. feel volume

Curt Espeland

how went to improvement AM improvement XXX we there And we're is testament basis sequentially basis from the business as forward. of driving In third had of point sequentially points XXX quarters. in margin we margins second

feel good we're margins. how So we our managing about

business You have that remember to interlayer has annual contracts. the

market So in business there some is no businesses. expect some as that up getting and we the you set other those once we're pricing last fall some with changes price in other choices from place making so the and poly contracts in and would business

feel So and on about overall good we it's track. it

Operator

next now take ahead. we'll Koort the from Goldman And Please from queue go Sachs. Bob question our

now is open. line Your

Gavin Trebilcock

the of propane us Congratulations then Chinese you deeper on wondering for trend? can could any and more down for your you sustainability And can your XXXX was little the Hi. roll any a that quantify point hedged that? follow-up This for quarter give color on expectation Gavin if production you've drill is the for on and for the if you on Bob. I curtailment out

Mark Costa

of in the time of field. Government as environment benefit operations the of laws as for books and China level on competitive has these the we're and the that environmental more laws China creating encouraged planet and to playing see long very improving So the Chinese in a Chinese they're for had quality enforcing well the front,

to in have chemical either number so many parks and a parks. chemical move they not that are enforcement of or choice is in And a companies down are who shut stricter cases there to facing

are predict in which or number production it's in we no of down, So so curtailed some into as is to benefit park that, and chemical companies but There at a being may not. way shut this it out will to totally some point see far of played as certainly there some XXXX seeing year. continuing being move is we're

Curt Espeland

Yes. Good This morning. is Curt.

just impact. about year-over-year On date, 'XX Year the the rolling and was about 'XX cover hedges talk quarter. to $XX we'll benefit the $XX me third the in that hedge, of is commodity let million million off

mind Now keep still by lower year-to-date being -- offset is a lower benefit commodity in million. $XX that currency hedges not roughly

where So range, impact for $X.XX. also over offsetting hedges propane $X.XX stays lower that it in now The $X.XX to is to probably different the more that's being XXXX like 'XX impact today. $X.XX but is little set of currency

So the to $X.XX to what impact before. pretty is similar talked a to going be we've on $X.XX basis, year-over-year roughly net

part propane go of they XXXX, story. a end hedging longer to our material stay is going the be of you As on the no year if impact to where will are today, of

you're XXXX results. year-over-year analyzing operating Going when into our

Operator

J. queue from And now we'll take from the next Citi. our question P. Juvekar ahead. go Please

now Your is line open.

Eric Petrie

is for in overall And growth double-digit business is talked in you interlayers to specialty X%. films, materials growth volume trends what strong performance you about plastics P.J. slowed and in that This Eric growth are seeing other

Mark Costa

So premium volume growth very in products. we continue strong to see our

incredibly building growth. was And a this new we're still little year to up a capacity The comp. seeing So ourselves in expansion and double-digit interlayers, for an trading constrained last solid, strong is why quarter constraints. Triton heads but is display we're growth. bit year-over-year position That's in for Triton growth also acoustics by

We into and as we of is the and two some improving the So some in fourth of we have Texas the in segment things been those are concern. overall, driving. impact and co-polyesters, slower of out. quarter. with growth, The And our and also growth We tradition the Florida for on mix U.S. some the in see impact it saw these hurricanes which largest took performance upgrade no see and continuing. an go states we sales our films

via about in in the feel quarter. we for we feel much improvement the quarter the And feel great earnings. on fourth growth stronger So overall and track very the earnings

Eric Petrie

XX% see coatings going at product And volumes line you least some as customers present? that draw inventories AFP follow-up or is is building outliers or of in up sustainable the and and any did like then strongly terms forward

Mark Costa

So we’re of came really XX% very the through in number excited volume strong growth quarter about very a and it factors.

seeing strong call good it volume just I we growth. all, had growth. of areas the There growth segment. inventory good across we are it exceptionally at wouldn't building are high few First all strong where a

spread more third quarter those fill thought in engineering we As it worked in these the of be to Curt came transfer between mentioned they three you with part big to plant order a we fills that you had and And fourth projects our get lot story. into the when of that heat third a the concentrating so solar win in phase years fluid. the are timing of would the of and that's fills And we’re two online wins really brings we the the so facility. number hard ago a to the facility and construction of quarter big finally call

just us results to story products the is for this our is a growth execution the team some there where enforcement a great synergy share in and Another Taminco care with relative their those as has with nutrition also revenue growth improving of also I and combining in driving really our commercial would strong the in part seeing commercial hard products very third environmental and activities. of there. customers benefited and innovations personal from well tire competitors resins their benefited China mention And lot driving has for

have moderate of pretty year-over-year in number the volume So to XXXX fourth strong those still We those a and of exceptional growth the a next way some year consolidate of we still lot big drivers. volume these as this sort growth we quarter year. driving go we're we of three mid-single that digit expect but were concentrate wins drivers we deliver see as to growth, were

Operator

now take go Please Numora Yefremov next Eastman. will the question queue, Aleksey we from ahead. And our from

now is open. line Your

Aleksey Yefremov

the range optimistic of currently above you this at leave end to Curt, high this to that the could or at room high-end? EBIT exceed solidly a at the end fairly now it high about appear that be guidance XX%, does are that the but

Curt Espeland

that’s on but expecting kind think recall range solidly we and impact the we’re high we’re operational. purpose the solidly of the that’s at and we before for of that's No, of XXXX where end that

Mark Costa

quarter the can other our with now best The in we've pre-event of fourth this make notice and as strength doing then really as do of event you of that understand see what the delivered growth attractive to one-time with sort well I’ll we’re caused earnings thing event. guidance we’ll how consistent you our so sure the and call

Aleksey Yefremov

this, guess could where to are the of follow are the I decelerating margin fourth as some volume help quarter from us are things you may or quarter areas the and biggest third in to bridge be terms the what build improving? up

Mark Costa

we all of first quarter raised to that we're want on the full guidance. extraordinary our Yes, feeling year I obviously an better had emphasize That basis just still we third we we volumes that across third expect seasonality always quarter. a every year. very drop businesses, where quarter good fourth most normal think happens of to about there's sequentially off fourth When our

all your should we that forecast is as in there have normal. So

three that in business we sometimes, with drop dynamics across orders the strong fourth utilization is growth remarks., quarter of the segments in AFP growth in meaningful quarter we repeat quarter also third sort and Curt look that had in asset high the won’t chunky asset the earnings in we our on and earnings expect having we as some in prepared expect the exceptional how can benefited at fibers four AM four As third mentioned quarter. of fibers yields the fourth fibers a come from bit customers segments, our in

that off come of thinking their of about to be this when an basis that second the for so is earnings than improvement business. going be fibers first you this and testament quality half you on to which the a really business, a see and of should better half And stabilization

will growth in quarter volumes intermediates still off think first through expected come the chemical quarter, and out, that I the you will strong remarks. you in can year-over-year overall when as Curt be walk AFP comes his it do is how math, noted So year-over-year for But but

Operator

Thank Jefferies. Alexander the we you. go Please And queue, our take Laurence from question now ahead. next from

now open. is line Your

Daniel Rizzo

Its some revenue? and that means animal well Daniel meaningful I double-digit. quantify segment you terms and early at very you? it is Is how growing still Tetrashield mentioned are was or it doing in yet wondering could Rizzo different products the just new of like what nutrition You if in stages?

Mark Costa

superior out Tetrashield Well how to incredible already non-BPA low it's with and It's Tritan unique volumes. of olefin to Tetrashield can and integration believe we to do out solutions market I of some area getting and rate have commercial acetyl our still to is of there. volume packaging performance We've great product just complex in very all available has stages. It we take in and mentioned. it had and Tetrashield the where chemistry as create -- what's automotive an polyester other pressures is technologies, a but for it the early out coatings a momentum relative lot turns the cans coatings the The as Trident solution are faster in growth story wins is we've and a going market. about talked BPA given much the the

we a it couple some takes over but volume did to So years build growth meaningful that next while that growth. and see actually get to could

Curt Espeland

our all these think we about as our am just to that's innovation And contributing the telling programs programs and company innovation these to excited are and I why are February business I to story on we're adding X% different can you clauses components be going revenue across off tell that X. that

Daniel Rizzo

the past just we've you was just I are could color different wondering provide stuff just with uses that there. talked cost program and the of I And about for we on in where in think if fiber innovation, then or innovation base. terms

Curt Espeland

that progress seeing acetate We're versus this yarn Great last year on our business in in double-digit with front as growth well. our strong already growth year.

orders which what Naia, decent and getting an interest. in getting space commercial businesses about excited is those yarn, market acetate latest margins. the great is building in version improved have that of very and have in that Our a are We're we while for

should making and you about close other applications more done the on by we're a and Day in orders those to we'll some are applications progress great commercial we there. tell also We Investor have few getting them when that get very

the on progress getting assets. making I think we're great

with to would in is diversity applications a of the resources specialty doing see now the growth years scale, great few with work to the on portfolio. the I in find capability to this the a progress great amazing real in accelerate we're I to we and AM of a guess fundamental and testament this cellulosics just our Now strength years note able project diverse ago, priority and strength that and example always it's a application couple have of development we're new having ago AFP, and to those shift

Operator

And Jeff Please question the now take queue Zekauskas we'll JPMorgan. go from from ahead. our next

now is line Your open.

Jeff Zekauskas

the you in it case your diminished? reversals with million maintenance gasification of so item that to being nonrecurring a to management item, all extra recurring costs there million million calculate actual are quarter have of? or are capital $XX of and $XXX item? am that you're Is earnings this outside a I a management How in how the the that incident? is it And hit Is much compensation the recurring in interested factored coal from the $XXX from is fourth cost? compensation if do $XX million speaking of it's this is there

Curt Espeland

variety is Jeff that me a I there questions in but address Well best let to of there, of as try can.

three the you operating when really we costs to kind areas of impact. nature the think all this of about about of of think First need

being costs higher insurance. by First our operating offset business is just interruption

generally raw our we lower after be these deductible. we So to with but cetera material utilization our million will do et $XX be higher rate higher which costs operating anticipate working we with insurance policy interruption due covered meet business should partner our cost is a cost

but is the the going the is be event finally And property this nuances inventories. of to of be of quarter generally rates cost plant had that our and deductible. after of then fourth and will to million in we with $X our be bucket insurance second the a which The some be by utilization accounting damage reduction triggered mindful working impact be because also of could the property should cost and insurance repair to equipment covered partner replace on

and as but of event this going to decrement I and because kind not of say example life an quarter. kid that actually to of so have fourth we’re this And because charge may we myself might in the

insurance standpoint these to best when have sheet from hung timing fourth the we up various impact what our complexities what’s now et on right But And quarter look with positive an number and in recovery it then all on cetera. income again going will million close is $XXX we will to hard cost about when statement balance know together be put probably to net get I a analyzing XXXX will recovery that estimate partially we’re XXXX. roughly the still I it. material the insurance we will So say over a that it's cost as be that not think at offset whether as or see that

Mark Costa

can it storm and for costs just massive going the the I though that in disruption of times XX% of time you we've and large such it the comes sort a incredibly will in sales flying go for replacement a just greater that need shop. error. the and and room the have lost incredible on best incredible been this we XXX what are in front the operating collaboration you no explosion I we call teams site customers And at can to which complex make I needs management it this units of in on-site have we it the just is of have collaboration drones serious system shop the control site talked what even across but normal the get the is at out there within very are you and than from learn construction couldn’t share have daily fortunately scale all you in pipe and incredibly hit to not all The the as damaged is we that back pipe frame we've this it’s complicated the come few massive progress we’re utilization its big make like how run incident half. facility operations her complex sort systems two focus days built we how true to when Tennessee examples. four we facility being have couple event to where we’re complex the proud a sort possible of truth short of power testament airlines When have the five we damage to to we different it also big identifying want production across at we’re the to included how and is I bring sure a of and Jeff fabrication the making a air The seriously of the scale we unlike am We doing. to airlines another know to would about replacement for are we in and commission team expertise want we integrated has when site. just we state-of-the-art week very equipment At story of plant version obviously of and site all going downstream protected flights the in a can about compensation And take a the very we’re we XX our afford steam limited take the building parts. acetyls this we time through or mile together of impact. event the traffic in our and be balance after a have engineering canceling it’s segments Atlanta And just were this associated thing about as these imagine a like just day into choice fabricating up managing around to and our examples highlight I impact and to incredibly to calculations. back days will talk when a over units

can an and like got to driving facility of it looks XXX can the resources. contractors up flex of there. anthill working busloads because have on of repairing scale even with help this only on and the situation. site And over We So we with our Texas employees do top that we quickly mechanics pitching on from we over moving

our hydrate addition shops people The or support in our bottom the point always other customers other line companies this the The we just repairs have what we in time. that they above bringing records our up performance we was production weeks. outside fabrication faster And they and have liability you XXX% engineering site of XX% can two we’re level that’s where and is on running at We someone on. where those count largest this scale. important couldn’t review historical as a had unless that know for from already all backup go in exceptionally would set of record brought side we new those and hydrate facilities operating low to

scale do testament take going integration. am a it's could the myself not but of seriously and on to So done and I hour and what proud really real happy great to of cut but go examples I another about we’re set for it we've we I'm off, value this

Jeff Zekauskas

you sounds can some the flow start will for cash between $X be somewhere then not to the what quarter when billion and cost all that say penalty in happened XXXX, is it caused that true it be the depending $XXX up million free you to of sounds on those want fully like you're know if this. and are be I actually also and of will the So explosion? year first It That running. what going like like

Curt Espeland

moving So of about lot talk It's let parts. Jeff. flows cash still me the

by we're be the beyond this cash it's So will incident, fourth operational it further inventory flow assuming in but operating for point declines what timing higher being normally the quarter the to impact cash on of somewhat that we call cost offset at neutral tough exact the as be do. to is of

given to So various to also we're the cash confident going to we're quite need again going $XXX if in will towards that it I'm out there. the Eastman I think is the team. you the cash our And portfolio $X quality flow more and XXXX even billion our rebuild flow grow free by honestly to Jeff discipline moving that parts, in we're there and XXXX cash hard of of million inventory in while deliver working these still be billion threw free

cost first to that it be in the that exceed will look next that when still in quarter at today, lingering recovery, again some On predict the I of we impact first in again will recovery 'XX half the operating insurance versus it continue additional at it's cost insurance year but still hard the earnings the the -- may will year. have

impact So seeing 'XX in I still see negative the fourth on this as a the versus you're net quarter. positive impact

Mark Costa

one, things on Two this emphasize to operations. the coal we efforts disruption preventing want downstream question is I gasification to customer's are Jeff of extraordinary done in any

those into alternative we we're brought through planet, hand sure inventory make customers assets up we the back-up from the of the all had the and fourth next with to access and the we we sources can back operating quarter their serving our facilities with materials around event with year. in combined have So raw

of revenue TI. the is which primarily our to percentage small inside So be very to sales asset deals disruption related going is

one. investigating again. is caused of it the point happen two we're how doesn't the we make and it that's understanding sure process in Point that So still and incident

doing we're So we're it. going rest about that point, comment you but not to can at this assured

Operator

next Please our the Thank you. ahead. Fargo queue And go then question from Frank Wells Mitsch Securities. we'll from take

Your line now open. is

Frank Mitsch

comping my were to you asked you're that you XX%. but expect that that the million basis using the What call that fact in $XX about EPS not impacted in question you question million EPS will $XXX given going XXXX. obviously million a that growth at a be going the a growth to be be trying me by QX, to in level. EPS XX% just mentioned, said which off basis to comment $XXX was down plus to that neither XX% of begs actual Kingsport would which because the Regardless of of lower was or happen negatively use strong the you growth the $XX solidly going understand you strong going XXXX to opinion you're growth exceed during about to Kingsport, regard to in when million that? Mark, end and euphemism and off didn't you're you're high the EPS of when to the that were strong EPS you XX% of Curt I

Mark Costa

clear we're this we're Yes We moment make well Frank, that and back about flow ago. as I comment building strength a in for really earnings year year. to value next the we're how cash a growth on and goes as creating that sure made

outlook comments are my So pre-event.

a suggest this It noted earnings special growth just the So on is XX% benefit like strong as is number. event that being that to you get top around guidance taking number. year our to growth not of our and

changed on outlook talking for been that mid-single-digit still we markets lot we're that with year. what we've underlying the strong XX from look specialties the had in growth continuing about a rate consistent X% in the year track has it mix So within through have the comes at nothing growth the It driving about growth growth. of as to upgrade next and delivering in we've past, XX% to

Next year be stable fibers to year. we this expect to

have we're Maybe headwind. we'll application not fibers upside a new that in that having the pursuing. with So little all growth

to cost manage our allocation capital and to on focused continue shareholders. to be going we're always aggressively As continue for

of and growth we some coming next do have Texas accelerate year. that what year. as a drivers are go costs be continuing but all higher It this pre-event on next So repurchases dividend should in we year we share large and an very offset increasing by will so into good shutdown for top

- have We have off the now. taking right many growth making for so we investments platforms innovation

resources trials we’re the support the three and the And PVD, on special associated going go that up in and capacity assuming done growth Crystex We’re And with to the course it. additions of costs fixed Tritan. to to in the we’re have ramping with macro sales we've efforts customer then large uncertainties.

year's we’re currency bit of assumptions sort those is know we lot sort a around are of and we growth where there sort with of oil that all of stable are this level uncertainty. now. a raw the and And assuming We’re in to material GDP go assuming it stable

And will so have well incident fourth the quarter year. all math as about sort that's still before make clarity it it of to this sure impact the earnings we’ll on then the next we that and work through an impact had

Curt Espeland

what clarify of And we’re impact do the What going are costs be Frank in going of in just result. Mark’s you will that of actually the recoveries. despite the impact to and insurance that make and the do to costs about. can going operating we we’re be insurance The to business those anything you’ll published on expect included And to can would event growth rate see is that transparent our that underlying we so doing as as recovery marketplace. you as talking the see these

Frank Mitsch

a about talk year-over-year think is bit space you seeing you going Europe, be? sustainable of proved might thought you're in that world of of over that and up be currency I can little a the sales how business bit the in but little Europe part were the I that business XX% some to that in

Mark Costa

talked in Europe that it the Yes of commenting we what for in a Europe East. conditions I the was region. occurred only lot of well performance is growth to the macro I be Middle of the above clear about actually are driving just I and macroeconomic that’s think was the fills solar Most the

have driver you it’s that all so we is say So region Middle Africa to our of and part was Europe, of remember that. the East

of as had is we lot other Europe And lot favor of we also a Taminco well about less driving tires until in there growth so in and commercial where great still that of the what as and mix share And part benefit occurring the Europe, occurred personal had places. growth care that part of had solar fills, execution well a in talked we in Europe. some more as I nutrition was and

good Europe lot strength. as that see a in a yet. together all tailwind a fine we and improvement say The but there reasonably I came us sort for is very growth automotive been to macro wouldn’t So you of strong has of give

Operator

our question go Roberts And Please from now from take we will ahead. next John UBS.

now is open. line Your

John Roberts

you’ll derivative keeping the later be you’re assume by are return to that able swap on? swaps Kingsport acetyl and that the for able I the running price Do you in market to acid to into units you pay or facility. get importing

Curt Espeland

First are of our hydride. all units most running on derivatives of silicon

we with something can’t is the acid facilities. convert into hydride So some of

of to side So hydride. are into a lot bringing we acid the silicon make

downstream able And everything to can will which sort of so and unit customer we we all doing do to be derivative are keep running needs. meet we

Mark Costa

is to I do things the market going bear, we’re what we’re logistics been cost all the and provided. And that’s the having mean estimates bringing I with be those into in will to starts factored those

John Roberts

ask I I on jumped And bit but a for on monetization Longview strategy? did question the update apologize obligatory the an little anyone late,

Mark Costa

lucky you’re today. winner John the

majority is volatility I divesting for Again to we just ethylene before ethylene vast an priorities before commodity as the our talked of as still position. our of product as So olefins the main update, give said from lines. position well us excess ethylene is this one potentially you some of as

try working So hard are done. really something to get to we

a working we engaged if continue We see a to and are parties can diligently get have of we to number transaction completed.

different joint mentioned also I sales, exploring structures. of other venture include or we’re options before could which As type

would So made market this longer has the take kind than process this I challenging much continued prefer. conditions with combined of

Curt Espeland

the though, get clear to ethylene we be out going committed so volatility are done. to to of this getting portfolio and And we're this

Operator

you. Thank

David we'll queue, Deutsche take Please now ahead. question from next Begleiter go our the from Bank. So

Your line is now.

David Begleiter

XX%? XX% XXXX we is that roughly did strong what 'XX you similar in when earnings to growth, to Mark up guidance, say on your i.e.

Mark Costa

bridge 'XX to 'XX early in growth on that It's phenomenal we this be year. a little into to of XX% specifics range, and where the get the would is

some 'XX 'XX. being by that repeat solar that is repeat in what fluid volume example driven but it exceptional in for won't like of Some will sales

have another coming slog in We big 'XX.

with see have we'll have give on certain from it you is half stage I what likely dynamics you don't know of The to range more that's but in We'll if together that this upper know. So lot detail January, and side. the we to how break position give there comes flow this where and the at us all bit quarter going much growth for now. making one, and next deliver time do we ourselves fourth cash have most right on of well results of a we in We're on the great spending year. our a so sure event

David Begleiter

target big Very a goods specifically? to good is from working come a $X pretty cash to say free release you visibility just QX, need of where have from the QX that make just and finished and capital they’ll it do you from on to Curt billion have the enough

Mark Costa

operating we're actually costs. be inventory what another of to will way is be that reducing We'll Maybe do some to is again neutral. it I working due will expecting be think also kind Sure, look the seasonality may is our the offset typically release the 'XX in generating in we quarter at fourth actually operations the cash mentioned of now. compared as incident quarter, cash businesses. large it this that we to fourth capital quarter to

quarter that million $XXX you if fourth If cash pension. we adjust of of generated 'XX flow you look at million for free $XXX of

at also million be $XX at to 'XX. look you or our lower quarter 'XX, if If we're roughly to $XXX expecting million. it's compared that fourth expenditures look actually you in going of seasonally CapEx, capital roughly the

about to cash So other $XX need quarter, flow. flow last capital free when you do that million we cash billion flows achieve to $X that cash working is either generate in math, all or operating above fourth year's

free up So sensitivities do flow through is I further visibility. goal XXXX. There that's billion of We we're at our to cash grow look good dollars and it. that is but that managing work towards some how have

Greg Riddle

one last the Let's question next make please. the

Operator

Sir. you, Thank

coming from from ahead. Please is go question Research McCarthy the So last Partners. Kevin Vertical

open. now is line Your

Kevin McCarthy

from begun this Have would given in earlier is than that or there year? the receive happen a propylene you expect when might've we thought to enterprises benefit surge unit to you and PDH propylene, greater perhaps

Mark Costa

Kevin, we're not will exactly be and sure up when come the effective. enterprise

The we limited in we conditions where to be You them. propane at go are as the would originally. us at into going have current this have point. are to that price to benefits time to relative somewhat supplying us ask some asset where But year expecting next we are were certainly point to

Kevin McCarthy

your timeline? plans in that on has no to in that then comment utilization expand on you and And for as XXXX a and Kingsport incident example your capacity assume the bearing follow-up levels Triton can at can we

Mark Costa

Yes, the online, the do the bringing the incident and impact Kingsport we first finish which at at fourth very has on utilization moment up as high. quarter no move Trident is capacity we the and expect to quarter the

significant their that investment capacity. their us in all have doubling We and to growth in tremendous we a why our support product. We're make interest customers trying growth and of to that's with and such desire

good that So business. we're about feeling

Mark Costa

back a and with we the the we you if set Day. great we'll But about Just to call track and really of little as just put XXXX, wrap track break actually in offer we up we've We're think building past and years to get want And share the as at this up what or in tremendous as you Day. delivered our bit of organic been commercial the growth excited we we've we lot to from three the about excited for go record look Investor acquisition. a more out, to Investor value record company. a close can forward a we growing

this the see a when year XXXX as currency XX% out CAGR share again of versus well $XX you’d and be If fibers, be about started headwinds which you that transformation, as CAGR back XX% XXXX. sort should oil would this macro of we

of very billion happen. So and our the connect, application we’ll work growth great share did the and see aggressively so deep a through plays organic and platforms lot and the value technology it making revenue, all to portfolio, specialty our it that and a portfolio scale of more we’ve are businesses. really around when it proud world capability class with it can compelling together we that has well the components market three about the and How when adding of go half you that some - and current integration growth role we And in I of managed how acquisitions ahead of bodes of almost how back trend how developed you that X.X will you works. it engine organic divesting we to development

So, to an existing I day. going think it's be

reason ability out forward. We’re growth really so to looking you only better just But understand this as our these are to the forward so going adjustment drive Thank working headwinds I our also it. details looking was the we clear, and past all you. going forward is, stabilize to I the that in forward - macro bring we’ve move be understand through you're growth we for can delivered really

Greg Riddle

concludes remarks. that our Silvia,

Operator

Thank you.

Eastman gentlemen, that call. third participation. XXXX will So Thank and you conference Company's conclude quarter today's ladies Chemical for

now disconnect. may You

Eastman Chemical (EMN) 27 Oct 172017 Q3 Earnings call transcript