Eastman Chemical at J.P. Morgan Conference: Methanolysis Leads Growth

On Tuesday, 11 March 2025, Eastman Chemical (NYSE: EMN) presented at the J.P. Morgan Industrials Conference 2025, providing insights into its strategic initiatives and financial outlook. CFO Willie MacLean highlighted the company’s focus on methanolysis as a key growth driver, while acknowledging challenges such as tariffs and currency fluctuations. Despite these headwinds, Eastman remains confident in its diversified global operations.

Key Takeaways

• Eastman expects Q1 earnings to slightly exceed Q4 2024, aligning with January guidance.
• The methanolysis initiative aims to double production capacity, significantly contributing to EBIT and EBITDA growth.
• The Fibers business faces destocking challenges but is expected to generate $400 million to $425 million in 2025.
• Natural gas prices and currency fluctuations pose financial headwinds.
• Eastman is committed to disciplined capital allocation and cost control.

Financial Results

• Q1 2025: Earnings are anticipated to be slightly ahead of Q4 2024, staying on track with earlier guidance.
• Full Year 2025 Guidance:

- Expected EBIT and EBITDA growth of $75 million to $100 million, driven by methanolysis and advanced materials.

- The Fibers business is projected to contribute $400 million to $425 million, down from $450 million due to market destocking.

- Cash flow targets are set at $1.3 billion for Q1, with aims to return to $1.6 billion in a more favorable economy.

• Headwinds & Tailwinds:

- Natural gas prices present a $50 million headwind, while currency fluctuations could negatively impact by $30 million.

- Some stability in markets, with better-than-expected performance in additives and functional products.

Operational Updates

• Methanolysis Production Ramp-Up:

- Plans to increase production capacity to 50,000 metric tons in 2025.

- Focus on operational efficiency and feedstock management.

• Longview Plant:

- Progressing with offtake agreements, including a contract with PepsiCo.

- Groundbreaking anticipated around midyear.

- Received up to $375 million from a DOE award in Q4 2024 and Q1 2025.

• Waste Plastic Management:

- Challenges in managing feedstock mix are being addressed to improve operations.

• Tariffs:

- Minimal direct impacts due to global supply chains.

Future Outlook

• Growth Strategy:

- Emphasis on innovation, especially in methanolysis and advanced materials.

• Regional Growth:

- Prepared for potential expansion in China and Europe.

• Licensing Technology:

- Exploring licensing or partnerships for methanolysis technology.

• Capital Allocation:

- Maintaining disciplined capital allocation and cost control.

• Risks & Opportunities:

- Economic uncertainties in the latter half of 2025, with potential upside from improvements in discretionary markets.

Q&A Highlights

• Methanolysis margins are approximately 50% on incremental revenue.
• The Kingsport facility will be about half-loaded this year, with a capability of 100,000 tons.
• Favorable conditions for waste plastic compared to paraxylene/ethylene glycol at $70 crude oil.

In conclusion, Eastman Chemical’s strategic focus on methanolysis and disciplined financial management positions it well for future growth. For a detailed account, readers are encouraged to refer to the full transcript.

Full transcript - J.P. Morgan Industrials Conference 2025:

Jeff Zokoskas, Analyst, JPMorgan: Hi, good morning. I’m Jeff Zokoskas. I analyze chemicals for JPMorgan. It’s my pleasure this morning to introduce the management of Eastman Chemical. Representing Eastman is Willie MacLean, who’s the Chief Financial Officer.

He’s been CFO of Eastman since 2020. In his early days, he graduated from the University of Chicago Business School. So he’s pretty sharp CFO. And in the audience is Craig Riddle, who is the Head of Investor Relations at Eastman Chemical. The format of our session is fireside chat.

So maybe the place to begin, Willie, is it seems to me every year, Eastman puts out a press release before it comes to our conference. And what you guys do is you say, we’ve exceeded earnings or we’ve missed earnings or this is good or this is bad. But this year, there’s nothing. And so I was wondering why the change in pattern?

Willie MacLean, Chief Financial Officer, Eastman Chemical: Well, Jeff, I think I heard in the front row there’s been enough drama today. So first of all, thank you. It’s great to be here at the Industrial Conference again. Thank each of you in the room for being here and your interest in Eastman. I think as we laid out our expectations about six weeks ago, the macro background that we gave was in the discretionary end markets, which is about half of our portfolio that we expected, basically flat to declining consumption.

So think about building and construction, durables and automotive. But also, we have half of our portfolio that’s in stable end markets that we expected to grow, and we’re seeing fundamentally those growing here in the first quarter. I would also highlight that innovation is a key part of our growth, allowing us to grow above the end markets. As I see Q1, we’re ultimately on track for the guidance that we gave back at the January to be slightly ahead of Q4 here in Q1 from an earnings perspective. Obviously, I would say there’s been lots of discussions on tariffs, recessions and all of those scenarios as you would expect at Eastman.

And I think we’ve demonstrated over time. One, we allocate capital and we do it efficiently. Two, we control our cost structure and do that well, which I’m charged with overseeing. And we adapt and adapt quickly to the environment to maximize the outcomes for our stakeholders. And that’s what we’re focused on because I think while there may be more scenarios that we’re planning for today, at least here in Q1, solid results and in line with expectations.

Jeff Zokoskas, Analyst, JPMorgan: Some materials companies in the first quarter tend to have a March that’s bigger than February or January. Is that true of Eastman? Is March a particularly important month in the quarter? Or how is it weighted?

Willie MacLean, Chief Financial Officer, Eastman Chemical: What I would say is that transition month is March. As you think about just general seasonality, right, you got three more shipping days than you do in February. So with the additional shipping days and it’s always critical to starting Q2 strong. So I would say in the near term, order outlooks is a little tougher as you think about the order books and people are managing choices. But as we see it today, ultimately, the update that we’re in line with guidance takes that into consideration.

Typically, Q2 and Q3 are the strongest quarters of the year in our space with our end market exposure, but March is definitely critical to finishing. It’s strong, but setting the tone for Q2.

Jeff Zokoskas, Analyst, JPMorgan: And from your point of view, your order patterns that you can see through March are within your sort of general guidance parameters, at least at this juncture.

Willie MacLean, Chief Financial Officer, Eastman Chemical: At this juncture, what I would highlight is, as you think about headwinds and tailwinds, as we outlined those for the year, what we’re seeing here in Q1 is the, I’ll call it, the markets in the stable are holding up well. So additives and functional products is doing a bit better. As you think about chemical intermediates, advanced materials, there’s a little more exposure to natural gas. There’s some headwinds on that front. I think some of the banks have an improved outlook on currency and the euro.

So that could be ultimately modestly favorable as we see here in Q1 and more favorable for the full year if that plays out.

Jeff Zokoskas, Analyst, JPMorgan: So where we stand today, I think Eastman said maybe there’s a $50,000,000 headwind from natural gas, maybe currencies are negative $30,000,000 for the year. And my guess is natural gas is a little bit worse in that or it’s what I mean by that is natural gas has inflated. Now maybe you’ve hedged or you can see into your gas costs. And it may be that the maybe the economies have softened or demand has softened a little bit. Do you find the first quarter more uphill?

Or do you think that the risks have increased? Or are they more or less the same?

Willie MacLean, Chief Financial Officer, Eastman Chemical: Well, I think sitting here with, call it, two weeks left in the quarter, the risk have, I’ll call it, heightened, I think, but it’s more of a full year heightened versus Q1. When you’re sitting here with a couple of weeks, yes, we need to fulfill the orders, we need to operate our plants well to get the cost structure through that we need. But I would say net, the stable markets and strengthen additives and functional products is offsetting any, I’ll call it, short term headwinds as our costs pass through contracts and our pricing actions and advanced materials, fibers and Chemical Intermediates would ultimately follow through in Q2. Are tariffs

Jeff Zokoskas, Analyst, JPMorgan: something that Eastman really has to contend with

Willie MacLean, Chief Financial Officer, Eastman Chemical: or not so much? The direct impacts tariffs are enacted and have been increased with China. Also as we think about outside of the automotive space between Canada and Mexico and The U. S. Ultimately, our revenue base is about 10% in China, of which 5% about half of that we keep in country.

It’s low single digits for Mexico and Canada. Everything that’s been enacted to date, there’s been minimal direct impact on Eastman. As you would expect, we would use our global supply chains and asset footprints in addition to our partners and suppliers around the world. Where I see, and this is true in late twenty eighteen, early ’20 ’19 and the playbooks that we set up, it’s really about the health of the global economy. Uncertainty for capital uncertainty for making contractual decisions, that’s not healthy for the overall consumer and our customers.

So I think that’s as you think about the back half of what ’25 could be, there’s more uncertainty today because there’s not clarity. And you have to be prepared to deliver on your cash commitments, to deliver on your cost commitments and maximize where you’re innovative and differentiated in the marketplace with customers. Some people think that

Jeff Zokoskas, Analyst, JPMorgan: there’s room for China to accelerate in its growth. Some people become a little bit more optimistic about Europe. Maybe they become a little bit more pessimistic about The United States. Is it really too soon to tell? Or when you look across Eastman’s businesses, have you seen any inflections, even if subtle in any of those geographies?

Willie MacLean, Chief Financial Officer, Eastman Chemical: Yes. So I would highlight the fact that we’re diversified globally. As you think about roughly 45% of our revenues in North America and the rest is outside The U. S, North America. So the way I think about that, it positions us well ultimately should that growth occur.

I would say there’s been more talk than there has been actions and then how do those actions start to flow through the economy. So yes, I would say last night over dinner and today, lots of questions on Germany and the health of Europe and can that be positive. The question is, is that ’26 or longer because it takes time to get that create growth opportunities for Eastman. And as you think about a healthy economy more broadly, where 75% to 100% of your end markets are growing, I think we’ve done resilient and performed well relative to peers. And with our investments and the growth that can continue to differentiate us, that creates upside when those economies do become helpful.

Until then, we’ll be disciplined. I think that’s a characteristic of Eastman and our team members are committed to delivering on the plan and the strategy long term.

Jeff Zokoskas, Analyst, JPMorgan: So Eastman believes that it can grow its earnings, I think, to a range of $800,000 to $875,000 and maybe last year you earned $789,000 something like that. Yes. Is the key to earnings growth this year the methanolises initiatives that you have?

Willie MacLean, Chief Financial Officer, Eastman Chemical: Great question and thank you. Absolutely, we’re focused on growing from innovation. As we think about the growth year over year, roughly $75,000,000 to $100,000,000 of EBIT and EBITDA growth come from methanolysis and our advanced materials as we basically it’s interesting that we have aluminum here on the table for water today. As we think about carbon efficiency, polyester is key to that and we can take that polyester as a feedstock, which is basically purified carbon already and turn that back into a circular material. So it’s basically on a molecular level back into the intermediate, which is DMT in this case and ethylene glycol.

And then we turn that into specialty products that could go into personal care, cosmetics, medical devices, hydration, kitchenware. Those are all of the places that we’re winning with today that not only want clarity, chemical resistance and durability, but today we’re adding circularity to that. And that growth, we had over 100 plus customers and wins last year. We’re continuing to grow that pipeline and funnel. And again, based on the operations this year, we’re on track to double our production from 20 ks met tons to 50 ks met tons in ’25.

So production, I’ll call it the benefits of utilization and not having the start up cost, create a growth picture that can impact the bottom line of Eastman. About $50,000,000 to $75,000,000 of that we expect in Advanced Materials and the startup improvement will be here in first quarter in our Other segment. So confident in the growth. We’re off to a good start. And again, look to check off the milestones as we go through the year to prove the investment case and that 15% plus ROIC on this project.

Jeff Zokoskas, Analyst, JPMorgan: Is so I think your primary product is called Triton Renew. Is it a premium product? And in selling a premium product in the current market, is that easier or more difficult? Or how have you contended with the price premium if there is one?

Willie MacLean, Chief Financial Officer, Eastman Chemical: As you think about Triton, it was a premium product before we added this new capability. As you think about co polyesters and competing on the pyramid that polyesters compete on and highlighted those factors. We’re adding this new dimension and those end markets and the segment and the offerings that we give and some those end markets and the segment and the offerings that we give, in some cases, they may want 25% recycled content. In others, it could be 50% and others, even more. And there is an offering across those segments and applications that we’re pricing in premiums above the standard price of Triton.

I think as we highlighted at the deep dive and in some of our calls, given the near term macro, we’ve actually seen more success in winning in these new market applications with the new functionality and brand claims. If a customer is already in Triton in this environment, making that switch or timing of when to make that switch is being evaluated. But we’re also the key I would highlight is we’re not losing any business as we’re winning with new brands. We’re continuing to grow off of those wins and those bases.

Jeff Zokoskas, Analyst, JPMorgan: So in moving from 20,000 tonnes of production to 50,000 tonnes, really the polymer sale could be more than that because you’re not selling 100% methanolysis product. What you’re doing is you’re blending it in and then depending on the customer requirements, they’ll take certain percentages and you’ll price accordingly. Is that the basic idea?

Willie MacLean, Chief Financial Officer, Eastman Chemical: That’s the basic idea and a good summary. What I would say is we’re looking at capacity and we think that’ll be over the next two or three years that we would basically consume 110 ks met tonne of waste plastic. It’s about a 90% yield, so about 110 ks met tons of intermediates that we can then monetize into 150 or greater

Jeff Zokoskas, Analyst, JPMorgan: polymers. Have you been able to manage the flow of waste plastic adequately in order to keep your production ramping at the right speed? Or has it been difficult working with the waste plastic?

Willie MacLean, Chief Financial Officer, Eastman Chemical: What I would say is, as we think about some of the learnings, as we had last year, we went through the mechanical phases that we now have fully vetted. The opportunity isn’t the flow of the waste plastic. I would say it was our learning curve as we think about the technical, the engineering and the operations aspects. And I would say we’re quickly accelerating up that learning or S curve. And today, we operationally know how to handle the different mixes of feedstocks that we’re bringing in.

It’s always been hard to recycle materials, but you can think about the different form factors and materials that you’re bringing in the operating states and we’re coming up that learning curve. And we actually think that creates a more sustainable first mover advantage. It also creates higher barriers to entry. You have to remember, ultimately, we’ve been in polyesters for seventy plus years. We’ve been operating methanolysis in some form for Kodak and Eastman for thirty years.

And then now we’ve introduced a broad array of complex feedstocks. This is not your clear plastic bottles. And as you saw when you visited Kingsport in November, it is a complex slate and we’re improving on that every day and coming up that curve. And what we’re seeing here in Q1 gives me confidence that we can produce that 2.5 times greater year over year.

Jeff Zokoskas, Analyst, JPMorgan: So just in rough terms, if your incremental revenues are, I don’t know, $75,000,000 to $100,000,000 and your incremental EBIT, exclusive of the startup costs you had last year is maybe $50,000,000 So the incremental margins of this thing are 50% roughly, something like that?

Willie MacLean, Chief Financial Officer, Eastman Chemical: Yes. To your point, as we’ve highlighted, ultimately of the $75,000,000 to $100,000,000 of incremental EBITDA year over year, about half of it is related to cost and operating efficiency. The other half is related to that 75,000,000 to $100,000,000 So I think at the high end of the range, you’re right. And then at the low end of the range, it’s a little less.

Jeff Zokoskas, Analyst, JPMorgan: So the eventual the capability at the Kingsport site, I think, is around 100,000 tons. So all things being equal, that facility will be about half loaded this year. And so when we project out what the EBIT can be or the EBITDA can be, there’s another, I don’t know, $50,000,000 in EBIT for 2026 or 2027 or however long it takes you to get to that full utilization rate.

Willie MacLean, Chief Financial Officer, Eastman Chemical: Is that fair? Yes. I would highlight to you that we expect to exit at $100,000,000 EBITDA run rate in Advanced Materials. So as we think about that, part of the 50 ks met tons of production will be at inventory to supply at that higher run rate at year end. So while directionally, I think you’re correct, I would consider the exit run rate and we think that that number can approach $200,000,000 of EBITDA when we’re at full run rate and we’re also at the, I’ll call it, optimized mix as is a true of our Advanced Materials and Specialty Plastics segment is we’re always looking for that premium mix and upgrade over the long term with these assets.

Do the incrementals keep rising as you get to very high utilization rates? Is that the way you get to these? What I would say is you can always over time raise those rates and then ultimately on the other assets and we’ll talk about Longview separately. But then as you bring on the next set of capacity, you can serve the broader market as well. Is it inexpensive

Jeff Zokoskas, Analyst, JPMorgan: to bring in waste plastic? When you think about that versus buying paraxylene or ethylene glycol, does this work to Eastman’s advantage or does it work against it?

Willie MacLean, Chief Financial Officer, Eastman Chemical: Yes, I think we’ve given past references at around the $70 crude mark that there’s definitely value being created relative to the Pure Zolline markets and what you’re discussing. Also as you think about trade and trade flows over the long term, we believe that for a true circular economy that these need to be regional markets, because shipping waste and ultimately not knowing where your waste came from in a recycled product, there are issues with that. And I think that’s being recognized. The question is how long does it take to get effective regulation in place to ensure that these markets, one, create the circularity and two, with food contact and things like that where there needs to be higher standards of safety that, that is preserved as well. So I think there’s two angles, one, regional markets from a barrier and then two, as you think about the trade offs with crude or PX.

Where do you stand with your Longview plant? That is the second facility that you have in mind. So again, we’ve made great progress with the offtake as we think about baseload contracts with PepsiCo. Two, we’re making good progress with the engineering and on the engineering front as we’re progressing towards breaking ground here around midyear. I would also say that we continue to make progress with the DOE and the DOE funding, which is additional scope within the project.

But we have an award of up to $375,000,000 We received cash on that award in Q4. We’ve continued to receive some cash here in Q1 as well and have good engagement along those milestones. So the next set of milestones will be the permitting and moving forward after you have that with the construction side as well. As we think about the broader footprint, we also will have the capability to also in addition to the baseload contract as we sell out Kingsport about the time this plant would be coming online to produce some more of those specialty products also with the intermediates from this facility. But again, the baseload contract is there.

That’s going to be more than half of the project and again, stable margins over the long term. That’s what the model is. We’ve got a specialty model and then we have the circular solutions model. And to me, the circular solution is the bigger market opportunity from a total volume, but it needs to have the key principles that we’ve outlined from the very beginning, which is we’re going to be disciplined. It’s got to have baseload contracts that are long term that have consistent margins across the economic environments.

Jeff Zokoskas, Analyst, JPMorgan: Have you given any more thought to licensing the technology over time in that these are relatively tiny amounts of polyester tonnage and the PET market is a very, very large market. Or do you think that’s best more for Eastman to go it alone?

Willie MacLean, Chief Financial Officer, Eastman Chemical: What I would say is we’re focused on creating the most shareholder value for Eastman shareholders. What I would say is a licensing model or a different business model that enables these to be capital efficient. In some cases, you may need 10 or 10 plus these types of facilities for polyesters in Europe and in The U. S. So as we think about there is long term value that’s going to be there.

Part of it is what’s the speed to market. And with that speed, how does that enable Eastman either through growing it, partnerships, licensing, all of those we would consider.

Jeff Zokoskas, Analyst, JPMorgan: What’s it like to negotiate with the DOE these days? Is it continuous from your experience last year or a little discontinuous? It certainly seems as though the administration has different priorities than the previous administration. And that the nature of the grant, I think, that you are going to receive has different sort of components that may or may not be necessary to the project?

Willie MacLean, Chief Financial Officer, Eastman Chemical: So the thing that I would highlight is across both parties, there are things that are key, which is one, jobs, and we’re bringing that to ultimately East Texas. 2, as you think about bringing jobs, Also, it’s on shoring, right? This is ultimately feedstock that we have here that we can make circular and it’s on shoring assets and jobs. The other aspects as we think about ultimately improving technology and investing in technology over time with the batteries as an example, Is also a positive. So we’re

Jeff Zokoskas, Analyst, JPMorgan: These are solar batteries. Is that right?

Willie MacLean, Chief Financial Officer, Eastman Chemical: I would say these are batteries that can store energy. So to me, yes, there are components of the project, which are less favorable in today’s administration. But having battery technology and being able to store energy is powerful for The U. S. And for differentiating, I think, U.

S. And our capabilities. So all in all, for East Texas, for circularity and for solving long term differentiated for us versus the rest of the world, We don’t want to be ultimately bringing products from around the world and putting that into our landfills or incinerating it.

Jeff Zokoskas, Analyst, JPMorgan: I think the other larger component of Eastman’s EBIT growth this year is its cost reduction program. Maybe it’s $50,000,000 How do you see that? Is that something that’s more SG and A focused or more cost of goods sold focused? Is it more people? Is it more process?

And how do you monitor the progress of that initiative?

Willie MacLean, Chief Financial Officer, Eastman Chemical: Great question. As I like to think about Eastman, our focus is on offsetting inflation every year. That number could be $75,000,000 in normal years. It could be $100,000,000 I’ll call it in some of the peak periods that we saw in the not too distant past. So as you think about, first, we’re committed to that.

This year, as we think about what’s required in this type of environment to grow, we’re doing an additional $50,000,000 I would say a large proponent of that is focused on gross margin and gross margin efforts, but we’re doing it across the enterprise. As you can imagine, at our large manufacturing sites in Kingsport in Texas, we’ve had a lot of activity going on at those sites and we’ve diverted resources to make sure that we have successful startups of our investments. We’re putting those resources back in focus now of how do we gain energy efficiency, how do we, I’ll call it, make sure that we have the best contract partners at our key sites and that those partners are driving the milestones and the efficiency with us. This is something that I think Eastman is good at and we’ve got towers across the key components, which is yields, energy efficiency and then fixed cost structure and then third party contractors is the way I like to think about driving those outcomes so that we hit that to the bottom line. And it enables us to ultimately perform well and resiliently should the environment be more difficult in the back half of the year.

Jeff Zokoskas, Analyst, JPMorgan: So when we think about risks to Eastman this year, you have a very profitable Fibrous business. And that’s been a business that’s really grown very nicely over the last several years, very, very sharp upward pricing. But maybe there’s been some change in different inventory levels or how do you see that business going forward over the next couple of quarters if you have visibility?

Willie MacLean, Chief Financial Officer, Eastman Chemical: What I would say is, as we’ve got it this year, we expected the full year to be $400,000,000 to $425,000,000 Part of that was Down from maybe $450,000,000 or something like that. Ultimately, the key factors in that are destocking. And I would say destocking is occurring in these end markets a little later than the broader markets that we were talking about the last couple of years. So why is that? Fundamentally, what has occurred over the last several years is the decline in traditional uses of filter toe has ultimately declined at a lower rate.

Two, the applications that consumers are buying is a different denier. And with that different denier is ultimately reducing capacity of the industry because you have to run that slower. And then on top of that, we’ve had growth in end markets that are considered reduced risk like heat not burn and others. And in many cases, it uses the same or higher amounts of the cellulose acetate toe. So that’s on, I’ll call it, the demand side.

So the demand is playing out better. That’s good for us. It’s good for our customers. Also as you think about capacity realization, Eastman has been focused on growing products like Naya and the textiles and the circularity of that product. And we’ve converted products over to textiles.

Additionally, we’re innovating and using part of the intermediate. So think about cellulose flake into the production of a product that we talked about at our deep dive called Aventa and bringing solutions for polystyrene to market today that’s on the shelves being tested. So we’re also seeing growing demand in other applications and markets. That is what led to a multiyear, I’ll call it, change in the economics because they weren’t, I’ll call it, maintaining the level of service that our customers were demanding. So we raised that to meet our expectations to also be on par with other products that we were testing.

As you would expect, it’s a low part of the cost and serving the traditional markets that Acetate goes into in these new reduced risk. They didn’t want to be short as they were launching new products. They built inventory. And now that we believe that the market is more stable, They’re adjusting those inventories. I would say what we’ve seen in Q1 is pretty much in line with what we expected.

There’s not certainty, but obviously, we’re in close contact with our customers and serving them in the Q2 and Q3. So it could go a little longer into Q2, but overall, I would say to date it’s been in line with expectations here in Q1.

Jeff Zokoskas, Analyst, JPMorgan: So you’ve changed your pricing in fibers to be more multi year. Does that cushion the change in EBIT or EBITDA? Can you see your margins a couple of years forward?

Willie MacLean, Chief Financial Officer, Eastman Chemical: So you’ve heard us talk about being fully contracted this year, being at that 70%, eighty % plus in twenty six percent. And to your point, we have contracts in 27%, twenty eight % even at this point. So the answer is, as we’ve converted, I’ll call it the business model and the return level, we were looking for longer term for visibility and then also on top of that, cost pass through as we think about certainty of margins across a multi quarter period so that we can maintain those margins within a year while we may get behind for a quarter. So the new model of commercial has transitioned from annual contracts that were not a high percentage of cost pass through to multiyear contracts that are staggered that also have cost pass through in them.

Jeff Zokoskas, Analyst, JPMorgan: So maybe as a last question, is Eastman a coiled spring if you had a lower interest rate environment, if interest rates went down 100 basis points, 150 basis points, would that activate your business model? Or can you calculate what the benefits to that might be in terms of volume?

Willie MacLean, Chief Financial Officer, Eastman Chemical: Well, the way I think about it, Jeff, is the answer is we’re well positioned. We’ve been disciplined. We’ve taken the portfolio actions that we needed to, and we produce a lot of cash. We’ve got half our portfolio today that has been depressed. We talked about automotive building construction durables.

There’s about that used to be 60% of our portfolio. So if you can take 10% of our portfolio, that’s at higher margins than the corporate average and then add growth on top of that, whether it’s industrial production or low GDP with the innovation, there is tremendous upside in that scenario, and we believe that it’s our job to be ready to activate that when it happens. And also, we’re disciplined on the cash flow and the generation of that cash flow. We’re It’ll be tough here in Q1 as we have higher cash taxes and I’ll call it building some inventory for the Q2 turnarounds, but we’re delivering $1,300,000,000 now. My goal is to take us back to the $1,600,000,000 and above in that type of environment.

The cash taxes this year

Jeff Zokoskas, Analyst, JPMorgan: are $50,000,000 higher than last year?

Willie MacLean, Chief Financial Officer, Eastman Chemical: I would say cash taxes are higher. We’re not going to say the number, but I would actually say it’s a little higher than what you just said.

Jeff Zokoskas, Analyst, JPMorgan: Okay. All right. On that note, thank you very much for attending.

Willie MacLean, Chief Financial Officer, Eastman Chemical: All right. We appreciate it. Thank you. Appreciate it.

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