伊士曼化學 (EMN) 2016 Q4 法說會逐字稿

Good day and welcome to the Eastman Chemical Company fourth-quarter full-year 2016 conference. Today's conference is being recorded. This call is being broadcast live on Eastman's website at www.Eastman.com. We will now turn the call over to Mr. Greg Riddle of Eastman Chemical Company investor relations. Please go ahead, sir.

大家好，歡迎參加伊士曼化學公司2016年第四季全年會議。今天的會議正在錄製中。此次電話會議正在伊士曼網站 www.Eastman.com 上現場直播。現在我們將電話轉給伊士曼化學公司投資者關係部的 Greg Riddle 先生。先生，請繼續。

Okay, thank you, Ebony, and good morning, everyone and thanks for joining us. On the call with me today are Mark Costa, Board Chair and CEO; Curt Espeland, Executive Vice President and CFO; and Louis Reavis, Manager, Investor Relations.

好的，謝謝你，Ebony，大家早安，謝謝你們加入我們。今天與我一起參加電話會議的有董事會主席兼首席執行官馬克·科斯塔 (Mark Costa)、執行副總裁兼首席財務官科特·埃斯佩蘭 (Curt Espeland) 和投資者關係經理路易斯·裡維斯 (Louis Reavis)。

Before we begin, I will cover two items. First, during this presentation, you will hear certain forward-looking statements concerning our plans and expectation. Actual events or results could differ materially. Certain factors related to future expectations are or will be detailed in the Company's fourth-quarter and full-year 2016 financial results news release and in our filings with the Securities and Exchange Commission, including its Form 10-Q filed for third quarter 2016 and the Form 10-K to be filed for 2016.

在我們開始之前，我將介紹兩件事。首先，在本次演示中，您將聽到一些有關我們的計劃和期望的前瞻性陳述。實際事件或結果可能有重大差異。與未來預期相關的某些因素已在或將在公司 2016 年第四季度和全年財務業績新聞稿以及我們向美國證券交易委員會提交的文件中詳細說明，包括 2016 年第三季度提交的 10-Q 表和即將提交的 2016 年 10-K 表。

Second, earnings per share and operating earnings referenced in this presentation exclude certain non-core costs, charges and gains, adjusted operating cash flow and adjusted free cash flow, excluding salary pension payments. A reconciliation to the most directly comparable GAAP financial measure and other associated disclosures, including a description of the excluded items, are available in the fourth-quarter and full-year 2016 financial results news release, which can be found on our website, www.eastman.com, in the Investors section. Projections of future earnings also exclude any non-core unusual or nonrecurring items. With that, I will turn the call over to Mark.

其次，本報告中提到的每股盈餘和營業收益不包括某些非核心成本、費用和收益、調整後的營業現金流和調整後的自由現金流，不包括薪資退休金支付。與最直接可比較的 GAAP 財務指標的對帳及其他相關揭露（包括排除項目的描述）可在 2016 年第四季和全年財務業績新聞稿中找到，該新聞稿可在我們的網站 www.eastman.com 的「投資者」部分找到。未來收益預測也排除任何非核心異常或非經常性項目。說完這些，我會把電話轉給馬克。

Good morning, everyone. I will start on slide 3. 2016 was a solid year for Eastman as we made great progress on our strategy to transform towards a specialty portfolio. Our innovative specialty businesses continue to grow strongly, improving product mix and accelerating our overall earnings growth. Strong contributors included many of our premium products such as Tritan, Saflex acoustic and head-up display interlayers, Crystex tire additives, tire resins and performance films. In particular, growth in the premium products has been a key driver for the Advanced Materials segment, which has grown operating earnings for four consecutive years with a compound annual growth rate of over 20%.

大家早安。我將從第 3 張投影片開始。 2016 年對伊士曼來說是堅實的一年，因為我們在轉型為專業產品組合的策略上取得了巨大進展。我們的創新專業業務持續強勁成長，改善了產品結構並加速了我們的整體獲利成長。強大的貢獻者包括我們的許多優質產品，例如 Tritan、Saflex 聲學和平視顯示器夾層、Crystex 輪胎添加劑、輪胎樹脂和性能薄膜。尤其是高端產品的成長，成為先進材料部門的主要驅動力，該部門的營業利潤連續四年增長，年複合成長率超過 20%。

On cost management, we did an outstanding job in 2016 reflecting very strong productivity gains. Overall, we are able to offset cost inflation by about $100 million with the actions we took at the beginning of the year. And we will deliver another $100 million to the bottom line in 2017 from the actions we took in the fourth quarter. All of this was achieved without sacrificing our investments in our long-term growth initiatives.

在成本管理方面，我們在 2016 年做得非常出色，生產力得到了非常強勁的成長。總體而言，透過年初採取的行動，我們能夠抵銷約 1 億美元的成本通膨。透過我們在第四季採取的行動，我們將在 2017 年再創造 1 億美元的利潤。所有這些都是在不犧牲我們對長期成長計劃的投資的情況下實現的。

We also continued to generate strong cash flow in 2016 with adjusted free cash flow of over $900 million. We increased our dividend by over 10% in 2016, the seventh straight year of increases. Over that time, we have more than doubled our dividend providing attractive yield to investors. And we improved our debt profile by taking advantage of the European debt market twice, which further strengthened our balance sheet.

2016 年，我們也持續產生強勁的現金流，調整後的自由現金流超過 9 億美元。2016 年，我們將股息提高了 10% 以上，這是連續第七年增加。在此期間，我們的股息增加了一倍多，為投資者提供了相當吸引力的收益。我們也兩次利用歐洲債務市場改善了我們的債務狀況，進一步增強了我們的資產負債表。

Finally, we remain committed to returning cash to our stockholders with over $400 million returned in the combination of dividends and share repurchases. This performance reflects the strength of Eastman's portfolio, integration scale that has been built over decades and our strong team of employees who consistently deliver results for our stakeholders. It also demonstrates that we can execute on things that we can control from cost reductions, to returning cash to our shareholders, to innovating throughout our enterprise. And now I will talk more about that.

最後，我們仍然致力於向股東返還現金，透過股利和股票回購的方式返還超過 4 億美元。這項業績體現了伊士曼產品組合的實力、數十年來建立的整合規模以及我們強大的員工團隊，他們始終如一地為我們的利害關係人創造成果。這也顯示我們可以執行我們能夠控制的事情，從降低成本到向股東返還現金，再到整個企業的創新。現在我將進一步談論這一點。

Moving next to slide 4, we had an outstanding series of successes with our innovation portfolio in 2016. As I've mentioned on previous calls, we are not waiting around for market growth; we are focused on creating our own growth. Throughout last year, we've told you success stories on Tritan, Tetrashield, Saflex, tire resins, among other innovations. These programs are continuing to accelerate with more customer validation of these innovative, differentiated products, which will enable strong growth in the future.

接下來是第 4 張投影片，2016 年我們的創新組合取得了一系列傑出的成功。正如我在之前的電話會議中提到的，我們不會等待市場成長；我們專注於創造自己的成長。去年全年，我們向您講述了有關 Tritan、Tetrashield、Saflex、輪胎樹脂等創新的成功案例。隨著更多客戶對這些創新、差異化產品的認可，這些項目正在繼續加速推進，這將推動未來的強勁成長。

Through this year, you will also hear about other programs that are starting to gain traction such as next-generation Crystex, Aerafin polymers for hot melt adhesives, microfibers and textiles and nonwovens and new cellulose ester applications, with many more to come in the pipeline. These successes are a testament to our ability to leverage our expertise in key world-class technology platforms, both where Eastman has been a leader for decades and in platforms that we have acquired.

今年，您還將聽到其他開始獲得關注的項目，例如下一代 Crystex、用於熱熔膠的 Aerafin 聚合物、微纖維和紡織品及無紡布以及新型纖維素酯應用，還有更多項目即將推出。這些成功證明了我們有能力利用我們在關鍵的世界級技術平台上的專業知識，無論是伊士曼幾十年來一直處於領先地位的平台，還是在我們收購的平台上。

We are realizing compelling benefits from our significant investment in our application development capabilities, which has been critical to our successful launches into these new market applications. We will continue to accelerate our innovation and market development initiatives. In 2016, we delivered more than $200 million of new business closings. And as we look into 2017, we are confident that our rate of commercialized new innovation programs will accelerate. I have increasing confidence in the breadth and depth of our innovation portfolio, which is significantly more compelling today than it was three years ago.

我們對應用程式開發能力的大量投資帶來了顯著的效益，這對於我們成功進軍這些新市場應用程式至關重要。我們將繼續加速創新和市場開發措施。2016年，我們促成了超過2億美元的新業務成交。展望2017年，我們相信，我們的商業化新創新項目的速度將會加快。我對我們的創新組合的廣度和深度越來越有信心，今天我們的創新組合比三年前更加引人注目。

We are building the foundation for the future and we will increase our investment in our innovation efforts, which are a key to the long-term success of Eastman. I will have a lot more to say about the progress we are making with our portfolio throughout the year. Now I will hand over the call to Curt to cover the financial details for 2016 and then I will come back to talk about 2017.

我們正在為未來奠定基礎，並將加大對創新的投入，這是伊士曼長期成功的關鍵。關於我們全年投資組合所取得的進展，我還有很多話要說。現在我將把電話交給 Curt 來介紹 2016 年的財務細節，然後我會回來談論 2017 年。

Thanks, Mark, and good morning, everyone. Since we have a lot to cover today, I will try to be brief as possible with my comments. Starting with our fourth-quarter corporate results on slide 5. We delivered solid earnings despite the challenges we faced during the quarter. The decline in revenue largely reflected lower selling prices attributed to lower raw material and energy costs and lower Fibers sales volume, more than offsetting higher sales volume in each of our other segments and mix improvement from strong growth in high margin innovation products.

謝謝，馬克，大家早安。由於我們今天有很多事情要討論，我將盡量簡短地發表我的評論。從幻燈片 5 上的第四季公司業績開始。儘管本季面臨挑戰，但我們仍然實現了穩健的利潤。收入下降在很大程度上反映了原材料和能源成本下降以及纖維銷售下降導致的銷售價格下降，這抵消了我們其他各部門銷售的成長以及高利潤創新產品強勁成長帶來的產品組合改善。

Operating earnings were down slightly, headwinds include lower selling prices and lower Fibers sales volume. Positives included strong volume growth in all other segments and a positive impact from cost-reduction actions taken throughout the year. Operating margins for the quarter were flat against the year-ago quarter.

營業利潤略有下降，不利因素包括銷售價格下降和纖維銷售量下降。積極的方麵包括所有其他部門的銷售強勁增長以及全年採取的成本削減措施產生的積極影響。本季的營業利潤率與去年同期持平。

Next to slide 6, looking at the full year, we delivered solid results despite significant headwinds reflecting the strength and robustness of our strategy to transform to a specialty portfolio. Overall sales revenue decreased primarily due to lower selling prices and lower Fibers sales volume, more than offsetting higher sales volume in the other segments and mix improvement from strong growth in high margin innovative product.

在第 6 張投影片旁邊，縱觀全年，儘管面臨巨大阻力，我們仍然取得了穩健的業績，這反映了我們向專業投資組合轉型策略的實力和穩健性。整體銷售收入下降主要是由於銷售價格下降和纖維銷售量下降，這抵消了其他部門銷售量的增加以及高利潤創新產品強勁增長帶來的產品組合改善。

Our operating earnings declined as an increase in Advanced Materials was more than offset by declines in the other segments. Operating earnings also benefited from cost-reduction actions. Our operating margin for the year was 17% and our adjusted EBITDA margin was over 23%, which is one of the most attractive in our industry. Overall, good results in a challenging business climate.

由於先進材料業務的成長被其他業務的下降所抵消，我們的營業收入有所下降。營運收益也受益於成本削減措施。我們今年的營業利潤率為 17%，調整後的 EBITDA 利潤率超過 23%，這是我們行業中最具吸引力的利潤率之一。總體而言，在充滿挑戰的商業環境中取得了良好的成績。

Moving next to the segment results beginning on slide 7 and starting with Advanced Materials, which had another exceptional year as they continued to deliver impressive growth driven by our innovation platform. Fourth-quarter earnings increased year-over-year due to higher sales volume, particularly from double-digit growth of high margin innovative products, was partially offset by lower selling prices primarily for core copolyesters attributed to lower raw material and energy costs. Sequentially, volume and operating earnings declined due to normal seasonality, as well as higher operating costs. Fourth quarter was also a tough comparison versus our record third-quarter results on a sequential basis.

接下來從投影片 7 開始查看分部業績，首先是先進材料，該業務又度過了出色的一年，在我們的創新平台的推動下，繼續實現了令人矚目的成長。第四季獲利年增，主要是因為銷售量增加，特別是高利潤創新產品的兩位數成長，但部分被主要由於原材料和能源成本降低導致的核心共聚酯銷售價格下降所抵消。由於正常的季節性因素以及營運成本的上升，銷售和營運收益均出現下降。與我們第三季創紀錄的業績相比，第四季的業績也十分艱難。

For the year, sales revenue increased due to double-digit volume growth of premium products, including Eastman Tritan copolyester, Saflex acoustic interlayers and performance films. The volume and mix improvement was partially offset by lower selling prices primarily for copolyesters attributed to lower raw material and energy costs. Operating earnings were up 15% for the year primarily driven by higher sales volume, improved product mix and lower unit costs due to higher capacity utilization. The operating margin increased more than 200 basis points to over 19% from just under 17% in 2015. These results reflect execution of a multiyear strategy to deliver strong earnings growth and we expect to build on this success going forward, including another year of double-digit volume growth for Tritan and acoustic and head-up display interlayers in 2017.

本年度，銷售收入的成長得益於 Eastman Tritan 共聚酯、Saflex 隔音夾層和高性能薄膜等優質產品的銷售量實現兩位數成長。產量和混合物的改善部分被較低的銷售價格所抵消，主要原因是原材料和能源成本降低導致共聚酯的銷售價格下降。全年營業利潤成長 15%，主要原因是銷售量增加、產品結構改善、產能利用率提高導致單位成本降低。營業利潤率從 2015 年的略低於 17% 增加 200 多個基點至 19% 以上。這些結果反映了我們為實現強勁盈利增長而實施的多年期策略，我們期望在此基礎上繼續取得成功，包括 2017 年 Tritan 以及聲學和平視顯示器中間膜的銷量再創兩位數增長。

Overall, outstanding results for 2016, which continues Advanced Materials' track record of success.

整體而言，2016 年的業績非常出色，延續了先進材料的成功記錄。

And on slide 8, as you think about Advanced Materials going forward, we are well-positioned for another year of solid growth. Specifically, I would like to highlight the following growth drivers for 2017 -- strong volume growth above global GDP driven by favorable trends such as the continued shift to higher quality plastics and medical applications and vehicle lightweighting; continued growth from higher margin innovative product lines driving mix improvement; and additional fixed cost leverage as we fill out assets.

在第 8 張投影片上，當您考慮先進材料的未來發展時，我們已做好準備，迎接另一年的穩健成長。具體來說，我想強調 2017 年的以下成長動力——強勁的銷售成長高於全球 GDP，這得益於持續轉向更高品質的塑膠和醫療應用以及車輛輕量化等有利趨勢；利潤率更高的創新產品線持續增長，推動產品組合改善；以及隨著我們填補資產，額外的固定成本槓桿。

We do anticipate some incremental earnings pressure from higher raw material and energy costs as there is typically a lag in pricing relative to raw material costs for our specialty product lines. And with almost 60% of their revenue outside of North America, this segment is impacted by the strengthening dollar. But, overall, despite these raw material and currency headwinds, we expect another year of solid earnings growth in Advanced Materials.

我們確實預期原材料和能源成本上漲將帶來一些額外的獲利壓力，因為我們的專業產品線的定價通常相對於原材料成本存在滯後。由於該公司近 60% 的收入來自北美以外地區，因此該部門受到了美元走強的影響。但整體而言，儘管存在原材料和貨幣方面的不利因素，我們仍預期先進材料公司的獲利仍將再度穩健成長。

Moving next to Additives & Functional Products on slide 9. Fourth-quarter sales revenue and operating earnings declined as 3% higher sales volume across the segment was more than offset by lower selling prices primarily due to lower methanol costs. Sequentially, sales revenue and operating earnings declined as volume was lower attributed to normal seasonality of demand while pricing stabilized compared to third quarter.

接下來是第 9 張投影片上的添加劑和功能產品。第四季的銷售收入和營業利潤有所下降，因為該部門的銷售量增加了 3%，但主要由於甲醇成本下降導致的銷售價格下降抵消了這一增長。由於需求的正常季節性導致銷售量較低，且價格與第三季相比趨於穩定，因此銷售收入和營業利潤均出現下降。

For the full year 2016, sales revenue declined primarily due to lower selling prices attributed to lower raw material and energy costs partially offset by higher sales volume across the segment. Operating earnings decreased primarily due to lower selling prices more than offsetting lower raw material and energy costs and higher sales volume. And the operating margin remained strong at 21%.

2016年全年銷售收入下降的主要原因是原材料和能源成本下降導致銷售價格下降，但該部門銷售量增加部分抵消了這一影響。營業利潤下降的主要原因是銷售價格下降超過了原材料和能源成本下降以及銷售量增加的影響。營業利潤率仍維持 21% 的強勁水準。

One other item to remind you, we have been operating under a new organizational structure for a few quarters now which resulted in some major product moves between Additives & Functional Products and the Chemical Intermediates. As you consider the year-over-year comps, about $20 million or more of costs flowed through Additives & Functional Products in 2016 than was reflected in the $660 million recast view for their 2015 earnings while approximately $20 million less flowed to Chemical Intermediates.

還有一件事要提醒您，我們已經在新的組織結構下運作了幾個季度，這導致添加劑和功能產品與化學中間體之間的一些重大產品轉移。當您考慮同比數據時，2016 年流向添加劑和功能產品的成本比 2015 年 6.6 億美元重算收益所反映的成本高出約 2,000 萬美元，而流向化學中間體的成本則減少了約 2,000 萬美元。

Looking forward to 2017, Additives & Functional Products on slide 10. Key growth drivers for this segment include solid GDP plus volume growth; a diversified application portfolio, which is well-aligned with macro trends; a portfolio of growth platforms that we expect will accelerate product mix improvement. We expect these growth drivers will partially be offset by higher raw material and energy costs and a stronger dollar.

展望 2017 年，第 10 張投影片上的添加劑和功能產品。該領域的主要成長動力包括穩健的 GDP 和銷售成長；與宏觀趨勢相符的多樣化應用組合；以及我們預計將加速產品組合改善的成長平台組合。我們預計這些成長動力將被原材料和能源成本的上漲以及美元的走強部分抵消。

Similar to our specialty product lines in Advanced Materials, there is normally a six-month lag for pricing to catch up to rising raw materials in this segment. And given that 35% of Additives and Functional Products revenue is in Europe partially offset by local manufacturing, they are exposed to a strengthening dollar against the euro. Overall, we expect solid earnings growth in 2017 driven by a combination of strong volume growth and continued contributions from our innovation initiatives.

與我們先進材料領域的特種產品線類似，該領域的定價通常需要六個月的時間才能趕上原材料的上漲。鑑於添加劑和功能產品 35% 的收入來自歐洲，部分被當地製造業所抵消，因此他們面臨美元兌歐元走強的影響。總體而言，我們預計，在強勁的銷售成長和創新舉措的持續貢獻的推動下，2017 年獲利將實現穩健成長。

Now to Chemical Intermediates on slide 11. Fourth-quarter sales revenue increased primarily due to higher sales volume of olefin-based and functional amines products. Operating earnings increased primarily due to higher sales volume, stable margins and the reduced impact of commodity hedge losses on raw material costs. Full-year sales revenue decreased due to lower selling prices partially offset by higher sales volume of olefin-based and functional amines products. The lower selling prices were primarily attributed to lower raw material and energy costs, as well as competitive pressures due to lower oil prices for most of the year. Operating earnings decreased due to lower selling prices, which more than offset lower raw material and energy costs, higher sales volumes and the reduced impact of commodity hedge losses on raw material costs.

現在就來看看投影片 11 上的化學中間體。第四季銷售收入的成長主要得益於烯烴類和功能胺類產品的銷售增加。營業利潤的成長主要得益於銷售量的增加、利潤率的穩定以及商品對沖損失對原材料成本的影響的減少。全年銷售收入下降是由於銷售價格下降，但烯烴基和功能胺產品銷售增加部分抵消了這種影響。銷售價格下降主要歸因於原物料和能源成本下降，以及一年中大部分時間油價下跌的競爭壓力。營業利潤的下降是由於銷售價格下降，這抵消了原材料和能源成本下降、銷售量增加以及商品對沖損失對原材料成本影響的減少。

On slide 12 for Chemical Intermediates in 2017, we anticipate strong earnings improvement driven by solid end-market demand. We are assuming full-year olefin spreads in 2017 will be similar to 2016. We expect to realize the benefits of commodity hedges continuing to roll off and we expect operational excellence. Overall, 2017 should be a very strong recovery year for Chemical Intermediates.

在 2017 年化學中間體的第 12 張幻燈片中，我們預計在強勁的終端市場需求的推動下，獲利將強勁成長。我們預期 2017 年全年烯烴價差將與 2016 年相似。我們期望實現商品對沖的收益持續增加，並期待卓越的營運。整體而言，2017 年將是化學中間體強勁復甦的一年。

I will finish the segment review with Fibers on slide 13. Full-year revenue declined primarily due to lower sales volume and lower selling prices for acetate tow. As expected, acetate tow volumes were down approximately 10% for the year. Operating earnings were down year-over-year due to lower sales volume. Lower selling prices were offset by lower operating costs resulting from recent actions and lower raw material and energy costs. Despite the challenge from lower volume and lower selling prices, the operating margin for the segment remained at 31%.

我將在第 13 張投影片上結束關於 Fibers 的片段回顧。全年營收下降主要是因為醋酸絲束銷量下降和售價下降。正如預期的那樣，今年醋酸纖維絲束的產量下降了約 10%。由於銷售量下降，營業收入較去年同期下降。較低的銷售價格被近期行動導致的營運成本降低以及原材料和能源成本降低所抵消。儘管面臨銷量下降和銷售價格下降的挑戰，該部門的營業利潤率仍維持在 31%。

Looking forward, we continue to work through customer negotiations for 2017 and anticipate earnings for this segment could be down up to 25% for the year versus our previous guidance of 20% down. This change is due to uncertainty in China demand. Our expectation is outside of China has not changed as we expect tow volume outside China to be roughly flat relative to last year. We expect to have more clarity around imports into China by our first-quarter call.

展望未來，我們將繼續與客戶就 2017 年進行談判，預計該部門的全年收益可能下降 25%，而我們先前預測的下降幅度為 20%。這項變化是由於中國需求的不確定性所造成的。我們對中國以外地區的預期沒有改變，因為我們預計中國以外的拖車量與去年相比大致持平。我們預計第一季電話會議將對中國的進口情況有更清晰的了解。

I will also mention that approximately 2/3 of our tow business is now under multi-your customer agreements, which should help stabilize both volume and pricing moving forward. We remain confident in our long-term position and strongly believe that Fibers will continue to be a valuable business for Eastman.

我還要提到，我們大約 2/3 的拖車業務現在都屬於多客戶協議，這將有助於穩定未來的銷售和價格。我們對我們的長期地位充滿信心，並堅信纖維業務將繼續成為伊士曼的寶貴業務。

On slide 14, I will transition to an overview of our cash flow and other financial highlights for 2016. We did an excellent job of generating cash in 2016 with adjusted operating cash flow of just over $1.5 billion. In line with our expectations, capital expenditures totaled $626 million as we maintained our growth investments while managing the pace of spend with the economic environment.

在第 14 張投影片上，我將概述我們的現金流量和其他 2016 年財務亮點。2016 年，我們在創造現金方面做得非常出色，調整後的營運現金流略高於 15 億美元。根據我們的預期，資本支出總計 6.26 億美元，因為我們維持了成長投資，同時根據經濟環境管理支出速度。

Looking forward, we expect capital expenditures to be approximately $575 million in 2017 although we may moderately adjust this number up or down depending on the economic environment we see this year, as well as, as we go into 2018. Adjusted free cash flow for the year was $909 million, excluding an additional $150 million contribution to our US pension plan in the fourth quarter rather than what we would have contributed over the next two to three years. This investment is not only accretive, it is a tax-efficient use of cash, but also brought our funded status globally to approximately 90%.

展望未來，我們預計 2017 年的資本支出約為 5.75 億美元，但我們可能會根據今年以及 2018 年的經濟環境適度上調或下調這一數字。全年調整後的自由現金流為 9.09 億美元，不包括第四季度向美國退休金計畫額外繳納的 1.5 億美元，而不是我們未來兩到三年內繳納的金額。這項投資不僅具有增值作用，而且是一種節稅的現金使用方式，也使我們在全球的資助狀況達到約 90%。

Looking at the balance sheet, net debt stands at approximately $6.4 billion as of the end of the year reflecting our over $400 million in debt reduction for the year. We delivered on our commitment to reduce net debt by $1 billion over the last two years, reducing debt by a total of $955 million and $150 million in debt-like obligations in the fourth quarter with that accelerated pension contribution. Our impressive cash flow, strong balance sheet and liquidity keep Eastman in a position of strength in an uncertain economy.

從資產負債表來看，截至年底，淨債務約 64 億美元，反映出我們今年的債務減少了 4 億多美元。我們兌現了過去兩年減少 10 億美元淨債務的承諾，透過加速退休金繳款，在第四季共減少了 9.55 億美元的債務和 1.5 億美元的類似債務。我們令人印象深刻的現金流、強勁的資產負債表和流動性使伊士曼在不確定的經濟環境中保持優勢地位。

Additionally, we remain committed to returning cash to stockholders. Our full-year dividend was $272 million and this included an increase in the fourth quarter of over 10% and we had $145 million in share repurchases through the year, including $25 million in the fourth quarter. The combination of regular increases in our dividend and share repurchases reflect our continued confidence in our future earnings and cash flows.

此外，我們仍致力於向股東返還現金。我們的全年股利為 2.72 億美元，其中第四季增幅超過 10%，全年股票回購金額達 1.45 億美元，其中第四季回購金額達 2,500 萬美元。定期增加股利和股票回購反映了我們對未來收益和現金流的持續信心。

And finally, our effective tax rate for the year was approximately 21%, reflecting the continued benefits of our improvement in business operations and other positive tax attributes. We expect the effective tax rate for 2017 will be approximately 23%; although we will continue to pursue opportunities to reduce this rate further during the course of the year. Overall, a strong year of financial results.

最後，我們本年度的有效稅率約為 21%，這反映了我們業務營運改善和其他正向稅收屬性的持續效益。我們預計 2017 年的有效稅率約為 23%；但我們將繼續尋求機會在今年進一步降低此稅率。整體而言，這是財務業績強勁的一年。

Next, on slide 15, during the quarter, we opportunistically refinanced borrowings with longer-term European debt and a term loan with very attractive rates; the restructuring focused on extinguishing maturities for the next two years by repurchasing our 2017 and 2018 debt securities and retiring higher interest rate debt, as you can see on the chart, all while ensuring we maintain healthy levels of pre-payable debt to achieve any deleveraging goals that we need to pursue.

接下來，在第 15 張幻燈片中，在本季度，我們抓住機會，用長期歐洲債務和利率極具吸引力的定期貸款對借款進行了再融資；重組的重點是透過回購 2017 年和 2018 年的債務證券和償還高利率債務來償還未來兩年的到期債務，正如您在圖表中看到的那樣，同時確保我們維持債務的任何還款水平，以實現我們需要債務的任何目標。

This initiative reduces Eastman's weighted average cost of fixed debt from 4% to 3.7% and increases the weighted average maturity from 10 years to 11. Additionally, this transaction will result in an estimated net interest expense savings of approximately $20 million for the year with further savings in the following years. Overall, a great value-creating transaction for Eastman, especially with the recent increases in rates, so I really appreciate the leadership of our Treasurer, Keith Jennings and the Eastman team and our advisors who have helped us improve an already attractive debt profile.

這項措施使伊士曼固定債務的加權平均成本從 4% 降至 3.7%，加權平均期限從 10 年延長至 11 年。此外，這筆交易預計將使今年的淨利息支出節省約 2,000 萬美元，並在接下來的幾年中進一步節省。總體而言，對於伊士曼來說，這是一筆創造巨大價值的交易，尤其是在近期利率上升的情況下，因此我非常感謝我們的財務主管 Keith Jennings 和伊士曼團隊以及我們的顧問的領導，他們幫助我們改善了本已頗具吸引力的債務狀況。

On slide 16, we recognize the current economic environment we face requires aggressive cost management above and beyond our annual productivity initiatives to offset inflation. We are very confident that we will hit our 2017 cost-reduction target, which we expect will contribute approximately $0.50 of earnings per share in 2017. As you think about the cost reductions, a large portion are in manufacturing and the supply chain areas. And given the nature of these cost reductions, the largest share will be realized in Chemical Intermediates as they manage the big engine manufacturing engines.

在第 16 張投影片上，我們意識到，我們面臨的當前經濟環境需要積極的成本管理，超越我們的年度生產力計畫來抵消通貨膨脹。我們非常有信心實現 2017 年的成本削減目標，預計這將為 2017 年每股收益貢獻約 0.50 美元。當您考慮降低成本時，很大一部分是在製造和供應鏈領域。鑑於這些成本削減的性質，最大的份額將體現在化學中間體上，因為它們管理著大型引擎的製造。

I want to emphasize that we are achieving these cost reductions without sacrificing investment in innovation and market development initiatives and these cost reductions are well in hand. So with that, I will turn it back over to Mark.

我想強調的是，我們在實現這些成本削減的同時並沒有犧牲對創新和市場開發計劃的投資，而且這些成本削減正在順利進行。因此，我將把話題交還給馬克。

Thanks, Curt. On slide 17, I will discuss our 2017 outlook. We are doing a great job of executing our strategy in a challenging global business climate. Strong growth of high-value innovative products continues as we benefit from leading positions in attractive niche markets. We are increasing our investment in innovation and product development so that we can accelerate our momentum in the coming years. And we are seeing the benefits of scale and integration translating this attractive growth into earnings.

謝謝，Curt。在第 17 張投影片上，我將討論我們對 2017 年的展望。在充滿挑戰的全球商業環境中，我們正在出色地執行我們的策略。由於我們在有吸引力的利基市場中佔據領先地位，高價值創新產品繼續保持強勁成長。我們正在加大對創新和產品開發的投資，以便在未來幾年加速我們的發展勢頭。我們看到規模和整合帶來的好處將這種有吸引力的成長轉化為收益。

Additionally, our growth in innovation is leveraged to attractive disruptive macro trends in areas such as health and wellness, energy efficiency, and the emerging middle class. This enables us to grow faster than the underlying markets with our new innovative products. At the same time, we are achieving our cost-reduction goals. And I can't say enough about our employees around the world who make this possible. We will also benefit this year from the net of propane and currency hedges continuing to roll off and we continue to use all lines of the income statement to support our EPS growth. All of these actions are helping to offset the challenges we continue to face, including sluggish global GDP growth, a stronger dollar, volatile raw material and energy prices and the challenges we face in Fibers.

此外，我們在創新方面的成長有利於吸引健康和保健、能源效率和新興中產階級等領域的顛覆性宏觀趨勢。這使得我們能夠憑藉創新產品比基礎市場成長得更快。同時，我們正在實現降低成本的目標。我無法充分錶達對我們遍布全球的員工的感激之情，是他們讓這一切成為可能。今年我們也將受益於丙烷和貨幣對沖淨額的持續滾轉，我們將繼續使用損益表的所有項目來支持我們的每股盈餘成長。所有這些行動都有助於抵消我們繼續面臨的挑戰，包括全球 GDP 成長緩慢、美元走強、原材料和能源價格波動以及我們在纖維領域面臨的挑戰。

Putting all this together, we maintain our prior guidance of 8% to 12% EPS growth. We continue to expect earnings per share to increase at least 8%. Depending how the variables I mentioned play out, EPS could be as high as 12%. We also expect strong free cash flow this year of approximately $1 billion, which is one of the strongest yields in the industry. And we are creating value for our stakeholders with our balanced and disciplined allocation of this cash. You should expect an acceleration of share repurchases, continued delevering and an increasing dividend.

綜合考慮所有這些因素，我們維持先前對每股收益成長 8% 至 12% 的預期。我們繼續預期每股收益將成長至少8%。根據我提到的變數如何發揮作用，每股盈餘可能高達 12%。我們也預計今年的自由現金流將達到約 10 億美元，這是業內最高的收益率之一。我們透過均衡、規範地分配現金，為我們的利害關係人創造價值。您應該預期股票回購將會加速、去槓桿將會持續進行且股利將會增加。

In summary, on slide 18, we have a strong portfolio of specialty businesses. We will continue to drive organic growth, accelerate innovation and improve our product mix. We are committed to using every lever we have in this challenging environment and we will return our strong free cash flow to stockholders. I am confident that 2017 will be a strong year for Eastman with increasing earnings and record free cash flow.

總而言之，在第 18 張投影片上，我們擁有強大的專業業務組合。我們將繼續推動有機成長，加快創新並改善我們的產品組合。我們致力於在這個充滿挑戰的環境中利用我們所擁有的一切手段，並將強烈的自由現金流回饋給股東。我相信，2017 年對伊士曼來說將是強勁的一年，獲利將持續成長，自由現金流也將創歷史新高。

Most importantly, I believe that we are building one of the world's leading specialty companies to deliver long-term sustainable growth. Thanks for joining us this morning and I look forward to your questions.

最重要的是，我相信我們正在打造世界領先的專業公司之一，以實現長期永續成長。感謝您今天早上加入我們，我期待您的提問。

All right, thanks, Mark. We have a lot of people on the line this morning and we would like to get to as many questions as possible. So please limit yourself to one question and one follow-up. With that, Ebony, we are ready for questions.

好的，謝謝，馬克。今天早上有很多人在線，我們希望盡可能回答他們的問題。因此，請將自己限制在一個問題和一個後續問題上。好了，Ebony，我們已經準備好回答問題了。

(Operator Instructions). David Begleiter, Deutsche Bank.

（操作員指令）。大衛‧貝格萊特，德意志銀行。

Mark, you referenced the lag and catching up to the higher propane and propylene prices. Can you discuss the impact or how that flows through Q1 versus Q2? I assume Q1 might be a little bit weaker, but you should catch up in Q2 and Q3.

馬克，您提到了滯後以及追趕丙烷和丙烯價格上漲的問題。您能討論一下其影響或它對 Q1 和 Q2 的影響嗎？我認為 Q1 可能會稍微弱一些，但你應該在 Q2 和 Q3 趕上。

David, I think you sort of summarized it well. With the Chemical Intermediates business, we are already seeing prices go up now as we keep track with the way raw material prices are moving in the marketplace. But when you think about the specialties, whether it is Advanced Materials or as in Additives and Functional Products, there is always a bit of lag in how your prices adjust. And it is usually a 3 to 6 month lag from when raws move to when you see prices go up. We are moving aggressively on how we try and do that. But a lot of places, the specialty businesses have quarterly prices. So we feel good about our ability to get the prices up; it just takes a little time. It is the same on the downside. We benefit a lot when raws came up for the same reason.

大衛，我認為你總結得很好。對於化學中間體業務，隨著我們追蹤原物料價格在市場上的走勢，我們已經看到價格上漲。但當你考慮專業領域時，無論是先進材料或添加劑和功能產品，價格調整總是會有些延遲。從原材料的流動到價格的上漲通常需要 3 到 6 個月的時間。我們正在積極嘗試實現這一目標。但很多地方，專賣店都有季度價格。因此，我們對自己提高價格的能力感到很滿意；只是需要一點時間。不利的一面也是一樣的。由於同樣的原因，當 raws 出現時，我們受益匪淺。

And, Mark, just on the free cash, ex the dividends you need to pay, should most of that cash go to share buybacks?

馬克，僅就免費現金而言，扣除需要支付的股息，大部分現金是否應該用於股票回購？

All of the cash will not go to share buybacks. We are extremely happy to set a record in free cash flow this year and looking forward to that number. But you have got to remember that a portion of it goes to dividends, which will be about $300 million. And then you have got the remainder being split between share repurchases and delevering.

所有現金不會用於股票回購。我們非常高興今年的自由現金流創下了紀錄，並期待著這個數字。但你必須記住，其中一部分將用於分紅，約 3 億美元。然後將剩餘部分分配給股票回購和去槓桿。

And how much share repurchases do you think you will do in 2017?

您認為 2017 年將進行多少股票回購？

David, this is Curt. What Mark is saying is about half of that remaining $700 million roughly free cash flow will be split between share repurchases and deleveraging.

大衛，這是 Curt。馬克的意思是，剩餘的 7 億美元自由現金流中約有一半將用於股票回購和去槓桿。

Thank you very much.

非常感謝。

Kevin McCarthy, Vertical Research Partners.

凱文·麥卡錫（Kevin McCarthy），Vertical Research Partners。

With regard to Advanced Materials, Mark, would you comment on your expected margin trajectory 2017 versus 2016? Would you expect that to be flat, up or down?

關於先進材料，馬克，您能評論一下 2017 年與 2016 年相比的預期利潤率走勢嗎？您預計它會持平、上升還是下降？

We think that the Advanced Materials margins will be relatively flat. I mean Advanced Materials has had a phenomenal run. They have had four years of compounded growth of 20% all driven by volume and mix and fixed cost leverage; very little of it has been raw material tailwinds. And so it has been just a great story.

我們認為先進材料的利潤率將相對穩定。我的意思是先進材料已經取得了驚人的成績。他們已經連續四年實現了 20% 的複合成長率，這全部是由產量、產品組合和固定成本槓桿推動的；其中原材料的順風作用很小。所以這是一個偉大的故事。

As you look at 2017, we continue to expect very strong volume and mix growth. We have got so many great things happening on the innovation front there. We expect another year of double-digit growth in Tritan and Saflex acoustics and interlayer products, as well as head-up display and performance films. So growing a lot faster in those key products than high margins improving mix.

展望2017年，我們預期銷售量和產品組合仍將維持強勁成長。我們在創新方面已經取得了許多偉大的成就。我們預計 Tritan 和 Saflex 聲學和夾層產品以及平視顯示器和性能膜明年將實現兩位數成長。因此，這些關鍵產品的成長速度比高利潤率產品組合的成長速度要快得多。

But at the same time, as I just said to David's question, you do have raw materials moving up and there is a little bit of lag and our prices catch up to raws just like it would happen as in Additives and Functional Products. You have also got currency as a headwind and some startup costs around our two growth investments in PVB and Tritan, which are going to be great to support our growth long term.

但同時，正如我剛才回答大衛的問題時所說的那樣，原材料的價格確實在上漲，並且存在一些滯後，我們的價格會趕上原材料的價格，就像添加劑和功能產品一樣。您還面臨著貨幣方面的阻力，以及我們在 PVB 和 Tritan 兩項成長投資方面的一些啟動成本，這些投資將對我們的長期成長起到很大的支持作用。

So when you net it all together, it moderates the rate of earnings growth we will expect this year from the prior years, but still a solid year of earnings growth and the way that margin sort of works out with all those moving parts is margins stay about flat.

因此，當你把所有這些因素綜合起來看，它會減緩我們預期今年盈利增長率相對於前幾年的水平，但仍然是盈利增長穩健的一年，而且利潤率在所有這些變動因素的影響下，利潤率基本上保持不變。

Okay. And then a follow-up for Curt, if I may, on pension. It looks like you injected $150 million in the quarter making $200 million for 2016. What is your expectation for pension contributions in 2017, please?

好的。如果可以的話，接下來請跟進 Curt 的退休金問題。看起來您在本季注入了 1.5 億美元，2016 年則達到了 2 億美元。請問您對2017年退休金繳費有什麼預期？

That would be -- that $150 million was accelerating contributions we might have made in 2017 and 2018, maybe a little into 2019. So we will not be making any pension contributions in the US in 2017.

也就是說，這 1.5 億美元是我們在 2017 年和 2018 年可能做出的加速貢獻，也許會持續到 2019 年。因此，2017 年我們不會在美國繳納任何退休金。

Excellent, thank you.

非常好，謝謝。

John Roberts, UBS.

瑞銀集團的約翰羅伯茲。

There is another ethylene asset being sold. Do you think we will have to wait for that to be agreed to as a deal before we can get a deal for your Longview operations?

還有另一項乙烯資產正在出售。您是否認為我們必須等待雙方達成協議才能就您的 Longview 業務達成協議？

Well, first of all, John, I think it has some impact on our process, but we continue to have a number of parties actively engaged in our process and maybe just to recap that. We are continuing to work a variety of options from outright sale, partnership and commercial options. Each negotiation has its own scope, structure and timeline. I don't think that's -- as I think about those negotiations, I don't think they are dramatically impacted by what is going on with the competing asset, but we will see. But it is just not your typical divestitures process. So we are going to continue to be a patient seller, we will see how these things play out in the marketplace as we try to create some value with this transaction. So it is just going to take some time.

嗯，首先，約翰，我認為這對我們的進程有一些影響，但我們仍然有許多方面積極參與我們的進程，也許只是重述這一點。我們正在繼續研究各種選擇，包括直接銷售、合作和商業選擇。每場談判都有其自身的範圍、結構和時間表。我不認為那是——當我考慮這些談判時，我認為它們不會受到競爭資產的顯著影響，但我們會看到。但這並不是典型的資產剝離過程。因此，我們將繼續做一個有耐心的賣家，我們將觀察這些事情在市場上如何發揮作用，並嘗試透過這筆交易創造一些價值。所以這只是需要一些時間。

And then in cigarette filter tow, you are going to have a new owner of a competitor. Do you consider that good, bad or neutral to the competitive dynamics?

然後在香菸過濾嘴拖曳中，你將會有一個競爭對手的新主人。您認為這對競爭動態來說是好事、壞事還是無害？

Blackstone is a company who has owned the tow business before and understands the industry and I think has been a very rational player back in their history where they saw the value of rationalizing high-cost assets to be better positioned to serve their customers. So I think that as a new owner in this industry, I would expect that is a good thing and more continued rational behavior. I assume they are going to have a decent amount of debt on that deal and be very focused on cash flow generation, which is I think sensible.

黑石集團之前就擁有拖車業務，並且了解這個產業。我認為，黑石集團在歷史上一直是個非常理性的參與者，他們看到了合理化高成本資產的價值，以便更好地為客戶服務。因此，我認為，作為這個行業的新主人，我認為這是一件好事，並且會更加持續理性的行為。我認為他們將在這筆交易中承擔相當多的債務，並且非常注重現金流的產生，我認為這是明智的。

Thank you.

謝謝。

James Sheehan, SunTrust Robinson Humphrey.

詹姆斯希恩 (James Sheehan)，SunTrust Robinson Humphrey。

Could you elaborate further on what you are seeing in China in terms of filter tow demand being a little weaker than you expected? What are the dynamics there?

您能否進一步詳細說明您看到中國過濾絲束需求比您預期的要弱的情況？那裡的動態是怎麼樣的呢？

Sure. Before I get to that, I just want to be clear and emphasize something Curt said. Nothing has changed outside of China. So we have held our marketshare and expect volume to be flat. Prices will come off as we defend our marketshare. So I think that has played out. The incremental 5% change in our guidance is really about demand in China. And it really is still more of a destocking story more than anything else that we can sort out at this stage.

當然。在談到這一點之前，我只想澄清並強調一下 Curt 所說的話。中國以外一切都沒有改變。因此，我們保持了我們的市場份額，並且預計銷量將保持穩定。當我們捍衛自己的市佔率時，價格將會下降。所以我認為這已經發生了。我們指引中增量 5% 的變化其實是關於中國的需求。目前我們能解決的其實更多的是去庫存問題。

The Chinese National Tobacco Company is extremely focused on destocking at all levels, whether it is retail, wholesale or tow and are continuing to do that. They intend to hold production rates basically flat to last year of cigarettes, but want to continue pulling down some tow inventory from what we can tell and that gets us to that potential 5% down. I would be clear that that is not yet finalized. And so we will have to wait and see how those contract negotiations complete, but seems about the right direction.

中國菸草總公司高度重視各個層面的去庫存工作，無論是零售、批發或拖車，並且正在繼續這樣做。他們打算將生產率基本上保持在與去年的香菸水平持平，但希望繼續減少一些庫存，據我們所知，這將使我們達到潛在的 5% 的下降幅度。我可以明確地說，這還沒有最終確定。因此，我們將不得不拭目以待，看看這些合約談判如何完成，但這似乎是正確的方向。

I would note there is a couple other things around this business. One is, for the first time, CNTC has actually published data about the retail inventory level and suggests that it has declined 30% from where they were a few years ago, which is actually quite good news assuming the data is accurate because if you think about cigarette production has only declined about 5% in that same timeframe, it would suggest that retail demand out there is still healthy, sort of further reinforcing the destocking theory about what is going on in China.

我想指出的是，這項業務還涉及其他一些事情。一是，中國菸草總公司首次公佈了零售庫存水準的數據，並表示庫存水準較幾年前下降了 30%。如果數據準確，這實際上是個好消息，因為考慮到在同一時間段內，香菸產量僅下降了 5% 左右，這表明零售需求仍然健康，這進一步證實了有關中國正在發生的去庫存理論。

Looking forward though, as we look at all this, we are doing everything we can to stabilize this business. So we are now in a position where we have got about two-thirds of our tow demand in long-term agreements for both supply, as well as price. We are obviously taking out a lot of costs across the Company, over $100 million of cost reduction to the bottom line to offset this headwind and others. And we are hopeful that the industry will continue to rationalize high-cost assets. There is a number of them out there. It is really for our competitors to decide what to do because we are down to our largest integrated position with the best cost position in flake and the tow capacity that matches with it.

然而，展望未來，當我們審視這一切時，我們正在盡一切努力來穩定這項業務。因此，我們現在的狀況是，大約三分之二的拖車需求已經透過長期供應和價格協議來滿足。我們顯然正在削減全公司的大量成本，削減成本超過 1 億美元，以抵消這一不利因素和其他因素。我們希望該行業將繼續合理化高成本資產。那裡有很多這樣的人。這實際上由我們的競爭對手來決定要做什麼，因為我們擁有最大的綜合地位、最佳的薄片成本地位以及與之匹配的牽引能力。

And we are also not waiting around for demand to get better. We have some great innovation efforts going on in this business around leveraging these assets into new market applications outside of cigarettes and making tremendous progress and I am hoping I will be able to tell you about some of those successes this year as we are getting pretty close. So a lot of things we are doing to sort of stabilize the business, grow in other directions to improve asset utilization, but it still looks like there is some destocking to be done and we will work our way through it.

我們也不會坐等需求好轉。我們在這個業務上進行了一些偉大的創新努力，圍繞著將這些資產利用到香菸以外的新市場應用，並取得了巨大的進展，我希望能夠在今年告訴你們一些成功，因為我們已經非常接近成功了。因此，我們正在做很多事情來穩定業務，並向其他方向發展以提高資產利用率，但看起來仍有一些去庫存的工作要做，我們會努力完成它。

Terrific. And following up on the question before on the Longview cracker. Are you still focusing on the first half of 2017 of having sort of a permanent arrangement settled for that? And also, could you update us on the pipeline dispute please?

了不起。並繼續之前關於 Longview 餅乾的問題。您是否仍將重點放在 2017 年上半年是否能達成某種永久性的安排？另外，您能否向我們通報管道糾紛的最新情況？

Sure. I will do that in reverse order. On the pipeline dispute, we continue to win on all fronts, including a favorable ruling we have had on the tariff dispute as well. So the bottom line, the pipeline dispute really doesn't concern me and is no longer a rate-limiting factor around our efforts to sell this (inaudible) commodity derivatives.

當然。我將按照相反的順序進行操作。在管道爭端方面，我們繼續在各個方面取得勝利，包括在關稅爭端方面也取得了有利的裁決。因此，底線是，管道糾紛實際上與我無關，並且不再是我們出售這種（聽不清楚）商品衍生品的限制因素。

From the timeline, yes, we are still trying to target something by midyear, but, as I mentioned, these are all unique negotiations going on. Some could be longer or shorter and we will just see how these play out over the next several months.

從時間表來看，是的，我們仍在努力在年中之前實現某個目標，但正如我所提到的，這些都是正在進行的獨特談判。有些可能會更長或更短，我們將拭目以待未來幾個月的情況如何。

Thank you.

謝謝。

(Operator Instructions) Robert Koort, Goldman Sachs.

（操作員指示）高盛的羅伯特·庫爾特 (Robert Koort)。

Good morning, this is Ryan Berney on for Bob. The Additives and Functional Products volumes ticked up decently this quarter and it looked like it was your best quarter of the year. So I was hoping you could maybe give a little color around the underlying components there, around the businesses and individual volume numbers and then maybe how has it trended so far in the first quarter.

早安，我是瑞安伯尼 (Ryan Berney)，為鮑伯 (Bob) 播報。本季添加劑和功能性產品的銷售量大幅上升，看起來這是今年最好的季度。所以我希望您能稍微介紹一下那裡的基本組成部分、企業和個人交易量數字，然後也許介紹一下第一季迄今為止的趨勢。

Sure. We are quite excited about seeing the improvement in volumes and it really was across many fronts in the fourth quarter. So we saw strength in coatings, we saw strength in adhesives, in care chemicals. We even had some destocking go on in tires, so the growth rate was even better in those other segments when you factor that in. And that destocking seems to have cleared. So as we look at that momentum going into the first quarter in the year, we continue to expect strong growth. We see very solid orders, actually strong orders in January. And we think that the underlying markets, whenever you think about the key markets we are leveraged to -- transportation, building construction, and consumables, care chemicals within that -- there is a lot of great trends going on, a lot of optimism on the consumer side and you are seeing it from a number of companies where demand is holding up quite well there. So we expect good underlying market growth as we go into this year.

當然。我們非常高興看到銷量的成長，而且第四季度銷量確實在許多方面都有所增長。因此，我們看到了塗料、黏合劑和護理化學品的優勢。我們甚至還對輪胎進行了去庫存處理，因此如果將這一點考慮進去，其他領域的成長率甚至會更好。而去庫存現像似乎已經結束。因此，當我們回顧今年第一季的勢頭時，我們仍然預計會出現強勁增長。我們看到訂單非常穩定，實際上一月份的訂單非常強勁。我們認為，只要您考慮一下我們所利用的關鍵市場——運輸、建築施工、消耗品、護理化學品——就會發現基礎市場中存在許多良好的趨勢，消費者方面也充滿樂觀情緒，您可以從許多公司看到這些公司的需求保持得相當好。因此，我們預計今年基礎市場將實現良好成長。

On top of that, we are creating our own growth. We have some great innovation happening across AFP and getting traction. We already have double-digit growth happening in tire resins and that will continue. We have other new innovation projects starting to gain traction and we will put some volume points on the board this year in our Tetrashield polyester coatings and our new Aerafin polymers for adhesives. So you have got a number of places where innovation is going to drive more growth like we do in Advanced Materials on top of the market.

除此之外，我們還在創造自己的成長。我們在 AFP 上進行了一些偉大的創新並獲得了關注。我們的輪胎樹脂銷量已實現兩位數成長，並且這一趨勢還將持續。我們還有其他新的創新項目開始獲得關注，今年我們將在 Tetrashield 聚酯塗料和用於黏合劑的新型 Aerafin 聚合物方面取得一些銷量上的突破。因此，在許多領域，創新都會推動更多成長，就像我們在先進材料領域所做的那樣。

And in addition to that, we have got specialty fluids having some very large solar fills. They have done some great jobs in doing some of the big projects and those fills are going to happen this year. So we feel really good about growth on the volume side in AFP this year.

除此之外，我們還擁有一些具有非常大太陽能填充量的特殊液體。他們在一些大型項目中表現出色，這些項目將在今年完成。因此，我們對今年 AFP 銷量的成長感到非常滿意。

Great, thank you. And then I also want to follow up on a comment you made a little earlier in the call around $20 million in costs between the Additives & Functional Products and Chemical Intermediates business. Just I wasn't sure if I heard it right, so I wanted to get a little more clarity on what exactly that was.

太好了，謝謝。然後，我還想跟進一下您剛才在電話會議上提到的添加劑和功能產品與化學中間體業務之間的 2000 萬美元成本問題。我只是不確定我是否聽對了，所以我想更清楚地了解那到底是什麼。

So if you just think about looking at 2016, if that exact cost structure we experienced in 2016 had been reflected in the 2015 recast, there would have been $20 million more costs than 2015 in AFP, and thus lowering their 660 to 640 and the offsetting would have been in Chemical Intermediates. So it is just a way to think about the year-over-year comp between the two years.

因此，如果您只考慮 2016 年，如果我們在 2016 年經歷的確切成本結構反映在 2015 年的重鑄中，那麼 AFP 的成本將比 2015 年高出 2000 萬美元，從而將其 660 降低到 640，而抵消部分將來自化學中間體。因此，這只是思考兩年間同比變化的一種方式。

Understood. Thank you very much.

明白了。非常感謝。

Frank Mitsch, Wells Fargo Securities.

弗蘭克米奇，富國銀行證券。

One of your Board member's companies is noted for saying that their EPS growth forecasts are, quote, commitments, not aspirations. And I guess I was a little surprised pleasantly to see that you are reiterating your 8% to 12% growth, especially as you talk about a challenging business climate out there. So I was just curious what sort of GDP expectations do you have? What are your expectations regionally in terms of growth and how confident are you in that 8% to 12%?

您的一位董事會成員的公司曾表示，他們的每股盈餘成長預測是承諾，而不是願望。當我看到你們重申 8% 至 12% 的成長目標時，我感到有點驚喜，尤其是當你們談到外面充滿挑戰的商業環境時。所以我只是好奇你對 GDP 有什麼樣的期待？您對該地區的成長有何預期？您對 8% 至 12% 的成長有多大信心？

Thanks, Frank, for the question. And obviously, a very important one. We feel great about everything we are doing that is in our control. So we are delivering and holding onto our core growth in our end markets and those end markets look like they are pretty good. We are delivering a lot of innovation. It is really starting to happen all over the place in Advanced Materials, AFP and even some in Fibers that gives you some additional growth, as well as more importantly the mix upgrade because a lot of times we are shifting an asset from a standard product like a core copolyester to a Tritan, or a standard interlayer to a head-up display interlayer, getting more capital efficiency and earnings lift off the same asset. So all that is going well; the cost management is in there aggressively reducing costs, the hedge is rolling off, as I said. So a lot of those things that give you the tailwinds.

謝謝弗蘭克提出這個問題。顯然，這是非常重要的。我們對自己掌控的所做的一切感到很滿意。因此，我們正在實現並維持終端市場的核心成長，而這些終端市場看起來相當不錯。我們正在進行大量創新。這種現象確實開始在先進材料、AFP 甚至纖維領域廣泛出現，它能帶來額外的增長，更重要的是，能帶來產品組合的升級，因為很多時候，我們會將資產從標準產品（如核心共聚酯）轉移到 Tritan，或將標準夾層轉移到平視顯示器夾層，從而提高同一資產的資本效率和收益。所以一切進展順利；正如我所說，成本管理正在積極降低成本，對沖正在減少。很多事情都會帶給你順風。

As we look at the current market conditions, which I will explain in a moment, that gets us being closer to 8% in the range. And what we are assuming there, Frank, is that the underlying economy around the world is growing similar to last year, maybe slightly better. So solid US growth, Europe is recovering, Asia growing better than the rest of the world, but still not a great rate. In markets, also solid growth, nothing too exciting. So that is sort of what gets into that closer to (inaudible) of the world.

當我們觀察當前的市場狀況時（我稍後會解釋），我們的範圍已經更接近 8%。弗蘭克，我們假設全球經濟的基本成長與去年相似，甚至可能略有改善。因此，美國經濟成長穩健，歐洲正在復甦，亞洲的成長速度優於世界其他地區，但速度仍然不是很快。在市場方面，也實現了穩健成長，但並沒有什麼太令人興奮的事情。這就是更接近（聽不清楚）世界的東西。

Obviously, there is a lot of optimism about the economy getting better. A number of companies talking about that. And if that plays out, that is going to be upside for us. And that also translates to the second assumption, which is we are assuming sort of a normal pace of getting prices up in specialties relative to how the raws moved. If the economy strengthens, if we can be more successful in pushing those raws through, obviously, that would create some upside relative to sort of where -- the sort of 8% number.

顯然，人們對經濟好轉抱持著很高的樂觀態度。許多公司都在談論此事。如果這項計劃得以實施，那麼對我們來說將是一個好消息。這也轉化為第二個假設，即我們假設特種產品的價格上漲速度相對於原料的變動速度而言是正常的。如果經濟走強，如果我們能夠更成功地推動這些改革，顯然這將創造一些相對於 8% 左右的數字的上升空間。

When you think about energy costs, we are using the forward curve on natural gas. Natural gas prices are likely to turn out to be lower than that. That would be some upside. Taxes, another place where right now with the guidance that Curt gave you, we have got about a 200 basis points headwind in tax and we have a number of projects we are working hard right now to try and improve that tax rate.

當您考慮能源成本時，我們使用的是天然氣的遠期曲線。天然氣價格最終可能會低於這個水準。這將會有一些好處。稅收，另一個方面，根據 Curt 給您的指導，目前我們的稅收面臨約 200 個基點的阻力，我們目前正在努力開展一些項目，試圖提高稅率。

So there is a number of different things and we all know that olefins can go in any direction, better or worse; that is just an uncertainty. So I think that as you look at it, we are driving hard, we like the range that we have. With the world as we see it today, we are closer to 8, but there is clearly a lot of places to have upside.

因此有許多不同的事情，我們都知道烯烴可以朝任何方向發展，無論是好是壞；這只是一個不確定性。所以我認為，正如你所看到的，我們正在努力，我們喜歡我們擁有的範圍。從我們今天所看到的世界來看，我們已經接近 8 個，但顯然還有很多地方可以發揮優勢。

That is very helpful; I appreciate it. And you did mention that you are counting on getting pricing up in the specialty side. You outlined the positive trends on -- in AFP in terms of volumes. How is that trending so far in terms of getting pricing in A&FP?

這非常有幫助；我很感激。您確實提到過，您希望提高專業領域的定價。您概述了法新社在數量上的正面趨勢。就 A&FP 定價而言，目前的趨勢如何？

So I think that the AFP side is one that has had some good trend. So we obviously had prices come off in the first half of last year as we talked about as we shared some of the raw material benefit that we held onto in 2015. And you can see that on the 2014 to 2015 to 2016 chart that some of that margin expansion was shared, but not all. The good news is prices stabilized from the second quarter through the back half of the year and that was important.

因此我認為法新社方面呈現出了一些良好的趨勢。因此，正如我們在分享 2015 年保留的一些原材料收益時所討論的那樣，去年上半年我們的價格顯然已經下降。您可以在 2014 年到 2015 年再到 2016 年的圖表上看到，部分利潤擴張被分享，但不是全部。好消息是價格從第二季到下半年趨於穩定，這一點很重要。

As we move into the first quarter, we have a few places where we can get prices up, but a lot of it is going to lag as the raw materials and so as I mentioned to Dave earlier, we will see that more in the second and third quarter as prices come up. But these are great products and for the vast majority of what we have in AFP, I think, we will be able to recover those raws. There are a few places where we don't have pricing power like adhesives where it has been incredibly tight moving to more of a balanced situation and there is a little bit of Crystex prices coming off. But, overall, we feel good about it.

隨著我們進入第一季度，我們有幾個地方可以提高價格，但很多地方將會因為原材料而滯後，所以正如我之前向戴夫提到的那樣，隨著價格上漲，我們將在第二季度和第三季度看到更多這種情況。但這些都是很棒的產品，對於我們在 AFP 擁有的絕大多數產品，我認為，我們將能夠回收這些原料。在某些領域我們沒有定價權，例如黏合劑，那裡的定價一直非常緊張，正在轉向更加平衡的局面，Crystex 的價格也有所下降。但總體而言，我們對此感覺良好。

All right, great. Thank you.

好的，太好了。謝謝。

Duffy Fischer, Barclays.

巴克萊銀行的達菲·菲舍爾。

Hey, guys. This is Mike Leithead on for Duffy. Just real quick on the currency. Currency and commodities have moved kind of quite a bit in the past three, six months. Should we still expect propane and FX hedges rolling off to be a net $0.30 benefit next year?

嘿，大家好。這是麥克萊特黑德 (Mike Leithead) 代替達菲 (Duffy) 上場。對貨幣來說真的很快。過去三到六個月裡，貨幣和商品的價格波動很大。我們是否仍應預期明年丙烷和外匯對沖將帶來 0.30 美元的淨收益？

Well, sure. So, first of all, let me just remind you. Overall, we are assuming olefin spreads are the same as last year. However, we are using the forward curve on oil and natural gas, so the absolute feedstocks are higher than last year as you can see in the marketplace today.

嗯，當然。因此，首先，讓我提醒你。整體而言，我們假設烯烴價差與去年相同。然而，我們使用的是石油和天然氣的遠期曲線，因此正如您在今天的市場上看到的那樣，絕對原料價格高於去年。

So given this assumption, the net benefit or let's call it tailwind from the reduced commodity hedge cost has actually increased over $0.50 a share versus kind of the previous $0.40 a share on a pure year-over-year basis. The offsetting impact has still been the currency hedges that are rolling off, which is still probably now just over $0.10 a share. So it is now kind of roughly a $0.40 share net benefit of the hedges rolling off versus our previous outlook. But, again, this is offset by the prices catching up to raw materials that Mark talked about. Even in Chemical Intermediates, there can be a lag in pricing.

因此，基於這一假設，商品對沖成本降低帶來的淨收益或順風實際上已增加超過每股 0.50 美元，而之前的每股收益為 0.40 美元，同比來看則有所增加。抵銷影響的仍然是正在減少的貨幣對沖，目前可能仍為每股 0.10 美元多一點。因此，與我們先前的預測相比，現在對沖的淨收益約為 0.40 美元。但是，這又被馬克所說的原物料價格上漲所抵銷了。即使在化學中間體中，定價也可能存在滯後。

We're also assuming higher energy costs and that is not as easily recovered in prices and again, there is the impact of the stronger dollar on the unhedged earnings. And since I am talking about the hedge, I also want to make sure -- it is a good chance to remind everyone that 80% of the benefit of the feedstock hedges rolling off go to Chemical Intermediates, the remainder will go to AFP and Advanced Materials. But then almost all the currency headwinds that I mentioned are going to be impacting the Advanced Materials and Additives & Functional Product lines.

我們也假設能源成本會更高，而且價格不會輕易收回，美元走強也會對未對沖的收益產生影響。既然我在談論對沖，我也想確保——這是一個很好的機會來提醒大家，原料對沖的 80% 收益流向化學中間體，其餘的將流向 AFP 和先進材料。但我提到的幾乎所有貨幣逆風都將影響先進材料和添加劑及功能產品線。

Just to pile on, something else I want to say is that we are officially out of the olefin forecasting business. I don't think anyone has been right in calling it, especially at the quarterly level, about what is happening here. So we are going to just continue to give you our assumptions that we've made. Obviously, everyone has got their own opinion of where it is going to go no matter where you look.

補充一點，我想說的是，我們正式退出烯烴預測業務。我認為沒有人能夠正確地描述這裡發生的事情，特別是在季度層面。因此，我們將繼續向您提供我們所做的假設。顯然，無論你從哪裡看，每個人對它的未來走向都有自己的看法。

And for us, I think we are fortunately headed to a story where this becomes less and less relevant. We have got the transformation where 70% of our earnings are going to the specialty, so hopefully this is going to be less of a topic for us.

對我們來說，我認為我們很幸運地正走向一個越來越不相關的故事。我們已經實現了轉型，將 70% 的收益投入專業領域，因此希望這對我們來說不再是一個問題。

Got it. And then, Mark, the tow industry has been quite volatile the past few years. Do you think with the new industry contract structures and the new asset owner in the space, the industry is now structurally set up better to handle further volatility down the line than say maybe it was 12, 24 months ago?

知道了。馬克，過去幾年拖車業一直非常不穩定。您是否認為，隨著新的行業合約結構和新資產所有者的出現，該行業現在的結構是否比 12 或 24 個月前更能應對未來的波動？

Yes, I do. I think that we are highly committed as a key player in the industry to do everything we can to try and drive stability and provide disciplined behavior and we are going to continue doing that. And I do think the long-term contracts help. Obviously, if someone starts rationalizing higher cost assets, it improves their ability to serve their customers, that would help. And I have every expectation that Blackstone will be a rational behavior in the marketplace. So I think all these things help.

是的，我願意。我認為，作為行業的關鍵參與者，我們高度致力於盡一切努力來推動穩定並提供紀律嚴明的行為，我們將繼續這樣做。我確實認為長期合約有幫助。顯然，如果有人開始合理化高成本資產，從而提高他們服務客戶的能力，那將會有所幫助。我完全相信黑石集團將在市場上採取理性的行為。所以我認為所有這些都有幫助。

Thanks. Appreciate the color.

謝謝。欣賞色彩。

Mike Sison, KeyBanc Capital.

KeyBanc Capital 的 Mike Sison。

Mark, when you think about your bridge for 2017, just curious how much of that growth you think will come from your specialty businesses, AM and AFP? Or maybe another way to look at it is just does the earnings growth of those two businesses kind of mirror the EPS growth potential that you see?

馬克，當您考慮 2017 年的橋樑時，只是好奇您認為其中有多少增長將來自您的專業業務 AM 和 AFP？或者也許換個角度來看，這兩家企業的獲利成長是否反映了您所看到的每股盈餘成長潛力？

Well, I think about EPS growth, you have got to remember there are other lines of the income statement as you flow from operating earnings to the bottom right. So we have got things that we are going to do on improving interest costs and the actions we took. We have things that we are doing to improve share count to keep in mind. But I do think what we are going to see is very solid earnings growth in the two specialty segments and pretty strong recovery in Chemical Intermediates, so a bigger percentage increase there as the majority of those hedges rolling off flow into that segment. But, overall, it is going to be a great story of the three segments delivering important and valuable earnings growth and a lot of cash flow obviously offsetting the headwinds we have in Fibers.

好吧，我考慮每股收益成長，你必須記住，當你從營業收益流向右下角時，損益表還有其他行。因此，我們已經制定了改善利息成本的措施和行動。我們正在做一些事情來提高分享數量，請記住這一點。但我確實認為，我們將看到兩個專業領域的盈利非常穩健的增長，以及化學中間體的強勁復甦，因此，隨著大部分對沖流入該領域，該領域的百分比增幅將更大。但總體而言，這將是一個偉大的故事，三個部門將實現重要且有價值的獲利成長，大量的現金流顯然抵消了我們在纖維方面遇到的阻力。

Great. And then as a quick follow-up, I know the focus initially stock buyback and debt reduction, but I think you have done a good job of adding high-quality business to your portfolio. Any thoughts on acquisitions and continuing to find specialty assets to add to Eastman?

偉大的。然後作為一個快速的後續問題，我知道最初的重點是股票回購和債務削減，但我認為您在將高品質業務添加到您的投資組合方面做得很好。對於收購以及繼續尋找專業資產來補充伊士曼，您有何想法？

Look, I think we have had a very impressive track record of doing excellent M&A that has created a lot of value for our shareholders. I am very proud of all of the acquisitions we did from Solutia, Taminco, to Commonwealth, to the BP aviation turbine business, which has been powerful and tremendous in improving the quality of our earnings, the robustness to sort of withstand some of the headwinds we have seen in the last couple of years.

看，我認為我們在出色的併購方面有著非常令人印象深刻的記錄，為我們的股東創造了巨大的價值。我對我們所做的所有收購感到非常自豪，從 Solutia、Taminco 到 Commonwealth，再到 BP 航空渦輪機業務，這些收購在提高我們的盈利質量和抵禦過去幾年遇到的一些逆風方面發揮了巨大作用。

And equally important, by the way, generating a lot of free cash flow. I mean those businesses are just fantastic. And we didn't overpay for them, which is something I am quite proud of. Paying 9 times EBITDA with 7 or less after synergies is a lot better than the way the transaction multiples are playing out these days.

順便說一句，同樣重要的是產生大量的自由現金流。我的意思是這些企業真是太棒了。而且我們並沒有為他們支付過高的費用，這是我非常自豪的事情。支付 9 倍 EBITDA，協同效應後為 7 倍或更少，這比現在交易倍數的表現要好得多。

So as I have said in the past, we have no intention of doing any large M&A at this stage. The multiples being paid right now are way outside the range that I think provide an attractive return on capital to our shareholders. We are always interested and open to bolt-on M&A that has a very tight strategic fit to a business we are already in. We will always be looking for those opportunities. I will tell you right now, I don't have anything in the pipeline that has any near-term possibilities. So what we are focused on doing right now is what we have been doing, drive growth, organic improvements, get all these innovation programs delivering results, take the costs out where we can and deliver earnings and cash flow growth and return that free cash flow to shareholders in an increasing dividend and share repurchases.

因此，正如我過去所說的那樣，我們現階段無意進行任何大規模併購。我認為，目前支付的倍數遠遠超出了為我們的股東提供有吸引力的資本回報的範圍。我們始終對與我們現有業務具有緊密策略契合度的附加併購感興趣並持開放態度。我們將一直尋找這些機會。我現在就告訴你，我目前還沒有任何短期內可能實現的計畫。因此，我們現在專注於做的事情就是我們一直在做的事情，推動成長、有機改進、使所有這些創新計劃取得成果、盡可能地降低成本、實現收益和現金流增長，並透過增加股息和股票回購將自由現金流返還給股東。

That is our focus, I would really say, for this year. If a great bolt-on M&A comes along that we haven't thought of, we are always going to be smart and thoughtful about it if it provides an attractive return.

我想說，這就是我們今年的重點。如果出現我們沒有想到的重大附加併購，並且它能夠帶來有吸引力的回報，我們總是會明智而深思熟慮地考慮它。

Great, thanks, Mark.

太好了，謝謝，馬克。

Laurence Alexander, Jefferies.

勞倫斯‧亞歷山大，傑富瑞集團。

Good morning. This is Dan Rizzo on for Laurence. You guys mentioned Tritan and Saflex as 10% growers. Is there any other products that kind of stand out as something that is reaching that level or has the potential to reach that level in the next year or two?

早安.丹·里佐 (Dan Rizzo) 代替勞倫斯。你們提到 Tritan 和 Saflex 的成長率為 10%。有沒有其他產品能夠脫穎而出，達到這一水平或有潛力在未來一兩年內達到這一水平？

Yes, so as I said, double-digit growth in Tritan, acoustics and head-up interlayers. Performance films is growing double digits in North America and China because we have new channel strategies that allow us to grow a lot more -- a lot faster than the OEM growth rate. Tire resins in AFP is growing at double-digit rates. The solar wins will be very high volume growth rate relative to last year. So a lot of different places where we are seeing volume growth.

是的，正如我所說，Tritan、聲學和平視夾層實現了兩位數成長。高性能薄膜在北美和中國的銷量呈現兩位數成長，因為我們有新的通路策略，這讓我們實現了更快的成長——比 OEM 的成長率快得多。法新社的輪胎樹脂正以兩位數的速度成長。與去年相比，太陽能的銷售成長率將非常高。我們在很多不同的地方都看到了銷售量的成長。

And then you have got the new products gaining traction in the marketplace. So they are sort of at zero, but now starting to add volume to this story like the Tetrashield polyester coatings had modest amount of volume with with our first customer last year that we told you about on the first-quarter call and that is now picking up momentum with several customers, so we are going to see more of that this year.

然後你就會讓新產品在市場上獲得關注。所以它們的數量有點為零，但現在開始增加，例如 Tetrashield 聚酯塗料的數量適中，去年我們的第一個客戶與我們在第一季電話會議上告訴過你，現在隨著幾個客戶的加入，這種勢頭正在增強，所以今年我們將看到更多這樣的情況。

The new Aerafin polymer that we are launching that is a better performing polymer in adhesives for hot melt adhesive applications, we expect value there. So we are starting to see growth all over. I mean what I love about this is it is an innovation story that's starting to pop up across a various set of end markets and on multiple technology platforms. That really sort of proves that we are creating the value that we intended that we are getting the returns on innovation investment and that we are making that transformation of being a true specialty company.

我們推出的新型 Aerafin 聚合物是一種在熱熔膠應用領域中性能較佳的聚合物，我們期待它能帶來價值。因此，我們開始看到各方面的成長。我喜歡這個是因為這是一個創新故事，它開始出現在各種終端市場和多個技術平台上。這確實證明我們正在創造我們預期的價值，我們正在獲得創新投資的回報，我們正在轉型成為一家真正的專業公司。

Then what percentage of your sales of your products are 10% growers or potentially 10% growers?

那麼，您銷售的產品中有多少比例是 10% 成長者或潛在 10% 成長者？

Yes, we don't actually disclose that data.

是的，我們實際上並沒有披露這些數據。

But I think what you will see is Mark talking about $200 million of new business closed and trying to accelerate that and that is going to be driven by those innovation programs that he has already mentioned.

但我認為你會看到馬克談論 2 億美元的新業務並試圖加速這一進程，而這將由他已經提到的那些創新計劃推動。

Yes, it goes back to that guidance we gave a while ago that says we can sort of grow the core with the underlying markets and then add sort of 1% to 2% revenue growth on top of that. And we just proved that in 2016 with the $200 million of new business closed and I think it will be a better number this year.

是的，這回到了我們之前給出的指導方針，即我們可以透過基礎市場來發展核心業務，然後在此基礎上增加 1% 到 2% 的收入成長。2016 年我們剛完成了價值 2 億美元的新業務，證明了這一點，我認為今年的數字會更好。

Okay. And then quickly, you said that -- you gave raw material and FX assumptions. But are you assuming FX stays where it is right now or are you assuming any appreciation going through the rest of the year or I'm just wondering what level we should think of.

好的。然後你很快地說——你給了原料和外匯假設。但是您是否假設外匯會保持在目前的水平，或者您是否假設在今年剩餘時間內會升值，或者我只是想知道我們應該考慮什麼水平。

Well, our assumption is currency for us particular the European exchange rate is where it is today.

嗯，我們的假設是，對我們來說，特別是歐洲的貨幣匯率處於今天的水平。

Thank you very much.

非常感謝。

P.J. Juvekar, Citi.

花旗銀行的 P.J. Juvekar。

In Additives & Functional Products, your operating margins were down 200 basis points in 4Q. Can you just talk about what happened to Crystex margin and is raw materials an issue for Crystex in 2017?

在添加劑和功能產品方面，你們第四季的營業利潤率下降了 200 個基點。您能談談 Crystex 利潤率發生了什麼變化嗎？原料是否是 Crystex 在 2017 年面臨的問題？

Well, let me speak to AFP as a whole. First of all, you think -- first, if you think about the differences in the cash flow that came up, AFP was down less than 5% from 2015, but AFP's price declines are in line with our expectations from the beginning of the year as we have already mentioned. They have also been stabilized. And as we look forward, we expect them to continue to be stable in coatings particularly where they are likely to increase with the increasing raw material environment.

好吧，讓我總體談談法新社。首先，您認為——首先，如果您考慮出現的現金流差異，AFP 的價格較 2015 年下降不到 5%，但 AFP 的價格下降符合我們年初的預期，正如我們已經提到的。他們的狀況也已經穩定下來。展望未來，我們預計它們在塗料中將繼續保持穩定，特別是隨著原料環境的增加，它們可能會增加。

So despite the price declines, AFP's operating margins have remained above 20% for the year. And more importantly, our decision to share raw material value with our customers has maintained a strong customer engagement and enabled us to make great progress on our innovation efforts. So we have now a more robust, and credible growth portfolio in AFP than any other time for all the things we have talked about. So across the portfolio is where I'd encourage you to look at that and I think you are going to see continued strong margins in AFP.

因此，儘管價格下跌，AFP 的營業利潤率全年仍維持在 20% 以上。更重要的是，我們決定與客戶分享原材料價值，這保持了強大的客戶參與度，並使我們在創新工作中取得了巨大進步。因此，就我們所討論的所有事項而言，我們現在在 AFP 中擁有比以往任何時候更加強勁、更加可信的成長組合。因此，我鼓勵您關注整個投資組合，我認為您將會看到 AFP 的利潤率持續強勁。

Yes, I would note that, as you look at 2017, we expect margins to be more similar to the full-year average margin for 2016. So I wouldn't read too much into the fourth-quarter number.

是的，我注意到，展望 2017 年，我們預期利潤率將與 2016 年全年平均利潤率更加相似。所以我不會對第四季的數據進行過多的解讀。

Okay, thank you. And then on tow, given that China continues to destock and demand continues to go down, do you think the industry needs to shut down capacity and do you have any plans for capacity or shutdown? Thank you.

好的，謝謝。然後談到拖車，鑑於中國繼續去庫存，需求持續下降，您認為該行業是否需要關閉產能？您有什麼產能或關閉計畫嗎？謝謝。

So, as I mentioned earlier, I think that the demand situation in China is certainly not as dramatic as the drop in tow imports. So we see a lot of evidence of substantial destocking going on at the retail level, at the wholesale level and at the tow level that really is the story about why imports have come down as well as don't forget that we added two significant tow plants between our joint venture with CNTC and Daicel's joint venture. So a huge amount of the imports was just them backward integrating. So you have to be very careful about interpreting what is going on in our volume story to a primary demand story. No question primary demand is not growing as fast as it used to in China and it may be that it has moderated by some of these changes on corruption and some other economically-driven issues around affordability for the average Chinese consumer. But this recent data about that 30% pulldown inventory, if it is accurate, would suggest primary demand is actually holding up reasonably well.

因此，正如我之前提到的，我認為中國的需求情況肯定不會像拖車進口量的下降那麼劇烈。因此，我們看到大量證據表明，零售、批發和拖車層面的庫存正在大幅減少，這才是進口量下降的真正原因，而且別忘了，我們在與中國煙草總公司的合資企業和大賽璐的合資企業之間增加了兩個重要的拖車工廠。因此，大量的進口只是他們的向後整合。因此，您必須非常小心地將我們的銷售故事解釋為主要需求故事。毫無疑問，中國初級產品需求的成長速度不如以前快，這可能是因為腐敗問題和其他一些經濟驅動的問題（與中國普通消費者的負擔能力有關）減緩了初級產品需求的成長速度。但如果最近有關 30% 下拉庫存的數據準確的話，則表明主要需求實際上保持得相當好。

To your second question, in total, there is no question that there is excess capacity in this industry. And there are a number of high-cost standalone assets that our competitors have and it is their decision, obviously, about what they are going to do with those assets. We are going to continue to defend our marketshare and our marketplace and they are going to have to decide what they want to do. But there are no additional assets for us to take out. We are down to one flake asset, which is the largest scale backward-integrated coal and the lowest cost in the world. We have some tow assets here in Korea that match that flake capacity and so there is absolutely no reason we would reduce our tow capacity relative to our flake capacity, especially as we have these new applications we are developing that can utilize some of those assets into other markets.

關於你的第二個問題，整體來說，毫無疑問這個產業有產能過剩。我們的競爭對手擁有大量高成本的獨立資產，顯然，他們要決定如何處理這些資產。我們將繼續捍衛我們的市場份額和市場，而他們將必須決定他們想要做什麼。但我們沒有額外的資產可以取出。我們只剩下一項片狀資產，這是全球規模最大、成本最低的後向一體化煤炭。我們在韓國擁有一些與薄片產能相符的拖帶資產，因此我們完全沒有理由減少相對於薄片產能的拖帶產能，特別是因為我們正在開發這些新應用，可以將其中一些資產利用到其他市場。

So we have done everything we can. We shut down our UK facility to take out tow capacity. We exited the flake joint venture we had with Primester. So we've actually taken actions in the last two years to improve our position. Now, we will just have to wait and see what other people do.

因此我們已經盡了一切努力。我們關閉了英國的工廠以減少拖車能力。我們退出了與 Primester 的薄片合資企業。因此，我們實際上在過去兩年裡採取了行動來改善我們的地位。現在，我們只需要等待，看看其他人會怎麼做。

Great. Thank you, Mark.

偉大的。謝謝你，馬克。

Vincent Andrews, Morgan Stanley.

摩根士丹利的文森安德魯斯。

Just want to try to get a better sense of a few of the dynamics that would be impacting the flow of earnings through the year. If I remember correctly from last year, the hedge -- the mechanism of the hedge is such that I guess there is a different effect of it in the first quarter versus later in the year, so I would like to review that.

只是想更了解一些會影響全年收益流的動態因素。如果我記得正確的話，去年的對沖——對沖機制是這樣的，我猜它在第一季和今年晚些時候的效果是不同的，所以我想回顧一下這一點。

Also, in terms of the cost savings, will those flow through evenly through the year? Likewise, the risk that you mentioned on tow from China, is that something that is on the come or will we know about that in the first quarter and let's just leave it there for now?

此外，就成本節省而言，這些節省是否會在全年均勻地流轉？同樣，您提到的來自中國的風險是即將發生的事嗎？還是我們會在第一季就知道，現在就先不談這個？

This is Curt, let me start. You are absolutely right on the hedges. Generally speaking, the impact of the hedges is actually felt in second, third and fourth quarters, a little bit more in the fourth. And they don't see a lot of impact on the first quarter just because the hedges reset and how inventory turns occur, so you've got that absolutely right.

我是 Curt，讓我開始吧。關於樹籬，您說得完全正確。一般來說，對沖的影響實際上在第二、第三和第四季就會顯現出來，在第四季會稍微大一點。而且他們沒有看到對第一季產生太大影響，因為對沖重置和庫存週轉方式發生，所以你的說法完全正確。

On costs, yes, generally speaking, it is going to flow even through the year. There are some things we are working on the indirect procurement side that will accelerate during the course of the year. But if you want to use it on average in the course of the year, you are probably not that far off.

就成本而言，是的，一般來說，它甚至會在全年流動。我們正在進行一些間接採購的工作，這些工作將在今年內加速。但如果你想在一年內平均使用它，那麼可能就差不多了。

Just on two other points, Vincent, one is we have already talked about price versus raws, so there is a little bit of catching up on prices relative to raws that will slow the rate of growth in the first quarter. And on tow, the buying patterns in tow are always a bit chunky as we have told you before. The first quarter last year was a little bit strong; this quarter might be a little bit lighter, so there might be a little bit of a difference there. But I wouldn't read anything into it.

文森特，關於另外兩點，一是我們已經討論了原材料的價格，因此，相對於原材料，價格有一點追趕，這將減緩第一季的成長率。至於拖車，正如我們之前告訴過您的那樣，拖車的購買模式總是有點笨重。去年第一季表現稍微強勁一些，而本季可能會稍微弱一些，所以可能會有一點不同。但我不會對此做任何解讀。

Okay. And then just as a follow-up, you have I think it was slide 4 that had a lot of innovation on it. So it sounds like you are making a lot of progression there. But I did notice that R&D for 2016 at least on the income statement it appears that it declined. Is that just sort of a transitory thing or is that part of the cost savings or are you just optimizing your spend?

好的。然後作為後續，我認為幻燈片 4 上有許多創新。聽起來你在那裡取得了很大的進步。但我確實注意到，至少在損益表上，2016 年的研發支出似乎有所下降。這只是暫時現象，還是成本節約的一部分，還是只是優化支出？

Vincent, great question. We have been making a tremendous amount of investment in our growth capabilities across the Company. But the first thing you do is always make sure you are getting the best return on cost for your investor. So we have been shifting the R&D dramatically from a lot of process technology efforts, if you think about where we were a number of years ago being a more diversified mentality, to very focused on innovation and market development. So our top 10 innovation programs within that R&D, we have actually doubled the R&D on those top 10 programs.

文森特，好問題。我們一直在對整個公司的成長能力進行大量投資。但您要做的第一件事始終是確保為投資者獲得最佳的成本回報。因此，如果您回想一下幾年前我們的心態更加多元化，那麼我們已經將研發重點從大量的工藝技術轉移到了非常注重創新和市場開發。因此，我們在研發中的十大創新項目，實際上已經將這十大項目的研發投入翻了一番。

Within that spend, we have actually shifted our resources working on application development capability from 20% to 40% of the resources and that is a dramatic change. The secrets of success in a specialty company is having application development capability. And for those who don't know what that is, that is basically having our customers' capability to do what they do. So we have paint booths that our state of the art equal to an OEM paint booth for automotive paints in two places, here and Shanghai, where we can formulate our own coatings, prove it out in exactly how they paint it in every environmental condition around the world and show not only our coating customers, but the OEMs what our Tetrashield polyester can do and our other additives can do in coatings.

在這些支出中，我們實際上將用於應用程式開發能力的資源從 20% 轉移到了 40%，這是一個巨大的變化。專業公司成功的秘訣在於擁有應用程式開發能力。對於那些不知道這是什麼的人來說，這基本上就是讓我們的客戶有能力做他們想做的事情。因此，我們在兩個地方（這裡和上海）擁有與汽車油漆 OEM 噴漆房同等先進的噴漆房，我們可以在這裡配製自己的塗料，並準確證明它們在世界各地各種環境條件下的噴漆方式，不僅向我們的塗料客戶，也向 OEM 展示我們的 Tetrashield 聚酯和我們的其他添加劑在塗料中的作用。

We have the same ability in tires where we can make tires and road test them and show what our state of the art new proprietary tire resins can do to improve traction on a tire. Same thing we have been doing for years in specialty plastics around making everything you can make from a thermoplastic, we can actually do -- we build molds and set process conditions for our customers because we understand their processes better than they do sometimes. Same in interlayers where we can make a windshield.

我們在輪胎方面擁有相同的能力，我們可以製造輪胎並進行道路測試，並展示我們最先進的新型專有輪胎樹脂如何提高輪胎的牽引力。多年來，我們在特種塑膠領域致力於製造一切可以用熱塑性塑膠製造的東西，我們實際上可以做到——我們為客戶製造模具並設定工藝條件，因為我們有時比他們更了解他們的工藝。同樣，我們可以在夾層中製作擋風玻璃。

So significant increases in spend there, significant shift in the SG&A as well in resources towards marketing and sales where we are building some of the world's -- world-class marketing capabilities and our salesforce is just great at carrying a great culture that we have inside Eastman around collaboration and integrity and responsibility of doing what we say we're going to do to our customers.

因此，我們在那裡的支出大幅增加，銷售、一般及行政費用以及資源也大幅轉向營銷和銷售，我們正在打造一些世界一流的營銷能力，我們的銷售團隊非常善於傳承伊士曼內部的優秀文化，即協作、誠信和對客戶言出必行的責任感。

But I do think that the spend will increase. So first, we are going to get a good return for you on the money we have and I think we are doing that. Second, we are now going to start increasing R&D spend as we go forward. As these programs are starting to ramp up and become much more significant, it requires more resources to support multiple customers in taking and activating the market. So you will say that spend increase.

但我確實認為支出會增加。因此，首先，我們將利用我們擁有的資金為您帶來良好的回報，我認為我們正在這樣做。其次，我們現在將開始增加研發支出。隨著這些計劃開始加速並變得越來越重要，需要更多的資源來支持多個客戶佔領和激活市場。所以你會說支出增加了。

Okay, thanks very much. I appreciate it.

好的，非常感謝。我很感激。

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

請將下一個問題作為最後一個問題。

Nils Wallin, CLSA.

里昂證券的尼爾斯·瓦林（Nils Wallin）。

Just a question back on the cadence of the earnings growth. You certainly spoke a lot about the price versus raw and the lag there and some sort of headwind in the first quarter, the rate of growth growing. Should we think about tougher comps in the beginning first half of the year in terms of the year-over-year earnings growth and then improving dramatically in the second half?

我只是想問一下獲利成長的速度。您確實談了很多關於價格與原材料的關係、滯後以及第一季的一些不利因素，成長率也在不斷增長。我們是否應該考慮在上半年初實現更嚴峻的同比盈利增長，然後在下半年實現大幅改善？

Yes, I think about -- when I think about the comps, the comp I think that is going to be toughest is the first-quarter comp for the reasons you described. I am not sure we are going to show 8% growth year-over-year, but we will see how the year plays out. But the toughest comp is first quarter. I think you will see good results as we progress through the rest of the year.

是的，我想到——當我考慮比較時，我認為最艱難的比較是第一季的比較，原因正如你所描述的。我不確定我們是否能實現同比增長 8%，但我們會看看今年的進展如何。但最艱難的競爭是第一季。我認為，隨著我們在今年剩餘時間的進展，你會看到良好的結果。

Great. And then just a quick follow up on tow. Obviously, a lot of discussion about rationalization and what have you. What type of capacity rationalization does the industry need to make in order to get back to the 90 plus operating rate that you enjoyed in the 2013 through 2015 time period?

偉大的。然後只是快速跟進拖曳。顯然，有很多關於合理化和其他內容的討論。為了恢復到 2013 年至 2015 年期間 90 以上的營運率，業界需要進行哪些類型的產能合理化？

Well, I'm not going to get into specific numbers and it is not even appropriate for me to really comment on specifics because it is not my asset. I think it is a more appropriate question for the people who have them. I think that there is enough capacity out there to rationalize to make the industry tight again; it is just a question of whether or not other people choose to do it.

好吧，我不會談論具體的數字，甚至不適合對具體細節發表評論，因為這不是我的資產。我認為對於有這些問題的人來說這是一個更合適的問題。我認為，有足夠的產能進行合理化調整，使行業再次緊張；問題只是其他人是否選擇這樣做。

Thanks very much.

非常感謝。

Okay, thanks, again, everyone, for joining us this morning. Really appreciate your interest in Eastman. A Web replay will be available on our website later this morning. Have a great day.

好的，再次感謝大家今天早上加入我們。非常感謝您對 Eastman 的關注。今天上午晚些時候，我們的網站將提供網路重播。祝你有美好的一天。

And this concludes today's call. Thank you for your participation. You may now disconnect.

今天的電話會議到此結束。感謝您的參與。您現在可以斷開連線。