伊士曼化學 (EMN) 2012 Q1 法說會逐字稿

Good day, everyone, and welcome to the Eastman Chemical Company first-quarter 2012 earnings conference call. Today's conference is being recorded. This call is being broadcast live on the Eastman's website, 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2012年第一季財報電話會議。今天的會議正在錄製中。這場電話會議正在伊士曼網站 www.eastman.com 上現場直播。我們現在將電話轉給先生。伊士曼化學公司投資者關係部 Greg Riddle。先生，請繼續。

Thank you, Jenny, and good morning, everyone, and thanks for joining us. On the call with me today are Jim Rogers, Chairman and CEO; Curt Espeland, Senior Vice President and CFO; Ron Lindsay, Executive Vice President, PCI and Fibers; and Fernando Subijana, Manager Investor Relations.

謝謝你，珍妮，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長兼首席執行官吉姆·羅傑斯 (Jim Rogers)、高級副總裁兼首席財務官科特·埃斯佩蘭 (Curt Espeland)、PCI 和 Fibers 執行副總裁羅恩·林賽 (Ron Lindsay) 以及投資者關係經理費爾南多·蘇比賈納 (Fernando Subijana)。

Before we begin I'll cover two items. First, during this call you will hear certain forward-looking statements concerning our plans and expectations for full-year 2012 and 2013, as well as the acquisition of Solutia. Actual results could differ materially from our plans and expectations. Certain factors related to future expectations are or will be detailed in the Company's first-quarter 2012 financial results news release, and in our filings with the Securities and Exchange Commission, including the Form 10-K filed for full-year 2011 and the Form 10-Q to be filed for first quarter 2012.

在我們開始之前，我將介紹兩件事。首先，在本次電話會議中，您將聽到有關我們 2012 年和 2013 年全年計劃和預期以及收購 Solutia 的某些前瞻性陳述。實際結果可能與我們的計劃和預期有重大差異。與未來預期相關的某些因素已在或將在公司 2012 年第一季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 2011 年全年提交的 10-K 表和即將提交的 2012 年第一季 10-Q 表。

Second, certain Eastman financial measures referenced in this presentation are non-GAAP financial measures such as earnings per share and operating earnings that exclude transaction and financing costs related to the pending acquisition of Solutia and in other post-retirement plan gain. Also referenced are cash from operations excluding capital expenditures and dividends. A reconciliation to the most directly comparable GAAP financial measures and other associated disclosures, including a description of the transaction and financing costs related to the pending acquisition of Solutia, and other post-retirement plan gain, are available in our first-quarter financial results news release, and the tables accompanying the news release available at www.investors.Eastman.com.

其次，本簡報中引用的某些 Eastman 財務指標是非 GAAP 財務指標，例如每股收益和營業收益，其中不包括與即將進行的 Solutia 收購相關的交易和融資成本以及其他退休後計畫收益。也提到了不包括資本支出和股利的經營現金。我們第一季財務業績新聞稿中提供了與最直接可比較的 GAAP 財務指標及其他相關披露的對帳表，包括與即將進行的 Solutia 收購有關的交易和融資成本以及其他退休計劃後收益的描述，新聞稿隨附的表格可從 www.investors.Eastman.com 上查閱。

Lastly, we have posted slides that accompany our remarks for this morning's call on our website. Again at www.investors.eastman.com. And they're located in the Presentations and Events section. With that, I'll turn the call over to Jim.

最後，我們在網站上發布了今天早上電話會議發言的幻燈片。再次造訪 www.investors.eastman.com。它們位於“演示和活動”部分。說完這些，我就把電話轉給吉姆。

Thanks, Greg, and good morning, everyone. You hopefully noticed, Greg mentioned that Ron Lindsay is on the call with us this morning. Ron is one of two EVPs here, along with Mark Costa. Ron has Fibers and PCI. And I imagine many of you have met Ron. I'm pleased to have him on the call, just to show that I'm a very generous CEO. He has a bit of good news and rather than me saying it, I'm going to let Ron say it because it was his team that worked on it. Plus I'm guessing there may just be one or two questions on cracker spreads, et cetera. So Ron's probably the right man to have with us here on the call.

謝謝，格雷格，大家早安。希望您注意到，格雷格提到羅恩林賽今天早上正在與我們通話。羅恩 (Ron) 和馬克·科斯塔 (Mark Costa) 是這裡的兩位執行副總裁之一。羅恩擁有光纖和 PCI。我想你們很多人都見過羅恩。我很高興他能參加電話會議，這足以表明我是一位非常慷慨的執行長。他有一些好消息，但我不會說，而是讓羅恩說，因為這是他的團隊努力的結果。另外，我猜可能只有一兩個關於餅乾醬等等的問題。因此，羅恩可能是與我們一起參加這次電話會議的合適人選。

As I normally do, I'll start with an update on our most recent outlook statements. Back in January, we said we expected first-quarter 2012 earnings per share to be between $1.05 and $1.15. This guidance was given prior to the implementation of a pension accounting change we announced in March. Curt will have more on that in his remarks. With the pension accounting change we reported first-quarter EPS of $1.22, which is on a comparable basis, is near the top of our range. We also said that we expect to make progress this year on a number of organic growth initiatives. And you will hear this morning that we have completed several capacity expansions recently. And our Perennial Wood product is on the shelves in 50 Lowe's stores. In addition we said we expected to close the Solutia acquisition by mid-year 2012, and we remain on track to do just that. And we guided full-year 2012 EPS to be approximately $5. And that the pension accounting change would add approximately $0.30 per share. So we are confirming our full-year EPS guidance. And I'll talk more about that in a few minutes.

像往常一樣，我將首先介紹我們最新的展望聲明。早在 1 月份，我們就表示預計 2012 年第一季每股收益將在 1.05 美元至 1.15 美元之間。該指南是在我們 3 月宣布實施退休金會計變更之前發布的。科特將在他的演講中對此進行更多闡述。隨著退休金會計的改變，我們報告的第一季每股收益為 1.22 美元，以可比較基礎計算，接近我們預期的最高水準。我們也表示，預計今年將在一系列有機成長措施上取得進展。今天早上你們會聽說，我們最近完成了幾項產能擴張。我們的 Perennial Wood 產品已在 50 家 Lowe's 商店上架。此外，我們曾表示，預計將於 2012 年中期完成對 Solutia 的收購，而且我們仍有望實現這一目標。我們預計 2012 年全年每股收益約為 5 美元。退休金會計變更將使每股增加約 0.30 美元。因此我們確認了全年每股收益指引。幾分鐘後我將進一步討論這個問題。

Moving to slide 4. As I mentioned, last night we reported EPS of $1.22. Revenue increased 4%, primarily reflecting higher selling prices. Operating earnings declined year-over-year in each of the segments except Fibers. And we increased our spending in other as we continue to fund organic growth initiatives such as Perennial Wood. Sequentially, operating earnings increased by almost $100 million, reflecting a nice bounceback from the challenging fourth-quarter business environment. And seasonally stronger sales volume which increased 8% sequentially.

移至幻燈片 4。正如我所提到的，昨晚我們報告的每股收益為 1.22 美元。收入成長 4%，主要反映了銷售價格的上漲。除纖維業務外，其他各業務部門的營業利潤均較去年同期下降。我們繼續資助 Perennial Wood 等有機成長計劃，並增加了其他方面的支出。與上一季相比，營業利潤增加了近 1 億美元，反映出公司已從充滿挑戰的第四季商業環境中實現了良好反彈。且由於季節性因素，銷售量較上一季成長了 8%。

Now to the segments starting with CASPI on slide 5. CASPI began 2012 with a strong quarter. Operating earnings were $98 million, down somewhat from first quarter '11, as there was some pre-buying in the polymers product lines in the year-ago quarter. But up about $40 million from the fourth quarter, helped by seasonally higher sales volume which increased 12% sequentially. Looking at our expectations for full-year 2012, all of CASPI's main product lines are operating at high levels. They're also benefiting from the Regalite hydrocarbon resin expansion completed during fourth quarter 2011. This facility, located in the Netherlands, has been expanded three times since 2006, effectively doubling the capacity. And after each capacity expansion has been sold out. And we are sold out once again.

現在就來看看投影片 5 上以 CASPI 開頭的部分。CASPI 於 2012 年第一季表現強勁。營業利潤為 9,800 萬美元，較 2011 年第一季略有下降，原因是去年同期對聚合物產品線進行了一些預購。但比第四季增加了約 4,000 萬美元，這得益於季節性銷售量的增加，銷售量比上一季增加了 12%。綜觀我們對2012年全年的預期，CASPI所有主要產品線均處於高位運作。他們還受益於 2011 年第四季完成的 Regalite 碳氫化合物擴建工程。該工廠位於荷蘭，自 2006 年以來已擴建三次，產能實際上翻了一番。且每次產能擴大後均已銷售一空。我們的商品又一次銷售一空。

In addition, we have recently completed a hydrocarbon resins debottlenecking project at our Jefferson facility in Pennsylvania. And we continue to pursue opportunities to increase our hydrocarbon resin capacity outside the US. Full-year 2012 CASPI operating earnings are expected to be approximately $390 million, which would be the fourth consecutive year of record earnings.

此外，我們最近在賓州傑斐遜工廠完成了碳氫化合物去瓶頸工程。我們將繼續尋求機會在美國以外增加我們的碳氫化合物產能。2012 年全年 CASPI 營業利潤預計約為 3.9 億美元，這將是連續第四年創下獲利記錄。

Speaking of record earnings, Fibers is up next on slide 6. First-quarter operating earnings were a quarterly record at $101 million, helped by higher selling prices and a favorable shift in product mix. Looking at full-year 2012, we expect another record year. Acetate tow sales globally and particularly in Asia-Pacific remain strong. We did have some volume in Asia pulled forward from second quarter into this first quarter. And therefore sequentially volume may decline but we expect volume for the full year to show growth. In our acetate yarn product line we are seeing some weakness, particularly for the textile market in Asia-Pacific and Europe. Taking these factors into consideration, we expect full-year 2012 operating earnings to be approximately $380 million. This would be the ninth consecutive year of record earnings which is indicative of the strength and consistency of earnings in the Fibers segment. Finally, our acetate tow joint venture manufacturing facility with China National Tobacco Corporation remains on schedule to come online mid-2013.

說到創紀錄的收益，纖維產品位於投影片 6 上。由於銷售價格上漲和產品組合的有利轉變，第一季營業利潤創下 1.01 億美元的季度新高。展望2012年全年，我們預期這將是另一個創紀錄的一年。全球尤其是亞太地區的醋酸絲束銷售依然強勁。我們的亞洲部分交易量確實從第二季提前到了第一季。因此，銷售量可能會持續下降，但我們預計全年銷售量將呈現成長。在我們的醋酸紗線產品線中，我們看到了一些弱點，特別是在亞太地區和歐洲的紡織市場。考慮到這些因素，我們預計 2012 年全年營業收入約為 3.8 億美元。這將是連續第九年創下獲利記錄，顯示纖維部門獲利的強勁和穩定性。最後，我們與中國菸草總公司合資的醋酸絲束生產工廠仍計劃於 2013 年中期投產。

More solid results are on slide 7 with PCI. Operating earnings were $77 million in the first quarter, down from a very strong first-quarter 2011. The decline was primarily in Asia-Pacific as growth in the region has slowed, negatively impacting margins. In addition, we had solid results in North America, reflecting continued strong earnings from our plasticizers product lines. As well as the benefit from producing versus purchasing olefins. Offset by a decline in Europe due to weakened market demand. Despite the challenges, PCI's operating margin was above 10%. And our operating earnings increased $28 million sequentially. Looking at the full year, we expect slower growth in Asian building and construction market to continue for the balance of the year, particularly for commodity products such as OXO Alcohols.

投影片 7 上有更可靠的 PCI 結果。第一季的營業利潤為 7,700 萬美元，與表現強勁的 2011 年第一季相比有所下降。下滑主要發生在亞太地區，因為該地區的成長已經放緩，對利潤率產生了負面影響。此外，我們在北美取得了穩健的業績，反映出我們的塑化劑產品線持續強勁的獲利。以及生產烯烴與購買烯烴相比的益處。但由於市場需求減弱，歐洲的銷售量下降。儘管面臨挑戰，PCI 的營業利潤率仍超過 10%。我們的營業利潤連續增加 2800 萬美元。縱觀全年，我們預計亞洲建築市場的成長放緩將在今年餘下時間內持續下去，尤其是對於 OXO 醇等大宗產品而言。

However, PCI also has a number of tailwinds, including strong results from the plasticizers product lines which we expect will be about one-third of operating earnings for PCI in 2012, with above segment average operating margins. This level of performance is a result of growing demand of many of the actions we have taken, such as the positive impact of the Sterling acquisition, including the first phase of the start-up of plasticizer assets producing primarily Eastman 168 non-phthalate plasticizers. As well as the benefit of the acquired acetic acid business. The acquisition of Scandiflex, a non-phthalate plasticizer producer located in Brazil. And the benefit from the 2EH expansion completed earlier this month which increased our capacity by 37,000 net tons, or about 15%, significantly integrating our plasticizer production.

然而，PCI 也擁有許多有利因素，包括增塑劑產品線的強勁業績，我們預計將佔 PCI 2012 年營業利潤的三分之一左右，且營業利潤率將高於行業平均水平。這一績效水準是我們所採取的許多行動不斷增長的需求的結果，例如收購 Sterling 的正面影響，包括增塑劑資產啟動的第一階段，主要生產 Eastman 168 非鄰苯二甲酸酯塑化劑。以及收購醋酸業務帶來的效益。收購位於巴西的非鄰苯二甲酸酯塑化劑生產商 Scandiflex。本月初完成的 2EH 擴建項目使我們的產能增加了 37,000 淨噸，約 15%，顯著整合了我們的增塑劑生產。

Lastly, we also expect the benefit of producing versus purchasing olefins for the year to be a tailwind. And PCI gets about 60% of this benefit. Taking all these factors together, we expect full-year 2012 operating earnings for PCI will be approximately $325 million, which would be a record year for them, slightly higher than 2011.

最後，我們也預計，今年生產烯烴而非購買烯烴的收益將帶來順風。而 PCI 獲得了其中約 60% 的收益。綜合考慮所有這些因素，我們預計 PCI 2012 年全年營業利潤將達到約 3.25 億美元，這將是創紀錄的一年，略高於 2011 年。

And now I'll let Ron share the good news that I mentioned earlier. Ron?

現在我讓羅恩分享我之前提到的好消息。羅恩？

Thank you, Jim. On slide 8 is an update on our thinking about options to further leverage Eastman's exposure to the propane-propylene spread. Back in December 2010, when we restarted our third olefin cracking unit that had been idled, we were a little ahead of the market in recognizing that the cost position of our crackers had improved dramatically with the shale gas boon. Restarting that cracker was a winner on day one. In the middle of 2011, as we were considering all of our options, we said we were going forward with a number of incremental debottlenecks at our Longview facility. And we expect those to come online in 2012 and 2013.

謝謝你，吉姆。第 8 張投影片介紹了我們關於進一步利用伊士曼在丙烷-丙烯價差方面的影響力的選項的最新想法。早在2010年12月，當我們重新啟動閒置的第三個烯烴裂解裝置時，我們就比市場領先一步地認識到，隨著頁岩氣的繁榮，我們的裂解裝置的成本狀況已經大幅改善。重新啟動該餅乾在第一天就取得了成功。2011 年中期，當我們考慮所有選項時，我們表示將逐步消除朗維尤工廠的瓶頸。我們預計這些產品將於 2012 年和 2013 年上線。

In January of this year, we said we were considering an olefins conversion unit, or OCU, in Longview. The OCU investment has a very strong return profile, well above the cost of capital. And would allow us to take advantage of the attractive propylene market in the US. But we continued to explore all of our options and have identified another attractive alternative. A propylene purchase agreement with a third party that will allow us to participate in their planned propane dehydrogenation unit, with cost-based pricing and capital recovery spread out over the term of the agreement. While the OCU option remains a strong alternative for us, we are far enough along that we signed a contract for our portion of the capacity from the planned PDH unit. This agreement will give us similar propylene economics to the OCU and preserves our capital for other uses.

今年 1 月，我們表示正在考慮在朗維尤建立一個烯烴轉化裝置（OCU）。OCU 投資具有非常強勁的回報率，遠高於資本成本。並使我們能夠利用美國具有吸引力的丙烯市場。但我們繼續探索所有的選擇，並發現了另一個有吸引力的替代方案。與第三方簽訂的丙烯購買協議將允許我們參與其計劃中的丙烷脫氫裝置，並在協議期限內分攤基於成本的定價和資本回收。雖然 OCU 選項對我們來說仍然是一個不錯的選擇，但我們已經取得了足夠的進展，並簽署了計劃中的 PDH 裝置部分產能的合約。該協議將為我們提供與 OCU 類似的丙烯經濟效益，並保留我們的資本用於其他用途。

The project owner is working on finalizing agreements with enough customers to proceed with the PDH unit. Assuming they're successful, we would expect an announcement to be likely in the next few weeks. I'll also be speaking at an investor conference in the second half of May. At that time I'll be able to update investors on where things stand.

專案業主正在與足夠的客戶達成協議，以繼續推進 PDH 裝置專案。假設他們成功了，我們預計未來幾週內可能會發佈公告。我還將在五月下半月的投資者會議上發表演講。到時候我將能夠向投資者通報最新情況。

Jim, back to you.

吉姆，回到你身邊。

Thanks, Ron. Nice job by Ron and his team. So I'll continue on slide 9, Specialty Plastics. Which, as expected, improved substantially from the fourth quarter. Sequentially earnings increased by $16 million as raw material and energy costs declined and volume increased to 9%. Year-over-year, operating earnings declined as a combination of lower volumes, lower capacity utilization. And higher raw material and energy costs were partially offset by higher selling prices. Looking at the full year, Specialty Plastics will begin to benefit from a number of capacity additions, including the second Tritan copolyester resin line which came online during the first quarter. And the expansion of our cellulose triacetate, or CTA, capacity used in the LCD market. Expected online mid year.

謝謝，羅恩。羅恩和他的團隊做得很好。因此，我將繼續討論第 9 張幻燈片「特種塑膠」。正如預期的那樣，從第四季度開始，情況有了大幅改善。由於原材料和能源成本下降以及銷量增長 9%，收益連續增加 1,600 萬美元。與去年同期相比，由於產量下降、產能利用率下降，營業利益下降。原材料和能源成本的上漲被銷售價格的上漲部分抵銷。縱觀全年，特種塑膠將開始受益於一系列產能增加，包括第一季投產的第二條 Tritan 共聚酯樹脂生產線。並擴大我們在 LCD 市場使用的纖維素三醋酸酯（CTA）的產能。預計年中上線。

The key variable for Specialty Plastics continues to be sales volume. While we have seen it improve from fourth-quarter levels, it is not yet back to where it was in the first half of 2011 due to weakened demand. Paraxylene recently has been less volatile, but remains slightly disadvantaged compared to raw materials for competing products. Considering all of these factors, we expect Specialty Plastics operating earnings to be approximately $130 million, which would also be record performance.

特種塑膠的關鍵變數仍然是銷售量。儘管我們看到它較第四季度的水平有所改善，但由於需求減弱，它尚未恢復到 2011 年上半年的水平。對二甲苯近期波動較小，但與競爭產品的原料相比仍略佔優勢。考慮到所有這些因素，我們預計特種塑膠的營業收入將達到約 1.3 億美元，這也將是創紀錄的表現。

So have I mentioned we're expecting record operating earnings for all of our segments in 2012? After record performance in 2011? Seriously, developing a track record of consistent year-over-year earnings growth is a top priority for us.

我是否提到我們預計 2012 年所有部門的營業利潤都將創下歷史新高？繼 2011 年創紀錄的表現之後？認真地說，建立持續逐年獲利成長的記錄是我們的首要任務。

And that's a good segue into our guidance for full year 2012 on slide 10. We do expect slow economic growth globally. But with the US remaining solid. We anticipate that Europe will remain weak but not deteriorate from current levels. Asia and particularly China is the region with the most uncertainty as the growth rate has been slowing. And we are seeing the impact most significantly in PCI's commodity product lines. Raw material and energy costs are expected to be less volatile for the balance of the year. With the benefit from producing versus purchasing olefins expected to be a tailwind in 2012 compared with 2011. We also expect to continue to benefit from acquisitions we made last year, from the Solutia acquisition we expect to close in the middle of this year, and from the number of incremental capacity additions we have throughout the Company, which I've highlighted during the segment reviews.

這與我們在第 10 張投影片上對 2012 年全年業績的預測很好地銜接在一起。我們確實預期全球經濟成長緩慢。但美國依然保持穩固。我們預計歐洲經濟仍將保持疲軟，但不會在當前水準上惡化。亞洲，尤其是中國，是經濟成長速度放緩導致不確定性最大的地區。我們看到 PCI 的商品產品線受到的影響最為顯著。預計今年剩餘時間內原材料和能源成本的波動將會較小。與 2011 年相比，2012 年生產烯烴而非購買烯烴的收益預計將成為順風。我們也預計將繼續受益於去年進行的收購、預計今年年中完成的 Solutia 收購以及整個公司產能的增量，我在分部審查期間已經強調過這一點。

As a result, we expect our full-year EPS to be approximately $5.30, which would be an increase of about 10% compared with 2011. And we expect earnings in the second half to be higher than those in the first, due to expected accretion from the acquired Solutia businesses. But otherwise, this year the first half and second year would be similar in earnings. And lastly, we continue to expect 2013 EPS of greater than $6, which again would be solid double-digit earnings growth.

因此，我們預計全年每股收益約為 5.30 美元，與 2011 年相比增長約 10%。我們預計下半年的獲利將高於上半年，這得益於收購的 Solutia 業務預計將帶來的成長。但除此之外，今年上半年和第二年的獲利情況應該差不多。最後，我們繼續預計 2013 年每股收益將超過 6 美元，這將再次實現穩健的兩位數獲利成長。

I'll conclude this morning on slide 11. And you'll see that, while I gave Ron one nugget of good news, I did save one for myself. We talked about Perennial Wood at our Investor Day last year. And those of you that attended in person may recall the Perennial Wood display which highlighted potential applications, such as decking, siding and trim, indoor flooring, windows, outdoor furniture. Since then, we've completed our initial production facility in Kingsport. In February we launched the Perennial Wood brand, showcasing the decking product line at the International Builders Show in Orlando. Today, Perennial Wood decking is on the shelves in over 50 Lowe's stores in the northeast US. For the trade professional, Perennial Wood decking is also being distributed through Boston Cedar and their network of specialized independent retailers. And we expect availability of Perennial Wood to expand over time into other regions and other product categories.

今天上午我將在第 11 張投影片上結束演講。你會發現，當我告訴羅恩一個好消息時，我也給自己留了一個。我們在去年的投資者日上討論了 Perennial Wood。親自參加的人可能會記得多年生木材展示，其中重點介紹了潛在的應用，例如甲板、壁板和裝飾、室內地板、窗戶、戶外家具。從那時起，我們在金斯波特完成了最初的生產設施。二月份，我們推出了 Perennial Wood 品牌，並在奧蘭多國際建築商博覽會上展示了其裝飾產品線。如今，Perennial Wood 地板已在美國東北部 50 多家 Lowe's 商店上架銷售。對於貿易專業人士來說，Perennial Wood 地板也透過 Boston Cedar 及其專業獨立零售商網路進行分銷。我們預計，隨著時間的推移，Perennial Wood 的供應範圍將擴大到其他地區和其他產品類別。

Pricing for Perennial Wood decking is comparable to what you would pay for a premium wood plastic composite, or PVC, decking product. And I've got to say, the initial response has been terrific, exceeding our expectations. And I'd remind you, we estimate that the addressable market for Perennial Wood is around $2 billion. And while it is less capital intensive than most products in our industry, it is higher than our average operating margins. Going forward we will continue to monitor market acceptance for Perennial Wood, and we will determine our next steps likely towards the end of 2012.

多年生木質甲板的定價與優質木塑複合材料（或 PVC）甲板產品的價格相當。我必須說，最初的反應非常好，超出了我們的預期。我要提醒您，我們估計 Perennial Wood 的潛在市場規模約為 20 億美元。雖然它比我們行業中的大多數產品資本密集度較低，但卻高於我們的平均營業利潤率。展望未來，我們將繼續關注 Perennial Wood 的市場接受度，並可能在 2012 年底確定下一步行動。

Of course, Perennial Wood is not the only organic growth initiatives that we are working on. When you look at our spending in other, it is for a number of initiatives that we expect will meaningfully contribute to growth over the next five years and then beyond that. Our Chief Technology Officer, Greg Nelson, will highlight a few of these growth initiatives, as well as their expected earnings impact at an investor conference in early May. So you don't have long to wait there. These projects are consistent with our primary focus, which is earnings growth. And as we make progress on organic growth initiatives, capacity expansions, and acquisitions such as Solutia, we are prudently utilizing capital to deliver growth and high returns, building a path to higher earnings, brick by brick.

當然，Perennial Wood 並不是我們正在進行的唯一有機成長計畫。當你看到我們在其他方面的支出時，你會發現我們預計一系列措施將在未來五年及以後對經濟成長做出有意義的貢獻。我們的技術長格雷格·尼爾森 (Greg Nelson) 將在 5 月初的投資者會議上重點介紹其中一些成長舉措及其預期的獲利影響。所以你不用在那裡等很久。這些項目與我們的首要關注點一致，即獲利成長。隨著我們在有機成長計劃、產能擴張和收購（如 Solutia）方面取得進展，我們正在謹慎地利用資本來實現成長和高回報，一步步建立更高收益的道路。

With that, I'll turn it over to Curt.

說完這些，我會把話題交給 Curt。

Thanks, Jim, and good morning everyone. I just have a few slides this morning and I'll begin with our financial highlights on slide 13. We generated $19 million of cash from operating activities in the first quarter. This really starts with, first and foremost, net earnings remained solid across all of our businesses. In working capital, receivables increased as expected, due to higher sales revenue. Additionally, our business and supply chain teams are doing a great job managing inventory quantities which, combined with moderated raw material costs as a whole, provided operating cash flows of $14 million in the quarter. We also made a $25 million contribution to our US defined benefit pension plans. And continue to expect the full-year contributions will be approximately $100 million. Looking at free cash flow in the quarter, it was a negative $107 million, which is a good result in what is typically our weakest quarter for free cash flow generation due to seasonal working capital requirements.

謝謝，吉姆，大家早安。今天早上我只有幾張投影片，我將從第 13 張投影片上的財務亮點開始。我們第一季的經營活動產生了 1,900 萬美元的現金。首先，我們所有業務的淨利潤都保持穩健。在營運資金方面，由於銷售收入增加，應收帳款如預期增加。此外，我們的業務和供應鏈團隊在管理庫存數量方面做得非常出色，再加上整體原材料成本的適度增長，本季的營運現金流達到 1,400 萬美元。我們也向美國的固定收益退休金計畫注資 2,500 萬美元。並繼續預計全年捐款將達到約 1 億美元。從本季的自由現金流來看，為負 1.07 億美元，由於季節性營運資金需求，這通常是我們自由現金流產生最弱的季度，但這是一個不錯的結果。

Next, on slide 14 is a review of our pension accounting change. You may recall we announced this in early March. We believe the change improves transparency enabling investors to more clearly evaluate our operating performance. At a high level, actuarial gains and losses for the pension and OPEB plans are now recognized in operating results in the year they occur rather than being amortized over future periods, as they were previously. The mark-to-market gains and losses are recognized annually in the fourth quarter. And can be found in corporate expense rather than being allocated to the segments. An interim remeasurement triggered by curtailment, settlement or significant plan changes will be recognized as a mark-to-market adjustment in the quarter in which the triggering event occurs. An example of that is what we recognized in first quarter of 2011, as described in the news release. Service costs and amortization of prior service credits continue to be allocated to the segments. Excluding the fourth-quarter mark-to-market adjustment, we expect this change will result in approximately $0.30 increase to full year 2012 earnings per share. And $0.08 of this roughly was recognized in the first quarter this year.

接下來，第 14 張投影片回顧了我們的退休金會計變革。您可能還記得我們在三月初宣布了這一消息。我們相信這項變更提高了透明度，使投資者能夠更清楚地評估我們的經營績效。從高層次來看，退休金和 OPEB 計劃的精算損益現在在發生當年的經營業績中確認，而不是像以前那樣在未來期間攤銷。按市價計價的收益和損失每年在第四季度確認。並且可以在公司費用中找到，而不是分配給各部門。因削減、結算或重大計畫變更而觸發的中期重新計量，將在觸發事件發生的季度確認為市價調整。正如新聞稿中所述，我們在 2011 年第一季就認識到了這一點。服務成本和先前服務信用的攤銷繼續分配給各部門。不計第四季的市價調整，我們預計這項變更將導致 2012 年全年每股收益增加約 0.30 美元。其中約 0.08 美元是在今年第一季確認的。

Moving next to an update on our acquisition of Solutia. Beginning with financing. In March the term and bridge loans were put in place. The term loan is $1.2 billion, and it will be amortized over five years. The bridge loan is $2.3 billion, and it expires one year after the transaction closes. The rate for both of these is LIBOR plus 150 basis points. And this is a great rate and it reflects the solid investment credit rating of Eastman. We are not expecting to use the bridge loan but rather anticipate issuing public debt over the course of the next few months.

接下來介紹我們收購 Solutia 的最新情況。從融資開始。3 月份，定期貸款和過橋貸款已到位。該筆定期貸款為 12 億美元，將在五年內攤銷。這筆過橋貸款金額為 23 億美元，將在交易結束後一年到期。這兩個利率都是 LIBOR 加 150 個基點。這是一個非常好的利率，它反映了伊士曼穩健的投資信用評級。我們並不是打算使用過橋貸款，而是預計在未來幾個月內發行公共債務。

Moving next to Solutia stockholder vote. We filed the preliminary proxy and prospectus, or S-4, with the SEC on March 7. We filed an amended S-4 last Friday on April 20. The Solutia stockholder vote on the transaction will be scheduled after the S-4 is finalized and cleared and has been declared effective by the SEC. Finally, on the regulatory approval front, we are making good progress. The Hart-Scott-Rodino waiting period expired in March without comment. We have received approval from China, South Korea and the Ukraine. And we expect a regulatory approval in the EU to be completed prior to the end of May. Given everything that we see today, we remain on track for a mid-2012 close, consistent with our guidance to you back in January. And of course, as we get to closing and beyond, we'll have more to say about integration, cost synergies, cash generation and the significant positive impact we expect Solutia will have on our earnings going forward.

接下來進行 Solutia 股東投票。我們於 3 月 7 日向美國證券交易委員會提交了初步代理和招股說明書（S-4）。我們於 4 月 20 日上週五提交了修改後的 S-4 文件。首諾股東對此交易的投票將在 S-4 最終確定、批准並由美國證券交易委員會宣布生效後進行。最後，在監管審批方面，我們取得了良好的進展。哈特-斯科特-羅迪諾等待期已於三月到期，但未得到任何評論。我們已經獲得中國、韓國和烏克蘭的批准。我們預計歐盟監管部門的批准將在五月底之前完成。綜合考慮我們今天看到的情況，我們仍有望在 2012 年中期完成收盤，這與我們在一月份給出的指導一致。當然，隨著交易接近尾聲及之後，我們將更多地談論整合、成本協同效應、現金產生以及我們預期 Solutia 將對我們未來收益產生的重大積極影響。

I'll conclude this morning on slide 16 with a few comments about our capital allocation. We continue to implement a balanced approach across the areas you see on this slide, with a focus on funding earnings growth. Starting with capital expenditures, we have organic growth initiatives throughout the Company that we will continue to fund. And expect CapEx before Solutia of approximately $400 million for full-year 2012. We expect the incremental expansions we have discussed to contribute to earnings in 2012. And then to result in approximately $300 million of revenue in 2013, with operating margins above the corporate average. And we have a number of other organic growth initiatives, including Perennial Wood, which Jim mentioned, that we expect will contribute further to earnings growth longer term.

今天上午，我將在第 16 張投影片上對我們的資本配置發表一些評論。我們將繼續在這張投影片上所看到的領域實施平衡的方法，重點是資助獲利成長。從資本支出開始，我們在整個公司範圍內推行有機成長計劃，並將繼續為其提供資金。預計 2012 年全年 Solutia 之前的資本支出約為 4 億美元。我們預計，我們討論過的增量擴張將為 2012 年的獲利做出貢獻。從而在 2013 年實現約 3 億美元的收入，營業利潤率高於企業平均。我們還有許多其他有機成長計劃，包括 Jim 提到的 Perennial Wood，我們預計這些計劃將進一步促進長期獲利成長。

Next, on the dividend, we raised it twice over the last year and-a-half. And of course it continues to be reasonable for investors to expect that as we increase earnings we will also increase the dividend. Of course, I remind you that it is ultimately a Board decision. Regarding equity, in 2010 and 2011 we repurchased approximately $600 million of our stock, or approximately 15 million shares at an average price of $40 per share. And we expect to issue approximately 15 million shares for the Solutia acquisition. Moving next to joint ventures and acquisitions, we have been active over the last few years, with the largest being the pending Solutia acquisition. And these are expected to significantly contribute to our earnings growth over the next several years. And on joint ventures, as Jim mentioned earlier, our acetate tow manufacturing joint venture is scheduled to come online mid-2013.

其次，關於股息，我們在過去一年半已經兩次提高股息。當然，投資人仍然有理由預期，隨著我們增加收益，我們也將增加股利。當然，我提醒你，這最終是董事會的決定。關於股權，2010 年和 2011 年我們回購了約 6 億美元的股票，約 1,500 萬股，平均價格為每股 40 美元。我們預計將為收購 Solutia 發行約 1500 萬股股票。接下來談到合資和收購，過去幾年我們一直很活躍，其中最大的一筆是即將進行的 Solutia 收購。預計這些將在未來幾年對我們的獲利成長做出重大貢獻。關於合資企業，正如 Jim 之前提到的，我們的醋酸纖維絲束製造合資企業計劃於 2013 年中期投入營運。

Lastly, on debt and pension. We expect to issue between $2.3 billion and $2.5 billion of new public debt securities for the Solutia acquisition in which is a favorable rate environment. And on pension, as I mentioned earlier, we expect to contribute approximately $100 million to the US defined benefit plans in the US in 2012. I'll conclude by reaffirming our expectation to generate approximately $1 billion of free cash flow over the next couple of years. And that while the main use for free cash flow will be deleveraging, we expect to also meaningfully fund each of the other areas with a priority on generating consistent earnings growth.

最後，關於債務和退休金。我們預計將為收購 Solutia 發行價值 23 億美元至 25 億美元的新公共債務證券，而利率環境十分有利。關於退休金，正如我之前提到的，我們預計在 2012 年向美國的固定收益計畫投入約 1 億美元。最後，我要重申我們預計未來幾年將產生約 10 億美元的自由現金流。雖然自由現金流的主要用途是去槓桿，但我們預計也會為其他各個領域提供有意義的資金，優先考慮實現持續的獲利成長。

With that, I'll turn it back over to Greg.

說完這些，我會把話題交還給格雷格。

Thanks, Curt. Jenny, this concludes our prepared remarks. We are ready for questions.

謝謝，Curt。珍妮，我們的準備好的演講到此結束。我們已經準備好回答問題了。

(Operator Instructions). Frank Mitsch with Wells Fargo Securities.

（操作員指令）。富國證券公司的弗蘭克‧米奇 (Frank Mitsch)。

This is a question for Ron. There was some discussion about restarting the fourth cracker. And then this morning you're talking about investing in a PDH unit. Does that preclude restarting the fourth cracker? Where do you stand on that decision making process?

這是問羅恩的問題。關於重新啟動第四台餅乾有一些討論。然後今天早上您正在談論投資 PDH 單位。這是否會阻止重新啟動第四個破解器？您對於這個決策過程持什麼立場？

Frank, let me go back to what was driving a lot of our assessment of our options here. We, as you know, buy a substantial amount of propylene still. Even though we make it, we're net short. We're net long on ethylene. So we've been looking at how to address in particular that position on propylene, and effectively fully backwards integrate our propylene derivatives out of Longview. And so we looked at a variety of options there.

弗蘭克，讓我回顧一下是什麼促使我們對這裡的選擇進行評估。如您所知，我們仍然購買大量丙烯。即使我們成功了，我們仍然缺乏資金。我們持有乙烯淨多頭部位。因此，我們一直在研究如何解決丙烯問題，並有效地將我們的丙烯衍生物從朗維尤完全向後整合。因此我們研究了各種各樣的選擇。

Starting the cracker was certainly one that we've gone through carefully. It did not meet all of our propylene needs to fully backwards integrate. And unlike the one we did restart, it was quite a bit more expensive. It was in poorer condition, needed a lot more work. So the capital requirement there was much higher. And that really drove us to look at is that really the right approach to proceed. And that led to these other options being surfaced. And we believe this one is the best one of the bunch because of the impact it's going to have on us, as well as the fact that we can take that capital we would have gone to rebuild something to get to the same position, and take that capital elsewhere.

啟動餅乾當然是我們已經仔細經歷過的事情之一。它不能滿足我們完全向後整合的丙烯需求。與我們重新啟動的那個不同，它的成本要高得多。它的狀況較差，需要做更多的工作。因此那裡的資本要求要高得多。這確實促使我們去思考這是否是正確的繼續前進的方法。這導致這些其他選擇的出現。我們相信這是最好的選擇，因為它將對我們產生影響，而且我們可以利用原本用於重建某些東西以達到相同地位的資本，將這些資本轉移到其他地方。

Okay. Great. And then you expect this PDH unit to be fully constructed by 2015. And am I correct that this project has not been announced yet publicly?

好的。偉大的。然後您預計該PDH裝置將於2015年全面建成。我是否正確地理解了該項目尚未公開宣布？

You're right on both fronts there.

您在這兩方面都是正確的。

Frank, this is Jim. We're just a little ahead of the game on this one but we thought it was important. We know, for a few calls now, people have been looking at -- so, what's Eastman going to do down there in Texas. And let me just say, this is a good outcome. We're getting the economics of the olefin conversion unit, close to it, and saving our capital. And as we look at doing acquisitions and the other kind of growth initiatives we've got, we've got to do some more smart moves like this where you get the economics but don't spend your capital. I want to make sure people understand how happy we are with this contract. They've still got to sign up a couple more folks. I don't think you have long to wait, right, Ron?

法蘭克，這是吉姆。在這一點上我們只是稍微領先一點，但我們認為這很重要。我們知道，透過幾次通話，人們一直在關注——伊士曼將在德克薩斯州做什麼。我只想說，這是一個好的結果。我們正在使烯烴轉化裝置的經濟性接近它，並節省我們的資本。當我們考慮進行收購和其他類型的成長計畫時，我們必須採取一些更明智的舉措，例如獲取經濟效益但不花費資本。我想確保人們了解我們對這份合約有多高興。他們還得再招募幾個人。我認為你不用等太久，對吧，羅恩？

That's right.

這是正確的。

This one looks like this is a good project. They're being smart. The people building it are being smart about how they're managing their risk and pretty much locking up the output of this thing. That makes a lot of sense to me. This is a win-win for the guys building it and for us, as well.

這看起來是一個不錯的項目。他們很聰明。建造它的人非常聰明，知道如何管理風險，並且幾乎鎖定了這個東西的產出。這對我來說非常有意義。對於建造它的人和我們來說，這都是雙贏的。

I must say, I do admire the way that you keep us sitting on the edge of our seats. You have Ron giving some news next month. You've got Greg Nelson giving some news next month. I just can't wait for the next piece of news out of EMN, I got to tell you.

我必須說，我真的很欽佩你讓我們坐立不安的方式。羅恩下個月會發布一些消息。格雷格·尼爾森 (Greg Nelson) 下個月將會發布一些新聞。我迫不及待地想聽 EMN 的下一則新聞，我得告訴你。

We're trying to look down the road. You might have noticed -- we're trying to be a little more long-term focused. For example, on this Perennial Wood, if this hits the way we've got a shot at it hitting, you're not going to feel it in this first thing we built because it's smaller and it's really just to tease the market out. But when we go to a commercial scale on Perennial, it should look very good.

我們正在努力展望未來。您可能已經注意到—我們正嘗試更加重視長遠目標。例如，對於這款 Perennial Wood，如果其達到了我們想要的效果，那麼你不會在我們建造的第一款產品中感受到它，因為它較小，而且它實際上只是為了挑逗市場。但是當我們將 Perennial 推向商業規模時，它看起來會非常好。

I was going to ask a different question but why don't we stay with Perennial Wood. You said the initial response has been quite favorable. Can you give us some color around that, any sort of metrics in terms of why you're feeling better about that today than you did perhaps a couple months ago?

我本來想問一個不同的問題，但為什麼我們不繼續選擇 Perennial Wood 呢？您說最初的反應非常正面。您能否給我們一些細節，或任何指標來說明為什麼您今天的感覺比幾個月前更好？

Yes, and I'm not going to steal Greg's thunder. I will say the response -- there's different metrics you get in terms of response to ads, response to turning. I can't remember what you call it, but when people first call in, that initial lead, turning it into an actual sale. All those numbers are good. While I'm here feeling good, I want to make sure I caveat it a little bit because this is still pretty early on. We're still getting the bugs out of a few things in the chain. But in general the reception we get from people who know what they're talking about, like the folks within Lowe's, or the folks within Boston Cedar, I think this one can be pretty good. But Greg will talk some more about it when he gets up in front of people in a couple weeks.

是的，我不會搶格雷格的風頭。我會說反應－在對廣告的反應、對轉變的反應方面，你會得到不同的指標。我不記得您怎麼稱呼它，但是當人們第一次打電話時，最初的線索就變成了實際的銷售。所有這些數字都很好。雖然我在這裡感覺很好，但我還是想確保我對此提出一點警告，因為這還處於早期階段。我們仍在解決鏈中的一些問題。但總的來說，我們從那些知道自己在說什麼的人那裡得到的回饋，例如勞氏公司的人，或是波士頓雪松公司的人，我認為這次的回饋相當不錯。但幾週後，格雷格將在人們面前進一步談論這件事。

Great. I'll try and make it out to Lowe's this weekend. Thank you so much.

偉大的。我會試試這個週末去一趟 Lowe's。太感謝了。

David Begleiter with Deutsche Bank.

德意志銀行的大衛·貝格萊特。

Jim, just on your coal gasification facility in Kingsport, I think you said in the past it was advantaged up until nat gas got as low as $2.50 per MMBtu. I might be wrong on that. But given where gas is, is that facility still advantaged given low priced nat gas in the US?

吉姆，就您在金斯波特的煤氣化設施而言，我記得您說過，在天然氣價格跌至每百萬英熱單位 2.50 美元之前，它一直具有優勢。我可能錯了。但考慮到天然氣的所在地，鑑於美國天然氣價格低廉，該設施是否仍具有優勢？

Yes, it is. We went back and looked at the history. We could not find a time when we were not advantaged being on coal here in Kingsport. And of course there's two moving parts. There's the price of coal and what we pay for it. There's the efficiency of how we run our operations. There's more than two moving parts. And then there's the price of natural gas. The other thing I would ask you to remember is you're not necessarily competing with those products, you're not necessarily competing against other people that are natural gas-based. So, when we think globally with where we take those products, a lot of people we're competing with are NAFTA-based. Or natural gas-based in other regions of the world. We're still pretty pleased with the economics of our gasification facility here in Kingsport.

是的。我們回顧並回顧了歷史。我們從來沒有發現過金斯波特不依賴煤炭的時代。當然，有兩個活動部件。煤炭的價格以及我們為此付出的代價。我們的營運效率很高。有兩個以上的活動部件。然後還有天然氣的價格。我想請你記住的另一件事是，你不一定與這些產品競爭，你不一定與其他以天然氣為基礎的人競爭。因此，當我們從全球角度考慮這些產品的銷售目的地時，我們發現許多競爭對手都位於北美自由貿易協定地區。或世界其他地區的天然氣。我們對金斯波特氣化設施的經濟效益仍然非常滿意。

Just on the PDH, you will not be making any capital investment, correct?

僅在 PDH 上，您不會進行任何資本投資，對嗎？

That's correct.

沒錯。

Did you consider making one or taking ownership interest in the facility?

您是否考慮過建造一座這樣的設施或取得該設施的所有權？

This is Jim again. We anticipated the question, why not do two or three things. Why not restart the cracker, why not do the OCU, why not take a chunk of this PDH. We're really trying to think about our long-term strategy, how we deploy our cash, our resources. And we don't necessarily just want to be a bigger ethylene producer. And if we did, it wouldn't be with the size crackers that we have in Texas. We were more than willing to go ahead with the OCU. That made a lot of sense. But this was a very elegant solution in terms of saving our capital and getting what we need. By the way, the economics look different when you're talking about replacing or backing out your propylene purchases versus just being a merchant ethylene or propylene producer. So we really like where we're ending up. I hope they go ahead and wrap up their project and get it announced publicly so we can talk more about it.

我又是吉姆。我們預料到了這個問題：為什麼不做兩三件事呢？為什麼不重新啟動破解器，為什麼不做 OCU，為什麼不拿走這個 PDH 的一部分。我們確實在努力思考我們的長期策略，如何部署我們的現金和資源。我們不一定只想成為更大的乙烯生產商。即使我們這樣做了，我們的餅乾也不會像德克薩斯州的餅乾那麼大。我們非常願意繼續推進 OCU 專案。這很有道理。但就節省金錢和獲得我們所需的東西而言，這是一個非常優雅的解決方案。順便說一句，當你談論更換或停止購買丙烯時，與僅僅作為乙烯或丙烯生產商相比，經濟效益看起來有所不同。所以我們真的很喜歡我們最終的成果。我希望他們繼續完成他們的項目並公開宣布，以便我們可以更多地談論它。

Jim, lastly, can you comment on the propane-propylene spread in Q1? And if you could quantify the benefit to you guys.

吉姆，最後，您能評論一下第一季丙烷-丙烯價差嗎？並且你能量化帶給你們的好處嗎？

We did it once last year to lay it out for people. We said it wasn't the emphasis we wanted people to think about. We didn't want them just focusing on propane, propylene. I can tell you, it was good again in the first quarter. Of course, the ethylene was what was really good in the first quarter for showing you everything. You've got to think more than just the propane-propylene, it's also how the ethylene did. Year-over-year the whole cracker spreads are going to be pretty good for us compared to last year. I was sitting here thinking, as much as I don't want to talk about it, it's nice to have these spreads, nice to have these spreads this year.

去年我們做過一次，向人們展示。我們說這不是我們希望人們思考的重點。我們不希望他們只關注丙烷、丙烯。我可以告訴你，第一季的情況又很好。當然，乙烯是第一季真正好的東西，它向你展示了一切。你必須考慮的不只是丙烷-丙烯，還要考慮乙烯的表現。與去年相比，今年整個餅乾價差對我們來說將相當不錯。我坐在這裡想，儘管我不想談論它，但有這些利差還是不錯的，今年有這些利差還是不錯的。

The other thing I'll say on it is there's some chatter about whether or not propane's going to come off in the middle of the year, maybe go a little long. And that very well could be. One of the things I thought about is you're perhaps more likely to hold on to spread if propane's what comes off. Just propylene going up sometimes, the way we move so much propylene through derivatives, you can't always get the pricing in the derivatives that equates to what the propylene went up. And we talked about that last year in the second quarter when people were thinking we were going to do better than we did. So propane coming off, you may be more likely to keep some of that spread. But as we looked forward in the year, looked at our numbers, we just assumed it was steady state where it is now.

我想說的另一件事是，有人在討論丙烷是否會在年中停產，或許會持續一段時間。這很有可能。我想到的一件事是，如果流出的是丙烷，那麼你也許更有可能繼續傳播。有時丙烯價格會上漲，我們透過衍生性商品轉移大量丙烯，因此衍生性商品的定價並不總是與丙烯價格上漲相等。去年第二季度，當人們認為我們的業績會比現在更好時，我們就討論過這個問題。因此，隨著丙烷的消失，您可能更有可能保留部分擴散。但當我們展望今年，看看我們的數字時，我們只是假設它現在處於穩定狀態。

Thanks a lot.

多謝。

Kevin McCarthy with Bank of America-Merrill Lynch.

美國銀行美林證券的凱文‧麥卡錫 (Kevin McCarthy)。

Jim, just a couple of clarifications on the new PDH contract. On a pro forma basis for that contract, does it move your long, short position to zero or exactly 100% integrated? Or would it be more or less than that? And then second, am I correct in understanding it's a propane plus deal rather than a market minus deal?

吉姆，我只想對新的 PDH 合約做一些澄清。按照該合約的備考基礎，它會將您的多頭、空頭部位變為零還是恰好 100% 合併？或會比這更多或更少？其次，我是否正確地理解這是一項丙烷加交易而不是市場減交易？

I'll let Ron answer that.

我讓羅恩來回答這個問題。

On the balance, this will effectively make us balanced on propylene. Between this contract and what we make we'll be covered for our needs. And it is a cost based off the propane formula.

總的來說，這將有效地使我們在丙烯上保持平衡。透過這份合約和我們的產品，我們可以滿足自己的需求。這是基於丙烷公式的成本。

Okay, great. And then a couple questions on CASPI. I was a little surprised, maybe I shouldn't be surprised, that you sold out your Regalite capacity so quickly. It seems like you had 20% every so often. Whereas most units take a year or two to load, this thing is sold out in a quarter or two. Can you help us understand why that is the case? And if it keeps happening why you might not just double capacity or get more aggressive on increases there?

好的，太好了。然後是關於 CASPI 的幾個問題。我有點驚訝，也許我不應該感到驚訝，你們的 Regalite 產能這麼快就銷售一空。看起來你時不時就會有 20% 的收益。大多數產品需要一到兩年的時間才能裝完，而這款產品在一到兩個季度內就銷售一空。您能幫助我們理解為什麼會出現這種情況嗎？如果這種情況持續發生，為什麼你們不只是增加產能或更積極地增加產能呢？

Thanks for noticing, by the way, that we have done a good job. We got, again, some wind at our back in this marketplace. Very strong growth if you think about all the personal hygiene, the adhesives on diapers, et cetera, in the emerging markets, it's a pretty strong driver. Of course, we're not the only player in this marketplace. Other people tend to want to expand their capacity too. We're being very disciplined in how we approach it. I can say, though, that we think there's a great opportunity to do something perhaps a little larger in Asia in this marketplace. But I don't have anything to talk about or announce yet. But it would be logical that people would be looking for capacity in Asia and we would be a logical player to do that. But we'll just have to put a place over there and see what we can make happen.

順便說一句，感謝您注意到我們做得很好。我們在這個市場上再次獲得了一些支持。如果你考慮所有個人衛生用品、尿布上的黏合劑等等，那麼在新興市場中，成長非常強勁，這是一個相當強勁的驅動力。當然，我們並不是這個市場上唯一的參與者。其他人也傾向於擴大自己的能力。我們在處理此事時非常嚴謹。不過，我可以說，我們認為在亞洲這個市場上有很大機會做一些更大規模的事情。但我還沒有什麼可談論或宣布的。但人們在亞洲尋找產能是合乎邏輯的，而我們也是這樣做的合乎邏輯的參與者。但我們只需要在那裡放置一個地方，看看我們能做些什麼。

Okay. And then also on CASPI, Jim, if I think about it broadly, solvents and various specialities that you sell, what percentage of CASPI sales would you say goes into architectural coatings? Is that meaningful? And related to that, might there have been any benefit related to favorable weather through the spring?

好的。然後關於 CASPI，吉姆，如果我從廣義上考慮，您銷售的溶劑和各種專業產品中，您認為 CASPI 銷售額中有多少比例用於建築塗料？這有意義嗎？與此相關，春季的良好天氣是否會帶來任何好處？

It's a good question. We show building and construction at about 17% of CASPI sales. When we say favorable weather, we got our little North American hats on and so we think about North America had favorable weather. Of course, I think I've heard Eastern Europe, et cetera, had very extreme and cold weather. So it's a global business. I would guess there was some benefit from that but it's hard to pin down. Basically, CASPI's just firing on all the cylinders. A little sloppiness in solvents, particularly in Asia, but in general firing on all cylinders.

這是個好問題。我們發現建築施工約佔 CASPI 銷售額的 17%。當我們說天氣好的時候，我們戴上北美人的帽子，所以我們認為北美有好天氣。當然，我想我聽說過東歐等地的天氣非常極端寒冷。所以這是一項全球性的業務。我猜想這樣做會有一些好處，但很難確定。基本上，CASPI 正在全力運作。溶劑方面有些馬虎，特別是在亞洲，但整體來說一切進展順利。

Thank you very much.

非常感謝。

Bob Koort with Goldman Sachs.

高盛的鮑伯‧庫爾特 (Bob Koort)。

Jim, you referred to something in one of your remarks about propylene prices don't really affect your revenue line because you've got to convert then into propylene derivative price hikes. And then you mentioned also maybe propane gets soft in the summer. Can you just talk a little bit about what you expect on your propylene derivative pricing, and what the usual lag might be in the marketplace between olefin changes and your product price changes?

吉姆，你在評論中提到丙烯價格實際上不會影響你的收入，因為你必須將其轉化為丙烯衍生物價格上漲。然後您還提到丙烷在夏天可能會變軟。您能否簡單談談您對丙烯衍生物定價的預期，以及市場上烯烴變化和產品價格變化之間通常存在的滯後？

Yes. And if I implied that it didn't have an impact to something, that was wrong. I was just saying it's not a one-for-one relationship. Propylene can move, but a number of our derivatives are considered more specialty. And so you don't just jerk those around each week as you get the last spot price on propylene. That's more what I was saying. So it's not quite the same as being a merchant seller of propylene. We take it through other products. I wasn't even talking so much about a lag, although there would obviously be a lag as you process it further. I was just meaning we try to be more disciplined in our pricing when it comes to our end products. Price more off of value where we can. But without a doubt, higher propylene prices aids our pricing.

是的。如果我暗示它對某件事沒有影響，那就錯了。我只是說這不是一對一的關係。丙烯可以移動，但我們的許多衍生物被認為是更特殊。因此，當您獲得丙烯的最新現貨價格時，您不必每週都隨意更改價格。這就是我所說的。所以這與丙烯的銷售商不太一樣。我們透過其他產品來實現這一點。我什至沒有談論太多關於滯後的問題，儘管在進一步處理時顯然會出現滯後。我只是想說，當談到我們的最終產品時，我們會嘗試在定價方面更加規範。我們會盡可能降低價格。但毫無疑問，丙烯價格上漲有助於我們的定價。

I can also tell you that pricing in general, not just in this area but I'd say pricing in general, is a little sloppier in the marketplace than it was a year ago. I've got Ron sitting next to me. I think he would say the same thing within PCI and CASPI. Last year the demand was so strong that you pretty much got the price you wanted or you could sell it somewhere else in the world. And with Asia and Europe being fairly loose right now, you don't quite have that pricing power that you had a year ago. And that's not so much an Eastman comment as it is a market comment in general.

我還可以告訴你，總體定價，不僅僅是在這個領域，我想說總體定價，在市場上比一年前要混亂一些。榮恩坐在我旁邊。我認為他會在 PCI 和 CASPI 中說同樣的話。去年的需求非常強勁，你幾乎可以得到你想要的價格，或者你可以在世界其他地方出售它。由於亞洲和歐洲目前的政策相當寬鬆，你的定價能力不如一年前了。這與其說是伊士曼的評論，不如說是整個市場的評論。

Okay. On your PDH unit, obviously you're reluctant to name the counterparty until they talk about it. But the one PDH unit out there had a few growing pains so there appears to be some magic to the art of PDH. Are you concerned at all about start-up date, timing and the technology necessary here? Or are you pretty confident it will come on and start providing some help in 2015?

好的。在您的 PDH 單元上，顯然您不願意透露交易對手的名字，直到他們談論此事。但是，那裡的一個 PDH 單位經歷了一些成長的煩惱，因此 PDH 的藝術似乎有一些魔力。您是否擔心啟動日期、時間和所需的技術？或者您是否非常有信心它會在 2015 年出現並開始提供一些幫助？

Yes, we certainly are aware of some of the history here. That was part of our due diligence as we went through this. I would say that we went in with that cautionary view and got ourselves comfortable that the technology is very viable. We understand some of the reasons for prior concerns with another plant out there. And feel like those are not things that are going to translate to this project. So the long, short of it is we feel good about it from a technical and operational standpoint, as well as obviously the deal.

是的，我們當然了解這裡的一些歷史。這是我們盡職調查的一部分。我想說，我們帶著這種謹慎的態度進入了這個領域，並確信這項技術非常可行。我們了解之前對另一家工廠的擔憂的一些原因。感覺這些東西不會轉化到這個專案中。總而言之，從技術和營運的角度來看，我們對此感到滿意，當然這筆交易也是如此。

All right. And one last one, if I might. It seemed like one benefit of turning your fourth cracker maybe into some sort of a metathesis-type unit is you could consume ethylene. And while producing ethylene is wonderful for the next three or four years, then maybe you go through the typical down cycle. Have you ever considered maybe getting a pass-through ethylene price with somebody if they would be willing to take the other side of that? Or how do you think about your ethylene price and getting it to market from Longview versus if you're down in the Gulf coast?

好的。如果可以的話，我還有最後一個問題。將第四個裂解裝置轉變為某種複分解型裝置的一個好處似乎是可以消耗乙烯。雖然在未來三、四年內生產乙烯將會非常順利，但之後也許會經歷典型的衰退週期。您是否考慮過如果有人願意接受，是否可以與對方達成轉嫁乙烯價格？或者，您如何看待乙烯價格以及如何將其從朗維尤推向市場，以及墨西哥灣沿岸的情況？

I'll get Ron to answer this again, but we do have a contract with Westlake right now which affects the pricing we get for our ethylene. But, Ron?

我會讓羅恩再次回答這個問題，但我們現在確實與 Westlake 簽訂了合同，這會影響我們乙烯的定價。但是，羅恩？

That's right. Certainly as we look ahead, we haven't excluded the capability of doing the OCU with this other deal. So if we judge later that that was attractive, something we wanted to do, we've still got that option. So we've kept some optionality there but we've got our immediate concern dealt with, with the PDH deal that we've cut.

這是正確的。當然，展望未來，我們並沒有排除透過這筆其他交易來實現 OCU 的可能性。因此，如果我們後來判斷這件事很有吸引力，是我們想做的事情，我們仍然可以選擇。因此，我們保留了一些可選性，但我們已經解決了當前的問題，即我們削減的 PDH 交易。

Yes, Bob. I think we sized this for people before that we said an OCU, or in this case a contract, probably gives us slightly more benefit than we got opening up the last cracker we did. You put that on an annual basis, that's fairly significant. And we can go to the next question.

是的，鮑伯。我認為我們之前為人們評估過這個規模，我們說 OCU，或者在這種情況下是合同，可能給我們帶來比我們上次打開餅乾廠更多的利益。如果以年度為基礎來計算，那麼這個數字相當可觀。我們可以進入下一個問題。

Jeff Zekauskas with JPMorgan.

摩根大通的 Jeff Zekauskas。

You spoke of your earnings in the first half this year being roughly flat with your earnings last year. What were your earnings last year in the first half?

您說今年上半年的收入與去年的收入大致持平。去年上半年你的收入是多少？

Jeff, again, I think if you look at our comments, I said that first half this year would be roughly equivalent to the second half of this year.

傑夫，我再說一次，如果你看我們的評論，我說今年上半年大致相當於今年下半年。

Forgive me.

對不起。

It's okay. I don't want to beat around a bush. We're trying to get away from quarterly guidance. We're trying to get people to think about us longer term. A lot of the things we're spending money on and projects have long-term payback, like Perennial Wood, microfibers, et cetera. So excuse me for taking your question to make this little point. While we gave some guidance about first half this year to second half next year, a lot of that's just based on the thought that maybe the economy's not going to slow down. And so maybe we'll get a little bit of a pick-up in the second half. Maybe fourth quarter won't be the typical down, such a down quarter for us, like it is so many other years. But again, it's pretty early in the year to try and be making these calls.

沒關係。我不想拐彎抹角。我們正試圖擺脫季度指引。我們試著讓人們從長遠角度考慮我們。我們花錢購買的很多東西和項目都有長期回報，例如多年生木材、超細纖維等等。所以請原諒我提出你的問題來闡明這一點。雖然我們對今年上半年到明年下半年給了一些指導，但許多指導只是基於經濟可能不會放緩的想法。因此，也許下半年我們會有所好轉。也許第四季不會像其他許多年一樣，出現典型的下滑，對我們來說不會出現這樣的下滑。但再次強調，現在嘗試進行這些呼籲還為時過早。

Okay. Will you generate much free cash flow this year?

好的。今年你會產生很多自由現金流嗎？

When I look at free cash flow expectations with our operating cash flow, we have some working capital programs we're trying to actually implement to actually improve our cash flow, to reduce capital expenditure. On legacy Eastman, the way I look at it right now, we'll probably generate in excess of $300 million in free cash flow. That's after CapEx and dividends.

當我將自由現金流預期與我們的營運現金流進行比較時，我們有一些營運資本計畫正在嘗試實際實施，以實際改善我們的現金流，減少資本支出。就伊士曼的遺留業務而言，就我現在的看法而言，我們可能會產生超過 3 億美元的自由現金流。這是扣除資本支出和股息之後的數據。

Thank you very much.

非常感謝。

Nils Wallin with CLSA.

里昂證券的 Nils Wallin。

On CASPI, you noted some weaknesses, volume weakness in polymers. Was that mainly in the auto side or in the packaging side? Just a little bit more color on that would be helpful. Thanks.

在 CASPI 上，您注意到了一些弱點，即聚合物的體積弱點。這主要是在汽車方面還是在包裝方面？只要再多一點顏色就會有幫助。謝謝。

When we think polymers, I think the weakness we're talking about is compared to last year. Last year we had price increases going up on April 1. And so we got some nice buying going on in March, as you might imagine, last year. So year-over-year comparison, tough comparison for our polymers there. In general, all of CASPI seems to be doing quite well here. I would say autos, if you look specifically to autos, where some of our polymers go in CASPI, some of the higher-margin stuff goes, North America looking pretty good but Asia and Europe in particular are soft. Longer term, again, though, what do you think? More cars being produced five years from now or fewer than this year?

當我們考慮聚合物時，我認為我們所談論的弱點是與去年相比的。去年我們從 4 月 1 日開始漲價。因此，正如您可能想像的那樣，去年 3 月我們的購買情況不錯。因此，與去年同期相比，我們的聚合物的比較很困難。總體而言，CASPI 似乎在這裡表現得相當不錯。我想說的是汽車，如果你特別關注汽車，我們的一些聚合物用於 CASPI，一些利潤率較高的產品用於汽車，北美看起來相當不錯，但亞洲和歐洲尤其疲軟。但是，從長遠來看，您怎麼看？五年後生產的汽車會比今年更多還是更少？

I think I can answer that one. In terms of Fibers, obviously price increases because of cost. But pulp, there's some expectation that pulp has hit a bottom here and is likely to go up. How do you feel about your cost position in Fibers and how much you're going to be able to raise price further this year to offset the rise in pulp?

我想我可以回答這個問題。就纖維而言，價格顯然會因成本而上漲。但紙漿，有人預計紙漿價格已經觸底，並且可能會上漲。您如何看待纖維部門的成本狀況？今年您能將價格提高多少來抵銷紙漿價格的上漲？

Just a little bit on the fibers market. Much of the marketplace is annual contracts and so we buy our pulp on a fixed price for a year. But we also commit to a price for most of our large customers for a year. Not completely, but in general that's the way that market is priced. So typically you have this big round of annual pricing in the winter. And at that time you usually have a good idea what your costs are. So you try and line those up. And what's Fibers got? Is this the ninth year of earnings, record earnings? So, so far we've been doing a pretty good job of lining those up.

僅介紹一點有關纖維市場的資訊。大部分市場都是年度合同，因此我們以一年的固定價格購買紙漿。但我們也對大多數大客戶承諾一年的價格。不完全是，但總體來說，市場定價就是如此。因此，通常冬季會進行這一輪大規模年度定價。那時您通常對自己的成本就有了清楚的了解。所以你嘗試將它們排列起來。那麼 Fibers 有什麼作用呢？這是連續第九年獲利，創下獲利紀錄嗎？所以，到目前為止，我們在安排這些方面做得相當不錯。

Great, thanks. And then just finally on PCI, obviously you noted some weakness in Asia-Pacific. Would you give us a little bit more color? I know 2EH has been coming down there, and certainly facing a tough comparison year-over-year. Is that where you're seeing some of the weakness or is it broad-based? Just a little bit more color on APAC in PCI, please.

太好了，謝謝。最後，關於 PCI，您顯然注意到了亞太地區的一些弱點。您能給我們多講一點嗎？我知道 2EH 的情況一直不佳，而且逐年面臨嚴峻的比較。您認為這是否是一些弱點，還是普遍存在的弱點？請在 PCI 中對 APAC 進行更多說明。

This is Ron. It is in our OXO Alcohols primarily. And keep in mind we are comparing on a year-over-year basis against a pretty strong market environment in 2011. So there's some contrast there that's part of the issue. But we saw weakening. Late last year there was quite a bit of destocking, a good bit of inventory coming into the year over there and looking for a home. And then we have not seen the rebound quite as robustly as we had hoped. And that is not just an Eastman comment, I think that's generally been seen across a lot of businesses. And so that's just turned into a weaker demand environment over there and that's depressed margins.

這是羅恩。它主要存在於我們的 OXO 醇中。請記住，我們正在與 2011 年相當強勁的市場環境進行同比比較。因此，存在一些對比，這是問題的一部分。但我們看到了減弱的跡象。去年年底，那裡出現了相當多的去庫存現象，大量庫存進入年內，正在尋找新的歸宿。然而，我們並沒有看到像我們所希望的那樣強勁的反彈。這不僅是伊士曼的評論，我認為很多企業都普遍存在這樣的情況。因此，那裡的需求環境變得更弱，利潤率也下降了。

Okay. Great. Got it. Thanks very much.

好的。偉大的。知道了。非常感謝。

Jeffrey Stafford with Morningstar.

晨星公司的傑弗瑞‧斯塔福德 (Jeffrey Stafford)。

We've heard commentary from a few other companies in terms of demand. January and February were pretty weak and then March was very strong. Did your business progress this way through the first quarter?

我們聽取了其他幾家公司關於需求的評論。一月和二月表現較弱，而三月則表現強勁。您的業務在第一季有這樣的進展嗎？

It did, but I don't know how much weight to put on that, honestly. That's a pretty typical pattern in a first quarter for our industry. So I personally am not going to play that up too much. But I know others have.

確實如此，但說實話，我不知道該對此給予多大的重視。這是我們產業第一季相當典型的模式。所以我個人不會過度強調這一點。但我知道其他人有。

Okay. And then just to clarify it, does the $5.30 EPS estimate, does that include Solutia or not?

好的。然後只是為了澄清一下，5.30 美元的每股盈餘估計是否包括 Solutia？

Yes, it does. If you build it up, we're basically reaffirming guidance. And that's $0.30 from the pension change and about $0.30 from Solutia.

是的。如果你建立它，我們基本上就是在重申指導。其中退休金變更部分為 0.30 美元，而 Solutia 部分為 0.30 美元。

Thank you very much. That's all I have.

非常感謝。這就是我所擁有的一切。

With no further questions in the queue, I'd now like to turn the call back over to the speakers for any additional or closing remarks.

由於沒有其他問題，現在我想將電話轉回給演講者，以便他們發表補充意見或結束語。

Thanks again, everyone, for joining us this morning. A web replay and a replay in downloadable MP3 format will be available on our website beginning at 9 AM on Monday. Have a great day.

再次感謝大家今天早上加入我們。網路重播和可下載的 MP3 格式重播將於週一上午 9 點在我們的網站上提供。祝你有美好的一天。

Ladies and gentlemen, that does conclude today's call. We thank you for your participation.

女士們、先生們，今天的電話會議到此結束。我們感謝您的參與。