伊士曼化學 (EMN) 2018 Q4 法說會逐字稿

Good day, everyone, and welcome to the Eastman Chemical Company Fourth Quarter Full Year 2018 Conference Call. Today's conference is being recorded. This call is being broadcast live on the Eastman's website, www.eastman.com.

大家好，歡迎參加伊士曼化學公司2018年第四季全年電話會議。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。

We will now turn the call over to Mr. Greg Riddle of Eastman Chemical Company Investor Relations. Please go ahead, sir.

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, Holly, 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 Jake LaRoe, Manager, Investor Relations.

好的，謝謝你，霍莉，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) 和投資者關係經理傑克·拉羅 (Jake LaRoe)。

Before we begin, I'll cover 2 items. First, during this presentation, you will hear certain forward-looking statements concerning our plans and expectations. 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 2018 financial news release, during this call and in the accompanying slides, and in our filings with the Securities and Exchange Commission, including the Form 10-Q filed for third quarter 2018 and the Form 10-K to be filed for full year 2018.

在我們開始之前，我將介紹兩件事。首先，在本次演示中，您將聽到有關我們的計劃和期望的一些前瞻性陳述。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 2018 年第四季度和全年財務新聞稿、本次電話會議和隨附幻燈片以及我們向美國證券交易委員會提交的文件中詳細說明，包括提交給 2018 年第三季度的 10-Q 表和即將提交給 2018 年全年的 10-K 表。

Second, earnings referenced in this presentation excludes certain noncore and unusual items. Reconciliations to the most directly comparable GAAP financial measures and other associated disclosures, including a description of the excluded and adjusted items, are available in the fourth quarter and full year 2018 financial results news release, which can be found on our website www.eastman.com in the Investors section. Projections of future earnings exclude any noncore, unusual or nonrecurring items.

其次，本報告中提到的收益不包括某些非核心和不尋常的項目。與最直接可比較的 GAAP 財務指標及其他相關披露的對賬，包括排除項目和調整項目的描述，均可在 2018 年第四季度和全年財務業績新聞稿中找到，該新聞稿可在我們網站 www.eastman.com 的“投資者”部分找到。未來收益預測不包括任何非核心、不尋常或非經常性項目。

And with that, I'll turn the call over to Mark.

說完這些，我會把電話轉給馬克。

Thanks, Greg. Good morning, everyone. I'll start on Page 3. Despite challenging short-term dynamics in the last few months of 2018, I'm proud of our accomplishments for the full year. We delivered 6% top line growth, driven by strong volume growth in our specialty businesses, with contributions from product lines across our portfolio.

謝謝，格雷格。大家早安。我將從第 3 頁開始。儘管 2018 年最後幾個月的短期動態充滿挑戰，但我對我們全年的成就感到自豪。我們實現了 6% 的營業額成長，這得益於我們專業業務的強勁銷售成長以及我們整個產品組合的產品線的貢獻。

We also made excellent progress converting our top innovation programs into commercial orders, with double-digit growth in 2018 in new business revenue from innovation, which I'll talk more about in a moment.

我們在將頂級創新項目轉化為商業訂單方面也取得了巨大進展，2018 年來自創新的新業務收入實現了兩位數增長，稍後我將詳細討論這一點。

Beyond creating our own growth, we're positioning ourselves for a long-term sustainable growth. We increased our growth investments by $50 million during the year, which includes 10 new plant startups last year, which is a record for us to support the robust growth in our specialties over the last several years.

除了創造我們自身的成長之外，我們還致力於實現長期永續成長。我們今年增加了 5,000 萬美元的成長投資，其中包括去年啟動的 10 家新工廠，這是我們在過去幾年中支持專業產品強勁成長的記錄。

We've talked about our larger expansions of Tritan, PVB, resins and Crystex on prior calls, and we also added smaller increments of capacity for products, including ketones and performance films.

我們在先前的電話會議上討論了 Tritan、PVB、樹脂和 Crystex 的大規模擴張，我們還增加了包括酮和性能薄膜在內的產品產能的小幅增量。

Our increase in growth spend also includes investments in capabilities to further strengthen our application development capability. And while we ramped up our growth programs, we also remained disciplined in our cost management to offset inflation.

我們的成長支出增加還包括對進一步加強我們的應用程式開發能力的投資。在我們加強成長計畫的同時，我們也嚴格控製成本管理以抵銷通貨膨脹。

Our cash engine generated approximately $1.1 billion of free cash flow for the year, about a 10% yield. And we've put that cash to work, returning $718 million to stockholders through a combination of share repurchases and an increasing dividend, with 2018 representing the ninth consecutive year we have raised our dividend.

我們的現金引擎今年產生了約 11 億美元的自由現金流，收益率約為 10%。我們已將這些現金投入使用，透過股票回購和增加股利等方式向股東返還了 7.18 億美元，2018 年是我們連續第九年提高股利。

In this current environment, we continue to execute on what we can control, namely, innovating through our enterprise, managing costs and allocating our strong free cash flow in a disciplined manner. And we see strong evidence that these core elements are working despite the significant macroeconomic challenges we faced in Q4.

在當前環境下，我們將繼續執行我們能夠控制的事情，即透過我們的企業進行創新，管理成本並以規範的方式分配我們強勁的自由現金流。儘管我們在第四季度面臨重大的宏觀經濟挑戰，但我們看到了強有力的證據表明這些核心要素正在發揮作用。

On Slide 4, key driver of our success, as I mentioned, is our ability to convert our top innovation programs into commercial orders. I'm pleased to report that we're seeing exciting progress across the portfolio with $365 million of new business revenue from innovation in 2018, growth that continued through the fourth quarter.

在投影片 4 中，正如我所提到的，我們成功的關鍵驅動力是我們將頂級創新計畫轉化為商業訂單的能力。我很高興地報告，我們看到整個投資組合都取得了令人興奮的進展，2018 年創新帶來的新業務收入為 3.65 億美元，這種成長態勢一直持續到第四季。

Here are just a few examples. In AM, we delivered 7% volume growth in Tritan. This was underpinned by continued growth across a diverse set of end markets and double-digit growth in China despite the headwinds from the trade dispute.

這只是幾個例子。在 AM 領域，我們的 Tritan 銷量成長了 7%。儘管面臨貿易爭端的阻力，但多元化終端市場仍持續成長，中國市場也保持兩位數成長，這為其提供了支撐。

In performance films, we, once again, delivered double-digit volume growth in our 2 largest markets for window films, North America and China. We also continued to build momentum in paint protection film with the launch of 2 next-generation products. Also, in AM, our interlayer business continued to benefit from our innovations in automotive with our products in heads-up display growing at 25% in 2018. At the same time, we are building momentum in architectural with our general programs and the launch of a new structural product called Saflex TG and saw very strong growth, particularly in Europe in the architectural business.

在高性能薄膜方面，我們在兩大窗膜市場——北美和中國——再次實現了兩位數的銷售成長。我們也推出了兩款新一代產品，持續增強漆面保護膜領域的發展動能。此外，在 AM 領域，我們的中間層業務繼續受益於我們在汽車領域的創新，我們的平視顯示器產品在 2018 年成長了 25%。同時，我們透過常規項目和名為 Saflex TG 的新結構產品的推出，在建築領域建立了發展勢頭，並實現了非常強勁的成長，尤其是在歐洲的建築業務。

In AFP, strong adoption by more than 10 customers were next-generation Crystex Cure Pro, the newest innovation in insoluble sulfur. With this vulcanizing agent, tire manufacturers can improve productivity, achieve better operational control and realize cost savings.

在法新社，超過 10 家客戶大力採用了新一代 Crystex Cure Pro，這是不溶性硫磺領域的最新創新產品。使用這種硫化劑，輪胎製造商可以提高生產力，實現更好的操作控制並節省成本。

In Care Chemicals, we achieved a 12% volume growth in our water treatment business over 2017, as municipalities around the world adopt global treatment standards, especially in China.

在護理化學品方面，隨著世界各地的城市（尤其是中國）採用全球處理標準，我們的水處理業務量比 2017 年實現了 12% 的成長。

Finally, in Fibers, we continued to accelerate our growth in textiles, with 30% growth led by our new product line called Naia. These, and many other examples of new business revenue growth from innovation, give me confidence that we can be resilient even in an uncertain business environment.

最後，在纖維方面，我們繼續加速紡織品的成長，其中 30% 的成長由我們的新產品系列 Naia 帶動。這些以及許多其他透過創新實現新業務收入成長的例子讓我相信，即使在不確定的商業環境中，我們也能保持韌性。

In 2019, we expect to deliver another double-digit increase in new business revenue closes from innovation and are on track to generate approximately $500 million of new business revenue from innovation in 2020.

2019 年，我們預計創新帶來的新業務收入將再次實現兩位數成長，並預計在 2020 年透過創新創造約 5 億美元的新業務收入。

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

說完這些，我會把話題交給 Curt。

Thanks, Mark, and good morning, everyone. Thanks for spending some time with us today. I'm going to start off with a few comments on our full year 2018 performance on Slide 5. And given the current business environment, it's important to remember that through 9 months, we were delivering strong results consistent with our long-term strategy discussed last year at our Innovation Day.

謝謝，馬克，大家早安。感謝您今天抽出時間與我們在一起。我首先要對幻燈片 5 上的 2018 年全年業績發表一些評論。鑑於當前的商業環境，重要的是要記住，在過去 9 個月中，我們取得了強勁的業績，這與去年創新日討論的長期策略一致。

In the first 9 months, our revenue was up 8%, our EBIT was up 6% and our earnings per share was up 13%. And we were delivering these results despite $240 million of higher raw material and distribution cost, historically low spot ethylene prices and higher costs resulting from increased growth investments, and the industrial gas supplier disruptions in Texas.

在前 9 個月，我們的收入成長了 8%，息稅前利潤成長了 6%，每股盈餘成長了 13%。儘管原材料和分銷成本增加了 2.4 億美元、乙烯現貨價格處於歷史低點、成長投資增加導致成本上升，以及德州工業氣體供應商中斷，我們仍然取得了這些業績。

Key to this performance was volume growth and mix improvement in our specialty products, successful price improvements relative to raws through the third quarter, strong cash generation and a weaker U.S. dollar.

這項業績表現的關鍵在於我們的特色產品銷售成長和產品組合改善、第三季相對於原料產品的成功價格改善、強勁的現金產生以及美元走弱。

As the third quarter ended, the business environment became more challenging, as all of you know. We felt this in our fourth quarter through inventory destocking that was beyond normal seasonality, and we attribute this mainly to the U.S.-China trade issues. Plus, we saw some additional destocking in other markets given the rapid drop in oil prices and related raw materials.

眾所周知，隨著第三季的結束，商業環境變得更具挑戰性。我們在第四季度感受到了這一點，庫存去化超出了正常的季節性，我們將其主要歸因於中美貿易問題。此外，由於油價和相關原物料價格的快速下跌，我們看到其他市場也出現了一些額外的去庫存現象。

On the destocking, we believe that the amount occurring above normal seasonality is largely in China where we mostly sell specialty products, which, therefore, drives a negative earnings mix shift.

關於去庫存，我們認為，超出正常季節性的去庫存量主要發生在中國，我們主要在中國銷售特色產品，因此導致獲利組合出現負面轉變。

And given a large drop in Brent beginning in October, we had a harder time raising our prices, but we still had $90 million of higher raw material and distribution costs year-over-year due to the third quarter flowing through our inventories. The result is that our fourth quarter results were more challenged than we were expecting, especially as the quarter progressed. With that said, given what we know today, we expect the issues we faced in the fourth quarter will get progressively better in 2019. And we're already seeing evidence of improving order patterns sequentially into the first quarter.

由於布蘭特原油價格自 10 月開始大幅下跌，我們提高價格的難度加大，但由於第三季庫存的流出，我們的原材料和分銷成本比去年同期仍然增加了 9,000 萬美元。結果是，我們的第四季業績比我們預期的更具挑戰性，尤其是隨著本季的進展。話雖如此，根據我們今天所了解的情況，我們預計第四季度面臨的問題將在 2019 年逐步改善。我們已經看到第一季訂單模式逐步改善的證據。

Now on Slide 6, I'll start segment results with Advanced Materials, which showed strong volume growth and mix growth in our premium specialty products through the first 9 months of 2018, offset by some short-term dynamics in the fourth quarter.

現在在第 6 張投影片上，我將首先介紹先進材料部門的分部業績，2018 年前 9 個月，我們的優質特種產品的銷量和組合均呈現強勁增長，但第四季度的一些短期動態有所抵消。

Looking at the full year, sales revenue increased 7% primarily due to higher sales volume and improved mix across the segment. Full year EBIT increased due to higher sales volume and improved product mix, partially offset by higher raw material costs, particularly for paraxylene in the last 4 months of the year and growth investments of approximately $25 million for the full year.

縱觀全年，銷售收入成長了 7%，主要原因是銷售量增加和整個部門產品組合改善。全年息稅前利潤的增長得益於銷售量的增加和產品組合的改善，但部分被原材料成本的上漲所抵消，特別是今年最後 4 個月對二甲苯的成本上漲以及全年約 2500 萬美元的增長投資。

In the fourth quarter, sales revenue decreased mostly due to customer inventory stocking in specialty plastics as a result of economic uncertainty created by the U.S.-China trade dispute. EBIT decreased due to lower sales volume and higher raw material costs, partially offset by improved product mix, which was less than normal due to customer inventory destocking in China.

第四季銷售收入下降主要是由於中美貿易爭端造成的經濟不確定性導致客戶囤積特種塑膠庫存。息稅前利潤的下降是由於銷售量下降和原材料成本上升，但被產品組合改善所部分抵消，由於中國客戶庫存減少，產品組合改善幅度低於正常水平。

Despite volume declining at the segment level in the fourth quarter, Advanced Materials grew volume and mix in performance films and advanced interlayers in both the auto and architectural markets. In auto, both interlayers and performance films grew faster than the global auto market due to their breadth of innovation products.

儘管第四季度該細分市場的銷量有所下降，但先進材料在汽車和建築市場的高性能薄膜和先進中間層的銷售和產品組合均有所增長。在汽車領域，由於創新產品的廣度，中間膜和性能膜的成長速度都快於全球汽車市場。

And in the architecture market, which now represents just under 50% of the interlayer sales, we're seeing strong growth, particularly in Europe as we benefit from trends towards more windows in commercial architecture, trends we are well positioned to serve.

在建築市場中，目前該市場佔夾層銷售額的近 50%，我們看到了強勁的成長勢頭，特別是在歐洲，因為我們受益於商業建築中窗戶增多的趨勢，我們已做好準備去滿足這一趨勢。

Looking ahead to the full year of 2019, we expect strong growth. While orders in January have improved sequentially, we expect some inventory destocking to persist in the first quarter, impacting our specialty plastics business. We also expect higher cost in paraxylene to flow through inventory, temporarily impacting margins in the first quarter. And we will not face the same step-up in growth cost as a headwind coming into 2019.

展望2019年全年，我們預期成長強勁。雖然一月份的訂單量環比有所改善，但我們預計第一季部分庫存去庫存現象仍將持續，從而對我們的特種塑膠業務產生影響。我們也預期對二甲苯成本的上升將流入庫存，暫時影響第一季的利潤率。進入2019年，我們將不再面臨成長成本上升的逆風。

As those issues moderate, we expect Advanced Materials to return to robust growth in the final 3 quarters of the year. Putting it altogether, we anticipate Advanced Materials EBIT growth to be at the high end of the 7% to 10% provided at the Innovation Day range for 2019.

隨著這些問題的緩和，我們預計先進材料將在今年最後三個季度恢復強勁成長。綜合起來，我們預計先進材料公司的息稅前利潤增長率將達到創新日提出的 2019 年 7% 至 10% 的高端。

Turning now to Slide 7, Additives & Functional Products. For the full year, sales for Additives & Functional Products revenue increased 9% primarily due to higher sales volume, higher selling prices and a favorable shift in foreign currency exchange rates. Higher sales volume was attributed to strong volume growth in Care Chemicals, coatings additives, animal nutrition and tire additives.

現在轉到幻燈片 7，添加劑和功能產品。全年來看，添加劑和功能產品銷售額成長了 9%，這主要得益於銷售量增加、銷售價格上漲以及外匯匯率的有利轉變。銷售額的成長歸因於護理化學品、塗料添加劑、動物營養和輪胎添加劑的強勁成長。

Full year EBIT increased due to higher sales volume and a favorable shift in foreign currency exchange rates, partially offset by increased growth investments of approximately $20 million.

全年息稅前利潤的增長是由於銷售量增加和外匯匯率的有利轉變，但約 2000 萬美元的成長投資部分抵消了這一增長。

For the fourth quarter, sales revenue was flat, as higher selling prices were offset by an unfavorable shift in foreign currency exchange rates. EBIT declined as higher prices were more than offset by higher raw material, energy and distribution costs. The decline in EBIT in the fourth quarter, which offset strong earnings growth through the first 9 months of the year, was due to a few factors that played out simultaneously. First, destocking in coatings and tires within China and Europe weighed on product mix, as these products have higher margins relative to the segment average. Second, competitive dynamics in adhesives continued to limit upside in pricing, while higher oil-based raw material costs flowed through our inventory from the third quarter. And third, higher growth investments and the impact of lower capacity utilization.

第四季度，銷售收入持平，因為銷售價格上漲被外匯匯率的不利變動所抵銷。由於原材料、能源和分銷成本的上漲超過了價格上漲的幅度，因此息稅前利潤有所下降。第四季度息稅前利潤的下降抵消了今年前 9 個月的強勁盈利增長，這是由幾個同時發生的因素造成的。首先，中國和歐洲的塗料和輪胎去庫存對產品結構產生了壓力，因為這些產品的利潤率相對於行業平均水平較高。其次，黏合劑的競爭態勢持續限制價格上漲，而從第三季開始，石油基原料成本的上升流入我們的庫存。第三，成長投資增加和產能利用率降低的影響。

Looking ahead to 2019, we expect higher raw material costs to continue to work their way through inventory in the first quarter. While we see a pickup in orders, we still expect some destocking in tires and coatings to continue in the first quarter. For the balance of the year, we expect to return to growth as raw materials become a tailwind, destocking plays out and we don't expect the same cost headwinds as last year. All in, we anticipate Additives & Functional Products to grow EBIT at the low end of the 5% to 7% range provided at Innovation Day.

展望2019年，我們預期原物料成本上漲將在第一季持續對庫存產生影響。儘管我們看到訂單有所回升，但我們仍預計第一季輪胎和塗料的去庫存現象仍將持續。就今年餘下時間而言，我們預計經濟將恢復成長，因為原材料成為順風，去庫存化正在發揮作用，我們預計不會出現與去年相同的成本逆風。總體而言，我們預計添加劑和功能產品的息稅前利潤成長率將在創新日提供的 5% 至 7% 範圍的低端。

Next to Slide 8 in Chemical Intermediates, which overcame numerous challenges in 2018. For the full year, sales revenue increased as higher selling prices across the segment were partially offset by lower sales volume due to the actions we took to mitigate historically low spot ethylene prices.

接下來是化學中間體第 8 張投影片，在 2018 年克服了許多挑戰。就全年而言，銷售收入有所增長，因為我們採取措施緩解歷史最低的現貨乙烯價格，導致整個部門的銷售價格上漲，但被銷量下降部分抵消。

Full year EBIT declined as an improvement in spread in our derivatives was more than offset by headwinds from merchant ethylene. In the fourth quarter, sales revenue increased mostly due to increased selling prices, partially offset by lower sales volume attributed to merchant ethylene.

由於衍生性商品利差的改善被來自乙烯貿易的不利因素所抵消，全年息稅前利潤有所下降。第四季銷售收入的成長主要由於銷售價格的上漲，但部分被商用乙烯導致的銷售量下降所抵銷。

EBIT declined due to higher raw material, energy and distribution costs, partially offset by higher selling prices. Volatile raw materials had an impact in the quarter, as higher costs were still flowing through inventory, while market prices for raw materials dropped rapidly, creating a short-term disconnect between costs and pricing.

息稅前利潤下降是由於原材料、能源和分銷成本的增加，但被銷售價格的上漲部分抵消。原物料波動對本季產生了影響，因為較高的成本仍在透過庫存流動，而原物料的市場價格卻迅速下跌，導致成本和定價之間出現短期脫節。

For the full year, we expect a couple of headwinds will not repeat in 2019: first, we've largely mitigated the merchant ethylene headwind with the completion of our RGP project; and second, we do not expect to have a large industrial gas supplier outages repeat in 2019.

就全年而言，我們預計 2019 年不會重演幾個不利因素：首先，隨著 RGP 專案的完成，我們已在很大程度上緩解了商用乙烯的不利因素；其次，我們預計 2019 年不會重演大型工業氣體供應商停產的情況。

The lack of these headwinds when netted with some expected softening in acetyls and in some olefin derivative products in 2019 lead us to expect 2019 Chemical Intermediates EBIT to be similar with 2018.

由於缺乏這些不利因素，加上 2019 年乙醯基和一些烯烴衍生產品預期會有所疲軟，我們預期 2019 年化學中間體的息稅前利潤將與 2018 年相似。

Finishing up with the segment reviews on Slide 9 with Fibers. Looking at the full year, sales revenue increased due to higher sales volume primarily due to continued growth in the textiles innovation products and nonwoven products previously reported in Other. Textiles volume growth was 30% in 2018. The sustained volume growth of these products is a great story, demonstrating how these product lines are contributing to stability in this segment.

使用 Fibers 完成投影片 9 上的分段評論。縱觀全年，銷售收入因銷售量增加而增加，這主要得益於先前在其他業務中報告的紡織創新產品和非織造產品的持續增長。2018年紡織品產量增加了30%。這些產品的銷售持續成長是一個偉大的故事，展示了這些產品線如何為該領域的穩定做出貢獻。

EBIT declined as lower acetate tow selling prices were partially offset by higher textile innovation product volumes.

息稅前利潤有所下降，因為醋酸纖維絲束銷售價格的下降被紡織創新產品銷售的增加部分抵消。

Total volumes were relatively flat for the year. In the fourth quarter, sales revenue increased due to continued strong volume growth in textiles innovation products and higher sales volumes primarily to nonwoven innovation products previously reported in Other.

全年總量相對持平。第四季度，銷售收入成長得益於紡織創新產品銷售持續強勁成長，以及先前在其他部門報告的主要非織造創新產品銷售量增加。

EBIT declined due to lower capacity utilization related to year-end inventory destocking in the quarter.

息稅前利潤下降是由於本季年末庫存減少導致產能利用率下降。

Now a few comments on 2019. First, we have fairly good line of sight into customer order patterns in this business. We are also now qualified to ship into China from our tow plant in Korea, mitigating some of the impact we discussed last quarter associated with shipping tow into China from the U.S. We expect stability in 2019 as we continue to stabilize to tow and benefit from strong textiles volume growth that builds throughout the year, which offsets the gradual decline in the tow market. But different from past year is that first quarter is expected to be the lowest quarter for tow due to customer buying patterns, partially attributed to rebuilding imports into China and a few other customers. All in, we expect EBIT to be about the same in 2019 compared with 2018.

現在就 2019 年發表一些評論。首先，我們對這個行業的客戶訂單模式有相當好的了解。我們現在也有資格從位於韓國的絲束工廠向中國發貨，從而減輕了我們上個季度討論過的與從美國向中國運送絲束相關的一些影響。我們預計 2019 年將保持穩定，因為我們將繼續穩定絲束市場，並受益於全年強勁的紡織品產量成長，這抵消了絲束市場的逐步下滑。但與去年不同的是，由於客戶購買模式的原因，預計第一季將是拖車銷售最低的季度，部分原因是中國和其他一些客戶重新開始進口。整體而言，我們預計 2019 年的息稅前利潤將與 2018 年大致相同。

On Slide 10, I'll transition to some corporate financial highlights. Cash from operating activities was over $1.5 billion, and free cash flow came in close to target at approximately $1.1 billion. We continued to demonstrate our ability to convert earnings into cash and manage our working capital. The Eastman team knows the value of converting earnings into cash, especially our BA credit and cash management teams. As a result, our free cash flow conversion was over 92% in 2018.

在第 10 張投影片上，我將介紹一些公司財務亮點。經營活動現金流超過 15 億美元，自由現金流接近目標，約 11 億美元。我們繼續展示將收益轉化為現金和管理營運資金的能力。伊士曼團隊深知將收益轉化為現金的價值，尤其是我們的 BA 信貸和現金管理團隊。因此，2018 年我們的自由現金流轉換率超過 92%。

We returned $718 million to stockholders in 2018 through share purchases and dividends, and I'm proud to say that we've increased our dividend for the ninth consecutive year. Our full year 2018 effective tax rate improved to 16% from our previous outlook as we got better clarity on the impact from the tax reform act.

2018 年，我們透過股票購買和股息向股東返還了 7.18 億美元，我很自豪地說，我們已經連續第九年增加股息。由於我們更清楚了解稅改法案的影響，我們 2018 年全年有效稅率較先前的預測提高至 16%。

Looking into 2019, I expect our effective tax rate to be between 16% and 17%, and we'll work hard to have that towards the bottom end of that range. I expect our free cash flow to be greater than $1.1 billion in 2019. We'll remain disciplined with our use of cash across the various buckets. I expect a growing dividend, debt repayment, but to be a little lesser extent than 2018, and share repurchases in absence of bolt-on acquisitions. And I'll remind you, we should always expect that we'll fully deploy our cash.

展望 2019 年，我預計我們的有效稅率將在 16% 至 17% 之間，我們將努力將其控制在該範圍的底端。我預計 2019 年我們的自由現金流將超過 11 億美元。我們將嚴格控制各類現金的使用。我預期股利和債務償還都會增加，但幅度會比 2018 年略低，而且在沒有附加收購的情況下還會進行股票回購。我要提醒你們，我們應該始終期望我們能夠充分利用我們的現金。

Finally, don't miss the modeling slide in the appendix of this slide deck to further help you in your analysis.

最後，不要錯過此投影片附錄中的建模投影片，它可進一步幫助您進行分析。

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

說完這些，我會把話題交還給馬克。

Thanks, Curt. On Slide 11, I'll discuss our outlook for 2019. We have a number of growth drivers as we enter the year. As I mentioned earlier, we're doing a great job of driving new business revenue as we leverage our innovation-driven growth model. Results in our specialty is growing faster than our end markets, and we expect new business revenue from innovation will increase to greater than $400 million this year.

謝謝，Curt。在第 11 張投影片上，我將討論我們對 2019 年的展望。進入新的一年，我們擁有許多成長動力。正如我之前提到的，我們利用創新驅動的成長模式，在推動新業務收入方面做得非常出色。我們專業領域的業績成長速度快於終端市場，我們預計今年創新帶來的新業務收入將增加至 4 億美元以上。

We're also taking a more aggressive approach to cost management to hold manufacturing costs flat, offsetting not just inflation, but also the annualized effect of growth investments this year and a much higher shutdown schedule. This is different than 2018 relative to 2017, when we had a roughly $125 million headwind comprised of growth investments, the industrial gas outages and the ethylene headwind, which we have now neutralized through the RGP investment.

我們還採取了更積極的成本管理方法，以保持製造成本平穩，不僅抵消通貨膨脹，還抵消了今年成長投資的年化效應和更高的停工計劃。這與 2018 年和 2017 年的情況不同，當時我們面臨約 1.25 億美元的逆風，包括成長投資、工業天然氣中斷和乙烯逆風，現在我們已透過 RGP 投資抵消了這些逆風。

We're also chasing increasing raw material costs, especially in the back half of the year. In 2019, we're also managing a few headwinds. As we've mentioned, we expect global growth to be slower this year due to China trade issues and the European economy slowdown with Brexit and other concerns.

我們也正在追逐不斷上漲的原物料成本，尤其是在今年下半年。2019 年，我們也面臨一些阻力。正如我們所提到的，我們預計今年全球經濟成長將會放緩，原因是中國貿易問題以及英國脫歐和其他問題導致的歐洲經濟放緩。

On the U.S. trade dispute, we're not expecting it to get better or worse from the current situation in our guidance. We are projecting that dollar-euro exchange rates remain about where it is through the end of the year, and this will be about a net $25 million headwind, with about half of it in the first quarter. And we're expecting pension expenses to also be about a $25 million headwind for the year.

關於美國貿易爭端，我們預期其情況不會比我們預期的當前情況變得更好或更壞。我們預計，到今年年底，美元兌歐元的匯率將維持在目前的水平，這將帶來約 2,500 萬美元的淨逆風，其中約一半將出現在第一季。我們預計今年的退休金支出也將帶來約 2,500 萬美元的逆差。

On spreads, we expect higher-cost raw materials to continue to flow through until about the end of the first quarter. After that, we expect to benefit from the flow-through of lower raw material costs.

就利差而言，我們預計高成本原料的流入將持續到第一季末左右。此後，我們預計將從原材料成本降低中受益。

So putting all of this together, we expect that EPS will grow between 6% and 10% for the year. And given what we know today, growth will likely be towards the bottom end of this range.

綜合考慮所有這些因素，我們預計今年的每股收益將成長 6% 至 10%。根據我們目前所知，成長可能會接近這一範圍的底端。

You will recall that our Innovation Day in February of last year, our long-term EPS growth projection was in the range of 8% to 12%. The difference between the midpoint of our long-term range and the range I just gave you for 2019 is primarily due to the lower expected earnings in the first quarter due to raw material flow-through and the destocking playing out and the substantial currency headwind we face.

您會記得，我們​​去年 2 月的創新日，我們的長期每股盈餘成長預測在 8% 至 12% 之間。我們的長期範圍中點與我剛才給出的 2019 年範圍之間的差異主要是由於原材料流出、去庫存化以及我們面臨的巨大貨幣逆風導致第一季預期收益較低。

One other comment on the first quarter is that although we are expecting EPS to be down year-over-year, we're expecting strong improvement sequentially and indicated that the headwinds are lessening.

關於第一季的另一條評論是，儘管我們預計每股收益將同比下降，但我們預計環比將出現強勁改善，並表示阻力正在減弱。

Lastly, I would add that there is, obviously, some uncertainty around all these assumptions we've made for the year, and so we'll know more as we go through the first quarter.

最後，我想補充一點，我們對今年做出的所有假設顯然都存在一些不確定性，因此，隨著第一季的到來，我們會了解更多。

Finally, let me bring everything together. On Slide 12, what you see is our innovation-driven growth model, which we first discussed with you at the Innovation Day last February, and I've referenced a number of times this morning. This model is central to our winning strategy, and given the progress that we've made, we're confident that we're on track.

最後，讓我把所有內容匯總起來。在第 12 張投影片上，大家看到的是我們的創新驅動型成長模式，我們去年 2 月在創新日上首次與大家討論過這個模式，今天上午我也多次提到。這個模型是我們制勝策略的核心，鑑於我們已經取得的進展，我們有信心我們正走在正確的軌道上。

The headwinds we faced in the fourth quarter and that we see right now looking forward are transitory. And even in this uncertain global business environment, we're poised to deliver resilient results with solid EPS growth and a strong cash flow generation.

我們在第四季面臨的阻力以及我們現在看到的阻力都是暫時的。即使在這種不確定的全球商業環境中，我們也準備好透過穩健的每股盈餘成長和強勁的現金流創造來實現穩健的業績。

As you look past the first quarter, we will be back on track for a long-term EPS guidance range of 8% to 12%. As we look forward, given the progress that we've made and the commitment that I see from the Eastman employees around the world, I'm more confident than ever in our future today and I look forward to creating a lot of value for shareholders, both in earnings growth and cash flow.

回顧第一季度，我們將重回 8% 至 12% 的長期每股盈餘指引範圍。展望未來，鑑於我們已經取得的進步以及我看到的來自世界各地伊士曼員工的承諾，我對我們的未來比以往任何時候都更有信心，我期待著在盈利增長和現金流方面為股東創造巨大的價值。

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。

All right. Thanks, Mark. As usual, we'd like to get to as many questions as possible this morning, so I ask that you limit yourself to one question and one follow-up.

好的。謝謝，馬克。像往常一樣，我們希望今天早上能回答盡可能多的問題，因此我要求您將問題限制在一個問題和一個後續問題上。

With that, Holly, we are ready for questions.

霍莉，我們已經準備好回答問題了。

(Operator Instructions) We will now take our first question from David Begleiter from Deutsche Bank.

（操作員指示）現在我們將回答德意志銀行的 David Begleiter 提出的第一個問題。

Mark, just on the guidance, understanding the lower end of the range bias, what are the range of outcomes that could actually result in either guidance being at the very top end or at the very low end of the guidance range?

馬克，僅就指導而言，了解範圍偏差的下限，哪些結果範圍實際上可能導致指導處於指導範圍的最高端或最低端？

Sure. David, so there's, obviously, a lot of uncertainty right now as we sit here in January looking forward, especially on whether or not the trade dispute gets resolved, what happens in the European economy. And so the real wildcards here are the macroeconomics. From what we can control point of view, I have a lot of confidence in innovation that we're delivering, our ability to grow fast in the markets. We've already shown even through the fourth quarter where we have innovation in interlayers, performance films. For example, we grew much positively, both in volume and mix relative to a down market. So we feel that growth engines are intact, but there's just a macroeconomic uncertainty. So if the trade war gets completely resolved, that's going to be upside for us. If Europe doesn't have the headwinds people were concerned about, upside for us relative to our forecast. And obviously, if the reverse happens, that's where the downside occurs.

當然。大衛，顯然，當我們坐在這裡展望一月份時，現在存在著許多不確定性，尤其是貿易爭端是否能得到解決，歐洲經濟將會發生什麼。因此，這裡真正的不確定因素是宏觀經濟學。從我們能夠控制的角度來看，我對我們正在進行的創新以及我們在市場上快速發展的能力充滿信心。甚至到了第四季度，我們已經展示了我們在夾層、性能薄膜方面的創新。例如，相對於低迷的市場，我們的銷售和產品組合都實現了大幅成長。因此，我們認為成長引擎完好無損，但存在宏觀經濟不確定性。因此，如果貿易戰得到徹底解決，對我們來說將是一個好處。如果歐洲沒有遭遇人們所擔心的不利因素，那麼相對於我們的預測，歐洲將會有上行空間。顯然，如果情況相反，就會出現不利的情況。

And, Mark, just in Advanced Materials, the 2% decline in volume in that segment. Can you talk about what volume was tracking until destocking and the world slowed? Was it a normalized number perhaps in October and early November?

馬克，僅在先進材料領域，該領域的銷量就下降了 2%。您能談談在去庫存和全球經濟放緩之前交易量的情況嗎？十月份和十一月初的數字是否已經標準化了？

Yes. So the demand pattern there is -- it's important to separate things out. So performance films and interlayers had a really good fourth quarter. So they continued to deliver good volume and mix growth. The auto business, even though it was challenging, especially in China, we still delivered growth. And the architectural market also very strong, where our interlayers go into light laminated glass, especially in Europe, growing much faster than the underlying market because buildings are moving to a lot more glass on the facade. So we get a lift well above actual construction rate. So real challenge sat in specialty plastics, David, and it was principally in China for them. When you think about a lot of our specialty plastics business, it is principally products we sell that are made into consumer durables that are then sent back to the U.S. and Europe. So heavily export driven from China to the U.S. So those customers were worried about where the trade war was headed. Because they didn't think they could handle the 25% increase on January 1, they started aggressively destocking and really taking inventories down to almost 0 and would only order raws when they received an order from their own customers. So that really was the story on the demand decline. And that has a pretty significant mix effect for us on a regional and product basis because it's important to remember that in China, we only sell our high-value specialties for AM and AFP, the lower-value chemical intermediate products are almost entirely in North America. So when you have a slowdown in China, it really comes with a negative mix effect.

是的。因此，存在的需求模式－將事物分開很重要。因此，性能薄膜和夾層在第四季度表現非常好。因此他們繼續實現良好的銷售和組合成長。汽車業務儘管充滿挑戰，尤其是在中國，我們仍然實現了成長。建築市場也非常強勁，我們的中間膜應用於輕型夾層玻璃，特別是在歐洲，其成長速度遠遠快於基礎市場，因為建築物的外牆越來越多地採用玻璃。因此，我們獲得的升力遠高於實際建設率。因此，真正的挑戰在於特種塑料，大衛，對他們來說，主要在中國。當您考慮我們的許多特殊塑膠業務時，您會發現，我們銷售的產品主要被製成耐用消費品，然後運回美國和歐洲。中國對美國的出口量非常大。因此，這些客戶擔心貿易戰的走向。因為他們認為自己無法承受 1 月 1 日 25% 的漲幅，所以他們開始積極去庫存，將庫存降至幾乎 0，並且只有在收到自己客戶的訂單時才會訂購原材料。這就是需求下降的真相。這對於我們在區域和產品方面具有相當顯著的混合效應，因為重要的是要記住，在中國，我們只銷售用於 AM 和 AFP 的高價值特種產品，而低價值化學中間產品幾乎全部在北美。因此，當中國經濟放緩時，確實會帶來負面的綜合效應。

We will now take our next question from Frank Mitsch from Fermium Research.

我們現在來回答來自 Fermium Research 的 Frank Mitsch 提出的下一個問題。

And thanks for the color on the outlook. I just want to get a little more granular in terms of your expectation, since you have such a large business over in Asia and in China that impacts 3 of your 4 segments. What are you baking in, in terms of an expectation post Chinese New Year in terms of volumes coming back? Are you expecting any kind of a normal bounce back, higher bounce back, lower bounce back? What is embedded in your estimates?

感謝您為前景增添色彩。我只是想更詳細地了解一下您的預期，因為您在亞洲和中國的業務規模如此之大，影響到您四個細分市場中的三個。您對農曆新年之後的銷售恢復情況有何預期？您是否預期會出現正常的反彈、較高的反彈、較低的反彈？您的估算包含了什麼？

Well, I think they're yet to break it down into a couple of different components. So I'm going to deal with the destocking part first and then I'll talk about primary demand. So on the destocking side, if you think about what I just said in the last question, that destocking is actually playing itself out fairly well, and we have line of sight that, that will be completed by the end of the first quarter in specialty plastics. Same thing is true in AFP, where we see destocking should play out by the end of the first quarter. So that, I think, is something you can see coming to an end. The primary demand question really is about the Chinese consumers. And AFP really has more sort of Chinese consumer exposure than AM does when it comes to the demand question because their products have a tendency to stay more in China. And what you have is Chinese consumers are worried about their economy. The government was already slowing the economy down in the first half of '18. And the trade issue was a trip-wire that really made people nervous, especially businesses about what's going to happen going forward. So you see people holding back on high-ticket items. That's why you see the car sales down in the back half of last year, as you can all see. Same is true for appliances or any other high-ticket item. And so people are being conservative. My personal opinion is if the trade war doesn't escalate further, that fear subsides, things are going to be viewed as more stable, and we will expect some demand recovery, but modest. If the trade war gets settled, then I think you could see a more material restocking event than what we have in our forecast.

嗯，我認為他們還沒有把它分解成幾個不同的部分。因此，我將首先討論去庫存部分，然後再討論主要需求。因此，在去庫存方面，如果你思考一下我在上一個問題中所說的內容，你會發現去庫存實際上進展得相當順利，而且我們預計特種塑膠行業的去庫存將在第一季末完成。法新社的情況也是如此，我們認為去庫存化將在第一季末完成。所以，我認為，這是可以預見的事情。主要的需求問題其實是關於中國消費者的。在需求問題上，AFP 確實比 AM 更了解中國消費者，因為他們的產品更傾向於留在中國。而事實是，中國消費者對他們的經濟感到擔憂。政府在 2018 年上半年就已經開始放緩經濟發展。貿易問題是一個絆腳石，確實讓人們，尤其是企業，對未來將會發生什麼感到緊張。所以你會看到人們對高價商品有所保留。這就是為什麼你們看到去年下半年汽車銷售下降的原因。對於家用電器或任何其他高價商品也是如此。因此人們變得保守。我個人的觀點是，如果貿易戰不再進一步升級，恐懼消退，情況將被視為更加穩定，我們預期需求將有所復甦，但幅度不大。如果貿易戰得到解決，那麼我認為你可能會看到比我們預測的更實質的補貨事件。

All right. That's very helpful. A question -- and a follow-up for Curt. Obviously, you did a nice job in reducing debt throughout 2018, I guess, partly at the expense of buybacks being slow during the fourth quarter. How should we think about Eastman and buybacks in 2019?

好的。這非常有幫助。一個問題——以及對 Curt 的後續回答。顯然，我想，你們在 2018 年全年削減債務方面做得很好，部分原因是第四季回購速度緩慢。我們該如何看待 2019 年的伊士曼和回購？

Sure, Frank. First of all, as you think about the free cash flow greater than $1.1 billion, we're going to be funding attractive dividend that we have seen increase again this past year. On the deleveraging side, we believe that deleveraging can moderate some compared to last year. And so I'm always throw to people out there right now assume kind of roughly $250 million. We'll modify that during the course of the year, maybe a little lower depending on how EBITDA grows during the year. And I think as we go into 2020, the deleveraging should be pretty much behind us to a greater extent as we think about EBITDA growth going into 2020. And so when you look at all those factors, then the remaining amount of that cash flow should be for share repurchases. And what you saw in 2018 and you could see a similar effect in 2019, we did a fair bit of our share repurchases in the first half of the year and you should see a similar effect this year. Quite honestly, Frank, we probably could have done a little bit more in the fourth quarter. That's on me. I did want to hit our deleveraging targets. And as the cash flow came in strong, I kind of missed the window to maybe do another $25 million or so. But regardless, I've already made up for that as we started this year because we're in the market as you would expect, especially where evaluations are.

當然，弗蘭克。首先，當您想到超過 11 億美元的自由現金流時，我們將為有吸引力的股息提供資金，我們看到去年該股息再次增加。去槓桿方面，我們認為今年去槓桿較去年相比會有所緩和。因此，我總是向人們預測現在這個數字大約是 2.5 億美元。我們將在年內對此進行修改，可能會稍微降低一點，具體取決於 EBITDA 在年內的成長情況。我認為，隨著我們進入 2020 年，當我們考慮 2020 年的 EBITDA 成長時，去槓桿應該在很大程度上已經過去。因此，當你考慮所有這些因素時，剩餘的現金流量應該用於股票回購。您在 2018 年看到的情況和您在 2019 年看到的類似效果是一樣的，我們在今年上半年進行了相當多的股票回購，您今年應該也會看到類似的效果。坦白說，弗蘭克，我們可能在第四節可以做得更多。這是我的責任。我確實想實現我們的去槓桿目標。隨著現金流強勁成長，我似乎錯過了再賺 2,500 萬美元左右的機會。但無論如何，我已經在今年開始時彌補了這一點，因為我們正如您所期望的那樣進入了市場，特別是在評估領域。

And we'll now take our next question from Vincent Andrews from Morgan Stanley.

現在讓我們來回答摩根士丹利的 Vincent Andrews 提出的下一個問題。

In adhesive resins, the impact on the new capacity, obviously, a bit more pronounced in the fourth quarter, given everything else that was going on. But where are we in that process and sort of what type of impact have you baked in for 2019?

對於黏合劑樹脂而言，考慮到其他所有因素，第四季新產能受到的影響顯然更為明顯。但是我們處於這個過程的哪個階段？您對 2019 年產生了什麼樣的影響？

Sure, Vincent. So adhesive capacity that came online that was sort of substantial with Exxon really didn't become effective until the back half of this year. And the impact it had on pricing was holding our prices relatively flat through the end of the year as opposed to what we've been doing, which is successfully increasing prices with raw materials up until that point. So you had raws go up quite a bit with oil through the third quarter that flowing through very slowly in the fourth quarter, and we lost our ability to raise prices to offset it. So that's a bit of the impact that you have. As you move into the first quarter, I think what we expect is prices to start coming off a bit. We also expect raw material flow-through to help offset some of that and mitigate some of that challenge. But it's going to be a challenging year in '19 and part of the challenges we have to overcome for AFP, and we have plenty of growth to do so. I would even know within adhesives, it's important to keep in mind that this is a very strong growth market on the end markets. Hygiene -- hot melt adhesive packaging has very strong underlying growth in the sort of 5% to 7% range. On top of that, because of sustainability trends and sensitivity to odor and VOC emissions, there's a strong drive to convert rosins, which don't measure well on those criteria, over to hydrogenate or hydrocarbon resins, which are the cleanest of what's available in the market today. And then on top of that, we just launched a new low-odor, low-VOC product that's by far best in class in the world and are modifying our capability to produce that and go commercial on that product in this year. So that's going to be a real help, and we're seeing really strong growth in the polyolefin side of the business, which is sort of new for us, but we launched some new products as we've told you in the past on Aerafins -- what we call Aerafin that you pair with resins, and that's going really well. So a lot of growth going on there. We've been clear that this sort of spread compression was coming -- or we're working our way through it and feel great about this business long term. It still has margins above the company average, and it has a lot of innovation opportunities for us going forward.

當然，文森特。因此，埃克森美孚上線的相當大的黏合劑產能直到今年下半年才真正發揮作用。它對定價的影響是，到年底我們的價格保持相對平穩，而不是像我們之前所做的那樣，成功地提高了原材料的價格。因此，第三季原物料價格與石油價格一起大幅上漲，而第四季的流通速度卻非常緩慢，我們失去了透過提高價格來抵銷這一影響的能力。這就是你所造成的一點影響。隨著進入第一季度，我認為我們預計價格將開始略有下降。我們也希望原料的流通能夠幫助抵消部分影響並減輕部分挑戰。但 2019 年將是充滿挑戰的一年，也是 AFP 必須克服的挑戰之一，我們還有很大的發展空間。我甚至知道在黏合劑領域，重要的是要記住這是終端市場上非常強勁的成長市場。衛生－熱熔膠包裝的潛在成長率非常強勁，約為 5% 至 7%。除此之外，由於永續發展趨勢和對氣味和揮發性有機化合物（VOC）排放的敏感性，人們強烈要求將不符合這些標準的松香轉化為氫化樹脂或碳氫化合物樹脂，這是目前市場上最乾淨的樹脂。除此之外，我們剛剛推出了一款新的低氣味、低 VOC 產品，這是目前世界上最好的產品，我們正在改進生產能力，並在今年將產品推向商業化。所以這將會是一個真正的幫助，我們看到聚烯烴業務方面確實強勁增長，這對我們來說是新鮮事，但正如我們過去告訴過您的那樣，我們在 Aerafins 上推出了一些新產品 - 我們稱之為 Aerafin 的產品，可以與樹脂搭配使用，而且進展非常順利。那裡正在發生很大的增長。我們已經清楚地知道這種利差壓縮即將到來——或者說我們正在努力解決這個問題，並對這項業務的長期前景感到樂觀。它的利潤率仍然高於公司平均水平，並為我們未來的發展提供了許多創新機會。

Okay. And just as a follow-up, do you think this might be the year that the excess ethylene capacity is monetized?

好的。另外，作為後續問題，您是否認為今年可能是乙烯過剩產能貨幣化的一年？

I would say, on excess ethylene, we have dealt that through the RGP option. That RGP option can be adjusted back to normal operations if the markets improve. Until that happens, we're not doing much more with the sale of excess ethylene until the market improves. I know there's interested parties, but right now until the market improves, there's not much we can do.

我想說，對於過量的乙烯，我們已經通過 RGP 選項進行了處理。如果市場好轉，RGP 選項可以調整回正常營運。在此之前，我們不會進一步出售過剩的乙烯，直到市場好轉。我知道有感興趣的人，但現在，除非市場好轉，否則我們能做的並不多。

Vincent, the value of it right now doesn't make sense. In addition to the RGP, which sort of eliminates all the downside risk of ethylene to propane volatility, which is up and running, by the way, already ahead of this call, we do believe the market situation should improve materially in ethylene in 2020 from what we can see. They have a lot of export capacity of ethylene to get that excess quantity that's been holding prices down out of this U.S. market.

文森特，它現在的價值毫無意義。除了 RGP 之外，RGP 在某種程度上消除了乙烯對丙烷波動的所有下行風險，順便說一句，在本次電話會議之前，RGP 就已經啟動並運行了，我們確實相信，從我們所看到的情況來看，2020 年乙烯的市場形勢應該會大幅改善。他們擁有大量的乙烯出口能力，可以將造成乙烯價格低迷的過剩產量從美國市場中排出。

We will now take our next question from Jeff Zekauskas from JPMorgan.

我們現在將回答摩根大通的 Jeff Zekauskas 提出的下一個問題。

Can you talk about the propylene complex in 2019 in that just, I guess, using polymer grade prices, they've come down from, say, $0.60 to $0.40, and you sell a lot of propylene derivatives? What might be the year-over-year economic effect of that change for you in 2019? And how does it work in Eastman?

您能否談談 2019 年的丙烯綜合體，我猜，以聚合物級價格計算，它們已經從 0.60 美元降至 0.40 美元，而且您銷售了大量丙烯衍生物？2019 年，這項變更可能對您產生哪些年比經濟影響？那麼它在 Eastman 中是如何運作的呢？

Well, how I'll answer that question, Jeff, is really what we're assuming on olefin spreads and maybe that helps address your question, is right now we're expecting that propylene-propane spread to be about the same in 2019 compared to 2018. And we expect the ethylene-propane spread to be a little bit better that Mark mentioned, but still challenged relative to what we consider normal. And then the impact of propylene on our derivatives in CI, that's where you're really looking at, you've got to go segment-by-segment, business-by-business on what the pricing is relative to the performance. And what we're seeing there, as I mentioned, a little softness in acetyls, and in certain olefin product lines, we expect some softening relative to 2018, but offset overall by the cost improvements we expect in CI.

好吧，傑夫，我如何回答這個問題，實際上是我們對烯烴價差的假設，也許這有助於解決你的問題，現在我們預計 2019 年丙烯-丙烷價差與 2018 年大致相同。我們預計乙烯-丙烷價差會比馬克提到的情況好一些，但相對於我們認為的正常水平仍然面臨挑戰。然後是丙烯對我們 CI 衍生物的影響，這才是你真正要關注的地方，你必須逐一細分市場、逐一業務地了解相對於性能的定價。正如我所提到的，我們看到乙醯基和某些烯烴產品線略有疲軟，我們預計與 2018 年相比會有所疲軟，但總體上會被我們預期的 CI 成本改善所抵消。

Yes, Jeff, while the propylene prices are off, you've got to remember the propane prices are also off quite a bit and so the spreads are holding fairly well. And while we do expect some prices to come off in the propylene derivatives and the acetyls, we have a nice offsetting situation where we've eliminated the headwind from ethylene with the RGP investment. We have the lack of industrial outages in this segment, and we're going to hold costs flat so that nets out to where we can stay stable this year versus last year.

是的，傑夫，雖然丙烯價格下跌，但你必須記住丙烷價格也下跌了不少，因此價差保持得相當好。雖然我們確實預期丙烯衍生物和乙醯基的部分價格會下跌，但我們有一個很好的抵消局面，即透過 RGP 投資消除了乙烯帶來的阻力。我們這一領域的工業停工很少，而且我們將保持成本平穩，以便今年的淨利潤與去年相比保持穩定。

And for my follow-up, the raw materials that went up in the fourth quarter, I take it that was ethane, propane and paraxylene, and ethane and propane have, obviously, come off and paraxylenes come off. And that's why you believe that you'll begin to have relief in the second quarter as you work here and volumes slowed down, so you've got extra stuff that you have to sell in Q1. Is that the general dynamic going into 2019?

就我的後續情況而言，我認為第四季度上漲的原料是乙烷、丙烷和對二甲苯，而乙烷和丙烷顯然已經下降，對二甲苯也下降了。這就是為什麼您相信在第二季度您會開始感到寬慰，因為您在這裡工作並且交易量放緩，所以您有多餘的東西必須在第一季出售。這是 2019 年的整體動態嗎？

Yes, you described it well, Jeff. I mean, oil-related items spiked in the third quarter, propane, paraxylene and the like. Those have started to come off in the fourth quarter. We couldn't turn them over quick enough because of the destocking and our normal seasonalization. Those will work its course through the first quarter. And as those come up, you'll see the benefit in the second quarter, absolutely right.

是的，你描述得很好，傑夫。我的意思是，第三季與石油相關的商品價格飆升，如丙烷、對二甲苯等。這些在第四季已經開始顯現。由於庫存減少和正常的季節性變化，我們無法足夠快地週轉它們。這些將在第一季度發揮作用。隨著這些因素的出現，您將在第二季度看到好處，絕對正確。

The only thing I would add to the list was benzene that was also incredibly high in the third quarter has come off dramatically, as you know. And it's not just the flow-through of the high-cost materials. Remember that when demand is really slowing down like that, you also can't buy that much of the cheap raw materials in the fourth quarter. So really slows your turnover rate. Now that volumes are ramping up, we can both flow through the high cost as well as get a lot more the low cost in a lot faster now.

我唯一想補充的是，正如你所知，苯的價格在第三季也曾非常高，但現在卻急劇下降。這不僅是高成本材料的流通。請記住，當需求真正放緩時，您也無法在第四季度購買那麼多廉價原料。因此確實會降低你的營業額率。現在，產量正在增加，我們既可以流過高成本，也可以更快地獲得更多低成本。

We will now take our next question from John Roberts from UBS.

我們現在將回答瑞銀集團的約翰羅伯茲提出的下一個問題。

At the end of the presentation, it says you're assuming Brent crude will be similar at current levels. It's been so volatile over the past couple of months. Could you just talk about what you mean by current level? Is that rising through the year like a futures curve or average for the first 2 months of this year? Or what do you mean? And then related to that, is it more important that oil just be stable that's there and so it could average in a pretty wide range and you could make your guidance as long as it's stable and not going up and down and up and down?

在演示結束時，它說你假設布倫特原油價格將與當前水準相似。過去幾個月裡形勢非常動盪。您能簡單談談您所說的「當前水準」是什麼意思嗎？這是否像今年前兩個月的期貨曲線或平均值一樣，全年都在上漲？或者你是什麼意思？與此相關的是，油價保持穩定是否更為重要，這樣它的平均價格就可以在一個相當寬的範圍內，只要它保持穩定，而不是忽上忽下，你就可以做出指導嗎？

So to answer the first part of the question, we are assuming close to, I think, what the curve is. So oil sort of in the low $60s, moving up to the mid-$60s through the year is sort of what's embedded in our forecast. On the volatility question, stability is far better for us than volatility when it comes to oil and how it impacts raw material costs. And if it stays stable in the $60 range, we feel very good about our forecast. And if it pops back to $85, obviously, we'll get back into having to chase that raws up, but, hopefully, that's because demand is incredibly strong and the economy is recovering. If we're in that scenario area, then we have the pricing power to do so.

因此，為了回答問題的第一部分，我認為我們假設接近曲線的形狀。因此，我們預測油價將在 60 美元出頭，然後在年內將上漲至 60 美元中段。關於波動性問題，就石油及其對原材料成本的影響而言，穩定性對我們來說遠比波動性好得多。如果它保持穩定在 60 美元的範圍內，我們對我們的預測感到非常滿意。如果價格回升至 85 美元，顯然我們將再次開始追漲，但希望這是因為需求非常強勁且經濟正在復甦。如果我們處於這種情境區域，那麼我們就有定價權。

And then it seemed like you had really strong performance in Saflex in the quarter. And was that in spite of inventory destocking or channel supply correction so that it gets even stronger as you get into the second and third quarters?

然後看起來你在本季在 Saflex 的表現確實非常出色。儘管庫存減少或通路供應調整，但進入第二季和第三季時，這種動能是否還會變得更加強勁？

You remember business was really pretty stable. There wasn't much of a destocking event there. That was really isolated to specialty plastics. So there we have such strong growth in innovation products with heads-up display and acoustics that are very high margin. So as those are growing at very high rates, the margin mix up credit you get is great. So the overall square meters could be down a little bit with the auto market that the volume mix situation is actually quite strong. And I think that trend just continues as we go to the first quarter. Same in performance films, it's remarkable that not only was North America great story of growth, China was a great story of growth through the fourth quarter even with car sales being down because there paint protection films are growing at incredible rates at very high values as we penetrate and develop really that market. And that trend again will continue as we go into the first quarter. So the destocking demand situation is really about specialty plastics as well as the raw material situation was also entirely about specialty plastics, where you had such a dramatic spike up in PX, which was a bit unique relative to the other raw materials in the third quarter and have you to sort of get that through the system.

你記得生意確實相當穩定。那裡沒有發生太多的去庫存事件。這其實與特種塑膠無關。因此，我們的平視顯示器和音響等創新產品實現了強勁成長，利潤率非常高。因此，由於這些資產的成長率非常高，您獲得的保證金混合信貸額度非常大。因此，汽車市場整體銷售面積可能會略有下降，但銷售組合情況實際上相當強勁。我認為，進入第一季度，這一趨勢仍將持續下去。性能膜也一樣，值得注意的是，不僅北美市場實現了巨大增長，中國市場在第四季度也實現了巨大增長，儘管汽車銷量下降，但隨著我們真正滲透和開發該市場，中國的漆面保護膜正以驚人的速度和極高的價值增長。進入第一季度，這種趨勢仍將持續下去。因此，去庫存需求情況實際上與特種塑料有關，原材料情況也完全與特種塑料有關，其中 PX 出現瞭如此急劇的飆升，與第三季度的其他原材料相比有點獨特，你必須通過系統來實現這一點。

We will now take our next question from Kevin McCarthy from Vertical Research Partners.

我們現在將回答來自 Vertical Research Partners 的 Kevin McCarthy 的下一個問題。

Curt, wondered if you could provide some color as to what you are assuming for 2 things, working capital and cash taxes and formulating the free cash flow guidance for 2019.

Curt，想知道您是否可以解釋一下您對兩件事的假設，即營運資本和現金稅以及製定 2019 年的自由現金流指導。

So yes, we're expecting another strong cash flow. If I think about just the moving parts, it's not the 2 that you've mentioned. We're expecting earnings to improve, so that should help us translate into cash because we know how to convert our earnings into cash. Working capital should improve compared to 2018 because we're not anticipating that same impact of higher raws as it flows through working capital items, such as inventory and receivables. We'll still have some growth in working capital for our growth programs, but as a whole, the value should improve during the course of the year. I also mentioned, you'll see in the appendix, we're going to moderate slightly our capital expenditures. So offsetting all those positive things, you did see a step-up in cash taxes or you will see a step-up in our cash taxes in 2018 as we no longer enjoy the benefits of those NOLs from the Solutia acquisition. And I think that will continue in 2019 as we move back into more normal cash tax payments. That headwind could be, say, $50 million to $75 million of higher cash tax payments in '19 over '18. But again, we're going to generate greater than $1.1 billion, and over the course of the year, we'll see how much greater over $1.1 billion it will be.

所以是的，我們期待另一輪強勁的現金流。如果我只考慮活動部件，那並不是您提到的那兩個。我們預計收益將會提高，這應該有助於我們轉化為現金，因為我們知道如何將收益轉化為現金。與 2018 年相比，營運資本應該會有所改善，因為我們預期原材料成本增加在流經營運資本項目（如庫存和應收帳款）時不會產生同樣的影響。我們的成長計畫的營運資本仍會有一些成長，但總體而言，價值應該會在今年內有所提高。我還提到，您會在附錄中看到，我們將略微調整我們的資本支出。因此，除了抵消所有這些積極因素之外，您確實看到了現金稅的增加，或者您會看到我們 2018 年的現金稅會增加，因為我們不再享受收購 Solutia 帶來的 NOL 的好處。我認為，隨著我們恢復更正常的現金納稅方式，這種情況將在 2019 年繼續下去。這種不利因素可能會導致 2019 年的現金稅款比 2018 年增加 5,000 萬至 7,500 萬美元。但同樣，我們的收入將超過 11 億美元，並且在今年內，我們將看到這個數字將比 11 億美元高出多少。

Okay, that's helpful. Then I realize the new textile products are not enormous for you. But would you comment on how big that business is? And would you expect the growth profile to remain in the 30% range going forward?

好的，這很有幫助。然後我意識到新的紡織產品對你來說並不是什麼大事。但您能評論一下該業務的規模有多大嗎？您預計未來成長率會維持在 30% 左右嗎？

Yes, we've had a tremendous success in this business, and it's really exciting because it's really core to our story of Eastman and how we take these world-class technology streams develop all these new applications. We've created this diverse set of products off of the cellulose stream just like we've done in polyester and several other streams. And we're really proud of the team who engaged in this, and so it's now probably about 16% of our revenue in the Fibers business. And if you look back 3, 4 years ago, it was a much smaller percentage. So we're really changing the mix and quality of where we can get growth in the -- into the Fibers business in these new growth applications. And that gives us the confidence of stability, looking for a very modest kind of growth of this business if you look at that long term.

是的，我們在這個行業中取得了巨大的成功，這真的令人興奮，因為它是我們伊士曼故事的核心，也是我們如何利用這些世界一流的技術流開發所有這些新應用的核心。我們利用纖維素流創造了這一系列多樣化的產品，就像我們在聚酯和其他幾種流中所做的那樣。我們為參與其中的團隊感到非常自豪，現在這大概佔了我們纖維業務收入的 16% 左右。如果回顧 3、4 年前，這個比例就小得多。因此，我們確實在改變纖維業務在這些新增長應用中能夠實現成長的組合和品質。這給了我們對穩定的信心，如果從長遠來看，我們預計這項業務將實現非常適度的成長。

We will now take our next question from Laurence Alexander from Jefferies.

我們現在將回答 Jefferies 的 Laurence Alexander 提出的下一個問題。

One end-market question and one high-level question. On the end-market side, could you give a little bit of around-the-world take on what you're seeing in commercial construction trends? And secondly, can you give us a sense for how lean you think Eastman is now? And what I mean by that is, if demand does surprise on the downside in the back half of 2019 or 2020, how much room is there for cost-cutting in response?

一個終端市場問題和一個高級問題。在終端市場方面，您能否簡單介紹一下您所看到的全球商業建築趨勢？其次，您能否告訴我們，您認為伊士曼現在的精簡程度如何？我的意思是，如果 2019 年下半年或 2020 年需求確實意外下滑，那麼削減成本的空間有多大？

Sure. So from a commercial activity point -- construction point of view, I think that was your question, Laurence, Europe has actually been pretty strong, there's a nice backlog that we can see, commercial buildings going up, and they have a lot more glass on them, as I mentioned earlier. And that's been driving very strong growth in Europe. Same in North America, we see commercial construction fairly good. China is a little bit of wildcard and not relevant to us as much on the commercial side because we don't really sell our interlayers into that market. And if you think about our coatings business with our textile and other architectural additives, that's a little bit more residential oriented than it is commercial oriented in the volumes. And that, overall, I think has been relatively stable for us and a good source of growth net of the current economic situation. When it comes to your second question, which is, if we head into more of a recessionary kind of situation, what we can do with costs. I'll break that down into sort of 2 parts. So on the manufacturing side, one of the big advantages we have of our large integrated sites is how we staff and operate them to give us flexibility in our cost structure when things are really strong, like, the first 9 months of last year versus where we are now versus that decline in demand question. And the way build on that flexibility is, quite a few of our employee base are contractors, and we also use a lot of overtime to run the plants really hard. And what's nice about that is, as demand comes off, you can pull that lever and reduce those spends quite quickly, which we already have started doing in the current situation. And if demand falls further, you can pull those costs down even faster with less volumes. So we have some flexibility built in there that can be meaningful to manage our cost structure. On the SG&A and R&D side, it's a little bit different. If you look at where we've been in SG&A and R&D, we've been quite successful in holding the costs relatively flat through productivity. And I would mention that's actually true for the total complex, right. So if you look at 2014 through 2017, we did about $1 billion of cost savings productivity that allows to completely offset inflation in that time period. As we told you in '18, our costs were going to go up about $50 million. By the way, most of that is in manufacturing, not in SG&A and R&D, but it was a $50 million headwind to us last year against variable margin growth. And now we're going to take it back down to being flat. So I think that the SG&A and R&D, though, has less flexibility for pulling it down because we're already so efficient. On that side, we're already in the bottom quartile of SG&A and R&D as a percentage of sales in this industry, and we have one of the most successful and robust innovation portfolios. So we're already being incredibly efficient with our spend on that side of things. And we are increasing growth investments in the commercial R&D area there, but we're offsetting it with cost-cutting everywhere else. There is less ability to sort of pull that number down in a meaningful way and stay on strategy with our innovation and growth. But net, I think we feel very well positioned for all of this. And I'd also mentioned on our cash flow side, if you go into a slowdown like that, you free up a lot of cash in inventory and receivables. So we feel very confident of our cash position in a more dramatic slowdown.

當然。因此，從商業活動的角度——建築的角度來看，我想這是你的問題，勞倫斯，歐洲實際上一直非常強勁，我們可以看到大量的積壓，商業建築正在崛起，而且它們上面有更多的玻璃，正如我之前提到的。這推動了歐洲的強勁成長。同樣在北美，我們看到商業建築相當不錯。中國市場有點不確定，在商業方面與我們關係不大，因為我們實際上並沒有向該市場銷售我們的夾層。如果你考慮我們的塗料業務，包括紡織品和其他建築添加劑，那麼從銷量上看，它更多的是面向住宅，而不是面向商業。總體而言，我認為這對我們來說相對穩定，並且是當前經濟狀況下良好的成長來源。談到你的第二個問題，如果我們陷入更嚴重的經濟衰退局面，我們該如何處理成本。我將把它分成兩部分。因此，在製造方面，我們大型綜合工廠的一大優勢在於，當情況非常強勁時，我們如何配備人員和運營它們，使我們的成本結構具有靈活性，例如，與去年前 9 個月相比，我們現在的狀況以及需求下降的問題。實現這種靈活性的方法是，我們的相當一部分員工都是承包商，我們也花費大量加班來努力運作工廠。這樣做的好處是，隨著需求的減少，你可以採取這種措施並很快減少支出，在當前情況下我們已經開始這樣做了。如果需求進一步下降，您可以透過減少產量來更快地降低成本。因此，我們具有一定的靈活性，這對於管理我們的成本結構很有意義。在銷售、一般及行政費用及研發方面，情況略有不同。如果你看一下我們在銷售、一般及行政開支和研發方面的情況，就會發現我們透過提高生產力成功地將成本保持在相對平穩的水平。我想說的是，這對整個綜合體來說確實如此，對吧。因此，如果你看看 2014 年至 2017 年，我們節省了約 10 億美元的成本，從而完全抵消了那段時期的通貨膨脹。正如我們在 2018 年告訴您的那樣，我們的成本將增加約 5000 萬美元。順便說一句，其中大部分是在製造業，而不是銷售、一般及行政費用和研發方面，但去年這對我們浮動利潤率的增長造成了 5000 萬美元的阻力。現在我們要把它恢復到平坦狀態。因此，我認為，由於我們已經非常高效，因此銷售、一般及行政費用和研發費用的降低靈活性較小。在這方面，我們的銷售、一般及行政費用和研發費用佔銷售額的比例已經處於行業最低四分之一，我們擁有最成功和最強大的創新組合之一。因此，我們在這方面的支出已經非常有效率。我們正在增加對那裡的商業研發領域的成長投資，但我們透過削減其他地方的成本來抵消這項投資。我們無法以有意義的方式降低這一數字，也無法維持我們的創新和成長策略。但總體而言，我認為我們已經做好了充分的準備來應對這一切。我還提到了我們的現金流方面，如果出現這樣的放緩，你就會釋放庫存和應收帳款中的大量現金。因此，在經濟進一步大幅放緩的情況下，我們對我們的現金狀況非常有信心。

We will now take our next question from Arun Viswanathan from RBC Capital Markets.

我們現在將回答來自 RBC Capital Markets 的 Arun Viswanathan 提出的下一個問題。

Just wanted to understand maybe you could just give us your commentary on some of the end markets. Automotive, obviously, has been an area that we've seen quite a bit of destocking, especially in China and pullbacks and builds. How does that affect your business? And maybe you can also touch on what you're seeing in paints and coatings.

只是想了解一下，也許您可以給我們一些關於一些終端市場的評論。顯然，汽車產業是我們看到大量去庫存的領域，尤其是在中國，並且出現了回調和成長的現象。這對您的業務有何影響？或許您也可以談談您在油漆和塗料中看到的東西。

Sure. So overall market on the transportation sector, I would say, has been relatively good last year, obviously, slowed down especially in China in the fourth quarter. And as I mentioned earlier, despite that, in Advanced Materials, we were able to deliver strong volume and mix growth through the end of the year. When you get over to coatings and tires in the AFP segment, it's a little bit different and a little more tied to sort of the actual underlying market trends. We do have some robust growth in things like resins in tires as well as some of our ketones and other growth projects inside coatings. We're going to track a little bit more with demand there. And that's where you saw some of that destocking take place. There was a lot of it going on in China, and I would mention some of it also going on, in particular, in tires in Europe. In the tire market, the tire producers have a bit of a slinky effect sometimes through the year on how they produce relative to what's flowing through their relatively complex distribution in retail channel. So every once in a while, you go through these corrections of -- they've produced more than where demand's at. And we saw some of the inventory correction going on in China and Europe in the fourth quarter. And you can look at the tire companies. They all identify that markets are sort of slowing down. Important thing to keep in mind, though, about these businesses is exposure is quite different for us when it comes to OEM and aftermarket, and we're a lot more balanced. So in AFP, it's about 50-50 in the OEM exposure versus refinish really in coatings. In tires, it's actually 25% OEM, 75% refinish. You also have to remember that we're much more levered to commercial tires than passenger tires in the amount of Crystex that is consumed in much larger rubber content of a commercial tire. So it's very dangerous to over-interpret a decline in OEM personal car production as a headwind for us across our businesses.

當然。所以我想說，去年運輸業的整體市場表現相對較好，但顯然，尤其是在中國，第四季市場成長速度有所放緩。正如我之前提到的，儘管如此，在先進材料領域，我們仍然能夠在年底前實現強勁的銷售和組合成長。當你談到 AFP 領域的塗料和輪胎時，情況會有些不同，而且與實際的潛在市場趨勢聯繫更緊密。我們在輪胎樹脂、一些酮類產品以及塗料內的其他成長項目等方面確實取得了強勁成長。我們將進一步追蹤那裡的需求。這就是你看到的去庫存現象發生的地方。中國發生了很多這樣的事情，我想提一下歐洲也發生過一些這樣的事情，特別是在輪胎領域。在輪胎市場，輪胎生產商的生產方式有時會對其在零售通路中相對複雜的通路的流通產生一些微妙的影響。因此，每隔一段時間，你就會經歷這些修正──他們的產量超過了需求。我們看到第四季中國和歐洲出現了一些庫存調整。你可以看看輪胎公司。他們都認為市場正在放緩。不過，要記住的是，關於這些業務，我們在 OEM 和售後市場的曝光度非常不同，我們更平衡。因此，在 AFP 中，OEM 暴露與塗層修補的比例約為 50-50。就輪胎而言，實際上 25% 是 OEM，75% 是修補。您還必須記住，與乘用輪胎相比，我們對商用輪胎的依賴程度更高，因為商用輪胎的橡膠含量要大得多，而 Crystex 的消耗量也更大。因此，將 OEM 私家車產量的下降過度解讀為我們業務的阻力是非常危險的。

And just as a follow-up, you've mentioned that AFP could be maybe at the lower end of, say, 5% to 7% and AM would be at the upper end of 7% to 9% EBIT growth for the full year. I guess, both of those imply a pretty sharp snapback in Q2 through Q4. So maybe you can just give us your confidence level in that. And just asking because, again, there seems to be some concern about the level of destocking versus decline in primary demand. So if it is more the latter, just wondering how we get that sharp snapback in Q2 through Q4.

作為後續問題，您提到 AFP 全年息稅前利潤增長率可能在 5% 至 7% 之間，而 AM 全年息稅前利潤增長率則在 7% 至 9% 之間。我想，這兩者都意味著第二季到第四季會出現相當強勁的反彈。所以也許您可以告訴我們您對此的信心程度。我之所以問這個問題，是因為人們似乎再次擔心去庫存水準與初級需求的下降。因此，如果更多的是後者，我只是想知道我們如何在第二季到第四季實現如此強勁的反彈。

Yes, great question. Obviously, one we spend a lot of time debating. And as we said, we're in an uncertain world right now, so it's real hard to predict what the macro economy is going to be for the year. So what we're assuming is a slow growth world, not as robust as the first half of last year, and that is a planning assumption. We are pretty clear in our line of sight to inventory destocking going on in coatings and tires and especially plastics with these very high-value products. And so you can only destock for so long. And so you can see through that. And in AM, again, I told you it's all predominantly exports back to the U.S. So as long as U.S. consumer is in place, the destocking will hit in it and then demand will recover. So we actually feel pretty good about that. Coatings and tires is a little more exposed to the Chinese consumer. So that's a little bit less clear, which is why we're being a little more conservative in our guidance in AFP than in Advanced Materials. And -- but we still see destocking coming to an end, the question just is, where is the Chinese economy for the rest of the year? And our belief is it's actually still relatively good right now, but there's a lot of short-term caution by consumers, and if the trade war doesn't escalate, it will come back.

是的，很好的問題。顯然，我們花了很多時間討論這個問題。正如我們所說，我們現在處於一個不確定的世界，因此很難預測今年的宏觀經濟將會如何。因此，我們假設世界經濟成長緩慢，不像去年上半年那麼強勁，這是一個規劃假設。我們非常清楚地看到，塗料、輪胎，特別是塑膠等高價值產品的庫存正在減少。所以你只能在一段時間內去庫存。這樣你就能看透這一點了。我在上午再次告訴你們，主要是出口回美國。所以，只要美國消費者還在，去庫存就會受到衝擊，然後需求就會恢復。所以我們實際上對此感覺非常好。塗料和輪胎對中國消費者的吸引力更大一些。所以這一點不太清楚，這就是為什麼我們對 AFP 的指導比對先進材料的指導更保守。但我們仍然看到去庫存化即將結束，問題是，今年剩餘時間中國經濟將如何發展？我們認為，目前情況實際上仍然相對較好，但消費者短期內有很多謹慎情緒，如果貿易戰不升級，它就會捲土重來。

We will now take our next question from P.J. Juvekar from Citigroup.

我們現在來回答花旗集團的 P.J. Juvekar 提出的下一個問題。

Mark, you talked about tire products and destocking there. So on Crystex, you had some smaller players shutdown in China last year due to environmental reasons, but now with the auto industry slowing down, where do we stand on Crystex inventories? And was Crystex a big contributor to the 400 basis points margin decline in AFP in the quarter?

馬克，您談到了輪胎產品和去庫存問題。那麼就 Crystex 而言，去年由於環境原因，中國一些小型企業關閉，但現在隨著汽車行業放緩，Crystex 的庫存情況如何？那麼，Crystex 是否是導致 AFP 本季利潤率下降 400 個基點的主要原因？

No, Crystex wasn't a big contributor. I mean, there is some destocking of Crystex, of course, like some of the very high-value additives we have in coatings and that contributed to some of the headwind. But the bigger factor was, obviously, just high raw material costs flowing through relative to pricing for the overall segment. And we feel great about Crystex going forward. I mean, it is a market that's had waves of competitive activity. And as you noted, some of those competitors have left. There's always new competitors coming back in, and that's why we focus on innovation versus just looking at supply-demand balances for our future. And this is a place where we've been incredibly successful in innovation. So the new Crystex plant is up and running well in -- last year for the Cure Pro and Cure product lines, which provide far superior heat stability and efficiency in helping the tire plants run incredibly well. We're talking fairly meaningful improvements in tire plant productivity because this mixing step where our product is used is typically the bottleneck for running a plant fast. So the adoption rate has been great, and we're focusing on innovation. This is all patented. And we've even got another generation product beyond this one that is sort of revolutionary and what we can provide to the tire companies on a horizon that takes us even beyond this. So this is a business that's got a lot of innovation opportunity and ways to keep it moving.

不，Crystex 並不是一個很大的貢獻者。我的意思是，Crystex 的庫存當然有所減少，就像我們在塗料中使用的一些非常高價值的添加劑一樣，這造成了一些不利因素。但顯然，更大的因素是相對於整個細分市場的定價而言，原材料成本較高。我們對 Crystex 的未來發展充滿信心。我的意思是，這個市場經歷了一波又一波的競爭。正如您所說，一些競爭對手已經離開。總是有新的競爭對手出現，這就是為什麼我們專注於創新而不是只專注於未來的供需平衡。在這裡，我們的創新取得了令人難以置信的成功。因此，新的 Crystex 工廠去年運作良好，生產 Cure Pro 和 Cure 產品線，這些產品線提供了卓越的熱穩定性和效率，幫助輪胎廠順利運作。我們正在討論輪胎廠生產力的相當有意義的改進，因為使用我們的產品的混合步驟通常是工廠快速運行的瓶頸。因此採用率很高，我們專注於創新。這一切都已獲得專利。我們甚至還有另一代產品，這種產品具有革命性，我們可以為輪胎公司提供超越這一水平的產品。因此，這是一個擁有大量創新機會和保持其發展方式的企業。

Great. And then I want to go back to your RGP project on the cracker. Looks like that $20 million investment is working well. Can you quantify the benefit in 2019? And as you make less merchant ethylene, how much less propane and propylene do you buy? Can you just give us the mass balance around that?

偉大的。然後我想回到您在餅乾上的 RGP 專案。看起來，這2000萬美元的投資效果很好。您能量化 2019 年的收益嗎？隨著您生產的商用乙烯減少，您購買的丙烷和丙烯會減少多少？您能告訴我們周圍的質量平衡嗎？

Well, I'll start, and I'll ask Greg to give you some of the mass balance stuff because he's helping communicate that. But I'm not going to give you a specific number just on the improved ethylene. I would say, that's embedded in our overall guidance in CI. What the benefits are is it's simply we produced less merchant ethylene and thus the pressure and we felt on that in 2018, which you can quantify pretty easily with the market data. We're just not going to have that merchant ethylene. I'll now let Greg talk about the balance.

好吧，我先開始，我會請格雷格給你一些質量平衡的東西，因為他正在幫助傳達這一點。但我不會只根據改進的乙烯就給出一個具體的數字。我想說，這已經融入了我們對 CI 的整體指導中。好處就是我們生產的商用乙烯較少，因此我們在 2018 年感受到了壓力，你可以透過市場數據輕鬆量化這一點。我們根本不會擁有那種商用乙烯。現在我讓格雷格來談談平衡問題。

Yes. So if you remember, on a corporate basis, we produce about 1.4 to 1.5 billion pounds of ethylene, about half of that we sell into the market. And with the RGP investment, we'll be producing about 80% less of the ethylene that we would normally sell into the market. So obviously, much less exposure to the merchant ethylene market as a result of this project as opposed to what we normally have.

是的。所以如果你還記得的話，從公司層級來說，我們生產了大約 14 億到 15 億磅乙烯，其中大約一半銷往了市場。透過 RGP 投資，我們生產的乙烯將比通常銷售到市場上的量減少約 80%。因此，顯然，與通常情況相比，該項目對商用乙烯市場的曝險要小得多。

It's also a great volatility reducer because PGP to RGP is very stable, if you go look at history relative to what you can see on the propylene and ethylene relative to propane. So it also sort of mitigates volatility as well.

它也是一種很好的揮發性降低劑，因為 PGP 到 RGP 非常穩定，如果你查看歷史記錄，你可以看到丙烯和乙烯相對於丙烷的情況。所以它也在某種程度上減輕了波動性。

You also buy less propylene, right?

你買的丙烯也少了，對吧？

We're buying...

我們正在購買...

No, actually, because of the RGP...

不，實際上，是因為 RGP…

Yes, for refinery grade.

是的，針對煉油級。

being substituted, which is, obviously, propylene as a feedstock, it actually produces just a little bit more propylene.

顯然，如果用丙烯作為原料來替代，它實際上只會生產出多一點的丙烯。

And, P.J., we'll send you a chart that we have that can help you manage it out through this balance..

而且，P.J.，我們會向您發送一張圖表，它可以幫助您透過這種平衡來管理它。

We will now take our next question from Duffy Fisher from Barclays.

我們現在將回答巴克萊銀行的達菲費雪提出的下一個問題。

I just want to understand better, when your customers destocked in Q4, did you guys get the inverse of that in that you had to eat some inventory? Or were you able to ramp back your production enough that, that wasn't the case? And if it was, can you kind of help us size how much on your balance sheet was in excess because of that effect?

我只是想更好地了解，當您的客戶在第四季度去庫存時，您是否遇到了相反的情況，即您不得不吃掉一些庫存？或者您是否能夠充分提高產量以避免這種情況？如果是的話，您能否幫我們估算一下由於這種影響，您的資產負債表上有多少是超額的？

Sure, yes. No, because the destocking kind of played out through the quarter and was more pronounced as we ended the year, we in fact had difficulty adjusting our operations to fully overcome the destocking and our own production rates. To size it, maybe just look at the difference between our targeted free cash flow and what we achieved. Maybe that'll give you some sense of what that inventory effect was.

當然，是的。不，因為去庫存現像在整個季度都存在，並且在年底更加明顯，我們實際上很難調整營運以完全克服去庫存現象和我們自己的生產力。要衡量它的規模，也許只需看看我們的目標自由現金流和我們所實現的自由現金流之間的差異。也許這能讓你了解庫存效應是什麼。

Okay, great. And then just the second one. On the ability now to ship tow into China from Korea, is that meaningful or not meaningful for this segment?

好的，太好了。然後是第二個。關於現在從韓國向中國運送拖船的能力，這對該領域來說是否有意義？

It's meaningful in keeping the segment stable. So when you look at it, we had tow sales into China until August in '18. And if they had stuck to their policy this year of no tow from the U.S. all year without qualifying Korea, that would have been a headwind for us. By getting Korea qualified, that allows us to keep things relatively stable to '18.

這對於保持細分市場的穩定很有意義。所以，當你看到它時，你會發現，直到 2018 年 8 月，我們在中國的銷售量才有所下降。如果今年他們堅持自己的政策，即在韓國沒有獲得參賽資格的情況下全年不從美國拖船，那麼這對我們來說將是一個阻力。透過讓韓國獲得參賽資格，我們可以在 2018 年之前保持相對穩定。

All right. Let's make the next question the last one, please.

好的。請將下一個問題作為最後一個問題。

We will take our last question from Matthew Blair from Tudor, Pickering, Holt.

我們將回答來自都鐸、皮克林、霍爾特的馬修布萊爾的最後一個問題。

I was a little surprised at the quarter-over-quarter decline in CI just given the propane cracking margins. It seemed like they should have improved for you. Could you just walk through the main moving parts here and perhaps provide some sort of breakout of the impacts you saw in intermediates versus amines versus plasticizers?

考慮到丙烷裂解利潤，我對 CI 的季度環比下降感到有些驚訝。看起來他們應該為你做出改進。您能否簡單介紹這裡的主要活動部件，並提供一些您在中間體、胺和增塑劑方面看到的影響的細分？

So first of all, we weren't selling ethylene in the quarter and have some of the unobsorbed fixed costs as a result of that. Second, you have prices coming off with the raw material environment as they tend to do in Chemical Intermediates, but still the slow flow-through of raw material costs on that basis, particular in some of the acetyl products and a few of the olefin products. So that really is what drove the earnings to come in year-over-year lower.

首先，我們本季沒有銷售乙烯，因此產生了一些未吸收的固定成本。其次，價格會隨著原料環境而上漲，就像化學中間體的情況一樣，但原料成本的流通仍然緩慢，特別是一些乙醯基產品和一些烯烴產品。所以這才是導致收益較去年同期下降的真正原因。

And if I could add to that, Matthew, don't forget, we were not able to turn our inventory over. And so we still have that higher-valued inventory sitting in on our manufacturing side. So a good portion of that is attributable to CI, and we're a LIFO shop and you know what that does to our earnings in a particular fourth quarter item.

如果我可以補充一點的話，馬修，別忘了，我們無法週轉我們的庫存。因此，我們的製造部門仍存有高價值的庫存。因此，其中很大一部分歸因於 CI，我們是一家後進先出 (LIFO) 商店，您知道這對我們第四季度特定項目的收益有何影響。

Yes, even CI is seasonally lower in volume sequentially from the third quarter to fourth quarter. So just that spike in raw materials in the third quarter is a real tough timing in the year to get rid of it.

是的，即使是 CI，其銷售量從第三季到第四季也呈現季節性下降。因此，第三季原物料價格飆升是一年中真正難以擺脫的時期。

So I just want to wrap up and say that, obviously, we've recognized that fourth quarter was tough and the first quarter is not where we want it to be. But as we look at the future of this company and all the investments we've made, that innovation-driven growth model really does give us ability to push through this kind of environment, continue to create value and find ways to grow. And we're also sensitive to the environment we're in right now and aggressively managing costs more than normal to make sure that we translate variable margin growth from the top line to EBIT a lot quicker this year than what we were able to do last year with the headwinds that we had relative to what we're expecting this year. So that leverage, I think, is an important part as you think about the overall math in a slow growth world this year being able to deliver quite strong earnings growth once we get past the first quarter. So appreciate all the questions, and thank you.

所以，我只想總結一下，顯然，我們已經意識到第四季很艱難，第一季也沒有達到我們想要的效果。但當我們展望這家公司的未來以及我們所做的所有投資時，創新驅動的成長模式確實使我們有能力突破這種環境，繼續創造價值並找到成長方式。我們也對當前所處的環境很敏感，並比平時更積極地管理成本，以確保今年我們能夠將可變利潤率增長從頂線轉化為息稅前利潤，比去年更快地實現，儘管我們今年面臨的逆風與我們預期的相對而言。因此，我認為，當你思考今年緩慢成長的全球經濟的整體情況時，槓桿率是一個重要因素，一旦我們度過第一季度，就能實現相當強勁的獲利成長。非常感謝大家的提問，謝謝。

Ladies and gentlemen...

女士們，先生們...

Thanks, again, for joining us this morning. Have a great day. Go ahead, Holly, go ahead.

再次感謝您今天早上加入我們。祝你有美好的一天。繼續吧，霍莉，繼續吧。

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。