Eastman Chemical Company Earnings Call Insights: Key Propylene Derivatives and the Solutia Acquisition
Eastman Chemical Company (NYSE:EMN) recently reported its fourth quarter earnings and discussed the following topics in its earnings conference call.
Key Propylene Derivatives
Duffy Fischer – Barclays Capital: The question I had, we’ve had pretty steep propylene pop in January and people are thinking there was going to be another move in February. I guess, for you guys, can you talk about the key propylene derivatives and how you think those markets will pass on that price increase? I mean, where you’ll be able to get it quickest and how long that lag will be?
James P. Rogers – Chairman and CEO: Sure Duffy, and it’s one of those things where as we move to more of a specialty. I would’ve thought we’d be spending less and less time on this. On the other hand, I must admit I am enjoying the exposure we have at this time, because you’re right, for fourth quarter we got helped with propane particularly staying down, and then, this quarter, it looks like we are going to get helped with the other end of the spread, the propylene moving up. By the way, we are just in January, so I try not to get too carried away about what the spreads are going to do this year. One of the key places you see it is in our solvents business. The propylene that shows up in the Functional Products, the Additives & Functional Products segment, I guess, as I look at it, there’s a range the other place would be in our intermediates business, but as I look at it, it’s a range of how far downstream you are, how much transparency the customers have. Certainly, I think we’re much better with pricing and moving things along quickly. It will depend again by how much is specialty, how much is commodity but we’ll definitely see the effects of this move in propylene in those two segments in the first quarter and some will then flow over into the second quarter because of the lag. We’ll try to breakout just would you average in one months, two months, three months in the past, it’s been as long as three months. I think we’re much faster than that now.
Duffy Fischer – Barclays Capital: Then the changeover at Kingsport to gas, why half – I mean, it seems like kind of half pragmatic if it made sense, why not go 100% or was it – that was just enough to get you over the hurdle what you needed to do regulatory wise?