Thank you, Britney. Good morning and welcome to AdvanSix's fourth quarter 2019 earnings conference call.

With me here today are President and CEO, Erin Kane; and Senior Vice President and CFO, Michael Preston. This call and webcast, including any non-GAAP reconciliations, are available on our website at investors.advansix.com.

Note that elements of this presentation contain forward-looking statements that are based on our best view of the world and of our business as we see it today. Those elements can change and the actual results could differ materially from those projected, and we ask that you consider them in that light.

We refer you to the forward-looking statements included in our press release and earnings presentation. In addition, we identify the principal risks and uncertainties that affect our performance in our SEC filings, including our annual report on Form 10-K.

This morning, we'll review our financial results for the fourth quarter of 2019, and share with you our outlook for our key product lines and end markets. Finally, we'll leave time for your questions at the end.

So, with that, I'll turn the call over to AdvanSix's President and CEO, Erin Kane.

Thank you, Adam, and good morning, everyone. Thank you for joining us and for your continued interest in AdvanSix.

As you saw in our press release, AdvanSix continued to navigate a difficult end market environment exiting the year. Despite the global slowdown in demand, we continue to benefit from our low cost position and remained focused on executing against our strategic priorities.

Mike will detail the results of the quarter in a moment, but I like to take the opportunity to highlight some of the great works that has been accomplished across the organization over the past year. As we’ve highlighted, 2019 saw several strategic investments that position the company for long-term success.

First of all, we continue to drive safe, stable and sustainable operations. We achieved robust near record output in 2019 across our Caprolactam and Ammonia Production units, which are key operations within our integrated asset base.

Total utilization was roughly 95%, a testament to the multi-year focus to drive stability, mechanical integrity programs, and mitigate risk. This utilization rate is up from a pre-spend 2013 to 2016, three-year average of approximately 89%.

Higher less variable utilization rates drive efficiency and build the foundation for higher returns. As you likely saw this past quarter, we announced the appointment of Wim Blindenbach as Vice President, Integrated Supply Chain.

Wim comes to us following more than two decades at ExxonMobil and has the responsibility for safe, stable and sustainable operations across our integrated manufacturing footprint, while advancing our strategic priorities with operational excellence and improving in robust safety performance. We were also recently awarded a 2020 Gold Rating for corporate social responsibility from EcoVadis, an independent CSR assessment agency.

The Gold Rating is an acknowledgment of our commitment to corporate social responsibility and the great foundation we have built as an organization to continuously improve our sustainability performance. We have also allocated capital for long-term value creation.

CapEx was approximately $150 million in 2019, which was elevated to fund key investments, including our natural gas boilers, caprolactam debottlenecking, and our R&D lab relocation projects. These projects, as part of our longer term high return project pipeline, further bolster our underlying earning potential.

We expect to open our new R&D lab at our Chesterfield facility in the coming weeks, which will enable an improved configuration to drive productivity, increase connectivity with our resin manufacturing, and allow more effective collaboration with customers. In addition, we continued our return to shareholders by repurchasing approximately $62 million of shares during the year.

We are continuing to stay the course to what has been a persistently challenging end market environment. We led successful anti-dumping petitions against acetone imports into the United States, which I’ll further discuss later in the call and we continue to build out long-term growth capabilities through our differentiated product portfolio.

While we need to drive best possible outcomes as we performed through end market dynamics and address transient near-term factors, we are well-positioned on the cost curve and remain focus on driving levers within our control for long-term value creation. With that, I’ll turn it over to Mike to discuss the details of the quarter.

Okay. Thanks, Erin, and good morning, everyone.

I’m now of Slide 4 where I’ll review the fourth quarter financial results. Sales for the quarter were $327 million, and that’s down 16%, compared to last year.

Pricing overall was down by about 12%, primarily due to an 8% unfavorable impact from raw material pass-through pricing. Market-based pricing was unfavorable by approximately 4%, compared to the prior year predominantly driven by our nylon and caprolactam product lines.

Volume overall was down about 4%, primarily due to unfavorable mix across our nylon and ammonium sulfate product lines and the larger planned plant turnaround in the quarter. EBITDA was $13 million in the quarter, down about $30 million versus the prior year.

The decrease primarily reflects an approximately $25 million net unfavorable year-over-year impact of planned plant turnarounds, as well as the unfavorable impact of nylon market based pricing and lower volume. This was partially offset by lower raw material costs, including natural gas and sulfur and an approximately $6 million charge to bad debt expense in the prior year period.

Fourth quarter 2019 results also include an approximately $6 million unfavorable impact from increased raw material and logistics costs related to the PES supplier plant disruption and shutdown as previously highlighted and within expectations. Earnings per share decreased $0.76 versus the prior year to a loss of $0.08 in the quarter, driven by the factors just mentioned.

And lastly, cash flow from operations reached $20 million in the quarter. That’s down about $26 million, compared to last year, primarily due to lower net income.

CapEx of $44 million was up roughly $7 million year-over-year, due to the execution of high return growth and cost savings projects underway and an increase in maintenance CapEx associated with the timing of 2020 planned plant turnarounds. Now, let me turn the call back over to Erin.

Thank you, Mike. I’m now on Slide 5 to discuss our nylon product line, which includes our caprolactam, resin, and films products and represented about 46% of our sales in the fourth quarter.

As you can see from the chart on the right-hand side of the page, nylon industry spreads globally continued to decline sharply in the fourth quarter. The declines reflect a weak demand environment across most major nylon end uses in what is already an oversupplied industry globally.

As you recall, we began to see a sequential step down in industry spreads really take hold in June, which were then sustained through the end of the year. The Asia benzene to caprolactum industry spread averaged just below $700 per ton in the fourth quarter with December averaging closer to $500 per ton and dropping below the trough most recently seen in 2016.

These levels indicate industry spreads below cash cost, and in some cases, below variable costs for a portion of the global caprolactam cost curve. As we look at the nylon environment overall, we've seen decelerating growth and uncertain market sentiment continue to weigh on pricing and spreads.

From an end user application perspective, we've seen persistent weakness in North American carpet, soft auto end market across multiple regions and a slowdown in textile demand growth out of Asia. Carpet, which is the largest domestic nylon end user, has been under pressure due to shift in customer preferences, mixed construction growth and some level of destocking, particularly into year-end.

Our own robust total operating performance and slowing demand across these end users has resulted in a shift towards export opportunities, which we do expect to continue in the near term. We continue to actively work on upgrading our nylon resin mix into higher value applications and adapt to changes in light of these software end market conditions.

As an example, we increased our sales volume into engineered plastics end markets by nearly 30% in 2019. Now, 2020 has been off to a slow start from an industry perspective as well.

On the heels of an extended Lunar New Year holiday in China and the global implications of the coronavirus, both supply and demand in the industry have been affected. Logistics across the value chain is also a consideration in the region given restrictions on transportation.

We’re monitoring these impacts and our current expectation is for the challenging supply and demand environment to continue in the near term. Let's turn to Slide 6.

In ammonium sulfate, which represented about 23% of our total sales in the quarter, we successfully completed both our fall fill and fourth quarter pre-buy programs to close out 2019. Overall nitrogen industry pricing has been subdued following a weak fall application season in the U.S., as well as lower global energy prices.

From third-party data, we’ve seen more modest ammonium sulfate industry pricing movement as compared to recent overall nitrogen pricing. As a reminder, urea is the largest nitrogen fertilizer by total consumption and tends to have an underlying influence on all other nitrogen nutrient products.

Over the course of 2019, the ag environment was characterized by weather delayed plantings and industry logistics disruptions. As we move towards the heart of the domestic planting season in 2020, we expect to see fertilizer demand and planted acres strengthen seasonally.

Crop prices, most notably, corn and an expected return to more traditional planting conditions in North America continue to support an increase in fertilizer demand into the spring. We continue to monitor several factors impacting the overall global fertilizer environment, including farmer profitability, China utilization exports or any changes in expectations for planted acres.

Specifically for ammonium sulfate, we do expect to see a continuation of increased competitive pressure in light of recent North American granular AS capacity expansion and European imports. Now, as a leader in this space, we remain focused on delivering to the value proposition of sulfur nutrition for our customers globally.

We believe sulphur demand is growing at roughly 3% per year. In fact, one area that currently has us excited is soybeans.

Now soybeans are the largest or second-largest crop planted by acreage in our two largest markets, U.S. and Brazil.

Historically, farmers haven't used a lot of fertilizer in general and sulfur nitrogen specifically when growing beans. However, recent independent studies, grower feedback and promising trials we’ve conducted with universities indicate that farmers are likely to get a good return on investment by adding sulfur and supplemental nitrogen to their nutritional plans for soybeans, and that ammonium sulfate would be one of the best fertilizer options.

We continue to conduct trials and work to educate our customers and the grower community on the potential and value of sulfur nutrition and will share more on this opportunity over time. Let's turn to Slide 7 for an update on chemical intermediates.

Our chemical intermediates product line represented just over 30% of our total sales in the quarter. The chart on the right-hand side of the page again shows refinery grade propylene costs and U.S.

acetone prices based on third-party data. The industry realized acetone price over raws continue to see pressure through year-end.

Despite imports into the U.S. moderating, global acetone remained in oversupply position on the back of soft demand downstream.

As a result, we saw pressure on spot market spreads and a continued drive for deeper discounts into the large bio market. From an acetone demand perspective, methyl methacrylate or MMA industry conditions have remained weak overall on a global basis.

However, we've seen steadily improving MMA demands on downtime and delayed restarts early in 2019, which over time we expect to further improve the acetone supply and demand balance. I would also like to take the opportunity to provide an update on the ongoing acetone anti-dumping petition.

As a reminder, the U.S. Department of Commerce had issued preliminary anti-dumping duties on five countries during the third quarter of 2019.

Following final duty determinations by the DOC in October, the International Trade Commission on November 14 issued final injury determination on the first two countries, Singapore and Spain, confirming duties in excess of over 100%. As for the other three countries, Belgium, South Africa and South Korea, the DOC issued final duties on February 7 of this year confirming the preliminary rates and significantly increasing the duty rates on South Africa and South Korea.

We’re now awaiting the last step in the process, which is for the ITC to make its final injury determination and that is expected by the end of the first quarter of 2020. Assuming affirmative rulings, duties imposed will be in place for five years.

And another positive, we saw no import of acetone into the U.S. in January, which will continue to help improve the supply-demand balance while stabilizing industry pricing.

As we look to the rest of the intermediate portfolio, phenol demand remains subdued. Globally, we’ve seen weakness across key end uses such as bisphenol A into polycarbonate and epoxy resin, and of course, nylon as we’ve discussed.

Across the remainder of our chemical intermediates portfolio though, we have seen stable demand albeit off a smaller base with continued favorable growth trends associated with our oximes and other derivative. So, let’s turn to Slide 8.

At AdvanSix, environmental, social and economic sustainability is essential. It is critical to our business and our relationships with key stakeholders, including customers, suppliers, employees, shareholders and the communities in which we operate.

I wanted to spend a moment to highlight some of the recent accomplishments we’ve seen across the organization. As I mentioned in my opening remarks, AdvanSix was awarded a Gold Rating for CSR by EcoVadis.

The assessment evaluates corporate sustainability performance in the areas of environment, labor and human rights, ethics and sustainable procurement. This is the first time we participated in the assessment and we’re ranked among the Top 4% of chemical industry peers.

We continue to reduce our impacts on the environment throughout our operations. As an example, we’ve seen a 42% reduction in criteria pollutant emissions since 2014.

This is the result of a multi-year investment of more than $100 million, which we completed following our spin-off to reduce our NOx emissions at our Hopewell facility. And lastly, we shared last quarter, our new natural gas boilers have been fully on-stream since mid-year and are delivering immediate productivity benefits above our expectations and we wanted to share this with you all.

In total, we spent roughly $40 million in capital and expense with a current estimated IRR at approximately 34%, representing a three-year payback. We anticipate an approximately $19 million annual EBITDA contribution from this project and expect a $9 million incremental year-over-year benefit in 2020.

This is a terrific win-win project for sustainability as well. By converting from coal-fired steam supply to natural gas-fired boilers, this project also delivers a roughly 45% expected reduction in greenhouse gas emissions.

So, let me turn the call back to Mike.

Thanks, Erin, and now I’m on Slide 9 to discuss our cash flow expectations. As Erin mentioned earlier, 2019 was a strategic investment year that will position the company for stronger performance over the long term.

Moving into 2020, we have a number of tailwinds from a cash flow perspective, particularly as we progress through the year and expect stronger cash flow generation in the second half compared to the first half. Due to our realignment to spring timing for a larger planned maintenance turnarounds, we expect a more significant impact in 2020 to be in the second quarter of roughly $25 million to $30 million in line with previous expectations.

This follows our large planned turnaround of $25 million just executed in the fourth quarter of 2019. As a reminder, our large planned turnarounds are typically a year apart.

In addition, we expect CapEx will remain relatively high in the first half driven by the spring 2020 turnaround, as well as the completion of our key growth projects, but will then start ramping down as the year progresses. In total, we now expect full year 2020 CapEx in the range of $90 million to $100 million and that’s down about $50 million to $60 million on a year-to-year basis.

Given the challenging end market environment, we’re targeting the low-end of the range and continue to be disciplined around reinvestment in the business. Approximately 14% of our 2020 CapEx will still be on high return projects as we continue to mature our long-term pipeline of opportunities.

Now, as you saw in our filing this morning, we announced an amendment to our existing credit facility due primarily to timing considerations, which will provide flexibility as we navigate through the current dynamic. As mentioned, the CapEx will be heavier in the first half of the year before ramping down later in the year, which will drive negative cash flows in the first half.

Another timing consideration is the impact of two large planned turnarounds within six months of each other on EBITDA. In the second and third quarter of 2020, the trailing 12 months EBITDA will have approximately double the typical impact from turnarounds.

The credit amendment accommodates for these timing considerations, which will have the effect of increasing leverage ratios in the first half before reversing in the second half. So, overall the timing consideration and we remain confident in our cash flow generation and cash deployment opportunities.

As a reminder, one other consideration for our cash flow linearity is our annual ammonium sulfate pre-buy cash advances program. This occurs in the fourth quarter typically for the spring sales in the following year.

So, some timing differences between sales and cash. Now, given the puts and takes across the portfolio, we expect free cash flow to remain negative through the first half of the year.

However, second-half free cash flow is expected to be positive, commensurate with what we’ve previously demonstrated and more than offset the headwinds in the early part of the year. So, overall, we expect positive free cash flow for the full-year of 2020.

And let's turn to slide 10 to discuss our outlook for 2020 before turning to Q&A. Similar to what we presented last quarter, we’ve highlighted our expected trend for each of the key drivers of our performance with the red circle representing a headwind in 2020, yellow circle neutral, and green representing a tailwind.

From a product line perspective, the end market environment has remained challenging exiting 2019 and over the first two months of 2020. We continue to face unfavorable industry conditions in nylon space.

As Erin mentioned earlier, the nylon demand environment has remained weak across most major end-users and we expect industry oversupply to continue. So, while we are cautiously optimistic about our news review on ammonium sulphate and chemical in intermediates, given the nylon challenges we continue to expect total market pricing to be a headwind overall in 2020 on a year-over-year basis.

Based on expected operational performance, we also anticipate improved volume overall in 2020 and remain focused on value pricing our more differentiated products based on their performance characteristics in higher value applications to help mitigate the broader macro softness. Operationally, no change to our planned turnaround schedule for 2020 which remains at $33 million to $38 million pretax income impact and will be heavily weighted towards the second quarter of this year.

We expect continued improvement in performance across our integrated asset base supported by our proactive maintenance and reliability programs. I highlighted our expectation for CapEx spend on the previous slide, we continue to expect full-year benefits from our new natural gas boilers at Hopewell and expect our caprolactam quality and debottlenecking project to be fully online sometime in the second quarter of this year.

Lastly, as we continue to expect an unfavorable impact of pre-tax income in 2020 from the PES supplier disruption and shutdown in the range of $10 million to $15 million. This represents a flat to $5 million increase year-over-year.

Over the medium-to-long term, we see cumene supply and demand dynamic supportive of sufficient availability and continue to assess our long-term optionality. So, overall, we’ll continue monitoring developments in our end markets, while driving strong operational performance enhancing our long-term growth capabilities and making smart and disciplined investments in the business to drive higher returns.

Now, with that Adam, let's move to Q&A.

Thanks Mike. Britney, please open the line for Q&A.

Yes, hi. Good morning.

Good morning, David.

Okay. So, only a few questions, I think the first one I’d like to maybe just touch on your year-end balance sheet so, in particular the inventory level I think is at an all-time high at least for while you’ve been a public company and I guess that kind of moving in the opposite direction of quarterly sales trends recently.

So, what is it that either strategically or tactically is going on there that has led to the pretty significant inventory build-up, the last couple of quarters including the fourth quarter? Thank you.

Sure. Sure, Dave.

I'll take that one. As you point out, the inventory at the end of the year came in at 172 million that is the highest level of the year, but that’s driven by a few factors that I'll cover here.

First of all, raw material inventory was also the highest level that we saw all year and that’s really driven by the timing of cumene deliveries. There actually became more spot purchases or spot cumene available for purchase here in the fourth quarter and we took advantage of that to really to add to our buffer inventories, you’re familiar with the PES shut down here and we felt that was good opportunistic time to increase those inventory levels.

So, that’s one factor that we saw here in the quarter. The other factor is around finished goods and with inventory, those inventories where a [115 million] at the end of the quarter and we’ve highlighted over the past number of quarters some of the challenges around nylon and what we saw is higher resin inventory, and we’ve been seeing as we’ve discussed a lot of changing demand dynamics in that business.

We operate six different lines at Chesterfield where we make the resin and we’re adapting our operations to those changing demand conditions and as a result we have a bit of a different mix here in higher resin inventories. We expect those inventories will go down throughout the year and by the end of the year gets a more normalized balance or more normalized level.

The other factor on finished goods and with inventory is ammonium sulphate inventory levels, which were a little bit higher than what we would normally expect. Some of that is really being driven by a greater mix of standard grade production relative to granular production of ammonium sulphate and the sales timing associated with that and we expect ammonium sulphate inventory is in Q1 to come down to more normalized levels and I would say overall in Q1 inventory is anticipated to come down.

So, that’s really what’s driving the inventory levels.

Okay, thank you for that. And just one more quick one, one more on the balance sheet that in current liabilities there’s the deferred income item, I guess, $19 million and I see it includes customer advances.

So, I just want to clarify that in your prepared remarks you touched on the pre-buying for spring fertilizers is that what’s the third quarter two fourth quarter bump is related to?

Yes. As you point out the balance at the end of the year was 19.7 million.

That is prominently related to our ammonium sulphate pre-buy program as we typically see in the fourth quarter and what you’ll see during the year is that balance decline in the first half of the year as we sell the ammonium sulphate through the season and those advances come down and typically get to a low point right around the June and July timeframe before building back up in the fourth quarter. From a modeling perspective it is an important consideration as you think about the linearity of cash flow during the year, and we expect the same factors to come into play as we look at free cash flow and cash flow generation in 2020.

Sure. That makes sense.

Thanks for clarifying. I’m now going to ask kind of the China coronavirus and other kind of issues question, which I think for your company has a little bit more multilayer then for some of the other companies I follow, but the nylon business both on the supply and demand side has been driven by Chinese factors auto production and new capacity for the past several years and now there is kind of a certain amount of uncertainty injected in, I guess in both of those areas, I know it’s early days, but at this point how does your company prepare or what’s your thinking about your ability or what are you seeing in the market – opportunistic exports bleeding outdoor, you know what’s your market intelligence tell you that the Chinese nylon industry is how they’re reacting here, and you know, I guess I’m wondering about how this, what challenges it might present you to maintain that high Hopewell utilization rate that you cited earlier and the various benefits that maintaining the high utilization provides?

Thank you.

We can take that in few different steps here David, maybe these two to calibrate us all just from the teams that which China plays out in all of our end markets because as you point out sales into China really only represents about 1% of our total sales and closer to about 3% of our caprolactam and nylon sales is small from a standpoint of our direct participation, but obviously as you point out either more significant from sort of how China impacts below the broader consideration of these industries and that’s because when you look at China they represent 50% of the total nylon supply and demand, on the phenol acetone perspective they are 20% of the phenol acetone supply and 25% of global demand. On the ammonium sulphate they are nearly 40% of the total AS supply, but only 13% of AS demand globally.

So, as you say, it’s early days, but we could see both second and third order consequences are impacts here potentially playing forward. From our intelligence, we’re certainly seeing that prolonged demand weakness has played what I believe the last weeks utilization rates from our intelligence puts China utilization about 54%, right.

So, certainly that’s lower than where they have been driving. We’re also hearing about the potential mismatch between production and consumption, right as the transportation and logistics and various points of these sort of multistep integrated chains play out that is causing challenges again that has to play forward a little bit, but we’re really watching out as you say for the impact on trade flows between China to the rest of the world and in between other regions that could create either challenge or opportunity for demand and pricing.

And from our standpoint, relative to our positioning the reach that we have, you know for us we’re, we continue to stay focused on ensuring that our reach allows us to place product and to the most opportunistic and best geographies and application mix that’s available to us. So, that remains our focus both here in the U.S., as well as into the export markets and then again looking to where there could be disintermediation that provides opportunity as well.

Okay. Thank you for that.

I know it’s very early days and it’s just kind of multi-layered kind of situation at this point. I'm going to get back in queue.

Thank you.

Okay. Thank you.

Yes, thanks. Good morning, everyone.

So, I wanted to ask maybe a little bit of a longer one on your R&D initiatives, particularly in nylon, so I’ll try to be clear three parts. First, when you look at how is your position to compete in composites.

I was curious how broad your portfolio is today in terms of fiber sizing, and the number of base resins that you are able to optimize for? And then the second is, just you introduced the nylon fixed products last year with some of [6/6] characteristics, you know tough environment to launch in to.

So, any update on progress there and any success you’ve had getting that specked in with OEMs and the last one is just simply any strategic priorities you want to share for the Oben partnership in 2020 and if we can expect any measurable margin improvement from the combinations of the possible shutdown and any new film sales?

Sure, we can. Happy to talk about your bit here.

So, maybe I can start around really our focus into engineering plastics and where we sit in the value chain to sort of set a – some context right. So, our focus is ensuring that our customers who really the target here is the independent compounder then serving OEMs whether it be in automotive and consumer products, industrial electronics so they are armed with the best resins to meet their solution needs.

So, and from where we sit in that chain, obviously when you come to the number of things that those compounders need is all solutions is as you say a variety of resins, both from base homopolymers to homopolymers with masterbatch blends perhaps, and then obviously we have our co-polymer capabilities that we have invested in and continue to bring forward. So, I would share that we made great inroads this past year as I noted in my remarks, you 30% volume growth into this space.

I would say that certainly the focus is, we need to get those high-volume products into the space first, so that we’re there as a partner. And then we have a number of programs that lead us into those more bespoke tailored solutions underway.

And so we've seen opportunity and growth in our wire and cable sales as an example and our copolymers are out for testing and solution providing, but those are the ones where again there are going to be smaller volume, more tailored solutions, you know, we’re excited about the projects that are in the queue, but those are coming with time and as you say 2019 wasn't a fabulous year relative to sort of the demand pool if you will for projects, but an area that we continue to stay focused on, you know tours of our site and driving those collaborations, again this is long-term and we feel confident that we’re moving in the right direction. So, if I touch on Oben, again the Oben alliance here was really a win-win for us relative to the ability to continue to have great quality films and use current best-in-class manufacturing technology to serve our customer base.

We remain committed to that transition and that’s moving along. And really this year key things that we’re looking at is being able to now look at, just not our base films but using the capabilities around metalized films, as well as other characteristics and opportunities that they have, you know working with them on their other film opportunities that they have, they also are our BOPET and BOPP supplier.

So, more to come there, but I would say, we are well underway and making good strides relative to really our transition plan and alliance focused.

Great, thank you. And you’ve provided some really helpful remarks on acetone, but 2019 was a bit nuts in North America, specifically, so I was hoping you could just give us the lay of the land today in North America, including any numbers you could possibly put around MMA, demand and capacity on a year-over-year basis.

And then on that note, the market appears to be moving towards more balance today. So, what’s your impression of the basis for these aggressive large buyer bids that you’ve referenced?

No, that’s great. And a lot of it is contextual to where and when, you know sort of annual contracts get negotiated and they are typically done at the end of the year prior to the start.

At that time, we still had a fair amount of inventory in this system, and so again when you have these dislocations in supply demand length it can lead to aggressive and sort of phonetic competitor behavior. We do see the large buyer volumes moving back.

We do have, you know and see their demand profiles picking back up relative to where we were last year, and really our focus here post the petition now that we have some duties in place, but also rightsizing to the supply and demand balance, but our main focus here, Vincent is really to seek to lead in returning to really what we believe is good fair disciplined pricing in the marketplace and that’s our current level.

Great, thanks. And just a quick one on the trade case, if you're able or willing to share, is it the opinion of your council that the ITC is favorable decision in the Spain and Singapore duties, but specifically the damages reads very favorably for finding damages in the remaining trade cases?

Great question. I think we would share that, we would expect the same rationale and approach that apply with the first two countries to carry through and read through to the final three.

Excellent. Thank you so much.

Good morning guys.

Good morning.

Good morning. Talk a little bit further about, you had referenced on Q3 that kind of shifting geographic sales and talked about a little more today, maybe can provide some specifics there and I know it is response to near-term market conditions, but is it kind of a longer-term trend as well?

So, what you're going to see in really where, as again the robust performance comes out of Hopewell, you know certainly in the current dynamic and in the U.S. that, you know, you should think about that last time that's coming off really is going to have to be an export pound, right, that’s just where we sit today.

And so, that – you know as we proceed certainly in the near term and over the last quarter, you know, we’ve seen that influencing that. So when we talk about mix and sort of impact, you know, that is, you know, a pound that’s going into the spot market.

You know, now as the leading global cost advantage player, that’s still a good pound for us, but we just wanted to be transparent and clear that that is something that, you know, is happening and would continue to happen for now. as we continue to shift the portfolio, and again, as we talked about, you know, moving and offsetting the declines in carbon into engineering plastics and packaging, those are growth application, and so, we do believe over time as we continue to progress in that nature of that, you know, we’ll continue to get that mix shift in the direction that we want for the long term.

Got it, that’s helpful. It’s all I had, thanks.

Okay. Thanks, Chris.

Thank you.

Thank you. I have a couple of questions.

First of all, would you please repeat the duties, the February 7 determination on acetone?

Sorry, give me one second. So, Belgium has – you know for Ineos has a final duty determination of 20%, as do all others exporting from that country.

In South Africa, Sasol has moved to 415 roughly percent with all others moving to around 315%. And then, in Korea, we have a move against two players.

Kumho came in at just shy of 48; LGC came in just around 25 with all others at 33.

Great, thank you. And then, you made reference to soybean market or ammonium sulfate, and that’s very early, you said, I guess two questions.

First of all, how many acres are you anticipating being planted this year? And is that going to influence the business at all?

Or is it still truly in trial phase? And then secondarily, how many acres of soybeans are planted in the United States relative to corn?

Okay. So, we can – give me one second here.

So, we talked about soybeans. Really our large focus here, Bill, has been on the U.S.

and Brazil. So, maybe I can kind of just frame, you know, how we’re thinking about that.

So, if we think about, you know, 164 million acres kind of combined for those two regions, you know, in sort of a modest adoption, and again, so early days, but if we – you know, if we applied that sort of a 20% adoption rate, that could yield right to mid-to-high digit percent increases in AS demand opportunities. So, you know, well north of, you know, a million tons, which is, you know, significant growth opportunity just in two regions.

So, I hope that puts a little bit of color commentary, you know, around that opportunity. And then, for AS relative to corn or just corn in general, I believe the [indiscernible] still is maintaining in and around, you know, 81.5 acres, you know, for corn and their yield targets around 160 bushels.

It kind of have remained same for the last couple of months.

And for soy, you're looking of roughly 75 million acres planted here in the U.S. approximately, so it’s little bit lower corn.

But still very close to a similar number.

Yes.

Yes, in general, I mean those two tend to be the two largest crops planted here, you know.

And is there any indication at this point with your early research that the penetration of ammonium sulfate into soybeans, really there should be any more or less than corn?

So, it’s obviously all application rates. You know, when you look at ag are soil dependent so they become regional dependent, as well as, you know, tied to what the planning is, but hopefully just what I shared, again early days, you know, just kind of framing what could be a, you know, a modest adoption.

You know, there's got to be a strong grower education program here. All of the things – you know as a leader in this space, you know, this is what we've been doing for quite some time.

We believe differentiated, compared to our other AS, you know, competitors here and, you know, committing to the research, you know, driving opportunities for global demand growth. And so, we’re excited and I think we’ll be able to share more as time unfolds here.

And then, the first part of the question was acres that you would expect this year and if you think it has an impact at all or whether – because I think you answered the question for the long-term.

Yes, so I think, you know, again, near term, we’re out talking with folks today, but again, in any adoption cycle, you know, I think it becomes, you know, several fertilizer seasons before you have the approach there. So, you know, I think that’s the reason.

And was your question on corn acres planted specifically in the outlook for 2020, was that your question?

No. I'm sorry, it was – it really was soybeans and whether there’d be any material impact this year whether it was still too early?

Got you, okay.

Thank you. And then, my last question is the boiler project.

Were you originally planning for that 30% plus IRR and which typically being conservative is not knowing, frankly, the unknowns? Or were there some things that developed that let the IRR to actually be graded in what you anticipated?

Yes. So, the spend overall, when we talk about $40 million in CapEx, which includes most of that – sorry the $40 million in spent most of that being CapEx is a little bit of expense in there.

That came in line with our expectations, which has an impact, obviously, on the returns and the benefits. Really it comes down to the performance of the boilers, which are coming in in-line or better than what we had anticipated, which we now have some run time with them after them being up and starting up in the third quarter of last year, as well as a lower natural gas environment.

You know, we’ve seen natural gas prices decline and that has provided more of a benefit than what we had anticipated. You know, I think it's tough to predict exactly where, you know, the future of natural gas prices are going to go.

it's – you know some of it is weather dependent, supply-demand dependent overall, but as you saw, natural gas prices have been down, have been low, and some of that being driven by, you know, the warm weather conditions we’ve seen here. So, when you kind of reset those expectations going forward, that doesn't prove the returns on the project.

Thank you both.

Thank you.

Thank you.

Okay, hi. Just a couple of follow-ups.

So, first would be on your CapEx programs and I believe in Michael’s comments you talked about major project or two being completed in the first half of 2020, and I was just wondering if you could remind me which projects are due to be completed, and you know, put into service in the first half of 2020, is that the caprolactam expansion and upgrade or something else?

Yes. So, when we first really started talking about, you know, these growth and cost savings products in the pipeline associated with that the $150 million to $200 million of, you know, multi-year pipeline that we have and opportunities that we have, it – really the two big projects that we started discussing are the boiler project, which we talked about, started out in the third quarter of last year and we’re seeing really good benefits from that one.

And the other one is the caprolactam bottlenecking project, which is set to be completed here and start coming online here in the second quarter. You know, the one thing I'll say about that project, you know, obviously more caprolactam production goes into the nylon space.

Nylon, as we’ve talked about, has been a bit more challenging from a supply-demand perspective and we’ve seen, you know, adder and the margins compress a little bit here. But for us, we’re still very excited about that project.

Over the long term, we anticipate it will expand our caprolactam capacity by 2%, as well as improve our yields at our downstream Chesterfield resin plant, which will provide benefits there as well. So, that project is again anticipated to come online here in the second quarter.

Okay, great. And just last one, when I look at your – when I look at Slide 10 and I look at your red light, green light, yellow light layout, I mean everything kind of seems to align with your comments, would perhaps the exception of the chemical intermediates and you assigned that a yellow light and I’m just wondering, but my impression was your acetone business was pretty depressed last year such that yourselves and other producers you know persuade any dumping relief, and now that relief seems to be coming in to play, and I don’t want to read into it too much, but the graph, I think on Page 7, kind of point to may be a stabilization in acetone pricing even while underlying propylene costs, you know continue to decline.

So, I am just wondering why yellow and not green when you compare full-year 2020 to full-year 2019, which again I thought was fairly depressed from a longer-term perspective? Thank you.

No, sure, and appreciate the question and the challenge here and as we look at the year and certainly Mike pointed out, of the stoplights on that page, and the neutral ratings on AS and chemical intermediates, I think those are the two that we remain cautiously optimistic about as we move forward here into 2020. Obviously, on the acetone we have a number of great mileposts that are moving in our direction and we now need to go do the work to lead pricing back to that fair and disciplined level that we believe that the market should bear and that’s the work that’s underway.

You know the duties themselves don’t snap back the market to previous states. So, work to be done there, but again we’re feeling good and we’re focused on it, but again I think it a good call and certainly one where you were going to watch and while we were really – we struggled to cut the length of the oversupply, right.

I think, if we go back to where we started, but again good milepost that we’re seeing and we do have some cost optimism here on that being able to improve throughout the year.

Alright, thank you very much for that.

Thank you.

Great. Thank you all again for your time and interest this morning.

As we continue to navigate end market dynamics, we remain focused on successfully executing against our strategic priorities and positioning the company for long-term success. While planning conservatively in the near term, we’re confident in our ability to build upon our advantage foundation and are excited for what we can accomplish for all of our key stakeholders through 2020 and over the long-term.

We look forward to speaking with you again next quarter. Have a great day.