Ladies and gentlemen, thank you for standing by and welcome to the Ashland Global Holdings Inc. Fourth Quarter 2020 Earnings Conference Call. I would now like to hand the conference over to your speaker for today, Seth Mrozek. You may begin.

Thank you, Tawanda. Good morning everyone and welcome to Ashland's fourth quarter fiscal year 2020 earnings conference call and webcast. My name is Seth Mrozek, Director, Ashland Investor Relations. Joining me on the call today are Guillermo Novo, Ashland's Chairman and Chief Executive Officer; and Kevin Willis, Senior Vice President and Chief Financial Officer. We released preliminary results for the quarter ended September 30, 2020 at approximately 5:00 PM Eastern Time, yesterday, November 10. The news release issued last night was furnished to the SEC in a Form 8-K. During this morning's call, we will reference slides that are currently being webcast on our website ashland.com, under the Investor Relations section. The slides can also be found on the Investor Relations section of our website. We encourage you to follow along with the webcast during the call. Please turn to slide 2. As a reminder, during today's call we will be making forward-looking statements on several matters, including our outlook for fiscal year 2021. These forward-looking statements are subject to risks and uncertainties, that could cause future results or events to differ materially from today's projections. We believe any such statements are based on reasonable assumptions, but cannot assure that such expectations will be achieved. Please refer to slide 2 of the presentation for a more complete explanation of those risks and uncertainties, and the limits applicable to forward-looking statements. Please also note that we will be referring to certain actual and projected financial metrics of Ashland on an adjusted basis, which are non-GAAP financial measures. We will refer to these measures as adjusted and present them in order to supplement your understanding and assessment of the financial performance of our ongoing business. Non-GAAP measures should not be considered a substitute for or superior to financial measures calculated in accordance with GAAP. The most directly comparable GAAP measures, as well as reconciliations of the non-GAAP measures to those GAAP measures are available on our website and in the appendix of today's slide presentation. Please turn to slide 3. Guillermo will begin the call this morning with an overview of Ashland's results in the fourth fiscal quarter. Next, Kevin will provide a more detailed review of financial results for the quarter and the fiscal year. Finally Guillermo will close with key priorities and planning in the current economic environment, in addition to providing his thoughts and the important next steps. We will then open the line for questions. Now, if you could please turn to slide 5, I will turn the call over to Guillermo for his opening comments. Guillermo?

Thank you, Seth, and good morning to everyone. Before I begin, I'd like to thank you for your participation this morning. I hope that everyone is safe and healthy in these unprecedented times. As we have stated throughout the year, our first priority has been protecting the health and safety of our employees. Second, we have continued to supply our customers in the critical industries that we serve. Despite all the challenges that presented this year, we have also remain committed to executing our strategy. Importantly, this means, expanding our margins, enhancing our free cash flow conversion, demonstrating the resilience of our business and working to accelerate organic growth, in each of our business units. I will discuss these aspects of the strategy in more detail at the end of this call. Please turn to slide 6, in summary, Q4 results demonstrated the value of our leadership positions in high quality end markets, and the importance of the actions we are taking internally. Our consumer business continues to demonstrate strong resilience, posting 4% sales growth during the quarter. And we realize substantial sequential improvement in the Industrial business, as global demand continues to recover during the quarter. On the self-help side, we continue to make significant progress on driving our business focus, restructuring costs, improving margin and reducing inventory levels. This resulted in improved free cash flow generation, in both the quarter and the full year. Kevin will review our inventory actions and the impact to free cash flow in more detail in a few minutes. I'd like to recognize the entire Ashland team for their focus and commitment to our success during these challenging times. It's a real privilege to be a part of this team. Let me pass the call over to Kevin to review our Q4 results and full-year in more detail. Kevin?

Thank you, Guillermo and good morning everyone. Please turn to slide 8. Total Ashland sales in the quarter were $609 million, flat with the prior year period and up 6% compared to the June quarter. These results reflect continued strength in our consumer businesses, and substantial sequential improvement in our Industrial businesses. Excluding key items, SG&A and R&D costs again declined in the quarter, as we realize the positive impact of the cost reduction program, and new cost actions. In total, Ashland's adjusted EBITDA was $154 million, a 3% increase over the prior year quarter, and adjusted EBITDA margin was 25.3%, a 70 basis point improvement over last year. Adjusted EPS, excluding acquisition amortization, was $1.25 per share, up 21% from the prior year. Now let's review the results of each of our three business groups. Please turn to slide 9. First, I'll begin with Consumer Specialties; sales were $344 million, up 4% from the prior year quarter. The impact from favorable currency represents approximately one percentage point of this increase. Within Life Sciences, pharma continued to perform well, up high single digits in the quarter, driven by strong demand for pharma excipients. And after a few challenging quarters, the nutraceuticals business returned to growth, thanks to a lot of hard work and dedication by the team. Nutrition sales were down during the quarter, as our food and beverage customers continue to be challenged during the pandemic. The Personal Care sales were down low-single digits during the quarter, as we continue to lap prior year business losses in oral care, and experienced lower demand for hairstyling and suncare products, due to the pandemic. Home care sales were up, as the market for our hand sanitizer additives, continue to grow. Avoca sales also grew and while the business remains challenged, we're…

Thank you, Kevin. Please turn to slide 15. As we look to our fiscal year 2021, our priorities are very clear. Drive margin expansion, enhance free cash flow conversion, continue to demonstrate business and operating resilience; and accelerating profitable growth. To achieve these objectives, we have clear levers that we plan to act on, with the same discipline we showed in 2020. To capture cost savings carryover from the $50 million SARD cost reduction actions we've completed in 2020, and accelerate the capture of the $50 million of cost of goods sold reductions we have already identified. Drive productivity and mix improvement from innovation, focusing on our more profitable strategic segments and exiting some lower-end product lines. And align our capital allocation priorities for CapEx and working capital, consistent with our strategic priorities. During fiscal year 2020, we had the opportunity to demonstrate the underlying resilience of our businesses, as well as our improved operating discipline. We will maintain focus on driving continuous improvement in our business centric model, in our operating discipline. As I will comment later, fiscal year 2020 has not been just about our transformation and margin improvement. We have used this time to reset our strategy for each business, and rebalance our innovation portfolio to accelerate growth. As we enter fiscal year 2021, our focus will be shifting to accelerating profitable growth drivers, both organic and inorganic. Please turn to slide 16. For fiscal year 2021, the drivers of performance are revenue growth, and the net impact of our self-help actions, partially offset by some cost reset items. Although we do not control the COVID impact on demand, we do have control over our self-help actions and our cost management discipline. While the macroeconomic environment continues to improve sequentially in parts of the world, recent developments,…

Thank you. Our first question comes from the line of Chris Parkinson with Credit Suisse. Your line is open.

Great. Thank you very much. Can you just talk a little bit more about your cost programs and reconcile your $100 million target with your remarks on the additional $20 million to $25 million of cost benefit for '21, highlighted on slide 16? And then also the COGS cost reductions, so just put simply, isolating any EBITDA contribution from revenue growth, how can we isolate these factors for fiscal year '21 and even '22? Thank you very much.

Okay. So, if you remember what we talked about in our journey, at a minimum, we wanted to improve our cost structure by $100 million. This year we focused on the SG&A, R&D, so SARD. We've already identified, hit the run rate for $50 million. We have -- part of it came in this year. The bulk will be coming in next year, and then there is a little bit that will spill over into 2022, but the majority of it will be done by -- it's already the run rate. So it will be coming through. So a big part of that number is the carryover of that SARD part that we did today. I think the good news for us, on the cost of goods sold, we had two objectives. The minimum was another $50 million, but we also see that there are other opportunities that we look at, plant footprint, networks, other things we wanted to do. But we set a goal of mid of hard cost savings of another $50 million. The good news is, we've already identified that $50 million plus or minus a few million, and we're already executing on it. So the issue now is, how quickly we can move. And so what the net impact will be for the year, will be an issue of how quickly we can bring those costs in, part of that is in the U.S. and Europe. If you look at our manufacturing footprint, we have one plant in Asia. So we just have to manage on the timing of that. And how big that will be? We do have some cost resets in terms of incentive comp and other areas. So I'm assuming right now that, some of that will just offset the cost resets, but there is potential for more, if we can accelerate more. The plan is, we've already identified what we're going to do, and that's not a surprise, it's really more the timing. And similar to what we did in this year, is we're not waiting to do all the math of what timing is, we're just going to do it and we'll report it as we go. I think that worked well for us in terms of moving with speed -- moving forward.

Yes. And we will let you know in the December quarter earnings call in January, kind of where we are from a run rate perspective on the COGS savings at the end of December. But team is very much, very much focused on executing on those items as Guillermo said, we have a detailed list of it all, and we're right at $50 million mark. So we feel really good about that.

That's helpful. Thank you. And just as a quick follow-up as -- when we look at PC&H on the growth front, can you just parse out the trends that you're seeing in Personal Care? Just any high-level remarks on skin, hair and sun, understanding the latter is obviously in a seasonally weak period. Just -- I am trying to get a sense of your general assessment, of how these end markets should grow in normalized environments, and also just how sustainable are the benefits in hand sanitizers? Thank you very much.

So I would say the -- for the quarter, frankly, other than the stronger recovery in some of the industrial segments, everything sort of played out the way we've talked about and communicated before, all segments, including personal care, performed in line with what we had been expecting. If you look at the Personal Care segments, the two segments that are mostly impacted by COVID and the demand impact it has, it's on the hairstyling, the salons. People aren't going to salons as much, and the suncare. Those are the two. They remain the two areas and depending on what happens in 2021 with COVID. I think those will still be the areas of focus, and potential upside improvement, depending on how things develop. The other ones, we don't see any major changes. I think from a market perspective, hand sanitizers -- it has evolved. The first thing was just get product out there because of the urgency. I do think that there will be a little bit of inventory absorption across the entire chain that early on, there was a lot of lower end product that got made. But what we're seeing now is, this is becoming a long-term category, that you know, where everybody expects we will continue. So the product sophistication is increasing. So we've actually expanded our product line offering, so that we can now offer different value points for our customers in terms of cost, in terms of sensory feeling if you want, different texture, moisture. If you go into some of the stores, where they give you free -- some become sticky or has a residue after that. All these -- the products for the future are going to evolve and get more sophisticated. So that brings an opportunity for more targeted technology. So we've actually -- it's not one product we're selling, it's a portfolio of products and some of the new formulations are really focusing on sustainability, biodegradability and natural products. So there is a lot more happening there. I would say in the other part I would comment on in the Personal Care and Household is the Avoca. Obviously that Kevin mentioned, that has still been challenged this year. But as we go into next year, I think our production rates will increase, so that will be good on our absorption. And I'm really excited about -- I mean this is one of the biotech areas for us, in terms of high volume extraction, purification activities that we do, and the team really has done a great job in finding new product lines, some that we can -- that are already kicking in and we're getting new capacity in working with some customers. But there's a lot of new products I think that we want to bring into the household segment that are exciting too. So more to come there, but there is -- obviously the team has been very busy in that area.

Thank you.

Thank you. Our next question comes from the line of John Roberts with UBS. Your line is open.

Thank you. Since we're midway through the fourth -- through the December quarter, could you -- and you probably have your orders, I would guess through November at this point. Can you give us some sense of what the December quarter is looking like?

Well again, I don't want to look forward too much, as there is a lot of uncertainty right now specifically, if you look at what's happening in Europe, U.S. But I can say that things are strong. We don't see a change in the trendline that we had from prior quarter at this point in time.

And then, could you talk about what your average operating earnings are now, since you through the inventory controls? Maybe compare them with the pre-COVID levels or maybe just for the large units like cellulosic -- and BDO?

So I think one of the big messages is, look we're entering 2021 lean and ready to roar. I mean, we've taken a lot of actions, costs, there is more things we're going to do, inventory. So right now, obviously, as Kevin said, we want to stay disciplined in terms of not letting inventories creep and we're not -- we're really going to try to operate with a very disciplined S&OP process, sales operations and planning process, so that we're meeting demand. So most of our plants are improving our absorption rates, obviously versus this year. You saw the numbers on the inventory reduction, but if you look at prior quarters relative to prior year absorption rates, were lower. So there's a lot of upside potential as we move there. I don't have right now, Kevin, I don't know if you have any comments on the utilization rates by groups? I mean, we don't give out by plans, but by groups, but it's much improved, and I think that's one of the upside potential. If you look at recovery, every 1% of sales, a significant impact, obviously on the gross profit, but that absorption rate -- contribution margin rate is much, much higher. So that would be very positive for us.

Okay. Thank you.

Yes. I mean, that's fair. John, I would say that our plant footprint is operating normally at this point. We got through the inventory control piece, which was obviously huge, and everything is operating, I would say normally, and as it should be at this stage of the game. To Guillermo's point, to the extent we can see more of a recovery, above and beyond what we talked about in that that 2% to 4% range, there is only upside in terms of contribution margin, because we do have some large plants, that conversion cost is pretty high, and so to the extent you do increase topline and volumes in those big facilities like a Calvert City, Texas City, Hopewell, you do see -- you do see a lot of uplift in the margin.

Great. Thank you.

Thank you. Our next question comes from the line of John McNulty with BMO Capital Markets. Your line is open.

Yes. Thanks for taking my question. I guess the first one would be on the top line. You highlighted that there is going to be a number of product lines that you discontinue or shut down. I guess can you quantify what that impact of the topline overall would be roughly?

I mean we haven't shared that obviously, because we have to work with customers online, and do this in an organized way. But it's a lot of what we've talked about in the past of, buy, resell products. It's tens of millions of dollars. In a time where everybody is looking at every percentage, it does impact on that, but it's marginal. And mostly I would say in the Personal Care area, but it doesn't impact our EBITDA at all. I mean the margins are not -- that's not our priority. We're not here to sell anything. We have a clear strategy and we're focusing on where we're adding value and can create value for our customers.

Got it. So maybe a quick one then...

Should also enable the team to be better focused, as we remove this, what I would call maybe a distraction from the mix.

And working capital.

Correct. Yes.

Yes.

Got it, Okay. That's helpful. And then I guess the other question would just be on the CEO priorities that you've listed on one of the slides. One of them was around M&A. And I know that was something you were holding off on, until you kind of got things a little bit more in order at Ashland overall. I guess do you feel like you're at a position now, with line of sight in terms of -- in terms of the things that you're working on to improve. Do you think you are at a point now, where we could actually look to M&A, starting to roll in, in 2021, is that kind of what that messaging is about?

Yes, we have, I mean -- and if you look at it, in the segments that we've articulated, additives, biotech. I mean, when we talk about biotech, it's also about additives. It's just because we need to build broader capabilities. That's the priority area. And Asia, obviously, growth in Asia would be the other one. So I would look at -- the key priorities is Pharma, Personal Care, Coating. So we said are sort of our big areas and expanding our adhesive business globally would be -- I would add that, although it's not an additive area. It is a very profitable business and we are committed to driving its growth too.

Got it. Thanks very much for the color.

Thank you. Our next question comes from the line of David Begleiter with Deutsche Bank. Your line is open.

Thank you. Good morning. Guillermo or Kevin, on the 2% to 4% sales growth, can you break it down between volume and price and mix, any FX headwinds you might see next year?

Kevin, I'll give you some time to think through the -- all the other details. But I would say at the core growth, volume, which is the big driver. Our consumer business has performed this year. We can see a continuing it. So it's really that level of growth moving forward. I would say on the percent impact, obviously the exiting lower end. Again, it's not a meaningful EBITDA impact, but it will -- as a percent, I mean long term, it doesn't really change anything for us. But this year obviously at a percent level, it reduces the Personal Care a little bit. But I would say, it's more of a continuation in the consumer side. I think the part that -- we are projecting what we're seeing today and we recognize the upside. We don't -- we're not, we're not ignoring it, but we don't control it. I think that's where we say, look, the 2% to 4% improvement that we're seeing in our underlying business, in the industrial side, we're comfortable with this project, in a sense that there is limited downside. Unless everything shuts down again, we don't see that going back. The part that we don't want to get ahead of ourselves or the hope is, that everything is just going to recover. To be clear, I mean we hope that things are going to improve and the underlying recovery accelerates. But hope is not a strategy, and we're not here to sell hope, we're here to deliver results and I think it's probably better for us to plan on the things that will drive a more disciplined operating performance, and we're comfortable with the numbers we're laying out right now, based on those scenarios. But Kevin, I don't know if you want to add any other color?

Yes, sure. As you know, the volume side of the equation is much heavier levered to the industrial businesses. And so, it's probably 70/30 split give or take between industrial and consumer on the volume. Even though the consumer revenue is a fair bit higher. As we look at 2021, I'd say the main driver is going to be volume and a lot of that's going to be on the industrial side, and we're going to be looking to areas like Coatings and Adhesives in general to drive that. Energy is going to continue to be a headwind. We expect -- I don't see that changing, it's not a huge part of the business, but it's down pretty significantly, and that's probably, that's probably going to continue. We should see some positive mix as well, which will help margin. I think the mix between price and raws is going to be pretty well balanced on an overall basis. And so I think that's kind of going to be the story. And you take a step back and look at it. I think the consumer businesses are going to continue to perform as they have. Guillermo mentioned, and we've talked about some of the purchase for resale stuff that will be exiting. Not a big impact. You'll see a top line, bottom line not. And really, it kind of comes down to, how do those industrial end markets perform, and to the extent they recover better, then we should see that flow through our results, in a pretty meaningful way.

And toward that question, Kevin and Guillermo, incremental gross profit margins next year on these higher sales, how should we be thinking about that dynamic?

I mean, if you just look, I mean you can -- although we didn't give guidance, I think you have some good numbers to model different things. But 1% incremental growth, you look at our current gross profit that. So what that does on the gross profit, and then on the absorption right now, Kevin -- I mean it depends on the mix, but if it's more toward the industrial side, that is the higher asset cellulosics as an example. You could see a significant percentage increase, in terms of margin impact for those products. So the upside is.

That's right. In the larger facilities, and this is going to be cellulosics and acetylenics primarily. Adhesives, not, because their conversion costs are a much smaller percentage of COGS. But if you look at those big facilities, contribution margins can be north of 50% for incremental volumes, and that's more of a rule of thumb. It depends on the plan. It depends on the product line, but rule of thumb is 50% plus contribution margins.

Thank you very much.

Thank you. Our next question comes from the line of Laurence Alexander with Jefferies. Your line is open.

Hi. I have two questions. One, just a follow-up on that, given the incremental margins and the cost savings, and the favorable mix effect and the fixed cost absorption on the large units. It looks like you are bridging effectively to a 10% to 14% EBITDA growth. Can you talk a little bit about what factors might be against that, in terms of stepping up SG&A investments, or growth or any other kind of levers that you might have or areas of leakage? And the second question is on sustainability, roughly what percentage of your products are kind of in the disadvantaged column? And of those, how many are effectively protected from substitution, because they are in regulated, more highly tailored spec formulations, and so any kind of displacement would be -- for several years or a decade?

Okay. So let me first comment on the growth and EBITDA and leakage. I mean, frankly, we've been very focused on what we're doing, and I think the slide of the growth drivers, it's pretty simple for us right now. It is revenue growth and frankly, it's mostly the recovery. We are doing a lot of work in revamping our entire innovation driving growth. That's what I want to focus moving forward. But some of these things take time. So developing new products, new technologies. I am more focused right now. I don't control how quickly the market recovers. If it doesn't recover this year, it will recover next year. So it's an issue of timing of that, and what I want to make sure is that, we are positioned to be resilient. So if the demand comes faster, we capitalize and that's where all the upside would be for -- relative to what we're saying, in terms of the 2% to 4% and the net EBITDA growth on self-help. So there is -- that's where the upside is. So being resilient. But the part that we need to drive, not just for this year, but for 2022 and 2023, is getting traction on core innovation and any inorganic M&A again align with our strategy. So that's where I want to see the growth. That's what I think we control, and which really will determine our long-term performance. So that's priority number one. If you look at sustainability. We will -- this will be a big item, when we do our Investor Day. I mean, we look at -- a big part of our portfolio already has a big sustainability profile. As you can imagine, cellulose, I mean we have a lot of natural products or raw materials. The issue…

Thank you.

Thank you. Our next question comes from the line of Mike Harrison with Seaport Global Securities. Your line is open.

Hi. Good morning.

Hi, Mike.

Hello, Mike.

Guillermo, you've talked a little bit about the coatings industry, and wanting to maybe add some things around that Specialty Additives business and in particular, you mentioned the strength you're seeing in Architectural Coatings. Have you started to tap into some of these opportunities around Industrial Coatings at this point, and is that something that you can do organically, or is that really where you need the M&A, in order to increase your exposure in that non-architectural piece of the coating space?

Right. So we're definitely doing things with the teams, and this is part of what I was mentioning around revamping their innovation portfolios, and we can do a lot of things organically. I mean, as you will know, as you look at industrial, there is still lot of solvent-based products, but there is -- the industry continues to move to water based powder -- I mean there is a lot of other types of products that are going. In the water-based specifically, where we have a big position, the issue is performance, that some of the products have performed architectural, when you're protecting structures, bottom, the performance needs to increase. So I think we need to do both. Some of it is organically through the technology developments, and some of it will be inorganically, expand the portfolio. And I don't separate the two architectural industrial from just my past history, there's a lot of movement of technology across those two areas. It's just how you dial it, same as I said on the sustainability, it’s how much you dial into the performance that you want? Obviously dialing down tends to be easier than dialing up, and in the case of moving from architectural to industrial, the issue is you got to dial-up properties, water resistance, corrosion resistance, are things that the products go with, and I think we're well under way in that area.

All right, thanks. And then on the nutraceuticals business, you mentioned that return to growth. Can you give an update on some of the actions that you've taken to get that growth back where you want it, and in particular, some of the margin actions? Would you say that this business is stabilized at this point, or poised for growth? Maybe just some color there.

Thank you for that question, because I do want to recognize that team. I mean, coming into the company. I mean obviously, that was an area that was getting hit hard. There's a lot of commentary, if I go back to a year ago, in my first call, and this team really has stepped up and done a fantastic job. And it's not just they have recovered market position. New business with new customers, it's not about totaling only one big customer, it has really been more diversifying. Having heart to heart discussions with customers on what their product needs are, what the quality, reliability of supply we need to hit, they've really moved the needle on that and are well under way to continue to drive. The space in itself is still growing. Health and wellness in this environment, people are concerned, and there is a fundamental demand. So they've done a fantastic job. But I also want to recognize -- I mean our plants, a lot of them are in the New Jersey area. This year they have done a phenomenal job. In the middle of COVID, supplying our customers operating, I applaud that entire team and what they've accomplished, and we are making good traction also on the cost savings productivity. So, they haven't dropped the ball and I think they ended the year really with an incredible performance. That we're hitting our run rates at the end of the year. We're back up to pre-share loss moments with a better portfolio, more robust. So, kudos to them.

Thanks very much.

Thank you. Our next question comes from the line of Jeff Zekauskas with JP Morgan. Your line is open.

Thanks very much. You talked about a positive price mix effect in Consumer Specialties. Was this more than 1% or less -- or can you quantify what the benefit was there?

Let me sort of give you what the drivers were, and Kevin, you can comment more. But if you look at the mix in the consumer side, I mean on Life Science, obviously pharma being stronger, it's a higher margin, higher mix, but better quality mix area. So that has been very strong. The improvement in the nutraceutical side that I just talked about, obviously a big driver. The part that's softer is our nutrition business. Our nutrition business, a lot of the products that go into food and beverage, that still has been impacted by COVID, beer, wine and so a lot of foods, the travel, restaurant, entertainment industry is still down. So that's down, but that tends to be lower margin business for us. So that obviously was favorable to the mix, in terms of the growth areas. And in the Personal Care, again we're shifting our focus to the areas that are strategic to us, and those tend to be the higher margin, more profitable areas that are driving our mix. So it's more the mix side in these segments. It's more the mix, where there is more price stability in that area. There could be some areas that we had some impact. Probably of Avoca is the only one, where we probably saw some price erosion early on. But that's not anything new and it hasn't changed that much toward the back end of the year. But, Kevin, I don't know if you have the other comments you would add?

Yes. I mean, on an absolute basis, it was -- call it $10 million, $12 million positive between price, mix and raws. So we saw some contribution from each of those. I would echo Guillermo, a lot of that is mix. I mean when the Pharma business is up high-single digits, it's our highest margin business, it really does help the overall mix of the consumer business, pretty significantly.

Okay, great. And in the quarter you took a $22 million restructuring charge and $7 million environmental charge. How would you allocate those charges to cost of goods sold and into SG&A or other overhead expenses? And in general, what are your cash outlays for restructuring and environmental next year?

So, I'll take that one. The $22 million is mostly severance. I'd say the vast majority of that is severance related to the cost of goods sold work that will be ongoing throughout fiscal '21. And given that that's $50 million of hard dollar cost, typically we run about $0.70 on the dollar, when we do these things. And so that -- we could have -- we could certainly have more of that in the December quarter. I don't really expect much after the December quarter, but we want to get through this and be done with it. And so most of that -- not all of it, but most of it is related to COGS in terms -- and it's mostly people, in terms of severance costs, et cetera. On the environmental, again mostly legacy sites and most years we spent somewhere between $20 million and $30 million of cash, in terms of environmental remediation. And just happened to be a little bit bigger number than we're accustomed to and so we wanted to call it out for the quarter. But -- and again these are mostly legacy items and mostly run through corporate. We don't have a lot of environmental that runs through the business units. It's relatively small -- it's very small actually, because it's again mostly legacy stuff, and so that's kind of where we are again. Annual spend, typically $20 million to $30 million I think, last year it was maybe $26 million, so.

Okay, great. Thank you so much Kevin.

Sure.

Thank you. I'm showing no further questions in the queue. I would now like to turn the call back over to Guillermo for closing remarks.

Okay. Well, I wanted to thank everybody for your participation and your questions. I hope everybody stay safe. As I hope you heard, we're really pleased with the closing of this year. A strong progress for the entire business across multiple areas. Very well positioned for 2021 with, I think a lot of actions that we can control internally, and we're really switching now to a growth mindset that will be the exciting time moving forward from all this transformation, to really driving and creating value for our customers. So we're looking forward to updating you as the year goes, and thank you for your attention. So, thank you very much.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.