Good day, ladies and gentlemen, and welcome to the Eastman Chemical Company Second Quarter 2012 Earnings Results Conference Call. Just a reminder, today's conference is being recorded. This call is also being broadcast live on Eastman's website, www.eastman.com. We will now turn the call over, for opening remarks and introductions to Mr. Greg Riddle of Eastman Chemical Companies Investor Relations. Greg, please go ahead.

Okay. Thank you, Debbie, and good morning, everyone, and thanks for joining us. On the call with me today are Jim Rogers, Chairman and CEO; Curt Espeland, Senior Vice President and Chief Financial Officer; and Fernando Subijana, Manager of Investor Relations. 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 results could differ materially from our plans and expectations. Certain factors related to future expectations are or will be detailed in the company's second quarter 2012 financial results news release and in our filings with the Securities and Exchange Commission, including the form 10-K filed for full year 2011 and the form 10-Q to be filed for second quarter 2012. Second, except where otherwise indicated, Eastman financial measures referenced in this presentation are non-GAAP financial measures, such as earnings per share and operating earnings that exclude Solutia acquisition, financing transaction integration costs and the second quarter 2011 gain from the sale of a previously impaired asset. In addition, Solutia earnings are presented as adjusted EBITDA, which is defined as net income before interest expense, income taxes and depreciation and amortization and certain items that affect comparability and noncash stock compensation expense. A reconciliation to the most directly comparable GAAP financial measure and other associated disclosures, including a description of the Solutia acquisition transaction financing integration costs, the gain from the sale of a previously impaired asset and Solutia-adjusted EBITDA, are available in our second quarter financial results news release and the tables accompanying the news release available on our website, eastman.com. Lastly, we have posted slides that accompany our remarks for this morning's presentation on our website in the Presentations and Events section. With that, I'll turn the call over to Jim.

Thanks, Greg, and good morning, everyone. I'm told we got a record number of people on the phone this morning, so thanks for joining us. That could be because we're doing it on a Tuesday, but more likely, it's because we have a little bit more to talk about with not only our heritage business, but also the Solutia business. So let me start on Slide 3. As is my normal practice, I'll start by reviewing our key outlook statements. First, when we announced the Solutia acquisition back in January, we indicated we expected to close the transaction midyear 2012. And thanks to a lot of hard work, we were able to meet that timeline closing on July 2, and we're very happy to have Solutia as part of Eastman. Obviously, I'll talk more about Solutia second quarter results in a few minutes, and then Curt will talk about our progress on integration and synergies in his section. Next, back in April, we indicated we expected our full year EPS to be approximately $5.30 in 2012, and we are still on track for that target. And I'd remind you that this would be 10% earnings growth. And lastly, we indicated we expected to generate $1 billion of free cash over the next 2 years. And again, we're on track to deliver on that commitment. Given all the portfolio work we've done over the last several years, including the acquisition of Solutia, we now have a portfolio of businesses that we expect will generate solid, consistent earnings growth and cash generation for years to come. On Slide 4, I'll cover Eastman corporate results. Sales revenue declined 2%, driven mostly by the Specialty Plastics and Fibers segments. Operating earnings increased, with particular strength in the CASPI and PCI segments. Second quarter EPS…

Thanks, Jim, and good morning, everyone. I'll start by reviewing our solid cash performance in the second quarter, as highlighted on Slide 13. Cash from operations was $316 million. This is driven by continued strong net earnings. Working capital was up slightly in the quarter and is about flat for the first half of the year. Free cash flow for the quarter was a very strong $194 million. Capital expenditures were $87 million, and I'll talk more about our full year expectations for capital expenditures in a few minutes. And, of course, we paid our dividend in the quarter, which was $35 million. This solid performance keeps us on track to meet our previous free cash flow expectations for the year for heritage Eastman. Next, on Slide 14, I'll review the financing for the Solutia transaction. As you can see from the table, we were able to obtain very attractive financing for that acquisition. The notes were significantly oversubscribed, and we ended up increasing the allocation of the 30-year notes from originally $300 million to $500 million. The weighted average interest rate of 2.8% is better than our previous expectations. Going forward with this new financing, we now have an annualized interest rate cost approaching $190 million for the company, including amortization of some pre-issuance interest rate hedges. And this level of interest cost will decline as we delever over the coming months. Overall, we were very pleased with the financing for the transaction, and I want to congratulate our treasury team and their partners in achieving such a great outcome. Next are some comments regarding integration on Slide 15. Even though the acquisition closed on July 2, we began planning our integration efforts shortly after the deal was announced. We have a number of cross-functional teams leading the integration…

Okay. Thanks, Curt, and this concludes our prepared remarks. Debbie, we are ready for questions.

[Operator Instructions] And we'll take our first question today from Dave Begleiter with Deutsche Bank.

Jim, just on the Solutia businesses, can you comment on, perhaps, second half expectations? If you did 241 of EBITDA in the first half, what would you expect their EBITDA to be in the back half of the year?

First of all, I just want to say what a little smart aleck you are for your head -- for your title on your alert, "guidance reaffirmed corrected." I'm teasing you, because I felt a little funny about that. I'll get to your question on Solutia, but I felt a little funny about that, because we did beat, and then here we are, we didn't raise our guidance. And I know that goes through people's minds. And you're kind of getting to it, asking about Solutia's second half. And obviously, we're just getting to know these businesses, getting to see the decisions they've made recently, let me put it that way. I would guess the second half will look something like the first half, maybe even a little lighter than the first half. We'll -- just talking from an EBITDA perspective. But I don't have a lot of surety around exactly what those numbers are going to be. That's why we kind of kept it at $5.30. We can see our businesses are performing quite well, quite strong. We can see the option as we got inside Solutia, how quickly we can get in there and make things happen, we'll see. But I'm guessing second half, if we use roughly the first half, that's probably not bad.

That's helpful. And Jim, just on the propane propylene benefit in Q2, can you comment on that? And you mentioned it will be a little bit narrower in Q3 and Q4 as well?

Yes. I mean -- but it's going to be a great year for the spread. I talked about how I wanted to kind of get away from talking about that. We even sized it for you 1 year just so you could see that it wasn't all that huge for us. And yet it feels really good when it's going our way, I got to tell you. It is a nice wind at our back, so the spread's going to be there. Again, the one thing as people think about spread and they look at some of the other names, one of the things they got to remember is the way we go to market. And we're really just exploding through to derivatives, and we're trying to be more stable for our customers in terms of pricing. So we're not always getting every last penny when the raws go up, and the flip side, we don't always give it back. And so partly what you see, great quarter this quarter, where that lag was probably working for us. Margins come in a little bit over the next couple of quarters when maybe the lag's working against us. But we've got a little bit different strategy than some of the guys who were a little uptight from us, you might say.

And just lastly, any restocking, destocking trends you can call out in the businesses in June and/or July?

That's a good question. I didn't really see anything that caught my attention. Curt looked at the orders. I guess the orders were staying fairly strong when we looked at our order book before the conference call. But that's thinking more of the heritage Eastman businesses. But I didn't really hear a lot of comments on customer destocking, restocking...

Yes. David, when we look at -- you've heard us talk about or looking at our order books 3 weeks and 8 weeks out. Generally speaking, those trends remained to be pretty solid. Probably the only exception where we saw some weakness was some packaging and durable goods in Asia in our Specialty Plastics business.

And we'll take our next question from P.J. Juvekar with Citi.

Jim, your pricing in PCI was a little weak with -- and that's understandable, given lower propylene prices. The recent oxo contract settled down 10%. So it just seems that this pricing weakness is likely to persist in second half. So wanted to get your comments on that, and what can you do to offset some of this weakness?

Greg is trying to get my attention. So you've got some color you want to...

Well, no, I mean, I agree. It was down 5%, and that's very much reflective of the lower propylene prices. And as we just talked about, in terms of lag, sometimes it takes a little while for the pricing to catch up with the lower raws, and so you might see some of that in the second half of the year.

And the second question was on, again, a little bit to follow up on propane to propylene. You could have a situation where propylene is a bit weak, but as we approach winter, propylene could go up, especially given that you've got new propane export terminals starting up. So given that, what's your outlook in second half and beyond?

I don't -- it seems like you're asking the same thing to try and get a different answer, different ways. I mean, you're right. The winter can move propane around some. We do typically do some hedging in the wintertime to try and shield you guys from that, to a certain extent, so you don't have to talk that much about it. I would say, overall, the markets have not done a fantastic job of calling where propane propylene spread's going to go. I remember last year, with some trepidation, we talked about how this -- we ought to have a little bit of a tailwind at our back, and it's probably a pretty decent tailwind at our back this year. But you're right, no one can predict what the winter's going to do, so that could move your raw material. I'd just, once again, remind people that our pricing strategy on the derivatives really doesn't just track 1x the propane ethane. And I guess the only other color I'd give you, P.J., is, obviously, it's the ethylene side that is quite beneficial when I look at year-over-year comparisons, propane to propylene, fairly similar as we think about what the year's going to look like. But the ethylene is the one that's outperforming. And you know we keep half of that internally and sell half.

We'll take our next question from Kevin McCarthy with Bank of America Merrill Lynch.

Jim, you're expanding Regalite capacity so often, it's becoming a challenge to keep up with the various projects you're in. So with regard to your latest joint venture here with YPC in China, maybe can you just talk a little bit about the relationship with YPC? What the size of the Regalite business is today, to the extent that you can comment on that, as well as margins? And do you expect this level of growth to continue over the intermediate term? Just a little bit more color around this hydrogenated hydrocarbon business will be helpful.

Yes. I mean it's one of the bright spots. And when we lay out how we're reorganizing the company and our reporting segments, you're going to have more of a -- you're going to have more visibility into this business, because it's the adhesives piece that's going to be with the plasticizer piece. And you're going to see a couple of really strong growers with decent earnings, decent double-digit earnings. So overall, one of the bright spots deserves the capital, some of the better returns when you line up all your capital projects. A relationship with YPC is exactly what would you -- what you would want. You'd want a partner like a Sinopec partner. You'd want to be in China. The other part you didn't ask but that deserves some credit, we got fantastic relationships with the multinational global customers here, very strong. I mean, it's with them that we're comfortable. It's our relationship with them that gets us the comfort to go ahead and do this expansion because we can see where the product's going to go that comes out of this plant. We know the -- basically, know the names for who's going to be taking this product, who wants this product, because this market's been so tight. So I mean, I could go on and on, on this segment. I don't want to size it for you. You can probably get an indication of size when you look at some of the expansions that were done. I mean, this is more than just a Regalite that's in there. Do we talk about the revenue for this -- for Regalite specifically? I don't think we ever have, but good growing business, significant. You're going to see more of it when it's put together with the plasticizer business.

Is it safe to say this is a premium-margin business for you?

Oh, yes. The hydrogenated hydrocarbons is the good stuff.

Yes, okay. Then second question, Jim, I understand you're hard at work extracting the various synergies. But to the extent that the external environment today is presumably weaker than what everyone would've thought several quarters ago, are there additional levers that you can pull in terms of cost extraction, restructuring initiatives, either on the legacy Eastman side or on the legacy Solutia side? And I guess, similar question for CapEx in terms of cash maximization. How are you thinking about that in terms of contingency planning?

The answer is yes. Most smart management teams won't talk exactly about all the different levers that they could pull. You're right that the economic environment is not quite as good as we'd want them. But let's face it, Europe's pretty much in recession right now, or at least the bulk of Europe is in recession. And so the way I'm looking at it, I'm seeing what Solutia looks like when one of its major market segments is in recession. And if I think about it, as we head to being more diversified, as we are, so we're not as quite as dependent on North America and get diversified by geographies and by markets, there's always going to be something that's a headwind. There's always going to be something that's a tailwind. I happen to think that's one of the strengths of Eastman right now, that as you look across the company, there's -- we can talk positively about the frac-ing spreads but then kind of moan together about what Europe looks like. Long term, I think this is going to steady out our earnings and help us continue that double-digit earnings growth. When I look within Solutia and think about the synergies, I feel really good about the $100 million. In fact, if you'll let me, just a little back of the envelope, the way I think about this sometimes, if you think about interest expense we've picked up being about $100 million a year and the synergies we're going after being about $100 million a year and then if you get aggressive on your synergy targets over time, and say, maybe we can get a little more out of that and say, "Well, I issued some extra shares. What's the dividend carry on those extra shares I issued?"…

We'll take our next question from Edlain Rodriguez with Lazard Capital Markets.

Just one quick question on CASPI [indiscernible], Jim. Back in April, you had mentioned how on all of CASPI's business lines were up within at high levels with many products now being sold out. How has that changed since then? And how do you see the domain data mix for the second half of the year?

Well, I wish I could go ahead and do this quarter over and over and over again. That would be pretty cool. I don't remember saying there was a lot sold out. I know, in particular, we were talking about the resins business being on allocation and quite tight. On some of their other businesses, particularly their polymer, some of the really high-margin stuff, maybe stuff that we're the only ones in the world who make it, we never let the utilization rate get too high without debottlenecking that in some capacity. So it's rare that on the -- I was using the phrase, really good stuff -- the really good stuff, the stuff that we're the only ones who make, it's rare that we would ever get into a sold-out situation. We just don't want to ever do that to our customers. So we got the juice left to meet it. I think the issue probably comes down more to the demand we see around the globe in the different end markets. And guys, it's tough out there. One of the things I'm proud of is that we were able to deliver these results the way the world looks right now. I mean, Europe is a mess. And then you can go kind of market by market, whether it's building and construction, particularly durable goods, things like that. It's quite soft out there, so we'll see how CASPI does. I mean, I think last time we gave guidance for the full year, we thought they'd be around 3 80 or so. And I think they're going to do better than that, obviously, with what they've got under the belt already. But we'll just have to -- we'll have to see how they do. But I'm not worried about capacity or our market share, things like that. If anything, it's just more that end market demand in places like Europe.

Okay, makes sense. All right, one quick question like longer term, like in terms of acquisitions. I mean now that you have Solutia, like, do you feel that the portfolio is complete now? Or do you still think that there's some more room for more additional bolt-on acquisitions in the Eastman legacy businesses? And where do you see there's a need for that?

Okay. we'll start with our mandate. Our #1 mandate is to grow the value of the company, and particularly, grow the earnings of the company, so we're going to do that on 2 legs. And of course, there's always the organic growth. You're asking about the inorganic piece. We just took a really big step with Solutia. We deserve a little bit of time to get it under our belt. I wanted to echo, by the way, Curt's comments. The employees of Solutia have just been fantastic. I think they're pretty upbeat about being part of a larger chemical company. We're not meeting any resistance when it comes to getting synergies and getting things done. In fact, there's a lot of excitement about how we can grow these businesses together. Part of that excitement comes from -- that we'll have the ability to do bolt-ons in their existing businesses if we see the opportunity, but also in the core businesses. And having said that, we got the opportunity. We'll have the financial strength to do that. Of course, top priority for cash is paying down debt here in the near term. But then the issue is, is there really much in the way of bolt-ons out there? And that's kind of where you were coming from. We'll just have to see. I mean I was -- I got to tell you, I was a little disappointed we didn't see more bolt-ons in the 2010, 2011 timeframe. We did a few in the plasticizer world. There may be some more out there, but we take such a disciplined approach in terms of what we're willing to pay and does it drive us in the direction we want to go. But I don't want to pull up a lot of hopes for there's going to be a lot more bolt-ons or something coming. If it makes sense, we'll do it, but I'm not sure how many there are in the core businesses.

We'll go next to Duffy Fischer with Barclays.

On the Solutia part itself, I guess, one, it wasn't under your control, but how did that 1 15 number kind of come in relative to your expectations for the business sitting from the outside? And then when you think about moving from a nearer-term view that the Solutia management had to kind of your medium- to longer-term view, does that really mean that margins are going to come down as we're going to have to put some more SG&A, R&D through these businesses to get them to grow more over time?

Yes, let me start there. That's not the signal I was trying to send. Let me start with the beginning of your question, the 1 15. Yes, that was a disappointment, no doubt about it. I was hoping that they would do a little better. I can understand that 3 months before your company gets sold that you might not expect crackerjack results. I know that they had some things that I might think of as more onetime, or at least, I hope they're onetime, like some bad debts adding to environmental reserves, things like that. But still, it was a disappointment. It was mainly around Europe. It was mainly Saflex in the photovoltaic business. And I think we know how to help both of those businesses. When I talk about short term versus medium term, it doesn't necessarily mean spending more money. A lot of this has to do with how you approach the market and some of the decisions you make in terms of your contracting, your pricing, either relationships you build with your customers, et cetera. So maybe you're not just going quarter-to-quarter maximizing earnings. Maybe what you're trying to do was think a little bit longer term with your key customers and take a longer-term approach to value capture out of the marketplace. So I think I said it before, I see opportunities for things we will do differently. And I'm guessing that you won't be able to see much of that through the rest of this year, that '13 will be a year of transition. And when we get to 2014, you're really going to like the way these businesses look.

Okay. And then shifting to Specialty Plastics, a little smaller business. But copolyesters was taking some pretty good market share, so for volumes to be down that significantly was a surprise to me. Do you think there was an inventory effect there? Can you talk a little bit about -- more about the market share you're taking with copolyesters and what's happening with volumes there?

Yes, I can. I mean -- and maybe Curt wants to add some color, because I feel like I'm doing all the talking here. But I can tell you the place I see that got hit was really the durables. And Mark Costa's given me the example yesterday about, Jim, when the economy's tough, people just aren't out buying new blenders and new durable goods that might have our copoly unit. You saw a nice pickup in the CT, cellulose triacetate, that goes into the displays in flat screens. That really helped Asia and helped that business sequentially. But I would say they're very much exposed to the durable goods part of it. They've got a lot of work under way to move their mix to things more like medical, et cetera, but that takes time. I'd say on the Tritan line, the second line we brought up, we filled that first one out really fast. I'd say we got kind of spoiled on that one. Tritan, when you think about the markets it's going into, it's fighting the same kind of durable goods battle right now, so that was flat. And it's probably going to take us a little longer to fill that second line now, but that doesn't shake my confidence. I can see the value proposition. I know we've got a good product. I know we'll take share from some of the competing materials. I don't know if there's anything...

The thing I might add is that some of their businesses are more economically sensitive than others. The great thing about that, we've made the investment. We have the capacity so when those end markets come back, this business is well positioned to improve its performance.

We'll go next to Bob Koort with Goldman Sachs.

I appreciate your comment about you deserve maybe credit for some stuff that you guys have done over time. But I guess when I look at your margin structure, it sort of says specialty. But when I look at your multiple, it screams commodity. And maybe this is a function of your historic legacy in polyethylene and PET. But I'm just curious, what can you guys do or how do you think you get to a reasonable shareholder investor regard for your portfolio when it seems stuck sort of in the history?

I very much appreciate the question. It's one that, quite often, we ask people on your side of the desk. Look, we all know multiples are sticky. We know there's lots of CEO's out there who try and jawbone them up, et cetera. I never thought that really has any kind of lasting impact. I do think it -- a lot depends on how we talk about ourselves and think of ourselves and how we represent our businesses. So just to be very open, talking about things like volume doesn't sound as much like a specialty business as just talking about end markets and growth in end markets. And as we roll these businesses together and we get our new segments, I think it's going to be clearer to people just the results of all the work that's been done and what we see as our prospects for growth in our margins. So I always have a hard time if someone says specialty versus commodity. And then you say, "Well, define specialty," and then you get 5 or 6 different answers. But to us, what we're driving, and I think people are going to have to eventually recognize, is we're driving year-over-year earnings growth. And we're doing it whichever way is the most efficient and makes the most sense. We have a great financing market. We saw an opportunity with Solutia to pick up some quality businesses and put it into a portfolio of other businesses that have strong cash flows. So you really don't have to leave opportunities on the table, like maybe you do if you come out of bankruptcy and were pretty inhibited in your cash flows. And I think it's just a matter of time. But how quickly the market gets there, I'm not sure.

Can I ask you on your portfolio, in the quarter, you had a 1% price decline, which was clearly far better than a lot of commodity companies. But it was still a decline. You mentioned you're trying not to price your products on sort of a cost basis. So for a typical Eastman product, how often do you reset pricing, and how do those contracts look?

Yes, I mean as much as I'd love to say, it's just all specialty, part of that is the fact that the raws came up. We actually expanded spreads in the company overall when I look at just price versus raw materials and energy, it actually expanded a little bit. But much of our markets, much of our businesses, the pricing is more quarterly, annual in some places, like fibers. Probably the correct way to do it is to have pricing formulas that are more monthly, frankly, monthly to quarterly. But again, it just depends on the product. So that would be true for the more heritage, commodity-like stuff for the more specialty stuff that's priced off of value proposition, some of the stuff in CASPI, for example, will just get repriced once a year. Fibers is once a year. Some of the Solutia businesses are just once a year. So we'll try and hit the right mix, the right blend working with our customers and what works for them.

We'll go next to Jeff Zekauskas with JPMorgan. Jeffrey J. Zekauskas - JP Morgan Chase & Co, Research Division: One of the themes of Eastman since you announced the Solutia transaction has been your tax savings. And yet, in the second half, you now think that the tax rate will be 34%. So did you run into obstacles that are keeping you from using some of the NOLs or some of the tax strategies that you thought you could employ?

I'll let Curt take this one.

Jeff, no, the answer to that is no. What you're seeing right now is just simply the effect of a more predominant earnings mix of U.S. versus outside the U.S. We think, over time, that will correct itself. As it relates to implementing tax planning or tax efficiency structures, we're in the process of doing that today. A lot of that will be put in place the end of third quarter, some going into fourth quarter. So we do believe we'll see the benefit of tax structure. And so we will get to those benefits. And if you get some reasonable return to the mix of domestic and foreign earnings, that's what gives us comfort to get to that 31% rate. On the usage of the NOL, we're still highly confident to use that. You saw in our S-4, we thought that number's going to be about $675 million. We still feel good about that number. Maybe it will be even a little bit better.

Okay. So I don't think that you expected that your tax rate would be that high for the second quarter. And I think about the conditions under which you bought Solutia, and that was a world in which ethylene prices were $0.55 a pound. Then order of magnitude, they dropped into the high 30s, now they're in the low 40s. So presumably, the raw material synergies that you expected from Solutia really should be much larger than what you originally expected. So are you getting more -- because you must have higher pretax income with this higher tax rate. So are you getting more raw material synergies that you forecast in the second half that's offset by a higher tax rate?

Let me start of, then Curt may want to add. But again, the tax rate had more to do with where the earnings are. And as you know, the way most companies get that lower tax rate is by having more overseas earnings and lower tax jurisdictions. When I think about raw material synergies, it's not what price ethylene is at any one point in time. It's what we're going to be able to do within our supply chain in terms of buying their raw materials, et cetera, or the swaps that we'll do with other companies. So I don't know, Curt, do you want to...

Yes, Jeff, if you're talking about 2 aspects of your question. I think, first of all, as it relates to the tax rate, yes, that tax rate is higher than we'd probably envisioned back in January. So if you think about just kind of our expectations at that time, what you're seeing is Eastman's businesses are probably doing a little bit better. Solutia's business is doing a little bit worse. But then offsetting some of that tax rate impact is the better financing that we had in place. As it relates to the $100 million of cost synergies, we have assumed some modest improvement in raw material savings and logistics savings. I think a year or so from now, we're going to -- when we talk about and report on about how we did against those synergies, I think we'll do better than that, particularly in the raw material side. Jeffrey J. Zekauskas - JP Morgan Chase & Co, Research Division: Okay. And then lastly, in the last conference call, you talked about, I think in 2015, being able to buy 300 million pounds of propylene, or, effectively, something like that from PDH producer. I guess now it's clear that that's enterprise. So when you did that deal, do you have to pay an upfront fee that gives you cost economics? And if you do, is it $100 million or $50 million or -- if you don't, why is it rational for them to just give you manufacturing economics in propylene?

Yes, actually, Jeff, there's no upfront fee. And in fact, there's a contract that gives us propylene even sooner than the plant being finished that's also advantaged. So we'll get some benefiting before the plant comes online. Why does it makes sense for them? Because they have the surety of a nice credit like Eastman taking a big chunk of their offtake, and they build up the plant. I mean, they really could accept a lower return. It's really a good return, by the way, but they could accept a lower return because they have such a low-risk project. At least, that's the way I would analyze their side of the table.

[Operator Instructions] We'll go next to Frank Mitsch with Wells Fargo Securities.

I noted that you said that you guys had the second-highest quarter this past quarter. So that would give you the silver medal, but we're all expecting gold here. Can we see gold-medal performance in the third quarter?

That's going to be tough. That's going to be tough. My guess, we're not really giving quarter-by-quarter guidance, but if you were a betting man, you would say it's going to look similar to the second quarter. Now realize, we didn't go into it a lot. There's going to be a lot of noise and confusion, because when you buy a company, you write all their inventories up to market, and there's all that kind of stuff we're going to have to guide you through. But assuming that the world kind of holds together here, you're probably going to have a similar -- speaking just of the heritage businesses, a similar kind of quarter.

But my guess is, then, there is some level of accretion that comes at Solutia. So I mean you're really only -- you're guiding to an average of 1 34 per quarter the next 2 quarters, is what you're guiding to with that 5 30 number.

And realize some of the headwinds here, though. I mean you just -- Curt was talking about one with Jeff on the tax rate being a headwind. The Solutia businesses are underperforming where we hope they'd be this year. Not worried because we think we see that what we can do with those businesses, and there's still fantastic value in the long term there with those businesses. The interest expense came in a little better than what we thought. I mean, we've got this mix of headwinds, tailwinds, and we're just trying to give you the straight-up that it's looking like 5 30. I mean, as one of the reports said, maybe I had a little bit of a cushion the last time we said 5 30. It's -- we got to do a little more work to hit it this time.

Well, let's take a look at Solutia. You said -- I think you say you know how to help those businesses. So you said Saflex in Europe was obviously difficult. Global auto builds are pretty good. So globally, I would anticipate Saflex is doing fine as a product, but obviously in Europe, it's suffering. But you're getting growth in the U.S., you're getting growth in Asia. So then that begs the question, photovoltaics. What's your game plan on that business?

Just on Saflex, first of all, Europe's an important market for them, so they -- hopefully, they've talked about that before. But it is their more profitable market. So $1 of sales in Europe is not the same as $1 of sales in Asia. And so that's -- so it hurts when Europe's down. You think about the automakers in Europe, et cetera, I don't see that being a long-term trend. We see that coming back. And in terms of photovoltaic, what can I tell you? We didn't think we paid a lot for it as we value the company. I think we've said that before. They are definitely under pressure. We deserve a little bit of time to assess what a turnaround plan would look like, the probability of success on that turnaround plan for that business. And we're not the most patient people. The shareholders of Eastman are not always the most patient people, and I would expect we'll have more to talk about on that, what our path is going forward, on Investors Day.

Okay, All right. And I was struck by Curt's comment that you expect to spend $500 million this year, of which $100 million is Solutia in the second half of the year. I mean, that seems like a rather high number for Solutia. Very high number for Solutia.

Don't annualize that.

Yes, and if I might add, one of the growth aspects that Solutia brings is expansion options in Kuantan, Malaysia to serve the Asian market. Obviously, that is one of the levers we'll look at as we continue to look at how the economies are shaping up. And we'll see if we have to make adjustments for that. But that's kind of where we're at to start out of the gate.

All right. My early betting line is that you don't spend $500 million this year, but that's just me. And lastly, Jim, you flagged out the Fibers' buying pattern being a negative in the second quarter. Is -- were those business just traditionally lumpy good, lumpy bad? Second half of the year, lumpy good?

Yes, I got 0 worries about Fibers, Frank. I mean, if I put my list of worries down on a piece of paper, fibers doesn't even show up on the page. So it was in Asia, it was the classic customer buying pattern. I think we're going to be close to selling out on tow this year, so I'm not worried about which quarter it comes in. I think for the year, they're going to have a very good year.

We'll take our next question from Nils Wallin with CLSA. Nils-Bertil Wallin - Credit Agricole Securities (USA) Inc., Research Division: Curious about in PCI how much Sterling and Scandiflex added to volumes since you haven't anniversary-ed those 2 acquisitions?

Well, it did help. They're not huge. I don't know, Curt, if you've got any comment.

I tell you, it did help, but not as material number on a year-over-year basis. Nils-Bertil Wallin - Credit Agricole Securities (USA) Inc., Research Division: Okay. And then on your cellulose esters and triacetates and LCD, are your -- is your mix somewhat geared more towards panels than LCD TVs? Because we saw, certainly, some weakness in LCD TVs in the developed markets. I'm just curious, it seems like you performed a little bit better than the overall market. What was driving that?

Yes, I'm not sure, and I don't know exactly what the mix is between the 2. I know we're in several layers on the screens. I think that usually what moves our results is more the customers and their inventory positions. And I know they got fairly light in inventories and had a lot of make-up to do after the first quarter. And so I think that drove it. So I don't if you can extrapolate our results to the end market results, because the way this supply chain works is not always the most logical. So I think our customers have their inventories get fairly low and then had to play some catch-up and do some buying.

Okay. And Nils, if I could, just come back to remind on Sterling. We talked about the acetic acid business that came with that. That's about $100 million of revenue a year. The real benefit of that plant acquisition will be, as we start up this new PC asset, plasticizer asset, you'll start seeing that benefit over the coming quarters. Nils-Bertil Wallin - Credit Agricole Securities (USA) Inc., Research Division: Great. And I think you said you could get to $200 million at some point in a couple of years. Is that still...

Yes, that's still -- that's still the path. Yes, absolutely. Nils-Bertil Wallin - Credit Agricole Securities (USA) Inc., Research Division: Got it. Just a question on Europe. It seems from at least your comments during the call, it's a lot worse than expected. And yet, in the prepared kind of slides, you said it doesn't seem to be deteriorating anymore. So could you help parse those 2? What are you seeing that suggests that it's not getting any worse? Because it certainly sounds like from your comments that it's not too good.

Yes, I hear you. The bit about it being worse than expected, I was really thinking more of Solutia's business and their exposure to Europe and how that went with the auto builds being negative in Europe year-over-year versus the rest of the world. So for the -- for our heritage business or for the combined entity, I don't think there was that big a difference between first and second quarter if I look at the volumes that -- how they came off, a little bit more in the second quarter than what it was for the whole first half of the year, right?

Yes, but a notch.

But a notch is like -- difference being 6% for the half and 7% in the quarter, something like that. So I don't know, maybe there's a bit of hope in there as well, but I just -- as we look at the order patterns that we can see, talk to the customers, and I just had 2 weeks in Europe getting -- hitting a bunch of countries and our different locations, et cetera. It seems to be a disconnect between the talking heads on TV back here and what the guys in the trenches in Europe are seeing. So our best guess, I'll just say it that way, our best guess is that Europe just kind of putters along down here to level it's at through the end of the year. Nils-Bertil Wallin - Credit Agricole Securities (USA) Inc., Research Division: Got it. And then just one last question, if I may. It seems like at least on your currency in Latin America, you didn't suffer nearly as much as a headwind as many of your peers, who saw large single-digit declines. What is -- is there a different exposure to your business that you're able to offset that? What caused it to be less of a headwind?

So you're talking about the euro, I think is what you mentioned? Nils-Bertil Wallin - Credit Agricole Securities (USA) Inc., Research Division: Latin America, actually.

Latin America? I mean, I think....

Instability [ph] in currency, the only thing I can think.

Yes, it comes down to how we price some of our products that we export to those marketplaces.

And we'll take our final question from Andrew Feinman with Iridian.

I was just wondering if you could give us any update on Tritan 2 and acetylated wood?

Yes, thanks, Andy. It's exciting stuff. I mean, I mentioned Tritan a little bit earlier, that it's probably going to take us a little longer to fill out that second line than maybe we first thought. It's not, frankly, hardly anything to do with Tritan, everything to do with the economy and the durables goods markets, et cetera, like I was mentioning before. But I'd say that's fantastic product, we will fill the line out. It is going to take share from the other materials, it's just going to take us a little bit longer. On the acetylated wood, and thanks for giving me a chance to talk about it. In the market right now, both pro-channel and big-box channel, getting the results in, obviously still early. I think we're going to have good customer acceptance. We're learning some stuff about coding versus not coding, et cetera. But I think we've got a good one there, but we're going to want to do it a measured pace. When you deal with the retail market, you only get one chance to put a good brand out there, so we want to make sure we do it the right way. I can tell you just from a manufacturing point of view, the little semi works, if you want to call it that, plant that we built here in Kingsport, running very well, getting more capacity out of it than we thought, typical Eastman fashion, people continually finding ways to improve the process, get, in this case, more board feet out of the same plant. Decent market acceptance, but we've got some fine-tuning to do in terms of how we go to market, what the end product looks like, which segments we go into. So still a bit early, but overall, quite positive.

Okay. This concludes -- thanks again for joining us this morning. A web replay and a replay in downloadable MP3 format will be available on our website beginning at 11 A.M. this morning. Have a great day, everybody.

Ladies and gentlemen, thank you for your participation. This does conclude today's conference. Have a great rest of your day.