Greetings, and welcome to Huntsman Corporation Fourth Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Ivan Marcuse, Vice President, Investor Relations. Thank you, and over to you, sir.

Thank you, operator, and good morning everyone. Welcome to Huntsman's Fourth Quarter 2021 Earnings Call. Joining us on the call today are Peter Huntsman, Chairman, CEO and President; Phil Lister, Executive Vice President and CFO. This morning before the market opened, we released our earnings for the fourth quarter '21 via press release and posted to our website huntsman.com. We also posted a set of slides on our website, which we will use on the call this morning while presenting our results. During this call, we may make statements about our projections or expectations for the future. All such statements are forward-looking statements, and while they reflect our current expectations, they involve risks and uncertainties and are not guarantees of future performance. You should review our filings with the SEC for more information regarding the factors that could cause actual results to differ materially from these projections or expectations. We do not plan on publicly updating or revising any forward-looking statements during the quarter. We will also refer to non-GAAP financial measures such as adjusted EBITDA, adjusted net income, and free cash flow. You can find reconciliations to the most directly comparable GAAP financial measures in our earnings release, which has been posted to our website, huntsman.com. I'll now turn the call over to Peter Huntsman, our Chairman, CEO and President.

Thank you, Ivan. Good morning, everyone. Thank you for taking the time to join us. Let's turn to slide number five. Adjusted EBITDA for our Polyurethanes division in the fourth quarter was $218 million versus $201 million a year ago or an 8% increase. Revenues grew 35% as our proactive selling price actions more than offset significant inflationary feedstocks and logistics cost increases. Our volumes improved 2% year-over-year and we benefited from slightly higher equity earnings. We saw strong demand in our North American region with 7% growth. Asian and European volumes were essentially flat versus fourth quarter a year ago. We are pleased to see strong pricing development in China, the world's largest MDI market as we head into the first quarter of 2022. Our core construction markets including insulation, adhesives, and coatings continue to be the strongest markets for Polyurethanes. Underlying demand remains strong. We continue to see excellent growth in our commercial insulation and composite wood businesses. Our Huntsman building solutions business continues to benefit from strong pent-up demand and product substitution gains. HBS fourth quarter revenues were 20% above the prior year and $560 million in 2021. I would note that when we purchased each of Demilec and Icynene-Lapolla in 2018 and 2020, the combined revenues at acquisition were approximately $400 million. HBS did continue to be hindered by logistics and shortages of certain raw material ingredients, which restricted growth. The backlog for our order book remained very strong, and we're implementing price increases that are more than offsetting higher cost and resulting in increased margins. Further, our efforts to expand internationally continues to gain momentum. We remain very positive about this platform and we will look to add to it through bolt-on acquisitions and organic investments when feasible. Our elastomers platform which continues - which…

Thank you, Peter. Turning to Slide 9. Our fourth quarter adjusted EBITDA improved $109 million or 45% compared to the fourth quarter of 2020. Our adjusted EBITDA margin was 15% for quarter four and 16% for the full year as guided at our Investor Day. Each of our divisions increased adjusted EBITDA compared to a year ago with our performance products division delivering the largest gain. As Peter indicated, we expect our Performance Products margins to be in excess of 20% for the foreseeable future following another strong performance in quarter four at 26%. Our total company year-on-year improvements and adjusted EBITDA was driven by gross profit expansion as price increases more than offset over $400 million in feedstock and logistics cost headwinds. Sequentially, since quarter three, we were also able to more than offset over $100 million in cost inflation with further price increases. Let's turn to Slide 10. Our cost optimization and synergy plans remain on track. As we highlighted in November, we increased our target from $140 million to $240 million with full run rate to be achieved by the end of 2023. We delivered approximately $100 million of benefits in 2021, impacting both gross profit and SG&A, and we exited with an annualized run rate of approximately $120 million. In an inflationary environment, it is critical that we continue to deliver on our program and drive improved margins. As we said at our Investor Day, we will manage this through further expansion of our functional global business services model, supply chain optimization, and as Peter highlighted, improving polyurethanes margins with an additional $60 million improvement target. Regarding SG&A, which includes divisional, functional, and corporate costs, we closed the year at 10% SG&A to sales equal to the number we have guided at Investor Day, and we…

Thank you, Phil. I'm pleased with the results of this past year. 2020 was a year where most companies were looking to survive, because of an investment-grade balance sheet into leaner and stronger portfolio we were able to further strengthen our company. By the time we started 2021, we are more than ready to continue to move forward to accomplish with this present portfolio of assets, the best year in our history. Now it's time to focus on 2022. A year that looks to be better than the year we just completed. As we stated at our Investor Day presentation, we expect our businesses to earn approximately $1.4 billion in 2022. As we sit here today with the results of January in hand, we believe this number is on the low end of our expectations, again subject to macroeconomic and geopolitical conditions. Through our pricing and cost actions, we see clear adjusted EBITDA margins improvements at the start of the current year. Our biggest challenge that we see then the volatile and high prices we see for energy and certain raw materials. As we move closer to the end of the first quarter, we should have better clarity and may provide further updates to the market conditions after the conditions were experienced. We expect that global supply chains will be sorted out during 2022, but there are some obvious structural issues around energy, especially in Europe. Despite these headwinds, we feel that these will be offset by a combination of pricing discipline, higher margins as we continue to focus on downstream products, aerospace recovery, and continued cost discipline. We announced at our Investor Day, all of our corporate officers including our top 80 managers are aligned not just to deliver improved results in 2022, but continued improvements in 2023 as…

[Operator Instructions] Our first question is from Bob Koort with Goldman Sachs. Please go ahead.

Thank you very much. Good morning. Peter, I was hoping maybe you could talk about the expectations for the year. You guys gave some first quarter guidance, it's obviously well received by the market but you didn't comment on the full year. Is there any reason to expect anything different than what you offered up at the Investor Day? And maybe you could talk to some puts and takes sort of the cadence as you go through the year. Thanks.

Bob, yes, great question. I think as we look short term over the course of Q1, quite optimistic about the conditions and pricing margin development so far. The biggest concern that I would have would be the EU, raw materials, gas, electricity. Just in the past 24 hours, gas in the EU has gone from $29 at a high down to a low of around $24. That's just in the last 24 hours with the news that Putin might be pulling out some of the truths from the Ukranian front. That movement alone that I just mentioned on an annualized basis equivalent is the equipment around $50 million in cost of the company. So again, that's sort of shock and volatility is something that concerns me on the short term. But again, I think that we've been very disciplined on working with surcharges, pushing prices through, cutting off lower-margin businesses that don't want to compensate us for the value that we're giving them. And we think that the forecast that we've given that $1.4 billion for this year certainly is on the low end of what we're seeing as of today. And I would see a range of between that $1.4 billion to $1.5 billion as we sit here today. Now, as we go throughout the year, if demand continues as it is - as we've seen over the last three to six months and raw materials were to moderate and come down a little bit, I probably feel even more optimistic. But again, I think given the volatility that we're seeing in Q1, I'll have a much better picture of that here, hopefully, in the coming weeks. And given the fact that we'll be meeting with a number of shareholders here in the next couple of weeks, we'll probably be updating the market before the end of the quarter.

The next question is from Aleksey Yefremov with KeyBanc Capital Markets. Please go ahead.

Peter, can you discuss the changes you made to long-term management incentives, how - what are they, how could they impact the performance in the company?

I think that rather than moving our quarterly and yearly numbers, we'd like to focus more on a multi-year basis that will take some of the volatility. Now again, that means that we're going to be more focused on moving some of the spot material. And I'll remind the market that sometimes when you get into a situation where spot material is unusually at a multiyear high, we may not be benefiting in that as much as some of our competitors. But on an overall basis, I'm absolutely confident that as we move products further downstream, we'll provide better margins overall and will provide better stability. This needs to be coupled with - obviously, with the CapEx discipline and with cash flow generation. So it really will be around the improvement of EBITDA, the minimum of a 40% free cash flow generation. Again, I would hope that it would be higher than that. And being able to deliver on the projects, pricing, the volumes, and so forth that we're seeing that again, the bottom line of that being improved EBITDA margins. I don't want to get too transfixed on the margins themselves as much as the actual EBITDA that's being generated and the free cash flow that goes along with that.

The next question is from Angel Castillo with Morgan Stanley. Please go ahead.

Thanks for taking my question. Peter, just a quick one on China and just, I guess, more broadly on polyurethanes as you think about - you noted maybe some pricing developments in the first quarter. If you could just unpack that a little bit. And also as we think about the contracts that you noted transitioning from 20% of them being monthly to 90% of them. Is that broadly across all of your polyurethane portfolio? Or what is kind of the impact of that and the benefits as we think about kind of financially and just how broad that could be?

Yes. As we look at - the first part of your question is about Chinese pricing, again, as we see polymeric pricing in China, and I don't want to get too transfixed on this. Because overall, the amount of impact this has on our overall business is going to continue to decline as one of our major thrust in China as it take that polymeric price and to continue to take that polymeric product, continue to split it, and to further derivatize it into higher-value markets. But as we look into the first quarter, we're seeing polymeric pricing around RMB21,000 - RMB22,000 per ton. To give you an idea a year ago this time, it was around RMB20,000 - RMB25,000 per ton, but again, that was a fallout of a year ago. You remember the freeze that we had here in the Gulf Coast that kind of played havoc on chemical pricing on a global basis. So last year, we saw a great deal of volatility. First quarter benefited from that one-time gain. I think what we're seeing in first quarter 2022 this year is - while it's a lower price, it's a more stable price. And I like the overall direction and the stability that, that is presenting. When I talked about the price movements and the contract, that is virtually all of that is taking place in Europe. And we - traditionally, Europe has been very much of a quarter-to-quarter basis in pricing. And like I said, we're about 90%, just around 90% of our contracts in Europe have now been moved to monthly pricing, which means we're going to have a lot more flexibility to be able to move pricing and to be able to pass through some of that volatile energy shock that we're seeing in the market. Again, this is what we're doing, it's the steps we're taking. I'm not saying that that's being done by the industry. Our competition, I'm sure, will do whatever suits them best.

We have the next question from the line of David Begleiter with Deutsche Bank. Please go ahead. David, your line is unmuted. You may ask your question.

If you do about $1.5 billion this year, Peter, how do you see the longer-term earnings power for Huntsman? And can you see a path to $2 billion? And if so, how do you get there?

Well, I'm not sure that we put necessarily $2 billion out there as a target. I'll take it in incremental steps as we're able to earn it. But I think that as we look into the future, we've - we are quite optimistic about the cost programs and the corporate restructuring that we have in place. It will be delivering here over the course of the next 12 to 18 months. We're looking forward to recovery of the aerospace and aircraft industry, which will return another $40 million to $50 million. And that's just getting us back to where we were in 2018 and 2019. The new models that we're being spec-ed into, I would expect us to continue to grow from that level. I certainly don't want to represent that as a plateauing number. I think that as we look at Performance Products and we look at our further downstream investments into EVs, into the MIRALON products that will be coming into the market here in 2023, and as we look at the investments we're making into polyurethane catalyst and the semiconductor markets, that certainly will be incrementally expanding our EBITDA as we look at the continued growth of our HBS and our sustainable products that we're making across the board and home insulation and so forth, all of which are growing at multiple times the rate of GDP. So again, and I'm not putting in any M&A activities or anything like that in there, but yes, we remain very optimistic on all of our businesses and all of our divisions across the board. So we'll take them in, I don't know if we're going to get to $2 billion overnight, David, but we'll take it in $100 million increments as we can get it.

The next question is from Hassan Ahmed with Alembic Global Advisors. Please go ahead.

Peter, a question on polyurethane. So keeping in mind the European natural gas situation, through the course of Q4 and call it, January through today, did you guys see broadly in the European industry any curtailments on the back of - any polyurethane curtailments on the back of sort of inflated natural gas prices? I mean, I'm cognizant of the fact that call it, roughly 20% of the MDI industry is out there. And I would imagine certain raw materials like chlorine, which are directly sort of linked in nat gas, procuring those may have been an issue.

No, Hassan, we did not see anything matter of fact, in Europe, we think that the MDI capacity's operating rates and utilization rates were probably in the mid-to-high 90% utilization rates. So I think most everybody was running and operating at design capacities. I haven't read of anybody curtailing capacity and we haven't heard anything from customers about that happening.

The next question is from Frank Mitsch with Fermium Research. Please go ahead.

Good morning, gentlemen. Congrats on a nice end to the year. I wanted to follow up on the European energy situation, which, based on your comments, Peter, might become a moot point. But I was curious about the - what success did you have in pushing through the energy surcharges? And then, I guess, more broadly, if we do see some of these energy inputs, nat gas, butane, et cetera come off, how do you think about the scope to hang on to pricing and hang on to margins if we see a deflationary environment on the energy side?

Yes, great question, Frank. I think as we - I think we were about 90% successful in the energy surcharges. There are some people - there's some volume that we walked away from. And it was - I'm not - it was tough for our sales groups and so forth, but we remain resolute to it. So I think we're going to continue to make sure that that stays in place. As long as energy prices are higher, we need to be disciplined and we need to move this down to the consumer level. So as we look at this on an ongoing basis, as prices start to come down and I look at operating utilization rates across Europe and America and globally in general, in MDI, it's probably - I would guess it's somewhere in the low 90%, 91%, 92% utilization, particularly tight in Europe and the Americas. And I would hope that if we see deflationary impacts on our products across the board, members, not just polyurethane that's had these price increase as it's really happened across the board, though. I think polyurethane itself has such a large presence in Europe as an energy consumer. In Europe, it's felt the brunt of it. I think that most of our products across the board will certainly be able to have some opportunity for margin expansion. There are also - the number of our customers, it certainly isn't the majority, but a number of our customers are also in what I would say is more commoditized into the business or in pricing contracts where you have energy pass-through. So some of them automatically will see price increases when the price of energy and natural gas go up, and they'll see it come down as it comes down. But the vast majority of our tonnage that we move around the world, we would certainly be benefiting from a deflationary raw material environment.

The next question is from Mike Leithead with Barclays. Please go ahead.

Good morning and congrats on a strong 4Q. Just one question on the balance sheet and capital deployment. It looks like you ended the year, call it, about 0.4 times net debt to EBITDA. And I think with your forecasted earnings growth and more money to come from Albemarle, you're probably on pace to roughly stay at that leverage level or similar to it by the end of this year. So even with the stepped-up dividend and buybacks. So I guess what I'm trying to get at is what - how do you think about the right leverage ratio for Huntsman? And when and how do you think you will get there?

Well, I think that it's anything we're probably a bit under levered right now. And I think as we look at the share buyback, we continue - first of all, we continue to look for opportunities to buy bolt-on acquisitions. And I'd say bolt-on acquisitions because we did commit at Investor Day that yes, we would - with our ideal size of a bolt-on acquisition would be somewhere of $300 million to $500 million kind of being at the end of that extreme. I don't see us going after an acquisition that would certainly get us above an investment-grade sort of a rating. And as we look at that, if we're not able to get the bolt-on acquisitions at the right multiples and the right values, then we'll be even more aggressive in share buybacks. But again, we want to make sure that our leverage remains at or below that 2 times, we're significantly below that today. And if anything, this will probably give us an opportunity depending on where the Board wants to go to an accelerated share buyback.

The next question is from John Roberts with UBS. Please go ahead.

On Slide 9, on the right-hand side where you've got the bridge by account, the $103 million from gross profit and mix. How much of that was the acquisitions, which I assume is the mix? And how much was price costs, is that minimal?

Yes, John, hi, it's Phil. Thank you for the question on the $103 million. Acquisitions year-on-year were approximately $10 million to $15 million from a cost and a cost-benefit perspective overall. We've highlighted our cost improvement program year-on-year being about $70 million. About two-thirds of that was gross profit and about one-third of that was SG&A. And the remainder, as we say, in gross profit was really exceeding the raw material increases that we saw with substantial price increases.

The next question is from Kevin McCarthy with Vertical Research Partners. Please go ahead.

Peter, would you provide an update on your organic growth projects? If we look beyond the splitter project, it sounds like it will be completed in the second quarter. What are the other initiatives that are resident in the $300 million CapEx budget that you put forth this morning?

Yes. Let's remember that over half of that CapEx is going to be around just making sure that we have the proper maintenance levels and the replacement levels of our equipment and so forth. And then the remainder of that is going to be going largely into the Performance Products areas, where we will be expanding capacity in Petfurdo, Hungary to produce more polyurethane catalysts materials, a lot or some of this will be going into HBS for - as a blowing agent and to home insulation, be going to other applications as well. And in Conroe, Texas, we have two projects that will be ongoing. One of them will be producing ultrapure amines and also ultrapure carbonates. One will be going into the semiconductor. We'll be the only people - we'll be the only company in North America that is producing the ultrapure amines and we'll also be the only company in North America that will be producing the ultrapure carbonates. The ultrapure carbonates again, one of the raw materials that are needed for the EV market. So as you think about all those EV - the battery plants that have been announced in North America, virtually all the rare earth metals and the chemicals that are required to produce those batteries are imported materials largely coming from Africa and China. We'll be one of the few suppliers outside of those regions that will be supplying - capable of supplying the ultrapure carbonates and so forth, that will be going into a lot of those applications. So largely those are two areas around expanding - our amines will be going into polyurethane catalysts and other applications. Ultrapure amines and carbonate will be going to semiconductors and into the EV applications. We'll also continue to be putting investment into the…

The next question is from Mike Harrison with Seaport Research Partners. Please go ahead.

Was wondering in the Polyurethanes business, can you help us think about how to model the contribution of Geismar. I believe you said it would be a $10 million to $15 million contributor to EBITDA this year. But what does that ramp look like? And are there some start-up costs that we need to keep in mind that would weigh on Q2 and then turn into mix benefits later in the year? And then the second piece of my question is any key turnarounds in polyurethanes that we need to think about as we model out the rest of the year?

Mike, thanks for your question. It's Phil. So in terms of the split, as we've said, we'd expect to start up the facility - at the beginning of quarter two, were really commercial products coming off towards the back end of quarter two. So think about the benefits coming in the second half of the year and as we ramp that up through '23 and '24. And we guided to $10 million to $15 million of EBITDA benefit in the second half of 2022. As you move through 2023, think about that as $30 million to $35 million of benefits. And then we hit the full run rate in 2024 of $45 million overall. To your second question, Mike, around any major turnarounds? Not this year. We continue to have turnarounds, you have to do many turnarounds every year with your MDI facilities, but we don't have anything as significant as we did last year, if you recall, towards the back end of Q1 and the start of Q2 when we had the Waterdown cluster shot down.

Mike, I'd also just want to take a second and just remind you that as we look at this entire splitting capacity, remember that we are not adding MDI pounds into the market. We're taking existing MDI pounds and we're upgrading that tonnage. That means that the polymeric materials that we have left is less in availability to our customers which gives us the opportunity again. We've got a growing demand, and at the same time, we've got a shrinking supply going to that, that I would - I don't want to say that it's more commoditized. It's an important segment to us. But traditionally, it's been one of our lowest margin products that we produce. And as we move tonnage further downstream, the existing tonnage that we have upstream, if you will, we have an opportunity to renegotiate those contracts, and I believe to make those contracts more competitive to where they justify the ongoing production into those materials. And so not only are we seeing the benefit, the benefit that Phil just gave you is the benefit that we're seeing just from taking the product and upgrading it to a higher level. There's also going to be a benefit to the North American MDI business that will come with the ability to renegotiate contracts on the polymeric side of the business that will also be benefiting the business. And I'm not sure that, that benefit is going to be much less than what we have stated as the benefit is going to be - that we'll see this year coming from the splitter project. So again, I'll be kind of be candid in what we're upgrading and also what's left.

The next question is from PJ Juvekar with Citigroup. Please go ahead.

And Peter, great to see quick pricing actions in Europe. You had surcharges, you mentioned quarterly pricing going to monthly pricing. Which products benefited from that monthly pricing? And what was the reaction from customers on monthly pricing strategy?

Well, it probably wasn't the most popular thing we've ever done with our customers. But again, I think it is necessary. I would say that that was - it's done - the movement from quarterly to monthly was done across the board. It's done in polymeric, it's done in our variants, it's done in our contracts - the high-end contracts. It's across the board on all the contracts. And it's - again, I mentioned that - something that it may not be the most popular thing amongst customers, but I think that it gives them an opportunity also to better understand what we're going through on the raw material. And so, it does require more communication and more education as to why and what's going on. And we will not be the shock absorber to the industry as we said on our last earnings calls, as we said at Investor Day. So I think that's where our industry traditionally has been. We take raw material costs and our customers have a tendency to not really see the day-to-day impact of it. And I think we've got to do a better job in that area.

Great. And an unrelated question on China. A report said Chinese industrial economy is slowing down, the government is trying to cut rates and revive that economy. What signs are you seeing in China? Has it impacted your business? Can we just talk about that? Thank you.

Well, I think that as we look at China, we're trying to focus on those areas and even in an economic slowdown, we're going to continue to see growth and opportunity. Automotive continues to be - especially on the higher end, continues to be a growing market for us. As we look at the insulation, energy conservation, the entire cold chain, a lot of the crops, and so forth that are growing in China are done on the western side and brought into the large coastal high-population areas. That cold chain is something that over the next couple of years is going to require a great deal of investment. As we look at the large infrastructure projects around rail and everything from sound absorption to the absorption on the rails themselves, the shock absorbers go underneath the rails and what have you. We're seeing pretty strong demand in that area as well. So I'd say if you're looking at - like large commodity sort of applications that are readily turned around and exported, you probably are seeing a falloff in demand in a lot of those areas. While you're investing in the economy, while you're investing in long-term in insulation, infrastructure, the cold chain, automotive, and so forth, it remains strong. Our associates are there, we've got a great Chinese national workforce that have - that they're doing an extraordinary job of building a business from the ground up there not just on something that's just going to be based on the vicissitudes of the export markets. So I see our business there has been quite stable.

The next question is from Mike Sison with Wells Fargo. Please go ahead.

Nice quarter. Peter, a lot of specialty businesses are struggling to grow EBITDA here in the first quarter. So I just wanted some color on polyurethanes, how the differentiated businesses are going to do in Q1 and how they're going to generate the growth? And maybe a comment on Performance Products, I know you have an acquisition there, but where are you seeing the growth year-over-year in Q1 there?

We're seeing the growth and volume. But more importantly than volume, let's focus on value, right, I mean, one of the criticisms of Huntsman that I think has been unfairly thrown in our direction is the lack of volumetric growth. And the chemical industry by and large, we can go out and spend billions of dollars and grow volume for the sake of growing volume, but if you're not growing value in that volume, I think that you're missing a great deal of opportunity. So as you focus merely on a statistic and look at our EBITDA margin in fourth quarter of 2020 at 14% and our fourth quarter of 2021 at 15%, it's a 1% movement. If I look at it on a per pound basis $0.16 per pound versus $0.23 per pound, an increase of nearly 50%. And so I think we've got to do a better job as an industry and a better job, frankly, as a company of focusing on results on a per pound basis. So again, if we talk about absolute growth in tonnage. Again, I'm not saying that we want to walk away from volumes. We obviously - it's an intricate part of our industry and our business. But more importantly than just focusing on volume, I want to make sure that we're taking that volume that we have and we're investing and being able to upgrade it to get the ultimate value out of it. And that's ultimately where we need to be. That's why we're going to increase our margins, and so we're going to increase our trading multiple.

The next question is from Matthew Blair with Tudor, Pickering, Holt, and Co., Please go ahead.

Hi, Peter. I was hoping you could talk about dynamics in the maleic market, especially any comments on the demand side? And then should we think of this rising crude oil price environment? Should we think about that as being supportive to Huntsman's maleic margins because it would raise benzene feed costs for some of your international competitors?

Yes. The maleic market, we - it continues to be very strong. And as we look at the largest downstream derivative of maleic anhydride, UPR, as you think about recreational vehicles, everything from boats to the construction markets, the bathroom, kitchen fixtures and so forth, all of this remains quite strong. I think it will remain strong for the next couple of years. We also are being very aggressive though as we look at the maleic market as to moving as much of maleic into areas like fuel additives, lube additives, and so forth. I'm trying to diversify that customer base as aggressively as we can. We want to make sure that our formulations, our downstream applications are going to be fulsome and that we're going to be able to sell more than just one application here. So as we look at higher-priced raw materials, we're mostly a North American-based company. North America - butane is our raw material, typically that is a benefit. Higher crude prices are a benefit to the maleic business for two reasons. One, butanes is usually traded at a lower MMBT value to crude oil. And maleic anhydride is also an energy-producing production meaning that it generates steam, it generates energy, where we have a maleic facilities as we do in Pensacola, Florida, and as we do in Geismar, Louisiana, that are near and built in conjunction with larger chemical plants that are able to take that energy and effectively and efficiently use it. The maleic business will benefit from that. So long story short, the higher energy prices, I think, are going to be something that is certainly not going to be detrimental to the maleic business.

Thank you. The next question --

Operator, I think we've got time - Operator, I think we have time for one more question. We usually try to finish at the top of the hour. We've gone a little bit over that. We'll take one more question here.

So we have the next question from Arun Viswanathan with RBC Capital Markets. Please go ahead.

Great, thanks for taking my question. Congrats on a good year. I guess, just wanted to understand your thoughts on capital structure here. Your debt levels obviously have come down, and you've done a great job of deleveraging. You've been able to increase your free cash flow conversion as well. And you did kind of go through some of the organic projects you have in mind, but it looks like your CapEx is going to remain $300 million or below. So - and you potentially have some cash coming in from Textile's disposition as well. So when you consider all of that, where do you see your leverage going and say, the next couple of years, I mean, would it be safe to think that maybe you could see that rise up to the two level or what do you think is optimal? And if you do have all that cash, how do you plan to spend it, I guess? If you could just help us with that. Thanks.

I think we've said that we want to spend our cash and we want to make sure that it's mixed over four areas. One of those being in making sure that we're investing organically within the business. Second, that we are looking at bolt-on acquisitions. Third, we're paying a competitive dividend. And fourth, share buyback. And if we're not able to have the opportunity to buy bolt-on acquisitions, I've been surprised at the high multiples that are being paid for relatively decent businesses, but I'm not sure that they warrant some of the multiples that have been paid recently. We're not going to chase after those. We're going to continue to be disciplined in our capital and our M&A opportunities and we will be increasing our share buyback, I would imagine, and get even more aggressive in those areas. We'll be looking at our organic investments as to where we can upgrade materials. And obviously, making sure that we pay a competitive dividend. But if things continue as they are today, I would see more capital being pushed towards share buybacks.

Thank you. Ladies and gentlemen, this was the last question for today's conference. This concludes today's conference. You may now disconnect your lines. Thank you, and have a great day.