Lori Ryerkerk: Yes, so Jeff, in 2022, we had expected back at the time of the purchase we expected 2022 to come in at about $500 million of EBITDA. Obviously with the year end challenges in M&M, that number was a little bit lower than that. Now, I think — we had thought originally that in 2022, they’d be at 800, that’s been a more typical number for M&M, we believe we could grow that to 900, now we’re saying 700 for next year. If you look at what happened in 2022, I think there was a number of factors. First is with a take-or-pay contract that they had for raw materials, although they saw weakening demand they continue to produce, and that led to a lot of inventory and that sort of tie into what I’m going say about fourth quarter.
Raw materials were fairly high for the year, compressing margin for nylon for the M&M assets as well, but we saw a lot of demand destruction and we thought, especially in Asia, we thought a lot on standard grades and. I think as we talked about last quarter. What we saw was a desire to maintain margin in M&M, but as a result, they lost a significant volume on standard grades by trying to hold prices when other prices were coming down. So, volume loss, at the same time, they weren’t raising prices on premium grades which they could have been doing with raw material pricing going up. And these are things that we’ve had to work on. So we’ve really been working on pricing over the last three months, trying to drive more volume and standard grade trying to raise pricing in other grades.
We’ve really been working the product pipeline. We’ve been working cross selling, we’ve really the team has been doing a great job working all of these things to really drive back to where we believe we should be at that $800 million EBITDA run rate by the end of 2023, obviously these things take a few quarters to get going, but we do think we’ll be back at that maybe kind of historical level DuPont had of $800 million by the — again, by the end of 2023. In terms of contracts, I’m not really sure, Jeff, to tell you truth in terms of what percentage of the M&M contracts are monthly versus three or six months or something longer.
Jeff Zekauskas: Right. So in terms of getting the $700 million in EBITDA this year, you’d have to average, I don’t know, $200 million or so for the next — for the second, third and fourth quarters. How does the profitability lift from 80 to 90 to that 200 level? How do you accomplish that? Especially because when you read about Nylon 66, the general commentary from consultants is that there’s overcapacity and margin pressure. Is the background getting tougher, but it’s your own innovation or ways to change the business that’s improving it? What are these dynamics that are lifting it in an adverse environment — if the environment is adverse?
Lori Ryerkerk: Yes. So look, a big piece of it is synergy capture. If you look at our outlook now, which is at the upper end of the $100 million to $135 million range for synergies. We’ve achieved about $10 million of that. We think we’ll get about $10 million of that in the first quarter. That leaves $120 million for 3 million more quarters. So that’s about a $40 million per quarter average uplift. Now obviously, it’s a little bit more skewed towards the back end, but let’s think about average for the next three quarters. So it’s about $40 million right there from synergy uplift. That gets you to the kind of $120 million to $130 million range. And then we are getting volume recovery. As I said, our March order book is now for M&M basically where it was in March ’22 for M&M.
