William McLain: So, Kevin, I think we highlighted earlier that most of the $40 million headwind on the utilization rate will be in Q3. So, as a result, I would expect it to be similar and slightly down sequentially in Advanced Materials.
Kevin McCarthy: Slightly down versus 2Q, Willie?
William McLain: Correct.
Mark Costa: Yes, of course, there the lack of that sequentially from Q3 to Q4, where that improving volume and spread will pop back up. So, you can’t think of normal seasonality around the back half of the year really for either AM or AFP, because most of the inventory reduction actions are happening in Q3 more — much more so than Q4. But the volume momentum and margin improvement is continuing through 3Q and into 4Q, not just because of our inventory actions but because our customers are doing the same thing, right? They’re also taking inventory down more in Q3 and oddly less in Q4, when you think about it, in the sort of odd year we’re living in right now?
Kevin McCarthy: Yes, it is odd, isn’t it? That’s very helpful. Secondly, I wanted to ask about A&FP. I think you referenced a heat transfer fluid project that cost $15 million to be pulled into the second quarter. Can you just elaborate on what you’re doing there and how that is translating to a meaningful earnings swing?
Mark Costa: Yes, sure. So, the fluids business is a bit sort of chunky in how volume shows up, right? Because you have these very large projects. And at some point, they complete the project. And at the end of the completion, they need to charge that plant with heat transfer fluid to then start up the plant. And in this case, this was an extremely large LNG project that had been under construction for several years, and their completion actually happened a little bit sooner than they expected and moved forward with wanting to charge that system and so we shipped that volume. We thought it was going to be in the third quarter turned out to be in the second quarter. But this overall business is a great business. And something I’d say that we’ve really accomplished a lot in this business is diversifying our market exposure to different end markets.
So, historically, it’s been very driven by the polyester industry and a few other sort of chemical facilities that use a lot of heat transfer fluid. But we’ve seen a huge growth in LNG, as you know well, with the geopolitical dynamics going on right now with Ukraine in Europe, and there’s a lot of heat transfer fluid in those plants, too. So, we’re diversifying out of China into other applications, like this project that creates a lot of value for this business. And they’re very high-value projects. So, when they do show up, they drop a lot of earnings to the bottom-line. And so it just happened to be in Q2, which then means as you go from Q2 to Q3, you get a $30 million swing in earnings.
Kevin McCarthy: Okay, perfect. Thank you so much.
Operator: Our next question comes from Matthew DeYoe with Bank of America. Your line is open.
Matthew DeYoe: Morning everyone. Talking a little bit about Naia in textiles. What’s the opportunity for EBIT if we think about next year in growth? I mean I’m just thinking, given the margin recovery in cigarette filter tow, does it even make sense to rotate tonnage from filters to fibers? And is Naia still growing into your excess capacity? Or are you now transitioning filter capacity to textiles?
