Financial Data and Key Metrics Changes - The company reported Q3 adjusted earnings per share of $1.90, which is down 1% compared to the same period last year and in line with Q2 results [6][17] - Operating cash flow for the quarter was strong at $249 million, which included a working capital decrease of $101 million [17][18] - Discretionary free cash flow was $114 million, with a cash balance of $239 million at the end of the quarter [18] Business Segment Data and Key Metrics Changes - EBIT for Reinforcement Materials was $128 million, a decrease of $8 million year over year, primarily due to an 8% decline in global volumes [19][20] - Performance Chemicals saw EBIT increase by $2 million year over year, driven by higher gross profit per ton despite an 8% decline in global volumes [21][22] Market Data and Key Metrics Changes - In the Americas, volumes for Reinforcement Materials were down 9% year over year, with Asia Pacific down 11% and Europe up 4% [20] - The battery materials segment increased contribution margin by 20% compared to the same period last year, with a focus on differentiating products for the EV market [11][12] Company Strategy and Development Direction - The company announced the acquisition of Bridgestone's reinforcing carbons plant in Mexico for $70 million, which is expected to be accretive in the first year [8][9] - Sustainability remains a core focus, with the company receiving a platinum rating from EcoVadis for the fifth consecutive year, placing it among the top 1% of companies in the basic chemicals manufacturing sector [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate the challenging macroeconomic environment, reaffirming the full-year adjusted earnings per share guidance of $7.15 to $7.50 [27][29] - The company is focused on executing its operating platform of commercial and operational excellence to address uncertainties from tariffs and global demand [28][29] Other Important Information - Capital expenditures for the fiscal year are expected to be between $250 million to $275 million, with $61 million spent in Q3 [18][25] - The company plans to repurchase between $150 million to $200 million of shares in fiscal 2025 [25][24] Q&A Session Summary Question: Relationship between tariffs and demand in North America - Management discussed the dynamic nature of tariffs, noting that passenger car tires from Southeast Asia have tariffs in the 19% to 29% range, while those from China are around 70% [34][35] Question: Differences in volumes between North America and South America - Volumes in the Americas were down 9%, with North America and South America experiencing different impacts due to market conditions and contract season losses [42][43] Question: Impact of tariffs on tire imports and local production - Management indicated that tariffs are expected to enhance the competitiveness of local production, although the timing and magnitude of these effects are uncertain [36][54] Question: Carbon black price negotiations in North America - Early stages of contract negotiations for carbon black prices are underway, following typical seasonal patterns [48] Question: Inventory levels in the tire market - Management noted that tire inventories appear balanced, with some budget brands having elevated levels, but overall, the situation seems to be stabilizing [52][53] Question: Operating leverage from network optimization initiatives - Management explained that network optimization efforts are broad and aimed at improving product mix and cost efficiency, which should favorably impact operating leverage [61][62]

Financial Data and Key Metrics Changes - The company reported Q3 adjusted earnings per share of $1.9, which was down 1% compared to the same period last year and in line with Q2 results [6][16] - Operating cash flow for the quarter was strong at $249 million, funding capital expenditures and enabling $64 million returned to shareholders [7][17] - The company’s cash balance at the end of the quarter was $239 million, with a liquidity position of approximately $1.4 billion [17] Business Segment Data and Key Metrics Changes - Reinforcement Materials segment EBIT was $128 million, down $8 million year over year, primarily due to an 8% decline in global volumes [18][19] - Performance Chemicals segment EBIT increased by $2 million year over year, driven by higher gross profit per ton, despite an 8% decline in global volumes [20] Market Data and Key Metrics Changes - Volumes in Asia Pacific were down 11%, while volumes in The Americas decreased by 9%, with Europe experiencing a 4% increase [19] - The battery materials segment saw a 20% increase in contribution margin compared to the same period last year, with a focus on differentiating products for the EV market [11][12] Company Strategy and Development Direction - The company announced an acquisition of Bridgestone's reinforcing carbons plant in Mexico for $70 million, expected to be accretive in the first year [7][9] - Sustainability is a core focus, with the company receiving a platinum rating from EcoVadis for its sustainability leadership [10] - The company aims to build a leadership position in battery materials, targeting high-value segments in both China and Western economies [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate a challenging macroeconomic environment, reaffirming the full-year EPS guidance of $7.15 to $7.5 [27][29] - The company is focused on executing operational excellence and optimizing its supply chain to mitigate the impacts of tariffs and lower demand [28][29] Other Important Information - The company expects to maintain a competitive dividend yield and has plans for share repurchases between $150 million to $200 million in fiscal 2025 [25][29] - The company has completed a new unit in Indonesia and expanded CNT capacity in China, supporting its growth strategy [25] Q&A Session Summary Question: Relationship between tariffs and demand in North America - Management discussed the dynamic nature of tariffs, noting that passenger car tires from Southeast Asia have tariffs in the 19% to 29% range, while those from China are around 70% [34][35] Question: Volume differences in The Americas - Management confirmed that volumes in The Americas were down 9% year over year, with North America and South America experiencing different market conditions [41][42] Question: Impact of tariffs on inventory levels - Management indicated that tire inventories appear balanced, with some budget brands having elevated levels, but overall, the situation seems to be stabilizing [54][55] Question: Network optimization initiatives - Management explained that network optimization efforts are broad and aimed at improving product mix and cost efficiency, which should favorably impact operating leverage [63][66] Question: Corporate cost reductions - Management attributed a $12 million improvement in unallocated corporate costs to a mix of headcount actions and lower third-party spending [69][70] Question: Carbon black volumes in The Americas - Management noted that elevated tire imports have negatively impacted local production levels, but there are signs of stabilization and potential improvement in the future [73][75]