Good day ladies and gentlemen, and welcome to the fourth quarter 2011 Albemarle Corp earnings conference call. My name is Suwanda and I’ll be your coordinator for today. At this time, all participants are in listen-only mode. Later, we will conduct a question-and-answer session. (Operator Instructions). As a reminder this conference is being recorded for replay purposes. I would now like to turn the call over to Mr. Lorin Crenshaw, Director, Investor Relations and Communications. Please proceed.

Thank you, Suwanda and welcome everyone to Albemarle’s fourth quarter 2011 earnings conference call. Our earnings were released after the close of market yesterday and you’ll find our press release, earnings presentation and non-GAAP reconciliations posted on our website under the Investor Section at albemarle.com. Joining me on the call today; are Luke Kissam, President and Chief Executive Officer; John Steitz, Chief Operating Officer; and Scott Tozier, Chief Financial Officer. Before we get started, I would like to ask everyone to please save the date for Albemarle’s 2012 Investor Day which will be held in New York City on Tuesday May 22nd. Registration and event details will be e-mailed in the coming weeks and we look forward to seeing many of you there. As a reminder, some of the matters discussed during the call may include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Please note the cautionary language about our forward-looking statements contained in our press release. That same language applies to this call. Also, to the extent that we discuss any non-GAAP financial measures, you’ll find reconciliations in our press release we just posted on our website at albemarle.com. With that, I’ll turn the call over to Luke.

Thank you Lorin and good morning everyone. We appreciate the opportunity to share our fourth quarter and full-year results with you today. I’ll begin today by commenting on the company’s quarterly and full-year results and we’ll share a few highlights of some of the major initiatives that we have previously discussed with you. John Steitz will then walk you through business segment performance before Scott Tozier reviews financial highlights. As usual, at the end of our prepared remarks we will open it up for your questions. I am delighted to report that despite a challenging global operating environment in the fourth quarter, Albemarle closed 2011 on a strong note with fourth quarter net income of $99 million or $1.11 per share, up 21% year-over-year. This marks the ninth consecutive quarter of year-over-year profitability improvement for us. Net sales of $707 million were up 17% year-over-year while operating profits of $136 million were up 22%. Fourth quarter operations generated $209 million of cash flow and we ended the quarter at targeted inventory levels and better than expected working capital levels. Great results. In fact, from an earnings standpoint, it was the best fourth quarter in our history and prior to 2011, would have been the best quarter in our history. These strong results capped a great 2011 for Albemarle. Full-year 2011 earnings were a record $436 million or $4.77 per share compared to $3.56 per share in 2010. Net sales for the year totaled $2.9 billion, up 21% year-over-year. Full-year EBITDA was a record $701 million and was up 29% year-over-year. Profitability as measured by either operating margins of 20% or segment margins of 24% respectively achieved new highs. Great year and a great first step towards Vision 2015. Scott will talk more in a moment about our financial results in…

Thanks Luke and good morning everyone. I will start with Polymer Solutions, which reported fourth quarter net sales of $209 million and segment income of $37 million on a double-digit volume decline. Weak mineral flame retardant volumes and unfavorable fixed cost absorption were the key drivers. Polymer still achieved 18% segment margins reflecting the impact of structural changes in the business and an overall healthy pricing environment. Mineral flame retardants profits fell by more than 50% year-over-year during the quarter on 37% lower volume. Because Europe represents majority of our mineral flame retardant revenues, results were directly impacted by progressively worse sentiment throughout the quarter. Brominated flame retardant volumes rose 10% year-over-year or were down 8% sequentially as economic uncertainty prompted more conservative inventory management across the electronic supply chain. Lower anti-oxidants and curatives results also contributed to Polymer’s quarterly performance. Segment income for this division was down largely due to absence of a major production campaigns supporting high speed rail orders and the timing of select anti oxidant campaigns, which will now occur in the first quarter. For the full year excellent pricing, reasonably strong demands through three fourths of the year and structural initiatives allowed Polymers to deliver full year net sales in excess of $1 billion for the first time, up 11% year-over-year; a record segment income of $238 million up 20%, and record segment margins up 24% an expansion of 180 basis points year-over-year. Looking forward to 2012, January flame retardants order patterns are picking up with enclosures, connectors and printed wiring board order patterns all reflecting more positive trends in recent weeks. We continue to monitor customer order patterns closely and remain focused on keeping our inventory levels in line with customer demand. In catalyst, higher pricing and healthy global volume drove fourth quarter net…

Thank you John and good morning everyone. It’s tough to overstate how impressive the company’s 2011 financial results have been given the macroeconomic backdrop. I am pleased to confirm that on a full year basis, we met each financial objective laid out in the Vision 2015 planning framework articulated at Investor Day. You will recall that framework cultured double-digit growth in revenue, earnings per share and cash flow, a focus on disciplined capital allocation and 20% returns on capital. Each year, on our march towards 2015, will not be as robust as 2011, but it’s nice to be off to a great start. In the fourth quarter, we generated EBITDA of about $153 million [$163 million], up 16% year-over-year and an EBITDA margin of 23%, roughly in-line with the year ago period. Full year EBITDA rose 29% to $701 million, year-over-year to a new record with full year EBITDA margins of 24.4%, up 140 basis points and also setting a new record. In terms of P&L items of note, R&D expense was $19 million during the quarter, up 29% and ended the year at $77 million up 32% as we continue to invest in a number of organic growth opportunities including the strategic adjacency initiatives we outlined as part of 2015. For the full-year R&D cost as a percent of revenue were 2.7%, rising 20 basis points versus 2.5% in 2010. Fourth quarter SG&A expense rose 12% year-over-year and ended the full-year at $312 million, up 17% versus 2010 driven principally by performance-based pay and higher pension expense. These costs were well contained for the year declined 30 basis points as a percentage of net sales to 10.9% versus 11.2% in 2010. Our effective tax rate for the fourth quarter and full-year was 23.3% and 23.6% respectively, essentially flat versus…

Operator, at this time we will take questions.

Thank you (Operator Instructions). Your first question comes from the line of David Begleiter with Deutsche Bank. Please proceed.

John, you mentioned some order in pattern improvements in bromine as far as in January, is that normal seasonality or is that something more from restocking or a pick up in market demand you think?

Yeah, David, normally we have a weaker December with inventory corrections and I think that was a bit exaggerated at the end of 2011. So I think a bit of that is normal seasonality and we have the Chinese New Year kicking in relatively early. So we are still hoping for a bit of a boost in the first quarter here as customers restock. But I will add this David. We saw more emergency orders in the brominated flame retardant chain than I think I can recall in near-term history. So it’s just another asset to consider and there is a lot of destocking going on along in the chain.

And just on HPC, you mentioned a strong Q1 order book. How does Q2 and even Q3 look in that product chain?

Well, I would say overall where say six months ago, we thought very confident that we would have pretty high mid-teens year-over-year volume growth. I would say we have mitigated that a little bit, but year-over-year we still see volume growth in the 7% to 10% range in HPC. So we are starting out very strong in the first quarter. As we said sold out and second quarter, we will dip a little bit from that level. But generally, I mean, there is a lot of better seasonality there too because everyone is at least in North America and Europe preparing for the driving season. So we typically have stronger HPC volumes in the first quarter and that mitigates a little bit in the second quarter, but overall for the year we feel still very good about it.

And John just last on your JBC expansion, what will take your bromine capacity to and where is it coming from?

From a JBC expansion, it will take JBC in the range of 120,000 met tons at JBC for running flat out.

Your next question comes from the line of PJ Juvekar with Citigroup. Please proceed.

You know in polymer additives, it’s almost like two different segments with brominated flame retardant seems to be doing well and then you have the struggling portfolio of mineral flame retardants, antioxidants and curatives. I was wondering if you could slice those two pieces and compare the profitability for us?

The real driver for us has always been brominated flame retardants in our polymer’s business, no question about it. So typically we are talking about in the range of 2/3rds of our profitability on brominated flame retardants, but one thing I’d note for you is what we saw in bromine in the fourth quarter was reasonably healthy volumes, you know we talked about a 10% up year-over-year, down a bit sequentially. But when we saw that, we really took some aggressive steps, you know we had sales down sequentially 7% to 8%, but we did take production down over 20% and we brought our inventories down very healthily, so to give us a good position for 2012. But anyway, hopefully that frames up the various pieces for you. The biggest issue we had in the fourth quarter in polymers was by far mineral flame retardants with all of our, majority of our business being based in Europe and every time Italy or Berlusconi or Greece was mentioned, you know, we saw a decline in customer orders in that business. So the good news is we see volumes picking back up in the first quarter which is good.

And then secondly you talked about lithium extraction in Arkansas, can you tell us how much lithium is there in the brine compared to some other deposits and what kind of operating earnings impact can you expect from that?

Yeah, from a standpoint of what lithium is in the brine, PJ, it’s hard to tell until we get in there and actually start operating. We’ve got estimates based on what the brine is and we think that we’re going to have, what I would say is a commercially viable process and volume. You obviously can’t enter that market with too limited a volume where you can’t really have a real play to be consistent for your customer. So we wouldn’t be going in if we didn’t think we could have a commercial scale product there. And I think that when we look in at it, when we get both of them done, both sides done we would be in the range of 10% or so of the market. It is what we would hope to be able to capture from those lithium extraction technology we have today.

But very cost competitive position, PJ, at the end of the day.

Your next question comes from the line of Bob Koort with Goldman Sachs. Please proceed.

I was wondering if you could give us a little update on taking out the rare earths in your catalyst business. Obviously there was a strong need to do that just six, nine, 12 months ago and looks like that need is moderated a bit, so has that sort of stifled the transition, are you agnostic to that change and just give us an update there.

: I think we are being helped a bit by the volatility in the crude slate as Luke mentioned, very much heavier crudes being utilized globally, but anyway to answer your question it has mitigated a bit, but us and others I think have been reasonably successful in helping this broad slate of refiners globally achieve what they are trying to achieve with on rare earths. : I think we are being helped a bit by the volatility in the crude slate as Luke mentioned, very much heavier crudes being utilized globally, but anyway to answer your question it has mitigated a bit, but us and others I think have been reasonably successful in helping this broad slate of refiners globally achieve what they are trying to achieve with on rare earths.

And Luke you mentioned something about maybe finding or coming through and finding some assets that you can do some with from an M&A standpoint. I guess maybe I wasn’t paying attention closely enough, but is that separate and distinct from the 2015 plan and if so why wouldn’t that have been incorporated then?

When I was talking about M&A, what I was looking at is some of our underperforming assets, so we have got some assets that we look at from time to time, are all these assets giving kind of returns that we need. And you know we want to surprise you guys with the fact that you are doing an evaluation today and maybe taking some actions. Well I want to highlight today that we have got that evaluation under way which should result in possible divestiture or shutdown some assets or consolidating and want to give you heads up on that. We are still looking on the outlook for M&A that would be still be included within that Vision 2015, hadn’t pulled the trigger on anything, very meaningful today, but that don’t mean we haven’t been out there knocking on doors and looking and still think that’s a critical piece of our Vision 2015.

So is it fair any assets you are considering would be modest in scale?

Yes.

Your next question comes from the line of Laurence Alexander with Jefferies & Company. Please proceed. Laurence Alexander - Jefferies & Company: I guess first of all a question across your bromine derivative portfolio. Can you give us updates on pricing trends and if there were no further price increases in 2012, how much of a tailwind, you'd expect all else being equal?

Overall, our price environment has remained very healthy across the bromine chain. If you look at brominated flame retardants and I strip out the mix effects, our brominated flame retardant pricing improved sequentially 3% and up over 25% year-over-year. That’s a pretty significant driver for us. In clear brines, that’s in course fine chemistry, you know our pricing has remained pretty healthy there and we’re seeing some significant step up in volumes. So we will revisit that as we go forward, but overall very across bromine, brominated flame retardants and some of our advanced bromine derivatives remains very healthy from a pricing point of view. I say the biggest impact going forward in 2012 is the improvement brominated flame retardants beyond the first half and that’s going to be I’d say the most significant issue that they we are tracking from a pricing volume point of view. Laurence Alexander - Jefferies & Company: But is it fair to say just triangulating very roughly on the derivatives portfolio, it looks as if that will contribute about 2% to 4% total topline sales? Is that roughly the right order of magnitude?

On the entire bromine chain, yeah I’d say that’s a pretty good assumption. Laurence Alexander - Jefferies & Company: And then for the custom you know the custom chemistries that you are doing in fine chemistry for some of the new technology applications, do you have a rough sense for how much of the tailwind that could be?

Next year? Laurence Alexander - Jefferies & Company: In 2012?

You know we’ve always said it you know some of these new products extended out of full year would be in the $0.15 to $0.20 per share range. So our fine chemistry model is really working well, very proud of it and a lot of new opportunities coming in. Laurence Alexander - Jefferies & Company: And than just lastly, can you give an update on mineral flame retardant pricing?

Mineral flame retardant pricing in the fourth quarter held-in there pretty well. So it was roughly flat sequentially, up 4% to 5% year-over-year. We got the euro going down year-over-year. That impacts our translation on pricing. The general view in Europe is with volumes softening in the fourth quarter, pricing discipline was awfully good and now we are seeing volumes pick up. So overall we are hanging in there.

Your next question comes from the line of Mike Sison with KeyBanc Capital Markets. Please proceed.

In terms of 2012, you sort of gave us a couple of headwinds of foreign currency, pension, and looks like tax rate teeny bit higher. Could you help us frame up some of the positives that could offset those headwinds and I think you sort of softly suggested earnings should grow in ’12 versus ’11?

I think what I am trying to do Mike is, right now, we have got some good dynamics for our catalyst business. So catalyst, I feel good. I think when we talked to you previously, we were talking about if we got an 80, 80, 80, 80 kind of four quarters from catalyst, just kind of strong quarters like that, we would feel good about that and we’re still doing it, we could pop up there. In fine chemicals, John had outlined some of the things in fine chemistry services. Clear completion fluids should be strong in 2012. Halliburton was pretty bullish, on the Gulf. So that bodes well for us because we did in 2011, did a lot of clear completion fluids in the Gulf. Those were internationally. So, fine chemical services should continue to build on that momentum and I think have a stronger year in 2012 than it did in 2011, so both of those feel really good. It really comes down to polymers and what’s going to happen from a mineral flame retardant standpoint in Europe. How Europe is going to recover in that wire and cable market and how our mineral flame retardant will respond, as well as, are we going to see a pickup in the second half of the year on Brominated Flame retardants and actually key into that electronics markets. So, if we see the economy recover in the second half of the year, like we expect, we should be able to grow our business and continue on our path, the Vision 2015, Mike.

Okay, great, and then, John, in terms of the fourth quarter, where were your operating rates for bromine and where they are tracking now?

Mike. The derivatives from the flame retardants were running about 70%. The overall Bromine chain was pretty close to sold out, Mike. I would tell you the pick up in clear completion fluids our more controlled business is doing much better, second half was really strong for us. We mentioned some of the new products in food protection. And so our bromine chain was very tight, call it 98%, 95%.

So, these you had in the fourth quarter from, sort of, reducing your inventories. How big was that and that sort of comes back in the first in terms of profitability?

Yeah. The, well, what I tried to indicate in our script was we’re going to keep an eye closely on inventory. So, we stay in line with customer demand. But we also believe that the fourth quarter 2011 bottomed up from profitability perspective and we’re taking that number up in the first quarter. So, that feels pretty good. So the impact of reducing production volumes in the brominated flame retardant chain was probably $10 million to $15 million of absorption issue for us in the fourth quarter of ’11. So we feel we got inventories in a good position right now.

And then last question on brominated flame retardant pricing is, you have some flow through, don't you, heading into this year and any expectations on further price increases depending on I guess how demand unfolds in the second half?

Yeah, Mike we are just going to keep a real close eye on that. We feel really positive about it and we get a nice correction and political environment calms down a bit and we get on top, I mean those kind of volume trends all help the pricing environment.

Your next question comes from the line of Jeff Zekauskas of JPMorgan. Please proceed.

So in the first quarter to just to clarify, you expect your average prices to be higher than they were in the year ago period?

Yeah, that's correct, yeah. There would be pricing across polymers probably up mid-single digit year-over-year excluding any mix effects.

Secondly, can you talk about your, I guess maybe your three or four major raw materials and how you expect them to fair for 2012 and what might be the effect on your income statement?

Jeff, let me give you a shot on that. I mean if you look at that from a dollar stand point, I understand it's the metals that our going to our catalyst business, moly and the nickel and the metals as well as the rare earths. So we talked in detail about rare earths, where that's going from the 140,000 in that time to 55,000 in that time. The key on that is this going to be how the pricing in the contracts that we passed through that rare earths and the cost that we acquired rare earths for and what that spread does and how we are able to manage that. The metals for HPC does seem to be fairly stable John, across 2012. So we wouldn't see that, John. The other impact is where we’ve got our biggest volume of products would be due to a high rate in our mineral flame retardant business and there are limited numbers of suppliers there and we finalize on negotiation of those contracts and should have a little bit of headwind there but we are working to mitigate that and are trying to find a way to find some alternative sources that that will allow us to be better there. So from a volume standpoint I think it is 88 from a dollar standpoint we got the metals and the rare earths we talked about previously.

Okay and then you have the fencings and all, BPA and a change in the volatility associated with it Jeff. So we always try to work to get that passed through. As we mentioned rare earths and metals and overtime that should really have no impact on the P&L.

And do you get some benefits from lowering natural gas prices and from lower chlorine costs?

Chlorine is pretty stable. We’re in bit of tailwinds situation network on natural gas. Natural gas consumption is based on production levels. But that could be a little bit of better, every buck is call it a nickel.

Your next question comes from the line of Steve Schwartz with First Analysis. Please proceed.

John if you could at least help us with the year-over-year volumes change for HPC and FCC in the fourth quarter give some idea how those changed?

Yeah, it was, HPC was flat year over year and up just year sequentially, Steve.

Okay. So that was HPC and FCC?

Yeah, FCC was up little bit sequentially you know call it 27 and 8% and really flat year-over-year.

Okay.

Really impact there. Though I will say that the mix really improved and as I have said this crude slate is getting more difficult to deal with. We’re seeing more heavy resist FCC catalyst sales than we did year ago.

Okay. and as you are going to the first quarter here in the order book for HPC is strong. Doesn’t that usually have an impact to negative impact on FCC volume?

Yeah, there is that seasonal impact Steve for sure. So we probably start to get little bit slower on FCC volumes but picking up through the course the summer spring season.

Yeah.

That’s right.

And so you are coming off a quarter to fourth quarter where the operating margin in that business was pretty strong. What impact would you expect that to have on first half margin in that part of the business?

For the whole year, we think we can hold this margin. So, we had a really nice spike in the third quarter of longer term. To get our margins at that level is our real goal. But we feel pretty confident about holding onto the margin level of what we achieved in the fourth quarter.

Would you feel you had a bit of a tailwind in the fourth quarter as a result of declining cost in rare earths versus pricing?

Right. We have talked about that in the past and that impacts that business by 150, depending on the mix 150 to call 250 basis point margin this year.

Okay, and then just one last one for Scott. You guys mentioned the higher pension expense, should we just assume then corporate expense for 2012 would be about $20 million to $25 million higher than it was in ‘2011?

Yeah. Corporate expense, yeah. That’s about right from the pension impact, although some of it gets absorbed into the businesses as well.

Your next question comes from the line of Edward Yang with Oppenheimer. Please proceed.

Just feed-backing on the previous question on catalyst volumes in the fourth quarter were marginally negative and you mentioned HPC and FCC were basically flat. Could you just elaborate why the volumes were flat there?

Yeah, yeah. That’s a good pick. Yeah, you are right. In fourth quarter 2011 volumes were down a bit. In the last quarter of ’10 there is a lot of, what I’d call, experimentation going on and we did sell some regenerated catalyst in FCC, which is a little bit unusual for us and that happened in fourth quarter of ’10. So the year-on-year volume comparison is a little bit awkward, if you will because of that, volume spike last year.

Okay, and what are your expectations for 2012? Catalyst volumes what would that be?

I am sorry, Ed, I was talking over you.

Overall expectations for catalyst volumes, you mentioned HPC up a mid-single digit, FCC you expect to be up positively as well?

Yes, we do, yeah. I would call mid-single digit as well. So overall our volume outlook right now is reasonably healthy.

Okay. And Fine Chemistry, your volumes were very strong there, up 24%. Was that more, you mentioned, custom projects in both clear and [bulk] brines, which was the larger contributor and your expectation for 2012 volumes?

Yeah. The Fine Chemistry, [ag, intermediates] and the new materials was probably about 60% of the total 40% was clear brine’s mercury control and food safety. So hopefully I will give you a little feel there.

I mean, what’s a good run-rate for growth in 2012 because I know, Fine Chemistry could be somewhat lumpy in terms of the growth.

Yeah, because of the nature of those products, and we sell some products in gram quantities that could drive down the share for us, right? But I would say overall, projection, we will grow volumes in Fine Chemistry, the [SBU] and total year-over-year and we’re seeing a pretty strong tailwind right now in Clear Brine fluid’s activity, especially with the products slate we play into, deeper exploration and usage of heavier brines.

Okay, and just finally on Polymer Solutions volume could you just talk a little bit on the volatility you are seeing there; you know your guidance for fourth quarter volumes were more flattish, it came in below that and you had indicated you are seeing some improvement there, but in the prior quarter you saw some improvement as well. So what happened from November to December to lead to the sequential volume decline you saw?

So, you know I would say the biggest volume driver for us was clearly mineral flame retardants and we saw a weaker back half, the half of October, we saw a weak November and really running on thins in December. As a matter of fact, I remember our biggest US customer, we actually had a delivery scheduled on a Saturday just giving an idea of inventory levels and it didn’t arrive till the following Monday and it shut our plant down. This was the raw material of entire shipments probably $30,000 or $40,000. So it just gives you a feel of how low our customer base is running their inventory levels to, but it’s just crazy. And it has the mineral flame retardant volumes have as I said, appear to be picking up now in the first quarter. In brominated we had a pretty good September so we talked about we are feeling pretty good going into the fourth quarter. We also saw it really slowdown in November which surprised us; a lot of destocking there. And as I mentioned, we saw more emergency orders and we can recall in near term history in December and volumes appear to be picking back up. So overall, we don't want to get carried away with our polymer view for the first quarter, but we believe our profit level will improve in the first quarter of ’12.

Yeah, this is Luke. To give you a little bit of idea, if you look at mineral flame retardants, our volumes in mineral flame retardants in the fourth quarter will lower than the volumes that we saw in first quarter of 2009. So we had all time low from a volume standpoint in mineral flame retardants. Bromine like John said was up, but that’s a big volume over there; we’ve made a lot of volume in it and it was down to that level. So remember when we talked in the third quarter or in autumn we talked to you about how we have strengthened this business over the years taking these hard steps with pricing, with asset consolidations, with some efficiencies’ that we've got. I think the fourth quarter, we’re sitting here talking about how we had a sluggish quarter, if you really look overall from an Albemarle standpoint, it would have been the best quarter in the history of the company before 2011. So we had some real challenges that we have overcame and our hope that people understand what this means for the strength of our business. We’ve got strong business and we feel good about 2012; if we can get some help from that economy, in the second half we can grow this business; but it is going to be the second half here in 2012.

(Operator Instructions) Your next question comes from the line of Dimitry Silversteyn with Longbow research. Please proceed.

A couple of questions that I have and one you sought of answered that on a couple of discrepancies that we are seeing in the growth of volumes in the Fine Chemicals division and in the Polymer Services division or solutions division. But it sounds like majority of the volume growth was attributed to the custom synthesis part of the business. On the catalyst margins, if you kind of take what Luke has said about that sort of 80 million a year a quarter run-rate you know roughly speaking in terms of profitability, it looks like your year-over-year profitability will be similar 2012 to what you have delivered in 2011 about 26%, 27%. You know you have quite a bit of step-up in the last couple of years; so what you know with metal price declining, with rare earth prices declining, with all of these projects that you have going on-stream in 2012 in South Korea and in Saudi Arabia with a much maturation of the Polymer Catalyst business, why would we not expect to see more meaningful margin expansion and profit growth in the Catalyst division in 2012 versus 2011?

Yeah, let me take a crack at that Dimitry; but just to clarify, you know what Luke said is, we see a new base in the catalyst call it 80 million a quarter with one quarter of that is likely to pop-up for us, you know maybe in the heavier driving season, we don’t know if its going to be second quarter or third quarter you know at this point, but we see that and we believe we will grow our catalyst business, I mean we’re really clear about that. And margins, managing margins with raw materials and like you said rare earth is all part of that equation. : So, but we believe we can just summarize, and we’ve been to grow our Catalyst business 2012 and we’re positioning it for some exciting growth in 2013 and onward.

Okay, alright. Thanks for that color John. And then a question about Polymer Solutions margins, I understand that when you are running your flame retardant business at 20% utilization rate, it’s hard to get good margin. On the other hand mineral flame retardants, which sounds like the area where you suffered the most volume decline; it also happens to be I believe, one of your lower margin businesses. So why wouldn’t you have a positive mix impact on margins and you know -- I mean, I would expect to see that at mid-teens operating margin out of the polymer additives. So, I guess I am just looking for some clarification of what happened there in terms of under-absorption versus pricing and declining raw materials and improving mix?

Yeah, so I think the overwriting point I like to make as year-over-year and sequentially for that matter in the fourth quarter, we had probably a 15 million in under-absorption in brominated flame retardants and it was probably in mineral flame retardants in the $5 million to $8 million range. So that gives you a feel, if it haven’t been for that we would have been right in the box of where our profitability was at the end of 2010. So it’s really, I would say we kind of had the luxury of two really strong businesses performing very, very well and we saw that midway through the quarter. And we decided to get more aggressive in terms of our inventory levels in the flame retardant chain and for that matter curatives and anti-oxidants.

Okay. So it sounded like that the slightly positive volume year-over-year account that you had in brominated flame retardants you talked about was mostly in inventory liquidation rather than manufacturing, so your under-absorption was over-emphasized if you will, relative to the numbers which you’ve delivered?

Yeah, just to state, in brominated flame retardants, our sales sequentially were down about 7%. We took production down 20%. And we took inventories down between 15% and 20%.

Okay.

In polymers, so, I mean it was, I thought, really good cash management and you saw some really strong cash generation from the company. So I mean that all has kind of played into trying to position ourselves you know, to grow a company in 2012.

Your next question comes from the line of Todd Vencil with Sterne Agee. Please proceed.

Most of my questions have been knocked out, but you mentioned expansion in the U.S polyolefin catalyst capacity this year. Can you remind us of what’s going on there and how much you’re adding?

Yeah, I mean, what we’re trying to do is a lot of these new, we talked about organometallics with TEA and MAO and TMA. This apply that all fall into that market for plastics as well as the LED and electronics chains and we’re doing some fairly significant debottlenecking so that we can make sure that we are ready to supply that growing demand going forward. So, that’s a big growth area for us. We’re excited about it and we want to make sure that we’ve got the capacity there to serve the customers that what they need around the globe.

Yeah, and in our plant here in Baton Rouge where we make our active Cat line of products, which is a total catalyst solution for polyolefin producers. We expanded that plant during the downturn and it was sold out almost immediately. So that’s an additional debottlenecking we’re doing here right in town.

So broadly speaking, I mean are you sort of super tight and generally sold out across the polyolefin catalyst in the US you know in addition to the active Cat recently?

As the general rule, that's a very broad statement but as a general rule, yes, its been very tight and we feel we need to take the steps to expand around the globe in addition to what we are doing in Korea and in addition to what we are doing in Saudi to be able to service the customers and be there with the solutions that they need and when they need it.

And broadly speaking, how much do you feel like you are going to be able to get these debottlenecking?

In terms of revenue?

Percentage wise.

Oh boy.

Or revenue, either way.

15% to 18% to 20%.

Your next question comes from the line Aleksey Yefremov with Bank of America. Please proceed.

I just wanted to double check on elemental bromine chain, on bromine chain. In elemental bromine, John I think you mentioned your utilization was about 95% in the quarter?

Right Aleksey.

Does that mean that you might be capacity constrained in the first half of ’12 before Jordan expansion kicks in?

This is Luke. We do not fore say what we’re going to have any situation where we are capacity constrained. There are some debottlenecks that we can do, we’ve expanded some wells in Magnolia, that will becoming online and we feel great about the capacity that we need to be able to service it and when we bring it online there is going to be a lot of questions about this. So when we bring that capacity in Jordan online remember we’re going to bring it on an as needed to meet the demand that we see out there. Its not such that we've got a habit of running a 100% on day one, we will be very good at storage of that bromine and bringing online as needed. So I don’t say we’re in under supply in the short term or an over supply in the long term.

And then just a quick follow-up on antioxidants campaign that has spilled over into Q1 what’s the approximate impact on sales or earnings?

You know that all these things said when we run one of these campaigns for our curatives business it usually absorbs, call it $4 million to $5 million. So we’re continuing to manage inventories very tightly as we mentioned Aleksey. So broadly speaking, we view that our polymers business is going to pick up in the first quarter, but we're managing it very closely and we don't want anybody to get carried away with the expectation here, but we feel, we've have been through the worst in the fourth quarter.

And with no further questions, I would now like to turn the conference over to Mr. Lorin Crenshaw for closing remarks.

Well, we thank you for your time and your questions and look forward to seeing you at Investor Day and certainly give me a call with any further questions.