Good day, ladies and gentlemen, and welcome to the Third Quarter 2012 Albemarle Corporation Earnings Conference Call. My name is Carissa and I'll be your operator for today. At this time, all participants are in a listen-only mode. Later, we will conduct the question-and-answer session. (Operator Instruction). As a reminder this conference is being recorded for replay purposes. I would now like to turn the conference over to your host for today’s call Mr. Lorin Crenshaw, Director of Investor Relations. Please proceed.

Thank you, Carissa, and welcome everyone to Albemarle's third quarter 2012 earnings conference call. Our earnings were released after the close of the market yesterday and you'll find our press release, earnings presentation and non-GAAP reconciliations posted on our website under the Investors section, at albemarle.com. Joining me on the call today are Luke Kissam, Chief Executive Officer; and Scott Tozier, Chief Financial Officer. As a reminder, some of the statements made during this conference call about the future performance of the company may constitute forward-looking statements within the meaning of Federal Securities Laws. Please note the cautionary language about our forward-looking statements contained in our press release. That same language applies to this call. Finally, reconciliations related to any non-GAAP financial measures discussed on this call maybe found in our press release or earnings presentation, which are posted on our website. With that, I'll turn the call over to Luke.

Thanks Lorin and good morning everyone. We appreciate the opportunity to share our third quarter results with you today. I'll begin by commenting on the Company's quarterly results and then Scott will review select highlights related to business segment performance and financial results. As usual, at the end of our prepared remarks, we'll open it up for your questions. While we are going to limit your questions to two per person at one time, so everyone has a chance, then feel free to get back in the queue for follow-ups if time allows. Given the challenging economic environment we faced in the quarter I’m pleased with our results and encouraged by the earnings power the company continues to demonstrate. Although, our income was significantly impacted by macroeconomic and metal trends and the year-over-year drop in the rare earth price index. Our overall profitability is proving resilient and cash generation was excellent. Third quarter net sales was $661 million and net income was $99 million, $1.10 per share. Segment income was a $146 million and segment margins remained strong at 22%. While all of those metrics were down year-over-year, they were achieved against a much tougher economic environment. If you look at each GDU’s performance in the third quarter Polymer Solutions which was our business’ most negatively impacted by the global economic slowdown reported net sales of $217 million, segment income of $44 million and segment margins of 20%, much stronger performance in polymers than was the case the last time we faced similar economic conditions back in the 2009 time frame. Catalysts had net sales of $251 million, segment income of $61 million and segment margins of 24%. As we explained in the second quarter call, second half year-over-year comparisons will be tough in 2012. Given the precipitous decline in…

Thanks, Luke. I will start with the details on each segment and then close with the financial highlights. Let’s begin with Catalysts, where sales were down 16% and segment income fell $41 million year-over-year to $61 million. As the financial results of an otherwise fine fundamental refinery catalyst quarter were largely obscured by the dynamics around metals surcharges as described by Luke earlier and a weak quarter for Organometallics business. The bulk of the decline in revenue and profitability during the quarter was attributable to FCC where revenue was down 17% and operating income fell over 40%. However, volumetrically, FCC is doing great, up 17% year-over-year and 23% sequentially, as customers were using more fresh catalysts and optimizing their output, now that rare Earth prices have stabilized. The core fundamentals are excellent as the direction of the crudes plate continues to move toward more complex feeds, which is really our sweet spot within this business. HPC volumes improved 50% sequentially as expected and profit improved in line. Year-over-year, HPC volumes were slightly down with an unfavorable customer mix. We also saw a reduction in metals surcharges in HPC of about $5 million, as the cost of certain metals like Molly, nickel and cobalt came down. However, this had only a minimal impact on profits. A quarter of the overall drop in Catalysts profitability was due to Performance Catalyst Solutions, which reported weak results with revenue and operating profits down double digits due to extended customer shutdowns and customer inventory management. We also had some larger orders in 2011 that were one-time in nature. Finally, we also have started to see costs associated with the Saudi joint venture in the equity income line, which is nearing completion, but will not produce any revenue until production commences in 2013. Customer operating rates…

Operator, at this time we are ready to open the floor for questions.

(Operator Instructions) Your first question comes from the line of P.J. Juvekar of Citigroup. Please proceed. John Hertz – Citigroup: Yes, good morning. This is John Hertz [ph] on for P.J. this morning.

Hi John.

Hi John. John Hertz – Citigroup: Regarding your comments that overall 4Q should be a little bit worse than 3Q, which it sounds like it’s primarily a function of Polymer Solutions. Is it reasonable to think that Polymer Solutions’ profit could be down on a year-over-year basis in 4Q?

I think if you look at it on a year-over-year basis that’s kind of the range that you are looking at. John Hertz – Citigroup: Okay. As an extension of that, do you think a sequential pickup in catalyst could offset that quarter-over-quarter decline in Polymers?

I think you will see nice pickup sequentially in catalyst but I also think we are going to have is we have tried to reiterate on the call, you are going to see some weakness in Fine Chemistry relative to some significant contracts that we won’t be running in the fourth quarter, we won’t have the benefit of and some cost absorptions. So, if you look at it, I don’t think that the increase in catalyst will be enough to overcome the weakness in Polymers and Fine in the fourth quarter. John Hertz – Citigroup: Okay. Can you talk about where exactly your Bromine operating rates are today and what are your expectations are for the rest of the year? As an extension of that, do you need to lower your operating rates even more to kind of keep inventories under control?

Yes. If you look at our Bromine operating rates and it’s difficult to do, but if you look at our overall Bromine operating rates, they were in the third quarter kind of in the mid-70s for Bromine itself and I would expect that to drop probably to the mid-60s, mid to high 60s in the fourth quarter. If you look at our BFRs, BFRs are probably running in the range of – this is all Brominated Flame Retardants, probably at about 50% in the third quarter and I would expect to see that drop to the low 40s in the fourth quarter, which would mean obviously when you look at that that some of our (inaudible) we expect and those would run pretty hard in some of specialty Bromine run pretty hard in the fourth quarter. John Hertz – Citigroup: Okay, great. Thanks for the color.

Your next question comes from the line of David Begleiter of Deutsche Bank. Please proceed.

Thank you, good morning.

Hi David.

Luke, you commented on Bromine FR pricing sequentially year-over-year, any pressures you are seeing there?

Yes. I think if you look at, specifically Brominated Flame Retardants pricing, if you look sequentially in construction where we sell Brominated Flame Retardants in the constructions we saw a pretty significant decline in pricing. But it was really, if you remember in the last call we talked about a key raw material that goes into HPC called CDDT [ph], there was an explosion of one of the key raw material supplies in the third quarter that allowed, that there was tremendous demand that allowed some pricing there for people who really worried about whether or not they were going to supply. So, we have seen a drop down to what I would call a more normal rate, nothing for us to get along about long term from HPCD standpoint. As you typically see, Tetrabrom, you see a little nibbling around the edges, I would say, maybe sequentially probably 3% to 4%, something like that. But we are also seeing the evidence now of it tracked backup and that’s mainly in Asia. So, overall Brominated Flame Retardants seem to be holding well with those two caveats, David.

And just on Bromine for volume, any market share losses given the consumer environmental issues or was it just purely end market weakness driving lower volumes here?

We do not believe that there has been any share loss for Albemarle from Brominated Flame Retardants standpoint. I am trying to figure out a way to give you guys a view on the level of the production and level of the sales. So, I want to go back and this is for all Brominated Flame Retardants. So, if you less index of the first half of 2009, if we index of the first half of 2009 and you look to the first half of 2011, Brominated Flame Retardants were at 186% of what they were in the first half of 2009, so almost doubled. During the third quarter of 2012, we were roughly a 120%, 130% of those volumes in the first half of 2009 and the fourth quarter will be down a little bit more than that. If you look at that on the edges, electronics would probably been a little bit better than that, construction probably a little worse than that in the quarter. So, I don’t think there has been any market shift from a market share standpoint. It looks like to us it’s all macroeconomics. But we are consistently watching it and making sure that we are bringing new products to the market that allow us to maintain that competitive edge.

Thank you very much.

Your next question comes from the line of Kevin McCarthy of Bank of America Merrill Lynch. Please proceed.

Yes, good morning gentlemen.

Hi, Kevin.

Scott, I think you had commented that Polymer Solutions’ inventory days declined by about 10 days in the quarter. I was wondering if you could tell us what the before and after numbers were for that business? Also, at the end of the quarter, how would you characterize Polymer Solutions’ inventory levels relative to what you would consider a normal level for that business, is it 20% above or 50% above, how should we think about that?

Yes, I think Kevin, overall for the company you are going to see as you do the calculations that our inventory days are holding flat right now at around 65 based on revenues, so days sales in inventory, which is higher than what we would like it to be. Normally, we would like it to be for the total company kind of in the mid-50 range and continue to become more efficient there. As we said on the call also, we have built some catalyst inventory on purpose in HPC, in particular, as we have a heavy fourth quarter shipments and we have some shutdowns for some turnarounds in HPC in the fourth quarter. For Polymer Solutions, we have also seen, as I mentioned we have declines, we typically like to see them kind of in the mid-70 range, maybe a little bit lower than that as they become more efficient. So, hopefully we will be at that level by year end.

Kevin, this is Luke. If I could find what steady state for that business was going to be based upon the demand that we see it, just jerks around so quickly based on where we are on that supply chain. But what I would tell you is, if you listen to the call here, we have got cost loss absorption of roughly $16 million to hit that business in the third quarter and we will have about $20 million to hit it in the fourth quarter to give you the kind of idea where we are looking to go with inventory in that business.

It’s really helpful. I appreciate it. As a second question on performance catalyst solutions, I think you had indicated that you see that as a one quarter issue and I was wondering if you just elaborate on what’s giving you confidence that the pressure there is transitory in nature?

Yes, sure. We had a number of big customers in the Middle East who had shutdowns in the quarter related to turnarounds. So, multi-week turnarounds that impacted our volume there. They are back up and running and we are seeing the shipments resume. For one of them, it was actually tying where they are building another unit. So, in the longer term that will mean more volume for us as we keep that customer. So, as we look to that we are seeing everything in our order book and with our customers that would indicate that we are back on track and it just happened that those number of those customers all had their turnaround in the same quarter.

Okay. Thank you very much.

Your next question comes from the line of Laurence Alexander of Jefferies. Please proceed. Laurence Alexander - Jefferies & Co.: Good morning.

Hi, Laurence. Laurence Alexander - Jefferies & Co.: I guess, first question just on cash flow. Can you parse out the pricing trends for each of the categories Polyolefin, FCC and HPC excluding metal pass-through? And then tie that pricing trend commentary to the 40% drop in profits?

What I would generally say on that is, as we have said in the past, you got to be really careful about the mix issue on that. It’s complicated even further about that we got the raw material for (inaudible). So, if you look at where we are, catalyst base pricing from an FCC standpoint is holding very strong, sequentially enhancing any degradation of that and it continues to hold well. From HPC, we are seeing good pricing, we got a little bit of metal pass throughs from marle, nickel, and cobalt impacting the revenue lines, but that’s a straight pass through. So, I don’t have a whole lot of profitability impact. On PCS, pricing remain strong there. We have seen a little bit around the edges, but nothing substantial and it continues to be very strong and very profitable from an R&D standpoint. But Scott can go into a little bit more details.

Yes, I will just add. HPC is a difficult one because it’s very customer specific customized solutions. So, pricing is a difficult measure to have there. So, Luke is right, the base pricing is holding well. PCS is also affected by mix. We have got a lot of different products as that business grows, but again, the pricing seems to be holding well. Laurence Alexander - Jefferies & Co.: Your press release had some initial cautious comments on Polymer Solutions out through the Chinese New Year. As you are taking us sort of early glimpse of 2013, what tailwinds or do you have that you can actually point to a solid already sort of effectively in the bag that we should all start against fairly soft demand environment?

You are talking about overall corporation? Laurence Alexander - Jefferies & Co.: Overall corporation.

Yes, I think you will see – I think Fine Chemistry services is going to continue to see very nice growth. Over that I think clear brines, we’ve seen a pick up in the Gulf in September. So, we’re beginning to see some of those clear completion fluids orders. And clear completion fluids should have a very strong fourth quarter building to a very strong 2013. Continue to see good growth in that business, so I think Fine Chemistry services has some tail winds behind it that we feel really strong about it. And on those customs service’s contracts, the contracts are done and we know we’re going to get that volume. So, we feel really good that we can put that in the bank and go with it. We also feel good about the continued growth in our catalyst business. So I think you’re going to see that or return, once we get all this behind us and you’ll see that and probably there’ll be a little bit of roll over in the first quarter of 2013. But as a general rule, it should be behind us, and I think we’ll continue to see strong volumes in FCC and HPC in growth in our PCS business. We’ll have Korea coming on line in the second half of the year, which would give us a nice little boost there. So, I think there is some catalyst tail winds that we’re counting on and counting on both Catalyst and Fine Chemistry to grow past single, double digit type of growth in 2013, but again we’re working on the AOP and I’ll get more details to that to you in January launch. Laurence Alexander - Jefferies & Co.: If I can just clarify in Polymer Solutions, is there any room for shrinking the business or cost cutting further?

Yeah. I think there is always room for cost cutting. If you look at what we’ve done across our portfolio, but it won’t be focused just on Polymer Solutions. If you remember in 2009, a lot of that plan C that we implemented was focused on Polymer Solution. And there is still good growth opportunities there. When that business, the macroeconomic trends turn right with the pricing and the cost position that we have in that business, every incremental pound contributes it is very profitable for us. So it’s a strong business, we’re looking forward to seeing it grow next year when we get some help from the economy, and I feel good about it overall. There is not another $160 million for me to go out there and cut loss. There is some cost savings that everybody would do from a common sense standpoint from travel, from incentives, from pay, from all of that, from hiring and replacing people. But I don’t have another $160 million that we can go out there and cut. It wouldn’t be the right thing for the business and to grow the business. Laurence Alexander - Jefferies & Co.: Thank you.

And your next question comes from the line of Mike Ritzenthaler of Piper Jaffray Mike Ritzenthaler – Piper Jaffray: Hi good morning guys. Can you talk a little bit more about the growth for NBPT[ph], is it the international distribution that’s driving the growth there and given the domestic nitrogen bombs are having some of the fertilizer companies for this fall, I guess is there any risk of shortage or maybe I guess I would have expected maybe 4Q to be a little bit stronger because of the nitrogen volumes?

No, I think that long term that business is in great shape, we don’t see that there is an issue with shortness in the fourth quarter or shortness anywhere else and I think begins that they’ve always had a plan from an international standpoint to expand that business and position us to get assets outside of U.S. So we are working with that and hope we grow with that business and feel really good about it both in the short and long term. Mike Ritzenthaler – Piper Jaffray: Okay and then, is there anything outside of connector and circuit board and market release, that could solve these (inaudible) bromine volume problems. Could you give us a sense of maybe for your share in the early stages of Mercury abatement or any of the end markets that brominated (inaudible)?

I think that, if you look again from a flame retardant standpoint, we have some good opportunities and some additional markets for some new products that we’re pushing at it and we talked about in the past probably Gemini, Green Armor and some other products there that could be a nice growth over the next two to three years for us. If you look outside the use of the brominated flame retardants, we’re putting together a bromine task force and we’ve got together a bromine task force and that, the job of that group is to come up with new uses for bromine, not just the new flame retardants. We got a group working on that, but its what’s the another use for bromine and how can we drive more uses of bromine. And we’re excited about some of the possibilities of that still very very early stage, but a lot of good work and good thought process is going on in there. We don’t have a big market share of the mercury control market today and we’re not in the Section 45 in the U.S for mercury control with those clear completion fluids and until we get meaningful regulations in the U.S. and abroad that market is going to be slow. So I think we’re doing things in our specially bromide business, that we’ve seen nice growth there. We talked about that would drive new uses for bromine and this is just going to be a continuation of finding new ways, gaining some market in a cost effective manner that allows to grow uses of that molecule.

And look at that in the shorter term clear brine fluids, clearly one that we’re excited about, literally in the last week of September, where we had some significant shipments that helped us to deliver the results that we did and we’re expecting that to continue through 2013. The growth that we’ve seen in food safety as well as some of our industrial bromides like in water treatment are all showing really good signs of attraction and so all support over that bromine molecules. So, once the economy starts a turn around, we’ll see that flame retardant business pick back up as well. Mike Ritzenthaler – Piper Jaffray: Okay. Thanks – (inaudible)

And you next question comes from the line of Jeff Zekauskas of JPMorgan, please proceed. Jeff Zekauskas – JP Morgan: Hi good morning. You talked about your relatively low utilization rates and brominated flame retardants. I think you talked about them being in 60’s and being a little puffer in the fourth quarter. So does it make sense to postpone the Jordanian capacity coming on, because it doesn’t seem that you need that. And I would imagine that all of the bromine companies expanded capacity and expectation of the mercury removal markets coming along much faster than they did, or than they will. And so how is the industry going to manage the situation that there seems to be much too much capacity for a slow growing volume business?

Hey Jeff, that’s a great question. If you look at the utilization rates for our brominated flame retardants, you remember we have delayed not just the start up but the commencement of the expansion of our tetrabrom expansion in Jordan. So we’re not bringing that online, we haven’t even started construction of that yet. So, we have postponed that tetrabrom expansion. If you look at Bromine and you look at Clear Completion Fluids as it’s growing, those capacity rates for clear completion fluids are getting tighter, and so we needed some additional clear completion fluids capacity, we got that, it’s coming online and it will be able to service the customers. With respect to bromine it didn’t make any sense to expand clear completions without expanding the bromine at the same time in Jordan. I’m not aware of other announcements by ICL (inaudible) acquired are now some acquisitions to Salah Russel, so that would be some additional capacity that they would have, but that’s not a new capacity, it’s already out there. But I think that what we’re going to do and I can’t speak for the others is, I have no intention of flooding the market with bromine. We’re going to bring that online as needed to meet the demand. It is not going to be a situation where I feel compelled by any stress to run that at a 100% capacity on day 1 and we will not operate at that way. Jeff Zekauskas – JP Morgan: And then for my second question, can you review what the rate of demand growth has been for the nine months for fluid cracking catalysts versus HPC catalysts. My impression is that FCC has grown much faster and I was wondering if that were the case, why is the demand profile so much stronger in FCC than it is in HPC?

If you’re looking at it from a volume metrics standpoint, okay Jeff, is that your question? Jeff Zekauskas – JP Morgan: Yes, that’s exactly right.

From a volume metric standpoint, that’s the case. And one of the things that we saw in the third quarter in particularly, where FCC volumes were up, we had some customers buying ahead of a potential west coast strike that they were worried about in the third quarter. That strike has since been settled, but they were buying ahead of that. I think our HPC volumes this year will be relatively what they were in 2011, so pretty flat and we’ve made good head winds, good head way in the FCC markets, I think a lot of it is deals with the heavy resid and the cracking up there with the propylene yields that we are able to provide at higher output on the FCC catalysts, then in part some of our competitors have been. So, I think that crude slide is helping us there, it’s kind of in our sweet spot in FCC and HPC has been strong, it just hasn’t grown like FCC has from a volume metric basis.

I would just add too Jeff, that we’re seeing good growth internationally as those refineries are operating in India, Middle East and we’re seeing the benefit of that in FCC. Jeff Zekauskas – JP Morgan: Okay, thank you very much.

In the interest of time, our final question will come from the line of Mike Sison of KeyBanc, please proceed. Mike Sison – KeyBanc: Hey guys, thanks for taking the call. Given the rough start in Polymer Solutions likely to see in the first quarter of ’13 or so in the first half you talked about, weak demand. Is it possible to grow earnings next year?

Oh yes, it is possible to grow earnings next year. Mike Sison – KeyBanc: Okay, and then when you take a look at Fine Chemicals and catalyst you got lined at your Analyst Day that ‘13 could be a year where we see that trajectory to 15 to come to fruition and so if you think about all the things you can control, your management team can control for those two businesses, is it possible that ‘13 will shape up where sort of that trajectory to you 15 goals seem still pretty feasible for those two segments?

Yeah, I do. I think what you’re going to see is, you know remember there was a range and some of that was organic growth and some other was with an (inaudible). So, I am just talking about organic growth right now. And I think you’re going to see that the Fine Chemistry and catalyst are going to be on a trajectory to put it right in that gap where we talked about where we would be. And I think Polymers, the count is going to come back and we are going to see that growth to that business and when it returns, you’re going to see really really strong earnings coming out of that business, just like we had before. So, I’m still remaining confident that we’re going to be in the sweet spot long term for vision 2015 strategy on what we said we’re going to deliver from each of our businesses. Mike Sison – KeyBanc: Great, and last question since I am the last. Your balance sheet is still pretty good and you see other companies (inaudible) obviously take some pretty big risks and go after some nice businesses, any thoughts there? Are there any opportunities for you to generate some pretty good growth and the flow in economy may be acquisition?

Yeah, I think we’re still looking at acquisitions in the market-to-date but we’re going to take the same kind of measured approach that we have, and it fits within an overall strategy and grows out technological base. And it’s one that where it’s not going to loot our earnings and its going to be one that we think we can manage. I’m not going to go do an acquisition just because interest rates are low and we want to do one. We’re going to do an acquisition that makes sense for the strategy for this business to grow up to vision 2015 and beyond. Mike Sison – KeyBanc: Got it, thank you very much.

At this time I would like to turn the call back over to Mr. Lorin Crenshaw for closing remarks.

Sure, now well we just like to thank everyone for their time and attention and encourage you to call with further questions.

Thank you very much, this concludes today’s conference. Thank you for your participation, you may now disconnect. Have a great day.