Good day, ladies and gentlemen, and welcome to the Quarter 4 2013 Albemarle Corporation Earnings Conference Call. My name is Patrick, and I'll be your moderator for today. [Operator Instructions] As a reminder, this conference is being recorded for replay purposes. I would now like to turn the conference over to Mr. Lorin Crenshaw, Director of Investor Relations. Please proceed, sir.

Thank you, Patrick, and welcome, everyone, to Albemarle's Fourth Quarter 2013 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; Scott Tozier, Chief Financial Officer; Matt Juneau, President, Performance Chemicals; and Michael Wilson, President, Catalyst Solutions. 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. Please note that our comments today regarding our financial results exclude all nonoperating or special items, and reconciliations related to any non-GAAP financial measures discussed may be found in our press release or earnings presentation, which are posted on our website. Before turning the call over to Luke, I would like to take this opportunity to ask investors and analysts to mark their calendars for our 2014 Investor Day in Houston, Texas with an investor briefing scheduled for the afternoon of May 15 and an opportunity to visit our refinery catalyst plant and R&D facilities scheduled for the morning of May 16. We look forward to sharing with you the growth drivers and industry outlook for each of our core businesses and showing off our world-class production units and R&D facilities. Further details will be made available in the near future, but please be sure to save the dates of May 15 and 16 on your calendar. With that, I'll turn the call over to Luke.

Thanks, Lorin, and good morning, everyone. I'll begin the call by culminating on the company's results and accomplishments for the year. Scott will review select highlights related to business segment performance and financial results, and I'll end by providing some perspective on our current outlook. At the end of our prepared remarks, Matt and Michael will join Scott and me to address your questions. In 2013, Albemarle generated excellent cash flow, maintained top quartile profitability levels and returned over $660 million to our shareholders via stock repurchases and increased dividends, the highest such annual cash outlay for a single year in our history. Even with that record cash outlay, we ended the year with a strong balance sheet and a net debt-to-EBITDA ratio of approximately 1x. We finished 2013 by delivering fourth quarter net income of $88 million, or $1.08 per share, that resulted in full year earnings of $342 million or $4.06 per share. Net sales for the quarter totaled $692 million and were $2.6 billion for the full year, while EBITDA was $147 million and $576 million for the quarter and year, respectively. Profitability, as measured by EBITDA margin, was 21% for the fourth quarter and 22% for the full year. Scott will discuss our financial results in detail in a moment. However, at a high level, Refinery Catalyst delivered double-digit volume growth over 2013. Lower metals pass-through drove over 70% of the 10% year-over-year catalyst price decline highlighted in the earnings deck accompanying our financial results with the balance being driven by product mix and lower pricing within Performance Catalyst Solutions. Delivering superior end use performance continues to be the only sustainable way to create value in the refinery catalyst industry, and 2013 was no different. Our technologies continue to provide significant performance and financial benefits to…

Thanks, Luke. Before I get into the details, please note that within the presentation we issued with our press release, we added a slide showing the year-over-year change in volumes on a metric ton basis by major product groups on both the quarterly and trailing 12-month basis. I hope that will provide some clarity around demand trends and visibility to longer-term trends rather than quarter-to-quarter variations. Catalysts reported fourth quarter net sales of $306 million, up 4% year-over-year, and segment income of $80 million, up 2%, with segment margins of 26%. Heavy Oil Upgrading, which is primarily comprised of FCC catalysts, experienced double-digit revenue and profit growth year-over-year, driven by new customers and strong order growth for resid upgrading applications. Clean Fuels Technologies, which is mainly comprised of HPC catalysts, delivered year-over-year earnings growth and doubled revenue sequentially, driven largely by strong volumes. There was a concern heading into the quarter and in our December press release about some Refinery Catalyst orders sliding into 2014. But thanks to great execution by the team, we delivered on essentially every order in the quarter. For the full year, Catalysts reported net sales of $1 billion, down 6% year-over-year, and segment income of $246 million, down 16%, resulting in segment margins of 25%. From a revenue perspective, lower metals pass-through offset solid volume growth. FCC enjoyed double-digit volume growth in 2013 despite heavy customer turnarounds during the first half of the year. HPC volumes also were up in the mid-single digits in 2013. Excluding the timing impact of the metal surcharges in Refinery Catalyst, segment income for the segment was down 12% year-over-year. The lower profitability was driven by lower profitability within Performance Catalyst Solutions, driven by increased fixed costs related to new capacity additions, lower sales prices and softer market conditions. Profitability…

Thanks, Scott. Looking at 2014, we expect double-digit segment income growth from Catalyst with Refinery Catalyst expected to be the largest contributor to our company's overall earnings growth for the year. Within Heavy Oil Upgrading, we expect to benefit from continued strong demand globally for FCC catalysts, designed to handle heavy resid-based feedstocks, maximize propylene production and address the metal contaminants found in North America shale oil. We have ample capacity to meet our growth objectives in light of a capital efficient de-bottlenecking project at our Bayport facility that will be completed in the second half of this year, which will increase our FCC capacity there by approximately 15%. FCC is poised for a great 2014. Improved earnings in Clean Fuels Technologies will be driven by solid volumes, better product mix and increased catalyst intensity driven by more stringent fuel specs. Sulfur specs in fuels continue to decline around the world. In 2014, China is planning to decrease the maximum sulfur content in gasoline from 150 parts per million to 50, and in diesel from 350 parts per million to 50. Brazil is also expected to mandate ultra-low sulfur diesel by commercial vehicles within cities this year. Saudi Arabia appears committed to reducing sulfur in gasoline and diesel to 10 parts per million by 2016, down from 500 parts per million for diesel as recently as 2012. Gasoline sulfur levels in the U.S. could decline by more than 60% to 10 parts per million by 2017 if the EPA's most recent proposal is approved. All of these bode well for continued growth in our CFT business. In Performance Catalyst Solutions, we expect top line growth to be offset by a combination of the full year impact of fixed costs associated with the units brought online last year, the full year…

Thanks, Luke. Operator, we're ready to open the lines for Q&A at this time. [Operator Instructions] Please proceed, operator.

[Operator Instructions] And your first question comes from the line of Robert Koort with Goldman Sachs.

This is actually Neal Sangani on for Bob. I was hoping you could discuss maybe a little bit about the cadence of margins in Fine Chemistry. You brought on some new capacity and are absorbing the fixed costs. Is the fourth quarter absorption or the margin decline kind of where you're expecting things to reset absent utilization improvement?

Yes, I'll turn it over to Matt. But I think if you really look, we were at the high teens in 2013 overall, and that I think we could maintain that. I think it's difficult to look at any one quarter because you have moving parts back and forth, but I think the cadence of it for the full year is going to be in that range. Go ahead, Matt.

No, I would say that is right. If you look overall, fourth quarter did have some impact because of slightly lower clear brine volumes. We're seeing this come back in the first quarter. So I think if you look at 2013 on average, it gives a better predictor of 2014 then just the fourth quarter.

Okay. And then in Catalysts, I know you get the question a lot, but maybe you could update us on the latest on your thoughts on FCC market share, given the positive outlook?

Yes, I'll let Michael talk about that. From a share standpoint, though, if you looked in the fourth quarter, there wasn't a whole lot of movement for the year on market share in FCC. We won a few, we lost a few, but overall, is roughly the same. Michael?

Yes. I mean, I think for the year, overall, our share percentage is up 1% to 2%. So not a big movement there.

Your next question comes from the line of P.J. Juvekar with Citi.

This is actually John Hirt sitting in for P.J. Can you talk about where your inventory levels are for brominated flame retardants and non-BFR derivatives and just sort of put that in the context of how that might compare to the previous year?

Yes. I'll let Matt talk the details. But I think that really in the bromine chain, we've done a fairly good job of pushing down our inventory levels there. And Matt can talk more about details.

If you look at brominated flame retardants, actually we brought inventory down on a days basis throughout the year. And we ended the year in what I would characterize as about the appropriate level of inventory for the brominated FR business, so we don't have an inventory overhang. If you look at the non-FR bromine derivatives, similar story, except in the fourth quarter we did get caught just a little bit by the slowdown in clear brines and we'll be adjusting that as the year goes on.

Okay. And then as a follow-on to that, where are your utilization rates today for your bromine assets and then also for the BFRs? And where do you see those going in the first or second quarter?

We're not -- we had to be careful there because, remember, we added some capacity in bromine and in clear brine. So if you look, overall, and Matt, I think this is generally where we are, if you look at bromine rates at -- for 2013, we ended the year roughly at about 68% for bromine and we're going to run a little -- maybe a little bit slower in the first quarter because of what Matt said in clear brine, a little bit stronger in the second quarter, but for the year maybe up 1 point or so but about there for bromine. If you look at all BFRs, for the year, we ran about a little over 50% capacity utilization for -- on all brominated flame retardants and we'll again start off the year a little slower because maintaining that inventory and Matt will talk later, I'm sure, about Chinese New Year. But we'll end the year roughly -- to hit the forecast roughly the same level as we did '13.

That's exactly right. Nothing to add, that's exactly right.

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

This is actually Jermaine Brown sitting in for Dave. Two questions. Within brominated flame retardants, where do you see pricing trends -- where do you foresee pricing trends going forward? And what was the success rate of the price increases late last year? And then what do you expect volume growth to be for BFR in 2014?

Okay. I'll take that one if you look overall at pricing trends, clearly, we've had some price degradation, but that has mostly stabilized at this point. And we are really seeing 2014 as roughly flat with the way we ended 2013 right now. And if you look specifically at what we did in the fourth quarter when we announced the price increase on tetrabrom, we did see some support for that from the major producers of tetrabrom. We didn't see the type of support we'd like to see if you look specifically at the Chinese-type suppliers.

Understood. And for the 2 polyolefin catalyst plants that came on in Korea and Saudi Arabia, what do you expect the impact from the start-up costs to be in 2014?

I think the start-up costs -- we keep calling start-up costs. There are some that are actually start-up costs, but what you're seeing in '13 -- what you saw in '13 and what we're seeing in '14 is the full year impact of the cost that it takes to operate those sites and they're still in qualification runs, so you're not getting the revenue to offset that start-up, if you will. So I just want to be sure -- those start-up costs aren't going away. The costs are going to be there. We need revenue to fill it up, post qualification, to be able to drive that. Why don't I turn it over to Scott or Michael for more detail there.

Yes, I think to quantify the cost that Luke's talking about is probably in the midteens in millions that we'd expect is really in 2 components: it's the additional operating costs that we brought on, plus the fact that we'll be shifting some volumes from production in Pasadena to our joint venture in Saudi Arabia. So that's part of that midteens millions headwinds I'm talking about, in addition to the costs that we've had.

Your next question comes from the line of Vincent Andrews with Morgan Stanley.

This is Ian in for Vincent. In Polymer Solutions, I think some comments were made last year about $160 million or so of costs being taken out of the business since 2009. And I had kind of thought of trough earnings in that business around the $35 million level. So if you'd just talk what's changed since 2009 and I guess since the expectations were kind of laid out in the end of 2012 and the beginning of 2013?

Yes, I'll take that. I mean, largely what's happened is you've seen costs continued to rise that we've had there. Some of it is raw material costs, some of it is depreciation, some of it is costs relative to people because you've got kind of 3% going up every year. You've also got price from 2009 till the day you've seen it go up and then you've seen it come back down. So Matt can add to it, but just a combination of increased prices, but the bigger driver is some price degradation.

That's an accurate statement. We've had some cost creep that we're working on right now. And we have had some price erosion, as we've talked earlier. Again, that price erosion is basically, at this point, stabilized as we enter 2014.

Understood. And for that price erosion, are you guys seeing in the market other competitors that are shutting down, that are not profitable at these levels? Or what is your expectation? Or is it just tied to the volumes that we're seeing in PCs and TVs?

We're not seeing anybody shutting down anything. I mean, I think at the end of the day when you look at bromine, it all comes down to what happens with the Chinese bromine because those guys will run for cash and at the levels -- even today at the levels that everybody is glowing [ph] about, about the profitability. We're still making a very good return on bromine and there's a -- from a cash operating standpoint, there's a lot of cash to be made at these levels. It's an excellent business. We get wonderful leverage on it. And I think people forget sometimes that the value that it creates and the cash it generates at the levels that they are here, we're still talking. If you look at polymers, I guess, the way I would say this, if you look at polymers, we had high teens margins. But not every product across the portfolio has average margins. And if you look at that, your brominated flame retardants are going to be at much higher than that average that you see in polymers and any antioxidants and mineral flame retardants is going to be much lower. So at the end of the day, you're looking at a blended average of that margin. It's still -- there are very good margins to be made in these brominated flame retardants at the prices that we saw in 2013.

Got it. And just one last quick one. On the working capital reduction, how much of the $100 million is attainable in 2014? And what kind of incentives are being put in place to reach that goal?

It's roughly half. And there are incentives tied to management's AIP and long-term incentive to ensure that we're properly incented to drive that working capital out and keep it out.

Your next question comes from the line of Laurence Alexander with Jefferies.

This is actually George D'Angelo on for Laurence today. What is your initial expectation for the HPC mix outlook in 2014?

Michael?

Yes, we're actually anticipating a favorable mix in HPC relative to what we saw in 2013. So that's going to be a contributor to earnings growth in that division.

And on Polymer Solutions, can you guys give any pricing outlook?

We have budgeted pricing roughly flat with the way pricing ended the year. Obviously, we'll be looking for opportunities if demand trends would help us. But right now, we're assuming flat pricing.

Your next question comes from the line of James Sheehan with SunTrust.

Just on the acquisition front, you alluded to some potential for doing acquisitions this year. I'm just wondering if you could provide your insights on to how you're looking at the acquisition market right now. Do you see bolt-on acquisitions focused on technologies or maybe focusing on achieving cost positions? What are your priorities there?

Yes, from a priority standpoint, acquisitions need to be consistent with the strategy that we laid out. So that strategy is strengthen and grow our Catalysts franchise and really seek new applications for bromine. So if you look at it, I can see either an -- any acquisition or any type of bolt-on or collaboration will be something that would either be in the bromine area to drive -- strengthen our current products or drive additional use or to strengthen and grow our Catalysts business. So I think you can look for us to work on projects in those areas.

Okay. And then on Catalysts, what's your outlook for FCC pricing in 2014?

This is Michael. We're actually expecting higher pricing in 2014. We announced a price increase, I think, midyear 2013. We're in the process of implementing that just given contract cycles and customer cycles. It will -- that's going to happen over a couple of year time period. So I would say prices will be modestly higher in FCC 2014.

Your next question comes from the line of Mike Ritzenthaler with Piper Jaffray.

On the pricing weakness called out in PCS, I'm assuming it's mostly concentrated in polymer catalysts. I guess is that a fair assumption? And can you give more detail about why pricing was weak there?

Yes, you're exactly right. The pricing weakness is in the polymer side of the business and it's really related to global overcapacity for organometallics that we sell into that segment. We're in part responsible for that with capacity that we brought on, but others have brought capacity in as well. So that's a very competitive market at the moment.

Luke, does the strategic decision to pursue the Saudi JV to secure those volumes look more favorable now than it did, say, 12 months ago?

I would say that as we get it up and running -- one thing I'd say is that is the best aluminum alkyl facility in the world. It is the most efficient and it should be the low cost once we get it up and running and we expect to do that. So we're going to be strategically able to supply that growing region better. Do I wish that all of -- a lot of that volume wasn't coming out of our Pasadena site? Certainly. But that's the nature of the beast. And I think what you've got to watch is what happens in Europe over the long term, and also when these other ethylene and polyethylene plants come online in the U.S. over the next 5 years, we're going to be in the single best competitive position of all the producers. So we may be a little early, but I still love it from a competitive standpoint.

And just a follow-up, if I could. Trying to reconcile pretty differing world views on the bromine outlook for 2014 that we've heard recently. So I guess, the question is what industry factors could lead to results that are more positive rather than just flat year-over-year? Is it all shouldered by how much price can be captured? Or are there other factors that we should be watching?

I'll let -- as a general rule, and I'm going to turn it over to Matt for a second, if you don't mind. I think as a general, anytime you're looking at anything, it's demand. So what is the demand out there for the products? Are consumers going out? Are they buying in the developed world -- where you have flame retardant standards, are they buying the electronics? What kind of electronics are they buying? Are they building houses? Is the construction market moving? Is automotive moving? So there's that whole host of consumer-driven confidence on what's going on with markets to drive more demand that you've got to look to. And then we've got to be competitive from a resin system or the products that we're in, in those ultimate end markets. So it's not -- I don't think it's one thing that I can -- that you could point to. But I think overall, we need demand to pick up. And once demand picks up, we have unbelievable leverage for every additional pound of bromine that is produced and where it goes and what it does. And that -- I'm only focusing on the electronics. But Matt, you want to talk a little broader about mercury and other...

Yes. Maybe worth adding a little bit on the non-FR side. So obviously, we had a very good year on volume in clear brines in 2013, as Luke alluded to. The trends out there for 2014 are for continued growth in that business. And we feel we are very well positioned when you look at where our assets are, having the assets in the Middle East and the assets here in the U.S. or the Gulf of Mexico, which are still the 2 key regions for clear brine demand. So our outlook for that business is for growth. Luke alluded to mercury as well. Mercury -- total demand for mercury control is growing and it will continue to grow as we get into 2015 when the EPA mandates come into play. So that's going to also drive, I think, additional consumption of bromine. Anything that drives additional tightening of the overall bromine supply demand chain is ultimately good for the industry from a supply/demand point of view, obviously.

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

This is Aleksey Yefremov for Kevin. In one of your slides, you talked about a net debt-to-EBITDA floor of 1.0. I guess the question, should we really consider this a floor such that if you go below that level, you'd be looking to -- for maybe incremental share buybacks? And a related question, are you planning to use additional debt for buybacks in 2014?

Yes. I'll let Scott answer that.

Yes, so we set a target for net debt-to-EBITDA of 1x. So as we get close to that with cash generation, we're evaluating whether or not we need to do additional buybacks or not. Our expectation, as Luke mentioned in the call, was that starting in the first quarter, we're going to do about a $50 million share buyback. That will take about 3 months to do and be completed around the end of April. So started driving toward that, holding that target. So call it a floor or a target, that's really the goal, is to maintain around that 1x net-debt-to-EBITDA. Will we increase debt? Probably not. I think we'd have to reevaluate that target long term for us to be able to drive toward that increase in debt for that situation.

But if we look -- if you fast-forward into the future and you see that we're not going to be able to close a meaningful transaction consistent with our strategy at a price that we think delivers, we can deliver long-term value to our stakeholders and -- because we're generating sufficient cash that we can fund our maintenance capital, the growth capital fairly easily, then you could see a situation where you could go above that 1.0. That's not a magic line. That's not the Mendoza Line in baseball or anything like that. It's just the line that we've done that we think that gives us a lot of flexibility. We can always lever up if we need to, but that gives us the room as we look at acquisitions to go -- to fund our strategy to give us a comfort level that we can have that capability while at the same time delivering real returns to our shareholders.

Great. And just a follow-up on polymers, on BFRs pricing, really. I think Luke, you mentioned that returns and margins in that business are fairly good still. And given that fact, what gives you confidence that there is no further downside to pricing in that business? Are your competitors also enjoying good returns or maybe they're close to cash costs at this point?

Yes, well, first of all, I don't know what my competitors' returns are other than what I read in their public documentation. And a lot of producers in China have no idea what their costs are. I mean, I have a view but I don't know whether it's accurate, just I believe. So I don't know what kind of money they're making. I know from what the figures we have that there's still some room in there. But you also got to look at, at some point, what's happening in the marketplace. And as that volume grows with this mercury emission, whether it's bromine use somewhere else, whether so on, that gets allocated and becomes less and less volume available to fund some of these products that are at low pricing right now. So there's going to be opportunities, I think, for pricing there. I mean, if you look at the pricing, there's still a little ways it could go. I mean, sure, you could -- I lived through 2009, so I could always find a scenario where it could go lower. But that's certainly not our expectations today. And as I think Matt said, we've seen stabilization in the second half of 2013 and don't see any reason -- don't see anything right now on the horizon that would lead us to believe there is precipitous potential for a default further.

And we'll get another view of the market clearly after Chinese New Year. So we're in that stage right now that you're in every year with this business, where you're waiting to see how things are going to play after Chinese New Year. But there's nothing out there now to say that demand is going to hit south on us. We don't predict that of all.

Okay. And then final question, if I may. You mentioned that operating rates in BFRs are at around 50% and will perhaps remain there for a while. Is there an opportunity to cut fixed costs given this view?

Well, it will be tough to cut too many fixed costs out. We're always looking at a way to do so. There is some leverage that we pulled back in 2009 that we haven't pulled yet because, quite frankly, we haven't had to do so. There's still cost levers that we can pull. We're all working on continuous cost improvements. And I think there's opportunities there should the situation warrant it.

Your next question comes from the line of Mike Sison with KeyBanc.

Welcome back to these calls, Michael, so I figured I'd start with you. In terms of your new segment here, maybe give us a perspective of how you're going to manage the Catalysts business maybe differently from the past, and any thoughts on how you can accelerate filling up that capacity expansions that were made over the last year there?

Sure, Mike. And first of all, I'm glad you didn't ask me about [indiscernible] pricing. These are really performance businesses. And we sell based upon that performance in solving customer problems. And the comment that I made to our leadership team in the last week was we may ship products that we really create value by solving customer problems. So we're going to manage this as a specialty business. Our objective is to accelerate growth in Catalysts and I think we've got the platform and the technology to do that. Technology leadership is going to be very critical to us going forward. It's key to our long-term success. On the Performance Chemicals side, the PCS side, where we've got some overcapacity situation, we're working very hard to build the volumes to fill out that capacity. I think you've got a market segment overall and polyolefins is probably growing today at 5% per year. As Luke pointed out, that could get accelerated as some new projects come on in the U.S. because of the advent of the shale gas. But In addition, participation in the electronics segment of that, specifically LED segment, we're looking at double-digit growth rates. So yes, we do have excess capacity today, but I think we'll fill that out over time and the returns and the economics of that business will improve sequentially as we do that.

Okay, great. And then one's for you, Luke. You guys do have a cost savings, meaningful cost savings program, being implemented here. Can you update us on what the total potential cost savings are? I know you want to redeploy a good amount of that to organic growth. But if you need some help to generate some earnings growth this year, could you use some of that to get to where you want to this year?

Yes. I mean, Scott, on a full year basis, it's roughly $30 million, right? It's roughly $30 million that we're freeing up to redeploy, but there's a lot of timing issues on that, Mike, about when people leave and when new people come in. So I really -- I caution you, guys. I'm going to redeploy that money. I'm going to redeploy it in the R&D, into business development and growth so that we can kick -- we've got to maintain our competitive advantage in the Catalysts business. I could listen to the competitors calls. You know that their technology that they're working on is aimed right at our sweet spot. We've got to find new uses for bromine and accelerate it. We will continuously in this demand questions that we're getting on all these calls and rightly so about what the demand is. So we've got to deploy those resources, and I'm not taking it to the bottom line.

Got it. So your outlook for this year for the segments do not include the cost -- any cost savings?

They do not. And Mike, your model should not include it either or you will be hot.

The next question comes from the line of Steve Schwartz with First Analysis.

You mentioned that you had fulfilled all your catalyst orders in the fourth quarter. So I'm wondering what does the run rate through 2014 look like for FCC and HPC?

When you say run rate, you mean sales volume or do you mean production?

The shipment trend because it can be volatile, right, from quarter-to-quarter? So I'm wondering, if at this point, you're seeing any significantly up or significantly down quarters?

Go ahead, Michael.

Yes, this is Michael Wilson. I think as you look at sort of the calendarization of our outlook, it's going to strengthen from the first quarter as we go into the second and third quarters. So the first quarter sequentially will be down a bit from the fourth quarter. We had a very strong fourth quarter, but still good in the first quarter and then we'll see it strengthen then as we go into the second and third quarters. So I think typically people would tell you that, at least on the FCC side, the first and fourth quarters typically are weaker quarters. That hasn't necessarily been the case over the last couple of years, but it is a general trend.

Okay. And so -- and that trend does apply consistently between HPC and FCC?

I think as you look at the breakdown between those and you think about the first quarter, FCC will be stronger in the first quarter than CFT just because of the quarter that we had in the fourth quarter in CFT. But if you look at Refinery Catalyst overall, we're just going to see a strengthening as we go forward.

Okay, sounds good. And then, if I could, as my follow-up. I think in your prepared remarks, Luke, you said 2 to 3 years for high utilization on these new facilities. At what point do you think you get to a utilization rate where they are no longer a headwind?

Well, I hope that end of this year, on a run rate basis, we'll be there. Steve, one other thing is I just want, in terms of priority, people ask -- what Michael's talking about the earnings and where it would shape for the year, that's really -- that's about Catalysts, not about the whole company. I just want to caution everybody about that. I think if you look at our 2014, the first quarter probably similar to the first quarter of 2013. And then we're going to make probably 55% to 60% of our earnings for the year in the second and third quarter and then see the fourth quarter be kind of similar to the first. So you're going to see kind of a hill for the year, if that makes sense, not a huge hill, but a little bit of a slug. It's going to be, first, similar to the first of last year; second, strong; our third, the strongest; and then fourth kind of back a little bit like the first quarter whenever you look at our full year from an earnings standpoint.

So from a contribution standpoint, 20%, 30%, 30%, 20%?

Not quite. I wouldn't put -- the third will be stronger than the second. So it's going to be -- the third will be stronger.

20%, 25%, 35%, got you.

Ladies and gentlemen, this concludes the question-and-answer session. I would now like to turn the call back over to Mr. Lorin Crenshaw for any closing remarks.

Well, thanks, everyone, for your attention and for joining us. And as usual, we're available to answer more questions throughout the day and the coming weeks. Thank you.

Ladies and gentlemen, that concludes today's conference. Thank you for your participation. You may now disconnect. Have a great day.