Good day, ladies and gentlemen, and welcome to the Q2 2016 Albemarle Corporation Earnings Conference Call. My name is Joyce, and I will be the operator for today. At this time, all participants are in listen-only mode. Later, we will conduct a question-and-answer session. 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, Matt Juneau, Senior Vice President of Investor Relations and Corporate Strategy. Please proceed.

Thank you. Welcome to Albemarle's second quarter 2016 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; Raphael Crawford, President, Bromine Specialties; Silvio Ghyoot, President, Refining Solutions; and John Mitchell, President, Lithium & Advanced Materials. 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 forward-looking statements contained in our press release. That same language applies to this call. Please also note that our comments today regarding our financial results exclude all non-operating, non-recurring and other unusual items. Reconciliations related to any non-GAAP financial measures discussed may be found in our press release or earnings presentation. In addition, with the execution of a definitive agreement to sell the Chemetall Surface Treatment business to BASF, U.S. GAAP requires that we report the business as a discontinued operation. As such, all of our comments today, unless specifically noted, refer to our continuing operations and exclude the impact of Chemetall Surface Treatment. However, given the timing of reporting Surface Treatment as a discontinued operation, we have provided bridges in our earnings deck to better explain the impact of this change. These can be found in pages four, seven and 16 of the deck, which is posted on the website. In addition, page eight and the appendix of the earnings deck provide details of our reported earnings, along with non-GAAP reconciliations related to discontinued operations and other special items in the quarter. With that, I'll turn the call over to Luke.

Thanks, Matt. And good morning, everyone. In the second quarter of 2016, we again delivered outstanding results in our core businesses and made significant progress against our strategic objectives. Adjusted EBITDA grew by 20% in Lithium and by 28% in Refining Solutions compared to the second quarter of 2015. For all of our continuing operations, excluding the year-over-year net impact of the divestitures of the Minerals and Metal Sulfides businesses, adjusted EBITDA grew by $19 million or 11% compared to the second quarter of 2015, and adjusted earnings per share by $0.25 or 37%. Overall, company adjusted EBITDA margins remained strong at 28%, with our three reported segments delivering combined adjusted EBITDA margins of 34%, up from 33% in the second quarter of 2015. The second quarter was also highlighted by the signing of a definitive agreement to divest the Chemetall Surface Treatment business to BASF for $3.2 billion, over 15 times trailing 12-month EBITDA. Combining the expected proceeds from this sale with those already received for the divestiture of Metal Sulfides implies that we purchased the Lithium business at a pre-tax multiple of about 10 times 2014 EBITDA. The closing of this sale, which we expect before the end of 2016, will mark another major step in our transformation into a company focused on our high growth Lithium and Catalyst franchises. Also in the quarter, we became a component of the S&P 500 and received the 2016 Presidential Green Chemistry Challenge Award from the EPA in recognition of the development of the AlkyClean process technology and the AlkyStar catalyst used in conjunction with that technology. This is the world's first solid acid alkylation technology and was successfully commercialized in 2015. AlkyClean is a potential game changing technology, and another demonstration of the innovation we bring to our customers. Our businesses and our employees continue to deliver strong results despite a weak and uncertain macro environment, a testimony to the quality of both our businesses and our people. Now, I'll turn the call over to Scott.

Thanks, Luke, and good morning, everyone. For the second quarter, we reported adjusted earnings per share of $1.09, including Chemetall Surface Treatment, but excluding special items. On a continuing operations basis, we reported adjusted earnings per share of $0.93, an increase of 36% compared to second quarter 2015, excluding the year-over-year net impact of the divested Minerals and Metal Sulfides businesses. The increase was driven by strong core business growth, a lower effective tax rate, and lower corporate and interest costs. Before I turn to other financial metrics, let me remind you again that all of these will be discussed on a continuing operations basis, unless noted. In the second quarter, business mix by country and continued strength in our Jordan Bromine Company joint venture again drove a favorable effective tax rate. As such, we now expect our 2016 effective tax rate, excluding special items, non-operating pension and OPEB items, to be about 19%. D&A for 2016 is now forecasted at $185 million to $200 million, with 2016 capital expenditures, excluding Chemetall, expected to be in roughly the same range. Operating and working capital crept up to about 29% of sales at the end of the second quarter. Very strong sales in Bromine and Lithium in the second half of the quarter drove an increase in accounts receivables and a corresponding increase in working capital. However, we expect to reduce operating working capital to between 27% and 28% by the end of the year. In the first half of the year, our adjusted free cash flow, including contribution from discontinued operations, was $237 million. This number represents cash flow from operations, adding back pension and postretirement contributions, and subtracting capital expenditures, but excludes one-time synergy acquisition and tax related costs. Free cash flow, including those one-time costs, was $163 million…

Hey. Thanks, Scott. Just as in the first quarter, Lithium, Refining Solutions and Bromine Specialties exceeded our high expectations in the second quarter, and helped us to overcome weakness in Fine Chemistry Services and PCS. For the first half of the year, we've exceeded our initial 2016 expectations in all three of these core businesses. In the third quarter, we expect Lithium and Refining Solutions to again show solid growth compared to the third quarter of 2015. While our full-year outlook for Bromine has improved due to the strong first half performance, we do expect to see both sequential and year-over-year weakness in both the third and fourth quarters of 2016. Strong first half clear brine fluid demand outside the U.S. is not expected to continue, and certain large volume flame retardant sales in the first half are unlikely to be repeated in the second half of the year. Finally, the issues that Scott noted in Fine Chemistry Services and PCS lead to an adjusted EBITDA headwinds of about $15 million compared to our guidance in the first quarter earnings call. Even with those headwinds, the overall balance for the year continues to improve, and we are increasing our guidance for the year. On a continuing operations basis, our updated full-year 2016 net sales expectations are now $2.5 billion to $2.8 billion. Adjusted EBITDA is expected to range between $705 million and $750 million, and adjusted EPS to between $3.35 and $3.60 per share, driven by the increase in our adjusted EBITDA forecast and the impact of a lower effective tax rate. As a reminder, given the changes to guidance resulting from the move of Chemetall Surface Treatment to discontinued operations, we've provided a bridge to prior guidance on page 16 of the earnings deck posted to our website. Albemarle's…

Operator, we are ready to open the lines for Q&A. But before you do so, I would remind everyone to please limit your questions to two per person at one time so that everyone has a chance to ask questions. Then, feel free to get back in the queue for follow-ons if time allows. Please proceed.

The first question comes from the line of Bob Koort with Goldman Sachs. Please proceed. Ryan Berney - Goldman Sachs & Co.: Good morning, this is Ryan Berney on for Bob.

Hey, Ryan. Ryan Berney - Goldman Sachs & Co.: Hey. Taking into the Lithium margins, can you help me understand the puts and takes on the margin change in Lithium from the first quarter to the second quarter? And could the cadence of the potash sales have any impact there?

Yeah. Hi, Ryan, John Mitchell here. Yeah. So, in the first quarter, as we said, we benefited, number one, from mainly brine to lithium salt sales, which was driving a much higher one-time benefit in margins. As we see in quarter two, and we expect going forward in quarter three and quarter four, we have some margin dilution as a result of the tolling as tolling volumes ramp up. We also have some impact on the potash pricing headwind. And also, as we ramp up our capabilities from a manufacturing perspective on the new plant in Chile, we have some added costs there. So, those are the main items that are impacting. But as we mentioned in the quarter one call, I mean, we – our margins are where we expect them to be, around that 40% base. Ryan Berney - Goldman Sachs & Co.: Great, thanks. And then maybe as a follow-up, could you update us on kind of your spending priorities for the cash proceeds from the Chemetall sale?

Yeah. I'll take that one. As I said in my prepared comments, we're going to do exactly what we said since we acquired Rockwood in 2015. First, we're going to deleverage. You can look to us to go to somewhere approximately 2.5 times gross debt to EBITDA. We'll then have cash on the balance sheet that allow us to accelerate growth opportunities in our core business, and you can expect to see that focus on Lithium with some opportunities we have out there to accelerate our strategy. And third, we'll return some cash to shareholders through increased dividends and some stock repurchases. Ryan Berney - Goldman Sachs & Co.: Thank you very much.

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

Thank you, good morning.

Hey, David.

Hey, David.

Luke and John, on lithium pricing in the back half of the year, Orocobre has been talking about $14,000 to $15,000 a ton for lithium carbonate. Are those prices anything that you could realize in the back half or even for 2017?

Yeah. Hi, David. It's John here. As we've said, our approach to pricing in the market, I mean, number one, we want to make sure that we are supporting our customer base in terms of reliable supply of lithium salts, and we're focused on the long-term development of the market and long-term supply agreements. We're making great headway on the long-term supply agreements, where more than 60% of our customer base is under that. We do have pricing flexibility there. But we're not going to comment on other peoples' prices at this point in time, but the environment is favorable; the market is in balance at this point in time.

Understood. And, John, any update on the MOU with the Chilean government?

Yeah. So, we're very close. We continue to have great conservations with the Chilean government. We expect the definitive agreement to be signed shortly. And we continue – we've already initiated engineering work on kind of the Phase 3 build-out in La Negra, so everything is moving along nicely there, and hopefully, we'll have some good things to announce shortly.

Yeah.

David, this is Luke. The thing I'd add to that, I – remember, this was really the first agreement after the Lithium Commission. And so, we're working through making sure all the I's are dotted and T's crossed down there in Chile, and I fully expect that agreement to be signed, and we are proceeding with the development of that plan for the expansion confidently and are moving forward assuming that's going to get signed in short order, and I believe it will.

Very good. Thank you.

Thanks, man.

The next question comes from the line of Vincent Andrews with Morgan Stanley. Please proceed. Vincent Stephen Andrews - Morgan Stanley & Co. LLC: Thanks, and good morning, everyone. Could you talk – sorry, could you talk a bit about what you're seeing in terms of electronics demand, I guess both for Lithium and for Bromine, and how you see that progressing over the next couple of years? So, how is it doing now and what's happening going forward?

Okay. I'm going to let John take it first around Lithium, and then we'll have Raphael talk a little bit about Bromine second, if that's okay, Vincent? Vincent Stephen Andrews - Morgan Stanley & Co. LLC: Yeah, sure.

Okay. Hi, Vincent. It's John. With regard to Lithium, when we look at energy storage, we look at the market in three categories: consumer devices, transportation and grid storage. So, on the consumer device side, that includes not just the computers, tablets, cellphones, but it includes power tools and other wearable devices. And we're still holding to our model of about 8% to 10% annual growth in that segment. Vincent Stephen Andrews - Morgan Stanley & Co. LLC: And is that what you're seeing this year?

Yeah. That's – I mean, we continue to see that kind of growth in that segment. Vincent Stephen Andrews - Morgan Stanley & Co. LLC: And Bromine?

Yeah. So, Vincent, this is Raphael. For the Bromine business, our FR business, our Flame Retardant business goes into various electronic applications. Overall confidence in that market from a market perspective is increasing. So, the various indices which track confidence in the connector industry, as well as overall electronics, are going up. So, the industry is feeling more confident and the outlook year-over-year, as well as sequential, it looks better. That's also reflected, to some extent, in our business, we've had a strong first half in flame retardants into those markets, and we expect over the next year and in the outlook that to be stable to slightly increasing. Vincent Stephen Andrews - Morgan Stanley & Co. LLC: Okay. And, look, if I could just ask you, with Bromine appears to be stabilizing, you've got the Chemetall sales, so you're going to delever, what would the pros and cons be of keeping Bromine at this point or finding another home for it one way or the other?

Yeah. I think if you look at Bromine, I do believe that business this year has a fighting chance to be down just a few percentages point from last year. So, improved much over the first half, is going to generate – excuse me, when I said over the first half, I meant improved over 2015, our early expectations. Also, it's going to generate significant cash that we'll be able to harvest to apply to the Lithium growth opportunities. So, to me, it's still a question of how do we best drop shareholder value, and at least as we look at it today, harvesting that cash to allow us to accelerate the growth opportunities that we see in our Lithium organic growth and potential opportunities in Catalyst today. But that always changes, we'll continue to look at it just as we looked at the Chemetall business. And if – and we're going to do what is the – creates the highest value for our shareholders over the long term. But right now, I think that is keep Bromine, continue to watch the great performance that we've seen this year, and harvest that cash. Vincent Stephen Andrews - Morgan Stanley & Co. LLC: Okay. Thanks very much. Have a nice day.

The next question comes from the line of Jim Sheehan with SunTrust Robinson Humphrey. Please proceed.

Good morning. Could you comment on the lithium supply demand environment in 2017, the impact of new capacity that you see possibly having on lithium carbonate prices next year?

Hi, Jim. This is John. With regard to the supply demand, again, as I said on multiple calls, when we look at the mid-term, we see the market imbalance. There certainly will be periods of time where new capacity kind of comes on and slugs. For 2017, we see a few resources in Australia coming online to support the growth, as well as continued ramp-up of Orocobre in Argentina, as well as our own capacity ramping up. So we see 2017, again, being in balance.

And I think fair to say, John, not a significant impact. We don't see demand – the supply coming on that's going to have a significant impact at all on our ability to price for the value in lithium carbonate.

No. That's right.

Great. And on FCC pricing, could you just comment on the trends you're seeing there and what you expect in the second half?

Yes. This is Silvio. Like we told earlier in the year, we initiated a process for the – for increasing our prices. We've been cleared from the get-go that it's a long haul exercise. We feel positive about what we're seeing after first couple of months, we have a couple of first successes, and we will pursue the efforts and will stay on track as we announced before.

Thank you.

The next question comes from the line of Aleksey Yefremov with Nomura Securities. Please proceed.

Good morning, thank you. A follow-up question on the use of proceeds. Will you rule out any sizable acquisitions? And does your comment about investments in sort of battery-grade lithium also could potentially involve acquisitions or mostly organic investments?

It's always a possibility for an acquisition. And if we see opportunities for acquisition, it would be in the lithium space immediately, but that would be a fulfillment of or an acceleration of the strategy that we've already stated, Aleksey, I'm sorry.

Thank you. And as a follow-up on repurchases, any thoughts on the timing or how quickly can you get to that? And then is that decision dependent on your sort of potential acquisitions as well?

Yeah. I think that we've got to close it. So, it's one thing we got to get the deal closed first. We expect that to happen by the end of the year. We also have to be able to get the cash back to the U.S. in an efficient manner so that we pay down debt and then have that cash on hand to do it. So I wouldn't expect any repurchases, any at all, in 2016. I would expect that would roll over into 2017, and we're going to look at what the environment is and what the opportunities are to use that cash at that time, and that'll determine how much goes into what bucket, Aleksey, is the best way for me to describe it. But we are making the analysis to ensure that we're driving shareholder value to the greatest extent that we can.

Great. And final question, if I may, on Lithium EBITDA. What is the outlook for the second half versus the first half run rate sort of about – the good one for second half as well?

John.

Yeah. I think as we've stated, our expectations on EBITDA for the Lithium business in that 40% range. And so, that's what we expect going forward for the second half.

Thank you very much.

The next question comes from the line of P.J. Juvekar with Citigroup. Please proceed.

Yes. Hi, good morning. So, I think...

Hey.

Hi. As you get the cash in, you'd look into making acquisitions on Lithium. Would you look at acquiring more reserves you've got in brine or rock? And then, on your Kings Mountain, North Carolina asset, you haven't run that asset in a while. What kind of investment would you need to get that in operations?

Yeah. That's a couple of questions. What I said is I would consider acquisitions, P.J. So, let's be clear what we're saying, okay? We would look from a standpoint of anything that would accelerate our already stated goals. Those goals are to capture 50% of the growth in the lithium market over the next five years to 10 years. So, you can look at – that will require additional resources that we will need to bring online, to be exploring in the 2022 kind of timeframe. We'll have to find those assets, acquire them, and we've got teams around the world looking at them and talking with people about options, because not only do we need to satisfy the demand of the day, but we've got to decide – meet them into the next decade, and that will require additional resources, as we've stated. So, we will look at that. We – as a part of that, you can expect us to look for high-quality rock reserves, as well as high-quality brine reserves. We have today, the low cost position in brine, the low cost position in rock. We have geographic diversity. We've got a diversity of our portfolio of our end products, and we believe that gives us a tremendous competitive advantage, and you will see us take steps to enhance that advantage that we believe we already have. With regard to Kings Mountain, that is the original, I believe, rock mine in North America, still best of everything that I've seen today. The data would show it's probably the second or third most concentrated rock reserve in the world. And we are in the process of analyzing the cost to bring that back online if it was necessitated. But what it would be, would be a simple mathematical equation for us, what's the cost of bringing it online versus what our other options are around the world, and does it give us a competitive advantage or not. And we will pick the one that is the highest. So, I don't have an answer to your second question, and it would just – it would be premature for me to throw a number out there, P.J. I'm sorry, I just don't have that number, but we're working on it.

No. That's great, and thank you for that. And just secondly on your Refining, you saw a nice improvement in EBITDA. How much of that was coming from sort of benefit from spring turnaround versus how much of that is from a cyclical recovery with strong gasoline market, et cetera? Thank you.

P.J., I'm not sure I understood the question. I think you asked of the EBITDA growth year-over-year, how much of that was refinery turnarounds for hydro treating, and how much of it was the gasoline demand in FCC catalyst. Was that right?

Yeah. That's right, Luke, thank you.

Hey, P.J. This is Silvio. Both businesses contributed well to that growth because on the FCC, you may recall that year-over-year, last year, we went through a period with a lot of trials, so the volumes were somewhat better this year, together with the strong gasoline demand for the first half. And on the CFT side, as reported earlier, we're expecting 2016 to be better than 2015 as we do not see that same hesitance. And with Refining, we did notice over last year, that is being confirmed, we see more change-outs. We see a better product mix and saw also the CFT contributed to that EBITDA growth.

If you look year-over-year, I think it's safe to say we had better performance in CFT year-over-year. FCC was solid, but – and had a nice movement, but the real growth was in CFT year-over-year.

Thank you.

The next question comes from the line of Josh Spector with UBS. Please proceed.

Hey, guys. How are you doing?

Hey.

Just a follow-up on the Refining side. So, specifically on HPC, I know you had sales strong in the quarter, I know you just talked about it. Just curious, was it getting to the point where customers needed to change out and that drove demand or are you seeing some additional demand as crude was higher in the quarter? What would be the main driver, in your opinion, sequentially?

Okay. Well, let me put it correct. Last year was the exception that we saw all kinds of measures taken because of the economic climate at that time and the oil pricing. Over this year, things came back to what we call normal, we saw regular change-out, we saw the use of fresh catalysts versus regenerated catalysts. So, I dare to say that we are getting back to normal operations and see the regular change-out. Comes to see now what the recent trends in the oil will do, but I may confirm that the first half of the year was back to normal business.

Okay. And just on margins as a whole, I mean, I think if I look historically, margins have been more in the higher 20% range. Now, you're on a couple of quarters of above 30%. Is that just mix and as HPC comes back in, that might go down, or is this kind of a new fundamental basis to look as we go forward?

No, I would dare to say that it has to do, on one hand, with the quality of the mix, both the fills and the products that go in there, as well as the use of fresh catalysts versus reused catalysts, that's one element. On the other hand, as we reported, we have some variable cost and – some favorable variable costs in the beginning of this year, first half year.

I think the thing that you've got to remember in HPC catalyst particularly, and you focused on HPC, is it's – what is that mix going to be? So, if you look, we make fine margins on our FCC catalysts as well, but we get – if we get a use of a really tough, a complex crude, just hard to get the sulfur out, and the amount of hydrogen can have an impact on it. And if we need our specialty hydrotreating catalysts, we can make better margins on that on the mix. So, the HPC mix, that we have more than anything else, can impact those margins. So, I think it's going to, from quarter-to-quarter, fluctuate. I think over time, over a long period of time, you're going to see high 20%, 30% kind of margins, is what I would out – somewhere between 25% and 32% kind of margins is where it's going to fluctuate. That's what it has and I think that's what you will continue to see.

Okay. Thanks, guys.

You bet.

Your next question comes from the line of Dmitry Silversteyn with Longbow Research. Please proceed.

Yes, a couple of questions, if I may. On the first question on the Bromine side of the business, pricing, I understand, is holding both year-over-year increases and sequential in elemental bromine and some of the derivatives outside of drilling fluids, is that still correct?

Dmitry, this is Raphael. That is still correct. So we have – we were fortunate to have a tailwind with China pricing that helped, as well as some of the mix of our business in the first half of the year. So, we are seeing flat to slightly improving pricing in our business.

Okay. And then if you exclude the share gains that you've got in the Middle East, what's your feel for the overall drilling fluid demand in the global market, both in the second quarter and then looking forward to the balance of the year?

Dmitry, we see overall demand being down. As you've noted correctly, and I'm very proud of our Bromine team, in the first half of the year, we did secure some share in the Middle East, as well as secured business with existing customers. So that was very favorable. And while those customers continued to order into the second half of the year, it is not at the rate that we saw in the first half of the year. So we would say that overall, demand is down, it's down most significantly for us, as well as for the industry in the Gulf of Mexico, but down overall. So it has a bit of a tail going into the second half of the year and perhaps the start of 2017.

Hey, Dmitry. This is Luke. Remember, when we talk about drilling fluids, we're really focused on deepwater drilling. So, it's really, that's our main focus, is deepwater. We don't – we're not much onshore or not much in frac-ing. So, it's really, you got to focus it on deepwater. And I think what – there's such a long tail on that. And so I'm – I think we're going to see the second half is going to be down, that's included within our guidance, and I think you'll see a weak start to 2017 with respect to our completion fluids.

Got you. And then – excuse me. On lithium pricing, I think you said they were up 2% year-over-year, is that correct, with a 19% volume growth?

It's up 3% overall, and that's on the portfolio overall for lithium. Battery grade material, which drove most of that pricing, was up much higher than that.

Okay. So, your price increase on lithium carbonate, was it specific to the battery grade or was it lithium carbonate broadly speaking? Can you remind us?

This is John. So again, on the technical grade applications, there tends to be, in some cases, a ceiling on price because the value in use, once you go beyond a certain price, sometimes you can substitute out a product, so you have to be careful on the technical grade side. But certainly, on the battery grade side, we've gotten our fair share of price within battery grade. Also, in terms of the way we define our pricing mix, I mean, as the tolling – you have to also remember, as the tolling volume's coming on, we're not necessarily counting that in terms of our pricing that – in terms of the way we've reported out on the pricing percentages.

Okay. I'm just trying to understand of the – I think you went out with like a 15% or 20% price increase that you expect to get over a couple of years. And I'm just trying to understand if that's...

Lisa (41:09).

...if the 3% is the first step of that or is the 3% being masked by things like tolling and some of the other things that you mentioned, and you actually are realizing a much higher price increase. The reason I'm asking is your competitor in Lithium reported yesterday, and I think they talked about getting a 10% price increase in the hydroxide side of the business.

Right. I mean, I think you might be confusing us with someone else in terms of what we announced, but I mean, what we've said on the call is that for the overall Lithium portfolio, not the Lithium & Advanced Materials, but we expect mid single digits overall. And that in the battery side, we have good double-digit price increases on the battery side. So, I mean, we're getting – we're in line with where we think the market needs to be.

Dmitry, we're not in any way getting less aligned on the pricing of – in battery-grade applications. If you look – if you do the math on our battery-grade applications, you can see they're up double digits and it's not 10%; it's well into the double digits. So, it's right in line what you're hearing from the rest of the industry on pricing, and I would expect to be able to see strength in that going forward.

Okay. Thank you, Luke. Thanks for the color.

The next question comes from the line of Laurence Alexander with Jefferies. Please proceed.

Good morning. So, first on the Lithium, the contract extensions, to what extent when – if and when prices roll over, how fast we think of the flow-through to your business, or how sticky should pricing be because of the contracts you have in place?

No. As we've said that – I mean, each of the contracts are going to be negotiated on an individual basis. In terms of when we decide to adjust prices. I mean, I would say those prices could take effect within the quarter. So, I mean, they can be – I mean, it can react pretty quick, but it's – it really depends on when we decide to take action, and again, each agreement is negotiated individually.

And then on the Bromine side, is there anything that can be done as you look at the end market mix to reduce the lumpiness in that business going forward? I mean, any further actions you can take?

Laurence, this is Raphael Crawford. I mean, we continue in the Bromine business not only to make sure we're delivering cash out of the core business, but we do continue to invest in R&D, as well as business development efforts into new markets, whether that be specialty applications or other core uses. We certainly look at that, and that's our best avenue to reducing some of the lumpiness. But this business, it does see headwinds and it sees tailwinds based on various end markets and various geographic considerations. And over the cycle, we continue to focus on cash delivery and making sure that our cash flow delivery is consistent year-over-year to fund the growth in the Catalysts and Lithium businesses.

Thank you.

The next question comes from the line of Mike Sison with KeyBanc. Please proceed.

Hey, guys, nice quarter. Luke, congrats on getting really good value for Chemetall there, and I guess, I get to say new Albemarle again this year, but when you think about the portfolio as you look in – over the next several years, can you maybe just frame up what this portfolio can do in terms of growth, free cash flow, and just maybe give us an update on the long term potential now?

Yeah. I think, it's a – as I look across it, what I would say is that I think Lithium has got – is kind of a double-digit growth for the next – if you look now through the rest of this decade, and as long as we get the additional resources continued. So I see continued strength in Lithium, at least double-digit growth year-over-year for the next four years or five years, and that's about as far as anybody can see, right? So, and that could be accelerated based on energy storage, based on EVs and other items, but I don't see any change coming on that. On Refining Solutions, demand for transportation fuels is going to drive that. And that's usually going to grow somewhere around 2% to 3% to 4%. And I think we'll grow a little bit better than that because of our capabilities in the complex tough to crack crude slate. So, I feel great about our ability to have year-over-year growth there. It will, I think, moderate then from what we've seen this year's. Remember, this year was a bounce back year. I wouldn't expect to see that type of growth well into the future, but I think that the strength of our innovation in catalysts will allow us to continue to grow that low to mid single digits. And dependent upon how our incumbencies are in clean fuels, we could pop above that from quarter-to-quarter. But I think there's still continued growth in that Catalyst business. At Bromine, as I've said before, this year, the Bromine is outperforming my expectations. We said they were going to be down; I still think they're going to be down this year year-over-year, but they've got a fighting chance to get close here to what they did in 2015. That business, we're not counting on it for growth, but if we get a little bit of growth from Bromine over the years, that certainly, the free cash flow generation from that is going to accelerate our ability to drive more of our profits in Lithium. So, I think you'll see that – I don't think the free cash flow will continue very strong. We'll have some capital that we need to invest in Lithium, obviously, but even with that, I expect our maintenance capital, if you will, to probably be around 4% across our base, and you're going to have growth capital in Lithium that will take us up higher than that. So, continuation of the free cash flow story here, and I think good solid growth and growth opportunities between Lithium leading the way, followed by Refining Solutions, and then counting on Bromine to remain flat. It may go up one year a little bit, down one year a little bit, but overall, I feel great about the ability of these portfolios to drive shareholder value.

Great. And a quick follow-up on Heavy Oil Upgrading. Where are your operating rates now and where do you think you'll end the year as you head into 2017?

The operation – this is Silvio. The operation rate is in the 90s% as we said – as we announced before, it's not changed. We have had a strong quarter. The demand for fuel has been – it's very strong, maybe a little pressure on it for the coming months because the industry is dealing with the inventories, but overall, longer-term picture, we believe that the demand for – and the gasoline production will come back and will remain strong into the 2017.

Great. Thank you.

The next question comes from the line of Mike Harrison with Seaport Global Securities. Please proceed.

Hi, good morning.

Hey.

I was wondering if you could give a little bit of color on the Taqueer (49:06) volumes that are going to roll off at some point, maybe the – any insight on the pace and magnitude of how that's going to affect your FCC business?

Yeah. I'll let Silvio to talk about that. Our – we're not going to give what the specific volumes are, Mike, for obvious reasons. But, Silvio, you want to talk a little bit about that and what's built into our guidance?

Okay, well, we have been supplying at different rhythms over the beginning of the year and did supply well into July. For remainder of the year, we do not foresee any additional volumes, and that has been totally built into our guidance for this year.

All right. And then, I was also hoping we could get an update on the operations in La Negra and the expansion there. Could we start to see some additional volumes contributing commercially in the second half or is that more of a 2017 story? And do you continue to view it as coming on maybe 20% of capacity per year for the next few years?

This is John. I mean, we're progressing really well in La Negra in terms of qualifying the product with really, a great portfolio of customers. You should expect to see a contribution really in 2017. And we – as we've said, we're focused on the long-term agreements and we've already started to pre-sell that volume with customers. So, we'll bring on capacity in line with our customers' demand.

All right. Thanks very much.

The next question comes from the line of Ben Kallo with W. Baird. Please proceed. Benjamin Joseph Kallo - Robert W. Baird & Co., Inc. (Broker): Hey, congratulations, Luke, in all the progress over the past year.

Thank you. Benjamin Joseph Kallo - Robert W. Baird & Co., Inc. (Broker): I have two questions. First on the HPC side, could you guys just talk about that? You – Grace (51:13) was out there today talking about the ARC (51:15) JV and seen some harvests there. And then, I want to change subjects with my second question that's about Lithium. And that was a joke, but maybe just tell us, Luke, what you think, some of the parts of the value chain – I know you talked about resource and what you guys have there and potential acquisitions, as well, possibly maybe even going deeper into the battery side of it that are interesting to you. And as you get the capital from the sale of Surface Treatment, that you would be interested in looking in what – either organically or through acquisition? Thanks.

Okay. Silvio, you want to talk about HPC volumes?

Yeah. I think I can put some – shed some light on that one. Year-over-year, the volumes are getting better. Longer haul, there is – the structure fundamentals that more fuels are going to be consumed, that more fuels need to be cleaned up, so there is a structural growth pattern in there. Looking at the different segments, however, we see that there is a shift, that one segment is growing faster than the other. We see a stronger demand in the individual (52:40) area, where more complex oils are being processed. But to answer your question, we have gone through a dip last year with a lot of uncertainty at the refiner side. We are still cautious, but we still – we see that coming back this year that, like I said before, we're getting back to the normal patterns. And for the longer haul, we expect the HPC volume to grow because you just need to process more oil going forward.

Thanks, Silvio. And if I look at – your question really was about what parts of the value chain with – will we look at in the batteries. And we really like where we are today. What we're good at is resources, taking those resources, converting them into quality lithium carbonate, lithium hydroxide and other byproducts from lithium that drives higher value. So, as I look at that, we're going to stay true to who we are, Ben. I don't think you can expect to see us buying a cathode company or anything like that. What we want to focus on is driving value, which is an acceleration of our strategy, to be able to gain faster growth in lithium carbonate, lithium hydroxide in the catalyst space. So, that's what you'll see us doing. We'll be consistent with who we are. Benjamin Joseph Kallo - Robert W. Baird & Co., Inc. (Broker): Thank you, Luke.

The next question comes from the line of David Wang with Morningstar. Please proceed.

Morning, everybody. Thank for taking my question.

Yeah.

I guess my first one's on Bromine. I guess you're interested in managing this business mostly for cash flow generation. I guess, going forward, do you see it mostly as volumes and pricing driving the cash flows of the segment or is there much room left, legroom on the cost side such that you can still improve EBITDA for that segment, even if pricing doesn't necessarily go your way or we don't see much of a rebound in volumes?

Yeah. David, this is Raphael Crawford. I think we see both sides of this. We certainly see a great leverage effect on volume and the drop through to the bottom line. So, we do take efforts on securing additional business when we can, for example, the China opportunity this year with the favorable pricing in China was something that we jumped on in order to pick up some additional volume. And pricing, as we go forward, that's always a lever. There is still room on the cost side. That's something that we continually look at. We saw some cost improvement particularly in raw materials, for example, from favorable buying in the first half of the year. So we look at that continually. And as I said before, we look at all the levers we can pull to continue to deliver consistent or growing year-over-year cash flow into Albemarle. And that includes cost, capital, as well as on the sales side.

Right. Thanks, Raphael. And then, I guess, my second question is on Lithium. You mentioned that going forward, you would be considering acquisitions. And I was wondering how this would be prioritized relative to your other opportunities. For instance, is there – would you look to expand the Chilean operation even more so than you've already laid out before you would look at an acquisition, or would you look at the spodumene and hydroxide before the acquisition? I was wondering the priorities of these – the options or the other ones that you're considering.

Yeah, our priorities are going to be right. You should look at them as we look at brine versus rock versus conversion. You ought to look at it on ways that will lead and will accelerate our strategy, and deliver a higher shareholder value, and that's what we would look at as opposed to focusing in any one geographic area or any one particular asset. It's going to be – if we find one, if it makes sense, if we can get the right type of accretion, it would all be related to driving an already articulated strategy.

Okay. So – and just to clarify on that, so would you prefer to – I guess I'm just wondering why you would be looking an acquisition when it seems to me like you could continue to expand the Chilean operation.

Well, I mean, what we'll do is – what I said we'd do is we'd have cash on the balance sheet to allow to accelerate our strategy. So, accelerating the strategy could be we develop more assets in Chile as well. So, you're reading too much into it, what – that I'm going to do one or the other. What we're going to do is we'd laid out a strategy, we're going to maximize the resources that we have today as rapidly as we can to meet the market demand. And then, if an acquisition allows us to accelerate that, we'll do it. But it's going to be – if you look at our Chile operations today with the MOU, we've already got a plan to build out the derivative capacity to use up 100% of that resource over time. We'll accelerate that. And we're in the process of accelerating that today. And if there are opportunities in Chile where certainly, we're down there, we know those resources, then we'll certainly continue to look to pursue those. There are other – in other areas of the world, there could also be some opportunities that we would pursue from a resource standpoint, as well as from an asset that may accelerate or strengthen our position in that area of the world, and that's what we're going to do. So, we're looking at ways to accelerate our strategy and strengthen our overall global leadership position. So, it's not going to be anything that comes out of left field. It's going to be, if we do anything, it's going to be very consistent with the strategy that we've articulated since we bought Rockwood in 2015.

All right. Thank you for the color, Luke.

Okay, man.

There are no further questions in queue at this time. I will now like to turn the call back over to Luke Kissam. Please proceed.

Thank you very much. We'd like to thank everybody for taking time to be on our call today, and we look forward to continuing our performance in 2016 and the acceleration of our strategy into 2017. Thanks a lot. Bye-bye.

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