Good day, ladies and gentlemen, and welcome to the Third Quarter 2012 Huntsman Corporation Earnings Conference Call. My name is Tony, and I'll be your coordinator for today. [Operator Instructions] As a reminder, this conference is being recorded for replay purposes. I would now like to turn the presentation over to your host for today's call, Mr. Kurt Ogden, Vice President of Investor Relations. Please proceed.

Thank you, Tony, and good morning, everyone. Joining us on the call today are Jon Huntsman, our Founder and Executive Chairman; Peter Huntsman, President and CEO; and Kimo Esplin, Executive Vice President and CFO. This morning, before the market opened, we released our earnings for the third quarter 2012 via press release and posted it on our website, huntsman.com. We also posted a set of slides on our website, which we intend to use on the call this morning in the discussion of our results. During this call, we may make statements about our projections or expectations for the future. All such statements are forward-looking statements and while they reflect our current expectations, they involve risks and uncertainties and are not guarantees of future performance. You should review our filings with the Securities and Exchange Commission for more information regarding the factors that could cause actual results to differ materially from these projections or expectations. We do not plan on publicly updating or revising any forward-looking statements during the quarter. In addition, we also refer to non-GAAP financial measures such as EBITDA, adjusted EBITDA and adjusted net income or loss. You can find reconciliations to the most directly comparable GAAP financial measures in our earnings release, which has been posted on our website at huntsman.com. Let's turn to some highlights on Slide #2. In our earnings release this morning, we reported third quarter 2012 revenue of $2,741,000,000, adjusted EBITDA of $401 million and adjusted earnings per share of $0.70 per diluted share. Our third quarter 2012 adjusted EBITDA was a quarterly record of $401 million compared to $346 million in the prior year and $365 million in the prior quarter. I will now turn the call over to Peter Huntsman, our President and CEO.

Thank you very much, Kurt. And I'd like to extend a special welcome to everybody this morning, particularly I'd like to just acknowledge those people who are joining us in those areas -- I know many of you are from the East Coast and those people that have been adversely affected by the recent Hurricane Sandy that came through. And I want you to know that our thoughts and our prayers are with you, and we hope that you continue to make -- well, seeing gradual but an eventual recovery from all these. Let's turn to Slide #3. Adjusted EBITDA for our Polyurethanes business in the third quarter of 2012 was $239 million, an improvement of $99 million compared to the $140 million in the prior year, and an improvement of $69 million compared to the prior quarter. We have seen continued momentum in earnings improvements from our MDI products throughout the year. We successfully raised our MDI selling prices in the quarter, which more than offset the increase of raw materials cost we experienced. Led by improvements in our Asia Pacific region, our average selling price for the division increased 5% compared to the prior year and 4% compared to the prior quarter in local currency terms. The cost of our largest raw material benzene continues its trend upward and will continue to be a headwind. However, if utilization rates tighten, we expect margins to continue to expand. Compared to the prior year, sales volumes for our MDI products increased 5%. Our largest market within Europe, installation, adhesives, coatings, elastomers and composite wood products, all grew at double-digit rates. In North America, we are seeing positive indications that a housing recovery is underway as we saw attractive demand for our composite wood products and appliances in the quarter. Additionally,…

Thanks, Peter. Let's turn to Slide 8. In the third quarter of 2012, our adjusted EBITDA increased to $401 million from $346 million in the prior year. The primary reason for this year-over-year increase was an improvement in margins, as raw materials decreased at a faster pace than our average selling prices. Sales volumes decreased, most notably within our Pigments businesses. Compared to the second quarter of this year, our third quarter adjusted EBITDA increased from $365 million to $401 million. The increase was primarily attributable to lower SG&A costs and indirect costs. Keep in mind that the majority of benefits from our restructuring programs won't be realized until 2013. Slide 9. Our year-over-year consolidated sales revenue for the third quarter decreased 8%, primarily as a result of the strengthening of the U.S. dollar against major international currencies, which had a negative 5% impact on the revenues. Our total company average selling price decreased 1%, adjusted for the impact of foreign currencies, while our sales volumes decreased 2% compared to the prior year. Regionally, our sales decreased 15% in each of our North American and European markets, which represent approximately 60% of our revenue. In the Asia Pacific region, sales revenue decreased to more modest 4%; whereas our Rest of World category, which includes the emerging markets such as Central and South America and the Middle East, improved 20%. The Rest of the World category comprises 19% of our revenue in the quarter. Our Polyurethane business is our largest and made up 44% of our total revenue in the third quarter. Its revenue increased 3%. However, I'd like to point out that our urethanes market, which consists of MDI products, increased 5%. The key trend that Peter just mentioned is volumetric demand, which increased 5% for our MDI products compared…

Thank you, Kimo. At the beginning of the year, we told investors that our focus for 2012 would be on the quality as well as the quantity of our earnings. It was our objective to offset the expected decrease in TiO2 earnings with improvements from our other businesses. Our TiO2 earnings have decreased faster than expected. However, all of our other businesses are reporting stronger year-over-year EBITDA performance. I have never had -- we've never had this level of earnings with this broad a balance from different businesses. I believe that this earnings profile should give us a stronger multiple than we've had over the past few years. I am more pleased with the mix of our earnings than I am the aggregate amount. While there remains plenty of global uncertainty, we remain optimistic about the future and see ample reasons for this. Among other things, we will continue to benefit from our customers' applications and geographic footprint. Beginning last year, we took early and aggressive actions to restructure our business and improve our earnings profile. These projects will be completed by the end of 2013 and will yield annual benefits of more than $150 million. We are well-positioned to benefit further as the U.S. and Asian economies recover. Our natural gas consuming manufacturing basis disproportionately located in North America, and utilization rates for most of our products are improving. In the fourth quarter, we expect a normal seasonal decrease in demand. Our fourth quarter EBITDA of $243 million last year was the best in our company's history. Although we expect our fourth quarter Pigments EBITDA this year to be more than $100 million worse compared to 2011, I expect to finish 2012 with an equally strong fourth quarter as last year, capping what should be another record year for earnings. In short, I'm immensely proud of what this team has accomplished for our shareholders this year. With that, I'll turn the time over to Kurt.

Thank you, Peter. Tony, that concludes our prepared remarks. Would you explain the procedure for questions and answers and then open the line for questions?

[Operator Instructions] Your first question comes from the line of P.J. Juvekar of Citigroup.

Just quickly. You talked about shifting raw materials around in your TiO2. Can you talk about how you're shifting between ilmenite and sulfate slag, given the delta between the 2?

Sure. We are spending capital in some of our sulfate slag plants to be able to consume more and more ilmenite in that mix. In some cases, it is smaller, in some cases it's larger. We are also finding that we can blend ilmenite ores with slag in both chloride and sulfate plants. It has the effect of reducing our capacity. But in the slow demand environment, that's not as big an issue. But we are able to, in fact, consume more ilmenite both through major capital expenditure and also by just mixing smaller amounts of ilmenite with other ores that typically are consumed in those plants.

Currently, P.J., we're currently using just about slightly over 50% of our raw materials ilmenite ores, which is costing somewhere between $250 and $300 per ton.

That's helpful. And just sticking to TiO2, can you talk about where are your inventory levels compared to the industry? I think in the past, you have said that your inventories are lower than the industry average. And then do you anticipate sort of margins in the low 20% EBITDA margins going forward?

I'm sorry, I didn't catch the last part of your question about margins?

Sorry. The margins -- do you anticipate EBITDA margins to be around this low 20% range?

Well, on today's inventory, the industry, we believe, is operating today at around 100 days of inventory and we'd probably be -- we are slightly less than that. As we look at the margin, we saw our margins per ton drop by about $350 a ton from the second to the third quarter. I would expect margins from the third quarter to the fourth quarter to drop at about that same amount in the fourth quarter. Now again, similar to the guidance we gave last time, we saw a decrease in demand during that time period as well. But P.J., again, I'm just speaking from what I see in the market and speaking to customers and so forth. I think that when we talk about the diminishment of inventories and so forth, particularly on the customer end, I think that much of that destocking, certainly the vast majority of it, should be complete, I believe, around year end. And as we get in the first quarter of next year, we ought to start seeing a replenishment, a gradual pickup in demand throughout the year and margins returning to a more sustainable rate than we'll see in the fourth quarter.

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

Just a quick follow-up to P.J.'s question on the spread between rutile and ilmenite. Is there something that we can read into the feedstock price stability based on that spread and the effects from a typical chloride plant?

Well, certainly. A chloride plant is consuming rutile, and a chloride slag is going to be a higher-cost plant. It could be as much as $500 a ton higher cost between a chloride-based plant that's consuming slag and rutile and 100% ilmenite plant. So there is certainly a cost advantage to sulfate ilmenite, and chloride ilmenite for that matter.

Sure. And then on the cost -- on the price stability of the ores there, is there anything that we can read into going forward where the ores might go?

Well, we're seeing the higher-cost ores come down. Ilmenite has been fairly flat. It didn't really move that much, but certainly, rutile and synthetic rutile have been coming down.

Just to give you an idea on that, if you look out from the beginning of last year, ilmenite ores have gone from kind of the $150 a ton up to the $250, $300 a ton. When you look at rutiles, again, these are just on average, they've gone from $600 to $700 a ton, up to $2,000 a ton. And so a massive swing in average pricing at that time period.

Yes. I think in fact, earlier this year, we saw rutile prices go to $2,700 a ton and have come back, probably are closer to that $2,000 that Peter mentioned.

Okay, sure. And then on urethanes, if we look at the peak trough estimates that you've put forth in the past and we make a couple of modest assumptions for 4Q based on your commentary going forward, it looks like that business in 2012 may be approaching 80% or 85% of kind of that estimated peak EBITDA. Has that business changed fundamentally enough and has Huntsman's ability to capture margin changes, not that we may need to be thinking about a higher peak?

I certainly think that's possible, right? Remember, when we thought about peak economics, it was just 2005 sort of contribution margin per pound on today's current volumes. I think relative to 2005, propylene oxide, MTBE, is much more profitable. And certainly, we could -- if things got really tight, we could see in fact higher margins than we saw in 2005.

Yes. Let's remember, since 2005, we've invested in the further downstream capacity of system houses. Again, that's the ability to take MDI and further blend it, further formulate it and specialize it, if you will. All of our plants, since 2005, have gone through some element of cost reductions and also manufacturing improvements, productivity improvements, cost improvements. And as you look today, we are selling more variants and more variations of different grades of MDI into the markets and do a wider spread of end-use customers. So yes, I would just say what Kimo said, I think that as we look at with what peak is similar to the last peak, it didn't have a tremendous amount of correlation with the previous peak. As we try to model where we are going, the industry still is operating. In some parts around the world, they are probably a bit below 90%, other parts around the world are probably a bit around 90%. So somewhere in that operating rate, around 90%. Certainly, if you get up in that 95%, 96% where the industry is effectively sold out, I think that you're probably recalibrating and looking at a new sort of a peak. It's certainly a different business over the last decade.

Your next question comes from the line of Frank Mitsch of Wells Fargo Securities.

The this is Sabina Chatterjee in for Frank Mitsch. Just a question on TiO2 again. Peter, you had said earnings deteriorated faster than you had expected in Q3. Can you just speak to which markets or regions performed worse? And was it driven more by volumes or pricing? And then specifically on pricing, we've heard of prices being down in the high single-digit range in North America. How's that been evolving here in Q4?

Well, first of all, let me just clarify when I said that conditions were worse, that was from the start of the year, not -- I didn't mean to say anything in the third quarter. A matter of fact, as we go back a quarter, I think we gave guidance in the third quarter that we'd be down about $350 a ton, and I think our actual numbers were $362. So I think we've given an extremely accurate forecast for the third quarter as to where we thought we'd be. I think that when I go back and when I look at comments that I said at the beginning of the year, we were expecting TiO2 to drop margins, to come down. And I do believe that they have fallen faster, certainly, than I had expected at the beginning of the year. And I probably, at the beginning of the year, was being accused of being overly dour by some of my colleagues in the industry. So -- and when I look at those reasons, again, we're seeing a falloff of economic demand in Europe. I think in 2011, the industry, our customers bought more product than perhaps we had known. And I think when prices were going up as rapidly as they were, I think that our customers, by and large, stockpiled as much inventory as they possibly could. And obviously, TiO2 consumers, particularly in the paint area, tried to get by with as much Chinese sulfate blended into their product and using as little TiO2. And I think a combination of all of those probably exasperated 2012 to be a worse year than otherwise. But conversely, I would just remind you that we also said at that time that our businesses would also pick up the slack across the board. And as I said earlier, all of our divisions were performing better in the third quarter, with the exception of TiO2, than they were a year ago. And I would just say as I did in TiO2, they're performing better than I would've expected, even at the beginning of the year. As we look at the fourth quarter for TiO2, again, I think that we will put the same sort of a forecast in place that we did the last call, since we believe that margins will drop another $350 or so per ton. But I believe that the inventory destocking that is taking place, I believe that it will come to an end around the end of the year. Just again, look at anecdotally and speak with our customers, I believe that the 2013 will be something of a year of a gradual recovery throughout the year, a more stable year than what we've seen this year.

Just to comment on regions and what we're seeing in terms of industry volumes. As Peter mentioned, of course, Europe is the toughest industry. Year-over-year, that was at nearly 30% down volumetrically in terms of demand. And you would expect with Huntsman's portfolio heavily weighted to Europe, we were closer to that 30% down. But all regions were down double-digit. We think that the U.S., North America was probably down about 20%; APAC was down real close, just a little less than 20%. So really, the fifth quarter in a row, we've seen global year-over-year demand rates down. Relative to pricing, I think it's safe to say that probably North America is the highest-priced region in dollar terms, but all of them have been trending the same in terms of prices.

Great. And then just on the Polyurethanes, it sounds like MDI was the driver of really strong results. Can you just speak specifically to the contribution from MTBE, however? You've sized the -- I mean, how do you size the benefit from the competitor outages? And looking forward to Q4, what should we expect in the absence of those outages and getting seasonality?

I think that we said in the first quarter that this company benefited about $50 million or $60 million, and in large part, if not in total, because of outages that we experienced in the first quarter. I would say that the third quarter results were quite similar to the first quarter results, and that the outages probably accounted for about half that much benefit, around $25 million to $30 million of the Q3 benefit that we saw. So a sizable number. But again, the real drivers for MTBE is the price of gasoline and the spread between your raw materials. And I believe that Huntsman is in a very unique position for our raw materials, our North American gas space. And we're selling into a market where the prices are set by gasolines that are valued on largely Brent C pricing. So as we go into the fourth quarter, again, our major raw materials are methanol and butane for MTBE; butane more so than methanol. Butane prices, typically in the fourth quarter, just seasonally every year; because butanes are blended into gasoline, there's a higher demand for them. Butane price typically go up in the fourth quarter. So as we look into the fourth quarter, I would expect the MTBE margins and what we've seen thus far in the fourth quarter to be diminishing. However, I would say that some of that is going to be offset by the propylene oxide side of the business and the MDI side of the business. They can't look at MTBE in a vacuum, it's part of the propylene oxide production. The demand there also greatly benefits that business.

Your next question comes from the line of Laurence Alexander from Jefferies. Laurence Alexander - Jefferies & Company, Inc., Research Division: Two quick questions. First, on the Polyurethanes segment. If you hold the PO/MTBE part of the segment flat, is it fair to say that the mix shift in MDI is enough to drive maybe 100, 200 basis points of additional margin expansion over the next year, 1.5 years?

Well, yes, at least. Sure.

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I think we showed EBITDA margins in 2005 of 22%, 23%, something like that, Laurence. Laurence Alexander - Jefferies & Company, Inc., Research Division: And then looking at TiO2, did I hear correctly on one of the earlier comments that there is actually a scenario where 2013 TiO2 profits could be above 2012? And then particularly if you look at the first half of the year where you have sort of your contracts resetting before the coating season really restarts, what factors can you point to, to prevent the first half of the year from being more similar to 2009 levels?

Well, I think when we look at the performance of 2013, I'd be very surprised if it's better than 2012 from an earnings perspective, just because of the rapid falloffs we've seen in the third and fourth quarter. Again, I see a gradual recovery in a more stable market environment 2013, but I don't think we've represented that it would be a better year than 2012.

I think we said -- Peter's made it clear that fourth quarter, we're going to see contribution margins per ton squeezed, similar to what we saw in the third quarter. And my guess is that the first quarter will look a little bit like the fourth quarter. It would be -- if we see rebounded demand, you could see the second half of 2013 start to look a little bit like the first half of 2012, if we see some recovery. But we think that, that is possible as normalized rates and normalized demand could be in the low 90% range. Laurence Alexander - Jefferies & Company, Inc., Research Division: Then just to clarify, when you say the first half might be a little bit more like the fourth quarter, it's first quarter might be more like the fourth quarter, is that a function of volumes or was that marked as you think pricing will move up to offset the contract resets?

Well, I think you have to think through sort of destocking being completed in Asia and in North America, Europe in the fourth quarter. And then I think that the producers have to destock as well. And it's really going to take the first half of 2013 for inventories to be righted and to start to see utilization rates throughout the industry pick up.

Your next question comes from the line of Edlain Rodriguez of Lazard Capital.

Peter, just one a quick question on Polyurethanes. I mean, how sustainable do you think the price increases in MDI are? I mean, is demand strong enough to allow you to continue to raise prices there?

Well, yes, I think that they are. We have successfully implemented price increases in October. We've gone out this last week with December price increases. Obviously, I'm not in a position to represent how the December price increases will turn out, but we ought to get a very large portion, if not all of it. And I think that those price increases will be more than enough to offset the recent increases we've seen in raw materials and then some. So we -- I believe that the demand is such, it's robust enough that it ought to be able to offset rises in raw material and also make a little bit more.

Okay. And also one quick question geographically, like how much deceleration are you seeing in Europe? Because in the past, you've talked about the difference between Northern Europe and Southern Europe. Is this still holding or are you seeing that sort of deceleration in Northern Europe?

I think that when we look at Northern and Southern Europe, that it's probably fairly similar. I would just -- from what we've said in the past, I would add another dimension of that perhaps and talk about Eastern Europe. When we talk about Eastern Europe, we've seen stronger growth yet taking place, and that would be several hundred thousand new homes that are being re-insulated and to meet new government standards in Turkey. As we look in the Russian markets, with the recent acquisition that we have there, and that's going into the specialty adhesives and coatings and elastomer markets. We have a recent acquisition as well with systems house in Turkey, that we're in the process of integrating, that's doing really quite well. So as we look at Europe, we kind of look at the southern part of Europe, the northern part of Western Europe, then you look at the Eastern markets and in the areas of OSB, the oriented strand board for construction. This is an area that's growing at double-digit. You look at the insulation market growing at double-digit, the footwear industry. The automotive markets were obviously been hit, but not nearly as hard as the overall sector because of the higher-end cars that we sell into. So as we look at year-on-year, our Northern European is up 5%, southern Europe is down about 16% and Eastern Europe would be exceeding that of Northern Europe.

Okay, all right. And just one final question. Going back to Polyurethanes, given the benefit you've had from PO/MTBE in 2012, can you see 2013 being a stronger year than 2012?

No. A lot of that would depend on what you see. Edlain, are you talking about MTBE in 2013?

I'm talking about the whole Polyurethanes market, but yes.

I would say that MTBE probably ought to look like 2012 -- 2013 ought to look like 2012, assuming that the gasoline demand, assuming that crude oil prices and gas prices in North America stay the same. And again, we've kind of led the market to the idea that there's been about anywhere from $80 million to $90 million of benefit to our business because of industry outage. MTBE plants usually run more consistent, better than they have this past year. So I'm not sure that I would book that advantage into next year. As I look at MDI and I look at the amount of capacity that's coming into the market globally, virtually none in North America, virtually none in Western -- or in Europe. And what we see coming on in Asia is the single producer in the next 12 months that will be bringing capacity into the market. From what I understand, as that capacity comes onstream, I don't see any reason why utilization rates should improve through 2013. Utilization rates are obviously causing a tightening in the market and an opportunity for us to raise prices.

The next question comes from the line of Jeff Zekauskas of JPMorgan. Jeffrey J. Zekauskas - JP Morgan Chase & Co, Research Division: In the quarter, you took $51 million or so in restructuring charges. What did you restructure and what will be the cash component of that charge? And of the $150 million in restructuring benefits that you expect to get in the future, how would you allocate that by division?

I would say the $150 million, about 75 -- about 1/2 of that is going to be going into Textile Effects and -- let's see here. About -- yes, about $75 million that's going to Textile Effects, about $70 million, $75 million going into Polyurethanes, and the rest of that should be going into Advanced Materials, a little bit in Pigments.

So almost the entire charge in the third quarter was Polyurethanes. And we saw, at the beginning of the fourth quarter, about 1/3 of the people that we have -- are letting go have left. So we're probably in the fourth quarter as we sit 1/3 of the way through that benefit. That $50 million should almost entirely be sort of cash restructuring, largely severance. Jeffrey J. Zekauskas - JP Morgan Chase & Co, Research Division: Okay. And -- okay, I can follow up on that. Second, when you look at the TiO2 capacity additions in China in call it 2011, 2012, how many tons do you think they added to the global industry and how have they changed the global utilizations supply-demand balance?

We kind of think about China as about 100,000 tons of additional sulfate capacity a year.

And let me just add to that, that I think one of the biggest misconceptions and perceptions of the TiO2 industry is the idea that somehow chloride is a product of the future, sulfate the product of the past. I mean as you look at all the capacity that's been added to this industry in the last couple of years, it's all been sulfate. I'm yet to meet a single paying customer that's willing to pay anything more for chloride than for sulfate. And so I hope that -- I recognize that our margins are dropping in TiO2, but we still have a very, very competitive business. I believe, at this time, the right technology, consuming the right raw materials and looking at the competitiveness of that. So sulfate continues to be a very strong product and the product of choice throughout Asia and Europe and many other parts of the world. Jeffrey J. Zekauskas - JP Morgan Chase & Co, Research Division: Okay. And then lastly, just a point of clarification. Your urethanes profits were up $100 million year-over-year, and they were up about $190 million for the 9 months. Of the $100 million and the $190 million in rough terms, how much of that was PO/MTBE benefit?

We're just trying to go through some numbers here.

It's about -- if you're looking at sort of the 9 months over 9 months, it's about 1/2 and 1/2. Jeffrey J. Zekauskas - JP Morgan Chase & Co, Research Division: In urethanes?

Yes. Peter made the point, first quarter to third quarter it was largely urethanes. But if you look at it on a 9-month basis, it's roughly 1/2, MDI-half deal.

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

Just a follow-up on the disaggregation of Polyurethanes, if we look at the 9 months as a whole, can you give us a rough sense of the aggregate contribution of MTBE and related products to the overall segment profitability? Would it be more than 1/3 at this point or less than 1/3? I think that would be helpful.

Kevin, we haven't broken that out in the past in terms of what percentage it is. We've been talking more about sort of what the change has been and what the contributors are to that change. One of the reasons is because obviously, propylene oxide is integrated right through to our polyols and our systems businesses. And so we haven't broken that out in the past.

Okay. Maybe if I just come at it at another direction and focus on the sequential increase in EBITDA, which looks to be about $69 million, 239 versus 170. How much of that might have been PO/MTBE versus MDI and other urethane products?

So I'm sorry, again. Kevin, you're looking sequential second quarter to third quarter contribution?

Correct. Yes. So the 239 in EBITDA that you reported looks like it was up about $69 million relative to the second quarter. Was most of that MTBE or did MDI rise sequentially in profitability as well?

It was roughly 50-50 again, except for the $25 million Peter pointed to in terms of increased MTBE economics, so add $25 million to that. So of the 70, it was roughly 1/2 and 1/2 except for that 25. So it's kind of 1/3, 2/3 because of the outage.

Okay, very good. And then, Kimo, just had a question on Slide 8 where you disaggregate the EBITDA bridge there. If I look at the bridge, there's a positive contribution from other/FX both year-over-year and quarter-over-quarter. I guess for most of the companies we cover, foreign exchange has been a headwind. And I was just wondering if you could speak to the composition of that and what is driving the positive net effect in that category?

Sure. Well, FX was a benefit because we had a lot of assets sitting in Europe, where U.S. dollar obviously appreciated against those fixed costs. So net-net, all the way through from -- top line, it impacted the business negatively by 5% on the top line through the fixed costs, it's a net benefit.

I just want to just emphasize once again, when we look at our facility that produces MTBE, we're producing nearly 0.5 billion pounds, 250,000 metric tons of propylene oxide, which we believe to be some of the -- we're sold out in that high demand, good margin. It's a value-added component for the urethane side of the business. So I just want to make sure that we look at that end of the business when we talk about PO/MTBE, it's not all just MTBE.

Let me just add just a little bit more, sort of to Kevin's question around trying to break out that Other and FX line on Slide 8. I want to point to the fact that we have improved our fixed cost position on a year-over-year basis by $30 million of that $40 million. So FX benefit, in EBITDA terms, was about $10 million, fixed cost benefit about $30 million.

Gentleman, your next question comes from the line of Gregg Goodnight of UBS.

I note that November benzene sold at $490 a gallon, up pretty substantially at record levels. Could you please update us on your formula-based pricing surcharge for benzene? And what percentage of your North American customers are on this formula-based pricing?

Well, about 40% of our U.S. customers are on this formula-based pricing, whereby their price will automatically move with the price of benzene and also with the price of natural gas to take some of that volatility out of their pricing. But the majority of our customers, obviously around the world, the vast majority, are -- we've moved the price as markets will dictate. And as I said earlier, we've moved the price up in October with a $0.06 per pound increase. We've announced a $0.10 per pound increase in December. And assuming that we get those increases fully implemented or even partially implemented, we will more than offset the rising cost. And that -- the price, you're absolutely right, on benzene is a record-level high on benzene. And so I think that we're in a good position, whether we have formula pricing or not, to offset that rise in benzene cost.

Peter, you actually anticipated my second question, so I'll move on to my third question. Titanium dioxide pricing, you mentioned that margins are going to be down. I'm interested in the momentum of pricing softening in TiO2. If you look at October pricing, how would you compare that in terms of the magnitude of the decrease compared to September?

I'm not sure. As we look at the individual pricing on that -- if pricing looks to be fairly stable, between 1 month to the next, between August moving into September.

Okay. From -- I'm looking actually from September to October. Is the price continuing to decrease? Is it about the same level of decrease as September? Or is it a little bit early to make that call?

Yes. I have not seen -- I've seen some volume reports early coming in. From October, I've not seen any pricing reports yet. So I'd just be stabbing in the dark, and that's a dangerous thing for me to do.

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

This is Neal Sangani on for Bob. Just had a question on the TiO2 outlook. A lot of your peers have talked about the Chinese situation and not having a lot of visibility there until the Chinese New Year. Is there anything you've specifically seen in that end market? Are there customers there that gives you a little bit more visibility?

As we look at sort of our demand trends, September really was the first month we have seen demand at sort of normalized levels, in China specifically. So it leads us to believe that we are starting to see Asian destocking come to an end. We have seen, for several months, Asian demand well below our sort of 5-year average norms. And we -- I don't know if 1 month makes a trend, but it started to feel like, at the end of the quarter, we were coming to the end of that destocking.

As we look at the Asian kind of global economy, Asia feels like -- in a lot of our products, it feels like, specifically with China, that there are a lot more positive signs out there than negative signs. With the election coming up and as the new government -- well, I'm not sure about the election, but with the new government taking power here, I think that early next year, just from anecdotal, visits with customers and people in the region, I think this next year we're going to be seeing some growth returning more aggressively to Asia perhaps than the trend we've seen over the course of the last couple of quarters. So we're quite bullish as we look in the region and think that we're very well-positioned to take advantage of it.

Tony, that concludes our call. We want to thank everybody for joining us. And if anyone has additional questions that we didn't cover today, feel free to give us a call, and we're happy to engage. But thanks again for joining us today.

Thank you for your participation in today's conference. This concludes your presentation. You may now disconnect, and have a great weekend.