LyondellBasell Industries N.V. (LYB) Q4 2014 Earnings Report, Transcript and Summary

Hello, and welcome to the LyondellBasell’s teleconference. At the request of LyondellBasell, this conference is being recorded for instant replay purposes. Following today’s presentation, we will conduct a question-and-answer session. [Operator Instructions] I'd now like to turn the conference over to Mr. Doug Pike, Vice President, Investor Relations. Sir, you may begin.

Thanks, Sharon. Welcome to LyondellBasell's Fourth Quarter 2014 Teleconference. And I'm joined today by Bob Patel, our CEO; Karyn Ovelmen, our CFO; and Sergey Vasnetsov, our Senior Vice President of Strategic Planning and Transactions. Before we begin business discussion, I'd like to point out that a slide presentation accompanies today's call and is available on our website at www.lyb.com. I'd also like for you to note that the statements made in this call relating to matters that are not historical facts are forward-looking statements. These forward-looking statements are based upon assumptions of management, which are believed to be reasonable at the time made and are subject to significant risks and uncertainties. And actual results could differ materially from those forward-looking statements. And for more detailed information about the factors that could cause our actual results to differ materially, please refer to the cautionary statements in the presentation slides and our financial reports, which are available at www.lyb.com/InvestorRelations. A reconciliation to the non-GAAP financial measures to GAAP financial measures, together with any other applicable disclosures, including the earnings release, are currently available on our website www.lyb.com. But finally, I'd like to point out that a recording of this call will be available by telephone beginning at 3 PM Eastern Time today until 11 PM Eastern Time on March 3 by calling 866-407-9260 in the United States and 203-369-0614 outside the United States. And the pass code for both numbers is 4558. During today's call, we'll focus on fourth quarter and full year of 2014 performance, the current environment and the near-term outlook. But before turning the call over to Bob, I’d like to call your attention to the non-cash Lower of Cost or Market inventory adjustment that we recognized during the fourth quarter. This charge is driven by the use of LIFO accounting, our 2010 fresh start accounting as we entered the public markets and the recent declines in pricing for many of our own aw materials and finished goods inventories. And Karyn will discuss that adjustments later in the call, but the comments made on this call will be in regard to our underlying business results, excluding the impact of this LCM inventory charge. With that being said, I now like to turn the call over to Bob.

Thanks, Doug. Good morning to all of you and thank you for joining our earnings call. I am pleased to be here today conducting my first earnings call as the CEO of LyondellBasell. I am surely honored with along our stakeholders and I am excited about what the future holds for our great company. I joined LyondellBasell five years ago in order to be part of the team that would deliver one of this industry’s great transformations under Jim Gallogly’s leadership; we’ve put in place a strong work as basic philosophy and a solid foundation. I am grateful for his support and mentorship over the past five years. I’m also grateful for the hard work and support of all my colleagues at LyondellBasell. We are enormously proud of what we’ve accomplished together thus far. We have an excellent safety record, world-class assets, outstanding operational efficiency, a strong balance sheet and exciting growth projects underway. It’s my mission to build on this success and ensure LyondellBasell continues to deliver the highest quality products to our customers and pure leading value to our shareholders. I am taking over as CEO of a company that is well positioned to excel under all circumstances. This company has an excellent foundation upon which we will build. I’ll talk more at the end of this call about my approach, philosophy and strategy, but for now I would like to discuss the 2014 results. As Doug mentioned at the start of this call, a set of presentation slides accompanying the call is available on our website. Let’s take a look at Slide number 4, and review a financial highlights. The fourth quarter set a record for the period and marked the third consecutive quarter of record results with EBITDA of $2.1 billion and earnings per share of $2.48. Our EBITDA results were $578 million higher, when compared to the fourth quarter of 2013. Our annual results also set a new record. For the year, our income from continuing operations was $4.7 billion or $8.92 per share. The chart on the bottom of the page highlights the strength of our earnings and the annual growth realized over the past several years. Within our portfolio, the fundamental drivers of our performance were unchanged. Both Olefins, Polyolefins Americas and EAI segments again achieved record results in 2014. The Intermediates and Derivatives segment continued to be a strong stable performer generating approximately $1.5 billion of EBITDA in each of the past three years. Our Refining segment EBITDA more than doubled and the Technology segment continued to generate steady and strong earnings. I will speak more about the performance of each segment later in the call, but I first wanted to highlight a few of our 2014 accomplishments. If you turn to Slide number 5 of the presentation, I’ll begin with environmental, health and safety performance. Those of you who have followed us know of our commitment in this area. I want to assure you that under my leadership, LyondellBasell’s focus on environmental, health and safety performance will not cage. This has been and will remain our first priority; our outstanding track record can be seen in these charts. As they were last year, our results are consistent with top and solid performance. Over a five year period, our total recordable incident rates is down approximately 50% and our environmental and process safety incident rates have declined by approximately two-thirds. While these numbers represent good progress, they are not zero, which is our ultimate objective. Performance in this area protects our people, our assets, and the communities in which we operate. We will continue to strive for perfection and this will remain our number one focus and priority. Turning to Slide number 6, we’ve outlined some of our key financial and operating accomplishments. First, let’s cover our financial accomplishments. Profits during 2014 surpassed last year’s record earnings. We generated $6 billion in cash flow from operations while returning $7.2 billion to shareholders through share repurchases and dividends. We purchased more than 63 million shares and increased our dividend by 17%. Our finance team took advantage of a favorable lending market by issuing $1 billion in 30 year bonds at favorable rates and we initiated a commercial paper program. Turning to operating accomplishments, you’ll note our outstanding operating rates. The US Ethylene operating rate remains near our nameplate capacity for the third consecutive year when normalized for the La Porte turnaround and expansion. Our European Ethylene operating rate of 95% was 12 percentage points higher than the industry average. Our propylene oxide and refinery rates also improved year-over-year. In addition to our excellent operating rates, we increased our feedstock flexibility enabling more production from advantaged feedstocks. In 2014, approximately 90% of our US Ethylene production was sourced from NGLs and approximately 53% of our European Ethylene production came from advantaged feeds. At our refinery, approximately 10% to 15% of our production was sourced from lower cost Canadian crude and during the second half of the year, the refinery operated at 99% of capacity. As you know, we’ve always emphasize cost control. For the sixth consecutive year, we offset inflation and maintained flat underlying fixed costs. During 2014, we executed on our growth program. In addition to operating the Channelview Methanol plant, for the full year following a free start, at the end of 2013, we delivered two significant growth projects. The first major ethylene expansion in our growth program was completed at La Porte during last summer. This project brought online an additional 800 million pounds of annual ethylene capacity. We also commissioned an additional 200 million pounds of polyethylene capacity at our Matagorda site. Together these projects contributed approximately $80 million to 2014 EBITDA. During 2015, we expect to realize the full year benefits from both projects. Along with completing these projects, we began construction on two other ethylene expansions in the US and we are actively developing another. We also announced that we are in the process of developing plants for our new propylene oxide plant. Slide number 7 summarizes the impacts of our growth programs. Overall, we will increase our US ethylene capacity by 25% and global propylene oxide capacity by approximately 35%. Let’s turn to Slide number 8 and look at some of the metrics that drove our performance in 2014. Off the top of the page reported our key volumes. I want to focus your attention on our ethylene production. Over the past several years, our cracker operations have been strong and we’ve been able to operate in both regions above industry average rates. Our US data represents production after operation of our flux unit which converts ethylene into propylene. Taking into account, this ethylene consumption and our plant turnaround downtime, our US crackers again operated near our nameplate capacity of approximately 10 billion pounds. In Europe, our crackers operated at 95% of nameplate capacity, a new record for those facilities. On the charts along the bottom of the page, you see a summary of product margin to Spreads. The indexed chart represents our internal data while the others represent industry benchmarks. The charts on the left highlights strength of the US ethylene cans and our performance and then our outperformance in Europe as we increased feedstock, flexibility and operating rates during 2013 and 2014. On the right-hand side, we have product MTBE, and refining industry spreads. MTBE continued to deliver solid spreads during 2014. In refining, the industry Maya 2-1-1 Spreads has been fairly steady. While we have pursued internal improvements in our operation and flexibility to adjust to the changing crude oil environment, overall these charts provide a good perspective of the margin and volume factors that helped to generate record earnings during 2014 and in each of the last three years. Perhaps most important, we captured the value that a strong market afforded through our solid operations and advantaged feedstock positions. I’d like to now turn the call over to Karyn to discuss our financial performance.

Thanks Bob. Before I review our cash performance, I thought I should help you understand the lower cost for market inventory adjustment or LCM as that it’s somewhat unique. Please turn to Slide number 9. The simple pie chart has been added to help the reason for the non-cash LCM adjustment. This adjustment impacted our reported EBITDA numbers in the fourth quarter by $715 million and by $760 million for the full year. While this may be unique to us and that’s highlighted by our competitors, it must be remembered that we use LIFO accounting and our balance sheet is fabulous during mid-2010 when we reentered the public markets, but whereas at this time that our inventory was valued at market prices. Crude oil was approximately $85 and natural gas was at $4 per MMBTU. On the right, we have included and issued prices for key raw materials and products. In the graph, you will see that at the end of each of the subsequent years crude oil ranged higher than $85 price in 2010. The market value of our crude oil in trade was like in excess of the 2010 value. With the rapid decline of crude oil, the raw materials and finished goods pricing during the second half of 2014, GAAP accounting requires us to adjust the value of inventory held on our balance sheet show lower market prices. This is what has generated a large non-cash inventory adjustment. If you seen the tables, there have been further declines in both raw materials and products during January. If these conditions persists, we would expect to record additional LCM adjustments during the first quarter. Please turn to Slide number 10, as Bob already mentioned, this has been a record-setting year for both EBITDA and operating income. Olefins & Polyolefins – Americas EBITDA reached $4.2 billion for the year and grew more than $1 million per quarter. For Olefins & Polyolefins EAI exceeded $1.4 billion for the year, a mark achieved very far away just a few years ago. This performance was driven by our differentiated position and internal actions of Olefins & Polyolefins businesses. Intermediates & Derivatives continued to deliver stability to the portfolio and segment earnings were up approximately 4% versus 2013. While we often focus on the results of Olefins & Polyolefins – Americas given its size, it is important to note that Olefins & Polyolefins EAI and Intermediates & Derivatives together generated EBITDA totaling nearly $3 billion. As it’s particularly impactful as only $432 million of capital is needed to support the operations resulting in excellent cash flow. Refining also contributed as EBITDA more than doubled from the very difficult 2013. Please turn to Slide number 11, which provides the picture of our cash generation needs. During 2014, we generated $6 million cash from operations. We also took advantage of favorable interest rates and borrowed $1 billion at an average coupon rate of 4.875%. Our commercial paper borrowings ended the year at $252 million. The cash and short-term securities balance ended the year at $3 billion. On Slide 12, you can see the $6 billion in cash from operations. This is $1.2 billion higher than 2013. This cash generation has allowed us great flexibility. And for the capital expenditures of approximately $1.5 billion during 2014 allowing us to progress our growth projects. We have also continued our commitment to return cash to our shareholders and you can see the significant step forward that was made during 2014. During the last 12 months, we have returned $7.2 million for our shareholders repurchasing over 63 million shares in the process. During the past four years, we have paid dividends of $7.8 million and devoted $7.7 billion to share repurchases. To-date, we have repurchased approximately 91 million shares since the share repurchase program began in 2013. This equates to approximately 16% to the total shares outstanding at the time the program will be initiated. As you may recall, we are authorized to purchase 10% of our shares before the end of October 2015. Herein, we have ample cash to acquire remaining 20 million shares under this authorization. We continue to remain committed to returning cash to shareholders. There has been no change to our capital deployment or our financial policies in this regard. So this is the beginning of the year, it is that time we’ll address some of your 2015 modeling questions. Regarding capital, we are currently planning to spend approximately $1.6 million during 2015. This spending level progresses with our base statements and growth programs. Approximately 40% is targeted toward our growth program. During 2015, major projects had good turnaround at the refineries, two propylene oxide facilities and ChannelView methanol. Majority of the growth spending will be divided between the ChannelView and Corpus Christi ethylene expansion. ChannelView expansion should be online during the second quarter and Corpus Christi is now expected to begin production during the second quarter of 2016 following a first quarter turnaround. Our cash interest expense is expected to be approximately nearly $369 based on $6.8 million of long-term debt at an average rate of approximately 5.3%. We also expect to have $10 million of interest on our short-term facilities as well as an estimated $4 million per quarter of non-cash amortization. During 2014, we executed $2 million of fixed to floating interest rate swaps and $2 billion of dollar to euro cross currency swaps. At year end 2014 conditions, we expect these positions to reduce our interest expense by roughly $60 million in 2015. However this will fluctuate with underlying movements of interest and currency rates. I look forward to optimize our interest rate mix with interest rate swaps. We also expect to continue our short-term investment strategy which is based on ensuring the safety and prioritization of our investors. This strategy provided over $30 million in interest income in 2014. However this line of income changed depending on the level of interest rates and cash that is invested. And depreciation and amortization should be approximately $1.2 billion during 2015. We plan to make regular pension contributions that totaled approximately $110 million and estimate pension expense of approximately $55 million. We currently expect a 2015 effective tax rate of approximately 26%. The cash tax rate is expected to be somewhat lower. With that, I’ll turn it back to Bob for a further discussion of our business results.

Thanks Karyn. As mentioned previously in my discussion of business results will be in regard our underlying business results excluding the impacts of this LCM inventory charge. Let’s discuss segment performance beginning on Slide number 13 with our Olefins and Polyolefins Americas. Excluding the LCM charge, fourth quarter EBITDA was $1.3 billion, $72 million greater than the third quarter. For the full year, segment EBITDA was $4.2 billion, an outstanding year. Relative to the third quarter, ethylene margins were unchanged. The decline in pricing of approximately $0.06 per barrel was offset by a lower cost of ethylene production. Our operating rates remained strong during the quarter averaging 97%. The additional La Porte capacity was fully online during the quarter that operated nearly at full capacity. 73% of our production was from ethylene and 88% came from NGLs. The differential between ethylene and propylene prices allowed us to profitably operate our flex unit throughout the quarter. This added approximately $19 million to our results. In Polyolefins, our polyethylene’s price expanded by approximately $0.04 per pound, while the polypropylene’s price was up approximately $0.01 per pound. Polyethylene volumes decreased by approximately 6%. Polypropylene experienced a sales volume decline of approximately 14% due to holiday slowdowns and some late December customer destocking. For the full year, results surpassed 2013 by $617 million primarily due to higher Olefins and polyethylene results. Olefin results benefited from higher prices due to tight industry supply for much of the year as well as a lower cost of ethylene. Polyolefin’s results showed the greatest improvement increasing $530 million versus the prior year as PDE volumes and Spread over ethylene improved significantly. Overall, 2014 was an excellent year. Industry fundamentals were strong. Our crackers continued to operate reliably near nameplate capacity and we normalized for the La Porte turnaround. We also completed the La Porte ethylene expansion and began realizing financial benefits of that production. In January, ethylene price margins have come off their record highs as prices in the market have followed crude oil lower. We continue to see natural gas prices below $3 per million BTU and NGL prices have been weak as inventories have reached record high levels. Let’s turn to Slide number 14 and review performance in the Olefins and Polyolefins Europe, Asia and international segments. During the fourth quarter underlying EBITDA was $392 million or $49 million higher than the third quarter. For the full year, underlying EBITDA was $1.4 billion, a $571 million increase versus 2013. Olefin’s results increased versus the third quarter by approximately $70 million, as a result of the lower cost of net debt, more than offset declining ethylene prices, polyolefin results decreased on lower volumes as sales decreased approximately 3% to 4%. Our Polypropylene Compounding and Polybutene-1business results modestly declined due to lower sales volumes. Seasonal declines of this magnitude are typical in Polyolefins, Polybutene-1 one and Polypropylene Compounds. Equity income from JVs was relatively unchanged. For the full year, segment results increased by $571 million. Olefin’s results increased by approximately $260 million. This increase is largely the result of lower cost of ethylene as a result of lower naphtha costs, increased advantage feedstock processing and higher production. We operated our crackers at 95%, approximately 12 percentage points higher than industry rates. The benefit associated on advantaged feeds totaled approximately $220 million. Our Polyolefin results increased approximately $235 million year-on-year reflecting improved sales than higher volume in polyethylene. Polypropylene Compounding and Polybutene-1 results were relatively unchanged versus 2013. Equity income from our joint ventures increased by $55 million. 2014 also benefited from the $52 million environmental settlement that was recognized during the first quarter, while 2013 benefited from a $25 million insurance settlement. 2014 was a record year for the O&P EAI segment. We are realizing significantly better results following the challenging two years of restructuring and difficult market conditions. Having worked with this team over the last four years, I am very proud of their accomplishments. Their value-oriented approach to markets, focus on feedstock flexibility and restructuring activities ahs enabled this performance improvements surpassing $1.4 billion of EBITDA is an achievement worth calling out. During January, prices continue to adjust to a changing raw material environment. January orders are in line with normal all the quarter activity and our margins and operating rates have been resilient. JVs related earnings are anticipated to moderate consistent with the lower global polyolefin prices. Now please turn to Slide number 15 for a discussion of our Intermediates and Derivatives segment. Fourth quarter EBITDA was $364 million, a decline from the third quarter of $19 million. For the full year, the segment generated EBITDA of nearly $1.6 billion and $60 million more than 2013. The quarterly decline was attributable to lower propylene oxide and derivatives following a strong third quarter. In our Intermediate Chemicals business, EBITDA increased approximately $10 million, as strength in our results from declining benzene more than offset the decline in key four chemicals resulting from seasonal impacts and scheduled maintenance. As the Oxyfuels results were relatively unchanged and Oxyfuels results were lower by approximately $10 million. The impact of lower gasoline prices and its typical seasonal declines were partially offset by tight Oxyfuels markets. Declining raw material costs and strong obtained premiums during October and November. The full year 2014 increase versus 2013 reflects strength and stability in our propylene oxide business and increased contribution from our expanded methanol business. You’ll recall that the methanol and the ChannelView was restarted during December 2013. While this asset has not won LyondellBasell’s standards, it did contribute to our earnings and remains a sound investment for the segment. The ChannelView methanol plants ran at 68% utilization rate during 2014 and was a primary driver of a $175 million EBITDA improvement in the acetyls business. Oxyfuels’ results decreased by approximately $30 million versus 2013. Volume and product mix were the primary drivers. Our gasoline and octane premiums have supported the business for most of the year. The New Year has started with a little change in propylene oxide market as the supply and demand fundamentals have remained strong. Oxyfuel prices have moderated, as crude oil and gasoline prices continue to decline. However, Spreads are in line with norms. Methanol prices have also come under some pressure. During the first quarter, we will be conducting scheduled maintenance on ChannelView methanol plant. Based on January margins, we estimate that this will impact segment results by approximately $20 million versus production at full rates. Let’s move to slide number 16 for a discussion of the Refining segment. Fourth quarter EBITDA was $33 million, a decline of $77 million from the prior quarter. For the full year, the segment generated $409 million of EBITDA, an increase of $227 million versus 2013. During the fourth quarter, the Maya 2-1-1 Spread averaged $17.72 per barrel and crude throughput averaged 266,000 barrels per day at our refineries. Spreads at the refinery declined less than the nearly $7 decline in the Maya 2-1-1. The lower Maya Spread was primarily driven by gasoline. The refinery benefited as the negative spread between secondary product values and crude oil price declines. The cost of RINs during the quarter were relatively unchanged from the third quarter. 2014 saw improvement in the Refining segment. Crude throughput averaged 259,000 barrels per day, up 27,000 barrels from 2013. 2013 included a turnaround on a crude unit and a co-product. The Maya 2-1-1 benchmark increased by approximately $1.50 per barrel to average $24 per barrel. Cost of RINs decreased by approximately $20 million during the year. Thus far in 2015, the Maya 2-1-1 Spreads averaged approximately $19 per barrel. There is no major maintenance planned at our refinery during the first quarter. We received our initial shipments of Canadian crude through the Enbridge Flanagan South Pipeline system late during the fourth quarter. These volumes should increase across the first quarter. Turning to Slide number 17, let’s step back from the details and think about the business environment more broadly. Over the fourth quarter – overall, the fourth quarter and 2014 were record periods while margins have eased our positions remain advantaged. Importantly, we continue to generate strong earnings and cash flow. We started the New Year beginning the new chapter in the life of LyondellBasell. While this is a new chapter and many teams will sound familiar, first, we’ll always be committed the safe and reliable operations. Safety is our first priority and it’s a part of our core values as evidenced by our top safety performance. We will also continue to pursue operational excellence focusing on running our world-class assets reliably and efficiently. During 2015, we should benefit from the increased production at La Porte, we anticipate the completion of the expansion of ChannelView and new volumes beginning in the second quarter. We also expect improved operating rates from the ChannelView methanol unit in 2015 following the first quarter maintenance. Cost management will continue to be part of our everyday operations. I believe that our fixed cost should not vary depending on the business cycle. Our structure and resources are designed to function well under a range of industry conditions. Our costs did not escalate during this times when we don’t expect to end very much in difficult times. We’ve built the company to deliver differential results for our shareholders at all business climates. My goal is to leverage this strong foundation and to build upon it. While we anticipate that US ethylene margins will ease to a record 2014 levels consistent with lower oil and gas prices they remain relatively strong. In fact, IHF estimates current ethylene margins to remain above $0.25 per pound. Our business continues to generate significant recessionary cash over and above of our capital program and dividends. The returns on our growth program continue to be excellent and our projects are generating earnings today. We’ve greatly reduced our share count and continue to repurchase shares. Furthermore, we continue to maintain a strong balance sheet allowing us to pursue both our expansion plans and other opportunities if and when the timing is right. I look forward to leading this team into 2015 and beyond as we continue to build momentum across the company. Before we open the line for questions, I wanted to make you aware of our upcoming Investor Day. Our executive team will be conducting this session in April 29 in New York. We tentatively planning for the meeting to occur between 8 AM and 1 PM. We will be finalizing the details and we will notify you of the location in the coming weeks. Please plan to join us for the event. We are now pleased to take your questions.

[Operator Instructions] Our first question comes from P.J. Juvekar of Citi. Go ahead sir. Your line is open.

Thank you and, Bob, congratulations on your new position.

Thank you, PJ. Good morning.

Good morning. And, as you make your mark on the company, I would like to know how do you think about – has build efficiency and what it mean by that is, you can build the new plants or expand an existing plant or in buy in, you can buy in your existing businesses or in some – so just, sort of take a step back and tell us how do you think about all the decisions?

Well, PJ, when I think about buy versus build, we really have to step back and look at free cash flow deployment. So how do we think about our free cash flow deployment and our balance sheet. First of all, our priorities are to maintain our existing assets in top condition. So our maintenance capital is a high priority to us, then our current dividend is also a priority. Beyond that, our focus as has been in the past it should have a stable and growing regular dividend, to have a good focus on growth plans – on CapEx to the extent that we still have opportunities and then share repurchases. We still see our shares has being a compelling value. We still see the ethylene advantage as being live and well. And we see a bright future for our company. In terms of M&A, we have to compete M&A – competes with all of these other priorities and we’ll continue to evaluate all of our options as we carry forward the strategy of our company.

Thank you. And then secondly, there were lot of talk about at the exports and capital being deployed there. With the recent change in the NLG complex, how do you see exports of NGLs or exports of raw materials out of the US? Thank you.

Well, exports of ethane is probably a little bit different than exports of propane and butane. At today’s crude oil price, ethane exports will look less attractive, but over the long run as we have mentioned, in prior calls that there are crackers in Europe and perhaps some in Asia who are uniquely placed to import ethane and benefit from those imports. We don’t expect this to be a very broad sort of program. It’s specific for a few crackers. In the case of propane, propane exports have been increasing. But here in the US, we still see a significant amount of propane supply and ethane supply. Ethane rejection levels today are 300,000 to 400,000 barrels per day. So while ethane exports and NGL exports in general will be persistent in the market. We don’t expect those to change the outlook of the US ethylene advantage.

Thank you.

Our next question comes from John McNulty of Credit Suisse. Go ahead. Your line is open.

Yes, good morning. Thanks for taking my question and again congratulations on the new role. When I look at Lyondell, we see you are at levels where you are industry leader in terms of profitability, you are industry leader in terms of safety levels and yet in some of the opening comments and in the release, you had indicated you want to the take the company to the next level. So I guess, I am wondering, how do you think about what the next level is, whether it’s more cash to shareholders or M&A or new platforms being added on. I guess, how should we be thinking about what the next level is in your mind?

Well, thanks John. First of all, when I think about what gets us to the next level, our focus has to be in the near term on running what we have today as well as we possibly can. That enables a generation of free cash flow which affords us to have the opportunity I think about the other items you mentioned that’s just been the job here less than 30 days. We are going to build out our strategy, we are going to work with the Board to discuss an array of options, organic growth, no other growth options that maybe available to us, we’ll develop that over time. But we do see these share repurchases as being a continued focus. We’re likely to ask our shareholders to approve another share repurchase program after this one from this course in May, June. So share repurchases will continue to be something that you will see from us. In addition to that, we will build out our strategy and think about other ways to take the company to the new level.

Great, thanks for the color. And then I guess, the second question, you indicated – as far as your fixed cost you don’t really see that changing all that much and I guess, when we look and we see crude prices getting cut in half and commodity prices rolling over, I guess, are there things that you or Lyondell can do to help to weather this? Are there actions that we should be thinking about that you’ll be taking going forward, or is it pretty much you are going to live and die to some degree what the commodity prices actually do?

Well, first of all, I would remind you that we’ve gone through a fairly significant cost reduction program following 2009 and 2010. And I can tell you that the culture of our company as we don’t wait for prices to change our costs. We manage our cost tightly in good times and in bad times and while we don’t have a program that we are running through the company at the moment, we have opportunities to incrementally improve our cost structure whether it’s in – more in specific sites, or in specific businesses, those are things that we pursue everyday and we’ll continue to do that for the rest. Our job is to be nimble from a commercial standpoint as these markets are dynamic and continue to run our assets as reliably and safely as possible. We think that that is - that’s our formula and it has been effected – it will be effected in the future.

Great, thanks very much.

Our next question comes from Jeff Zekauskas of JPMC. Go ahead. Your line is open.

Hi, good morning. I was wondering, Bob, over the next five years, what do you think is the probability that Lyondell might make a significant acquisition. Do you think it go downstream or complement its upstream operations?

Well, Jeff, it’s a good question and I want to make sure I don’t get ahead of my board and ahead of the team that works together with me here at LyondellBasell. And but certainly, we are going to build out our strategy, we are going to continue the evolution of our company. We think about where we’ve come from, we’ve gone from a company that was really focused on day-to-day survival in 2009 and 2010 to a company that got its cost structure right put in place incredibly strong operating discipline which enabled the free cash flow that we enjoy today. We’ve reached the benefits of internal organic growth opportunities. We still have many ahead of us which we simply can’t lose our focus on those. There is some fairly big projects that are underway and then, of course, as we mine those, we’ll then think about the next steps in terms of strategies. So you will hear more from us as time goes on and we’ll share a bit more with you when we come up to New York for Investor Day. But, think about going through an evolution is most companies has built through and we’ve come a long way and I think we have a long way to go.

Thank you. And my follow-up, the price of oil has been bouncing around between $45 and $55 a barrel on a Brent basis and if you go back in time, maybe back to the 2008, 2009 recession, the North American ethylene price was in the high 20s, rather than in the high 30s. And of course, ethylene can always fluctuate crude oil the direction it goes with it. Do you have any thoughts on why ethylene is as high as it is given the current Brent price?

Well, generally in our markets, Jeff, the cost part of the equation tends to fall faster than the price part of the equation. Having said that, we have lot to do with how fast and how dynamic prices move. Today, operating rates are relatively high all over the world and when we think about inventories in the value chain they are relatively low. Crude price has been dropping for the better part of 60 days. Based on our past experience in 2008 and 2009, all the participants in the value chain had a propensity to reduce inventory quickly because it did values everyday. We think that’s kind of run its course. As we see here today in January, and as crude oil prices perhaps stabilize and there is an indication of a bottom likely, we are going to see some inventory replenishment and we are going to see a seasonal uptick in demand as we move into March, April, May timeframe. But I think all those factors point to a net positive picture from a demand standpoint. Operating rates are reasonably good. So, and on that slide, perhaps you haven’t seen the kind of impact on ethylene price. And the other thing I would say is that the price of ethane is more tied to gas than it is to oil. So here, as I mentioned earlier, the ethane supply demand indicates that there is an abundance of ethane and rejection levels have reached as high as 400,000 barrels a day. So there is plenty of ethane, there is lots of propane here to compete with ethane to get into the cracker and frankly, we don’t see that changing in the near term.

Okay. Thank you so much.

Our next question comes from Bob Koort of Goldman Sachs. Go ahead sir. Your line is open.

Thanks and welcome back to Houston, Bob. I guess, here a month into the job, you got one of the top three performing chemical stocks. So you are certainly a pretty good President. Couple questions for you. One on – I think you guys have said in aggregate you are going to add maybe 2 billion pounds your US ethylene capacity and maybe 1 billion pounds of polyethylene. I am just curious what your approach is to being a merchant seller or how you view being long or short olefins versus polyolefins as we look to all the capacity additions that are coming into the industry over the next three or four years?

Well, we are a significant merchant player today and we’ll likely be a merchant player in the future in the ethylene market. Our expansions in terms of ethylene, so we’ve got the La Porte one up and running at 800 million. We have the next ChannelView expansion in Q2 of 2015. We have Corpus Christi in Q2 of 2016 and the ChannelView, another ChannelView expansion in 2017. In total, we’ll add about 2.3 billion pound to 2.4 billion pounds. Part of that is to fully support the assets we have on the ground today. You have to remember we also have a flux unit which produces propylene which consumes a significant amount of ethylene. So our options in terms of future integration of ethylene, we could build more polyethylene, we could build another flux unit. We continue to evaluate those options. But I do expect us to be a reasonable size merchant seller of ethylene as well. We feel with those three options, I think we have a reasonable amount of potential to supply new ethylene that will come online.

If I might ask another sort of longer term question, I was at a presentation yesterday by one of your soon to be new polyethylene competitors and they talked about maybe placing two-thirds of their polyethylene output into the export markets which will be a dramatic increase from the rates that the US exports today. What’s your sense on volatility of the industry as all these new units come on over the next few years and the need to export and rely more on the export markets for off-take, is that something that creates a greater risk or what’s your sense of that might develop?

I am not sure about it, that presents risk. Maybe you step back and look at the supply demand outlook for ethylene globally. The US is really the only region that’s having significant amount of ethylene capacity. You don’t see a lot of this in Asia. Asia is more focused on coal-based propylene or PDH-based propylene and there are some crackers but not significant. In Europe, there really is, there are many expansions. So we think about global demand growth of ethylene and you think about the amount of ethylene expansion here in the US, the two match up relatively – and so we have the Middle East adding ethane-based ethylene production. We do have some mix feed crackers there that are planned with – being one of them. But, I really see America as being the next exporter of ethylene to support global demand growth and therefore I think prices will equilibrate to kind of international arbitrage and the product will be placed. So, it’s only natural that more product will be exported to meet the demands for the rest of the world.

Great, that’s helpful. Thank you.

Our next question comes from Arun Viswanathan of RBC Capital Markets. Go ahead. Your line is open.

Thanks for taking my question. Congrats on a great year and those in the management of Bob as well to you. I guess, my first question was on polyethylene and polypropylene. You guys went through some late December destocking in polyolefins. Is it your sense that some of that has run its course? I think you mentioned that as well and what’s your outlook, I guess, for the next six months or so and how that continues?

Well, thanks, Arun for your kind words. In terms of the inventory downstream, I think that across the world, whether you talk about Asia or Europe or US, the inventory in the value chain is on the low end of normal range. And I think buyers are looking to see – looking for signs of a bottom in prices and in crude oil and as I mentioned earlier, if you think about some level of restocking coupled with a seasonal uptick in demand, going into the next few months, I am relatively bullish about the demand outlook globally on polyolefins. And I think that will carry its way through at least June.

Okay, thanks. And I guess, my next question is on cash flow in the balance sheet. First, do you expect a working capital benefit in 2015? And then, on your buybacks, you mentioned that in the past conversations that you would consider repurchasing up to 10% of your shares, is that still something you are considering and cash flow is lower, would you reduce use you commercial paper or other sources to make that happen? Thanks.

With regards to the working capital, we do expect to see kind of the continued trend in terms of pricing and in course you’ll see our receivables coming down faster than our payables and so, it will be one of our consistent trend there as we head into the first quarter. With regards to the next 10%, we’ve completed the existing 10% tranch that we are working through right now by May and start to indicate our expectation is that we would look for authorization approval from the shareholders at the next Shareholders Meeting for another 10%. And in terms of funding that, we have consistently been using the balance sheet, we’ve been raising debt as well using discretionary cash flow beyond our working capital, our growth CapEx and our dividend needs to fund that program. We have always said we want to season into this investment grade space into the strong triple D. We’ve been doing that and we are aware that there are opportunities there, it’s indeed we need to fund the next tranch and supplement that with our free cash flow as we go through the next 12 months or so.

Okay, great. Thank you.

Our next question comes from Vincent Andrews of Morgan Stanley. Go ahead. Sir, your line is open.

Thank you and good morning everyone. Probably, I was wondering if I could ask a bit on the demand side of the equation, the GDP multiplier for ethylene is kind of the kind of spec around one is slightly below one for, kind of the post financial crisis period. In prior times, when we think of lower oil prices and lower plastics prices the multiplier has been higher, what is your view on demand, if we are going to stay lower oil prices and consequently lower plastic prices and I guess, the second part of the question would be do you think it's possible that demand drives us into a ethylene sort of super cycle, if you will?

Well, from a demand standpoint, Vincent, I think, we should think about demand improving based on lower oil price and as emerging markets continue to consumer more polyolefins per person. So, those trends I think are still in place. I am not sure if I am ready to declare some sort of super cycle at this point. But I do think demand will improve incrementally and again, I would point you to, especially in polyethylene or ethylene and derivatives look and see how much new capacity is coming outside of the US and there is not that much. So, we could see, reasonably high operating rates over a longer period of time. But we will have to watch all this and see how demand evolves.

Okay, thanks very much.

Our next question comes from David Begleiter of Deutsche Bank. Go ahead. Your line is open.

Thank you and Bob, congratulations as well. Hey, Bob, just on your ability to crack propane butane in the Unites States, I was - thought you may have cracked actually more in Q4 than you actually did. Can you talk about why that was the case and potentially going forward for increasing propane and butane crack?

Thanks, Dave. We are known for here in the US is our feedstock flexibility and so, we can crack ethane, propane, butane, we can even crack heavy liquids. But we’ve changed our cracker profile over the past that our cracking profile over the past three four years. We’ve not given up a lot of our flexibility, but what part of that does is, we can’t crack a lot of any one thing. But as you look at where relative propane and ethane prices has been, we’ve been able to capture the value of the NGL barrels being advantaged. And so, I don’t think that’s held us back. It might have some competitors who can crack a lot more propane than we can. But I would tell you that we have industry-leading flexibility which I think will service over the long run.

Very good, and just on the refinery, Bob, can you give us your thoughts or philosophy and how that business fits into Lyondell in the near, medium and longer term?

Well, when I think about more broadly any of our assets, I expect that every asset should realize its full potential. It got to run well and the refinery has certainly made great strides in that area. They have to outperform their peers and our refining is – probably I think this area as well and more to go we’ve identified many more improvement areas and Kevin and his team are working diligently to realize that potential. We are likely – all of our businesses at a minimum have to generate positive cash flow and the refinery is doing that. So - and looking forward, we see some potential upside from Canadian crude moving to Houston, we are already realizing some of that to Flanagan South Pipeline and we expect that more of that in full year 2015. So, I still see potential there. The refining business is challenging and we know that, but, we are going to continue to work this asset and make sure it realizes its full potential.

Thank you very much.

Our next question comes from James Sheehan of SunTrust. Go ahead. Your line is open.

Thank you. Could you give me your outlook for MTBE raw material margins over the next twelve months?

Yes, I think, generally, butane looks to be favored, butane is abundantly available, especially going into the summer months. Recently when I was in Europe, and we were getting butane at prices we haven’t seen in many, many years. Here in the US the same. So, our view is that it’s part of the broader NGL story and we think butane will be abundant and we will contribute to the profitability of our MTBE business going forward.

Thank you and also, as you added towards condo crackers change in the low oil price environment?

Well, we are always open to considering different contracts and options. But as you know, we have a strong list of projects in front of us and as I mentioned earlier in the call, 2.3 billion pounds to 2.4 billion pounds of ethylene expansion. Beyond that, we are always open to considering other projects, but we have enough on our plates and we want to execute well and let’s see what’s ahead of us.

Thank you very much.

Our next question comes from Duffy Fischer of Barclays. Go ahead sir. Your line is open.

Yes, good morning. I want to jump to Europe if we could, your operating rates relative to the industry were outstanding, but do you see others trying to imitate you and going more to NGLs and basically reducing their cost so that you might have to run more in line with industry averages over the next couple of years?

Good morning, Duffy. Well, in Europe, the landscape is a little different than the US, because each cracker has its own set of circumstances given that there are – there isn’t a robust logistics ethylene system or feedstocks and for products. So, lot of the crackers in Europe, they are tied to the neighboring refinery and often the ownership is the same. So while they might aspire to crack more propane or more butane, their peak rate maybe more fixed given location and ownership structure and those kind of things. So, incrementally, the industry over there likely will crack a bit more propane. But I don’t see that materially impacting our operating rates or our ability to leverage propane and butane there.

Okay, and then another one around Europe, is the Middle East can basically ship products to Europe or Asia and there is kind of a swing factor, do you see lower oil changing the competitive balance between Asia and Europe as a home for Middle Eastern product?

Well, those are the two most natural destinations and over time, generally they tend to come in where the Middle East could be a different. I will tell you that the Asian market is easier to serve than is the European market and it’s some more natural destination for Middle East product. We’ll also have to watch the euro dollar exchange rate as the euro weakens, Asia could look like a more attractive export destination. And likely, European buyers are more sophisticated at times require more higher end products and so on. Typically, not the kind of products we would produce in large facility in the Middle East. So, a lot of factors that point through Asia being the more likely destination of the Middle East exports.

Great, thank you guys.

Our next question comes from Aleksey Yefremov of Nomura. Go ahead. Your line is open.

Good morning. I wanted to come back to MTBE. Is there any reason why for MTBE would be weaker in 2015 versus 2014, perhaps there would be less demand for octane or any other reason?

Hi, Aleks. I think, when you think of MTBE, you have to remember really what it is, right it is basically it’s high octane gasoline component. It would be – no sulfur, it seem very well into the environment. So it’s going to see ups and downs based on octane demand, operating rates and things like that. But generally what you find in here is, you have a market where octane engine demand, there is a number of higher wafer pressure, lower octane materials available in the forms of – refrains in the US. And MTBE is a natural blending component around the world. So, I think you see a solid market. Or you basically have another gas to oil situation in which butane price, butane inventories are as long as they have which responded to the lower level price oil environment. And our continued volumes are good

Great, thank you. And as a follow-up, turning to Olefins and Polyolefins, are there any meaningful annual contracts that repriced this year through the annual contracts that could benefit you in 2013? For example, we saw that polypropylene contracts were reported as being more advantageous to producers this year? Is there anything like that going on in polyethylene or ethylene?

No, there is really nothing significant there we’d call out here.

Great, thank you.

Our next question comes from Kevin McCarthy of Merrill Lynch. Go ahead. Your line is open.

Yes, good morning. Can you speak to the extent to which you r long-term view of US NGL supply may have changed given the collapse in crude and the impact on drilling activity. I guess, I’m kind of interested in the 2018 to 2020 timeframe given the probability that the early wave crackers start-up and our understanding is somebody ethane exports have take or pay contracts. Just wondering if you can see a rebalance sooner than you previously did and if so, whether or not that will impact your capital allocation beyond late 2017 in your Channelview project there?

Good morning, Kevin. We haven’t changed our view on ethane supply demand longer term. In the near-term the market will go through a bit of transition. As you’ve probably read, as all have read there, it’s been a pretty significant response on the supply side and oil. Most of the majors have announced 30% to 50% caught on their CapEx budgets, while our E&P companies have announced cut as well. Likely, this will – to the response in oil price, I can’t tell you when likely that will happen and longer term, we think the US will continue to be a strong producer of natural gas at NGLs and we don’t see the availability of ethane materially changing. And the answer to your question about the capital program, I don’t have any price to adjust to our capital program based on the current market condition in terms of our growth plans on ethylene. We are going to continue on the path we are on, we are going to continue both ChannelView expansions and the Corpus Christi expansion.

Okay. And then a follow-up if I may on the issue of destocking and restocking I suppose. If I look at the volume numbers that you have on slide 13 and 14, it looks like the sequential volume decrement for whatever reason was a lot larger in the Americas versus Europe, just curious as to why that might be the case and whether or not you're seeing different behavior along the lines of inventory management in the two regions?

We are not seeing anything that’s really different or unusual. The metrics might, seeing sort of a normal end of season decline. As I have mentioned, we saw little bit of a slowdown in buying which we think is some destocking with it. But overall, we are not seeing a big reaction to the pricing and I don’t see anything different across either of the two regions and both are really pretty good line and pretty difficult of what we’ve seen at year end.

Okay, thank you very much.

Our next question comes from Frank Mitsch of Wells Fargo Securities. Go ahead sir. Your line is open.

Yes, hi good morning folks, and let me also offer my congratulations, Bob, on the new position. Hey, first a clarification, as I am looking at the slide 9, you talked about polyethylene being down $0.05 in January versus December here in the US. And I guess I was hearing in certain circles that it was only down $0.04. Can you clarify what - where did the industry settle?

The industry settled at $0.04.

Alright, great. And then in terms of the new projects, your predecessor laid out that the ChannelView expansion would probably be contributing on an annual basis $90 million of EBITDA and the Corpus Christi expansion, that’s going to be adding about $300 million of EBITDA, once everything was fully up and running and obviously that was at a level the oil wasn’t really higher than it is today. How should we think about those projects in terms of what the ultimate contributions can be? And then, I also noted I think on Corpus Christi, originally that was supposed to come up late 2015 and now it looks like it’s going to be coming up in the second quarter 2016? Was there anything behind the move to delay that expansion?

Hi, Frank, this is Doug. Let’s first talk about the contribution, I mean, it’s still 800 million pound expansion. So we see the margins at over the market turns out to be, think of where we are now is perhaps is showing ethylene margins at over $0.25 a pound. So, we’ll see where things move in this world that we are in where things are moving up and down a little bit right now. But, regardless, on the way it settles very strong, rather it’s going to be a 2013, impossible for us to say at this juncture. Now as far as the timing of Corpus, what we’ve done is, we are going to do our turnaround in the first quarter at Corpus and as you can understand we are making a significant increase in the capacity and we tied a lot of new equipment. So we have to start the expansion with the turnaround. So with new turnaround in the first quarter, that will contribution be bring up the expansion in the second quarter. It’s very much like we do that report. It’s just a matter of framing, Frank.

All right, terrific. Thank you so much.

Our next question comes from Don Carson of Susquehanna. Go ahead sir. Your line is open.

Yes, thank you, I want a discussion of where ethylene margins might go, but can you also talked about polyethylene over ethylene spreads is your chart on page 8 shows it widen considerably in the US in the last few years. What drove that and where do you see that heading over the next one to two years?

Well, part of what drove that, Don in the past years is just supply demand. The market has been very strong in the US and we haven’t had expansions here in quite some time. So, market dynamics are very good here. In the near term, I think demand as I mentioned earlier should be incrementally better as we work through the year with the restocking as well as some seasonal uptick in demand. Longer term, our prices in the US tend to be and will be more so in the future tied to export equivalents and so on, especially more for the commodity products. And there again with the wide crude to gas ratio and abundance of ethane here in the US, American producers should enjoy a reasonably good margin.

So it doesn't sound like you are in the bear camp that there was spreads and there was lot of controversy over the whether those spreads are sustainable or not to appreciate that color. And then finally, if you can just clarify, obviously with a lot of plants in the US you consume a lot of natural gas just as a fuel for those plants. Just ignoring the feedstocks out of the equation, what's kind of your exposure to the decline in natural gas that we've been seeing in the US?

We certainly b benefited from the natural gas price dropping some – I don’t know, Doug if we have a number.

Utilities typically for us across all the facilities, a dollar in gas can be about $250 million in utilities that’s including the refinery and the crackers et cetera.

Okay, thanks Doug.

Our next question comes from Hassan Ahmed of Alembic Global Advisors. Go ahead sir. Your line is open.

Hi there, Bob. There were obviously a couple of questions earlier about, I guess, the resilience of ethane prices in light of declining crude. I would imagine one of the reasons for that would be significantly lower co-product value contributions, right? And I would imagine again in particular propylene. So just wanted to hear your views about the near to medium term outlook for propylene prices, particularly keeping in mind how you're running, crackers in Europe pretty hard, as well as a fair amount of call it PDH as well as methanol to propylene capacity coming online?

Yes, good morning Hassan. When you think about propylene in the US, they were net short on a capacity basis, our derivatives ability to consume propylene and the amount of propylene that's produced. And our propylene prices already corrected significantly in the past couple of months. And as methane and propane compete be in the lay for crackers, the amount of propylene supply will vary. My sense is that, at these prices, propylene is on the low end. But we'll just have to see how supply demand plays out. But just remember that there is more consumption capacity of propylene at the moment than there is production capacity.

And as a follow-up, one of the things I sort of read in your press release was, in terms of 2015 goals improving your performance on the methanol side of things. Just wanted to get a sense of why they were deflated operating rates to the course of 2014 on the methanol side? Where you see operating roots going for the course of this year, particularly in light of significantly lower methanol prices as well?

Well, you’ll recall that that’s methanol plant was idle for many, many years and we restarted it. So, generally, when you restart units that have been idle for that long, if I am going to discover things as we restarted up and we need to on – and quite frankly, we got this project done quickly and we came back and found that we need group few things and we’ve done that. So we’ll do that here in Q1. Having said all that, that is still an incredibly profitable project for us providing very strong returns and so we have to work through a few of the things last year. For this year, we expect based on our view on natural gas and our methanol prices that running at full rates will be the right thing to do this year given our outlook on margins. And so we expect to run after the first quarter maintenance activity to run at full rates.

Super. Thank you so much, Bob.

Our next question comes from John Roberts of UBS. Go ahead sir. Your line is open. John Roberts of UBS.

Can you hear me now?

Yes.

Congratulations, Bob. Karyn, do we have to worry about foreign exchange at all in 2015 or most of your US exports in dollars and European margins basically adjust to a US dollar equivalent quickly?

I think that’s basically right. So our gross transaction exposure. That essentially, the majority of that will have – 50% of that transaction exposure really has financial offset and the remaining exposure is generally netted to our FX derivatives. So the exposure to the combination, there are lot of factors. Substantially it’s due to our naphtha purchases in Europe. Our ID business also played well and our imports in US in US dollars and euro purchases, sell-through euro entities in dollars and MTBE, styrene, butane feedstocks. And it is in our catalyst – the business which is in US dollar related for dollar euro companies. So though we got a total FX exposure, half of that is internal offsets and remaining that net amount is hedged externally. We do have translation impacts in the balance sheet. And we always see that, but that related to another P&L impact that does with other comprehensive income. And as we are closer to getting the number this year, it’s only 1.38 to 1.21 year-over-year, so there is about 639 reduction on shareholders’ equity, but that is surely with balance sheet only. And then on a translation perspective, it will turn another ratio play out. But year-over-year to 2014, we really didn’t have any significant impact. So, we were at 1.33 for the average to the last year, be 84 and then 1.33 in 2014. So overall, the translation on a P&L’s perspective, there was very minimal impact.

Thank you. A – Doug Pike: I think we have one – take one more question. We are probably little bit over time. It's being Bob's first opportunity to speak to you, but I think we’ll take one more question.

Our last question comes from Nils Wallin of CLSA. Go ahead sir. Your line is open.

Great, thanks for taking my question. Good afternoon. I know, Lyondell has been pretty - saying that there is some expectation in all the new builds and the US could get pushed out just because of the normal length of time it takes to build these plants. Now with more oil, there might be less desire to push these plants as quickly as possible, bring them up but on the offset you’d obviously have probably lower labor cost due to all the energy CapEx reductions. What's your view today of when these plants come on-stream? Are they delayed? Are they is it the same? Just - some color there would be appreciated thanks.

Good afternoon, Nils. Well, there are several projects that are already underway in terms of construction. And so, something like seven crackers, and likely those will be built and whatever the pace the projects progress at, it’s likely the second wave of project that were announced which will be revisited. But I think the seven or so that are under construction or will be soon very likely to come up.

Got it, and then just sort of, I guess a little bit of a technical question on the difference between ethane and propane cost, so historically propane was sort of thought as the ceiling to the ethane price once you net it out all the co-product credits. Now it's below ethane. So curious as to why and the projection is certainly for to be, to continue to be below ethane for the reminder of the year. So, curious as to why you think ethane will correct down to return to its historic relationship and what might be presenting that?

Well, short term you get these kind of dislocations based on inventory or maybe specific logistics-related constraints. But longer term, or later on this year, I would expect that propane we’ll start pursuing, and on the outset you remember that ethane too much below it’s and that’s been trading right around its true value. So, I think the two will completely open, I don't know if propane will really remain more advantaged that ethylene through the entire year, that remains to be seen. The good news is that both are in abundant supply and therefore we should see an advantaged feedstock position here in the US for this year.

Got it, thanks very much.

All right, well, thank you for all your questions and I’d like to just close with a few comments. First of all, we had a banner here in 2014 and I am not going to repeat all of the operational accomplishments and so on, but, it’s worthy of highlighting that we returned $7.2 billion to shareholders in 2014. We have a regular dividend and share repurchase program, we’ve remained committed to the share repurchase program. We have a very strong and flexible balance sheet which will be durable really in any environment and we’ll support our strategy going forward. While I am new to the CEO role, I am not new to the company and I am certainly not new to the industry. You should expect that in the near tern our focus is going to continue to be our safety and operational excellence and cost management and delivering on all these growth programs we have in front of us. Longer-term, we’ll continue to build out strategy and align with the Board and the kind of things we want to do to the extent that we can discuss some of that with you, we’ll do so at our Investor Day on April 29. So, thank you very much for your continued interest in our company and we’ll look forward to you next time. Thank you.

This concludes today’s conference. Thank you for your participation. You may now disconnect.