David Begleiter (Deutsche Bank): Should we expect Q1 level of buyback, 11 million to 12 million shares, to be similar for Q2 and Q3?
Geoffery E. Merszei: We''ve been consistent with how we''ve been executing this program. We''ve been averaging about $400 million worth 10 million to 11 million shares and we also indicated to you early last year that we probably complete program by mid this year and we are on target.
Jeffery Zekauskas (JP Morgan): Can you provide update on when the PIC deal is supposed to close and whether there is any change in financial terms since you disclosed the Memorandum of Understanding?
Geoffery E. Merszei: First of all, we don''t expect any change in the financial terms. In fact, our discussions are taking place as we speak. There have been no showstoppers. The site visits have been completed and we are very confident that we will close the transaction this year.
Mark Connelly (Credit Suisse): Looking at the agricultural chemical unit of the business after we strip out new product launches, can you comment on the impact of pricing and margins on the existing business?
Kathleen C. Fothergill: The new product launches represent a fairly small percentage of the total revenue. Therefore, the margins that you''re seeing for the total segment are principally indicative of what existing businesses are like.
Mark Connelly (Credit Suisse): Are the average prices up low single-digits or mid- single digits?
Kathleen C. Fothergill: The prices are up. In Agricultural Sciences, we have what was reported externally and it was about 16%.
Sergey Vasnetsov (Lehman Brothers): There are some initial positive comments in the industry on extra ethane availability in Kuwait and this could allow more of the highly efficient plants to be built there. In the future, ethane Glycol may even be a cracker. What’s your outlook for the Kuwait 3?
Andrew Liveris: The comments you have been hearing in the public domain relate to the north field. There are many companies, from oil and gas point of view, who are looking at partnering with Kuwait Petroleum. Clearly, our incumbency with PIC, KPC, EQUATE I, EQUATE II opens the opportunity and North Fields present us with basic reasons why this partnership makes enormous sense. We think there is great likelihood of a new project out there in the future but we won''t make any public statements because our partnership cements that.
Sergey Vasnetsov (Lehman Brothers): Can you give us update on the Russian oil project?
Andrew Liveris: The project is doing well. Every joint venture stands alone and the interface between joint ventures is something that we are good at and we''ve been working very hard. We are making sure that as we get closer to the Kuwait deal that very critical projects like the Saudi ARAMCO remain as critical to the company as any project we have out there. In fact, it is probably a defining project in terms of the building blocks for our performance businesses. We will get to the stage this year where everything is on track. The partnership is great. We are in regular dialogue with the Kuwaitis at a team level and we had equal amount of resources pointed at the Saudi project. We are very confident that it will proceed as a county plant.
P.J. Juvekar (Citi): Your unallocated expenses were about $132 million, which was quite low compared to any of the quarters last year. Was there anything particular, like any hedges or any items, which you benefited from?
Geoffery E. Merszei: You''re correct. We''re a little bit out of the range. In the past what we''ve said was that we regularly see quite a bit of movement in that category. What we said, for planning purposes, was that you should use a level of about $150 million to $200 million per quarter, which is a reasonable estimate. Last year, we were above that range because we had some unique items. We had the $40 million that was franchise tax accruals. We also had a special performance-based employee bonus that brought it up to a level of about $257 million. This quarter, we had lower accruals for performance-based compensation and for our employee stock purchase plan because of the lower level of the stock price. We also had some benefit coming from an excellent performance from our insurance operation as well as some hedging gains as you have pointed out.
P.J. Juvekar (Citi): Under your portfolio optimization plan, is there anything that you want to divest, particularly in specialties?
Andrew Liveris: We have a business portfolio optimization group for a reason, which is the commoditization of certain businesses and assets including the performance businesses. That obviously speaks to what we''ve done in the last several years, which is 92 factories shut down, 42 sites exited and 38 businesses sold. You''d expect us to continue to prune from the bottom as these new feedstock hydrocarbon commodity realities become alive. We''re going to get our joint venture formed. Once that joint venture forms, that creates an interesting future possibility at home for some of these pseudo-commodities and we don''t dismiss the Saudi ARAMCO opportunity. You can expect the company''s asset-light strategy to keep coming to life in terms of how we become number one in the world in the area of competitiveness especially given the new input costs.
Peter Butler (Glen Hill Investments): Is it correct that you are expanding the scope of the Kuwait joint venture in your negotiations?
Andrew Liveris: The opportunities to do more are clearly top of mind for both of us. We do have job one, which is close to be announced, as promised in our early announcements and both of us are very committed to doing that. The due diligence is working perfectly but your notion of doing more will be top of mind and there is some good logical fits that can occur. Creating this powerhouse of a joint venture presents this unbelievable opportunity to marry a state-owned feedstock-rich company that has global expansion in its sites with a petrochemical franchise like ours.
Peter Butler (Glen Hill Investments): Your statement in the guidance for Q2 is puzzling especially given the background that your Q4 earnings were down and Q1 was a little lower and yet you expect the Q2 to be another great quarter. Does your company have a new standard for earnings now and the ambition is to have a small decline?
Geoffery E. Merszei: These comments are in the context of the environment that we were working. When you face increased hydrocarbon energy costs in one quarter, it equals a higher cost, which is closely equal to entire of the prior year and then ending up with these type of results with an economy that is highly cautionary in the United States, in that context, we have done extremely well.
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