Lyondell Basell 2Q17 Earnings Call Notes

Bhavesh Vaghjibhai Patel – LyondellBasell Industries NV

Operating rates at 95-99% of capacity

“Slide 5/6 illustrates our strong second quarter performance, with operating rates of 98% of nameplate capacity across our U.S. and European ethylene crackers. Our polyethylene production operated at 95% of capacity. And I’m particularly pleased to report the rebound in performance at our Houston refinery, where crude throughput rates increased to an average of 99% of capacity during the second quarter.”

Ehtylene prices have decreased

“During July, spot ethylene prices have decreased due to strong industry supply and increased inventories. After relatively light spring maintenance season, consulting services are predicting a return to typical levels of per-planned maintenance for September and October. Polyethylene markets are balanced, while polypropylene demand is relatively strong. No major maintenance is planned in our olefin system for the remainder of 2017.”

Markets are still relatively balanced

“Yes, I think markets are still relatively balanced here in the U.S. and globally. And so, as evidenced by initial reports of the rollover on polyethylene price here in July, I won’t hazard a forecast on the future. But I think we’re going into the second half of the year with pretty balanced markets and demand growing at a good pace globally. So I think that whatever lies ahead we’re going into it with very strong operating rates and very constructive markets.”

Lyondell Basell 3Q16 Earnings Call Notes

LyondellBasell Industries NV (LYB) Q3 2016 Results
Bhavesh Vaghjibhai Patel

Less scheduled maintenance in 2017 than 2016

“Turning to slide 14, I’d like to outline how LyondellBasell’s heavy maintenance schedule for 2016 compares to our relatively light plans for 2017. We typically have turnarounds at only two crackers in a given year. However, during 2016, we had four major cracker turnarounds and significant derivative turnaround activity. We also expanded the capacity of our Corpus Christi cracker by 800 million pounds. With this hard work completed during 2016, we have no cracker turnarounds scheduled during 2017.”

Continue to see strong demand growth

“The large population’s GDP growth and consumption trends seen in China, India and other emerging economies will continue to drive these markets towards higher consumption. We believe that polyethylene and polypropylene can maintain the 4% to 5% demand growth that we have seen for these products over the past 25 years.”

World demand has outpaced capacity additions

” world demand has outpaced capacity additions by an amount equivalent to three crackers, primarily due to growing demand in China. As a result, global markets have tightened. Even with the eight cracker equivalents forecast to come online in the United States by 2021, the forecast is relatively balanced over the next five years.”

Our sense is that Asia demand is growing

“Okay. Well, I think we’ll have to kind of see how demand develops and how oil prices develop, and so on. But certainly, Asian demand is growing to the extent that new capacity likely will be exported. So our sense is that, certainly through the first half of the year there’s not a lot of new capacity, more of the new capacity which is in the second half of next year. So we’ll just have to see how that develops. But our sense is that Asian demand is growing at a pace where that production will be needed overseas.”

Douglas J. Pike – LyondellBasell Industries NV

Ethylene prices more regional, polyethylene more global

Exactly. And, P.J., if you remember that the ethylene prices are much more regional, while polyethylene prices are more global in terms of how they are set. So spot price movements and the spot market is very thin in ethylene, so that has some influence.

Miscellaneous Earnings Call Notes 4.28.16

General Electric (GE) Jeffrey R. Immelt on Q1 2016 Results

Saw improvements in our business in China

” We’re in the midst of a challenging Oil & Gas market. However, we are things sustained strength in Aviation and Power markets. Healthcare is rebounding. I was in China last week and saw improvements in our business. Most of the portfolios are strong and we’re delivering. There’s plenty of business out there to achieve our goals.”

McDonald’s (MCD) Stephen J. Easterbrook on Q1 2016

All Day Breakfast came out hard and then settled but is still exceeding expectations even at the settled stage

“we clearly came out of the tracks hard with All Day Breakfast. It exceeded our expectations through the launch phase, and then hit a more settled rate. Frankly, it’s still exceeding our expectations through the settled stage as well. So we’re incredibly encouraged.”

Honeywell International (HON) David M. Cote on Q1 2016 Results

I’m hopeful for a rebound but we’re not going to count on it. Europe did better than expected

“I’m hopeful that there is a global economic rebound, but we’re certainly not going to count on it. If there was any region that surprised me in this past quarter, it was Europe did a lot better than I expected. I don’t know if this is just a one-time bounce or something that’s going to stay consistent, but I was quite encouraged by seeing that. It was a nice surprise. I mean, we’ll see how much that turns into something. But right now, we’re going to stay with this whole idea that this is a slow growth global environment and it’s just the smart way to plan. And you see that reflected in how we are forecasting the second quarter and how we’re forecasting the total year. I just don’t think there’s any percentage right now on being bullish about it. If it happens, great. I think there’s a greater chance it happens than there is that it doesn’t. But that being said, I don’t see any percentage in being bullish about it.”

Flight hours is the most important driver of the aerospace cycle

“I’d say it comes back to flight hours again. They fly a lot. And that’s really – I’ve said many times the biggest Aerospace driver we have is flight hours. And it’s not tied to OEM schedules or airline profitability or any of that generally. The long-term trend is going to be driven by flight hours. If they’re flying, everything ends up working out. Whatever short-term disruptions or benefits, whatever you’re seeing, over time flight hours ends up being the driver. Flight hours continue to climb, and that’s a good phenomenon for us.”

LyondellBasell Industries’ (LYB) CEO Bob Patel on Q1 2016 Results

Olefin and polyolefin markets are tight

“Looking forward, we see olefins and polyolefins markets remaining tight during the near-term. There are heavy turnaround schedules in both the US and Asia. The recent rise in crude oil prices provides tailwinds for both pricing and demand, as customers no longer feel incentives to delay purchases, in hopes of future declines in product prices.”

Procter & Gamble’s (PG) Q3 2016 Results

Jon Moeller

It’s not enough just to gain market share

“The reason that we’ve talked a little bit about not following share out the window, we can be gaining shares in categories that are declining, and that’s not going to grow our top line. What we need to be doing as innovation leaders in our categories is getting the market growing through that innovation and gaining a share of that growth.”

Twitter’s (TWTR) CEO Jack Dorsey on Q1 2016 Results

Acquisitions have been critical in creating value for the internet sector for two decades

“The first point I would make is that acquisitions have been critical in creating value for the Internet sector, consumer Internet sector over the last two decades. Many of our competitive peers have bought assets at very early stages that have resulted in billions of dollars of value and Twitter has been the same”

Goal is to be one stop shop for advertising

” At end of the day, our goal is to be a one-stop shop for advertising. And having both owned and operated inventory, third party inventory and ad text stock that can serve both of those constituencies is really critical.”

United States Steel’s (X) CEO Mario Longhi on Q1 2016 Results

Favorable trade case results are boosting the domestic steel industry

“Last year, we successfully advocated for the passage of the Level Playing Field Act in the trade adjustment assistance bill. This represents the first time in decade that U.S. trade laws were revised and clarified to align with the original congressional intent. The interpretation and enforcement of these new laws has already been reflected in preliminary determinations in the three major trade cases we elected to pursue with other steel companies in 2015. Yesterday, we announced another step in our efforts to have the rule of law enforced. We filed a complaint with the U.S. international trade commission to initiate an investigation under section (337) of Tariff act of 1930 against the largest Chinese steel producers and their distributors. The 337 complaint alleges illegal unfair methods of competition and seeks the exclusion of all unfairly traded Chinese steel products from the U.S. market. I would like to emphasize that the remedy under section (337) is not a tariff, it is an exclusion of products from the U.S. market. Our complaint alleges three clauses of action, the illegal conspiracy to fix prices, the theft of trade secrets and the circumvention of trade duties by false labeling.”

Third Point 2Q16 Investor Letter Dan Loeb

One of the most catastrophic periods of hedge fund performance since this fund’s inception

“Unfortunately, many managers lost sight of the fact that low net does not mean low risk and so, when positioning reversed, market neutral became a hedge fund killing field. Finally, the Valeant debacle in mid-March decimated some hedge fund portfolios and the termination of the Pfizer-Allergan deal in early April dealt a further blow to many other investors. The result of all of this was one of the most catastrophic periods of hedge fund performance that we can remember since the inception of this fund”

Volatility is bringing excellent opportunities

“As most investors have been caught offsides at some or multiple points over the past eight months, the impulse to do little is understandable. We are of a contrary view that volatility is bringing excellent opportunities, some of which we discuss below. We believe that the past few months of increasing complexity are here to stay and now is a more important time than ever to employ active portfolio management to take advantage of this volatility. There is no doubt that we are in the first innings of a washout in hedge funds and certain strategies. ”

Texas Instruments’ (TXN) Management on Q1 2016 Results

Kevin March

Inventories were up because we expect higher shipments

“We expect that material is going to ship over the balance of the year. And between the increased shipments in 2Q and the shipments of that personal electronics material, we’ll see the days of inventory drift back down comfortably inside our model, very similar to what we saw last year. If you go back and take a look last year, we were also a little bit higher in the first quarter, anticipation of second quarter growth, and then days drifted down as we came through the year.”

Dave Pahl

Weakness came in as expected but broad based strength in other areas

” that portion of demand where we saw weakness came in about as we expected. The strength was more broad-based, and we continue to, obviously, to see strength in automotive and then the improvement in industrial and comms equipment. So, very, very broad-based strength that we saw. So the second part of your question was sequentially. What we saw from the trends there, no surprise that automotive remained very strong, and it was driven by infotainment as well as the hybrid electric and powertrain systems. Industrial, again we had growth across almost every sector inside of industrial. Personal electronics down, with most sectors declining”

Group 1 Automotive’s (GPI) CEO Earl Hesterberg on Q1 2016 Results

Vehicle inventory stood at 85 days vs 69 days in 1Q15

“The U.S. new vehicle inventories stood at 31,400 units which equates to an 85 day supply compared to a 69 day supply for the first quarter of 2015. Luxury brand inventories drove much of the year-over-year increase. We have adjusted orders and expect to bring inventory closer to our target level of 60 days by the end of the second quarter. ”

Oil companies still have a long way to go in restructuring their balance sheets for what’s happened to oil prices

“our new vehicle sales in Houston, we held a 1% decrease for the quarter, so we’re fighting it pretty well, but I attend a lot of meetings and I’m various Boards with these oil company executives and they still have quite a way to go in restructuring their balance sheet and that’s what happening now.”

Hasn’t been a big consumer confidence problem outside of energy impacted markets

“No, I don’t really see weakness outside of the energy belt. David I’d say people are reacting to the fact just not growing as significantly as it had been in recent years. So when it’s flat without it only grow 1% or 2% or 3%, I think it feels for a lot of people like it’s just very slow. But I wouldn’t say I have seen any big consumer confidence crisis anywhere outside of the energy impacted market.’

AGCO (AGCO) Martin H. Richenhagen on Q1 2016 Results

2016 farm income expected to remain below 2015 levels

“estimates call for 2016 farm income to remain below 2015 levels. In North America, relatively young machinery fleet and dealer efforts to reduce inventory levels have contributed to continued decline in industry sales through the first quarter. Weaker demand from the row crop sector resulted in significantly lower industry retail sales of high-horsepower tractors, combines and sprayers.”

LyondellBasell 4Q15 Earnings Call Notes

LyondellBasell Industries NV (LYB) Bhavesh V. Patel on Q4 2015

Low priced feed and industry outages will be constructive for markets we serve

“we believe that we continue to benefit from abundant supplies of low priced feedstocks and from solid underlying demand for our products. Additionally, we anticipate that the heavy industry outage schedule for the first half of 2016 will continue to be constructive for the markets we serve.”

Global ethylene operating rates are probably 80-90%

“Global operating rates, you know our sense is that they’ve been averaging in the high 80%s to about 90%, excluding some of the unplanned outages. So, last year in the second quarter they probably drifted a little lower. I think in 2016, markets are going to be relatively balanced. In 2015 demand growth for ethylene nearly matched supply growth for ethylene. So market conditions look very similar. I think the thing we’re going to have watch is the level of unplanned outages that created the tight markets in second quarter.”

My sense is that customer inventories very are low

“throughout last year, as oil price declined and there was uncertainty about global economic growth, we saw our customers depleting inventory especially downstream of our polyolefins business. By the end of the year, our sense was, they were buying only what they needed and they were buying kind of one week at a time. So anecdotally, I would say that inventories are very low and we see even in the last week of January, when we saw oil prices move up a little bit, we had a certain sudden rush in terms of demand, both in Asia and in Europe. So my sense is inventory is very low.”

Polypropylene is a very tight market

“in the case of polypropylene, we see a very, very tight market, there is really not any new supply coming here in the U.S. So, I would expect that to continue. We’ve had years of fairly modest margins. And as you know, our company has significant leverage to polypropylene. We’re the largest polypropylene producer in the world. And so we’re very constructive about polypropylene.”

Customers not building inventory despite shutdowns

“I think, their sense is that the product is very available. That’s usually been the trend. The only time John that I have seen customers build inventory is when we had a couple of bad hurricanes come through Houston, I think that spooked people. And so prior to hurricane season they build for a year or two. But generally they don’t do that, we haven’t seen that.”

Flexibility of feedstocks is key

“I think flexibility is going to be the key and so we are investing incrementally to increase our flexibility to crack more propane, a few other feedstocks. And so, that’s what we want to retain longer-term. It is difficult to call two years, three years from now whether it will be ethane or propane. We want to make sure that we can crack meaningful amounts of the big feedstocks.”

I’m pretty constructive about demand growth

“I think demand is still – is developing quite nicely. Again as I mentioned earlier in one of the questions, we’re seeing buying activity pick up as we move towards the second half of January. And I would expect that this year we ought to see similar growth to last year. And frankly, if I’m right about lower inventories downstream, the higher – as the oil price incrementally stabilizes or moves up, we should see inventory replenishment downstream, which will add to demand growth year-over-year. So frankly, I’m pretty constructive about polyethylene growth here going into 2016. Frank, downstream, our customers don’t have a lot of inventory globally.”

Expect seasonal restocking in the March, April timeframe

“one thing that I think about is the balance between supply and demand, whether it’s regionally or globally and my sense is that we still have fairly balanced markets. While coming into a March, April, May timeframe, it will bring a seasonal uptick in demand, likely inventory restocking. I would imagine at some point oil price will reach some kind of a bottom and if that happens it will bring buyers back.”

Despite lack of confidence last year we still had demand grow more than 4%

“We’ve had – if you think about 2015, we had a year where not only there was lack of confidence on oil price, but also there were questions about economic growth in the U.S., and in China, and we are destocking, despite that polyethylene demand grew more than 4%. So that’s what makes me constructive.”

Lyondell Basell 3Q15 Earnings Call Notes

LyondellBasell Industries NV (LYB) Bhavesh V. Patel on Q3 2015 Results

Rebalancing in Olefins markets in 3Q as industry came off of outages

“The third quarter was characterized by rebalancing in both Olefins and Polyolefins markets, as the industry came off the high rate of outages that defined the second quarter. Volume continued to remain at second quarter levels, but margins in September closed lower than where they started the quarter. To this point, October margins, as forecasted by IHS, are located on the lower-left side of slide 10, have come off of the levels of the third quarter.”

Continue to see balance ethylene markets

” Overall, we continue to see ethylene markets that are balanced.”

The force majeure remains in polypropylene

“the force majeure remains in place in polypropylene. As we look ahead into the first half of 2016, we remain encouraged by what we see. The next several slides help explain our optimism. First, as shown on slide 14, the current oil-to-gas ratio remains healthy and well above the pre-shale average. This represents the U.S. shale advantage, and we remain well positioned to continue benefiting from it. Along with this cost advantage, we continue to benefit from an abundant supply of natural gas and NGLs.”

Demand for our products remained steady

” Demand for our products, approximately two-thirds of which go into consumable end users, remained steady. Our products are relied upon for fuel, food packaging and other diverse everyday end uses.”

Global demand has grown every year for 25 years except for in 2008

“In the past 25 years, global polyethylene and polypropylene demand has grown year-over-year in all but one year, 2008, and we know how severe that recession was.”

Operating rates should be similar in 2016

“Operating rates in 2016 are projected to be very similar to 2015, with ethylene effective operating rates, again, above 90%”

May see supply tightness in 1H16

“As the fourth quarter trends lower due to seasonality, we typically see a demand increase during spring and restocking occurs. This pickup in demand coincides with planned maintenance and we could again see another period of supply tightness in the first half of 2016. It would not be unreasonable for the first half of 2016 to look similar to the first half of 2015.”

Ethane demand increased during Q3 as propane fell out of favor

“Our sense is that ethane demand increased as Q3 progressed, as propane fell more out of favor, propane prices rising through the quarter, so demand increased and I think the rejection rates that you quoted are in line with our views, 400,000 to 500,000 barrels a day. ”

Weak Euro good for European competitiveness

“a weaker euro, lower naphtha price does increase competitiveness of Europe. So, our end use customers are more competitive in export markets, for example, for film. So, we’ve seen, polypropylene demand grow very solidly year-over-year, and polyethylene is incrementally higher year-over-year. I think those are all the factors and with lower oil price and weak euro, we expect that Europe should do pretty well.”

I think inventories are average at best. Customers aren’t buying ahead.

“as we sit here today, Arun, I think inventories are average at best, maybe below average in the value chain. We see buyers only buying what they need. We don’t see them buying ahead. Seasonally, as I mentioned in my remarks, that we tend to see demand decline in November/December, fourth quarter seasonal effects. Easily, we see spring pickup, not only in demand but then restocking of inventory to meet that higher level of demand”

Polypropylene has been underinvested but we’re seeing growth now

“Polypropylene has been underinvested for the past few years, especially in the U.S. and in Europe. And this is the first year we’ve seen really significant growth, globally, in polypropylene. A part of that could be that polypropylene price has come down some and it’s more competitive with ethylene, especially in the U.S. But we’re definitely seeing demand growth in polypropylene”

Styrene demand had been shrinking for some time

“in terms of supply/demand for styrene, as you know, it’s been very underinvested for years. In fact, demand was shrinking for styrene and derivatives for some time. We now see demand increasing year-over-year. It’s been underinvested for quite a long time.”

Spot ethylene is a very thin market

“spot ethylene market accounts for about 10% from the total volume produced in the U.S. Now that includes both paper and physical trades. If you just look at the physical volume, it’s like 5% to 7% of the total production, so that’s quite small. It’s a very thin market in the end. And so, near-term price movements, like we saw in the second half or the third quarter, those can be influenced by very local logistics-type issues, different producer issues, or whatever that might be. But I don’t see this as being something that’s structural.”

Oil prices should probably come up

” It’s difficult to predict where oil price will go on the near term; but longer term, certainly. There’s a lot of production in the world that’s underwater at $45. So, my sense is that longer term oil price should come up, it’s a question of when and the time that we take to get there. ”

Polyethylene expansions coming on in second half of next year

“The polyethylene expansions, I think they’re in the second half of next year; most of them are. And those expansions, in the month that they start up, there may be a little bit of disruption, but our sense is if you look at markets at a global basis, there’s enough demand growth based on the trend that we’ve been on to absorb that new capacity.”

Lyondell Basell 2Q15 Earnings Call Notes

Demand for polyolefins has been pretty strong around the world

“I mean at this point we still see demand as being relatively strong. Arun, as you know when we have periods of macro volatility, oil price going up or down, it does impact sentiment. And so there are many inventory cycles that we see throughout the year. But if you step back from that demand has grown through the first half year over year in polyolefins globally in the 3% to 4% range. And the U.S. demand growth has been quite strong as has Asia. Europe I would argue has been constrained in Q2 because of less supply. So we’re generally constructive on demand for the remainder of the year.”

The industry did not have to operate at capacity when the economy was weak, but then as the dollar strengthened, European plants were asked to produce more, which led to more downtime

“When you think about Europe, the last two years, three years have been very difficult years. And it was not really a call on all of the capacity for most of the industry. Now we’ve been running more differentially in terms of operating rates over there. My sense is that since reliability was not at a premium, perhaps some of the maintenance were delayed. And so as demand became stronger this year with the weaker euro and some infrastructure spending coming back in Europe, the units didn’t respond to the higher call on demand. So will that continue? Difficult to say. But my sense is that the units in Europe especially probably weren’t prepared to run at very high rates. In our case – as you know I was over there for a few years, and we maintained our assets to run at full rates. And in fact we did run at full rates for the past two years.”

It’s possible that there will be more investment in crackers, but it takes a long time to realize that investment

“It’s possible. But you have to remember that investment in crackers takes a long time to realize, even if it is maintenance of existing crackers. Because if it’s – if they have to order long lead equipment, it takes months, maybe a year to get some of the equipment in. And then they have to take a fairly substantial outage. So I suspect that if that were to happen structurally, we wouldn’t see a shift until next year some time.”

LyondellBasell 3Q14 Earnings Call Notes

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. Full transcripts can be found at Seeking Alpha

Management change ahead

“After five and half years of non-stop work, it’s time for me to retire. Our supervisory board of directors has established a committee to choose my successor. I will continue to serve as CEO and chairman at the management board to ensure an orderly transition pending the selection of my replacement.”

Not seeing fall in Polyethelene prices with oil as would often be the case

“Polyethylene seems to be quite tight right now and is not available like that. Orders don’t get fill by some of our competitors. We have seen very strong demand, order books are full, so supply-demand in America seems pretty tight. In Europe is that same tightness seems to be there. We haven’t seen cancellation of orders on the fall in crude prices like sometimes happens. It’s seems to be pretty solid. I think because inventory levels have been very, very short in the convertors. So that kind of dynamic the market seems to be reasonably tight still. In Asia, prices have come down a bit but definitely not in line with fall in Naphtha prices at this point. Over time, we will see what happens in supply-demand.”

I think inventories are running pretty lean, watching closely in case theres a destocking, but don’t expect it

“I think the customer inventory should pretty lean. Usually, we see that pattern by now in the month and I have been watching order books very closely would have expected that in Europe first and we just haven’t been seen in the United States because of the number of outages of Ethylene, Polyethylene has been particularly short’

Lyondell Basell 2Q13 Earnings Call Notes

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. The quotes are generally pieces of information that I find interesting or helpful to understanding the company, industry or economy and are not meant to provide summaries of the full content of the call. Other posts in this series can be found by clicking here. Full transcripts can be found at Seeking Alpha.

“Our raw material mix also established a new record as 90% of our ethylene was produced from NGLs. Approximately 70% of the production was from ethane, while propane accounted for 14%. The balance was butane, which became a very competitive feedstock.”

“our Olefins plant operating rates averaged greater than 90%, and our ethylene volumes increased by approximately 9%. These rates were differential to the industry as we were able to take advantage of scheduled and unscheduled downtime at competitors’ facilities.”

“our feedstock mix benefited from processing the substantial percentage of liquefied petroleum gas, or LPG. Approximately 37% of our European ethylene production was sourced from propane and butane at production costs less than naphtha costs. Versus naphtha cracking, we estimate this benefited results by approximately $45 million. It is common for us to process LPGs during the summer months, but the volume and benefit received exceeded historic levels.”

“While second quarter results were strong, this was partially related to industry pricing conventions and significant industry maintenance. Underlying economic fundamentals within Europe remain weak. We should not assume that the relatively strong first half performance will continue into the third quarter. Within this environment, we continue to focus on costs and efficient management of our feed mix.”

” As you know, my longer-term view is that propane will trade more in line with crude oil type metrics on heating value basis, given that you can put it on a boat and transport it. And so I’ve not been as enthusiastic about PDH units as some of our competitors.”

“I’m hoping that our Congress is seeing that the market is so distorted that the ability to blend that extra ethanol into the system doesn’t exist, and it’s hurting consumers at the pump. There’s a good reason to fix it now and save everybody a bit of money and stop this market distortion. It’s also forcing refineries to move product overseas, which is — in a peak driving season with gasoline prices going up, isn’t the right thing for our country. So I’m hoping people pay attention, make some adjustments and we see less of it.”

“Remember, that as we reduce headcount and all, it takes a year or 2 for that to show up because of severance programs in Europe and how that operates versus the United States. So the payouts are a little longer.”

” If we could get a realistic target for ethanol in the blend, refiners would still blend it. There’d still be business conducted, but it’s all artificial at this point in time. And it’s driving up the price for the consumer, and there’s really no point in that…I mentioned there’s too much exporting going on. That’s being driven by misguided regulation.”

Lyondell Basell Analyst Day Notes 3.13.13

This post is part of a series of posts called “Company Notes.”  These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings.  The quotes are generally pieces of information that I find interesting or helpful to understanding the company, industry or economy and are not meant to provide summaries of the full content of the call.  Other posts in this series can be found by clicking here.  Full transcripts can be found at Seeking Alpha.

“sustainable changes in supply/demand and therefore price environments of NGL, chemical chain…[will dominate our discussion]”

“exploration production companies enjoyed strong natural gas prices in 2008 — 2005 and 2008 on a full year basis, and that was the relative peak at least, in the current history. Next bubble is the midstream…MLPs…They have seen the peak of their value in 2007 and 2011…[the] chemical industry [has seen] decline into the trough of the cycle of ’08 and ’09…since ’09, it continuously coming up to the high end profit and so we are far from the peak of the cycle yet”

“when you look at $110 approximate oil out there and you’ve got $3.50 gas out there. Where do they meet? They meet in the export market, that’s where they meet, and that’s where we have competitive advantage. Going forward, if you look at it in 2008, and I really just touched upon that, overall this just highlights a little bit that we don’t think we’re in this up cycle. Yes, operating rates have been very high. Jim did show you what we’ve been operating close to 100%, which is great, and we believe that’s higher than where the industry’s at. But the industry as a whole has been running very high, in the upper 90s, mid to upper 90%. So really, when you look at it from a global standpoint, it’s really a tale of 2 cities. North America and the Middle East, 2 of the cost advantaged positions have done very well and have operated very well. If you try looking at Europe and Asia, not so well and those are the regions where our utilization rates have been somewhat anemic.”

“Sustainable U.S. ethane advantage is a great advantage. Everybody has the advantage. So what are we going to do to compete and be better than the next guy? So we’re executing cheaper, quicker. We’re going to capture that bubble. And as Jim said — I’m saying that lot because he’s right, we’re going to capture that and hopefully get these projects paid for before the other guys turn on the switch.”

“Polyethylene demand only grew by 1% from ’11 to ’12 in China. We’ve come to know Chinese demand growth for polyethylene to be at least at the pace with GDP, if not the multiple of GDP”

“We’ve shuttered 2.5 billion pounds of capacity in Europe.”

“You’ll see some LNG export happen. I suspect it will be fairly modest. I participated in LNG business in the past. And if you look at the global economics of that, as soon as methane prices start to rise a bit, you’ll see a production increase fairly rapidly in the dry gas plays, which will moderate that.”