David Stasse - Vice President of Treasury and Investor Relations Chris Pappas - President and Chief Executive Officer.

David Begleiter - Deutsche Bank Ryan Berney - Goldman Sachs Hassan Ahmed - Alembic Global Frank Mitsch - Wells Fargo Security Dan Rizzo - Jefferies Duffy Fischer - Barclays Eric Petrie - Citi Roger Smith - Bank of America Merrill Lynch Matt Andrejkovics - Morgan Stanley.

Good morning, ladies and gentlemen, and welcome to the Trinseo Fourth Quarter and Full Year 2015 Financial Results Conference Call. Turning to Slide 2, we welcome the Trinseo management team; Chris Pappas, President and CEO; and David Stasse, Vice President of Treasury and Investor Relations; who will be conducting the call.

I will now hand the call over to David Stasse..

Thank you, Liz, and good morning, everyone. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time.

[Operator Instructions] The slide presentation for today's call has been posted on the company's Investor Relations website, in the webcast viewer, and with the financial results press release by means of a Form 8-K filing with the Securities and Exchange Commission.

A replay of the conference call and transcript will be archived on the company's Investor Relations website shortly following the conference call. The replay will be available until March 3, 2017. Our disclosure rules and a cautionary note on forward-looking statements are noted on Slide 2.

During this presentation, we may make certain forward looking statements including issuing guidance and describing our future expectations. We must caution you that actual results could differ materially from what is described or implied in these statements.

Factors that could cause actual results to differ include, but are not limited to factors set forth in our Annual Report on Form K under the item 1A Risk Factors. I will now hand the call over to Chris Pappas..

Thank you, Dave, and good morning, and thank you all for joining us. I’ll start Slide 3. I’d like to highlight the four key points you should take away from this call. First, we had $133 million of adjusted EBITDA excluding inventory revaluation in the fourth quarter. We achieved this absent any significant fly-up styrene margin.

This is above the guidance of $110 million to $120 million that we provide during our third quarter call. Second, we had record full year adjusted EBITDA excluding inventory revaluation of $550 million in 2015.

I will describe later the drivers of the significant year-over-year EBITDA improvement we achieved and why we believe it is sustainable going forward. Third, our current first quarter outlook is 125 million to 135 million of adjusted EIBTDA excluding inventory revaluation.

We expect to achieve this level of profitability with styrene margins that are roughly flat with Q4, again including no significant fly-up styrene margin.

Now, let me take a minute to explain how Trinseo defines fly-up, which we’re using as a guide and our effort to separate the amount of styrene margin from unplanned outages rather than structural drivers. If you look at the gray bars we show every quarter on Slide 13, there are periods where styrene margin rises dramatically.

We define fly-up by the incremental rise in margins attributable as best as we can estimate to the influence of unplanned outages during these periods. Of course, the margins in these periods from structural drivers such as higher operating rates or planned outages are considered just that.

Structural margin related to rising operating rates and not fly-up margins. And finally, we are increasing our full year 2016 adjusted EBITDA guidance to a range of $510 million to $520 million. This assumes essentially no impact from inventory revaluation or from fly-up styrene margin.

And we have had fly-up styrene margin contribution in each of the last three years. One other point, this 2016 guidance is not a drop from our 2015 performance. I will explain more on this later. Now please turn to Slide 4. In world like today, there are many macro and company specific economic dynamics in play.

I believe it is critical for investors to really understand the construct and drivers of individual companies and this is particularly true in the chemical sector. Think about a few of the dynamics that are in the news today.

The Chinese economy is slowing, the energy complex collapsing, mining and material’s dropping in value, consumer essential is shifting, diversity of drastic dynamics, debt markets in turmoil. I’ll stop there, I think that’s enough.

But what is really going on and how it really impacts Trinseo, it is what’s relevant for our discussion today, not which is in the headlines. Let’s start with China. As I’ve said before, China has been slowing for about 18 months now but the key is how much and where.

Construction and infrastructure, mining and materials, coal and related activities are all way down in China but other areas are not.

From Trinseo’s perspective, only about 13% of our revenue is to customers in China and we sell primarily into consumer oriented markets such as appliances, automotive, consumer electronics and other markets that are not experiencing that much of a slowdown.

In addition, our customers in China often export to worldwide customers, which is where the demand dynamic for those products is relevant. Therefore, Trinseo is not experiencing a new dramatic slowdown in China.

Please note, about 75% of our revenue is in Europe and North America, mostly to consumer oriented markets and we see these economies and markets is generally healthy.

What about rapidly dropping oil? This does not play a major fact on our profitability because we are not a company that has a product mix where the relative value of oil and gas based Feedstocks is a significant issue.

However, we are a company where our core margins on our products and performance materials stay relatively stable as we pass through raw material cost for customers either by via ongoing price changes or contractual indexes.

In addition, our margins in Basic Plastics & Feedstocks are driven by the supply demand dynamics and operating rates of products like styrene, polystyrene, polycarbonate and ABS. These operating rates are all improving by some demand growth with limited supply added in the future.

Across all Trinseo but primarily in our Performance Materials division, we partner with customers to develop differentiated value added materials, including products for automobiles, performance tires, consumer electronics, medical devices, carpet and LED lighting.

Our products meet our customers’ needs for both ecstatic and function and thus can often command premium pricing and growth. Trinseo has an enviable balance sheet with a net leverage ratio of 1.6 times at the end of 2015 and interest coverage of 6.5 times at our current run rate of interest.

Our liquidity at the end of the year was $866 million including cash of $431 million and we have no maturities until 2021. So as you can see, the currently debt market situation is not an issue for Trinseo either. Now please turn to Slide 5, where I would like to call out some highlights from the year.

I mentioned our record financial performance for the year which marks a step change in profitability for the company in comparison to prior years despite a significant currency headwind as the euro weaken by more 15% versus 2014.

The Performance Material division continues to be steady, delivering $284 million of adjusted EBITDA excluding inventory revaluation. However, the Basic Plastics & Feedstocks division saw a significant step change increase in EBITDA due to several factor in most of which we believe are structural and we’ll continue more on this later.

In May, we refinanced the company’s balance sheet with the mix of U.S. dollar denominated turmoil as well as dollar and euro denominated unsecured bonds, reducing our annual cash interest expense by $37 million at current rates.

In the first quarter of 2015, we completed a rebranding process to change our operating name and legal entities from Styron to Trinseo. We believe Trinseo captures our commitment to deliver innovative and sustainable materials that provide a transit value to our customers’ products.

One of Trinseo’s annual objectives is to focus on environmental health and safety. In 2015, more than two thirds of our manufacturing plants and R&D locations achieved our triple zero are no injuries, no spills, or no process safety incidence. We are very proud of this performance. It’s an important part of who we are as a company.

Now let’s look at the details of the fourth quarter performance in Slide 6. Fourth quarter adjusted EBITDA of $116 million included an unfavorable inventory revaluation of $17 million. Excluding this, adjusted EBITDA was $133 million.

We also reported $1.11 of adjusted earnings per diluted share which was negatively impacted by approximately $0.28 of inventory revaluation. Full year adjusted EBITDA was $492 million and adjusted EPS was $4.59. These full year numbers were negatively impacted by $58 million inventory revaluation or $0.94 per diluted share.

So excluding inventory revaluation, we had $550 million of adjusted EBITDA and $5.53 of EPS in 2015. Now let’s turn to Slide 7. In the third quarter, we accounted cost reduction measures in our Latex segment including a reduction in asset footprint with the closure of our Latex plant in Gales Ferry, Connecticut.

This decision was in response to continuing declines in the coated paper market in North America and as part of a program, which we believe will reduce cost in the Latex business by $5 million run rate by end of the second quarter.

This capacity reduction in North America combined with other recently announced capacity reductions has increased utilization rates. We announced North American price increase for Latex and have seen early success in implementing them.

We believe these actions will prove our margins in Latex and enable us to continue to invest in innovative and cost competitive products. Turning to Slide 8, sales volume in Synthetic Rubber was an all-time high in 2015. Overall sales volume grew 6% over 2014 led by 24% growth in enhanced SSBR.

In the fourth quarter, we completed the conversion of our nickel PBR plan to neodymium-PBR a more advance grade for use in high performance tires. We are currently try reformulations and expect to commercialize these products late this year. Turing to Slide 9, we had record performance in our Performance Plastic segment.

This was driven by 9% volume growth in our higher margin Consumer Essential Markets as well as some modestly higher margin and automotive. In automotive, we are seeing success in winning new business in exterior and semi-structural markets which typically carry higher margins in our interior automotive business. Now let’s turn to Slide 10.

We also have record performance in 2015 in our Basic Plastics & Feedstock segment, which had adjusted EBITDA of $327 million. Adjusted EBITDA excluding inventory revaluation for 2015 was $356 million which was $277 million higher than 2014.

We view most of the improvement in our Basic Plastics & Feedstock segment has structural in nature and driven by the improving supply demand dynamics of these products. I’d like to talk more about the drivers’ increase, to give some context to support our view of 2016.

Now turning to the top of Slide 11, which shows the $277 million per year year-over-year improvement and adjusted EIBTDA, excluding inventory revaluation for the Basic Plastics & Feedstock segment, let’s begin with this a little bit.

More than three fourth of the $277 million this improvement came from structural improvements and polycarbonate, styrene monomer and styrenic polymers. Let me explain it each in a bit more detail. First, our polycarbonate business implemented large and sustainable restructuring savings of approximately $30.

In addition, polycarbonate margins grew steadily to the first three quarters 2015 as operating rates rose to over 80%. These drivers resulted an approximately $100 million of year-over-year improvement in polycarbonate and to the Basic Plastics & Feedstock segment. Second, let’s look at the impact of styrene.

We estimate that about $110 million of the segment’s $277 million EBITDA increase was from year-over-year styrene improvement including Americas Styrenics. But of this, only about 60 million was from fly-ups in styrene margins.

Finally, the balance in the year-over-year positive changes was from structural improvements in styrenic polymers including Americas Styrenics polystyrene. So in summary, there have been structural changes in polycarbonate, styrene monomer and styrenic polymers that we believe will continue to benefit Trinseo into 2016 and beyond.

Now let’s turn to Slide 12 for discussion on cash and liquidity. Free cash flow for the quarter was $117 million inclusive of a $37.5 million dividend from Americas Styrenics, $30 million of capital expenditures and $30 of cash interest payments. At the end of the quarter, we had record liquidity of $866 million which included $431 million of cash.

For full year 2015, we have free cash flow of $247 million or $316 million excluding the $69 million for the call premium associated with our second quarter financing. As expected, our net leverage continued to decrease, due to higher EBITDA and cash generation and was 1.6 times at the end of the year.

Now, I’d like to discuss the performance expectations for the first quarter of 2016. Please turn to Slide 13 for discussion on styrene monomer. These are same charts we’ve shown in the past with Western Europe styrene margin data in the top chart and Asia data in the bottom chart.

You can see that fourth quarter margins declines from the third quarter as expected. However, we were able to offset some of this decline with lower utility costs, better production efficiency as well as some opportunistic styrene sales which helped our fourth quarter results.

Now looking at the first quarter of 2016, we expect overall styrene margins to be slightly up from the fourth quarter. And as stated earlier, there is no styrene fly-up margin including in this guidance. In addition, we are optimistic that we’ll continue to see higher margins as these plan turnarounds continue into the second quarter.

Trinseo inventory revaluation for the first quarter is expected to be slightly unfavorable due to some continue drop in our key feedstocks, Benzene and Butadiene, but not as much as we saw in the fourth quarter of 2015.

So with that backdrop for styrene margins and inventory revaluation, let’s move to Slide 14 and discuss our view of the first quarter of 2016. We expect sequential improvement of $5 million to $10 million for the Performance Material division in the first quarter.

Latex adjusted EBITDA is expected to be approximately $20 million to $25 million as we began to see the effects of cost action we announced last year as well as price increases. Synthetic Rubber is expected to be approximately $25 million, an improvement over the fourth quarter due mainly to higher volume.

We believe Performance Plastics will improve to about $25 million to $30 million as margins increase due to lower raw material cost. Moving to Basic Plastics and Feedstocks, we believe the first quarter will be between $75 million and $85 million of adjusted EBITDA.

And excluding inventory revaluation, this is in line with the fourth quarter and again includes no contribution from fly-up styrene monomer margin. Corporate expense should be about $20 million for the quarter and system with recent levels.

In total, we expect to have another strong quarter delivering between $125 million and $135 million of adjusted EBITDA assuming minimal impact from inventory revaluation and no styrene monomer fly-up margin. This translates into an EPS range of a $1.30 to a $1.45 per share. Now let’s look at Slide 16 for our guidance for the full year.

Based on our current view, we are raising our guidance for the full year to $510 million to $520 million of adjusted EBITDA. This assumes minimal inventory revaluation impact in 2016. We believe that we will be able to grow adjusted EIBITDA in Performance Materials by at least 5% year-over-year.

In Basic Plastics & Feedstocks, our guidance assumes a small improvement in styrenic polymers and polycarbonate margins with fly-up styrene margins upside to this guidance. As $510 million to $520 million of adjusted EBITDA, we expect adjusted EPS of $5.25 to $5.45 per share. We also expect to generate significant free cash flow.

From modeling purposes, we anticipate $75 million of cash interest, $60 million of cash taxes and $150 of capital spending in 2016. Let’s just do a little bit of math. Using the midpoint of our 2016 guidance at $515 million, this would imply about $230 million of free cash flow before working capital impact in 2016.

On Slide 16, I think it’s a very important slide because it shows the build to the midpoint of our 2016 guidance. From our 2015 adjusted EBITDA excluding inventory revaluation.

Just to be very clear, overall we are guiding to about $25 million year-over-year increase from 2015 on an equivalent basis ,that basis being excluding inventory revaluation and excluding fly-up styrene margin.

This $25 million increase will be comprised of about 5% EBITDA improvement in Performance Materials and some benefit in EBITDA from continued structural improvement in styrene monomer, styrenic polymers and polycarbonate. In closing, I just like to reiterate the Trinseo value proposition and what makes this different.

First, we’ve been able to sustain and in some cases, increase our margins despite dropping oil. Second, the majority of our revenue is in Europe, in North America across a diverse set of end markets. Third, operating rates for our products are increasing with continued demand growth expected in combination with limited supply additions.

Also many of our products have designed specifically to meet customer needs and are differentiated and value adder resulting in higher margins that are less subject to operating right dynamics. And finally, we have an excellent balance sheet, low net leverage and significant liquidity in cash. And Liz, we can open the phone line for questions..

[Operator Instructions] Our first question comes from the line of David Begleiter with Deutsche Bank. Your line is now open..

Thanks, good morning and congratulations on very good quarter-to-year Chris..

Thanks David..

Hey Chris, just on Latex, it looks like there will some price increases flowing through, you talked about the supply demand dynamics in Latex and potential for additional price increases throughout ‘16 and into ‘17?.

Sure. The operating raise for Latex in North America based on the recent asset decision are approaching the high 80s and we believe that is the opportunity for margin improvement by a price given the tightening supply demand dynamic. We in fact did announce price increases for the first quarter in North America.

And David, those price increases are going through, begin to show themselves as we move through the year. The European operating rates in Latex are not that high and our price increases as I mentioned are affected in North America.

We’ll have to wait and see whether we can get additional increases David, towards back of ‘16 or ‘17, but operating rates in North America are the highest they have been in sometime now in Latex..

Very good. And Chris just on polystyrene, we see very good performance in margin behavior in polystyrene. Is this a new normally thing for polystyrene and i.e.

to make money, historically it has been challenged through make a margin?.

We absolutely think it is. And again remember the theme on this of course is operating rate as it with styrene, as it is with polycarbonate and in all three cases, we are raising operating rates over the last 18 months and we think rising operating rates going forward. On polystyrene, the operating rates in the U.S.

are in the high 80s which is really as high as they have been in the probably last ten years. In Europe, the operating rates are in the mid-80s. Now in Asia, they are lower in polystyrene. But still being a regional product, obviously in the U.S.

with those kind of operating rates, there is the ability to raise price and raise margin and in Europe as mid-80s, the ability to certainly hold margin in polystyrene at a relatively good level Dave.

So yes, we think it’s a new normal and we think the operating rates are in fact rising going forward on all of our commoditize products whether it’s polycarbonate, polystyrene or styrene monomer. And again no capacity is being added particularly in polystyrene there is zero and in the other products, there is small quantities of new capacity coming..

And just one last thing on the cash balance and the use of the free cash in 2016, how should we expect that to be utilized?.

I’ll turn that over to our Treasurer, David Stasse, who let you know his thoughts on use of cash..

Hey, good morning, Dave. I think you know our use of cash will be consistent with what we’ve said historically. We are going to continue to invest in the Performance Material side of the business whether that be through you know incremental organic, CapEx investor or inorganic both on acquisitions.

That’s you know where we are spending about 35% of our CapEx, now expect that to continue going forward, Dave. We’ve also talked several times since the IPO about implementing a common dividend if and when we restructure the balance sheet which we did earlier this year as you know and dividend yield that we’ve talked about is 1% to 1.5%.

So that would work after that $20 million and $25 million of cash outflow for this annually. So I think that’s I’ll prioritize that probably second as a use of cash. And then beyond that you know we’re very comfortable building cash and holding cash balance given the optionality that gives us for financial flexibility quite frankly..

Thank you very much..

Our next question comes from the line of Bob Koort with Goldman Sachs. Your line is now open..

Good morning. This is Ryan Berney on for Bob..

Hi Ryan..

Hey, Chris. I was hoping you could comment, you know you had some really strong Basic Plastics volumes here right at the end of the year.

So was there any sort of restock in there and could you also comment on your views of the demand trends that you saw in Europe and Asia on the ground?.

Sure. You kwon we have reasonable volumes in styrenic as you are noting. And with the way the Feedstock world is being going which has been a steady decline, you can imagine that the inventory change and I don’t mean just us or our customers but entire value chain have been leaned out pretty well.

In the fourth quarter, we did see a little bit of volume rebound as people started look at low inventories, but also demand - fundamental demand was pretty good. Now Feedstocks dropped again in the first quarter, I told about really Benzene in particular here.

And so once again customers are looking at holding inventory down and waiting for the bottom before they start rebuilding of inventories. And even in that environment, we are seeing volumes in the first quarter look pretty good at the moment across styrenics and copolymers included ABS.

And once we got through Chinese New Year, we stated to see the Asian markets come back I would say decently Ryan in the first quarter..

Great, thanks, that’s helpful. And then also I think in the past you commented your - that your maintenance CapEx was maybe on the kind of $40 million range and obviously you are going to spend a well above that in 2016.

So beyond the Rubber expansion that you’ve spoken about in the past, can you kind of talk to us a little bit about what your spending like growth CapEx on and what kind of EBITDA contributions we should expect from it?.

Yeah, first of all in CapEx, we are not going to be higher in maintenance capital next year. Our ‘16 guide on CapEx of a $150 includes about $40 million in maintenance capital.

It does include about $55 million of IT capital on two products, investment in a new SAP system which we’re going to be implementing over the course of 2016 and some continued investment in the hardware, in our operating rooms and our plans, the operating hardware and the plans. So that’s a $55 million portion of a $150 million of capital in 2016.

The other $55 million is split between growth and productivity across the portfolio with of course the majority of that or essentially all of that being in Performance Materials.

And it’s got in got things like continuing to invest in Performance Plastics where we see incremental growth opportunities, continuing to put additional productivity into our Rubber business.

And just overall continuing to raise the quality of that business and we’re appropriate putting in productivity capital to our Basic Plastics business where we can get high returns.

Well where on capital 2017, we would expect similar maintenance $40 million, our ERP and our plant operating, IT capital should have dropped about $35 million and we share about $50 million for growth and productivity or a total of $125 million in 2017..

Great, thank you..

Our next question comes from the line of Hassan Ahmed with Alembic Global. Your line is now open..

Good morning, Chris..

Hey Hassan, how are you doing?.

Good, thank you. Listen you know one of the paranoia I guess that persist in the marketplace is you know around this whole notion of China sort of devaluing its currency, right? Now, you know obviously you guys generate if I remember the number correctly, it’s around 13% of your sales from China.

So obviously, one impact would be a currency translation impact.

My question to you is more along the lines of a cost curve impact for a bunch of products that you guys produce, meaning you know I mean I think that you know a lot of the rows that you guys purchase even in the Asia would be dollar denominated, so I’d assume that the cost curve impact and pricing impact thereby would not be that meaningful.

Is that fair?.

Yeah, hi, Hassan..

Absolutely right, but David will - yeah..

Yeah, you are absolutely right, Hassan. Us as well as our completion in the markets in which we participate in China typically selling local currency and buy Feedstock inputs in U.S. dollar denominated basis.

So for the vast majority of production in China has that long CNY short dollar exposure and our view is that you know the market participants including ourselves would act rationally and adjust price accordingly to the extent of CNY depreciates, so it’s not forgo margin..

Very helpful. Thanks so much, guys..

Thanks Hassan..

Our next question comes from the line of Frank Mitsch with Wells Fargo Security. You line is now open..

Good morning, gentlemen and let me eco the congrats on the quarter and on the year..

Thanks Frank..

Dave, when you’re talking about use of cash, I was curious given the large private equity ownership, if we might start to see in 2016 some selling by Bain and perhaps Trinseo keeping some cash on the balance sheet to perhaps soak up some of those shares.

What are your thoughts on that?.

Hey Frank, it’s Chris. We would consider our shares undervalued and have of course ample cash to participate appropriately in that kind of endeavor and we would consider that an attractive thing to do..

Terrific, thanks you so much.

And Chris, thank you for stepping through the expectations on 2016 but at least to mind you is I didn’t hear - something more specific on why after three months you are raising the guidance by $25 million, what is gone right or what is going right that you feel comfortable in raising the low end and the high end by $25 million?.

Well we think as we try to articulate a little on the slide Frank, I mean fundamentally we think we knew little bit better in Performance Plastics, remember we said 5%, now we are seeing at least 5%, so we think we knew a little bit better there.

But also we think the structural improvement of polycarbonate, polystyrene, styrene should give us some lift year-over-year but that we mean rising operating rates, rising general margins and those two together really equal that raise in guidance if you will. Now recall, we are not including in that any fly-up styrene market.

So we don’t know how to predict that, all we can say is last three years we’ve had it, but our guidance of 510 to 520 is absent fly-up styrene margin you know driven by unplanned outages, so structural improvement in the Basic Plastics & Feedstocks and a little bit better result from as Plastic is a short answer..

Alright, terrific, I do appreciate the conservatives and with respect to the fly-up.

And then lastly, just more of conceptual question, as you know there is a heck of a lot of ethylene that has being built in this country over the over the next couple of years and the vast majority of that has associated with it polyethylene, but high profitability in a styrenic chain, what are your thoughts in terms of some of this - some of the ethylene perhaps being repurposed to come back in to this styrenic chain therefore aiding capacity there?.

You are speaking as styrene I am sure, but I think the answer is, my answer would be I would view that as well lots. And the reason being, the margins we have in styrene today are not really great enough to create in my opinion reinvest in economics.

You know we have of course been very clear in our intentions and for that matter the intentions of our JV, our 50% ownership in our JV and that is we’re not building styrene, polystyrene or polycarbonate period.

I think you know generally the other styrenic producers have been rather public about their view of the world and their view of where they are going to put their capital. And I generally haven’t heard those public comments at all related to styrenic or the specialties and things of that nature. So I just don’t see it as a likely scenario.

But remember, if somebody got up the courage to go to their board and get a bunch of to build a styrene plant and started you know at the end of ‘16, that’s in into’19 market entrance. So I view it is low odds happening and it’s a pretty far a ways out.

So our fundamental view is do pretty good run on styrene, polystyrene, polycarbonate because the forward look on supply is pretty well fixed for the next three years in all cases..

That’s very helpful, thank you so much..

Our next question is from Laurence Alexander with Jefferies. Your line is now open..

Good morning. This is Dan Rizzo on for Laurence.

How are you?.

Hey Dan, how are you doing?.

Doing well.

Just a little more granularity on the automotive end markets, I mean it seems like it’s still going relatively strong, are you seeing any softness at all as we head into the first quarter here, excuse me?.

Not yet, not yet, pretty good obviously good in - good across the board on exceptional South America, Brazil, now that’s not a good automotive market and it’s not into automotive market for probably the better part of 15 months now. But otherwise nothing at Dan, other than generally green lights now.

You know you we’ve seen all the date on credit metrics and things like that in automotive, foreseeing now with pretty good report here recently and pretty good outlook. So we haven’t seen it yet in any of those other regions..

Okay, and then you mentioned capacity utilization for Latex is high in North America because when you remove something - less in Europe, is it - any your thoughts or probably a thought process maybe reducing capacity in Europe as well to kind of increase utilization in that region?.

Well, we are always on the outlook for what we do it, we’re asset based for improve in our own shop Dan, and we of course did that in North America up in Gales Ferry along with other cost reductions.

And we continue to look at our whole Latex footprint but also our entire Latex cost portfolio, cost position, cost in general, so look for ways to reduce cost in Latex.

You know Latex continues to be in an arena where because of our global strategy and our global footprint, we’ve been able to hold our volume steady for literally three years quarter-by-quarter around 300 million pound. So we continue to be able to do that.

And we can do that because we participate in carpet which is doing well, some high performance Latex which is growing, board which is growing, China where there is some growth. And that is proven to offset for us along with technology start based emotions things like that, that has allows us globally to kind of hold our volume in a challenge market.

And of course we are looking at raising price and lowering cost as a way to drive margin in that flattish volume arena, Dan..

Okay, thank you, that’s very helpful..

Our next question comes from the line of Duffy Fischer with Barclays. Your line is now open..

Yeah, good morning fellows. Just want to walk through the guidance a little if we could, midpoint 130 for the first quarter, if you annualize that four times that get you to the high end of the annual guidance.

And I would think and we don’t have a long heist with you guys, the Q1 traditionally is less than 25% of our annual EBITDA and then add into that your comments today, I think are fair, the supply demand should tighten throughout the year.

Why wouldn’t we think about you know improving EBITDA quarter-over-quarter sequentially throughout the year you know kind of highlighting maybe some conservatives and then the annual EBITDA?.

That’s a great answer to your own question Duffy..

So there is no reason we shouldn’t improve the point -.

The third quarter is - listen the second quarter is usually a pretty strong quarter for us. Third quarter we have European summer, fourth quarter we have a general end of year, so we’re not trying to be exact if you will through the whole year.

As you know as a company we have I think appropriately but rather aggressively up to our guidance to your guys, sequentially over the last several quarters more granularity, more crystal clear and we’re trying to continue to do that. But a full year forward for us, you know we’re very comfortable with the guidance we gave for the full year.

It’s I think good guidance and you know does not a good styrene fly-up but this guidance that might be context to just a way you described it..

Okay, and then how much cash you guys need on the balance sheet to run the company?.

About a $125 million or so..

So if you take that number, what you have and you know the walk you got threw it over $200 million of cash flow this year that would say you’ve got about $500 of cash available by the end of the year.

I think one of the big things people struggle with, one, that’s a bigger number than the public float, you know so theoretically they could take you back private with just that cash.

But flexibility isn’t enough for investors, I mean you know folks want to know what you are going to do with that is a very prodigious cash flow which is a good problem but it is a problem with investors.

Can you talk about philosophically where you want to go with that cash over the next two years? And this above the regular dividend, this is above the CapEx, I mean this is extra cash that you and board going to make a decision with how to spend for investors..

Alright, let’s see how it develops stuff. We’re not ready to define; I am not ready to define use of cash two years out. I think we’ve been very consistent; being capital has been very consistent. They are likely to go through a monetization phase, that’s a normal thing that happens in these transactions.

And I think we ought to just let it play out a little bit and I believe this management team and our board have a very clear and thoughtful head, collective heads if you will and we find a very I think attractive shareholder things to do with that cash at the right time.

And let’s leave it at that, okay?.

Fair enough, thanks fellows..

Our next question comes from the line of P.J. Juvekar with Citi. Your line is now open..

Hi, good morning, Chris, Eric Petrie for P.J..

Hey Eric..

There is a European chemical company that obviously some more surprising firing in 2015, but for ‘16 they are little more cautions expecting their EBITDA contribution is decline by two thirds, what is the difference then in thought between your approximately 15% decline in Basic Plastics & Feedstocks in that guidance?.

Right, we have a different footprint, number one, I think we have a view that the market is generally tightening and I think they show that view. And there might be some settle differences there at the amount of tightening.

But putting that aside, our footprint of styrene is made up to the following, 600 kilotons of European based styrene production, 300 kilotons of what’s essentially Asia based, Asia cost based styrene and 500 kilotons by way of Americas Styrenics of U.S. cost base styrene.

And because we have that footprint and we’re not solely in Europe and the North American operating rates are the highest in styrene in the world and Asia operating rates are rebounding, I think that’s where we have a little different geographic mix and therefore a different equation in the math of styrene going forward..

Great, thank you..

Eric, we are in better parts of the world that are rising in margin.

That’s the short answer, okay?.

Thanks..

Our next question comes from the line of Roger Smith with Bank of America Merrill Lynch. Your line is now open..

Thank you. Good morning..

Hi Roger..

How are you? Could you first speak about the SP Latex and coated paper outlook in China and if there is eventually a turning point in Chinese coated paper demand?.

Well first of all, our overall Latex business is up 3% in volume year-over-year, you just see on the slide. And that’s because of this global footprint in segment that I laid out earlier. The China market has been a little bit challenged in the short run. We do see it starting to come back through the year.

Well depend on some currency effects where the European paper producers has been able to export more coated paper with low euro, so that dynamic Roger did impact China a little bit in terms of coated paper, so just have to see how it plays out. But again you know we’re on the Latex complex with this global footprint, several key markets.

And therefore our ability to maintain volume and kind of drive our volumes need it, we have it is little different than some of the other guys out there. That’s I think really the key point for in Latex..

Okay, thank you on that. On - as European SSBR you’ve shown very strong volume growth here.

And I am wondering when you know - what is the ultimate size of the European SSBR market such that at some point in future where your growth starts to move more online with European tire demand as opposed to this increase under shift of the European tire guys using more of the SSBR?.

Right, right. Well I’d like you to think about is global first of all, because we do export from Europe around the world and we have in of 24% year-over-year enhance SSBR.

But the dynamic, Roger is you should think about is the penetration of high performance tires whether it’s OEM or replacement, still has a long way to go particularly in Asia and generally in the replacement tire market. The OEM markets in Europe are pretty well penetrated on high performance tires. The U.S.

has come a long way but the Asia markets and frankly the Latin American markets are not that well penetrated. And then you have the whole replacement market yet that of course is 75% to 80% of tires. So I think we still have a long way to go on the growth of high performance tires.

And if you go back and look at Goodyear, Michelin and County, all recently had reports. They all are articulating pretty healthy growth rates server more years in high performance tires for the reason I mentioned. We are sold out essentially in our Rubber business today.

And so from a company standpoint, our growth in volume is now related to for example no turnaround this year, better productivity, our EBITDA growth is related to commercializing the PBR, upgrading our mix and eventually as we’ve said, growing our footprint in Asia and that would probably come in the form of some JV if we were to do it..

Thank you for that. My last question is, in both Latex and Synthetic Rubber, how much of the margin expansion was due to the timing lag in falling styrene in prices.

And if you could remind us what is the contractual pricing lag and passing through materials and each of Latex and Synthetic Rubber?.

In what period of time are you talking about?.

Well, I am talking you, in Q4 ‘14 versus Q4 ‘15, the price of styrene and vinylidene were much higher than they were in Q4 ‘15 and I am wondering whether some of the margin expansion and the MD&A in the press release, talk about that margin expansion each of Latex and Synthetic Rubber was driven by the falling cost of the styrene and vinylidene which may have helped your margins along but it may have been just that lag in the fall as opposed to you know and it may catch up..

Well, let me ask the question way, you have our guidance for the first quarter by product, by business, so you have that. We did have some revalue change revalue in the fourth quarter. I think digging deep into your questions best on offline with our guys.

But your basic question about lag, okay, in our Rubber business we have one month of lag essentially in the contract. So unless it’s you know at the right time in the quarter, it’s generally doesn’t affect the quarter that much. In Latex, the timeframe is a little bit longer, maybe 40 days but not that much longer.

So that’s the lag we have in the business related to the contracts and pass through. Now 85% of our Rubber business is contracted as we said 80 to 85, and a large percentage of our Latex business is contracted essentially Western Europe - in Europe and in the U.S.

most of it in Asia fast, but that tends to behave often more like contracted pass through. So well it’s not contracted, it tends to behave that way.

Okay?.

Thank you very much..

Our last question comes from the line of Vincent Andrews of Morgan Stanley. Your line is now open..

Good morning. Actually this is Matt Andrejkovics calling in for Vincent. Thanks for taking the call..

Hey Matt..

Just a couple of question on demand, volume - in Basic Plastics, volume was up 1% for the year. I think in the past you’ve mentioned global growth for styrene higher than that maybe 2% of so even more may be.

What level of demand are you seeing - do you factor in for your 2016 outlook? And then also just on 2015, is it possible that some of your volume might have reflect maybe some share gains, while you had a large average from the more Butadiene plant?.

Well, it’s couple of things there Matt. One, we are not - we are short styrene, so we’re buyer not a seller, okay. So more I being out, you know does not give us share gains in styrene, we don’t sell styrene, okay. So that’s not part of our equation. We do believe styrene globally and the models we have is still growing at about 2% per year.

And we believe polystyrene which is one of the major uses of styrene is growing at a similar rate. So that’s the growth that we have in the modeling going forward.

Individual year growth rates whether you know odd numbers or whether published, often have to be looked at in the context of inventory and what’s going on in inventory, remember these are big chains, lots of volume. And as I’ve said in dropping Feedstock environments, the inventories tend to be leaned out.

And in rising Feedstock environment, inventories tend to get read out. So the real demand can often by inventory action in the chain. And in a year when inventories are being leaned out, you would expect that the growth took a little bit less than it might actually and the opposite in the ten years when inventories are being down.

Does that make sense?.

Yes, thank you.

And just one more on the upcoming turnaround season scheduled planed for Europe, is this turn around season larger than normal, when it’s so is it perhaps maybe due to some delay turnaround because of the average again more like last year?.

General season you are speaking of is in Europe specifically you are speaking, yeah it’s well it’s styrene, let’s just be clear, the turnarounds that we describe that matter are the styrene turnarounds and the season for that quote on quote is generally March, April, May and into June.

And this year those turnarounds will be a little bit less than last year in aggregate as best we can talk. These are planned turnarounds, okay.

Now why we are on the subject to turnarounds, in the polycarbonate business which we don’t talk about turnarounds that often, but at the moment in fact it just went into turnaround, one of the largest polycarbonate plants in the world is SABIC plan in Saudi Arabia just went into turnaround and it will probably be in turnaround for I would at least the month of November.

So we have some polycarbonate turnaround dynamics this year that are I think important to that equation, that as well, alright..

Thanks very much..

Okay..

That concludes today’s question-and-answer session. Ladies and gentlemen, thank you for your participation in today’s conference. This concludes the program and you may now disconnect. Everyone have a great day..