Kronos Worldwide, Inc. (KRO) 2012 Q2 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Kronos Worldwide second quarter 2012 earnings conference call. My name is Derek and I'll be your operator for today's call. At this time all participant of participants are on a listen-only mode. Later, we'll conduct a question-and-answer session. I would now like to turn the call over to your host, Miss Janet Keckeisen, Vice President of Investor Relations for Kronos Worldwide. You may begin, Janet.

女士們、先生們，大家好，歡迎參加 Kronos Worldwide 2012 年第二季財報電話會議。我叫德里克，我將擔任您今天電話的接線生。此時所有參與者都處於只聽模式。稍後我們將進行問答環節。現在，我想將電話轉給主持人、Kronos Worldwide 投資者關係副總裁 Janet Keckeisen 女士。你可以開始了，珍妮特。

Thanks, Derek, Good morning and welcome to the Kronos Worldwide 2012 second quarter earnings call. With me this morning is Steve Watson, Chief Executive Officer, and Greg Swalwell, Chief Financial Officer. The earnings release that was issued this morning can be found on our website at www.kronostio2.com.

謝謝，德里克，早上好，歡迎參加 Kronos Worldwide 2012 年第二季財報電話會議。今天早上與我在一起的是首席執行官史蒂夫·沃森 (Steve Watson) 和首席財務官格雷格·斯瓦韋爾 (Greg Swalwell)。您可以在我們的網站 www.kronostio2.com 上找到今天早上發布的收益報告。

During the course of this conference call we will make forward-looking statements. All statements relating to matters that are not historical facts are forward-looking statements that represent management's beliefs and assumptions based on currently available information. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it cannot give any assurances that these expectations will prove to be correct.

在本次電話會議期間，我們將做出前瞻性陳述。所有與非歷史事實有關的陳述均為前瞻性陳述，代表管理階層基於目前可用資訊的信念和假設。儘管公司認為此類前瞻性聲明所反映的預期是合理的，但無法保證這些預期將被證明是正確的。

Such statements by their nature involve substantial risks and uncertainties that could significantly impact expected results, and actual future results could differ materially from those described in such forward-looking statements. We assume no obligation to update or revise any forward-looking statements. While it is not possible to identify all factors, the Company continues to face many risks and uncertainties. Please refer to the earnings release for a discussion of some of the factors that could cause actual results to differ materially.

此類陳述本質上涉及重大風險和不確定性，可能對預期結果產生重大影響，實際未來結果可能與此類前瞻性陳述中所述的結果有重大差異。我們不承擔更新或修改任何前瞻性陳述的義務。儘管無法確定所有因素，但公司仍面臨許多風險和不確定性。請參閱收益報告，以了解可能導致實際結果發生重大差異的一些因素的討論。

In after effort to provide investors with additional information regarding the Company's results of operations, we would refer to earn is non-GAAP information. We ask that you refer to the earnings release for a reconciliation of this non-GAAP information to our GAAP financial statement. I will now turn the call over to Steve.

為了向投資者提供有關公司經營業績的更多信息，我們將參考非公認會計準則資訊。我們請您參閱收益報告以了解這些非 GAAP 資訊與我們的 GAAP 財務報表的對照組。現在我將電話轉給史蒂夫。

Thank you, Janet, and welcome to everyone participating on this conference call. In addition to Janet and Greg, with me today are several members of our management team. Rob Graham, Executive Vice President and Chief Administrative Officer, Kelly Luttmer, Vice President and Global Tax Director, John St. Wrba, Vice President and Treasurer, Tim Hafer, Vice President, Controller and Brian Christian, Vice President, Strategic Business Development. I also want to again give special recognition to our operating management team. Including Doug Weaver, Dr. Ulfert Fiand, Klemens Schluter, Joe Maas, [Ben Corona], and all the individuals working in technology, manufacturing, sales and marketing who, together, make our team exceptional.

謝謝你，珍妮特，歡迎參加本次電話會議的所有人。除了珍妮特和格雷格之外，今天和我一起的還有我們管理團隊的幾位成員。執行副總裁兼首席行政官 Rob Graham、副總裁兼全球稅務總監 Kelly Luttmer、John St.Wrba，副總裁兼財務主管，Tim Hafer，副總裁兼財務主管，以及Brian Christian，副總裁兼策略業務發展部。我也想再次特別感謝我們的營運管理團隊。包括 Doug Weaver、Ulfert Fiand 博士、Klemens Schluter、Joe Maas、[Ben Corona] 以及在技術、製造、銷售和行銷領域工作的所有個人，他們共同成就了我們卓越的團隊。

Our operating and financial results for the second quarter of 2012 remain solid. As we had expected and previously reported, our production costs have increased significantly, driven primarily by higher feedstock or costs. Lower customer demand for our TiO2 products, particularly in Europe and certain export markets, resulted in lower sales volumes in the second quarter and first six months of the year. Although our average selling prices were significantly higher in the second quarter and first six months of 2012, as compared to the same periods in 2011, our segment profit declined for the quarter primarily as a result of the lower sales volume and higher production costs. The Company's average TiO2 selling prices at the end of the second quarter 2012 were comparable to the end of the first quarter of this year.

我們 2012 年第二季的經營和財務表現依然穩健。正如我們預期和先前報告的那樣，我們的生產成本大幅增加，主要原因是原料或成本上漲。由於客戶對我們的 TiO2 產品的需求下降（尤其是在歐洲和某些出口市場），導致今年第二季和上半年的銷售量下降。儘管我們 2012 年第二季和上半年的平均銷售價格與 2011 年同期相比大幅上漲，但本季我們的分部利潤卻出現下降，主要原因是銷售量下降和生產成本上升。2012 年第二季末，該公司二氧化鈦平均售價與今年第一季末相當。

We reduced our production volumes during the second quarter to approximately 86% of practical capacity utilization in order to align our production and inventory levels with current and anticipated near-term demand levels for our TiO2 products. We currently expect to operate our facilities at approximately 90% to 95% for all of 2012. While aggregate global demand for TiO2 products has decreased in line with the recent deterioration of global economic conditions, markets in North America and certain export markets continue to show relative strength.

為了使我們的生產和庫存水準與 TiO2 產品當前和預期的近期需求水準保持一致，我們將第二季的產量減少到實際產能利用率的約 86%。我們目前預計 2012 年全年我們的設施營運率將達到約 90% 至 95%。雖然全球對 TiO2 產品的總需求隨著近期全球經濟狀況的惡化而下降，但北美市場和某些出口市場繼續表現出相對強勢。

We expect demand for TiO2 will increase as economic conditions improve in the various regions of the world, with chronic shortage conditions returning upon attaining aggregate global economic activity equivalent to approximately the 2011 levels. In the near term we expect to see intermittent periods of availability and shortage of TiO2 products. Prior to the recent slow down of TiO2 demand, a shortage of ore feedstock existed, which in turn was an additional constraint for any significant new TiO2 production capacity. With the extraordinarily large increases in the prices of ore feedstocks during 2011 and 2012, we believe most ore producers have profitability levels that financially justify the development and expansion of additional ore supplies, several of which are currently under way, and is expected to become available beginning late this year.

我們預計，隨著世界各地區經濟狀況的改善，對 TiO2 的需求將會增加，一旦全球經濟活動總量達到約 2011 年的水平，長期短缺狀況將再次出現。我們預計短期內 TiO2 產品將會出現間歇性的供應和短缺現象。在近期 TiO2 需求放緩之前，就存在礦石原料短缺的問題，這反過來又對任何大規模新的 TiO2 生產能力造成了額外的限制。隨著 2011 年和 2012 年礦石原料價格的大幅上漲，我們相信大多數礦石生產商的盈利水平足以在財務上證明開發和擴大額外礦石供應的合理性，其中一些項目目前正在進行中，預計將於今年年底開始投入使用。

With the continuing constraints, high capital cost, and extended time associated with adding significant new TiO2 production capacity, especially for the premium grades of TiO2 products produced through the chloride process, we believe increased and sustained TiO2 profit margins will be necessary to financially justify major expansion of TiO2 capacity. Given the long lead time involved with such expansions, we expect the shortage of TiO2 products that will develop as economic conditions improve and demand levels increase, will continue for a prolonged period. Greg will now expand on some of the points I have touched on, and review our overall financial performance, after which we will open this call up for questions.

由於持續的限制、高昂的資本成本以及增加大量新的 TiO2 生產能力所需的時間延長，特別是對於透過氯化法生產的優質 TiO2 產品，我們認為，有必要提高並維持 TiO2 的利潤率，以在財務上證明 TiO2 產能的大幅擴張是合理的。鑑於此類擴張所需的較長準備時間，我們預計，隨著經濟狀況的改善和需求水準的提高，TiO2 產品的短缺將持續很長一段時間。格雷格現在將詳細闡述我剛才提到的一些觀點，並回顧我們的整體財務業績，然後我們將開始回答問題。

Thanks Steve, and good morning to everyone on the call. We reported operating income, or segment profit, which is the term that we use in our earnings release, of $114.2 million for the second quarter of this year, down from $146.6 million in the second quarter of last year. Despite quarter-over-quarter 24% increase in our average selling prices, segment -- our segment profit declined in the second quarter of this year due to higher raw material costs and lower sales and production volumes.

謝謝史蒂夫，祝電話中的各位早安。我們報告的營業收入，或稱分部利潤（這是我們在收益報告中使用的術語），今年第二季為 1.142 億美元，低於去年第二季的 1.466 億美元。儘管我們的平均銷售價格環比上漲了 24%，但由於原材料成本上升以及銷售和生產量下降，我們今年第二季的分部利潤卻出現下滑。

For the first half of the year, our segment profit increased from $250.8 million in the first six months of 2011, to $327.1 million in the first six months of this year, as the favorable impact of higher selling prices more than offset the negative impact of our higher production costs, most of which impacted our second quarter as I'll discuss here in a second, and lower sales and production volumes. As I mentioned, our average TiO2 selling prices in the second quarter were up 24% as compared to the second quarter of last year, and for the first six months of this year our prices were up 28%.

今年上半年，我們的分部利潤從 2011 年上半年的 2.508 億美元增至 3.271 億美元，這是因為銷售價格上漲帶來的有利影響超過了生產成本上漲帶來的負面影響（其中大部分影響了我們的第二季度，我稍後將討論這一點），以及銷售量和生產量下降帶來的負面影響。正如我所提到的，我們第二季的 TiO2 平均售價與去年第二季相比上漲了 24%，今年前六個月的價格上漲了 28%。

Our average selling prices at the end of the second quarter were comparable to where they stood at the end of the first quarter of this year. Our sales volume from the second quarter of this year were 123,000 metric tons, down about 16% from the second quarter of 2011. And our sales volumes in the first six months of this year were 253,000 metric tons, down about 7% from the first half of last year. The decrease was due to lower customer demand, as Steve had mentioned, primarily in Europe and certain export markets.

我們第二季末的平均售價與今年第一季末的水平相當。我們今年第二季的銷售量為12.3萬公噸，比2011年第二季下降了約16%。今年上半年我們的銷售量為25.3萬噸，比去年上半年下降了約7%。正如史蒂夫所提到的，下降是由於客戶需求下降，主要是在歐洲和某些出口市場。

We reduced our production volume from the second quarter of this year in order to align our inventories with our current and anticipated demand levels, and our production volumes for the quarter at 118,000 metric tons, was 17% lower than the second quarter of last year. For the first half of the year, our production volumes were at 258,000 metric tons, down about 6% from the first half of last year. As Steve mentioned, overall for all of calendar 2012, we expect to operate our facilities at about 90% to 95% of our practical capacity rates.

我們從今年第二季開始減少產量，以使我們的庫存與當前和預期的需求水準保持一致，本季我們的產量為 118,000 公噸，比去年第二季下降了 17％。今年上半年，我們的產量為25.8萬噸，比去年上半年下降約6%。正如史蒂夫所提到的，總體而言，在整個 2012 年，我們預計我們的設施將以實際容量率的 90％ 到 95％ 左右運行。

On the cost side, and as we had expected and talked about before, our raw material costs were significantly higher, up about $90 million in the quarter compared to the second quarter of last year, and up about $117 million on a year-to-date basis, reflecting higher costs primarily for feedstock ore, and to a somewhat lesser extent, petroleum [cooled] coke. We expect our raw material cost will continue to be higher in the second half of 2012 as compared to the second half of last year. Overall, we continue to expect that our per metric ton cost of TiO2 that we will produce in this year will have increased about 50% to 60%, as compared to our per metric ton unit cost production from 2011, largely driven by the higher feedstock ore costs. And it's important to keep in mind that our cost of sales per metric ton of TiO2 that we sold in the first quarter of this year was significantly lower as compared to our costs [of] sales per metric ton of TiO2 that we sold in the second quarter of this year, as a substantial portion of the TiO2 products that we sold in the first quarter of this year had been produced last year with lower cost feedstock oar.

在成本方面，正如我們之前預期和談論過的，我們的原材料成本大幅上升，本季度與去年第二季度相比上漲了約 9,000 萬美元，年初至今上漲了約 1.17 億美元，這主要反映了原料礦石成本的上漲，其次是石油[冷卻]焦炭成本的上漲。我們預計，2012 年下半年的原物料成本與去年下半年相比將持續走高。總體而言，我們仍然預計，今年我們生產的 TiO2 每公噸成本將比 2011 年每公噸單位生產成本增加約 50% 至 60%，這主要是由於原料礦石成本上漲所致。需要記住的是，我們今年第一季每公噸二氧化鈦的銷售成本明顯低於今年第二季每公噸二氧化鈦的銷售成本，因為我們今年第一季銷售的二氧化鈦產品中很大一部分是去年使用成本較低的原料生產的。

EBITDA for the quarter was about $125 million, down from about $158 million from the second quarter of last year. For the first half of this year, EBITDA was $348 million, compared to $274 million in the first half of last year. In June of this year, we entered into a new $400 million term loan issued by Kronos Worldwide. We used a portion of the net proceeds of that term load to redeem the remaining outstanding 6.5% senior secured notes that were due April of next year that had been issued by our wholly owned subsidiary Kronos International in Europe. At that time, there was approximately $279 million in principle amount of senior notes outstanding. As a result of that redemption, we recognized an aggregate pre-tax charge in the quarter of this year of $7.2 million related to the early extinguishment of this debt, and on a net of tax per share basis, that equates to $0.04 of per diluted share.

本季的 EBITDA 約為 1.25 億美元，低於去年第二季的約 1.58 億美元。今年上半年，EBITDA 為 3.48 億美元，而去年上半年為 2.74 億美元。今年 6 月，我們與 Kronos Worldwide 簽訂了一項新的 4 億美元定期貸款。我們利用該定期貸款的部分淨收益來贖回剩餘未償還的 6.5% 優先擔保票據，這些票據將於明年 4 月到期，由我們的全資子公司 Kronos International 在歐洲發行。當時，未償還的優先票據本金金額約為 2.79 億美元。由於該贖回，我們確認了今年季度與提前償還該債務相關的總計 720 萬美元的稅前費用，按每股稅後淨額計算，相當於每股攤薄收益 0.04 美元。

During the first quarter of last year, we had redeemed $80 million (Inaudible) principle amount of the senior notes, and our results in the first six months of 2011 include an aggregate first quarter charge of $3.3 million associated with the early extinguishment of that debt, and that $3.3 million pre-tax charge equates, on the net of tax basis, to about $0.02 per diluted share. In June of this year, we also entered into a new $125 million North American revolving bank credit facility, and the full amount of that facility was available for borrowing at the end of June, at the end of the quarter.

去年第一季度，我們贖回了 8,000 萬美元（聽不清楚）的優先票據本金，而 2011 年上半年的業績包括與提前償還該債務相關的第一季度合計 330 萬美元費用，按稅後淨額計算，該 330 萬美元稅前費用相當於每股攤薄收益 0.02 美元。今年 6 月，我們還達成了一項新的 1.25 億美元北美循環銀行信貸協議，該協議的全部金額可在 6 月底，即本季末借入。

Interest expense decreased $1.8 million, down from $8.5 million in the second quarter of last year to $6.7 million in the second quarter of this year. And on a year-to-date basis, interest expense decreased about $5.1 million, from $18.1 million in the first half of last year to about $13 million in the first half of this year. The decrease in the interest rate was due largely to the lower average debt levels associate with the 6.5% notes that we had redeemed in the first quarter of last year, as well as some open market purchases of the senior notes that we made in the third and fourth quarters of last year.

利息支出減少了 180 萬美元，從去年第二季的 850 萬美元減少至今年第二季的 670 萬美元。從年初至今，利息支出減少了約 510 萬美元，從去年上半年的 1,810 萬美元減少到今年上半年的約 1,300 萬美元。利率下降主要是由於與我們去年第一季贖回的 6.5% 票據相關的平均債務水平較低，以及我們去年第三季和第四季在公開市場上購買的一些優先票據。

Our net income for the second quarter was $64.5 million, or $0.56 per diluted share. This compares to $89 million, or $0.77 per diluted share that we reported in the second quarter of last year. For the first half of this year our net income was $201.4 million, or $1.74 per diluted share compared to $149.3 million, or $1.29 per diluted share in the first half of 2011. Just remember that in May of last year, we implemented a two-for-one stock split, and all the per share amounts that I've talked about this morning are computed on a post-split basis, including amounts that relates to -- before May 2011.

我們第二季的淨收入為 6,450 萬美元，即每股攤薄收入 0.56 美元。相比之下，我們去年第二季報告的利潤為 8,900 萬美元，即每股攤薄收益 0.77 美元。今年上半年，我們的淨利潤為 2.014 億美元，即每股攤薄收益 1.74 美元，而 2011 年上半年的淨利潤為 1.493 億美元，即每股攤薄收益 1.29 美元。請記住，去年 5 月，我們實施了二拆一股票分割，我今天早上談到的所有每股金額都是按分割後的基礎計算的，包括 2011 年 5 月之前的金額。

For the second half of 2012, we expect our segment profit and net income will be lower than the second half of last year, as the unfavorable effect of higher production costs and lower sales volumes will more than offset the favorable impact of higher average selling prices. [Those] are all the remarks I had, and at this point, we can open up the earnings call to any questions.

我們預計，2012 年下半年，分部利潤和淨收入將低於去年下半年，因為生產成本上升和銷售量下降的不利影響將超過平均銷售價格上升的有利影響。以上就是我的全部評論，現在，我們可以開始收益電話會議來回答任何問題了。

(Operator Instructions). Our first question comes from the line of David Begleiter from Deutsche Bank.

（操作員指令）。我們的第一個問題來自德意志銀行的 David Begleiter。

Good morning. Steve, can you just comment on your expected production costs in Q3 versus Q2, rate of increase or in that realm?

早安.史蒂夫，您能否評論一下第三季與第二季相比的預期生產成本、成長率或相關範圍？

What we have disclosed is for all of 2012 the 50% to 60% higher compared to last year. Again, looking at our cost to [consult] in the first quarter of this year, that really does not reflect hardly any of that higher production cost, because we were pretty much selling off the product that we had sold -- produced at the end of last year. With respect to the third quarter versus the fourth quarter as -- in relation to the second quarter, we've not -- we're not prepared to talk about that. We're just really kind of talking about it on an annual basis.

我們揭露的是，2012年全年比去年成長了50%到60%。再一次，看看我們今年第一季的諮詢成本，這實際上幾乎沒有反映出任何更高的生產成本，因為我們基本上是在出售去年年底生產的產品。關於第三季與第四季以及與第二季相比的情況，我們還沒有準備好談論這個問題。我們實際上只是每年都在談論這個問題。

Same question on the operating rates. Given the 86% in -- in Q2, it looks like it will be higher in Q3 and Q4, which appears to be above your peers. Are you expecting some demand pick up in the back half of the year for TiO2?

關於營業率也有同樣的問題。鑑於第二季的 86%，看起來第三季和第四季的比例會更高，似乎高於同業。您是否預計今年下半年 TiO2 的需求會回升？

Yes, we think it's reasonable, and that's our expectation right now, that there will be some pick up of demand in the second half of the year as compared to the first half of the year. For example, we've seen economic data that would suggest Europe which, as we've said, was relatively weak in the first half, that there is some expectations that demand should pick up in Europe in the second half of the year, particularly in northern Europe where we, you know, you look at our sales in northern Europe compared to southern Europe, we sell about five times as much product in northern Europe as in southern Europe.

是的，我們認為這是合理的，這也是我們目前的預期，與上半年相比，下半年的需求會回升。例如，我們已經看到的經濟數據顯示，歐洲上半年經濟相對疲軟，但預計下半年歐洲的需求將會回升，特別是在北歐。你知道，與南歐相比，我們在北歐的銷售量大約是南歐的五倍。

That's one reason why we think there is some expectation that demand in the second half of the year should be a little bit better. Where we end up in that 90% to 95% range is really going to be a function of what the extent that we have demand for the product in the second half of the year, as well as some of our expectations as we get to the end of the year as to what the first half of 2013 would be.

這就是我們認為下半年需求會有所改善的原因之一。我們最終能否達到 90% 到 95% 的水平，實際上取決於我們下半年對產品的需求程度，以及我們對年底 2013 年上半年情況的一些預期。

We also, on the demand question, the indications are that inventory supplies at the producer level has started trending down, and from the empirical data that we've been able to gather, we believe most customers are running very, very low on inventory, of both the raw materials, the TiO2 and their finished products. We believe there will be some inventory restocking toward the end the year.

關於需求問題，我們也發現有跡象顯示生產商層級的庫存供應已開始呈下降趨勢，而且從我們收集到的經驗數據來看，我們認為大多數客戶的原料、二氧化鈦及其成品的庫存都非常非常低。我們相信到年底將會有一些庫存補充。

And (Inaudible), any impact of low cost inventory in Q2?

而且（聽不清楚），第二季低成本庫存有任何影響嗎？

There would have been some, but clearly not to the extent that we had in the first quarter.

可能會有一些，但顯然不會達到第一季的程度。

Thank you very much.

非常感謝。

Your next question is coming from the line of Trey Grooms from Stephens.

您的下一個問題來自史蒂芬斯的特雷·格魯姆斯。

Good morning. A couple of things. On inventory, it's bumped up some here sequentially, but you mentioned some pull-backs in production. But it sounds like you guys are going to increase that some here in the back half. So could of give us some color on where you see inventory shaking out as we look out towards the rest of the year.

早安.有幾件事。就庫存而言，這裡有一些連續的增加，但是你提到了生產方面有一些回落。但聽起來你們會在後半部增加一些。因此，當我們展望今年剩餘時間時，您能否告訴我們庫存將如何波動？

With respect to our finished goods inventory, if you look sequentially at the end of the first quarter, the second quarter, our finished goods level are going down. We would much rather have cash in the bank than inventory on the balance street as part of our working capital, so one of the reasons we reduced the production the second quarter was to try to drive those inventory levels down. We would have an expectation of trying to continue to drive those inventory levels down in the second half of the year.

就我們的成品庫存而言，如果按第一季末和第二季末的順序查看，我們的成品水準正在下降。我們寧願將現金存入銀行，而不是將庫存作為營運資金的一部分，因此我們在第二季減少產量的原因之一就是試圖降低這些庫存水準。我們預計今年下半年將繼續降低庫存水準。

You have to keep in mind, too, it depends on how far back your comparison goes. If you go back to the end of last year, clearly the cost of our inventory per metric ton was substantially less than the current cost of inventory per metric ton. That was one reason that we built inventory and bought a lot of ore back in 2011, was to produce that low-cost inventory. If you go back to 2011 numbers, there's a very big difference between the actual cost per metric ton. On a sequential quarter-to-quarter, we're probably getting to more of a steady state with what our costs of inventory and production are.

您還必須記住，這取決於您的比較回溯到多遠。如果回顧去年年底，顯然我們每公噸庫存的成本遠低於目前每公噸庫存的成本。這就是我們在 2011 年建立庫存併購買大量礦石的原因之一，是為了生產低成本的庫存。如果回顧 2011 年的數據，每公噸的實際成本差異非常大。按季度計算，我們的庫存和生產成本可能趨於穩定。

Okay, that's very helpful. Thank you. Also, back to the cost question from earlier, a couple of things. One, how do we think about -- you mentioned that the obviously the lower cost inventory that was built last year really impacted the first quarter, but your wording in your guidance for the 50% to 60% increase in unit cost I believe is really just pointing to the material produced in 2012. How do we think about the impact that the 1Q -- the materials sold in 1Q being built in 2011, how this impacts this guidance?

好的，這非常有幫助。謝謝。另外，回到之前的成本問題，有幾件事。第一，我們如何看待——您提到，去年建立的低成本庫存顯然對第一季產生了影響，但您在指引中提到的單位成本增加 50% 至 60%，我認為實際上只是指 2012 年生產的材料。我們如何看待 2011 年第一季銷售的資料對本指引的影響？

The 50% and 60% guidance was in respect with what we produce and not what flows through our income statement. So going on your reasonable assumption, that the bulk of our costs (Inaudible) sold in the first quarter was from 2011 production, that's not factored into the 50% to 60% number which is really what we expect to produce in 2012.

50% 和 60% 的指引與我們生產的產品有關，而不是與我們損益表中的流量有關。因此，根據您的合理假設，我們第一季銷售的成本（聽不清楚）大部分來自 2011 年的生產，這並未計入 50% 到 60% 的數字中，而這實際上是我們預計 2012 年的產量。

Okay, so it's just really -- going forward, some impact in 2Q but not much in that inventory. It's really 2Q through the balance of the year kind of number, right?

好的，所以實際上——展望未來，第二季度會受到一些影響，但庫存不會受到太大影響。這實際上是第二季至全年餘額的數字，對嗎？

Yes.

是的。

And then also, looking at that, it would imply, though, that I think that the 3Q would see a pretty substantial bump up in this kind of cost per ton, if my math is correct. I'm trying to get a feel for what has changed from the 2Q into the 3Q.

而且，從這個角度來看，如果我的計算正確的話，我認為第三季每噸成本將會出現相當大的上漲。我想了解從第二季到第三季發生了什麼變化。

Yeah, I'm not sure we would be expecting to see a significant in -- from second quarter to third quarter.

是的，我不確定我們是否會期待從第二季到第三季看到顯著的變化。

Like Greg said, I think we consumed the majority of our low-cost inventory in the first quarter.

正如格雷格所說，我認為我們在第一季消耗了大部分低成本庫存。

So, really changed much on the cost front too much from 2Q to 3Q?

那麼，從第二季到第三季度，成本方面真的發生了很大變化嗎？

Slight fluctuations but not in the fluctuation you're going to see if you're comparing feedstock costs from 2011 to 2012. Like we've stated in previous calls, our feedstock costs some contracts [read] price quarterly, some semi-annually, and some annually, so obviously there's going to be fluctuations, but you're not going to see the bump from 2011 feedstock costs to 2012, but obviously, for example, our quarterly contracts that [we] priced there is going to be potential for a change in feedstock costs from quarter to quarter.

波動很小，但如果您比較 2011 年和 2012 年的原料成本，您會發現波動並不大。就像我們在之前的電話會議中所說的那樣，我們的原料成本有些是按季度、有些是按半年、有些是按年度簽訂的合同，因此顯然會有波動，但您不會看到 2011 年原料成本到 2012 年出現上漲，但顯然，例如，我們定價的季度合同可能會在每個季度中原料成本發生變化。

Okay. And then just one last question for me, and then I'll jump back in queue. Some of your competitors mentioned their expectation for price in the back half of the year, maybe seeing some decline there. You guys gave some guidance on that. At least for the full year that you expect full year 2012 pricing to be up relative to 2011. As far as the back half goes, is it reasonable for us to anticipate some price pull back, just in the near term, as well?

好的。然後我再問最後一個問題，然後我回到隊列。你們的一些競爭對手提到了他們對下半年價格的預期，可能會看到一些下降。你們對此給了一些指引。至少就全年而言，您預計 2012 年全年價格將較 2011 年上漲。就後半段而言，我們是否也可以合理地預期短期內價格會出現一些回落？

One reason we gave the guidance because, as you know, we were implementing the series of price increases throughout most of 2011. So where we started at 2012 was at a significantly higher level than where we started at the beginning of 2011. So the expectation about our selling prices in the second half of the year are largely driven, in part, by what happens to our price curve during all -- throughout 2011.

我們給出該指引的原因之一是，正如你們所知，我們在 2011 年的大部分時間裡都在實施一系列的價格上調。因此，我們 2012 年的起點水準明顯高於 2011 年初的起點水準。因此，對我們今年下半年銷售價格的預期很大程度上取決於我們整個2011年的價格曲線的變化。

And if you're comparing 2012 Quarter to 2011 Quarter, quarter three and four, we still believe will be substantially higher than the comparable quarter of 2011. We also believe that there's a high likelihood that we will see demand pick up in the second half, especially towards the end of third quarter and beginning of fourth quarter, and we anticipate that that will also provide at least a stabilization of prices, but we also believe there is a likelihood that you'll see some uptick in our TiO2 product pricing during that period of time.

如果將 2012 年季度與 2011 年季度、第三季和第四季進行比較，我們仍然認為將大幅高於 2011 年同期。我們也相信，下半年需求很有可能回升，特別是在第三季末和第四季初，我們預計這至少將使價格趨於穩定，但我們也相信，在此期間，我們的 TiO2 產品價格也有可能出現上漲。

That's helpful. Thank you very much. I'll jump back in queue.

這很有幫助。非常感謝。我將重新回到隊列。

Your next question is from the line of Edward Yang from Oppenheimer.

您的下一個問題來自奧本海默公司的楊德昌。

Good morning. I'm a little confused by the guidance by the cost per ton, again, because it sounds like sequentially, you're not expecting volumes to move around too much. And on an aggregate cost of sales basis or cost of goods sold, you're not expecting much movement there as well. But if I flow that through, then -- I have a really hard time getting to that 50% to 60% year-over-year increase in cost per ton for 2012. Is that just a function of the difference between of the cost of sales, which is tied to your sales volume versus your guidance, which is more tied to production volume?

早安.我對每噸成本的指導感到有點困惑，因為這聽起來像是連續的，你並不期望交易量有太大的波動。而根據總銷售成本或銷售商品成本，你預期不會有太大的變動。但如果我順其自然，那麼——2012 年每噸成本將很難年增 50% 至 60%。這是否只是銷售成本（與銷售量相關）與指導值（與生產量更相關）之間差異的函數？

I think that's exactly what it is. The 50% to 60% increase only applies to tons produced in 2012, and like we have stated now, a majority of the tons that we produced in the first quarter of 2012 did not hit the income statement of first quarter of 2012. But the 50% and 60% applies to production, which does not take into account that cheap cost of inventory we had going into the year, which we were able to have on finished goods and a little bit on ore as well. We saw some increases in feedstock, and made a strategic decision to increase our ore inventories coming into 2012, and as Greg has alluded to previously, we're in a position now where we're trying to get those inventories down a little bit, hence the 86% production levels in the second quarter.

我認為事實確實如此。50% 到 60% 的增幅僅適用於 2012 年生產的噸數，正如我們現在所說的，我們在 2012 年第一季生產的大部分噸數並未進入 2012 年第一季的損益表。但是 50% 和 60% 適用於生產，這並沒有考慮到我們今年的廉價庫存成本，我們可以將這些成本花在成品上，也可以花在一點點礦石上。我們看到原料增加，並做出了在 2012 年增加礦石庫存的戰略決策，正如 Greg 之前提到的，我們現在正試圖將這些庫存稍微降低，因此第二季度的產量水準達到了 86%。

Just to extend that thought out a little bit, then, the elevated costs per ton of production, that will -- some of that will hit the P&L in 2013, and then you would tie that to whatever sort of pricing that you would get next year, for example.

稍微延伸一下這個想法，那麼，每噸生產成本的上升，其中一部分將影響2013年損益表，然後你可以將其與明年的任何定價聯繫起來，例如。

I guess that will depend on what we end the with, that 50% to 60% increase in production costs, on those tons produced in 2012 are starting to hit the income statement in the second quarter of 2012, and will be there in the third quarter and fourth quarter and depending on what the inventory levels are at the end of the year will spill over into the 2013, depending on what that number is.

我想這將取決於我們最終的結果，2012 年生產的噸數將增加 50% 到 60%，這將在 2012 年第二季度開始影響損益表，並將在第三季度和第四季度產生影響，並且取決於年底的庫存水平，這是否會蔓延到 2013 年，取決於這個數字是多少。

Okay. What's your outlook for ore prices, that's been a controversial subject. I think in the prior quarter, you mentioned that both the TiO2 manufacturing industry and the ore industry are joined at the hip. Steve also mentioned some new capacity coming online at the end of this year. With the demand of TiO2 still slack, do you expect to see some release there. If you do, why wouldn't that help your cost per ton guidance?

好的。您對礦石價格的展望如何？這一直是一個有爭議的話題。我認為在上一季度，您提到 TiO2 製造業和礦石業是緊密相連的。史蒂夫也提到今年底將有一些新產能上線。由於 TiO2 的需求仍然疲軟，您是否預計會出現一些釋放？如果您這樣做，為什麼這不會對您的每噸成本指導有所幫助？

This is Rob Graham. That's a very good question. We do -- we have seen ore with -- particularly with the cutbacks in production, we've seen ore suppliers more availability in the market in the beginning of the year and into last year, it was tight. We have seen, and we do expect, additional ore supplies to come into the marketplace over the next year or two. The long term balance is -- is one where we are -- it is a relationship where the ore suppliers and our industry are closely tied together. We do believe they understand the dynamics of our industry long term. We are also backward integrated with respect to our sulfate production, so -- and that mitigates the impact of these overall cost increases. We also use -- try to use a different mix of ore in our production plans to adjust for changes in ore costs, all of which we do think will favorably impact our ability to increase margins going forward.

這是 Rob Graham。這是一個非常好的問題。我們確實看到，特別是隨著產量的削減，我們看到今年年初和去年市場上的礦石供應商供應增加，供應變得緊張。我們已經看到並且確實預計未來一兩年內將有更多的礦石供應進入市場。長期的平衡是——我們所處的平衡狀態是——礦石供應商和我們的產業緊密聯繫在一起的關係。我們確實相信他們了解我們行業的長期動態。我們的硫酸鹽生產也實現了向後整合，因此，這減輕了整體成本增加的影響。我們也嘗試在生產計劃中使用不同的礦石組合來適應礦石成本的變化，我們認為所有這些都將對我們未來提高利潤的能力產生有利影響。

Okay, and maybe just a final question. With the debt refinancing, I think there was some possibility of special dividends, you pay a special dividend, $1.00 last year. What's your latest thinking there?

好的，也許這只是最後一個問題。透過債務再融資，我認為存在一些特別股息的可能性，去年你支付了 1.00 美元的特別股息。您最近有什麼想法？

On that point we did carve out in the loans that we had the ability to, without affecting any type of a covenants or baskets or anything, pay up to $1.00 special dividend, that would be $0.50 after the split. We -- it's still a consideration. We basically set our regular dividend policy at a rate that we felt very comfortable that we would be able to pay up cycles, down cycles, all the time. What we're -- our philosophy on the special dividend is the Company generates great deals of cash, especially when in up cycles that we're going to -- we basically consider them periodically.

在這一點上，我們確實在貸款中劃出了我們有能力在不影響任何類型的契約或籃子或任何東西的情況下支付高達 1.00 美元的特別股息，拆分後為 0.50 美元。我們 — — 這仍然是一個考慮因素。我們基本上將我們的常規股息政策設定在一個讓我們感到非常舒適的水平，即我們能夠始終在上升週期和下降週期支付股息。我們對特別股利的理念是，公司會產生大量現金，尤其是在經濟上升週期中，我們基本上會定期考慮這些現金。

We don't have any set date or time. Right now we have -- we didn't do it in the spring, but that's always under consideration as we have our board meetings. If we have excess cash that we don't see a need for inside the Company, and we don't have a significant amount of CapEx anyway, our philosophy is that we would -- we believe that you should send that excess cash out to stockholders. I don't have a definitive answer for you on that, other than that's our basic philosophy, to continue to send excess cash out the door out to stockholders.

我們沒有確定日期或時間。目前我們已經——我們在春季沒有這樣做，但我們在召開董事會會議時始終在考慮這一點。如果我們認為公司內部不需要多餘的現金，而且我們也沒有大量的資本支出，那麼我們的理念是——我們認為應該將這些多餘的現金發送給股東。對此，我沒有明確的答案，但這是我們的基本理念，就是繼續將多餘的現金回饋給股東。

All right, thank you for your time.

好的，謝謝您抽出時間。

Okay.

好的。

Your next question is coming from the line of Neil Miller, from Fidelity Investments.

您的下一個問題來自富達投資的尼爾米勒。

Mr. Miller, We've prioritized you.

米勒先生，我們優先考慮您。

I'm with you, Steve. One of the questions I have is, there's been several references to the macro environment, and I'm wondering about linking either stabilization or increasing house stock prices. In other words, my data is somewhat out of date, but in June, I think, there were 18 cities in China which had year-over-year increasing housing prices and I think there are 33 cities where prices were stabilized. I'm wondering about the same factor in the US. Is that -- could that be something that we should all pay attention to, in terms of the macro environment linking either increasing prices or stabilization with outlook?

我支持你，史蒂夫。我的一個問題是，已經有幾次提到宏觀環境，我想知道是否將其與穩定或上漲的房價聯繫起來。換句話說，我的數據有些過時，但我認為6月中國有18個城市的房價年增，有33個城市的房價趨於穩定。我對美國是否有同樣的因素感到疑惑。就將價格上漲或穩定與前景連結起來的宏觀環境而言，這是否是我們都應該關注的事情？

It's interesting that the knee-jerk assumption always is the more new houses there are means a big upcycle in TiO2, that really doesn't track much. Housing was really flat in 2010 and 2011, clearly, when TiO2 had the historic banner years of all time. New housing starts has a factor, but we have found, because a lot of our big customers are obviously coating, painting, and other coating, a significant amount of paint, and it may actually lean toward more being used when new housing is down, because -- as long as there are enough purchases, as long as there is enough activity that a tremendous amount of paint gets used on foreclosed houses, remodels, those types of things.

有趣的是，人們總是下意識地認為新建房屋越多，TiO2 的上升週期就越大，但事實並非如此。顯然，2010 年和 2011 年房屋市場確實表現平淡，而 TiO2 則迎來了歷史上輝煌的幾年。新屋開工有一個因素，但我們發現，由於我們的許多大客戶顯然都在使用塗料、油漆和其他塗料，所以油漆用量很大，而且當新屋開工率下降時，油漆的使用量實際上可能會更多，因為——只要有足夠的購買量，只要有足夠的活動，就會有大量的油漆被用於贖回房屋、翻蓋房屋等。

My view is is that the housing starts, new housing, is a fairly strong indicator of how the economy is doing. The overall economy, how it's doing, has a pretty strong correlation to TiO2 demand, so I look at it as one the factors that we look to, how is the economic activity in any given region of the world operating versus a direct correlation to TiO2. There is an indirect correlation that I think you're assumptions and premises are pretty accurate on an indirect basis.

我的觀點是，住房開工量、新房數量是經濟狀況的一個相當有力的指標。整體經濟狀況與 TiO2 需求有很強的相關性，因此我將其視為我們關注的因素之一，世界任何特定地區的經濟活動如何運作與 TiO2 的直接相關性。存在間接相關性，我認為你的假設和前提在間接基礎上是相當準確的。

What this seemed to me, if what you're residing in is worth something, you'll move toward improving it. But we'll see. Another area of question would be on forward ore contracts. I know in the past you all have extended terms, Steve, in view of your comments on more of supply, are you playing it more closer to the vest, or are you willing to engage in forward terms?

在我看來，如果你所居住的環境有價值，你會努力改善它。但我們會看到。另一個值得關注的領域是遠期礦石合約。史蒂夫，我知道過去你們都延長了合約期限，鑑於你對更多供應的評論，你是更謹慎地行事，還是願意參與遠期條款？

Well, we're -- as you already know, having familiarity with both titanium markets, metal and TiO2, that there's not too many ore producers out there. So they're -- right now for the last year or so, they have, no question, they had a shortage of ore situation, they increase their prices very rapidly, as I promoted quite often that they had to in order to get to a level to produce more oar, because there just was a shortage of oar.

嗯，正如您所知，我們熟悉鈦市場、金屬和二氧化鈦，並且知道那裡的礦石生產商並不多。所以他們——現在，在過去一年左右的時間裡，毫無疑問，他們面臨著礦石短缺的情況，他們迅速提高價格，正如我經常宣傳的那樣，他們必須達到生產更多槳的水平，因為槳短缺。

They definitely increased their prices and got their margins up very substantially. And there's plenty -- there's ample ore now, and we believe there is going to be a significant amount of ore available. Now how that equates to their pricing, that doesn't necessarily correlate that they will significantly reduce their pricing. Logic would tell you that they would want to move more product, but there is no -- we have no assurance of that.

他們確實提高了價格，並大幅提高了利潤。而且現在的礦石儲量充足，我們相信未來將會有大量礦石可供開採。現在，這與他們的定價如何對應，並不一定意味著他們會大幅降低定價。邏輯會告訴你，他們想要銷售更多的產品，但沒有——我們對此沒有保證。

We historically have not gone out very far with pricing on oar. One is the ore guys don't want to do that, but the other thing is we also didn't want to do that. Now, we've had longer term agreements for supply, but that's -- for the quantity versus the price, we have always priced no longer than, probably, a year. And in the last year or so it has been as short as a quarter for some of them, semiannual for some of them. Two different things, there. One is the assured supply, and the other is the pricing.

從歷史上看，我們在定價方面並沒有走得太遠。一是礦石商不想這麼做，二是我們也不想這麼做。現在，我們已經有了長期的供應協議，但是，就數量與價格而言，我們的定價期限通常不會超過一年。在過去一年左右的時間裡，有些公司的註冊週期短至一個季度，有些公司則為半年。那是兩件不同的事情。一是保證供應，二是定價。

Thanks.

謝謝。

Your next question is coming from the line of Gregg Goodnight from UBS.

您的下一個問題來自瑞銀的 Gregg Goodnight。

Good morning, all. Very nice disclosures, as always. Question on your inventories. Your 86% operating rates in the second quarter, your inventories came down. I was wondering on a volumetric basis, how much did your vice inventories come down. Can you give us guidance either qualitatively or quantitatively?

大家早安。一如既往，非常好的披露。關於您的庫存的問題。你們第二季的開工率為 86%，庫存下降了。我想知道，從體積來看，你們的惡習庫存下降了多少。您能否在定性或定量方面給予我們指導？

Well, we produced 6,000 metric tons less than what we sold during the quarter of finished goods.

嗯，我們生產的成品比本季銷售的成品少了 6,000 公噸。

Okay. On a percentage, are your inventories where you're going want them?

好的。從百分比來看，您的庫存是否符合您的要求？

Well, as the finance guy, I would like to have no inventories. But then my sales and marketing people tell me that's just not possible.

嗯，身為財務人員，我希望沒有庫存。但我的銷售和行銷人員告訴我，這是不可能的。

I keep asking the sales guys can't we keep that in advance, so that we're carrying a credit? One thing to really focus on is that the inventories look, if you back up a year or two, and you look and say wow, look at these guys, their working capital is a billion bucks. Well, ore is [300% or 400%] higher, our finished goods are at least 200% higher. The sales, when we sell stuff, the pricing that we put in over the prior couple of years wasn't quite a double, but about that. When you look at it, same volume, I just use the rule of thumb backed up three years ago same exact volume in dollar terms, is probably twice as much, (Inaudible) on the inventory.

我一直問銷售人員，我們能不能提前保留這筆錢，以便獲得信用？真正需要關注的一件事是，如果你回顧一兩年前的庫存，你會說哇，看看這些傢伙，他們的營運資金有十億美元。嗯，礦石價格高出 [300% 或 400%]，我們的成品價格至少高出 200%。就銷售而言，當我們銷售商品時，我們在過去幾年中製定的定價並沒有翻倍，但大約如此。當你查看它時，相同的數量，我只是使用經驗法則，三年前以美元計算的完全相同的數量，可能是庫存的兩倍（聽不清楚）。

So that's one thing to always keep in mind. It looks like inventories have just bloomed everywhere, but it really has an effect of the cost of production that goes into your inventory, and then into your receivables before you collect the money, everything is ratcheted up in price. The volume levels that we've been carrying we feel very comfortable with. I agree with Greg, I just assume not show any inventory, but we kind of like to have some level just so we can service our customers well, but the level we are at right now, we're definitely in a comfort zone, that we're comfortable with that.

所以這是需要時時牢記的一件事。看起來庫存到處都在增加，但實際上它對進入庫存的生產成本有影響，然後在你收回錢之前進入你的應收賬款，所有東西的價格都會上漲。我們對一直攜帶的音量水平感到非常滿意。我同意格雷格的觀點，我只是假設不顯示任何庫存，但我們希望保持一定的水平，這樣我們才能更好地為客戶服務，但我們目前的水平肯定處於舒適區，我們對此感到滿意。

There is no overriding reason right now to significantly reduce it or increase it other than, for as we see the year play out here, if we see kind of a shortage situation potentially developing or the demand picking up, and that's why you see our percentage of production probably ramping up to some extent as we're anticipating that. But I did want to point out that one factor that if you take a couple of years back and start comparing, it looks like we're just bloated with inventory and we're not. It's basically the same levels it historically was.

目前沒有什麼壓倒性的理由來大幅減少或增加產量，除非我們看到今年可能出現某種短缺情況或需求回升，這就是為什麼你會看到我們的生產比例可能會在一定程度上上升，正如我們預期的那樣。但我確實想指出一個因素，如果你回顧幾年前的情況並開始比較，看起來我們只是庫存過剩，但事實並非如此。它基本上與歷史水平相同。

Thanks for that color. Second question, geographically, your operating rates in the second quarter on average were 86%. Would you comment on the differential between, say, North America and Europe.

謝謝你這個顏色。第二個問題，從地理位置來看，你們第二季的平均營業率為 86%。您能評論一下北美和歐洲之間的差異嗎？

Kind of along the lines of relative strength versus weakness in our sales volumes with the weakness in Europe, as you mentioned. That's probably where you saw the bulk of our reduced production rate.

正如您所說，這有點像我們的銷售量相對強勢與弱勢，而歐洲的銷售量則較為疲軟。這可能就是我們生產力下降的主要原因。

Okay. And last question. The -- some folks are trying to reduce ore costs by -- in their chloride process, moving from the synthetic rutile to slag, which is on a relative basis cheaper. Is that a strategy that you guys have adopted, to what extent have you adopted something like that?

好的。最後一個問題。有些人試圖透過氯化法從合成金紅石轉向礦渣來降低礦石成本，因為礦渣相對更便宜。這是你們所採用的策略嗎？你們在多大程度上採取了這樣的策略？

We do look at our ore mix at all of our plants. There are certain optimal mixes that you can run, and we are -- our chloride plants, and we're talking exclusively about chloride at this point, they run -- they are designed to run primarily on a higher slag mix than a rutile or synthetic rutile, however all of those are getting adjusted to get optimum performance based upon the availability and cost consideration. Yes, we do take that into account, and we do adjust our ore mix accordingly.

我們確實會查看所有工廠的礦石混合物。您可以運行某些最佳混合物，我們的氯化物工廠，我們此時專門討論氯化物，它們的設計主要為在比金紅石或合成金紅石更高的礦渣混合物上運行，然而，所有這些都會根據可用性和成本考慮進行調整以獲得最佳性能。是的，我們確實考慮到了這一點，並相應地調整了我們的礦石組合。

On a year-over-year basis would you care to give some guidance on the mix this year versus the mix last year?

與去年同期相比，您是否願意對今年的產品組合和去年的產品組合做出一些指導？

Well, it will be--it will be higher--I don't have a specific percentage, but we will be running a higher mix of slag versus rutile and synthetic rutile.

嗯，它會——它會更高——我沒有具體的百分比，但我們將使用更高比例的礦渣與金紅石和合成金紅石。

Okay, thanks for that. Good luck.

好的，謝謝。祝你好運。

Derek, before you take the next question, I want to circle back and make a, hopefully a clarification, or a point that I would like a couple of the prior questioners to keep in mind. There were a couple of questions about the 50% to 60% increase in our per unit metric ton production cost. I think, based on the question, that you all may have been trying to look at our reported results on a quarter-by-quarter basis, looking at the cost to goods sold, dividing by our sales volumes, which obviously makes perfect sense.

德瑞克，在你回答下一個問題之前，我想先回過頭來澄清一下，或者提出一個觀點，希望前面幾個提問的人能夠記住。關於我們每單位噸生產成本增加 50% 至 60% 的問題有幾個。我認為，基於這個問題，大家可能都試圖按季度查看我們報告的結果，查看銷售成本，除以我們的銷售量，這顯然非常有意義。

I want to point out that with our big international presence you need to keep FX in mind, and if you look -- if you were trying to compare cost to goods sold per metric ton of TiO2 that we sold in the second quarter of 2011, looking at that same metric cost to goods sold per metric ton of TiO2 that we sold in the second quarter of this year, there is a FX impact primarily with respect to the US dollar versus the Euro. Because of that, our euro production costs on a US dollar basis are much lower this year as compared to last year. If you try to do this metric and you were maybe, I'm not coming up with that 50% to 60%, my guess is that FX is going to be a big explanation for maybe what you were missing. Thank you, Derek.

我想指出的是，鑑於我們巨大的國際影響力，您需要考慮外匯因素，如果您嘗試比較我們在 2011 年第二季度銷售的每公噸二氧化鈦的銷售成本，再看看我們在今年第二季度銷售的每公噸二氧化鈦的相同公制銷售成本，就會發現外匯因素主要對美元兌歐元產生了影響。因此，今年我們以美元計算的歐元生產成本比去年低得多。如果您嘗試使用此指標，而您可能沒有得出 50% 到 60% 的結論，我猜 FX 可能會對您遺漏的內容提供很大的解釋。謝謝你，德里克。

Your next question is coming from the line of Des Kilalea from RBC. Des, your line may be on mute.

您的下一個問題來自 RBC 的 Des Kilalea。Des，你的線路可能處於靜音狀態。

It was on mute. A few of questions, the first follow on the previous questioner on the different prices of ore. Could you give us an idea how rutile, SR and slag have performed previously, and what you expect over the next six months. And then also, could you say at the moment what is ore as a percent of pigment costs, do you expect. And finally, Chinese pigment, some of it seems to come out of China, and has been maybe hurting pigment prices in some markets. Can you comment on that?

手機處於靜音狀態。幾個問題，第一個問題延續了上一個提問者關於礦石不同價格的問題。您能否向我們介紹金紅石、SR 和礦渣的先前表現如何，以及您對未來六個月的表現有何預期。另外，您能否說一下目前礦石佔顏料成本的百分比是多少？最後，部分中國顏料似乎產自中國，這可能已經影響了部分市場的顏料價格。您能對此發表評論嗎？

Rob, do you want to take the ore part.

羅布，你想接手礦石部分嗎？

Yes, I can do that. That was a three-part question, as I recall.

是的，我可以做到。我記得這個問題由三個部分組成。

Yes, it was.

是的。

The ore availability there has been -- well, first of all, let me qualify and go back to what -- a comment Steve made earlier. There is the supply versus the pricing, and we have yearly contracts where pricing is fixed for the year, and those are set for the balance of the year on our ore supply. The remainder of the contracts are set on a quarterly or semiannual basis, to the extent that those -- the bulk of those are on a quarterly basis at this point. These negotiations occur later in the quarter, so we don't know, particularly -- I can't be very specific about expected pricing going forward, because we haven't had a lot of those discussions.

那裡的礦石供應情況——嗯，首先，讓我確認一下，然後回顧一下——史蒂夫之前所作的評論。這是供應與定價的問題，我們簽訂的是年度合同，合同中全年的價格都是固定的，這些價格是根據我們全年的礦石供應餘額而設定的。其餘合約按季度或半年簽訂一次，目前大部分的合約都是按季度簽訂。這些談判將在本季度晚些時候進行，所以我們不知道，特別是——我無法具體說明未來的預期定價，因為我們還沒有進行過很多這樣的討論。

What I can tell you is that there is more ore availability in the marketplace, and as we've said based upon -- our expectations based upon our mix of contracts, we do expect the overall cost of the ore -- the products produced to go up [50%] to 60%, and that is a large percentage of that cost increase year-over-year is ore mix. As one of the previous questioners noted, there is significantly more synthetic rutile and rutile availability, which was in very tight supply over the last couple of years, and with cutbacks in production by other producers in the TiO2 industry, there is some additional availability of high-grade chloride feedstock. So I think that answers the first part of your question. The other two parts, Greg, I'll turn it over to you on that.

我可以告訴大家的是，市場上的礦石供應增加了，正如我們所說，根據我們基於合約組合的預期，我們預計礦石總成本——生產的產品將上漲 [50%] 到 60%，而成本同比增加的很大一部分是礦石組合。正如先前一位提問者所指出的，合成金紅石和金紅石的供應量明顯增加，而過去幾年，金紅石的供應量非常緊張，而且隨著 TiO2 行業其他生產商的減產，高品位氯化物原料的供應量有所增加。所以我認為這回答了你問題的第一部分。格雷格，另外兩個部分我將交給你。

Well, let me ask it -- let me clarify something about China, too. There is the middle part that I don't have data for, but -- the Chinese TiO2 market has historically been a low-grade, it's an [ilmenite] based lower grade for feedstock. They have very limited and almost non-existent chloride production. The quality of the TiO2 is lower quality that is -- that comes from this type of low grade ore. It has been primarily consumed internally in -- up until this last year or so -- in the Chinese domestic market.

好吧，讓我問一下——也讓我澄清一些有關中國的事情。中間部分我沒有數據，但是－中國二氧化鈦市場歷來都是低品位的，它是一種以[鈦鐵礦]為基礎的低品位原料。他們的氯化物產量非常有限，甚至幾乎不存在。TiO2 的品質較低，也就是說，它來自這種低品位礦石。直到去年左右，它主要在中國國內市場消費。

The Chinese government has obviously announced plans to stimulate the economy, the domestic economy in China, and before that time period, and even though it has been a robust growth by global standards, they have been, over the last year, exporting a lot more of the lower grade TiO2. But the quality and reliability of delivery, and frankly once the economy comes back a bit, which we expect will be happening in the very near term, a lot of that supply into the marketplace will evaporate as well. So customers, reliability, and quality and service and particularly on the high grade -- high grade -- both ore feedstocks as well as the high grade TiO2, we think, is not really impacted by the Chinese situation.

中國政府顯然已宣布刺激經濟和國內經濟的計劃，而在此之前，儘管以全球標準來看中國經濟已經實現了強勁增長，但在過去的一年裡，中國出口了大量低檔鈦白粉。但鑑於交付的品質和可靠性，坦白說，一旦經濟復甦（我們預計這將在短期內發生），市場上的大量供應也將消失。因此，我們認為，客戶、可靠性、品質和服務，特別是高品位的礦石原料以及高品位的 TiO2，並沒有真正受到中國情況的影響。

Thanks, and just the one question, sorry I pushed them all (Inaudible). What do you estimate ore costs as a percent of pigment costs will be at the moment?

謝謝，只有一個問題，抱歉，我把他們都推了（聽不清楚）。您估計目前礦石成本佔顏料成本的百分比是多少？

We don't disclose the components of our production costs, but we have said that our raw material costs are a very significant component of our overall production costs, and they're obviously a much higher percentage in 2012 compared to last year.

我們沒有揭露生產成本的組成，但我們說過，原料成本是我們整體生產成本中非常重要的一個組成部分，而2012年這一比例顯然比去年高得多。

Thank you very much.

非常感謝。

You next question is from the line of (Inaudible) Shah from Tellus Asset Management.

您的下一個問題來自 Tellus Asset Management 的 Shah（聽不清楚）。

Good morning. Can you talk about the working capital changes during the quarter and for the six months, and also just briefly talk about the liquidity going forward?

早安.您能否談談本季和六個月的營運資本變動情況，並簡要談談未來的流動性？

Yes, I mean on the working capital, obviously if you look at our inventories, and just look at the recorded amount of the inventories in our balance sheet, and Steve kind of alluded to this point earlier, because our production costs are significantly higher this year compared to last year -- I mean even with flat, even quantities of inventories at all levels, raw materials costs, finished goods, (Inaudible) -- you would still be seeing the recorded amount of our inventory increasing using the working capital just because of the higher cost.

是的，我的意思是關於營運資本，顯然如果你看看我們的庫存，看看我們資產負債表中記錄的庫存金額，史蒂夫之前提到過這一點，因為今年我們的生產成本比去年高得多——我的意思是即使各個層面的庫存數量持平，原材料成本、成品（聽不清）——你仍然會看到我們的庫存記錄金額隨著營運資本的增加而增加，這只是因為成本增加而增加成本。

Similarly, if you're looking over a several quarter period and looking at our receivables, because our selling price has been going up significantly throughout most of 2011, you're going to see an increase in the recorded amount of our receivables -- obviously another use of working capital -- even if the underlying metric tons sold were to be flat over that period.

類似地，如果您觀察幾個季度的情況並查看我們的應收帳款，由於我們的銷售價格在 2011 年的大部分時間裡都大幅上漲，您將會看到我們的應收帳款記錄金額有所增加 - 顯然這是營運資金的另一種用途 - 即使在此期間銷售的基本噸數保持不變。

In terms of liquidity, we knew last year that the feedstock -- we were expecting the increase in feedstock ore cost, that's one reason why we were working to increase the selling prices, because we knew that among other things we needed to have working, better cash generated to help fund those working capital requirements. As mentioned earlier we refinanced the most, really only significant portion of debt that we had outstanding then that was, at that time, was due next year that's been refinance on a much longer-term basis.

在流動性方面，我們去年就知道，我們預計原料礦石成本會增加，這就是我們努力提高銷售價格的原因之一，因為我們知道，除其他事項外，我們需要有更好的營運現金流來滿足這些營運資金需求。如同前面所提到的，我們對當時未償還的大部分債務進行了再融資，實際上只是對當時將於明年到期的大部分債務進行了再融資，而這些債務的再融資期限要長得多。

We put a North American $125 million revolving working capital facility in place, there is currently nothing outstanding on that. Our best case is we would never have to use that, but that does provide us some dry powder, in case time-to-time we want maybe take advantage of some favorable ore purchases or something like that. So from our liquidity standpoint, we're very comfortable where we sit today.

我們在北美設立了 1.25 億美元的循環營運資金貸款，目前尚無未償還款項。最好的情況是我們永遠不需要使用它，但這確實為我們提供了一些乾粉，以防萬一我們有時想要利用一些有利的礦石購買或類似的東西。因此，從流動性的角度來看，我們對目前的狀況感到非常滿意。

Okay, and there was a plan to increase the size of the -- your European revolver. Is that still - are you still thinking -- because right now, as I understand, it's fully utilized, the European revolver?

好的，有一個計劃是增加歐洲左輪手槍的尺寸。那是不是仍然——您還在想——因為據我所知，現在歐洲左輪手槍已經被充分利用了？

Yes, the -- subsequent to the quarter end, we did reduce the outstanding balance on that facility. It's not paid off, but we've reduced it by EUR25 million. And we are currently in discussions with the banks about renewing the facility first of all and then also increasing it. We think it's highly likely we will increase the amount of the facility from EUR80 million to EUR120 million, the facility has been EUR80 million since we put it in place back in 2002, and obviously our working capital needs have grown since then, so we think increasing it makes sense. I think we're doing it within the existing bank group, and hopefully we'll have it done perhaps by the end of August or mid-September.

是的，在季度末之後，我們確實減少了該設施的未償餘額。雖然還沒有還清，但我們將其減少了2500萬歐元。目前我們正在與銀行討論首先更新該貸款額度然後增加貸款額度的問題。我們認為很有可能將貸款金額從 8,000 萬歐元增加到 1.2 億歐元，自 2002 年設立以來，貸款金額一直為 8,000 萬歐元，顯然我們的營運資金需求從那時起就不斷增長，因此我們認為增加貸款金額是合理的。我認為我們正在現有的銀行集團內進行這項工作，希望能夠在 8 月底或 9 月中旬完成。

Okay. Thank you.

好的。謝謝。

Your next question is coming from the line of Sanjay Pamani, Foundation Asset Management.

您的下一個問題來自基金會資產管理公司的桑傑帕馬尼 (Sanjay Pamani)。

(Inaudible)

（聽不清楚）

You're talking about the end of the first quarter to the end of the second quarter?

你指的是第一季末到第二季末嗎？

(Inaudible)

（聽不清楚）

We have a higher level of feedstock ore at the end of the second quarter as compared to the first quarter. Just of units on hand.

與第一季相比，我們第二季末的原料礦石水平更高。僅現有單位。

(Inaudible)

（聽不清楚）

Yes.

是的。

(Inaudible)

（聽不清楚）

Well, there is some noise in that analysis from our perspective, because we are virtually fully integrated on the sulfate side having our own mine in Norway, which feeds 100% of the feedstock for our European plants, and then obviously we have a much smaller [SB] plant in North America where we can source that ore from third-parties, so a significant majority of our feedstock on the [SB] side comes from our mine. So obviously, our margins on a Kronos Worldwide basis will be higher on our [SB] product versus the industry as the whole, because we are capturing some profit at our mine in Norway.

嗯，從我們的角度來看，這種分析存在一些噪音，因為我們在硫酸鹽方面幾乎完全一體化，在挪威有自己的礦山，為我們歐洲的工廠提供 100% 的原料，而且顯然我們在北美有一個規模小得多的 [SB] 工廠，我們可以從第三方採購礦石，因此我們 [SB] 方面的絕大多數原料都來自我們的礦山。因此顯然，基於 Kronos Worldwide，我們的 [SB] 產品的利潤率將高於整個產業，因為我們在挪威的礦場獲得了一些利潤。

But I think the question stems more towards the industry as opposed to Kronos specifically. And as Rob was alluding to in China, there have been some short-term fluctuations in the market with Chinese product being more readily available and having an indirect impact on our business as that -- that product goes to a lot of the lower-end markets, and then makes some other products available and increases the competition levels up in the realm where we like to deal in the higher quality grades, for both the (Inaudible). However, we think those fluctuations are really just been a short-term impact and long-term we're still bullish on the fact that the shortage situation is going to come back.

但我認為這個問題更多是針對產業而不是 Kronos。正如羅布所提到的，在中國，市場出現了一些短期波動，因為中國產品更容易買到，對我們的業務產生了間接影響，因為這些產品進入了很多低端市場，然後產生了一些其他產品的供應，增加了我們喜歡經營的更高質量產品的領域的競爭水平，無論是（聽不清）。然而，我們認為這些波動其實只是短期影響，從長遠來看，我們仍然看好短缺局面將會捲土重來。

In 2011, it wasn't like to worldwide economy was all that strong. We would only need to get back to those levels and we would have an extreme shortage again, so I think from an industry standpoint, there has been some kind of merging of margins on [CP and SP], and maybe a little bit higher for us because the vertical integration on the [SP] side, but going forward we would expect it to go back to a more normalized basis.

2011年，全球經濟似乎不太強勁。我們只需要回到那些水平，我們就會再次面臨極度短缺，所以我認為從行業的角度來看，[CP 和 SP] 的利潤率已經出現了某種合併，而且對於我們來說可能稍微高一些，因為 [SP] 方面的垂直整合，但展望未來，我們預計它會回到更正常化的基礎。

And let me add one little -- one -- everything Brian said is absolutely accurate, but one thing. There are differences in quality, significant differences in quality, between the sulfate we produce and a lot of the sulfate you are seeing out in the marketplace right now. The quality is also a significant factor and that is a -- what you are getting and seeing in terms of some of the very low pricing is not really the same product or the same quality of, say, Kronos sulfate grade which is very high -- is a very high quality grade, as well as -- we have certain sulfate grades out of our North American plant that are food grades, and very highly specialized products as well. You really have to look at the entire package of what you are actually selling into the marketplace, which is a much higher quality product coming out of Kronos.

讓我補充一點——布萊恩所說的一切絕對準確，但有一件事。我們生產的硫酸鹽和現在市場上看到的許多硫酸鹽在品質上有差異，差異很大。品質也是一個重要因素，而且，就一些非常低的價格而言，您所得到和看到的並不是相同的產品或相同的質量，比如 Kronos 硫酸鹽等級非常高——是非常高質量的等級，以及——我們在北美工廠生產的某些硫酸鹽等級是食品級，而且也是非常專業化的產品。您確實必須審視您實際銷售到市場上的整個產品包裝，這是來自 Kronos 的更高品質的產品。

Just to amplify what Rob just said is that the TiO2, it appears like a commodity, but it really is sold and manufactured and utilized much like a specialty chemical and to take the point Rob just made, the differences between grades even in higher qualities are pretty extensive, and then if you look at the low end of, say, sulfate that are coming out, primarily, out of China versus even the sulfate that many of the big producers including us produce is a very, very significant difference.

為了進一步說明 Rob 所說的內容，TiO2 看起來像是一種商品，但實際上它的銷售、製造和使用方式與特種化學品非常相似，就 Rob 剛才提出的觀點而言，即使是更高質量的產品，不同等級之間的差異也非常大，然後，如果您看一下主要來自中國的低端硫酸鹽，與包括我們在內的許多大型生產商生產的硫酸鹽。

What we have seen, it was all about back a year or two ago was all these extenders, and things that could reduce TiO2 (Inaudible), and those type of things which never did take off very much. We never did believe that that was going to have that much of an impact. They have actually been displaced even more. Some customers are utilizing the lower grades of Chinese sulfates as effectively extenders of higher grades quality. I think there is more of an impact on probably those products that were supposedly going to reduce the use of TiO2 by the sulfates coming out of China. The big thing that we tell people, and we have seen over and over again, is the Chinese exports and imports are on off switch.

我們看到，一兩年前出現的都是這些增量劑以及可以減少 TiO2（聽不清楚）的東西，而這些東西從來沒有取得太大的進展。我們從來沒想過這會產生這麼大的影響。事實上，他們的流離失所程度甚至進一步加深。一些客戶正在利用中國低等級硫酸鹽作為高等級品質的有效增量劑。我認為，中國出口的硫酸鹽可能會對那些據稱會減少 TiO2 使用量的產品產生更大的影響。我們告訴人們的一件大事，而且我們也一再看到，那就是中國的出口和進口都處於關閉狀態。

Right now, with their lower growth, they have excess production and they are sending it out in the marketplace and it is being used on a low end and extenders and that type of thing. As John pointed out, there are some moves in China to progrowth, a small uptick in that and we expect that that volume coming out of China will disappear. Which will leave the customers utilizing it now to have to find another source, because that just -- that just goes away. It is not a very reliable source, but when it is there it does get used at the low end, again, does get used to mix with other grades and that type of thing.

目前，由於其生長速度較低，產量過剩，並將其放入市場上，用於低端產品和擴展器等。正如約翰所指出的那樣，中國正在採取一些措施來促進成長，出現小幅上漲，我們預計來自中國的出口量將會消失。這使得現在使用它的客戶必須尋找其他來源，因為那隻是——那隻是消失了。它不是一個非常可靠的來源，但當它存在時，它確實會在低端被使用，再次，確實會被用來與其他等級和諸如此類的東西混合。

Great, thanks.

太好了，謝謝。

Your final question is coming from the line of Bob Koort with Goldman Sachs.

您的最後一個問題來自高盛的鮑勃庫爾特 (Bob Koort)。

Thank you very much. Good morning.

非常感謝。早安.

Good morning.

早安.

Following on those last points a bit, would it be fair to characterize the chloride market prices as a little bit more firm than sulfate because of that competitive position at the low end in sulfate?

接下來是最後幾點，由於氯化物在硫酸鹽低端的競爭地位，是否可以將氯化物市場價格描述為比硫酸鹽更堅挺一些？

No question about it. Chloride is -- there are uses of sulfate grades that are (Inaudible) textiles, papers those types of things sulfate gets used, the higher grade sulfate. There is not a dramatic difference in quality of high grade, very high grade sulfate and high grade chloride. But there is so -- there is a huge range of quality and grades in sulfate, whereas most, at the least the western world production of chloride, is a tighter band of quality that comes out of a chloride plant.

毫無疑問。氯化物是－硫酸鹽的用途很廣，（聽不清楚）紡織品、紙張，這些物品上都會用到硫酸鹽，硫酸鹽的等級越高。高品位、超高品位硫酸鹽和高品位氯化物的質量差異並不大。但事實是，硫酸鹽的品質和等級範圍非常廣泛，而大多數氯化物（至少是西方世界生產的氯化物）的質量範圍都很窄。

I think it would be fair to say that the chloride, the use of chloride in finished products by customers many of them say they wouldn't consider using the sulfate grade, it just doesn't have the same characteristics. So they are pretty bound to the chloride. There is definitely markets for both. But I think the basic premise of your question is probably pretty accurate that there is a tighter band around there and less of a likelihood of production outside of the current chloride producers.

我認為公平地說，氯化物，客戶在成品中使用氯化物，其中許多表示他們不會考慮使用硫酸鹽級，因為它不具有相同的特性。所以它們與氯化物緊密相關。兩者都肯定有市場。但我認為你問題的基本前提可能是相當準確的，即那裡的產量範圍更窄，而且在目前的氯化物生產商之外生產的可能性較小。

And what would you attribute -- in the first quarter you guys had substantially better volumes, even here in the second quarter, than the industry. What is it about your product slate or your go to market that has provided you a much better volume development than the industry has seen?

您認為這歸因於什麼——第一季度，你們的銷量明顯好於行業平均水平，甚至第二季度也是如此。您的產品系列或市場定位如何讓您取得比業界更好的銷售成長？

Just better product.

只是更好的產品。

And the last thing, you noted that the ore industry has sufficient margin to reinvest, but even though you guys have pretty darn significant margins, you are not quite there yet. What kind of metrics do you put behind that, those comments and I would suspect maybe some of your customers think you are making plenty good margin to start expanding. What is the difference you see?

最後一點，您提到礦石產業有足夠的利潤空間進行再投資，但儘管您們的利潤空間相當可觀，但還沒有達到那個水準。您在這些評論背後建立了什麼樣的衡量標準？我猜也許您的一些客戶認為您賺取了足夠的利潤來開始擴張。您看到什麼不同？

Well, we were hearing that a year ago, that golly, aren't you guys making enough money to expand yet? No question, as an industry as is a whole, it looked like it was headed that way. There were some announcements, DuPont made some announcements and everybody looks at it. We have been in the industry for a very long period of time, and a margin at one point in time doesn't do you a bit of good because if you start at our rough calculation, if you started a Greenfield plant today, it is five years before you have got production off of it at a very, very significant cost. 150,000 metric ton plant we roughly feel like with the bells and whistles on it, you are talking about $1 billion investment. The key to expansion of production capacity is the sustainability.

嗯，我們一年前就聽說過，天哪，你們還沒賺到足夠的錢來擴張嗎？毫無疑問，整個產業似乎正朝著這個方向發展。有一些公告，杜邦發布了一些公告，每個人都在關注。我們在這個行業已經經營了很長一段時間，某一時間點的利潤並不會給你帶來任何好處，因為如果按照我們的粗略計算，如果你今天啟動一個綠地工廠，那麼需要五年的時間才能以非常非常高的成本開始生產。我們大致覺得，這座 15 萬公噸的工廠加上一些花俏的配置，投資額就高達 10 億美元。產能擴張關鍵是永續性。

You have got to look out at what is the likelihood five years from now, you are going be producing profit that will actually give you a return on that investment. I think everybody learned in the TiO2 industry twenty some years ago the pain of putting too much production in too early. So from a -- the margins now aren't even remotely close. It is even questionable to do much bottle necking at the current levels of profitability and that was to the thanks of our friends at the ore producers that took a big chunk of the profit margin out of the TiO2. So we have a lot of ground to make up before I think any one even remotely think about putting in major expansions. But the key is it is very costly, very long time frame, and you got to have -- I mean a sane person, people that are not financially rational might go out and build a plant, but they also may lose it because the profitability is not there to pay for it.

你必須考慮五年後產生利潤的可能性有多大，這樣你才能真正獲得投資回報。我想二十多年前，鈦白粉產業的每個人都體驗到了過早投入過度生產的痛苦。所以從 — — 現在的利潤率還遠遠不夠。在目前的獲利水準下，是否能進行太多的瓶頸控制甚至是值得懷疑的，這要感謝我們的礦石生產商的朋友，他們從 TiO2 中獲取了很大一部分利潤。因此，我認為在任何人考慮進行大規模擴張之前，我們還有很多工作要做。但關鍵是它的成本非常高，週期非常長，而且你必須——我的意思是一個理智的人，那些財務上不理性的人可能會出去建造一個工廠，但他們也可能會失敗，因為沒有足夠的盈利來支付它。

So I think that most people look at that and it is really again the lessons of 20 years ago of building plants betting on the future really we are paying for, for a lot of companies, including us. We built the last plant in the western world just in time for it to come online in a down cycle. So that -- and same thing happened to DuPont. They built the last [chloride] plant in the world in Taiwan.

所以我認為大多數人都會想到這一點，這實際上又是20年前的教訓，即押注未來建造工廠，而這對包括我們在內的許多公司來說都是真正的代價。我們在西方世界建造了最後一家工廠，恰逢其時，該工廠正值經濟低迷期，並投入生產。所以——同樣的事情也發生在杜邦身上。他們在台灣建造了世界上最後一座[氯化物]工廠。

I think there is -- I think people are interested and demand will drive more capacity at some point in time. But with this downtick that we have seen in demand and softening of prices and demand and that keep of thing has given everybody a wakeup call that you better be real sure that your profitability is going to be maintained for an extended period of time. And unfortunately for the users of TiO2 as several people have pointed out we don't need a robust recovery to get back to shorting situation, just get back to where we were last year and if you started right now you got five years before you are going to see, four or five years, something like that, some major Brownfield can be put in in three or four. But as demand grows, we think the lines are so tight now that the extended shortage will be extended even more. And for the point that you just made is the margins are just not there.

我認為有——我認為人們感興趣並且需求將在某個時間點推動更多的產能。但隨著我們看到需求下降以及價格和需求疲軟，這種情況給每個人敲響了警鐘，你最好確保你的盈利能力能夠在較長時間內保持下去。不幸的是，對於 TiO2 的用戶來說，正如一些人指出的那樣，我們不需要強勁的復甦來回到短缺的局面，只需回到去年的水平，如果你現在開始，你還有五年的時間，你會看到四五年，諸如此類的事情，一些主要的棕地可以在三四年內投入使用。但隨著需求的成長，我們認為現在的供應非常緊張，短缺的情況將會進一步延長。而您剛才提到的觀點是，利潤根本就不存在。

Terrific. Thanks for the help.

了不起。謝謝你的幫忙。

At this time I'm showing no further questions in queue. I would like to turn the call back over to Kronos Worldwide for any closing remarks.

目前，隊列中沒有其他問題。我想將電話轉回給 Kronos Worldwide 以便做最後發言。

Thanks for listening today, and we will talk to you in three months.

感謝您今天的收聽，我們將在三個月後再次與您交談。

Ladies and gentlemen, that concludes today's conference. We thank you for your participation. You may now disconnect. Have a great day.

女士們、先生們，今天的會議到此結束。我們感謝您的參與。您現在可以斷開連線。祝你有美好的一天。