Interest expense declined to $28.4 million in 2011, a reduction of $16.2 million compared with 2010. The reduction was driven by lower average borrowing levels, reduced average interest rates on borrowings and reduced amortization of debt issuance costs. Interest expense in 2010 included a $2.3 million write-off of debt issuance costs related to prepayments of the Company’s term loans.

Losses on extinguishment of debt were minimal in 2011, down from $23.0 million in 2010. The 2010 losses included a write-off of unamortized fees and the difference between the carrying value and the fair value of the portion of the Company’s 6.5% Convertible Senior Notes purchased during 2010. The purchases were made as a result of a tender offer and subsequent purchases of the notes. The losses on extinguishment also included a write-off of unamortized fees associated with the Company’s previous credit facility.

Total debt on December 31, 2011 was $309 million compared with $295 million at the end of 2010. Cash flow from operations was $53.2 million during 2011 driven by net income, depreciation and amortization, and the elimination of precious metal deposits, partially offset by increased working capital requirements.

2012 Outlook

The Company expects 2012 sales, excluding precious metal pass-throughs, to be approximately the same as in 2011, after adjusting for the negative impact of lower forecasted foreign exchange rates. Sales of precious metals are expected to decline due to lower average prices and lower volume. The sales outlook assumes that cautious customer ordering patterns will continue in response to generally lower regional growth forecasts. However, the Company’s sales outlook does not anticipate a broad recessionary environment in any region. Foreign currency exchange rates used to estimate 2012 sales are assumed to be equal to year-end 2011 values, which were lower than the average rates for 2011.

Sales of electronic materials products are expected to be lower in 2012 compared with 2011. Sales of these products are expected to improve during the course of 2012, with most of the improvement expected in the second half of the year. However, the strength and timing of a global recovery in demand for solar pastes remains uncertain.

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