We also do not plan to update any forward-looking statements during the quarter. Please note that information recorded on this call speaks only as of today April 27, 2012, and therefore, you are advised that time sensitive information may no longer be accurate at the time of any replay.In addition, some of our comments may reference non-GAAP financial measures and reconciliations to the most directly comparable GAAP financial measures, and other associated disclosures are contained in our earnings release and on our website. And with that, I’ll turn the call over to Mike. Mike McDonnell Thanks, Rishi. Good morning, everyone, and thank you for joining the call. This morning, I’ll continue our efforts that began last year to provide more transparency to investors and how our inherently stable fee-based business model works, why we have an impact from butadiene price changes and what that impact is relative to our underlying earnings. I’ll also provide a clear explanation of the drivers behind our first quarter results and an update on current market conditions. I am pleased with our overall EBITDA results of $45 million for the quarter and with our underlying results of $28 million when excluding the butadiene price impact of $17 million in the quarter. Our results compared well versus the very strong prior year quarter when we experienced relatively higher market demand and more plentiful feedstock supply. This quarter’s performance was achieved in spite of the challenges of limited feedstock volume from the abnormally high concentration of ethylene plant outages and somewhat weaker demand for certain products relative to last year. Our performance was driven by our strategies of service and fee expansion, operational excellence and targeted volume growth. And we also benefitted from higher fuel values in the quarter that impacted our butane-1 and fuel product margins. Our employees did a great job in working with our suppliers and customers to manage through the feedstock constraints during the quarter. Overall the company continued to execute well.
I’d like to discuss each of these drivers in turn. As we anticipated and communicated during the last several investor calls, U.S. ethylene industry is experiencing an unusual number of extended turnarounds during the first half of 202. As a consequence, we were challenged by the reduced amount of available crude C4 feedstock, which negatively impacted our production and sales volumes for all products within our C4 processing segment and for one product line within our performance products segment.At the same time, end-use demand for our products did improve sequentially from the fourth quarter. But demand in certain product markets such as synthetic rubber remained below the levels of last year. You may recall that the first half of 2011 was characterized by demand improvement and inventory building based on an improved global economic outlook. This quarter feedstock supply was the most significant factor but the relatively soft demand in certain markets limited some of the market impact of those supply constraints we experienced. Volume in our C4 processing segment was down 13% versus prior year due to these feedstock constraints. Volume in our performance products segment was down 24% due in part to the impact of the successful yield improvement projects that reduced the volume of negligible margin by-product. Volume was also negatively impacted to a lesser degree by the ethylene plant outages. It’s also important to point out that the first quarter of 2011 was a strong volume quarter for this segment and particularly for polyisobutylene products or PIB products that are sold into the fuel and lube additives markets. In addition to the volume impact in performance products, margins in the segment were compressed temporarily by the timing lags between the rapidly rising propylene feedstock costs and the contractual pass-through of these costs into our selling prices.
Now I would like to address butadiene supply demand and price. Supply and demand came back into a more supply-constrained conditions in the quarter following the sharp reduction in demand in the fourth quarter which, as you recall, was a significant imbalance between supply and demand in that quarter.Read the rest of this transcript for free on seekingalpha.com