2Q 2017 Earnings Presentation August 10, 2017 Forward Looking - PowerPoint PPT Presentation

2Q 2017 Earnings Presentation August 10, 2017

Forward Looking Statements 2 This presentation contains certain statements that may be deemed “forward - looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical fact, that address activities, events or developments that our management intends, expects, projects, believes or anticipates will or may occur in the future are forward-looking statements. Forward-looking statements may be identified by words like "expect," "anticipate," "estimate," “outlook”, "project," "strategy," "intend," "plan," "target," "goal," "may," "will," "should" and "believe" or other variations or similar terminology. Although we believe forward-looking statements are based upon reasonable assumptions, such statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results or performance of the company to be materially different from any future results or performance expressed or implied by such forward-looking statements. Such risks and uncertainties include, but are not limited to: our inability to achieve some or all of the anticipated benefits of the spin-off from Honeywell including uncertainty regarding qualification for expected tax treatment, indebtedness incurred in connection with the spin-off, and operating as an independent, publicly traded company; fluctuations in our stock price; general economic and financial conditions in the U.S. and globally; growth rates and cyclicality of the industries we serve; the impact of scheduled turnarounds and significant unplanned downtime and interruptions of production or logistics operations as a result of mechanical issues or other unanticipated events such as fires, severe weather conditions, and natural disasters; price fluctuations and supply of raw materials; adverse trade and tax policies; extensive environmental, health and safety laws that apply to our operations; litigation associated with chemical manufacturing and our business operations generally; loss of significant customer relationships; protection of our intellectual property and proprietary information; cybersecurity incidents; failure to maintain effective internal controls; and prolonged work stoppages as a result of labor difficulties. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this presentation. Such forward-looking statements are not guarantees of future performance, and actual results, developments and business decisions may differ from those envisaged by such forward-looking statements. We identify the principal risks and uncertainties that affect our performance in our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2016. Non-GAAP Financial Measures This presentation includes certain non ‐ GAAP financial measures intended to supplement, not to act as substitutes for, comparable GAAP measures. Reconciliations of non ‐ GAAP financial measures to GAAP financial measures are provided in the appendix of the presentation. Investors are urged to consider carefully the comparable GAAP measures and the reconciliations to those measures provided. Non-GAAP measures in this presentation may be calculated in a way that is not comparable to similarly-titled measures reported by other companies. 2Q 2017 Earnings Presentation – August 10, 2017

Overview 3 • Continued Strong Results in 2Q17: Sales $361M, Net Income $26M, Cash Flow from Operations $30M • Strong Operating Performance and Production Output Across Manufacturing Sites • Favorable 1H17 Conditions Across Nylon and Intermediates; Nitrogen Fertilizer Fundamentals Remain Challenging • 2Q17 Planned Plant Turnarounds Completed Successfully; Expect 4Q17 Planned Turnaround Impact to Pre-Tax Income of ~$20M • Global Caprolactam Supply / Demand Dynamics Normalizing with Industry Spreads Moderating From 1H17 Highs 2Q 2017 Earnings Presentation – August 10, 2017

2Q 2017 Financial Summary 4 Improved Financial Results Driven by Strong Operational Performance Comments 2Q 2016 2Q 2017 ($ Millions, Except Per Share Amounts) • Volume +3%, Price +14% $308.4 $361.4 Sales – Raw Material Pass Through +10%, Market Pricing +4% • $34.1 $54.6 Improved Production Volume and Favorable Market Pricing EBITDA • EBITDA Margin Up 400 bps vs. Prior Year 11.1% 15.1% Margin % • $15.0 $25.8 Interest Expense $1.9M Net Income • EPS Up 69% vs. Prior Year $0.49 $0.83 EPS • Share Count 31.0 Million (Diluted) • Cash Flow From Operations $30M Free Cash Flow • $23.1 $15.0 Capex $15M, ~Flat vs. Prior Year • Working Capital Timing, Turns Remain Greater Than 20 See Appendix in this presentation for a reconciliation of EBITDA, EBITDA Margin, and Free Cash Flow, which are non-GAAP measures; Free cash flow = net cash provided by operating activities less capital expenditures 2Q 2017 Earnings Presentation – August 10, 2017

Nylon Market Outlook 5 Global Caprolactam Supply / Demand Dynamics Normalizing Nylon Key Industry Spreads (1) 2Q17 YoY 2Q17 vs. 1Q17 • Pricing/spreads more regionalized: Global Composite BNZ-CPL 30% (-9%) tighter supply conditions in NA and Europe, dynamic China supply What We’re 31% (-27%) Asia BNZ-CPL environment Asia CPL-Resin 17% (-7%) Seeing • Price increases more than 1600 covering raws 1400 1200 Spread ($/MT) • North America supply/demand 1000 remains in balance 800 What We’re 600 • Continued dynamic China 400 supply environment Expecting 200 • Resin pricing continues to track 0 underlying caprolactam (1) Sources: Tecnon OrbiChem and PCI Wood Mackenzie Global Composite BNZ-CPL Spread Asia = Caprolactam Asia Import Contract (Taiwan & S. Korea) Asia BNZ-CPL Spread Global Composite = Weighted Avg Spreads From U.S., Europe, China, Other Asia Asia CPL-Resin Spread 2Q 2017 Earnings Presentation – August 10, 2017

Ammonium Sulfate (AS) Market Outlook 6 AS Pricing Stable Sequentially; Nitrogen Fundamentals Remain Challenging Ammonium Sulfate Key Industry Prices (1) • Global urea supply additions 2Q17 YoY 2Q17 vs. 1Q17 continue to pressure nitrogen Corn Belt Granular AS 0% 1% pricing Corn Belt Urea (-15%) (-22%) What We’re • Nitrogen demand impacted by 1600 800 Seeing low global grain pricing (granular $/ston N content basis) Avg Corn Belt AS price 1400 700 Avg Corn Belt Urea price • Late planting season demand ($/ston N content basis) tailing off 1200 600 • Tough agriculture fundamentals 1000 500 for 2017 / 2018 planting season 800 400 What We’re • Cautious buying behavior ahead 600 300 of new season fill Expecting Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 • Sustain AS value proposition on sulfur nutrition Avg Corn Belt AS price (granular $/ston N content basis) Avg Corn Belt Urea price ($/ston N content basis) (1) As reported in Blue, Johnson 2Q 2017 Earnings Presentation – August 10, 2017

Chemical Intermediates Market Outlook 7 Stable End Market Environment Chemical Intermediates Key Industry Prices (1) • 2Q17 YoY 2Q17 vs. 1Q17 Phenol / Acetone demand steady; Industry turnaround Acetone, Large Buyer 42% (-6%) What We’re activities tighten supply 43% (-13%) Refinery Grade Propylene Seeing 60 • Refinery grade propylene (RGP) input price up significantly in 1H17 Cents per Pound 40 • Stable North America market environment What We’re 20 Expecting • Acetone supply/demand in balance 0 Acetone, Large Buyer Refinery Grade Propylene (1) As reported in IHS Markit 2Q 2017 Earnings Presentation – August 10, 2017

Operational Excellence 8 Driving Higher Uptime, More Stable Production and Higher Returns Annualized Plant Production • 1H17 Production Up 7% vs. Prior Year and 9% Above 2012-2015 Average – Continuing to Benefit from Upgrades and Reliability Improvements • Driving Maturity of our Mechanical Integrity Programs, Turnaround Excellence – Focused Maintenance Capex Drives More Stable Production, Higher Returns – Critical Equipment Initiative Enhances Long-Term, Reliable Supply Position • 2017 Planned Turnarounds Expected to be In-Line with Historical Levels in Total – Turnarounds Key to Safe, Sustainable and Improved Operations 2012-2015 Avg 1H16 1H17 – 2Q17 Turnaround Completed on Time and on Budget – 4Q17 Turnaround: Expect ~$20M Impact to Pre-Tax Income Frankford Annual Capacity: 1.1B lbs Phenol Hopewell Annual Capacity: 795M lbs Caprolactam Chesterfield Annual Capacity: 440M lbs Nylon 6 Resin 2Q 2017 Earnings Presentation – August 10, 2017

2H 2017 Framework 9 Continued Strong Plant Production, Monitoring Market Pricing 2H17 vs. 1H17 Expectations • North America supply/demand remains balanced Nylon Spreads • Potential capacity adds in China • Seasonal demand to drive pricing Ammonium Sulfate Pricing • Higher export volume 2H17 vs. 1H17 • Movement in oil-based raw materials impacts top-line Raw Materials • ~50% of sales covered by formula price agreements • Continued high utilization rates Operations • 4Q17 planned turnaround impact to pre-tax income of ~$20M • 1H17 capex ~$48M, continue to expect ~$90M FY17 Capital Expenditures • Elevated HSE spend 2Q 2017 Earnings Presentation – August 10, 2017