3Q 2018 Earnings Presentation November 2, 2018 Forward Looking - PowerPoint PPT Presentation

3Q 2018 Earnings Presentation November 2, 2018

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: 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; our operations requiring substantial capital; failure to develop and commercialize new products or technologies; loss of significant customer relationships; adverse trade and tax policies; extensive environmental, health and safety laws that apply to our operations; hazards associated with chemical manufacturing, store and transportation; litigation associated with chemical manufacturing and our business operations generally; inability to acquire and integrate businesses, assets, products or technologies; protection of our intellectual property and proprietary information; prolonged work stoppages as a result of labor difficulties; cybersecurity and data privacy incidents; failure to maintain effective internal controls; 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 and indebtedness incurred in connection with the spin-off; fluctuations in our stock price; and tax reform or other changes in laws or regulations applicable to our business. 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, 2017 and our subsequent Quarterly Reports on Form 10-Q. 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. 3Q 2018 Earnings Presentation – November 2, 2018

Overview 3 • 3Q18 results: Sales $369M, up ~1%; EPS $0.18; Planned plant turnaround ~$30M pre-tax income impact, lower plant utilization rates • 3Q18 tax rate 4.0% – filing of 2017 tax return • Cash flow generation continues to improve: 3Q18 Cash flow from operations $51M, up 34%; 3Q18 YTD Cash flow from operations $128M, up 30% • Repurchased $25.6M of shares through October 26 th ($2.7M in 2Q, $16.9M in 3Q, $6.0M in October) • Current favorable nylon industry conditions expected to continue; Expect improved nitrogen fertilizer environment through 2018/2019 planting season • Continued acetone price/raws pressure – oversupply of acetone globally, propylene input costs • FY18 Capex tracking to ~$110M; FY19 Capex: expect continued acceleration of high-return growth and cost savings projects • FY19 pre-tax income impact of planned plant turnarounds expected to be $35-$40M 3Q 2018 Earnings Presentation – November 2, 2018

3Q 2018 Financial Summary 4 Strong Cash Flow While Managing Through Planned Plant Turnaround Comments 3Q 2017 3Q 2018 ($ Millions, Except Per Share Amounts) • Sales Up ~1%: Volume (10%), Price +10% Sales $366.7 $368.7 – Raw Material Pass Through +10%, Market Pricing ~Flat • 3Q18 Planned Plant Turnaround ~$30M (vs. ~$4M in 3Q17) EBITDA $50.3 $20.0 • Lower Production Output 13.7% 5.4% Margin % • Higher Raw Material Pass Through Impacts Margin % • Tax Rate 4.0% – Filing of 2017 Tax Return Net Income $21.3 $5.5 • Interest Expense Down ($0.7M) EPS (Diluted) $0.68 $0.18 • 3Q18 Share Count 31.0 Million • Cash Flow From Operations $51M, Up $13M vs. Prior Year Free Cash Flow $18.3 $31.3 • Capex $19M, ~Flat vs. Prior Year 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 3Q 2018 Earnings Presentation – November 2, 2018

Sequential EBITDA Performance (2Q18  3Q18) 5 Planned Plant Turnaround and Ammonium Sulfate Seasonality Key Sequential Drivers EBITDA ($M) Performance Considerations Planned Plant Turnaround • ~$30M in 3Q18 vs. ~$10M in 2Q18 • 3Q18 ammonia plant turnaround completed three days earlier than expected Ammonium Sulfate Seasonality • Typical seasonal decline with new season fill in 3Q $53 • Domestic ammonium sulfate prices typically strongest during 2Q fertilizer application; 3Q characterized by higher export standard sales $20 Business Performance 2Q18 3Q18 • Operational: Lower production output pre- and post- turnaround; Modest impact from hurricanes • Industry: Challenging acetone supply/demand dynamics, continued favorable nylon industry conditions See Appendix in this presentation for a reconciliation of EBITDA which is a non-GAAP measure 3Q 2018 Earnings Presentation – November 2, 2018

Nylon Industry Outlook 6 Industry Operating Around Marginal Producer Economics Nylon Key Industry Spreads (1) 3Q18 YoY 3Q18 vs. 2Q18 • North America supply/demand Global Composite BNZ-CPL 14% 0% generally in balance What We’re Asia BNZ-CPL 39% 0% • Environmental policy and Asia CPL-Resin (3%) 3% Seeing feedstock constraints driving 1600 China dynamics 1200 Spread ($/MT) • Continued dynamic China 800 supply environment What We’re 400 • Regional supply/demand Expecting conditions to support margin 0 over raws Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Global Composite BNZ-CPL Spread (1) Sources: Tecnon OrbiChem and Wood Mackenzie Asia BNZ-CPL Spread Asia = Caprolactam Asia Import Contract (Taiwan & S. Korea) Asia CPL-Resin Spread Global Composite = Weighted Avg Spreads From U.S., Europe, China, Other Asia 3Q 2018 Earnings Presentation – November 2, 2018

Ammonium Sulfate (AS) Industry Outlook 7 Improved Industry Dynamics as New ’18/’19 Season Begins Ammonium Sulfate Key Industry Prices (1) 3Q18 YoY 3Q18 vs. 2Q18 • AS price movement modest relative to recent nitrogen pricing Corn Belt Granular AS 14% 0% Corn Belt Urea 28% 11% What We’re • Firm global urea pricing supported by China utilization Seeing 800 1400 and higher energy costs (granular $/ston N content basis) Avg Corn Belt AS price Avg Corn Belt Urea price 700 ($/ston N content basis) • Sulfur input costs up significantly 1200 600 • Fertilizer pricing to strengthen seasonally into Spring 1000 500 What We’re • Nitrogen acres expected to increase Expecting 800 400 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 • Continued demand growth for 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 3Q 2018 Earnings Presentation – November 2, 2018