BofAML 2011 In Dust Rials Conference

8/3/2019 BofAML 2011 In Dust Rials Conference

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Bank Of America Merrill L nch 2011 Industrials Conference

z

Andreas KramvisPresident and CEO, Specialty Materials


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Forward Looking Statements

This report contains forward-looking statements within the meaning of Section

21E of the Securities Exchange Act of 1934. All statements, other than

statements of fact that address activities events or develo ments that we or

our management intend, expect, project, believe or anticipate will or may occurin the future are forward-looking statements. Forward-looking statements are

experience and trends, current economic and industry conditions, expected

future developments and other relevant factors. They are not guarantees of, ,

may differ from those envisaged by our forward-looking statements. Our

forward-looking statements are also subject to risks and uncertainties, which

can affect our performance in both the near- and long-term. We identify theprincipal risks and uncertainties that affect our performance in our Form 10-K

and other filings with the Securities and Exchange Commission.

1 Bank of America Merrill Lynch 2011 Industrials Conference December 6, 2011


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Specialty Materials Overview

$5.6-$5.7

Sales Segment Margin %

Recent HighlightsFinancials

Record 3Q 2011 Performance

- Sales u 25%, O . Mar ins 17.3%

($B) ~17%CAGR

$4.1.

15.8%

1~18.5% Securing Major Wins Across Portfolio

- Robust backlog; strong energy demand

.

2009 2010 2011E

Business Units Geographic Mix

Sunoco Phenol Acquisition Closed

- Secured critical raw material input

UOP

NorthAmerica

LatinAmerica

AdvancedMaterials

EMEA


St rong Per form anc e T hrough Cyc le

Asia Pacific


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Business And End Market Update

UOP

Continued global investments tomeet refined product demand

High win rates and execution of

Backlog conversion key growth driver

Continued high win rates on globalrefining & petrochemical capacity

Resins &Chemicals

backlog driving strong results

Overall tight caprolactam supply /demand, however China pricesmoderating

investments

Volume growth, phenol accretion

Continued tight supply / demand

FluorineProducts

g crop pr ces spurr ng er zer(AS) demand

Moderation from record pricelevels due to increased su l

env ronmen

Continued pricing pressure Emer in Re ion volume rowth

SpecialtyProducts

Continued strength in Armor, Aclar

New product wins

Successful new product launches

ElectronicMaterials

Pockets of softening demand

Weaker demand following 1Hinventory build due to supply

Moderate growth driven by mobiledevice market and new applications


Envi ronm ent Posi t ive, How ever Uncer t a int y Overhang


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Key Differentiators

24%Operating Business

, .Segment Margin, Percent

20%

Approach &

Leadership

Decision

Week Peer Crown Jewels

12

16%Analytical

Capabilities &Innovation

Technology

Investments &

Honeywell SM

8%

Engine rocess Specialty

4%

2005 2006 2007 2008 2009 2010 2011E

PlantPerformance &ProcessTechnology

HOS &Plant Strategic

Plans Peer Crown Jewels based on UTX Otis, TYC ADT, EMR Process Management,DHR Test & Measurement, MMM Industrial Segments


Driv ing Super ior F inancia l Per for m anc e

pec a y ase on pec a y em ca compan esReporting as of 11/29/11


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Three Business Models

New

Low-Global-WarmingPlatform

Molecule screening anddiscovery

FluorineProducts

Molecule &

Scale-UpNew Nylon Resins

Process scale-up important

Major plant investmentsbefore product launch

-Technology

Resins &Chemicals

TechnologyLeadershi

More From A Barrel Of Oil

Chemicals From NaturalGas & Coal

Technology licensing model

Invent, demonstrate and licenseUOP

Bio-Renewables ngo ng supp y o ca a ys s

Fast-CycleApp.

Develop.Next-Generation

Photovoltaic Materials

service ideas

Customizing existingtechnologies

SpecialtyProducts


St rong Tec hnology And Business Al ignm ent

SpectraFiber Fast time to market


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Fluorine Products: 2011E Sales ~$1.1B

Heat Transfer/200

250 US Housing Starts (1)

HON HVAC Refrigerant Volume

Structural

e r geran s

Industrial

Nuclear

100

150

Heat Transfer / RefrigerantsResidential / Commercial / Supermarket / Mobile

nc osures

02006 2007 2008 2009 2010 2011E

US Housing Starts (1)

Structural Enclosures

Nuclear Services

Applications

Insulation / Roofing / Weatherization Solutions forResidential / Commercial and Appliances

75

100

125

HON Foam Volume

Industrial Products

Conversion Capabilities and InventoryManagement

Differentiated Enabling Aerosol, Solvent and 0

25

50


(1) Source: American Chemistry Council

(2) Source: Actuals: The Association of Home Appliance Manufacturers; 2011 Estimate: Honeywell

Grow t h Exc eed ing Macros


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Next-Generation LGWP Solutions

Environment:

Aerosol /Insulation Panels

Foam Insulation /Solvents

StationaryAir Conditioning

>

MobileAir-Conditioning

GWP of 4 vs. 1430

Performance:

Safety:

.

Non-Flammable

Meets All Requirements

.

Non-Flammable

Improved Energy Efficiency

Same Energy Efficiency

Safer Than Hydrocarbons

Non-Flammable

Meets All Requirements

Cost-to-Serve:n se o ay ear rop- n ep acement

Solutions by Applications

Annual SalesOpportunity: ~$100M ~$200M ~$300M

Near Drop-in Replacement

~$300M


Creat ing Nex t Generat ion Tec hnology Leader ship Posi t ion


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Resins And Chemicals: 2011E Sales ~$1.4B

Capro Demand >> Supply

- Asia Driving 60% of Global GrowthResins

Volume(kMT) AvailableCapacity(@90%) CPLDemandEstimate

Demand

Ammonium

Sulfate

Caprolactam

Caprolactam4,000

>Supply

enoIntermediates

Nylon 6 Resin

Key Ingredient in Making Nylon Resins and Fibers

Used in the Manufacture of a Wide Range of Products

3,500

mmon um u a e er zer

Phenol / Intermediates

Caprolactam Co-Product Used for Crops and Lawns

Phenol, Acetone and Co-Products From

Increased Competitive Advantage via HOS

Expanding Global R&D Capabilities

- Sulf-N 26, Fishing Filament for Asia,


St rong Global Franc hise

of Various Chemicals Flexible Packaging


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Specialty Products: 2011E Sales ~$1.2B

Attractive businesses serving nichesegments in larger markets

ElectronicMaterials

~$0.4B

PerformanceMaterials

~$0.8B

Solutions represent small % of total cost,but deliver high value or critical need

Global applications development

Performance Films

capabilities reduce customer conversioncycle-times and drive new market

creationHealthcare, Solar and Industrial Applications

High Strength, Light Weight Fibers

Military and Law Enforcement Armor

Rigorous sales pipeline processesclosely aligned with deployment ofglobal sales, technology and capital

Electronic Materials

Semiconductor Targets, Polymers and Chemicals

pec a y ves

High Performance Waxes and Lubricants Funding high return, incremental,

organic growth investmentsPotentialbolt-on ac uisition o ortunities


SMs Fast Cycle A ppl ic at ion Engine


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Fast Cycle Applications Engine

PerformanceFilms

Highest Moisture Barrier

Best Cost / Performance

High Growth Industries

High Strength Lightest Weight

Best Ballistic Performance

Small % Of Costs

Mission Critical ApplicationsArmor FishingRope

Additives High Value Add

Fragmented; Profitable NichesAdhesives Oral Care Asphalt

ElectronicMaterials

Niche Applications

High Barriers To Entry

Extending To New Markets


Leverage Technology Pla t for m s To Create New Market s

em con uc ors


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UOP

egmen sFinancials

$1.9$1.6

Sales $B Petrochemicals

Refining

Gas &Hydrogen

Manufacturin

Geographic Mix Products

Adsorbents andAluminas

rocess ec no ogy an qu pmenLicensing, Services and Equipment for Refining,Petrochemical and Gas Processing Industries

Catalysts, Adsorbents and SpecialtiesMaterials for Process Technology and

LatinAmerica

EMEA

Renewable Energy and ChemicalsProcess Technology for Transportation Fuels andChemicals

ManufacturingNorth

America

Asia Pacific


Indust r y Leading Technology And Solu t ions


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Current UOP Landscape

EmergingRegion Growth

Continued capacity investment driven by energysecurity needs and local demand

mp ca on oa ou re ee ng

ImprovedRefining Margins

Refinery utilization is increasing Product prices closing gap on crude US refiner upgrading investments to capitalize on U.S.

Shale GasDevelopment

.

Increased unconventional gas development creatingnatural gas liquids recovery/processing opportunities

Stimulated US petrochemical projects

Oil PriceVolatility

Limited impact due to short-term swings Long-term pricing drives investment economics

FinancialUncertainty

Financing challenges causing some project delays Renewed focus on most economically viable projects


Mid EastUnrest

ps ream pro ec e ays Limited impact on downstream capacity additions


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UOP Positioning In Energy Supply Chain

Crude Oil

Process technology, catalysts, equipmentand services forfuel and petrochemical

Gasoline Diesel LPG

PetrochemicalFeedstocks

ee s oc pro uc on.

Process technology, catalysts, equipment

feedstock

Chemicals used toproduce:

Natural Gas

- ,propylene, phenol and LAB.

Textiles Plastics Detergents

Natural gas forresidential, commercialand power

rea ng ec no og es, a sor en s anservices to remove contaminants fromnatural gas prior to distribution.

Renewables Honeywell Green Diesel Honeywell Green Jet Oil for electricity

generation andtransportation fuels

Process technology, catalysts, equipmentand services to produce real fuels from arange ofbiofeedstocks, from forestresiduals to algae.


Unique Technologies To Boost Supply Of K ey Produc t s


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Typical Refinery Process

trochem

d&Other

~10%

Produce more high-margin petrochemical

els

PFe

Produce more high-demand diesel

TransportationFu

~70%

Produce cleaner fuelsto meet regulations

Optimize refineries and

Typical

el

Process cheaper, butmore difficult-to-refine

ottomoftheBa

rr

~20%

heavier crudes

Upgrade bottom-of-the-barrel to higher quality,hi her mar in roducts


UOP Tec hnologies Cr i t ic a l To Ref iner y Invest m ent s


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UOP Industry Landscape - RefiningRefining

3,000

4,000

nBtu175

225

Oil Natural Gas 2012-2016

Equivalent

to 30 new

1,000

2,000

Qu

adrillio

kBP

125

0

Asia Mid-East CIS/Africa LatinAmerica

NorthAmerica

Refining Opportunity

Source: US Energy Information Administration

Summary

75

2007 2015 2020 2025 2030 2035

RegionalFactors

Environ.Reg.

NationalSecurity

Energy Demand Tracks GDP, However;

- EM capacity additions ~5x of NA/EU

- Demand mix, environmental, security,

5-8%Growth

Replacement

~1.4%

o er ac ors r ve re n ng grow

- Changing crude inputs require refineryupgrades

- Greater demand for energy efficiency and


Under ly ing Grow t h Trends In UOP Sw eet Spot

Base OilDemand

RefiningGrowth

opt m zat on


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Boosting Diesel YieldRefining

UOP UnicrackingTM is highest yield, lowest

sulfur diesel technology

ec no ogy ea ers p

Forecast Product Demand 2010-2020

ese eman er ue s8000

l/Day

UOP UnionfiningTM improves quality to meetmore stringent fuel regulations

>2000

5000

Thousa

ndB

Hydrocracking and Hydrotreating Catalysts

optimize yields and profitability

Actual Customer ResultRe ulation Drivin Reduced Sulfur Content

Source: 2010 Purvin & Gertz GPMO-1000 Gasoline Diesel Kero / Jet Naptha Residual

Fuel Oil

$270Increase in FeedstockValue ($/MT)

60%Incremental Conversionto Higher Value Fuels


$2.3BCustomer ValueCreated

Source: 2008 HART World Refining Fuels Update


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Upgrading Lower Quality CrudeRefining

ec no ogy ea ers p

UOP UniflexTMdelivers industry leadingconversion (90%+) to transportation

Global Heavy Crude ProductionKBPD

10000

12000

14000

-

productsUOP Residue FCCprocess cost-

effectivel converts moderate to4000

6000

8000

Abilit To Refine Provides Mar in Lift Actual Customer Result

severely contaminated feedstocks intogasoline

0

1995 2000 2005 2010 2015 2020

Source: Purvin & Gertz 4Q10 Price & Margin Update

12

16

rgin,

$/bbl Light Sweet Cracking

Light Sour Cracking

Heavy Sour Coking

4-6%Increase in High-ValueFuel Conversion

0

4

8

iningNetCashM

50%Increase in RefinerMargins


-4

1990 1995 2000 2005 2010 2015 2020

Ref

$300MCustomer ValueCreatedSource: Purvin & Gertz


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Integrated Solutions To Optimize Refinery FlexibilityAnd Margins

Refining

apa es

rrel

~$15Less Complex, Small

More Complex, Large+200%

Configuration

Design BasisTraining &

Margin$perb

~$2

~$4 ~$5

+100%OptimizationStart-Up

Optimized For Dynamic Inputs And Outputs

Low Demand High Demand

Source: International Energy Agency

Actual Customer Result

ProcessDesign

Services

Front-EndEngineering

Design

Feedstock type, quality and cost

Out ut demand and rice

20%Increase in RefineryMargins vs. Base Design

Regulatory changes

1 yrReduction inConstruction Cycle Time


Schedule and project cost

$2BCustomer Value

Created


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UOP Industry Landscape - PetrochemicalsPetrochemicals

40

50

MTA

-

Para-xylene used to manufacture clearplastic water bottles, polyester etc.

7%Growth

10

20

30

M

illion Demand driven by EM, primarily China

(11% CAGR) and Mid-East (13% CAGR)

Additional 12 Million MT of capacity0

1996 1999 2002 2005 2008 2011 2014

Propylene Supply/Demand Sector Drivers

requ re y ~ p an s

5%Growth

ropy ene o e ns are use n eproduction of polymers used for plastics

Demand driven by EM growth inpackaging and automotive

Traditional supply sources reducing due touse of ethane cracking (vs. naptha) in ME

Additional 14 Million MT of capacity


Under ly ing Grow t h Trends In UOP Sw eet Spot

~


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Boosting Petrochemical YieldPetrochemicals

-

World leader in para-xylenetechnology with large global installed

Polyester Fibers

Globalization and shift tos nthetics from natural

base

Lowest cost, most energy efficient-

fibers

P.E.T. Bottles

single train in operation

Actual Customer ResultMargin Lift For Customers

penetration into existingnon-plastic applications

lue$

$450Increase in FeedstockValue ($/MT)~$450 / ton

MarketV

a

30%Improvement inEnergy Efficiency


Crude Oil Transportation

Fuels

Para-xylene (P-X) $450MCustomer ValueCreated


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Boosting Propylene SupplyTodayPetrochemicals

World leader in on-purposepropylene(Oleflex) technology withCrude

Napthaor

Traditional Route to Propylene

Propylene

largest installed base

Lowest cost, most energy efficienttechnolo with lar est sin le train

On-purposePropylene

Unique UOP OleflexTechnology

Mar in Lift For Customers

in basic engineering design

Actual Customer Result

Field

Propane

~$550 / tone$

$550Increase in FeedstockValue ($/MT)

MarketV

al

30%Improvement inEnergy Efficiency


Propane Propylene$200MCustomer ValueCreated


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New Routes To Propylene / EthylenePetrochemicals

UOP pioneering methanol-to-olefin (MTO)technology to produce olefins fromfeedstocks other than etroleum

-

CrudeNaptha

or

Propylene

Traditional Route to Propylene

Successful demonstration plant inBelgium with partner Total Petrochemicals

Beachhead ro ect win in China with

On-purposePropylene / Ethylene

Unique UOP MTOTechnology

Margin Lift For Customers Actual Customer Result

Wison Clean Energy Company

Coal Methanol

~lue$

$590Increase in FeedstockValue ($/MT)~$590 / ton

MarketVa

40-60%Reduction in ProductionCosts


$450MCustomer ValueCreated


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Recent UOP Wins

on s x on-purpose propy ene ec no ogy con rac s, nc u ngfive in China

Cornerstone win with Chinas Wison Nan in Clean Ener

Company Ltd to license MTO (methanol-to-olefins) technologyWon contracts to provide gas processing technology for floatingpro uc on, s orage an o oa ng vesse s

UOP adsorbents are now being used to remove radioactive

contaminants from seawater in Ja an followin the dama e to theFukushima incident

Received approval forGreen Jet Fuel use in passenger flights and

jet fuel. Other firsts included the first commercial US flight, firstestablished route and the first China flight on renewable jet

23 Bank of America Merrill Lynch 2011 Industrials Conference December 6, 2011Leading Tec hnologyWinning In The Marke t p lac e


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SM Global Reach

India

LatinAmerica

g row eg ons

China /

SE AsiaMidEast

FSU

Africa

~$2.8B in 2012~45% of Total Sales

ew xpan e eg ona ec n ca a es an or uppor

New/Expanded Technology Development Capabilities

New/Expanded Procurement Capabilities


New/Expanded Project Engineering Capabilities

High Grow t h Regions Dr iv ing ~60% Grow t h Throu gh 2016


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Operational Excellence

Volume Conversion Cost

le,AL

Example

HOSBronze

100%Gold

82008 2011 2008 2011

3% 9%Mobi

Catalysts

X HOS

50% Bronze

HOS Deployed

Disci lined Decision Makin2007 2011 2007 2011

10% 1%Orange,

Wax Additives

Bronze

0%2011 2013 2015

HOS Preparation

Strategic Plans across all plants

Daily monitoring rigor

26% 16%

Pottsville,PA

Aclar Film

HOSBronze

2008 2011 2008 2011

- Systematic debottlenecking of existing assets

- Never replace in kind

- Fund attractive rowth o ortunities

24% 18%

pokane,WA HOS

Bronze

25 Bank of America Merrill Lynch 2011 Industrials Conference December 6, 2011Max imiz ing Ex is t ing Manufac t ur ing Assets

2008 2011 2008 2011

SSemicon Targets


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Technology Excellence

Next-Gen SolutionsTechnology Advantage

Industry leading R&D investments 1,000+ technologists, including 400 PhDs

IP portfolio

2,700 U.S. patents

Rich pipeline with breakthrough technologies

Green Jet /Diesel

PhotovoltaicMaterials

AsphaltAdditives

Natural GasClean-Up

Pipeline Focus, Health And Velocity

One Honeywell Centers of Excellence

East-to-West and East-for-East capabilities

Contribution To Growth

Methanol-to-

Olefins

LGWP (4th

generationreplacements)

High Purity LiPF6for Vehicles

Waste Biomassto Fuels

324

# ActiveProjects

4.0 200

Yr 5 Gross SalesPotential ($B)

Current YrLaunch Sales ($M)

Replacement

2011 2016

213

2.1 100

34% 90% 100%

New50%

Replacement50% New

75%


2009 2011 2009 2011 2009 2011

Del iver ing Resul t s TodayRic h Pipel in e Fuels Grow t h


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Summary

Business Continuing To Drive Industry Leading Returns

- Strong performance through downturn and recovery

-Outlook positive, outperforming targets

Technolo ies Ali ned With Macro Trends

- Innovation engine feeds robust new product pipeline

-

Investing For Long-Term Growth

- Funding development and scale-up of breakthrough technologies- Significant value creation potential

27 Bank of America Merrill Lynch 2011 Industrials Conference December 6, 2011St rong Franchise, Ex t ending Market Leadersh ip

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BofAML 2011 In Dust Rials Conference