1. FINANCIAL REVIEW

2. Financial Review © 1991 United Research 12/2/2015 – 06:36XXXX/UR product Analysis APPROACH Top level review of product financial results Business trend analysis Cost analysis Supports targeting further areas to study

3. product BUSINESS TRENDS

4. Financial Review © 1991 United Research 12/2/2015 – 06:36XXXX/UR product Analysis HISTORICAL AND ANTICIPATED REVENUE GROWTH FOR product... Source:product Earnings Detail Revenue ($MM)

5. Financial Review © 1991 United Research 12/2/2015 – 06:36XXXX/UR product Analysis... DRIVEN BY PRICE INCREASES Source:product Earnings Detail Shipments (% Change from '88) Price ($/lb) (% Change from '88) 316 MM lb 332 MM lb 299 MM lb 308 MM lb 317 MM lb Shipments Price 2.13 2.28 2.41 2.42 2.61 '88 Shipments = 316 MM lbs.

6. Financial Review © 1991 United Research 12/2/2015 – 06:36XXXX/UR product Analysis VARIABLE COSTS RISING FASTER THAN PRICE Unit Variable Cost Price % Change from '88 Source:product Earnings Detail '88 Price = $2.13/lb '88 Unit Variable Cost = $0.56/lb

7. Financial Review © 1991 United Research 12/2/2015 – 06:36XXXX/UR product Analysis FIXED COSTS HAVE ALSO INCREASED SIGNIFICANTLY Source:product Earnings Detail Fixed Costs ($MM) % Change from '88 +15% +10% +5% 0% Profit Objective '91

8. Financial Review © 1991 United Research 12/2/2015 – 06:36XXXX/UR product Analysis ULTIMATELY, AFTER TAX MARGINS SUFFER Source:product Earnings Detail ATOM (%) 7/91 Estimate

9. Financial Review © 1991 United Research 12/2/2015 – 06:36XXXX/UR product Analysis IN THE CORPORATE CONTEXT, product HAS SHIFTED FROM BEING A HIGH PERFORMER TO A LOW PERFORMER AND... Source:XXXX Annual Report 1990 ATOM product XXXX 3-Year Range XXXX Industry Segment Performance 1988 1989 1990

10. Financial Review © 1991 United Research 12/2/2015 – 06:36XXXX/UR product Analysis... COMPETES IN A LARGE INTERNAL MARKET WHERE... XXXX Sales TOTAL = $40,047 MM/year product =12% of Fibers 2% of XXXX Fibers 15% Polymers 14% Chemicals 9% Petroleum 40% Diversified Businesses 17% Coal 5% Source:XXXX Annual Report 1990

11. Financial Review © 1991 United Research 12/2/2015 – 06:36XXXX/UR product Analysis... "ATTRACTIVE" BUSINESSES APPEAR TO CAPTURE INVESTMENTS XXXX Capital Spending Pattern Annual Industry Segment Capital Expenditures (% of Sales) Return on Assets in Previous Year XXXX Industry Segments ChemicalsPolymersDiversified Business FibersPetroleumCoal Segment Data XXXX Consolidated 1988 & 1989 Data Source:XXXX Annual Report 1990 Fibers

12. Financial Review © 1991 United Research 12/2/2015 – 06:36XXXX/UR product Analysis AGGRESSIVE IMPROVEMENTS REQUIRED TO SUSTAIN THE product BUSINESS Globalization New Products Cost Management Modernization Operating Efficiency

13. COST ANALYSIS

14. Financial Review © 1991 United Research 12/2/2015 – 06:36XXXX/UR product Analysis COST ANALYSIS IDENTIFIES MAJOR AREAS OF OPPORTUNITY Total Cost Fixed Cost Variable Cost Direct Factory Indirect Factory Non-Factory (Overhead) Unit Cost Unavoidable Avoidable Non-Improvable Improvable

15. FIXED COSTS

16. Financial Review © 1991 United Research 12/2/2015 – 06:36XXXX/UR product Analysis FIXED COSTS HAVE DROPPED AS A PERCENT OF THE TOTAL COST BASE Source:product Earnings Detail % of Total Cost Base Variable Fixed 69% 64% 68% 64%63% $570 MM$626 MM$666 MM $707MM

17. Financial Review © 1991 United Research 12/2/2015 – 06:36XXXX/UR product Analysis 72% OF FIXED COSTS RESIDE IN THE PLANTS TOTAL Fixed Costs = $425 MM Source:product Profit Objective '91 Other 3% Period Mill (excluding Depreciation & VTI) $262 MM 62% Interest & Inventory 5% FPDE 6% Marketing, Admin Research & Mfg Support 14% Depreciation & VTI $45 MM 11%

18. Financial Review © 1991 United Research 12/2/2015 – 06:36XXXX/UR product Analysis 86% OF PERIOD MILL IN U.S. FILAMENT; ONLY 8% IN NON-U.S. FACILITIES Source:product Profit Objective '91 * Without Depreciation & VTI Period Mill* ($MM) 86% 5% 4.5% 3.5% 1% TOTAL = $262 MM

19. Financial Review © 1991 United Research 12/2/2015 – 06:36XXXX/UR product Analysis IT TAKES 41% OF FIXED MANUFACTURING COSTS TO PRODUCE 21% OF product OUTPUT (AT MARTINSVILLE) Period Mill ($MM/yr) Source:product Profit Objective '91 Shipments (MM/lb) 41% 26% 17% 16% 65 79 44 50 Shipments 4 Plant Total:$270 MM/yr 238 MM/lbs.

20. Financial Review © 1991 United Research 12/2/2015 – 06:36XXXX/UR product Analysis $38-68 MILLION POTENTIAL OPPORTUNITY IN IMPROVING FIXED MANUFACTURING COST UTILIZATION BDP Source:product Profit Objective '91 Avg 0.87

21. Financial Review © 1991 United Research 12/2/2015 – 06:36XXXX/UR product Analysis MANUFACTURING INVESTMENT HAS BEEN CHANNELED AWAY FROM THE HIGH FIXED COST CENTERS Period Mill Costs ($MM/yr) Source:product Profit Objective '91 Depreciation (% of Period Mill) 111 69 47 43 7% 10% 19% 33% Depreciation 0% 10% 20% 30%

22. Financial Review © 1991 United Research 12/2/2015 – 06:36XXXX/UR product Analysis PERIOD MILL CAN BE CATEGORIZED AS DIRECT FACTORY OR INDIRECT FACTORY Period Mill Labor Off Plant Processing Other Expenses Operating Supplies Contract Services Operating Expenses Labor Off Plant Processing Other Expenses Operating Supplies Contract Services Operating Expenses Salaries Maintenance Power Operations Support Quality Environmental Administrative Systems Technical (SMO) Other DUCs Taxes Warehouse Abnormals Management Adjustment Depreciation Salaries Maintenance Power Operations Support Quality Environmental Administrative Systems Technical (SMO) Other DUCs Taxes Warehouse Abnormals Management Adjustment Depreciation Direct Factory (Value Chain) Indirect Factory (Supply Chain)

23. Financial Review © 1991 United Research 12/2/2015 – 06:36XXXX/UR product Analysis SUPPLY CHAIN COSTS ARE ABOUT THE SAME AS VALUE CHAIN COSTS IN THE PLANTS Source:product Profit Objective '91 TOTAL U.S. Period Mill = $262 MM/yr Indirect 48% Direct 52% $126MM $136MM

24. Financial Review © 1991 United Research 12/2/2015 – 06:36XXXX/UR product Analysis WHERE THE FACTORY COSTS LIE Source:product Profit Objective '91 Period Mill Costs ($MM/yr) Indirect Factory = $126 MM Direct Factory = $136 MM 60% 69%

25. Financial Review © 1991 United Research 12/2/2015 – 06:36XXXX/UR product Analysis 28% OF FIXED COSTS ARE NON-FACTORY EXPENSES TOTAL Fixed Costs = $425 MM Source:product Profit Objective '91 Other 3% Period Mill (excluding Depreciation & VTI) $262 MM 62% Interest & Inventory 5% FPDE 6% Marketing, Admin Research & Mfg Support 14% Depreciation & VTI $45 MM 11% Non-Factory $118 MM 28%

26. Financial Review © 1991 United Research 12/2/2015 – 06:36XXXX/UR product Analysis TRANSPORTATION COSTS COMPRISE THE LARGEST SINGLE COMPONENT OF NON-FACTORY FIXED COSTS Source:product Profit Objective '91 Non-Factory Fixed Costs $MM/yr TOTAL = $118 MM/yr 53% of Non-Factory Fixed Costs

27. Financial Review © 1991 United Research 12/2/2015 – 06:36XXXX/UR product Analysis ALL OVERHEAD COSTS WARRANT INVESTIGATION OF THE TASKS BEHIND THEM Value Added Non Value Added Costs to Support For example...

28. Financial Review © 1991 United Research 12/2/2015 – 06:36XXXX/UR product Analysis 40% OF TOTAL FREIGHT BILL IS FOR BRINGING PACKAGING BACK FROM CUSTOMERS Source:product Profit Objective '91 Finished Product Distribution Expense ($MM/yr) TOTAL = $26 MM/yr 10.4 6.3 3.7 2.4 2.0 1.2

29. VARIABLE COSTS

30. Financial Review © 1991 United Research 12/2/2015 – 06:36XXXX/UR product Analysis REPORTED VARIABLE COSTS ARE UNDERSTATED DUE TO FIBERSTOCK CREDITS We will focus on the "Out-of-Pocket" costs. "Out-of-Pocket" Variable Cost Fiberstock Credit Reported Variable Cost

31. Financial Review © 1991 United Research 12/2/2015 – 06:36XXXX/UR product Analysis SALT COST IS CONSISTENTLY ONE-HALF OF "OUT-OF-POCKET" VARIABLE COSTS % of Out-of-Pocket Variable Cost $0.72/lb $0.85/lb$0.87/lb Salt Price Chemical Loss Cost Book Yield Loss Other Material Power Energy Adjustment Source:product Cost Detail (6/91)

32. Financial Review © 1991 United Research 12/2/2015 – 06:36XXXX/UR product Analysis SALT COSTS HAVE INCREASED NEARLY 20% SINCE 1989 Source:product Cost Detail (6/91) Salt Cost ($/lb) +20% 0% +10% % Change from '88

33. Financial Review © 1991 United Research 12/2/2015 – 06:36XXXX/UR product Analysis MOST VARIABLE COSTS ARE UNAVOIDABLE, BUT CAN STILL BE IMPROVED Variable Cost (Out-of-Pocket) Salt Prices Adipic Acid Diamine Power Energy Chemical Loss Adjustments Salt Prices Adipic Acid Diamine Power Energy Chemical Loss Adjustments Cost Book Yield Loss Unavoidable* Avoidable Other Material Salt Additives Finishes Packaging Tubes, etc. Other Material Salt Additives Finishes Packaging Tubes, etc. *Unavoidable:Cannot manufacture product without incurring these costs Non-ImprovableImprovable

34. Financial Review © 1991 United Research 12/2/2015 – 06:36XXXX/UR product Analysis 27% OF VARIABLE COSTS CAN BE ADDRESSED TOTAL Variable Costs (Out-of-Pocket) = $268MM/yr Source:product Profit Objective '91 $73 MM/yr to Address Avoidable $38 MM/yr Avoidable Improvable $35 MM/yr Avoidable Non-Improvable $195 MM/yr Cost Book Yield Loss 14% Other Material 13% Salt 51% Energy 10% Chemical Loss 8% Adjust 4%

35. Financial Review © 1991 United Research 12/2/2015 – 06:36XXXX/UR product Analysis COSTS DUE TO COST BOOK YIELD LOSS VARY GREATLY – HOWEVER, THE TREND IS UP Source:product Cost Detail (6/91) *Calculated Cost Book Yield Loss Cost ($/lb) +80% 0% % Change from '88 +60% +40% +20% CBY*= 82%74%80%

36. Financial Review © 1991 United Research 12/2/2015 – 06:36XXXX/UR product Analysis SIGNIFICANT OPPORTUNITIES EXIST ACROSS THE TOTAL COST BASE Total Cost Fixed Cost Variable Cost Direct Factory Indirect Factory Non-Factory (Overhead) Unavoidable Avoidable Improvable Benchmarked Opportunity To Be Scrutinized } $666MM $425MM $265MM $136MM $126MM $118MM $38-68MM $118MM $207MM $38MM $35MM Non-Improvable $176MM

37. Financial Review © 1991 United Research 12/2/2015 – 06:36XXXX/UR product Analysis SUMMARY Deteriorated financial position due to flat shipments and eroded gross margin Must improve near term performance in order to attract XXXX internal investment for the product Business Significant opportunity to reduce fixed costs, both non-factory and factory A major portion of variable costs can also be addressed and potentially reduced