Bringing Profitability Into Focus Optimizing the Chemical Value Chain Chemical Executive Briefing December 6, 2001

The AspenTech Vision To make our customers more profitable by enabling them to design, optimize, and execute their entire value chain – from the supply of raw materials to the delivery of final product. This is sort of a new statement of our vision. A vision is something you don't want to change too often, but we've been evolving, and this is at least one articulation, something we are going to be talking about to get just exactly right, but the vision here is to be the leader in delivering value through intelligent e-business solutions that enable enterprises and the process industries to integrate, automate and optimize their strategic business processes both internally and among their partners. So what do you think are the key words in that vision statement? Maybe someone could tell me maybe the most important word in that statement. Value Leader Process Industries this is where we're putting our stake in the ground. E-Business too, it's a major new frontier. I think "strategic business processes." We focus on strategic business processes. So, in many ways almost every word in that vision is very, very important in terms of what we do, and there is not a lot of fluff or a lot of room for being too much more economical. I think the key thing that we want to be know as, we want to be dealing with someone very similar to what we do, and forget about the technology and forget about a lot of what we do. We deliver value to the process industries. We deliver economic value to this industry.

Overall Business System Landscape in Process Manufacturing Enterprise Plant ERP Enterprise Resource Planning SRM Supplier Relationship Management CRM Customer Relationship Management SCM Supply Chain Management e-business e-business APS Advanced Planning & Scheduling FCS Finite Capacity Scheduling MES Manufacturing Execution System Design Engineering Plant Simulators DCS Distributed Control System

AspenTech Footprint in the Business System Landscape Enterprise Plant Aspen Footprint ERP Enterprise Resource Planning SRM Supplier Relationship Management CRM Customer Relationship Management SCM Supply Chain Management e-business e-business APS Advanced Planning & Scheduling FCS Finite Capacity Scheduling MES Manufacturing Execution System Engineering Plant Simulators Design DCS Distributed Control System

Value Chain Profit Opportunities Sell-side Marketplaces Engineering & Construction Firms Buy-side Marketplaces Logistics Providers Asset Optimization Value Chain Planning E X E C U T I O N Supply-side Optimization Production Demand-side Operating Company Value Chain Planning E X E C U T I O N Supply-side Optimization Production Optimization Demand-side Optimization Purpose of Slide: (1) Explain that the opportunities for profit improvement will center on the components on this slide (2) Provide short overview of each element. (3) Show/explain timeline associated with each element. Key Points: There are huge potential opportunities for profit improvement in the various relationships and business processes across the value chain , as illustrated in the above graphical representation, which is reminiscent of the SCOR model. For example: Suppliers and Customers: New Economy technologies are facilitating increased collaboration between “Operating Company” and its suppliers, its suppliers suppliers, its customers and its customers customers. This collaboration can reduce unplanned variability and hence reduces costs, such as inventory holding across the value chain. The examples highlighted above, Net Marketplaces, Logistics Providers, E&Cs: New Economy technologies are again facilitating closer, tighter links with your key providers and partners, driving down transaction costs, removing slack from the value chain, and potentially driving closer collaboration with process and product development partners. In some cases these partners will even become intermediaries in companies interactions with their customers. This web of relationships and the business process by which companies deliver value to the customers in called the "process industry value chain". AspenTech see the term value chain as a significant extension of the traditional term supply chain to cover the following areas: Provide and public marketplaces as a means of interacting with customers and suppliers The production operations And the design and optimization of the physical assets that support the value chain. Within the value chain, AspenTech see three major areas where significant value can be delivered: Asset Optimization is a medium-long term (6 months-5 years) activity that allows customers to optimally lay out and build their Value Chain assets, e.g. plants, logistics capabilities, storage facilities, etc. and is concerned with questions such as: Whether to divest, acquire, or form joint venture? Where to locate manufacturing and logistics facilities? How best to develop facilities to achieve lowest cost production? Business Processes Strategic planning Collaborative engineering Debottlenecking & process improvement Value Chain Planning a near-medium term activity (1 week - 6 months) that optimally plans the execution of the value chain to determine where we produce, how much we produce and how we deliver. It concerns questions such as: Where to manufacture for a particular order or campaign in order to maximize profitability and customer service Where to locate inventory in order achieve the best trade off of customer service and working capital How best to respond to events (e.g. manufacturing or logistics failures) in the value chain Collaborative demand management Enterprise supply & demand optimization Inventory management Finally, there is Value Chain Execution and management around three key elements of sourcing, making and delivering that are involved in satisfying your customers’ need for physical products. This is a "real-time" activity focused on time frames from 1 week to seconds. It is concerned with the optimal day to day execution of value chain activities and with the management of the real day to day events and operational realities that invariably effect the the actual real implementation of the plans. Here, by improving business processes you can improve the quality and timeliness of decision making and execution, resulting in improved margins, customer satisfaction etc. AspenTech divides this execution and management activity into three sub activities: Supply-side Optimization allows you to optimize the acquisition of direct/raw materials to reduce both the average cost of raw materials and the cost to execute their execution. This element is concerned with questions such as: Which is the most profitable feedstock to process, on a real-time basis, as opportunities occur? What’s the best price? What’s the best channel? Feedstock/raw material selection e-Procurement In-bound logistics optimization Production Optimization (traditionally referred to as Plantelligence™) optimizes the costs, quality and schedule of the manufacturing and provides real-time visibility into the status of the production assets (which enables better planning and management) and allows real-time execution of the plans and schedules created. It is concerned with questions such as: What is optimum product mix? How to run today ? How to achieve optimal execution? Production scheduling Production management Plant optimization Advanced production control Operator training Demand-side Optimization optimizes key elements of customer interaction e.g.. Logistics and collaborative replenishment, commitments to orders (ATP/CTP) and automation of the customer/supplier interactions through private marketplaces. It is concerned with questions such as: How to execute the best trade-off between customer satisfaction, costs and inventory? How to capture a greater percentage of customer enquiries into orders Is it profitable to take this order? And how to make it more profitable? How best to get this delivered to the customer? Logistics optimization & management Collaborative replenishment Order management & commitment e-Sales Account management CUSTOMERS SUPPLIERS Asset Optimization

How Aspen Tech Increases Economic Profit Increase Revenue Increase Economic Profit Reduce Costs Improve Capital Efficiency Presenter: You have the option to use either slides 8-11 or slides 12-15 Purpose of Slide: Explain that (1) Broadly, polymer manufacturers have three levers for improving profitability, and (2) AspenTech can provide solutions to dramatically improve results across all these levers: Increase revenue Reduce cost Increase Capital Utilization Value Chain Design Value Chain Planning & Management Production Optimization Supply-side Optimization Demand-side Optimization

Increase Revenue Increase Volume Increase Revenue Improve Strategic Planning and Demand Management Increase Volume Improve Product Quality and Consistency Innovation & Faster Time-To-Market Increase Revenue Increase Market Share Improve Manufacturing Responsiveness Industry Anecdote Aspentech’s production optimization solution for a major US Gulf Coast polymers plant increased production by 3.5%, boosted average sales price by 2.5%, reduced variable cost by 3.0% and reduced feedstock cost by 0.5%. (Equistar Matagorda) Aspentech formulated a supply chain solution for a multi unit polymers manufacturer. This customer reduced inventory by US$15 million and forecast error by 25%. It increased fill rate by 25% and achieve a 98% reduction in dead inventory. (Chevron Phillips) Aspentech also helped developed a Design Value chain solution that enabled a forward-thinking polymers manufacturer to leapfrog existing technology. Once Aspen Tech captured the process fundamentals, the customer was able to build a pilot plant, achieving a 35% reduction in capital costs and realizing $25 million benefit. (NOVA Chemicals) Increase Average Sales Price Improve Customer Responsiveness Increase Throughput and Reduce Downtime Typical Economic Value-Add: Increase Revenue by 3% - 5% Asset Optimization Value Chain Planning Production Optimization Supply-side Optimization Demand-side Optimization

Reduce Costs Reduce Variable Cost Reduce Costs Reduce Fixed Cost Reduce Raw Material Costs Reduce Variable Cost Reduce Distribution Costs Reduce SG&A Costs Reduce Costs Reduce Fixed Cost Reduce Inventory Carrying Cost Industry Anecdote Aspentech’s production optimization solution for a major US Gulf Coast polymers plant increased production by 3.5%, boosted average sales price by 2.5%, reduced variable cost by 3.0% and reduced feedstock cost by 0.5%. (Equistar Matagorda) Aspentech formulated a supply chain solution for a multi unit polymers manufacturer. This customer reduced inventory by US$15 million and forecast error by 25%. It increased fill rate by 25% and achieve a 98% reduction in dead inventory. (Chevron Phillips) Aspentech also helped developed a Design Value chain solution that enabled a forward-thinking polymers manufacturer to leapfrog existing technology. Once Aspen Tech captured the process fundamentals, the customer was able to build a pilot plant, achieving a 35% reduction in capital costs and realizing $25 million benefit. (NOVA Chemicals) Reduce Capital Cost Reduce Energy Cost Reduce Capital Cost Typical Economic Value-Add: Reduce costs 5% - 30% Asset Optimization Value Chain Planning Production Optimization Supply-side Optimization Demand-side Optimization

Improve Capital Efficiency Rationalize Manufacturing Optimize Fixed Asset Utilization Optimize Inventory Improve Capital Efficiency Reduce Capital Cost Industry Anecdote Aspentech’s production optimization solution for a major US Gulf Coast polymers plant increased production by 3.5%, boosted average sales price by 2.5%, reduced variable cost by 3.0% and reduced feedstock cost by 0.5%. (Equistar Matagorda) Aspentech formulated a supply chain solution for a multi unit polymers manufacturer. This customer reduced inventory by US$15 million and forecast error by 25%. It increased fill rate by 25% and achieve a 98% reduction in dead inventory. (Chevron Phillips) Aspentech also helped developed a Design Value chain solution that enabled a forward-thinking polymers manufacturer to leapfrog existing technology. Once Aspen Tech captured the process fundamentals, the customer was able to build a pilot plant, achieving a 35% reduction in capital costs and realizing $25 million benefit. (NOVA Chemicals) Reduce Cash Operating Cycle Reduce Cycle Time Typical Economic Value-Add: Increase Capital Utilization 2%- 6% Decrease capital expenditures 5%- 20% Asset Optimization Value Chain Planning Production Optimization Supply-side Optimization Demand-side Optimization

The Value of Optimizing : Improved Profit Performance AspenTech partners with chemical and polymer manufacturers to help better manage and optimize their value chains. This can increase ROCE by 1-4% : Increase revenue by 3-5% Reduce costs by 5-30% Increase capital utilization and reduce capital expenditure by 5-20% Purpose of slide: Capture executive's attention through compelling statement of the (total) economic value AT can deliver for him / her. Introduce AspenTech as providing significant hard dollar improvements to KPIs that are of deep concern to senior executives. Some executive customers may question the validity of the ROCE benefit numbers of 1-4%. The way to explain is this: For commodity polymer producers, the ROCE increase will likely fall in the lower range, say 1-2%. For specialized, smaller, engineering polymer producers, the ROCE increase will likely fall in the higher range, say 2-4%. Key Points: Even in this challenging business environment, AspenTech delivers substantial economic value for polymers manufacturers. AspenTech’s approach will deliver significant and distinctive value to create the right strategy, establish best practices, implement and embed those best practices in software and ensure rapid time to value. Profit AdvantageTM delivers value in several key ways:        First, AspenTech’s mission is to provide profit.        Second, the point is to provide a competitive advantage. Within AspenTech’s various target verticals, this competitive advantage might involve “maximizing supplier relationships” or “achieving higher levels of customer satisfaction”, or “achieving higher P&E due to improved margins”, which are the basics for establishing world class operations, etc. 3. AspenTech delivers an e-business strategy that is fundamentally a back-to-basics strategy for providing profit. The e-business strategy is designed to integrate disparate technologies across the value chain and create superior KPI improvements. Anecdotes As indicated in slide number 2, polymer stocks have been taking a beating the last few years, hence to improve shareholder value, the CEO must increase earnings(profits). To improve profits, we must goes back to the fundamentals of economics: Increase revenue, reduce cost, and increase capital utilization. Aspentech can help polymers producers increase these bottom lines by providing value added solutions and services. Aspentech’s production optimization solution for a major US Gulf Coast polymers plant increased production by 3.5%, boosted average sales price by 2.5%, reduced variable cost by 3.0% and reduced feedstock cost by 0.5%. (Equistar Matagorda) Aspentech formulated a supply chain solution for a multi unit polymers manufacturer. This customer reduced inventory by US$15 million and forecast error by 25%. It increased fill rate by 25% and achieve a 98% reduction in dead inventory. (Chevron Phillips) Aspentech also helped developed a Design Value chain solution that enabled a forward-thinking polymers manufacturer to leapfrog existing technology. Once Aspen Tech captured the process fundamentals, the customer was able to build a pilot plant, achieving a 35% reduction in capital costs and realizing $25 million benefit. (NOVA Chemicals)

Implementation Partners AspenTech partners with major consulting and systems integration specialists to develop and deliver profit improvement through: Business process improvement Change management Applications and systems integration IT consulting Enterprise consulting and solutions implementation IT management and application hosting Post-implementation benefit analysis to ensure results…. AspenTech delivers Enterprise Consulting and Solutions Implementation services, including analysis and implementation, for each solution area, i.e.: Supply-side, Demand-side, and Production Optimization Value Chain Planning, and Asset Optimization Our Implementation Partners provide: Business process improvement Change management Applications and systems integration IT consulting IT management and application hosting Post-implementation benefit analysis