Huntsman Epoxy Comments from Investors’ Call

Peter R. Huntsman – Huntsman Corp.

Let’s turn to slide number 6 and 7. Our Advanced Materials business reports EBITDA of $59 million, an increase of 9%. This business remains focused on growing its core specialty businesses and its specialty volume increased 4% in the quarter., continuing the positive trend we’ve seen over the last year or so. In fact, this quarter was a record EBITDA for our specialty business, and we expect these businesses to continue growing from the strong base. The revenue and EBITDA improvement in our specialty business is primarily driven by our expanded earnings in coatings, adhesives – our (00:11:51) coatings, additives, automotive composites and industrial adhesive sectors. Our aerospace and DIY consumer adhesive businesses are also continuing to show steady growth. Our commodity business, which includes the wind market, had minimal contribution to our EBITDA in the quarter.

The growth we’ve seen this quarter in our specialty business has been driven by the investment we’ve made in innovation during the last couple of years. We expect to see this trend to continue. We will further invest in this business in order to add effects (00:12:25) to our portfolio and to grow into expanding markets with new and existing customers. We see this business as a solid platform for future growth and development. We continue to expect to see growth in our specialty business well in excess of GDP for the remainder of the year, and will expect earnings for this division in the second quarter to look similar to the first quarter.

Roger N. Spitz – Bank of America Merrill Lynch

In Advanced Materials, I think you still have some BLR (Basic Liquid Resin), and that was included in the group that was – EBITDA was minimal. Was BLR itself minimal, or perhaps because you use that downstream, you’re not even including that in the commodity end of Ad Mat EBITDA?

Peter R. Huntsman – Huntsman Corp.

Yeah, I think BLR, we – typically, as a company – I’m not a big fan of transferring products down at a cost. I like to transfer product components at market, so that you know what each component – how much value you’re creating. So when we talk about our BLR business, even if we’re using it internally, we like to try to account it as a separate group. So I think it’s safe to say that BLR, whether we’re using it internally or externally, it was a de minimis amount of EBITDA.

Christopher Evans – Goldman Sachs & Co. LLC

Thanks for squeezing us in. This is Kris Evans on for Bob. I was hoping, Peter, you could give some context to some of the surging prices we’re seeing in the commodity grade liquid epoxy resins. I know you guys are downstream in the more specialty end, but is there any flow-through costs or benefits you might see or do you have any optionality to maybe shift some capacity to where prices are surging?

Peter R. Huntsman – Huntsman Corp.

We might have a little bit of capacity to do that. That’s not something I’d want to do longer term. As I look at the number of players around the world, particularly in Asia that are in that upstream BLR market, boy, for every month that I was happy that I was in those applications, there’s 11 months when you wish you were out of them and you’re just getting clobbered. So I – if we have that ability to shift something short term and walk away from the adhesives or walk away from the sealants or walk away from DIY or aerospace or something like that, I just think fundamentally, Advanced Materials, and I think you’ll see this again in Investment Day (sic) [Investor Day] (01:04:35), I think we’re shaping up to have the best year we’ve ever had in Advanced Materials in 2018, barring a major economic issue that’s taking place. And I think that we look at 2019, 2020, and the ramp-up of aerospace, the ramp-up of what we’re seeing in the market, the Nanocomp Technologies and taking those to markets and so forth and moving further downstream, I just don’t see us shifting over and taking short-term advantage of BLR applications. By the time, we were able to do that, shift over, it’ll probably be gone.

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