EARNINGS PREVIEW

January 16, 2014

Chemicals

Chemicals - Earnings Preview

What's Incremental. We believe US Chemicals stocks are discounting solid 4Q13 earnings, driven by strengthening US GDP, modest recovery in Europe and slight input cost tailwinds. The next leg of stock price performance likely depends on companies 2014 outlook commentary, which we believe will be positive. Further multiple expansion across the sector likely depends on the extent to which companies substantiate improving business trends in Europe and, more importantly, Asia. Macro conditions improved 4Q13 economic data and channel checks were more positive than initially expected, partially offsetting normal seasonality. The Consensus forecast for US GDP growth in 4Q13 is 1.5%, vs. 4.1% growth in 3Q13. US construction spending, a key indicator for Chemicals, rose 1% in November, while the ISM manufacturing index remained at a strong level in December (57.0). Management comments from ROC suggest accelerating activity levels in US manufacturing end markets, as well as in European auto and aerospace sectors. Recent management comments from RPM and SHLM suggested improvements in the Northern Europe geography and from German auto customers. Improvement in Europe could bode well for APD,CBT, CE, DOW, KRA, and PPG. On the 2014 outlook, we expect companies to focus on: Higher global GDP growth of around 3% vs 2% in 2012. Modest recovery in Europe, with improvements broad based across most end markets and countries and GDP growth of around 1%. Steady growth in the US of about 3%, paced by auto, housing, manufacturing , and aerospace markets. Improving fundamentals in Asia, with recovery in Japan and stronger growth in China following the transition to a new government. Slow economic growth in Latin America. Global auto production growth of 3.5%-4%, up from 3% in 2013. Stable energy and raw material costs, with the potential for a decline in oil prices driven by expanding US production coupled with an export ban. Easing commodity chemical prices as nat gas prices normalize post the cold snap across Eastern US. A headwind from a strengthening US dollar, ~ +2% due to reduced pace of asset purchases by the Fed.

Companies Impacted in This Note

Ticker ALB APD ASH AVD AXLL CBT CE CHMT DD DOW EMN FMC HUN KRA OLN PPG PX ROC WLK Price $66.74 $111.25 $100.12 $23.60 $44.35 $51.93 $55.78 $26.90 $63.73 $43.05 $79.81 $75.73 $23.56 $22.37 $28.68 $190.70 $132.92 $73.80 $124.14 Rating Neutral Buy Buy Neutral Neutral Neutral Buy Buy Reduce Reduce Buy Neutral Reduce Neutral Neutral Neutral Buy Neutral Reduce Target $63.00 $125.00 $105.00 $24.00 $44.00 $47.00 $65.00 $33.00 $48.00 $33.00 $93.00 $70.00 $18.00 $21.00 $25.00 $170.00 $135.00 $73.00 $93.00

James Sheehan 404-926-5918 james.sheehan@suntrust.com

Jason Freuchtel 404-926-5930 jason.freuchtel@suntrust.com

Page 1

SEE PAGE 14 FOR REQUIRED DISCLOSURE INFORMATION

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Chemicals Equity Research

Chemicals

Better than expected economic data highlighted by European improvement In the near term, economic data points and sentiment from management teams appear to be more positive than we initially expected. US construction spending, an important indicator for Chemicals, rose 6% in 2013 and remained strong through the end of the year, rising 1% in November (vs. up 0.9% the prior month). Supporting the construction signal was the ISM manufacturing index at 57.0 in Decemebr (vs 57.3 in the previous month). Despite volatility from unusual events at the end of 2013 for jobless claims as well as payroll data, both metrics are trending in a positive direction. In terms of global auto production, we assume growth of 4-5%. While data points suggest the US economy is improving, recent commentary from multiple companies suggests there has been moderate acceleration in Europe as well. RPM International pointed out on its recent earnings conference call that the company experienced modest revenue growth in Northern Europe across all segments. Similarly, management at A. Schulman commented that increased German auto demand was one of the key contributors to its double digit sales growth in the quarter. With our Chemicals coverage universe generating roughly a quarter of total sales in Europe, on average, we anticipate the select companies with heavy European exposure will benefit from the regional outperformance and discuss the trends on their earnings calls. Specifically, APD,CBT, CE, DOW, KRA, and PPG generated more than 30% of sales from Europe and should benefit the most from an improving European economy. Change in payrolls
0.30% 0.25% 0.20% 0.15%
350,000

Jobless claims data

Weekly Initial Claims 450,000 425,000 400,000 375,000 8-Week Moving Average

0.10%
325,000

0.05% 0.00%

300,000 275,000 250,000 7-Jan-12

Mar-12

May-12

May-13

Dec-12

Apr-12

Apr-13

Mar-13

Aug-12

Aug-13

Nov-12

Nov-13

Dec-13

Oct-12

Sep-13

Feb-12

Sep-12

Feb-13

Oct-13

Jun-12

Jun-13

Jan-12

Jan-13

Jul-12

Jul-13

7-Apr-12

7-Jul-12

7-Oct-12

7-Jan-13

7-Apr-13

7-Jul-13

7-Oct-13

Source: ADP

Source: ADP

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Chemicals

ISM Monthly index

58 56 54 52 50

48
46 44

Dec-12

May-12

May-13

Mar-12

Mar-13

Aug-12

Aug-13

Nov-12

Source: Bloomberg

Aggregate sales by region for companies under coverage

Latin America , 9% ROW, 6%

Companies under coverage with highest sales in Europe:

70% 60% 50%

US, 41% Asia-Pacific , 16%

40% 30%

20%
10% 0%
Europe, 26% Canada, 1%

Source: Company Data

Source: Company Data

2011 2012 3Q
2% 9% 2% 9% 5% 5% 2% -3% 0% 1% 0% 6% 6% -2%

Chemical sector YoY volume growth trends

Name
BASF Dow DuPont Eastman PPG Perf. Coatings Praxair Rockwood

Nov-13

Dec-13

Jun-12

Apr-12

Apr-13

Oct-12

Jun-13

Feb-12

Sep-12

Feb-13

Sep-13

Oct-13

Jan-12

Jan-13

Jul-12

Jul-13

1Q
5% 8% 9% 17% 4% 8% 10%

2Q

4Q
-3% 0% -10% 5% 5% 4% -6%

1Q
0% 3% -2% 0% 5% 4% -6%

2Q
0% -1% -1% 0% 3% 2% -8%

3Q
7% 2% -5% 3% 6% 0% 4%

4Q
6% 0% 3% -1% -3% 0% 4%

1Q
5% -3% 2% 0% -5% 0% 8%

2013 2Q
5% 2% 1% 4% -5% 2% 15%

3Q
6% -1% 9% 2% -2% 5% 6%

Average

9%

5%

1%

-1%

1%

-1%

2%

1%

1%

3%

4%

Source: Company Data

US construction/housing demand improving The US architectural billings index (ABI), a leading indicator for the construction industry, declined to 49.8 in November, representing the second consecutive decline since September. The average for October and November was 50.7. A level above 50 indicates positive growth in architectural billings. With the ABI typically leading construction end markets by 9-12 months, the upturn in the index in 1Q13 bodes well for construction and housing related chemicals demand in the next 3-6 months. However,

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Chemicals

1Q14 demand into the housing market for key chemical products such as paints, fibers, insulation, PVC and adhesives may face headwinds from the Polar Vortex early in 1Q14 and expectations for continued cold winter conditions throughout the quarter. US Architectural Billings Index
60 55 50

45
40 35

30

Jul 12

Jul 07

Jul 08

Jul 09

Jul 10

Jul 11

Mar 10

Mar 07

Mar 08

Mar 09

Mar 11

Mar 12

Mar 13

Nov 07

Nov 08

Nov 09

Nov 10

Nov 11

Nov 12

Jul 13

Source: Bloomberg

Electronics indicators are softening The PCB book-to-bill ratio dipped to 0.94 in October from 0.98 in September and an average of 1.01 in 3Q13, which was the lowest PCB book-to-bill ratio since November 2012. Similarly, connector confidence dropped to 66.4 in October versus 68.8 in 3Q13. These trends corroborate ALBs negative pre-announcement which it blamed on cautious working capital management by customers across all segments and softer than expected brominated flame retardant demand trends. We believe these factors were unique to ALBs brominated flame retardants business. We suspect CHMT, with lower exposure to the weakest electronics markets (TVs, monitors, PCs), will not suffer as badly as ALB. Raw materials pressures subdued The input cost environment was largely flattish in 4Q13. Prices for ethylene, the key building block chemical, decreased from $0.54/lb in 3Q13 to $0.52/lb in 4Q13, or 4% sequentially. We expect most outlook comments will point to stable energy and raw material costs, as oil prices could ease due to expanding US production. Commodity chemical inputs could also benefit from the normalization of natural gas prices following the recent cold snap across the Eastern US.

Nov 13

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Chemicals

Oil to US Natural Gas

Ratio of Crude Oil to Natural Gas Prices

Propylene and Ethylene Prices (cents/lb)

90
80 70 60

50 40 30 20 10
0

2003-2010 Average Energy Equivalent Ratio

2Q12 3Q13
2Q11 3Q11 4Q11 1Q12 3Q12 4Q12 1Q13 2Q13 4Q13E 1Q14E 2Q14E 3Q14E 4Q14E

50

40
1Q12 2Q13
1Q11 2Q11 3Q11 4Q11 2Q12 3Q12 4Q12 1Q13 3Q13 4Q13

Propylene

Ethylene

Source: Bloomberg

Source: Bloomberg

TiO2 Prices
$2.00
NA TiO2 Price ($/lb)

45% 30% 15% 0% -15%

$1.60 $1.20 $0.80 $0.40

$0.00
1Q09 3Q09 1Q10 3Q10 1Q11 3Q11 1Q12 3Q12 1Q13

-30%
3Q13

Est. Price, $/lb (LHS)

% YoY Change (RHS)

Source: TZMI, STRH Estimates

M&A and Portfolio Restructuring Chemical companies are increasingly bolstering nominal 2014 growth trends with growth from acquisitions. Many are also shedding non-core assets. Acquirers seem to be targeting higher margin specialty chemical products and assets that complement core businesses. We believe abundant cash on balance sheets, low leverage ratios, and low borrowing costs should help facilitate further transaction activity in 2014. We expect M&A to be a focus for investors in 4Q14 conference calls.

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Chemicals

STRH Chemical Universe M&A/Portfolio Restructuring Activity in 4Q13 Ticker Action Reported Assets FMC Sold 12/13/2013 Peroxygens business ROC Formed JV 12/02/2013 Acquired 49% interest in Talison Lithium DOW Selling 12/02/2013 US-chlor-alkali assets Global epoxy assets Global chlorinated organics ASH Selling 11/05/2013 Water Technologies segment/Elastomers CHMT Sold 10/10/2013 Consumer Products segment CHMT Exploring Sale 10/10/2013 AgroSolutions DD Spin Off Announced 10/24/2013 Performance chemicals business unit DD Sold 11/21/2013 Glass laminating solutions/vinyls business HUN Announced 10/01/2013 Commoditized European surfactants business Restructuring
Source: Company Reports

Aluminum Read Throughs Alcoa (AA) earnings results revealed a few insightful data points for our coverage universe. AA saw both seasonal declines and pricing pressure during 4Q13 in its packaging end market. This suggests possible softness in PPGs can coatings business, which represents about 15% of its Industrial Coatings segment. In AAs aerospace market, the company operates a joint venture with ROC using lithium to make aluminum-lithium alloys. Management indicated the aerospace segment experienced negative price/mix impacts; however, demand trends remain solid. Agriculture end market: lower commodity prices create changing dynamics MON recently reported a positive 1Q14 result based on strength in Ag Productivity (24% increase in sales and 800 bps increase in EBIT margins YoY) due to a strong branded glyphosate mix. Meanwhile, MONs Seeds and Genomics segment sales declined 5% YoY and the EBIT margin shrunk 700 bps from last year, primarily due to fewer planted acres in South America and abnormally strong results in 1Q13. While acres planted will likely decline in the US and South America in the coming year, MON was upbeat about the 2014 order activity for new germplasms, hybrids, and varieties and optimistic about the longterm expected demand for corn and soybeans despite the decline in commodity prices in 2013. The lackluster performance of MONs Seeds and Genomics segment represent a reasonable proxy for DDs and DOWs seed businesses, which may underperform due to the weak planting season in South America. In the coming year, we expect DD and DOW to maintain optimistic growth forecasts based on growers strong preference for higher yields and strong farm income levels. However, the grain price declines could have a dampening effect on demand for crop chemicals. In light of this, we expect FMC, CHMT and AVD to highlight their strong mix of products not related to the US corn market.

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Chemicals

US Corn Stocks-To-Use
140,000 120,000 100,000 80,000
US Corn Ending Stocks (M Bushels)

70.00% 60.00% 50.00% 40.00%

US Corn Stocks-To-Use (%)

60,000
40,000 20,000 0

30.00%
20.00% 10.00% 0.00%

Source: USDA

1Q14 Weather Likely to Nominally Impact Results Some parts of the US experienced heavy snowfall and temperatures that were well below the monthly average during 4Q13. Inclement weather and significantly lower than average temperatures can impact the end market use of chemicals, such as bleach in the water treatment process. However, the Polar Vortex experienced in the beginning of 1Q13, causing extremely cold temperatures and snow across much of the US, will likely have a more meaningful impact to earnings, as shipments and production were disrupted. We anticipate management teams will field questions about the expected impact from adverse weather, but believe answers will largely be qualitative rather than quantitative. Headwinds we noted of 4Q13 results Date of Ticker Key Points STRH Note 1/3/2014 CE Oversupply in the EVA industry and falling emulsion polymers raw materials prices likely pressured Industrial Specialties Weak demand in India and a 35% surge in feedstock methanol prices in Asia have likely negatively impacted acetic acid margins, which forced CE to idle the Singapore acetic acid plant Some customers may have delayed shipments into 2014 to manage yearend inventories 12/24/2013 AXLL Reduced 4Q13 EPS estimate by $0.03 due to fire at AXLLs VCM unit in Lake Charles, LA that represents about 25% of the companys total capacity 12/20/2013 AVD AVD preannounced lower than expected 4Q13 sales and EPS (-38% YoY and -$0.02 in EPS, respectively) due to excess inventories in the channel that resulted from an unusually wet Spring 2013 that shortened the planted season in the Midwestern, US as well as lower planted acres in 2013 12/18/2013 ALB Preannounced below guidance 4Q13 EPS range of $1.02 - $1.07 due to cautious working capital management by customers across all segments and softer than expected brominated flame retardant demand trends
Source: STRH

1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013

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Chemicals

Chemical Sector 4Q13 Earnings Schedule

Name Fuller PPG Industries Tronox Celanese Ashland Olin Albemarle Air Products DuPont Praxair Dow Cabot Cytec Sherwin Williams Eastman PotashCorp Airgas FMC Petrologistics Valspar Mosaic Rockwood Westlake Axiall Huntsman Chemtura Kraton American Vanguard Kronos
Source: STRH, Factset

STRH Rating N/A NEUTRAL N/A BUY BUY NEUTRAL NEUTRAL BUY REDUCE BUY REDUCE NEUTRAL N/A N/A BUY N/A N/A NEUTRAL N/A N/A N/A NEUTRAL REDUCE NEUTRAL REDUCE BUY NEUTRAL NEUTRAL N/A

Release Date 1/15/2014 1/16/2014 1/21/2014 1/23/2014 1/27/2014 1/27/2014 1/28/2014 1/28/2014 1/28/2014 1/29/2014 1/29/2014 1/29/2014 1/30/2014 1/30/2014 1/30/2014 1/30/2014 1/30/2014 2/5/2014 2/5/2014 2/10/2014 2/11/2014 2/18/2014 2/18/2014 2/19/2014 2/21/2014 2/24/2014 2/27/2014 3/4/2014 3/11/2014

Earnings Call Date 1/16/2014 1/16/2014 NA 1/24/2014 1/28/2014 1/28/2014 1/29/2014 1/28/2014 1/28/2014 1/29/2014 1/29/2014 1/30/2014 1/31/2014 1/30/2014 1/31/2014 1/30/2014 1/30/2014 2/6/2014 NA NA NA NA NA NA NA 2/25/2014 2/28/2014 NA NA

Time 10:30AM 2:00PM NA 10:00AM 9:00AM 10:00AM 9:00AM 10:00AM 9:00AM 11:00AM 9:00AM 2:00PM 11:00AM 11:00AM 8:00AM 1:00PM 10:00AM 11:00AM NA NA NA NA NA NA NA 9:00AM NA NA NA

Dial-in 888-378-0320 877-474-9505 NA 877-448-3492 NA 800-860-2442 888-713-4215 719-325-2482 847-413-3238 617-399-3483 719-325-4784 888-713-4209 888-894-3692 NA 913-312-0944 877-881-1303 888-389-5987 800-230-1096 NA NA NA NA NA NA NA 877-494-3128 NA NA NA

Passcode 6881088 49803911 NA 27677200 NA NA 60369062 6987687 36193179 81692350 NA 95224182 27106301 NA 1703055 NA NA 313302 NA NA NA NA NA NA NA 31090330 NA NA NA

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Chemicals

January Reporting Calendar

January
MONDAY 30 TUESDAY 31 WEDNESDAY 1 THURSDAY 2 FRIDAY 3

7 Earnings Releases MON - BMO

10

13

14 Earnings Releases FUL - AMC

15 Earnings Releases PPG - BMO Earnings Calls PPG - 2pm FUL - 10:30am

16

17

20 Earnings Releases TROX

21

22 Earnings Releases CE - AMC

23 Earnings Call CE - 10am

24

27 Earnings Releases OLN - AMC ASH - AMC Earnings Releases ALB - AMC APD - BMO DD - BMO Earnings Calls APD - 10am, OLN - 10am DD- 9am, ASH-9am

28 Earnings Releases PX - BMO DOW - BMO CBT-AMC Earnings Calls PX - 11am ALB - 9am DOW - 9am

29 Earnings Releases CYT - AMC, POT - BMO SHW - BMO, ARG - BMO EMN - AMC Earnings Calls SHW - 11am, CBT - 2pm POT - 1pm ARG - 10am

30

31

Earnings Calls EMN - 8am CYT - 11am

Source: STRH, Factset

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Chemicals

February Reporting Calendar

February
MONDAY 27 TUESDAY 28 WEDNESDAY 29 THURSDAY 30 FRIDAY 31

4 Earnings Releases FMC - AMC PDH

Earnings Calls FMC - 11am

10 Earnings Releases VAL Earnings Releases MOS

11

12

13

14

17 Earnings Releases ROC WLK

18 Earnings Releases AXLL

19

20 Earnings Releases HUN

21

24 Earnings Releases CHMT - AMC Earings Calls CHMT - 9am

25

26 Earnings Releases KRA - AMC

27

28

Earings Calls KRA

Source: STRH, Factset

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Chemicals

March Reporting Calendar

March
MONDAY 24 TUESDAY 25 WEDNESDAY 26 THURSDAY 27 FRIDAY 28

3 Earnings Releases AVD

10 Earnings Releases KRO

11

12

13

14

17

18

19

20

21

24

25

26

27

28

Source: STRH, Factset

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Chemicals

4Q13 SunTrust and Consensus Comps

Name Air Products Airgas Albemarle American Vanguard Ashland Axiall Cabot Celanese Cytec Dow DuPont Eastman FMC Fuller Huntsman Kraton Mosaic Olin PotashCorp PPG Industries Praxair Rockwood Sherwin Williams Valspar Westlake Petrologistics Tronox Kronos Chemtura
Source: Factset

Ticker APD ARG ALB AVD ASH AXLL CBT CE CYT DOW DD EMN FMC FUL HUN KRA MOS OLN POT PPG PX ROC SHW VAL WLK PDH TROX KRO CHMT

STRH 4Q EPS(E) %YoY $1.32 2% NA $1.05 -10% ($0.02) -105% $1.32 18% $0.70 -41% $0.70 6% $0.98 46% NA $0.45 36% $0.56 409% $1.23 3% $0.97 20% NA $0.37 54% ($0.13) -38% NA $0.30 -23% NA $1.76 15% $1.57 14% $0.28 -40% NA NA $1.94 37% NA NA NA $0.10 -33%

Consensus % difference STRH vs 4Q EPS(E) %YoY consensus $1.34 3% -1% $1.18 13% NA $1.08 -8% -2% $0.01 -98% -433% $1.32 18% 0% $0.70 -41% 0% $0.71 8% -2% $1.01 50% -3% $1.11 54% NA $0.43 30% 5% $0.55 397% 2% $1.25 5% -1% $0.95 17% 2% $0.74 16% NA $0.37 54% 0% ($0.16) -25% -17% $0.43 -62% NA $0.29 -26% 5% $0.32 -38% NA $1.73 13% 2% $1.55 12% 1% $0.34 -28% -18% $1.35 17% NA $0.66 11% NA $2.17 53% -10% $0.26 3% NA ($0.25) -38.33% NA $0.01 -106% NA $0.11 -30% -5%

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Chemicals

GDP Outlook
2012 1Q GDP Growth US EU China Global 2 -0.1 8.1 2Q 1.3 -0.5 7.6 1.62 3Q 3.1 -0.6 7.4 1.81 4Q 0.1 -0.6 7.9 1.35 1Q 1.1 -0.78 7.7 1.62 2Q 2.5 0.06 7.5 2.22 2013 3Q 4.1 0.24 7.8 2.51 4Q 1.5 0.94 7.6 2.42 1Q 2.6 1.36 7.6 2.92 2Q 2.8 1.31 7.6 2.4 2014 3Q 2.9 1.41 7.4 2.91 4Q 3 1.52 7.4 2.99

Source: Bloomberg

Chemicals Universe Comp Table

Company ALB APD ASH AVD AXLL CBT CE CHMT DOW DD EMN FMC HUN KRA OLN PPG PX ROC WLK NEUTRAL BUY BUY NEUTRAL NEUTRAL NEUTRAL BUY BUY REDUCE REDUCE BUY NEUTRAL REDUCE NEUTRAL NEUTRAL NEUTRAL BUY NEUTRAL REDUCE Price Current $66.74 $111.25 $100.12 $23.60 $44.35 $51.93 $55.78 $26.90 $43.05 $63.73 $79.81 $75.73 $23.56 $22.37 $28.68 $190.70 $132.92 $73.80 $124.14 EV Current 5,953 29,442 10,830 646 4,274 4,538 10,739 3,178 63,752 63,063 16,567 11,690 8,868 832 2,682 28,764 48,464 4,366 8,354 EPS 2013E 4.03 5.50 6.10 1.15 3.67 2.91 4.45 0.76 2.29 3.86 6.33 3.80 1.53 0.05 2.01 8.23 5.95 1.76 8.49 2014E 4.80 5.90 6.84 1.50 4.45 3.65 4.96 1.36 2.56 4.04 6.90 4.45 2.41 1.38 2.00 9.71 6.66 1.70 9.14 Price/EPS 2014E 5 Yr Avg 13.9x 14.8x 18.9x 19.3x 14.6x 52.2x 15.8x NA 10.0x 11.3x 14.2x 11.3x 11.3x 11.6x 19.7x NA 16.8x 38.2x 15.8x 14.4x 11.6x 17.2x 17.0x 16.5x 9.8x 38.1x 16.3x NA 14.3x 12.5x 19.6x 18.9x 20.0x 19.9x 43.3x 11.8x 13.6x 17.1x EBITDA, $ mil 2013E 2014E 579 657 2,603 2,764 1,229 1,316 73 89 662 715 511 569 1,347 1,464 296 355 8,025 8,323 6,746 6,899 2,016 2,150 878 1,010 1,203 1,507 98 142 423 420 2,255 2,482 3,742 4,012 433 327 1,064 1,128 EV/EBITDA 2014E 5 Yr Avg 9.1x 9.4x 10.7x 9.9x 8.2x 9.1x 7.3x 15.2x 6.6x 11.3x 8.0x 6.6x 7.3x 7.3x 8.9x NA 7.7x 8.7x 9.1x 9.3x 7.7x 6.6x 11.6x 8.4x 5.9x 7.1x 5.9x NA 6.4x 6.0x 11.6x 7.8x 12.1x 10.6x 13.4x 7.0x 7.4x 8.8x Dividend Yield Current 1.4% 2.6% 1.4% 0.8% 1.5% 1.5% 1.3% 0.0% 3.0% 2.8% 1.8% 0.7% 2.1% 0.0% 2.8% 1.3% 1.8% 2.5% 0.7%

Source: STRH, FactSet

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Chemicals

Companies Mentioned in This Note

Albemarle Corporation (ALB, $66.74, Neutral) Air Products (APD, $111.25, Buy) Ashland Inc. (ASH, $100.12, Buy) American Vanguard Corp. (AVD, $23.60, Neutral) Axiall Corporation (AXLL, $44.35, Neutral) Cabot Corp. (CBT, $51.93, Neutral) Celanese (CE, $55.78, Buy) Chemtura Corporation (CHMT, $26.90, Buy) DuPont (DD, $63.73, Reduce) The Dow Chemical Company (DOW, $43.05, Reduce) Eastman Chemical Co. (EMN, $79.81, Buy) FMC Corp (FMC, $75.73, Neutral) Huntsman Corporation (HUN, $23.56, Reduce) Kraton Performance Polymers Inc. (KRA, $22.37, Neutral) Olin Corp. (OLN, $28.68, Neutral) PPG Industries (PPG, $190.70, Neutral) Praxair (PX, $132.92, Buy) Rockwood Holdings, Inc. (ROC, $73.80, Neutral) Westlake Chemical Corp. (WLK, $124.14, Reduce) Fuller (FUL, $52.55, NR) Tronox (TROX, $23.42, NR) Cytec (CYT, $93.73, NR) Sherwin Williams (SHW, $193.14, NR) PotashCorp (POT, $35.15,NR) Petrologistics (PDH, $12.63, NR) Valspar (VAL, $72.94, NR) Mosaic (MOS, $49.31, NR) Kronos (KRO, $17.30, NR) Monsanta (MON, $113, NR)

Analyst Certification
I, James Sheehan , hereby certify that the views expressed in this research report accurately reflect my personal views about the subject company(ies) and its (their) securities. I also certify that I have not been, am not, and will not be receiving direct or indirect compensation in exchange for expressing the specific recommendation(s) in this report.

Required Disclosures
Analyst compensation is based upon stock price performance, quality of analysis, communication skills, and the overall revenue and profitability of the firm, including investment banking revenue. As a matter of policy and practice, the firm prohibits the offering of favorable research, a specific research rating or a specific target price as consideration or inducement for the receipt of business or compensation. In addition, associated persons preparing research reports are prohibited from owning securities in the subject companies.
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Chemicals
Charts indicating changes in ratings can be found in recent notes and/or reports at our website or by contacting SunTrust Robinson Humphrey. Please see our disclosures page for more complete information at https://suntrust.bluematrix.com/sellside/Disclosures.action.

STRH Ratings System for Equity Securities

3 designations based on total returns* within a 12-month period**

Buy total return 15% (10% for low-Beta securities)*** Reduce total return negative 10% (5% for low Beta securities) Neutral total return is within the bounds above NR NOT RATED, STRH does not provide equity research coverage CS Coverage Suspended
Legend for Rating and Price Target History Charts: D = drop coverage I = initiate coverage T = transfer coverage SunTrust Robinson Humphrey ratings distribution (as of 01/16/2014):
Coverage Universe Rating Buy Neutral Sell/Reduce Count 213 210 9 Percent 49.31% 48.61% 2.08%

*Total return (price appreciation + dividends) **Price targets are within a 12-month period, unless otherwise noted ***Low Beta defined as industries with an average Beta of .0.8, using Bloombergs 5-year average Beta

Investment Banking Clients Past 12 Months Rating Buy Neutral Sell/Reduce Count 65 34 0 Percent 30.52% 16.19% 0.00%

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Chemicals

Other Disclosures
Information contained herein has been derived from sources believed to be reliable but is not guaranteed as to accuracy and does not purport to be a complete analysis of the security, company or industry involved. This report is not to be construed as an offer to sell or a solicitation of an offer to buy any security. SunTrust Robinson Humphrey, Inc. and/or its officers or employees may have positions in any securities, options, rights or warrants. The firm and/or associated persons may sell to or buy from customers on a principal basis. Investors may be prohibited in certain states from purchasing some over-the-counter securities mentioned herein. Opinions expressed are subject to change without notice. The information herein is for persons residing in the United States only and is not intended for any person in any other jurisdiction. SunTrust Robinson Humphrey, Inc.s research is provided to and intended for use by Institutional Accounts as defined in FINRA Rule 4512(c). The term Institutional Account" shall mean the account of: (1) a bank, savings and loan association, insurance company or registered investment company; (2) an investment adviser registered either with the SEC under Section 203 of the Investment Advisers Act or with a state securities commission (or any agency or office performing like functions); or (3) any other person (whether a natural person, corporation, partnership, trust or otherwise) with total assets of at least $50 million. SunTrust Robinson Humphrey, Inc. is a registered broker-dealer and a member of FINRA and SIPC. It is a service mark of SunTrust Banks, Inc. SunTrust Robinson Humphrey, Inc. is owned by SunTrust Banks, Inc. ("SunTrust") and affiliated with SunTrust Investment Services, Inc. Despite this affiliation, securities recommended, offered, sold by, or held at SunTrust Robinson Humphrey, Inc. and at SunTrust Investment Services, Inc. (i) are not insured by the Federal Deposit Insurance Corporation; (ii) are not deposits or other obligations of any insured depository institution (including SunTrust Bank); and (iii) are subject to investment risks, including the possible loss of the principal amount invested. SunTrust Bank may have a lending relationship with companies mentioned herein. SunTrust Robinson Humphrey, Inc. 2014 . All rights reserved. Reproduction or quotation in whole or part without permission is forbidden. ADDITIONAL INFORMATION IS AVAILABLE at our website, www.suntrustrh.com, or by writing to: SunTrust Robinson Humphrey, Research Department, 3333 Peachtree Road N.E., Atlanta, GA 30326-1070

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