BofAML 2011 in Dust Rials Conference

Bank Of America Merrill Lynch 2011 Industrials Conference y
z Andreas Kramvis President and CEO, Specialty Materials
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 , , p statements of fact, that address activities, events or developments that we or our management intend, expect, project, believe or anticipate will or may occur in the future are forward-looking statements. Forward-looking statements are based on management s assumptions and assessments in light of past managements experience and trends, current economic and industry conditions, expected future developments and other relevant factors. They are not guarantees of future performance, and actual results developments and business decisions performance results, 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 the principal risks and uncertainties that affect our performance in our Form 10-K and other filings with the Securities and Exchange Commission.
Bank of America Merrill Lynch 2011 Industrials Conference December 6, 2011
Specialty Materials Overview

Financials
($B)
Sales Segment Margin %
Recent Highlights
$5.6$5.7
CAGR
~17%
Record 3Q 2011 Performance

- Sales up 25%, Op. Margins @ 17.3% p , p g
$4.1
$4.7 $4 7 1~18.5% 15.8%
Securing Major Wins Across Portfolio

- Robust backlog; strong energy demand
14.6% 14 6%
2009 2010 2011E
S Sunoco Ph Phenol Acquisition Cl lA i i i Closed d

- Secured critical raw material input
Business Units
UOP North America
Geographic Mix
Latin America
EMEA Advanced Materials Asia Pacific
Strong Performance Through Cycle

2 Bank of America Merrill Lynch 2011 Industrials Conference December 6, 2011
Business And End Market Update

Business Current Environment
Continued global investments to meet refined product demand High win rates and execution of backlog driving strong results Overall tight caprolactam supply / demand, however China prices moderating High crop prices spurring fertilizer (AS) demand Moderation from record price levels due to increased supply
2012 Assumptions
Backlog conversion key growth driver Continued high win rates on global g petrochemical capacity p y refining & p investments Volume growth, phenol accretion Continued tight supply / demand environment
UOP
Resins & Chemicals
Fluorine Products
Continued pricing pressure Emerging Region volume growth
Specialty Products
Continued strength in Armor, Aclar New product wins Pockets of softening demand Weaker demand following 1H inventory build due to supply uncertainties (Japan quake)
Successful new product launches
Electronic Materials
Moderate growth driven by mobile pp device market and new applications
Environment Positive, However Uncertainty Overhang

Key Differentiators
Differentiator Mechanism
Annual Segment Margin, SM vs. Industry Peers Margin vs Segment Margin, Percent
24%
Operating Approach & Leadership
Business Decision Week
Peer Crown Jewels

20%
Analytical Capabilities & Innovation Engine
16%
Technology Investments & VPDTM P Process
Honeywell SM
12%
Specialty
8%
Plant Performance & Process Technology
HOS & Plant Strategic Plans
4% 2005 2006 2007 2008 2009 2010 2011E

Peer Crown Jewels based on UTX Otis, TYC ADT, EMR Process Management, DHR Test & Measurement, MMM Industrial Segments Specialty based on 40 Specialty Chemical companies Reporting as of 11/29/11
Driving Superior Financial Performance

Three Business Models

Model Business Characteristics Product Examples Low-Global-Warming Platform Lithium-Ion Lithium Ion Battery Technology New Nylon Resins More From A Barrel Of Oil
New Molecule & Scale-Up
Molecule screening and discovery Process scale-up important Resins & Chemicals Major plant investments before product launch Fluorine Products
Technology Leadership
UOP
Technology licensing model Invent, demonstrate and license O Ongoing supply of catalysts i l f t l t
Chemicals From Natural Gas & Coal Bio-Renewables
Fast-Cycle App. Develop.
Specialty Products
VOC drives new product/ service ideas Customizing existing technologies Fast time to market
Asphalt Processing Photovoltaic Materials Next-Generation e t Ge e at o Spectra Fiber
Strong Technology And Business Alignment

Fluorine Products: 2011E Sales ~$1.1B

Leading Positions
250 200 150 100
Winning In The Marketplace

US Housing Starts (1) HON HVAC Refrigerant Volume
Heat Transfer/ Refrigerants R fi t Industrial Structural Nuclear Enclosures E l
50 0 2006
2007
2008
2009
2010
2011E
Heat Transfer / Refrigerants Residential / Commercial / Supermarket / Mobile Applications Structural Enclosures Insulation / Roofing / Weatherization Solutions for Residential / Commercial and Appliances Nuclear Services Conversion Capabilities and Inventory Management Industrial Products Differentiated Enabling Aerosol, Solvent and Catalyst Materials
125 100 75 50 25 0
US Housing Starts (1) Refrigerator Shipments (2) HON Foam Volume
2006
2007
2008
2009
2010
2011E
Growth Exceeding Macros

6
(1) Source: American Chemistry Council (2) Source: Actuals: The Association of Home Appliance Manufacturers; 2011 Estimate: Honeywell
Next-Generation LGWP Solutions
Mobile Air-Conditioning
Aerosol / Insulation Panels

GWP of 6 vs. 1430 vs Meets All Requirements Non-Flammable In U Today I Use T d
Foam Insulation / Solvents

GWP of 7 vs. 1030 vs Improved Energy Efficiency Non-Flammable Near D N Drop-in R l i Replacement t
Stationary Air Conditioning

>50% GWP Reduction Same Energy Efficiency Safer Than Hydrocarbons Solutions by Applications
Environment: Performance: Safety: Cost-to-Serve:

Annual Sales Opportunity:
GWP of 4 vs. 1430 Meets All Requirements Non-Flammable Near Drop-in Replacement
~$300M
~$100M
~$200M
~$300M
Creating Next Generation Technology Leadership Position

Resins And Chemicals: 2011E Sales ~$1.4B

Leading Positions
Resins
Growth Drivers
Capro Demand >> Supply
- Asia Driving 60% of Global Growth

Volume( k MT) AvailableCapacity(@90%) CPLDemandEstimate
Caprolactam
Ammonium Sulfate
Demand > Supply
Phenol / Ph l Intermediates
Caprolactam Key Ingredient in Making Nylon Resins and Fibers Nylon 6 Resin Used in the Manufacture of a Wide Range of Products Ammonium Sulfate Fertilizer Caprolactam Co-Product Used for Crops and Lawns Phenol / Intermediates Phenol, Acetone and Co-Products From Caprolactam / Phenol Used in the Production of Various Chemicals
4,000
3,500
Increased Competitive Advantage via HOS Expanding Global R&D Capabilities
- Sulf-N 26, Fishing Filament for Asia,

Flexible Packaging
Strong Global Franchise

Specialty Products: 2011E Sales ~$1.2B

Strong Niche Positions Summary Attractive businesses serving niche segments in larger markets
Performance Materials ~$0.8B Electronic Materials ~$0.4B
Solutions represent small % of total cost, but deliver high value or critical need Global applications development capabilities reduce customer conversion cycle-times and drive new market creation Rigorous sales pipeline processes closely aligned with deployment of global sales, technology and capital Resources Funding high return, incremental, organic growth investmentsPotential q pp bolt-on acquisition opportunities
Performance Films Healthcare, Solar and Industrial Applications High Strength, Light Weight Fibers Military and Law Enforcement Armor Specialty Additi S i lt Additives High Performance Waxes and Lubricants Electronic Materials Semiconductor Targets, Polymers and Chemicals
SMs Fast Cycle Application Engine

Fast Cycle Applications Engine

Highest Moisture Barrier
Performance Films
Best Cost / Performance High Growth Industries Lightest Weight Best Ballistic Performance Mission Critical Applications
Armor Rope Fishing Pharmaceuticals Solar Packaging
High Strength Fibers
Specialty Additives
Small % Of Costs High Value Add Fragmented; Profitable Niches

Adhesives Oral Care Asphalt
Electronic Materials
Niche Applications High Barriers To Entry Extending To New Markets g

Semiconductors LEDs Solar
Leverage Technology Platforms To Create New Markets

UOP
Financials
Sales $B
Segments S t
Petrochemicals
$1.6
$1.9
Refining
Gas & Hydrogen Manufacturing g Adsorbents and Aluminas
2009
2011E
Geographic Mix
Latin America EMEA
Products
Process Technology and Equipment P T h l dE i t
Licensing, Services and Equipment for Refining, Petrochemical and Gas Processing Industries
Catalysts, Adsorbents and Specialties

Materials for Process Technology and Manufacturing North America Asia Pacific
Renewable Energy and Chemicals

Process Technology for Transportation Fuels and Chemicals
Industry Leading Technology And Solutions

Current UOP Landscape

What Y A S i Wh t You Are Seeing
Emerging Region Growth Improved Refining Margins
Implication T I li ti To UOP
Continued capacity investment driven by energy security needs and local demand Refinery utilization is increasing Product prices closing gap on crude US refiner upgrading investments to capitalize on U.S. West Texas Intermediate pricing advantage vs Brent vs. Increased unconventional gas development creating natural gas liquids recovery/processing opportunities Stimulated US petrochemical projects Limited impact due to short-term swings Long-term pricing drives investment economics
Shale Gas Development
Oil Price Volatility
Financial Uncertainty
Financing challenges causing some project delays Renewed focus on most economically viable projects U t Upstream project d l j t delays Limited impact on downstream capacity additions
Mid East Unrest

12
UOP Positioning In Energy Supply Chain

Input
Crude Oil Process technology, catalysts, equipment and services for fuel and petrochemical feedstock f d t k production. d ti Petrochemical Feedstocks
UOP Technologies
End Products
Gasoline Diesel LPG Petrochemical feedstock
Process technology, catalysts, equipment and services to produce para xylene para-xylene, propylene, phenol and LAB.
Chemicals used to produce: Water bottles Textiles Plastics Detergents Natural N t l gas f for residential, commercial and power
Natural Gas
Treating t h l i T ti technologies, adsorbents and d b t d services to remove contaminants from natural gas prior to distribution.
Renewables
Process technology, catalysts, equipment and services to produce real fuels from a range of biofeedstocks, from forest residuals to algae.
Honeywell Green Diesel Honeywell Green Jet Oil for electricity generation and transportation fuels
Unique Technologies To Boost Supply Of Key Products

Typical Refinery Process

UOP Benefits
etrochem Pe Fee & Other ed ~10%
Produce more highmargin petrochemical feedstock Produce more highdemand diesel Produce cleaner fuels to meet regulations Optimize refineries and boost margins
$10B+ Typical Investment
Transportation Fuels ~70%
B Bottom of the Barre el ~20%

14
Process cheaper, but more difficult-to-refine heavier crudes Upgrade bottom-of-thebarrel to higher quality, higher margin p g g products
UOP Technologies Critical To Refinery Investments

UOP Industry Landscape - Refining

Global Energy Demand Tracks GDP
225
Refining
Refining Capacity Additions

4,000 3,000
Oil
Quadrillio Btu on
Natural Gas
2012-2016 Equivalent to 30 new refineries
175
kBPD D
125 75
Source: US Energy Information Administration
2,000 1,000 0 Asia Mid-East CIS/Africa Latin America North America
2007
2015
2020
2025
2030
2035
Refining Opportunity
Regional Factors National Security
Summary
5-8% Growth
Energy Demand Tracks GDP, However;

- EM capacity additions ~5x of NA/EU - Demand mix, environmental, security, other f t th factors drive refining growth di fi i th - Changing crude inputs require refinery upgrades
Environ. Reg. Capacity Replacement
~1.4%
Base Oil Demand
Underlying Growth Trends In UOP Sweet Spot

Refining Growth
- Greater demand for energy efficiency and optimization ti i ti
15
Boosting Diesel Yield

Diesel Demand > Other Fuels
8000
Thousand Bb / Day bl Forecast Product Demand 2010-2020
Refining
UOP Technology Leadership

UOP UnicrackingTM is highest yield, lowest sulfur diesel technology > 200 units globally UOP UnionfiningTM improves quality to meet more stringent fuel regulations > 300 units globally Hydrocracking and Hydrotreating Catalysts optimize yields and profitability
5000
2000
-1000
Gasoline
Diesel
Kero / Jet
Naptha
Source: 2010 Purvin & Gertz GPMO
Residual Fuel Oil
Regulation Driving Reduced Sulfur Content g g
Actual Customer Result

Increase in Feedstock Value ($/MT) Incremental Conversion to Higher Value Fuels Customer Value Created
$270 60% $2.3B
Source: 2008 HART World Refining Fuels Update
16
Upgrading Lower Quality Crude

Heavy Crude Increasing As Feedstock
14000 12000 10000 8000 6000 4000 2000 0 1995 2000 2005 2010 Source: Purvin & Gertz 4Q10 Price & Margin Update 2015 2020
Refining

UOP UniflexTM delivers industry leading conversion (90%+) to transportation fuels while minimizing residue by byproducts UOP Residue FCC process costeffectively converts moderate to y severely contaminated feedstocks into gasoline
Global Heavy Crude Production

KBPD
Ability To Refine Provides Margin Lift y g

16 Ref fining Net Cash Ma argin, $/bbl

Increase in High-Value Fuel Conversion Increase in Refiner Margins Customer Value Created
Light Sweet Cracking

12 8 4 0 -4
Light Sour Cracking Heavy Sour Coking
4-6% 50% $300M
1990
17
1995
2000
2005
2010
2015
2020
Source: Purvin & Gertz

Integrated Solutions To Optimize Refinery Flexibility And Margins

Complex Refinery Advantage
Less Complex, Small
Margin $ per ba arrel ~$15
Refining
UOP Capabilities
Configuration
More Complex, Large
+200%
~$5
+100%
~$4 ~$2
Training & g Start-Up
Design Basis g Optimization
Low Demand
Source: International Energy Agency
High Demand
Front-End Engineering Design
Process Design Services
Optimized For Dynamic Inputs And Outputs p y p p

Increase in Refinery Margins vs. Base Design Reduction in Construction Cycle Time Customer Value Created
Feedstock type, quality and cost Output demand and price Regulatory changes Environmental footprint Schedule and project cost
18
20% 1 yr $2B
UOP Industry Landscape - Petrochemicals

Para-xylene Para xylene Demand
50 Million MTA 40 30 20 10 0 1996 1999 2002 2005 2008 2011 2014
Petrochemicals
Sector Drivers
Para-xylene used to manufacture clear plastic water bottles, polyester etc. Demand driven by EM, primarily China (11% CAGR) and Mid-East (13% CAGR) Additional 12 Million MT of capacity required by 2016 ( 15 plants) (~
7% Growth
Propylene Supply/Demand
5% Growth
Sector Drivers
P Propylene ( l fi ) are used i th l (olefins) d in the production of polymers used for plastics Demand driven by EM growth in packaging and automotive Traditional supply sources reducing due to use of ethane cracking (vs. naptha) in ME Additional 14 Million MT of capacity required by 2016 (~ 25 plants)
Underlying Growth Trends In UOP Sweet Spot

Boosting Petrochemical Yield

Strong Demand For Para xylene Para-xylene
Polyester Fibers Globalization and shift to synthetics from natural fibers P.E.T. Bottles Globalization and penetration into existing non-plastic applications
Petrochemicals
UOP Technology Leadership World leader in para-xylene technology with large global installed gy g g base Lowest cost, most energy efficient para xylene para-xylene technology with largest single train in operation Actual Customer Result
Increase in Feedstock Value ($/MT) Improvement in Energy Efficiency
Margin Lift For Customers g
Market Val $ lue
~$600 / ton
~$450 / ton
$450 30% $450M
Crude Oil
Transportation Fuels
Para-xylene (P-X)
Customer Value Created
20
Boosting Propylene SupplyToday

Unique UOP Path To Propylene
Traditional Route to Propylene
Crude Naptha or Gas Oil Propylene
Petrochemicals
UOP Technology Leadership World leader in on-purpose propylene (Oleflex) technology with largest installed base Lowest cost, most energy efficient technology with largest single train gy g g in basic engineering design Actual Customer Result
Increase in Feedstock Value ($/MT) Improvement in Energy Efficiency Customer Value Created
Unique UOP Oleflex Technology On-purpose Propylene

Gas Field
Propane

~$550 / ton
$550 30% $200M
Market Valu $ ue
Propane
21
Propylene
New Routes To Propylene / Ethylene

Next-Gen Next Gen UOP Path To Propylene / Ethylene
Traditional Route to Propylene
Crude Naptha or Gas Oil Propylene
Petrochemicals

UOP pioneering methanol-to-olefin (MTO) technology to produce olefins from feedstocks other than petroleum Successful demonstration plant in Belgium with partner Total Petrochemicals Beachhead Beachhead project win in China with Wison Clean Energy Company
Unique UOP MTO Technology On-purpose Propylene / Ethylene

Coal Methanol

Increase in Feedstock Value ($/MT) Reduction in Production Costs Customer Value Created
Market Val $ lue
~$1300 / ton
~$590 / ton
$590 40-60% $450M
22
Recent UOP Wins

Won six W i on-purpose propylene t h l l technology contracts, including t t i l di five in China Cornerstone China s Cornerstone win with Chinas Wison (Nanjing) Clean Energy Company Ltd to license MTO (methanol-to-olefins) technology Won contracts to provide gas processing technology for floating production, storage and offloading (FPSO) vessels d ti t d ffl di l UOP adsorbents are now being used to remove radioactive p g g contaminants from seawater in Japan following the damage to the Fukushima incident Received approval for Green Jet Fuel use in passenger flights and conducted the first transatlantic flight to be powered by renewable jet fuel. Other firsts included the first commercial US flight, first established route and the first China flight on renewable jet
Leading TechnologyWinning In The Marketplace
SM Global Reach
High Growth Regions Hi h G th R i
India Latin America China / SE Asia Africa FSU
Mid East
~$2.8B in 2012
~45% of Total Sales
New/Expanded R i N /E d d Regional T h i l S l and/or S l Technical Sales d/ Support t New/Expanded Technology Development Capabilities New/Expanded Procurement Capabilities New/Expanded Project Engineering Capabilities
High Growth Regions Driving ~60% Growth Through 2016

Operational Excellence
Plants Outperforming Prior Peak
Example
Mobil AL le,
HOS Bronze
HOS Deployment Status

100%
Volume
Conversion Cost
Gold Silver
3%
Catalysts
9%
50% 2011 2008 2011
Bronze
2008
8 1
HOS Deployed
2013 2015
Orange, TX T
HOS Bronze
10%
Wax Additives
1%
2007 2011
0% 2011
HOS Preparation
2007
2011
Disciplined Decision Making p g

Strategic Plans across all plants Daily monitoring rigor High return investments: - Systematic debottlenecking of existing assets - Never replace in kind - Fund attractive growth opportunities
Pottsville, PA
HOS Bronze
26%
Aclar Film
16%
2008 2011
2008
2011
Spokane, WA
HOS Bronze
24%
Semicon Targets S i T t
18%
2008 2011
2008
2011
Maximizing Existing Manufacturing Assets

Technology Excellence
Technology Advantage
Industry leading R&D investments
1,000+ technologists, including 400 PhDs Leading edge equipment & processes
Next-Gen Solutions
IP portfolio
2,700 U.S. patents Rich pipeline with breakthrough technologies
Natural Gas Clean-Up
Asphalt Additives
Green Jet / Diesel
Photovoltaic Materials
Global resource base

One Honeywell Centers of Excellence East-to-West and East-for-East capabilities
Waste Biomass to Fuels High Purity LiPF6 for Vehicles MethanoltoOlefins LGWP (4th generation replacements)
Pipeline Focus, Health And Velocity

# Active Projects
324 4.0 213 2.1 100
New 50%
Contribution To Growth
2011 2016
Replacement 25% Replacement 50% New 75%
Yr 5 Gross Sales Potential ($B)
Current Yr Launch Sales ($M)
200
34%
2009 2011
90%
2009 2011
100%
2009 2011
Delivering Results TodayRich Pipeline Fuels Growth

Summary
Business Continuing To Drive Industry Leading Returns - Strong performance through downturn and recovery - Outlook positive, outperforming targets Technologies Aligned With Macro Trends g g - Innovation engine feeds robust new product pipeline - Solutions delivering substantial HON and customer value Investing For Long-Term Growth - Funding development and scale-up of breakthrough technologies - Significant value creation potential
Strong Franchise, Extending Market Leadership

BofAML 2011 in Dust Rials Conference

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Bank Of America Merrill Lynch 2011 Industrials Conference y

z Andreas Kramvis President and CEO, Specialty Materials

Forward Looking Statements

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

Specialty Materials Overview

Record 3Q 2011 Performance

$4.7 $4 7 1~18.5% 15.8%

Securing Major Wins Across Portfolio

S Sunoco Ph Phenol Acquisition Cl lA i i i Closed d

EMEA Advanced Materials Asia Pacific

Strong Performance Through Cycle

Business And End Market Update

Resins & Chemicals

Continued pricing pressure Emerging Region volume growth

Successful new product launches

Moderate growth driven by mobile pp device market and new applications

Environment Positive, However Uncertainty Overhang

Operating Approach & Leadership

Business Decision Week

Peer Crown Jewels

Analytical Capabilities & Innovation Engine

Technology Investments & VPDTM P Process

Plant Performance & Process Technology

HOS & Plant Strategic Plans

4% 2005 2006 2007 2008 2009 2010 2011E

Driving Superior Financial Performance

Three Business Models

New Molecule & Scale-Up

Chemicals From Natural Gas & Coal Bio-Renewables

Fast-Cycle App. Develop.

Asphalt Processing Photovoltaic Materials Next-Generation e t Ge e at o Spectra Fiber

Strong Technology And Business Alignment

Fluorine Products: 2011E Sales ~$1.1B

Winning In The Marketplace

Heat Transfer/ Refrigerants R fi t Industrial Structural Nuclear Enclosures E l

US Housing Starts (1) Refrigerator Shipments (2) HON Foam Volume

Growth Exceeding Macros

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

Next-Generation LGWP Solutions

Aerosol / Insulation Panels

Foam Insulation / Solvents

Stationary Air Conditioning

Environment: Performance: Safety: Cost-to-Serve:

Creating Next Generation Technology Leadership Position

Resins And Chemicals: 2011E Sales ~$1.4B

- Asia Driving 60% of Global Growth

Increased Competitive Advantage via HOS Expanding Global R&D Capabilities

- Sulf-N 26, Fishing Filament for Asia,

Strong Global Franchise

Specialty Products: 2011E Sales ~$1.2B

SMs Fast Cycle Application Engine

Fast Cycle Applications Engine

High Strength Fibers

Small % Of Costs High Value Add Fragmented; Profitable Niches

Niche Applications High Barriers To Entry Extending To New Markets g

Leverage Technology Platforms To Create New Markets

Gas & Hydrogen Manufacturing g Adsorbents and Aluminas

Catalysts, Adsorbents and Specialties

Renewable Energy and Chemicals

Industry Leading Technology And Solutions

Current UOP Landscape

Shale Gas Development