Hexion Q307lEarningsCall

Third Quarter 2007 Earnings Conference Call

November 14, 2007

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Certain information in this presentation may be considered forward-looking information within the meaning of the Private Securities Litigation Reform Act of 1995. This information is based on the Company's current expectations and actual results could vary materially depending on risks and uncertainties that may affect the Company's operations, markets, services, prices and other factors as discussed in filings with the Securities and Exchange Commission. These risks and uncertainties include, but are not limited to, industry and economic conditions, competitive, legal, governmental and technological factors. There is no assurance that the Company's expectations will be realized. The Company assumes no obligation to update any forward-looking information contained in this presentation should circumstances change, except as otherwise required by securities and other applicable laws.

This presentation contains non-GAAP financial measu res. A reconciliation to the nearest U.S. GAAP financial measures is included at the end of the presentation.

Forward-Looking Statements

Overview of Third Quarter Results

Craig O. MorrisonChairman, President & Chief Executive Officer

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Third Quarter 2007 Highlights

Hexion Specialty Chemicals delivered strong results in Q307

� Revenues increased 7% over prior year� Gross margins of 15%, an increase of 153 basis points over prior year� Operating income of $88 million, an increase of 54% over prior year� Segment EBITDA (1) of $162 million, a 20% increase over prior year

Strong international results and diversified product portfolio continued to offset the softness in North American housing and automotive markets

Favorable product mix, decreased transaction expenses, flattening raw material costs (through Q307), and synergy achievement improved Hexion’s YTD bottom line compared to the prior year

� Looking ahead, Hexion recently announced selective price increases focused on offsetting the volatility of certain key raw materials

Hexion remains on track to achieve $175 million in targeted synergies

The acquisition of the resins and formaldehyde business of Arkema GmbH was completed on November 1, 2007, further strengthening the company’s international footprint

September 30, 2007 LTM pro forma adjusted EBITDA of $706 million

Hexion’s pending merger with Huntsman Corporation received Huntsman stockholder approval on October 16, 2007 (2)

Hexion Continues to Execute its Strategic and Operational Plan(1) Segment EBITDA and Adjusted EBITDA are non-GAAP financial measures. The closest GAAP financial measure is Net Income (Loss). A table that reconciles these two measures is at the end of this presentation. Management believes that

Adjusted EBITDA is meaningful to investors because the Company is required to have an Adjusted EBITDA to Fixed Charges ratio of greater than 2.0 to 1.0 to incur additional indebtedness under its indenture for the Second Priority Senior Secured Notes. As of September 30, 2007, the Company was able to satisfy this covenant and incur additional indebtedness under its indentures. Last Twelve Month (LTM) Adjusted EBITDA includes $70 million of in-process Hexion synergies and $27 million of acquisition adjustments.

(2) Transaction remains subject to various conditions, including expiration or termination of applicable waiting periods under the Hart-Scott-Rodino Act, review by foreign jurisdictions and other customer closing conditions.

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Improving Top- and Bottom-Line Results

nm(14)(2)Net loss

135

57

$ 1,336

2006

↑↑↑↑ 54%88Operating Income

↑↑↑↑ 20%

↑↑↑↑ 7%

∆∆∆∆

162

$ 1,427

2007

Segment EBITDA (1)

Revenue

($ in millions)

Hexion Results Quarter Ended September 30

(1) Segment EBITDA excludes in-process synergies and the pro forma effect of acquisitions.

Hexion Posted its 5th Consecutive Quarter of Double-digit EBITDA Growth

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2007 YTD Results Continue to Compare Favorably to P rior Year

nm(54)(2)Net loss

401

227

$ 3,896

2006

↑↑↑↑ 24%281Operating Income

↑↑↑↑ 21%

↑↑↑↑ 11%

∆∆∆∆

486

$ 4,330

2007

Segment EBITDA (1)

Revenue

($ in millions)

Hexion Results Nine Months Ended September 30

(1) Segment EBITDA excludes in-process synergies and the pro forma effect of acquisitions.

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8%

5%

13%

Net Sales

Performance Products

Coatings& Inks

Forest & Formaldehyde

Products

Epoxy & Phenolic

Resins

12%

8%

12%

9%

Q307 vs. Q306 YTD vs. Prior Year

Broad Product Portfolio Supports YTD Revenue GainsBroad Product Portfolio Supports YTD Revenue Gains

Revenue Gains Driven by Organic Growth and Strategic Acquisitions

(4) %

8

21%

34%

(1)%

12%(5)%

51%

38%

Ongoing Growth in Hexion’s Overall Segment EBITDA During Third Quarter and YTD 2007

Segment EBITDA

(20)%

FFP

C & I

PP

EPRD

Q307 vs. Q306 YTD vs. Prior Year

HexionHexion’’s Overall Segment EBITDA Margins Improved s Overall Segment EBITDA Margins Improved in Q307 (11.4% versus 10.1%) and YTD07 (11.2% versus 10.3%)in Q307 (11.4% versus 10.1%) and YTD07 (11.2% versus 10.3%)

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Hexion Remains On Pace to Achieve $175 Million in S ynergies

Sourcing M anufacturing SG&A

$155

$20

As of FY05

$105

$70

As ofFY06

As ofQ307

$70Unrealized Synergies

$105Achieved Synergies

Achieved($ millions)

$70

Summary:

� Achieved $10 million in targeted synergies in Q307

� Actions in place to achieve $125 million in synergies by year-end 2007

� Synergies remain a significant contributor toward Hexion’s gross margin expansion and favorable “SG&A as a percentage of sales” comparisons through Q307

FY ’06 9/30/07

$105

SourcingManufacturingSG&A

Targeted Synergy Focus Areas

$75 mm

$67 mm

$33 mm($ in millions)

Financial Review

William CarterExecutive Vice President & Chief Financial Officer

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Epoxy and Phenolic Resins Segment Highlights

$63

$544

2006

↑↑↑↑ 51%$95 Segment EBITDA

↑↑↑↑ 13%

∆∆∆∆

$614

2007

Revenue

($ in millions)

Quarter Ended September 30

Q3 ‘07 Sales Comparison YOY

13%--5%13%(5)%

TotalAcquisitions/Divestitures

CurrencyTranslation

Price/MixVolume

EPRD benefited from favorable demand and product mix in several specialty product lines

Productivity initiatives and raw material passthrough capabilities supported increased segment margins (Q307 EBITDA margin improvement of 390 basis points compared to prior year period)

Versatic Acids and Derivatives rebounded from a force majeure in Q207 for a key raw material to post improved sales and EBITDA

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Formaldehyde and Forest Product Resins Segment Highlights

$41

$357

2006

↓↓↓↓ (5)%$39 Segment EBITDA

↑↑↑↑ 8%

∆∆∆∆

$387

2007

Revenue

($ in millions)

Ongoing pressure in the North American housing market resulted in decreased volumes

Positive demand and diverse applications for formaldehyde contributed to increased sales

Strong international demand continued for formaldehyde-based resins, specifically in Latin America, Europe and Asia Pacific region

Net impact of acquisitions and divestitures contributed $3 million in increased Segment EBITDA in Q307 compared to Q306



8%10%4%2%(8)%


CurrencyTranslation

Price/MixVolume

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Coatings and Inks Segment Highlights

$25

$343

2006

↓↓↓↓ (20)% $20 Segment EBITDA

↓↓↓↓ (4)%

∆∆∆∆

$329

2007

Revenue

($ in millions)

Coatings demand negatively impacted by the N. American housing market, while Inks volumes in the Asia Pacific region were pressured by increased competition

Shutdown of Clayton U.K. facility, announced in July, is proceeding as planned

Q307 announcement of production shutdown for heatset ink vehicle products at Pleasant Prairie, Wisconsin, site to reduce costs and respond to changing market conditions



(4)%--5%3%(12)%


CurrencyTranslation

Price/MixVolume

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Performance Products Segment Highlights

$ 16

$ 92

2006

↑↑↑↑ 38%$ 22 Segment EBITDA

↑↑↑↑ 5%

∆∆∆∆

$ 97

2007

Revenue

($ in millions)

Increasing product sales to a diversified customer base and favorable product mix resulted in positive results for oilfield products

Strong demand for Oilfield products stemmed primarily from the U.S. and Mexico in Q307

Hexion continues to fully leverage its newest facility, the Sturgeon site, near Alberta, Canada

Decreased foundry volumes resulting from sluggish N. American auto demand continue to impact segment results



5%--1%6%(2)%


CurrencyTranslation

Price/MixVolume

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Balance Sheet Update

Hexion generated $44 million in cash from operations during the third quarter 2007 and $84 million year-to-date 2007

Net debt outstanding as of Q307 decreased $24 million compared to Q207 (1)

In August 2007, Hexion funded available incremental borrowings of $100 million under its senior secured credit facility

Maintaining capital expenditure target of $120 million in 2007

Cash plus borrowing availability of $535 million at September 30, 2007

Net debt as of Q307 Totals $3.5 Billion

(1) Excludes $100 million in funding requirement for pending Huntsman Transaction. In connection with the pending Huntsman acquisition, Huntsman terminated an Agreement and Plan of Merger with Basell AF. As a result, Huntsman paid Basell AF a break-up fee in the amount of $200 million, of which Hexion funded $100 million in July 2007.

Transaction Update & Third Quarter 2007 Summary

Craig O. Morrison

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Huntsman Acquisition Overview

Hexion and Huntsman entered into a definitive agreement on July 12, 2007 for Hexion to acquire Huntsman Corporation (NYSE: HUN) for $28.00 in cash for each outstanding Huntsman share of common stock

Huntsman stockholders approved the merger agreement at the special stockholder meeting held on Oct. 16, 2007

While remaining separate companies until the transaction is completed, integration planning is proceeding

Governmental anti-trust reviews are underway and both companies are cooperating fully

Financing has been secured and the transaction is progressing as planned with closing projected to be in the first quarter of 2008.

(1) Huntsman shareholder meeting held on October 16, 2007 for shareholders of record as of the close of business on September 4, 2007 to vote upon adoption of the merger agreement.(2) Pending transaction subject to previously disclosed conditions prior to closing, including regulatory review and other customary closing conditions.

(1)

(2)

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Summary: Hexion Third Quarter 2007 Results

Hexion delivered strong financial results in Q307 with a 7% increase in quarterly revenues and a 20% increase in Segment EBITDA

Favorable product mix, decreased transaction costs, flattening raw materials and synergy achievement drove our 5th consecutive quarter of double-digit EBITDA growth

The company remains on track to achieve $175 million in targetedsynergies

September 30, 2007 LTM pro forma adjusted EBITDA of $706 million

The pending merger with Huntsman, which recently received Huntsman stockholder approval, will create one of the world’s largest specialty chemical companies

Hexion Continues to Execute its Strategic and Operational Plan

(1)

(1) Huntsman shareholder meeting held on October 16, 2007 for shareholders of record as of the close of business on September 4, 2007 to vote upon adoption of the merger agreement. Pending transaction subject to previously disclosed conditions prior to closing, including regulatory review and other customary conditions.

Appendices

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Reconciliation of Non-GAAP Financial Measures

(52)------Loss on extinguishment of debt

(4)(16)(3)(6)Business realignments

--

4

--

(54) (2)(14) (2) Net income (loss)

(123)(145)(45)(49)Depreciation and amortization

(41)(43)(11)(10)Income tax benefit (expense)

(171)(237)(61)(84)Interest expense, net

(68) (63)(32) (21)Total adjustments

11 (17)(11) (11)Total unusual items

(8)(9)(5)(9)Other

(14)--(1)--Discontinued operations

(3)--(1)Purchase accounting effects/inventory step-up

40 8(1) Gain on sale of business

Unusual items:

(13)(17)--(2)Non-cash charges

(45)(28)(21)(8)Integration costs

(21)(1)--Transaction costs

Items not included in Segment EBITDA

Reconciliation:

401 486 135 162 Total

(34)(41)(10)(14)Corporate and Other

4757 16 22 Performance Products

7069 25 20 Coatings and Inks

113 126 41 39 Formaldehyde and Forest Product Resins

205 275 63 95 Epoxy and Phenolic Resins

Segment EBITDA:2006200720062007

Nine months ended Sept. 30Three months ended Sept. 30($ millions)

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Reconciliation of Net Loss to Adj. EBITDA

Net loss (57)

Income taxes 16

Interest expense, net 308

Loss from extinguishment of debt 69

Depreciation and amortization expense 193

EBITDA 529

Adjustments to EBITDA

Acquisitions EBITDA (1) 27

Integration costs (2) 40

Non-cash charges (3) 26

Unusual items:

Gain on divestiture of business (7)

Business realignments (4) 10

Other (5) 11

Total unusual items 14

In process Synergies (6) 70

Adjusted EBITDA (7) 706

Fixed Charges (8) 306

Ratio of Adj. EBITDA to Fixed Charges 2.31

$

Fixed Charge Covenant Calculations

Sept. 30, 2007LTM Period

$

-

22

Fixed Charge Covenant Calculations cont.

Footnotes

1) Represents the incremental EBITDA impact for the Orica Acquisition and the Arkema acquisition as if they had taken place at the beginning of the period.

2) Represents redundancy and incremental administrative costs from integration programs. Also includes costs related to implement asingle, company-wide management information and accounting system.

3) Includes non-cash charges for fixed asset impairments, stock based compensation, and unrealized foreign exchange and derivative activity.

4) Represents plant rationalization, headcount reduction and other costs associated with business realignments.

5) Includes the impact of the announced divestiture of the European solvent coating resins business as if it had taken place at thebeginning of the period, costs to settle a lawsuit, one-time benefit plan costs and management fees.

6) Represents estimated net unrealized synergy savings from the Hexion Formation.

7) The Company is required to have an Adjusted EBITDA to Fixed Charges ratio of greater than 2.0 to 1.0 to incur additional indebtedness under its indenture for the Second Priority Senior Secured Notes. As of September 30, 2007, the Company was able to satisfy thiscovenant and incur additional indebtedness under this indenture.

8) LTM Period fixed charges reflect pro forma interest expense as if the Orica acquisition, the Arkema acquisition, and the amendments of our senior secured credit facilities, which occurred in November 2006 and June 2007, had taken place at the beginning of the period.

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Debt at September 30, 2007

6256259.75% Second-priority senior secured notes due 2014

200200Floating rate second-priority senior secured notes due 2014

3,722

125

11

34

78

247

115

2,287

0

9/30/2007

3,392Total debt

64Other

11Capital Leases

34Industrial Revenue Bonds due 2009

Other Borrowings:

78Sinking fund debentures: 8.375% due 2016

2477.875% debentures 2023

1159.2% debentures due 2021

Debentures:

1,995Floating rate term loans due 2013

Credit Agreements:

Senior Secured Notes:

23Revolving Credit Facilities

12/31/2006

($ in millions)

$ $

$ $

Hexion Q307lEarningsCall

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