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Business Performance and Outlook

For CPChem, sustainable growth means delivering value to our stakeholders. A key element of our business strategy is to grow earnings and returns while leveraging our business to seek sustainable solutions that benefit communities worldwide. In 2020, our earnings fell below 2019 driven by the global pandemic, a worldwide recession, oil price volatility and an active hurricane season on the U.S. Gulf Coast. These challenges created uncertainty throughout the value chain and resulted in lower sales and profitability.

In the toughest environment in many years, we worked to operate safely and reliably with a focus on reducing the impact of events beyond our control. As one result of this commitment, we regained a top spot among our industry peers in one of the measures we use to assess our competitive position, EBITDA/assets, climbing three positions since 2018.

We are prepared to accelerate our major projects safely and efficiently when the economy improves. We advanced our U.S. Gulf Coast II and Ras Laffan Petrochemical Project, as well as multiple mid-cap projects, and a select C8/C6 alpha olefins pilot plant at our Bartlesville Technical Center.

Our financial contributions to, and partnerships with initiatives that share our resolve to help create a circular economy for petrochemicals — namely plastics — highlight our dedication to advance a sustainable future.

Our sustainable growth vision is to proactively invest in profitable and sustainable solutions that support our communities at home and benefit society at large.

In 2020, CPChem navigated the COVID-19 pandemic and other challenging market conditions by operating safely and reliably. Our products provide benefits to the daily life of the consumer, and the pandemic has highlighted how integral our products are to modern living. We believe that the global demand for our products will sustainably grow as countries and societies move up the economic ladder.

Since our formation, CPChem has continued to develop and invest responsibly in strategic and value-add opportunities to meet the global growing demand. We are also investing in scalable, innovative solutions to ensure our products' long-term sustainability. CPChem investments enhance our ability to compete throughout the business cycle and ensure long-term success for our employees, customers, community and shareholders.

While the economic impact of the pandemic is substantial, our long-term view on demand for plastics and our other products remains positive. Demand for many of our products remained strong as manufacturers accelerated production of goods essential to worldwide pandemic response efforts. As global restrictions lessen, we expect forward momentum in our near-term growth, moderating to historical levels in the mid- and long-term.

The materials we produce will continue to be crucial in meeting the demands of an expanding global middle class for years to come. Plastics are a proven, safe, efficient and sustainable solution that lowers energy use and emissions, especially compared to alternatives.