Economic

Performance Indicator and Description

Information

Partial/Full

Our market leading position, together with the importance of our portfolio to our customer base, our value pricing and our ability to shift production and manage costs have enabled us to generate improving profit margins across diverse macroeconomic environments. Despite rapidly changing raw material, energy and freight costs in recent years, as well as the difficult economic environment that affected the chemicals industry in late 2008 and into 2009, we have been successful at increasing our Adjusted EBITDA and margins, as illustrated in the chart below

Adjusted EBITDA represents net income before interest, taxes, depreciation, and amortization and then it is adjusted for various items as defined in our credit agreements. Under the terms of our credit agreements, we use Adjusted EBITDA to calculate our maximum leverage ratio and our minimum interest coverage ratio covenants. Adjusted EBITDA is not a GAAP concept, but we consider it an important supplemental measure of our performance. A reconciliation of net income (loss) to Adjusted EBITDA is calculated. 
* We became a stand alone company as of March 1, 2007.

Arizona Chemical offers employer sponsored retirement savings plans. In the U.S. this plan is known as a 401K plan. Arizona Chemical matches up to 8% of contributions (70% match for the first 4% and 50% on the second 4%). Employees are always vested in their own contributions to the plan but employer matching contributions and investment income on these dollars vests at 100% after 3 years of service. Additionally we contribute a discretionary amount to employee 401(k) savings accounts (known as a "Performance Award") each year that is based on a percentage of an employee's prior year's base earnings. 

Employees are automatically vested in the discretionary "Performance Award" allocation. In 2009, our U.S, participation rate was approximately 87%. See the table below for global funded status of our defined benefit and retirement plans (in thousands of US dollars) for the past 2 years.

During 2008- 2009, Arizona Chemical received a $100,000 grant from the U.S. Federal Government for employee training to support our Panama City, Florida facility. Arizona Chemical did not receive any other significant estimated aggregate financial value on an accruals basis from governments for the items listed in the GRI standard. No government is present in the shareholding structure.