p12-1566exh

Immediate Maximization of Value at TPC Group Inc.:
Analysis of the Transaction and Value of TPCG by
Sandell Asset Management Corp.

September 2012

SAMC Analysis of TPC Group Inc.

DISCLAIMER

THIS PRESENTATION WITH RESPECT TO TPC GROUP INC (“TPCG”, “TPCG GROUP” OR THE “COMPANY”) IS FOR GENERAL INFORMATIONAL PURPOSES
ONLY. IT DOES NOT HAVE REGARD TO THE SPECIFIC INVESTMENT OBJECTIVE, FINANCIAL SITUATION, SUITABILITY OR PARTICULAR NEED OF ANY
SPECIFIC PERSON WHO MAY RECEIVE THIS PRESENTATION, AND SHOULD NOT BE TAKEN AS ADVICE ON THE MERITS OF ANY INVESTMENT DECISION.
THE VIEWS EXPRESSED HEREIN REPRESENT THE OPINIONS OF SANDELL ASSET MANAGEMENT CORP. (“SAMC”), AND ARE BASED ON PUBLICLY
AVAILABLE INFORMATION AND SAMC ANALYSES. CERTAIN FINANCIAL INFORMATION AND DATA USED HEREIN HAVE BEEN DERIVED OR OBTAINED FROM
FILINGS MADE WITH THE SEC BY THE COMPANY, AFFILIATES OR ENTITIES WITHIN THE GROUP OR OTHER COMPANIES CONSIDERED COMPARABLE, AND
FROM OTHER THIRD PARTY REPORTS.

SAMC HAS NOT SOUGHT OR OBTAINED CONSENT FROM ANY THIRD PARTY TO USE ANY STATEMENTS OR INFORMATION INDICATED HEREIN AS HAVING
BEEN OBTAINED OR DERIVED FROM A THIRD PARTY. ANY SUCH STATEMENTS OR INFORMATION SHOULD NOT BE VIEWED AS INDICATING THE SUPPORT
OF SUCH THIRD PARTY FOR THE VIEWS EXPRESSED HEREIN. NO REPRESENTATION OR WARRANTY IS MADE THAT DATA OR INFORMATION, WHETHER
DERIVED OR OBTAINED FROM FILINGS MADE WITH THE SEC OR FROM ANY THIRD PARTY, ARE ACCURATE.

SAMC SHALL NOT BE RESPONSIBLE OR HAVE ANY LIABILITY FOR ANY MISINFORMATION CONTAINED IN ANY SEC FILING OR THIRD PARTY REPORT. THERE
IS NO ASSURANCE OR GUARANTEE WITH RESPECT TO THE PRICES AT WHICH ANY SECURITIES OF THE ISSUER WILL TRADE, AND SUCH SECURITIES MAY
NOT TRADE AT PRICES THAT MAY BE IMPLIED HEREIN. THE ESTIMATES, PROJECTIONS, PRO FORMA INFORMATION AND POTENTIAL IMPACT OF SAMC’S
ACTION PLAN SET FORTH HEREIN ARE BASED ON ASSUMPTIONS THAT SAMC BELIEVES TO BE REASONABLE, BUT THERE CAN BE NO ASSURANCE OR
GUARANTEE THAT ACTUAL RESULTS OR PERFORMANCE OF THE COMPANY WILL NOT DIFFER, AND SUCH DIFFERENCES MAY BE MATERIAL. THIS
PRESENTATION DOES NOT RECOMMEND THE PURCHASE OR SALE OF ANY SECURITY. SAMC RESERVES THE RIGHT TO CHANGE ANY OF ITS OPINIONS
EXPRESSED HEREIN AT ANY TIME AS IT DEEMS APPROPRIATE. SAMC DISCLAIMS ANY OBLIGATION TO UPDATE THE INFORMATION CONTAINED HEREIN.

UNDER NO CIRCUMSTANCES IS THIS PRESENTATION TO BE USED OR CONSIDERED AS AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY
SECURITY. PRIVATE INVESTMENT FUNDS ADVISED BY SAMC CURRENTLY HOLD SHARES OF COMMON STOCK REPRESENTING AGGREGATE OWNERSHIP
OF APPROXIMATELY 7% OF THE OUTSTANDING COMMON STOCK OF THE COMPANY. SAMC MANAGES INVESTMENT FUNDS THAT ARE IN THE BUSINESS
OF TRADING - BUYING AND SELLING - PUBLIC SECURITIES. IT IS POSSIBLE THAT THERE WILL BE DEVELOPMENTS IN THE FUTURE THAT CAUSE SAMC
AND/OR ONE OR MORE OF THE INVESTMENT FUNDS IT MANAGES, FROM TIME TO TIME (IN OPEN MARKET OR PRIVATELY NEGOTIATED TRANSACTIONS OR
OTHERWISE), TO SELL ALL OR A PORTION OF THEIR SHARES (INCLUDING VIA SHORT SALES), BUY ADDITIONAL SHARES OR TRADE IN OPTIONS, PUTS,
CALLS OR OTHER DERIVATIVE INSTRUMENTS RELATING TO SUCH SHARES. SAMC AND SUCH INVESTMENT FUNDS ALSO RESERVE THE RIGHT TO TAKE
ANY ACTIONS WITH RESPECT TO THEIR INVESTMENTS IN THE COMPANY AS THEY MAY DEEM APPROPRIATE, INCLUDING, BUT NOT LIMITED TO,
COMMUNICATING WITH MANAGEMENT OF THE COMPANY, THE BOARD OF DIRECTORS OF THE COMPANY AND OTHER INVESTORS AND THIRD PARTIES,
AND CONDUCTING A PROXY SOLICITATION WITH RESPECT TO THE ELECTION OF PERSONS TO THE BOARD OF DIRECTORS OF THE COMPANY.

SAMC Analysis of TPC Group Inc.

Executive Summary - Maximizing Shareholder Value

u Sandell Asset Management Corp. (SAMC) owns 7.0% of the outstanding shares of TPC Group (TPCG). SAMC has been a long
term shareholder of the Company, leading its restructuring and exit from bankruptcy in 2004.

u We believe TPCG’s recent agreement to sell itself to private equity firms First Reserve & SK Capital (PE Buyers) at a price of
$40/share cash is a sweetheart transaction for the PE Buyers and Management allowing them to steal the Company on the
cheap from shareholders without a full and proper auction.

u Through conversations with industry experts, we believe that several strategic and financial parties were shut out of the process
and/or subjected to unreasonable demands and unreasonable timelines. This behavior will not stand.

u We also believe that Management has been intentionally bearish, reducing guidance and withholding information regarding the
service fee negotiations and the potentially MLP-qualifying de-hydro projects, over the past several months to ensure the
completion of a deal at a low price, thereby benefiting themselves the most through a go-private transaction.

u As further evidence of the ‘self-dealing’ nature of this transaction, Management 1) did not negotiate a go-shop period to solicit
competing offers, 2) did not hold a conference call with its shareholders as is customary at which they would have heard their feedback,
3) did not file voting agreements with the SEC detailing the nature of the lockups and 4) did not disclose Management compensation
agreements that are part of the transaction which, we believe, would show the significant upside that Management has negotiated for
themselves to the detriment of current shareholders as part of this deal.

u There is ample evidence that the deal price is not the maximum price that shareholders deserve given the stability of TPCG’s
underlying business, the upcoming growth catalysts and its solid balance sheet. The PE Buyers are also clearly not adequately
compensating shareholders for a control premium.

l On a going concern basis, we believe TPCG should be valued at $53-$62/share (33%-55% above the deal price).

l Including a control premium, we believe TPCG should be valued at $62-$71/share (55%-78% above the deal price).

Sandell intends to vote against the deal, encourages fellow shareholders to do the same
and seeks to have the Company run a proper auction to maximize shareholder values.

SAMC Analysis of TPC Group Inc.

Maximizing Shareholder Value - Shareholders are not receiving a Control Premium

u TPCG traded to $47/share in March of this year reflecting tight butadiene markets, strong Performance Products segment operations
and Company guidance of $150m in EBITDA. Shareholders deserve a control premium over TPCG’s 52 week high.

u Based on 2013 consensus estimates we believe TPCG is valued at $53-$62/share or 33%-55% above the deal price on a trading
basis. It is estimated that these figures include only 0.5c/lb in increases for service fees in 2013 and do not include any upside from
the 2 de-hydro projects, the first of which starts generating cash flow in 2014. We believe that each of these de-hydros could
conservatively be worth $200m+.

u On a takeout basis, we believe fair value would be $62-$71/share or 55% to 78% above the deal price to compensate shareholders
for a control premium as well as service fee, de-hydro and potential MLP structure upsides.

u Lastly, we believe, Management has intentionally done a poor job in communicating the value inherent in TPCG, downplaying its
growth prospects and withholding information regarding the de-hydros such as their return profile and the MLP qualifying nature of their
cash flows.

SAMC Analysis of TPC Group Inc.

u The PE Buyers have valued TPCG at 5.3x and 10.4x 2013 consensus EBITDA and EPS estimates, respectively. These valuation
multiples show that the agreed deal values the control of TPCG as equal to the trading values of comparable commodity-
exposed chemical companies (see comps below).

u Having been shareholders for the long term, we know better:

l TPCG is not directly exposed to commodity prices in most of its businesses. A recent Management presentation noted that
81% of 2011 gross profit is protected by either service fees or cost pass-through fixed fee contracts. TPCG's stable cash flow
generation is also demonstrated by the ~5x Debt / LTM EBITDA in expected leverage as part of the agreed LBO.

l Maintenance capex has been disclosed at $15m per year. Considering management’s assertion that there is a clear path to
$150m in stable EBITDA, the stable free cash flow yield on deal enterprise value is a significant 15%+ not including any
upside from service fee negotiations, additional de-hydros or control premium.

l TPCG’s butadiene business is structurally tight as crude C4 production has declined with the dominance of cheap ethane
cracking in the US. This shortage in feedstock supply should accrue to TPCG’s benefit as the largest independent processor of
crude C4s.

l TPCG’s isobutylene segment is not a commodity business and is supported by significant intellectual capital as its HR-PIB
business produces a highly valued, specialty chemical for its customers.

Maximizing Shareholder Value - Deal price inadequate

SAMC Analysis of TPC Group Inc.

u Despite wide fluctuations in published quarterly EBITDA, TPCG’s underlying earnings (adjusted for quarter to quarter inventory
effects) have been steady over the last 8 quarters, reflecting the fee-based nature of its business, and have had limited impact
from commodity price swings. These historical figures show a stable business that can grow with limited risk through additional service
fee increases as well as the development of the de-hydro projects, which we believe produces MLP qualifying income.

u With annual maintenance capex at $15m, or 10%-15% of EBITDA on a quarterly basis, TPCG generates significant cash that has been
accumulating on its balance sheet and, we believe, could support a 25c to 50c quarterly dividend per share.

Maximizing Shareholder Value - Earnings are stable with low maintenance capex

(1) Adj EBITDA incorporates Company provided data on the quarterly impact of changes in the price of butadiene between the time crude C4 is purchased and the
finished butadiene is sold. These impacts affect published EBITDA but are reversed in working capital, smoothing out Adj EBITDA to reflect the underlying margin
stability that is completely independent of the absolute level of butadiene.

SAMC Analysis of TPC Group Inc.

Maximizing Shareholder Value - Summary valuation methods

u Based on widely used valuation metrics, the current agreed transaction for TPCG at $40/share does not adequately consider TPCG’s
unique strategic position, fee-based nature of its cash flows, potential growth and a control premium for shareholders. As shown in the
LBO matrix below, at a $40/share price, using forecasts similar to the most conservative published sell-side models, this deal yields
unacceptably high IRRs for the PE Buyers and Management to the detriment of current shareholders.

u On a stand-alone basis we feel that TPCG’s business is stable, with strong cash flow and growth prospects. Furthermore, TPCG has a
solid balance sheet with net leverage near 1x EBITDA and coverage near 4x (with maintenance capex) giving it ample flexibility.

SAMC Analysis of TPC Group Inc.

Maximizing Shareholder Value - Near and long term catalysts not valued

u TPCG had several catalysts to drive near and long
term EPS growth:

l Detail on the investment/return characteristics for
the 1st de-hydro unit expected 3Q12;

l Service fee contract re-negotiation expected in
4Q12/1Q13;

l Normalized feedstock volumes throughout 2013
and;

l Investment/return characteristics for the 2nd de-
hydro unit expected in 2013/2014.

u Given these catalysts, TPCG’s current EPS could double
to $5+/share in the near term and triple to $7+/share in
the long term.

l In October 2011, TPCG management asserted that
future EBITDA could rise to approximately $300m
to $450m, or $8 to $14 in EPS (4)

u PE Buyers, in collusion with the Board and
Management, had access to much greater detail with
respect to these projects - information that had been
promised but not yet disclosed to shareholders.

u Lastly, we have high conviction that the de-hydros
will produce MLP qualifying income, significantly re-
rating their value.

Yielding a potential future value of $200/share

SAMC Analysis of TPC Group Inc.

Overview

u TPCG Overview:

l Largest merchant producer of butadiene (BD), sourcing crude C4 from ethylene crackers in Gulf Coast

Ø Irreplaceable asset consisting of pipelines from suppliers of crude C4 and pipelines to customers of BD

Ø TPCG charges fee to refine crude C4 into BD as well as service fees to both suppliers and customers

Ø BD is required for the manufacture of tire rubber among other uses; BD supply/demand dynamic tight

l TPCG’s other businesses revolve around the butylenes chain yielding butene-1, raffinates, PIB and DIB

Ø These business are also primarily fee-based with captive customers

Ø The company has valuable intellectually property in the manufacture of highly reactive PIB (HR-PIB)

Ø In total, over 80% of gross profit is service fees or cost pass-through fixed fee contracts

l Capital improvement projects to re-start idled dehydros could provide significant upside in EBITDA and EPS

Ø Impact of dehydro start-ups will not be realized until 2014/2015

Ø Based on counsel, there is a high likelihood that both de-hydros will generate MLP qualifying income

Ø 1st dehydro will convert isobutane into isobutylene, replacing a higher cost source

u Currently Lyondell (LYB) provides isobutylene to TPCG, contract expiring in 2013

u This expansion will cover supply previously supplied by LYB which produced DIB & PIB (and HR-PIB)

u Additional feedstock will be used to increase capacity to produce MTBE/ETBE

u EPS upside of $0.78 to $1.25 per share based on estimates (+20% to +33% to 2013 consensus EPS)

Ø 2nd dehydro will convert butane into BD, increasing TPCG’s overall production of BD

u This de-hydro will increase overall capacity of TPCG to produce BD

u As ethane cracking has increased in the US and consequently crude C4 production has decreased, this direct
approach of refining butane to butadiene will add much needed capacity to relieve the structural tightness in BD

u EPS upside of $1.88 to $3.00 per share based on estimates (+49% to +78% to 2013 consensus EPS)

SAMC Analysis of TPC Group Inc.

Overview - Company slides: Butadiene

SAMC Analysis of TPC Group Inc.

Overview - Company slides: Performance Products

SAMC Analysis of TPC Group Inc.

Overview: Company slides: Contracts