Total operating revenues amounted to $382.2 million and $994.4 million for the three and nine months ended September 30, 2008, respectively. In the comparable three and nine month periods in 2007, total operating revenues amounted to $290.2 million and $831.9 million, respectively.

Net income amounted to $34.6 million and $35.4 million for the three and nine months ended September 30, 2008, respectively, compared to a net loss of $(0.8) million and $(7.7) million for the three and nine months ended September 30, 2007, respectively.

Last Twelve Months (LTM) Bank EBITDA, a measurement used to determine compliance with our debt covenants, totaled $146.0 million for the LTM ended September 30, 2008. Kraton was in compliance with its debt covenants at September 30, 2008. A reconciliation of net income (loss) to LTM Bank EBITDA is attached.

Through the third quarter and into October 2008, Kraton was on allocation from its suppliers of butadiene, and as a result, was unable to produce all products necessary to meet customer demand, and in turn, had to allocate certain available product supplies to customers. As a result, sales volume in the third quarter of 2008 was 6% less than in the third quarter of 2007 and on a year-to-date basis was 5% less than in the first nine months of 2007. In addition, feedstock and energy costs continued to increase in the third quarter of 2008, and into the fourth quarter, largely due to supply and demand fundamentals.

"We set out in 2008 to restore Kraton to profitability. While we are generally pleased with our progress through three quarters, especially considering the unprecedented cost increases we absorbed from feedstock and energy inputs, we still have sustainable improvements to make to fulfill our objectives," said Kevin M. Fogarty, Kraton's President and Chief Executive Officer. "Our third quarter results do reflect both improved global pricing and the full impact of targeted cost reduction programs that we have implemented. More recently, the decline in global crude oil prices, and the resulting impact on feedstock and energy costs, as well as improved availability of butadiene in particular, should help alleviate the margin pressure we have been managing all year."

Recent Developments

• Gulf Coast butadiene supply has improved significantly as producers have returned to normal operations, while several large butadiene consumers have remained idled from hurricane damage. We believe these butadiene consumers will likely return to normal operation during the fourth quarter. Additionally, the global financial market crisis has coincided with a rapid decline in crude oil prices during October. For example, in November the price of butadiene in North America declined 20% after 12 consecutive months of price increases. As a result, we are currently able to acquire all the butadiene we need, and have therefore discontinued our allocation of selected Styrene-butadiene-styrene block copolymers. We cannot predict the extent, duration or ultimate market effect of these changes in energy and raw material costs, availability, or individual supply/demand constraints.
• Announced latest innovation product, MD6705, which allows fabricators to make bicomponent elastic nonwovens on commercial production equipment resulting in excellent elastic recovery at lower cost.
• On October 15, 2008, entered into a $320.0 million notional amount interest rate swap agreement.
• Launched a global initiative aimed at further reducing Kraton's annual fixed cost spend by at least $10 million beginning in 2009. Though not final in scope, the initiative is expected to include purchasing savings, staffing reductions, and curtailing other expenditures. The initiative also includes a full review of planned capital expenditures in 2009, with the expectation that any growth-oriented discretionary spending would be postponed.

"Our operating philosophy at Kraton at its core is reality-based. Therefore, given the uncertainty that has emerged regarding global economic growth, we are developing a series of global actions to achieve cost and productivity improvement, as well as liquidity conservation, that will prepare Kraton to compete in a down economy if necessary," added Fogarty. "In doing so, we expect to continue to manage Kraton effectively, in providing our customers with industry-leading innovation and superior service, and position our industry-leading company to emerge from any such downturn more competitive than ever."

Kraton has scheduled a conference call for Wednesday, November 12, 2008 to discuss these earnings. The call will begin at 4:00 p.m. Central time, 5:00 p.m. Eastern time. To listen to the conference call and view the slide presentation, which will be broadcast live over the Internet, go to Kraton's website at www.kraton.com, click on Investor Relations, and then go to Presentations and select "Third Quarter 2008 Earnings Presentation Webcast." You may also listen to the analyst conference call by telephone by contacting the conference call operator 5-10 minutes prior to the scheduled start time and asking for the "Kraton Conference Call - Passcode: Earnings Call." US/Canada Dial-In #: (888) 577-8992 or International Dial-In #: (312) 470-7060. For those unable to listen to the live call, a replay will be available 24 hours a day beginning at approximately 6:00 p.m. Central time November 12^th through 11:59 p.m. Central time on November 26^th. To hear a telephonic replay of the call, dial (888) 277-9385 or (402) 998-0509 for international callers. To hear a replay of the call over the Internet, please access Kraton's website at www.kraton.com.

About Kraton

Kraton is a leading global producer of engineered polymers and, we believe, the world's largest producer of styrenic block copolymers (SBCs), a family of products whose chemistry was pioneered by us over forty years ago. SBCs are highly-engineered thermoplastic elastomers, which enhance the performance of numerous products by delivering a variety of attributes, including greater flexibility, resilience, strength, durability, and processability. Kraton polymers are used in a wide range of applications including adhesives, coatings, consumer and personal care products, sealants, lubricants, medical, packaging, automotive, paving, roofing, and footwear products. Kraton has the leading position in nearly all of its core markets and is the only producer of SBCs with global manufacturing capability. Its production facilities are located in the United States, Germany, France, The Netherlands, Brazil, and Japan.

Kraton, the Kraton logo and design, and "Giving Innovators their Edge" tagline are trademarks of Kraton Polymers LLC.

Forward-Looking Statements

This press release includes "forward-looking statements" as that term is defined in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical fact are statements that could be deemed forward-looking statements and are often characterized by the use of words such as "believes," "expects," "estimates," "projects," "may," "will," "intends," "plans" or "anticipates," or by discussions of strategy, plans or intentions. In this press release, forward-looking information relates to covenant compliance, pricing trends, cost savings, production rates and other similar matters. All forward-looking statements in this press release are made based on management's current expectations and estimates, which involve risks, uncertainties and other factors that could cause results to differ materially from those expressed in forward-looking statements. Such risks include, but are not limited to, competitive pressures in the specialty chemical industry, changes in prices or availability of raw materials used in our business, changes in levels of consumer spending or preferences, overall economic conditions, the level of our indebtedness and exposure to interest rate and currency fluctuations, governmental regulations and trade restrictions, acts of war or terrorism in the United States or worldwide, political or financial instability in countries where our goods are manufactured and sold, and other risks and uncertainties described in this report and the Kraton's other reports and documents. Readers are cautioned not to place undue reliance on forward-looking statements. We assume no obligation to update such information.

KRAT-F

KRATON POLYMERS LLC CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In thousands) Three Months Ended September 30, 2008 and 2007
	September 30, 2008				September 30, 2007
Operating Revenues
Sales	$	363,275			$	284,498
Other		18,892				5,652
Total operating revenues		382,167				290,150
Costs of goods sold		287,719				243,699
Gross profit		94,448				46,451
Operating Expenses
Research and development		5,808				5,452
Selling, general, and administrative		28,214				15,594
Depreciation and amortization of identifiable intangibles		13,118				12,539
Total operating expenses		47,140				33,585
Equity in earnings of unconsolidated joint venture		(94	)			(189	)
Interest expense, net		7,875				12,375
Income before income taxes		39,527				680
Income tax provision		(4,910	)			(1,434	)
Net income (loss)	$	34,617			$	(754	)

KRATON POLYMERS LLC CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In thousands) Nine Months Ended September 30, 2008 and 2007
	September 30, 2008				September 30, 2007
Operating Revenues
Sales	$	947,925			$	812,326
Other		46,472				19,546
Total operating revenues		994,397				831,872
Costs of goods sold		788,618				701,660
Gross profit		205,779				130,212
Operating Expenses
Research and development		21,129				18,504
Selling, general, and administrative		73,578				49,208
Depreciation and amortization of identifiable intangibles		40,880				36,417
Total operating expenses		135,587				104,129
Equity in earnings of unconsolidated joint venture		(314	)			(514	)
Interest expense, net		27,678				32,507
Income before income taxes		42,828				(5,910	)
Income tax provision		(7,405	)			(1,822	)
Net income (loss)	$	35,423			$	(7,732	)

KRATON POLYMERS LLC CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands)
		September 30, 2008			December 31, 2007
ASSETS
Current assets
Cash and cash equivalents		$	84,239		$	48,277
Receivables, net of allowances of $1,737 and $1,542			183,922			140,321
Inventories of products, net			285,974			256,323
Inventories of materials and supplies, net			11,888			12,170
Other current assets			10,251			12,404
Total current assets			576,274			469,495
Property, plant and equipment, less accumulated depreciation of $176,578 and $157,643			379,393			402,270
Identifiable intangible assets, less accumulated amortization of $34,428 and $29,205			71,133			76,356
Investment in unconsolidated joint venture			10,896			10,326
Deferred financing costs			8,675			10,323
Other long-term assets			17,803			16,124
Total assets		$	1,064,174		$	984,894
LIABILITIES AND MEMBER'S EQUITY
Current liabilities
Current portion of long-term debt		$	3,445		$	3,445
Accounts payable-trade			107,665			102,952
Other payables and accruals			58,740			55,816
Due to related party			21,046			24,505
Deferred income taxes			9,015			9,827
Insurance note payable			-			494
Total current liabilities			199,911			197,039
Long-term debt, net of current portion			572,462			535,020
Deferred income taxes			38,696			39,443
Long-term liabilities			25,996			30,682
Total liabilities			837,065			802,184
Commitments and contingencies
Member's equity
Common equity			189,350			143,149
Accumulated other comprehensive income			37,759			39,561
Total member's equity			227,109			182,710
Total liabilities and member's equity		$	1,064,174		$	984,894

KRATON POLYMERS LLC LTM Bank EBITDA (In thousands)
	3 Mos Ended 09/30/08			12 Mos Ended 09/30/08				3 Mos Ended 06/30/08			12 Mos Ended 06/30/08

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