INVESTMENT CASTING MARKET OVERVIEW NORTH AMERICA Scott Hanson President Auburn Investment Casting

1. INVESTMENT CASTINGMARKET OVERVIEWNORTH AMERICA Scott Hanson President Auburn Investment Casting

2. Investment Casting Trends • North American Investment Casting Industry • “Across the Board” increase in activity • Foundries & Suppliers are busy • Raw Material Cost/Availability • Energy Cost • Offshore Sourcing

3. Investment Casting Trends - cont’d • Segment summary • Aerospace – commercial – record level of new orders military – D.O.D. in transition • IGT – Significant spare part demand New Build Growth forecasted for Asia, Mid-East & Africa • Automotive - activity in complex applications & Turbocharger Systems • General Industry – growing with overall economy

4. Market Segments • Aerospace • Jet Engine • Blades & Vanes (Airfoils) • Integral Wheels & Nozzles • Hardware and Structures • Airframe • Hardware and Structures • Missile & Rocket Components • Other Military Ordnance

5. Market Segments • Industrial Gas Turbines • Blades & Vanes (Airfoils) • Hardware and Structures • Turbine and Combustor Components

6. Market Segments • Automotive • Valves • Turbocharger Components • Complex Powertrain Parts • Chassis Applications - Passenger Car and Motorcycle

7. Market Segments • General Industry • Medical Implants, Instruments & Testing Equipment • Industrial Valves / Pumps • Petrochemical • Food Processing • Off-Road Equipment • Firearms • Construction Equipment • Hand & Power Tools • Recreational & Sporting

8. North American IC Industry • United States, Canada & Mexico • Approx. 46% of worldwide investment casting production • 130 companies • 170 foundries (not including dental, art or jewelry) • 30,000+ direct workers • All market segments • All ‘castable’ alloys • All size capability

9. North American Investment Casting2005 Sales ($ Million - USD) Aerospace 1,600 IGT 800 Automotive 250 General Industry 550 TOTAL: $3,200

10. North American Investment Casting Market by Alloy Type Aluminum & Copper: 7% Titanium: 9% Steel: 33% Superalloy: 51% 2005 Casting Dollars $3.200M

11. Worldwide Investment Casting ($ Million - USD) 2005 North America 3,200 Europe 1,700 Asia 2,000 Other 100 TOTAL: 7,000

12. Aerospace - Commercial Large Transports • World traffic up 6% • Load factors & New Orders at Record Level • 2005-2009 build forecast avg. 970 / year • Asian Market Growing Rapidly • New Programs • A380 / 747-8 • A350 / 787 • China Regional New Aircraft Builds > 50 Passenger ROM Associates: 2- 06

13. Aerospace – Commercial cont’d Concerns / Issues: • Airline losses continue • High Fuel Prices • Several US Airlines in Chapter 11 • Airlines adopting the ‘Low Cost Business Model’

14. Aerospace – Commercial cont’d Business Jets • New orders up significantly • Delivery of new aircraft 30% higher • Corporate ownership/leasing & Fractional Shares • Increased demand for used aircraft • Airframe & Engine Manufacturers very busy Private Jets • New Market starting to develop • Low cost replacement for some General Aviation models

15. Aerospace - Military • Increase proposed for D.O.D Budget • Demand for engine spare parts for Fighter, Helicopter & Transport aircraft • Some Advanced Aircraft Programs being pushed out • Future Combat Systems - Smart Munitions - Lightweight Armament - Battle Field & Ship Board Applications

16. Industrial Gas Turbines • High Spare Parts Demand • Increase in Aero derivatives • Growing ‘After Market’ Business • Large Frame Growth in Asia, Mid-East & Africa • Limiting/Competing factors • Infrastructure for NG • Price / Availability of NG • Future Technology: • Wind Power • Coal Gasification New Land-based Turbine Builds – 50MW + 2-06 Consensus Industry Forecast

17. Automotive • New Investment Casting Applications • Design Activity in Commercial Trucks, Passenger Cars & High Performance Vehicles • Driven by new emission standards and fuel efficiency • Turbocharger Demand straining capacity • Titanium Alloy components growing

18. General Industry • Dispersed among many casting suppliers • Wide range of size & alloys • Applications across all industries • Many Niche opportunities • High volume applications susceptible to offshore sourcing • Overall, should continue to increase with growth in economy

19. North American Investment Casting2006 Estimated Sales ($ Million - USD) % Change Aerospace 1,725 8% IGT 850 6% Automotive 265 6% General Industry 570 3.5% TOTAL: 3,410 +6.5%

20. Opportunities for Consideration - Machined Parts - Finished / Ready to Assemble - Low Volume & Custom Parts - Military Munitions & Support Equipment - Military Spares - ‘After Market’ for Aerospace & IGT - Medical Instruments & Testing Equipment - Conversions from other processes - Combining Multiple Parts into Integral Casting - Higher Value Alloys - Larger Castings - International Customers - Die Casting Prototyping

21. 2006 Forecast Comparison % Change ICI + 6.5 GDP + 3.5 Ind. Production + 3.8 DeWolf - Commercial + 4% SFSA +10% BICTA + 8%

22. Summary • Overall North American IC growth will continue • All Market Sectors will benefit • Off-Shore Sourcing effect on N. American foundries? • Some concern with Raw Materials & Energy • Opportunities for New Casting Applications • Need to focus on market Niches & Supplying Value Added Features / Services

23. Acknowledgement • The Investment Casting Institute wishes to acknowledge the following companies for their contribution to this report. • - Alcoa Howmet • - Blayson Olefines, LTD. • - Doncasters Inc. • ESCO Turbine Group • - Hitchiner Mfg. Co. • ROM Associates