FBRCapitalMarkets&Co.

2012Energy&IndustrialsConference
M
May7,2012

SafeHarbor
Theinformationinthispresentation,includingoralcomments,includesforwardlooking
statements withinthemeaningofthePrivateSecuritiesLitigationReformActof1995,andis
statementswithinthemeaningofthePrivateSecuritiesLitigationReformActof1995,andis
subjecttothesafeharborcreatedbythatAct.Becausesuchforwardlookingstatementsinvolve
risksanduncertainties,thereareimportantfactorsthatcouldcauseactualresultstodiffer
materiallyfromthoseexpressedorimpliedbysuchforwardlookingstatements.Thesefactors
include,butarenotlimitedto,theimpactofglobaleventsonthecommercialaerospaceindustry,
ultimatetitaniumcontentpercopyandactualaircraftbuildratesfornewcommercialandmilitary
aircraftprograms,globaleconomicconditions,thecompetitivenatureofthemarketsfor
specialtymetals,availabilityandpricingofrawmaterials,thesuccessfulcompletionofourcapital
i lt t l il bilit d i i f
t i l th
f l
l ti f it l
expansionprojects,andotherrisksanduncertaintiesincludedintheCompanysfilingswiththe
SecuritiesandExchangeCommission.Actualresultscandiffermateriallyfromthoseforecasted
o e pected dd t o a
orexpected.Additionalinformationconcerningsuchfactorsiscontainedfromtimetotimeinthe
o at o co ce
g suc acto s s co ta ed o t e to t e t e
CompanysSecuritiesandExchangeCommissionfilings,copiesofwhichcanbeobtainedfromthe
CompanyortheSEC.

RTIInternationalMetals InvestmentHighlights
Growinganddiverse
titaniummarket

Thetitaniumindustrycontinuestobedrivenbyunprecedented
aerospacedemand,whilemedical,industrialandconsumermarkets
provideadditionalgrowthopportunities.

Verticallyintegrated
businessmodel

RTIsuniqueengineering,fabrication,andprecisionmachining
capabilitiesalignwithgrowingcustomerpreferenceforbroader
andmoresophisticatedintegrated productsandservices
andmoresophisticatedintegrated,productsandservices

Strongandgrowing
OEMrelationships

RTIhasapproximately$3.5billionofLTAsthrough2020withAirbus,
Boeing,andLockheedMartin.TheseOEMsarelookingforone
stopshopplatformsfortheiradvancedtitaniumneeds
p
p p

Opportunistic
acquisitionstrategy

Conservative
financialphilosophy

Acquisitions,jointventures,andinvestmentswillenhanceRTIs
ROIonexistingandacquiredassets

Conservativecapitalstructureallowsforflexibilityand
opportunisticstrategicinvestment

Contents
Growing&DiverseMarkets
IntegratedBusinessModel
Strong&GrowingRelationships
Acquisitions&JointVentures
i ii
i
Financials

WorldwideTitaniumMillProductForecast
201116CAGR,6.9%
450
407

MillShip
pments(lbsinM
MMs)

400

380
344

350

307

300

270

250

25

200
150

106

30

31

Defense
(CAGR,3.6%)

122

121

CommercialAerospace
(CAGR,8.4%)

122

130

Industrial/
Consumer
(CAGR,4.6%)

China
(CAGR,8.9%)

94
81

61

98

428

29

28

26

30

417

104

115

126

127

128

100
50

84
4

96

108

2010

2011

2012P

119

128

137

147

2013P

2014P

2015P

2016P

Source:RTIestimates,ChineseTitaniumAssociation,May2012.

ComparisonofB787andB777MaterialsContent
B777

B787
7 7

Other
1%

Steel
10%

Other
5%

Aluminum
20%

Steel Composites
11%
11%
Titanium
7%

Composites
50%

Titanium
15%

Aluminum
70%

2009-2019 Growth
Material
Aluminum
Steel
Nickel
Titanium
Other Materials
Composites
Source: AeroStrategy

Source:BoeingCo.,D.A.Davidson.

Rates
3.9%
2.8%
2.6%
8.5%
4.6%
9.7%

LargeCommercialJetBacklog
Buyweights
Platformbacklog,March31,2012
200
180

8,961Total
160

8+yearsof
8

f
aircraft
production

P
Pounds(millions)

140

Estimated710millionlbsoftitaniuminbacklog
120

Growthplatforms(787,A350,A380)comprise360
millionlbsoftotalbacklog(~51%)

100
80
60
40
20
0

~ Buy-Weight (in lbs, 000)

787
230

737
50

A350 A320
220
35

777 A380 A330 A321 7478 A319 MS21 C919

155 245
50 35 80
30
30
30

Source:AerospaceMarketNews;RTIestimatesforairframe,fasteners,andengine,April2012.

CS
30

767
40

A318 A340
30
75

PlatformDiversity
OnlyTitaniumCompanywithSignificantAirframeLTAsinSupportofTopFourPlatforms
L kh dM ti JSF
LockheedMartinJSF

B i 8
Boeing787

TotalProgramEstimate:>2,500Aircraft

TotalForecastedDeliveries(2010 2030):3,568

AirbusA350XWB

AirbusA380

TotalForecastedDeliveries(2010 2030):3,025

TotalForecastedDeliveries(2010 2030):712

Source:AirlineMonitor,July2011;DepartmentofDefense

USMedicalDevices
Contractmanufacturingmarketfortherapeutics,201116

Total

CAGR
7 7%
7.7%

Other

7.4%

Urology

8.4%

Transfusion
&IVKits

6.6%

Spinal

8.8%

MIS

8.3%

Surgical

6.7%

Cardio
Vascular

8 %
8.4%

Orthopedics

7.8%

$22
$20
$18
$16

Va
alue ($B)

$14
$12
$10
$8
$6
$4
$2

AverageOEMcontractmanufacturingspendat
g
g p
30%ofCOGSin2011,growingto33%ofCOGS
in2016
,
y
g y
Thecardiovascular,minimallyinvasivesurgery
(MIS),andspinalsegmentsareexpectedto
drivesignificantgrowth

Newcardiovascularproductlaunches
ExpandedtreatmentapplicationsforMIS
Increasedvolumeandhigheraveragepricefor
spinaldevices

$0
2011

2016
Source:DeloitteConsulting,January2012.

Contents
Growing&DiverseMarkets
IntegratedBusinessModel
Strong&GrowingRelationships
Acquisitions&JointVentures
i ii
i
Financials

TitaniumProductionandCompetition

TitaniumproductionfortheAerospaceindustryisdominatedbyfourmills
(lbs in millions)
Producer
VSMPO
ATI
TIMET
RTI

2011E
Capacity
70,000
71,650
98,000
20,000

2011E
Shipments
56,000
45,500
35,500
14,700

Millcapabilitiesvarybutfocusonrawmaterialandbasicmanufacturing
OEMslookingforsupplierstodomorefabricationeitherdirectlyorbymanaging
subcontractors
RTIdeliversintegratedproductionallowingforgreaterpartneringbetweenRTIand
customers
Raw Materials
Sponge

Tier 4
Ingot / Mill Products
g g , Castings
g
Forgings,
Extrusions

Tier 3
Fabrication (Built-to-Print)
Cutting,
g, Forming,
g, Welding
g
Machining

RTI
VSMPO
ATI
TIMET
Sumitomo
Toho
UKTMP

11

Tier 2
Assembled Detail Parts
Engineering,
g
g, Kitting
g
Program Management

RTIsTransformationTowards
Valueaddedsupplier

2000

2012P

Distribution
Group21%

Fabrication
Group22%

Distribution
Group33%

TitaniumGroup
57%

TitaniumGroup
27%

F b i ti
Fabrication
Group40%

Revenues:$249.4million
Primarilymillproductmanufacturing

Revenues:>$700million
Millproductsandvalueaddedcomponentpart
manufacturing

Dependentonshortertermcontracts

$3.5+billioninLTAs

10 manufacturingsites

15manufacturinganddistributionsites

1998 Acquiredspecialtyalloys
manufacturer
1998 Acquiredafabrication
servicesprovider

2000 Acquired
2000
remaining60%ofFrench
distributor
2004 AcquiredMontrealbased
machiningfacility

12

2011 AcquiredAeromet Forming

2012 AcquiredRemmele
Engineering

VerticallyIntegratedSupplyChainB787SeatTrack
PrecisionMachining

V
ValueAdded

Extrusion

Montreal,Canada
SelectOutsideServices
RoughMachine
Weld
ld
HeatTreat

Houston,USA

NY,KYandPA

MillProduct
Billetfrommillorotherproducers
viaTMX
Seattle,WAorMill

ProductLifecycle
13

Contents
Growing&DiverseMarkets
IntegratedBusinessModel
Strong&GrowingRelationships
Acquisitions&JointVentures
i ii
i
Financials

SelectLongTermAgreements
Customer

Platform

Expiration

$MM

Commercial /
Defense

2020

~ $ 1,300

JSF

2020

~ $

Comments

Mill Products

900

Minimum market share of 30% (up to 35% ) of all

titanium mill product requirements
Multi-decade supply relationship
Supply first 8 million lbs of mill product annually
Only existing titanium contract for program
pp y relationship
p
Multi-decade supply

Geared Turbofan
Engine

2022

~ $

787

2021

~ $ 1,100

50

6246 billet to support various single-aisle

engines, including the A320neo

Fabrication

A320 / A350

Commercial /
Defense

2015 / 2020 ~ $

2013

~ $

150

85

S
Supply
l seatt tracks
t k th
through
h Fabrication
F b i ti and
d
Distribution groups
Expected to generate in excess of $100 million
of revenue per year during full-rate production

Five-year
y
work p
package
g for A320 flap
p tracks
A350 seat track extrusions through 2020

Bell: renewal of existing contracts

program
g
Bombardier: full life of p

~ $ 3,585

15

Aerospace&DefenseSupplyChain
Value Added
MillProduct
Conversion
Forgings
Extrusions
Castings

Machining&
DetailPart
Manufacturing

Assembly
Assembly,
MajorDetail
PartMfg.&
MinorSystems
Integration

Major
Assembly,
Design&Major
SystemsIntegration

Final System
Integration

Tier 4:

Tier 3:

Tier 2:

Tier 1:

OEM:

RTI

RTI

RTI

RTI

ATI
Timet
VSMPO
BAOTI
PCC
Howmet/Alcoa
Firth Rixson
Plymouth Tube

Synchronous Aerospace
PRV Aerospace
Dasco Engineering
Remmele Engineering

Ducommun
LMI Aerospace
Barnes Aerospace
Magellan Aerospace
Hroux-Devek

FHI
KHI
MHI
Goodrich
Spirit AeroSystems
GKN Aerospace
Alenia
Triumph Group

Commodity
16

Airbus
Boeing
Lockheed
Bombardier
Bell Helicopter

TitaniumAerostructure Applications
Fuselage Chords
Floor Beams &
Seat Tracks

APU
Components

Crown Bulkhead Chord

Door & Door Frame
Fasteners
Ribs, Spars, Chords

Front Spar
p Body
y Chord
Thrust Reverser /
Wing Box Attachments
Pylons
Nacelle & Engine Mount
Note: The above artists rendering is generic in nature and is not intended to accurately represent any specific aircraft or precise locations of parts within.
The rendering is designed solely to provide an approximation of some parts which can be produced from titanium.

17

787Dreamliner Parts

18

SampleHotFormedandSPFParts
FingerSeals

DoorSurround

SideStruts
d

ErosionShields

19

SampleHotFormedandSPFParts(cont.)

BulkheadStrip

20

Contents
Growing&DiverseMarkets
IntegratedBusinessModel
Strong&GrowingRelationships
Acquisitions&JointVentures
i ii
i
Financials

FocusedAcquisitionStrategy

Driveverticalintegration

Expandproductandserviceofferings

RTI Advanced Forming

Seekrevenuesynergies

Remmele Engineering

Enhance technologicalcapabilities
Continued downstreampush
Capabilities

Assembly

Customers
Integrated
Component
Supplier
Model

NewRevenue
Opportunities

Hot forming

Airbus
Boeing

Kitting

LockheedMartin

Collaborative engineering

EngineOEMs

Precisionmachining
Tooldesign

Leverage
Combined
Customer
Base&
Qualifications

Valueadd
Capabilities

22

Energycustomers
Others

AdvancedFormingBenefits

RTIisnowtheonlyindependenthotandsuperplasticformingcompanywithfacilitiesinthe
U.S.andEurope.

Enablesverticalintegrationandenablesdevelopmentandmanufacturingpartnershipswith
customers

Addsapproximately$25millionofprofitablesales

Expandsourhotformingfabricationcapabilitiesbeyonddefenseandintothecommercial
sector

FortifiesRTIsengineeringcapabilitiestoenablecustomerpartneringinengineering,
assemblingdetailparts,kittingandprogrammanagement.
bli d il
ki i d

A320 Bulkhead Strips

Firewall Parts

23

Access Panels

Remmele EngineeringBenefits

Enhancesleadershippositionasanintegrated,valueaddedtitaniummanufacturerintheA&Dsegment

TransactionbuildsonRTIscorestrengthintitaniummanufacturingandisexpectedtoenhanceour
g
g
p
g p
engineeringandprecisionmachiningcapabilities

Combinationwilloffersuperiorsupportandcapabilities

MedicalengineeringprocessesandexpertisecanbeusedtoenhancewhatRTIdoescurrentlyonthe
aerospaceside

Fulfillsthedemandforcustomerslookingtoidentifystrategicpartnersinthesupplychain

Strongculturalalignment:Bothcompaniesshareacommitmenttoexcellentcustomerserviceandbest
inclassmanufacturing

Transactionaddsapproximately$125millionofprofitablesalesandisexpectedtobeimmediately
accretiveandwillleaveampleliquiditytopursuefurthergrowthopportunities

Ti Fan Case

Ti Air Flow Sensor

24

PositionedforGrowthThroughouttheCycle
Representative Customers and Platforms

787
C-17
737
747-8
F-15
F/A-18

A320
A330
A340
A350XWB
A380
A400

JSF
F/A-22

Howitzer
Bradley
Eurofighter
JSF

CRJ
Learjet
Challenger

Atlantis
Mad Dog
Deepwater
Horizon

S-76
S-92
Blackhawk
Seahawk
CH-53

Bigfoot
Jack /
St. Malo

Tier 1
Tier 2
Tier 4

Tier 3

Mill product
conversion, forging,
extrusions, and
castings

Machining and detail

part manufacturing

Assembly, major
detail part
manufacturing, and
minor systems
integration

Products and Capabilities

25

Major assembly,
design, and
major systems
integration

4 Series
V-22
Osprey
p y

Contents
Growing&DiverseMarkets
IntegratedBusinessModel
Strong&GrowingRelationships
Acquisitions&JointVentures
i ii
i
Financials

HistoricalSalesTrend
>

E
Erosion
i Shields
Shi ld

27

OrderBacklogHistory

28

MillProductShipments

Ti Fan Case

Ti Air Flow Sensor

29

SpongePercentagePriceChangeHistory
80%
70%

66.7%

60%
50%
40%
30%
20%

9.5%

10%

3.3%

1.3%

0%
10%
10%
20%

2007

2008

2009

2010
6.4%

16.9%

30%
Erosion Shields

30

2011

2012P

HistoricalEBITTrend
$160
$141.2
$140
$120
$100

$87 4
$87.4

$80
$60

$50.0

$40

$28.5
$14.1

$20
($5 5)
($5.5)

$0
($20)

2007

2008

2009

2010

Erosion Shields

31

2011

2012P

Conclusion

PositionedinFrontofaMajorInflectionPointinGlobalAerospace
RTIisthePurestPlayintheAerospaceSector
i h
l i h
Door Surround

FullyIntegrated,Downstream,AdvancedTitaniumStrategy
Over$3.5BillionofLTAsThrough2020
StrongBalanceSheet DesignedtobeOpportunistic

32