James M. Buch Vice President, Commercial Titanium Metals Corporation

ABSTRACT: Several market and technology forces are impacting the design and demand for civil and military engines. This presentation will cover how these forces are likely to influence the future of titanium in this sector.

Changing Engine Design & Impact on Titaniumon Titanium

James Buch2008 ITA C f2008 ITA ConferenceSeptember 22, 2008

DisclaimerCertain of the information presented herein relates toCertain of the information presented herein relates to

matters that are not historical facts but are forward-lookingprojections/statements that involve risks and uncertaintiesassociated with TIMET’s business that are described morefully in TIMET’s filings with the United States Securities &Exchange Commission Actual future results could differExchange Commission. Actual future results could differ

materially from these projections. You rely on theseprojections and other information in this presentation atp j p

your own risk, and TIMET assumes no duty to update anyof this information should expectations change.

Titanium Demand in Jet EnginesTitanium Demand in Jet Engines

2.50Metal Demand Index (Engines)

Titanium Demand in Jet Engines • Single aisles showing unprecedented growth with new engines

2.00

Aircraft Demand Index (Structures)

• Twin aisle engine titanium demand to grow 150% by

gexpected before 2020

History Forecast

1.00

1.50 demand to grow 150% by 2020 and 300% by 2030

• Higher engine titanium

0.50

• JSF leading the way in ilit i tit i

g gdemand on regional jets

0.002005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Source: Airline Monitor, TEAL Group, TIMET estimates w/ 1 year offsetSpares not Included

military engine titanium demand

Longer term titanium demand will be impacted Longer term titanium demand will be impacted by more than just aircraft demandby more than just aircraft demand

Driving Engine Design

ACARE 2020 Overall Objectives(Reference 2000) • Engine noise alters

flight patterns and• Reduce perceived noise by 10dB• Reduce NOx by 80%• Reduce CO2 by 50%

flight patterns and limits flight traffic

• Acceptable cost • Increasing focus on environmental impact and reduction of

ACARE 2020 ObjectivesEngine Contribution

and reduction of greenhouse gases

• Reduce noise by 6dB • Reduce NOx by 80%

Reduce CO2 by 20%

g• Impact of fuel cost on

airline profitability

*Advisory Counsel for Aerospace Research in Europe

• Reduce CO2 by 20%• Acceptable cost Where is titanium a factor?Where is titanium a factor?

Titanium In Modern EnginesTitanium In Modern EnginesIN GENERAL . . .

Where is titanium the best solution?best solution?

• Where propulsive efficiency is driving the need for lighter andneed for lighter and higher strength parts

Where is titanium

High titanium content

challenged?• Where thermal

efficiency is driving theHigh titanium contentIntermediate titanium contentLow titanium content

efficiency is driving the need for higher pressures leading to higher temperatureshigher temperatures

But there are many tradeoffsBut there are many tradeoffs

40%

Bypass Ratio

●Higher bypass ratio improves propulsive

30%

e W

eigh

t

propulsive efficiency

Dat

um E

ngin

e ●Weight is a key trade-off as bypass ratio

Nacelle

F SLP Turbine

20%

% o

f D increases

●Higher bypass

Fan System

Structure

10%

g ypratio drives higher titanium content

7 8 9 10 11 12 13 14

Bypass Ratio

. . . How far can increasing bypass take us?. . . How far can increasing bypass take us?

Increasing Bypass RatioIncreasing Bypass Ratio

Added weight of subsystems and decreasing aerodynamics causes CO2 emissions to

Noise

causes CO2 emissions to increase

CO2CO2Emissions Advanced engine design

required to attain shift in CO2 curve

Larger Fan DiameterSmaller Fan Diameter

Bypass Ratio Increases

Shift in engine & materials performance neededShift in engine & materials performance needed

Materials and Machining SolutionsMaterials and Machining SolutionsComposites Fan BladesComposites Fan Blades Hollow Titanium Fan BladesHollow Titanium Fan BladesComposites Fan BladesComposites Fan Blades Hollow Titanium Fan BladesHollow Titanium Fan Blades

http://www.cfd.sk/tps/img40.png

Conventional Disk & Blades

Bling - Ti MMC - up to 70% weight

savings

Blisk – up to 30% weight savings

Thermal EfficiencyThermal Efficiency

F l ffi i i ith hi hF l ffi i i ith hi h

Source: Rolls Royce

Fuel efficiency improves with higher pressure Fuel efficiency improves with higher pressure and temperature … but NOx increasesand temperature … but NOx increases

Impact of Changing Business ModelImpact of Changing Business Model

Selling EnginesSelling Engines• Profitability aligned

with engine operating performanceperformance

• Desire for increased l t dcycles to reduce

maintenance

Titanium content increased Titanium content increased due to strength, corrosion due to strength, corrosion Erosion Resistance g ,g ,resistance & weight savingsresistance & weight savings

Erosion Resistance Leading Edge

Titanium Strips

Evolution in Engine DesignEvolution in Engine DesignGeared Turbo FanEnhanced Turbo Fan

http://www.pw.utc.com/ Source: http://www.rolls-royce.com/paris2007/media/images.html

Intercooled Recuperated EngineUnducted Turbo Fan

Source: http://www.mtu.de/en/technologies/engineering_newsSource: people.bath.ac.uk/mek20/finished/files/1_6.png .

The Future Remains BrightThe Future Remains Bright

Titanium ImpactDriving Forces

Aircraft Demand

Higher Bypass Ratiog yp

Increased Pressure and Temperature

New Business Model

Overall

Thank YouThank You