Outlook

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Outlook Steel
AMM Aerospace Conference Pittsburgh, Pa April
16, 2009
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In Continuous Operations in the Same Location for
95 Years exceptional in North American steel
industry
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Company Overview

• 1913 Latrobe Electric Steel Company
• established
• 1916 Tool Steel product line introduced
• 1956 Production begins for vacuum
• remelted materials
• 1963 Construction of new primary melting
• and remelting facilities
• 1968 Completion of Continuous Rolling Mill
• 1975 Acquisition of LESCO by Timken
• 1992 Completion of Precision Forging
• Facility
• 1994 SandyCreek Service Center

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Specializing in vacuum induction melted
vacuum arc remelted alloys for life-critical
applications
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• CONSOLIDATED VIEW
• Markets served

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• Leader in Remelted Specialty Steels
  Alloys
• Superior technology, process and metallurgical
  expertise
• Established reputation for quality customer
  service
• Broad product offering over 350 niche alloys
• Extensive Quality Agreements
• ISO 9001 2000
• AS 9100
• NADCAP
• Vendor Manufacturing Agreements with Agusta,
  Goodrich, Messier-Dowty
• Critical Rotating Part Vendor Agreements with
  Bell, Boeing, GE, RR, SNECMA, UT

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• AEROSPACE CHALLENGES
• Engineering-Intensive
• Product Liability Exposure
• Testing Requirements
• Cyclicality

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Adding Value through TECHNOLOGY QUALITY SERVICE
Investing in People Investing in
Technology Investing in Modern Manufacturing
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Industry Reaction to 2004 Upturn

• From 2004 through 2007 demand outstripped supply
• Resulted in long lead times, allocations and
  shortages
• Industry responded to need of aerospace industry
  by increasing global capacity
• For 2008 through 2010
• 11 new VIM installations increases capacity 23
• 21 new VAR furnaces increases capacity 12
• 53 new ESR furnaces increases capacity 23

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January 2008
March 2008
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First Melt -- September 2008 Groundbreaking to
first melt in 10 months
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(No Transcript)
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• NEW VACUUM MELTING CAPACITY ON STREAM FOURTH
  QUARTER 2008
• VIM
• Melt capacity tripled to 27,000 tons
• Two 30-ton vacuum induction melting furnaces
• VAR
• Expanded from 13 to 17 VARs
• Finishing of VIM-VAR Products
• Bar peeler capacity expansion

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NEW HORIZONS OR GOING OFF THE CLIFF -- AGAIN?
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Market Dynamics

• Severe downdraft in the economy has impacted
• RPM
• 11 decline Feb 08 to Feb 09
• Increasing number of parked jets
• Build Rates
• Pushouts of the 787 and A380
• Engine Deliveries
• Financing
• Forecasts thus far call for a recovery --- as
  shown in next slides

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Build Rate Forecast
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Build Rate Forecast
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Change in Revenue Passenger Miles
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Delivery of New Engines
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LSS Viewpoint

• LSS believes these forecasts are optimistic
• Destocking of supply chain will continue
• Exacerbated by declining raw material prices
• Forecasted RPMs likely optimistic
• More jets will continue to be parked
• Cancellations and pushouts will continue
• Lack of financing further reduces build rate
  schedules
• Boeing and Airbus both have contingency plans
• Current Administration will reduce defense
  spending

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Impact on Raw Material Suppliers

• Demand for raw material suppliers has been highly
  impacted
• Fewer smaller orders to be placed
• Supplier decision based on customer service
• Award will based on lead times, delivery
  performance and quality
• LSS strategy
• Industry leader in customer service and quality

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FORGING THE FUTURE IN HIGH PERFORMANCE
MATERIALS www.latrobesteel.com