BSA 2017 Convention Temp Photo Placeholder Chris Coughl Ch ris - PowerPoint PPT Presentation

BSA 2017 Convention Temp Photo Placeholder Chris Coughl Ch ris Coughlin in Please place your photo on top of the placeholder and email us a high resolution version of your EVP and Group President, photo so we can The Timken Company & smoothly add it into the slide ABMA Chairman

ABMA Mission ABMA’s primary mission is to provide leadership in the United States to address issues impacting the bearing industry.

Primary Members • • • Abbott Ball Company Koyo Corporation Regal Beloit • • • Accurate Bushing Nachi Technology Rexnord Company, INC • • Nakanishi Schaeffler Group USA • American Roller Manufacturing • SKF USA, Inc. Bearing • New England • Standard Locknut LLC • Atlantic Bearing Miniature Ball • The Timken Company Services • New Hampshire Ball • Universal Bearings • Baldor Dodge Bearings LLC • • Bearings NN, Inc. Manufacturing • NSK Corporation Company • NTN Bearing • Coorstek Inc Corporation of • Hoover Precision America Products • Precision Enterprises

Associate Members • • Ajax Rolled Ring & REM Surface Machine Engineering • • Aubert & Duval Rotor Clip Company • • Charter Steel Sentient Science • • Gravotech Specialty Ring Products, Inc. • Greer Steel • Specialty Steel • Latrobe Specialty Treating Metals, A Carpenter • Company Sullivan Steel Service • • Leech Carbide TATA STEEL • • Ovako North America, Universal Stainless Inc and Alloy Products, Inc. • PARTsolutions • Worthington Industries

Today’s Topics • North America Industry Statistics • 1Q Business Environment • Long-term Trends Affecting the Bearing Industry.

Executive Summary for 2016 Statistics • 2016 Was a Very Difficult Year for the Bearing Industry within the United States. • Quarter to Quarter comparisons for 2016 vs. 2015 Show Production Was Down in the 7-10% Range. • It Was a Broad Based Reduction Across Most Product Ranges With Only the Automotive Industry Holding its Ground. • Imports Significantly Outpaced Exports. 4Q Imports Were 80% Higher than Domestic Production.

Percent Change -35% -30% -25% -20% -15% -10% 10% 15% 20% 25% 30% 35% -5% 0% 5% US Bearing Production Q1 1994 Q1 1995 Q1 1996 Q1 1997 Q1 1998 Q1 1999 Total Bearings Market - ABMA Estimates Quarter v. Quarter Year Ago Q1 2000 Q1 2001 Q1 2002 Q1 2003 Q1 2004 Q1 2005 Q1 2006 Q1 2007 Q1 2008 Q1 2009 Q1 2010 Q1 2011 Q1 2012 Q1 2013 Q1 2014 Q1 2015 Q1 2016

US Bearing Production Total Domestic Production - Value Total Bearings Market - ABMA Estimates 1,900 1,800 Total Shipments 1,700 3 Months Moving Avg (3mma) USD in Millions 1,600 1,500 1,400 1,300 1,200 1,100 1,000 900 Q1 1994 Q1 1995 Q1 1996 Q1 1997 Q1 1998 Q1 1999 Q1 2000 Q1 2001 Q1 2002 Q1 2003 Q1 2004 Q1 2005 Q1 2006 Q1 2007 Q1 2008 Q1 2009 Q1 2010 Q1 2011 Q1 2012 Q1 2013 Q1 2014 Q1 2015 Q1 2016

US Production by Bearing Type Domestic Production by Product Lines - Value ABMA Estimates 900 800 700 600 USD in Millions 500 400 300 200 100 0 Q1 1994 Q1 1995 Q1 1996 Q1 1997 Q1 1998 Q1 1999 Q1 2000 Q1 2001 Q1 2002 Q1 2003 Q1 2004 Q1 2005 Q1 2006 Q1 2007 Q1 2008 Q1 2009 Q1 2010 Q1 2011 Q1 2012 Q1 2013 Q1 2014 Q1 2015 Q1 2016 Ball Bearings Tapered Roller Bearings Other Roller Bearings Mounted

Today’s Topics • North America Industry Statistics • 1Q Business Environment • Long-term Trends Affecting the Bearing Industry

Q1 2017 Environment • Off-Highway Markets Have Clearly Turned • OE service leading the way. • Original equipment builds improving, but still low. • Industrial Distribution Demand is Improving • Metals, mining, and general industrial improving. • Energy Improving as Well • Oil & Gas has turned off very low levels • Coal has stabilized, but long-term future uncertain • Bearing Companies are Cautiously Optimistic in Public Comments.

Today’s Topics • North America Industry Statistics • 1Q Business Environment • Long-term Trends Affecting the Bearing Industry

Trends Affecting Bearing Industry • Mega-Trends • Electrification of the Powertrain

Mega Trends - Urbanization Driving Long-term Growth in Many Industries • Rail • Construction • Mining • Metals • Energy

Mega Trends – Energy Efficiency A Dynamic “Bearing” Environment • Emission reduction affecting equipment designs in terms of weight / efficiency • Renewables continue to gain traction and are on long-term growth trend. • Areas such as coal appear to be under long-term pressure. • Government policy a major variable

Mega Trends – Globalization Increasing Operational Complexity • Increased channel complexity • High variability with regards to equipment designs • Globalization of manufacturing creates various challenges

Mega Trends – Digitalization A Major Long-term Impact • Affects product design in terms of sensing capability and integration into systems • High impact on manufacturing process in terms of connectivity and automation • Integration bearing manufacturers into supply chains, customers, and channels will continue to increase.

Electrification of the Powertrain • Wide ranging consensus that this trend is real and will have a large long-term impact. • Automotive industry is leading the way. • Large impact on equipment design and associated components. • Long-term, not confined to automotive. Many principles are equally applicable to industrial equipment • A long-term issue for all bearing producers

Continuing Education Bearings and Their Lubrication • May 21, 2017 – STLE Annual Meeting • Atlanta, GA Advance Concepts of Beating Technology • June 19-22, 2017 • Oakbrook, IL Essential Concepts of Bearing Technology • August 22-24, 2017 • Oakbrook, IL Advance Concepts: Lubrication and Wear • Fall 2017 • Location TBD

Closing Comments On Behalf of All ABMA Members, I Would Like to Thank the BSA Organization for the Opportunity to Present Our Industry This Morning. And We Greatly Appreciate the Support of Our Distribution Partners Who Help Us Bring Our Products and Services to Market.