2013 Current State of American Durable Goods Manufacturing Sector

THE MASHBURN REPORT

August 2013

Current State of America’s Durable Goods Manufacturing Sector

Foreword, from the Author

My name is Lee Mashburn. I am a degreed manufacturing technologist who has engaged in various process and application engineering roles across a myriad of manufacturing industries. Since my engineering days, I have worked almost 20 years as marketer and product manager for recognized and respected technology corporations such as Honeywell, SAP, and SSA Global. My teams have scoped and launched innovative new software solutions, adopted by thousands of global manufacturers to increase growth, drive profit, reduce costs, and improve operational efficiency. These products helped clients drive better decisions faster to gain a competitive advantage in their market places.

To drive differentiating solutions to market, one must expertly analyze the market to pinpoint gaps, spot trends, quantify potential, and then execute winning go-to-market plans. Few humans have exerted more passion, time, and effort than me to perfect this process. Over the years, I have amassed a unique set of skills and processes to more consistently attack the optimal target market with the right product at the right time.

Throughout my career, I have relentlessly sought better market data to support critical go-to-market initiatives. In many cases I have been underwhelmed, disappointed, and frustrated. Raw intelligence is out there but it can be hard to find and is often not cost-effective. Additionally, most of the raw data simply trends stand-alone variables and requires heavy lifting to convert information into concrete action steps.

To help you overcome these obstacles, I have created the Mashburn Report series. Whether you are an executive, analyst, strategic planner, product manager, or marketer, Mashburn Reports are designed as powerful yet cost-effective tools to supplement your market sizing and analysis efforts. Mashburn Reports uniquely integrate and visualize choice content from more than a dozen market-moving reports. Information contained in my reports is not the typical “cut and paste data into Excel and then create simple trend charts.” This specific report on the state of America’s durable goods manufacturing market contains more than 140 pages of charts, tables, infographics, and industry benchmarks that won’t be found in other documents - at any price point. I believe you will greatly benefit. I hope you enjoy!

About the AuthorLee Mashburn is an accomplished business-to-business marketing and product management executive who has helped companies like SAP, SSA Global, and Honeywell to transform and grow into market leadership positions.

Lee has captained numerous corporate-wide strategic and marketing planning processes. Leveraging available market research data, Lee and his teams have astutely analyzed to uncover the optimal market targets to attack.

Lee has developed his “Mashburn Report” series in order to provide a more insightful and cost-effective product for business professionals and investors who wish to supplement the market data they have traditionally used - in order to make more informed and confident decisions.

Mashburn Reports:Durable Goods Manufacturing

Nondurable Goods ManufacturingRetail Trade (in process)

Wholesale Trade (in process)

Table of Contents

Section 1: Report Introduction & Overview ! ! ! ! Pages 1-21• Introduction• List of manufacturing and trade sectors, industries, and sub-industries• Data sources used for this report• List of performance metrics tracked in this report• Overview of the Mashburn Industry Health Monitor Rating• Comparison of manufacturing industries according to the Mashburn Rating

Section 2: Durable Goods Manufacturing Overview ! ! Pages 22- 38• Table of durable goods manufacturing industries and sub-industries• Market share by sales, value of shipments, and employment level• Consolidated financial statements - income and balance sheets• Employment situation - level, hours worked, hourly earnings• Return per employee• Job openings, hires, and separations• National output & inventories - orders, value of shipments, inventories• Industrial productivity and capacity utilization• Import and export indexes• Producer price indexes

Table of Contents - continued

Section 3: Primary Metal Manufacturing ! ! ! ! ! ! Pages 39-51

Section 4: Fabricated Metal Product Manufacturing! ! ! Pages 52-64

Section 5: Machinery Manufacturing! ! ! ! ! ! ! Pages 65-82

Section 6: Computer & Electronic Product Manufacturing! ! Pages 83-99

Section 7: Electrical Equipment, Appliances, & Component! Pages 100-117

Section 8: Transportation Equipment Manufacturing! ! ! Pages 118-135

Introduction

1

This report addresses questions like:‣ What industry segments are encompassed under

the nondurable goods manufacturing super sector?

‣ What are the relative market sizes and growth rates of nondurable goods manufacturing industry segments?

‣ Which key financial and performance metrics are important to track? Why? What are the current states of those key metrics? How have they trended over the past decade what are they doing in 2013? Are there multivariable interrelationships that can expose useful insights?

‣ What data sources are used to support the information contained in this Mashburn Report?

‣ What is the MASHBURN RATING? How is it used to monitor and compare the current health of various manufacturing industry segments?

Mashburn Reports empower those involved with manufacturing markets:‣Marketers and product managers‣Business analysts‣Strategic and operational planners‣ Industry consultants‣Venture capitalists

WHOLESALE TRADE RETAIL TRADE

Merchant, Durable Goods•Motor Vehicles, Parts, & Supplies•Furniture & Home Furnishing•Lumber & Construction Materials•Pro & Commercial Equipment•Metal & Mineral•Household Appliances & Electronics•Hardware, Plumbing, & Heating•Machinery Equipment & Supplies•Miscellaneous

Merchant, Nondurable Goods• Paper & Paper Products• Drugs, Druggists, Sundries• Apparel, Piece Goods, Notions• Grocery & Related Products• Farm Product Raw Material• Chemical & Allied Products• Petroleum, Petroleum Products• Alcoholic Beverage• Miscellaneous

Wholesale, Electronic Market•Business-to-Business•Trade Agents & Brokers

Durable Goods•Wood•Nonmetallic Mineral•Primary Metals•Fabricated Metals•Machinery•Computer & Electronics•Electric Equipment, Appliances•Transportation•Furniture•Miscellaneous

In-Store•Motor Vehicles, Parts, & Supplies•Furniture & Home Furnishing•Electronics & Appliances•Building & Garden Equipment•Food & Beverage•Health & Personal Care•Gasoline Stations•Clothing & Clothing Accessories•Sporting Goods, Hobbies, Games•General Merchandise•Miscellaneous

Non-Store•Electronic Shopping•Mail Order Houses•Vending Machine Operators•Direct Selling Fuel Dealers

Nondurable Goods•Food•Beverage & Tobacco•Textile Mills•Textile Products•Apparel•Leather•Paper•Printing•Petroleum & Coal•Chemical•Plastics & Rubber

MANUFACTURING

2

Samples of the financial & economic publications referenced in Mashburn Reports

‣Manufacturers’ Shipments, Inventories, and Orders (M3)

‣Quarterly Financial Report (QFR)

‣Employment Situation Report

‣Job Openings and Labor Turnover

‣Producer Price Index

‣Consumer Price Index

‣Labor Productivity and Cost

‣ Import/Export Price Index

‣Gross Domestic Product

‣Personal income

‣ Industrial Production & Capacity Utilization

3

Performance Indicators and metrics that are presented in the Mashburn ReportsThis Mashburn Report analyzes and charts dozens of key economic and financial indicators (view list below) for most manufacturing and trade market segments - typically showcasing 10-year trends.

Employment Situation‣Employment level

‣Average hours worked

‣Average earnings

‣Job openings

‣Labor turnover

Consumer Spend‣Personal consumption expenditures

‣Personal income

Output & Inventories‣New & unfilled orders

‣Value of shipments

‣ Inventory levels

‣ Industrial productivity

‣Capacity utilization

Financial Statements‣Net sales

‣Cost of sales & operations

‣Operating & net income

‣Assets & liabilities

‣Shareholders’ equity

‣Net working capital

Price & Cost Indexes‣Consumer price

‣Producer price

‣Labor productivity & cost

‣ Import/export price

Misc. Metrics‣Cash-to-cash cycle

‣Current ratio

‣Quick ratio

‣Return on assets‣Return on sales

4

Mashburn Index2013 Health Monitor Manufacturing Industries

The Mashburn Index provides a repeatable process for rating and ranking the relative financial and operational health of durable and nondurable goods manufacturing industry segments. A total of thirteen (13) key performance indicators are analyzed and scored to derive a set of numerical indexes that are then compared.

Current index scores range from 50% (poorest health) to 83% (best health) as illustrated below. Transportation Equipment is in the best financial and operational health as of June 2013 with Primary Metals trailing the pack. Plastics & rubber products and food manufacturing rank #2 and #3 to lead the nondurables cause.

5

Transportation#1B-

Plastics & Rubber#2C+

Food Products#3C

Machinery#4C-

Fabricated Metals#5D+

Computer & Electronics#6D

Beverage & Tobacco#7D-

Chemical#10

F

Electrical#9F

Petroleum & Coal#8D-

Paper#11

F

Primary Metals#12

F

MAS

HBUR

N HE

ALTH

MON

ITOR

Augu

st 2

013

6

Mashburn Index - sample from dashboard2013 Health Monitor for Manufacturing Industries

Variables Used to Create Mashburn Index• Operating Profit• Return on Sales• Cash Cycle• Return on Assets• Industrial Production

• Capacity Utilization• Return per Employee• Growth Rates, ’13 vs. ’12• Employment Level• Intangibles

7

The Mashburn IndexComparing Durable and Nondurable Goods Manufacturing Industries

Nondurable

Durable

8Transportation is the healthiest of all top manufacturing industries!

45.0%! 55.0%! 65.0%! 75.0%! 85.0%!

Primary Metals!Paper!

Chemical!Electrical Equipment!

Petroleum & Coal!Beverage & Tobacco!

Computer & Electronics!Fabricated Metal Products!

Machinery!Food!

Plastics & Rubber!Transportation!

The Mashburn IndexComparing Manufacturing Industries

9

Value of Shipments Growth Rate, 2013 vs. 2012

Comparing Durable and Nondurable Goods Manufacturing Industries

Nondurable

Durable

-4%! -2%! 0%! 2%! 4%! 6%! 8%!

Computer & Electronics!Paper!

Primary Metals!Chemical!

Electrical Equipment!Petroleum & Coal!

Beverage & Tobacco!Fabricated Metal Products!

Plastics & Rubber!Food!

Machinery!Transportation!

Data source:M3 Report, U.S. Census BureauFigures reflect calendar year 2012 results

10

Return on Sales (ROS)Comparing Durable and Nondurable Goods Manufacturing Industries

Nondurable

Durable

11

Data source:Quarterly Financial Report, U.S. Census BureauFigures reflect calendar year 2012 results

ROS = (net pre-tax income / net sales) * 100

0%! 5%! 10%! 15%! 20%! 25%!

Machinery!Food!

Paper!Plastics and Rubber!

Primary Metals!Petroleum & Coal!

Transportation!Fabricated Metals!

Electrical!Chemical!

Computer & Electronic!Beverage & Tobacco!

Value of Shipments, in millionsComparing Durable and Nondurable Goods Manufacturing Industries


Nondurable

Durable

12

$0! $200! $400! $600! $800! $1,000!

Electrical!Beverage & Tobacco!

Paper!Plastics and Rubber!

Primary Metals!Computer & Electronic!

Fabricated Metals!Machinery!

Food!Transportation!

Chemical!Petroleum & Coal!

Net Sales, in billionsComparing Durable and Nondurable Goods Manufacturing Industries

Nondurable

Durable

13


$0! $400! $800! $1,200! $1,600!

Paper!Beverage & Tobacco!Plastics and Rubber!

Electrical!Primary Metals!


Computer & Electronic!Food!

Chemical!Transportation!

Petroleum & Coal!

Operating Margin, % of salesComparing Durable and Nondurable Goods Manufacturing Industries

Nondurable

Durable

14


Operating margin = (operating income / net sales) * 100

0%! 5%! 10%! 15%! 20%!

Petroleum & Coal!Electrical!

Transportation!Primary Metals!

Paper!Food!

Chemical!Plastics and Rubber!


Computer & Electronic!Beverage & Tobacco!

Cash-to-Cash Cycle (C2C), daysComparing Durable and Nondurable Goods Manufacturing Industries


C2C = (accounts recievable days + inventory days) - accounts payable days 15

Nondurable

Durable

0! 10! 20! 30! 40! 50! 60! 70! 80!

Electrical Equipment!Transportation!

Fabricated Metals!Primary Metals!

Chemical!Machinery!

Beverage & Tobacco!Paper!Food!

Plastics and Rubber!Computer & Electronic!

Petroleum & Coal!

Return on Assets (ROA)Comparing Durable and Nondurable Goods Manufacturing Industries

16


ROA = (net income / total assets) * 100

Nondurable

Durable

3%! 4%! 5%! 6%! 7%! 8%! 9%! 10%!

Paper!Food!

Transportation!Electrical Equipment!

Plastics & Rubber!Chemical!

Machinery!Computer & Electronics!

Beverage & Tobacco!Petroleum & Coal!

Fabricated Metal Products!

Inventories to Shipments RatioComparing Durable and Nondurable Goods Manufacturing Industries

Nondurable

Durable

17


0.0! 0.5! 1.0! 1.5! 2.0!

Machinery!Beverage & Tobacco!

Transportation!Fabricated Metals!

Computer & Electronic!Electrical!

Primary Metals!Chemical!

Plastics and Rubber!Paper!Food!

Petroleum & Coal!

Employment Level, in thousandsComparing Durable and Nondurable Goods Manufacturing Industries

Nondurable

Durable

18

Data source:Employment Situation Report, U.S. Bureau of Labor StatisticsFigures reflect calendar year 2012 results

0! 300! 600! 900! 1200! 1500!

Petroleum & Coal!Beverage & Tobacco!

Electrical!Paper!

Primary Metals!Plastics and Rubber!

Chemical!Computer & Electronic!

Machinery!Food!

Fabricated Metals!Transportation!

Hourly EarningsComparing Durable and Nondurable Goods Manufacturing Industries

Data source:Employment Situation Report, U.S. Bureau of Labor StatisticsFigures reflect calendar year 2012 results

Nondurable

Durable

19

$0! $7! $14! $21! $28! $35!

Food!Plastics and Rubber!

Fabricated Metals!Beverage & Tobacco!

Primary Metals!Paper!

Machinery!Electrical!Chemical!

Transportation!Computer & Electronic!

Petroleum & Coal!

Industrial Productivity IndexComparing Durable and Nondurable Goods Manufacturing Industries

Data source:G17 Report, U.S. Federal ReserveFigures reflect end of calendar year 2012 results

An economic indicator that measures changes in output. High levels of industrial production can lead to uncontrolled levels of consumption and rapid inflation.

Nondurable

Durable

20

0! 20! 40! 60! 80! 100! 120! 140!

Paper!Chemical!

Plastics and Rubber!Electrical!

Beverage & Tobacco!Fabricated Metals!Petroleum & Coal!

Primary Metals!Machinery!

Food!Transportation!

Computer & Electronic!

Capacity UtilizationComparing Durable and Nondurable Goods Manufacturing Industries

Nondurable

Durable

21

Data source:G17 Report, U.S. Federal ReserveFigures reflect end of calendar year 2012 results

Considered a leading indicator of inflation and future capital spending. Shows the level at which U.S. industry is performing relative to potential.

65%! 70%! 75%! 80%! 85%!

Beverage & Tobacco!Food!

Plastics and Rubber!Transportation!Primary Metals!

Computer & Electronic!Chemical!

Machinery!Paper!

Electrical!Fabricated Metals!Petroleum & Coal!

THE MASHBURN REPORT

August 2013

Current State of America’s Durable Goods Manufacturing Sector

22

Durable goods are products designed to last at least three years; bigger ticket items like automobiles, televisions, and refrigerators. These products account for roughly 15% of consumer spending.

Industries that fall under the durable goods manufacturing sector umbrella:

Sub-market NAICS2012 Shareper value of shipments

Key words

Wood Products 321 3% sawmills, veneer, truss, wood containers, pre-fab

Nonmetallic Mineral Products 327 4% clay, pottery, glass, cement, gypsum

Primary Metals 331 11% iron and steel mills, aluminum, foundries

Fabricated Metal Products 332 13% forging, stamping, cutlery, hand tools, boilers, tanks

Machinery 333 15% agriculture, mining, industrial

Computer & Electronic Products 334 13% computer, peripheral, communications, audio, video

Electrical Equipment & Appliances 335 5% lighting, household appliance, electrical equipment

Transportation 336 29% motor vehicle and parts, aerospace, railroad, ships

Furniture & Related Products 337 2% household and office furniture, kitchen cabinets, window treatments

Miscellaneous 339 5% medical equipment and supplies, jewelry, silverware, sporting goods

23

Market SegmentationAmerica’s Durable Goods Manufacturing

Takeaway:‣ Over 70% of the durable goods manufacturing market share consists

of transportation, computer & electronics, machinery, and fabricated metals. Transportation garners #1 share for all three metrics.

By Total Salesper the QFR report

By Value of Shipmentsper the M3 report

By Employment Levelper the Employment Situation report

Transportation31%

Computer &Electronic

19%Machinery

14%

FabricatedMetal10%

All Other26%

Transportation28%


13%

Machinery15%

FabricatedMetal13%

All Other31%

Transportation20%


14%

Machinery15%

FabricatedMetal19%

All Other32%

24

•$3.1 trillion in annual sales•Sales and costs up, and net

income down•More cash on hand, greater

investment level•Total assets up 6.5%, total

liabilities up 7.4%•Stockholders’ equity up 5.4%

2012 vs. 2011Year Over Year Summary

25Raw data extracted from the June 2013 Quarterly Report, produced by the U.S. Census Bureau

Employment Situation - Employment LevelDurable Goods Manufacturing Sector, USAThe Employment Situation Report, produced monthly by the United States Bureau of Labor Statistics (BLS), is the source of raw data used to complete this section of the Mashburn Report. The BLS surveys approximately 145,000 businesses and agencies that span over 500,000 U.S. worksites to determine employment, hours, and earnings figures at detailed industry levels. Note the key figures and charts below:

2.3%3-year cumulative annual growth rate in employment level for the durable

goods manufacturing sector.

7.5 millionEmployment level as of May 2013 for the durable goods

manufacturing sector.

12.3 millionThe employment level of the durable goods manufacturing

sector in June 1979.

Employment Level, 2003-2012Durable Goods Manufacturing Sector

6,900!

7,400!

7,900!

8,400!

8,900!

CY 2003!

CY 2004!

CY 2005!

CY 2006!

CY 2007!

CY 2008!

CY 2009!

CY 2010!

CY 2011!

CY 2012!

in th

ousa

nds!

Employment Level, since 1940Durable Goods Manufacturing Sector

2010

Now

19405,000!

6,000!

7,000!

8,000!

9,000!

10,000!

11,000!

12,000!

in th

ousa

nds!

26

Employment Situation - Hours & EarningsDurable Goods Manufacturing Sector, USAThe Employment Situation Report, produced monthly by the United States Bureau of Labor Statistics (BLS), is the source of raw data used to complete this section of the Mashburn Report. The BLS surveys approximately 145,000 businesses and agencies that span over 500,000 U.S. worksites to determine employment, hours, and earnings figures at detailed industry levels. Note the key figures and charts below:

41.1Average number of hours worked by durable goods manufacturing employees.

$25.55Average hourly earnings by

durable goods manufacturing employees in May 2013.

$21.94Average hourly earnings by

durable goods manufacturing employees - after inflation.

38.5!

39.0!

39.5!

40.0!

40.5!

41.0!

CY 2006!

CY 2007!

CY 2008!

CY 2009!

CY 2010!

CY 2011!

CY 2012!

HY 2013!

Average Weekly Hours WorkedDurable Goods Manufacturing Sector

$20.00!

$21.00!

$22.00!

$23.00!

$24.00!

$25.00!

$26.00!

CY 2006! CY 2007! CY 2008! CY 2009! CY 2010! CY 2011! CY 2012! HY 2013!

USD,

per

hou

r!

Average Hourly Earnings! Average Hourly Earnings, adjusted for inflation!

Average Hourly EarningsDurable Goods Manufacturing Sector

27

Return per EmployeeDurable Goods Manufacturing Sector, USA

47%Increase in value of shipments per employee since CY 2003

61%Increase in net sales per employee since CY 2003

$230!$250!$270!$290!$310!$330!$350!$370!$390!$410!$430!

CY 2003!

CY 2004!

CY 2005!

CY 2006!

CY 2007!

CY 2008!

CY 2009!

CY 2010!

CY 2011!

CY 2012!

$, in

thou

sand

s!

Net Sales per Employee! Value of Shipments per Employee!

How Long ... ... can manufacturing companies

sustain these increases?28

Job Openings, Hires, & Separations, JOLTS ReportDurable Goods Manufacturing Sector, USA

Job Openings IndexSeparations IndexHires Index

CY 2012

CY 2003

-43%Decrease in total separations

from 2003 to 2012

-29%Decrease in new hires from 2003 to 2012

45%Increase in job openings

from 2003 to 2012.

29

Reasons for Job Separations, JOLTS ReportDurable Goods Manufacturing Sector, USA

I Quit!Job quits have nearly doubled

since the recession ended

0%!

20%!

40%!

60%!

80%!

100%!

CY 2003!

CY 2004!

CY 2005!

CY 2006!

CY 2007!

CY 2008!

CY 2009!

CY 2010!

CY 2011!

CY 2012!

Perc

ent o

f Tot

al Jo

b Se

para

tions

!

Layoffs & Discharges! Other Separations! Quits!

30

National Output & Inventories - New OrdersDurable Goods Manufacturing Sector, USANew orders is a great indicator of durable goods manufacturing sector growth and productivity. This measurement is tracked and published on a monthly basis by the U.S. Census Bureau in the Manufacturers’ Shipments, Inventories, and Orders (M3) report. Statistical data from the M3 report covers current economic conditions and indicators of future production commitments in the manufacturing sector.

$2.6 trillionAmount of new durable goods manufacturing orders - per the

M3 report - in CY 2012.

12.5%3-year compound annual growth

rate (CAGR) for new durable goods manufacturing orders.

3-year CAGR for new durable goods manufacturing orders - excluding

transportation & defense industries.

7.0%

$1.0!$1.2!$1.4!$1.6!$1.8!$2.0!$2.2!$2.4!$2.6!$2.8!

CY 2003!

CY 2004!

CY 2005!

CY 2006!

CY 2007!

CY 2008!

CY 2009!

CY 2010!

CY 2011!

CY 2012!

USD,

in tr

illion

s!

New Orders! New Orders minus Transportation & Defense!

New OrdersDurable Goods Manufacturing Sector

New orders reflect the very latest demand and a surge in orders will keep factories busy.

But one large military or aircraft order can inflate the new orders metric - which is why

it’s important to track new orders that exclude defense and/or transportation.

31

National Output & Inventories - M3 Report VariablesDurable Goods Manufacturing Sector, USAIn addition to new orders, the M3 report also features statistics for unfilled orders, value of shipments, and inventory levels. ‣ Shipments are products that have been ordered and that are being delivered right now.‣ Unfilled orders signify backlog that can keep factories busy. An increase is good as long as the factory can fill the orders without

chronic delays that create unhappy customers.‣ When factory output exceeds orders, inventories can balloon and lead to corporate financial headaches. A buildup of unwanted

goods can be quite costly. As inventory mounts, plants can be forced to slash output, shut down plants, and layoff employees.

$2.7 trillionValue of durable goods

manufacturing shipments - per the M3 report - in CY 2012.

11.7 trillionValue of durable goods

manufacturing unfilled orders - per the M3 report - in CY 2012.

374 billionCY 2012 value of total

inventories within the durable goods manufacturing sector.

2.6!

3.1!

3.6!

4.1!

4.6!

5.1!

5.6!

Jan-

03!

Jun-

03!

Nov-

03!

Apr-0

4!Se

p-04

!Fe

b-05

!Ju

l-05!

Dec-

05!

May-

06!

Oct-

06!

Mar-0

7!Au

g-07

!Ja

n-08

!Ju

n-08

!No

v-08

!Ap

r-09!

Sep-

09!

Feb-

10!

Jul-1

0!De

c-10

!Ma

y-11

!Oc

t-11

!Ma

r-12!

Aug-

12!

Jan-

13!

Ratio

!

Unfilled Orders to Value of Shipments Ratio!

Recession

0.4!0.5!0.5!0.6!0.6!0.7!0.7!0.8!0.8!

Jan-

03!

Jun-

03!

Nov-

03!

Apr-0

4!Se

p-04

!Fe

b-05

!Ju

l-05!

Dec-

05!

May-

06!

Oct-0

6!Ma

r-07!

Aug-

07!

Jan-

08!

Jun-

08!

Nov-

08!

Apr-0

9!Se

p-09

!Fe

b-10

!Ju

l-10!

Dec-

10!

May-

11!

Oct-1

1!Ma

r-12!

Aug-

12!

Jan-

13!

Ratio

!

Value of Shipments to Total Inventories Ratio!

Recession

32

Total inventories represent the value of the end-of-month stocks regardless of stage of fabrication (whether in the form of purchased materials and supplies, work in process, or finished goods). These inventories are valued at cost using any valuation method other than LIFO. Inventories associated with the non-manufacturing activities of your company are excluded.‣ Materials-and-Supplies Inventory - All unprocessed raw and semi-fabricated commodities and supplies for which you have title.‣ Work-in-Process Inventory - Accumulated costs of all commodities undergoing fabrication within your plants and long-term contracts

where the inventory costs are for undelivered items and the value of work done that has not been reported in sales.‣ Finished Good Inventory - The value of all completed products ready for shipment and all inventories and goods bought for resale

requiring no further processing or assembly. No accumulation of finished goods inventories should occur with long-term contracts unless the total sales receipts are not recorded until the time of delivery.

National Output & Inventories - InventoriesDurable Goods Manufacturing Sector, USA

Percentage of Total Inventories by Stage of CompletionDurable Goods Manufacturing Sector, USA

26%!28%!30%!32%!34%!36%!38%!40%!42%!

Mar-0

3!Se

p-03

!Ma

r-04!

Sep-

04!

Mar-0

5!Se

p-05

!Ma

r-06!

Sep-

06!

Mar-0

7!Se

p-07

!Ma

r-08!

Sep-

08!

Mar-0

9!Se

p-09

!Ma

r-10!

Sep-

10!

Mar-1

1!Se

p-11

!Ma

r-12!

Sep-

12!

Mar-1

3!

Perc

ent o

f Tot

al In

vent

ories

!

Materials & Supplies! Work in Process! Finished Goods! 33

National Output & Inventories - Industrial Productivity (IP) & Capacity Utilization (CU)Durable Goods Manufacturing Sector, USA

The Federal Reserve Board produces a monthly report of production and capacity utilization indexes for the industrial sector. The industrial sector, per the Federal Reserve Board, covers manufacturing, mining, and electric and gas utilities. The industrial

sector, combined with the construction industry, accounts for the bulk of the variation in national output over the course of the business cycle. Ongoing production and capacity measurement helps illuminate structural developments in the economy.

The production index measures real output and is expressed as a percentage of real output in a base year, currently 2007. On a monthly basis, the individual indexes of industrial production are constructed from two main types of source data: (1) output measured in physical units and (2) data on inputs to the production process, from which output is inferred. Data on physical products, such as tons of steel or barrels of oil, are typically obtained from private trade associations and from government agencies; data of this type are used to estimate monthly industrial production wherever possible and appropriate.

The Federal Reserve Board constructs estimates of capacity and capacity utilization for industries in

manufacturing, mining, and electric and gas utilities. For a given industry, the capacity utilization rate is equal to an output index (seasonally adjusted) divided by a capacity index. The Federal Reserve Board's capacity indexes attempt to capture the concept of sustainable maximum output-the greatest level of output a plant can maintain within the framework of a realistic work schedule, after factoring in normal downtime and assuming sufficient availability of inputs to operate the capital in place. 34

IP & CU Index ComparisonDurable Goods Manufacturing Sector, USA

55!

65!

75!

85!

95!

105!

Mar-0

3!Au

g-03

!Ja

n-04

!Ju

n-04

!No

v-04

!Ap

r-05!

Sep-

05!

Feb-

06!

Jul-0

6!De

c-06

!Ma

y-07

!Oc

t-07

!Ma

r-08!

Aug-

08!

Jan-

09!

Jun-

09!

Nov-

09!

Apr-1

0!Se

p-10

!Fe

b-11

!Ju

l-11!

Dec-

11!

May-

12!

Oct-

12!

Mar-1

3!

Inde

x, 2

007!

Industrial Productivity! Capacity Utilization!

Import and Export IndexesDurable Goods Manufacturing Sector, USA

Transportation Equipment

81!

91!

101!

111!

121!

131!

CY 2006! CY 2007! CY 2008! CY 2009! CY 2010! CY 2011! CY 2012!

Export Index! Import Index!

81!

91!

101!

111!

121!

131!

CY 2006! CY 2007! CY 2008! CY 2009! CY 2010! CY 2011! CY 2012!


Computer & Electronic Products

81!

91!

101!

111!

121!

131!

CY 2006! CY 2007! CY 2008! CY 2009! CY 2010! CY 2011! CY 2012!


Machinery Manufacturing

81!

91!

101!

111!

121!

131!

CY 2006! CY 2007! CY 2008! CY 2009! CY 2010! CY 2011! CY 2012!


Fabricated Metal Products

35

Producer Price Indexes, PPI

The Producer Price Indexes (PPIs) are a family of indexes that measure changes in the selling prices received by domestic producers of goods and services. The PPI sample includes over 25,000 establishments providing approximately 100,000 price quotations per month for products specified through a process called disaggregation. Producer Price Indexes are usually made available during the second full week of the month following the reference date.

The PPI family of indexes consists of several major classification systems, each with its own structure, history, and uses. However, indexes in all classification systems draw from the same pool of price information provided to the BLS by cooperating company reporters. The three most important classification structures are (1) industry, (2) commodity, and (3) Stage of Process (SOP). ‣ A Producer Price Index for an industry is a measure of changes in prices

received for the industry’s net output sold outside the industry. Measures—or indexes—of price change classified by industry form the basis of the program. These indexes reflect the price trends of a constant set of goods and services that together represent the total output of an industry.‣ The commodity classification structure of the PPI organizes products by

similarity of end use or material composition, regardless of whether the products are classified as primary or secondary in their industry of origin.‣ PPI are calculated for the three stages of process; crude, intermediate, and

finished goods. Finished goods are defined as commodities that are ready for sale to the final-demand user—either an individual consumer or a business firm. Intermediate materials, supplies, and components consists partly of already processed commodities that require further processing. Crude materials for further processing are defined as unprocessed commodities not sold directly to consumers.

Source: Bureau of Labor Statisticswww.bls.gov

36

http://www.ism.ws

http://www.ism.ws

Producer Price Indexes, PPIDurable Goods Manufacturing Sector, USA

Transportation Equipment

113.0!

113.5!

114.0!

114.5!

115.0!

115.5!

116.0!

116.5!

PPI!

Jan - Jun ’12 Jan - Jun ’13

Computer & Electronic Product

88.4!

88.6!

88.8!

89.0!

89.2!

89.4!

89.6!

89.8!

90.0!

PPI!


1.3%Increase in PPI when

comparing 2013 versus 2012

115.6Most recent PPI,

15.6% increase vs. Dec ’03

-0.3%Increase in PPI when



10.5% decrease vs. Dec ’03 37

Producer Price Indexes, PPIDurable Goods Manufacturing Sector, USA


123.5!

124.0!

124.5!

125.0!

125.5!

126.0!

126.5!

127.0!

127.5!

128.0!

128.5!

PPI!







183.5!

184.0!

184.5!

185.0!

185.5!

186.0!

186.5!

187.0!

PPI!





86.3% increase vs. Dec ’03 38

The Current State of America’s Primary Metals Manufacturing Market

39

Primary Metals ManufacturingNAICS 331

WORLDWIDE OVERVIEWCompanies in this industry engage in smelting and refining of ferrous and nonferrous metals and include iron and steel mills, rolled steel shape manufacturers, aluminum producers, and copper foundries. The global primary metals manufacturing industry generates annual revenue of more than $3 trillion. China leads all nations in crude steel and aluminum production by a wide margin. Other top steel producers include Japan, the US, India, Russia, and South Korea. Other major aluminum suppliers include Canada, Russia, and Australia. Modest growth is forecast for the United States over the next two years. Key growth drivers include durable goods orders and nonresidential construction spending.Demand comes largely from manufacturers of durable goods such as motor vehicles, machinery, containers, and construction steel. The profitability of individual companies depends largely on efficient operations, because most products are commodities sold based on price. Big companies have large economies of scale in production. Accordingly, most producers of secondary products buy raw metal from the large producers. Small companies can compete by serving regional markets or producing specialty products.SOURCE: Hoovers

$3 trillionAnnual revenue generated by all global primary metals

manufacturers

16%Approximate U.S. share of worldwide primary metals

manufacturing market

3,500Number of United States

primary metals manufacturing companies

40

Primary Metal ManufacturingNAICS 331

+2.7%

$296bUSA 2012

11%2013 share of durable goods


2013 vs. 2012Jan-July new orders

New Orders

Market Share

Growth Rate

Iron and Steel Mills, Ferroalloy Manufacturing

Steel Product MFG, from Purchased Steel‣ Pipe & tube‣ Rolled steel‣ Steel wiring

Alumina & Aluminum Production & Processing‣ Alumina refining‣ primary aluminum

production‣ Smelting & alloying‣ Sheeting, plating, rolling,

drawing, & extrusion

Nonferrous Metal (Except Aluminum) Production & Processing‣ Smelting & refining‣ Copper rolling, drawing,

extruding, & alloying

Foundries‣ Ferrous metal‣ iron‣ Steel‣ Nonferrous metal‣ Nonferrous metal die-casting

41

Primary Metal ManufacturingNew Orders by Sub-Industry

$0!

$20!

$40!

$60!

$80!

$100!

$120!

$140!

CY 2003!

CY 2004!

CY 2005!

CY 2006!

CY 2007!

CY 2008!

CY 2009!

CY 2010!

CY 2011!

CY 2012!

USD,

in b

illion

s!

Aluminum & Nonferrous Ferrous Metal Foundries Iron & Steel Mills, Ferro Alloy

+2.4%2013 vs. 2012

new orders

$296bUSA 2012

New Orders

Growth Rate

42

Primary Metal ManufacturingMarket Share per New Orders

Raw data extracted from the June 2013 M3 Report, produced by the U.S. Census Bureau

Aluminum & Nonferrous

52%Iron & Steel Mills,

Ferro Alloy & Steel41%

*Ferrous Metal

**Foundries7%

$151bJan - June ’13

$296bUSA 2012

New Orders

New Orders

43

*Ferrous metals contain appreciable amounts of iron.

**A foundry is a factory that produces metal castings.

Primary Metal ManufacturingEmployment Level as of June 2013

Raw data extracted from the June 2013 Employment Situation Report, produced by the U.S. Bureau of Labor Statistics

0! 20! 40! 60! 80! 100! 120! 140!

Nonferrous Production & Processing!

Alumina & Aluminum Production!

Steel Product MFG from Purchased Steel!

Iron & Steel Mills, Ferro Alloy!

Foundries!

Employment Level, in thousands!

-0.3%

0.9%

Growth Rate2013 vs. 2012

-2.6%

-2.8%

-6.1%

394kJune 2013

Employment Level

44

Primary Metal ManufacturingEmployment Situation Index Comparison

+3.9%

-15.1%Since March ’06

+2.2%

Employee Level

Since March ’06

Weekly Hours

Since March ’06

Hourly Earnings

Hourly Earnings IndexWeekly Hours IndexEmployment Level Index June 2013

March 2006

45

66 106

99.1

Industrial Production49% 84%

73.7

Capacity Utilization

-3.3% 11.2%

6.3%

Operating Profit-4.2% 12.6%

6.7%

Return on Sales

-2.0% 10.4%

5.2%

Return on Assets57 86

66.3

Cash Cycle, days

0.83 1.51Quick Ratio

1.37

1.42 2.25

2.18

Current Ratio

Primary Metal Manufacturing Dashboard

46

Mashburn Ranking: 12/12

50%

103.0 196.5

163.0

Import Index102.2 187.8

158.9

Export Index

1.34 2.39

1.42

Inventory to Shipment Ratio

1.25 1.95

1.43

Unfilled Order to Shipment Ratio

117.7 233.5

196.9

Producer Price Index347k 496k

392k

Employment Level

$284k $655k

$608k

Net Sales per Employee$297k $758kValue of Shipments

per Employee

$758k

47

Primary Metal Manufacturing DashboardMashburn Ranking: 12/12

50%


Raw data extracted from the June 2013 Quarterly Report, produced by the U.S. Census Bureau

•$242 billion in annual sales, down 1.2% from prior year

•Operating income and net income significantly down

•Less cash, flat investment level•Inventories up 5.4%•Net working capital up almost 5%

48

Primary Metals ManufacturingM3 Report Major Index Comparison, Jan 2012 - May 2013

+4.6%

-6%Drop in both unfilled

orders and total inventories since Jan ’12

-4.6%Decrease in inventories-to-

shipments ratio

Rise in new orders since Jan ’12

49

Unfilled Orders IndexNew Orders IndexValue of Shipments IndexTotal Inventories Index

Jul ’13

Jan ’12

Primary Metal ManufacturingProducer Price Index by Sub-industry, Index July ’09

Steel MFG from purchased steelNonferrous production & processing

Iron & steel mills, ferro alloy Aluminum production

Raw data extracted from the July 2013 Producer Price Index Report, produced by the U.S. Census Bureau

June 2013

July 2009

Post Recession

50

Primary Metal ManufacturingImport & Export Price Index Comparison

110!

120!

130!

140!

150!

160!

170!

180!

190!

CY 2006! CY 2007! CY 2008! CY 2009! CY 2010! CY 2011! CY 2012!

Import Index! Export Index!

51

The Current State of America’s Fabricated Metal Product

Manufacturing Market

52

Fabricated Metal Product ManufacturingNAICS 332

WORLDWIDE OVERVIEWCompanies in this industry transform purchased metals into intermediate or end-use products by forging, stamping, bending, forming, welding, machining, and assembly. Because of the special manufacturing processes involved for individual parts, most companies make a limited range of products. Globally, the fabricated metal product manufacturing industry generates nearly $2 trillion in annual revenue. Top producers include the US, China, Japan, Germany, Italy, and Canada. The US fabricated metal product manufacturing industry includes about 55,000 companies with more than $325 billion in combined annual revenue and is expected to see moderate growth over the next two years. Key growth drivers include gains in US industrial production and rising demand for durable goods.Demand is driven largely by the needs of other industrial companies and is therefore linked to economic growth. The profitability of individual companies depends on technical expertise and efficient manufacturing.SOURCE: Hoovers

$2 trillionAnnual revenue generated by

all global fabricated metal products manufacturers

16%Approximate U.S. share of worldwide fabricated metal

products manufacturing market

55,000Number of United States fabricated metal products manufacturing companies

53

Fabricated Metal Product ManufacturingNAICS 332

-12.1%

$348bUSA 2012



2013 vs. 2012new orders

New Orders

Market Share

Growth Rate

Forging & Stamping‣ Iron & steel forging‣ Nonferrous forging‣ Roll forming

Cutlery & Handtool‣ Cutlery & handtool‣ Metal kitchen cookware

& utensils‣ Saw blade

Boiler, Tank, & Shipping Container‣ Power boilers, heat exchangers‣ Metal tanks‣ Metal cans & boxes

Architectural & Structural‣ Plate work‣ Ornamental‣ Metal windows & doors‣ Sheet metal

Hardware Manufacturing

Machine Shops, Turned Products‣ Machine shops‣ Turned products‣ Screws, nuts, & bolts

Coating, Engraving, Heat Treating

Other Fabricated Metal Product‣ Metal, industrial, & fluid power valve‣ Plumbing fixture & pipe fitting‣ Ball & roller bearing‣ Guns & ammunition

54

Fabricated Metal Product ManufacturingMarket Share per Revenue

Data Source: Hoovers

Forging, Stamping, Boilers, & Tanks

34%

Architectural & Structural

22%

Machine Shops12% Hardware

9%

All Other23%

Metal Valves & Pipefitting

9%

Coating, Engraving, & Heat Treating

8%

Cutlery, Hand Tools, & Ammo

6%

55

Fabricated Metal Product ManufacturingEmployment Level by Sub-Industry

0! 50! 100! 150! 200! 250! 300! 350! 400!

Hardware!Cutlery & Hand Tools!

Spring & Wire Products!Boilers & Tanks!

Forging & Stamping!Coating & Engraving!

All Other!Architectural & Structural!

Machine Shops!

Employee Level, in thousands!

0.1%

2.1%

2.8%

1.0%

2.6%

-0.6%

0.0%

-2.5%

4.8%


1,437kEmployment LevelJune ’13

56

Fabricated Metal Product ManufacturingEmployment Situation Index Comparison

+7.3%


-0.7%

Employee Level

Since March ’06

Weekly Hours

Since March ’06

Hourly EarningsHourly Earnings IndexWeekly Hours IndexEmployment Level Index

June 2013

March 2006

57


•$745 billion in annual sales, up 6.3%

•Op income and net income up•More cash on hand, less

investment level•Every balance sheet variable

was up in 2013

Raw data extracted from the June 2013 Quarterly Report, produced by the U.S. Census Bureau 58

Fabricated Metal Product ManufacturingIncome Statement Index Comparison

5.2x

45%Amount of net sales increase

from CY ’03 to CY ’12

2.1xOperating income has grown at a rate of 2.1 times faster

than has revenue

Net income has grown at a rate of 5.2 times faster

than has revenue

Operating Income IndexNet Sales IndexNet Income Index

CY 2012

CY 2003

59

72 102

94.6


84.6


3.7% 10.5%

10.2%

Operating Profit

3.6% 10.6%

10.0%


75

Cash Cycle, days


1.27

1.68 2.16

1.96

Current Ratio

Fabricated Metal Product Dashboard

60

2.2% 11.0%

9.7%

Return on Sales


72%

$167k $240k

$240k

Value of Shipments per Employee

$138k $208k

$208k

Net Sales per Employee

101.3 130.7

128.2


131.4

Export Index

1.41 1.83

1.64


2.06 3.12

3.12


132.7 186.3

186.3

Producer Price Index1,256k 1,568k

1,437k

Employment Level 61

Fabricated Metal Product DashboardMashburn Ranking: 5/12

72%

Producer Price Indexes, PPIFabricated Metal Product Manufacturing


183.5!

184.0!

184.5!

185.0!

185.5!

186.0!

186.5!

187.0!

PPI!






62

Fabricated Metal Product ManufacturingProducer Price Index by Sub-industry, Index July ’09

Forging & Stamping Machine shops Boiler, tank, shipping container Architectural, structural


June 2013

July 2009

Post Recession

63

Fabricated Metals ManufacturingM3 Report Major Index Comparison, Jan 2012 - May 2013


May 2013Jan 2012

2.1%

14.6%Increase in unfilled orders index since January 2012

Flat0.3% increase in value of

shipments over last 17 months

Increase in both new orders and total inventories since 1/12

64

The Current State of America’s Machinery Manufacturing Market

65

Machinery ManufacturingNAICS 333

WORLDWIDE OVERVIEWCompanies in this industry manufacture various kinds of machinery used in agriculture, mining, construction, or manufacturing. The global machinery manufacturing industry generates more than $2 trillion in annual revenue. Top producers include China, Germany, Japan, the US, and South Korea. Industry experts are forecasting low growth over the next two years.

Demand for machinery depends on overall industrial activity and on the health of sectors such as agriculture, construction, manufacturing, oil and gas exploration and production, and power generation. The profitability of individual companies depends on engineering expertise and efficient production. Large companies have economies of scale in purchasing. Small companies can compete effectively by specializing.

SOURCE: Hoovers

$2 trillionAnnual revenue generated

by all global machinery manufacturers

19%Approximate United States

share of worldwide machinery manufacturing market

20,000Number of United States machinery manufacturing

companies

66

Machinery ManufacturingNAICS 333

Agriculture, Construction, & Mining Machinery‣ Agriculture & farm‣ Lawn & garden‣ Construction‣ Mining, oil & gas

Industrial Machinery‣ Industrial‣ Food product‣ Semiconductor‣ Wood, paper, & prinitng

Commercial & Service Industry Machinery‣ Optical instrument & lens‣ Photograph & photocopy

Ventilation, Heating, Air Conditioning, & Commercial Refrigeration Machinery

Engine, Turbine, & Power Equipment

Metalworking Machinery‣ Industrial mold‣ Die & tool‣ Cutting & machine tools‣ Rolling mill

Other General Purpose Machinery‣ Pumps & compressors‣ Material handling‣ Elevators‣ Conveyors‣ etc.

67

6.3%

$384bUSA 2012




New Orders

Market Share

Growth Rate

Machinery ManufacturingMarket Share per Value of Shipments


All Other Machinery31%

Agricultural, Construction, &

Mining27%

Power Transmission

12%

Ventilation, Heat, Air, & Refrigeration

11%

Industrial Machinery

10%

Metalworking Machinery

9%

68

Machinery ManufacturingMarket Share per Employment Level

Raw data extracted from the June 2013 Employment Situation Report, produced by

the U.S. Bureau of Labor Statistics

Other General Purpose Machinery

23%

Agriculture, Construction, & Mining

Machinery22%

Metalworking Machinery

16%

HVAC & Commercial Refrigeration

12%

Industrial Machinery9%

Turbine & Power Transmission

9%

Commercial & Service Industry

8%

69

Machinery ManufacturingEmployment Level as of June 2013

Raw data extracted from the June 2013 Employment Situation Report, produced by the U.S. Bureau of Labor Statistics

0! 50! 100! 150! 200! 250! 300!

Commercial & Service Industry!

Turbine & Power!

Industrial!

HVAC & Commercial Refrigeration!

Metalworking!

Agriculture, Construction, & Mining!

All Other!

Employment Level, in thousands!

0.9%


-2.1%

1.2%

0.2%

2.6%

-4.3%

-3.8%

70

Machinery ManufacturingEmployment Situation Index Comparison

Hourly Earnings IndexWeekly Hours IndexEmployment Level Index

June 2013

March 2006

71

9.9%


Flat

Employee Level

Since March ’06

Weekly Hours

Since March ’06

Hourly Earnings

Raw data extracted from the July 2013 Employment Situation Report, produced by the U.S. Census Bureau

Machinery ManufacturingEmployee Situation Indexes by Sub-industry


Agriculture, construction, mining Metalworking HVAC & commercial refrigeration Industrial

Employee Level Index

CY 2013

CY 2003

Hourly Earnings Index

CY 2013CY 2006

72


•$432 billion in annual sales•Operating and net income up

over 13% versus CY 2011•Less cash on hand, slightly

greater investment level•Inventory is largest contributor

to rise in current assets•Stockholders’ equity rose

significantly in 2012


73

Machinery ManufacturingIncome Statement Index Comparison

6.4x

74%Amount of net sales increase

from CY ’03 to CY ’12

3.2xOperating income has grown at a rate of 3.2 times faster

than has revenue

Net income has grown at a rate of 6.4 times faster

than has revenue


CY 2012

CY 2003

74

2.3% 7.7%

6.8%


77

Cash Cycle, days

2.1% 13.3%

8.9%

Return on Sales2.7% 10.4%

7.4%

Operating Profit

73 103

103.3


81.1



0.87

1.16 1.55

1.38

Current Ratio

75

Machinery Manufacturing DashboardMashburn Ranking: 4/12

73%

$227k $361k

$361k


$216k $371k

$371k


100.0 122.4

121.5


122.0

Export Index

1.66 2.32

1.90


2.22 4.60

3.31


121.4 135.3

135.2

Producer Price Index975k 1,198k

1,100k

Employment Level 76

Machinery Manufacturing DashboardMashburn Ranking: 4/12

73%

Producer Price Indexes, PPIMachinery Manufacturing Sector, USA


123.5!

124.0!

124.5!

125.0!

125.5!

126.0!

126.5!

127.0!

127.5!

128.0!

128.5!

PPI!






77

Machinery ManufacturingProducer Price Index by Sub-industry, Index July ’09

Agriculture, construction, mining Metalworking HVAC & commercial refrigeration Industrial


June 2013July 2009

Post Recession

78

Machinery ManufacturingM3 Report Index Comparison


Q2 2013

Q1 2012

79

2.8%

-9.3%Q2 ’13 vs. Q1 ’12

+8.8%Q2 ’13 vs. Q1 ’12

Unfilled Orders

Value of Shipments

Q2 ’13 vs. Q1 ’12

New Orders

80

Agricultural, Construction, and MiningValue of Shipments

12.4%

$106bCY 2012

27.4%2013 share of machinery


2013 vs 2012

Market Size

Market Share

Growth Rate$7,800!

$8,300!

$8,800!

$9,300!

$9,800!

Jan-

12!

Feb-

12!

Mar-1

2!Ap

r-12!

May-

12!

Jun-

12!

Jul-1

2!Au

g-12

!Se

p-12

!Oc

t-12

!No

v-12

!De

c-12

!Ja

n-13

!Fe

b-13

!Ma

r-13!

Apr-1

3!Ma

y-13

!

USD

milli

ons!


Turbines, Generators, & Power TransmissionValue of Shipments

$3,400!

$3,600!

$3,800!

$4,000!

$4,200!

$4,400!

$4,600!

$4,800!

$5,000!

Jan-

12!

Feb-

12!

Mar-1

2!Ap

r-12!

May-

12!

Jun-

12!

Jul-1

2!Au

g-12

!Se

p-12

!Oc

t-12

!No

v-12

!De

c-12

!Ja

n-13

!Fe

b-13

!Ma

r-13!

Apr-1

3!Ma

y-13

!

USD

milli

ons!

81Machinery Manufacturing

-1.7%

$48bCY 2012

+11.5%2013 share of machinery


2013 vs 2012

Market Size

Market Share

Growth Rate

Industrial Machinery ManufacturingValue of Shipments

$2,700!

$2,900!

$3,100!

$3,300!

$3,500!

$3,700!

$3,900!

Jan-

12!

Feb-

12!

Mar-1

2!Ap

r-12!

May-

12!

Jun-

12!

Jul-1

2!Au

g-12

!Se

p-12

!Oc

t-12

!No

v-12

!De

c-12

!Ja

n-13

!Fe

b-13

!Ma

r-13!

Apr-1

3!Ma

y-13

!

USD

milli

ons!

82Machinery Manufacturing

+16.4%

$40bCY 2012

+10.5%2013 share of machinery


2013 vs 2012

Market Size

Market Share

Growth Rate

The Current State of America’s Computer & Electronic Product


83

Computer & Electronic Product ManufacturingNAICS 334

WORLDWIDE OVERVIEWCompanies in this industry manufacture computers, computer peripherals, telecommunications, audio and video, semiconductor, measurement and control, and other related equipment. The global computer & electronic product (C&EP) manufacturing industry generates more than $2 trillion in annual revenue. Top producers include China, USA, and Germany. Industry experts are forecasting moderate growth over the next two years.

Demand across the broad CP&E manufacturing sector depends on technological advancement, level of consumer spending, and ever-expanding data storage requirements of both businesses and consumers.

SOURCE: Hoovers

$2 trillionAnnual revenue generated

by all global C&EP manufacturers

16%Approximate United States share of worldwide C&EP manufacturing market

12,500Number of United States

C&EP manufacturing companies

84

Computer & Electronic ProductsNAICS 334

Navigational, Measurement & Control Instruments, and Electromedial‣ Electromedial & electrotherapeutic

apparatus‣ Search, detection, navigational,

aeronautical, & nautical systems‣ Automatic environmental control‣ Industrial process control

instrumentation‣ Laboratory instruments‣ Fluid meters & electricity testing

devices

Magnetic & Optical Media‣ Optical recording‣ Software, compact discs, tapes,

etc.

Computer & Peripherals‣ Electronic computer‣ Computer storage devices‣ Computer terminals

Communications Equipment‣ Telephone Apparatus‣ Radio & TV broadcasting‣ Wireless communications

equipment

Audio & Video Equipment

Semiconductor & Other Electronic Components‣ Semiconductor‣ Printed circuit boards‣ Capacitors, resistors, &

connectors

-0.1%

$262bUSA 2012




New Orders

Market Share

Growth Rate

85

Transportation EquipmentValue of Shipments, by sub industry, 2013 (Jan - May)

Computer & Electronic EquipmentMarket Share per Value of Shipments

Computer &Peripheral

8.4%

Navigational, Measurement & Control,

and Electromedial37.4%

Communications14.3%

Semiconductor & All Other

39.9%

Raw data extracted from the June 2013 M3 Report, produced by the U.S. Census Bureau 86

Computer & Electronic ProductsMarket Share per Employment Level

Raw data extracted from the June 2013 Employment Situation Report, produced by

the U.S. Bureau of Labor Statistics

Other4%

Communications10%

Computers & Peripheral Equipment

15%

Semiconductors & Electronic

Components35%

Electronic Instruments

37%

87



•$597 billion in annual sales, down 1.3% from prior year

•Operating income up substantially, net income down sharply

•Stockholders’ equity rose significantly in 2012 Increased net working capital

88

Computer & Electronic ProductsIncome Statement Index Comparison


Dec 2013Dec 2003

Net Sales

4.4x

+134%Dec ’12 to Dec ’03

4.0x4.0 times faster growth rate than has revenue since ’03

4.4 times faster growth rate than has revenue since ’03

Op Income

Net Income

89

57 134

133.6


74.6


0.8% 10.1%

9.2%

Operating Profit3.9% 24.4%

23.2%

Return on Sales

1.3% 9.3%

7.7%


47

Cash Cycle, days


1.39

1.54 1.86

1.68

Current Ratio

Computer & Electronic Products Dashboard

90


64%

$267k $316k

$314k


$337k $550k

$550k


81.0 100.0

81.0


88.7

Export Index

1.26 1.71

1.71


4.58 7.32

7.31


88.9 100.0

89.5


1,082k

Employment Level 91

Computer & Electronic Products DashboardMashburn Ranking: 6/12

64%

Computer & Electronic ProductsEmployment Situation Report Major Index Comparison


June 2013

March 2006

-2.2%


+1.0%

Employee Level

Since March ’06

Weekly Hours

Since March ’06

Hourly Earnings

92

Computer & Electronic ProductEmployee Situation Indexes by Sub-industry


Hourly Earnings IndexEmployee Level Index

Computer & peripherals Communications Electronic instruments Semiconductors

May 2013

Mar 2006May 2013

Mar 2006

93

PPI versus CPI, Index 2009 -JulyComputer and Peripheral Products

Consumer Price Index, CPI

Producer Price Index, PPI

June 2013

July 2009

-29.4%Decrease since recession

PPI

-17.9%Decrease since recession

CPI

Takeaway: the cost to produce computer & peripheral products has decreased more than the price passed on to consumers has decreased

94

Computer & Electronic ProductsM3 Report Major Index Comparison

Unfilled Orders IndexNew Orders IndexValue of Shipments IndexTotal Inventories Index Q2 2013

Q1 2012

-0.8%

+6.2%Q2 ’13 vs. Q4 ’11

-5.0%Q2 ’13 vs. Q4 ’11

Unfilled Orders

New Orders

Q2 ’13 vs. Q4 ’11

Value of Shipments

95

$9,500!

$10,000!

$10,500!

$11,000!

$11,500!

Jan-

12!

Feb-

12!

Mar-1

2!Ap

r-12!

May-

12!

Jun-

12!

Jul-1

2!Au

g-12

!Se

p-12

!Oc

t-12!

Nov-

12!

Dec-

12!

Jan-

13!

Feb-

13!

Mar-1

3!Ap

r-13!

May-

13!

USD

milli

ons!

-9.4%

$131bCY 2012

37.4%2013 share of C&EP


2013 vs 2012

Market Size

Market Share

Growth Rate

Computer & Electronic Product (C&EP) Manufacturing

Navigational, Measurement & Control, and ElectromedicalValue of Shipments

96

$3,500!

$3,600!

$3,700!

$3,800!

$3,900!

$4,000!

$4,100!

$4,200!

Jan-

12!

Feb-

12!

Mar-1

2!Ap

r-12!

May-

12!

Jun-

12!

Jul-1

2!Au

g-12

!Se

p-12

!Oc

t-12

!No

v-12

!De

c-12

!Ja

n-13

!Fe

b-13

!Ma

r-13!

Apr-1

3!Ma

y-13

!

USD

milli

ons!

5.1%

$45bCY 2012



2013 vs 2012

Market Size

Market Share

Growth Rate

Computer & Electronic Product (C&EP) Manufacturing

Communications Equipment ManufacturingValue of Shipments

97

Computer & Peripheral EquipmentValue of Shipments

$2,100!

$2,200!

$2,300!

$2,400!

$2,500!

$2,600!

$2,700!

$2,800!

$2,900!

Jan-

12!

Feb-

12!

Mar-1

2!Ap

r-12!

May-

12!

Jun-

12!

Jul-1

2!Au

g-12

!Se

p-12

!Oc

t-12

!No

v-12

!De

c-12

!Ja

n-13

!Fe

b-13

!Ma

r-13!

Apr-1

3!Ma

y-13

!

USD

milli

ons!

-8.6%

$30bCY 2012



2013 vs 2012

Market Size

Market Share

Growth Rate

Computer & Electronic Product (C&EP) Manufacturing98

Semiconductor & All Other C&EPValue of Shipments

$9,300!

$9,800!

$10,300!

$10,800!

$11,300!

$11,800!

$12,300!

$12,800!

Jan-

12!

Feb-

12!

Mar-1

2!Ap

r-12!

May-

12!

Jun-

12!

Jul-1

2!Au

g-12

!Se

p-12

!Oc

t-12

!No

v-12

!De

c-12

!Ja

n-13

!Fe

b-13

!Ma

r-13!

Apr-1

3!Ma

y-13

!

USD

milli

ons!

1.7%

$135bCY 2012



2013 vs 2012

Market Size

Market Share

Growth Rate

Computer & Electronic Product (C&EP) Manufacturing99

The Current State of America’s Electrical Equipment, Appliance, & Component Manufacturing Market

100

Electrical Equipment, Appliance, & Component Manufacturing

NAICS 335

WORLDWIDE OVERVIEWElectric Lighting: Companies in this industry manufacture electric light bulbs and tubes as well as lighting fixtures, lamp shades, and other components and parts. Demand depends primarily on residential, industrial, and commercial construction activity. The industry is concentrated: the largest 50 companies account for about 70 percent of revenue. The US lighting equipment manufacturing industry includes about 1,000 companies with combined annual revenue of about $12 billion. High growth is forecast for the next two years. Key growth drivers include an increase in new construction and renovations, as well as growing popularity of energy-efficient lighting.

Household Appliances: Companies in this industry manufacture large appliances such as stoves, ovens, refrigerators, and washers and dryers, and small appliances including vacuum cleaners, fans, humidifiers, and dehumidifiers, and toaster ovens. The global household manufacturing industry generates about $160 billion in annual revenue. The European Union accounts for about $73 billion; China for about $13 billion. The US household appliance manufacturing industry consists of about 300 companies with combined annual revenue of about $18 billion. The output of the appliance manufacturing industry is expected to grow at a low rate over the next two years. Competition from low-cost imports is a major challenge. Demand is driven by growth in consumer income and by home sales.

Electrical Equipment: Companies in one segment of this industry manufacture electric motors, power generators, and motor generator sets. The global motor and generator manufacturing industry has revenue of about $100 billion annually. Another segment manufactures industrial controls and control accessories such as relays and motor starters and controllers. Top countries for industrial control products manufacturing include China, Germany, Japan, South Korea, and the US -- countries with strong levels of overall industrialization. However, developing markets are gaining in worldwide market share.

SOURCE: Hoovers

$1 trillionAnnual revenue

generated by all global EEA&C manufacturers

11%Approximate U.S. share of

worldwide EEA&C manufacturing market

>3,000Number of United States

EEA&C manufacturing companies

101

Electric Lighting Equipment‣ Lamp bulbs & parts‣ Lighting fixtures

Household Appliances‣ Small electrical appliances‣ Major appliances‣ Cooking appliances‣ Refrigerators & home freezers‣ Laundry equipment

Electrical Equipment‣ Power, distribution, &

transformer‣ Motor & generator‣ Switchgear & switchboard

apparatus‣ Relay & industrial control

Other Electrical Equipment & Components‣ Battery‣ Communication & energy wire

& cable‣ Fiber optic cable‣ Wiring devices‣ Carbon & graphite products 0.3%

$123bUSA 2012




New Orders

Market Share

Growth Rate

Electrical Equipment, Appliance, & Component Manufacturing

NAICS 335

102

Electrical Equipment, Appliances, & ComponentsMarket Share per Value of Value of Shipments, USA


All Other34%

Electrical Equipment

32%

Household Appliance

16%

Battery Manufacturing

10%

Electric Lighting

8%CY 2012 Value of Shipments

$123 billion

103

Electrical Equipment, Appliances, & ComponentsMarket Share per Employment Level, USA


June ʼ13 Employment Level

389 thousandAll Other

32%

Electrical Equipment

36%

Household Appliance

14%

Battery Manufacturing

7%

Electric Lighting

12%

104

Electrical Equipment, Appliances, & ComponentsValue of Shipment by Sub-Industry

$10.0!$10.5!$11.0!$11.5!$12.0!$12.5!$13.0!$13.5!$14.0!

CY 2003!

CY 2004!

CY 2005!

CY 2006!

CY 2007!

CY 2008!

CY 2009!

CY 2010!

CY 2011!

CY 2012!

USD,

billi

ons!

Electric Lighting Equipment!

$17.5!

$18.5!

$19.5!

$20.5!

$21.5!

$22.5!

$23.5!

$24.5!

CY 2003!

CY 2004!

CY 2005!

CY 2006!

CY 2007!

CY 2008!

CY 2009!

CY 2010!

CY 2011!

CY 2012!

USD,

billi

ons!

Household Appliance!

$28.0!$30.0!$32.0!$34.0!$36.0!$38.0!$40.0!$42.0!$44.0!

CY 2003!

CY 2004!

CY 2005!

CY 2006!

CY 2007!

CY 2008!

CY 2009!

CY 2010!

CY 2011!

CY 2012!

USD,

billi

ons!

Electrical Equipment!

$33.0!

$38.0!

$43.0!

$48.0!

$53.0!

CY 2003!

CY 2004!

CY 2005!

CY 2006!

CY 2007!

CY 2008!

CY 2009!

CY 2010!

CY 2011!

CY 2012!

USD,

billi

ons!

All Other!

105


•$196 billion in annual sales, slightly up over 2011

•Modest increases in operating and net income margin

•More cash on hand, more investment level

•Gains in Stockholders’ equity NWC


Electrical Equipment, Appliances, & ComponentsIncome Statement Index Comparison

Net Sales

20%

+7%Dec ’12 to Dec ’03

20%3 times faster growth rate than has revenue since ’03

3 times faster growth rate than has revenue since ’03

Op Income

Net IncomeOperating Income IndexNet Sales IndexNet Income Index

Dec 2013

Dec 2003

107

73 101

87.3


80.7


58 80

74.4

Cash Cycle, days


0.86

1.00 1.32

1.31

Current Ratio

Electrical Equipment, Appliances, & Components Dashboard

108

5.2% 12.8%

6.5%

Operating Profit8.6% 17.9%

Return on Sales

14.3%

4.8% 10.5%Return on Assets

5.7%


58%

100.6 119.8

119.4


113.7

Export Index

100.0 139.0

138.5

Producer Price Index354k 475k

364k

Employment Level

$405k $512k

$489k

Net Sales per Employee$221k $334kValue of Shipments

per Employee

$334k

109

1.30 1.69

1.61


1.80 2.50

2.40


Electrical Equipment, Appliances, & Components DashboardMashburn Ranking: 9/12

58%


+39%

+52%CY 2012 vs. CY 2003

+24%CY 2012 vs. CY 2003

Unfilled Orders

New Orders

CY 2012 vs. CY 2003

Total Inventories

Electrical Equipment, Appliances, & ComponentsM3 Index Comparison, 2003 through 2012

90!

100!

110!

120!

130!

140!

150!

160!

170!

CY 2003!

CY 2004!

CY 2005!

CY 2006!

CY 2007!

CY 2008!

CY 2009!

CY 2010!

CY 2011!

CY 2012!

M3 In

dex,

200

3!

110

Electrical Equipment, Appliances, & ComponentsM3 Index Comparison, 2013 vs. 2012

Q2 2013

Q1 2012


+2.3%

+1.3%Q2 ’13 vs. Q1 ’12

+1.6%Q2 ’13 vs. Q1 ’12

Unfilled Orders

New Orders

Q2 ’13 vs. Q1 ’12

Total Inventories

111

Electrical Equipment, Appliances, & ComponentsTotal Inventory by Stage, 2003 through 2012

20%!

25%!

30%!

35%!

40%!

45%!

CY 2003!

CY 2004!

CY 2005!

CY 2006!

CY 2007!

CY 2008!

CY 2009!

CY 2010!

CY 2011!

CY 2012!

Perc

ent o

f Tot

al In

vent

ory!

Material & Supplies Inventory! Work in Process! Finished Goods!

Trending down since ‘07

Work in Process

Trending up since ‘07

Materials & Supplies

Flat since ‘07

Finished Goods

112

Electrical Equipment, Appliances, & ComponentsEmployment Situation Report Major Index Comparison

+30%

-16%Since March ’06

Flat

Employee Level

Since March ’06

Weekly Hours

Since March ’06

Hourly Earnings


June 2013

March 2006

113

Electrical Equipment, Appliances, & ComponentsEmployment Level Indexes by Sub-industry


Electrical equipment All other EEA&C Electric lighting Household appliances

June 2013

Mar 2006


114

Electrical Equipment, Appliances, & ComponentsProducer Price Index (PPI) Trend

+34%Since Dec ’04

PPI

100!

105!

110!

115!

120!

125!

130!

135!

140!

CY 2004!

CY 2005!

CY 2006!

CY 2007!

CY 2008!

CY 2009!

CY 2010!

CY 2011!

CY 2012!

115

Electrical Equipment, Appliances, & ComponentsProducer Price Index (PPI) versus Consumer Price Index (CPI)

+20%Since Dec ’04

PPI

+2%Since Dec ’04

CPI

Household Appliance

CY 2004!

CY 2005!

CY 2006!

CY 2007!

CY 2008!

CY 2009!

CY 2010!

CY 2011!

CY 2012!

PPI, Household Appliance MFG! CPI, Household Appliances!

Further separation between PPI and CPI continues in 2013

Mar-12! May-12! Jul-12! Sep-12! Nov-12! Jan-13! Mar-13! May-13!

PPI, Household Appliance MFG! CPI, Household Appliances!

116

Electrical Equipment, Appliances, & ComponentsProducer Price Index (PPI) versus Consumer Price Index (CPI)

+16%CY ’12 vs. CY ’06

Import Index

+11%CY ’12 vs. CY ’06

Export Index

CY 2006! CY 2007! CY 2008! CY 2009! CY 2010! CY 2011! CY 2012!

Import Index! Export Index!

117

The Current State of America’s Transportation Equipment


118

Transportation Equipment ManufacturingNAICS 336

WORLDWIDE OVERVIEWCompanies in this industry manufacture transportation equipment, including motor vehicles and parts, aircraft and other aerospace products, ships and boats, and railroad rolling stock. The global transportation equipment manufacturing industry generates as much as $4 trillion in annual revenue. Leading transportation equipment-producing countries include Brazil, China, France, Germany, India, Italy, Japan, South Korea, and the US. Low growth is forecast for the next two years.Demand is driven by employment and interest rates, growth in consumer income, military budgets, and the overall economic climate. The profitability of individual companies depends on manufacturing efficiency, technical expertise, and product quality. Large companies enjoy economies of scale in manufacturing and purchasing, as well as advantages in marketing and distribution. Small companies can compete by specializing in niche markets.SOURCE: Hoovers

$4 trillionAnnual revenue generated by all global transportation equipment manufacturers

20%Approximate U.S. share of worldwide transportation

equipment manufacturing market

12,000Number of United States transportation equipment manufacturing companies

119

Motor Vehicle‣ Automobile‣ Light truck & utility‣ Heavy duty truck

Motor Vehicle Body & Trailer‣ Body‣ Truck trailer‣ Motor home‣ Travel trailer & camper

Motor Vehicle Parts‣ Engine‣ Electrical‣ Steering & suspension‣ Brake system‣ Transmission‣ Seating & interior‣ Metal stamping

Aerospace Product & Parts‣ Aircraft‣ Aircraft engine‣ Guided missile & space vehicle

Railroad Rolling Stock

Other Transportation Equipment‣ Motorcycle & bicycle building‣ Military armored vehicle

Ship & Boat Building

Transportation Equipment ManufacturingNAICS 336

4.3%

$805bUSA 2012




New Orders

Market Share

Growth Rate

120

Transportation Equipment ManufacturingMarket Share per Value of Shipments

Auto16%

Misc7%

Other14%

Bodies & Parts28%

Light Truck19%

NondefenseAircraft

16%

Defense Aircraft

7%

Ships & Boats4%

Heavy Truck3%

Raw data extracted from the June 2013 M3 Report, produced by the U.S. Census Bureau 121

Transportation Equipment ManufacturingMarket Share per Employment Level

Aerospace Product & Parts34%

Motor Vehicle Parts33%

Motor Vehicle12%

Ships & Boats12%

Motor Vehicle Bodies & Trailers

8%

Railroad Stock4%

Raw data extracted from the June 2013 Employment Situation

Report, produced by the U.S. Bureau of Labor Statistics

122


•$745 billion in annual sales•Sales costs, and op income up,

and net income down•More cash on hand, less

investment level•Total assets up 9.1%, total

liabilities up 12.8%•Stockholders’ equity is flat


Transportation Equipment ManufacturingIncome Statement Index Comparison


Dec 2013Dec 2003

Net Sales

1.4x

+28%Dec ’12 to Dec ’03

4.2x4.2 times faster growth rate than has revenue since ’03

1.4 times faster growth rate than has revenue since ’03

Op Income

Net Income

124


0.74

0.96 1.36

1.27

Current Ratio

-3.7% 7.1%

6.2%

Operating Profit-7.6% 8.6%

7.6%

Return on Sales

49 112

74

Cash Cycle, days-2.9% 8.1%

5.3%

Return on Assets

68 104

103.4


73.8


Transportation Equipment Dashboard

125


83%

$372k $518k

$518k


$432k $659k

$659k


99.9 112.6

111.8


117.9

Export Index

1.09 2.02

1.70


7.62 19.47

14.68


99.8 116.0

115.6


1,496k

Employment Level 126

Transportation Equipment DashboardMashburn Ranking: 1/12

83%

Transportation Equipment ManufacturingEmployment Situation Index Comparison


June 2013

March 2006

17.0%


+2.2%

Employee Level

Since March ’06

Weekly Hours

Since March ’06

Hourly Earnings

127

Transportation Equipment ManufacturingEmployee Situation Indexes by Sub-industry


Hourly Earnings Index

May 2013Mar 2006May 2013

Mar 2006


Motor vehicle bodies & trailers Motor vehicle parts Motor vehicle Aerospace

128



June 2013

July 2009

New & Used Motor Vehicles

PPI versus CPI

123.0!

125.0!

127.0!

129.0!

131.0!

133.0!

135.0!

137.0!

139.0!

107.0!

108.0!

109.0!

110.0!

111.0!

112.0!

113.0!

114.0!Motor Vehicle Parts

June 2013

July 2009



+5.6%

+8.5%

Increase since recession

PPI


CPI

+4.7%

+9.5%


PPI


CPI

129

Autos, Trucks, & SUVs ManufacturingM3 Report Index Comparison


May 2013Jan 2012

3.4%

+18.4%May ’13 vs. Jan ’12

+21.8%May ’13 vs. Jan ’12

New Orders

Value of Shipments

May ’13 vs. Jan ’12

Total Inventories

130

Motor Vehicle Bodies, Trailers, & PartsM3 Report Major Index Comparison


May 2013

Jan 2012

+4.0%

+5.7%May ’13 vs. Jan ’12

-4.4%May ’13 vs. Jan ’12

New Orders

Unfilled Orders

May ’13 vs. Jan ’12

Value of Shipments

131

$17,900!$18,100!$18,300!$18,500!$18,700!$18,900!$19,100!$19,300!$19,500!$19,700!

Jan-

12!

Feb-

12!

Mar-1

2!Ap

r-12!

May-

12!

Jun-

12!

Jul-1

2!Au

g-12

!Se

p-12

!Oc

t-12

!No

v-12

!De

c-12

!Ja

n-13

!Fe

b-13

!Ma

r-13!

Apr-1

3!Ma

y-13

!

USD

milli

ons!

Motor Vehicle Bodies, Trailers, & Parts Value of Shipments

Transportation Equipment Manufacturing

3.7%

$221bCY 2012

28.4%2013 share of

transportation equipment manufacturing market

2013 vs 2012

Market Size

Market Share

Growth Rate

132

Automobile ManufacturingValue of Shipments

$7,500!

$8,000!

$8,500!

$9,000!

$9,500!

$10,000!

$10,500!

$11,000!

Jan-

12!

Feb-

12!

Mar-1

2!Ap

r-12!

May-

12!

Jun-

12!

Jul-1

2!Au

g-12

!Se

p-12

!Oc

t-12

!No

v-12

!De

c-12

!Ja

n-13

!Fe

b-13

!Ma

r-13!

Apr-1

3!Ma

y-13

!

USD

milli

ons!


24.8%

$107bCY 2012

15.8%2013 share of


2013 vs 2012

Market Size

Market Share

Growth Rate

133

Light Truck & Utility Vehicle ManufacturingValue of Shipments

$10,000!

$10,500!

$11,000!

$11,500!

$12,000!

$12,500!

$13,000!

Jan-

12!

Feb-

12!

Mar-1

2!Ap

r-12!

May-

12!

Jun-

12!

Jul-1

2!Au

g-12

!Se

p-12

!Oc

t-12!

Nov-

12!

Dec-

12!

Jan-

13!

Feb-

13!

Mar-1

3!Ap

r-13!

May-

13!

USD

milli

ons!


13.0%

$136bCY 2012

18.5%2013 share of


2013 vs 2012

Market Size

Market Share

Growth Rate

134

Nondefense Aircraft ManufacturingValue of Shipments

$9,200!

$9,700!

$10,200!

$10,700!

$11,200!

$11,700!

$12,200!

$12,700!

Jan-

12!

Feb-

12!

Mar-1

2!Ap

r-12!

May-

12!

Jun-

12!

Jul-1

2!Au

g-12

!Se

p-12

!Oc

t-12

!No

v-12

!De

c-12

!Ja

n-13

!Fe

b-13

!Ma

r-13!

Apr-1

3!Ma

y-13

!

USD

milli

ons!


3.9%

$127bCY 2012

16.0%2013 share of


2013 vs 2012

Market Size

Market Share

Growth Rate

135