2011 Annual Report

MTI Delivers Value at Every Level

MTI By the Numbers57 Member Companies • 5 Annual TAC Meetings • 39 Funded Projects from 2006–201196 Potential Projects • 7 Approved AmeriTAC Projects Over the Last 3 Meetings51 Active Technical Projects from Three Regional TACs • 78 Average Attendance at AmeriTAC *

850 TAC Forum Topics Discussed * • 160 Online Forum Topics • 4 New Books Being Published

From identifying important problems to making solutions to them available quickly, MTI creates unique,

enduring, multifaceted value for its member companies.

Whether it’s through online forums or face-to-face meetings, training seminars or technical projects, our members create, fund and share this growing

pool of knowledge that benefits each company individually, and all collectively.

How important is MTI? Members report that when they face a mission-critical problem and they find a solution within the MTI network of resources, it saves them time and money.

That’s an impact felt right at the bottom line.

Annual Highlights 02

MTI’s Vision 06

Benefits of Membership 06

MTI’s Mission 06

Report of the Chair –

Board of Directors 07

Report of the AmeriTAC Chair 08

Report of the AsiaTAC Chair 09

Member Companies &

Designated Representatives 10

Report of the EuroTAC Chair 12

Executive Director’s Letter 13

Board of Directors 14

Directors 15

St Louis Staff 15

Technical Advisory Councils 16

Financial Statements 18

Membership Dues Information 21

MTI Gives Members Access to an Ever-Expanding Network of Knowledge

* From 2006–2011

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MTI maximizes member asset performance by providing global leadership in materials technology to improve safely, reliability, sustainability and profitability.

Update to the Cleaning ManualThe existing MTI publication on cleaning of process equipment and piping is well respected and routinely used by many of the member company personnel. Since the original book was published, other techniques for cleaning have been developed and updating the manual to include these new systems and to document the improvements to the existing systems is needed.

MTI Fellow, Dr. Sandy Sharp, has completed the draft manuscript for the new Supplement to MTI Publication No 51 – “Cleaning of Process Equipment and Piping.” This draft manuscript is currently being reviewed by technical specialists with knowledge in the various cleaning methods.

Seventeen subjects are being added or updated. • Pre–OperationalCleaning • CleaningofReactiveMetals • WaterJetCleaning • SodiumBicarbonateCleaning • CitricAcidCleaning • CleaningUsingChelationTechniques • RapidChemicalTestingDuringCleaning • CleaningofGlassLinedEquipment • CleaningPipelineswithMaterialsDeliveredbyHigh VelocityGasStreams • SonicResonanceCleaning • CleaningEquipmentinReactiveChemicalServices suchasOxygen,HydrogenPeroxide,ChlorineandFood GradeChemicals • ThermalCleaning • DryIceBlasting • LiquidNitrogenJetting • InhibitorsUsedinCleaning • KeystoSuccessfulCleaningOperations

The draft manuscript is already on the MTI web site and available for MTI members to download and use now. The published document is projected to be available in 2012.

Annual HighlightsAsiaTAC 2011 ThefifthannualAsiaTACwasheld in Shanghai, China on 20–23 September 2011. The first two days were devoted to a training class entitled “TechnicalWorkshoponFasteners.” The course materials and delivery were in both English and Chinese. The instructors of the workshop were two well–respected international fastener experts, Salim Brahimi,PresidentofIBECAinMontrealCanadaandDr.BaohongCaoofInfasco,amajorfastenerproducerlocatedin Marieville, Quebec. The workshop provided a broad understanding of topics relating to threaded metal fasteners, ranging from materials, manufacturing, product standards, fastening strategies, applications engineering and failure analysis. The workshop that attracted more than 60 people, mostly member company engineers and some Chinese governmental institution and fastener producer personnel, was rated highly by the attendees.

Onthethirdandfourthday,theAsiaTAC2011includedageneralAsiaTACbusinessmeetingandpaneldiscussions,forum and project development committee meetings. Five panel discussions with subjects recently defined according to major areas of member interests were organized. These panels covered the subjects of:

1. Metallurgy,Metallography,PhysicalFailureAnalysis

2. Corrosion—Analysis,Inspection,andProtection

3. MechanicalIntegrityandReliability,ConditionAssessmentEquipmentandParts,FitnessforService

4. NDTandIn–serviceInspection,Regulations, New Technology and

5. Applicationofnon-metalsinchemicalandpetrochemicalindustry,includingFRP,Plastics, Coating, and Composition

OnSeptember23,asanewinitiative,inseparateprojectdevelopment committee meetings that followed basically theAmeriTACPDCmodel,membersweredividedintofour major subcommittees. Each subcommittee covered one of the first four subjects of the panel discussions on September 22 and the members brain stormed on ideas ofpossibleprojects.Aftertwoandhalfhoursofvividandproductive discussions, the leaders of these subcommittees thenreportedtothereconvenedAsiaTACthepossibleprojectideas.Usingtheseideas,AsiaTACisexpectedto

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generate several potential projects that would benefit theAsiaTACmembercompanies.

Intheafterlunchsession,theAsiaTACleadership team, the PDC leaders, and MTI staff members present atAsiaTACgottogethertodiscussandreviewthefuturedirectionofAsiaTACincludingthepreliminaryplan for 2012.

Repair Guides for FRP and Lined EquipmentMTI is publishing, in 2011, two manuals dealing with damage assessment and repairofbothFRPandLinedEquipment. The manuals will be printed using high quality paper in a spiral binder so that the manuals can be easily brought to the field and accessed by plant operations and/or maintenance personnel.

Bolting in ChinaAfteralongperiodofinception,projectdefiningandplanning,thepotentialproject“ChinaBolting”hasfinallyevolved into a MTI training class entitled “Technical WorkshoponFasteners.”Theproject,approvedbytheMTIBoardofDirectorsinJune2011,isthefirstfundedprojectdevelopedentirelybyanAsiaTACteam.ThetrainingnowsetforSeptember20and21,2011inShanghai,isbi-lingualandSalimBrahimi,PresidentandChiefEngineerofIBECAinMontrealandDr.BaohongCaoofInfascoofMarieville,Quebec were contracted as the instructors. This unique program is designed to provide a broad understanding of topics relating to threaded metal fasteners, ranging from materials, manufacturing, product standards, fastening strategies, applications engineering and failure analysis. It is anticipated that this workshop will attract not only many of the practicing engineers of the member companies but also some key Chinese governmental institutions and fastener producer personnel.

Hydride Detection in TitaniumFollowing last year’s successful completion of a project that provided a better understanding of the conditions leading to the diffusion of hydrogen and subsequent formation of hydrides, MTI is initiating another project in which we will attempt to identify a non – destructive examination procedure to detect hydrogen in titanium tubing. If successful, every MTI member will have the opportunity to use this procedure.

New and Improved Elastomer TrainingThenewestAdvancedElastomerTrainingCoursewaspresentedtothemembershipatAmeriTAC104heldinSanAntonio,Texas.Thecourseisdesignedtoeducatemembers in the selection of elastomers for use as sealing elements. The course covers the basic chemical architecture of the elastomers, mechanical properties, chemical compatibility, thermal limits, compounding, and failure mechanisms.RussSchnellandPaulTrillizioofDuPonttook the lead in modifying the DuPont Elastomer Course to include even more information on elastomers that were not currently included in the course that has been given in the past. This new course included information on many of the less expensive elastomers and on silicone based elastomers. Dow Corning’s Michael Dipino gave the portion of the course on silicon rubber based products and Victaulic’s Mark Sewell supplied even more insight into the more common elastomers. The course was well received by the members that took the course and was given to MTI members without charge. The course is available to MTI membersworldwideatTACmeetings.

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Annual HighlightsFRP Training SessionsMTIheldtwobi–lingualFRPInspectorsTrainingClassesinAsiaPacificregioninthepastfewyears.Thefirstclasswas held in Shanghai, China in conjunction with the AsiaTAC2008andthesecondclasswasheldinHongKonginApril2011.JuanBustilloswastheinstructorforboth these classes whose primary audience was the third partyFRPinspectorsalthoughmanymembercompanyrepresentatives benefited equally from these two–day sessions.ContinuingonthesuccessoftheseAsiantraining classes a new MTI project is being developed to deliversimilarsessionsinbothUSandEurope.Thenewproject is expected to seek formal funding later this year forthedeliveryoftwoclassesintheUSandoneclassinconjunctionwiththe2012EuroTACinEurope.Thetwo-dayUSsessionstobescheduledforthespringandfallof2012 are developed specifically for the third party inspectors aswellasmembercompanyemployeeswhiletheEuroTACsession also planned for 2012 will be developed as a one day session targeting the member company engineers.

GRANTA-Search Engine for MTI DocumentsNineteen additional MTI documents have been added to a searchable database of 39 of the most popular MTI publications.ThedatabasewasdevelopedbyGrantaandresides on the MTI website. The documents are searchable by keywords. The documents can be searched one at a time, by chosen groups of documents or all the documents.

The MTI website now has a button allowing members to go directlytoGrantaforsearchingdocuments.Thedocumentsare only available on the members side of the MTI website.

Additionaldocumentswillbe added as published from completed MTI projects and as requested by MTI members to meet their needs.

Gordon Conference Report The70thsessionoftheGordonConferencesonHighTemperatureCorrosionwasheldJuly24thtoJuly28thatColbyCollegeinNewLondon,NH.Theconferenceisbyinvitation or application with a limited attendance.

Bytradition,onlytheagendaispublished.Thetalksare not published. The purpose of the conference is to foster discussion of new work and a venue to propose new theories.Akeyelementoftheconferenceisnetworking.

Asanexampleofnetworking,personnelfromDECHEMAattendedandAssociateDirectorEmoryFordintroducedthemtoseveralmembersofMTI.DECHEMAhastwo projects with MTI and this was an opportunity for discussion of those projects in an informal but in a decided technically environment.

This year there was a poster session for students on the Saturday and Sunday prior to the conference. Prizes were awarded for the three best posters. MTI made a financial contributiontothisyear’sGordonConference,anditwas used in part to fund the student session. The students remained throughout the whole conference.

TheChairoftheGordonConferencerecognizedMTIforits contribution. Included in the Chair’s remarks was the fact that MTI offers a scholarship in corrosion. Subsequent to the meeting I received inquiries on the scholarship. I supplied the link to the scholarship to those that inquired.

TheGordonConferenceonHighTemperaturecorrosionis held every two years and by tradition always at Colby College.Attendeesstayinthedormsandeatcommunalmealsinthecafeteria.Onalternateyearsthereisaconference on aqueous corrosion.

Becausethestudentpostersessionwassosuccessful,plansarea already underway for a second poster session. MTI may provideacopyoftheMicrostructureAtlasasaprizeforthebestposteratthenextGordonConference.Thisyearthe prize was a gift certificate supplied by Springer, a book publisher.

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2011 MTI Bert Krisher Memorial ScholarshipThisyear’sscholarshipwasawardedtoUlrichPflanzwhorecentlyearnedaBachelor’sDegreeinSurfaceTechnologyandMaterialsScienceattheAalenUniversity,Ostwürttemberg,ineasternBaden–Württemberg,Germany.HewaspresentedtheawardbyMTIBoardMembers,PaulManning/HaynesInternationalandRobertSinko/EastmanChemicalatNACECORROSION2011.UlrichattendedMTI’sEuroTACmeetingInLeverkusen28–29Marchandpresented a paper on Development and Verification of a NewStressOrientedHydrogenInducedCrackingTestMethod.

Stress Corrosion CrackingThe revision of MTI’s publication #15, Stress Corrosion Crackingisunderway.Aprojectteamofmorethan30participants formed and a revising author was identified and selected. The author is one of the original authors, Dr. Dale McIntyre.

The team together with the revising author identified a proposed list of revisions and additions to the book.

The book is one of the classic MTI documents widely known within MTI and in the chemical industry outside of MTI. The revision will be of great value to MTI members and to the industry in general.

CRAs Seminar Five speakers from MTI member companies gave a seminar atAmeriTAC103inBaltimoreonhowrecentchangesin manufacturing processes for austenitic stainless steels affect their properties, microstructure, and surface quality. The seminar was well attended with about 50 attendees and, according to the seminar evaluation, extremely well received. Feedback by one attendee was typical of the evaluation, “There was such a clear and great focus on the technical content. It was refreshing to leave commercial considerations behind and just learn and review.”

Knowledge Management PDC Brainstorming TheKnowledgeManagementPDCheldathreehoureveningbrainstormingsessionatAmeriTAC105inJune.EileenChantofBechtEngineeringorganizedasurveythat was used to evoke ideas that will help to develop new projects and other activities of practical value to our membersandtotheCPI.Amongthe23ideasgenerated,the topic of “sustainability” generated the most interest. There was also a large amount of interest in new topics and methods for training and keeping up–to–date and following codes and regulations. These topics have been broken into groupsthatwillbeexploredbytheKnowledgeManagementPDC and other groups within MTI.

Thermal Spray SeminarInconjunctionwithAmeriTAC106inNashville,Tennessee, MTI will offer a half day seminar on Thermal Spray Coatings. This versatile and specialized industry offers a wide range of solutions to Materials Engineering wear and corrosion problems by applying a wide range of chemistries of metallurgy and ceramics to metal surfaces. Paul Eyre of DuPont will be taking the lead role in organizing the technical content of the program and will be presenting based on his years of experience applying these techniques tosolveMaterialsissuesatDuPont.AtrainingDVDoftheseminar will be produced and offered to MTI members for company training opportunities.

Large TanksMTI has funded a project to write a comprehensive report onLargeDiameterFRPStorageTanks.Thismanual,covering specifications, procurement, general design guidelines, fabrication and assembly of large diameter tanks willbewrittenbyMaverickAppliedScience,Inc.Industryuse of these types of tanks has increased greatly in recent years,andcurrentlynoindustrystandardsorBestPracticesexistforsuchlargediameterFRPstoragetanks.Thisprojectwill capture the current state–of–the–art, and will serve as a guide to improve safety, reliability and applicability of this technology to the entire industry.

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Benefits of MembershipMTI membership provides a variety of benefits that include:

• Accesstoanetworkofmaterialsengineeringspecialistswithmanyyears of experience in all facets of process industry materials engineering. The leverage provided by this network multiplies the capability of the members’ engineering staff for a fraction of the cost of a single engineer.

• MembersactivelyparticipateintheselectionanddefinitionofMTIprojects.Thisparticipationprovidesmembers an opportunity to ensure that the project meets their needs. This leveraged project system provides the members with access to projects in a variety of materials related fields and gives members a development capability they would not otherwise have.

• MembershaveimmediateaccesstoinformationbeingdevelopedbyMTIprojectsthatisnotavailabletonon–members.

• ParticipationintheTechnicalAdvisoryCouncilmeetingsheldeachyearisanexcellentsourceofpracticaltraining for engineers new to the process industry as well as for veterans who learn from each other during both project and forum discussions.

MTI’s MissionMTI’s role is increasingly important as materials options expand in number and complexity and as shortages of trained staff constrain operations.

Through membership, companies gain the knowledge they need to better develop, manage, and maintain green–field and retrofit construction projects, leading to greater efficiency, safety, reliability, sustainability and profitability.

Benefits: • Rapidandefficientsolutionstoproblems • Accesstoanexpertise-basednetworkthatincludessomeoftheworld’sforemostmaterialstechnologistsfor

immediate and vetted consultation • Apoolofcooperativeresearchfundingthatmultipliesthecollectedmembershipdues • Anopportunitytoselect,scope,andleadprojectsconductedbyothers • Privilegedaccesstointernallydevelopedinformationandprojectoutput • Asearchabledatabaseofmorethan30yearsofForumquestionsanddiscussion

Inaddition,MTIhelpsmembercompaniesachievebottom-linesavingsbytransferringexistingknowledgeintocommonlyused practices, conducting technology evaluation studies, and providing access to a network of materials experts to help with urgent problems.

The representatives of member companies who participate in MTI activities help to raise the knowledge base among diverse plantstaff,andoftenbecomethein-houseexpert(i.e.,the“go-toperson”)formaterialstechnologysolutions.Inaddition,the interaction among materials specialists and the leadership opportunities within MTI enhance career development.

MTI will be the process industries’ first choice for materials technology networking and solutions.

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Contrary to the typical politicians who promptly complain about the previous administration upon entering office, I have only good things to report about the health and vitality of the MTI organizationIinheritedfromDaleHeffnerandthepreviousMTIBoard.MTImembershiphasremained steady despite continued economic challenges throughout the world. In fact, new candidate member companies attend and express interest at most every meeting. The previous BoardandthededicatedMTIStaffdeservecreditfor the current condition of MTI.

Moving forward requires a path and a strategy. ThegreatNewYorkYankeecatcherYogiBerrasaid, “If you don’t know where you are going, you willwindupsomewhereelse!”Onceagain,pastand present Directors gathered last fall for what hasbecomeknownasthe“BaltimoreBrainstorm”to plot MTI’s future. The event generated 5 objectives with motivated groups pursuing each.

MAINTAIN AND EXPAND MEMBERSHIP AND MEMBER SERVICES OFFERED GLOBALLY – This effort brings focus to serving and retaining current members as well asidentifyingandcourtingnewmembers.Asalways, recruiting activities are centered on chemical producer companies who bring both technical expertise and demanding challenges (readprojectideas)totheorganization.Havinga membership weighted with such “producer” companies automatically makes MTI membership enticing to the best equipment fabricators and material suppliers whose complimentary expertise bringsfurthervaluetotheorganization.Alsowith too many supplier members, the MTI organization would become no different than the expositionflooratacorrosionconvention.

DEFINE AND PROMOTE THE VALUE OF MTI–Whilerelatedtothefirstobjectivesomewhat, the idea behind this effort has more of a marketing emphasis. Characterizing value of MTI membership creates the resources to maintain and expand membership. Consistently promoting that value via our newsletter and other communications tools strengthens our network and creates new opportunities for collaboration both inside and outside the organization.

INCREASE THE EFFECTIVENESS OF KNOWLEDGE TRANSFER – MTI’s business is creating knowledge and effectively transferring that knowledge for the benefit of its members, butinwhatform?Allforms!Knowledgeflowsthrough the organization verbally at meetings, in hardcopy products, via the MTI website and the TACforums.Withever–increasingdependenceon vetted high – quality electronic information, MTI must continue to excel at knowledge transfer.

IMPROVE PROJECT DEFINITION, SELECTION AND IMPLEMENTATION – The primary path of knowledge creation is via projects — the very heart and origin of MTI. This year, we celebrate the first funded project to come solelyfromAsiaTAC,andwecontinuetoseeEuroTACdevelopasaprojectandnetworkingtool instead of just a source of training for young engineers. Issues such as project size, scope and theusefulnessoftheRoadmapwillbeaddressed.

ENSURE MTI STAFF SUCCESSION – WiththemajorityofStaffofasimilarage,theorganization must put plans in place and set a course for continued leadership and success. There are many components to the term ‘Sustainability’, and this is one.

WiththesupportofmyVice–ChairMariaOestergaard,ourfellowDirectors,legalcounseland an outstanding group of committed individuals who constitute the MTI Staff, yourBoardofDirectorswillstrivetotake MTI toward continued success.

Inclosing,IwouldliketocongratulateBillFort(formerlyofShellGlobalSolutions)andMTIExecutiveDirectorJimMackiasthenewestMTIFellows.Bothtypifythequalitiesandcharacterexhibited by this esteemed group of individuals now numbering twelve. Many thanks for your contributions to the success and rich history of MTI.

Ed Naylor Chair, Board of Directors

Report of the Chair – Board of Directors

Report of the AmeriTAC Chair– Technical Advisory Council

Havinganinterestinhistory,I’vetakentheliberty of reviewing my predecessor’s annual reports and I find that change and challenge for MTI is addressed in every one of them. I find it interesting that although MTI constantly evolves, expands, and changes strategy, procedures, and manners of accomplishing tasks, it still remains true to its core values of bringing value to its membership. It does this by vetting and disseminating information, training, and networking. I feel honored to be elected by the TACmembershiptocarryonthistradition.Thank you!

SowhathaschangedtorTAC?We’velostafewmembers but we’ve also gained new members inthesetougheconomictimes.Wecurrentlyhave 56 companies in the organization and we are actively pursuing a plan laid out by the Boardforrecruitingnewmembers,especiallyproducer companies. The growth of both AsiaTACandEuroTACareexcitingtowatch.WehaveanewstrategicplanwithtwoGoalshavingdirectimpactonTAC,1.)IncreasingtheEffectivenessofKnowledgeTransferand2.)Improving the Project Identification, Selection, andImplementationProcesses.TACnowhasa full complement of Project Development Committees(PDCs)championsforall6PDCs.WeareplanningtostrengthenTACbydefiningthe functions of Champions for Project Teams and PDCs and holding training for those who volunteerforthosepositions.Lookingaheadtonext year, we have a challenge to formulate a new RoadmaptodefinewhereTACwantstogoanddiscoverthemeanstogetthere.TACindividualsshouldalsohaveaccesstoanewMTIWebsite in 2012.

SowhatstaysthesameforTAC?Theabilitytoget rapid and vetted information to help solve our companies’ materials problems is unchanged.

MTI still maintains the Forum on line for rapid questions and answers, in archived form to retrieve past information, and in lively discussions atourTACmeetings.OurTACStructuredForumsarestillbeneficialwithTAC104hostingapanelfromRiceUniversitytolearnabouttheNationalCorrosionCenterinHoustonandaseparate speaker to learn about the use of rubber liningsfortheCPI.TAC105presentedapaneldiscussion on the Design and Fabrication of ThickWalledVessels.TrainingstaysparamountwithanElastomerstrainingcourseatTAC104andaThermalSprayCoursescheduledforTAC106.WecontinuetohostMondayevening“Brainstorming”SessionstargetedtoaspecificPDC. This has proven to be a wonderful platform for generating projects.

Speaking of Projects, they continue to keep comingforthwith7approvedAmeriTACprojectsoverthelastthreemeetings.Withbusy work schedules and tight budgets for the Membership,MTIandTACleadershipcontinueto strive for changes that help its members on projects.OneoftheideasrecognizesaneedtoidentifyanddevelopproceduressothatTACrepresentativeswhoareunabletoattendTACmeetings may vote by proxy for projects.

In closing, I would like to thank all of the MTI members,MTIstaff,andtheBoardfortheirhelp.If you have questions or suggestions that you would like to discuss, please contact me or DavidBarber(AmeriTACViceChair).

RobertJ.Sinko AmeriTAC Chair

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Inthelasttwelvemonths,AsiaTACexperiencedfast and steady growth, partly due to the fast economic recovery and growth in the region of AsiaPacific.

AsiaTAC2010,heldinSeptember2010, was once again successful, with 73 people representing 24 member companies in attendance.Thatcompareswith18membercompaniesparticipatingin2008and20 member companies attending in 2009.

The 2010 meeting started with a technical training course on the subject of “Corrosion and itsPrevention,”deliveredbyBayerexpertMr.Zhinong Zhao. That class was followed by a full day of panel discussions focused on five different technical topics, addressing subjects of specific interest to participating member companies. The final day of the meeting provided a summary of AsiaTAC’sprojectdevelopmentefforts.

Ourorganizationhasalsoundergonesomechangesinthelastyear.WithformerAsiaTACViceChairMr.KnuthSchweierofBayerreturning to Europe, member company representativeselectedMr.AlbrechtGirgensohnofBayertofillthiskeyposition.Mr.Girgensohn’sparticipationhasgreatlystrengthenedAsiaTAC.

In another important development, we identified four technical areas of focus for ProjectDevelopmentCommittees(PDCs)andnominatedPDCLeadersforeach,including:• MetallurgyandPhysicalFailureAnalysis–RyanYang/AirProductsandChemicals

• CorrosionandCorrosionProtection–GuangbinRao/BASF

• MechanicalIntegrityandReliability– JudyYang/DuPont

• NDTandIn-serviceInspection– LuoGan/TheDowChemicalCompany

WeexpectthatthenewlyestablishedPDCswill draw members with similar interests into these specific areas to work and develop new projects together by having more focused project development efforts. This should allow us to develop more projects meeting the needs of our member companies in the future.

AttheJuneface–to–facegroupmeeting,member representatives participated in AsiaTAC’sprojectfundingapprovalprocessforthefirsttime.MTIAssociateDirectorJesseChenwaspresenttowitnessthevote,asAsiaTACmembersapprovedaFastenerQualitytrainingclassundertheChinaBoltingproject.Subsequently, funding for this project was formallyapprovedbyMTI’sBoardofDirectorsinitsJune2011meeting.Thisprojectnominationprocess was an exciting development as it enables AsiaTACtobemoreconfidentandefficientinobtaining funding necessary for the execution of projects of interests to the region.

AsiaTACheldasecondInspectorTrainingforFRPEquipmentsessioninHongKonginApril2011, which is the repeat of the same successful classconductedinShanghaiin2008.Thesecondsession attracted 24 participants from both China andSoutheastAsia,representing11MTImemberandnon-membercompanies.Onceagain,JuanBustillosprovidedthelectures,whichwereexpertlytranslatedside-by-sidebyHenryYeofDuPontandChakWongofBayer.

There are other training opportunities on the horizon. These include the Fastener Quality Training class mentioned above and other possible topics resulting from projects being workedonbyAsiaTAC,includingChinese/International Standard Comparison, Fitness for Service and others.

WeareactivelypreparingthenextAsiaTACinSeptember 2011. This is always our biggest event. Everyoneisenthusiasticaboutit.Withmoremember companies’ active participation, stronger team organization, and continued support from MTI, we are confident that this annual conference will be another successful event, and our organization will continue to gain momentum and grow.

HenryYe AsiaTAC Chair

Report of the AsiaTAC Chair– Technical Advisory Council

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ExxonMobil ChemicalBaytown, TexasB. J. Fitzgerald

Allegheny Technologies Incorporated

Pittsburgh, Pennsylvania C. A. Botti

Air Products and Chemicals, Inc.

Allentown, PennsylvaniaJ. Hoffman

AkzoNobelAmsterdam, The Netherlands

E. R. Naylor

Albemarle CorporationBaton Rouge, Louisiana

H. T. Wells

Det Norske Veritas Dublin, OhioC. E. Jaske

ELLETT Industries Ltd.Port Coquitlam, British Columbia

R. D. Gill

Celanese CorporationDallas, TexasA. H. Rakhe

Engineers India LimitedNew Delhi, IndiaV. R. Krishnan

The Dow Chemical CompanyMidland, Michigan

E. L. Liening

DuPont CompanyWilmington, Delaware

S. P. Springer

Dow CorningMidland, Michigan

M. Cook

Eastman Chemical CompanyKingsport, Tennessee

G. S. Whittaker

BASF CorporationFlorham Park, New Jersey

B. McCurry

Bayer Technology Services GmbH

Leverkusen, GermanyM. H. Renner

BPLondon, EnglandW. K. Blanchard

ConocoPhillips, Inc Houston, TexasD. R. McIntyre

Electro Chemical Engineering and Manufacturing Co.

Emmaus, PennsylvaniaD. K. Heffner

Dynamic MaterialsBoulder, Colorado

J. Banker

Cornerstone Chemical CompanyWaggaman, Louisana

D. McIntyre

Asahi Kasei CorporationToyko, JapanM. Nakahara

Air LiquideParis, France

J. Furtado

FMC CorporationPhiladelphia, Pennsylvania

S. Kesavan

Haldor Topsoe A / SLyngby, Denmark

M. J. L. Oestergaard

Chevron Energy Technology Company

Richmond, CaliforniaG. J. Kusinski

Haynes International, Inc.Kokomo, Indiana

P. E. Manning

Hellenic Petroleum S. A.Thessaloniki, Greece

I. A. Melas

Becht Engineering Co., Inc.Liberty Corner, New Jersey

E. Chant

Member Companies & Designated Representatives

Corrosion MaterialsBaker, Louisiana

R. A. Muro

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Lloyd’s Register Energy Americas, Inc.

Houston, TexasT. P. Munsterman

Sandvik Materials TechnologySandviken, Sweden

M. Senatore

Nickel InstituteToronto, Ontario

G. Coates

RathGibsonLincolnshire, Illinois

D. R. Moore

Rolled AlloysTemperance, Michigan

P. Whitcraft

Outokumpu, Inc.Schaumburg, Illinois

P-E. Arnvig

HoneywellMorristown, New Jersey

D. E. Kaye

Jiuli Hi-Tech MetalsHuzhou, Zhejiang, China

D. Lee

The Roberts CompanyWinterville, North Carolina

M. Eshelman

LyondellBasell IndustriesChannelview, Texas

K. Kirkham

PolycorpElora, Ontario Canada

D. Nolan

Suncor EnergyCalgary, Alberta Canada

J. Mitchell

Tricor Industrial, Inc.Wooster, OhioC. S. Young

SABICRiyadh, Saudi Arabia

H. Schrijen

P.A. Inc.Houston, Texas

O. Galloway

Saudi International Petrochemical Company

Jubail Industrial City, Saudi ArabiaA. Biggs

Praxair, Inc.Danbury, Connecticut

J. E. White

RL IndustriesFairfield, Ohio

B. M. Linnemann

Roben Manufacturing, Inc.Lakewood, New Jersey

K. Wyrough

Mitsui Chemicals, Inc.Tokyo, JapanH. Matsuda

Shell Global Solutions International B.V.

The Hague, The NetherlandsL. R. Hurst

Sumitomo Metal Industries, Ltd.Tokyo, Japan

H. Anada

Schmidt+Clemens GmbH+CoLindlar, Germany

D. Jakobi

VictaulicEaston, Pennsylvania

M. J. Sewell

Webco Industries, Inc.Sand Springs, Oklahoma

W. G. Bieber

TOTAL SAParis, FranceF. Dupoiron

Syncrude Canada Ltd.Fort McMurray, Alberta Canada

M. Anderson

Titanium Fabrication Corp.Fairfield, New Jersey

G. Dunn

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Report of the EuroTAC Chair– Technical Advisory Council

AsyouwillprobablyalreadyhavereadintheBoardofDirectorsChairreport,MTIiscontinually planning for the future. This is not just the case with regard to the “more general goals” as discussed by Ed Naylor, but this is also the situation with regard to activities within the different regions.

WhenlookingbackattherecentEuropeanmeeting, a number of phrases come to mind such as “well attended,” “interesting sessions,” and “lively discussion,” but one thing above all else stuck in my mind. To borrow a well known saying, “the only constant is change.”

The MTI organization in Europe is striving to evolveforanumberofreasons.Weareallpartof one MTI, and although most materials and corrosion-relatedissuesknownogeographicalboundaries, the way they are addressed can and does vary from region to region. The success of the organization can be measured by how well it serves the actual needs of its members, and the autonomy each region has been given within the MTI framework will allow us to do that, providing we continue to get the necessary input from the members.

The discussion and ideas obtained during the last meeting, such as more frequent but shorter meetings around a specific topic and allocating more time to discuss specific questions, problems or projects, have provided the Steering Team with a path forward in planning the type and the content of upcoming meetings in which the European members want to be involved. Ideally we need to achieve a balance between training opportunities for young engineers, specific training sessions and project team discussions while not forgetting to allow ample time for informal networking — another important aspect!

I am pleased to announce one important change toourorganization,thatNatalieGelderfromBASFwaselectedtothepositionofVice–Chair.AtthispointIwouldalsoliketoexpressmy

gratitudetoMariaOestergaardforallofherhard work and help during the last few years and would like to wish her well in her new role as Vice–ChairoftheBoardofDirectors.

Whileonthesubjectofchange,inmyroleasChairoftheWebsiteCommitteeIwouldliketomention that MTI is also currently in the process of completely revamping and updating the website. This is not something that is currently visible to any members, but behind the scenes, the architectural look and feel of the site is being adapted to make navigation and the transfer of information much easier. The MTI website is an integral part of the organization and many of the benefits of MTI membership including:

• Privilegedaccesstointernallydevelopedinformation and project output

• Asearchabledatabaseofmorethan30 years of Forum questions and discussion

Bothoftheseweb–centeredfeatureswill allow existing knowledge to be transferred intocommonlyusedpractices.Assuch,it also needs to move with the times and take advantage of new technologies and ideas. This isalong-termcommitment,andatvariousstagesduring the development, we will update you on the progress being made, starting in the Fall 2011 and finishing Phase 1 in Spring 2012.

Allinall,anumberofinterestingandimportantdevelopments will help us to adapt the challenges ahead!

Michael Turner EuroTAC Chair

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These are exciting and challenging times for MTI. There are over 40 active technical projects fromourthreeregionalTACs.EachyearweholdfiveTACmeetings:threeinNorthAmerica, one in Europe, and one in China. In addition, ourAsiaTACgroupholdsfiveface–to–face (f2f)meetingsonabimonthlyschedule.

Training is becoming a significant benefit forMTImembers.AsiaTACandEuroTACmeetings usually include a one – to two – day training program associated with their meetings. Additionaltrainingprogramsarescheduledonanas–neededbasis.ThemostrecentwasFRPInspectorTrainingconductedinApril2011inHongKong.WeareplanningadditionaltrainingprogramsinAsia,EuropeandNorthAmerica.

Oneofourgoalsistoimprovemembers’remoteaccess to our training programs on the Internet. The plan is to record then refine and format our training programs so that members can accessthemasnecessarywithouttraveling.Wewill be experimenting with various options for accomplishing this during the next couple of meetings.Indeed,atleastoneAssociateDirectorwill be assigned to improve the efficiency and quality of MTI’s training programs.

MTI’s increased activities and member participation in China is requiring increased MTI staff support including a local virtual office. The MTI virtual office in Shanghai, which is operated for us by MCI International, has become an essential resource for supporting our member activitiesinChina.OurteaminShanghaiworkscloselywithMTISt.LouisstaffandespeciallyAssociateDirectorJesseChen.MTI–Chinahandleslocalphoneinquires,setsupAsiaTACand Project meetings, negotiates contracts with

hotels and other vendors, collects fees and issues receipts, pay bills for local services, and answers emails. Staff members participate in all of our project meetings and steering team meetings to provide valuable guidance for planning and execution of our activities in China.

Designing and implementing the new MTI web site is progressing nicely under the direction of ourwebsitecommittee(ChairedbyMichaelTurner)withinputfromconsultantRMC.Thecontractor for the new web site is MemberClicks, Inc. They are an association technology provider focusedonsmallassociations.Ourgoalistointegrate our membership database, our web site, thearchivedforum,Googlesearch,andGrantadocuments onto one server or one virtual server. The plan is to provide a preview of the new websiteduringOctober2011andlaunchitbyFebruary 2012.

DebbyEhret,OperationsDirector,hasbeenelectedtotheBODoftheSt.LouisChapterofASAE(SLSAE).MTIhasbenefitedfromherparticipationinvariousASAEandSLSAEactivities and especially the networking and training. Congratulations Debby!

Finally,IwishtothanktheBODforhonoring me as the 12th recipient of the MTI Fellow award. It is especially nice to be recognized by one’s peers and associates.

JamesM.Macki Executive Director

Executive Director’s Letter

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Board of Directors

The Board of Directors, elected by the Member Representatives, manages the business of MTI. The four critical functions of the Board of Directors include planning, organization, leadership, and control.

Seated, Left to Right:

Cheryl A. BottiManager, Market & Product DevelopmentATI-Allegheny LudlumAllegheny Technologies IncorporatedPittsburgh, Pennsylvania

Kelly E. WyroughTechnical Services/SalesRoben Manufacturing, Inc.Lakewood, New Jersey

Edward R. Naylor, Chair BODSenior Materials Engineering Associate AkzoNobelAmsterdam, The Netherlands

Maria Jose Landeira Oestergaard, Vice-Chair BOD

Principal Engineer, Senior Materials SpecialistHaldor Topsoe A/SLyngby, Denmark

Standing, Left to Right:

Robert Sinko, AmeriTAC Chair, Ex OfficioAssociate Materials EngineerEastman Chemical CompanyKingsport, Tennessee

Paul E. ManningSenior Market Manager & MetallurgistHaynes International, Inc.Kokomo, Indiana

Srini Kesavan Principal EngineerFMC CorporationPhiladelphia, Pennsylvania

Paul K. WhitcraftDirector of Quality Safety & EngineeringRolled AlloysTemperance, Michigan

David Barber, AmeriTAC Vice Chair, Ex Officio

Materials Engineering AssociateThe Dow Chemical CompanyMidland, Michigan

Steven P. SpringerSenior Consultant, Materials EngineeringDuPont CompanyWilmington, Delaware

Eugene L. LieningSenior Materials Engineering AssociateThe Dow Chemical CompanyMidland, Michigan

Michael Turner, EuroTAC Chair, Ex OfficioSenior Consultant – Materials TechnologyAkzoNobelAmsterdam, The Netherlands

Dale K. HeffnerVice PresidentElectro Chemical Engineering & Manufacturing Co. Emmaus, Pennsylvania

Not Pictured:

Henry Ye, AsiaTAC Chair, Ex OfficioMaterials Engineering ConsultantDuPont Engineering and Technology Wilmington, Delaware

14

Directors & St. Louis Staff

Seated Left to Right:

Heather StineAssociate Director

Emory FordAssociate Director

Debby EhretOperations Director

James Macki

Executive Director

Lori ElginAdministrative Assistant

Katherine ReineckeAdministrative Assistant

Barry GreeneAssociate Director

Tony ScribnerAssociate Director

Standing Left to Right:

Jesse ChenAssociate Director

Bill WatkinsAssociate Director

15

Robert J. Sinko, AmeriTAC Chair 1, 2, 3

Associate Materials EngineerEastman Chemical Company

David Barber, AmeriTAC Vice Chair 1

Materials Engineering AssociateThe Dow Chemical Company

Henry Ye, AsiaTAC Chair 2

Materials Engineering ConsultantDuPont Engineering and Technology

Albrecht Girgensohn, AsiaTAC Vice Chair 2

Head of Mechanical IntegrityMechanical Integrity DepartmentBayer Technology and Engineering (Shanghai) Co., Ltd.

Michael Turner, EuroTAC Chair 3

Senior Consultant –Materials TechnologyAkzoNobel

Natalie Gelder, EuroTAC Vice Chair 3

Materials Engineer Technical Inspection & Materials Engineering Engineering & Maintenance BASF Corporation

Hiro Anada 1

Manager of Technical ServiceSumitomo Metal Industries, Ltd.

Michael J. Anderson 1, 2, 3

Area Leader - Materials, Inspection & Engineering ServicesSyncrude Canada, Ltd.

Poul-Erik Arnvig 1, 3

Vice President Market DevelopmentOutokumpu Stainless- North America

Sascha Bergamin 2

Asia Pacific Business Development ManagerSandvik Materials Technology

Albert Biggs 1, 2, 3

General Manager, Maintenance & Technical ServicesSaudi International Petrochemical Company

W. Keith Blanchard 1

Senior Corrosion/Materials AdvisorBP

Cheryl A. Botti 1, 2, 3

Manager, Market & Product DevelopmentATI-Allegheny LudlumAllegheny Technologies Incorporated

Clive Breeden 3

MetallurgistBP

Eileen Chant 1, 2, 3

Manager of Technology Development & SupportBecht Engineering Co., Inc.

Daniel D. Christian 3

Director–Power Market SalesEurope–Middle East–IndiaVictaulic

Gary Coates 1

ConsultantNickel Institute

Marc Cook 1, 2, 3

Reliability EngineerDow Corning

Peter Cutler 3

Director PromotionsNickel Institute

Vinay P. Deodeshmukh 1, 2, 3

Senior Staff EngineerHaynes International, Inc.

François Dupoiron 1, 2, 3

Materials and Corrosion ExpertTOTAL Petrochemicals

Hasse Eriksson 3

Global Product Certification ManagerDet Norske Veritas

Milton Eshelman 1, 2, 3

Senior Design EngineerThe Roberts Company

Brian J. Fitzgerald 1, 2, 3

Senior Engineering AssociateExxonMobil Chemical Company

Jader Furtado 1, 2, 3

Air Liquide International Expert–R&D: Physical MetallurgyAir Liquide

Andreas Furukrona 3

EMEA Business Development ManagerSandvik Materials Technology

Otis Galloway 1, 2, 3

PresidentP.A., Inc.

Robert D. Gill 1, 2, 3

Vice President, SalesELLETT Industries Ltd.

Rao Guangbin 2

Materials Engineering & Technical InspectionBASF Corporation

Dale K. Heffner 1, 2, 3

Vice PresidentElectro Chemical Engineering & Manufacturing Co.

John J. Hoffman 1, 3

Materials Engineering Community LeadAir Products & Chemicals, Inc.

Patrice Houlle 3

Director Europe, Business Development and Technical MarketingHaynes International

Lindell R. (Bob) Hurst 1

Senior Materials and Corrosion EngineerShell Global Solutions International B.V.

Dietlinde Jakobi 1, 2, 3

General Manager - Research & Development Services Centrifugal Casting DivisionSchmidt + Clemens GmbH + Co

Carl E. Jaske 1

Senior Principal EngineerDet Norske Veritas (USA), Inc.

Dan E. Kaye 1, 2, 3

Staff Engineer – ReliabilityHoneywell

Srini Kesavan 1, 2, 3

Principal EngineerFMC Corporation

Yong Joo Kim 1

Vice President TechnologyWebco Industries, Inc.

Ken Kirkham 1, 2, 3

Senior AdvisorLyondellBasell Industries

The Technical Advisory Councils, composed of one representative of each member company, solicit project ideas, define projects, and recommend projects for approval by the Board of Directors.

Technical Advisory Councils

16

V. R. Krishnan 1, 2, 3

DY, Chief ConsultantEngineers India Limited

Greg J. Kusinski 1, 2, 3

Advanced Materials Research and Development EngineerChevron Energy Technology Company

Rocky Kuykendall 1, 2, 3

Vice President of EngineeringTitanium Fabrication Corp.

Denny Lee 2 Deputy G. ManagerJiuli Hi-Tech Metals

John Leonard 1 Sales DirectorJiuli USA Inc.

Zhou Ling 2

PCE Engineering SpecialistThe Dow Chemical Company

Jan Links 3

Senior Materials SpecialistThe Dow Chemical Company

Brian M. Linnemann 1, 2, 3

Engineering ManagerRL Industries, Inc.

Deepak C. Mahadeshwar 2

Mechanical EngineerShell Global Solutions International B.V.

Hiroyasu Matsuda 1, 2, 3

Director, Production & Technology CenterMitsui Chemicals, Inc.

Satoshi “Toshi” Matsumoto 2

Manager of Technical ServiceSumitomo Metal Industries, Ltd.

Ben McCurry 1

Materials & Inspection EngineerBASF Corporation

Dale R. McIntyre 1, 2, 3

Consultant MetallurgyConocoPhillips

Dennis McIntyre 1, 2, 3

Principal Engineer Equipment ReliabilityCornerstone Chemical Company

Ioannis Melas 1, 2, 3

Metallurgical Engineer, Inspection DepartmentHellenic Petroleum S. A.

Dallas R. Moore 1, 2, 3

Consultant & Management ResourceRathGibson

Tim Munsterman 1, 2, 3

Technology Director / EngineeringLloyd’s Register Energy Americas, Inc.

Masao Nakahara 1, 2, 3

General ManagerAsahi Kasei Chemicals

Edward R. Naylor 1

Senior Materials Engineering Associate AkzoNobel

Hidenori Ogawa 3

Technical ManagerSumitomo Metal Industries, Ltd.

Maria Jose Landeira Ostergaard 1, 2, 3

Principal Engineer, Senior Materials SpecialistHaldor Topsoe A/S

Ruben Parga 1, 2, 3

Technical Sales Engineer, MetallurgyCorrosion Materials

Stephane Pauly 1, 2, 3

Business Development ManagerDynamic Materials Corporation

Shuo Peng 2

Manager, Asia R&D CenterVictaulic

Ashok H. Rakhe 1, 2, 3

Fellow EngineerCelanese Corporation

Michael Renner 1, 3

Vice President Materials Technology/Mechanical IntegrityBayer Technology Services GmbH

Bernhard Rijpkema 2

Senior Consultant – Polymeric MaterialsAkzoNobel

Harry Schrijen 1, 2, 3

Senior Material & Welding Specialist Manufacturing Competence CenterSABIC

Zach Schulz 1, 2, 3

Applications EngineerRolled Alloys

Marcelo Senatore 1

Technical MarketingSandvik Materials Technology

Mark J. Sewell 1

Manager of Engineering Materials TechnologyVictaulic

Steven P. Springer 1

Senior Consultant, Materials EngineeringDuPont Company

Chang-Ching Sun 2

Local Sector Head, End Users & ProjectsOutokumpu Asia Pacific Ltd.

Johan van Roij 3

Senior Materials and Corrosion EngineerShell Global Solutions International B.V.

Helen Y.H. Wang 2

President Asian OperationsHaynes International

Yunxiang (Winnie) Wang 2

Senior Materials / Corrosion EngineerBP

Hardin T. Wells 1, 2, 3

Sr. Advisor – Mechanical Tech ServiceAlbemarle Corporation

Jim E. White 1, 2, 3

Associate DirectorPraxair, Inc.

Kelly Wyrough 1, 2, 3

Technical Services/SalesRoben Manufacturing, Inc.

Zha Xiaochun 3

ManagerJiuli Europe Office

Ryan Yang 2

Materials Engineer, AsiaAir Products & Chemicals, Inc.

Daniel Yiptong 1, 2, 3

Materials and Process Engineering ManagerPolycorp Ltd.

Chuck S. Young 1, 2, 3

Business DevelopmentTricor Industrial

Li Zhang 2

Principal Engineer / Head of SectionDet Norske Veritas

Licheng Zhang 2

Managing Director ChinaNickel Institute

1 AmeriTAC 2 AsiaTAC 3 EuroTAC

17

Financial Statements – June 30, 2011STATEMENT OF ACTIVITIES

YEARENDEDJUNE30,2011

Unrestricted Net Assets

Revenues

Membershipdues $ 1,528,352

Interest 93,700

Publicationincome 29,728

Meeting fees 27,535

Investment loss 1,674

Total Support and Revenue 1,677,641

Expenses

Projects 740,203

Salaries 432,546

Meetingexpenses 124,548

Travel 87,299

Payroll taxes 57,505

Membership development & retention 46,662

Telephone & communications 37,294

Retirementcontributions 33,636

China operations 32,697

Insurance 32,336

Officesupplies 31,708

Professional services 31,075

Rent 26,369

Cost of publications 14,740

Postage 10,603

Depreciation 9,597

Printing 9,288

Taxes and licenses 472

Lossonassetretirement 217

Total Expenses 1,758,795

Total Decrease in Net Assets 81,154

Net Assets, Beginning of Year as

Previously Presented 2,368,395

Prior Period Adjustment 13,153

Net Assets, Beginning of Year as Restated 2,355,242

Net Assets, End of Year $ 2,274,088

STATEMENT OF FINANCIAL POSITION

JUNE30,2011

Assets

Current Assets

Cashandcashequivalents $ 385,730

Certificates of deposit 2,457,575

Accountsreceivable 87,839

Accruedinterestreceivable 23,333

Publicationsinventory 89,978

Prepaid expenses and deposits 6,779

Total Current Assets 3,051,234

Property And Equipment

Equipment at cost 104,914

Lessaccumulateddepreciation 72,648

Total Property and Equipment, net 32,266

Total Assets $ 3,083,500

Liabilities and Net Assets

Current Liabilities

AccountspayableandaccruedLiabilities $ 43,212

Deferred income 766,200

Total Current Liabilities 809,412

Net Assets

Unrestricted 2,274,088

Total Liabilities and Net Assets $ 3,083,500

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See accompanying notes to the financial statements.

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STATEMENT OF CASH FLOWS

YEARENDEDJUNE30,2011

Cash Flows from Operating Activities

Changeinnetassets $ 81,154

Adjustments

Depreciation 9,597

Increase in reserve for

inventoryobsolescence 13,698

(Increase)decreasinassets

Accountsreceivable 50,039

Prepaid expenses 35,155

Otherreceivables 5,828

Publication inventory 3,709

Increase(decrease)inliabilities

Accountspayable 51,096

Deferredrevenues 6,850

Net Cash Used by Operating Activities 107,452

Cash Flows from Investing Activities

Purchase of property and equipment 29,903

Lossonassetretirement 217

Redemptionofcertificatesofdeposit 831,000

Purchase of certificates of deposit 650,000

Change in fair value of investments 1,674

Net Cash Provided by Investment Activities 152,988

Net Increase in Cash and Cash Equivalents 45,536

Cash and Cash Equivalents,

BeginningofYear,asRestated 340,194

Cash and Cash Equivalents, End of Year $ 385,730

Independent Auditors’ ReportBoardofDirectorsMaterials Technology Institute, Inc.

Wehaveauditedthestatementoffinancialpositionofthe Materials Technology Institute Inc.(anon–profitorganization)asofJune30,2011,andtherelatedstatementsofactivitiesandcashflowsfortheyearthenended.These financial statements are the responsibility of the Organization’smanagement.Ourresponsibilityistoexpressan opinion on these financial statements based on our audit.

WeconductedourauditinaccordancewithauditingstandardsgenerallyacceptedintheUnitedStatesofAmerica.Thosestandardsrequirethatweplanandperformthe audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. Anauditincludesconsiderationofinternalcontroloverfinancial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of theOrganization’sinternalcontroloverfinancialreporting.Accordingly,weexpressnosuchopinion.Anauditalsoincludes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Anauditalsoincludesassessingtheaccountingprinciplesused and significant estimates made by management, as well as evaluating the overall financial statement presentation. Webelievethatourauditprovidesareasonablebasisfor our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Materials Technology Institute Inc.(theOrganization)asofJune30,2011,andthechangesinitsnetassetsanditscashflowsfortheyearthenendedinconformitywithaccountingprinciplesgenerallyacceptedintheUnitedStatesofAmerica.

KieferBonfanti&Co.LLPAugust31,2011

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Notes to Financial Statements – June 30, 20111) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The summary of significant accounting policies is presented to assist in understandingtheOrganization’sfinancialstatements.Theseaccountingpolicies have been consistently applied in the preparation of the financial statements.

Organization:TheOrganizationwasincorporatedunderthenameMaterialsTechnology Institute of the Chemical Process Industries, Inc. on December 13, 1976 pursuant to the laws of the State of New York as a tax exempt organizationundertheInternalRevenueServiceCodeSection501(c)(6)to engage principally in the business of sponsoring research projects for the chemicalprocessindustries.EffectiveDecember4,2003,theOrganizationchangedthenameoftheOrganizationtoMaterials Technology Institute, Inc. The member companies are located in various countries.

Basis of Accounting:ThefinancialstatementsoftheOrganizationhavebeen prepared on the accrual basis of accounting.

Use of Estimates: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclo-sures.Accordingly,actualresultscoulddifferfromthoseestimates.

Financial Statement Presentation:Adescriptionofthethreenetassetcat-egories follows:

Unrestricted Net Assets — Includes resources available for the sup-portofoperations,whichhavenodonor-imposedrestrictions.

Temporarily Restricted Net Assets — Includes resources for which donor-imposedrestrictionshavenotbeenmet.

Permanently Restricted Net Assets — Includes resources for which donor-imposedrestrictionsarepermanent.

No temporarily or permanently restricted net assets were noted for the year endedJune30,2011.

Cash and Cash Equivalents:TheOrganizationconsidersallhighlyliquidinvestments with an initial maturity of twelve months or less when pur-chased to be cash equivalents.

Investments:TheOrganization’sBoardofDirectorsmaintainsapolicyoflimiting its investments to certificates of deposits with maturities of one year or longer. Investments are presented in the statements of financial position atfairvalue.Unrealizedgainsandlossesareincludedinthechangeinnetassets in the accompanying statements of activities.

Property and Equipment: Property and equipment are stated at cost, or fair market value if donated, less accumulated depreciation. Depreciation isprovidedonthestraight-linemethodoverthefollowingestimatedusefullives.

Officefurnitureandequipment . . . . . . . . . . . . . . . . . . . . . 5 – 7 years

DepreciationexpensefortheyearendedJune30,2011was$9,597.

Expenditures over $1,000 for purchases and for major renewals and betterments that extend the useful lives of property and equipment are capitalized. Expenditures for repairs and maintenance are charged to expense as incurred.

Revenue Recognition and Deferred Income:Revenueisrecognizedintheperiod the income is earned. Membership income is typically received in advance.Accordingly,membershipincomeisearnedratablyovertheperi-od, with the unearned portion shown as deferred income at the Statement of Financial Position date.

Inventories:TheOrganizationmaintainsaninventoryofpublicationswhich report the results of its research projects. Direct costs of editing and production are capitalized and a unit value is established for each publica-tion. Inventories are stated at the lower of cost or market with cost being determinedbythefirst-in,first-outmethod.Organizationmanagementhasascertained that the inventory of publications is subject to obsolescence due to advances in technology and other factors affecting the industries itserves.Accordingly,managementhaselectedtoestablishareserveforobsolescence with respect to ascertaining the realizable fair market value of itspublications.TheOrganizationcharged$13,698againstincomefortheyearendedJune30,2011toincreasethisreserve.

Accounts Receivable:Accountsreceivablearestatedattheamountmanagement expects to collect from balances outstanding at year end. ManagementoftheOrganizationevaluatesthecollectabilityofindividualaccounts.AtJune30,2011,allaccountsreceivablebalancesareexpectedto be collectible, and therefore, a valuation allowance is not considered necessary.

Income Taxes:TheOrganizationisexemptfromincometaxesunderSection501(c)(6)oftheInternalRevenueCode.

Financial accounting standards for uncertain tax positions prohibit financial statement recognition of the impact of a tax position if the position is not “more likely than not” to be sustained on audit, based on the technical merits of the position. The standards also provide guidance on measure-ment, recognition, classification, transition, and disclosure requirements for uncertain tax positions. The adoption of these standards had no impact on thefinancialstatements.TheOrganization’sfederalForm990fortaxyears2008andlaterremainsubjecttoexaminationbytaxingauthorities.

Subsequent Events: The Company has evaluated subsequent events throughAugust312011,thedatewhichthefinancialstatementswereavailable to be issued, for possible additional recognition or disclosure.

2) INVENTORIES

InventoriesatJune30,2011consistedofthefollowing:

Finished publication inventory $ 166,840 Lessreserveforobsolescence 76,862 Total Inventories $ 89,978

3) CONCENTRATION OF CREDIT RISK

FinancialinstrumentsthatpotentiallysubjecttheOrganizationtoconcentrations of credit risk consist principally of temporary cash investments.TheOrganizationplacesitstemporarycashandlongterminvestments with financial institutions and limits the amount of credit exposuretoanyonefinancialinstitution.AsofJune30,2011,theOrganization’stemporarycashandcertificatesofdepositwerewithininsuredlimits.

4) FAIR VALUE MEASUREMENTS

FinancialAccountingStandardsestablishaframeworkformeasuringfairvalue. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identicalassetsorliabilities(level1measurements)andthelowestprioritytounobservableinputs(level3measurements).Thethreelevelsofthefairvalue hierarchy under the standards are described as follows:

Level1 Inputstothevaluationmethodologyareunadjustedquotedprices for identical assets or liabilities in active markets.

Level2 Inputstothevaluationmethodologyinclude:

• Quotedpricesforsimilarassetsorliabilitiesinactivemarkets;

• Quotedpricesforidenticalorsimilarassetsorliabilitiesininactivemarkets;

20

• Inputsotherthanquotedpricesthatareobservablefortheassetorliability;

• Inputsthatarederivedprincipallyfromorcorroboratedbyobservable market data by correlation or other means.

Iftheassetorliabilityhasaspecified(contractual)term,thelevel 2 input must be observable for substantially the full term of the asset or liability.

Level3 Inputstothevaluationmethodologyareunobservableandsignificant to the fair value measurement.

The asset or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.

The inputs or methodologies used for valuing investments may not be an indication of the risk associated with investing in those securities. Investments in collective investment funds are valued at the net asset valueperunitonthevaluationdate.Furthermore,theOrganizationbelieves its valuation methods are appropriate and consistent. The use of different methodologies or assumptions could result in a different fair value measurement at the reporting date.

TheOrganizationevaluatesallinvestmentsatthelevel1inputlevel.

5) EMPLOYEE BENEFIT PLAN

TheOrganizationmaintainsaqualifiedsavingsplanunderInternalRevenueCodesection401(k)foremployeeswhomeetcertainageandlengthofservice requirements. Subject to statutory limits, qualifying employees mayelecttodeferaportionoftheirsalary.TheOrganizationcurrentlymatches 100% of the employee deferrals not to exceed 5% of compensation. Matchingcontributionswere$33,636fortheyearendedJune30,2011.

6) OPERATING LEASES

AsofJune30,2011,theOrganizationwasobligatedundernon-cancelableoperating leases for its office facilities and certain office equipment which expirebetweenJune2012andJune2015.Thefutureminimumleasepayments under the leases are as follows:

Years Ending June 30, Amount 2012 $ 26,174 2013 3,398 2014 3,398 2015 3,398 Total Future Minimum Lease Payments $ 36,368

Leasingexpenseforofficefacilitiesandforofficeequipmentwas$26,369and$3,398,respectively,fortheyearendedJune30,2011.

7) COMMITMENTS

TheOrganizationisapartytoseveralresearchprojectsrequiringestimatedpayments of approximately $1,119,237 over the remaining life of existing projectsasofJune30,2011.

8) PRIOR PERIOD ADJUSTMENT

ApriorperiodadjustmenthasbeenmadetonetassetsasofJune30,2010to more properly reflect balances of accrued paid time off for the employees oftheOrganization,toincludeadditionalcashheldfortheinventory,and to accrue additional expenses in the prior year. The aggregate change decreased net assets by $13,153.

Schedule of Annual Membership Dues for 2012Annual Sales Year 2012(US$ Billions) Dues – US$Sales < 0.2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$ 11,1000.2 < Sales < 0.4 . . . . . . . . . . . . . . . . . . . . . . . . . . .$ 15,2000.4<Sales<0.8 . . . . . . . . . . . . . . . . . . . . . . . . . . .$ 19,3000.8<Sales<1.5 . . . . . . . . . . . . . . . . . . . . . . . . . . .$ 23,5001.5 < Sales < 3.0 . . . . . . . . . . . . . . . . . . . . . . . . . . .$ 27,7003.0 < Sales < 6.0 . . . . . . . . . . . . . . . . . . . . . . . . . . .$ 31,8006.0 < Sales < 12.0 . . . . . . . . . . . . . . . . . . . . . . . . . .$ 35,90012 < Sales < 25 . . . . . . . . . . . . . . . . . . . . . . . . . . . .$ 40,10025 < Sales < 50 . . . . . . . . . . . . . . . . . . . . . . . . . . . .$ 44,30050 < Sales < 100 . . . . . . . . . . . . . . . . . . . . . . . . . . .$ 48,400100 < Sales < 200 . . . . . . . . . . . . . . . . . . . . . . . . . .$ 52,600200 < Sales < 400 . . . . . . . . . . . . . . . . . . . . . . . . . .$ 56,800400<Sales<800 . . . . . . . . . . . . . . . . . . . . . . . . . .$ 60,900800<Sales<1,500 . . . . . . . . . . . . . . . . . . . . . . . . .$ 65,000

Aformulaisusedtodeterminetheannualdues for engineering, design, and construction firms. Please contact the MTI office for specific information.

Basis for Assessing Company’s Membership DuesDues for membership are generally based upon the total sales of the member company and its affiliates. Dues for specific classes of members are as follows:

Producers: Dues for Producer members will be determined from the established dues schedule and will be calculated on the basis of the most recent audited Corporate CPI sales. For privately held corporations, the total corporate sales of units related to the CPI must be certified by an officer.

Suppliers: Dues for Supplier members will be determined from the established dues schedule and will be based on the most recently audited total sales of the corporation. For privately held corporations, the total corporate sales of units related to the CPI must be certified by an officer.

TheBoardofDirectorsmaymakeexceptionstothispolicyincases where, in its judgement, the affiliates of the applicant, even though they are related to the chemical processing industry, cannot reasonably be expected to benefit from the membership in MTI.

Associationmembershipswillbeconsideredonacase-by-casebasis, with regard to acceptance, dues levels, and conditions of membership.

GraphicDesign:O’NealDesign,St.Louis,Missouri

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Materials Technology Institute, Inc.1215 Fern Ridge Parkway • Suite 206 • St. Louis, Missouri 63141–4408 U.S.A.

Tel: 314.576.7712 • Fax: 314.576.6078E–mail: mtiadmin@mti–global.org • Home Page: www.mti–global.org

About Materials Technology InstituteThe Materials Technology Institute, founded in 1977, is a unique, not–for–profit technology development organization representing private industry. It sponsors projects focused on both developing new technology and transferring existing knowledge to day–to–day practice. Practical, generic, nonproprietary studies are conducted on the selection, design, fabrication, testing, inspection, and performance of materials of construction used in the process industries. The scope of work includes evaluation of metallic, and non–metallic materials, optimum design applications, fitness–for–service, mechanical integrity and life cycle determinations, and economic factors affecting performance of vessels, tanks, piping and other components.

Through membership and networking within MTI, companies can access solutions to nonproprietary problems of major concern to the process industries. Members can capitalize on the extensive expertise of member company representatives, leverage their technology investment by participating in the direction and results of MTI projects, and utilize MTI’s books, reports, software and video training programs immediately as needed. Benefits to member companies are increased plant integrity, reliability and profitability.