to the AGMA/ABMA Annual Meeting! Zero "Nothing is more important than safety - not profits, not production or shipments, not even quality - at the end of the day, safety is about people,

Welcome to the

AGMA/ABMAAnnual Meeting!

Welcome to

Solar

Welcome to

Solar

Dan CampionDirector, Turbomachinery Operations

Agenda• Company Info

– Values/History– Products/Markets/Customers– Applications

• Global Energy Demand• Natural Gas• Looking Forward• Questions




Vision Zero

"Nothing is more important than safety - not profits, not production or shipments, not even quality - at the end of the day, safety is about people, and people must come first."~ Doug Oberhelman, Chairman & CEO, Caterpillar

“Our number one priority for the people of Solar is to ensure safety in all we do. Safety will be an endless journey since its success is measured by ending every day with zero injuries.”~ Tom Pellette, President, Solar Turbines

OurValues In

Action

OurValues In

ActionCaterpillar’s Worldwide Code of Conduct

Values in Action

Our History

• Founded in 1927 as Prudden-San Diego Aircraft Company

• 1930s: Produced stainless steel aircraft exhaust manifolds

• 1940s: Pioneered development of jet engine afterburners and small gas turbines for U.S. Navy

• 1950s: Involved with aerospace Industry and U.S. Navy shipboard power generation

• 1960s: Developed aerospace components, Military APU’s, centrifugal compressors, and Saturn gas turbine industrial power plants

• 1970s: Phased out aerospace to focus on complete industrial power packages

• 1980s: Continued worldwide leadership in mid-range industrial turbomachinery products and services

• 1990s: Advanced turbomachinery technologies for lower emissions levels and higher efficiencies

Our History

9

World’s Largest Manufacturer of Industrial Gas Turbines(1 – 22 MW Size)

Over 14,000 Turbines in 96 CountriesMore than 1.75 Billion Fleet Operating Hours

Total Employees. . . . 7,800Inside U.S. . . . . 66% Outside U.S. . . . 34%

Countries. . . . . . . . . . . 45

Leadership team

Turbines and Gearboxes




Turbines

Natural Gas Pipeline

C65

C45

Oil & Gas Production

C40

C50

C51

C16

C33

C61

C41

C85

C40

Products: Compressors

Complete Package Systems

TURBINEPACKAGE SWITCHGEAR

MOTOR CONTROLCENTER

FIELDEQUIPMENT

TURBINE CONTROL CONSOLE

MULTI-CONDUCTORCABLES

16

Business Model End to End

Direct Sales & Service

Low Volume, Engineered Product

Customized Product– Unique Customer Applications

Solar Package Part of a System– Drives Customization

17

Oil & Gas Gas Transmission Oil & Gas Production

Power Generation Combined Heat & Power Distributed Generation

Customer Services Life Cycle Solutions Direct Customer Support

Customer Services Oil & Gas

PowerGen

Revenue2009-2011

17

Solar’s Markets

18

Overhaul

TechnicalSupportCommissioning

Life-Cycle ValueTotal SpendExtend Life

PackageRefurbishment

CompressorRestaging

Parts

SystemUpgrades

ControlsRetrofits

Equipment HealthManagement

Total Life-Cycle Solutions

TechnicalTraining

Oil & Gas Customers

Super Majors

National Oil Companies

Independents Energy & Transmission Companies

Contractors

20

• Maximize Production

• Minimize Gas Turbine Downtime– Durability & Reliability– Time Between Overhauls

• Quality

• Life Cycle Cost

• Delivery Time

• Equipment Performance– Power & Efficiency

Key Customer Buying Criteria

Global Manufacturing Facilities

Czech Republic

Global Service Centers

Czech RepublicSwitzerland

Global Overhaul Facilities

Macae, Brazil




Typical Applications• Worldwide Markets

- Oil and Gas Industry- Power Generation

(Non Oil & Gas)

Mars 100 Compressor Set withSoLoNOx Combustion System

Washington, U.S.A.Washington, U.S.A.

Solar’s largest single lift module for the

Tapti Field Offshore India, Gulf of Cambay.

PEMEX Offshore PlatformBay of Campeche

FPSO (Floating Platform Systems Offshore)

Kuala Lumpur – 2 Mars 100’s used for cooling the towers

Taurus 60S GS Duel Fuel – Siberia, RussiaElectric power generation for oil field production

Oil & Gas Power Generation

CanadaCanada

Paper Plant Cogeneration

JapanJapan

Standby/ Peaking Power North Carolina Municipal Power Agency

Gas Storage/Withdrawal




World Energy DemandWorld Energy Demand

World Energy DemandWorld Energy Demand

721 Quad. Btu

Source: EIA/World Energy Outlook 2011


Primary Energy Demand by FuelPrimary Energy Demand by Fuel


Primary Energy Demand by FuelPrimary Energy Demand by Fuel

5/2/2013 41

World Oil Consumption

88.7

889

.87 93.3 97

.6

55

60

65

70

75

80

85

90

95

100

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

MM

BPD

World Oil Market MetricsWorld Oil Market Metrics

Actual

Short-TermForecast

Long-TermForecast

Caterpillar: Confidential Yellow

2013 revised down slightly, still up 1.1 mmbl/d over 2012

Source: Short‐Term Energy Outlook June 2012, EIA International Outlook 2011

China, Middle-East, and Brazil account for most of the world's growth over

the next 2 years

US Oil & Gas Production

U. S. Natural Gas Production in tcf1990 – 2035

CAPEX Going Forward - Through 2015CAPEX Going Forward - Through 2015

Double‐digit spending growth internationally

World Energy Infrastructure InvestmentWorld Energy Infrastructure Investment

CAPEX SensitivityCAPEX Sensitivity

Sensitivity to higher oil prices Sensitivity to lower oil prices

Above $100 ‐ 67% raise their capexBelow $70 ‐ 67% lower their capex




US Natural Gas

Remaining Recoverable Gas ResourcesRemaining Recoverable Gas Resources

North America Gas Pipelines

TCPL System

TCPL

LNG Export

Worldwide Gas Prices

$0

$1$2

$3$4

$5$6

$7$8

$9

$10$11

$12$13

$14$15

$16$17

$18

2000

01

2000

06

2000

11

2001

04

2001

09

2002

02

2002

07

2002

12

2003

05

2003

10

2004

03

2004

08

2005

01

2005

06

2005

11

2006

04

2006

09

2007

02

2007

07

2007

12

2008

05

2008

10

2009

03

2009

08

2010

01

2010

06

2010

11

2011

04

2011

09

2012

02

$ m

mbt

u

Japan (Natural Gas LNG)Zeebrugge (Belgium)USA (Henry Hub)

European Gas PricesEuropean Gas Prices

Effect of Shale Gas on US Price

European Shale Gas FieldsEuropean Shale Gas Fields

China Shale Gas FieldsChina Shale Gas Fields

Oil and Gas Opportunities

OIL & GAS PROJECTS

GREAT NORTHERN

APACHE

WOODSIDE BROWSE

GDF SUEZ FLNG

HESS EQUUS

SANTOS MOOMBA

APA (EPIC) WCS

APA (EPIC) MOOMBA

APLNG

GLNG

APA SUPERHIGHWAY

APA GAS TO GOVE

ESSO LONGFORD

PNGLNG

PNGLNG

World Shale Gas FieldsWorld Shale Gas Fields

R e g i o nN o n - O E C D

E u r o p eM i d d l e

E a s tN o r t h

A m e r i c a A s i aL a t i n

A m e r i c a A f r i c aO E C D

E u r o p e

S u p p l y 3 3 5 Y e a r s 3 9 3 Y e a r s 1 6 5 Y e a r s 2 1 2 Y e a r s 5 7 3 Y e a r s 5 9 7 Y e a r s 7 0 Y e a r s

R e g i o nN o n - O E C D

E u r o p eM i d d l e

E a s tN o r t h

A m e r i c a A s i aL a t i n

A m e r i c a A f r i c aO E C D

E u r o p e

S u p p l y 3 3 5 Y e a r s 3 9 3 Y e a r s 1 6 5 Y e a r s 2 1 2 Y e a r s 5 7 3 Y e a r s 5 9 7 Y e a r s 7 0 Y e a r s

S o u r c e : I E A W o r l d E n e r g y O u t l o o k 2 0 1 1 , B o o z & C o m p a n y a n a l y s i s




Global Growth

North America

63

INDIA

CHINA JAPAN

SOUTHKOREA

PHILIPPINES

BANGLADESH

VIETNAM

INDONESIA

MALAYSIA

MYANMAR

THAILAND

BRUNEI

TAIWAN

SINGAPORE

Asia Pacific Region

Europe, Africa, Middle East

65

Solar’s Supplier Expectations• Aim for “Zero Injuries” Total Supply Chain• Establish a “Zero Defect” Built-In-Quality

Culture– Poor Quality Creates both Safety and Financial

Risk for Our Customers– Ensure Excellent Process Control: Know What You

are Sending Us!

• Meet Your Commitments– Minimum 4 Sigma Delivery Performance– Liquidated Damages for Late Package Delivery

Typically $75,000 per Week

• Short Lead Times with Volume Flexibility– Creates a Competitive Advantage for All of Us

• Maintain Competitive Costing– Global Competition




to the AGMA/ABMA Annual Meeting! Zero "Nothing is more important than safety - not profits, not production or shipments, not even quality - at the end of the day, safety is about people,

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