Off Highway Tires North American Tire & Retread Expo New Orleans, Louisiana April 16, 2015

Agenda OHT Market Size and Breakdown Some observations on main relevant sectors Thoughts on what’s coming down the pike….

A Little Bit About Me…

Some OFF HIGHWAY TIRE observations…

Great People Cool Products, cool machines End users appreciate value! It’s a relationship business.

OHT Business Good Size Big enough to grow in and to make money. Small enough to be involved and make an impact.

OTR vs. OHT??

Forestry Mining / Earthmover Construction 8 Segments of OHT Market Agriculture

Above OHT market size excludes solid tire, racing tires and aircraft tire. Source: Annual reports; Global Tire Report from Rubbernews.com Global OHT Tire Market ~$14B! OHT Market Other Markets

Above OHT market size excludes solid tire, racing tires and aircraft tire. Source: Annual reports; Global Tire Report from Rubbernews.com Global OHT Market OHT Market OEM Aftermarket / Replacement

Above OHT market size excludes solid tire, racing tires and aircraft tire. Source: Annual reports; Global Tire Report from Rubbernews.com Global OHT Market OHT Market Europe ROW North America

Global Market Breakdown

North American OHT Market

Mining

Mining…. “It was the best of times….it was the worst of times” Charles Dickens, A Tale of Two Cities

Mining…. Highly specialized Very regionalized Cost of failure very high High cost to serve

Mining Pockets of Opportunity Underground mining Sand and Gravel

Agriculture THEIKPSOIUPRTE

AG vs. Mining

Agriculture Also specialized and regional But not as much as mining Farms in every state….opportunities unless you are an urban dealer

Farmers Very Tech Savvy Farmers research EVERYTHING online before buying Make sure your website is easy to find and easy to use.

GPS Guided Farming!

Heavy Users of Social Media

Productivity Driven….

Not Just Tractors….

Segment break-up of OHT market Key OHT Segments Agriculture ForestryMiningConstruction

Construction is Booming 2014 machinery sales up 8.7% 2015 forecasted to be even higher 8.9% looking strong with CAGR of 4.5% or higher

Growth is Across the Board 2015 Single Family Housing Forecasted to be up 15% over 2014 Commercial Building also forecasted in the 15% range Construction is EVERYWHERE….not just in Southeast or West. Not just suburbs as in past. INFILL in cities, led by millennials, driving urban construction

Construction Equipment

70% Of All OTR Tires 24”-25”

OTR Segment Offers Greatest Short Term Opportunity You don’t have to be an OTR dealer to participate. Any commercial dealer, with a lift gate truck, can handle majority of tire sizes used on construction and industrial machines

Go Where the Numbers Are…. 800,000+ Skid Steers in the USA alone 600,000 on tires 2.4 MILLION SS Tires in the field right now Severe use. High scrub rate. Wear out fast Limited sizes to inventory

Rental Companies Are Hot…

Rentals Are Hot! Over 50% of 2014 new equipment purchased by rental companies Trend forecasted to be even higher Driven by continuing uncertainty Users increasingly deploying specialized equipment for specialized jobs. More economical to rent than own Uncertainty over long term Federal Highway Bill

So What? Do not ignore the rental fleets They are growing fast Get to know local people at rental company branch locations United Rentals Sunbelt Cat Equipment Etc. They are everywhere. In all markets.

Where to Look….

Forestry

OHT…It’s a Dealer’s World. OTR Users Need Dealer Service and Value their servicing dealer You offer what manufacturers do not: 24 Hour emergency service Inventory close at hand. Trained technicians/OSHA certified Data driven recommendations to help lower production costs/reduce downtime

It’s All About Productivity & Cost No one cares about tires except for those of us in this room! Customers only care about lowering their production costs and improving productivity If this could occur through some new, disruptive technology, we’d be out of business

Good News…You are the Critical Link! Right service partner is still the critical link in making everything work Right tire recommendation Right service offerings You are in the driver’s seat. Customer appreciates what you can do for him more than the brand of the tire. You can recommend the right bundle of products and services that you feel will help your customer best.

Majors De-Focused Pirelli spins off AG tire business to Trelleborg Goodyear spins off AG business to Titan Continental spins off OTR business in U.S. to Titan Conti spins off AG business in Europe to Mitas

It will be a buyer’s market

You Will Have Even More Choices in the Future…. Emerging Players starting to challenge the global giants Emerging players more sophisticated Choose Wisely….