MTI Delivers Value at Every Level

2011 Annual Report MTI Gives Members Access to an Ever-Expanding Network of Knowledge

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.

MTI By the Numbers 57 Member Companies • 5 Annual TAC Meetings • 39 Funded Projects from 2006–2011 96 Potential Projects • 7 Approved AmeriTAC Projects Over the Last 3 Meetings 51 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

Annual Highlights 02 Report of the AmeriTAC Chair 08 Board of Directors 14 MTI’s Vision 06 Report of the AsiaTAC Chair 09 Directors 15 Benefits of Membership 06 Member Companies & St. Louis Staff 15 MTI’s Mission 06 Designated Representatives 10 Technical Advisory Councils 16 Report of the Chair – Report of the EuroTAC Chair 12 Financial Statements 18 Board of Directors 07 Executive Director’s Letter 13 Membership Dues Information 21

* From 2006–2011. MTI maximizes member asset performance by providing global leadership in materials technology to improve safely, reliability, sustainability and profitability.

1 Annual Highlights

Update to the Cleaning Manual AsiaTAC 2011 The existing MTI publication on cleaning of process The fifth annual AsiaTAC was equipment and piping is well respected and routinely used held in Shanghai, China on by many of the member company personnel. Since the 20–23 September 2011. The original book was published, other techniques for cleaning first two days were devoted have been developed and updating the manual to include to a training class entitled these new systems and to document the improvements to “Technical Workshop on the existing systems is needed. Fasteners.” The course materials and delivery were in both MTI Fellow, Dr. Sandy Sharp, has completed the draft English and Chinese. The instructors of the workshop were manuscript for the new Supplement to MTI Publication two well–respected international fastener experts, Salim No 51 – “Cleaning of Process Equipment and Piping.” This Brahimi, President of IBECA in Montreal Canada and Dr. draft manuscript is currently being reviewed by technical Baohong Cao of Infasco, a major fastener producer located specialists with knowledge in the various cleaning methods. in Marieville, Quebec. The workshop provided a broad understanding of topics relating to threaded metal fasteners, Seventeen subjects are being added or updated. ranging from materials, manufacturing, product standards, • Pre–Operational Cleaning fastening strategies, applications engineering and failure • Cleaning of Reactive Metals analysis. The workshop that attracted more than 60 people, • Water Jet Cleaning mostly member company engineers and some Chinese • Sodium Bicarbonate Cleaning governmental institution and fastener producer personnel, • Citric Acid Cleaning was rated highly by the attendees. • Cleaning Using Chelation Techniques • Rapid Chemical Testing During Cleaning On the third and fourth day, the AsiaTAC 2011 included a • Cleaning of Glass Lined Equipment general AsiaTAC business meeting and panel discussions, • Cleaning Pipelines with Materials Delivered by High forum and project development committee meetings. Five Velocity Gas Streams panel discussions with subjects recently defined according • Sonic Resonance Cleaning to major areas of member interests were organized. These • Cleaning Equipment in Reactive Chemical Services panels covered the subjects of: such as Oxygen, Hydrogen Peroxide, Chlorine and Food 1. Metallurgy, Metallography, Physical Failure Analysis Grade Chemicals 2. Corrosion—Analysis, Inspection, and Protection • Thermal Cleaning • Dry Ice Blasting 3. Mechanical Integrity and Reliability, Condition • Liquid Nitrogen Jetting Assessment Equipment and Parts, Fitness for Service • Inhibitors Used in Cleaning 4. NDT and In–service Inspection, Regulations, • Keys to Successful Cleaning Operations New Technology and The draft manuscript is already on the MTI web site 5. Application of non-metals in chemical and and available for MTI members to download and use petrochemical industry, including FRP, Plastics, now. The published document is projected to be available Coating, and Composition in 2012. On September 23, as a new initiative, in separate project development committee meetings that followed basically the AmeriTAC PDC model, members were divided into four 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 of possible projects. After two and half hours of vivid and productive discussions, the leaders of these subcommittees then reported to the reconvened AsiaTAC the possible project ideas. Using these ideas, AsiaTAC is expected to

2 generate several potential projects that would benefit the AsiaTAC member companies. In the after lunch session, the AsiaTAC leadership team, the PDC leaders, and MTI staff members present at AsiaTAC got together to discuss and review the future direction of AsiaTAC including the preliminary plan for 2012.

Repair Guides for FRP and Lined Equipment MTI is publishing, in 2011, two manuals dealing with damage assessment and Hydride Detection in Titanium repair of both FRP and Lined Following last year’s successful completion of a project that Equipment. The manuals will provided a better understanding of the conditions leading be printed using high quality to the diffusion of hydrogen and subsequent formation of paper in a spiral binder so that the manuals can be easily hydrides, MTI is initiating another project in which we brought to the field and accessed by plant operations and/or will attempt to identify a non – destructive examination maintenance personnel. procedure to detect hydrogen in titanium tubing. If successful, every MTI member will have the opportunity to use this procedure. Bolting in China After a long period of inception, project defining and planning, the potential project “China Bolting” has finally New and Improved Elastomer Training evolved into a MTI training class entitled “Technical The newest Advanced Elastomer Training Course was Workshop on Fasteners.” The project, approved by the MTI presented to the membership at AmeriTAC 104 held in Board of Directors in June 2011, is the first funded project San Antonio, Texas. The course is designed to educate developed entirely by an AsiaTAC team. The training now members in the selection of elastomers for use as sealing set for September 20 and 21, 2011 in Shanghai, is bi-lingual elements. The course covers the basic chemical architecture and Salim Brahimi, President and Chief Engineer of IBECA of the elastomers, mechanical properties, chemical in Montreal and Dr. Baohong Cao of Infasco of Marieville, compatibility, thermal limits, compounding, and failure Quebec were contracted as the instructors. This unique mechanisms. Russ Schnell and Paul Trillizio of DuPont program is designed to provide a broad understanding of took the lead in modifying the DuPont Elastomer Course topics relating to threaded metal fasteners, ranging from to include even more information on elastomers that materials, manufacturing, product standards, fastening were not currently included in the course that has been strategies, applications engineering and failure analysis. It is given in the past. This new course included information anticipated that this workshop will attract not only many of on many of the less expensive elastomers and on silicone the practicing engineers of the member companies but also based elastomers. Dow Corning’s Michael Dipino gave the some key Chinese governmental institutions and fastener portion of the course on silicon rubber based products and producer personnel. 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 members worldwide at TAC meetings.

3 Annual Highlights

FRP Training Sessions Gordon Conference Report MTI held two bi–lingual FRP Inspectors Training Classes The 70th session of the Gordon Conferences on High in Asia Pacific region in the past few years. The first class Temperature Corrosion was held July 24th to July 28th at was held in Shanghai, China in conjunction with the Colby College in New London, NH. The conference is by AsiaTAC2008 and the second class was held in Hong invitation or application with a limited attendance. Kong in April 2011. Juan Bustillos was the instructor for By tradition, only the agenda is published. The talks both these classes whose primary audience was the third are not published. The purpose of the conference is to party FRP inspectors although many member company foster discussion of new work and a venue to propose new representatives benefited equally from these two–day theories. A key element of the conference is networking. sessions. Continuing on the success of these Asian training classes a new MTI project is being developed to As an example of networking, personnel from DECHEMA deliver similar sessions in both US and Europe. The new attended and Associate Director Emory Ford introduced project is expected to seek formal funding later this year them to several members of MTI. DECHEMA has for the delivery of two classes in the US and one class in two projects with MTI and this was an opportunity for conjunction with the 2012 EuroTAC in Europe. The two- discussion of those projects in an informal but in a decided day US sessions to be scheduled for the spring and fall of technically environment. 2012 are developed specifically for the third party inspectors This year there was a poster session for students on the as well as member company employees while the EuroTAC Saturday and Sunday prior to the conference. Prizes were session also planned for 2012 will be developed as a one day awarded for the three best posters. MTI made a financial session targeting the member company engineers. contribution to this year’s Gordon Conference, and it was used in part to fund the student session. The students remained throughout the whole conference. GRANTA-Search Engine for MTI Documents The Chair of the Gordon Conference recognized MTI for Nineteen additional MTI documents have been added its contribution. Included in the Chair’s remarks was the to a searchable database of 39 of the most popular MTI fact that MTI offers a scholarship in corrosion. Subsequent publications. The database was developed by Granta and to the meeting I received inquiries on the scholarship. I resides on the MTI website. The documents are searchable supplied the link to the scholarship to those that inquired. by keywords. The documents can be searched one at a time, by chosen groups of documents or all the documents. The Gordon Conference on High Temperature corrosion is held every two years and by tradition always at Colby The MTI website now has a button allowing members to go College. Attendees stay in the dorms and eat communal directly to Granta for searching documents. The documents meals in the cafeteria. On alternate years there is a are only available on the members side of the MTI website. conference on aqueous corrosion. Additional documents will be Because the student poster session was so successful, plans added as published from area already underway for a second poster session. MTI may completed MTI projects provide a copy of the Microstructure Atlas as a prize for and as requested by the best poster at the next Gordon Conference. This year MTI members to the prize was a gift certificate supplied by Springer, a book meet their needs. publisher.

4 Knowledge Management PDC Brainstorming The Knowledge Management PDC held a three hour evening brainstorming session at AmeriTAC 105 in June. Eileen Chant of Becht Engineering organized a survey that was used to evoke ideas that will help to develop new projects and other activities of practical value to our members and to the CPI. Among the 23 ideas generated, the topic of “sustainability” generated the most interest. 2011 MTI Bert Krisher Memorial Scholarship There was also a large amount of interest in new topics and This year’s scholarship was awarded to Ulrich Pflanz methods for training and keeping up–to–date and following who recently earned a Bachelor’s Degree in Surface codes and regulations. These topics have been broken into Technology and Materials Science at the Aalen University, groups that will be explored by the Knowledge Management Ostwürttemberg, in eastern Baden–Württemberg, Germany. PDC and other groups within MTI. He was presented the award by MTI Board Members, Paul Manning/ Haynes International and Robert Sinko/ Eastman Chemical at NACE CORROSION 2011. Ulrich attended Thermal Spray Seminar MTI’s EuroTAC meeting In Leverkusen 28–29 March and In conjunction with AmeriTAC 106 in Nashville, presented a paper on Development and Verification of a Tennessee, MTI will offer a half day seminar on Thermal New Stress Oriented Hydrogen Induced Cracking Test Spray Coatings. This versatile and specialized industry offers Method. 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 Stress Corrosion Cracking of DuPont will be taking the lead role in organizing the The revision of MTI’s publication #15, Stress Corrosion technical content of the program and will be presenting Cracking is underway. A project team of more than 30 based on his years of experience applying these techniques participants formed and a revising author was identified and to solve Materials issues at DuPont. A training DVD of the selected. The author is one of the original authors, Dr. Dale seminar will be produced and offered to MTI members for McIntyre. company training opportunities. The team together with the revising author identified a proposed list of revisions and additions to the book. Large Tanks The book is one of the classic MTI documents widely MTI has funded a project to write a comprehensive report known within MTI and in the chemical industry outside of on Large Diameter FRP Storage Tanks. This manual, MTI. The revision will be of great value to MTI members covering specifications, procurement, general design and to the industry in general. guidelines, fabrication and assembly of large diameter tanks will be written by Maverick Applied Science, Inc. Industry use of these types of tanks has increased greatly in recent CRAs Seminar years, and currently no industry standards or Best Practices Five speakers from MTI member companies gave a seminar exist for such large diameter FRP storage tanks. This project at AmeriTAC 103 in Baltimore on how recent changes will capture the current state–of–the–art, and will serve as in manufacturing processes for austenitic stainless steels a guide to improve safety, reliability and applicability of this affect their properties, microstructure, and surface quality. technology to the entire industry. 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.”

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

Benefits of Membership MTI membership provides a variety of benefits that include: • Access to a network of materials engineering specialists with many years 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. • Members actively participate in the selection and definition of MTI projects. This participation provides members 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. • Members have immediate access to information being developed by MTI projects that is not available to non – members. • Participation in the Technical Advisory Council meetings held each year is an excellent source of practical training 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 Mission MTI’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: • Rapid and efficient solutions to problems • Access to an expertise-based network that includes some of the world’s foremost materials technologists for immediate and vetted consultation • A pool of cooperative research funding that multiplies the collected membership dues • An opportunity to select, scope, and lead projects conducted by others • Privileged access to internally developed information and project output • A searchable database of more than 30 years of Forum questions and discussion In addition, MTI helps member companies achieve bottom-line savings by transferring existing knowledge into commonly used 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 plant staff, and often become the in-house expert (i.e., the “go- to person”) for materials technology solutions. In addition, the interaction among materials specialists and the leadership opportunities within MTI enhance career development.

6 Report of the Chair – Board of Directors

Contrary to the typical politicians who promptly INCREASE THE EFFECTIVENESS OF complain about the previous administration KNOWLEDGE TRANSFER – MTI’s business upon entering office, I have only good things to is creating knowledge and effectively transferring report about the health and vitality of the MTI that knowledge for the benefit of its members, organization I inherited from Dale Heffner and but in what form? All forms! Knowledge flows the previous MTI Board. MTI membership has through the organization verbally at meetings, in remained steady despite continued economic hardcopy products, via the MTI website and the challenges throughout the world. In fact, new TAC forums. With ever – increasing dependence candidate member companies attend and express on vetted high – quality electronic information, interest at most every meeting. The previous MTI must continue to excel at knowledge transfer. Board and the dedicated MTI Staff deserve credit IMPROVE PROJECT DEFINITION, for the current condition of MTI. SELECTION AND IMPLEMENTATION – Moving forward requires a path and a strategy. The primary path of knowledge creation is via The great New York Yankee catcher Yogi Berra projects — the very heart and origin of MTI. This said, “If you don’t know where you are going, you year, we celebrate the first funded project to come will wind up somewhere else!” Once again, past solely from AsiaTAC, and we continue to see and present Directors gathered last fall for what EuroTAC develop as a project and networking has become known as the “Baltimore Brainstorm” tool instead of just a source of training for young to plot MTI’s future. The event generated 5 engineers. Issues such as project size, scope and objectives with motivated groups pursuing each. the usefulness of the Roadmap will be addressed. MAINTAIN AND EXPAND MEMBERSHIP ENSURE MTI STAFF SUCCESSION – AND MEMBER SERVICES OFFERED With the majority of Staff of a similar age, the GLOBALLY – This effort brings focus to organization must put plans in place and set a serving and retaining current members as well course for continued leadership and success. as identifying and courting new members. As There are many components to the term always, recruiting activities are centered on ‘Sustainability’, and this is one. chemical producer companies who bring both With the support of my Vice – Chair Maria technical expertise and demanding challenges Oestergaard, our fellow Directors, legal counsel (read project ideas) to the organization. Having and an outstanding group of committed a membership weighted with such “producer” individuals who constitute the MTI Staff, companies automatically makes MTI membership your Board of Directors will strive to take enticing to the best equipment fabricators and MTI toward continued success. material suppliers whose complimentary expertise brings further value to the organization. Also In closing, I would like to congratulate Bill Fort with too many supplier members, the MTI (formerly of Shell Global Solutions) and MTI organization would become no different than the Executive Director Jim Macki as the newest MTI exposition floor at a corrosion convention. Fellows. Both typify the qualities and character exhibited by this esteemed group of individuals DEFINE AND PROMOTE THE VALUE now numbering twelve. Many thanks for your OF MTI – While related to the first objective contributions to the success and rich history somewhat, the idea behind this effort has more of MTI. 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 Ed Naylor both inside and outside the organization. Chair, Board of Directors

7 Report of the AmeriTAC Chair– Technical Advisory Council

Having an interest in history, I’ve taken the MTI still maintains the Forum on line for rapid liberty of reviewing my predecessor’s annual questions and answers, in archived form to reports and I find that change and challenge for retrieve past information, and in lively discussions MTI is addressed in every one of them. I find it at our TAC meetings. Our TAC Structured interesting that although MTI constantly evolves, Forums are still beneficial with TAC 104 hosting expands, and changes strategy, procedures, and a panel from Rice University to learn about the manners of accomplishing tasks, it still remains National Corrosion Center in Houston and a true to its core values of bringing value to its separate speaker to learn about the use of rubber membership. It does this by vetting and linings for the CPI. TAC 105 presented a panel disseminating information, training, and discussion on the Design and Fabrication of networking. I feel honored to be elected by the Thick Walled Vessels. Training stays paramount TAC membership to carry on this tradition. with an Elastomers training course at TAC 104 Thank you! and a Thermal Spray Course scheduled for TAC So what has changed tor TAC? We’ve lost a few 106. We continue to host Monday evening members but we’ve also gained new members “Brainstorming” Sessions targeted to a specific in these tough economic times. We currently PDC. This has proven to be a wonderful platform have 56 companies in the organization and for generating projects. we are actively pursuing a plan laid out by the Speaking of Projects, they continue to keep Board for recruiting new members, especially coming forth with 7 approved AmeriTAC producer companies. The growth of both projects over the last three meetings. With AsiaTAC and EuroTAC are exciting to watch. busy work schedules and tight budgets for the We have a new strategic plan with two Goals Membership, MTI and TAC leadership continue having direct impact on TAC, 1.) Increasing to strive for changes that help its members on the Effectiveness of Knowledge Transfer and 2.) projects. One of the ideas recognizes a need to Improving the Project Identification, Selection, identify and develop procedures so that TAC and Implementation Processes. TAC now has representatives who are unable to attend TAC a full complement of Project Development meetings may vote by proxy for projects. Committees (PDCs) champions for all 6 PDCs. In closing, I would like to thank all of the MTI We are planning to strengthen TAC by defining members, MTI staff, and the Board for their help. the functions of Champions for Project Teams If you have questions or suggestions that you and PDCs and holding training for those who would like to discuss, please contact me or volunteer for those positions. Looking ahead to David Barber (AmeriTAC Vice Chair). next year, we have a challenge to formulate a new Roadmap to define where TAC wants to go and discover the means to get there. TAC individuals should also have access to a new MTI Website in 2012. Robert J. Sinko So what stays the same for TAC? The ability to AmeriTAC Chair get rapid and vetted information to help solve our companies’ materials problems is unchanged.

8 Report of the AsiaTAC Chair– Technical Advisory Council

In the last twelve months, AsiaTAC experienced At the June face – to – face group meeting, fast and steady growth, partly due to the fast member representatives participated in economic recovery and growth in the region of AsiaTAC’s project funding approval process Asia Pacific. for the first time. MTI Associate Director AsiaTAC 2010, held in September 2010, Jesse Chen was present to witness the vote, as was once again successful, with 73 people AsiaTAC members approved a Fastener Quality representing 24 member companies in training class under the China Bolting project. attendance. That compares with 18 member Subsequently, funding for this project was companies participating in 2008 and 20 formally approved by MTI’s Board of Directors in member companies attending in 2009. its June 2011 meeting. This project nomination process was an exciting development as it enables The 2010 meeting started with a technical AsiaTAC to be more confident and efficient in training course on the subject of “Corrosion and obtaining funding necessary for the execution of its Prevention,” delivered by Bayer expert Mr. projects of interests to the region. Zhinong Zhao. That class was followed by a full day of panel discussions focused on five different AsiaTAC held a second Inspector Training for technical topics, addressing subjects of specific FRP Equipment session in Hong Kong in April interest to participating member companies. The 2011, which is the repeat of the same successful final day of the meeting provided a summary of class conducted in Shanghai in 2008. The second AsiaTAC’s project development efforts. session attracted 24 participants from both China and Southeast Asia, representing 11 MTI member Our organization has also undergone some and non-member companies. Once again, Juan changes in the last year. With former AsiaTAC Bustillos provided the lectures, which were Vice Chair Mr. Knuth Schweier of Bayer expertly translated side-by-side by Henry Ye of returning to Europe, member company DuPont and Chak Wong of Bayer. representatives elected Mr. Albrecht Girgensohn of Bayer to fill this key position. Mr. Girgensohn’s There are other training opportunities on the participation has greatly strengthened AsiaTAC. horizon. These include the Fastener Quality Training class mentioned above and other In another important development, we possible topics resulting from projects being identified four technical areas of focus for worked on by AsiaTAC, including Chinese/ Project Development Committees (PDCs) and International Standard Comparison, Fitness for nominated PDC Leaders for each, including: Service and others. • Metallurgy and Physical Failure Analysis – Ryan Yang / Air Products and Chemicals We are actively preparing the next AsiaTAC in • Corrosion and Corrosion Protection – September 2011. This is always our biggest event. Guangbin Rao / BASF Everyone is enthusiastic about it. With more • Mechanical Integrity and Reliability – member companies’ active participation, stronger Judy Yang / DuPont team organization, and continued support • NDT and In-service Inspection – from MTI, we are confident that this annual Luo Gan / The Dow Chemical Company conference will be another successful event, and our organization will continue to gain momentum We expect that the newly established PDCs and grow. will 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. Henry Ye AsiaTAC Chair

9 Member Companies & Designated Representatives

Electro Chemical Engineering Air Liquide Bayer Technology Corrosion Materials and Manufacturing Co. Paris, France Services GmbH Baker, Louisiana Emmaus, Pennsylvania J. Furtado Leverkusen, Germany R. A. Muro D. K. Heffner M. H. Renner

Air Products and ELLETT Industries Ltd. Chemicals, Inc. Port Coquitlam, Allentown, Pennsylvania Becht Engineering Co., Inc. Det Norske Veritas British Columbia J. Hoffman Liberty Corner, New Jersey Dublin, Ohio R. D. Gill E. Chant C. E. Jaske

Engineers India Limited The Dow Chemical Company AkzoNobel New Delhi, India Midland, Michigan Amsterdam, The Netherlands BP V. R. Krishnan E. L. Liening E. R. Naylor London, England W. K. Blanchard

ExxonMobil Chemical Albemarle Corporation Celanese Corporation Dow Corning Baytown, Texas Baton Rouge, Louisiana B. J. Fitzgerald H. T. Wells Dallas, Texas Midland, Michigan A. H. Rakhe M. Cook

FMC Corporation Allegheny Technologies Philadelphia, Pennsylvania Incorporated DuPont Company S. Kesavan Pittsburgh, Pennsylvania Chevron Energy Wilmington, Delaware C. A. Botti Technology Company S. P. Springer Richmond, California G. J. Kusinski Haldor Topsoe A / S Asahi Kasei Corporation Lyngby, Denmark Toyko, Japan Dynamic Materials M. J. L. Oestergaard M. Nakahara Boulder, Colorado ConocoPhillips, Inc J. Banker Houston, Texas D. R. McIntyre Haynes International, Inc. BASF Corporation Kokomo, Indiana Eastman Chemical Company P. E. Manning Florham Park, New Jersey Kingsport, Tennessee B. McCurry G. S. Whittaker Cornerstone Chemical Company Waggaman, Louisana D. McIntyre Hellenic Petroleum S. A. Thessaloniki, Greece I. A. Melas

10 Honeywell Morristown, New Jersey Rolled Alloys P.A. Inc. Suncor Energy D. E. Kaye Temperance, Michigan Houston, Texas Calgary, Alberta Canada P. Whitcraft O. Galloway J. Mitchell

Jiuli Hi-Tech Metals Huzhou, Zhejiang, China D. Lee Polycorp SABIC Syncrude Canada Ltd. Elora, Ontario Canada Riyadh, Saudi Arabia Fort McMurray, Alberta Canada D. Nolan H. Schrijen M. Anderson

Lloyd’s Register Praxair, Inc. Energy Americas, Inc. Titanium Fabrication Corp. Danbury, Connecticut Sandvik Materials Technology Houston, Texas Fairfield, New Jersey J. E. White Sandviken, Sweden T. P. Munsterman M. Senatore G. Dunn

LyondellBasell Industries RathGibson Saudi International Channelview, Texas Lincolnshire, Illinois Petrochemical Company K. Kirkham D. R. Moore Jubail Industrial City, Saudi Arabia TOTAL SA Paris, France A. Biggs F. Dupoiron

RL Industries Fairfield, Ohio Mitsui Chemicals, Inc. Schmidt+Clemens GmbH+Co B. M. Linnemann Tokyo, Japan Lindlar, Germany H. Matsuda D. Jakobi Tricor Industrial, Inc. Wooster, Ohio Shell Global Solutions C. S. Young Roben Manufacturing, Inc. International B.V. Lakewood, New Jersey The Hague, The Netherlands L. R. Hurst Nickel Institute K. Wyrough Toronto, Ontario Victaulic G. Coates Easton, Pennsylvania M. J. Sewell Sumitomo Metal Industries, Ltd. Tokyo, Japan The Roberts Company H. Anada Winterville, North Carolina Outokumpu, Inc. M. Eshelman Schaumburg, Illinois P-E. Arnvig Webco Industries, Inc. Sand Springs, Oklahoma W. G. Bieber

11 Report of the EuroTAC Chair– Technical Advisory Council

As you will probably already have read in gratitude to Maria Oestergaard for all of her the Board of Directors Chair report, MTI is hard work and help during the last few years and continually planning for the future. This is not would like to wish her well in her new role as just the case with regard to the “more general Vice – Chair of the Board of Directors. goals” as discussed by Ed Naylor, but this is also While on the subject of change, in my role as the situation with regard to activities within the Chair of the Website Committee I would like to different regions. mention that MTI is also currently in the process When looking back at the recent European of completely revamping and updating the meeting, a number of phrases come to mind website. This is not something that is currently such as “well attended,” “interesting sessions,” visible to any members, but behind the scenes, and “lively discussion,” but one thing above all the architectural look and feel of the site is being else stuck in my mind. To borrow a well known adapted to make navigation and the transfer of saying, “the only constant is change.” information much easier. The MTI website is an The MTI organization in Europe is striving to integral part of the organization and many of the evolve for a number of reasons. We are all part benefits of MTI membership including: of one MTI, and although most materials and • Privileged access to internally developed corrosion-related issues know no geographical information and project output boundaries, the way they are addressed can and • A searchable database of more than 30 does vary from region to region. The success of years of Forum questions and discussion the organization can be measured by how well it serves the actual needs of its members, and the Both of these web – centered features will autonomy each region has been given within allow existing knowledge to be transferred the MTI framework will allow us to do that, into commonly used practices. As such, it providing we continue to get the necessary also needs to move with the times and take input from the members. advantage of new technologies and ideas. This is a long-term commitment, and at various stages The discussion and ideas obtained during the during the development, we will update you on last meeting, such as more frequent but shorter the progress being made, starting in the Fall 2011 meetings around a specific topic and allocating and finishing Phase 1 in Spring 2012. more time to discuss specific questions, problems or projects, have provided the Steering Team All in all, a number of interesting and important with a path forward in planning the type and developments will help us to adapt the challenges the content of upcoming meetings in which the ahead! 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! Michael Turner I am pleased to announce one important change EuroTAC Chair to our organization, that Natalie Gelder from BASF was elected to the position of Vice – Chair. At this point I would also like to express my

12 Executive Director’s Letter

These are exciting and challenging times for hotels and other vendors, collects fees and issues MTI. There are over 40 active technical projects receipts, pay bills for local services, and answers from our three regional TACs. Each year we hold emails. Staff members participate in all of our five TAC meetings: three in North America, project meetings and steering team meetings one in Europe, and one in China. In addition, to provide valuable guidance for planning and our AsiaTAC group holds five face – to – face execution of our activities in China. (f2f) meetings on a bimonthly schedule. Designing and implementing the new MTI web Training is becoming a significant benefit site is progressing nicely under the direction of for MTI members. AsiaTAC and EuroTAC our web site committee (Chaired by Michael meetings usually include a one – to two – day Turner) with input from consultant RMC. The training program associated with their meetings. contractor for the new web site is MemberClicks, Additional training programs are scheduled on Inc. They are an association technology provider an as – needed basis. The most recent was FRP focused on small associations. Our goal is to Inspector Training conducted in April 2011 in integrate our membership database, our web site, Hong Kong. We are planning additional training the archived forum, Google search, and Granta programs in Asia, Europe and North America. documents onto one server or one virtual server. One of our goals is to improve members’ remote The plan is to provide a preview of the new access to our training programs on the Internet. web site during October 2011 and launch it by The plan is to record then refine and format February 2012. our training programs so that members can Debby Ehret, Operations Director, has been access them as necessary without traveling. We elected to the BOD of the St. Louis Chapter will be experimenting with various options for of ASAE (SLSAE). MTI has benefited from accomplishing this during the next couple of her participation in various ASAE and SLSAE meetings. Indeed, at least one Associate Director activities and especially the networking and will be assigned to improve the efficiency and training. Congratulations Debby! quality of MTI’s training programs. Finally, I wish to thank the BOD for honoring MTI’s increased activities and member me as the 12th recipient of the MTI Fellow participation in China is requiring increased award. It is especially nice to be recognized MTI staff support including a local virtual office. by one’s peers and associates. The MTI virtual office in Shanghai, which is operated for us by MCI International, has become an essential resource for supporting our member activities in China. Our team in Shanghai works closely with MTI St. Louis staff and especially James M. Macki Associate Director Jesse Chen. MTI – China Executive Director handles local phone inquires, sets up AsiaTAC and Project meetings, negotiates contracts with

13 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: Paul E. Manning Eugene L. Liening Senior Market Manager & Metallurgist Senior Materials Engineering Associate Cheryl A. Botti Haynes International, Inc. The Dow Chemical Company Manager, Market & Product Development Kokomo, Indiana Midland, Michigan ATI-Allegheny Ludlum Allegheny Technologies Incorporated Srini Kesavan Michael Turner, EuroTAC Chair, Ex Officio Pittsburgh, Pennsylvania Principal Engineer Senior Consultant – Materials Technology FMC Corporation AkzoNobel Kelly E. Wyrough Philadelphia, Pennsylvania Amsterdam, The Netherlands Technical Services/Sales Roben Manufacturing, Inc. Paul K. Whitcraft Dale K. Heffner Lakewood, New Jersey Director of Quality Safety & Engineering Vice President Rolled Alloys Electro Chemical Engineering & Edward R. Naylor, Chair BOD Temperance, Michigan Manufacturing Co. Senior Materials Engineering Associate Emmaus, Pennsylvania AkzoNobel David Barber, Amsterdam, The Netherlands AmeriTAC Vice Chair, Ex Officio Not Pictured: Materials Engineering Associate Maria Jose Landeira Oestergaard, The Dow Chemical Company Henry Ye, AsiaTAC Chair, Ex Officio Vice-Chair BOD Midland, Michigan Materials Engineering Consultant Principal Engineer, Senior Materials Specialist DuPont Engineering and Technology Haldor Topsoe A/S Steven P. Springer Wilmington, Delaware Lyngby, Denmark Senior Consultant, Materials Engineering DuPont Company Standing, Left to Right: Wilmington, Delaware Robert Sinko, AmeriTAC Chair, Ex Officio Associate Materials Engineer Eastman Chemical Company Kingsport, Tennessee

14 Directors & St. Louis Staff

Seated Left to Right: Tony Scribner Lori Elgin Associate Director Administrative Assistant Heather Stine Associate Director Standing Left to Right: Katherine Reinecke Administrative Assistant Emory Ford Jesse Chen Associate Director Associate Director Barry Greene Associate Director Debby Ehret Bill Watkins Operations Director Associate Director James Macki Executive Director

15 Technical Advisory Councils 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.

Robert J. Sinko, AmeriTAC Chair 1, 2, 3 Cheryl A. Botti 1, 2, 3 Andreas Furukrona 3 Associate Materials Engineer Manager, Market & Product Development EMEA Business Development Manager Eastman Chemical Company ATI-Allegheny Ludlum Sandvik Materials Technology Allegheny Technologies Incorporated David Barber, AmeriTAC Vice Chair 1 Otis Galloway 1, 2, 3 Materials Engineering Associate Clive Breeden 3 President The Dow Chemical Company Metallurgist P.A., Inc. BP Henry Ye, AsiaTAC Chair 2 Robert D. Gill 1, 2, 3 Materials Engineering Consultant Eileen Chant 1, 2, 3 Vice President, Sales DuPont Engineering and Technology Manager of Technology ELLETT Industries Ltd. Development & Support 2 Albrecht Girgensohn, AsiaTAC Vice Chair 2 Becht Engineering Co., Inc. Rao Guangbin Head of Mechanical Integrity Materials Engineering & Technical Inspection Mechanical Integrity Department Daniel D. Christian 3 BASF Corporation Bayer Technology and Engineering Director–Power Market Sales 1, 2, 3 (Shanghai) Co., Ltd. Europe–Middle East–India Dale K. Heffner Victaulic Vice President Michael Turner, EuroTAC Chair 3 Electro Chemical Engineering Senior Consultant –Materials Technology Gary Coates 1 & Manufacturing Co. AkzoNobel Consultant 1, 3 Nickel Institute John J. Hoffman Natalie Gelder, Materials Engineering Community Lead EuroTAC Vice Chair 3 Marc Cook 1, 2, 3 Air Products & Chemicals, Inc. Materials Engineer Technical Reliability Engineer 3 Inspection & Materials Engineering Dow Corning Patrice Houlle Engineering & Maintenance Director Europe, Business BASF Corporation Peter Cutler 3 Development and Technical Marketing Director Promotions Haynes International 1 Hiro Anada Nickel Institute Manager of Technical Service Lindell R. (Bob) Hurst 1 Sumitomo Metal Industries, Ltd. Vinay P. Deodeshmukh 1, 2, 3 Senior Materials and Corrosion Engineer Senior Staff Engineer Shell Global Solutions International B.V. 1, 2, 3 Michael J. Anderson Haynes International, Inc. Area Leader - Materials, Dietlinde Jakobi 1, 2, 3 Inspection & Engineering Services François Dupoiron 1, 2, 3 General Manager - Research & Development Syncrude Canada, Ltd. Materials and Corrosion Expert Services Centrifugal Casting Division TOTAL Petrochemicals Schmidt + Clemens GmbH + Co Poul-Erik Arnvig 1, 3 1 Vice President Market Development Hasse Eriksson 3 Carl E. Jaske Outokumpu Stainless- North America Global Product Certification Manager Senior Principal Engineer Det Norske Veritas Det Norske Veritas (USA), Inc. Sascha Bergamin 2 1, 2, 3 Asia Pacific Business Development Manager Milton Eshelman 1, 2, 3 Dan E. Kaye Sandvik Materials Technology Senior Design Engineer Staff Engineer – Reliability The Roberts Company Honeywell Albert Biggs 1, 2, 3 1, 2, 3 General Manager, Brian J. Fitzgerald 1, 2, 3 Srini Kesavan Maintenance & Technical Services Senior Engineering Associate Principal Engineer Saudi International ExxonMobil Chemical Company FMC Corporation Petrochemical Company 1 Jader Furtado 1, 2, 3 Yong Joo Kim W. Keith Blanchard 1 Air Liquide International Vice President Technology Senior Corrosion/Materials Advisor Expert–R&D: Physical Metallurgy Webco Industries, Inc. BP Air Liquide Ken Kirkham 1, 2, 3 Senior Advisor LyondellBasell Industries

16 V. R. Krishnan 1, 2, 3 Dallas R. Moore 1, 2, 3 Mark J. Sewell 1 DY, Chief Consultant Consultant & Management Resource Manager of Engineering Materials Technology Engineers India Limited RathGibson Victaulic

Greg J. Kusinski 1, 2, 3 Tim Munsterman 1, 2, 3 Steven P. Springer 1 Advanced Materials Research and Technology Director / Engineering Senior Consultant, Development Engineer Lloyd’s Register Energy Americas, Inc. Materials Engineering Chevron Energy Technology Company DuPont Company Masao Nakahara 1, 2, 3 Rocky Kuykendall 1, 2, 3 General Manager Chang-Ching Sun 2 Vice President of Engineering Asahi Kasei Chemicals Local Sector Head, End Users & Projects Titanium Fabrication Corp. Outokumpu Asia Pacific Ltd. Edward R. Naylor 1 Denny Lee 2 Senior Materials Engineering Associate Johan van Roij 3 Deputy G. Manager AkzoNobel Senior Materials and Corrosion Engineer Jiuli Hi-Tech Metals Shell Global Solutions International B.V. Hidenori Ogawa 3 John Leonard 1 Technical Manager Helen Y.H. Wang 2 Sales Director Sumitomo Metal Industries, Ltd. President Asian Operations Jiuli USA Inc. Haynes International Maria Jose Landeira Ostergaard 1, 2, 3 Zhou Ling 2 Principal Engineer, Senior Materials Specialist Yunxiang (Winnie) Wang 2 PCE Engineering Specialist Haldor Topsoe A/S Senior Materials / Corrosion Engineer The Dow Chemical Company BP Ruben Parga 1, 2, 3 Jan Links 3 Technical Sales Engineer, Metallurgy Hardin T. Wells 1, 2, 3 Senior Materials Specialist Corrosion Materials Sr. Advisor – Mechanical Tech Service The Dow Chemical Company Albemarle Corporation Stephane Pauly 1, 2, 3 Brian M. Linnemann 1, 2, 3 Business Development Manager Jim E. White 1, 2, 3 Engineering Manager Dynamic Materials Corporation Associate Director RL Industries, Inc. Praxair, Inc. Shuo Peng 2 Deepak C. Mahadeshwar 2 Manager, Asia R&D Center Kelly Wyrough 1, 2, 3 Mechanical Engineer Victaulic Technical Services/Sales Shell Global Solutions International B.V. Roben Manufacturing, Inc. Ashok H. Rakhe 1, 2, 3 Hiroyasu Matsuda 1, 2, 3 Fellow Engineer Zha Xiaochun 3 Director, Production & Technology Center Celanese Corporation Manager Mitsui Chemicals, Inc. Jiuli Europe Office Michael Renner 1, 3 Satoshi “Toshi” Matsumoto 2 Vice President Materials Technology/ Ryan Yang 2 Manager of Technical Service Mechanical Integrity Materials Engineer, Asia Sumitomo Metal Industries, Ltd. Bayer Technology Services GmbH Air Products & Chemicals, Inc.

Ben McCurry 1 Bernhard Rijpkema 2 Daniel Yiptong 1, 2, 3 Materials & Inspection Engineer Senior Consultant – Polymeric Materials Materials and Process Engineering Manager BASF Corporation AkzoNobel Polycorp Ltd.

Dale R. McIntyre 1, 2, 3 Harry Schrijen 1, 2, 3 Chuck S. Young 1, 2, 3 Consultant Metallurgy Senior Material & Welding Specialist Business Development ConocoPhillips Manufacturing Competence Center Tricor Industrial SABIC Dennis McIntyre 1, 2, 3 Li Zhang 2 Principal Engineer Equipment Reliability Zach Schulz 1, 2, 3 Principal Engineer / Head of Section Cornerstone Chemical Company Applications Engineer Det Norske Veritas Rolled Alloys Ioannis Melas 1, 2, 3 Licheng Zhang 2 Metallurgical Engineer, Marcelo Senatore 1 Managing Director China Inspection Department Technical Marketing Nickel Institute Hellenic Petroleum S. A. Sandvik Materials Technology

1 AmeriTAC 2 AsiaTAC 3 EuroTAC

17 Financial Statements – June 30, 2011

STATEMENT OF FINANCIAL POSITION STATEMENT OF ACTIVITIES JUNE 30, 2011 YEAR ENDED JUNE 30, 2011

Assets Unrestricted Net Assets Current Assets Revenues Cash and cash equivalents $ 385,730 Membership dues $ 1,528,352 Certificates of deposit 2,457,575 Interest 93,700 Accounts receivable 87,839 Publication income 29,728 Accrued interest receivable 23,333 Meeting fees 27,535 Publications inventory 89,978 Investment loss ( 1,674 ) Prepaid expenses and deposits 6,779 Total Support and Revenue 1,677,641 Total Current Assets 3,051,234 Expenses Property And Equipment Projects 740,203 Equipment at cost 104,914 Salaries 432,546 Less accumulated depreciation 72,648 Meeting expenses 124,548 Total Property and Equipment, net 32,266 Travel 87,299 Total Assets $ 3,083,500 Payroll taxes 57,505 Membership development & retention 46,662 Liabilities and Net Assets Telephone & communications 37,294 Current Liabilities Retirement contributions 33,636 Accounts payable and accrued Liabilities $ 43,212 China operations 32,697 Deferred income 766,200 Insurance 32,336 Total Current Liabilities 809,412 Office supplies 31,708 Net Assets Professional services 31,075 Unrestricted 2,274,088 Rent 26,369 Total Liabilities and Net Assets $ 3,083,500 Cost of publications 14,740 Postage 10,603 Depreciation 9,597 Printing 9,288 Taxes and licenses 472 Loss on asset retirement 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

See accompanying notes to the financial statements.

18 Independent Auditors’ Report

STATEMENT OF CASH FLOWS Board of Directors YEAR ENDED JUNE 30, 2011 Materials Technology Institute, Inc.

We have audited the statement of financial position of Cash Flows from Operating Activities the Materials Technology Institute Inc. (a non–profit Change in net assets $( 81,154 ) organization) as of June 30, 2011, and the related statements Adjustments of activities and cash flows for the year then ended. Depreciation 9,597 These financial statements are the responsibility of the Increase in reserve for Organization’s management. Our responsibility is to express inventory obsolescence 13,698 an opinion on these financial statements based on our audit. ( ) (Increase) decreas in assets We conducted our audit in accordance with auditing Accounts receivable ( 50,039 ) standards generally accepted in the United States of Prepaid expenses 35,155 America. Those standards require that we plan and perform Other receivables 5,828 the audit to obtain reasonable assurance about whether Publication inventory 3,709 the financial statements are free of material misstatement. Increase (decrease) in liabilities An audit includes consideration of internal control over Accounts payable ( 51,096 ) financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the Deferred revenues 6,850 purpose of expressing an opinion on the effectiveness of Net Cash Used by Operating Activities ( 107,452 ) the Organization’s internal control over financial reporting. Cash Flows from Investing Activities Accordingly, we express no such opinion. An audit also Purchase of property and equipment ( 29,903 ) includes examining, on a test basis, evidence supporting Loss on asset retirement 217 the amounts and disclosures in the financial statements. Redemption of certificates of deposit 831,000 An audit also includes assessing the accounting principles Purchase of certificates of deposit ( 650,000 ) used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Change in fair value of investments 1,674 We believe that our audit provides a reasonable basis for Net Cash Provided by Investment Activities 152,988 our opinion. Net Increase in Cash and Cash Equivalents 45,536 Cash and Cash Equivalents, In our opinion, the financial statements referred to above Beginning of Year, as Restated 340,194 present fairly, in all material respects, the financial position Cash and Cash Equivalents, End of Year $ 385,730 of the Materials Technology Institute Inc. (the Organization) as of June 30, 2011, and the changes in its net assets and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

Kiefer Bonfanti & Co. LLP August 31, 2011

19 Notes to Financial Statements – June 30, 2011

1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Inventories: The Organization maintains an inventory of publications which report the results of its research projects. Direct costs of editing and The summary of significant accounting policies is presented to assist in production are capitalized and a unit value is established for each publica- understanding the Organization’s financial statements. These accounting tion. Inventories are stated at the lower of cost or market with cost being policies have been consistently applied in the preparation of the financial determined by the first-in, first-out method. Organization management has statements. ascertained that the inventory of publications is subject to obsolescence due to advances in technology and other factors affecting the industries Organization: The Organization was incorporated under the name Materials it serves. Accordingly, management has elected to establish a reserve for Technology Institute of the Chemical Process Industries, Inc. on December obsolescence with respect to ascertaining the realizable fair market value of 13, 1976 pursuant to the laws of the State of New York as a tax exempt its publications. The Organization charged $13,698 against income for the organization under the Internal Revenue Service Code Section 501(c)(6) year ended June 30, 2011 to increase this reserve. to engage principally in the business of sponsoring research projects for the chemical process industries. Effective December 4, 2003, the Organization Accounts Receivable: Accounts receivable are stated at the amount changed the name of the Organization to Materials Technology Institute, management expects to collect from balances outstanding at year end. Inc. The member companies are located in various countries. Management of the Organization evaluates the collectability of individual accounts. At June 30, 2011, all accounts receivable balances are expected Basis of Accounting: The financial statements of the Organization have to be collectible, and therefore, a valuation allowance is not considered been prepared on the accrual basis of accounting. necessary.

Use of Estimates: The preparation of financial statements in conformity Income Taxes: The Organization is exempt from income taxes under with generally accepted accounting principles requires management to make Section 501(c)(6) of the Internal Revenue Code. estimates and assumptions that affect certain reported amounts and disclo- sures. Accordingly, actual results could differ from those estimates. Financial accounting standards for uncertain tax positions prohibit financial statement recognition of the impact of a tax position if the position is not Financial Statement Presentation: A description of the three net asset cat- “more likely than not” to be sustained on audit, based on the technical egories follows: merits of the position. The standards also provide guidance on measure- ment, recognition, classification, transition, and disclosure requirements for Unrestricted Net Assets — Includes resources available for the sup- uncertain tax positions. The adoption of these standards had no impact on port of operations, which have no donor-imposed restrictions. the financial statements. The Organization’s federal Form 990 for tax years 2008 and later remain subject to examination by taxing authorities. Temporarily Restricted Net Assets — Includes resources for which donor-imposed restrictions have not been met. Subsequent Events: The Company has evaluated subsequent events through August 31 2011, the date which the financial statements were Permanently Restricted Net Assets — Includes resources for which available to be issued, for possible additional recognition or disclosure. donor-imposed restrictions are permanent. 2) INVENTORIES No temporarily or permanently restricted net assets were noted for the year ended June 30, 2011. Inventories at June 30, 2011 consisted of the following:

Cash and Cash Equivalents: The Organization considers all highly liquid Finished publication inventory $ 166,840 investments with an initial maturity of twelve months or less when pur- Less reserve for obsolescence 76,862 chased to be cash equivalents. Total Inventories $ 89,978

Investments: The Organization’s Board of Directors maintains a policy of 3) CONCENTRATION OF CREDIT RISK limiting its investments to certificates of deposits with maturities of one year or longer. Investments are presented in the statements of financial position Financial instruments that potentially subject the Organization to at fair value. Unrealized gains and losses are included in the change in net concentrations of credit risk consist principally of temporary cash assets in the accompanying statements of activities. investments. The Organization places its temporary cash and long term investments with financial institutions and limits the amount of credit Property and Equipment: Property and equipment are stated at cost, or exposure to any one financial institution. As of June 30, 2011, the fair market value if donated, less accumulated depreciation. Depreciation Organization’s temporary cash and certificates of deposit were within insured is provided on the straight-line method over the following estimated useful limits. lives. 4) FAIR VALUE MEASUREMENTS Office furniture and equipment ...... 5 – 7 years Financial Accounting Standards establish a framework for measuring fair Depreciation expense for the year ended June 30, 2011 was $9,597. value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy Expenditures over $1,000 for purchases and for major renewals and gives the highest priority to unadjusted quoted prices in active markets for betterments that extend the useful lives of property and equipment are identical assets or liabilities (level 1 measurements) and the lowest priority capitalized. Expenditures for repairs and maintenance are charged to to unobservable inputs (level 3 measurements). The three levels of the fair expense as incurred. value hierarchy under the standards are described as follows:

Revenue Recognition and Deferred Income: Revenue is recognized in the Level 1 Inputs to the valuation methodology are unadjusted quoted period the income is earned. Membership income is typically received in prices for identical assets or liabilities in active markets. advance. Accordingly, membership income is earned ratably over the peri- od, with the unearned portion shown as deferred income at the Statement Level 2 Inputs to the valuation methodology include: of Financial Position date. • Quoted prices for similar assets or liabilities in active markets;

• Quoted prices for identical or similar assets or liabilities in inactive markets;

20 Schedule of Annual • Inputs other than quoted prices that are observable for the asset or liability; Membership Dues for 2012

• Inputs that are derived principally from or corroborated by Annual Sales Year 2012 observable market data by correlation or other means. (US$ Billions) Dues – US$ If the asset or liability has a specified (contractual) term, the Sales < 0.2 ...... $ 11,100 level 2 input must be observable for substantially the full term of 0.2 < Sales < 0.4 ...... $ 15,200 the asset or liability. 0.4 < Sales < 0.8 ...... $ 19,300 0.8 < Sales < 1.5 ...... $ 23,500 Level 3 Inputs to the valuation methodology are unobservable and 1.5 < Sales < 3.0 ...... $ 27,700 significant to the fair value measurement. 3.0 < Sales < 6.0 ...... $ 31,800 6.0 < Sales < 12.0 ...... $ 35,900 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 12 < Sales < 25 ...... $ 40,100 fair value measurement. Valuation techniques used need to maximize the 25 < Sales < 50 ...... $ 44,300 use of observable inputs and minimize the use of unobservable inputs. 50 < Sales < 100 ...... $ 48,400 100 < Sales < 200 ...... $ 52,600 The inputs or methodologies used for valuing investments may not be 200 < Sales < 400 ...... $ 56,800 an indication of the risk associated with investing in those securities. 400 < Sales < 800 ...... $ 60,900 Investments in collective investment funds are valued at the net asset 800 < Sales < 1,500 ...... $ 65,000 value per unit on the valuation date. Furthermore, the Organization believes its valuation methods are appropriate and consistent. The use of different methodologies or assumptions could result in a different fair value A formula is used to determine the annual dues measurement at the reporting date. for engineering, design, and construction firms. Please contact the MTI office for specific information. The Organization evaluates all investments at the level 1 input level.

5) EMPLOYEE BENEFIT PLAN

The Organization maintains a qualified savings plan under Internal Revenue Code section 401(k) for employees who meet certain age and length of service requirements. Subject to statutory limits, qualifying employees Basis for Assessing Company’s may elect to defer a portion of their salary. The Organization currently matches 100% of the employee deferrals not to exceed 5% of compensation. Membership Dues Matching contributions were $33,636 for the year ended June 30, 2011. Dues for membership are generally based upon the total sales 6) OPERATING LEASES of the member company and its affiliates. Dues for specific classes of members are as follows: As of June 30, 2011, the Organization was obligated under non-cancelable operating leases for its office facilities and certain office equipment which Producers: Dues for Producer members will be determined expire between June 2012 and June 2015. The future minimum lease from the established dues schedule and will be calculated on payments under the leases are as follows: the basis of the most recent audited Corporate CPI sales. For Years Ending June 30, Amount privately held corporations, the total corporate sales of units 2012 $ 26,174 related to the CPI must be certified by an officer. 2013 3,398 2014 3,398 Suppliers: Dues for Supplier members will be determined from 2015 3,398 the established dues schedule and will be based on the most Total Future Minimum Lease Payments $ 36,368 recently audited total sales of the corporation. For privately Leasing expense for office facilities and for office equipment was $26,369 and held corporations, the total corporate sales of units related to $3,398, respectively, for the year ended June 30, 2011. the CPI must be certified by an officer.

7) COMMITMENTS The Board of Directors may make exceptions to this policy in cases where, in its judgement, the affiliates of the applicant, The Organization is a party to several research projects requiring estimated even though they are related to the chemical processing payments of approximately $1,119,237 over the remaining life of existing projects as of June 30, 2011. industry, cannot reasonably be expected to benefit from the membership in MTI. 8) PRIOR PERIOD ADJUSTMENT Association memberships will be considered on a case-by-case A prior period adjustment has been made to net assets as of June 30, 2010 basis, with regard to acceptance, dues levels, and conditions of to more properly reflect balances of accrued paid time off for the employees membership. of the Organization, to include additional cash held for the inventory, and to accrue additional expenses in the prior year. The aggregate change decreased net assets by $13,153.

Graphic Design: O’Neal Design, St. Louis, Missouri

21 About Materials Technology Institute

The 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.

Materials Technology Institute, Inc. 1215 Fern Ridge Parkway • Suite 206 • St. Louis, Missouri 63141–4408 U.S.A. Tel: 314.576.7712 • Fax: 314.576.6078 E–mail: mtiadmin@mti–global.org • Home Page: www.mti–global.org