2015 Battery Shipment Review and 5 Year Forecast. Dale Gospodarek, VP Marketing & Strategy

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1 2015 Battery Shipment Review and 5 Year Forecast Dale Gospodarek, VP Marketing & Strategy

2 2010 to 2014 in Review

3 Global OEM Vehicle Production Global OEM Vehicle Production grew slightly from 2013 to 2014, increasing 3.3% Moderate regional growth across the board in 2014 Source: IHS Automotive, Marklines Automotive

4 North America OEM Vehicle Production North American OEM Vehicle Production is up 3.6% in 2014 vs Growth is still lead by the US, up 4.5% from 2013 and 45% from 2010 Mexico continued steady growth showing a 6.6% increase in 2014 while Canada remained flat Source: IHS Automotive, Marklines Automotive

5 North America SLI Battery Shipments Trends by OE and Aftermarket Total North American Battery Shipments were 126M units in 2014 OE Shipments were up 8.3% in 2014 while Aftermarket shipments were flat at 0.4% vs. prior year Total North American shipments have grown at a compounded growth rate of 1.4% since 2010 Source: BCI Battery Council International 12ME December 2014

6 North America SLI Battery Shipments Trends by Segment All Channels The Automotive segment contributed to nearly half of the 989K units growth for North America in 2014 Heavy Duty and Powersports represented the remaining growth in 2014 Since 2010, all segments with the exception of Powersports, are showing positive compounded growth rates of 1%-3% Source: BCI Battery Council International 12ME December 2014

7 North America SLI Battery Shipments Trends by Segment Aftermarket Total Aftermarket volumes were up +0.4% (394K units) vs 2013 Automotive segment decline -0.3% (-206K units) Golf Cart up +6.1% or +263K Powersports +8.0% or 344K Over the last 5 years, nonautomotive segments are showing positive compounded growth rates, representing over 71% of the 1.3M unit growth Source: BCI Battery Council International 12ME December 2014

8 North America SLI Battery Shipments Trends by Segment - OE OE unit volumes continue their recovery, with the Automotive segment representing over 70% of total sales and growth in 2014 Source: BCI Battery Council International

9 Demand Drivers

10 Economy - Real GDP Growth Global GDP growth bounced back in 2014, Coming in at 2.8% compared to 2.5% in 2013 Growth led by Asia at 4.9%, with North America also strong at 2.8% Improvement in European GDP growth (1.4%) offset by decline in Latin America Growth (1.2%) Source: IHS Global Insights; Top 45 Economies

11 Disposable Income and Personal Consumption Real disposable personal income decreased -0.2% in March 2015 after an increase of +0.2% in February, according to the Bureau of Economic Analysis Real personal consumption expenditures in March increased +0.3%, in contrast to a decrease of less than -0.1% in February Source: Bureau of Economic Analysis

12 Consumer Confidence Consumer confidence has increased over the past year, and is now at its highest level in 11 years Source: tradingeconomics.com

13 Miles Driven Miles driven, adjusted for population growth, is up only +0.97% year over year Behavioral issues influencing miles traveled. Aging population Unemployment Ability to work remotely Communication technologies as a partial substitute for faceto-face interaction. Source: Department of Transportation March 2015

14 Unemployment Rates The National Unemployment rate for 2014 is 5.5% down -1.9pts vs prior year with the West having the highest rate Top 5 Decreases vs. PY: State Feb 14 Feb 15 Change Kentucky Rhode Island Illinois Michigan Colorado Rank Top 5 Highest Unemployment 2014 Rank State Feb 14 Feb 15 YOY Chg 1 1 Nevada Mississippi Louisiana California South Carolina Source: Bureau of Labor Statistics February 2015

15 US Vehicle Registration Trend

16 New Vehicle Sales New car sales have returned to prerecession levels Full year predictions on unit sales in the US are likely to reach 17.4M units on a Seasonally Adjusted Rate

17 Hybrid/Electric Vehicle Registrations There are 3M hybrid/electric vehicles in the US accounting for 1.7% of the total car parc, which is flat compared to prior year Model year 2010 & 2013 had the highest % of hybrid/electric vehicles, 3.7% and 4.0% respectively Source: VIO Experian Velocity 9/30/14

18 Consumer Research 44.0% of consumers anticipate failure (unchanged from last year) 60.2% of automotive battery consumers are Do-It-For-Me (DIFM) and require battery installation 3 out of 4 battery decision-makers are likely to use internet resources to help find a replacement battery for their vehicle Only 20% of battery decision-makers are familiar with batteries that have AGM technology Source: IMR Consumer Data 2014; Decision Process 2013; Spectrum Awareness Study 2014

19 Market Influences

20 LME Lead After a slight dip in recent months, LME is back trading in the $1,900/mt to $2,200/mt range and premiums continue to be flat. No indications of a significant change in either Source: LME; London Metal Bulletin

21 Regulatory Driver Increasing fuel economy and emissions requirements Miles per gallon 2013 actuals & future targets Observed (Requirement) 43(39) (2021) (31) Not defined 32(31) OEMs are meeting current MPG/emissions targets and are well positioned for 2015 U.S. mid-term review in 2017 to confirm 2025 regs Implementation of fuel efficiency technologies will be lead by Europe; others will follow as targets increase Confirmed Proposed

22 National Gas Prices Year-over-year price comparisons continue to reflect an overall savings for motorists The domestic oil market in the U.S is facing similar oversupply dynamics and concerns that rising U.S. production could outpace storage capacity is contributing to lower prices.

23 Current Climate The US CDC concludes: Blood lead levels once considered safe are now considered hazardous, with no known threshold. US EPA ambient air standards for lead under were lowered US EPA new stack emissions limits for secondary lead smelters reduced California Department of Public Health recommends significantly lower Blood Lead targets when considering new Permissible Exposure Limits US EPA Science Assessment finds Causal Relationship for memory and mood effects at low exposure levels Regulatory and local concerns affect secondary lead smelter in California EU extends End of Life Vehicle Directive that bans automakers all uses of lead in vehicles, grants exemption for batteries EU Determines lead use in batteries considered unavoidable and no viable alternatives are envisaged in the near future Exemption extended China Establishes Strict Entry Criteria For Lead-Acid Battery Manufacturers Mexico harmonizes emission limits for secondary lead smelters with US EU conducting review of lead exemption for possible extension

24 How NOT to manage Coal in the US Result: A de- facto ban on new coal power plants in US Proprietary & Confidential

25 Market Summary Optimistic Growth Unemployment rates continue to decline Car makers are profitable again Vehicles in operation growing The DIFM segment is growing and currently represents 60.2% of the market Proactive replacement remains steady Pessimistic Growth Government regulation is intensifying in areas of fuel economy, Environmental, Health and Safety, etc Miles driven is declining Climbing gas prices and weaker than expected employment figures suppressing Consumer confidence Vehicle complexity increasing Source: Internal JCI

26 2015 to 2020 Forecast

27 Global OEM Vehicle Production Global OEM vehicle production is expected to grow at a CAGR of 3.1% (18M vehicles) through 2020 The Asia-Pacific region will drive this growth Source: IHS Automotive, JCI Analysis

28 North America OEM Vehicle Production North America OEM Vehicle production is expected to grow 1.4% CAGR through 2020 The US Market continues to grow through 2020, with production increasing by a CAGR of 0.8% Mexico will grow at a CAGR of 6.2% Source: IHS Automotive, JCI Analysis

29 North America Battery Shipments Total North American battery shipments of are expected to grow at a 1.0% compounded rate through 2020 OE shipments are projected to grow at a 2.1% CAGR Aftermarket shipments are expected to grow at a 0.8% CAGR Source: BCI Battery Council International

30 North America Forecast Aftermarket: Key aftermarket indicators pointing to modest growth Expected to grow annually between 0.7% and 1.1% from 2015 through 2020, which equates to a compounded growth rate of 0.8% OEM: Key OEM indicators point to continued growth Will experience sales growth of 1.0% - 3.0% annually, increasing by a CAGR of 2.1% between 2015 and 2020