Osmonics Profile

PRODUCT GROUPS APPLICATIONS

Generally low flow in: Power Beverage
Muni

TECHNOLOGIES
RO, UF, NF Desalination Ozonation New membranes improve performance and lower operating costs

GE OPPORTUNITY
Serving installed base Products complement GEWT Diversify market exposure Attractive technologies

Process Equipment

Standardized Skids Customized Skids

Pharmaceutical
35%
Power & Indus

11%
Healthcare

Medical Muni (low flow)

31%

Group Sales: $73.0

23%
Food & Bev

Filtration/Separation

Membrane Elements Cartridge Filtration

Others 15%

Low and High Flow Products in: Power Beverage Healthcare

RO, UF, NF, MF Cross-Flow Membranes Desalination Chemically stable RO/NF membranes Lower energy requirements for RO

Recurring revenue from consumables Utilize GE Betz customer touch points Differentiating technologies

Healthcare

17%

40% Indus 23%

Power &

Oil & Gas

Group Sales: $83.2

Food & Bev

Household

Multi-Port Valves and Controllers

Point of Entry (Softeners)Commer Membranes/Cartridge cial/Residential Filtration Point of Use (Filtration)

31%
Power & Indus Others - 12%

Chlorine tolerant RO Tankless RO system Higher efficiency RO membranes Lower cost RO elements Flapper valve technology

Improved competitive positioning of GE SmartWater Recurring revenue from consumables Attractive technologiesTankless RO, salt less softener
1

Household

57%

Industrial (certain valves)

Group Sales: $51.3

Attractive Segments and Technology Prepared at the Request of Counsel; Privileged and Confidential

Filtration & Separation Group

Filtration & Separation Group Overview

2001 Group Sales: $83.2M, Operating Margin: $7.5M Produces membranes and filter media used in crossflow membrane elements and filter cartridges

Two key technologies:

Membranes: based around the creation of a microporous membrane structure which is then converted into an element Cartridge filters: based around the creation of a microfiber and microporous membrane which is then converted into a cartridge

Over 95% of the sales are replaceable products which have a useful life varying from a single use up to 3 - 5 years

Filtration & Separation Group

Filtration & Separation Group Pure Water Crossflow Filtration process that treats: Water that comes from nature or that is potable

Process Crossflow

Filtration process that treats:

Water that has been affected by an animal, machine or human developed processes Fluids from foods, animals, plants Wastewater

Filtration & Separation Group

Filtration & Separation Group Overview

Customers: range from lab/medical device manufacturers to various types of industrial manufacturing and food/beverage processing companies Channels to market include OEMs, distributors, service companies, and direct sales Osmonics market share:
#1 position in high-margin process crossflow membrane elements #3 in crossflow membrane elements with a 16% share

Rapidly emerging position in cartridge filtration

Filtration & Separation Group

Filtration & Separation Group Strategy

Grow through market/application segmentation and break through products Leverage core competencies of basic material science, fluid dynamics, and application know-how
Knowledge Hub

Remove cost and variability from product and business transactions Re-define channels to market through direct end-user relationships

Filtration & Separation Group

Key Markets Served

Market
Water system filtration

Application
Oil & gas production separation & filtration

Selected Customers

Power & Industrial

Ford, Valspar, DaimlerChrysler, Oily waste recovery Electro deposition paint UT / Pratt Whitney, Nexen Petroleum, Safety& re-use stabilization & water Kleen, Kodak, General recycle Paint & ink filtration Motors, Exxon, FMC Acid processing and Plating bath reclaim filtration & recycling

Water system filtration

Cheese whey fractionation

High fructose sweetener filtration & concentration

Food & Beverage

Critical bottled water filtration

Wine clarification & concentration

ADM, Cargill, Danone (France), Coke, Pepsi, Gallo, GEA-NIRO, Alpha Lavall (Sweden), APV (Denmark), AmyLum (UK)

Filtration & Separation Group

Key Markets Served

Market
Water system filtration

Application
Transfer of DNA
HPLC / Clarification Dialysis final filtration

Selected Customers
Merck,Sigma-Aldrich, Pfizer, Medivators, Fischer Scientific, Schering-Plough, Novartis(Switzerland), Bayer (Germany) Sidmas and SWCC(Saudi), City of Clifton, CO Torrington, WY

Healthcare

Bio serum filtration

Medical diagnostic kits

Municipal

Water filtration & treatment Surface water pretreatment

Seawater desalting Ground water testing & analysis

Filtration & Separation Group

Key Markets Served

Market

Application
Water sediment removal
Distribution of standard products

Selected Customers
Good Water Warehouse, Fileder (UK), Harrington Plastics

Household

Electronics

Water system filtration Photo resist / stripper filtration

Printed circuit board processing filtration

Wafer polishing slurry filtration

Shipley, Seagate, Cabot Microelectronics, Nomura (Japan), Fairchild Semi Conductor, AMD

Filtration & Separation Group

Markets Served

2001 Sales By Market

Household Municipal 5% / $4.2 5% / $4.2
Electronics 5% / $4.2 Power & Industrial 40% / $33.3

2001 Sales By Geographic Region

Americas 5% / $4.2

Asia/Pacific 10% / $8.3

Healthcare 17% / $14.0

Euro/Africa 20% / $16.6 US/Canada 65% / $54.1

Food & Bev 28% / $23.3

Total 2001 Sales = $83.2M

Filtration & Separation Group

Membrane Elements - Pure Water Crossflow

Product Overview
Products include reverse osmosis, nanofiltration and ultrafiltration membranes and elements for commercial and industrial water purification Key applications include purification of water for drinking, commercial and industrial process uses, and seawater softening and desalting Core technologies include PA, CA, and proprietary 3 layer membranes, specialty polymers, and unique element designs Key features include high reliability and performance, with market specific designs and pricing, high temp RO products and low fouling three layer membranes

Customers
Osmonics machine base:
Coca Cola Fresenius

Replacement for 3rd party machines sold through distributors:

Pentair Ecolab

to end customers:
Intel Pepsi

OEMs using Osmonics components:

US Filter Ionics

Filtration & Separation Group

Membrane Elements - Process Crossflow

Product Overview Products include RO, NF, UF and MF products which utilize unique membrane and element construction for filtration and separation of process fluids Applications include food and dairy separations, product reclaim, waste minimization, oily water recovery Core technologies include proprietary three layer membranes, specialty polymers, hydrophilic PAN UF membranes, PS and PVDF membranes; utilize unique and robust element construction

Customers GEA NIRO APV Nordic (Denmark) ADM Eastman Kodak Cargill FMC DaimlerChrysler Alcoa General Motors V-Quip Tetra Pak

Key features include high reliability and performance in extreme operating environments involving high temperatures, low and high pH, high viscosity, high suspended solids, solvents, and aggressive cleaning

Filtration & Separation Group

Cartridge Filters - Depth

Product Overview

Customers End users such as:

Cabot Microelectronics Valspar Nexen Petroleum

Products include a full line of fluid cartridge filters which remove particles by entrapment throughout the depth of the media Applications range from sediment removal in water, pre-reverse osmosis and other water filtration to high end applications such as wafer polishing slurry filtration Core technologies include melt blown polymer micro-fiber and resin bonded fiberglass Key features include high efficiency, purity, long life and dirt holding capacity

Distributors such as:

Harrington Industrial Plastics

Private label customers such as:

USF / Plymouth Product Cuno Serfilco

Filtration & Separation Group

Specialty Separation Systems

Product Overview Products include standard & custom machines and systems for application of crossflow membranes to process fluid streams (WasteWizard & Mini Wizard) Key applications are industrial metal working fluids, including: Alkaline cleaners, mop water, vibratory finishing cleaning and synthetic coolants Core technologies includes patented hydrophylic PAN membrane and patented vortex crossflow machines Key features include ability to operate in heavy solids and high concentrations of oil

Customers Safety-Kleen Pratt-Whitney Delphi Automotive General Electric General Motors

Filtration & Separation Group

Additional Growth Opportunities

Opportunity
Development of small Point of Use specialty systems for applications beyond oily waste, thus tapping into volume potential of a broad market Development of non-spiral membrane devices for application in unconventional areas with lower fabrication costs Development of a capsule-like device with characteristics of a normal filter and a crossflow membrane element

Potential Results Develop businesses in areas such as acid recycling and other industrial fluids. Potential to sell thousands of standard units in applications of over $10M/yr
Growth in high volume application resulting in new economical applications

Penetrate market share of conventional filters with an easy to use high capacity device

Filtration & Separation Group

Additional Growth Opportunities

Opportunity Develop an ultrafiltration membrane module for use in applications like municipal treatment Development of a more energy efficient membrane system for seawater conversion Expansion of membrane technology into non-aqueous (solvent) applications

Potential Results Low cost, high quality filtration approach to retrofit conventional municipal systems Tap into long term growth of seawater conversion

Significant potential for application in pharmaceutical, petrochemical and food sectors