Aviation market is back worldwide

Transcription

1 GE Infrastructure Analyst Meeting November 2, 2005 GE Aviation Scott C. Donnelly November 2, 2005

2 Aviation market is back worldwide Airline Passenger Demand 2,800 2,600 2,400 2,200 2,000 1,800 Revenue Passenger Miles (Billions) Sept June June June June June June June ~2,500 Engine Orders 1,809 1,190 1, E Avg. Avg. 2 Donnelly What s new for GE since Paris Air traffic trends positive order book at all-time high 2005 Op profit year-to-date up 17% 2006 outlook positive GEnx won Continental on B787; won Qatar, ALAFCO on A350 Military awarded $2.4B Joint Strike Fighter development contract 3 Donnelly

3 Projected 2005 revenue ~$11.9B Military Engines & $3.6B Commercial Engine $5.1B Commercial Engines $3.0B 4 Donnelly Commercial aviation ~$8.1B revenue Military Engines & $3.6B Commercial Engine $5.1B Commercial Engines $3.0B 5 Donnelly

4 Commercial aviation business strategy Invest in technology Grow installed base Best customer value Target share of departures Grow service opportunity High-cycle applications Expand engine services Differentiate with technology Global footprint 6 Fleet growing despite cyclical market Engine Deliveries 2,000 1,500 Fleet in Service GE GE & Partners Engine Installed Base 40,000 30,000 1,000 20, , E 10F 15F 0 CFM International is a 5050 JV with Snecma EA is a 5050 JV between GE and Pratt & Whitney 7 Donnelly

5 Target share of airline departures Current Fleet* Avg. Daily Departures 8, Widebody** 19, Narrowbody*** 4, Regionals *Excludes Freighters **EA is a 5050 JV between GE and Pratt & Whitney ***CFM International is a 5050 JV with Snecma 8 Donnelly GE & CFM: Leading the industry over the last 10 years Regionals (GE) Single Aisle (CFM) * Twin Aisle (GE) Jumbo Twin Aisle (GE) Bombardier Embraer (CFM) A No Application No Application A * No Application *CFM International is a 5050 JV with Snecma 9

6 New technology next family additions Total Engines R&D spend $M 1,200 Service 08 Service SARs Fuel Boeing ER GE90-115B Boeing 787 GEnx Service Service EMBRAER 190 Airbus A E 747 Advanced GEnx Service Service Service CF34-10 GP7000* Airbus AirbusA350 A350 GEnx GEnx Service 07 ARJ21 CF34-10 GEHonda HF118 *GP7200 developed by GEP&W Engine Alliance 10 Donnelly GE, CFM & EA: Well positioned for the next 10 years Regionals (GE) Single Aisle (CFM) Twin Aisle (GE) Jumbo Twin Aisle (GE) Service 04 Bombardier Boeing 737 Boeing Advanced Embraer Airbus A320 Airbus A330 Boeing 777 Boeing 787 A ARJ21 GEnx (CFM) A Airbus A350 No Application (EA) *CFM International is a 5050 JV with Snecma **EA is a 5050 JV between GE and Pratt & Whitney A380 11

7 GE90 for the 777 Extended-Range version offered to customers in 2000 Jet Airways 10 AC Firm Air France 14+6L AC Firm 5 777F ER200LR777F orders to date Singapore Best operating economics - 22% more fuel efficient per seat - 16% lower seat mile cost GE 777 installed base growing since Extended-Range launch Emirates 4+26L AC Firm 19 AC Firm 50%+ 39% 27% GE* RR P&W 34% 21% 7% Pre-ER Post ER *GE90 is the sole source on the 777-ER application 12 Donnelly GP7200 for the A380 Leading with nearly 320 firm engine orders - Biggest cargo carrier FedEx - Biggest growth airline Emirates Engine deliveries begin 2Q 06 Significant hub-to-hub advantage - Cost and capacity EA is a 5050 JV between GE and Pratt & Whitney 13 Donnelly

8 CF34-10 Power for the EMBRAER and ARJ21 Improved passenger comfort on the E190 and % fuel burn advantage % lower shop visit cost - 20% longer time on wing - Engine maintainability replacement in 4 hrs ~6,500 total RJ Aircraft over next 20 years Embraer 190 enters service with JetBlue 14 Donnelly ecomagination breakthrough GEnx Airframer forecast A350 B787 3,119 Aircraft 2,857 Aircraft 260 Aircraft Continental, First Choice The B747A engine JAL, KAL, Air India, China, Air Canada Cargolux, NCA, Cathay Pacific, China Airlines, KAL Qatar, ALAFCO, GE wins pending wins Kingfisher, Air Europa Key GE campaigns TAM, ILFC B747 Advanced 15 Donnelly

9 Next generation 737A320 LEAP56 Harnessing GEnx technologies to set new standards for performance Fuel burn 10% better TAPS II Technology Lightweight composite structures Component technology Maintenance cost 25% lower Lower parts count Longer Life-Limited-Parts Emissions 50% lower 16 Donnelly Grow services opportunities Engine lifecycle revenue Average age 8 yrs. Parts and 7X New engines Design and test Yrs GEnx GP7000** GE90 CF34 CFM* CF6 JT8 *CFM International is 5050 joint venture with Snecma ** GEP&W Engine Alliance is a JV between GE and Pratt & Whitney 17 Donnelly

10 Invest in technology grow installed base Engines 20, E 2015 Forecast 15,000 10,000 5,000 0 GE CFM PW RR IAE GE CFM PW RR IAE GE CFM EA PW RR IAE - CFM International is a 5050 JV with Snecma - EA is a 5050 JV between GE and Pratt & Whitney 18 Donnelly Lean showcase high tech test facility Test Cycle Reduction 50% Average cycle time reduced 50% Annual double digit direct labor productivity Days X capacity increase with minimal resource additions 0 GE90 CF34-8C CF34-8E CF6 CFM Double digit shop cost reduction 19 Donnelly

11 Strong Commercial outlook Revenues ~10% AAGR ~$8B 10-15% $6.4B $3.0 Engines $2.2 $4.2 $ E 06F 20 Donnelly Military Systems ~$3.6B revenue Military Engines & $3.6B Commercial Engine $5.1B Commercial Engines $3.0B 21 Donnelly

12 Military Systems business strategy Position for future platforms Build on installed base Invest in future Enhance performance and reduce operations cost of legacy fleet Technology upgrades Improve customer MRO productivity Commercial best practice Performance Based Logistics (PBLs) 22 Largest portfolio of modern military engines Iraq, Afghanistan 75% of US Military frontline platforms are powered by GE Rotorcraft Combat TankerTransport Marine H-53H-53E B-1B C-5 Perry Class Frigate AH1YZ F-117A KC-10 Ticonderoga Cruiser AH-64 B-2 KCRC-135R Aegis Destroyer S-92 FA-18CDEF C-40 Sea-Lift NASSCO Amphibious Assault Wasp Class H-60 F-16CD A330 Deepwater 23

13 Sustaining development investment new product introduction every 5 months Military R&D Spend $M 600 F-16EF F110 SLEP F-15K H-60M US-101 UCAV X-45C E 06F 07F C-5M LHD-8 MMA T-50 UH-1YZ UH-60M LHD-8 F-16EF C5M F-16 SLEP LMS100 IN20 NH90-8E MH-60M LM US101 PRV J-UCAS C-X Deepwater LCS Mako JSF FREMM JSF LCA Korea PKX 24 Donnelly Technology upgrades customer value and GE installed base revenue T700 engine upgrade for Apache & Blackhawk - $2B opportunity engines planned Funding plan defined Improves fleet commonality, durability and power -5% power increase - 2X component life improvement Fleet Engines UH-60M Blackhawk US Army engine transition plan T700-GE-701C T700-GE-700 T700-GE-701 T700-GE-701D 05E 10F 15F 25 Donnelly

14 growth expanding PBLs Backlog ($B) New model for DoD 2.5 Jacksonville, Corpus Christi 4X+ since 04 Pay for performance 1.1 Improved fleet readiness Asset efficiency focus E 06F 26 Donnelly Continue military installed base win and create new service offerings Revenues ~7% AAGR $3.6B ~5% Engines & Development $3.1B $1.6 $1.9 $1.5 $ E 06F 27 Donnelly

15 GE Aviation ($ in billions) ~8% Invest in technology ~15% Grow installed base share of departures ~$11.9 Revenue $11.1 ~$2.6 $2.2 Win in China, India, Middle East OP Expand services footprint '04 '05E '06F Deliver customer productivity Aviation on track to deliver 2005 plan 28 Donnelly GE Infrastructure Analyst Meeting November 2,