GE Commercial Aviation Services

Transcription

1 GE Commercial Aviation Services Henry Hubschman President and CEO GE Commercial Aviation Services (GECAS) July 18, 2006 This document contains "forward-looking statements" - that is, statements related to future, not past, events. In this context, forward-looking statements often address our expected future business and financial performance, and often contain words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," or "will." Forward-looking statements by their nature address matters that are, to different degrees, uncertain. For us, particular uncertainties which could adversely or positively affect our future results include: the behavior of financial markets, including fluctuations in interest rates and commodity prices; strategic actions, including dispositions; future integration of acquired businesses; future financial performance of major industries which we serve, including, without limitation, the air and rail transportation, energy generation, media, real estate and healthcare industries; unanticipated loss development in our insurance businesses; and numerous other matters of national, regional and global scale, including those of a political, economic, business, competitive and regulatory nature. These uncertainties may cause our actual future results to be materially different than those expressed in our forward-looking statements. We do not undertake to update our forward-looking statements. GECAS at a glance 1,400+ owned and 300 managed aircraft in fleet Relationships with more than 225 airline customers in 70+ countries Local presence with 21 offices worldwide Deep experience and domain knowledge Broad array of products a lessor, financier, and solutions provider First-in-class technical department Structured finance and capital markets skills for large, value-added transactions Pricing and risk discipline with proactive portfolio focus Backed by the GE brand Pitch Title /2

2 What has GECAS done the last few years? Pitch Title /3 Expanded our global footprint since 2001 To get even closer to our customers today Phoenix Mexico City Miami Cincinnati Toronto Stamford New York Shannon London Toulouse Luxembourg Sao Paulo Vienna Moscow Dubai Delhi Singapore Tokyo Beijing Shanghai Hong Kong Pitch Title /4

3 Diversified our product and service offerings to grow the business Leveraging experience for airport financing Component financing/management to unlock value in spare parts Freighter conversion program to extend value PK/debt-financing portfolio now $3B Engine leasing portfolio now $2B, 400+ engines Pitch Title /5 Imagination breakthrough: freighter conversions KITTY HAWK 7x SF 7x SF 3x SF 11x SF GECAS Freighter Conversions 52~ x SF 4x F 2001 Launch 2005 Pitch Title /6

4 First mover in new freighter programs Volumetric payload (lbs) * 200, SF 160, ,000 80, SF 40, SF 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 Range (nm) Pitch Title /7 First mover in new freighter programs Volumetric payload (lbs) * 200, ,000 Converted Freighters Offer Lower Cash Operating SF Costs Per Trip 23% 30% 120,000 80, F F SF DC8F F 40, SF 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 Range (nm) Pitch Title /8

5 Focused on fast-growing, low-cost carriers 276 Est F Pitch Title /9 Used our global remarketing capability to move/redeploy aircraft 36 from Varig ( 02-03) 20 from ATA ( 05) 7 from Aloha ( 05) 40 from Independence Air ( 05-06) 65 from US Airways/America West ( 05-07) Pitch Title /10

6 What is the outlook going forward? Pitch Title /11 Significant upside Economic growth + Expansion of low-cost carriers = Affordable travel for millions of new travelers Pitch Title /12

7 China s growth continues New orders from China top 350 units in 2005 Replacement need for 280+ older aircraft seen by 2010 China fleet forecasted to expand To 4,000 by 2025 Sources: Aviation Daily, Bear Stearns Pitch GE Company Title /13 Growth in India accelerating 52 million passengers forecasted for India by 2008 Four-fold increase from 2002 Demand for aircraft in India expected to triple current fleet to near 700 by 2020 Source: AirFinance Journal, Aviation Week Pitch GE Company Title /14

8 Huge potential for capturing share from rail travel Mumbai to Delhi by Express Rail Mumbai to Delhi by Air Trip time ~ 18 hours Trip time ~ 2 hours Fare (first class) US$75.00 Fare (LCC) US$48.00 Source: GECAS Research Pitch Title /15 Demand is growing steadily in Russia Passenger growth of ~7% per year But the Russian fleet is in need of renewal A requirement of aircraft per year Driven by replacement and growth Compounded by high fuel prices Need for 1,500 aircraft over the next 20 years Fleet growth/replacement hindered by: 1. Low rate of Russian aircraft production 2. Import tax on Western aircraft Source: AirClaims CASE Database, GECAS estimates Pitch GE Company Title /16

9 Growth in new EU countries lies ahead 30+ years of EU benefit Today: 4 million population ~175 aircraft 10 new EU members Today: 75 million population ~300 aircraft Source: CIA World Factbook, AirClaims CASE Database Pitch GE Company Title /17 Number of Aircraft / Population (m) Emerging country demand adds up USA Russia E. Europe Brazil China India At a similar ratio of aircraft to population, these countries would need: Russia E.Europe Brazil China India For a total of: 3,189 ac 1,650 ac 4,147 ac 29,123 ac 24,084 ac 62,193 ac Only 10% of this figure would represent an increase in the world fleet of ~37% Source: CIA World Factbook, AirClaims CASE Database Pitch GE Company Title /18

10 Massive freighter refleeting will be required Replacement of older, inefficient models with high fuel, labor, maintenance costs Growth in global trade, global sourcing and just-in-time inventory management Freighters in Service Existing Fleet + Replacement + Growth Incremental 1000Current / Retained Fleet 500 Current / Retained Fleet 0 '04 '07 '10 '13 '16 '19 '22 ' Existing Fleet Age >25 <25 Source: Boeing, GECAS estimates Pitch GE Company Title /19 Continued demand for regional jets Growing demand for 70- and 90-seat aircraft Match machine to mission/capacity to demand 80 percent of U.S. departures have <100 passengers 50 percent of U.S. departures have <50 passengers Increase in point-to-point flying Increasing demand worldwide for 50-seat aircraft Eastern Europe, India, L. America, Africa Replacement for 35-seat aircraft in U.S. Increase in point-to-point flying Use as just-in-time freighter Conversion to biz jet/corporate shuttle Source: Regional Aviation News Pitch GE Company Title /20

11 Yet risks remain Risk Sustained high oil prices Excess capacity GECAS Position Airline demand for newer, more efficient aircraft Restructuring capability/experience Experience through the cycles Economic downturn Ownership rights Restructuring capability/experience Experience through the cycles Continued implementation of Cape Town treaty Infrastructure in emerging regions Terrorism/event Financing in adjacent areas (airports, ATC, etc.) Strong airline relationships Pitch Title /21 GECAS forecasts Pitch Title /22

12 And our 2006 outlook remains positive $Millions % Net Income 520 Assets (Billions) ~ Est. Pitch Title /23 Pitch Title /24