Financing and investing in engines

GE - Aviation Financing and investing in engines September 19, 2006 The information contained in this document is GE proprietary information and is disclosed in confidence. It is the property of GE and shall not be used, disclosed to others or reproduced without the express written consent of GE, including, but without limitation, it is not to be used in the creation, manufacture, development, or derivation of any repairs, modifications, spare parts, designs, or configuration changes or to obtain FAA or any other government or regulatory approval to do so. If consent is given for reproduction in whole or in part, this notice and the notice set forth on each page of this document shall appear in any such reproduction in whole or in part. The information contained in this document may also be controlled by the U.S. export control laws. Unauthorized export or re-export is prohibited.

Outline The equipment of choice world-class reliability and residual value New technology via R&D shared across product portfolio Major effort to certify engines and upgrades minimizes risk World-class support Field Service, diagnostics, etc. Service adds another dimension Non-type certificate holder parts 2

Installed base growing 8% CAGR GE, CFM and EA together comprise majority of fleet Engines in service Portion of worldwide jet fleet 43% 55% 64% 27,456 EA 71% 35,642 31% 8,125 GE CFM * 13,109 18,549 1995 2000 2005 2010 2015 CFM, CFM56, and the CFM logo are trademarks of CFM International, a 50/50 joint company between Snecma and General Electric Company 3

Delivering product reliability every day GE and CFM engines 655 million flight hours and growing A takeoff every 2 seconds Delivering beyond expectations Increasing departures decreasing events 120% 100% 80% 60% 40% 20% 0% Dec-97 Dec-99 Dec-01 Dec-03 Dec-05-20% -40% GE and CFM departures 105% increase (Cumulative averages) GE and CFM events -60% 54% decrease CFM, CFM56, and the CFM logo are trademarks of CFM International, a 50/50 joint company between Snecma and General Electric Company 4

with higher residual value Driven by maintenance cost, reliability, commonality, fuel burn & customer preference Expect trend to continue with GEnx set to power next generation twin-aisle aircraft 2005 Residual Value 767-300ER HGW (2000 vintage) $58.3MM $56.8MM CF6-80C2 PW4000 2005 Residual Value 747-400 870K MTOW (2000 vintage) B747-8 $94.5MM $89.9MM $80.0MM B787 CF6-80C2 PW4000 RB211-524 Source: The Aircraft Value Reference, October 31st 2005 Issue 29, Volume 1 5

Technology investment family additions Highest R&D commitment in history $7.1B since 2000 Total Engines R&D spend U.S. $M Service 05 Boeing 777-300ER GE90-115B Service 06 Service 05 EMBRAER 190 Service 07 CF34-10 1,200 Airbus A380 GP7000* ARJ21 CF34-10 800 Service 08 Service 04 09 Boeing 787 GEnx 747-8 GEnx 400 0 01 02 03 04 05 06E GE/Honda** *GP7200 developed by GE/P&W Engine Alliance **HF118 developed jointly by 50/50 JV between GE & Honda HF118 6

3D aerodynamics Features New blade shape better airflow Optimized turbine clearances Benefits 1.6% lower fuel burn better range/payload capability Longer time-on-wing better durability 7

Advancing technology on a state-of-theart engine architecture 2008 2006 2004 2000 1995 787 & 747-8 A380-800 777-200LR, -300ER 5 777-200ER 777-200 1 GE90-76B/85B 2 GE90-94B 3 4 GEnx nx GP7000 GE90-115B Using our experience to reliably delivery the next generation of mature but advanced technology 8

Advancing technology on a state-of-theart engine architecture 2008 2006 2004 2000 1995 787 & 747-8 A380-800 777-200LR, -300ER 5 777-200ER 777-200 1 GE90-76B/85B 2 GE90-94B 3D Aero 3 4 GEnx nx GP7000 GE90-115B HPT S1B, combustor chevron nozzle, composite case, advanced HPC Continuing to refine GE90 architecture, creates opportunity for technology backflow 9

CFM56 technology delivering customer value and service opportunity Generations 1& 2 Generation 3 Generation 4 Infusing technology into previous generations via upgrade programs Tech Insertion Improved fuel burn Lower maintenance costs Lower noise & emissions LEAP56 Rotating composites High stage loadings Low emissions Advanced acoustics CFM56-5C CFM56-5B/P CFM56-5B/3 CFM56-7B/3 CFM56-3 CFM56-5A CFM56-7 LEAP56 1984 CFM56 Technology Evolution ~2013+ CFM, CFM56, and the CFM logo are trademarks of CFM International, a 50/50 joint company between Snecma and General Electric Company 10

CFM56-5B & -7B Tech Insertion HP Compressor New blade aero design Improved EGT margin Lower fuel burn Combustor Lower NOx (up to 20%) Improved durability HP Turbine Low shock airfoil Improved cooling E LP Turbine Nozzle Improved cooling Lower scrap rate CFM, CFM56, and the CFM logo are trademarks of CFM International, a 50/50 joint company between Snecma and General Electric Company 11

New engine or upgrade rigorous certification process employed Multiple engines tested Ingestion water, ice, hail, etc. Emissions Stress test Endurance Over-temperature etc. Tests run on the ground and in-flight Ingestion Emissions Flight Test 12

New engine or upgrade rigorous certification process employed Multiple engines tested Ingestion water, ice, hail, etc. Emissions Stress test Endurance Over-temperature etc. Tests run on the ground and in-flight Stress Test 13

Every part rigorously tested and examined 14,000 flight cycles run before GE90-115B entry into service Equivalent to 17 years of airline operation Maturation programs 25,500 flight cycles run to date on GE90 25X today s fleet leader 14

Diagnostics and prognostics E G T H o t D a y M a rg i n a t T a k e o ff 6 0 5 0 4 0 3 0 2 0 1 0 0 E G T H D M v s. F L IG H T _ D A T E T IM E E G T H D M T R E N D D A T A 0 9 -J a n -2 00 1 29 - J a n -2 0 0 1 18 - F e b -2 00 1 10 -M a r-2 00 1 3 0 -M a r -2 0 0 1 19 - A p r-2 0 0 1 0 9 -M a y -2 0 0 1 2 9 -M a y -2 0 01 18 - J u n -2 00 1 08 - J u l- 2 00 1 2 8 -J u l- 2 0 0 1 Actively monitoring 10,000 engines and growing Evaluating key engine parameters 24/7 Constantly improving detection algorithms Prevented 60 events last year 46 events YTD Standard product support offering from GE and CFM F L IG H T D A T E T IM E CFM, CFM56, and the CFM logo are trademarks of CFM International, a 50/50 joint company between Snecma and General Electric Company 15

Backed with GE technical expertise 250 Field Service Engineers 450 dedicated Customer & Product Support Representatives 24/7 Customer Support Center US & China Technical Training Schools... US, China & France Global Operators Conferences 16

Serving global customers via our network Strother Field, KS ATI* Compton, CA ATI* Mentor, OH (HQs + Shop) Terre Haute, IN Standard Aero ** Canada GE Aviation Materials Dallas, TX GEES HQs + Shops Cincinnati, OH Unison/Elano Dayton OH On-Wing Support SM Centers Cincinnati, OH Dallas, TX NORDAM Europe Blackwood, Wales KLM ** Netherlands Air France ** France Cardiff, Wales MTU ** Germany Prestwick, Scotland Veresegyhaz, Hungary On-Wing Support SM Centers Heathrow, England Luton, England ATI* Derbyshire, England Central European Engine Services* Warsaw, Poland On-Wing Support Xiamen, China On-Wing Support Seoul, S. Korea IHI** Japan GEASO Singapore JAL ** Japan GE-Japan Yokoshibamachi, Japan GE/EGAT* Taipei Unison Industries Jacksonville, FL Accessory Services, Norwich, NY Grand Prairie, TX Rockford, IL Saltillo, Mexico Celma Petropolis, Brazil GEES Malaysia + On-Wing Support SM Centers Kuala Lumpur, Malaysia ATS Singapore GE-owned * Joint venture ** Service alliance 17

A new approach OnPoint SM Services that perform. Solutions that save. The basic product suite Maintenance Material Asset Management Overhaul On wing support New parts Used parts Technology upgrades Repair Spare engine leasing Diagnostics OnPoint Solutions Beyond the basic suite Feature long term commitment between GE and customer Address each value element Scope and value of service Risk transfer Payment method Commercial terms 18

GE-serviced engines stay on wing longer Time-on-wing (Normalized to time to 1 st SV) Serviced by GE 45% + more TOW Serviced by others GE can produce longer time-on-wing via OEM workscope OEM material OEM repair 65% of 1 st run TOW 44% of 1st run TOW Based on sample of CFM56-3 engines serviced at 2 GE shops and 3 non-ge shops CFM, CFM56, and the CFM logo are trademarks of CFM International, a 50/50 joint company between Snecma and General Electric Company 19

Addressing concerns non-type certificate holder parts PMA moving from low-tech to high-tech, safety-critical parts Significant potential to impact engine reliability and operability GE responding Working with FAA/EASA to address approval, certification & continued airworthiness concerns GE external policy GE Instructions for Continued Airworthiness do not apply GE internal policy remove non-tch parts at overhaul Number of non-tch part approvals (per FAA database, Commercial Transport Turbines) 44 New trend safety-critical parts 1,153 3,957 9,767 19,653 1988 1992 1996 2000 2004 20

Summary The product of choice setting the standard for reliability Maturing new technologies infusing into legacy fleets Employing rigorous certification process new engines, new technologies and upgrades Enhancing product support with real-time monitoring and global engineers Bringing added benefit thru Service Engaging regulatory agencies and customers with non-tch parts concerns 21