AEROSPACE & ELECTRONICS BRENDAN CURRAN PRESIDENT 1
Aerospace & Electronics Overview and Results Market Outlook Technological Differentiation and Growth Summary 2
Crane Aerospace & Electronics 1904 Lear Romec 1943 Hydro-Aire 1947 P.L. Porter 1954 Merrimac 1956 Polyflon 1957 ELDEC 1958 Keltec 1969 Interpoint Fluid Management Cabin Systems Landing Systems Sensing Systems Power Solutions Microwave Solutions 1982 Signal Technology Heritage Brands with Decades of Proven Experience 3
Our Solutions Sensing & Utility Systems Power Solutions Cabin Systems Landing Systems Microwave Solutions Fluid Management Sensing & Utility Systems Power Solutions Cabin Systems Landing Systems Microwave Solutions Fluid Management Leading Technology, High Performance, Exceptionally Reliable 4
Our Customers Systems Aircraft Engines Operators Avio BAE Systems BE Aerospace Def. Logistics Agency GE Aviation Harris Honeywell Jet Propulsion Lab L3 Lockheed Martin Northrop Raytheon Rockwell Collins Thales UTAS Zodiac Airbus Bell Helicopter Boeing Bombardier Cessna COMAC Embraer Gulfstream HondaJet Lockheed Martin Northrop Grumman CFM GE Aviation Pratt & Whitney Rolls-Royce Airlines Militaries COMMERCIAL DEFENSE & SPACE AFTERMARKET Global Customers and Large Aftermarket Base 5
Aerospace & Electronics (in $ Millions) 2013 2014 2015 2016 2017G Sales 694 696 691 746 707 Operating Profit* 160 146 145 150 157 Operating Margin* 23.1% 20.9% 21.0% 20.1% 22.2% Aerospace & Electronics 27% Commercial Aftermarket 18% Military Aftermarket 8% OEM Military 27% OEM Commercial 47% Defense 35% Commercial 65% OEM 74% Aftermarket 26% Consistent High Returns While Investing for the Future * Excludes Special Items. Please see non-gaap Financial Measures tables for details. 6
2016 Key Messages Profitability Consistently high returns Focus on operating efficiency Positioned for margin % expansion Technology differentiation Growth Program execution Exceptional customer support R&D focus on next technologies Investments Developing talent Capacity expansion Positioned for Accelerating Long-Term Growth 7
Investing for Growth Fuel Flow Transmitter Test Facility Opened October 2016 Preparing for the Future with Strategic Investments 8
Aerospace & Electronics Overview and Results Market Outlook Technological Differentiation and Growth Summary 9
Aerospace & Electronics Outlook OEM Aftermarket Single aisle build rates 2016 Actuals strong Completion of Space Fence F-35 ramp-up Commercial positioned for stable growth M&U difficult YoY comparison Segment Sales 2016 2017G 2018 20 Commercial -1% 6% ++ Defense 36% -23% + Total OEM 11% -5% ++ Segment Sales 2016 2017G 2018 20 Commercial 0% -3% + Defense 1% -13% + Total Aftermarket 1% -6% + Space Fence Concluded; Successful 2016 M&U Programs 10
Commercial Market Outlook Key Indicators Change 2015 2035 Aircraft World GDP +2.9% Airplane Fleets +3.6% 50,000 40,000 Single-Aisle Driving World Fleet Growth Number of Passengers +4.0% Airline RPK +4.8% Cargo RTK +4.2% New Aircraft Deliveries +35,000 30,000 20,000 10,000 0 Single- Aisle Widebody Regional 2015 2035 Solid Commercial End Market Fundamentals Source: Deloitte 2017 Global Aerospace & Defense Sector Outlook, Airbus GMF, Boeing CMO, Embraer Market Outlook 11
Continuous Program Presence Development Airbus A330neo Fully Mature Boeing 737 Classic Boeing 747-400 Boeing 757 Boeing MD-80/90 Boeing MD-11 In Production Boeing 737NG Boeing 777 Boeing 787 Airbus A320ceo Airbus A330ceo Airbus A380 Bombardier CRJ7/9/1000 Embraer E-Jet Airbus A320neo Boeing 737 MAX Boeing 777X COMAC C919 Embraer E-Jet E2 Airbus A300/A310 Airbus A340 1970 2020+ Strong Production and Aftermarket Business Profile 12
Defense Market Outlook US DoD Budget FY2017 ($ in Billions) $600 $500 $400 $300 $200 $100 $0 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 Defense Spending Stabilized Overseas Contingency not included in Budget graph. OCO = 2015, $63B; 2016, $58.6B; 2017, $58.8B Source: Deloitte 2017 Global Aerospace & Defense Sector Outlook, UBS US Defense Outlook, Forecast International, Lockheed, National Defense Budget 13
Aerospace & Electronics Overview and Results Market Outlook Technological Differentiation and Growth Summary 14
Technological Differentiation Enhanced Performance Weight Savings Proven Reliability Highest Accuracy Increased Efficiency Hardware Durability 15
Technical Capability Engineering & Program Management Resources Other 76% Engineering 24% Innovative, Highly Engineered Solutions Provide Differentiation 16
Technical Innovation Connected Cabins Wireless Sensing Advanced Pumps and Transmitters High Power Management Electrification Directed Energy Landing Gear Monitoring and Control Advanced Microwave Systems Ensuring Enabling Technologies for Future Applications Source: Google Images, Pratt & Whitney, Lockheed, Boeing, Teague 17
Strategic Investments Drive Market Outperformance Significant Content on Major Programs Boeing 737 MAX Boeing 787 Boeing 777X Airbus A320neo Airbus A330neo Embraer E-Jet E2 COMAC C919 F-35 Fluid Solutions Brake Control Systems Power Solutions Sensing Solutions Tire Pressure Systems Boeing 737 MAX Boeing 787-9/10 Boeing 777X Airbus A320neo Airbus A330neo Embraer E-Jet E2 C919 F-35 $5.4B Total Lifetime Value Won $500M in Pursuit 18
Investing in Growth Opportunities Self Funded Engineering $70 10% $60 $50 9% 8% 7% $ Millions $40 $30 6% 5% 4% % of Sales $20 3% $10 2% 1% $0 2010 2011 2012 2013 2014 2015 2016 2017E 0% Engineering Spend Stabilizing 19
$ Millions Visibility to Long-Term Sales Growth $1,200 $1,100 $1,100 $1,000 $900 $820 $925 $800 $700 $600 $707 $775 $500 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Actuals 3% CAGR 5% CAGR New Programs Driving Growth 20
Aerospace & Electronics Adjacencies Airframe Systems Actuation Diagnostics Electrical Power Fluid Control Motion Control Advanced Sensing System Electronics Engine and Related Systems Electrical Power Lubrication Systems Engine External Systems Advanced Sensing Gearbox Systems System Electronics 21
Aerospace & Electronics Overview and Results Market Outlook Technological Differentiation and Growth Summary 22
Summary 1 Fundamental strategy remains consistent 2 Program wins driving future growth 3 Well positioned for new technology insertion opportunities 4 Vigilant in execution and profitability Well Positioned for Continued Profitability and Long-Term Growth 23
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