Aircraft Financing

Addis April 2007 Chamsou Andjorin

BOEING Capital Corporation Aircraft Financing Environment

Capital Providers 2003 2004 2005 2006 2007

Lessors R/Y Y G G G

Commercial Banks R/Y G G G G

Public Debt / Capital Markets R R R/Y Y G

Export Credit Agencies G G G G G

Private Equity / Hedge Funds G G G G G

Tax Equity R R Y Y G

Airframe and Engine Manufacturers R R/Y G G G

G SatisfactoryY CautionaryR Major Concern Y/G Change Sources of Aircraft Financing – Boeing Deliveries ($)

2003 2004 2005 2006

8% 4% >1% 1% 16% 18% 38% 21% 29% 17% 31% 35% 1% 25% 26% 30% 18% 30% 18% 26% 20% 17%

Leasing companies Export credit Bank debt

Public debt/capital markets Cash/other sources Manufacturer Global Fleet Operating Lease Content

30%

25%

20%

15%

10%

5%

0% 1965 1970 1975 1980 1985 1990 1995 2000

Leasing demand is strong and growing Evolution of Aircraft Finance

Tomorrow

Today Aircraft Asset

Airline Credit Airline Credit

Air craft Asset Yesterday

Airline Credit

Aircraft Asset

Managing risk through asset differentiation Airline Performance Aircraft Portfolio Investment vs. Aircraftsuperiorless with investment: volatile re Aircraftsuperiorless with investment: volatile re Percent of Revenues -10% 10% 15% 20% 25% -5% 0% 5% 9419 9820 022004 2002 2000 1998 1996 1994 Profit Margin Profit Portfolio Lessor A/C Major Profit Margin Profit Average Airlines ICAO turns turns Half of the Operators From 2000 Are No Longer in Business

237


241 48% New 80


117 206


303 44% New 305


352 51% New 45% New 7


12 42% New

20002000



2005

Half of the current operators are new since 2000 What Makes an Airplane a Great Investment ?

 Airplane capabilities (range, speed…)

 Number of engine types available

 Part of a family of airplanes

 Environmental friendliness

 Simplicity of re-configuration

 OEM support for model

 Many airplanes sold …

 To lots of different customers…

 With geographic distribution of sales

Liquidity and stable residual value performance Engineering Aircraft for Capital Markets

 Designing airplanes with  Supporting airplanes with capital markets input capital markets input

Ops Center MyBoeingFleet.com Website • Materials management World Wide Web • Statistical analysis • Data/software management

MRO Partners / Suppliers Airlines / Financiers

Engineering aircraft liquidity Designing Aircraft for the Capital Markets

• Market driven • Modular interior Product • Trans regional Commonality • Standardization Strategy • Multi-business model scope • Engine interchangeability

• Open architecture Systems/ • Composites Airframe • e-Enabled

Life -cycle residual value enhancement Cape Town Treaty in Full Force and Effect March 1, 2006

Panama July 2003 Ethiopia December 2003 Nigeria December 2003 Pakistan January 2004 USA October 2004

Oman March 2005 Ireland August 2005 Malaysia November 2005 Senegal January 2006

Mongolia October 2006 Angola April 2006 Cape Town Treaty

Kenya October 2006 Afghanistan July 2006 South Africa January 2007 Colombia February 2007 Indonesia March 2007

Enhancing the legal framework Evolving Global A/C Finance Infrastructure

Cape Town Treaty

OECD

IASB EUROCONTROL

European BANK FOR Aviation INTERNATIONAL Safety SETTLEMENTS Agency

AWG – the voice of our industry Ex-Im Bank is Crucial to Developing Markets

50% 44% Ex-Im % of Boeing Deliveries 37% 40% Ex-Im % of Boeing Exports 33%

30% 27% 24% 19% 20% 20% 18%

10% % of Deliveries % of

0% 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Units 54 52 18 22 34 62 72 56 49 72 68 53 52 88

Important safety valve Ex-Im Bank Support by Region 1996-2005 (Dollar Percentage of Aircraft Portfolio) Russia 3%

Americas Asia, 12% Australia, Africa South Pacific 8% (ex-China)(ex-China) 38%

Middle East 10%

Europe 17% 17% China 12% Ex-Im Bank Financing in Africa (US$M)

 More than $3B in support for 10 African companies TAAG Angola Air Algerie Air Namibia $99 since 1996 $318 $355 Tunis $355 Air Air Senegal $36 SAFAIR $17 $190

Ethiopian Airlines South African $347 $444

Royal Air Maroc Kenya Airways $487 $535 Additional Ex-Im Bank Support

 “Pre-owned” (or used) aircraft − U.S. manufactured aircraft − Not previously exported (with limited exceptions) − U.S. refurbishment, reconfiguration and overhaul work  Cargo conversions − U.S. manufactured aircraft − U.S. design work − U.S. materials − U.S. labor

Support throughout value chain Capital Airline Providers Customers

BoeingBoeing

Opinion Makers