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GE Aviation Scott C GE Aviation Scott C. Donnelly February 15, 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 arise from the behavior of financial markets, including fluctuations in interest rates and commodity prices; from future integration of acquired businesses; from future financial performance of major industries which we serve including, without limitation, the air and rail transportation, energy generation and healthcare industries; from unanticipated loss development in our insurance businesses; and from numerous other matters of national, regional and global scale, including those of a political, economic, business, competitive or 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." This presentation includes certain non-GAAP measures as defined by SEC rules. As required by SEC rules, we have provided a reconciliation of those measures to the most directly comparable GAAP measures, which is available in our Supplemental Information file on our investor relations website at www.ge.com/investor. 1 / Donnelly Aviation industry is back Aircraft Orders Annual Pax (Bn) 00 00 2000+ 00 2.0 00 1.8 00 00 00 00 800 00 00 Average Average '01 - '04 '05 '01 - '04 '05 Yield Growth (%)* Cargo Growth * Inflation & USD adjusted Revenue Ton Kilometers (Bn) 0 184 5 0 (4.0)% 0.4% 5 0 5 0 155 5 0 5 0 Average Average ’01 – ‘04 ‘05 '01 - '04 '05 2 / Donnelly Passenger growth … worldwide 2005 Annual Revenue Passenger Mileage Growth India 24% China 16% Americas - 7% Middle East Europe - 6% 11% Asia - 6% (w/o India & China) 20 - 25% 10 - 20% O – 10% 3 / Donnelly Under-equipped by Western standards U.S. 6,650 Europe 4,750 China India 1,125 200 Number of Aircraft in country 1,125 Middle-class & 150 250 400 300 above population: MM MM MM MM 4 / Donnelly GE Aviation … business model • Differentiate w/ technology Installed base • Win lifecycle service CSA / upgrades / Inspections & repairs • Position for future platforms R&D, NPI • Everywhere in the world Global footprint 5 / Donnelly Projected 2006 revenue … ~$12.8B Military Engines & Services $3.7B Commercial Engine Services $5.7B Commercial Engines $3.4B Commercial Engine Services sales include GE’s 50% share of its CFMI JV with Snecma 6 / Donnelly Commercial aviation … ~$9.1B revenue Military Engines & Services $3.7B Commercial Engine Services $5.7B Commercial Engines $3.4B Commercial Engine Services sales include GE’s 50% share of its CFMI JV with Snecma 7 / Donnelly GE & CFM: Leading the industry over the last 10 years … Regionals (GE) Single Aisle Twin Aisle (GE) Jumbo Twin Aisle (CFM) (GE) * Bombardier Embraer (CFM) A340-200/-300 No Application A340-500/-600 * No Application No Application CFM International is a 50/50 JV with Snecma EA is a 50/50 JV between GE and Pratt & Whitney 8 / Donnelly New technology … next family additions Total Engines R&D Service ‘05 Service ‘08 spend $M •9/11 1,200 •SARs •Fuel Boeing 777-300ER GE90-115B Boeing 787 GEnx Service ‘05 ServiceService ‘04’09 800 EMBRAER 190 CF34-10 747-8 GEnx Service ‘06 Service ’10 400 Airbus A380 GP7000* Airbus A350 GEnx 0 ’01 ’02 ’03 ’04 ’05 ’06E Service ‘07 ARJ21 CF34-10 GE/Honda** HF118 *GP7200 developed by GE/P&W Engine Alliance **HF118 developed jointly by 50/50 JV between GE & Honda 9 / Donnelly GE, CFM & EA: Well positioned for the next 10 years Regionals (GE) Single Aisle Twin Aisle (GE) Jumbo Twin Aisle (CFM) (GE) Service ‘04 Bombardier Boeing 737 Boeing 767 747-8 GEnx Boeing 777 Embraer Airbus A320 Airbus A330 (CFM) Boeing 787 ARJ21 A340-200/-300 A340-500/-600 Airbus A350 No Application (EA) CFM International is a 50/50 JV with Snecma A380 EA is a 50/50 JV between GE and Pratt & Whitney 10 / Donnelly GE90 value … ask the airlines that fly it Aircraft Orders 777–300ER/200LR 97 A340–500/600 Air Canada Cathay Pacific Avion 30 26 Air India Jet Airways TAAG Angola 11 ‘04 ‘05 Best operating economics • 22% more fuel efficient per seat, 16% lower seat mile cost • GE 777 installed base growing since Extended Range launch 11 / Donnelly GP7000 certified … taking flight • Leading with 312 firm orders • Significant hub to hub advantage … cost & capacity • Certified December 2005 … A380 flight test 2Q06 • First Emirates engine cores shipped in December International Lease Finance Korean Air *GP7200 developed by GE/P&W Engine Alliance 12 / Donnelly CF34 … now a 70 & 90 pax playing field • Built from highly successful CFM56 technology • CF34-10E departure reliability exceeds 99% Embraer 190 • 500+ engines to be delivered to Embraer over next 3 years • EMB190: jetBlue, Copa, Air Canada • CRJ700: -8C5 upgrade gaining traction • CRJ900: more variants coming • Focusing on -8C5 upgrades & - Bombardier CRJ705 10 Block II SFC package 13 / Donnelly CFM56 … record year for single-aisle aircraft • 1,602 new orders in 2005 • Launched 737-900ER • Kicked-off LEAP56 … technology for the next generation 2006 focus: • Support … 15,400 engines around the world • Grow services … in China and India • –5B/-7B Tech Insertion … FAR33 certification • LEAP56 … define the engine and technologies CFM International is a 50/50 joint venture with Snecma LEAP56TM is a registered trade mark of CFM 14 / Donnelly Next generation 737/A320 … 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 LEAP56TM is a registered trade mark of CFM 15 / Donnelly CF6 … upgrades & 747 resurgence • Strong order book for 747-400 bridge to 747-8 • CF6-80E fuel burn advantage doubled by Airbus • Services backlog increased by $1B+ • Customers recognizing value & reliability • CF6 technology upgrades underway • Expand OnPoint Solutions 16 / Donnelly GEnx … what a difference a year makes 234 Air Canada Aviation Lease & Continental Japan Airlines Korean Air Air India Qatar Royal Air Maroc TAM Brazilian Airlines US Airways Finance Company 700 600 500 400 747-8 300 200 A350 GEnx Engine Orders 100 787 0 2004 2005 January ‘06 17 / Donnelly Fleet growing despite cyclical market Engine Engine Deliveries Installed Base 2,000 Fleet in Service (GE+CFM+EA) 40,000 GE GE+CFM+EA 1,500 30,000 1,000 20,000 500 10,000 0 0 ’95 ’00 ’05 ’10F ’15F CFM International is a 50/50 JV with Snecma EA is a 50/50 JV between GE and Pratt & Whitney 18 / Donnelly Invest in technology … grow installed base 2015 1990 2005 Forecast Engines 20,000 15,000 10,000 5,000 0 GECFM PW RR IAE GE CFM PW RR IAE GE CFM EA PW RR IAE CFM International is a 50/50 JV with Snecma EA is a 50/50 JV between GE and Pratt & Whitney Chart based on publicly available information & internal studies 19 / Donnelly Grow services Engine lifecycle revenue opportunities Design and test GEnx GP7000** 0 New engines Parts and Services Average age 8 yrs. GE90 CF34 CFM* 7X ** CF6 GE/P&W Engine Alliance is a 50-50 JV between GE and Pratt & Whitney *CFM International is 50/50 joint venture with Snecma JT8 40+ Yrs 20 / Donnelly Strong Commercial outlook ’03-’06 Revenues ~10% AAGR ~$9.1B $8.1B $3.4 $6.4B $3.1 Engines $2.2 $5.7 Services $4.2 $5.1 ‘03 ’05 ’06E 21 / Donnelly Military Systems … ~$3.7B revenue Military Engines & Services $3.7B Commercial Engine Services $5.7B Commercial Engines $3.4B 22 / Donnelly Largest portfolio of modern military engines Iraq, Afghanistan … 75% of US Military frontline platforms are powered by GE Rotorcraft Combat Tanker/Transport Marine F/A-18C/D/E/F C-5 Perry Class Frigate H-60 F-16C/D KC-767 AH1Y/Z Ticonderoga Cruiser Aegis Destroyer AH-64 T-50 C-40 S-92 B-2 A330 Sea-Lift NASSCO Amphibious Assault Wasp Class US101 B-1B KC/RC-135R FREMM 23 / Donnelly Sustaining development investment … new product introduction every 5 months Military R&D Spend $M 600 F-16E/F F110/ SLEP F-15K 400 H-60M US-101 UCAV X-45C 200 0 C-5M LHD-8 MMA ’01 ’02 ’03 ’04 ’05 ’06E ’07F JSF C-X LCS PRV C5M T-50 IN20 Mako LHD-8 US101 FREMM J-UCAS F-16E/F LMS100 UH-60M UH-1Y/Z MH-60M JSF LCA Korea PKX NH90/-8E F-16 SLEP LM2500++ Deepwater 24 / Donnelly Military utilizing commercial technology … F110 Service Life Extension Program (SLEP) Military Commercial F110 SLEP F-16 Service Life Extension • 3-D Aero compressor CFM56-5B/-7 A320/B737NG • Cooling optimized combustor • 3-D Aero Technology • N5 HPT Nozzles & Blades • Maintainability • Improved HPT shrouds • Redesigned augmenter 850 USAF F110 F-16/F-15 CFM56-5A/C A320/A340 Engine •FADEC Upgrades Funded CFM56-2/3 B737 Warfighter Readiness • Durability • Operability • Fuel efficiency F101 B-1B Worldwide Opportunity … $1.3B 25 / Donnelly Technology upgrades … customer value and GE installed base revenue • T700 engine upgrade for Apache & Blackhawk - $2B opportunity - 5700 engines planned UH-60M Blackhawk • Funding plan defined US Army engine transition plan 6000 • Improves fleet commonality, T700-GE-701C durability and power 4000 - 5% power increase T700-GE-700 - 2X component life 2000 T700-GE-701D improvement Fleet Engines T700-GE-701
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