GE s Technology and Services

Transcription

1 GE s Technology and Services Analyst Meeting May 4, 2006 GE Aviation Services Overview Brad Mottier Vice President, Engine Services 2/

2 Aviation business model Differentiate with technology Win lifecycle service GEnx $7B sold to-date OnPoint solutions $30B+ backlog System optimization Used materials controls Everywhere in the world 05 global wins ~70% Delivering for our customers and shareholders 3 Services evolution Revenue $6.1 $ % 60% Products Services Products Services Build upon growing installed base up ~2X in 10 years Growing customized service agreement portfolio OnPoint Expanding into engine systems Unison Service growth nearly 4X in last 10 years 4

3 Aviation business model starts with the installed base New engine lifecycle Installed base Airline service Cost Revenue CF ,400 ~4,300 CFM* ,500 ~21,300 Design and test GEnx GP7000** 0 CF34 GE90 New engines CFM* CF6 20 yrs CF34 GE90 GP7000** GEnx ,800 Installed base expected growth ~90% in next 10 years ~6,400 ~1,500 ~500 ~1,600 *CFM International is 50/50 joint venture with Snecma ** GE/P&W Engine Alliance is a JV between GE and Pratt & Whitney 5 Grow services opportunities Engine lifecycle revenue Average fleet age 8 yrs. Parts and Services 7X Design and test New engines GEnx GP7000** 0 CF34 GE90 CFM* CF6 JT8 40+ Yrs ~40% of GE engines have not had their first shop visit *CFM International is 50/50 joint venture with Snecma ** GE/P&W Engine Alliance is a JV between GE and Pratt & Whitney 6

4 Customized Service Agreements growing with the installed base CSA backlog Solid customer base $40+ Southwest FedEx Frontier KLM China Southern $28 Win with growing carriers Ryanair Alaska Emirates Air Asia Singapore $ F Evolve with customer needs OnPoint new offerings Reduce customer cost 7 Technology roadmap delivers customer value and service opportunity Generations 1& 2 Generation 3 Generation 4 Infusing technology into previous generations via upgrade programs Tech Insertion LEAP56 Improved fuel burn Rotating composites Lower maintenance High stage loadings costs Low emissions Lower noise Advanced acoustics & emissions CFM56-5C CFM56-5B/P CFM56-5B/3 CFM56-7B/3 CFM56-3 CFM56-5A CFM56-7 LEAP CFM56* Technology Evolution ~2013+ *CFM International is 50/50 joint venture with Snecma 8

5 Helping customers win with technology Upgrades impact customer benefit Chosen by the world s leading airlines Maint. cost Fuel burn Residual value Savings over ~10 years ~$1.1B Total cash savings Southwest KLM Emirates FedEx Air China Alaska Airlines China Southern Continental Continually developing new upgrades GE90 3D aero kit CF6-6 turbine upgrade CFM56-3 TOW kit, CF6-50 turbine upgrade CF6-80A/C2 turbine upgrade CF34-3 set management, CFM56-5C/P kit CF34-8 upgrade CFM56-5/7 tech insertion, Tech CF6 *CFM International is 50/50 joint venture with Snecma 9 Growth used serviceable material and engine leasing $0.1 Sales 21% CAGR ~$0.2 $2.2 Net Assets 17% CAGR ~$4.2 25% ROE Used serviceable Optimize OEM material solutions new, used and repair competitive pricing Expand supply relationships with major MROs Expand in Asia and Europe Engine leasing 500 engine portfolio 100 customers 40 countries Expanding offering to airframe rotable parts Growing asset-backed loan portfolio 10

6 Growth component repair Sales 7% ~1 +C R AG ~$0.4 Offering extensive portfolio 15,000+ repairs 1,200+ new repairs in 05 1,000 more coming in 06 $0.2 Invested $20M+ in repair development in 06 Shortening delivery times Developing more custom solutions OnPoint 11 Services expand to engines systems 7% ~1 R AG C ~$0.4 + $0.2 Electrical systems & components Mechanical systems & components Integrated systems provider to OEMs Global service opportunity

7 Approach on alternate material ~20-25% * % PMA part use 5% 6% Delivering customer value OnPoint Solutions covers 30% of fleet & growing Technology upgrades Brings fuel & operating savings Build upon diagnostics proprietary database P&W JT8D 2% '06 '09 '16 GE and CFM56** *GE estimate Reducing cost of ownership More repair & used material GEAM **CFM International is 50/50 joint venture with Snecma 13 Aviation services ~10% Proven approach Revenue $6.9 ~20% Growing customized service agreement portfolio via OnPoint $2.3 Winning with leading carriers OP Delivering customer value with continued technology investment '05 '06E Expanding into engine systems On track to deliver 2006 plan 14

8 GE s Technology and Services Analyst Meeting May 4, 2006