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GEAviationAviation

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GE Aviation ’06 Revenues

Other

Military Engines& Services

CommercialEngine

Services

Commercial Engines

2GE - Aviation

2007 Titanium MeetingSubject to the Restrictions on the Title Page

Commercial Engines

Military Systems Operation

Military … winning in a tough environment

• Global war on terror

Environment

• Aging equipment … operating & maintenance cost up 2x in 10 yrs

F110 (Turkey) F136 (JSF)

Sikorsky CH-53K

• Must re-capitalize / modernize

F110 (Turkey) F136 (JSF)

y• 3 to 5 year lead-time for

procurement funding

CH-53K (GE38)F414 (USN/Australia)

R&D benefits both commercial & military

4GE - Aviation


y

Customer solutions for growthCustomer Challenge GE OpportunityTop line budget pressure Legacy Operations &

Support - Diminishing supplementals upgradesSupport - Diminishing supplementals upgrades

Transformation Investment in rotorcraftTransformation Investment in rotorcraft- Smaller, more agile & technology demonstrators

Aging fleet Position for replacementsTankers, TACAIR, helos, humvees

Manpower reductions Performance Based Logistics' 115,000 6-yr. plan to drive productivity

5GE - Aviation


CommercialCommercial Engines

Commercial passenger demand is strong

Billions RPKs

…

240

260

280

2006eman

d

200

220

2000

2005

seng

er D

e

140

160

1802001Pa

ss

120

140

J F M A M J J A S O N D

7GE - Aviation


Industry strength continues1H’07 il th1H’07 revenue passenger mileage growth

India20%

MEA18%

20%

China

Americas 5.0%Europe 4.9%A i 4 5%

0 – 10%10 - 20%20 - 30%

16% Asia 4.5%(w/o India & China)

8GE - Aviation


0 10%10 20%20 30%

Aircraft utilization up equals more revenue Aircraft utilization up equals

4000

revenue Aircraft utilization up equals more revenue

3500

4000

es

3000Single-aisle

ual C

ycle

2500

Twin aisle

Ann

20001991 1996 2001 2006

Twin-aisle

S ACAS

9GE - Aviation


Source: ACAS

Since 2001 …

Labor productivity 33%

Sales and distribution costs 10%Sales and distribution costs 10%

Non-fuel unit costs 13%o ue u cos s 3%

GE - Aviation2007 Titanium MeetingGE Proprietary Information - For Internal Use Only

The headwind … fuel priceThe headwind … fuel price

2001 industry fuel bill … $43 billion 2001 industry fuel bill … $43 billion … 13% operating costs… 13% operating costs

2006 estimate … $115 billion2006 estimate … $115 billion2006 estimate … $115 billion

… 26% of operating costs

2006 estimate … $115 billion

… 26% of operating costsp gp g

11GE - Aviation

2007 Titanium MeetingSubject to the Restrictions on the Title PageGE - Aviation

2007 Titanium MeetingGE Proprietary Information - For Internal Use Only

2007 … a return to profitability worldwidene

pro

fit

$ 5

$2.5B

Tota

l airl

in

2006

2007E

-$3 2B

-$.5

2005-$3.2B

Source: IATA


Order Book … growth

Engine Orders(50 Pax and above)

2 610

3,368

2,610

‘96-’00 Avg1,809

‘01-’04 Avg1,188

2005 2006

CFM i 50/50 j i t t ith S

13GE - Aviation


*GP7000 developed by Engine Alliance, LLC, a joint company of GE – Aviation and Pratt & WhitneyCFM is a 50/50 joint venture with Snecma


Tech investment … family additions($ in billions)

Highest R&D commitment in history … ~ $7B since 2000

( )

Boeing 777-300ER GE90-115BService ’08 Service ’08

Total R&D Boeing 787 GEnxAirbus A380 GP7200*

Service ‘08

Service ’10Service ’09

ARJ21 CF34-10 747-8 GEnx

Service ’10Service ’10

’03 ’05 ’06 GE/Honda** HF120

14GE - Aviation


*GP7000 developed by GE/P&W Engine Alliance**HF118 developed jointly by 50/50 JV between GE & Honda

Commercial … win with technologyProduct lineage Commercial installed base

(K)1971 CF6

1979 CFM

1992

1995

CF34

GE90

2008 GP7000

2008

Next

GEnx

LEAP56TM ‘96 ‘06 ‘16F

15GE - Aviation


Fleet in active commercial serviceSource: ACAS, GE internal studies

GP7000 developed by GE/P&W Engine AllianceCFM is a 50/50 joint company between GE and Snecma

LEAP56TM is a trade mark of CFM International, a 50/50 joint company between GE and Snecma

96 06 16F

Production … another strong year!

2 0802,080

1,7591,759

‘06 ‘07

16GE - Aviation

2007 Titanium MeetingSubject to the Restrictions on the Title PageGE - Aviation

2007 Titanium Meeting

Production … Delivery, Mix, & Material

’0 ’0'06 '07’06

’07 6 76 7

’06 ’06

’07 ’076 7

’06

’07

*GP7000 developed by Engine Alliance, LLC, a joint company of GE – Aviation and Pratt & Whitney

CFM is a 50/50 joint venture with Snecma

Great first impressions … priceless

25

30

35 Operators with new airplane types

15

20

25

5

10

15

0777 747 A330 A320 737 E190 CRJ900 E170 CRJ700

New aircraft in service ’06 & ’07 … ~1,920

New customer experiences … 1,150

18GE - Aviation


p ,

Commercial Engines in 2007. . .

Aviation remarkably strong

Production volume will be at record levels

Product portfolio is solid

Our Customers have got to win

19GE - Aviation


AviationSupply Chain

August 2007

Aviation supply chainGE’s plants Suppliers Partners28 component shops

6 bl d t t it

335 domestic

105 l b l6 assembly and test sites 105 global

21GE - Aviation


Volume … Total Supply Chain Output

O th h i GE JSF GE38 GP7200 GE H d LEAP56

1994 2007 2010

On the horizon … GEnx JSF GE38 GP7200 GE Honda LEAP56

CFM, CFM56, LEAP56, and the CFM logo are trademarks of CFM International, a 50/50 joint company between Snecma and General Electric

22GE - Aviation


, , , g , j p yCompany

F136 developed by GE Rolls-Royce Fighter Engine TeamGP7200 developed by GE/P&W Engine Alliance

HF118 developed jointly by 50/50 JV between GE & Honda

Unprecedented Growth…

Requires…

• More Raw Materials

q

• More Castings

• More Machining• More Machining

• More Bearings

'06 '07 '08

• And More Titanium

23GE - Aviation


06 07 08

Accelerating new product launch

GEnx……0 – 100……19 months

24GE - Aviation


GEnx growth

500 (Engines) Fastest Large Engine

250

Ramp up in history250

02007 2008 2009 2010 2011

25GE - Aviation


2007 2008 2009 2010 2011

Growth strategy

• Investment

• Technology

•Lean

• Standardization

• Productivity26

GE - Aviation2007 Titanium MeetingSubject to the Restrictions on the Title Page

y

Supply Chain … investmentTurbine

airfoils• Greenville plant

Volume

p

Rotating parts• West Jefferson

Composites

2006 2007 2008 2009 2010

p• Mississippi plant

CFAN-a) expansion

27GE - Aviation


(a - CFAN is a 50/50 joint company between GE and Snecma

Managing Cost

28GE - Aviation


Material pressureConversionConversionNickel

$ lb

'04 '05 '06 '07

TitaniumSupply Chain

Cost

Material'04 '05 '06 '07

29GE - Aviation


Raw material … key Aviation demand

Annual usage (lbs)2007 2010

Titanium 7M 11M

Nickel 17M 27M

30GE - Aviation


Raw material focusNickel Titanium

PricePrice

'05 '06 '07'05 '06 '07

Cost reduction … playing offense!!Engineers appliedto cost reduction “Buy-to-Fly”

Cost reductionfunding ($MM) to cost reduction Buy-to-Flyfunding ($MM)

From: 1 pc forging … 1878 lbs

GE90-115B TCF

Driving material efficiency

'05 '06 '07'05 '06 '07

lbsTo: 4 pc UEC welded rings … 1082 lbs

31GE - Aviation


Driving material efficiency

Material options to titanium

HIGHCMC MAT’L

DESIGNED FORHIGH STRENGTH

HIGH TEMP

EIG

HT PMC MAT’L

DISPLACINGTITANIUM AT

HIGH TEMP

RE

NG

TH/W

E

TITANIUM USENICKEL DISPLACINGTITANIUM AT HIGHER

TEMPERATURES

TITANIUM ATLOWER

TEMPERATURES

STR

ALUMINUMUSE

FEROUS

TEMPERATURE

LOW

LOW HIGH

32GE - Aviation


GE Aviation 2007-08 Sourcing Strategy

Total Annual Spend

StrategyOpportunity

Continue Global Push…Asia/China Still Priority - Accelerate India

L A i ti G th d GELeverage Aviation Growth and GE Infrastructure Synergy

Sustain Raw Material Buffers to '03 '04 '05 '06 '07

Protect Supply - Plus On-going Capacity ChecksTotal Global

33GE - Aviation


'02 '04 '06 '08 '10

Global capacity … China

Xian Aero Engine

Smiths Suzhou2004 2006 2008

Smiths Suzhou

34GE - Aviation


2004 2006 2008

Global capacity … Europe

Rotating partsF b i t d A bli

Turkey

Fabricated Assemblies

Major Product Lines: jF110, CFM56, CF6, CF34, GE90, GEnx

R i

Combustors

Romania

Major Product Lines: CFM56, CF34-3, CF34-8, CF34-10

35GE - Aviation


Supply chain summary

Tremendous growth

Investing in capacity

Strong focus on productivity• Material … “Buy to Fly”

Delivering on customer expectations

36GE - Aviation


Summary

• Tremendous Business Cycle that has some breath

• Need to keep material lines healthy

• Outlook for titanium from an engine perspective looksOutlook for titanium from an engine perspective looks strong

• Must continue to drive cost Alternatives are available• Must continue to drive cost …. Alternatives are available

• Counting on your continued support to do the right thing for the Buy America Act

37GE - Aviation


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