GE Aviation Investor Pitch - The Digital Industrial Company · Pegasus Airlines Aug. 2nd, 2016 ......

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GE AviationCowen and Company Aerospace/Defense & Industrials Conference

February 8, 2017

Caution Concerning Forward-Looking Statements:This document contains "forward-looking statements" – that is, statements related to future events that by their nature address matters that are, to different degrees, uncertain. For details on the uncertainties that may cause our actual future results to be materially different than those expressed in our forward-looking statements, see http://www.ge.com/investor-relations/disclaimer-caution-concerning-forward-looking-statements as well as our annual reports on Form 10-K and quarterly reports on Form 10-Q. We do not undertake to update our forward-looking statements. This document also includes certain forward-looking projected financial information that is based on current estimates and forecasts. Actual results could differ materially.

http://www.ge.com/investor-relations/disclaimer-caution-concerning-forward-looking-statements

Business overview

GE PROPRIETARY INFORMATION | Cowen and Company Aerospace/Defense & Industrials Conference 2

GE Aviation portfolio … $26B

A leading provider of jet engines, systems, services … and …

Avionics and Digital Systems $0.8

BGA and Integrated Systems $1.5

Military engines and services $3.5

Commercial engineservices $11.4

$1.0-1)

(1- 2016 external revenue

Commercial engines $8.0

-1)

Additive Manufacturing


GE Aviation

Aviation commercial environment

TrafficTY% change, (IATA), RPKs

Load factors% PLF (IATA)

Fuel cost$/bbl

Freight trafficTY% change, (IATA), FTKs

Departures Millions (IATA)

Airline profits$Billions (IATA)

3.5%

5.1%

WTI

Jet Fuel

2017F

2017F

2017F

2017F

36.6

3.4%

5.9%80%80%

2016E

2016E

2016E

2016E

2016E

~$53

$65

$43

$52

2017F

$30$36

2016E

38.4

2017F

IATA economic performance report, EIA, GE Analysis

GE PROPRIETARY INFORMATION | Cowen and Company Aerospace/Defense & Industrials Conference4

Commercial engines


Commercial engine portfolio: today and tomorrow

Production volume Widebody Narrowbody Regional/Biz

960 1,460

1,500

1,790

‘20F‘13

3,300

2,600

I NS T AL L ED F L EET

Commercial Engine Backlog

$28B

4Q ‘16

44K33K

GE and JV engines (at 3% CAGR)

EA

CFM

GE

GE PROPRIETARY INFORMATION | Cowen and Company Aerospace/Defense & Industrials Conference

* CFM is a 50/50 JV between GE and Snecma** EA is a 50/50 JV between GE and Pratt & Whitney*** Program currently under evaluation

C919*

Global 7000

Turboprop***(next opportunity)

737MAX*

777X

A380**

747-8

787

A320neo* ARJ21

6

Successful wide-body transition


60%W I N R A T E

Fastest-selling GE widebody engine

99.95+% GEnx dispatch reliability

1,900+ engines ordered … 1,200 shipped

2020Engines in service~800 shop visits in 2016

2,750 aircraft in operation

Claims based on GE estimatesGEnx win rate does not include undecided engine campaigns

~1,900

‘20F

850

‘15

CF6 … delivering today GEnx … securing tomorrow

57% of twin-aisle aircraft CF6-powered*

NEW ENGINE

deliveries beyond

* Excluding 787 & A350 aircraft

7

Engine of choice for narrowbodies

CFM56 … delivering today

Record deliveriesin 2016

80% A320 family win rate on production transition

30,000+ engines delivered

LEAP … securing tomorrow

11,600+ on order

LEAP production

Ranked #1 by investors in 2016 AirFinance Journal Engine Survey

#1 Residual Value

#1 Remarketing Potential

#1 Investor Appeal

Unprecedented customer confidence

1,5701,652

‘15 ‘16

1,534

‘14

737MAX A320neo

C919

A320neo

LEAP GTF

CFM, CFM56 and the CFM Logo are trademarks of CFM International, a 50/50 joint company of GE and Safran Aircraft Engines. LEAP is a trademark of CFM International.

77

~2,000

‘20F‘16 ‘17F

~500


Typical aircraft turn around

6 airlines to date

High aircraft utilization

Operating well in severe climates

Outstanding engine reliability

Proven in service

CFM, CFM56 and the CFM Logo are trademarks of CFM International, a 50/50 joint company of GE and Safran Aircraft Engines.LEAP is a trademark of CFM International.

LEAP-1A in-service performance

25

11

A320neo launch

60

up to

M I N U T Et u r n t i m e s

F L I G H T Sp e r d a y

E N G I N E Si n - s e r v i c e

104o FO U T S I D E A I RT E M P E R A T U R E

0E N G I N Er e m o v a l s

L O W E R F U E Lc o n s u m p t i o n

LEAP-1A entry into servicePegasus AirlinesAug. 2nd , 2016

LEAP entry into service best ever so far

15%

“We are absolutely delighted with the operation of this engine. There has not been a single glitch”

Mehmet Nane, Pegasus Airlines CEO


The next chapter in wide-body engines


135 aircraft on order

2,400+ engines delivered

Sole source on 777X

Next-generation twin widebody is REAL

5BETTERfuel efficiency

vs. ANY engine I N C L A S S

70 operators

Claims based on GE estimates

Fleet in service

2,400

2,800

’16 ’20F

The

STANDARDby which all widebodiesare measured

%

GE90 … delivering today GE9X … securing tomorrow

-1) GE90 engines powering 777-200ER, 777-300, 777-200LR, 777-200LRF, and 777-300ER

-1)

BEST architecture, aero and materials technology in industry

650E N G I N E S

Technology Excellence


GE model … differentiate through technology leadership to meet airline needs


GE Experience

• GE90: 2,800 / 100M

• GEnx: 1,900 / 35M

• LEAP: 5,700 / 26M2020: engines / hours

Airline needs

• High utilization

• High fuel efficiency

• High reliability

• High durability

+

Architecture Aerodynamics Materials

GE Store

• Global Research Center

• Digital Analytics

• Additive Technology

• Cross Business sharing

Unique Architecture, Aero and Material technologies

+ =

160 ME N G I N E S H O U R S

10,400

Differentiated products

GE9X

Architecture the foundation for continued reliability advantageFewer delays and disruptions, more flights

1. Direct drive RELIABILITYLower complexity

2. Lightweight LP turbine RELIABILITYLower stress

3. Debris-rejection DURABILITYCore protection

4. Lean-burn combustion DURABILITYMore even temps

Competitive Advantage

REMOVALRATE 42%

L O W E RGE90 34%

L O W E RGEnx

DelayRATE 37%

L O W E RGE90 14%

L O W E RGEnx


1

24

3

13

Aerodynamics enable engine efficiency


Doing more with less

16Fan blades

Advanced modeling and testing enhance LPT efficiency

Highest energy extraction

22Advanced aero drives highest compressor pressure ratios

Best efficiency in industry

Fan blade count reduction indicates aero efficiency

Best fan efficiencyGE90

27:1GE9X world record

7.1:1Expansion ratio

14

Materials innovations driving greater durability

Carbon fiber and ceramic matrix composites GE industry firsts

Titanium and nickel replaced by carbon fiber and ceramics

Weight and strength advantages 1,000lbs

PER AIRCRAFT lighter than metals

2xSTRENGTH

1/3W E I G H T

CMC components tested in GEnx prior to GE9X first engine

Temperature, strength and weight advantages

Since 1995 EISADs

ZERO

AIR WORTHINESS directives

Blades, Case, OGVs

Combustor liner

20%L E S S COOLING


Next Generation Digital & Additive


Capabilities of full production35,000 – 40,000 per year

PARTS

DURABLEMORE

WEIGHT

LEAP is a trademark of CFM International, a 50/50 JV between GE and Safran Aircraft Engines

It started with one part …

25%

20 1

4x

REDUCTION


Additive productivity … changes everything

Co

st o

f m

an

ufa

ctu

rin

g

Degree of complexity

Conventionalmanufacturing

Designinnovation

for freeAdditive

manufacturing

Source:


Invested in Additive Capabilities …

• Increase GE product capability & reduce cost

• Provide machines to external suppliers

Aviation Additive Strategy

• Lower cost

• Faster development time

• Weight reduction

Additive benefits

GE Aviation

Transforming the Aviation Digital Industrial

FOR OUR BUSINESSES FOR OUR CUSTOMERS

Engineering

product quality

Supply Chain

product cycle time

Services

productivity

Leveraging digital outcomes … powered by


35K engines monitored via PREDIX

100M flight records per year

43% Decrease in disruptions-b)

12 additional days of utilization-c)

25% improvement in unscheduled

disruptions ... network wide-a)

CUSTOMER COLLABORATION CENTERS

Dubai

Shanghai Austin, TX

Paris

At Emirates

(a- Based upon the monitored 35,000 engines(b- Unscheduled engine removals 1H2016 (c- Analytics based inspection 1H2016

• Great GE business that invests and delivers

• Unprecedented installed base in all market segments

• Successful LEAP entry into service marks mid-point of portfolio transition

• GE’s technology leadership from broad engine experience & GE Store fulfills airline needs

• Digital & Additive further add to GE’s industry leadership position

In summary


GE Aviation Investor Pitch - The Digital Industrial Company · Pegasus Airlines Aug. 2nd, 2016 ......

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Transcript of GE Aviation Investor Pitch - The Digital Industrial Company · Pegasus Airlines Aug. 2nd, 2016 ......