Bell Helicopter: State of the Business - John L. Garrison President & CEO HELI-EXPO 2015
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Bell Helicopter: State of the Business
John L. Garrison
President & CEO
HELI-EXPO 2015
Forward Looking Information
Certain statements in today’s discussion will be forward-looking
statements, including those that discuss strategies, goals, outlook or
other non-historical matters; or project revenues, income, returns or
other financial measures. These forward-looking statements speak only as
of the date on which they are made, and we undertake no obligation to
update or revise any forward-looking statements.
These forward-looking statements are subject to risks and uncertainties
that may cause actual results to differ materially from those contained in
the statements, including the risks and uncertainties set forth under our
full disclosure located at the end of this presentation and included in our
SEC filings.
2
Textron
Leading Branded Businesses
Bell Textron Textron Industrial Finance
Helicopter Systems Aviation
33% 24%
Strategic Priorities
Grow our balanced business
Differentiate our products and services
Become more responsive and cost competitive – globally
Exhibit execution excellence
4
Executive Leadership Team
John Garrison
President & CEO
Felipe Gumucio Matthew Hasik Robert Hastings Catherine Kilmain
EVP Business Ventures & CLO EVP Commercial Business EVP Communications EVP Engineering
Gunnar Kleveland Barry Kohler Mitchell Snyder Stephanie Soto Alphonse Vetere
EVP Integrated Operations EVP Customer Support & Svs EVP Military Business EVP Human Resources EVP & CFO
5
2014 Performance Overview
2014 financial performance
– Revenue: $4.2 billion
– NOP: $529 million
– Margin: 12.5%
38% Commercial
USG
62%
2014 Revenue
6
Driving Cost Competitiveness
2012 2013 2014
Revenue ($M) $4,274 $4,511 $4,245
NOP ($M) $639 $573 $529
Headcount (YE)* 12,031 10,988 9,192
Revenue / $355 $411 $462
Employee ($K)
NOP / Employee $53 $52 $58
($K)
* Peak Headcount: 12,124 (December 3, 2012)
7
Industry Overview
• Industry faced headwinds in 2014
– Geopolitical unrest and global economic uncertainty
• Rotorcraft remains an attractive, growing global industry
• Near-term outlook
– Downward pressure and uncertainty with Department of Defense
budgets continues
» Bell under contract for V-22 and H-1 deliveries
– Near term uncertainty but independent forecasts project growth of
commercial rotorcraft market
Industry Forecast
Turbine Rotorcraft Delivery 10 Year Forecast
for All OEMs
1400
1300
1200
1100
1000
900
2015 2016 2017 2018 2019 2020
Forecast Int'l (Mar 2015) Teal (Jan 2015) Honeywell (Mar 2014)
Source: Forecast International, Teal Group, and Honeywell
Independent forecasts predict continued growth
Military Business
MV-22 CV-22
USMC Osprey AFSOC Osprey V-280 Valor
AH-1Z Viper AH-1Y Venom MQ-8C Fire Scout
102014 Performance Overview
Military Business
• V-22 surpassed 250,000 flight hours
• Final MV-22 delivery to USMC
Presidential Helicopter Squadron
• Successful V-22 forward firing
and hot / high demonstrations
• V-280 Valor selected by U.S. Army
for Joint Multi-Role Technology
Demonstrator program
• Successful MQ-8C Fire Scout shipboard
testing
11V-22 Osprey
• Deliveries as of December 2014
– 248 MV-22 to the USMC
– 45 CV-22 to AFSOC
– Delivered 37 in 2014
• Program of Record
– USMC 360 MV-22
– AFSOC 52 CV-22
– USN 48 V-22
• Executing MYP II
V-22 Contract Deliveries
– 99 with options for 23 41 37
additional aircraft
21
(2 exercised to date)
• Investing to expand capabilities
2013 2014 2015
“The most in-demand aircraft in the Marine Corps,”
Lt. Gen. Jon Davis
12H-1 Venom & Viper
• Deliveries as of Dec 2014
– 108 UH-1Y
– 39 AH-1Z
– Delivered 24 in 2014
• Program of Record: 349
– 160 UH-1Y
– 37 AH-1Z Remanufacture
– 152 AH-1Z Build New
• UH-1Y deployed to
Afghanistan and to MEUs
H-1 Contract Deliveries
since 2009
• Two squadrons
operational with both 25 24 25
UH-1Y and UH-1Z
2013 2014 2015
13Military Business Development
• V-22 opportunities
– USG
» US Navy
» AFSOC
– International
» Japan announced selection
» Israel delayed
» Pursuing other opportunities
• H-1 opportunities
– Opportunities focused in Middle
East, Asia/Pacific and
Eastern Europe
• Fire Scout opportunities
• Potential OH-58 FMS
• Bell V-280 Valor
14V-280 Valor
• Transformational capability
– Low speed helicopter agility combined
with fixed-wing high speed
performance
• Selected to build and fly within JMR-TD
program
– Preliminary design complete;
detailed design in process
– First flight anticipated in late 2017
• Building a team of industry leaders
15V-280 Valor
• Tyranny of Distance
Pivot to Pacific
Rota to Djibouti Equivalent to Anchorage to JAX
Expeditionary capability to address urgent needs
16Commercial Aircraft
Bell 429 Bell 412 Bell 407
ADD SLS
Bell 206L4 Bell 525 Relentless Bell 505 Jet Ranger X
172014 Performance Overview
• Delivered 178 commercial helicopters
• Captured key international wins and
increased segment position
– Canadian Coast Guard
– Philippine Department of National Defense
– Swedish National Police
• Continued to invest for the future and
focus on solutions that meet our
customers’ needs
– Personnel in region
– Local facilities
– Training operations
– New programs
» Bell 525 Relentless
» Bell 505 Jet Ranger X
– Product upgrades
18Bell 407
• Best selling, state-of-the-art
helicopter
– Mexican Air Force order for 15
– Pennsylvania State Police
Department
– SpanAir: first Bell 407GX to India
– Kings Casino: first Bell 407GX in
Czech Republic
• New 407GXP delivers industry-
leading performance, payload
capability and operating
economics
• 10 year agreement with Air
Methods for 200 HEMS configured
Bell 407GXP
19Bell 412
• Continued investment in
modernization to enhance
capabilities and increase
customer value
• “In my opinion, there is not a
medium twin-engine
helicopter that represents
faithful ‘start, run, do the
work, get me home’ service
better than the 412,”
Guy R. Maher, Vertical
• Key wins
– Philippine Air Force
– PHI/Saudi Red Crescent
– Nishi Nippon Airlines
– Chongqing General Aviation
– New South Wales Police Air Wing
20Bell 429
• 21st century standard for light
twin helicopters
• Delivered 200th production
aircraft in 2014
• Retractable Landing Gear
option certified
• Rapidly becoming platform of
choice for parapublic and HEMS
missions
– Canadian Coast Guard
– Swedish National Police
– New York City Police
Department
– Delaware State Police
– Georgia Department of Public
Safety
– Puerto Rico Police Department
21Bell 525 Relentless
• Unparalleled situational awareness, enhanced safety and
performance
• Continued strong progress toward first flight this spring
– Electrical power up of avionics and flight controls of first flight
test vehicle
– Announced LOI with Abu Dhabi Aviation for purchase of 10 Bell
525
• Letter of agreement with Waypoint Leasing for 20 Bell 525s
with options for additional aircraft
22Bell 505 Jet Ranger X
• JetRanger defined the short light single market
• Best combination of value, performance & features:
– Speed 125+, Range 360+, Useful load 1500+, HOGE 11,000+
– Turbomeca Arrius 2R engine with Dual Channel FADEC
– Fully-integrated Garmin G1000 flight display system
– Forward facing seating for five
– Fully-flat, configurable cabin floor for mission flexibility
• Signed 300+ letters of intent
• Successfully completed first flight on November 10, 2014
• Construction of Lafayette Assembly Center progressing
23Customer Support & Services
• Top ranked after-market support sets
Bell Helicopter apart from the competition
– #1 customer support ranking for 21
consecutive years
• Largest support network in the industry –
and growing
– More than 100 authorized customer service
facilities in 34 countries
• Increasing capabilities in Prague and
Singapore Service Centers
– Granted key certifications at both facilities
• Investing in solutions that meet our
customers needs
– Growing customer demand for training and
simulation
24Customer Support & Services
• New state-of-the-art Bell Training Academy in Fort Worth, Texas
opening this summer
• Bell Helicopter Training Center in Valencia, Spain opening in
2016
– Received EASA Approved Training Organization Certification
25Summary
• 2014
– Increased position in marketplace despite industry headwinds
– Delivered strong military program performance
– Introduced successful product upgrades
– Made significant advancements on all three new programs
• 2015
– Continuing to deliver military on schedule and budget
– Expanding international military and commercial sales
– Continued investment in products and services
• Long-term outlook
– Attractive commercial growth driven by new products and market
growth
– Defense budgets uncertain but with opportunity both domestically
and internationally
– Well-positioned for the future
Investing to win
26Questions? 27
Forward-Looking Information
Certain statements in this presentation and other oral and written statements made by us from time to time are “forward-
looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking
statements, which may describe strategies, goals, outlook or other non-historical matters, or project revenues, income,
returns or other financial measures, often include words such as “believe,” “expect,” “anticipate,” “intend,” “plan,”
“estimate,” “guidance,” “project,” “target,” “potential,” “will,” “should,” “could,” “likely” or “may” and similar expressions
intended to identify forward-looking statements. These statements are only predictions and involve known and unknown
risks, uncertainties, and other factors that may cause our actual results to differ materially from those expressed or
implied by such forward-looking statements. Given these uncertainties, you should not place undue reliance on these
forward-looking statements. Forward-looking statements speak only as of the date on which they are made, and we
undertake no obligation to update or revise any forward-looking statements. In addition to those factors described under
“RISK FACTORS” in our Annual Report on Form 10-K, among the factors that could cause actual results to differ materially
from past and projected future results are the following: interruptions in the U.S. Government’s ability to fund its activities
and/or pay its obligations; changing priorities or reductions in the U.S. Government defense budget, including those related
to military operations in foreign countries; our ability to perform as anticipated and to control costs under contracts with
the U.S. Government; the U.S. Government’s ability to unilaterally modify or terminate its contracts with us for the U.S.
Government’s convenience or for our failure to perform, to change applicable procurement and accounting policies, or,
under certain circumstances, to withhold payment or suspend or debar us as a contractor eligible to receive future contract
awards; changes in foreign military funding priorities or budget constraints and determinations, or changes in government
regulations or policies on the export and import of military and commercial products; volatility in the global economy or
changes in worldwide political conditions that adversely impact demand for our products; volatility in interest rates or
foreign exchange rates; risks related to our international business, including establishing and maintaining facilities in
locations around the world and relying on joint venture partners, subcontractors, suppliers, representatives, consultants
and other business partners in connection with international business, including in emerging market countries; our Finance
segment’s ability to maintain portfolio credit quality or to realize full value of receivables; performance issues with key
suppliers or subcontractors; legislative or regulatory actions, both domestic and foreign, impacting our operations or
demand for our products; our ability to control costs and successfully implement various cost-reduction activities; the
efficacy of research and development investments to develop new products or unanticipated expenses in connection with
the launching of significant new products or programs; the timing of our new product launches or certifications of our new
aircraft products; our ability to keep pace with our competitors in the introduction of new products and upgrades with
features and technologies desired by our customers; pension plan assumptions and future contributions; continued
demand softness or volatility in the markets in which we do business; difficulty or unanticipated expenses in connection
with integrating acquired businesses; and the risk that anticipated synergies and opportunities as a result of acquisitions
will not be realized or the risk that acquisitions do not perform as planned, including, for example, the risk that acquired
businesses will not achieve revenue and profit projections.
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