GE Aviation Jefferies Investor Visit - May 12th 2014 Imagination at work.
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GE Aviation Jefferies Investor Visit May 12th 2014 Imagination at work.
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 financial condition, and
often contain words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “see,” or “will.” Forward-looking
statements by their nature address matters that are, to different degrees, uncertain. For us, particular uncertainties that could
cause our actual results to be materially different than those expressed in our forward-looking statements include: current
economic and financial conditions, including volatility in interest and exchange rates, commodity and equity prices and the
value of financial assets; the impact of conditions in the financial and credit markets on the availability and cost of General
Electric Capital Corporation’s (GECC) funding and on our ability to reduce GECC’s asset levels as planned; the impact of
conditions in the housing market and unemployment rates on the level of commercial and consumer credit defaults; our ability
to maintain our current credit rating and the impact on our funding costs and competitive position if we do not do so; the
adequacy of our cash flow and earnings and other conditions which may affect our ability to pay our quarterly dividend at the
planned level; the level of demand and financial performance of the major industries we serve, including, without limitation, air
and rail transportation, energy generation, network television, real estate and healthcare; the impact of regulation and
regulatory, investigative and legal proceedings and legal compliance risks, including the impact of financial services regulation;
strategic actions, including acquisitions and dispositions and our success in integrating acquired businesses; and numerous
other matters of national, regional and global scale, including those of a political, economic, business and competitive 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.
GE PROPRIETARY INFORMATION | Jefferies Investor Visit GE Aviation 2
Business overview
GE PROPRIETARY INFORMATION | Jefferies Investor Visit GE Aviation 3
“I find out what the world needs,
then I proceed to invent it.”
– Thomas Edison
GE PROPRIETARY INFORMATION | Jefferies Investor Visit GE Aviation 4
GE Aviation executive team
David L. Joyce
President & CEO
Commercial Aviation Systems and Sales & Finance
Engines Digital Engineering Marketing
W.A. Fitzgerald and Technology C. A. Chahrour S.M. Wright
Vice President and J.W. Daily Vice President and Vice President and
General Manager Vice President General Manager Chief Financial Officer
Services Supply Chain Marketing Human
Resources
K.G. McAllister C.B. Athans
Vice President and Vice President and L.C. Rouaud E.W. Marshall
General Manager General Manager Chief Marketing Officer Vice President
BGA & Integrated Assembly, Test & CMCs Program Chief Information
Systems Overhaul Officer
B.D. Mottier
Vice President and A.J. Aiello S.M. Correa T. Kantor
General Manager Vice President Vice President General Manager
Military Systems Services Legal & Business Global Government
Engineering Development Relations
J. M. Lydon-Rodgers
Vice President and J.M. Rosario M.R. McAlevey P. Prowitt
General Manager Vice President Vice President Executive Director
Avionics & Engineering Business
Digital Systems Development
M. Ehteshami
A.C. Caslavka Vice President and W.J. Godsman Attending
Vice President General Manager General Manager
Avio Aero Technology & Communications &
Sciences and GE Advantage
R. Procacci Chief Engineer
Senior Executive and J.R. Regg
Avio Chief Executive Officer
G.D. Mercer
Vice President Senior Executive
Effective: May 2, 2014
GE PROPRIETARY INFORMATION | Jefferies Investor Visit GE Aviation 5
GE Aviation portfolio … $22B
–1)
Commercial engines Commercial engine Military engines
$6.8 –2)
services $7.9 –2) and services $4.1
BGA and Integrated Avionics and Digital
Systems $1.5 Solutions $0.8 $0.8
General aviation engines Avionics Power Transmissions
Power, mechanical, electronics Digital Services Turbo machinery
A leading provider of jet engines, services and systems -1) Based on 2013 revenue
-2) includes GE’s share revenue from 50-50 CFM and EA joint ventures
GE PROPRIETARY INFORMATION | Jefferies Investor Visit GE Aviation 6
Technical innovation …
at our core
U.S. jet engine
U.S. turboprop engine
High bypass engine
Composite fan blade in airline service
120,000+ lb thrust engine
Modular power tile
FMS-controlled Unmanned Aircraft System
GE PROPRIETARY INFORMATION | Jefferies Investor Visit GE Aviation 7
Powering the world’s airline fleets
Every 2 seconds , an aircraft
with GE engine technology* is
taking off somewhere in the
world.
At any given moment, more
than 2,200 of these aircraft
are in-flight, carrying between
50 and 500 passengers.
That's more than 300,000
people... right now... who are
depending on our engines.
*Includes joint venture engines built by CFM and EA
CFM International is a 50/50 JV between GE and Snecma
EA is a 50/50 JV between GE and PW
GE PROPRIETARY INFORMATION | Jefferies Investor Visit GE Aviation 8
Powering the world’s military fleets
2 of every 3 helicopters in the US
fleet are powered by GE
3 out of every 4 combat surface
vessels in the Navy’s fleet are powered by *
GE Aviation and all of the Navy’s carrier
combat aircraft
Half of the bombers in the Air Force
fleet are powered by GE Aviation
2 out of every 3 fighters in the U.S.
fleet are powered by GE Aviation
Engine fleet: 24,900
*Includes joint venture engines built by CFM
CFM International is a 50/50 JV between GE and Snecma
GE PROPRIETARY INFORMATION | Jefferies Investor Visit GE Aviation 9
Global revenues
Total U.S. Total Intl
Revenues -1 revenues Other
$9.2B $12.8B 2%
Lat . America,
42% 58% Canada
MENAT 11%
22%
Pacific Basin
35%
Europe
30%
-1) 2013 revenues
GE PROPRIETARY INFORMATION | Jefferies Investor Visit GE Aviation 10Global backlog
U.S. backlog
$31B -1
25% Other
Intl backlog 3%
$95B Lat . America,
75%
Canada
10%
MENAT
34%
Pacific Basin
41%
Europe
13%
-1) 2013 backlog
GE PROPRIETARY INFORMATION | Jefferies Investor Visit GE Aviation 11GE Aviation facilities around the world
Europe
North America Czech Republic
Canada
France Asia
Mexico
Germany Australia
U.S.A.
Hungary China
South America Poland India
Brazil Romania Japan
Turkey Korea
United Kingdom Malaysia
Italy Singapore
Taiwan
44,000 employees Thailand
79 manufacturing sites
11 Engineering centers
GE PROPRIETARY INFORMATION | Jefferies Investor Visit GE Aviation 12A great GE business
($ in billions) $21.9 CAGR
8%
$20.0
Strategic imperatives
$18.9
Revenue
• Grow installed base and
services
$4.3 • Lead in next-generation
Op profit $3.7
$3.5 products
• Position supply chain
'11 '12 '13 for product volume growth
R&D $1.5B $1.6B $1.8B • Build out digital services
Deliveries 2,918 3,296 3,513 for customer productivity
Installed 56,000 57,000 58,000
Base
Deliveries and installed base includes GE and JV partners volume.
2012 Deliveries: GE 1,837; CFM 1,382; EA 77
2012 Installed base: GE 40K; CFM 18K; EA .2K
CFM is a 50/50 JV between GE and Snecma
EA is a 50/50 JV between GE and Pratt & Whitney
GE PROPRIETARY INFORMATION | Jefferies Investor Visit GE Aviation 13Cost efficiency
($ in millions)
Product cost-out Simplification
$210
$200
$180 • Delivering supply chain
productivity
− Global footprint
2011 2012 2013
Productivity 2.0% 2.5% 2.5% − Lean, deflation, teaming
SG&A cost • P&L delayering and
1,490 1,465 consolidation
-1)
1,410
− Disposition of 10+ sites
since 2011
− Global shared services
2011 2012 2013
% revenue 8% 7% 7%
1) Excludes Avio acquisition SG&A
GE PROPRIETARY INFORMATION | Jefferies Investor Visit GE Aviation 14Commercial engines
GE PROPRIETARY INFORMATION | Jefferies Investor Visit GE Aviation 15Commercial power for today … and tomorrow
Regionals
CF34®
Passport
CT7 Bombardier EMBRAER Saab 340 ACAC ARJ21 Global 7000/8000
CRJ200/700/900 170/175/190/195
Single Aisle
CFM56*
LEAP*
Boeing 737 Airbus A320 Airbus A320neo Boeing 737 MAX Comac C919
Twin Aisle
CF6
GEnx
Boeing 767 Airbus A300/310/330 Boeing 787
Jumbo
Twin Aisle
CFM56, CF6/GEnx
GP7200**, GE90, Airbus A340-200/-300 Boeing 747-200/-300/-400 Airbus A380 Boeing 777 Boeing 777X
GE9X Boeing 747-8
*CFM, CFM56 and the CFM Logo are trademarks of CFM International, a 50/50 joint company of Snecma and GE
**GE-P&W Engine Alliance is a 50/50 joint venture with Pratt & Whitney
GE PROPRIETARY INFORMATION | Jefferies Investor Visit GE Aviation 16Commercial Equipment Growth
Environment Production volume In-service fleet
# of GE and JV engines (-1 # of engines ‘000
Passenger
demand 44
(IATA, RPK % YoY)
3,300 36
5.3 5.2 5.8 3,000 33
26
2012 2013 2014F 2,600
20
18
Load factors
(%)
18
15 16
79 80+ 80+
2012 2013 2014F '13 '15F '20F ’13 ’15F ’20F
Jet fuel
($/gal) 18.7
Airline profits 12.9
$Billions (IATA) 7.4
310 298 293
2012 2013 2014F 2012 2013 2014F
… airlines feeling good CFM is a 50/50 JV between GE and Snecma
EA is a 50/50 JV between GE and Pratt & Whitney
Source: IATA and GE analysis LEAP is a trademark of CFM International
-1) Production volume approx. 34% GE, 62% CFM, 4% EA
GE PROPRIETARY INFORMATION | Jefferies Investor Visit GE Aviation 17Commercial orders and fleets
Europe
51% 47%
20% 11%
In service Backlog
North America
China
30% 50%
Orders Backlog 61% 46%
30% 14%
In service Backlog
($B) $118 8% 22%
In service Backlog
$22
96
Svs 9
Asia
CEO (-1 13 22 38% 36%
Latin America 21% 8%
2013 2013
45% 48% 0.4% 0%
20% 5% Middle East In service Backlog
In service Backlog 21% 24%
33% 21%
7% 6%
CFM is a 50/50 JV between GE and Snecma
EA is a 50/50 JV between GE and Pratt & Whitney
In service Backlog -1) CEO orders $6.2 GE, $6.3 CFM, $0.1 EA
CEO backlog $11.4 GE, $9.6 CFM, $0.7 EA
GE PROPRIETARY INFORMATION | Jefferies Investor Visit GE Aviation 18Growth ahead of demand in all regions
(Aircraft fleet in service)
North America Europe China
Traffic growth ~ 3% Traffic Growth ~ 3.5% Traffic Growth ~ 7.5%
Our growth 11% Our growth 17% Our growth 22%
In ‘12 ’15F In In
‘12 ‘15F ‘12 ‘15F
Service Service Service
Fleet ~3,900 ~4,350 Fleet ~3,800 ~4,500 Fleet ~1,500 ~1,800
Latin America Middle East Asia
Traffic growth ~ 5% Traffic Growth ~ 6.3% Traffic Growth ~ 4.8%
Our growth 30% Our growth 32% Our growth 30%
In ‘12 ‘15F In ‘12 ‘15F In ‘12 ‘15F
Service Service Service
Fleet ~800 ~1,050 Fleet ~600 ~800 Fleet ~1,750 ~2,300
CFM is a 50/50 JV between GE and Snecma
EA is a 50/50 JV between GE and Pratt & Whitney
Traffic growth is between ‘13-32. Source: GE Aviation Marketing
GE PROPRIETARY INFORMATION | Jefferies Investor Visit GE Aviation 19Commercial services growth
Environment Departures Shop visits
# departures (millions)
5,500
Passengers
(IATA, RPK % YoY) 200
40 4,400
4,100
5.3 % 5.2 % 5.8 % 35
30
100 3,000
2012 2013 2014E 2,300
25 2,100
20
Utilization
Avg. cycles/ day, % YoY 15
10 2,300
-1 % 0.9 % 0.2 %
5
2,000 2,000
2012 2013 2014E
0
‘95 ‘00 ‘05 ‘10 ‘15F ’13 ’15F ’20F
Departures
$96B
GE & JV-powered flights (MM)
20 21 22 2 of 3 daily flights
2012 2013 2014E
Source: IATA & GE analysis powered by GE or GE JV’s Services backlog
CFM is a 50/50 JV between GE and Snecma
EA is a 50/50 JV between GE and Pratt & Whitney
GE PROPRIETARY INFORMATION | Jefferies Investor Visit GE Aviation 20Commercial product positioning
Today’s airline Today’s
service Installed base (2015F) investment
Regional/
9,600
Business
H80 HF120 GE Passport
Narrowbody
20,000 LEAP-1A LEAP-1B LEAP-1C
Widebody
6,600 GEnx-1B GEnx-2B GE9X
~13,700 engines (backlog) CFM is a 50/50 JV between GE and Snecma
EA is a 50/50 JV between GE and Pratt & Whitney
HF120 is made by GE Honda, a 50/50 JV between GE and Honda Aero, Inc.
LEAP is a trademark of CFM International
GE PROPRIETARY INFORMATION | Jefferies Investor Visit GE Aviation 21Powering the world’s regional fleet
CF34 engines in service
Bombardier CRJ200/700/900/1000
5,000 5,100
4,600
Embraer 170/175/190/195
'13 '15F '20F
73
COMAC ARJ21
CF34 shop visit forecast
156
operators 1,100
MILLION 1,000 1,000
in 67 flight hours
countries '13 '15F '20F
GE PROPRIETARY INFORMATION | Jefferies Investor Visit GE Aviation 22Preferred power for narrowbody
CFM56 … LEAP …
• 26,000 engines • 2016 service
delivered entry
• 30+ years • Selected
in service by Airbus,
630
Boeing,
• 34,000+ COMAC
departures
• 6,300
15
per day
MILLION orders and
commits
%
flight hours
Fleet in service
• 9,000 a/c
20,300
opportunity
18,800
L O W E R
fuel consumption *
’14E ’20F
*Compared to today’s generation CFM56. Claims based on GE estimates
LEAP, CFM, and the CFM logo are trademarks of CFM International, a 50-50 JV between Snecma and GE
GE PROPRIETARY INFORMATION | Jefferies Investor Visit GE Aviation 23Superior fuel burn … today and tomorrow
CF6 … GEnx …
• Best-selling • Fastest-
widebody selling GE
engine ever … widebody
43
7,450 delivered engine
• 397 million • 1,835,000
hours flown hours flown
• ~750 shop • 1,600 engines
YEARS visits in ‘14 ordered
62
in service
• 1,600 a/c in Engines in service %
operation
2,100 ~
NEW ENGINE
deliveries beyond 2020 630
'14E '20F
W I N R AT E
B oeing 787
Airbus A380
Claims based on GE estimates
GEnx win rate does not include undecided engine campaigns
GE PROPRIETARY INFORMATION | Jefferies Investor Visit GE Aviation 24Technology leadership in big twins
GE90 … GE9X …
• 600 aircraft • Service entry
on order end of decade
• Sole source
41
• 1,700
engines on 777X
in service • 3,000 a/c
• With 65 opportunity
operators
5
Most
MILLION advanced
flight hours
Fleet in service engine
GE’s ever
%
2,600
designed BETTER
fuel efficiency
1,700
vs. ANY engine
’14E ’20F I N C L A S S
Claims based on GE estimates
GE PROPRIETARY INFORMATION | Jefferies Investor Visit GE Aviation 25Building on technology investment
2011 2015-2016 2020
Scale and Scale & design
design for for higher thrust
higher cycle and advanced
utilization materials
GEnx LEAP & Passport GE9X
E X P E R I E N C E
Delivering technology
with customer confidence
6000
E N G I N E S
60M
H O U R S
Enabling … Commercial launches 9
• Engineering productivity 10%+ 7
5 5
3
• Manufacturing technology readiness
• Supply chain efficiencies
70's 80's 90's 00's 10's
LEAP is a trademark of CFM International, a 50-50 JV between Snecma and GE
Technology experience (engines/hours): CFM: ~4,000/~30MM, GE: ~2,000/~30MM
Commercial launches: 19 GE, 9 CFM, and 1 EA
GE PROPRIETARY INFORMATION | Jefferies Investor Visit GE Aviation 26Carbon-fiber composites … only GE
GE90-94B GE90-115B GEnx GE9X
777-200ER 777-200LR, -300ER, 777F 787, 747-8 Boeing 777X
‘95 ‘04 ‘11 ‘20
• Wide chord design • Swept aero • Improved efficiency • Improved materials
22 blades 22 blades 18 blades 16 blades
2020 fan blade
EXPERIENCE Extending
100
million flight hours
+ to fan cases
• Integrated structure
• Saves 700+ lbs per
aircraft on 787
Based on GE estimates
GE PROPRIETARY INFORMATION | Jefferies Investor Visit GE Aviation 27Compression technology … driving efficiency
through pressure
GEnx LEAP & Passport GE9X
787, 747-8 737MAX, A320neo Global 7/8000 777X
2011 2015-2016 2018 Cert
23-1
Compressor
22-1 27-1
pressure ratio
1 technology platform …
4 product applications
Performance claims based on GE estimates
LEAP is a trademark of CFM International, a
50-50 JV between Snecma and GE
GE PROPRIETARY INFORMATION | Jefferies Investor Visit GE Aviation 28Combustion technology
A 20+ year journey of proven TAPS III (GE9X)
innovation in combustion Next-Gen 777
science, materials, and
manufacturing
TAPS II (LEAP)
737 MAX, A320 neo 2019
• Higher pressure, new
standard in industry
TAPS I (GEnx)
787, 747-8
2015
DAC (GE90-94B) • Additive fuel circuit
777-200ER, 777F
2008
• Evolution in lean
1995 combustion
• Set the industry
standard
Leader in NOx technology
GE PROPRIETARY INFORMATION | Jefferies Investor Visit GE Aviation 29Turbine technology
GE9X
Next-Gen 777
Leading edge innovation …
delivering best fuel burn LEAP
737 MAX, A320 neo
GEnX 2019
787, 747-8
• Advancing Ceramic-
matrix composites
• Advancing metals
GE90 technology
777
2015
• Advanced Ceramic-matrix
composites
2008
• Aero and cooling
innovation
1995/2004
• 3D Aero sets industry
standard
GE PROPRIETARY INFORMATION | Jefferies Investor Visit GE Aviation 30Ceramic-matrix composites (CMC) … next
generation of innovation
CMCs are silicon carbide fibers Combustor
in a silicon carbide matrix Shrouds
Diameter of a
human hair
Blades
Nozzles
2,400 F ° 500°F hotter
than metal + 1/3 weight
of metal = better fuel
efficiency
LEAP is a trademark of CFM International, a 50/50 JV between Snecma and GE
GE PROPRIETARY INFORMATION | Jefferies Investor Visit GE Aviation 31Ceramic-matrix … only GE
2.3
GE9X
M Revenue
Hours service
by 2019
Research LEAP
1980 2000 Product Development 2016 2020
1 st GENERATION
2 nd G E N E R A T I O N
3 rd G E N E R A T I O N
GE Power Aviation Aviation
Turbine shroud HPT shroud HPT nozzles and blades
GE Frame 7 GEnx and T700 ADVENT and F414
GE PROPRIETARY INFORMATION | Jefferies Investor Visit GE Aviation 32Commercial services
GE PROPRIETARY INFORMATION | Jefferies Investor Visit GE Aviation 33Servicing our customers today and tomorrow
GE & JV engines backlog Service offerings
Production Services
(years) ($B)
CFM/
LEAP 4 $43 Risk Transfer $/hr comprehensive maint coverage
CF6 6 $6 Overhaul Time and material (T&M) overhaul
CF34 2 $5 Material New, Used, Repaired
GE90/
GE9x 4 $27
Asset
TRUEngineTM program
Analytics
Optimization Diagnostics
6 $13
96B
GEnx
$
GP7000 2 $2 33,000
engine installed fleet Backlog
16,300 CFM56 engines. CFM is a 50-50 JV between GE and Snecma
120 GP7000 engines. GP7000 is a product of EA, a 50-50 JV between GE and Pratt & Whitney
GE PROPRIETARY INFORMATION | Jefferies Investor Visit GE Aviation 34Industry leading product portfolio … today and
tomorrow CF6-80E
powered
CF6-80C
powered
widebodies
Engine lifecycle revenue GE90-powered
widebodies
Boeing 777
GP7200-powered
A380
CF6-6/50
powered
GE9X-powered
Boeing 777X
Parts and widebodies
Design New Services
and Test engines
40+ Years
CF34 8/10 CFM-5/7 powered
powered narrowbodies
regionals CF34-3 CFM-3 powered
powered narrowbodies
regionals
LEAP-powered
narrowbodies
GEnx-powered
widebodies CFM International is a 50/50 joint company between Snecma and GE
Engine Alliance is a 50/50 JV between GE and Pratt & Whitney
GE PROPRIETARY INFORMATION | Jefferies Investor Visit GE Aviation 35Well positioned for services growth
Large fleet Young fleet Diverse fleet
Installed base Engine maturity Segment/geographic
21,000 aircraft in ‘13
Total Type WB
fleet
NB
1+ 0 RJ
SV SV TP
Region
CFM CFM N.Am
7B/5B 1+ L.AM
fleet SV 0 Europe
GE
SV ME/Af
Asia
‘90 ‘10 ‘13
'90 '10 '13
CFM is a 50/50 JV between GE and Snecma
EA is a 50/50 JV between GE and Pratt & Whitney
GE Honda is a 50/50 JV between GE and Honda Aero, Inc.
GE PROPRIETARY INFORMATION | Jefferies Investor Visit GE Aviation 36Aligned network of global service partners
• More than 8,000 employees in 10 countries • 400+ services customers worldwide
• 250 field service engineers • 55+ years of experience (25+ years CFM)
• 450 dedicated customer support representatives • Network locations worldwide
OEM Network
GE Celma CFM56
GE Strother
CF6
GE Malaysia EGAT
GE90
GE Overhaul Shops
GE Wales
Snecma Shops
Network CF34/CT7
GE Caledonian
GE Component Repair GEnx
Cincinnati McAllen, TX Terre Haute Hungary Singapore Singapore-ATI
St. Quentin
Brussels
Morocco
Mexico
CFM, CFM56, and the CFM logo are trademarks of CFM International, a 50/50
joint company between Snecma and General Electric Company
GE PROPRIETARY INFORMATION | Jefferies Investor Visit GE Aviation 37GE’s tradition: continuous product improvements to
reduce customers’ cost of ownership
I M P R O V E M E N T S
Installed
base (‘13) Upgrades Fuel Burn Time-on-wing
CFM56
~18,500
1984 EIS
8 8% 2x
CF6-80C2
~3,000 8 3% 3x
1986 EIS
GE90
~1,550 5 2% 2x
1995 EIS
CFM is a 50/50 JV between GE and Snecma
GE PROPRIETARY INFORMATION | Jefferies Investor Visit GE Aviation 38Minds + Machines = customer productivity
Big data and predictive Customer outcome
analytics
Predictive Analytics Operations optimization
Advanced detection methods Zero unplanned downtime /
Rapid data forensics + data sciences disruptions
Avoid high cost failures
Fleet segmentation
Reduced maintenance burden
Engine and part specific duty cycle
Inspections tailored by serial
Analytic based inspection limits … FAA number
approved
Airline operations optimization Improve airlines flight economics
Flight Efficiency Services Optimized policies and procedures
Using analytics to identify operational via data fusion and analytics … fuel
savings savings
GE PROPRIETARY INFORMATION | Jefferies Investor Visit GE Aviation 39Military engines & services
GE PROPRIETARY INFORMATION | Jefferies Investor Visit GE Aviation 40Military … the affordable alternative
Global position Proven power for DoD Global In-service fleet
# of engines Total platforms # of engines ‘000
2014 installed fleet
Rotorcraft 30
61% 6,211 26
Marine
14,000 25 4 Special
Combat
22,600 4 3 Transports
64% 3,403 4
3
15,700 2,300 3 7 Combat
Large tanker/transport *-a)
6
40% 1,584 6
DoD budget ($ billions)
Bombers 15 Helos
581 575 12
War 51% 160 10
funding
Marine
Base
72% 143
’14E ’15F ’20F
FY14 FY15 President's
* CFM is a 50/50 JV between GE and Snecma
Budget (a-includes aircraft with MTOW
CFM ~2,300 ‘13, ~2,400 ‘15, ~2,600 ‘20
>150,000 lbs
Source: Flight Global, GE analysis
GE PROPRIETARY INFORMATION | Jefferies Investor Visit GE Aviation 41Upgrades to fleet improvement
Program Opportunity Value prop
Black Hawk/Apache
Total engines
T700-701D •5% more power
6,500 •2-3X core life
$2B+ • Army funded dev.
Rev
KC-135
F108 (CFM) C-PUP •1.5% better fuel burn
1,515 •>600 fewer shop visits
$1.5B • Life savings of $2B
Rev
Super Hornet/Growler
F414 EDE • More systems power
• Life savings up to $5B
1,730
$3B •20% thrust increase
Rev
CFM is a 50/50 JV between GE and Snecma
GE PROPRIETARY INFORMATION | Jefferies Investor Visit GE Aviation 42Helicopters … diversified growth
GE-powered T700 military derivative: CT7 power of choice
international military
(installed engines)
40%
Operating in
32 countries 4,400 AW189 525
S-92 Relentless
3,200 EIS ’04 EIS ’13 1st flight ’14
‘12 ’20F
AW149 AW101
GE-powered oil & gas
helicopters
(installed engines)
4X
NH-90 KUH-Surion
570
144
AH-64 Apache T-70/Black Hawk
‘12 ’20F
GE PROPRIETARY INFORMATION | Jefferies Investor Visit GE Aviation 43Leadership in rotorcraft …
Our newest family member … GE38 Next generation for rotorcraft
More power in
hot/high conditions
Lower fuel
consumption
Lower operating costs
Sikorsky CH-53K King Stallion
“US largest new rotorcraft system … new 65%
technologies … 3X lift capability of aircraft it replaces” AATE T700
better
Aviation Week – May 5th (Advanced Affordable baseline
25% 35%
Turbine Engine) lower lower
• For Black Hawk and Apache
• 57%* more power 80%
better
• 18%* better SFC FATE T55
(Future Affordable baseline
• 63%* fewer parts Turbine Engine)
35%
lower
45%
lower
GE38
• For NextGen rotorcraft
7,500 shp class
*Compared to engine it replaces (T64) Specific Fuel Power: Cost
Consumption weight
(SFC)
GE PROPRIETARY INFORMATION | Jefferies Investor Visit GE Aviation 44Leadership in combat …
What is next gen combat propulsion? Adaptive cycle game changers
Today … Enables adv weapons
Enhanced survivability
High performance Fuel efficiency Increased thrust
Improved cooling capacity
OR
Highest
Low-bypass, high thrust High-bypass, highly efficient combination of
pressure and
temperatures
Future … Adaptive Cycle ever achieved in
High performance AND Fuel efficiency ADVENT engine industry
ADVENT
(Adaptive Versatile Engine
Technology)
Only Engine Mfg.
• 3rd stream fan • High energy core awarded
AETD
• Advanced materials • Advanced cooling
BOTH
(Adaptive Engine
Technology Development)
contracts
GE PROPRIETARY INFORMATION | Jefferies Investor Visit GE Aviation 45Building on technology investments
Commercial engines
GEnx AETD
(Adaptive Engine Technology
LEAP Development)
Advanced aerodynamics & cooling
High temperature alloys
GE9X
Ceramic Matrix Composites (CMC)
High efficiency core
Military engines
ADVENT
Fuel 30% 10%
burn better more
F136 5thGen
baseline 25% Range Thrust
lower
Adaptive cycle & 3rd stream
High pressure ratio
Survivability technologies
Augmentor/exhaust nozzle
CFM is a 50/50 JV between GE and Snecma
GE PROPRIETARY INFORMATION | Jefferies Investor Visit GE Aviation 46Aviation systems & Business and general
aviation
GE PROPRIETARY INFORMATION | Jefferies Investor Visit GE Aviation 47GE Aviation systems solutions
2 global business Positioning for growth Worldwide presence
787:
Avionics & Digital $1.0MM/aircraft
Core Avionics A350:
$1.0MM/aircraft
Digital Systems
A380:
$1.5MM/aircraft North America
Integrated Systems F-35: United States
$1.6-1.8MM/ Canada
aircraft Asia-Pacific
Electrical power
China
Australia
Mechanical Europe Singapore
G650: United Kingdom
C919: $0.4MM/aircraft France
Unison $3.0MM/aircraft Poland
GE PROPRIETARY INFORMATION | Jefferies Investor Visit GE Aviation 48Avionics overview … GE portfolio
5 product areas …
Flight Management System (FMS) Computing and networking
• Flight planning • Centralized computing hardware
• Flight optimization, performance • Remote interface network units
Displays Vehicle Health & Mission Systems
• Head-down displays Data Mgmt (VHDM)
• Payload deployment
• Standby instruments • Aircraft data recording • UAV refueling, landing
• Aircraft health monitoring
Key programs, pursuits
KC-46/C-130/P-8 C919 B777X B737/A320 upgr. Typhoon
FMS
Computing
Displays
Opp’ty $ 300M+ $ 400M+ $ 450M+ $ 700M+ $ 140M+
GE PROPRIETARY INFORMATION | Jefferies Investor Visit GE Aviation 49Growth in China
Launch platform … COMAC C919
… EIS 2017
• Tier 1 avionics … hardware and software
development, and integration
• 250 engineers in Shanghai Displays
Core computing
Engines
China, Asia-Pac … key growth Integrated propulsion
Deliveries next 20 years* Asia-Pac fleet size*
20%
Other 35% ~3x
13,700
Asia-Pac
23% Networking
Europe 4,700
22% Flight Management
N. America System On-board maintenance
2011 2031
* Boeing estimate
GE PROPRIETARY INFORMATION | Jefferies Investor Visit GE Aviation 50Integrated systems
Differentiated solutions for military & civil platforms
Power Unison Mechanical
• Aircraft power … generation, • Thermal management • Propellers
distribution & conversion • Tubes & ducts • Aero structures
• Air management systems … • Electrical components … • Landing gear & actuation
valves, air starters • Ignition, sensors, FADEC power
GE PROPRIETARY INFORMATION | Jefferies Investor Visit GE Aviation 51Electric Power … airplane “smart grid”
Primary power Secondary power Power
distribution Generation distribution conversion Integration labs … US & UK
Emergency Environmental Advanced Battery
power controls propulsion systems
… Applying GRC innovations
Where we are competing and winning
• Primary & distributed power … G650
• Primary power on … 75% large UAVs
• Backup power on … 777X
• Power System on … JSF
GE PROPRIETARY INFORMATION | Jefferies Investor Visit GE Aviation 52Business & General Aviation engines
CF34
Turbofan
Bombardier Challenger 605 Bombardier Challenger 850 Bombardier Challenger 870 Bombardier Challenger 890 Embraer Lineage 1000
CFM56-5B CFM56-7B
Airbus A319 Boeing Business Jet
Passport 20
Bombardier Global 7000 Bombardier Global 8000
GE Honda*
HF120
HondaJet
M601,
H80
LET L410 Thrush 510G King Air 90 (Retrofit)
*GE Honda Aero Engines LLC is a 50/50 joint venture between GE and Honda Aero Inc.
CFM, CFM56 and CFM logo are trademarks of CFM International, a 50/50 joint company of Snecma and GE.
GE PROPRIETARY INFORMATION | Jefferies Investor Visit GE Aviation 53Expanding in growing segments
Turboprops … lowest Turboprop platforms
cost, best performance
Light jets … expand GE
Honda franchise Thrush Aircraft 510G AIR-TEC L410 Upgrade CAIGA TP150
Mid-size jets …
everything but engines
Large cabin … GE Technoavia Rysachok Aircraft Industries L410 Nextant Aerospace G90XT
Passport + Flight H-Series aircraft opportunities*
Efficiency Services and New
Power
Services … synonymous Retrofit
with support
2,100 500
* Next 10 years
GE PROPRIETARY INFORMATION | Jefferies Investor Visit GE Aviation 54Expanding in growing segments
Large business jet Light business jet
Passport: First HF120: Certified
engine to test • 12,000+ engine cycles
• Engine performance • 8,400 + engine test hrs.
on track
• GE at 23%, projected 2022 share 35% • HF120 share grow to 25% by 2022 …
growth stimulated by new platforms
• Increased international deliveries on
demand for larger cabin, longer range • Expected $8B market ’13’-’32
GE PROPRIETARY INFORMATION | Jefferies Investor Visit GE Aviation 55
GE Honda is a 50/50 JV between GE and Honda Aero, Inc.Engineering excellence
GE PROPRIETARY INFORMATION | Jefferies Investor Visit GE Aviation 56Engineering … a global community
Aviation
GRC
Czech Republic
~70 engineers
UK
~650 engineers Poland
~650 engineers
United States
~5650 engineers Italy Turkey China
~425 engineers ~250 engineers ~150 engineers
Mexico
~1100 engineers India
~690 engineers
Over 9500 engineers around the globe
+ 3000 technologists at 5 Global Research Sites
GE PROPRIETARY INFORMATION | Jefferies Investor Visit GE Aviation 57Leading in commercial engine technology
Fuel Burn
improvement
777X (GE9X)
A320, 737 (CFM LEAP) 20%
787 (GEnx)
A380 (GP7000)
10%
777 (GE90)
737 (CFM56) Regionals (CF34)
1980 2000 2020
LEAP is a trademark of CFM International, a 50/50 JV between Snecma and GE
GE PROPRIETARY INFORMATION | Jefferies Investor Visit GE Aviation 58Our key new product introductions
Program ‘14 ‘15 ‘16 ‘17 ‘18 ‘19
GEnx In service Tech maturation
Boeing
Production development
GE Honda FAR 25 In service
HF120 Honda
Passport Bombardier
Flight test Cert In service
CFM LEAP Flight test Cert In service
Engine
Airbus/ COMAC Flight test Cert In service
Boeing
test
Heavy Lift Flight test Flight test Flight test In service
helicopter Sikorsky
Tech Drawing Engine
GE9X Boeing develop release test
Flight test Cert In service
Advanced Tech Tech Drawing Engine
Flight test Cert
Combat DoD develop develop release test
Advanced Tech Tech Tech Drawing Engine
Flight Test
helicopter DoD
develop develop develop release test
HF120 is a trademark of GE Honda, a 50/50 JV between GE and Honda Aero Company
LEAP is a trademarks of CFM International, a 50/50 JV between Snecma and GE
GE PROPRIETARY INFORMATION | Jefferies Investor Visit GE Aviation 59Technology “FastWorks” …
Design Iterations From Your Desk
Design Concept Test Prototype Turnaround
Before
Metal Casting
36
WEEKS
Now
3D Printing
2
WEEKS
GE PROPRIETARY INFORMATION | Jefferies Investor Visit GE Aviation 60Technology-dedicated lean labs … accelerating
innovation
1
Research
lab Maturing All Technologies
Lean
Labs
Production
11Individually Focused Labs
GE PROPRIETARY INFORMATION | Jefferies Investor Visit GE Aviation 61Avio Aero … broad range of capabilities
Aeroengine technologies – Avio positioning
(Qualitative representation of a geared turbofan engine)
High Low
Power Accessory Combustion
Fan Compressor pressure Pressure
Gearbox Gearbox chamber
turbine Turbine
• Unique design & make capabilities • Up to 700 kw power range • World’s largest LPT experience (GE90)
• Up to 30 MW power range • GBX integration with oil system • State of the art turbine efficiency (GEnx)
GE PROPRIETARY INFORMATION | Jefferies Investor Visit GE Aviation 62The global research advantage
Global Research Center Aero-Thermal and
Niskayuna, NY 3,500 Mechanical Systems
research
India Technology Center employees Chemistry and Chemical
Bangalore, India Engineering
China Technology Center
Shanghai, China
50,000 Diagnostics and
Biomedical Technologies
GE
technologists
Global Research Europe
Munich, Germany
worldwide Electrical Technologies
and Systems
Brazil Technology Center
Rio de Janeiro, Brazil
~$5 billion Manufacturing and
Materials Technology
technology
Global Software Center
spend
Software Sciences and
San Ramon, CA Analytics
GE PROPRIETARY INFORMATION | Jefferies Investor Visit GE Aviation 63GE’s Analytics Advantage
350
SoftWare CoE
Engineers working on
Aviation Analytics
25 Customers connected
to full flight data
~10M
Full flight data growth
(# of flights)
3.4M
15k
2013 2014 2015
Data
Aviation Volume
(Tera Bytes) 2 340 1,500
GE PROPRIETARY INFORMATION | Jefferies Investor Visit GE Aviation 64Minds & Machines at GE Aviation
Asset productivity….example
Issue: Accelerated wear in regions
with high air particulates
Approach: Applied analytics to
detect engines at risk of early removal
Distress
metric
(millions of data points used…every engine in the fleet,
every flight)
Flight Cycles
Value: Prevent high cost events and
minimize customer maintenance burden
Time on Wing Maintenance, Reliability Disruptions
Repair & Overhaul
GE PROPRIETARY INFORMATION | Jefferies Investor Visit GE Aviation 65Minds & Machines at GE Aviation
where physics meets analytics
Anomaly Detection Descriptive Analytics
Operator A
Derate, dust
Temperature
Operator B
Exposure
Engine
No derate, dust
Departures
Part Temperature
“Temperature has shifted
in particulate environments” Engine data + “A subset of the fleet is
environment + engine susceptible to accelerated wear”
physics =
Predictive Analytics Prescriptive Analytics
Customer Value
Takeoff
Climb
Corrosion Above limit … on watch
Distress Metric
Cruise
Exhaust gas temp (C)
Threshold
Below limit … continue service
Departures
“Condition will cause engine removal in
“We have isolated the xx flights. Recommended operation to
operational condition” extend time on wing is…..”
GE PROPRIETARY INFORMATION | Jefferies Investor Visit GE Aviation 66Minds & Machines at GE Aviation
Flight Efficiency Services…improving how airlines fly their planes
Green = Left
Red = Right
+ Fleet Synchronization
“Let’s implement full
ops efficiency”
+ Navigation Services
“Partner with me to
increase efficiency” Average Cost Increase = 2300 kg / hold
+ Fuel and Carbon
“Let’s find and implement
fuel saving programs”
+ Austin Digital
“Let’s measure and track
safety & fuel procedures”
Average Cost Increase = 150 kg / flight
GE PROPRIETARY INFORMATION | Jefferies Investor Visit GE Aviation 67Supply chain
GE PROPRIETARY INFORMATION | Jefferies Investor Visit GE Aviation 68Supply Chain … a global community
Services
Engines New Make
Systems New Make
79 facilities
21 countries
31,400 employees
5,000 suppliers
9 joint ventures
GE PROPRIETARY INFORMATION | Jefferies Investor Visit GE Aviation 69Supply Chain execution
Capacity & Capability
(commercial & military units) • Restructure high cost sites
4,000 4,100 4,150
• Increase volume at low cost sites
70%
NPI
NPI
Comm’l
Military
• Expand footprint … new plants
'14E '15F '20F
Drive Cost out • Accelerate productivity …
($ in millions) ++
+ material & conversion
$221
• Vertical integration … make vs. buy
'11-'13 Avg '14 '15-'17 Avg
• Dual source for cost & risk reduction
GE PROPRIETARY INFORMATION | Jefferies Investor Visit GE Aviation 70Vertical integration activity
2011 – 2013 … 16 deals
Technology differentiation &
cost control
Venture
Joint
FADEC JV
• Ceramic-matrix composites
• Enabling technologies
Acquisition
• FADEC JV
• Fuel nozzles JV
• Composites
10+
Disposals
Low technology
Non-core • Advanced castings
dispositions
Reenergizing make vs. buy
GE PROPRIETARY INFORMATION | Jefferies Investor Visit GE Aviation 71Fuel nozzles … partnering for innovation
GEnx LEAP
Tip 20+ components 1 component
Braze/weld 27 joints/11 6 joints/8
Cost 25% less
Weight 30% lighter Additive tip
(Combined fuel
and air circuits)
Supplier Developed GRC
Supplier Designed GE Aviation
Supplier Intellectual property GE
Supplier Manufacturing Joint venture
Supplier Services Joint venture
Formation of Advanced Atomization Technologies as a Joint Venture between GE and Parker is subject to regulatory approval
GE PROPRIETARY INFORMATION | Jefferies Investor Visit GE Aviation 72Unique Additive Manufacturing expertise
Italy – Cameri (Novara)
• Established in 2004 Key technologies
• 10 years of R&D/prod.
experience
• New plant in 2013 (12,000 sqft
+ growth potential of 2x)
• Technical Lab (chemical,
Laser Scan)
• Gas Atomization for powder
production (Q1 2015) DMLS (Direct Metal Laser sintering) EBM (Electron Beam Melt.)
Products
Housing Air duct Liner
TiAl Rotor blades Impeller Injection system Deoiler
GE PROPRIETARY INFORMATION | Jefferies Investor Visit GE Aviation 73Building new technology capabilities
Ceramic-matrix composites
Material … Product … Production …
Lean labs
Newark, DE Asheville, NC
Additive manufacturing
Application science … Scale … Production …
Clyde, NY
World’s highest capacity manufacturer Auburn, AL
* Advanced Atomization Technologies (Parker JV) pending regulatory approval
GE PROPRIETARY INFORMATION | Jefferies Investor Visit GE Aviation 74Maintenance, repair & overhaul … footprint for
the future
OEM Services backlog Network
++
GE Celma $96
$42
CFM56
'10 1Q'14 '20F
GE Strother
GE Malaysia
Engines under CSA CF6
15,000 EGAT
11,300
9,000
GE90
GE Wales
'10 1Q'14 '20F CF34/CT7
GE Caledonian
Network imperatives
GEnx
St. Quentin
• Grow low cost sites
Brussels
Casablanca
Queretaro
• Expand partner capability and
capacity in each region
CFM, CFM56, and the CFM logo are trademarks of CFM International, a 50/50
joint company between Snecma and General Electric Company
GE PROPRIETARY INFORMATION | Jefferies Investor Visit GE Aviation 75Wrap up
GE PROPRIETARY INFORMATION | Jefferies Investor Visit GE Aviation 76In summary
Great GE business that invests & delivers
Unprecedented installed base … and
growing
Investments in all segments securing
product positions
Unprecedented services backlog … and
growing
Minds & machines enhancing customer
productivity
A commitment to technology leadership
Culture of simple, competitive cost
structure
GE PROPRIETARY INFORMATION | Jefferies Investor Visit GE Aviation 77You can also read
