Growing Opportunity. Jacques St-Laurent. President Bell Helicopter Textron Canada LTD. Analyst Briefing November 30, PDF Free Download

Growing Opportunity Jacques St-Laurent President Bell Helicopter Textron Canada LTD Analyst Briefing November 30, 2006 1

Bell Helicopter Mirabel Operations Supporting Bell s Journey to Premier Commercial Products Mirabel Facility Mirabel Organization & Operation The Canadian Advantage Mirabel s Growth Plan & Challenges Mission: To Become the World s Premier Vertical-Lift Aircraft Company 2

Commercial Business Products & Support Services Aircraft Support 206B3/L4 210 427 407 412 Spares Repair &Overhaul Aircraft Completions Refurbishment Training Systems Field Services 430 429 417 609 Technical Data Support Equipment Commercial Business Growing 3

Rotorcraft Missions Corporate EMS Utility Law Enforcement Offshore Disaster Relief Helicopters Perform a Wide Variety of Missions Every Day 4

Industry Segmentation Installed Base by Mission Annual Commercial Aircraft & Support/Service Value $5.0B Corporate 18% Utility 50% Law Enforcement 18% EMS 7% Offshore 7% *2005 Figures, not including Research, Development, Test, & Evaluation Segment Spending Compiled from: Honeywell Rotorcraft Forecast (2005), Forecast International World Rotorcraft Market, Morgan Stanley and JP Morgan Analyst Reports Strong Growth Across All Segments 5

Commercial Rotorcraft Industry - Strong Growth Outlook Homeland Security Increasing Border Protection: Domestic And International Offshore/Utility Segments 80% Of Fleet: 20 Years Or Older Regulatory/Insurance/Safety Issues Driving Fleet Replacement High Oil Prices Driving Offshore Exploration EMS & National Disaster Efforts Asia Tsunami Disaster; Pakistan Earthquake Relief Hurricane Katrina / Rita / Wilma Growing International Demand Asia-Pacific Significant Opportunity Broad-Based Industry Growth Drivers and Significant International Opportunities 6

Seating: Range: Speed: 5 place 374 NM 115 kts Mirabel s Commercial Products 7

Seating: Range: Speed: 7 place 324 NM 110 kts 8

Seating: Range: Speed: 7 place 314 NM 135 kts 9

Seating: Range: Speed: 10 place 272 NM 138 kts 10

412 Seating: Range: Speed: 15 place 356 NM 122 kts 11

New Introduction from Bell Bell 417 Light Single Product Improvements Driven By Customer Input Lower Direct Operating Costs (DOCs) Integrated, Modern Avionics Suite Improves Safety First Delivery 2009 Making Our Best-Selling Long-Light Single Even Better 12

New Introduction from Bell Bell 429 Global Ranger Light Twin First-ever Technologies from Bell s Modular Affordable Product Line (MAPL) Unprecedented Cabin and Cockpit Features New High Performance Rotor Technology First Delivery 2008/2009 Over 175 Orders 13

Commercial Aircraft Orders 500 Units 400 300 200 258 Orders YTD Q3 05 325 Orders 100 0 $1,500 2002 2003 2004 2005 2006 Q3 $1,000 $840M $M $500 $0 2002 2003 2004 2005 2006 Q3 (*) 2005-06 orders include firm 417 and 429 orders, which are not in backlog Continued Strong Growth in Orders 15

Strong Commercial Backlog $2,000 $1,500 429 & 417 Orders, Not Yet in Backlog $M $1,000 $500 $0 2000 2001 2002 2003 2004 2005 Q306 Growing Commercial Business 16

Mirabel is Center for Commercial Helicopters 2000+ Employees 3200+ Helicopters Produced 18

Mirabel Operations 2 Runways & Control Tower on 152 Acres Complete Flight Test Capability 19

Mirabel s Organization Functions Fully Integrated with Bell Helicopter Inc: Operations: Manufacturing, Assembly, & Delivery Engineering: Research, Product Development, Airworthiness, Operations Support Product Support Engineering & Technical Publications Organizations Aligned by Programs: Production Models 429 ARH Canadian Department of National Defense (DND) Mirabel is Bell s Commercial Production Center 21

Mirabel s Operating Principles (1) We Improve Our Processes, Reduce Waste And Eliminate Variations...and We Sustain The Improvements Using Textron Six Sigma/Lean We Use The Group Performance Excellence (GPE) Approach To Drive Team Excellence In The Plant And In The Office (Value Streams Based) We Manage The Flowdown, The Monitoring And The Management Of Company s Objectives Through The Goal Deployment Process (GDP) We Must Have A Premier Health & Safety Culture To Yield Premier H&S Results Our Quality System: AS-9100 Continuous Improvement, Team Excellence, & Culture of Quality Driving Toward Premier 22

Textron Six Sigma/Lean at Mirabel Launched In 2002 By Textron To Develop Talented People And Improve Business Results Using Proven Methodologies And Tools To Reduce Process Variability (DMAIC), Eliminate Waste (LEAN), And Innovate (DFSS) More Than 225 Employees Trained as Green & Black Belts More Than 300 Process Improvement Projects Completed Continuous Process Improvement Driving Mirabel & Bell to Premier in Vertical Lift 23

Group Performance Excellence Lean Processes & Tools Team meetings Lean Tools Six Sigma Structure & Contributions Management Philosophy Results driven Shared Leadership Preferred place to work GO Process IPT s Functional Core Teams Leaderships Teams Communication Board Four levels of progression Gold Silver Bronze Qualification Simple, Structured Approach Enabling Team Self- Management and Decision-Making for Business Results 24

Mirabel s Operating Principles (2) We Measure Our Progress Towards Lean Excellence Through The Textron Business System Assessment. 2006 Objective: Bronze We Support Our Product Development With Qualified Delegated Engineers And A Strong Delegated Approval Organization (DAO) We Attract And Retain The Best Resources By Always Aiming To Be An Employer Of Choice (Training; Integration; Career Management; Compensation) We Believe Multi-Skilling Is A Strategic Strength We Have Collaborative Relations With Our Employees Through The Consultative Teams Process Strong, Flexible Workforce & Lean Processes Enable Our Path to Premier 25

The Canadian Advantage Federal: Technology Partnership Canada (TPC) - $115M for Model 429 and MAPL Export Development Corporation Canadian Commercial Corporation Canadian Embassies and High Commissions Provincial: Investissement Quebec - $115M for Model 429 and MAPL Support to Recruiting and Training - $3.5M Cdn Research Consortium Trade Missions Significant Advantages to Canadian Production 27

The Canadian Advantage Montreal Metro: Approx. 50,000 Aerospace Workers 5 Universities Trade Schools & Colleges Greater Montreal Aerospace Cluster:» OEM s» Tier 2 & 3 Suppliers» Associations» Education And Research Montreal Metro Area is Hub of Aerospace Industry 28

Mirabel s Growth Plan & Challenges Employment Facilities Expansion Deliveries Growing Talent and Production Capacity to Increase Aircraft Deliveries 30

Employment Overview 2006 Overall Employment Up ~200 65% Direct Labor, 35% Indirect Skill-based Compensation (Pay for Knowledge) Encourages Multi-Skilled Workforce Flexibility on Shop Floor Team Environment Talent Recruitment Enabling Future Production Growth 31

Facilities Expansion ENGINEERING EXTENSION 15,000 sq. ft. ft. 130 People April 2006 CAFETERIA EXTENSION 5,200 sq. ft. ft. 240 Additionnal seats December 2006 FREEZER EXTENSION 3,200 sq. ft. ft. 2007 MAINTENANCE & TOOLING EXTENSION 7,000 sq. ft. ft. October 2006 NEW HANGAR 36,500 sq. ft. ft. 14 14 A/C July 2006 Investing For Growth, Expanding Capacity 32

Mirabel Manufacturing Overview 33

Mirabel s Commercial Deliveries 300 250 200 2010 Forecast Range Units 150 100 50 0 2004 2006 2007 2010 *Future Delivery Quantities Include ARH Units Built at Mirabel Building Capacity to Meet Demand 34

Bell Helicopter Mirabel Operations Supporting Bell s Journey to Premier Strong Commercial Aircraft Business Supporting Bell s Journey to Become the Premier Vertical-Lift Aircraft Manufacturer Through Focus On: Textron Six Sigma & Continuous Improvement Development of Our Skilled, Flexible Workforce Team-Driven Culture of Excellence The Canadian Advantage Expanding Capacity for Aircraft Deliveries Mission: To Become the World s Premier Vertical-Lift Aircraft Company 35

Questions? 36

Forward-looking Information Certain statements in this report and other oral and written statements made by Textron from time to time are 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 following: [a] changes in worldwide economic and political conditions that impact interest and foreign exchange rates; [b] the interruption of production at Textron facilities or Textron s customers or suppliers; [c] Textron's ability to perform as anticipated and to control costs under contracts with the U.S. Government; [d] the U.S. Government's ability to unilaterally modify or terminate its contracts with Textron for the Government's convenience or for Textron's failure to perform, to change applicable procurement and accounting policies, and, under certain circumstances, to suspend or debar Textron as a contractor eligible to receive future contract awards; [e] changes in national or international funding priorities and government policies on the export and import of military and commercial products; [f] the adequacy of cost estimates for various customer care programs including servicing warranties; [g] the ability to control costs and successful implementation of various cost reduction programs; [h] the timing of certifications of new aircraft products; [i] the occurrence of slowdowns or downturns in customer markets in which Textron products are sold or supplied or where Textron Financial offers financing; [j] changes in aircraft delivery schedules or cancellation of orders; [k] the impact of changes in tax legislation; [l] the extent to which Textron is able to pass raw material price increases through to customers or offset such price increases by reducing other costs; [m] Textron s ability to offset, through cost reductions, pricing pressure brought by original equipment manufacturer customers; [n] Textron's ability to realize full value of receivables and investments in securities; [o] the availability and cost of insurance; [p] increases in pension expenses related to lower than expected asset performance or changes in discount rates; [q] Textron Financial s ability to maintain portfolio credit quality; [r] Textron Financial s access to debt financing at competitive rates; [s] uncertainty in estimating contingent liabilities and establishing reserves to address such contingencies; [t] performance of acquisitions; [u] the efficacy of research and development investments to develop new products; [v] bankruptcy or other financial problems at major suppliers or customers that could cause disruptions in Textron s supply chain or difficulty in collecting amounts owed by such customers; and [w] Textron s ability to execute planned dispositions. 37

Growing Opportunity Analyst Briefing November 30, 2006 Thank You 38

Growing Opportunity. Jacques St-Laurent. President Bell Helicopter Textron Canada LTD. Analyst Briefing November 30, 2006