cessna aircraft analyst meeting at nbaa 2013

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NBAA ANALYST NBAA ANALYST PRESENTATION OCTOBER 23, 2013

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Page 1: Cessna Aircraft Analyst Meeting at NBAA 2013

NBAA ANALYSTNBAA ANALYST PRESENTATIONOCTOBER 23, 2013

Page 2: Cessna Aircraft Analyst Meeting at NBAA 2013

Forward looking statement

• Certain statements in today’s discussion will be forward-looking statements including those that discuss strategies goalsstatements, 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 arelooking 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 andfrom 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.

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Page 3: Cessna Aircraft Analyst Meeting at NBAA 2013

SCOTT ERNESTSCOTT ERNESTPRESIDENT & CEO

Page 4: Cessna Aircraft Analyst Meeting at NBAA 2013

Outline

• Current Jet Market & Economic Indicators

• Go To Market Strategy

• Product Line-up Innovation

• Supply Chain Productivity

• Strong, Talented Workforce

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Innovation Lives

Page 5: Cessna Aircraft Analyst Meeting at NBAA 2013

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Page 6: Cessna Aircraft Analyst Meeting at NBAA 2013

CURRENT JET MARKET &CURRENT JET MARKET & ECONOMIC INDICATORS

Page 7: Cessna Aircraft Analyst Meeting at NBAA 2013

Light and Mid Sales – All OEMs700 H1 Deliveries '13 vs '12

600 

700 

100

125

H1 Deliveries ‐ 13 vs  12

42%

500 

3

2013

2012

2012

25

50

75

53%

300 

400 

Light Jet

2013

0Midsize H1Light H1

200  Midsize Jet

100 

7

‐2006 2007 2008 2009 2010 2011 2012Source: Gama

Page 8: Cessna Aircraft Analyst Meeting at NBAA 2013

Economic/Environmental Indicators

• Interest ratesC t fit

• Consumer sentimentE i t i t• Corporate profits

• Global GDP• Aging aircraft

• Economic uncertainty• Jet deliveries• Used inventories• Aging aircraft • Used inventories

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Page 9: Cessna Aircraft Analyst Meeting at NBAA 2013

Competitive Landscape - 2012

Light-Medium Jets (340) SE Piston (785)

+5pp+1pp

CirrusPiper11% DiamondHawker

Bombardier11%

Embraer23%

Cessna34%

Beechcraft2%

32% Diamond16%

Other5%

Cessna 

Hawker Beechcraft 

9%

Gulfstream3%

Turboprop (361)

53%

+4pp

Beechcraft

Piper9%

Pilatus19% Quest

4%Socata10%

Cessna30%

23%10%Other5%

*excluding Svcs and LSA aircraft (Skycatcher)Source: GAMA, BCA Purchase Planning Guide, Cessna Marketing 9

vs. 2011

Page 10: Cessna Aircraft Analyst Meeting at NBAA 2013

Pre-owned Aircraft for Sale

17%

18%1,000

Citations Only

12%

11%

500

6%

0%02006 2007 2008 2009 2010 2011 2012 2013

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2006 2007 2008 2009 2010 2011 2012 2013

For Sale/Lease % of Fleet for SaleSource: AMSTAT

Page 11: Cessna Aircraft Analyst Meeting at NBAA 2013

Resale Value – Mid Segment

90%

100%

80%

Cessna XLS

60%

70%

50%

Lear 40

30%

40%

0 1 2 3 4 5 6 7 8

Hawker 750/800

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Age of AircraftSource: Vref

Page 12: Cessna Aircraft Analyst Meeting at NBAA 2013

GO TO MARKET STRATEGYGO TO MARKET STRATEGY

Page 13: Cessna Aircraft Analyst Meeting at NBAA 2013

Global Expansion Sales Team

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50% Sales Force increase in past 2 years

Page 14: Cessna Aircraft Analyst Meeting at NBAA 2013

Expanding Addressable Market

Existing CustomerExisting 

CustomerConcept CustomerConcept Customer

CompetitiveCustomerCompetitiveCustomer

GlobalEmergingGlobal

EmergingCustomerCustomer CustomerCustomer CustomerCustomer EmergingEmerging

Main Focus

Education ValueProposition

ExpandingReach

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Page 15: Cessna Aircraft Analyst Meeting at NBAA 2013

Jet Fleet Share by Select Countries and RegionsJet Fleet Share by Select Countries and RegionsJet Fleet Share by Select Countries and Regions

United United Kingdom:Kingdom:

3%3%

Other Other Europe: Europe: 4%4%

iiC d 3%C d 3% Eurozone: Eurozone: 9%9% Middle Middle 

East:East:2%2%

Asia:Asia:44%%United States: 60%United States: 60%

Canada: 3%Canada: 3%

Mexico: 4%Mexico: 4%

FLEET

Other Latin America Other Latin America 

Africa: 2%Africa: 2%Australia & Australia & 

New Zealand: New Zealand: 

Mexico: 4%Mexico: 4%

Brazil: 4%Brazil: 4%

T

& Caribbean: 4%& Caribbean: 4% 1%1%

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Jet fleet in % of total units as of June 30, 2013Source: JETNET iQ REPORT

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Page 16: Cessna Aircraft Analyst Meeting at NBAA 2013

GDP by Select Countries and Regions

UnitedUnitedUnited United KingdomKingdom Other Other 

EuropeEurope

C dC dEurozoneEurozone

Middle Middle EastEast

AsiaAsiaUnited StatesUnited States

CanadaCanada

MexicoMexico

GDP

Other Latin America Other Latin America 

AfricaAfrica

Australia &Australia &

MexicoMexico

BrazilBrazil

& Caribbean& CaribbeanAustralia & Australia & New ZealandNew Zealand

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GDP represented by area of circle – from CIA World Factbook data (2012)

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Page 17: Cessna Aircraft Analyst Meeting at NBAA 2013

Expansion into ChinaShijiazhuang

• 2 Caravans delivered in 3Q• Facility complete• Service

Shijiazhuang

ZhuhaiZhuhai

• License – 4Q• Sovereign discussions ongoing• Facility 40% completey % p• Service

Page 18: Cessna Aircraft Analyst Meeting at NBAA 2013

Better Service – Every Time

Speed – Right where you need usEfficiency – More places, more of the timeEfficiency More places, more of the time Expertise – Bring your Citation or CaravanLeading the Pack – 50 MSU’s with 10,000 Visits

E panded Ser icesExpanded Services – New STC Activity– Profitable and Growing– Strategic Differentiator

Page 19: Cessna Aircraft Analyst Meeting at NBAA 2013

Growing ServicesUnited States International

OrlandoS t

NewburghS A t i

ZurichD t

DusseldorfPSacramento

WichitaMilwaukee

San AntonioMesaGreensboro

DoncasterSingaporeParis

PragueValencia

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Page 20: Cessna Aircraft Analyst Meeting at NBAA 2013

PRODUCT LINE-UP INNOVATIONPRODUCT LINE UP INNOVATION

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New product strength

Grand Caravan EXGrand Caravan EXGlobal workhorse

Cessna TTxTrue pilot’s plane

Turbo Skylane JT-AGlobal game changer

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Page 22: Cessna Aircraft Analyst Meeting at NBAA 2013

New Product Strength

Citation SovereignCitation SovereignMost capable mid-sized

business jet

Citation M2Best value entry level y

business jet

Cit ti XCitation XWorld’s fastest civilian aircraft

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Page 23: Cessna Aircraft Analyst Meeting at NBAA 2013

The Innovation Continues

Citation LongitudeMost efficientMost efficient

intercontinental business jet

Citation LatitudeBest mid-sized cabin

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Page 24: Cessna Aircraft Analyst Meeting at NBAA 2013

Citation LatitudeFatigue TestingFatigue Testing

Fuselage Jig Tool

Main Cabin Door T/AElectric Door

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Wing Mate

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Scorpion – Textron AirLand

• ISR/Strike aircraft • 18 month innovation18 month innovation

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Page 26: Cessna Aircraft Analyst Meeting at NBAA 2013

SUPPLY CHAIN PRODUCTIVITYSUPPLY CHAIN PRODUCTIVITY

Page 27: Cessna Aircraft Analyst Meeting at NBAA 2013

Supply Chain Productivity

3000

3500125

Per Hour Labor Cost (Fully Burdened)

Output Hrs per Employee

2500

75

100

1500

2000

50

500

1000

25

002010 2011 2012 2013 (Est)

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Page 28: Cessna Aircraft Analyst Meeting at NBAA 2013

Fabrication Technology and Automation

Robotic routing

Universal skin drillUniversal skin drill and route

Extrusion milling

Hydro-forming y g

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Page 29: Cessna Aircraft Analyst Meeting at NBAA 2013

Cessna EHS, Employee EngagementMonthly Total Recordable Injury Rate

2.00

2.50

Monthly Total Recordable Injury Rate

1.00

1.50 ↓38%

0.00

0.50

ResultsContinuous Improvement

Process

Culture Safety Focus

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Page 30: Cessna Aircraft Analyst Meeting at NBAA 2013

STRONG, TALENTED WORKFORCESTRONG, TALENTED WORKFORCE

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Aircraft, People, Pride

• 8,000 employees worldwideT l t t d f ithi th• Talent promoted from within the company

• Experienced workforce

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Page 32: Cessna Aircraft Analyst Meeting at NBAA 2013

Talent Pipeline – 2013 Interns

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Summary

• Committed to Investment• Product Innovation• Product Innovation• Employee Engagement• Talent Development

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Page 34: Cessna Aircraft Analyst Meeting at NBAA 2013

Forward looking informationCertain 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 materiallypredictions 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 i th U S G t d f b d t i l di th l t d t ilit ti i f i t i bilit t fin 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 and of assets acquired upon foreclosure 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 ; g g y , g , p g p p ;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 orprograms; 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; increases in pension expenses or employee and retiree medical benefits; difficult conditions in the financial markets which may adversely impact our customers’ ability to fund or finance purchases of our products; and continued demand softness or volatility in the markets in which wecustomers ability to fund or finance purchases of our products; and continued demand softness or volatility in the markets in which we do business.

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