2. Forward-Looking Information
Certain statements in this package 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 forwardlooking statements are subject to risks and uncertainties that may
cause actual results to differ materially from those contained in the
statements, including our ability to complete the acquisition of Beech
and the risks and uncertainties set forth under "Forward-Looking
Information" in our third quarter 2013 earnings release and in the
Current Report on Form 8-K to be filed in connection with the
acquisition. Additional information on risks and uncertainties that may
impact forward-looking statements is discussed under "Risk Factors" in
our most recent Annual Report on Form 10-K and our Quarterly Reports
on Form 10-Q.
2
3. Transaction Overview
• Textron Acquiring Beech Holdings Equity for
~$1.4 Billion
– Majority of Beech voting equity have approved
the transaction.
– Closing expected 1H of 2014,
subject to customary regulatory approvals, etc.
– Accretive to EPS in year 2
• Financed with debt and available cash
– Up to $1.1B of new debt including
5-year pre-payable bank loan
– Balance in available cash
– Expect to maintain debt ratings (BBB-/Baa3)
3
4. Excellent Strategic & Operational Fit
• Product line extension – expands range of missions
– Iconic King Air line complements Caravan and Citation
products
– No jet product overlaps, as Beech previously
discontinued its jet manufacturing business
• Stable and predictable service and support
business
– Provides steady flow of profits and cash through
cycles
• Synergies
– Operational and marketing synergies
4
5. Estimated 2013 Revenues: ~$1.8B
Defense Applications
Global Customer Support
Beechcraft Defense Company
~53% of 2013E Revenues
Commercial
Applications
Business & General Aviation
~31% of 2013E Revenues
~16% of 2013E Revenues
Products
• Turboprops
- King Air 350i,250,C90
• Pistons
- Baron
- Bonanza
• Special Mission
- King Air 350ER (Air Ambulance, VIP
transport)
Products
Hawker Beechcraft Parts & Distribution
• Aircraft spare parts distribution
• Over 90 authorized service centers
worldwide
Hawker Beechcraft Services
• Factory-owned service centers that
perform MRO, retrofit and upgrades
• T-6 modification
Special Mission Applications
Global Mission Support
Global Defense Applications
• Aerial survey
• Parts, service, support and modification
for special mission, government and
military aircraft programs
• Military training aircraft to US and foreign
governments
• Flight inspection
• Border and fisheries security
• Intelligence, Surveillance and
Reconnaissance (“ISR”)
• Active in King Air, T-6 and AT-6 markets
• T-6
• AT-6
• Program sustainment
• Light attack aircraft to US and foreign
governments
• Training
• Law enforcement (Baron ISR)
~35,500 Aircraft in Service
5
6. Synergies
• G&A
• Manufacturing
• Incremental Citation jet sales
opportunities - Over 35,000 new
customers now part of the Cessna family
Estimated Annualized 2014 Synergy: ~$65 Million*
2 – 3 Year Synergy Opportunity: $75 - $85+ Million
* Before restructuring & deal costs
6
7. Valuation
$ millions
Equity Value
Net Debt(1)
Pension(2)
Enterprise Value
Estimated 2013 EBITDA
$1,376
$
$
(3)
25
80
1,481
150
$
65
215
(4)
First-Year Annualized Synergies
EBITDA, after Synergies
EBITDA Multiple
6.9X
(1) Estimated year-end 2013 net debt. Additional debt for working capital expected
at closing.
(2) Estimated after-tax pension liability.
(3) Before fresh start accounting and other impacts related to the reorganization of
the business.
(4) Before restructuring costs.
7
8. Estimated Pro Forma Debt
$ millions
2012A 2013E
Textron Manufacturing Debt
Acquistion Debt
Textron Net Unfunded Pension Liability - pre tax
Acquisition Net Unfunded Pension Liability - pre tax
Total Manufacturing Debt Including Unfunded
Pension Liability
$2,301 $1,935
-
1,100
1,338
190
-
125
$3,639 $3,350
2013 Estimated Pro Forma Debt Lower
8
9. Summary
• Acquiring Beechcraft for $1.4B
• Reasonable valuation given growth and synergy
prospects
• Based on conservative base line forecast
• Excellent strategic and operational fit
– Stable and reliable service and support business
– Product line extension – expands range of
missions
– Operational, sales and marketing synergies
• Financial and balance sheet capacity to
support transaction
9
