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Textron Inc. at Gabelli & Company Annual Aircraft Supplier Conference
- 1. 19th Gabelli and Company Annual Aircraft Supplier Conference Doug Wilburne VP, Investor Relations November 19, 2013
- 2. 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
- 3. Textron Leading Branded Businesses Textron Systems Bell 14% 35% Bell Helicopter Weapons & Sensors Unmanned Aircraft Systems Land & Marine Cessna 25% Cessna Aircraft Industrial Finance 24% 2% E-Z-GO Textron Financial Greenlee Jacobsen Kautex Defense & Aviation Mission Support 2012 Revenue: $12.2B; Up 9% 3
- 4. Scorpion ISR/Strike • New Hybrid ISR/Strike aircraft announced at AFA Conference in September • Designed for air defense, irregular warfare, border patrol, maritime surveillance, emergency relief, and counternarcotics mission sets • Built by leveraging commercial best practice • Target operating cost under $3,000/hr • First Flight expected by end of year Redefines Affordability for Domestic and International Military Customers 4
- 5. Cessna $3.1 Billion (2012 Revenue) 75% Aircraft Sales 25% Aftermarket Sustaining a leadership position through customer satisfaction, new products and services 5
- 6. Customer Service and Support Service center global expansion $793 $727 $667 Aircraft modernization $562 • $502 22 mobile service units worldwide $443 • $381 International parts distribution $354 • 25% $587 Most recent additions in Singapore, UK, Zurich, and Dusseldorf $721 • Aftermarket Sales 15 locations throughout 8 countries $666 • $606 • 01 02 03 04 05 06 07 08 09 10 11 12 Expanding our footprint and growing organically 6
- 7. Six New Products Planned to Ship in ’13 and ‘14 New Citation Sovereign Turbo Skylane JT-A Citation M2 Cessna TTx Investing for Growth New Citation X Grand Caravan EX
- 8. Citation M2 • State of the art cockpit • Garmin G3000 • Large cabin • Six passengers • Aft lav • Clarity cabin connectivity • Speed – 400 knots • 60 knots faster than Mustang • 10 knots faster than Phenom 100 Expected EIS 2013 • Excellent climb performance • 37% faster than Phenom 100 • Range - 1,300nm • Outstanding value - $4.4M • Invigorates space between Mustang and CJ2
- 9. Citation Latitude • State of the art cockpit • Garmin G5000 • Largest Citation cabin • 72” height • Flat floor • Clarity cabin connectivity Expected EIS 2015 • Speed – 440 knots • Outstanding short field performance – 4,000 ft • Range – 2,500 nautical miles • Industry’s best cabin value - $15.4M ⃰ • Redefines space between XLS+ and Sovereign • NetJets purchase agreement – up to 150 units * Subject to price escalation at first delivery date
- 10. Citation Longitude • State of the art cockpit • Garmin G5000 • Largest Citation cabin • 72” height • Flat floor • Clarity cabin connectivity Expected EIS 2017 • Powered by two Snecma Silvercrest engines • Max speed – Mach 0.86 • Range – 4,000 nautical miles • Intercontinental • Industry’s best value for range - $25.999M ⃰ * Subject to price escalation at first delivery date
- 11. Global Jet Deliveries FY 2010: 429 units EMB 29% BOM 7% GS 6% FY 2011: 382 units GS EMB 5% 22% Cessna 41% BOM 11% HBC 17% FY 2012: 340 units EMB 23% BOM 11% Source: GAMA GS 3% Cessna 53% HBC 9% HBC 14% Cessna 48%
- 12. Marketing Vision • Strategic marketing approach • Better customer understanding • “Co-creation” with our customers • Identify and locate new customers • Innovative engagement • Beyond aviation • Real-time social interaction • Two-way dialogue 12
- 13. Industrial $2.9 Billion (2012 Revenue) Kautex Greenlee $1,842 million $398 million E-Z-GO & Jacobsen $660 million Focused on new products, cost productivity and geographic expansion 13
- 14. Industrial New Products ECLIPSE2 walking green mower TrueSet™ Cutting Unit Component Integration on Next Generation Fuel System SPEED PUNCH™ System with patent-pending SPEED LOCK Bad Boy Buggies Recoil iS New products drive growth and profitability 14
- 15. Textron Systems $1.7Billion (2012 Revenue) 40% Unmanned Aircraft Systems Unmanned Systems Command & Control Technologies Marine & Land Systems 26% Tactical Wheeled Vehicles Marine 18% Mission Support Aircraft Engines Training & Test Equipment Battlespace Awareness & Intelligence Software 16%Weapons & Sensors Air-toGround Weapons Unattended Ground Sensors Intelligent Networked Ground Systems Expand global presence and customer base worldwide 15
- 16. Textron Systems - International Revenues International Revenue $ Millions $600 $500 International % of Revenue 30% Reflecting SFW, land vehicles and UAS. $400 20% $300 $200 10% $100 $0 0% 2008 2009 2010 International Revenue 2011 2012 % International Growth in non-U.S. markets 16
- 17. Unmanned Aircraft Systems Unmanned Aircraft Systems – Shadow® M2 – Shadow – Aerosonde™ Command and Control Stations – One System® Ground Control Station (GCS) – One System Remote Video Terminal – Universal GCS – iCommand™ 17
- 18. Marine & Land Land • COMMANDO™ Family of Vehicles • Survivable Combat Tactical Vehicle™ Maritime • • • • Ship-to-Shore Connector Landing Craft, Air Cushion Motor Life Boat Common Unmanned Surface Vessel (CUSV) CUSV Canadian TAP-V Navy Ship-to-Shore Connector 18
- 19. Weapons & Sensors Protection Systems • Orion Thermal Protection Shield • Reentry Vehicles Advanced Weapons Sensor Fuzed Weapon (SFW) Area Attack • Sensor Fuzed Weapon • BattleHawk™ Loitering Munition • Guided CLean Area Weapons • CLean Area Weapon Area Denial • Spider • Scorpion Sensors • Unattended Ground Sensors • MicroObserver® Battlehawk™ 19
- 20. Bell Helicopter $4.3 Billion (2012 Revenues) Commercial ~$1.7 Billion; 40% 206L4 429 407 Huey II Military ~$2.6 Billion; 60% V-22 – Osprey AH-1Z - Viper OH-58D – Kiowa UH-1Y - Venom 412 Installed Base: 10,600 Installed Base: 2,500 Executing on Balanced Growth 20
- 21. Customer Service and Support Bell is the Industry standard for support #1 in Customer Support • 19 years in a row – ProPilot • 8 years in a row – AIN Largest support network • 116 approved customer service facilities in over 35 countries • Well positioned to support our customers wherever they operate Supporting installed base of 13,100 Strategically co-locating with Cessna Spares Accessories Completions Repair & Overhaul Training Academy Field Services Depot Maintenance Electronic Logbook #1 Ranked Global Customer Support 21
- 22. Bell 525 “Relentless” • New “Super Medium” category under development • Best‐in‐class payload range capability • Best‐in‐class cabin and cargo volumes coupled with flexible cabin layout options • Best‐in‐class crew visibility • First commercial helicopter with proven fly-by-wire flight controls 525 with ARC Horizon Cockpit System Speed Range MGW Useful Load Passengers 155 Knots 500+ NM 19,300+ Lbs 7,400+ Lbs up to 20 • First helicopter with Garmin G5000H avionics • Avionics, fly-by-wire and crew visibility comprise new “ARC Horizon” Cockpit System resulting in unparalleled overall situational awareness increasing safety margins
- 23. Bell Short Light Single (SLS) • Cost-competitive, entry level aircraft • Best‐in‐class awareness with fully integrated glass cockpit and superb exterior visibility • Flat cabin floor with 5 forward facing seats • Safety enhancing design features to reduce pilot workload, improve situational awareness, and deliver superior auto rotation capabilities • First flight target: 2014 Performance Targets Speed 125 knots Range 360 to 420 nm Useful Load 1,500 lbs Ceiling 11,000 ft > 4,400 Bell JetRangers in service today
- 24. H-1 Program Highlights • 117 aircraft delivered • 83 UH-1Y • 34 AH-1Z • Pursuing FMS opportunities • 84% logistics commonality • Exceptional performance intheater • AH-1Z – widest array of ordnance for any attack helicopter H-1 Contract Deliveries 40 20 0 25 24 25 27 29 2011 2012 2013 2014 2015 18 9 2009 2010 Versatile Capable, Rotorcraft 24
- 25. V-22 Program Highlights • Strong performance intheater – Iraq and Afghanistan – Air Force Special Operations • Over 185,000 total flight hours • Pursuing FMS opportunities – Israel plans announced • MYP II approved – 99 total aircraft: option for 23 additional units » 1 exercised to date V-22 Contract Deliveries 40 20 0 20 2009 26 2010 34 39 40 36 22 2011 2012 2013 2014 2015 • Expanding capabilities Strong Program Execution and Operational Performance 25
- 26. Bell V-280 Valor • Third Generation Tiltrotor • Army’s Joint Multi Role/Future Vertical Lift (FVL) Technology Demonstrator (JMR/TD) program – Awarded Technology Investment Agreement in October ’13 • First Flight Expected 2017 • Leading Aerospace Companies Comprise Team Mock-up on display at AUSA Conference • • • • Lockheed Martin – General Electric – Moog – GKN – Spirit – Speed - 280 KTAS Combat Range - 500-800nm Non-rotating, fixed engines Passengers – 4 crew + 11 troops – AGC Composites Unmatched Speed, Range, Payload, and Value
- 27. Finance Segment (2% of 2012 Textron Revenues) • Finance receivables @ 9/30/13: Total: $1.6B Captive: $1.4B Non-captive: $0.2B • Capital structure: 3.6 debt-to-equity leverage Supporting purchases of Textron-manufactured products 27
- 28. Summary • Strong brands, solid top-line growth outlook • Investing in new product development and innovation to support growth • Advance execution and operational performance • Focus on cash flow generation and improving profitability 28
- 29. Forward-Looking Information Certain statements in this presentation and other oral and written statements made by us from time to time are “forwardlooking 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 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 ability to control costs and successfully implement various costreduction 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; 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 we do business. 29