GEAviation

2

Aviation

• Winning technology

• Deep domain knowledge

• Growing commercial installed base

– 1,747-a) deliveries in ’06

– ~2,100-b) deliveries in ‘07

• $40B commercial & military CSA backlog

• Strong track record of organic & inorganic growth

20%

17%

1H’06 1H’07

Revenue

SegmentProfit

$1.4

$1.6

$6.3

$7.6

Great business model

(a- 1,055 ‘06 deliveries CFM, 692 ‘06 deliveries GE(b- ~1,220 ‘07 deliveries CFM, ~830 ‘07 deliveries GE, ~12 ’07 deliveries EA

CFM is a 50/50 joint company between GE and SnecmaEA is a 50/50 joint company between GE and Pratt & Whitney

Business imperatives

($ in billions)

14%

14%

Ex Smiths

3

0 – 10%10 - 20%20 - 30%

China16%

Americas 5.0%

Europe 4.9%

Asia 4.5%(w/o India & China)

MEA18%

India20%

Industry strength continues

1H’07 revenue passenger mileage growth

4

Expanded Aviation portfolio

$3.8 $5.9 $3.5

(a- Includes GE’s 50% of CFMCFM is a 50/50 joint company between GE and Snecma

(b- Systems & Unison Engine Components on Smiths ’06 fiscal calendar

$0.8

Digital Systems Electrical Power Mechanical SystemsUnison Engine Components

$0.2 $0.8 $0.6

A leading aviation technology business

Commercial Engines

Commercial EngineServices

Military Engines & Services

’06 Rev

’06 Rev

–a)–b)

–b)

($ in billions)

Systems

5

Common core computing

Common core – remotedata concentrators

Leading/trailing edge actuators

Landing gear actuation &controls / brake monitoring

Nose gear steering controls

Flight deck interface /flight voice recorder

Flight datarecorder

GEnx

GE + Smiths – B787

Expanding capability “beyond the engine”

Smiths

• Innovative systems & engine components supplier

• Commercial, business & military segments

• Great technology & products

• Well-positioned for growth

GE

• Leading technology products

• Operational excellence

• Supply Chain management

• Project management

Synergy=+

• Top-line growth driven by B787, A380, B747-8 & JSF

• New channels & expanded services

• $300MM revenue & cost synergies by year 3

6

Walter Engines … small turbo-props

• 11+ Turbo-prop airframers outside US/W Europe

• 1,595 Walter engines in service … >30 a/c types

• 80%+ flying outside US/ W Europe

• Infusing GE technology to accelerate product development

• $100MM+ revenue in 5 years

DevelopedCountries

ROW

197

1,398

InstalledEngines

400 – 549 shp 550 – 799 shp 800 – 1.5k shp 2.3k – 2.8k shp > 2.8k shp

~100

~2,000

~3,400

~800~450

Total OEM Engine shipments ’07 – ’15

CurrentProducts

New products

7

Sikorsky CH-53K

Military … winning in a tough environment

• Global war on terror

• Aging equipment … operating &

maintenance cost up 2x in 10 yrs

• Must re-capitalize / modernize

• 3 to 5 year lead-time for

procurement funding

Environment

F110 (Turkey)

CH-53K (GE38)F414 (USN/Australia)

F136 (JSF)

�R&D benefits both commercial & military�Growing helicopter business … ~$1B annual revenue

8

Recent U.S. military funding $340MM

ADVENT(Advanced VersatileEngine Technology)

HEETE(Highly Efficient Embedded

Turbine Engine)

AATE(Advanced Affordable

Turbine Engine)

USAF

• $231MM demonstration focused on Var Cycle Tech

• Major advance in evolution

• of propulsion…Adaptive Cycle Engine (2012)

• Multi-mission flexibility & efficient supersonic flight

• $16MM Compressor Rig Test

• Next Gen compression system

• Lighter, smaller core

• Less fan/booster & LPT stages

• Cooled air for rear stage disks

• $93MM 4 Year Demonstrator Program

• Targeted for attack & utility helicopters

• 67% increase in Power SHP

• 25% improved fuel burn

• Potential SDD program in 2012

9

14,600

8,2004,300

21,900

4,600

12,600

Commercial engines Commercial installed base

Commercial outlook … strong

EA‘96 ‘06 ‘16F

GE

CFM

Fleet in active commercial serviceSource: ACAS, GE internal studies

GP7000 developed by GE/P&W Engine AllianceCFM is a 50/50 joint company between GE and Snecma

• Best-selling on regionals … 800 engine backlog

• Best-selling on single-aisle … 4,500engine backlog

• Best-selling on Boeing 787 … 630engine backlog

• Best-selling on wide-bodies … 2,250engine backlog

10

0

5

10

15

20

25

'07 '08 '09 '10 '11 '12 '13 '14 '15 '16

Materials stream … fueled by departures

CFM International is a 50/50 joint company between GE and Snecma

Annual departures* (MM)

Source: ACAS data and GE analysis

21% V

20% V

42% V

40% V

11

Growing service business

40+ Years

Parts and Services

7X

Design and testNew

engines

0

GE90

CF6

CF34

CFM

GEnx

GP7000

Key initiatives

• Delivering customer value- $39B commercial service agreement backlog

• Technology upgrades- Operating savings and improved residual value

• Build out diagnostics- Unique operational knowledge

• Reducing cost of ownership- More repair and used material

Engine lifecycle revenue

Average fleet age 8 years

12

Tech investment … family additions

*GP7000 developed by GE/P&W Engine Alliance**HF118 developed jointly by 50/50 JV between GE & Honda

Highest R&D commitment in history … $7B since 2000

’03 ’05 ’06

Total R&D

$0.9

$1.1

$1.2

($ in billions)

Boeing 777-300ER GE90-115B

Service ‘08

Service ’10

Service ’08

Boeing 787 GEnxAirbus A380 GP7200*

Service ’08

ARJ21 CF34-10

GE/Honda** HF120

747-8 GEnx

Service ’10Service ’10

Service ’09

13

GEnx … 950+ engine wins to-date

GEnx – powered 787 vs. previous generation

• 50% lower NOx* emissions

• 50% lower noise footprint**

• 20% fuel burn improvement

• > $1.3MM annual fuel savings*** per aircraft

Accepted in the market

GAP

*CAEP6 levels**Stage 3 noise requirements***Fuel @$2/gallon

14

• Fuel burn … ~20% better*

– Lightweight/composite structures

– Component technology

LEAP56TM is a trade mark of CFM, a 50/50 joint company between GE and Snecma

LEAP56TM … foundation for the future

•Maintenance cost … ~10% lower

– Lower parts count

– Longer life-limited parts

• Environment

– 60% lower emissions (NOx) than 2008 regulations

– 50% lower noise than current regulations

* Compared to CFM56 Tech Insertion (certified in 2007)

15

Aviation supply chain

GE’s plants Suppliers Partners

28 component shops

6 assembly and test sites

335 domestic

105 global

16

Strategic Investment Plan

TurbineAirfoils

Combustors

RotatingParts

Assembly& Test

Configs

Controls &Accessories

NacellesComposites

Structures

Partners

Need processcontrol

Strategic

Technology

Focused on turbine airfoils, rotating parts and composites

Spares/serviceOM opportunity

L H

H

Invest

Manage

Partners

Performance impact

17

Supply Chain … investment

Turbine airfoils

• Greenville plant

• Expanding … 3X

4.95.8

7.48.5

9.4

2006 2007 2008 2009 2010

Volume

(a - CFAN is a 50/50 joint company between GE and Snecma

Rotating parts

• West Jefferson

• Capital equipment

Composites

• Mississippi plant

• Operational ‘08

CFAN-a) expansion

• GE90/GEnx

• Blade volume … 10X

Investing ~$150MM+ annually

($ in billions)

18

Driving material efficiency

55

272

500

'05 '06 '07

Raw material focus

Nickel Titanium

Price($/lb)

Cost reduction… playing offense!!

'05 '06 '07

$78

$29

$9

Engineers appliedto cost reduction “Buy-to-Fly”

Cost reductionfunding ($MM)

From: 1 pc forging … 1878 lbs

To: 4 pc UEC welded rings … 1082 lbs

GE90-115B TCF

21

30 32

'05 '06 '07

7

11

17

'05 '06 '07

Price($/lb)

19

Lean

GE90 Assembly and Test

CFM56 Turbine Blade

3730

19

'05 '06 '07 YTD

Cycle Time (days)

• Material kitting

• Standard blocks of work

• Automated test setup

• Single piece flow lines

• Quick change tooling

• Robotics

42

29

'06 '07 YTD

Cycle Time (days)

20

Aviation summary

�Continuing to introduce new high technology products

– Improved fuel burn

– Lower maintenance cost

– Environmentally friendly

�Systems and engines for next generation wide and narrow bodies

�GE active in ~80% of $66B military funding activities (’07-’16) … continue capturing commercial benefits

�Develop adjacencies … integrate Smiths … Walter

Great business model

GEInfrastructure