Material Specifications and the

Associated Quality Control of Materials

for the Aerospace Industry October, 2016

2

2016: A new beginning

One Company, Stronger Together 1 January 2016: we absorbed the activities of AgustaWestland, Alenia Aermacchi, Selex ES, OTO Melara and WASS into One Company, while maintaining Parent Company and Corporate Centre functions for DRS Technologies, MBDA, Telespazio, Thales Alenia Space, and ATR.

Finmeccanica is now Leonardo

28 April 2016: our name changed to Leonardo, inspired by Leonardo da Vinci, a universally recognised symbol of

creativity and innovation. Leonardo represents the ideal bridge between historical legacy and our future in the high-

tech industrial sectors.

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Our Business

Leonardo is a global high-tech company and one of the key actors in Aerospace, Defence and

Security worldwide.

HELICOPTERS SPACE

Helicopters

Aircraft

Security & Information Systems

Aerostructures

Airborne & Space Systems

Land & Naval Defence Electronics

Defence Systems

DIVISIONS

SUBSIDIARIES AND JOINT VENTURES

DRS Technologies (100% Leonardo)

Telespazio (67% Leonardo and 33% Thales)

Thales Alenia Space (67% Thales and 33% Leonardo)

MBDA (37.5% BAE Systems, 37.5% Airbus Group, 25%

Leonardo)

ATR (50% Leonardo and 50% Airbus Group)

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KEY FIGURES 2015

Group Results Full Year 2015 (in €bln.)

RESULTS 2015 in €mln.

Revenues 12,995

New Orders 12,371

Order Backlog 28,793

R&D 1,426

The subdivision by sectors reflects the Company’s organisation in 2015.

34% HELICOPTERS

41% DEFENCE AND SECURITY ELECTRONICS

24% AERONAUTICS

4% DEFENCE SYSTEMS

-5% ELIMINATIONS

2% OTHER ACTIVITIES

41% HELICOPTERS

36% DEFENCE AND SECURITY ELECTRONICS

21% AERONAUTICS

4% DEFENCE SYSTEMS

-3% ELIMINATIONS

1% OTHER ACTIVITIES

32% HELICOPTERS

54% DEFENCE AND SECURITY ELECTRONICS

14% AERONAUTICS

6% DEFENCE SYSTEMS

-7% ELIMINATIONS

1% OTHER ACTIVITIES

50.0% INSTITUTIONAL INVESTORS

30.2% ITALIAN MINISTRY OF ECONOMY AND FINANCE

19.8% RETAIL INVESTORS (ITALY ONLY)

TOTAL SHAREHOLDER COMPOSITION

ORDER BACKLOG NEW ORDERS REVENUES

13.0 28.8 12.4

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Global Presence

We have a strong industrial presence in four markets: Italy, UK, USA and Poland. We operate globally in more than 15

countries and our products, systems, and solutions are operative in ca. 150 nations.

Leonardo employs 47,156 people.

Does not include JVs workforce data

IT

UK

USA

PL

29,853

7,321

5,969

3,043

Rest of the World 970

The figure refers to employees as of 31.12.2015

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Key Technologies and Capabilities

SOFTWARE

Embedded, Middleware, Cyber, Application Layer

MATERIALS

Metal, Ceramic, Composite, Coating

ELECTRONICS

Microelectronics, RF/IF, Power Electronics, Digital HW

OPTRONICS

Passive, Active

MECHANICS

Precision Mechanics, Thermal Management, Mechatronics

MODELLING & SIMULATION

Integrated Test Bed, Virtual Environments and Tools

COMPLEX SYSTEM DESIGN

Design, development and integration of complex systems

UNMANNED SYSTEMS

Artificial Intelligence, Cognitive Sensing, Autonomous Decision Software

ICT & CYBERSECURITY

Big Data and Analytics, Application Developments, Threat Intelligence, Secure Infrastructure,

Protection Services

Leonardo invests 11% of revenues in Research & Development and has ongoing research projects with Italian and

European universities and research centres.

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AW609 Air Vehicle Testing Overview

2 flying prototypes

accumulated > 1,300 FH

AC3 – Philadelphia

AC1 – Cascina Costa

AC4 – Philadelphia

LHD Proprietary/Confidential Information

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MTOW: 18,000lbs class/8,000kg

Useful Load: up to 6,300lbs/2,860kg

Engines: 2 x PT6C-67A

Accommodation: 2 pilots and up to 9 pax

Max cruise TAS: 275 kts

HOGE ISA 6,000 ft

HIGE ISA 10,000 ft

Ceiling 25,000 ft

Max Range 750nm (ca. 1000nm with aux fuel tanks)

T/O Power (30 min) 1,940 shp

Fuel Load (Std) 2,571 lbs

AW609 TILTROTOR – KEY FEATURES

LHD Proprietary/Confidential Information

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The AW609 TiltRotor

The Operating Flight Envelope Advantage

Airspeed

(Ktas)

Alt

itu

de

(ft)

Typical

Helicopter Altitude: 10,000 ft

Speed: 140 kts

Range: 360 nm

AW609 Tilt

Rotor Altitude: 25,000 ft

Speed: 275 kts

Range: 750 nm

(std tank)

Pressurised cabin

Full Icing

LHD Proprietary/Confidential Information

11

AW609 TILTROTOR – SIZE COMPARISON

18

.29

m

14.1 m

5.1

m

6.6

m

AW139 D-Value: 16.66m AW609 D-Value: 18.29m

AgustaWestland Proprietary/Confidential Information

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ECCN 9E991 AW609-PE-0017-PP13 Apr 2016

STANDARD FUEL

Estimated performance data – subject to change.

+ AUXILIARY FUEL

EUROPE (LONDON, PARIS, AMSTERDAM, BRUSSELS)

LHD Proprietary/Confidential Information

13

Aerospace Market

a model with an high level of regulation

Functional safety relates to a part of the general safety of a system or a

piece of equipment. It implies that the system or equipment can be

operated properly and without causing any danger, risk, damage or

injury.

Functional safety is crucial in the aerospace industry.

In this respect, supervisory bodies, regulate the aerospace market with

strict certification standards to meet highest possible level of safety.

AS9100 in US and EN 9100 in Europe are an example of certification

standard in the aerospace market.

In addition to that a type design has to be certified to enter in the market.

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Aerospace Example of Certification Body

The Federal Aviation Administration (FAA) is the national aviation authority of the United

States, with powers to regulate all the aspects of American civil aviation. These include

the construction and operation of airports, the management of air traffic, the certification

of personnel and aircraft, and the protection of US assets during the launch or reentry of

commercial space vehicles FDA in medical market

The European Aviation Safety Agency (EASA) is an agency of the European Union (EU)

with regulatory and executive tasks in the field of civilian aviation safety. Based

in Cologne, Germany, the EASA was created on 15 July 2003, and it reached full

functionality in 2008, taking over functions of the Joint Aviation

Authorities (JAA). European Free Trade Association (EFTA) countries have been granted

participation in the agency.

(*) Public domain definition

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Main Regulation

How it works:

• Certifying staff

• Maintenance organisation approval

• Continuing airworthiness

• Training organisation requirements

• Design organisation approval

• Production organisation approval

(*) Public domain definition

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AS9100 Detail

SIGNIFICANCE OF AS 9100?

AS9100 was published by SAE – Society for Automotive Engineers in

1999. AS9100 resulted from cooperation between major aerospace

corporations – American Aerospace Quality Group (AAQG)

Major manufacturers in the aircraft and aerospace industry identified

quality suppliers as a valuable link in the supply chain. Instead of

writing their own quality management system standard, the

manufacturers chose to build off the well-known ISO 9001:2000

incorporating sector specific supplier requirement.

Importance of the supply chain

in a complex environment

where increase the

outsourching

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Regulation MAIN BENEFITS OF AS 9100

• The AS9100 standard provides guidance for managing variation when a "key

characteristic" is identified. Keys are features of a material, process or part in

which the variation has a significant influence on product fit, performance,

service life or manufacturability. Critical characteristic is a subset of key

characteristic that can affect safety if not respected.

• Planning product realization is essential for effective and efficient processes

and standard includes extensive supplementation in design-and-development

functions.

• Managing suppliers throughout the aerospace supply chain remains a major

challenge for the industry.

Manufacturing control of materials and processes is a basic step to control

the overall process that has to be clear for the beginning reinforcing the

concept of quality by design.

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Quality by Design The QbD is a systemic approach to aerosapce development. It means

designing and developing specification and manufacturing processes to

ensure predefined product quality. Some of the QbD elements include:

• Defining target product quality profile

• Designing product and manufacturing processes

• Identifying critical quality attributes, process parameters, and sources

of variability

• Controlling manufacturing processes to produce consistent quality over

time One of the aspect that have to be considered are the statistical

approach in a world where not always you have consumer volumes

Control of material, processes and supplier

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Material Specification

Include but is not limited to:

Material requirements and their test methods

Qualification procedures and requirements

Quality control

Qualified production equipment and facilities

Qualified processes

Qualified test facilities

Qualified products – QPL (Qualified Products List and their suppliers)

Audits of production and testing (ongoing)

Batch test requirements for supplier– labeling, packaging, storage,

packaging, documentation (including certification), shipping, etc.

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Composite Material

Building block approach (MIL-HDBK-17, Rev. F, Volume 3,

Chapter 4) FAA guideline

Material specifications are used to define the material’s

attributes, and to define the qualification characterization

tests.

Materials used within the building block tests are purchased in

accordance with a material specification.

Process specifications define and control the processes used

for the conversion of materials into structural parts finite

product

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Composite Material Qualification tests are planned and conducted to establish key material

attributes, establish material performance properties, and verify that

material characteristics will work in the intended application.

Create a statistical basis for requirements used in subsequent material

quality assurance

The objective in defining material attributes is to establish the material

property limits. Examples of attributes in which limits are set include:

• Resin content

• Fiber areal weight

• Cured per ply thickness

• Fiber volume

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Material Requirements

Requirements for qualification and requirements for batch

acceptance

*** Note: The batch acceptance requirements are usually a subset of

the qualification requirements addressing key properties

Material qualification requirements and their test

methods (to verify a level of reproducibilty)

Appearance, form and physical properties

Mechanical, chemical and physical properties

Any other key properties

Material batch certification requirements and their test

methods (to verify a level of control/consistancy)

Appearance, form and physical properties

Mechanical, chemical and physical properties

Any other key properties

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Material Specification Summary Scope

2. Applicable Documents

3. Technical Requirements

3.1 Definitions

3.2 Material Requirements

3.3 General Prepreg Requirements

3.4 Uncured Prepreg Requirements

3.5 Cured Prepreg Requirements

3.6 Material Characterization

4. Quality Assurance

4.1 Changes to Qualified Materials

4.2 Supplier Site Qualification

4.3 Statistical Process Control

4.4 Product Certification

4.4.1 Supplier Certification Testing

4.4.2 Purchaser Testing

4.5 Test Methods

4.6 Test Panel Fabrication

5. Preparation for Delivery

5.1 Material Identification

5.2 Interleaf

5.3 Packaging

5.4 Shipping

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Material Specification Summary The material specification is part of the legal contract between Purchaser and a raw material Supplier

Example of key parameters for composite:

Prepreg Physical Properties Resin Content *

Areal Weight *

Volatiles *

Flow

Gel Time

Prepreg Chemical Properties

Resin Components (IR) *

Chemical Structure (HPLC)

Laminate Physical PropertiesPer Ply Thickness *

Fiber Volume

Porosity

Laminate Mechanical PropertiesTension, ultimate strength, and modulus *

Compression, ultimate strength and modulus *

Open Hole Compression strength

Open Hole Tension strength

Compression After Impact *

Shear modulus after fluid exposures

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Material Specification Summary 1) Define test parameter

2) Select a subset of test to be performed per acceptance based on

key characteristics and most critical properties to monitor

3) Both the Supplier and the Purchaser perform testing

Purchaser testing:

(1) Verifies Supplier test results

(2) Ensures that material has not changed during shipping

Time/temperature sensitive materials shipped with temperature

recorders

Moving toward the Supplier performing all acceptance testing

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Process Specification Summary

1 Scope

2 Classification

3 References

4 Contents

5 Materials Control

6 Facilities Control

7 Definitions

8 Manufacturing Control

9 Maintenance Control

10 Quality Control

11 Requirements

12 Test Methods

13 Qualification

1. Defines storage requirements & storage life,

revalidation requirements, handling & mechanical

life

2. Facilities ControlControlled contamination

environment requirements and restrictions

3. Controls autoclaves, ovens, equipment

4. The method to demonstrate compliance with FAA

requirements

5. Facility Survey –Review of equipment, QA system,

materials/parts control, and inspection capabilities

to ensure that the facility can produce acceptable

parts

6. Process Capability Tests –Processor demonstrates

ability to build panels and perform mechanical

tests, showing their process can meet the

requirements

7. Using control charts and capability indices to

monitor process stability and conformance

8. Personnel Certification –A means of formal control

for designated operations or activities

9. NDI Certification

10. Repair Certification

11. Pre production validatio

12. First Qualification

13. First Article Reprot

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Qualification Procedures Includes but is not limited to:

Qualification procedure for the supplier –

What batch data (e.g. process parameter readings) needs to

be recorded and/or reported and how

What constitutes an individual batch, how many batches, are

to be tested, what batch tests to perform and how many

specimens per test/batch

Sampling plan

Audit of the production and testing of the qualification

materials

Audit of the record keeping (e.g. certifications of raw

materials, calibration of production equipment and process

parameter instrumentation, test equipment, testing. etc.)

Establish qualified production facilities and processes -

establish and maintain PCDs (process control documents) for

key process parameters

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Quality Control

Quality control – Batch certification and batch

acceptance

What tests are required for certification (supplier) and

receiving testing (purchaser) of each batch with the number

of specimens and sampling plan

Required data and information for the certification and their

format

Quality control – Audits

Audits of production and testing equipment and facilities

(ongoing)

Audits of record keeping of:

Raw materials, batch processes and batch data

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Supply and Receipt of Material

Supply (supplier)

Labeling

o Lot or Batch number, sub lot # [e.g. ro;ll #], date of manufacture,

PO #, Specification including Type, Class, Grade and/or Form

Packaging

Storage until shipping

Documentation (including certification of test results)

Shipping method and conditions (e.g. temperature)

etc.

Receiving (purchaser)

Confirm qualified product and supplier. shipping method,

labeling, packaging, condition, documentation (including

certification), etc.

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Supplier Approval

1) The assessment

of a Supplier’s

Aerospace Quality

Management

Systems is to ensure

that procured

articles/services are

supplied in

accordance with

contractual

requirements.

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Supplier surveillance

The purpose of the supplier

surveillance is to define the

activities and responsibilities

related to

the surveillance process for

approved aerospace

suppliers to ensure that

procured articles services

are continually supplied in

accordance

with contractual

requirements.

All approved aerospace

suppliers shall be subject to

surveillance and revalidation

by Supplier Quality

Assurance.

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Key topics and correspondences

•Raw material type, composition, key

characteristic

•Material specification to procure material

•Process Specification to control production

processes

•Material and processes control and key

characteristic monitoring

• Supplier qualification and surveillance

Procurement Commitment

Audit & Control

THANK YOU FOR YOUR ATTENTION