Obtaining the Maximum Benefit from a Business Aircraft

Sale or Acquisition

NBAA Annual Meeting and Convention

October 22, 2014

Obtaining the Maximum Benefit from a Business Aircraft

Sale or Acquisition

Brad Stancil Executive Vice President

Holstein Aviation, Inc.

Business Aircraft Operation

WHY? Competitive advantage

Increase efficiency

Grow revenue and profit

Business Aircraft Operators

Versus non-users ROE Gross revenue

ROA Net profit

Sales per employee Retained earnings

20,000 BizJets Worldwide

50% small biz 500 employees

Top 500 = 13% 7/10 1,000

BizAv Users

92% sales 91% equity

90% net income 87% employee

92 % assets $150B contribution

Flight Department Growth

Revenue Increased

Profits Customers

Customer satisfaction

Employee satisfaction

Owner satisfaction

Direct Parallel

Companies = Flight Departments

Companies = Flight Departments

Mission

• Safe and Efficient operation

– Training

– Compliance

– Personnel

– Scheduling

– Planning

Mission • Safe and Efficient operation

– Training

– Compliance

– Personnel

– Scheduling

– Planning

– ACQUISITION

– REPLACEMENT

– DISPOSAL

Marketplace Knowledge Critical for Success

• Gulfstream

• Bombardier

• Falcon

• Cessna

• Hawker

• Beechcraft

• Embraer

• SETP

Marketplace Data 80 Business Jet and Turboprop Models

Tools and Resources

• Research protocols

• Comparative aircraft data

• Ownership cost analysis

• MRO requirements

• Cash flow projections

• Performance profiles

• Detailed check lists

• Market data subscriptions

Tools and Resources

• Economic forecasts

• Transactions

• Pricing trends

• Fleet size

• Available aircraft

• Regulatory mandates

Partner for Performance

BizAv Forecasting

Mission Analysis

• Near term • Longer duration • Destinations • Frequencies • Passenger count • Equipment • Materials

Worth vs Value

G550 Market Summary Info

Aircraft for sale 12 months ago 9

9 months ago 11

6 months ago 16

3 months ago 26

Current 26

Average For Sale 17.6

Change +189%

G550 Market Summary Info

Fleet Statistics

Percentage For Sale 6.2%

Fleet Size 450

Average Model Year 2008

Average TT 2,387 hours

G550 Market Summary Info

12 months ago $38,169,000

9 months ago $37,424,167 (–$744,833)

6 months ago $35,541,667 (–$1,882,500)

3 months ago $38,710,357 (+$3,168,690)

Current $38,615,313 (–$95,044)

Price Difference 1st to 4th Qtr (+$446,313)

Change +1.2%

Forecasting

Charter

Fuel sales

MRO

Fleet data

Single Engine Piston sales

Forecasting

Forecasting

2008 Recession - Inventory

2008 Recession - Prices

Today – Prices & Inventory

Obtaining the Maximum Benefit from a Business Aircraft

Sale or Acquisition

NBAA Annual Meeting and Convention

October 22, 2014

Holstein Acquisition Process

1 • GATE 1 – Stakeholder Input

2 • GATE 2 - Identification and Definition

3 • GATE 3 – Total Cost of Ownership Calculation

4 • GATE 4 – Asset Vetting and Verification

5 • GATE 5 – Diligent and Detailed Documentation

6 • GATE 6 – The Transaction

7 • GATE 7 – Enhancing Value and Preparation for the Future

Holstein Brokerage Process

1 • GATE 1 – Understand Your Motivation

2 • GATE 2 – Asset Evaluation

3 • GATE 3 – Market Position

4 • GATE 4 – Value Enhancement

5 • GATE 5 – Execute the Recommendations

6 • GATE 6 – The Transaction

7 • GATE 7 – Manage the Human Factor

8 • GATE 8 – Enhance Value and Future Preparation

Expertise and Capability

• 250 Years Experience

• 56,000 Flight Hours

• 3,500 Transactions

• $8 Billion in Value

Industry Leader

Steve Fushelberger

• VP Marketing

• 30 years experience

• Cessna Aircraft

• United Air Lines / Avolar

• Rolls-Royce

• AgustaWestland

• Beech Aircraft

• MRO / FBO / Part 135

Kathryn Scott

• Contracts Manager

• 25 years Global Aircraft Transactions Experience

• Directs all aspects of the contractual and closing process

Brad Guyton

• Technical Services • Industry expert • 25 years experience • Problem prevention • Troubleshooting • Pre-Buy inspections • Export / Import (EASA) • Delivery acceptance • Maintenance management • DAR services

Focus Areas

• Acquisitions

• Brokerage

• Leasing

• Supplemental lift

• Consultation

• Recruit / Outplace

Business Aircraft vs Capital Goods

Infrequent

Complex

Regulatory

Negotiation

Research

Pre-Buy

Errors

Calendar Year 2013 5,708 transactions

596 new jets

350 new turboprops

4,762 transactions

2,986 used jets

1,776 used turboprops

16.6% new sales

83.4% used sales

Client Benefits

Comprehensive data

In the market daily

3,500 transactions

Broad experience OEMs

Airframe (fixed 7& rotary)

Propulsion

Fractionals

MRO / FBO

Parts 91 / 135 / 121

Holstein Acquisition Process

1 • GATE 1 – Stakeholder Input

2 • GATE 2 - Identification and Definition

3 • GATE 3 – Total Cost of Ownership Calculation

4 • GATE 4 – Asset Vetting and Verification

5 • GATE 5 – Diligent and Detailed Documentation

6 • GATE 6 – The Transaction

7 • GATE 7 – Enhancing Value and Preparation for the Future

Acquisition Process

1 • GATE 1 – Stakeholder Input

Holstein Acquisition Process

1

• GATE 1 – Stakeholder Input

2

• GATE 2 - Identification and Definition

Holstein Acquisition Process

1 • GATE 1 – Stakeholder Input

2 • GATE 2 - Identification and Definition

3

• GATE 3 – Total Cost of Ownership Calculation

Holstein Acquisition Process

1 • GATE 1 – Stakeholder Input

2 • GATE 2 - Identification and Definition

3 • GATE 3 – Total Cost of Ownership Calculation

4 • GATE 4 – Asset Vetting and Verification

Holstein Acquisition Process

1 • GATE 1 – Stakeholder Input

2 • GATE 2 - Identification and Definition

3 • GATE 3 – Total Cost of Ownership Calculation

4 • GATE 4 – Asset Vetting and Verification

5 • GATE 5 – Diligent and Detailed Documentation

The Most Critical Elements

Research

Inspections

History

Full knowledge

Creative Writing

Maintenance record – Bird Strike

Airframe log – wing & inlet repairs

Propeller log – premature prop OH

Engine log – early HSI

Creative Writing

Holstein Acquisition Process

1 • GATE 1 – Stakeholder Input

2 • GATE 2 - Identification and Definition

3 • GATE 3 – Total Cost of Ownership Calculation

4 • GATE 4 – Asset Vetting and Verification

5 • GATE 5 – Diligent and Detailed Documentation

6 • GATE 6 – The Transaction

Holstein Acquisition Process

1 • GATE 1 – Stakeholder Input

2 • GATE 2 - Identification and Definition

3 • GATE 3 – Total Cost of Ownership Calculation

4 • GATE 4 – Asset Vetting and Verification

5 • GATE 5 – Diligent and Detailed Documentation

6 • GATE 6 – The Transaction

7 • GATE 7 – Enhancing Value and Preparation for the Future

Marketplace Data 80 BizJet and Turboprop Models

Holstein Brokerage Process

1 • GATE 1 – Understand Your Motivation

2 • GATE 2 – Asset Evaluation

3 • GATE 3 – Market Position

4 • GATE 4 – Value Enhancement

5 • GATE 5 – Execute the Recommendations

6 • GATE 6 – The Transaction

7 • GATE 7 – Manage the Human Factor

8 • GATE 8 – Enhance Value and Future Preparation

Holstein Brokerage Process

1

• GATE 1 – Understand Your Motivation

Holstein Brokerage Process

1

•GATE 1 – Understand Your Motivation

2

• GATE 2 – Asset Evaluation

Holstein Brokerage Process

1 • GATE 1 – Understand Your Motivation

2 • GATE 2 – Asset Evaluation

3 • GATE 3 – Market Position

Holstein Brokerage Process

1 • GATE 1 – Understand Your Motivation

2 • GATE 2 – Asset Evaluation

3 • GATE 3 – Market Position

4 • GATE 4 – Value Enhancement

Holstein Brokerage Process

1 • GATE 1 – Understand Your Motivation

2 • GATE 2 – Asset Evaluation

3 • GATE 3 – Market Position

4 • GATE 4 – Value Enhancement

5 • GATE 5 – Execute the Recommendations

Holstein Brokerage Process

1 • GATE 1 – Understand Your Motivation

2 • GATE 2 – Asset Evaluation

3 • GATE 3 – Market Position

4 • GATE 4 – Value Enhancement

5 • GATE 5 – Execute the Recommendations

6 • GATE 6 – The Transaction

Holstein Brokerage Process

1 • GATE 1 – Understand Your Motivation

2 • GATE 2 – Asset Evaluation

3 • GATE 3 – Market Position

4 • GATE 4 – Value Enhancement

5 • GATE 5 – Execute the Recommendations

6 • GATE 6 – The Transaction

7 • GATE 7 – Manage the Human Factor

Holstein Brokerage Process

1 • GATE 1 – Understand Your Motivation

2 • GATE 2 – Asset Evaluation

3 • GATE 3 – Market Position

4 • GATE 4 – Value Enhancement

5 • GATE 5 – Execute the Recommendations

6 • GATE 6 – The Transaction

7 • GATE 7 – Manage the Human Factor

8 • GATE 8 – Enhance Value and Future Preparation

Industry Leader

Industry Leader

Offset professional fee

Industry Leader

Offset professional fee

Shorten time frame

Industry Leader

Offset professional fee

Shorten time frame

Global contacts

Industry Leader

Offset professional fee

Shorten time frame

Global contacts

Comprehensive data

Summary

Solicit referrals

Stellar reputation

Experienced & Professional

Shared visions and values

Trust your gut

Summary

Ask questions

Do some homework

Be forthright

Don’t scrimp

Expand your knowledge

Discussion

Thank You

Obtaining the Maximum Benefit from a Business Aircraft

Sale or Acquisition

NBAA Annual Meeting and Convention

October 22, 2014