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UTC Proprietary - This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
2016 UTC Supplier
Conference
May 11, 2016
UTC Proprietary - This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
Note: All results and expectations in this presentation reflect continuing operations unless otherwise noted.
Cautionary Statement:
This presentation includes statements that constitute “forward-looking statements” under the securities laws. Forward-looking statements often contain words such as “believe,” “expect,”
“expectations,” “plans,” “strategy,” “project,” “prospects,” “estimate,” “target,” “anticipate,” “will,” “should,” “see,” “guidance,” “confident” and similar terms. Forward-looking statements may
include, among other things, statements relating to future sales, earnings, cash flow, results of operations, uses of cash, share repurchases and other measures of financial performance
or potential future plans, strategies or transactions. All forward-looking statements involve risks, uncertainties and other factors that may cause actual results to differ materially from
those expressed or implied in the forward-looking statements. Such risks, uncertainties and other factors include, without limitation: the effect of economic conditions in the industries and
markets in which we operate in the U.S. and globally and any changes therein, including financial market conditions, fluctuations in commodity prices, interest rates and foreign currency
exchange rates, levels of end market demand in construction and in both the commercial and defense segments of the aerospace industry, levels of air travel, financial condition of
commercial airlines, changes in government procurement priorities and funding, the impact of weather conditions and natural disasters and the financial condition of our customers and
suppliers; challenges in the development, production, delivery, support, performance and realization of the anticipated benefits of advanced technologies and new products and services;
future levels of indebtedness and capital spending and research and development spending; future availability of credit and factors that may affect such availability, including credit market
conditions and our capital structure; delays and disruption in delivery of materials and services from suppliers; customer- and company-directed cost reduction efforts and restructuring
costs and savings and other consequences thereof; the scope, nature, impact or timing of acquisition and divestiture activity, including among other things integration of acquired
businesses into our existing businesses and realization of synergies and opportunities for growth and innovation; new business opportunities; our ability to realize the intended benefits of
organizational changes; the anticipated benefits of diversification and balance of operations across product lines, regions and industries; the timing and scope of future repurchases of our
common stock; the outcome of legal proceedings, investigations and other contingencies; pension plan assumptions and future contributions; the impact of the negotiation of collective
bargaining agreements and labor disputes; the effect of changes in political conditions in the U.S. and other countries in which we operate; and the effect of changes in tax,
environmental, regulatory (including among other things import/export) and other laws and regulations in the U.S. and other countries in which we operate. The forward-looking
statements speak only as of the date of this presentation and we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information,
future events or otherwise, except as required by applicable law. Additional information as to factors that may cause actual results to differ materially from those expressed or implied in
the forward-looking statements is disclosed from time to time in our reports on Forms 10-K, 10-Q and 8-K filed with or furnished to the SEC from time to time, including, but not limited to,
the information included in UTC's Forms 10-K and 10-Q under the headings “Business,” “Risk Factors,” “Management's Discussion and Analysis of Financial Condition and Results of
Operations” and “Legal Proceedings” and in the notes to the financial statements included in UTC's Forms 10-K and 10-Q.
This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
WELCOME
Peter F. Longo, UTC Senior Vice President Operations
UTC Proprietary - This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
POSITIONED FOR GROWTH
Powerful mega-trends provide significant growth opportunities for UTC core business segments
UTC Proprietary - This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
2015 ANNUAL REPORT
Consolidated Statement of Operations
Net Sales
$56 Billion
Costs & Expenses
$48 Billion
UTC Proprietary - This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
AGENDA
State of the Business Industry Update Voice of the Customer
Supply Chain Sustainability
Dave Gitlin & Bob Leduc
Jeffrey Sprague
Don Mitacek
Barry Eccleston
Sarfraz Nawaz & Sam Abdelmalek John Mandyck
This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
UTC AEROSPACE SYSTEMS OVERVIEW
David Gitlin, President
This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
UTC AEROSPACE SYSTEMS
Industry-leading portfolio
Well-positioned on new platforms
Deep customer relationships
Strategies in place position us
for long-term growth
This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
UTC AEROSPACE SYSTEMS
5
Military
Trend
Military
Trend
Driver
2015 sales: $14.3B*
Military
Commercial
aftermarket
Commercial
OEM
RPMs
Fuel prices / airline profitability
New program EIS
Surplus availability
Military OEM platforms
ISR
Defense spending
*Adjusted for restructuring and other significant items. See appendix for reconciliation.
Sales drivers
Mid to high
single digit
Mid single digit
CAGR 2016E – 2020E
Low single digit
RPMs
Fuel
prices / airline profitability
New program
EIS
Surplus availability
Driver Trend
Comm AM Comm OEM
Driver Trend
Large commercial
Regional
Bizjet / rotorcraft
This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
6
UTC AEROSPACE SYSTEMS
New program introduction
($ millions)
Cost Reduction Targets
This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
PROGRAM EXECUTION
UTC AEROSPACE SYSTEMS
Program execution
A350-1000 B777X A330neo 787-10
737MAX C919 MC-21 CSeries
MRJ G500/600 KC-390 KC-46A
This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
8
UTC AEROSPACE SYSTEMS
Growth
($ millions)
Cost Reduction Targets
This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
9
UTC AEROSPACE SYSTEMS
Growth
($ millions)
Cost Reduction Targets
Continued focus on expanding aerospace systems offerings
This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
T
10
UTC AEROSPACE SYSTEMS
2020 financial outlook
//
2016E – 20E
CAGR
5-7%
(sales, $ billions)
This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
11
UTC AEROSPACE SYSTEMS
How customers measure us
We must be flawless or we’re “red.”
TECHNOLOGY
INNOVATION
CUSTOMER
FOCUS LOWEST COST
BEST QUALITY
OPERATOR
SUPPORT
NEW WINS
DELIVERY
RELIABILITY
This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
T T
12
UTC AEROSPACE SYSTEMS
Performance matters
Supplier Escapes
Supplier On-Time Delivery
This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
T
UTC AEROSPACE SYSTEMS
Supplier gold progress
Underperforming
suppliers lose 10% of
UTAS’s business/year.
Gold suppliers win 14%
incremental UTAS
business/year.
2014 2015 2016 YTD 2016 P
8
565
250
264
9
728
434
167
9
884
508
247
20
941
464
110
UNDERPERFORMING PROGRESSING PERFORMING GOLD
This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
UTC AEROSPACE SYSTEMS
Key takeaways
1. We’re industry leading.
2. We will outgrow a growing market.
3. 70% of our cost is supply chain.
4. We can only perform if you perform.
5. Gold performance leads to new business.
This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
PRATT & WHITNEY OVERVIEW
Bob Leduc, President
PRATT & WHITNEY
2
Segments
P&W PROPRIETARY
This document/page does not contain any export regulated technical data 2016-05-11_UTC_Top_Supplier
Military Engines Pratt & Whitney Canada
Commercial Engines
Overall Sales ~$14B Total engine shipments ~3,200 Aftermarket Revenue ~$9.8B
(2015)
Overall Sales $14.2B Total engine shipments 3,206 Aftermarket Revenue $9.77B
Pending finance
review
Photo: Gulfstream
Photo: Lockheed Martin
Photo: Airbus
PRATT & WHITNEY
3
Accomplishments in Last 15 Months
Photo of NAR Participants
P&W PROPRIETARY
This document/page does not contain any export regulated technical data 2016-05-11_UTC_Top_Supplier
CSeries certified
E-Jets E2 roll out ceremony MRJ first flight
First A320neo deliveries to
IndiGo and Lufthansa
F-35B
Initial Operational Capability
KC-46A Tanker first
refueling flight
Military Engines
Photo: Dassault
Dassault Falcon 8X
first flight
Gulfstream G500 first flight
Pratt & Whitney Canada
Photo: Lockheed Martin
Photo: Gulfstream Photo: Airbus Photo: Bombardier
Large Commercial Engines
PRATT & WHITNEY
4
Commercial Engines backlog
P&W PROPRIETARY
This document/page does not contain any export regulated technical data
Recently Announced Customers
GTF Engine Orders
OMM deck
2008 2009 2010 2011 2012 2013 2014 2015 2016E
YTD
>7,000
Includes some older
announcements to fill the space
Paris Air Show pedigree
2016-05-11_UTC_Top_Supplier
4
16 19
33 35 38 36
48
67
103
130
170
LRIP
1LRIP
2LRIP
3LRIP
4LRIP
5LRIP
6LRIP
7LRIP
8LRIP
9LRIP
10 LRIP
11* LRIP
12*
PRATT & WHITNEY
5
Military Engines backlog
P&W PROPRIETARY
This document/page does not contain any export regulated technical data
APU
Helicopter
Business jet
Regional
General aviation
Updated – needs
formatting
Service logos
USAF, NAVY, USMC, Foreign
too (MS or partners?)
Italy
Netherlands Canada
Norway
Denmark
Australia
U.K
.
Turkey
F135 Production Contracts
STOVL
CTOL / CV
(Number of engines per Low Rate Initial Production) F-35 Customers / Partners
* estimates
2016-05-11_UTC_Top_Supplier
2016 2017 2018 2019 2020
2016 2017 2018 2019 2020
PRATT & WHITNEY
6
2016 - 2020 Engine Shipments
P&W PROPRIETARY
This document/page does not contain any export regulated technical data
Pratt & Whitney Canada
Large Commercial / Military Engines
APU Regional
Helicopter General aviation
Business jet
Legacy ME V2500
Legacy CE F135
Tanker GTF
(Number of engine deliveries)
Updated
KC-46A Tanker ? When?
Total 2020 shipments Total 2020 a/m revenue
5,306 $11,038M
Total 2020 shipments 5,300 Total 2020 Aftermarket Revenue $11B
Risk to overall plan
2016-05-11_UTC_Top_Supplier
2000
3500
1500
500
0
1000
0
2000
3000
4000
PRATT & WHITNEY
7
P&W PROPRIETARY
This document/page does not contain any export regulated technical data
How do we succeed?
The load is real
Together
2016-05-11_UTC_Top_Supplier
PRATT & WHITNEY
8
Responsibilities
P&W PROPRIETARY
This document/page does not contain any export regulated technical data
Pratt & Whitney
•Invest in capacity
•Load commitments into portal
•Achieve at least 98% OTD
•Eliminate quality escapes
•Buffer stock
•Be personally engaged at the senior level
•Stabilize schedule
•Communicate BOM changes well in advance
•Invest in capital
•Resources support
Supplier
2016-05-11_UTC_Top_Supplier
34% 39% 30%
10%
16% 14%
15%
15%
25% 28% 35%
45%
50%
25% 19% 20% 30%
50%
2013 2014 2015 2016 Goal 2020 Vision
PRATT & WHITNEY
9
Supplier Gold Progress
P&W PROPRIETARY
This document/page does not contain any export regulated technical data
Gold
Performing
Under-
performing
Progressing
(% of spend in program)
Add 2020 vision
(50% Gold / 50% Performing)
Show
80%
@
perfor
ming
or
gold
2020E
Updated
2016-05-11_UTC_Top_Supplier
PRATT & WHITNEY
10
P&W PROPRIETARY
This document/page does not contain any export regulated technical data
Drivers
Process control
FAI/ Inspections
Actions
UPPAP
Process certification
Contract and subtier management processes
10.4 9.3
13
2014 2015 2016
2016-05-11_UTC_Top_Supplier
Supplier SDO’s
Supplier escapes – significant
(Monthly average)
1.5
2.3 2.7
2014 2015 2016
WORLD CLASS GLOBAL SUPPLY BASE QUALITY
11
What does it look like?
P&W PROPRIETARY
This document/page does not contain any export regulated technical data
Delivery > 98%
No Significant Escapes
UPPAP Execution
Process Certification Expertise
Subtier Management
50%
63% 69%
2013 2014 2015
Subtier supplier score trend
Original Quality
sumbission
2016-05-11_UTC_Top_Supplier
PRATT & WHITNEY
12
Summary
P&W PROPRIETARY
This document/page does not contain any export regulated technical data
Once in a lifetime opportunity for us all…
2016-05-11_UTC_Top_Supplier
This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
INDUSTRY OVERVIEW
Jeffrey Sprague, Vertical Research Partners
Running a Reliable,
Customer-Focused Airline
Don Mitacek – SVP
Delta Technical Operations
Delta Private Jets
Delta Global Services
Another Record Breaking Year
•Safety, Reliability, Customer Satisfaction, Financially
•How did we improve?
•How do we continue to improve?
•How do we work with our key partners?
Operations
DOT Completion Factor* DOT On-Time* DOT Baggage**
Delta #1
10 of 12 months
Delta #1
4 of 12 months
Delta #1
2 of 12 months
Top of Industry Operational Performance
98.62%
98.75%
98.79%
98.80%
99.59%
99.69%
97% 98% 99% 100%
American
Jetblue
United
Southwest
Alaska
Delta
76.2%
79.6%
80.7%
80.8%
86.4%
86.8%
65% 70% 75% 80% 85% 90%
Jetblue
United
American
Southwest
Delta
Alaska
3.92
3.31
3.27
3.06
2.08
1.81
1.5 2.0 2.5 3.0 3.5 4.0 4.5
American
Alaska
Southwest
United
Delta
JetBlue
*Last twelve months through February 2016
**Last twelve months through January 2016
Operations
Core Reliability Performance
•Strong maintenance reliability
•69% increase in number of mainline
100% CF days vs 2014
•214 100% domestic mainline CF days
•Delta significantly better than all other
network carriers combined
System Performance
System 100% CF Days
Domestic 100% CF Days
10 20
72
95
161
2011 2012 2013 2014 2015
151 days better
197 214
13
42
Full Year 2014 YTD November 2015
DL American/US + United + Southwest
Operations
Core Reliability Performance
•Expanded maintenance footprint
•Growing internal maintenance capabilities
•Serviceable levels
•Reliability projects
•Leverage Cargo’s improved DASH performance
•Predictive maintenance
TechOps Initiatives
•40% reduction in cancellations vs 2014
•7% improvement in maintenance delays vs 2014
TechOps 2015 Performance
Maintenance Cancellations
100% Maintenance CF Days
3,134
1,244
792
414 249
2011 2012 2013 2014 2015
92% better
28
53
117
169
236
2011 2012 2013 2014 2015
208 days better
Customer Service
•Driving record performance
•Testing service concepts
Customer Surveys
Domestic NPS
Flight Attendant Interaction
2011 2012 2013 2014 2015
2011 2012 2013 2014 2015
It’s Not Luck
•TechOps – TOC
•Baggage
•ATL kitchen
•Aircraft turns
Process Technology Infrastructure Execution
•Mobile
•Applications
•RFID
•Wearables
•Predictive
Maintenance
•Reliability
•Security
•Georgia Tech
Innovation Center
•Airports
•Bag systems
•De-icing
•Flight simulations
•TOC capacity
•EIG
•MBOs / MPRs
•Data analytics
•Reports / alerts
•Continuous
improvement
•Change management
Most Importantly - Our People
People
•Servant Leadership
•Culture
•Values
•Incentives
How Do We Know
Survey Scores:
•I understand how my daily work impacts Delta’s overall goals – 4.53
•How likely are you to refer a family member, friend, etc.. to Delta - 4.50
•I am proud to tell others I work for Delta -
4.47
•I feel Delta creates the direction and sets the pace for the industry - 4.34
•Overall, I feel Delta is a great place to work -
4.46
Partnering With Our Suppliers
Partnership
•Not all suppliers are created equally
•Price is not value
•Win/Win or go home…
•Objectives, goals and measurement
•Partnership is not an empty word
Running a Reliable,
Customer-Focused Airline
Thanks!
This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
SUSTAINABILITY
John Mandyck, UTC Chief Sustainability Officer
This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
PRATT & WHITNEY GLOBAL SUPPLY CHAIN
Sam Abdelmalek, Vice President, Global Supply Chain
This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
EXCITING OPPORTUNITIES & CHALLENGES
2016F 2020P
Sales
$15B $22B
Installed engines
>70K >100K
Annual
product spend $4B >$8B
Annual
non-product spend >$1.5B >$2B
Supplier
Gold & Performing 56%* 100%V
NGPF
target cost ratio 2x* <1x
*2016A
This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
>200 deals
completed since
Jan. 2014
ACCOMPLISHMENTS – SUPPLY BASE
100+ Suppliers
Events
500 parts on “Boost”
validation
Senior management
meetings
Hundreds of
millions in
supplier CAPEX
460 Production
readiness
assessments
$23B in LTAs
Production
Readiness BOOST Investments
This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
SUPPLIER GOLD – THANK YOU!
BelcanBelcan
This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
P&W ACCOMPLISHMENTS
15-20 reviews @ P&W,
40 reviews @ UTC Go Live – July ‘15
Exceeding Targets –
April ‘16
P&W Logistics
Center
Global
investments Strategic Sourcing
Annual Review Boards
Supply Chain
evolution
This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
OUR EXPECTATIONS
PW1100G-JM
LTAs
Production Rate
Readiness & BOOST Cost
Supplier Gold
& UPPAP
This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
P&W SUPPLIER GOLD PERFORMANCE
NGPF & F135 Production Readiness Supplier Risks
High Medium Low
34 114 63
Pratt & Whitney Supplier Gold Progress
This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
BETTER ORGANIZED TO WORK WITH YOU
Early Alert Risk
Management
Regional Offices
USA
Canada
Supplier
Development
Resources
America: 31
Europe: 9
Asia: 4
Professional Support
Network
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U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
SYSTEM INVESTMENTS - 2016
Contract Lifecycle
Management (CLM)
Supplier Portal Supplier Network
Collaboration
UPPAP Management
Software
Net Inspect QN Collaboration Hub
This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
Executive Steering Committee
Dedicated project lead and co-lead
Change management and communication teams
Supply Network Collaboration Replenishment Strategies
SIOP/Capacity Planning Logistics
Manage Inventory
SI&OP
Plan Supply
Plan Demand Assure
Delivery
Move
Material
Manage
Freight
MATERIAL MANAGEMENT
System
Evaluation
Engineering
Changes
PFEP &
Buffering
Value Stream
KPI
Value Stream
Organization
This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
Supplier Quality
Manager
Value Stream
Management
A Commodity
management
C Commodity
management
D Commodity
management
Manufacturing
Engineering
MODULE CENTER EVOLUTION
Strategy and
Business Processes
Value Stream
Management
Value Stream
Management
Value Stream
Management
Engineering
Account
management
Account
management
Account
management
Account
management
B Commodity
management
Supply Chain
Senior Manager
Material
Planning
Manager
Quality Manager
This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
SUPPLIER HEALTH ASSESSMENT (SHA)
Business Continuity
Process Certification
Sustainability
International Trade Compliance
Sales & Operations Planning
Sub-tier Management
A More Robust Program
Enabling sustainable performance
This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
WORKING PROACTIVELY
Dashboard
Supplier Code:
Capacity
% on
UPPAP
% UPPAP
completed
Capacity Graphs trending Andon Red
Promise
Dating
X ≥95% >95% X ≥ 100% X ≥ 100% X ≥ 100% Demonstrated Capacity (12 months) > MRP Requirements
85%
< X < 95% >85%, < 95% 95% ≤ X < 100% 95% ≤ X < 100% 95% ≤ X < 100% Demonstrated Capacity (12 months) = MRP Requirements
85%
≥ X <85% 95% > X 95% > X 95% > X Demonstrated Capacity (12 months) < MRP Requirements
Sunday
(YYYY-MM-DD)
Saturday
(YYYY-MM-DD)
% of
green
(parts)
% of
yellow
(parts)
% of red
(parts)
% %
% of
green
(parts)
% of
yellow
(parts)
% of red
(parts)
% of
green
(parts)
% of
yellow
(parts)
% of red
(parts)
% of
green
(parts)
% of
yellow
(parts)
% of red
(parts)
Overall Rating # of parts # of parts %
WEEK 1
WEEK 2
WEEK 3
WEEK 4
WEEK 5
WEEK 6
WEEK 7
WEEK 8
Yield
Quality
XRM or Production Metrics
Raw Material
Built Ahead Tool
Finish Goods
Work In Process/
Lead Time
March 31, 2016
PFMEA
Capacity Planning
Leading Performance Indicators
PW1100 Buffer Status
Dec. 31, 2015
This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
DEMAND/PROFILE GROWTH & CHANGES
NGPF Spares
Commercial Engines
Military Engines
NGPF Build Rate
This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
PRODUCTION READINESS
Risk Mitigation
34 High Risk Suppliers (PRR)
Critical actions:
Demand reconciliation
Finalize capacity & resources
Commitments/accountability
BOOST program
QN reduction
Sub-tier management
Action item tracking
Drive EQNs Down
This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
AFFORDABILITY AND VALUE
PT6
NGPF engines
F135
Global
Footprint
Tech
COPQ
VA/VE
LTAs
This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
LONG TERM AGREEMENTS
90+ day payment terms
OTD performance guarantees
Quality Notification (QN) charges
Minimum buffer stock
Supplier Gold commitment
One Company Governance Supplier Gold
Certification Benefits
Payment Terms Buffer Stock
90 days
75 days
No Performance
Guarantees / QN
Admin. Charges
Supplier Selection
Benefits / Business
Opportunities
This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
TAKEAWAYS
Continued collaboration to drive world-class performance
Investing in our people, systems &
processes
Steady journey toward a world-class
supply chain
Improved schedule stability
Continued collaboration with our supply
base
P&W Commitments
Supplier Gold certification with UPPAP
Invest in growth and production readiness
Promise date commits, buffer &
leading indicator management
Year-over-year productivity commitments
(V2 & SmartChoice)
One Company contract with UTC governance
Supplier Expectations
This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
UTC AEROSPACE SYSTEMS SUPPLY CHAIN
Sarfraz Nawaz, Vice President
UTC Proprietary - This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
UTC AEROSPACE SYSTEMS
Supply Chain profile
Machining
Engineered
Items
Casting,
Forging, Raw
Material
Fabrications,
Composites &
Plastics
Electronics
Other
Distributed
Products
Product
$5.3B+ Non product
$1.6B+
IT & Telecom
Plant
Consumables
Logistics
Facilities
Management
Temp Labor
Travel
Energy
Other
UTC Proprietary - This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
UTC AEROSPACE SYSTEMS
Supply Chain profile
Strategic
Optimizing resources to achieve performance
Tactical
Input based
scoring Prioritized
by score
Targeting
underperformers
Organizational design
Supplier Performance
Input cost management
Investment in technology
Process innovation
Leverage scale opportunity
Affordability initiatives
Compliance
International Trade Compliance
REACh
Conflict minerals
CPSR / Audits
Supplier sustainability
Supplier Name
Supplier
Gold
(1, 5, 10)
Volume /
Spend
(10, 8, 5, 1)
Quality:
PPM
(10,8,5,1)
Quality:
Escapes
(10,8,5,1)
Quality:
Delivery
(10,8,5,1)
Sourcing
Strategy
(10, 5,1)
Total
Score
PRECISION MACHINE WORKS
810 0 8 10 10 46
NORANCO
10 10 10 0 5 10 45
FACC
510 010 10 10 45
NIKKISO
510 010 10 10 45
JONACO MACHINE
10 810 0 5 10 43
ALARD MACHINE
8 8 10 0 5 10 41
CTRM
510 0 5 10 10 40
NATIONAL MACHINE
810 10 0 5 5 38
MOOG
010 010 810 38
GUIZHOU LIYANG AERO
5 8 0 5 10 10 38
PHOENIX MFG 10 10 10 0 5 10 45
ECE GROUP INTERTECHNIQUE 10 10 0 8 10 543
CHRISTOPHER TOOL 10 10 5 0 8 10 43
PARKER HANNIFIN 10 10 0 8 8 5 41
EATON 10 810 0 8 5 41
B/E AEROSPACE 10 10 5 0 5 10 40
PALL AEROPOWER 10 8 5 0 10 538
A M CASTLE 10 10 5 0 8 5 38
BRAZONICS 10 8 0 5 8 5 36
PRECISION MASTERS 10 5 8 0 8 5 36
Aircraft Systems
Power Control and Sensing
New Program
Introduction Sourcing
Quality &
Development
Procurement
execution Delivery
assurance
UTC Proprietary - This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
UTC AEROSPACE SYSTEMS
Supply Chain performance
2014 2015 2016
2014 2015 2016
33% 44% 58% 76% 100%
2013 2014 2015 2016 2020
OTD
495 608 726
2014 2015 2016
Supplier Development
Playbook deployment
6%
31%
NA-East
157 suppliers
NA-West
186 suppliers
NA-Midwest
126 suppliers
Europe
206 suppliers Asia
51 Suppliers
7%
Gold / Performing spend
Supplier Gold Performance metrics
50%
Regions # of Escapes Underperforming spend
//
//
47%
21%
12% 6% 0%
2013 2014 2015 2016 2020
UTC Proprietary - This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
UTC AEROSPACE SYSTEMS
Supply Chain key initiatives
Top supplier escape reduction
50% reduction in escapes and PPM
Zero significant escapes
Drive QIP on key suppliers
Systemic DIVE
PFEP compliance
Forward stocking locations / 3PL
Logistics design
Supplier portal control
Buffer stock
Dual production
Dedicated capacity
Low Risk
Medium Risk
High Risk
Assess and reduce
supplier risk
Elements Criteria
PRS 4 6
Surveillance 12 6
SHA 5 Gold
Material management
Zero Defect Plan
Rate readiness
UPPAP
Complexity/criticality
Process Certification
Flawless EIS
Seamless transitions
Future planning
Limit production risks
Application on key programs ongoing, and growing
NPI Transitions Major changes
UTC Proprietary - This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
UTC AEROSPACE SYSTEMS
Supply Chain investments
Spend Analytics Contract Lifecycle Management
(CLM) Demand & Material Management
Facilities / Technology Supplier Portal / SAP People & Processes
UTC Proprietary - This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
UTC AEROSPACE SYSTEMS
Supply Chain takeaways
Performance Commercial
Plan to Gold
Rate readiness
LTA coverage
Cost reduction
© AIRBUS all rights reserved. Confidential and proprietary document. Month 20XX Use Tab 'Insert - Header & Footer' for Presentation Title - Siglum - Reference
Creating better
ways to fly
UTC Customer Event
Barry Eccleston
President - Airbus Americas
© AIRBUS S.A.S. All rights reserved. Confidential and proprietary document.
We are part of Airbus Group
2016
2014 statistics
138,000+
Total workforce $932.1billion
Order book $66billion
Annual revenue
© AIRBUS S.A.S. All rights reserved. Confidential and proprietary document.
Airbus is a global aircraft manufacturer
2016
55,000
Employees $72billion
Annual revenue* 10yrs
Backlog 400
Operators
Data to end 2015
© AIRBUS S.A.S. All rights reserved. Confidential and proprietary document.
The most global aerospace player – close to our customers worldwide
2016
The numbers
-
11 Production sites
4 Assembly line locations
5 Training centres
4 Engineering centres
3 Customer support centres
10 Materials & logistics centres*
*Satair Group
© AIRBUS S.A.S. All rights reserved. Confidential and proprietary document.
•Catalyst for $15.8 billion in annual aircraft related expenditure in the USA
•Supporting over 262,000 jobs
•Suppliers in over 38 states
•Airbus Commercial, 6 primary sites with over 2000 employees.
A strong and growing physical and economic presence in the USA
•April, 2016 – Airbus Mobile delivers first American assembled A320
Airbus Commercial in the US
Headquarters
Herndon, Virginia Airbus Spares Center
Ashburn, Virginia
Airbus Training Center
Miami, Florida Airbus Engineering Center
Wichita, Kansas
Airbus Engineering Center
Mobile, Alabama
2016
© AIRBUS S.A.S. All rights reserved. Confidential and proprietary document.
Airbus expands in the US with an A320 family Final Assembly Line
2013
Start of construction
2015
Start of aircraft assembly
2016
First delivery
2018
40 to 50 deliveries
2016
© AIRBUS S.A.S. All rights reserved. Confidential and proprietary document.
Our aircraft are a familiar sight around the world
2016
Presence
-
An Airbus takes off
or lands every
2 seconds
16,300+
Aircraft sold 60
Produced monthly 25,000+
Daily flights
9,600+
Delivered
Data to end March 2016
© AIRBUS S.A.S. All rights reserved. Confidential and proprietary document.
2016
Meet the Airbus family from 100 to 500+ seats
The Airbus Family
A320 Family A330 Family A350 XWB A380
The market leader The right aircraft, right now The Xtra that makes a difference Own the sky
© AIRBUS S.A.S. All rights reserved. Confidential and proprietary document.
The A320 Family is the world’s best selling aircraft
Data to March 2016
2016
12,400+
Orders 6,900+
Deliveries 310+
Operators
Airbus corporate presentation
A320
-
Superior comfort, lowest
cost and highest reliability
A320neo - 20% lower fuel
burn
© AIRBUS S.A.S. All rights reserved. Confidential and proprietary document.
Raw Materials
Make-to-print Parts
and Assemblies
Large-scale
Integration
Platform
Assembly
Value-added Parts
and Assemblies
A300/320 A380 A350
Fewer, but still many
direct partners
Limited role for
“integrators”
Airbus (40% of
an aircraft cost)
Many direct partners
No real role for
“integrators”
Build to print for parts
and sub-assemblies
Airbus
(50% of an aircraft
cost)
Fewer large partners sharing the
risk, strategy and opportunities
Extensive integrator role
Global extended enterprise
Each tier has more opportunity
TIER 1
RSP
Airbus (20% of an
aircraft cost)
Airbus sourcing principle: enhanced responsibilities
Page 41
2016
© AIRBUS S.A.S. All rights reserved. Confidential and proprietary document.
Globalize & consolidate the supply chain
•STIMULATE the competition within the
supply base
•FEWER and BIGGER suppliers with
ENHANCED responsibility
•L4L (Local for Local) will remain, key support
for a Final Assembly Line
•EARLY INVOLVEMENT of major
suppliers in joint development teams
including R&T
•GLOBAL SOURCING* challenges for
both Airbus and its suppliers
*Global sourcing: international sourcing = Non-EU countries
2016 Airbus corporate presentation
© AIRBUS S.A.S. All rights reserved. Confidential and proprietary document.
2016 Airbus corporate presentation
What are we looking for in potential suppliers
Quality accreditations, AS9100, NADCAP
Already working for an Airbus Group Business
Unit or other aerospace OEM’s
Customer recognition, GOLD, 5 STAR,
supplier of the year, etc.
Strong in commercial work
Financially stable and ability to invest,
Experienced Management and functional
structure
Strong manufacturing engineering
Innovative products and companies
Vertical integration
© AIRBUS S.A.S. All rights reserved. Confidential and proprietary document.
Airbus/Supplier joint efforts to meet customer demand
Make it right the first time
Ensure sufficient capacity. A350 and Single Aisle
Reach and sustain excellent performance
Be creative and propose solutions for cost optimisation
RAMP-UP
ON-TIME
DELIVERY
QUALITY
COST
2016 Airbus corporate presentation
© AIRBUS S.A.S. All rights reserved. Confidential and proprietary document.
Questions?
2016 Airbus corporate presentation
© AIRBUS S.A.S. All rights reserved. Confidential and proprietary document.
2015 Year End Results
2016 Airbus corporate presentation
© AIRBUS S.A.S. All rights reserved. Confidential and proprietary document.
The most modern, efficient & comprehensive range of widebody aircraft available today
2016
1,600+
Orders 1,240+
In service 110+
Operators
Airbus corporate presentation
Data to March 2016
A330
-
The world’s most
popular mid-size
aircraft
A330neo - 14% lower
fuel burn, more seats,
more range
© AIRBUS S.A.S. All rights reserved. Confidential and proprietary document.
A350 XWB – the Xtra that makes a difference
Data to March 2016
2016
770+
Orders 41
Customers
Airbus corporate presentation
25%
Lower operating cost
-
Xtra space for unrivalled
passenger comfort
Xtra innovative
technologies for
optimised airline efficiency
© AIRBUS S.A.S. All rights reserved. Confidential and proprietary document.
A380 – a solution to increased demand for air transport
2016
315+
Orders 180+
Deliveries
Airbus corporate presentation
Data to September 2015
Customers
18
A380
-
Most profitable, most
comfortable way to transport
more people
A take-off or landing every
3 minutes
© AIRBUS S.A.S. All rights reserved. Confidential and proprietary document.
•Airbus Group ~ 50
•Airbus Americas ~ 1300
•Airbus Defense & Space ~ 900
•(Divestments in progress) ~ -600
•Airbus Helicopters ~ 1000
•Vector Aerospace ~ 1100
•STELIA Aerospace ~ 450
•Navtech ~ 250
•Airbus Group Mexico ~ 400
Airbus Group North America + Airbus Group Mexico
~50 Locations
~5450 Employees
/ Contractors
~3250 USA
~1800 Canada
~ 400 Mexico
2016 Airbus corporate presentation
© AIRBUS S.A.S. All rights reserved. Confidential and proprietary document.
Procurement Organisation - worldwide coverage
Sourcing Office
North America
Sourcing Office
India and
Middle East
Sourcing Office
China and
East Asia
Central &
Operational
Teams
More than 2,700 Procurement employees representing
37 nationalities located worldwide,
looking after more than 7,700 Suppliers (excluding Airbus Military).
2016 Airbus corporate presentation
© AIRBUS S.A.S. All rights reserved. Confidential and proprietary document.
Airbus Group North America Procurement Contact Information
2016 Airbus corporate presentation
02.2015
•Title your email response:
•“Goods & Services RFI response” for all non-
flying goods and services.
•“Flying Parts RFI response” for all products that
will actually be installed or used on an aircraft.
•Return the RFI document and company presentation
via email to:
NAsupplier@airbus.com
Airbus North Americas Headquarter: 2550 Wasser Terrace, Suite 9100 ,Herndon, VA 20171 USA
Process to follow:
•You must obtain a Request For Information (RFI)
document by sending an email to:
NAsupplier@airbus.com
•Answer all the questions on the RFI document.
•Prepare your company presentation.
© AIRBUS all rights reserved. Confidential and proprietary document.
© AIRBUS (Airbus S.A.S., Airbus Operations S.A.S., Airbus Operations GmbH, Airbus Operations LDT, Airbus
Opeartions SL, Airbus China LTD, Airbus (Tianjin) Final Assembly Company LTD, Airbus (Tianjin) Delivery
Centre LTD). All rights reserved. Confidential and proprietary document. This document and all information
contained herein is the sole property of AIRBUS. No intellectual property rights are granted by the delivery of
this document or the disclosure of its content. This document shall not be reproduced or disclosed to a third
party without the express written consent of AIRBUS S.A.S. This document and its content shall not be used
for any purpose other than that for which it is supplied. The statements made herein do not constitute an offer.
They are based on the mentioned assumptions and are expressed in good faith. Where the supporting
grounds for these statements are not shown, AIRBUS S.A.S. will be pleased to explain the basis thereof.
AIRBUS, its logo, A300, A310, A318, A319, A320, A321, A330, A340, A350, A380, A400M are registered
trademarks.
2016 Airbus corporate presentation
This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
CLOSING REMARKS
Peter F. Longo, UTC Senior Vice President Operations
UTC Proprietary - This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
THANK YOU TO OUR GOLD SUPPLIERS
Peterborough, Ontario
Quebec & Ontario,
Canada
Evansville, IN
Manchester, CT
NJ, USA
Jeffersonville, IN
New York, NY
Kent, WA
Huntsville & Berryville, AR
Joplin, MO & Tulsa, OK
Aurora, CO
Framingham, MA
Manchester, CT
Tillsonburg, Canada
Mississauga, ON
Ronkonkoma, NY
Longueuil, QC
Kulim, Kedah, Malaysia
Southgate, MI
Belo Horizonte City, Brazil
Kalisz, Poland
Corinth, TX
Chihuahua, Mexico
Rzeszow, Poland
Auburn, MA
Hoogerheide,
Netherlands
Dunedin, FL Santa Fe Springs, CA
Biłgoraj, Poland
Hyderabad, India
Windsor, CT
Cairo, Egypt
Changzhou, China
Goleta, CA
Madison, AL
St. Hubert, Quebec
Belvidere, IL
Colmar, PA
Macomb, MI
Lancashire, UK
Independence, KS
UTC Proprietary - This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
THANK YOU TO OUR GOLD SUPPLIERS
Akashi, Japan
Miramar, FL
Verdi, NV
Kure, Japan
Lincolnshire, IL
Mankato, Minnesota
Guangzhou, China
Birmingham U.K.
East Windsor, CT
Zamudio, Spain
Deer Park, NY
Glastonbury, CT
Mumbai, India
Munich, Germany
New York, NY
Quebec, Canada
Atlanta, GA &
St. Laurent, Quebec
Jiangsu, China
Trumbull, CT
Hemmingford, Quebec,
Canada
Windsor, CT
Laval, Quebec
Kozy, Poland
East Hartford, CT
Cranbury, NJ
Windsor, CT
Farnborough, Hampshire
Randolph, NJ
Stanley, UK
Boca Raton, FL
BelcanBelcan
East Hartford, CT &
Palm Beach Gardens, FL
Quebec, Canada
Non Consulting Services
Mumbai, India
Rockwood, TN
Columbus, MS
North America
UTC Proprietary - This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
PREPARE FOR THE RAMP
UTC Proprietary - This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
SUPPLIER CODE OF CONDUCT
This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
NON-PRODUCT BREAKOUT
Non-Product Executive Team
UTC Proprietary - This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
NON PRODUCT
Welcome / Opening Remarks
Key takeaways from morning session
State of the businesses
Introduction to Non Product
Supply chain at UTC
Priorities
Investments
Agenda
UTC Proprietary - This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
NON PRODUCT
Working together we are committed to…
Our people.
Operational excellence.
Delivering on our value proposition.
UTC Proprietary - This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
NON PRODUCT
Comments, questions and key take-aways from
morning session…
UTC Proprietary - This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
SHAREHOLDER VALUE CREATION
Focused portfolio of global franchises
Structural cost reduction
Innovation for growth
Strong performance culture
Disciplined capital allocation
UTC Proprietary - This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
OTIS 2020 OUTLOOK
See appendix for reported sales and operating profit (afx)
*Adjusted for restructuring and other significant items. See appendix for reconciliation.
Key Strategies
Accelerate innovation
Service transformation
Operations excellence
New equipment growth
($ billions)
UTC Proprietary - This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
•Expand sales coverage
•Enhance product offering
•Align incentives for profitable growth
OTIS GROWTH
Growth Strategy
•Strengthen core brands
•Leverage scale
•Customer segment focus
China Transformation
Continued urbanization
Infrastructure development
Source: Internal estimates
UTC Proprietary - This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
CLIMATE, CONTROLS & SECURITY 2020 OUTLOOK
Key Strategies
Innovation
Cash generation
Cost leadership
Organic growth
M&A actions
($ billions)
*Adjusted for restructuring and other significant items. See appendix for reconciliation. See appendix for sales
and operating profit at actual FX (afx)
UTC Proprietary - This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
Consultative selling
Strategic accounts
Integrated solutions
CLIMATE, CONTROLS & SECURITY GROWTH
UTC Proprietary - This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
PRATT & WHITNEY 2020 OUTLOOK
($ billions)
*Adjusted for restructuring and other significant items.
Key Strategies
Industrial plan execution
Manufacturing cost reduction
E&D stabilization
Successful service entries
Aftermarket growth
UTC Proprietary - This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
PRATT & WHITNEY GROWTH
C Series certified
E-Jets E2 roll out ceremony MRJ first flight
First A320neo deliveries to
IndiGo and Lufthansa
Large Commercial Engines
F-35B Initial Operational Capability
KC-46A Tanker first refueling flight
Military Engines
Photo: Dassault
Dassault Falcon 8X first flight
Gulfstream G500 first flight
Pratt & Whitney Canada
Photo: Lockheed Martin
Photo: Gulfstream Photo: Airbus Photo: Bombardier
UTC Proprietary - This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
UTC AEROSPACE SYSTEMS 2020 OUTLOOK
*Adjusted for restructuring and other significant items. See appendix for reconciliation.
Key Strategies
Positioning on new platforms
Deep customer relationships
Drive continued cost reduction
Industry-leading portfolio
($ billions)
UTC Proprietary - This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
UTC AEROSPACE SYSTEMS GROWTH
UTC Proprietary - This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
UTC SUPPLY CHAIN
HEATING, COOLING,
REFRIGERATION
FIRE SAFETY & SECURITY
53K+ employees
45+ manufacturing sites
25 ERP systems
~45K suppliers
AEROSPACE SYSTEMS
42K+ employees
90+ manufacturing sites
2 ERP systems
~20K suppliers
AIRCRAFT ENGINES
AUXILLARY POWER UNITS
33K+ employees
50+ manufacturing sites
1 ERP system
~5K suppliers
ELEVATORS &
ESCALATORS
64K+ employees
20+ Manufacturing sites
9 ERP systems
~21K suppliers
UTC Proprietary - This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
NON PRODUCT
Scope
Total Non Product Spend Total SMARTChoice Spend
UTC Proprietary - This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
NON PRODUCT
One Company Global Engagement
Develop
Strategy
Review &
Align Implement Assess &
Improve
Commodity councils
Regional councils
Strategic supplier
account executives
One Company strategy
Review Board
Supply Management
Council
Supplier relationship
sponsors
Project execution
Supply base optimization
Initiatives pipeline
Compliance & policy
Executive reviews
Performance reviews
Policy deployment
Annual KPIs
UTC Proprietary - This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
NON PRODUCT
Priorities
Compliance
Supply Chain Performance
One Company Coverage
SMARTChoice Spend
Working together beyond
quality & delivery
Refreshed Supplier Gold
Program for non product
Spend as a % of sales
Cost control targets for
each category and
budget
SMARTChoice spend under
one-company contract
Program expansion into new
commodities
Best in class compliance
metrics in all SMARTChoice
spend categories
New visibility focusing on
compliance and consumption
Stop Light Performance Chart - Division Level
UTC
October 2014 Sorting options:
Division
Sep Oct PYTD YTD Sep Oct PYTD YTD Sep Oct PYTD YTD
CCS 74% 76% 76% 76% 64% 66% 60% 62% 83% 84% 86% 85%
Corporate 79% 81% 81% 81% 74% 73% 72% 72% 86% 88% 87% 87%
Otis 73% 75% 66% 73% 60% 47% 56% 51% 98% 95% 97% 97%
Pratt & Whitney 52% 55% 59% 56% 46% 47% 42% 44% 97% 92% 99% 97%
Sikorsky 65% 62% 60% 66% 45% 49% 43% 56% 91% 90% 89% 91%
UTAS 71% 71% 69% 69% 45% 46% 45% 45% 80% 80% 83% 81%
UTRC 67% 67% 69% 66% 48% 65% 61% 58% 80% 87% 84% 85%
Total 68% 69% 67% 68% 50% 50% 47% 50% 87% 86% 88% 87%
Goals 85% 85% 85% 85% 85% 85% 85% 85% 88% 88% 88% 88%
Below Avg Performance
Domestic
7 Day Advanced Purchase
International
14 Day Advanced Purchase
Lowest Logical Airfare Compliance (w/in
$100)
Avg Performance w/in 5% of Goal
Above Avg Performance
N/A - No Travel in Current Month
BU Level
Division Level
Dept Level
SMARTChoice Spend
UTC Proprietary - This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
NON PRODUCT
P2P for commercial
CLM implementation
Spend data visibility project
VMS/MSP implementation
SAP go live at UTAS
Investment
UTC Proprietary - This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
NON PRODUCT
Ready, set… grow!
Thank you for attending
Logistics for remainder of the day
Summary & closing comments
Dr. J. Michael McQuade
Senior Vice President, Science & Technology
Innovation Creating the New World
Moving the world forward
Transporting the world’s population every 4 days
Providing priceless assets with humidity control solutions
Equipping 80% of world’s aircraft
with critical components & systems
Powering freedom around the world
Legacy
Willis
Carrier Elisha
Graves Otis Fred
Rentschler Thomas
Hamilton Fred
Rohr
Our Legacy of Innovation
PurePower PW 1000G Engine
16% fuel reduction
50% emission reductions / 75% noise reduction
$1.5 million saved per aircraft per year
UTC Innovation
Airbus A400M
UTC Innovation
Largest all-composite propeller
in production
NaturaLINE™ Container Refrigeration
First in the world to use CO2 as a refrigerant
Reduces carbon dioxide emissions by 35%
UTC Innovation
Gen 2 Elevator
57 Otis Elevators installed
in the Burj Khalifa
UTC Innovation
0
1,000
2,000
3,000
4,000
5,000
2000 2005 2010 2015E 2020E 2025E 2030E
20%
19%
15%
12%
12%
22%
Rest of
Asia
Latin
America Africa
China
Rest of
World
India
5
(millions of people)
billion
Urbanization
Urban Population: 5B by 2030
Urban Population Growth
Commercial Aerospace Growth
0
2
4
6
8
10
1980 1990 2000 2010 2020E 2030E
Aircraft Deliveries: 37K by 2030
Revenue Passenger Miles
(trillions)
37%
20%
20%
8%
8%
7%
North
America
Asia
Rest of
World
Europe
Latin
America
Middle
East 37
thousand
0
2 000
4 000
6 000
8 000
2000 2005 2010 2015E 2020E 2025E 2030E
(millions of people)
Future of Food
CO2 Emissions Due to Food Wastage
World Population Growth
3.5 Gt CO2 equivalent
If food waste were a country, it
would be the 3rd top emitter
30% food wasted
Critical infrastructure
…Our innovation is mission critical
Innovative consumer economy
Innovation
UTC Innovation
Solve tough problems...
Define new frontiers...
Leverage global network of innovation...
Co-develop new technologies...
Serve as hub for technical interchange...
GTF
lubrication
Next Gen
centrifugal
Advanced manufacturing Big data
UTC Innovation
Additive Manufacturing
Modification of
design CAD/CAM part
discretization
AM of
customized design
Selection of
materials
Selection of
AM process
Cold
spray Laser
powder
melting
Electron beam
wire melting
Examples
WAAM
Wire Arc
Additive
Mfg.
Willis
Carrier Elisha
Graves Otis Fred
Rentschler
Thomas
Hamilton Fred
Rohr
Our Future
Future Innovator
Future Innovator
UTC Innovation
This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
PRODUCT SUSTAINABILITY AND INNOVATION
William Sisson, Sr. Director, Sustainability
UTRC
UTC Proprietary - This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
SUSTAINABILITY AT UTC
Sustainability at UTC means
we can do good for the
planet while doing good for
our customers,
shareholders, employees,
and communities.
UTC Proprietary - This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
SUSTAINABLE PRODUCTS
UTC Proprietary - This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
HOW UTC INNOVATES AND DEVELOPS
ACE* is our Operating System
*Achieving Competitive Excellence
UTC Proprietary - This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
PRODUCT SUSTAINABILITY GOALS 2020
Rigorous Implementation
Engineering Methods and “Standard
Work”
Integrated into ACE Passport
Tailored to Business Needs
100% Implemented by 2020
Change the Culture
(DfS and LCA)
UTC Proprietary - This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
KEY DfS ATTRIBUTES
Adapt to UTC’s Product Diversity
Design for Sustainability (DfS)
UTC Proprietary - This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
LIFE CYCLE ANALYSIS
“Cradle to cradle”
assessments
Identifies DfS Attribute
Priorities
Customer/Market
Requirements (e.g. EPD
certifications)
Tailored to BU/Customer
Requirements
UTC Proprietary - This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
SUPPLIER IMPACT
Maps into Supply Chain Goals
UTC Proprietary - This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
UTC 2020 SUSTAINABILITY GOALS
UTC Supplier Gold Timeline
Supplier commitment over time
UTC Proprietary - This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
MOC’S AND REACH
Chemical Regs Evolving Simultaneously
UTC Proprietary - This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
EU REACh
EU law banning use of certain substances inside the EU on sunset dates
“Safe use documents” required for shipping articles into EU over 0.1% SVHC content
Affects all commercial / military / industrial programs
UTC designed hardware
Supplier-designed hardware
In process manufacturing
Overhaul and repair
Tooling
Registration, Evaluation, Authorization, and Restriction of Chemicals
REACh Is Not Industry or Product Specific
137
31
"Safe use" document only
Will be banned from use in EU
Substances of Very High Concern
168 substances requiring “safe use” docs*
*Increased from 16 SVHCs in 2008; will continue to grow
UTC Proprietary - This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
HOW DOES IT WORK?
Hexavalent Chrome Banned Starting Sept 2017
1. Any ARTICLE with >0.1% SVHC
RECEIVED in EU from anywhere
must include a SAFE USE
DOCUMENT
2. ANY SUBSTANCE PAST its
SUNSET DATE cannot be used in EU
sites (BANNED)
The ONLY exception is the application
for and granting of an
AUTHORIZATION to extend the
SUNSET DATE
168
substances
31
substances
90
SVHC: Substance of Very High Concern
UTC Proprietary - This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
BUSINESS IMPACTS
Financial Penalties
Supply Chain Disruptions
Obsolescence of Substances
High Implementation Costs
Compliance
Development and Validation of New Substances
REACh Threatens Business Continuity
UTC Proprietary - This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
MITIGATION PLANS
Senior Executive Oversight
Regulation Monitoring and Lobbying
Map all SVHC uses and associated Manufacturing Landscape
BOM/Spec/Repair Reviews
Supplier Surveys
Partner with Industry to submit Authorizations
Develop and Validate Alternate Substances
Implement IT Sustainability Tools
Across UTC BU’s
REACh Requires Full Supply Chain Understanding
UTC Proprietary - This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
SUPPLIER HELP NEEDED
Understand the regulation and supply chain impacts
Comply with regulation
Respond to supplier surveys/information needs
For Design Authority Suppliers:
Ensure products have Authorization coverage
Substantiate new formulations in your products
Active Engagement and Responsiveness
We Must Work Together To Succeed
UTC Proprietary - This document contains no technical data subject to the EAR or the ITAR
U T C │ U T C A E R O S P A C E S Y S T E M S │ P R A T T & W H I T N E Y │ O T I S │ U T C C L I M A T E , C O N T R O L S & S E C U R I T Y
QUESTIONS?
William Sisson – UTC/UTRC Sr. Director,
Sustainability and REACH
sissonwm@utrc.utc.com
Catarina Rodrigues – UTC Supplier Dev.
Catarina.Rodrigues@utc.com
European Chemicals Agency (ECHA)
http://echa.europa.eu/
Mark Bittar – P&W US
mark.bittar@pw.utc.com
Reach.Compliance@pw.utc.com
Michele Lewis – UTAS
Michele.lewis@hs.utc.com
Helio Tinone – Otis/CCS
Helio.Tinone@otis.com
