aar defense systems & logistics
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2011 North Carolina Aerospace Suppliers ConferenceTRANSCRIPT
®
1
AAR Company Overview
Presented to: NC Aerospace Suppliers
Conference August 24, 2011
4Q FY2011
► Leading provider to commercial aviation and
government/defense customers
► Incorporated in 1955 — Only two CEOs in
Company’s history
► Track record of consistent profitability
► 16% Sales CAGR over last five years
► 6,400 employees at more than 60 locations,
worldwide
► Highly experienced leadership from
commercial and military
► Diverse markets, customers and products
> 48% Commercial — 52% Government
> 85% North America — 15% International
> 77% Aftermarket Services —
23% Manufacturing & Integration
AAR Overview
2
AAR Global Presence
GOVERNMENT &
DEFENSE SERVICES
Adelaide, Australia
Al Dhafra, UAE*
Afghanistan (6 sites)*
Burkina Faso
Cherry Point, North Carolina*
Chicago, Illinois
Eindhoven, Netherlands*
Ft. Worth, Texas*
Greensboro, North Carolina
Havelock, North Carolina
Indianapolis, Indiana*
Jacksonville, Florida*
Lake Charles, Louisiana*
Macon, Georgia
McGuire AFB, New Jersey*
Melbourne, Florida
Nash, Texas
Ogden, Utah
Oklahoma City, Oklahoma*
Palm Bay, Florida
San Diego, California*
Scott AFB, Illinois*
AVIATION SUPPLY
CHAIN
Abu Dhabi, UAE
Amsterdam, Netherlands
Atlanta, Georgia*
Chicago, Illinois
Garden City, New York
Hannover, Germany*
London, England
Manamah, Bahrain*
Melbourne, Australia
Paris, France
Phoenix, Arizona*
Rio de Janeiro, Brazil
Shanghai, China
Singapore, Republic
of Singapore
Teterboro, New Jersey
Tokyo, Japan
Toronto, Canada*
Zhuhai, China*
* Co-located with customer facilities
GOVERNMENT &
DEFENSE SERVICES
Travis AFB, California*
Virginia Beach, Virginia*
Waddington, England*
Warner Robins, Georgia*
Windsor, Connecticut
Western Pacific (Guam)
MRO FACILITIES
Auburn, Washington*
Hot Springs, Arkansas
Indianapolis, Indiana
Kuala Lumpur, Malaysia
Miami, Florida
Oklahoma City, Oklahoma
STRUCTURES &
SYSTEMS
Cadillac, Michigan
Chicago, Illinois
Clearwater, Florida
Cullman, Alabama
Fayetteville, North Carolina
Goldsboro, North Carolina
Huntsville, Alabama
Lebanon, Kentucky
Melbourne, Florida
Memphis, Tennessee
Sacramento, California
Williamsburg, Virginia*
Diversified Revenue Stream
4
$0M
$200M
$400M
$600M
$800M
$1,000M
$1,200M
$1,400M
$1,600M
$1,800M
FY2006 FY2007 FY2008 FY2009 FY2010 FY2011
Aviation Supply Chain Maintenance, Repair & Overhaul Structures & Systems Government & Defense Services
Solid Financial Performance — 35% year-over-year growth.
$886M
$1,061M
$1,385M $1,424M $1,352M
$1,776M
5
A Sampling of AAR Customers
Airlines OEMs & MROs Cargo
Government
NATO
U.S. DoD
U.S. TRANSCOM
U.K. MoD
6
Our People — Recognized for Excellence
AAR has earned a leadership position for its support of
both commercial aviation and national priorities.
Boeing Gold
Performance
Excellence Awards
Forbes
Most Trustworthy
Companies
Secretary of Defense
Performance-Based
Logistics Award
Top 100
Military-Friendly
Employers
FAA
Diamond
Award
7
Total Support for Aerospace & Defense
Aviation Supply Chain Supply Chain Management
Aircraft & Engine Parts
Aircraft Sales and Leasing
Component Repair
Maintenance, Repair
& Overhaul Aircraft Maintenance/Mods
Engineering Services
Landing Gear, Wheels and
Brakes
Field Services
Government & Defense
Services Airlift Support
Logistics Services
Communications Technologies
Aircraft Modifications
Structures & Systems Mobile Shelters
Containers and Pallets
Machining Services
Cargo Systems
Diverse capabilities for commercial aviation, government and defense.
AAR Facilities in North Carolina
• Cargo Systems Goldsboro
• Mobility Systems Goldsboro &
Fayetteville
• Defense Systems Greensboro &
Havelock
AAR Defense Systems and Logistics (DS&L)
- Military Performance Based Logistics
►The AAR Team
● Experienced foundation in commercial / military aviation
● Retired Military aviation logisticians
● Understand O/I/D maintenance/supply functions
● Motivated by Performance Based Logistics (PBL)
►Our product is our Logistics Service
● Quality people are essential
● Mission oriented focus
►We are good at Integration
● Bridging the gap – Commercial / Government support
● Industry / Government Team work
9
DS&L’s Role within PBL contracts
►AAR provides 3rd Party Logistics (3PL) support services
to our OEM customers
● Military logistics background
● Depot / Fleet / ICP / OEM Interfaces
● IT Systems integration - interfaces
● Requisition Response
● Material forecasting
● Warehousing
● Transaction Item Reporting (CAV/SIT)
● Transportation/Freight/local delivery/ITAR
● Expediting
10
AAR DS&L … and PBL’s
►What we like about PBL’s
● Contractor is incentivized to improve availability/reliability
for their systems, not just selling more parts
● Good for the War Fighter
● Good for the Tax Payer
►The ―Headache‖ is the painfully slow process of award
● Original PBL concept was to keep it simple and ―buy the
watch‖ - One metric – Availability at a lower cost
● That vision has become blurred, contracts complicated
● Difficult to keep an OEM interested in playing in the
sandbox
11
®
12
Thank you for your time today.
Let us know how we can contribute to your
success.
John Hannaford
Regional Director, Military Programs
AAR Defense Systems & Logistics