UBS Investment Research

UBS UBS Investment Research UBS Business Jet Update N America Continues to Bounce Off Bottom ■ Q1 N America deliveries up 11%, W. Europe up 23% While overall QI bizjet delivery levels were up only marginally from the prior year, our analysis by region reveals that developed markets continue to recover with deliveries up 11% y/y in N America and 23% in Western Europe. N America deliveries are now up 14% over the past year with W. Europe up 10%, although declines in Eastern Europe, Asia (ex-China) and Middle East have mostly offset. ■ Ql small cabin deliveries higher, mid/large lower Total QI deliveries grew by 2% with small cabin leading the way up 16% mostly offset by 4% decline for large cabin deliveries and 3% decline for midsize. On a rolling 12 month basis overall deliveries are up 2% with small up 17%, midsize up 6% while large is off 10%. Small and midsize deliveries are still 50.60% below peak levels in 2007-08 while large cabin is only 5% off. ■ TXT/COL most levered to N America bizjet recovery While up 20% off bottom, deliveries into N America are still 45% below peak levels with small/mid accounting for most of the decline. Of the manufacturers, Cessna, with 60-70% of its deliveries and installed base in N America, is most levered to a recovery in North America bizjets. ■ See positive risk-rewards for stocks We believe N America bizjet is improving driven by replacement demand postponed during the downturn. While the bizjet stocks have moved higher, we still see positive risk-rewards as we don't think stocks incorporate much for bizjets at current levels including Buy rated TXT/COUGD. Chart 1: Business Jet Deliveries by Quarter (Ex VLJs) 40% 30% 20% 10% - 0% (10%) - (2d%) - (30%) - (40%) - (50%) 8 8 8 8 =-2 9 Source: ASCEND Global Equity Research Americas Aerospace Sector Comment 9 May 2012 twat ubs.cominvestmentresearcii David E. Strauss Analyst david.strausupubs.com +1-212.7136185 Darryl Genovesi Analyst darrybaenovoseubs.com +l412.7134016 Matthew Akers Associate Analyst [email protected] +I.212.7134881 This report has been prepared by UBS Securities LLC ANALYST CERTIFICATION AND REQUIRED DISCLOSURES BEGIN ON PAGE 19. UBS does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. EFTA01177227 UBS Business Jet Update 9 May 2012 Ex VLJs, Q I global bizjet deliveries increased by 2%, driven by double-digit growth in both North America (+11%) and Western Europe (+23%), mostly offset by declines in Asia ex-China (-50%) and Latin America (-25%). Chart 2: North America Deliveries by Quarter (Ex VLJs) Chart 3: Western Europe Deliveries by Quarter (Ex VLIs) 40% - 20% (20%) (40%) (60%) -11;1)4''1111111go= b eb, b60% 40% 20% 0% (20%) (40%) (60%) (80%) 0. g g g b b b b Source. ASCEND Source: ASCEND Chart 4: Emerging EMEA Deliveries by Quarter (Ex VLJs) Chart 5: China & India Deliveries by Quarter (Ex VLJs) 120% 100% 60% 60% 40% 20% 0% (20%) (40%) (60%) b b b 500% 400% 300% 200% 100% 0% (100%) (200%) 0 b Wm, Ca b Source: ASCEND Source: ASCEND Chart 6: APAC Other Deliveries by Quarter (Ex VLJs) Chart 7: Latin America Deliveries by Quarter (Ex VLJs) 150% 100% 11 N 120% 100% 80% 60% 40% 20% 0% (20%) (40%) (60%) (80%) I N Source: ASCEND Source: ASCEND UBS 2 EFTA01177228 UBS Business Jet Update 9 May 2012 Longer Term Regional Trends (Ex VLJs) We estimate that business jet industry deliveries have moved 44% lower through the downturn from -1,000 deliveries at the peak in 2007-08 (ex VLIs) to -550 now. Deliveries into North America (ex VLIs) have fallen from -550 at the peak in 2007-08 to -300 now, accounting for the majority of the overall decline. Meanwhile, annual deliveries into Europe have fallen from nearly 300 to roughly 100 now, while growth in China and India has offset declines in the rest of the Asia-Pacific region. Chart 8: Change in Unit Deliveries L12M vs Peak (Ex VLds) Chart 9: % Change in Unit Deliveries L12M vs Peak (Ex Ms) 100 - 0 40% - 20% - (100) - 0% (200) - (20%) - (300) - (40%) - (400) - (60%) (500) - (80%) North WestemEmergingChina & APAC Latin Total All North WestemEmergingChina & APAC Latin Total All America Europe EMEA India Other America ex VU America Europe EMEA India Other America ex VU Source: ASCEND and UBS estimates Source: ASCEND and UBS estimates Following two years of large declines, we estimate business jet industry deliveries have grown 2% over the last 12 months (ex VLIs), led by 13% combined growth in North America and Western Europe while the rest of the world declined by 17% in aggregate with Eastern Europe and the Middle East accounting for most of the decline. (Please note that our analysis excludes Embraer Legacy and Lineage deliveries, which account for roughly 2-3% of total industry deliveries.) Chart 10: Unit Delivery Growth by Region (Ex VIAls) (100) - (150) - (200) - (2501 - 2008 2009 2010 2011 112M ■ Noah America ■ Western Europe Emerging EMEA ■ China & Inch ■ APAC Other Latin America Source: ASCEND and UBS estimates UBS 3 EFTA01177229 UBS Business Jet Update 9 May 2012 Small and Midsize Trends (Ex VLJs) Small and midsize aircraft have accounted for nearly the entire delivery decline since the prior peak in 2007-08 with all regions below prior peak levels. Chart 11: Change in Unit Deliveries L12M vs Peak (Small/Mid) Chart 12: % Change in Unit Deliveries L12M vs Peak (SmallMid) 0 (1(00)50) (150) (200) (250) (300) (350) (400) (450) ' • • • North Western Emerging China 8 APAC Lath Total America Europe EMEA India Other America Srngl & Midsize Source: ASCEND and UBS estimates 0% (20%) (40%) (60%) (80%) (100%) Nom WestemEmerging China 8 APAC Latin Total America Europe EMEA India Other America Small & Midsize Source: ASCEND and UBS estimates However, after declining in 2009-10, small/midsize deliveries now look to be recovering, led by growth in North America, Latin America and Western Europe. Over the last 12 months, we estimate small cabin deliveries have grown 17% globally with midsize up 6%. Chart 13: Unit Delivery Growth by Region (SmalUMidsize) 100 - 50 - 0 (50) - (100) (150) - (200) - (250) - !mom .- 2008 2009 2010 2011 L12/41 • North America ■ Western Europe Emerging EMEA • China 8 India • APAC Other Latn America Source: ASCEND and UBS estimates UBS 4 EFTA01177230 UBS Business Jet Update 9 May 2012 Large Cabin Trends Large business jet deliveries have held relatively flat through the downturn as growth in Asia has mostly offset declines in North America and Europe. Chart 14: Change in Unit Deliveries L12M vs Peak (Large) Chart 15: % Change in Unit Deliveries L12M vs Peak (Large) so 4o 30 20 10 0 (10) - (20) - (30) - (40) (50) - U North We stern Emerging China & America Europe EMEA India 700% 600% 500% 400% 300% 200% 100% 0% (100%) APAC Lath Total North WestemEmerging China & APAC Latin Total Other America Large America Europe EMEA India Other America Large 1 Source: ASCEND and UBS estimates Source: ASCEND and UBS estimates While stnall/mid deliveries appear to be recovering, large aircraft deliveries have moved 10% lower over the past 12 months as modest growth in North America, Western Europe and China has been more than offset by declines in the rest of the world. By manufacturer, the decline is attributable to Dassault and Bombardier with Gulfstream 450/G550 deliveries up modestly. Chart 16: Unit Delivery Growth by Region (Large) 50 40 30 20 10 - a (10) - (20) - (30) - (40) - (50) - 2008 2009 2010 2011 L12M • North America ■ Western Europe Emerging EMEA • China & India ■ APAC Other Lain America Source: ASCEND and UBS estimates UBS 5 EFTA01177231 UBS Business Jet Update 9 May 2012 We estimate deliveries into North America now account for 53% of overall industry deliveries, slightly lower than the peak in 2007-08. Latin America, China/India have grown as a portion of total deliveries at the expense of a smaller market in Western Europe. Chart 17: Total Bizjet Deliveries by Region- Last 12 Months Chart 18: Total Bizjet Deliveries by Region — Peak (2007-08) APAC Oder Latin America 2% China & India 8% Emerging EMEA North America 8% 53% Western Europe 16% 13% APAC Other China & India 2% 3% Emerging EMEA 8% Western Europe 24% Latin America 7% North America 56".6 Source: ASCEND: Note: excludes 10 aircraft where delivery location is unknown Source: ASCEND: Note: excludes 19 aircraft where delivery location is unknown We think a recovery in the smalUmidsize market will be driven by N. American replacement demand as North America still represents more than two thirds of combined smalUmidsize market despite 50-60% decline from peak levels. Chart 19: Small/Midsize Deliveries by Region - Last 12 Months Chart 20: Small/Midsize Deliveries by Region - Peak (2007.08) APAC Other 0% China & India 4% Emerging EMEA 4% Western Europe 12% Lath America 15% North America 65% APAC Other China & India 2% Leon America 4% 7% Emerging EMEA 7% Western Europe 21% North America 57% Source: ASCEND: Note: excludes seven aircraft where delivery location is unknown Scarce: ASCEND: Note: excludes nine aircraft where delivery location is unknown Emerging markets (ex N. America and W. Europe) now account for 39% of annual large cabin deliveries compared to only 26% at the peak of the last cycle. Chart 21: Large Cabin Deliveries by Region • Last 12 Months Chart 22: Large Cabin Deliveries by Region - Peak (2007-08) APAC Other Lath America 4% 9% China & India 13% Emerging EMEA 13% Western Europe 25% North America 36% APAC Other Latin America China & India n 2% Emerging EMEA North America 13% 47% Western Europe 27% Source: ASCEND: Note: excludes three aircraft wtrere delivery locaton is unknown Source: ASCEND: Note: excludes ten aircraft where delivery location is unknown UBS 6 EFTA01177232 UBS Business Jet Update 9 May 2012 Bombardier Chart 23: Change in Unit Deliveries L12M vs Peak (Bombardier) Chart 24: % Change in Deliveries L12M vs Peak (Bombardier) 0 (20) - (40) - (60) - (80) - (100) — 250% 200% 150% 100% 50% 0% (50%) (100%) " North Western Emerging China :PAC Other Latn Total North WestemEmerging China &PAC Other Latin Total America Europe EMEA India Americaombardier America Europe EMEA kidia AmericSombardier Source: ASCEND and UBS estimates Source: ASCEND and UBS estimates Chart 25: Unit Delivery Growth by Region (Bombardier) 20 - 10 - 0 (10) (20) — (30) — (40) - (50) - 2008 2009 2010 2011 L12/44 • North America • Western Europe Emerging EMEA • China & hdia • APAC Other Len America Source: ASCEND and UBS estimates Chart 26: Bombardier Deliveries by Region - Last 12 Months Chart 27: Bombardier Deliveries by Region - Peak (2007-08) APAC Other 3% China & India 10% Emerging EMEA 7% Western Europe 23% Latn America 9% North America 48% 2% Emerging EMEA 12% Western Europe 18% APAC Other China & India Latin America 4% North America 61% Source: ASCEND Source. ASCEND UBS 7 EFTA01177233 UBS Business Jet Update 9 May 2012 Cessna (Ex Mustang) Chart 28: Change in Unit Deliveries L12M vs Peak (Cessna) Chart 29: % Change in Unit Deliveries L12M vs Peak (Cessna) 0 (50) (100) (150) (200) 0% (20%) - (40%) -- (60%) - (80%) - (100%) - (120%) - 111North Western Emerging China & APAC Latin Total North WestemEmerging China & APAC Latin Total America Europe EMEA India Other America Cessna America Europe EMEA India Other America Cessna Source: ASCEND and UBS estimates Source: ASCEND and UBS estimates Chart 30: Unit Delivery Growth by Region (Cessna) 40 - 20 - 0 (20) — (40) (60) (80) (100) (120) (140) — 2008 2009 2010 2011 L12M North America ■ Western Europe Emerging EM EA • China & India ■ APAC Other Latin America Source: ASCEND and UBS estimates Chart 31: Cessna Deliveries by Region - Last 12 Months Chart 32: Cessna Deliveries by Region - Peak (2007-08) APAC Other China & India 0% 1% Emerging EMEA 4% Western Europe 10% Latn America 13% North America 72% APAC Other 2% China & India 2% Emerging EMEA 6% Western Europe 26% Latin America 8% North America 56% Source: ASCEND Source: ASCEND UBS 8 EFTA01177234 UBS Business Jet Update 9 May 2012 Dassault Chart 33: Change in Unit Deliveries L12M vs Peak (Dassault) Chart 34: % Change in Unit Deliveries L12M vs Peak (Dassault) 600% - 500% - 400% - 300% - 200% - 100% - 0% (100%) - (200%) - North Western Emerging China & APAC Latin Total North WestemEmerging China & APAC Latin Total America Europe EMEA India Other America Dassault America Europe EMEA India Other America Dassault Source: ASCEND and UBS estimates Source: ASCEND and UBS estimates Chart 35: Unit Delivery Growth by Region (Dassault) I- U- 2008 2009 2010 2011 L12M • North America ■ Western Europe Emerging EMEA • China & India ■ APAC Other Lath America Source: ASCEND and UBS estimates Chart 36: Dassault Deliveries by Region - Last 12 Months Chart 37: Dassault Deliveries by Region - Peak (2007-08) Latn America 13% APAC Other 0% China & India 9% Emerging EMEA 19% North America 24% China & India 1% Emerging EMEA 8% Western Weslem Europe Europe 35% 38% APAC Other 1% Latin America 10% North America 42% Source ASCEND Source: ASCEND UBS 9 EFTA01177235 UBS Business Jet Update 9 May 2012 Gulfstream Chart 38: Change in Unit Deliveries L12M vs Peak (Gulfstream) Chart 39: % Change in Unit Deliveries L12M vs Peak (Gulf stream) 20 10 0 (10) (20) (30) (40) (50) (60) ■ North Western Emerging China & APAC Latin Total America Europe EMEA India Other AmericaGulistream 2000% 1500% 1000% 500% 0% (500%) North WesternEmergingChina & APAC Lath) Total America Europe EMEA India Other AmericLulfstream Source: ASCEND and UBS estimates Source: ASCEND and UBS estimates Chart 40: Unit Delivery Growth by Region (Gulfstream) 15 - 10 II 5 - 0 (5) (10) - (15) (20) - (25) - (30) 2008 2009 2010 2011 L12M • North America • Western Europe Emerging EMEA • China & India • APAC Other Latin America Source: ASCEND and UBS estimates Chart 41: Guttstream Deliveries by Region - Last 12 Months Chart 42: Gulfstream Deliveries by Region - Peak (2007-08) Latin America 12% APAC Other 5% China & India 18% Emerging EMEA 7% Western Europe 9% North America 49% APAC Other China & India 3% IS America 1% 8% Emerging EMEA 8% Western Europe 23% North America 57% Source: ASCEND Source: ASCEND UBS 10 EFTA01177236 UBS Business Jet Update 9 May 2012 Hawker Beechcraft Chart 43: Change in Unit Deliveries L12M vs Peak (Hawker) Chart 44: % Change in Unit Deliveries L12M vs Peak (Hawker) 0 (20) - (40) - (60) - (B0) - (100) - (120) - (140) — North Western Emerging China & APAC Latin Total America Europe EMEA India Other America Hawker Source: Chart 0% (10%) (20%) (30%) (40%) (50%) (60%) (70%) (80%) (90%) North Western EmergingChina & APAC Latin Total America Europe EMEA India Other America Hawker SCEND and UBS estimates Source: ASCEND and UBS estimates 5: Unit Delivery Growth by Region (Hawker) (5) (10) (15) (20) (25) (30) - (35) - — (40) -- 2008 2009 2010 2011 L12M • North America • Western Europe Emerging DJ, EA • China & hdia • APAC Other Len America Source: ASCEND and UBS estimates Chart 46: Hawker Deliveries by Region - Last 12 Months Chart 47: Hawker Deliveries by Region - Peak (2007-08) APAC Other Len America 2% China & India 'I 11% 7% N I I IN Emerging EMEA - 9% North America Western 60% Europe J tt% Lath America APAC Other 9% 3% China & India 10% Emerging EMEA 8% Western Europe 20% North America 50% Source: ASCEND Source. ASCEND UBS 11 EFTA01177237 UBS Business Jet Update 9 May 2012 Table 1: Deliveries by Cabin Class and Region LY 06A51 VW 22/1 2002 2003 2003 2005 2006 2007 200 2403 2010 2011 2211 3011 4011 1012 2030 100 2090 NII L101 11241 as Peal two sow* I I IN 139 72 47 13214 07161 (42%) I7'. 60% A%) (41%) 73588 129%) Mans Even 13 3416 16 9 178%1 07%4 (V%) 08,- 162% 6% 0% 778%) 47388 71%i Elmore DEA 11 10 9 3 0061 a era 10(3% 49%1 (10%) V%) 2%) Om/ S MI 0 0 0 4 3 10% no (47%) n a 6% 80 nh 625%) 05%) MAC 020 2 3 2 (1 3 000%l 115 (67%) % 50% 13)% (14%) en) 57%) 2 L41049.00 10 22 33 48 18 ti 0% (an (33%. 120% 50% 3% $1%) 63%) 77Y VW 144 291 35 171 63 RN am CNN 0%) 30% 03%) 03%3 02%) NMI 471%) 516411 9301 2002 1003 2004 2005 2006 2007 2003 2403 2610 2311 uni 2011 3011 4011 1012 2031 2039 2010 011 LIM 1.1214,83831 Nub Mow, 296 295 193 204 02 242 34 221 97 101 130 10 0% 43% I% 3f.a. (13%, 06%) 6% 26% II% Moto twee 55 56 35 36 50 76 90 106 55 15 19 0% 33% 43% 1(0% $11) 07%) 27% 40% giN (none PEA 10 6 4 10 13 18 20 25 II 8 Ohl 6% 0% 119)%i 11% 25% en) ON (50%) olro Amu APACOht,I 3 0 6 0 3 9 2 6 4 5 6 16 6 10 (1 1 9 I 2 2 0 a 00NI a n5 non (1011%1 11:0,:d nb 651E 0% 431.%) 50% 0% (NV 103% 110)54 00%) OOP* 1(11 UM Ant, co 33 24 IS 14 17 27 36 25 Ii 18 le 287% 150% (10%) (4)8:"(31%) 02%) 6% 94% 50% 70413404 303 NI SG 266 313 246 410 193 III ISO 194 92% 55% IN 16% (8%) (5344 (an 29% 17% 02%) mon 23(4 2302 2303 2044 2305 NN 2007 23(4 NW 2010 200 11211 2011 3011 ton ion 2031 MN 2010 2011 LINA 1.12118.11021 Nom Sawa 134 102 96 IN 146 III IV 94 46 77 0394 41% 26% 6% m Ra.) 03%) 13% 15% 611.i Yletom twee 17 26 4 44 (A SI 21 21 18 i73%; 87% 125% ,5,%, 4% 52%) (32%) 0% 6% 71%i Engrg Eno 6 IT 25 N 30 IS I :2594 1140%1 03%) n 20% 0% CA) (71%) (13%) one IN4 13 0 I4 15 12 na 40% (0%) 11:0,:d 84% PM) 75% 7% ($4%) 261.1 MAC 020 4 2 6 12 5 4 na (160%l (10)%l 0% 50% el%) 020%) (75%) 05%) 17% LAX Anne 3 II 13 27 21 19 17 17 • 0* 01 33% 0% In% eh/ (%1 31% 42% TOW 00t6 ITS 113 1 IN 213 233 282 331 IN 131 135 IX 0%) 41% (2%) IN) 20% XI%) (NV 2% 6% 01%) 16196 ON 2002 2064 2004 NN 2666 2)07 220 NW 2019 2311 LIM 20111 3011 tan 90)2 MX MN 2010 NII 1101 LIM ts Peal two Ana 142 1 4 92 90 101 107 III 120 106 II 67 21%( 5% 63% (17% 5% (1D%) IVO 7% 6% Wtoto Enet 23 6 20 2/ 30 46 53 V) 48 (4 $2 131%1 17%) 22% 87% 23% 803/ 33%0 lee t • % Errol* ELEA is 6 12 IS IS 18 26 32 43 II (32161 07%2 44% 23% X% 0%) 431%) CanallxIa I I 1 1 5 6 2 17 23 27 (79%) MO% 11% i!smo 7509. 35% 17% 26% MAC OM 3 2 0 3 4 7 1 8 14 10 07,4 no% 03%) t14%1 33% 75% et%) (40%) Lalnlineica 6 1 7 ? 12 II 20 16 22 35 22 144%) (75%) (42%) 11'. izr.v, 34% 59% 137811 HMI tr. TOW Lags 191 I 121 IN 162 193 215 2N 235 260 229 79 I PM 3% IN 14%i II% '2%) 11% 02%) (646) 0%1 ON NW 2003 2004 2006 2006 NW 200 2403 2010 2011 LIN 24711 3011 ton 1012 006 2039 2010 2011 LIM 1123111 114818 Nam Ana 572 521 IN 402 470 933 Wt,722 08 322 111 348 11904 20% 5% 18. 8% 99%i +26%1 6% 5% Vitoto twee 94 96 66 82 10$ 07 3)0 273 150 136 1131 103 (16%) IN 5% 13% 37% 045%) an) (11%) 814 Errol* Ono 29 19 15 22 42 44 62 II 97 73 44 6614 (13%) (6N) 48. 40% II% 90%) (4I%) 435%) Oyu 41104 6 4 3 5 II 12 19 25 3 42 47 a 13% MO% (33%) 02. 32% 4% 62% 12% 5% 41% MAC Oho n * 11 a a 25 23 27 29 a) 14 13 170/4 33% (73%) eiS% 17% 7% (10%) 06%) 154%) 82%i 1.4/84/%489 41 46 24 24 10 SI 73 90 93 112 92 37 i2310 10% e26%) 14% 3% 20% (10%) 09%1 TOW MI 751 702 505 511 870 032 1451 1214 833 TN 641 64 01%) 16% 0%) I% 16% (37%) 04%) (10%) Ohl 54,%) ?JOIN 2301 2002 2003 2004 2005 2006 2007 2003 2003 2010 2011 LVM 1011 Kill 4011 1012 2(40 MN 2010 NII LIM on nook 11301 Anne 522 521 3241 402 470 9)) 950 533 24/ 250 214 300 115%) 23% 23% II% (I%) 111%) (11%) 1%14% 111%I Moto hope 94 16 66 42 lel 167 47 233 114 100 (2te(33%) IOW 41% 23% 2% 52%) 02%) (6%) 10% Errol* *EA 29 19 15 22 42 44 GI 1667 69 t3 CNN 97%) 00%) 0% 75% 14% 91%) 3454) Cam 41.44 6 4 3 5 11 12 19 25 26 N 4412 % 40% C35%) 02%,32% 4% 46% 16% 8% 31% MAC Oho I1 * II 9 9 25 21 24 22 20 $1 10 (0%1 33% (75%) $1%,/4% (N) (1)%1 I45%) 52%) tom Anon 47 46 24 24 40 51 49 (8 0 46 74 70 43% 13% (20%) 0%) 02%) 10% 12% 0%1 i14%1 Tool Mona In 702 SOS 541 83 lel 037 NS (43 54 558 NI 10%1 21% 3% 2% % 07%) (01%) 3% 3% (41%) Source: ASCEND and UBS estimates UBS 12 EFTA01177238 UBS Business Jet Wale 9 May 2012 Table 2: North American Deliveries by Manufacturer and Model 1.34119440 41440444.4 2601 1022 2013 2004 NOS ?(40 1107 1036 200 2310 2011 LIM za11 3011 4011 1012 14:01 1021 2010 2011 LIN Wm .4 L€0031 II 9 2 0 0 C 0 0 0 0 ( 0 0 0 no na rci Ma no Da nb 1.€084245 44 X I? 29 34 35 33 33 21 12 20 12 (10754 0% WO% 1F3t: I3%) 0511 µKt 671 14094 14000 27 II 13 4 7 4 12 11 5 ? 7 6 at0% 0% 03%: 17% (64%) 40% 0% 114%1 C44124,*491) 0 0 I IS 35 34 93 37 25 20 25 25 0% 47% a% 0% 0%) (32%) (20%1 25% 19% 31% CriltapitE00146 24 20 I9 II 13 IS 13 21 17 12 21 00%) 67% 350% 20% 05% 09%) (204117% 57% Gted 5:03 0 0 0 I B 6 10 B 10 2 4 2 nu aa (103%) 000: CO%) 25% 250%1 WO% 00%1 01.043400005 17 13 6 2 7 4 14 Ii 11 6 3 0 100% 0% 0)1: .21%) 24 545%1 33% 401 Toul Bombattlot 126 93 51 72 104 102 126 In 89 59 66 74 (In) 50% 52% 09%1 5% (33%) (224) 44% 4% (439.0 Covina 101 1032 200 304 200 3101 2037 100 2301 2010 2011 LIM 2011 3011 0311 14012 2400 2009 2410 2011 UM 1.1111,4140 1.134W9 0 0 0 0 0 I 2044 76 35 $2 SI 25% 40% 144•01 224. 57% 77% 455%1 0%1 111%) 04%) CJI II 20 II 16 10 II 2013 5 3 2 2 0 0 (140%) na 9150 01%1 00%1 133%1 0% Ma%) 30 05 45 la 13 25 r 2a 13 11 7 11 (11:07.1 100% 111%1 na 27% 01%) (15%1 136%1 22% 084 013 0 0 0 B 43 SI 52 52 23 IS IT 21 00%) 100% 29% gen. 1430(54%) 435'0 13% 31% 8154 CN 0 0 0 0 0 0 0 0 0 16 22 33 930% 40% 6% 63% nb nt nu 74% 57% at 21148/10:re 71 65 4 II 20 19 1? 27 3 5 3 3 (140%) MB 11(0%) no 59% 10%) 62% 140* 125* 053%1 30031.5 46 3031 43 44 41 0 3) II 12 at 200)% its%) In 1W 0354 (43%) 433%1 50% 43% .31%) 50883 0 0 0 W 33 45 43 43 15 5 13 12 0% MD% BO% iscrc: 0% (65%) 467%! 160% 71% C01014 202014 11 II 6 12 14 5 3 2 5 at at101%1 n% 17% (84%) (40%l 03%1 67% 4438 1441040 235 239 IN 143 174 207 237 249 la 107 126 141 In 0%) 94% 6% (X%) (31%) In 25% 020 Conalon 2001 1302 20/3 200 200 201 2/07 20)1 NO 2010 2011 1.1211 tom 3011 4111 1012 20)$ 00 2010 2111 1.1111 01.61041 8423493 10 9 7 4 4 2 2 I 0 0 0 0 at Na Wa no i8)%4 040%1 nu no 011 ?WM cal:06903 ITII B 10 6 a 9 II B 9 3 3 003%1 03%) 1504I na 221 07%) 13% 117%1 1504 .73.1 Caton 2030 3 2015 23 20 20 IS 12 B 9 ID 10 (10041 00%) zsm 0% 42041 03%) 13% 11% 0%) .23%1 300.7% 0 0 0 0 0 0 2 7 8:4 10 3 3 (10)%4 00%) 03%1 no 29)% 45% 0% 000 phi 70104040A Si al 91 97 20 20 20 31 M X 16 IS 1101%1 la) 41% 11% 04%) 5% 143.1 01%1 (4%) berm 1001 10)2 2003 2004 200 20042031 NS 2000 2010 2011 UM 2011 3011 0311 1012 2440 230 2010 2011 (1211 1.101•61041 Phinyn ICO 0 0 0 0 0 0 0 2 57 37 14 16 (73%) 157%) 147%1 An at 2793% 05%1 2241 224i at Alvan 330 0 D 0 0 0 0 0 0 I 12 XX 67% 2004 50% 2:0. nY nu I1M 63% %COY Tout Embur 0 0 0 0 0 0 0 2 51 09 36 C 443%) 0% OM 300% nB 2100% (16%) 127%l na 3410444 XVI 2032 Win 204 2005 XIX 2037 006 2309 2010 2011 2Q11 2011 4011 1012 MX MX 2010 2011 LIM Wm41140 0100193 7 6 3 6 4 3 22 I? 10 5 6 6 81%) 0% 330% na czno (41%) (50%! 20% 20% 0.3)0240 25 12 21 17 10 II 21 21 4 3 3 3 atat167%1 0% 0% (01%) 25%1 0% 14241 03)0393 0 0 5 2 0 2 1 0 0 0 0 0 atat414 no OWN .99 MO no nt rmi G00)450 3027 II 14 IT 27 r 26 25 16 20 I? ZO% 433%)230% Xi% 0.0 06%1 8% 21% GW55.10 2027 20 20 22 13 3 21 19 IT 19 20Di 76% 0% 6n. (1n) (101i I MI 6% 33% To Cubtrown 10 72 0 57 71 70 YI 0 14 41 47 22% 0% 50% 11111 17%) (31%) 0/%1 IS% 14% (4%) WW1 201 2302 2003 2001 2165 21(4 1007 2DIt 209 2010 2011 LIM 2011 2011 4011Ian 2031 2031 2110 2011 LIM LIEN 0o Pat Hooke Prenis 14 23 IS 26 22 1? 35 15 12 7 9 7 0% 003%) 93% 020%1 457%) 20%) F12%1 29% 113%) 611 H&. 400 17 10 17 25 37 37 X 24 I 0 0 0 at00:88 000%) n`o 23%) (95%) 204% (104%) 000%) • :(7,1 144410,20 111 35 37 40 32 30 35 01 16 19 75 IS 320% ISO%) IR 0% 1454 (03%) 19% 01%1 0% X0114000 0 0 0 0 0 0 0 5 14 4 6 6 1107%4 as KO% (% 100% 0041 90 20% Tou4440440 45 II 72 03 II 04SO 03 43 3$ 30 20 00%) 05%) 02%) 140%1 sin) (44%) (12%) 121%l 0210 2211 X01 21:02 033 20.34 2305 2034 107 006 2009 2010 2011 US 2011 3011 1011 1012 240$ MN 2010 2011 1.1214 Lull vs P4.34 01443 600930 0 D 0 0 0 1 93 143 i 0 1 I nV as n1 na 591 )9311 1100%) no na 60404124 0 0 0 0 0 0 0 0 I 0 0 0 1114 13 at MI nb nl 0038 no nt SIO WO 0 0 0 0 0 1 0 0 2 0 0 0 xe at Mt nt at no 11038 Oa ni ?mai 011ons 0 0 0 0 0 2 90 143 4 0 1 I 104 Ws at nt 59% (97%) 1103%) 0 MB 01%) 7t031 Fthistry $71 521 344 402 470 503 448 722 4* 222 311 FHA (41%) 10% 4% 11% 0% 01%) 06%) 6% 5% 6594 Total 0100 Ea 0U. 571 521 336 401 470 500 550 533 233 254 234 NO (IF%) DA EMI 11% 19%) (0/1) (141) 10% 14% I (4511 Source: ASCEND and UBS estimates UBS 13 EFTA01177239 UBS Business Jet Update 9 May 2012 Table 3: Westem Europe Deliveries by Manufacturer and Model 31.1.111000 Bonbet41.4 X01 2(02 20» »04 2006 »X 2037 2044 2010 1410 2011 LIDI 2011 3011 4011 1012 9:01 200 2010 2011 1121 11214 at Pean 1014131 0 o a 0 c Na ni na na ni 110 110 na na n 100141445 7 10 5 0 a n ni Na na 43% 03%) iu:03.) na na tfr.i LNO» 6 5 4 3 0 100% Na nb 07%) (20%) (25%1 100% 503% T4, Cteinn»3» Criltngt 03405 I 7 7 13 II 4 6 10 s 4 a 110»4 ong 02. éto 100,4 1(04 rak 57% 001) (45%) 150% (I7%1 40%1 00% 07%) 50% Ir. Gted "CO I 3 I 6 a VI 10014 MOK na 20214 (67%) 500% D% 125% 910.1 Elnml(RS 7 6 8 29 7 .07%) 03%) 1/39d 000%1 (14%) 33%1505%1(6%1 I(6%) ?:., Tolil Bert • barliet 23 20 24 43 35 49 26 41 33 2001%) 11% 0% 67% 37% (42%) 57% 125%1 3% (In) C•1141 3601 2002 1003 2004 2005 201 0437 20» 204 20 1011 11111 2011 1011 4cni urn 20» 1009 2010 2011 1121 1.1211,e Peel 61010 7 23 moa 0% item 03‘; 129% 22% 09%1 gaw 4 Ma aa nl na (43%) 25% 003%) na na 1:0.i CD 16 17 11.0% W 100% na 6% 02%) (33%) 100% 150% CD 16 26 (1039) 0% (100%) na 63% (73%) (43%) 175`41 133%) 0 ni 0% ni (10(ni n13 44 40% KO% »6•3610:03 4 nkt ni Ni ne (75%) 102% 110/1) Na Al (1(0,11 0309319 34 110214 M 1(0% na 34% (61%) 03141 50% 11101e OM) Soms» 13 IS ni ni 003%) 000\1 IS% (å7%) (60%1 0% nl .14%) Ct1kn 0 3 2 ni n nl ni 0114 0% 110%) Ni ni Tobl dim 44 43 24 34 56 44120 63 » 21 (41.%) 40%14211 31% fe%) 154%) 32983 Or» Orb) Dna» 1001 2002 103 2004 200 2601 207 20» 200 1410 1411 1110 2011 930 411 1012 201 1400 2010 2011 OM Lil» vs Pool Fsnxn 9) 2 1 I I I 3 0 0 0 0 0 0 g nl na ne nb nb Pn3 na nb nb faIxn 503 3 6 2 1 1 9 T 5 4 4 11a 0= 1,3t1 f. 0% •121) S29%1 12094 aa%) ;aken 20:0 9 12 T 10 II 9 T 9 4 4 :,10t: Ot in na OM (22%) 29% 156%4 1051 Fttan7)( 0 0 0 0 0 0 1 10 17 IS IS IB ,57% 50% 33. 10% 70% (11%1 0% 0)1 ToblOs0111 IS 1S 0 It IS 21 21 21 31 » 23 20(44%) 24% 61% 33% 31% 11% (0%) arm os (11:) Darm torn 202 1003 2004 2005 201 »47 1004 2044 2010 2411 1.101 2011 4311 011 1012 204 1001 2010 2011 1121 11:11 ni Prak Ftevn 00 0 0 0 0 0 0 0 0 8 11 3 3 (71%) 4000 100%1 ne nn nb 134% 0411 4111 fnman 310 0 D 0 0 0 0 D 0 0 4 6 6 0% M 335. na na 49 nu WC 5:a ral ~ier 0 0 0 0 0 0 0 0 8 D 9 9 07%) Meij Po» ns ni ne In% 161%1 155%1 na Gullstnum 24131 2032 7033 20» 2005 204 2C07 X» 209 2010 2011 Ligt 2011 3011 4011 1012 21103 21:00 2010 2011 uni 51111 -it. Po, 0100193 ni ni Na (10C%l 2021 (83%) 1102%) na (100%) 032020) 3 7 S 2 3 Na 0% Ni (Waal 133% .21%) 03016I 50% 4711 >19- 03)039) 0 0 0 0 0 +i Na Ni ne ni ni nb Na nø 0109493 7 B ni (100%) na N% 1140%) ti 0% 300% 094350 10 13 2 3 5 n non) Na (104%i 33% .10%) 93% 67% D% ToUl Guls" D 91 8 6 10 na I50%) 0% 125%) 55% (74%) 05%) 87% 0% t74%) »Mar 101 2032 2003 201 206 »X 2037 X« 2009 2010 2011 1.1791 2011 3011 4011 I012 21131 ZO 2010 2011 1121 1.1211 ti Pt» ~e Prtnin 2 5 S 4 3 7 7 7 I 2 0 0 ni 110%1 000%) na 0% 0111%) 100% 1100%1 (100%), 0(041 Ir 40 3 1 0 0 11 11 t 6 0 0 0 0 80 ni ni (11%) 1107%1 NI Na WI (Itt40 (11b600 5 I 2 T 10 21 II 17 30 2 4 3% ni na (10(f. I 53% (41%1 531)%1 100% 50% 1044•4010 0 0 0 0 0 0 0 0 1 2 1 2 ni tal 0% na na nka 100% 19"1 110% »bi Water 0 11 24 14 27 32 It 5 0% (100%) 50% 0% 11% (0%) 4W.) 111%1 0% 0014 2031 2032 XI» 2004 3305 2301 207/ 200t MC »10 2011 L1131 2011 3011 4011 1012 zot 2o» ono 2911 uall 1.112In Peet 011en Er:Ipso00 0 0 0 0 0 0 5 II 0 0 0 D ni ni na 133% WO%) na na na 24.1 Ene Van 0 0 0 0 0 0 0 0 0 0 0 0 ni Ni ne nb Pla nb na ne nb »OS" 0 0 0 0 0 0 1 0 0 0 0 0 ni ni fit (16011 nb .4 ne ne nb tal Olbers 9 9 0 0 0 9 6 11 0 0 0 9 na n4 al ni 113% 11021) na na ni (1(011 744•110u017 1 115 06 82 104 117 20 273 150 191 101 »3 03%) (MI 5% 13% 37% (41%) (9%) 124%1 111%1 (51'.) TotlbdwryEaVWa 1 96 66 82 104 167 ID 293 114 100 92 115 633%) 10% 41% 23% 26% (52%) (12%) 01%1 10% Source: ASCEND and UBS estimates UBS 14 EFTA01177240 UBS Business Jet Update 9 May 2012 Table 4: Eastern Europe, Middle East and Africa Deilveries by Manufacturer and Model flore* Bonbare/ Xe 20)2 2033 2004 2005 XOS 1009 2010 21 2011 LION 1011 2011 4011 wu 2001 10» 2010 2011 11211 Wu on Peak N3 31 D nu na n'a na nh nu nu na ni na Lnr3ei 43445 3 Na Na nt na Cs% (61%) 1103%) na ni Wei 1423.100 3 3 NaNa(100%) na 67% (42%) 07%1 0% 0% 0111) Chelems« 3» 5 3 110125 Na000%) na mo's) 0% 0310 (100%) (MF ‘87,» Cedinw 034405 2 10 IO» pin) 000%) 191% 103% 520%1 150%1 &LI (43%) Gted 9303 2 2 IVa 0% (103%) 0% 19114 (00%) % 50% 0% (13%) GettErpeteme5 2 (75%) 0% 150%1 (MON' St% 1åx) «KM 122.1 it7.; Ca%) Toul Bemtetle3 17 24 21 fi 1 03%) 12124) Weil FMI 41% (17%) 0% 115%1 00%1 (MI 044444 2101 2102 »27 2004 axa Net 201 2006 2044 2010 an 11212 2011 3011 4011 1012 2401 2001 »IO 2011 11211 LUS ri Nt% net 0 (11.0%1 Nani ne 7()% % 19% 000%) (100%) 1(0%1 Cil 0 Na Nana ni 07%) % IWO%) na na 00714 C.12 0 1103%1 na 1100%) na 403% (43%) 533%1 004%) (1130%1 012 Na na na (»Chi na 67% 1103%) nra 0% (5041) 2 NaNana na na nt nu na tia nb Ettoefewat 0 NaNana na (10)(1 nt nt Na tia nb 6320113 0 003%1 na na (100% I 00%) 125% (67%1 gal (I (100%1 Sanie» 3 na 1103%) na na 67% 120%1 SM % 200% (75%1 Otto% na na nb na nt nu na na nb »edam 3 34 11C0%) % »0% 0% 02% 10% (5r4) *ru gai 99%) Demi 2001 2002 2003 2004 »OS 1001 207 2044 »00 »10 2011 LI» 2011 7011 4011 1012 20» 2001 2010 3011 11211 L12MnPM Ft4»4 50 0 na nu na nb ai a nu na na nb F20:»933 4 2 Na 003%) na na OMM a nu end D% 03%) FS:»2030 3 2 We) ma na na (33%) 203% (10%1 end D% % Ftken 74 0 11 737%) 0% 100% (X.: nb e• 10:0 22. 05%1 80)% Tee Cime 7 11 17 00%) 07%) 200% % (V%) ln% 114% (17%1 ne) 117% &am 2401 2102 20032004 »05 »X 1037 1004 2010 20 0 2011 1120 2011 3011 4011 1012 2104 NO 2010 »11 11211 LUS vs Net Agnan 100 0 0 0 0 0 0 0 0 2 3 ma na nb nb nie 1100%) na ni nb lanman 3» 0 D 0 0 0 0 D 0 0 • 2 - 1103%% 03%! ni nu nu 150%1 Total Embat 0 0 0 0 0 0 0 0 2 5 na 100% 0% na nu nu 100% 25% 21% ni Gullsetam Xe 2032 10)3 2004 2005 2004 1037 MX 2009 2010 2011 LUX 2011 3011 4011 1012 201 20» 2010 2011 112/4 LIN n Pm» 0100193 (I0741 Na na na n'a 0034 nu 000%) (100%) T:v.i 03)02(0 0 NaNa ne % % 110)%) na na •(e 03)033) 0 NaNa ne nt nt ne na na 010349 (101%1 Na (100%) D% 05%) 33% % 150%1 12n1 09359 % 150%1 na 403% 14% 03%! 03%1 D% T'effleure 01%) 10% 07%1 /CO% 14% % (14%) 150%1 (MI (42%) Hotte 21431 2032 10)3 2004 2446 »X 2007 MX 2009 2010 2011 LIS 2011 1011 cru 10'12 2034 Me 2010 2011 11220 LinitsPiels HM. Prenite 0 1 2 2 0 1 4 2 2 1 Naes na nb (5270 % 1102%) na na i5)%) Hier 400 0 0 0 0 1 2 1 2 4 11(0%) Nana na 10)% 140% (50%1 (100%) 000%) nb 11»14,101) 3 0 3 3 T 7 9 9 10 2 % Na(100%) ni % II% (30%1 1114 eu.) i112%) 1ØW0 0 0 0 0 0 0 0 0 4 nu 110»,) (100%1 ni Ma nu 05%! 1105%) tint TOMT »MM» 10 14 17 20 4 % (IO%) 010%) ni 17%) 54% (40%) I15%1 170%1 (OP%) 24431 2032 20)3 20042003 Xe 2007 MX MW 2)10 2011 LU» 2011 »II »II 1012 20» 20» 2010 2011 11211 MM» Pool 00442 Edo» 9» 0 D 0 0 0 0 D 3 0 0 0 0 na na na n'a 0XX; na na :1(3%1 CocVetin 0 0 0 0 0 0 0 0 0 0 0 0 na nt ne nb ny ^a fre ne nb sitosco 0 0 0 0 0 0 0 0 0 0 0 0 Nana nb nb n MI a nb nb Totleben 0 0 0 0 0 0 0 3 0 0 0 0 nu Na Nani nh 1110%5 sa si ni (10374 lame hdusee 20 11 15 22 42 44 (I2 07 11 ft 16 09 551%) 07%) 149%1 % 40% Il% 00%) »MI 03,d i 41M Total Muse Eu %%Ji 20 19 IS 22 42 44 Il Ti 47 19 43 13 SU%) Ill%) 15014 D% 25% 11% 121%) 114%1 IX%) Source: ASCEND and UBS astigmates UBS 15 EFTA01177241 UBS Business Jet Updale 9 May 2012 Table 5: India & China Deliveries by Manufacturer and Model 1,Y1110•101 hast. MI 2002 20 3 2004 2005 »X 1407 2035 »00 2010 2011 LON 24211 3011 4011 wu 2101 Ka 2010 2010 L121 Ll2NvsPn1 ttele 31 lnai0141445 1.0.»10) Cteiene 3)) CnIbewCilt ,505 Geta 9:00 01.nen»ParsaR5 0 3 4 2 2 na na na na 060%1 nia 110)%1 na na ve nu na na nu na na 11(0%) na 142%1 ni na na na (100% I (00%i ni na C!, na na na na na (11:0%1 na na na na t50%) 103% na 1000..7 tua nu nu 1100%) 150% 1103%) 14 na na eA6 011 130%1 na 3;0., ni ni 162%1 «0% 140%1 ni ID» Il .1 Il .1 2tir. CIP Toal B/mtartier 444 0% nia 0% 150%1 300% 0% 100% 113% 35% 21:0: Cerna 2101 2402 tO» 2001 met 2401 2007 »I» 2044 2110 2011 112M 2011 3011 4011 1011 203/ 20» »10 2011 III" 11211.s Pene Ma" Cal C.12 CP CN 17n7nYEmese Ettc011S San:min Cino% (150%1 na nia n'a na na n'a na na na na na Mit na na na na na ria na na (100%) rea ria na (100%) na na na (EV.: na nb na na na ni. nt t:Crad 0% Orel nt nt 202% na na nt na 1107%1 na nt nt OS%) na na na na ni ni na na 1102%) na nu et3:"., na na (100%) ria ria ria 1100%) ni mn, na 0[0%1 (10)%1 na na na (100%) na IEVq na I% a ria total Cano 0%si 000%1 <Rom Xe% 033%1 400% 150%1 MN 033%) renie 1001 2402 1003 2004 »OS 2000 X07 1004 2044 2010 2011 1.101 2011 3011 4011 1012 20» »0 2010 2011 1.121 1.121.1eeneen Flynn W Fakan503 fakan20:0 Ftl:an TX 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 t 1 0 1 2 0 0 0 0 0 3 0 0 I 4 1 1 1 3 , na na (10%1 (103%1 nu na nt 0% na na na na na na na Ne nb (11:0%1 000%1 na na na na na na IWO%) (67111 AU na na 0% 175%1 na na 107% 50% V. na Total Cumul 0 0 0 0 0 2 3 Muai 1100%) 100% sa na 000%1 ne 0% 110%1 IO% 10)% 1001 2032 2061 »04 2005 2400 2407 »00 2044 2010 2011 LSI 2011 3011 4011 1012 2404 »0 2010 2011 11211 1.11.1 il, Pte' Agnan IO° Phin3,3» 00000000 0 D 0 0 0 0 D 0 0 0 3 0 3 3 nt 0 0 na nt ma »7%1 na na na nb na na ni eu na ee. na na na Tubi Embat 0 0 0 0 0 0 0 0 0 3 3 3 na ma 141%1 na nu no sa 0% 0% na Gallstnum X01 21232 53 MM 2105 2005 2037 st 2301 2010 2011 LUIS 2010 1011 4011 0012 203 201 2010 2011 11211 MN es Pte. G100193 03)02(0 03)333) 040)450 050 3550 2 5 0 3 0 12 e 3 4 le va Ab nia Cr% na va 0% nia n'a 310% ni ni ni isom 1124. na nb na 0% na 1)% nt 710014 (100%1 na 103% nt nt na nu 0% no 200% en, na na 143%1 140% na 203% na 127.1 25% )0/' na Tal (Un» 14 19 17 50% 150% 17% (93N (07%) 1040% 22% 23% 21% 1610,e Hanta X01 24732 2003 2008 201 X01 2037 Mn 2009 2010 nit LUIS 2010 1011 03'11 1012 20» 20» 2010 2011 1.1211 LIIN 74 Pte HM* Prenite HanIss 100 Haras LOO Hanta 4003 0 0 0 0 2 1 0 0 0 0 0 0 1 0 0 0 0 0 I 0 1 0 2 0 0 1 6 0 1 0 IO 0 0 0 4 I 0 0 2 5 0 0 0 2 3 0 0 na na Na Na nt na na na na Na gin' (103%1 na na na na nt (SI 67% na 110141 nt 40N, nu Im nt 79)%1 440% na na W4 IWO%) na na W% (140%1 pl na Tobl Onan 3 1 0 1 1 4 7 14 0 7 3 3 na eta 115/%1 na IO% 04%) 10% 117%1 »SI 427.1 X01 2(02 2003 »04 2005 2001 2W7 301 3209 2010 2011 LIS» 20113011 4011 1012 2C05 2») 2010 2011 1.1214 VainPte 0444% Edpso 9» 24 Man Sno 5A0 000000000000 000000000 0 0 0 0 0 0 0 0 0 0 0 Na 0 0 na 0 0 na Na na ne na na na na ne rte na nb na ni nb na na na rea na nt na na na na total Ofin 00 0 0 0 0 0 0 0 0 00 nia nia sa na nu no sa nia nt na Toi hduelly 4 4 3 6 Il 12 11 2$ » 42 47 45 13% 00% 1»111 122N 32% 4% 42% 12% 5% 41% Tc« Muset Eu VLI il 12 19 25 26 35 u C 0% MO% 110%1 122%; 32% a% 46% 16% 6% 31% Source: ASCEND and UBS estimates UBS 16 EFTA01177242 UBS Business Jet Update 9 May 2012 Table 6: Asia Pacific (Ex India & China) Deliveries by Manufacturer and Model 1110412 floatedir 3001 2402 2003 2004 2005 3024 2037 3034 2049 3310 2411 41211 sail 1011 4011 1012 XX 20/1 2010 2011 LI211 L12M 111(1 lAne2131 0 0 At At m na Al At ra.1 na Al Ltapl024S 2 0 (1117%) Ma tea na Al na at 1104%) (100%) a a 1107.100 0 at at WI 118 101% VON as a ne (Osi Gleller00 X0 0 at at nt nt 0% 110)%1 At a ne ns thiergcaN4C6 2 a w a na (Oral nt as 100% KO% Dra Gt13.15CCO 0 (10741 1103%) a Al nt 103% 0% 1100%) (100%) 01:teanneal(RS 2 003%4 At 150%i At nb t5)%i 300% $97.1 th. tow Elembanke 4 00%) IN% INN a SD% (SI%) 107% 193%1 ISOM C01.08 X01 2033 20002004 3005 Nee 4003 2000 XX 2010 2011 xru 3011 0311 141,13 1031 3010 2010 2011 11111 12/4 vs Pat PALOWV (1(13%1 at1100%) 0% 2(0% OS Pi 1041 )6,%: 0% 101 na na na na 0% 205% 1103%) na Al :1(041 ta w na na Al) AA Al Al na tll ne nI 0% MO%) a At 100% ON nt n11 At a at eta na ne Brateetre At At (100%) At At a at 005%2 051 nt Eat01.3 At a na na 0% 0% 1100%) WIa (K0%1 Satan atat1100%) Al ( 1%) 100% 150%1 110(%) (100%) (1407.1 Ciao X at nt na nb At (50%1 1109%) Oa At 1<0%1 Tow Cam It 110014 nia (110) 0% KO% 20% 142%) TM 175%1 (X%) Masai 1401 10)1 1000 2001 3003 1001 2037 1004 ION 2010 2011 LIN 2011 30114011 1012 1031 1010 2010 2011 1.1111 u111.0441I Fsb)a 0 At At At nb n), nt nt Al AB nt Fakan SO) 0 At atnt Al Al At )103%) Al Al Al akon 20)0 0 na no%) (030%) Al na 0% 100% 1100%) 000%1 3 00%i 'kw 7% 0 At at nt nb nt ne na na nt nt Tobl Osaka 0 na 1100%3 OM) AS no 100% 0% (102%) (100%) (1001( flaw X01 3002 XX XS 203$ 1001 1001 2014 XIX 2010 2011 11111 2011 3011 4011 1012 XIX 200$ 2010 3011 11211 WM vs Pee Plan 100 0 0 0 0 0 0 0 0 4 I I 1 • , na 0% na nb nb 65%1 0% 0% nb Phift* 3)0 0 D 0 0 0 0 0 0 0 0 0 D -. 4 at ne n a na na ra na na total Embaer 0 0 0 0 0 0 0 0 4 I 1 1 ne ma 0% na nt na (75%) 0% 0% nt G•01410101 2001 2102 2033 2304 MOS 201% 2037 MN 2009 2010 2011 LIM loll 3011 4011 1012 2033 X*) 2010 2011 1.1211 L1211 n Peal 0100123 0 na na na na ne 1140%1 na na (O40%1 COMM 0 as 110)%) a no MOH nt 000%) 000! ne 033009) 0 Ma atWI no na nt At OS At na G103493 1140,14 at(100%) na 0% 110741 at15,41 103%1 .50%) 09335W 4 04 Na 0% (I00.i(.1%) 235% 0% 47% 0% 300% Toni 0uNairn 03%) IN% 'ION (100%; 03%) 0% 50% 0% RV14 0% Maw 2401 2032 2043 2004 200 2001 24137 MN 2009 2010 2011 21311 1011 •011 1012 2404 2039 2010 2011 L1711 unlinks') Hama Prelate 0 0 0 1 1 0 3 0 at nt nb MOH nt 110)%) ela felj 11(0%1 Ilis1.400 0 2 2 1 0 0 1 0 atat nt nt 1(0% 0% 1103%) WI Ne 11m424,030 4 3 3 1 I 3 3 as a ne 0% 33% 05%1 0% 0% 0% kW%) 11m424.4040 0 D 0 0 0 0 0 0 Naa 00%) na na All at 1100%) (100%1 Al Tobl Nola 4 I 3 7 a a 040%) 0% 01%) (3%) 00%) 110%1 (XV 24431 2032 2003 2004 200 2101 2007 MN 2009 2010 2011 LIM lot IOU 0311 1012 2409 2021 2010 2011 1.121 n Pet Oitre Eelpso WO 00000 0 1 0 0 0 0 0 ¶a na nt na (14021 na s4 na Al 110%1 Epe Vela 0 0 0 0 0 0 0 0 0 0 0 0 nt na ne ne ns fie ne nt Sno$40 0 0 0 0 0 0 0 0 0 0 0 0 nt nt nb ne nt 2010010n 0 0 0 0 0 0 1 0 0 0 0 0 na WIat at C10)%1 na Al as OWN level twat' 11 Ill 11 9 0 20 23 V 30 3011 19 00%) 33% 03%1 1231a) 17% 7% (14%) 06%1 19441 (52%) letalauslry EaYWI 11 II 11 9 9 25 2020 22 20 II 10 fro 13% vs%) 00%; It% (MI 013 la**I i57%) (X%) Source: ASCEND and UBS estimates UBS 17 EFTA01177243 UBS Business Jet Update 9 May 2012 Table 7: Latin America Deliveries by Manufacturer and Model 7191.74111 Datbialir 2031 2002 20» 2004 2005 »X 2407 1034 2009 2011 Lim 2711 5011 4011 1012 20:4 101 2010 2011 1ø4131 0 D 0 AD AS ni na na na rua nl 6~1045 Pc ne ni ør(' (11:0%1 na *DM 100% 2 1 wa (ION) n11 0% L511%) 100% 150%1 Crdln%n301 4 2 2 ng 1100%) n'e ne 101% L10%) C% 0% Craleigt C04405 3 1102%1 0% ni i67t; 150% 0% 150% 0% Gted WCO 2 0 (10,41 Ma ni ne 0% 303% 0%1 110D%) GWelErpgiygli$ 1 4 2 110)+;11101%J n'e (1(011 n1 »OSI 91% Togl ~et 19 II » It 13 00%) 0% 200% IM1 150%) III% (15%) »V Conni 3101 2032 tO» 2004 3006 2004 1002 20$ 20. 1010 2011 LI XIII 3011 4011 1012 31:01 2024 2010 2011 1,1~9 0 20 (1(0%1 ne (100%) 000%1 19)% (05%) 0% 171%1 Wt 2 All All Ill AS (16014 ng mi ni c.n 3 1107,41 AS (103%) AS 33% IS") UN 16751 013 10 Na M (100%) ng 1%0%) (20%) (71%1 IOP. Cll 0 ng n% (N ntl ng nu ni 22200~e 2 ng n% n% (10711 nl nu ni 6m201.5 Ma 100% I50%1 ng 33% .501I 0% X% Senern)n 2 CM 0% nri (100%1 ISO% 0% $0%i 100% Ctilen nu ng 6100%1 nb (10)%1 nb n4 1100%1 Toll Cim 21 I 3. 42 22 It 23 21 0% 350% 12514 167%4 24% (4I%) (tt%) tlf Damll 1401 2032 tO» 2004 3* 2031 2031 2000 MI 1410 2011 Lim 2011 3011 •211 1012 203$ MI 2010 2011 F/1:06 10 0 0 0 AS AS Si An ny ny n. fil fil:00903 4 PC1%) DM) 150/41 ng .30%) )103%) nl /60A.1 fil:002010 2 3 4 8% HON 160%1 ng .07%1 203% 67% 120'4I FY» » 0 2 2 igs 175%1 nn 100% (23%) 110.14 Tobl %laut I • $0% (100%) 110%1 eit 02%1 lø%) 275% 'MI Eglen« 2001 3032 ten 2004 3005 MI 2007 tOO$ SN 30 0 2011 LIM 2011 3011 11311 1012 3033 Nø 2010 2011 Ætt», 100 0 0 0 0 0 0 0 0 24 » 16 XI (77%1 625%1 0Ni D% ne n1 .10% 193%1 Piss% 3» 0 D 0 0 0 0 D 0 0 6 12 12 ng 0341 23% ON AS nil nu 104 Toll »gag 0 0 0 0 0 0 0 0 26 05 28 28 4404 125/41 114%1 0% ng nu 0•111.1101111 X01 2032 2003 2304 2005 2406 »37 »X 2009 2010 2011 LUN 2011 3011 4011 1012 25 X» 2010 2011 0100150 2 2 6». Ma nl ng 103% ‘53%) 050%1 100% «OM 3 nkt 100% ria ne 30)% 0% (75%1 200% 09)0393 0 0 nkt nkt ria ne ng da 0400450 2 Ma (100%1 0% 53% 633%1 0% I3004 G9»59) 633%1 175%1 nri i50%: 0% 67% 00% 0916 Tobl Otistre t 1 12 0%) 00%1 0% 113%! 71% 0314 Havd» X431 2032 53 2304 2346 X» »37 »X 2099 2010 2411 2011 3011 4011 lati 2024 2009 2010 2011 144•14.9rtniti 2 1 3 1 0 1 4 a 1 ng ntl (100%) nl 0% 110)11 n4 0% 11~400 1 2 4 3 3 4 1 4 2 1 1 0 (100%) (100% i 30)% (10%) (10%1 0% Hisko,830 4 4 4 0 5 i 3 7 i 2 3 3 AU 0% 0% D% 133% 0% (71%! 50% 11a.4003 0 0 0 0 0 0 0 I 0 2 2 1 (DNA ng 11W%1 nu 0% TogINSw $$ 20 0 I 7 • ng 0% NN ($114 101% (H%) Pi%) IT% Men 201 2402 mn 2034 2»5 2806 2W2 2Dit 2009 2010 2411 LI210 2an »ru &ru 1012 2033 X09 2010 2011 Stu 910 0 D 0 0 0 0 2 2 0 0 0 0 ng ng ng 0% .103..! Al ni CpC‘4183 0 0 0 0 0 0 0 0 0 0 0 0 r ng Al ru. nb nu +J rrn Sno $430 0 0 0 0 0 0 0 0 0 0 0 :, lg 112 ne nl Te010124rs 0 0 0 0 0 0 2 2 0 0 0 D ni iiilitan% 0% 1100%) na el 74441114031» 47 83 $1 24 40 SI 1$ 90 fl112 12 87 0%) 10% 120%1 124%1 14% 3% 10% 118%1 TWMu11ryP3OWs 47 48 2024 40 51 83 68 60 16 74 70 43% 13% 12814 I25%,IN (I2%) 10% 12% Source: ASCEND and UBS estimatos VIII n Ps/i ng 203% 91% ,93%) 53% (ROM ram 44% 1.1211 11/41 45%) ng eiy ng 43%) (40144 nb IN%) LI211 ng nem (30%I LIM 11111 53% 0041 LUN 103% 203% ng 16774 144%1 (31%) L11MrsPøl Im% 0% ng 033%) 67% 10%1 LIS 012.4 0% 0% (MI LinInPeal 51211 na 118 n!nn :15034 nb nb ng (f1:0111 110%1 (2%) 11%) 13%1 UBS 18 EFTA01177244 UBS Business Jet Update 9 May 2012 ■ Statement of Risk The business jet market is cyclical in nature, largely driven by the general economic environment. Business jet manufacturers' earnings and cash flow are dependent on end-user demand, availability of customer financing, program execution and inventory management. A weak market for business jets could negatively affect General Dynamics, Textron, Bombardier, Embraer, Rockwell Collins, Honeywell, B/E Aerospace, Rolls-Royce and United Technologies. ■ Analyst Certification Each research analyst primarily responsible for the content of this research report, in whole or in part, certifies that with respect to each security or issuer that the analyst covered in this report: (1) all of the views expressed accurately reflect his or her personal views about those securities or issuers and were prepared in an independent manner, including with respect to UBS, and (2) no part of his or her compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed by that research analyst in the research report. UBS 19 EFTA01177245 UBS Business Jet Update 9 May 2012 Required Disclosures This report has been prepared by UBS Securities LLC, an affiliate of UBS AG. UBS AG, its subsidiaries, branches and affiliates are referred to herein as UBS. For information on the ways in which UBS manages conflicts and maintains independence of its research product; historical performance information; and certain additional disclosures concerning UBS research recommendations, please visit www.ubs.com/disclosures. The figures contained in performance charts refer to the past; past performance is not a reliable indicator of future results. Additional information will be made available upon request. UBS Securities Co. Limited is licensed to conduct securities investment consultancy businesses by the China Securities Regulatory Commission. UBS Investment Research: Global Equity Rating Allocations UBS 12-Month Rating Rating Category Coverage' IB Services Buy Neutral Sell Buy Hold/Neutral Sell 51% 40% 9% 34% 35% 15% UBS Short-Term Rating Rating Category Coverages IB SaoAcm' Buy Sell Buy Sell less than 1% less than 1% 25% 17% 1:Percentage of companies 2:Percentage of companies the past 12 months. 3:Percentage of companies 4:Percentage of companies within the past 12 months. under coverage globally within the 12-month rating category. within the 12-month rating category for which investment banking (IB) services were provided within under coverage globally within the Short-Term rating category. within the Short-Term rating category for which investment banking (18) services were provided Source: UBS. Rating allocations are as of 31 March 2012. UBS Investment Research: Global Equity Rating Definitions UBS 12-Month Rating Definition Buy Neutral Sell UBS Short-Term Rating Definition FSR is > 6% above the MRA. FSR is between -6% and 6% of the MRA. FSR is > 6% below the MRA. Buy Sell Buy: Stock price expected to rise within three months from the time the rating was assigned because of a specific catalyst or event. Sell: Stock price expected to fall within three months from the time the rating was assigned because of a specific catalyst or event. UBS 20 EFTA01177246 UBS Business Jet Update 9 May 2012 KEY DEFINITIONS Forecast Stock Return (FSR) is defined as expected percentage price appreciation plus gross dividend yield over the next 12 months. Market Return Assumption (MRA) is defined as the one-year local market interest rate plus 5% (a proxy for. and not a forecast of. the equity risk premium). Under Review (UR) Stocks may be flagged as UR by the analyst. indicating that the stock's price target and/or rating are subject to possible change in the near term, usually in response to an event that may affect the investment case or valuation. Short-Term Ratings reflect the expected near-term (up to three months) performance of the stock and do not reflect any change in the fundamental view or investment case. Equity Price Targets have an investment horizon of 12 months. EXCEPTIONS AND SPECIAL CASES UK and European Investment Fund ratings and definitions are: Buy: Positive on factors such as structure. management, performance record. discount: Neutral: Neutral on factors such as structure. management. performance record, discount: Sell: Negative on factors such as structure. management, performance record, discount. Core Banding Exceptions (CBE): Exceptions to the standard +/-6% bands may be granted by the Investment Review Committee (IRC). Factors considered by the IRC include the stock's volatility and the credit spread of the respective company's debt. As a result. stocks deemed to be very high or low risk may be subject to higher or lower bands as they relate to the rating. When such exceptions apply, they will be identified in the Company Disclosures table in the relevant research piece. Research analysts contributing to this report who are employed by any non-US affiliate of UBS Securities LLC are not registered/qualified as research analysts with the NASD and NYSE and therefore are not subject to the restrictions contained in the NASD and NYSE rules on communications with a subject company, public appearances, and trading securities held by a research analyst account. The name of each affiliate and analyst employed by that affiliate contributing to this report. if any, follows. UBS Securities LLC: David E. Strauss: Darryl Genovesi: Matthew Akers. Company Disclosures Company Name Reuters 12-mo rating Short-term rating Price Price date Bombardier Inc. BBDb.TO Buy (CBE) N/A C$3.90 08 May 2012 General Dynamics Corp.ie' 16 GD.N Buy NIA US$67.53 08 May 2012 Rockwell Collins Inc?' 46' 61‘ 66' 7' 11' 16.186 COL.N Buy N/A US$53.39 08 May 2012 Textron Inc.B6' 7'13' 16' 1&.22 TXT.N Buy N/A US$24.68 08 May 2012 Source: UBS. All prices as of local market close. Ratings in this table are the most current published ratings prior to this report. They may be more recent than the stock pricing date 2. UBS AG. its affiliates or subsidiaries has acted as manager/co-manager in the underwriting or placement of securities of this company/entity or one of its affiliates within the past 12 months. 4a. Within the past 12 months. UBS AG. its affiliates or subsidiaries has received compensation for investment banking services from this company/entity. 4b. Within the past 12 months. UBS Securities Canada Inc or an affiliate has received compensation for investment banking services from this company/entity. 5a. UBS AG. its affiliates or subsidiaries expect to receive or intend to seek compensation for investment banking services from this company/entity within the next three months. 5b. UBS Securities Canada Inc or an affiliate expect to receive or intend to seek compensation for investment banking services from t