Analyst Certification on page 23 of this presentation The View From Wall Street: Regional & Corporate Aerospace November 4, 2003 Ronald J. Epstein (1) 212 449 4585 Byron K. Callan (1) 212 449 1394 Investors should assume that Merrill Lynch is seeking or will seek investment banking or other business relationships with the companies in this report. Analyst Certification on page 23 of this presentation Source: Bombardier, Cessna, Embraer, Gulfstream

Review Aerospace/Defense Sector - Equity Market Perspective Topics For Discussion Review Aerospace/Defense Sector - Equity Market Perspective Corporate Jet Market Corporate Jet Manufacturer Equity Market Performance Regional Jet Market Regional Jet Manufacturer Equity Market Performance Questions/Discussion

Aerospace/Defense Sector Overview Commercial Rallies, Defense Lags So Far in 2003 Defense Has Fallen Out of Favor with Several Sell Side Analysts Source: MLPF&S

Note: DJIA closing price lagged 1 year against deliveries Corporate Jet Market Another Cycle Unfolds Very Weak Conditions in the Corporate Jet Market 30 Years of Data 20 Years of Data What Drives Corporate Jet Orders? Regression suggests 1000 point upward movement in the DJIA increases business jet deliveries by approximately 50 DJIA Closed at 8,342 on 12/31/02 DJIA Closed at 9,801 on 10/31/03 73 More Deliveries in 2003 over 2002 ? Note: DJIA closing price lagged 1 year against deliveries Source: MLPF&S, Airclaims

Average Age Distribution Corporate Jet Market Secondary Market Indicators - 10/15/2003 Light Corporate Jets (<20,000 lbs) Number for Sale/Lease Large Number of Aircraft Available For Sale Average Asking Price Has Dropped Significantly 66% are Older Than 20 Years Average Age Distribution Average Asking Price Source: MLPF&S, AMSTAT

Average Age Distribution Corporate Jet Market Secondary Market Indicators - 10/15/2003 Mid-Size Corporate Jets (20 - 40,000 lbs) Number for Sale/Lease Large Number of Aircraft Available For Sale Average Asking Price Has Dropped Significantly 57% are Older Than 20 Years Average Age Distribution Average Asking Price Source: MLPF&S, AMSTAT

Average Age Distribution Corporate Jet Market Secondary Market Indicators - 10/15/2003 Large Corporate Jets (40,000+ lbs) Number for Sale/Lease Large Number of Aircraft Available For Sale Average Asking Price Has Dropped Significantly 55% are Older Than 20 Years Average Age Distribution Average Asking Price Source: MLPF&S, AMSTAT

Corporate Jet Market Fractional Programs are No Longer Supporting the Market Depressed Fractional Program Activity Level of Aircraft Shares Sold By Fractional Programs Decreasing Net Activity (Aircraft Shares Sold Less Aircraft Share Bought) is Very Low Decreasing Number of Aircraft Sold to Fractional Programs NetJets Cancelled or Deferred Orders With Cessna, Gulfstream and Raytheon Heavy Jets Seem to be Worse Off 25-Hour Cards Highlighted at NBAA Marquis Jet Citation Shares “Vector” Card Program Delta AirElite “Fleet Membership Direct” Program Source: MLPF&S, AMSTAT

Corporate Jet Market Trough in Deliveries in 2004 - May Be Optimistic Merrill Lynch Forecast of Corporate Jet Deliveries Deliveries Trough in 2004 Slow and steady recovery supported by new product introductions Could take 5 years (or more) to return to 2002 levels Source: MLPF&S

Source: MLPF&S, Bloomberg Corporate Jet Manufacturer Stock Market Performance Is The Stock Market Discounting A Business Jet Recovery? Major Business Jet Manufacturers Lag S&P500 in 2003 Source: MLPF&S, Bloomberg

Source: T100 Back, Embraer, MLPF&S Underlying Air Traffic Demand Scope Impedes Natural Market Forces Passengers Per Departure (U.S. domestic mainline network-February 2003) Source: T100 Back, Embraer, MLPF&S

Scope Altered the U.S. Airline Fleet Mix The 50-to-110 Seat No-Man’s Land Composition of the U.S. Fleet for Aircraft Under 130 Seats by Number of Aircraft Source: Airclaims, MLPF&S

Source: Airclaims, MLPF&S Scope Altered the U.S. Airline Fleet Mix The 50-to-110 Seat No-Man’s Land Composition of the U.S. Fleet for Aircraft Under 130 Seats by Number of Seats Source: Airclaims, MLPF&S

The Impact of Scope on Aircraft Sizing Scope Impedes Natural Market Forces Aircraft Size Could Be Better Matched to Demand Source: MLPF&S

Source: Flight International, MLPF&S Summary of U.S. Airline Scope Rules (August 2003) Scope is Continually Evolving There is a Trend Towards Larger Regional Jets Source: Flight International, MLPF&S

The Commercial Aircraft Fleet of the Future A More Natural Distribution of Aircraft Sizes in the Fleet The 70-110 Seat Trough Could Become Populated Source: MLPF&S

The JetBlue ERJ-190 Order The Impact of 100 Seat Jets on Low Cost Carriers A Break-Through Order for 100-Seat Jets Source: JetBlue

The JetBlue ERJ-190 Order Expand Low Cost-Low Fare Model Into Mid-Size Markets Focus On Economics and Passenger Comfort Mid-sized markets lack low-fare service from low-cost carriers (LCCs). These markets lack the volume to profitably fill the full-sized jets flown by LCCs with sufficient frequencies. Service is limited to small Regional Jets (RJs) operated by major airline affiliates. JetBlue’s solution for mid-sized markets is a mid-sized, low-cost aircraft to permit profitable market entry. JetBlue Crewmembers and high-quality customer service Comfortable cabin 32 inch seat pitch, DirecTV at every seat, Two-by-two seating Attractive ERJ-190 economics Aircraft’s seating capacity, coupled with efficient operation, should enable a CASM approximately 40% lower than average RJ unit costs. According to JetBlue - ERJ-190 break even load factor is 65% compared to 70% on 164 seat A320

The JetBlue Order The Competitive Response in the New York Market JetBlue Could Stimulate Demand in 100-Seat Market JetBlue Will introduce ERJ-190s in 2005 (18 per year) JetBlue operates out of a hub at New York’s JFK Airport The ERJ-190s will most likely be used for service to medium-sized markets JFK - New Orleans (increased frequency), JFK - Richmond, Washington (Dulles) - Fort Myers, JFK - Jacksonville US Airways 110 70-seat jets on order Plans to deploy them in Boston, New York (LGA) and Washington (National) Delta 50-seat Delta Connection regional jet will have trouble competing against a JetBlue ERJ-190 Continental Could experience a decline in the NY market, if so, may have to reevaluate 70/100-seat jets for Express Jet

Source: Airclaims, MLPF&S The Parked Regional Jet Fleet Overcapacity Is Not An Issue For Modern Fleet Parked Regional Jets 5/2003 Through 9/2003 Source: Airclaims, MLPF&S

The Regional Jet Fleet Through 2006 70-110 Seat Segment Drives Growth Merrill Lynch Delivery Regional Jet Delivery Estimates Source: MLPF&S

Source: MLPF&S, Bloomberg Aircraft Manufacturer Stock Market Performance Is The Stock Market Discounting Future Market Leaders? EADS and Embraer Are Outperforming the Market in 2003 Source: MLPF&S, Bloomberg

Disclosure Unless noted, all charts and tables sourced to MLPF&S Price charts for the equity securities referenced in this research report are available at http://www.ml.com/research/pricecharts.asp, or call 1-888-ML-CHART to have them mailed. [AH, ANT, ATK, BA, COL, ERJ, GD, GR, HEI, HEIA, IDE, INVN, LLL, LMT, MOGA, NOC, RTN, TGI, TXT, UDI, UTX] MLPF&S or one or more of its affiliates acts as a market maker for the recommended securities to the extent that MLPF&S or such affiliate is willing to buy and sell such securities for its own account on a regular and continuous basis. [BA, GR, LLL, TGI, TXT] MLPF&S or an affiliate was a manager of a public offering of securities of this company within the last 12 months. [AH, ANT, BA, ERJ, GD, GR, IDE, INVN, LLL, MOGA, NOC, TGI, TXT, UDI] MLPF&S was a manager of the most recent public offering of securities of this company within the last three years. 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In Germany, this report should be read as though Merrill Lynch has acted as a member of a consortium which has underwritten the most recent offering of securities during the last five years for companies covered in this report and holds 1% or more of the share capital of such companies. The analyst(s) responsible for covering the securities in this report receive compensation based upon, among other factors, the overall profitability of Merrill Lynch, including profits derived from investment banking revenues. OPINION KEY: Opinions include a Volatility Risk Rating, an Investment Rating and an Income Rating. VOLATILITY RISK RATINGS, indicators of potential price fluctuation, are: A - Low, B - Medium, and C - High. INVESTMENT RATINGS, indicators of expected total return (price appreciation plus yield) within the 12-month period from the date of the initial rating, are: 1 - Buy (10% or more for Low and Medium Volatility Risk Securities - 20% or more for High Volatility Risk securities); 2 - Neutral (0-10% for Low and Medium Volatility Risk securities - 0-20% for High Volatility Risk securities); 3 - Sell (negative return); and 6 - No Rating. INCOME RATINGS, indicators of potential cash dividends, are: 7 - same/higher (dividend considered to be secure); 8 - same/lower (dividend not considered to be secure); and 9 - pays no cash dividend. Copyright 2003 Merrill Lynch, Pierce, Fenner & Smith Incorporated (MLPF&S). All rights reserved. Any unauthorized use or disclosure is prohibited. This report has been prepared and issued by MLPF&S and/or one of its affiliates and has been approved for publication in the United Kingdom by Merrill Lynch, Pierce, Fenner & Smith Limited, which is regulated by the FSA; has been considered and distributed in Australia by Merrill Lynch Equities (Australia) Limited (ACN 006 276 795), a licensed securities dealer under the Australian Corporations Law; is distributed in Hong Kong by Merrill Lynch (Asia Pacific) Ltd, which is regulated by the Hong Kong SFC; and is distributed in Singapore by Merrill Lynch International Bank Ltd (Merchant Bank) and Merrill Lynch (Singapore) Pte Ltd, which are regulated by the Monetary Authority of Singapore. The information herein was obtained from various sources; we do not guarantee its accuracy or completeness. Additional information available. Neither the information nor any opinion expressed constitutes an offer, or an invitation to make an offer, to buy or sell any securities or any options, futures or other derivatives related to such securities ("related investments"). MLPF&S, its affiliates, directors, officers, employees and employee benefit programs may have a long or short position in any securities of this issuer(s) or in related investments. MLPF&S or its affiliates may from time to time perform investment banking or other services for, or solicit investment banking or other business from, any entity mentioned in this report. This research report is prepared for general circulation and is circulated for general information only. It does not have regard to the specific investment objectives, financial situation and the particular needs of any specific person who may receive this report. Investors should seek financial advice regarding the appropriateness of investing in any securities or investment strategies discussed or recommended in this report and should understand that statements regarding future prospects may not be realized. Investors should note that income from such securities, if any, may fluctuate and that each security's price or value may rise or fall. Accordingly, investors may receive back less than originally invested. Past performance is not necessarily a guide to future performance. Foreign currency rates of exchange may adversely affect the value, price or income of any security or related investment mentioned in this report. In addition, investors in securities such as ADRs, whose values are influenced by the currency of the underlying security, effectively assume currency risk. I, Ronald Epstein, hereby certify that the views expressed in this research report accurately reflect my personal views about the subject securities and issuers. I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or view expressed in this research report.