1. 1 V-22 Update for AHS - Changing the Conversation Team Osprey

2. 2 There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things. --Niccolo Machiavelli, 1513

3. Renew? Abandon? Incremental Improvements Sustain competitive position Rejuvenate? Grow new business Improve competitive position Launch new business Establish competitive position Technology Life-cycle Curve 1990195019702011 Legacy Fleets Innovator's Dilemma EMBRYONICGROWTHMATUREAGING INDUSTRY MATURITY OVER TIME SCOPE OF ADDITIONAL TECHNOLOGICAL ADVANCE Natural Limit of Technology 199019501970 2011 Tiltrotors

4. Tiltrotor and Tiltwing History Baynes Heliplane Transcendental 1-G Boeing VZ-2 Bell XV-3 Bell XV-15 Canadair XL-84 Curtiss-Wright X-19 LTV-Hiller-Ryan XC-142 Bell X-22 Doak VZ-4 Kaman K-16 Bell Boeing V-22

5. Bell Boeing 5 n Fuselage n Landing Gear n Avionics n Electrical and Hydraulic n Performance n Flying Qualities n Empennage n Ramp Philadelphia, PA 50/50 Strategic Alliance Agreement Fort Worth, TX n Composites n Rotor n Dynamics n Wing / Nacelle n Over-wing Fairing n Final Assembly n Flight Test/Delivery Amarillo, TX

6. 6 Our Customers USMC 360 MV-22 Combat Assault & Amphibious AssaultCombat Assault & Amphibious Assault Sustained Land OperationsSustained Land Operations USSOCOM 50 CV-22 Long Range Special Operations (Infil / Exfil / Resupply)Long Range Special Operations (Infil / Exfil / Resupply) Contingency OperationsContingency Operations USN 48 MV-22 Fleet Logistics SupportFleet Logistics Support Personnel RecoveryPersonnel Recovery Special Warfare SupportSpecial Warfare Support

7. 7 Our Product Multi-role rotary-wing AND multi-role fixed-wing platform Multi-role rotary-wing AND multi-role fixed-wing platform Flexibility of a helicopter; speed and range of a turboprop Flexibility of a helicopter; speed and range of a turboprop Designed for combat Designed for combat 0 (hover) -282 kt speed range 0 (hover) -282 kt speed range 1000 nm unrefueled range 1000 nm unrefueled range 24 troops/12 litters/2 external hooks 24 troops/12 litters/2 external hooks Aerial refuelable Aerial refuelable Shipboard compatible Shipboard compatible CV-22 MV-22

8. 8 Our Program 10 USMC and 2 AFSOC Squadrons operational 10 USMC and 2 AFSOC Squadrons operational 134 aircraft fielded (118 MV-22 /16 CV-22) 134 aircraft fielded (118 MV-22 /16 CV-22) 5-year, Multi-Year Procurement (MYP) contract signed Mar 2008 5-year, Multi-Year Procurement (MYP) contract signed Mar 2008 – 167 aircraft (141 MV-22, 26 CV-22) with options 5-year Performance Based Logistics (PBL) Contract 5-year Performance Based Logistics (PBL) Contract – Phase I (Integrated Logistics Support Management) signed Jan 09 – Phase 1.5 – (Reliability & Maintainability improvements) signed Jun 09 – Phase II (Supply Chain Management) Rolls Royce Engine PBL Rolls Royce Engine PBL 100,000+ flight hours on the fleet; over 46% in the last two years 100,000+ flight hours on the fleet; over 46% in the last two years Operationally deployed; combat proven Operationally deployed; combat proven – 10 USMC (3 OIF, 3 OEF, 4 MEU) – 5 AFSOC (Honduras, Mali, OIF x2, OEF) Fielded and maturing

9. Program Overview MS I MS III MS II Readiness Cost SafetyReliabilityLogistics MS II+ Capability Cost Readiness Investing in Resources #1 - People Objectives Measures Actions Trust

10. 10 New Operational Perspectives Performs current missions more effectively - increased success rate Performs current missions more effectively - increased success rate Performs current missions with less assets - reduced force structure/cost Performs current missions with less assets - reduced force structure/cost Performs new missions unachievable with legacy platforms - growth Performs new missions unachievable with legacy platforms - growth NOT A HELICOPTER NOT AN AIRPLANE Paradigm shift required to fully benefit from V-22’s unique capabilities

11. Platform Life Cycle Costs - Development & Qualification - Fly-away/Initial Spares - Operation & Support for 10,000+ flight hours Procurement Focus Mission Costs - Deployment/Re-deployment - Fixed wing & helo support - Tanker support - Ship movement Infrastructure - Bases and facility support - Manpower - Environmental implications Intangibles - Political - Multi-mission flexibility - Principles of War enabler Total Budget Focus New Ownership Perspectives 11 Tiltrotor Cost and Risk Avoidance Increased Mission Success at Lower Total Mission Cost

12. World-Class Training MCAS NEW RIVER AND KIRTLAND AFB 12 Training System Foundation Training System Foundation – FAA Level D simulator – Networked to High Level architecture Curriculum driven approach Curriculum driven approach – Directly supports warfighter through mission-linked tactical flight training – Standardizes training methods – Reduces time and cost of training – Reduces required number of aircraft & flight hours for training – Increases number of aircraft available for operational missions High Impact, Networked Training - Today

13. Susceptibility/Vulnerability Relationship PLATFORM CHARACTERISTICS SUSCEPTIBILITY INTELLIGENCEMISSIONPLANNINGINTELLIGENCEMISSIONPLANNING THREAT SUPPRESSION RANGE SPEED SIGNATURE CONTROL Radar Infrared Visual Acoustic Electronic Emissions COUNTERMEASURES & SIGNATURE CONTROL Radar Warning System Missile Launch Warning Countermeasures DIRCM (CV Only) SIRFC (CV Only) DETECTION & ACQUISITION AVOIDANCE THREAT & KILL TOLERANCE SURVIVABILITY ENGAGEMENT & HIT AVOIDANCE VULNERABILITY VULNERABILITY REDUCTION Fire Suppression Broom Straw Controlled Wing Failure Ballistic Tolerance CBR&N Component Redundancy (with Separation) Armor “Kill Chain”

14. 14 Demonstrated Terminal Area Operations New tactics, techniques and procedures developed daily for a new way to fly

15. 15 Demonstrated Operational Utility

16. 16 Demonstrated Shipboard Compatibility

17. “I could dominate [Al Anbar Province] because I had V-22s… I couldn’t do what I did with just helicopters.” MGen Kelly, CG MNF-W “Turns Texas into Rhode Island.” BGen Alles, CG ACE MNF-W 10,000 flight hours - 6,000 sorties - 45,000 passengers Operation Iraqi Freedom Oct 2007 - Apr 2009

18. Operation Enduring Freedom Nov 2009 - present “4 MV-22B's hit two separate zones simultaneously on the southern end of the town. The two MV's came out of the sun and they couldn't see them or hear them until they were right on top of them--less than 30 seconds out.” - Marine Forward Air Controller “4 MV-22B's hit two separate zones simultaneously on the southern end of the town. The two MV's came out of the sun and they couldn't see them or hear them until they were right on top of them--less than 30 seconds out.” - Marine Forward Air Controller General support, direct action raids, deliberate assault, resupply, and CASEVAC at ranges un-executable by legacy assets. V-22 is shrinking the battlespace

19. “The V-22 can reach the fight and be effective in the fight like no other aircraft that has ever been embarked on these ships. And in doing so, it enhances the ship’s ability to contribute to those missions.” - Commanding Officer, USS Bataan “The V-22 can reach the fight and be effective in the fight like no other aircraft that has ever been embarked on these ships. And in doing so, it enhances the ship’s ability to contribute to those missions.” - Commanding Officer, USS Bataan Marine Expeditionary Units May 2009 - present

20. Humanitarian Assistance/Disaster Relief: Haiti, Jan 2010 Operation Unified Response “…the speed of the Osprey allows us to land multiple teams in areas all throughout Northern Haiti, leave them there with enough time to get a good assessment and retrieve all these teams before nightfall - only using two Ospreys.” - Capt Robert Shuford, 24 th Marine Expeditionary Unit

21. Operation Iraqi Freedom Jul-Nov 09  6 CV-22s  7,000nm self-deployment in 6 days from Florida to Iraq  45 Direct Action missions - all to formation brown-out landings  123 Combat Support Missions – 30,250 lbs of cargo  2349 Passengers/Assaulters  Supported separate long-range National contingency mission; 455 nm from FSB to target = IDEAL PLATFORM! “The CV-22 is an extremely stable platform and its inherent navigation system and heads down display symbology lend itself well to the mission set” - 8 SOS/CC

22. Operation Enduring Freedom Apr – Oct 10  5 CVs deployed via commercial sea lift  875 sorties – 928 hours  72 Direct Action missions - all to formation LVAs  42 Combat Support Missions – 87,433 lbs of cargo  4,829 Assaulters/Passengers  284 potential terrorists in custody

23. Where We Are Headed

24. Lessons Learned Design - As programs move through acquisition phases, ratio of assumption-to-knowledge is dependent on technological predecessors. (V-22 is first of type) Design - As programs move through acquisition phases, ratio of assumption-to-knowledge is dependent on technological predecessors. (V-22 is first of type) Operation – Community starts with what they know (fly tiltrotors like helicopters) Operation – Community starts with what they know (fly tiltrotors like helicopters) Reliability - Small percentage of components have lower than expected reliability Reliability - Small percentage of components have lower than expected reliability – Normal Fleet introduction issues amplified by combat & deployments – Sparing and supplier capacity based on optimistic predictions – Unforeseen failure rates impact readiness and operating costs V-22 has a higher assumption-to-knowledge ratio than any recently fielded platform

25. RCM/Sustained Maintenance Planning

26. V-22 Key Improvement Areas Maintainability Maintainability – Improve troubleshooting to reduce "Could Not Duplicate" gripes – Improve aircraft “grooming” techniques for preventative maintenance Supply Support Supply Support – Execute a contracting strategy required to incentivize support Appropriately-scoped PBL and selected break-outs direct to suppliers Appropriately-scoped PBL and selected break-outs direct to suppliers – Improve Velocity and Capacity of Production/Repair – Improve test/check/repair capability closer to the flightline Core Reliability Core Reliability – Increase Component Reliability (e.g. generator, air valves) – Increase System and Functional Reliability and Robustness (e.g. power plant, wiring, nacelle cooling) Making V-22 As Ready and Affordable as it is Effective and Survivable

27. Thank you for your time. 27 Questions?