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Business Aviation Users Studies TRB Business Aviation Subcommittee Presented by: Dr. Tulinda Larsen January 16, 2013

Business Aviation Users Studies TRB Business Aviation Subcommittee Presented by: Dr. Tulinda Larsen January 16, 2013. NEXA’s Business Aviation User Studies include:. These 2001 reports provided important validation of the tangible benefits that business aviation contributes corporate America

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Business Aviation Users Studies TRB Business Aviation Subcommittee Presented by: Dr. Tulinda Larsen January 16, 2013

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  1. Business Aviation Users Studies TRB Business Aviation Subcommittee Presented by:Dr. Tulinda Larsen January 16, 2013

  2. NEXA’s Business Aviation User Studies include: These 2001 reports provided important validation of the tangible benefits that business aviation contributes corporate America They have had strong and continuing value to charter operators, pilot owners, manufacturers and corporate flight departments in the intervening years In the 2009 study, authors borrowed the best ideas from these successful studies, incorporated new data from S&P500 large publically traded companies The 2010 study looked at small and medium enterprise companies In 2001, NBAA And GAMA released two studies performed by Arthur Andersen, under the direction of Michael Dyment, now Managing Director of NEXA The conclusion of all four studies : Companies in America that used business aviation outperformed nonusers across a wide range of financial and nonfinancial metrics regardless of company size.

  3. Part I: S&P 500 study, found: • Among our study group of large companies, users outnumber nonusers3:1 • Users consistently outperform nonusers across financial metrics • Revenue growth • Profit growth • Asset utilization • Shareholder return • This outperformance trend holds over time, independent of general market conditions

  4. S&P 500 “Best of” Performance 4

  5. Expanding scope • Results from 2009 were compelling and help to justify and promote use of business aviation • Expanded scope in 2010 to include S&P SmallCap 600 companies • SmallCap segment of the U.S. equities market covers approximately 3% of the U.S. equities market “Part I” - 2009 SME BizAv -“Part II” - October 2010

  6. Part II: Small and Medium Enterprises • 1:3 One user for every three nonusers (3:1, S&P 500) • Users outperform in all nine financial metrics analyzed 6

  7. Conclusions Results showed that companies of all sizes that used business aviation had three times or more the total shareholder return on growth, share price growth, and EBITDA growth (earnings before interest, taxes, depreciation, and amortization) when compared to similar companies that did not use business aircraft.

  8. Part III: Government Use of Aircraft

  9. Government Use of Aircraft • Similar to business use of aircraft, government agencies operate and charter aircraft to provide safe, reliable, cost-effective on-demand air transportation. • This report carries a powerful message: • Aircraft enhance taxpayer value by providing public safety and security, more effective government, protecting public health and welfare, facilitating economic growth, improving tax dollar efficiency, promoting good government relations, and improving compliance. • Simply stated, it is another tool in the toolbox for government agencies to utilize.

  10. “UBTV” Framework

  11. Quotes ….

  12. Most creative … Idaho • Idaho has the most creative use of state aircraft. The Department of Aviation has created a website where any government agency can book a seat on state aircraft for intrastate travel, a service promoted as “Carpool in the Sky.” The site also has cost comparisons for travel on state aircraft versus driving or other modes of transportation.

  13. Most impressive …. Utah • The state of Utah was named by Forbes magazine in 2012 as the number one “Best State for Business and Careers” for the second year in a row. • Pat Morley, Director of Aeronautics for the state, credits the state’s use of King Air aircraft for Utah’s government transportation needs as a significant contributing factor to Utah’s business environment. • Utah was featured in King Air magazine cover story: Fiscally Fit: King Air Assists Utah’s Positive Economic Environment

  14. Conclusions • This report carries a powerful message to the public and government policy makers that government aircraft are important tools in creating taxpayer value. • As stated at the beginning, we designed this study to answer three important questions: • How do governments use aircraft? Numerous uses were identified that clearly prove that government aircraft are the best tool for the job. • What are the benefits provided by government aircraft? There are financial and nonfinancial benefits provided by government aircraft. • Can government use of aircraft improve taxpayer value? Government use of aircraft clearly improves taxpayer value.

  15. Part IV: Business Aviation: Maintaining Shareholder Value Through Turbulent Times • Released at NBAA convention: • “The new study showing that even during the worst economic times since the Great Depression, companies that relied on business aviation outperformed the field in important measures of shareholder value and recovered from the recession more quickly than their peers across a range of industries representing the U.S. economy.” • Thank you to our sponsors !! • NBAA • Bombardier • Embraer • JETNET, LLC

  16. THE Great Recession of 2008

  17. In difficult time, companies turn to business aviation S&P 500 Business Aviation Users 2007-2012 • Companies using business aviation now account for 84% of the S&P 500 companies and 96% of total revenue • All of the top 100 of the S&P 500 companies, by market cap, use business aviation • 74% of the companies added to the S&P 500 companies between 2007-2012 use business aviation • A significant number of S&P 500 companies dropped from the S&P 500 from 2007-2012 were non-users of business aviation.

  18. Business Aviation Users recovered faster and returned to growth Non-users have not recovered Revenue Growth Indexed to 2007

  19. Business Aviation Users brought back workers faster and now employ more than in 2007 Number Employees Indexed to 2007

  20. Business Aviation Users outperform non-users on multiple metrics

  21. Conclusions • Our central finding is that the benefits of business aviation are measurable and significant, especially during times of economic turmoil and recession. • This report carries a powerful message to corporate boards, government policy makers and industry leaders: Business aviation is a tool that provides a unique ability for American companies to respond to severe economic downturns. In its unique role, business aviation is without substitute. • We found strong interdependencies between an organization’s aircraft utilization strategies, associated benefits, and key drivers of organizational resiliency. Further, when used wisely and aggressively, business aircraft can help a company’s business performance through tough economic conditions.

  22. Contact Information NEXA Advisors 1250 24th Street, NW Suite 300 Washington, D.C. 20037 Tel: +1 202 558 7417 Tulinda Larsen tulinda@nexacapital.com www.nexacapital.com

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