Company Update

Elmer Doty
President and CEO

Keith Howe
Chief Financial Officer

Forward Looking Statements

Except for statements of historical fact, the statements
contained in this document are forward-looking statements
as such term is defined in the private securities litigation
reform act of 1995.
These forward-looking statements include statements
regarding intent, belief or current expectations of the
company and its management. Such forward-looking
statements are not guarantees of future performance and
involve a number of risks and uncertainties that may cause
the companys actual results to differ materially from those
indicated by such forward-looking statements.

Slide 2

Agenda

Company Update
787 Program
2006 Financial Overview

Slide 3

Company Update
Who We Are:
Major developer and producer of structural assemblies for
commercial and military aircraft
A rich cultural history from LTV, Northrop, Grumman, Textron

Our key products:

Boeing: 747, 767, 787 fuselage structures, 777 flaps, 737 doors
Airbus: A319/320, A330/340 wing and control surface subassemblies
Military: C-17, C-130, V-22 empennage and other structures,
H60 cabin subassemblies
Business jet: Gulfstream G450, G550 wings

Recent history:
Company struggled in adapting to post-9/11 commercial production

rates while starting up 787 and other new programs

Recovery well underway now positioning for future growth

Slide 4

Status of Recovery Efforts

Structural moves to restore operating cash flow:
Annual overhead costs reduced by $100M+
Company wide staff above shop floor reduced 25%+
Pension and benefits closer to industry average
Tighter focus on budgets and spending controls
Many contract issues have been fixed
Resulting in $35M+ a year from higher prices
Operational excellence program is underway

Safety: Injury rate has improved 18%

Quality: Defect rate has improved 19%
Cost efficiency: Cost per hour has improved 20%
787, 747-8 program execution are on track
Slide 5

Current Revenue Mix

Business Jets 19%
Military 36%

Boeing-Airbus 45%

$2006 Revenue $1.55B

$1.55
Balance
Balanceexpected
expectedto
toshift
shiftas
asC17
C17declines
declinesand
and787,
787,747-8
747-8ramp
rampup.
up.
Slide 6

Boeing-Airbus Unit Delivery Forecast

1400

Annual Deliveries

1200
1000
800
600
400
200
0

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Source: Airline Monitor

Given
Givenforecast
forecastfor
for787
787and
and747-8
747-8we
wecould
couldfare
fare
better
betterin
in2011-2015
2011-2015than
thanthis
thistrend.
trend.
Slide 7

C17 Status

FY07 Budget:
Total of 22 aircraft (our production thru mid-2009)

FY08 Budget:
Zero new aircraft in Presidents Budget Request
Boeing has ordered cancellation of long-leads
Talk of some aircraft in FY08 Congressional markup

Expect in FY09:
Zero new aircraft in Presidents Budget Request

Potential
PotentialC5A
C5Areplacement
replacementprogram
programor
or
commercial
commercialsales
salescould
couldextend
extendproduction.
production.
Slide 8
Vought Aircraft Industries, Inc. PROPRIETARY

Longer Term
Transition through major market shifts
Start up 787, 747-8
Forecast for each continues to grow
Support tanker procurement (767, A330)
Manage through C17 closeout
Facility rationalization necessary

Continue to streamline business execution

Drive from cost-plus-defense to commercial-best-practice systems
Focused implementation of Vought Operating System and Lean Six Sigma
Intelligent management of vertical integration and sourcing

Selective pursuit of new platform starts with OEMs

787-like broadly-based partnering opportunities
Through
Through2007
2007our
ourprimary
primaryfocus
focuswill
willremain
remainon
on
increasing
increasingoperational
operationalcash
cashflow.
flow.
Slide 9

787
Update
Slide 10

Vought
Global Aeronautica

Charleston, SC Airport

Teammate Work Scope

Alenia

Alenia

47

KHI

48
FHI

Aft Fuselage

Flown to Boeing Everett

for Final Assembly

Assembles, Installs
& Integrates
Systems & Validates
Mid Fuselage
Vought/Alenia Joint Venture
Slide 12

Major Supply Chain Routing

787 Final
Integration

Alenia
Global Aeronautica

Mitsubishi
Kawasaki
Fuji

Vought

Slide 13

Alenia Sections Preparing for Delivery

Slide 14

Automatic Fiber Placement

Slide 15

Section 47 at Automatic Riveter

Slide 16

Section 48

Slide 17

Financial Overview

2006

Funded Backlog is up 39%

Year Ended

($ Millions)

2006
Backlog
Boeing/Airbus
Military
Business Jets
Total

$2,152
576
563
$3,291

2006 B/(W) 2005

2005
$1,286
711
371
$2,367

$866
(135)
193
$924

67%
-19%
52%
39%

Funded Backlog Balance

3,500
3,000
2,500
2,000
1,500

Includes
Includesonly
onlyfunded
fundedorders
orders
Represents
2-3
years
of
Represents 2-3 years ofdeliveries
deliveries
Commercial
Commercialup
updue
duetoto787
787
Business
Jets
up
due
to
Business Jets up due toGV
GVrate
rateincrease
increase
Military
down
due
to
reduced
C17
Military down due to reduced C17

1,000
500
2002

2003

Commercial

Slide 19

2004
Bus Jets

2005
Military

2006

2006 Performance
($ Millions)

Sales
Cost of Sales
SG&A
Total Cost of Sales

Year Ended
2006 B/(W)
2006
2005
2005
$1,551
$1,297
$254
1,283
236
1,519

1,238
234
1,472

(45)
(2)
(47)

Operating Income

32

(175)

207

Net Income/(Loss)

($37)

($230)

$193

Higher program margins and lower costs are improving our profitability

Slide 20

Ongoing Sales (excluding settlements)

Year Ended

($ Millions)

2006
Ongoing:
Boeing/Airbus
Military
Business Jets
Total

$629
561
262
$1,452

2005
$603
472
223
$1,297

2006 B/(W) 2005

$27
89
39
$155

4%
19%
17%
12%

Positive
Positivecontributing
contributingfactors:
factors:
Commercial
Commercial
Increased
Increased747,
747,767
767and
and777
777deliveries
deliveriespartially
partiallyoffset
offsetby
bylower
lowerAirbus
Airbusdeliveries
deliveries
Military
Military
Increased
Increasedproduction
productionfor
forthree
threeprograms:
programs: Global
GlobalHawk,
Hawk,H-60
H-60and
andC5
C5
Business
BusinessJets
Jets
Increased
Increaseddeliveries
deliveriesfor
forGulfstream
Gulfstreamprograms
programs

Slide 21

Forward Losses have stabilized

($ Millions)

Forward
Loss
Additions
Q106
Q206
Q306
Q406

$25
$7
$8
($4)

Forward
Loss
Burndown
($18)
($15)
($17)
($16)

Net
Change
$7
($8)
($9)
($20)

Ending
Balance
$71
$63
$54
$34

Burn
Burndown
downshould
shouldcontinue
continueatat$15-20
$15-20million
millionper
perquarter
quarter
Improved
Improvedperformance
performanceresulted
resultedininQ4
Q4forward
forwardloss
lossreversals
reversalsofof($4M)
($4M)for
forseveral
several
programs
programs

Slide 22

2006 Adjusted EBITDA

($ Millions)

2006
Net Income

($37)

Interest, net
Income taxes

59
(2)
$21

EBIT
Depreciation and Amortization

59

EBITDA
% M argin

Adjustments
Non-recurring investment in Boeing 787
Unusual charges - Plant consolidation, non-recurring program and other
Impairment charge and loss on disposal of property plant and equipment
Pension & OPEB - Non-cash expense and curtailment
Other
Total Adjusted EBITDA
% M argin

Total Adjusted EBITDA, excluding effects of non-cash benefits

% M argin

Slide 23

Year Ended
2006 B/(W)
2005
2005
($230)
47
0
($182)
72

$193
12
(2)
$203
(13)

$80

($110)

$190

5.2%

-8.5%

13.7 pts

90
1
11
(3)
6
$185

66
158
12
51
4
$180

11.9%

13.9%

$188

$129

12.1%

10.0%

24
(157)
(1)
(54)
2
$5
-2.0 pts

$59
2.1 pts

2006 Sources and Uses of Cash

($ Millions)

$200
82

$150
$100

26

93

Other

Year End 2006

(47)

58

$50

(35)
10

$0
Year End 2005

($50)

Cash from
Operations
(excluding Q2
settlements and
787)

Q2 Settlements

787 (net of
advances,
settlements,
inventory and
capital)

Capital
Expenditures
(excluding 787)

($100)

Year end cash position increased due to operational improvements

and customer settlements

Slide 24

2006 Cash from Operations

($ Millions)

Year Ended

Net Operating Activities

Capital Expenditures
Free Cash Flow
Q2 Settlements
Free Cash Flow from Ongoing Operations

2006
$173
(115)
$57
(82)
($25)

2005
($65)
(147)
($212)
($212)

B/(W) than
Prior Year
$238
32
$270
(82)
$188

Improved
Improvedcash
cashfrom
fromoperations
operationsdue
duetotoimproved
improvedprogram
program
performance
and
customer
settlements
and
advances
performance and customer settlements and advances
2006
2006improvements
improvementsoffset
offsetby
by$17M
$17Mofofincreased
increasedcash
cashusage
usagefor
for
benefit
benefitplans
plansand
and$24M
$24Mofofincreased
increased787
787period
periodcosts
costs

Slide 25

Supplemental Financial Data

GAAP Reconciliations
($ Millions)
Q4
2006
Net Income

($16)

$9

16
(2)

14
-

2
(2)

$8

($1)

$9

$21

15

17

(2)

59

$23

$16

$7

$80

30

25

90

66

24

2
2
(2)
4

14
1
5
(6)

(13)
0
(8)
10

1
11
(3)
6

158
12
51
4

(157)
(1)
(54)
2

$180

$4

EBIT
Depreciation and Amortization

Debt Covenant Adjustments and Description:

Non-recurring investment in Boeing 787
Unusual charges Plant consolidation & other non-recurring program costs and
settlements
Asset impairment & Loss on Sale of property, plant and equipment
Pension & OPEB curtailment and non-cash expense related to FAS 87 & FAS 106
Other
Total Adjusted EBITDA

2006

$59

$56

$3

($37)
59
(2)

$185

Q4
2006
Net cash provided by (used in) operating activities

($63)

22

63

$75

Revised as of 4/4/07

Slide 27

2005

$97

Less: Capital Expenditures

Free Cash Flow

Year Ended
2006 B/(W)
2005
2005

($6)

Interest, net
Income taxes

EBITDA

2005

2006 B/(W)
2005

($126)

2006 B/(W)
2005

2006

($230)
47
($182)
72
($110)

$193
12
(2)
$203
(13)
$190

Year Ended
2006 B/(W)
2005
2005

$160

$173

($65)

41

115

147

$201

$57

($212)

$238
32
$270