$1 Billion Opportunity as Boeing Selects Smiths Aerospace for B767 Tanker.

Business & Aerospace/Defense Editors

GRAND RAPIDS, Mich.--(BUSINESS WIRE)--March 13, 2002

The Boeing Company has selected Smiths Aerospace (LSE:SMIN) to supply the hose and drogue refuelling system for the B767 Global Tanker Transport Aircraft (GTTA).

The GTTA is competing for a global market of over 500 tanker aircraft to be built over the next 30 years. The selection provides Smiths Aerospace with the opportunity for generating well over $1 billion in sales of refuelling hardware and associated in-service support.

Development of the systems will commence immediately with initial deliveries on aircraft scheduled for delivery to Italy and Japan from 2005. Boeing is currently in negotiations with the United States Air Force for the lease of 100 aircraft and is part of a consortium bidding to provide the Future Strategic Tanker Aircraft for the UK Ministry of Defence.

Expressing his pleasure at the Boeing selection, Keith Butler-Wheelhouse -- Chief Executive of Smiths Group, said: "The combination of TI's aerostructures capability and Smiths' resources have produced precisely the type of new business opportunity we envisaged from the merger."

Key to this success was the integrated system offered by Smiths Aerospace. The technology for the hose unit, the major part of the system, has been acquired through the agreement for Smiths to purchase Able Corporation. Smiths has agreed a price of $17.5m in cash for Able plus up to $10m deferred over 5 years.

In addition to its microprocessor-based refuelling hose systems, Able makes pumps, electric motors and fluid control products for aircraft and military land vehicles. It has annual sales of $12 million, which will grow considerably as a result of the 767 tanker programme. Able has 65 employees and is based near Los Angeles, California.

"We are proud to support Boeing on this important and valuable program," commented John Ferrie, Smiths Aerospace Group Managing Director. "This selection is indicative of the value customers place on the integrated engineering capabilities we provide. Our acquisition of Able further strengthens our existing fuels business."

Smiths Aerospace has extensive experience in both military and commercial fuel systems and structural components. The program combines a breadth of capabilities of Smiths Aerospace in program management and systems/software engineering from its Michigan facility, manufacturing from Florida, extensive structural component engineering and manufacturing from its aero structures business in Southampton UK, and primary hose and drogue in-flight refuelling components from Able in California.

The Smiths Aerospace hydraulically powered hose and drogue refuelling system contains the latest technology which provides significantly improved response performance. In addition, the system incorporates numerous features that substantially enhance system reliability and maintainability.

This latest selection reinforces Smiths Aerospace's position as a preferred supplier to Boeing. Smiths Aerospace was previously selected for the 767 GTTA Mission Control System using a derivative of the Company's advanced commercial flight management system in service on Boeing 737 aircraft. The in-air refuelling system interfaces with the Mission Control System to provide Boeing's customers with an integrated solution to accomplish the aircraft's primary mission. Late last year, U.S. Congress granted the Air Force the authority to negotiate a lease for up to 100 767 Tankers as the first step in replacing its Eisenhower-era KC-135 fleet. Negotiations are expected to be completed this summer.

Smiths Aerospace is the leading transatlantic aerospace equipment company, with half its 12,000 staff and $2 billion revenues in North America. Smiths Aerospace, a part of Smiths Group plc, holds key positions in the supply chains of all major military and civil aircraft and engine manufacturers and is a world-leader in electronic systems, actuation systems, precision components and detection & protection systems.