EFTA00604062.pdf

Essex Aviation Group March 24, 2017 Reference: GV Aircraft Upgrade Options This memorandum has been prepare by Essex Aviation ("Essex") for Elysium ("Elysium") to provide an overview of the options available to upgrade from the current 2002 GV to a pre-owned G550 or G650 aircraft. Essex has prepared an overview of the various levels of capital requirements necessary in order to upgrade to various aircraft types and ages and a commentary of anticipated refurbishment and or upgrade work that may need to be completed. For the purposes of this analysis, the assumption that will be used concerning the net proceeds Elysium could receive for the sale of the GV is $11.0M. The FANS/1A upgrade will assume to either have been completed or a slot will be in place for the upgrade to be completed at the time of the sale. All of the G550 aircraft are configured with the Honeywell Primus Epic Plane View avionics package that meets all the future avionics requirements and mandates. The majority of upgrades being done to G550 pre-owned aircraft revolve around exterior paint, interior refurbishments, upgrades to cabin entertainment and management systems, Wi-Fi systems and various other new technology features that are available. The G550 is currently scheduled to no longer be produced as of the end of 2018 and is being replaced by the 6600. The G650 aircraft are configured with an enhanced Honeywell Primus Epic Plane View II avionics package that also meets all the future avionics requirements and mandates. As with the G550, most upgrades considered for pre-owned aircraft revolve around either incorporating options that were not selected by the prior owner or new technology features that are available. Below is an overview of the various capital investment levels and the range of aircraft that can be acquired for both the G550 and G650 along with market information on the GV. Gulfstream G550 One item of note concerning the G550 market is although there is a large number of aircraft for sale, the number of aircraft configured with a forward galley and crew rest is very limited and is currently considered the highest demand configuration of buyers. $5M - $8M Capital Investment Representing a $16M - $19M Acquisition Cost 2004 — 2007 (17 Aircraft) • All aircraft will have had their first 96 month or 8 year major airframe inspection completed • Aircraft with original paint would need to be stripped and re-painted (estimated cost $275,000) 155 Fleet Street I Portsmouth, NH 03801 I Td: EFTA00604062 Essex Aviation Group • Aircraft with original interior would need at a minimum a full soft goods replacement or refurbishment and veneer touch-ups and repairs (estimated cost range $250,000 - $400,000) • Equipment or technology upgrades would need to be evaluated independently depending upon the aircraft's current systems and configuration $9M - $16M Capital Investment Representing a $20M - $27M Acquisition Cost 2008 - 2010 (13 Aircraft) • 2008 aircraft will have had their first 96 month or 8 year major airframe inspection completed • 2009 - 2010 aircraft will have their first 96 month or 8 year major airframe due or coming due in the next 18 months • Aircraft with original paint will likely need to be stripped and re-painted (estimated cost $275,000) • Aircraft that have had new paint or touch-up paint done would need to be evaluated independently unless a new paint scheme is desired • Aircraft with original interior would likely need at a minimum a full soft goods replacement or refurbishment and veneer touch-ups and repairs (estimated cost range $250,000 - $400,000) • Equipment or technology upgrades would need to be evaluated independently depending upon the aircraft's current systems and configuration $19M - $24M Capital Investment Representing a $30M - $35M Acquisition Cost 2011- 2014 (8 Aircraft) • The first 96 month or 8 year major airframe inspections will be due within a 2 — 5 year period • Aircraft with original paint may be approaching the need to be stripped and re-painted (estimated cost $275,000) • Aircraft that have had new paint or touch-up paint done would need to be evaluated independently unless a new paint scheme is desired • Interiors would need to be evaluated on a case by case basis and repairs and refurbishments quoted independently • Equipment or technology upgrades would need to be evaluated independently depending upon the aircraft's current systems and configuration No pre-owned G550 aircraft are currently listed for sale with a YOM of 2015 or newer. As part of every acquisition Essex communicates their exclusive representation of a buyer to the market and very often "Off-Market" aircraft opportunities are proposed as additional candidates for consideration. The last acquisitions completed by Essex have involved Off-Market aircraft identified through this process and we would anticipate additional candidate aircraft would be presented for consideration. Elysium — Gv Aircraft Upgrade Options Page 2 EFTA00604063 Essex Aviation Group The last quarterly data (Q4 2016) published on the G550 market reported the following: Available For Sale / 24 Month High — 40 in Q4 2016 Available For Sale / 24 Month Low — 23 in 01 2015 Transactions in 2016 — 31 Aircraft Transactions in 2015 — 27 Aircraft Advertised Price Reductions during Q4 2016 — 9 Average Price Reduction — (5.7%) Average Sale Price Q4 2016 - $25.2M Sale Price Range Q4 2016 - $17.5M - $38.0M Average Days on Market — 250 % Equipped with Crew Rest Area — 55% Below is a summary of the last seven (7) G550 aircraft currently sold, specifically of YOM 2010 and newer: January 2017 2014 - S/N 5482 Sell Price $37.5M Hours 373 Fwd Galley 16 Passengers December 2016 2013 — S/N 5421 Sell Price $31.25M Hours 1,184 Fwd Galley 16 Passengers November 2016 2010 - S/N 5304 Sell Price $31M+ Hours 2,226 Fwd Galley 14 Passengers November 2016 2010 — S/N 5221 Sell Price $25M Hours 2,378 Fwd Galley TBD Passengers Elysium — GV Aircraft Upgrade Options Page 3 EFTA00604064 Essex Aviation Group November 2016 2010 — S/N 5259 Sell Price $28.5M Hours 1,443 Fwd Galley 16 Passengers October 2016 2014 — S/N 5492 Sell Price $38M Hours 253 Aft Galley 14 Passengers August 2016 2013 — S/N 5416 Sell Price $38M Hours 1,037 Fwd Galley 14 Passengers Gulfstream G650 Items of note concerning the G650 market include a steady decrease in available aircraft from the peak of 21 aircraft for sale in Q1 2016. There is currently a lack of "like-new" or "ferry-time" aircraft for sale currently versus a peak of 8 in the beginning of 2016. A majority of the aircraft on the market has been listed for sale for an extended period of time and the feeling is that these sellers will be motivated to move the aircraft especially ones with higher total time. Any upgrade work being done on G650 pre-owned aircraft are normally standard options that were not selected as part of the original specification process for the aircraft. No pre-owned G650 aircraft are currently listed for sale with a YOM of 2010 or 2011 and none are a YOM of 2016 or newer. $34M - $44M Capital Investment Representing a $45M - $55M Acquisition Cost 2012 - 2015 (10 Aircraft) • First 96 month or 8 year major airframe inspection will be due within a 3 — 6 year period • Aircraft with original paint should only require touch-up paint unless a new paint scheme is desired • Aircraft that have had new paint or touch-up paint done would need to be evaluated independently • Interiors would need to be evaluated on a case by case basis and repairs and refurbishments quoted independently • Equipment or technology upgrades would need to be evaluated independently depending upon the aircraft's current systems and configuration Elysium — GV Aircraft Upgrade Options Page 4 EFTA00604065 Essex Aviation Group The latest quarterly data (Q4 2016) published on the G650 market reported the following: Available For Sale 24 Month High — 21 in 01 2016 Available For Sale 24 Month Low — 4 in 01 2015 Transactions in Q4 2016 — 4 Aircraft Transactions in Q4 2015 — 2 Aircraft Advertised Price Reductions — 5 Average Price Reduction — Data Not Available Average Sale Price - 2016 Year to Date (includes G650ER) - $60.6M Average Day on Market — 314 % Available with Forward Galley — 85% % Equipped with Crew Rest Area — 85% Below is a summary of the last eight (8) G650 aircraft currently sold: March 2017 2015 - SM 6109 Sell Price $52M Hours 544 Fwd Galley 15 Passengers March 2017 2013 - S/N 6047 Sell Price $TBD Hours TBD TBD Galley 16 Passengers February 2017 2013 - S/N 6028 Sell Price $52M Hours 700 Fwd Galley 11 Passengers January 2017 2016 - S/N 6204 Sell Price $642M Hours 31 Fwd Galley 13 Passengers Elysium — GV Aircraft Upgrade Options Page 5 EFTA00604066 Essex Aviation Group December 2016 2014 - S/N 6099 Sell Price $54M Hours 400 Fwd Galley 14 Passengers October 2016 2016 — S/N 6196 Sell Price $TBD Hours 37 Fwd Galley 15 Passengers October 2016 2013 - S/N 6043 Sell Price $50.2M Hours 743 Fwd Galley 16 Passengers October 2016 2013 - S/N 6006 Sell Price $TBD Hours 37 TBD Fwd Galley 13 Passengers Gulfstream GV Market Data Items of note concerning the GV market include that it continues to be the most stable market of the large cabin pre-owned Gulfstream. Although there were a couple of new GV's brought to the market in Q4, the pricing continues to be stable with no price reductions indicated by sellers during Q4. The last quarterly data (Q4 2016) published on the GV market reported the following: Available For Sale 24 Month High — 23 in Q2 2015 Available For Sale 36 Month Low — 7 in Q3 2016 Transactions in Year to Date 2016 —16 Aircraft Transactions in Year to Date 2015 — 26 Aircraft Advertised Price Reductions — 0 Average Sale Price Q4 2016 - $9.7M Average Days on Market — 314 Elysium — GV Aircraft Upgrade Options Page 6 EFTA00604067 Essex Aviation Group % Available with Forward Galley — 55% % Equipped with Engine Program — 77% Below is a summary of the last five (5) GV aircraft that were sold: December 2016 2000 - S/N 572 — Austrian Registered Sell Price $10.25M Hours 7,282 Forward Galley 16 Passengers November 2016 2000 - S/N 601— United States Registered NetJets Aircraft Sell Price $8.6M Hours 14,579 Aft Galley 14 Passengers November 2016 2003 - S/N 687 — Austrian Registered Sell Price $11.25M Hours 8,221 Forward Galley 14 Passengers September 2016 2001 - S/N 629 — United States Registered Sell Price $10.6M Hours 4,606 Aft Galley 12 Passengers September 2016 2002 - S/N 672 — United States Registered Sell Price $11.5M Hours 7,339 Aft Galley 14 Passengers Elysium — GV Aircraft Upgrade Options Page 7 EFTA00604068