Cobham Regulatory News (COB)

26 July 2018

Legal Entity Identifier: 213800A41R9NL49E5632

KC-46 Tanker Programme

Progress Update

Cobham is today providing an update on its US KC-46 tanker programme. Qualification testing on the Centerline Drogue System (CDS) has been completed and submissions have been supplied to support achievement of Supplementary Type Certification of the aircraft, with CDS production deliveries having commenced in the period. In addition, the first Federal Aviation Administration conformed Wing Aerial Refuelling Pods (WARP) were delivered in June 2018 to support flight certification testing.

Boeing Damages Assertion

Whilst there has been progress as outlined above, Boeing has made as yet unquantified damages assertions relating to the programme. As a consequence, Boeing is witholding payment of Cobham's KC-46 CDS and WARP invoices. Cobham is formally disputing these assertions.

Cobham Costs to Complete

Additionally, completion of CDS qualification has taken longer and been more challenging than expected. Qualification of the WARP is in its early stages with risks relating to schedule and cost. Completion could take significantly longer than originally planned, and this increases concurrency risk as well as base cost assumptions. The latest estimate of the costs to complete will result in an additional non-underlying charge of c£40m in Cobham's Interim Results for 2018.

2018 Interim Results

Cobham will release its Interim Results for the six months ended 30 June 2018 on 3 August 2018 and expects to announce no change to its full year 2018 underlying profit guidance.

The information contained within this announcement is considered to constitute inside information as stipulated under the Market Abuse Regulations (EU) No.596/2014 ("MAR"). Upon the publication of this announcement via a Regulatory Information Service, this inside information will be considered to be in the public domain.

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