BEAV

BE Aerospace, Inc.

Based on our experience in the industry, we believe we are the world’s largest manufacturer of cabin interior products for commercial aircraft and business jets and the world’s leading distributor of aerospace fasteners and consumables. We sell our products directly to virtually all of the world’s major airlines and aerospace manufacturers. In addition, through our consumables management segment, we sell a large and growing number of consumable parts to market participants in the defense industry. Based on our experience, we believe that we have achieved leading global market positions in each of our major product categories, which include:

· a broad line of aerospace fasteners and consumables, consisting of over 275,000 Stock Keeping Units (SKUs) serving the aerospace, commercial aircraft, business jet and military and defense industries;

· commercial aircraft seats, including an extensive line of super first class, first class, business class, tourist class and regional aircraft seats;

·
a full line of aircraft food and beverage preparation and storage equipment, including galley systems, coffeemakers, water boilers, beverage containers, refrigerators, freezers, chillers and ovens, including microwave, high efficiency convection and steam ovens;

·
both chemical and gaseous aircraft oxygen storage, distribution and delivery systems, protective breathing equipment and a broad range of lighting products; and

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business jet and general aviation interior products, including an extensive line of executive aircraft seats, direct and indirect overhead lighting systems, passenger and crew oxygen systems, air valve systems, high-end furniture and cabinetry.

We also provide comprehensive aircraft cabin interior reconfiguration and passenger-to-freighter conversion engineering services, galley systems, and component kits.

We were organized as a corporation in Delaware in 1987. We have substantially expanded the size, scope and nature of our business as a result of a number of acquisitions. Between 1989 and 2006, we completed 24 acquisitions, for an aggregate purchase price of approximately $1.2 billion. We believe these acquisitions enabled us to position ourselves as a preferred global supplier to our customers. During this period we completed three major facility and product line consolidation efforts, eliminating 22 facilities. We implemented lean manufacturing and continuous improvement programs which, together with our information technology investments, have significantly improved our productivity. These facility consolidations and productivity enhancements allowed us to expand our operating margins by 570 basis points during the period from December 31, 2005 through December 31, 2008 (exclusive of a goodwill and intangible asset impairment charge in 2008). In 2008, we completed the acquisition of the Consumables Solutions distribution business (HCS) from Honeywell International Inc. (Honeywell) for a purchase price of approximately $1.0 billion. HCS distributed fasteners, hardware, bearings, seals, gaskets and electrical components and other consumables to the global airline, aerospace, business jet and defense industries. The combination of HCS with our existing consumables products business created the world’s leading distributor of aerospace fasteners and consumables. As a result of this acquisition, we have eliminated 4 additional facilities, further rationalized our consumables management segment, and significantly expanded segment operating margins. The acquisition of HCS has allowed us to alter our business mix, such that approximately one-half of our business is related primarily to the sale of consumables products and commercial aircraft spares.

Products and Services

We conduct our operations through strategic business units that have been aggregated under three reportable segments: consumables management, commercial aircraft and business jet.

Consumables Management Segment

We believe, based on our experience in the industry that we are the world’s leading distributor and value added service provider of aerospace fasteners and consumables and we believe we offer one of the broadest lines of aerospace hardware and inventory management services worldwide. Through the strategic acquisition of HCS and its integration with our existing consumables management segment we believe we have created the worldwide leader in the distribution of aerospace fasteners and consumables. The acquisition of HCS has allowed us to alter our business mix such that demand for approximately one-half of our business is related to consumables products and commercial aircraft segment spares. Approximately 50% of our fasteners and consumables sales are to the aftermarket and military, and historically, we have shipped approximately 60% of our orders within 24 hours of receipt of the order. With over 275,000 SKUs and next-day service, we serve as a distributor for almost every major aerospace fastener manufacturer. Our service offerings include inventory management and replenishment, electronic data interchange, special packaging and bar-coding, parts kitting, quality assurance testing and purchasing assistance. Our seasoned purchasing and sales teams, coupled with state-of-the-art information technology and automated retrieval systems, provide the basis for our reputation for high quality and overnight delivery.

Commercial Aircraft Segment

We believe, based on our experience in the industry, that we are the world's leading manufacturer of aircraft seats, offering a wide selection of first class, business class, tourist class and regional aircraft seats. A typical seat manufactured and sold by us includes the seat frame, cushions, armrests, tray table and a variety of optional features such as adjustable lumbar supports, footrests, reading lights, head/neck supports, and other comfort amenities. We also integrate a wide variety of in-flight entertainment equipment into our seats, which is supplied to us by our customers or third party suppliers.

Business Jet Segment

We believe, based on our experience in the industry, that we are the leading manufacturer of a broad product line of furnishings for business jets. Our products include a complete line of business jet seating and sofa products, including electric fully berthing lie flat seats, direct and indirect lighting, air valves and oxygen delivery systems as well as sidewalls, bulkheads, credenzas, closets, galley structures, lavatories, waste water systems and tables. We have the capability to provide complete interior packages for business jets and executive aircraft (i.e. head-of-state) interiors, including design services, interior components and program management services. We believe we are the preferred supplier of seating products and direct and indirect lighting systems for most business jet manufacturers.

Our business jet segment, which has had decades of experience in equipping VIP and head of state aircraft, is the leading manufacturer of super first class cabin interior products for commercial wide-body aircraft. Super first class products incorporate a broad range of amenities such as luxurious first class cabins with appointments such as lie-flat seating, mini-bars, closets, flat screen televisions and mood lighting, which, until recently, were found only in VIP and head-of-state aircraft.