OVERVIEW

The following discussion and analysis addresses the results of our operations for the three and nine months ended September 30, 2009, as compared to our results of operations for the three and nine months ended September 30, 2008. In addition, the discussion and analysis addresses our liquidity, financial condition and other matters for these periods.

Based on our experience in the industry, we believe that we are the world's largest manufacturer of cabin interior products for commercial aircraft and for business jets, and the leading aftermarket distributor of aerospace fasteners and other consumable products. We sell our manufactured products directly to virtually all of the world's major airlines and airframe manufacturers and a wide variety of business jet customers. In addition, 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, covering over 275,000 stock keeping units (SKUs) serving the 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 coffeemakers, water boilers, beverage containers, refrigerators, freezers, chillers and microwave, high heat, convection and steam ovens;

• both chemical and gaseous aircraft oxygen delivery, distribution and storage systems, protective breathing equipment and lighting products; and

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

We also design, develop and manufacture a broad range of cabin interior structures and provide comprehensive aircraft cabin interior reconfiguration and passenger-to-freighter conversion engineering services and component kits.

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

Net sales by reportable segment for the three and nine month periods ended September 30, 2009 and September 30, 2008, respectively, were as follows:

                                       THREE MONTHS ENDED                                               NINE MONTHS ENDED
                       September 30, 2009              September 30, 2008              September 30, 2009              September 30, 2008
                      Net             % of            Net             % of             Net            % of             Net            % of
                     Sales          Net Sales        Sales          Net Sales         Sales         Net Sales         Sales         Net Sales
Consumables
management         $    181.0             39.4 %   $    219.2             37.3 %   $     617.0            42.3 %   $     464.8            29.4 %
Commercial
aircraft                222.5             48.4 %        300.8             51.2 %         672.3            46.1 %         905.5            57.2 %
Business jet             56.3             12.2 %         67.8             11.5 %         169.0            11.6 %         212.9            13.4 %
Total              $    459.8            100.0 %   $    587.8            100.0 %   $   1,458.3           100.0 %   $   1,583.2           100.0 %

                                         THREE MONTHS ENDED                                               NINE MONTHS ENDED
                         September 30, 2009              September 30, 2008              September 30, 2009              September 30, 2008
                        Net             % of            Net             % of             Net            % of             Net            % of
                       Sales          Net Sales        Sales          Net Sales         Sales         Net Sales         Sales         Net Sales
United States        $    220.9             48.0 %   $    283.3             48.2 %   $     725.5            49.8 %   $     733.6            46.3 %
Europe                    109.3             23.8 %        143.5             24.4 %         335.7            23.0 %         368.4            23.3 %
Asia, Pacific Rim,
Middle East and
Other                     129.6             28.2 %        161.0             27.4 %         397.1            27.2 %         481.2            30.4 %
Total                $    459.8            100.0 %   $    587.8            100.0 %   $   1,458.3           100.0 %   $   1,583.2           100.0 %

Net sales from our domestic and foreign operations for the three and nine month periods ended September 30, 2009 and September 30, 2008, respectively, were as follows:

                                            THREE MONTHS ENDED                  NINE MONTHS ENDED
                                      September 30,       September        September        September
                                          2009             30, 2008         30, 2009         30, 2008
Domestic                              $       332.8      $      406.9     $    1,054.2     $    1,058.0
Foreign                                       127.0             180.9            404.1            525.2
Total                                 $       459.8      $      587.8     $    1,458.3     $    1,583.2

In July 2008, we acquired Honeywell International Inc.'s Consumables Solutions distribution business (HCS). The HCS business distributes aerospace fasteners, bearings, seals, electrical components and other consumable parts and supplies to aviation industry manufacturers, airlines, and aircraft repair and overhaul facilities. The combination of HCS with our consumables management segment (formerly our distribution segment) created the leading global distributor and value added supply chain manager of aerospace and other related consumable products. The combined business serves as a distributor for every major aerospace fastener manufacturer in the world.

New product development is a strategic initiative for us. Our customers regularly request that we engage in new product development and enhancement activities. We believe these activities protect and enhance our leadership position. We believe our investments in research and development over the past several years have been a driving force behind our ongoing market share gains. Research, development and engineering spending has been approximately 6% - 8% of sales for the past several years but is expected to decline as a percentage of sales in the future due to our recently implemented stringent cost initiatives and as a result of the HCS acquisition.

We also believe in providing our businesses with the tools required to remain competitive. In that regard, we have invested, and intend to continue to invest, in property and equipment that enhances our productivity. Over the past three years, annual capital expenditures ranged from $24 - $32. We expect capital expenditures of approximately $50 over the next twelve months. The increase in capital expenditures is primarily related to investments needed to support the $2,300 of awarded, but not included in our backlog, seller furnished equipment programs. We expect to begin to deliver these seller furnished equipment programs in 2011.

While the global economic crisis appears to be abating, our global customers continue to suffer from high fuel costs and weak demand for passenger travel which has resulted in sharply lower yields for the global airline industry. International passenger traffic has declined by approximately 5% from January 2009 to September 2009 compared with the same period ending in 2008. The airlines have incurred losses of approximately $6 billion globally during the first half of this year and are forecast to lose approximately $11 billion for the full year. International cargo traffic, which began falling in June 2008, was down by more than 16% from January 2009 to September 2009 compared with the same period in 2008. Air freighters are currently being parked at unprecedented rates and demand for passenger to freighter conversions is expected to be depressed for the foreseeable future. The aforementioned losses experienced by, and forecasted for, the global airline industry are causing our customers to increase the number of parked aircraft and to further defer new aircraft deliveries. In addition, due to the same fuel cost and passenger demand factors discussed above, business jet manufacturers have significantly reduced their delivery rates by, in some cases, up to 50%. We also believe that major commercial airframe manufacturers may further reduce their delivery rates in 2010. We have responded to these events by initiating intensive cost reduction initiatives.

In order to present our financial results on a more comparable basis, certain information in the following discussion and analysis is presented after giving effect to the HCS acquisition. Amounts presented as on a "proforma" basis have been calculated as if the HCS acquisition had occurred on January 1, 2008.

THREE MONTHS ENDED SEPTEMBER 30, 2009,
AS COMPARED TO THREE MONTHS ENDED SEPTEMBER 30, 2008

Consolidated Results

Net sales in the third quarter of 2009 of $459.8 decreased by $128.0, or 21.8%, as compared with the third quarter of the prior year. The decrease in net sales was the result of the $38.2, or 17.4%, decrease in net sales at the consumables management segment, a $78.3, or 26.0% decrease in net sales at the commercial aircraft segment and a $11.5, or 17.0%, decrease in net sales at the business jet segment. On a proforma basis, to include HCS (which was acquired on July 28, 2008), in both periods, net sales declined $168.9, or 26.9%, as compared with the third quarter of 2008.

Cost of sales for the current period was $297.7, or 64.7% of net sales, as compared to $394.4, or 67.1% of net sales, in the third quarter of the prior year. The 240 basis point decrease in cost of sales as a percentage of sales was due to successful cost reduction activities, manufacturing efficiencies, more efficient consumables management purchasing and initial synergies arising from the integration of the HCS acquisition. On a proforma basis, cost of sales in the third quarter of 2009 was $297.7, which was a decrease of 360 basis points from $429.2, or 68.3% of net sales, in the third quarter of 2008 as a result of successful cost reduction activities, manufacturing efficiencies, more efficient consumables management purchasing and initial synergies arising from the integration of the HCS business.

Selling, general and administrative (SG&A) expenses for the third quarter of 2009 were $65.2, or 14.2% of net sales, as compared to $58.6, or 10.0% of net sales, in the same period in 2008, primarily due to the completion of the HCS acquisition on July 28, 2008, and a $9.0 net unfavorable foreign exchange impact due to the U.S. dollar strengthening substantially as compared with the British pound in the third quarter of 2008, offset by our cost reduction initiatives, including a 22.5% reduction in headcount as compared with our headcount at June 30, 2008.

Research, development and engineering expense for the third quarter of 2009 was $27.3, or 5.9% of net sales, as compared to $33.5, or 5.7% of net sales, in the same period in 2008. The lower level of spending was primarily due to cost initiatives at our commercial aircraft and business jet segments.

Operating earnings for the third quarter of 2009 of $69.6 decreased $31.7, or 31.3%, as compared to the same period in 2008, reflecting the $128.0 decrease in net sales, the timing of the HCS acquisition and a $9.0 net negative foreign exchange impact, offset by a 240 basis point reduction in cost of sales as a percentage of net sales and our cost reduction initiatives. On a proforma basis to include HCS in both periods, third quarter 2009 operating earnings decreased $33.5, or 32.5% on the 26.9% decrease in revenues as compared to the same period in 2008.

Interest expense for the third quarter of 2009 of $22.7 was $2.9 higher than the interest expense in the same period in the prior year due to the increase in long-term debt incurred to finance the HCS acquisition in July 2008.

Earnings before income taxes for the three months ended September 30, 2009 of $46.9 decreased by $31.0, or 39.8%, as compared to earnings before income taxes of $77.9 in the same period in the prior year due to the $128.0 decrease in net sales, a $31.7 decrease in operating earnings and a $2.9 increase in interest expense. On a proforma basis to include HCS in both periods, earnings before income taxes for the three months ended September 30, 2009 decreased by $34.5, or 42.4%, as compared to proforma earnings before income taxes in the prior year of $81.4. This decrease was primarily due to the 26.9% decrease in net sales in the three months ended September 30, 2009 and other factors described above.

Net earnings for the third quarter of 2009 were $36.1, or $0.36 per diluted share, as compared with net earnings of $51.8, or $0.54 per diluted share, in the second quarter of 2008. Net earnings decreased by $15.7, or 30.3%, as compared with the third quarter of the prior year as a result of the decrease in net sales and other factors described above.

Segment Results

The following is a summary of net sales and operating earnings on as reported and proforma basis by segment:

                                                 NET SALES
                                     Three Months Ended September 30,
                           2009            2008             2008         % Change
                                        As Reported       Proforma       Proforma
Consumables management   $   181.0     $       219.2     $    260.1          (30.4 %)
Commercial aircraft          222.5             300.8          300.8          (26.0 %)
Business jet                  56.3              67.8           67.8          (17.0 %)
Total                    $   459.8     $       587.8     $    628.7          (26.9 %)

                                            OPERATING EARNINGS
                                     Three Months Ended September 30,
                           2009            2008             2008         % Change
                                        As Reported       Proforma       Proforma
Consumables management   $   33.5      $        42.1     $     43.9          (23.7 %)
Commercial aircraft          29.8               49.4           49.4          (39.7 %)
Business jet                  6.3                9.8            9.8          (35.7 %)
Total                    $   69.6      $       101.3     $    103.1          (32.5 %)

Consumables management segment net sales during the third quarter of 2009 were $181.0, which represented a $38.2, or 17.4%, decrease over the same quarter in the prior year. On a proforma basis, consumables management segment net sales in the third quarter of 2009 were lower by $79.1, or 30.4% than in third quarter of 2008. The decline in net sales in the current quarter as compared to the same period in the prior year was due to reduced activity at airline and maintenance, repair and overhaul (MRO) facilities, reduced aircraft capacity, a decrease in revenue passenger miles flown, and substantially reduced activity at business jet manufacturers, all as compared to the same period in the prior year. Consumables management segment operating earnings were $33.5, or 18.5% of sales as compared with $42.1, or 19.2% of sales in the third quarter of 2008. On a proforma basis, third quarter 2009 operating margin expanded 160 basis points as compared 2008 operating earnings of $43.9, or 16.9% of sales reflecting more efficient purchasing in the current period and initial synergies arising from the HCS acquisition.

Commercial aircraft segment net sales during the third quarter of 2009 of $222.5 decreased $78.3, or 26.0%, reflecting retrofit program push outs, reduced activity at airline and MRO maintenance facilities, reduced aircraft capacity and a decrease in revenue passenger miles flown, all as compared to the same period in the prior year. Third quarter 2009 operating earnings were $29.8, or 13.4% of net sales as compared with the third quarter 2008 operating earnings of $49.4, or 16.4% of sales. The 300 basis point decrease in operating margin was primarily due to a $78.3, or 26.0% lower level of sales and approximately $9.0 of net unfavorable foreign exchange fluctuations in the third quarter of 2009 as compared with the same period in 2008.

Business jet segment third quarter 2009 net sales of $56.3 decreased by $11.5, or 17.0% as compared to the same period in 2008. Operating earnings decreased by $3.5, or 35.7%, reflecting the decrease in net sales, an unfavorable mix of products and the negative impact of reduced operating leverage in the current period.

NINE MONTHS ENDED SEPTEMBER 30, 2009,
AS COMPARED TO NINE MONTHS ENDED SEPTEMBER 30, 2008

Consolidated Results

Net sales for the nine months ended September 30, 2009 of $1,458.3 decreased by $124.9, or 7.9%, as compared with the same period of the prior year. The decrease in net sales was the result of a $233.2, or 25.8%, decrease in net sales at the commercial aircraft segment and a $43.9, or 20.6%, decrease in net sales at the business jet segment partially offset by a $152.2, or 32.7%, increase in net sales at the consumables management segment due to the acquisition of the HCS business in July of 2008. Proforma net sales declined by $470.6, or 24.4%, as compared with the same period of the prior year.

Cost of sales for the nine months ended September 30, 2009 was $954.2, or 65.4% of net sales, as compared to $1,040.9, or 65.7% of net sales in the same period in the prior year. The decrease in cost of sales was primarily due to the 7.9% decrease in net sales. On a proforma basis, cost of sales in 2009 decreased by 290 basis points as a result of successful cost reduction activities, manufacturing efficiencies, more efficient consumables management purchasing and initial synergies arising from the integration of the HCS business.

Selling, general and administrative (SG&A) expenses for the nine months ended September 30, 2009 were $205.3, or 14.1% of net sales, as compared to $176.6, or 11.2% of net sales, in the same period in 2008. The $28.7 increase in SG&A expenses was primarily related to a $17.0 increase in the consumables management segment SG&A due to the completion of the HCS acquisition on July 28, 2008, (which includes acquisition, integration and transition (AIT) costs of $8.6 in the 2009 period), and a $12.7 net negative foreign exchange impact, offset by our cost reduction initiatives.

Research, development and engineering expense for the nine months ended September 30, 2009 was $74.6, or 5.1% of net sales, as compared with $102.7, or 6.5%, of net sales in the same period in 2008. The decrease in spending in 2009 is due to cost initiatives in place at our commercial aircraft and business jet segments. Research development and engineering expense as a percentage of sales decreased due to a higher level of revenue at our consumables management segment, which has no corresponding research, development and engineering expense as well as the cost initiatives described above.

Operating earnings for the nine months ended September 30, 2009 of $224.2 decreased $38.8, or 14.8% as compared to the same period in 2008, reflecting the $124.9 decrease in net sales, the timing of the HCS acquisition, $12.7 net unfavorable foreign exchange impact, and $10.0 of additional AIT costs during the 2009 period, offset by a 30 basis point reduction in cost of sales as a percentage of net sales and our cost reduction initiatives. On a proforma basis to include HCS in both periods, operating earnings would have been $78.7, or 26.0% lower than the prior year on a 24.4% decrease in net sales in the nine months ended September 30, 2009.

Interest expense for the nine months ended September 30, 2009 of $67.7 was $42.8 higher than the interest expense in the same period in the prior year, primarily due to the increase in long-term debt associated with the July 2008 HCS acquisition.

Earnings before income taxes for the nine months ended September 30, 2009 of $156.5 decreased by $78.0, or 33.3%, as compared to $234.5 in the same period in the prior year due to a $38.8 decrease in operating earnings and $42.8 increase in interest expense. On a proforma basis to include HCS in both periods, earnings before income taxes for the nine months ended September 30, 2009 was $156.5, which was a decrease of $80.5, or 34.0%, as compared to proforma earnings before income taxes of $237.0 in the prior year. This decrease was primarily due to the 24.4% decrease in net sales in the nine months ended September 30, 2009.

Income taxes were $47.8, or 30.5% of earnings before income taxes, as compared to $80.3, or 34.2% of earnings before income taxes, in 2008. Income taxes as a percentage of earnings before income taxes decreased in the current period mainly as a result of higher research and development tax credits arising from recently completed tax reduction initiatives.

Net earnings for the nine months ended September 30, 2009 were $108.7, or $1.10 per diluted share, as compared to $154.2, or $1.65 per diluted share. Net earnings decreased by $45.5, or 29.5% as compared with the prior year as a result of the decrease in net sales and other factors described above.

Segment Results

The following is a summary of net sales and operating earnings on as reported and proforma basis by segment:

                                                NET SALES
                                     Nine Months Ended September 30,
                           2009            2008            2008         % Change
                                        As Reported      Proforma       Proforma
Consumables management   $   617.0     $       464.8     $   810.5          (23.9 %)
Commercial aircraft          672.3             905.5         905.5          (25.8 %)
Business jet                 169.0             212.9         212.9          (20.6 %)
Total                    $ 1,458.3     $     1,583.2     $ 1,928.9          (24.4 %)

                                            OPERATING EARNINGS
                                     Nine Months Ended September 30,
                           2009           2008             2008         % Change
                                       As Reported       Proforma       Proforma
Consumables management   $  116.7     $       109.0     $    148.9          (21.6 %)
Commercial aircraft          89.9             124.5          124.5          (27.8 %)
Business jet                 17.6              29.5           29.5          (40.3 %)
Total                    $  224.2     $       263.0     $    302.9          (26.0 %)

Consumables management net sales for nine months ended September 30, 2009 were $617.0, which represented a $152.2, or 32.7% increase to the comparative prior year period due to the HCS acquisition in July 2008. On a proforma basis, consumables management net sales for the nine months ended September 30, 2009 were $193.5, or 23.9% lower than in the same period of 2008. The decline in consumables management segment net sales in the current period as compared to the same period in the prior year was due to reduced activity at airline and MRO maintenance facilities, reduced aircraft capacity, decrease in revenue passenger miles flown and substantially reduced activity at business jet manufacturers, all as compared to the same period in the prior year. Consumables management segment operating earnings of $116.7 during the nine months ended September 30, 2009, increased by $7.7 as compared to the same period in 2008 due to the higher level of net sales, partly offset by higher AIT costs ($13.6 during the nine months ended September 30, 2009 as compared to $3.6 incurred in the same period of 2008) and lower margins in the acquired HCS business.

Commercial aircraft segment net sales for nine months ended September 30, 2009 of $672.3 decreased $233.2, or 25.8%, compared to the same period in the prior year, reflecting retrofit program pushouts, reduced activity at airlines and MRO maintenance facilities, reduced aircraft capacity and a decrease in revenue passenger miles flown. Operating earnings in the 2009 period were $89.9, or 13.4% of net sales, as compared to $124.5, or 13.7% of net sales in the same period in the prior year. The decrease in operating earnings was primarily attributable to the 25.8% decrease in net sales and unfavorable foreign exchange impact, partly offset by lower cost of sales as a percentage of net sales due to cost reduction activities and manufacturing efficiencies in the current period.

LIQUIDITY AND CAPITAL RESOURCES

Current Financial Condition

As of September 30, 2009, our net debt-to-net-capital ratio was 40.3%. Net debt was $952.9, which represented total debt of $1,118.7, less cash and cash equivalents of $165.8. There were no borrowings outstanding under the Revolving Credit Facility of our Credit Agreement and we have no debt maturities until 2014. Cash on hand at September 30, 2009 increased by $19.4 as compared with cash on hand at June 30, 2009, and increased by $50.2 as compared to September 30, 2008.

Working capital as of September 30, 2009 was $1,309.7, an increase of $136.0 as compared with working capital at December 31, 2008. At September 30, 2009, total current assets increased by $56.9, total current liabilities decreased by $79.1 and total stockholder's equity increased by $143.4, all as compared to December 31, 2008. During 2009, we successfully completed our initiative to bring HCS inventories in line with our stocking distribution model. This effort was the primary driver behind the $112.5 increase in our net inventories during the nine months ended September 30, 2009 and was the principal reason for the related increase in working capital.

Cash Flows

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