Prepared for American Institute of Aeronautics and Astronautics – Enterprise Chapter of Los Angeles Section

January 26, 2010

Aerospace & Defense 2010 : Back in Black?

2

Welcome

With all the news lately about the subzero weather and snow that the midwest and east coast are experiencing, we shouldn't forget that Southern California has its share of devastating weather also.

Below is a photo illustrating the excessive damage caused to a home from a west coast storm that passed through the Los Angeles area last week.

33

Full Service Investment Bank

National Presence

Leading Advisory Firm

Comprehensive Sales & Trading Capabilities

Firm Overview

Investment BankingInvestment Banking Institutional Sales & Trading

Institutional Sales & TradingResearchResearch

Mergers & AcquisitionsMergers &

Acquisitions RestructuringRestructuringFinance Finance Equity Equity Fixed Income Fixed Income Equity Equity Fixed Income Fixed Income

(over 170 employees)

Imperial Capital is a nationally recognized full service investment bank with an integrated platform

Boston

Los Angeles

New York

Imperial Capital

San Francisco

Houston

Minneapolis

44

Investment BankingInvestment Banking

Equities

Leading trader of middle market equity securities

$10 to $150 million transaction size

Public equity / PIPEs

Preferred stock

Equity Linked / Hybrid Securities

Convertible debt / preferred

Subordinated debt

Fixed Income

$25 to $500 million transaction size

Private or public

Asset or cash-flow based

Small high yield / stressed financings

Sellside advisory

Buyside advisory

Board advisory / Strategic alternatives

Public and private companies

Deep Industry knowledge

Strong auction process

Extensive advisory experience combined with capital markets distribution capabilities

Represent

Debtors

Secured / unsecured creditors

Equity

Committees

Acquirers (companies, assets, claims and securities)

In- and out-of-court services

Extensive expert testimony experience

Public or private situations

Broad range of transactions or securities covered

Industry GroupsIndustry Groups

Restructuring & RecapitalizationRestructuring & RecapitalizationMergers & AcquisitionsMergers & AcquisitionsCorporate financeCorporate finance

Valuations & Fairness OpinionsValuations & Fairness Opinions

Energy / Power

Financial Services

Gaming & Leisure

General Industrial

Healthcare

Media

Aerospace & Defense

Business Services & Technology

Consumer

Real Estate

Security

Transportation

4

Imperial Capital

5

Financial Advisor to AerSale

Equity Investment by Leonard Green & Co.

January 2010

$230,000,000

Recent Engagements

This announcement is not an offer to sell or a solicitation of an offer to buy the securities of these companies. This announcement appears as matter of record only. Any investments that are offered through Imperial Capital, LLC., registered broker dealer and member of NASD and SIPC, are not FDIC insured.

Imperial Capital

Restructuring Advisor to the Company

2009

(NASDAQ: CRDN)

Financial Advisor to the Seller

June 2009

Has Been Acquired by:

Has Been Acquired

Financial Advisor to the Buyer

Pending

AVIATION AFTERMARKET PARTS COMPANY

6

Current U.S. Economic Conditions

40

60

80

100

120

1/98 1/99 1/00 1/01 1/02 1/03 1/04 1/05 1/06 1/07 1/08 1/09

Expectations

(800,000)

(600,000)

(400,000)

(200,000)

0

200,000

1/08 3/08 5/08 7/08 9/08 11/08 1/09 3/09 5/09 7/09 9/09 11/09

2.0%

4.0%

6.0%

8.0%

10.0%

1/98 1/99 1/00 1/01 1/02 1/03 1/04 1/05 1/06 1/07 1/08 1/09

Unemployment Rate

Consumer Sentiment Index

Monthly Change in Non-Farm Payrolls

Decline of 741,000 jobs is the highest number since 1949

October 2009 Unemployment reached a 25-year high at 10.2%

Unemployment Rate

Source: University of Michigan Source: U.S. Department of Labor

Source: U.S. Bureau of Labor

November 2008 Consumer Confidence lowest level since 1980 at 55.3

U.S. Personal Savings Rate (NIPA)

Source: Bureau of Economics Analysis

(3.0%)

0.0%

3.0%

6.0%

9.0%

12.0%

12/69 12/74 12/79 12/84 12/89 12/94 12/99 12/04 12/09

Q2 2009 at 10-year high of 5.4%

Economy and Financing

7

$4.9 $3.9 $2.2

$9.5

$24.2

$16.0$12.5

$10.6

$20.1$19.7 $18.6 $17.5$14.5

0

10

20

30

40

50

Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan YTD$0$5$10$15$20$25$30$35

$ Value Number of Deals

50

60

70

80

90

100

Oct-08 Dec-08 Feb-09 Apr-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10

Merrill Lynch U.S. High Yield II Index High Yield Weekly Fund Flows

($80

.0)

$375

.0$7

89.9 $979

.8$6

80.8

$539

.7$6

44.1

$435

.4$8

22.4

$981

.0$3

68.0 $6

22.7 $9

18.0

$566

.9$3

58.5

($11

0.1)

$385

.0$3

28.9

$98.

2$9

8.2

$721

.5$7

21.5

$613

.0$6

13.0

$713

.0$7

13.0

($89

.9)

($89

.9)

$350

.7$3

50.7

$283

.5$2

83.5

$223

.0 $414

.0$3

17.0

$122

.6$4

84.0

$237

.0$3

29.4

$207

.0$2

6.3

$346

.0

$189

.0$1

84.0

$324

.0$4

15.0

$388

.0$3

47.0

$288

.0$7

34.0

$554

.0

$359

.6

$688

.6$6

88.6

($1,000)

$0

$1,000

$2,000

May-09 Jul-09 Nov-09 Jan-10

Source: Prospect News, High Yield Daily. Source: AMG Data Source. Excludes funds which report flows monthly, which represents significant incremental funds flows.

Source: Prospect News, High Yield Daily.

Leveraged Loan Pricing LevelsHigh Yield Weekly New Issue Volume# of Deals ($ in billions)

($ in billions of funds flows YTD)

Economy and Financing

3%

4%

5%

6%

7%

8%

Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09

Yiel

d

70

75

80

85

90

95

Bid Price

BB-/Ba3 B+/B1 B/B2 LCD Flow Names (Bid)

Source: S&P LCD Weekly; Denotes yield to maturity based on the S&P/LSTA Leveraged Loan Index

There were $554 million of fund inflows during the week ended Jan 20ML HY Index traded down 0.7% to 96.64 for week ended Jan. 22, yielding 8.71%

8

Historical Gross Orders and Deliveries – 1983 to 2009

Its Not Different This Time, But it is Worse

Historical Orders and Deliveries

Source: The Airline Monitor, Aerospace Market News and Imperial Capital Estimates

(in billions)Recession Recession RecessionRecession Recession

0

700

1,400

2,100

2,800

3,500

'83 '88 '93 '98 '03 '08

Gro

ss O

rder

s / D

eliv

erie

s

500

1,000

1,500

2,000

2,500

3,000

Wor

ld R

PMs

Gross Orders Deliveries World RPMs

9

0

160

320

480

640

Jan

'07

Apr

'07

Jul '

07

Oct

'07

Jan

'08

Apr

'08

Jul '

08

Oct

'08

Jan

'09

Apr

'09

Jul '

09

Oct

'09

2010

2011

2012

2013

Gro

ss O

rder

s / D

eliv

erie

s

2,200

2,500

2,800

3,100

3,400

Wor

ld R

PMs

Gross Orders Deliveries

Monthly Gross Orders and Deliveries – 2008 to 2011

The Great Recession and The Paradigm Shift

Monthly Orders and Deliveries

Source: The Airline Monitor and Aerospace Market News (1) Based on a sample set of approximately 65% of the world.

(in billions)

2,803 2,8062,879

3,270

2008 Expected World GDP Growth (3.0%) x 1.3

New Expected World GDP Growth (2.0%) x 1.3

2,598

Annual World RPMs

10

U.S. Airlines Revenue Passenger Miles vs. Change in Non-Farm Payroll – 12 Mo. Moving Avg.

Spare Parts, Lease Rates, Aircraft Values – It’s All About Jobs

35

40

45

50

55

60

65

70

75

80

U.S.

Airl

ines

RPM

s

(500)

(400)

(300)

(200)

(100)

0

100

200

300

400

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Chan

ge in

Non

-Far

m P

ayro

ll

Change in Non-Farm Payroll - 12 Mo. Moving Average RPMs - 12 Mo. Moving Average

6 Month Lag

Source: U.S. Bureau of Labor Statistics and Bureau of Transportation Statistics and the Airline Monitor

(in billions) (in thousands)

U.S. RPMs and Non-Farm Payroll

Employment RPMs Seats

11

(100.0%)

0%

100%

200%

300%

400%

500%

% R

etur

n ov

er S

&P 5

00

0

600

1,200

1,800

2,400

3,000

3,600

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Com

mer

cial

Airc

raft

Gro

ss O

rder

s

Commercial Aircraft Gross Orders Aerospace Index Return over S&P 500

Aerospace Index Return over S&P 500 vs. Commercial Aircraft Gross Orders

Source: CapIQ and The Airline Monitor Note: Aerospace Index includes AAR Corp., BE Aerospace, Curtiss-Wright Corp., Esterline Technologies, Goodrich, Moog, Precision Castparts, Rockwell Collins, Teledyne Technologies, and Triumph Group.

For Investors, Anticipate the Trough

TT

T?

Relative Total Return and Orders

Order Uncertainty

12

0% 20% 40% 60% 80% 100%

MOGAIRCW

BEAVLMIADCOPCPNAS

WGOVTGI

ESLGR

TDYLDSH

COLMGGT

SPRHEI

TDGCAELMT

BANOC

GDLLLUTXRTN

% of 52-Week High

Share Price Performance

Source: Bloomberg and CapIQ.

0% 20% 40% 60% 80% 100%

MOGNAS

LDSHLMIA

BEAVDCO

WGOVCWTDYESLSPR

MGGTTGIAIR

COLPCPHEIGR

TDGCAELMT

BANOC

GDLLL

RTNUTX

% of 104-Week High

Aerospace Suppliers Prime Contractors

13

10.5x

9.2x 9.1x

8.4x 8.3x8.0x 7.9x

7.2x 7.1x 7.1x

6.3x 6.1x 6.0x 5.9x5.5x

4.4x3.9x

8.3x

7.0x 7.0x 6.9x6.6x

6.1x5.7x 5.5x

0.0x

2.0x

4.0x

6.0x

8.0x

10.0x

12.0x

HE

I

TDG

BE

AV

CO

L

LDS

H

PC

P

MO

G

CW GR

TDY

ES

L

SP

R

TGI

AIR

LMIA

DC

O

NA

S

UTX BA

LLL

CA

E

GD

RTN

LMT

NO

C

TEV

/ CY

201

0E E

BITD

A

Total Enterprise Value / CY 2010E EBITDA

Forward Multiples

Source: Bloomberg and CapIQ.

Aerospace Suppliers Prime Contractors

14

7

10

12

6

18

13

16

19

12

7

9

5

$0

$100

$200

$300

$400

$500

$600

$700

Q1 '07 Q2 '07 Q3 '07 Q4 '07 Q1 '08 Q2 '08 Q3 '08 Q4 '08 Q1 '09 Q2 '09 Q3 '09 Q4 '090

3

6

9

12

15

18

21

Volume Deal Value

14

($ in millions)

Deal Value Volume

Source: Capital IQ Middle market deals valued below $100 million.

M&A Trends – Smaller Transactions

The Uncertain Outlook Now Dominates all Discussions

(1)

Announced Middle Market Aerospace M&A Deals Under $100 million

Total # of Deals: 134 Average Deal Value: $23.1 million

15

8

3

2 2

6

4

3 3

1

0

2

4

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

Q1 '07 Q2 '07 Q3 '07 Q4 '07 Q1 '08 Q2 '08 Q3 '08 Q4 '08 Q1 '09 Q2 '09 Q3 '09 Q4 '090

2

4

6

8

10

12

Volume Deal Value

15

($ in millions)

Deal Value Volume

Source: Capital IQ Middle market deals valued above $100 million and below $1 billion.

M&A Trends – Larger Transactions

Financing Driven Decline

(1)

Announced Middle Market Aerospace M&A Deals Between $100 million and $1 billion

Total # of Deals: 38 Average Deal Value: $307.8 million

16

$93 $105 $107 $111 $116 $149 $163

$549

$117 $128 $144 $145 $152 $167$158

$186$11 $9

$12 $13$21

$24$23

$144 $140$144 $147 $156

$177$184

$162

$0 $4

$79$6

$16

$114$159

$98

$10

$96$98

$0

$100

$200

$300

$400

$500

$600

$700

$800

2003 2004 2005 2006 2007 2008 2009 2010 2011E

Military Personnel Operations & Maintenance Family Housing & Facilities Strategic Modernization Supplementals

Department of Defense Budget($ in billions)

George Obama

DoD Budget with Supplemental Spending

$364.8

$480.5

$416.5$448.8

$579.2$611.1

$378.7

$647.8

$708.0 (1)

Source: DoD Budget and Estimates. (1) 2011 Estimate from Bloomberg News, January 22, 2010.

17

$0

$200,000

$400,000

$600,000

$800,000

$1,000,000

$1,200,000

$1,400,000

$1,600,000

FY05 FY06 FY07 FY08 FY09 FY10

Cost

per

Tro

op

0

15,000

30,000

45,000

60,000

75,000

90,000

105,000

120,000

Num

ber

of T

roop

s

Cost Per Troop Number of Troops

Historical and Projected Cost per Troop in Afghanistan

Cost per Troop in Afghanistan

Defense Industry Outlook

Source: Center for Strategic and Budgetary Assessments, December 2009.

18

$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

$800,000

FY05 FY06 FY07 FY08 FY09 FY10

Cost

per

Tro

op

0

30,000

60,000

90,000

120,000

150,000

180,000

210,000

240,000

Num

ber

of T

roop

s

Cost Per Troop Number of Troops

Historical and Projected Cost per Troop in Iraq

Cost per Troop in Iraq

Defense Industry Outlook

Source: Center for Strategic and Budgetary Assessments, December 2009.

19

Conclusion

Value Drivers

787 content

Composite structures capability and capacity

Military helicopters

F-35 content

Short term leases of good, used aircraft

PMA parts

ISR capability and capacity

UAVs

C-Series

Lean

Strong balance sheets

Value Destroyers

Biz Av

Small regional jets

Sharing A380 risk

A400M content

Long term leases of new aircraft

Airframe heavy maintenance

Anything over-budget and behind schedule

Customer concentration

Denial

High costs

Leverage on a cyclical business

Appendix

21

5,500

6,000

6,500

7,000

7,500

8,000

Dec'08

Jan'09

Feb'09

Mar'09

Apr'09

May'09

Jun'09

Jul'09

Aug'09

Sep'09

Oct'09

Nov'09

Dec'08

Fleet Statistics

Aircraft OrdersLarge Commercial Jet Backlog Large Commercial Jet Program Backlogs

The Firm Engine Order Book The Order Intake in 2009

0

500

1,000

1,500

2,000

2,500

737

A32

0

787

A35

0

A33

0

A31

9

777

A32

1

A38

0

747

767

A31

8

A34

0

12,000

12,500

13,000

13,500

14,000

14,500

Dec'08

Jan'09

Feb'09

Mar'09

Apr'09

May'09

Jun'09

Jul'09

Aug'09

Sep'09

Oct'09

Nov'09

Dec'08

0

50

100

150

200

250

737

A32

0

A33

0

A31

9

777

A35

0

A32

1

787

767

747

A38

0

A31

8

A34

0

Source: Aerospace Market News

22

0

200

400

600

800

1,000

99 00 01 02 03 04 05 06 07 08 09

Fleet Statistics

Aircraft DeliveriesAnnual Deliveries of Large Commercial Jets Annual Large Civil Engine Deliveries

Monthly Aircraft Deliveries in 2009 Major Program Deliveries in 2009

0

500

1,000

1,500

2,000

2,500

98 99 00 01 02 03 04 05 06 07 08 09

0

25

50

75

100

125

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec0

100

200

300

400

500

737 A320A319 777 A320A330 767 A340A380 747 A318Source: Aerospace Market News

Team Biographies & Contact Information

2424

Michael McManusManaging Director

Los Angeles

Michael McManus serves as Managing Director in the Los Angeles Office

Prior to joining Imperial in 2007, Mr. McManus served as Managing Director with USBX, Inc. While with USBX, Mr. McManus focused on such industries as security and government information technology services. In addition, Michael’s experience includes founding SmallCap Corporate Advisors, LLC where he brought bulge bracket investment banking expertise to smaller companies that were underserved by large investment banks. Prior to this, Mr. McManus was with Jefferies Quarterdeck in both the Los Angeles and Washington D.C. offices. While with Jefferies, Mr. McManus focused on the aerospace, defense and government services sectors and specialized in public company merger, acquisition and financing transactions. Michael has also worked for CIBC World Markets and Donaldson, Lufkin & Jenrette. During his five years with DLJ, he gained broad experience with all product and advisory skill sets. Additionally, while with DLJ in London, Mr. McManus co-founded the European sell-side practice to focus on cross border, middle market sell-side transactions.

Prior to attending business school, Mr. McManus served in the U.S. Army for over seven years, in various capacities including Tank Platoon Leader and Headquarters Company Executive Officer. Mr. McManus received a Bachelor of Science degree in Computer Science from the United States Military Academy at West Point and an M.B.A. with distinction (top 10%) from the S. C. Johnson Graduate School of Management at Cornell University. Michael is also an FAA licensed private pilot with an interest in aerobatics.

Robert WagnerManaging Director

Los Angeles

Bob Wagner serves as a Managing Director in the Los Angeles Office

Prior to joining Imperial Capital in 2009, Mr. Wagner co-founded the Aerospace and Defense practice at Wachovia Securities where he led numerous buy-side and sell-side M&A advisory assignments and capital raising transactions for a broad range of aerospace and defense industry suppliers and prime contractors over the period from late 1999 through 2008. Key clients over this period of time included Armor Holdings, DRS Technologies, EDO Corporation, LMI Aerospace, Aeroturbine, Esterline Technologies, Gencorp and Orbital Sciences. Financing transactions included syndicated bank loans, 144A high yield bonds and convertible notes and underwritten common equity offerings. Prior to joining Wachovia, Mr. Wagner spent over 10 years with CIBC in New York and Los Angeles focusing on leveraged finance, sponsor focused, pre-workout recapitalization transactions and other domestic and international corporate finance transactions.

Mr. Wagner earned his M.B.A. from the University of Southern California and a Bachelor’s degree in Engineering from California State University, Northridge.

Team Biographies & Contact Information

2525

Robert WagnerManaging DirectorOffice: (310) 246-3624Email: rwagner@imperialcapital.com

Team Biographies & Contact Information

Michael McManusManaging DirectorOffice: (310) 246-3702Email: mmcmanus@imperialcapital.com

Los Angeles

2000 Avenue of the Stars9th Floor, South TowerLos Angeles, CA 90067Office: (310) 246-3700Toll Free: (800) 929-2299Fax: (310) 777-3700

Boston

101 Arch StreetSuite 1762Boston, MA 02110Office: (617) 478-7600Toll Free: (888) 478-9696Fax: (617) 478-7615

San Francisco

55 2nd StreetSuite 1950San Francisco, CA 94105Office: (415) 615-4000Toll Free: (877) 615-4040 Fax: (415) 615-4090

New York

485 Lexington Avenue28th FloorNew York, NY 10017Office: (212) 490-0004Toll Free: (800) 371-7087Fax: (212) 490-5884

Houston

1600 Smith StreetSuite 4250Houston, Texas 77002Office:(713) 490-3860Fax: (713) 490-3867

Minneapolis

60 South Sixth StreetSuite 3770Minneapolis, MN 55402Office: (612) 333-0130Fax: (612) 333-0122