SG Cowen Presentation

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SG Cowen Presentation February 8, 2006
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Forward Looking Statements
Except for statements of historical fact, the
statements contained in this document are
forward-looking statements as such term is
defined in the Private Securities Litigation
Reform Act of 1995. These forward-looking
statements include statements regarding intent,
belief or current expectations of the Company and
its management. Such forward-looking statements
are not guarantees of future performance and
involve a number of risks and uncertainties that
may cause the Companys actual results to differ
materially from those indicated by such
forward-looking statements. The factors that
could cause actual results to differ materially
from those indicated by such forward-looking
statements include loss of key suppliers or
significant customers, termination or curtailment
of material contracts, changes in demand or
prevailing market prices for products and
services, changes in economic conditions,
increased competition, failure to execute or
realize anticipated benefits from agreements,
changes in our business strategy or development
plans, changes in government regulations and
policies, limited operational flexibility due to
leverage and changes in the aviation industry due
to terrorist attacks.
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Company Overview
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Overview of Aviall, Inc.
Aviall, Inc. Paul Fulchino Chairman, President
CEO
Aviall Services, Inc. Dan Komnenovich President/CO
O
Inventory Locator Service, LLP Bruce
Langsen President
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Aviall, Inc Core Competencies

• Aviall Services
• Parts distribution and logistics services
• Technology solutions for the aviation supply
  chain
• Sales and marketing multiplier for over 220
  suppliers
• Product repair, kitting and assembly services

• ILS
• Electronic marketplace for aviation and marine
  industries
• Global data warehouse for inventory, cross
  reference and approval information

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Aviall Services Expected Revenue Distribution
20-25 General Aviation/ Corporate
35-40 Military/Government
35-40 Commercial Airline
Sales by Customer Type
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Industrys Most Extensive New Product Basket
More than 650,000 unique line items that fit in
a box from a single source

• Antennas
• Batteries and chargers
• Brakes
• Cleaning/coating/degreasers/corrosion protection
  products
• Deicing/Anti-icing products (ground)
• Emergency and survival equipment
• Fuel tanks, adapters and other equipment
• Generators/alternators/ignitions
• Ground power units/towing equipment
• Hardware/fasteners
• Headsets and microphones
• Heaters and preheaters
• Hoses (fuel, hydraulic, pneumatic)
• Intercoms and inverters

• Lighting components
• NDT equipment/supplies
• Oil and lubricant
• Oxygen equipment
• Paint/paint strippers
• Personal restraint systems
• Piston engines/engine components
• Pressure and temperature sensors
• Starters
• Tires and tubes
• Turbine engine components
• Turbine fuel controls
• Wheels
• Windshield and side windows

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Aviall Services Is the Clear Market Leader
2005 Net Sales(1)
( in millions)
1,265
10x the competition
125
120
50
Aviall Services
Satair
First Aviation
AAR
(1) Based on sales for Aviall Services only and
estimated new parts sales for Satair (excluding
hardware), First Aviation and AAR per Aviall
management estimate.
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Strong Supplier Relationships

• Strong relationships, and an outstanding
  reputation, with the leading aerospace OEMs
• Currently represent more than 220 OEMs
• More than 70 of sales from long-term, exclusive
  contracts

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New Contract Smiths Aerospace

• Worldwide aftermarket distribution rights for the
  civil aerospace line of products
• Approximately 2 billion of revenues over ten
  year agreement
• Over 15,000 unique parts
• Products covered include
• Mechanical systems - actuators, holdback devices,
  propeller systems, flight control systems,
  landing gear systems, and thrust reverser control
  systems
• Electronic systems flight management systems,
  power systems, modules, navigation equipment, and
  supplemental power systems
• Contract announced January 31, 2006

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New Contract Smiths Aerospace

• Top 5 customers include
• Lufthansa Technik AG
• Air France Industries
• Boeing Aircraft Company
• SR Technics Ireland Limited
• BAE Systems
• Products are utilized on platforms such as
  B737, A319/320, B777, B747, A300/310, MD11,
  B757/767, A330/340, MD80/90, BAE146, Saab 340,
  A380, B717, Gulfstream, Embraer, Falcon, Hawker
  Raytheon, and others.

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Compelling Value Proposition for OEMs
Aviall Reduces Cost and Invested Capitalfor OEMs
Aviall Increases Aftermarket Sales for OEMs

• Superior demand forecasting enhances OEM
  production planning and reduces inventory
• OEM working capital investment greatly reduced
• Disciplined market intelligence gathering assists
  in competitive performance assessment

• Global presence reaches more customers at lower
  cost
• Parts availability replaces non-OEM repairs and
  PMA parts
• Higher customer service levels increases
  purchases of OEM parts

OEM achieves higher sales, lower costs and a
higher return on capital
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Avialls Large, Addressable Market Provides Ample
Room for Growth
2000
Today
( in millions)
( in millions)
3.6x 2000
10,000
600
2.8x 2000
5,000
106
352
(1)
(2)
(1)
(2)
Aviall Revenue
Addressable Market
Small OEMs
Large OEMs
(1) Based on 2005A includes Aviall Services
only. (2) Market estimates per Aviall management.
Avialls demonstrated performance with large OEMs
has significantly expanded its addressable
market.
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Global Infrastructure / Global Reach
Europe AmsterdamStocking Location14 sales
professionals
Asia Hong Kong Singapore Stocking Location34
sales professionals
The Americas Dallas Headquarters27 Stocking
Locations260 sales professionals
Australia/New Zealand 7 Stocking Locations46
sales professionals
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Best in Class Software
Order Entry Sales Force Automation Sales Force
Integration
Purchase on the Web Web Customer Services Web
Supplier Services

• Real-Time Integration

Siebel
BroadVision
Sybase NEON
Lawson General Ledger AR/AP HR/Payroll
Sybase NEON
Sybase NEON
Xelus
Catalyst

• Large Scale I.T. Investment Completed

Inventory Control Warehouse Management
Product Allocation Inventory Management Purchasing
/Forecasting
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Aviall has provided extra value links in several
areas of the supply chain

• Sales and marketing multiplier
• Working capital reduction
• Prompt delivery to industry standards
• Demand forecasting
• Global presence
• Consistent demand
• Product repair
• Customer-focused marketing programs
• Customer feedback
• Research and analysis
• Relationship management
• Brand leverage
• Documentation
• Market basket leverage
• Technology solutions
• Market specialization

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ILS Is the Leading Aerospace Electronic
Marketplace

• Consistent revenue base
• Stable, high margin business
• Pioneer of e-commerce
• Operating computerized database since 1979
• Over 4,000 organizations subscribe with nearly
  20,000 users
• 50,000 accesses per day

Fulfillment
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Financial Overview
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Avialls Business Platform Drives Value Through
Operating Leverage
Substantial Sales Gains
Scalable Infrastructure
Sustainable Profit Growth
Sales Growth 1999 2005 ( in millions)
SA Expense as of Sales 1999 2005 ( in
millions)
EBITDA Growth 1999 2005 ( in millions)
CAGR 36
1030 bps decrease
CAGR 20
1,295.2
129.3
19.8
9.5
19.9
371.9
1999
2005
1999
2005
1999
2005
Avialls sophisticated and scalable
infrastructure provides a framework for
substantial earnings growth.
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2006 Expectations versus 2005

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Strong Balance Sheet Significant Liquidity
( in millions)
Revolving line of credit balance 0.0
0.0 84.1

• See definition and reconciliation in Appendix A

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Appendices
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Definitions
Variable Working Capital
We define Variable Working Capital as accounts
receivable plus inventories less accounts
payable. In no event should Variable Working
Capital be considered as an alternative to
working capital or any other GAAP measure as an
indicator of our performance, nor should Variable
Working Capital be considered as an alternative
to working capital as an indicator of our
relative liquidity to meet our obligations within
an ordinary business cycle. We believe that
Variable Working Capital is a useful measure,
along with measurements under GAAP, in evaluating
our financial performance and our ability to
leverage sales and earnings. In addition, we use
Variable Working Capital as a financial measure
to evaluate our management of working capital and
as a metric to measure contract and supplier
performance. The following table reconciles
Variable Working Capital to working capital for
the periods presented
( in thousands)
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Definitions (contd)
EBITDA
  EBITDA represents earnings from continuing
operations before depreciation, amortization,
interest and related expense and tax expense. In
2003 and 2001, interest and related expense
includes the loss on extinguishment of debt of
17.3 million and 1.6 million, respectively, in
connection with refinancing our debt. In no
event should EBITDA be considered as an
alternative to net earnings or any other GAAP
measure as an indicator of our performance, nor
should EBITDA be considered as an alternative to
cash flows provided by operating activities as an
indicator of cash flows or a measure of
liquidity. We believe that EBITDA is a useful
measure, along with measurements under GAAP, in
evaluating our financial performance and our
ability to service our debt and is a
conventionally used financial indicator. In
addition, management uses EBITDA as a financial
measure to evaluate our operating performance.
The following table reconciles net earnings to
EBITDA for the periods presented  
( in thousands)