11-K 1 f11k_062806-savings.txt ANNUAL REPORT ================================================================================ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 11-K [X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] for the fiscal year ended December 31, 2005 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] for the transition period from to Commission File number: A. Full title of the plan and the address of the plan, if different from that of the issuer named below: BE Aerospace, Inc. Savings Plan B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: BE Aerospace, Inc. 1400 Corporate Center Way Wellington, Florida 33414-2105 ================================================================================ BE AEROSPACE, INC. SAVINGS PLAN TABLE OF CONTENTS -------------------------------------------------------------------------------- Page REPORT OF INDEPENDENT REGISTERED PUBIC ACCOUNTING FIRM 1 FINANCIAL STATEMENTS: Statements of Net Assets Available for Benefits as of December 31, 2005 and 2004 2 Statements of Changes in Net Assets Available for Benefits for the Years Ended December 31, 2005 and 2004 3 Notes to Financial Statements as of December 31, 2005 and 2004, and for the Years Ended December 31, 2005 and 2004 4-8 SUPPLEMENTAL SCHEDULES PROVIDED PURSUANT TO THE DEPARTMENT OF LABOR'S RULES AND REGULATIONS: Form 5500, Schedule H, Part IV, Line 4i--Schedule of Assets (Held at End of Year) as of December 31, 2005 10 Form 5500, Schedule H, Part IV, Line 4j--Schedule of Reportable Transactions for the Year Ended December 31, 2005 11 NOTE: All other schedules required by the Department of Labor's Rules and Regulations for Reporting and Disclosure are omitted because of the absence of the conditions under which they are required. SIGNATURE PAGE 12 EXHIBIT INDEX 13 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Benefits Administrative Committee BE Aerospace, Inc. Savings Plan Wellington, Florida We have audited the accompanying statements of net assets available for benefits of BE Aerospace, Inc. Savings Plan (the "Plan") as of December 31, 2005 and 2004, and the related statements of changes in net assets available for benefits for the years then ended. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Plan's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such financial statements present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2005 and 2004, and the changes in net assets available for benefits for the years then ended, in conformity with accounting principles generally accepted in the United States of America. Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules listed in the table of contents are presented for the purpose of additional analyses and are not a required part of the basic financial statements, but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental schedules are the responsibility of the Plan's management. Such supplemental schedules have been subjected to the auditing procedures applied in our audit of the basic 2005 financial statements and, in our opinion, are fairly stated, in all material respects, when considered in relation to the basic 2005 financial statements taken as a whole. /s/ Deloitte & Touche LLP Costa Mesa, California June 28, 2006 - 1 - BE AEROSPACE, INC. SAVINGS PLAN STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS DECEMBER 31, 2005 AND 2004 -------------------------------------------------------------------------------- 2005 2004 ASSETS: Investments--at fair value: Investment in the UBS Trust Company Common and Collective Trusts $ 79,933,628 $ 69,518,473 BE Aerospace, Inc. common stock 25,750,014 14,724,478 Loans to participants 536,930 622,562 ------------ ------------ Total investments 106,220,572 84,865,513 ------------ ------------ Receivables: Employer contributions 383,476 299,460 Participant contributions 411,322 342,020 ------------ ------------ Total receivables 794,798 641,480 Cash and cash equivalents 126,514 78,298 ------------ ------------ Total assets 107,141,884 85,585,291 ------------ ------------ NET ASSETS AVAILABLE FOR BENEFITS $107,141,884 $ 85,585,291 ============ ============ See report of independent registered public accounting firm and notes to financial statements. - 2 - BE AEROSPACE, INC. SAVINGS PLAN STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004 -------------------------------------------------------------------------------- 2005 2004 ADDITIONS TO NET ASSETS ATTRIBUTED TO: Investment income: Net appreciation in fair value of investments $ 17,047,753 $ 13,278,597 Interest and dividends 38,900 37,590 ------------ ------------ Total investment income 17,086,653 13,316,187 Contributions and rollovers: Employer 2,892,842 2,188,635 Participant 7,688,228 6,777,966 ------------ ------------ Total additions to net assets 27,667,723 22,282,788 ------------ ------------ DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO: Distributions to participants or their beneficiaries 5,593,882 6,320,120 Plan administrative expenses 517,248 467,944 ------------ ------------ Total deductions from net assets 6,111,130 6,788,064 ------------ ------------ NET INCREASE 21,556,593 15,494,724 ------------ ------------ NET ASSETS AVAILABLE FOR BENEFITS--Beginning of year 85,585,291 70,090,567 ------------ ------------ NET ASSETS AVAILABLE FOR BENEFITS--End of year $107,141,884 $ 85,585,291 ============ ============ See report of independent registered public accounting firm and notes to financial statements. - 3 - BE AEROSPACE, INC. SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS AS OF DECEMBER 31, 2005 AND 2004, AND FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004 -------------------------------------------------------------------------------- 1. DESCRIPTION OF THE PLAN The foregoing description of the Plan provides only general information. Participants should refer to the Plan document for a more complete description of the Plan's provisions. Description of Plan--Effective January 1, 2002, BE Aerospace, Inc. (the "Company") adopted the BE Aerospace, Inc. Savings Plan (formerly the BE Aerospace, Inc. Savings and Profit Sharing Plan and Trust) (the "Plan"), as amended and restated, to comply with the Economic Growth and Tax Relief Reconciliation Act. The Plan is a defined-contribution retirement plan designed to qualify under Internal Revenue Code ("IRC") Section 401(a) and 401(k) for the cash or deferred arrangement part of the Plan. Under the Plan, contributions are made on behalf of employees (participants) who choose to defer a portion of their total gross pay. The maximum contribution rate for non-highly compensated participants is 100% of their gross pay. Under the Plan, participants become fully vested in the Company's contributions after three years of service with the Company. The Plan also allows all employees who are projected to attain age 50 before the close of the Plan year to make catch-up contributions each year which were limited to $4,000 and $3,000 for the years ended December 31, 2005 and 2004, respectively. Participant Contributions--Participants can make pretax contributions of up to $14,000 for the year ended December 31, 2005 and $13,000 for the year ended December 31, 2004. Participants are fully vested in their contributions immediately. Company Contributions--The Plan provides for employer-matching contributions of the participant's contributions to be determined by the Company's management. Company matching contributions are made in the form of the Company's common stock (the "Stock"). Participants age 55 or older have the option of receiving the matching contributions in cash. The Stock is held by UBS Trust Company (the "Trustee") and reported at fair value as determined by published market prices. Effective January 1, 2006, all Company matching contributions will be made in cash. During the years ended December 31, 2005 and 2004, matching contributions were 50% of deferrals up to 8% of eligible compensation (as defined) for a maximum matching contribution of 4%. Termination Benefits and Vesting--Participants are immediately vested in their contributions plus actual earnings thereon. Vesting in the Company's matching contributions, plus earnings thereon, is based on the participant's years of continuous service. Participants become fully vested in Company contributions after three years of credited service. On termination of service due to death, disability, or retirement, a participant shall become fully vested in all matching contributions and earnings thereon. Participant Loans- Participants may borrow from their fund accounts up to a maximum of $50,000 or 50% of their account balance, whichever is less. The loans are secured by the balance in the participant's account and bear interest at rates commensurate with local prevailing rates at the time funds - 4 - are borrowed as determined quarterly by the Plan administrator. Principal and interest are paid ratably through payroll deductions. Payment of Benefits - Upon termination of service, a participant may generally elect to receive either a lump-sum amount or installments equal to the value of the participant's vested interest in his or her account. If the value of the vested portion of the participant's account is $5,000 or less, the Plan will immediately distribute the entire vested portion of the participant's account. Excess Contributions Payable - The Plan is required to return contributions received during the Plan year in excess of the IRC limits. Forfeitures--At December 31, 2005 and 2004, forfeited nonvested accounts totaled $8,147 and $39,836, respectively. Forfeited nonvested account balances of $96,186, and $321,352 were used to reduce employer contributions for the years ended December 31, 2005 and 2004, respectively. Cash and Cash Equivalents--Cash and cash equivalents consist of highly liquid investments with initial maturities of 90 days or less. 2006 Plan Amendments - Effective July 1, 2006, the Company amended the Plan provisions related to Company matching contributions. The Company will make matching contributions equal to 100% of the first 3% of participant contributions and an additional 50% for the next 2% of participant contributions, not to exceed 4%. The participants will immediately vest in the Company matching contributions made after July 1, 2006. Matching contributions made prior to July 1, 2006 will be vested immediately on that date. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Accounting--The financial statements of the Plan are prepared under the accrual basis of accounting generally accepted in the United States of America. Investment in the UBS Trust Company Common and Collective Trusts--The investment in the UBS Trust Company Common and Collective Trusts (the "Trusts") consists primarily of a guaranteed insurance contract ("GIC") and certain debt and equity securities held by the Trusts. It is the policy of the Trusts to hold GIC investments until maturity. GIC investments are stated at contract value that their fair value at December 31, 2005 and 2004, as determined by quoted or published market prices. The crediting interest rates were 3.90% and 3.45% at December 31, 2005 and 2004, respectively. All other investments are stated at their fair value. Investment Valuation and Income Recognition--The Plan's investments are stated at fair value. Shares of registered investment companies are valued at quoted market prices which represent the net asset value of shares held by the Plan at year-end. The Company's stock is valued at its quoted market price. Participant loans are valued at the outstanding loan balance. Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date. Payments of Benefits--Benefits paid to participants are paid in accordance with the terms of the Plan. Amounts allocated to accounts of persons who have elected to withdraw from the plan but have not yet been paid were $119,133 and $204,789 at December 31, 2005 and 2004, respectively. - 5 - Administrative Expenses--Administrative expenses of the Plan are paid by the Plan, as provided in the Plan Agreement. Use of Estimates--The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and changes therein and disclosure of contingent assets and liabilities. Actual results could differ from those estimates. Plan Termination--Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of the Employee Retirement Income Security Act of 1974. In the event of Plan termination, participants become fully vested in their employer contributions. Risks and Uncertainties - The Plan provides for various investment options in any combination of common and collective trust accounts. Investment securities are exposed to various risks, such as interest rate, market and credit. Due to the level of risk associated with certain investment securities and the level of uncertainty related to changes in the value of investment securities, it is at least reasonably possible that changes in risks in the near term would materially affect participants' account balances and the amounts reported in the statements of net assets available for benefits and the statements of changes in the net assets available for benefits. 3. INVESTMENTS The Plan's investments, at fair value, that represented 5% or more of the Plan's net assets available for benefits are as follows as of December 31:
2005 2004 GIC Portfolio of the UBS Trust Company $17,901,057 $16,681,557 Balanced Value Portfolio of the UBS Trust Company 5,719,767 5,335,724 Capital Growth Portfolio of the UBS Trust Company 8,416,177 7,993,969 Strategic Balanced Portfolio of the UBS Trust Company 7,109,314 5,991,948 * Strategic Growth Portfolio of the UBS Trust Company - 5,117,660 Mid-Cap Value Portfolio of the UBS Trust Company 9,711,585 9,145,073 Overseas Equity Portfolio of the UBS Trust Company 7,597,197 5,614,241 * S&P 500 Index Portfolio of the UBS Trust Company - 4,425,253 ** BE Aerospace, Inc. Common Stock 25,750,014 14,724,478 * Reflects 2004 investments with 2005 balances that did not exceed 5% of net assets available for benefit in 2005. ** Nonparticipant-directed.
- 6 - During the years ended December 31, 2005 and 2004, net appreciation in fair value of the Plan's investments was as follows: 2005 2004 Common and collective trusts $ 4,308,882 $ 5,161,687 Common stock** 12,738,871 8,116,910 ----------- ----------- $17,047,753 $13,278,597 =========== =========== **Nonparticipant-directed. 4. NONPARTICIPANT-DIRECTED INVESTMENTS Information about the net assets and the significant components of the changes in net assets relating to the nonparticipant-directed investments as of December 31, 2005 and 2004, and for the year ended December 31, 2005, is as follows: 2005 2004 Net assets: $ 25,750,014 $ 14,724,478 BE Aerospace, Inc. Common Stock Changes in net assets: Net appreciation in fair value of investments 12,738,871 Participant contributions -- Employer contributions 2,628,003 Benefits paid to participants (4,684) Transfers to participant-directed investments (4,336,654) ------------ Net change 11,025,536 BE Aerospace, Inc. Common Stock - beginning of year 14,724,478 ------------ BE Aerospace, Inc. Common Stock - end of year $ 25,750,014 ============ 5. RECONCILIATION OF FINANCIAL STATEMENTS TO 5500 The following is a reconciliation of net assets available for benefits per the financial statements to Form 5500 at December 31:
2005 2004 Net assets available for benefits per the financial statements $ 107,141,884 $ 85,585,291 Amounts allocated to withdrawing participants (119,133) (204,789) ------------- ------------- Net assets available for benefits per the Form 5500 $ 107,022,751 $ 85,380,502 ============= =============
- 7 - The following is a reconciliation of benefits paid to participants per the financial statements for the year ended December 31, 2005 to Form 5500: Benefits paid to participants per the financial statements $5,593,882 Add: Amounts allocated to withdrawing participants at December 31, 2005 119,133 Less: Amounts allocated to withdrawing participants at December 31, 2004 (204,789) ---------- Benefits paid to participants per Form 5500 $5,508,226 ========== Amounts allocated to withdrawing participants are recorded on the Form 5500 for benefit claims that have been processed and approved for payment prior to December 31, 2005 but not yet paid as of that date. 6. PARTY-IN-INTEREST TRANSACTIONS Certain Plan investments are shares of funds managed by UBS Trust Company. UBS Trust Company is the Trustee as defined by the Plan and, therefore, these transactions qualify as party-in-interest transactions. Fees paid by the Plan for investment management services were included as a reduction of the return on each fund. At December 31, 2005 and 2004, the Plan held 1,169,228 and 1,264,068 shares, respectively, of common stock of BE Aerospace, Inc., the sponsoring employer, with a cost basis of $9,437,298 and $8,885,360, respectively. 7. INCOME TAXES The Internal Revenue Service ("IRS") has determined and informed the Company by a letter dated October 16, 2003, that the Plan and related trust were designed in accordance with the applicable regulations of the IRC. The Plan has been amended since receiving the determination letter; however, the Company and Plan management believe that the Plan is currently designed and operated in compliance with the applicable requirements of the IRC and the Plan and related trust continue to be tax-exempt. Therefore, no provision for income taxes has been included in the Plan's financial statements. ****** - 8 - SUPPLEMENTAL SCHEDULES PROVIDED PURSUANT TO THE DEPARTMENT OF LABOR'S RULES AND REGULATIONS - 9 - BE AEROSPACE, INC. SAVINGS PLAN FORM 5500, SCHEDULE H, PART IV, LINE 4i SCHEDULE OF ASETS (HELD AT END OF YEAR) DECEMBER 31, 2005
-------------------------------------------------------------------------------- (a) (b) (c) (d) (e) Identity of Issuer, Description of Investment, Including Borrower, Lessor or Maturity Date, Rate of Interest, Cost Current Value Similar Party Collateral, Par or Maturity Value * UBS Trust Company GIC Portfolio ** $ 17,901,057 * UBS Trust Company Balanced Value Portfolio ** 5,719,767 * UBS Trust Company Capital Growth Portfolio ** 8,416,177 * UBS Trust Company Strategic Balanced Portfolio ** 7,109,314 * UBS Trust Company Strategic Growth Portfolio ** 4,927,078 * UBS Trust Company Mid-Cap Value Portfolio ** 9,711,585 * UBS Trust Company Overseas Equity Portfolio ** 7,597,197 * UBS Trust Company S&P 500 Index Portfolio ** 4,609,359 * UBS Trust Company Small Company Growth Portfolio ** 2,588,845 * UBS Trust Company Concentrated Growth Portfolio ** 2,318,667 * UBS Trust Company Conservative Bond Portfolio ** 3,407,367 * UBS Trust Company Large Company Value Portfolio ** 3,503,503 * UBS Trust Company Mid-Cap Growth Portfolio ** 1,478,417 * UBS Trust Company US Allocation Portfolio ** 157,301 * UBS Trust Company Multi-Asset Portfolio ** 487,994 * BE Aerospace, Inc. Common Stock $9,437,298 25,750,014 * Loan to participants Participant loans (maturing 2005 to 2015 at interest rates of 5.0% to 10.5%) ** 536,930 ------------- $ 106,220,572 ============= * Party-in-interest ** Cost information is not required for participant-directed investments and therefore is not included. Note: All investments in the UBS Trust Company are comprised of common and collective trusts.
- 10 - BE AEROSPACE, INC. SAVINGS PLAN FORM 5500, SCHEDULE H, PART IV, LINE 4j SCHEDULE OF REPORTABLE TRANSACTIONS YEAR ENDED DECEMBER 31, 2005
------------------------------------------------------------------------------------------------------ Purchase Selling Cost of Price Price Asset Net Gain Common stock of BE Aerospace, Inc.* $ 63,426 $4,397,917 $2,148,120 $2,249,797 --5 purchases and 225 sales
* Party-in-interest - 11 - SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Plan Administrator has duly caused this annual report to be signed on its behalf by the undersigned, thereunto duly authorized. BE AEROSPACE, INC. Savings Plan Date: June 28, 2006 By: /s/ Joseph A. Piegari ----------------------------------- Name: Joseph A. Piegari Title: Plan Administrator BE AEROSPACE, INC. - 12 - EXHIBIT INDEX Exhibit Number Description of Document ------- ----------------------- 23.1 Consent of Independent Registered Public Accounting Firm - 13 -