10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

Quarterly Report Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

For The Quarterly Period Ended June 30, 2016

Commission File No. 0-18348

B/E AEROSPACE, INC.

(Exact name of registrant as specified in its charter)

DELAWARE	06-1209796
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer   Identification No.)

1400 Corporate Center Way

Wellington, Florida 33414-2105

(Address of principal executive offices)

(561) 791-5000

(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES[X] NO[ ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YES [X] NO [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act: Large accelerated filer [X] Accelerated filer [ ] Non-accelerated filer (do not check if a smaller reporting company) [ ] Smaller reporting company [ ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES [ ] NO [X ]

The registrant has one class of common stock, $0.01 par value, of which 101,625,079 shares were outstanding as of July 26, 2016.

B/E AEROSPACE, INC.

Form 10-Q for the Quarter Ended June 30, 2016

Table of Contents

		Page
Part I	Financial Information
Item 1.	Condensed Consolidated Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets as of June 30, 2016 and December 31, 2015	3
	Condensed Consolidated Statements of Earnings and Comprehensive Income for the Three Months and Six Months Ended June 30, 2016 and 2015	4
	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2016 and 2015	5
	Notes to Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	13
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	23
Item 4.	Controls and Procedures	23
Part II	Other Information
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	25
Item 5.	Other Information	25
Item 6.	Exhibits	26
Signatures		27

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PART I - FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

B/E AEROSPACE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(In Millions, Except Per Share Data)

	June 30,		December 31,
	2016		2015
ASSETS
Current assets:
Cash and cash equivalents	$	100.2	$	154.1
Accounts receivable		420.6		354.6
Inventories		1,198.1		1,091.9
Other current assets		57.7		57.8
Total current assets		1,776.6		1,658.4
Property and equipment, net of accumulated depreciation ($340.9 at June 30, 2016 and $320.0 at December 31, 2015)		387.5		391.2
Goodwill		813.3		813.2
Identifiable intangible assets		224.2		231.3
Other assets		50.5		46.8
	$	3,252.1	$	3,140.9
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	314.0	$	300.5
Accrued liabilities		539.3		521.7
Total current liabilities		853.3		822.2
Long-term debt		2,044.6		2,034.1
Deferred income taxes		96.4		92.7
Other non-current liabilities		139.1		136.4
Commitments, contingencies and off-balance sheet arrangements (Note 8)
Stockholders’ equity:
Preferred stock, $0.01 par value; 1.0 shares authorized; no shares outstanding		--		--
Common stock, $0.01 par value; 200.0 shares authorized, 107.6 shares issued as of June 30, 2016 and 107.4 shares issued as of December 31, 2015		1.1		1.1
Additional paid-in capital		(828.4)		(847.8)
Treasury stock: 6.0 shares at June 30, 2016 and 4.2 shares at December 31, 2015		(260.5)		(183.9)
Retained earnings		1,357.4		1,232.9
Accumulated other comprehensive loss		(150.9)		(146.8)
Total stockholders’ equity		118.7		55.5
	$	3,252.1	$	3,140.9

Seeaccompanyingnotestocondensedconsolidatedfinancialstatements.

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B/E AEROSPACE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

AND COMPREHENSIVE INCOME (UNAUDITED)

(In Millions, Except Per Share Data)

	Three months ended June 30,				Six months ended June 30,
	2016		2015		2016		2015
Revenues	$	753.1	$	700.6	$	1,469.8	$	1,390.6
Cost of sales		447.8		420.1		884.4		821.7
Selling, general and administrative		87.9		86.2		171.7		173.3
Research, development and engineering		80.8		67.0		147.7		142.6
Operating earnings		136.6		127.3		266.0		253.0
Operating earnings, as a percentage of revenues		18.1%		18.2%		18.1%		18.2%
Interest expense, net		22.7		24.1		45.8		48.4
Earnings before income taxes		113.9		103.2		220.2		204.6
Income tax expense		29.1		24.3		52.8		48.1
Net earnings		84.8		78.9		167.4		156.5
Other comprehensive (loss) income:
Foreign currency translation adjustment and other		(19.5)		27.3		(4.1)		(23.3)
Comprehensive income	$	65.3	$	106.2	$	163.3	$	133.2
Net earnings per common share:
Basic	$	0.85	$	0.76	$	1.66	$	1.50
Diluted	$	0.84	$	0.75	$	1.66	$	1.49
Dividends declared per share	$	0.21	$	0.19	$	0.42	$	0.38
Weighted average common shares:
Basic		100.2		104.5		100.7		104.5
Diluted		100.7		105.0		101.1		105.0

See accompanying notes to condensed consolidated financial statements.

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B/E AEROSPACE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(In Millions)

	Six months ended June 30,
	2016		2015
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings	$	167.4	$	156.5
Adjustments to reconcile net earnings to net cash flows provided by operating activities, net of effects from acquisitions:
Depreciation and amortization		42.2		41.3
Deferred income taxes		2.6		5.5
Non-cash compensation		16.7		14.3
Provision for doubtful accounts		0.9		0.2
Loss on disposal of property and equipment		1.0		0.2
Tax benefits realized from prior exercises of restricted stock		(0.4)		(2.4)
Changes in operating assets and liabilities:
Accounts receivable		(73.4)		(95.6)
Inventories		(118.0)		(107.1)
Other current and non-current assets		(2.9)		62.3
Accounts payable and accrued liabilities		58.0		34.7
Net cash provided by operating activities		94.1		109.9
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures		(36.1)		(48.0)
Acquisitions, net of cash acquired		--		4.3
Other		(1.0)		(5.1)
Net cash used in investing activities		(37.1)		(48.8)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from common stock issued		2.5		3.1
Purchase of treasury stock, including share repurchases		(76.6)		(0.4)
Tax benefits realized from prior exercises of restricted stock		0.4		2.4
Borrowings on line of credit		160.0		--
Repayments on line of credit		(150.0)		--
Principal payments on long-term debt		--		(11.0)
Dividends		(42.2)		(19.9)
Net cash used in financing activities		(105.9)		(25.8)
Effect of foreign exchange rate changes on cash and cash equivalents		(5.0)		(1.5)
Net (decrease) increase in cash and cash equivalents		(53.9)		33.8
Cash and cash equivalents, beginning of period		154.1		292.5
Cash and cash equivalents, end of period	$	100.2	$	326.3
Supplemental disclosures of cash flow information:
Cash paid (refunded) during period for:
Interest	$	44.7	$	37.4
Income taxes, net of $14.2 payments in 2015		31.2		(30.0)
Supplemental schedule of noncash investing activities:
Accrued property additions	$	2.8	$	5.5

See accompanying notes to condensed consolidated financial statements.

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B/E AEROSPACE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited - In Millions, Except Per Share Data)

Note 1.Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. All adjustments which, in the opinion of management, are considered necessary for a fair presentation of the results of operations for the periods shown are of a normal recurring nature and have been reflected in the condensed consolidated financial statements. The results of operations for the periods presented are not necessarily indicative of the results expected for the full fiscal year or for any future period. The information included in these condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and accompanying notes included in the B/E Aerospace, Inc. (the “Company”) Annual Report on Form 10-K for the fiscal year ended December 31, 2015.

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 and related disclosures. Actual results could differ from those estimates.

Note 2.Recent Accounting Pronouncements

In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-09, Improvements to Employee Share-Based Payment Accounting, which amends ASC Topic 718, Compensation – Stock Compensation. The ASU includes multiple provisions intended to simplify various aspects of the accounting for share-based payments. Earlier adoption is permitted. The ASU is effective for annual periods beginning after December 15, 2016, and interim periods within those years.The Company is currently evaluating the effect of this update on our consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, Leases (“ASU 2016-02”), which supersedes ASC Topic 840, Leases, and creates a new topic, ASC Topic 842, Leases. This update is effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. Earlier adoption is permitted. ASU 2016-02 requires lessees to recognize a lease liability and a lease asset for all leases, including operating leases, with a term greater than 12 months on its balance sheet. The update also expands the required quantitative and qualitative disclosures surrounding leases. ASU 2016-02 will be applied using a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The Company is currently evaluating the effect of this update on our consolidated financial statements.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, which updated the guidance in ASC Topic 606, Revenue Recognition. The new standard was originally effective for reporting periods beginning after December 15, 2016 and early adoption was not permitted. In August 2015, the FASB issued ASU 2015-14 which amended the effective date of this ASU to fiscal years beginning after December 15, 2017, and early adoption is permitted only for fiscal years beginning after December 15, 2016. Accordingly, we plan to adopt this ASU on January 1, 2018. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should identify the contract(s) with a customer, identify the performance obligations in the contract(s), determine the transaction price, allocate the transaction price to the performance obligations in the contract(s) and recognize revenue when (or as) the entity satisfies a performance obligation. The two permitted transition methods under the new standard are the full retrospective method, in which case the standard would be applied to each prior reporting period presented, or the modified retrospective method,

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in which case the cumulative effect of applying the standard would be recognized at the date of initial application. The Company is currently evaluating the impact this guidance will have on its consolidated financial condition, results of operations, cash flows, business processes, systems, internal controls and disclosures and is currently unable to estimate the impact of adopting this guidance.

Note 3.Inventories

Inventories are stated at the lower of cost or market. Cost is determined using FIFO or the weighted average cost method. Finished goods and work-in-process inventories include material, labor and manufacturing overhead costs. In accordance with industry practice, costs in inventory include amounts relating to long-term contracts with long production cycles and inventory items with long procurement cycles, some of which are not expected to be realized within one year. Work-in-process inventories include costs and estimated earnings in excess of billings on uncompleted contracts of $101.6 and $87.7 and capitalized development costs on long-term seller furnished equipment contracts of $488.6 and $438.1 as of June 30, 2016 and December 31, 2015, respectively. Inventories consist of the following:

		June 30,		December 31,
		2016		2015
Purchased materials and component parts	$	340.3	$	322.7
Work-in-process		807.6		722.7
Finished goods		50.2		46.5
	$	1,198.1	$	1,091.9

Note 4.Goodwill and Intangible Assets

The table below sets forth the intangible assets by major asset class, all of which were acquired through business purchase transactions:

				June 30, 2016						December 31, 2015
	Useful Life			Original		Accumulated		Net Book		Original		Accumulated		Net Book
	(Years)			Cost		Amortization		Value		Cost		Amortization		Value
Customer contracts and relationships	13	-	23	$	129.8	$	24.0	$	105.8	$	129.4	$	20.1	$	109.3
Acquired technologies and other	5	-	34		148.3		66.6		81.7		150.0		65.3		84.7
Trade names	5	-	20		28.7		4.9		23.8		29.0		4.0		25.0
Trademarks and patents	3	-	20		25.8		13.9		11.9		27.1		16.3		10.8
Covenants not to compete	3	-	5		2.3		1.3		1.0		2.5		1.0		1.5
				$	334.9	$	110.7	$	224.2	$	338.0	$	106.7	$	231.3

Amortization expense of intangible assets was $4.5 and $4.2 for the three months ended June 30, 2016 and 2015, respectively, and $9.1 and $8.5 for the six months ended June 30, 2016 and 2015, respectively. The Company currently expects to recognize amortization expense of approximately $18in each of the next five fiscal years. The future amortization amounts are estimates. Actual future amortization expense may be different due to future acquisitions, impairments, changes in amortization periods or other factors such as changes in exchange rates for assets acquired outside the United States. The Company expenses costs to renew or extend the term of a recognized intangible asset.  

Goodwill increased $0.1 during the six months ended June 30, 2016 due to foreign currency translations.

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Note 5.  Related Party Transactions

On December 16, 2014, we completed the spin-off of KLX Inc. (“KLX”) by means of the transfer of our Consumables Management Segment to KLX and the subsequent distribution to our stockholders of all the outstanding shares of KLX common stock (the “Spin-Off”). We retained our commercial aircraft and business jet segments.

We entered into transitional services agreements with KLX prior to the Spin-Off pursuant to which we and KLX are providing various services to each other on an interim transitional basis. Transition services may be provided for up to 24 months, and for information technology services, KLX has an option for a one-year extension. This transitional support will enable KLX to establish its stand-alone processes for various activities that were previously provided by us and does not constitute significant continuing support of KLX’s operations.

In addition, we entered into a Tax Sharing and Indemnification Agreement with KLX. Under this agreement, we generally assume liability for all federal and state income taxes for all tax periods ending on or prior to December 31, 2014.

Sales and cost of sales to KLX for the three and six months ended June 30, 2016 and 2015 were immaterial to the consolidated financial statements. There were no material balances due to or due from KLX as of June 30, 2016 or December 31, 2015. Total purchases from KLX were approximately $4.4 for the three months ended June 30, 2016 and 2015, and $10.6 and $9.5 for the six months ended June 30, 2016 and 2015, respectively.

Note 6.Long-Term Debt

The Company entered into a credit agreement dated as of December 16, 2014 (as amended, the “Credit Agreement”) governing its senior secured bank credit facilities, consisting of (a) a five-year, $600.0 revolving credit facility (the “Revolving Credit Facility”) and (b) a seven-year, $2,200.0 term loan facility (the “Term Loan Facility”). The most recent amendment to the Credit Agreement on May 27, 2016 decreased the effective borrowing rate, increased the amount available for dividend and share repurchases and provided greater flexibility to securitize assets. Borrowings under the Revolving Credit Facility bear interest at an annual rate equal to the London interbank offered rate (“LIBOR”) plus 200 basis points or prime (as defined therein) plus 100 basis points (4.5% at June 30, 2016). There was $10.0 outstanding under the Revolving Credit Facility as of June 30, 2016 (no amount outstanding as of December 31, 2015).  Borrowings under the Term Loan Facility bear interest at an annual rate equal to LIBOR plus 300 basis points (LIBOR shall not be less than 75 basis points per annum) or ABR (as defined therein) plus 200 basis points (3.75% at June 30, 2016). 

As of June 30, 2016, long-term debt consisted of $2,064.0 outstanding under the Term Loan Facility and $10.0 outstanding under the Revolving Credit Facility, neither of which were current. On a net basis, after taking into consideration unamortized original issue discount and debt issue costs for the Term Loan Facility, total debt was $2,044.6.

Letters of credit outstanding under the Revolving Credit Facility aggregated $14.3 at June 30, 2016 ($7.7 at December 31, 2015).

The Revolving Credit Facility contains an interest coverage ratio financial covenant (as defined therein) that must be maintained at a level greater than 3.0 to 1 and a total leverage ratio covenant (as defined therein) which limits gross debt to a 4.5 to 1 multiple of EBITDA (as defined therein). The Credit Agreement is collateralized by substantially all of the Company’s assets and contains customary affirmative covenants, negative covenants, restrictions on the payment of dividends and the repurchase of our stock, and conditions precedent for borrowings, all of which were met as of June 30, 2016.

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Note 7.Fair Value Measurements

All short-term financial instruments are generally carried at amounts that approximate estimated fair value. The fair value is the price at which an asset could be exchanged in a current transaction between knowledgeable, willing parties. Assets measured at fair value are categorized based upon the lowest level of significant input to the valuations.

Level 1 – quoted prices in active markets for identical assets and liabilities.

Level 2 – quoted prices for identical assets and liabilities in markets that are not active, or observable inputs other than quoted prices in active markets for identical assets and liabilities.

Level 3 – unobservable inputs in which there is little or no market data available, which require the reporting entity to develop its own assumptions.

The carrying amounts of cash and cash equivalents (which the Company classifies as Level 1 assets), accounts receivable – trade and accounts payable represent their respective fair values due to their short- term nature. The carrying value of the Revolving Credit Facility and Term Loan Facility approximates fair value based upon observable market data (which the Company classifies as Level 2).

The fair value information presented herein is based on pertinent information available to management at June 30, 2016 and December 31, 2015, respectively. Although management is not aware of any factors that would significantly affect the estimated fair value amounts, such amounts have not been comprehensively revalued for purposes of these condensed consolidated financial statements since those dates, and current estimates of fair value may differ significantly from the amounts presented herein.

Note 8.Commitments, Contingencies and Off-Balance Sheet Arrangements

Lease Commitments – The Company finances its use of certain facilities and equipment under committed lease arrangements provided by various institutions. Since the terms of these arrangements meet the accounting definition of operating lease arrangements, the aggregate sum of future minimum lease payments is not reflected on the condensed consolidated balance sheets. At June 30, 2016, future minimum lease payments under these arrangements approximated $178.4, the majority of which related to long-term real estate leases.

Litigation – The Company is a defendant in various legal actions arising in the normal course of business, the outcomes of which, in the opinion of management, neither individually nor in the aggregate, are likely to result in a material adverse effect on the Company’s condensed consolidated financial statements.

Indemnities, Commitments and Guarantees – During its normal course of business, the Company has made certain indemnities, commitments and guarantees under which it may be required to make payments in relation to certain transactions. These indemnities include non-infringement of patents and intellectual property indemnities to the Company’s customers in connection with the design, manufacture, sale and delivery of its products, indemnities to various lessors in connection with facility leases for certain claims arising from such facility or lease, and indemnities to other parties to certain acquisition agreements. The duration of these indemnities, commitments and guarantees varies, and in certain cases is indefinite. Many of these indemnities, commitments and guarantees provide for limitations on the maximum potential future payments the Company could be obligated to make. However, the Company is unable to estimate the maximum amount of liability related to its indemnities, commitments and guarantees because such liabilities are contingent upon the occurrence of events that are not reasonably determinable. Management believes that any liability for these indemnities, commitments and guarantees would not be material to the accompanying condensed consolidated financial statements. Accordingly, no significant amounts have been accrued for indemnities, commitments and guarantees.

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Product Warranty Costs – Estimated costs related to product warranties are accrued at the time products are sold. In estimating its future warranty obligations, the Company considers various relevant factors, including the Company’s stated warranty policies and practices, the historical frequency of claims and the cost to replace or repair its products under warranty.

Note 9.Accounting for Stock-Based Compensation

The Company has a Long-Term Incentive Plan (“LTIP”) under which the Company’s Compensation Committee has the authority to grant stock options, stock appreciation rights, restricted stock, restricted stock units or other forms of equity-based or equity-related awards.

Compensation cost generally is recognized on a straight-line basis over the vesting period of the shares. Share-based compensation of $8.2 and $7.2 was recognized during the three months ended June 30, 2016 and 2015, respectively, and $16.1 and $13.5was recognized during the six months ended June 30, 2016 and 2015, respectively, related to the equity grants made pursuant to the LTIP. Unrecognized compensation expense related to equity grants, including the estimated impact of any future forfeitures, was $63.2 at June 30, 2016.

The Company has established a qualified Employee Stock Purchase Plan which allows qualified employees (as defined therein) to purchase shares of the Company’s common stock at a price equal to 85% of the closing price at the end of each semi-annual stock purchase period. Compensation cost for this plan was not material to any of the periods presented.

Note 10.  Segment Reporting

The Company is organized based on the products and services it offers. The Company’s reportable segments, which are also its operating segments, are comprised of commercial aircraft and business jet. Each segment regularly reports its results of operations and makes requests for capital expenditures and acquisition funding to the Company’s chief operational decision-making group. This group is comprised of the Executive Chairman of the Board of Directors, the President and Chief Executive Officer and the Vice President and Chief Financial Officer. Each operating segment has separate management teams and infrastructures dedicated to providing a full range of products and services to their commercial, business jet, military, maintenance, repair and overhaul providers, aircraft leasing and aircraft manufacturing customers. The Company has not included product line information due to the similarity of commercial aircraft segment product offerings.

The following table presents revenues and operating earnings by reportable segment:

	Three months ended				Six months ended
	June 30,				June 30,
	2016		2015		2016		2015
Revenues:
Commercial aircraft	$	610.8	$	539.3	$	1,167.8	$	1,065.4
Business jet		142.3		161.3		302.0		325.2
	$	753.1	$	700.6	$	1,469.8	$	1,390.6
Operating earnings(1)
Commercial aircraft	$	114.6	$	99.7	$	219.3	$	198.1
Business jet		22.0		27.6		46.7		54.9
Operating earnings		136.6		127.3		266.0		253.0
Interest expense, net		22.7		24.1		45.8		48.4
Earnings before income taxes	$	113.9	$	103.2	$	220.2	$	204.6

(1) Operating earnings includes an allocation of corporate IT costs, employee benefits and general and administrative costs based on the proportion of each segment’s systems users, number of employees and sales, respectively.

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The following table presents capital expenditures(1) by reportable segment:

	Three months ended				Six months ended
	June 30,				June 30,
	2016		2015		2016		2015
Commercial aircraft	$	14.3	$	13.3	$	29.4	$	36.5
Business jet		4.2		9.4		6.7		11.5
	$	18.5	$	22.7	$	36.1	$	48.0

(1) Corporate capital expenditures have been allocated to the above segments in a manner consistent with our corporate expense allocations.

The following table presents goodwill and total assets(1) by reportable segment:

	June 30, 2016						December 31, 2015
	Commercial		Business				Commercial		Business
	Aircraft		Jet		Consolidated		Aircraft		Jet		Consolidated
Goodwill	$	372.3	$	441.0	$	813.3	$	372.6	$	440.6	$	813.2
Total assets		2,251.9		1,000.2		3,252.1		2,120.5		1,020.4		3,140.9

(1) Corporate assets (including cash and cash equivalents) of $275.5 and $322.2 at June 30, 2016 and December 31, 2015, respectively, have been allocated to the above segments in a manner consistent with our corporate expense allocations. 

Note 11.  Net Earnings Per Common Share

Basic net earnings per common share is computed using the weighted average common shares outstanding during the period. Diluted net earnings per common share is computed by using the weighted average common shares outstanding including the dilutive effect of shares issued under the Employee Stock Purchase Plan and restricted shares based on an average share price during the period. For the three months ended June 30, 2016 and 2015, approximately 0.5 and 0.4 shares, respectively, and for the six months ended June 30, 2016 and 2015, approximately 0.4 and 0.6 shares, respectively, of the Company’s common stock were excluded from the determination of diluted earnings per common share because their effect would have been anti-dilutive.

The computations of basic and diluted earnings per share for the three and six months ended June 30, 2016 and 2015, respectively, are as follows:

	Three months ended				Six months ended
	June 30,				June 30,
	2016		2015		2016		2015
Net earnings	$	84.8	$	78.9	$	167.4	$	156.5
Basic weighted average common shares		100.2		104.5		100.7		104.5
Effect of restricted shares issued		0.5		0.5		0.4		0.5
Diluted weighted average common shares		100.7		105.0		101.1		105.0
Basic net earnings per common share	$	0.85	$	0.76	$	1.66	$	1.50
Diluted net earnings per common share	$	0.84	$	0.75	$	1.66	$	1.49

Note 12.  Accounting for Uncertainty in Income Taxes

In accordance with ASC Topic 740, Income Taxes, the Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. As of June 30, 2016 and December 31,

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2015, the Company had $90.4 and $89.0, respectively, of net unrecognized tax benefits. This liability, if recognized, would affect the Company’s effective tax rate. The Company is currently undergoing a U.S. federal income tax examination for the year 2013. The Company is currently open to audit by the tax authorities for the nine tax years ended December 31, 2015. 

Note 13.  Restructuring and Other Charges

During 2015, the Company recognized charges totaling $49.0 in connection with its cost reduction program. The charges reflect costs associated with facilities consolidation, product rationalization, workforce reductions and program discontinuance. The charges are included in the amounts and descriptions below, as appropriate.  The Company expects the cost reduction initiatives to offset inflationary pressures on wages, occupancy and infrastructure costs. The majority of the activities related to the cost reduction program are expected to be completed by the end of 2016 and future charges are not expected to be material. No additional restructuring charges were incurred during the six months ended June 30, 2016.

The following table presents the liability balance and activity related to restructuring and other charges:

			Disposals
		Balance at	andOther				Balanceat
		December 31, 2015	NoncashCharges		Cash Paid		June 30, 2016
Facility Consolidations	$	9.2	$	(0.5)	$	(3.1)	$	5.6
Employee Severance		2.2		(0.5)		(0.6)		1.1
	$	11.4	$	(1.0)	$	(3.7)	$	6.7

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ITEM 2.   MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(In Millions, Except Per Share Data)

OVERVIEW

The following discussion and analysis addresses the results of our operations for the three and six months ended June 30, 2016, as compared to our results of operations for the three and six months ended June 30, 2015. 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 we are the world’s largest manufacturer of cabin interior products for commercial aircraft and for business jets. We sell our products and provide our services directly to virtually all of the world’s major airlines and aerospace manufacturers. 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:

· 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 coffee and espresso makers, water boilers, beverage containers, refrigerators, freezers, chillers and a line of ovens that includes microwave, high efficiency convection and steam ovens;

· modular lavatory systems, wastewater management systems and galley systems;

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

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

We provide comprehensive aircraft cabin interior reconfiguration, program management and certification services. In addition, we also design, engineer and manufacture customized fully integrated thermal and power management solutions for participants in the defense industry, aerospace original equipment manufacturers (“OEM” or “OEMs”) and the airlines.

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

Revenues by reportable segment for the three and six months ended June 30, 2016 and June 30, 2015, respectively, were as follows:

	Three months ended June 30,								Six months ended June 30,
	2016				2015				2016				2015
			% of				% of				% of				% of
	Revenues		Revenues		Revenues		Revenues		Revenues		Revenues		Revenues		Revenues
Commercial aircraft	$	610.8	81.1	%	$	539.3	77.0	%	$	1,167.8	79.5	%	$	1,065.4	76.6	%
Business jet		142.3	18.9	%		161.3	23.0	%		302.0	20.5	%		325.2	23.4	%
Total revenues	$	753.1	100.0	%	$	700.6	100.0	%	$	1,469.8	100.0	%	$	1,390.6	100.0	%

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Revenues by geographic segment (based on destination) for the three and six months ended June 30, 2016 and June 30, 2015, respectively, were as follows:

	Three months ended June 30,								Six months ended June 30,
	2016				2015				2016				2015
			% of				% of				% of				% of
	Revenues		Revenues		Revenues		Revenues		Revenues		Revenues		Revenues		Revenues
U.S.	$	292.4	38.8	%	$	243.4	34.7	%	$	524.8	35.7	%	$	473.4	34.0	%
Europe		153.6	20.4	%		184.1	26.3	%		305.7	20.8	%		399.5	28.7	%
Asia, Pacific Rim, Middle East and Other		307.1	40.8	%		273.1	39.0	%		639.3	43.5	%		517.7	37.3	%
Total revenues	$	753.1	100.0	%	$	700.6	100.0	%	$	1,469.8	100.0	%	$	1,390.6	100.0	%

Revenues by domestic and foreign operations for the three and six months ended June 30, 2016 and June 30, 2015, respectively, were as follows:

	Three months ended June 30,								Six months ended June 30,
	2016				2015				2016				2015
			% of				% of				% of				% of
	Revenues		Revenues		Revenues		Revenues		Revenues		Revenues		Revenues		Revenues
Domestic	$	422.3	56.1	%	$	408.6	58.3	%	$	857.8	58.4	%	$	812.2	58.4	%
Foreign		330.8	43.9	%		292.0	41.7	%		612.0	41.6	%		578.4	41.6	%
Total revenues	$	753.1	100.0	%	$	700.6	100.0	%	$	1,469.8	100.0	%	$	1,390.6	100.0	%

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 and the growth of our record backlog. Research, development and engineering spending was approximately 10.7% of revenues during the second quarter of 2016. We expect research and development expenditures to be approximately 10% of revenues over the next several years.

We also believe in providing our businesses with the tools required to remain competitive. In that regard, we have invested, and will continue to invest, in property and equipment that enhance our productivity. Taking into consideration recent awards to deliver multi-year programs for various Boeing and Airbus aircraft, our targeted capacity utilization levels, recent acquisitions and current industry conditions, we expect that our capital expenditures will be approximately $85 during 2016.

Strong long-term industry trends and a buyer furnished equipment business strategy which is leveraged to airline profitability and traffic growth continue to support our revenue growth outlook. Year-to-date global traffic is up 6% through May driven primarily by the growing middle classes around the world who have begun to access air travel. Traffic growth has moderated somewhat in April and May; however, it did grow at a healthy rate of 4.6% which supports forward fleet growth. Asia Pacific and Middle East traffic are up 8.1% and 11.2%, respectively, year-to-date. A number of airlines are currently facing lower unit revenue challenges as a result of lower airfares consistent with lower fuel prices. These airlines had anticipated an increase in demand growth that has not materialized. We believe this is a relatively short-term phenomenon and we expect airline managements will respond appropriately and adjust capacity to meet demand as they have done over the past decade.

Despite these challenges, the International Air Transport Association (“IATA”) continues to expect record aggregate airline profits in 2016. Strong traffic growth and record airline profitability are generating high levels of aircraft deliveries by both Airbus and Boeing.  Longer term, global airline traffic is expected to grow at a rate of about 4.5% to 5% annually, driven by the emerging middle classes around the world and ever increasing access to air travel. 

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In contrast to the strength in the commercial airline market, the business jet OEM market has been, and is expected to continue to be, adversely impacted by macroeconomic factors such as the collapse of oil prices, the developing country currency crisis and global economic uncertainty. At the recent European Business Aviation Convention & Exhibition, industry experts reported that the fleet remains in a state of significant oversupply with many used business jets at substantially lower prices than new business jets. Industry experts are expecting a decline of approximately 10% in new business jet deliveries in 2016 as compared to 2015. In addition, the civilian helicopter market has also been adversely impacted by macroeconomic factors, including particularly the collapse in oil prices.

RESULTS OF OPERATIONS

THREE MONTHS ENDED JUNE 30, 2016, 
COMPARED TO THREE MONTHS ENDED JUNE 30, 2015

(In Millions, Except Backlog and Per Share Data)

	REVENUES
	Three months ended June 30,
					Percent
	2016		2015		Change
Commercial aircraft	$	610.8	$	539.3	13.3%
Business jet		142.3		161.3	-11.8%
Total revenues	$	753.1	$	700.6	7.5%

Second quarter 2016 revenues of $753.1 increased 7.5%, as compared with the prior year period. Revenues increased due to revenue growth of 13.3% in the Commercial Aircraft Segment (“CAS”), which was partially offset by a reduction in revenue of 11.8% in the Business Jet Segment (“BJS”).

Cost of sales for the current period was $447.8, or 59.5% of revenues, as compared with cost of sales of $420.1, or 60.0% of revenues, in the prior year period. Gross margin increased due primarily to higher revenues and favorable product mix at CAS partially offset by lower revenues and an unfavorable product mix at BJS as compared with the prior year period.

Selling, general and administrative (“SG&A”) expense for the second quarter of 2016 was $87.9, or 11.7% of revenues, as compared with SG&A expense of $86.2, or 12.3% of revenues, in the same period in 2015. The 60 basis point decrease in SG&A expense as a percentage of revenues was primarily the result of cost reduction initiatives.

Engineering, research and development (“ER&D”) expense for the second quarter of 2016 was $80.8, or 10.7% of revenues, as compared with $67.0, or 9.6% of revenues, in the same period in 2015. ER&D expense increased as a result of program mix and higher engineering expense related to development programs.

Second quarter 2016 operating earnings were $136.6, an increase of 7.3%, and operating margin was 18.1%, a decrease of 10 basis points as a result of lower margins at BJS, each as compared to the same period in 2015.

Interest expense in the current period of $22.7 decreased by $1.4 as compared with the prior year period as the result of a lower amount of outstanding debt in the current year period.

Second quarter 2016 earnings before income taxes were $113.9, an increase of $10.7, or 10.4%, as compared with the prior year period. 

We now expect our full year income tax rate for 2016 to be approximately 24%. As a result, the effective tax rate for the second quarter of 2016 is approximately 25.5% as compared with approximately 23.5% in the

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prior year period. The current quarter tax rate reflects the adjustment required to align the first half of 2016 results with this new expectation.

Second quarter 2016 net earnings and net earnings per diluted share were $84.8 and $0.84 per share, an increase of 7.5% and 12.0%, respectively, as compared with the prior year period. Net earnings per share in the current period benefitted from fewer shares outstanding as a result of the Company’s share repurchase program.

Bookings during the second quarter of 2016 were approximately $755 and the book-to-bill ratio for the second quarter of 2016 was approximately 1:1. Booked backlog at June 30, 2016 was approximately $3.3 billion, while awarded but unbooked was approximately $5.6 billion. Total backlog, both booked and awarded but unbooked, was approximately $8.9 billion.

     SEGMENT RESULTS

The following is a tabular summary and commentary of operating earnings by segment for the three months ended June 30, 2016 and 2015:

	OPERATING EARNINGS
	Three months ended June 30,
					Percent
	2016		2015		Change
Commercial aircraft	$	114.6	$	99.7	14.9%
Business jet		22.0		27.6	-20.3%
Total operating earnings	$	136.6	$	127.3	7.3%

Second quarter 2016 CAS revenues of $610.8 increased 13.3%. The revenue increase was driven primarily by higher volumes of seating products, food and beverage preparation and storage equipment, A350 galleys and B737 lavatories. Operating earnings of $114.6 increased 14.9% and operating margin of 18.8% increased 30 basis points as compared with the prior year period.  

Second quarter 2016 BJS revenues of $142.3 decreased 11.8% as compared with the same period of the prior year.  Revenues declined as a result of the broad-based downturn in the new business jet and civilian helicopter markets and lower volumes of super first class seating products. Operating earnings of $22.0 decreased 20.3% and operating margin of 15.5% decreased 160 basis points as a result of lower revenues and an unfavorable mix of products as compared with the prior year period. 

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SIX MONTHS ENDED JUNE 30, 2016,

AS COMPARED TO SIX MONTHS ENDED JUNE 30, 2015

	REVENUES
	Six months ended June 30,
					Percent
	2016		2015		Change
Commercial aircraft	$	1,167.8	$	1,065.4	9.6%
Business jet		302.0		325.2	-7.1%
Total revenues	$	1,469.8	$	1,390.6	5.7%

For the six months ended June 30, 2016, revenues of $1,469.8 increased 5.7%, as compared with the prior year period. Revenues increased due to revenue growth of 9.6% in the CAS, which was partially offset by a reduction in revenues of 7.1% in the BJS.

Cost of sales for the current six month period was $884.4, or 60.2% of revenues, as compared with cost of sales of $821.7, or 59.1% of revenues, in the prior year period. Gross margin decreased due primarily to lower revenues and an unfavorable product mix at BJS as compared with the prior year period.

SG&A expense for the first six months of 2016 was $171.7, or 11.7% of revenues, as compared with SG&A of $173.3, or 12.5% of revenues, in the same period in 2015. The 80 basis point margin decrease in SG&A expense was primarily the result of cost reduction initiatives.

ER&D expense for the first six months of 2016 was $147.7, or 10.0% of revenues, as compared with $142.6, or 10.3% of revenues, in the same period in 2015. The 30 basis point decrease in ER&D was due to program mix, particularly within BJS. We expect that ER&D expense will approximate 10% of revenues for the full year 2016.

For the six months ended June 30, 2016, operating earnings of $266.0 increased $13.0, or 5.1%, and operating margin of 18.1% decreased 10 basis points as a result of lower margins at BJS, each as compared to the prior year period.

Interest expense in the first half of 2016 of $45.8 decreased by $2.6 as compared with the prior year period primarily as the result of a lower amount of outstanding debt in the current year period.

Earnings before income taxes in the current six month period of $220.2 increased by $15.6, or 7.6%, as compared with the prior year period.

Income tax expense for the six months ended June 30, 2016 of $52.8, or 24.0% of earnings before income taxes, increased by $4.7 as compared with the prior year period income tax expense of $48.1, which represented a 23.5% effective tax rate.

Net earnings for the first half of 2016 of $167.4 and net earnings per diluted share of $1.66 increased $10.9 and $0.17, or 7.0% and 11.4%, respectively, as compared with the prior year period.

Bookings for the six months ended June 30, 2016 were approximately $1.5 billion, representing a book-to-bill ratio of approximately 1.1 : 1.

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    SEGMENT RESULTS

The following is a summary of operating earnings by segment:

	OPERATING EARNINGS
	Six months ended June 30,
					Percent
	2016		2015		Change
Commercial aircraft	$	219.3	$	198.1	10.7%
Business jet		46.7		54.9	-14.9%
Total operating earnings	$	266.0	$	253.0	5.1%

For the six months ended June 30, 2016, CAS revenues of $1,167.8 increased 9.6% as compared to the prior year period. The revenue increase was driven primarily by higher volumes of seating products, food and beverage preparation and storage equipment, A350 galleys and B737 lavatories. Operating earnings of $219.3 increased 10.7% and operating margin of 18.8% increased 20 basis points, each as compared with the prior year period.

For the six months ended June 30, 2016, BJS revenues of $302.0 decreased 7.1% as compared with the prior year period. Revenues declined as a result of the broad-based downturn in the new business jet and civilian helicopter markets and lower volumes of super first class seating products. Operating earnings decreased 14.9% to $46.7 and operating margin of 15.5% decreased 140 basis points as compared with the prior year period as a result of lower revenues and an unfavorable mix of products.

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LIQUIDITY AND CAPITAL RESOURCES

Current Financial Condition

Cash on hand at June 30, 2016 decreased by $53.9 as compared with cash on hand at December 31, 2015, primarily as a result of capital expenditures of $36.1, dividend payments of $42.2 and share repurchases of $76.6, offset by cash flows from operating activities of $94.1 and net borrowings on our Revolving Credit Facility of $10.0. Shares repurchased included amounts purchased from employees in connection with the settlement of income tax and related benefit withholding obligations arising from vesting of restricted stock grants under the Company’s Long-Term Incentive Plan. The substantial majority of our cash is held within the United States, and all of our foreign cash may be brought back into the United States in a tax efficient manner. Our liquidity requirements consist of working capital needs, ongoing capital expenditures, payments of interest and principal on our indebtedness and any dividends or share repurchases. Our primary requirements for working capital are directly related to the level of our operations.

Working capital as of June 30, 2016 was $923.3, an increase of $87.1 as compared with working capital at December 31, 2015. As of June 30, 2016, total current assets increased by $118.2 and total current liabilities increased by $31.1, in each case as compared to December 31, 2015. Total current assets increased primarily as a result of a $66.0 increase in accounts receivable and a $106.2 increase in inventories (both net of foreign currency translations) to support future revenue growth. The increase in total current liabilities was due to a $13.5 increase in accounts payable and a $17.6 increase in other current liabilities.

The Company entered into its Credit Agreement, dated as of December 16, 2014 (as amended, the “Credit Agreement”) consisting of (a) a five-year, $600.0 revolving credit facility (the “Revolving Credit Facility”) and (b) a seven-year, $2,200.0 term loan facility (the “Term Loan Facility”). The most recent amendment to the Credit Agreement on May 27, 2016 decreased the effective borrowing rate, increased the amount available for dividend and share repurchases and provided greater flexibility to securitize assets. At June 30, 2016, there was $10.0 outstanding under the Revolving Credit Facility (no amount outstanding as of December 31, 2015). The Revolving Credit Facility matures in December 2019 unless terminated earlier. Outstanding long-term debt as of June 30, 2016 consisted of $2,064.0 outstanding under the Term Loan Facility, none of which was current and $10.0 outstanding under the Revolving Credit Facility. On a net basis, after taking into consideration the unamortized original issue discount and debt issue costs for the Term Loan Facility, total debt was $2,044.6.

Cash Flows

As of June 30, 2016, our cash and cash equivalents were $100.2 as compared to $154.1 at December 31, 2015. Cash generated from operating activities was $94.1 for the six months ended June 30, 2016, as compared to $109.9 in the same period in the prior year. The primary sources of cash from operations during the six months ended June 30, 2016 were net earnings of $167.4, adjusted for depreciation and amortization of $42.2 and non-cash compensation of $16.7. Offsetting these sources of cash were an increase in accounts receivable of $73.4 and a $118.0 increase in inventories to support our record backlog.

Capital Spending

Our capital expenditures were $36.1 and $48.0 during the six months ended June 30, 2016 and 2015, respectively. We expect capital expenditures to be approximately $85 during 2016. These capital expenditures are needed to support our total backlog of approximately $8.9 billion ($3.3 billion booked and $5.6 billion awarded but unbooked). Our capital spending also takes into consideration our targeted capacity utilization levels and current industry conditions. We have, in the past, generally funded our capital expenditures with cash from operations and funds available to us under revolving bank credit facilities. We expect to fund future capital expenditures from cash on hand, from operations and from funds available to us under the Revolving Credit Facility.

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Payment of Cash Dividends and Share Repurchase Program

During the first quarter of 2016, the Company declared a quarterly cash dividend of $0.21 per share on its common stock, resulting in total dividends of $21.2. During the second quarter of 2016, the Company declared a quarterly cash dividend of $0.21 per share on its common stock, resulting in total dividends of $21.0.

On November 11, 2014, the Company announced that its Board of Directors authorized a $400.0 share repurchase program. During the second quarter of 2016, the Company repurchased 611,900 shares of common stock pursuant to its share repurchase program at an average price of $48.78 per share for a total of $29.8. At June 30, 2016, the Company had $174.7 of authorization remaining under its share repurchase program.

Outstanding Debt and Other Financing Arrangements

Outstanding long-term debt as of June 30, 2016 consisted of $2,064.0 outstanding under the Term Loan Facility, none of which was current and $10.0 outstanding under the Revolving Credit Facility. On a net basis, after taking into consideration the unamortized original issue discount and debt issue costs for the Term Loan Facility, total debt was $2,044.6.

The Credit Agreement provides an option to request additional incremental revolving credit borrowing capacity and incremental term loans, in each case upon the satisfaction of certain customary terms and conditions.

Our obligations under the Credit Agreement are secured by liens on substantially all of our domestic assets, including a pledge of a portion of the capital stock of certain foreign subsidiaries owned directly. Amounts borrowed and outstanding under the Term Loan Facility will, in certain circumstances, be required to be prepaid with the proceeds from certain asset sales, subject to certain thresholds and reinvestment rights. The Term Loan Facility amortizes at 1% of the initial funded principal amount annually, with the balance due for repayment at final maturity in December 2021. At the Company’s election, the Credit Agreement allows for the prepayment of the Term Loan Facility to be applied to reduce any subsequent scheduled amortization payments. Unless terminated earlier or extended, the Revolving Credit Facility will mature in December 2019.

The Revolving Credit Facility contains an interest coverage ratio financial covenant (as defined therein) that must be maintained at a level greater than 3.0 to 1 and a total leverage ratio covenant (as defined therein) which limits gross debt to a 4.5 to 1 multiple of EBITDA (as defined therein). The Credit Agreement contains customary affirmative covenants, negative covenants, restrictions on the payment of dividends and the repurchase of our stock and conditions precedent for borrowing. We were in compliance with all of the covenants, restrictions and conditions precedent in the Credit Agreement as of June 30, 2016.

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Contractual Obligations

The following table reflects our contractual obligations and commercial commitments as of June 30, 2016. Commercial commitments include lines of credit, guarantees and other potential cash outflows resulting from a contingent event that may require performance by us or our subsidiaries pursuant to a funding commitment.

Contractual Obligations	2016		2017		2018		2019		2020		Thereafter		Total
Long-term debt and other non-current liabilities (1)	$	0.6	$	1.8	$	1.2	$	11.3	$	1.3	$	2,106.5	$	2,122.7
Operating leases		13.6		25.8		24.2		21.1		19.5		74.2		178.4
Purchase obligations (2)		4.0		1.4		-		-		-		-		5.4
Future interest payments on outstanding debt (3)		40.9		80.3		80.3		80.1		79.9		79.9		441.4
Total	$	59.1	$	109.3	$	105.7	$	112.5	$	100.7	$	2,260.6	$	2,747.9
Commercial Commitments
Letters of credit	$	14.3		-		-		-		-		-	$	14.3

(1) Our liability for unrecognized tax benefits of $90.4 at June 30, 2016 has been omitted from the above table because we cannot determine with certainty when this liability will be settled. It is reasonably possible that the amount of liability for unrecognized tax benefits will change in the next twelve months; however, we do not expect the change to have a significant impact on our consolidated financial statements.

(2) We enter into purchase commitments for production materials and other items. We also enter into unconditional purchase obligations with various vendors and suppliers of goods and services in the normal course of operations through purchase orders, other documentation or with an invoice. Such obligations are generally outstanding for periods less than a year and are settled by cash payments upon delivery of goods and services and are not reflected as purchase obligations in this table.

(3) Interest payments include interest payments due on the Term Loan Facility based on minimum principal payments and using LIBOR as in effect at June 30, 2016 which was the higher of three-month LIBOR or 0.75%. Actual interest payments on the Term Loan Facility and, to the extent we draw under it, the Revolving Credit Facility, will fluctuate based on LIBOR or ABR pursuant to their terms.

We believe that our cash flows, together with cash on hand and the availability under the Revolving Credit Facility, provide us with the ability to fund our operations, make planned capital expenditures, make scheduled debt service payments and fund dividends and share repurchases, if any, for at least the next twelve months. However, such cash flows are dependent upon our future operating performance, which, in turn, is subject to prevailing economic conditions and to financial, business and other factors, including the conditions of our markets, some of which are beyond our control. If, in the future, we cannot generate sufficient cash from operations to meet our debt service or other obligations, we will need to refinance such debt obligations, obtain additional financing or sell assets. We cannot assure you that our business will generate cash from operations or that we will be able to obtain financing from other sources sufficient to satisfy our debt service, dividend, share repurchase or other requirements.

Off-Balance Sheet Arrangements

Lease Arrangements

We finance our use of certain equipment under committed lease arrangements provided by various financial institutions. Since the terms of these arrangements meet the accounting definition of operating lease arrangements, the aggregate sum of future minimum lease payments is not reflected in our condensed consolidated balance sheets. Our aggregate future minimum lease payments under these arrangements total approximately $178.4 at June 30, 2016.

Indemnities, Commitments and Guarantees

During the normal course of business, we have made certain indemnities, commitments and guarantees under which we may be required to make payments in relation to certain transactions. These indemnities include non-infringement of patents and intellectual property indemnities to our customers in connection with

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the design, manufacture, sale and delivery of our products, indemnities to various lessors in connection with facility leases for certain claims arising from such facility or lease, and indemnities to other parties to certain acquisition agreements. The duration of these indemnities, commitments and guarantees varies, and in certain cases, is indefinite. We believe that many of our indemnities, commitments and guarantees provide for limitations on the maximum potential future payments we could be obligated to make. However, we are unable to estimate the maximum amount of liability related to our indemnities, commitments and guarantees because such liabilities are contingent upon the occurrence of events which are not reasonably determinable. Management believes that any liability for these indemnities, commitments and guarantees would not be material to our condensed consolidated financial statements.

Backlog

We record backlog when we enter into a definitive order for the delivery of products to our customers in the future. Within backlog, we differentiate between booked backlog and awarded but unbooked backlog. Generally if there are definitive delivery dates then the backlog is considered booked. When we receive the delivery date specificity in writing from our customers on these long-term contracts, management includes such amount in booked backlog. If a contract does not provide that level of specificity, the production requirements are generally provided to us through periodic purchase orders issued against the underlying contracts at which point the amount of the purchase orders is classified as booked. The remaining portion of the underlying contract is considered awarded but unbooked. In addition, purchase orders for end items and spares are generally received and recorded as backlog when we accept their terms.

Critical Accounting Policies

Critical accounting policies are defined as those that are reflective of significant judgments and uncertainties, and potentially result in materially different results under different assumptions and conditions. We believe that our critical accounting policies are limited to those described in the Critical Accounting Policies section of Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015. There have been no changes to our critical accounting policies since December 31, 2015.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements to encourage companies to provide prospective information to investors. This Quarterly Report on Form 10-Q (this “Form 10-Q”) includes forward-looking statements that reflect our current expectations and projections about our future results, performance, prospects, liquidity, expenditures, payment of dividends and repurchase of shares. Forward-looking statements include all statements that are not historical in nature or are not current facts. We have tried to identify these forward-looking statements by using words including “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “should,” “will” and similar expressions. These forward-looking statements are subject to a number of risks, uncertainties, assumptions and other factors that could cause our actual results, performance, prospects and ability to pay dividends or repurchase stock to differ materially from those expressed in, or implied by, these forward-looking statements. These factors include the risks, uncertainties, assumptions and other factors discussed under the headings “Item 1A. Risk Factors,” as well as “Item 1. Business,” “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015, including: future events that may have the effect of reducing our available operating income and cash balances, such as unexpected operating losses, the impact of rising fuel prices on our airline customers, outbreaks in national or international hostilities, terrorist attacks, prolonged health and environmental issues that reduce air travel demand, delays in, or unexpected costs associated with, the integration of our acquired businesses, conditions in the airline industry, conditions in the business jet industry, problems meeting customer delivery requirements, our success in winning new or expected refurbishment contracts from customers, capital expenditures, increased leverage, possible future acquisitions, facility closures, product transition costs, labor disputes involving us, our significant customers’ suppliers or airframe manufacturers, the impact of a prolonged global recession, the possibility of a write-down of intangible assets,

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delays or inefficiencies in the introduction of new products, fluctuations in currency exchange rates or our inability to properly manage our rapid growth.

In light of these risks and uncertainties, you are cautioned not to unduly rely on such forward-looking statements when evaluating the information presented herein. These statements should be considered only after carefully reading this entire Form 10-Q. Except as required under the federal securities laws and rules and regulations of the Securities and Exchange Commission (“SEC”), we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Additional risks that we may currently deem immaterial or that are not presently known to us could also cause the forward-looking events discussed in this Form 10-Q not to occur.      

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to a variety of risks, including foreign currency fluctuations and changes in interest rates affecting the cost of our variable-rate debt.

Foreign Currency – We have direct operations in Europe and the Philippines that receive revenues from customers primarily in U.S. dollars. We purchase raw materials and component parts from foreign vendors primarily in U.S. dollars and to a lesser extent, British pounds, Euros and Philippine pesos. Our European and Philippine labor is primarily sourced in local currencies. Accordingly, we are exposed to transaction gains and losses that could result from changes in foreign currency exchange rates relative to the U.S. dollar.

From time to time, we and our foreign subsidiaries may enter into foreign currency exchange contracts to manage risk on transactions conducted in foreign currencies. At June 30, 2016, we had no outstanding forward currency exchange contracts. In addition, we have not entered into any other derivative financial instruments.

Interest Rates – As of June 30, 2016, we had $2.1 billion of adjustable rate debt outstanding. We do not engage in transactions intended to hedge our exposure to changes in interest rates. If adjustable interest rates were to increase or decrease by 10%, we estimate annual interest expense would increase or decrease by approximately $7.8 million.

As of June 30, 2016, we maintained a portfolio of cash and securities consisting mainly of taxable, interest-bearing deposits with weighted average maturities of less than three months. If short-term interest rates were to increase or decrease by 10%, we estimate interest income would increase or decrease by less than $0.1 million.

ITEM 4.  CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company’s reports under the Securities Exchange Act of 1934 (the “Exchange Act”) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including the Company’s Executive Chairman of the Board of Directors, President and Chief Executive Officer and Vice President and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. The Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s President and Chief Executive Officer and Vice President and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act), as of June 30, 2016. Based upon that evaluation, the President and Chief Executive Officer and Vice President and Chief Financial Officer concluded that the Company’s disclosure controls and procedures are effective.

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Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the second quarter of 2016 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II – OTHER INFORMATION

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Issuer Purchases of Equity Securities

The following table provides information on the Company’s repurchases of our common stock during the second quarter of 2016:

				Total Number of		Approximate Dollar
				Shares Purchased		Value of
				as Part of		Shares That May
				Publicly		Yet Be Purchased
	Total Number of	Average Price		Announced		Under the
Period	Shares Purchased (1)	Paid per Share (1)		Program (2)		Program (2)
April 1-30, 2016	364,595		$ 49.29		364,100		$ 186,628,275
May 1-31, 2016	247,843		48.01		247,800		174,730,434
June 1-30, 2016	-		-		-		174,730,434
Total	612,438		$ 48.78		611,900

(1) Includes 538 shares purchased from employees in connection with the settlement of income tax and related benefit withholding obligations arising from vesting of restricted stock grants under the Company’s Long-Term Incentive Plan.

(2) On November 11, 2014, the Board of Directors authorized a share repurchase program for the repurchase of outstanding shares of the Company’s Common Stock having an aggregate purchase price of up to $400 million. The share repurchase program expires November 10, 2016.

ITEM 5. OTHER INFORMATION

The Annual Meeting of Stockholders of the Company took place on July 28, 2016. Proxies for the meeting were solicited and the proposals described below were submitted to a vote of the Company’s stockholders at the annual meeting. The following is a brief description of each matter voted on and the results of voting.

1.	Election of three Class I Directors.
2.	Approval of a Non-Binding Advisory Vote on Executive Compensation.
3.	Ratification of the Appointment of Deloitte & Touche LLP as the Company’s Independent Registered Public Accounting Firm for the Year Ending December 31, 2016.

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The number of shares voted for, against and abstained/withheld, as well as the number of broker non-votes, were as follows:

			Abstained/
	For	Against	Withheld	Non Votes
1. Election of Class I Directors:
Mary M. VanDeWeghe	80,955,167	-	704,807	5,164,919
James F. Albaugh	78,774,399	-	2,885,575	5,164,919
John T. Whates	75,782,644	-	5,877,330	5,164,919
2. Non-Binding Advisory Vote on Executive Compensation	72,945,700	8,049,647	664,627	5,164,919
3. Ratification of Appointment of Deloitte & Touche	85,193,545	1,505,613	125,735	-

ITEM 6. EXHIBITS

Exhibit 10(i) – Material Contracts
10.1	Amendment No. 2 to Credit Agreement, dated as of May 27, 2016, by and among the Company, the lenders parties thereto, and JPMorgan Chase Bank, N.A., as Administrative Agent
Exhibit 31 – Rule 13a-14(a)/15d-14(a) Certifications
31.1	Certification of President and Chief Executive Officer
31.2	Certification of Vice President and Chief Financial Officer
Exhibit 32 – Section 1350 Certifications
32.1	Certification of President and Chief Executive Officer pursuant to 18 U.S.C. Section 1350
32.2	Certification of Vice President and Chief Financial Officer pursuant to 18 U.S.C. Section 1350
Exhibit 101 – Interactive Data Files
101.INS   XBRL Instance Document
101.SCH  XBRL Taxonomy Extension Schema Document
101.CAL  XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF  XBRL Taxonomy Extension Definition Linkbase Document
101.LAB  XBRL Taxonomy Extension Label Linkbase Document
101.PRE  XBRL Taxonomy Extension Presentation Linkbase Document

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		B/E AEROSPACE, INC.
Date: July 29, 2016	By:	/s/ Werner Lieberherr
		Werner Lieberherr
		President and Chief Executive Officer
Date: July 29, 2016	By:	/s/ Joseph T. Lower
		Joseph T. Lower
		Vice President and Chief Financial Officer

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EX-10.1

EXHIBIT 10.1

This AMENDMENT NO. 2, dated as of May 27, 2016 (this Amendment), is made by and among B/E AEROSPACE, INC., a Delaware corporation (the Company), each of the Lenders (as defined below) that is a signatory hereto, and JPMORGAN CHASE BANK, N.A., as administrative agent (the Administrative Agent).

The Company, the lenders from time to time party thereto (the Lenders), and the Administrative Agent are party to that certain Credit Agreement, dated as of December 16, 2014, as amended by that certain Amendment No. 1 dated January 30, 2015 (as amended, supplemented and otherwise modified and in effect immediately prior to the effectiveness of the amendments contemplated hereby, the Credit Agreement).

The Company has requested that the Lenders agree, and the Lenders party hereto have agreed (each such Lender, a Consenting Lender), to amend the Credit Agreement, all on the terms and conditions of this Amendment.

The Administrative Agent, with the consent of the Required Lenders, is willing, on the terms and subject to the conditions set forth below, to amend the terms of the Credit Agreement as provided for herein.

Accordingly, the parties hereto agree as follows:

1. DEFINITIONS

Terms used but not defined herein shall have the respective meanings ascribed to such terms in the Credit Agreement. In addition, as used herein, (a) SecondAmendment Effective Date means the first date on which each of the conditions to effectiveness set forth in Section 5 hereof shall have been satisfied (or waived), and (b) Repricing Amendment Effective Datemeans the first date on which each of the conditions to effectiveness set forth in Section 6 hereof shall have been satisfied (or waived).

2. CREDIT AGREEMENT AMENDMENTS

Subject to the satisfaction (or waiver) of the conditions to effectiveness specified in Section 5 hereof, but with effect on and after the date hereof, the Credit Agreement shall be amended as follows:

(a) Section 1.1 of the Credit Agreement is hereby amended by inserting the following definitions in the appropriate alphabetical order (and, where applicable, replacing in its entirety the definition of such term therein):

Attributable Receivables Amount means the amount of obligations of the Company and/or its Restricted Subsidiaries outstanding under receivables purchase facilities (including supplier-financing programs or arrangements) or factoring transactions on any date of determination that would be characterized as principal if such facilities, programs, arrangements or transactions were structured as secured lending transactions rather than as

purchases and sales, whether such obligations would constitute on-balance sheet Indebtedness or an off-balance sheet liability.

Bail-In Action means the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an EEA Financial Institution.

Bail-In Legislation means, with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule.

Credit Documents means the collective reference to this Agreement, the Notes, the Administrative Agency Fee Letter, the Guaranty (including any guarantee or Credit Party Accession Agreement executed and delivered pursuant to the terms of Section 8.10 or 9.15 of this Agreement), the Collateral Documents, the First Amendment, the Second Amendment and any Incremental Facility Amendment.

Defaulting Lender means, subject to Section 5.24, any Lender that (a) has failed, within two Business Days of the date required to be funded or paid, to (i) fund any portion of its Loans, (ii) fund any portion of its participations in Letters of Credit or Swing Line Loans or (iii) pay over to any Finance Party any other amount required to be paid by it hereunder, unless, in the case of clause (i) above, such Lender notifies the Administrative Agent in writing that such failure is the result of such Lender’s good faith determination that a condition precedent to funding (specifically identified and including the particular default, if any) has not been satisfied, (b) has notified the Company or any Finance Party in writing, or has made a public statement to the effect, that it does not intend or expect to comply with any of its funding obligations under this Agreement (unless such writing or public statement relates to such Lender’s obligation to fund a Loan hereunder and indicates that such position is based on such Lender’s good faith determination that a condition precedent (specifically identified and including the particular default, if any) to funding a loan under this Agreement cannot be satisfied) or generally under other agreements in which it commits to extend credit, (c) has failed, within three Business Days after request in writing by the Administrative Agent, the Swing Line Lender or any Issuing Lender, acting in good faith, to provide a certification in writing from an authorized officer of such Lender that it will comply with its obligations to fund prospective Loans and participations in then outstanding Letters of Credit and Swing Line Loans under this Agreement, provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon such Finance Party’s receipt of such certification in form and substance satisfactory to it and the Administrative Agent, or

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(d) has, or has a direct or indirect parent entity that has, after the date hereof, become the subject of a Bankruptcy Event or of a Bail-In Action.

EEA Financial Institution means (a) any institution established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.

EEA Member Country means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.

EEA Resolution Authority means any public administrative authority or any Person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.

EU Bail-In Legislation Schedule means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor Person), as in effect from time to time.

First Amendment means that certain Amendment No. 1 to Credit Agreement dated January 30, 2015, between the Company and the Administrative Agent.

Non-Consenting Lender means any Lender that fails to consent to any amendment, waiver, supplement or other modification pursuant to Section 12.1 requiring the consent of all Lenders or of each Lender directly affected thereby, and as to which the Required Lenders or a majority of all Lenders directly affected thereby, as applicable, have otherwise consented.

Permitted Factoring Transactions means receivables purchase facilities (including supplier-financing programs and arrangements) and factoring transactions entered into by the Company or any Restricted Subsidiary with respect to Receivables originated by the Company or such Restricted Subsidiary in the ordinary course of business, which facilities, programs, arrangements and factoring transactions give rise to Attributable Receivables Amounts that are non-recourse to the Company and its Restricted Subsidiaries, other than limited recourse rights that are customary for receivables purchase facilities (including supplier-financing programs and arrangements) and factoring transactions of the same kind.

Receivables means any right to payment of the Company or any Restricted Subsidiary created by or arising from sales of goods, leases of goods or the rendition of services rendered no matter how evidenced whether or not

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earned by performance (whether constituting accounts, general intangibles, chattel paper or otherwise).

Receivables Related Security means all contracts, contract rights, guarantees and other obligations related to Receivables, all proceeds and collections of Receivables and all other assets and security of a type that are customarily sold or transferred in connection with receivables purchase facilities and factoring transactions of a type that could constitute Permitted Factoring Transactions.

Second Amendment means that certain Amendment No. 2 to Credit Agreement dated May 27, 2016 among the Company, the Lenders party thereto and the Administrative Agent.

Write-Down and Conversion Powers means, with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule.

(b) Section 5.22 of the Credit Agreement is hereby amended and restated in its entirety as follows:

In the event any Lender (i) is a Defaulting Lender, a Declining Lender or a Non-Consenting Lender, (ii) exercises its rights pursuant to Section 5.19 or (iii) requests payments pursuant to Sections 5.20 or 5.23, the Company may require, at the Company’s expense and subject to Section 5.21, such Lender or the Issuing Lender to assign, at par plus accrued interest and fees, without recourse (in accordance with Section 12.6) all of its interests, rights and obligations hereunder (including all of its Revolving Credit Commitments and the Loans and other amounts at the time owing to it hereunder and its interest in the Letters of Credit) to a bank, financial institution or other entity specified by the Company; provided that (A) such assignment shall not conflict with or violate any law, rule or regulation or order of any court or other Governmental Authority, (B) the Company shall have received the written consent of the Administrative Agent (and, in the case of an assignment of a Revolving Credit Commitment, of the Issuing Lender and Swing Line Lender), which consent shall not unreasonably be withheld, to such assignment, (C) the Company shall have paid to the assigning Lender all monies other than principal owing hereunder to it and (D) in the case of a required assignment by the Issuing Lender, the Letters of Credit shall be canceled and returned to the Issuing Lender.

(c) Section 5.24(c)(i) of the Credit Agreement is hereby amended and restated in its entirety as follows:

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(i)all or any part of the Revolving Credit Commitments and the Revolving Credit Commitment Percentages in outstanding Revolving Credit Loans of such Defaulting Lender in Swing Line Loans and Letters of Credit shall be reallocated among the non-Defaulting Lenders in accordance with their respective Revolving Credit Commitment Percentages but only to the extent that (x) the sum of all non-Defaulting Lenders’ Revolving Credit Commitment Percentages in Revolving Credit Loans plus such Defaulting Lender’s Revolving Credit Commitment Percentage in Swing Line Loans and Letters of Credit does not exceed the total of all non-Defaulting Lenders’ Commitments and (y) the conditions set forth in Section 7.2 are satisfied at such time, provided, that subject to Section 12.17, no reallocation hereunder shall constitute a waiver or release of any claim of any party hereunder against a Defaulting Lender arising from that Lender having become a Defaulting Lender, including any claim of a non-Defaulting Lender as a result of such non-Defaulting Lender’s increased exposure following such reallocation;

(d) Section 9.2 of the Credit Agreement is hereby amended by (i) deleting the word “and” at the end of paragraph (m) of such Section 9.2, (ii) replacing the period at the end of paragraph (n) of such Section 9.2 with “; and”, and (iii) inserting the following paragraph (o) immediately after paragraph (n) in such Section 9.2:

(o) Indebtedness in the form of Attributable Receivables Amounts incurred by the Company or any Restricted Subsidiary in connection with Permitted Factoring Transactions, provided the aggregate of all such Attributable Receivables Amounts outstanding at any time pursuant to this clause (o) shall not exceed $200,000,000.

(e) Section 9.3 of the Credit Agreement is hereby amended by (i) deleting the word “and” at the end of paragraph (s) of such Section 9.3, (ii) replacing the period at the end of paragraph (t) of such Section 9.3 with “; and”, and (iii) inserting the following paragraph (u) immediately after paragraph (t) in such Section 9.3:

(u) precautionary Liens on Receivables and Receivables Related Security arising in connection with Permitted Factoring Transactions.

(f) Section 9.6 of the Credit Agreement is hereby amended by (i) deleting the word “and” at the end of paragraph (j) of such Section 9.6, (ii) replacing the period at the end of paragraph (k) of such Section 9.6 with “; and”, and (iii) inserting the following paragraph (l) immediately after paragraph (k) in such Section 9.6:

(l) any sale, conveyance, transfer or other disposition of Receivables and Receivables Related Security in connection with any Permitted Factoring Transaction.

(g) Section 9.9(d) of the Credit Agreement is hereby amended and restated in its entirety as follows:

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(d) the Company may effect one or more Qualified Stock Repurchases if (i) no Default or Event of Default has occurred or would occur after giving effect thereto, (ii) the Company shall be in compliance with the financial covenants set forth in Section 9.1 in each case calculated on a pro-forma basis as of the last day of the fiscal quarter ending immediately preceding the date of such Qualified Stock Repurchase for which the relevant financial information has been delivered to the Lenders pursuant to Section 8.1 or 8.2, as applicable, giving effect to such Qualified Stock Repurchase as if it had been made on the first day of the Measurement Period ending on the last day of such fiscal quarter, and (iii) if at the time of any Qualified Stock Repurchase the Total Leverage Ratio of the Company and its Restricted Subsidiaries equals or exceeds 3.00 to 1.00 (calculated on a pro forma basis as of the last day of the fiscal quarter ending immediately preceding the date of any such Qualified Stock Repurchase for which the relevant financial information has been delivered to the Lenders pursuant to Section 8.1 or 8.2, as applicable, giving effect to such Qualified Stock Repurchase as if it had been made on the first day of the Measurement Period ending on the last day of such fiscal quarter), then the maximum aggregate consideration for (x) all such Qualified Stock Repurchases made pursuant to this clause (d) and (y) all cash dividends and cash distributions made pursuant to clause (e) of this Section 9.9, that are (1) made by the Company during the period commencing on the Effective Date and ending on September 30, 2016, shall not exceed the sum of $400,000,000 plus the remaining Available Amount, and (2) made by the Company from and after October 1, 2016, shall not exceed the sum of $475,000,000 plus the remaining Available Amount; and

(h) Section 9.9(e) of the Credit Agreement is hereby amended and restated in its entirety as follows:

(e) the Company may declare and pay cash dividends or cash distributions to any holders of its Equity Interests if (i) no Default or Event of Default has occurred or would occur after giving effect thereto, (ii) the Company shall be in compliance with the financial covenants set forth in Section 9.1 in each case calculated on a pro-forma basis as of the last day of the fiscal quarter ending immediately preceding the date of the payment of such cash dividend or cash distributions for which the relevant financial information has been delivered to the Lenders pursuant to Section 8.1 or 8.2, as applicable, giving effect to such cash dividend or cash distribution as if it had been made on the first day of the Measurement Period ending on the last day of such fiscal quarter, and (iii) if at the time of the payment of any cash dividend or cash distribution the Total Leverage Ratio of the Company and its Restricted Subsidiaries equals or exceeds 3.00 to 1.00 (calculated on a pro forma basis as of the last day of the fiscal quarter ending immediately preceding the date of payment of such cash dividend or cash distribution for which the relevant financial information has been delivered to the Lenders

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pursuant to Section 8.1 or 8.2, as applicable, giving effect to such cash dividend or cash distribution as if it had been made on the first day of the Measurement Period ending on the last day of such fiscal quarter), then the maximum aggregate amount paid or distributed for (x) all such cash dividends and cash distributions made pursuant to this clause (e) and (y) all Qualified Stock Repurchases made pursuant to clause (d) of this Section 9.9, that are (1) made by the Company during the period commencing on the Effective Date and ending on September 30, 2016, shall not exceed the sum of $400,000,000 plus the remaining Available Amount, and (2) made by the Company from and after October 1, 2016, shall not exceed the sum of $475,000,000 plus the remaining Available Amount.

(i) Section 9.10 of the Credit Agreement is hereby amended by replacing the phrase “Section 9.6(c) and (d)” in clause (b) of such Section 9.10 with the phrase “Section 9.6(c), (d) and (l)”.

(j) The following text is inserted as a new Section 12.17 of the Credit Agreement:

12.17Acknowledgement and Consent to Bail-In of EEA Financial Institutions.

Notwithstanding anything to the contrary in any Credit Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any EEA Financial Institution arising under any Credit Document may be subject to the write-down and conversion powers of an EEA Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:

(a)the application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilities arising hereunder which may be payable to it by any party hereto that is an EEA Financial Institution; and

(b)the effects of any Bail-In Action on any such liability, including, if applicable:

(i)a reduction in full or in part or cancellation of any such liability;

(ii)a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial Institution, its parent entity, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Credit Document; or

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(iii)the variation of the terms of such liability in connection with the exercise of the Write-Down and Conversion Powers of any EEA Resolution Authority.

3. REPLACEMENT OF NON-CONSENTING LENDERS; RE-ALLOCATION AMONG LENDERS.

(a) Pursuant to and in compliance with the terms of Section 5.22 of the Credit Agreement (as amended by this Amendment), the Company hereby requires that each Lender that is a Non-Consenting Lender (as defined in the Credit Agreement as so amended) with respect to this Amendment, assign all of its rights and obligations under the Credit Agreement and the Credit Documents, including such Non-Consenting Lender’s Loans and Commitments, to JPMorgan Chase Bank, N.A., an affiliate of J.P. Morgan Securities LLC (the Lead Arranger).

(b) Subject to the satisfaction (or waiver) of the conditions to effectiveness specified in Section 6 hereof, but with effect on and as of the date hereof, and pursuant to Section 5.22 of the Credit Agreement (as amended by this Amendment) and Section 12.6 of the Credit Agreement:

(i) Each (x) Non-Consenting Lender and (y) Consenting Lender that has separately agreed with the Lead Arranger to assign all or a portion of its Loans to JPMorgan Chase Bank, N.A. (each such Lender, an Assignor Lender) hereby assigns all or such portion of its rights and obligations under the Credit Agreement and Credit Documents, including such Assignor Lender’s Loans and Commitments (such rights and obligations, the Assigned Loans) to JPMorgan Chase Bank, N.A.; and

(ii) JPMorgan Chase Bank, N.A. (at the direction of the Lead Arranger) shall assign Assigned Loans to (x) each Additional Lender (as defined below) and (y) each Consenting Lender which has separately agreed with the Lead Arranger to acquire Assigned Loans (each such Lender, an Assignee Lender), in each case in the respective amount, and at such time, as separately agreed between such Assignee Lender and the Lead Arranger, such that, after giving effect to Section 2 of this Amendment on the Second Amendment Effective Date, and the assignments described herein, the amount of Loans and Commitments held by each Assignee Lender shall be the amounts allocated thereto by the Lead Arranger.

Upon the effectiveness of this Section 3(b), this Amendment shall be deemed to be the execution and delivery by (i) the applicable Non-Consenting Lender, (ii) the Company, (iii) the Administrative Agent and (iv) the applicable Additional Lender or Consenting Lender (as applicable), of an Assignment and Acceptance with respect to each assignment effected under this Section 3(b), and the terms and

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conditions of Annex 1 to the Assignment and Acceptance set forth in Exhibit C-1 to the Credit Agreement shall apply to each Assignor Lender and each Assignee Lender as “Assignor” and “Assignee”, respectively, thereunder.

4. REPRICING AMENDMENT

Subject to the satisfaction (or waiver) of the conditions to effectiveness specified in Section 6 hereof, but with effect on and as of the date hereof, the Credit Agreement is hereby amended as follows:

(a) Section 1.1 of the Credit Agreement is hereby amended by deleting clause (a) of the definition of “Applicable Margin” and replacing it with the following clause: “(a) with respect to the Term Loans, 2.00% in the case of ABR Loans and 3.00% in the case of Eurodollar Loans”.

(b) Section 1.1 of the Credit Agreement is hereby amended by inserting the following definition in the appropriate alphabetical order:

Repricing Amendment Effective Date means the date on which the conditions precedent in Section 6 of the Second Amendment are satisfied (or waived).

(c) Section 5.5(b) of the Credit Agreement is hereby amended and restated in its entirety as follows:

(b) If the Company repays, prepays, refinances, substitutes or replaces any Term Loans in connection with a Repricing Transaction, then the Company shall pay to the Administrative Agent for the ratable account of each of the Term Lenders a prepayment premium of 1.00% of the aggregate principal amount of the Term Loans so repaid, prepaid, refinanced, substituted or replaced.  Such amounts shall be due and payable on the date of effectiveness of such Repricing Transaction.  The Company shall be subject to the requirements of this Section 5.5(b) only through the six month anniversary of the Repricing Amendment Effective Date.

5. CONDITIONS TO EFFECTIVENESS FOR CREDIT AGREEMENT AMENDMENTS

The amendments to the Credit Agreement set forth in Section 2 hereof shall become effective, as of the date hereof, upon the satisfaction (or waiver) of each of the following conditions to effectiveness:

(a) Amendment No. 2. The Administrative Agent shall have received this Amendment, duly executed and delivered by the (i) Company, (ii) the Administrative Agent and (iii) Lenders constituting the Required Lenders.

(b) Representations and Warranties. Each of the representations and warranties made by the Company in Section 7 hereof shall, to the extent already

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qualified by materiality, be true and correct in all respects, and, if not so already qualified, be true and correct in all material respects, as of the Second Amendment Effective Date with the same force and effect as if made on and as of the Second Amendment Effective Date (or, if any such representation or warranty is expressly stated to have been made as of a specific date, as of such specific date), and the Administrative Agent shall have received a certificate of a senior officer of the Company to that effect, dated the Second Amendment Effective Date, in a form reasonably acceptable to the Administrative Agent.

6. CONDITIONS TO EFFECTIVENESS FOR REALLOCATION AND REPRICING AMENDMENT

The transactions set forth in Section 3 hereof and the amendment to the Credit Agreement set forth in Section 4 hereof shall be consummated and become effective, as of the date hereof, upon the satisfaction (or waiver) of each of the following conditions to effectiveness:

(a) Amendment No. 2. The Administrative Agent shall have received this Amendment, duly executed and delivered by the (i) Company, (ii) the Administrative Agent, (iii) Lenders constituting the Required Lenders and (iv) each Term Lender (determined after giving effect to the assignments set forth in Section 3 of this Amendment).

(b) Conditions to Replacement of Non-Consenting Lenders and the Assignments. Each of the conditions to the replacement of each Non-Consenting Lender pursuant to Section 5.22 of the Credit Agreement (as amended by this Amendment) shall be satisfied and the Administrative Agent shall have received, for the account of each Assignor Lender, an amount equal to the then-outstanding principal amount (calculated at “par”) plus all accrued but unpaid interest and fees with respect to the Assigned Loans of such Assignor Lender.

(c) Fees.  The Administrative Agent shall have received, for the account of each Consenting Lender that is a Revolving Credit Lender, a consent fee in an amount equal to 0.10% of the aggregate principal amount of Revolving Credit Loans and undrawn Revolving Credit Commitments held by such Lender on the Repricing Amendment Effective Date.  The Administrative Agent (on behalf of itself, and on behalf of the Lenders and the Lead Arranger) shall have received all fees and other amounts due and payable to the Administrative Agent, the Lead Arranger and the Lenders on or prior to the Repricing Amendment Effective Date, including (without duplication of any amounts paid to the Administrative Agent under Section 12.5(a) of the Credit Agreement, or to the Lead Arranger and the Administrative Agent under the terms of that certain Engagement Letter, dated as of May 16, 2016, made by and between the Company and the Lead Arranger) all reasonable

Page 10

out-of-pocket expenses of the Administrative Agent, the Lead Arranger and the Lenders (including the reasonable and documented fees, charges and disbursements of Freshfields Bruckhaus Deringer US LLP, sole counsel to the Administrative Agent and  the Lead Arranger for this Amendment) incurred in connection with the negotiation, preparation, execution and delivery of this Amendment.

(d) Representations and Warranties. Each of the representations and warranties made by the Company in Section 7 hereof shall, to the extent already qualified by materiality, be true and correct in all respects, and, if not so already qualified, be true and correct in all material respects, as of the Repricing Amendment Effective Date with the same force and effect as if made on and as of the Repricing Amendment Effective Date (or, if any such representation or warranty is expressly stated to have been made as of a specific date, as of such specific date), and the Administrative Agent shall have received a certificate of a senior officer of the Company to that effect, dated the Repricing Amendment Effective Date, in a form reasonably acceptable to the Administrative Agent.

7. REPRESENTATIONS AND WARRANTIES

The Company represents and warrants to the Lenders and the Administrative Agent as of the date hereof that:

(a) this Amendment has been duly and validly executed and delivered by the Company and constitutes the Company's legal, valid and binding obligation, enforceable against the Company in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting creditors’ rights generally and by general principles of general equity (regardless of whether enforcement is sought in a proceeding in equity or at law); and

(b) after giving effect to this Amendment, (i) no Default shall have occurred and be continuing and (ii) the representations and warranties made by the Company in Section 6 of the Credit Agreement are true and correct on and as of the date hereof with the same force and effect as if made on and as of such date (or, if any such representation or warranty is expressly stated to have been made as of a specific date, as of such specific date).

It shall be an Event of Default for all purposes of the Credit Agreement, as amended hereby, if any representation, warranty or certification made by the Company in this Amendment shall prove to have been false or misleading as of the time made or furnished in any material respect.

8. ADDITIONAL LENDERS

Page 11

Each Lender party hereto which is not a Lender under the Credit Agreement prior to giving effect to this Amendment (each, an Additional Lender) (i) confirms that it has received a copy of the Credit Agreement and the other Credit Documents, together with copies of the financial statements referred to therein and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Amendment; (ii) agrees that it will, independently and without reliance upon the Lead Arranger, the Administrative Agent, or any other Lender or Agent and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Credit Agreement; (iii) appoints and authorizes the Administrative Agent to take such action as agent on its behalf and to exercise such powers under the Credit Agreement and the other Credit Documents as are delegated to the Administrative Agent by the terms thereof, together with such powers as are reasonably incidental thereto; and (iv) agrees that it has complied with Section 12.6 of the Credit Agreement and, on the Repricing Amendment Effective Date, has become a “Lender” under, and for all purposes of, the Credit Agreement and the other Credit Documents, and shall be subject to and bound by the terms thereof, and shall perform all the obligations of and shall have all rights of a Lender thereunder.

9. DOCUMENTS OTHERWISE UNCHANGED

Except as herein provided, the Credit Agreement shall remain unchanged and in full force and effect, and each reference to the Credit Agreement and words of similar import in the Credit Agreement, as amended by this Amendment, and in the Notes, any other Credit Documents and any other documents to which the Company is a party shall be a reference to the Credit Agreement as amended by this Amendment and as the same may be further amended, supplemented and otherwise modified and in effect from time to time.

10. COUNTERPARTS

This Amendment may be executed and delivered in counterparts (including by facsimile or any other electronic transmission), each of which shall be identical and all of which, when taken together, shall constitute one and the same instrument, and any of the parties hereto may execute this Amendment by signing any such counterpart.

11. BINDING EFFECT

This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.

12. GOVERNING LAW

This Amendment shall be construed in accordance with, and this Amendment and all matters arising out of or relating in any way whatsoever to this Amendment (whether in contract, tort or otherwise) shall be governed by, the internal laws of the State of New York.

Page 12

13. SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL.

(a) EACH PARTY TO THIS AMENDMENT HEREBY IRREVOCABLY AND UNCONDITIONALLY:

(i) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AMENDMENT, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE EXCLUSIVE GENERAL JURISDICTION OF THE SUPREME COURT OF THE STATE OF NEW YORK SITTING IN THE BOROUGH OF MANHATTAN, THE COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF; and

(ii) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS, AND WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME.

(b) EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AMENDMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AMENDMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 13(b).

[SIGNATURE PAGE FOLLOWS]

Page 13

IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 2 to be duly executed as of the day and year first above written.

B/E AEROSPACE, INC.

By:     /s/ Joseph T. Lower              

Name:  Joseph T. Lower

Title:  Vice President and Chief Financial Officer

[SIGNATURE PAGE TO AMENDMENT NO. 2]

JPMORGAN CHASE BANK, N.A.,
as Administrative Agent

By:     /s/ Gene Riego De Dios        

Name:  Gene Riego De Dios

Title:  Vice President

[SIGNATURE PAGE TO AMENDMENT NO. 2]

Lender Signature Pages are on file with the Administrative Agent

[SIGNATURE PAGE TO AMENDMENT NO. 2]

EX-31.1

B/E AEROSPACE, INC.

EXHIBIT 31.1

CERTIFICATIONS

I, Werner Lieberherr, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of B/E Aerospace, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: July 29, 2016	By:	/s/ Werner Lieberherr
		Werner Lieberherr
		President and Chief Executive Officer

EX-31.2

B/E AEROSPACE, INC.

EXHIBIT 31.2

CERTIFICATIONS

I, Joseph T. Lower, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of B/E Aerospace, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report, based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. 

Date:  July 29, 2016	By:	/s/ Joseph T. Lower
		Joseph T. Lower
		Vice President and Chief Financial Officer

EX-32.1

B/E AEROSPACE, INC.

EXHIBIT 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of B/E Aerospace, Inc. (the “Company”) on Form 10-Q for the quarter ended June 30, 2016, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Werner Lieberherr, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: July 29, 2016	By:	/s/ Werner Lieberherr
		Werner Lieberherr
		President and Chief Executive Officer

EX-32.2

B/E AEROSPACE, INC.

EXHIBIT 32.2

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of B/E Aerospace, Inc. (the “Company”) on Form 10-Q for the quarter ended June 30, 2016, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Joseph T. Lower, Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: July 29, 2016	By:	/s/ Joseph T. Lower
		Joseph T. Lower
		Vice President and Chief Financial Officer

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2016	Jul. 26, 2016
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q2
Entity Current Reporting Status	Yes
Entity Registrant Name	B/E AEROSPACE INC
Entity Central Index Key	0000861361
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Entity Common Stock, Shares Outstanding		101,625,079

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents	$ 100.2	$ 154.1
Accounts receivable	420.6	354.6
Inventories	1,198.1	1,091.9
Other current assets	57.7	57.8
Total current assets	1,776.6	1,658.4
Property and equipment, net of accumulated depreciation ($340.9 at June 30, 2016 and $320.0 at December 31, 2015)	387.5	391.2
Goodwill	813.3	813.2
Identifiable intangible assets	224.2	231.3
Other assets	50.5	46.8
Total assets	3,252.1	3,140.9
Current liabilities:
Accounts payable	314.0	300.5
Accrued liabilities	539.3	521.7
Total current liabilities	853.3	822.2
Long-term debt	2,044.6	2,034.1
Deferred income taxes	96.4	92.7
Other non-current liabilities	139.1	136.4
Stockholders' equity:
Preferred stock, $0.01 par value; 1.0 shares authorized; no shares outstanding	(260.5)	(183.9)
Common stock, $0.01 par value; 200.0 shares authorized, 107.6 shares issued as of June 30, 2016 and 107.4 shares issued as of December 31, 2015	(828.4)	(847.8)
Additional paid-in capital	1.1	1.1
Retained earnings	1,357.4	1,232.9
Accumulated other comprehensive loss	(150.9)	(146.8)
Total stockholders' equity	118.7	55.5
Total liabilities and equity	$ 3,252.1	$ 3,140.9

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - USD ($) shares in Millions, $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Statement Of Financial Position [Abstract]
Property and equipment, accumulated depreciation	$ 340.9	$ 320.0
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	1.0	1.0
Preferred stock, shares outstanding	0.0	0.0
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	200.0	200.0
Common stock, shares issued	107.6	107.4
Treasury stock	6.0	4.2

XML

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME - USD ($) shares in Millions, $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Income Statement [Abstract]
Revenues	$ 753.1	$ 700.6	$ 1,469.8	$ 1,390.6
Cost of sales	447.8	420.1	884.4	821.7
Selling, general and administrative	87.9	86.2	171.7	173.3
Research, development and engineering	80.8	67.0	147.7	142.6
Operating earnings	$ 136.6	$ 127.3	$ 266.0	$ 253.0
Operating earnings, as a percentage of revenues	18.10%	18.20%	18.10%	18.20%
Interest expense, net	$ 22.7	$ 24.1	$ 45.8	$ 48.4
Earnings before income taxes	113.9	103.2	220.2	204.6
Income tax expense	29.1	24.3	52.8	48.1
Net earnings	84.8	78.9	167.4	156.5
Other comprehensive (loss) income:
Foreign currency translation adjust and other	(19.5)	27.3	(4.1)	(23.3)
Comprehensive income	$ 65.3	$ 106.2	$ 163.3	$ 133.2
Net earnings per common share:
Basic net earnings per share (in dollars per share)	$ 0.85	$ 0.76	$ 1.66	$ 1.50
Diluted net earnings per share (in dollars per share)	0.84	0.75	1.66	1.49
Dividends declared per share (in dollars per share)	$ 0.21	$ 0.19	$ 0.42	$ 0.38
Weighted average common shares:
Weighted average common shares - basic	100.2	104.5	100.7	104.5
Weighted average common shares - diluted	100.7	105.0	101.1	105.0

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings	$ 167.4	$ 156.5
Adjustments to reconcile net earnings to net cash flows provided by operating activities, net of effects from acquisitions:
Depreciation and amortization	42.2	41.3
Deferred income taxes	2.6	5.5
Non-cash compensation	16.7	14.3
Provision for doubtful accounts	0.9	0.2
(Gain)/Loss on disposal of property and equipment	1.0	0.2
Tax benefits realized from prior exercises of restricted stock	(0.4)	(2.4)
Changes in operating assets and liabilities:
Accounts receivable	(73.4)	(95.6)
Inventories	(118.0)	(107.1)
Other current and non-current assets	(2.9)	62.3
Accounts payable and accrued liabilities	58.0	34.7
Net cash flows provided by operating activities	94.1	109.9
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures	(36.1)	(48.0)
Acquisitions, net of cash acquired		4.3
Other	(1.0)	(5.1)
Net cash flows used in investing activities	(37.1)	(48.8)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from common stock issued	2.5	3.1
Purchase of treasury stock, including share repurhases	(76.6)	(0.4)
Tax benefits realized from prior exercises of restricted stock	0.4	2.4
Borrowings on line of credit	160.0
Repayments on line of credit	(150.0)
Principal payments on long-term debt		(11.0)
Dividends	(42.2)	(19.9)
Net cash flows (used in) provided by financing activities	(105.9)	(25.8)
Effect of foreign exchange rate changes on cash and cash equivalents	(5.0)	(1.5)
Net (decrease) increase in cash and cash equivalents	(53.9)	33.8
Cash and cash equivalents, beginning of year	154.1	292.5
Cash and cash equivalents, end of year	100.2	326.3
Cash paid (refunded) during period for:
Interest	44.7	37.4
Income taxes, net of $14.2 payments in 2015	31.2	(30.0)
Supplemental schedule of non-cash activities:
Accrued property additions	$ 2.8	$ 5.5

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Parenthetical) $ in Millions	12 Months Ended
	Dec. 31, 2015 USD ($)
Supplemental disclosures of cash flow information:
Income taxes payments	$ 14.2

XML

Basis of Presentation

6 Months Ended

Jun. 30, 2016

Accounting Policies [Abstract]

Basis of Presentation

Note 1.Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. All adjustments which, in the opinion of management, are considered necessary for a fair presentation of the results of operations for the periods shown are of a normal recurring nature and have been reflected in the condensed consolidated financial statements. The results of operations for the periods presented are not necessarily indicative of the results expected for the full fiscal year or for any future period. The information included in these condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and accompanying notes included in the B/E Aerospace, Inc. (the “Company”) Annual Report on Form 10-K for the fiscal year ended December 31, 2015.

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 and related disclosures. Actual results could differ from those estimates.

XML

Recent Accounting Pronouncements

6 Months Ended

Jun. 30, 2016

Accounting Changes And Error Corrections [Abstract]

Recent Accounting Pronouncements

Note 2.Recent Accounting Pronouncements

In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-09, Improvements to Employee Share-Based Payment Accounting, which amends ASC Topic 718, Compensation – Stock Compensation. The ASU includes multiple provisions intended to simplify various aspects of the accounting for share-based payments. Earlier adoption is permitted. The ASU is effective for annual periods beginning after December 15, 2016, and interim periods within those years.The Company is currently evaluating the effect of this update on our consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, Leases (“ASU 2016-02”), which supersedes ASC Topic 840, Leases, and creates a new topic, ASC Topic 842, Leases. This update is effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. Earlier adoption is permitted. ASU 2016-02 requires lessees to recognize a lease liability and a lease asset for all leases, including operating leases, with a term greater than 12 months on its balance sheet. The update also expands the required quantitative and qualitative disclosures surrounding leases. ASU 2016-02 will be applied using a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The Company is currently evaluating the effect of this update on our consolidated financial statements.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, which updated the guidance in ASC Topic 606, Revenue Recognition. The new standard was originally effective for reporting periods beginning after December 15, 2016 and early adoption was not permitted. In August 2015, the FASB issued ASU 2015-14 which amended the effective date of this ASU to fiscal years beginning after December 15, 2017, and early adoption is permitted only for fiscal years beginning after December 15, 2016. Accordingly, we plan to adopt this ASU on January 1, 2018. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should identify the contract(s) with a customer, identify the performance obligations in the contract(s), determine the transaction price, allocate the transaction price to the performance obligations in the contract(s) and recognize revenue when (or as) the entity satisfies a performance obligation. The two permitted transition methods under the new standard are the full retrospective method, in which case the standard would be applied to each prior reporting period presented, or the modified retrospective method, in which case the cumulative effect of applying the standard would be recognized at the date of initial application. The Company is currently evaluating the impact this guidance will have on its consolidated financial condition, results of operations, cash flows, business processes, systems, internal controls and disclosures and is currently unable to estimate the impact of adopting this guidance.

XML

Inventories

6 Months Ended

Jun. 30, 2016

Inventory Disclosure [Abstract]

Inventories

Note 3.Inventories

Inventories are stated at the lower of cost or market. Cost is determined using FIFO or the weighted average cost method. Finished goods and work-in-process inventories include material, labor and manufacturing overhead costs. In accordance with industry practice, costs in inventory include amounts relating to long-term contracts with long production cycles and inventory items with long procurement cycles, some of which are not expected to be realized within one year. Work-in-process inventories include costs and estimated earnings in excess of billings on uncompleted contracts of $101.6 and $87.7 and capitalized development costs on long-term seller furnished equipment contracts of $488.6 and $438.1 as of June 30, 2016 and December 31, 2015, respectively. Inventories consist of the following:

		June 30,		December 31,
		2016		2015
Purchased materials and component parts	$	340.3	$	322.7
Work-in-process		807.6		722.7
Finished goods		50.2		46.5
	$	1,198.1	$	1,091.9

XML

Goodwill and Intangible Assets

6 Months Ended

Jun. 30, 2016

Goodwill And Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

Note 4.Goodwill and Intangible Assets

The table below sets forth the intangible assets by major asset class, all of which were acquired through business purchase transactions:

				June 30, 2016						December 31, 2015
	Useful Life			Original		Accumulated		Net Book		Original		Accumulated		Net Book
	(Years)			Cost		Amortization		Value		Cost		Amortization		Value
Customer contracts and relationships	13	-	23	$	129.8	$	24.0	$	105.8	$	129.4	$	20.1	$	109.3
Acquired technologies and other	5	-	34		148.3		66.6		81.7		150.0		65.3		84.7
Trade names	5	-	20		28.7		4.9		23.8		29.0		4.0		25.0
Trademarks and patents	3	-	20		25.8		13.9		11.9		27.1		16.3		10.8
Covenants not to compete	3	-	5		2.3		1.3		1.0		2.5		1.0		1.5
				$	334.9	$	110.7	$	224.2	$	338.0	$	106.7	$	231.3

Amortization expense of intangible assets was $4.5and $4.2 for the three months ended June 30, 2016 and 2015, respectively, and $9.1 and $8.5 for the six months ended June 30, 2016 and 2015, respectively. The Company currently expects to recognize amortization expense of approximately $18in each of the next fivefiscalyears.  The future amortization amounts are estimates. Actual future amortization expense may be different due to future acquisitions, impairments, changes in amortization periods or other factors such as changes in exchange rates for assets acquired outside the United States. The Company expenses costs to renew or extend the term of a recognized intangible asset.  

Goodwill increased $0.1 during the six months ended June 30, 2016 due to foreign currency translations.

XML

Related Party Transactions

6 Months Ended

Jun. 30, 2016

Related Party Transactions [Abstract]

Related Party Transactions

Note 5.  Related Party Transactions

On December 16, 2014, we completed the spin-off of KLX Inc. (“KLX”) by means of the transfer of our Consumables Management Segment to KLX and the subsequent distribution to our stockholders of all the outstanding shares of KLX common stock (the “Spin-Off”). We retained our commercial aircraft and business jet segments.

We entered into transitional services agreements with KLX prior to the Spin-Off pursuant to which we and KLX are providing various services to each other on an interim transitional basis. Transition services may be provided for up to 24 months, and for information technology services, KLX has an option for a one-year extension. This transitional support will enable KLX to establish its stand-alone processes for various activities that were previously provided by us and does not constitute significant continuing support of KLX’s operations.

In addition, we entered into a Tax Sharing and Indemnification Agreement with KLX. Under this agreement, we generally assume liability for all federal and state income taxes for all tax periods ending on or prior to December 31, 2014.

Sales and cost of sales to KLX for the three and six months ended June 30, 2016 and 2015 were immaterial to the consolidated financial statements. There were no material balances due to or due from KLX as of June 30, 2016 or December 31, 2015. Total purchases from KLX were approximately $4.4 for the three months ended June 30, 2016 and 2015, and $10.6 and $9.5 for the six months ended June 30, 2016 and 2015, respectively.

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Long-Term Debt

6 Months Ended

Jun. 30, 2016

Debt Disclosure [Abstract]

Long-Term Debt

Note 6.Long-Term Debt

The Company entered into a credit agreement dated as of December 16, 2014 (as amended, the “Credit Agreement”) governing its senior secured bank credit facilities, consisting of (a) a five-year, $600.0 revolving credit facility (the “Revolving Credit Facility”) and (b) a seven-year, $2,200.0 term loan facility (the “Term Loan Facility”). The most recent amendment to the Credit Agreement on May 27, 2016 decreased the effective borrowing rate, increased the amount available for dividend and share repurchases and provided greater flexibility to securitize assets. Borrowings under the Revolving Credit Facility bear interest at an annual rate equal to the London interbank offered rate (“LIBOR”) plus 200 basis points or prime (as defined therein) plus 100 basis points  (4.5% at June 30, 2016).There was $10.0 outstanding under the Revolving Credit Facility as of June 30, 2016 (no amount outstanding as of December 31, 2015).  Borrowings under the Term Loan Facility bear interest at an annual rate equal to LIBOR plus 300 basis points (LIBOR shall not be less than 75 basis points per annum) or ABR (as defined therein) plus 200 basis points(3.75% at June 30, 2016). 

As of June 30, 2016, long-term debt consisted of $2,064.0 outstanding under the Term Loan Facility and $10.0 outstanding under the Revolving Credit Facility, neither of which were current. On a net basis, after taking into consideration unamortized original issue discount and debt issue costs for the Term Loan Facility, total debt was $2,044.6.  

Letters of credit outstanding under the Revolving Credit Facility aggregated $14.3 at June 30, 2016 ($7.7 at December 31, 2015).

The Revolving Credit Facility contains an interest coverage ratio financial covenant (as defined therein) that must be maintained at a level greater than 3.0 to 1 and a total leverage ratio covenant (as defined therein) which limits gross debt to a 4.5 to 1 multiple of EBITDA (as defined therein). The Credit Agreement is collateralized by substantially all of the Company’s assets and contains customary affirmative covenants, negative covenants, restrictions on the payment of dividends and the repurchase of our stock, and conditions precedent for borrowings, all of which were met as of June 30, 2016.

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Fair Value Measurements

6 Months Ended

Jun. 30, 2016

Fair Value Disclosures [Abstract]

Fair Value Measurements

Note 7.Fair Value Measurements

All short-term financial instruments are generally carried at amounts that approximate estimated fair value. The fair value is the price at which an asset could be exchanged in a current transaction between knowledgeable, willing parties. Assets measured at fair value are categorized based upon the lowest level of significant input to the valuations.

Level 1 – quoted prices in active markets for identical assets and liabilities.

Level 2 – quoted prices for identical assets and liabilities in markets that are not active, or observable inputs other than quoted prices in active markets for identical assets and liabilities.

Level 3 – unobservable inputs in which there is little or no market data available, which require the reporting entity to develop its own assumptions.

The carrying amounts of cash and cash equivalents (which the Company classifies as Level 1 assets), accounts receivable – trade and accounts payable represent their respective fair values due to their short- term nature. The carrying value of the Revolving Credit Facility and Term Loan Facility approximates fair value based upon observable market data (which the Company classifies as Level 2).

The fair value information presented herein is based on pertinent information available to management at June 30, 2016 and December 31, 2015, respectively. Although management is not aware of any factors that would significantly affect the estimated fair value amounts, such amounts have not been comprehensively revalued for purposes of these condensed consolidated financial statements since those dates, and current estimates of fair value may differ significantly from the amounts presented herein.

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Commitments, Contingencies and Off-Balance Sheet Arrangements

6 Months Ended

Jun. 30, 2016

Commitments And Contingencies Disclosure [Abstract]

Commitments, Contingencies and Off-Balance Sheet Arrangements

Note 8.Commitments, Contingencies and Off-Balance Sheet Arrangements

Lease Commitments – The Company finances its use of certain facilities and equipment under committed lease arrangements provided by various institutions. Since the terms of these arrangements meet the accounting definition of operating lease arrangements, the aggregate sum of future minimum lease payments is not reflected on the condensed consolidated balance sheets. At June 30, 2016, future minimum lease payments under these arrangements approximated $178.4, the majority of which related to long-term real estate leases.

Litigation – The Company is a defendant in various legal actions arising in the normal course of business, the outcomes of which, in the opinion of management, neither individually nor in the aggregate, are likely to result in a material adverse effect on the Company’s condensed consolidated financial statements.

Indemnities, Commitments and Guarantees – During its normal course of business, the Company has made certain indemnities, commitments and guarantees under which it may be required to make payments in relation to certain transactions. These indemnities include non-infringement of patents and intellectual property indemnities to the Company’s customers in connection with the design, manufacture, sale and delivery of its products, indemnities to various lessors in connection with facility leases for certain claims arising from such facility or lease, and indemnities to other parties to certain acquisition agreements. The duration of these indemnities, commitments and guarantees varies, and in certain cases is indefinite. Many of these indemnities, commitments and guarantees provide for limitations on the maximum potential future payments the Company could be obligated to make. However, the Company is unable to estimate the maximum amount of liability related to its indemnities, commitments and guarantees because such liabilities are contingent upon the occurrence of events that are not reasonably determinable. Management believes that any liability for these indemnities, commitments and guarantees would not be material to the accompanying condensed consolidated financial statements. Accordingly, no significant amounts have been accrued for indemnities, commitments and guarantees.

Product Warranty Costs – Estimated costs related to product warranties are accrued at the time products are sold. In estimating its future warranty obligations, the Company considers various relevant factors, including the Company’s stated warranty policies and practices, the historical frequency of claims and the cost to replace or repair its products under warranty.

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Accounting for Stock-Based Compensation

6 Months Ended

Jun. 30, 2016

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Accounting for Stock-Based Compensation

Note 9.Accounting for Stock-Based Compensation

The Company has a Long-Term Incentive Plan (“LTIP”) under which the Company’s Compensation Committee has the authority to grant stock options, stock appreciation rights, restricted stock, restricted stock units or other forms of equity-based or equity-related awards.

Compensation cost generally is recognized on a straight-line basis over the vesting period of the shares. Share-based compensation of $8.2and $7.2 was recognized during the three months ended June 30, 2016 and 2015, respectively, and $16.1 and $13.5was recognized during the six months ended June 30, 2016 and 2015, respectively, related to the equity grants made pursuant to the LTIP. Unrecognized compensation expense related to equity grants, including the estimated impact of any future forfeitures, was $63.2 at June 30, 2016.

The Company has established a qualified Employee Stock Purchase Plan which allows qualified employees (as defined therein) to purchase shares of the Company’s common stock at a price equal to 85% of the closing price at the end of each semi-annual stock purchase period. Compensation cost for this plan was not material to any of the periods presented.

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Segment Reporting

6 Months Ended

Jun. 30, 2016

Segment Reporting [Abstract]

Segment Reporting

Note 10.  Segment Reporting

The Company is organized based on the products and services it offers. The Company’s reportable segments, which are also its operating segments, are comprised of commercial aircraft and business jet. Each segment regularly reports its results of operations and makes requests for capital expenditures and acquisition funding to the Company’s chief operational decision-making group. This group is comprised of the Executive Chairman of the Board of Directors, the President and Chief Executive Officer and the Vice President and Chief Financial Officer. Each operating segment has separate management teams and infrastructures dedicated to providing a full range of products and services to their commercial, business jet, military, maintenance, repair and overhaul providers, aircraft leasing and aircraft manufacturing customers. The Company has not included product line information due to the similarity of commercial aircraft segment product offerings.

The following table presents revenues and operating earnings by reportable segment:

	Three months ended				Six months ended
	June 30,				June 30,
	2016		2015		2016		2015
Revenues:
Commercial aircraft	$	610.8	$	539.3	$	1,167.8	$	1,065.4
Business jet		142.3		161.3		302.0		325.2
	$	753.1	$	700.6	$	1,469.8	$	1,390.6
Operating earnings(1)
Commercial aircraft	$	114.6	$	99.7	$	219.3	$	198.1
Business jet		22.0		27.6		46.7		54.9
Operating earnings		136.6		127.3		266.0		253.0
Interest expense, net		22.7		24.1		45.8		48.4
Earnings before income taxes	$	113.9	$	103.2	$	220.2	$	204.6

(1) Operating earnings includes an allocation of corporate IT costs, employee benefits and general and administrative costs based on the proportion of each segment’s systems users, number of employees and sales, respectively.

The following table presents capital expenditures(1) by reportable segment:

	Three months ended				Six months ended
	June 30,				June 30,
	2016		2015		2016		2015
Commercial aircraft	$	14.3	$	13.3	$	29.4	$	36.5
Business jet		4.2		9.4		6.7		11.5
	$	18.5	$	22.7	$	36.1	$	48.0

(1) Corporate capital expenditures have been allocated to the above segments in a manner consistent with our corporate expense allocations.

The following table presents goodwill and total assets(1) by reportable segment:

	June 30, 2016						December 31, 2015
	Commercial		Business				Commercial		Business
	Aircraft		Jet		Consolidated		Aircraft		Jet		Consolidated
Goodwill	$	372.3	$	441.0	$	813.3	$	372.6	$	440.6	$	813.2
Total assets		2,251.9		1,000.2		3,252.1		2,120.5		1,020.4		3,140.9

(1) Corporate assets (including cash and cash equivalents) of $275.5 and $322.2 at June 30, 2016 and December 31, 2015, respectively, have been allocated to the above segments in a manner consistent with our corporate expense allocations. 

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Net Earnings Per Common Share

6 Months Ended

Jun. 30, 2016

Earnings Per Share [Abstract]

Net Earnings Per Common Share

Note 11.  Net Earnings Per Common Share

Basic net earnings per common share is computed using the weighted average common shares outstanding during the period. Diluted net earnings per common share is computed by using the weighted average common shares outstanding including the dilutive effect of shares issued under the Employee Stock Purchase Plan and restricted shares based on an average share price during the period. For the three months ended June 30, 2016 and 2015, approximately 0.5 and 0.4 shares, respectively, and for the six months ended June 30, 2016 and 2015, approximately 0.4 and 0.6 shares, respectively, of the Company’s common stock were excluded from the determination of diluted earnings per common share because their effect would have been anti-dilutive.

The computations of basic and diluted earnings per share for the three and six months ended June 30, 2016 and 2015, respectively, are as follows:

	Three months ended				Six months ended
	June 30,				June 30,
	2016		2015		2016		2015
Net earnings	$	84.8	$	78.9	$	167.4	$	156.5
Basic weighted average common shares		100.2		104.5		100.7		104.5
Effect of restricted shares issued		0.5		0.5		0.4		0.5
Diluted weighted average common shares		100.7		105.0		101.1		105.0
Basic net earnings per common share	$	0.85	$	0.76	$	1.66	$	1.50
Diluted net earnings per common share	$	0.84	$	0.75	$	1.66	$	1.49

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Accounting for Uncertainty in Income Taxes

6 Months Ended

Jun. 30, 2016

Income Tax Disclosure [Abstract]

Accounting for Uncertainty in Income Taxes

Note 12.  Accounting for Uncertainty in Income Taxes

In accordance with ASC Topic 740, Income Taxes, the Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. As of June 30, 2016 and December 31, 2015, the Company had $90.4 and $89.0, respectively, of net unrecognized tax benefits. This liability, if recognized, would affect the Company’s effective tax rate. The Company is currently undergoing a U.S. federal income tax examination for the year 2013. The Company is currently open to audit by the tax authorities for the nine tax years ended December 31, 2015.

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Restructuring and Other Charges

6 Months Ended

Jun. 30, 2016

Restructuring and Other Charges

Restructuring and Other Charges

Note 13.  Restructuring and Other Charges

During 2015, the Company recognized charges totaling $49.0 in connection with its cost reduction program. The charges reflect costs associated with facilities consolidation, product rationalization, workforce reductions and program discontinuance. The charges are included in the amounts and descriptions below, as appropriate.  The Company expects the cost reduction initiatives to offset inflationary pressures on wages, occupancy and infrastructure costs. The majority of the activities related to the cost reduction program are expected to be completed by the end of 2016 and future charges are not expected to be material. No additional restructuring charges were incurred during the six months ended June 30, 2016.

The following table presents the liability balance and activity related to restructuring and other charges:

			Disposals
		Balance at	andOther				Balanceat
		December 31, 2015	NoncashCharges		Cash Paid		June 30, 2016
Facility Consolidations	$	9.2	$	(0.5)	$	(3.1)	$	5.6
Employee Severance		2.2		(0.5)		(0.6)		1.1
	$	11.4	$	(1.0)	$	(3.7)	$	6.7

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Inventories (Tables)

6 Months Ended

Jun. 30, 2016

Inventory Disclosure [Abstract]

Inventories

		June 30,		December 31,
		2016		2015
Purchased materials and component parts	$	340.3	$	322.7
Work-in-process		807.6		722.7
Finished goods		50.2		46.5
	$	1,198.1	$	1,091.9

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Goodwill and Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2016

Goodwill And Intangible Assets Disclosure [Abstract]

Intangible Assets by Major Asset Class

				June 30, 2016						December 31, 2015
	Useful Life			Original		Accumulated		Net Book		Original		Accumulated		Net Book
	(Years)			Cost		Amortization		Value		Cost		Amortization		Value
Customer contracts and relationships	13	-	23	$	129.8	$	24.0	$	105.8	$	129.4	$	20.1	$	109.3
Acquired technologies and other	5	-	34		148.3		66.6		81.7		150.0		65.3		84.7
Trade names	5	-	20		28.7		4.9		23.8		29.0		4.0		25.0
Trademarks and patents	3	-	20		25.8		13.9		11.9		27.1		16.3		10.8
Covenants not to compete	3	-	5		2.3		1.3		1.0		2.5		1.0		1.5
				$	334.9	$	110.7	$	224.2	$	338.0	$	106.7	$	231.3

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Segment Reporting (Tables)

6 Months Ended

Jun. 30, 2016

Segment Reporting [Abstract]

Revenues and Operating Earnings by Reportable Segment

	Three months ended				Six months ended
	June 30,				June 30,
	2016		2015		2016		2015
Revenues:
Commercial aircraft	$	610.8	$	539.3	$	1,167.8	$	1,065.4
Business jet		142.3		161.3		302.0		325.2
	$	753.1	$	700.6	$	1,469.8	$	1,390.6
Operating earnings(1)
Commercial aircraft	$	114.6	$	99.7	$	219.3	$	198.1
Business jet		22.0		27.6		46.7		54.9
Operating earnings		136.6		127.3		266.0		253.0
Interest expense, net		22.7		24.1		45.8		48.4
Earnings before income taxes	$	113.9	$	103.2	$	220.2	$	204.6

Capital Expenditures by Reportable Segment

	Three months ended				Six months ended
	June 30,				June 30,
	2016		2015		2016		2015
Commercial aircraft	$	14.3	$	13.3	$	29.4	$	36.5
Business jet		4.2		9.4		6.7		11.5
	$	18.5	$	22.7	$	36.1	$	48.0

Goodwill And Total Assets By Reportable Segment

	June 30, 2016						December 31, 2015
	Commercial		Business				Commercial		Business
	Aircraft		Jet		Consolidated		Aircraft		Jet		Consolidated
Goodwill	$	372.3	$	441.0	$	813.3	$	372.6	$	440.6	$	813.2
Total assets		2,251.9		1,000.2		3,252.1		2,120.5		1,020.4		3,140.9

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Net Earnings Per Common Share (Tables)

6 Months Ended

Jun. 30, 2016

Earnings Per Share [Abstract]

Computations of Basic and Diluted Earnings Per Share

	Three months ended				Six months ended
	June 30,				June 30,
	2016		2015		2016		2015
Net earnings	$	84.8	$	78.9	$	167.4	$	156.5
Basic weighted average common shares		100.2		104.5		100.7		104.5
Effect of restricted shares issued		0.5		0.5		0.4		0.5
Diluted weighted average common shares		100.7		105.0		101.1		105.0
Basic net earnings per common share	$	0.85	$	0.76	$	1.66	$	1.50
Diluted net earnings per common share	$	0.84	$	0.75	$	1.66	$	1.49

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Restructuring and Other Charges (Tables)

6 Months Ended

Jun. 30, 2016

Restructuring and Other Charges

The summary of liability balance and activity related to restructuring and other charges

			Disposals
		Balance at	andOther				Balanceat
		December 31, 2015	NoncashCharges		Cash Paid		June 30, 2016
Facility Consolidations	$	9.2	$	(0.5)	$	(3.1)	$	5.6
Employee Severance		2.2		(0.5)		(0.6)		1.1
	$	11.4	$	(1.0)	$	(3.7)	$	6.7

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Inventories - Costs (Details) - Work-in-process inventories - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Inventory [Line Items]
Costs and estimated earnings in excess of billings on uncompleted contracts	$ 101.6	$ 87.7
Excess over average costs on long-term contracts	$ 488.6	$ 438.1

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Inventories - Components of Inventory (Details) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Inventory Disclosure [Abstract]
Purchased materials and component parts	$ 340.3	$ 322.7
Work-in-process	807.6	722.7
Finished goods	50.2	46.5
Inventories	$ 1,198.1	$ 1,091.9

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Goodwill and Intangible Assets - By Major Asset Class (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Goodwill and Intangible Assets Disclosure [Line Items]
Original Cost	$ 334.9	$ 338.0
Accumulated Amortization	110.7	106.7
Net Book Value	224.2	231.3
Customer contracts and relationships
Goodwill and Intangible Assets Disclosure [Line Items]
Original Cost	129.8	129.4
Accumulated Amortization	24.0	20.1
Net Book Value	$ 105.8	109.3
Customer contracts and relationships | Minimum
Goodwill and Intangible Assets Disclosure [Line Items]
Useful Life (years)	13 years
Customer contracts and relationships | Maximum
Goodwill and Intangible Assets Disclosure [Line Items]
Useful Life (years)	23 years
Acquired technologies and other
Goodwill and Intangible Assets Disclosure [Line Items]
Original Cost	$ 148.3	150.0
Accumulated Amortization	66.6	65.3
Net Book Value	$ 81.7	84.7
Acquired technologies and other | Minimum
Goodwill and Intangible Assets Disclosure [Line Items]
Useful Life (years)	5 years
Acquired technologies and other | Maximum
Goodwill and Intangible Assets Disclosure [Line Items]
Useful Life (years)	34 years
Trade names
Goodwill and Intangible Assets Disclosure [Line Items]
Original Cost	$ 28.7	29.0
Accumulated Amortization	4.9	4.0
Net Book Value	$ 23.8	25.0
Trade names | Minimum
Goodwill and Intangible Assets Disclosure [Line Items]
Useful Life (years)	5 years
Trade names | Maximum
Goodwill and Intangible Assets Disclosure [Line Items]
Useful Life (years)	20 years
Trademarks and patents
Goodwill and Intangible Assets Disclosure [Line Items]
Original Cost	$ 25.8	27.1
Accumulated Amortization	13.9	16.3
Net Book Value	$ 11.9	10.8
Trademarks and patents | Minimum
Goodwill and Intangible Assets Disclosure [Line Items]
Useful Life (years)	3 years
Trademarks and patents | Maximum
Goodwill and Intangible Assets Disclosure [Line Items]
Useful Life (years)	20 years
Covenants not to compete
Goodwill and Intangible Assets Disclosure [Line Items]
Original Cost	$ 2.3	2.5
Accumulated Amortization	1.3	1.0
Net Book Value	$ 1.0	$ 1.5
Covenants not to compete | Minimum
Goodwill and Intangible Assets Disclosure [Line Items]
Useful Life (years)	3 years
Covenants not to compete | Maximum
Goodwill and Intangible Assets Disclosure [Line Items]
Useful Life (years)	5 years

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Goodwill and Intangible Assets - Amortization Expense (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Goodwill And Intangible Assets Disclosure [Abstract]
Amortization expense on identifiable intangible assets	$ 4.5	$ 4.2	$ 9.1	$ 8.5
Expected amortization expenses in year one	18.0		18.0
Expected amortization expenses in year two	18.0		18.0
Expected amortization expenses in year three	18.0		18.0
Expected amortization expenses in year four	18.0		18.0
Expected amortization expenses in year five	$ 18.0		18.0
Goodwill increase during period			$ 0.1

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Related Party Transactions (Details) - KLX Inc [Member] - USD ($) $ in Millions		3 Months Ended		6 Months Ended
	Dec. 16, 2014	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Related Party Transaction [Line Items]
Term of transition services maximum	24 months
Information technology services extension option term	1 year
Purchases from related party		$ 4.4	$ 4.4	$ 10.6	$ 9.5

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Long-Term Debt - Components (Details) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Debt Instrument [Line Items]
Long-term debt	$ 2,044.6
Long-term debt, net of current maturities	2,044.6	$ 2,034.1
Term Loan Facility
Debt Instrument [Line Items]
Outstanding long-term debt	$ 2,064.0

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Long-Term Debt - Credit Agreement (Details) - USD ($) $ in Millions		6 Months Ended
	Dec. 16, 2014	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Debt Instrument [Line Items]
Principal payments on long-term debt			$ 11.0
Outstanding letter of credit amount		$ 14.3		$ 7.7
London Interbank Offered Rate (LIBOR) | Minimum
Debt Instrument [Line Items]
Debt, interest rate	0.75%
Revolving Credit Facility
Debt Instrument [Line Items]
Debt instrument term	5 years
Revolving credit facility	$ 600.0
Amount outstanding		$ 10.0		$ 0.0
Revolving credit facility agreement	Borrowings under the Revolving Credit Facility bear interest at an annual rate equal to the London interbank offered rate ("LIBOR") plus 200 basis points or prime (as defined therein) plus 100 basis points
Revolving Credit Facility | London Interbank Offered Rate (LIBOR)
Debt Instrument [Line Items]
Basis spread percentage	2.00%
Revolving Credit Facility | Prime Rate
Debt Instrument [Line Items]
Basis spread percentage	1.00%
Debt, interest rate		4.50%
Term Loan Facility
Debt Instrument [Line Items]
Debt instrument term	7 years
Revolving credit facility agreement		Borrowings under the Term Loan Facility bear interest at an annual rate equal to LIBOR plus 300 basis points (LIBOR shall not be less than 75 basis points per annum) or ABR (as defined therein) plus 200 basis points
Aggregate principal amount	$ 2,200.0
Term Loan Facility | London Interbank Offered Rate (LIBOR)
Debt Instrument [Line Items]
Basis spread percentage	3.00%
Term Loan Facility | Prime Rate
Debt Instrument [Line Items]
Basis spread percentage	2.00%
Debt, interest rate		3.75%
Covenant Requirement | Minimum
Debt Instrument [Line Items]
Interest coverage ratio		300.00%
Covenant Requirement | Maximum
Debt Instrument [Line Items]
Total leverage ratio		450.00%

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Commitments, Contingencies and Off-Balance Arrangements - Lease Litigation Employment (Details) $ in Millions	Jun. 30, 2016 USD ($)
Commitments And Contingencies Disclosure [Abstract]
Total	$ 178.4

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Accounting for Stock-Based Compensation (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of discounted closing price for Employee Stock Purchase Plan			85.00%
Long Term Incentive Plans
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share based compensation	$ 8.2	$ 7.2	$ 16.1	$ 13.5
Unrecognized compensation cost	$ 63.2		$ 63.2

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Segment Reporting - Revenues and Operating Earnings by Reportable Segment (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Segment Reporting, Revenue Reconciling Item [Line Items]
Revenues	$ 753.1	$ 700.6	$ 1,469.8	$ 1,390.6
Operating earnings	136.6	127.3	266.0	253.0
Interest expense, net	22.7	24.1	45.8	48.4
Earnings before income taxes	113.9	103.2	220.2	204.6
Commercial Aircraft
Segment Reporting, Revenue Reconciling Item [Line Items]
Revenues	610.8	539.3	1,167.8	1,065.4
Operating earnings	114.6	99.7	219.3	198.1
Business Jet
Segment Reporting, Revenue Reconciling Item [Line Items]
Revenues	142.3	161.3	302.0	325.2
Operating earnings	$ 22.0	$ 27.6	$ 46.7	$ 54.9

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Segment Reporting - Capital Expenditures by Reportable Segment (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Property, Plant and Equipment [Line Items]
Capital expenditures	$ 18.5	$ 22.7	$ 36.1	$ 48.0
Commercial Aircraft
Property, Plant and Equipment [Line Items]
Capital expenditures	14.3	13.3	29.4	36.5
Business Jet
Property, Plant and Equipment [Line Items]
Capital expenditures	$ 4.2	$ 9.4	$ 6.7	$ 11.5

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Segment Reporting - Goodwill and Total Assets by Reportable Segment (Details) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Goodwill [Line Items]
Goodwill	$ 813.3	$ 813.2
Total assets	3,252.1	3,140.9
Commercial Aircraft
Goodwill [Line Items]
Goodwill	372.3	372.6
Total assets	2,251.9	2,120.5
Business Jet
Goodwill [Line Items]
Goodwill	441.0	440.6
Total assets	$ 1,000.2	$ 1,020.4

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Segment Reporting - Additional Information (Details) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Segment Reporting Information [Line Items]
Total assets	$ 3,252.1	$ 3,140.9
Corporate, Non-Segment
Segment Reporting Information [Line Items]
Total assets	$ 275.5	$ 322.2

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Net Earnings Per Common Share - Additional Information (Details) - shares shares in Millions	3 Months Ended	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2016
Earnings Per Share [Abstract]
Anti-dilutive securities excluded from determination of diluted earnings per common share	0.4	0.5

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Net Earnings Per Common Share - Computations of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Earnings Per Share [Abstract]
Net earnings	$ 84.8	$ 78.9	$ 167.4	$ 156.5
Weighted average common shares - basic	100.2	104.5	100.7	104.5
Effect of restricted shares issued	0.5	0.5	0.4	0.5
Diluted weighted average common shares	100.7	105.0	101.1	105.0
Net earnings per share from continuing operatings - basic (in dollars per share)	$ 0.85	$ 0.76	$ 1.66	$ 1.50
Net earnings per share - basic (in dollars per share)	0.85	0.76	1.66	1.50
Net earnings per share from continuing operations - diluted	0.84	0.75	1.66	1.49
Diluted net earnings per share (in dollars per share)	$ 0.84	$ 0.75	$ 1.66	$ 1.49

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Accounting for Uncertainty in Income Taxes - Additional Information (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Jun. 30, 2016
Income Tax Disclosure [Abstract]
Liability for unrecognized tax benefits that would affect effective tax rate, if recognized	$ 89.0	$ 90.4
Number of tax years the company is currently open to audit by tax authorities	9 years

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Restructuring and Other Charges (Details) - USD ($) $ in Millions	6 Months Ended	12 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Restructuring Cost and Reserve [Line Items]
Restructuring Charges		$ 49.0
Liability balance and activity related charges:
Balance at Beginning of the period	$ 11.4
Disposals and Other Noncash charges	(1.0)
Cash Paid	(3.7)
Balance at End of the period	6.7	11.4
Facility Consolidations
Liability balance and activity related charges:
Balance at Beginning of the period	9.2
Disposals and Other Noncash charges	(0.5)
Cash Paid	(3.1)
Balance at End of the period	5.6	9.2
Other Employee Severance
Liability balance and activity related charges:
Balance at Beginning of the period	2.2
Disposals and Other Noncash charges	(0.5)
Cash Paid	(0.6)
Balance at End of the period	$ 1.1	$ 2.2