UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

FORM 10-Q

(Mark One)

þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 333-112528

Vought Aircraft Industries, Inc.

(Exact name of registrant as specified in its charter)

Delaware		75-2884072
(State of Incorporation)		(I.R.S. Employer Identification Number)
201 East John Carpenter Freeway, Tower 1, Suite 900
Irving, Texas		75062
(Address of Principal executive offices)		(Zip 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 þ No o

          Indicate by checkmark 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 o No o

          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. (Check one):

Large accelerated filer o		Accelerated filer o		Non-accelerated filer   þ (Do not check if a smaller reporting company)		Smaller Reporting Company o

          Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

          The number of shares outstanding of the registrant’s common stock, $0.01 par value per share, at November 10, 2009 was 24,818,806.

 

 

TABLE OF CONTENTS

		Page
PART I — FINANCIAL INFORMATION
Item 1 Interim Unaudited Condensed Consolidated Financial Statements			4
Consolidated Balance Sheets			4
Consolidated Statements of Operations			5
Consolidated Statements of Cash Flows			6
Notes to the Interim Unaudited Condensed Consolidated Financial Statements			7
Item 2 Management’s Discussion And Analysis Of Financial Condition And Results Of Operations			32
Item 3 Quantitative And Qualitative Disclosures About Market Risk			48
Item 4 Controls And Procedures			49
PART II — OTHER INFORMATION
Item 1. Legal Proceedings			50
Item 1A Risk Factors			50
Item 2 Unregistered Sales of Equity Securities and Use of Proceeds			50
Item 3 Defaults Upon Senior Securities			50
Item 4 Submission of Matters to a Vote of Security Holders			50
Item 5 Other Information			50
Item 6 Exhibits			51
Signatures			52
EX-10.1
EX-31.1
EX-32.1
EX-32.1
EX-32.2

Cautionary Statement Regarding Forward Looking Statements

Some of the statements made in this Quarterly Report on Form 10-Q are forward-looking statements. These forward looking statements are based upon our current expectations and projections about future events. When used in this quarterly report, the words “believe,” “anticipate,” “intend,” “estimate,” “expect,” “should,” “may” and similar expressions, or the negative of such words and expressions, are intended to identify forward-looking statements, although not all forward-looking statements contain such words or expressions. The forward-looking statements in this quarterly report are primarily located in the material set forth under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” but are found in other locations as well. These forward-looking statements generally relate to our plans, objectives and expectations for future operations and are based upon management’s current estimates and projections of future results or trends. Although we believe that our plans and objectives reflected in or suggested by these forward-looking statements are reasonable, we may not achieve these plans or objectives. You should read this quarterly report completely and with the understanding that actual future results may be materially different from what we expect. We will not update forward-looking statements even though our situation may change in the future.

Specific factors that might cause actual results to differ from our expectations include, but are not limited to:

	•		global and domestic financial market and economic conditions;
	•		market risks related to the refinancing of our indebtedness;
	•		competition;
	•		operating risks and the amounts and timing of revenues and expenses;
	•		project delays or cancellations;
	•		product liability claims;
	•		global and domestic market or business conditions and fluctuations in demand for our products and services;
	•		the impact of recent and future federal and state regulatory proceedings and changes, including changes in environmental and other laws and regulations to which we are subject, as well as changes in the application of existing laws and regulations;
	•		political, legal, regulatory, governmental, administrative and economic conditions and developments in the United States and internationally;
	•		the effect of and changes in economic conditions in the areas in which we operate;
	•		returns on pension assets and impacts of future discount rate changes on pension obligations;
	•		environmental constraints on operations and environmental liabilities arising out of past or present operations;
	•		current and future litigation;
	•		the direct or indirect impact on our company’s business resulting from terrorist incidents or responses to such incidents, including the effect on the availability of and premiums on insurance; and
	•		weather and other natural phenomena.

PART I — FINANCIAL INFORMATION

ITEM 1.		INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Vought Aircraft Industries, Inc.

		September 27,				December 31,
		2009				2008
Assets
Current assets:
Cash and cash equivalents		$	150.4			$	86.7
Restricted cash			43.7				—
Trade and other receivables			127.1				138.5
Inventories			479.0				311.8
Assets related to discontinued operations			—				460.7
Other current assets			5.6				4.7
Total current assets			805.8				1,002.4
Property, plant and equipment, net			272.8				279.2
Goodwill			404.8				404.8
Identifiable intangible assets, net			22.1				27.2
Debt origination costs, net and other assets			6.2				14.0
Total assets		$	1,511.7			$	1,727.6
Liabilities and stockholders’ equity (deficit)
Current liabilities:
Accounts payable, trade		$	126.4			$	148.5
Accrued and other liabilities			81.8				57.5
Accrued payroll and employee benefits			46.9				48.1
Accrued post-retirement benefits-current			42.2				42.0
Accrued pension-current			0.6				0.3
Current portion of long-term bank debt			5.9				5.9
Liabilities related to discontinued operations			—				156.7
Accrued contract liabilities			112.4				141.1
Total current liabilities			416.2				600.1
Long-term liabilities:
Accrued post-retirement benefits			368.5				405.3
Accrued pension			658.1				710.7
Long-term bank debt, net of current portion			316.6				594.0
Long-term bond debt			270.0				270.0
Other non-current liabilities			79.0				81.6
Total liabilities			2,108.4				2,661.7
Stockholders’ equity (deficit):
Common stock, par value $.01 per share; 50,000,000 shares authorized, 24,818,806 and 24,798,382 issued and outstanding at September 27, 2009 and December 31, 2008, respectively			0.3				0.3
Additional paid-in capital			422.2				420.5
Shares held in rabbi trust			(1.6	)			(1.6	)
Accumulated deficit			(220.7	)			(501.3	)
Accumulated other comprehensive loss			(796.9	)			(852.0	)
Total stockholders’ equity (deficit)		$	(596.7	)		$	(934.1	)
Total liabilities and stockholders’ equity (deficit)		$	1,511.7			$	1,727.6

See accompanying notes

Vought Aircraft Industries, Inc.

		For the Three Months Ended								For the Nine Months Ended
		September 27,				September 28,				September 27,				September 28,
		2009				2008				2009				2008
Revenue		$	446.7			$	477.3			$	1,322.3			$	1,362.0
Costs and expenses
Cost of sales			376.0				407.1				1,109.5				1,089.1
Selling, general and administrative expenses			30.2				34.9				101.2				126.1
Total costs and expenses			406.2				442.0				1,210.7				1,215.2
Operating income			40.5				35.3				111.6				146.8
Other income (expense)
Interest income			0.2				1.3				0.6				2.3
Other gain (loss)			—				1.6				—				48.7
Equity in loss of joint venture			—				—				—				(0.6	)
Interest expense			(20.6	)			(17.4	)			(44.5	)			(49.6	)
Income before income taxes			20.1				20.8				67.7				147.6
Income tax expense			0.9				0.2				0.9				0.2
Income from continuing operations			19.2				20.6				66.8				147.4
Income (loss) from discontinued operations, net of tax			219.4				(5.0	)			213.8				(23.8	)
Net income		$	238.6			$	15.6			$	280.6			$	123.6

See accompanying notes

Vought Aircraft Industries, Inc.

		Nine Months Ended
		September 27,				September 28,
		2009				2008
Operating activities
Net income		$	280.6			$	123.6
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization			55.7				50.1
Stock compensation expense			1.2				2.2
Equity in losses of joint venture			—				0.6
(Gain) Loss from asset disposals			41.7				(50.1	)
Changes in current assets and liabilities:
Trade and other receivables			1.8				(81.6	)
Inventories			(169.6	)			(32.2	)
Other current assets			(0.9	)			0.4
Accounts payable, trade			(28.4	)			(36.8	)
Accrued payroll and employee benefits			(0.6	)			(0.4	)
Accrued and other liabilities			24.9				(10.0	)
Accrued contract liabilities			(41.3	)			(33.0	)
Other assets and liabilities—long-term			(35.8	)			(79.8	)
Net cash provided by (used in) operating activities			129.3				(147.0	)
Investing activities
Capital expenditures			(28.2	)			(41.7	)
Proceeds from sale of assets			289.2				55.0
Net cash provided by (used in) investing activities			261.0				13.3
Financing activities
Proceeds from short-term bank debt			135.0				153.0
Payments on short-term bank debt			(135.0	)			(153.0	)
Proceeds from long-term bank debt			75.0				184.6
Payments on long-term bank debt			(357.9	)			(2.0	)
Changes in restricted cash			(43.7	)			—
Proceeds from sale of common stock			—				0.1
Net cash provided by (used in) financing activities			(326.6	)			182.7
Net increase (decrease) in cash and cash equivalents			63.7				49.0
Cash and cash equivalents at beginning of period			86.7				75.6
Cash and cash equivalents at end of period		$	150.4			$	124.6

See accompanying notes

Vought Aircraft Industries, Inc.

Notes to the Interim Unaudited Condensed Consolidated Financial Statements

Note 1 — Organization and Basis of Presentation

          Vought Aircraft Industries, Inc. (“Vought”) and its wholly owned subsidiaries, VAC Industries, Inc., Vought Commercial Aircraft Company and Contour Aerospace Corporation (“Contour”) are herein referred to collectively as “we” or the “Company.” We are a leading global manufacturer of aerostructure products for commercial, military and business jet aircraft. We have a long history of developing and manufacturing a wide range of complex aerostructures such as fuselages, wing and tail assemblies, engine nacelles, flight control surfaces, as well as helicopter cabins. Our diverse and long-standing customer base consists of leading aerospace original equipment manufacturers, or OEMs, including Airbus, Bell Helicopter, Boeing, Cessna, Gulfstream, Hawker Beechcraft, Lockheed Martin, Northrop Grumman and Sikorsky, as well as the U.S. Air Force.

          Our heritage as an aircraft manufacturer extends to the company founded in 1917 by aviation pioneer Chance Milton Vought. From 1994 to 2000, we operated as Northrop Grumman’s commercial aircraft division. Vought was formed in 2000 in connection with The Carlyle Group’s acquisition of Northrop Grumman’s aerostructures business. In July 2003, we purchased The Aerostructures Corporation, with manufacturing sites in Nashville, Tennessee; Brea, California; and Everett, Washington. We are a Delaware corporation with our principal executive offices located at 201 East John Carpenter Freeway, Tower 1, Suite 900, Irving, TX 75062, and we perform production work at sites throughout the United States, including California, Texas, Georgia, Tennessee, Florida and Washington.

          The accompanying interim unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles. In the opinion of management, the accompanying interim unaudited condensed consolidated financial statements contain all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of the results of operations for interim periods. The results of operations for the three and nine month periods ended September 27, 2009 are not necessarily indicative of the results that may be expected for the year ending December 31, 2009. These interim unaudited condensed consolidated financial statements should be read in conjunction with the financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2008, filed with the U.S. Securities and Exchange Commission (“SEC”) on March 13, 2009.

          As a result of the sale of the assets and operations of our 787 business conducted at North Charleston, South Carolina (“787 business”) on July 30, 2009, the balances and activities of the 787 business have been segregated and reported as discontinued operations for all periods presented except with respect to the Consolidated Statements of Cash Flows. For further details, see Note 3 — Discontinued Operations.

          It is our practice to close our books and records based on a thirteen-week quarter, which can lead to different period end dates for comparative purposes. The interim financial statements and tables of financial information included herein are labeled based on that convention. This practice only affects interim periods, as our fiscal year ends on December 31.

          The consolidated balance sheet at December 31, 2008 presented herein has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

Note 2-Recent Accounting Pronouncements

          In December 2007, the FASB issued an accounting standard that provides revised guidance on how acquirors recognize and measure the consideration transferred, identifiable assets acquired, liabilities assumed, noncontrolling interests, and goodwill acquired in a business combination. This standard also expands required disclosures surrounding the nature and financial effects of business combinations. We adopted the guidance of this accounting standard, currently included in the Business Combinations Topic of the Accounting Standards Codification (ASC) on January 1, 2009. We considered the provisions of this accounting standard with respect to the sale of our 787 business (as discussed in Note 3 — Discontinued Operations).

          FASB issued an accounting standard that requires enhanced disclosures about the plan assets of a company’s defined benefit pension and other postretirement plans. The enhanced disclosures are intended to provide users of financial statements with a greater understanding of: (1) how investment allocation decisions are made, including the factors that are pertinent to an understanding of investment policies and strategies; (2) the major categories of plan assets; (3) the inputs and valuation techniques used to measure the fair value of plan assets; (4) the effect of fair value measurements using significant unobservable inputs (Level 3) on changes in plan assets for the period; and (5) significant concentrations of risk within plan assets. We adopted the provisions of this accounting standard on January 1, 2009 and will provide the required enhanced disclosures for our pension plan assets in our 2009 annual report on Form 10-K.

          In May 2009, the FASB issued an accounting standard that requires an entity to recognize in the financial statements the effects of all subsequent events that provide additional evidence about conditions that existed at the date of the balance sheet. For nonrecognized subsequent events that must be disclosed to keep the financial statements from being misleading, an entity is required to disclose the nature of the event as well as an estimate of its financial effect, or a statement that such an estimate cannot be made. In addition, this accounting standard requires an entity to disclose the date through which subsequent events have been evaluated. We adopted this accounting standard for our fiscal period ending June 28, 2009 and we have evaluated subsequent events through the date of issuance of our interim, unaudited, condensed consolidated financial statements on November 10, 2009. No material subsequent events have occurred since September 27, 2009.

          In June 2009, the FASB issued an accounting standard that establishes the FASB Accounting Standards CodificationÔ (the Codification) as the source of authoritative U.S. generally accepted accounting principles (US GAAP). We adopted this accounting standard for our fiscal period ending September 27, 2009.

          Following the Codification, the FASB will not issue new standards in the form of Statements, FASB Staff Positions or Emerging Issues Task Force Abstracts. Instead, it will issue Accounting Standards Updates (ASUs), which will serve to update the Codification, provide background information about the accounting guidance and provide the basis for conclusions on the changes to the Codification. GAAP is not intended to be changed as a result of the Codification, but it will change the way the accounting guidance is organized and presented. As a result, these changes have a significant impact on how we reference GAAP in our financial statements and in our accounting policies for financial statements issued for interim and annual periods ending after September 15, 2009.

          In this quarterly report, the Company has begun the process of implementing the statement by removing references to FASB statement numbers in the footnotes that follow and explaining the adherence to authoritative accounting guidance in plain English, where appropriate.

Note 3- Discontinued Operations

          On July 6, 2009, we entered into an agreement to sell the assets and operations of our 787 business conducted at North Charleston, South Carolina to Boeing Commercial Airplanes Charleston South Carolina, Inc., a wholly owned subsidiary of The Boeing Company. The transaction was completed on July 30, 2009. Concurrent with the closing of the transaction, we entered into an agreement terminating the existing 787 supply agreement releasing claims and resolving rights and obligations, including obligations incurred or created as a result of ordinary course performance of the 787 supply agreement. Going forward, under a newly negotiated contract, we will manufacture certain components for the 787 program as well as provide engineering services to Boeing pursuant to an engineering services agreement. We also will provide certain transition services to Boeing pursuant to a transition services agreement. The transition services provided to Boeing are temporary and non-production related and thus not deemed direct cash flows of the 787 business. The transition services are included as a component of continuing operations and are expected to be completed in the next 12-18 months.

          We received total cash proceeds of approximately $590 million as consideration for the transaction, of which approximately $9.3 million was used to pay costs associated with the transaction. The cash proceeds were allocated based on the estimated relative fair value of each component of the transaction. As a result of that allocation, we have recorded a $39.8 million loss on the sale of the 787 business and revenue of $291.4 million related to the settlement of contractual matters incurred in the ordinary course of business as income from discontinued operations in the three and nine month periods ended September 27, 2009. The following table represents the assets of the 787 business as of July 30, 2009 and December 31, 2008. The balances as of December 31, 2008 have been reclassified to the assets related to discontinued operations and liabilities related to discontinued operations captions in our December 31, 2008 Consolidated Balance Sheet.

		July 30,				December 31,
		2009				2008
		($ in millions)
Trade and other receivables		$	9.7			$	0.1
Inventories			135.0				132.6
Property, plant and equipment, net			197.5				205.1
Goodwill (allocated)			122.9				122.9
		$	465.1			$	460.7
Accounts payable			22.2				28.5
Accrued and other liabilities			5.8				6.2
Accrued payroll and employee benefits			1.2				0.6
Accrued contract liabilities			47.7				60.3
Other non-current liabilities			59.2				61.1
		$	136.1			$	156.7

          We also reclassified the results of operations related to our 787 Business to the income (loss) from discontinued operations, net of tax caption in our Consolidated Statements of Operations for all periods presented. The following table summarizes the components of income (loss) from discontinued operations, net of tax:

		Three Months Ended								Nine Months Ended
		September 27,				September 28,				September 27,				September 28,
		2009				2008				2009				2008
		($ in millions)								($ in millions)
Revenue		$	297.6			$	—			$	316.2			$	21.4
Cost of sales			(22.6	)			—				(41.2	)			(21.4	)
Selling, general and administrative expenses			(0.4	)			(5.0	)			(6.0	)			(23.8	)
Loss on sale of 787 business			(39.8	)			—				(39.8	)			—
Income tax expense			(15.4	)			—				(15.4	)			—
Income (loss) from discontinued operations, net of tax		$	219.4			$	(5.0	)		$	213.8			$	(23.8	)

Note 4 — Inventories

          Costs included in inventory consist of all direct production costs, manufacturing and engineering overhead, production tooling costs and certain general and administrative expenses.

          Inventories consisted of the following:

		September 27,				December 31,
		2009				2008
		(in millions)
Production costs of contracts in process		$	724.9			$	553.2
Finished goods			3.0				2.9
Less: unliquidated progress payments			(248.9	)			(244.3	)
Total inventories		$	479.0			$	311.8

          The increase in our inventory balance from December 31, 2008 to September 27, 2009 primarily relates to our investment to support the ramp-up of 747-8 production.

          Our inventory balance as of December 31, 2008 was impacted by the release of purchase accounting reserves of $22.6 million for the Boeing 747 program to reflect the updated timeline for the completion of the deliveries for the 747-400 model. They were released from inventory and accrued contract liabilities to income through the Cost of Sales caption in our Consolidated Statement of Operations, increasing our reported income for the first quarter of 2008. Additionally, we accelerated the useful life of an intangible asset associated with the 747 program for the same reason. Refer to Note 5 — Goodwill and Intangible Assets for disclosure of the impact of the change in useful life.

Note 5 — Goodwill and Intangible Assets

          Goodwill is tested for impairment, at least annually, in accordance with the provisions of the Intangibles — Goodwill and Other topic of the ASC. Under this topic, the first step of the goodwill impairment test used to identify potential impairment compares the fair value of a reporting unit with its carrying value. We have concluded that the Company is a single reporting unit. Accordingly, all assets and liabilities are used to determine our carrying value. In connection with the sale of our 787 business on July 30, 2009 (discussed in Note 3 - Discontinued Operations), a portion of our goodwill balance was allocated to that business based on the relative fair value of its assets. Subsequently, we performed an interim impairment test of our remaining Goodwill balance and determined the balance is not impaired. The following table represents a summary of the change in the Goodwill balance as a result of the aforementioned allocation:

		(in millions)
Goodwill prior to allocation		$	527.7
Allocation to 787 business			122.9
Goodwill after allocation		$	404.8

          We use an independent valuation firm to assist in the estimation of enterprise fair value using standard valuation techniques such as discounted cash flow, market multiples and comparable transactions. The discounted cash flow fair value estimates are based on management’s projected future cash flows and the estimated weighted average cost of capital. The estimated weighted average cost of capital is based on the risk-free interest rate and other factors such as equity risk premiums and the ratio of total debt and equity capital.

          We must make assumptions regarding estimated future cash flows and other factors used by the independent valuation firm to determine the fair value. If these estimates or the related assumptions change, we may be required to record non-cash impairment charges for goodwill in the future.

          Identifiable intangible assets consisted of the following:

		September 27,				December 31,
		2009				2008
		(in millions)
Programs and contracts		$	137.3			$	137.3
Less: accumulated amortization			(115.2	)			(110.1	)
Identifiable intangible assets, net		$	22.1			$	27.2

          During the nine month period ended September 28, 2008, we made a change to the estimated useful life of an intangible asset associated with our 747 program to reflect a change in the estimated period during which the remaining deliveries of the 747-400 model would be made. This change in estimate resulted in an additional $1.2 million recorded to selling, general and administrative expenses during the nine month period ended September 28, 2008. Including this change, scheduled remaining amortization of identifiable intangible assets as of September 27, 2009 is as follows:

		(in millions)
2009		$	1.7
2010			4.8
2011			2.1
2012			2.1
2013			2.1
Thereafter			9.3
Total remaining amortization of identifiable intangible assets		$	22.1

Note 6 — Pension and Other Post-retirement Benefits

          The components of net periodic benefit cost for our pension plans and other post-retirement benefit plans were as follows:

		Pension Benefits
		Three Months Ended								Nine Months Ended
		September 27,				September 28,				September 27,				September 28,
		2009				2008				2009				2008
		(in millions)
Components of net periodic benefit cost (income):
Service cost		$	4.9			$	4.1			$	13.6			$	13.6
Interest cost			28.9				29.0				86.3				83.8
Expected return on plan assets			(31.5	)			(31.0	)			(94.2	)			(93.1	)
Amortization of net (gain) loss			11.0				10.4				32.2				24.2
Amortization of prior service cost			3.1				3.0				9.3				8.9
Prior service costs recognized - curtailment			—				—				1.8				—
Plan settlement or curtailment (gain) loss			—				0.2				4.6				0.2
Special termination benefits			0.5				—				0.5				—
Net periodic benefit cost		$	16.9			$	15.7			$	54.1			$	37.6
Defined contribution plans cost		$	5.1			$	4.5			$	14.7			$	13.8

		Other Post-retirement Benefits
		Three Months Ended								Nine Months Ended
		September 27,				September 28,				September 27,				September 28,
		2009				2008				2009				2008
		(in millions)
Components of net periodic benefit cost (income):
Service cost		$	0.6			$	1.3			$	2.5			$	3.8
Interest cost			5.5				7.2				18.2				22.1
Amortization of net (gain) loss			0.7				(1.2	)			1.4				1.5
Amortization of prior service cost			(6.5	)			(5.9	)			(19.0	)			(15.1	)
Prior service costs recognized - curtailment			—				—				(0.2	)			—
Plan settlement or curtailment (gain) loss			—				—				3.4				—
Special termination benefits			0.2				—				0.2				—
Net periodic benefit cost		$	0.5			$	1.4			$	6.5			$	12.3

We periodically experience events or take actions that affect our benefit plans. Some of these events or actions require remeasurements and result in special charges. The following summarizes the key events that affect our net periodic benefit cost and obligations:

•

During February and April of 2008, two of our union represented groups ratified new collective bargaining agreements. Those agreements each provide for a freeze in pension benefit accruals, effective December 31, 2008, for bargaining unit employees who, as of December 31, 2007, had less than 16 years of bargaining unit seniority. Employees subject to the pension freeze and any employees hired on or after March 1, 2008 for the first group and April 1, 2008 for the second group, receive a defined contribution benefit. The agreements provided for a one-time retirement incentive program offered to eligible employees during 2008. The agreements also provide for certain modifications to the retiree medical benefits for bargaining unit retirees and eliminated retiree medical coverage for any bargaining unit employees hired on or after January 1, 2008.

	•		In September 2008, we announced amendments to medical plans for two groups of non-represented, current retirees. Effective January 1, 2009, medical coverage for participants in those two groups is eliminated at age 65 and replaced with a fixed monthly stipend.
	•		The aforementioned changes in 2008 led to remeasurement of affected plans’ assets and obligations as of March 31, 2008, which resulted in a $14.9 million increase in unfunded liability for the affected pension plans and a $44.1 million decrease in liability for the affected OPEB plans. These impacts were recorded in the nine month period ended September 28, 2008.
	•		During January of 2009, the IAM-represented employees at our Nashville facility ratified a new collective bargaining agreement. That agreement provides for certain benefit changes, including a freeze in pension benefit accruals, effective June 30, 2009, for bargaining unit employees who, as of that date, had less than 16 years of bargaining unit seniority. Employees subject to the pension freeze, and any bargaining unit employees hired on or after September 29, 2008, receive a defined contribution benefit. The agreement provides for a one-time company paid retirement incentive program offered to eligible employees during 2009 and certain modifications to retiree medical benefits for bargaining unit retirees. These changes led to a remeasurement of the affected plans’ assets and obligations as of January 31, 2009, which increased our unfunded liability for the pension plan by $1.5 million, decreased our liability for the OPEB plan by $32.7 million and led to the immediate recognition of $9.6 million of net non-recurring charges due to a curtailment.
	•		In September 2009, we announced amendments to medical plans for groups of non-represented, current retirees. Effective January 1, 2010, medical coverage for participants in two groups is eliminated at age 65 and replaced with a fixed monthly stipend. We estimate that those changes will not have a material impact on our obligations under our other post-retirement benefit plans.

          Due to the actions taken by the U.S. Treasury Department earlier in 2009 expanding the permissible yield curves that can be used for the discount rate, our required pension contributions for the fiscal year ended December 31, 2009 total $78.8 million, as compared to $84.7 million, as disclosed in our 2008 annual report on Form 10-K.

Note 7- Commitments

          Warranty Reserve. We have established a reserve to provide for the estimated future cost of warranties on our delivered products. We periodically review the reserve and adjustments are made accordingly. A provision for warranties on products delivered is made on the basis of our historical experience and specific warranty issues. Warranties cover such factors as non-conformance to specifications and defects in material and workmanship. The majority of our agreements include a three-year warranty, although certain programs have warranties up to 20 years.

          During the year ended December 31, 2008, we increased our provisions for warranty by $9.5 million. Of that increase, $8.2 million was attributable to specific warranty issues identified during 2008. The following table is a roll-forward of amounts accrued for warranty reserve included in Current and Long-term liabilities:

		Warranty
		Reserve
		($ in millions)
Balance at December 31, 2007		$	7.2
Warranty costs incurred			(0.6	)
Provisions for warranties			9.5
Balance at December 31, 2008		$	16.1
Warranty costs incurred			(1.4	)
Provisions for warranties			0.5
Balance at September 27, 2009		$	15.2
Consolidated Balance Sheet classification
Accrued and other liabilities			1.4
Other non-current liabilities			13.8

Note 8- Environmental Contingencies

          We accrue environmental liabilities when we determine we are responsible for remediation costs, it is probable that a liability has been incurred and such liability amounts are reasonably estimable. When only a range of amounts is estimated and no amount within the range is more probable than another, the minimum amount in the range is recorded in other current and non-current liabilities.

          The acquisition agreement between Northrop Grumman Corporation and Vought transferred certain pre-existing (as of July 24, 2000) environmental liabilities to us. We are liable for the first $7.5 million and 20% of the amount between $7.5 million and $30.0 million for environmental costs incurred relating to pre-existing matters as of July 24, 2000. Pre-existing environmental liabilities exceeding our $12.0 million liability limit remain the responsibility of Northrop Grumman Corporation under the terms of the acquisition agreement, to the extent they are identified within 10 years from the acquisition date. Thereafter, to the extent environmental remediation is required for hazardous materials including asbestos, urea formaldehyde foam insulation or lead-based paints, used as construction materials in, on, or otherwise affixed to structures or improvements on property acquired from Northrop Grumman Corporation, we would be responsible. We have no material outstanding or unasserted asbestos, urea formaldehyde foam insulation or lead-based paint liabilities, including on property acquired from Northrop Grumman Corporation.

          We acquired the Nashville, Tennessee facility from Textron Inc. in 1996. In connection with that acquisition, Textron agreed to indemnify us for up to $60.0 million against any pre-closing environmental liabilities with regard to claims made within ten years of the date on which the facility was acquired, including with respect to a solid waste landfill located onsite that was closed pursuant to a plan approved by the Tennessee Division of Solid Waste Management. Although that indemnity was originally scheduled to expire in August 2006, we believe that the agreement may continue to provide indemnification for certain pre-closing environmental liabilities incurred beyond that expiration date. While there are no currently pending environmental claims relating to the Nashville facility, there is no assurance that environmental claims will not arise in the future, or that such claims will be subject to indemnification.

          The following is a roll-forward of amounts accrued for environmental liabilities included in Current and Long-term liabilities:

		Environmental
		Liability
		($ in millions)
Balance at December 31, 2007		$	3.8
Environmental costs incurred			(0.6	)
Balance at December 31, 2008			3.2
Environmental costs incurred			(0.4	)
Balance at September 27, 2009		$	2.8
Consolidated Balance Sheet classification
Accrued and other liabilities			0.5
Other non-current liabilities			2.3

Note 9- Other Non-Current Liabilities

          Other non-current liabilities consisted of the following:

		September 27,				December 31,
		2009				2008
		(in millions)
Deferred income from the sale of Hawthorne facility (a)		$	12.6			$	11.6
State of Texas grant monies (b)			32.9				35.0
Accrued worker’s compensation			15.7				14.9
Accrued warranties			13.8				15.6
Other			4.0				4.5
Total other non-current liabilities		$	79.0			$	81.6

Note 10- Income Taxes

          The Income Taxes topic of the ASC prescribes a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken or expected to be taken in an income tax return. This interpretation also provides guidance on derecognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, accounting for income taxes in interim periods and income tax disclosures. We filed an automatic change of accounting method request in the 2008 federal income tax return to amend an uncertain tax position. After giving effect to this adjustment, our unrecognized tax benefit position as of September 27, 2009 was $1.6 million. A similar adjustment has been recorded to reflect the revised deferred tax assets. Due to the valuation allowance on the net deferred tax asset, there was no P&L impact associated with the change in the recorded unrecognized tax position during the period.

          During the nine month periods ended September 27, 2009 and September 28, 2008, we incurred a $0.9 million and $0.2 million expense, respectively, related to the alternative minimum tax (“AMT”), which arose because of a limitation on the amount of net operating losses available to offset projected taxable income. Other than AMT, we have not recorded a federal income tax provision for any period presented because the amount provided for federal income taxes are offset by reductions in our valuation allowance.

          Tax incurred from the sale of the 787 business reported as discontinued operations totaled $15.4 million, of which $9.1 related to federal income tax and $6.3 related to state income tax. During the nine month period ended September 27, 2008, we utilized approximately $508.6 in federal net operating loss carryforwards of which $453.4 million related to the sale of the 787 business. We have $104.6 million of remaining federal net operating loss carryforwards that expire in 2028.

          We file income tax returns in the U.S. federal jurisdiction and various state jurisdictions. We are subject to examination by the Internal Revenue Service in the U.S. federal tax jurisdiction for the 2000-2008 tax years. We are also subject to examination in various state jurisdictions for the 2000-2008 tax years, none of which were individually material. State tax liabilities will be adjusted to account for changes in federal taxable income, as well as any adjustments in subsequent years, as those years are ultimately resolved with the IRS.

Note 11 — Stockholders’ Equity

          As of September 27, 2009, we maintained a stock option plan and an incentive award plan under which we have issued share-based awards to our employees and our directors.

2001 Stock Option Plan

          During 2001, we adopted the Amended and Restated 2001 Stock Option Plan of Vought Aircraft Industries, Inc., under which 1,500,000 shares of common stock were reserved for issuance for the purpose of providing incentives to employees and directors (the “2001 Stock Option Plan”). Options granted under the plan generally vest within 10 years, but were subject to accelerated vesting based on the ability to meet company performance targets. The incentive options granted to our employees are intended to qualify as “incentive stock options” under Section 422 of the Internal Revenue Code. At September 27, 2009, options granted and outstanding from the 2001 Stock Option Plan to employees and directors amounted to 520,200 shares of which 456,360 are vested and exercisable.

          A summary of stock option activity for the nine month period ended September 27, 2009 is as follows:

										Weighted
										Average
						Weighted				Remaining
						Average				Contractual
						Exercise				Term
		Options				Price				(in Years)
Outstanding at December 31, 2008			547,100			$	15.35
Granted			—				—
Forfeited or expired			(26,900	)			11.16
Exercised			—				—
Outstanding at September 27, 2009			520,200			$	15.56				2.9
Vested or expected to vest (a)			520,200			$	15.56				2.9
Exercisable at September 27, 2009			456,360			$	14.91				2.9

Shares Held in Rabbi Trust

          A rabbi trust is a grantor trust, typically established to fund deferred compensation for management. In 2000, we established a rabbi trust in connection with certain income deferrals made at that time by a number of our then-executives. Shares of company stock were contributed to the rabbi trust in order to fund the obligations to those executives in connection with those deferrals. Our stock held in the trust is recorded at historical cost, and the corresponding deferred compensation liability is recorded at the current fair value of our common stock. Common stock held in the rabbi trust is classified in equity as “Shares held in rabbi trust.” During the three month period ended September 27, 2009, no activity occurred in the rabbi trust account and 158,322 shares remain held in the rabbi trust.

2006 Incentive Plan

          During 2006, we adopted the Vought Aircraft Industries, Inc. 2006 Incentive Award Plan (the “2006 Incentive Plan”), under which 2,000,000 shares of common stock are reserved for issuance for the purposes of providing awards to employees and directors. Since inception, these awards have been issued in the form of stock appreciation rights (“SARs”), restricted stock units (“RSUs”) and restricted shares.

Stock Appreciation Rights (SARs)

          A summary of SARs activity for the nine month period ended September 27, 2009 is as follows:

										Weighted
										Average
						Weighted				Remaining
						Average				Contractual
						Exercise				Term
		SARs				Price				(in Years)
Outstanding at December 31, 2008			908,450			$	10.00				7.9
Granted			—				—
Forfeited or expired			(41,047	)			10.00
Exercised			(15,563	)			10.00
Outstanding at September 27, 2009			851,840			$	10.00				7.2
Vested or expected to vest (a)			738,685				10.00
Exercisable at September 27, 2009			588,562				10.00				7.2

          During the nine month period ended September 27, 2009, the exercise of SARs resulted in the issuance of 1,614 shares of common stock.

Restricted Stock Units (RSUs)

          RSUs are awards of stock units that can be converted into common stock. In general, the awards are eligible to vest over a four-year period if certain performance goals are met. No RSUs will vest if the performance goals are not met. Certain awards, granted to the CEO and CFO, vest on the first occurrence of a change in control or a date specified by the agreement.

          A summary of RSUs activity for the nine months ended September 27, 2009 is as follows:

						Grant-date
		RSUs				Fair-Value
Outstanding at December 31, 2008			622,925			$	10.65
Granted			7,500				9.76
Forfeited or expired			(16,820	)			15.35
Exercised			—				—
Outstanding at September 27, 2009			613,605			$	10.51
Vested or expected to vest (a)			553,140
Vested at September 27, 2009			196,394			$	11.89

Restricted Shares

          During the nine month period ended September 27, 2009, we granted 18,810 restricted shares to outside directors as compensation for their services. These restricted shares vested during 2009. The restricted shares were valued based on the estimated fair value of our common stock on the date of issuance.

Note 12 — Stock-Based Compensation

          As described in Note 11 — Stockholders’ Equity, we maintain a stock option plan and an incentive award plan under which we have issued equity-based awards to our employees and our directors. During 2009 and 2008, in accordance with the Compensation — Stock Compensation topic of the ASC, we recognized total compensation expense for all awards as follows:

						Stock Compensation Expense
		Three Months Ended								Nine Months Ended
		September 27,				September 28,				September 27,				September 28,
		2009				2008				2009				2008
		(in millions)
Stock Options		$	—			$	—			$	—			$	—
Rabbi Trust			—				—				(0.5	)			—
Stock appreciation rights (SARs)			0.1				0.2				0.3				0.6
Restricted stock units (RSUs)			0.3				0.5				0.9				1.4
Restricted shares			0.1				0.1				0.2				0.2
Stock compensation expense, gross			0.5				0.8				0.9				2.2
Change in forfeiture estimate			—				—				0.3				—
Stock compensation expense, net		$	0.5			$	0.8			$	1.2			$	2.2

          The terms and assumptions used in calculating stock compensation expense for each category of equity-based awards are included below.

Stock Options

          Stock options have been granted for a fixed number of shares to employees and directors with an exercise price equal to no less than the fair value of the shares at the date of grant. No stock options have been granted since 2005. Under the “modified prospective” method of the Compensation — Stock Compensation topic of the ASC, we were required to value our stock options under the fair value method and expense these amounts over the stock options’ remaining vesting period. The fair value of each option is estimated on the date of grant using the Black-Scholes option-pricing model. No additional stock options have been granted since our application of the modified prospective method. The amount of stock compensation expense recorded for stock options during the three and nine month periods ended September 27, 2009 and September 28, 2008 was immaterial.

Shares Held in Rabbi Trust

          During the nine month period ended September 27, 2009, we reversed previously recorded stock compensation expense, included in general and administrative expense, to reflect the impact of an estimated decrease in the fair value of our common stock. This decrease in value resulted in an increase to our accrued payroll and employee benefits line item on our balance sheet.

Stock Appreciation Rights (SARs)

          SARs have been granted to employees and directors with an exercise price equal to no less than the fair value of the shares at the date of grant. The fair value of each SAR is estimated on the date of grant using the Black-Scholes valuation model and based on a number of assumptions including expected term, volatility and interest rates. Because we do not have publicly traded equity or reliable historical data to estimate the expected term of the SARs, we used a temporary “simplified method” to estimate our expected term. Based on the guidance of the Compensation - Stock Compensation topic of the ASC, expected volatility was derived from an index of historical volatilities from several companies that conduct business in the aerospace industry. The risk free interest rate is based on the U.S. treasury yield curve on the date of grant for the expected term of the option. Our estimated forfeiture rate was 26% as of September 28, 2008 but was adjusted to 22% during the three month period ended June 28, 2009. We continued to utilize a 22% forfeiture rate during the three month period ended September 27, 2009

          No SARs were granted during the nine month periods ended September 27, 2009 and September 28, 2008. As of September 27, 2009, we had $0.1 million of unrecognized compensation expense remaining as a result of the grants made in prior years.

Restricted Stock Units (RSUs)

          The value of each RSU awarded is based on the estimated fair value of our common stock on the date of issuance in accordance with the Compensation — Stock Compensation topic of the ASC. Because we do not have publicly traded equity, we use an independent third party valuation firm to compute the fair market value of our common stock. Our estimated forfeiture rate was 26% as of September 28, 2008 but was adjusted to 22% during the three month period ended June 28, 2009. We continued to utilize a 22% forfeiture rate during the three month period ended September 27, 2009. However, no forfeiture rate was used in our calculation of the grants to the CEO and CFO that vest upon the first occurrence of a change in control or a date specified in the agreement, due to our assumption that they will remain employed until the vesting of these awards. As of September 27, 2009, we had $0.9 million of unrecognized compensation expense remaining.

Restricted Shares

          The restricted shares granted during the nine month period ended September 27, 2009 vested during 2009. Those shares were valued based on the estimated fair value of our common stock on the date of issuance.

Note 13 — Investment in Joint Venture

          In April 2005, we entered into a joint venture agreement with Alenia North America (“Alenia”), a subsidiary of Finmeccanica SpA, to form a limited liability company called Global Aeronautica, LLC (“Global Aeronautica”), which integrates major components of the fuselage and performs related testing activities for the Boeing 787 program. We and Alenia, each had a 50% interest in Global Aeronautica.

          On June 10, 2008, we sold our equity interest in Global Aeronautica to Boeing for $55.0 million in cash and as a result, recorded a $47.1 million gain on the sale during the fiscal year ended December 31, 2008. Our results of operations are no longer impacted by this joint venture.

Note 14 — Long-Term Debt

          Our total outstanding long-term debt as of September 27, 2009 was $592.5 million which included $322.5 million incurred under our senior credit facilities and $270.0 million of 8% Senior Notes due 2011 (“Senior Notes”). The $322.5 million balance under our senior credit facilities reflected on the Consolidated Balance Sheet includes $325.2 million in outstanding term loans, net of $2.7 million of unamortized original issue discount. The following paragraphs include further details on the components of the Long-term debt balances in our Consolidated Balance Sheet.

          On July 2, 2003, we issued $270.0 million of Senior Notes with interest payable on January 15 and July 15 of each year, beginning January 15, 2004. We may redeem the notes in full or in part by paying premiums specified in the indenture governing our outstanding Senior Notes. The notes are senior unsecured obligations guaranteed by all of our existing and future domestic subsidiaries. The fair value of our Senior Notes was approximately $267.3 million and $183.6 million as of September 27, 2009 and December 31, 2008, respectively, based on quoted market prices.

          We entered into $650.0 million of senior credit facilities pursuant to a credit agreement dated December 22, 2004 (“Credit Agreement”). Upon issuance, our senior credit facilities were comprised of a $150.0 million six year revolving loan (“Revolver”), a $75.0 million synthetic letter of credit facility and a $425.0 million seven year term loan B. Initially, the seven year term loan B amortized at $1.0 million per quarter with a final payment at the maturity date of December 22, 2011.

          On May 6, 2008, we borrowed an additional $200.0 million of term loans pursuant to our existing senior credit facilities (the “Incremental Facility”). We received net proceeds of approximately $184.6 million from the Incremental Facility net of a $10.0 million original issue discount and $5.4 million of debt origination costs, to be used for general corporate purposes. The interest rates per annum applicable to the Incremental Facility were, at our option, the ABR or Eurodollar Base Rate plus, in each case, an applicable margin equal to 3.00% for ABR loans and 4.00% for Eurodollar Base Rate loans, subject to a Eurodollar Base Rate floor of 3.50%. During the three month period ended September 27, 2009, we paid down $355.0 million of outstanding term loans including a portion of the Incremental Facility. Additionally, we expensed $5.7 million of debt issuance costs and original issue discount related to the pay down of the Incremental Facility. Our effective interest rates on the Incremental Facility for the three and nine month periods ended September 28, 2009 were 38.4% and 15.2%, respectively. However, excluding the impact of $5.7 million of debt issuance costs and original issue discount, the effective interest rates were 12.3% and 10.5% for the three and nine month periods ended September 28, 2009, respectively.

          Except for amortization and interest rate, the terms of the Incremental Facility, upon issuance, including mandatory prepayments, representations and warranties, covenants and events of default, were the same as those applicable to the existing term loans under our senior credit facilities and all references to our senior credit facilities included the Incremental Facility. The term loans under the Incremental Facility were initially repayable in equal quarterly installments of $470,000, with the balance due on December 22, 2011.

          On January 31, 2009, under the terms of our credit agreement, we exercised our option to convert $25.0 million of the synthetic letter of credit facility to a term loan. The $25.0 million term loan is subject to the same terms and conditions as the outstanding term loans made as of December 2004. As a result, our limit under the synthetic letter of credit facility was reduced to $50.0 million.

          On July 30, 2009 we entered into an Amendment to our Credit Agreement (“Amendment”) which modified the Credit Agreement to allow the sale of our 787 business (discussed in Note 3 - Discontinued Operations) and provided for use of cash proceeds from the transaction to (i) pay down $355.0 million of term loans outstanding and (ii) repay outstanding amounts on our revolver of $135.0 million and to permanently reduce revolving commitments under the Credit Agreement to $100.0 million. The Amendment converted the synthetic letter of credit facility under the Credit Agreement into additional term loan of $50.0 million, a portion of which is used as cash collateral for letters of credit previously issued under the synthetic letter of credit facility. As of September 27, 2009, the cash restricted as collateral for outstanding letters of credit was $43.7 million. The Amendment increased the interest rate on all loans to London Interbank Offering Rate (LIBOR) plus a margin of 4.00%, with a minimum LIBOR floor of 3.50%.

          Under the terms of the senior credit facility, we are required to prepay or refinance any amounts outstanding of our $270.0 million Senior Notes by the last business day of 2010 or we must repay the aggregate amount of loans outstanding at that time under the senior credit facility unless a lender waives such prepayment (so long as a majority of our lenders (voting on a class basis) agree to such waiver). We may not be able to refinance the Senior Notes on commercially reasonable terms or at all. This risk could impair our ability to fund our operations, limit our ability to expand our business or increase our interest expense, which could have a material adverse effect on our financial results.

          In August 2009, Barclay’s Bank PLC replaced Lehman Commercial Paper, Inc. as the administrative and collateral agent under our existing senior credit facilities.

Note 15- Related Party Transactions

          A management agreement between us and our controlling stockholder, The Carlyle Group, requires us to pay an annual fee of $2.0 million for various management services. We incurred fees of $0.5 million and $1.5 million pursuant to this management agreement for the three and nine month periods ended September 27, 2009 and September 28, 2008, respectively. The Carlyle Group also serves, in return for additional fees, as our financial advisor for mergers, acquisitions, dispositions and other strategic and financial activities. In connection with the sale of our 787 business (discussed in Note 3 — Discontinued Operations), we have paid approximately $3.0 million to The Carlyle Group during the three months ended September 27, 2009.

          Since 2002, we have had an ongoing commercial relationship with Wesco Aircraft Hardware Corp. (“Wesco”), a distributor of aerospace hardware and provider of inventory management services. Wesco currently provides aerospace hardware to us pursuant to long-term contracts. On September 29, 2006, The Carlyle Group acquired a majority stake in Wesco, and as a result, we are both now under common control of The Carlyle Group through its affiliated funds. In addition, four of our directors, Messrs. Squier, Clare, Palmer and Jumper, also serve on the board of directors of Wesco. The Carlyle Group may indirectly benefit from their economic interest in Wesco from its contractual relationships with us. The total amount paid to Wesco pursuant to our contracts with Wesco for the three month periods ended September 27, 2009 and September 28, 2008 was approximately $8.0 million and $6.0 million, respectively. Approximately, $19.8 million and $21.1 million was paid to Wesco pursuant to our contracts with Wesco for the nine month periods ended September 27, 2009 and September 28, 2008.

          As a result of a competitive procurement, in September 2009, we entered into an agreement with Wesco on a long-term contract to provide hardware requirements for various programs. That agreement extends through November 2014 with an estimated contract value of approximately $175.0 million.

          In connection with the sale of our 787 business (discussed in Note 3 — Discontinued Operations), two of our agreements with Wesco were assigned to a subsidiary of Boeing. Approximately $3.2 million and $4.3 million was paid to Wesco under those agreements for the nine month periods ending September 27, 2009 and September 28, 2008, respectively.

          We also have an ongoing commercial relationship with Gardner Group Ltd (“Gardner Group”), a supplier of metallic aerostructure details, equipment and engine components to the global aviation industry. Gardner Group currently provides aerospace parts to us. The most recent agreement with the Gardner Group was entered into on November 5, 2007. On November 3, 2008, The Carlyle Group acquired a majority equity interest in the Gardner Group, and as a result, the Gardner Group and our company are both now under common control of The Carlyle Group through its affiliated funds. The Carlyle Group may indirectly benefit from their economic interest in Gardner Group from its contractual relationships with us. The total amount paid to Gardner Group pursuant to our contracts with Gardner Group for the three and nine month periods ended September 27, 2009 was $0.7 million and $1.1 million, respectively.

Note 16- Guarantor Subsidiaries

          The 8% Senior Notes due 2011 are fully and unconditionally and jointly and severally guaranteed, on a senior unsecured basis, by our 100% owned subsidiaries. In accordance with criteria established under Rule 3-10(f) of Regulation S-X under the Securities Act of 1933, as amended (the “Securities Act”), summarized financial information of Vought and its guarantor subsidiaries is presented below:

Vought Aircraft Industries, Inc.
Consolidating Balance Sheet
September 27, 2009
(dollars in millions, except par value per share) (Unaudited)

						Guarantor				Intercompany
		Vought				Subsidiaries				Eliminations				Total
Assets
Current assets:
Cash and cash equivalents		$	150.3			$	0.1			$	—			$	150.4
Restricted cash			43.7				—				—				43.7
Trade and other receivables			119.5				7.6				—				127.1
Intercompany receivable			20.9				8.3				(29.2	)			—
Inventories			462.1				16.9				—				479.0
Other current assets			5.0				0.6				—				5.6
Total current assets			801.5				33.5				(29.2	)			805.8
Property, plant and equipment, net			263.9				8.9				—				272.8
Goodwill			341.1				63.7				—				404.8
Identifiable intangible assets, net			22.1				—				—				22.1
Debt origination costs, net and other assets			6.1				0.1				—				6.2
Investment in affiliated company			78.3				—				(78.3	)			—
Total assets		$	1,513.0			$	106.2			$	(107.5	)		$	1,511.7
Liabilities and stockholders’ equity (deficit)
Current liabilities:
Accounts payable, trade		$	122.0				4.4				—			$	126.4
Intercompany payable			8.3				20.9				(29.2	)			—
Accrued and other liabilities			80.6				1.2				—				81.8
Accrued payroll and employee benefits			45.5				1.4				—				46.9
Accrued post-retirement benefits-current			42.2				—				—				42.2
Accrued pension-current			0.6				—				—				0.6
Current portion of long-term bank debt			5.9				—				—				5.9
Accrued contract liabilities			112.4				—				—				112.4
Total current liabilities			417.5				27.9				(29.2	)			416.2
Long-term liabilities:
Accrued post-retirement benefits			368.5				—				—				368.5
Accrued pension			658.1				—				—				658.1
Long-term bank debt, net of current portion			316.6				—				—				316.6
Long-term bond debt			270.0				—				—				270.0
Other non-current liabilities			79.0				—				—				79.0
Total liabilities			2,109.7				27.9				(29.2	)			2,108.4
Stockholders’ equity (deficit):
Common stock, par value $.01 per share; 50,000,000 shares authorized, 24,818,806 issued and outstanding at September 27, 2009			0.3				—				—				0.3
Additional paid-in capital			422.2				80.3				(80.3	)			422.2
Shares held in rabbi trust			(1.6	)			—				—				(1.6	)
Accumulated deficit			(220.7	)			(2.0	)			2.0				(220.7	)
Accumulated other comprehensive loss			(796.9	)			—				—				(796.9	)
Total stockholders’ equity (deficit)		$	(596.7	)		$	78.3			$	(78.3	)		$	(596.7	)
Total liabilities and stockholders’ equity (deficit)		$	1,513.0			$	106.2			$	(107.5	)		$	1,511.7

Vought Aircraft Industries, Inc.
Consolidating Balance Sheet
December 31, 2008
($ in millions, except share amounts) (unaudited)

						Guarantor				Intercompany
		Vought				Subsidiaries				Eliminations				Total
Assets
Current assets:
Cash and cash equivalents		$	86.6			$	0.1			$	—			$	86.7
Trade and other receivables			131.1				7.4				—				138.5
Intercompany receivable			21.1				8.3				(29.4	)			—
Inventories			297.7				14.1				—				311.8
Assets related to discontinued operations			460.7												460.7
Other current assets			4.2				0.5				—				4.7
Total current assets			1,001.4				30.4				(29.4	)			1,002.4
Property, plant and equipment, net			271.2				8.0				—				279.2
Goodwill			341.1				63.7				—				404.8
Identifiable intangible assets, net			27.2				—				—				27.2
Debt origination costs, net and other assets			12.9				1.1				—				14.0
Investment in affiliated company			76.4				—				(76.4	)			—
Total assets		$	1,730.2			$	103.2			$	(105.8	)		$	1,727.6
Liabilities and stockholders’ equity (deficit)
Current liabilities:
Accounts payable, trade		$	144.5			$	4.0			$	—			$	148.5
Intercompany payable			8.3				21.1				(29.4	)			—
Accrued and other liabilities			57.4				0.1				—				57.5
Accrued payroll and employee benefits			46.5				1.6				—				48.1
Accrued post-retirement benefits-current			42.0				—				—				42.0
Accrued pension-current			0.3				—				—				0.3
Current portion of long-term bank debt			5.9				—				—				5.9
Liabilities related to discontinued operations			156.7												156.7
Accrued contract liabilities			141.1				—				—				141.1
Total current liabilities			602.7				26.8				(29.4	)			600.1
Long-term liabilities:
Accrued post-retirement benefits			405.3				—				—				405.3
Accrued pension			710.7				—				—				710.7
Long-term bank debt, net of current portion			594.0				—				—				594.0
Long-term bond debt			270.0				—				—				270.0
Other non-current liabilities			81.6				—				—				81.6
Total liabilities			2,664.3				26.8				(29.4	)			2,661.7
Stockholders’ equity (deficit):
Common stock, par value $.01 per share; 50,000,000 shares authorized, 24,798,382 issued and outstanding at December 31, 2008			0.3				—				—				0.3
Additional paid-in capital			420.5				80.3				(80.3	)			420.5
Shares held in rabbi trust			(1.6	)			—				—				(1.6	)
Accumulated deficit			(501.3	)			(3.9	)			3.9				(501.3	)
Accumulated other comprehensive loss			(852.0	)			—				—				(852.0	)
Total stockholders’ equity (deficit)		$	(934.1	)		$	76.4			$	(76.4	)		$	(934.1	)
Total liabilities and stockholders’ equity (deficit)		$	1,730.2			$	103.2			$	(105.8	)		$	1,727.6

Vought Aircraft Industries, Inc.
Consolidating Statement of Operations
Three Months Ended September 27, 2009
(in millions) (Unaudited)

						Guarantor				Intercompany
		Vought				Subsidiaries				Eliminations				Totals
Revenue		$	431.4			$	18.0			$	(2.7	)		$	446.7
Costs and expenses
Cost of sales			363.0				15.7				(2.7	)			376.0
Selling, general and administrative expenses			28.8				1.4				—				30.2
Total costs and expenses			391.8				17.1				(2.7	)			406.2
Operating income			39.6				0.9				—				40.5
Other income (expense)
Interest income			0.2				—				—				0.2
Other gain			—				—				—				—
Interest expense			(20.6	)			—				—				(20.6	)
Equity in income (loss) of consolidated subsidiaries			0.9				—				(0.9	)			—
Income (loss) before income taxes			20.1				0.9				(0.9	)			20.1
Income tax expense			0.9				—				—				0.9
Income (loss) from continuing operations			19.2				0.9				(0.9	)			19.2
Income (loss) from discontinued operations, net of tax			219.4				—				—				219.4
Net income (loss)		$	238.6			$	0.9			$	(0.9	)		$	238.6