PARTICIPANTS

. Greg Powell, BE Aerospace, VP, IR . Amin Khoury, BE Aerospace, Chairman, CEO . Michael Baughan, BE Aerospace, President, COO . Robert Spingarn, Credit Suisse, Analyst . Tom McCaffery, BE Aerospace, VP, CFO . Myles Walton, Oppenheimer and Company, Analyst . Troy Lahr, Stifel Nicolaus, Analyst . Peter Arment, American Technology Research, Analyst . David Strauss, UBS, Analyst . Patrick McCarthy, FBR Capital Markets, Analyst

OVERVIEW

BEAV reported 1Q08 revenues of $473m. 1Q08 net earnings were $49m and net diluted EPS was $0.53. Co. expects 2008 EPS to be $2.35, 2009 EPS to be $2.80, and 2010 EPS to be $3.50.

FINANCIAL DATA

A. Key Data From Call 1. 1Q08 revenues = $473m. 2. 1Q08 net earnings = $49m. 3. 1Q08 net diluted EPS = $0.53. 4. Cash and cash equivalents at 03/31/08 = $40m. 5. Total debt at 03/31/08 = $152m. 6. Expected 2008 EPS = $2.35. 7. Expected 2009 EPS = $2.80. 8. Expected 2010 EPS = $3.50.

PRESENTATION SUMMARY

S1. 1Q08 Business Review (A.K.) 1. Highlights: 1. Segments of the aerospace industry, which drive demand for BEAV products, are strong. 1. Aftermarket retrofit, upgrade and refurbishment programs for first and business class cabins of major international airlines, new wide-body deliveries, and growing aftermarket demand for aerospace fasteners are all strong. 2. Outlook for revenue growth for all three segments, which drive demand for Co. continue to look robust over the next several years. 1. Revenue growth on aftermarket retrofit activity will come from backlog, shadow backlog, and follow-on orders. 2. Growth from new aircraft build sector will come from 1,150 new wide-body aircraft to be delivered over the next four years representing a 16% CAGR in wide-body aircraft deliveries. 3. Growth in Distribution segment is being driven by revenue passenger mile growth globally, and significant market share gains. 3. Is poised to deliver CAGR in EPS over the next three years of approx. 30%. 1. For the second time this year, raising financial guidance for 2008. 4. Despite all positive factors impacting BEAV and markets, financial community still does not appreciate: 1. Magnitude of Co.'s opportunities. 2. The fact that BEAV is poised to deliver the aforementioned 30% EPS CAGR over the next three years. 5. EPS CAGR over the past three years was the highest EPS growth rate of any aerospace co. 1. Rewarded for that performance by being named by the Wall Street Journal as the Number 1 Best Performing Aerospace Stock over the [last one, three, and five years]. 6. Historical performance together with: 1. Excellent earnings visibility. 2. Projected three-year EPS CAGR of approx. 30% over 2008-2010 period. 3. History of raising and beating quarterly guidance. 1. All point to substantial undervaluation of shares. 2. Misperceptions: 1. Includes the potentially negative impact of the pending airline consolidation. 1. Over the past several years: 1. Air France has acquired KLM, making it the world's largest airline. 2. Lufthansa has acquired Swissair and Sabena. 3. Air France has been trying to acquire Alitalia. 2. Co. expects further additional international combinations over time. 1. This consolidation has continued in the US with the recent announcement of Delta-Northwest merger, and further speculation about other combinations of legacy carriers. 3. Recently seen [four] weaker airlines seek protection under the bankruptcy laws. 1. Views all of these actions as positive for the airline industry and for BEAV. 2. Over the long-term, industry consolidation will result in higher ticket prices, higher airline profitability, and parking of older aircraft, creating demand for newer, more fuel efficient airplanes. 1. When that does occur, Co. expects to get its share of the orders. 3. Continues to support the aging worldwide fleet with Co.'s spare parts and broad base of fasteners. 1. Airlines are fully dependent upon Co. to keep their cabin interiors functioning. 3. US Airlines: 1. Relative to the global market, have not been major buyers of cabin interior equipment for new buy aircraft. 2. Comprise only 11% of Boeing's backlog and represent only 12% of BEAV backlog, mostly for retrofit programs. 3. Installed base of products totals approx. $3b. 1. This $3b install base drives demand for a large and growing spares and repairs business. 4. Fasteners and oxygen systems are used on essentially every aircraft flown. 1. Actively supporting the US carriers' ongoing maintenance aircraft requirement. 5. US sales were strong driven primarily by after-market demand. 6. Seen research reports that have concluded that: 1. Retrofit programs, which have driven record $2.3b backlog represent discretionary spending, and are likely to be pushed out or canceled. 2. Based upon 20 years of historical results, that could not be further from the truth. 7. International airlines must have competitive products to differentiate their premium cabins and service from those of their competitors. 1. Premium class sections of wide-body aircraft serving international long haul routes are important to the airline, where they generate their profit. 2. Airlines cannot afford to have non-competitive premium cabin offering. 3. Has never experienced a major retrofit program cancellation, not one time in the 20-year history. 8. 787 push out was not a surprise to anyone. 1. Will have some negative impact in 2009 and 2010, but a strongly positive impact thereafter. 2. Aftermarket activity, strong wide-body aircraft deliveries of other aircraft types, and substantial demand growth in share gains in the Distribution business. 1. Together with substantial margin expansion is what drove Co. to increase guidance for 2008, and confirm guidance for 2009 and 2010. 3. Will update three-year guidance when Co. releases its 3Q08 results in Oct. 4. 1Q08 Results: 1. 1Q08 was stronger than consensus expectations and was a record qtr. for Co. in terms of revenues, operating earnings, net earnings, and backlog. 2. Revenue growth, earnings growth and margin expansion were driven by exceptional performance by: 1. Interior Systems. 2. Distribution. 3. Business Jet segment. 3. Seating Segment: 1. Revenues and operating earnings were in line with expectations, but lagged outstanding performance of three aforementioned segments due to startup and learning curve issues and reflect: 1. Timing of scheduled deliveries on these new programs. 2. Start-up and learning curve costs on the new programs. 4. Corporate consolidated operating margin expanded by a whopping 190 BP vs. 1Q07. 1. Operating margin, which came in at 16.4%: 1. Reflects excellent performance at Distribution, Interior Systems, and Business Jet segment. 2. Is expected to expand further as Co. gets through start-up issues on new programs in this Seating and Engineering Services segment. 5. In addition to strong operating results, had strong bookings, which further expanded high-end quality record backlog. 1. Backlog, plus shadow backlog, plus associated follow-on orders and record level of RFQ activity that Co. is currently seeing from airline customers, are factors which provide Co. with: 1. Excellent multi-year visibility. 2. Foundation for expectations for superior earnings growth over the next three years. 6. Record financial performance was: 1. $0.04 per share, better than most recent guidance. 2. $0.02 per share, better than consensus expectations. 7. Revenues increased by 22% to $473m, all organic growth. 8. Operating earnings were up 37% on the 22% revenue growth. 9. Operating margin of 16.4% expanded by 190 BP vs. 1Q07 in spite of start-up and learning curve costs on new programs in Seating and Engineering Services segment. 10. Consolidated incremental operating margin was 24.6%. 11. Net earnings of $49m were full 51% higher than net earnings in 1Q07. 1. Net income was up 51% vs. 1Q07. 12. Net earnings per diluted share of $0.53 increased by 33% vs. 1Q07 in spite of: 1. 500 BP increase in effective tax rate. 2. 16% increase in number of weighted avg. shares outstanding in the current period. 13. On an equivalent tax rate basis, EPS was 43% higher than 1Q07. 5. Backlog Growth: 1. 1Q08 was another stellar bookings qtr. during which Co. achieved a number of strategic marketing successes. 2. Orders were approx. $600m and represent a book-to-bill ratio of approx. 1.2:1.0. 3. Record backlog of approx. $2.3b increased by approx. 25% over March 2007. 4. High quality of backlog supports expectation for continued margin expansion. 1. While the size of backlog, plus shadow backlog, plus expected follow-on orders, and robustness of current RFP activity support expectation of strong revenue growth. 5. Strong bookings performance was broad-based and encompasses all of Co.'s segments. 1. Order activity from international customers was strong as number of current customers expanded existing programs and/or placed orders for cabin interior equipment for additional aircraft types. 6. Aftermarket and spares demand was robust in all geographic regions as airlines continued to make investments to maintain and upgrade their existing fleet. 7. Geographically: 1. 63% of backlog is with international customers. 2. Over 38% of backlog is with customers in emerging markets, Asia and Middle East. 3. Only 12% of backlog is with domestic airlines. 8. Bookings were strong and of high quality. 1. Geographical diversity of customer base is expected to provide excellent future revenue stability. 9. Has a large and growing shadow backlog, which represents: 1. Expected follow-on orders from current customers for their existing fleet. 2. Orders not yet placed for new aircraft on order of the same aircraft type. 3. Programs awarded, which Co. has not yet entered into the system. 1. Oxygen awards for the new Boeing 787 and Airbus 8350 XWB. 2. Co. is the sole source supplier on both aircraft types. 4. These programs alone will generate over $0.5b of revenues, none of which is in backlog.

S2. 1Q08 Segment Results (A.K.) 1. Distribution Segment: 1. Continues to be executing well operationally and hitting on all cylinders, reflecting first full qtr. of synergies from New York Fasteners (NYF) integration and segment's highly efficient IT and automated sales and retrieval system. 2. Revenues of $122m grew 26%, reflecting: 1. Significant 2006 and 2007 investments in product line expansion. 2. Broad-based increase in aftermarket demand for aerospace fasteners. 3. Continued substantial market share gain. 3. Operating earnings increased 79%. 4. Operating margin expanded by 860 BP vs. 1Q07, reflecting: 1. First full qtr. of synergies from (NYF) integration. 2. Significantly improved and expanded mix of products on a number of long-term just in time agreements negotiated during 2007. 3. Higher margins on these programs due to Co.'s inventory stocking business model. 2. Interior Systems Segment: 1. Is beginning to reap the benefits of: 1. Draeger acquisition integration. 2. Operational efficiency initiatives. 3. Operating leverage. 2. Revenue growth of 15% reflects: 1. Higher after-market demand. 2. New aircraft deliveries. 3. Operating earnings grew by 26% to $18.4m. 4. Operating margin increased by 170 BP to 19.7% due to: 1. Additional synergies arising from Draeger Aerospace integration. 2. Operational efficiency initiatives. 3. Operating leverage. 5. Bookings and current RFP activity are at record levels. 6. Outlook is for continued strong revenue growth, driven by large number of wide body aircraft deliveries from 2008-2011. 1. All of which require significant quantities of food and beverage preparation, and storage equipment and oxygen storage distribution and delivery equipment. 2. Expects further significant margin expansion. 3. Seating Segment: 1. Had a good qtr., but one which [pales] by comparison to expectation for seating in future quarters of 2008. 2. 5% revenue growth was consistent with scheduled initial deliveries of major new retrofit programs, which have just now begun. 3. Revenues are expected to be significantly higher in 2Q08, 3Q08, and 4Q08. 4. Operating earnings were $15.5m or 10.3% of sales, reflecting negative impact of expected start-up and learning curve costs on these new programs. 5. Operating margin which expanded by: 1. 590 BP over the last three years. 2. 180 BP during 2007. 3. Is expected to begin to deliver additional margin expansion in 2H08 as production on new programs becomes more normalized. 6. Revenue growth during 2008 through 2010 will be driven by: 1. Large backlog. 2. Additional follow-on programs. 3. New retrofit orders. 4. Demand created by approximate 1,150 new wide-body aircraft, expected to be delivered over 2008-2011-time period. 7. Operating margins for 2008-2010 should continue to expand significantly due primarily to: 1. Improved product mix. 2. Learning curve efficiencies. 3. Operating leverage inherent in business. 4. Continuous improvement initiatives. 4. Business Jet Segment: 1. Is just beginning to benefit from prior investments in traditional Business Jet operations, and in super first class suite of products, reflected in outstanding 1Q08 results. 2. Revenues of $73m increased by 65% over 1Q07, all organic growth. 3. Operating earnings increased by 141% vs. 1Q07 on a 460 BP expansion in operating margin to 14.6%. 1. Significant margin expansion reflects substantially improved operational efficiency, particularly on: 1. New programs begun in 2007. 2. Operating leverage at higher sales level. 4. Is expected to deliver strong revenue growth driven by robust demand for new Business Jet aircraft, and due to having captured 80% of the available super first class orders in 2007. 1. Strong revenue growth and continued improvement in operating efficiency are expected to drive substantial additional margin expansion over 2008-2010 period. 5. Engineering Services Segment: 1. Revenues of $34m were up 62%, reflecting higher level of engineering design program management, and certification activities. 2. Operating earnings loss was due to start-up and learning curve costs on initial ramp-up of the new program. 3. Is expected to generate positive earnings in 2008, as production on new programs becomes more normalized later in the year. 6. Financial Position (As of 03/31/08): 1. Debt-to-capital ratio was 10%. 2. Net debt was $111m, which represents total debt of $152m, less cash and cash equivalents of $40m. 3. Had no borrowings outstanding on its $200m revolving credit facility. 4. Working capital of $769m, increased by $58m or 8.1% vs. 12/31/07. 5. AR increased by $62m on the higher sales level. 6. Inventories increased by $48m, reflecting: 1. Expected jump in 2Q08 revenues. 2. Substantial increase in backlog. 3. Further expansion of fastener product line. 7. Continues to expect free cash flow during 2008 of approx. $150m plus or minus 10-15%.

S3. Market Conditions (M.B.) 1. Hamburg Interiors Show: 1. Is the premier marketing event for Co.'s industry. 2. Airline executives from all over the world gather to: 1. Review new cabin interior concepts. 2. Evaluate these offerings for their new aircraft buys and retrofit programs. 3. This year's attendance was a new show record, with 150 airlines present from all regions of the world. 4. Had the largest exhibit at the show. 1. Traffic seemed to be heavier than last year. 5. Had numerous meetings with senior airline teams and several multi-day sessions covering significant RFP opportunities. 2. Themes: 1. Impressed with the geographic diversity of customer base. 1. Almost 100% attendance from airlines in the Middle East, India, South-East Asia, and South America. 2. In Europe, saw large teams from the big three players, British Airways, Air France, and Lufthansa. 1. Most of the North American majors attended as well. 3. Had specific project discussions with American, Delta, US Airways, Air Canada, Continental and United. 2. Demand for super first class and lie-flat business class seating remains robust, particularly with international carriers. 1. Super first class products were hits of the show and generated huge interest from a number of Middle Eastern and Asian carriers. 1. Crystal Cabin award for innovation and install position with Emirates, Jet Airways, Quantas and others has given up commanding market share and created strong interest from other competitive carriers who now need to upgrade their first class offerings. 2. Business class airlines are now focused on optimizing passenger comfort with overall cabin density. 1. New united lie-flat fleet which involves a unique forward and [out facing] configuration and which optimizes passenger density was well received. 2. Expects this concept to be highly successful with other global carriers. 3. Weight reduction was a key topic of interest for most airlines. 1. Noted much stronger interest in newer weight-reduced products. 2. Most of the Interior Systems products are lighter than the competition. 1. Weight differential can be significant when considering the number of units required on a typical wide-body aircraft. 3. Suite of premium beverage makers and steam ovens can save over 250 pounds of weight per aircraft. 1. While Co. has traditionally benefited from strong airline brand marketing interest in these products, now seeing significant interest from standpoint of reduced fuel burn and cost of ownership. 4. Lightweight pulse oxygen system and new coach seating platform are the lightest offerings in the industry. 4. Hamburg show reinforced what Co. is seeing in its daily bookings activity and RFP tracking. 3. Market Environment: 1. Market is as strong as Co. has ever seen it. 1. Continues to be driven primarily by airlines and leasing companies outside of US 2. Revenue growth in US remains strong, driven by increased domestic aftermarket demand. 1. Revenue growth in the US actually exceeded international growth due to: 1. Aftermarket demand. 2. Need to support aging domestic fleet.

S4. Closing Comments (A.K.) 1. Highlights: 1. Outlook continues to be strong. 2. Believes market forces will continue to drive demand for cabin interior products, aftermarket programs and new-buy aircraft for many years to come. 3. (indiscernible) and order activity are robust. 4. Expects continued backlog growth through 2010. 5. To date, backlog and revenues have been driven primarily by retrofit programs associated with existing international wide-body fleet. 6. Aftermarket programs are and are expected to continue to be the most powerful driver of demand for BEAV. 7. Expects retrofit program demand to continue indefinitely. 2. New Aircraft Deliveries: 1. Expects approx. 1,150 new wide-body aircraft to be delivered over the four-year 2008-2011 time period, representing 16% CAGR in new wide-body aircraft deliveries with market potential of approx. $2-3b of cabin interior products for these 1,150 aircraft. 3. B787 Announced Delays: 1. To date almost 900 787 aircrafts have been ordered, making 787 the most successful product launch in Boeing's history. 2. Boeing will eventually sort out their current production issues, and when they do, Co. expects that they will manufacture well over 1000 of 787s, each of which will be equipped with various BEAV cabin interior products. 1. If there are fewer 787s delivered in 2008 and 2009, there will be more of them delivered in the [out-years]. 4. Mergers: 1. Regarding recent merger news of Northwest and Delta. 1. Co. views this as a positive for the airline industry. 2. US sector will have fewer, more rational, fewer and larger airlines. 1. Remaining airlines will be able to raise their prices, buy new aircraft and expand their international business. 3. Long haul routes are where the airlines can increase their yields and profitability and become stronger competitors to the international carriers. 4. There is short-term potential for increased business with merged airline to upgrade and/or retrofit their various fleets for commonality. 1. A few airlines have been forced into bankruptcy. 2. Oil prices are a headwind for the US airlines. 5. US carriers' fuel inefficient aircraft will at some point need to be replaced. 1. US load factors continue at record levels. 6. Bankruptcies of weaker airlines are a positive factor for remaining airlines, which will have the ability to raise fares to cover swelling fuel bills. 7. Long-term visibility arising from current backlog and associated expected follow-on orders, expected strong new aircraft delivery rates, particularly for wide body air crafts, along with: 1. Growth in orders from the US domestic market and continuing aftermarket demand from carriers globally serve as foundation for expectation of continued revenue growth and superior earnings performance for next three years. 5. Guidance: 1. Increasing earnings guidance for 2008 and confirming guidance for 2009 and 2010. 2. Raising guidance for 2008 to approx. $2.35 per share. 3. Throughout 2008, expects continued revenue growth and significant additional margin expansion driven by: 1. Continued excellent performance in Distribution Segment. 2. Improved performance in Interior Systems and Business Jet Segment. 4. Seating Segment operating margin is expected to begin to deliver significantly improved margins in 2H08, as production on new programs becomes more normalized throughout the year. 6. Summary: 1. Has continued strong outlook, excellent visibility, and expected EPS three-year CAGR of approx. 30%. 2. Revenue growth will be driven by aftermarket retrofit and new buy aircraft. 3. Has record high-end quality backlog. 1. It is about two-year backlog, plus shadow backlog, plus follow-on orders. 2. Not yet substantially benefiting from approx. 1,150 new wide-body aircraft, expected to be delivered over 2008-2011 period. 4. Superior earnings growth will be driven by revenue growth and continued margin expansion. 5. 2008-2010 margin expansion will be driven by: 1. Backlog quality. 2. Continuous improvement and supply chain initiatives. 3. Lean initiatives. 4. Product mix. 5. Operating leverage. 6. Raising 2008 EPS guidance to $2.35 per share. 7. 2009 and 2010 financial guidance are confirmed. 1. EPS of $2.80 in 2009. 2. $3.50 in 2010. 8. In the Oct. time period, Co. will review its three-year plan and look at 2010 and 2009 guidance at that time.

QUESTION AND ANSWER SUMMARY

OPERATOR: Thank you, Mr. Powell. (OPERATOR INSTRUCTIONS) Our first question comes from Robert Spingarn of Credit Suisse.

ROBERT SPINGARN, ANALYST, CREDIT SUISSE: Good morning, guys. Very good quarter, Amin, thanks for the description on the front of the call on the macro. You've already talked about a lot of things, very detailed report. But can you just tell us what's going on with margins and fasteners? They are just incredible. How sustainable are those?

AMIN KHOURY, CHAIRMAN, CEO, BE AEROSPACE: Sure. Yes, the margins are sustainable, and they are sustainable as a result of the depth of our inventory position, plus our locked-in costs on outstanding purchase orders. So I think we've really done a good job of identifying which products to buy and which products to buy long. In addition, a significantly improved and expanded mix of products on a number of long-term agreements negotiated during 2007 and higher margins on these programs as a result of the Company's stocking business model, are expected to drive continued revenue growth and sustain the distribution segment margin. While there isn't much room for further margin improvement in the distribution segment, there are significant opportunities to expand margins at each of the other four segments.

ROBERT SPINGARN: Just going back to something you said a moment ago about revenue growth, if we look at the '07 quarterly progression in revs in fasteners, you kind of have a reset. You were up in the high 90s, or 100 million per quarter throughout the year, after being significantly lower in '06. You've now had a big sequential growth rate here in the March quarter versus December. Are we flattish for the rest of the year in fasteners, in the 120 range, or will we see sequential growth there as well?

AMIN KHOURY: Well, the big impact is from a number of long-term agreements, usually five-term agreements, which kicked in during the quarter. We don't, we don't talk about revenue growth on a quarterly basis, so I'm not going to address that. But suffice it to say that the business continues strong and we monitor the revenues in that business on a daily basis. And I can tell you that activity is robust and expected to continue.

ROBERT SPINGARN: Okay. Thanks. Quick one for Tom. Tom, we understand the business model in fasteners. It's inventory-driven, great return on assets. As the inventories rise, I think is seasonally expected here, but could you talk about the receivables? A little bit better increase than I expected there.

TOM MCCAFFERY, VP, CFO, BE AEROSPACE: Sure. Let me just specifically address that. The receivables were up $62 million as a result of the 22% increase in revenues, and importantly, consistent with our international customer base, so our DSO was up a little bit. It was a little over 51 days. It's up a few days from the December quarter, but it wasn't out of line with what our expectations are. In terms of the free cash flow for the quarter, it was a use. I think we had indicated that on the last call, we used 43 million during the quarter. That $62 million growth in receivables, and a $48 million increase in inventories, which are expected to, or required to handle the big jump in revenues in the second quarter.

So working capital growth during the quarter reflects both the timing of program shipments, the scheduled deliveries of fasteners on order, cash payments related to incentive comp, and higher CapEx. You should expect to see the Company generate free cash flow in the second quarter, and consistent with our prior guidance for free cash flow to increase throughout the year, as we deliver on major programs that have now begun and taken into consideration the expected delivery dates for fasteners with our various suppliers. We've put it in the release and Amin commented on it during the call. We expect free cash flow to be in the range of 150 million plus or minus 10 to 15%, and that depends on -- depends our revenue growth rate, the size and composition, and rate of growth of our backlog and the inventories necessary to support the growth in business. And finally, from a CapEx perspective, you should be thinking in the neighborhood of 40 million to $45 million, which reflects the current run rate to expand our capacity and improve our efficiencies in the manufacturing operations.

AMIN KHOURY: Rob, I would like to comment further, because the two go together. I mean the use of cash and the growth of the business. The first question was about our distribution business. During the past year, we've been able to negotiate long-term agreements with our JIC customer base, which has allowed us to significantly expand the number of parts covered under the agreement. We've been able to expand the parts covered under these long-term agreements because we have the right parts in inventory following our very successful efforts to expand the product lines offered by the distribution segment. Margins expanded in the distribution business primarily as a result of the significantly improved mix of products sold during the quarter and the substantially lower costs of those products. Our product costs were lower due to our inventory stocking model and the mix of products sold was improved because of the highly successful program to expand our product offering. We could not have done that with reinvesting the cash which our business is generating in that business.

The distribution segment's return on net tangible assets in the first quarter was about 35%. So clearly our decisions to expand our product line, acquire New York Fasteners, and invest in working capital on a distribution business is beginning to yield outstanding results.

OPERATOR: From Oppenheimer and Company, we have Myles Walton.

MYLES WALTON, ANALYST, OPPENHEIMER AND COMPANY: Thanks, good morning, and good quarter.

AMIN KHOURY: Thank you.

MYLES WALTON: Question for you on the -- Amin, you pointed out in your opening remarks 15% growth in wide body, is that a measure of the unit -- the markets or your revenue? And also--?

AMIN KHOURY: Unit, wide body deliveries in unit, and with the 787 substantially reduced, taken out of the number, including the 787 at the original rate expected in 2008 through 2011, it would have been about a 20% CAGR so we backed the 787 out in its units.

MYLES WALTON: Okay. That's really helpful. So then, would your revenue be in line or in excess of that?

AMIN KHOURY: Well, it depends upon which customer is buying, which airplane. So, I really can't, I can't comment specifically without looking at the Waterfall charts.

MYLES WALTON: Fair enough, fair enough.

MICHAEL BAUGHAN, PRESIDENT, COO, BE AEROSPACE: But you know that the wide body airplanes, all of them, have very significant quantities of BE Aerospace content.

MYLES WALTON: And could you comment a bit on the RFQ activity globally maybe, Mike, in terms of the U.S.? Obviously had really strong sales in the quarter, but I think maybe the backlog may have retreated slightly, but obviously outside the U.S., even better than I would have expected?

MICHAEL BAUGHAN: Sure. I can do that. You have to keep in mind, I think as Amin mentioned, we have a large installed base, 3 billion or so in the U.S. So we get a considerable amount of after-market demand just to support the aging fleet and that continues unabated, in fact, it grew substantially in the first quarter.

I would say speaking more broadly, the superfirst class and business class retrofit demand is extremely robust and that's driven at this point by international customers, particularly in the Middle East and Asia. That continues unabated. We see tremendous demand there. We saw that at the show. We see other aspects of that as well. The interior systems demand is global. That's supporting, as we get into the growth in wide body aircraft that we were just talking about, that has a direct, positive impact on our interior systems business. We're just getting into that portion of the market right now. It's just only now starting.

I'd say an interesting dynamic there is that traditionally demand for our interior systems products has been almost exclusively new aircraft demand. We're starting to see even in that segment now retrofit opportunities. That can be driven by the need to standardize the fleet or increasingly to reduce weight. We see global demand for seating, primarily driven by international. We see global demand for interior systems products in the start of even some retrofit activities broadening the market in that product line, and that's why we're seeing the highest number of RFPs that we've ever seen there. And then a continued strong demand to support the aging fleet through after-market and spare parts, et cetera, in the U.S. market.

OPERATOR: We're joined by Troy Lahr of Stifel Nicolaus.

TROY LAHR, ANALYST, STIFEL NICOLAUS: Thanks. You also had pretty good growth, or pretty good margin improvement at the business jet segment. Can you talk a little bit about that and how that's sustainable at this kind of 14.5 level, is that how we should think about that, and how do you get margins growing forward above that?

AMIN KHOURY: No, you should think about margins expanding further in the business jet segment and it's primarily a function of having gotten through the learning curve issues on some new programs, which were begun in 2007. So the business jet segment has a very strong backlog. RFQ activity is strong. It's very robust, so what we should expect from the segment is both continued revenue growth and significant additional operating margin expansion.

TROY LAHR: Okay, and how should we think about volumes on superfirst class seats? Should that be pretty smooth for the next few years, or I mean are we going to have, like pockets where you have really good volumes for maybe two or three quarters and then it kind of stops for a quarter and then it kind of starts back up? Could that be pretty lumpy, or should that be smooth?

AMIN KHOURY: I think it ought to be fairly smooth. I mean I think we've reported that we got about 80% of the available orders last year, and so we got a very healthy backlog, and there isn't anything at this point that, that causes us to believe that the quarterly revenue growth will be lumpy.

TROY LAHR: Okay, and the margins impacted by that, I guess.

AMIN KHOURY: Well, I did mention that our expectation is for continued margin expansion.

TROY LAHR: Right. I'm just wondering if, all of a sudden superfirst class volume comes down in one quarter, then would margins be impacted that much by kind of a reduced revenue, or reduced volume in superfirst class? Are the margins that much different between the business jet -- the stuff you put in business jets and superfirst class?

AMIN KHOURY: We don't talk about the margins by different pieces of any segment, but I think what I'm trying to tell you is that our expectation is for continued revenue growth and margin expansion, and no unusual quarterly dips or increases.

OPERATOR: From the offices of American Technology Research, we go to Peter Arment.

PETER ARMENT, ANALYST, AMERICAN TECHNOLOGY RESEARCH: Yeah, nice quarter. Amin, could you quickly follow up on that relating to the seating segment? I guess the take-away here after a very strong quarter across the board is that this quarter was a, sort of a blip in terms of overall timing demand? I think generally speaking, you're going to see much stronger growth going forward.

AMIN KHOURY: Yes, it's more timing, of course, is part of it, but it's more the startup on some new programs, and our expectation is that this nice jump in revenues, even in the second quarter, and a nice improvement in operating margins beginning, beginning primarily in the second half of the year. I mean I want to point out that the seating segment operating margin has expanded by 590 basis points over the last three years, and 170 or 180 basis points last year alone. So a little dip in the quarter as we go through -- as we start up some new programs is to be expected and is not really of cause for concern.

PETER ARMENT: Great.

AMIN KHOURY: We've got a high quality backlog in the seating business, high end margin embedded products in the backlog, and so our expectation is for a nice jump in revenues beginning in the second quarter and some nice margin expansion beginning in the second half of the year.

OPERATOR: David Strauss from UBS. Thank you, good morning.

DAVID STRAUSS, ANALYST, UBS: Good morning. Amin, would you just -- Mike touched on this a little bit, but could you just kind of comment on where you think we are in terms of the retrofit cycle by region of the world, splitting it between premium and coach seating?

AMIN KHOURY: Well, I think Mike mentioned that at the Hamburg show, we had American, United, Delta, Continental, U.S. Air, Air Canada. I mean it was like a blowout and they were not there to kick tires. It was very, very serious conversation, and while the domestic carriers may not be able to buy new aircraft, there's only one business left for them, which is profitable. And that's the international portion of their business. And right now, they are losing market share. And so they don't really have any alternative, except to address the issue at least in their premium cabins, and to try to make their offerings competitive and try to maintain or win back some market share.

So there isn't any question but that the domestic carriers are becoming major orders at least for the aftermarket, for retrofit, for upgrades, for refurbs, for spares. I think Mike mentioned that in the quarter our U.S. revenue growth was even stronger than our international revenue growth. That's basically after-market driven.

DAVID STRAUSS: So would you say I guess kind of quantifying that, the international side, how far do you think international carriers are in terms, through in terms of their retrofit program on the premium side? I guess you're saying the U.S. side is basically just starting, but where is the international side, would you say?

AMIN KHOURY: RFP activity for international carriers for the premium cabins is very strong, very strong. There is a lot of continued interest and a lot of folks that haven't placed orders, and our expectation is this is a business that's going to continue indefinitely because of the size of the wide body fleet and its continued growth. By the time we get through this, the folks that have -- that we've already been delivering products to will be ready for the next, be ready for the next cycle. So we've got, we've got a lot of orders and backlog from large carriers. Example, Amoris, who are buying new airplanes and who are now moving the retrofit products into those new air crafts and we've got a lot of airlines that have bought retrofit products for existing -- for certain existing fleets, but not for others. So I mean we don't see a decline in demand for retrofit activity for the international carriers' premium cabins. We don't see it in the foreseeable future.

DAVID STRAUSS: Okay, great. Do you have any exposure at all to -- obviously kind of number of airlines domestically just declare bankruptcy. Do you have any exposure at all there?

AMIN KHOURY: Tom, you want to talk--?

TOM MCCAFFERY: We have some exposure to Frontier. We don't think it's an issue because of the timing of the shipments and the ability to file what's referred to as a reclamation claim. When you do that, you get put to the top of the list and you get paid the same time the bankruptcy lawyers get paid, so we feel pretty good about that. I think the recent announcement with respect to EOS, I don't think that there's anything outstanding in terms of receivables.

DAVID STRAUSS: Great. Thanks a lot, guys.

TOM MCCAFFERY: We've probably got time for one more call, because we promised to get everybody through this call before the market opens.

OPERATOR: Our final question comes from Patrick McCarthy, FBR Capital Markets.

PATRICK MCCARTHY, ANALYST, FBR CAPITAL MARKETS: Hi, good morning. Thanks for taking my call. I was wondering if you could just take a second and characterize the domestic backlog? Has it expanded much beyond your two primary customers? I know you mentioned Air Canada as being representative at Hamburg, but anything else?

AMIN KHOURY: Well, Air Canada would not be in the domestic backlog. Most of what's in the domestic backlog is retrofit programs, overwhelmingly, it's retrofit programs.

PATRICK MCCARTHY: And is it -- could you talk about how deep you are into--?

AMIN KHOURY: Hold on. That's the domestic airline backlog, right? And we have a lot of backlog, domestic backlog, which is not U.S. carriers, right?

PATRICK MCCARTHY: Sure.

AMIN KHOURY: The amount of U.S. carriers is 12% and that's primarily retrofit, and refurb orders.

PATRICK MCCARTHY: Could you talk about, potentially how deep you are into the United retrofit program from a production perspective?

AMIN KHOURY: We're just getting started.

PATRICK MCCARTHY: Okay, thanks.

TOM MCCAFFERY: Okay. That was our last question this morning. We appreciate all of you joining us this morning for the call and as always, we're available for follow-up. So please feel free to give me a call.

AMIN KHOURY: Thanks, everybody. Have a good day.

OPERATOR: Ladies and gentlemen, this concludes today's BE Aerospace conference call. Thank you all for participating in the call, and have a good day.

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