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Hawker Beechcraft Corporation

Hawker Beechcraft Corporation is a leading business, special-mission and trainer aircraft manufacturer, designing, marketing and supporting aviation products and services for businesses, governments and individuals worldwide. Hawker Beechcraft Corporation is a world-leading manufacturer of business, special-mission and trainer aircraft - designing, marketing and supporting aviation products and services for businesses, governments and individuals worldwide. The company's headquarters and major facilities are located in Wichita, Kansas, with operations in Salina, Kansas; Little Rock, Arkansas; and Chester, England, U.K. The company leads the industry with a global network of more than 100 factory-owned and authorized service centers.

The company markets its products under the Hawker and Beechcraft brand names. The Hawker product line comprises jets, including the Hawker 4000, the industry's second all-composite fuselage business jet, as well as the Hawker 850XP, the Hawker 900XP and the Hawker 400XP, a popular light jet. The Beechcraft product line includes the Premier 1A, which is the first Federal Aviation Administration certified all-composite fuselage business jet, the King Air family, which is the best-selling twin-turboprop line, and the Bonanza and Baron, well recognized names in the premium single- and twin-engine piston markets. In addition, Hawker Beechcraft is the sole provider of the primary military trainer aircraft, the T-6A Texan II, to the U.S. Air Force and U.S. Navy. The company was formerly a division of Raytheon Company.

Raytheon announced in July 2006 that it was reviewing strategic alternatives for Raytheon Aircraft Company, a world leading manufacturer of business and special-mission aircraft, providing a wide variety of aviation products and services for businesses, governments and individuals. RAC has more than 8,500 employees and has approximately 100 authorized service centers worldwide. Raytheon Aircraft, which derives a substantial majority of its revenues from the sale of business aircraft to commercial customers, was Raytheon's only principal business that was not predominantly a government defense business.

On Dec. 21, 2006 Raytheon announced that it had signed a definitive agreement to sell its wholly owned subsidiary Raytheon Aircraft Company (RAC) to Hawker Beechcraft Corporation, a new company formed by GS Capital Partners, an affiliate of Goldman Sachs, and Onex Partners. The Company also announced that, subject to the closing of this transaction, its Board of Directors has approved further debt reduction and an increase in the Company's stock repurchase authorization. The Company sold RAC for approximately $3.3 billion and expected net after-tax proceeds to be approximately $2.5 billion.

Founded in 1869, Goldman Sachs is one of the oldest and largest investment banking firms. Goldman Sachs is also a global leader in private corporate equity and mezzanine investing. Established in 1991, the GS Capital Partners Funds are part of the firm's Principal Investment Area in the Merchant Banking Division. Goldman Sachs' Principal Investment Area has formed 12 investment vehicles aggregating $35 billion of capital to date.

Onex had pursued a value-oriented investment style that has generated an IRR of 29% on realized and publicly traded investments. Since 1984, the Onex team has pursued a value-oriented approach to its private equity investing. This strategy has returned 3.5x invested capital and generated a 29% IRR on realized and publicly traded investments over 24 years. This value-orientation is reflected in a disciplined approach to purchase price and leverage. During 2007, Onex Partners invested over $2.6 billion of equity at an average purchase price multiple of 7x and with debt of 4.8x EBITDA - during this same period, the private equity industry saw average purchase price multiples of 10x and debt of 6.2x EBITDA. Beginning with the establishment of Onex Partners in 2003, Onex evolved its business model from direct investment to that of co-investor through private equity and alternative asset funds that it manages. Deep expertise in aerospace, healthcare and industrials provides Onex with a meaningful advantage in sourcing, diligencing and adding value to investments in these industries.

Onex Partners is the Onex flagship private equity investment platform. Onex Partners focuses on large-scale, value-oriented acquisitions of leading businesses based in North America. Onex Partners I started in November 2003 with US$1.655 billion, of which US$400 million was committed by Onex. Onex Partners I was substantially invested by November 2006, with 10 completed acquisitions. At September 30, 2008, the fund had achieved an IRR of 93% and returned 4.1x invested capital since inception, based on realized and publicly traded investments. Onex Partners II started in August 2006 with US$3.45 billion, of which US$1.4 billion was committed by Onex. At December 31, 2007, Onex Partners II was approximately 75 percent invested, with more than US$2.5 billion of capital at work in six investments, including Hawker Beechcraft.

On March 26, 2007, Raytheon Aircraft Company became Hawker Beechcraft Corporation, a company formed by GS Capital Partners, an affiliate of Goldman Sachs,and Onex Partners, beginning the next great chapter of two of aviation's most enduring brands. Raytheon Company completed the sale of its wholly owned subsidiary Raytheon Aircraft Company (RAC) for $3,318 million in gross proceeds, which resulted in net proceeds of $3,117 million. The primary difference between the gross and net proceeds was a $131 million final purchase price adjustment for cash retained through the closing of the transaction. The sale was first announced on December 21, 2006. The transaction included Raytheon Aircraft facilities and other assets in Wichita and Salina, Kansas; Little Rock, Arkansas; Dallas, Texas; as well as its Fixed Based Operations (FBO) network across the United States, the United Kingdom and Mexico.

On August 24, 2007, Hawker Beechcraft Corporation achieved certification of the newest aircraft in the Hawker family, the Hawker 900XP. The aircraft is the latest evolution of the world's best-selling, mid-size Hawker 800-series. It is part of a strategically planned sequence of upgrades for the Hawker fleet of airplanes. New Honeywell TFE-731-50R engines give the airplane up to 2,800 nm range. On October 25, 2007, HBC officially opened its new aerospace manufacturing facility in Chihuahua, Mexico to enhance its competitive position in the world market and develop a reliable supply base to support the current and future needs of its Wichita facility.



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