1396426--2/28/2008--HAWKER_BEECHCRAFT_ACQUISITION_CO

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Risks Relating to Our Business Because our Predecessor s historical financial information may not be representative of our results as a separate company, there is limited financial information on which to evaluate our business and an investment decision. Our results of operations and financial condition could be adversely affected by a downturn in the general aviation and other aircraft markets or the general economic environment. The investment of our cash balance is subject to risks which may cause losses and affect the liquidity of these investments. Inclement weather conditions during the last quarter of the calendar year, when we typically have our peak deliveries, could adversely affect our financial results A significant decline in business with NetJets could adversely affect our business and financial results. Our JPATS contracts expose us to the inherent risks of fixed price contracting, and future contracts under the JPATS program are not guaranteed. We operate in a very competitive business environment. We are at risk of losses and adverse publicity stemming from any accident involving aircraft for which we hold design authority. The outcome of litigation in which we have been named as a defendant is unpredictable and an adverse decision in any such matter could have a material adverse effect on our financial position, results of operations and liquidity. We incur risks associated with our aircraft programs. Our operations depend on our ability to maintain continuous, uninterrupted production at our manufacturing facilities. Our production facilities are subject to physical and other risks that could disrupt production. Any significant disruption in our supply from key vendors could delay production and adversely affect our sales. Increases in labor costs, potential labor disputes and work stoppages at our facilities could materially adversely affect our financial performance. Our business will suffer if we are unable to recruit and retain highly skilled staff. We are subject to government regulation, and our business may be materially adversely affected if we lose our government, regulatory or industry approvals, if more stringent government regulations are enacted or if industry oversight is increased. We are subject to regulation of our technical data and goods under U.S. export control laws. We are subject to strict environmental laws and regulations that may lead to significant, unforeseen expenses. We derive a significant portion of our revenues from direct and indirect sales outside the United States and are subject to the risks of doing business in foreign countries. We are subject to fluctuations in the rate of exchange between U.S. dollars and foreign currencies, particularly U.K. pound sterling. We accept used aircraft as trade-ins from our customers and may be required to accept trade-ins at a financial loss. We must assess the value of used aircraft and aircraft materials and parts, which requires significant judgment, and changes in the value of such items could adversely affect our future financial results. Our business could be adversely affected by a negative audit by the U.S. Government. We use estimates in accounting for certain contracts and changes in our estimates could adversely affect our financial results Our business operations could be negatively impacted if we fail to adequately protect our intellectual property rights or if third parties claim that we are in violation of their intellectual property rights. Efforts to comply with the Sarbanes-Oxley Act will involve significant expenditures, and non-compliance with the Sarbanes-Oxley Act may adversely affect us. We are a holding company. Risks Related to Our Indebtedness Our substantial level of indebtedness could adversely affect our business, financial condition or results of operations and prevent us from fulfilling our obligations under the notes. Despite our current indebtedness level, we and our subsidiaries may still be able to incur substantially more debt, which could exacerbate the risks associated with our substantial indebtedness. Our debt instruments, including the indentures governing the notes and our senior secured credit facilities, impose significant operating and financial restrictions on us. If we default under any of these debt instruments, we may not be able to make payments on the notes. Certain private equity investment funds affiliated with GS Capital Partners VI, L.P. and Onex Partners II LP own a significant majority of our equity, and their interests may not be aligned with our note holders or creditors. An active public market may not develop for the notes, which may hinder the ability of note holders to liquidate their investment.

Full 10-K form ▸

1396426--2/28/2008--HAWKER_BEECHCRAFT_ACQUISITION_CO_LLC