Gabelli

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Gabelli Company 10th Annual Aircraft Supplier
Conference September 9, 2004

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Forward Looking Statements
Except for statements of historical fact, the
statements contained in this document are
forward-looking statements as such term is
defined in the Private Securities Litigation
Reform Act of 1995. These forward-looking
statements include statements regarding intent,
belief or current expectations of the Company and
its management. Such forward-looking statements
are not guarantees of future performance and
involve a number of risks and uncertainties that
may cause the Companys actual results to differ
materially from those indicated by such
forward-looking statements. The factors that
could cause actual results to differ materially
from those indicated by such forward-looking
statements include loss of key suppliers or
significant customers, termination or curtailment
of material contracts, changes in demand or
prevailing market prices for products and
services, changes in economic conditions,
increased competition, failure to execute or
realize anticipated benefits from agreements,
changes in our business strategy or development
plans, changes in government regulations and
policies, limited operational flexibility due to
leverage and changes in the aviation industry due
to terrorist attacks.
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Company Overview
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Aviall Today
Inventory Locator Service (ILS)
Aviall Services
97 of Aviall, Inc. sales 87 of EBITDA
3 of Aviall, Inc. sales 13 of EBITDA

• Largest independent global provider of new parts
  and supplies to the aerospace aftermarket
• Global market coverage
• DFW central warehouse
• 35 stocking locations
• 17,000 customers
• 215 OEM Suppliers

• Leading independent electronic marketplace for
  aerospace parts equipment services
• Information business
• 25 years of profitable market leadership and
  expertise
• Independent market-maker

Note EBITDA contribution excludes corporate
expenses.
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Aviall Is the Clear Market Leader
2003 Net Sales(1)
( in millions)
gt7x the competition
(1) Based on sales for Aviall Services only and
estimated new parts sales for Satair (excluding
hardware), First Aviation and AAR per Aviall
management estimate.
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Industrys Most Extensive New Product Basket
More than 400,000 unique line items that fit in
a box from a single source

• Antennas
• Batteries and chargers
• Brakes
• Cleaning/coating/degreasers/corrosion protection
  products
• Deicing/Anti-icing products (ground)
• Emergency and survival equipment
• Fuel tanks, adapters and other equipment
• Generators/alternators/ignitions
• Ground power units/towing equipment
• Hardware/fasteners
• Headsets and microphones
• Heaters and preheaters
• Hoses (fuel, hydraulic, pneumatic)
• Intercoms and inverters

• Lighting components
• NDT equipment/supplies
• Oil and lubricant
• Oxygen equipment
• Paint/paint strippers
• Personal restraint systems
• Piston engines/engine components
• Pressure and temperature sensors
• Starters
• Tires and tubes
• Turbine engine components
• Turbine fuel controls
• Wheels
• Windshield and side windows

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Diverse Customer Base
2003 Net Sales by Market Segment
Diversified Customer Base

• Military / Government
• General Aviation / Corporate
• Commercial Airlines
• Regional Airlines
• Brokers

General Aviation / Corporate 26
Government / Military 53
Customers Include

• Fixed Base Operators
• Airlines
• Repair and Overhaul Shops
• Department of Defense
• Foreign Militaries
• Other U.S. Government Users (Coast Guard, etc.)

CommercialAirline 21
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Avialls Business Platform Drives Value Through
Operating Leverage
Substantial Sales Gains
Scalable Infrastructure
Sustainable Profit Growth
Sales Growth 1999 2003 ( in millions)
SA Expense as of Sales 1999 2003 ( in
millions)
EBITDA Growth 1999 2003 ( in millions)
CAGR 28
999 bps decrease
CAGR 43
Avialls sophisticated and scalable
infrastructure provides a framework for
substantial earnings growth.
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Compelling Value Proposition for OEMs
Aviall Increases Aftermarket Sales for OEMs
Example of Recent Contract Results

• Global presence reaches more customers at lower
  cost
• Parts availability replaces non-OEM repairs and
  PMA parts
• Higher customer service levels increases
  purchases of OEM parts

Aviall takes over
Aviall Reduces Cost and Invested Capitalfor OEMs

• Superior demand forecasting enhances OEM
  production planning and reduces inventory
• OEM working capital investment greatly reduced
• Disciplined market intelligence gathering assists
  in competitive performance assessment

Service Level lt60 99 Backlog 15 lt2
OEM achieves higher sales, lower costs and a
higher return on capital
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Key Contracts T56 Engine Product Line

• Primarily used on C-130 military transports
• Contract awarded December, 2001 extends through
  2011
• Active installed base of over 8,000 engines with
  military and commercial aircraft in over 70
  countries
• Net sales (80 govt / military)
• 2001 (prior to Aviall) 200 million
• 2002 RR Forecast gt250 million
• 2002 Actual gt345 million
• 2003 Actual gt450 million
• U.S. Military currently projects T56 engine
  operations through 2040

Images courtesy of Phillip Ackley
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Key Contracts Honeywell Lighting and Electrical
(Grimes)

• Approximately 50 million per annum
• 10-year agreement
• Contract beganOctober 1, 2003
• Sales split expected to be 60 airline / 40 GA
• Leading example of execution driving new wins

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Significant Barriers to Entry

• Barriers to Entry

• Regulatory Requirements

Aviall Know-How
Global Infrastructure / Global Reach
Strong Supplier and Customer Relationships
Technological Leadership
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Global Infrastructure / Global Reach
Europe AmsterdamStocking Location14 sales
professionals
Asia Hong Kong Singapore Stocking Location25
sales professionals
The Americas Dallas Headquarters27 Stocking
Locations202 sales professionals
Australia/New Zealand 7 Stocking Locations32
sales professionals
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Strong Supplier Relationships

• Strong relationships, and an outstanding
  reputation, with the leading aerospace OEMs
• Currently represent more than 215 OEMs
• More than 60 of sales from long-term, exclusive
  contracts

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Best in Class Software
Order Entry Sales Force Automation Sales Force
Integration
Purchase on the Web Web Customer Services Web
Supplier Services

• Real-Time Integration

Siebel
BroadVision
Sybase NEON
Lawson General Ledger AR/AP HR/Payroll
Sybase NEON
Sybase NEON
Xelus
Catalyst

• Large Scale I.T. Investment Completed

Inventory Control Warehouse Management
Product Allocation Inventory Management Purchasing
/Forecasting
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ILS Is the Leading Aerospace Electronic
Marketplace

• Consistent revenue base
• Stable, high margin business
• Pioneer of e-commerce
• Operating computerized database since 1979
• Over 4,000 organizations subscribe with more than
  10,000 users
• 55 million line items representing over 5 billion
  parts

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Positive Outlook for End-Markets
DoD OM Budget
( in billions)
CAGR 5.4
Source U.S. Department of Defense. Not
inflation adjusted.
US Airlines Available Seat Miles
General Aviation Fuel Consumption
(Gallons in millions)
CAGR 5.8
Source General Aviation Manufacturers
Association.
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Avialls Large, Addressable Market Provides Ample
Room for Growth
2000
Today
( in millions)
( in millions)
3.0x 2000
2.2x 2000
(1)
(2)
(1)
(2)
(1) Based on 2003A includes Aviall Services
only. (2) Market estimates per Aviall management.
Avialls demonstrated performance with large OEMs
has significantly expanded its addressable
market.
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Financial Overview
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Demonstrated Track Record of Performance
Net Sales(1)
Gross Profit
( in millions)
( in millions)
CAGR 28
(1) 2002 pro forma for 74 million in direct
sales by Rolls-Royce in H1 2002.
EBITDA(1)
Selling Administrative Expense
( in millions)
( in millions)
CAGR 43
(1) EBITDA definition and reconciliation in
Appendix A.
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Focus on Continuous Improvement in Key Metrics .
. .
Excess and Obsolete Inventory(1)
Variable Working Capital Efficiency
230bps decline
(1) As a of total inventory.
Note See definition of Variable Working Capital
in Appendix.
Inventory Turns
SA Expense as of Sales
Model 250 Contract
Model 250 Contract
T56Contract
T56Contract
2002
2002
Note Inventory Turns COGS / Inventory.
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. . . And Operational Excellence

• Aviall has aggressively grown the business, while
  maintaining gt99.9 on-time shipment rates
• 80 of units sold in 2003 were under 300 focus
  on high volume, lower cost parts

Line Items Shipped per Month
Average Sales per Shipment
(Units)
CAGR 8.3
Note Represents Aviall Services, Inc. only.
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Strong Balance Sheet Significant Liquidity
( in millions)

• We define Variable Working Capital as accounts
  receivable plus inventories less accounts payable
  (excluding cash overdrafts)

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Investment Highlights

• 1 Independent Provider of Aftermarket Aerospace
  Parts
• Compelling Value Proposition to OEM Suppliers and
  End Users
• Diversified Customer Base Broad Product
  Offering
• Significant Barriers to Entry Global Reach,
  Relationships, Technology
• Positioned for Continued Strong Growth
• Demonstrated Track Record of Financial
  Performance
• Experienced and Proven Management Team

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Appendix
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Definitions
We define Variable Working Capital as accounts
receivable plus inventories less accounts
payable. In no event should Variable Working
Capital be considered as an alternative to
working capital or any other GAAP measure as an
indicator of our performance, nor should Variable
Working Capital be considered as an alternative
to working capital as an indicator of our
relative liquidity to meet our obligations within
an ordinary business cycle. We believe that
Variable Working Capital is a useful measure,
along with measurements under GAAP, in evaluating
our financial performance and our ability to
leverage sales and earnings. In addition, we use
Variable Working Capital as a financial measure
to evaluate our management of working capital and
as a metric to measure contract and supplier
performance. The following table reconciles
Variable Working Capital to working capital for
the periods presented
Variable Working Capital
We define Variable Working Capital as accounts
receivable plus inventories less accounts payable
(excluding cash overdrafts). In no event should
Variable Working Capital be considered as an
alternative to working capital or any other GAAP
measure as an indicator of our performance, nor
should Variable Working Capital be considered as
an alternative to working capital as an indicator
of our relative liquidity to meet our obligations
within an ordinary business cycle. We believe
that Variable Working Capital is a useful
measure, along with measurements under GAAP, in
evaluating our financial performance and our
ability to leverage sales and earnings. In
addition, we use Variable Working Capital as a
financial measure to evaluate our management of
working capital and as a metric to measure
contract and supplier performance. The
following table reconciles Variable Working
Capital to working capital for the periods
presented
( in thousands)
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Definitions (contd)
EBITDA
  EBITDA represents earnings from continuing
operations before depreciation, amortization,
interest and related expense and tax expense. In
2003 and 2001, interest and related expense
includes the loss on extinguishment of debt of
17.3 million and 1.6 million, respectively, in
connection with refinancing our debt. In no
event should EBITDA be considered as an
alternative to net earnings or any other GAAP
measure as an indicator of our performance, nor
should EBITDA be considered as an alternative to
cash flows provided by operating activities as an
indicator of cash flows or a measure of
liquidity. We believe that EBITDA is a useful
measure, along with measurements under GAAP, in
evaluating our financial performance and our
ability to service our debt and is a
conventionally used financial indicator. In
addition, management uses EBITDA as a financial
measure to evaluate our operating performance.
The following table reconciles net earnings to
EBITDA for the periods presented  
( in thousands)