##### Table of Contents



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
 For the quarterly period ended September 25, 2005
 Or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
 For the transition period from            to
 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)9314 West Jefferson Boulevard M/S
2-01 Dallas, TX
    
    75211(Address of Principal executive offices)
    
    (Zip Code)
 (972)-946-2011
(Registrants telephone number, including area code)
 þ o
 o þ
 o þ




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TABLE OF CONTENTS
 PagePART I  FINANCIAL INFORMATIONItem 1. Financial StatementsCondensed Consolidated Balance Sheets as of September 25, 2005 and December 31, 2004 (unaudited)
    
    
    1Condensed Consolidated Statements of Operations for the three months and nine months ended September 25, 2005 and September 26, 2004 (unaudited)
    
    
    2Condensed Consolidated Statements of Cash Flows for the nine months ended September 25, 2005, and September 26, 2004 (unaudited)
    
    
    3Notes to Condensed Consolidated Financial Statements (unaudited)
    
    
    4Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    19Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    25Item 4. Controls and Procedures
    
    
    26PART II  OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    27Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    27Item 3. Defaults Upon Senior Securities
    
    
    27Item 4. Submission of Matters to a Vote of Security Holders
    
    
    27Item 5. Other Information
    
    
    28Item 6. Exhibits
    
    
    29Signatures
    
    
    30Agreement between Vought & Kenneth W. CannestraAgreement between Vought & Thomas CorcoranAgreement between Vought & Gordon WilliamsAgreement between Vought and William McMillanAgreement between Vought and William J. McKennaCertification of CEO Pursuant to Section 302Certification of CFO Pursuant to Section 302Certification of CEO Pursuant to Section 906Certification of CFO Pursuant to Section 906




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##### Table of Contents



PART 1. FINANCIAL INFORMATION
 
 ITEM 1. FINANCIAL STATEMENTS
 Vought Aircraft Industries, Inc.
 
 Condensed Consolidated Balance Sheets
 ($ in millions) (Unaudited)
 September 25,
    
    
    December 31,2005
    
    
    2004AssetsCurrent assets:Cash and cash equivalents
    
    $
    117.1
    
    
    $
    128.9Accounts receivable
    
    
    92.2
    
    
    
    123.2Inventories
    
    
    330.0
    
    
    
    279.3Other current assets
    
    
    7.6
    
    
    
    7.2Total current assets
    
    
    546.9
    
    
    
    538.6Property, plant and equipment, net
    
    
    436.8
    
    
    
    407.7Goodwill, net
    
    
    527.7
    
    
    
    527.7Identifiable intangible assets, net
    
    
    83.4
    
    
    
    91.5Debt origination costs, net and other assets
    
    
    24.4
    
    
    
    23.5Total assets
    
    $
    1,619.2
    
    
    $
    1,589.0Liabilities and stockholders deficitCurrent liabilities:Accounts payable, trade
    
    $
    104.5
    
    
    $
    100.7Accrued and other liabilities
    
    
    71.8
    
    
    
    90.0Accrued payroll and employee benefits
    
    
    47.3
    
    
    
    51.4Accrued post-retirement benefits-current
    
    
    57.3
    
    
    
    57.3Accrued pension-current
    
    
    40.9
    
    
    
    27.2Current portion of long-term bank debt
    
    
    4.0
    
    
    
    4.0Capital lease obligation
    
    
    0.8
    
    
    
    0.9Accrued contract liabilities
    
    
    276.7
    
    
    
    142.0Total current liabilities
    
    
    603.3
    
    
    
    473.5Long-term liabilities:Accrued post-retirement benefits
    
    
    494.4
    
    
    
    486.9Accrued pension
    
    
    448.9
    
    
    
    420.7Long-term bank debt, net of current portion
    
    
    419.0
    
    
    
    421.0Long-term bond debt
    
    
    270.0
    
    
    
    270.0Long-term capital lease obligation
    
    
    1.4
    
    
    
    2.0Other non-current liabilities
    
    
    150.9
    
    
    
    69.4Total liabilities
    
    
    2,387.9
    
    
    
    2,143.5Stockholders deficit:Common stock, par value $.01; 50,000,000
shares authorized, 25,009,952 and
25,015,552 issued and outstanding in 2005
and 2004, respectively
    
    
    0.3
    
    
    
    0.3Additional paid-in capital
    
    
    417.9
    
    
    
    418.0Shares held in rabbi trust
    
    
    (1.7
    )
    
    
    (1.9
    )Stockholders loans
    
    
    (2.2
    )
    
    
    (2.3
    )Accumulated deficit
    
    
    (588.8
    )
    
    
    (374.4
    )Accumulated other comprehensive loss
    
    
    (594.2
    )
    
    
    (594.2
    )Total stockholders deficit
    
    $
    (768.7
    )
    
    $
    (554.5
    )Total liabilities and stockholders deficit
    
    $
    1,619.2
    
    
    $
    1,589.0
 See accompanying notes
 1




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Vought Aircraft Industries, Inc.
 
 Condensed Consolidated Statements of Operations
 ($ in millions) (Unaudited)
 For the Three Months
    
    
    For the Nine MonthsEnded
    
    
    EndedSeptember
    
    
    September
    
    
    September
    
    
    September25, 2005
    
    
    26, 2004
    
    
    25, 2005
    
    
    26, 2004Net sales
    
    $
    310.4
    
    
    $
    295.3
    
    
    $
    937.2
    
    
    $
    884.4Costs and expensesCost of sales
    
    
    274.3
    
    
    
    262.5
    
    
    
    884.7
    
    
    
    745.7Selling, general and administrative expenses
    
    
    77.1
    
    
    
    64.4
    
    
    
    222.4
    
    
    
    190.1Asset impairment
    
    
    
    
    
    
    
    
    
    
    5.9
    
    
    
    Total costs and expenses
    
    
    351.4
    
    
    
    326.9
    
    
    
    1,113.0
    
    
    
    935.8Operating loss
    
    
    (41.0
    )
    
    
    (31.6
    )
    
    
    (175.8
    )
    
    
    (51.4
    )Other income (expense)Interest income
    
    
    1.2
    
    
    
    0.7
    
    
    
    2.8
    
    
    
    1.8Equity in earnings (loss) of joint venture
    
    
    (1.0
    )
    
    
    
    
    
    
    (1.8
    )
    
    
    Other loss
    
    
    (0.3
    )
    
    
    
    
    
    
    (0.4
    )
    
    
    Interest expense
    
    
    (14.1
    )
    
    
    (10.7
    )
    
    
    (38.9
    )
    
    
    (30.5
    )Loss before income taxes
    
    
    (55.2
    )
    
    
    (41.6
    )
    
    
    (214.1
    )
    
    
    (80.1
    )Income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net loss
    
    $
    (55.2
    )
    
    $
    (41.6
    )
    
    $
    (214.1
    )
    
    $
    (80.1
    )
 See accompanying notes
 2




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Vought Aircraft Industries, Inc.
 
 Condensed Consolidated Statements of Cash Flows
 ($ in millions) (Unaudited)
 For the Nine Months EndedSeptember
    
    
    September25, 2005
    
    
    26, 2004Operating activitiesNet loss
    
    $
    (214.1
    )
    
    $
    (80.1
    )Adjustments to reconcile net loss to net cash provided by operating activities:Depreciation and amortization
    
    
    54.7
    
    
    
    67.0Asset impairment
    
    
    5.9
    
    
    
    Loss from asset sales
    
    
    4.7
    
    
    
    1.6Changes in current assets and liabilities:Accounts receivable
    
    
    31.0
    
    
    
    (25.6
    )Inventories, net of advances and progress billings
    
    
    (50.7
    )
    
    
    (20.4
    )Other current assets
    
    
    (0.4
    )
    
    
    0.3Accounts payable, trade
    
    
    3.8
    
    
    
    27.3Accrued payroll and employee benefits
    
    
    (4.1
    )
    
    
    0.5Accrued and other liabilities
    
    
    (4.6
    )
    
    
    (9.1
    )Accrued contract liabilities
    
    
    134.7
    
    
    
    19.8Other assets and liabilitieslong-term
    
    
    39.3
    
    
    
    44.1Net cash provided by operating activities
    
    
    0.2
    
    
    
    25.4Investing activitiesAdvances to
joint venture
    
    
    (3.2
    )
    
    
    Capital expenditures
    
    
    (84.0
    )
    
    
    (29.5
    )Net cash used in investing activities
    
    
    (87.2
    )
    
    
    (29.5
    )Financing activitiesPayments on long-term bank debt
    
    
    (2.0
    )
    
    
    Payments on capital leases
    
    
    (0.6
    )
    
    
    (1.3
    )Proceeds from Hawthorne
    
    
    52.6
    
    
    
    Proceeds
from governmental grants
    
    
    25.3
    
    
    
    35.0Retirement of common stock
    
    
    (0.3
    )
    
    
    Decrease in shareholder loans
    
    
    0.1
    
    
    
    Proceeds from sale of common stock
    
    
    0.1
    
    
    
    Net cash provided by financing activities
    
    
    75.2
    
    
    
    33.7Net increase (decrease) in cash and cash equivalents
    
    
    (11.8
    )
    
    
    29.6Cash and cash equivalents at beginning of period
    
    
    128.9
    
    
    
    106.4Cash and cash equivalents at end of period
    
    $
    117.1
    
    
    $
    136.0
 See accompanying notes
 3




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VOUGHT AIRCRAFT INDUSTRIES, INC.
 
 Notes to Condensed Consolidated Financial Statements
 (Unaudited)
 September 25, 2005
 Note 1  Organization and Basis of Presentation
     Note 2  New Accounting Pronouncements
 Inventory Costs
 Share-Based Payment Accounting for Stock-Based Compensation Accounting for Stock Issued to Employees Statement of Cash Flows
 4




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Accounting Changes and Error Corrections Accounting Changes Reporting Accounting Changes in
Interim Financial Statements
 Note 3  Stock-Based Compensation
 Accounting for Stock Based Compensation
 Three months ended
    
    
    Nine months endedSeptember
    
    
    September
    
    
    September
    
    
    September25, 2005
    
    
    26, 2004
    
    
    25, 2005
    
    
    26, 2004($ in millions)Reported net loss
    
    
    ($55.2
    )
    
    
    ($41.6
    )
    
    
    ($214.1
    )
    
    
    ($80.1
    )Stock based compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (55.2
    )
    
    
    (41.6
    )
    
    
    (214.1
    )
    
    
    (80.1
    )Compensation expense per SFAS No. 123
    
    
    (0.5
    )
    
    
    (0.2
    )
    
    
    (1.5
    )
    
    
    (0.5
    )Pro forma net loss for SFAS No. 123
    
    
    ($55.7
    )
    
    
    ($41.8
    )
    
    
    ($215.6
    )
    
    
    ($80.6
    )
  Note 4  Restructuring
  5




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Accrued RestructuringReserve - Stuart andNashville Sites($ in millions)Balance December 31, 2003
    
    $
    Restructuring liabilities recognized
    
    
    7.7Expenditures
    
    
    (0.4
    )Balance December 31, 2004
    
    
    7.3Liabilities recognized for the nine months ended
September 25, 2005
    
    
    1.7Expenditures for the nine months ended September 25, 2005
    
    
    (0.6
    )Balance September 25, 2005
    
    $
    8.4
 Pension and Other Post-retirement Benefits
   6




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Accrued RestructuringReserve Perry Site($ in millions)Balance December 31, 2003
    
    $
    9.5Cash expenditures
    
    
    (1.9
    )Balance December 31, 2004
    
    $
    7.6Cash
expenditures for the nine months ended
September 25, 2005
    
    
    (1.3
    )Balance September 25, 2005
    
    $
    6.3
 Note 5  Inventories
  September 25,
    
    
    December 31,2005
    
    
    2004($ in millions)Production costs of contracts in process
    
    $
    499.6
    
    
    $
    434.9Finished goods
    
    
    50.2
    
    
    
    21.4Less: unliquidated progress payments
    
    
    (219.8
    )
    
    
    (177.0
    )Total inventories
    
    $
    330.0
    
    
    $
    279.3
 Recent Events Item 2 Managements Discussion and Analysis of Financial Condition and
Results of Operations.
 Note 6  Goodwill and Intangible Assets
 Goodwill and Other Intangible Assets
 8




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September 25,
    
    
    December 31,2005
    
    
    2004($ in millions)Programs and contracts
    
    $
    137.3
    
    
    $
    137.3Pension asset
    
    
    20.7
    
    
    
    20.7Less: accumulated amortization
    
    
    (74.6
    )
    
    
    (66.5
    )Identifiable intangible assets, net
    
    $
    83.4
    
    
    $
    91.5
  ($ in millions)2005
    
    $
    2.72006
    
    
    10.82007
    
    
    10.02008
    
    
    8.92009
    
    
    8.9Thereafter
    
    
    21.4$
    62.7
 Note 7  Pension and Other Post-retirement Benefits
  Three
    
    
    ThreeMonths
    
    
    Months
    
    
    Nine Months
    
    
    Nine MonthsEnded
    
    
    Ended
    
    
    Ended
    
    
    EndedSeptember
    
    
    September
    
    
    September
    
    
    SeptemberPension Benefits
    
    25, 2005
    
    
    26, 2004
    
    
    25, 2005
    
    
    26, 2004($ in millions)Components of net periodic benefit
cost (income):Service cost
    
    $
    8.0
    
    
    $
    7.3
    
    
    $
    24.0
    
    
    $
    21.9Interest cost
    
    
    25.9
    
    
    
    25.3
    
    
    
    77.5
    
    
    
    75.6Expected return on plan assets
    
    
    (29.2
    )
    
    
    (30.2
    )
    
    
    (87.6
    )
    
    
    (90.4
    )Amortization of (gains) or losses
    
    
    13.4
    
    
    
    9.2
    
    
    
    40.4
    
    
    
    27.7Prior service cost recognized
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9.6Amortization of prior service cost
    
    
    0.8
    
    
    
    
    
    
    
    2.4
    
    
    
    0.1Plan curtailment (gain)/loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (12.7
    )Special termination benefits
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10.7Net periodic benefit cost
    
    $
    18.9
    
    
    $
    11.6
    
    
    $
    56.7
    
    
    $
    42.5Defined contribution plan cost
    
    $
    1.7
    
    
    $
    1.5
    
    
    $
    5.2
    
    
    $
    5.1
 9




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Three
    
    
    ThreeMonths
    
    
    Months
    
    
    Nine Months
    
    
    Nine MonthsEnded
    
    
    Ended
    
    
    Ended
    
    
    EndedSeptember
    
    
    September
    
    
    September
    
    
    SeptemberOther Post-retirement Benefits
    
    25, 2005
    
    
    26, 2004
    
    
    25, 2005
    
    
    26, 2004($ in millions)Components of net periodic benefit
cost (income):Service cost
    
    $
    1.8
    
    
    $
    1.9
    
    
    $
    5.5
    
    
    $
    5.0Interest cost
    
    
    9.6
    
    
    
    9.9
    
    
    
    29.0
    
    
    
    29.0Expected return on plan assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Prior service cost recognized
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.2
    )Amortization of prior service cost
    
    
    0.7
    
    
    
    0.7
    
    
    
    1.9
    
    
    
    1.8Amortization of net (gain)/loss
    
    
    2.7
    
    
    
    0.6
    
    
    
    8.1
    
    
    
    1.5Plan curtailment (gain)/loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11.7Special termination benefits
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2.6Net periodic benefit cost
    
    $
    14.8
    
    
    $
    13.1
    
    
    $
    44.5
    
    
    $
    51.4
   Note 8  Commitments
 Warranty Reserves.
 WarrantyReserve($ in millions)Balance at December 31, 2003
    
    $
    10.6Warranty costs incurred
    
    
    (0.3
    )Additions charged to cost of sales:Warranties issued
    
    
    1.5Charges related to pre-existing warranties
    
    
    (1.6
    )$
    10.2Balance at December 31, 2004Warranty costs incurred
    
    
    (0.5
    )Additions charged to cost of sales:Warranties relieved
    
    
    (1.7
    )Reversal of charges related to pre-existing warranties
    
    
    0.1Balance at September 25, 2005
    
    $
    8.1
 10




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Note 9  Environmental Costs
    11




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EnvironmentalLiability($ in millions)Balance at December 31, 2003
    
    $
    8.5Environmental costs incurred
    
    
    (2.7
    )Balance at December 31, 2004
    
    
    5.8Environmental costs incurred for the nine months
ended September 25, 2005
    
    
    (1.5
    )Balance at September 25, 2005
    
    $
    4.3
 Note 10  Related Party Transactions
  Note 11   Guarantor Subsidiaries
  12




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Consolidating Balance Sheet
September 25, 2005
($ in millions) (Unaudited)
 Guarantor
    
    
    IntercompanyVought
    
    
    Subsidiary
    
    
    Eliminations
    
    
    TotalAssetsCurrent assets:Cash and cash equivalents
    
    $
    116.8
    
    
    $
    0.3
    
    
    $
    
    
    
    $
    117.1Accounts receivable
    
    
    81.0
    
    
    
    11.2
    
    
    
    
    
    
    
    92.2Intercompany receivable
    
    
    13.0
    
    
    
    2.5
    
    
    
    (15.5
    )
    
    
    Inventories
    
    
    317.5
    
    
    
    12.5
    
    
    
    
    
    
    
    330.0Other current assets
    
    
    7.2
    
    
    
    0.4
    
    
    
    
    
    
    
    7.6Total current assets
    
    
    535.5
    
    
    
    26.9
    
    
    
    (15.5
    )
    
    
    546.9Property, plant and equipment, net
    
    
    427.4
    
    
    
    9.4
    
    
    
    
    
    
    
    436.8Goodwill, net
    
    
    464.0
    
    
    
    63.7
    
    
    
    
    
    
    
    527.7Identifiable intangible assets, net
    
    
    83.4
    
    
    
    
    
    
    
    
    
    
    
    83.4Investment in affiliated company
    
    
    79.4
    
    
    
    
    
    
    
    (79.4
    )
    
    
    Debt origination costs, net and other assets
    
    
    24.3
    
    
    
    0.1
    
    
    
    
    
    
    
    24.4Total assets
    
    $
    1,614.0
    
    
    $
    100.1
    
    
    $
    (94.9
    )
    
    $
    1,619.2Liabilities and stockholders equity (deficit)Current liabilities:Accounts payable, trade
    
    $
    100.4
    
    
    $
    4.1
    
    
    $
    
    
    
    $
    104.5Accrued and other liabilities
    
    
    71.4
    
    
    
    0.4
    
    
    
    
    
    
    
    71.8Accrued payroll and employee benefits
    
    
    46.3
    
    
    
    1.0
    
    
    
    
    
    
    
    47.3Accrued post-retirement benefits  current
    
    
    57.3
    
    
    
    
    
    
    
    
    
    
    
    57.3Accrued pension  current
    
    
    40.9
    
    
    
    
    
    
    
    
    
    
    
    40.9Current portion of long-term bank debt
    
    
    4.0
    
    
    
    
    
    
    
    
    
    
    
    4.0Intercompany payable
    
    
    2.5
    
    
    
    13.0
    
    
    
    (15.5
    )
    
    
    Capital lease obligations
    
    
    
    
    
    
    0.8
    
    
    
    
    
    
    
    0.8Accrued contract liabilities
    
    
    276.7
    
    
    
    
    
    
    
    
    
    
    
    276.7Total current liabilities
    
    
    599.5
    
    
    
    19.3
    
    
    
    (15.5
    )
    
    
    603.3Long-term liabilities:Accrued post-retirement benefits
    
    
    494.4
    
    
    
    
    
    
    
    
    
    
    
    494.4Accrued pension
    
    
    448.9
    
    
    
    
    
    
    
    
    
    
    
    448.9Long-term bank debt, net of current portion
    
    
    419.0
    
    
    
    
    
    
    
    
    
    
    
    419.0Long-term bond debt
    
    
    270.0
    
    
    
    
    
    
    
    
    
    
    
    270.0Long-term capital lease obligation
    
    
    
    
    
    
    1.4
    
    
    
    
    
    
    
    1.4Other non-current liabilities
    
    
    150.9
    
    
    
    
    
    
    
    
    
    
    
    150.9Total liabilities
    
    
    2,382.7
    
    
    
    20.7
    
    
    
    (15.5
    )
    
    
    2,387.9Stockholders equity (deficit):Common stock, par value $0.01; 50,000,000 shares
authorized, 25,009,952 issued and outstanding
in 2005
    
    
    0.3
    
    
    
    
    
    
    
    
    
    
    
    0.3Additional paid-in capital
    
    
    417.9
    
    
    
    80.3
    
    
    
    (80.3
    )
    
    
    417.9Shares held in rabbi trust
    
    
    (1.7
    )
    
    
    
    
    
    
    
    
    
    
    (1.7
    )Stockholders loans
    
    
    (2.2
    )
    
    
    
    
    
    
    
    
    
    
    (2.2
    )Accumulated deficit
    
    
    (588.8
    )
    
    
    (0.9
    )
    
    
    0.9
    
    
    
    (588.8
    )Accumulated other comprehensive loss
    
    
    (594.2
    )
    
    
    
    
    
    
    
    
    
    
    (594.2
    )Total stockholders equity (deficit)
    
    
    (768.7
    )
    
    
    79.4
    
    
    
    (79.4
    )
    
    
    (768.7
    )Total liabilities and stockholders equity (deficit)
    
    $
    1,614.0
    
    
    $
    100.1
    
    
    $
    (94.9
    )
    
    $
    1,619.2
 13




---



##### Table of Contents



Consolidating Balance Sheet
December 31, 2004
($ in millions) (Audited)
 Guarantor
    
    
    IntercompanyVought (1)
    
    
    Subsidiary (1)
    
    
    Eliminations
    
    
    TotalAssetsCurrent assets:Cash and cash equivalents
    
    $
    128.6
    
    
    $
    0.3
    
    
    $
    
    
    
    $
    128.9Accounts receivable
    
    
    112.1
    
    
    
    11.1
    
    
    
    
    
    
    
    123.2Intercompany receivable
    
    
    19.6
    
    
    
    3.2
    
    
    
    (22.8
    )
    
    
    Inventories
    
    
    266.6
    
    
    
    12.7
    
    
    
    
    
    
    
    279.3Other current assets
    
    
    6.8
    
    
    
    0.4
    
    
    
    
    
    
    
    7.2Total current assets
    
    
    533.7
    
    
    
    27.7
    
    
    
    (22.8
    )
    
    
    538.6Property, plant and equipment, net
    
    
    395.7
    
    
    
    12.0
    
    
    
    
    
    
    
    407.7Goodwill, net
    
    
    464.0
    
    
    
    63.7
    
    
    
    
    
    
    
    527.7Identifiable intangible assets, net
    
    
    91.5
    
    
    
    
    
    
    
    
    
    
    
    91.5Investment in affiliated company
    
    
    74.9
    
    
    
    
    
    
    
    (74.9
    )
    
    
    Debt origination costs, net and other assets
    
    
    23.4
    
    
    
    0.1
    
    
    
    
    
    
    
    23.5Total assets
    
    $
    1,583.2
    
    
    $
    103.5
    
    
    $
    (97.7
    )
    
    $
    1,589.0Liabilities and stockholders equity (deficit)Current liabilities:Accounts payable, trade
    
    $
    97.4
    
    
    $
    3.3
    
    
    
    
    
    
    $
    100.7Accrued and other liabilities
    
    
    88.4
    
    
    
    1.6
    
    
    
    
    
    
    
    90.0Accrued payroll and employee benefits
    
    
    50.2
    
    
    
    1.2
    
    
    
    
    
    
    
    51.4Accrued post-retirement benefits  current
    
    
    57.3
    
    
    
    
    
    
    
    
    
    
    
    57.3Accrued pension  current
    
    
    27.2
    
    
    
    
    
    
    
    
    
    
    
    27.2Current portion of long-term bank debt
    
    
    4.0
    
    
    
    
    
    
    
    
    
    
    
    4.0Intercompany payable
    
    
    3.2
    
    
    
    19.6
    
    
    
    (22.8
    )
    
    
    Capital lease obligations
    
    
    
    
    
    
    0.9
    
    
    
    
    
    
    
    0.9Accrued contract liabilities
    
    
    142.0
    
    
    
    
    
    
    
    
    
    
    
    142.0Total current liabilities
    
    
    469.7
    
    
    
    26.6
    
    
    
    (22.8
    )
    
    
    473.5Long-term liabilities:Accrued post-retirement benefits
    
    
    486.9
    
    
    
    
    
    
    
    
    
    
    
    486.9Accrued pension
    
    
    420.7
    
    
    
    
    
    
    
    
    
    
    
    420.7Long-term bank debt, net of current portion
    
    
    421.0
    
    
    
    
    
    
    
    
    
    
    
    421.0Long-term bond debt
    
    
    270.0
    
    
    
    
    
    
    
    
    
    
    
    270.0Long-term capital lease obligation
    
    
    
    
    
    
    2.0
    
    
    
    
    
    
    
    2.0Other non-current liabilities
    
    
    69.4
    
    
    
    
    
    
    
    
    
    
    
    69.4Total liabilities
    
    
    2,137.7
    
    
    
    28.6
    
    
    
    (22.8
    )
    
    
    2,143.5Stockholders equity (deficit):Common stock, par value $0.01; 50,000,000 shares
authorized, 25,015,552 issued and outstanding
in 2004
    
    
    0.3
    
    
    
    
    
    
    
    
    
    
    
    0.3Additional paid-in capital
    
    
    418.0
    
    
    
    80.3
    
    
    
    (80.3
    )
    
    
    418.0Shares held in rabbi trust
    
    
    (1.9
    )
    
    
    
    
    
    
    
    
    
    
    (1.9
    )Stockholders loans
    
    
    (2.3
    )
    
    
    
    
    
    
    
    
    
    
    (2.3
    )Accumulated deficit
    
    
    (374.4
    )
    
    
    (5.4
    )
    
    
    5.4
    
    
    
    (374.4
    )Accumulated other comprehensive loss
    
    
    (594.2
    )
    
    
    
    
    
    
    
    
    
    
    (594.2
    )Total stockholders equity (deficit)
    
    
    (554.5
    )
    
    
    74.9
    
    
    
    (74.9
    )
    
    
    (554.5
    )Total liabilities and stockholders equity (deficit)
    
    $
    1,583.2
    
    
    $
    103.5
    
    
    $
    (97.7
    )
    
    $
    1,589.0
 
 (1)
    
    Effective January 1, 2004, the Company implemented a corporate reorganization of its Aerostructures subsidiary. Pursuant to the reorganization,
Aerostructures incorporated a new subsidiary, entitled Contour Aerospace Corporation, a Delaware corporation (''Contour). Then, Aerostructures
contributed its Everett, Washington facility and Brea, California facility to Contour. Contemporaneous with the contribution of these assets and
operations to Contour, Aerostructures merged with and into Vought Aircraft Industries, Inc., so that the remaining operating assets of Aerostructures are
integrated with the ongoing operations of Vought. As a result of the reorganization, beginning in 2004, Aerostructures does not exist as a separate
corporate entity and Contour is a direct subsidiary of Vought. Under the 8% Senior Notes due 2011, Contour is a guarantor on a fully and unconditionally
and jointly and severally on a senior unsecured basis. 14




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##### Table of Contents



Consolidating Statement of Operations
Three Months Ended September 25, 2005
($ in millions) (Unaudited)
 Guarantor
    
    
    IntercompanyVought
    
    
    Subsidiary
    
    
    Eliminations
    
    
    TotalNet sales
    
    $
    295.9
    
    
    $
    17.4
    
    
    $
    (2.9
    )
    
    $
    310.4Costs and expensesCost of sales
    
    
    261.8
    
    
    
    15.4
    
    
    
    (2.9
    )
    
    
    274.3Selling, general and administrative expenses
    
    
    76.2
    
    
    
    0.9
    
    
    
    
    
    
    
    77.1Asset impairment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total costs and expenses
    
    
    338.0
    
    
    
    16.3
    
    
    
    (2.9
    )
    
    
    351.4Operating income (loss)
    
    
    (42.1
    )
    
    
    1.1
    
    
    
    
    
    
    
    (41.0
    )Other income (expense)Interest income
    
    
    1.2
    
    
    
    
    
    
    
    
    
    
    
    1.2Other income (loss)
    
    
    
    
    
    
    (0.3
    )
    
    
    
    
    
    
    (0.3
    )Equity in
earnings (loss) of joint venture
    
    
    (1.0
    )
    
    
    
    
    
    
    
    
    
    
    (1.0
    )Interest expense
    
    
    (14.1
    )
    
    
    
    
    
    
    
    
    
    
    (14.1
    )Equity in income of consolidated subsidiaries
    
    
    0.8
    
    
    
    
    
    
    
    (0.8
    )
    
    
    Income (loss) before income taxes
    
    
    (55.2
    )
    
    
    0.8
    
    
    
    (0.8
    )
    
    
    (55.2
    )Income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net income (loss)
    
    $
    (55.2
    )
    
    $
    0.8
    
    
    $
    (0.8
    )
    
    $
    (55.2
    )
 Consolidating Statement of Operations
Three Months Ended September 26, 2004
($ in millions) (Unaudited)
 Guarantor
    
    
    IntercompanyVought
    
    
    Subsidiary
    
    
    Eliminations
    
    
    TotalNet sales
    
    $
    278.9
    
    
    $
    19.2
    
    
    $
    (2.8
    )
    
    $
    295.3Costs and expensesCost of sales
    
    
    247.6
    
    
    
    17.7
    
    
    
    (2.8
    )
    
    
    262.5Selling, general and administrative expenses
    
    
    63.1
    
    
    
    1.3
    
    
    
    
    
    
    
    64.4Total costs and expenses
    
    
    310.7
    
    
    
    19.0
    
    
    
    (2.8
    )
    
    
    326.9Operating income (loss)
    
    
    (31.8
    )
    
    
    0.2
    
    
    
    
    
    
    
    (31.6
    )Other income (expense)Interest income
    
    
    0.7
    
    
    
    
    
    
    
    
    
    
    
    0.7Interest expense
    
    
    (10.6
    )
    
    
    (0.1
    )
    
    
    
    
    
    
    (10.7
    )Equity in income of consolidated subsidiaries
    
    
    0.1
    
    
    
    
    
    
    
    (0.1
    )
    
    
    Income (loss) before income taxes
    
    
    (41.6
    )
    
    
    0.1
    
    
    
    (0.1
    )
    
    
    (41.6
    )Income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net income (loss)
    
    $
    (41.6
    )
    
    $
    0.1
    
    
    $
    (0.1
    )
    
    $
    (41.6
    )
 15




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##### Table of Contents



Consolidating Statement of Operations
Nine Months Ended September 25, 2005
($ in millions) (Unaudited)
 Guarantor
    
    
    IntercompanyVought
    
    
    Subsidiary
    
    
    Eliminations
    
    
    TotalNet sales
    
    $
    889.1
    
    
    $
    56.1
    
    
    $
    (8.0
    )
    
    $
    937.2Costs and expensesCost of sales
    
    
    844.0
    
    
    
    48.7
    
    
    
    (8.0
    )
    
    
    884.7Selling, general and administrative expenses
    
    
    220.0
    
    
    
    2.4
    
    
    
    
    
    
    
    222.4Asset impairment
    
    
    5.9
    
    
    
    
    
    
    
    
    
    
    
    5.9Total costs and expenses
    
    
    1,069.9
    
    
    
    51.1
    
    
    
    (8.0
    )
    
    
    1,113.0Operating income (loss)
    
    
    (180.8
    )
    
    
    5.0
    
    
    
    
    
    
    
    (175.8
    )Other income (expense)Interest income
    
    
    2.8
    
    
    
    
    
    
    
    
    
    
    
    2.8Other income (loss)
    
    
    
    
    
    
    (0.4
    )
    
    
    
    
    
    
    (0.4
    )Equity in
earnings (loss) of joint venture
    
    
    (1.8
    )
    
    
    
    
    
    
    
    
    
    
    (1.8
    )Interest expense
    
    
    (38.8
    )
    
    
    (0.1
    )
    
    
    
    
    
    
    (38.9
    )Equity in income of consolidated subsidiaries
    
    
    4.5
    
    
    
    
    
    
    
    (4.5
    )
    
    
    Income (loss) before income taxes
    
    
    (214.1
    )
    
    
    4.5
    
    
    
    (4.5
    )
    
    
    (214.1
    )Income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net income (loss)
    
    $
    (214.1
    )
    
    $
    4.5
    
    
    $
    (4.5
    )
    
    $
    (214.1
    )
 Consolidating Statement of Operations
Nine Months Ended September 26, 2004
($ in millions) (Unaudited)
 Guarantor
    
    
    IntercompanyVought
    
    
    Subsidiary
    
    
    Eliminations
    
    
    TotalNet sales
    
    $
    839.2
    
    
    $
    51.7
    
    
    $
    (6.5
    )
    
    $
    884.4Costs and expensesCost of sales
    
    
    706.2
    
    
    
    46.0
    
    
    
    (6.5
    )
    
    
    745.7Selling, general and administrative expenses
    
    
    186.4
    
    
    
    3.7
    
    
    
    
    
    
    
    190.1Total costs and expenses
    
    
    892.6
    
    
    
    49.7
    
    
    
    (6.5
    )
    
    
    935.8Operating income (loss)
    
    
    (53.4
    )
    
    
    2.0
    
    
    
    
    
    
    
    (51.4
    )Other income (expense)Interest income
    
    
    1.8
    
    
    
    
    
    
    
    
    
    
    
    1.8Interest expense
    
    
    (30.2
    )
    
    
    (0.3
    )
    
    
    
    
    
    
    (30.5
    )Equity in income of consolidated subsidiaries
    
    
    1.7
    
    
    
    
    
    
    
    (1.7
    )
    
    
    Income (loss) before income taxes
    
    
    (80.1
    )
    
    
    1.7
    
    
    
    (1.7
    )
    
    
    (80.1
    )Income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net income (loss)
    
    $
    (80.1
    )
    
    $
    1.7
    
    
    $
    (1.7
    )
    
    $
    (80.1
    )
 16




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##### Table of Contents



Consolidating Statement of Cash Flows
Nine Months Ended September 25, 2005
($ in millions) (Unaudited)
 Guarantor
    
    
    IntercompanyVought
    
    
    Subsidiary
    
    
    Eliminations
    
    
    TotalOperating activitiesNet income (loss)
    
    $
    (214.1
    )
    
    $
    4.5
    
    
    $
    (4.5
    )
    
    $
    (214.1
    )Adjustments to reconcile net income (loss) to net
cash
provided by (used in ) operating activities:Depreciation & amortization
    
    
    52.0
    
    
    
    2.7
    
    
    
    
    
    
    
    54.7Asset impairment
    
    
    5.9
    
    
    
    
    
    
    
    
    
    
    
    5.9Loss from asset sales
    
    
    4.3
    
    
    
    0.4
    
    
    
    
    
    
    
    4.7Income from investment in consolidated
subsidiaries
    
    
    (4.5
    )
    
    
    
    
    
    
    4.5
    
    
    
    Changes in current assets and liabilities:Accounts receivable
    
    
    31.1
    
    
    
    (0.1
    )
    
    
    
    
    
    
    31.0Intercompany accounts receivable
    
    
    6.6
    
    
    
    0.7
    
    
    
    (7.3
    )
    
    
    Inventories, net of advance and progress billings
    
    
    (50.9
    )
    
    
    0.2
    
    
    
    
    
    
    
    (50.7
    )Other current assets
    
    
    (0.4
    )
    
    
    
    
    
    
    
    
    
    
    (0.4
    )Accounts payable, trade
    
    
    3.0
    
    
    
    0.8
    
    
    
    
    
    
    
    3.8Intercompany accounts payable
    
    
    (0.7
    )
    
    
    (6.6
    )
    
    
    7.3
    
    
    
    Accrued payroll and employee benefits
    
    
    (3.9
    )
    
    
    (0.2
    )
    
    
    
    
    
    
    (4.1
    )Accrued and other liabilities
    
    
    (3.3
    )
    
    
    (1.3
    )
    
    
    
    
    
    
    (4.6
    )Accrued contract liabilities
    
    
    134.7
    
    
    
    
    
    
    
    
    
    
    
    134.7Other assets and liabilities  long-term
    
    
    39.3
    
    
    
    
    
    
    
    
    
    
    
    39.3Net cash provided by operating activities
    
    
    (0.9
    )
    
    
    1.1
    
    
    
    (0.0
    )
    
    
    0.2Investing activitiesAdvances to joint venture
    
    
    (3.2
    )
    
    
    
    
    
    
    
    
    
    
    (3.2
    )Capital expenditures
    
    
    (83.5
    )
    
    
    (0.5
    )
    
    
    
    
    
    
    (84.0
    )Net cash used in investing activities
    
    
    (86.7
    )
    
    
    (0.5
    )
    
    
    
    
    
    
    (87.2
    )Financing activitiesPayments on long-term bank debt
    
    
    (2.0
    )
    
    
    
    
    
    
    
    
    
    
    (2.0
    )Payments on capital leases
    
    
    
    
    
    
    (0.6
    )
    
    
    
    
    
    
    (0.6
    )Proceeds from Hawthorne
    
    
    52.6
    
    
    
    
    
    
    
    
    
    
    
    52.6Proceeds from governmental grants
    
    
    25.3
    
    
    
    
    
    
    
    
    
    
    
    25.3Retirement of common stock
    
    
    (0.3
    )
    
    
    
    
    
    
    
    
    
    
    (0.3
    )Decrease in stockholder loans
    
    
    0.1
    
    
    
    
    
    
    
    
    
    
    
    0.1Proceeds from sale of common stock
    
    
    0.1
    
    
    
    
    
    
    
    
    
    
    
    0.1Net cash provided by (used in) financing activities
    
    
    75.8
    
    
    
    (0.6
    )
    
    
    
    
    
    
    75.2Net decrease in cash and cash equivalents
    
    
    (11.8
    )
    
    
    0.0
    
    
    
    (0.0
    )
    
    
    (11.8
    )Cash and cash equivalents at beginning of period
    
    
    128.6
    
    
    
    0.3
    
    
    
    
    
    
    
    128.9Cash and cash equivalents at end of period
    
    $
    116.8
    
    
    $
    0.3
    
    
    $
    (0.0
    )
    
    $
    117.1
 17




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##### Table of Contents



Consolidating Statement of Cash Flows
Nine Months Ended September 26, 2004
($ in millions) (Unaudited)
 Guarantor
    
    
    IntercompanyVought
    
    
    Subsidiary
    
    
    Eliminations
    
    
    TotalOperating activitiesNet income (loss)
    
    $
    (80.1
    )
    
    $
    1.7
    
    
    $
    (1.7
    )
    
    $
    (80.1
    )Adjustments to reconcile net income (loss) to net
cash
provided by operating activities:Depreciation & amortization
    
    
    63.9
    
    
    
    3.1
    
    
    
    
    
    
    
    67.0Loss from asset sales
    
    
    1.6
    
    
    
    
    
    
    
    
    
    
    
    1.6Income from investment in consolidated
subsidiaries
    
    
    (1.7
    )
    
    
    
    
    
    
    1.7
    
    
    
    Changes in current assets and liabilities:Accounts receivable
    
    
    (15.6
    )
    
    
    (10.0
    )
    
    
    
    
    
    
    (25.6
    )Intercompany accounts receivable
    
    
    (17.6
    )
    
    
    (2.6
    )
    
    
    20.2
    
    
    
    Inventories, net of advance and progress billings
    
    
    (19.3
    )
    
    
    (1.1
    )
    
    
    
    
    
    
    (20.4
    )Other current assets
    
    
    0.6
    
    
    
    (0.3
    )
    
    
    
    
    
    
    0.3Accounts payable, trade
    
    
    28.9
    
    
    
    (1.6
    )
    
    
    
    
    
    
    27.3Intercompany accounts payable
    
    
    2.6
    
    
    
    17.6
    
    
    
    (20.2
    )
    
    
    Accrued payroll and employee benefits
    
    
    0.4
    
    
    
    0.1
    
    
    
    
    
    
    
    0.5Accrued interest
    
    
    (5.1
    )
    
    
    
    
    
    
    
    
    
    
    (5.1
    )Intercompany transactions
    
    
    0.4
    
    
    
    (0.4
    )
    
    
    
    
    
    
    Accrued and other liabilities
    
    
    (4.0
    )
    
    
    
    
    
    
    
    
    
    
    (4.0
    )Accrued contract liabilities
    
    
    24.0
    
    
    
    (4.2
    )
    
    
    
    
    
    
    19.8Other assets and liabilities  long-term
    
    
    44.1
    
    
    
    
    
    
    
    
    
    
    
    44.1Net cash provided by operating activities
    
    
    23.1
    
    
    
    2.3
    
    
    
    
    
    
    
    25.4Investing activitiesCapital expenditures
    
    
    (28.6
    )
    
    
    (0.9
    )
    
    
    
    
    
    
    (29.5
    )Net cash used in investing activities
    
    
    (28.6
    )
    
    
    (0.9
    )
    
    
    
    
    
    
    (29.5
    )Financing activitiesPayments on capital leases
    
    
    
    
    
    
    (1.3
    )
    
    
    
    
    
    
    (1.3
    )Proceeds
from governmental grants
    
    
    35.0
    
    
    
    
    
    
    
    
    
    
    
    35.0Net cash
provided by (used in) financing activities
    
    
    35.0
    
    
    
    (1.3
    )
    
    
    
    
    
    
    33.7Net increase in cash and cash equivalents
    
    
    29.5
    
    
    
    0.1
    
    
    
    
    
    
    
    29.6Cash and cash equivalents at beginning of period
    
    
    106.4
    
    
    
    
    
    
    
    
    
    
    
    106.4Cash and cash equivalents at end of period
    
    $
    135.9
    
    
    $
    0.1
    
    
    $
    
    
    
    $
    136.0
 18




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##### Table of Contents



ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 The following section may include forward-looking statements that involve inherent risks and
uncertainties. A number of important factors could cause actual results to differ materially from
those in the forward-looking statements. These factors include (i) reduced demand for new
commercial aircraft due to reduction in airline traffic, (ii) business risks inherent to the
airline industry including armed conflict, terrorism, global health warnings, government
regulation, rising fuel and labor costs, lower than expected profitability, and general economic
conditions and (iii) reduced demand for military aircraft due to reductions in defense spending,
cancellation or modification of military aircraft programs and changes to government export
controls. Managements discussion and analysis of financial condition and results of operations
should be read in conjunction with the financial statements of Vought and the accompanying notes
contained therein.
 Recent Events
    19




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##### Table of Contents



Results of Operations
 Three
    
    
    
    
    
    
    Three
    
    
    
    
    
    
    
    
    
    
    
    NineMonths
    
    
    
    
    
    
    Months
    
    
    
    Nine Months
    
    
    
    
    
    
    MonthsEnded
    
    
    Percentage
    
    
    Ended
    
    
    
    Ended
    
    
    Percentage
    
    
    EndedSeptember
    
    
    Change to
    
    
    September
    
    
    
    September
    
    
    Change to
    
    
    September25, 2005
    
    
    Prior Year
    
    
    26, 2004
    
    
    
    25, 2005
    
    
    Prior Year
    
    
    26, 2004(in millions)
    
    
    
    (in millions)Net sales:Commercial
    
    $
    146.4
    
    
    
    (3.6
    )%
    
    $
    151.8
    
    
    
    $
    464.4
    
    
    
    8.8
    %
    
    $
    426.8Military
    
    
    113.4
    
    
    
    10.1
    %
    
    
    103.0
    
    
    
    
    318.5
    
    
    
    0.7
    %
    
    
    316.4Business Jets
    
    
    50.6
    
    
    
    24.9
    %
    
    
    40.5
    
    
    
    
    154.3
    
    
    
    9.3
    %
    
    
    141.2Total net sales
    
    $
    310.4
    
    
    
    5.1
    %
    
    $
    295.3
    
    
    
    $
    937.2
    
    
    
    6.0
    %
    
    $
    884.4Costs and expenses:Cost of sales
    
    
    274.3
    
    
    
    4.5
    %
    
    
    262.5
    
    
    
    
    884.7
    
    
    
    18.6
    %
    
    
    745.7Selling, general and
administrative
    
    
    77.1
    
    
    
    19.7
    %
    
    
    64.4
    
    
    
    
    222.4
    
    
    
    17.0
    %
    
    
    190.1Asset impairment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5.9
    
    
    
    
    
    
    
    Total costs and expenses
    
    $
    351.4
    
    
    
    7.5
    %
    
    
    326.9
    
    
    
    $
    1,113.0
    
    
    
    18.9
    %
    
    $
    935.8Operating loss
    
    
    (41.0
    )
    
    
    29.7
    %
    
    
    (31.6
    )
    
    
    
    (175.8
    )
    
    
    242.0
    %
    
    
    (51.4
    )Equity in
earnings (loss) for joint venture
    
    
    (1.0
    )
    
    
    
    
    
    
    
    
    
    
    
    (1.8
    )
    
    
    
    
    
    
    (1.8
    )Other income (loss)
    
    
    (0.3
    )
    
    
    
    
    
    
    
    
    
    
    
    (0.4
    )
    
    
    
    
    
    
    Interest expense, net
    
    
    (12.9
    )
    
    
    29.0
    %
    
    
    (10.0
    )
    
    
    
    (36.1
    )
    
    
    34.2
    %
    
    
    (26.9
    )Net loss
    
    $
    (55.2
    )
    
    
    32.7
    %
    
    $
    (41.6
    )
    
    
    $
    (214.1
    )
    
    
    167.3
    %
    
    $
    (80.1
    )
 Comparison of Results of Operations for the Three Months Ended September 25, 2005 and
September 26, 2004
 Net sales
 
    
    Commercial net sales decreased by approximately $5.4 million or 4% as a result of a
decrease in sales of $4.5 million and $4.0 million from Boeing and Embraer contracts,
respectively, due to lower aircraft delivery rates, partially offset by an increase of
$3.8 million on our Airbus contracts due to increased aircraft delivery rates. Due to
the IAM strike at Boeing, third quarter 2005 sales excluded $20.1 million of
shipped-in-place deliveries that will be recognized when shipped.
    
    Military net sales increased approximately $10.4 million or 10% as a result of
increased sales on the C-17 program primarily due to increased delivery rates.
    
    Business Jet net sales increased by approximately $10.1 million or 25% primarily due
to increased delivery rates on the Gulfstream V program.
 Cost of sales
 20




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##### Table of Contents



Selling, general and administrative expenses
 Operating income (loss)
 Interest expense, net
 Comparison of Results of Operations for the Nine Months Ended September 25, 2005 and September 26,
2004
 Net sales
 
    
    Commercial net sales increased by approximately $37.6 million or 9% as a result of
an increase in sales of $20.5 million from Boeing contracts due to higher aircraft
delivery rates, accompanied by an increase of $18.0 million from Airbus contracts
resulting from increased delivery rates. Due to the IAM strike at Boeing, third quarter
2005 sales excluded $20.1 million of shipped-in-place deliveries that will be
recognized when shipped.
    
    Military net sales increased by approximately $2.1 million or 1% primarily due to
increased delivery rates on the V-22 Empennage Ramp program and higher C-5 sales
partially offset by lower selling prices for the C-17 program.
    
    Business Jet net sales increased by approximately $13.1 million or 9% due to
increased delivery rates on the Gulfstream IV and Gulfstream V programs.
 Cost of sales
 21




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Selling, general and administrative expenses
 Operating income (loss)
 Interest expense, net
 Critical Accounting Policies
  Liquidity and Capital Resources
   22




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23




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Restructuring
       24




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Debt Covenants.
  
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
       25




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Interest Rate Risks
     Utility Price Risks
  
 ITEM 4. CONTROLS AND PROCEDURES
  26




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FORWARD-LOOKING STATEMENTS
  
 PART II. OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
  
 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
  
 ITEM 3. DEFAULTS UPON SENIOR SECURITIES
  
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  
 27




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ITEM 5. OTHER INFORMATION


Entry
into a Material Definitive Agreement




Departure
of Directors or Principal Officers; Election of Directors;Appointment
of Principal Officers






Board
of Directors Actions












28



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ITEM 6. EXHIBITS
 (a) Exhibits
 (10.1)*
    
    Agreement between Vought and Kenneth W. Cannestra.(10.2)*
    
    Agreement between Vought and Thomas Corcoran.(10.3)*
    
    Agreement between Vought and Gordon Williams.(10.4)*
    
    Agreement between Vought and
William McMillan.(10.5)*
    
    Agreement between Vought and
William J. McKenna.(31.1)*
    
    Certification of Chief Executive Officer pursuant to Section 302 of Sarbanes-Oxley Act of 2002.(31.2)*
    
    Certification of Chief Financial Officer pursuant to Section 302 of Sarbanes-Oxley Act of 2002.(32.1)*
    
    Certification of Chief Executive Officer pursuant to Section 906 of Sarbanes-Oxley Act of 2002.(32.2)*
    
    Certification of Chief Financial Officer pursuant to Section 906 of Sarbanes-Oxley Act of 2002.
 
 *
    
    Filed herewith 29




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SIGNATURES
  Vought Aircraft Industries, Inc.(Registrant)November 9, 2005
    
    /s/ Lloyd R. Sorenson(Date)
    
    Lloyd R. SorensonExecutive Vice President and Chief Financial Officer(Principal Financial Officer and Authorized Officer)
 30