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KLX Equity Investor Meeting

December 3, 2014
Key Facts and Dates

Tax-free pro rata distribution to B/E Aerospace shareholders

of KLX, a new publicly-traded company

Exchange NASDAQ

Ticker KLXI

1 share of KLX for every 2 shares

Distribution Ratio
of B/E Aerospace

Declaration Date November 25th

Record Date December 5th

Distribution Date December 16th

Fiscal Year End January 31st

Management Team

Amin Khoury Tom McCaffrey

Chairman and Chief Executive Officer President and Chief Operating Officer
Founded B/E Aerospace in 1987 Previously served as SVP and CFO of B/E Aerospace from
Chairman of B/E Aerospace since 1987 and CEO since 2005
1993 to 2014

Mike Senft Heather Floyd

Chief Financial Officer and Treasurer Vice President, Finance and Corporate Controller
Previously Managing Director of Merrill Lynch, CIBC, and Previously served as Vice President, Internal Audit of B/E
Moelis & Company, with a 20-year advisory relationship with Aerospace
B/E Aerospace
Joined B/E Aerospace in November 2010 as Director of
Former member of B/E Aerospace Board of Directors since Financial Reporting and Internal Controls

John Cuomo Gary Roberts

Vice President and General Manager, ASG Vice President and General Manager, ESG
Vice President and General Manager of Consumables
Vice President and General Manager of Energy Services
Management business since July 2014
business of B/E Aerospace since April 2014
14 years of experience with B/E Aerospace Consumables
Previously CEO of Vision Oil Tools from 2010 until its
acquisition by B/E Aerospace in 2014
33 years in oilfield service industry, including six years at
Baker Hughes and 16 years at Weatherford

Board of Directors

8 highly-qualified directors, of which 7 are independent,

bringing with them diverse knowledge and expertise

Amin J. Khoury Founded B/E Aerospace in 1987

Chairman & CEO Chairman of B/E Aerospace since 1987 and CEO since 2005

Chairman and Chief Executive Officer of the Collins Group

John T. Collins
Previously served as President & CEO of Quebecor Printing
Former director of Bank of America and Fleet Bank

Peter V. Del Presto Adjunct Professor of Finance at the University of Pittsburgh

Director Partner with PNC Equity Partners from 1985 until his retirement in 2010

Richard G. Hamermesh A member of the Board of Directors of B/E Aerospace since July 1987
Director Professor of Management Practice at Harvard Business School since July 1, 2002

Benjamin A. Hardesty Owner of Alta Energy LLC since 2010

Director President of Dominion E&P, Inc. until his retirement in May 2010

Stephen M. Ward, Jr. Previously President and CEO of Lenovo Corporation

Director Spent 26 years at IBM Corporation holding various management positions

Theodore L. Weise Business consultant and a member of the Board of Directors of Hawthorne Global Aviation
Director Previously President and CEO of Federal Express Corporation until 2000

John T. Whates, Esq. A member of the Board of Directors of B/E Aerospace since February 2012
Director Partner at Deloitte & Touche until retired in 2005
Company Overview

KLX will consist of two segments: PF LTM Revenues of $1.7 billion

September 30, 2014
Aerospace Solutions Group (ASG) provides fasteners,
consumable products, and logistics services to over 4,700
aerospace customers around the world
Energy Services Group (ESG) provides services and ESG
logistics for remote oil and gas drilling sites
Leverages unique capabilities and expertise to provide mission ASG
critical products and complex logistical solutions to support 76%
customers high-value assets

Serves customers in demanding environments that face high

cost of downtime and require dependable, high-quality, just-in-
time customer support Rest of World

Headquartered in Wellington, FL with segment headquarters in 12%

Miami, FL & Houston, TX

Employees: ~3,300 Europe

21% U.S.
Summary Financials
LTM PF Revenues: $1.7 billion
LTM PF Adj. EBITDA: $398 million (23.2% margin)
Note: Last twelve months as of September 30, 2014
Creating a Premier Aerospace & Energy Services Platform

KLX has achieved an industry leading position through both organic

growth and strategic acquisitions over time

ESG Acquisitions
ASG Acquisitions


$799 $778

$145 $174
$97 $105

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 PF LTM

Services Bulldog

Note: Figures in millions of dollars Cornell
1 Pro forma for all energy acquisitions made since January 2013 as if each acquisition was made on January 1, 2013

Our Two Segments

Leveraging unique capabilities and expertise

Aerospace Solutions Group Energy Services Group

Common Qualities
Mission critical products
Complex logistical solutions
Technical services and
JIT delivery requirements
Distribution driven model Oil and gas market
High cost of downtime
Aerospace market exposure Premium operating margins

$4.7 billion addressable In-depth certification requirements

$15 billion addressable
market market
Importance of customer support
Global footprint North America-focused
operating footprint
Increasing global air travel End Markets
Increased energy demand
and aircraft delivery rates
Strong end market growth and new oil and gas
Increased trend toward outsourcing reserve discoveries and
retrieval technologies
Fragmented ESG market reminiscent
of ASG market dynamics at inception

Aerospace Solutions Group
Aerospace Solutions Group (ASG) | 76% LTM PF Revenues

One of the broadest ranges of aerospace hardware, consumables, LTM Revenues of $1.3 billion
September 30, 2014
and inventory management services worldwide, ~1 million SKUs
Distributor for every major aerospace fastener manufacturer
The leading provider of aerospace fasteners and consumables, After
and of logistics services, to major aerospace OEM, airline, and New 37%
MRO businesses globally Aircraft
Large, diverse customer base:
Commercial, business jet and military OEMs, as well as MROs
and airlines
Over 400 sales, marketing and customer service specialists Top 5
worldwide All 30%

16,000 orders processed daily Other

60% of orders shipped within 24 hours 70%

99% on-time order fulfillment

Summary Financials 14%
LTM Revenues: $1.3 billion Business
LTM Adj. EBITDA: $277 million (21.2% margin) Commercial Jets
Aerospace 5%
Note: Last twelve months as of September 30, 2014
ASG | Key Investment Highlights

Favorable Long- Premier
Depth and
Term Industry Technology and
Breadth of
Trends Logistics Platform
Product Offerings

Balanced Global
Strong Customer Footprint with
Relationships Exposure to Key


ASG | Favorable Long-term Industry Trends

Based on industry sources, during 2013 the market for the

products and services provided by ASG was approximately $4.7 billion

Growing Installed Base of Commercial Aircraft

20,000 Total fleet size

1963 1966 1969 1972 1975 1978 1981 1984 1987 1990 1993 1996 1999 2002 2005 2008 2011

Historical and Forecast World Traffic (RPMs Billions) Fleet Growth Forecast
Growing global demand for commercial air transportation Older, less efficient planes will be replaced
12,000 with more efficient, newer generation aircraft

Growth fleet
Replacement fleet
Retained fleet 21,270
6,000 36,770
3,000 15,500

0 5,410
1970 2000 2007 2014E 2021E 2028E 2035E 2013 2033E

Source: Airline Monitor, Boeing

ASG | Unmatched Depth and Breadth of Products and Services

Inventory to support all commercial and military aircraft, business jets, and
Most diversified in the industry, supplying bolts, clips, hinges, rings, screws,
carbon-faced seals, gaskets, and O-rings

Stock 100,000 chemical SKUs from 100 manufacturers, distributed to over

750 customers globally
Chemicals, sealants and adhesives, lubricants, paints, cleaners, and

30-year license on over 36,000 Honeywell proprietary parts to support both

Honeywell and the aftermarket
Product lines supported by these parts are auxiliary power units, propulsion
engines, electrical/electro-mechanical, and airframe and engine accessories
Primary parts supplier to Honeywell (20-year agreement, with two five-year
options) for their use during the manufacturing of the aforementioned products

Bearings, Lighting products to both OEMs and aftermarket customers

Electrical, Clamps, Newly added product families include bearings, tooling, electrical
and Lighting components, and clamps

Delegated Electronic Data


Inspection Authority Interchange (EDI)

Symphony Direct Ship E-Commerce

ASG | Premier Technology and Logistics Platform

Invested $100+ million in proprietary IT systems to create an unparalleled

technology platform for the Aerospace Solutions Group

Planning and Includes planning tools customized to support both OEM and
Forecasting aftermarket demand planning for customers

Customized System / Real-time system across all ASG locations to support warehouse
Database management, JIT services, and kitting

Supplier and Supplier and customer portals to view reports, performance, and
Customer Portals other important data

Electronic Data
Exchange (EDI)
EDI platform and team links ASG systems to customers systems

New platform includes industry leading part attribute search

capabilities, real time stock checks, and proprietary quoting technology
Robust customer self-service functionality greatly increases sales
force productivity

Support of Value-
JIT, 3PL, kitting, as well as products not in standard packages (part
attributions, revision levels, etc.) required to support various
Added Services
customer systems
ASG | Strong Customer Relationships

Strong relationships serving customers across multiple regions

Management of consumables requires in-depth knowledge of the consumables supply chain

Key customer trends: 1) consolidate suppliers, 2) reduce supply base, 3) reduce inventory,
4) outsource planning, 5) outsource procurement, and 6) outsource quality control

Procure many small, low-dollar products from multiple suppliers

Have both planned and inconsistent demand and cannot afford any downtime / loss of inventory

Require products at point of use (near production or repair)

Selected Customers

OEM Aftermarket
Commercial Business Jet Military MRO Airlines Business Jet

ASG | Outstanding Operational Execution

Supplier of the Year 2012, 2014

(only supplier to win 2 out of 3 years)

Best supplier of 2013, Best supplier of 2014

Supplier of the Year, 3rd consecutive year

Korean Aviation
Supplier of the Year, 3rd consecutive year

Best Supplier

Supplier Responsiveness Award

Platinum Supplier Award

Silver Supplier Award

ASG | Balanced Global Footprint with Exposure to Key Markets

North America EMEA

28% Revenues
57% Revenues
10 Facilities
20 Facilities




15% Revenues
Regional Headquarters 6 Facilities
Sales & Program Support
Inventory & Warehouse Support
As of year-end December 31, 2013 16
ASG | Summary Financials

Revenues Adj. EBITDA and % Margin

(US$ in millions) (US$ in millions)


$264 $277
$213 22.9%
22.5% 21.2%

2011 2012 2013 LTM 9/30/14 2011 2012 2013 LTM 9/30/14

Revenues of $1,304 million have increased 38% since 2011

Industry leading margins

ASG margins pressured in short term, as revenues growth from new long-term customer
agreements initially carry lower margins until inventories have been depleted

ASG | Focus on Maintaining Leadership Position

Continue to focus on operational excellence, margin

expansion, and expansion of market leadership

Win new profitable business from existing aerospace

consumables customers; expand market share

Continue to expand customer base

Further expand into international markets

Selectively pursue strategic acquisitions of

complementary businesses with attractive margins

Energy Services Group
Energy Services Group (ESG) | 24% LTM PF Revenues

Critical services and products for energy exploration and PF LTM Revenues of $412 million
September 30, 2014

Offers broad range of high margin, valued added services Revenues by Top 5
Customer 41%
Strong presence across key production basins, including 59%
the Northeast, Rocky Mountains, Southwest, and Mid-

Sell predominantly to regional or independent oil

companies Rentals
Revenues by 31%
Product Line Services
Operates under 120 MSAs with customers including nearly 69%
all major regional and independent E&Ps
Wyoming /
North Dakota Colorado
Summary Financials 10% 5%
LTM PF Revenues: $412 million Revenues East
by Region Midcon 28%
LTM PF Adj. EBITDA: $121 million (29.4% margin) 17%
South TX NM
Texas 20%
Note: Last twelve months as of September 30, 2014
ESG | Key Investment Highlights

Essential Services Presence in

and Equipment that All Key N.A.
Command Superior Energy Producing
Margins Basins

Leveraged to
Extensive Local
Longest Lived
Market Knowledge
Portion of the Well
and Relationships

Attractive Financial
Growth Prospects

ESG | Supportive Industry Backdrop and Outlook

U.S. Oil Production Forecast U.S. Gas Supply Forecast

Oil production Marcellus Domestic
Eagle Ford continues to demand and
Associated Gas
grow with new shale
demand and Haynesville
new resource Fayetteville driving gas
Other Onshore Barnett
discovery production
Other Onshore Gas
Alaska Offshore

KLX Exposure KLX Exposure

Technological advancements driving increased complexity of drilling and extraction

Creates growing demand for technical services and products
General outsourcing of ancillary services to suppliers who provide high-quality and reliable services

Source: AEI, Wall Street research

ESG | Essential Services and Equipment that Command Superior Margins

Fishing Services Overshots, spears, jarring equipment, internal and external

& Tools cutters, Venturi tools, magnets, and wash over equipment

Wireline Composite frac plug pump downs, pipe recovery, perforation, as

Services well as well evaluation and logging services

Full line of hydraulic and manual equipment and refurbishment,

Pressure Control remanufacturing, and recertification services prior to

Placement and removal of flow control nipples and valves,

Onshore Completion
completion packers, bridge plugs, composite flow through frac
plugs, and a full line of downhole services tools

Machining, and
Service, restore, and test all pressure control equipment, valves,
choke manifolds, and closing units

Accommodations and
Related Surface Rental
Mobile, customizable workforce accommodations and offices and
associated rental equipment

ESG | Unmatched Footprint in Key Energy Producing Markets

North American footprint provides exposure to key oil and gas producing regions

ESG Locations

ESG | Niche Market Strategy

Extensive local market expertise, coupled with reliability

and consistency of service, reinforce key customer relationships

Focus on high margin, episodic, just-in-time services

Technical services drives revenues and profitability with support from fixed assets (including rental
equipment), rather than hard asset utilization driving margins

High variable cost component (50%) of gross margin allows for cost control across cycles

Customer relationships developed at the corporate, regional and field level

Customized services supported by company-wide best practice approach

Corporate priority on HSE (Health, Safety and Environmental) compliance

ESG | Strong Customer Partnerships

ESG | Summary Financials

Revenues Adj. EBITDA and % margins

(US$ in millions) (US$ in millions)





Pro Forma LTM 9/30/13 Pro Forma LTM 9/30/14 Pro Forma LTM 9/30/13 Pro Forma LTM 9/30/14

Successful integration of seven acquisitions since 2013 driving strong revenues and Adj. EBITDA

Q3 2014 organic revenues growth of approximately 50%

Note: Pro forma for all energy acquisitions made since January 2013 as if each acquisition was made on January 1, 2013
ESG | Clear and Focused Operational and Investment Strategy

Develop market leadership in niche sectors through operational


Extend services and product line offerings in each geographical area

Spending focused on highest margin services and products and longest-

lived portion of the well lifecycle

Pursue investments that deliver +25% EBIT margins

New spending evaluated on a regional basis against current rates,

utilizations, and competitive environment

Utilize one company asset management strategy to deploy equipment

and expertise in most active basins and where customers operate

Acquisition of smaller regional competitors and companies that provide

clear synergies, margin enhancement, and capabilities enhancement

Strong Financial Position and Manageable Leverage

At separation KLX will be capitalized with $1.2 billion of senior unsecured notes
and will have more than $450 million of available cash on balance sheet

Pro Forma
LTM Adj.
(US$ in million) 30-Sep-2014 EBITDA1

Cash2 $334
Solid capital
$500 million Credit Facility 0

Over $800 million of

New Senior Unsecured Notes 1,200 3.0x available liquidity3

Total Debt $1,200 3.0x

No funded debt
Net Debt (Net Leverage) $866 2.2x maturities until 2022

Total Liquidity3 $834

1 Assumes PF LTM September 30, 2014 Adj. EBITDA of $398 million

2 Cash pro forma for planned financing activities expected to be completed contemporaneous with separation. KLX cash balance excludes $102 million reserved against earnout
payments expected to be made in February 2015 and $30 million of cash held in international accounts to support regional businesses
3 Total liquidity defined as cash plus available amount under Revolving Credit Facility

Disciplined Approach to Capital Deployment to Drive Growth

Strong KLX continues to generate strong results, with PF LTM revenues as of September 30,
Financial 2014 of $1.7 billion and PF Adj. EBITDA of $398 million, or a 23.2% margin
Results Strong historical revenues growth (17% CAGR since 2011) and margin expansion

Reinvest organically to support above-market growth rates

Capital investments target operating margins of 18-20%
Approach ASG: Investment in inventory to support new programs, customers, and high margin
to Capital products
Investment ESG: Capital expenditures focused on highest margin services and products, and the
and Growth longest lived portion of the well lifecycle, completion and production

Selectively pursue accretive investments

Prudent View BB rating as optimal through the cycle and are focused on maintaining that rating
Leverage KLX will be levered at approximately 3.0x LTM Adj. EBITDA at the time of separation
Significant Target net leverage of 2.0 to 2.5x
Flexibility Appropriate given cyclicality of business and M&A priorities

2015 to 2017 | Three-Year Targets

Balance sheet flexibility to support attractive investment opportunities

2015 Guidance 2015 to 2017 Targets

~$1.8 - $1.9 billion High-single digit

Growth of ~10% organic revenues CAGR

~$460 million (~24% margin) ~11% - 13% CAGR

Adj. EBITDA1 Growth of ~11% - 13% ~24%+ margins

20%+ organic
EPS ~$3.08 per diluted share

Adjusted 20%+ organic

~$4.60 per diluted share

Balance Strong initial liquidity BB rating and

and appropriate leverage 2.0x to 2.5x net debt / Adj. EBITDA
Guidance for fiscal years ending January 31
1 Adjusted EBITDA as defined excludes non-cash compensation, and acquisition, integration, and transition (AIT) costs
2 Adjusted EPS excludes ~$33 million of amortization expense, ~$25 million of one-time costs associated with post spin-off activities, ~$11 million of non-cash compensation costs. Also reflects ~35 million

annual cash tax benefit related to the amortization of goodwill for income tax purposes
3 Guidance assumes an average cost of a barrel of oil of at least ~$70 31
Key Investment Highlights

Track Record
Premier Aerospace Leading Provider of
of Successful
& Energy Services Complex Logistical
Platform Solutions

Track Record of
Strong End Market
Revenues Growth
Growth Across Key
and Margin
End Markets

Flexible Balance
Sheet to Support

Non-GAAP EBITDA Reconciliation

Operating Earnings $ 299
Depreciation and Amortization 69
Employee Stock-Based Compensation 4
Acquisition, Repositioning & Restructuring Costs 26
Adjusted EBITDA $ 398

2011 2012 2013 2014
Operating Earnings $ 184 $ 218 $ 239 $ 228
Depreciation and Amortization 19 26 29 30
Employee Stock-Based Compensation 5 3 4 3
Acquisition, Repositioning & Restructuring Costs 5 17 19 16
Adjusted EBITDA $ 213 $ 264 $ 291 $ 277

2013 2014
Operating Earnings $ 48 $ 71
Depreciation and Amortization 41 39
Employee Stock-Based Compensation - 1
Acquisition, Repositioning & Restructuring Costs 2 10
Adjusted EBITDA $ 91 $ 121

Income Tax Attributes

KLX is expected to be a highly profitable, U.S. centric company that is subject to U.S. taxes

KLX will have a much lower cash tax rate than its reported book tax rate

Upon the spin, KLX will have approximately $1.2 billion of tax deductible goodwill that will be utilized to reduce the
cash taxes owed by the Company

The tax goodwill will provide a tax deduction of approximately $105 million per annum through the first nine years
and $30 million per annum thereafter through year 15, which would increase cash flow by $37 million and $11
million per annum over those respective time frames

($mm) Total 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
Approx. Annual Tax
$1,205 $53 $105 $105 $105 $105 $105 $105 $105 $105 $105 $68 $30 $30 $30 $30 $15
Deductible Amortization

Cash Tax Savings 422 18 37 37 37 37 37 37 37 37 37 24 11 11 11 11 5

Present Value of Cash Tax Savings: $254 - $277 million2

Assumes a 15 year life and reflects an expected cash tax rate of 35%. Exact amount will differ slightly as various tax assets have different lives and amounts
Assumes 35% tax rate and 8 - 10% discount rate using midyear convention. Exact amount will differ slightly as various tax assets have different lives and amounts