Kaman Annual Report 2014

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FY2014 Annual Report · Kaman

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AS WE ENTER OUR 70TH YEAR, OUR FOCUS IS

SQUARELY ON THE FUTURE.

In 1945, Charles Kaman, a self-described “headstrong

twenty-six year old,” founded Kaman Aircraft Corporation

in the garage of his mother’s West Hartford, Connecticut

home. His goal: demonstrate a new rotor concept he

devised to make helicopters more stable and easier to fly.

Within two years the K-125 helicopter was in the air.

2015
2015

Seventy years later, our founder’s spirit of invention and

determination continue to inspire everyone at Kaman.

Pushing beyond the expected to create and deliver

something new and better for our customers is a driving

force behind our continued momentum.

IN OUR

2014

ANNUAL REPORT,
WE CELEBRATE
70 YEARS OF
BREAKTHROUGHS.
BUILDING A
FUTURE
THROUGH
INNOVATION.

Bloomfield, Connecticut

(860) 243–7100

www.kaman.com

K A M A N C O R P O R A T I O N A N N U A L R E P O R T 2 0 1 4

282102_CS_NARR_R3.indd 1

2/19/15 1:43 PM

1420

Bloomfield, Connecticut

(860) 243–7100

www.kaman.com

IN OUR

2014

ANNUAL REPORT,
WE CELEBRATE
70 YEARS OF
BREAKTHROUGHS.
BUILDING A
FUTURE
THROUGH
INNOVATION.

194
2015

K A M A N C O R P O R A T I O N A N N U A L R E P O R T 2 0 1 4

AS WE ENTER OUR 70TH YEAR, OUR FOCUS IS

SQUARELY ON THE FUTURE.

In 1945, Charles Kaman, a self-described “headstrong

twenty-six year old,” founded Kaman Aircraft Corporation

in the garage of his mother’s West Hartford, Connecticut

home. His goal: demonstrate a new rotor concept he

devised to make helicopters more stable and easier to fly.

Within two years the K-125 helicopter was in the air.

2015

Seventy years later, our founder’s spirit of invention and

determination continue to inspire everyone at Kaman.

Pushing beyond the expected to create and deliver

something new and better for our customers is a driving

force behind our continued momentum.

282102_CS_NARR_R3.indd 1

2/19/15 1:43 PM

14“ We have always been

a company focused on

the future, developing

strategies that will

enable us to meet the

changing needs of the

industries we serve.”

Neal J. Keating
Chairman, President and
Chief Executive Officer

282102_CS_NARR_R3.indd 2

2/19/15 1:43 PM

DEAR SHAREHOLDERS,

As you read this letter, Kaman is marking our 70th
year in business. There is much to celebrate.
We have grown from a single breakthrough idea
from a legendary aerospace entrepreneur into a
global provider of highly engineered aerospace
and industrial products serving a broad range of
end markets. Our 4,800 employees in more than
260 locations are among the most dedicated,
innovative and loyal anywhere, inspired by the
spirit and wisdom of our founder, Charles Kaman.

This important milestone is less a reason to
look back than it is an opportunity to look
toward the future. How will we sustain—and
accelerate—the strong momentum we’ve built
up over the past several years? How can we
deliver even more value to our customers across
all of our businesses? How will we create a more
prosperous and more innovative company for our
customers, our shareholders, our colleagues and
our communities? These are the questions that
inspire all of us at Kaman to build on our 70-year
foundation to achieve even greater success.

As we enter our eighth decade, we continue to
execute on a business strategy that has delivered
solid results. In 2014, Kaman reported net
earnings from continuing operations of $65.8
million, or $2.37 per diluted share, compared to
$59.1 million, or $2.17 per diluted share, in 2013,
an increase of 9.2%. Net sales from continuing
operations for 2014 increased 8.5% to $1.79
billion, compared to $1.65 billion in 2013. I am
pleased that both Aerospace and Distribution

delivered improved margin performance, and
that Distribution delivered another year of organic
sales growth in a challenging environment. In
addition to improved margins, we generated
very strong free cash flow during the year:
$80.8 million from continuing operations in
2014, compared to $24.0 million during 2013,
and 2014 marked the 45th consecutive year of
dividend payments by Kaman.

These results reflect our long-term commitment
to improving financial performance. We focus
on driving strong top-line growth while delivering
earnings growth through building scale and
implementing operating efficiencies. Increasing
cash flow to finance future growth remains a
core commitment.

I believe our 2014 results demonstrate that
Kaman is strategically positioned for future
success. We have an outstanding portfolio of
intellectual property and technological know-
how across our Aerospace businesses, and our
Distribution business is aligned with best-in-class
vendors. Our ongoing investments in infrastructure
and technology, combined with our relentless
focus on innovation and operational excellence,
position us to drive greater efficiencies and
increase financial performance. Our disciplined
acquisition approach continues to play an integral
role supporting our strategy while improving the
scale, building capabilities and enhancing the
financial performance of our company.

Distribution
In the Distribution segment, our three-platform
product strategy is beginning to deliver results.
The three product platforms—Bearings and Power
Transmission; Fluid Power; and Automation,
Control, and Energy (AC&E)—differentiate Kaman
in the marketplace and enable us to better deliver
broader technical solutions to our customers. The
success of this strategy is evident in the progress
we are making toward our long-term objectives.
Distribution revenues from continuing operations
rose 11.7% in 2014 to $1.16 billion, from $1.04
billion in 2013, almost double our revenues in
2009. Operating profit from continuing operations
for 2014 was $56.8 million, an increase of 22.9%
from $46.2 million in 2013. Operating margins
from continuing operations reached 4.9% in
2014, up from 4.4% in 2013.

In April we completed the acquisition of
B.W. Rogers, the largest single distribution
acquisition in Kaman’s history. B.W. Rogers is
a broad line distributor of fluid power products,
including hydraulic hoses, fittings, pumps,
motors, cylinders, valves, pneumatics, machine
control and automation products. The acquisition
significantly enhances our fluid power and
AC&E product platforms. B.W. Rogers is one of
the largest and longest serving distributors of
Parker Hannifin motion and control products
and operates from twenty-one locations in seven
states. B.W. Rogers shares our commitment
to service, technical expertise, system design
and support, and the acquisition provides new
industry exposure in the automotive sector. With
this acquisition, Kaman owns one of the largest
networks of ParkerStores, with thirty locations
across the U.S. and Puerto Rico, including a
contiguous territory from the Northeast through
the Midwest, further strengthening our position
and commitment to serve our customers with
premium fluid power products and services.
The acquisition also added more than 200
talented and dedicated employees to our team.

Our acquisitions over the last several years,
including Catching, Minarik and Zeller, continue
to perform well. In fact, identifying strategic
acquisitions and integrating them into the
Distribution platform is a core capability at
Kaman, and one that will continue to serve us
well in the future.

In 2014 we launched an important growth
initiative to hire approximately 50 additional
salespeople to accelerate revenue growth
and capitalize on market opportunities. We
successfully integrated these new salespeople
during 2014, and we are confident they will
positively impact our 2015 results. During
2014, we also began the rollout of our new ERP
system at our AC&E Minarik operations. The
rollout represents a significant milestone for the
project, and while we experienced near-term
challenges, the implementation overall was a
success. Distribution’s ERP project is a multi-
year investment that will play an important role
in reaching our goal of 7%+ operating margins.

Looking ahead, a number of trends hold promise
for significant long-term growth in Distribution.
On the supplier front, consolidation favors larger
national service providers like Kaman. There is
an increasing need for value-added services,
precisely the type of solutions that we have
been building—and delivering—over the past
several years. The remarkable increase in factory
automation will drive the need for new fluid
power and high-speed automation solutions, a
trend that fits our core strengths. Finally, despite
consolidation among service providers, industrial
distribution remains a largely fragmented market,
offering opportunities for Kaman to make strategic
acquisitions that increase our geographic
coverage, product capabilities and overall scale.

Aerospace
Similar to Distribution, Aerospace turned in a
solid performance in 2014, continuing a strong
five-year run. Revenues for 2014 were $633.0
million, an increase of 3.1% from 2013 revenues
of $614.0 million. Operating profit for 2014 was
$108.7 million, compared to $102.6 million in
2013, an increase of 6.0%. This represents a
five-year compound annual growth rate of 13%
in operating profit dollars.

Our Specialty Bearings business continues to
deliver outstanding performance. We established
a strong position on the Airbus A350 and
a number of other new programs that will
provide long-term growth. During the year we
opened our new state-of-the-art bearings facility
in Höchstadt, Germany. This new facility will play
an important role in expanding our relationships
with Airbus and Boeing and positions the
business to capitalize on the strong commercial
aerospace outlook.

The first flight of the SH-2G(I) helicopter for New
Zealand took place in April and marked a key step
in the program that will provide the Royal New
Zealand Navy with ten state-of-the-art Seasprite
helicopters. The acceptance of the first helicopter
by New Zealand took place in early December,
and the first three aircraft have now arrived in
Auckland. We also signed a contract to support
a program to provide Peru with five Seasprites
that are currently in the New Zealand fleet. Once
the Peru program is completed, the SH-2 flying
fleet will have grown by more than 40% in less
than three years, providing Kaman with increased
service and support opportunities.

We are investing for the future in our Aerosystems
business, as highlighted by the opening of a new
tooling facility in the United Kingdom last spring.
Significant progress has also been made through
our One Kaman approach, demonstrating that we
are a cohesive, integrated supplier with a broad
range of capabilities. One noteworthy milestone:

the first delivery of a 747-8 wing-to-body fairing—
on schedule and on budget.

Precision Products had a very good year, led
by continued strong orders and volume for
the highly reliable joint programmable fuze
(JPF). In fact, the JPF field reliability remains
high: 99.27% with the U.S. Air Force since its
introduction to service. Among significant new
orders are contract modifications for the JPF
with the U.S. Air Force worth $94 million; these
resulted in a JPF backlog at the end of the year of
approximately $115 million. In addition to the U.S.
Air Force, for which Kaman has been the sole
provider of the JPF since 2002, Kaman provides
the JPF to twenty-six other nations.

The unmanned K-MAX® completed its life-saving
work in Afghanistan and returned to the U.S.
after a very successful 33-month deployment.
We continue to work with our partner Lockheed
Martin toward establishing a program of record for
the acquisition of additional unmanned K-MAX®
aircraft by the U.S. Government. In addition,
we are exploring the potential for utilizing the
transformational capabilities and technology of the
unmanned K-MAX® to fight forest fires for the U.S.
government. Finally, we are assessing the market
potential for new build K-MAX® aircraft for the
commercial market, and are in discussions with
several prospective customers.

A number of industry trends point to opportunities
for Kaman Aerospace in the coming years. OEMs
and Tier 1 manufacturers are increasingly turning
to outsourcing partners to boost their operating
efficiency and improve quality. New platforms
have higher bearing content, and increasing
commercial build rates are driving bearing and
aerostructure revenues. We expect defense
spending to remain under pressure, but believe
new commercial programs will continue to provide
offset to headwinds in defense spending.

As we enter our eighth decade, coming off a
strong year across the company, the words of
our founder seem particularly appropriate:

“Today’s products and services are
sophisticated, complex and involved far
beyond the most visionary expectations I had
as our first product, the K-125 helicopter, first
flew in January 1947. But what we built then
and what we do now both represent the very
highest degrees of excellence, innovation,
quality and technical sophistication
of their times. I firmly believe that our
accomplishments will continue indefinitely.”

— Charles H. Kaman

Excellence. Innovation. Quality. Technical
sophistication. These are the pillars upon which
Kaman has been built over the past 70 years. And
they will be the pillars of our future growth.

As always, I am deeply grateful for the loyalty of
our customers, the talent and dedication of our
employees, the support of our Board of Directors,
and the confidence of our shareholders.

Neal J. Keating
Chairman, President and
Chief Executive Officer

Operational Excellence
Across both Distribution and Aerospace, we have
a rigorous focus on improving our operations
so that we can deliver increased value to our
customers while achieving greater efficiency.
Our ERP expenditures in both segments exemplify
our commitment to making the investments that
will deliver real operational improvements in the
future. Our new facilities in the United Kingdom
and Germany will similarly drive leaner, higher
quality operations. We continue to invest heavily
in automation technologies such as robotics to
improve quality while reducing production costs.
Together these investments enable us to remain
competitive in the marketplace and continue to
improve operating margins.

Operational excellence is about more than
processes, facilities and technology. It is about
people. We continue to invest in developing
the industry’s finest team and instilling a high
performance culture across our global operations.
We remain committed to our Kaman Leadership
Development Program and have instituted
curricula in supply chain management, technical
sales and engineering and program management.

Building for the Future
Beyond financial performance and the success
of any one program, 2014 demonstrated the
strength of our long-term strategies, which focus
on four overarching imperatives: developing
strong leadership, growing organically, focusing
on operational excellence, and executing on
strategic acquisitions. In Distribution, our three-
platform product strategy, with a $35 billion
addressable market, shows tremendous promise
for the future. In Aerospace, our unique set
of proprietary products and capabilities has
made us a critical part of the global aerospace
market, and has led to a robust pipeline of
future opportunities.

“ One of the first steps in any
new endeavor is overcoming
the discouraging advice that
it can’t be done.”

Charles H. Kaman
Founder

TODAY we continue to find

inspiration in the words and spirit of our

founder. Innovation drives every facet of

our business, from finding new ways to

increase efficiency to improving customer

service to creating new solutions that

make our customers more successful.

A problem with salt corrosion

from maritime missions on the

SH-2 fleet in Vietnam led Kaman

engineers to invent the KAcarb

self-lubricated airframe bearing.

This was the start of what became

Kamatics, whose self-lubricated

bearings are now used on virtually

every aircraft manufactured today.

1965

1974

BREAKTHROUGH

TECHNOLOGY

Kaman engineers develop the

next generation bearing liner
system, Teflon-based KAron,®
which has proven effective in the

most demanding aviation, marine,

and industrial applications.

C E L E B R AT I N G 7 0 Y E A R S O F I N N O VAT I O N

BREAKTHROUGH
TECHNOLOGY

TODAY Kaman Specialty Bearings continues to build on the

breakthrough innovations of earlier generations. Through six decades,

our consistently reliable products have provided longer life and lower

maintenance costs, even in areas of high moisture, fluid/debris

contamination and elevated temperatures. In 2014, we opened a new

facility in Höchstadt, Germany, which doubled bearing manufacturing

capacity in Europe and provides a state-of-the-art platform for creating

a new generation of innovations in bearings and engineered products.

Kaman pioneers pilotless

helicopter flight with the HTK-1,

the world’s first remote control

helicopter. The modified HTK-1

builds on the hands-off flying

already possible with the HTK. A

broadcast of the flight on the “You

Asked for It” television program

captures public imagination.

1957

2010-2014

ENGINEERING

EXCELLENCE

The K-MAX® unmanned aircraft
system from Kaman and

Lockheed Martin enables Marines

in Afghanistan to deliver supplies

day or night to precise locations

without risking the lives of pilots.
The K-MAX® carried more than
3.5 million pounds on over

1,300 missions.

C E L E B R AT I N G 7 0 Y E A R S O F I N N O VAT I O N

ENGINEERING
EXCELLENCE

TODAY the spirit of innovation that led to the first unmanned

helicopter flight lives on in the engineers of Kaman Aerospace.

This is why aviation leaders and governments continue to work with

us. Most recently, we demonstrated to the U.S. Forest Service of the

Department of the Interior how the unmanned K-MAX® can be used

to fight forest fires, with the potential to reduce loss of life to both

pilots and firefighters.

Beginning in the 1950s, the

world’s largest and best-known

aerospace companies have

looked to Kaman as a reliable

partner for sub-contracting.

Among our earliest contracts were

agreements to produce parts for

the McDonnell F-101, Grumman

aircraft, and others.

1950s

1986

OPERATIONAL

EXCELLENCE

Kaman begins producing the

fixed trailing edge assembly for

the 767. To date, Kaman has

delivered more than a thousand

767 assemblies to Boeing.

C E L E B R AT I N G 7 0 Y E A R S O F I N N O VAT I O N

OPERATIONAL
EXCELLENCE

TODAY the pursuit of operational excellence continues to

drive everyone at Kaman Aerospace, leading to deeper relationships

with the world’s top aerospace companies. Our early work for Boeing

on the fixed trailing edge has led to a new contract with Boeing on its

767-based KC-46A U.S. Air Force tanker. Our contract with Boeing

for the manufacture and assembly of two major sections of the

747-8 wing-to-body fairing, part of a long-standing and expanding

relationship with Boeing, is ahead of schedule and under budget.

1945

1992

VISIONARY LEADERSHIP

“What makes Kaman different is

people. Now, you can go to a lot

of companies and you just don’t

find the spirit, the dedication,

the willingness to work and

achieve, and the satisfaction in

achievement, that you find here.”

Charles H. Kaman

With the appointment of

Jack Cahill as president,

Kaman Industrial Technologies

is unified under a common

name, IT platform and

distribution network … and

growth accelerates.

C E L E B R AT I N G 7 0 Y E A R S O F I N N O VAT I O N

VISIONARY LEADERSHIP

TODAY outstanding talent has been instrumental in the growth of

Kaman. Two leaders, one a Kaman veteran, the other new to the company,

exemplify this. Rob Paterson, President of Kamatics, joined Kaman in

1980 as a second generation employee. Rob has led his division to global

leadership and is a superb ambassador for the spirit of innovation and

partnership that have characterized Kaman since our founding.

In 2014, Tribby Warfield was named Senior Vice President and General

Manager of the Fluid Power platform of our Distribution segment. Tribby

joined Kaman from Gates Corporation, where she most recently served

as President, North American Commercial.

Kaman acquires Catching Fluid

Power, a leading tri-motion

distributor of Parker Hannifin

fluid power products based

in Bolingbrook, IL. With this

acquisition, Kaman is recognized

as a value-added reseller of

Parker products across the U.S.

1971

2011

A COMPLETE PLATFORM

With the acquisitions of Reliable

Bearing and Supply Co. of San

Bernardino, CA and Western

Bearings Inc. of Salt Lake City,

UT, Kaman enters the industrial

distribution business.

C E L E B R AT I N G 7 0 Y E A R S O F I N N O VAT I O N

A COMPLETE PLATFORM

TODAY Kaman Distribution is one of North America’s largest

industrial distributors, focusing on three robust platforms: Bearings and

Power Transmission; Fluid Power; and Automation, Control, and Energy.

Together, these platforms address a $35 billion market.

Kaman brings added value to customers by offering single-source

responsibility and accountability for a comprehensive portfolio of product

lines. With a reputation for leadership and technical expertise, Kaman

offers solutions that go beyond the role of a traditional product provider

to deliver a reduction in the total cost of doing business.

Kaman begins a relationship

with a $6 billion global consumer

products company by supplying

a single location—a northeastern

paper mill.

1976

1999

The relationship with the

customer has grown steadily,

resulting in a National Account

agreement to supply all of the

company’s manufacturing

facilities throughout the U.S.

and Canada.

SUPERB

CUSTOMER SERVICE

C E L E B R AT I N G 7 0 Y E A R S O F I N N O VAT I O N

SUPERB
CUSTOMER SERVICE

TODAY the global consumer products company, with sales

in excess of $80 billion, is Kaman Distribution’s largest customer,

encompassing more than 30 facilities. A Kaman customer service center

in Louisville receives orders electronically. The Louisville center processes

orders and coordinates with all Kaman account managers, who provide

customer service to fulfill the needs of each customer location. This

deepening relationship reflects a commitment to outstanding service and

innovation that began in the earliest days of Kaman Distribution. With more

than 100 National Account relationships, Kaman is a value-added partner

to many of North America’s largest and most demanding companies.

With the launch of a new

warehouse management

system, Kaman Distribution

is able to provide even better

service to customers while

enhancing productivity.

1993

1997

OPERATIONAL

EXCELLENCE

Reflecting a deep commitment

to improving operational

efficiency, Kaman Distribution

opens an 80,000 square

foot central warehouse in

Albany, NY, replacing three

smaller, less efficient northeast

warehouses that came to Kaman

through acquisitions.

C E L E B R AT I N G 7 0 Y E A R S O F I N N O VAT I O N

OPERATIONAL
EXCELLENCE

TODAY Kaman Distribution’s commitment to continuous

improvement has reduced the footprint of distribution centers and

lowered staffing levels. Equally as important, increased quality is

evidenced by an accuracy rate of 99.982%. Innovations continue

to make Distribution a lean, nimble competitor, including random

storage, wireless bar coding, optimized floor space techniques and

cutting-edge supply chain strategies.

As we commemorate 70 years of innovation, leadership
and dedicated customer service, our focus will never stray
from what is most important:

TOMORROW

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2014

Commission File No. 001-35419

KAMAN CORPORATION
(Exact name of registrant as specified in its charter)

Connecticut
(State or other jurisdiction
of incorporation or organization)

06-0613548
(I.R.S. Employer
Identification No.)

1332 Blue Hills Avenue
Bloomfield, Connecticut 06002
(Address of principal executive offices)

Registrant's telephone number, including area code: (860) 243-7100

Securities registered pursuant to Section 12(b) of the Act:

Title of each class
Common Stock ($1 par value)

Name of each exchange on which registered
New York Stock Exchange LLC

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange
Act. Yes

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes

Indicate by checkmark whether the registrant has submitted electronically and posted on its corporate web site, if any, every
Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such
files). Yes

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (Section 229.405 of this
chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated herein by reference in Part III of this Form 10-K or any amendment to this Form 10-K

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a
smaller reporting company. See definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in
Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes

The aggregate market value on June 27, 2014, (the last business day of the Company’s most recently completed second quarter)
of the voting common stock held by non-affiliates of the registrant, computed by reference to the closing price of the stock, was
approximately $1,134,777,043.

At January 30, 2015, there were 27,140,073 shares of Common Stock outstanding.

Documents Incorporated Herein By Reference
Portions of our definitive proxy statement for our 2015 Annual Meeting of Shareholders are incorporated by reference into Part
III of this Report.

Kaman Corporation
Index to Form 10-K

Part I

Item 1

Business...............................................................................................................................................................

Item 1A

Risk Factors .........................................................................................................................................................

Item 1B

Unresolved Staff Comments................................................................................................................................

Item 2

Item 3

Item 4

Item 5

Item 6

Item 7

Properties.............................................................................................................................................................

Legal Proceedings ...............................................................................................................................................

Mine Safety Disclosures......................................................................................................................................

Part II

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities .............................................................................................................................................................

Selected Financial Data .......................................................................................................................................

Management’s Discussion and Analysis of Financial Condition and Results of Operations..............................

Item 7A

Quantitative and Qualitative Disclosures About Market Risk ............................................................................

Item 8

Item 9

Financial Statements and Supplementary Data ...................................................................................................

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure..............................

Item 9A

Controls and Procedures......................................................................................................................................

Item 9B

Other Information................................................................................................................................................

Part III

Item 10

Directors, Executive Officers and Corporate Governance ..................................................................................

Item 11

Executive Compensation .....................................................................................................................................

Item 12

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters ...........

Item 13

Certain Relationships and Related Transactions, and Director Independence ....................................................

Item 14

Principal Accounting Fees and Services..............................................................................................................

23
25

107

108

Item 15

Exhibits, Financial Statement Schedules.............................................................................................................

109

Part IV

ITEM 1.

BUSINESS

GENERAL

PART I

Kaman Corporation, headquartered in Bloomfield, Connecticut, was incorporated in 1945. We are a diversified company that
conducts business in the aerospace and distribution markets. We report information for ourselves and our subsidiaries
(collectively, “we,” “us,” “our,” and “the Company”) in two business segments, Distribution and Aerospace. A discussion of
2014 developments is included in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of
Operations, in this Form 10-K.

Distribution Segment

The Distribution segment brings our commitment to technological leadership and value-added services to the distribution
business. The Distribution segment is a leading power transmission, motion control, electrical and automation, and fluid power
industrial distributor with operations throughout the United States. We provide products including bearings, mechanical and
electrical power transmission, fluid power, motion control, automation, material handling components, electrical control and
power distribution, and MRO supplies to a broad spectrum of industrial markets throughout the United States. Locations consist
of over 240 branches, distribution centers and call centers across the United States (including Puerto Rico). We offer
approximately four million items, as well as value-added services, to over 65,000 active customers representing a highly
diversified cross section of North American industry.

Aerospace Segment

The Aerospace segment produces and/or markets proprietary aircraft bearings and components; complex metallic and
composite aerostructures for commercial, military and general aviation fixed and rotary wing aircraft; safe and arming solutions
for missile and bomb systems for the U.S. and allied militaries; subcontract helicopter work; support for our SH-2G Super
Seasprite maritime helicopters and K-MAX® manned and unmanned medium-to-heavy lift helicopters; and engineering design,
analysis and certification services.

Principal customers include the U.S. military, Sikorsky Aircraft Corporation, The Boeing Company, Bell Helicopter, Airbus,
Lockheed Martin and Raytheon. The SH-2G aircraft is currently in service with the Egyptian Air Force and the New Zealand
and Polish navies. Operations are conducted throughout the United States, as well as in facilities located in the United
Kingdom, Germany and Mexico. Additionally, the Company maintains an investment in a joint venture in India.

FINANCIAL INFORMATION ABOUT OUR SEGMENTS

Financial information about our segments is included in Item 7, Management’s Discussion and Analysis of Financial Condition
and Results of Operations, and Note 19, Segment and Geographic Information, of the Notes to Consolidated Financial
Statements, included in Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K.

WORKING CAPITAL

A discussion of our working capital is included in Item 7, Management’s Discussion and Analysis of Financial Condition and
Results of Operations – Liquidity and Capital Resources, in this Form 10-K.

Our Distribution segment requires substantial working capital related to accounts receivable and inventories. Significant
amounts of inventory are carried to meet our customers’ requirements. Sales returns do not have a material effect on our
working capital requirements.

Our Aerospace segment’s working capital requirements are dependent on the nature and life cycles of the programs for which
work is performed. New programs may initially require higher working capital to complete nonrecurring start-up activities and
fund the purchase of inventory and equipment necessary to perform the work. Non-recurring start-up costs on large and
complex programs often take longer to recover, negatively impacting working capital in the short-term and producing a
corresponding benefit in future periods. As these programs mature and efficiencies are gained in the production process,
working capital requirements generally decrease.

Our credit agreement includes a revolving credit facility which is available for additional working capital requirements and
investment opportunities. See Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations,
and Note 11, Debt, of the Notes to Consolidated Financial Statements, included in Item 8, Financial Statements and Supplementary
Data, of this Annual Report on Form 10-K.

PRINCIPAL PRODUCTS AND SERVICES

The following is information for the three preceding years concerning the percentage contribution of each business segment’s
products and services to consolidated net sales from continuing operations:

Years Ended December 31,
2013

2012

2014

Distribution ...............................................................................................................
Aerospace .................................................................................................................
Total...................................................................................................................

64.7%
35.3%
100.0%

62.9%
37.1%
100.0%

AVAILABILITY OF RAW MATERIALS

While we believe we have sufficient sources for the materials, components, services and supplies used in our manufacturing
activities, we are highly dependent on the availability of essential materials, parts and subassemblies from our suppliers and
subcontractors. The most important raw materials required for our aerospace products are aluminum (sheet, plate, forgings and
extrusions), titanium, nickel, copper and composites. Many major components and product equipment items are procured from
or subcontracted on a sole-source basis with a number of domestic and non-U.S. companies. Although alternative sources
generally exist for these raw materials, qualification of the sources could take a year or more. We are dependent upon the ability
of a large number of suppliers and subcontractors to meet performance specifications, quality standards and delivery schedules
at anticipated costs. While we maintain an extensive qualification system to control risk associated with such reliance on third
parties, failure of suppliers or subcontractors to meet commitments could adversely affect production schedules and contract
profitability, while jeopardizing our ability to fulfill commitments to our customers. Although high prices for some raw
materials important to some of our products (steel, copper, aluminum, titanium and nickel) may cause margin and cost
pressures, we do not foresee any near term unavailability of materials, components or supplies that would have an adverse
effect on either of our business segments. For further discussion of the possible effects of changes in the cost or availability of
raw materials on our business, see Item 1A, Risk Factors, in this Form 10-K.

PATENTS AND TRADEMARKS

We hold patents and trademarks reflecting functional, design and technical accomplishments in a wide range of areas covering
both basic production of certain aerospace products as well as highly specialized devices and advanced technology products in
defense related and commercial fields.

Although the Company's patents and trademarks enhance our competitive position, we believe that none of such patents or
trademarks is singularly or as a group essential to our business as a whole. We hold or have applied for U.S. and foreign patents
with expiration dates that range through the year 2027.

Registered trademarks of the Company include KAflex®, KAron®, and K-MAX®. In all, we maintain 18 U.S. and foreign
trademarks.

BACKLOG

The majority of our backlog is attributable to the Aerospace segment. We anticipate that approximately 79.9% of our backlog at
the end of 2014 will be performed in 2015. Approximately 57.5% of the Aerospace segment's backlog at the end of 2014 is
related to U.S. Government contracts or subcontracts.

Total backlog at December 31, 2014, 2013 and 2012, and the portion of the backlog we expect to complete in 2015, is as
follows:

Total Backlog at
December 31, 2014

2014 Backlog to be
completed in 2015

Total Backlog at
December 31, 2013

Total Backlog at
December 31, 2012

In thousands
Aerospace .........................
Distribution.......................
Total ...............................

518,025

70,154

588,179

399,916

70,154

470,070

601,954

50,667

652,621

531,923

47,607

579,530

Backlog related to uncompleted contracts for which we have recorded a provision for estimated losses was $3.0 million as of
December 31, 2014. There was no amount in backlog that was firm but not yet funded at December 31, 2014. See Item 7,
Management's Discussion and Analysis of Financial Condition and Results of Operations for further discussion.

REGULATORY MATTERS

Government Contracts

The U.S. Government ("USG"), and other governments, may terminate any of our government contracts at their convenience or
for default if we fail to meet specified performance measurements. If any of our government contracts were to be terminated for
convenience, we generally would be entitled to receive payment for work completed and allowable termination or cancellation
costs. If any of our government contracts were to be terminated for default, generally the USG would pay only for the work that
has been accepted and can require us to pay the difference between the original contract price and the cost to re-procure the
contract items, net of the work accepted from the original contract. The USG can also hold us liable for damages resulting from
the default.

During 2014, approximately 98.3% of the work performed by the Company directly or indirectly for the USG was performed
on a fixed-price basis and the balance was performed on a cost-reimbursement basis. Under a fixed-price contract, the price
paid to the contractor is negotiated at the outset of the contract and is not generally subject to adjustment to reflect the actual
costs incurred by the contractor in the performance of the contract. Cost reimbursement contracts provide for the
reimbursement of allowable costs and an additional negotiated fee.

Compliance with Environmental Protection Laws

Our operations are subject to and affected by a variety of federal, state, local and non-U.S. environmental laws and regulations
relating to the discharge, treatment, storage, disposal, investigation and remediation of certain materials, substances and wastes.
We continually assess our compliance status and management of environmental matters in an effort to ensure our operations are
in substantial compliance with all applicable environmental laws and regulations.

Operating and maintenance costs associated with environmental compliance and management of sites are a normal, recurring
part of our operations. These costs often are allowable costs under our contracts with the USG. It is reasonably possible that
continued environmental compliance could have a material impact on our results of operations, financial condition or cash
flows if more stringent clean-up standards are imposed, additional contamination is discovered and/or clean-up costs are higher
than estimated.

See Environmental Matters in Item 3, Legal Proceedings, and Critical Accounting Estimates - Environmental Costs in Item 7,
Management's Discussion and Analysis of Financial Condition and Results of Operations, and Note 16, Commitments and
Contingencies, in the Notes to Consolidated Financial Statements, included in Item 8, Financial Statements and Supplementary
Data, of this Annual Report on Form 10-K, for further discussion of our environmental matters.

With respect to all other matters that may currently be pending, in the opinion of management, based on our analysis of relevant
facts and circumstances, we do not believe that compliance with relevant environmental protection laws is likely to have a
material adverse effect upon our capital expenditures, earnings or competitive position. In arriving at this conclusion, we have
taken into consideration site-specific information available regarding total costs of any work to be performed, and the extent of
work previously performed. If we are identified as a “potentially responsible party” (PRP) by environmental authorities at a
particular site, we, using information available to us, will also review and consider a number of other factors, including: (i) the
financial resources of other PRPs involved in each site, and their proportionate share of the total volume of waste at the site; (ii)
the existence of insurance, if any, and the financial viability of the insurers; and (iii) the success others have had in receiving
reimbursement for similar costs under similar insurance policies issued during the periods applicable to each site.

International

Our international sales are subject to U.S. and non-U.S. governmental regulations and procurement policies and practices,
including regulations relating to import-export control, investment, exchange controls and repatriation of earnings. International
sales are also subject to varying currency, political and economic risks.

Section 219 of the Iran Threat Reduction and Syria Human Rights Act of 2012 ("ITRA") added subsection (r) to section 13 of
the Securities Exchange Act of 1934, as amended, (the "Exchange Act"), requiring a public reporting issuer to disclose in its
annual or quarterly reports whether it or any of its affiliates have knowingly engaged in specified activities or transactions
relating to Iran, including activities not prohibited by U.S. law and conducted outside the U.S. by non-U.S. affiliates in
compliance with local law. Issuers must also file a notice with the U.S. Securities and Exchange Commission ("SEC") if any
disclosable activities under ITRA have been included in the annual or quarterly report. We did not have any disclosable
activities for the year ended December 31, 2014.

COMPETITION

The Distribution segment competes for business with several other national distributors of bearings, power transmission,
electrical and fluid power products, two of which are substantially larger, and with many regional and local distributors and
Original Equipment Manufacturers ("OEMs"). Competitive forces have intensified due to the increasing trend towards national
contracts, customers' efforts to obtain material cost savings and the extension of supplier product authorizations within the
distribution channel. We compete for business based upon the breadth and quality of products offered, product availability,
delivery performance, and price, as well as on the basis of value-added services that we are able to provide.

The Aerospace segment operates in a highly competitive environment with many other organizations, some of which are
substantially larger than us and have greater financial strength and more extensive resources. We compete for composite and
metallic aerostructures subcontracts, helicopter structures, bearings and components business on the basis of price and quality;
product endurance and special performance characteristics; proprietary knowledge; the quality of our products and services; the
availability of facilities, equipment and personnel to perform contracts; and the reputation of our business. Competitors for our
business include small machine shops and offshore manufacturing facilities. We compete for engineering design services
business primarily on the basis of technical competence, the reputation of our business, the availability of our personnel and
price. We compete for advanced technology fuzing business primarily on the basis of technical competence, product quality and
price; and also on the basis of our experience as a developer and manufacturer of fuzes for particular weapon types and the
availability of our facilities, equipment and personnel. We are also affected by the political and economic circumstances of our
potential foreign customers.

RESEARCH AND DEVELOPMENT EXPENDITURES

Government funded research expenditures (which are included in cost of sales) were $1.6 million in 2014, $3.3 million in 2013,
and $7.8 million in 2012. Independent research and development expenditures (which are included in selling, general and
administrative expenses) were $6.7 million in 2014, $7.2 million in 2013, and $5.5 million in 2012.

EMPLOYEES

As of December 31, 2014, we employed 4,797 individuals.

FINANCIAL INFORMATION ABOUT GEOGRAPHIC AREAS

Financial information about geographic areas is included in Note 19, Segment and Geographic Information, of the Notes to
Consolidated Financial Statements, included in Item 8, Financial Statements and Supplementary Data, of this Annual Report on
Form 10-K.

AVAILABLE INFORMATION

We are subject to the reporting requirements of the Exchange Act and its rules and regulations. The Exchange Act requires us to
file reports, proxy statements and other information with the SEC. Copies of these reports, proxy statements and other
information can be read and copied at:

SEC Public Reference Room
100 F Street NE
Washington, D.C. 20549

Information on the operation of the Public Reference Room may be obtained by calling the SEC at 1-800-732-0330. The SEC
maintains a website that contains reports, proxy statements and other information regarding issuers that file electronically with
the SEC. These materials may be obtained electronically by accessing the SEC’s website at http://www.sec.gov.

We make available, free of charge on our website, our annual reports on Form 10-K, quarterly reports on Form 10-Q, proxy
statements, and current reports on Form 8-K as well as amendments to those reports filed or furnished pursuant to Section 13 or
15(d) of the Exchange Act, together with Section 16 insider beneficial stock ownership reports, as soon as reasonably
practicable after we electronically file these documents with, or furnish them to, the SEC. These documents are posted on our
website at www.kaman.com — select the “Investor Relations” link, then the "Financial Information" link and then the “SEC
Filings” link.

We also make available, free of charge on our website, our Certificate of Incorporation, By–Laws, Governance Principles and
all Board of Directors' standing Committee Charters (Audit, Corporate Governance, Personnel & Compensation and Finance).
These documents are posted on our website at www.kaman.com — select the “Investor Relations” link and then the "Corporate
Governance" link.

The information contained on our website is not intended to be, and shall not be deemed to be, incorporated into this
Form 10-K or any other filing under the Exchange Act or the Securities Act of 1933, as amended.

EXECUTIVE OFFICERS OF THE REGISTRANT

The Company’s executive officers as of the date of this report are as follows:

Name

Age Position

Prior Experience

Neal J. Keating

59 Chairman, President, Chief Executive

Officer and Director

Steven J. Smidler

56 President of Kaman Industrial

Technologies and Executive Vice President
of Kaman Corporation

Gregory L. Steiner

57 President of Kaman Aerospace Group, Inc.
and Executive Vice President of Kaman
Corporation

Ronald M. Galla

63 Senior Vice President and Chief

Information Officer

Mr. Keating was appointed President and Chief
Operating Officer as well as elected a Director of the
company effective September 17, 2007. Effective
January 1, 2008, he was appointed to the offices of
President and Chief Executive Officer and effective
March 1, 2008, he was appointed to the additional
position of Chairman. Prior to joining the company,
Mr. Keating served as Chief Operating Officer at
Hughes Supply, a $5.4 billion industrial distributor
that was acquired by Home Depot in 2006. Prior to
that, he held senior positions at GKN Aerospace, an
aerospace subsidiary of GKN, plc, and Rockwell
Collins Commercial Systems, and served as a board
member of GKN plc and Agusta-Westland.

Mr. Smidler assumed the role of President of Kaman
Industrial Technologies on September 1, 2010, after
joining the company in December 2009 as Senior
Vice President and Chief Operating Officer of
Kaman Industrial Technologies. Effective February
20, 2012, he was appointed Executive Vice President
of Kaman Corporation. Mr. Smidler joined the
company from Lenze Americas Corporation where
he served as Executive Vice President, with
responsibility for marketing, sales, finance, business
systems and product technology for the Americas.
Mr. Smidler was also a member of the management
committee of the Lenze Group, Germany, and held
the position of President and Treasurer for Lenze
Americas and served as Treasurer and a Board
member for the Lenze ACTech production company.
Prior to that, he served as Vice President, Americas
Sales Operations at Eaton Corporation and Vice
President, Marketing of the Global Manufacturing
Group at Rockwell Automation, Inc.

Mr. Steiner joined the company as President of
Kaman Aerospace Group, Inc., with overall
responsibility for the company's Aerospace segment,
effective July 7, 2008. Effective February 20, 2012,
he was appointed Executive Vice President of
Kaman Corporation. From 2005 to 2007, Mr. Steiner
was employed at GE Aviation-Systems, serving first
as Vice President and General Manager, Military
Mission Systems and then as Vice President,
Systems for GE Aviation-Systems. Prior to that, he
served as Group Vice President at Curtiss-Wright
Controls, Inc., with responsibility for four aerospace
and industrial electronics businesses located in the
U.S. and U.K. Before Curtiss Wright, he had an 18
year career with Rockwell Collins, Inc., serving in a
number of progressively responsible positions,
departing as Vice President and General Manager of
Passenger Systems.

Mr. Galla has been Senior Vice President and Chief
Information Officer since 1995. Mr. Galla has been
responsible for the Company's management
information systems since 1984.

Name

Age Position

Prior Experience

Phillip A. Goodrich

58 Senior Vice President - Corporate

Development

Mr. Goodrich, joined the company in 2009 as Vice
President - Corporate Development and was named
Senior Vice President - Corporate Development in
February 2012. He was previously Senior Vice
President, Corporate Development with Barnes
Group, Inc., Bristol, Connecticut. Mr. Goodrich held
similar positions with Ametek, Inc., Paoli,
Pennsylvania; and General Signal Corporation,
Stamford, Connecticut.

Shawn G. Lisle

48 Senior Vice President and General Counsel Mr. Lisle joined the company in 2011 and was

appointed Senior Vice President and General
Counsel effective December 1, 2012. Prior to joining
the company, Mr. Lisle served as Senior Counsel for
International Paper Company in Memphis,
Tennessee. Prior to that, he served as legal counsel
for Dana Corporation in Toledo, Ohio, and as an
attorney at Porter Wright Morris & Arthur LLP in
Columbus, Ohio. He also previously worked as a
trial attorney at the U.S. Department of Justice, Tax
Division in Washington, D.C. and was a Judge
Advocate in the U.S. Navy.

Mr. Starr was appointed Senior Vice President and
Chief Financial Officer effective July 1, 2013. Mr.
Starr joined the company in 2009 as Vice President -
Treasurer. Prior to joining Kaman, Mr. Starr served
as Assistant Treasurer at Crane Co. of Stamford,
Connecticut, a $2.6 billion diversified manufacturer
of highly engineered industrial products. He also
previously served as Managing Director, Corporate
Finance at Aetna, Inc. of Hartford, Connecticut and
as Director, Capital Markets and Risk Management
at Fisher Scientific International, Inc. of Hampton,
New Hampshire. Mr. Starr was also an associate at
both Salomon Smith Barney in New York and Chase
Securities, Inc. in New York and Singapore.

Mr. Troy joined the company as Senior Vice
President – Human Resources in March 2012. On
February 19, 2013, he was appointed to the position
of Chief Human Resources Officer. Prior to joining
the company, Mr. Troy served as Chief Human
Resources Officer of Force Protection, Inc. from
April 2011 to March 2012 , where he was a member
of the Executive Committee. Prior to joining Force
Protection, Mr. Troy served as Vice President and
Chief Human Resources Officer at Modine
Manufacturing Company from February 2006 to
April 2011, providing global human resources
leadership in the Americas, Europe and Asia. Mr.
Troy also previously worked in OMNOVA Solutions
Inc., Bosch Corporation, and Mobil Corporation,
after serving as a Transportation Officer in the
United States Army.

From April 2006 to April 2007, Mr. Tedone served as
Vice President, Internal Audit and prior to that as
Assistant Vice President, Internal Audit.

Robert D. Starr

47 Senior Vice President and Chief Financial

Officer

Gregory T. Troy

59 Senior Vice President – Human Resources
and Chief Human Resources Officer

John J. Tedone

50 Vice President, Finance and Chief

Accounting Officer

Each executive officer holds office for a term of one year and until his or her successor is duly appointed and qualified, in
accordance with the Company’s By-Laws.

ITEM 1A.

RISK FACTORS

Our business, financial condition, operating results and cash flows can be impacted by the factors set forth below, any one of
which could cause our actual results to vary materially from recent results or from our anticipated future results.

Our future operating results may be impacted by changes in global economic and political conditions.

Our future operating results and liquidity may be impacted by changes in general economic and political conditions which may
affect, among other things, the following:

• The availability of credit and our ability to obtain additional bank financing, the lack of which may limit our ability to

invest in capital projects and planned expansions or to fully execute our business strategy;

• Market rates of interest, any increase in which would increase the interest payable on some of our borrowings and

adversely impact our cash flow;

• The investment performance of our pension plan, as well as the associated discount rate, any adverse changes in which

may result in a deterioration in the funded status of the plan and an increase in required contributions and plan
expense;

• The relationship between the U.S. Dollar and other currencies, any changes in which could negatively impact our

financial results;

• The ability of our customers to pay for products and services on a timely basis, any adverse change in which could

negatively impact sales and require us to increase our bad debt reserves;

• The amount of orders we receive from our customers, any adverse change in which could result in lower operating

profits as well as less absorption of fixed costs due to a decreased business base; and

• The ability of our suppliers to meet our demand requirements, maintain the pricing of their products, or continue

operations, which may require us to find and qualify new suppliers.

While general economic and political conditions have not impaired our ability to access credit markets and finance our
operations to date, there can be no assurance that we will not experience future adverse effects that may be material to our cash
flows, competitive position, financial condition, results of operations, or our ability to access capital.

Our financial performance is significantly influenced by conditions within the aerospace industry.

The results of our Aerospace segment, which generated approximately 35.3% of our 2014 consolidated net sales, and
approximately 65.7% of our 2014 operating income from continuing operations before corporate expenses, are directly tied to
economic conditions in the commercial aviation and defense industries. Changes in economic conditions may cause customers
to request that firm orders be rescheduled or canceled, which could put a portion of our backlog at risk. Additionally, a
significant amount of work that we perform under contract tends to be for a few large customers.

The commercial aviation industry tends to be cyclical, and capital spending by airlines and aircraft manufacturers may be
influenced by a variety of global factors including current and future traffic levels, aircraft fuel pricing, labor issues,
competition, the retirement of older aircraft, regulatory changes, terrorism and related safety concerns, general economic
conditions, worldwide airline profits and backlog levels.

The defense industry is also affected by a changing global political environment, continued pressure on U.S. and global defense
spending, U.S. foreign policy and the activity level of military flight operations.

Changes to the defense industry and continued pressure to reduce U.S. defense spending could have a material impact on
several of our current aerospace programs, which could adversely affect our operating results. To mitigate these risks, we have
worked to expand our customer and product bases within the commercial market.

Furthermore, because of the lengthy research and development cycle involved in bringing new products to market, we cannot
predict the economic conditions that will exist when a new product is introduced. A reduction in capital spending in the aviation
or defense industries could have a significant effect on the demand for our products, which could have an adverse effect on our
financial performance or results of operations.

Our USG programs are subject to unique risks.

We have several significant long-term contracts either directly with the USG or where the USG is the ultimate customer,
including the Sikorsky BLACK HAWK cockpit program, the Joint Programmable Fuze (“JPF”) program, the Bell Helicopter
AH-1Z program, and the A-10 program. These contracts are subject to unique risks, some of which are beyond our control.
Examples of such risks include:

• The USG may modify, curtail or terminate its contracts and subcontracts at its convenience without prior notice, upon
payment for work done and commitments made at the time of termination. Modification, curtailment or termination of
our major programs or contracts could have a material adverse effect on our business, financial condition, results of
operations and cash flows.

• Our USG business is subject to specific procurement regulations and other requirements. These requirements,

although customary in USG contracts, increase our performance and compliance costs. These costs might increase in
the future, reducing our margins, which could have a negative effect on our financial condition. Although we have
procedures designed to assure compliance with these regulations and requirements, failure to do so under certain
circumstances could lead to suspension or debarment, for cause, from USG contracting or subcontracting for a period
of time and could have a material adverse effect on our business, financial condition, results of operation and cash
flows and could adversely impact our reputation and our ability to receive other USG contract awards in the future.
• The costs we incur on our USG contracts, including allocated indirect costs, may be audited by USG representatives.
Any costs found to be improperly allocated to a specific contract would not be reimbursed, and such costs already
reimbursed would have to be refunded. We normally negotiate with those USG representatives before they settle on
final adjustments to our contract costs. We have recorded contract revenues based upon results we expect to realize
upon final audit. However, we do not know the outcome of any future audits and adjustments, and we may be required
to reduce our revenues or profits upon completion and final negotiation of these audits. Although we have instituted
controls intended to assure our compliance, if any audit reveals the existence of improper or illegal activities we may
be subject to civil and criminal penalties and administrative sanctions, including termination of contracts, forfeiture of
profits, suspension of payments, fines and suspension or prohibition from doing business with the USG.

• We are from time to time subject to USG inquiries and investigations of our business practices due to our participation

in domestic and foreign government contracts and programs and our transaction of business domestically and
internationally. Any adverse finding associated with such an inquiry or investigation could have a material adverse
effect on our business, financial condition, results of operations and cash flows.

Our business may be adversely affected by changes in budgetary priorities of the USG.

Because a significant percentage of our revenue is derived either directly or indirectly from contracts with the USG, changes in
federal government budgetary priorities could directly affect our financial performance. A significant decline in government
expenditures, a shift of expenditures away from programs that we support or a change in federal government contracting
policies could cause federal government agencies to reduce their purchases under contracts, to exercise their right to terminate
contracts at any time without penalty or not to exercise options to renew contracts.

During 2011, the federal government was unable to reach agreement on budget reduction measures required by the Budget
Control Act of 2011 (the “Budget Act”) passed by Congress. Because Congress and the Administration could not reach
agreement, the Budget Act triggered automatic reductions in both defense and discretionary spending in January 2013. While
we do not believe these automatic spending reductions directly impacted our business, financial condition or operating results
during 2014, the future impact of sequestration is uncertain and there can be no assurance that automatic across-the-board
budget cuts will not adversely affect our business and profitability in future periods. One or more of our programs could be
reduced, extended, or terminated, which could result in facility closures and personnel reductions that could significantly
impact our operations.

The cost and effort to start up new aerospace programs could negatively impact our operating results and profits.

In recent years, we have been ramping up several new programs, as more fully discussed in Item 7, Management's Discussion
and Analysis of Financial Condition and Results of Operations, in this Annual Report on Form 10-K. The time required and
costs incurred to ramp up a new program can be significant and include nonrecurring costs for tooling, first article testing,
finalizing drawings and engineering specifications and hiring new employees able to perform the technical work required. New
programs can typically involve a greater volume of scrap, higher costs due to inefficiencies, delays in production, and learning
curves that are often more extended than anticipated, all of which can negatively impact our operating results.

Competition from domestic and foreign manufacturers may result in the loss of potential contracts and opportunities.

The aerospace markets in which we participate are highly competitive, and we often compete for work not only with large
OEMs but also sometimes with our own customers and suppliers. Many of our large customers may choose not to outsource
production due to, among other things, their own direct labor and overhead considerations and capacity utilization objectives
for their own facilities. This could result in these customers supplying their own products or services and competing directly
with us for sales of these products or services, all of which could significantly reduce our revenues.

Our competitors may have more extensive or more specialized engineering, manufacturing and marketing capabilities than we
do in some areas and we may not have the technology, cost structure, or available resources to effectively compete with them.
We believe that developing and maintaining a competitive advantage requires continued investment in product development,
engineering, supply chain management and sales and marketing, and we may not have enough resources to make the necessary
investments to do so. Further, our significant customers may attempt to use their position to negotiate price or other concessions
for a particular product or service without regard to the terms of an existing contract or the underlying cost of production.

We believe our strategies for our Aerospace segment will allow us to continue to effectively compete for key contracts and
customers, but there can be no assurance that we will be able to compete successfully in this market or against such
competitors.

We could be negatively impacted by the loss of key suppliers, lack of product availability, or changes in supplier
programs that could adversely affect our operating results.

Our business depends on maintaining a sufficient supply of various products to meet our customers' demands. We have long-
standing relationships with key suppliers but these relationships are non-exclusive and could be terminated by either party. If
we lost a key supplier, or were unable to obtain the same levels of deliveries from these suppliers and were unable to
supplement those purchases with products obtained from other suppliers, it could have a material adverse effect on our
business. Additionally, we rely on foreign and domestic suppliers and commodity markets to secure raw materials used in many
of the products we manufacture within our Aerospace segment or sell within our Distribution segment. This exposes us to
volatility in the price and availability of raw materials. In some instances, we depend upon a single source of supply. Supply
interruptions could arise from shortages of raw materials, labor disputes or weather conditions affecting suppliers' production,
transportation disruptions, or other reasons beyond our control. Even if we continue with our current supplier relationships,
high demand for certain products may result in us being unable to meet our customers' demands, which could put us at a
competitive disadvantage. Additionally, our key suppliers could also increase the pricing of their products, which would
negatively affect our operating results if we were not able to pass these price increases through to our customers. We base our
supply management process on an appropriate balancing of the foreseeable risks and the costs of alternative practices. To
protect ourselves against such risks, we engage in strategic inventory purchases during the year, negotiate long-term vendor
supply agreements and monitor our inventory levels to ensure that we have the appropriate inventory on hand to meet our
customers' requirements.

Our failure to comply with the covenants contained in our credit facility could trigger an event of default, which could
materially and adversely affect our operating results and our financial condition.

Our credit facility requires us to maintain certain financial ratios and comply with various operational and other covenants. If,
in the future, we were unable to maintain these ratios and comply with such covenants, we would need to seek relief from our
lenders in order to avoid, cure or have waived an event of default under the facility. There can be no assurance that we would
be able to obtain such relief on commercially reasonable terms or otherwise. If an event of default is not cured or waived, our
lenders could, among other things, cause all outstanding indebtedness under the credit facility to be due and payable
immediately. There can be no assurance that our assets or cash flows would be sufficient to enable us to fully repay those
amounts or that we would be able to refinance or restructure the indebtedness. If, as or when required, we are unable to repay,
refinance or restructure the indebtedness outstanding under our senior credit facility, or amend the financial ratios and

covenants contained therein, the lenders under our senior credit facility could elect to terminate their commitments thereunder,
cease making further loans and institute foreclosure proceedings against our assets. This, in turn, could result in an event of
default under one or more of our other financing agreements, including our convertible notes.

The value of our deferred tax assets could become impaired, which could materially and adversely affect our operating
results.

As of December 31, 2014, we had approximately $57.2 million in net deferred tax assets after valuation allowance. These
deferred tax assets can be used to offset taxable income in future periods and reduce income taxes payable in those future
periods. Each quarter, we determine the probability of the realization of deferred tax assets, using significant judgments and
estimates with respect to, among other things, historical operating results, expectations of future earnings and tax planning
strategies. If we determine in the future that there is not sufficient positive evidence to support the valuation of these assets, we
may be required to further adjust the valuation allowance to reduce our deferred tax assets. Such a reduction could result in a
material non-cash charge in the period in which the valuation allowance is adjusted and could have a material adverse effect on
our results of operations.

Estimates of future costs for long-term contracts impact our current and future operating results and profits.

We generally recognize sales and gross margin on long-term contracts based on the percentage-of-completion method of
accounting. This method allows for revenue recognition as our work progresses on a contract and requires that we estimate
future revenues and costs over the life of a contract. Revenues are estimated based upon the negotiated contract price, with
consideration being given to exercised contract options, change orders and, in some cases, projected customer requirements.
Contract costs may be incurred over a period of several years, and the estimation of these costs requires significant judgment
based upon the acquired knowledge and experience of program managers, engineers, and financial professionals.

Estimated costs are based primarily on anticipated purchase contract terms, historical performance trends, business base and
other economic projections. The complexity of certain programs as well as technical risks and the availability of materials and
labor resources could affect our ability to accurately estimate future contract costs. Additional factors that could affect
recognition of revenue under the percentage-of-completion method include:

• Accounting for initial program costs;
• The effect of nonrecurring work;
• Delayed contract start-up;
• Transition of work to or from the customer or other vendors;
• Claims or unapproved change orders;
•
• Delayed completion of certain programs for which inventory has been built up;
• Our ability to estimate or control scrap level;
• Accrual of contract losses; and
• Changes in our overhead rates.

Product warranty issues;

Because of the significance of the judgments and estimation processes, it is likely that materially different sales and profit
amounts could be recorded if we used different assumptions or if the underlying circumstances were to change. Changes in
underlying assumptions, circumstances or estimates may adversely affect current and future financial performance. While we
perform quarterly reviews of our long-term contracts to address and lessen the effects of these risks, there can be no assurance
that we will not make material adjustments to underlying assumptions, circumstances or estimates relating to one or more long-
term contracts that may have a material adverse effect on our business, financial condition, results of operations and cash flows.

We may lose money or generate lower than expected profits on our fixed-price contracts.

Our customers set demanding specifications for product performance, reliability and cost. Most of our government contracts
and subcontracts provide for a predetermined, fixed price for the products we make regardless of the costs we incur. Therefore,
we must absorb cost overruns, notwithstanding the difficulty of estimating all of the costs we will incur in performing these
contracts and in projecting the ultimate level of sales that we may achieve. Our failure to anticipate technical problems,
estimate costs accurately, integrate technical processes effectively or control costs during performance of a fixed-price contract
may reduce the profitability of a fixed-price contract or cause a loss. While we believe that we have recorded adequate
provisions in our financial statements for losses on our fixed-price contracts as required under generally accepted accounting

principles ("GAAP"), there can be no assurance that our contract loss provisions will be adequate to cover all actual future
losses.

The start-up of a K-MAX® production line could adversely affect our operating results and cash flow generation.

Because the K-MAX® aircraft has not been manufactured in over a decade, restarting the production line could require
significant investments of cash to fund costs associated with development and engineering work, the acquisition of new tooling,
first article testing, and production inefficiencies. The Company currently has $17.2 million of K-MAX® inventory, a portion
of which we expect to use in connection with a start-up of the production line. If this inventory is determined to be unusable
then the Company could incur additional costs to replace such inventory, including potentially having to requalify suppliers for
the manufacture of new components. The anticipated positive cash flows resulting from the sale of the aircraft may also be
adversely impacted by production delays. Further, if we are unable to sustain interest in this program, we may incur additional
costs associated with a shut-down of the production line.

A failure to develop and retain national accounts at our Distribution segment could adversely impact our financial
results.

Companies continue to consolidate their purchases of industrial products, resulting in their doing business with only a few
major distributors or integrated suppliers, rather than a large number of vendors. Through our national accounts strategy, our
Distribution segment has worked to develop the relationships necessary to be one of those major distributors. Competition
relative to these types of arrangements is significant.

If we are not awarded additional national accounts in the future, or if existing national account agreements are not renewed, our
sales volume could be negatively impacted which may result in lower gross margins and weaker operating results. Additionally,
national accounts may require an increased level of customer service, such as investments in the form of opening new branches
to meet our customers' needs. The cost and time associated with these activities could be significant, and if the relationship is
not maintained, we ultimately may not be able to generate a return on these investments.

The loss of the Distribution segment’s key suppliers with whom we have national reseller agreements and/or national
distributor agreements could adversely affect our operating results and profits.

An element of our Distribution segment’s strategy is to establish alignment with a single vendor in certain portions of its
business. As a result, we currently have distribution rights for certain product lines and depend on these distribution rights as a
source of business. Many of these distribution rights are ours pursuant to contracts that are subject to cancellation upon little or
no prior notice. Although we believe we could obtain alternate distribution rights in the event of such a cancellation, the
termination or limitation by any key supplier of its relationship with the Company could result in a temporary disruption of our
business and, in turn, could adversely affect our results of operations and financial condition.

Our information technology systems, processes, and sites may suffer interruptions or failures which may affect our
ability to conduct our business.

Our information technology systems provide critical data connectivity, information and services for internal and external
users. These interactions include, but are not limited to, ordering and managing materials from suppliers, inventory
management, shipping products to customers, processing transactions, summarizing and reporting results of operations,
complying with regulatory, legal or tax requirements, and other processes necessary to manage the business. Our computer
systems face the threat of unauthorized access, computer hackers, computer viruses, malicious code, organized cyber-attacks
and other security problems and system disruptions.

We have put in place business continuity plans and security precautions for our critical systems, including a back-up data
center. However, if our information technology systems are damaged, or cease to function properly due to any number of
causes, such as catastrophic events, power outages or security breaches resulting in unauthorized access, and our business
continuity plans and security precautions do not effectively compensate on a timely basis, we may suffer interruptions in our
operations or the misappropriation of proprietary information, which may adversely impact our business, financial condition,
results of operations and cash flows.

Our implementation of enterprise resource planning (“ERP”) systems may adversely affect our business and results of
operations or the effectiveness of internal controls over financial reporting.

We are currently implementing new ERP systems within our Aerospace and Distribution segments. ERP implementations are
complex and time-consuming projects that involve substantial expenditures on system software and implementation activities
that take several years. If we do not effectively implement the ERP systems or if the systems do not operate as intended, it
could adversely affect our financial reporting systems and our ability to produce financial reports, the effectiveness of internal
controls over financial reporting, and our business, financial condition, results of operations and cash flows.

We may make acquisitions or investments in new businesses, products or technologies that involve additional risks,
which could disrupt our business or harm our financial condition or results of operations.

As part of our business strategy, we have made, and expect to continue to make, acquisitions of businesses or investments in
companies that offer complementary products, services and technologies. Such acquisitions or investments involve a number of
risks, including:

• Assimilating operations and products may be unexpectedly difficult;
• Management's attention may be diverted from other business concerns;
• We may enter markets in which we have limited or no direct experience;
• We may lose key employees, customers or vendors of an acquired business;
• We may not be able to achieve the synergies or cost savings we anticipated;
• We may not realize the value of the acquired assets relative to the price paid;
• We may experience quality control failures or encounter other customer issues; and
• We may become subject to preexisting liabilities and obligations of the acquired businesses.

These factors could have a material adverse effect on our business, financial condition, results of operations and cash flows. In
addition, the consideration paid for any future acquisitions could include our stock or require that we incur additional debt and
contingent liabilities. As a result, future acquisitions could cause dilution of existing equity interests and earnings per share.

Certain of our operations are conducted through joint ventures, which entail special risks.

The Company has a 26% equity interest in Kineco-Kaman Composites - India Private Limited, a composites manufacturing
joint venture located in Goa, India. The Company relies significantly on the services and skills of its joint venture partner to
manage and conduct the local business operations of the joint venture and ensure compliance with local laws and regulations.
If our joint venture partner fails to perform these functions adequately, it may adversely affect our business, financial condition,
results of operations and cash flows. Moreover, if our joint venture partner fails to honor its financial obligations to commit
capital, equity or credit support to the joint venture as a result of financial or other difficulties or for any other reason, the joint
venture may be unable to perform contracted services or deliver contracted products unless we provide the necessary capital,
equity or credit support.

Our results of operations could be adversely affected by impairment of our goodwill or other intangible assets.

When we acquire a business, we record goodwill equal to the excess of the amount we pay for the business, including liabilities
assumed, over the fair value of the tangible and identifiable intangible assets of the business we acquire. Goodwill and other
intangible assets that have indefinite useful lives must be evaluated at least annually for impairment. The specific guidance for
testing goodwill and other non-amortized intangible assets for impairment requires management to make certain estimates and
assumptions when allocating goodwill to reporting units and determining the fair value of reporting unit net assets and
liabilities, including, among other things, an assessment of market conditions, projected cash flows, investment rates, cost of
capital and growth rates, which could significantly impact the reported value of goodwill and other intangible assets. Fair value
is generally determined using a combination of the discounted cash flow, market multiple and market capitalization valuation
approaches. Absent any impairment indicators, we generally perform our evaluations annually in the fourth quarter, using
available forecast information. If at any time we determine an impairment has occurred, we are required to reflect the reduction
in value as an expense within operating income, resulting in a reduction of earnings in the period such impairment is identified
and a corresponding reduction in our net asset value.

We rely on the experience and expertise of our skilled employees, and must continue to attract and retain qualified
technical, marketing and managerial personnel in order to succeed.

Our future success will depend largely upon our ability to attract and retain highly skilled technical, operational and financial
managers and marketing personnel. There is significant competition for such personnel in the aerospace and distribution
industries. We try to ensure that we offer competitive compensation and benefits as well as opportunities for continued
development, and we continually strive to recruit and train qualified personnel and retain key employees. There can be no
assurance, however, that we will continue to be successful in attracting and retaining the personnel we require to develop new
and enhanced products and to continue to grow and operate profitably.

We are subject to litigation, tax, environmental and other legal compliance risks that could adversely affect our
operating results.

We are subject to a variety of litigation, tax and legal compliance risks. These risks include, among other things, possible
liability relating to contract-related claims, government contracts, product liability matters, personal injuries, intellectual
property rights, taxes, environmental matters and compliance with U.S. and foreign export laws, competition laws and laws
governing improper business practices. In the event that we or one of our business units engage in wrongdoing in connection
with any of these kinds of matters, we could be subject to significant fines, penalties, repayments, other damages (in certain
cases, treble damages), or suspension or debarment from government contracts. Moreover, our failure to comply with
applicable export and trade practice laws could result in civil or criminal penalties and suspension or termination of export
privileges.

As a global business, we are subject to complex laws and regulations in the U.S. and other countries in which we operate.
Those laws and regulations may be interpreted in different ways. They may also change from time to time, as may related
interpretations and other guidance. Changes in laws or regulations could result in higher expenses and payments, and
uncertainty relating to laws or regulations may also affect how we conduct our operations and structure our investments and
could limit our ability to enforce our rights. Changes in environmental and climate change laws or regulations, including laws
relating to greenhouse gas emissions, could lead to new or additional investment in product designs and could increase
environmental compliance expenditures. Changes in climate change concerns, or in the regulation of such concerns, including
greenhouse gas emissions, could subject us to additional costs and restrictions, including increased energy and raw material
costs.

Our financial results may be adversely affected by the outcome of pending legal proceedings and other contingencies that
cannot be predicted. In accordance with GAAP, if a liability is deemed probable and reasonably estimable in light of the facts
and circumstances known to us at a particular point in time, we make an estimate of material loss contingencies and establish
reserves based on our assessment. Subsequent developments in legal proceedings may affect our assessment. The accrual of a
loss contingency adversely affects our results of operations in the period in which a liability is recognized. This could also have
an adverse impact on our cash flows in the period during which damages are paid.

For a discussion of these matters, please refer to Note 16, Commitments and Contingencies, in the Notes to Consolidated
Financial Statements in this Annual Report on Form 10-K.

New regulations related to conflict minerals could adversely impact our business.

The Dodd-Frank Wall Street Reform and Consumer Protection Act contains provisions designed to improve transparency and
accountability concerning the supply of certain minerals, known as conflict minerals, originating from the Democratic Republic
of the Congo ("DRC") and adjoining countries. In August 2012, the SEC promulgated new disclosure and reporting
requirements for companies who use conflict minerals in their products. Complying with these new disclosure and reporting
requirements requires us to incur substantial costs and expenditures to conduct due diligence to determine the sources of
conflict minerals used in our products. Moreover, these requirements may result in changes to the sourcing practices of our
customers which may require the identification and qualification of alternate sourcing for the components of products we
manufacture, which could impact the availability of, or cause increases in the price of, materials used in our products. We may
face reputational challenges if we determine that certain of our products contain minerals not determined to be conflict free or
if we are unable to verify the origin of conflict minerals used in our products through the procedures we implemented. As there
may be only a limited number of suppliers offering “conflict free” conflict minerals, there can be no assurance that we will be
able to obtain necessary conflict minerals from such suppliers in sufficient quantities or at competitive prices.

Our foreign operations require us to comply with a number of United States and international laws and regulations,
violations of which could have a material adverse effect on our business, financial condition, results of operations and
cash flows.

Our operations outside the United States require us to comply with a number of United States and international laws and
regulations, such as the Foreign Corrupt Practices Act of 1977 (the "FCPA") and the UK Bribery Act. The FCPA generally
prohibits United States companies or their agents and employees from providing anything of value to a foreign official for the
purposes of influencing any act or decision of these individuals in their official capacity to help obtain or retain business, direct
business to any person or corporate entity or obtain any unfair advantage. Because we operate in various countries, the risk of
unauthorized payments or offers of payments by one of our employees or agents that could be in violation of the FCPA cannot
be eliminated. While we have internal controls and procedures and compliance programs to train our employees and agents
with respect to compliance with FCPA and other international laws and regulations, there can be no assurance that our policies,
procedures and programs will always protect us from reckless or criminal acts committed by our employees or agents.
Allegations of violations of applicable anti-corruption laws, including the FCPA and UK Bribery Act, may result in internal,
independent, or government investigations. Violations of the FCPA and other international laws and regulations may result in
severe criminal or civil sanctions, and we may be subject to other liabilities, which could have a material adverse effect on our
business, financial condition, results of operations and cash flows.

Our foreign operations present additional risks and uncertainties which could have a material adverse effect on our
business, financial condition, results of operations and cash flows.

Our foreign business operations create additional risks and uncertainties, including the following:

• Longer payment cycles;
• Difficulties in accounts receivable collection;
• Changes in regulatory requirements;
• Export restrictions, tariffs and other trade barriers;
• Difficulties in staffing and managing foreign operations;
•
•
•
• Cultural and legal differences impacting the conduct of business.

Seasonal reductions in business activity during the summer months in Europe and certain other parts of the world;
Political or economic instability in the markets we serve;
Potentially adverse tax consequences; and

Any one or more of these factors could have a material adverse effect on our domestic or international operations, and,
consequently, on our business, financial condition, results of operations and cash flows.

Our insurance coverage may be inadequate to cover all significant risk exposures.

We are exposed to risks that are unique to the products and services we provide. While we believe that we maintain adequate
insurance for certain risks, insurance cannot be obtained to protect against all risks and liabilities. It is therefore possible that
our insurance coverage may not cover all claims or liabilities, and we may be forced to bear substantial unanticipated costs.

Health care reform could adversely affect our operating results.

In 2010, the United States federal government enacted comprehensive health care reform legislation. Due to the breadth and
complexity of this legislation, as well as the phased-in nature of its implementation and lack of interpretive guidance, it is
difficult for the Company to predict the effects it will have on our business over the coming years. There can be no assurance
that our operating results will not be adversely affected by increased costs, expanded liability exposure and requirements that
change the ways we provide healthcare and other benefits to our employees.

Business disruptions could seriously affect our sales and financial condition or increase our costs and expenses.

Our business may be impacted by disruptions including, but not limited to, threats to physical security, information technology
attacks or failures, damaging weather or other acts of nature and pandemics or other public health crises. Any of these
disruptions could affect our internal operations or services provided to customers, and could impact our sales, increase our
expenses or adversely affect our reputation or our stock price. We have developed and are implementing business continuity
plans for each of our businesses, in order to mitigate the effects disruptions may have on our financial results.

Our revenue and quarterly results may fluctuate, which could adversely affect our stock price.

We may in the future experience significant fluctuations in our quarterly operating results attributable to a variety of factors.
Such factors include but are not limited to:

Introduction, enhancement or announcement of products by us or our competitors;

Size, timing and shipment terms of significant orders;

• Changes in demand for our products;
•
• Market acceptance of our new products;
• The growth rates of certain market segments in which we compete;
•
• Difficulties with our technical programs;
• Budgeting cycles of customers;
• Mix of distribution channels;
• Mix of products and services sold;
• Mix of domestic and international revenues;
Fluctuations in currency exchange rates;
•
• Changes in the level of operating expenses;
• Changes in our sales incentive plans;
• Changes in tax laws in the jurisdictions in which we conduct business;
•
Inventory obsolescence;
• Accrual of contract losses;
•
• Completion or announcement of acquisitions; and
• General economic conditions in regions in which we conduct business.

Fluctuations in oil and utility costs;

Most of our expenses are relatively fixed in the short-term, including costs of personnel and facilities, and are not easily
reduced. Thus, an unexpected reduction in our revenue, or failure to achieve an anticipated rate of growth, could have a
material adverse effect on our profitability. If our operating results do not meet the expectations of investors, our stock price
may decline.

FORWARD-LOOKING STATEMENTS

This report contains "forward-looking statements" within the meaning of the safe harbor provisions of the U.S. Private
Securities Litigation Reform Act of 1995. Forward-looking statements also may be included in other publicly available
documents issued by the Company and in oral statements made by our officers and representatives from time to time. These
forward-looking statements are intended to provide management's current expectations or plans for our future operating and
financial performance, based on assumptions currently believed to be valid. They can be identified by the use of words such as
"anticipate," "intend," "plan," "goal," "seek," "believe," "project," "estimate," "expect," "strategy," "future," "likely," "may,"
"should," "would," "could," "will" and other words of similar meaning in connection with a discussion of future operating or
financial performance. Examples of forward looking statements include, among others, statements relating to future sales,
earnings, cash flows, results of operations, uses of cash and other measures of financial performance.

Because forward-looking statements relate to the future, they are subject to inherent risks, uncertainties and other factors that
may cause the Company's actual results and financial condition to differ materially from those expressed or implied in the
forward-looking statements. Such risks, uncertainties and other factors include, among others: (i) changes in domestic and
foreign economic and competitive conditions in markets served by the Company, particularly the defense, commercial aviation
and industrial production markets; (ii) changes in government and customer priorities and requirements (including cost-cutting
initiatives, government and customer shut-downs, the potential deferral of awards, terminations or reductions of expenditures
to respond to the priorities of Congress and the Administration, or budgetary cuts resulting from Congressional actions or
automatic sequestration); (iii) changes in geopolitical conditions in countries where the Company does or intends to do
business; (iv) the successful conclusion of competitions for government programs and thereafter contract negotiations with
government authorities, both foreign and domestic; (v) the existence of standard government contract provisions permitting
renegotiation of terms and termination for the convenience of the government; (vi) the resolution of government inquiries or
investigations; (vii) risks and uncertainties associated with the successful implementation and ramp up of significant new
programs; (viii) potential difficulties associated with variable acceptance test results, given sensitive production materials and
extreme test parameters; (ix) the receipt and successful execution of production orders for the U.S. government JPF contract,
including the exercise of all contract options and receipt of orders from allied militaries, as all have been assumed in
connection with goodwill impairment evaluations; (x) the continued support of the existing K-MAX® helicopter fleet, including
sale of existing K-MAX® spare parts inventory; (xi) the accuracy of current cost estimates associated with environmental
remediation activities; (xii) the profitable integration of acquired businesses into the Company's operations; (xiii) the ability to
implement our ERP systems in a cost-effective and efficient manner, limiting disruption to our business and allowing us to
capture their planned benefits while maintaining an adequate internal control environment; (xiv) changes in supplier sales or
vendor incentive policies; (xv) the effects of price increases or decreases; (xvi) the effects of pension regulations, pension plan
assumptions, pension plan asset performance and future contributions; (xvii) future levels of indebtedness and capital
expenditures; (xviii) the continued availability of raw materials and other commodities in adequate supplies and the effect of
increased costs for such items; (xix) the effects of currency exchange rates and foreign competition on future operations; (xx)
changes in laws and regulations, taxes, interest rates, inflation rates and general business conditions; (xxi) future repurchases
and/or issuances of common stock; and (xxii) other risks and uncertainties set forth in the Company's annual, quarterly and
current reports, proxy statements and other filings with the SEC.

Any forward-looking information provided in this report should be considered with these factors in mind. We assume no
obligation to update any forward-looking statements contained in this report.

ITEM 1B.

UNRESOLVED STAFF COMMENTS

None.

ITEM 2.

PROPERTIES

Our facilities are generally suitable for, and adequate to serve, their intended uses. At December 31, 2014, we occupied major
facilities at the following principal locations:

Segment

Location

Aerospace..........

Jacksonville, Florida .........................................

Property Type (1)
Leased - Manufacturing & Office

Chihuahua, Mexico ...........................................

Leased - Manufacturing & Office

Wichita, Kansas.................................................

Leased - Manufacturing & Office

Darwen, Lancashire, United Kingdom .............

Leased - Manufacturing & Office

Hyde, Greater Manchester, United Kingdom....

Leased - Manufacturing & Office

Burnley, Lancashire, United Kingdom..............

Leased - Manufacturing & Office

Orlando, Florida ................................................

Owned - Manufacturing & Office

Everett, Washington..........................................

Leased - Office

Höchstadt, Germany..........................................

Owned - Manufacturing & Office

Middletown, Connecticut..................................

Owned - Manufacturing & Office

Bloomfield, Connecticut ...................................

Owned - Manufacturing, Office & Service Center

Bennington, Vermont........................................

Owned - Manufacturing & Office

Distribution .......

Bloomfield, Connecticut ...................................
Ontario, California ............................................

Owned - Office

Leased - Distribution Center & Office

Albany, New York.............................................

Leased - Distribution Center & Office

Savannah, Georgia ............................................

Leased - Distribution Center & Office

Salt Lake City, Utah..........................................

Leased - Distribution Center & Office

Louisville, Kentucky .........................................

Leased - Distribution Center & Office

Gurabo, Puerto Rico..........................................

Leased - Distribution Center & Office

Bolingbrook, Illinois .........................................

Leased - Office & Branch

Rochester, New York.........................................

Leased - Office & Branch

Akron, Ohio ......................................................

Leased - Office

Corporate...........

Bloomfield, Connecticut ...................................

Owned - Office & Information Technology Back-

Up Data Center

Distribution (2) ......................................................................................................................................................
Aerospace.............................................................................................................................................................
Corporate (3) .........................................................................................................................................................
Total ...................................................................................................................................................................

Square Feet

2,273,742

1,834,548

103,041
4,211,331

(1) Owned facilities are unencumbered.

(2) The Distribution segment also has over 240 branches located across the United States and in Puerto Rico, generally

operating in leased facilities.

(3) We occupy a 40,000 square foot corporate headquarters building, 38,000 square foot mixed use building and 8,000

square foot data center in Bloomfield, Connecticut.

ITEM 3.

LEGAL PROCEEDINGS

General

From time to time, as a normal incident of the nature and kinds of businesses in which the Company and its subsidiaries are,
and were, engaged, various claims or charges are asserted and legal proceedings are commenced by or against the Company
and/or one or more of its subsidiaries. Claimed amounts may be substantial but may not bear any reasonable relationship to the
merits of the claim or the extent of any real risk of court or arbitral awards. We record accruals related to those matters for
which we consider a loss to be both probable and reasonably estimable. Gain contingencies, if any, are not recognized until
they are realized. Legal costs are generally expensed when incurred.

We evaluate, on a quarterly basis, developments in legal proceedings that could affect the amount of any accrual and
developments that would make a loss contingency both probable and reasonably estimable. Our loss contingencies are subject
to substantial uncertainties, however, including for each such contingency the following, among other factors: (i) the procedural
status of the case; (ii) whether the case has or may be certified as a class action suit; (iii) the outcome of preliminary motions;
(iv) the impact of discovery; (v) whether there are significant factual issues to be determined or resolved; (vi) whether the
proceedings involve a large number of parties and/or parties and claims in multiple jurisdictions or jurisdictions in which the
relevant laws are complex or unclear; (vii) the extent of potential damages, which are often unspecified or indeterminate; and
(viii) the status of settlement discussions, if any, and the settlement postures of the parties. Because of these uncertainties,
management has determined that, except as otherwise noted below, the amount of loss or range of loss that is reasonably
possible in respect of each matter described below (including any reasonably possible losses in excess of amounts already
accrued), is not reasonably estimable.

While it is not possible to predict the outcome of these matters with certainty, based upon available information, management
believes that all settlements, arbitration awards and final judgments, if any, which are considered probable of being rendered
against us in legal proceedings and that can be reasonably estimated are accrued for at December 31, 2014. Despite this
analysis, there can be no assurance that the final outcome of these matters will not have a material adverse effect on our
business, financial condition, results of operations or cash flows.

Except as set forth below, as of December 31, 2014, neither the Company nor any of its subsidiaries is a party, nor is any of its
or their property subject, to any material pending legal proceedings, other than ordinary routine litigation incidental to the
business of the Company and its subsidiaries. Additional information relating to certain of these matters is set forth in Note 16,
Commitments and Contingencies of the Notes to Consolidated Financial Statements, included in Item 8, Financial Statements
and Supplementary Data, of this Annual Report on Form 10-K.

Wichita Matter

As previously disclosed, the U.S. District Court for the District of Kansas issued a grand jury subpoena in 2011 to Plastic
Fabricating Company, Inc. (“PlasticFab”), an indirect wholly owned subsidiary of the Company now known as Kaman
Composites - Wichita, Inc., regarding a government investigation of record keeping associated with the manufacture of certain
composite parts at PlasticFab's facility located in Wichita, Kansas. The subpoena required information related to the period
January 1, 2006, through June 30, 2008. On October 21, 2014, the U.S. Attorney's Office for the District of Kansas and
PlasticFab entered into a civil settlement agreement pursuant to which PlasticFab, without admitting any wrongdoing, agreed to
pay $0.5 million, all of which was previously accrued. The U.S. Attorney's Office for the District of Kansas has also informed
PlasticFab that it is closing its files and will conduct no further investigation relating to this matter.

Environmental Matters

The Company and its subsidiaries are subject to numerous U.S. Federal, state and international environmental laws and
regulatory requirements and are involved from time to time in investigations or litigation of various potential environmental
issues concerning activities at our facilities or former facilities or remediation as a result of past activities (including past
activities of companies we have acquired). From time to time, we receive notices from the U.S. Environmental Protection
Agency or equivalent state or international environmental agencies that we are a potentially responsible party under the
Comprehensive Environmental Response, Compensation and Liability Act (commonly known as the “Superfund Act”) and/or
equivalent laws. Such notices assert potential liability for cleanup costs at various sites, which include sites owned by us, sites
we previously owned and treatment or disposal sites not owned by us, allegedly containing hazardous substances attributable to
us from past operations. We are currently named as a potentially responsible party at one site. While it is not possible to predict
the outcome of these proceedings, in the opinion of management, any payments we may be required to make as a result of all

such claims in existence at December 31, 2014, will not have a material adverse effect on our business, financial condition,
results of operations or cash flows.

Asbestos Litigation

Like many other industrial companies, the Company and/or one of its subsidiaries may be named as a defendant in lawsuits
alleging personal injury as a result of exposure to asbestos integrated into certain products sold or distributed by the Company
and/or the named subsidiary. A substantial majority of these asbestos-related claims have been covered by insurance or other
forms of indemnity or have been dismissed without payment. The rest have been resolved for amounts that are not material to
the Company, either individually or in the aggregate. Based on information currently available, we do not believe that the
resolution of any currently pending asbestos-related matters will have a material adverse effect on our business, financial
condition, results of operations or cash flows.

ITEM 4.

MINE SAFETY DISCLOSURES

Information concerning mine safety violations required by Section 1503(a) of the Dodd-Frank Wall Street Reform and
Consumer Protection Act ("Dodd-Frank Act") and Item 104 of Regulation S-K was not required for this Annual Report on
Form 10-K as there were no reportable violations during 2014.

PART II

ITEM 5.

MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS
AND ISSUER PURCHASES OF EQUITY SECURITIES

MARKET, DIVIDEND AND SHAREHOLDER INFORMATION

Our Common Stock is traded on the New York Stock Exchange under the symbol "KAMN". As of January 30, 2015, there
were 3,527 registered holders of our Common Stock. Holders of the Company’s Common Stock are eligible to participate in
the Computershare Shareowner Services program, which offers a variety of services including dividend reinvestment. A
booklet describing the program may be obtained by contacting Computershare at (800) 522-6645 or via the web at
www.cpushareownerservices.com.

The following table sets forth the high, low and closing sale prices per share of the Company’s Common Stock and the
dividends declared for the periods indicated:

2014
First quarter ......................................................................................
Second quarter..................................................................................
Third quarter.....................................................................................
Fourth quarter ...................................................................................
2013
First quarter ......................................................................................
Second quarter..................................................................................
Third quarter.....................................................................................
Fourth quarter ...................................................................................

ISSUER PURCHASES OF EQUITY SECURITIES

Market Quotations

High

Low

Dividend
Declared

41.77
44.60
43.47
43.49

38.62
35.90
39.91
40.35

37.83
39.19
38.62
37.43

34.14
32.16
34.45
36.41

40.02
42.87
39.70
40.09

35.47
34.56
37.70
39.73

0.16
0.16
0.16
0.16

The following table provides information about purchases of Common Stock by the Company during the three months ended
December 31, 2014:

Period
September 27, 2014 – October 24, 2014....................
October 25, 2014 – November 21, 2014....................
November 22, 2014 – December 31, 2014 ................
Total

Total Number
of Shares
Purchased

—
201
—
201

Average
Price Paid
per Share
—
41.52
—

Total Number of
Shares Purchased as
Part of a Publicly
Announced Plan (a)
—
—
—
—

Maximum
Number of
Shares That
May Yet Be
Purchased
Under the
Plan

964,757
964,757
964,757

(a) In November 2000, our Board of Directors approved a replenishment of the Company's stock repurchase program providing
for repurchase of an aggregate of 1.4 million shares of Common Stock for use in the administration of our stock plans and for
general corporate purposes (the "November 2000 stock repurchase program").

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

The following table provides information as of December 31, 2014, concerning Common Stock issuable under the Company’s
equity compensation plans.

(a)
Number of
securities to be issued
upon exercise of
outstanding
options, warrants and
rights

(b)
Weighted-
average exercise price
of outstanding
options, warrants
and rights

(c)
Number of securities
remaining available
for future issuance
under equity
compensation plans
(excluding securities
reflected in column
(a))

720,651
183,440
—

—
904,091

29.24
39.22
—

—
31.26

—
1,733,205
388,632

—
2,121,837

Plan Category
Equity compensation plans approved by
security holders: .................................................
2003 Stock Incentive Plan ..........................
2013 Management Incentive Plan ..............
Employees Stock Purchase Plan.................

Equity compensation plans not approved by
security holders ..................................................
Total ...................................................................

PERFORMANCE GRAPH

Following is a comparison of our total shareholder return for the period 2009 – 2014 compared to the S&P 600 Small Cap
Index and the Russell 2000 Small Cap Index. The performance graph does not include a published industry or line-of-business
index or peer group of similar issuers because during the performance period the Company was conducting operations in
diverse lines of business and we do not believe a meaningful industry index or peer group can be reasonably identified.
Accordingly, as permitted by regulation, the graph includes the S&P 600 Small Cap Index and the Russell 2000 Small Cap
Index, both of which are comprised of issuers with market capitalizations generally similar to that of the Company.

Comparison of 5 Year Cumulative Total Return
Assumes Initial Investment of $100
December 2014

240.00

220.00

200.00

180.00

160.00

140.00

120.00

100.00

80.00

60.00

40.00

20.00

0.00

2009

2010

2011

2012

2013

2014

Kaman Corporation

Russell 2000 Index

S&P Smallcap 600 Index

2009

2010

2011

2012

2013

2014

Kaman Corporation ..........................
S&P Small Cap 600..........................
Russell 2000 .....................................

100.00
100.00
100.00

128.60
126.31
126.81

123.30
127.59
121.52

169.24
145.57
141.42

185.97
209.74
196.32

190.65
221.81
205.93

ITEM 6.

SELECTED FINANCIAL DATA

FIVE-YEAR SELECTED FINANCIAL DATA
(in thousands, except per share amounts, shareholders and employees)

OPERATIONS

Net sales from continuing operations.......................
Operating income from continuing operations.........
Earnings before income taxes from continuing
operations .................................................................
Income tax expense ..................................................
Earnings from continuing operations .......................
Earnings (loss) from discontinued operations, net
of taxes .....................................................................
Gain (loss) on disposal of discontinued operations,
net of taxes ...............................................................
Net earnings..............................................................

FINANCIAL POSITION

Current assets ...........................................................
Current liabilities......................................................
Working capital ........................................................
Property, plant and equipment, net...........................
Total assets ...............................................................
Long-term debt, excluding current portion ..............
Shareholders’ equity.................................................

PER SHARE AMOUNTS

Basic earnings per share from continuing
operations .................................................................
Basic earnings per share from discontinued
operations .................................................................
Basic earnings per share from disposal of
discontinued operations............................................
Basic earnings per share ...........................................
Diluted earnings per share from continuing
operations .................................................................
Diluted earnings per share from discontinued
operations .................................................................

Diluted earnings per share from disposal of
discontinued operations............................................
Diluted earnings per share........................................
Dividends declared ...................................................
Shareholders’ equity.................................................
Market price range – High .......................................
Market price range – Low ........................................

AVERAGE SHARES OUTSTANDING

Basic .........................................................................
Diluted......................................................................

GENERAL STATISTICS

Registered shareholders............................................
Employees ................................................................

20141,6,7

20132,6,7

20123,6,7

20114,6,7

20105,6,7

$ 1,794,962
110,507

$ 1,653,921
103,346

$ 1,563,342
91,589

$ 1,452,182
86,819

$ 1,277,441
57,332

96,502

30,722
65,780

90,654

31,588
59,066

79,695

26,748
52,947

75,541

26,214
49,327

55,091

20,091
35,000

(2,924)

(2,386)

755

1,815

611

(4,984)
57,872

662,256
221,724
440,532
147,825
1,201,205
271,232
517,665

420
57,100

665,205
227,956
437,249
148,508
1,140,631
264,655
511,292

1,323
55,025

618,045
223,952
394,093
128,669
1,096,993
249,585
420,193

—
51,142

600,102
218,698
381,404
111,895
996,398
198,522
373,071

—
35,611

584,953
221,845
363,108
89,719
895,757
140,443
362,670

2.43

2.21

2.00

1.88

$
$

(0.09)

0.02
2.14

2.17

(0.09)

0.02
2.10
0.64
19.04
40.35
32.16

26,744
27,143

3,642
4,743

$
$

0.03

0.05
2.08

1.99

0.03

0.05
2.07
0.64
15.79
37.54
26.10

26,425
26,622

3,685
5,007

$
$

0.07

—
1.95

1.86

0.07

—
1.93
0.60
14.22
38.40
25.73

26,246
26,500

3,813
4,614

1.35

0.02

—
1.37

1.34

0.02

—
1.36
0.56
13.93
30.00
20.97

25,928
26,104

3,879
4,269

(See Footnotes below)

$
$

(0.11)

(0.18)
2.14

2.37

(0.11)

(0.18)
2.08
0.64
19.08
44.60
37.43

$
$

27,053
27,777

3,532
4,797

(Footnotes to Five-Year Selected Financial Data above)

Included within certain annual results are a variety of unusual or significant items that may affect comparability. The most
significant of such items are described below as well as within Management’s Discussion and Analysis of Financial Condition
and Results of Operations and the Notes to Consolidated Financial Statements.

1. Results for 2014 include the sale of the Distribution segment's Mexican operations for $9.6 million on December 19,

2014. The net loss of $5.3 million resulting from the sale is included in the loss on disposal of discontinued operations
for 2014. Additionally, we incurred $2.2 million of costs associated with the sale of our Moosup facility.

2. Results for 2013 include a $2.1 million non-cash non-tax deductible charge for the impairment of goodwill related to
VT Composites and a gain on discontinued operations due to a $0.4 million favorable tax result versus previous
estimates and other activity related to the settlement of the closing balance sheet of the Distribution segment's
Canadian operations.

3. Results for 2012 include the sale of certain assets and certain liabilities of the Distribution segment's Canadian

operations for $8.7 million on December 31, 2012, resulting in a net gain of $1.3 million. Additionally, we recorded
$3.3 million of net loss related to the resolution of an Aerospace segment program related matter.

4. Results for 2011 include $6.2 million in expense recognized in the fourth quarter related to the settlement of the

FMU-143 matter and the non-recurring benefit of $2.4 million recognized in the first quarter of 2011 resulting from
the death of a former executive.

5. Results for 2010 include a $6.4 million non-cash non-tax deductible charge for the impairment of goodwill related to
U.K. Composites, $2.0 million in additional losses related to the finalization of contract price negotiations on the
Sikorsky Canadian MH-92 helicopter program, and $6.6 million of income related to the claim for look-back interest
we filed with the Internal Revenue Service in connection with the Australian SH-2G(A) Super Seasprite Helicopter
program.

6. The Company sold the Distribution segment's Mexican operations on December 19, 2014. The results of these

discontinued operations have been reported as such in the table.

7. The Company sold substantially all assets and liabilities of the Distribution segment's Canadian operations on
December 31, 2012. The results of these discontinued operations have been reported as such in the table.

ITEM 7.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is intended to provide
readers of our consolidated financial statements with the perspectives of management. MD&A presents in narrative form
information regarding our financial condition, results of operations, liquidity and certain other factors that may affect our future
results. This should allow the readers of this report to obtain a comprehensive understanding of our businesses, strategies,
current trends and future prospects. MD&A should be read in conjunction with the Consolidated Financial Statements and
related Notes included in this Form 10-K.

OVERVIEW OF BUSINESS

Kaman Corporation conducts business through two business segments:

• The Distribution segment is a leading power transmission, motion control, electrical and automation, and fluid power

industrial distributor with operations throughout the United States. We provide products including bearings,
mechanical and electrical power transmission, fluid power, motion control, automation, material handling components,
electrical control and power distribution, and MRO supplies to a broad spectrum of industrial markets throughout the
United States.

• The Aerospace segment produces and/or markets proprietary aircraft bearings and components; complex metallic and
composite aerostructures for commercial, military and general aviation fixed and rotary wing aircraft; safe and arming
solutions for missile and bomb systems for the U.S. and allied militaries; subcontract helicopter work; support for our
SH-2G Super Seasprite maritime helicopters and K-MAX® manned and unmanned medium-to-heavy lift helicopters;
and engineering design, analysis and certification services.

Company financial performance

• Net sales from continuing operations increased 8.5% compared to the prior year.
• Earnings from continuing operations increased 11.4% compared to the prior year.
• Diluted earnings per share from continuing operations increased to $2.37 in 2014 compared to $2.17 in the prior year.
• Cash flows provided by operating activities from continuing operations were $109.1 million for 2014, an increase of

$44.2 million when compared to the prior year.

• Both our Distribution segment and our Aerospace segment had record annual sales from continuing operations of

$1,162 million and $633.0 million, respectively.

Acquisitions and Divestitures

• On February 2, 2015, the Company announced that its Distribution segment acquired substantially all the operating
assets of G.C. Fabrication, Inc. (GCF) of Northvale, New Jersey. GCF is a premier Schneider Electric/Square D
distributor and carries a variety of electrical power, automation, process controls, specialized HVAC, water and
wastewater systems, communication and networking devices from a premier set of global manufacturers.

• On December 19, 2014, the Company's Distribution segment sold its Mexico business unit Delamac de Mexico, S.A.

de C.V. (“Delamac”) to Rodamientos y Accesorios S.A. de C.V (RYASA) of Mexico.

• On April 25, 2014, the Company acquired specific assets of B.W. Rogers Company, headquartered in Akron, Ohio.
B.W. Rogers is a tri-motion distributor of Parker Hannifin motion and control products and represents many other
premium manufacturers.

Other key events

• During the fourth quarter, the New Zealand Ministry of Defence (MoD) accepted the first three SH-2G(I) Super
Seasprite helicopters for the New Zealand Defence Force (NZDF). Acceptance occurred at Kaman’s Bloomfield,
Connecticut facility.

• During the fourth quarter, we were awarded a contract modification in the amount of $28.9 million for the

•

procurement of Joint Programmable Fuzes (JPF). The award is a follow-on order raising the total under Option 11 of
the JPF contract with the U.S. Air Force (USAF) to approximately $90.0 million.
In November 2014, the Company was awarded an extension to its current contract with Bell Helicopter to manufacture
skin and skin to core components for several of Bell’s commercial helicopter models. This three-year follow on
contract has an expected value in excess of $24.0 million.

• During the fourth quarter, the Company entered into a contract with General Dynamics Canada to remanufacture and
upgrade four Kaman SH-2G Super Seasprite aircraft and provide support for the operation of a fifth aircraft for the
Peruvian Navy. The program value to Kaman is expected to exceed $40.0 million.

• On October 21, 2014, the Company entered into a civil settlement agreement with the U.S. Attorney's Office for the

District of Kansas, associated with a matter at its Wichita facility.

• On September 18, 2014, the Company held its first Investor Day in New York City.
• On September 12, 2014, the Company announced that its subsidiary, Kaman Aerospace Corporation, sold its former

manufacturing facility in Moosup, Connecticut, to TD Development, LLC.

• During the third quarter of 2014, the Company settled its revenue sharing agreement with the Commonwealth of

•

Australia for $5.3 million.
In April 2014, production of the Aerospace segment's specialty bearings in Germany was moved to a new state-of-the-
art manufacturing facility in Höchstadt, Germany.
In March 2014, the Company completed the move of its U.K. Tooling facility to a purpose-built facility in Burnley
Lancashire, United Kingdom.

• On February 25, 2014, the Company announced that the Aerospace segment opened a new engineering services office

at the Clemson University Restoration Institute campus (CURI) in North Charleston, S.C.

Outlook

Our outlook for 2015 reveals strong sales growth at our Distribution segment, while our Aerospace segment is expected to have
low single digit growth. Our Aerospace segment will continue to navigate through a period of transition, while certain legacy
defense programs ramp down and others come to an end. The outlook for consolidated operating profit reflects strong
underlying performance, offset by anticipated costs associated with pension, ERP and group health expense. Our 2015 outlook
is as follows:

• Distribution:
•
• Operating margins of 4.9% to 5.2%

Sales of $1,250 million to $1,280 million

• Aerospace:

•
Sales of $635 million to $655 million
• Operating margins of 16.8% to 17.2%
•
Interest expense of approximately $13 million
• Corporate expenses of $52 million to $53 million
• Estimated annualized tax rate of approximately 34%
• Depreciation and amortization expense of approximately $40 million
• Capital expenditures of $30 million to $40 million
Free cash flow of $75 million to $90 million
•

2015 Outlook

In millions
Free Cash Flow(a):

Net cash provided by operating activities............................................ $
Expenditures for property, plant and equipment..................................

Free Cash Flow.................................................................................. $

105.0

30.0

75.0

130.0

40.0

90.0

(a) Free Cash Flow, a non-GAAP financial measure, is defined as net cash provided by operating activities less expenditures for
property, plant and equipment, both of which are presented in our consolidated statements of cash flows. See Management’s
Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures, in this Form
10-K.

RESULTS OF CONTINUING OPERATIONS

Consolidated Results

Net Sales from Continuing Operations

In thousands
Distribution....................................................................................................
Aerospace ......................................................................................................
Total........................................................................................................
$ change.........................................................................................................
% change .......................................................................................................

$ 1,161,992
632,970
$ 1,794,962
141,041
$

$ 1,039,954
613,967
$ 1,653,921
90,579
$

982,573
580,769
$ 1,563,342
111,160
$

8.5%

5.8%

7.7%

2014

2013

2012

The following table details the components of the above changes as a percentage of consolidated net sales:

Organic Sales:

Distribution ..........................................................................................................
Aerospace.............................................................................................................
Total Organic Sales .........................................................................................

Acquisition Sales:

Distribution ..........................................................................................................
Aerospace.............................................................................................................
Total Acquisition Sales....................................................................................

2014

2013

2012

2.0%
1.1%
3.1%

5.4%
—%
5.4%

(1.0)%
2.1 %
1.1 %

4.7 %
— %
4.7 %

(0.4)%
0.8 %
0.4 %

5.8 %
1.5 %
7.3 %

% change in net sales .............................................................................................

8.5%

5.8 %

7.7 %

The increase in net sales from continuing operations for 2014 as compared to 2013 was attributable to an increase in organic
sales at both our Aerospace and Distribution segments and the contribution of $89.4 million in sales from our Distribution
segment acquisitions completed in 2014 and 2013. Foreign currency exchange rates had a $2.4 million favorable impact on
sales from continuing operations during 2014.

The increase in net sales from continuing operations for 2013 as compared to 2012 was attributable to an increase in organic
sales at our Aerospace segment and the contribution of $72.6 million in sales from our Distribution segment acquisitions
completed in 2013 and 2012, partially offset by lower organic sales at our Distribution segment. Foreign currency exchange
rates had a $0.3 million favorable impact on sales from continuing operations during 2013.

See Segment Results of Operations and Financial Condition below for further discussion of segment net sales.

Gross Profit from Continuing Operations

In thousands
Gross profit ...............................................................................................................
$ change ....................................................................................................................
% change...................................................................................................................
% of net sales ............................................................................................................

$ 507,939
44,628

$ 463,311
28,216

$ 435,095
28,573

9.6%
28.3%

6.5%
28.0%

7.0%
27.8%

2014

2013

2012

Gross profit from continuing operations increased in 2014 primarily due to the contribution of $25.7 million of gross profit
from the Distribution segment's 2014 and 2013 acquisitions and a combined 4.2% organic growth in Aerospace and
Distribution segment gross profit. Contributing to the Aerospace segment's improved gross profit were the higher sales on the
SH-2G(I) contract with New Zealand and higher sales of our commercial bearing products. These program/product profit
increases of $16.6 million, which were in addition to the acquisition related gross profit noted above, were partially offset by
$10.7 million related to the decrease in military bearing product sales and lower margin on the JPF as a result of decreased
commercial sales to foreign militaries in 2014. The Distribution segment's organic gross profit increase was primarily due to
increases in the machinery manufacturing, transportation equipment manufacturing and paper manufacturing industries
partially offset by computer and electronic manufacturing industry.

Gross profit from continuing operations increased in 2013 primarily due to the increase in sales and profit for both military and
commercial products/programs at our Aerospace segment and the contribution of $21.8 million of gross profit from our 2012
and 2013 acquisitions. Contributing to the Aerospace segment's improved gross profit were the incremental profit associated
with higher sales of our bearing products and the gross profit associated with the initial recognition of revenue on the SH-2G(I)
contract with New Zealand. These increases of $16.1 million, which were in addition to the acquisition related gross profit
noted above, were partially offset by the decline in organic gross profit at the Distribution segment of approximately $10.6
million. The decline in the Distribution segment's organic gross profit was primarily due to decreases in the food and beverage
manufacturing markets.

Selling, General & Administrative Expenses (S,G&A) from Continuing Operations

In thousands
S,G&A......................................................................................................................
$ change....................................................................................................................
% change ..................................................................................................................
% of net sales............................................................................................................

$ 397,199
39,447

$ 357,752
14,356

$ 343,396
23,965

11.0%
22.1%

4.2%
21.6%

7.5%
22.0%

2014

2013

2012

S,G&A increased for the year ended December 31, 2014, as compared to 2013. The following table details the components of
this change:

Organic S,G&A:

Distribution.........................................................................................................
Aerospace ...........................................................................................................
Corporate ............................................................................................................
Total Organic S,G&A....................................................................................

Acquisition S,G&A:

Distribution.........................................................................................................
Aerospace ...........................................................................................................
Corporate ............................................................................................................
Total Acquisition S,G&A...............................................................................

2014

2013

2012

2.5%

0.2%

2.5%

5.2%

5.8%

—%

5.8%

(0.9)%

0.5 %

(0.4)%

(0.8)%

5.0 %

— %

5.0 %

0.7 %

(3.0)%

2.6 %

0.3 %

5.9 %

1.3 %

— %

7.2 %

% change in S,G&A..............................................................................................

11.0%

4.2 %

7.5 %

S,G&A expenses associated with continuing operations increased for 2014 as compared to 2013 primarily due to $20.8 million
of expenses related to our 2014 and 2013 acquisitions, a $9.2 million increase in corporate expenses and higher expenses at our
Distribution segment. The increase in corporate expenses was driven by costs related to the sale of our Moosup facility, higher
salary and wage expense, higher incentive compensation costs, higher campus costs and an increase in professional service
fees. Higher Distribution segment costs related to higher employee related incentive costs, higher salary and wage expenses

primarily associated with the expansion of our sales force and higher depreciation related to the new enterprise-wide business
system ("ERP").

S,G&A expenses from continuing operations increased for 2013 as compared to 2012 primarily due to $17.3 million of
expenses related to our 2013 and 2012 acquisitions and an increase in expenses at our Aerospace segment. The increase in
expense at our Aerospace segment was primarily due to higher research and development costs of approximately $2.0 million.
These increases were slightly offset by lower expense for the Distribution segment's organic business due to $3.2 million of
savings realized from the restructuring completed in the first quarter of 2013. Corporate expenses remained relatively flat from
2012 to 2013. This was a result of lower expenses related to our defined benefit pension plan, offset by an increase in insurance
costs and building renovation expenses.

Goodwill Impairment

In thousands
Goodwill impairment ...............................................................................................

— $

2,071

—

2014

2013

2012

During 2013, we recorded a non-cash non-tax deductible goodwill impairment charge of $2.1 million for our VT Composites
reporting unit. This represented 11% of the reporting unit's total goodwill balance and reduced the carrying value of goodwill to
its implied fair value. This charge has been included in the 2013 operating results of the Company's Aerospace segment. No
such charges were taken in 2014 or 2012.

Operating Income from Continuing Operations

In thousands
Operating income .....................................................................................................
$ change....................................................................................................................
% change ..................................................................................................................
% of net sales............................................................................................................

$ 110,507
7,161

$ 103,346
11,757

91,589
4,770

6.9%
6.2%

12.8%
6.2%

5.5%
5.9%

2014

2013

2012

The increase in operating income from continuing operations for 2014 as compared to 2013 was driven by increases at both our
Aerospace and Distribution segments. The increase in operating income from continuing operations for 2013 as compared to
2012 was driven by an increase at our Aerospace segment. See Segment Results of Operations and Financial Condition below
for further discussion of segment operating income.

Interest Expense, Net

In thousands
Interest expense, net .................................................................................................

13,382

12,294

12,113

2014

2013

2012

Net interest expense generally consists of interest charged on the revolving credit facility and other borrowings and the
amortization of debt issuance costs, offset by interest income. The increase in net interest expense for 2014 as compared to
2013 was primarily due to higher average borrowings under our revolving credit facility. At December 31, 2014, the interest
rate for outstanding amounts on both the revolving credit facility and term loan agreement was 1.70% compared to 1.72% at
December 31, 2013.

The increase in net interest expense for 2013 as compared to 2012 was primarily due to higher average borrowings under our
revolving credit facility. At December 31, 2013, the interest rate for outstanding amounts on both the revolving credit facility
and term loan agreement was 1.72% compared to 1.75% at December 31, 2012.

Effective Income Tax Rate for Continuing Operations

Effective income tax rate..........................................................................................

31.8%

34.8%

33.6%

2014

2013

2012

The effective tax rate for continuing operations represents the combined federal, state and foreign tax effects attributable to
pretax earnings for the year. The decrease in the effective rate for 2014 as compared to 2013 was primarily due to adjustments
between the provision for taxes for 2013 and the actual returns filed.

The increase in the effective rate for 2013 as compared to 2012 was primarily due to the non-cash non-tax deductible goodwill
charge and the reversal in 2012 of a liability for unrecognized tax benefits.

Gain/(Loss) on Disposal of Discontinued Operations, Net of Tax

The Company sold the Distribution segment's Mexican business unit, Delamac, on December 19, 2014. The sale resulted in a
net loss on disposal of discontinued operations of $5.3 million for the year ended December 31, 2014.

The Company sold substantially all of the assets and liabilities of our Distribution segment's Canadian operations on December
31, 2012. The sale resulted in a net gain on disposal of discontinued operations of $0.3 million, $0.4 million and $1.3 million
for the years ended December 31, 2014, 2013 and 2012, respectively.

More information on these transactions can be found in Note 2, Discontinued Operations, in the Notes to Consolidated
Financial Statements included in this Form 10-K.

Other Matters

Information regarding our various environmental remediation activities and associated accruals can be found in Note 16,
Commitments and Contingencies, in the Notes to Consolidated Financial Statements included in this Form 10-K.

SEGMENT RESULTS OF OPERATIONS AND FINANCIAL CONDITION

Distribution Segment

Our Strategy

The Distribution segment's strategy is to grow and improve margins both organically and through acquisitions, broaden and
improve our product and service offerings in mechanical, electrical and fluid power, expand our geographic footprint in order
to enhance our position in the competition for municipal, regional and national accounts, and to improve productivity and
customer service through investments in technology and the effective integration of acquisitions.

Results of Operations

The following table presents selected financial data for our Distribution segment:

2014

2013

2012

In thousands
Net sales from continuing operations ................................................................
$ change.............................................................................................................
% change ...........................................................................................................

$ 1,161,992
122,038

$ 1,039,954
57,381

11.7%

5.8 %

Operating income ..............................................................................................
$ change.............................................................................................................
% change ...........................................................................................................
% of net sales.....................................................................................................

56,765
10,559

46,206
(3,110)

22.9%
4.9%

(6.3)%
4.4 %

982,573
77,794

8.6%

49,316
3,187

6.9%
5.0%

Net sales from continuing operations

Organic sales per sales day is a metric management uses to evaluate performance trends in its Distribution segment and is
calculated by taking total organic sales during a specific period divided by the number of sales days in that period. See
Management’s Discussion and Analysis of Financial Condition and Results of Operations - Non-GAAP Financial Measures, in
this Form 10-K.

2014

2013

2012

Organic Sales Per Sales Day
(in thousands, except numbers of sales days)
Current period
Net sales from continuing operations ................................................
Acquisition sales (a) ............................................................................
Organic sales......................................................................................
Sales days...........................................................................................
Organic sales per sales day for the current period .............................

Prior period
Net sales from the prior year..............................................................
Sales days in the prior year ................................................................
Organic sales per sales day from the prior year.................................

$ 1,161,992
89,388
$ 1,072,604
253
4,240

$ 1,039,954
72,578
967,376
253
3,824

$ 1,039,954
253
4,110

982,573
253
3,884

982,573
85,272
897,301
253
3,547

903,153
253
3,570

% change in organic sales per sales day ............................................ (a-b)/b

3.2%

(1.5)%

(0.6)%

(a) Sales contributed by an acquisition are included in organic sales beginning with the thirteenth month following the
date of acquisition. Prior period information is adjusted to reflect acquisition sales for that period as organic sales when
calculating organic sales per sales day.

2014 versus 2013

Net sales from continuing operations for 2014 increased as compared to 2013 due to the contribution of $89.4 million in sales
in 2014 from our 2014 and 2013 acquisitions and an increase in organic sales. The Distribution segment's organic sales per
sales day increased in 2014 primarily due to higher sales in the machinery manufacturing, transportation equipment
manufacturing and paper manufacturing industries, while the demand in computer and electronic product manufacturing
partially offset these increases.

2013 versus 2012

Net sales for 2013 increased as compared to 2012 due to the contribution of $72.6 million in sales in 2013 from our 2013 and
2012 acquisitions, offset in part by lower organic sales. The Distribution segment's organic sales per sales day decreased in
2013 primarily due to lower sales in the food and beverage manufacturing markets and fabricated metal product manufacturing
industries, while the demand in transportation equipment, non-metallic mineral manufacturing, computer and electronic
product manufacturing and chemical manufacturing increased.

Operating Income

2014 versus 2013

Operating income from continuing operations increased during 2014 as compared to 2013 primarily due to the contribution of
operating income from 2014 and 2013 acquisitions, incremental gross profit associated with the increase in organic sales, the
absence of $2.8 million of restructuring costs, lower pension expense and higher rebate income on our national accounts. These
increases were partially offset by increased SG&A costs related to higher employee related incentive costs, and higher salary
and wage expense primarily associated with the expansion of our sales force.

2013 versus 2012

Operating income from continuing operations decreased during 2013 as compared to 2012 primarily due to higher operating
expenses as a result of our 2013 and 2012 acquisitions, lower volume incentives due to the reduced sales volume noted above
and $2.8 million of expense associated with the restructuring in the first quarter of 2013. These decreases were partially offset
by cost savings of approximately $6.4 million as a result of the restructuring.

Other Matters

Enterprise Resource Planning System ("ERP")

In July 2012, we announced our decision to invest in a new enterprise-wide business system for our Distribution segment. The
current anticipated total investment in the new system is approximately $45 million, which will be spread over a number of
years. Of the total investment, approximately 75% will be capitalized. Depreciation and amortization of the capitalized cost
commenced in 2014 and is expected to increase over the following three to four years. In order to minimize disruptions to our
ongoing operations we have developed a project plan that takes a phased approach to implementation. For the years ended
December 31, 2014 and 2013, expenses incurred were approximately $0.8 million and $1.3 million, respectively, and capital
expenditures were $8.0 million and $9.9 million, respectively. In 2014, the Distribution segment reached a significant milestone
when our Minarik Automation & Controls facilities went live on the new system.

Aerospace Segment

Our Strategy

Our strategic goals for the Aerospace segment are built upon four objectives: Depth, Diversity, Differentiation and
Development. In order to achieve these objectives, we focus our efforts on improving balance between commercial and defense
program content, leveraging our broad capabilities to expand market positions, executing strategic acquisitions and increasing
focused investments in our people and infrastructure to increase capabilities and drive continuous improvement. The creation of
our “One Kaman” approach combines design and build capabilities to provide customers with global integrated solutions. This
approach provides us with the size and strength to address larger, integrated work packages from OEMs and Tier 1 suppliers.

Results of Operations

The following table presents selected financial data for our Aerospace segment:

In thousands
Net sales ...................................................................................................................
$ change....................................................................................................................
% change ..................................................................................................................
Operating income .....................................................................................................
$ change....................................................................................................................
% change ..................................................................................................................
% of net sales............................................................................................................

2014

2013

2012

$ 632,970
19,003

$ 613,967
33,198

$ 580,769
33,366

3.1%

5.7%

$ 108,697
6,124

$ 102,573
13,431

6.0%
17.2%

15.1%
16.7%

6.1%

89,142
8,718
10.8%
15.3%

Net Sales

2014 versus 2013

Aerospace segment net sales increased as a result of an $11.6 million increase in sales on our commercial products/programs
and a $7.4 million increase in sales on our military programs. The increase in commercial sales is primarily due to increased
deliveries on commercial composite structures products/programs and higher commercial bearing product sales. These
increases totaled $19.2 million and were partially offset by decreases totaling $7.5 million due to lower sales of engineering
design services and a decline in sales volume of composite imaging products.

The increase in military sales was primarily attributable to higher sales under the SH-2G(I) contract with New Zealand,
increased sales of our JPF to the USG and higher sales volume on the A-10 program. These increases totaled $74.5 million and
were largely offset by a $67.7 million decrease in other sales, including lower commercial sales of the JPF to foreign militaries,
a decline in shipments on the Sikorsky BLACK HAWK helicopter program, lower military bearing product sales and lower
volume under our Boeing CH-47 inlet screen program.

2013 versus 2012

Aerospace segment net sales increased primarily due to a $31.5 million increase in sales on our military programs. The increase
in military sales was primarily attributable to the initial recognition of revenue on the SH-2G(I) contract with New Zealand,
increased sales on our JPF program, revenue recognized on the AH-1Z program and higher military bearing product sales.
These increases totaled $46.7 million and were offset by a $14.9 million decrease in other sales, including a $5.8 million
decrease in sales resulting from the cancellation of the blade erosion coating program, a decline in shipments on the Sikorsky
BLACK HAWK helicopter program and lower fabrication sales.

Commercial sales increased $1.7 million for 2013 as compared to 2012. This increase was due to higher commercial bearing
product sales, an increase in deliveries of various commercial composite and metallic structures products/programs and higher
tooling sales. These increases totaled $21.8 million but were substantially offset by a $19.6 million decrease in sales due to
lower sales of engineering design services resulting from a reduction in requirements by a major OEM customer, the absence of
the $2.5 million of sales recorded in 2012 upon resolution of a program related matter and lower sales of K-MAX®
commercial spares.

Operating Income

2014 versus 2013

The increase in operating income for 2014 as compared to 2013 was primarily due to gross profit attributable to the revenue
recognized on the SH-2G(I) program, gross margin associated with higher commercial bearing product sales and the absence of
the $2.1 million non-cash non-tax deductible goodwill impairment charge recorded in 2013. These increases totaled $18.7
million and were partially offset by a $13.6 million decrease related to lower sales of military bearing products, lower margin
on the JPF as a result of lower commercial sales to foreign militaries and lower margins on our tooling sales.

2013 versus 2012

The increase in operating income for 2013 as compared to 2012 was primarily due to gross profit attributable to the revenue
recognized on the SH-2G(I) program, higher commercial and military bearing product sales and higher gross profit on our JPF
program. Additionally, operating income benefited from the absence of the $3.3 million net loss related to the resolution of a
program related matter in 2012. These product/program profit increases totaled $24.7 million. The higher profit contributions
were partially offset by a $7.5 million gross profit reduction related to lower sales of engineering design services and Sikorsky
BLACK HAWK helicopter cockpits combined with a $2.1 million non-cash non-tax deductible goodwill impairment charge.
Additionally, SG&A expense increased $3.6 million, which was partially due to a $2.0 million increase in research and
development expense.

Long-Term Contracts

For long-term aerospace contracts, we generally recognize sales and income based on the percentage-of-completion method of
accounting, which allows for recognition of revenue as work on a contract progresses. We recognize sales and profit based on
either (1) the cost-to-cost method, which results in costs being reported as cost of sales as incurred and sales (and profit) being
recorded based upon the ratio of costs incurred to estimated total costs to complete the contract, or (2) the units-of-delivery
method, which results in sales being recognized as deliveries are made and cost of sales being computed on the basis of the
estimated ratio of total contract cost to total contract sales.

Revenue and cost estimates for all significant long-term contracts for which revenue is recognized using the percentage-of-
completion method of accounting are reviewed and reassessed quarterly. Based upon these reviews, we record the effects of
adjustments in profit estimates each period. If at any time management determines that in the case of a particular contract total
costs will exceed total contract revenue, we record a provision for the entire anticipated contract loss at that time. The net
increase in our operating income from changes in contract estimates totaled $1.9 million for the year ended December 31,
2014. The increase in 2014 was primarily a result of improved performance on the New Zealand SH-2G(I) program, the JPF
program and a mix of composite programs. These improvements were slightly offset by cost growth on the Sikorsky BLACK

HAWK helicopter program. The net decrease in operating income from changes in contract estimates totaled $3.0 million for
the year ended December 31, 2013 and $4.7 million for the year ended December 31, 2012. The decrease in 2013 was primarily
driven by cost growth on aerostructure assemblies and the decrease in 2012 was due to cost growth on our JPF program.

Backlog

In thousands
Backlog...............................................................................................

518,025

601,954

531,923

2014

2013

2012

The backlog balance decreased from 2013 to 2014, primarily due to work performed on the SH-2G(I) New Zealand program
and deliveries of BLACK HAWK helicopter cockpits. These reductions were partially offset by new orders under our JPF
program.

The backlog balance increased from 2012 to 2013, primarily due to the $120.6 million contract for the sale of ten SH-2G(I)
aircraft, spare parts, a full mission flight simulator, and related logistics support to the New Zealand Ministry of Defence and an
increase of $34 million related to our USG JPF program. These increases were partially offset by deliveries of bearing products
and fuzes under our JPF program.

Major Programs/Product Lines

Defense Markets

A-10

The segment has contracted with Boeing to produce the wing control surfaces (inboard and outboard flaps, slats and deceleron
assemblies) for the U.S. Air Force’s A-10 fleet. This contract has a potential value of over $110.0 million; however, annual
quantities will vary, as they are dependent upon the orders Boeing receives from the U.S. Air Force. Initial deliveries under this
program began in the third quarter of 2010 and full rate production began during the fourth quarter of 2012. Through
December 31, 2014, 104 shipsets have been delivered over the life of the program. The Department of Defense Fiscal Year
2015 Budget has eliminated funding for the A-10 fleet; however, a final determination as to the future of this program has not
been made and there is congressional support for its continuation. We continue to monitor the defense budget and understand
that the future of this program could be at risk without the continued support of Congress. As of the date of this filing, we
believe congressional support remains strong and we have confidence that this program will continue. We received orders for
additional shipsets in January 2014, and through the date of this filing we have not received any indication from our customer
that this program will be terminated. Tooling and non-recurring costs on this program are being amortized over 242 shipsets,
the number of shipsets expected to be delivered under this program. At December 31, 2014, our program backlog was $31.6
million, representing approximately 70 shipsets, and total program inventory was $19.3 million, of which a significant portion
may not be recoverable in the event of a contract termination.

Bearings

Our bearings products are included on numerous military platforms manufactured in North America, Asia and Europe. These
products are used as original equipment and/or specified as replacement parts by the manufacturers. The most significant
portion of our military bearings sales is derived from U.S. military platforms, such as the AH-64 helicopter, Virginia Class
submarine and JSF aircraft, and sales in Europe for the Typhoon program. These products are primarily proprietary self-
lubricating, ball and roller bearings for aircraft flight controls, turbine engines, and landing gear, and helicopter driveline
couplings.

BLACK HAWK

The Sikorsky BLACK HAWK helicopter cockpit program involves the manufacture of cockpits including the installation of all
wiring harnesses, hydraulic assemblies, control pedals and sticks, seat tracks, pneumatic lines, and the composite structure that
holds the windscreen for most models of the BLACK HAWK helicopter. As a result of lower customer demand, we delivered
only 84 cockpits this year as compared to the 114 cockpits delivered in 2013. Included in backlog at December 31, 2014, is
$52.2 million for orders on this program. We anticipate delivering 67 cockpits in 2015.

AH-1Z

The segment manufactures cabins for the increased capability AH-1Z attack helicopter, which is produced by Bell Helicopter
for the U.S. Marine Corps. The cabin is the largest and most complex airframe structure utilized in the final assembly of the
AH-1Z helicopter and has not been manufactured new since 1995. The first cabin was delivered in the fourth quarter of 2013.
During the first quarter of 2014, Bell conducted the first test flight for the re-designed AH-1Z helicopter. To date, technical
issues have precluded us from completing the cabins prior to making delivery; however, we have provided Bell with
substantially complete cabins to allow Bell to continue with its production of initial aircraft. Revenue on this program is
recognized based upon customer acceptance of delivered cabins. Our total program inventory is $39.3 million at December 31,
2014. We currently have $14.0 million in backlog for orders under this program; however, with potential follow-on options the
program value could exceed $200.0 million.

C-17

The segment manufactured structural wing subassemblies for the Boeing C-17. During 2014, we completed deliveries of the
final seven shipsets and do not expect to receive any additional orders.

SH-2G Programs

Egypt
During the third quarter of 2014 the segment completed work under a program for depot level maintenance and upgrades for
nine Kaman SH-2G(E) helicopters originally delivered to the Egyptian government during the 1990s. We do not anticipate
receiving additional funding under this program at this time.

New Zealand
On May 6, 2013, we announced that the New Zealand Ministry of Defence ("MoD") entered into a $120.6 million contract for
the purchase of ten SH-2G(I) Super Seasprite aircraft, spare parts, a full mission flight simulator, and related logistics support.
The contract calls for the aircraft to be delivered over a period of approximately three years. During the fourth quarter of 2014,
the first three upgraded SH-2G(I) aircraft were accepted by the New Zealand MoD.

Peru
During the fourth quarter of 2014, we entered into a contract with General Dynamics Canada to remanufacture and upgrade
four Kaman SH-2G Super Seasprite aircraft and provide support for the operation of a fifth aircraft for the Peruvian Navy. The
program value to Kaman is expected to exceed $40 million. Total backlog at December 31, 2014, is $8.7 million.

FMU-152 – Joint Programmable Fuze (“JPF”)

We manufacture the JPF, an electro-mechanical bomb safe and arming device, which allows the settings of a weapon to be
programmed in flight. During 2014, we were awarded approximately $90.0 million of USAF sales orders under Option 11 of
our contract with the US Government, for fuzes to be delivered in 2015 and 2016. Total JPF backlog at December 31, 2014, is
$115.2 million.

A total of 6,855 fuzes passed acceptance testing and were delivered to our customers during the fourth quarter of 2014, for a
total of 24,333 fuzes delivered in 2014. We occasionally experience lot acceptance test failures due to the complexity of the
product and the extreme parameters of the acceptance test. Given the maturity of the product, we now generally experience
isolated failures, rather than systematic ones. As a result, identifying a root cause can take longer and result in inconsistent
delivery quantities from quarter to quarter. We expect to deliver 20,000 to 26,000 fuzes in 2015.

Commercial Markets

777 / 767

In January 2015, we signed a multi-year follow-on contract with Boeing for the production of fixed trailing edge ("FTE")
assemblies for the Boeing 777 and 767 commercial aircraft. To date, Kaman has provided more than 1,000 FTE kits and
assemblies for each of the 777 and 767 programs since 1995 and 1986, respectively. During 2014, on average we delivered nine
ship sets per month on the Boeing 777 platform and one ship set per month on the Boeing 767 platform. For 2015, we estimate
deliveries on the 777 program to be eight shipsets per month and on the 767 program to be one and one-half shipsets per
month. The total contract value is estimated to be in excess of $75 million; however, annual quantities will vary, as they are
dependent upon the orders Boeing receives from its customers.

Airbus

Our U.K. Composites operations provide composite components for many Airbus platforms. The most significant of these are
the A320, A330, A340 and A350. Orders for all of these platforms are dependent on the customer’s build rate.

Bearings

Our bearings products are included on commercial airliners and regional/business jets manufactured in North and South
America, Europe and Asia and are used as original equipment and/or specified as replacement parts by airlines and aircraft
manufacturers. These products are primarily proprietary self-lubricating, ball and roller bearings for aircraft flight controls,
turbine engines, landing gear, and helicopter driveline couplings. The most significant portion of our commercial sales is
derived from Boeing and Airbus platforms, such as the Boeing 737, 747, 777 and 787 and the Airbus A320, A330, A350 and
A380.

Bell Helicopter

In November 2014, we were awarded an extension to our current contract with Bell Helicopter to manufacture skin and skin to
core components for several of Bell’s commercial helicopter models. This three-year follow on contract has an expected value
in excess of $24.0 million. The components are manufactured at our full-service aerospace innovation and manufacturing
support center in Bloomfield, Connecticut. At December 31, 2014, $5.9 million was included in backlog for orders under this
program. Annual quantities for this program will vary, as they are dependent upon the orders Bell receives from its customers.

Engineering Design Services

The Company offers engineering design services to Aerospace OEM customers. Engineering design service programs generate
revenue primarily through the billing of employees' time spent on customer projects. Our engineers provide value to new
aircraft development and product improvement programs. While we have seen a decline in sales levels for these services in
recent years, we have sought out expansion opportunities, as evidenced by the opening of our new office in North Charleston,
South Carolina during 2014.

Learjet 85

In 2010, our U.K. Composites operation was awarded a contract to manufacture composite passenger entry and over-wing exit
doors for the Learjet 85, a mid-sized business jet built primarily from composites and featuring advances in aerodynamics,
structures and efficiency. We began delivery during the second quarter of 2013. In April 2014, Bombardier conducted the first
test flight for the Learjet 85. However, in January 2015, Bombardier Inc. announced a "pause" of its Learjet 85 business aircraft
program. This program is currently in a "stop work" status.

747-8 Wing-to-Body Fairing

The segment has contracted with Boeing Canada Winnipeg to manufacture and assemble two major sections of the 747-8
Wing-to-Body Fairing. Initial production for these components will occur at our Jacksonville facility and upon completion
these components will be delivered directly to Boeing's wide-body assembly line in Everett, Washington. The contract has
potential value, depending on production rates, in excess of $60.0 million. Initial deliveries under this program began in the
second quarter of 2014 and we shipped six shipsets in 2014. We expect to ship 16 shipsets in 2015.

K-MAX®

During 2014, we announced that our Aerospace segment is soliciting interest in new K-MAX® aircraft. We believe there is
demand for new aircraft to support firefighting, logging or any industry requiring repetitive aerial lift capabilities, and the K-
MAX® is extremely well suited for all of these industrial applications. Since our announcement in the first half of the year,
several potential customers have expressed interest in acquiring new aircraft.

Other Matters

For a discussion of other matters related to our Aerospace segment see Note 16, Commitments and Contingencies, in the Notes
to Consolidated Financial Statements included in this Form 10-K.

LIQUIDITY AND CAPITAL RESOURCES

Discussion and Analysis of Cash Flows

We assess liquidity in terms of our ability to generate cash to fund working capital and investing and financing activities.
Significant factors affecting liquidity include: cash flows generated from or used by operating activities, capital expenditures,
investments in our business segments and their programs, acquisitions, divestitures, dividends, availability of future credit,
adequacy of available bank lines of credit, and factors that might otherwise affect the Company's business and operations
generally, as described under the heading “Risk Factors” and “Forward-Looking Statements” in Item 1A of Part I of this Form
10-K.

We continue to rely upon bank financing as an important source of liquidity for our business activities including acquisitions.
We believe this, when combined with cash generated from operating activities, will be sufficient to support our anticipated cash
requirements for the foreseeable future. However, we may decide to raise additional debt or equity capital to support other
business activities including potential future acquisitions. We anticipate our capital expenditures will be approximately $30.0 to
$40.0 million in 2015, primarily related to machinery and equipment and information technology infrastructure.
In addition to our working capital requirements, one or more of the following items could have an impact on our liquidity
during the next 12 months:

•

•
•
•

the matters described in Note 16, Commitments and Contingencies, in the Notes to Consolidated Financial Statements,
including the cost of existing environmental remediation matters and deposits required to be made to the
environmental escrow for the Moosup facility sold in 2014;
contributions to our qualified pension plan and Supplemental Employees’ Retirement Plan (“SERP”);
costs associated with the start-up of new aerospace programs; and
the extension of payment terms by our customers.

However, we do not believe any of these matters will lead to a shortage of capital resources or liquidity that would prevent us
from continuing with our business operations as expected.

We regularly monitor credit market conditions to identify potential issues that may adversely affect, or provide opportunities
for, the securing and/or pricing of additional financing, if any, that may be necessary to continue with our growth strategy and
finance working capital requirements.

Management regularly monitors its pension plan asset performance and the assumptions used in the determination of our
benefit obligation, comparing them to actual experience. We continue to believe the assumptions selected are valid due to the
long-term nature of our benefit obligation.

In 2013, the Company signed a $120.6 million contract to resell ten of the former Australian SH-2G(A) (now designated
SH-2G(I)) aircraft, a full mission flight simulator, and related logistics support to the New Zealand MoD. Pursuant to the terms
of the revenue sharing agreement with the Commonwealth of Australia, the Company was to share proceeds from the resale
with the Commonwealth on a predetermined basis. During the third quarter of 2014, the Company settled the revenue sharing
agreement with the Commonwealth of Australia and made a final payment of $5.3 million. As a result, no further revenue
sharing payments will be due to the Commonwealth of Australia as the Company sells the remainder of the SH-2G(I)
inventory. Over the course of the revenue sharing agreement, net of the benefits derived from our hedging arrangements, the
Company paid approximately $32.1 million to the Commonwealth of Australia.

Upon entering into the sales contract with the New Zealand MoD, we agreed to provide unconditional letters of credit for the
receipt of advance payments on this program. As we perform under the contract and meet certain predetermined milestones, the
letter of credit requirements will be gradually reduced. As of December 31, 2014, the letter of credit balance associated with
this program was $54.5 million.

A summary of our consolidated cash flows from continuing operations is as follows:

2014

2013

2012

14 vs. 13

13 vs. 12

(in thousands)
Total cash provided by (used in):

Operating activities ................................................
Investing activities..................................................
Financing activities ................................................

Free Cash Flow(a) :

Net cash provided by (used in) operating
activities .................................................................
Expenditures for property, plant and equipment ....
Free cash flow...........................................................

109,089
(100,059)
(3,538)

64,840
(61,219)
(8,115)

85,824
(116,851)
39,640

44,249
(38,840)
4,577

109,089
(28,283)
80,806

64,840
(40,852)
23,988

85,824
(32,386)
53,438

44,249
12,569
56,818

(20,984)
55,632
(47,755)

(20,984)
(8,466)
(29,450)

(a) Free Cash Flow, a non-GAAP financial measure, is defined as net cash provided by operating activities less

expenditures for property plant and equipment, both of which are presented in our consolidated statements of cash flows. See
Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures, in
this Form 10-K.

2014 vs. 2013

Net cash provided by operating activities of continuing operations increased $44.2 million in 2014 compared to 2013, primarily
due to proceeds from the sales of SH-2G(I) inventory as we continue to perform under the New Zealand program and JPF
program inventories and an increase in earnings from continuing operations, driven by increased operating income at both our
segments. These changes are partially offset by the reduction of advances on contracts as we achieve milestones on certain
Aerospace segment programs.

Net cash used in investing activities of continuing operations increased $38.8 million due to a $59.5 million increase in cash
used for acquisitions, partially offset by a decrease of $12.6 million in cash used for the purchase of property, plant and
equipment and $8.9 million in proceeds received from the sale of our Distribution segment's Mexico business unit, Delamac.

Net cash used in financing activities of continuing operations decreased $4.6 million primarily due to the repayment of
borrowings under our revolving credit facility due to the significant cash flow generation for the year.

2013 vs. 2012

Net cash provided by operating activities of continuing operations decreased $21.0 million in 2013 compared to 2012,
primarily due to an increase in accounts receivable balances at both segments, partially due to approximately $16.0 million of
outstanding receivables with foreign customers associated with our Aerospace segment's JPF program which was collected
subsequent to year end. Offsetting the decrease in cash provided was a lower use of cash for accounts payable, primarily related
to inventory buys made in the fourth quarter.

Net cash used in investing activities of continuing operations decreased $55.6 million due to a $69.5 million decrease in cash
used for acquisitions, partially offset by an increase of $8.5 million in cash used for the purchase of property, plant and
equipment, including the new ERP system at our Distribution segment and improvements to the Company's corporate facilities.

Net cash used in financing activities of continuing operations for 2013 was $8.1 million, compared to net cash provided by
financing activities of continuing operations for 2012 of $39.6 million. This change reflects the proceeds of $100.0 million we
received in 2012 from the issuance of long-term debt that did not occur in 2013. This decrease was offset by borrowings under
the revolving credit agreement and lower debt repayments.

Financing Arrangements

Credit Agreement

On November 20, 2012, we entered into a Credit Agreement (the "Credit Agreement") with JPMorgan Chase Bank, N.A., as
Administrative Agent, Bank of America, N.A. and RBS Citizens, N.A. as Co-Syndication Agents, J.P. Morgan Securities LLC
(“J.P. Morgan Securities”), Merrill Lynch, Pierce, Fenner & Smith Incorporated (“MLPF&S”) and RBS Citizens, N.A. as Joint
Bookrunners and Joint Lead Arrangers, and the other lenders named therein (collectively, the “Lenders”), which expires on July
31, 2017. The Credit Agreement replaced our then existing $275.0 million Amended and Restated Revolving Credit Agreement
and $42.5 million Second Amended and Restated Term Loan Credit Agreement.

The Credit Agreement provides a $400.0 million revolving credit facility under which we may issue letters of credit for our
benefit and a $100.0 million term loan facility. The term loan commitment requires quarterly payments of principal (which
commenced on March 31, 2013) at the rate of $2.5 million per quarter with $55.0 million payable in the final quarter of the
facility's term. We may increase the aggregate amount of each of the revolving credit facility and the term loan facility by up to
$100.0 million in accordance with the terms of the Credit Agreement.

Interest rates on amounts outstanding under the Credit Agreement are variable. At December 31, 2014 and 2013, the interest
rates for the outstanding amounts on the Credit Agreement were 1.70% and 1.72%, respectively. In addition, we are required to
pay a quarterly commitment fee on the unused revolving loan commitment amount at a rate ranging from 0.200% to 0.325%
per annum, based on the Consolidated Senior Secured Leverage Ratio (as defined in the Credit Agreement). Fees for
outstanding letters of credit range from 1.250% to 2.125%, based on the Consolidated Senior Secured Leverage Ratio.

The financial covenants associated with the Credit Agreement include a requirement that (i) the ratio of Consolidated Senior
Secured Indebtedness to Consolidated EBITDA, as defined in the Credit Agreement, cannot be greater than 3.50 to 1.00,
(ii) the ratio of Consolidated Total Indebtedness to Consolidated EBITDA, as defined in the Credit Agreement, cannot be
greater than 4.00 to 1.00, and (iii) the ratio of Consolidated EBITDA to the sum of (a) all interest, premium payments, debt
discounts, fees, charges and related expenses and (b) the portion of rent expense under capital leases that is treated as interest
expense, as defined in the Credit Agreement, cannot be less than 4.00 to 1.00. The Company was in compliance with those
financial covenants as of and for the quarter ended December 31, 2014, and management does not anticipate noncompliance in
the foreseeable future.

Total average bank borrowings under our revolving credit facility and term loan facility during the year ended December 31,
2014, were $214.8 million compared to $188.8 million for the year ended December 31, 2013. As of December 31, 2014 and
2013, there was $248.6 million and $285.6 million available for borrowing, respectively, net of letters of credit. Letters of
credit are generally considered borrowings for purposes of calculating available borrowings. A total of $59.2 million and $36.8
million in letters of credit was outstanding as of December 31, 2014 and 2013, respectively. The letter of credit balance related
to the SH-2G(I) New Zealand sales contract was $54.5 million at December 31, 2014. We expect the letter of credit balance
related to the SH-2G(I) New Zealand sales contract to be released in the second half of 2015.

Convertible Notes

In November 2010, we issued convertible unsecured notes due on November 15, 2017, in the aggregate principal amount of
$115.0 million in a private placement offering (the "Convertible Notes"). These notes bear 3.25% interest per annum on the
principal amount, payable semiannually in arrears on May 15 and November 15 of each year, beginning on May 15, 2011.
Proceeds from the offering were $111.0 million, net of fees and expenses which were capitalized. The proceeds were used to
repay $62.2 million of borrowings outstanding on the Company’s Revolving Credit Agreement, make a $25.0 million voluntary
contribution to the Qualified Pension Plan and pay $13.2 million for the purchase of call options related to the convertible note
offering. See below for further discussion of the call options.

The Convertible Notes will mature on November 15, 2017, unless earlier redeemed, repurchased by the Company or converted.
Upon conversion, the Convertible Notes require net share settlement, where the aggregate principal amount of the notes will be
paid in cash and remaining amounts due, if any, will be settled in cash, shares of the Company's common stock or a
combination of cash and shares of common stock, at the Company's election.

The following table illustrates the conversion rate at each date:

Convertible Notes
Conversion Rate per $1,000 principal amount (1)..........................................
Conversion Price (2) .......................................................................................
Contingent Conversion Price (3) ....................................................................
Aggregate shares to be issued upon conversion (4)........................................

December 31, 2014

December 31, 2013

29.6876

33.68

43.79

29.6292

33.75

43.88

3,414,074

3,407,357
(1) Represents the number of shares of Common Stock hypothetically issuable per $1,000 principal amount of Notes,
subject to adjustments per the Convertible Note Indenture dated November 19, 2010. At the date the Company issued
the Convertible Notes, the conversion rate initially equaled 29.4499 shares of common stock per $1,000 principal
amount of notes (which is equivalent to an initial conversion price of approximately $33.96 per share of common
stock). The conversion rate is subject to adjustment upon the occurrence of certain specified events, such as an
increase in the dividend paid to shareholders.
(2) Represents $1,000 divided by the conversion rate as of such date. The conversion price reflects the strike price of
the embedded option within the Convertible Note. Were the Company's share price to exceed the conversion price at
conversion the noteholders would be entitled to receive additional consideration either in cash, shares or a
combination, the form of which is at the sole discretion of the Company.
(3) Prior to May 15, 2017, the notes are convertible only in the following circumstances: (1) during any fiscal quarter
commencing after April 1, 2011, and only during any such fiscal quarter, if the last reported sale price of our common
stock was greater than or equal to 130% of the applicable conversion price for at least 20 trading days (whether or not
consecutive) during the 30 consecutive trading days ending on the last trading day of the previous fiscal quarter, (2)
upon the occurrence of specified corporate transactions, or (3) during the five consecutive business-day period
following any five consecutive trading-day period in which, for each day of that period, the trading price for the notes
was less than 98% of the product of the last reported sale price of our common stock and the applicable conversion
rate on such trading day. On and after May 15, 2017, until the close of business on the second scheduled trading day
immediately preceding the maturity date, holders may convert their notes at any time, regardless of the foregoing
circumstances. Upon a change in control or termination of trading, holders of the notes may require us to repurchase
all or a portion of their notes for cash at a repurchase price equal to 100% of the principal amount, plus any accrued
and unpaid interest.
(4) Represents the number of shares hypothetically issuable upon conversion of the principal balance of the Convertible
Notes at each date; however, as the terms of the Convertible Notes require net share settlement, the aggregate principal
amount of the notes will be paid in cash. Amounts due in excess of the principal, if any, may be settled in cash, shares of
the Company's common stock or a combination of cash and shares of common stock, at the Company's election.

Because the embedded conversion option is indexed to the Company’s own stock and would be classified in shareholders’
equity, it does not meet the criterion under FASB Accounting Standards Codification Topic 815 - Derivatives and Hedging
("ASC 815") that would require separate accounting as a derivative instrument.

In connection with the offering, we entered into convertible note hedge transactions with affiliates of the initial purchasers.
These transactions are intended to reduce the potential dilution to our Company's shareholders upon any future conversion of
the notes. The call options, which cost an aggregate $13.2 million, were recorded as a reduction of additional paid-in capital.
The Company also entered into warrant transactions concurrently with the offering, pursuant to which we sold warrants to
acquire up to approximately 3.4 million shares of our common stock to the same counterparties that entered into the convertible
note hedge transactions. Proceeds received from the issuance of the warrants totaled approximately $1.9 million and were
recorded as additional paid-in capital. The convertible note hedge and warrant transactions effectively increased the conversion
price of the convertible notes.

The following table illustrates the warrant price at each date:

Warrants
Warrant Price..................................................................................................

44.05

44.14

December 31, 2014

December 31, 2013

The note payable principal balance at the date of issuance of $115.0 million was bifurcated into the debt component of
$101.7 million and the equity component of $13.3 million. The difference between the note payable principal balance and the

value of the debt component is being accreted to interest expense over a period of 7 years. The debt component was recognized
at the present value of associated cash flows discounted using a 5.25% discount rate, the borrowing rate at the date of issuance
for a similar debt instrument without a conversion feature. We recorded $0.5 million of debt issuance costs as an offset to
additional paid-in capital. The balance, $3.1 million, is being amortized over the term of the notes. Total amortization expense
for the years ended December 31, 2014, 2013, and 2012 was $0.5 million.

The following table illustrates the dilutive effect of securities issued under the convertible debt and warrants at various
theoretical average share prices for our stock as of December 31, 2014:

Theoretical Average Share Price of Kaman Stock

$33.68

$40.00

$44.05

$45.00

$50.00

Dilutive Shares associated with:

Convertible Debt.......................................................
Warrants....................................................................
Total dilutive shares.............................................

—

539,074

803,309

858,518

1,114,074

—

72,196

406,384

539,074

803,309

930,714

1,520,458

Debt Issuance Costs

Total expense associated with the amortization of debt issuance costs for the years ended December 31, 2014, 2013 and 2012,
was $1.1 million, $1.1 million and $1.3 million, respectively.

Interest Rate Swaps

During 2013, we entered into interest rate swap agreements for the purposes of hedging the eight quarterly variable-rate Term
Loan interest payments due in 2014 and 2015. These interest rate swap agreements were designated as cash flow hedges and
intended to manage interest rate risk associated with our variable-rate borrowings and minimize the impact on our earnings and
cash flows of interest rate fluctuations attributable to changes in LIBOR rates. For the year ended December 31, 2014, there
was $0.4 million of interest expense associated with the interest rate swap agreements. There was no additional interest expense
associated with interest rate swap agreements in 2013.

Other Sources/Uses of Capital

Pension

We contributed $10.0 million to the qualified pension plan and $0.8 million to the SERP during 2014. In 2013, we contributed
$10.0 million to the qualified pension plan and $2.3 million to the SERP. In 2015, we have contributed $10.0 million to the
qualified pension plan (as of the date of this filing) and do not anticipate making any further contributions this year. We expect
to contribute $0.5 million to the SERP in 2015.

Acquisitions

The following table illustrates the cash paid for acquisitions:

For the year ended December 31,

2014

2013

2012

In thousands
Cash paid for acquisitions completed during the year ...................... $
Cash paid for holdback payments during the year ............................
Earnout and other payments during the year.....................................

70,948

17,284

3,060

3,610

828

Total cash paid for acquisitions ...................................................... $

77,618

18,162

74,465

11,951

1,205

87,621

Total consideration for the acquisitions completed in 2014 was $71.9 million, with $1.4 million remaining to be paid to sellers
representing holdback provisions. Total consideration for acquisitions completed in 2013 and 2012 was $17.8 million and $76.8
million, respectively. We anticipate that we will continue to identify and evaluate potential acquisition candidates, the purchase
of which may require the use of additional capital.

Stock Repurchase Plan

In November 2000, our Board of Directors approved a replenishment of our stock repurchase program, providing for
repurchase of an aggregate of 1.4 million common shares for use in administration of our stock plans and for general corporate
purposes. During 2014, 2013 and 2012, there were no shares repurchased under this program. At December 31, 2014,
approximately 1.0 million shares remained authorized for repurchase under this program.

NON-GAAP FINANCIAL MEASURES

Management believes that the non-GAAP measures used in this report on Form 10-K provide investors with important
perspectives into our ongoing business performance. We do not intend for the information to be considered in isolation or as a
substitute for the related GAAP measures. Other companies may define the measures differently. We define the non-GAAP
measures used in this report and other disclosures as follows:

Organic Sales per Sales Day

Organic sales per sales day is defined as GAAP “Net sales of the Distribution segment”, less sales derived from acquisitions
completed during the preceding twelve months, divided by the number of sales days in a given period. Sales days are the
number of business days that the Distribution segment’s branch locations were open for business and exclude weekends and
holidays. Management believes sales per sales day provides an important perspective on how net sales may be impacted by the
number of days the segment is open for business. Management uses organic sales per sales day as a measurement to compare
periods in which the numbers of sales days differ.

Free Cash Flow

Free cash flow is defined as GAAP “Net cash provided by (used in) operating activities” less “Expenditures for property, plant
& equipment”, both of which are presented in our Consolidated Statements of Cash Flows. Management believes free cash
flow provides an important perspective on the cash available for dividends to shareholders, debt repayment, and acquisitions
after making capital investments required to support ongoing business operations and long-term value creation. Free cash flow
does not represent the residual cash flow available for discretionary expenditures as it excludes certain mandatory expenditures
such as repayment of maturing debt. Management uses free cash flow internally to assess both business performance and
overall liquidity.

CONTRACTUAL OBLIGATIONS AND OFF-BALANCE SHEET ARRANGEMENTS

Contractual Obligations

The following table summarizes certain of the Company’s contractual obligations as of December 31, 2014:

Payments due by period (in millions)

Contractual Obligations
Long-term debt ....................................................
Convertible notes.................................................
Interest payments on debt (a) ................................
Operating leases...................................................
Purchase obligations (b)........................................
Other long-term obligations (c).............................
Planned funding of pension and SERP (d)............
Total.....................................................................

Total

172.0

115.0

31.4

67.0

131.0

52.1

19.4

Within 1 year
10.0
$

1-3 years

3-5 years

More than 5
years

162.0

— $

—

11.5

22.4

99.0

17.0

10.5

115.0

14.8

27.2

30.9

15.0

3.5

—

3.3

9.1

1.1

4.6

1.0

—

1.8

8.3

—

15.5

4.4

30.0

587.9

170.4

368.4

19.1

Note: For more information refer to Note 11, Debt; Note 16, Commitments and Contingencies; Note 15, Other Long-Term
Liabilities; Note 14, Pension Plans, and Note 13, Income Taxes in the Notes to Consolidated Financial Statements included in
this Form 10-K.

(a) Interest payments on debt are calculated based on the applicable rate and payment dates for each instrument. For variable-

rate instruments, interest rates and payment dates are based on management’s estimate of the most likely scenarios for each
relevant debt instrument.

(b) This category includes purchase commitments to suppliers for materials and supplies as part of the ordinary course of

business, consulting arrangements and support services. Only obligations of at least $50,000 are included.

environmental liabilities, acquisition holdbacks and unrecognized tax benefits.

(d) This category includes planned funding of the Company’s SERP and qualified pension plan. Projected funding for the
qualified pension plan beyond one year has not been included as there are several significant factors, such as the future
market value of plan assets and projected investment return rates, which could cause actual funding requirements to differ
materially from projected funding.

Off-Balance Sheet Arrangements

The following table summarizes our off-balance sheet arrangements:

Payments due by period (in millions)

Total

Within 1 year

1-3 years

3-5 years

More than 5
years

Acquisition earn-out (1) ........................................
Total.....................................................................

1.5

— $

—

(1) The obligation to pay earn-out amounts depends upon the attainment of specific milestones by an aerospace operating

unit acquired in 2002. To date we have paid $18.0 million in earn-outs of the total potential amount of $25.0 million
for this acquisition.

As of December 31, 2014, we had $59.2 million of outstanding standby letters of credit under the Credit Agreement, $54.5
million of which related to the New Zealand sales contract.

CRITICAL ACCOUNTING ESTIMATES

Our significant accounting policies are outlined in Note 1 to the Consolidated Financial Statements included in this Form 10-K.
The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of
assets, liabilities, revenues, and expenses and related disclosures based upon historical experience, current trends and other
factors that management believes to be relevant. We are also responsible for evaluating the propriety of our estimates,
judgments, and accounting methods as new events occur. Actual results could differ from those estimates. Management
periodically reviews the Company’s critical accounting policies, estimates, and judgments with the Audit Committee of our
Board of Directors. The most significant areas currently involving management judgments and estimates are described below.

Long-Term Contracts

Methodology

Judgment and Uncertainties

For long-term aerospace contracts,
we generally recognize sales and
income based on the percentage-of-
completion method of accounting,
which allows for recognition of
revenue as work on a contract
progresses. We recognize sales and
profit based upon either (1) the cost-
to-cost method, in which sales and
profit are recorded based upon the
ratio of costs incurred to estimated
total costs to complete the contract,
or (2) the units-of-delivery method,
in which sales are recognized as
deliveries are made and cost of sales
is computed on the basis of the
estimated ratio of total contract cost
to total contract sales.

Management performs detailed
quarterly reviews of all of our
significant long-term contracts.
Based upon these reviews, we record
the effects of adjustments in profit
estimates each period. If at any time
management determines that in the
case of a particular contract total
costs will exceed total contract
revenue, we record a provision for
the entire anticipated contract loss at
that time.

The percentage-of-completion
method requires that we estimate
future revenues and costs over the
life of a contract. Revenues are
estimated based upon the original
contract price, with consideration
being given to exercised contract
options, change orders and in some
cases projected customer
requirements. Contract costs may be
incurred over a period of several
years, and the estimation of these
costs requires significant judgment
based upon the acquired knowledge
and experience of program managers,
engineers, and financial
professionals. Estimated costs are
based primarily on anticipated
purchase contract terms, historical
performance trends, business base
and other economic projections. The
complexity of certain programs as
well as technical risks and
uncertainty as to the future
availability of materials and labor
resources could affect the Company’s
ability to accurately estimate future
contract costs.

Effect if Actual Results Differ From
Assumptions

While we do not believe there is a

reasonable likelihood there will be a
material change in estimates or
assumptions used to calculate our
long-term revenues and costs,
estimating the percentage of work
complete on certain programs is a
complex task. As a result, changes to
these estimates could have a
significant impact on our results of
operations. These programs include
the SH-2G(I) New Zealand program,
the Sikorsky BLACK HAWK
program, the JPF program, the
Boeing A-10 program, the AH-1Z
program and our other Bell
Helicopter programs and several
other programs. Estimating the
ultimate total cost of these programs
is challenging due to the complexity
of the programs, the increase in
production of new programs, the
nature of the materials needed to
complete these programs, change
orders related to the programs and
the need to manage our customers’
expectations. These programs are an
important element in our continuing
strategy to increase operating
efficiencies and profitability as well
as broaden our business base.
Management continues to monitor
and update program cost estimates
quarterly for these contracts. A
significant change in an estimate on
one or more of these programs could
have a material effect on our
financial position and results of
operations. The net increase in our
operating income from changes in
contract estimates totaled $1.9
million for the year ended
December 31, 2014. The net
decrease in our operating income
from changes in contract estimates
totaled $3.0 million for the year
ended December 31, 2013, and $4.7
million for the year ended December
31, 2012.

Allowance for Doubtful Accounts

Methodology

Judgment and Uncertainties

Write-offs are charged against the
allowance for doubtful accounts only
after we have exhausted all collection
efforts. Actual write-offs and
adjustments could differ from the
allowance estimates due to
unanticipated changes in the business
environment as well as factors and
risks associated with specific
customers.

The allowance for doubtful accounts
represents management’s best
estimate of probable losses inherent
in the receivable balance. These
estimates are based on known past
due amounts and historical write-off
experience, as well as trends and
factors impacting the credit risk
associated with specific customers.
In an effort to identify adverse trends
for trade receivables, we perform
ongoing reviews of account balances
and the aging of receivables.
Amounts are considered past due
when payment has not been received
within a pre-determined time frame
based upon the credit terms
extended. For our government and
commercial contracts, we evaluate,
on an ongoing basis, the amount of
recoverable costs. The recoverability
of costs is evaluated on a contract-
by-contract basis based upon
historical trends of payments,
program viability and the customer’s
credit-worthiness.

Effect if Actual Results Differ From
Assumptions

As of December 31, 2014 and 2013,
our allowance for doubtful accounts
was $3.2 million and $3.8 million,
respectively. Receivables written off,
net of recoveries, in 2014 and 2013
were $1.9 million and $1.0 million,
respectively.

Currently we do not believe that we
have a significant amount of risk
relative to the allowance for doubtful
accounts. A 10% change in the
allowance would have a $0.3 million
effect on pre-tax earnings.

Effect if Actual Results Differ From
Assumptions

Inventory valuation at our
Distribution segment generally
requires less subjective management
judgment than the valuation of
certain inventory in the Aerospace
segment.

Management reviews the K-MAX®
inventory balance on an annual basis
to determine whether any additional
write-downs are necessary. If such a
write-down were to occur, this could
have a significant impact on our
operating results. A 10% write-down
of the December 31, 2014, inventory
balance would have affected pre-tax
earnings by approximately $1.7
million in 2014.

Inventory Valuation

Methodology

Judgment and Uncertainties

We have five types of inventory (a)
merchandise for resale, (b) raw
materials, (c) contracts in process, (d)
other work in process, and (e)
finished goods. Merchandise for
resale and raw materials are stated at
the lower of the cost of the inventory
or its fair market value. Contracts in
process, other work in process and
finished goods are valued at
production cost comprised of
material, labor and overhead,
including general and administrative
expenses on certain government
contracts. Contracts in process, other
work in process, and finished goods
are reported at the lower of cost or
net realizable value. Raw material
includes certain general stock
materials but primarily relates to
purchases that were made in
anticipation of specific programs that
have not been started as of the
balance sheet date.

The process for evaluating inventory
obsolescence or market value often
requires the Company to make
subjective judgments and estimates
concerning future sales levels,
quantities and prices at which such
inventory will be sold in the normal
course of business. We adjust our
inventory by the difference between
the estimated market value and the
actual cost of our inventory to arrive
at net realizable value. Changes in
estimates of future sales volume may
necessitate future write-downs of
inventory value. The K-MAX®
inventory balance, consisting of work
in process and finished goods, was
$17.2 million as of December 31,
2014. We believe it is stated at net
realizable value, although lack of
demand for spare parts in the future
could result in additional write-
downs of the inventory value.
Overall, management believes that
our inventory is appropriately valued
and not subject to further
obsolescence in the near term.

On May 8, 2013, we announced that
the New Zealand MoD entered into a
$120.6 million contract for the
purchase of ten SH-2G(I) Super
Seasprite aircraft, spare parts, a full
mission flight simulator, and related
logistics support. Although a
substantial portion of the SH-2G(I)
inventory will be used in the
performance of this new contract,
management believes that $21.9
million of the SH-2G(I) inventory
will be sold after December 31,
2015, based upon the time needed to
prepare the aircraft for sale and the
requirements of our customer.
Additionally, an estimated $4.1
million of inventory will remain after
completion of this program. This
balance represents one aircraft and
various spare parts.

Effect if Actual Results Differ From
Assumptions
For the Aerosystems reporting unit,
we performed the Step One test and
the percentage by which the fair
value exceeded the carrying value
was 16%. A decrease of 1% in our
terminal growth rate or an increase of
1% in our discount rate would not
result in a fair value calculation less
than the carrying value.

As with all assumptions, there is an
inherent level of uncertainty and
actual results, to the extent they
differ from those assumptions, could
have a material impact on fair value.
For example, multiples for similar
type reporting units could deteriorate
due to changes in technology or a
downturn in economic conditions. A
reduction in customer demand would
impact our assumed growth rate
resulting in a reduced fair value.
Potential events or circumstances
could have a negative effect on the
estimated fair value. The loss of a
major customer or program could
have a significant impact on the
future cash flows of the reporting
unit(s). Advances in technology by
our competitors could result in our
products becoming obsolete.

Goodwill and Other Intangible Assets

Methodology

Judgment and Uncertainties

In years that management performs a
qualitative assessment we consider
the following qualitative factors:
general economic conditions in the
markets served by the reporting units
carrying goodwill, relevant industry-
specific performance statistics,
changes in the carrying value of the
individual reporting units, and
assumptions used in the most recent
fair value calculation, including
forecasted results of operations, the
weighted average cost of capital and
recent transaction multiples.

For step one of the two-step
impairment test, management
estimated the fair value of the
reporting units using an income
methodology based on management's
estimates of forecasted cash flows,
with those cash flows discounted to
present value using rates
commensurate with the risks
associated with those cash flows. In
addition, management used a market-
based valuation method involving
analysis of market multiples of
revenues and earnings before
interest, taxes, depreciation and
amortization (“EBITDA”) for (i) a
group of comparable public
companies and (ii) recent
transactions, if any, involving
comparable companies. In estimating
the fair value of the reporting units, a
weighing of 80% to the income
approach and 20% to the market-
based valuation method was selected,
consistent with prior year. A higher
weighting was applied to the estimate
derived from the income approach as
it is based on Management's
assumptions specific for the
reporting units, which are the
outcome of an internal planning
process. While the guideline
companies in the market based
valuation method have comparability
to the reporting units, they may not
fully reflect the market share,
product portfolio and operations of
the reporting units.

Goodwill and certain intangible
assets that have indefinite lives are
evaluated at least annually for
impairment. The annual evaluation is
generally performed during the
fourth quarter, using forecast
information. All intangible assets are
also reviewed for possible
impairment whenever changes in
conditions indicate that their carrying
value may not be recoverable. For
reporting units that qualify for a
qualitative assessment, management
will perform the two-step impairment
test after a period of three years has
elapsed since its last evaluation.

In accordance with generally
accepted accounting principles, we
test goodwill for impairment at the
reporting unit level. The
identification and measurement of
goodwill impairment involves the
estimation of fair value of the
reporting unit as compared to its
carrying value. In the Distribution
segment, this testing is conducted at
the segment level as no components
represent reporting units. In the
Aerospace segment, testing is
conducted at a level one level below
the segment level, and components
are not aggregated for purposes of
goodwill testing.

During 2014, the Company
performed a reevaluation of its
reporting units for the purpose of its
annual goodwill assessment. The
Company reorganized its metallic
and composite aerostructures
businesses, as well as its engineering
design and air, vehicle and
maintenance, repair and overhaul
businesses, into a new entity called
Kaman Aerosystems. An impairment
test was performed for all reporting
units carrying goodwill prior to the
creation of the new reporting unit.
The results of this impairment
analysis were disclosed in our
Annual Report on Form 10-K for the
year ended December 31, 2013.
Immediately after this test, these
reporting units were reorganized into
a new reporting unit, Aerosystems,
which is the reporting unit used for
the purpose of our annual assessment
of goodwill for impairment in 2014.

continues on next page

Effect if Actual Results Differ From
Assumptions
We do not currently believe there is a
reasonable likelihood that there will
be a material change in estimates or
assumptions used to test goodwill
and other intangible assets for
impairment losses. However, if
actual results are not consistent with
our estimates or assumptions, we
may be exposed to an impairment
charge that could be material.

Goodwill and Other Intangible Assets (continued)

Methodology

Judgment and Uncertainties

The carrying value of goodwill as of
December 31, 2014, was $141.6
million and $97.0 million for the
Distribution and Aerospace
segments, respectively. The
Aerospace specific reporting units
contributing to the total goodwill
balance were as follows: Precision
Products Orlando facility ("KPP-
Orlando"), $34.4 million; Specialty
Bearings RWG Frankenjura-Industrie
Flugwerklager GMBH ("RWG"),
$6.6 million; and Aerosystems $56.0
million. See Note 9, Goodwill and
Other Intangible Assets, Net, in the
Notes to Consolidated Financial
Statements for additional information
regarding these assets. The carrying
value of other intangible assets as of
December 31, 2014, was $57.3
million and $37.2 million for the
Distribution and Aerospace
segments, respectively.

In performing our step one test for
the Aerosystems reporting unit, we
used an assumed terminal growth
rate of 3.0%. The discount rate
utilized to reflect the risk and
uncertainty in the financial markets
and specifically in our internally
developed earnings projections was
12.0% for this reporting unit.
Changes in these estimates and
assumptions could materially affect
the results of our tests for goodwill
impairment.

Under Step Two, an impairment loss
is recognized for any excess of the
carrying amount of the reporting
unit’s goodwill over the implied fair
value of that goodwill. The implied
fair value of goodwill is determined
by allocating the fair value of the
reporting unit in a manner similar to
a purchase price allocation. The
residual fair value after this
allocation is the implied fair value of
the reporting unit goodwill. The
results of the Aerosystems Step 1 test
indicated that the Company did not
need to proceed to Step 2.

Effect if Actual Results Differ From
Assumptions

We do not currently believe there is a
reasonable likelihood that there will
be a material change in the estimates
or assumptions we use to determine
stock-based compensation expense.
However, if actual results are not
consistent with our estimates or
assumptions, we may be exposed to
changes in share-based compensation
expense that could be material.

If actual results are not consistent
with the assumptions used, the share-
based compensation expense
reported in our financial statements
may not be representative of the
actual economic cost of the share-
based compensation. A 10% change
in our share-based compensation
expense for the year ended December
31, 2014, would have affected pre-
tax earnings by approximately $0.5
million in 2014. Due to the timing of
availability of the Russell 2000 data,
there is a risk that the amount we
have recorded as LTIP expense could
be different from the actual payout. A
10.0 percentage point increase in the
total performance factor earned for
our LTIP would result in a reduction
of 2014 pretax earnings of $1.6
million.

Long-Term Incentive Programs

Methodology

Judgment and Uncertainties

Option-pricing models and generally
accepted valuation techniques require
management to make assumptions
and to apply judgment to determine
the fair value of our awards. These
assumptions and judgments include
estimating the future volatility of our
stock price, expected dividend yield,
future employee turnover rates and
future employee stock option
exercise behaviors. Changes in these
assumptions can materially affect the
fair value estimate.

Our long-term incentive plan
requires management to make
assumptions regarding the likelihood
of achieving long-term Company
goals as well as estimate future
Russell 2000 results.

The Company maintains a Stock
Incentive Plan, which provides for
share-based payment awards,
including non-statutory stock
options, restricted stock, stock
appreciation rights, and long-term
incentive program ("LTIP") awards.
We determine the fair value of our
non-qualified stock option awards at
the date of grant using a Black-
Scholes model. We determine the fair
value of our restricted share awards
at the date of grant using an average
of the high and low market price of
our stock.

LTIP awards provide certain senior
executives an opportunity to receive
award payments, generally in cash.
For each performance cycle, the
Company’s financial results are
compared to the Russell 2000 indices
for the same periods based upon the
following: (a) average return on total
capital, (b) earnings per share growth
and (c) total return to shareholders.
No awards will be payable unless the
Company’s performance is at least in
the 25th percentile of the designated
indices. The maximum award is
payable if performance reaches the
75th percentile of the designated
indices. Awards will be paid out at
100% at the 50th percentile. Awards
for performance between the 25th
and 75th percentiles are determined
by straight-line interpolation.

In order to estimate the liability
associated with LTIP awards,
management must make assumptions
as to how our current performance
compares to current Russell 2000
data based upon the Russell 2000’s
historical results. This analysis is
performed on a quarterly basis. When
sufficient Russell 2000 data for a
year is available, which typically will
not be until May or June of the
following year, management will
adjust the liability to reflect its best
estimate of the total award. Actual
results could differ significantly from
management’s estimates. The total
estimated liability as of December
31, 2014, was $16.0 million.

Effect if Actual Results Differ From
Assumptions

A lower discount rate increases the
present value of benefit obligations
and increases pension expense. A one
percentage point decrease in the
assumed discount rate would have
increased pension expense in 2014
by $7.0 million. A one percentage
point increase in the assumed
discount rate would have decreased
pension expense in 2014 by $3.4
million.

A lower expected rate of return on
pension plan assets would increase
pension expense. For 2014 and 2013,
the expected rate of return on plan
assets was 7.5%. A one-percentage
point increase/decrease in the
assumed return on pension plan
assets would have changed pension
expense in 2014 by approximately
$5.5 million. During 2014, the actual
return on pension plan assets of
11.4% was higher than our expected
rate of return on pension plan assets
of 7.5%.

Pension Plans

Methodology

Judgment and Uncertainties

We maintain a qualified defined
benefit pension, as well as a non-
qualified Supplemental Employees
Retirement Plan ("SERP"), for
certain key executives. See Note 14,
Pension Plans, in the Notes to
Consolidated Financial Statements
included in this Form 10-K for
further discussion of these plans.

Expenses and liabilities associated
with each of these plans are
determined based upon actuarial
valuations. Integral to these actuarial
valuations are a variety of
assumptions including expected
return on plan assets and discount
rate. We regularly review these
assumptions, which are updated at
the measurement date, December
31st. In accordance with generally
accepted accounting principles, the
impact of differences between actual
results and the assumptions are
accumulated and generally amortized
over future periods, which will affect
expense recognized in future periods.
While reviewing our assumptions,
we considered the new mortality data
issued by the Society of Actuaries in
2014. We reviewed the size and
demographics of the population of
the plan and determined the RP-2000
Scale AA Generational based
mortality table was best suited to our
plan.

Additionally, the Company
previously used the Citigroup
Discount Yield Curve in generating
its discount rate assumption. As part
of the Company's annual evaluation
of it's assumptions, the Citigroup
Above Median Double-A Curve was
deemed to be a more appropriate
basis for generating our discount rate
assumption, as the future cash flows
of the plan are more closely aligned
to the Above Median Double-A
Curve.

The discount rate represents the
interest rate used to determine the
present value of future cash flows
currently expected to be required to
settle the pension obligation. For
2014, management determined the
Citigroup Above Median Double-A
Curve to be most appropriate for our
discount rate assumptions. This index
was designed to provide a market
average discount rate to assist plan
sponsors in valuing the liabilities
associated with postretirement
obligations. Additionally, we
reviewed the changes in the general
level of interest rates since the last
measurement date noting that overall
rates had decreased when compared
to 2013.

Based upon this information, we
used a 3.80% discount rate as of
December 31, 2014, for the qualified
defined benefit pension plan. This
rate takes into consideration the
participants in our pension plan and
the anticipated payment stream as
compared to the Citigroup Above
Median Double-A Curve. For the
SERP, we used the same
methodology as the pension plan and
derived a discount rate of 3.15% in
2014 for the benefit obligation. The
difference in the discount rates is
primarily due to the expected
duration of SERP payments, which is
shorter than the anticipated duration
of benefit payments to be made to the
average participant in the pension
plan. The qualified defined benefit
pension plan and SERP used
discount rates of 4.60% and 3.60% at
December 31, 2013, respectively, for
purposes of calculating the benefit
obligation.

The expected long-term rate of return
on plan assets represents the average
rate of earnings expected on the
funds invested to provide for
anticipated benefit payments. The
expected return on assets assumption
is developed based upon several
factors. Such factors include current
and expected target asset allocation,
our historical experience of returns
by asset class type, a risk premium
and an inflation estimate.

Income Taxes

Methodology

Judgment and Uncertainties

Effect if Actual Results Differ From
Assumptions

We do not anticipate a significant
change in our unrecognized tax
benefits within the next twelve
months. We file tax returns in
numerous U.S. and foreign
jurisdictions, with returns subject to
examination for varying periods, but
generally back to and including 2008.
It is our policy to record interest and
penalties on unrecognized tax benefits
as income taxes. A one percent
increase/decrease in our tax rate
would affect our 2014 earnings by
$1.0 million.

Management believes that sufficient

income will be earned in the future to
realize deferred income tax assets, net
of valuation allowances recorded. The
realization of these deferred tax assets
can be impacted by changes to tax
laws or statutory tax rates and future
taxable income levels.

Our effective tax rate on earnings
from continuing operations was
31.8% for 2014. Our effective tax rate
is based on expected or reported
income or loss, statutory tax rates, and
tax planning opportunities available to
us in the various jurisdictions in which
we operate. Significant judgment is
required in determining our effective
tax rate and in evaluating our tax
positions. We establish reserves when,
despite our belief that our tax return
positions are valid and defensible, we
believe that certain positions may not
prevail if challenged. We adjust these
reserves in light of changing facts and
circumstances, such as the progress of
a tax audit or changes in tax
legislation. Our effective tax rate
includes the impact of reserve
provisions and changes to reserves
that we consider appropriate. This rate
is then applied to our quarterly
operating results. In the event that
there is a significant unusual or one-
time item recognized in our operating
results, the tax attributable to that item
would be separately calculated and
recorded at the same time as the
unusual or one-time item.

Tax laws in certain of our operating
jurisdictions require items to be
reported for tax purposes at different
times than the items are reflected in
our financial statements. One example
of such temporary differences is
depreciation expense. Other
differences are permanent, such as
expenses that are never deductible on
our tax returns, an example being a
charge related to the impairment of
goodwill. Temporary differences
create deferred tax assets and
liabilities. Deferred tax assets
generally represent items that can be
used as tax deductions or credits in
our tax returns in future years for
which we have already recorded the
tax benefit in our financial statements.
Deferred tax liabilities generally
represent tax expense recognized in
our financial statements for which
payment is not yet due or the realized
tax benefit of expenses we have
already reported in our tax returns, but
have not yet recognized as expense in
our financial statements.

As of December 31, 2014, we had
recognized $57.2 million of deferred
tax assets, net of valuation
allowances. A portion of this amount,
$2.7 million, is related to a capital loss
recorded on the disposition of our
Distribution segment’s Mexico
operations. The realization of these
benefits is dependent in part on future
taxable capital gains and tax planning
strategies designed to realize the
benefit associated with the capital
loss. For those U.S. states where the
expiration of tax loss or credit
carryforwards or the projected
operating results indicates that
realization is not likely, a valuation
allowance is provided.

Environmental Costs

Methodology

Judgment and Uncertainties

Effect if Actual Results Differ From
Assumptions

At December 31, 2014, amounts

accrued for known environmental
remediation costs were $10.6 million.
A 10% change in this accrual would
have impacted pre-tax earnings by
$1.1 million. Further information
about our environmental costs is
provided in Note 10, Environmental
Costs, in the Notes to Consolidated
Financial Statements.

Environmental costs are accrued when
it is probable that a liability has been
incurred and the amount can be
reasonably estimated. The most likely
cost to be incurred is accrued based on
an evaluation of currently available
facts with respect to each individual
site, including existing technology,
current laws and regulations and prior
remediation experience. Liabilities
with fixed or readily determinable
payment dates are discounted.

We believe that expenditures
necessary to comply with the present
regulations governing environmental
protection will not have a material
effect upon our competitive position,
consolidated financial position, results
of operations or cash flows.

Our operations are subject to
environmental regulation by federal,
state and local authorities in the
United States and regulatory
authorities with jurisdiction over our
foreign operations. As a result, we
have established and update, as
necessary, policies relating to
environmental standards of
performance for our operations
worldwide.

When we become aware of an
environmental risk, we perform a site
study to ascertain the potential
magnitude of contamination and the
estimated cost of remediation.

We continually evaluate the identified
environmental issues to ensure the
time to complete the remediation and
the total cost of remediation are
consistent with our initial estimate. If
there is any change in the cost and/or
timing of remediation, the accrual is
adjusted accordingly.

RECENT ACCOUNTING STANDARDS

A summary of recent accounting standards is included in Note 1, Summary of Significant Accounting Policies, in the Notes to
Consolidated Financial Statements, included in Item 8, Financial Statements and Supplementary Data, of this Form 10-K.

SELECTED QUARTERLY FINANCIAL DATA

2014

Net sales ...................................................................
Gross profit...............................................................
Earnings from continuing operations .......................
Loss from discontinued operations, net of tax .........
Gain (loss) on disposal of discontinued operations,
net of tax...................................................................
Net earnings..............................................................
Basic earnings (loss) per share:

From continuing operations ...................................
From discontinued operations................................
From disposal of discontinued operations .............
Basic earnings per share ...........................................
Diluted earnings (loss) per share:

From continuing operations ...................................
From discontinued operations................................
From disposal of discontinued operations .............
Diluted earnings per share........................................

2013

Net sales ...................................................................
Gross profit...............................................................
Earnings from continuing operations .......................
Loss from discontinued operations, net of tax .........
Gain on disposal of discontinued operations, net of
tax .............................................................................
Net earnings..............................................................
Basic earnings (loss) per share:

From continuing operations ...................................
From discontinued operations................................
From disposal of discontinued operations .............
Diluted earnings per share........................................

First
Quarter

407,958

Fourth
Third
Second
Quarter
Quarter
Quarter
(in thousands, except per share amounts)
477,931
$

453,018

456,055

Total
Year

$ 1,794,962

114,000

128,549

129,365

136,025

507,939

11,944
(487)

—

11,457

0.45
(0.02)
—

0.43

0.44
(0.02)
—

16,709
(515)

379

16,573

0.62
(0.02)
0.01

0.61

0.61
(0.02)
0.01

15,797

$
(924) $

21,330
(998)

(94)
14,779

0.58
(0.03)
—

0.55

0.57
(0.04)
—

(5,269)
15,063

0.79
(0.04)
(0.19)
0.56

0.77
(0.04)
(0.19)
0.54

65,780
(2,924)

(4,984)
57,872

2.43
(0.11)
(0.18)
2.14

2.37
(0.11)
(0.18)
2.08

0.42

0.60

0.53

First
Quarter

380,842

Fourth
Third
Second
Quarter
Quarter
Quarter
(in thousands, except per share amounts)
431,040
$

425,219

416,820

Total
Year

$ 1,653,921

108,803

120,352

118,333

115,823

463,311

7,284
(130)

—

7,154

0.27

—

0.27

0.26

—

18,590
(698)

—

17,892

0.70
(0.03)
—

0.67

0.70
(0.03)
—

19,685
(926)

420

19,179

0.74
(0.04)
0.02

0.72

0.72
(0.04)
0.02

13,507
(632)

—

12,875

0.50
(0.02)
—

0.48

0.49
(0.02)
—

0.26

0.67

0.70

0.47

59,066
(2,386)

420

57,100

2.21
(0.09)
0.02

2.14

2.17
(0.09)
0.02

2.10

Included within certain quarterly results are a variety of unusual or significant adjustments that may affect comparability. The
most significant of such adjustments are described below as well as within Management’s Discussion and Analysis of Financial
Condition and Results of Operations and the Notes to Consolidated Financial Statements. Additionally, due to the nature of the
earnings per share calculation, the sum of quarterly earnings per share data may not equal the cumulative earnings per share
data for the year. The 2013 quarterly results have been restated to reflect the disposal of Delamac during the current year.

Nonrecurring items within the 2014 quarterly results are as follows: fourth quarter, a $5.3 million loss on disposal of
discontinued operations, net of tax related to the sale of Delamac; third quarter, $2.2 million of costs associated with the sale of
our Moosup facility.

Nonrecurring items within the 2013 quarterly results are as follows: fourth quarter, a $2.1 million non-cash non-tax deductible
charge for the impairment of goodwill related to VT Composites and a $0.4 million gain on discontinued operations due to a
favorable tax result versus previous estimates and other activity related to the settlement of the closing balance sheet of the
Distribution segment's Canadian operations.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We have various market risk exposures that arise from our ongoing business operations. Market risk is the potential economic
loss that may result from adverse changes in the fair value of financial instruments. Our financial results are impacted by
changes in interest rates, certain foreign currency exchange rates and commodity prices.

Foreign Currencies

We have manufacturing, sales, and distribution facilities in various locations throughout the world. As a result, we make
investments and conduct business transactions denominated in various currencies, including the U.S. dollar, the British pound,
the European euro, the Mexican peso, and the Australian dollar. Total annual foreign sales from continuing operations,
including foreign export sales, averaged approximately $212.9 million over the last three years. More than half of our foreign
sales are to Europe. Foreign sales from continuing operations represented 13.6% of consolidated net sales from continuing
operations in 2014. We estimate a hypothetical 10% adverse change in foreign currency exchange rates relative to the U.S.
dollar for 2014 would have had an unfavorable impact of $8.6 million on sales and a $0.1 million unfavorable impact on
operating income. We manage foreign currency exposures that are associated with committed foreign currency purchases and
sales and other assets and liabilities created in the normal course of business at the subsidiary operations level. Sometimes we
may, through the use of forward contracts, hedge the price risk associated with committed and forecasted foreign denominated
payments and rates. Historically the use of these forward contracts has been minimal. We do not use derivatives for speculative
or trading purposes.

Interest Rates

Our primary exposure to interest rate risk results from our outstanding debt obligations. The level of fees and interest charged
on revolving credit commitments and borrowings are based upon leverage levels and market interest rates.

Our principal debt facilities are contained within a variable rate credit agreement that provides a $400.0 million revolving credit
facility and a $100.0 million term loan commitment. Both these agreements were entered into on November 20, 2012, and
expire on July 31, 2017. Total average bank borrowings for 2014 were $214.8 million. The impact of a hypothetical 100 basis
point increase in the interest rates on our average bank borrowings would have resulted in a $2.1 million increase in interest
expense.

In November 2010, we issued $115.0 million convertible unsecured senior notes due on November 15, 2017, in a private
placement offering. These notes bear 3.25% interest per annum on the principal amount, payable semiannually in arrears on
November 15 and May 15 of each year, beginning on May 15, 2011, and have an effective interest rate of 5.25%.

From time to time we will enter into interest rate swap contracts for the purpose of securing a fixed interest rate on our variable
interest rate borrowings. These contracts allow us to create certainty related to future cash flows as they relate to fluctuations in
LIBOR rates and the impact they have on interest payments on our variable rate debt.

Commodity Prices

We are exposed to volatility in the price of raw materials used in certain manufacturing operations as well as a variety of items
procured by our distribution business. These raw materials include, but are not limited to, aluminum, titanium, nickel, copper
and other specialty metals. We manage our exposure related to these price changes through strategic procurement practices.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of Kaman Corporation:

In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of operations, of
comprehensive income, of shareholders’ equity, and of cash flows present fairly, in all material respects, the financial position of
Kaman Corporation and its subsidiaries at December 31, 2014 and December 31, 2013, and the results of their operations and
their cash flows for each of the two years in the period ended December 31, 2014 in conformity with accounting principles generally
accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal
control over financial reporting as of December 31, 2014, based on criteria established in Internal Control - Integrated Framework
(2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company's management
is responsible for these financial statements, for maintaining effective internal control over financial reporting and for its assessment
of the effectiveness of internal control over financial reporting, included in Management's Report on Internal Control over Financial
Reporting appearing under Item 9A. Our responsibility is to express opinions on these financial statements and on the Company's
internal control over financial reporting based on our integrated audits. We conducted our audits in accordance with the standards
of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits
to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective
internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included
examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting
principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our
audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting,
assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal
control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the
circumstances. We believe that our audits provide a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted
accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain
to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets
of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are
being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that
could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because
of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

As described in Management's Report on Internal Control over Financial Reporting, management has excluded B.W. Rogers
Company (the “Acquired Business”) from its assessment of internal control over financial reporting as of December 31, 2014
because it was acquired by the Company through a purchase business combination during 2014. We have also excluded the
Acquired Business from our audit of internal control over financial reporting. The Acquired Business is a wholly-owned subsidiary
whose total assets and total revenues represent 5% and 4%, respectively, of the related consolidated financial statement amounts
as of and for the year ended December 31, 2014.

/s/ PricewaterhouseCoopers LLP

Hartford, Connecticut
February 23, 2015

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Shareholders
Kaman Corporation:

We have audited the accompanying consolidated statements of operations, comprehensive income, shareholders’ equity, and
cash flows of Kaman Corporation and subsidiaries for the year ended December 31, 2012. In connection with our audit of the
consolidated financial statements, we also have audited financial statement schedule II. These consolidated financial statements
and financial statement schedule are the responsibility of Kaman Corporation’s management. Our responsibility is to express an
opinion on these consolidated financial statements and financial statement schedule based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States).
Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the results of
operations and the cash flows of Kaman Corporation and subsidiaries for the year ended December 31, 2012, in conformity
with U.S. generally accepted accounting principles. Also in our opinion, the related financial statement schedule, when
considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the
information set forth therein.

/s/ KPMG LLP

Hartford, Connecticut
February 25, 2013

CONSOLIDATED BALANCE SHEETS
KAMAN CORPORATION AND SUBSIDIARIES
(In thousands, except share and per share amounts)

Current assets:

Assets

Cash and cash equivalents ......................................................................................................
Accounts receivable, net.........................................................................................................
Inventories ..............................................................................................................................
Deferred income taxes ............................................................................................................
Income tax refunds receivable ................................................................................................
Other current assets.................................................................................................................
Total current assets ..........................................................................................................
Property, plant and equipment, net of accumulated depreciation of $183,829 and $167,282,
respectively ...............................................................................................................................
Goodwill....................................................................................................................................
Other intangible assets, net .......................................................................................................
Deferred income taxes ..............................................................................................................
Other assets ...............................................................................................................................
Total assets ................................................................................................................................
Liabilities and Shareholders’ Equity

Current liabilities:

Notes payable..........................................................................................................................
Current portion of long-term debt...........................................................................................
Accounts payable – trade........................................................................................................
Accrued salaries and wages ....................................................................................................
Advances on contracts ............................................................................................................
Other accruals and payables ...................................................................................................
Income taxes payable..............................................................................................................
Total current liabilities.......................................................................................................
Long-term debt, excluding current portion ...............................................................................
Deferred income taxes ..............................................................................................................
Underfunded pension ................................................................................................................
Other long-term liabilities .........................................................................................................
Commitments and contingencies (Note 16)..............................................................................
Shareholders' equity:

Preferred stock, $1 par value, 200,000 shares authorized; none outstanding........................
Common stock, $1 par value, 50,000,000 shares authorized; voting; 27,518,226 and

27,189,922 shares issued, respectively ..............................................................................
Additional paid-in capital ......................................................................................................
Retained earnings ..................................................................................................................
Accumulated other comprehensive income (loss).................................................................
Less 385,942 and 330,487 shares of common stock, respectively, held in treasury, at
cost .....................................................................................................................................
Total shareholders’ equity................................................................................................
Total liabilities and shareholders’ equity...................................................................................

December 31,
2014

December 31,
2013

12,411
234,648
359,741
25,888
—
29,568
662,256

147,825
238,581
94,491
34,784
23,268
1,201,205

— $

10,000
116,787
42,214
2,406
47,583
2,734
221,724
271,232
3,391
141,546
45,647

10,384
205,873
390,495
30,128
2,297
26,028
665,205

148,508
203,923
89,449
10,287
23,259
1,140,631

559
10,000
119,482
33,677
9,470
54,095
673
227,956
264,655
3,855
85,835
47,038

—

27,518
145,845
479,984
(126,261)

27,190
133,517
439,441
(81,121)

(9,421)
517,665
1,201,205

(7,735)
511,292
1,140,631

See accompanying notes to consolidated financial statements.

CONSOLIDATED STATEMENTS OF OPERATIONS
KAMAN CORPORATION AND SUBSIDIARIES
(In thousands, except per share amounts)

Net sales ...................................................................................................................
Cost of sales .............................................................................................................
Gross profit...............................................................................................................
Selling, general and administrative expenses...........................................................
Goodwill impairment ...............................................................................................
Net loss on sale of assets ..........................................................................................
Operating income from continuing operations.........................................................
Interest expense, net .................................................................................................
Other expense (income), net.....................................................................................
Earnings from continuing operations before income taxes ......................................
Income tax expense ..................................................................................................
Earnings from continuing operations .......................................................................
Earnings (loss) from discontinued operations, net of taxes .....................................
Gain (loss) on disposal of discontinued operations, net of taxes .............................
Total earnings (loss) from discontinued operations .................................................
Net earnings..............................................................................................................
Earnings per share:

Basic earnings per share from continuing operations ............................................
Basic earnings (loss) per share from discontinued operations...............................
Basic earnings (loss) per share from disposal of discontinued operations ............
Basic earnings per share ...........................................................................................
Diluted earnings per share from continuing operations.........................................
Diluted earnings (loss) per share from discontinued operations............................
Diluted earnings (loss) per share from disposal of discontinued operations .........
Diluted earnings per share........................................................................................
Weighted average shares outstanding:

Basic.......................................................................................................................
Diluted....................................................................................................................
Dividends declared per share ...................................................................................

For the Year Ended December 31,

2014

2013

2012

$ 1,794,962

$ 1,653,921

$ 1,563,342

1,287,023

1,190,610

1,128,247

507,939

397,199

—

233

110,507

13,382

623

96,502

30,722

65,780
(2,924)
(4,984)
(7,908)
57,872

2.43
(0.11)
(0.18)
2.14

2.37
(0.11)
(0.18)
2.08

463,311

357,752

2,071

142

103,346

12,294

398

90,654

31,588

59,066
(2,386)
420
(1,966)
57,100

2.21
(0.09)
0.02

2.14

2.17
(0.09)
0.02

2.10

435,095

343,396

—

110

91,589

12,113
(219)
79,695

26,748

52,947

755

1,323

2,078

55,025

2.00

0.03

0.05

2.08

1.99

0.03

0.05

2.07

27,053

27,777

26,744

27,143

0.64

26,425

26,622

0.64

See accompanying notes to consolidated financial statements.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
KAMAN CORPORATION AND SUBSIDIARIES
(In thousands)

Net earnings..............................................................................................................
Other comprehensive income, net of tax:

Foreign currency translation adjustments ..............................................................
Change in unrealized loss on derivative instruments, net of tax benefit
(expense) of ($161), $38, and $33, respectively....................................................
Pension plan adjustments, net of tax benefit (expense) of $23,583, ($23,933),
and $4,967, respectively ........................................................................................
Total comprehensive income....................................................................................

For the Year Ended December 31,

2014

2013

2012

57,872

57,100

55,025

(6,457)

2,296

4,850

264

(61)

(54)

(38,947)
12,732

38,234

97,569

(8,440)
51,381

See accompanying notes to consolidated financial statements.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
KAMAN CORPORATION AND SUBSIDIARIES
(In thousands, except share amounts)

Common Stock

Additional
Paid-In

Retained

Accumulated
Other
Comprehensive

Treasury Stock

Total
Shareholders'

Capital

Earnings

Income (Loss)

Equity

26,495,828
—
—

$ 26,496
—
—

$ 109,584
—
—

$ 361,389
55,025
—

—
—

(16,941)
—

291,037
94,392
26,881,257
—
—
—
—

216,510
92,155
27,189,922
—
—
—
—

291
94
$ 26,881
—
—
—
—

217
92
$ 27,190
—
—
—
—

7,160
5,778
$ 122,522
—
—
—
—

6,076
4,919
$ 133,517
—
—
—
—

—
—
$ 399,473
57,100
—
(17,132)
—

—
—
$ 439,441
57,872
—
(17,329)
—

(117,946)
—
(3,644)

—
—

—
—
(121,590)
—
40,469
—
—

—
—
(81,121)
—
(45,140)
—
—

258,424
—
—

—
21,343

(9,571)
7,277
277,473
—
—
—
18,468

(3,825)
38,371
330,487
—
—
—
21,312

$ (6,452) $
—
—

—
(733)

99
(7)

$ (7,093) $
—
—
—
(644)

40
(38)
$ (7,735) $
—
—
—
(853)

373,071
55,025
(3,644)

(16,941)
(733)

7,550
5,865
420,193
57,100
40,469
(17,132)
(644)

6,333
4,973
511,292
57,872
(45,140)
(17,329)
(853)

Balance at December 31, 2011
Net earnings ..............................................
Other comprehensive income ...................
Dividends ..................................................
Purchase of treasury shares.......................
Employee stock plans,

net of tax expense of $883 .....................
Share-based compensation expense..........
Balance at December 31, 2012
Net earnings ..............................................
Other comprehensive income ...................
Dividends ..................................................
Purchase of treasury shares.......................
Employee stock plans,

net of tax expense of $543 .....................
Share-based compensation expense..........
Balance at December 31, 2013
Net earnings ..............................................
Other comprehensive income ...................
Dividends ..................................................
Purchase of treasury shares.......................
Employee stock plans,

net of tax expense of $834 .....................
Share-based compensation expense..........
Balance at December 31, 2014

235,233
93,071
27,518,226

6,992
—
5,336
—
$ 145,845
(126,261)
See accompanying notes to consolidated financial statements.

—
—
$ 479,984

235
93
$ 27,518

16,352
17,791
385,942

(815)
(18)
$ (9,421) $

6,412
5,411
517,665

CONSOLIDATED STATEMENTS OF CASH FLOWS
KAMAN CORPORATION AND SUBSIDIARIES
(In thousands)

For the Year Ended December 31,
2013

2014

2012

Cash flows from operating activities:
Earnings from continuing operations .............................................................................
Adjustments to reconcile earnings from continuing operations to net cash provided
by (used in) operating activities of continuing operations:

65,780

59,066

52,947

Depreciation and amortization ................................................................................
Accretion of convertible notes discount..................................................................
Provision for doubtful accounts ..............................................................................
Net loss on sale of assets.........................................................................................
Goodwill impairment ..............................................................................................
Net gain (loss) on derivative instruments ...............................................................
Stock compensation expense ..................................................................................
Excess tax (expense) benefit from share-based compensation arrangements.........
Deferred income taxes ............................................................................................
Changes in assets and liabilities, excluding effects of acquisitions/divestitures:

Accounts receivable..............................................................................................
Inventories ............................................................................................................
Income tax refunds receivable ..............................................................................
Other current assets...............................................................................................
Accounts payable - trade ......................................................................................
Accrued contract losses ........................................................................................
Advances on contracts ..........................................................................................
Other accrued expenses and payables...................................................................
Income taxes payable............................................................................................
Pension liabilities..................................................................................................
Other long-term liabilities.....................................................................................
Net cash provided by (used in) operating activities of continuing operations ...
Net cash provided by (used in) operating activities of discontinued operations
Net cash provided by (used in) operating activities ...........................................

Cash flows from investing activities:

Proceeds from sale of assets....................................................................................
Proceeds from sale of discontinued operations.......................................................
Expenditures for property, plant & equipment........................................................
Acquisition of businesses including earn out adjustments, net of cash received....
Other, net.................................................................................................................
Cash provided by (used in) investing activities of continuing operations............
Cash provided by (used in) investing activities of discontinued operations ........
Cash provided by (used in) investing activities....................................................

Cash flows from financing activities:

Net borrowings (repayments) under revolving credit agreements..........................
Borrowings under Term Loan Facility....................................................................
Debt repayment .......................................................................................................
Book overdraft ........................................................................................................
Proceeds from exercise of employee stock awards.................................................
Purchase of treasury shares .....................................................................................
Dividends paid ........................................................................................................
Debt issuance costs .................................................................................................
Windfall tax (expense) benefit ................................................................................
Other........................................................................................................................
Cash provided by (used in) financing activities of continuing operations ...........
Cash provided by (used in) financing activities of discontinued operations ........
Cash provided by (used in) financing activities ...................................................
Net increase (decrease) in cash and cash equivalents ....................................................
Effect of exchange rate changes on cash and cash equivalents......................................
Cash and cash equivalents at beginning of period .........................................................
Cash and cash equivalents at end of period....................................................................

36,209
1,931
853
233
—
1,071

5,411
(834)
1,434

(23,876)
30,181
2,292
(2,560)
(3,858)
(1,899)
(7,065)
6,746
4,455
(6,380)
(1,035)
109,089
(2,902)
106,187

39
7,863
(28,283)
(77,618)
(2,060)
(100,059)
3
(100,056)

15,788
—
(10,000)
1,568
6,411
(853)
(17,286)
—
834
—
(3,538)
—
(3,538)
2,593
(566)
10,384
12,411

31,555
1,833
1,286
142
2,071
178

4,973
(543)
2,938

(22,565)
(19,707)
(2,297)
1,299
12,170
(969)
7,570
(10,187)
(2,024)
(3,118)
1,169
64,840
(1,892)
62,948

100
—
(40,852)
(18,162)
(2,305)
(61,219)
(56)
(61,275)

22,720
—
(10,000)
(9,878)
6,333
(644)
(17,091)
(98)
543
—
(8,115)
—
(8,115)
(6,442)
233
16,593
10,384

28,165
1,738
530
110
—
(427)
5,865
(883)
(1,125)

27,963
(18,690)
527
4,956
211
(435)
(577)
(15,806)
(749)
56
1,448
85,824
(4,854)
80,970

333
8,743
(32,386)
(87,621)
(5,920)
(116,851)
(1,013)
(117,864)

(11,348)
100,000
(35,000)
(2,698)
7,550
(733)
(16,882)
(2,132)
883
—
39,640
(1,067)
38,573
1,679
(71)
14,985
16,593

See accompanying notes to consolidated financial statements.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Years Ended December 31, 2014, 2013 and 2012

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Kaman Corporation, headquartered in Bloomfield, Connecticut, was incorporated in 1945 and is a diversified company that
conducts business in the aerospace and distribution markets. Kaman Corporation reports information for itself and its
subsidiaries (collectively, the "Company") in two business segments, Distribution and Aerospace.

Basis of Presentation

The accompanying consolidated financial statements include the accounts of the Company and its subsidiaries. All
intercompany balances and transactions have been eliminated in consolidation. Certain amounts in prior year financial
statements and notes thereto have been reclassified to conform to current year presentation.

Use of Estimates

The preparation of the consolidated financial statements in accordance with accounting principles generally accepted in the
United States of America requires management to make estimates and assumptions that affect the amounts reported in the
consolidated financial statements and accompanying notes. Significant items subject to such estimates and assumptions include
the carrying amount of property, plant and equipment, goodwill and other intangible assets; valuation allowances for
receivables, inventories and income taxes; valuation of share-based compensation; vendor incentives; assets and obligations
related to employee benefits; estimates of environmental remediation costs; and accounting for long-term contracts including
claims. Actual results could differ from those estimates.

Foreign Currency Translation

The Company has certain operations outside the United States that prepare financial statements in currencies other than the U.S.
dollar. For these operations, results of operations and cash flows are translated using the average exchange rate throughout the
period. Assets and liabilities are generally translated at end of period rates. The gains and losses associated with these
translation adjustments are included as a component of accumulated other comprehensive income (loss) in shareholders’ equity.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of trade accounts
receivable. The carrying amounts of these items, as well as trade accounts payable and notes payable, approximate fair value
due to the short-term maturity of these instruments. At December 31, 2014 and 2013, no individual customer accounted for
more than 10% of consolidated accounts receivable or consolidated net sales. Foreign sales associated with continuing
operations were approximately 13.6%, 13.9% and 10.5% of the company’s net sales in 2014, 2013 and 2012, respectively, and
are concentrated in the United Kingdom, Germany, New Zealand and Asia.

Additional Cash Flow Information

Non-cash investing activities in 2014 include an accrual of $1.5 million for capital leases and $1.5 million in earn-out payments
to the former owners of an aerospace acquisition. Non-cash financing activities in 2014 include an adjustment to other
comprehensive income related to the underfunding of the pension and SERP plans and changes in the fair value of derivative
financial instruments that qualified for hedge accounting. Additionally, non-cash financing activities in 2014 include $4.3
million of dividends declared but not yet paid. The total net adjustment was $38.7 million, net of tax of $23.4 million. Non-cash
investing activities in 2013 include an accrual of $0.9 million for purchases of property and equipment and $3.5 million in earn-
out payments to the former owners of an aerospace acquisition. Non-cash financing activities in 2013 include an adjustment to
other comprehensive income related to the underfunding of the pension and SERP plans and changes in the fair value of
derivative financial instruments that qualified for hedge accounting. The total adjustment was $39.0 million, net of tax of $23.6
million. Additionally, non-cash financing activities in 2013 include $4.3 million of dividends declared but not yet paid. Non-
cash investing activities in 2012 include an accrual of $3.1 million for purchases of property and equipment. Non-cash
financing activities in 2012 include an adjustment to other comprehensive income related to the underfunding of the pension
and SERP plans and changes in the fair value of derivative financial instruments that qualified for hedge accounting. The total
adjustment was $8.2 million, net of tax of $5.0 million. The Company describes its pension obligations in more detail in Note
14, Pension Plans. Additionally, non-cash financing activities in 2012 include $4.3 million of dividends declared but not yet
paid.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
For the Years Ended December 31, 2014, 2013 and 2012

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Revenue Recognition

Sales and estimated profits under long-term contracts are generally recognized using the percentage-of-completion method of
accounting, using as a measurement basis either the ratio that costs incurred bear to estimated total costs (after giving effect to
estimates of costs to complete based upon most recent information for each contract) or units-of-delivery. Reviews of contracts
are made routinely throughout their lives and the impact of revisions in profit estimates are recorded in the accounting period in
which the revisions are made. Anticipated contract losses are charged to operations when they are probable. In cases where we
have multiple contracts with a single customer, each contract is generally treated as a separate profit center and accounted for as
such. Except in the case of contracts accounted for using the cost-to-cost method of percentage of completion accounting,
revenues are recognized when the product has been shipped or delivered, depending upon when title and risk of loss have
passed. For certain U.S. government contracts delivery is deemed to have occurred when work is substantially complete and
acceptance by the customer has occurred by execution of a Material Inspection and Receiving Report, DD Form 250 or
Memorandum of Shipment.

Sales contracts are initially reviewed to ascertain if they involve multiple element arrangements. If such an arrangement exists
and there is no evidence of stand-alone value for each element of the undelivered items, recognition of sales for the
arrangement is deferred until all elements of the arrangement are delivered and risk of loss and title have passed. For elements
that do have stand-alone value or contracts that are not considered multiple element arrangements, sales and related costs of
sales are recognized as services are performed or when the product has been shipped or delivered depending upon when title
and risk of loss have passed.

Pre-contract costs incurred for items such as materials or tooling for anticipated contracts are included in inventory if recovery
of such costs is considered probable. Thereafter, if the Company determines it will not be awarded an anticipated contract and
the associated pre-contract costs cannot be applied to another program the costs are expensed immediately. Learning or start-up
costs incurred in connection with existing or anticipated follow-on contracts are charged to the existing contract unless the
terms of the contract permit recovery of these costs over a specific contractual term and provide for reimbursement if the
contract is canceled. As of December 31, 2014 and 2013, approximately $1.4 million and $1.3 million, respectively, of pre-
contract costs were included in inventory, which, in both cases, represented less than 1% of total inventory.

If it is probable that a claim with respect to change orders will result in additional contract revenue and the amount of such
additional revenue can be reliably estimated, then the additional contract revenue is considered in our accounting for the
program, but only if the contract provides a legal basis for the claim, the additional costs were unforeseen and not caused by
deficiencies in our performance, the costs are identifiable and reasonable in view of the work performed and the evidence
supporting the claim is objective and verifiable. If these requirements are met, the claim portion of the program is accounted for
separately to ensure revenue from the claim is recorded only to the extent claim related costs have been incurred; accordingly,
no profit with respect to such costs is recorded until the change order is formally approved. If these requirements are not met,
the forecast of total contract cost at completion (which is used to calculate the gross margin rate) for the basic contract is
generally increased to include all incurred and anticipated claim related costs.

Recognition of sales not accounted for under the cost-to-cost method of percentage of completion accounting occurs when the
sales price is fixed, collectability is reasonably assured and the product’s title and risk of loss has transferred to the customer.
The Company includes freight costs charged to customers in net sales and the correlating expense as a cost of sales. Sales tax
collected from customers is excluded from net sales in the accompanying Consolidated Statements of Operations.

Cost of Sales and Selling, General and Administrative Expenses

Cost of sales includes costs of products and services sold (i.e., purchased product, raw material, direct labor, engineering labor,
outbound freight charges, depreciation and amortization, indirect costs and overhead charges). Selling expenses primarily
consist of advertising, promotion, bid and proposal, employee payroll and corresponding benefits and commissions paid to sales
and marketing personnel. General and administrative expenses primarily consist of employee payroll including executive,
administrative and financial personnel and corresponding benefits, incentive compensation, independent research and
development, consulting expenses, warehousing costs, depreciation and amortization. Legal costs are expensed as incurred and
are generally included in general and administrative expenses. The Aerospace segment includes general and administrative
expenses as an element of program cost and inventory for certain government contracts.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
For the Years Ended December 31, 2014, 2013 and 2012

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Cost of Sales and Selling, General and Administrative Expenses - continued

Certain inventory related costs, including purchasing costs, receiving costs and inspection costs, for the Distribution segment
are not included in cost of sales. For the years ended December 31, 2014, 2013 and 2012, $3.4 million, $3.0 million and $3.0
million, respectively, of such costs are included in general and administrative expenses.

Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, demand deposits and short-term cash investments. These investments are
liquid in nature and have original maturities of three months or less. Book overdraft positions, which occur when total
outstanding issued checks exceed available cash balances at a single financial institution at the end of a reporting period, are
reclassified to accounts payable within the consolidated balance sheets. At December 31, 2014 and 2013, the Company had
book overdrafts of $7.3 million and $5.2 million, respectively, included in accounts payable.

Accounts Receivable

The Company has three types of accounts receivable: (a) Trade receivables, which consist of amounts billed and currently due
from customers; (b) U.S. Government contracts, which consist of (1) amounts billed, and (2) costs and accrued profit – not
billed; and (c) Commercial and other government contracts, which consist of (1) amounts billed, and (2) costs and accrued
profit – not billed.

The allowance for doubtful accounts reflects management’s best estimate of probable losses inherent in the trade accounts
receivable and billed contracts balance. Management determines the allowance based on known troubled accounts, historical
experience, and other currently available evidence.

Inventories

Inventory of merchandise for resale is stated at cost (using the average costing method) or market, whichever is lower.
Contracts and other work in process and finished goods are valued at production cost represented by raw material, labor and
overhead. For certain government contracts, allowable general and administrative expenses are also included in inventory.
Initial tooling and startup costs may be included, where applicable. Contracts and other work in process and finished goods are
not reported at amounts in excess of net realizable values. The Company includes raw material amounts in the contracts in
process and other work in process balances. Raw material includes certain general stock materials but primarily relates to
purchases that were made in anticipation of specific programs for which production has not been started as of the balance sheet
date.

Property, Plant and Equipment

Property, plant and equipment is recorded at cost. Depreciation is computed primarily on a straight-line basis over the estimated
useful lives of the assets. The estimated useful lives for buildings range from 15 to 40 years and for leasehold improvements
range from 1 to 20 years, whereas machinery, office furniture and equipment generally have useful lives ranging from 3 to 15
years. At the time of retirement or disposal, the acquisition cost of the asset and related accumulated depreciation are eliminated
and any gain or loss is credited to or charged against income.

Long-lived assets, such as property, plant, and equipment, and purchased intangible assets subject to amortization, are reviewed
for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable.
If circumstances require a long-lived asset be tested for possible impairment, the Company first compares undiscounted cash
flows expected to be generated by an asset to the carrying value of the asset. If the carrying value of the long-lived asset is not
recoverable on an undiscounted cash flow basis, impairment is recognized to the extent that the carrying value exceeds its fair
value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market
values and third-party independent appraisals, as considered necessary.

Maintenance and repair items are charged against income as incurred, whereas renewals and betterments are capitalized and
depreciated.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
For the Years Ended December 31, 2014, 2013 and 2012

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Goodwill and Other Intangible Assets

Goodwill represents the excess of the aggregate purchase price over the fair value of the net assets acquired in a purchase
business combination and is reviewed for impairment at least annually.

Accounting Standards Codification Topic 350, "Intangibles - Goodwill and Other", ("ASC 350") permits the assessment of
qualitative factors to determine whether events and circumstances lead to the conclusion that it is necessary to perform the two-
step goodwill impairment test required under ASC 350. The qualitative assessment management performs takes into
consideration the following factors: general economic conditions, industry specific performance, changes in carrying values of
the reporting units, the assessment of assumptions used in the previous fair value calculation and changes in transaction
multiples.

In the first step of the two-step test, the fair value of the reporting unit is compared with its carrying value (including goodwill).
If the fair value of the reporting unit is less than its carrying value, an indication of goodwill impairment exists for the reporting
unit and the enterprise must perform step two of the impairment test (measurement). In step two, an impairment loss is
recognized for any excess of the carrying amount of the reporting unit’s goodwill over the implied fair value of that goodwill.
The implied fair value of goodwill is determined by allocating the fair value of the reporting unit in a manner similar to a
purchase price allocation. The residual fair value after this allocation is the implied fair value of the reporting unit goodwill.

Fair value of the reporting unit is determined using an income methodology based on management’s estimates of forecasted
cash flows for each business unit, with those cash flows discounted to present value using rates commensurate with the risks
associated with those cash flows. In addition, management uses a market-based valuation method involving analysis of market
multiples of revenues and earnings before interest, taxes, depreciation and amortization (“EBITDA”) for (i) a group of
comparable public companies and (ii) recent transactions, if any, involving comparable companies. If the fair value of the
reporting unit exceeds its carrying value, step two need not be performed.

Goodwill and intangible assets with indefinite lives are evaluated annually for impairment in the fourth quarter, based on annual
forecast information. Intangible assets with finite lives are amortized using the straight-line method over their estimated period
of benefit. Goodwill and other intangible assets are reviewed for possible impairment whenever changes in conditions indicate
that the fair value of a reporting unit is more likely than not below its carrying value. See Note 9, Goodwill and Other
Intangible Assets, Net, for discussion of the goodwill impairment charge recorded in 2013. No such charges were recorded in
2014 or 2012.

Vendor Incentives

The Company’s Distribution segment enters into agreements with certain vendors providing for inventory purchase incentives
that are generally earned upon achieving specified volume-purchasing levels. The Company recognizes rebate income relative
to specific rebate programs as a reduction of the cost of inventory based on a systematic and rational allocation of the cash
consideration offered to each of the underlying transactions that results in progress toward earning the rebate, provided that the
amounts are probable and reasonably estimable. As of December 31, 2014 and 2013, total vendor incentive receivables,
included in other current assets, were approximately $17.7 million and $13.9 million, respectively.

Self-Insured Retentions

To limit exposure to losses related to group health, workers’ compensation, auto and product general liability claims, the
Company obtains third-party insurance coverage. The Company has varying levels of deductibles for these claims. The total
liability/deductible for group health is limited to $0.3 million per claim, workers’ compensation is limited to $0.4 million per
claim and for product/general liability and auto liability the limit is $0.3 million per claim. The cost of such benefits is
recognized as expense based on claims filed in each reporting period and an estimate of claims incurred but not reported
(“IBNR”) during such period. The estimates for the IBNR are based upon historical trends and information provided to us by
the claims administrators, and are periodically revised to reflect changes in loss trends. These amounts are included in other
accruals and payables on the consolidated balance sheets.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
For the Years Ended December 31, 2014, 2013 and 2012

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Self-Insured Retentions - continued

Liabilities associated with these claims are estimated in part by considering historical claims experience, severity factors and
other actuarial assumptions. Projections of future losses are inherently uncertain because of the random nature of insurance
claim occurrences and changes that could occur in actuarial assumptions. Such self-insurance accruals will likely include claims
for which the ultimate losses will be settled over a period of years.

Research and Development

Government funded research expenditures (which are included in cost of sales) were $1.6 million in 2014, $3.3 million in 2013,
and $7.8 million in 2012. Research and development costs not specifically covered by contracts are charged against income as
incurred and included in selling, general and administrative expenses. Such costs amounted to $6.7 million, $7.2 million and
$5.5 million in 2014, 2013 and 2012, respectively.

Income Taxes

Income taxes are accounted for using the asset and liability method. Deferred tax assets and liabilities are recognized for the
future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing
assets and liabilities and their respective tax bases and operating loss, capital loss and tax credit carryforwards. Deferred tax
assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those
temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax
rates is recognized in income in the period that includes the enactment date.

The Company records a benefit for uncertain tax positions in the financial statements only when it determines it is more likely
than not that such a position will be sustained upon examination by taxing authorities based on the technical merits of the
position. Unrecognized tax benefits represent the difference between the position taken in the tax return and the benefit
reflected in the financial statements.

Share-Based Payment Arrangements

The Company records compensation expense for share-based awards based upon an assessment of the grant date fair value of
the awards. The fair value of each option award is estimated on the date of grant using the Black-Scholes option valuation
model. A number of assumptions are used to determine the fair value of options granted. These include expected term, dividend
yield, volatility of the options and the risk free interest rate. See Note 18, Share-Based Arrangements, for further information.

Derivative Financial Instruments

The Company is exposed to certain risks relating to its ongoing business operations, including market risks relating to
fluctuations in foreign currency exchange rates and interest rates. Derivative financial instruments are recognized on the
consolidated balance sheets as either assets or liabilities and are measured at fair value. Changes in the fair values of derivatives
are recorded each period in earnings or accumulated other comprehensive income, depending on whether a derivative is
effective as part of a hedged transaction. Gains and losses on derivative instruments reported in accumulated other
comprehensive income are subsequently included in earnings in the periods in which earnings are affected by the hedged item.
The Company does not use derivative instruments for speculative purposes. See Note 6, Derivative Financial Instruments, for
further information.

Pension Accounting

The Company accounts for its defined benefit pension plan by recognizing the overfunded or underfunded status of the plan,
calculated as the difference between the plan assets and the projected benefit obligation, as an asset or liability on the balance
sheet, with changes in the funded status recognized through comprehensive income in the year in which they occur.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
For the Years Ended December 31, 2014, 2013 and 2012

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Pension Accounting - continued

Expenses and liabilities associated with the plan are determined based upon actuarial valuations. Integral to the actuarial
valuations are a variety of assumptions including expected return on plan assets and discount rate. The Company regularly
reviews the assumptions, which are updated at the measurement date, December 31st. The impact of differences between actual
results and the assumptions are accumulated and generally amortized over future periods, which will affect expense recognized
in future periods. See Note 14, Pension Plans, for further information.

Recent Accounting Standards

In January 2015, the FASB issued ASU No. 2015-01, "Income Statement - Extraordinary and Unusual Items (Subtopic
225-20)". The new standard eliminates the concept of extraordinary items and their segregation from the results of ordinary
operations and expands presentation and disclosure guidance to include items that are both unusual in nature and occur
infrequently. The new standard is effective for fiscal years, and interim periods within those years, beginning after December
15, 2015. The adoption of this standard is not expected to have a material impact to the Company's financial statements.

In August 2014, the FASB issued ASU No. 2014-15, "Presentation of Financial Statements - Going Concern (ASC Subtopic
205-40): Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern." The new standard provides
guidance regarding management's responsibility to evaluate whether there is substantial doubt about an entity's ability to
continue as a going concern and to provide related footnote disclosures. The new standard is effective for fiscal years, and
interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is permitted. The adoption of this
standard is not expected to have a material impact on the Company's financial statements.

In June 2014, the FASB issued ASU No. 2014-12, "Compensation - Stock Compensation (ASC Topic 718) - Accounting for
Share-Based Payments When the Terms of an Award Provide that a Performance Target Could Be Achieved after the Requisite
Service Period." The objective of this standard update is to eliminate inconsistent practices with regards to the accounting
treatment of share-based payment awards. The provisions of this ASU are effective for interim and annual periods beginning
after December 15, 2015. The Company does not expect these changes to have a material impact on its consolidated financial
statements.

In May 2014, the FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers (ASC Topic 606)." The objective
of this standard update is to remove inconsistent practices with regards to revenue recognition between US GAAP and
International Financial Reporting Standards ("IFRS"). The standard intends to improve comparability of revenue recognition
practices across entities, industries, jurisdictions and capital markets. The provisions of this ASU are effective for interim and
annual periods beginning after December 15, 2016; early adoption is not permitted. The Company is currently assessing the
potential impact of this ASU on its consolidated financial statements.

In April 2014, the FASB issued ASU No. 2014-08, "Reporting Discontinued Operations and Disclosures of Disposals of
Components of an Entity." This standard update requires that a disposal representing a strategic shift that has (or will have) a
major effect on an entity's financial results or a business activity classified as held for sale should be reported as discontinued
operations. The standard also expands the disclosures for discontinued operations and requires new disclosures related to
individually material disposals that do not meet the definition of a discontinued operation. The provisions of this ASU are
effective for interim and annual periods beginning after December 15, 2014. The Company does not expect these changes to
have a material impact on its consolidated financial statements.

In July 2013, the FASB issued ASU No. 2013-11, "Income Taxes ("ASC Topic 740") - Presentation of an Unrecognized Tax
Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists." The objective is to
end some inconsistent practices with regard to the presentation on the balance sheet of unrecognized tax benefits.The update
was effective for financial statement periods beginning after December 15, 2013. The Company adopted this standard
beginning January 1, 2014. There was no material impact on the Company's condensed consolidated balance sheet as of
December 31, 2014.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
For the Years Ended December 31, 2014, 2013 and 2012

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Recent Accounting Standards - continued

In March 2013, the FASB issued ASU No. 2013-05, "Foreign Currency Matters ("ASC Topic 830") - Parent's Accounting for
the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity
or of an Investment in a Foreign Entity." The objective is to resolve the diversity in practice with regard to whether ASC
Subtopic 810-10, Consolidation - Overall or ASC Subtopic 830-30 Foreign Currency Matters - Translation of Financial
Statements, applies to the release of the cumulative translation adjustment into net income when a parent either sells a part or
all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets that is
a nonprofit activity or a business (other than a sale of in substance real estate or conveyance of oil and gas mineral rights)
within a foreign entity. The update was effective for financial statement periods beginning after December 15, 2013. The
Company has adopted this standard beginning January 1, 2014. There was no impact on the Company's condensed consolidated
financial statements for the period ended December 31, 2014.

2. DISCONTINUED OPERATIONS

The following table provides information regarding the results of discontinued operations:

For the year ended December 31,

2014

2013

2012

In thousands
Net sales of discontinued operations................................................... $
Income from discontinued operations.................................................
Other income (expense) from discontinued operations ......................
Earnings (loss) from discontinued operations before income taxes....
Income tax benefit/(expense) ..............................................................
Earnings (loss) from discontinued operations before gain/(loss) on
disposal................................................................................................
Gain/(loss) on disposal of discontinued operations ............................
Income tax benefit/(expense) ..............................................................
Net gain (loss) on disposal of discontinued operations.......................
Earnings (loss) from discontinued operations..................................... $

23,540
(3,806)
(353)
(4,159)
1,235

(2,924)
(7,567)
2,583
(4,984)
(7,908) $

Delamac Disposal

49,603

27,885
(2,886)
(292)
(3,178)
792

(2,386)
—

420

420
(1,966) $

1,341
(222)
1,119
(364)

755

2,645
(1,322)
1,323

2,078

On December 19, 2014, the Company sold its Distribution segment's Mexico business unit, Delamac. As a result, the Company
has reported the results of operations and consolidated financial position of this component as discontinued operations within
the consolidated financial statements for all periods presented. The sale resulted in a net loss on disposal of discontinued
operations of $5.3 million for the year ended December 31, 2014.

Canadian Operations Disposal

On December 31, 2012, the Company sold substantially all of the assets and liabilities of the Distribution segment's Canadian
operations. As a result, the Company has reported the results of operations and consolidated financial position of this
component as discontinued operations within the consolidated financial statements for all periods presented.

During 2014, the Company recorded earnings from discontinued operations of $0.3 million due to a pension settlement that
resulted from the 2012 disposal of the Distribution segment's Canadian operations.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
For the Years Ended December 31, 2014, 2013 and 2012

3. ACQUISITIONS

The following table illustrates cash paid for acquisitions:

For the year ended December 31,

2014

2013

2012

70,948

17,284

3,060

3,610

828

Total cash paid for acquisitions ...................................................... $

77,618

18,162

74,465

11,951

1,205

87,621

2014 Acquisitions

On April 25, 2014, the Company acquired specific assets of B.W. Rogers Company and certain affiliated entities ("B.W.
Rogers"). Headquartered in Akron, Ohio, B.W. Rogers operated from twenty-one locations in seven states from the Northeast to
the Midwest. The acquisition of B.W. Rogers expands the Company's capabilities in both the fluid power and automation and
motion control product areas.

This acquisition was accounted for as a purchase transaction. The assets acquired and liabilities assumed were recorded based
on their fair values at the date of acquisition as follows (in thousands):

Cash.................................................................................................................................................................. $
Accounts receivable .........................................................................................................................................
Inventories........................................................................................................................................................
Property, plant and equipment .........................................................................................................................
Other tangible assets ........................................................................................................................................
Goodwill ..........................................................................................................................................................
Other intangible assets .....................................................................................................................................
Liabilities .........................................................................................................................................................
Net assets acquired ........................................................................................................................................
Less cash received .........................................................................................................................................
Net consideration........................................................................................................................................... $

11
13,332
9,614
850
784
37,804
16,870
(7,367)
71,898
(11)
71,887

The goodwill associated with B.W. Rogers is tax deductible and is the result of expected synergies from combining the
operations of the acquired business with the Company's operations and intangible assets that do not qualify for separate
recognition, such as an assembled workforce. Included in the Consolidated Statements of Operations for the year ended
December 31, 2014, is $73.1 million of revenue from this acquisition.

The fair value of the identifiable intangible assets of $16.9 million, consisting primarily of customer relationships, non-compete
agreements and trade names, was determined using the income approach. Specifically, the discounted cash flows method was
utilized for the customer relationships and non-compete agreements and the relief-from-royalty method was utilized for the
trade names. The fair value of the customer relationships ($14.9 million) is broken out into two asset categories, which are
amortized on a straight-line basis over periods ranging from 11 to 18 years; the fair value of the non-compete agreements ($1.1
million) is being amortized over periods ranging from 1.5 to 3 years; and the fair value of the trade name ($0.9 million) is being
amortized over 8 years, the estimated useful lives of the assets.

During the third quarter of 2014, the Company acquired a small distribution business that operates in the fluid power market as
a Parker distributor of pneumatic and hydraulic fluid power and motion control systems. The results of this operation are not
material to the results of the Distribution segment.

Proforma results of operations have not been presented because the combined effects of the 2014 acquisitions were not
material.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
For the Years Ended December 31, 2014, 2013 and 2012

3. ACQUISITIONS (CONTINUED)

2013 Acquisitions

On June 14, 2013, the Company acquired substantially all of the assets of Northwest Hose & Fittings, Inc. ("Northwest Hose").
Northwest Hose, formed in 1995, is an authorized Parker Hannifin distributor of hydraulic hose, fittings and adapters as well as
couplers and industrial hose to a diverse group of industries such as the metals, agricultural, industrial machinery and
equipment industries. Northwest Hose is headquartered in Spokane, Washington.

On July 31, 2013, the Company acquired substantially all of the assets of Ohio Gear & Transmission of Eastlake, Ohio.
Founded in 1973, Ohio Gear & Transmission is a distributor of mechanical power transmission equipment, bearings and electric
automation systems as well as a designer and fabricator of specialized gearing products serving a variety of industries including
food, packaging, material handling, and general machinery.

On August 15, 2013, the Company acquired Western Fluid Components, Inc. ("Western"). Western is headquartered in Everett,
Washington, and has other Washington facilities in Tacoma, Kirkland and Bellingham. Founded in 1975, Western is one of the
largest fluid connector distributors in Washington and a full-line distributor for Parker Hannifin’s Fluid Connector Group.

These acquisitions were accounted for as purchase transactions. The assets acquired and liabilities assumed for the 2013
acquisitions were recorded based on their fair value at the date of acquisition as follows (in thousands):

Cash .......................................................................................................................................................... $
Accounts receivable, net...........................................................................................................................
Inventories ................................................................................................................................................
Property, plant and equipment..................................................................................................................
Other tangible assets .................................................................................................................................
Goodwill ...................................................................................................................................................
Other intangible assets..............................................................................................................................
Liabilities ..................................................................................................................................................
Total of net assets acquired ....................................................................................................................
Less cash received ..................................................................................................................................
Net consideration.................................................................................................................................... $

143

3,122

3,423

446

797

9,493

4,788
(4,248)
17,964
(143)
17,821

The goodwill associated with Northwest Hose and Ohio Gear & Transmission is tax deductible. The goodwill for the three
acquisitions reflects expected synergies from combining the operations of the acquired businesses with the Company's
operations and intangible assets that do not qualify for separate recognition, such as an assembled workforce. There is $28.8
million and $11.1 million of revenue from these acquisitions included in the Consolidated Statement of Operations for the years
ended December 31, 2014 and 2013, respectively.

The fair value of the identifiable intangible assets of $4.8 million, consisting primarily of customer lists/relationships, non-
compete agreements and trade names, was determined using the income approach. Specifically, the discounted cash flows
method was utilized for the customer relationships and non-compete agreements and the relief-from-royalty method was
utilized for the trade names. The fair value of the customer relationships ($4.6 million) is being amortized on a straight-line
basis over periods ranging from 7 to 10 years; and the fair value of other intangible assets ($0.2 million) is being amortized over
periods ranging from 3 to 5 years, the estimated useful lives of the assets.

Proforma results of operations have not been presented because the effect of the acquisitions was not material.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
For the Years Ended December 31, 2014, 2013 and 2012

3. ACQUISITIONS (CONTINUED)

Contingency Payments - Aerospace

Included in acquisition costs are contingency payments to the former owners of the Aerospace Orlando facility acquired in
2003. These payments are based on the attainment of certain milestones, and over the term of the agreement could total $25.0
million. These contingency payments are recorded as additional goodwill and totaled $1.5 million, $3.5 million and $0.2
million during 2014, 2013 and 2012, respectively. Through December 31, 2014, the Company has recorded additional goodwill
of $18.0 million related to these contingency payments. Payment of the $1.5 million recorded in 2014 will occur in the first
quarter of 2015.

4. ACCOUNTS RECEIVABLE, NET

Accounts receivable consist of the following:

In thousands
Trade receivables.......................................................................................................................
U.S. Government contracts:

At December 31,

2014

2013

141,481

125,092

21,909
1,581

Commercial and other government contracts:

Billed..................................................................................................................................
Costs and accrued profit – not billed .................................................................................
Less allowance for doubtful accounts .......................................................................................
Total............................................................................................................................

51,166
21,719
(3,208)
234,648

14,364
6,340

63,051
853
(3,827)
205,873

The increase in commercial and other government contracts unbilled costs and accrued profit is primarily related to receivables
due under the SH-2G(I) New Zealand program.

Accounts receivable, net includes amounts for matters such as contract changes, negotiated settlements and claims for
unanticipated contract costs. These amounts are as follows:

In thousands
Contract changes, negotiated settlements and claims for unanticipated contract costs ......

Total

At December 31,

2014

2013

4,561

1,021

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
For the Years Ended December 31, 2014, 2013 and 2012

5. FAIR VALUE MEASUREMENTS

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the
principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the
measurement date.

The Company uses a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy
requires us to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs
used to measure fair value are as follows:

• Level 1 — Quoted prices in active markets for identical assets or liabilities.

• Level 2 — Observable inputs other than quoted prices included in Level 1, such as quoted prices for markets that are

not active or other inputs that are observable or can be corroborated by observable market data.

• Level 3 — Unobservable inputs that are supported by little or no market activity and are significant to the fair value of

the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar
techniques that use significant unobservable inputs.

The following table provides the carrying value and fair value of financial instruments that are not carried at fair value at
December 31, 2014 and 2013:

In thousands
Long-term debt:

2014

2013

Carrying Value

Fair Value

Carrying Value

Fair Value

Level 1 ...........................................
Level 2 ...........................................
Total..................................................

109,024
172,208
281,232

145,188
164,204
309,392

107,093
167,562
274,655

147,822
155,473
303,295

The above fair values were computed based on quoted market prices and discounted future cash flows, as applicable.
Differences from carrying amounts are attributable to interest rate changes subsequent to when the transaction occurred. The
fair values of Cash and cash equivalents, Accounts receivable, net, Notes payable, and Accounts payable - trade approximate
their carrying amounts due to the short-term maturities of these instruments.

Recurring Fair Value Measurements

The Company holds derivative instruments for foreign exchange contracts and interest rate swaps that are measured at fair
value using observable market inputs such as forward rates and our counterparties’ credit risks. Based on these inputs, the
derivative instruments are classified within Level 2 of the valuation hierarchy and have been included in other current assets
and other assets on the Consolidated Balance Sheet at December 31, 2014 and 2013. Based on the continued ability to trade and
enter into forward contracts and interest rate swaps, we consider the markets for our fair value instruments to be active. These
contracts are not material to the Company's Consolidated Financial Statements for the years ended December 31, 2014, 2013
and 2012.

The Company evaluated the credit risk associated with the counterparties to these derivative instruments and determined that as
of December 31, 2014, such credit risks have not had an adverse impact on the fair value of these instruments.

Nonrecurring Fair Value Measurements

Goodwill and indefinite-lived intangible assets are tested for possible impairment during the fourth quarter of each year. During
2013, management concluded that the carrying value of goodwill at its VT Composites reporting unit exceeded its fair value
and, accordingly, recorded an impairment charge totaling $2.1 million to write down the goodwill to its implied fair value.
After the $2.1 million charge there was $16.8 million of goodwill remaining at December 31, 2013, for this reporting unit. See
Note 9, Goodwill and Other Intangible Assets, Net, for further discussion.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
For the Years Ended December 31, 2014, 2013 and 2012

5. FAIR VALUE MEASUREMENTS (CONTINUED)

Nonrecurring Fair Value Measurements - continued

The nonrecurring fair value measurement for goodwill was developed using significant unobservable inputs (Level 3). For step-
one of the impairment analysis, the primary valuation technique used was an income methodology based on management’s
estimates of forecasted cash flows for each business unit, with those cash flows discounted to present value using rates
commensurate with the risks associated with those cash flows. In addition, management used a market-based valuation method
involving analysis of market multiples of revenues and earnings before interest, taxes, depreciation and amortization
(“EBITDA”) for a group of comparable public companies. Valuation methods used to determine the fair value of the reporting
unit’s assets and liabilities in order to perform a purchase price allocation included the income and market approach depending
on the nature of the asset/liability. Assumptions used by management were similar to those that would be used by market
participants performing valuations of the reporting unit.

6. DERIVATIVE FINANCIAL INSTRUMENTS

The Company is exposed to certain risks relating to its ongoing business operations, including market risks relating to
fluctuations in foreign currency exchange rates and interest rates. Derivative financial instruments are reported on the
consolidated balance sheets at fair value. Changes in the fair values of derivatives are recorded each period in earnings or
accumulated other comprehensive income, depending on whether a derivative is effective as part of a hedged transaction. Gains
and losses on derivative instruments reported in accumulated other comprehensive income are subsequently included in
earnings in the periods in which earnings are affected by the hedged item. The Company does not use derivative instruments for
speculative purposes.

The Company held forward exchange contracts designed to hedge forecasted transactions denominated in foreign currencies
and to minimize the impact of foreign currency fluctuations on the Company’s earnings and cash flows. Some of those
contracts were designated as cash flow hedges. The Company will include in earnings amounts currently included in
accumulated other comprehensive income upon recognition of cost of sales related to the underlying transaction.

The Company’s Term Loan Facility (“Term Loan”) contains floating rate obligations and is subject to interest rate
fluctuations. During 2013, the Company entered into interest rate swap agreements for the purposes of hedging the eight
quarterly variable-rate interest payments on its Term Loan due in 2014 and 2015. These interest rate swap agreements were
designated as cash flow hedges and intended to manage interest rate risk associated with the Company’s variable-rate
borrowings and minimize the impact on the Company's earnings and cash flows of interest rate fluctuations attributable to
changes in LIBOR rates. These agreements are not material to the Company's Consolidated Financial Statements for the years
ended December 31, 2014, 2013 and 2012.

During the second quarter of 2014, the Company entered into forward exchange contracts designed to hedge forecasted
transactions denominated in foreign currencies and to minimize the impact of foreign currency fluctuations on the Company's
earnings and cash flows. These contracts were entered into as a result of forecasted foreign currency transactions associated
with the New Zealand contract to deliver ten SH-2G(I) aircraft and were designated as cash flow hedges. During the third
quarter of 2014, the Company dedesignated these forward contracts, due to a change in the timing of payments. These contracts
are not material to the Company's Consolidated Financial Statements for the years ended December 31, 2014, 2013 and 2012.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
For the Years Ended December 31, 2014, 2013 and 2012

7. INVENTORIES

Inventories consist of the following:

In thousands
Merchandise for resale ..............................................................................................................
Raw materials............................................................................................................................
Contracts in process: .................................................................................................................

U.S. Government, net of progress payments of $8,590 and $10,492 in 2014 and 2013,
respectively .............................................................................................................................
Commercial and other government contracts .........................................................................
Other work in process (including certain general stock materials) ........................................
Finished goods ..........................................................................................................................
Total............................................................................................................................

At December 31,

2014

2013

149,837

152,194

19,954

20,609

106,036

51,348

21,618

10,948

105,737

71,044

28,439

12,472

359,741

390,495

The decrease in commercial and other government contracts in 2014 is primarily attributable to the sale of SH-2G(I) inventory.

General and administrative costs incurred by the Aerospace segment operations that charged such costs to inventory during
2014 and 2013 were $39.2 million and $37.4 million, respectively. The estimated amounts of general and administrative costs
remaining in contracts in process at December 31, 2014 and 2013, are $10.2 million and $5.4 million, respectively. These
estimates are based on the ratio of such costs to total costs of production.

The Company had inventory of $7.4 million and $8.0 million as of December 31, 2014 and 2013, respectively, on consignment
at customer locations, the majority of which is located with Distribution segment customers.

Inventories include amounts associated with matters such as contract changes, negotiated settlements and claims for
unanticipated contract costs, which totaled $13.3 million and $11.6 million at December 31, 2014 and 2013, respectively.

K-MAX® inventory of $17.2 million and $17.0 million as of December 31, 2014 and 2013, respectively, is included in
contracts and other work in process inventory and finished goods. Management believes that a significant portion of this K-
MAX® inventory will be sold after December 31, 2015, based upon the anticipation of supporting the fleet for the foreseeable
future.

At December 31, 2014 and 2013, $23.5 million and $43.8 million, respectively, of SH-2G(I), formerly SH-2G(A), inventory
was included on the Company's balance sheet in contracts and other work in process inventory. On May 8, 2013, the Company
announced that it had entered into a $120.6 million contract with the New Zealand MoD for the sale of ten SH-2G(I) Super
Seasprite aircraft, spare parts, a full mission flight simulator, and related logistics support. Although a substantial portion of the
SH-2G(I) inventory will be used in the performance of this new contract, management believes that $4.1 million of the SH-2G
(I) inventory will be sold after December 31, 2015, based upon the time needed to prepare the aircraft for sale and the
requirements of our customer.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
For the Years Ended December 31, 2014, 2013 and 2012

8. PROPERTY, PLANT AND EQUIPMENT, NET

Property, plant and equipment, net is summarized as follows:

In thousands
Land......................................................................................................................................
Buildings ..............................................................................................................................
Leasehold improvements......................................................................................................
Machinery, office furniture and equipment..........................................................................
Construction in process ........................................................................................................
Total...............................................................................................................................
Less accumulated depreciation.............................................................................................
Property, plant and equipment, net.......................................................................................

At December 31,

2014

2013

12,873
79,477
17,341
216,527
5,436
331,654
(183,829)
147,825

12,357
70,992
16,480
182,897
33,064
315,790
(167,282)
148,508

Depreciation expense was $23.8 million, $20.8 million and $18.8 million for 2014, 2013 and 2012, respectively. Included in
machinery, office furniture and equipment and construction in process is $1.5 million of assets purchased under the Company's
master leasing agreement with PNC and accounted for as capital leases. These leases have not yet commenced as of December
31, 2014. See Note 16, Commitments and Contingencies, for a discussion on the master leasing agreement.

9. GOODWILL AND OTHER INTANGIBLE ASSETS, NET

Goodwill

The following table sets forth the change in the carrying amount of goodwill for each reportable segment and for the Company:

2014

2013

Distribution Aerospace

Total

Distribution

Aerospace

Total

In thousands

Gross balance at beginning of
period...........................................
Accumulated impairment ..........
Net balance at beginning of
period ........................................
Additions .....................................
Change in goodwill due to the
disposal of Delamac ....................
Impairments.................................
Foreign currency translation........
Net balance at end of period........

Accumulated impairment at end
of period.......................................

105,637

96,155

114,538
(16,252)

220,175
(16,252)

—

105,637

38,033

(2,014)

—

(44)

141,612

98,286

1,532

—

—
(2,849)
96,969

203,923

39,565

(2,014)
—
(2,893)
238,581

110,072
(14,181)

206,227
(14,181)

95,891

3,527

—
(2,071)
939

192,046

13,020

—
(2,071)
928

98,286

203,923

—

96,155

9,493

—

—
(11)
105,637

— $

(16,252) $

— $

(16,252) $

(16,252)

The increase in the goodwill balance at the Company's Distribution segment is primarily due to the acquisition of B.W. Rogers.
See Note 3, Acquisitions, for further discussion of this acquisition. The addition to goodwill in the Company's Aerospace
segment relates to an earnout payment associated with a previous acquisition.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
For the Years Ended December 31, 2014, 2013 and 2012

9. GOODWILL AND OTHER INTANGIBLE ASSETS, NET (CONTINUED)

2014 Analysis

During 2014, the Company performed a reevaluation of its reporting units for the purpose of its annual goodwill assessment.
The Company reorganized its metallic and composite aerostructures businesses, as well as its engineering design and air,
vehicle and maintenance, repair and overhaul businesses, into a new entity called Kaman Aerosystems. The Company has
designated this entity as a reporting unit for purposes of its annual assessment of goodwill for impairment. Since this is the first
year the Company assessed goodwill at this reporting unit level, the two-step impairment test was performed.

Upon completion of the qualitative assessment of events and circumstances affecting recorded goodwill as described in Note 1,
Summary of Significant Accounting Policies, the Company concluded that other than Aerosystems, no reporting units should be
subject to the two-step goodwill impairment test required by ASC 350 at the end of 2014. The qualitative assessment that
management performed took into consideration the following factors: general economic conditions, industry specific
performance, changes in carrying values of the reporting units, the assessment of assumptions used in the previous fair value
calculation and changes in transaction multiples.

The results of the Aerosystems Step 1 test indicated that the Company did not need to proceed to Step 2, as the percentage by
which the fair value exceeds the carrying value is 16%. The Company performed a sensitivity analysis relative to the discount
rate and growth rate selected and determined a decrease of 1% in the terminal growth rate or an increase of 1% in the discount
rate would not result in a fair value calculation less than the carrying value for Aerosystems.

2013 Analysis

During 2013, the Company's legacy VT Composites reporting unit experienced delays on certain programs that were driven by
changes in customers' requirements during 2012. The Company anticipated these changes in requirements would shift revenues
and related cash flows into 2013 and future periods. The anticipated deferred revenues did not materialize to the levels the
Company had projected in 2013, and therefore the results of Step 1 of the impairment analysis resulted in a fair value for the
reporting unit below its carrying value. Prior to proceeding to Step 2 of the impairment analysis, management assessed the
tangible and intangible assets subject to amortization to determine if they were impaired. Based on this analysis management
concluded these assets were not impaired. Upon completion of the Step 2 impairment analysis, the Company recorded a non-
cash non-tax deductible goodwill impairment charge of $2.1 million, or 11% of the reporting unit's total goodwill balance, to
reduce the carrying value of goodwill to its implied fair value. This charge has been included in the 2013 operating results of
the Company's Aerospace segment.

Other Intangible Assets

Other intangible assets consisted of:

At December 31,
2014

At December 31,
2013

Amortization
Period

Gross
Amount

Accumulated
Amortization

Gross
Amount

Accumulated
Amortization

In thousands
Customer lists / relationships ............
Trademarks / trade names .................
Non-compete agreements and other..
Patents ...............................................
Total...................................................

6-21 years

123,005

3-8 years

1-9 years

17 years

3,546

6,719

523

133,793

(31,868) $
(2,080)
(4,948)
(406)
(39,302) $

109,790

2,695

6,133

523

119,141

(23,647)
(1,594)
(4,055)
(396)
(29,692)

The increase in the other intangible assets balance at December 31, 2014, as compared to December 31, 2013, is primarily due
to the acquisition of B.W. Rogers. See Note 3, Acquisitions, for further discussion of this acquisition. Intangible asset
amortization expense was $10.6 million, $9.2 million and $7.4 million in 2014, 2013 and 2012, respectively.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
For the Years Ended December 31, 2014, 2013 and 2012

9. GOODWILL AND OTHER INTANGIBLE ASSETS, NET (CONTINUED)

Other Intangible Assets - continued

Estimated amortization expense for the next five years associated with intangible assets existing as of December 31, 2014, is as
follows:

In thousands
2015.......................................................................................................................................................... $
2016.......................................................................................................................................................... $
2017.......................................................................................................................................................... $
2018.......................................................................................................................................................... $
2019.......................................................................................................................................................... $

12,164

11,650

11,728

10,609

In order to determine the useful life of our customer lists/relationships acquired, the Company considered numerous factors,
most importantly the industry considerations associated with the acquired entities. The Company determined the amortization
period for the customer lists/relationships intangible assets for its Distribution acquisitions in 2014 and 2013 based primarily on
an analysis of their historical customer sales attrition information.

10. ENVIRONMENTAL COSTS

The following table displays the activity and balances associated with accruals related to environmental costs included in other
accruals and payables and other long-term liabilities:

In thousands
Balance at January 1 .................................................................................................................
Additions to accrual ...........................................................................................................
Payments ............................................................................................................................
Other ..................................................................................................................................
Changes in foreign currency exchange rates .....................................................................
Balance at December 31 ...........................................................................................................

11,531

1,865
(2,465)
(307)
(26)
10,598

12,818

698
(1,984)
—
(1)
11,531

2014

2013

Bloomfield

In August 2008, the Company completed its purchase of the portion of the Bloomfield campus that Kaman Aerospace
Corporation had leased from NAVAIR for many years. In connection with the purchase, the Company has assumed
responsibility for environmental remediation at the facility as may be required under the Connecticut Transfer Act (the
“Transfer Act”) and it continues the effort to define the scope of the remediation that will be required by the Connecticut
Department of Environmental Protection (“CTDEP”). The transaction was recorded by taking the undiscounted estimated
remediation liability of $20.8 million and discounting it at a rate of 8% to its present value. The fair value of the Navy Property
asset, which at that time approximated the discounted present value of the assumed environmental liability of $10.3 million, is
included in Property, plant and equipment, net. This remediation process will take many years to complete.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
For the Years Ended December 31, 2014, 2013 and 2012

10. ENVIRONMENTAL COSTS (CONTINUED)

The following represents estimated future payments for the undiscounted environmental remediation liability related to the
Bloomfield campus as of December 31, 2014:

In thousands
2015........................................................................................................................................................................ $
2016........................................................................................................................................................................
2017........................................................................................................................................................................
2018........................................................................................................................................................................
2019........................................................................................................................................................................
Thereafter ...............................................................................................................................................................

Total ..................................................................................................................................................................... $

1,839

902

1,003

403

451

5,359

9,957

Other

During 2014, the Company sold its former manufacturing facility in Moosup, Connecticut to TD Development, LLC. In
connection with the sale, the Company will contribute $4.0 million in cash to an escrow account over a four-year period to fund
environmental remediation work that is expected to be performed on the site. The Company currently has $3.2 million accrued
representing the unpaid portion of this contribution payable to TD Development.

The Company's environmental accrual also includes estimated environmental remediation costs that the Company expects to
incur at the former Music segment’s New Hartford, CT facility and the Aerospace segment’s U.K. Composites facilities. The
Company continues to assess the work that may be required at each of these facilities, which may result in a change to this
accrual.

For further discussion of these matters, see Note 16, Commitments and Contingencies.

11. DEBT

Long-Term Debt

The Company has long-term debt as follows:

At December 31,

2014

2013

In thousands
Revolving credit agreement ......................................................................................................
Term loan ..................................................................................................................................
Convertible notes ......................................................................................................................
Total ...................................................................................................................................
Less current portion ..................................................................................................................
Total excluding current portion..........................................................................................

92,208

80,000

109,024

281,232

10,000

77,562

90,000

107,093

274,655

10,000

271,232

264,655

The weighted average interest rate on long-term borrowings outstanding as of December 31, 2014 and 2013, was 2.31%.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
For the Years Ended December 31, 2014, 2013 and 2012

11. DEBT (CONTINUED)

Long-Term Debt - continued

The aggregate annual maturities of long-term debt for each of the next five years are approximately as follows:

In thousands
2015........................................................................................................................................................................ $
2016........................................................................................................................................................................
2017........................................................................................................................................................................
2018........................................................................................................................................................................
2019........................................................................................................................................................................

10,000
10,000
267,208
—
—

In the above table, the total principal of the Convertible Note of $115.0 million is included in the amount due in 2017. The
carrying value of the Convertible Notes at December 31, 2014, is $109.0 million.

Revolving Credit and Term Loan Agreements

On November 20, 2012, the Company entered into a Credit Agreement (the "Credit Agreement") with JPMorgan Chase Bank,
N.A., as Administrative Agent, Bank of America, N.A. and RBS Citizens, N.A. as Co-Syndication Agents, J.P. Morgan
Securities LLC (“J.P. Morgan Securities”), Merrill Lynch, Pierce, Fenner & Smith Incorporated (“MLPF&S”) and RBS
Citizens, N.A. as Joint Bookrunners and Joint Lead Arrangers, and the other lenders named therein (collectively, the
“Lenders”). The Credit Agreement, which expires on July 31, 2017, replaced the Company's then existing $275.0 million
Amended and Restated Revolving Credit Agreement (the "Revolving Credit Agreement") and $42.5 million Second Amended
and Restated Term Loan Credit Agreement (the Term Loan Agreement).

The Credit Agreement, provides a $400.0 million revolving credit facility under which we may issue letters of credit for our
benefit and a $100.0 million term loan facility. The term loan commitment requires quarterly payments of principal (which
commenced on March 31, 2013) at the rate of $2.5 million per quarter with $55.0 million payable in the final quarter of the
facility's term. The Company may increase the aggregate amount of each of the revolving credit facility and the term loan
facility by up to $100.0 million in accordance with the terms of the Credit Agreement.

The revolving credit facility permits the Company to pay cash dividends. The Lenders have been granted a security interest in
substantially all of the Company’s and its domestic subsidiaries’ personal property and other assets (including intellectual
property but excluding real estate), including a pledge of 66% of the Company’s equity interest in certain foreign subsidiaries
and 100% of the Company’s equity interest in its domestic subsidiaries, as collateral for the Company’s obligations under the
Credit Agreement. At December 31, 2014, there was $92.2 million outstanding under the Credit Agreement, excluding letters of
credit, with $248.6 million available for borrowing. Letters of credit are considered borrowings for purposes of the Credit
Agreement. A total of $59.2 million in letters of credit was outstanding under the Credit Agreement at December 31, 2014,
$54.5 million of which related to the New Zealand SH-2G(I) sales contract. At December 31, 2013, there was $77.6 million
outstanding under the Revolving Credit Agreement, excluding letters of credit, with $285.6 million available for borrowing. A
total of $36.8 million in letters of credit was outstanding under the Revolving Credit Agreement at December 31, 2013, $30.3
million of which related to the New Zealand SH-2G(I) sales contract.

Interest rates on amounts outstanding under the Credit Agreement are variable, and are determined based on the Consolidated
Senior Secured Leverage Ratio, as defined in the Credit Agreement. At December 31, 2014, the interest rate for the outstanding
amounts on both the revolving credit facility and term loan commitment was 1.70%. At December 31, 2013, the interest rate for
the outstanding amounts on both the former Revolving Credit Agreement and former Term Loan Agreement was 1.72%. In
addition, the Company is required to pay a quarterly commitment fee on the unused revolving loan commitment amount at a
rate ranging from 0.200% to 0.325% per annum, based on the Consolidated Senior Secured Leverage Ratio. Fees for
outstanding letters of credit range from 1.250% to 2.125%, based on the Consolidated Senior Secured Leverage Ratio.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
For the Years Ended December 31, 2014, 2013 and 2012

11. DEBT (CONTINUED)

Revolving Credit and Term Loan Agreements - continued

The financial covenants associated with the Credit Agreement include a requirement that (i) the ratio of Consolidated Senior
Secured Indebtedness to Consolidated EBITDA, as defined in the Credit Agreement, cannot be greater than 3.50 to 1.00,
(ii) the ratio of Consolidated Total Indebtedness to Consolidated EBITDA, as defined in the Credit Agreement, cannot be
greater than 4.00 to 1.00, and iii) the ratio of Consolidated EBITDA to the sum of (a) all interest, premium payments, debt
discounts, fees, charges and related expenses and (b) the portion of rent expense under capital leases that is treated as interest
expense, as defined in the Credit Agreement, cannot be less than 4.00 to 1.00. The Company was in compliance with those
financial covenants as of and for the quarter ended December 31, 2014, and management does not anticipate noncompliance in
the foreseeable future.

Convertible Notes

In November 2010, the Company issued convertible unsecured notes due on November 15, 2017, in the aggregate principal
amount of $115.0 million in a private placement offering (the "Convertible Notes"). These notes bear 3.25% interest per annum
on the principal amount, payable semiannually in arrears on May 15 and November 15 of each year, beginning on May 15,
2011. Proceeds from the offering were $111.0 million, net of fees and expenses which were capitalized. The proceeds were
used to repay $62.2 million of borrowings outstanding on the Company’s former Revolving Credit Agreement, make a $25.0
million voluntary contribution to the Qualified Pension Plan and pay $13.2 million for the purchase of call options related to
the convertible note offering. See below for further discussion of the call options.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
For the Years Ended December 31, 2014, 2013 and 2012

11. DEBT (CONTINUED)

Convertible Notes - continued

The following table illustrates the conversion rate at each date:

December 31, 2014

December 31, 2013

29.6876

33.68

43.79

29.6292

33.75

43.88

3,414,074

3,407,357
(1) Represents the number of shares of Common Stock hypothetically issuable per $1,000 principal amount of Notes,
subject to adjustments per the Convertible Note Indenture dated November 19, 2010. At the date the Company issued
the Convertible Notes, the conversion rate initially equaled 29.4499 shares of common stock per $1,000 principal
amount of notes (which is equivalent to an initial conversion price of approximately $33.96 per share of common
stock). The conversion rate is subject to adjustment upon the occurrence of certain specified events, such as an
increase in the dividend paid to shareholders.
(2) Represents $1,000 divided by the conversion rate as of such date. The conversion price reflects the strike price of
the embedded option within the Convertible Note. Were the Company's share price to exceed the conversion price at
conversion the noteholders would be entitled to receive additional consideration either in cash, shares or a
combination, the form of which is at the sole discretion of the Company.
(3) Prior to May 15, 2017, the notes are convertible only in the following circumstances: (1) during any fiscal quarter
commencing after April 1, 2011, and only during any such fiscal quarter, if the last reported sale price of our common
stock was greater than or equal to 130% of the applicable conversion price for at least 20 trading days (whether or not
consecutive) during the 30 consecutive trading days ending on the last trading day of the previous fiscal quarter, (2)
upon the occurrence of specified corporate transactions, or (3) during the five consecutive business-day period
following any five consecutive trading-day period in which, for each day of that period, the trading price for the notes
was less than 98% of the product of the last reported sale price of our common stock and the applicable conversion
rate on such trading day. On and after May 15, 2017, until the close of business on the second scheduled trading day
immediately preceding the maturity date, holders may convert their notes at any time, regardless of the foregoing
circumstances. Upon a change in control or termination of trading, holders of the notes may require us to repurchase
all or a portion of their notes for cash at a repurchase price equal to 100% of the principal amount, plus any accrued
and unpaid interest.
(4) This represents the number of shares hypothetically issuable upon conversion of the principal balance of the Convertible
Notes at each date; however, as the terms of the Convertible Notes require net share settlement, the aggregate principal
amount of the notes will be paid in cash. Amounts due in excess of the principal, if any, may be settled in cash, shares of
the Company's common stock or a combination of cash and shares of common stock, at the Company's election.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
For the Years Ended December 31, 2014, 2013 and 2012

11. DEBT (CONTINUED)

Convertible Notes - continued

The following table illustrates the warrant price at each date:

Warrants
Warrant Price..................................................................................................

44.05

44.14

December 31, 2014

December 31, 2013

ASC 815 provides that contracts are initially classified as equity if (1) the contract requires physical settlement or net-share
settlement, or (2) the contract gives the company a choice of net-cash settlement or settlement in its own shares (physical
settlement or net-share settlement). The settlement terms of our purchased call options and sold warrant contracts require net-
share settlement. Based on the guidance in ASC 815, the purchased call option contracts were recorded as a reduction of equity
and the warrants were recorded as an addition to equity as of the trade date. ASC 815 states that a reporting entity shall not
consider contracts to be derivative instruments if the contract issued or held by the reporting entity is both indexed to its own
stock and classified in shareholders' equity in its Consolidated Balance Sheet. The Company concluded the purchased call
option contracts and the warrant contracts should be accounted for in shareholders' equity and are therefore not to be considered
derivative instruments.

ASC 470-20 Debt with Conversion and Other Options (“ASC 470-20”), clarifies the accounting for convertible debt
instruments that may be settled in cash upon conversion, including partial cash settlement. ASC 470-20 specifies that an issuer
of such instruments should separately account for the liability and equity components of the instruments in a manner that
reflects the issuer's non-convertible debt borrowing rate which interest costs are to be recognized in subsequent periods. The
note payable principal balance at the date of issuance of $115.0 million was bifurcated into the debt component of $101.7
million and the equity component of $13.3 million. The difference between the note payable principal balance and the value of
the debt component is being accreted to interest expense over the term of the notes. The debt component was recognized at the
present value of associated cash flows discounted using a 5.25% discount rate, the borrowing rate at the date of issuance for a
similar debt instrument without a conversion feature. The Company incurred $3.6 million of debt issuance costs in connection
with the sale of the Convertible Notes, of which $0.5 million was recorded as an offset to additional paid-in capital. The
balance, $3.1 million, is being amortized over the term of the notes. Total amortization expense for each of the years ended
December 31, 2014, 2013, and 2012 was $0.5 million.

The carrying amount of the equity component and the principal amount of the liability component, the unamortized discount, and
the net carrying amount of the liability are as follows:

In thousands
Principal amount of liability ........................................................................ $
Unamortized discount ..................................................................................

Carrying value of liability..................................................................... $

Equity component ........................................................................................ $

115,000

5,976

109,024

13,329

115,000

7,907

107,093

13,329

December 31, 2014

December 31, 2013

As of December 31, 2014, the "if converted value" exceeds the principal amount of the Convertible Notes by $21.7 million
since the closing price of the Company's Common Stock was $40.09 compared to the conversion price of $33.68 for the
Convertible Notes.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
For the Years Ended December 31, 2014, 2013 and 2012

11. DEBT (CONTINUED)

Convertible Notes - continued

Interest expense associated with the Convertible Notes consisted of the following:

In thousands
Contractual coupon rate of interest ................................................... $
Accretion of convertible notes discount............................................

Interest expense - convertible notes........................................... $

3,738

1,931

5,669

3,738

1,833

5,571

3,738

1,738

5,476

For the year ended December 31,

2014

2013

2012

Short-Term Borrowings

The Company also has certain other credit arrangements to borrow funds on a short-term basis with interest at current market
rates. There were no material short-term borrowings outstanding under such other credit arrangements as of December 31,
2014. As of December 31, 2013, there were $0.6 million of short-term borrowings outstanding under such other credit
arrangements. The weighted average interest rate on short-term borrowings for 2014 and 2013 was 2.5%.

Debt Issuance Costs

In 2012, the Company incurred $2.4 million in debt issuance costs in connection with the Credit Agreement. These costs have
been capitalized and will be amortized over the term of the agreement. Total amortization expense for the years ended
December 31, 2014 and 2013, was $1.1 million. Total amortization expense for the year ended December 31, 2012, was $1.3
million, including the $0.2 million write-off of capitalized fees related to the former Revolving Credit Agreement and former
Term Loan Agreement.

Interest Payments

Cash payments for interest were $11.9 million, $11.3 million and $10.2 million in 2014, 2013 and 2012, respectively.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
For the Years Ended December 31, 2014, 2013 and 2012

12. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The components of accumulated other comprehensive income (loss) are shown below:

In thousands

Foreign currency translation:
Beginning balance.................................................................................................................
Net gain/(loss) on foreign currency translation ..................................................................
Reclassification to net income ............................................................................................
Other comprehensive income/(loss), net of tax................................................................
Ending balance ......................................................................................................................

Pension and other post-retirement benefits (a):
Beginning balance.................................................................................................................
Reclassification to net income ............................................................................................
Amortization of prior service cost, net of tax expense of $37 and $38, respectively ......
Amortization of net loss, net of tax expense of $1,583 and $3,677, respectively............
Change in net gain, net of tax benefit (expense) of $25,203 and ($20,218),
respectively.......................................................................................................................
Other comprehensive income/(loss), net of tax................................................................
Ending balance ......................................................................................................................

Derivative instruments (b):
Beginning balance.................................................................................................................
Net loss on derivative instruments, net of tax benefit of $162 and $104, respectively ......
Reclassification to net income, net of tax expense of $323 and $66, respectively.............
Other comprehensive income/(loss), net of tax................................................................
Ending balance ......................................................................................................................

2014

2013

(14,219) $
(3,833)
(2,624)
(6,457)
(20,676) $

(16,515)
2,296

—

2,296
(14,219)

(66,317) $

(104,551)

2,614

(41,622)
(38,947)
(105,264) $

(585) $
(268)
532

264
(321) $

5,875

32,299

38,234
(66,317)

(524)
(172)
111
(61)
(585)

Total accumulated other comprehensive income (loss) ........................................................
(a) These accumulated other comprehensive income components are included in the computation of net periodic pension cost
(see Note 14, Pension Plans for additional information)
(b) See Note 6, Derivative Financial Instruments, for additional information regarding our derivative instruments.

(126,261) $

(81,121)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
For the Years Ended December 31, 2014, 2013 and 2012

13. INCOME TAXES

The components of income tax expense (benefit) associated with continuing operations are as follows:

For the year ended December 31,
2012
2013
2014

In thousands
Current:

Federal...............................................................................................................
State...................................................................................................................
Foreign ..............................................................................................................

Deferred:

Total..........................................................................................................................

26,296
(796)
905
26,405

5,256
(380)
(559)
4,317
30,722

21,916
3,731
1,768
27,415

5,688
(270)
(1,245)
4,173
31,588

25,110
1,627
1,123
27,860

(455)
915
(1,572)
(1,112)
26,748

The tax effects of temporary differences that give rise to deferred tax assets and liabilities are presented below:

In thousands
Deferred tax assets:

Deferred employee benefits ......................................................................................................
Inventories.................................................................................................................................
Tax loss and credit carryforwards .............................................................................................
Long-term contracts ..................................................................................................................
Accrued liabilities and other items............................................................................................
Total deferred tax assets.....................................................................................................

Deferred tax liabilities:

Property, plant and equipment...................................................................................................
Intangibles .................................................................................................................................
Other items ................................................................................................................................
Total deferred tax liabilities ...............................................................................................
Net deferred tax assets before valuation allowance ..................................................................
Valuation allowance..................................................................................................................
Net deferred tax assets after valuation allowance .....................................................................

At December 31,
2013
2014

75,026
10,332
9,895
3,477
11,627
110,357

(15,666)
(29,693)
(3,096)
(48,455)
61,902
(4,694)
57,208

53,108
13,797
7,540
6,345
11,295
92,085

(17,741)
(28,798)
(4,382)
(50,921)
41,164
(4,657)
36,507

There was no material net change in the valuation allowance from December 31, 2013, to December 31, 2014, with the balance
being $4.7 million at each date. Valuation allowances reduced the deferred tax asset attributable to state loss and credit
carryforwards to an amount that, based upon all available information, is more likely than not to be realized. Reversal of the
valuation allowance is contingent upon the recognition of future taxable income in the respective jurisdictions or changes in
circumstances which cause the realization of the benefits of the carryforwards to become more likely than not.

A portion of the net deferred tax assets, $2.7 million, is related to a capital loss recorded on the disposition of the Company's
Distribution segment’s Mexico operations. The realization of these benefits is dependent in part on future taxable capital gains
and tax planning strategies designed to realize the benefit associated with the capital loss. All remaining U.S. foreign tax credit
carryforwards have been fully utilized as of December 31, 2014. State carryforwards are in numerous jurisdictions with varying
lives.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
For the Years Ended December 31, 2014, 2013 and 2012

13. INCOME TAXES (CONTINUED)

No valuation allowance has been recorded against the other deferred tax assets because the Company believes that these
deferred tax assets will, more likely than not, be realized. This determination is based largely upon the Company's earnings
history and its anticipated future taxable income. In addition, the Company has the ability to offset deferred tax assets against
deferred tax liabilities created for such items as depreciation and amortization.

Pre-tax income (loss) from foreign operations amounted to $(2.3) million, $(3.0) million and $1.4 million in 2014, 2013 and
2012, respectively. U.S. income taxes have not been provided on $26.6 million of undistributed earnings of foreign subsidiaries
since it is the Company’s intention to permanently reinvest such earnings or to distribute them only when it is tax efficient to do
so. It is impracticable to estimate the total tax liability, if any, that would be created by the future distribution of these earnings.

The provision for income taxes associated with continuing operations differs from that computed at the federal statutory
corporate tax rate as follows:

For the year ended December 31,
2012
2013
2014

In thousands
Federal tax at 35% statutory rate..............................................................................
State income taxes, net of federal benefit ................................................................
Tax effect of:

Section 199 Manufacturing deduction ..............................................................
Other, net...........................................................................................................
Income tax expense ..................................................................................................

33,776
(765)

31,729
2,250

(2,000)
(289)
30,722

(2,200)
(191)
31,588

27,893
1,652

(1,400)
(1,397)
26,748

The Company records a benefit for uncertain tax positions in the financial statements only when it determines it is more likely
than not that such a position will be sustained upon examination by taxing authorities. Unrecognized tax benefits represent the
difference between the position taken and the benefit reflected in the financial statements. On December 31, 2014, 2013 and
2012 the total liability for unrecognized tax benefits was $2.4 million, $2.3 million and $3.9 million, respectively (including
interest and penalties of $0.3 million in 2014 and $0.6 million in 2013 and 2012). The change in the liability for 2014, 2013
and 2012 is explained as follows:

In thousands
Balance at January 1.................................................................................................
Additions based on current year tax positions ..................................................
Changes for tax positions of prior years ...........................................................
Settlements ........................................................................................................
Additions due to acquired business...................................................................
Reductions due to lapses in statutes of limitation .............................................
Balance at December 31...........................................................................................

2014

2013

2012

2,302
512
33
(165)
—
(241)
2,441

3,886
364
(907)
(264)
414
(1,191)
2,302

4,388
258
113
(82)
—
(791)
3,886

Included in unrecognized tax benefits at December 31, 2014, were items approximating $1.7 million that, if recognized, would
favorably affect the Company’s effective tax rate in future periods. The Company files tax returns in numerous U.S. and foreign
jurisdictions, with returns subject to examination for varying periods, but generally back to and including 2009. During 2014,
2013 and 2012, $0.1 million or less of interest and penalties was recognized each year as a component of income tax expense.
It is the Company’s policy to record interest and penalties on unrecognized tax benefits as income taxes.

Cash payments for income taxes, net of refunds, were $22.8 million, $33.1 million, and $26.9 million in 2014, 2013 and 2012,
respectively.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
For the Years Ended December 31, 2014, 2013 and 2012

14. PENSION PLANS

The Company has a non-contributory qualified defined benefit pension plan (the “Qualified Pension Plan”). On February 23,
2010, the Company’s Board of Directors approved an amendment to the Qualified Pension Plan that, among other things,
closed the Qualified Pension Plan to all new hires on or after March 1, 2010, and changed the benefit calculation for existing
employees related to pay and years of service. Specifically, changes in pay were taken into account for benefit calculation
purposes until the end of calendar year 2010, the benefit formula was improved to use the highest five years out of the last ten
years of service up to December 31, 2010, whether consecutive or not, and years of service will continue to be added for
purposes of the benefit calculations through December 31, 2015, with no further accrual of benefits for service thereafter except
for vesting purposes.

The Company also has a Supplemental Employees’ Retirement Plan (“SERP”), which is considered a non-qualified pension
plan. The SERP provides certain key executives, whose compensation is in excess of the limitations imposed by federal law on
the qualified defined benefit pension plan, with supplemental benefits based upon eligible earnings, years of service and age at
retirement. During 2010, the Company's Board of Directors also approved an amendment to the SERP that made changes
consistent with the pension plan amendment except that the SERP already provided for the use of non-consecutive years of
service for benefit calculation purposes and there was no provision needed regarding limitations on future participation because
executives already had to be approved for SERP participation by the Board's Personnel & Compensation Committee (the
"Committee") and the Board of Directors. The Committee and the Board have not approved any new participants to the SERP
since February 28, 2010, and do not intend to do so at any time in the future. The measurement date for both these plans is
December 31.

Obligations and Funded Status

The changes in the actuarial present value of the projected benefit obligation and fair value of plan assets are as follows:

For the year ended December 31,

Qualified Pension Plan

SERP

2014

2013

2014

2013

641,235

706,356

9,910

12,326

11,759

28,835

84,848
(28,398)
—

738,279

555,400

59,731

14,347

25,596
(78,609)
(26,455)
—

641,235

557,653

14,202

256

342

660
(819)
—

10,349

— $

—

340

311
(458)
(2,291)
(318)
9,910

—

In thousands
Projected benefit obligation at beginning of year ............................
Service cost ......................................................................................
Interest cost ......................................................................................
Actuarial liability (gain) loss (a) ........................................................
Benefit payments..............................................................................
(Curtailment) / Settlement................................................................
Projected benefit obligation at end of year ....................................
Fair value of plan assets at beginning of year ..................................
Actual return on plan assets .............................................................
Employer contributions ....................................................................
Benefit payments..............................................................................
Fair value of plan assets at end of year ..........................................
Funded status at end of year...........................................................
Accumulated benefit obligation .......................................................

2,291
(2,291)
—
(9,910)
9,910
(a) The actuarial liability (gain)/loss amount for the qualified pension plan for 2014 and 2013 is principally due to the effect

10,000
(28,398)
$
596,733
$
$ (141,546) $
$
738,279
$

10,000
(26,455)
$
555,400
(85,835) $
$
641,235

— $
(10,349) $
$
10,349

819
(819)

of changes in the discount rate. Additionally, in 2014 a new set of mortality tables was issued by the Society of Actuaries
("SOA"), which impacted the valuation of the Company's obligations under the qualified pension plan and SERP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
For the Years Ended December 31, 2014, 2013 and 2012

14. PENSION PLANS (CONTINUED)

Obligations and Funded Status - continued

The Company has recorded liabilities related to our qualified pension plan and SERP as follows:

At December 31,

Qualified Pension Plan

SERP

2014

2013

2014

2013

In thousands
Current liabilities (a) ..........................................................................
Noncurrent liabilities........................................................................
Total..................................................................................................

— $

(531) $

(141,546)
$ (141,546) $

(85,835)
(85,835) $

(9,818)
(10,349) $

(819)
(9,091)
(9,910)

(a) The current liabilities are included in other accruals and payables on the Consolidated Balance Sheets.

Certain amounts included in accumulated other comprehensive income on the Consolidated Balance Sheets represent costs that
will be recognized as components of pension cost in future periods. These consist of:

At December 31,

Qualified Pension Plan

SERP

2014

2013

2014

2013

In thousands
Unrecognized (gain) or loss .............................................................
Unrecognized prior service cost .......................................................
Amount included in accumulated other comprehensive income .....

167,329

167,386

105,269

156

105,425

1,609

—

1,609

1,040

—

1,040

The amount of unrecognized loss and prior service cost for the qualified pension plan and the SERP, respectively, that will be
amortized from accumulated other comprehensive income into net periodic benefit cost over the next year is estimated to be
$9.6 million and $0.2 million.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
For the Years Ended December 31, 2014, 2013 and 2012

14. PENSION PLANS (CONTINUED)

Obligations and Funded Status - continued

The pension plan net periodic benefit costs on the Consolidated Statements of Operations and other amounts recognized in
other comprehensive income (loss) on the Consolidated Statements of Comprehensive Income and Consolidated Statements of
Shareholders’ Equity were computed using the projected unit credit actuarial cost method and included the following
components:

For the year ended December 31,

Qualified Pension Plan
2013

2014

2012

2014

SERP
2013

2012

In thousands

Service cost for benefits earned
during the year..................................
Interest cost on projected benefit
obligation..........................................
Expected return on plan assets .........
Amortization of prior service cost....
Recognized net loss ..........................
Additional amount recognized due
to curtailment/settlement ..................
Net pension benefit cost.................
Change in prior service cost .............
Change in net gain or loss ................
Amortization of prior service cost....
Amortization of net loss ...................

Total recognized in other
comprehensive income (loss).........
Total recognized in net periodic
benefit cost and other
comprehensive income (loss).........

11,759

14,347

14,075

256

340

28,835

(41,047)
98

4,106

25,596
(41,347)
98

9,291

26,312
(37,878)
98

7,844

—

342

—
—

—

311

—
—

261

276

3,751

7,985

10,451

— $

689

— $

1,188

— $

66,165

(98)

(4,106)

(51,465)
(98)
(9,291)

20,365
(98)
(7,844)

660

—
(91)

(1,052)
—
(261)

380

408

—
—

169

198

1,155

—

815

—
(169)

61,961

(60,854) $

12,423

569

(1,313) $

646

65,712

(52,869) $

22,874

1,258

(125) $

1,801

The following tables show the amount of the contributions made to the Qualified Pension Plan and SERP during each period
and the amount of contributions the Company expects to make during 2015:

In thousands
Contributions..............................................................

10,000

819

2,291

Qualified Pension Plan

SERP

2014

2013

2014

2013

Qualified Pension Plan (a)

SERP

In thousands
531
Expected contributions during 2015..................................
(a) As of the date of this report, the Company has already contributed this $10.0 million to the qualified pension plan; no further
contributions are expected to be made in 2015.

10,000

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
For the Years Ended December 31, 2014, 2013 and 2012

14. PENSION PLANS (CONTINUED)

Obligations and Funded Status - continued

Expected future benefit payments, which reflect expected future service, are as follows:

In thousands
2015......................................................................................................................................
2016......................................................................................................................................
2017......................................................................................................................................
2018......................................................................................................................................
2019......................................................................................................................................
2020-2024.............................................................................................................................

30,713
32,441
34,053
35,470
37,085
206,438

531
522
3,014
500
488
4,407

Qualified
Pension Plan

SERP

In October 2014, the SOA finalized a new set of mortality tables. Mortality is a key assumption in developing actuarial
estimates, and therefore could significantly impact the valuation of the Company's obligations under the qualified pension plan
and SERP. The Company reviewed the new mortality data at December 31, 2014. Based on the size and demographics of the
plan's participant population, the Company determined RP-2000 Scale AA Generational based mortality table is the most
appropriate assumption.

Prior to 2014, the Company used the Citigroup Discount Yield Curve in generating its discount rate assumption. As part of the
Company's annual evaluation of its assumptions, the Citigroup Above Median Double-A Curve was deemed to be a more
appropriate basis for generating our discount rate assumption, as the future cash flows of the plan are more closely aligned to
the Above Median Double-A Curve. The actuarial assumptions used in determining benefit obligations of the pension plans are
as follows:

At December 31,

Qualified Pension Plan

SERP

2014

2013

2014

2013

Discount rate ....................................................................................

3.80%

4.60%

3.15%

3.60%

The actuarial assumptions used in determining the net periodic benefit cost of the pension plans are as follows:

Discount rate ....................................................................................
Expected return on plan assets .........................................................
Average rate of increase in compensation levels..............................

4.60%
7.50%
N/A

3.70%
7.50%
N/A

3.60%
N/A
N/A

2.85%
N/A
N/A

For the year ended December 31,
SERP

Qualified Pension Plan

2014

2013

2014

2013

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
For the Years Ended December 31, 2014, 2013 and 2012

14. PENSION PLANS (CONTINUED)

Qualified Pension Plan Assets

The expected return on plan assets rate was determined based upon historical returns adjusted for estimated future market
fluctuations. For 2014 and 2013, the expected rate of return on plan assets was 7.5%. During 2014, the actual return on pension
plan assets, net of expenses, was 11.4%.

Plan assets are invested in a diversified portfolio consisting of equity and fixed income securities. The investment goals for
pension plan assets are to improve and/or maintain the Plan’s funded status by generating long-term asset returns that exceed
the rate of growth of the Plan’s liabilities. The Plan invests assets in a manner that seeks to (a) maximize return within
reasonable and prudent levels of risk of loss of funded status; and (b) maintain sufficient liquidity to meet benefit payment
obligations and other periodic cash flow requirements on a timely basis. The return generation/liability matching asset
allocation ratio is currently 48.5%/51.5%. As the plan’s funded status changes, the pension plan’s Administrative Committee
(the management committee that is responsible for plan administration) will act through an immediate or gradual process, as
appropriate, to reallocate assets.

Under the current investment policy no Investment Manager may invest in investments deemed illiquid by the Investment
Manager at the time of purchase, development programs, real estate, mortgages or private equities or securities of Kaman
Corporation without prior written authorization from the Finance Committee of the Board of Directors. In addition, with the
exception of U.S. Government securities, managers’ holdings in the securities of any one issuer, at the time of purchase, may
not exceed 7.5% of the total market value of that manager’s account.

The pension plan assets are valued at fair value. The following is a description of the valuation methodologies used for the
investments measured at fair value, including the general classification of such instruments pursuant to the valuation hierarchy.

Short-term Investments – This investment category consists of cash and cash equivalents and futures and options contracts.
Cash and cash equivalents are comprised of investments with maturities of three months or less when purchased, including
certain short-term fixed-income securities, and are classified as Level 1 investments. Futures contracts and options contracts
requiring the investment managers to receive from or pay to the broker an amount of cash equal to daily fluctuations are
included in short-term investments and are classified as Level 2 investments.

Corporate Stock – This investment category consists of primarily domestic common stock issued by U.S. corporations.
Common shares are traded actively on exchanges and price quotes for these shares are readily available. Holdings of corporate
stock are classified as Level 1 investments.

Mutual Funds –Mutual funds are traded actively on public exchanges. The share prices for these mutual funds are published at
the close of each business day. Holdings of mutual funds are classified as Level 1 investments.

Common Trust Funds – Common trust funds are comprised of shares or units in commingled funds that are not publicly
traded. The values of the commingled funds are not publicly quoted and must trade through a broker. For equity and fixed-
income commingled funds traded through a broker, the fund administrator values the fund using the net asset value (“NAV”)
per fund share, derived from the value of the underlying assets. The underlying assets in these funds (equity securities, fixed
income securities, and commodity-related securities) are publicly traded on exchanges and price quotes for the assets held by
these funds are readily available. Holdings of common trust funds are classified as Level 2 investments.

Fixed Income Securities - For fixed income securities, multiple prices and price types are obtained from pricing vendors
whenever possible, which enables cross-provider validations. A primary price source is identified based on asset type, class or
issue for each security. The fair values of fixed income securities are based on evaluated prices that reflect observable market
information, such as actual trade information of similar securities, adjusted for observable differences, and are categorized as
Level 2. These securities are primarily investment grade securities.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
For the Years Ended December 31, 2014, 2013 and 2012

14. PENSION PLANS (CONTINUED)

Plan Assets for Qualified Pension Plan

The fair values of the Company’s qualified pension plan assets at December 31, 2014 and 2013, are as follows:

Total Carrying
Value at
December 31,
2014

Quoted prices in
active markets
(Level 1)

Significant other
observable
inputs
(Level 2)

Significant
unobservable
inputs
(Level 3)

In thousands
Short-term investments: ................................
Cash and cash equivalents ..........................
Futures contracts.........................................

Fixed income securities:

U.S. Government and agency securities (a) .
Bonds:

Corporate fixed income ............................
Foreign fixed income ...............................
Other fixed income (b)...............................
Mutual funds .................................................
Common trust funds......................................
Corporate stock .............................................
Subtotal .........................................................
Accrued income/expense ..............................
Total...............................................................

12,063
—

— $
—

83,915

112,811
—
2,080
93,659
240,438
49,802
594,768
1,965
596,733

—

83,915

—
—
—
93,659
—
49,802
155,524
47
155,571

112,811
—
2,080
—
240,438
—
439,244
1,918
441,162

—
—

—

—
—
—
—
—
—
—
—
—

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
For the Years Ended December 31, 2014, 2013 and 2012

14. PENSION PLANS (CONTINUED)

Plan Assets for Qualified Pension Plan - continued

Total Carrying
Value at
December 31,
2013

Quoted prices in
active markets
(Level 1)

Significant other
observable
inputs
(Level 2)

Significant
unobservable
inputs
(Level 3)

In thousands
Short term investments:
Cash and cash equivalents...........................
Futures contracts .........................................
Fixed income securities:

23,668
(2,196)

23,668
—

— $

(2,196)

—
—

—

61,592

US Government and agency securities (a) .
Bonds:
—
Corporate fixed income .........................
—
Foreign fixed income.............................
Other fixed income (b).............................
—
—
Mutual funds .................................................
—
Common trust funds......................................
—
Corporate stock .............................................
—
Subtotal .........................................................
—
Accrued income ............................................
—
Total...............................................................
(a) This category represents investments in debt securities issued by the U.S. Treasury, other U.S. government corporations and
agencies, states and municipalities.
(b) This category primarily represents investments in commercial and residential mortgage-backed securities.

—
—
—
71,244
—
47,035
141,947
39
141,986

81,601
10,291
3,467
—
256,949
—
411,704
1,710
413,414

81,601
10,291
3,467
71,244
256,949
47,035
553,651
1,749
555,400

Derivatives are primarily used to manage risk and gain asset class exposure while still maintaining liquidity. Derivative
instruments mainly consist of equity futures and interest rate futures.

Other Plans

The Company also maintains a Defined Contribution Plan that has been adopted by most of its U.S. subsidiaries. Employees of
the adopting employers who meet the eligibility requirements of the plan may participate. Employer matching contributions are
made to the plan based on a percentage of each participant’s pre-tax contribution. For each dollar that a participant contributes,
up to 5% of compensation, participating subsidiaries make employer contributions of one dollar. Employer contributions to the
plan totaled $11.2 million, $10.4 million and $9.3 million in 2014, 2013 and 2012, respectively.

One of the Company’s acquired U.S. subsidiaries maintains a separate defined contribution plan for its eligible employees.
Employer matching contributions are made on a discretionary basis. Additionally, one of our foreign subsidiaries maintains a
defined benefit plan of its own for its local employees. The net pension liability associated with these plans as of December 31,
2014, of $0.3 million is included in other accruals and payables on the Consolidated Balance Sheet.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
For the Years Ended December 31, 2014, 2013 and 2012

15. OTHER LONG-TERM LIABILITIES

Other long-term liabilities consist of the following:

In thousands
Supplemental employees' retirement plan ("SERP") .......................................................................
Deferred compensation ....................................................................................................................
Long-term incentive plan .................................................................................................................
Noncurrent income taxes payable ....................................................................................................
Environmental remediation liability.................................................................................................
Other.................................................................................................................................................
Total ...............................................................................................................................................

At December 31,
2013
2014

9,818
14,601
7,527
2,300
7,370
4,031
45,647

9,091
13,472
7,051
3,332
8,256
5,836
47,038

Disclosures regarding the assumptions used in the determination of the SERP liabilities are included in Note 14, Pension Plans.
Discussions of our environmental remediation liabilities are in Note 10, Environmental Costs, and Note 16, Commitments and
Contingencies.

The Company maintains a non-qualified deferred compensation plan for certain of its employees as well as a non-qualified
deferred compensation plan for its Board of Directors. Generally, participants in these plans have the ability to defer a certain
amount of their compensation, as defined in the agreement. The deferred compensation liability will be paid out either upon
retirement or as requested based upon certain terms in the agreements and in accordance with Internal Revenue Code Section
409A.

16. COMMITMENTS AND CONTINGENCIES

Asset Retirement Obligations

The Company has unrecorded Asset Retirement Obligation’s (“AROs”) that are conditional upon certain events. These AROs
generally include the removal and disposition of non-friable asbestos. The Company has not recorded a liability for these
conditional AROs at December 31, 2014, because the Company does not currently believe there is a reasonable basis for
estimating a date or range of dates for major renovation or demolition of these facilities. In reaching this conclusion, the
Company considered the historical performance of each facility and has taken into account factors such as planned
maintenance, asset replacements and upgrades, which, if conducted as in the past, can extend the physical lives of the facilities
indefinitely. The Company also considered the possibility of changes in technology and risk of obsolescence in arriving at its
conclusion.

The Company currently leases various properties under leases that give the lessor the right to make the determination as to
whether the lessee must return the premises to their original condition, except for normal wear and tear. The Company does not
normally make substantial modifications to leased property, and many of the Company's leases either require lessor approval of
planned improvements or transfer ownership of such improvements to the lessor at the termination of the lease. Historically we
have not incurred significant costs to return leased premises to their original condition.

Operating Leases

Rent commitments under various leases for office space, warehouses, land and buildings expire at varying dates from January
2015 to November 2023. The terms of most of these leases are in the range of 3 to 5 years. Some of the Company’s leases have
rent escalations, rent holidays or contingent rent that are recognized on a straight-line basis over the entire lease term. Material
leasehold improvements and other landlord incentives are amortized over the shorter of their economic lives or the lease term,
including renewal periods, if reasonably assured. Certain annual rentals are subject to renegotiation, with certain leases
renewable for varying periods.

Lease periods for machinery and equipment range from 1 to 5 years.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
For the Years Ended December 31, 2014, 2013 and 2012

16. COMMITMENTS AND CONTINGENCIES (CONTINUED)

Operating Leases - continued

Substantially all real estate taxes, insurance and maintenance expenses associated with leased facilities are obligations of the
Company. It is expected that in the normal course of business leases that expire will be renewed or replaced by leases on other
similar property.

The following minimum future rental payments are required under operating leases that have initial or remaining non-
cancellable lease terms in excess of one year as of December 31, 2014:

In thousands
2015........................................................................................................................................................................ $
2016........................................................................................................................................................................
2017........................................................................................................................................................................
2018........................................................................................................................................................................
2019........................................................................................................................................................................
Thereafter ...............................................................................................................................................................

Total ..................................................................................................................................................................... $

22,352
16,902
10,357
5,206
3,856
8,312
66,985

Lease expense for all operating leases, including leases with terms of less than one year, amounted to $25.0 million, $24.6
million and $23.6 million for 2014, 2013 and 2012, respectively.

Capital Leases

During 2014, the Company entered into a master leasing agreement with PNC Equipment Finance for financing the purchases
of equipment, with total capacity of $5.0 million. Such leases are classified as capital for accounting purposes and are recorded
at the present value of the future minimum lease payments at the inception of the lease. Amounts due under capital leases are
recorded as liabilities, while assets acquired under capital leases are recorded as equipment. Amortization of assets recorded
under capital leases is included in depreciation and amortization expense. As of December 31, 2014, commencement of leases
under this program has not yet occurred.

Legal Matters

Wichita Subpoena Matter

Other Matters

Revenue Sharing Agreement with the Commonwealth of Australia

During the third quarter of 2014, the Company settled its revenue sharing agreement with the Commonwealth of Australia with
respect to the eleven Australia SH-2G(A) (now designated SH-2G(I)) aircraft, spare parts, and full mission flight simulator, and
made a final payment of $5.3 million. As a result, no further revenue sharing payments will be due to the Commonwealth of
Australia as the Company sells the remainder of the SH-2G(I) inventory. Over the course of the revenue sharing agreement, net
of the benefits derived from our hedging arrangements, the Company paid approximately $32.1 million to the Commonwealth
of Australia.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
For the Years Ended December 31, 2014, 2013 and 2012

16. COMMITMENTS AND CONTINGENCIES (CONTINUED)

Other Matters - continued

Moosup

During the third quarter of 2014, the Company sold its former manufacturing facility in Moosup, Connecticut to TD
Development, LLC. In connection with the sale, the Company will contribute $4.0 million in cash to an escrow account over a
four-year period to fund environmental remediation work that is expected to be performed on the site. The purchase and sale
agreement provides that TD Development is responsible for any costs in excess of the $4.0 million contributed by the
Company. The first of these payments, $0.8 million, was made at the closing of the transaction. The Company currently has
$3.2 million accrued representing the remainder due to TD Development of which $0.8 million is included in other accruals
and payables and the balance is included with other long-term environmental remediation liabilities.

New Hartford

In connection with sale of the Company’s Music segment in 2007, the Company assumed responsibility for meeting certain
requirements of the Connecticut Transfer Act (the “Transfer Act”) that applied to our transfer of the New Hartford, Connecticut,
facility leased by that segment for guitar manufacturing purposes (“Ovation”). Under the Transfer Act, those responsibilities
essentially consist of assessing the site's environmental conditions and remediating environmental impairments, if any, caused
by Ovation's operations prior to the sale. The site is a multi-tenant industrial park, in which Ovation and other unrelated entities
lease space. The environmental assessment, which began in 2008, is still in process.

The Company's estimate of its portion of the cost to assess the environmental conditions and remediate this site is $2.2 million,
unchanged from previously reported estimates, all of which has been accrued. The total amount paid to date in connection with
these environmental remediation activities is $0.5 million. A portion ($0.5 million) of the accrual related to this property is
included in other accruals and payables and the balance is included in other long-term liabilities. The remaining balance of the
accrual reflects the total anticipated cost of completing these environmental remediation activities. Although it is reasonably
possible that additional costs will be paid in connection with the resolution of this matter, the Company is unable to estimate
the amount of such additional costs, if any, at this time.

Bloomfield

In connection with the Company’s 2008 purchase of the portion of the Bloomfield campus that Kaman Aerospace Corporation
had leased from NAVAIR, the Company assumed responsibility for environmental remediation at the facility as may be
required under the Transfer Act and continues the effort to define the scope of the remediation that will be required by the
Connecticut Department of Environmental Protection ("CTDEP"). The assumed environmental liability of $10.3 million was
determined by taking the undiscounted estimated remediation liability of $20.8 million and discounting it at a rate of 8%. This
remediation process will take many years to complete. The total amount paid to date in connection with these environmental
remediation activities is $8.9 million. A portion ($1.7 million) of the accrual related to this property is included in other
accruals and payables, and the balance is included in other long-term liabilities. Although it is reasonably possible that
additional costs will be paid in connection with the resolution of this matter, the Company is unable to estimate the amount of
such additional costs, if any, at this time.

United Kingdom

In connection with the purchase of U.K. Composites, the Company accrued, at the time of acquisition, £1.6 million for
environmental compliance at the facilities. The remaining balance of the accrual at December 31, 2014, was £0.1 million, with
£1.2 million having been paid to date in connection with these environmental remediation activities and £0.4 million released
to income. The U.S. dollar equivalent of the remaining environmental compliance liability as of December 31, 2014, is $0.1
million, which is included in other accruals and payables. The Company continues to assess the work that may be required,
which may result in a change to this accrual. Although it is reasonably possible that additional costs will be paid in connection
with the resolution of this matter, the Company is unable to estimate the amount of such additional costs, if any, at this time.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
For the Years Ended December 31, 2014, 2013 and 2012

17. COMPUTATION OF EARNINGS PER SHARE

The computation of basic earnings per share is based on net earnings divided by the weighted average number of shares of
common stock outstanding for each year. The computation of diluted earnings per share includes the common stock
equivalency of dilutive options granted to employees under the Stock Incentive Plan.

Excluded from the diluted earnings per share calculation for the years ended December 31, 2014, 2013 and 2012, respectively,
are 342,994, 391,717 and 338,248 shares associated with equity awards granted to employees that are anti-dilutive based on the
average stock price.

For the years ended December 31, 2014, 2013 and 2012, shares issuable under the Convertible Notes that were dilutive during
the period were included in the calculation of earnings per share as the conversion price for the Convertible Notes was less than
the average share price of the Company's stock. Excluded from the diluted earnings per share calculation for the years ended
December 31, 2014, 2013 and 2012, respectively were 3,411,539, 3,404,626, and 3,396,841 shares, issuable under the warrants
sold in connection with the Company’s Convertible Note offering as they would be anti-dilutive. For further information on the
Convertible Notes, see Note 11, Debt.

In thousands, except per share amounts

Earnings from continuing operations.....................................................................
Earnings (loss) from discontinued operations, net of tax ......................................
Gain (loss) on disposal of discontinued operations, net of tax ..............................
Net earnings ...........................................................................................................

Basic:

Weighted average number of shares outstanding...................................................

Earnings per share from continuing operations .....................................................
Earnings (loss) per share from discontinued operations ........................................
Earnings (loss) per share from disposal of discontinued operations......................
Basic earnings per share.........................................................................................

Diluted:

Weighted average number of shares outstanding...................................................
Weighted average shares issuable on exercise of dilutive stock options...............
Weighted average shares issuable on exercise of convertible notes......................
Total................................................................................................................

Earnings per share from continuing operations .....................................................
Earnings (loss) per share from discontinued operations ........................................
Earnings (loss) per share from disposal of discontinued operations......................
Diluted earnings per share .....................................................................................

For the Year Ended December 31,
2012
2013
2014

65,780
(2,924)
(4,984)
57,872

59,066
(2,386)
420

52,947

755

1,323

57,100

55,025

27,053

26,744

26,425

2.43
(0.11)
(0.18)
2.14

2.21
(0.09)
0.02

2.14

2.00

0.03

0.05

2.08

27,053

26,744

26,425

147

577

159

240

162

27,777

27,143

26,622

2.37
(0.11)
(0.18)
2.08

2.17
(0.09)
0.02

2.10

1.99

0.03

0.05

2.07

100

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
For the Years Ended December 31, 2014, 2013 and 2012

18. SHARE-BASED ARRANGEMENTS

General

The Company accounts for stock options, restricted stock awards, restricted stock units and performance shares as equity
awards and measures the cost of all share-based payments, including stock options, at fair value on the grand date and
recognizes this cost in the statement of operations. The Company also has an employee stock purchase plan which is accounted
for as a liability award.

Compensation expense for stock options, restricted stock awards and restricted stock units is recognized on a straight-line basis
over the vesting period of the awards. Share-based compensation expense recorded for the years ended December 31, 2014,
2013, and 2012 was $5.4 million, $5.0 million, and $5.9 million, respectively.

Stock Incentive Plan

On April 17, 2013, the shareholders of the Company approved the 2013 Management Incentive Plan (the "2013 Plan"), which
replaced the 2003 Stock Incentive Plan. The 2013 Plan provides the Company with the ability to use equity-based awards of up
to 2,250,000 authorized shares and is designed as a flexible share authorization plan, such that the Company's share
authorization is based on the least costly type of award (stock options). Shares issued pursuant to “Full Value Awards” as
defined in the 2013 Plan (awards other than stock options or stock appreciation rights which are settled by the issuance of
shares, e.g., restricted stock, restricted stock units, performance shares, performance units if settled with stock, or other stock-
based awards) count against the 2013 Plan's share authorization at a rate of 3 to 1, while shares issued upon exercise of stock
options or stock appreciation rights count against the share authorization at a rate of 1 to 1. This means that every time an
option is granted, the authorized pool of shares is reduced by one (1) share and every time a Full Value Award is granted, the
authorized pool of shares is reduced by 3 shares. In deriving the valuation ratio used in the 2013 Plan, the Company used the
Black Scholes Fair Value model as the basis for determining the approximate value of an option as compared to a "full value
share." As of December 31, 2014, there were 1,733,205 shares available for grant under the plan.

LTIP awards provide certain senior executives an opportunity to receive award payments in either stock or cash as determined
by the Personnel and Compensation Committee of the Board of Directors in accordance with the Plan, at the end of each
performance cycle. For the performance cycle, the Company’s financial results are compared to the Russell 2000 indices for the
same periods based upon the following: (a) average return on total capital, (b) earnings per share growth and (c) total return to
shareholders. No awards will be payable unless the Company’s performance is at least in the 25th percentile of the designated
indices. The maximum award is payable if performance reaches the 75th percentile of the designated indices. Awards are paid
out at 100% at the 50th percentile. Awards for performance between the 25th and 75th percentiles are determined by straight-line
interpolation. Generally, LTIP awards are paid in cash.

Stock options are granted with an exercise price equal to the average market price of our stock at the date of grant. Stock
options and Stock Appreciation Rights ("SARs") granted under the plan generally expire ten years from the date of grant and
vest 20% each year over a 5-year period on each of the first five anniversaries of the date of grant. Restricted Stock Awards
("RSAs") are generally granted with restrictions that lapse at the rate of 20% per year over a 5-year period on each of the first
five anniversaries of the date of grant. Generally, these awards are subject to forfeiture if a recipient separates from service with
the Company.

During the first quarter of 2014, the Company issued stock awards totaling 10,934 shares with market and performance based
conditions. The Company measured the cost of these awards based on their fair value at the date of grant to the extent of the
probable number of shares to be earned upon vesting. Amortization of this cost will be recorded on a straight-line basis over the
requisite service period. Throughout the course of the requisite service period, the Company will monitor the level of
achievement compared to the target and adjust the number of shares expected to be earned, and the related compensation
expense recorded thereafter, to reflect the updated most probable outcome. Compensation expense for these awards for the year
ended December 31, 2014, was not material.

101

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
For the Years Ended December 31, 2014, 2013 and 2012

18. SHARE-BASED ARRANGEMENTS (CONTINUED)

Stock Incentive Plan - continued

Stock option activity is as follows:

Options outstanding at December 31, 2013...................................................................
Granted ...................................................................................................................
Exercised.................................................................................................................
Forfeited or expired ................................................................................................
Options outstanding at December 31, 2014...................................................................

891,932
186,885
(163,245)
(11,481)
904,091

28.18
39.22
23.21
35.68
31.26

Options

Weighted average-
exercise price

The following table presents information regarding options outstanding as of December 31, 2014:

Weighted-average remaining contractual term - options outstanding (years) ...........................................................
Aggregate intrinsic value - options outstanding (in thousands)................................................................................. $
Weighted-average exercise price - options outstanding............................................................................................. $
Options exercisable....................................................................................................................................................
Weighted-average remaining contractual term - options exercisable (years)............................................................
Aggregate intrinsic value - options exercisable (in thousands) ................................................................................. $
Weighted-average exercise price - options exercisable ............................................................................................. $

6.2
8,180
31.26
415,955
4.5
5,816
26.33

The intrinsic value represents the amount by which the market price of the stock on the measurement date exceeds the exercise
price of the option. The intrinsic value of options exercised in 2014, 2013 and 2012 was $2.9 million, $1.9 million and $3.2
million, respectively. The Company currently has an open stock repurchase plan, which would enable the Company to
repurchase shares as needed. Since 2008 the Company has generally issued shares related to option exercises and RSAs from
its authorized but unissued common stock.

The fair value of each option award is estimated on the date of grant using the Black-Scholes option valuation model. The
following table indicates the weighted-average assumptions used in estimating fair value:

Expected option term (years) ...................................................................................
Expected volatility....................................................................................................
Risk-free interest rate ...............................................................................................
Expected dividend yield ...........................................................................................
Per share fair value of options granted.....................................................................

2014

2013

2012

5.1
37.5%
1.5%
1.7%

5.2
45.5%
0.9%
2.0%

5.4
46.5%
0.9%
1.9%

11.60

12.38

12.00

The expected term of options granted represents the period of time option grants are expected to be outstanding based upon
historical exercise patterns. Forfeitures of options are estimated based upon historical data and are adjusted based upon actual
occurrences. The cumulative effect of stock award forfeitures was immaterial. The volatility assumption is based on the
historical daily price data of the Company’s stock over a period equivalent to the weighted-average expected term of the
options. Management evaluated whether there were factors during that period that were unusual and would distort the volatility
figure if used to estimate future volatility and concluded that there were no such factors. The Company relies only on historical
volatility since future volatility is expected to be consistent with historical volatility.

The risk-free interest rate assumption is based upon the interpolation of various U.S. Treasury rates determined at the date of
option grant. Expected dividends are based upon a historical analysis of our dividend yield over the past year.

102

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
For the Years Ended December 31, 2014, 2013 and 2012

18. SHARE-BASED ARRANGEMENTS (CONTINUED)

Stock Incentive Plan - continued

Restricted Stock activity is as follows:

Restricted Stock outstanding at December 31, 2013 .............................................
Granted ...........................................................................................................
Vested..............................................................................................................
Forfeited or expired ........................................................................................
Restricted Stock outstanding at December 31, 2014 .............................................

Restricted Stock
Awards

Weighted-
average grant
date fair value

188,647
111,071
(85,374)
(17,791)
196,553

31.23
39.89
31.63
33.80
36.29

The grant date fair value for restricted stock is the average market price of the unrestricted shares on the date of grant. The
total fair value of restricted stock awards vested during 2014, 2013 and 2012 was $4.5 million, $4.6 million and $5.3 million,
respectively.

We record a tax benefit and associated deferred tax asset for compensation expense recognized on non-qualified stock options
and restricted stock for which we are allowed a tax deduction. For 2014, 2013 and 2012, respectively, we recorded a tax benefit
of $1.9 million, $1.7 million and $2.1 million for these two types of compensation expense.

The windfall tax benefit is the tax benefit realized on the exercise of non-qualified stock options and disqualifying dispositions
of stock acquired by exercise of incentive stock options and Employee Stock Purchase Plan stock purchases in excess of the
deferred tax asset originally recorded. The total windfall tax benefit realized in 2014, 2013, and 2012 was $0.8 million, $0.5
million, and $0.9 million, respectively.

As of December 31, 2014, future compensation costs related to non-vested stock options and restricted stock grants is $8.6
million. The Company anticipates that this cost will be recognized over a weighted-average period of 3.1 years.

Employees Stock Purchase Plan

The Kaman Corporation Employees Stock Purchase Plan (“ESPP”) allows employees to purchase common stock of the
Company, through payroll deductions, at 85% of the market value of shares at the time of purchase. The plan provides for the
grant of rights to employees to purchase a maximum of 1,500,000 shares of common stock.

During 2014, 76,805 shares were issued to employees at prices ranging from $32.48 to $36.42. During 2013, 85,702 shares
were issued to employees at prices ranging from $28.34 to $32.43. During 2012, 90,048 shares were issued to employees at
prices ranging from $24.09 to $30.79. At December 31, 2014, there were 388,632 shares available for purchase under the plan.

19. SEGMENT AND GEOGRAPHIC INFORMATION

The Company is organized based upon the nature of its products and services, and is composed of two operating segments each
overseen by a segment manager. These segments are reflective of how the Company’s Chief Executive Officer, who is its
Chief Operating Decision Maker (“CODM”), reviews operating results for the purposes of allocating resources and assessing
performance. The Company has not aggregated operating segments for purposes of identifying reportable segments.

The Distribution segment is a leading power transmission, motion control, and fluid power industrial distributor with
operations throughout the United States. Distribution conducts business in the mechanical power transmission and bearings,
electrical, automation and control, and fluid power product platforms and provides total solutions from system design and
integration to machine parts and value-added services to the national manufacturing industry.

103

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
For the Years Ended December 31, 2014, 2013 and 2012

19. SEGMENT AND GEOGRAPHIC INFORMATION (CONTINUED)

The Aerospace segment produces and/or markets widely used proprietary aircraft bearings and components; complex metallic
and composite aerostructures for commercial, military and general aviation fixed and rotary wing aircraft; safe and arm
solutions for missile and bomb systems for the U.S. and allied militaries; subcontract helicopter work; support for the
Company’s SH-2G Super Seasprite maritime helicopters and K-MAX® medium-to-heavy lift helicopters; and engineering
services.

Summarized financial information by business segment is as follows:

For the year ended December 31,
2012
2013
2014

In thousands
Net sales from continuing operations:

Distribution .......................................................................................................
Aerospace (a) ......................................................................................................
Net sales ...................................................................................................................
Operating income:

Distribution .......................................................................................................
Aerospace (b)......................................................................................................
Net gain (loss) on sale of assets ........................................................................
Corporate expense.............................................................................................
Operating income from continuing operations.........................................................
Interest expense, net .................................................................................................
Other expense (income), net.....................................................................................
Earnings before income taxes from continuing operations ......................................
Income tax expense ..................................................................................................
Earnings from continuing operations .......................................................................

$ 1,161,992
632,970
$ 1,794,962

$ 1,039,954
613,967
$ 1,653,921

982,573
580,769
$ 1,563,342

56,765
108,697
(233)
(54,722)
110,507
13,382
623
96,502
30,722
65,780

46,206
102,573
(142)
(45,291)
103,346
12,294
398
90,654
31,588
59,066

49,316
89,142
(110)
(46,759)
91,589
12,113
(219)
79,695
26,748
52,947

(a) Net sales by the Aerospace segment under contracts with U.S. Government agencies (including sales to foreign governments
through foreign military sales contracts with U.S. Government agencies) totaled $271.7 million, $262.9 million and $303.5
million in 2014, 2013 and 2012, respectively.

(b) Operating income for 2013 includes a 2.1 million non-cash non-tax deductible goodwill impairment charge. Operating
income for 2012 includes a $3.3 million loss associated with the resolution of a program related matter.

104

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
For the Years Ended December 31, 2014, 2013 and 2012

19. SEGMENT AND GEOGRAPHIC INFORMATION (CONTINUED)

In thousands
Identifiable assets (a):

At December 31,
2013

2012

2014

Distribution .......................................................................................................
Aerospace..........................................................................................................
Corporate (b).......................................................................................................

547,350

480,117

449,552

531,868

121,987

557,831

102,683

521,080

126,361

Total assets
Capital expenditures:................................................................................................
Distribution .......................................................................................................
Aerospace..........................................................................................................
Corporate...........................................................................................................
Total capital expenditures.........................................................................................
Depreciation and amortization:

Distribution .......................................................................................................
Aerospace..........................................................................................................
Corporate...........................................................................................................
Total depreciation and amortization.........................................................................

$ 1,201,205

$ 1,140,631

$ 1,096,993

12,205

12,034

12,044

4,034

28,283

14,461

16,039

5,709

21,193

7,625

40,852

11,236

15,041

5,278

10,684

15,293

6,409

32,386

9,347

13,947

4,871

36,209

31,555

28,165

(a) Identifiable assets are year-end assets at their respective net carrying values segregated as to segment and corporate use.

(b) For the periods presented, the corporate identifiable assets are principally comprised of cash, short-term and long-term
deferred income tax assets, capitalized debt issuance costs, cash surrender value of life insurance policies and fixed assets.

The following table summarizes total sales of the Company, which are principally derived from the sale of products:

For the year ended December 31,

2014

2013

2012

in thousands
Bearings and Power Transmission (a)......................................................
Automation, Control and Energy............................................................
Fluid Power.............................................................................................
Military and Defense ..............................................................................
Commercial Aerospace...........................................................................
Total sales (b) ...........................................................................................

630,557

622,041

300,861
230,574

391,532

241,438

271,465
146,448

384,088

229,879

622,149

220,999
139,425

346,290

234,479

1,794,962

1,653,921

1,563,342

(a) Aerospace bearings are not included in this caption, as they are broken out by Military and Defense and Commercial
Aerospace.
(b) Service revenue was not material for the years ended December 31, 2014, 2013 and 2012.

105

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
For the Years Ended December 31, 2014, 2013 and 2012

19. SEGMENT AND GEOGRAPHIC INFORMATION (CONTINUED)

Sales are attributed to geographic regions based on the location to which the product is shipped. Geographic distribution of
sales recorded by continuing operations is as follows:

For the year ended December 31,
2013

2012

2014

In thousands
North America..............................................................................................
Europe ..........................................................................................................
Middle East ..................................................................................................
Asia...............................................................................................................
Oceania.........................................................................................................
Other.............................................................................................................
Total..............................................................................................................

1,576,041
117,686
4,378
29,115
65,122
2,620
1,794,962

Geographic distribution of long-lived assets is as follows:

In thousands
United States ............................................................................................................................
United Kingdom.......................................................................................................................
Germany ...................................................................................................................................
Mexico......................................................................................................................................
Total..........................................................................................................................................

20. SUBSEQUENT EVENTS

1,442,475
107,297
39,357
32,414
28,892
3,486
1,653,921

1,415,370
99,187
4,023
29,196
10,249
5,317
1,563,342

At December 31,

2014

2013

419,457
60,175
18,842
1,774
500,248

373,268
64,585
20,260
2,978
461,091

The Company has evaluated subsequent events through the issuance date of these financial statements. There have been no material
subsequent events that require disclosure.

106

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

ITEM 9.

None.

ITEM 9A.

CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

The Company has carried out an evaluation, under the supervision and with the participation of our management, including the
Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and operation of the Company’s
disclosure controls and procedures. Based upon that evaluation, the Chief Executive Officer and the Chief Financial Officer
have concluded that, as of December 31, 2014, the Company's disclosure controls and procedures were effective.

Management’s Report on Internal Control Over Financial Reporting

The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting.
Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external reporting purposes in accordance with U.S. generally
accepted accounting principles. Because of its inherent limitations, internal control over financial reporting may not prevent or
detect misstatements. Management has assessed the effectiveness of the Company’s internal control over financial reporting as
of December 31, 2014.

In making its assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31,
2014, management utilized the criteria set forth by the Committee of Sponsoring Organizations ("COSO") of the Treadway
Commission in Internal Control—Integrated Framework (2013). Management concluded that based on its assessment the
Company’s internal control over financial reporting was effective as of December 31, 2014. The effectiveness of internal
control over financial reporting as of December 31, 2014, has been audited by PricewaterhouseCoopers LLP, an independent
registered public accounting firm, as stated in their report, which is included in Item 8 of this Annual Report on Form 10-K.

The scope of management's assessment of the effectiveness of internal control over financial reporting excludes the operations
of B.W. Rogers, which the Company acquired through a purchase business combination during the year ended December 31,
2014. The acquired business represented approximately 4% of the Company's consolidated revenues for the year ended
December 31, 2014, and assets associated with the acquired businesses represented approximately 5% of the Company's
consolidated total assets as of December 31, 2014.

Changes in Internal Control Over Financial Reporting

Management of the Company has evaluated, with the participation of the Company’s Chief Executive Officer and Chief
Financial Officer, changes in the Company’s internal controls over financial reporting during 2014.

During the fourth quarter ended December 31, 2014, management made no changes to internal control over financial reporting
that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations of Controls

The Company’s evaluation described in this Item was undertaken acknowledging that there are inherent limitations to the
effectiveness of any system of controls, including the possibility of human error and the circumvention or overriding of the
controls and procedures. Accordingly, even effective controls can only provide reasonable assurance of achieving their control
objectives.

ITEM 9B.

OTHER INFORMATION

None.

107

PART III

ITEM 10.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Other than the list of executive officers of the Company set forth in Item 1, Executive Officers of the Registrant, all information
under this caption may be found in the Company’s proxy statement to be delivered to stockholders in connection with the
Annual Meeting of Shareholders, which is scheduled for April 15, 2015, (the “Proxy Statement”) in the following sections:
“Class 3 Director Nominees for Election at the 2015 Annual Meeting,” “Continuing Directors,” “Section 16(a) Beneficial
Ownership Reporting Compliance,” “Director Nominees,” and “Audit Committee.” Those portions of the Proxy Statement are
incorporated by reference into this Item 10.

ITEM 11.

EXECUTIVE COMPENSATION

Information about the compensation of Kaman’s named executive officers appears under the captions "Compensation
Discussion and Analysis" and "Summary Compensation Table" in the Proxy Statement. Information about the compensation of
Kaman’s directors appears under "Non-Employee Director Compensation" in the Proxy Statement. Those portions of the Proxy
Statement are incorporated by reference into this Item 11.

ITEM 12.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS

Information about security ownership of certain beneficial owners and management appears under "Security Ownership of
Certain Beneficial Owners and Management" in the Proxy Statement. That portion of the Proxy Statement is incorporated by
reference into this Item 12.

ITEM 13.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE

Information about certain relationships and related transactions appears under “Transactions With Related Persons” and “Board
and Committee Independence Requirements” in the Proxy Statement. Those portions of the Proxy Statement are incorporated
by reference into this Item 13.

ITEM 14.

PRINCIPAL ACCOUNTING FEES AND SERVICES

Information regarding audit fees and all other fees, in addition to the Audit Committee’s pre-approval policies and procedures
appears under “Principal Accounting Fees and Services” in the Proxy Statement. That portion of the Proxy Statement is
incorporated by reference into this Item 14.

108

ITEM 15.

EXHIBITS, FINANCIAL STATEMENT SCHEDULES

PART IV

(a)(1)

FINANCIAL STATEMENTS.

See Item 8 of this Form 10-K setting forth our Consolidated Financial Statements.

(a)(2)

FINANCIAL STATEMENT SCHEDULES.

An index to the financial statement schedule immediately precedes such schedule.

(a)(3)

EXHIBITS.
An index to the exhibits filed or incorporated by reference immediately precedes such exhibits.

109

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this
Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized, in the Town of Bloomfield, State of Connecticut,
on this 23rd day of February 2015.

SIGNATURES

KAMAN CORPORATION
(Registrant)

By:

/s/ Neal J. Keating
Neal J. Keating
Chairman, President,
Chief Executive Officer and Director

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons
on behalf of the registrant and in the capacities and on the dates indicated.

Signature

Title:

Date:

/s/ Neal J. Keating

Neal J. Keating

/s/ Robert D. Starr

Robert D. Starr

/s/ John J. Tedone

John J. Tedone

/s/ Neal J. Keating

Neal J. Keating

Attorney-in-Fact for:

Brian E. Barents

E. Reeves Callaway III

Karen M. Garrison

A. William Higgins

Scott E. Kuechle

Eileen S. Kraus

George E. Minnich

Thomas W. Rabaut

Richard J. Swift

Chairman, President,

February 23, 2015

Chief Executive Officer and Director

(Principal Executive Officer)

Senior Vice President

February 23, 2015

and Chief Financial Officer
(Principal Financial Officer)

Vice President – Finance and

February 23, 2015

Chief Accounting Officer

(Principal Accounting Officer)

February 23, 2015

Director

110

KAMAN CORPORATION AND SUBSIDIARIES

Index to Financial Statement Schedule

Report of Independent Registered Public Accounting Firm

Financial Statement Schedule:

Schedule II - Valuation and Qualifying Accounts

111

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON FINANCIAL STATEMENT
SCHEDULE

To the Board of Directors
of Kaman Corporation:

Our audits of the consolidated financial statements and of the effectiveness of internal control over financial reporting referred
to in our report dated February 23, 2015 included under Item 8 in this Annual Report on Form 10-K also included an audit of
the financial statement schedule listed in Item 15(a)(2) of this 2014 Form 10-K as of and for the years ended December 31,
2014 and 2013. In our opinion, this financial statement schedule presents fairly, in all material respects, the information set
forth therein as of and for the years ended December 31, 2014 and 2013 when read in conjunction with the related consolidated
financial statements.

/s/ PricewaterhouseCoopers LLP

Hartford, Connecticut
February 23, 2015

112

KAMAN CORPORATION AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
YEARS ENDED DECEMBER 31, 2014, 2013 AND 2012
(Dollars in Thousands)

DESCRIPTION

Additions

Balance
Beginning of
Period

Charged to
Costs and
Expenses

Others (A)

Deductions
(B)

Balance End
of
Period

2014
Allowance for doubtful accounts........................
2013
Allowance for doubtful accounts........................
2012
Allowance for doubtful accounts........................

3,827

3,148

3,294

1,171

1,635

763

148

322

1,938

1,012

1,231

3,208

3,827

3,148

(A) Additions to allowance for doubtful accounts attributable to acquisitions.
(B) Write-off of bad debts, net of recoveries.

DESCRIPTION

2014
Valuation allowance on deferred tax assets............................
2013
Valuation allowance on deferred tax assets............................
2012
Valuation allowance on deferred tax assets............................

Additions (Reductions)

Balance
Beginning of
Period

Current Year
Provision
(Benefit)

Others

Balance End
of Period

4,657

5,288

3,786

363

531

469

(326) $

4,694

(1,162) $

4,657

1,033

5,288

113

Exhibit 3.1

Exhibit 3.2

Exhibit 4.1

Exhibit 10.1

Exhibit 10.2

Exhibit 10.3

Exhibit 10.4

Exhibit 10.5

Exhibit 10.6

Exhibit 10.7

Exhibit 10.8

Exhibit 10.9

KAMAN CORPORATION
INDEX TO EXHIBITS

Amended and Restated Certificate of Incorporation of the Company (incorporated by
reference to Exhibit 3.1 to the Company's Current Report on Form 8-K dated November
4, 2005, File No. 333-66179).

Previously
Filed

Amended and Restated Bylaws of the Company, (incorporated by reference to Exhibit
3.1 to the Company's Current Report on Form 8-K dated February 28, 2008, File No.
000-01093).

Previously
Filed

Amended and Restated Indenture, dated as of February 23, 2011, by and between the
Company and The Bank of New York Mellon Trust Company, as Trustee (incorporated
by reference to Exhibit 4.1 to the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 2010, File No. 000-01093).

Previously
Filed

Kaman Corporation 2013 Management Incentive Plan (incorporated by reference to
Annex A to the Company's Definitive Proxy Statement on Schedule 14A filed with the
Securities and Exchange Commission on March 1, 2013, File No. 001-35419).*

Previously
Filed

First Amendment to the Kaman Corporation 2013 Management Incentive Plan
(incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-
K dated February 23, 2015, File No. 001-35419).*

Previously
Filed

Form of Nonqualified Stock Option Agreement under the Kaman Corporation 2013
Management Incentive Plan (incorporated by reference to Exhibit 10.1 to the
Company's Current Report on Form 8-K dated February 24, 2014, File No.
001-35419).*

Form of Restricted Share Agreement under the Kaman Corporation 2013 Management
Incentive Plan (incorporated by reference to Exhibit 10.2 to the Company's Current
Report on Form 8-K dated February 24, 2014, File No. 001-35419).*

Form of Restricted Stock Unit Agreement under the Kaman Corporation 2013
Management Incentive Plan (incorporated by reference to Exhibit 10.1 to the
Company’s Current Report on Form 8-K dated June 6, 2014, File No 001-35419).*

Form of Long-Term Performance Award Agreement (Payable in Cash) under the Kaman
Corporation 2013 Management Incentive Plan (incorporated by reference to Exhibit
10.3 to the Company's Current Report on Form 8-K dated February 24, 2014, File No.
001-35419).*

Form of Long-Term Performance Award Agreement (Payable in Shares) granted under
the Kaman Corporation 2013 Management Incentive Plan (incorporated by reference to
Exhibit 10.4 to the Company's Current Report on Form 8-K dated February 24, 2014,
File No. 001-35419).*

Form of Award Agreement for Non-Employee Directors under the Kaman Corporation
2013 Management Incentive Plan.(incorporated by reference to Exhibit 10.6 to the
Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014,
File No. 001-35419).*

Kaman Corporation 2003 Stock Incentive Plan (incorporated by reference to Exhibit 10
(a)(i) to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended
October 2, 2009, File No. 000-01093), as amended by amendments thereto filed with
the SEC on April 7, 2010 (incorporated by reference to Exhibit 99.1 to the Company's
Current Report on Form 8-K dated April 7, 2010, File No. 000-01093) and November 1,
2010 (incorporated by reference to Exhibit 10(b) to the Company's Quarterly Report on
Form 10-Q for the fiscal quarter ended October 1, 2010, File No. 000-01093), and
February 22, 2012 (incorporated by reference to Exhibit 99.2 to the Company's Current
Report on Form 8-K, dated February 22, 2012, File No. 000-01093).*

Previously
Filed

114

Exhibit 10.10

Exhibit 10.11

Exhibit 10.12

Exhibit 10.13

Exhibit 10.14

Exhibit 10.15

Exhibit 10.16

Exhibit 10.17

Exhibit 10.18

Exhibit 10.19

Form of Incentive Stock Option Agreement under the Kaman Corporation 2003 Stock
Incentive Plan (incorporated by reference to Exhibit 10h(i) to the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 2008, File No.
000-01093).*

Form of Non-Statutory Stock Option Agreement under the Kaman Corporation 2003
Stock Incentive Plan (incorporated by reference to Exhibit 10h(ii) to the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 2008, File No.
000-01093).*

Form of Stock Appreciation Rights Agreement under the Kaman Corporation 2003
Stock Incentive Plan (incorporated by reference to Exhibit 10h(iii) to the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 2008, File No.
000-01093).*

Form of Restricted Stock Agreement under the Kaman Corporation 2003 Stock
Incentive Plan (incorporated by reference to Exhibit 10h(iv) to the Company's Form 10-
Q for the fiscal quarter ended June 27, 2007, File No. 000-01093).*

Form of Long Term Performance Award Agreement under the Kaman Corporation 2003
Stock Incentive Plan (incorporated by reference to Exhibit 10h(v) to the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 2011, File No.
001-35419).*

Form of Restricted Stock Unit Agreement under the Kaman Corporation 2003 Stock
Incentive Plan (incorporated by reference to Exhibit 10h(vi) to the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 2009, File No.
000-10093).*

Kaman Corporation Employees Stock Purchase Plan (incorporated by reference to
Exhibit 10(a) to the Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended October 1, 2010, File No. 000-01093), as amended by the First Amendment
thereto filed with the SEC on February 27, 2012 (incorporated by reference to Exhibit
10b to the Company's Annual Report on Form 10-K for the fiscal year ended December
31, 2011, File No. 001-35419) and the Second Amendment thereto filed with the SEC
on February 25, 2013 (incorporated by reference to Exhibit 10.3 to the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 2012, File No.
001-35419).*

Previously
Filed

Third Amendment to Kaman Corporation Employees Stock Purchase Plan.(incorporated
by reference to Exhibit 10.15 to the Company’s Annual Report on Form 10-K for the
fiscal year ended December 31, 2014, File No. 001-35419).*

Previously
Filed

Kaman Corporation Supplemental Employees' Retirement Plan (incorporated by
reference to Exhibit 10c to the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 2000, File No. 333-66179), as amended by an amendment
thereto filed with the SEC on March 5, 2004 (incorporated by reference to Exhibit 10c
to the Company's Annual Report on Form 10-K for the fiscal year ended December 31,
2003, File No. 333-66179), and an amendment thereto filed with the SEC on February
26, 2007 (incorporated by reference to Exhibit 10.10 to the Company's Current Report
on Form 8-K, dated February 26, 2007, File No. 000-01093).*

Post-2004 Supplemental Employees' Retirement Plan (incorporated by reference to
Exhibit 10.11 to the Company's Current Report on Form 8-K, dated February 26, 2007,
File No. 000-01093), as amended by the First Amendment thereto filed with the SEC on
February 28, 2008 (incorporated by reference to Exhibit 10.1 to the Company's Current
Report on Form 8-K, dated February 28, 2008, File No. 000-01093) and the Second
Amendment thereto filed with the SEC on February 25, 2010 (incorporated by reference
to Exhibit 10(c)(iii) to the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 2009, File No. 000-01093).*

Previously
Filed

115

Exhibit 10.20

Exhibit 10.21

Exhibit 10.22

Exhibit 10.23

Exhibit 10.24

Kaman Corporation Amended and Restated Deferred Compensation Plan (incorporated
by reference to Exhibit 10d to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 2002, File No. 333-66179), as amended by an
amendment thereto filed with the SEC on March 5, 2004 (incorporated by reference to
Exhibit 10d to the Company's Annual report on Form 10-K for the fiscal year ended
December 31, 2003 File No. 333-66179), and an amendment thereto filed with the SEC
on August 3, 2004 (incorporated by reference to Exhibit 10(a) to the Company's
Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2004, File No.
333-66179).*

Kaman Corporation Post-2004 Deferred Compensation Plan (incorporated by reference
to Exhibit 10.2 to the Company's Current Report on Form 8-K, dated February 28, 2008,
File No. 000-01093), as amended by the First Amendment thereto filed with the SEC on
February 27, 2012 (incorporated by reference to Exhibit 10d(ii) to the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 2011, File No.
001-35419), the Second Amendment thereto (incorporated by reference to Exhibit 10.20
to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31,
2014, File No. 001-35419), and the Third Amendment thereto (incorporated by
reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K dated
November 21, 2014, File No. 001-35419). *

Kaman Corporation Cash Bonus Plan (incorporated by reference to Exhibit 10e(i) to the
Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2007,
File No. 000-01093), as amended by Amendment No. 1 thereto filed with the SEC on
February 28, 2011 (incorporated by reference to Exhibit 10e(i) to the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 2010, File No.
000-01093).*

Amended and Restated Executive Employment Agreement between Kaman Corporation
and Neal J. Keating, originally dated as of August 7, 2007 and amended and restated as
of November 11, 2008 (incorporated by reference to Exhibit 10g(xviii) to the
Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2008,
File No. 000-01093), as amended by Amendment No. 1 thereto dated January 1, 2010
(incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-
K, dated February 23, 2010, File No. 000-01093), Amendment No. 2 thereto dated
September 17, 2010 (incorporated by reference to Exhibit 10.1 to the Company's
Current Report on Form 8-K, dated September 20, 2010, File No. 000-01093), and
Amendment No. 3 thereto dated November 18, 2014 (incorporated by reference to
Exhibit 10.3 to the Company's Current Report on Form 8-K, dated November 21, 2014,
File No. 000-01093).*

Amended and Restated Change in Control Agreement between Kaman Corporation and
Neal J. Keating, originally dated as of August 7, 2007 and amended and restated as of
November 11, 2008 (incorporated by reference to Exhibit 10g(xix) to the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 2008, File No.
000-01093), as amended by Amendment No. 1 thereto, dated January 1, 2010
(incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-
K dated February 25, 2010, File No. 000-01093), the Second Amendment thereto, dated
March 9, 2010 (incorporated by reference to Exhibit 10.1 to the Company's Current
Report on Form 8-K, dated March 16, 2010, File No. 000-01093), and the Third
Amendment thereto dated as of August 7, 2012 (incorporated by reference to Exhibit
10.1 to the Company's Current Report on Form 8-K dated August 8, 2012, File No.
001-35419).*

Previously
Filed

Exhibit 10.25

Promotion Letter between Kaman Corporation and Robert D. Starr dated as of June 7,
2013 (incorporated by reference to Exhibit 10.1 to the Company's Current Report on
Form 8-K dated April 18, 2013, File No. 001-35419).*

Previously
Filed

Exhibit 10.26

Executive Employment Agreement between Kaman Corporation and Robert D. Starr,
dated as of November 18, 2014 (incorporated by reference to Exhibit 10.1 to the
Company's Current Report on Form 8-K dated November 21, 2014, File No.
001-35419).*

Previously
Filed

116

Exhibit 10.27

Exhibit 10.28

Exhibit 10.29

Exhibit 10.30

Exhibit 10.31

Exhibit 10.32

Exhibit 10.33

Change in Control Agreement between Kaman Corporation and Robert D. Starr dated as
of June 7, 2013 (incorporated by reference to Exhibit 10.1 to the Company's Current
Report on Form 8-K dated June 7, 2013, File No. 001-35419).*

Executive Employment Agreement dated as of November 17, 2008 between Kaman
Corporation and William C. Denninger (incorporated by reference to Exhibit 10.1 of the
Company's Current Report on Form 8-K dated November 13, 2008, File No.
000-01093), as amended by Amendment No. 1 thereto on February 23, 2010
(incorporated by reference to Exhibit 10.3 to the Company's Current Report on Form 8-
K dated February 25, 2010, File No. 000-01093), Amendment No. 2 thereto dated
November 10, 2010 (incorporated by reference to Exhibit 10.1 to the Company's
Current Report on Form 8-K dated November 10, 2010, File No. 000-01093), and the
Third Amendment thereto dated November 7, 2012 (incorporated by reference to
Exhibit 10.2 to the Company's Current Report on Form 8-K dated November 9, 2012,
File No. 001-35419)).*

Change in Control Agreement between Kaman Corporation and William C. Denninger
dated as of November 12, 2008 (incorporated by reference to Exhibit 10.2 of the
Company's Current Report on Form 8-K dated November 13, 2008, File No.
000-01093), as amended by Amendment No. 1 thereto dated January 1, 2010
(incorporated by reference to Exhibit 10.4 to the Company's Current Report on Form 8-
K dated January 1, 2010, File No. 000-01093), the Second Amendment thereto dated
March 8, 2010 (incorporated by reference to Exhibit 10.2 to the Company's Current
Report on Form 8-K dated March 16, 2010, File No. 000-01093), the Third Amendment
thereto dated November 7, 2012 (incorporated by reference to Exhibit 10.2 to the
Company's Current Report on Form 8-K dated November 9, 2012, File No. 001-35419)
and the Fourth Amendment thereto dated March 21, 2013 (incorporated by reference to
Exhibit 10.1 to the Company's Current Report on Form 8-K dated March 21, 2013, File
No. 001-35419).*

Amended and Restated Executive Employment Agreement between Kaman Aerospace
Group, Inc. and Gregory L. Steiner, originally dated as of July 7, 2008 and amended and
restated as of November 11, 2008 (incorporated by reference to Exhibit 10g(xx) to the
Company's Quarterly Report on Form 10-Q for the fiscal quarter ended April 3, 2009,
File No. 000-01093), as amended by Amendment No. 1 thereto, dated June 7, 2011
(incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-
K dated June 7, 2011, File No. 000-01093).*

Amended and Restated Change in Control Agreement between Kaman Aerospace
Group, Inc. and Gregory L. Steiner, originally dated as of dated July 7, 2008 and
amended and restated as of November 11, 2008 (incorporated by reference to Exhibit
10g(xx) to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended
April 3, 2009, File No. 000-01093), as amended by the First Amendment thereto, dated
March 11, 2010 (incorporated by reference to Exhibit 10.3 to the Company's Current
Report on Form 8-K, dated March 16, 2010, File No. 000-01093), and the Second
Amendment thereto, dated June 4, 2013 (incorporated by reference to Exhibit 10.2 to
the Company's Current Report on Form 8-K, dated June 7, 2013, File No. 000-35419).*

Previously
Filed

Executive Employment Agreement between Kaman Industrial Technologies Corporation
and Steven J. Smidler dated as of September 1, 2010 (incorporated by reference to
Exhibit 10.1 to the Company's Current Report on Form 8-K dated September 10, 2010,
File No. 000-01093.)*

Previously
Filed

Change in Control Agreement between Kaman Industrial Technologies Corporation and
Steven J. Smidler dated as of September 1, 2010 (incorporated by reference to Exhibit
10.1 to the Company's Current Report on Form 8-K dated September 10, 2010, File No.
000-01093), as amended by the First Amendment thereto dated November 9, 2011
(incorporated by reference to Exhibit 10.3 to the Company's Current Report on Form 8-
K dated November 9, 2011, File No. 000-01093).*

Previously
Filed

117

Exhibit 10.34

Exhibit 10.35

Exhibit 10.36

Exhibit 10.37

Exhibit 10.38

Exhibit 10.39

Exhibit 10.40

Exhibit 10.41

Exhibit 10.42

Exhibit 10.43

Exhibit 10.44

Amended and Restated Executive Employment Agreement between the Company and
Ronald M. Galla, originally dated as of January 1, 2007 and amended and restated as of
November 11, 2008 (incorporated by reference to Exhibit 10g(v) to the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 2008, File No.
000-01093), as amended by Amendment No. 1 thereto dated December 21, 2010
(incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-
K, dated December 21, 2010, File No. 000-01093).*

Amended and Restated Change in Control Agreement between the Company and
Ronald M. Galla, originally dated as of January 1, 2007 and amended and restated as of
November 11, 2008 (incorporated by reference to Exhibit 10g(xi) to the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 2008, File No.
000-01093), as amended by the First Amendment thereto, dated March 8, 2010
(incorporated by reference to Exhibit 10.6 to the Company's Current Report on Form 8-
K, dated March 16, 2010, File No. 000-01093) and the Second Amendment thereto,
dated November 9, 2011 (incorporated by reference to Exhibit 10.2 on to the Company's
Current Report on Form 8-K, dated on November 9, 2011, File No. 000-01093).*

Change in Control Agreement between Kaman Corporation and Philip A. Goodrich
dated as of June 10, 2013 (incorporated by reference to Exhibit 10.3 to the Company's
Quarterly Report on Form 10-Q for the fiscal quarter ended June 28, 2013, File No.
001-35419).*

Change in Control Agreement between Kaman Corporation and Shawn G. Lisle dated as
of February 4, 2013 (incorporated by reference to Exhibit 10.20 to the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 2012, File No.
001-35419).*

Change in Control Agreement between Kaman Corporation and Gregory T. Troy dated
as of March 26, 2012 (incorporated by reference to Exhibit 10.21 to the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 2012, File No.
001-35419).*

Deferred Compensation Agreement between Kaman Corporation and Eileen S. Kraus
dated August 8, 1995 as amended by First Amendment thereto dated December 8, 2005
(incorporated by reference to Exhibit 10h(vii) to the Company's Annual Report on Form
10-K for the fiscal year ended on December 31, 2005, File No. 000-01093).*

Purchase Agreement dated November 15, 2010, by and among Kaman Corporation,
Merrill Lynch, Pierce, Fenner & Smith Incorporated, and RBS Securities Inc., as
representatives of the several Initial Purchasers (incorporated by reference to Exhibit
10.1 to the Company's Current Report on Form 8-K dated November 19, 2010, File No.
000-01093).

Base Convertible Bond Hedging Transaction Confirmation dated November 15, 2010,
by and between Kaman Corporation and The Royal Bank of Scotland plc, acting
through RBS Securities Inc., as its agent (incorporated by reference to Exhibit 10.2(a) to
the Company's Current Report on Form 8-K dated November 19, 2010, File No.
000-01093).

Base Convertible Bond Hedging Transaction Confirmation dated November 15, 2010,
by and between Kaman Corporation and Goldman, Sachs & Co. (incorporated by
reference to Exhibit 10.2(b) to the Company's Current Report on Form 8-K dated
November 19, 2010, File No. 000-01093).

Base Convertible Bond Hedging Transaction Confirmation dated November 15, 2010,
by and between Kaman Corporation and Bank of America, N.A. (incorporated by
reference to Exhibit 10.2(c) to the Company's Current Report on Form 8-K dated
November 19, 2010, File No. 000-01093).

Confirmation of Base Warrants dated November 15, 2010, by and between Kaman
Corporation and The Royal Bank of Scotland plc, acting through RBS Securities Inc., as
its agent(incorporated by reference to Exhibit 10.3(a) to the Company's Current Report
on Form 8-K dated November 19, 2010, File No. 000-01093).

118

Previously
Filed

Exhibit 10.45

Exhibit 10.46

Exhibit 10.47

Exhibit 10.48

Exhibit 10.49

Exhibit 10.50

Exhibit 10.51

Exhibit 10.52

Exhibit 10.53

Exhibit 10.54

Exhibit 14

Exhibit 16.1

Confirmation of Base Warrants dated November 15, 2010, by and between Kaman
Corporation and Goldman, Sachs & Co. (incorporated by reference to Exhibit 10.3(b) to
the Company's Current Report on Form 8-K dated November 19, 2010, File No.
000-01093).

Confirmation of Base Warrants dated November 15, 2010, by and between Kaman
Corporation and Bank of America, N.A., filed as (incorporated by reference to Exhibit
10.3(c) to the Company's Current Report on Form 8-K dated November 19, 2010, File
No. 000-01093).

Additional Convertible Bond Hedging Transaction Confirmation dated November 17,
2010, by and between Kaman Corporation and The Royal Bank of Scotland plc, acting
through RBS Securities Inc., as its agent, (incorporated by reference to Exhibit 10.4(a)
to the Company's Current Report on Form 8-K dated November 19, 2010, File No.
000-01093).

Additional Convertible Bond Hedging Transaction Confirmation dated November 17,
2010, by and between Kaman Corporation and Goldman, Sachs & Co. (incorporated by
reference to Exhibit 10.4(b) to the Company's Current Report on Form 8-K dated
November 19, 2010, File No. 000-01093).

Additional Convertible Bond Hedging Transaction Confirmation dated November 17,
2010, by and between Kaman Corporation and Bank of America, N.A. (incorporated by
reference to Exhibit 10.4(c) to the Company's Current Report on Form 8-K dated
November 19, 2010, File No. 000-01093).

Confirmation of Additional Warrants dated November 17, 2010, by and between Kaman
Corporation and The Royal Bank of Scotland plc, acting through RBS Securities Inc., as
its agent (incorporated by reference to Exhibit 10.5(a) to the Company's Current Report
on Form 8-K dated November 19, 2010, File No. 000-01093).

Confirmation of Additional Warrants dated November 17, 2010, by and between Kaman
Corporation and Goldman, Sachs & Co. (incorporated by reference to Exhibit 10.5(b) to
the Company's Current Report on Form 8-K dated November 19, 2010, File No.
000-01093).

Confirmation of Additional Warrants dated November 17, 2010, by and between Kaman
Corporation and Bank of America, N.A. (incorporated by reference to Exhibit 10.5(c) to
the Company's Current Report on Form 8-K dated November 19, 2010, File No.
000-01093).

Credit Agreement dated as of November 20, 2012 among Kaman Corporation, RWG
Frankenjura-Industrie Flugwerklager GmbH and Kaman Composites-UK Holdings
Limited, as Borrowers, JPMorgan Chase Bank, N.A. as Co-Syndication Agents, and
Banc of America Securities LLC, RBS Citizens, N.A, as Administrative Agent, and RBS
Citizens, N.A. as Co-Syndication Agents, and J.P. Morgan Securities LLC, RBS
Citizens, N.A. as Co-Lead Arrangers and Book Managers, and various Lenders
signatory thereto (incorporated by reference to Exhibit 10.1 to the Company's Current
Report on Form 8-K dated November 21, 2012, File No. 001-35419.)

Security Agreement dated as of November 20, 2012 among Kaman Corporation,
JPMorgan Chase Bank, N.A., as Administrative Agent and the domestic subsidiary
guarantors signatory thereto (incorporated by reference to Exhibit 10.2 to the
Company's Current Report on Form 8-K dated November 21, 2012, File No.
001-35419.)

Kaman Corporation Code of Business Conduct and Ethics effective as of January 1,
2013 (incorporated by reference to Exhibit 14 to the Company's Current Report on Form
8-K dated November 9, 2012, File No. 001-35419).

Letter of KPMG dated February 21, 2013 (incorporated by reference to Exhibit 16.1 to
the Company's Current Report on Form 8-K dated February 21, 2013, File No.
001-35419).

Previously
Filed

119

Exhibit 16.2

Letter of KPMG dated February 28, 2013 (incorporated by reference to Exhibit 16.1 to
the Company's Current Report on Form 8-K/A Amendment No. 1 dated March 1, 2013,
File No. 001-35419).

Previously
Filed

Exhibit 21

List of Subsidiaries

Filed
Herewith

Exhibit 23.1

Consent of PricewaterhouseCoopers LLP, the Company’s current independent registered
public accounting firm.

Filed
Herewith

Exhibit 23.2

Consent of KPMG LLP, the Company’s former independent registered public
accounting firm.

Exhibit 24

Power of attorney under which this report was signed on behalf of certain directors

Exhibit 31.1

Certification of Chief Executive Officer Pursuant to Rule 13a-14 under the Securities
and Exchange Act of 1934.

Filed
Herewith

Exhibit 31.2

Exhibit 32.1

Exhibit 32.2

Certification of Chief Financial Officer Pursuant to Rule 13a-14 under the Securities
and Exchange Act of 1934.

Filed
Herewith

Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Filed
Herewith

Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Filed
Herewith

101.INS

XBRL Instance Document

101.SCH

XBRL Taxonomy Extension Schema

101.CAL

XBRL Taxonomy Extension Calculation Linkbase

101.DEF

XBRL Taxonomy Extension Definition Linkbase

101.LAB

XBRL Taxonomy Extension Label Linkbase

101.PRE

XBRL Taxonomy Extension Presentation Linkbase

* Management contract or compensatory plan

Filed
Herewith

120

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LEADERSHIP
KAMAN CORPORATION AND SUBSIDIARIES

CORPORATE
LEADERSHIP

AEROSPACE
LEADERSHIP

DISTRIBUTION
LEADERSHIP

DIRECTORS

Neal J. Keating
Chairman, President and
Chief Executive Officer

Ronald M. Galla
Senior Vice President and
Chief Information Officer

Philip A. Goodrich
Senior Vice President –
Corporate Development

Shawn G. Lisle
Senior Vice President, General
Counsel and Assistant Secretary

Robert D. Starr
Senior Vice President and
Chief Financial Officer

Gregory T. Troy
Senior Vice President –
Human Resources and
Chief Human Resources Officer

Jairaj Chetnani
Vice President and Treasurer

Richard C. Forsberg
Vice President –
Chief Ethics and Compliance
Officer and Vice President –
Contracts Management
Kaman Aerospace Group

Michael J. Lyon
Vice President – Tax

Michael J. Morneau
Vice President and Controller

Eric B. Remington
Vice President – Investor
Relations

Richard S. Smith, Jr.
Vice President,
Deputy General Counsel
and Secretary

John J. Tedone
Vice President – Finance
Chief Accounting Officer

James G. Coogan
Assistant Vice President –
SEC Compliance
and External Reporting

Patricia C. Goldenberg
Assistant Vice President and
Assistant Treasurer

Thomas J. McNerney
Assistant Vice President –
Internal Audit

Gary L. Tong
Assistant Vice President –
Corporate Risk, Safety and
Environmental Management

Gregory L. Steiner
President – Kaman Aerospace Group
and Executive Vice President –
Kaman Corporation

Steven J. Smidler
President – Kaman Industrial
Technologies (KIT) and Executive
Vice President – Kaman Corporation

Neal J. Keating
Chairman, President and
Chief Executive Officer
Kaman Corporation

Alphonse J. Lariviere, Jr.
Division President
Kaman Composite Structures

James C. Larwood, Jr.
Division President
Kaman Aerosystems

Nancy L‘Esperance
Vice President – Human Resources
Kaman Aerospace Group

Robert G. Paterson
President
Kamatics Corporation

Gerald C. Ricketts
President –
Precision Products Division of
Kaman Aerospace Corporation

John K. Stockman
Vice President – Finance
Kaman Aerospace Group

Gary V. Tenison
Vice President –Marketing and
Business Development
Kaman Aerospace Group

Clifford A. Ward
Vice President and General Manager
Kaman Engineering Services

Patrick J. Wheeler
Vice President – Strategic Initiatives
Kaman Aerospace Group

William H. Zmyndak
Vice President and General
Manager – Kaman Integrated
Structures & Metallics

Robert G. Manaskie
Vice President and General
Manager – Air Vehicles and MRO

Hermann Mannschatz
Managing Director
RWG GmbH Germany

Roger S. Jorgensen
Senior Vice President – Finance

Gary J. Haseley
Senior Vice President and General
Manager – Automation,
Control and Energy

Patricia W. (Tribby) Warfield
Senior Vice President and General
Manager – Fluid Power

Thomas A. Weihsmann
Senior Vice President and General
Manager – KIT

Joseph P. Bertalli
Vice President Finance and
Business Operations – Automation,
Control and Energy

Jeffrey M. Brown
Vice President – KIT Northeast

Thomas M. Caputo
Vice President – Commercial
Integration

Anthony L. Clark
Vice President – KIT South

Carl A. Conlon
Vice President and Controller

Samuel G. Cooper
Vice President – KIT North Central

Joe Dujka
Vice President – Finance and
Business Operations – KIT

Tom R. Holtry
Vice President – KIT
Intermountain/Pacific Northwest

Michael J. Kelly
Vice President – National Accounts

Bryan K. Larson
Vice President – Corporate
Development

David H. Mayer
Vice President – Marketing and
Services

Brian E. Barents 3,4
President and Chief Executive
Officer, Retired Galaxy Aerospace
Company, LP

E. Reeves Callaway III 3,4
Founder and Chief Executive Officer
The Callaway Companies

Karen M. Garrison 1,4*
President – Business Services, Retired
Pitney Bowes

A. William Higgins 3,4
Chairman, President and
Chief Executive Officer, Retired
CIRCOR International, Inc.

Eileen S. Kraus 1*,2
Lead Independent Director;
Chairman, Retired Fleet Bank
Connecticut

Scott E. Kuechle 2,4
Executive Vice President and
Chief Financial Officer, Retired
Goodrich Corporation

George E. Minnich 1,2*
Senior Vice President and
Chief Financial Officer, Retired
ITT Corporation

Thomas W. Rabaut 2,4
Operating Executive,
The Carlyle Group

Richard J. Swift 1, 3*
Chairman, President and
Chief Executive Officer, Retired
Foster Wheeler, Ltd. and former
Chairman, Financial Accounting
Standards Advisory Council

DIRECTORS
EMERITUS

Frank C. Carlucci
John A. DiBiaggio
Edwin A. Huston
John B. Plott

Michael J. Pastore
Vice President – Operations and ERP

STANDING COMMITTEE
ASSIGNMENTS

Carmen M. Rivera
Vice President – Human Resources

Donald O. Roland
Vice President – Pricing, Process and
Quality

Abraham D. Samaro
Vice President – KIT California

1 Corporate Governance
2 Audit
3 Personnel and Compensation
4 Finance
* Denotes Chairmanship

CORPORATE AND
SHAREHOLDER INFORMATION
Kaman Corporation and Subsidiaries

CORPORATE HEADQUARTERS
Kaman Corporation
1332 Blue Hills Avenue
Bloomfield, Connecticut 06002
(860) 243-7100

STOCK LISTING
Kaman Corporation’s common stock is traded on the
New York Stock Exchange under the symbol KAMN.

INVESTOR, MEDIA AND PUBLIC RELATIONS CONTACT
Eric B. Remington
Vice President, Investor Relations
(860) 243-6334
Eric.Remington@kaman.com

ANNUAL MEETING
The Annual Meeting of Shareholders is scheduled to be
held on Wednesday, April 15, 2015 at 9:00 am local time
at the offices of the company, 1332 Blue Hills Avenue,
Bloomfield, Connecticut, 06002.

TRANSFER AGENT
Computershare
P.O. Box 30170
College Station, TX 77842-3170
(866) 339-2742
www.computershare.com/investor

Overnight correspondence should be sent to:
Computershare
211 Quality Circle, Suite 210
College Station, TX 77845

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Bloomfield, Connecticut

(860) 243–7100

www.kaman.com

IN OUR

2014

ANNUAL REPORT,
WE CELEBRATE
70 YEARS OF
BREAKTHROUGHS.
BUILDING A
FUTURE
THROUGH
INNOVATION.

194
2015

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